DIC : Items Not Included in Documents Delivered Concerning the Notice of Convocation of the 126th Annual General Meeting of Shareholders［742KB］

ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT

This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence.

To our shareholders:

Items Not Included in Documents Delivered Concerning the Notice of Convocation of the 126th Annual General Meeting of Shareholders

Summary of Resolutions Regarding, and the Operational Status of, Systems for Ensuring That the Performance of Duties by Directors Complies with Laws, Regulations and the Company's Articles of Incorporation and Other Systems for Ensuring the Appropriateness of Other Operations

(Basic Policy Regarding, and Operational Status of, Systems for Ensuring the

Appropriate Execution of Business)

Consolidated Statement of Changes in Net Assets

Notes to Consolidated Financial Statements

<> Financial Statements>

Non-Consolidated Statement of Changes in Net Assets

Notes to Non-Consolidated Financial Statements

The items listed above are posted on each website on the Internet, which are described on page 3 of "Notice of Convocation" pursuant to the applicable laws and regulations and Article 15, Paragraph 2 of the Articles of Incorporation of the Company.

DIC Corporation

ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT

This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence.

Summary of Resolutions Regarding, and the Operational Status of, Systems for Ensuring That the Performance of Duties by Directors Complies with Laws, Regulations and the Company's Articles of Incorporation and Other

Systems for Ensuring the Appropriateness of Other Operations

(Basic Policy Regarding, and Operational Status of, Systems for Ensuring the

Appropriate Execution of Business)

The following is a summary of resolutions of the Board of Directors regarding, and the operational status of, the aforementioned systems.

Ⅰ. Basic Concepts Regarding Internal Controls

In striving to conduct its operations in accordance with The DIC Way, the DIC Group has prepared and operates a system of internal controls based on the Companies Act of Japan to ensure the appropriateness of its operations.

Note: The DIC Way was formulated to represent the DIC Group's fundamental management philosophy and includes the Group's mission: "We create enhanced value and utilize innovation to introduce socially responsible and sustainable products."

Ⅱ. DIC Group's System of Internal Controls

• Systems for Ensuring that the Performance of Duties by Directors and Employees of the DIC Group Complies with Laws, Regulations and the Company's Articles of Incorporation

1. The Company shall prepare regulations for meetings of the Board of Directors and regulations for Ringi (approval by written circular) and shall clarify decision-making authority within the DIC Group.
2. The Company shall appoint Outside Directors and shall work to bolster monitoring functions with regard to management.
3. The Company shall work to set forth the DIC Group Code of Business Conduct as the standard regarding compliance, which Directors and employees of the DIC Group should comply with, and to disseminate it.
4. The Company shall establish an internal auditing department and shall monitor the status of the implementation and operation of internal control systems of the DIC Group on a periodic basis. Important matters that are discovered through such monitoring and the status of improvements shall be reported to Representative Directors on a periodic basis, and those matters of particular importance are to be reported to the Board of Directors.
5. The Company shall, as a part of its compliance activities, establish an internal notification system as a channel available for the employees of the DIC Group and set up multiple notification channels independent from channels for communication used in the execution of business, thereby creating a structure that can quickly respond to domestic and international notifications. In addition, a system shall be put into place so that any person making a notification will not suffer any detriment.
6. The Company shall sever any and all connections with antisocial elements and shall collaborate with legal counsel and the police, among others, in making firm responses to unwarranted demands, etc., made on the DIC Group by such antisocial elements.

【Operational Status】

The Company has clarified decision-making authority within the DIC Group via the Articles of Incorporation, regulations for meetings of the Board of Directors, regulations for Ringi and regulations for authorization, etc., in order to ensure the performance of duties and enhancement of supervisory functions, all of which it reviews on an ongoing basis.

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ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT

This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence.

The Company has nominated three individuals to serve as Independent Outside Directors, and the ratio of Independent Outside Directors to the total number of Directors has been one-third or more.

In the fiscal year 2023, e-learning programs on the DIC Group Code of Business Conduct, quality compliance, and the prevention of discrimination and harassment were conducted for DIC Group companies.

The Company's internal audit function monitored the status of implementation and operation of the internal controls system and reported to the Representative Directors regarding matters discovered through this process, as well as on the status of improvements. The decision was made to also report audit results directly to the Board of Directors and the basic policy on internal control and internal audit regulations were revised accordingly.

The Company handled internal claims appropriately by conducting investigations and interviews.

• Systems for Ensuring That Duties of Directors of the Group Are Performed Efficiently

1. In order to ensure the duties of Directors are performed properly and efficiently within the DIC Group, the Company shall establish regulations regarding company organization and authority.
2. In order to expedite the conduct of business and clarify responsibilities, the Company shall introduce an Executive Officer system. In addition to resolving important business affairs of the DIC Group in accordance with the Articles of Incorporation and regulations for the Board of Directors, the Board of Directors shall also supervise the status of Executive Officers' business conduct.
3. The Company shall formulate management plans and annual budgets based on management policies and management strategies of the DIC Group and, through dissemination of the same, ensure common goals are shared within the DIC Group. The Company shall make progress reports to the Board of Directors.

【Operational Status】

The Company made decisions regarding the performance of important duties in accordance with the regulations for the Board of Directors, regulations for Ringi and other regulations.

The executive officer system facilitated efficient decision making, while the Board of Directors supervised the executive officers' performance of their duties through the preparation of performance reports.

Based on decision-making authority, the Company sought to ensure the appropriate and efficient execution of duties.

To establish a more global management configuration, a key strategy for business portfolio transformation outlined in the DIC Vision 2030 long-term management plan, the Company has established the Executive Committee, members of which include individuals responsible for overseas regional headquarters, as a forum for sharing information across the global DIC Group on important matters with the potential to significantly impact the Group's management.

Regarding the annual budget, steps are taken to enhance awareness, including holding in-house briefings, posting related information on the Company's internal portal site and providing monthly progress reports to the Board of Directors.

The WSR 2020 Committee, which is charged with working to boost employee job satisfaction and productivity, identified issues and needed improvements in the ways employees currently work and promoted recurring discussions regarding the Group's vision of itself going forward and the direction of measures.

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ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT

This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence.

• Systems for the Preservation and Management of Information Pertaining to the Performance of Duties by Directors

1. Information pertaining to the performance of duties by Directors, such as the minutes of meetings of the Board of Directors and Ringi documents, shall be recorded, retained and managed appropriately based on the regulations for document management.
2. The Company shall establish regulations for systems of information management and shall prepare a system for preventing leakage of confidential information of the DIC Group.

【Operational Status】

Information related to the performance of duties by Directors is documented in a printed or electronic form and, together with related materials used in management decision making, retained for the period of time stipulated in the regulations for document management. With the implementation of information security measures, such information is managed rigorously in accordance with confidential information management guidelines.

Information on the performance of duties by Directors is retained in a manner that ensures it can be made available promptly for review if a request is received from a Director, Audit & Supervisory Board Member or other pertinent individual.

• Regulations and Other Systems Relating to the Management of Risk of Loss to the DIC Group

1. The Company shall formulate a risk management policy and shall identify, assess, prioritize and address any risks that may have a significant impact on management of the DIC Group.
2. The Company shall establish a risk management system for the DIC Group and shall ensure its effectiveness by repeating the plan-do-check-act (PDCA) cycle.

【Operational Status】

The DIC Group has identified material issues, that is, issues with the potential to significantly affect on its performance over the medium to long term. Steps taken to address these issues, continue to underpin the Group's efforts to grow its businesses, guided by the DIC Vision 2030 long-term management plan. In addition, based on its risk management policy, the Risk Management Working Group, which was created in fiscal year 2023 as a subordinate entity of the Sustainability Committee, identifies risks with the potential to significantly affect the Group's performance over the medium to long term in line with the growth scenario set forth in the DIC Vision 2030 long-term management plan, as well as formulates and implements measures to minimize the impact of latent risks on the DIC Group's business should such risks manifest. Such measures are reviewed regularly to ensure that their implementation is proceeding as planned.

As part of its business continuity management (BCM) program, the Company implemented its annual revision of individual product division business continuity plans (BCPs). Based on these plans, BCP Task Force-led training was conducted that addressed all aspects of BCM in the event of a disaster, including both initial responses and measures to ensure business continuity.

• Other Systems for Ensuring Proper Operations of the DIC Group

1. The Company shall determine an administrative department for each subsidiary from the standpoints of business execution and management and shall supervise business affairs by dispatching a director to each subsidiary.
2. The Company shall clarify important matters, including those pertaining to subsidiaries, that must be approved by or reported to the Company.

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ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT

This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence.

【Operational Status】

In addition to dispatching a director to each subsidiary, the Company receives regular reports from subsidiaries on business plans and operating conditions, while corporate headquarters' administrative departments and other related departments collaborate to supervise subsidiaries under their jurisdiction.

The Company has established regulations regarding authority within the DIC Group pertaining to matters that must be approved by or reported to the Company.

The Company has formulated Group company management regulations and clarified its management support structure for Group companies.

• Systems for Ensuring that Audits by Audit & Supervisory Board Members are Conducted Effectively

1. In addition to attending meetings of the Board of Directors and other important meetings, Audit & Supervisory Board Members may inspect the contents of Ringi approvals at any time.
2. In addition to meeting with Representative Directors on a periodic basis to exchange information and opinions, Audit
3. • Supervisory Board Members shall strive to foster close cooperation by holding liaison meetings on a periodic basis with the internal auditing department, the Accounting Auditor and the Audit & Supervisory Board Members of subsidiaries.
4. Directors and employees of the DIC Group shall report facts that could cause substantial damage to the Company and matters designated by the Audit & Supervisory Board as "Matters to be Reported to Audit & Supervisory Board Members or the Audit & Supervisory Board" to Audit & Supervisory Board Members or the Audit & Supervisory Board.
5. The DIC Group shall not treat persons who report to Audit & Supervisory Board Members unfavorably because they have made a report.
6. The Company shall establish an Audit & Supervisory Board Members' Office and shall assign dedicated personnel to assist Audit & Supervisory Board Members in their duties. Such personnel shall obey only the directions and orders of the Audit & Supervisory Board Members. Evaluations shall be conducted by Audit & Supervisory Board Members and matters such as personnel changes and disciplinary actions will require the prior consent of Audit & Supervisory Board Members.
7. The Company shall pay the costs and fees that Audit & Supervisory Board Members need to perform their duties.

【Operational Status】

Audit & Supervisory Board Members attend important meetings, including those of the Board of Directors and the Executive Committee, and review the contents of Ringi approvals as necessary.

Audit & Supervisory Board Members hold liaison meetings on a periodic basis with Representative Directors, the internal auditing department and the Accounting Auditor to exchange opinions.

Directors and employees promptly report on matters designated by the Audit & Supervisory Board, as well as on other important matters.

Audit & Supervisory Board Members meet on a periodic basis with the Audit & Supervisory Board Members of subsidiaries. Audit & Supervisory Board Members attend meetings of the Board of Directors of overseas regional headquarters. Taking into account materiality and risk, in fiscal year 2023 Audit & Supervisory Board Members conducted on-site audits (at certain sites, these audits were conducted on a remote basis).

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ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT

This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence.

Reference Corporate Governance

• Basic Approach to Corporate Governance

The DIC Group defines corporate governance as a mechanism to ensure effective decision making pertaining to its management policy of achieving sustainable corporate growth and expansion through sound and efficient management, while at the same time guaranteeing the appropriate monitoring and assessment of and motivation for management's execution of business activities. With the aim of achieving a higher level of trust with our shareholders, customers and other stakeholders and enhancing corporate value, the DIC Group also promotes ongoing measures to reinforce its management system and ensure effective monitoring thereof.

The Company has prepared and disclosed a Policy on Corporate Governance to explain its basic approach to corporate governance.

For more information of the Policy on Corporate Governance, please refer to the Company's website:

https://www.dic-global.com/pdf/ir/management/governance/governance_en.pdf

• Outline of the Company's Corporate Governance

As a company with Audit & Supervisory Board Members, the Company has a Board of Directors and an Audit & Supervisory Board. It has also instituted an executive officer system, a move aimed at separating decision making and implementation and thereby accelerating business execution and clarifying responsibilities. The Company has also established a Nomination Committee, Remuneration Committee, Executive Committee, Sustainability Committee, Quality Committee and WSR 2020 Committee.

1. Board of Directors
   From the perspective of making business decisions in a timely manner and reinforcing corporate governance, the

Board of Directors consists of nine Directors, three of whom are Outside Directors (one of whom is female). The Board of Directors typically meets once a month to make decisions on matters delegated to it under the Companies Act and on important business matters stated in the regulations for meetings of the Board of Directors, as well as to receive status reports on the execution of business operations and supervise the execution of the business.

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ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT

This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence.

1. Nomination Committee
   To ensure objectivity in the nomination of Directors, Audit & Supervisory Board Members and Executive Officers,

among others, the Company has established a Nomination Committee, which provides recommendations to the Board of Directors regarding the appointment and dismissal of Directors, Audit & Supervisory Board Members and Executive Officers. The Nomination Committee consists of five Directors, three of whom are Independent Outside Directors, with an Independent Outside Director serving as Chairman.

1. Remuneration Committee
   To ensure objectivity in the determination of remuneration for Directors and Executive Officers, the Company has

established a Remuneration Committee, which has been entrusted with responsibility for determining remuneration, among others, for Directors and Executive Officers. The Remuneration Committee consists of five Directors, three of whom are Independent Outside Directors, with an Independent Outside Director serving as Chairman.

1. Executive Committee
   Established as a body to advise on important matters related to the execution of business, the Executive Committee

meets twice monthly in principle. The Executive Committee consists of Executive Officers and others appointed by the Board of Directors. As part of the auditing process, one Audit & Supervisory Board Member also attends Executive Committee meetings. Details of deliberations at meetings and the results thereof are reported to the Board of Directors.

5) Sustainability Committee

The Sustainability Committee, which functions as an advisory body, meets several times annually to formulate sustainability policies and activity plans, as well as to evaluate and promote sustainability initiatives. The Sustainability Committee consists of Executive Officers and others designated by the Board of Directors. As part of the auditing process, one Audit & Supervisory Board Member also attends Sustainability Committee meetings. Details of deliberations at meetings and the results thereof are reported to the Board of Directors.

1. Quality Committee
   In addition to reporting on the status and progress of quality management, the Quality Committee functions as a

deliberative body for the DIC Group's quality policies, principal initiatives and important issues. In principle, the Quality Committee meets once quarterly. The Quality Committee consists of Executive Officers and others designated by the Board of Directors. As part of the auditing process, one Audit & Supervisory Board Member also attends Quality Committee meetings. Details of deliberations at meetings and the results thereof are reported to the Board of Directors.

7) WSR 2020 Committee

The Work Style Revolution (WSR) 2020 Committee was established to deliberate work style reform-related measures and investment plans, among others, with the aim of enhancing Group employee job satisfaction and productivity. In principle, the WSR 2020 Committee meets once quarterly. The WSR 2020 Committee consists of Executive Officers and others designated by the Board of Directors. Details of important deliberations at meetings and the results thereof are reported to the Board of Directors.

8) Audit & Supervisory Board

The Audit & Supervisory Board comprises four members, including two Outside Members (one of whom is female). In principle, the Audit & Supervisory Board meets once monthly. Board activities include debating and determining auditing policies and auditing plans. Members also report on the results of audits conducted, as well as attend important meetings, including those of the Board of Directors, the Executive Committee and the Sustainability Committee, meet with Representative Directors on a periodic basis to exchange information and opinions, and collect business reports from Directors, Executive Officers and employees. In addition, the Company has established an Audit & Supervisory Board Members' Office, to which it assigns dedicated personnel to assist the Audit & Supervisory Board Members in their duties.

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ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT

This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence.

Consolidated Statement of Changes in Net Assets

(Millions of yen)

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ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT

This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence.

Notes to Consolidated Financial Statements

Ⅰ. Notes to Significant Accounting Policies

2. Scope of Equity Method

Number of companies accounted for by the equity method 18 (TAIYO HOLDINGS CO. LTD. and others)

Change in scope of equity method

Increase: None

Decrease: 2 companies Techno Science, Inc. and others (sale of shares, etc.)

1. Accounting Period of Consolidated Subsidiaries
   The closing date of the consolidated subsidiaries is the same as the consolidated closing date.
2. Accounting Policies

1. Methods and Standards for Valuation of Significant Assets

1. Securities Other securities
   Securities with a readily determinable market value:
   Stated at fair market value (with any unrealized gains or losses being reported directly as a component of shareholder's equity and the cost of any securities sold being computed by the moving-average method).

Securities with no readily determinable market value:

Stated at cost, with cost being determined by the moving-average method.

1. Derivatives
   Derivatives are carried at fair value.
2. Inventories
   Inventories are principally stated at cost, determined by the first-in,first-out method, which evaluates the amount of the inventories shown in the consolidated balance sheet by writing them down based on their decrease in profitability.

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ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT

This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence.

1. Method for Depreciation of Non-Current Assets

1. Property, plant and equipment (excluding leased assets)
   DIC Corporation (the "Company") and its consolidated domestic subsidiaries:
   Depreciation of buildings (other than facilities attached to buildings) is calculated principally by the straight- line method. Depreciation of other property, plant and equipment is calculated by the declining-balance method. However, depreciation of facilities attached to buildings and structures acquired on or after April 1, 2016, is also calculated by the straight-line method.
   Consolidated foreign subsidiaries:
   Depreciation of property, plant and equipment is calculated principally by the straight-line method.

1. Intangible assets (excluding leased assets)
   Intangible assets are amortized by the straight-line method.
2. Leased assets
   Leased assets related to finance leases that do not transfer ownership of the leased property to the lessee are depreciated on a straight-line basis, with the lease periods used as their useful lives and no residual value.
3. Right-of-useassets
   Right-of-use assets are depreciated using the straight-line method with a useful life determined from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term and no residual value.

1. Standards for Provisions

1. Allowance for doubtful accounts
   Allowance for doubtful accounts is provided mainly based on historical experience for normal receivables and on an estimate of collectability of receivables from companies in financial difficulty.
2. Provision for bonuses
   Provision for bonuses is provided based on the estimated payments of bonuses to employees and executive officers by the Company and its consolidated domestic subsidiaries.

1. Retirement and Pension Plans
   Net defined benefit asset/liability is recognized for employees' and executive officers' retirement benefits. Pension assets are deducted from retirement benefit obligations, and the net amount is recognized based on the estimated amount of payment as of the balance sheet date. In calculating retirement benefit obligations, the Company and its consolidated subsidiaries (the "Group") apply a method of attributing expected retirement benefits to each period on a benefit formula basis.

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