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 164th 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, 2022 to March 31, 2023)

Denka Co., Ltd.
(Securities Code: 4061)

1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 toensure the appropriate execution of duties.
1) Systems to ensure that Directors’ and employees’ execution of duties complies with laws andregulations and the Articles of Incorporation
The Board of Directors of the Company performs important decision-making concerning businessexecution 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 andimplementation 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 theofficers 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, theCompany establishes an internal system.
Regarding internal audits, the Company establishes the Internal Control Department as a dedicateddepartment that conducts comprehensive internal auditing. In addition, regarding specialized or specificfields, business units and various committees provide education on compliance with rules andregulations 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 ofinternal 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 thedepartments described above to swiftly identify and address any violations.
2) 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 theBoard of Directors Regulations, job descriptions, and other internal rules and regulations, and stores andmanages 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 toincidents that may greatly affect corporate activities.
Regarding such items as the environment, health and safety, and quality control, crossorganizational committees are established to comprehensively manage risks. Regarding items unique todepartments, 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 oversightby separating them.
Apart from the Board of Directors as the decision-making body, the Company establishes theManagement 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.
2

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 GroupRegarding management of subsidiaries, the Company specifies organizations responsible for eachsubsidiary. 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 andindependence 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 toaffiliated companies and provides education and oversight.
i) Systems for reporting of matters relating to execution of duties by subsidiaries’ directors etc. tothe parent company
The Company dispatches directors, etc. to subsidiaries from the organization that is responsible forthe 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 theirsupervisory organizations, in accordance with the Job Descriptions for Management of AffiliatedCompanies.
ii) Subsidiaries’ rules and other systems for management of risk of loss
The Company responds to incidents that may greatly affect subsidiaries’ corporate activities inaccordance 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 thesubsidiary provide advice and guidance through discussion with specific organizations responsible foreach 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 theshared accounting system and provides resources of administrative organizations to enhance efficiencyof execution of duties of subsidiaries.
iv) 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 withlaws 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 ofsubsidiaries 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 noncompliant conduct at subsidiaries.
6) Systems concerning employees who provide assistance to the Audit Committee, mattersconcerning securing effectiveness of instructions to the employees and matters concerning
independence of such staff from Directors (excluding Directors who are Audit Committee
Members)
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 Officebased on consultation with the Audit Committee in advance. The Audit Committee Office serves as thesecretariat for the Audit Committee and is directly commanded by the Audit Committee.

3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.
7) 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 ensurethat 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, byorganization 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 andsubsidiaries periodically to the Audit Committee.
The Company establishes a whistleblower system as a system available for all the officers andemployees 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/herreporting.
8) 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 relevantto the claim will be paid without delay, unless it is deemed that they are unnecessary for execution ofduties 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.
(2) 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 theWhistleblowing Policy, the Company continued to implement awareness activities, including training,
during the fiscal year under review.
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 15 times during the fiscal year underreview. Based on laws and regulations, the Articles of Incorporation, and the Board of Directors
Regulations, decision-making was conducted regarding important business execution, reports werereceived from Directors and Executive Officers regarding required business execution conditions, andappropriate supervision was provided.
Additionally, with the intent of deliberation and consideration for important management issues, theManagement 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.
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 underreview. Additionally, the Audit Committee worked closely with the Internal Control Department andother 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,4etc. at periodic divisional report meetings. They held necessary discussions concerning these and otheractivities at meetings of the Audit Committee.
Furthermore, to assist the duties of the Audit Committee, the Audit Committee Office wasestablished and exclusive employees were assigned.
4) Risk management structure
To respond appropriately to events that may greatly affect the corporate activities of theCompany, the Risk Management Guidelines were defined, containing categories of specific types ofrisk that may occur, and a controlling division and emergency contact structure are maintained.
Meetings of the Risk Management Committee as defined by the above guidelines and various othermeetings related to risks are held periodically and as required, and report to the Board of Directors.
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 thatincorporate 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 thecorporate 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), hasbeen 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 scalepurchases 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 purchaseattempt, 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 thecommon interests of its shareholders.

5Consolidated Statement of Changes in Net Assets(From April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders’ equity
Capital stock
Balance at beginning of the fiscal
year
Changes of items during the fiscal
year

Capital surplus

36,99849,397Retained earnings
183,128

Treasury stock

Total
shareholders’equity(7,645)

261,879

Dividends from surplus(12,510)(12,510)

Profit attributable to owners of parent
Change in ownership interest ofparent due to transactions with noncontrolling interests
Purchase of treasury stock

12,76812,7689

Disposal of treasury stockReversal of revaluation reserve forland
Net changes of items other thanshareholders’ equity

9

(0)

(6)

(6)

0

0

4

4
–

Total changes of items during the
fiscal year

–

9

262

(5)

266

Balance at end of the fiscal year

36,99849,406

183,391(7,650)262,145(Millions of yen)

Accumulated other comprehensive income
Valuation
Total
NonTotaldifference Deferred Revaluation Foreign Remeasurements valuation controllingcurrency
gains
or
on availablenet assets
of definedandlosses on reserve for translationinterests
landbenefit plans translation
for-saleadjustment
hedgesadjustments
securities

Balance at beginning of the fiscal
year
Changes of items during the fiscal
year

16,883(348)

10,3772,410(2,731)Dividends from surplus
Profit attributable to owners of parent
Change in ownership interest ofparent due to transactions with noncontrolling interests
Purchase of treasury stock
Disposal of treasury stockReversal of revaluation reserve forland
Net changes of items other thanshareholders’ equity
Total changes of items during the
fiscal year
Balance at end of the fiscal year

26,592

3,621

292,094–––(12,510)

–

(6)

–

0

–

4

12,768
9

(533)

102

29

8,690

(546)

7,742

249

7,991

(533)

102

29

8,690

(546)

7,742

249

8.257

16,350(246)

10,407

11,101(3,277)34,334

3,871

300,351(Note) Amounts are rounded down to the nearest million yen.

6

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: 44
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.
KANAZAWA DENKA NAMAKON K.K., and DENKA NAMAKON TAKAYAMA K.K., which werepreviously consolidated subsidiaries, are no longer subsidiaries due to the sale of shares. Denka
Infrastructure Technologies Shanghai Co., Ltd. is excluded from the scope of consolidation from thisfiscal year under review due to the completion of liquidation.
(2) Principal non-consolidated subsidiaries
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 (amountprorated to the ownership), and retained earnings (amount prorated to the ownership), etc. have nomaterial impact on the consolidated financial statements.

7

2. Application of the equity method(1) Non-consolidated subsidiaries 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
KAMABARA NAMAKON K.K. and SANSHIN BUSSAN K.K. are excluded from the scope of nonconsolidated subsidiaries by the equity method from the fiscal year under review because they are nolonger subsidiaries due to the sale of shares held.
(2) Non-consolidated subsidiaries 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 theapplication 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 isimmaterial.
3. Accounting periods of consolidated subsidiaries
Among the consolidated subsidiaries, Denka Singapore Pte., Ltd. and 30 other subsidiaries have ayear-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.

8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 priceStated at market value(Valuation difference is reported as a separate component of net assets. The cost of sales iscalculated principally using the moving-average method.)
Shares, etc. that do not have a market priceStated 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 isevidence of deterioration in value.)(2) 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
For finance leases that do not transfer the ownership of the lease assets to the lessee, the straightline method with no residual value is applied, regarding the lease term as the useful life.
Furthermore, for consolidated subsidiaries overseas preparing their financial statements inaccordance with International Financial Reporting Standards, International Financial ReportingStandard 16 Leases (“IFRS 16”) or US GAAP Accounting Standards Update (ASU) 2020-5 Leases
is applied. Under IFRS 16 and ASU 2020-5, lessees record all leases as assets and liabilities on thebalance sheet, in principle, and the straight-line method is used as the depreciation method forright-of-use assets recorded as assets.
(3) 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 forordinary receivables and based on assessment of recoverability of individual receivables for
specific doubtful accounts.

9• 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 officer stock delivery regulations for
Directors (excluding Directors who are Audit Committee Members and Outside Directors).
(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 thestraight-line method.
• Method of hedge accounting
The Company adopts the deferral method of hedge accounting. Interest rate swaps that satisfy thecriteria 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 theappropriation 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 othercomprehensive 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 fromcontracts 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
The Group’s principal business is the manufacture and sale of “Electronics & Innovative
Products,” “Life Innovation,” “Elastomers & Infrastructure Solutions,” and “Polymer Solutions.”
10

The Group is obligated to deliver products under sales contracts with customers, and recognizes
revenue when control of the products is transferred to the customer and the performanceobligation is satisfied. The Group recognizes revenue at the time of delivery, acceptanceinspection, or shipment, as appropriate.
(2) Revenue recognition related to transactions that include variable consideration
Regarding the consideration paid to customers, such as some sales rebates in product sales,
revenue is recognized by deducting from the transaction price.
(3) Revenue recognition related to agent transactions
Regarding purchase and sale transactions of goods and services mainly in the trading company
business, as a result of determining the role (principal or agent) in providing goods and services
to customers, the Group recognizes revenue as a net amount for agent transactions.
(4) Revenue recognition related to construction contracts
Regarding construction contracts, revenue is recognized over time as performance obligations are
satisfied. Progress toward satisfaction of performance obligations is measured based on
construction costs incurred by the end of each reporting period relative to the ratio of total
forecasted construction costs. For construction contracts with a very short period from thetransaction start date to the time when it is expected that the performance obligations will be fully
satisfied, and for small construction contracts, revenue is not recognized over time, but
recognized when performance obligations are fully satisfied.
(Notes to Accounting Estimates)
Valuation of goodwill(1) Stated amount on the consolidated financial statements for the fiscal year under review
Goodwill

5,992 million yen(2) Other information to help understanding the details of estimates
1) Calculation method
When there is an indication of impairment in any of the asset groups including goodwill, theGroup estimates the undiscounted future cash flows to be generated from such asset group. If thecarrying amount of the asset group exceeds the total amount of undiscounted future cash flows, animpairment loss will be recognized, the carrying amount being written down to the recoverable
amount.
Additionally, when the annual impairment test is needed, the Group measures the fair value ofeach asset group including goodwill. If the carrying amount of the asset group exceeds its fairvalue, the carrying amount will be written down to the fair value and treated as loss for the fiscal
year under review.
Goodwill of the Group is principally related to Life Innovation business.
In the fiscal year under review, for goodwill related to Life Innovation business, no impairment
loss has been recognized as the total amount of undiscounted future cash flows to be generated
from the asset group including the goodwill exceeded the carrying amount of the asset group.

112) Principal assumptions
Undiscounted future cash flows to be generated from the asset group including goodwill related
to Life Innovation business are calculated on the basis of the business plans that are prepared,reflecting past experiences and external and internal information, and approved by the Board of
Directors. Principal assumptions are the time of completion of developing new products, etc. andthe sales forecasts after their launch.
3) Impacts on the consolidated financial statements for the next fiscal year
All the principal assumptions included in the business plans are based on information available
to the Group as of the balance sheet date and certain premises deemed to be reasonable. Whendrastic changes in business environment occur or due to other factors, impairment loss may berecognized in the next fiscal year.

(Notes to Changes in Accounting Estimate)
The Group has decided to withdraw from the limestone mining and cement business by around the first half of2025. Following the decision, it has become possible for the Group to reasonably estimate when to performthe obligations associated with the closure such as costs of prevention of contamination, greening and security
measures around the mine entrance, and therefore asset retirement liabilities are recorded. As a result of thischange in estimate, asset retirement obligations increased ¥1,694 million yen. Operating income and ordinary
income decreased ¥29 million each, and profit before income taxes decreased 1,524 million yen in the fiscal
year under review.

12

(Notes to the Consolidated Balance Sheet)
1. Assets pledged as collateral
Investment securities:

243 million yen

Liabilities corresponding to pledged assets
Notes and accounts payable-trade and other liabilities:

191 million yen

2. Accumulated depreciation of property, plant and equipment:

500,294 million yen

3. Guarantee obligations, etc.
Guarantee for loans from financial institutions:

12,490 million yen(Notes to the Consolidated Statement of Changes in Net Assets)
1. Type and total number of shares issued and type and number of shares of treasury stock
Number of shares at
Increase during the Decrease during the Number of shares atthe beginning of thethe end of the year
year
year
year
Shares issued
Common stock
88,555,840––
88,555,840
Total
88,555,840––
88,555,840
Treasury stock
Common stock
2,324,689
1,999
193
2,326,495(Notes 1 and 2)
2,324,689
1,999
193
2,326,495
Total
Notes: 1. The 1,999 increase in the number of shares of common stock of treasury stock was due to thepurchase of shares constituting less than one unit.
2. The 193 decrease in the number of shares of common stock of treasury stock was due to thedecrease by sale of shares constituting less than one unit.
2.

Dividends(1) Payment of dividends• Dividends for common stock
Resolution
Ordinary General
Meeting of
Shareholders held on
June 22, 2022
Meeting of the Boardof Directors held on
November 8, 2022

Types ofsharesDividends paid Dividends(millions ofper share
yen)
(yen)

Record date

Effective date

March 31, 2022

June 23, 2022

Common
stock

6,470

75.00

Common
stock

6,039

70.00 September 30, 2022 December 2, 202213

(2) Dividends whose record date falls during fiscal 2022 but whose effective date is in the next fiscal
year• Dividends for common stock
The following resolutions are expected to be made.
Dividends paid
Types of
Source of
Resolution(millions ofsharesdividends
yen)
Ordinary General
Meeting ofCommonRetained
2,588
Shareholders to bestock
earnings
held on June 22, 2023

Dividends per
Record dateshare (yen)Effective
date

March 31,2023

June 23,
2023

30.00

(Financial Instruments)
1. Financial instruments
The Group is not engaged in fund investment. The Group’s policy is to procure funds throughbank borrowings and issuance of bonds and/or commercial paper in combination, as necessary.
Notes and accounts receivable-trade, and contract assets are exposed to customer credit risk. For
such risk, management of due dates is implemented in accordance with the credit management rules.
Investment securities mainly consist of stocks, and the market values of listed stocks are determined ona quarterly basis.
Loans payable, bonds payable, and commercial paper are used for working capital (mainly shortterm) and for capital investment. Certain long-term loans payable are exposed to the risk of interest
rate fluctuations. For such risk, interest rate swaps are employed to fix the amount of interest expenses.
Certain business transactions denominated in foreign currencies are exposed to the risk of foreignexchange fluctuations, and for such risk, forward exchange contracts are employed.
Derivative transactions are entered into only in the scope of practical purposes in accordance with theinternal control rules and not for speculative purposes.

142. Fair values of financial instruments
Carrying amounts and market values of the financial instruments and the differences between
carrying amounts and market values as of March 31, 2023 (consolidated balance sheet date of fiscal
2022) are as follows. Shares, etc. that do not have a market price (carrying amount of 24,535 million
yen) are not included in available-for-sale securities. In addition, the note for cash is omitted and thenote for deposits is omitted because deposits comprise short-term instruments whose carrying amountapproximates their fair value.
(Millions of yen)
Carrying amount(*)

Market value (*)

Difference

98,081

98,081–30,651
2,885
131,618
47,96930,651
3,031
131,763
47,969–145
145

44,7546,000

44,7546,000

81,97537,00081,74036,864––(235)

217,699

217,327

(371)

–

–

–

(1) Notes and accounts receivable-trade,and contract assets(2) Investment securities
Available-for-sale securities
Stocks of subsidiaries and affiliates
Total assets(3) Notes and accounts payable-trade(4) Short-term loans payable(5) Commercial paper(6) Long-term loans payable (*1)(7) Bonds payable
Total liabilities(8) Derivatives (*2)

–

(136)

(*1)

Long-term loans payable includes loans to be repaid within one year.

(*2)

The amount represents a net amount of credits and debts arising from derivative transactions and thefigures in parentheses are recorded as liabilities on the consolidated balance sheet.

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 tothe observability and materiality of inputs used to measure fair value.
Level 1 fair value: Fair value measured using observable inputs, i.e. quoted prices in active
markets for assets or liabilities that are the consideration for the measurement.
Level 2 fair value: Fair value measured using observable inputs other than Level 1 inputs.
Level 3 fair value: Fair value measured using unobservable inputs.
(1) Financial assets and financial liabilities measured at fair value(Millions of yen)
SectionFair value
Level 1

Level 2

Level 3

Total

Investment securities
Available-for-sale securities

30,651

15––

30,651

(2) Financial assets and financial liabilities not measured at fair value(Millions of yen)
Fair value
SectionLevel 1

Level 2

Level 3

Total

Notes and accounts receivabletrade, and contract assets–

98,081–

98,081

Investment securities
Stocks of subsidiaries andaffiliates
Notes and accounts payabletrade

3,031

–

–

3,031

–

47,969–47,969

Short-term loans payable–

44,754–44,754

Commercial paper

–

6,000

–

6,000

Long-term loans payable–

81,740–81,740Bonds payable–

36,864–36,864

Note: A description of the valuation technique and inputs used in the fair value measurements
Investment securities
Listed shares are valued using quoted prices. As listed shares are traded in active markets, theirfair value is classified as Level 1.
Derivatives
The fair value is calculated based on the prices provided by the financial institutions. However,interest rate swaps that qualify for the special method are accounted for as part of hedged longterm loans payables, and therefore, the fair value of such interest rate swaps is included in the fairvalue of the corresponding long-term loans payables (Refer to “long-term loans payable” below.).
Forward exchange contracts that qualify for the appropriation method are accounted for as part ofhedged accounts receivable and accounts payable, excluding those associated with forecasted
transactions, and therefore, the fair value of such forward exchange contracts is included in themark (Refer to “accounts receivable-trade” and “accounts payable-trade” below).
Notes and accounts receivable-trade, and contract assets
The fair value of these items is measured using the discounted cash flow method based on theamount of receivables, period to maturity and an interest rate reflecting credit risk, for each
receivable categorized by a specified period, and is classified as Level 2.
Notes and accounts payable-trade, short-term loans payable and commercial paper
The fair value of these items is measured using the discounted cash flow method based on future
cash flows, period to repayment and an interest rate reflecting credit risk, for each liability
categorized by a specified period, and is classified as Level 2.
Long-term loans payable
The fair value of these items is measured using the discounted cash flow method based on thesum of principal and interest, remaining maturities and an interest rate reflecting credit risk, and isclassified as Level 2.

16Bonds payable
The fair value of these items is measured based on market prices. While market prices areavailable, their fair value is classified as Level 2 because they are not traded in an active market.
(Real Estate for Rent)
Disclosure is omitted because the Group does not own real estate for the purpose of gaining rental
revenues or capital gains and the total amount of real estate for rent is immaterial.
(Notes to Revenue Recognition)(1) Disaggregation of revenue from contracts with customers
The relationship between disaggregated revenue and the Group’s reportable segments is as follows.
(Millions of yen)
Electronics&
Innovative
Products

Reportable segment
Elastomers
Life&
PolymerInnovation Infrastructure Solutions
Solutions

Total

Other
businesses(Note 1)

Total

Japan

39,46837,331

59,47084,307

220,578

10,918231,496

China
Other
countries
in Asia
Othercountries
Revenuefromcontractswithcustomers
Otherrevenue
Sales toexternalcustomers

19,258

2,314

4,233

23,06848,875

1,466

50,342

14,427570

25,07910,05350,132

1,733

51,866

20,386

7,183

35,044

10,13972,754975

73,73093,54147,401

123,827

127,569

392,340

15,094407,434

–

124

–

–

124

–

124

93,541

47,525

123,827

127,569

392,465

15,094

407,559

Notes 1. The “other businesses” category is a business segment that is not included in the reportable segments,
and it includes the plant engineering business, trading company business, etc.
2. The Group’s revenue is categorized by country or region based on the location of customers.
(2) Useful information in understanding revenue
Useful information in understanding revenue is as presented in “(Significant Matters, etc. Providing
the Basis for Preparation of Consolidated Financial Statements), 4. Accounting Policies, Revenue andexpense recognition standards.”(3) Information in understanding the amount of revenue for the fiscal year under review and following
fiscal years• Balances of contract assets and contract liabilities
17

The balances at the end of the period for trade receivables, contract assets and contract liabilities
recorded from contracts with customers of the Company and its consolidated subsidiaries during the
fiscal year under review are as follows. On the consolidated balance sheet, trade receivables andcontract assets are included in “notes and accounts receivable-trade, and contract assets,” and contract
liabilities is included in “other current liabilities.”(Millions of yen)
Balance at end of the fiscal
year

Balance at beginning of the
fiscal year
Trade receivables

100,566

97,220Contract assets

460

860

Contract liabilities

103

1,260

• Transaction price allocated to the remaining performance obligations
The total transaction price allocated to the remaining performance obligations and the time frame
the Company expects to recognize the amount of revenue are as follows.
(Millions of yen)
Fiscal year under review
Within one year

4,111

Over one year

459

Total

4,571

(Notes to Per Share Information)
1. Net assets per share:

3,438.28 yen

2. Profit attributable to owners of parent per share:

148.08 yen

Note:

In the calculation of consolidated net assets per share, shares of the Company owned by theemployee stock ownership plan are included in the deduction of treasury stock from the total
number of shares issued at the end of the fiscal year.
In addition, in the calculation of profit attributable to owners of parent per share, those shares areincluded in the deduction of treasury stock for calculating the average number of shares in the
period.

(Other Notes)
1. Other
Figures shown in millions of yen have been rounded down to the nearest million.

18

Non-consolidated Statement of Changes in Net Assets(From April 1, 2022 to March 31, 2023)(Millions of yen)

Capitalstock

Balance at beginning of
the fiscal year
Changes of items during
the fiscal year

36,998

Shareholders’ equity
Retained earnings
Capital surplus
Other retained
earnings
Reserve
for
Total
Legal
Other
Total
advanced Retained
retained
capitalcapitalcapitaldepreciaearnings
earnings
surplussurplussurplustion ofbrought
noncurforward
rent
assets49,2840

Total
shareholders’equity(7,645)200,31449,284

3,749

117,927

121,676

–

(146)

146

–

–

(12,510)
8,652(12,510)
8,652(12,510)
8,652

Reversal of reserve foradvanced depreciationof noncurrent assets
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stockReversal of revaluation
reserve for land
Net changes of items
other than shareholders’equityTotal changes of items
during the fiscal year
Balance at end of the fiscal
year

Treasury
stock

–
–
–
(0)

(0)

–
–

–

4

4

(6)
0

(6)
0
4

–
–

–

(0)

(0)

(146)

(3,707)(3,853)(5)(3,859)36,99849,284049,284

3,602

114,220

117,823(7,650)196,455

19

(Millions of yen)
Valuation and translation adjustments
Valuation difference on Revaluation reserve for
Total valuation andavailable-forlandtranslation adjustments
sale securities
Balance at beginning of the
fiscal year
Changes of items during
the fiscal year
Reversal of reserve foradvanced depreciationof noncurrent assets

Total net assets

25,477

225,792––

Dividends from surplus–(12,510)Net income

–

8,652

Purchase of treasury stock–(6)

Disposal of treasury stock

–

0

–

4

Reversal of revaluation
reserve for land
Net changes of items otherthan shareholders’equityTotal changes of items
during the fiscal year
Balance at end of the fiscal
year

15,09910,377(1,056)29(1,026)(1,026)(1,056)29(1,026)(4,886)

14,043

10,40724,450220,906(Note) Amounts are rounded down to the nearest million yen.

20

Notes to Non-consolidated Financial Statements(Matters Related to Significant Accounting Policies)
1. Standards and methods for valuation of assets(1) Securities
Stocks of subsidiaries and affiliates
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 market value(Valuation difference is reported as a separate component of net assets. The cost of sales iscalculated using the moving-average method.)
Shares, etc. that do not have a market priceStated at cost using the moving-average method(2) Inventories
Stated at cost using the weighted-average method(Balance sheet amounts are calculated by writing down their net realizable value when there isevidence of deterioration in value.)
2. Depreciation method for noncurrent assets
Property, plant and equipment
The straight-line method is applied.
Intangible assets
The straight-line method is applied. However, software for internal use is amortized by the straightline method over the estimated internal useful life (five years).
Lease assets
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 usefullife.
3. Standards of accounting for allowances and provisions(1) Allowance for doubtful accounts
Allowance for doubtful accounts is provided to cover possible losses on notes and accounts
receivable. The Company records an estimated irrecoverable amount based on the historical writeoff rate for ordinary receivables and based on assessment of recoverability of individual receivables
for specific doubtful accounts.

21

(2) Provision for bonuses
The Company provides reserve for payment of bonuses to employees based on the amount of
estimated employees’ bonuses at the fiscal year-end.
(3) Provision for retirement benefits
The Company provides reserve for employees’ retirement benefits based on the projected benefit
obligation and plan assets at fair value at the fiscal year-end. Furthermore, if plan assets to berecognized at the end of the fiscal year under review exceed the amount of retirement benefit
obligations minus unrecognized actuarial gains and losses, etc., the excess is recorded as prepaid
pension cost under investments and other assets.
In calculating retirement benefit obligations, the benefit formula basis is adopted for attributing
expected benefits to periods.
Prior service cost is recorded by the straight-line method over certain periods (10 years) within the
average remaining service period of employees expected to receive benefits, commencing with thefollowing fiscal year.
Actuarial gains and losses are 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.
(4) 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 fiscal year is recorded, based on officer stock delivery regulations for Directors(excluding Directors who are Audit Committee Members and Outside Directors).
4. Revenue and expense recognition standards
The details of the main performance obligations in the major businesses related to revenue from contracts
with 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
The Company’s principal business is the manufacture and sale of “Electronics & Innovative
Products,” “Life Innovation,” “Elastomers & Infrastructure Solutions,” and “Polymer Solutions.”
The Company is obligated to deliver products under sales contracts with customers, andrecognizes revenue when control of the products is transferred to the customer and theperformance obligation is satisfied. The Company recognizes revenue at the time of delivery,
acceptance inspection, or shipment, as appropriate.
(2) Revenue recognition related to transactions that include variable consideration
Regarding the consideration paid to customers, such as some sales rebates in product sales,
revenue is recognized by deducting from the transaction price.
(Notes to Changes in Accounting Policies)(Notes to Accounting Estimates)
Valuation of stocks of subsidiaries and affiliates
22

(1) Stated amount on the non-consolidated financial statements for the fiscal year under review
Stocks of subsidiaries and affiliates

34,241 million yen(2) Other information to help understanding the details of estimates
1) Calculation method
Stocks of subsidiaries and affiliates are stated at the acquisition cost on the balance sheet. In caseof a significant decline in the real value of any of those stocks, the carrying amount of the stock is
written down by the equivalent amount and the valuation difference is treated as a loss for the
fiscal year under review.
For some of the stocks of subsidiaries and affiliates, which were acquired with an expectation of
the excess earning power, etc., no impairment loss has been recognized in the fiscal year underreview as the real value including the excess earning power, etc. exceeded the acquisition cost.
2) Principal assumptions
Some of the stocks of subsidiaries and affiliates, which were acquired with an expectation of theexcess earning power, etc. are valued based on the business plans that are prepared, reflecting pastexperiences and external and internal information, and approved by the Board of Directors.
Principal assumptions are the time of completion of developing new products, etc. and the sales
forecasts after their launch.
3) Impacts on the non-consolidated financial statements for the next fiscal year
All the principal assumptions included in the business plans are based on information available
to the Company as of the balance sheet date and certain premises deemed to be reasonable. Whendrastic changes in business environment occur or due to other factors, the recognition of
impairment loss may be necessary in the next fiscal year.
(Notes to Changes in Accounting Estimates)
Change in the estimate of asset retirement obligations
The Company has decided to withdraw from the limestone mining and cement business by around the firsthalf of 2025. Following the decision, it has become possible for the Company to reasonably estimate when to
perform the obligations associated with the closure such as costs of prevention of contamination, greening andsecurity measures around the mine entrance, and therefore asset retirement liabilities are recorded. As a resultof this change in estimate, asset retirement obligations increased ¥1,694 million. Operating income andordinary income decreased ¥29 million each, and profit before income taxes decreased ¥1,524 million in thefiscal year under review.
(Notes to the Non-consolidated Balance Sheet)
1. Assets pledged as collateral:None

2. Accumulated depreciation of property, plant and equipment:

419,569 million yen

3. Guarantee obligations
Guarantee for loans from financial institutions:23,106 million yen

4. Monetary receivables from and monetary obligations to subsidiaries and affiliates
Short-term monetary receivables:

33,223 million yen
23

Short-term monetary obligations:

26,851 million yen

Long-term monetary receivables:

114 million yen(Notes to the Non-consolidated Statement of Income)Amount of transactions with subsidiaries and affiliates
Sales to subsidiaries and affiliates:

95,091 million yen

Purchase from subsidiaries and affiliates:

64,423 million yen

Transactions with subsidiaries and affiliates other than business transactions:
8,095 million yen(Notes to the Non-consolidated Statement of Changes in Net Assets)
Type and number of shares of treasury stock

Common stock

Number of shares at
Increase during the Decrease during the Number of shares atthe beginning of the
year
year
the end of the yearyear
2,324,689
1,999
193
2,326,495

Notes: 1. The 1,999 increase in the number of shares of common stock of treasury stock was due to thepurchase of shares constituting less than one unit.
2. The 193 decrease in the number of shares of common stock of treasury stock was due to thedecrease by sale of shares constituting less than one unit.
(Notes to Deferred Tax Accounting)Breakdown of deferred tax assets and deferred tax liabilities by major cause(Millions of yen)
As of March 31, 2023
Deferred tax assets
Provision for bonuses
Loss on liquidation of business
Asset retirement obligations
Loss on valuation of investment securities
Loss on valuation of shares of subsidiaries and affiliates
Loss on valuation of golf club membership
Impairment loss
Enterprise tax payable
Other
Subtotal of deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Prepaid pension cost
Valuation difference on available-for-sale securities
Reserve for advanced depreciation of non-current assets
Other
Total deferred tax liabilities
Net deferred tax assets (liabilities)

24

735
5,201
559
288
1,838
386
849
366
1,799
12,021(3,373)
8,648
472
5,858
1,576
52
7,958
690

(Notes concerning Related Party Transactions)
Subsidiaries
Type

Company nameSubsidiary

Location

Capital or
equity1,200
Akros Trading Co., Minato-ku,
million
Ltd.
Tokyo
yen

DENKA
Performance
Elastomers
LLC

121
Louisiana, million
U.S.A.
US
dollars
68.70
millionUSdollars

Subsidiary

Denka Chemicals
Holdings Asia
Singapore
Pacific Pte., Ltd.

Affiliate

5,000
TOYO STYRENE Minato-ku,
millionCo., LtdTokyo
yen

RelationshipTransaction
Ownership ofamountConcurrent
Transactions
Businessvoting rights positions, etc.
(Millions ofrelationshipyen)of directors
The Company sells
synthetic rubber
1 director
Sales of pulp, paper,
76.8% directlywith aproducts, synthetic Sales of theorganic/inorganic
owned by the
concurrent
resin products,
Company’s
46,665industrial products,
Company
position at the civil engineering
products
etc.
Company
and construction
materials, etc. to it.
1 director
Manufacturing and 70% indirectlywith aThe Company
sales of synthetic
owned by the
concurrent purchases finished Goods stocking
33,729rubberCompany
products
position at theCompany
1 director
Regional
Holding of
100% directlywith aRegional
headquarters for
funds
15,152
owned by the
concurrent headquarters of theSoutheast and South
Payment of
519
Company
position at theCompany
Asiainterest
Company
The Company
supplies its
Manufacturing,
50% directly
products as raw
Sales of theprocessing, and sales owned by thematerials andCompany’s
17,269of polystyrene resin
Company
purchases certain
products
finished products
from it.
Business

Account

Balance at theend of the year
(Millions ofyen)Accounts
receivabletrade

13,597

Accounts
payable - trade2,528

Deposits
received

16,890Accounts
receivabletrade

4,916

Notes: 1. Sales of the Company’s products are determined on the same terms and conditions as generaltransactions. Purchase of merchandise is determined by negotiation in consideration of total
cost.
2. Terms and conditions for loans to and deposits of funds from subsidiaries are determined inconsideration of market interest rates.
3.The transaction amount of deposits is the average balance during the period.
(Notes on Revenue Recognition)
Basis for understanding revenue is as described in (Matters Related to Significant Accounting Policies), 4.
Revenue and expense recognition standards(Per share information)
Net assets per share 2,561.85 yen
Profit per share, fiscal year under review 100.34 yen
Note: For the purpose of calculating net assets per share, the Company's shares held by the Stock Benefit
Trust are included in treasury stock, which is deducted from the total number of shares issued andoutstanding at the end of the fiscal year. In addition, for the calculation of profit per share, theCompany's shares held by the Stock Benefit Trust are included in treasury stock, which is deductedfrom the average number of shares outstanding during the fiscal year.
(Other Notes)
1. Other
Figures shown in millions of yen have been rounded down to the nearest million.

25