May 31, 2022

Notice of Convocation
The 156th Ordinary General Meeting of Shareholders

TEIJIN LIMITED

Disclaimer: Please note that the following is a translation of the original Japanese documents prepared for theconvenience of our non-Japanese shareholders with voting rights. Although this translation is intended to be complete
and accurate, the Japanese original shall take precedence in the case of any discrepancies between this translation andthe 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 registeredshareholder authorized to attend the Ordinary General Meeting of Shareholders. Every shareholder attending theOrdinary General Meeting of Shareholders is required to present the Voting Card, which is sent to the registeredshareholder together with the original Notice of Convocation in Japanese, to the receptionist at the meeting.

Contents
Notice of Convocation of the 156 Ordinary General Meeting of Shareholders
thReference Documents for the General Meeting of Shareholders
Proposals and Reference
Proposal 1: Partial Amendments of the Articles of Incorporation
Proposal 2: Election of Ten (10) Directors
Attached Reports
Reports on Operations for the 156th 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) Primary Businesses(7) Primary Business Places(8) Employees(9) Significant Subsidiaries(10) Primary Lenders and Amount of Borrowings
2. Matters Regarding the Shares of the Company
3. Stock Acquisition Rights
4. Corporate Governance System
5. Directors and Statutory Auditors
6. Accounting Auditor
7. Policy Regarding the Determination of Dividends from Retained Earnings
8. Systems to Ensure Appropriate Business Operations and the Status of its Implementation
9. 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

(Securities code: 3401)
May 31, 2022
Dear Shareholders
Akimoto Uchikawa
President and Representative Director
Teijin Limited
2-4, Nakanoshima 3-chome,
Kita-ku, Osaka 530-8605,
Japan
Notice of Convocation of
the 156th Ordinary General Meeting of Shareholders

You are cordially invited to attend the 156th Ordinary General Meeting of Shareholders of Teijin Limited (“theCompany”) 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 21, 2022. (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.

2

Details
1. Date and Time of the Meeting:
Wednesday, June 22, 2022, at 10 a.m. (Japan Time)(The door opens at 9 a.m.)
2. Place:
The Westin Osaka, 2nd Floor Ball Room, 1-20, Oyodonaka 1-chome, Kita-ku, Osaka, Japan
3. Purposes
Reports:
The Reports on Business Report, Consolidated Financial Statements, Non-Consolidated Financial Statements
and the Report by the Accounting Auditor and the Board of Statutory Auditors of the results of audit on theConsolidated Financial Statements, for the 156th Fiscal Year (April 1, 2021 to March 31, 2022)
Proposal 1: Partial Amendments of the Articles of Incorporation
Proposal 2: Election of Ten (10) Directors
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 treat such “no answer” as your “approval” on the proposal.
(2) In the event of an overlap in the exercise of voting rights via the Document for the Exercise of Voting
Rights and the Internet voting system, the exercise of voting rights via the Internet voting system shall prevail.
(3) If you vote more than once using the same method, your last vote shall prevail.
5. Attachments to Notice of Convocation and Reference Documents for the General Meeting of Shareholders
If any revision should be required to the Business Report, Consolidated Financial Statements, Non-Consolidated
Financial Statements, or Reference Documents for the General Meeting of Shareholders, such revision will be
posted on the Company’s website. (https://www.teijin.com)

・If you attend the General Meeting of Shareholders, please submit the attached Document for the Exercise of
Voting Rights to the reception of the meeting.
・If you attend the General Meeting of Shareholders by proxy, you may exercise your voting rights by authorizing
one (1) other shareholder with voting rights to act as its proxy as stipulated in the Company’s Article of
Incorporation.

3

Reference Documents for the General Meeting of Shareholders

Proposals and Reference

Proposal 1: Partial Amendments of the Articles of Incorporation
1. Reasons for Proposal
The revised provisions stipulated in the proviso of Article 1 of the supplementary provisions of the “Act Partially
Amending the Companies Act” (Act No. 70 of 2019) will come into effect on September 1, 2022. In order to prepare
for introduction of the System for Providing General Shareholder Meeting Materials in Electronic Format, theCompany proposes to make amendments of the Articles of Incorporation as described below.
(1) The provisions of Internet Disclosure of Reference Document for the General Meeting of Shareholders andDeemed Provision (current Articles of Incorporation, Article 14) are not required under the System for Providing
General Shareholder Meeting Materials in Electronic Format, so they will be changed to measures for providing
information in electronic format, etc.
(2) The proposed amendment to Article 14, First Part stipulates that measures for providing information inelectronic format will be taken for the information contained in the reference documents, etc. for the General
Meeting of Shareholders and Second Part provides provisions to limit the scope of documents to be delivered toshareholders who have requested the delivery of the documents.
(3) With the above changes, supplementary provisions regarding the effective date, etc., will be established.
2. The contents of the change(The underlined parts have been changed.)
Current Articles

Proposed Amendments

Article 14 (Internet Disclosure of Reference Document

Article 14. (Measures for Providing Information infor the General Meeting of Shareholders and DeemedElectronic Format, etc.)

Provision) In convening a General Meeting ofUpon convening a General Meeting of Shareholders,Shareholders, the Company shall be deemed to have

the Company shall take measures for providing

provided the information that must be mentioned orinformation that constitutes the content of reference

displayed in the reference document of a General

documents,

Meeting of Shareholders, business report, financial

Shareholders in electronic format.

statements and consolidated financial statements by

Among items to be provided information in electronic

disclosing such information using the Internet

format, the Company may exclude all or part of the

pursuant to Ordinance of the Ministry of Justice.

items stipulated in the Ordinance of the Ministry of

etc.

for

the

GeneralMeetingof

Justice in the document that will be issued toshareholders who requested issuance of the documentby the record date for voting rights.
4Current Articles

Proposed Amendments（Supplementary Provisions）
Article 1 The change from current Article 14 of the
Articles of Incorporation (Internet Disclosure ofReference Document for the General Meeting of
Shareholders and Deemed Provision) to the proposeda m en d m e nt t o A rt ic l e 1 4 o f t h e A rt ic l e s o f
Incorporation (Measures for Providing Information inElectronic Format, etc.) shall be effective on
September 1, 2022 (the “Date of Enforcement“).
2. Notwithstanding the provisions of the preceding
paragraph, current Article 14 of the Articles ofIncorporation (Internet Disclosure of Reference
Document for the General Meeting of Shareholders
and Deemed Provision) shall remain effective withregard to any General Meeting of Shareholders held ona date within six months from the Date of Enforcement.
3. This Supplementary Provision shall be automaticallydeleted on the date when six months have passed fromthe Date of Enforcement, or when three months havepassed from the date of the General Meeting of
Shareholders in the preceding paragraph, whichevercomes later.

5

Proposal 2: Election of Ten (10) 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 ten (10) Directors (nine (9) of whom are up for
reelection).
The candidates for Director are as follows.
No.

Candidate’s Name
(Date of Birth)【Reappointment】

Apr. 1983

Joined Teijin Limited

Jun Suzuki

Apr. 2011

President, Teijin Holdings Netherlands B.V.

Apr. 2012

Corporate Officer, Teijin Limited

Apr. 2013

Executive Officer, Teijin Limited

Jun. 2013

Director, Executive Officer, Teijin Limited

Apr. 2014

President & Representative Director(February 19,1958)
1

Personal History, Positions andSignificant Concurrent Positions<Participation in
Board of Directors>
12 times out of 12(100%)

Number ofCompany’s Shares
Owned

70,763 Shares

CEO (Chief Executive officer)
Apr. 2022

Chairperson of the Board (Incumbent)<Reason for nomination of the candidate for director and Roles expected >After assuming the post of President & Representative Director (CEO) in April 2014, Jun Suzuki formulated arevised medium-term plan in November of the same year, and promoted the completion of structural reforms on
which his predecessor worked. He formulated the medium-term plan “ALWAYS EVOLVING2017-2019” inFebruary 2017 and “2020-2022ALWAYS EVOLVING “in February 2020. He divided each business into future
profit source development (Strategic Focus) and stably profitable existing business expansion (Profitable Growth)and positioned both as a more concrete execution plan. He has promoted growth strategies for the future andbusiness portfolio transformation. From April 2022, as Chairperson of the Board, he will strive to supervise Executive
Director and strengthen corporate governance by taking advantage of his extensive experience 8-year as CEO.
No.

Candidate’s Name
(Date of Birth)

Personal History, Positions andSignificant Concurrent Positions【Reappointment】

Mar. 1990

Joined Teijin Limited

Akimoto Uchikawa

Apr. 2017

Corporate Officer, Teijin Group
Responsible for Material Business f Teijin Group(Jan 18,1966)<Participation in
Board of Directors>
9 times out of 9
(100%)

Number ofCompany’s Shares
Owned

Assistant to General Manager, Fibers and Products
Converting Business Group (for Technology, Production,
Restructuring Initiatives).
Jan. 2018

2

Management Coordinator for the President, Fibers andProducts Converting Business Group (for Technology,
Production, Restructuring Initiatives)

Apr. 2020

General Manager, Composites Business Unit

Apr. 2021

Executive Officer, Teijin Group

12,424
SharesPresident, Material Business of Teijin Group
Jun. 2021

Director, Executive Officer Teijin Limited

Apr. 2022

President & Representative Director (Incumbent)
CEO (Chief Executive officer) (Incumbent)<Reason for nomination of the candidate for director and Roles expected >Akimoto Uchikawa was appointed as Corporate Officer of the Teijin Group in April 2017. He became Management

6

No.

Candidate’s Name
(Date of Birth)

Personal History, Positions andSignificant Concurrent Positions

Number ofCompany’s Shares
Owned

Coordinator for the President, Material Business of Teijin Group and Assistant to General Manager, Fibers &Products Converting Business Group (for Technology, Production, Restructuring Initiatives) in April 2017. He wasappointed as General Manager Composites Business Unit in April 2020. He had been working on expanding theMaterial business field. He assumed the posts of Executive Officer of the Teijin Group and President Material
Business of the Teijin Group in April 2021. He has made efforts toward further increasing the profitability of thematerial business, which constitutes a part of the core strategies of the Company, as well as the growth and expansionof the core field, which are the themes of our Strategic Focus. He has also promoted business portfoliotransformation.
From April 2022, as President & Representative Director and CEO, he will play the role of Chief Executive Officer
in formulating and executing management policies to enhance the corporate value of the Teijin Group by taking
advantage of his global experience.
No.

Candidate’s Name
(Date of Birth)【Reappointment】

Apr. 1982

Joined Teijin Limited

Akihisa Nabeshima

Apr. 2015

Corporate Officer, Teijin Group

Apr. 2017

Executive Officer, Teijin Group(January 17, 1960)

3

Personal History, Positions andSignificant Concurrent Positions<Participation in
Board of Directors>
12 times out of 12(100%)

Number ofCompany’s Shares
Owned

General Manager, Healthcare Business Group
President & Representative Director, Teijin Pharma
Limited

10,575

Apr. 2019

President, Healthcare Business of Teijin Group

SharesJun. 2019

Director, Executive Officer, Teijin Limited

Apr. 2021

Representative Director, Executive Officer, Teijin Limited
Chief Financial Officer Teijin Limited (Incumbent)

Apr. 2022

Representative Director, Senior Executive Officer Teijin
Limited (Incumbent)<Reason for nomination of the candidate for director and Roles expected >Akihisa Nabeshima assumed the posts of Corporate Officer in April 2015 and Executive Officer of the Teijin Groupin April 2017. He has made efforts to increasing the profitability of the healthcare business as General Manager ofthe Healthcare Business Group of the Company and as President & Representative Director of Teijin Pharma
Limited. He became President, Healthcare Business of the Teijin Group in April 2019 and Director Executive
Officer in June 2019. He has worked on further increasing the profitability of the healthcare business, whichconstitutes a part of the core strategies of the Company, as well as on the growth of the new healthcare business,
which are the themes of the Company’s Strategic Focus. Based on having been involved in finance and accountingrelated work for more than 20 years before assuming the post of Corporate Officer, he assumed the posts ofRepresentative Director and CFO in April 2021. He is making efforts toward maintaining a sound financial base andincreasing corporate value. From April 2022, as Representative Director and Senior Executive Officer, he willcontinue to be responsible for the accounting and financial affairs of the entire Teijin Group based on his extensive
accounting and financial experience.

7

No.

Candidate’s Name
(Date of Birth)

Personal History, Positions andSignificant Concurrent Positions【Reappointment】

Apr. 1986

Joined Teijin Limited

Toshiya Koyama

Apr. 2013

Corporate Officer (Riji), Teijin Group
General Manager, New Materials Business Development(May 19,1960)

4<Participation in
Board of Directors>
12 times out of 12(100%)

Number ofCompany’s Shares
Owned

Department
Chief Representative of Teijin Electronics Korea Co., Ltd.
Apr. 2015

Corporate Officer, Teijin Group

12,475

Apr. 2017

Executive Officer, Teijin Group

SharesGeneral Manager, Material Business Group
Apr. 2020

President, Material Business of Teijin Group

Jun. 2020

Director, Executive Officer, Teijin Limited (Incumbent)

Apr. 2021

Representative Director, Senior Executive Officer Teijin
Limited (Incumbent)<Reason for nomination of the candidate for director and Roles expected >Toshiya Koyama has worked to increase the earnings of the Company’s materials business as Corporate Officer(Riji) of the Teijin Group in April 2013, Corporate Officer of the Teijin Group in April 2015, and Executive Officerof the Teijin Group in April 2017. In April 2020, he assumed the role of President Material Business of the TeijinGroup. He has worked to further increase profits in the materials business, which is one of our key strategic
businesses, and expand the materials business, which is the theme of our Strategic Focus. He assumed the posts of
Director Executive Officer in June 2020 and Chief Social Responsibility Officer in April 2021. He is engaged insustainable management based on his insight and knowledge in the material business, the management andpromotion of the Teijin Group CSR, compliance, risk management, ESH, social contribution activities, and auditing
system.
No.

Candidate’s Name
(Date of Birth)

Personal History, Positions andSignificant Concurrent Positions【Reappointment】

Apr. 1985

Joined Teijin Limited

Eiji Ogawa

Apr. 2016

Corporate Officer, Teijin Group
General Manager, Resin and Plastic Processing Business(October 26, 1962)
5<Participation in
Board of Directors>
12 times out of 12(100%)

Number ofCompany’s Shares
Owned

Unit, Teijin Limited.

10,950

Apr. 2019

Chief Officer, Corporate Strategy

SharesJun. 2020

Director, Corporate Officer Teijin Limited

Apr. 2021

Director, Executive Officer Teijin Limited (Incumbent)

Apr. 2021

President, Material Business of Teijin Group (Incumbent)<Reason for nomination of the candidate for director and Roles expected >Eiji Ogawa was appointed Corporate Officer of the Teijin Group in April 2016 and had been working to increase
profits in the resin business as General Manager of the Resin and Plastic Processing Business Unit. He assumed theposts of Chief Officer, Corporate Strategy in April 2019, Director Corporate Officer in June 2020 and Director
Executive Officer 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 the Teijin Group, he has taken responsibility
for further profit expansion of the Materials Business of the Teijin Group and development and promotion of priority
fields that are the theme of Strategic Focus and will endeavor to provide environmental value solutions and safe,
secure and disaster prevention solutions by taking advantage of his corporate strategy experience.

8

No.

Candidate’s Name
(Date of Birth)

Personal History, Positions andSignificant Concurrent Positions【Reappointment】

Apr. 1990

Joined Teijin Limited

Naohiko Moriyama

Apr. 2017

Corporate Officer, Teijin Group
Responsible for Healthcare Business of Teijin Group(May 20,1965)
６<Participation in
Board of Directors>
9 times out of 9
(100%)

Number ofCompany’s Shares
Owned

Apr. 2019

General Manager, Healthcare New Business Division

6,797

Apr. 2021

Teijin Group Executive Officer

SharesPresident, Healthcare Business of Teijin Group(Incumbent)
Jun. 2021

Director, Executive Officer Teijin Limited (Incumbent)<Reason for nomination of the candidate for director and Roles expected >Naohiko Moriyama was appointed as Corporate Officer of the Teijin Group in April 2017 and as Responsible for
Healthcare Business and General Manager of the Healthcare New Business Division in April 2019, and he has beenworking on toward expanding the Healthcare business field. He assumed the posts of Executive Officer of the TeijinGroup in April 2021. As President, Healthcare Business of the Teijin Group and General Manager, Healthcare New
Business Division, he has worked toward further increasing the profitability of the healthcare business, which is oneof the Company’s priority strategic businesses, and expanding the new healthcare business, which is the themes of
our Strategic Focus in Medium-Term Management Plan. From April 2022, as President, Healthcare Business of the
Teijin Group, he will continue to realize our goal of demographic change and increased health consciousness
solutions.
No.

Candidate’s Name
(Date of Birth)

Personal History, Positions andSignificant Concurrent Positions【Reappointment】

Jul. 1971

Joined IBM Japan, Ltd

Candidate for Outside
Director

Apr. 1995

Director, IBM Japan, Ltd

Apr. 2000

Director, Executive Officer, IBM Japan, Ltd.

Yukako Uchinaga

Apr. 2004

Director, Senior Executive Officer, IBM Japan, Ltd.

(July 5, 1946)

Apr. 2007

Board Chair, Japan Women’s Innovate Network<Participation in
Board of Directors>
12 times out of 12(100%)

Number ofCompany’s Shares
Owned(Incumbent)
Jun. 2007

Director, Benesse Corporation

Apr. 2008

Director, Vice Chairperson, Benesse Corporation
Representative Director, Chairperson of the Board, President& CEO, Berlitz Corporation

7

Oct. 2009

Director, Executive Vice President, Benesse Holdings, Inc.

1,200

Apr. 2013

Honorary Chairperson, Berlitz Corporation

SharesSep. 2013

President & CEO, Globalization Research Institute Co., Ltd.
(Incumbent)

Apr. 2014

Board Chair, Japan Diversity Network Association

Apr. 2018

Director, Teijin Limited (Incumbent)
Advisory Board member of Teijin Limited (Incumbent)<Significant Concurrent Positions >Board Chair, Japan Women’s Innovate Network
President & CEO, Globalization Research Institute Co., Ltd.
Outside Director, HOYA CORPORATION
Outside Director, SINTOKOGIO, LTD.

<Reason for nomination of the candidate for director and Roles expected >

9

No.

Candidate’s Name
(Date of Birth)

Personal History, Positions andSignificant Concurrent Positions

Number ofCompany’s Shares
Owned

Yukako Uchinaga has extensive business experience, having served in roles such as Director, Senior Executive
Officer at IBM Japan, Ltd. and Director, Executive Vice President at Benesse Holdings, with broad knowledge ofthe information technology field, and deep insight in matters concerning diversity. As the Director, she provides
appropriate advice and points out on diversity activities including women’s advancement and IT / healthcare
business in addition to contributing to our business strategy and governance. Furthermore, as a member of theAdvisory Board, she has fulfilled her duties sufficiently in deliberation of important matters such as appointment
and dismissal of the CEO, evaluation of the CEO's performance, and recommendations for overall management.
She has been a member of the Nomination Advisory Committee and the Compensation Advisory Committee sinceApril 2021. Therefore, we continue to select her as a candidate for Outside Director so that she can continue tosupervise management from an objective standpoint through the Board of Directors, Advisory Board, Nomination
Advisory Committee and Compensation Advisory Committee, making use of her extensive business experience,broad knowledge and deep insight in matters concerning diversity. The Company pays membership fees to the Japan
Women’s Innovative Network (“J-Win”), for which the candidate serves as Board Chair, however the amount of thistransaction accounts for less than 0.1% of the consolidated net sales of the Teijin Group and is less than 1% of thetotal membership fee revenue that J-Win receives.
No.

8

Candidate’s Name
(Date of Birth)

Personal History, Positions andSignificant Concurrent Positions【Reappointment】

Apr. 1975

Joined Ministry of Foreign Affairs, Japan (MOFA)

Candidate for Outside
Director

Jun. 1997

Deputy Permanent Representative of Japan to the World

Yoichi Suzuki

Apr. 2003

Minister’s Secretariat (MOFA)(September 25, 1950)

Sep. 2005

Consul-General of Boston<Participation in
Board of Directors>
12 times out of 12(100%)

Dec. 2008

Director-General for Economic Affairs of MOFA

Aug. 2010

Ambassador to Singapore

Aug. 2013

Ambassador to France

Jun. 2016

Government Representative and Ambassador in charge of

Number ofCompany’s Shares
Owned

Trade Organization (WTO) in Geneva

the Kansai region
Mar. 2017

2,400
SharesGovernment Representative and Ambassador Ambassador
for International Economic Affairs and Chief Negotiator for
the Japan EU EPA

Apr. 2018

MOFA retired

Apr. 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 director and Roles expected >Although Yoichi Suzuki does not have direct experience in corporate management, he has a wealth of knowledge
and experience in negotiations on international economics and trade issues as a diplomat. As the Director, heprovides appropriate advice and points out business strategies from a global viewpoint in addition to contributing
to our business strategy and governance. Furthermore, as a member of the Advisory Board, he has fulfilled his duties
sufficiently in deliberation of important matters such as appointment and dismissal of the CEO, evaluation of the

10

No.

Candidate’s Name
(Date of Birth)

Personal History, Positions andSignificant Concurrent Positions

Number ofCompany’s Shares
Owned

CEO's performance, and recommendations for overall management. He has been a member of the Nomination
Advisory Committee and Compensation Advisory Committee since April 2021. Therefore, we continue to select him
as a candidate for Outside Director so that he can continue to supervise management from an objective standpoint
through, the Board of Directors, Advisory Board, Nomination Advisory Committee and Compensation Advisory
Committee by utilizing his knowledge and experience as a diplomat.
No.

Candidate’s Name
(Date of Birth)

Personal History, Positions andSignificant Concurrent Positions【Reappointment】

Apr. 1978

Joined Japan Air Lines Co., Ltd.

Candidate for Outside
Director

Apr. 2007

President JAL Aircraft Maintenance Narita

Apr. 2009

Executive officer, JAL International Co., Ltd

Masaru Onishi

Jun. 2009

President of Japan Air Commuter(May 19, 1955)

Feb. 2010

President Japan Air Lines Corporation (JAL group COO)

<Participation in
Board of Directors>
12 times out of 12(100%)

Number ofCompany’s Shares
Owned

President Japan Air Lines International Co., Ltd.
Nov. 2010

Director,President Japan Air Lines International Co., Ltd.
(Organizational change)

Mar. 2011

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

Apr. 2011

Representative Director, President Japan Airlines Co.,
Ltd. (Company name change from Japan Air Lines

9

1,500SharesInternational Co., Ltd. to Japan Airlines Co., Ltd.)
Representative Director, Chairperson Japan Airlines Co.,
Ltd.
Feb. 2012

Representative Director, Chairperson Japan Airlines Co.,Ltd.

Apr. 2014

Director, Chairperson Japan Airlines Co., Ltd

Jul. 2018

External Affairs Representative, Japan Airlines Co., Ltd.

Jun. 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 Incorporate<Reason for nomination of the candidate for director and Roles expected >Masaru Onishi had served as president and Chairperson of Japan Airlines Co. Ltd. and he has abundant businessexperience and a high level of insight. As the Director, he is providing appropriate advice and suggestions regarding
the Company's business strategy and cooperate governance, as well as on officer compensation and appointments.
Furthermore, he has fulfilled his role sufficiently in appointment, dismissal, and evaluation of the CEO's
performance as the member of the Advisory Board which is the Company advisory body, and with regard tocompensation for Directors and Officers and the introduction of a new stock-based remuneration system ascommittee chair of the Compensation Advisory Committee. He has fulfilled his duties sufficiently inrecommendations for overall management. Therefore, we continue to select him as a candidate for Outside Director,
so that he can continue to supervise management from an objective standpoint through the Board of Directors,
Advisory Board, Nomination Advisory Committee, and Compensation Advisory Committee by utilizing his

11

No.

Candidate’s Name
(Date of Birth)

Personal History, Positions andSignificant Concurrent Positions

Number ofCompany’s Shares
Ownedabundant business experience and high level of insight.
No.

Candidate’s Name
(Date of Birth)

Personal History, Positions andSignificant Concurrent Positions【New Candidate】

Apr. 1976

Joined Bridgestone Corporation

Candidate for Outside
Director

Mar. 2006

Vice President and Officer Bridgestone Corporation

Mar. 2008

Director, Vice President and Senior Officer Bridgestone

Masaaki Tsuya(Jun 22,1952)

Number ofCompany’s Shares
Owned

Corporation
Sep. 2011

Representative Director, Senior Vice President
Bridgestone Corporation

Mar. 201210

Mar. 2013

Representative Director, CEO (Chief Executive officer)
Bridgestone Corporation

1,500

Representative Director, CEO

SharesChairperson of the Board, Bridgestone Corporation
Mar. 2016

Chairperson of the Board, Bridgestone Corporation
CEO and Representative Executive Officer

Mar. 2020

Chairperson of the Board, Bridgestone Corporation

Mar. 2021

External Advisor, Bridgestone Corporation (Incumbent)<Significant Concurrent Positions >External Advisor, Bridgestone Corporation<Reason for nomination of the candidate for director and Roles expected >Masaaki Tsuya had served as CEO and Chairperson of the Board of Bridgestone Corporation. In addition, he has
accumulated abundant business experience through engagement in fields such as international relations, humanresources and public relations, and promotion of internal control. In particular, he has experience in global business,
strengthening corporate governance, and enhancing deliberations and enabling appropriate decision making by the
Board of Directors. Based on his experience, the Company has determined that he qualifies for the Outside Directorof the Company working toward strengthening corporate governance as a global company. The amount oftransactions between Bridgestone Corporation and the Company accounts for less than 1% of the consolidated net
sales of either company.
Note 1: Yukako Uchinaga, Yoichi Suzuki, Masaru Onishi and Masaaki Tsuya are candidates for Outside Directors. The Company
requires the candidate for Outside Director to satisfy all the requirements of Independent Director stipulated by the Company.
These four (4) candidates satisfy all such requirements. Since they also satisfy the requirements of independence stipulated by
Tokyo Stock Exchange Group, Inc., the Company has registered candidates for Outside Director up for reappointment, Yukako
Uchinaga Yoichi Suzuki and Masaru Onishi, at the Tokyo Stock Exchange as Independent Directors, and it plans to register
the new candidate for Outside Director, Masaaki Tsuya, at the same stock exchange as Independent Director. 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: The Company has entered into liabilities limitation agreements with Yukako Uchinaga, Yoichi Suzuki and Masaru Onishi whoare currently Outside Directors, which limit the liabilities of each Director to ¥20 million or the minimum amount stipulated
in Article 425, Paragraph 1, of the Companies Act, whichever is higher, in accordance with the provisions of Article 427 of theCompanies Act and the Company’s Articles of Incorporation. If the reappointment is approved, the Company will continue theliabilities limitation agreements with them. If Jun Suzuki and Masaaki Tsuya election are approved, the Company will enter
into a liabilities limitation agreements with them which limit their liabilities to ¥20 million or the minimum amount stipulated
in Article 425, Paragraph 1, of the Companies Act, whichever is higher, in accordance with the provisions of Article 427 of theCompanies Act and the Company’s Articles of Incorporation.
Note 3: There are no special interests between the candidates and the Company.
Note 4: The chart below indicates the dates of the first appointment of the Outside Director for each candidate and the tenures inposition as Outside Director before the closing of this General Meeting of Shareholders.

12

Name

Date of First Appointment

Tenure in Position

Yukako Uchinaga
Yoichi Suzuki
Masaru Onishi

June 20, 2018
June 20, 2018
June 20, 20194 years
4 years
3 years

Note 5: About directors and officers liability insurance (D&O insurance)
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, in which each Director whose term of office expires at the conclusion of this
General Meeting of Shareholders is included as an insured. 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 intention or gross negligence will not be covered. If the election of each candidate isapproved, all candidates (and reelected candidates will continue to be) will be included in said insurance contract as insureds.
The full amount of the insurance premiums is borne by the Company. Next time, we plan to renew the insurance contract inJuly 2022.

13

<Reference> Management Structure After Approval of Proposals 2 (Planned)
Area of expertise and experience

TenureCategory

NameManageme

Finance andLegal/Busin

GlobalEnvironm

Health and

IT/DX/Inn

Diversity＆nt

accounting

ess/Riskmanagemen

ent/

SafetyovationInclusion

managementSolution

Solutionexperiencet

Jun Suzuki

9

〇

〇

〇

〇

〇

Akimoto

1

〇

〇

〇

〇

〇

3

〇

〇

〇

〇

〇

Uchikawa
Akihisa〇Nabeshima
Toshiya

2

〇

〇

〇

〇

〇

Director

KoyamaEiji Ogawa

2

Naohiko

1

〇

〇
〇

〇

Moriyama
YukakoOutside4〇

Outside4

Outside3〇

Outside

-

〇

〇

〇

〇

Uchinaga
Yoichi〇〇〇Suzuki
Masaru〇〇〇Onishi

Masaaki

〇

〇

〇

Tsuya
Masanori

3〇〇

Statutory Auditor

Shimai
Akio

2

〇

〇

〇

NakaishiGen

Outside7〇〇

Outside5〇

Outside2〇〇

IkegamiHitomi〇

Nakayama
Jun Arima〇〇

The table is not indicative of all the expertise and experience possessed by each individual.

14〇

Attached Reports
Reports on Operations for the 156th Fiscal Year (April 1, 2021 to March 31, 2022)
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
In FY2021, the spread of infections from the global COVID-19 pandemic and the resulting governmental
restrictions on people’s social and economic activities worldwide continued, as in the previous year. Althoughdemand was recovering mainly in the automotive and aircraft industries, supply chain operations remained sluggish
in various industries, while factors such as the semiconductor shortage and the rise in raw material and fuel prices
and logistics costs had massive adverse impacts on corporate performance. Moreover, the Russian invasion of
Ukraine has caused concern about the supply of energy, minerals, etc., and the resulting rise in their prices, adding
to economic uncertainties.
The Teijin Group has been implementing various measures envisioned in its its three-year Medium-Term
Management Plan for three-year from FY2020, whose period the Group positions as a period for creating growth
platforms toward sustainable growth, under its long-term vision of becoming “a company that supports the societyof the future” by contributing to realizing a sustainable world. In FY2021, the second fiscal year of the Plan, as
investments for enhancing profitability in the Materials Business Field toward the future even amid the COVID19 pandemic, the Group made capital investment in increasing its para-aramid fiber production capacity in the
Netherlands, and implemented two plant projects in North America: one to build a new automotive composites
plant in Texas and the other to put into operation a new carbon fibers plant. In the Healthcare Business Field, theGroup strove to strengthen its foundation for profitability and establish a new profit base for future businessexpansion by taking over the rights for the Japan sales of diabetes treatments from Takeda Pharmaceutical
Company Limited and making steady progress in the sales transfer. Furthermore, in the regenerative medicine
business, which the Group had entered as a field for inter-business collaboration, it worked with Japan Tissue
Engineering Co., Ltd. (hereinafter, “J-TEC”), the Group’s new subsidiary, to formulate a business plan and launch
new joint initiatives.
For FY2021, the Teijin Group’s net sales amounted to 926.1 billion yen, an increase of 10.7% year on year, andoperating income was 44.2 billion yen, a decrease of 19.5% year on year. Ordinary income was 49.7 billion yen, adecrease of 7.4% year on year, mainly due to the reduced equity in earnings of affiliates, and profit attributable toowners of parent was 23.2 billion yen (ref.: loss of 6.7 billion yen for the previous fiscal year) mainly due to therecording of impairment losses. Operating income in the Healthcare Business Field significantly increased due tostrong sales of FEBURIC and the favorable impact of the takeover of the sales rights for the diabetes treatments,
while the IT Business also remained solid operating income. Meanwhile, despite a recovery in demand mainly for
products for automotive and aircraft applications from the impact of the COVID-19 pandemic and the resulting
increase in the sales volume of those products, the Materials Business Field experienced a decrease in operating
income due to the semiconductor shortage, which became obvious in the second quarter, the sharp rise in raw
material and fuel prices and logistics costs, and production suspension caused by periodic maintenance and power
outages in a subsegment. The Fibers & Products Converting Business also suffered a decrease in operating income
due to the end of governmental demand for medical protective equipment (gowns).
15

As a result, ROE, an indicator of profitability, was 5.5%, far 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 5.5%, also lower
than the target (8% or higher) for the final fiscal year of the same Plan. However, EBITDA, an indicator of theability to generate cash, was 113.0 billion yen, higher than 106.8 billion yen for the previous fiscal year.
2) Financial status
Total assets at the end of the current fiscal year increased by 166.5 billion yen from the end of the previous fiscal
year 4 to 1,207.6 billion yen. Current assets increased by 37.4 billion yen from the end of the previous fiscal year
due to changes in cash, deposits, accounts receivable, and other current assets. As for fixed assets, increased by
129.0 billion yen from the end of the previous fiscal year. Tangible fixed assets increased by 32.7 billion yen due tocapital investment exceeding depreciation, and sales rights increased by 118.2 billion yen due to acquisition of sales
rights for type 2 diabetes treatments from Takeda Pharmaceutical Company Limited, and due to the partial returnof assets contributed to the retirement benefit trust, assets related to retirement benefits decreased by 22.8 billion
yen.
Liabilities increased by 132.0 billion yen from the end of the previous fiscal year to 742.8 billion yen. Interestbearing debt increased by 105.1 billion yen, mainly due to the issuance of corporate bonds to fund the acquisitionof sales rights.
Net assets increased by 34.4 billion yen from the end of the previous fiscal year to 464.8 billion yen. This was
mainly due to the recording of profit of 23.2 billion yen attributable to owners of the parent and the increase inforeign currency translation adjustment accounts due to the depreciation of the yen against major currencies.
As a result, the debt-to-equity ratio was 1.1 times and the equity ratio was 36.4%. (At the end of the previous
fiscal year, the debt-to-equity ratio was 0.9 times and the equity ratio was 39.0%)
The conversion rates of balance sheets at the end of the current fiscal year are 122 yen / US dollar, 137 yen / euro,
and1.12 US dollars / euro (111 yen / US dollar, 130 yen / euro, 1.17 US dollars / euro at the end of the previous
fiscal year).
Segment operating results (sales and operating income) of the Teijin Group are as follows.
(Billions of yen / %)Net sales

Materials

High-performance materials
Composites
Materials Sub Total

Operating Income

Healthcare
Fibers & Products Converting
IT
Others
Total
Materials
Healthcare
Fibers & Products Converting
IT
OthersElimination and corporate
Total

Fiscal 2020
210.4
86.6
297.0
148.7
314.9
58.1
17.8
836.5
1.0
31.5
17.5
10.4
△0.2
△5.2
54.9

16

Fiscal 2021
273.5
111.6
385.1
183.6
282.5
53.8
21.2
926.1
△5.7
43.2
5.6
9.7
△2.1
△6.4
44.2

Change
+63.1
+25.0
+88.1
+34.9
△32.5
△4.3
+3.3
+89.5
△6.7
+11.6
△11.9
△0.7
△1.9
△1.2
△10.7

Percentage
+30.0
+28.9
+29.7
+23.5
△10.3
△7.5
+18.6
+10.7
+37.0
△67.8
△6.7
△19.5

EBITDA ratio by segment
Segment
Material
Healthcare
Fibers & Products Converting
IT
Others
Total

Component ratio
21.1%
59.4%
10.2%
9.1%
0.1%
100.0%(erasure excludes company-wide)

Business Segment Results for fiscal 2021 were as follows:<Materials Business Field>

Although sales volume increased mainly in products for automotive and aircraft applications due to demand
recovery from the impact of the COVID-19 pandemic, the semiconductor shortage, the sharp rise in material andfuel prices and logistics costs, and periodical maintenance and production suspension in a subsegment had amassive impact on income. Mainly in response to the rise in material and fuel prices, selling prices were revised ineach subsegment.
Net sales were 385.1 billion yen, an increase of 88.1 billion yen (29.7%) year on year, while the operating loss was
5.7 billion yen (ref.: operating income of 1.0 billion yen for the previous fiscal year). EBITDA was 25.0 billion yen,a decrease of 6.5 billion yen year on year, while ROIC based on operating income was −2%.
In the aramid business, demand for Twaron para-aramid fibers, the major product in the business, recovered ineach market, mainly for automotive applications, resulting in an increase in sales volume of the product. Meanwhile,
production suspension was caused by major periodical maintenance in the first quarter, and its extension, andpower outages at the raw material plant in the third quarter, resulting in tight inventories and an adverse impact
on sales volume. Selling prices were revised upward in response to an increase in fuel costs due to the rise in natural
gas prices in Europe. As a result, the aramid business experienced a net-sales increase and an operating-income
decrease year on year.
The resin and plastic processing business suffered a slight decrease in sales volume due to the semiconductor
shortage and the decreased level of customers’ operations amid the COVID-19 pandemic. The business also revised
selling prices upward in response to the rising prices of raw materials and fuels, such as BPA, which is a main raw
material for the business. Consequently, the resin and plastic processing business achieved an increase year on year
in both net sales and operating income.
The carbon fibers business achieved an increase in the sales volume of TENAX carbon fibers for all applications,
including aircraft, wind power, and recreation applications. In addition, the business revised selling prices upward
in response to the rise in AN price that is the main material due to the tight supply-demand balance. As a result,the carbon fibers business achieved an increase year on year in both net sales and operating income. In FY2021,
the new plant in North America began operation and has since been developing intermediate materials for aircraft
applications toward the future.
In the battery materials business, the sales volume of LIELSORT, a separator for lithium-ion batteries (LIBs),
increased for smartphone applications. Moreover, the business has been earning licensing income from ongoingsales of separators for electric-vehicle LIBs, for which Teijin has licensed a coating technology. Consequently, the17battery materials business achieved an increase year on year in both net sales and operating income.
In the composites business, the continued production suspension of OEMs, major customers of the business, due
to the semiconductor and parts supply shortage influenced the production of SUV and pickup truck parts, on which
Teijin Automotive Technologies* focuses in the U.S. In addition, material prices remained high due to the tightsupply-demand balance, having a major impact on production costs. To address this situation, the composites
business negotiated with customers over selling prices and succeeded in reaching agreements with some customers
on the revision of selling prices for the fourth quarter and later. With the U.S. labor force participation rate, which
had remained low even after the end of the payment of additional unemployment benefits, starting to increase in
the second half of FY2021, the labor 2 shortage at Teijin Automotive Technologies US was gradually alleviated. As
a result, the composites business experienced a net-sales increase and an operating-income decrease year on year.
* Global business brand of the automotive composites business<Healthcare Business Field>

Sales of FEBURIC, the main product of the segment, and home healthcare equipment rental services remained
strong, while sales of diabetes treatments, for which the segment had taken over the sales rights, also remainedrobust. All these factors contributed to an increase in both net sales and operating income. Moreover, the segment
received milestone payment (one-off payment) for the Alzheimer’s treatment candidate that Teijin had licensed to
Merck & Co., Inc., United States, in 2017.
Net sales were 183.6 billion yen, an increase of 34.9 billion yen (23.5%) year on year, while operating income was
43.2 billion yen, an increase of 11.6 billion yen (37.0%) year on year. EBITDA was 70.5 billion yen, an increase of
26.8 billion yen year on year, while ROIC based on operating income was 20%.
In the pharmaceutical business, sales of the four type-2 diabetes treatments, for which Teijin had taken over thesales rights from Takeda Pharmaceutical Company Limited as of April 1, 2021, remained robust. In addition, salesof FEBURIC, the main product of the segment, and Somatuline,* a treatment for acromegaly, pituitary gigantism,and neuroendocrine tumors, increased promisingly. Moreover, the sales volume of XEOMIN, for which lower limb
spasticity was approved as an additional indication in June 2021, continued to increase steadily. Also, in December
2021, the segment received milestone payment (one-off payment) for the start of clinical trials of the Alzheimer’s
treatment candidate that Teijin had licensed to Merck & Co., Inc., United States, in 2017.
* Somatuline® is the registered trademark of Ipsen Pharma, France.

In the home healthcare business, restrictions on hospitalization to secure beds for COVID-19 patients resulted ina continued shift to home healthcare and an increase (of about 3% from the end of the previous fiscal year) in thenumber of rented oxygen concentrators in the home oxygen therapy (HOT) market. In the market for continuous
positive airway pressure (CPAP) therapy, the number of examinations recovered gradually, and the number ofrented CPAP devices continued to grow (by about 8% from the end of the previous fiscal year).
Consequently, the pharmaceutical business and the home healthcare business achieved an increase in both net
sales and operating income year on year.
The new healthcare business saw a recovery in the number of surgical operations with orthopedic implantabledevices, including artificial joints and absorbable osteosynthesis materials, and sales of new products of these kinds
18

grew steadily. However, mainly due to the preliminary costs of new businesses, including the comprehensive
community-based healthcare business, the new healthcare business experienced a net-sales increase and an
operating-income decrease year on year.
<Fibers & Products Converting Business>

Net sales were 282.5 billion yen, a decrease of 32.5 billion yen (10.3%) year on year, while operating income was
5.6 billion yen, a decrease of 11.9 billion yen (67.8%) year on year. EBITDA was 12.1 billion yen, a decrease of
11.8 billion yen year on year, while ROIC based on operating income was 4%.
The field of textiles and apparel generally faced difficulties due to the sluggish Japanese market and overseas plant
shutdowns, both of which were caused by the COVID-19 pandemic, as well as the sharp rise in material and fuelprices and logistics costs, despite a recovery in sales of materials and products for the European, North American,
and Chinese markets and sales of heavy clothing in the Japanese market. In the field of industrial materials, sales offilms and plastics for automotive parts and electronic parts remained strong, while sales of short polyester fibers forwater treatment filters also remained good. However, from the second quarter, the semiconductor shortage had an
impact on this field by causing a decline in automotive production volume. Despite the impact of the end ofgovernment demand for medical protective equipment (gowns), various efforts contributed to the business results,
including increasing basic profitability through the concentration on certain selected businesses and reducing
SG&A expenses by utilizing digital tools suitably for the pandemic situation. Furthermore, the segment revised
selling prices in response to the cost increase.
<IT Business>

Net sales were 53.8 billion yen, a decrease of 4.3 billion yen (7.5%) year on year, while operating income was 9.7
billion yen, a decrease of 0.7 billion yen (6.7%) year on year. EBITDA was 10.8 billion yen, a decrease of 0.5 billion
yen year on year, while ROIC based on operating income was 61%.
In the Internet business field, profit was secured by optimizing advertising costs despite a decrease in net sales in
e-comics services due to the end of specially high demand amid the stay-at-home trend in the previous fiscal year
and the continuous impact of piracy websites. In the IT service field, sales remained strong despite the lasting
impact of the COVID-19 pandemic. The decrease in operating income for the entire IT Business was caused mainly
by an increase in SG&A expenses due to office relocation.
<Others (including J-TEC and engineering)>

Net sales were 21.2 billion yen, an increase of 3.3 billion yen (18.6%) year on year, while the operating loss was 2.1
billion yen (ref.: operating loss of 0.2 billion yen for the previous fiscal year). EBITDA was 0.1 billion yen, adecrease of 0.6 billion yen year on year.
J-TEC obtained approval for the manufacturing and marketing of Ocural (the world’s first regenerative medical
product that cures limbal stem cell deficiency using oral mucosal epithelial cells) in June 2021. After the productwas listed in health insurance coverage in Japan in December 2021, the company started selling it. In addition, JTEC began clinical trials of allogeneic cultured epidermis in November 2021. Although sales in J-TEC’s
Regenerative Medicine Business and R&D Support Business grew, sales in its Custom Development &Manufacturing Business declined due to the end of its custom-development deal with Fujifilm Corporation, its
19former parent company and major customer. As a result, J-TEC experienced a decrease in net sales year on year.

(2) Changes in Assets and Profit and Loss
(Millions of yen)
Fiscal Period

153rdFiscal Period
FY2018154thFiscal Period
FY2019155thFiscal Period
FY2020156thFiscal Period
FY2021(Current period)

Net sales

888,589853,746

836,512926,054

Operating income

60,00056,20554,931

44,208

Ordinary income

60,26454,33753,65849,692

Profit attributable to owners of parent

45,05725,252△6,662

23,158Net earnings per share

232.39131.63△34.70120.58

Total assets

1,020,654

1,004,223

1,041,131

1,207,583

Net assets

427,212411,409430,364

464,811

Items

Note: In this consolidated fiscal year, the Company confirmed the provisional accounting treatment it had applied concerningbusiness combination during the previous consolidated fiscal year. Therefore, the figures for the previous consolidated fiscal
year reflect the confirmed accounting treatment.

(3) Capital investment
Capital investments by the Group in fiscal 2021 totaled ¥200.8billion, mainly for the purpose of the acquisitionof intangible assets by the transfer of Japan sales of type 2 diabetes treatments from Takeda Pharmaceutical
Company Limited and increasing the production capacity of aramid business and composites business.
(4) Financing
The Company procured finance borrowings from financial institutions, and the public issuance of Hybrid Bonds(Subordinated Bonds) and Straight Bond. Mainly due to the implementation of financing related to the transfer
of Japan sales of type 2 diabetes treatments from Takeda Pharmaceutical Company Limited, interest-bearing debt
amounted to \485.2 billion, an increase of \105.1 billion from the end of the previous year.
As part of the financing for the transfer of sales, The Company issued Hybrid Bonds (Subordinated Bonds) andreceived capital certification on 50% of the capital of \60 billion on July 21, 2021. The Company has improved its
temporarily deteriorating financial position and secure financial soundness supporting proactive investments in
Strategic Focus fields, which are expected to be future revenue sources.
(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 toachieve its long-term vision, which is to become “a company that supports the society of the future.” Inconsideration of global social issues and to achieve the SDGs, the Group has identified the five issues ofmateriality that it should address as priorities. By dealing with the issues and offering value to society mainly
through the following three solutions, we will contribute to the creation of a sustainable society while alsoenhancing our corporate value.
20

Three Solutions
Environmental Value Solutions

Safety, Security, and Disaster Mitigation
Solutions
Demographic Change and Increased
Health Consciousness Solutions

Provide products and services contributing to global environmental
goals such as prevention and adaptation of climate change andachievement of a circular economy
Provide products and services protecting lives and livelihoods fromvarious risks such as disasters and accidents
Provide products and services supporting healthy and comfortableliving for people of all ages

2) Issues to be addresseda) Medium-term management plan and Quantitative targets
In its medium-term management plan for 2020-2022, “ALWAYS EVOLVING,” (hereinafter, “the medium-term
management plan”), we regard the period for the plan as a time to create growth platforms. We will categorize thebusinesses that need further development to ensure future profitability as the “Strategic Focus” businesses, while
the businesses that are already profitable and will achieve further growth will be categorized as “Profitable
Growth” businesses, in which we will invest in a proactive manner. For our most important indicators, we use
ROE (group-wide) and operating income ROIC (group-wide and business-specific) as profitability indicators anduse EBITDA (group-wide and business-specific) as a growth indicator. For the quantitative targets in FY2022, wehave set an ROE of 10% or higher, an operating income ROIC of 8% or higher, and EBITDA of 150 billion yen.
To achieve these targets, we are investing to establish a business portfolio that will help us increase our corporate
value, while paying attention to our financial soundness and the capital costs.
b) Issues to be addressed
The COVID-19 pandemic has brought about drastic changes to the economy, people’s lives, and values at the
global level. Moreover, we are facing the shortage of semiconductors and also surges in materials prices, natural
gas prices in Europe, logistics cost and others, which are negatively affecting our revenues. In addition, due to thematerialization of political and geopolitical risks across the world, we are facing more uncertainties. Accordingly,
the actual business results for FY2022 (to be publicly announced in May 2022) will be lower than the quantitative
targets set in the medium-term management plan. In order to enhance the profitability of each business, we will21

implement necessary measures while evaluating each of the Teijin Group’s businesses for their positioning in theGroup and formulate the next medium-term management plan to establish a business portfolio that will help us
increase our corporate value.
<Trends of management indicators>■Materials Business Field
In the materials business, we are working to meet a range of social needs—including those for weight reductionin the mobility field and for environmental measures in materials and components—in our pursuit of morebusiness opportunities. We are strategically promoting the high value-added application of our materials byenhancing their functions and promoting the combined use of multiple materials. We are now facing a substantial
reduction in our profitability due to surges in materials/gas prices and logistic costs as well as in labor expenses inNorth America, and need to meet the challenge of recovering and improving our profitability in the materials
business.
【Strategic Focus area (for the development of future sources of earnings)】
Automotive composites
Carbon fiber Intermediate materials
for aircraft･Implement measures (for pricing, productivity and area strategy) topromptly recover profitability･Develop platform building, combined use of multiple materials and lifecycle
assessment for automotive components･Promote development to participate in new large projects for future aircraft【Profitable Growth area】
AramidResin and Plastic Processing

Carbon fiber･Maintain and enhance the leader position in the industry by developing
more applications･Generate the effect of expanding the line as early as possible･Maintain and increase profitability by expanding the lineup of high valueadded products･Generate the effect of newly establishing the manufacturing line in North
America as early as possible･Improve profitability by finding more profitable non-aircraft applications
and promoting sales for such applications■Healthcare Business Field
The Teijin Group aims to become a comprehensive healthcare service provider that offers localized products
and services throughout the cycle of preventive care/health promotion, treatment and rehabilitation/nursing care.
22However, we are now facing delays in the expansion of new businesses as we set forth in the current mediumterm management plan, including the implementation of M&A. Moreover, generic medicine of FEBURIC, one of
our core pharmaceutical drugs, will be put into market in FY2022, and we need to meet the challenge ofminimizing its influence over our profitability in the healthcare business.
【Strategic Focus area (for the development of future sources of earnings)】
New business related tocommunity-based integrated care
Functional foods･Launch new services in the community-based integrated care-related market
and enhance and expand the foundation of the community-based integrated
care system･Promote sales of existing products and steadily release new products to themarket【Profitable Growth area】

Pharmaceuticals
and Home Healthcare･Develop business in an optimal manner for the core pharmaceutical product(Type 2 diabetes treatments), oxygen concentrators for home oxygen therapy(HOT), and equipment for the continuous positive airway pressure (CPAP)
therapy･Reinforce the pipeline for pharmaceuticals and medical devices by utilizingbase of the community-based integrated care system･Integrate the organizations for pharmaceuticals and home healthcare toenhance their uniqueness and reform the business structure■Fibers & Products Converting business /IT Business【Profitable Growth area】
Fibers & Products ConvertingIT･Continue to implement measures to enhance the basic ability to earn,
including withdrawal from unprofitable business･Promote sustainability strategies to meet the environment-related needs
Expand the online business and make examinations for overseas businessexpansion･Promote new services in the nursing care and health promotion areas in thehealthcare business■Others【Strategic Focus area (for the development of future sources of earnings)】
New regenerative medicine
New implantable medical devices･Build a system for the CDMO business as well as a system to encourage
collaborations with J-TEC･Promote sales of implantable medical devices and generate synergies with
the new regenerative medicine business in the field of orthopedics

Note: Transferred from the Healthcare segment to the Others segment in fiscal 2022c) Response to climate change (Disclosure of information based on the TCFD recommendations)
The Teijin Group regards “Climate change mitigation and adaptation” as one of its issues of materiality and is
striving to contribute to promoting a shift to a decarbonized society by capitalizing on its technologies for weight
reduction and higher efficiency, while also working to reduce the greenhouse gas emissions from its own businessactivities.
■GovernanceIn issues related to climate change, the Total Risk Management (TRM) Committee* deliberates on the policies
and plans to address the issues and report the progress with its activities to the Board of Directors, which is
guiding and supervising the Committee.
*The TRM Committee is chaired by the CEO and manages both risks related to management strategies and those related to business■ Strategy
We will find more opportunities for business growth through the implementation of climate change mitigation
measures and provide “Environmental Value Solutions” with a focus on weight reduction and durability
23

enhancement in the mobility field based on the use of highly functional and high value-added materials. In
climate change adaptation, we will work to offer “Safety, Security, and Disaster Mitigation Solutions” that will
help reduce damage and speed up recovery in case of a natural disaster. To this end, we will offer highly
functional materials for infrastructure reinforcement and provide related technologies and services in thehealthcare and IT fields. On the other hand, in order to reduce the environmental impact of our own businessactivities, we will work to discontinue the use of coal-derived energy, conserve more energy, increase the use ofrenewable energy, and develop technological innovations, including process innovations.
■ Risk management
We regard climate change-related risks as the most serious risks in our TRM activities, and are managing thetransition risk (including an increase in the cost to comply with the legal regulations) and the physical risk (rises
in temperature and sea level) faced by Group companies under the TRM system.
■ Indicators and goals
In order to speed up the measures to achieve net zero CO2 emissions, we have raised the FY2030 reduction
target for emissions from our own Group from 20% to 30% relative to the FY2018 level.
Furthermore, we set a new reduction target for greenhouse gas emissions from our supply chain, specifically to
reduce the emissions by 15% from the FY2018 level by FY2030.
Item

FY

Contribution *2 to reducing CO2 *1emissions

2030

Achieve:
Contribution to reduction > Total emissions
30% reduction relative to the FY2018 level(in total amount)2030

CO2 emissions from the Teijin GroupCO2 emissions from our supply chain *Target3

2050

Net zero emissions

2030

15% reduction relative to the FY2018 level*1. Includes not only CO2 but also methane and nitrous oxide emissions*2 CO2 emission reductions achieved by the use of our products in the downstream area of the supply chain were calculated as thecontribution amount.
*3 Scope 3 emissions excluding Category 1 emissions (from purchased goods and services) in the trading business

Also, in order to minimize the negative environmental and social impact of our business activities, we have set
the numerical targets not only for CO2 emissions but also for the intake of freshwater, release of hazardous
chemical substances, and the amount sent to landfills for the creation of a circular economy.
d) Enhancement of the business foundation
In order to provide solutions in a continuous and appropriate manner and encourage market development, theTeijin Group is enhancing its foundation to create innovation from the perspectives of “organization,”“synergies,” “technology” and “human resources,” and is accelerating the creation of business opportunities.
In “organization” and “synergies,” the 2021-established Corporate Business Incubation Division is leading theexamination and implementation of M&A and alliance projects on a firmwide and long-term basis, while
searching for and developing next-generation business fields and conducting R&D and new businessdevelopment activities to build the foundation for innovation. We will promote co-creation across the materials,
healthcare, IT, fibers and products converting businesses and also outside of the Group to expand the lineup of
innovative products and services that we would not be able to create on our own.
In “technology,” we are pushing ahead with digital transformation (DX) to reform our business model. As partof this effort, we are promoting collaboration with Infocom Corporation, which is playing the central role in our
IT business. We are also implementing measures for “new normal” environments, including those for the24

provision of location-free and various other workstyles, enhancing R&D by materials informatics (MI), andworking to develop smart plants. Furthermore, we are conducing joint research with academic organizations anddeveloping intercompany cooperation for the effective use of big data and digital technologies to create newservices and businesses. In addition, to create and acquire intellectual property, we are strategically andobjectively identifying the core technologies that will be our sources of competitiveness based on detailed analysis
of our business environment. By using the IP landscaping method, we regularly evaluate the intellectual
properties possessed by the Teijin Group to optimize the portfolio of these properties in line with ourmanagement strategy.
In “human resources,” we aim to provide people who have diverse values and experiences with workplaces
where they can demonstrate their abilities to the fullest and collaborate with each other in a range of manners for
speedier innovation. To this end, we have formulated an action plan to develop diversity and inclusion (D&I) on a
global level with a focus on 1) personnel system reforms, 2) global talent management, and 3) work style reforms.
For the Teijin Group to conduct business activities globally, it is essential to make use of the abilities provided bypeople who have different backgrounds in terms of race, religion, gender, culture and other factors. Based on thisrecognition, we will press forward with the diversification of our workstyles and human resources as well as withthe empowerment of women. For example, in addition to setting KPIs to promote the diversity of executives, wehave set regional strategies and KPIs according to the status of issues in each region not only in Japan but also
globally, and take actions toward their realization. As a leadership development program to develop future leaders
who will lead the global management of the Teijin Group, a mentor system by management, a new evaluation
system for core human resources, and a KPI (25%) on the ratio of female and non-Japanese candidates has also
been introduced.
3) Social Contribution Activities
In January 2021, the Teijin Group revised the Teijin Group Basic Policies for Social Contributions in order tomeet the expectations and requests from our stakeholders, which have been changing in line with changes insociety. The Teijin Group will value harmony with nature and achieve growth with local communities according
to the Policies. To this end, we are conducting appropriate social contribution activities as a good corporate
citizen, in line with our business and respecting the local uniqueness of each area in which we operate. We
conducted the following social contribution activities in FY2021.
For people facing difficulties in Ukraine and those who were forced to evacuate the country, we have been
providing humanitarian aid based on the Teijin Group Human Rights Policy, which states, “respect every
human’s dignity and rights.”
In order to provide support to the development of younger generations in the academic, education and sports
fields, we have supported a total of nearly 1,700 students specializing in engineering fields through the Teijin
Kumura Scholarship provided by the Teijin Scholarship Foundation for about 70 years. Moreover, we aresupporting young people’s sports activities by co-sponsoring the All Japan High School Soccer Tournament aswell as supporting the Children’s Rights in Sport Principles announced by the Japan Committee for UNICEF. In
addition, we are continuously implementing a range of systems to support employees’ volunteer activities.

25

(6) Primary Businesses(As of March 31, 2022)
Business Segments

Business area

Principal Products and Businesses

Resin and Plastic Processing

Para-aramid fibers, Meta-aramid fibers,
High-performance polyethylene
Polycarbonate resin, Polycarbonate sheets & films, PET・
PEN ･PBN resin, PPS resin, Frame-retardant
Carbon fibers, Oxidized PAN fibers, Carbon fibers
intermediate materials (Prepreg etc.)

AramidMaterials

Highperformancematerials

Composites

Carbon Fibers
Material New Business

Lithium-ion battery separators, high-performance membrane

Composite products

The automotive composite products

Pharmaceuticals

Healthcare
Home Healthcare

Healthcare New BusinessTextiles and Apparel
Fibers & Products
Converting

Industrial Textiles andMaterials

Business solution
IT
Digital entertainment

OthersOthersPrescription Drug: Treatment for Hyperuricemia and gout,Type 2 diabetes treatments, Agent for Osteoporosis, Agentfor Infection, Sustained-release expectorant, Transdermal
analgesic anti-inflammatory, Treatment for acromegaly andpituitary gigantism, Botulinum toxin type A
Home Health Care Services: Oxygen Concentrator for Home
Oxygen Therapy (HOT), Continuous Positive Airway
Pressure Unit (CPAP), Bilevel Positive Airway Pressure
Unit, Ultrasound Bone Fracture Treatment Device
Medical devices for artificial joints, osteosynthesis materials,
spinal implants etc.,
Yarns, Textiles, Apparel products, General merchandise
Polyester Fiber materials, Nonwoven Fabrics, Automotive
materials, Industrial materials, Civil engineering andConstruction materials, Tents and Heavy cloths, Resin, films,
Living and interior products, Healthcare products
Information system for general companies, Information
system for hospital, Information services for nursing careprovidersElectronic comics delivery service
Engineering services, design and sales of plants andequipment
Regenerative Medicine Products (including Contract
Development & Manufacturing service), Cultured Human
Tissue for Research Use

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

(7) Primary Business Places(As of March 31, 2022)

Business
The Company

Function
Headquarters
Manufacturing
bases

Osaka, Tokyo
Shizuoka, Gifu, Ehime, Hiroshima, Yamaguchi
the Netherlands, Germany, Thailand, Vietnam, China, South
Korea, U.S.A.
Tokyo, Osaka Aichi

High-performancematerials

Location

Operation basethe Netherlands, Germany, Russia, Malaysia, Singapore, India,
Thailand, Vietnam, China, Taiwan, South Korea, U.S.A.,

Materials

Mexico, Brazil
Research bases

Composites

Ehime, Gifu

bases

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

Operation bases

Tokyo
Portugal, Czech, U.S.A., Mexico, China
Ehime
Germany, France, U.S.A.

Manufacturing

Yamaguchi, Hyogo, Okayama

bases

China

Operation bases

18 branches and 129 sales offices throughout Japan

Research bases

Manufacturing
bases

Tokyo, Okayama, Yamaguchi
U.S.A.
Ehime,

Ishikawa,

Fukui,

Niigata,

Gifu,

Shiga,

Hyogo,

Yamaguchi, Hiroshima, Shimane, Fukuoka
China, Thailand, Vietnam, Germany, Hungary
Tokyo, Osaka, Aichi, Niigata, Fukui

Fibers & Products
Converting

the Netherlands, Germany, Thailand, China, U.S.A.

Manufacturing

Research bases

Healthcare

Tokyo, Chiba, Shizuoka, Ehime, Yamaguchi

Operation bases

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

Research bases

Ehime
China, Thailand

IT

Operation bases

OthersManufacturing
bases

Tokyo, Osaka, Kanagawa, Fukuoka
Aichi

Operation bases

Tokyo, Osaka Aichi, Ehime, Yamaguchi

Research bases

Tokyo, Aichi

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
Business segments

155th Fiscal Period
FY2020(As of March 31, 2021)

Materials

9,816

156th Fiscal Period
FY2021(As of March 31, 2022)(Current period)
10,451

Healthcare

3,508

3,594

+86

Fibers & Products Converting

5,552

5,505

△47

IT

743

740

△3

Others

1,471

1,525

+54

Total

21,09021,815+725

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(2,245 employees for the 155th fiscal period and 2,077 employees for the 156 th fiscal period)

Number and ratio of employees by regionArea

156th Fiscal Period(as of March 31, 2022)
Number of people
Ratio (%)

Japan

9,654

44

Americas

5,061

23

Europe and others

2,799

13

Asia

4,301

20

28

Change in thenumber of
employees+635

(9) Significant Subsidiaries(As of March 31, 2022)
Business
Subsidiarysegments(Location of The Head Office)CapitalInvestment
ratio (%)

High-

Teijin Aramid B.V.

0.02 million

performance(the Netherlands)euromaterial

Teijin Corporation (Thailand)

2,367 million

Limited (Thailand)
Teijin Carbon Europe GmbHbaht
0.026 million(Germany)

euro

Materials

Teijin Carbon Fibers, Inc.

US$160.0(U.S.A.)
Teijin Polycarbonate China

million
720 million

Ltd. (China)
Teijin Chemicals Plastic
Compounds Shanghai Ltd.

RMB
143 million
RMB(China)Composites

Teijin Automotive

US$830Technologies NA Holdings
Corp.
Healthcare

million(U.S.A.)

Teijin Pharma Limited¥10,000(Tokyo)million※100.00※100.00※100.00※100.00
100.00Principal business
Production and sales of paraaramid fibers
Production and sales ofmeta -aramid fibers and resin
Production and sales ofcarbon fibers
Production of carbon fibers
Production of polycarbonate
resin
Production of polycarbonate

100.00resin compound
Production and sales of※100.00

Composite products
Production and sales of

100.00medicinal drugs and medical
equipment

Teijin Healthcare Limited

Information provision(Tokyo)¥100
millionactivities for pharmaceutical※100.00

products and Home healthcare services
providerFibers & Products

Teijin Frontier Co., Ltd¥2,000Converting(Osaka)millionNantong Teijin Co., Ltd.

\4,000(China)millionTeijin Polyester (Thailand)IT

548 million

Limited (Thailand)

baht

Infocom Corporation¥1,590(Tokyo)millionAmutus Corporation (Tokyo)¥150
million

Others100.00※100.00※67.61
57.98※57.98

Production and sales oftextiles and others
Production and sales ofpolyester textile goods
Production and sales ofpolyester fibers
Development and sales ofcomputer software, etc.
Internet businessJapan Tissue Engineering Co.,

Development,

Ltd. (Aichi)

Manufacturing, Sales, and\4,959million

57.72

CustomDevelopment/Manufacturing
for Regenerative Medicine
and Related Products

Note 1: The Teijin Group has 96 consolidated companies including the aforementioned 15 significant subsidiaries; 67 companies areaccounted for via the equity method.
Note 2: ※ indicates the investment ratio including investment by subsidiaries.
Note 3: Continental Structural Plastics Holdings Corporation changed its trade name to Teijin Automotive Technologies NA
Holdings Corp from October 2021.

29

(10) Primary Lenders and Amount of Borrowings(As of March 31, 2022)
Primary Lenders

Balance of borrowings (Millions of yen(

MUFG Bank, Ltd

133,329

Mizuho Bank, Ltd.

38,353Development Bank of Japan Inc.

25,000Note 1: The balance of borrowings includes loans from overseas affiliate banks of the Primary Lenders.
Note 2: In addition to loans indicated in the balance of borrowings above, the Company borrows\90,937million under syndicated loans.

2. Matters Regarding the Shares of the Company (as of March 31, 2022)(1) Authorized shares

600,000,000 shares(2) Issued shares

197,953,707 shares(3) Number of shareholders

99,037(4) Top 10 shareholders of the Company
Shareholders

Investment in the Company
Number of shares held

Shareholding ratio (%)

1

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

33,714,600

17.54

2

Custody Bank of Japan, Ltd. (Trust account)

10,816,000

5.62

3

Nippon Life Insurance Company

7,045,501

3.66

4The Employee Stock Ownership Association of Teijin

5,988,211

3.11

5

SSBTC CLIENT OMNIBUS ACCOUT

3,237,854

1.68

6

MUFG Bank, Ltd.

2,897,287

1.50

Custody Bank of Japan, Ltd. (Investment funds as

2,885,399

1.50

2,841,500

1.47

JP MORGAN CHASE BANK 385781

2,422,874

1.26

STATE STREET BANK AND TRUST COMPANY

2,072,840

1.07

7
8
9
10

collateral)
BNYMSANV AS AGENT/CLIENTS LUX UCITS NON
TREATY 1

505223

Note: The shareholding ratio has been calculated after excluding Treasury stocks (5,834,283shares) from the Issued shares.

(5) Status of shares granted to Company officers during the fiscal year as consideration for performance of duties

Directors (excluding Outside Directors)

Class and number of shares

Number of Persons

Ordinary shares of the Company 26,138 shares

6 personsNote1: No stock compensation is granted to any Outside Directors and Statutory Auditors.
Note2: The details of the Company's stock-based compensation are described in 5. Directors and Statutory Auditors.

30

3. Stock Acquisition Rights(1) Outline of Stock Acquisition Rights as Stock Options
1) Number of stock acquisition rights
The maximum number of stock acquisition rights allocated to Directors for one year from the date of theOrdinary General Meeting of Shareholders each year is 200.
2) Amount to be paid-in for stock acquisition rights
The fair value of stock acquisition rights shall be calculated using the closing price on the allotment date basedon the Black-Scholes model.
3) Number of shares to be issued upon exercise of stock acquisition rights
The number of shares to be issued upon exercise of one stock acquisition right (hereinafter the “number ofshares to be granted”) shall be 200 shares. However, if the Company conducts a stock split or stock consolidation,or if there are other unavoidable 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 rights
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, aproposal for approval of a share exchange agreement in which the Company becomes a wholly owned subsidiary,or a proposal for share transfer is approved at a General Meeting of Shareholders of the Company, the Company
can acquire stock acquisition rights without contribution.
8) Main conditions for exercising stock acquisition rights
Stock acquisition rights holders may exercise stock acquisition rights for only five years from the date of loss of
position as a Director of the Company, its subsidiaries and its affiliates.
9) Other details pertaining to stock acquisition rights (including other matters from those in 1) – 8) above)
Determined by resolution of the Board of Directors.

31

(2) Status of Stock Acquisition Rights as stock option as of the last day of the subject Fiscal Year as aconsideration for the performance of the duties
Time of Issue (Issue date)

Number ofIssued Stock
Option (unit)

Class and Number of
Shares (Common
Stock) to be acquiredby the Stock Option

Issue Price ofStock Option(per share)

Exercise Priceof Stock
Option (pershare)

Period during which the Stock Option
may be exercised

8th (Jul. 9, 2009)

420

84,000¥1,265¥1

Jul. 9, 2009~Jul. 8, 2029

9th (Jul. 9, 2010)

349

69,800¥1,305¥1

Jul. 9, 2010~Jul. 8, 2030

10 (Mar. 12, 2012)

737

147,400¥1,225¥1Mar. 12, 2012~Mar. 11, 2032

11th (Mar. 15, 2013)

698

139,600¥980¥1Mar. 15, 2013~Mar. 14, 2033

12th (Mar. 14, 2014)

618

123,600¥1,140¥1Mar. 14, 2014~Mar. 13, 2034

13th (Mar. 18, 2015)

379

75,800¥1,925¥1Mar. 18, 2015~Mar. 17, 2035

14th (Mar. 16, 2016)

274

54,800¥1,800¥1Mar. 16, 2016~Mar. 15, 2036

15 (Mar. 17, 2017)287

57,400¥1,955¥1Mar. 17, 2017~Mar. 16, 2037

16th (Mar. 16, 2018)

294

58,800¥1,732¥1

Mar. 16, 2018~Mar. 15, 2038

17th (Mar. 18, 2019)

321

64,200¥1,627¥1Mar. 18, 2019~Mar. 17, 2039

18 (Mar. 16, 2020)

266

53,200\1,138¥1Mar. 16, 2020~Mar. 15, 2040

19th (Mar. 15, 2021)

394

78,800\1,725\1Mar. 15, 2021~Mar. 14, 2041

th

th

th

Of the above, total number of unexercised Stock Option held by Directors and Statutory Auditors of the Company (breakdown by
each issue of the Stock Option)(As of March 31, 2022)

Issue

Directors

Statutory Auditors

NumberNumber of

Number of

Number of Statutoryof Units

Directors Holding

Units

Auditors Holding Rights

RightsThe 11 Issue of the Stock Option

15

1

−

−

The 12th Issue of the Stock Option

28

2

−

−

The 13th Issue of the Stock Option

37

2

−

−

The 14 Issue of the Stock Option

39

3

−

−

The 15th Issue of the Stock Option

44

4

7

1

The 16th Issue of the Stock Option

67

6

8

1

The 17th Issue of the Stock Option

89

6

10

1

The 18th Issue of the Stock Option

73

6

8

1

The 19 Issue of the Stock Option

119

6

−

th

th

th

Note 1: No Stock Option is granted to any Outside Directors and Statutory Auditors.
Note 2: The Stock Option held by the Statutory Auditor was distributed as a consideration of performance of duties as Corporate
Officer prior to assuming the position of Statutory Auditor.

(3) Other important matters concerning Stock Acquisition Rights
The Zero Coupon Convertible Bonds due 2021 (bonds with stock acquisition rights) that were issued based on
the resolution of the meeting of the Board of Directors held on November 26, 2014 expired on November 26,
2021 and matured on December 10, 2021.

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 our responsibilities to other various stakeholders, we are striving tostrengthen corporate governance. Basic elements of corporate governance include the aim of enhancing
transparency, ensuring fairness, accelerating decision-making, and ensuring monitoring and supervisionindependence. We are working to establish and strengthen an effective corporate governance system through“Advisory Board”, “Executive officer system and board of directors including independent outside directors” andan “Auditor system including independent outside corporate auditors”.
From April 1, 2022, the nomination/compensation advisory function for the CEO and Chairperson wastransferred from Advisory Board to the Nomination Advisory Committee/ the Compensation Advisory
Committee. The nomination / compensation advisory functions for all Member of the Boards including the CEO
and the Chairperson of the Board were unified into the Nomination Advisory Committee/ the Compensation
Advisory Committee. The corporate governance system is as indicated below.
(As of April 1, 2022)(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 thecurrent social and legal environment. Under the current Companies Act, the board of directors is required toproperly function in terms of both the important business decisions and the monitoring and supervision functionsof management. We have determined that a governance system centered on the two wheels of business execution
led by the internal directors (limited to executive directors), and management oversight and supervision functions
that the outside directors and the chairperson of the board of directors emphasize and the functions of thestatutory auditors and the board of statutory auditors, is appropriate. We will continue to be a company having aboard of statutory auditors for the time being. In addition to the fact that the statutory auditors comprising theboard of statutory auditors are independent and can exercise their authority independently, the Company has
33granted the Board of Corporate Auditors and Corporate Auditors “utilization of the maximum source ofmonitoring authority for the Board of Directors”; and by seeking “active and constructive opinions at the Boardof Directors,” the Board of Corporate Auditors continues to have a more effective auditing function for the Boardof Directors. As a result, corporate governance similar to the strengthening of monitoring and supervisionfunctions that is aimed for by a company with a nominating committee, etc., will be substantially achieved at theCompany through “the Advisory Board”, “the Board of Directors including Independent Outside Directors andexecutive 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 andoverall plan of the entire Teijin Group, in addition to the matters stipulated in laws and regulations and the
Articles of Incorporation, 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. Currently, theCompany’s Board of Directors comprises 10 members. There are 4 Outside Directors who satisfy all therequirements of Independent Director stipulated by the Company with 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 (Management Consultative Committee)
The Advisory Board has been set up with the aim of providing general management advice from a broad andlong-term 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 mediumterm plans)b) Matters concerning corporate governance, CSR, 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 foreign
experts), the Chairperson of the Board(vacant if absent), and the CEO as members. The Outside Director, who isthe chair of the Board of Directors, chairs the Advisory Board.
Note: From April 1, 2022, the Advisory Board will be chaired by an outside director who is the chair the Boardsof Directors.
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 theBoard of Directors.
34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 the Chairperson of the Board )ⅳ）Selection and retirement of Statutory Auditor candidateⅴ）Matters concerning promotion / demotion, appointment / retirement of Outside Director and management
executivesⅵ）Matters concerning independence standards for Outside Director and Outside Statutory Auditorⅶ）Selection of CEO successor candidates and CEO training plans for successor candidates, and review ofprogressb) 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 CEO, the CEO leaves the room and does not participate in thediscussions. For matters concerning the Chairperson of the Board as well, the Chairperson of the Board leaves theroom and does not participate in the discussions.
Each Advisory Committee is made up of four Outside Directors, the Chairperson of the Board (vacant if absent)
and the CEO. The Outside Director, who is the chairperson of the Advisory Committee, chairs both Advisory
Committees.
4) Board of Statutory Auditors
The Company’s Board of Statutory Auditors have expertise and experience in law, finance, accounting, etc., andaudit the performance of duties by the Directors. The Company’s Board of Statutory Auditors consists of fivemembers, and three of them, who make up a majority, are Independent Outside Statutory Auditors (including
one female member), who satisfy all the requirements of the Independent Statutory Auditor stipulated by theCompany. In order to enhance the effectiveness of group-wide oversight, the Committee of Teijin Group
Statutory Auditors, which comprises the statutory auditors of Group companies and other members, is held
regularly. The Teijin Group Auditors Office, which is under the direct control of full-time Statutory Auditors, hasbeen established as an organization to assist the duties of Statutory Auditors, and as of March 31 2022, 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, 2022, the number of internal auditors in the Teijin Group totaled 22(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, 3 years), Takeharu Kirikae (KPMG AZSA LLC, 7 years), Yoshihiro
35

Uehara (KPMG AZSA LLC, 1 year).
The status of assistants who executed auditing is as follows.
Certified Public Accountants 21, others 18, for a total of 39.
7) Total Risk Management
The Company has in place a Total Risk Management (TRM) system targeting both strategic and operationalrisks, as a preventative 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 same time, the Board of Directors formulates our 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*The details of the Teijin Group’s “Corporate Governance Guide” (the Company’s Corporate Governance System) can be viewed
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 “Boardof Directors Effectiveness Evaluation”) once a year. The method of the Board of Directors EffectivenessEvaluation for FY2021 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 were conducted for certain Directors and Statutory Auditors (in total 4 persons) by external experts
based on the self-evaluation 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 thequestionnaire 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 41 questions) were compiled from the following eight
fields. Respondents evaluated 41 points on a five-step scale and made comments (including any additionalcomments field).
ⅰ) Strategies and execution thereofⅱ) 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 by the above process found that there36

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 in the previous fiscal yearⅰ) Deepening discussions on business creation utilizing data and digital technology
At the Board of Directors held in this fiscal year, we set up a forum for discussions on the status of digitaltechnology utilization, confirmed the status of digital technology utilization in each business, and discussed theideal form of the Teijin Group's core system. After clarifying the vision for the formulation of the next mediumterm management plan, it was confirmed that further discussions are needed on the direction of the strategy andfuture resources to be invested.
ⅱ) Deepening discussions on business portfolios
At the Board of Directors held in this fiscal year, we set up a forum for discussions on “portfoliotransformation,” discuss portfolio valuation methods and future portfolio directions, and confirmed that it isnecessary to deepen discussion on business portfolio in the future, which links the discussion with theformulation of the next medium-term management plan. In addition, at the discussion on “verification of therationality of parent-child listing and examination of possible options,” from the viewpoint of maximizing thecorporate value of the Teijin Group, Infocom Co., Ltd. and Japan Tissue Engineering Co., Ltd., it is confirmed
the rationality of maintaining the listing of Infocom Co., Ltd. and Japan Tissue Engineering Co., Ltd., andshared possible options for delisting the parent and child. The Board of Directors in FY2022 will continue todiscuss the rationality of maintaining the listing.
ⅲ) Deepening discussions on issues obtained from stakeholder dialogue analysis
At this fiscal year's Board of Directors, we set up a forum for discussions on the “Stakeholder Communication
Report.” Shares were held on stock prices, valuation status, and comments obtained from investor dialogue
activities, and issues that could be extracted from the comments were discussed.
At the Board of Directors held in this fiscal year, we plan to deepen discussions on issues obtained fromstakeholder dialogue analysis.
ⅳ) Review the agenda of the Board of Directors and enhance discussions on management strategies
The agenda items of the Board of Directors are decided, except for agenda items that occur suddenly during
the period, after agenda items such as those raised as issues by the Board of Directors Effectiveness Evaluation
are added to regular agenda items such as settlements of accounts, and confirmation was made with the
Chairperson of the Board of Directors at the beginning of the period.
At the Board of Directors held in this fiscal year, we set a number of agenda items related to management
strategies, such as “Discussion on Portfolio Transformation” and "Policy for Formulating the Next MediumTerm Management Plan," and discussed the future of the Teijin Group. In FY2022, we will work to deepen
discussions on management strategies as well as the next medium-term management plan.
3) Issues recognized in the Evaluation of the Effectiveness of the Board of Directors and future efforts
In FY2022, as a result of discussions at the Board of Directors based on this Board of Directors EffectivenessEvaluation, we will recognize the following as issues in particular, and will further promote efforts to addressthese issues together with discussions on the next medium-term management plan.
ⅰ) Discussions on business creation utilizing data and digital technology
37ⅱ) Discussions on business portfolioⅲ) Discussion on rationality of parent-child listingⅳ) Discussion on BCP including supply chainⅴ) Discussion on allocation of management resources to human capital / intellectual property, etc.
The Company aims to increase the effectiveness of the Board of Directors and further strengthen corporate
governance through these measures.
(4) Basic Policy Concerning Cross-Shareholdings
1) 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 isappropriate to hold shares based on an examination of the holding purpose and rationality for each individual
stock from a medium- to long-term perspective. In these reviews, the Board of Directors takes into account acomprehensive range of factors, including significance from a management strategy standpoint and business
relationships, in addition to comparing dividends, transaction amounts, and other 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 this process, the Company endeavors to reduce cross-shareholdings.
2) 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 termand determines whether to vote for or against.

38

5. Directors and Statutory Auditors(1)Directors and Statutory Auditors(As of March 31, 2022)
Post

Name

Duty, state of significant positions

Participation

concurrently held at other companies
President, &Jun Suzuki

CEO (Chief Executive Officer)

Representative

The Board of Directors
12/12(100%)

Director
Representative

Akihisa Nabeshima

CFO (Chief Financial Officer)

Director,

The Board of Directors
12/12(100%)

Executive Officer
Director,

Toshiya Koyama

Chief Social Responsibility Officer

Executive Officer
Director,

12/12(100%)
Eiji Ogawa

Chief Officer, Corporate Strategy

Executive Officer
Director,

The Board of Directors
The Board of Directors
12/12(100%)*Naohiko Moriyama

Executive Officer

President, Healthcare Business of Teijin

The Board of Directors

Group

9/9(100%)

General Manager, Healthcare New Business
Division
Director,*Akimoto Uchikawa

Executive Officer
Director

Fumio Ohtsubo

President, Material Business of Teijin

The Board of Directors

Group

9/9(100%)

Panasonic Corporation Special Advisor

The Board of Directors
12/12(100%)

Director

Yukako Uchinaga

Board Chair, Japan Women’s Innovate

The Board of Directors

Network

12/12(100%)

President & CEO, Globalization ResearchInstitute Co., Ltd.
Outside Director, HOYA CORPORATION
Outside Director, SINTOKOGIO, LTD.
Director
Director

Yoichi Suzuki
Masaru Onishi

Outside Director, KAJIMA

The Board of Directors

CORPORATION

12/12(100%)

Outside Director, Mitsui O.S.K. Lines, Ltd.

The Board of Directors

Outside Director, Kadoya Sesame Mills

12/12(100%)

Incorporated
Full-time

Masanori Shimai

The Board of Directors

Statutory Auditor

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

Full-time

Akio Nakaishi

Statutory Auditor, Infocom Corporation

Statutory Auditor

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

Statutory Auditor

Gen Ikegami

Representative, Gen Ikegami Certified
Public Accountant Office, Certified Public

39

The Board of Directors

Post

Name

Duty, state of significant positions

Participation

concurrently held at other companies
Accountant

12/12(100%)

Outside Director, TAC Co., Ltd.

The Board of Statutory

Outside Director, SUMIDACORPORATION
Statutory Auditor

Hitomi Nakayama

Auditors
12/12(100%)Partner lawyer, KASUMIGASEKI-SOGO

The Board of Directors

LAW OFFICES

12/12(100%)

Outside Director, ROYAL HOLDINGS
Co., LtdThe Board of Statutory
Auditors
12/12(100%)

Statutory Auditor

Jun Arima

Project Professor, Graduate School of

The Board of Directors

Public Policy, the University of Tokyo

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

Note 1: The Directors marked with * were newly elected at the 155 th Ordinary General Meeting of Shareholders held on June 23,
2021.
Note2: 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 companies at which the above mentioned Outside
Statutory Auditors hold positions as director/ statutory auditor etc.
Note 4: Four (4) Directors—Fumio Ohtsubo, Yukako Uchinaga, Yoichi Suzuki and Masaru Onishi —are Outside Directors. The
Company requires the candidate for outside director to satisfy the requirements of “Independent Director” stipulated by theCompany. These four (4) Directors satisfied all such requirements and maintained their independence throughout therelevant fiscal year. 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 the stock exchanges. The contents of therequirements 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 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. These three (3) Statutory Auditors satisfied all such requirements and maintained their
independence throughout the relevant fiscal year. 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 the stock
exchanges. 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 thefinance and accounting-related department 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.

40Note 8: The following Director retired as of June 23, 2021.
Director Yoshihisa Sonobe
Note 9: Changes in posts and duties of Directors during the subject fiscal year are as follows.

Name

New Post

Former Post

Date of Change

Akihisa Nabeshima

Representative Director

Director, Executive Officer

April 1, 2021

Executive Officer

President, Healthcare Business

CFO (Chief Financial Officer)of Teijin Group

Director, Executive Officer
Toshiya Koyama

Director, Executive Officer,

Director, Executive Officer,

Chief Social Responsibility

President, Material Business of

Officer

Teijin Group

April 1, 2021

Responsible for Corporate Audit
Department
Eiji Ogawa

Naohiko Moriyama

Director, Executive Officer

Director, Corporate Officer

Chief Officer (Corporate

Chief Officer (Corporate

Strategy)

Strategy)

Executive Officer, Teijin Group

Corporate Officer, Teijin Group

President, Healthcare Business

General Manager, Healthcareof Teijin GroupNew Business Division

April 1, 2021

April 1, 2021

General Manager, Healthcare
New Business Division

Akimoto Uchikawa

Director, Executive Officer

Executive Officer, Teijin Group

President, Healthcare BusinessPresident, Healthcare Businessof Teijin Groupof Teijin Group

General Manager, Healthcare

General Manager, Healthcare

New Business Division

New Business Division

Executive Officer, Teijin Group

Corporate Officer, Teijin Group

President, Material Business ofGeneral Manager, Composites

Teijin Group

Business Unit

Director, Executive Officer

Executive Officer, Teijin Group

President, Material Business of

President, Material Business of

Teijin Group

Teijin Group

June 23, 2021

April 1, 2021

June 23, 2021

Note 10: Changes in posts and duties of Directors following the subject fiscal year are as follows.

Name

New Post

Former Post

Date of Change

Jun Suzuki

Chairperson of the Board,

President & Representative

April 1, 2022

Director

Director CEO (Chief Executive
Officer)

Akimoto Uchikawa

President & Representative

Executive Officer, Director

Director CEO (Chief Executive

President, Material Business of

Officer)

Teijin Group

41

April 1, 2022

Name

New Post

Former Post

Date of Change

Akihisa Nabeshima

Representative Director

Representative Director

April 1, 2022

Senior Executive Officer

Executive Officer

CFO (Chief Financial Officer)

CFO (Chief Financial Officer)

Director, Executive Officer,

Director, Executive Officer,

President, Material Business ofChief Officer, Corporate

Teijin Group

Strategy

Director, Executive Officer

Director, Executive Officer

President, Healthcare BusinessPresident, Healthcare Businessof Teijin Groupof Teijin Group

Eiji Ogawa

Naohiko Moriyama

April 1, 2022

April 1, 2022

General Manager, Healthcare
New Business Division(2)Liabilities Limitation Agreements
The Company has executed a Liabilities Limitation Agreement with each of four (4) Outside Directors, Fumio
Ohtsubo, Yukako Uchinaga, Yoichi Suzuki and Masaru Onishi and each of five (5) Statutory Auditors, Masanori
Shimai, Akio Nakaishi, Gen Ikegami, Hitomi Nakayama and Jun Arima, which limits the respective liabilities ofeach Outside Director and Statutory Auditor to the higher amount of \20 million or the minimum liability
amount stipulated in Article 425, Paragraph 1, of the Companies Act.
(3) Directors and Officers liability insurance (D&O insurance)
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, The scope of an insured of said insurance contract
includes Directors, Corporate Officers, Executive Officers and Statutory Auditors of the Company and Directors
and Statutory Auditors of d three subsidiaries (Teijin Pharma Limited, Teijin Engineering Ltd. and DuPont
Teijin Advanced Papers (Japan) Ltd.). 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 intention or gross negligence will not becovered. The full amount of the insurance premiums is borne by the Company and above three subsidiaries.
(4) Remuneration, etc. for Directors and Statutory Auditors, etc.
1) Method of Determining the Policy for Establishing the Content of Remuneration, etc., for Individual
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. The decision policy is decided by a resolution of the Board of Directors after deliberationby the Advisory Board and the Compensation Advisory Committee Board for Compensation.
The activities of the committee, etc. for deliberations and decisions regarding remuneration of Directors in thecurrent fiscal year are as follows.
The board of directors, 8 times; Advisory Board, 2 times; Compensation Advisory Committee, 3 times
Note: From April 1, 2022, the remuneration advisory function for the CEO / Chairperson of the Board will be transferred from theAdvisory Board to the Compensation Advisory Committee, and the remuneration advisory function for all Directors,
including the CEO and Chairperson of the Board, will be centralized to the Compensation Advisory Committee.

42a) 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
to secure 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 among major corporations where the globalization of executives is progressing in Japan each year.
c) Composition of remuneration, etc. for directors and statutory auditorsⅰ) Internal Director remuneration (excluding the Chairperson of the Board and Senior Advisor) is composedof 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 (shortterm 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 themedium-term management plan, and providing an incentive toward medium- to long-term improvement incorporate value.
ⅱ) Remuneration for the Chairperson of the Board, 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 the Board and Advisor r), the composition ratio is as follows.
Position

President &Fixed remuneration

Variable remuneration

Total
remuneration

Basic remuneration

Restricted

Performance-based

Performance Share(Cash)

Stock (RS)remuneration (Cash)

Units (PSU)

45%

10%

20%

25%

100%

50%

10%

25%

15%

100%

Representative
Director, CEO
Other directorse) Performance indicators for variable remunerationⅰ) Performance-based remuneration (Cash)Three indicators presented as performance targets for the medium-term management plan for 2020-2022,“ALWAYS EVOLVING,” have been selected as key performance indicators (KPIs) for performance-based
remuneration: consolidated ROE, which is a profitability indicator; consolidated EBITDA, which is a growthindicator; and ROIC based on consolidated operating income, which is an indicator of efficiency of generating
profits relative to capital invested. Their selection will motivate each director to improve the KPIs.
ⅱ) Performance Share Units .
While aligning targets with the medium-term management plan, TSR from the viewpoint of stakeholders andthe indicators of 1) Changing Portfolio and 2) Diversity and Inclusion from the TSR viewpoint of stakeholders
43and from the viewpoint of sustainable growth and ESG (Environment, Social, Governance) will be also be
used. 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)
Performance

Targets

Composition ratio of

Performance

Timing of shareevaluation

standard amounts ofevaluation

allotment

indicators

share-based remuneration

periodby position(Annual amount)
Consolidated ROE

10% or higher

40%

One year

Annually

Consolidated

FY2022: ¥150.0

40%

Two years

The year after the final

EBITDAbillion or more

TSR

The Company’s

year of the medium10%

term management

TSR >=

plan (By multiplying

Benchmark TSR

the number of years in10%

the performance

Nonfinancial

1)FY2022:

indicators

Strategic Focus

evaluation period

1) Changing

EBITDA>=15%

during the process ofPortfolio2) More than six

calculating the number

2) Diversity andfemale executivesof shares to be

Inclusionand six non-allotted, the number ofJapaneseshares to be allotted

executives infor the performance

FY2022

evaluation period is(* “Executives”

calculated at once)

includes Executive
Officers andCorporate
Officers)f) Policy on determining the timing and conditions for providing remuneration, etc.
ⅰ) Fixed remuneration
・Basic remuneration (Cash): The amount paid to each Director is determined according to their positionand 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 allottedwith transfer restrictions and other conditions within the scope of approval determined via a resolution of theGeneral Meeting of Shareholders.
Restricted Stock (RS) will be allotted each Internal Director (excluding Chairperson of the Board and Senior
Advisor) on the condition that the he or she meets the following requirements.
(1) There was no certain non-conformity stipulated by the Board of Directors of the Company(2) Other requirements deemed necessary by the Board of Directors of the Company as " Restricted Stock".
44ⅱ) Variable remuneration
・Performance-based remuneration (Cash): Calculated depending on position, the achievement level ofconsolidated ROE, the achievement versus forecast of consolidated EBITDA and consolidated ROIC based on
consolidated operating income, and the individual performance evaluation of the Director, and provided by
the end of June as a year-end lump sum. 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 August of every year, the number of shares calculated depending on thetarget achievement of one or multiple performance indicators set by the Board of Directors applicable toperformance evaluation periods comprised of one or multiple fiscal years will be allotted after conclusion of theevaluation performance period set for each performance indicator with transfer restrictions and otherconditions within the scope of approval determined via a resolution of the General Meeting of Shareholders.
See Table of “The initial performance evaluation period and performance indicators of Performance Share
Unit (PSU)” with regard to the performance evaluation period and the performance indicators for the periodof the medium-term management plan for 2020-2022, “ALWAYS EVOLVING” (limited to FY2021 andFY2022). Additionally, even after the conclusion of the initial performance evaluation period, newperformance evaluation periods and performance evaluation indicators will be subsequently set within thescope that has received approval via a resolution of the General Meeting of Shareholders.
If the following conditions are met after the end of the performance evaluation period, “Performance Share
Units” (PSU) will be allotted to each Internal Directors (excluding Chairperson of the Board and Senior
Advisor):①He or she was in a position designated by the Company’s Board of Directors for a period of the entirety ora portion of the performance evaluation period②There was no certain non-conformity stipulated by the Board of Directors of the Company③Other required conditions for “Performance Share Units” as defined by the Board of Directors of theCompanyg) 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 the President & Representative Director, CEO is proposed to the Board of Directors after
being deliberated by the Advisory Board and Compensation Advisory Committee of the Company, andremuneration for Directors other than the President & Representative Director, CEO is deliberated by theCompensation Advisory Committee of the Company. The Board of Directors will make a resolution after fully
considering the proposal.
Note: From April 1, 2022, the compensation advisory function for the CEO and the Chairperson of the Board is transferred from
Advisory Board to the Compensation Advisory Committee the compensation advisory functions for all Directors, including
the CEO and the Chairperson of the Board have been unified into the Compensation Advisory Committee.

2) Reasons the Board of Directors Determined the Content of Remuneration, etc., for Individual Directors for
the Fiscal Year Under Review Conform to the Determination Policy
In determining the content of individual remuneration for Directors, the Advisory Board and the Compensation
45

Advisory Committee drafts the remuneration of the President & Representative Director, CEO, and theCompensation Advisory Committee draft the remuneration for Directors other than the President &Representative Director, CEO. As they are considering the consistency with the decision policy, the Board of
Directors basically fully considers the proposal and judges that it is in line with the decision policy.
3) Resolutions of Ordinary General Meeting 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 lessper 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. wasresolved 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 amount of remuneration for Statutory Auditor of the Company shall be 12 million yen per month. The
number of Statutory Auditor after the conclusion the Ordinary General Meeting of Shareholder in June 2021 was
five.
4) Remuneration for Directors and Statutory Auditors, etc. for the Fiscal Year Under Review(persons; millions of yen)
Total amount

Total amount of remuneration, etc., by typeofNumber of

Basic

Performance-

Restricted

Performance

applicableremuneration,

remuneration

based

Stock (RSShare Units

officers

etc.

(Cash)

remuneration(PSU)(Cash)
Directors

319

232

(Excluding

44

43

−

（Note1）（Note2）（Note3）−−−（Note4）（Note4）（Note4）

7

outside directors)

Outside72

72

directors
Statutory

4

77

77

−

−

−

2

41

41

−

−

−

3

auditors(Excluding
outside statutory
auditors)（Note5）

Outsidestatutory
auditors（Note5）Note 1: Performance-linked remuneration of 44 million yen is scheduled to be paid by the end of June to the six internal Members of
the Boards appointed at the 155th Ordinary General Meeting of Shareholders held on June 23, 2021. Expected reward amount.
Note 2: The compensation of 43 million yen was paid in August 2021 to six Internal Directors appointed at the 155 th Ordinary
General Meeting of Shareholders held on June 23, 2021. The amount of compensation for granting the Restricted Stock (RS).
Note 3: Since the targets for the current fiscal year were not achieved in 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 performance46

evaluation period and performance indicators of Performance Share Unit (PSU)” of 1) e) ii), compensation for Performance
Share Unit is not granted.
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)In order to motivate each Internal Director to improve the priority management indicators set forth in themedium-term management plan 2020-2022 “ALWAYS EVOLVING,” for performance-linked compensation, as
described in 1) e) i), after selecting three indicators consisting of consolidated ROE, consolidated EBITDA, andconsolidated ROIC based on consolidated operating income as performance evaluation indicators, the amount of
performance-based remuneration 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 FY2021 are a consolidated ROE of 5.5%, consolidated
EBITDA of 113 billion yen, and consolidated ROIC based on consolidated operating income of 5.5%. For
consolidated ROE, consolidated EBITDA and consolidated ROIC based on consolidated operating income, theresult was below the standard target value. As a result, the payment rate of performance-linked remuneration in
FY2021 was 44 to 46% of the standard amount of performance-based remuneration for each position (theamount paid when all standard target values are achieved for each performance evaluation index).
Evaluation indicators

TargetResultConsolidated ROE

10%

5.5%

Consolidated EBITDA¥130.0 billion¥113.0billion

Consolidated ROIC based on
consolidated operating income

7.0%

5.5%

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 2021).
Note 2： The standard target value for consolidated net income ROE is set at 10% based on the target of 10% or more set forth in
the medium-term management plan 2020-2022 “ALWAYS EVOLVING.”b) Performance Share Units (PSU):① Contents of performance evaluation indicators and reasons for selection: As described in 1) e) ii).
② Amount or calculation method of performance Share Unit: We will calculate the number of shares to be
granted according to the degree of achievement of the targets for each fiscal year. The target for each fiscal
year is specified in the table of the “The initial performance evaluation period and performance indicatorsof Performance Share Unit (PSU)” of 1) e) ii).
③ Performance of performance evaluation indicators: The Performance- The Performance Share Unit was notissued because the target for the current fiscal year was not achieved. The actual performance ofconsolidated ROE was 5.5% against the target of consolidated ROE more than 10%.
6) Matters Regarding non-monetary remuneration, etc.
a) Restricted Stock (RS)The types and number of shares delivered are as described in “Status of shares delivered to officers of theCompany as consideration for the execution of duties during the current fiscal year” on 2. (5) Status ofshares granted to Company officers during the fiscal year as consideration for performance of duties.
The outline of the conditions attached when the shares were allotted is as described in 1) f) i).
b) Performance Share Units (PSU)47

As described in 5) b).
(5) 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.
They are shown in the above-mentioned “(1) Directors and Statutory Auditors”.
2) Main Activitiesa) Outside Directors
The attendance status of the Board of Directors is shown in the above-mentioned “(1) Directors and Statutory
Auditors”.
Name

Status of Statements
Outline of duties performed regarding the roles expected of outside directors

Fumio Ohtsubo

He offered valuable comments from his extensive management experience and knowledge atappropriate opportunities as well as at the Board of Directors Meeting.
He serves as Chairperson of the Board of Directors as part of separation of monitoring andsupervision, and execution. He vitalizes the Board of Directors of the Company and endeavors
to secures effectiveness and improve function of the Board of Directors of the Company.
As the member of the Advisory Board, and as Chairperson of Nomination Committee set upon the Advisory Board, he made useful statements regarding change of CEO, recommendationof successor, etc.
As the Chairperson of Nomination Advisory Committee, he made useful statements inselecting candidates for directors and executive officers other than the CEO.
As the member of Compensation Advisory Committee, he made appropriate statements
regarding the compensation of directors and executive officers other than the CEO.

Yukako Uchinaga

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 the member of the Advisory Board, she makes useful statements regarding CEO
compensation and selection.
As the member of Nomination Advisory Committee, she made useful statements in selecting
candidates for directors and executive officers other than the CEO.
As the member of Compensation Advisory Committee, she made appropriate statements
regarding the compensation of directors and executive officers other than the CEO.

Yoichi Suzuki

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 aswell as at the Board of Directors Meeting.
As the member of the Advisory Board, he makes useful statements regarding CEO
compensation and selection.
As the member of Nomination Advisory Committee, he made useful statements in selecting
candidates for directors and executive officers other than the CEO.
As the member of Compensation Advisory Committee, he made appropriate statements
regarding the compensation of directors and executive officers other than the CEO.

Masaru Onishi

He offered valuable comments from his extensive management experience and knowledge atappropriate opportunities as well as at the Board of Directors Meeting.
As member of the Advisory Board, and as Chairperson of Compensation Committee set up on
the Advisory Board, he makes useful statements regarding the remuneration system fordirectors and statutory auditors, etc. of Teijin Group and evaluation of CEO performance, etc.

48

Name

Status of Statements
Outline of duties performed regarding the roles expected of outside directors
As the Chairperson of Compensation Advisory Committee, he made appropriate statements
regarding the compensation of directors and executive officers other than the CEO.
As the member of Nomination Advisory Committee, he made useful statements in selecting
candidates for directors and executive officers other than the CEO.

b) Outside Statutory Auditors
The attendance status of the Board of Directors and Audit & Supervisory Board are shown in the abovementioned “(1) Directors and Statutory Auditors”
Name

Status of Statements

Gen Ikegami

He offered valuable comments from his professional knowledge as a Certified Public
Accountant.

Hitomi Nakayama

She offered valuable comments from her professional knowledge as lawyer, and offered, inparticular, advice and suggestions concerning compliance and risk management.

Jun Arima

He offered valuable advice and suggestions the environmental management that the Company
has aimed for, including maintaining and improving compliance.

49

6. Accounting Auditor(1) Name of Accounting Auditor
KPMG AZSA LLC.
(2) Amount of Remuneration(Millions of yen)
Details

Amount1) The amount of remuneration, etc., to be paid by the Company to the accounting
auditor2) The total amount of cash or other proprietary interest to be paid by the Company
and its subsidiaries to the accounting auditor

318

181
318

Note 1: The amount described in Item 1) of the above table is the total sum of the remunerations for audits under the Companies
Act and the remuneration for the audits under Financial Products & Exchange Act in Japan because these are not clearly
distinguished from each other in the contract between the Company and the Accounting Auditor.
Note 2: Of the major subsidiaries of the Company, 13 companies, including Teijin Aramid B.V. , undergo auditing by accounting
firm other than the Accounting Auditor.
Note 3: The Company pays the Accounting Auditor for a fee "Accounting advisory service" etc. (i.e. services other than those
stipulated in Article 2, paragraph 1 of the Certified Public Accountants Law).
Note 4: Based on the Company’s scale and characteristic, as a result of confirmation and examination of the content of the
Accounting Auditor's audit plan, the status of performance of duties by the Accounting Auditor, and the basis for the
calculation of the estimated remuneration for the Accounting Auditor, etc., the Board of Statutory Auditors has given consent
to the remuneration, etc., to be paid the Accounting Auditor as stipulated in Article 399, Paragraph 1 of the Companies Act.

(3) Policy for Dismissal or Non-Reappointment of Accounting Auditor
The Company has a policy that the Board of Statutory Auditors may dismiss the Accounting Auditor based on
the unanimous approval by the statutory auditors in cases where Article 340, Paragraph 1 of the Companies Act isjudged to apply. Furthermore, the Company has a policy of submitting a proposal regarding dismissal of the
Accounting Auditor to a shareholder’s meeting in the event that it is deemed that a grave obstacle to theCompany’s audit operation involving the Accounting Auditor has occurred, and similarly submitting a proposal
regarding the non-reappointment of the Accounting Auditor in the event that it is deemed necessary to change
the Accounting Auditor in light of the Accounting Auditors’ independence and reliability, or the status of its
performance of duties.
In both cases, the submission of the proposals is based on a decision of the Board of Statutory Auditors.

7. Policy Regarding the Determination of Dividends from Retained Earnings
Stable and sustainable dividends will be considered, and own share repurchasing will be flexibly conducted aswell depending on the situation. Dividends are in line with consolidated operating results, aiming to raise thedividend along with profits growth, and targeting a consolidated payout ratio of 30% of profit attributable toowners of parent for the medium term.

50

8. Systems to Ensure Appropriate Business Operations and the Status of its Implementation(1) Resolutions on Basic Policies for Establishment of Internal Control Systems
The Company passed a resolution regarding the “Basic Policy for Establishment of Internal Control Systems” atBoard of Directors meeting held on March 30, 2022.
Below is a summary of this resolution, the details of which can be viewed at the Company’s Web site:(https://www.teijin.com/ir/management/governance/resolution/).
1) System for Ensuring Compliance with Laws, Regulations and the Articles of Incorporation in the Performanceof Duties by Directors and Employees of the Company and Its Subsidiaries
The Company has declared the basic principles of compliance in its Teijin Group “Corporate Governance
Guide”.
To practice these basic principles, the Company shall establish systems and organizational structures that
ensure practical operation and thorough observation of the Company’s Corporate Philosophy, Corporate Code of
Conduct, Group Ethics Regulations and other related internal regulations.
The Company’s representative directors and other executives shall take the initiative and set good examples inobserving laws, regulations and the Articles of Incorporation, social rules and ethics, and shall promotecompliance education and awareness among directors, officers and employees of the Company and its
subsidiaries. In order to establish a compliance system across the entire Teijin Group, the Company appoints
Chief Social Responsibility Officer as the officer in charge of compliance.
All directors, officers and employees of the Company and its subsidiaries are required to report to the Teijin
entity to which they belong or to Teijin Limited, when they detect any violations of laws and regulations or otherserious information concerning compliance, in accordance with Group Ethics Regulations and other internal
regulations. Chief Social Responsibility Officer shall direct and supervise investigations to confirm such reported
facts and, upon consultation with CEO (President), determine appropriate measures.
The Company shall provide necessary means for directors, officers, employees and business partners to directly
report any violation or doubtful activities of non-compliance in the Company or its subsidiaries, and will establish
and operate various reporting and consultation counters. Such measures shall ensure that anonymity of the caller
is protected and that the caller does not get any disadvantageous treatment. Important reports as well as measurestaken by the relevant Teijin entity and their results shall be announced as appropriate to, and shall be recognizedby, all directors, officers and employees of the Company and its subsidiaries.
The directors of the Company and its subsidiaries shall have their performance of duties audited by thestatutory 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 the Teijin Group’s execution of business and conducts the evaluation of the internal control systemand proposes its improvement.
The Company 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 Social Responsibility Officer shall be appointed as the person in charge of actions against antisocial forces.
Chief Social Responsibility Officer shall establish action policies and other rules in consort with general manager,
Human Resources Division and shall ensure observance of such policies and rules by directors, officers and51

employees within the Company and its subsidiaries.
To intensify the validity of the decision to be made by the Board of Directors, in principle, 4 or more of thedirectors shall be outside directors satisfying the requirements for independence stipulated 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 system to deal with any kind ofrisks that might threaten sustainable business development.
Total Risk Management (TRM) Committee, shall mainly deal with the business operational risks and strategicrisks to Teijin Group, and shall propose basic policies and annual plans related to TRM to the Board of Directorsof the Company. Chief Social Responsibility Officer is in charge of establishing a system across the Teijin Groupto manage business operation risk, and shall identify problems and deal with such risks upon occurrence thereof.
CEO shall assess strategic risks and present his/her assessment to the Board of Directors of the Company as animportant element upon which managerial decisions are made.
Chief Social Responsibility Officer shall establish a system for the Teijin Group to ensure the continuation ofbusinesses when faced with risk events including disasters, the inappropriate performance of duties by directors,
officers or employees, and damage to critical IT systems.
3) Systems for Ensuring that Duties by Directors and Employees of the Company and Its Subsidiaries Are
Performed Efficiently
The Company shall establish Group regulations to provide the necessary rules and guidelines for the Group to
ensure efficient business operations throughout the Teijin Group.
The Board of Directors of the Company shall have the representative directors and other executives conduct theoperation of the Company and decisions for the items on which the representative directors and other executives
have been delegated decision-making powers shall be made by the organization and procedures in accordancewith the internal regulations. These regulations shall be revised as may be necessary to reflect any revision and/or
abolition of laws and regulations and/or to increase the efficiency of the representative directors and otherexecutives in executing their duties.
The Board of Directors of the Company shall organize the basic structure of Teijin Group, and shall establish
efficient management, oversight and supervision system.
The Company shall formulate the Group medium-term management plan, and each fiscal year it shall formulate
short-term plans, 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 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. Based on the Group regulations, eachcompany shall establish its own regulations, and use appropriate processes for deciding on important matters.
The Company shall discuss important matters concerning Teijin Group companies at its Group meetings and soforth, and to require Teijin Group companies to make reports.
The representative directors and other executives shall provide necessary instructions to ensure that the TeijinGroup entities have appropriate internal control systems.
Corporate Audit Department of the Company shall operate or supervise internal audits of the Teijin Group’ s
52

business operations and ensure the efficiency and validity of internal control functions over the entire business of
the Teijin Group.
Statutory Auditors of the Company shall establish appropriate systems, such as those for close coordination withthe accounting auditors and Corporate Audit Department, to ensure effective and appropriate supervision andauditing of the Group’s entire business operations.
To ensure the reliability of its financial reporting, the Company shall establish a group-wide internal control
system for the financial reporting and the operation of the Teijin Group individual operational processes, andshall properly and efficiently operate and assesses such systems.
5) Systems for the Preservation and Management of Information in Relation with the Directors’ Performance of
Their Duties
Directors shall appropriately preserve and manage minutes of shareholders’ general meetings, minutes of Boardof Directors’ meetings, and other documents and important information concerning the performance of theirduties in accordance with the internal regulations. CEO is responsible for the supervision and oversight of thepreservation and management of such documents and important information. Documents concerning directors’
performance of their duties shall be preserved for at least ten (10) years and shall be accessible when necessary.
6) Provisions Concerning Employees Assigned to Assist the Statutory Auditors in Performing Their Duties, theIndependence from Directors of Such Employees, and the Validity of Instructions Given to Such Employees
The Company shall establish Teijin Group Auditors Office under the direct control of full-time statutory
auditors and appoint two or more employees, in principle, to assist Statutory Auditors in performing their duties.
The members of Teijin Group Auditors Office may concurrently become statutory auditors of Teijin Group
companies; however it shall not concurrently become corporate officers connected with performance of duties at
Teijin Group companies.
To secure the independence of members of Teijin Group Auditors Office above, all decisions concerning
personnel measures regarding the members of Teijin Group Auditors require the prior consent of the full-time
Statutory Auditors. The full-time Statutory Auditors shall assess the performance of the members of Teijin Group
Auditors Office.
7) System for Reporting to Statutory Auditors by Directors, Corporate Officers and Employees of the Company
and its Subsidiaries, and System for Other Reports to Statutory Auditors
The full-time statutory auditors 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 the main subsidiaries.
Representative directors and other executives shall report at the meetings of the Board of Directors and otherimportant meetings on their performance of duties with regard to the business operations, functions andsubsidiaries under their charge.
The directors, officers and employees of the Company and its subsidiaries shall immediately report to thestatutory auditors when they discover incidents that causes or may cause significant erosion of public trust of theCompany, adverse effects on the performance of the Company, significant damage to the internal or external
environment, safety and health (ESH); or related to product liability, significant violations of internal regulations,or other similar incidents.
The directors, officers and employees of the Company and its subsidiaries shall report on the business53

operations, functions, and subsidiaries under their charge, when they deem it necessary to do so, or at the requestof the statutory auditors of the Company, and shall cooperate with the investigations of the statutory auditors of
the Company.
8) System for Ensuring that Persons Reporting to the Statutory Auditors Are Not Subject to Unfair Treatment
Because of Such Reporting
The Teijin Group’s Group Ethics Regulations and other regulations stipulate that no person shall be treatedunfairly because of reporting or giving notice of illegal conduct and so forth.
9) Policy Concerning Processing of Expenses and Obligations Arising with Respect to the Statutory Auditors’
Performance of Duties, Prepayment of Expenses, and Reimbursement Procedures
The Company shall bear the expenses and obligations required for the statutory auditors’ performance of duties,
and shall promptly respond to requests for pre-payment of expenses in accordance with laws and regulations after
checking the requests.
10) Other System for Ensuring that the Audits of Statutory Auditors Are Conducted Effectively
To ensure transparency, the majority of statutory auditors consists of independent outside statutory auditorsthat satisfy the requirements for independence that the Company specifies.
The statutory auditors shall enter into advisory agreements with outside law firms in order for themselves andstatutory auditors of the Company and its subsidiaries to form independent opinions. When they consider it
necessary in the course of conducting audits, the statutory auditors can, at their own discretion, retain outsideadvisers, including Certified Public Accountants and other consultants.
(2) Summary of the “Internal Control System Operating Status”
In accordance with the “Basic Policy for the Establishment of Internal Control Systems,” the operating status of
the Company’s internal control system for the relevant year is as follows.
1) Operating Status Regarding Compliance with Laws and Regulations
The Company has published the Teijin Group “Corporate Governance Guide” and the related regulations
necessary to carry out its basic policy on the Company intranet, and has designated each October as Corporate
Ethics Month in which internal training is held, promoting compliance education and awareness. Furthermore,
for important decision making, the related divisions and departments perform verifications, working to preventany violations of laws and regulations.
The Company has established a framework to promote compliance under the direction of the Chief Social
Responsibility Officer, which works to identify and respond to problems across the Teijin Group. Based on theGroup Ethics Regulations which establish rules for reporting illegal conduct and other responses, The Chief
Social Responsibility Officer also responds appropriately to important compliance issues reported by the
directors, officers and employees of the Company and its subsidiaries, and make regular reports to the TRM
Committee.
The Company has established an internal reporting system including an anonymous compliance hotline,
responding appropriately to hotline inquiries from group companies in Japan and overseas, protecting thereporter, and publishing the status of the response biannually on the intranet, promoting education andawareness.
The Company respects and responds appropriately to points made by Statutory Auditors in audits and in54

evaluations of the condition and operational status of internal control systems.
The Company’s Corporate Audit Department performs internal auditing across the Teijin Group based on theannual plan, and reports the audit results to the Directors and Statutory Auditors as necessary.
The Company maintains an action policy against anti-social forces in its Corporate Code of Conduct, andpromotes education and awareness at its Corporate Ethics Month etc.
2) Operating Status Regarding Management of Risk of Loss
The Board of Directors of the Company receives reports from the TRM Committee on proposals for basic
policies and annual plans related to TRM, as well as the status of the occurrence and response to risks, putting inplace a system to manage important risks and ensure the continuation of the business.
The Chief Social Responsibility Officer implements regular evaluation and monitoring of operational risks,
continually identifying risks and evaluating the validity of countermeasures. The Company has formulated “TheManual of Large-scale disaster prevention” that assumes such as the large-scale earthquakes and the spread ofwidespread infectious diseases, and has set in advance what to do in the event of an emergency. Regarding Covid19, since the establishment of Emergency Response Headquarter in March 2020, The Company has prioritized
the safety of employees and their families all over the world, grasping the status of the entire Teijin Group,
implementing various measures, disseminate information to inside and outside Teijin Group, and procuring relief
supplies.
At meetings of the Board of Directors and other important meetings of the Company, deliberation items areevaluated based on the results of strategic risk assessment implemented based on the internal regulations.
To ensure the continuation of business, the Company will prepare the required manuals and hold regular drills
to be prepared in the event of an emergency.
While preparing individual policies on personal information protection and information security, the Company
has implemented various internal education programs and security enhancement policies, as well as enhancing
countermeasures against the risk of information leaks.
3) Operating Status Regarding Securing Efficiency
The Company publishes the Group regulations on the Company intranet, promoting education and awareness.
The Company assigns management systems and job duties as well as clarifying responsibilities and authorities
based on the internal regulations, working to ensure efficient management execution and effective management.
4) Operating Status Regarding the Internal Control System within the Corporate GroupThe Company performs regular self-evaluations of the creation and operating status of its internal control
system, continually guiding the creation of the internal control system including both the regulations andmeetings of the various Teijin Group companies and a reporting system.
The Company’s Statutory Auditors, to promote fair and efficient auditing activities within the Teijin Group, byholding regular meetings of the Group Board of Statutory Auditors, attending meetings in which accounting audit
reports are given and report of results of internal audits, maintains close cooperation among the Accounting
Auditors and Internal Audit Departments.
5) Operating Status Regarding the Preservation and Management of Information
The Company’s Board of Directors appropriately preserves documents and important information concerning
the performance of their duties in accordance with the internal regulations.
556) Operating Status Regarding Ensuring the Effectiveness of the Auditing of the Statutory Auditors
The Company’s Statutory Auditors attend important meeting bodies of the Company and of the main
subsidiaries (including important meeting bodies in each business), receiving reports at the meeting bodies from
the Management team, etc. on the status of the performance of duties, and exchange opinions and makerecommendations.
In addition, The Company’s Statutory Auditors regularly hold interviews with the representative directors, otherdirectors, major corporate officers and general managers of headquarters staff.
The Chief Social Responsibility Officer reports on important stipulated items, including internal reporting by
the hotline, promptly following their discovery, both individually and to the members of the meeting bodies
including the Statutory Auditors, through the important meeting bodies. The Company has established a system
in which The Company’s Statutory Auditors can obtain information on compliance-related matters without delay.
In order to enhance the effectiveness of group-wide oversight, the Committee of Teijin Group Statutory
Auditors, which comprises the statutory auditors of Group companies and other members, meets regularly.
Through regular meetings with the Accounting Auditor and the Internal Audit Department, we strive to ensure
the effectiveness of the three-way audit.

Note: Italicized product names and service names in this report are trademarks or registered trademarks of the
Teijin Group in Japan and/or other countries, or, where noted, are protected as the trademarks and/or trade
names of other companies.

56

9. Financial Statement(1) Consolidated Balance Sheets

57

58

(2) Consolidated Statements of Income59(3) Consolidated Statement of Changes in Net Assets

60

Consolidated Statements of Comprehensive Income (Reference)61

Consolidated Statements of Cash Flows (Reference)62