These documents have been translated from Japanese originals for reference purposes only.
In the event of any discrepancy between these translated documents and the Japanese originals, theoriginals shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or
any other forms of damages arising from the translations.
Denka Co., Ltd.
(Securities Code: 4061)
NOTICE OF CONVOCATION OF
THE 165TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
Date and Time:Thursday, June 20, 2024 at 10:00 a.m.

Place:

Nihonbashi Mitsui Hall, COREDO Muromachi 1 (reception desk on the 4th floor)
2-1, Nihonbashi-Muromachi 2-chome, Chuo-ku, Tokyo

Proposals to be resolved:
Proposal No. 1:
Proposal No. 2:

Appropriation of Surplus
Election of Five (5) Directors (Excluding Directors who are Audit Committee Members)

Please exercise your voting rights in writing or via the Internet by
5:00 p.m. on Wednesday, June 19, 2024.
This year, the Company will not distribute souvenirs or beverages at the General Meeting of Shareholders.
We appreciate your understanding.

1Message from the Management
To Our Shareholders
In pursuit of our Purpose “Making the World a Better Place as Specialists in Chemistry,” we will re-examine ourcore values of “Initiative,” “Integrity,” and “Empathy.” By surely responding to changes in the assumptions of the
management plan and ensuring our actions yield positive outcomes, we’ll promptly get back on the path to growth.
Enclosed please find the Notice of Convocation of the 165th Ordinary General Meeting of Shareholders.
We would like to take this opportunity to express our gratitude to you for your continued support of Denka andmake some observations concerning the Company’s results and current initiatives.
May 29, 2024
Toshio Imai
Representative Director, President
During the fiscal year ended March 31, 2024 (fiscal 2023), the Japanese economy experienced a modest
recovery, characterized by sluggish personal consumption due to increasing prices and a lack of vigor incapital investment. In the global economy, the growing sense of economic deceleration in China, alongsideescalating prices and monetary tightening in Europe and the U.S. Against this backdrop, uncertainty about
the future of the global economy increased.
Under these circumstances, the Group focused on expanding its business and securing profits bypromoting the growth strategies set forth in the management plan “Mission 2030” based on the newly
established vision.
As a result, net sales for fiscal 2023 totaled 389,263 million yen, down 18,295 million yen (4.5%) year
on year, due to lower sales volumes of core products such as electronics & innovative products andchloroprene rubber, despite the positive effects of price revisions implemented in the previous fiscal year
and higher proceeds from a weaker yen. On the earnings front, operating income was 13,376 million yen(down 18,947 million yen, or 58.6% year on year) and ordinary income was 5,474 million yen (down 22,550
million yen, or 80.5% year on year) due to a decrease in sales volume of core products and increased costs
for the progress of specialization. Profit attributable to owners of parent amounted to 11,947 million yen(down 821 million yen, or 6.4% year on year), reflecting extraordinary loss on liquidation of business andextraordinary gain on sales of investment securities resulting from the reduction of strategic shareholdings.
In the first year of the management plan, “Mission 2030,” we were unable to increase sales volume
sufficient to offset the increase in upfront investment and other costs planned under the previous
management plan “Denka Value-Up” due to changes in the assumptions of the management plan. In addition,
the Company had to suffer severe business results due to the impact of the Noto Peninsula earthquake andan impairment loss associated with the termination of norovirus vaccine development.
“Mission 2030,” our eight-year management plan, places “Business Value Creation” at the core of our
growth strategy, and aims to make all of Denka’s businesses “three-star businesses” that fulfill the threeelements of Specialty, Megatrends and Sustainability, and focus on ICT&Energy, Healthcare, andSustainable Living, the three areas of focus derived from the envisioned future world and megatrends. The
three growth strategies, including “Business Value Creation,” “Human Resources Value Creation,” and“Management Value Creation,” are the unchanging long-term policies that we will continue to promote.
However, in order to overcome the current difficult situation, we have to urgently respond to the changes in
the assumptions of the management plan so that we can restore our business performance to a growth track
while also controlling financial aspects. Specifically, first, we will accelerate portfolio transformation
including selling or exiting a business. Making the profitability improvement of the chloroprene rubber
business a top priority, we will carefully examine demand trends, optimal production capacity, etc. todetermine drastic measures. Second, we will review our investment plan. In other words, the priority forinvestment projects will be clarified for more careful selection and, if changes in business environment
makes a project less urgent, we will postpone such a project. We are determined to be very strict in selecting
investment projects and review the timing and others. Furthermore, with the full commitment of the top
management, we will vigorously promote company-wide cost reduction projects. This project is not just forcost reduction. Rather, we will adopt best practices new to us in order not only to reduce cost and improve
operational efficiency but to help employees grow; thereby, the entire company will work together tocontribute not only to “Business Value Creation” but also to “Human Resources Value Creation” and“Management Value Creation.”With regard to our response to the serious incident and improprieties that occurred in fiscal 2023, we aremindful that ensuring safety at the manufacturing site and assuring product quality are essential
requirements for a manufacturing company, and we take the recommendations of the Accident Investigation
Committee and the external investigation committee very seriously. We are determined not to recur such
incidents by taking a wide range of preventive measures in the areas of governance, management, processes,
and human resources management.
2

The entire Group will once again reaffirm our core values of “Initiative,” “Integrity,” and “Empathy”
which we cherish. To fulfill the Purpose of “Making the world a better place as specialists in chemistry,” wewill actively pursue the three growth strategies outlined in our management plan “Mission 2030” and willpromptly get back on the path to growth, ensuring that the measures taken in response to changes in theassumptions of the management plan yield positive results.
We hope we can count on the continued understanding and support of our shareholders in this endeavor.

3

(Securities Code: 4061)
May 29, 2024
Date of commencement of electronic provision measures
To Our Shareholders:Toshio Imai
President
Denka Co., Ltd.
1-1, Nihonbashi-Muromachi 2-chome, Chuo-ku, TokyoNOTICE OF CONVOCATION OF
THE 165TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
The 165th Ordinary General Meeting of Shareholders of Denka Co., Ltd. (the “Company”) will be held as
described below.
In convening this General Meeting of Shareholders, the Company provides electronically the Reference
Documents of the General Meeting of Shareholders and other information (matters subject to the electronic
provision measures) as the “Notice of the Convocation of the 165th Ordinary General Meeting of
Shareholders” and “Matters Subject to the Electronic Provision Measures (Matters for which Document
Delivery is Omitted)” on the Company website. Please access the following website to check the information.
The Company Website
https://www.denka.co.jp/ir/fact_04/ (available in Japanese)
The matters subject to the electronic provision are posted also on the website of the Tokyo Stock Exchange(TSE) as well as the above website. Please access the following TSE website (Listed Company Information
Service) and enter the Company’s name Denka or securities code “4061” to search, and select “Basic
Information” and “Documents for Public Inspection/PR Information” in order, and check the information.
TSE website (TSE-listed company information)
https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show
If you are unable to attend the meeting, you may exercise your voting rights in writing by mail (Voting
Rights Exercise Form) or via the Internet, etc., as described in the “Guide for Exercise of Voting Rights” (page6). Please review the Reference Documents for the General Meeting and exercise your voting rights by 5:00
p.m. on Wednesday, June 19, 2024.
1. Date and Time:Thursday, June 20, 2024 at 10:00 a.m.

2. Place:

Nihonbashi Mitsui Hall, COREDO Muromachi 1(reception desk on the 4th floor)
2-1, Nihonbashi-Muromachi 2-chome, Chuo-ku, Tokyo
Please also consider viewing the live-streaming of the General Meeting of
Shareholders on the day of the meeting. Please refer to the enclosed “Guide forLive-streaming” for details.

3. Meeting Agenda:
Matters to be reported: 1. Business Report, Consolidated Financial Statements for the Company’s
165th Term (from April 1, 2023 to March 31, 2024) and results of audits by
the Accounting Auditor and the Audit Committee of the Consolidated
Financial Statements42. Non-consolidated Financial Statements for the Company’s 165th Term (from
April 1, 2023 to March 31, 2024)

Proposals to be resolved:
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Election of Five (5) Directors (Excluding Directors who are Audit Committee
Members)••

Among the matters subject to the electronic provision measures, the following matters are not stated in
documents to be delivered to shareholders who make request for the delivery of hard copies, inaccordance with the relevant laws and regulations and the provisions of the Article of Incorporation of
the Company. The documents to be delivered to the shareholders who requested the delivery of thehard copies are a part of the documents audited by the Audit Committee and Accounting Auditor in
preparing their Audit Reports. In addition, the Audit Committee Members and the Accounting Auditor
have audited documents including the following.
• Company’s Systems and Policies (Systems to Ensure the Appropriateness of Operations,Operational Status of Systems to Ensure the Appropriateness of Operations, and Basic Policies
regarding the Control of the Company) in the Business Report• Consolidated Statement of Changes in Net Assets and Notes to Consolidated Financial
Statements• Non-consolidated Statement of Changes in Net Assets and Notes to Non-consolidated Financial
Statements
In the event of any modification to the matters subject to the electronic provision measures, theCompany will post the modification on the Company’s website and the TSE’s website.

5<Guide for Exercise of Voting Rights>
The following three methods are available for exercising voting rights pertaining to the Company’s General
Meeting of Shareholders.

Exercise of Voting Rights in Writing by Mail (Voting Rights Exercise Form)
Please indicate your vote for or against the proposals on the enclosed Voting Rights Exercise Form and send
the completed form to us so that it is received by 5:00 p.m. on Wednesday, June 19, 2024. If no indication of
approval or disapproval is made on the Voting Rights Exercise Form, it will be treated as an indication of
approval of the Company’s proposal.
Exercise of Voting Rights via the Internet etc.
Please access the website for exercising voting rights designated by the Company (https://www.web54.net),
use the “Voting Rights Exercise Code” and the “Password” indicated on the enclosed Voting Rights Exercise
Form, and follow the on-screen guidance. Please vote for or against the proposals by 5:00 p.m. on Wednesday,June 19, 2024.
(Inquiry about Exercise of Voting Rights via the Internet etc.)
Sumitomo Mitsui Trust Bank Stock Transfer Web Support Dial
Tel: 0120-652-031(office hours: 9:00 a.m.–9:00 p.m.)●Exercise of Voting Rights by Attending the Meeting
Please bring the enclosed Voting Rights Exercise Form with you to the meeting and submit it to thereceptionist at the meeting venue.
* In the case of exercising voting rights by attending the meeting as a proxy, please submit a document
evidencing the authority of proxy to the receptionist at the meeting venue together with the Voting Rights
Exercise Form. Please note that such proxy must be one shareholder of the Company with voting rights
in accordance with Article 18 of the Company’s Articles of Incorporation.
Furthermore, the Company will not distribute souvenirs at the General Meeting of Shareholders. We
appreciate your understanding.
*Handling of duplicated exercise of voting rights
If you exercise your voting rights both by the method of exercising voting rights in writing by mail (Voting
Rights Exercise Form) and by the method of exercising voting rights via the Internet etc., the exercise of
voting rights by the method of exercising voting rights via the Internet etc. shall prevail regardless of the timeof arrival of the votes.
In addition, if you exercise your voting rights multiple times via the Internet, etc., the vote made last shallprevail.

6

Reference Documents for the General Meeting of Shareholders
Proposal No. 1: Appropriation of Surplus
It is proposed that the surplus be appropriated as follows:
Matters concerning year-end dividends
In April 2023, the Company launched “Mission 2030,” an eight-year management plan covering theperiod through fiscal 2030. Under this plan, the Company is working to enhance its corporate value by
focusing on both financial and non-financial aspects, with the three growth strategies of “Business Value
Creation,” “Human Resources Value Creation,” and “Management Value Creation.” To create business value,
we aim to make all of Denka’s businesses “three-star businesses” that fulfill the three elements of Specialty,
Megatrends, and Sustainability, and focus on ICT&Energy, Healthcare, and Sustainable Living, the threeareas of focus derived from the envisioned future world and megatrends.
While we pursue strategic investments and engage in research and development to actualize theseobjectives, we aim to attain a total return ratio of 50% throughout the eight-year span of the management
plan. Furthermore, we are committed to actively distributing profits to shareholders by either maintaining or
increasing the dividend per share, with due consideration to future cash flows and other factors.
Shareholder returns
under Management Plan
“Mission 2030”

Aim to maintain or increase the dividend per share based on a target return
ratio of 50% (cumulative total for the eight years of the management plan)* Total payout ratio = (Dividends paid + treasury stock purchased) /consolidated net income

With respect to the year-end dividend for the 165th term, in view of the above, the Company proposes a
year-end dividend of ¥40 per share, as follows. Combined with the interim dividend, the annual dividends
will be ¥100 per share, for a total payout ratio of 72.1%.
(1) Type of dividend property
Cash(2) Allocation of dividend property and total amount thereof¥40 per share of common stock of the Company
Total amount of dividends: ¥3,450,916,840(3) Effective date of dividends from surplus
June 21, 2024

7

Proposal No. 2: Election of Five (5) Directors (Excluding Directors who are Audit Committee
Members)
The terms of office of five (5) Directors (excluding Directors who are Audit Committee Members;hereinafter, the same applies in this proposal) will expire at the conclusion of this Ordinary General Meetingof Shareholders. Accordingly, the election of five (5) Directors is proposed.
The candidates for Directors are as follows.

No.

Name

Positions and responsibilities at the Company

Attendance atBoard ofDirectors
meetings

1

Reappointed

ManabuYamamoto

Chairman and Director

14/14(100%)

2

Reappointed

Toshio Imai

Representative Director, President and Chief
Executive Officer

14/14(100%)

3

4

Reappointed

Reappointed

Representative Director, Senior Managing
Executive Officer
Chief Technical Officer (CTO)
Kazuo Takahashi
In charge of Purchasing Dept., Logistics Dept.,
Environment and Safety Dept., Quality Assurance
Dept., Engineering Dept.
Director, Managing Executive Officer
Chief Human Resource Officer (CHRO)
Chief Compliance Officer (CCO)
Corporate Planning Dept., Best Practice Promoting
Ikuo Ishida
Dept., HR Dept.,
In charge of Corporate Communications Dept.,
Denka Corporation, Denka Chemicals GmbH,
Chinese BusinessNew
appointment
OutsideRumiko Nakata
5
Independent
Director(planned)
Reappointed: Candidate for reappointment as Director
New appointment: Candidate for new appointment as Director
Outside: Candidate for Outside Director
Independent Director: Independent Director as notified to the Tokyo Stock Exchange

8

14/14
(100%)

10/10(100%)(Since taking
office in June
2023)

–/–
(–)

Name
(Date of birth)
No. [Director since][Director’s term ofoffice]Career summary and significant concurrent positions, etc.

April 1981
June 2004

Number ofshares of theCompany held

Joined the Company
General Manager of Functional Ceramics Div. ofElectronics Materials Business Group of the Company
April 2009
Executive Officer, General Manager of Electronics
Materials Div. of Electronics Materials Business Group of(Reappointed)
the Company
April 2011
Senior Executive Officer of the Company
28,104
Manabu Yamamoto(ofthe shares
April
2013
Managing
Executive
Officer,
HeadofElectronics&(March 31, 1956)
above,
numberInnovative
Products
oftheCompany
Age: 68of shares to beJune 2013
Director and Managing Executive Officer of thedeliveredCompany[June 2013]
pursuant
to
April
2015
GeneralManagerofCorporate
Planning
Dept.
of
the
[11 years at thestock delivery
Company
conclusion of thistrust system
Director and Senior Managing Executive Officer of theOrdinary General April 2016
14,704)Company
Meeting ofJune 2016
Outside Audit & Supervisory Board Member of Koatsu
Shareholders]
Gas Kogyo Co., Ltd. (until June 2019)
April 2017
Representative Director, President and Chief Executive
Officer of the Company
1
April 2021
Chairman and Representative Director of the Company
April 2023
Chairman and Director of the Company (present)[Reasons for selection as a candidate for Director]
Through work experience at overseas subsidiaries and many years of responsibility for theelectronics materials business division, Mr. Manabu Yamamoto possesses international
viewpoints and adequate operational experience. After he supervised new businessstrategies and accounting and finance strategies across the entire Denka Group as theexecutive responsible for management strategy, accounting and finance, and investor
Attendance at Board relations and corporate communications divisions, Mr. Yamamoto promoted the previous
management plan, “Denka Value-Up,” as Representative Director, President. As Chairmanof Directors
and Director, he currently serves in the position of the Chairman of the Board of Directors,
meetings
based on his deep knowledge and understanding of the Group. The Company has judged
14/14 (100%)that he can appropriately fulfill the role of supervising the business execution of Directors
and Executive Officers, and requests his election as Director.
[Message to shareholders]
As Chairman of the Board of Directors, I will support the activities of the executive
structure to overcome current major issues and promote “Mission 2030” through further
revitalization of the Board of Directors, thereby enhancing corporate value.
Notes: 1. No material relationship of interest exists between the Company and the above candidate.
2. The Company has entered into a directors and officers liability insurance contract with an insurancecompany as stipulated in Article 430-3, Paragraph 1 of the Companies Act to cover legal damages,
litigation expenses and others in the event that a claim for damages is made against the insured persons,
including Directors of the Company. If the appointment of the candidate above is approved, then he will
become an insured person under the contract. The Company intends to renew this insurance contract withthe same contents at the time of the renewal.

9

Name
(Date of birth)
No. [Director since][Director’s term ofoffice]Career summary and significant concurrent positions, etc.

April 1982
October 2006
June 2011

Number ofshares of theCompany held

Joined the Company
General Manager, Styrene Div. of the Company(Reappointed)
General Manager, Corporate Planning Dept. of theCompany
23,646
Toshio Imai
April 2013
Executive Officer, Assistant to General Manager,(ofthe shares(January 25 1959)
Elastomers & Performance Plastics of the Company
above,
numberAge: 65
April 2015
General Manager, Elastomers & Performance Plastics ofof shares to be
the Company
delivered[June 2019]
April 2017Managing Executive Officer of the Company
pursuantto[5 years at the
April 2019
General Manager, Denka Value-Up Promotion Dept. ofstock delivery
conclusion of thisthe Company
trust system
Ordinary General June 2019
Director and Managing Executive Officer of the Company
9,746)
April 2020
Director and Senior Managing Executive Officer of the
Meeting ofCompany
Shareholders]April 2021
Representative Director, President and Chief Executive
Officer of the Company (present)
2[Reasons for selection as a candidate for Director]
Mr. Toshio Imai possesses an international perspective and adequate operational
experience, including work experience at overseas subsidiaries, and taking responsibility
for the styrene and elastomer businesses over many years. After taking charge of businessstrategy for the Denka Group as a whole, including overseas businesses, as the executive
responsible for management strategy and investor relations and corporate communications
Attendance at Board divisions, he currently serves as Representative Director, President. Based on his richexperience and impressive track record in Company administration, it is hence judged byof Directors
the Company that he can appropriately fulfil the role of determining important businessmeetings
execution and supervising the business execution of Directors and Executive Officers, and14/14 (100%)
requests his election as Director.
[Message to shareholders]
To achieve the goals of our medium-term management plan “Mission 2030,” we will makeevery effort to promote “Business Value Creation,” “Human Resources Value Creation,”and “Management Value Creation” to realize our aim of “making the world a better place as
specialists in chemistry.”
Notes: 1. No material relationship of interest exists between the Company and the above candidate.
2. The Company has entered into a directors and officers liability insurance contract with an insurancecompany as stipulated in Article 430-3, Paragraph 1 of the Companies Act to cover legal damages,
litigation expenses and others in the event that a claim for damages is made against the insured persons,
including Directors of the Company. If the appointment of the candidate above is approved, then he will
become an insured person under the contract. The Company intends to renew this insurance contract withthe same contents at the time of the renewal.

10

Name
(Date of birth)
No. [Director since][Director’s term ofoffice](Reappointed)
Kazuo Takahashi(March 30, 1960)
Age: 64[June 2021][3 years at theconclusion of thisOrdinary General
Meeting of
Shareholders]
3

Career summary and significant concurrent positions, etc.

April 1983
October 2013
April 2015
April 2017
April 2019
April 2021
June 2021
April 2023

Number ofshares of theCompany held

Joined the Company
Deputy General Manager, Chiba Plant of the Company
11,833 (of theGeneral Manager, Ofuna Plant of the Company
Executive Officer, General Manager, Omuta Plant of the shares above,
number ofCompany
sharesto be
President of Denka Performance Elastomer LLC
deliveredManaging Executive Officer of the Company
pursuant to
Director and Managing Executive Officer of the Company stock delivery
Representative Director and Senior Managing Executive
trust system
Officer of the Company (present)
5,133)[Reasons for selection as a candidate for Director]
Mr. Kazuo Takahashi possesses adequate operational experience, including work
experience in plant manufacturing and overseas subsidiaries. Mr. Takahashi was in chargeof business strategy for the Denka Group as a whole, including overseas businesses, as theexecutive responsible for management strategy, human resources strategy, investor
Attendance at Board relations, corporate communications and other divisions, and promoted the previous
management plan, “Denka Value-Up.” Currently, he oversees technical divisions as Chiefof Directors
Technology Officer, and also assists the President as Representative Director and Senior
meetings
Managing Executive Officer. It is hence judged by the Company that he can appropriately
14/14 (100%)
fulfil the role of determining important business execution and supervising the businessexecution of Directors and Executive Officers, and requests his election as Director.
[Message to shareholders]
I will strive to promote business portfolio transformation and Group awareness reform,
consistently ensuring rational and appropriate decision-making and actions.
Notes: 1. No material relationship of interest exists between the Company and the above candidate.
2. The Company has entered into a directors and officers liability insurance contract with an insurancecompany as stipulated in Article 430-3, Paragraph 1 of the Companies Act to cover legal damages,
litigation expenses and others in the event that a claim for damages is made against the insured persons,
including Directors of the Company. If the appointment of the candidate above is approved, then he will
become an insured person under the contract. The Company intends to renew this insurance contract withthe same contents at the time of the renewal.

11

Name
(Date of birth)
No. [Director since][Director’s term ofoffice]Career summary and significant concurrent positions, etc.

April 1985
April 2009

Number ofshares of theCompany held

Joined the Company
General Manager, Functional Films Dept., Electronics(Reappointed)
Materials Div. of Electronics Materials Business Group of
the Company
6,916
Ikuo Ishida
October 2011 General Manager, Advanced Fillers Dept., Electronics(oftheshares(March 7, 1962)
Materials Business Group of the Company
above,
numberAge: 62
October 2013 General Manager, Advanced Specialty Materials Dept.,of shares to be
Electronics & Innovative Products of the Company
delivered[June 2023]
April 2017
Assistant General Manager, Electronics & Innovative
pursuant
to[1 year at theProducts of the Company
stock delivery
conclusion of this April 2019
Executive Officer and General Manager, Electronics &trust system
Ordinary General
Innovative Products of the Company
1,316)
Meeting ofApril 2023
Managing Executive Officer of the Company
Shareholders]June 2023
Director and Managing Executive Officer of the Company(present)
4[Reasons for selection as a candidate for Director]
Mr. Ikuo Ishida possesses an international perspective and adequate operational experience,
including work experience at overseas subsidiaries and taking responsibility for theelectronic materials business division for many years. He currently takes charge of businessstrategy for the Denka Group as a whole, including overseas businesses, as the executive
Attendance at Board
responsible for management strategy, human resources strategy, compliance, investorof Directors
relations and corporate communications divisions. It is hence judged by the Company thatmeetings
he can appropriately fulfil the role of determining important business execution and10/10
supervising the business execution of Directors and Executive Officers, and requests his(100%)
election as Director.
[Message to shareholders]
Recognizing the realization of “Mission 2030” as key to the Company’s growth anddevelopment, I will always consider what should be done currently and strive to enhance
corporate value.
Notes: 1. No material relationship of interest exists between the Company and the above candidate.
2. The Company has entered into a directors and officers liability insurance contract with an insurancecompany as stipulated in Article 430-3, Paragraph 1 of the Companies Act to cover legal damages,
litigation expenses and others in the event that a claim for damages is made against the insured persons,
including Directors of the Company. If the appointment of the candidate above is approved, then he will
become an insured person under the contract. The Company intends to renew this insurance contract withthe same contents at the time of the renewal.

12

Name
(Date of birth)[Outside Director
No.
since][Outside Director’s
term of office]Career summary and significant concurrent positions, etc.

April 1979
April 1996
June 2000
February 2007
(New appointment)(Outside)(Independent
Director (planned))
Rumiko Nakata(April 6, 1956)
Age: 68[–][–]

May 2010
December 2011
January 2014
March 2018
April 2019
April 2020
April 2021

5
April 2022
March 2023

Joined Esso Sekiyu K.K.
Center for Socio-Economic Research K.K.
Joined Pfizer K.K.
Manager, Pharmaceutical Development and Human
Resources (Public Relations) Dept., Pfizer K.K.
General Manager, Human Resources Group, Business
Partners, Pfizer K.K.
Head of HR and Global Operations, Pfizer K.K.
Corporate Officer, Pfizer K.K.
Executive Officer, in charge of Diversity & Inclusion,
Mitsubishi Chemical Corporation
Managing Executive Officer, Supervising – Human
Resources, Mitsubishi Chemical Corporation
Director of the Board, Managing Executive Officer,
Supervising – Administration, Public Relations, Human
Resources, Mitsubishi Chemical Corporation
Director of the Board, Managing Executive Officer
Supervising – Resources, Mitsubishi Chemical
Corporation
Director of the Board, Mitsubishi Chemical Corporation
Outside Director of the Board, Kyowa Kirin Co., Ltd.
(present)

Number ofshares of theCompany held–

[Reasons for selection as a candidate for Outside Director, and summary of expected roles]
Having consistently held positions in charge of human resources departments for many
years, Ms. Rumiko Nakata has rich management experience in human capital strategies,
such as human resources system reform and promotion of diversity and inclusion. In
addition, she has a deep knowledge of human capital management, including having
Attendance at Board served as a member of a study group on human capital organized by the Ministry ofof Directors
Economy, Trade and Industry and the Ministry of Health, Labour and Welfare. In order tomeetings
receive recommendations and supervision of the Company’s management based on her–/– (–)
deep insight, her election as Outside Director is requested.
[Message to shareholders]With a medium- to long-term perspective and integrity, I will contribute to the sustainablegrowth of the Company and the enhancement of its corporate value over the medium tolong term.
Notes: 1. No material relationship of interest exists between the Company and the above candidate.
2. If the appointment of the above candidate is approved, based on Article 427, Paragraph 1 of theCompanies Act, the Company will enter into a liability limitation contract with the candidate that limits
her liability for damages of Article 423, Paragraph 1 of said Act to a predefined amount of ¥5 million ormore or the amount stipulated by laws and regulations, whichever is higher.
3. The Company has entered into a directors and officers liability insurance contract with an insurancecompany as stipulated in Article 430-3, Paragraph 1 of the Companies Act to cover legal damages,
litigation expenses and others in the event that a claim for damages is made against the insured persons,
including Directors of the Company. If the appointment of the candidate above is approved, then she will
become an insured person under the contract. The Company intends to renew this insurance contract withthe same contents at the time of the renewal.

13

(Reference)
1. The Company’s views regarding the election of Directors
Under the Denka’s vision formulated in 2022, in order to achieve the eight-year management plan
“Mission 2030” through fiscal 2030, the Company aims to strengthen the management structure with
Directors and Executive Officers, while enriching the governance structure and supervisory function.
In electing Directors, internal Directors are chosen from persons who possess a wealth of experience andachievements in various divisions within the Company, while also possessing insights and adequate
specialized knowledge as Director, and Outside Directors are chosen from persons who possess
specialization required for continuous growth and improvement in corporate value of the Company and wide
insights based on a wealth of business experience and management experience at other companies. The
Company believes that it is important for the Board of Directors as a whole to elect a good balance of
personnel with a variety of knowledge, experience, and abilities, and ensure that the composition of theBoard of Directors is diverse in terms of gender, international background, work history, and other factors.
Additionally, the Company believes that Independent Outside Directors should comprise at least onethird of Directors. The present ratio is approximately 44%.

14

2. Skills Matrix of the Company’s Board of Directors*If Proposal 2 is approved as submitted.
SkillsCorporate

Attributes

Human

GlobalFinancial

Legal/

Management Resources

Business

Strategy /Compli-

Accounting

ance/Corporate

Value

Planning

Creation

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

Business

Research/ Technology

E

Sustainability/ESG
S

G

Value

Intellectual / Manufac-(Environ-(Society)(Govern-

Creation andance)

Marketingment)propertyDX

turingAge: 68

ManabuChairman andYamamoto Director

Years ofservice: 11

〇

〇

〇

〇

〇

Male

ToshioImai

Kazuo
Takahashi

Ikuo
IshidaRepresentative
Director,
President andChief Executive
Officer
Representative
Director andSeniorManaging
Executive
Officer
Director andManaging
Executive
Officer

Age: 65
Years ofservice: 5

〇

Male

Age: 64
Years ofservice: 3

〇

〇

〇

Male
Age: 62
Years ofservice: 1〇

Male
Independent
OutsideRumikoNakataDirector

Age: 68〇

Years of〇service: Female

Mizuhiro
UchidaDirector
Full-time
Audit
Committee
MemberAge: 62
Years of〇service: 1

〇

〇

〇

〇

Male
IndependentToshioKinoshita

Director
Audit
Committee
MemberOutsideAge: 75〇

Years of〇〇service: 9
Male
Independent

Director
Audit
Akio
Yamamoto Committee
MemberOutsideAge: 72
Years of

〇

〇

〇

〇

service: 9
Male
Independent

MiyukiMatobaDirector
Audit
Committee
MemberOutsideAge: 50〇

Years of〇〇〇service: 3
Female*The matrix above shows the skills that the Board of Directors expects from them among knowledge and experience they possess.
*Age and years of service are shown as of June 20, 2024.

15

(Reference)
Skill matrix of the Executive Officers who are not Directors
KazuyaTokumoto

Managing
Executive
OfficerManaging

RimiruExecutive
Hayashida
Officer

Yukio
Sasagawa

Managing
Executive
Officer

HidekiToya

Managing
Executive
Officer

Age: 65
Years ofservice: –

〇

〇

〇

〇

〇

〇

〇

Male
Age: 62
Years ofservice: –

〇

〇

Male
Age: 63
Years ofservice: –

〇

〇

〇

〇

〇

〇

Male
Age: 63
Years ofservice: –
Male

16

〇

3. Necessary skills for the Company’s Directors and the reason they were selected
The skills considered necessary for the Company’s Board of Directors to make important decisions andsupervise management under Denka’s vision formulated in 2022 to reach the goals of the Company’s eightyear management plan through fiscal 2030, and to promote ESG management through the priority
management materiality issues are as follows.
SkillsCorporate Management andCorporate Planning

Human Resources Value Creation

Global Business

Financial Strategy/Accounting

Legal/Compliance

Sustainability/
ESG

E (Environment)

S (Society)

G (Governance)

Business Value Creation andMarketingReason for the selection of the skills
Directors are needed who have extensive management experience andachievements to establish and review management plans aimed at realizing
the Denka’s Vision and supervise the execution of duties to achieve theseplans.
Directors are needed who have extensive knowledge and experience related tohuman resources value creation in order to realize human resource investment
and system reforms, aiming to become a company where each and every
employee can gain experience self-realization and personal growth.
Directors are needed who have extensive experience in global business tofulfill our Purpose to “making the world a better place as specialists inchemistry” with an awareness of global megatrends.
Directors are needed who have extensive knowledge and experience in thefinancial strategy and the accounting field not only to ensure the accurate
disclosure of financial information, but also to drive selection andconcentration of businesses, pursue optimal capital structure and improve
profitability and efficiency.
Directors are needed who have robust knowledge and experience in the legal
and compliance fields to ensure fair and trustworthy corporate activities
appropriately responding to increasingly complex legal systems andregulations in Japan and abroad.
Directors with extensive knowledge and experience in E (Environment) areneeded to fulfill corporate social responsibility working on the precondition
for continuation of business, “Achievement of carbon neutrality,”“Sustainable cities and fulfilling daily lives,” and “Environmental
conservation and minimization of environmental footprint.”
Directors with solid knowledge and experience in S (Society) are needed tofulfill corporate social responsibility through the provision of safe and highquality products, respect for human rights, and participation in the effort tobuild a better community.
Directors with solid knowledge and experience in G (Governance) are needed
to fulfill corporate social responsibility building a more advanced andeffective corporate governance system that ensures transparency and fairness
based on high ethical standards.
Directors are needed who have market insight based on a broad perspective,
as well as extensive business experience to ensure that all the three focus
areas, ICT & Energy, Healthcare, and Sustainable Living, will be fully madeup of “three-star businesses” that incorporate the three elements of specialty,
megatrends, and sustainability, while promoting the transformation ofbusiness portfolio, considering also selling or exiting a business that isdifficult to convert to a “three-star business.”17

R&D/Intellectual Property

Technology/Manufacturing

DX

Directors are needed who have a track record of promotion of innovation, as
well as deep knowledge in science and technology and a wealth of experiencein proprietary technologies and intellectual property, in order to createbusiness value in the three focus areas of ICT & Energy, Healthcare, andSustainable Living.
Directors are needed who are deeply familiar with technology, and who haveextensive practical experience and robust insight into manufacturing in orderto create management values through process innovation to improve
productivity, ensure trustworthiness in manufacturing, and establish a safe
work environment.
Directors are needed with a profound knowledge and extensive experience
related to digital technologies and data utilization, as well as the ability tounderstand and analyze the nature of the Group’s business, and use thisinsight to transform it, in order to promote transformation of business modeland organization through process innovation.

4. Standards of Independence for Denka Outside Directors
The Company selects candidates for Outside Directors based mainly on practical considerations, such aswhether we can expect the candidate to contribute to an increase in the corporate value of the Company as anindependent officer. Specifically, the Company has defined the following standards, in accordance with therequirements for independence stipulated in the Companies Act, in addition to the standards forindependence defined by the Tokyo Stock Exchange and other factors.
Standards of Independence for Outside Directors
The standard of independence for an Outside Director of the Company shall be persons that do not fallunder any of the categories defined in items (1) through (5) below.
(1) An executor of business (*4) at a main customer (*1), main supplier (*2), or main lender (*3)
that is a main trading partner of the Company;(2) A consultant, accountant, lawyer, or other such person that has received money or other property
exceeding ¥10 million in value per year from the Company, excluding officer compensation, inthe most recent fiscal year;(3) A person belonging to a group for whom the amount paid by the Company makes up 2% or moreof the group’s revenues or total income in the most recent fiscal year, in cases where the entity
receiving property under item (2) above is a group;(4) A person that has fallen under any of the above categories (1) through (3) within the past year;(5) A spouse or relation within the second degree of a person falling under any of the categories
below (excluding an insignificant person):i.
A person that falls under any of the above categories (1) through (4);ii.
A person that is or was an executor of business at the Company or a subsidiary of theCompany now or within the past year.
(*1) Main customer: A customer from whom the amount paid has made up 2% or more of theCompany’s revenues in the most recent fiscal year(*2) Main supplier: A supplier to whom the amount paid from the Company has made up 2% ormore of the supplier’s revenues in the most recent fiscal year(*3) Main lender: A lender that was essential for the Company’s funding, and that the Company
relied on to the extent the lender was irreplaceable, as of the end of the most recent fiscal
year(*4) Executor of business: An executive director, executive, executive officer, or other
employee, etc.

18

(Reference)
Denka’s Corporate Governance Initiatives
Basic Approach to Corporate GovernanceIn order to fulfill the expectations and trust of its many stakeholders, including shareholders, customers,
local society, and employees, based on the Denka’s Vision (a vision of the future) comprising the Core Valuethat is the Company’s DNA to serve as the foundation to support the tiers above, Purpose that serves as theNorth Star to guide the Company, and the Mission that the Company aspires to accomplish by 2030, theCompany strives to strengthen its business foundation by improving its earnings power and expanding thescope of operations, while also working to improve corporate value by making every effort to continue being
a company that can win the trust and sympathy of society.
The Company considers corporate governance as the foundation for the above, and so we have striven tostrengthen governance, in order to fulfill the responsibilities, we owe to all our stakeholders, and ensure thetransparency and soundness of our management.
Current Corporate Governance System

Board of Directors and optional committees■Board of Directors (Met 14 times in fiscal 2023)
To accomplish the Company’s Mission in the Vision, the Board of Directors monitors and supervises
major operational decision-making and execution of business duties by executive officers, based on strategic
and management planning. The Board of Directors as a whole appoints candidates to be Directors in linewith the standards for the appointment of both internal and Outside Directors, based on the belief that it isimportant to appoint a good balance of people with a variety of expertise, experiences, and skills. For further
details of our approach in appointing members of the Board of Directors, please see page 14.

19In addition, in principle, the Company has discontinued the use of executive titles, (such as Senior
Managing Director, Managing Director) for Directors, such that all Directors may focus on monitoring andsupervising the execution of business duties from an equal standpoint. Also, the Company has set the lengthof Directors’ (excluding Audit Committee Members) terms to one year, in order to facilitate flexible checks
on them at the General Meeting of Shareholders.
Additionally, the Nomination & Remuneration Advisory Committee has been established as an advisoryorgan of the Board of Directors, to strengthen the roles of the Board of Directors and foster higher standardsof objectivity and transparency. It also organizes the D&A Round Table, aimed at enriching deliberations on
major matters of particular management concern.
■Nomination & Remuneration Advisory Committee (Met 4 times in fiscal 2023)
For major management matters such as nomination, remuneration and other elements of governance, theBoard of Directors has set up the Nomination & Remuneration Advisory Committee, comprising all Outside
Directors, the Chairman and the President, to foster transparency and objectivity in management decisionmaking, informed by a wide range of opinion and advice from Outside Directors.
In fiscal 2023 this Committee received inquiries from the Board of Directors regarding the executive andgovernance structure, the formulation of a skills matrix, succession planning, and remuneration for officers,
and made recommendations and proposals regarding the results of these inquiries after deliberations at theCommittee. The committee is chaired by an Outside Director as of fiscal 2023.
■D&A Round Table (Met 12 times in fiscal 2023)
In order to facilitate in-depth discussions regarding management matters that are of particular importance,
the D&A Round Table is organized as a forum for free, open-minded, constructive discussions, exchange of
opinions and information, and strengthening of cooperation between internal and Outside Directors.
■Sustainability Committee (Met 3 times in fiscal 2023)
The Sustainability Committee was established to supervise the efforts of the Executive Division to address
issues related to sustainability (medium- to long-term sustainability) in order to achieve non-financial targets.
(Chairperson: President; Committee member: Executive Officer in charge of the Management Department;
Observers: Chairman, Outside Directors and Full-time Audit Committee Members).
This Committee deliberates on the activities of each division and reports to the Board of Directors, taking
into consideration the risks and profit opportunities of business activities and their consistency with the value
creation strategies related to business, human resources, and management.
The main matters of discussion in fiscal 2023 that were reported to the Board of Directors included the needto strengthen activities in areas such as safety and quality while ensuring that employees are notoverburdened, as well as the importance of the creation of systems and their penetration to the frontlines,
rather than the ultimate goal of achieving numerical targets.
■Evaluation of the Effectiveness of the Board of Directors
At Denka, the effectiveness of the Board of Directors is analyzed and evaluated annually. As a result of
measures taken in fiscal 2023, we reaffirmed that the frequency and duration of meetings of the Board of
Directors, and that the Board size and composition (in terms of achieving the right balance of expertise,
experience, ability and diversity) are appropriate. In addition, due to the further efforts of the Nomination &Remuneration Advisory Committee and the D&A Round Table, we affirmed that monitoring and supervisionof the management were being appropriately implemented by the Board of Directors, 44% of the members ofwhich are Outside Directors.
With regard to the further enhancement of discussions at the Board of Directors meetings, which was an
issue in the year before last, it was pointed out that there have been improvements in the monitoring andfollow-up of long-term business strategies and major investment projects, yet the Board of Directors should
continue to make efforts to provide timely information and increase the number of opportunities for free
discussion.
As for the further utilization of the Nomination & Remuneration Advisory Committee, the frequency ofits meetings was increased and explanations and materials were enhanced to further invigorate discussions.
As a result, we have seen a steady increase in its effectiveness, including a review of the executive
remuneration system and the establishment of a new training system for candidates for management
positions. In order to ensure the reliable operation of these systems in the future, we are aware of the need tocontinue discussions and make recommendations.

20

It was also suggested that further careful selection of agenda items for the Board of Directors and more
efficient reporting would require continued review and consideration, with an eye to speeding up thedecision-making process.
Looking ahead, in light of these constructive opinions, we will take steps to further improve theeffectiveness of the Board of Directors, aiming to improve medium-to-long-term corporate value, andrespond to the expectations and trust placed in us by our shareholders and numerous other stakeholders.
Audit Committee (Met 14 times in fiscal 2023)
In accordance with their fiduciary responsibilities to shareholders, Audit Committee Members and the
Audit Committee work with the support of the full-time staff of the Audit Committee Dept., whose
independence from management is ensured, and in close cooperation with the Internal Control Department,
conduct legal and appropriate audits of the execution of duties by the Directors through activities such as
interviews and various investigations of each department, office, and subsidiary.
In addition, the Audit Committee forms views on matters related to the election and compensation of
Directors (excluding Directors who are Audit Committee Members), as well as the election, dismissal, or
non-reappointment of accounting auditors, in accordance with the Companies Act.
Furthermore, the Company appoints candidates for Directors who are Audit Committee Members basedon its judgment that, in order for the Audit Committee to fulfill its roles and responsibilities, Audit
Committee Members should possess appropriate experience and ability as required for their duties, and thatin particular, there should be at least one person with expertise in finance and accounting.
Messages from the Directors who are Audit Committee Members“I will diligently oversee management and audits with a wide-angle lens, aiming to bolster corporate
governance, the cornerstone of enhancing our management’s value. This aligns with the Group’s pursuit of
new growth.”
Mizuhiro Uchida, Director (Audit Committee Member)“I will evaluate the operational and financial risks of the Company and the Group from theperspective of a certified public accountant specializing in financial accounting, and propose appropriate
measures to support the sound management and sustainable growth of the Group.”
Toshio Kinoshita, Outside Director (Audit Committee Member)“As the entire Company is working together to structurally reform its business foundation to support its
growth strategies, including Business Portfolio Shift and the creation of new businesses, I renew mycommitment to contribute to the realization of a sound growth path and the enhancement of corporate value by
maintaining a medium-to-long-term perspective and a sincere, fair and upright attitude as an Outside Director
who is an Audit Committee Member.”Akio Yamamoto, Outside Director (Audit Committee Member)“I will work with a medium- to long-term perspective and a fair, sincere attitude to ensure that corporate
governance functions more appropriately, thereby contributing to the enhancement of the Group’s corporate
value.”
Miyuki Matoba, Outside Director (Audit Committee Member)
Outside Directors
Regarding Outside Directors, the Company selects candidates based mainly on practical considerations,such as whether we can expect the candidate to contribute to an increase in the corporate value of theCompany as an independent officer, and has also defined its own standards of independence (please see page18, in accordance with the requirements for independence stipulated in the Companies Act, in addition to thestandards for independence defined by the Tokyo Stock Exchange and other factors.
In addition, by enhancing their understanding of the Company, the Company strives to create anenvironment that allows those appointed as Outside Directors to perform their roles for the sake of thesustainable growth of the Company and the increase of its corporate value.
Specifically, in addition to tours of offices, plants, and other facilities, the Company has been
implementing the following initiatives:■ Objective briefings (Met twice in fiscal 2023)
21

Briefings are held in order to have Outside Directors understand the Company’s medium- to long-termand short-term business and research policies.
■ Outside Officer Liaison Committee (Met 4 times in fiscal 2023)
Outside officers frankly discuss the nature of agenda and operation of the Board of Directors, as well as
the Company’s medium- to long-term issues and their solutions, from an independent standpoint and share
the results of the discussions with internal Directors, so as to contribute to management.
Strategic shareholdings■ Reduction of strategic shareholdings
The Company’s Board of Directors comprehensively examines the strategic shareholdings from various
perspectives, including the financial condition of the issuer, the volume of transactions with the Company
and its economic rationale, and comparison with the Company’s cost of capital, in an effort to reduce thenumber of such shares.
In the fiscal year ended March 31, 2023, we re-examined the purpose of holding such shares, includingfrom the viewpoint of capital efficiency, and further promoted the reduction of such shares. As a result, thenumber of issues of strategic shareholdings as of March 31, 2024 decreased by 16 from the end of theprevious fiscal year to 54 and the ratio to consolidated net assets decreased by 2.76 percentage points to
7.21% from the end of the previous fiscal year.
Trends in strategic shareholdings
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
158th
159th
160th
161st
162nd
163rd
164th
165th
term
term
term
term
term
term
term
term
Number
111
106
102
97
93
90
70
54
of issues
AmountonbalanceA
33,13436,23332,665
26,46833,24334,03429,956
22,848sheet(Millionsof yen)Total net
assetsB
227,487 242,780 250,481 254,014 270,036 292,094 300,351 316,915(Millionsof yen)A/B
14.57% 14.92% 13.04% 10.42%
12.31%
11.65%
9.97%
7.21%

22

(Reference)
Initiatives to Corporate Governance Thus Far
PurposeTo speed up decision-making
2007
Ensure that Directors monitor and supervise theexecution of business on an equal footing
Clear separation of monitoring and supervisory
functions from the execution of business
Flexibly perform checks on directors
Step up checks on management from anexternal perspective
2008
Create system enabling appropriate advicegiving even outside of meetings of the Board of
Directors, by arranging ample exchange of
opinions
Speed up decision-making by deepening
discussions of important management matters

2015

2016

2017

Improve the governance framework and raise
standards of transparency and soundness ofmanagement
Create venues for free, vigorous andconstructive deliberations, exchange of
opinions and information and alliancestrengthening for internal and Outside
Directors and Audit & Supervisory Board
Members
Achieve optimum standards of corporate
governance to ensure sustainable growth andimprove medium to long-term corporate value
Deepen understanding of the Company’sbusiness, and stimulate debate at meetings ofthe Board of Directors
From a standpoint independent of theCompany, outside officers freely discuss theagendas and administration of Board meeting,medium- to long-term issues facing theCompany, and their solutions, and share theirviews with Inside Directors
Promote understanding of the Company’s
medium- to long-term and short-term businessand research objectives
Ensure adequate auditing and supervision ofbusiness execution by executive officers
Step up the effectiveness of the Board of
Directors

Foster greater transparency and objectivity inbusiness decision-making, with the Board of
Directors accepting diverse opinions andadvice from the outside officers with regard to
major business topics including appointments,
remuneration and other governance matters

23

MeasuresCut the number of directors by half andintroduce an executive officer system
Abolition of executive titles (such as Senior
Managing Director, Managing Director)
Reassigning the authority of business execution
and executive titles from directors to executive
officers
Shortening the length of directors’
appointments to one year
By appointing two Outside Directors, thenumber of appointments of outside officers
rises to four, including two Outside Audit &Supervisory Board Members (per statutory
requirements)
Implement regular opportunities for outside
officers to exchange opinions with top
management
Establishment of a Management Committee
comprising Directors, Audit & Supervisory
Board Members (internal), and some executive
officers
Increasing the number of Outside Directors(from two to three) and reducing the number ofmembers of the Board of Directors (by two)
To step up round-table meetings of Outside
Directors and Audit & Supervisory Board
Members formerly held twice per year, hold around-table conference of Directors and Audit& Supervisory Board Members (current D&A
Round Table)
Compilation of the Denka Corporate
Governance Guidelines
Enhance the provision of advance explanationfor outside officers regarding specific agenda
items that require adequate explanation
Holding “Outside Officer Liaison Committee”
four times per year

Holding business and research objective
briefings (currently referred to as objective
briefings) for outside officers twice a year
Clarification of the details of agenda and reportmaterials at the Board of Directors meetings
Arrangement for all Directors and all Audit &Supervisory Board Members to annually
analyze and evaluate the effectiveness of theBoard of Directors, and disclose the results in
the Corporate Governance Report
Establishment of the Management Advisory
Committee comprising all Outside Directors,
all Outside Audit & Supervisory Board
Members, the Chairman and the President(current Nomination & Remuneration Advisory
Committee)

2019

2021

PurposeFurther strengthen corporate governance andimprove corporate value by further
strengthening the supervisory role of the Boardof Directors, by enabling more rapid decisionmaking and vesting directors who are membersof the Audit Committee with voting rights at
the Board of Directors meeting
Review of regulations regarding theappointment of retirees from the office ofChairman and President as Counselors andAdvisors.
Clarify the roles of the Board of Directors andthe executive structure, further enhance theeffectiveness of discussions at Board of
Directors meetings, and further expedite its
decision-making process
Effective committee administration throughgreater independence and objectivity
Strengthening of incentives

2023

Sustainability-related activities, progress withachievement of non-financial targets and KPIs,
and responses to risks and earning
opportunities

24

Measures
Shift from the “Company with Audit &Supervisory Board” model to that of a“Company with Audit Committee”

Abolish the office of Counselor

Reduce the number of Directors from 12 to 9,
and raise the proportion of Outside Directors
on the Board of Directors to over 44%
Appoint an Outside Director as chair of theNomination & Remuneration Advisory
Committee
Revise the officer remuneration system- Revision of remuneration composition
ratio and strengthening of short-term
incentives- Introduction of an individual performance
evaluation system- Introduction of stock-based compensation
for Executive Officers
Established the Sustainability Committee, with
Outside Directors and full-time Audit
Committee Members as observers

[Attached Documents]

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

1. Overview of the Group(1)

Business Progress and Results
During the fiscal year under review, the Japanese economy showed only a moderate recovery, as
consumer spending was sluggish due to rising prices, and capital investment lacked momentum. In the
global economy, the sense of economic slowdown intensified in China, while high prices and monetary
tightening also progressed in Europe and the U.S. Against this backdrop, uncertainty about the future of
the global economy increased.
Under such circumstances, the Group launched our new management plan, “Mission 2030,” this fiscal
year. With our new vision as the starting point, the management plan is based on the three growthstrategies of “Business Value Creation,” “Human Resources Value Creation,” and “Management Value
Creation,” and with fiscal 2030 as the goal year, is designed to enhance enterprise value through theimplementation of initiatives focused on both financial and non-financial areas. In the realm of “Business
Value Creation,” the core growth strategy, we have defined businesses that incorporate the three elementsof “specialty,” which is backed by our outstanding technologies, “megatrends,” which are the demandsof society, and “sustainability,” which is a critical requirement for business operations, as “three-starbusinesses,” and will be making such businesses the central components of our portfolio. In addition, we
aim to become a company where each and every employee can demonstrate empathy and experience selfactualization and growth, and we will be further reinforcing our managerial foundation through theadvancement of corporate governance from the perspective of ESG management, thereby enhancing thevalue of our human resources and management.
As a result, net sales totaled ¥389,263 million, down ¥18,295 million (4.5%) from the previous year.
Although we benefited from the positive impact of prices revised last fiscal year and the weaker yen, sales
volumes for core products such as electronic & innovative products and chloroprene rubber declined. In
terms of earnings, sales volume of some mainstay products decreased and cost associated with thedevelopment of specialty products increased, resulting in operating income of ¥13,376 million (down¥18,947 million, or 58.6% year on year) and ordinary income was ¥5,474 million (down ¥22,550 million,
or 80.5% year on year). Profit attributable to owners of parent was ¥11,947 million (down ¥821 million,
or 6.4% year on year), reflecting extraordinary loss from loss on business liquidation and extraordinary
gains from gain on sales of investment securities associated with the paring back of strategic
stockholdings.

(Reference)
Sales
Operating income
Ordinary income
Profit attributable to owners of parent¥389.3 billion (YoY −4.5%)¥13.4 billion (YoY −58.6%)¥5.5 billion (YoY −80.5%)¥11.9 billion (YoY −6.4%)

Results of operations by division are described below.
Electronics & Innovative Products Division(Sales: ¥87,839 million; Operating Income: ¥9,022 million)
Principal products: Electronic packaging materials, fine ceramics, fused silica, acetylene black,electronic circuit substrates, industrial tapes, etc.
As for high purity conductive carbon black, sales for xEVs remained strong in the first half of the
fiscal year under review, but were impacted by softening demand in the second half while sales forhigh-voltage cables temporarily declined due to a delay in installation work in Europe, resulting indecreased sales of this material. Demand for spherical alumina for xEV showed a recovery trend, but its
demand for consumer applications remained sluggish, resulting in decreased sales of this material.
25Additionally, sales of high-performance films and spherical fused silica filler for electronic components
and semiconductor-related fields decreased due to a decline in demand for consumer products such as
PCs and smartphones. Sales of HITTPLATE aluminum substrates for automotive applications was also
down year on year.
As a result, division sales decreased ¥5,701 million or 6.1% year on year to ¥87,839 million, while
operating income decreased ¥8,953 million or 49.8% year on year to ¥9,022 million.
Life Innovation Division(Sales: ¥47,078 million; Operating Income: ¥11,733 million)
Principal products: Vaccines, diagnostic reagents, oncolytic virus agents, etc.
As for POCT test reagents, COVID-19 rapid antigen test kits underperformed compared to theprevious year, but shipments of dual COVID-19 and influenza test kits increased due to the spread ofinfluenza, resulting in higher sales. In addition, sales of other test reagents were unchanged from theprevious year and shipments of influenza vaccines remained on par with the previous year.
As a result, division sales decreased ¥447 million or 0.9% year on year to ¥47,078 million, but
operating income decreased ¥2,645 million or 18.4% year on year to ¥11,733 million.
Elastomers & Infrastructure Solutions Division(Sales: ¥111,354 million; Operating Loss: ¥9,295 million)
Principal products: Chloroprene rubber, cement, special cement additives, fertilizers, calcium carbide,
fire resistant materials, environmental materials, etc.
In terms of selling prices, chloroprene rubber benefited from the contribution of phased priceincreases in the last fiscal year and the weaker yen. However, its sales volume decreased due to an
overall decline in demand and the temporary suspension of operations after the Noto Peninsula
earthquake, resulting in lower sales. In addition, sales of special cement additives were roughly in linewith the previous year while fertilizers sales declined year on year.
As a result, division sales decreased ¥12,472 million or10.1% year on year to ¥111,354 million, andoperating loss was ¥9,295 million (operating loss in the previous fiscal year was ¥1,100 million).
Polymer Solutions Division(Sales: ¥124,240 million; Operating Loss: ¥102 million)
Principal products: Styrene monomer, polystyrene resin, ABS resin, CLEAREN, heat-resistant resin,transparent resin, POVAL, synthetic fiber for wigs, food packaging materials, etc.
MS resins of Denka Singapore Pte. Ltd. experienced an increase in sales volume year on year withsales increase. On the other hand, sales of styrene monomer decreased due to a review of selling prices
in response to falling raw material prices, and sales volume of transparent resins decreased due to theimpact of the slowdown of the Chinese economy. Also, sales of sheets for food wrapping materials andits processed products, and the TOYOKALON® synthetic fiber for wigs remained weak.
As a result, division sales decreased ¥3,329 million or 2.6% year on year to ¥124,240 million, andoperating loss was ¥102 million (operating loss in the previous fiscal year was ¥1,228 million).
Others Division(Sales: ¥18,750 million; Operating Income: ¥1,896 million)
Principal business: Plant engineering etc.
Transaction volumes of Akros Trading Co. Ltd. and other trading companies remained roughly
unchanged year on year.
As a result, division sales increased ¥3,656 million or 24.2% year on year to ¥18,750 million, andoperating income decreased ¥615 million or 24.5% year on year to ¥1,896 million.

26

(2)

Capital Investment
During the eight-year term of the management plan “Mission 2030”, from fiscal 2023 to fiscal 2030,
the Group has planned cumulative capital investment to reach ¥540 billion, including 360 billion yen in
strategic investments, and in the fiscal year under review, the Group carried out capital investments
totaling ¥43,686 million.
In the Electronics & Innovative Products Division, in response to megatrends such as
semiconductor, xEVs and renewable energy, capital investments of ¥23,157 million were made in the“ICT & Energy” area for the construction projects, including the production capacity enhancement of
the next-generation functional spherical fillers and silicon nitride at the Company’s Omuta Plant,
spherical silica at Denka Advantech Pte., Ltd., a consolidated subsidiary in Singapore, and the acetylene
black production plant at Denka SCGC Advanced Materials Co., Ltd., a newly established consolidated
subsidiary in Thailand.
In the Life Innovation Division, capital investments of ¥3,886 million were made in the“Healthcare” area for the construction project to increase the production capacity of rapid antigen test
kits and test reagents at the Company’s Gosen Site and other projects.
In the Elastomers & Infrastructure Solutions Division, capital investments of ¥11,792 million weremade in the Company’s Omi Plant and others.
In the Polymer Solutions Division, capital investments of ¥4,673 million were made in the
Company’s Chiba Plant and others.
Besides, as a part of our efforts to enhance environmental contributions, in the “Sustainable Living”
area, we have concluded an agreement with Transform Materials LLC, a U.S. venture company, toconduct joint research and install demonstration facilities for the establishment of a low-carbon
acetylene chain. Additionally, in cooperation with the Company, Toyo Styrene Co., Ltd., a Denka’s
equity-method affiliate, completed the construction of a chemical recycling plant for used polystyrene tobuild a circular economy.

(3)

Financing
In fund procurement, the Company did not obtain any financing through the issue of new shares or
corporate bonds during the fiscal year under review.

(4)

Issues to be Addressed
The Group has promoted the management plan “Mission 2030” started in fiscal 2023. This
management plan is based on our “Vision” consisting of the Core Value we cherish, our Purpose as thecompass, and the Mission, which is the duties we aim to fulfill by 2030, and is designed to enhanceenterprise value through the implementation of initiatives focused on both financial and non-financial
areas with the three growth strategies of “Business Value Creation,” “Human Resources Value Creation,”and “Management Value Creation” in place. Regarding the growth strategy “Business Value Creation,”
which forms the core of our management plan, we would like to introduce some specific examples of ourefforts made in fiscal 2023, the first year of the plan.
In the “ICT & Energy” area, one of our focus areas, we established a joint venture with SCG
Chemicals Public Company Limited (headquartered in Bangkok, Thailand) for acetylene black used inlithium-ion batteries for xEVs and in high-voltage transmission line cables for offshore wind power
generation. At the same time, along with the construction of an acetylene black production plant inThailand, we are determined to strengthen our production and sales systems and stabilize our supply
system in anticipation of future growth in demand. In the “Healthcare“ area, the Company concluded acollaborative research agreement with VLP Therapeutics Japan, Inc. and the Research Institute forMicrobial Diseases of Osaka University regarding the development of influenza vaccines using nextgeneration mRNA technology. This technology not only has advantages of conventional mRNA
technology, which can be easily modified and swiftly manufactured, but is also expected to contribute to
the development of vaccines that are safe to use, effective at lower doses, and provide long-lasting
immunity. The Company has already increased the influenza vaccine production capacity to prepare forseasonal influenza season and established a system to deliver vaccines to as many people as possible. On
top of that, we have also begun developing next-generation vaccine technologies to continue contributing
to improving people’s quality of life (QOL). In the “Sustainable Living“ area, the Company and Toyo
Styrene Co., Ltd., a Denka’s equity-method affiliate, completed the construction of a chemical recycling
plant for used polystyrene at the Chiba Plant. The Group’s chemical recycling method produces material
that is equivalent to new material in quality and physical properties, and that can be used without any
restrictions, by chemically decomposing polystyrene into chemical raw materials, which can be recycled.
This method reduces CO2 emissions as compared to thermal recycling, contributing to the creation of a27

decarbonized, recycling-oriented society. In the realm of “Business Value Creation,” we will also pursue
sustainability together with specialty and megatrends.
The first year of the management plan, “Mission 2030,” suffered from changes in the economic
environment, such as prolonged sluggish demand for semiconductors, slowdown of the Chinese economy
and global inflation, as well as a decrease in demand for chloroprene rubber. Therefore, we were not able
to increase sales volume sufficient to offset the increase in upfront investment and other costs planned
under the previous management plan “Denka Value-Up.” Although there was an extraordinary gain fromthe sale of strategic shareholdings, the Company had to suffer severe business results due to the impactof the Noto Peninsula earthquake and an impairment loss associated with the termination of norovirus
vaccine development. Despite these circumstances, our long-term strategy remains unchanged. As
facilities built on upfront investment are scheduled to start their operations one after another in the coming
years, we will promote the three growth strategies in the “Mission 2030” while steadily capturing demand
for these facilities. However, we have to urgently respond to the changes in the assumptions of the
management plan so that we can restore our business performance to a growth track while also controlling
financial aspects. Specifically, first, we will accelerate portfolio transformation including selling or
exiting a business. Making the profitability improvement of the chloroprene rubber business a top priority,
we will carefully examine demand trends, optimal production capacity, etc. to determine drastic measures.
As for businesses that are difficult to incorporate the three elements of specialty, megatrends, andsustainability, we will set a deadline for finalizing necessary measures. In this way, we are going toaccelerate portfolio transformation and concentrate our management resources on growth areas toimprove business performance and financial condition. Second, we will review our investment plan. In
other words, the priority for investment projects will be clarified for more careful selection and, if changes
in business environment makes a project less urgent, we will postpone such a project. We are determined
to be very strict in selecting investment projects and review the timing and others. Furthermore, with thefull commitment of the top management, we will vigorously promote company-wide cost reduction
projects. This project is not just for cost reduction. Rather, we will adopt best practices new to us in order
not only to reduce cost and improve operational efficiency but to help employees grow; thereby, the entire
company will work together to contribute not only to “Business Value Creation” but also to “Human
Resources Value Creation” and “Management Value Creation” to put our profit level back on a growth
track.
In fiscal 2023, we experienced serious incidents that threaten the principles of “maintaining safe work
environments” and “assuring the quality of our products,” which are the very foundation of our continued
existence as a manufacturer.
On June 14, 2023, a pipe burst accident occurred at the Omi Plant (Itoigawa, Niigata Prefecture)
during maintenance work on production equipment, which claimed the life of one person and injured two
people; all were the employees of our partner company engaged in the construction work. After this
accident, the Company was fully cooperating with the investigations into the cause of the accident byrelevant authorities while forming an Accident Investigative Committee consisting of external experts
and specialists on July 11, 2023, aiming for conducting a more expert investigation, looking into the cause
more exhaustively and formulating measures to prevent any recurrence. On January 11, 2024, we received
the final report*1 from the Committee. We take the recommendations of the committee very seriously,
and are working diligently to ensure the implementation of measures to prevent recurrence and to fostera culture of safety.
On May 29, 2023, the Company announced improprieties related to certain resin products
manufactured and sold by the Company and Toyo Styrene Co., Ltd., an equity-method affiliate, andcertified by Underwriters Laboratories Limited Liability Company, an independent safety scienceorganization based in the United States, etc. In response to this incident, we established an external
investigation committee consisting of outside experts who have no vested interests with the Group andcommissioned the committee to thoroughly investigate the improprieties, determine their causes andformulate measures to prevent any recurrence. On December 11, 2023, we received an investigation
report*2 from the committee. The report pointed out a number of organizational issues, including a lackof a system to ensure the psychological safety of those who speak up improprieties. We take the findingsof the investigation report seriously and are doing our utmost to implement drastic measures to ensurethat the management stance of placing the highest priority on compliance permeates throughout the Group.
Although the above two cases didn’t have a particular impact on our financial results, the principlesof “maintaining safe work environments” and “assuring the quality of our products” are mission-criticalfor a manufacturer. Thus, the Company took these two incidents very seriously and returned a portion of
the compensation of the officers involved. We are determined not to recur such incidents by taking a wide28

range of preventive measures in the areas of governance, management, processes, and human resourcesmanagement.
On April 9, 2024 (local time), the U.S. Environmental Protection Agency (EPA) announced new
chemical air emission regulations applicable to chloroprene rubber manufacturing facilities, including
Denka Performance Elastomer LLC (“DPE”), a Company’s U.S. subsidiary. Under the newly announced
chemical air emission regulations (“new regulations”), chloroprene rubber manufacturing facilities in the
U.S. are required to take various emission control measures to substantially reduce emissions ofchloroprene monomers*3. The new regulations respond to the results of the EPA’s Risk and Technology
Review (RTR), which is based on the EPA’s 2010 Integrated Risk Information System (IRIS)
carcinogenicity assessment of chloroprene monomers. In contrast, DPE has long demanded that the EPA
review the carcinogenicity assessment of chloroprene monomers based on the latest science, claiming thatthe carcinogenicity of chloroprene monomers is overestimated by IRIS. DPE has consistently operated
this business of manufacturing chloroprene rubber in compliance with the emission standards of the stateof Louisiana since it took over the business in November, 2015. It also voluntarily invested in theenvironment and achieved an 85 percent reduction in Chloroprene monomers emissions as of 2019
compared to 2014. Since the new regulations are not considered to be a legitimate review of the
carcinogenicity assessment based on the latest science and may have a significant impact on DPE’scontinued operations, DPE submitted a request for an extension of the grace period for taking emissions
reduction measures, and will take all possible actions, including filing a lawsuit in the U.S. Court ofAppeals for review of the regulations.
The entire Group will once again reaffirm our core values of “Initiative,” “Integrity,” and “Empathy”
which we cherish in order to work on achieving our Purpose “Make the world a better place as specialists
in chemistry.” Furthermore, in order to focus on our three-star business incorporating the three elementsof specialty, megatrends, and sustainability, the Group will work as one to engage in “Business Value
Creation,” in which we are going to develop new businesses while reforming existing businesses, “Human
Resources Value Creation” and “Management Value Creation.”*1: “Final Report on the Investigation of the Chloroprene Monomer Production Equipment Accident at
the Omi Plant” (in Japanese)
https://www.denka.co.jp/storage/news/pdf/1193/20240111_denka_omi_finalreport.pdf*2: “Announcement Concerning the Report of an External Investigation Committee Regarding
Improprieties Related to Third-Party Certification of Resin Products of Denka and Toyo Styrene, an
Equity-Method Affiliate” (in Japanese)
https://www.denka.co.jp/storage/news/pdf/1185/20231211_denka_report_measures.pdf*3: Chloroprene monomer: Chemical substance that is a raw material of chloroprene rubber

29

(5)

Financial Position and Results of Operations
Item

162nd term(Millions of yen, unless otherwise stated)
163rd term
164th term
165th term(from April 1, 2020 to (from April 1, 2021 to (from April 1, 2022 to (from April 1, 2023 toMarch 31, 2021)
March 31, 2022)
March 31, 2023)
March 31, 2024)

Net sales
354,391
384,849
407,559389,263
Operating income
34,72940,12332,324
13,376
Ordinary income
32,14336,47428,025
5,474
Profit attributable to11,94722,78526,012
12,768owners of parent
Net income per share
264.24301.67148.8
138.61(yen)
Total assets
526,035
557,646
592,158
616,244
Total net assets
270,036
292,094
300,351
316,915
Net assets per share
3,101.92
3,345.34
3,438.28
3,568.69(yen)
Total shareholders’
50.8
51.7
50.1
49.9
equity ratio (%)
Return on equity
8.8
9.4
4.4
4.0
(ROE) (%)
Total dividends paid
10,785
12,5108,627
8,627
Dividends per share
125.00145.00100.00100.00(yen)
Notes: 1. Net income per share is calculated using the average number of shares issued andoutstanding excluding treasury stock. Net assets per share are calculated using thenumber of shares issued and outstanding at the end of the fiscal year excluding
treasury stock.
2. For total dividends paid and dividends per share for the 165th term, the sum of theinterim dividend paid in December 2023 and the dividend proposed for resolution at
this Ordinary General Meeting of Shareholders is indicated.

30

(6) Significant Subsidiaries (as of March 31, 2024)
1) Significant subsidiaries
Company name

CapitalDenka Chemicals Holdings
Asia Pacific Pte., Ltd.

USD 68,700 thousand

Denka Singapore Pte., Ltd.

SGD 69,410 thousand

Denka Advantech Pte., Ltd.

SGD 17,000 thousand

Denal Silane Co., Ltd.

JPY 500 million

Denka Advanced Materials(Suzhou) Co., Ltd.

CNY 55,440 thousand

Denka Electronic Materials
Dalian Co., Ltd.

JPY 1,000 million

Denka Advanced Materials
Vietnam Co., Ltd.

USD 12,000 thousand

Denka SCGC Advanced
Materials Co., Ltd.
Denka Performance
Elastomer LLC

THB 3,232,590 thousand

USD 121,000 thousand

Hinode Kagaku Kogyo

JPY 300 million

Nishi-nihon Koatsu Gas Co.,Ltd.

JPY 80 million

Denka RENOTEC Co., Ltd.

JPY 50 million

Denka Azumin Co., Ltd.

JPY 300 million

Denka Inorganic Materials
Tianjin Co., Ltd.
Denka Infrastructure
Malaysia Sdn Bhd.
Denka Construction Solutions
Malaysia Sdn Bhd.

MYR 8,649 thousand

PT. Hissan Trading Indonesia

IDR 10,001,376
thousand

DENKA Polymer Co., Ltd.

JPY 2,080 million

Denka Astec Co., Ltd.
Denka Chemicals Shanghai
Co., Ltd.

JPY 250 million

MYR 1,500 thousand

JPY 50 million
USD 2,000 thousand

31

The
Company’s
percentage ofequityparticipation

Principal business

Regional headquarters forSoutheast and South Asia
Manufacturing and sales of
100.0
acetylene black and functional(100.0)resin products
Manufacturing and sales of
100.0 fused silica, spherical(100.0) alumina, and synthetic fiber
for wigs and hairpieces
Manufacturing and sales of
51.0
monosilane gas, etc.
Manufacturing, processing,
100.0 and sales of electronic
packaging materials
Processing and sales of
100.0
electronic materials
Manufacturing and sales of
100.0
electronic packaging materials(100.0)and vinyl tapes
60.0 Manufacturing and sales of(35.0) acetylene black
70.0 Manufacturing and sales of(70.0) synthetic rubbers
Manufacturing and sales of
100.0 fertilizers and chemical
products
Manufacturing and sales of
100.0
high-pressure gas
Repair, design, engineering
100.0 and management work forconcrete structures
Manufacturing and sales of
100.0 fertilizers and agricultural
materials
Manufacturing and sales of
100.0
special cement additives
100.0 Manufacturing and sales of(100.0) construction chemicals
100.0 Manufacturing and sales of(100.0) construction chemicals
100.0 Sales of special cement(100.0) additives, etc.in Indonesia
Manufacturing and sales of
100.0 various packaging materials
and plastic containers
Manufacturing, processing,
100.0
and sales of rain gutters
Sales of various products and100.0 headquarters for Group
companies in China
100.0

Company name

The
Company’s
percentage ofequityparticipation

CapitalPrincipal business

Import, export and sales of
100.0 chemical and electronics
products
Design and engineering of
Denka Consultant &JPY 50 million
100.0 various industrial facilities,
Engineering Co., Ltd.
transportation facilities, etc.
Sales of inorganic industrial
products, organic industrial
Akros Trading Co. Ltd.
JPY 1,200 million
76.8 products, civil engineeringand construction materials,
interior materials, etc.
Akros Trading China Co.,
100.0 Sales of electronic packaging
USD 300 thousandLtd.
(100.0) materials, etc.
Sales of resins andAkros Trading Taiwan Co.,
100.0
TWD 29,000 thousandsemiconductor-related
Ltd.
(100.0)materials, etc.
Note: 1. The Company’s percentage of equity participation is calculated by dividing the numberof shares held by the Company by the number of shares issued and outstanding. The
figure within parentheses indicates the percentage of indirect ownership by subsidiaries.
2. The capital of Denka SCGC Advanced Materials Co., Ltd. represents the paid-in
capital of THB 3,232,590 thousand out of the registered capital of THB 7,258,560
thousand.
Denka Chemicals GmbHEUR 256 thousand

2) Significant affiliates
Company nameToyo Styrene Co., Ltd.
Denak Co., Ltd.
Kurobegawa Power Plant

The Company’s
percentage ofequityparticipation

CapitalJPY 5,000 million
JPY 600 million
JPY 3,000 million

32

Principal business

Manufacturing processing
50.0 sales of polystyrene resin andstyrene-based special resin.
Manufacturing and sales of
50.0
monochloroacetic acid
Operation of electric power
50.0 business and other incidental
business(7) Principal Business Details (as of March 31, 2024)
The Company manufactures and sells the following products.
Business division

Main productsElectronics & Innovative
Products Division
Life Innovation Division
Elastomers &Infrastructure Solutions
Division

Electronic packaging materials, fine ceramics, fused silica, acetylene
black, electronic circuit substrates, industrial tapes, etc.
Vaccines, diagnostic reagents, oncolytic virus agents, etc.

Polymer Solutions Division
Others Division(8)

Chloroprene rubber, cement, special cement additives, fertilizers,
calcium carbide, fire resistant materials, environmental materials, etc.
Styrene monomer, polystyrene resin, ABS resin, CLEAREN, heatresistant resin, transparent resin, POVAL, synthetic fiber for wigs, foodpackaging materials, etc.
Plant engineering etc.

Principal Offices and Factories (as of March 31, 2024)
Company namePrincipal offices
Head Office:1-1, Nihonbashi-Muromachi 2-chome, Chuo-ku,
TokyoBranches:
Tokyo, Osaka, Nagoya, Fukuoka, Kanetsu(Saitama) Sapporo
Denka Co., Ltd.
Plants:Omi (Itoigawa, Niigata Prefecture), Omuta, Chiba(Ichihara, Chiba Prefecture), Shibukawa, Ofuna(Kamakura, Kanagawa Prefecture), Isesaki, Gosen
Research Institutes: Denka Innovation Center (Machida, Tokyo)
Denka Chemical Holdings
Head Office: Singapore
Asia Pacific Pte., Ltd.
Denka Singapore Pte., Ltd. Head Office and Plants: Singapore
Denka Advantech Pte., Ltd. Head Office and Plant: Singapore
Denal Silane Co., Ltd.
Head Office: Chuo-ku, Tokyo
Denka Advanced Materials
Head Office and Plant: Suzhou, Jiangsu, China(Suzhou) Co., Ltd.
Denka Electronic Materials
Head Office and Plant: Dalian, Liaoning, China
Dalian Co., Ltd.
Denka Advanced Materials
Head Office and Plant: Hung Yen, Vietnam
Vietnam Co., Ltd.
Denka SCGC Advanced
Head Office and Plant: Rayong, Thailand
Materials Co., Ltd.
Denka Performance
Head Office and Plant: Louisiana, United States
Elastomer LLC
Hinode Kagaku Kogyo
Head Office and Plant: Maizuru, Kyoto Prefecture
Nishi-nihon Koatsu Gas
Head Office: Fukuoka, Fukuoka PrefectureCo., Ltd.
Denka RENOTEC Co.,
Head Office: Chuo-ku, TokyoLtd.
Denka Azumin Co., Ltd.
Head Office and Plant: Hanamaki, Iwate Prefecture
Denka Inorganic Materials
Head Office and Plant: Tianjin, China
Tianjin Co., Ltd.
Denka Infrastructure
Head Office and Plant: Selangor, Malaysia
Malaysia Sdn Bhd.
Denka Construction
Solutions Malaysia Sdn
Head Office and Plant: Selangor, Malaysia
Bhd.
PT. Hissan Trading
Head Office: Jakarta, Indonesia
Indonesia

33Company name
DENKA Polymer Co., Ltd.
Denka Astec Co., Ltd.
Denka Chemicals Shanghai
Co., Ltd.
Denka Chemicals GmbH
Denka Consultant &Engineering Co., Ltd.
Akros Trading Co., Ltd.
Akros Trading China Co.,Ltd.
Akros Trading Taiwan Co.,Ltd.

Principal offices
Head Office: Koto-ku, Tokyo
Plants: Sakura, Katori (Tako-machi, Chiba Prefecture), Goi (Ichihara,
Chiba Prefecture)
Head Office: Minato-ku, Tokyo
Plant: Kasai, Hyogo Prefecture
Head Office: Shanghai, China
Head Office: Düsseldorf, Germany
Head Office: Ichihara, Chiba Prefecture
Head Office: Minato-ku, Tokyo
Head Office: Shanghai, China
Head Office: Hsin-Chu, Taiwan(9) Employees (as of March 31, 2024)
1) The Group
Business segment
Number of employees
1,660
[173]
Electronics & Innovative Products Division
Life Innovation Division
966
[194]
Elastomers & Infrastructure Solutions Division
1,628
[263]
Polymer Solutions Division
1,158
[207]
Others Division
696
[152]
Corporate (common)
406
[71]
Total
6,514 [1,060]
Notes: 1. The number of employees indicated is the number of full-time employees and theannual average number of temporary employees is indicated in brackets.
2. The number of employees indicated for “Corporate (common)” is the number of
employees who belong to administrative divisions that cannot be classified into a
specific business.
2) The Company
Increase (Decrease)from the previous
Average age
Average service years
fiscal year-end
4,330 [721]+132 [(44)]
40.7
16.1
The number of employees indicated is the number of full-time employees and the annual
average number of temporary employees is indicated in brackets.

Number of employees
Note:

34

(10) Principal Lenders (as of March 31, 2024)
LenderOutstanding borrowings (Millions of yen)
Syndicated loan
79,000Mizuho Bank, Ltd.
21,789The Norinchukin Bank
6,035
Sumitomo Mitsui Banking Corporation
5,278
MUFG Bank, Ltd.
3,981
Note: The syndicated loan is managed by Mizuho Bank, Ltd. and Sumitomo Mitsui Banking
Corporation and is co-financed.
(11) Other Significant Matters concerning the Group’s Current Situation
Not applicable.

35

2. Status of Shares (as of March 31, 2024)(1) Total Number of Authorized Shares

290,000,000 shares(2) Shares of Common Stock Issued

88,555,840 shares(including 2,282,919 shares of treasury stock)(3) Number of Shareholders

61,370(4) Major Shareholders
Number of shares
held(hundred shares)
151,148
96,326

Shareholder name

Percentage ofshares held
(%)
17.52
11.17

The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
Mizuho Trust & Banking Co., Ltd. Retirement Benefit
Trust Mizuho Bank Account32,1583.73(Account re-entrusted by Custody Bank of Japan, Ltd.)TAIJU LIFE INSURANCE COMPANY LIMITED
23,816
2.76
SSBTC CLIENT OMNIBUS ACCOUNT
22,305
2.59
National Mutual Insurance Federation of Agricultural
21,507
2.49
Cooperatives
Denka Employee Stockholding Association
14,187
1.64
Mitsui Sumitomo Insurance Company, Limited
11,066
1.28
MITSUI & CO., LTD.
10,874
1.26
Custody Bank of Japan, Ltd. (Trust Account 4)
10,771
1.25
Notes: 1. 2,282,919 shares of treasure stock have been excluded from the above list of major
shareholders.
2. Treasury stock is excluded for calculation of the percentage of shares held.
(5) Other Significant Matters concerning Shares
Not applicable.

3. Matters concerning the Company’s Stock Acquisition Rights (as of March 31, 2024)
Not applicable.

364. Company Officers(1)

Directors (as of March 31, 2024)
Name
Manabu Yamamoto
Toshio Imai

Kazuo Takahashi

Ikuo Ishida

Position
Chairman and
Director
Representative
Director, President
Representative
Director

Director

Responsibilities and significant concurrent positions

President and Chief Executive Officer
Senior Managing Executive Officer
Chief Technical Officer (CTO)
Chief Compliance Officer (CCO)
In charge of Purchasing Dept., Logistics Dept.,
Production & Process Technology Dept.,
Engineering Dept., Digital Strategy & Innovation Dept.
Managing Executive Officer
Chief Human Resource Officer (CHRO)In charge of Corporate Planning Dept., HR Dept.,
Corporate Communications Dept., Denka Corporation,
Denka Chemicals GmbH, Chinese BusinessYoshiyuki Fukuda

Director (Outside)
Director (Full-time
Mizuhiro Uchida
Audit Committee
Member)Director (Outside)
Representative Director of Global Professional Partners
Toshio Kinoshita(Audit Committee
Outside Director of TACHI-S CO., LTD.
Member)Director (Outside)
Akio Yamamoto(Full-time Audit
Committee Member)
Director (Outside)
General Manager, Intellectual Property and Legal Div.
Miyuki Matoba(Audit Committee
and compliance supervisor of NITTO KOHKI CO.,Member)LTD.
Notes: 1. Directors Mr. Yoshiyuki Fukuda, Mr. Toshio Kinoshita, Mr. Akio Yamamoto, and Ms.
Miyuki Matoba are outside directors as stipulated in Article 2, Item 15 of theCompanies Act.
2. Director who is an Audit Committee Member, Mr. Toshio Kinoshita is a certified
public accountant, and has an adequate level of knowledge regarding finance andaccounting.
3.The Company has appointed Director Mr. Mizuhiro Uchida as a Full-time Audit
Committee Member, in order to enhance the effectiveness of audits through better
information gathering and sufficient coordination with the Internal Control Dept., etc.,
and thereby strengthen audit and supervisory functions.
4. The Company designated Directors Mr. Yoshiyuki Fukuda, Mr. Toshio Kinoshita, Mr.
Akio Yamamoto, and Ms. Miyuki Matoba as independent officers as defined by Tokyo
Stock Exchange, Inc. and notified it of the designation.

37

(Reference) Executive Officers (as of July 1, 2024)
Title
Name
Responsibility
Toshio Imai
President and Chief
Executive Officer
Chief Technical Officer (CTO)
Senior Managing
Kazuo Takahashi
In charge of Purchasing & Logistics Dept.,
Executive Officer
Environment and Safety Dept.,
Quality Assurance Dept.
Engineering Dept.
Managing Executive Kazuya Tokumoto
President of Denka Performance Elastomer LLC
Officers
Rimiru Hayashida
Chief Financial Officer (CFO)In charge of Accounting Dept., Finance Dept.
Chief Human Resource Officer (CHRO)
Ikuo Ishida
Chief Compliance Officer (CCO)
In charge of Corporate Planning Dept.,
Best Practice Promoting Dept., HR Dept.,
Corporate Communications Dept., Denka Corporation,
Denka Chemicals GmbH, Chinese Business
Yukio Sasagawa
General Manager, Gosen Site
Hideki Toya
Executive Officers

Michio Kawamura

Chief Scientific Officer (CSO)
General Manager, New Business Development
General Manager, Innovation CenterIn charge of Production & Process Technology Dept.,
Digital Strategy & Innovation Dept., Sustainability
Promotion Dept.
Managing Director, DCHA, DSPL, DAPL

Masahiro Kawai

General Manager, Chiba Plant

Takeshi Hagiwara

General Manager, Omi Plant

Masahiro Omata

General Manager, Elastomers & Infrastructure
Solutions
General Manager, Polymer Solutions

Masanobu Kosaka

Kei Hara
Ken Watanabe

Hiroto Horiuchi

Deputy Division Director, New Business Development
In charge of New Business Creation Dept.
In charge of Special assignment (Strengthening ofgroup internal control)
General Manager, Electronics & Innovative Products

Tetsuo Noguchi

General Manager, Shibukawa Plant

Koji Nishimura

General Manager, Omuta Plant

Taro Inada

General Manager, Life Innovation

Akinori Adachi

In charge of Administrative Dept., Legal Dept.,
Secretary Dept., Internal Control Dept.
Notes: DCHA: Denka Chemicals Holdings Asia Pacific Pte., Ltd.
DSPL: Denka Singapore Pte., Ltd.
DAPL: Denka Advantech Pte., Ltd.

38

(2)

Directors who Retired during the Fiscal Year Under Review
Name

Date ofretirement

Reason for retirement

Tetsuya Shinmura

June 22, 2023

Expiration of term of office

Masaharu Suzuki

June 22, 2023

Expiration of term of office

Position, responsibilities andsignificant concurrent
positions at the time ofretirement
Director, Advisor
Director (Full-time Audit
Committee
Member)(3) Summary of Liability Limitation Agreements
Based on Article 427, Paragraph 1 of the Companies Act, the Company currently has liability
limitation contracts with Directors Mr. Yoshiyuki Fukuda, Mr. Toshio Kinoshita, Mr. Akio Yamamoto,and Ms. Miyuki Matoba that limit their liability for damages provided for in Article 423, Paragraph 1 ofsaid Act. The limit of liability under the contract is set to a predefined amount of ¥5 million or more or
the amount stipulated by laws and regulations, whichever is higher.
(4) Summary of Directors and Officers Liability Insurance
The Company has entered into a directors and officers liability insurance contract with an insurancecompany as stipulated in Article 430-3, Paragraph 1 of the Companies Act. The Company’s Directors(including Directors who are Audit Committee Members), Executive Officers, and Directors, Corporate
Auditor & Supervisory board members and Executive Officers of some of the Company’s Group
companies are insured parties under the contract. As a rule, the insured parties are not responsible forpaying insurance premiums.
The Directors and officers liability insurance covers legal damages and litigation expenses in theevent that a claim for damages is made against the insured persons due to an act committed by aninsured person in his/her capacity as such. However, measures have been implemented to ensure thatproper execution of duties by officers, etc. is not impaired. These include an exclusion where theCompany makes a claim for damages against the insured parties, as well as the establishment of adeductible amount.
(5) Remuneration and Other Payments to Directors
1) Policy on the determination of remuneration and other payments to individual Directors
The Board of Directors of the Company has decided on the following policy for determining
remuneration and other payments to individual Directors (hereinafter referred to as the “Decision
Policy”), after receiving recommendations and proposals from the Nomination & Remuneration
Advisory Committee.
[Basic Policy]
Remuneration for individual Directors (excluding Directors who are Audit Committee Members; thesame applies hereinafter) shall be in accordance with each Director’s roles and responsibilities andperformance, and shall be determined by the Board of Directors after receiving recommendations andproposals from the Nomination & Remuneration Advisory Committee, and set forth in internal
regulations, in order to enhance objectivity and transparency.
The structure of Directors’ remuneration shall, in addition to a fixed monthly amount of basic
remuneration, consist of performance-linked cash remuneration, designed to increase motivation to
improve the Company-wide and individual performance for each fiscal year, and stock remuneration,
designed to increase motivation to contribute to improving medium- and long-term performance andenhancing corporate value. These function as sound incentives to maintain growth. However, in view ofthe duties performed by Outside Directors and non-executive Directors, remuneration for these Directors
shall consist solely of basic remuneration.
[Policy on the determination of remuneration and other payments to individual Directors]i) Policy on the determination of the amount and calculation method of basic cash remuneration
Basic remuneration shall be determined in accordance with each Director’s roles andresponsibilities, taking into consideration factors such as the level of employee pay. It shall be paidin a fixed amount every month.
ii) Policy on the determination of the performance indicators, amount and calculation method of
performance-linked cash remuneration
39Performance-linked remuneration shall consist of Company-wide performance-linked remunerationand individual performance-linked remuneration. However, the Chairman and President shallreceive only Company-wide performance-linked remuneration, excluding the Chairman without
representative rights (non-executive Director).
The total amount of Company-wide performance-linked remuneration shall be determined withreference to consolidated operating income, a key indicator under the Company’s management plan.
It shall then be allotted in accordance with each Director’s roles and responsibilities, and paid
promptly after the financial results are finalized. However, if consolidated operating income isbelow a certain level, or a massive extraordinary loss is recorded, or if a serious compliance breachhas occurred, then no payment shall be made, or the payment amount shall be reduced. Individual
performance-linked remuneration shall be linked to each Director’s individual evaluation of theachievement and others of financial and non-financial targets, and shall be paid promptly after thefinancial results are finalized in accordance with internal regulations determined by the Company inadvance.
iii) Policy on the determination of the details, amount and calculation method of stock remuneration
The stock remuneration scheme shall utilize a trust structure. Points shall be granted to Directors
each month in accordance with rank, based on stock delivery regulation established by theCompany, and shares of the Company’s stock shall be delivered to Directors through the trust on
retirement, based on the number of points they have accumulated. The maximum amount of money
to be contributed by the Company to the trust for the purpose of delivering the Company’s shares to
Directors shall be ¥40 million per year.
iv) Policy on the determination of the proportions of the total amount of remuneration paid as basic
remuneration, performance-linked remuneration, and stock remuneration
No policy is established specifically to determine the proportion of Directors’ remuneration to be
paid as basic remuneration, performance-linked remuneration, and stock remuneration. However, if
the operating income target under the management plan is achieved, and the evaluation of individual
performance-linked compensation is standard, then the proportions will be approximately 60%, 30%
and 10% respectively.
v) Method used to determine remuneration and other payments to individual Directors
The details of remuneration and other payments to individual Directors shall be determined by the
Board of Directors, after receiving recommendations and proposals from the Nomination &Remuneration Advisory Committee, and set forth in internal regulations.
The individual performance-linked component of the remuneration for Directors shall be
determined by the President, who has been delegated this authority, after individual evaluation inaccordance with the internal regulations determined by the Board of Directors. In order to ensurethat the President exercises this authority appropriately, the Board of Directors shall establish inadvance the amount of remuneration linked to individual evaluations in the internal regulations andshall receive reports on the details of such remuneration.
Note: The underlined part was resolved to be changed at the Board of Directors meeting held on March
11, 2024, and has been effective since April 2024.
2) Reason why the details of remuneration and other payments to individual Directors are judged by
the Board of Directors to be in accordance with the Decision Policy
The Board of Directors establishes the details of remuneration in internal regulation, in accordancewith the Decision Policy, after receiving recommendations and proposals from the Nomination &Remuneration Advisory Committee. Remuneration for individual Directors is determined based on theseregulations. Therefore, the Board of Directors deems it to be in accordance with the Decision Policy.
Even though the individual performance-linked component of the remuneration for Directors isdetermined by the President, who has been delegated this authority, after individual evaluation inaccordance with the internal regulations, the Board of Directors receives reports on the details of suchcomponent and affirms that they are in accordance with the Decision Policy.

403) Remuneration and other payments to Directors

Category

Numberofpersons

Amount of
remuneration,
etc.
(Millions ofyen)

Breakdown
Cash remuneration
Performance-linked
Basic remuneration
remuneration
Number
Total
Number
Totalof(Millionsof(Millionspersonsof yen)personsof yen)Stockremuneration
Numberofpersons

Total(Millionsof yen)Directors(excluding
Directors
who are
Audit
6
205
6
162
2
14
5
27
Committee
(1)
(12)
(1)
(12)
(–)
(–)
(–)
(–)
Members)(of whichOutsideDirectors)
Directors(AuditCommittee
5
74
5
74
–
–
–
–
Members)
(3)
(36)
(3)
(36)
(–)
(–)
(–)
(–)
(of whichOutsideDirectors)
Total(of which
11
279
11
237
2
14
5
27
Outside
(4)
(48)
(4)
(48)
(–)
(–)
(–)
(–)
Directors)
Notes: 1. The maximum amount of cash compensation remuneration for Directors (excluding
Directors who are Audit Committee Members) is ¥490 million per year (of which the
maximum amount of remuneration for Outside Directors is ¥40 million, excluding the
portions of their salaries as employees) as resolved at the 160th Ordinary General
Meeting of Shareholders held on June 20, 2019. There were 7 Directors (excluding
Directors who are Audit Committee Members), including 2 Outside Directors, as of
the conclusion of the 160th Ordinary General Meeting of Shareholders.
2. The maximum amount of remuneration for Directors who are Audit Board Members is¥166 million per year as resolved at the 160th Ordinary General Meeting of
Shareholders held on June 20, 2019. There were 5 Directors who are Audit Board
Members as of the conclusion of the 160th Ordinary General Meeting of Shareholders.
3. Regarding the amount of stock remuneration for Directors (excluding Directors who
are Audit Committee Members or Outside Directors), the maximum amount of cash to
be contributed by the Company is ¥40 million per year, and the maximum number ofpoints to be awarded to Directors is 110,000 points per year, as resolved at the 160th
Ordinary General Meeting of Shareholders held on June 20, 2019. There were 5
Directors (excluding Directors who are Audit Committee Members or Outside
Directors) as of the conclusion of the 160th Ordinary General Meeting of
Shareholders.
4. There were 9 Directors as of March 31, 2024. The difference between the total number
of Directors shown in the table above and in (1) Directors is because the table above
includes remuneration for 2 Directors who retired at the conclusion of the 164th
Ordinary General Meeting of Shareholders held on June 22, 2023, as stated in (2)Directors who Retired during the Fiscal Year Under Review.
5. The total amount of stock remuneration is the amount of expenses recorded for the
fiscal year under review for the stock remuneration plan that allots shares of theCompany (a stock remuneration plan wherein a trust established by the Company
makes acquisitions using funds contributed by the Company, and shares of theCompany and cash equivalent to the disposal conversion amount of the Company’s
41

shares are allotted to Directors (excluding Directors who are Audit Committee
Members and Outside Directors) through said trust).
6. The amount of Company-wide performance-linked component of the performancelinked remuneration paid is determined with reference to the consolidated operating
income for each fiscal year. If consolidated operating income is below a certain level,or massive amount of extraordinary loss is recorded, or if a serious compliance breachhas occurred, then no payment is made, or the payment amount is reduced. The reason
why consolidated operating income has been selected as an index is because it is a key
indicator in the Company’s management plan. The trend in operating income for fiscal
2023 and other years is presented in 1. (5) Financial Position and Results ofOperations.
Individual performance-linked remuneration is linked to each Director’s individual
evaluation of the achievement and others of financial and non-financial targets, andthe payment amount is determined in accordance with internal regulations set by theCompany in advance.
(6) Outside Officers
1) Significant concurrent positions as business executors at other companies, etc. and therelationship between the Company and such companies, etc.
Director who is an Audit Committee Member Mr. Toshio Kinoshita is Representative Directorof Global Professional Partners. There are no significant transactions between the Company andGlobal Professional Partners.
Director who is an Audit Committee Member Ms. Miyuki Matoba is General Manager of theIntellectual Property and Legal Div. of NITTO KOHKI CO., LTD. There are no significant
transactions between the Company and NITTO KOHKI CO., LTD.
2) Significant concurrent positions as outside officers etc. at other companies, etc. and therelationship between the Company and such companies, etc.
Director who is an Audit Committee Member Mr. Toshio Kinoshita is Outside Director of
TACHI-S CO., LTD.
There are no significant transactions between the Company and TACHI-S CO., LTD.
3) Relationship with specified related parties such as major customers
Not applicable.
4) Principal activities in the fiscal year ended March 31, 2024
[Board of Directors meetings]
The Board of Directors met 14 times in the fiscal year ended March 31, 2024. Director, Mr.
Yoshiyuki Fukuda, attended all 14 meetings of the Board of Directors held (attendance rate: 100%).
Directors who are Audit Members, Mr. Toshio Kinoshita and Mr. Akio Yamamoto, and Ms. Miyuki
Matoba attended all 14 meetings of the Board of Directors (attendance rate: 100%). Mr. Yoshiyuki
Fukuda, based on his rich experience and wide views as a corporate executive and high-levelknowledge of corporate finance, actively made necessary inquiries and recommendations.
In addition, as Directors who are Audit Committee Members, Mr. Toshio Kinoshita, based on
his experience and rich accounting knowledge as a certified public accountant in Japan and the US,
Mr. Akio Yamamoto, based on his rich experience and wide views as a corporate executive and richinternational experience serving as a business manager at global companies, and Ms. Miyuki Matoba,
based on her rich experience and expert knowledge as a lawyer, actively made necessary inquiries andrecommendations.
[Audit Committee]
The Audit Committee met 14 times in the fiscal year ended March 31, 2024. Mr. Toshio Kinoshita,
Mr. Akio Yamamoto and Ms. Miyuki Matoba attended all 14 meetings of the Audit Committee(attendance rate: 100%.) Each member of the Audit Committee worked closely with the Internal
Control Dept., etc. to perform efficient and effective audits of the Company’s divisions anddepartments, business sites and subsidiaries and receive briefings on the status of business execution at42

periodic divisional report meetings. They reported the results of these activities to the Audit
Committee and had necessary discussions with other Directors who are Audit Committee Members.
Board of Directors
meetings
Attendance
Attendance
rate
Director
Yoshiyuki Fukuda
Director (Audit
Committee Member)
Toshio Kinoshita
Director (Audit
Committee Member)
Akio Yamamoto
Director (Audit
Committee Member)
Miyuki Matoba

Audit Committee
Attendance

Attendance
rate

14/14

100%

–

–

14/14

100%

14/14

100%

14/14

100%

14/14

100%

14/14

100%

14/14

100%

43

5) Summary of Duties Fulfilled by Outside Directors Related to Their Expected Roles
Summary of duties performed related
Expected roles
to expected roles
Recommendations and supervision
Inquiries and recommendations
regarding the Company’s management regarding finance strategy for the
Directorin general, based on his rich experience entire Group and risk management for
Yoshiyuki Fukuda
and wide views as a manager, andoverseas businesses
expert knowledge of corporate finance
Inquiries and recommendations
Supervision and audit of theregarding the strengthening of
Director (Audit
Company’s management, based on his
governance structures at the entire
experience and rich accounting
Committee Member)Group and business risk
knowledge as a certified public
Toshio Kinoshitaaccountant in Japan and the US
Recommendations and supervision
Inquiries and recommendations
regarding the Company’s management, regarding business environment andDirector (Audit
based on his rich experience in Japanrisk management in overseas businessCommittee Member)and overseas and wide views as aand new businesses
Akio Yamamoto
corporate executive, and richinternational experience serving as abusiness manager at global companies
Supervision and audit of theInquiries and recommendations
Director (Audit
Company’s management, based on her regarding the strengthening ofCommittee Member)rich experience and expert knowledge
governance structures at the entire
Miyuki Matoba
as a lawyer
Group and risk management
Note: In the fiscal year ended March 31, 2024, the Company announced improprieties identified at theCompany and Toyo Styrene Co., Ltd., an equity-method affiliate, related to certification by
Underwriters Laboratories Limited Liability Company, a U.S-based independent safety scienceorganization, and others.
Each of the Outside Directors was unaware of this case until it was brought to light. However, Outside
Directors had regularly made remarks at the Company’s Board of Directors meetings and othermeetings from the perspective of emphasizing compliance and strengthening the group governancesystem. Upon learning of the fact, they have fulfilled their responsibilities by strongly demanding an
investigation into all the facts and the cause of the improprieties from an objective standpoint
independent of the Company, and by actively and constructively proposing recurrence prevention
measures such as more robust group governance and further reform of organizational climate andsystems.

44

5. Accounting Auditor(1)

Accounting Auditor’s Name
Ernst & Young ShinNihon LLC(2)Accounting Auditor’s Remuneration, etc. for the Fiscal Year Ended March 31, 2024
Amount paid (thousands of yen)
Remuneration, etc. for the Accounting Auditor for the
102,000
fiscal year ended March 31, 2024
Monetary or property benefits to be paid by the Company
136,804
and its subsidiaries to the Accounting Auditor
Notes: 1. Under the audit agreement between the Company and its Accounting Auditor,
remuneration for audits based on the Companies Act and that for audits based on the
Financial Instruments and Exchange Act are not strictly distinguished and they cannot
be substantially distinguished. Consequently, the sum of the amounts of these
remunerations is stated as the amount of remuneration, etc. for the Accounting Auditor
for the fiscal year ended March 31, 2024.
2. The Audit Committee of the Company, in observance of the “Practical Guidelines for
Cooperation with Accounting Auditors” published by the Japan Audit & Supervisory
Board Members Association, has confirmed the time taken to audit each audit item
compared to audit plans for previous fiscal years and comparisons with amounts forother companies as disclosed for the fiscal year ended March 31, 2023, and agrees tothe fees, etc., of the Accounting Auditor under Article 399, Item 1 of the Companies
Act.
3. Financial statements (including corresponding statements) of some of the Company’s
significant subsidiaries are audited (subject to regulations of the Companies Act andthe Financial Instruments and Exchange Act; including corresponding laws andregulations overseas) by Certified Public Accountants or Audit Corporations(including persons with qualifications that correspond to these qualifications overseas)other than the Company’s Accounting Auditor.

(3)

Non-audit Services
The Company pays fees to Ernst & Young ShinNihon LLC mainly for confirmation provided inrelation to applications for reduction or exemption under the Japanese renewable energy feed-in-tariff(FIT) scheme.

(4)

Policy for Determination of Dismissal or Non-reappointment of the Accounting Auditor
If the Audit Committee considers that it has become difficult for the Accounting Auditor to perform
its duties appropriately or otherwise considers it necessary, the Audit Committee will make a resolution
for dismissal or non-reappointment of the Accounting Auditor, and will submit a proposal to theGeneral Meeting of Shareholders.
If it is deemed appropriate to dismiss the Accounting Auditor is deemed, because it falls under any
item of Article 340, Paragraph 1 of the Companies Act, the Audit Committee will dismiss the
Accounting Auditor upon consent of all the Audit Committee Members.

(5)

Disposition of Suspension of Business of the Accounting Auditor during the Past Two Years
Not applicable.

(6)

Outline of the Limited Liability Contracts
Not applicable.

45

Consolidated Financial Statements
Consolidated Balance Sheet(As of March 31, 2024)(Millions of yen)Account item

(Reference)
164th term
592,158

165th term

Account item

(Reference)
164th term
291,807

165th term

616,244(Liabilities)

251,793

265,447

164,457

171,557

20,19935,38647,96954,19398,081

96,43144,7546,000

46,3686,000

81,461

81,235

11,975

5,000

5,477

5,816

Current liabilities
Notes and accounts payabletrade
Short-term loans payable
Commercial paper
Current portion of longterm loans payable
Current portion of bonds
payable–7,000

34,18334,565

Accounts payable-other

22,01819,23812,607

12,262

Income taxes payable

4,228

4,479

(216)

(249)

231

946

340,365

350,796

Accrued expenses

13,068

14,673

262,711281,880

Provision for bonuses

3,022

2,968

50,64250,557Other

11,187

10,689Structures
Machinery andequipment
VehiclesTools, furniture andfixtures30,31830,043

Noncurrent liabilities

127,349

127,771

92,592

92,404

Bonds payable

37,00030,000693

708Long-term loans payable

70,00080,000

4,360

4,565

Deferred tax liabilities

1,369

3,043

Land

63,18063,740

8,367

8,367

Lease assets
Construction in progress

2,824
18,097
11,001

3,451
36,4095,001

Deferred tax liabilities forland revaluation
Net defined benefit liability
Provision for stock benefits
Other

5,366
81
5,165

657
110
5,593

1,279

1,429

(Net assets)

300,351

316,915

5,992
3,729

44
3,527

Shareholders’ equity
Capital stock

262,145
36,998266,192
36,99866,652

63,914

Capital surplus

49,40649,40558,07252,511Retained earnings

183,391

187,574

117

101

Treasury stock(7,650)(7,785)

3,052

2,579

34,334

41,344

Deferred tax assets

2,995

6,371

16,35014,257

Other

2,486

2,423

Accumulated othercomprehensive income
Valuation difference on
available-for-sale securities
Deferred gains or losses onhedges

(246)

(34)

(72)

(72)

Revaluation reserve for land

10,407

10,407

Foreign currency translation
adjustment
Remeasurements of defined
benefit plans
Non-controlling interests

11,101

16,680(3,277)

33

3,871

9,377

592,158

616,244(Assets)
Current assets
Cash and deposits
Notes and accounts
receivable-trade, andcontract assets
Merchandise andfinished goods
Work in process
Raw materials andsupplies
Other
Allowance for doubtful
accounts
Noncurrent assets
Property, plant andequipment
Buildings

Intangible assets
Software
Goodwill
Right of using patent
Investments and otherassetsInvestment securities
Long-term loans
receivable
Long-term prepaid
expenses

Allowance for doubtful
accounts

Accrued consumption taxes

Total
592,158
616,244
Total(Note) Amounts are rounded down to the nearest million yen.

46

299,329

Consolidated Statement of Income(From April 1, 2023 to March 31, 2024)(Millions of yen)
(Reference)
164th term
407,559

Account item
Net sales
Cost of sales
Gross profit
Selling, general, and administrative expenses
Operating income

165th term
389,263305,217306,762

102,342

82,50170,017

69,12432,324

13,376

Non-operating income
Interest and dividend income

2,234

1,663

Equity in earnings of affiliates

2,328

1,731

Other

704

5,268

1,770

5,165

Non-operating expenses
Interest expenses

1,157

Other

8,409

Ordinary income

1,683
9,567

11,38428,025Extraordinary income
Gains on shares of sale of subsidiaries andassociates
Loss on sales of investment securities

425
4,970

13,067
5,474

–
5,396

17,442

17,442Extraordinary loss
Loss on liquidation of business

18,830Loss due to disaster–

Income before income taxes

7,573
18,830859

14,483

14,590

Income taxes-current

7,327

Income taxes-deferred(5,773)

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent(Note) Amounts are rounded down to the nearest million yen.

47

8,433

5,147
1,553

(2,680)2,466

13,037

12,017268

69

12,768

11,947

Non-consolidated Financial Statements
Non-consolidated Balance Sheet(As of March 31, 2024)(Millions of yen)Account item
(Assets)
Current assets
Cash and deposits(Reference)
164th term
482,552

165th term

Account item

(Reference)
164th term
261,646

165th term

485,629(Liabilities)

267,232

196,219

199,992

Current liabilities

144,092

146,669

5,901

14,060Accounts payable-trade35,97937,605

Notes receivable-trade

5,399

5,986

Short-term loans payable

27,67527,675

Accounts receivable-trade70,604

67,951

6,000

6,000

Merchandise and finished goods

69,393

66,875

Commercial paper
Current portion of long-termloans payable

11,9755,000Work in progress

5,082

5,435

Current portion of bonds payable

–

7,000

Raw materials and supplies

26,32827,072

Accounts payable-other

21,281

17,073

Prepaid expenses

2,154

2,096

Income taxes payable

2,489

2,975

Short-term loans receivable

Accrued consumption taxes

230

308

–

626

11,134

10,214

Accrued expenses

10,404

11,253(11)(10)

Deposits received

22,30024,808286,333

285,636

Provision for bonuses

2,399

2,340

214,192

222,658

Other

3,589

4,311

42,467

41,980Noncurrent liabilities

117,553

120,562

Structures

24,16623,565

Bonds payable

37,00030,000Machinery and equipment

67,56966,08170,00080,000

598

635

8,367

8,367

Tools, furniture and fixtures
Land
Leased assets

3,525
61,466172

3,614
61,980167

Long-term loans payable
Deferred tax liabilities for land
revaluation
Provision for stock benefits
Asset retirement obligations
Other

81
1,823
281

110
1,825
258

Construction in progress

14,226

24,633(Net assets)

220,906

218,397

Intangible assets

1,348

1,464

Shareholders’ equity

196,455

195,926

Software

972

1,141

Capital stock

36,99836,998Right of using patent

376

322

Capital surplus

49,28449,284

Investments and other assets

70,79361,513

Legal capital surplus

49,28449,284

Investment securities
Stocks of subsidiaries andaffiliates
Long-term loans receivable

30,07522,966

Other capital surplus

0034,241

28,487Retained earnings

117,823

117,429

117

101

117,823

117,429

Long-term prepaid expenses

2,586

3,602

3,589

Prepaid pension cost

1,542

114,220

113,840

Deferred tax assets

690(7,650)(7,785)

Other investments
Allowance for doubtful
accounts

1,540

Other retained earnings
Reservefor advanced depreciation of
2,097
noncurrent assets
Retained earnings brought
1,391
forward
4,956
Treasury stockand translation
1,515 Valuation
adjustments
Valuation difference on(2)
available-for-sale securities
Revaluation reserve for land

24,45022,47014,043

12,062

10,407

10,407

482,552

485,629

Other
Allowance for doubtful
accounts
Noncurrent assets
Property, plant andequipment
Buildings

Vehicles

Total

(1)
482,552

485,629

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

48

Non-consolidated Statement of Income(From April 1, 2023 to March 31, 2024)(Millions of yen)
(Reference)
164th term
327,019

Account item
Net sales
Cost of sales
Gross profit
Selling, general, and administrative expenses
Operating income

165th term
303,694

252,966

249,393

74,05354,30051,954

49,83422,0984,466

Non-operating income
Interest and dividend income

3,984

Other

1,618

6,537
5,602

1,518

8,055

Non-operating expenses
Interest expenses

1,001

Other

5,730

Ordinary income

1,640
6,732

8,542

20,969Extraordinary income
Gains on shares of sale of subsidiaries andassociates
Gain on sales of investment securities

1,093
4,961

10,182
2,339

–

6,055

15,373

15,373Extraordinary loss
Loss on liquidation of business
Loss on valuation of shares of subsidiaries andassociates
Loss due to disaster

18,750

788

–

9,177

–

Income before income taxes

18,750804

8,274

Income taxes-current

5,408

Income taxes-deferred(5,786)

Profit

49

6,942
3,303

(377)
8,652

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

10,770(3,732)

(428)
7,370

Transcript of Accounting Auditor’s Audit Report on Consolidated Financial Statements

Independent Auditors’ Report(English Translation)
May 8, 2024
To the Board of Directors
Denka Co., Ltd.
Ernst & Young ShinNihon LLC
Tokyo office
Takao Maruyama
Certified Public Accountant
Designated and Engagement Partner
Yasuyuki Kitamura
Certified Public Accountant
Designated and Engagement Partner
Yuki Nakano
Certified Public Accountant
Designated and Engagement Partner

OpinionPursuant to Article 444, Paragraph 4 of the Companies Act, we have audited the accompanying
consolidated financial statements, which comprise the consolidated balance sheet, the consolidated statementof income, the consolidated statement of changes in net assets and the notes to the consolidated financial
statements of Denka Co., Ltd. (the “Company”) for the fiscal year from April 1, 2023 through March 31,2024.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the financial position and results of operations of the Denka Group, which consists of the Company and its
consolidated subsidiaries, for the period covered by the consolidated financial statements in conformity withaccounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibility under the auditing standards is stated in “Auditor’s Responsibility for the Audit of theConsolidated Financial Statements.” We are independent of the Company and its consolidated subsidiaries inaccordance with the provisions related to professional ethics in Japan, and are fulfilling other ethicalresponsibilities as an auditor. We believe that we have obtained sufficient and appropriate audit evidence toprovide a basis for our audit opinion.
Other Information
Other information refers to the business report and supplementary schedules. Management is responsible forthe preparation and disclosure of other information. The Audit Committee are responsible for monitoring theexecution of Directors’ duties related to designing and operating the reporting process for other information.
Other information is not included in the scope of our opinion on the consolidated financial statements, andwe express no opinion on it.
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Our responsibility with respect to the audit of the consolidated financial statements is to read through otherinformation and, in this process, to consider whether any material differences exist between other informationand the consolidated financial statements or knowledge we have gained through the auditing process; also, toremain alert for any other indications of material error in other information.
We are required to report any matter that we consider constitutes a material error in other information,
based on the work we have undertaken.
We have nothing to report regarding other information.
Responsibilities of Management and the Audit Committee for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statementsin accordance with accounting principles generally accepted in Japan, and for designing and operating suchinternal control as management determines is necessary to enable the presentation and fair presentation of theconsolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing whether it isappropriate to prepare the consolidated financial statements in accordance with the premise of a going
concern, and for disclosing matters relating to going concern when it is required to do so in accordance withaccounting principles generally accepted in Japan.
The Audit Committee are responsible for monitoring the execution of Directors’ duties related to designingand operating the financial reporting process.
Auditor’s Responsibility for the Audit of the Consolidated Financial Statements
Our responsibility is to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to express an opinion on the
consolidated financial statements from an independent standpoint in an audit report, based on our audit.
Misstatements can occur as a result of fraud or error, and are deemed material if they can be reasonably
expected to, either individually or collectively, influence the decisions of users taken on the basis of theconsolidated financial statements.
We make professional judgment in the audit process in accordance with auditing standards generally
accepted in Japan, and perform the following while maintaining professional skepticism.
・ Identify and assess the risks of material misstatement, whether due to fraud or error. Design andimplement audit procedures to address the risks of material misstatement. The audit procedures shall beselected and applied as determined by the auditor. In addition, sufficient and appropriate audit evidence
shall be obtained to provide a basis for the audit opinion.
・ In making those risk assessments, the auditor considers internal control relevant to the entity’s audit inorder to design audit procedures that are appropriate in the circumstances, although the purpose of theaudit of the consolidated financial statements is not to express an opinion on the effectiveness of theentity’s internal control.
・ Assess the appropriateness of accounting policies adopted by management and the method of theirapplication, as well as the reasonableness of accounting estimates made by management and the adequacyof related notes.
・ Determine whether it is appropriate for management to prepare the consolidated financial statements on
the premise of a going concern and, based on the audit evidence obtained, determine whether there is asignificant uncertainty in regard to events or conditions that may cast significant doubt on the entity’s
ability to continue as a going concern. If there is a significant uncertainty concerning the premise of agoing concern, the auditor is required to call attention to the notes to the consolidated financial statementsin the audit report, or if the notes to the consolidated financial statements pertaining to the significant
uncertainty are inappropriate, issue a modified opinion on the consolidated financial statements. While theconclusions of the auditor are based on the audit evidence obtained up to the date of the audit report,
depending on future events or conditions, an entity may be unable to continue as a going concern.
・ Besides assessing whether the presentation of and notes to the consolidated financial statements are inaccordance with accounting principles generally accepted in Japan, assess the presentation, structure, and51

content of the consolidated financial statements including related notes, and whether the consolidated
financial statements fairly present the transactions and accounting events on which they are based.
・ Obtain sufficient and appropriate audit evidence regarding the financial information of the Company andits consolidated subsidiaries in order to express an opinion on the consolidated financial statements. The
auditor is responsible for instructing, supervising, and implementing the audit of the consolidated financial
statements, and is solely responsible for the audit opinion.
The auditor reports to the Audit Committee regarding the scope and timing of implementation of theplanned audit, material audit findings including material weaknesses in internal control identified in thecourse of the audit, and other matters required under the auditing standards.
The auditor shall report to the Audit Committee that the auditor has complied with the rules on professional
ethics in Japan regarding independence. They shall also report matters that could reasonably affect their
independence. Furthermore, if any measures have been taken to remove disincentive or to implement
safeguards to reduce the disincentive to an acceptable level, the auditor shall provide a detailed report on
those measures.

Interest
Our firm and engagement partners have no interests in the Company or its consolidated subsidiaries
requiring disclosure under the provisions of the Certified Public Accountants Act of Japan.

The above represents a translation, for convenience only, of the original report issued in the Japanese
language.

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

Independent Auditors’ Report(English Translation)
May 8, 2024
To the Board of Directors
Denka Co., Ltd.
Ernst & Young ShinNihon LLC
Tokyo office
Takao Maruyama
Certified Public Accountant
Designated and Engagement Partner
Yasuyuki Kitamura
Certified Public Accountant
Designated and Engagement Partner
Yuki Nakano
Certified Public Accountant
Designated and Engagement Partner

OpinionPursuant to Article 436, Paragraph 2, Item 1 of the Companies Act, we have audited the accompanying
financial statements, which comprise the balance sheet, the statement of income, the statement of changes in
net assets and the related notes, and the accompanying supplementary schedules of Denka Co., Ltd. (the“Company”) for the 165th fiscal year from April 1, 2023 through March 31, 2024.
In our opinion, the financial statements and the accompanying supplementary schedules referred to above
present fairly, in all material respects, the financial position of the Company as of March 31, 2024, and theresults of its operations for the year then ended in conformity with accounting principles generally accepted inJapan.

Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibility under the auditing standards is stated in “Auditor’s Responsibility for the Audit of the Financial
Statements and the Accompanying Supplementary Schedules.” We are independent of the Company inaccordance with the provisions related to professional ethics in Japan, and are fulfilling other ethicalresponsibilities as an auditor. We believe that we have obtained sufficient and appropriate audit evidence toprovide a basis for our audit opinion.
Other Information
Other information refers to the business report and accompanying supplementary schedules. Management is
responsible for the preparation and disclosure of other information. The Audit Committee are responsible formonitoring the execution of Directors’ duties related to designing and operating the reporting process for otherinformation.
Other information is not included in the scope of our opinion on the financial statements and accompanying
supplementary schedules, and we express no opinion on it.
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Our responsibility with respect to the audit of the financial statements and accompanying supplementaryschedules is to read through other information and, in this process, to consider whether any material
differences exist between other information and the financial statements and accompanying supplementaryschedules, or knowledge we have gained through the auditing process; also, to remain alert for any otherindications of material error in other information.
We are required to report any matter that we consider constitutes a material error in other information,
based on the work we have undertaken.
We have nothing to report regarding other information.
Responsibilities of Management and the Audit Committee for the Financial Statements and the Accompanying
Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial statements and theaccompanying supplementary schedules in accordance with accounting principles generally accepted in Japan,
and for designing and operating such internal control as management determines is necessary to enable thepreparation and fair presentation of the financial statements and the accompanying supplementary schedules
that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements and the accompanying supplementary schedules, management is
responsible for assessing whether it is appropriate to prepare the financial statements and the accompanying
supplementary schedules in accordance with the premise of a going concern, and for disclosing mattersrelating to going concern when it is required to do so in accordance with accounting principles generally
accepted in Japan.
The Audit Committee are responsible for monitoring the execution of Directors’ duties related to designingand operating the financial reporting process.
Auditor’s Responsibility for the Audit of the Financial Statements and the Accompanying Supplementary
Schedules
Our responsibility is to obtain reasonable assurance about whether the financial statements and theaccompanying supplementary schedules as a whole are free from material misstatement, whether due to fraud
or error, and to express an opinion on the financial statements and the accompanying supplementary schedules
from an independent standpoint in an audit report, based on our audit. Misstatements can occur as a result offraud or error, and are deemed material if they can be reasonably expected to, either individually orcollectively, influence the decisions of users taken on the basis of the financial statements and theaccompanying supplementary schedules.
We make professional judgment in the audit process in accordance with auditing standards generally
accepted in Japan, and perform the following while maintaining professional skepticism.
・ Identify and assess the risks of material misstatement, whether due to fraud or error. Design andimplement audit procedures to address the risks of material misstatement. The audit procedures shall beselected and applied as determined by the auditor. In addition, sufficient and appropriate audit evidence
shall be obtained to provide a basis for the audit opinion.
・ In making those risk assessments, the auditor considers internal control relevant to the entity’s audit inorder to design audit procedures that are appropriate in the circumstances, although the purpose of theaudit of the financial statements and the accompanying supplementary schedules is not to express an
opinion on the effectiveness of the entity’s internal control.
・ Assess the appropriateness of accounting policies adopted by management and the method of theirapplication, as well as the reasonableness of accounting estimates made by management and the adequacyof related notes.
・ Determine whether it is appropriate for management to prepare the financial statements and theaccompanying supplementary schedules on the premise of a going concern and, based on the audit
evidence obtained, determine whether there is a significant uncertainty in regard to events or conditions
that may cast significant doubt on the entity’s ability to continue as a going concern. If there is a significant
uncertainty concerning the premise of a going concern, the auditor is required to call attention to the notes
to the financial statements and the accompanying supplementary schedules in the audit report, or if the54notes to the financial statements and the accompanying supplementary schedules pertaining to thesignificant uncertainty are inappropriate, issue a modified opinion on the financial statements and theaccompanying supplementary schedules. While the conclusions of the auditor are based on the audit
evidence obtained up to the date of the audit report, depending on future events or conditions, an entity
may be unable to continue as a going concern.
・ Besides assessing whether the presentation of and notes to the financial statements and the accompanying
supplementary schedules are in accordance with accounting principles generally accepted in Japan, assess
the presentation, structure, and content of the financial statements and the accompanying supplementaryschedules including related notes, and whether the financial statements and the accompanying
supplementary schedules fairly present the transactions and accounting events on which they are based.
The auditor reports to the Audit Committee regarding the scope and timing of implementation of theplanned audit, material audit findings including material weaknesses in internal control identified in thecourse of the audit, and other matters required under the auditing standards.
・ Obtain sufficient and appropriate audit evidence regarding the financial information of the components
included in the financial statements and the accompanying supplementary schedules in order to express an
opinion on the financial statements and the accompanying supplementary schedules. The auditor is
responsible for instructing, supervising, and implementing the audit of the financial information of thecomponents, and is solely responsible for the audit opinion.
The auditor reports to the Audit Committee regarding the scope and timing of implementation of theplanned audit, material audit findings including material weaknesses in internal control identified in thecourse of the audit, and other matters required under the auditing standards. The auditor shall report to the
Audit Committee that the auditor has complied with the rules on professional ethics in Japan regarding
independence. They shall also report matters that could reasonably affect their independence. Furthermore,
if any measures have been taken to remove disincentive or to implement safeguards to reduce thedisincentive to an acceptable level, the auditor shall provide a detailed report on those measures.
Conflicts of Interest
Our firm and engagement partners have no interests in the Company requiring disclosure under theprovisions of the Certified Public Accountants Act of Japan.

The above represents a translation, for convenience only, of the original report issued in the Japanese
language.

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Transcript of the Audit Report by the Audit Committee

Audit Report(English Translation)
The Audit Committee has audited the Directors’ performance of their duties during the 165th term from
April 1, 2023 to March 31, 2024 and hereby reports the method and results thereof as follows:
1. Auditing Method and Details Thereof
The Audit Committee received regular reports from Directors, employees, etc. on the details of
resolutions of the Board of Directors related to matters listed in Article 399-13, Paragraph 1, item (i), (b) and(c) of the Companies Act and the creation and operational status of systems developed pursuant to such
resolutions (internal control systems), requested explanations as necessary, and expressed its views, inaddition to conducting audits via the methods below.
1) Audit Committee Members conformed with the Audit Committee Audit Standards set forth by the
Audit Committee and, in accordance with audit policies, the assignment of duties, etc., worked with theInternal Control Department and other internal control departments to attend meetings of important
committees, receive reports on matters related to the execution of duties from Directors, employees,
etc., requested explanations as necessary, reviewed important approval documents, etc., andinvestigated the status of operations and assets at head office and important business sites. In addition,with regard to subsidiaries, Audit Committee Members took steps to communicate and exchange
information with the Directors, Audit & Supervisory Board Members, etc. of subsidiaries, and received
business reports from subsidiaries as necessary.
2) With respect to the basic policy set forth in Article 118, Item 3 (i) of the Ordinance for Enforcement of
the Companies Act and the measures set forth in Item 3 (ii) of the said article, which are described in
the Business Report, the Audit Committee examined the content based on the status of deliberations at
meetings of the Board of Directors and other meetings.
3) The Audit Committee monitored and verified whether the Accounting Auditor maintained its
independence and implemented appropriate audits, received reports from the Accounting Auditor
regarding the status of the performance of its duties, and requested explanations as necessary. In
addition, the Audit Committee received notice from the Accounting Auditor that the “system forensuring that duties are performed properly” (matters set forth in each item of Article 131 of theOrdinance for Corporate Accounting) had been prepared in accordance with the “Quality Control
Standards Relating to Auditing” (issued by the Business Accounting Council) and other relevant
standards, and requested explanations as necessary.
Based on the above method, the Audit Committee reviewed the non-consolidated financial statements(non-consolidated balance sheet, non-consolidated statement of income, non-consolidated statement ofchanges in net assets, and notes to non-consolidated financial statements) and the accompanying
supplementary schedules, as well as the consolidated financial statements (consolidated balance sheet,consolidated statement of income, consolidated statement of changes in net assets, and notes to consolidated
financial statements), and the business report and its accompanying supplementary schedules for the fiscal
year in question.
2. Results of Audit(1) Results of Audit of Business Report, etc., and Other Relevant Documents
1) In our opinion, the Business Report and the accompanying supplementary schedules present fairly
the conditions of the Company in conformity with the applicable laws and regulations and the
Articles of Incorporation of the Company.
2) We have found no instances of misconduct or material violation of the applicable laws andregulations or the Articles of Incorporation with respect to performance of duties by the Directors.
3) In our opinion, the contents of the resolutions of the Board of Directors related to the internal
control systems are fair and reasonable. In addition, we have found no matters requiring special
mention regarding the description in the Business Report and the performance of duties by the
Directors related to such internal control systems.
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As described in the Issues to be addressed, we have identified improprieties related to certain
products of the Company and our group company, and on June 14 2023, a fatal accident occurred at
the Omi Plant. The Audit Committee will persist in closely monitoring the consistent
implementation of rigorous measures to prevent recurrence, emphasizing a management stance thatprioritizes compliance and fosters a culture of safety.
4) We have found no matters requiring special mention with respect to the basic policies andinitiatives regarding the determination of policies on control of the finances and business of theCompany described in the Business Report.
(2) Results of Audit of Non-consolidated Financial Statements and the Accompanying Supplementary
Schedules
In our opinion, the method and the results of the audit performed by Ernst & Young ShinNihon
LLC are fair and reasonable.
(3) Results of Audit of Consolidated Financial Statements
In our opinion, the method and the results of the audit performed by Ernst & Young ShinNihon
LLC are fair and reasonable.
May 8, 2024
Audit Committee, Denka Co., Ltd.
Audit Committee Member
Audit Committee Member
Audit Committee Member
Audit Committee Member(Note)

Mizuhiro UchidaToshio Kinoshita
Akio Yamamoto
Miyuki Matoba

Audit Committee Members Toshio Kinoshita, Akio Yamamoto, and Miyuki Matoba are
Outside Directors as stipulated in Article 2, Item 15 and Article 331, Section 6 of theCompanies Act.

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