May 30, 2023

Notice of Convocation
The 157th Ordinary General Meeting of Shareholders

TEIJIN LIMITED

Disclaimer: Please note that the following is a translation of the original Japanese documents prepared for the convenienceof our non-Japanese shareholders with voting rights. Although this translation is intended to be complete and accurate, theJapanese original shall take precedence in the case of any discrepancies between this translation and the original. Certain
information regarding voting procedures that is not applicable for shareholders resident outside Japan has been omitted or
modified as applicable. In addition, these materials will not facilitate your status as a registered shareholder authorized toattend the Ordinary General Meeting of Shareholders. Every shareholder attending the Ordinary General Meeting of
Shareholders is required to present the Voting Card to the receptionist at the meeting.

Contents

Message from Representative Director of the Board President and CEO
Notice of Convocation of the 157th Ordinary General Meeting of Shareholders
Reference Documents for the General Meeting of Shareholders
Proposals and Reference
Proposal 1: Election of Eight (8) Directors
Proposal 2: Election of Two (2) Statutory Auditors
Attached Reports
Reports on Operations for the 157th Fiscal Year
1. Matters concerning the current status of the Teijin Group (corporate group)(1) Progress and results of business activities(2) Changes in Assets and Profit and Loss
(3) Capital investment(4) Financing(5) Management Policy and Tasks Ahead(6) Principal business(7) Principal business locations, etc.
(8) Employees(9) Significant Subsidiaries(10) Primary Lenders and Amount of Borrowings
2. Matters Regarding the Shares of the Company
3. Matters Regarding Stock Acquisition Rights of the Company
4. Corporate Governance System
5. Matters Regarding Directors and Statutory Auditors
6. Matters Concerning the Accounting Auditors
7. Policy Regarding the Determination of Dividends from Retained Earnings
8. Summary of a System to Secure Proper Operations and the Status of Use of Said System
9. Basic Policy on Corporate Control
10. Financial Statement(1) Consolidated Balance Sheets(2) Consolidated Statements of Income(3) Consolidated Statements of Changes in Net Assets
Consolidated Statements of Comprehensive Income (Reference)
Consolidated Statements of Cash Flows (Reference)1

To Our Shareholders
First of all, I would like to extend my heartfelt gratitude to you as shareholders and investors for your continued
understanding and support of the Teijin Group's business activities.
Toward the fulfillment of its long-term vision, “To Be a Company that Supports the Society of the Future”, the Teijin Grouphas been implementing various initiatives to create growth platforms during the three years targeted under its medium-term
management plan 2020-2022, including proactively allocating resources to priority areas and strengthening the managementbase to drive innovation. However, we experienced a sharp downturn in our profitability as a result of the severe impact,primarily on our Materials Business Field, of drastic changes in the external environment brought about by COVID-19 andthe situation with Ukraine, as well as other causes including low production performance of factory facilities and a factoryfire. In the Healthcare Business Field, with an eye toward launching the kind of community-based integrated healthcare
services that will be needed in the super-aging society, we continued to strengthen our business foundation for supporting
patients, families, and communities in the home healthcare business, which already has one of the highest market shares in
the industry in Japan. Despite this, we have failed to adequately release new products and services able to contribute tofuture earnings, and so have fallen short of achieving our profitability target.
In light of such circumstances, we conducted a fact-based verification of the achievements made and issues faced andreconfirmed the current situation and our future heading. Consequently, we concluded that a fundamental reform wasneeded to solidify our platform, which prompted us to formulate “The Teijin Group Reforms for Profitability Improvement”
announced in February 2023. Specifically, we will be implementing measures to improve the profitability of ourComposites Business, Aramid Business, and Healthcare Business, designating them as underperforming businesses. In
addition, in an effort to resiliently address changes in the external environment, we will also work on reforming ourmanagement structure of corporate officers and headquarters staff with the aim of expediting management decisions andexecution. Based on the outcomes of this reform, we will announce our new medium-term management plan in FY2024,
which will reflect the restructuring of the business portfolio and growth strategies.
The Teijin Group is one of the few companies that is making dedicated efforts to take care of both people’s mental andphysical health and the health of the planet on which they live. I believe that our Group’s strength and purpose lie insquarely tackling the issues and concerns of customers, patients, and society at large and forming genuine connections withthem. To keep reinforcing such strength, we will aim at embodying our long-term vision, “To Be a Company that Supports
the Society of the Future”, by becoming a “company that protects the global environment” and a “company that addresses
issues of patients, families, and communities in need of more support”.
The Teijin Group has marked the 105th anniversary of its founding. In the course of our history, we have continued toachieve growth by overcoming numerous difficulties and crises, anticipating the needs of society, pivoting to enter new
businesses, and taking on new challenges. Faced with the current predicament, I intend to revisit our origins and theconviction, passion, and pioneering spirit with which our founders launched their business, and to convert this crisis into alaunchpad for transformation and growth. To put ourselves back on a growth trajectory, we will seek to implement reform inthis year through concerted Group-wide efforts.
We look forward to the continued understanding and support of our shareholders.
May 30, 2023
Akimoto Uchikawa
Representative Director of the Board
President and CEO
Teijin Limited
2

Securities code: 3401
May 30, 2023
Dear Shareholders
Akimoto Uchikawa
Representative Director of the Board
President and CEO
Teijin Limited
2-4, Nakanoshima 3-chome,
Kita-ku, Osaka-city,
Osaka 530-8605,
Japan

Notice of Convocation of
the 157th Ordinary General Meeting of Shareholders

You are cordially invited to attend the 157th Ordinary General Meeting of Shareholders of Teijin Limited(“the Company”) to be held as set forth below.
If you do not expect to attend the meeting, you may vote on the proposal for voting using the following method.
Please refer to the following “Reference Documents for the General Meeting of Shareholders,” and exercise yourvoting rights by 5 p.m., Tuesday, June 20, 2023. (Japan Time)[In case of voting by Mail] Please indicate your approval or disapproval of the proposal on the enclosed Document
for the Exercise of Voting Rights, and mail the document so that it arrives by the above deadline.
[In case of voting by Internet etc.] Please access to the web-site to exercising voting rights (https://evote.tr.mufg.jp/)
through personal Computer or Smartphone with the log-in ID and temporary password indicated in the enclosed
Document for the Exercise of Voting Rights, and input your approval or disapproval of the proposals according to
the instructions on the window.

3

Details

1. Date and Time of the Meeting:
Wednesday, June 21, 2023, at 10 a.m. (Japan Time)(The door will open at 9 a.m. (Japan Time))
2. Place:
The Westin Osaka, 2nd Floor Rose Room, 1-20, Oyodonaka 1-chome, Kita-ku, Osaka-city, Japan
3. Purposes
Reports
The Business Report, Consolidated Financial Statements and Non-Consolidated Financial Statements and theReport on the results of audit of Consolidated Financial Statements by the Accounting Auditor and the Board of
Statutory Auditors for the 157th Fiscal Year (April 1, 2022 to March 31, 2023)
Proposals
Proposal 1: Election of Eight (8) Directors
Proposal 2: Election of Two (2) Statutory Auditors
4. Decision on Convocation(1) If you do not indicate either approval or disapproval on the Document for the Exercise of Voting Rights, we shall treatsuch “no answer” as your “approval” on the proposal.
(2) In the event a shareholder exercises his or her voting rights several times via the Internet voting system, the final voting
rights exercised shall prevail.
(3) In the event of an overlap in the exercise of voting rights via the Document for the Exercise of Voting Rights and theInternet voting system, the exercise of voting rights via the Internet voting system shall prevail regardless of the arrival
date of the mailed vote.
(4) In the event of exercising voting rights by proxy, one (1) shareholder with voting rights authorized as your proxy can
attend the General Meeting of Shareholders. However, note that it will be necessary for the proxy to submit written
proof of power of attorney.
◎Should revisions arise concerning the content of the Notice of Convocation and/or matters pertaining to materials provided inelectronic format, the Company shall post the matters, both prior to and after revision, and the reason for revision, to theaforementioned Company website, the Tokyo Stock Exchange website and a website for materials concerning the General Meetingof Shareholders.

4Reference Documents for the General Meeting of Shareholders
Proposal 1: Election of Eight (8) Directors
The terms of office of ten (10) Directors will expire at the conclusion of this General Meeting of Shareholders.
Shareholders are therefore requested to elect the following eight (8) candidates as Directors (six (6) of whom are up for reelection).
The candidates for Director are as follows.
Candidateno.

Candidate
attributes(Gender)Name
Date of
Birth

Current position andresponsibility

1

Reappointment(Male)

AkimotoUchikawa
January 18,
1966

Representative Directorof the Board,
President & CEO (Chief
Executive Officer)

2

Reappointment(Male)

Eiji
Ogawa
October 26,
1962

13 times outof 13(100%)

3 years3

Reappointment(Male)

13 times outof 13(100%)

2 years

4

New Candidate(Male)

NaohikoMoriyama
May 20,1965
NoboruYamanishi
December
22, 1964――

5

Reappointment
OutsideIndependent(Male)
Reappointment
OutsideIndependent(Male)
Reappointment
OutsideIndependent(Male)New candidate
OutsideIndependent(Female)Representative Directorof the Board, Senior
Executive Officer
CFO (Chief Financial
Officer)
Responsible for theProcurement andLogistics Division
Member of the Board,
Senior Executive Officer
Chief Officer, Corporate
Strategy
Teijin group Executive
Officer
Chief Sustainability
Officer
Responsible for theEngineering Divisionand the Corporate Audit
Department
Outside Directors

13 times outof 13(100%)

5 years〇〇〇

Outside Directors

13 times outof 13(100%)

4 years〇〇〇

Outside Directors

10 times out
of 10(100%)

1 year

〇

〇

〇

―

―

6

7

8

YoichiSuzuki
September
25, 1950
MasaruOnishi
May 19,1955
Masaaki
Tsuya
June 22,
1952
Tamie
MinamiFebruary
15, 1959

Participation Tenure Advisory Nomination Compensationin Board of
Board
Advisory
Advisory
Directors in
Committee
Committee
FY202213 times out 2 years
〇
〇
〇
of 13
(100%)“Independent” indicates an independent director as stipulated by the Tokyo Stock Exchange Group, Inc.

5

A “○” indicates a nominee is a current member of the Advisory Board, Nomination Advisory Committee and/or Compensation Advisory
Committee in the table above.
Note 1: There are no special interests between each of the candidates and the Company.
Note 2: Regarding the " Directors and officers Liability Insurance Policy", please refer to “Directors and officers liability insurance
contract related to candidates for statutory auditor” described under Proposal 2.

Candidate
No.

Number of

Name

Personal History, Positions and Significant Concurrent Positions(Date of Birth)Companyʼs
Shares
Owned[Reappointment]

March 1990

Joined Teijin Limited

April 2017

Teijin Group Corporate Officer
Management Coordinator for the President, Material①

Akimoto Uchikawa

Business of Teijin Group(January 18, 1966)

Assistant to General Manager, Fibers and Products

24,757

Converting Business Group (for Technology,

shares(FY2022)[Participation in the

Production, Restructuring Initiatives).

Board of Directors] April 2020

General Manager, Composites Business Unit

13 times out of 13 April 2021

Teijin Group Executive Officer(100%)

President, Material Business of Teijin Group
June 2021

Executive Officer, Director, Teijin Limited

April 2022

President & Representative Director (Incumbent)
CEO (Chief Executive Officer) (Incumbent)[Reason for nomination of the candidate for Director and expected roles]
Akimoto Uchikawa was appointed as Teijin Group Corporate Officer in April 2017. He had been working expansion of the Material
Business Field as Deputy president for Material Business of Teijin Group and Assistant to General Manager, Fibers and Products
Converting Business Group (for Technology, Production, Restructuring Initiatives) and, from April 2020, as General Manager,
Composite Business Unit. He assumed the post of Teijin Group Executive Officer in April 2021. As President of Material Business,
Teijin Group, he further increased the profitability of the Material Business Field. He also promoted transformation of the businessportfolio, including growing and expanding core fields, which are the Strategic Focus themes. From April 2022, he assumed the post of
President & CEO (Chief Executive officer), Representative Director. He mainly tackled the modification of the management andorganizational structure in keeping with increased globalization, taking an improvement in profitability for further growth going forward.
He plans to fulfil his role as Chief Executive Officer in formulating and executing management policies to continuously enhance thecorporate value of the Teijin Group.
[Reappointment]

April 1985

Joined Teijin Limited

April 2016

Teijin Group Corporate Officer

Eiji Ogawa

General Manager, Resin and Plastic Processing Business Unit

(October 26, 1962) April 2019
(FY2022)②

Chief Officer, Corporate Strategy

June 2020

Corporate Officer, Director, Teijin Limited[Participation in the April 2021

Executive Officer, Director, Teijin Limited

Board of Directors] April 2022

President, Material Business of Teijin Group

13 times out of 13 April 2023

Senior Executive Officer, Representative Director of the Board,(100%)

Teijin Limited (Incumbent)
CFO (Chief Financial Officer),
6

15,718 shares

Responsible for the Procurement and Logistics Division(Incumbent)[Reason for nomination of the candidate for Director and expected roles]
Eiji Ogawa was appointed Teijin Group Corporate Officer in April 2016 and had been working to increase profits in theresin business as General Manager of the Resin and Plastic Processing Business Unit. He assumed the posts of Corporate
Strategy Chief Officer, Corporate Strategy in April 2019, Corporate Officer, Director in June 2020 and Executive Officer,
Director in April 2021. He has strived for the promotion of business portfolio transformation to establish growth
platforms. From April 2022, as President ,Material Business of Teijin Group, he undertook the responsibility to further expand profit
at the Materials Business Field and develop and promote core fields of the Strategic Focus theme, and also worked to provide
Environmental Value Solutions and Safety, Security and Disaster Mitigation Solutions. Prior to assuming the post of Teijin Group
Corporate Officer, he was mainly involved in finance and accounting-related operations for around 30 years. Given his experience, in
April 2023, he assumed the post of Senior Executive Officer, Representative Director of the Board, CFO (Chief Financial Officer),and became responsible for accounting and financial affairs along with the Procurement and Logistics Division. He aims to pour hisenergies into maintaining a sound financial base and improving corporate value.
[Reappointment]

Joined Teijin Limited

April 2017

Teijin Group Corporate Officer

Naohiko Moriyama

Management Coordinator for the President, Healthcare(May 20, 1965)

Business of Teijin Group

11,465General Manager, Healthcare New Business Division

shares(FY2022)③

March 1990

April 2019

[Participation in the April 2021

Teijin Group Executive Officer

Board of Directors]

President, Healthcare Business of the Teijin Group

13 times out of 13

General Manager, Healthcare New Business Division(100%)

June 2021

Executive Officer, Director, Teijin Limited

October 2022

Chief Officer, Corporate Strategy (Incumbent)

April 2023

Senior Executive Officer, Director, Teijin Limited(Incumbent)[Reason for nomination of the candidate for Director and expected roles]
Naohiko Moriyama was appointed as Teijin Group Corporate Officer in April 2017. From April 2019, as the General Manager,
Healthcare New Business Division, he has been working to expand the Healthcare Business Field. He assumed the post of TeijinGroup Executive Officer of the Teijin Group in April 2021. As the President of the Healthcare Business of the Teijin Group and General
Manager, Healthcare New Business Division, he has undertaken the expansion of profits at the Healthcare Business Field and tackled
the expansion of the healthcare new business division as promoted in the medium-term management plan. He was appointed as Chief
Corporate Strategy Officer of in October 2022, and Senior Executive Officer and Director in April 2023 and is pouring energies intocreating strategies to establish growth platforms and strengthen the management base platforms.
[New Candidate]④

April 1988

Joined Teijin Chemicals Ltd.

April 2017

Deputy General Manager, Material Technology Center

Noboru Yamanishi April 2019

Teijin Group Corporate Officer(December 22, 1964)

General Manager, Resin and Plastic Processing Business 8,488 shares
Unit
April 2023

Teijin Group Executive Officer (Incumbent)
Chief Sustainability Officer
Responsible for the Engineering Division and the
Corporate Audit Department (Incumbent)
7

[Reason for nomination of the candidate for Director and expected roles]
Noboru Yamanishi was appointed as Teijin Group Corporate Officer in April 2019. As the General Manager of the Resin and Plastic
Processing Business Unit, he undertook the strengthening and expansion of the Resin and Plastic Processing Business. From April 2023,
he was appointed as Teijin Group Executive Officer of the Teijin Group and Chief Sustainability Officer and assumed responsibility
for the Engineering Division and the Corporate Audit Department. He is engaged in activities to achieve sustainable management,compliance and risk management, ESH, social contribution activities and internal audits based on his insight and knowledge mainly
nurtured through business operations he has carried out thus far.
[Reappointment]

April 1975

Joined Ministry of Foreign Affairs of Japan (MOFA)[Outside]

June 1997

Deputy Permanent Representative of Japan to the World Trade[Independent]

Organization (WTO) in Geneva
April 2003

Deputy Assistant Minister (MOFA)

September 2005 Consul-General of Boston
Yoichi Suzuki

Dec. 2008

Director-General for Economic Affairs Bureau (MOFA)

August 2010

Ambassador to Singapore(September 25, 1950) August 2013⑤

(FY2022)

June 2016

Ambassador to France
Government Representative and Ambassador in charge of the[Participation in the

Kansai region

Board of Directors] March 2017

Government Representative and Ambassador in charge of

13 times out of 13

International Trade and Economics(100%)

3,200 shares

Chief Negotiator for the Japan-EU EPA
April 2018

MOFA retired

June 2018

Director, Teijin Limited (Incumbent)
Advisory Board member of Teijin Limited (Incumbent)(Significant Concurrent Positions)
Outside Director, KAJIMA CORPORATION[Reason for nomination of the candidate for Outside Director and roles expected]
Although Yoichi Suzuki does not have direct experience in company management, he has a wealth of knowledge and experience as a
diplomat including knowledge and experience in negotiations on international economics and trade issues. As the Director, he provides
appropriate advice on and points out business strategies from a global viewpoint in addition to our business strategy and governance.
Also, as the chairperson of the Nomination Advisory Committee, a consultative body, he sizably contributed when nominating
candidates for Directors and top executives. Furthermore, as a member of the Advisory Board and Compensation Advisory Committee,
he thoroughly fulfilled his duties including recommendation on important matters for management overall, and when conducting anevaluation of Directors, etc., including CEO, and when deliberating matters, including the revision of the compensation system for top
executives. The Company is once again selecting him as a candidate for Outside Director so that he can leverage rich knowledge andexperience he gained as a diplomat to supervise management from an objective standpoint through his position on the Board of
Directors, Advisory Board, Nomination Advisory Committee, and Compensation Advisory Committee.
Note 1: Yoichi Suzuki is a candidate for Outside Director. The Company requires the candidate for Outside Director to fulfill all therequirements for an Independent Director as stipulated by the Company. He fulfills all the prescribed requirements. He also fulfills therequirements set forth by the Tokyo Stock Exchange for Independent Director. In light of this, the Company has registered him as an
Independent Director with the Tokyo Stock Exchange. The contents of the requirements of “Independent Director” stipulatedby the Company can be viewed at the Company’s Web site:(https://www.teijin.com/ir/management/governance/requirements/)
Note 2: Yoichi Suzuki currently serves as a Director of the Company. In accordance with Article 427 of the Companies Act and the8Companyʼs Articles of Incorporation, the Company and Yoichi Suzuki entered into a limited liability agreement with him in which
the limit of liability is 20 million yen or the minimum amount of liability set forth in Article 425, Paragraph 1 of the Companies Act,
whichever is higher. When reappointment of Yoichi Suzuki as an Outside Director is approved, the Company will extend said
limited liability agreement with him.
Note 3: The date that Yoichi Suzuki was first appointed to Outside Director and the tenure of position commencing on the date offirst appointment and ending at the close of the General Meeting of Shareholders are as follows:
Date of First Appointment: June 20, 2018; Tenure of position: 5 years[Reappointment]

April 1978

Joined Japan Air Lines Co., Ltd.

[Outside]

April 2007

President JAL Aircraft Maintenance Narita[Independent]

April 2009

Executive officer, JAL International Co., Ltd

June 2009

President of Japan Air Commuter

February 2010

President Japan Air Lines Corporation (JAL group COO)
President Japan Air Lines International Co., Ltd.

November 2010 Director, President Japan Air Lines International Co., Ltd.
( Japan Air Lines Corporation merged with Japan Air Lines
Masaru Onishi(May 19, 1955)

International Co., Ltd.)March 2011

(FY2022)⑥

Representative Director and President Japan Air Lines
International Co., Ltd.

[Participation in the April 2011

Representative Director and President, Japan Airlines Co., Ltd.

Board of Directors](The company name was changed from Japan Air Lines

13 times out of 13

International Co., Ltd. to Japan Airlines Co., Ltd. in April 2011)(100%)

2,612 shares

February 2012

Representative Director and Chairperson, Japan Airlines Co.,Ltd.

April 2014

Director and Chairperson, Japan Airlines Co., Ltd.

July 2018

External Affairs Representative, Japan Airlines Co., Ltd.

June 2019

Director, Teijin Limited (Incumbent)
Advisory Board member of Teijin Limited (Incumbent)(Significant Concurrent Positions)
Outside Director, Mitsui O.S.K. Lines, Ltd.
Outside Director, Kadoya Sesame Mills Incorporated
Outside Director, Benesse Holdings, Inc.
Reason for nomination of the candidate for Outside Director and Roles expected
Masaru Onishi had served as Representative Director and President, and Representative Director and Chairperson of Japan Airlines
Co. Ltd. As the chair of the Board of Directors of the Company, he leveraged his abundant business experience and a high level of
insight to energize the activities of the Board of Directors and increase effectiveness of the Board of Directors and as a Director of theBoard offered appropriate advice and suggestions regarding the Company's business strategies and corporate governance. Furthermore,as the chairperson of the Advisory Board, a consultative body, he thoroughly fulfilled his duties and also as a member of the Nomination
Advisory Committee and the Compensation Advisory Committee, he fulfilled major roles, including the nomination of
Directors and top executives, and when discussing matters such as performance evaluations for Members of the Board,
including the CEO, and revising the compensation system for op executives. Therefore, the Company continues to select him
as a candidate for Outside Director, so that he can continue to supervise management from an objective standpoint through the Boardof Directors, Advisory Board, Nomination Advisory Committee, and Compensation Advisory Committee by utilizing his abundantbusiness experience and high level of insight.
9Note 1: Masaru Onishi is a candidate for Outside Director. The Company requires the candidate for Outside Director to satisfy all therequirements for an Independent Director as stipulated by the Company. Masaru Onishi satisfies all the prescribed requirements. He
also fulfills the requirements set forth by the Tokyo Stock Exchange Group, Inc. for Independent Director. In light of this, the Company
has registered Masaru Onishi as an Independent Director with the Tokyo Stock Exchange Group. The contents of the requirementsof “Independent Director” stipulated by the Company can be viewed at the Company’s Web site:(https://www.teijin.com/ir/management/governance/requirements/)
Note 2: Masaru Onishi currently serves as an Outside Director at Teijin Ltd. In accordance with Article 427 of the Companies Act andthe Companyʼs Articles of Incorporation, an Outside Director shall enter into a limited liability agreement in which the limit of liabilityis ¥20 million or the minimum amount of liability set forth in Article 425, Paragraph 1 of the Companies Act, whichever is higher.
Should the reappointment of an Outside Director be approved, the Company shall extend its limited liability agreement with the Outside
Director.
Note 3: The period of tenure is from the date on which Masaru Onishi is appointed to the position of Outside Director and ends at theclose of the General Meeting of Shareholders.
Date of First Appointment: June 20, 2019; Tenure of position: 4 years[Reappointment]

April 1976

Joined Bridgestone Corporation[Outside]

March 2006

Vice President and Officer, Bridgestone Corporation[Independent]

March 2008

Director, Vice President and Senior Officer, Bridgestone
Corporation

September 2011 Representative Director and Senior Vice President Bridgestone
Masaaki Tsuya
June 22, 1952

Corporation
March 2012

(FY2022)⑦

Representative Director, CEO (Chief Executive officer),
Bridgestone Corporation[Participation in the March 2013

Representative Director, CEO (Chief Executive officer) and

Board of Directors]

Chairperson of the Board, Bridgestone Corporation

10 times out of 10

1,700 shares

March 2016

(100%)

Representative Executive Officer, CEO (Chief Executive
officer) and Chairperson of the Board, Bridgestone Corporation

March 2020

Chairperson of the Board, Bridgestone Corporation

March 2021

External Advisor, Bridgestone Corporation (Incumbent)

June 2022

Director, Teijin Limited (Incumbent)
Advisory Board member of Teijin Limited (Incumbent)(Significant Concurrent Positions)
External Advisor, Bridgestone Corporation[Reason for nomination of the candidate for Outside Director and expected roles]
Masaaki Tsuya consecutively held the post of Representative Executive Officer, CEO and Chairperson of the Board of Bridgestone
Corporation. Leveraging his abundant business experience and high level of insight, he provides proper advice and suggestion as an
Outside Director. Furthermore, as a member of the Advisory Board, a consultative body, he provided recommendations on importantmatters for management overall, and as a member of the Nomination Advisory Committee and Compensation Advisory Committee,
he adequately fulfilled his duties by leveraging his wealth of work experience when deliberating matters, including the nomination of
Directors and top executives, and when evaluating the performance of Directors, etc. including the CEO, and when revising thecompensation system for top executives. Therefore, he is once again being nominated to serve as an Outside Director.
The amount of transactions between Bridgestone Corporation and the Company accounts for less than 1% of the consolidated net salesof either company.

10Note 1: Masaaki Tsuya is a candidate for Outside Director. The Company requires the candidate for Outside Director to fulfill all therequirements for an Independent Director as stipulated by the Company. Masaaki Tsuya fulfill all the prescribed requirements. He also
fulfills the requirements set forth by the Tokyo Stock Exchange Group, Inc. for Independent Director. In light of this, the Company hasregistered Masaaki Tsuya as an Independent Directors with the Tokyo Stock Exchange Group. The contents of the requirements of“Independent Director” stipulated by the Company can be viewed at the Company’s Web site:(https://www.teijin.com/ir/management/governance/requirements/)
Note 2: Masaaki Tsuya currently serves as an Outside Director of the Company . In accordance with Article 427 of the Companies Act
and the Companyʼs Articles of Incorporation, the Company and Masaaki Tsuya entered into a limited liability agreement in which thelimit of liability is ¥20 million or the minimum amount of liability set forth in Article 425, Paragraph 1 of the Companies Act, whicheveris higher. When reappointment of Masaaki Tsuya an Outside Director be approved, the Company will extend its limited liability
agreement with the Outside Director.
Note 3: The date that Masaaki Tsuya was first appointed to Outside Director and the tenure of position commencing on the date of first
appointment and ending at the close of the General Meeting of Shareholders.
Date of First Appointment: June 22, 2022; Tenure of position: 1 year
[New candidate]June 1995

Joined 3M Company[Outside]

May 2008

Vice President and General Manager, Home Care
Division, 3M Company[Independent]⑧

Tamie Minami

October 2013

Vice President, Southeast Asia Region, 3M Company

October 2015

Vice President, Latin America Region, 3M Company

0 shares

November 2017 Vice President, Asia Region, 3M Company

February 15, 1959 December 2019

Senior Vice President, Safety and Industrial BusinessGroup, Asia Region, 3M Company(Significant Concurrent Positions)
Outside Director, Santen Pharmaceutical Co., Ltd.
[Reason for nomination of the candidate for Outside Director and Roles expected]
Tamie Minami garnered practical experience at 3M Company, a global company, in the healthcare business and as officers incharge of multiple regions. The Company expects she will provide adequate opinions from a global perspective and a viewpoint ofDiversity & Inclusion reflecting her experiences nurtured thus far at the Board of Directors, Advisory Board, Nomination Advisory
Committee and the Compensation Advisory Committee at the Company , which plans to continue deploying its business operations
globally going forward and which positions the healthcare business field as one of its core businesses, Therefore, she is being nominatedas a candidate for Outside Director as we expect she will provide adequate opinions from a global perspective and a viewpoint ofDiversity & Inclusion reflecting her experiences nurtured thus far.
Note 1: Tamie Minami is a candidate for Outside Director. The Company requires the candidate for Outside Director to satisfy all therequirements for an Independent Director as stipulated by the Company. Tamie Minami fulfill all the prescribed requirements. She also
fulfill the requirements set forth by the Tokyo Stock Exchange Group, Inc. for Independent Director. In light of this, the Company
plans to register Tamie Minami as an Independent Director with the Tokyo Stock Exchange Group. The contents of the requirementsof “Independent Director” stipulated by the Company can be viewed at the Company’s Web site:(https://www.teijin.com/ir/management/governance/requirements/)
Note 2: When nomination of Tamie Minami as an Outside Director is approved, in accordance with Article 427 of the Companies
Act and the Companyʼs Articles of Incorporation, the Company and Tamie Minami will enter into a limited liability agreement inwhich the limit of liability is ¥20 million or the minimum amount of liability set forth in Article 425, Paragraph 1 of the Companies
Act, whichever is higher.

11Proposal 2: Election of Two (2) Statutory Auditors

The term of office for Statutory Auditors, Masanori Shimai and Gen Ikegami, will expire at the close of this General Meeting of
Shareholders. Shareholders are therefore requested to elect the following two (2) candidates (one (1) of whom is up for reelection) as
Statutory Auditors.
Note the consent of the Board of Statutory Auditors was obtained in advance pertaining to the submission of this proposal.
The candidates for Statutory Auditors are as follows.

Candidate
No.

Name(Date of Birth)

Number of
Personal History, Positions and Significant Concurrent Positions

Companyʼs
Shares Owned[Reappointment]
Masanori Shimai①

April 1987

Joined Teijin Limited

June 2010

General Manager, Business Strategy Office

April 2013

General Manager, Administration Department, Teijin
Pharma Limited

March 7, 1964
July 2016

General Manager, Accounting Department

April 2017

General Manager, Material Business Strategy Division

June 2019

Statutory Auditor (incumbent)

6,711 shares[Reason for selection as a Statutory Auditor candidate]Since joining the Company, Masanori Shimai has gained experience in the Corporate Management Department and Accounting
Department. He possesses knowledge in accounting and finance and is well versed in the details of business operations of the Company.
Since his appointment in June 2019, as a full-time Statutory Auditor, he has supervised management overall and has been providing
effective advice. In light of this, the Company ascertains that he will continue to properly execute his duties as a Statutory Auditor.

②[New candidate]

October 1984

[Outside]

September 1988 Registered as a Certified Public Accountant[Independent]

July 2004

Senior Partner, ShinNihon LLC

February 2016

Chairman, ShinNihon LLC (currently Ernst & Young

Koichi Tsuji
April 10, 1957

Joined Peat Marwick Mitchell & Co.

ShinNihon LLC)
July 2019

Chairman and CEO of EY Japan Co., Ltd.

0 shares

Member of the Board of Directors of EY Japan Co.,Ltd.
(Significant Concurrent Positions)
Outside Director, Mitsubishi UFJ Financial Group, Inc.
[Reason for selection as a Statutory Auditor candidate]
Koichi Tsuji is well experienced as a CPA and is well versed in accounting and auditing. It is our assessment he will giveaccurate advice backed by expertise, and will contribute to maintaining and improving compliance at Teijin and will
properly execute his duties as an auditor.
Note 1: Koichi Tsuji is a candidate for Independent Outside Statutory Auditor. The Company requires the candidate for Outside
Statutory Auditor to fulfill all the requirements for an Independent Statutory Auditor as stipulated by the Company. Koichi Tsuji fulfills
all the prescribed requirements. He also fulfills the requirements for independence set forth by the Tokyo Stock Exchange for
Independent Statutory Auditor. In light of this, the Company plans to register Koichi Tsuji as an Independent Statutory Auditor with
the Tokyo Stock Exchange. The contents of the requirements of Independent Auditor stipulated by the Company can be viewed at theCompany’s Web site: (https://www.teijin.com/ir/management/governance/requirements/).
12

Note 2: Masanori Shimai currently serves as a Statutory Auditor. In accordance with Article 427 of the Companies Act and theCompanyʼs Articles of Incorporation, the Company and Masanori Shimai enter into a limited liability agreement in which the limitof liability is 20 million yen or the minimum amount of liability set forth in Article 425, Paragraph 1 of the Companies Act, whicheveris higher. When reappointment of Masanori Shimai as an Statutory Auditor is approved, the Company will extend said limited liability
agreement with Mr. Shimai. In addition, when appointment of Koichi Tsuji as Statutory Auditor is approved, in accordance with Article
427 of the Companies Act and the Company’s Articles of Incorporation, the Company will enter into the same limited liability
agreement with Koichi Tsuji
Note 3: There are no special interests between each of the candidates and the Company.
Note 4: Regarding the "Directors and Officers Liability Insurance Policy", please refer to "Directors' and Officers' Liability Insurance
Contracts for Director and Auditor Candidates mentioned below.
◆Directors and officers liability insurance contract related to candidates for statutory auditor
The Company has concluded a directors and officers liability insurance contract with an insurance company as stipulated in Article 430-3,
Paragraph 1 of the Companies Act, Under said insurance contract, the legally mandated amount of indemnification and litigation expenses
arising from the insured’s assumption of liability during the insurance period caused by any claim due to the performance or omission of hisor her duties, will be covered. However, claims for damages caused by willful misconduct intention or gross negligence of the insured will not
be covered.
Regarding the first agenda item (Election of eight(8) directors) and the second agenda item (election of two(2) auditors), for the candidates
who are up for reappointment, they are already assured persons of the insurance contract. If their reappointment is approved, they willcontinue to be assured persons. For the new director and auditor candidates, if their appointment is approved, they will become assured
persons of the insurance contract.
Note that the insurance premiums of said insurance contract are covered in full by the Company. In addition, said insurance contracts arescheduled to be renewed in June 2023.

13

<Reference>Management Structure After Approval of Proposal 1and 2“Independent” indicates an independent director as stipulated by the Tokyo Stock Exchange Group, Inc.
Name

Position
at Teijin

Attributes

TenureArea in which they can exert their expertise and experience
Management Finance and Legal/Business/
GlobalEnvironment Health and
IT/DX/
experience*1 accounting Risk management management Solution Safety Solution Innovation*2

Akimoto Representative
Uchikawa Director of theBoard,
President andCEO,

2 years〇

Eiji Ogawa Representative
Director of theBoard,
SeniorExecutive
Officer

3 years〇

NaohikoMoriyama

Director,
SeniorExecutive
Officer

2 years〇

NoboruYamanishi

Director,
Executive
Officer－〇

YoichiSuzuki

Director

Outside5 years
Independent

MasaruOnishi

Director

Outside4 years
Independent〇

MasaakiTsuya

Director

OutsideIndependent

1 year〇

Tamie
Minami

Director

OutsideIndependent－

Masanori
ShimaiFull-time
Statutory
Auditor4 years

Akio
Nakaishi

Full-time
Statutory
Auditor3 years

Hitomi
Nakayama

Statutory
AuditorOutside6 years
Independent〇

Jun Arima

Statutory
AuditorOutside3 years
Independent〇

Koichi
Tsuji

Statutory
AuditorOutsideIndependent

－

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

Diversity &Inclusion

〇

〇

〇

〇

〇

〇

〇

〇

*1 Management experience: Includes experience in business portfolio management and structural reforms*2 IT/DX/Innovation: Includes experience in manufacturing and quality control*The table is not indicative of all the expertise and experience possessed by each individual.
*The contents of the requirements for Independent Director and Independent Statutory Auditor as stipulated by the Company
can be viewed on the Company’s website: (https://www.teijin.com/ir/management/governance/requirements/).

14

Attached Reports

Reports on Operations for the 157th Fiscal Year
1. Matters concerning the current status of the Teijin Group (corporate group)(1)Progress and results of business activities
1）Business results for the current period
FY2022 was characterized by growing uncertainty about the future due to a difficult world situation with concerns about
possible long-term geopolitical risks raised by the Russian invasion of Ukraine, sharp rises in raw material and fuel prices,
disruption in supply chains, labor shortage, and fears of a potential global recession being triggered byaccelerated inflation and other factors, despite signs of a global economic recovery from the adverse impact of COVID-19
restrictions on social and economic activities.

The Teijin Group has been implementing various measures envisioned in its medium-term management plan for thethree years from FY2020, which the Group positions as a period for creating growth platforms, under its long-term visionof becoming “a company that supports the society of the future” by contributing to realizing a sustainable society. InFY2022,
the final year of the plan, as initiatives in the Materials Business Field, the Group made capital investment to increase its
para-aramid fiber production capacity in the Netherlands and promoted efforts to ensure stable operations and raise theoperating rates of two new North American plants put into operation in FY2021: an automotive composites plant in Texas
and a carbon fibers plant. In the Healthcare Business Field, the Group strove to maintain and increase sales of diabetes
treatments for which the Group had taken over the Japan sales rights from Takeda Pharmaceutical Company Limited in
FY2021. However, the Group was unable to achieve any of the financial targets set in its medium-term management plan
2020–2022 due to a serious decline in profitability in the Materials Business Field and other factors amid drastic externalsituational changes. In response to these results, in February 2023, the Teijin Group announced the Teijin Group Reforms
for Profitability Improvement and declared that it would focus on solving the top-priority challenge of profitability
improvement toward a return to growth in the future.
For FY2022, the Teijin Group’s net sales amounted to 1,018.8 billion yen, an increase of 10.0% year on year, andoperating income was 12.9 billion yen, a decrease of 70.9% year on year. Ordinary income was 9.1 billion yen, adecrease of 81.7% year on year, while the Group suffered a loss attributable to owners of parent of 17.7 billion yen
due to the recording of impairment losses and a rise in the tax burden rate caused mainly by the growing deficit of overseas
subsidiaries whose tax effect is unrecognizable. (For FY2021, the Group achieved a profit attributable to owners of parentof 23.2 billion yen.) The operating income of the Materials Business Field decreased mainly due to a production problem
and a labor shortage at U.S. and European bases, and the slowing Chinese economy, although the sharp rise in raw material
and fuel prices were offset by revising sales prices. The Healthcare Business Field also experienced a decrease in operating
income mainly due to a decline in the sales volume of FEBURIC, a gout and hyperuricemia treatment, caused by the market
entry of generic alternatives and drug price revisions. The Fibers & Products Converting Business achieved an increase inoperating income thanks to strong sales, while the operating income of the IT Business decreased mainly due to an increased
advertising cost for e-comics services.
As a result, ROE, an indicator of profitability, was −4.1%, short of the target (10% or higher) for the final fiscal year
(FY2022) of the medium-term management plan, and ROIC based on operating income was 1.6%, also lower than thetarget (8% or higher) for the same fiscal year. EBITDA, an indicator of the ability to generate cash, was 87.8 billion yen,15

failing to reach the target (150.0 billion yen) for the same fiscal year.

In current consolidated fiscal year, the orthopedic implantable device business, in which Teijin Nakashima Medical and
Teijin Medical Technologies are mainly engaged, was transferred from the “Healthcare” segment to the “Others” segment.
This change was made because the Company positions this business as a new business that should be fostered andstrengthen from a company-wide, long-term perspective. For FY2021 comparisons, figures for FY2021 have beenrearranged according to the segment classification after the change.
2）Fiscal situation
Total assets at the end of the current consolidated fiscal year increased by 34.9 billion yen from the end of the previous
consolidated fiscal year to 1,242.4 billion yen.
Current assets increased by 41.3 billion yen from the end of the previous consolidated fiscal year due to changes incash, deposits, accounts receivable, inventory, and other current assets.
As for fixed assets, it decreased by 6.5 billion yen from the end of the previous consolidated fiscal year. Althoughtangible fixed assets increased by 32.3 billion yen due to capital investment exceeding depreciation, goodwill that wasrecognized for the investment into Teijin Automotive Technologies NA Holdings Corp. was fully impaired by 15.9 billion
yen, and sales rights increased for type 2 diabetes treatments from Takeda Pharmaceutical Company Limited wasamortized by 14.9 billion yen.
Liabilities increased by 48.6 billion yen from the end of the previous consolidated fiscal year to 791.3 billion yen.
Interest-bearing debt increased by 44.3 billion yen, mainly due to the increase of the demand of funds.
Net assets decreased by 13.7 billion yen from the end of the previous consolidated fiscal year to 451.1 billion yen. Thiswas mainly due to the recording of loss of 17.7 billion yen attributable to owners of the parent while there is the increasein foreign currency translation adjustment accounts due to the depreciation of the yen against major currencies.
As a result, the debt-to-equity ratio was 1.2 times and the equity ratio was 34.2%. (At the end of the previous
consolidated fiscal year, the debt-to-equity ratio was 1.1 times and the equity ratio was 36.4%)
The conversion rates of balance sheets at the end of the current consolidated fiscal year are 134 yen / US dollar, 146
yen / euro, and 1.09 US dollars / euro (122 yen / US dollar, 137 yen / euro, 1.12 US dollars / euro at the end of theprevious consolidated fiscal year).
Segment operating results (sales and operating income) of the Teijin Group are as follows.
(Billions of yen / %)Fiscal 2021

Fiscal 2022

ChangePercentage

Net sales

High-performance materials

2,735

2,922

+187

+6.8

Composites

1,116

1,638

+523

+46.8

Materials Sub Total

3,851

4,560

+709

+18.4

16

Operating Income

Healthcare

1,751

1,524

△227

△13.0

Fibers & Products Converting

2,825

3,218

+393

+13.9

IT

538

580

+43

+7.9

Others

296

305

+9

+3.1

Total

9,261

10,188

+927

+10.0

Materials

△57

△204

△147

-

Healthcare

433

235

△198

△45.7

Fibers & Products Converting

56

100

+43

+76.8

IT

97

81

△16

△16.6

Others

△23

△24

△1

-

Elimination

△64

△59
+5

-

△313

△70.9

and corporate
Total

442

129

EBITDA ratio by segment
Segment Component ratio

Segment Component ratio

Material

17.8%

Healthcare

53.4%

Fibers & Products Converting

18.2%

IT

9.5%

Others1.1%

Total (erasure excludes company-wide)

100.0%＜Materials Business Field＞
Although the sharp rise in raw material and fuel prices were offset by revising sales prices, and favorable
foreign exchange rates boosted income, income was affected mainly by the temporary impacts of an equipment
breakdown at a U.S. base and a fire at a plant in Europe, a decline in productivity due to a chronic labor shortagein the U.S. and Europe, a decreased operating rate of plants in China due to lockdowns and the consequent
slowdown of the Chinese economy.
Net sales were 456.0 billion yen, an increase of 70.9 billion yen (18.4%) year on year, while operating loss increasedby 14.7 billion yen year on year to 20.4 billion yen. EBITDA was 16.5 billion yen, a decrease of 8.5 billion yen year on
year, while ROIC based on operating income was −5%.
In the aramid business, although demand for Twaron para-aramid fibers, the major product in the business, remained
high, sales volume decreased mainly due to a decline in productivity caused by the suspension of production lines after afire at a raw material plant in the third quarter and a labor shortage. Profitability also declined despite progress in selling
price revisions made in response to increased fuel costs against the backdrop of a sharp rise in the natural gas price inEurope. Favorable foreign exchange rates had certain income-boosting effects. As a result, the aramid businessexperienced a net-sales increase and an operating-income decrease year on year.
17

In the resin and plastic processing business, the sales volume of polycarbonate (PC) resin, the major product in thebusiness, decreased due to a reduced operation level at customer plants in China amid the COVID-19 pandemic and theslowdown of the global economy, including the Chinese economy. As a result, the resin and plastic processing
business recorded a year-on-year decrease in both net sales and operating income.
In the carbon fibers business, the sales mix improved thanks to strong demand for TENAX carbon fibers for all
applications and an increase in their sales volume for aircraft applications in particular. In addition, efforts to revise selling
prices were made in response to a rise in the prices of the main raw materials. As a result, the carbon fibers businessachieved a year-on-year increase in both net sales and operating income.
In the battery materials business, the sales volume of LIELSORT, a separator for lithium-ion batteries (LIBs), increased
for smartphone applications, just as in the previous fiscal year. As a result, the battery materials business achieved ayear-on-year increase in both net sales and operating income.
In the composites business, sales volume increased because Teijin Automotive Technologies*US benefited from thealleviation of the shortage of semiconductors and other parts at OEMs, its major customers, and started full-scale sales in
new large-scale programs. The business also made efforts to revise selling prices in response to rises in raw material prices,succeeding in obtaining the consent of multiple OEMs. Meanwhile, a breakdown of molding equipment at a U.S. plantcaused a temporary decline in productivity and additional costs, while the U.S. labor market participation rate did not
return to its normal level despite gradually improving, resulting in an unhealthy demand-supply balance in the labor market
and consequently a chronic labor shortage. As a result, the composites business recorded a net-sales increase and an
operating-income decrease year on year.
* Global business brand of the automotive composites business＜Healthcare Business Field＞
The Healthcare Business Field performed well in sales of Somatuline*1 and Xeomin*2,and the home healthcare
device rental service. Meanwhile, income was affected by a decrease in the sales volume of FEBURIC, apharmaceutical product, after the market entry of generic alternatives.
Net sales were 152.4 billion yen, a decrease of 22.7 billion yen (13.0%) year on year, and operating income was 23.5
billion yen, a decrease of 19.8 billion yen (45.7%) year on year. EBITDA was 49.6 billion yen, a decrease of 20.0 billion
yen year on year, while ROIC based on operating income was 13%.
In the pharmaceutical business, sales volume decreased due to the market entry of generic alternatives to
FEBURIC from June 2022. In addition, income was affected by the revision of drug prices, mainly the prices of drugs thatremained on the National Health Insurance drug price list long after the expiration of patents for them. Meanwhile, thesales volume of Somatuline*1, a treatment for acromegaly, pituitary gigantism, and neuroendocrine tumors, and Xeomin*2,
a treatment for upper and lower limb spasticity, increased steadily. In addition, in January 2023, the business launched
OSTABALO 1.5 mg, an osteoporosis treatment. Moreover, in March 2023, the business entered into an exclusive license
agreement with Novartis for an investigational small-molecule candidate for kidney disease treatment and received an
upfront cash payment of US$ 30 million.
*1 Somatuline® is the registered trademark of Ipsen Pharma, France*2 Xeomin® is the registered trademark of Merz Pharma GmbH & Co. KGaA, Germany18

In the home healthcare business, there was a lasting trend among medical institutions toward restricting hospitalizationand encouraging home healthcare in the home oxygen therapy (HOT) market to secure beds for COVID-19 patients.
However, the use of oxygen concentrators for COVID-19 patients stopped increasing, and the number of rented oxygen
concentrators was almost at the FY2021 level. In addition, in the market for continuous positive airway pressure (CPAP)
therapy, the recovery in the number of examinations slightly slowed mainly due to the eighth COVID-19 wave, but the
number of rented CPAP devices continued to grow, achieving an increase of about 5% from the end of FY2021.

＜Fibers & Products Converting Business＞
Net sales were 321.8 billion yen, an increase of 39.3 billion yen (13.9%) year on year, and operating income was 10.0
billion yen, an increase of 4.3 billion yen (76.8%) year on year. EBITDA was 16.9 billion yen, an increase of 4.8 billion
yen year on year, while ROIC based on operating income was 7%.
In the field of textiles and apparel, sales of textiles and apparel items for the European, U.S., and Chinese markets
remained strong. In addition, relaxed restrictions on activities caused a recovery in apparel sales in Japan as well. In
the field of industrial materials, sales of automotive parts, artificial leather, and short polyester fibers for water treatment
filters remained strong. Business performance was affected by rises in raw material and fuel prices and logistics costs andan increase in purchase costs against the backdrop of the depreciation of the yen, but efforts were made to revise theselling prices of fiber materials and textiles.
＜IT Business＞
Net sales were 58.0 billion yen, an increase of 4.3 billion yen (7.9%) year on year, while operating income was 8.1
billion yen, a decrease of 1.6 billion yen (16.6%) year on year. EBITDA was 8.8 billion yen, a decrease of 2.0 billion yen
year on year, while ROIC based on operating income was 53%.
In the Internet business field, as a result of sustained efforts to enhance advertising activities for e-comics services,
sales remained strong. In the IT service field, performance was generally good despite the lasting impact of the COVID19 pandemic on the healthcare business.
＜Others (including the engineering business, the orthopedic implantable devices business,and the regenerative medicine business)＞
Net sales were 30.5 billion yen, an increase of 0.9 billion yen (3.1%) year on year, while operating loss increased by
0.1 billion yen year on year to 2.4 billion yen.
The orthopedic implantable devices business, which encompasses artificial joints and absorbable osteosynthesis
materials, achieved a net-sales increase year on year due to its acquisition of the spine and trauma business fromKiSCO Co., Ltd. in February 2022 and good sales of artificial joints.
Japan Tissue Engineering Co., Ltd. (hereinafter, “J-TEC”), which is engaged in the regenerative medicine business,achieved a sales increase in its Custom Development & Manufacturing Business but experienced a sales decrease in
its Regenerative Medicine Business and R&D Support Business, resulting in a decrease in total net sales year on year.
In March 2023, J-TEC obtained approval for the manufacturing and marketing of JACEMIN, autologous cultured
epidermis containing melanocyte, as a new treatment for stable vitiligo.

19

(2) Changes in Assets and Profit and Loss

Business

Fiscal Period 154th Fiscal Period 155th Fiscal Period 156th Fiscal Period 157th Fiscal Period
FY2019FY2020
FY2021
FY2022 (period(Ended Mar. 2020) (Ended Mar. 2021) (Ended Mar. 2022)
under review)(Ended Mar. 2023)

Net sales(Millions of yen)853,746

836,512926,054

1,018,751

Operating income(Millions of yen)

56,20554,931

44,20812,863

Ordinary income(Millions of yen)

54,33753,65849,692

9,100

25,252△6,662

23,158△17,695

131.63△34.70120.58△92.04

Profit attributable(Millions of yen)
to owners of parent
Net earnings per
(Yen)
share
Total assets(Millions of yen)

1,004,223

1,041,131

1,207,583

1,242,433

Net assets(Millions of yen)

411,409430,364

464,811451,084(3) Capital investment
Capital investments in the fiscal year under review totaled ¥62.5 billion, mainly for the purpose of increasing production
capacity in the aramid business and the composites business.

(4) Financing
The Company procured borrowings from financial institutions. Interest-bearing liabilities increased by 44.3 billion yen fromthe end of the previous fiscal year to 529.4 billion yen.

20

(5) Management Policy and Tasks Ahead
1) Corporate Vision
Based on its corporate philosophy and toward the creation of a sustainable society, the Teijin Group aims to achieve its longterm vision, which is to become “a company that supports the society of the future”. In consideration of global social issues
and to achieve the SDGs, the Group has identified the five issues of materiality that need to be addressed as priorities, andaims to realize a sustainable society and further enhanced corporate value.

Around 100 years since its founding, the Group has built a business foundation by anticipating the needs of society, andthrough the transformation into new business and by tackling challenges. Amid this backdrop, in the post-pandemic society,
the Company is accelerating its transformation into a company that solves important social issues by leveraging its strengths—
the quality of trust, customer relations, and capabilities for providing support to patients and the local community, strengths
that are nurtured by seriously dealing with the issues of customers and patients. In addition, to further embody the long-term
vision of becoming a “company that supports the society of the future,” the Company aims to contribute primarily to the fieldof automobiles, aircraft and energy, which contribute to the environment, and the field of disease, such as rare and intractablediseases, as a “company that protects the global environment,” and as a “company that addresses issues faced by patients,
their families and local communities that require further support.”

2) Issues to be addresseda) Management policies
The Company underperformed the numeric figures in the medium-term management Plan 2020–2022, the main factor
being a substantial deterioration in profit margins in the Materials Business Field. In specific, the Company set a goal
for its cost of capital based on an ROE of 10%-plus and an ROIC based on consolidated operating income of 8%-plus.
The Company missed both its targets for ROE and ROIC based on consolidated operating income. Consequently, theCompany’s PBR (Price Book-value Ratio), a market yardstick, dipped below 1x. Taking these circumstances into
account, although the vision has not changed substantially from the medium-term management Plan 2020–2022, theCompany temporarily discontinued its investment strategy, which was divided into future Strategic Focus and Profitable
Growth. In FY2023, the Company plans to place priority on reforming the following profit margin improvements aimed
at a return to growth moving forward.
① Improve profitability in the composites, aramid and healthcare businesses21

② Review the management structure to promote the acceleration of management decisions and execution
As the outcome of these results, the Companys aim to improve earnings by 30.0 billion yen-plus by FY2023.
Concurrently, the Companys aim to move forward with considerations for rebuilding the business portfolio and arescheduled to disclose a new Medium-term management plan for the Teijin Group in FY2024.

b) Issues to be addressed
The management environment by business and issues that should be addressed are as follows.
Management environment

Issues to be addressed

Composites

 the Company implemented measures
to pass on cost to selling prices, costcuts, insourcing and automation tocounter the shortage insemiconductors, rapidly soaring raw
material cost and the lack of labor but
they were not sufficient to compensate
for these issues, therefore we
continued to incur a substantial loss

 the Company plan to thoroughly reconsider theroom for improvement in profit margins in the
North America business and execute around 130
planned improvement measures (anenhancement in operating income of ¥13.0
billion) In the event the Company are unable torecognize the results of improvement measuresin the North America region, the Company
would decide whether or not to continue to carryout businesses.

Aramid Although the Company implemented
measures to strengthen the Company
product capacity, profit margins
deteriorated substantially due to a risein costs due to skyrocketing natural
gas prices, difficulties securing labor,
poor production, and production
shortfall due to blackouts and fires

 In FY2023, the Company set a goal for arecovery in profit margins through theallocations of resources for productivity
improvement measures, measures to deal withsoaring natural gas prices, and demand measures
to boost production/sales (goal is to improve
operating income 7.0 billion yen) the Company aims to strengthen our leading
share through the achievement of sustainability
via differentiation and by boosting sales volume

Healthcare In pharmaceuticals, the productpipeline, which contributes to future
earnings, is lacking
 In home healthcare, although theCompany maintained a leading sharein Japan for HOT/CPAP devices, thecreation of new products and services
underperformed

 The Company plans to use the businessfoundation developed for the home healthcare
device business, which has a leading share in
Japan, for pharmaceuticals mainly in the field of
rare and intractable diseases
 The Company plans to review the Company‘ssources for each essential function from scratchand set goals for the execution of drastic fixed
cost reductions in FY2023(FY2025 goal for fixed cost reductions: 5.0
billion yen)

Resin and

 Sales volume decline due to adecrease in demand mainly in the
China market

 The Company looks to make headway in the
improvement of profitability by shifting to highvalue-added products and implementing anenvironmental strategy

Plastic
Processing

Carbon Fibers  Development of next-generation
aircraft product applications, whichhave been making progress toward
adoption, were delayed due to
COVID-19

 In addition to activities for the certification ofprograms for intermediate materials for aircraft
and the implementation of environmental
strategies, we also plan to make improvements
to earnings
22Fibers &Products
ConvertingIT Transform into a business that records
stable earnings even in a businessenvironment hindered mainly bysoaring raw material and fuel prices

 In addition to the implementation ofenvironmental strategies, The Company aim toaccelerate the expansion of growth fields(mobility, infrastructures, global apparel) The acquisition of customers foronline business grew

 In IT services, the Company plan to placepriority on the healthcare business and further
explore growth opportunities in online
businesses

To make the Company’s management system resilient to changes in the external environment, The Company plans to
implement the following measures from FY2023 to accelerate decision-making and execution by management.

Item

Measures

Clarify the Clarify responsibilities and roles by restructuring the executive officer system (reduce theroles of thenumber of executive officers by half to a 15 member system)
head office Consolidated business units under the direct control of the CEO, and create a flat hierarchy
and businesses for the organization’s business units

Strengthen the  Bolster the proposal of business strategies/plans and monitoring capabilities by the head
officebusiness Further delegate decision-making authority to the general manager of a business unit andoperation
accelerate the execution of duties and implement risk management
functions
Review head
officefunctions Reorganizing and integrating new business development organizations into the New
Business Development Unit under corporate supervision The creation of innovation in the future through collaboration will be executed crossfunctionally Optimizing the allocation and scale of HQ staff (Fixed cost reduction goal for FY2025: 4.0
billion yen)

Extrapolating from the above, the Company is are stably implementing various measures to improve profitability atthose business units that will become growth drivers, pushing forward with the transformation of the management system
to undertake the realization of sustainable growth and an improvement in corporate value in the medium term that willmeet the expectations of stakeholders, including shareholders and investors.

c) Concept and actions related to sustainability■Initiatives pertaining to materiality
The Group recognizes issues surrounding sustainability, including social and environmental issues, as management
challenges. A policy pertaining to sustainability has been laid out in the medium-term management plan 2020–2022, andthe Company has have organized the opportunities and risks for the Company and specified important issues. The Company
is are setting various KPIs and implementing actions that will contribute to the realization of our long-term vision. theCompany’s also aims to accelerate the Company’s transformation into a company that solves important issues in the post
pandemic era without altering the important issues that the Company should tackle as the Company also stated in the “TeijinGroup Reforms for Profitability Improvement,” disclosed in February, 2023.

23

①Governance
The Company will discuss and report policies, plans and progress related to sustainability at the Management Committee,
conduct an annual review once a year under the purview of the Chief Sustainability Officer to confirm important issues at
each business group and group company. Regarding important operational risks, deliberations on basic plans take place at
the Total Risk Management (TRM) Committee* twice a year. The progress is then reported to the TRM Committee, andthe details of these discussions and reports are then passed on to the Board of Directors. Moreover, once a year the Chief
Sustainability Officer reports the performance status of their duties to the Board of Directors, and sustainability related
activities are undertaken under the guidance and supervision of the Board of Directors.
(*)TRM Committee: A meeting body chaired by the CEO that integrates the management of “strategic risk” and“operational risk”②Strategy
The Company aims for the sustainable development of business and society by interpreting important social issues (i.
climate change mitigation and adaptation, ii. achievement of a circular economy, iii. safety and security of people and local
communities, and iv. realization of healthy and comfortable living for people) as business growth opportunities and bycreating and providing new value required by society.

③ Risk management
The Company is are positioning climate change risk, human rights infringement risk, information security risk,
geopolitical risk and security risk as the most serious risks to the Company’s Group and are managing these risks using our
TRM system.

④ Indicators and goals
The Company is are continuing to use the KPIs set forth in the medium-term management Plan 2020–2022 for reducing
environmental impact. The Group’s targets for greenhouse gas (GHG) emissions were officially validated as targets that
limit global temperature rise to “well below 2°C,” thereby receiving approval from the Science Based Targets initiative,
which recognizes GHG emission targets that are scientifically consistent with the targets of the Paris Agreement. The
Company established a roadmap for the achievement of long-term goals and are undertaking the realization of net zero CO2emissions. The Company also set other KPIs for long-term goals related to sustainability (see table below) and plan to
specify an achievable roadmap in the Company’s new medium-term management plan (scheduled to be disclosed in
FY2024).
Item

FY
Contribution*2

toreducing

CO2*1

emissions
Climate change(CO2 emissions)Group emissions (Scope 1 + 2)

Target2030

Achieve: Contribution to reduction > Total emissions

2030

30% reduction in comparison with the level in FY2018

2050

Net zero emissions

Supply chain*3 (Scope 3)

2030

15% reduction in comparison with the level in FY2018

Water (freshwater intake volume per sales unit) *4

2030

30% reduction in comparison with the level in FY20182030

20% reduction in comparison with the level in FY2018

Hazardous

substances(hazardous

chemical

substances

emissions per sales unit) *4
Resources recycling (amount of landfill waste per sales unit) *4

2030

20% improvement*5 in comparison with the level in
FY2018*1: Includes not only CO2 but also methane and nitrous oxide emissions*2: CO2 emission reductions achieved by the use of the Company’s products in the downstream area of the supply chain were calculated as the24contribution amount.
*3: Scope 3 emissions excluding Category 1 emissions (from purchased goods and services) in the trading business*4: The per sales unit for each indicator is calculated by using consolidated net sales as the denominator.
*5: In FY2022, we boosted our goal from a 10% improvement in comparison with FY2018 to a 20% improvement versus FY2018.

■Initiatives pertaining to human capital
The Group promotes “empowering our people” as one part of its corporate philosophy. In specific, it aims to realize thefollowing three items.
Provide a workplace for self-realization where employees can exert their capabilities and individuality.



Tackle creation and innovation along with employees.



Aim to become a group of people adorned with diverse personalities and appeal.

A company cannot grow without taking on the challenges of creation and innovation. The Group believes that
“empowering our people” through the three aforementioned items will enhance corporate value. In light of this, thecompany is are carrying out various measures that emphasize i. the promotion of diversity, ii. creation of an independent
career, iii. corporate culture reforms, and iv. productivity improvement, as well as the improvement of employee
engagement, which will serve as a foundation of all HR measures. Note that the Company has set the following goals to
promote diversity and employee engagement.

In addition, from the perspective of promoting digital transformation (DX), the Company newly established the DX
Promotion Department, to promote DX throughout the Group. The Company plans to use data and digital technologies
to nurture business architects* that can create new value and improve DX literacy among all employees.
(*) Business architect: People that use digital technology to plan, propose and implement solutions to solve problems3) Social Contribution Activities
The Teijin Group, in accordance with its basic policies for social contributions, will value harmony with nature andachieve growth with local communities. To this end, the Group is conducting appropriate social contribution activities
as a good corporate citizen, in line with its business attributes and which respect the local uniqueness of each area inwhich the Company operates. To provide support to the development of younger generations in the fields ofacademia/education and sports, the Company has supported a total of nearly 1,700 students specializing in science andengineering fields through the Teijin Kumura Scholarship provided by the Teijin Scholarship Foundation for about 70
years. Moreover, the Company is are supporting young people’s sports activities by co-sponsoring the All Japan HighSchool Soccer Tournament as well as supporting the Children’s Rights in Sport Principles announced by the Japan
25

Committee for UNICEF. In addition, we are continuously implementing a range of systems to support employees’
volunteer activities.

(6) Principal business(As of March 31, 2023)

Business

Business area
AramidPrincipal Products and Businesses
Para-aramid fibers, Meta-aramid fibers, High-performance polyethylene

Resin and Plastic Polycarbonate resin, Polycarbonate sheets & films, PET・PEN ･PBN resin, PPS
Materials

Highperformance

Processing

resin, Frame-retardant

Carbon Fibers Carbon fibers, Oxidized PAN fibers, Carbon fibers intermediate materials

materials(Prepreg etc.)
Material New

Lithium-ion battery separators, high-performance membrane

Business
Composites

Composites

The automotive composite products

Pharmaceuticals Prescription Drug: Treatment for hyperuricemia and gout, Type 2 diabetes
treatments, Agent for osteoporosis, Agent for severe infection, Sustained-release
expectorant, Transdermal analgesic anti-inflammatory, Treatment for

Healthcareacromegaly and pituitary gigantism, Botulinum toxin type A
Home Healthcare Home Health Care Services: Home oxygen therapy (HOT) oxygen concentrators,
Home continuous positive airway pressure (CPAP) therapy machine, Bilevel
Positive Airway Pressure Unit, Ultrasound Bone Fracture Treatment Devices
Healthcare New Functional foods
Business
Textiles andFibers & Products
Converting

Yarns, Textiles, Apparel products, General merchandise

ApparelIndustrial Textiles Polyester Fiber materials, Nonwoven Fabrics, Automotive materials, Industrial
and Materials

materials, Civil engineering and Construction materials, Tents and Heavy cloths,
Resin, films, Living and interior products, Healthcare products

Business solution Information system for general companies, Information system for hospital,
Information services for nursing care providers

IT
DigitalElectronic comics delivery service

entertainment
Other

Other

Medical devices for artificial joints, osteosynthesis materials, spinal implants etc.,

Note: PET (Polyethylene terephthalate), PEN (Polyethylene naphthalate), PBN (Polybutylene naphthalate), PPS (Polyphenylene sulfide)26

(7) Principal business locations, etc.
(As of March 31, 2023)

Business

Function

the Company

Headquarters

Location
Osaka, Tokyo
Shizuoka, Gifu, Ehime, Hiroshima, Yamaguchi

Manufacturing bases The Netherlands, Germany, Thailand, Vietnam, China, South Korea,
U.S.A.
High-performancematerials

Tokyo, Osaka Aichi
Operation bases

Materials

Research bases

Manufacturing bases

The Netherlands, Germany, Malaysia, Singapore, India, Thailand,
Vietnam, China, Taiwan, South Korea, U.S.A., Mexico, Brazil
Tokyo, Chiba, Shizuoka, Ehime, Yamaguchi
The Netherlands, Germany, Thailand, China, U.S.A.
Aichi, Gifu
U.S.A., Mexico, Portugal, Czech, Germany, China

Composites

Operation bases

Tokyo
U.S.A., Mexico, Portugal, Czech, China

Research bases

Manufacturing bases

Ehime
U.S.A., France, Germany
Yamaguchi, Hyogo
China

Healthcare

Operation bases
Research bases

18 branches and 129 sales offices throughout JapanTokyo, Yamaguchi
U.S.A.

Ehime, Ishikawa, Fukui, Niigata, Gifu, Shiga, Hyogo, Yamaguchi,
Manufacturing bases Shimane, Fukuoka
China, Thailand, Vietnam, Germany, Hungary
Osaka, Tokyo, Aichi, Niigata, Fukui

Fibers & Products
Converting

Operation bases

Research bases
IT

Operation bases

U.S.A., Germany, China, Thailand, Vietnam, Myanmar, Indonesia,
Mexico, India, Taiwan, Philippines, Bangladesh
Ehime
China, Thailand
Tokyo, Osaka

Manufacturing bases Aichi, Hyogo, Okayama
Other

Operation bases

Tokyo, Osaka Aichi, Ehime, Yamaguchi

Research bases

Tokyo, Aichi, Okayama

Note: The function of headquarters is indicated in The Company, and the manufacturing, operation and research bases are indicatedin each business segments.

27

(8) Employees

156th Fiscal Period

157th Fiscal Period

Change in the(Period under review)

number ofBusiness segments

employees(As of March 31, 2022)(As of March 31, 2023)

Materials

10451

11,048+597

Healthcare

3,594

3,155

△439

Converting

5,505

5,576

+71

IT

740

748

+8

Other

1,525

1,957

+432

Total

21,81522,484+669

Fibers & Products

Note 1: The number of employees stated above represents the numbers of employees in each segment.
Note 2: The number of employees stated above does not include temporary employees (2,015 employees for the 156th fiscal period
and 2,015 employees for the 157th fiscal period).

Number and ratio of employees by region

157th Fiscal Period (As of March 31, 2023)

RegionHeadcount

Ratio

Japan

9,594

43%

Americas

5,495

24

Europe and others

2,902

13

Asia

4,493

20

(9) Significant Subsidiaries(As of March 31, 2023)
Businesssegments

Business

Subsidiary

Headquarters
Location
The

Capital stock
0.02 million

Teijin Aramid B.V.
Netherlands
Teijin Corporation (Thailand)Materials performance Teijin Carbon Europe GmbH

Production and sales of meta 100.00

0.026 million
Germany

aramid fibers and resin※ 100.00

euro
US$310U.S.A.

※ 100.00

millionTeijin Polycarbonate China

Production and sales of paraaramid fibersbahtmaterials
Teijin Carbon America, Inc.

※ 100.00

2,367 million

LimitedPrincipal businessratio (%)

euro

ThailandHigh-

Investment

carbon fibers
Production and sales ofcarbon fibers

720 million
China

Production and sales of

Production of polycarbonate
100.00

Ltd.

RMB

28

resin

Teijin Chemicals Plastic

143 million
China

Production of polycarbonate
100.00Compounds Shanghai Ltd.

RMB

Teijin Lielsort Korea Co., Ltd. South Korea 29,096 million

resin compound
100.00 Production and sales of

KRW
Teijin Automotive
Technologies NA Holdings

US$830U.S.A.

millionlithium-ion battery separators※ 100.00

Production and sales ofComposite products

Corp.
Composites Teijin Automotive

7.2 million
PortugalTechnologies Portugal, S.A※ 100.00

euro

Teijin Automotive
624 million
Technologies (Tangshan) Co., China※ 100.00

RMB

Production and sales ofComposite products
Production and sales ofComposite products

Ltd.
Production and sales of¥10,000
Teijin Pharma LimitedTokyo

100.00 medicinal drugs and medical
millionequipment

Healthcare

Information provision
Teijin Healthcare Limited¥100 million ※ 100.00

Tokyo

activities for pharmaceuticalproducts and Home healthcare services provider

Teijin Frontier Co., Ltd

Production and sales ofOsaka¥2,000 million

100.00
textiles and others

Nantong Teijin Co., Ltd.

¥4,000 million ※ 100.00

Chinapolyester textile goods

Fibers & Products
Converting

Production and sales of

Teijin Polyester (Thailand)
548 million
LimitedThailand※ 67.61

bahts
J.H. Ziegler GmbH1.02 million
Germany

Production and sales ofpolyester fibers※ 100.00

euro

Production and sales ofunwoven fabrics
Development and sales of

Infocom CorporationTokyo¥1,590 million

57.97
computer software, etc.

IT
Amutus Corporation
Tokyo¥150 million※ 57.97 Internet business
Development, Manufacturing,

Japan Tissue Engineering Co.,
Other

Ltd.

Sales, and Custom
Aichi¥4,959 million

57.72 Development/Manufacturing
for Regenerative Medicine
and Related Products

Note 1: The Teijin Group has 98 consolidated companies including the aforementioned 19 significant subsidiaries; 65 companies
are accounted for via the equity method.
Note 2: ※ indicates the investment ratio including investment by subsidiaries.

29

Note 3: In October 2022, Japan Tissue Engineering Co., Ltd. changed its corporate name (only in Japanese).

(10) Principal Lenders and Amount of Borrowings(As of March 31, 2023)

Principal lenders

Balance of borrowings (millions of yen)

MUFG Bank, Ltd.

140,989

Mizuho Bank, Ltd.

38,059Development Bank of Japan Inc.

25,000Note 1: The balance of borrowed funds includes borrowings from overseas local subsidiary banks.
Note 2: In addition to the above, there is a balance of borrowed funds of 1,044.27 billion yen through syndicated loans, which issignificant borrowing.

2. Matters Regarding the Shares of the Company (as of March 31, 2023)(1) Total number of authorized shares
600,000,000 shares(2) Total number of issued authorized shares 197,953,707 shares(3) Number of shareholders(4) Top 10 shareholders of the Company

95,104

Investment in the Company
Shareholders

Number of shares
held

Shareholding
ratio (%)

1

The Master Trust Bank of Japan, Ltd. (Trust account)

32,910,300

17.11

2

Custody Bank of Japan, Ltd. (Trust account)

12,882,000

6.69

3

Nippon Life Insurance Company

7,045,501

3.66

4The Employee Stock Ownership Association of Teijin

6,588,742

3.42

6,387,100

3.32

3,250,016

1.68

2,898,021

1.50

2,897,287

1.50

2,517,207

1.30

2,470,613

1.28

5
6
7
8
9
10

BNYMSANV AS AGENT/CLIENTS LUX UCITS NON
TREATY 1
SSBTC CLIENT OMNIBUS ACCOUNTSTATE STREET BANK AND TRUST COMPANY
505223
MUFG Bank, Ltd.
THE BANK OF NEW YORK, TREATY JASDECACCOUNTJP MORGAN CHASE BANK 385781

Note1: The shareholding ratio has been calculated after excluding Treasury stocks (5,638,291shares) from the Issued shares.
Note2: Shareholding ratio are truncated to three decimal places(5) Status of shares issued as compensation to company officers during fiscal year 2022
The details of the share-based compensation issued during fiscal year 2022 are as described in "5. Matters Regarding30

Directors and Statutory Auditors (2) Remuneration, etc. for Directors and Statutory Auditors, etc. 6) Matters Regarding
non-monetary remuneration, etc. a) Restricted Stock (RS)" in the notice of convocation for the 157th Ordinary General
Meeting of Shareholders.

3. Matters Regarding Stock Acquisition Rights of the Company(1) Overview of Stock Acquisition Rights as a Stock Compensation-type Stock Option
1) Number of stock acquisition rights
The maximum number of stock acquisition rights to be allocated to Directors during a period of one (1) year starting the
day after the Annual Ordinary General Meeting of Shareholders is held shall be set up to 200.

2) Amount to be paid-in for the stock acquisition rights
The fair value of the stock acquisition rights shall be calculated using the closing price on the allotment date based on theBlack-Scholes model.

3) Number of shares to be issued upon exercise of the stock acquisition rights
The number of shares to be issued upon exercise of one stock acquisition right (hereinafter the “number of shares to be
granted”) shall be 200 shares. However, if the Company conducts a stock split or stock consolidation, or if there are otherunavoidable reasons that require some adjustment, the adjustment shall be made reasonably.

4) Value of property to be invested upon exercise of the stock acquisition rights
The amount of money to be paid-in per share issued or transferred by exercising the stock acquisition rights shall be ¥1,
and the amount of money to be paid-in upon exercise of the stock acquisition rights shall be the said amount multiplied by
the number of shares to be granted.

5) Exercise period of stock acquisition rights
Exercise period shall be 20 years from the allotment date of stock acquisition rights.

6) Restrictions on transfer of stock acquisition right
Any acquisition of stock acquisition rights shall require approval of the Board of Directors of the Company.

7) Main provisions for acquisition of stock acquisition rights
If a proposal for approval of a merger agreement in which the Company becomes the absorbed company, a proposal for
approval of a share exchange agreement in which the Company becomes a wholly-owned subsidiary, or a proposal for sharetransfer is approved at a General Meeting of Shareholders of the Company, the Company can acquire stock acquisitionrights without contribution.

8) Main conditions for exercising stock acquisition rights
Holders of stock acquisition rights may exercise stock acquisition rights for only five (5) years from the date of loss of
position as a Director of the Company, its subsidiary and/or affiliate.

9) Other details pertaining to stock acquisition rights (including other matters from those in 1) – 8) above)
Shall be determined by resolution of the Board of Directors.

(2) Summary of stock acquisition rights as a stock option as of the last day of FY2022 as consideration
for the performance of duties
Number of issuance(Issuance date)

Number of stockacquisition rights

11th stock acquisition

698

rightsClass andnumber of target
sharesCommon shares
139,600 shares

Issuance price(Per share)

Exercise price(Per share)

Exercise period

¥980

¥1

Mar. 15, 2013–Mar. 14,
2033

31

(Mar. 15, 2013)

12th stock acquisition

618

Common shares
123,600 shares¥1,140¥1Mar. 14, 2014–Mar. 13,
2034

379

Common shares
75,800 shares¥1,925¥1Mar. 18, 2015–Mar. 17,
2035

274

Common shares
54,800 shares¥1,800¥1Mar. 16, 2016–Mar. 15,
2036

287

Common shares
57,400 shares¥1,955¥1Mar. 17, 20176–Mar. 16,
2037

294

Common shares
58,800 shares¥1,732¥1

Mar. 16, 20186–Mar. 15,
2038

321

Common shares
64,200 shares¥1,627¥1Mar. 18, 2019–Mar. 17,
2039

266

Common shares
53,200 shares¥1,138¥1Mar. 16, 2020–Mar. 15,
2040

394

Common shares
78,800 shares¥1,725¥1Mar. 15, 2021– Mar. 14,
2041

rights(Mar. 14, 2014)

13th stock acquisitionrights(Mar. 18, 2015)

14th stock acquisitionrights(Mar. 16, 2016)

15th stock acquisitionrights(Mar. 17, 2017)

16th stock acquisitionrights(Mar. 16, 2018)

17th stock acquisitionrights(Mar. 18, 2019)18th stock acquisitionrights(Mar. 16, 2020)

19th stock acquisitionrights(Mar. 15, 2021)

The total number of unexercised stock acquisition rights of the aforementioned stock acquisition rights held by Directors andStatutory Auditors of the Company(As of March 31, 2023)

Director
Number of issuance

Statutory Auditor
Number of
Number of

Number of
directors holding
rightsNumber of units

units

statutory
auditors
holding rights

11th stock acquisition rights

15

1

－

－

12th stock acquisition rights

28

2

－

－

13th stock acquisition rights

37

2

－

－

14th stock acquisition rights

39

3

－

－

15th stock acquisition rights

44

4

7

1

16th stock acquisition rights

59

5

8

1

17th stock acquisition rights

79

5

10

1

18th stock acquisition rights

65

5

8

1

19th stock acquisition rights

935Note 1: Stock acquisition rights are not granted to Outside Directors and Statutory Auditors.
Note 2: The stock acquisition rights held by Statutory Auditors were granted as consideration for the execution of duties as an
Corporate Officer prior to being appointed to the position of Statutory Auditor.

32

4. Corporate Governance System
Overview
The Teijin Group realizes that its basic mission as a company is to ensure sustainable growth in shareholder value. On
this basis, in order to fulfill the Company’s responsibilities to other various stakeholders, the Company is striving tostrengthen corporate governance. Basic elements of corporate governance include the aim of enhancing transparency,
ensuring fairness, accelerating decision-making, and ensuring monitoring and supervision independence. The Company isworking to establish and strengthen an effective corporate governance system through “Advisory Board”, “corporate officer
system and board of directors including independent outside directors” and an “statutory auditor system including
independent outside corporate auditors”.

<Corporate Governance System Chart>(As of March 31, 2023)(1) Reasons for Choosing the Current Corporate Governance System
At the Teijin Group, the corporate governance system will be the one that appears to be optimal for achieving the Company's
objectives at the time. Therefore, it will be reviewed as appropriate according to changes in the current social and legal
environment. In accordance with the current Companies Act, the Board of Directors is required to properly function in termsof both the important business decisions/decision-making and the monitoring and supervision of management functions. The
Company has determined that a governance system centered on the two wheels, “business execution led by the Internal
Directors” and “management oversight and supervisory functions emphasized by the Outside Directors and Audit andsupervisory functions by the Statutory Auditors and the Board of Statutory Auditors”, is appropriate. The Company willcontinue to be a company with a board of statutory auditors for the time being. In addition to the fact that the Statutory
Auditors comprising the Board of Statutory Auditors are independent and can exercise their authority independently, theCompany has granted the Board of Statutory Auditors and the Statutory Auditors “utilization of the maximum source ofmonitoring authority for the Board of Directors”; and by seeking “active and constructive opinions at the Board of Directors,”
the Board of Statutory Auditors continues to have a more effective auditing function for the Board of Directors. As a result,corporate governance similar to the strengthening of monitoring and supervision functions that is aimed for by a company
with a nominating committee, etc., will be substantially achieved at the Company through “the Advisory Board”, “the Board
33

of Directors including Independent Outside Directors and executive officers”. and “the system of statutory auditors including
independent outside corporate auditors.”(2) Outline of Current System
1) Board of Directors
The Board of Directors meets and decides or approves important matters such as the management policy and overallplan of the entire Teijin Group, in addition to the matters stipulated in laws and regulations and the Articles ofIncorporation, and supervise the execution of duties by Directors.
To expedite decision making and clarify accountability of execution of business, the Company’s Articles ofIncorporation set the maximum members of the Board of Directors to 10 Directors, and the Company has introduced a
corporate officer system that delegates broad authority to corporate officers. As of March 31, 2023, the Board of
Directors of the Company comprises 10 members. There are 4 Outside Directors who satisfy all the requirements ofIndependent Director as stipulated by the Company, and one of whom is a female Director. The Articles of Incorporation
sets the term of office for directors at one year.
The chair of the Board of Director is selected from the Outside Directors as part of separation of monitor andsupervision from business execution.

2) Advisory Board
The Advisory Board has been set up with the aim of providing general management advice from a broad and longterm perspective, and is positioned and operated as an advisory board to the Board of Directors. The Advisory Board
deliberates on the following matters and advises the Board of Directors.
a) Matters concerning the company's business plan and strategic direction (including long-term and medium-termplans)b) Matters concerning corporate governance, sustainability, corporate ethics, etc.
c) Matters concerning company performance,d) Matters concerning domestic and foreign politics, economy, and legal systeme) Other matters related to overall management
The Advisory Board includes 5 to 7 outside advisors (currently composed of 4 Outside Directors and 2 non-Japaneseexperts), the Chairperson (vacant if absent), and the CEO as members. The Outside Director, who is the chair of theBoard of Directors, chairs the Advisory Board.

3) Nomination Advisory Committee and Compensation Advisory Committee as consultative bodies
The Nomination Advisory Committee and the Compensation Advisory Committee are established as advisory bodies
to the Board of Directors in order to further improve the transparency of executive personnel. Each Committees has
functions to deliberate on the following matters and make proposals and recommendations to the Board of Directors.
a) Nomination Advisory Committeei) Alternating the CEO and nomination of a successorii) Selection and retirement of the President & Representative Director candidateiii) Selection and retirement of Director candidate (including Chairperson)iv) Selection and retirement of Statutory Auditor candidatev) Matters concerning promotion/demotion, appointment/retirement of Internal Directors and management
executivesvi) Matters concerning independence standards for Outside Director and Outside Statutory Auditorvii) Selection of CEO successor candidates and review of CEO training plans and progress by the CEO for successor
34

candidates, and review of progressb) Compensation Advisory Committeei) Matters concerning the compensation system for the Teijin Group officersii) Matters concerning the remuneration level of the Teijin Group officersiii) Matters concerning performance evaluation and remuneration of Internal Directors (including CEO) andmanagement executives
In principle, for matters concerning the current CEO, the CEO leaves the room and does not participate in thediscussions. For matters concerning the Chairperson as well, the Chairperson leaves the room and does not participate
in the discussions.
Each Advisory Committee is made up of four Outside Directors, the Chairperson (vacant if absent) and the CEO. The
Outside Director, who is the chairperson of the Advisory Committee, chairs respective Advisory Committee.

4) Board of Statutory Auditors
A Statutory Auditor possesses expertise and experience in law, finance, accounting, etc. They audit the performanceof duties by Directors in accordance with their rich expertise and experience. The Board of Statutory Auditors of theCompany comprises 5 Statutory Auditors. There are 3 Independent Outside Statutory Auditors who satisfy all therequirements of Independent Statutory Auditor as stipulated by the Company, and one of whom is a female Statutory
Auditor. In order to enhance the effectiveness of group-wide oversight, the Committee of Teijin Group Statutory
Auditors, which comprises the statutory auditors of the Teijin Group companies and other members, is held regularly.
The Teijin Group Auditors Office, which is under the direct control of full-time Statutory Auditors, has been established
as an organization to assist the duties of Statutory Auditors, and as of March 31, 2023, five (5) full-time staff members
have been assigned.

5) Internal Audit System
The Corporate Audit Department, which reports directly to the CEO, has been established as an internal audit
organization, and carries out Group-wide and global audits to evaluate the efficiency and validity of internal control
functions. Furthermore, at certain listed subsidiaries and so forth, individual internal audit organizations have been
established. As of March 31, 2023, the number of internal auditors in the Teijin Group totaled 20 (excluding internal
auditors at listed subsidiaries and so forth).

6) Status of Accounting Audits
The status of certified public accountants who executed business is as follows. (Items in brackets indicate theaffiliated auditing firms and the number of consecutive years performing audits).
Hidetoshi Fukuda (KPMG AZSA LLC, 4 years), Yoshihiro Uehara (KPMG AZSA LLC, 2 years)
Hiroaki Iwasaki (KPMG AZSA LLC, 2 years)
The status of assistants who executed auditing is as follows.
Certified Public Accountants 14, others 14, for a total of 28.

7) Total Risk Management
The Company has in place a Total Risk Management (TRM) system targeting both strategic and operational risks, as apreventative measure against any risks that the Company may face, and the TRM Committee has been conducting total risk
management. The TRM Committee, chaired by the CEO, serves under the Board of Directors. The Board of Directors
deliberates and decides the basic policy and annual plan related to TRM proposed by the TRM Committee. At the sametime, the Board of Directors formulates the Company’s stance on managing important risks and ensuring business
continuity. Also, the Statutory Auditors conduct audits to check whether the Board of Directors is appropriately conducting
policy decisions, supervising, and monitoring regarding TRM
35

The details of the Teijin Group’s “Corporate Governance Guide” (the Company’s Corporate Governance System) can beviewed on the Company’s Web site: (https://www.teijin.com/ir/management/governance/guide/)(3) Evaluation of the Effectiveness of the Board of Directors
In order to further ensure the effectiveness and enhance the functions of the Board of Directors, the Company conducts
an analysis and evaluation of the effectiveness of the entire Board of Directors (hereinafter, the “Board of Directors
Effectiveness Evaluation”) once a year. The method of the Board of Directors Effectiveness Evaluation for FY2022 and an
outline of the results are as follows.

1) Analysis and Evaluation Methoda) A named self-evaluation questionnaire was conducted for all Directors and Statutory Auditors (15 including Outside
Directors and Outside Statutory Auditors), referencing advice from external experts. In addition, interviews wereconducted for certain Directors and Statutory Auditors (in total 4 persons) by external experts based on the selfevaluation questionnaires, with the aim of delving into management issues that should be discussed by the Board of
Directors and formulating specific action plans for addressing the issues. Furthermore, with the assistance of external
experts, the Board of Directors secretariat created a summary of the questionnaire and interview results, which formed
the basis of a discussion within the Board of Directors regarding the effectiveness of the Board of Directors, issues
to be addressed, and improvement measures.
b) The evaluation points in the questionnaire (consisting of 39 questions) were compiled from the following eight fields.
Respondents evaluated 39 points on a four-step scale and made comments (including any additional comments field).
i) Strategies and execution thereofi i) Risk and crisis managementiii) Corporate ethicsiv) Performance monitoringv) Organization and business restructuring-related transactionsvi) Management team evaluation, compensation, and succession planningvii) Stakeholder dialogueviii) Composition and operation of the Board of Directors

2) Outline of Results of the Board of Directors Effectiveness Evaluationa) Summary
The results of the Board of Directors Effectiveness Evaluation conducted in line with the above process found that
there is no issue with the current corporate governance system and its implementation, and the Company’s Board of
Directors is generally functioning properly and ensuring effectiveness.
In addition, the questionnaire results also indicated that there was a high ratio of positive evaluations for all items.

b) Status of response to issues recognized up to FY2022
i) Discussions on business creation utilizing data and digital technology
At the Board of Directors meetings held in FY2022, with respect to the use of digital and IT technologies, whichis positioned as one important measure for the creation of innovation, the progress and issues with themes such as
the acquisition and application of advanced technologies, including AI, and the building of a next-generation user
environment were reported and discussed. Discussions need to be carried out on the direction of data and digitalstrategies in the Group overall and on the future injection of resources. The Company also confirmed plans to36

continue discussions in line with the new medium-term management plan, scheduled to be disclosed in FY2024.
ii) Discussions on business portfolio
At the Board of Directors meetings held in FY2022, amid discussions on the new medium-term management plan,
the Company embodied the long-term vision, which is the vision aimed for by the Teijin Group, and also held
discussions concerning the business portfolio after clearing up the positions of existing businesses. Amid these
discussions, the Company confirmed it was necessary to broadly review the Company strategies, mainly the“Strategic Focus” areas. The Company has temporarily put a halt to “Strategic Focus” and “Profitable Growth” areas,
and in FY2023 have decided to pour energies into structural reforms in the composites, aramid and healthcare
businesses. The Company plan to continue to carry out discussions concerning the business portfolio, including new
growth strategies ahead of the new medium-term management plan, which is scheduled to be disclosed in FY2024.
iii) Discussion on rationality of parent-child listing
At the Board of Directors meetings held in FY2022, the Company rationally discussed maintaining the listing of
Infocom Corporation and Japan Tissue Engineering Co., Ltd. (J-TEC), which are listed subsidiaries of the Company.
From the standpoint of optimizing the corporate value of Infocom and J-TEC, and not just the Group itself, theCompany decided it was rational to maintain their listing. It is necessary to regularly confirm the listing of the parent
and its subsidiaries. At the Board of Directors meetings in FY2023, the Company plans to continue rationallydiscussing maintaining listings on the stock exchange.
iv) Discussion on BCP including supply chain
At the Board of Directors meetings held in FY2022, amid regular reports to the Board of Directors by the TRM
Committee, which is chaired by the CEO, concerning strategic risk and operational risk, there was a report that themaintenance of customer-oriented BCP/BCM by business, in particular the Materials Businesses, was being
conducted. The Company confirmed its as necessary realize the situation, including the schedule, for further
promotion. The Company therefore plans to continue to carry out confirmation through discussions.
v) Discussion on allocation of management resources to human capital / intellectual property, etc.
At the Board of Directors meetings held in FY2022, with respect to human capital, activities pertaining to global
talent management, corporate culture reforms, and enhancing engagement with the Teijin Group were reported anddiscussed. In addition, as a non-financial indicator for Diversity & Inclusion, the Company sets goals for FY2030
regarding the number of female directors and non-Japanese directors. In addition, the Company reported anddiscussed intellectual properties. Taking into account the changing environment surrounding intellectual properties,
the Company plans to establish issues that should be tackled, and strengthen intellectual properties and the global
management of intellectual properties based on the Company’s business portfolio. The Company is continuing tocarry out confirmation of ongoing discussions that are in line with the new medium-term management plan, whichis scheduled to be disclosed in FY2024.

3) Issues Recognized in the Evaluation of the Effectiveness of the Board of Directors at the end of
FY2022 and Initiatives Going Forward
In FY2023, factoring in the effectiveness evaluation implemented at the end of FY2022, as a result of discussions by the
Board of Directors, in particular the following items which were recognized as issues, will be handled further along withdiscussions related to the new medium-term management plan.

a) Discussions on business portfolio
Discussion on the allocation of management resources to human capital, etc. based on the 2) b) i) above
Discussion on the status of usage and handling policies at businesses regarding data and digital technology, etc. based37

on the 2) b) i) aboveb) Discussion on BCP including supply chainc) Discussion on rationality of parent-child listing

The Company aims to increase the effectiveness of the Board of Directors and further strengthen corporate governancethrough these measures.

4) Basic Policy Concerning Cross-Shareholdingsa) Basic Policy Concerning Cross-Shareholdings
The Company holds shares of issuing companies that it has determined to be instrumental in increasing its corporate
value over the medium to long term, with the objective of maintaining and strengthening transactions and promoting
business alliances with them.
The Board of Directors regularly reviews whether or not it is appropriate to hold shares based on an examination of theholding purpose and rationality for each individual stock from a medium- to long-term perspective.
In these reviews, the Board of Directors takes into account a comprehensive range of factors, including significance froma management strategy standpoint and business relationships, in addition to comparing dividends, transaction amounts, andother quantitative impacts against the cost of capital.
After these reviews, the shares for which the purpose of holding has diminished are liquidated, in principle. Through thisprocess, the Company endeavors to reduce cross-shareholdings.
b) Standards for the Exercise of Voting Rights Related to Cross-Shareholdings
In exercising voting rights related to shares that the Company has decided to hold, the Company confirms each proposal
from the perspective of increasing corporate value and shareholder value over the medium to long term and determines
whether to vote for or against.

5. Matters Regarding Directors and Statutory Auditors(1) Directors and Statutory Auditors(As of March 31, 2023)
PositionName

Duty, state of significant positions

Participation in the

concurrently held at other companies

Board of Directors andBoard of Statutory
Auditors

Chairperson and Member ofthe Board
President and Representative
Director

The Board of Directors

Jun Suzuki

Akimoto Uchikawa

13/13(100%)
CEO (Chief Executive Officer)

13/13(100%)
CFO (Chief Financial Officer)

Senior Executive Officer,

The Board of Directors

Representative Director of the Akihisa Nabeshima

The Board of Directors
13/13(100%)

Board
Executive Officer, Director

Toshiya Koyama

Chief Social Responsibility Officer

The Board of Directors

Responsible for the Corporate Audit

13/13(100%)

Department

38

Executive Officer, Director

Eiji Ogawa

Executive Officer, Director

Naohiko Moriyama

Director

Yukako Uchinaga

Director

Yoichi Suzuki

Director

Masaru Onishi*Director

Masaaki Tsuya

President, Material Business of Teijin

The Board of Directors

Group

13/13(100%)

Chief Officer, Corporate Strategy

The Board of Directors
13/13(100%)

Chairperson and Representative Director of
the Japan Womenʼs Innovate Network (JWin) (NPO)President & CEO, Globalization ResearchInstitute Co., Ltd.
Outside Director, SINTOKOGIO, LTD.
Outside Director, Nippon Telegraph andTelephone Corporation (NTT)The Board of Directors

Outside Director, KAJIMA

The Board of Directors

CORPORATION

13/13(100%)

Outside Director, Mitsui O.S.K. Lines, Ltd.
Outside Director, Kadoya Sesame Mills
Incorporated
Outside Director, Benesse Holdings, Inc.

The Board of Directors

External Advisor, Bridgestone Corporation

The Board of Directors

13/13(100%)

13/13(100%)

10/10 (100%)
The Board of Directors
Full-time Statutory Auditor

Masanori Shimai
13/13 (100%)
The Board of Statutory
Auditors 12/12 (100%)
Statutory Auditor, Infocom Corporation

Full-time Statutory Auditor

The Board of Directors

Akio Nakaishi
13/13 (100%)
The Board of Statutory
Auditors 12/12 (100%)

Statutory Auditor

Gen Ikegami

Representative, Gen Ikegami Certified
Public Accountant Office, Certified Public
Accountant
Outside Director, TAC Co., Ltd.

The Board of Directors
13/13(100%)
The Board of Statutory
Auditors 12/12(100%)

Statutory Auditor

Hitomi Nakayama

Partner lawyer, KASUMIGASEKI-SOGO
LAW OFFICES
Outside Director, ROYAL HOLDINGS Co.,Ltd

The Board of Directors
13/13(100%)
The Board of Statutory
Auditors 12/12(100%)

Statutory Auditor

Project Professor, Graduate School of

The Board of Directors

Public Policy, the University of Tokyo

13/13(100%)

Jun Arima
The Board of Statutory
Auditors 12/12(100%)

Note 1: The Director marked with * was newly elected at the 156th Ordinary General Meeting of Shareholders held on June 22,
2022.
Note 2: There are no important interests between the Company and any of the entities at which the above mentioned Outside
Directors hold positions as director/statutory auditor etc.
Note 3: There are no important interests between the Company and any of the entities at which the above mentioned Outside

39

Statutory Auditors hold positions as director/statutory auditor etc.
Note 4: Of the Directors, Yukako Uchinaga, Yoichi Suzuki, Masaru Onishi and Masaaki Tsuya are Outside Directors. The Company
requires the candidate for Outside Director to satisfy the requirements of “Independent Director” stipulated by the Company.
The aforementioned four (4) Directors satisfied all such requirements and maintained their independence throughout FY2022.
Since they also satisfy the requirements of independence as stipulated by Tokyo Stock Exchange Group, Inc., they wereregistered by the Company as “Independent Statutory Auditor” at Tokyo Stock Exchange. The contents of the requirementsof“Independent

Director”

stipulated

by

the

Company

canbeviewedattheCompany’s Web

site:(https://www.teijin.com/ir/management/governance/requirements/)
Note 5: Three (3) Statutory Auditors— Gen Ikegami, Hitomi Nakayama and Jun Arima—are Outside Statutory Auditors. The
Company requires the candidate for Outside Statutory Auditor to satisfy the requirements of “Independent Statutory Auditor”
stipulated by the Company. The aforementioned three (3) Statutory Auditors satisfied all such requirements and maintained
their independence throughout FY2022. Since they also satisfy the requirements of independence as stipulated by Tokyo
Stock Exchange Group, Inc., they were registered by the Company as “Independent Director/Auditor” at Tokyo Stock
Exchange. The contents of the requirements of Independent Auditor” stipulated by the Company can be viewed at theCompany’s Web site: (https://www.teijin.com/ir/management/governance/requirements/).
Note 6: Full-time Statutory Auditor Masanori Shimai and Statutory Auditor Gen Ikegami have ample knowledge of finance andaccounting as described below:
Full-time Statutory Auditor Masanori Shimai has been involved in finance and accounting-related work for many years at
the finance and accounting-related departments of the Company.
Statutory Auditor Gen Ikegami is qualified as Certified Public Accountant.
Note 7: Statutory Auditor Hitomi Nakayama is qualified as a lawyer and has ample knowledge of compliance and risk management.
Note 8: The following Director retired as of June 22, 2022.
Director

Fumio Ohtsubo

Note 9: Changes in posts and duties of Directors during FY2022 are as follows.

Name

Jun Suzuki

New Post

Former Post

Chairperson and Member of theRepresentative Director of the

Board

Board
President & CEO (Chief Executive

Date of transfer

April 1, 2022

Officer)

Akimoto Uchikawa

Representative Director of the

Executive Officer, Director

Board

President, Material Business of Teijin

President & CEO (Chief

Group

April 1, 2022

Executive Officer)

Akihisa Nabeshima

Senior Executive Officer,

Executive Officer, Representative

Representative Director of the

Director of the Board

Board

CFO (Chief Financial Officer)

April 1, 2022

CFO (Chief Financial Officer)

Eiji Ogawa

Executive Officer, Director

Executive Officer, Director

President, Material Business ofChief Officer, Corporate Strategy

April 1, 2022

Teijin Group
Naohiko Moriyama

Executive Officer, Director

Executive Officer, Director

President, Healthcare BusinessPresident, Healthcare Business of40

April 1, 2022

of Teijin Group

Teijin Group and General
Manager, Healthcare New
Business Division

Executive Officer, Director

Executive Officer, Director

Chief Officer, Corporate

President, Healthcare Business ofStrategy

Teijin Group

October 1, 2022

Note 10: Changes in posts and duties of Directors following FY2023 are as follows.

Name

New Post

Former Post

Senior Advisor and Member ofChairperson and Member of thethe Board

Board

Mission Executive and Member

Senior Executive Officer,

Akihisaof the Board

Representative Director of theNabeshima

Assistant to the President

Board

Jun Suzuki

Date of transfer
April 1, 2023

April 1, 2023

CFO (Chief Financial Officer)

Toshiya Koyama

Eiji Ogawa

Mission Executive and Member

Executive Officer, Director,of the Board

Chief Social Responsibility

Assistant to Chief Sustainability

Officer

Officer (for Safety Promotion

Responsible for Corporate Audit

Project)

Department

Senior Executive Officer,

Executive Officer, Director

Representative Director of the

President, Material Business ofBoard

Teijin Group

CFO (Chief Financial Officer)

April 1, 2023

April 1, 2023

Responsible for the Procurement andLogistics Division

Senior Executive Officer,

Executive Officer, Director

NaohikoDirector

Chief Officer, Corporate

Moriyama

Chief Officer, Corporate

Strategy

April 1, 2023

Strategy
Note 11: The Company has executed a limited liability agreement with each of five (5) Directors, Jun Suzuki, Yukako Uchinaga,
Yoichi Suzuki, Masaru Onishi and Masaaki Tsuya, and each of five (5) Statutory Auditors, Masanori Shimai, Akio Nakaishi, Gen
Ikegami, Hitomi Nakayama and Jun Arima, which limits the respective liabilities of each Outside Director and Statutory Auditor
to the higher amount of ¥20 million or the minimum amount of liability set forth in Article 425, Paragraph 1, of the Companies
Act.
Note 12: The Company has concluded a directors and officers liability insurance contract an insurance company for its directors, etc. as stipulated
in Article 430-3, Paragraph 1 of the Companies Act. The scope of the insured parties under the insurance contract includes Directors, Statutory
Auditors, Executive Officers and Corporate Officers of the Company and Directors and Statutory Auditors of Teijin Pharma Limited. Under said
insurance contract, legally mandated amount of indemnification and litigation expenses arising from the insured’s assumption of liability during
the insurance period, or receipt of claims pertaining to the pursuit of such liability, caused by the performance or omission of his or her duties, will
be covered. However, claims for damages caused by willful misconduct or gross negligence will not be covered. Note that the full amount of theinsurance premiums is shouldered by the Company and Teijin Pharma Limited.

41

(2) Remuneration, etc. for Directors and Statutory Auditors, etc.
1) Method of Determining the Policy for Establishing the Content of Remuneration, etc., forIndividual Directors, and Overview of the Policy
The outline of the content of the decision policy regarding the content of individual remuneration, etc. of our
Directors is as follows. Note that said decision policy is decided by a resolution of the Board of Directors after
deliberation by the Compensation Advisory Committee.
The activities of the committee, etc. for deliberations and decisions regarding remuneration of Directors in FY2022 are
as follows.
The Board of Directors met 5 times and the Compensation Advisory Committee met 9 timesa) Basic policy for remuneration systemsi) The system should enhance awareness of contributing to a medium- to long-term increase in earnings andcorporate valueii) The system should be closely linked to company results, and be highly transparent and objectiveiii) The system should be primarily focused on enhancing value shared with the interests of stakeholders andshareholder-focused management awarenessiv) The system should maintain sufficient remuneration levels and remuneration content to act as an incentive tosecure high-quality management human resourcesb) Remuneration level
The remuneration level for Internal Directors and Outside Directors is determined each year after verifying theappropriateness of the level of total remuneration for each position based on the results of a remuneration survey
conducted each year among major corporations where the globalization of executives is progressing in Japan eachyear.
c) Composition of remuneration, etc. for Directors and Statutory Auditorsi) Internal Director remuneration (excluding Chairperson and Senior Advisor) is composed of fixed basic remuneration(cash) that is not linked with the performance of the Company and “Restricted Stock” (medium- to long-term incentive
remuneration), and variable performance-based remuneration (short- term incentive remuneration) and "Performance
Share Units” (medium- to long-term incentive remuneration), with the aim of instilling awareness of short-term
achievement of performance goals, achievement of the medium-term management plan, and providing an incentive
toward medium- to long-term improvement in corporate value.
ii) Remuneration for Chairperson, Senior Advisor, Outside Directors, and Statutory Auditors is solely fixed
remuneration, and not linked with the performance of the Company.
d) Composition ratio of remuneration
For Internal Directors (excluding Chairperson and Advisor), the composition ratio is as follows.
Position

President & CEO
Representative
Director,
Other directors

Fixed remuneration

Variable remuneration
Performance-based
remuneration (Cash)Basicremuneration(Cash)

Restricted Stock
(RS)

45%

10%

20%

25%

100%

50%

10%

25%

15%

100%

e) Performance indicators for variable remunerationi) Performance-based remuneration (Cash)42

Performance
Share Units
(PSU)

Total
remuneration

The earnings performance indicators for FY2022 presented in the medium-term management plan for 2020–2022,“ALWAYS EVOLVING,” have been selected as yardsticks for consolidated ROE, which is a profitability indicator,
consolidated EBITDA, which is a growth indicator, and ROIC based on consolidated operating income, which isan indicator of efficiency of generating profits relative to capital invested. Their selection will motivate each
Director to improve the KPIs.
ii) Performance Share Units (PSU)
The targets for FY2022 are shown in the table below. While aligning targets with the medium-term management
plan, TSR, from the viewpoint of stakeholders, and the indicators of 1) Changing Portfolio and 2) Diversity andInclusion from the viewpoint of sustainable growth and ESG (Environment, Social, Governance), will be also be
employed. See below Table for indicators and targets, etc. for the period of the medium-term management plan for
2020-2022, “ALWAYS EVOLVING” (Limited to FY2021 and FY2022; hereinafter “initial target period”).

The initial performance evaluation period and performance indicators. of Performance Share Unit (PSU)
Evaluation
indicators

Targets

Consolidated ROE
Consolidated
EBITDA
TSR

10% or higher
FY2022: ¥150.0 billion or
more
The Company’s TSR >=Benchmark TSR
1) FY2022: Strategic Focus
EBITDA>=15%

Nonfinancial
indicators
1) Changing
Portfolio
2) Diversity andInclusionComposition ratio ofstandard amounts ofshare-based
remuneration (Annual
amount)40%
40%

Performance
evaluation
periodTiming of shareallotment

One year
Two years

Annually
The year after the final
year of the medium- term
management plan (Bymultiplying the number
of
years
in
the
performance evaluation
period during the processof calculating the numberof shares to be allotted,
the number of shares tobe allotted for the
performance evaluation
period is calculated at
once)

10%
10%

2) More than six female
executives and six nonJapanese executives in
FY2022 (* “Executives”
includesExecutive
Officers and Corporate
Officers)f) Policy on determining the timing and conditions for providing remunerationi) Fixed remuneration:
・Basic remuneration (Cash)
The amount paid to each Director is determined according to their position and paid as a fixed amount. 1/12 of the
fixed amount by position is provided as monthly remuneration.
・Restricted Stock (RS)Maximum annual amount, ¥70 million (maximum annual number, 50,000 shares); and around July or August of
every year, a certain number of shares determined by position will be allotted with transfer restrictions and otherconditions within the scope of approval determined via a resolution of the General Meeting of Shareholders.
Restricted Stock (RS) will be allotted each Internal Director (excluding Chairperson and Senior Advisor) on thecondition that he or she meets the requirements that are required by Board of Directors.
ii) Variable remuneration:・Performance-based remuneration (Cash)Calculated depending on position, the achievement level for the earnings performance indicators, and in accordancewith the individual performance evaluation of a Director, and paid out by the end of June as a year-end lump sum.
43

Additionally, new performance evaluation periods and performance evaluation indicators will be subsequently set
within the scope that has received approval via a resolution of the General Meeting of Shareholders.
・Performance Share Units (PSU)
Maximum annual amount is ¥300 million (Maximum annual number, 200,000 shares), and around July or Augustof every year, the number of shares calculated depending on the target achievement of one or multiple performanceindicators set by the Board of Directors applicable to performance evaluation periods comprised of one or multiple
fiscal years will be allotted after conclusion of the evaluation performance period set for each performance indicatorwith transfer restrictions and other conditions within the scope of approval determined via a resolution of the General
Meeting of Shareholders. Additionally, even after the conclusion of the initial performance evaluation period, newperformance evaluation periods and performance evaluation indicators will be subsequently set within the scope thathas received approval via a resolution of the General Meeting of Shareholders.
If the conditions that are required by Board of Directors are met after the end of the performance evaluation period,“Performance Share Units” (PSU) will be allotted to each Internal Directors (excluding Chairperson and Senior
Advisor)g) Matters regarding delegation of determining remuneration, etc. for individual Directors
No applicable matters.
h) Other significant matters regarding determining the content of individual remuneration, etc.
Remuneration for members of the Board of Directors shall be decided after being deliberated by the Compensation
Advisory Committee, being proposed to the Board of Directors and after full consideration of the proposal by the Boardof Directors.

2) Reasons the Board of Directors Determined the Content of Remuneration, etc., for Individual
Directors for FY2022 in Conformity with the Decision Policy
In determining the content of remuneration for an individual director, consideration is given to alignment with decision
policy regarding the drafting of the proposal by the Compensation Advisory Committee. In light of this, the Board of
Directors also basically gives full consideration to said proposal and determines whether it is in line with the decision
policy.
3) Resolutions of the General Meeting of Shareholders Regarding on Remuneration, etc. for Directors and Statutory
Auditors, etc.
The amount of monetary remuneration, etc. for the Directors of the Company shall be 630 million yen or less per year(of which 100 million yen or less per year is for Outside Directors), and the total amount of remuneration for granting
Restricted Stock (RS) shall be 70 million yen per year (maximum annual number 50,000 shares). For the allotment of
Performance Share Units, the total maximum annual amount shall be 300 million yen (maximum annual number 200,000
shares). These amount of monetary remuneration, etc. was resolved by 155th Ordinary General Meeting of Shareholders
held on June 23, 2021. As of the conclusion of the Ordinary General Meeting of Shareholders in June 2021, the number
of Directors totaled 10 (including 4 outside Members of the Boards).
At the 133rd Ordinary General Meeting of Shareholders held on June 25, 1999, it was resolved that the maximum amountof remuneration for Statutory Auditor of the Company shall be 12 million yen per month. As of the conclusion of theOrdinary General Meeting of Shareholders in June 1999, the number of Statutory Auditor after the conclusion the Ordinary
General Meeting was five.

4) Remuneration for Directors and Statutory Auditors, etc. for FY2022
44

(persons; millions of yen)
Total amount of remuneration, etc., by type
Total amount of
remuneration

Basic

Performance-

Restricted

Performance

Numberremuneration

based

Stock (RS)Share Unitsapplicable(Cash)

remuneration(PSU)

officers(Cash)
Directors (Excluding

345

292

14

39

－

(Note 1)

(Note 2)

(Note 3)－－－(Note 4)(Note 4)(Note 4)

－

－

－

6
Outside Directors)
Outside Directors

72

72

5
Statutory auditors

75

75(Excluding Outside
2
Statutory Auditors)（Note5）
Outside Statutory

41

－

41

－

－
3

Auditors（Note5）
Note 1: Performance-linked remuneration(cash) of 14 million yen is scheduled to be paid by the end of June 2023 to the five (5) Internal
Members of the Board, six (6) Internal Members of the Boards minus the Chairperson, who were appointed at the 156th Ordinary
General Meeting of Shareholders held on June 22, 2022.
Note 2: The restricted stock compensation of 39 million yen was paid in July 2022 to the five (5)Internal Members of the Board, Six (6) Internal
Members of the Boards minus the chairperson, who were appointed at the 156th Ordinary General Meeting of Shareholders held on
June 22, 2022. The amount of compensation for the granting of Restricted Stock (RS).
Note 3: Given the targets for FY2022 were not achieved for all performance evaluation indicators against the target values for each fiscal year
which is described in the performance evaluation indicators of the table of the “The initial performance evaluation period andperformance indicators of Performance Share Unit (PSU)” of 1) e) ii), compensation for Performance Share Unit was not granted.
For details on director remuneration, refer to the 1) Method of Determining the Policy for Establishing the Content of Remuneration,etc., for Individual Directors, and Overview of the Policy.
Note 4: Performance- based remuneration, the Restricted Stock, and the Performance Share Units will not be granted to Outside Directors.
Note 5:Remuneration, etc. of Statutory Auditor is determined through discussions with Statutory Auditor.

5) Matters Regarding Performance-based Remuneration, etc.
a) Performance-based remuneration (Cash)After selection of the three (3) indicators in 1)e)i) as an earnings performance indicator, the amount of performance-based
remuneration for each individual Director was calculated based on the degree of achievement of the target value or the
degree of achievement of the budget and the performance evaluation of individual Directors.
The actual performance evaluation indicators for FY2022 showed that consolidated ROE, consolidated EBITDA andconsolidated ROIC based on consolidated operating income all underperformed. Consequently, the payment rate ofperformance-linked remuneration in FY2022 will be 13-19% of the standard amount of performance-based remuneration(the amount paid when all standard target values are achieved for each performance evaluation indicator).

Evaluation indicators

TargetResultConsolidated ROE

10%

△4.1%
45

of

Consolidated EBITDA¥125.0 billion¥87.8 billion

6%

1.6%

Consolidated ROIC
based on consolidated
operating income
Note 1: The standard target values for consolidated EBITDA and consolidated ROIC based on consolidated operating income used to
calculate performance-linked remuneration are the figures announced at the beginning of the term (announced in May 2022).
Note2: The standard target value for consolidated net income ROE is set at 10% based on the target of 10% or more set forth in theMedium-erm management plan 2020-2022 “ALWAYS EVOLVING.”b) Performance Share Units (PSU)ⅰ)Contents of performance evaluation indicators and reasons for selection:
As described in 1) e) ii).
ⅱ)Amount or calculation method of performance Share Unit:
The Company will calculate the number of shares to be granted according to the degree of achievement of thetargets for each fiscal year. The target for each fiscal year is specified in the table of the “The initial performance
evaluation period and performance indicators of Performance Share Unit (PSU)” of 1) e) ii).
ⅲ) Results for earnings evaluation indicators
The results are shown in the table below. The goal for consolidated ROE was 10%, and the goal for consolidated
EBITDA was 150.0 billion yen-plus. In FY2022, these indicators fell short of their goals. In addition, TSR andnon-financial indicators were also shy of goals. In light of this, The Performance Share Units were not granted
for the duties executed in the FY2022 evaluation period.

Evaluation
indicators

Targets

ResultComposition ratio ofstandard amounts of

Performanc

share-based
remunerationeevaluation(Annual amount)periodOne year

Consolidated ROE

10% or higher

△4.1%

40%

Consolidated
EBITDAFY2022: ¥150.0 billion or more

¥87.8
billion40%

The Company’s TSR >=Underperfo

Benchmark TSR

rmed goal

TSR
1)
Nonfinancial
indicators
1)Changing
Portfolio2)Diversity andInclusion

2022:

Strategic

10%

Focus

EBITDA>=15%

Two years2) More than six female executives
and six non-Japanese executives

Underperfo
rmed goalin FY2022 (* “Executives”
includes Executive Officers andCorporate Officers)

6) Matters Regarding non-monetary remuneration, etc.
a) Restricted Stock (RS)The content of stock compensation granted in FY2022 is as follows.
46

10%

Business
Directors(excluding

OutsideClass and number of shares

Number of Persons

Ordinary shares of the Company

5

Directors)

27,972 shares

Note: The above stock compensation was not granted to the Chairperson, Outside Directors and Statutory Auditors.

The outline of the conditions attached when the shares were allotted is as described in 1) f) i).

b) Performance Share Units (PSU)
As described in 5) b).

7) Review of Performance Indicators in FY2023
The Company plans to review performance indicators for variable remuneration, considering FY2023 as a period to executeprofitability improvement ahead of a future return to growth.
a) Performance-based remuneration (Cash)In FY2023, the Company plan to steadily implement the profitability improvement measures promoted in the “TeijinGroup Reforms for Profitability Improvement” ahead of a future return to growth. To this end, the Company are
motivating Directors to realize an improvement in profitability by setting performance indicators for individual
performance-linked compensation, including “consolidated ROE,” “operating income” and non-financial indicators(Group CO2 emissions, rate of lost-worktime injuries, Diversity & Inclusion and degree of employee satisfaction) thatare standard for all Directors.
b) Performance Share Units (PSU)
To motivate Directors to realize an improvement in corporate value and shareholder value in the medium/long term,
the Company is employing “consolidated ROE,” “consolidated ROIC based on operating income” and “TSR” asperformance indicators for PSU in FY2023.
The set targets for “consolidated ROE” and “consolidated ROIC based on operating income” should be aimed for in
the medium term. The Company continues to employ “TSR” as a performance indicator to build awareness among
management from the perspective of the stakeholders.

The performance indicators and targets in a) and b) above only apply to FY2023. Even after the conclusion of said period,
we plan to set a new performance evaluation period and performance indicators within the scope that was approve at theGeneral Meeting of Shareholders.

(3) Outside Directors and Outside Statutory Auditors

1) Significant Concurrent Positions and the relation between the Company and the entities at which
Outside Directors and Outside Statutory Auditors hold such positions.
This is as stated in “(1) Directors and Statutory Auditors in 5. Matters Regarding Directors and Statutory Auditors”.

2) Main Activities in FY2022a) Outside Directors
Board of Directors meeting attendance is as stated in “(1) Directors and Statutory Auditors in 5. Matters Directors andStatutory Auditors”.

47

Name

Status of Statements Outline of duties performed regarding the roles expected ofoutside directors
・She offered valuable comments from her wealth of business experience, outstanding
insights in the IT field, and a deep understanding of diversity at appropriate
opportunities as well as the Board of Directors Meeting.
・As a member of the Advisory Board, she conducts deliberations on important

Yukakomatters for management overall.

Uchinaga

・ As a member of the Nomination Advisory Committee, she made beneficial
statements in selecting candidates for Directors and top executive officers.
・As the Chair of the Compensation Advisory Committee, she made appropriate
statements regarding reform to the director remuneration system, and evaluation of
the performance of the CEO and Directors.
・He offered valuable comments from his expertise and knowledge of international
economic and trade issues etc. cultivated over many years as a diplomat at appropriate
opportunities as well as at the Board of Directors Meeting.
・As a member of the Advisory Board, he conducts deliberations on important matters

Yoichi Suzuki

for management overall.
・As the Chair of the Nomination Advisory Committee, he made beneficial statements
in selecting candidates for directors and executive officers.
・As a member of the Compensation Advisory Committee, he made appropriate
statements regarding reform to the Director remuneration system, and evaluation of
the performance of the CEO and Directors.
・He offered valuable comments from his extensive management experience andknowledge at appropriate opportunities as well as at the Board of Directors Meeting.
・He serves as Chair of the Board of Directors as part of separation of monitoring andsupervision, and execution. He vitalizes the Board of Directors of the Company andendeavors to secures effectiveness and improve function of the Board of Directors of
the Company.

Masaru Onishi

・As the Chair of the Advisory Board, he conducts deliberations on important mattersfor management overall.
・ As a member of the Nomination Advisory Committee, he made beneficial
statements in selecting candidates for directors and executive officers.
・As a member of the Compensation Advisory Committee, he made appropriate
statements regarding reform to the Director remuneration system, and evaluation of
the performance of the CEO and Directors.

48

・As management , offered beneficial comments based on his rich experience andinsights.
・As a member of the Advisory Board, he conducts deliberations on important mattersfor management overall.
Masaaki Tsuya

・ As a member of the Nomination Advisory Committee, he made beneficial
statements in selecting candidates for directors and executive officers.
・As a member of the Compensation Advisory Committee, he made appropriate
statements regarding reform to the Director remuneration system, and evaluation of
the performance of the CEO and Directors.

b) Outside Statutory Auditors

Board of Directors and Board of Statutory Auditors meeting attendance is as stated in “(1) Directors and Statutory
Auditors in 3. Matters Regarding Directors and Statutory Auditors”
Name
Gen Ikegami
Hitomi
Nakayama
Jun Arima

Status of Statements
He offered valuable comments from his professional knowledge as a Certified Public
Accountant.
She offered valuable comments from her professional knowledge as lawyer, andoffered, in particular, advice and suggestions concerning compliance and risk
management of the Company.
He offered valuable advice and suggestions regarding the environmental managementthat the Company has aimed for, including maintaining and improving compliance.

6. Matters Concerning the Accounting Auditors(1) Name of the accounting auditor
KPMG AZSA LLC(2) Compensation(Millions of yen)
Details

M one t a r y a m o un t

1) The amount of compensation the Company should pay the Accounting Auditor

2112) The total amount of monetary or other economic benefit to be paid by the Company and its

358
subsidiaries to the Accounting Auditor
Note 1: Since in the audit contract between the Company and the Accounting Auditor there is no clear division between the amountof remuneration for audits under the Companies Act and the amount of remuneration for audits under the Financial Instruments
and Exchange Act, the amount of remuneration in 1) is the total amount of both said remunerations.
Note 2: Nine important subsidiaries of the Company, including Teijin Aramid B.V., of the Company’s significant subsidiaries wereaudited by an auditing firms other than KPMG AZSA LLC.
Note 3: The Company paid the accounting auditor for “accounting advisory services, etc.,” which are not included in the operations
stated in Article 2, Paragraph 1 of the Certified Public Accountants Act.

49

Note 4: The Board of Statutory Auditors, taking into account the scale and attributes of the Company, confirmed and examined thecontent of the accounting auditor’s audit plans, the accounting auditor’s execution of duties and the basis for its calculation of
remuneration estimates. Consequently, in accordance with Article 399, Paragraph 1 of the Companies Act, the Statutory
Auditors consented to the remuneration for the Accounting Auditor.

(3) Decision Policy for the Dismissal or Non-reappointment of the Accounting Auditor
It is the policy of the Company that the Board of Statutory Auditors will dismiss an accounting auditor in accordance withthe consent of all Statutory Auditors when it is determined to fall under any of the items in Article 340, Paragraph 1 of theCompanies Act.
Also, in addition to the above, it is the policy of the Company to submit to the General Meeting of Shareholders any
proposal for dismissal when it is recognized that the situation has arisen at the Accounting Auditor that triggers a serious
hinderance to auditing operations at the Company, or a proposal for non-reappointment when it is recognized there is needfor change given the independence, credibility or execution of duties on the part of the Accounting Auditor, in accordancewith a decision by the Board of Statutory Auditors.

7. Policy on Determining Dividends from Retained Earnings, etc.
Taking into account its pledge to payout “stable and sustainable dividends,” the Company will flexibly conduct the
repurchasing of its own shares, etc. depending on the situation. The Company aims to boost the Company’s dividends in linewith earnings performance. The Company are targeting a consolidated payout ratio of 30% of profit attributable to owners ofparent for the medium term.
◎ Dividends from retained earnings in FY2022: At the Board of Directors meeting held on May 11, 2023, the Company
decided the following for the fiscal year-end dividend for the 157th fiscal period. Reflecting this, the Company’s annual
dividend will be 40 yen per share, which includes an interim dividend of 27.5 yen per share, which was implemented on
December 1, 2022.
Fiscal year-end dividend: 12.5 yen per share
Date the dividends from retained earnings takes effect: May 31, 2023 (Wednesday)

8. Summary of a System to Secure Proper Operations and the Status of Use of Said System(1) Resolutions on Basic Systems for Internal Control
The Company adopted the “Resolutions on Basic Systems for Internal Control” at the Board of Directors meeting held on
March 31, 2023. The content of the resolutions is uploaded to the Company’s website(https://www.teijin.com/ir/management/governance/resolution/). A summary is as follows.
(Note that the resolutions passed at the Board of Directors meetings held on March 31, 2023, were passed based on theorganizational names, etc. current at the time. The organizational names, etc. below have been changed in line with theorganizational reforms that took place on April 1, 2023.)

1) Systems for Ensuring the Compliance with Laws and the Articles of Incorporation in the
Performance of Duties by Directors, Officers and Employees of the Company and its Subsidiaries
The Company has established basic principles for compliance in the Teijin Group’s Corporate Governance Guide.
To practice these basic principles, the Company shall establish systems and organizational structures that ensures practicaloperation and observation of Teijin Group’s Corporate Philosophy, Corporate Code of Conduct, Corporate Standards of50

Conduct and other related internal regulations.
The Representative Directors, other executive directors and corporate officers shall take the initiative and set good examples
in observing laws, the Articles of Incorporation, social rules and ethics, and shall promote compliance awareness among
directors, officers and employees of the Company and its subsidiaries. In order to supervise the entire Teijin Group’s
compliance and identify and address any potential issues, the Company appoints a Chief Sustainability Officer as the officer
in charge of compliance.
The directors, officers and employees of the Company and its subsidiaries shall be required to report to Teijin entity or tothe holding company, i.e. Teijin Limited, any significant violations of laws or other serious information concerningcompliance, in accordance with Group Ethics Regulations and others. Chief Sustainability Officer shall direct and supervise
investigations to confirm such facts and, upon consultation with President (CEO), determine appropriate measures.
Teijin shall provide necessary means for directors, officers, employees and business partners to directly report any violationor doubtful activities of non-compliance in Teijin or its subsidiaries. As one of such means, Teijin shall establish and operate
a reporting and consultation hotline with outside counsel and other experts, so that any director, officer or employee of theCompany and its subsidiaries can directly contact the outside counsel. The anonymity of the caller shall be protected, andany repercussions to the caller shall be prevented. Important reports as well as measures taken by the relevant Teijin entity
and their results shall be announced as appropriate to, and shall be recognized by, all directors, officers and employees of
the Company and its subsidiaries.
The directors of the Company and its subsidiaries shall receive audits on their performance of duties by statutory auditors
and will respect any advice or recommendations received from the statutory auditors.
the Company places Corporate Audit Department directly supervised by CEO, which performs internal auditing of TeijinGroup’s business operations and conducts the evaluation of the internal control system and proposes its improvement.
Teijin Group shall maintain a resolute attitude toward pressure from antisocial forces, including demands for payoffs from
specific shareholders or interference by crime syndicates, and shall not allow such interference. Chief Sustainability Officer
shall be appointed as the person in charge of actions against antisocial forces and, in collaboration with Human Resources
Officer, establish action policies and other rules and shall ensure observance of such policies and rules by directors, officers
and employees within the Company and its subsidiaries.
More than four independent outside directors shall be appointed as members of the Board of Directors in order to intensify
the validity of the decisions to be made by the Board of Directors in principle. These outside directors must satisfy therequirements for independence set forth by the Company.

2) Rules and Other Systems for Management of Risk of Loss in the Company and its Subsidiaries
The Board of Directors of the Company shall operate a Total Risk Management (TRM) system to deal with every riskthat may threaten the mission of achieving sustainable business development of the Teijin Group.
The TRM Committee (as referenced in "Overview of the Current System" under "Corporate Governance") primarily
focuses on operational risks and strategic risks within the Teijin Group. The committee proposes TRM basic policies, annual
TRM plans, and other related matters to the Board of Directors of the Company. In addition, Chief Sustainability Officer
shall implement necessary measures to ensure the continuation of businesses of the Teijin Group in the face of risks arisingfrom disasters, the inappropriate performance of duties by directors, officers and employees, and the technical problems in
the critical IT systems.

3) Systems for Ensuring that Duties by Directors and Employees of Teijin and Its Subsidiaries Are
Performed Efficiently
The Company shall establish Group Regulations to provide the necessary rules and guidelines for the Group to ensure theefficient performance of duties throughout the Teijin Group.
51

The Board of Directors of the Company shall have Representative Directors, etc. execute business operations, and thematters delegated to the representative directors, etc. shall be determined based on the organization and in compliance withthe procedures stipulated by internal regulations. These regulations shall be revised as may be necessary to reflect any
revision and/or abolition of laws and/or to increase efficiency.
The Board of Directors of the Company shall organize the basic structure of the Teijin Group, and shall promote efficientmanagement and supervision of these organizational bodies.
The Company shall formulate the Group medium-term management plan, and each fiscal year it shall formulate ShortTerm plans, and Group’s entire key management targets and budgets, as well as carrying out progress checks, in order torealize the medium-term management plan.

4) Systems for Ensuring that Proper Business Operations Are Conducted within the Teijin GroupThe Company shall establish Group Regulations to provide the necessary rules and guidelines for the Group to ensure
appropriate business operations throughout the Teijin Group. Each Teijin Group company shall establish its own regulations
based on the Group Regulations, and shall use appropriate processes for deciding on important issues.
The Company shall discuss important matters concerning Teijin Group companies at its Group Strategy Committee
meeting and other meetings, and shall require Teijin Group companies to make reports.
The representative directors and other executive directors and corporate officers shall provide necessary instructions toensure that Teijin Group entities have appropriate internal control systems.
The Corporate Audit Department of the Company shall operate and supervise internal audits of Teijin Group’s business
operations to ensure the efficiency and validity of internal control functions over the entire business of the Teijin Group.
The Statutory Auditors of the Company shall establish appropriate systems, such as those for close cooperation withoutside Accounting Auditors and the Corporate Audit Department, to ensure effective and appropriate supervision andauditing of Group’s entire business operations.
To ensure the reliability of its financial reporting, the Company shall establish a general internal control system overfinancial reporting covering the general operation of the Teijin Group and specific internal control systems covering
individual operational processes, which shall be properly and efficiently operated and assessed.

5) Systems for the Preservation and Management of Information in Relation with the Directors’
Performance of Their Duties
Directors shall preserve and manage, in an appropriate manner and in accordance with the relevant company regulations,documents related to the execution of their duties, including the minutes of General Meetings of Shareholders and minutesof the Board of Directors meetings, and other important information. The CEO shall be responsible for monitoring andsupervising the preservation and management of these documents and information. Documents related to the performanceof director duties shall be preserved for at least ten (10) years, and shall be accessible whenever necessary.

6) Provisions Concerning Employees Assigned to Assist the Statutory Auditors in Performing Their
Duties, the Independence from Directors of Such Employees, and the Validity of Instructions Given
to Such Employees
The Company places the Teijin Group Auditors Office directly supervised by full-time Statutory Auditors to assist
Statutory Auditors in performing their duties, which shall have, as a general rule, two or more Auditor Assistants. The
Auditor Assistants may also act as Statutory Auditors of Teijin Group companies, but it shall not act as corporate officers
or employees having executory duties at Teijin Group companies.
To secure the independence of Auditor Assistants above, all decisions concerning personnel issues affecting Auditor
Assistants require the prior consent of the full-time Statutory Auditors, and the full-time Statutory Auditors shall assess theperformance of Auditor Assistants.
527) Systems for Reporting to Statutory Auditors by Directors, Corporate Officers and Employees of
Teijin and its Subsidiaries, and Other Systems for Reports to Statutory Auditors
The full-time Statutory Auditors of the Company shall attend the meetings of the Board of Directors and other important
meeting bodies of the Company, as well as those of the important meeting bodies of its main subsidiaries.
Representative Directors, etc. shall report at the meetings of the Board of Directors and other important meetings on theirperformance of duties with regard to the business operations, functions, and subsidiaries under their charge.
Directors, officers and employees of the Company and its subsidiaries shall report to a Statutory Auditors of the Company
as soon as they discover a significant decline in Company's credibility, serious adverse effects on the performance of theCompany, significant damage related to the environment, safety and health (ESH) or product liability (PL), serious
violations of internal rules and other similar events.
The Directors, officers and employees of the Company and its subsidiaries shall report on the business operations, functions,and subsidiaries under their charge, when they deem it necessary to do so, or at the request of the Statutory Auditors of
Teijin, and shall cooperate with the investigations of the Statutory Auditors of the Company .

8) Systems for Ensuring that Persons Reporting to the Statutory Auditors Are Not Subject to Unfair
Treatment Because of Such Reporting
Group Ethics Regulations stipulates that no person shall be treated unfairly because of reporting or notifying illegal orunethical conduct and so forth.

9) Policy Regarding Processing of Expenses and Payment Duties Arising with Respect to the Statutory
Auditors’ Performance of Duties, Prepayment of Expenses, and Reimbursement Procedures
The Company shall bear the expenses and payment duties required for the Statutory Auditors’ performance of duties, andshall promptly respond to requests for pre-payment of expenses in accordance with the Companies Act after confirmation.

10) Other Systems for Ensuring that the Audits of Statutory Auditors Are Conducted Effectively
The majority of members sitting on the Board of Statutory Auditors shall be Independent Outside Statutory Auditors who
satisfy the independence requirements set by the Company, thereby ensuring transparency.
Statutory Auditors shall enter into advisory agreements with outside law firms in order for themselves and subsidiaries’
statutory auditors to form independent opinions. When they consider it necessary in the course of conducting audits, theAuditors can, at their own discretion, retain outside advisers, including certified public accountants and other consultants.

(2) Overview of the use of the internal control system
An overview of the use of the internal control system in FY2022 in accordance with the “Resolutions on Basic Systems
for Internal Control” is as follows.

1) Operations related to legal compliance
The Company shall post the Teijin Group’s Corporate Governance Guide, which stipulate the basic principles forcompliance, and related regulations for putting those basic principles into practice on the Company intranet. In addition, theCompany has designated October of each year as Corporate Ethics Month and plans to make compliance common knowledge,
including by holding in-house training. Also, when making important decisions, the Company aims to prevent violating laws
and ordinances by confirming with related dedicated departments.
The Company set up a compliance promotion organization under the Chief Sustainability Officer and the Company isworking to grasp and address issues across the Teijin Group. Moreover, the Chief Sustainability Officer shall appropriately
handle important compliance issues reported by directors, officers and employees at the Company and its subsidiaries inaccordance with the Group Ethics Regulations, etc., which stipulates rules for reporting and responding to violations. These
matters are reported regularly to the Board of Directors and Statutory Auditors.
53

The Company has established an internal reporting system, including a compliance hotline, that facilitates anonymous
reporting. Consultations by domestic and overseas group companies, including the protection of whistleblowers, are properly
handled. The Company are working to ensure thorough awareness through the disclosure of this information on the Company
intranet, etc. twice a year.
The Company respects and appropriately responds to matters pointed out by Statutory Auditors in Statutory Auditor audits
and evaluations of the maintenance and operations of the internal control system.
In accordance with the annual plan, the Corporate Audit Department of the Company conducts internal audits across the
Teijin Group and reports the audit results to the Members of the Board and the Statutory Auditors.
The Company has established a policy for responding to anti-social forces in its Code of Conduct, and is working to ensure
thorough awareness of this policy through Corporate Ethics Month and other events.

2) Operations related to loss risk management
The Board of Directors of the Company receives reports from the TRM Committee on proposals for TRM basic policies
and annual plans, as well as the status of such risk occurring and the status of response. The Board of Directors is establishinga system to manage important risks and for business continuity.
The Chief Sustainability Officer regularly evaluates and monitors operational risks, and continuously verifies the validityof risk extraction and countermeasures. The Company is formulating a "large-scale disaster response manual" that assumes
the outbreak of infectious diseases such as the recent COVID-19, and the spread of other infection diseases over a wide area.
The Company has also set a response headquarters to deal with COVID-19. After giving top priority to the safety of heCompany’s employees and their families around the world, the Company grasped conditions in the entire Group, formulated
and implemented various measures, and disseminated information within and outside the Group, as well as procured relief
supplies.
At important meetings, including Board of Directors meetings, the Company evaluates matters for deliberation factoring
into the results of strategic risk assessments conducted in accordance with internal regulations.
The Company, to ensure the continuity of its business, is establishing necessary manuals and a system prepared for
emergencies, including holding regular drills.
The Company has also established separate rules for the "protection of personal information" and "information security,"
and implements various in-house training and measures to strengthen security in an effort to prevent the risk of information
leaks.

3) Operations related to ensuring effectiveness
The Company posts Group regulations on the Company intranet to ensure thorough awareness.
The Company, in accordance with internal regulations, is clarifying management structure, division of duties,
responsibilities and authority, and aims for efficient and effective business execution.

4) Operations related to internal controls in a corporate group
The Company regularly conducts self-inspections regarding the establishment and operation of an internal control system,and provides ongoing guidance to each Teijin Group company pertaining to the maintenance of the internal control system,
including regulations, meeting bodies, and reporting systems.
The Statutory Auditors of the Company, to promote fair and efficient auditing activities in the Teijin Group, regularly
carry out Committee of Teijin Group Statutory Auditors meetings. They also work closely with Accounting Auditors andthe Corporate Audit Department by attending Accounting Auditor reporting sessions and reporting the results of operational
audits.

5) Operations related to storing information
The Directors of the Company shall properly store and manage important documents related to the execution of duties in54

accordance with internal regulations.

6) Operations to Ensure the Effectiveness of Audits by Statutory Auditor
The Company established the Teijin Group Auditors Office. The staff members of the Teijin Group Auditors Office areengaged in audit-related support work based on the instructions and orders of the Statutory Auditors.
The Company's full-time Statutory Auditor attends important meetings at the Company and its major subsidiaries, andreceives reports on the status of business execution from the representative directors, executive directors and corporate
officers who attend these meetings.
The Chief Sustainability Officer reports to meeting members, including the Statutory Auditors, individually or throughimportant meetings as soon as a matter designated to be important is discovered, including whistle-blowing via hotlines.
Directors, officers and employees of the Company and its subsidiaries appropriately respond to requests from Statutory
Auditors and take steps to ensure the effectiveness of audits carried out by Statutory Auditors.

9. Basic Policy on Corporate Control(1) Basic Policy Regarding the Company’s Shareholders(Basic policy regarding those who control decisions on the company’s financial and business policy)
The Company believes the ideal situation for its shareholders is determined based on free trade in the market. Consequently,
decisions, such as whether to comply with an acquisition proposal that would accompany a transfer of the Company’s control,
should ultimately be done based on the intentions of all shareholders.
However, it is envisaged that a part of a large-scale acquisition of the Company’s shares or an acquisition proposal may
include “the likelihood of causing obvious harm to the corporate value of the Company and therefore the common interestsof the shareholders,” “the possible threat to compel shareholders to sell their shares,” and “cases where the compensation
for the acquisition is insufficient in view of the corporate value of the Company.” The Company believes that an entity thatengages in a large-scale acquisition or proposes an acquisition such as this is not appropriate, with exception, to control
decisions on the Company’s financial and business policies.

(2) Initiatives that contribute to the realization of this basic policy
The Company, to ensure that many institutional investors continue to invest in the Company over the long term, is already
implementing the following measures as actions to improve its corporate value, and by extension the common interests of
its shareholders. The Company believes these actions will contribute to the realization of the Basic Policy in (1) above.

1) Initiatives to improve profit
The Group released the “Teijin Group Reforms for Profitability Improvement” in February 2023. Amid this, to further
embody the long-term vision of becoming a “company that supports the society of the future,” the Company is clearly
revealing plans to become a “company that protects the global environment,” and a “company that addresses issues ofpatients, , families and local communities in need of more support”. In addition, in FY2023, The Company aims to carry out
structural reforms companywide, including improving profit margins at the three challenging businesses, the composites,
aramid and healthcare businesses. For the specific details of these activities refer to “Matters Concerning the Current Statusof the Teijin Group (corporate group), (5) Management Policy and Tasks Ahead”.

2) Initiatives to improve corporate value through the strengthening of corporate governance
The Company has been promoting and undertaking the strengthening of corporate governance as an important matter,both in the past and at present, given it is an essential mechanism for improving corporate value, and by extension enhancing
the common interests of shareholders. For the specific details of this, refer to “ Corporate Governance System”.
55

(3) Initiatives to prevent a person/entity deemed inappropriate from controlling decisions on the
Company’s financial and business policies in light of basic policies
The Company will continue to make requests of parties that conduct large-scale acquisitions of Teijin shares or are
intending to carry out a large-scale acquisition for the provision of necessary and sufficient information so that shareholders
can make proper decisions on the appropriateness of large-scale acquisitions. In addition, the Company shall implement
adequate measures in accordance with the Financial Instruments and Exchange Act, the Companies Act and other relevantlaws and ordinances, including the disclosure of the opinions, etc. of the Board of Directors of the Company, and steps tosecure the time and information necessary for consideration by shareholders.

Note, initiatives (2) and (3) above conform with the Basic Policy in (1) above. In addition, this is not detrimental to corporate valueor the common interests of shareholders, and is not for the purpose of maintaining the position of the Company’s directors.

56

10. Financial Statement(1) Consolidated Balance Sheets

FY2021(As of Mar. 31, 2022)(Millions of yen)
FY2022(As of Mar. 31, 2023)

Total

134,480
13,928177,374
103,399
13,68047,541
17,07364,910(389)
571,996

142,780
13,880169,668
125,878
15,59655,252
11,29879,451(462)
613,341

Total

73,378116,984
43,25543,50838,388315,51476,961
145,266
43,85534,796
46,979347,857

Total

29,920119,297
41,535
190,752

13,987104,373
42,190160,550

85,014
2,257
8,289
5,002
30,006(1,247)
129,321635,586

82,139
2,453
7,967
4,700
24,613(1,185)
120,686
629,093

1,207,583

1,242,433< Assets >Current assets
Cash and deposits
Notes
Accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Short-term loans receivable
Other current assets
Allowance for doubtful accounts

Noncurrent assets
Tangible assets
Buildings and structures, net
Machinery and equipment, net
LandConstruction in progress
Other, net

Intangible assets
Goodwill
Sales rights
Other

Investments and other assets
Investment securities
Long-term loans receivable
Net defined benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total
Total noncurrent assets
Total assets57

< Liabilities >Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Accrued expenses
Other
Total
Noncurrent liabilities
Bonds payable
Long-term loans payable
Net defined benefit liability
Asset retirement obligations
Lease obligations
Deferred tax liabilities
Other
Total
Total liabilities<Net assets>
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

58

FY2021(As of Mar. 31, 2022)(Millions of yen)
FY2022(As of Mar. 31, 2023)

101,183
110,524
39,185
7,186
25,65368,024
351,756

103,041
132,619
75,278
5,332
25,10073,466414,836

105,000
215,972
37,076
1,257
12,9639,568
9,180
391,016
742,772

105,000
194,332
36,124
1,278
18,933
11,101
9,745
376,513
791,349

71,833
103,757
242,332(12,729)405,192

71,833103,160
213,923(12,299)376,617

21,192(80)
13,549(272)
34,38820,640527
25,724
1,474
48,365803
24,429464,8111,207,583

682
25,420451,084
1,242,433

(2) Consolidated Statements of Income(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Equity in earnings of affiliates
Gain on valuation of derivatives
Miscellaneous income
Total
Non-operating expenses
Interest expenses
Equity in losses of affiliates
Foreign exchange losses
Loss on valuation of derivatives
Contribution
Miscellaneous loss
Total
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Reversal of impairment losses
Other
Total
Extraordinary loss
Loss on sales and retirement of noncurrent assets
Loss on valuation of investment securities
Impairment loss
Loss related to COVID-19
Other
Total
Income (loss) before income taxes
Income taxes - current
Income taxes - deferred
Total
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent

59

FY2021

FY2022(Apr. 2021-Mar. 2022)(Apr. 2022-Mar. 2023)

926,054655,033
271,022226,813
44,2081,018,751
770,615
248,136
235,273
12,863

468
1,210
5,556
6,509
1,380
15,124

1,262
1,300
－
5,647
978
9,187

3,252
－
3,811
323
356
1,898
9,640
49,692

7,084
1,105
3,028
129
247
1,357
12,950
9,100

64
5,738
1,059
846
7,707

5,875
5,482
2,349
222
13,928

2,088
515
8,915
－
1,816
13,33444,065
14,797
3,302
18,09925,966
2,808
23,1581,845
3,703
16,879317
1,775
24,518(1,490)12,1092,228
14,337(15,827)
1,868(17,695)

(3) Consolidated Statements of Changes in Net Assets

FY2022 (Apr. 2022 - Mar. 2023)(Millions of yen)
Shareholders' equity
Capital stock Capital surplus

Balance as of March 31, 2022

71,833

103,757

Total
Treasury stock shareholders'equity242,332(12,729)405,192

Retainedearnings

Changes of items during the period
Dividends from surplus
Profit (loss) attributable to owners of parent(10,571)(17,695)

Purchase of treasury stock
Disposal of treasury stock
Restricted stock compensation

(41)
(101)

(10,571)(17,695)
(5)

(5)

155
281

114
180

Transfer of loss on disposal of treasury shares

142

Capital increase of consolidated subsidiaries

(597)

(597)

0

0

Change in treasury shares of parent arising from transactions
with non-controlling shareholders

(142)

－

Net changes of items other than shareholders' equity
Total
Balance at March 31, 2023－
71,833(597)(28,408)431(28,574)

103,160

213,923(12,299)376,617

Accumulated other comprehensive income
Valuation
Deferred gains
difference onor losses onavailable-forhedges
sale securities
Balance as of March 31, 2022

21,192(80)

Foreigncurrencytranslation
adjustment

Remeasurements ofdefined benefit
plans

13,549

(272)

Total

34,388Subscription
Non-controllingrights tointerests
shares803

24,429Total net
assets464,811

Changes of items during the period
Dividends from surplus(10,571)

Profit (loss) attributable to owners of parent
Purchase of treasury stock(17,695)(5)

Disposal of treasury stock

114

Restricted stock compensation

180

Transfer of loss on disposal of treasury shares
Capital increase of consolidated subsidiaries

－
(597)

Change in treasury shares of parent arising from transactions
with non-controlling shareholders
Net changes of items other than shareholders' equity
Total
Balance at March 31, 2023

0
(552)
(552)

608
608

12,175
12,175

1,746
1,746

13,977
13,977

(121)
(121)

991
991

14,847(13,727)

20,640527

25,724

1,474

48,365682

25,420451,08460

Consolidated Statements of Comprehensive Income (Reference)(Millions of yen)

Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of affiliates accounted for using
equity method
Total
Comprehensive income
Comprehensive income attributable to :Owners of parent
Non-controlling interests

61

FY2021

FY2022(Apr. 2021-Mar. 2022)(Apr. 2022-Mar. 2023)

25,966(15,827)(1,208)(688)
19,364
1,255

(607)
608
11,845
1,688

1,291

382

20,01345,97913,916(1,910)43,742
2,237(3,718)1,807

Consolidated Statements of Cash Flows (Reference)(Million yen)

Cash flows from operating activities
Income (loss) before income taxes
Depreciation and amortization
Impairment loss
Increase (decrease) in net defined benefit liability
Decrease (increase) in net defined benefit asset
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for business structure improvement
Interest and dividends income
Interest expenses
Equity in (earnings) losses of affiliates
Loss (gain) on valuation of derivatives
Loss (gain) on sales and retirement of noncurrent assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Extra retirement payments
Income taxes paid
Net cash and cash equivalents provided by operating activities

FY2021

FY2022(Apr. 2021-Mar. 2022)(Apr. 2022-Mar. 2023)

44,06568,816
8,915
663
22,78265(2,330)(1,677)
3,252(5,556)(6,080)2,023(5,571)515(5,794)(16,935)
2,129(5,935)
103,346(1,490)74,91816,879
556
(54)
(33)
－
(2,562)
7,084
1,105(5,518)(4,030)(5,468)3,703
16,528(26,548)(3,055)
7,696
79,712

6,507

9,409

(3,158)(2,417)(14,622)89,656(6,836)－(27,199)
55,086(60,593)
135(139,883)(4,554)
9,596－(2,263)(813)(198,375)(51,512)
5,908(6,224)(4,462)
7,491(675)(1,643)(1,309)(52,427)

9,423
90,000(20,000)
23,529(16,439)(18)(10,082)(953)(4,346)
71,113

16,223－－41,500(37,150)(5)(10,571)(1,315)(1,501)
7,180

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change in scope of consolidation
Decrease (increase) in short-term loans receivable
Other, net
Net cash and cash equivalents used in investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Proceeds from long-term loans payable
Repayment of long-term loans payable
Purchase of treasury shares
Cash dividends paid
Cash dividends paid to non-controlling interests
Other, net
Net cash and cash equivalents provided by financing activities

1,841

(658)

Net increase (decrease) in cash and cash equivalents(35,764)

9,182

Cash and cash equivalents at beginning of period

166,455

130,696

－

428

5

－

130,696

140,307

Effect of exchange rate changes on cash and cash equivalents

Increase in cash and cash equivalents resulting from change of scope of consolidation
Increase in cash and cash equivalents resulting from merger with unconsolidated
subsidiaries
Cash and cash equivalents at end of period62