Annual Securities Report

(Excerpt)
(The English translation of the “Yukashoken-Houkokusho” (Excerpt)
for the year ended December 31, 2021)

Renesas Electronics Corporation

This document is a translation of part of the Japanese original, except for the information relating to non-consolidated
financial statements and audit report. The Japanese original has been disclosed in Japan in accordance with Japanese
accounting standards and the Financial Instruments and Exchange Act. This document does not contain or constitute any
guarantee and the Company will not compensate any losses and/or damage stemming from actions taken based on this
document. In the case that there is any discrepancy between the Japanese original and this document, the Japanese original
shall prevail.
Contents

20th Fiscal Year Annual Securities Report

[Cover]

Part I. Corporate Information

I. Overview of the Company

1. Main Financial Data

2. History

3. Business Description

4. Statuses of Affiliated Companies

5. Status of Employees

II. Business Conditions

1. Management policy, management environment and issues to be addressed

2. Business and Other Risks
3. Management's Discussion and Analysis of Financial Condition, Results of Operations and Cash Flows
4. Important management contracts, etc.

5. R&D Activities

III. Status of Facilities

1. Overview of Capital Expenditures

2. Status of Major Facilities

3. Plans for New Facility Installation, Retirement, etc.

IV. Status of the Filing Company

1. Stock Information

2. Status of Acquisition of Own Shares

3. Dividend Polic

4. Status of Corporate Governance and Related Matters

V. Accounting Status

1. Consolidated Financial Statements

VI. Summary of Handling Procedures for Shares of the Filing Company

VII. Reference Information of the Filing Company

1. Information of Parent Company of the Filing Company

2. Other Reference Information

Part II. Information on Guarantor of the Filing Company

[Cover]
Document Filed Annual Securities Report (“Yukashoken Hokokusho”)

Applicable Law Article 24, Paragraph 1 of the Financial Instruments and Exchange Act of
Japan

Filed with Director, Kanto Local Finance Bureau

Filing Date March 30, 2022

Fiscal Year 20th term (from January 1, 2021 to December 31, 2021)

Company Name Renesas Electronics Kabushiki-kaisha

Company Name (English) Renesas Electronics Corporation

Title and Name of Representative Hidetoshi Shibata, Representative Director, President and CEO

Address of Head Office 3-2-24, Toyosu, Koto-ku, Tokyo

Phone No. 03 (6773) 3000 (switchboard)

Contact Person Yukitake Hashiguchi, Director, Corporate Governance Department

Contact Address 3-2-24, Toyosu, Koto-ku, Tokyo

Phone No. 03 (6773) 3000 (switchboard)

Contact Person Yukitake Hashiguchi, Director, Corporate Governance Department

Place Where Available for Public Inspection Tokyo Stock Exchange, Inc.
(2-1 Nihombashi, Kabutocho, Chuo-ku, Tokyo)

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Part I. Corporate Information
I. Overview of the Company
1. Main Financial Data
(1) Consolidated Financial Summary
International Financial Reporting standards
- Transition 16th fiscal 17th fiscal 18th fiscal 19th fiscal 20th fiscal
date period period period period period
Fiscal year-end Jan 1, 2017 2017 Dec. 2018 Dec. 2019 Dec. 2020 Dec. 2021 Dec.
(Millions
Revenue ― 779,255 756,503 718,243 715,673 994,418
of yen)
Income (loss) before (Millions
― 99,508 67,723 (325) 65,216 152,463
income taxes of yen)
Income (loss) attributable (Millions
― 102,025 50,989 (6,317) 45,626 127,261
to owners of the parent of yen)
Comprehensive income
(Millions
attributable to owners of ― 108,575 18,248 (22,108) (19,239) 292,783
of yen)
the parent
Equity attributable to
(Millions
owners of the parent 467,573 575,733 598,100 621,455 616,701 1,158,143
of yen)
company
(Millions
Total assets 873,241 1,136,000 1,055,235 1,668,148 1,608,985 2,406,247
of yen)
Equity per share
attributable to owners of (Yen) 280.47 345.33 358.49 363.37 356.08 595.81
the parent
Basic income (loss) per
(Yen) ― 61.20 30.57 (3.73) 26.54 68.96
share
Diluted income (loss) per
(Yen) ― 61.14 30.50 (3.73) 25.97 67.44
share
Ratio of equity attributable
(%) 53.5 50.7 56.7 37.3 38.3 48.1
to owners of the parent
Return on equity (%) ― 19.6 8.7 (1.0) 7.4 14.3

Price-earnings ratio (Times) ― 21.5 16.4 ― 40.7 20.6

Cash flow from operating (Millions
― 173,649 172,308 201,960 223,889 307,384
activities of yen)
Cash flow from investing (Millions
― (453,905) (80,872) (742,162) (40,163) 663,126
activities of yen)
Cash flow from financing (Millions
― 75,086 (39,251) 500,466 (104,470) 340,915
activities of yen)
Cash and cash
(Millions
equivalents 354,287 139,545 188,820 146,468 219,786 221,924
of yen)
Balance at end of year
Number of Employees (People) 18,884 20,513 19,546 18,958 18,753 20,962
(Note) 1. Consolidated financial statements have been prepared in accordance with the International Financial Reporting
Standards ("IFRS") since the 17th fiscal period.
2. Revenue does not include consumption taxes.
3. The number of employees does not include the number of employees on leave and temporary employees. This
information is omitted because the number of temporary employees is less than 10/100 of the number of
employees.
4. Diluted loss per share for the 18th fiscal period is the same as basic loss per share because there are no dilutive
potential common shares outstanding.
5. During the 18th fiscal year, warrants issued by the Company were not dilutive and thus were not included in the
calculation of diluted loss per share.
6. The accounting policy was changed in the 19th fiscal period, and the consolidated financial statements for the
18th fiscal period reflect the revision of the classification of expenses.

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 Japanese standards
16th fiscal 17th fiscal
period period
Fiscal year-end 2017 Dec. 2018 Dec.
(Millions
Net sales 780,261 757,360
of yen)
(Millions
Ordinary income 75,288 65,130
of yen)
Net profit attributable to (Millions
77,196 54,595
owners of parent of yen)
(Millions
Comprehensive income 87,174 14,910
of yen)
(Millions
Net assets 511,898 531,558
of yen)
(Millions
Total assets 1,051,474 967,790
of yen)
Net assets per share (Yen) 304.20 314.08

Net income per share (Yen) 46.30 32.74

Diluted
(Yen) 46.26 32.66
Net Income per share
Equity Ratio (%) 48.2 54.1

Return on equity (%) 16.6 10.6

Price-earnings ratio (Times) 28.4 15.3

Cash flow from (Millions
164,222 164,157
operating activities of yen)
Cash flow from (Millions
(432,635) (61,339)
investing activities of yen)
Cash flow from (Millions
63,243 (50,633)
financing activities of yen)
Cash and cash
equivalents (Millions
139,545 188,820
Balance at the end of of yen)
the period
Number of Employees (People) 20,513 19,546
(Note) 1. Various figures for the 17th fiscal period have not been audited in accordance with the provisions of Article 193-
2, Paragraph 1 of the Financial Instruments and Exchange Act.
2.Consumption tax and local consumption tax ("Consumption tax, etc.") are processed by the tax exclusion method.
3. The number of employees does not include the number of employees on leave and temporary employees. This
information is omitted because the number of temporary employees is less than 10/100 of the number of
employees.

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 (2) Non-consolidated Business Performance Indicators
16th fiscal 17th fiscal 18th fiscal 19th fiscal 20th fiscal
period period period period period
Fiscal year-end 2017 Dec. 2018 Dec. 2019 Dec. 2020 Dec. 2021 Dec.
(Millions
Net sales 683,266 631,220 554,313 563,908 771,277
of yen)
(Millions
Ordinary income 90,620 68,864 16,349 52,843 129,862
of yen)
(Millions
Net income 87,457 49,216 17,029 47,458 113,928
of yen)
(Millions
Share Capital 10,022 10,699 22,213 28,971 147,133
of yen)
(Thousan
Number of issued
ds of 1,667,194 1,668,385 1,710,277 1,731,899 1,943,806
shares
shares)
(Millions
Net assets 399,675 438,896 505,219 566,100 913,301
of yen)
(Millions
Total assets 937,490 928,277 1,614,467 1,628,721 2,385,940
of yen)
Net assets per share (Yen) 238.35 260.07 286.02 317.65 463.03
Dividends per share
(Yen) ― ― ― ― ―
(Interim dividends per
(Yen) (―) (―) (―) (―) (―)
share)
Net income per share (Yen) 52.46 29.51 10.05 27.60 61.73
Diluted net income per
(Yen) 52.41 29.44 9.90 27.01 60.38
share
Equity Ratio (%) 42.4 46.7 30.3 33.8 37.7

Return on equity (%) 24.4 11.8 3.7 9.1 15.7

Price-earnings ratio (Times) 25.0 16.9 74.6 39.1 23.1

Dividend payout ratio (%) ― ― ― ― ―

Number of Employees (People) 5,663 5,600 6,252 6,162 6,116

Total shareholder
(%) 147.0 56.0 84.0 120.8 153.3
return
(Comparison index :
TOPIX including (%) (129.4) (108.8) (128.5) (138.0) (146.9)
dividends)
Highest stock price (Yen) 1,543 1,427 793 1,112 1,577

Lowest stock price (Yen) 882 438 450 317 1,042

(Note) 1. Consumption taxes are processed by the tax exclusion method.
2. The dividend payout ratios for the 16th, 17th, 18th and 19th fiscal periods are not stated because no dividend
was paid.
3. The number of employees does not include the number of employees on leave and temporary employees. This
information is omitted because the number of temporary employees is less than 10/100 of the number of
employees.
4. "Partial Amendments to Accounting Standard for Tax Effect Accounting" (ASBJ Statement No. 28, February 16,
2018) has been applied from the end of the 17th fiscal period. Management indicators, etc. related to the 16th
fiscal period are indicators after retroactive application of the said accounting standard.
5. The accounting policy was changed in the 19th fiscal period, and the financial statements for the 18th fiscal
period reflect the revision of the classification of expenses.
6. The highest and lowest share prices are those recorded on the First Section of the Tokyo Stock Exchange.

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2. History
On November 1, 2002, NEC Corporation spun off its semiconductor-related research, development, designing,
manufacturing, sales, and servicing operations, excluding the general-purpose DRAM business, through a corporate split,
and the Company was established as NEC Electronics Corporation, a wholly-owned subsidiary of NEC Corporation.
Subsequently, on July 24, 2003, the Company listed its shares on the First Section of the Tokyo Stock Exchange, and on
April 1, 2010, it merged with Renesas Technology Corp. and changed its name to Renesas Electronics Corporation.
Developments since the establishment are as follows.

Date Matters
Nov. 2002 NEC Corporation's semiconductor business, excluding general-purpose DRAM, was spun off through a
company split, and NEC Electronics Corporation was established in Kawasaki City, Kanagawa Prefecture,
as a wholly-owned subsidiary of NEC Corporation.
Jul. 2003 Listed on First Section of the Tokyo Stock Exchange.
May 2004 Sold the back-end process division of NEC Yamagata Ltd.'s Takahata Plant to Taiwan-based ASE Group.
Jul. 2004 Spun off the prototype division from the Company and established NEC Fabserve Ltd., which mainly
provided prototype services.
Oct. 2004 NEC Semiconductors Kyushu Ltd. succeeded the assembly and inspection processes (back-end
processes) of NEC Yamaguchi Ltd. and changed its name to NEC Semiconductor Package & Test Solutions
Co., Ltd.
Jan. 2005 Started mass production of 300mm wafer production line at NEC Yamagata Ltd.
Oct. 2005 NEC IC Design Beijing succeeded Shougang NEC Electronics's semiconductor development and sales
divisions and changed its name to NEC Electronics (China).
Apr. 2006 Merged NEC Compound Semiconductor Devices Ltd. by simple merger method.
Sep. 2006 Established NEC Electronics Korea as a sales base in South Korea.
Sep. 2006 The assembly and inspection (post-process) line of NEC Semiconductors Ireland was closed.
Nov. 2006 Merged NEC Deviceport Ltd. by simple merger method.
Jun. 2007 Transferred the photomask business of NEC Fabserve Ltd. to Dai Nippon Printing Co., Ltd.
Oct. 2007 The assembly and inspection (post-process) line of P.T. NEC Semiconductors Indonesia was closed.
Apr. 2008 NEC Kyushu Ltd. merged with NEC Yamaguchi Ltd. and NEC Semiconductor Package & Test Solutions
Co., Ltd., and changed its name to NEC Semiconductors Kyushu Yamaguchi Ltd.
NEC Kansai Ltd. merged with NEC Fukui Ltd. and changed its name to NEC Semiconductors Kansai, Ltd.
NEC Yamagata, Ltd. changed its name to NEC Semiconductors Yamagata, Ltd.
Apr. 2010 Merged Renesas Technology Corp. and changed the name to Renesas Electronics Corporation. (Note)
Nov. 2010 Acquired the wireless modem business from Nokia Corporation.
Dec. 2010 Transferred mobile multimedia business (including wireless modem business acquired from Nokia
Corporation) to Renesas Mobile Corporation by an absorption-type company split.
May. 2011 Transferred Renesas Electronics America's front-end production line (Roseville Plant) to Germany-based
Telefanken GmbH.
Feb. 2012 Started operations of Renesas Electronics Brazil Service as a sales support base in Brazil.
Mar. 2012 Transferred the power amplification business of the Company and the business of Renesas East Japan
Semiconductor Inc.’s Nagano Device Division to Murata Manufacturing Co., Ltd.
Jul. 2012 Transferred the front-end process line (Tsugaru Plant) of Renesas Northern Japan Semiconductor Inc. to
Fuji Electric Co., Ltd.
Jan. 2013 Transferred all shares of Renesas High Components Inc. to Aoi Electronics Co., Ltd.
Jun. 2013 Transferred the assembly and inspection processes (back-end processes) of Renesas Northern Japan
Semiconductor Inc., Renesas Kansai Semiconductor Co., Ltd., and Renesas Kyushu Semiconductor Corp.
(Hakodate Plant, Fukui Plant, and Kumamoto Plant) and manufacturing support business of Hokkai
Electronics Co., Ltd. to J-Device Corporation.
Sep. 2013 Implemented third-party allotment of new shares to Innovation Network Corporation of Japan, Toyota Motor
Corporation, Nissan Motor Company, Ltd., Keihin Corporation, DENSO Corporation, Canon Inc., Nikon
Corporation, Panasonic Corporation, and Yasukawa Electric Corporation.

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 Date Matters
Oct. 2013 Merged Renesas Electronics Sales Co., Ltd. into the Company through a simple merger method.
Renesas Micro System Co., Ltd. merged with Renesas Design Corp. and changed its name to Renesas
System Design Co., Ltd.
Renesas Musashi Engineering Service Co., Ltd. merged with Renesas Kitaitami Engineering Service Co.,
Ltd. and Renesas Takasaki Engineering Service Co., Ltd. and changed its name to Renesas Engineering
Service Co., Ltd.
Renesas Northern Japan Semiconductor, Inc. merged with Renesas Eastern Japan Semiconductor, Inc.
Transferred all shares of Renesas Mobile Europe and Renesas Mobile India to Broadcom Corporation.
Nov. 2013 Transferred the Company's equities in Shougang NEC Electronics to Shougang Group Corp.
Feb. 2014 Established Renesas Electronics India as a sales base in India.
Mar. 2014 Transferred front-end production lines (Tsuruoka Plant) of Renesas Yamagata Semiconductor Co., Ltd. to
Sony Semiconductor Corporation.
Apr. 2014 Regarding the semiconductor front-end manufacturing business, Renesas Kansai Semiconductor Co., Ltd.
as the surviving company/successor company, the Company's semiconductor front-end manufacturing
business, Renesas Semiconductor Kyushu-Yamaguchi Co., Ltd.'s semiconductor front-end manufacturing
business, Renesas Northern Japan Semiconductor Co., Ltd.'s crystal business, Renesas Kofu
Semiconductor Co., Ltd., Renesas Naka Semiconductor Co., Ltd., Renesas Semiconductor Engineering
Co., Ltd. and Renesas Yamagata Semiconductor Co., Ltd. were consolidated through absorption-type
company split and absorption-type merger. The name of Renesas Kansai Semiconductor Co., Ltd. changed
to Renesas Semiconductor Manufacturing Co., Ltd.
Regarding the semiconductor back-end manufacturing business, Renesas Semiconductor Kyushu
Yamaguchi Co. Ltd. as the surviving company/successor company, the Company's semiconductor back-
end manufacturing business, Renesas Semiconductor Northern Japan Semiconductor Co., Ltd., Renesas
Yanai Semiconductor Co., Ltd., Haguro Electronics Co., Ltd., Hokkai Electronics Co., Ltd., and Renesas
Kyushu Semiconductor Co., Ltd. were consolidated through absorption-type company split and absorption-
type merger. The name of Renesas Semiconductor Kyushu Yamaguchi Co. Ltd. changed to Renesas
Semiconductor Package & Test Solutions Co., Ltd.
Oct. 2014 Merged Renesas Mobile Corporation through a simple merger method.
Transferred all shares of Renesas SP Driver Inc. held by the Company to a European subsidiary of U.S-
based Synaptics Incorporated.
Apr. 2015 Transferred the Company's device solution development function to Renesas Solutions Corp. through a
simple absorption-type company split.
Transferred the development support function of the Company to Renesas Engineering Service Co., Ltd.
through a simple absorption-type company split.
Renesas Solutions Corp.’s kits, platforms, and field solutions, as well as sales expansion infrastructure and
other development functions were transferred to the Company through a simple absorption-type company
split.
Renesas Solutions Corp. merged with Renesas System Design Co., Ltd. and changed its name to Renesas
System Design Co., Ltd.
Feb. 2016 Transferred part of the Shiga Plant of Renesas Semiconductor Manufacturing Co., Ltd. (8-inch wafer
production line) to ROHM Shiga Co., Ltd.
Jun. 2016 Renesas Electronics Singapore as a surviving company merged with Renesas Semiconductor Singapore.
Feb. 2017 Acquired all shares of U.S-based Intersil Corporation ("Intersil"), and turned it into a subsidiary of the
Company.
May. 2017 Transferred Renesas Semiconductor Package & Test Solutions Co., Ltd.'s contract development and
manufacturing and image recognition system development, manufacturing, and sales businesses to Hitachi
Maxell, Ltd.
Jul. 2017 Merged Renesas System Design Co., Ltd. through a simple merger.
Jan. 2018 Intersil as a surviving company merged with Renesas Electronics America and changed its name to
Renesas Electronics America.

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 Date Matters
Aug. 2018 Sold part of its shares of Renesas Easton Co., Ltd. and excluded it from the Company's equity-method
affiliates.
Oct. 2018 Transferred the Kochi Plant of Renesas Semiconductor Manufacturing Co., Ltd. to Marusan Sangyo Co.,
Ltd.
Jan. 2019 Merged Renesas Semiconductor Package & Test Solutions Co., Ltd. through a simple merger method.
Mar. 2019 Acquired all shares of Integrated Device Technology, Inc. ("IDT") in the U.S. and turned it into a subsidiary
of the Company.
Jan. 2020 IDT merged Renesas Electronics America and changed its name to Renesas Electronics America.
Aug. 2021 Acquired all shares of Dialog Semiconductor Plc ("Dialog") in the U.K. and turned it into a subsidiary of the
Company.
Dec. 2021 Acquired all shares of Celeno Communications Inc. which is a holding company of Celeno Communications
Ltd. ("Celeno") in Israel and turned it into a subsidiary of the Company.
(Note) As a result of this merger, Renesas Technology Corp.'s affiliated companies have been succeeded, and some of
the Group's affiliated companies have been reorganized or changed their names.

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3. Business Description
As of December 31, 2021, the Group consisted of the Company and 114 subsidiaries (5 domestic and 109 foreign
companies). As a manufacturer specializing in semiconductors, the Group is engaged in research, design, development,
manufacture, sales, and services relating to a variety of semiconductors.
The Group's research, design, development, manufacture, sales and service functions are primarily divided among the
Company and its subsidiaries. The research, design and development functions are the responsibilities of the Company
and other overseas subsidiaries, such as Renesas Electronics America, Renesas Semiconductor Design Beijing, Renesas
Design Vietnam, and Renesas Electronics Europe are in charge of research, design and development functions. The
manufacturing functions are handled mainly by domestic and overseas production subsidiaries, but we also utilize
foundries and other external production subcontractors as needed. The sales and servicing functions are conducted
primarily through affiliated distributors in Japan, and primarily through overseas sales subsidiaries, such as Renesas
Electronics America, Renesas Electronics Europe and Renesas Electronics Hong Kong, or distributors in overseas.
The Group consists of the “Automotive Business” and the “Industrial/Infrastructure/IoT Business”. Segment
information is disclosed based on this classification.
The Automotive Business includes in-vehicle control, which provides semiconductors for controlling automobile engines
and bodies, and in-vehicle information, which provides semiconductors for censoring systems, which detect the
environment inside and outside of a vehicle; in-vehicle infotainment (IVI) and instrument panels, which transmit various
information to the driver, and other in-vehicle information devices. In this segment, the Group mainly provides
microcontrollers, SoCs (systems-on-a-chip), analog semiconductors, and power semiconductors.
The Industrial/Infrastructure/IoT Business includes the “Industrial” business, which supports smart society; the
“Infrastructure” business and the “IoT” business. In this segment, the Group mainly provides microcontrollers, SoCs and
analog semiconductors.
In addition, the Company's design operations and the semiconductor contract development and production carried out
by production subsidiaries are classified as "Other."

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 Consolidated subsidiaries of the Group (114 companies) by major business are as follows.
As of December 31, 2021
Name of
Related Major Domestic subsidiaries Foreign subsidiaries
Segment for Businesses
Reporting
Sales (Consolidated subsidiaries)
Renesas Electronics China
Renesas Electronics Shanghai
Renesas Electronics Hong Kong
Renesas Electronics Taiwan
Renesas Electronics Korea
Renesas Electronics Singapore
Renesas Electronics Malaysia
Renesas Electronics India
Renesas Electronics Canada
Renesas Electronics Brazil Service
Renesas Electronics Europe (U.K.)
Renesas Electronics Europe (Germany)
Renesas Electronics Israel

5 other companies

Manufacturing (Consolidated subsidiary) (Consolidated subsidiaries)

and Renesas Semiconductor Renesas Semiconductor Beijing
manufacturing Manufacturing Co., Ltd. Renesas Semiconductor (Suzhou)
support Renesas Semiconductor K.L.
Renesas Semiconductor Malaysia
Renesas Semiconductor (Keda)
Automotive Renesas Semiconductor Technology (Malaysia)
and
Industrial/ 6 other companies
Infrastructure
/IoT Design, (Consolidated subsidiary) (Consolidated subsidiaries)
development, Renesas Engineering Services Renesas Semiconductor Design Beijing
and Co., Ltd. Renesas Design Vietnam
application Renesas Semiconductor Design (Malaysia)
technologies Renesas Design Bulgaria
Renesas Design Zurich
Renesas Integrated Circuit Shanghai
Renesas Integrated Circuit Chengdu

1 other company

Operating (Consolidated subsidiaries) (Consolidated subsidiaries)

Companies 3 companies Renesas Electronics America
and Others Renesas Electronics Germany
Renesas Electronics Penang
Renesas International Operations (Malaysia)
Intersil Luxembourg
IDT Bermuda
Gig Peak
Dialog
Celeno

62 other companies

(Note) 1. Part of our overseas sales subsidiaries are also engaged in the business of designing and developing products.
2. The Company acquired Dialog, a British analog chip company, as a wholly owned subsidiary on August 31, 2021.
Dialog changed its name to Dialog Semiconductor Limited on September 14, 2021.
3.The Company acquired Celeno, which is a holding company of Celeno Communications Ltd., an Israel analog
chip company, as wholly owned subsidiary on December 20, 2021.

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4. Statuses of Affiliated Companies
As of December 31, 2021
Voting rights
Share capital or
holding/held
Name Address investments Major Business Relationship
ratio (%)
(Millions of yen)
(Note 1)
(Consolidated subsidiaries)
Manufacture of the Company
Manufacture of
Renesas Semiconductor products
Hitachinaka-shi, semiconductor
Manufacturing Co., Ltd. 100 100.0 Loans-None
Ibaraki Prefecture products (front-end
(Note 2) Real estate/equipment leasing-Yes
process)
Interlocking directorates -None
Design-related services for the
Design support for Company products
Renesas Engineering Services
Kodaira-shi, Tokyo 50 semiconductor 100.0 Loans-None
Co., Ltd.
products Real estate/equipment leasing-Yes
Interlocking directorates-None
Sales of the Company products
Sales of
China $ thousand Loans-None
Renesas Electronics China, Inc. semiconductor 100.0
Beijing 38,540 Real estate/equipment leasing-None
products in China
Interlocking directorates-None
Sales of the Company products
Sales of
China $ thousand Loans-None
Renesas Electronics Shanghai semiconductor 100.0
Shanghai 7,100 Real estate/equipment leasing-None
products in China
Interlocking directorates-None
Thousands of Sales of Sales of the Company products
Renesas Electronics Hong China Hong Kong semiconductor Loans-None
100.0
Kong (Note 2) Hong Kong dollars products in Hong Real estate/equipment leasing-None
15,000 Kong Interlocking directorates-None
Sales of the Company products
Thousands of Sales of
Taiwan Loans-None
Renesas Electronics Taiwan Taiwan dollars semiconductor 100.0
Taipei Real estate/equipment leasing-None
170,800 products in Taiwan
Interlocking directorates-None
Sales of Sales of the Company products
Thousands of
South Korea semiconductor Loans-None
Renesas Electronics Korea won 100.0
Seoul products in South Real estate/equipment leasing-None
3,751,885
Korea Interlocking directorates-None
Sales of
Sales of the Company products
semiconductor
$ thousand Loans-None
Renesas Electronics Singapore Singapore products in ASEAN, 100.0
32,287 Real estate/equipment leasing-None
India, Oceania and
Interlocking directorates-None
the Middle East
Sales and Support of The Company
Thousand Sales support for 100.0 products
Malaysia
Renesas Electronics Malaysia ringgits semiconductor (100.0) Loans-None
Selangor
700 products in Malaysia (Note 3) Real estate/equipment leasing-None
Interlocking directorates-None
Thousands of Sales of the Company products
Sales of 100.0
India Indian Loans-None
Renesas Electronics India semiconductor (99.90)
Bangalore Rupee Real estate/equipment leasing-None
products in India (Note 3)
32,500 Interlocking directorates-None
Design,
development, Design, development, manufacture,
manufacture and and sales of the Company products
Renesas Electronics America United States $ thousand
sale of 100.0 Loans-None
(Note 2) (Note 6) California 2,952,449
semiconductor Real estate/equipment leasing-None
products in the Interlocking directorates-None
United States
Development and sales of the
Development and
Thousands of 100.0 Company products
Canada sales of
Renesas Electronics Canada Canadian dollars (100.0) Loans-None
Ontario semiconductor
44,560 (Note 3) Real estate/equipment leasing-None
products in Canada
Interlocking directorates-None
Sales (technical) Sales and (Technical) Support of the
support of 100.0 Company products
Renesas Electronics Brazil Brazil
― semiconductor (100.0) Loans-None
Service Sao Paulo
products in Brazil (Note 3) Real estate/equipment leasing-None
and South America Interlocking directorates-None
Design, development, and sales of the
Design, development
Thousands of Company products
Renesas Electronics Europe United Kingdom and sales of
pounds 100.0 Loans-None
(U.K.) Buckinghamshire semiconductor
32,920 Real estate/equipment leasing-None
products in Europe
Interlocking directorates-None
Design, development, and sales of the
Design, development
Thousands of Company products
Renesas Electronics Europe Germany and sale of 100.0
euros Loans-None
(Germany) (Note 2) (Note 6) Dusseldorf semiconductor
14,000 Real estate/equipment leasing-None
products in Europe
Interlocking directorates-None

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 Voting rights
Share capital or
holding/held
Name Address investments Major Business Relationship
ratio (%)
(Millions of yen)
(Note 1)
Manufacture of Manufacture of the Company products
China $ thousand semiconductor Loans-None
Renesas Semiconductor Beijing 100.0
Beijing 90,444 products (back-end Real estate/equipment leasing-None
process) Interlocking directorates-None
Manufacture of Manufacture of the Company products
100.0
Renesas Semiconductor China $ thousand semiconductor Loans-None
(6.33)
(Suzhou) Suzhou 43,226 products (back-end Real estate/equipment leasing-None
(Note 3)
process) Interlocking directorates-None
Manufacture of Manufacture of the Company products
Thousand
Malaysia semiconductor Loans-None
Renesas Semiconductor K. L. ringgits 100.0
Selangor products (back-end Real estate/equipment leasing-None
118,237
process) Interlocking directorates-None
Manufacture of Manufacture of the Company products
Thousand
Renesas Semiconductor Malaysia semiconductor Loans-None
ringgits 90.0
Malaysia Penang products (back-end Real estate/equipment leasing-None
84,000
process) Interlocking directorates-None
Manufacture of Manufacture of the Company products
Thousand 100.0
Malaysia semiconductor Loans-None
Renesas Semiconductor (Keda) ringgits (100.0)
Keda products (back-end Real estate/equipment leasing-None
1,000 (Note 3)
process) Interlocking directorates-None
Manufacture of Manufacture of the Company products
Thousand 100.0
Renesas Semiconductor Malaysia semiconductor Loans-None
ringgits (100.0)
Technology (Malaysia) Penang products (back-end Real estate/equipment leasing-None
1,000 (Note 3)
process) Interlocking directorates-None
Design and Development of the
Design and
Company Products
Renesas Semiconductor China $ thousand development of
100.0 Loans-None
Design Beijing Co., Ltd. Beijing 7,000 semiconductor
Real estate/equipment leasing-None
products
Interlocking directorates-None
Design and Development of the
Design and
Company Products
Vietnam $ thousand development of
Renesas Design Vietnam 100.0 Loans-None
Ho Chi Minh City 10,200 semiconductor
Real estate/equipment leasing-None
products
Interlocking directorates-None
Design and Development of the
Design and
Thousand 100.0 Company Products
Renesas Semiconductor Malaysia development of
ringgits (100.0) Loans-None
Design (Malaysia) Penang semiconductor
1,000 (Note 3) Real estate/equipment leasing-None
products
Interlocking directorates-None
Shared services (Group company
Managing certain
Thousand 100.0 services)
Renesas International Malaysia contract operations
ringgits (100.0) Loans-None
Operations (Note 2) Selangor of the Group
426,302 (Note 3) Real estate/equipment leasing-None
companies
Interlocking directorates-None
100.0 Loans-None
$ thousand
Intersil Luxembourg Luxembourg Holding company (100.0) Real estate/equipment leasing-None
91,585
(Note 3) Interlocking directorates-None
Sales of the Company products
Thousand Israeli Sales of
Israel Loans-None
Renesas Electronics Israel shekels semiconductor 100.0
Herzliya Real estate/equipment leasing-None
2 products
Interlocking directorates-None
Design and Development of the
Design and
Thousands of 100.0 Company Products
Bulgaria development of
Renesas Design Bulgaria Bulgarian Lev (100.0) Loans-None
Varna semiconductor
5 (Note 3) Real estate/equipment leasing-None
products
Interlocking directorates-None
Design and Development of the
Design and
Thousands of 100.0 Company Products
Switzerland development of
Renesas Design Zurich Swiss francs (100.0) Loans-None
Zurich semiconductor
100 (Note 3) Real estate/equipment leasing-None
products
Interlocking directorates-None
Development and sales of the
Development and
Thousands of 100.0 Company products
Renesas Integrated Circuit China sales of
yuan (100.0) Loans-None
Shanghai Shanghai semiconductor
4,960 (Note 3) Real estate/equipment leasing-None
products
Interlocking directorates-None
Development and sales of the
Development and
Thousands of 100.0 Company products
Renesas Integrated Circuit China sales of
yuan (100.0) Loans-None
Chengdu Chengdu semiconductor
3,000 (Note 3) Real estate/equipment leasing-None
products
Interlocking directorates-None
Development, Development and sales of the
100.0
Renesas Electronics Penang Malaysia $ thousand manufacture and Company products
(100.0)
(Note 2) Penang 551,785 sale of Loans-None
(Note 3)
semiconductor Real estate/equipment leasing-None

- 11 -
 products Interlocking directorates-None

Development, Development and sales of the

Thousands of manufacture and 100.0 Company products
Renesas Electronics Germany Germany
euros sale of (100.0) Loans-None
(Note 2) Dresden
15,750 semiconductor (Note 3) Real estate/equipment leasing-None
products Interlocking directorates-None
100.0 Loans-None
IDT Bermuda $ thousand
Bermuda Holding company (100.0) Real estate/equipment leasing-None
(Note 2) 462,119
(Note 3) Interlocking directorates-None
100.0 Loans-None
Gig Peak United States $ thousand
Holding company (100.0) Real estate/equipment leasing-None
(Note 2) California 225,344
(Note 3) Interlocking directorates-None
Development, Development and sales of the
manufacture and Company products
Dialog United Kingdom $ thousand
sale of 100.0 Loans-None
(Note 4) Reading 13,526
semiconductor Real estate/equipment leasing-None
products Interlocking directorates-None
Loans-None
Celeno United States $
Holding company 100.0 Real estate/equipment leasing-None
(Note 2) (Note 5) Delaware 1
Interlocking directorates-None
77 other consolidated
subsidiaries
(Note) 1. Voting rights holding/held ratio is rounded down to the nearest second decimal place.
2. This is a specified subsidiary.
3. Figures in parentheses in the voting rights holding ratio column indicate shares attributable to indirect ownership.
4. The Company acquired Dialog, a British analog chip company, as a wholly owned subsidiary on August 31,
2021. Dialog changed its name to Dialog Semiconductor Limited on September 14, 2021.
5. The Company acquired Celeno, which is a holding company of Celeno Communications Ltd., an Israel analog
chip company, as wholly owned subsidiary on December 20, 2021.
6. Renesas Electronics America and Renesas Electronics Europe (Germany) accounted for more than 10% of
consolidated net sales (excluding intercompany sales).
Renesas Electronics America (1) Net sales 271,959 Millions of yen
Major Profit and Loss Information (2) Ordinary income 18,255 Millions of yen
(3) Net loss 15,079 Millions of yen)
(4) Net assets 642,210 Millions of yen
(5) Total assets 752,678 Millions of yen
Figures for Renesas Electronics America, Inc. are consolidated financial results, including its subsidiaries (46
companies).
Renesas Electronics Europe (Germany) (1) Net sales 124,242 Millions of yen
Major Profit and Loss Information (2) Ordinary loss 4,777 Millions of yen)
(3) Net loss 3,308 Millions of yen)
(4) Net assets 11,502 Millions of yen
(5) Total assets 71,239 Millions of yen
Figures for Renesas Electronics Europe (Germany) are consolidated financial results including its 1 subsidiary.

- 12 -
5. Status of Employees
(1) Consolidated Basis
The Group had 20,962 employees as of December 31, 2021.
Segment-specific information is omitted because the majority of the Group's employees are related to both the
Automobile Business and the Industrial/Infrastructure/IoT Business.
The number of employees is the number of persons engaged in work (excluding employees seconded from the Group
to outside the Group, but including those seconded from outside the Group to the Group). The number of temporary
employees is omitted because it is less than 10/100 of the number of employees.

(2) Status of the Filing Company

As of December 31, 2021
Average length of service
Number of employees Average age (years) Average annual salary (yen)
(years)
6,116 47.3 21.6 8,825,893
(Note) 1. The number of employees is the number of persons engaged in work (excluding employees seconded from the
Company to external companies but including employees seconded from external companies to the Company).
2. The calculation of the average length of service includes years of service at Hitachi, Ltd., Mitsubishi Electric
Corporation, NEC Corporation, and their affiliated companies.
3. The average annual salary amount includes bonuses and non-standard wages.
4. The number of temporary employees is omitted because it is less than 10/100 of the number of employees.
5. The number of employees of the Group increased by 2,209 compared to the previous year at the end of the
current fiscal year, due to the conversion of Dialog into a wholly owned subsidiary of the Company.

(3) Union Information

As of December 31, 2021, the Company's labor union was Renesas Electronics Labor Union, which belongs to the
Japanese Electrical, Electronic & Information Union. The number of union members as of December 31, 2021 was
3,748.
There is nothing particular to report relating to matters with the labor union.

- 13 -
II. Business Conditions
1. Management Policy, Management Environment and Issues to be Addressed etc.
(1) Sales Growth, Appropriate Cost Control, and Optimization of Production Structure
Firstly, the Group's sales increased during this Business Period compared to the previous year as a result of
recovering demand for automobiles and infrastructure development accelerating in line with digitization trends triggered
by the Covid-19 pandemic, as well as the acquisition of Dialog reaching completion in August 2021. Additionally, design-
in, which is a source of future sales revenue, was 8% over target for this Business Period, an increase of 6% year on
year. To achieve further sales growth, the Group will strive to expand and strengthen its product portfolio and necessary
technologies through both an organic approach (expanding and strengthening existing businesses) and an inorganic
approach (leveraging strategic alliances with other companies, acquisitions, and similar initiatives).Through the organic
approach, the Group will promote intensive investment in research and development in the Group's focus areas. Specific
areas of focus include SoCs for automated driving and automated driving assistance, microcontrollers for automotive
domain control, Insulated Gate Bipolar Transistors (IGBTs) for xEVs, mixed signal products for ADAS and xEVs,
microcontrollers mounting ARM cores and RISC-V cores, Battery Management Systems (BMS), MPUs with built-in
Dynamically Reconfigurable Processor-AI (DRP-AI), and analog and mixed signals for data centers and 5G-related
products. Meanwhile, the Group will take an inorganic approach by continuing to develop winning combinations and
other initiatives to maximize synergies with Dialog and Celeno, which were acquired during this Business Period, in
addition to the previously acquired former Intersil and IDT. In addition, through further M&A, the Group will, in a timely
manner, expand its product portfolio and technologies to areas currently not held by the Group.
Secondly, on the cost front, despite the ongoing rise in transport costs due to the effects of the Covid-19 pandemic,
the Group continues to implement logistics realignment measures, and the effects of these were seen in this Business
Period. In terms of improving operational and IT system efficiency, the Group is strategically investing in integrating its
existing the ERP (Enterprise Resource Planning) system, and believes these benefits will be felt over the mid- to long-
term. In the short term, the Group will strive to control costs appropriately while ensuring it makes strategic investments
necessary for future sales growth and business efficiency.
On the production front, the operating rates of the Group's production bases during the fiscal year under review were
57% for the 6-inch production plant, 97% for the 8-inch production plant, 75% for the 12-inch production plant, and 84%
for all plants on average. Against the backdrop of a worldwide supply shortage of microcontrollers and SoCs for in-
vehicle control and other semiconductors, the Group will work to expand production volumes at contract manufacturers
in addition to expanding facilities at its own plants to ensure a stable supply. In addition, in light of the fire at the Naka
Factory in March last year, the Group will strive to take disaster prevention measures, including expanding firefighting
facilities and predictive maintenance systems at its own plants.

(2) Strengthening Software Development Capabilities

As of the end of this Business Period, software development personnel accounted for more than 10% of the Group's
total development personnel.
However, in recent years, the added value of semiconductor-related software has increased further, and enhancing
software development capabilities will also be important for the provision of the Group’s products and solutions.
The Group is working to strengthen its software development and customer support systems by promoting internal
development efficiency and leveraging outsourcing opportunities with software companies. Going forward, the Group
will continue to expand and strengthen its development workforce through inorganic approaches and proactive
recruitment and continue to build and implement strategies related to software development.

(3) Responding to Geopolitical Issues

In recent years, trade conflicts between the United States and China have become increasingly prolonged and intense,
and may develop into a more significant issue in the future in the semiconductor market, which is the business segment
of the Group.
The Group is working to decentralize its design bases worldwide and optimize its resources from short-, medium-,
and long-term perspectives. The Group will continue its activities to minimize such geopolitical risks in the future.

(4) Responding to the Mergers and Acquisitions in the Semiconductor Industry

The semiconductor industry, in which the Group operates, has traditionally experienced intense competition on a
global level, and there is a trend toward mergers and acquisitions. In recent years, several large-scale M&A deals with
acquisition values exceeding 1 trillion yen have been announced, accelerating this trend and highlighting the differences
in the scale of business among semiconductor industry companies.
Considering these developments, in this Business Period the Group acquired Dialog and Celeno in order to expand
and strengthen its business portfolio and rank as a competitor. Going forward, the Group will continue to list and update
potential acquisition candidates and consider mergers and acquisitions that will contribute to increasing corporate value.

(5) Improving Employee Engagement and Instilling the Renesas Culture

With "To Make Our Lives Easier" as its purpose, the Group provides products and solutions that make people's lives
easier. In the previous Business Period, the Group developed and launched the "Renesas Culture," which consists of
five elements: "Transparent, Agile, Global, Innovative, Entrepreneurial," as a set of action guidelines shared by all Group
organizations and employees worldwide to respond swiftly and flexibly to a constantly changing environment.
During this Business Period, the Group took various measures to accelerate the penetration of this "Renesas Culture."
Going forward, the Group will further share each element of the "Renesas Culture" with its employees to further improve
engagement.

- 14 -
(6) Optimizing the Employee Portfolio
At this end of the Business Period, the Group's regional headcount was 45% in Japan, 10% in North America, 10%
in Europe, and 35% in Asia-Pacific.
From a medium- to long-term perspective, the Group will implement a variety of personnel measures with the aim of
achieving an optimal employee age composition and regional composition for the Group, as well as expanding the
number of employees engaged in important fields such as software and in fields that are expected to grow in the future.
Specifically, the Group will organize a global talent recruitment team and implement more globally aligned and
strategic recruitment activities in each region than ever before. At the same time, the Group will continue to optimize
the portfolio of Group employees, using an inorganic approach.

(7) Promotion of ESG Activities and Information Disclosure

During this Business Period, the Group implemented several initiatives for ESG and SDGs (Sustainable Development
Goals). Going forward, the Group will continue to promote activities that contribute to the environment and contribute
to society, such as the diversity of human resources and employee health and safety, as well as activities that contribute
to governance, such as the strengthening of the Board of Directors function.
The Group will also strive to further improve our corporate value by further enhancing non-financial information on
this ESG activity, improving its ESG rating, and expanding information disclosure to various stakeholders surrounding
the Group.

(8) Optimization of the supply chain

The Group's supply chain faces challenges in terms of aligning production with order lead times and business
practices related to order finalization.
To resolve these issues, the Group is making improvements to its structure and IT systems to modernize and bring
them to industry standard, and will continue to work to optimize our supply chain through various measures, including
establishment of chip stocks, in addition to consolidation and improvement of IT systems, review of business terms and
conditions, and optimization of sales channels.

- 15 -
2. Risk Factors
The Group’s operations and financial results are subject to various risks and uncertainties, including those described
below, that could significantly affect investors’ judgment. In addition, the following statements include matters which might
not necessarily fall within the scope of such significant risks but are deemed important for investors’ judgment from a
standpoint of affirmative disclosure.
Statements regarding the future in the following paragraphs are based on the Group’s understanding of the information
available as of March 30, 2022.

(1) Market Fluctuations

Semiconductor market fluctuations, which are caused by factors such as economic cycles in each region and shifts in
demand of end customers, affect the Group. Although the Group carefully monitors changes in market conditions, it is
difficult to completely avoid the impact of market fluctuations due to economic cycles in countries around the world and
changes in the demand for end products. Market downturns, therefore, could lead to decline in product demand and
increase in production and inventory amounts, as well as lower sales prices. Consequently, market downturns could
reduce the Group’s sales, as well as lower fab utilization rates, which may in turn result in lower gross margins, ultimately
leading to deterioration in profits.

(2) Fluctuations in foreign exchange and interest rates

The Group engages in business activities in all parts of the world and in a wide range of currencies. The Group
continues to engage in hedging transactions and other arrangements to minimize exchange rate risks, but it is possible
for our consolidated business results and financial condition, including our sales amount in foreign currencies, our
materials costs in foreign currencies, our production costs at overseas manufacturing sites, and other items, to be
influenced if exchange rates change significantly. Also, the Group’s assets, liabilities, income, and costs can change
greatly by presenting our assets and debts that are denominated in foreign currencies by converting the amounts in
Japanese yen, and these can also change when financial statements in foreign currencies at our overseas subsidiaries
are converted to and presented in Japanese yen.
Since expenses as well as asset and debt values associated with the Group’s business operation are influenced by
fluctuations in interest rates, it is also possible for the Group’s businesses, performance, and financial condition to be
adversely influenced by these fluctuations.

(3) Natural Disasters

Natural disasters such as earthquakes, tsunamis, typhoons, and floods, accidents such as fires, power outages, and
system failures, acts of terror, war, infectious diseases and other unpredictable factors could adversely affect the Group’s
business operation. In particular, as the Group owns key facilities and equipment in areas where earthquakes occur at a
frequency higher than the global average, the effects of earthquakes and other events could damage the Group’s facilities
and equipment and force a halt to manufacturing and other operations, and such events could consequently cause
severe damage to the Group’s business. Similar situations may also occur due to other types of natural disasters,
accidents such as fires, power outages, and system failures, acts of terror, war, infectious diseases, and other similar
events. For example, in March 2021, a fire occurred at some processes of a Group subsidiary’s semiconductor
manufacturing plant (N3 building (300mm line)), causing the production and shipment of products at the plant to cease
temporarily. However, in the future, the Group's business, results of operations and financial condition could be materially
adversely affected by, among other things, the burden of costs to restore damaged plant facilities and equipment, a
decrease in sales and operating income due to a decrease in plant utilization or stop, and a deterioration in gross margins.
In preparation for these risks, the Group sets and manages the BCP (Business Continuity Plan), which defines
preventive plans and contingency plans etc., and also purchase various insurances; however, such plans and insurances
may not fully hedge the risks or cover the losses and damages from events we could not anticipate. Also, the current
spread of COVID-19 infections worldwide and the continuing unstable social, economic, fiscal, and working environments
have affected the Group's business performance and business activities. The Group puts top priority to ensure the health
and safety of employees, customers, and other related parties, and strives to develop a system that allows the Group to
continue its business even in the face of various difficulties caused by the pandemic. However, the spread of the COVID-
19 pandemic is not a factor the Group can directly control, so development of such countermeasures does not guarantee
the Group's business continuity. In addition, since there is no clear prospect of the COVID-19 pandemic subsiding, and
since the timing and future impact of the end of the pandemic remain uncertain at this stage, it is not possible to predict
with certainty the final impact of the COVID-19 pandemic on the Group, including whether or not there are any other
impacts. If the COVID-19 situation becomes more serious or prolonged in the future, the Group's business, results of
operations and financial condition may be significantly adversely affected.

(4) Competition
The semiconductor industry is extremely competitive, and the Group is exposed to fierce competition from competitors
around the world in areas such as product performance, structure, pricing and quality. In particular, certain competitors
have pursued acquisitions, consolidations, and business alliances, etc. in recent years and there is a possibility that such
actions will be taken in the future as well. As a result, the competitive environment surrounding the Group may further
intensify. To maintain and improve competitiveness, the Group takes various measures including development of leading-
edge technologies, standardizing design, cost reduction, and consideration of strategic alliances with third parties or
possibility of further acquisitions. In the event that the Group cannot maintain its competitiveness, the Group’s market
share may decline, which may negatively impact the Group’s financial results.
In addition, fierce market competition has subjected the products of the Group to sharp downward pressure on prices,
for which measures to improve profitability, such as price negotiations and efforts at cost price reduction, have been

- 16 -
 unable to fully compensate. This raises the possibility of a worsening of the Group’s gross margin. Furthermore, in cases
where customers for the Group’s products for which the gross margin is low have difficulty switching to other products or
require a certain amount of time to secure replacements, it may be difficult for the Group to halt or reduce production in
a timely manner. This may result in a reduction in the profitability of the Group.

(5) Implementation of Management Strategies

The Group is implementing a variety of business strategies and structural measures, including the development of a
“ Mid-Term Growth Strategy” and reforming the organizational structure of the Group, to strengthen the foundations of
its profitability. Implementing these business strategies and structural measures requires a certain level of cost and due
to changes in economic conditions and the business environment, factors for which the future is uncertain, as well as
additional unforeseeable factors, it is possible that some of those reforms may become difficult to carry out and others
may not achieve the originally planned results. Furthermore, additional costs, which are higher than originally expected,
may arise. Thus, these issues may adversely influence the Group’s performance and financial condition.

(6) Business Activities Worldwide

The Group conducts business worldwide, which can be adversely affected by factors such as barriers to long-term
relationships with potential customers and local enterprises, restrictions on investment and imports/exports tariffs, fair
trade regulations, political, social and economic risk including changes in trade policies, trade barriers and heightened
trade conflicts among countries, outbreaks of illness or disease, exchange rate fluctuations, rising wage levels, and
transportation delays. As a result, the Group may fail to achieve its initial targets regarding business in overseas markets,
which could have a negative impact on the business growth and performance of the Group.

(7) Strategic Alliance and Corporate Acquisition

For business expansion and strengthening of competitiveness, the Group may engage in strategic alliances, including
joint investments, and corporate acquisitions. For example, in February 2017, the Group acquired Intersil Corporation,
in March 2019, the US based semiconductor company IDT, and in August 2021, the UK-based semiconductor company
Dialog. With regard to such alliances and acquisitions, the Group examines the likely return on investment and profitability
from a variety of perspectives. However, in cases where there is a mismatch with the prospective alliance partner or
acquisition target in areas of management strategy such as capital procurement, technology management, and product
development, or there are financial or other problems affecting the business of the prospective collaboration partner or
acquisition target, in addition to the time and expense required for integration of aspects such as business execution,
technology, products, personnel, systems and response to antitrust laws and other regulations of the relevant authorities,
there is a possibility that the alliance relationship or capital ties will not be sustainable, or in the case of acquisitions for
which the anticipated return on investment or profitability cannot be realized. Furthermore, there is a possibility that the
anticipated synergies or other advantages cannot be realized due to an inability to retain or secure the main customers
or key personnel of the prospective alliance partner or acquisition target. Thus, there is no certainty that an alliance or
acquisition will achieve the goals initially anticipated.

(8) Financing
While the Group has been procuring business funds by methods such as borrowing from financial institutions and
other sources, in the future it may become necessary to procure additional financing to implement business and
investment plans, expand manufacturing capabilities, acquire technologies and services, and repay debts. It is possible
that the Group may face limitations on its ability to raise funds due to a variety of reasons, including the fact that the
Group may not be able to acquire required financing in a timely manner or may face increasing financing costs due to
the worsening business environment in the semiconductor industry, worsening conditions in the financial and stock
markets, and changes in the financing policies of lenders. In addition, the Company may also finance acquisitions when
conducting acquisitions from financial institutions. For example, for the purpose of raising funds for the acquisition of
Dialog, which we announced in February 2021, the Company entered into a loan agreement (maximum total loan amount:
665.4 billion yen, including a Facilities Agreement and further amendments) with financial institutions, and as of August
2021 we had borrowed a total of 270 billion yen based on this agreement. Similarly to the loan agreement, in order to
finance the acquisition of Dialog, in June 2021 the Company completed a public offering and third-party allocation of new
shares to Daiwa Securities Co. Ltd., raising a total of approximately 222.6 billion yen. In addition, in order to refinance
the above loan to medium- to long-term funds, we entered into a syndicated loan agreement (total loan amount: 96
billion) with financial institutions including Mitsubishi UFJ Bank, Ltd., Mizuho Bank, Ltd., and Sumitomo Mitsui Trust Bank,
Ltd. and entered into a term loan agreement (total loan amount: 144 billion yen) with the Japan Bank for International
Cooperation. In addition to these, in November of the same year, as part of raising funds and diversifying financing
methods, we issued US dollar-denominated unsecured corporate bonds (including some green bonds), for a total of 1.35
billion US dollars. However, regardless of whether or not the Company raises funds through the issuance of new shares,
the Company will bear a large amount of interest-bearing liabilities by financing for company acquisitions, including the
acquisition of Dialog. If the initially expected cash flow generation or switching to long-term funds is not realized, the
Group's financial condition will deteriorate, credit ratings may be lowered, which may also increase funding costs or
constrain the Group's financing. In addition, some of the borrowing contracts executed between the Group and some
financial institutions stipulate articles of financial covenants. If the Group breaches these articles due to reasons such as
a deterioration of the Group's financial condition, the Group may lose the benefit of term on the contract, and it may
adversely influence the Group’s business performance and financial conditions.

(9) Notes on Additional Financing

After implementation of the allocation of new shares to a third party based on a decision at the Meeting of the Board

- 17 -
 of Directors held on December 10, 2012, we received an offer from the former Innovation Network Corporation of Japan
(business name changed to Japan Investment Corporation as of September 25, 2018) that they are willing to provide
additional investments or loans with an upper limit of 50 billion yen. However, former Innovation Network Corporation of
Japan underwent restructuring, forming a separate subsidiary entity as of September 21, 2018, leading to the new
subsidiary, INCJ, Ltd., to take over the contract initially undertaken with the former Innovation Network Corporation of
Japan. Currently, no specific details regarding the timing of or conditions associated with these additional investments or
loans have been determined, and there is no guarantee that these additional investments or loans will actually be
implemented. If investments occur based on this offer, further dilution of existing stock will occur, and this may adversely
impact existing shareholders. In addition, if loans are made under this offer, the Group’s outstanding interest-bearing
liabilities will increase, and this may impose restrictions on some of our business activities. Furthermore, if fluctuations
in interest rates occur in the future, the Group’s businesses, performance, and financial condition may be adversely
affected.

(10) Relationship with Largest Shareholder, INCJ

As a result of the allocation of common stock to the former Innovation Network Corporation of Japan and others by
way of third-party allotment on September 30, 2013, the former Innovation Network Corporation of Japan now holds a
majority share of voting rights held in association with Renesas Electronics’ share. From June 2017 onward, the former
Innovation Network Corporation of Japan gradually divested itself of its holdings of common stock in the Company, and
as of September 21, 2018, formed a separate subsidiary entity. As a result of this restructuring, all shares owned by the
former Innovation Network Corporation of Japan were passed on to the new subsidiary, INCJ, Ltd., which is presently
the largest shareholder in the Company. Thus, the business operations of the Group are potentially subject to a
substantial influence through the exercise by INCJ of its voting rights at General Meetings of Shareholders. In addition,
should INCJ at some future date sell all or part of Renesas Electronics’ share which is currently held for investment
purpose, this could potentially have a substantial effect on the market value of Renesas Electronics’ share, depending
on factors such as the market climate at the time of the sale.

(11) Rapid Technological Evolutions and Other Issues

The semiconductor market in which the Group does business is characterized by rapid technological changes and
rapid evolution of technological standards. Therefore, if the Group is not able to carry out appropriate research and
development, the Group’s businesses, performance, and financial condition may all be adversely affected by product
obsolescence and the existence of competing products in the marketplace.

(12) Product Production

(i) Production Process Risk
Semiconductor products require extremely complex production processes. In an effort to increase yields (defined as
the ratio of non-defective products from the materials used), the Group takes steps to properly control production
processes and seeks ongoing improvements. However, the emergence of defects in these production processes could
lead to lower yields. These defects, in turn, could trigger shipment delays, reductions in shipment volume, or, at worst,
the halting of shipments.

(ii) Procurement of Raw Materials, Components, and Production Facilities

The timely procurement of necessary raw materials, components and production facilities is critical to semiconductor
production. To avoid supply problems related to these essential raw materials, components and production facilities,
the Group works diligently to develop close relationships with multiple suppliers. Some necessary materials, however,
are available only from specific suppliers. Consequently, insufficient supply capacity amid tight demand for these
materials as well as events including natural disasters, accidents, acts of terror, war, worsening of business conditions,
and withdrawal from the business by suppliers could preclude their timely procurement, or may result in sharply higher
prices for these essential materials upon procurement. Furthermore, defects in procured raw materials or components
could adversely influence the Group’s manufacturing operations and additional costs may be incurred by the Group.

(iii) Risks Associated with Outsourced Production

The Group outsources the manufacturing of certain semiconductor products to external foundries (contract
manufacturers) and other entities. In doing so, the Group selects its trusted outsourcers, rigorously screened in advance
based on their technological capabilities, supply capacity, and other relevant traits; however, there is some possibility
of delivery delays, product defects and other production-side risks stemming from outsourcers. In particular, inadequate
production capacity among outsourcers or operation shutdown of the outsourcers as a result of a natural disaster, could
result in the Group being unable to supply enough products.

(iv) Maintenance of Production Capacity at an Appropriate Level

The semiconductor market is sensitive to fluctuations in the business climate, and it is difficult to predict future product
demand accurately. Thus, it is not always possible for the Group to maintain production capacity at an appropriate level
that matches product demand. Unanticipated events such as fires, power outages or system failures at manufacturing
plants could also significantly reduce the Group's production capacity for a given period of time, In addition, even if the
Group engages in capital investment to boost production capacity, there is generally a certain amount of time required
before the actual increase in production capacity takes place.
Therefore, if demand for specific products substantially exceeds the Group’s production capacity at a certain point
and the state of excess demand continues over time, there is a possibility that the Group will be unable to supply

- 18 -
 customers with the products they desire, that opportunities to sell the products in question will be lost, that the Group
will lose market share as customers switch to competing products, and that the relationship of the Group and its
customers will suffer.
On the other hand, if in response to a rise in demand for specific products the Group undertakes capital investment
with the aim of increasing production capacity, there is no guarantee that demand for the products in question will remain
strong once production capacity actually increases and afterward. There is a possibility that actual product demand may
turn out to be less than anticipated, in which case it may not be possible to recover the capital investment with the
anticipated earnings.

(13) Product Quality

Although the Group makes an effort to improve the quality of semiconductor products, they may contain defects,
anomalies or malfunctions that are undetectable at the time of shipment due to increased sophistication of technologies,
the diversity of ways in which the Group’s products are used by customers and defects in procured raw materials or
components. These defects, anomalies or malfunctions could be discovered after the Group products were shipped to
customers, resulting in the return or exchange of the Group’s products, claims for compensatory damages, or
discontinuation of the use of the Group’s products, which could negatively impact the profits and operating results of
the Group. To prepare for such events, the Group has insurance such as product liability insurance and recall insurance,
but it is not guaranteed that the full costs of reimbursements would be covered by these.

(14) Product Sales

(i) Reliance on Key Customers
The Group relies on certain key customers for a significant portion of its product sales to customers. The decision by
these key customers to cease adoption of the Group’s products, or to dramatically reduce order volumes, could
negatively impact the Group’s operating results.

(ii) Changes in production plans by customers of custom products

The Group receives orders from customers for the development of specific semiconductor products in some cases.
There is the possibility that, after the Group received the orders, the customers decide to postpone or cancel the launch
of the end products in which the ordered product is scheduled to be embedded. There is also the possibility that the
customers cancel its order if the functions and quality of the product do not meet the customer requirements. Further,
the weak sales of end products in which products developed by the Group are embedded may cause customers to
reduce their orders, or to postpone delivery dates. Such changes in production plans, order reductions, postponements
and other actions from the customers concerning custom products may cause declines in the Group sales and
profitability.

(iii)Reliance on Authorized Sales Agents

In Japan and Asia, the Group sells the majority of its products via independent authorized sales agents and relies on
certain major authorized sales agents for a significant portion of these sales. The inability of the Group to provide these
authorized sales agents with competitive sales incentives or margins, or to secure sales volumes that the authorized
sales agents consider appropriate, could result in a decision by such agents to review their sales network of the Group’s
products, including the reduction of the network, etc., which could cause a downturn in the Group sales.

(15) Securing Human Resources

The Group works hard to secure superior human resources for management, technology development, sales, and
other areas when deploying business operations. However, since such superbly talented people are of limited number,
there is fierce competition in the hiring of human resources. Under the current conditions, it may not be possible for the
Group to secure the talented human resources it requires.

(16) Defined Benefit Obligations

Net defined benefit liability and net defined benefit asset are calculated based on actuarial assumptions, such as
discount rates or returns on assets. However, the Group performance and financial condition may be adversely affected
either if discrepancies between actuarial assumptions and business performance arise due to changing interest rates
or a fall in the stock market and defined benefit obligations increase or our plan assets decrease and there is an increase
in the pension funding deficit in the retirement benefit obligations system.

(17) Capital Expenditures and Fixed Cost Ratio

The semiconductor business in which the Group is engaged requires substantial capital investment. The Group
undertakes capital investment in an ongoing manner, and this requires it to bear the associated amortization costs. In
addition, if there is a decrease in demand due to changes in the market climate and the anticipated scale of sales cannot
be achieved, or if excess supply causes product prices to fall, there is a possibility that a portion or the entirety of the
capital investment will not be recoverable or will take longer than anticipated to be recovered, and as a result it may
have an adverse effect on the business performance and the financial condition of the Group.
Furthermore, the majority of the expenses of the Group are accounted for by fixed costs such as production costs
associated with factory maintenance and R&D expenses, in addition to the abovementioned amortization costs
accompanying capital investment. Even if there is a decline in sales due to a reduction in orders from the Group’s main
customers or a drop in product demand, or if the factory operating rate decreases, it may be difficult to reduce fixed
costs to compensate. As a result, a relatively small-scale drop in sales can have an adverse effect on the profitability of

- 19 -
 the Group.

(18) Impairment Loss on Long-term Assets

The Group owns substantial long-term assets, consisting of both property, plant and equipment such as plant facilities
and intangible assets such as goodwill obtained through the acquisition of the former Intersil Corporation and the former
IDT. In addition, although the purchase price allocation for the acquisition of Dialog, etc. has not been completed at this
time, fixed assets, including goodwill, may be recorded depending on the outcome. When there are indications of
impairment, the Group examines the possibility of recovering the book value of assets based on the future cash flow to
be generated from the assets. It may be necessary to recognize impairment of such assets if insufficient cash flow is
generated.

(19) Information Systems

Information systems are of growing importance in the Group’s business activities. Although the Group makes an effort
to manage stable operation of information systems, there is a likelihood that customer confidence and social trust would
deteriorate, resulting in a negative effect on the Group’s performance if there is a significant problem with the Group’s
information systems caused by factors such as natural disasters, accidents, computer viruses and unauthorized
accesses.

(20) Information Management

The Group has in its possession a great deal of confidential information and personal information relating to its
business activities. While such confidential information is managed according to law and internal regulations specifically
designed for that purpose, there is always the risk that information may leak due to unforeseen circumstances. Should
such an event occur, there is a likelihood that leaks of confidential information may result in damages to our competitive
position and customer confidence and social trust would deteriorate, resulting in a negative effect on the Group’s
performance.

(21) Legal Restrictions

The Group is subject to a variety of legal restrictions in the various countries and regions. These include requirements
for approval for businesses and investments, antitrust laws and regulations, export restrictions, customs duties and
tariffs, accounting standards and taxation, and environment laws. In future, it is possible that the Group’s businesses,
performance, and financial condition may be adversely affected by increased costs and restrictions on business
activities associated with the strengthening of local laws.
The Group makes use of an internal regulation system to ensure legal compliance and appropriate financial reporting.
However, since by its nature an internal regulation system is inherently limited, there is no guarantee that it will
accomplish its goals completely. Consequently, the possibility is not nonexistent that legal violations, etc., may occur in
future. Should a violation of the law or other regulations occur, the Group could be subject to administrative penalties
such as fines, legal penalties, or claims for compensatory damages, or there could be a negative impact on the social
standing of the Group. This could have an adverse effect on the businesses, business performance, and financial
condition of the Group.

(22) Environmental Factors

The Group strives to decrease its environmental impact with respect to diversified and complex environmental issues
such as global warming, air pollution, industrial waste, tightening of hazardous substance regulation, and soil pollution.
There is the possibility that, regardless of whether there is negligence in its pursuit of business activities, the Group
could bear legal or social responsibility for environmental problems. Should such an event occur, the burden of expenses
for resolution could potentially be high, and the Group could suffer erosion in social trust.

(23) Intellectual Property

While the Group seeks to protect its intellectual property, it may not be adequately protected in certain countries and
areas. In addition, there are cases that the Group’s products are developed, manufactured and sold by using licenses
received from third parties. In such cases, there is the possibility that the Group could not receive necessary licenses
from third parties, or the Group could only receive licenses under terms and conditions that are less favorable than
before.
With regard to the intellectual property rights related to the Group’s products, it is possible that a third party might file
a lawsuit against the Group or its customers claiming patent infringement, or the like, and that as a result the
manufacture and sale of the affected products might not be possible in certain countries or regions. It is also possible
that the Group could be liable for damages to a third party or to a customer of the Group.

(24) Legal Issues

Details are listed under “Note 36. Commitments and Contingencies, (4) Others” in the Financial Section.

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3. Management’s Discussion and Analysis of Financial Positions, Operating Results and Cash
Flows
An overview of the financial positions, operating results and cash flows (the “Operating Result”) as on a consolidated
basis of the Group for the fiscal year ended December 31, 2021 (“this Fiscal Year”).
Forward-looking statements concerning financial position, operating results and cash flow are prepared using the
Group’s judgment as of December 31, 2021.

(1) Significant Accounting Policies and Estimates

The Group’s consolidated financial statements are prepared in accordance with International Financial Reporting
Standards (hereafter "IFRS") and in accordance with Article 93 of the “Ordinance on Terminology, Forms, and Preparation
Methods of Consolidated Financial Statements”. In preparing these consolidated financial statements, estimates and
assumptions deemed necessary are made based on reasonable standards. Significant accounting policies, assumptions
for the future and uncertainties involved in the estimates used in the consolidated financial statements are listed under
“Note 3. Significant Accounting Policies, Note 4. Significant Accounting Estimates and Judgments” in the Financial
Section.

(2) Financial Position

Increase
December 31, 2020 December 31, 2021 (Decrease)
Billions of yen Billions of yen Billions of yen
Total assets 1,609.0 2,406.2 797.3
Total equity 619.7 1,161.5 541.8
Equity attributable to owners of parent 616.7 1,158.1 541.4
Equity ratio attributable to owners of parent (%) 38.3 48.1 9.8
Interest-bearing liabilities 693.7 830.9 137.2
Debt to Equity ratio 1.12 0.72 (0.40)

Total assets at December 31, 2021 were 2,406.2 billion yen, a 797.3 billion yen increase from December 31, 2020. This
was mainly due to increase in goodwill resulting from the acquisition of Dialog and Celeno. Total equity was 1,161.5 billion
yen, a 541.8 billion yen increase from December 31, 2020. This was mainly due to an increase in common stock and
capital surplus resulting from the issuance of new shares through a public offering, and an increase in other components
of equity such as translation adjustments of foreign exchange difference due to exchange rate fluctuations, and an
increase in retained earnings due to net income.
Equity attributable to owners of parent increased by 541.4 billion yen from December 31, 2021, and Equity ratio
attributable to owners of parent was 48.1%. In addition, Interest-bearing liabilities increased by 137.2 billion yen from
December 31, 2021, due to the issuance of bonds. Consequently, Debt to equity ratio was 0.72.

(3) Overview of Financial Results

The Group discloses consolidated business results in terms of both its internal measures which management relies
upon in making decisions (hereinafter the “Non-GAAP” financial measures) and those under IFRS.
Non-GAAP gross income and operating profit is calculated based on gross income (“IFRS gross income”) under IFRS
and operating profit under IFRS (“IFRS operating profit”) and by excluding or adjusting it for non-recurring items and other
adjustments following a certain set of rules. The Group believes providing non-GAAP forecasts will help to better
understand the Group’s constant business results. Non-recurring items include amortization of intangible assets
recognized from acquisitions, other purchase price allocation (“PPA”) adjustments, costs related to acquisitions and stock-
based compensation as well as other non-recurring expenses and income the Group believes to be appropriate for
exclusion.
The Group mainly consists of “Automotive Business” and “Industrial/Infrastructure/IoT Business” and those are the
Group’s reportable segments. Following these changes, the Group discontinued the disclosure of the “Non-GAAP
Revenue from Semiconductors” segment. For details, please refer to “Note 6. Business Segments” in the Financial Section.
(Note) For disclosure of Non-GAAP financial measures, the Group refers to the rules specified by the U.S. Securities and Exchange
Commission but does not fully comply with such rules.

(i) Overview of the current financial operation (Non-GAAP basis)

Year ended Year ended

Increase
December 31, 2020 December 31, 2021
(Decrease)
(Jan 1 – Dec 31, 2020) (Jan 1 – Dec 31, 2021)
Billion yen Billion yen Billion yen % Change

Revenue 715.7 994.4 278.7 38.9%

Automotive 341.0 462.3 121.3 35.6%

Industrial/Infrastructure/IoT 363.6 515.5 151.9 41.8%

Non-GAAP Gross Profit 338.7 528.9 190.1 56.1%
Non-GAAP Gross Margin 47.3% 53.2% 5.9pts ---

- 21 -
 128.5 214.6 86.1 67.0%
Automotive
37.7% 46.4% 8.7pts ---
209.1 312.3 103.2 49.3%
Industrial/Infrastructure/IoT
57.5% 60.6% 3.1pts ---
Non-GAAP Operating Profit 137.5 296.6 159.0 115.6%
Non-GAAP Operating Margin 19.2% 29.8% 10.6pts ---
48.4 122.4 74.1 153.2%
Automotive
14.2% 26.5% 12.3pts ---
89.7 167.1 77.4 86.3%
Industrial/Infrastructure/IoT
24.7% 32.4% 7.7pts ---
Yen Yen
Exchange rate (USD) 107 109 - -
Exchange rate (EUR) 121 130 - -
(Note) 1. For details on the above, please refer to “Note 6. Business Segments” in the Financial Section.
2. Exchange rates are the average of each month's rates used for the conversion of revenues and expenses.
3. Consolidated revenue for the years ended December 31, 2020 and 2021 are based on IFRS and do not include
non-GAAP adjustments i

The financial results for the year ended December 31, 2021 are as follows:

<Revenue>
Consolidated revenue for the year ended December 31, 2021 was 994.4 billion yen, a 38.9% increase year on year.
This was mainly due to an increase in revenue in the Automotive Business as a result of the recovery from the reduced
vehicle production caused by the COVID-19 pandemic mostly during the first half of the fiscal year ended 2020, in addition
to an increase in revenue capturing demand expansion in the Industrial/Infrastructure/IoT Business and a sales increase
effect from the consolidation of Dialog following the completion of the acquisition on August 31, 2021. It should be noted
that as of September 14, 2021, Dialog has changed its company name to Dialog Semiconductor Limited.

<Non-GAAP Gross Profit (Margin)>

Non-GAAP gross profits for the year ended December 31, 2021 was 528.9 billion yen, a 190.1 billion yen increase year
on year. This was mainly due to increases in revenue for both Automotive and Industrial/Infrastructure/IoT Businesses as
well as an increase in gross margin mainly from improvements in product mix and the factory utilization rate. As a result,
non-GAAP gross margin for the year ended December 31, 2021 was 53.2%, an increase by 5.9 points year on year..

<Non-GAAP Operating Profit (Margin)>

Non-GAAP operating profit for the year ended December 31, 2021 was 296.6 billion yen, a 159.0 billion yen increase
year on year. This was mainly due to an increase in gross profit as well as an effort to streamline non-GAAP adjusted
selling, general and administrative expenses. As a result, non-GAAP operating margin for the year ended December 31,
2021 was 29.8%, an increase by 10.6 points year on year.

The revenue breakdown of the business segments for the year ended December 31, 2021 are as follows:

Automotive Business
The Automotive Business includes the product categories “Automotive Control,” comprising semiconductor devices for
controlling automobile engines and bodies, and “Automotive Information,” comprising of semiconductor devices used in
sensing systems for detecting environments inside and outside the vehicle as well as Automotive Information devices
such as in-vehicle infotainment (IVI) and instrument panels used to give various information to the driver of the vehicle.
The Group mainly supplies microcontrollers (MCUs), system-on-chips (SoCs), analog semiconductor devices and power
semiconductor devices in each of these categories.
Revenue of the Automotive Business for the year ended December 31, 2021 was 462.3 billion yen, a 35.6% increase
year on year. This was mainly due to increases in sales for both the “Automotive Control” and “Automotive Information”
categories following the recovery from the reduced vehicle production.
Non-GAAP gross profit of the Automotive Business for the year ended December 31, 2021 was 214.6 billion yen, an
86.1 billion yen increase year on year. This was due to an increase in gross margin mainly from product mix improvements
in addition to an increase in revenue.
Non-GAAP operating profit of the Automotive Business for the year ended December 31, 2021 was 122.4 billion yen, a
74.1 billion yen increase year on year, due to the sales increase effect as well as an increase in profits from gross margin
improvements.

Industrial/Infrastructure/IoT Business
The Industrial/Infrastructure/IoT Business includes the categories “Industrial,” “Infrastructure” and “IoT” which support
a smart society. The Group mainly supplies MCUs and SoCs in each of these categories.
Revenue of the Industrial/Infrastructure/IoT Business for the year ended December 31, 2021 was 515.5 billion yen, a
41.8 % increase year on year. This was mainly due to an increase in revenues in the “Industrial,” “Infrastructure,” and “IoT”
categories in addition to revenue increase from the consolidation of Dialog. Main contributors were devices for factory
automation, data centers, mobile phone base stations, and OA devices such as PCs.
Non-GAAP gross profit of the Industrial/Infrastructure/IoT Business for the year ended December 31, 2021 was 312.3
billion yen, a 103.2 billion yen increase year on year. This was mainly due to an increase in gross margin from product

- 22 -
 mix improvements in addition to an increase in revenue.
Non-GAAP operating profit of the Industrial/Infrastructure/IoT Business for the year ended December 31, 2021 was
167.1 billion yen, a 77.4 billion yen increase year on year, due to the sales increase effect as well as an increase in profits
from gross margin improvements.

The Group announced the “Mid-Term Growth Strategy” and “Financial Model” on February 17, 2020. The Group set as
a long-term target of achieving sales growth exceeding that of the market through concentrated investment of
management resources in markets on which the Group is focusing its attention. The Group also targets to optimize
production efficiency, improve the product mix and realize synergies from the integrations of the former IDT, Dialog and
Celeno. The Group updated its existing financial model on September 29, 2021, targeting to achieve a 50-55% Non-GAAP
gross margin and a 25-30% Non-GAAP operating margin.
The targets in the "Mid-Term Growth Strategy" and "Financial Model" are the Group's long-term management objectives
as of the date of filing and we cannot guarantee that they will be achieved. Results may be affected by a number of risk
factors and other changes in the external environment, including the matters described under "Risk Factors" in the
Management’s Discussion and Analysis of Operations.

(ii) Reconciliation of Non-GAAP gross profit to IFRS gross profit and Non-GAAP operating profit to IFRS operating profit
(Billion yen)
Year ended Year ended
December 31, 2020 December 31, 2021
(Jan 1 – Dec 31, 2020) (Jan 1 – Dec 31, 2021)
Non-GAAP gross profit 338.7 528.9
Non-GAAP gross margin 47.3% 53.2%
Amortization of purchased intangible assets
(1.5) (0.8)
and depreciation of property, plant and equipment
Market valuation of inventories --- (13.4)

Stock-based compensation (1.2) (1.4)

Other reconciliation items in non-recurring
(0.3) (16.9)
expenses and adjustments
IFRS gross profit 335.7 496.4
IFRS gross margin 46.9% 49.9%

Non-GAAP operating profit 137.5 296.6

Non-GAAP operating margin 19.2% 29.8%
Amortization of purchased intangible assets
(55.5) (57.6)
and depreciation of property, plant and equipment
Market valuation of inventories --- (13.4)

Stock-based compensation (14.6) (14.9)

Other reconciliation items in non-recurring
(2.4) (27.1)
expenses and adjustments
IFRS operating profit 65.1 183.6
IFRS operating margin 9.1% 18.5%
(Note) “Other reconciliation items in non-recurring expenses and adjustments” includes the non-recurring items related
to acquisitions and other adjustments as well as non-recurring profits or losses the Group believes to be
applicable.

(iii) Overview of the current financial operation (IFRS)

Year ended Year ended

Increase
December 31, 2020 December 31, 2021
(Decrease)
(Jan 1 – Dec 31, 2020) (Jan 1 – Dec 31, 2021)
Billion yen Billion yen Billion yen % Change

Revenue 715.7 994.4 278.7 38.9%

Gross Profit 335.7 496.4 160.7 47.9%

Gross Margin 46.9% 49.9% 3.0 pts ---
Operating Profit 65.1 183.6 118.5 181.8%
Operating Margin 9.1% 18.5% 9.4 pts ---

(iv) Overview of production, orders and sales

The Group manufactures and sells a wide variety of products and even if the products are of the same type, their
performance, structure, and format are not necessarily uniform. In addition, there are many products that do not take
the form of built-to-order production. Accordingly, the Group does not disclose the scale of production or the scale of

- 23 -
 orders received for each product category in terms of value or quantity.
Therefore, the status of production, orders received, and sales is shown in relation to the revenue segment in
"Management's Discussion and Analysis."
Sales to major customers and the ratio to total sales are as follows.

Year ended Year ended

Business Segments December 31, 2020 December 31, 2021
(Jan 1 – Dec 31, 2020) (Jan 1 – Dec 31, 2021)
Millions of yen % Millions of yen %
Automotive and
Ryosan Company, Limited Industrial/Infrastructure/IoT 73,599 0.3 141,325 14.21
Business
Automotive and
WT Microelectronics Co., Ltd. Industrial/Infrastructure/IoT 50,374 7.0 127,845 12.86
Business
(Note) Tax is not included in the amounts written above.

(4) Cash Flows

Year ended Year ended

December 31, 2020 December 31, 2021
(Jan 1 – Dec 31, 2020) (Jan 1 – Dec 31, 2021)
Billions of yen Billions of yen
Net cash provided by (used in) operating activities 223.9 307.4
Net cash provided by (used in) investing activities (40.2) (663.1)
Free cash flows 183.7 (355.7)
Net cash provided by (used in) financing activities (104.5) 340.9
Cash and cash equivalents at the beginning of period 146.5 219.8
Cash and cash equivalents at the end of period 219.8 221.9
(Note) As defined as a total of net cash flows provided by (used in) operating and investing activities.

(Net cash provided by (used in) operating activities)

Net cash provided by operating activities for the year ended December 31, 2021 was 307.4 billion yen. This was
mainly due to a recording of 152.5 billion yen in profit before tax as well as adjustments in non-cash items such as
depreciation.

(Net cash provided by (used in) investing activities)

Net cash used in investing activities for the year ended December 31, 2021 was 663.1 billion yen. This was mainly
due to the acquisitions of shares of Dialog and Celeno.

The foregoing resulted in negative free cash flows of 355.7 billion yen for the year ended December 31, 2021.

(Net cash provided by (used in) financing activities)

Net cash provided by financing activities for the year ended December 31, 2021 was 340.9 billion yen. This was
mainly due to proceeds from the issuance of new shares mainly through public offering as well as the issuance of
bonds.

(5) Liquidity and Capital Resources

The Group’s basic financial policy is to secure adequate liquidity and capital resources for its operations and to maintain
a strong balance sheet. On January 15, 2019, the Company entered into a syndicated loan agreement for a total of 897.0
billion yen with its primary financial institutions, MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited,
and others, in order to procure capital necessary for the acquisition of the former IDT and to renew an existing loan for
the purpose of securing mid- to long-term working capital. The Company drew down 698.0 billion yen as a term-loan under
the aforementioned agreement in March 2019. In addition, the Company repaid an existing term-loan in June 2019 and
executed a 149.0-billion-yen term-loan agreement.
Based on the resolution of the Board of Directors meeting held on May 28, 2021, the Group conducted a public offering
with a payment date of June 15, 2021 and a third-party allotment with a payment date of June 28, 2021. As a result,
common stock and capital surplus increased by 111.9 billion yen and 111.1 billion yen, respectively. In addition, on August
31, 2021, the Company borrowed term loans with a total amount of 270 billion yen from Mitsubishi UFJ Bank, Ltd. and
Mizuho Bank, Ltd., to finance the acquisition of Dialog.
On December 23, 2021, with the purpose of refinancing the remaining 240 billion yen of the existing loan of 270 billion
yen to mid- to long-term funds, after having repaid 30 billion yen, the Company concluded a syndicated loan agreement
with MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank, and other financial institutions for the total of 96
billion yen. On the same day, the Company concluded a JBIC loan agreement with JBIC (Japan Bank for International
Cooperation) for a total of 144 billion yen.
The Company decided on November 19, 2021, to issue US dollar-denominated senior notes in multiple tranches. The
Company issued 500 million of US dollar-denominated senior notes due 2024 and 850 million of US dollar-denominated
senior notes due 2026, for total proceeds of 1,350 million US dollars. The yen-converted amount of the outstanding
balance of the Company's bonds at the end of the fiscal year ended December 31, 2021 was 154.6 billion yen.

- 24 -
 As of December 31, 2021, the total amount of borrowings was 659.5 billion yen. As of December 31, 2021, the Group
had 221.9 billion yen in cash and cash equivalents.

(6) Off-balance Sheet Arrangements

The Group conducts liquidation of accounts receivable on a regular basis. As of December 31, 2021, the balance of
liquidated accounts receivable was 14.0 billion yen.

- 25 -
4. Material Operational Contracts etc.
Material operational contracts for the Group’s business and their content are as follows:

(1) Technological Assistance Agreements and Similar Agreements

Execution
Agreement and party Contract description
date
(i) Patent cross-licensing agreement with Texas March 2, Cross license of patents relating to semiconductors
Instruments Incorporated 2011 (including subsidiaries)
(ii) Agreement for introduction of technology from December Introduction of technology relating to design of
ARM Limited 22, 2015 semiconductors

(2) Loan Agreements

Execution
Lender Contract description
date

(i) Mitsubishi UFJ Trust and Banking Corporation Syndicated loan totaling 421.0 billion yen in order to
January 15,
Mizuho Bank, Ltd. procure capital necessary for the acquisitions and to renew
2019
Sumitomo Mitsui Trust Bank, Ltd. an existing loan for the purpose of mid-term working capital

Commitment line of 75.0 billion yen (maximum) to secure

(i) Mitsubishi UFJ Trust and Banking Corporation
flexible means of procuring financing to meet funding
Mizuho Bank, Ltd.
July 13, 2020 requirements in future business developments and to
Sumitomo Mitsui Trust Bank, Ltd.
secure working capital, as well as to improve the stability
Resona Bank Limited
of the Company's financial base
(iii) Mitsubishi UFJ Trust and Banking Corporation
December Syndicated loan totaling 96.0 billion yen to refinance
Mizuho Bank, Ltd.
23, 2021 existing loans with med-term borrowings
Sumitomo Mitsui Trust Bank, Ltd., etc.
December Term loan totaling 144.0 billion yen to refinance existing
(iv) Japan Bank for International Cooperation
23, 2021 loans with med-term borrowings
(Note) The loan agreement set forth in (ii) has been terminated in March, 2021.

- 26 -
5. Research and Development Activities
(1) Structure and Policy of Research and Development Activities
The Group's research and development activities include the development of devices, software, and systems that are
needed from the present to the near future. Products related to in-vehicle control and automotive information are
handled by Automotive Solution Business Unit, while products related to Industry/Infrastructure/IoT are handled by IoT
and Infrastructure Business Unit. We have established a system in which each business unit and the Production and
Technology Unit cooperate to take charge of common technologies across divisions, such as device and process
technologies, implementation technologies, and design platforms and test methods.
In addition, we utilize not only our own research and development resources, but also external resources as necessary,
such as outsourcing research to consortiums and external research institutions, and utilizing third parties to provide
optimal support to a wide range of fields and customers.
In the super-smart society, where all kinds of goods, such as home appliances and automobiles, are linked to the
network, and information is exchanged with one another and services provided, it is necessary to achieve organic
linkage and communication among the computing functions performed by digital products, such as microcontrollers and
system LSIs, which the Company has traditionally been strong; the sensing functions that are equivalent to the eyes,
ears, and noses of the people, in which analog products are strong; and the actuator functions that are used to drive
motors and other products, in which power products are strong. The Group will expand its product portfolio to support
a broad range of functions, from sensing to accelerator functions, and strengthen its solution (called “Winning
Combination”), which combines analog products with digital products. At the same time, we will realize growth in the
market by focusing on research and development activities to provide software such as IP (design assets) and OS as
platforms that can be commonly used for each application.

(2) Main Research and Development Achievements

(i) Announcement of "RH850/U2B" to support next-generation hybrid and electric vehicle architecture
The Group unveiled "RH850/U2B", an in-vehicle microcontroller that employs 28-nanometer process technology.
Sample shipments of this product are scheduled to begin in April 2022.
In recent years, as countries strengthen their CO2 emission controls in an effort to counter global warming, xEVs
that can reduce CO2 emissions are quickly becoming widespread, since they contribute to the realization of an
environmentally friendly, safe, comfortable, and sustainable society.
In the future, automotive system design is expected to move toward next-generation E/E architecture, so there is
demand for automotive semiconductors that can help realize this.
This microcontroller is positioned at the highest end of the Group's RH850 family, with outstanding features such
as high performance, scalability, virtualization compatibility, and security features. This allows the Group to meet the
demanding requirements of automotive systems, and is best suited for zone domain controls, connected gateways,
and other cornerstones of the next generation E/E architecture, such as powertrain control and inverter control.
The Group will continue to lead the industry in advancing a safe and secure automobile society.

(ii) Announcement of an in-vehicle gateway solution combining the newly developed gateway SoC "R-Car S4" and
PMIC for the next generation of automotive central computers
The Group has announced automotive gateway solutions that combine the newly developed gateway SoC "R-Car
S4" and Power Management ICs (PMIC) for the next generation of automotive central computers.
This solution not only meets the high standards that will be required as automobile E/E architecture evolves in the
future, but also is a high-performance solution that accommodates multiple, diverse high-speed networks and is highly
equipped with security features and functional safety levels.
The "R-Car S4" that comprises this solution is designed with an emphasis on reusing existing software, and can
be used in conjunction with PMICs that operate seamlessly to improve user development efficiency. The PMICs also
achieve ultra low-power operation, and are capable of supplying 12 volts of automotive battery power as well as the
step-down voltage required by peripheral devices and other equipment, and can output up to 11 channels.
Sample shipments of both products have already started, and the Group has begun offering an evaluation board
for this solution. In addition to R-Car S4 and PMIC, this board is equipped with the "Autoclock RC2121x" timing ICs,
which is one of the Group's winning combinations.
By providing this solution, the Group is contributing to users' product design development efficiency and the
shortening of development time.

(iii) Announcement of communication infrastructure solutions at base stations and data centers
The Group has expanded its 5G Beam Forming IC portfolio and launched a 2 millimeter-wave device optimized for
5G and broadband radio.
This product is an 8-channel high-integrated transmitter receiver that can transmit and receive data, including
"F5288" for n257 frequency band (26.5GHz～29.5GHz) and "F5268" for n258/261 frequency band (24.25GHz～
27.5GHz). By using this product, users can respond to broadband signals not only for various base stations, but also
for fixed wireless access points, user premises equipment, and various other wireless infrastructures, enabling users
to design cost-effective phased array systems.
As a winning combination using this product, the Group has begun offering the up-down converters "F5728",
broadband mirroring synthetics "8V97003", and "Base Station Antenna and Front-End Solutions" combined with PMIC.
This solution allows customers in the telecommunications industry to design cost-effective base stations and other
- 27 -
 devices for long distance wireless.

(3) Research and Development Costs

The Group capitalizes a portion of its research and development costs, which are recorded as intangibles. Research
and development expenses for the fiscal period under review, including development expenses recorded as intangible
assets, were 156.3 billion yen, an increase of 212 million yen from 135.1 billion yen for the previous fiscal period. This
was primarily used for product design, system development, device development, process technology development,
and packaging technology development.
Since the majority of the Group's research and development is related to both the Automobile Business and the
Industrial/Infrastructure/IoT Business, information by segment is omitted.

- 28 -
III. Status of Facilities
1. Overview of Capital Expenditures
The Group's capital expenditures for this Fiscal Year (based on investment decisions) were 88.0 billion yen. Capital
expenditures were mainly for improving production capacity, strengthening design and development, and proquring
equipment damaged by the fire that occurred at the factory of our consolidated subsidiary on March 19, 2021.
This capital investment is used in both the Automobile Business and the Industrial/Infrastructure/IoT Business, and it is
difficult to allocate the amount strictly to each segment. Therefore, capital investment by each segment is omitted.

2. Status of Major Facilities

Major facilities of the Group at the end of this Fiscal Year review are as follows.
(1) Filing Company

Book value (million yen) (Note 1)

Related reports Machinery, Number

Site Name Details of
Buildings vehicles, of
(Location) segment name facilities Land
and tools, Others Total employees
(㎡)
structures furniture
and fixtures
Naka Factory Automobile, Semiconductor
2,985
(Hitachinaka-shi, Industrial/ production 7,906 20,769 4,702 36,362 269
(160,336)
Ibaraki Prefecture) Infrastructure/IoT facilities
Automobile,
Musashi Factory Semiconductor 7,133
Industrial/ 6,552 13,356 1,682 28,723 3,199
(Kodaira-shi, Tokyo) R&D facilities (56,268)
Infrastructure/IoT
Kawajiri Factory
Automobile, Semiconductor
(Kumamoto-shi, 3,375
Industrial/ production 8,996 5,564 268 18,204 77
Kumamoto (154,296)
Infrastructure/IoT facilities
Prefecture)
Saijo Factory Automobile, Semiconductor
1,556
(Saijo-shi, Ehime Industrial/ production 4,409 4,119 516 10,680 26
(119,536)
Prefecture) Infrastructure/IoT facilities
(Note) 1. The above figures do not include consumption taxes.
2. The Naka Factory, Kawajiri Factory, and Saijo Factory outsource operations to consolidated subsidiary
Renesas Semiconductor Manufacturing Co., Ltd.
(2) Overseas Subsidiaries

Book value (million yen) (Note)

Related reports Machinery,

Company Name Details of Number of
Buildings vehicles,
(Location) Segment name facilities Land employees
and tools, Others Total
(㎡)
structures furniture
and fixtures
Renesas Electronics
Automobile, Semiconductor
America, Inc. 2,669
Industrial/ production 17,688 13,103 1,105 34,862 1,718
(California, U.S.A., (586,032)
Infrastructure/IoT facilities
etc.)
Dialog Semiconductor
Automobile,
Limited Semiconductor －
Industrial/ 4,637 5,998 161 10,832 2,302
(United Kingdom R&D facilities (－)
Infrastructure/IoT
Reading)
(Note) Consumption tax, etc. are not included in the amounts in the above table.

3. Plans for New Facility Installation, Retirement, etc.

Plans for the installation and retirement of the Group's major facilities are formulated based on a comprehensive
consideration of demand trends, investment efficiency, and other factors. The semiconductor industry, to which the
Group belongs, is characterized by significant changes in the business climate in a short period of time, and it is difficult
to accurately calculate reliable figures for full-year earnings forecasts; accordingly, the Company discloses consolidated
earnings forecasts on a quarterly basis. As a result, we do not disclose specific plans for capital expenditures for the
following fiscal period; however, we plan to invest approximately 40.0 billion yen in the 1Q of 2022, and the main
investments will be for improving production capacity and strengthening design and development. We plan to use the
Company's own funds for the expenditures, however part of the investment will be subsidized by the Ministry of Economy,
Trade and industry.
This capital investment will be used in both the Automobile Business and the Industrial/Infrastructure/IoT Business, and
it is difficult to allocate strictly to each segment. Therefore, capital investment by each segment is omitted.

- 29 -
IV. Status of the Filing Company
1. Stock Information
(1) Total Number of Shares and Related Matters
(i) Total Number of Shares

Type Total Number of Authorized Shares

Common stock 3,400,000,000
Total 3,400,000,000

(ii) Issued Shares

Names of Listed Financial

Number of Issued Shares Number of Issued Shares
Instruments Exchange,
as of as of
Type Registered or Approved Details
the End of the Fiscal Year the Filing Date
Financial Instruments
(As of December 31, 2021) (As of March 30, 2022)
Trading Association
Shares constituting
Tokyo Stock Exchange
Common stock 1,943,805,775 1,944,304,675 one unit of shares:
(First Section)
100 shares
Total 1,943,805,775 1,944,304,675 ― ―
(Note) The number of issued shares as of the filing date does not include the number of shares issued upon exercise of
the stock acquisition rights from March 1, 2022 to the filing date of this report.

(2) Status of Stock Acquisition Rights

① Description of Stock Option Plan
(a) Stock acquisition rights in FY2017
First Series of FY2017 Stock Second Series of FY2017 Stock
Acquisition Rights Acquisition Rights
Date of Resolution March 13, 2017
Category and number of eligible persons 2 Company Directors
8 Company Executive Officers 3 Company Executive Officers
(excluding persons concurrently (excluding persons concurrently serving
serving as Directors) as Directors)
342 Company Employees 16 Subsidiaries Directors
4 Subsidiaries Directors 685 Subsidiaries Employees
205 Subsidiaries Employees
Number of stock acquisition rights (*) 2,355 [2,130] 877 [788]
(Note 1) (Note 1)
Type, details and number of shares to be
Common stock: 235,500 [213,000] Common stock: 87,700 [78,800]
issued upon exercise of the stock
(Note 1) (Note 1)
acquisition rights (*)
Amount to be paid upon exercise of the
1
stock acquisition rights (*)
Exercise period for stock acquisition
April 4, 2017 (JST) – April 3, 2027 (JST)
rights (*)
Issue price and amount to be included in
Issue price: 1,168
capital when issuing shares upon the
Amount to be included in capital: 584
exercise of the stock acquisition rights
(Note 2)
(*)
Conditions for the exercise of stock
(Note 3)
acquisition rights (*)
Restriction on transfer of stock Any acquisition of the stock acquisition rights through transfer shall require the
acquisition rights (*) approval by resolution of the Board of Directors of the Company.
Delivery of stock acquisition rights in
(Note 5)
reorganization (*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.

- 30 -
 There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1. The type of shares to be acquired upon exercise of the stock acquisition rights shall be shares of common stock of
the Company, and the number of shares to be acquired upon exercise of one stock acquisition right (the “Number
of Shares to be Granted”) shall be 100 shares.
However, in the case of a stock split (including gratuitous allotment of shares of common stock of the Company;
the same applies hereinafter) or stock consolidation of shares of common stock of the Company by the Company
after the allotment date, the Number of Shares to be Granted shall be adjusted using the following formula with
respect to the stock acquisition rights that have not been exercised at the time of such stock split or stock
consolidation:
(Number of shares to be granted after adjustment) = (Number of shares to be granted before adjustment) × (Ratio
of stock split or stock consolidation)
In addition to the above, if, after the allotment date, the Company carries out a merger or company split, or deems
it necessary (to essentially the same extent) to adjust the Number of Shares to be Granted in other situations, the
Company may appropriately adjust the Number of Shares to be Granted to a reasonable extent.
Any fraction less than one share resulting from such adjustment shall be rounded down to the nearest whole share.
2. (1) The issue price per share to be issued upon exercise of the stock acquisition rights is the sum of the amount to
be paid when exercising the stock acquisition rights and the book value of the stock acquisition rights. The
“amount to be included in capital” shows the amount obtained by multiplying the issue price of shares by 0.5
(any fractions less than one whole Yen rounded up to the nearest whole Yen).
(2)① The amount of share capital to be increased when issuing shares upon exercise of the stock acquisition right
will be half of the maximum amount of increases of the share capital to be calculated in accordance with
Article 17, Paragraph 1 of the Regulation on Corporate Accounting, and any fractions less than one whole
Yen shall be rounded down to the nearest whole Yen.
② The amount of legal capital surplus to be increased when issuing shares upon exercise of the stock acquisition
right will be the amount obtained by deducting the amount of share capital to be increased set forth in ①
above, from the maximum amount of increases of the share capital set forth in ① above.
3. (1) The holder of the stock acquisition rights may not exercise its stock acquisition rights during the period of one
year from the immediately following day of the allotment date.
(2) The holder of the stock acquisition rights shall be in the position of director, corporate officer, corporate auditor,
executive officer or employee of the Company or its subsidiaries (the “Exercise Qualification”) at the time of
exercise of the stock acquisition rights.
(3) Notwithstanding (1) and (2) above, if the holder of the stock acquisition rights loses its Exercise Qualification
(other than loss due to death), the holder of the stock acquisition rights may exercise its stock acquisition rights
only within the period of 13 months after the immediately following day of the day of loss of the Exercise
Qualification (only if during the exercise period for stock acquisition rights above).
(4) Notwithstanding (1) and (2) above, if the holder of the stock acquisition rights dies, the stock acquisition rights
may be succeeded to by one (and only one) of the heirs of such holder (the “Rights Successor”). In this case,
the Rights Successor may exercise the stock acquisition rights in a lump sum and only before the day that is
six months after the day immediately following the day on which the holder of the stock acquisition rights dies
(and only if during the exercise period for stock acquisition rights above). If the Rights Successor dies, the heirs
of the Rights Successor may not further succeed to the stock acquisition rights.
(5) If the holder of the stock acquisition rights waives the stock acquisition rights, such holder may not exercise
such stock acquisition rights.
(6) The stock acquisition rights allotment agreement between the Company and the holder of the stock acquisition
rights may provide other conditions not stipulated above.
4. If any of the following proposals is approved at a General Meeting of Shareholders of the Company (or, if a
resolution of a General Meeting of Shareholders is not required, resolved at a Meeting of the Board of Directors of
the Company), the Company may acquire all of the stock acquisition rights at no cost on the date separately
designated by the Board of Directors of the Company.
①proposal for approval of a merger agreement providing that the Company be dissolved;
②proposal for approval of a company split agreement or company split plan providing that the Company be split;
③proposal for approval of a share exchange agreement or share transfer plan providing that the Company become
a wholly-owned subsidiary;
④ proposal for approval of the Company acquiring all of shares subject to class-wide call pursuant to Article 171,
Paragraph 1 of the Companies Act;
⑤ proposal for approval of amendments to the articles of incorporation specifying a provision that, as a condition
pertaining to all of the shares issued by the Company, the acquisition of such shares through transfer requires
the Company’ approval;
⑥ proposal for approval of amendments to the Articles of Incorporation specifying a provision that, as a condition
pertaining to the class of shares to be acquired upon exercise of the stock acquisition rights, the acquisition of
such class of shares through transfer requires the Company’ approval, or a provision that the Company may
acquire all of such class of shares by resolution of the General Meeting of shareholders;
⑦ proposal for approval of stock consolidation of class of shares to be acquired upon exercise of the stock
acquisition rights (only if the number obtained by multiplying the unit shares relating to such class of shares by
the ratio of stock consolidation generates a fraction less than one share);
⑧ proposal for approval of demand for cash-out by special controlling shareholders pursuant to the provisions of
Article 179-3, Paragraph 1 of the Companies Act.
5. If the Company conducts a merger (limited to where the Company is to be dissolved as a result of the merger),
absorption-type company split or incorporation-type company split (limited to where the Company is to be split as

- 31 -
 a result of the absorption-type company split or incorporation-type company split), or share exchange or share
transfer (limited to where the Company becomes a wholly-owned subsidiary as a result of the share exchange or
share transfer) (collectively, a “Reorganization”), in each case stock acquisition rights of a stock company set out
in (a) through (e) of Article 236, Paragraph 1, Item 8 of the Companies Act (collectively, the “Reorganized
Company”) will be delivered to the holder of the stock acquisition rights holding the stock acquisition rights that are
outstanding immediately before the effective date of the Reorganization (which means, in the case of an absorption-
type merger, the day on which the absorption-type merger becomes effective, in the case of an incorporation-type
merger, the day on which the incorporation-type merger becomes effective, in the case of an absorption-type
company split, the day on which the absorption-type company split becomes effective, in the case of an
incorporation-type company split, the day on which the incorporation-type company split becomes effective, in the
case of a share exchange, the day on which the share exchange becomes effective, and in the case of a share
transfer, the day on which the wholly-owning parent company incorporated through share transfer is incorporated;
the same applies hereinafter) (the “Outstanding Stock Acquisition Rights”) on the following conditions, in which
case, the Outstanding Stock Acquisition Rights will be terminated; provided, however, that this shall apply only if
the delivery of stock acquisition rights by the Reorganized Company on the following conditions is stipulated in an
absorption-type merger agreement, incorporation-type merger agreement, absorption-type company split
agreement, incorporation-type company split plan, share exchange agreement, or share transfer plan.
(1) Numbers of stock acquisition rights of the Reorganized Company to be issued
The number of stock acquisition rights equal to the number of the Outstanding Stock Acquisition Rights held by
the holder of the stock acquisition rights shall be delivered.
(2) Type of the Reorganized Company’s share to be acquired upon exercise of stock acquisition rights
Common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company to be acquired upon exercise of stock acquisition rights
To be determined in accordance with (Note 1) above based on the consideration of conditions for the
Reorganization and other factors.
(4) Amount of assets to be contributed upon exercise of the stock acquisition rights:
The contribution to be made upon exercise of the stock acquisition rights to be delivered will be made for cash,
and the amount of the assets to be contributed shall be obtained by multiplying one Japanese yen, which is the
amount per share of the Reorganized Company to be delivered upon exercise of the stock acquisition rights,
by the number of shares of the Reorganized Company to be acquired upon exercise of stock acquisition rights
to be determined pursuant to 3. above.
(5) Exercise period of the stock acquisition rights:
The exercise period of the stock acquisition rights will be from the later of the commencement date of the
exercise period for stock acquisition rights above in which the stock acquisition rights are exercisable or the
effective date of the Reorganization through the expiration date of the exercise period for stock acquisition rights
above in which the stock acquisition rights are exercisable.
(6) Matters relating to share capital and legal capital surplus to be increased by the issuance of new shares upon
exercise of the stock acquisition rights:
To be determined in accordance with (Note 2) above.
(7) Restriction on transfer of stock acquisition rights
Any transfer of stock acquisition rights shall be subject to the approval by a resolution of the board of directors
of the Reorganized Company.
(8) Call provision of stock acquisition rights
To be determined in accordance with (Note 4) above.
(9) Other conditions for exercising stock acquisition rights
To be determined in accordance with (Note 3) above.

Fourth Series of FY2017 Stock Acquisition Rights

Date of Resolution June 27, 2017
Category and number of eligible persons 13 Company Employees
Number of stock acquisition rights (*) 8 [0] (Note 1)
Type, details and number of shares to be issued upon Common stock: 800 [0]
exercise of the stock acquisition rights (*) (Note 1)
Amount to be paid upon exercise of the stock
1
acquisition rights (*)
Exercise period for stock acquisition rights (*) July 13, 2017 (JST) – July 12, 2027 (JST)
Issue price and amount to be included in capital when Issue price: 1,000
issuing shares upon the exercise of the stock Amount to be included in capital: 500
acquisition rights (*) (Note 2)
Conditions for the exercise of stock acquisition rights (*) (Note 3)
Any acquisition of the stock acquisition rights through transfer
Restriction on transfer of stock acquisition rights (*) shall require the approval by resolution of the Board of
Directors of the Company.
Delivery of stock acquisition rights in reorganization (*) (Note 5)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.

- 32 -
 There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1. The type of shares to be acquired upon exercise of the stock acquisition rights shall be shares of common stock of
the Company, and the number of shares to be acquired upon exercise of one stock acquisition right (the “Number
of Shares to be Granted”) shall be 100 shares.
However, in the case of a stock split (including gratuitous allotment of shares of common stock of the Company;
the same applies hereinafter) or stock consolidation of shares of common stock of the Company by the Company
after the allotment date, the Number of Shares to be Granted shall be adjusted using the following formula with
respect to the stock acquisition rights that have not been exercised at the time of such stock split or stock
consolidation:
(Number of shares to be granted after adjustment) = (Number of shares to be granted before adjustment) × (Ratio
of stock split or stock consolidation)
In addition to the above, if, after the allotment date, the Company carries out a merger or company split, or deems
it necessary (to essentially the same extent) to adjust the Number of Shares to be Granted in other situations, the
Company may appropriately adjust the Number of Shares to be Granted to a reasonable extent.
Any fraction less than one share resulting from such adjustment shall be rounded down to the nearest whole share.
2. (1) The issue price per share to be issued upon exercise of the stock acquisition rights is the sum of the amount to
be paid when exercising the stock acquisition rights and the book value of the stock acquisition rights. The
“amount to be included in capital” shows the amount obtained by multiplying the issue price of shares by 0.5
(any fractions less than one whole Yen rounded up to the nearest whole Yen).
(2)① The amount of share capital to be increased when issuing shares upon exercise of the stock acquisition right
will be half of the maximum amount of increases of the share capital to be calculated in accordance with
Article 17, Paragraph 1 of the Regulation on Corporate Accounting, and any fractions less than one whole
Yen shall be rounded down to the nearest whole Yen.
② The amount of legal capital surplus to be increased when issuing shares upon exercise of the stock acquisition
right will be the amount obtained by deducting the amount of share capital to be increased set forth in ①
above, from the maximum amount of increases of the common stock set forth in ① above.
3. (1) The holder of the stock acquisition rights may not exercise its stock acquisition rights from the immediately
following day of the allotment date to April 3, 2018 (Japan Standard Time).
(2) The holder of the stock acquisition rights shall be in the position of director, corporate officer, corporate auditor,
executive officer or employee of the Company or its subsidiaries (the “Exercise Qualification”) at the time of
exercise of the stock acquisition rights.
(3) Notwithstanding (1) and (2) above, if the holder of the stock acquisition rights loses its Exercise Qualification
(other than loss due to death), the holder of the stock acquisition rights may exercise its stock acquisition rights
only within the period of 13 months after the immediately following day of the day of loss of the Exercise
Qualification (only if during the exercise period for stock acquisition rights above).
(4) Notwithstanding (1) and (2) above, if the holder of the stock acquisition rights dies, the stock acquisition rights
may be succeeded to by one (and only one) of the heirs of such holder (the “Rights Successor”). In this case,
the Rights Successor may exercise the stock acquisition rights in a lump sum and only before the day that is
six months after the day immediately following the day on which the holder of the stock acquisition rights dies
(and only if during the exercise period for stock acquisition rights above). If the Rights Successor dies, the heirs
of the Rights Successor may not further succeed to the stock acquisition rights.
(5) If the holder of the stock acquisition rights waives the stock acquisition rights, such holder may not exercise
such stock acquisition rights.
(6) The stock acquisition rights allotment agreement between the Company and the holder of the stock acquisition
rights may provide other conditions not stipulated above.
4. If any of the following proposals is approved at a General Meeting of Shareholders of the Company (or, if a
resolution of a General Meeting of Shareholders is not required, resolved at a Meeting of the Board of Directors of
the Company), the Company may acquire all of the stock acquisition rights at no cost on the date separately
designated by the Board of Directors of the Company.
①proposal for approval of a merger agreement providing that the Company be dissolved;
②proposal for approval of a company split agreement or company split plan providing that the Company be split;
③proposal for approval of a share exchange agreement or share transfer plan providing that the Company become
a wholly-owned subsidiary;
④proposal for approval of the Company acquiring all of shares subject to class-wide call pursuant to Article 171,
Paragraph 1 of the Companies Act;
⑤proposal for approval of amendments to the articles of incorporation specifying a provision that, as a condition
pertaining to all of the shares issued by the Company, the acquisition of such shares through transfer requires
the Company’ approval;
⑥proposal for approval of amendments to the Articles of Incorporation specifying a provision that, as a condition
pertaining to the class of shares to be acquired upon exercise of the stock acquisition rights, the acquisition of
such class of shares through transfer requires the Company’ approval, or a provision that the Company may
acquire all of such class of shares by resolution of the General Meeting of shareholders;
⑦proposal for approval of stock consolidation of class of shares to be acquired upon exercise of the stock
acquisition rights (only if the number obtained by multiplying the unit shares relating to such class of shares by
the ratio of stock consolidation generates a fraction less than one share);
⑧proposal for approval of demand for cash-out by special controlling shareholders pursuant to the provisions of
Article 179-3, Paragraph 1 of the Companies Act.
5．If the Company conducts a merger (limited to where the Company is to be dissolved as a result of the merger),
absorption-type company split or incorporation-type company split (limited to where the Company is to be split as

- 33 -
 a result of the absorption-type company split or incorporation-type company split), or share exchange or share
transfer (limited to where the Company becomes a wholly-owned subsidiary as a result of the share exchange or
share transfer) (collectively, a “Reorganization”), in each case stock acquisition rights of a stock company set out
in (a) through (e) of Article 236, Paragraph 1, Item 8 of the Companies Act (collectively, the “Reorganized
Company”) will be delivered to the holder of the stock acquisition rights holding the stock acquisition rights that are
outstanding immediately before the effective date of the Reorganization (which means, in the case of an absorption-
type merger, the day on which the absorption-type merger becomes effective, in the case of an incorporation-type
merger, the day on which the incorporation-type merger becomes effective, in the case of an absorption-type
company split, the day on which the absorption-type company split becomes effective, in the case of an
incorporation-type company split, the day on which the incorporation-type company split becomes effective, in the
case of a share exchange, the day on which the share exchange becomes effective, and in the case of a share
transfer, the day on which the wholly-owning parent company incorporated through share transfer is incorporated;
the same applies hereinafter) (the “Outstanding Stock Acquisition Rights”) on the following conditions, in which
case, the Outstanding Stock Acquisition Rights will be terminated; provided, however, that this shall apply only if
the delivery of stock acquisition rights by the Reorganized Company on the following conditions is stipulated in an
absorption-type merger agreement, incorporation-type merger agreement, absorption-type company split
agreement, incorporation-type company split plan, share exchange agreement, or share transfer plan.
(1) Numbers of stock acquisition rights of the Reorganized Company to be issued
The number of stock acquisition rights equal to the number of the Outstanding Stock Acquisition Rights held by
the holder of the stock acquisition rights shall be delivered.
(2) Type of the Reorganized Company’s share to be acquired upon exercise of stock acquisition rights
Common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company to be acquired upon exercise of stock acquisition rights
To be determined in accordance with (Note 1) above based on the consideration of conditions for the
Reorganization and other factors.
(4) Amount of assets to be contributed upon exercise of the stock acquisition rights:
The contribution to be made upon exercise of the stock acquisition rights to be delivered will be made for cash,
and the amount of the assets to be contributed shall be obtained by multiplying one Japanese yen, which is the
amount per share of the Reorganized Company to be delivered upon exercise of the stock acquisition rights,
by the number of shares of the Reorganized Company to be acquired upon exercise of stock acquisition rights
to be determined pursuant to 3. above.
(5) Exercise period of the stock acquisition rights:
The exercise period of the stock acquisition rights will be from the later of the commencement date of the
exercise period for stock acquisition rights above in which the stock acquisition rights are exercisable or the
effective date of the Reorganization through the expiration date of the exercise period for stock acquisition rights
above in which the stock acquisition rights are exercisable.
(6) Matters relating to share capital and legal capital surplus to be increased by the issuance of new shares upon
exercise of the stock acquisition rights:
To be determined in accordance with (Note 2) above.
(7) Restriction on transfer of stock acquisition rights
Any transfer of stock acquisition rights shall be subject to the approval by a resolution of the board of directors
of the Reorganized Company.
(8) Call provision of stock acquisition rights
To be determined in accordance with (Note 4) above.
(9) Other conditions for exercising stock acquisition rights
To be determined in accordance with (Note 3) above.

(b) Stock acquisition rights in FY2018

First Series of FY2018 Stock Second Series of FY2018 Stock
Acquisition Rights Acquisition Rights
Date of Resolution March 16, 2018
3 Company Directors
6 Company Executive Officers 4 Company Executive Officers of the
(excluding persons concurrently Company (excluding persons
Category and number of eligible persons serving as Directors) concurrently serving as Directors)
472 Company Employees 15 Subsidiaries Directors
3 Subsidiaries Directors 644 Subsidiaries Employees
99 Subsidiaries Employees
3,941 [3,650] 1,304 [1,251]
Number of stock acquisition rights (*)
(Note 1) (Note 1)
Type, details and number of shares to be
Common stock: 394,100 [365,000] Common stock: 130,400 [125,100]
issued upon exercise of the stock
(Note 1) (Note 1)
acquisition rights (*)
Amount to be paid upon exercise of the
1
stock acquisition rights (*)

- 34 -
 Exercise period for stock acquisition
April 3, 2018 (JST) – April 2, 2028 (JST)
rights (*)
Issue price and amount to be included in
Issue price: 1,093
capital when issuing shares upon the
Amount to be included in capital: 547
exercise of the stock acquisition rights
(Note 2)
(*)
Conditions for the exercise of stock
(Note 3)
acquisition rights (*)
Restriction on transfer of stock Any acquisition of the stock acquisition rights through transfer shall require the
acquisition rights (*) approval by resolution of the Board of Directors of the Company.
Delivery of stock acquisition rights in
(Note 5)
reorganization (*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other items from the end of the current fiscal year.
(Note) 1. The type of shares to be acquired upon exercise of the stock acquisition rights shall be shares of common stock of
the Company, and the number of shares to be acquired upon exercise of one stock acquisition right (the “Number
of Shares to be Granted”) shall be 100 shares.
However, in the case of a stock split (including gratuitous allotment of shares of common stock of the Company;
the same applies hereinafter) or stock consolidation of shares of common stock of the Company by the Company
after the allotment date, the Number of Shares to be Granted shall be adjusted using the following formula with
respect to the stock acquisition rights that have not been exercised at the time of such stock split or stock
consolidation:
(Number of shares to be granted after adjustment) = (Number of shares to be granted before adjustment) × (Ratio
of stock split or stock consolidation)
In addition to the above, if, after the allotment date, the Company carries out a merger or company split, or deems
it necessary (to essentially the same extent) to adjust the Number of Shares to be Granted in other situations, the
Company may appropriately adjust the Number of Shares to be Granted to a reasonable extent.
Any fraction less than one share resulting from such adjustment shall be rounded down to the nearest whole share.
2.(1) The issue price per share to be issued upon exercise of the stock acquisition rights is the sum of the amount to
be paid when exercising the stock acquisition rights and the book value of the stock acquisition rights. The
“amount to be included in capital” shows the amount obtained by multiplying the issue price of shares by 0.5
(any fractions less than one whole Yen rounded up to the nearest whole Yen).
(2)① The amount of share capital to be increased when issuing shares upon exercise of the stock acquisition right
will be half of the maximum amount of increases of the share capital to be calculated in accordance with
Article 17, Paragraph 1 of the Regulation on Corporate Accounting, and any fractions less than one whole
Yen shall be rounded down to the nearest whole Yen.
② The amount of legal capital surplus to be increased when issuing shares upon exercise of the stock acquisition
right will be the amount obtained by deducting the amount of share capital to be increased set forth in ①
above, from the maximum amount of increases of the share capital set forth in ① above.
3. (1) The holder of the stock acquisition rights may not exercise its stock acquisition rights during the period of one
year from the immediately following day of the allotment date.
(2) The holder of the stock acquisition rights shall be in the position of director, corporate officer, corporate auditor,
executive officer or employee of the Company or its subsidiaries (the “Exercise Qualification”) at the time of
exercise of the stock acquisition rights.
(3) Notwithstanding (1) and (2) above, if the holder of the stock acquisition rights loses its Exercise Qualification
(other than loss due to death), the holder of the stock acquisition rights may exercise its stock acquisition rights
only within the period of 13 months after the immediately following day of the day of loss of the Exercise
Qualification (only if during the exercise period for stock acquisition rights above).
(4) Notwithstanding (1) and (2) above, if the holder of the stock acquisition rights dies, the stock acquisition rights
may be succeeded to by one (and only one) of the heirs of the holder of the stock acquisition rights (the “Rights
Successor”). In this case, the Rights Successor may exercise the stock acquisition rights in a lump sum and
only before the day that is six months after the month immediately following the day on which the holder of the
stock acquisition rights dies (and only if during the exercise period for stock acquisition rights above). If the
Rights Successor dies, the heirs of the Rights Successor may not further succeed to the stock acquisition rights.
(5) If the holder of the stock acquisition rights waives the stock acquisition rights, the holder of the stock acquisition
rights may not exercise such stock acquisition rights.
(6) The stock acquisition rights allotment agreement between the Company and the holder of the stock acquisition
rights may provide other conditions not stipulated above.
4. If any of the following proposals is approved at a General Meeting of Shareholders of the Company (or, if a
resolution of a General Meeting of Shareholders is not required, resolved at a Meeting of the Board of Directors of
the Company), the Company may acquire all of the stock acquisition rights at no cost on the date separately
designated by the Board of Directors of the Company.
①proposal for approval of a merger agreement providing that the Company be dissolved;
②proposal for approval of a company split agreement or company split plan providing that the Company be split;

- 35 -
 ③proposal for approval of a share exchange agreement or share transfer plan providing that the Company become
a wholly-owned subsidiary;
④proposal for approval of the Company acquiring all of shares subject to class-wide call pursuant to Article 171,
Paragraph 1 of the Companies Act;
⑤proposal for approval of amendments to the articles of incorporation specifying a provision that, as a condition
pertaining to all of the shares issued by the Company, the acquisition of such shares through transfer requires
the Company’ approval;
⑥proposal for approval of amendments to the Articles of Incorporation specifying a provision that, as a condition
pertaining to the class of shares to be acquired upon exercise of the stock acquisition rights, the acquisition of
such class of shares through transfer requires the Company’ approval, or a provision that the Company may
acquire all of such class of shares by resolution of the General Meeting of shareholders;
⑦proposal for approval of stock consolidation of class of shares to be acquired upon exercise of the stock
acquisition rights (only if the number obtained by multiplying the unit shares relating to such class of shares by
the ratio of stock consolidation generates a fraction less than one share);
⑧proposal for approval of demand for cash-out by special controlling shareholders pursuant to the provisions of
Article 179-3, Paragraph 1 of the Companies Act.
5. If the Company conducts a merger (limited to where the Company is to be dissolved as a result of the merger),
absorption-type company split or incorporation-type company split (limited to where the Company is to be split as
a result of the absorption-type company split or incorporation-type company split), or share exchange or share
transfer (limited to where the Company becomes a wholly-owned subsidiary as a result of the share exchange or
share transfer) (collectively, a “Reorganization”), in each case stock acquisition rights of a stock company set out
in (a) through (e) of Article 236, Paragraph 1, Item 8 of the Companies Act (collectively, the “Reorganized
Company”) will be delivered to the holder of the stock acquisition rights holding the stock acquisition rights that are
outstanding immediately before the effective date of the Reorganization (which means, in the case of an absorption-
type merger, the day on which the absorption-type merger becomes effective, in the case of an incorporation-type
merger, the day on which the incorporation-type merger becomes effective, in the case of an absorption-type
company split, the day on which the absorption-type company split becomes effective, in the case of an
incorporation-type company split, the day on which the incorporation-type company split becomes effective, in the
case of a share exchange, the day on which the share exchange becomes effective, and in the case of a share
transfer, the day on which the wholly-owning parent company incorporated through share transfer is incorporated;
the same applies hereinafter) (the “Outstanding Stock Acquisition Rights”) on the following conditions, in which
case, the Outstanding Stock Acquisition Rights will be terminated; provided, however, that this shall apply only if
the delivery of stock acquisition rights by the Reorganized Company on the following conditions is stipulated in an
absorption-type merger agreement, incorporation-type merger agreement, absorption-type company split
agreement, incorporation-type company split plan, share exchange agreement, or share transfer plan.
(1) Numbers of stock acquisition rights of the Reorganized Company to be issued
The number of stock acquisition rights equal to the number of the Outstanding Stock Acquisition Rights held by
the holder of the stock acquisition rights shall be delivered.
(2) Type of the Reorganized Company’s shares to be acquired upon exercise of stock acquisition rights
Common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company to be acquired upon exercise of stock acquisition rights
To be determined in accordance with (Note 1) above based on the consideration of conditions for the
Reorganization and other factors.
(4) Amount of assets to be contributed upon exercise of the stock acquisition rights:
The contribution to be made upon exercise of the stock acquisition rights to be delivered will be made for cash,
and the amount of the assets to be contributed shall be obtained by multiplying one Japanese yen, which is the
amount per share of the Reorganized Company to be delivered upon exercise of the stock acquisition rights,
by the number of shares of the Reorganized Company to be acquired upon exercise of the stock acquisition
rights to be determined pursuant to 3. above.
(5) Exercise period of the stock acquisition rights:
The exercise period of the stock acquisition rights will be from the later of the commencement date of the
exercise period for stock acquisition rights above in which the stock acquisition rights are exercisable or the
effective date of the Reorganization through the expiration date of the exercise period for stock acquisition rights
above in which the stock acquisition rights are exercisable.
(6) Matters relating to share capital and legal capital surplus to be increased by the issuance of new shares upon
exercise of the stock acquisition rights:
To be determined in accordance with (Note 2) above.
(7) Restriction on transfer of stock acquisition rights
Any transfer of stock acquisition rights shall be subject to the approval by a resolution of the board of directors
of the Reorganized Company.
(8) Call provision of stock acquisition rights
To be determined in accordance with (Note 4) above.
(9) Other conditions for exercising stock acquisition rights
To be determined in accordance with (Note 3) above.

- 36 -
 Third Series of FY2018 Stock Fourth Series of FY2018 Stock
Acquisition Rights Acquisition Rights
Date of Resolution June 27, 2018
257 Company Employees 1 Subsidiaries Director
Category and number of eligible persons
49 Subsidiaries Employees 132 Subsidiaries Employees
1,498 [1,373] 237 [231]
Number of stock acquisition rights (*)
(Note 1) (Note 1)
Type, details and number of shares to be
Common stock: 149,800 [137,300] Common stock: 23,700 [23,100]
issued upon exercise of the stock
(Note 1) (Note 1)
acquisition rights (*)
Amount to be paid upon exercise of the
1
stock acquisition rights (*)
Exercise period for stock acquisition
August 1, 2018 (JST) – July 31, 2028 (JST)
rights (*)
Issue price and amount to be included in
Issue price: 996
capital when issuing shares upon the
Amount to be included in capital: 498
exercise of the stock acquisition rights
(Note 2)
(*)
Conditions for the exercise of stock
(Note 3)
acquisition rights (*)
Restriction on transfer of stock Any acquisition of the stock acquisition rights through transfer shall require the
acquisition rights (*) approval by resolution of the Board of Directors of the Company.
Delivery of stock acquisition rights in
(Note 5)
reorganization (*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1. The number of shares to be acquired upon exercise of one stock acquisition rights (the “Number of Shares to be
Granted”) shall be 100 shares.
However, in the case of a stock split (including gratuitous allotment of shares of common stock of the Company;
the same applies hereinafter) or stock consolidation of shares of common stock of the Company by the Company
after the allotment date, the Number of Shares to be Granted shall be adjusted using the following formula with
respect to the stock acquisition rights that have not been exercised at the time of such stock split or stock
consolidation:
(Number of shares to be granted after adjustment) = (Number of shares to be granted before adjustment) × (Ratio
of stock split or stock consolidation)
In addition to the above, if, after the allotment date, the Company carries out a merger or company split, or deems
it necessary (to essentially the same extent) to adjust the Number of Shares to be Granted in other situations, the
Company may appropriately adjust the Number of Shares to be Granted to a reasonable extent.
Any fraction less than one share resulting from such adjustment shall be rounded down to the nearest whole share.
2. (1) The issue price per share to be issued upon exercise of the stock acquisition rights is the sum of the amount to
be paid when exercising the stock acquisition rights and the book value of the stock acquisition rights. The
“amount to be included in capital” shows the amount obtained by multiplying the issue price of shares by 0.5
(any fractions less than one whole Yen rounded up to the nearest whole Yen).
(2)① The amount of share capital to be increased when issuing shares upon exercise of the stock acquisition right
will be half of the maximum amount of increases of the share capital to be calculated in accordance with
Article 17, Paragraph 1 of the Regulation on Corporate Accounting, and any fractions less than one whole
Yen shall be rounded down to the nearest whole Yen.
② The amount of legal capital surplus to be increased when issuing shares upon exercise of the stock acquisition
right will be the amount obtained by deducting the amount of share capital to be increased set forth in ①
above, from the maximum amount of increases of the share capital set forth in ① above.
3. (1) The holder of the stock acquisition rights may not exercise its stock acquisition rights from the immediately
following day of the allotment date to April 2, 2019 (Japan Standard Time)
(2) The holder of the stock acquisition rights shall be in the position of director, corporate officer, corporate auditor,
executive officer or employee of the Company or its subsidiaries (the “Exercise Qualification”) at the time of
exercise of the stock acquisition rights.
(3) Notwithstanding (1) and (2) above, if the holder of the stock acquisition rights loses its Exercise Qualification
(other than loss due to death), the holder of the stock acquisition rights may exercise its stock acquisition rights
only within the period of 13 months after the immediately following day of the day of loss of the Exercise
Qualification (only if during the exercise period for stock acquisition rights above).
(4) Notwithstanding (1) and (2) above, if the holder of the stock acquisition rights dies, the stock acquisition rights
may be succeeded to by one (and only one) of the heirs of such holder (the “Rights Successor”). In this case,
the Rights Successor may exercise the stock acquisition rights in a lump sum and only before the day that is
six months after the day immediately following the day on which the holder of the stock acquisition rights dies
(and only if during the exercise period for stock acquisition rights above). If the Rights Successor dies, the heirs
of the Rights Successor may not further succeed to the stock acquisition rights.

- 37 -
 (5) If the holder of the stock acquisition rights waives the stock acquisition rights, such holder may not exercise
such stock acquisition rights.
(6) The stock acquisition rights allotment agreement between the Company and the holder of the stock acquisition
rights may provide other conditions not stipulated above.
4. If any of the following proposals is approved at a General Meeting of Shareholders of the Company (or, if a
resolution of a General Meeting of Shareholders is not required, resolved at a Meeting of the Board of Directors of
the Company), the Company may acquire all of the stock acquisition rights at no cost on the date separately
designated by the Board of Directors of the Company.
①proposal for approval of a merger agreement providing that the Company be dissolved;
②proposal for approval of a company split agreement or company split plan providing that the Company be split;
③proposal for approval of a share exchange agreement or share transfer plan providing that the Company become
a wholly-owned subsidiary;
④proposal for approval of the Company acquiring all of shares subject to class-wide call pursuant to Article 171,
Paragraph 1 of the Companies Act;
⑤proposal for approval of amendments to the articles of incorporation specifying a provision that, as a condition
pertaining to all of the shares issued by the Company, the acquisition of such shares through transfer requires
the Company’ approval;
⑥proposal for approval of amendments to the Articles of Incorporation specifying a provision that, as a condition
pertaining to the class of shares to be acquired upon exercise of the stock acquisition rights, the acquisition of
such class of shares through transfer requires the Company’ approval, or a provision that the Company may
acquire all of such class of shares by resolution of the General Meeting of shareholders;
⑦proposal for approval of stock consolidation of class of shares to be acquired upon exercise of the stock
acquisition rights (only if the number obtained by multiplying the unit shares relating to such class of shares by
the ratio of stock consolidation generates a fraction less than one share);
⑧proposal for approval of demand for cash-out by special controlling shareholders pursuant to the provisions of
Article 179-3, Paragraph 1 of the Companies Act.
5. If the Company conducts a merger (limited to where the Company is to be dissolved as a result of the merger),
absorption-type company split or incorporation-type company split (limited to where the Company is to be split as
a result of the absorption-type company split or incorporation-type company split), or share exchange or share
transfer (limited to where the Company becomes a wholly-owned subsidiary as a result of the share exchange or
share transfer) (collectively, a “Reorganization”), in each case stock acquisition rights of a stock company set out
in (a) through (e) of Article 236, Paragraph 1, Item 8 of the Companies Act (collectively, the “Reorganized
Company”) will be delivered to the holder of the stock acquisition rights holding the stock acquisition rights that are
outstanding immediately before the effective date of the Reorganization (which means, in the case of an absorption-
type merger, the day on which the absorption-type merger becomes effective, in the case of an incorporation-type
merger, the day on which the incorporation-type merger becomes effective, in the case of an absorption-type
company split, the day on which the absorption-type company split becomes effective, in the case of an
incorporation-type company split, the day on which the incorporation-type company split becomes effective, in the
case of a share exchange, the day on which the share exchange becomes effective, and in the case of a share
transfer, the day on which the wholly-owning parent company incorporated through share transfer is incorporated;
the same applies hereinafter) (the “Outstanding Stock Acquisition Rights”) on the following conditions, in which
case, the Outstanding Stock Acquisition Rights will be terminated; provided, however, that this shall apply only if
the delivery of stock acquisition rights by the Reorganized Company on the following conditions is stipulated in an
absorption-type merger agreement, incorporation-type merger agreement, absorption-type company split
agreement, incorporation-type company split plan, share exchange agreement, or share transfer plan.
(1) Numbers of stock acquisition rights of the Reorganized Company to be issued
The number of stock acquisition rights equal to the number of the Outstanding Stock Acquisition Rights held by
the holder of the stock acquisition rights shall be delivered.
(2) Type of the Reorganized Company’s share to be acquired upon exercise of stock acquisition rights
Common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company to be acquired upon exercise of stock acquisition rights
To be determined in accordance with (Note 1) above based on the consideration of conditions for the
Reorganization and other factors.
(4) Amount of assets to be contributed upon exercise of the stock acquisition rights:
The contribution to be made upon exercise of the stock acquisition rights to be delivered will be made for cash,
and the amount of the assets to be contributed shall be obtained by multiplying one Japanese yen, which is the
amount per share of the Reorganized Company to be delivered upon exercise of the stock acquisition rights,
by the number of shares of the Reorganized Company to be acquired upon exercise of stock acquisition rights
to be determined pursuant to 3. above.
(5) Exercise period of the stock acquisition rights:
The exercise period of the stock acquisition rights will be from the later of the commencement date of the
exercise period for stock acquisition rights above in which the stock acquisition rights are exercisable or the
effective date of the Reorganization through the expiration date of the exercise period for stock acquisition rights
above in which the stock acquisition rights are exercisable.
(6) Matters relating to share capital and legal capital surplus to be increased by the issuance of new shares upon
exercise of the stock acquisition rights:
To be determined in accordance with (Note 2) above.
(7) Restriction on transfer of stock acquisition rights
Any transfer of stock acquisition rights shall be subject to the approval by a resolution of the board of directors

- 38 -
 of the Reorganized Company.
(8) Call provision of stock acquisition rights
To be determined in accordance with (Note 4) above.
(9) Other conditions for exercising stock acquisition rights
To be determined in accordance with (Note 3) above.

Fifth Series of FY2018 Stock Acquisition Rights

Date of Resolution September 26, 2018
Category and number of eligible persons 22 Subsidiaries Employees
73 [73]
Number of stock acquisition rights (*)
(Note 1)
Type, details and number of shares to be issued Common stock: 7,300 [7,300]
upon exercise of the stock acquisition rights (*) (Note 1)
Amount to be paid upon exercise of the stock
1
acquisition rights (*)
Exercise period for stock acquisition rights (*) November 1, 2018 (JST) – October 31, 2028 (JST)
Issue price and amount to be included in capital Issue price: 598
when issuing shares upon the exercise of the stock Amount to be included in capital: 299
acquisition rights (*) (Note 2)
Conditions for the exercise of stock acquisition rights
(Note 3)
(*)
Any acquisition of the stock acquisition rights through transfer
Restriction on transfer of stock acquisition rights (*) shall require the approval by resolution of the Board of Directors
of the Company.
Delivery of stock acquisition rights in reorganization
(Note 5)
(*)
(*) The table of above shows the contents as of the end of the current fiscal year (December 31, 2021). For items that
changed from the last day of the current fiscal year to the end of the month before the filing date (February 28, 2022),
the figures as of the end of the month before the filing date are described in brackets. There are no changes in the
other terms from the end of the current fiscal year.
(Note) 1-5: Same as Note 1 to 5 of Third and Fourth Series of FY2018 Stock Acquisition Rights.

(c) Stock acquisition rights in FY2019

Second Series of FY2019 Stock Third Series of FY2019 Stock
Acquisition Rights Acquisition Rights
Date of Resolution March 25, 2019
Category and number of eligible persons 1 Company Executive Officer
16 Subsidiaries Employees of the
1 Subsidiaries Director
Company subsidiaries
1,322 Subsidiaries Employees
Number of stock acquisition rights (*) 1,509 [1,483] 15,373 [13,912]
(Note 1) (Note 1)
Type, details and number of shares to be
Common stock: 150,900 [148,300] Common stock: 1,537,300 [1,391,200]
issued upon exercise of the stock
(Note 1) (Note 1)
acquisition rights (*)
Amount to be paid upon exercise of the
1
stock acquisition rights (*)
Exercise period for stock acquisition
April 9, 2019 (JST) – April 8, 2029 (JST)
rights (*)
Issue price and amount to be included in
Issue price: 512
capital when issuing shares upon the
Amount to be included in capital: 256
exercise of the stock acquisition rights
(Note 2)
(*)
Conditions for the exercise of stock
(Note 3)
acquisition rights (*)
Restriction on transfer of stock Any acquisition of the stock acquisition rights through transfer shall require the
acquisition rights (*) approval by resolution of the Board of Directors of the Company.
Delivery of stock acquisition rights in
(Note 5)
reorganization (*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other terms from the end of the current fiscal year.

- 39 -
(Note) 1. The number of shares to be acquired upon exercise of one stock acquisition right (the “Number of Shares to be
Granted”) shall be 100 shares.
However, in the case of a stock split (including gratuitous allotment of shares of common stock of the Company;
the same applies hereinafter) or stock consolidation of shares of common stock of the Company by the Company
after the allotment date, the Number of Shares to be Granted shall be adjusted using the following formula with
respect to the stock acquisition rights that have not been exercised at the time of such stock split or stock
consolidation:
(Number of shares to be granted after adjustment) = (Number of shares to be granted before adjustment) × (Ratio
of stock split or stock consolidation)
In addition to the above, if, after the allotment date, the Company carries out a merger or company split, or deems
it necessary (to essentially the same extent) to adjust the Number of Shares to be Granted in other situations, the
Company may appropriately adjust the Number of Shares to be Granted to a reasonable extent.
Any fraction less than one share resulting from such adjustment shall be rounded down to the nearest whole share.
2. (1) The amount of share capital to be increased when issuing shares upon exercise of the stock acquisition right will
be half of the maximum amount of increases of the share capital to be calculated in accordance with Article 17,
Paragraph 1 of theRegulation on Corporate Accounting, and any fractions less than one whole Yen shall be
rounded down to the nearest whole Yen.
(2) The amount of legal capital surplus to be increased when issuing shares upon exercise of the stock acquisition
right will be the amount obtained by deducting the amount of share capital to be increased set forth in (1) above,
from the maximum amount of increases of the share capital set forth in (1) above.
3. (1) The holder of the stock acquisition rights shall be in the position of director, corporate officer, auditor, corporate
officer or employee of the Company or its subsidiaries (the “Exercise Qualification”) at the time of exercise of
the stock acquisition rights.
(2) Notwithstanding (1) above, if the holder of the stock acquisition rights loses its Exercise Qualification (other than
loss due to death), the holder of the stock acquisition rights may exercise its stock acquisition rights only within
the period of 13 months after the immediately following day of the day of loss of the Exercise Qualification (only
if during the exercise period for stock acquisition rights above).
(3) Notwithstanding (1) above, if the holder of the stock acquisition rights dies, the stock acquisition rights may be
succeeded to by one (and only one) of the heirs of such holder (the “Rights Successor”). In this case, the Rights
Successor may exercise the stock acquisition rights in a lump sum and only before the day that is six months
after the day immediately following the day on which the holder of the stock acquisition rights dies (and only if
during the exercise period for stock acquisition rights above). If the Rights Successor dies, the heirs of the Rights
Successor may not further succeed to the stock acquisition rights.
(4) If the holder of the stock acquisition rights waives the stock acquisition rights, such holder may not exercise such
stock acquisition rights.
(5) The stock acquisition rights allotment agreement between the Company and the holder of the stock acquisition
rights may provide other conditions not stipulated above.
4. If any of the following proposals is approved at a General Meeting of Shareholders of the Company (or, if a
resolution of a General Meeting of Shareholders is not required, resolved at a Meeting of the Board of Directors of
the Company), the Company may acquire all of the stock acquisition rights at no cost on the date separately
designated by the Board of Directors of the Company.
①proposal for approval of a merger agreement providing that the Company be dissolved;
②proposal for approval of a company split agreement or company split plan providing that the Company be split;
③proposal for approval of a share exchange agreement or share transfer plan providing that the Company become
a wholly-owned subsidiary;
④proposal for approval of the Company acquiring all of shares subject to class-wide call pursuant to Article 171,
Paragraph 1 of the Companies Act;
⑤proposal for approval of amendments to the articles of incorporation specifying a provision that, as a condition
pertaining to all of the shares issued by the Company, the acquisition of such shares through transfer requires
the Company’ approval;
⑥proposal for approval of amendments to the Articles of Incorporation specifying a provision that, as a condition
pertaining to the class of shares to be acquired upon exercise of the stock acquisition rights, the acquisition of
such class of shares through transfer requires the Company’ approval, or a provision that the Company may
acquire all of such class of shares by resolution of the General Meeting of shareholders;
⑦proposal for approval of stock consolidation of class of shares to be acquired upon exercise of the stock
acquisition rights (only if the number obtained by multiplying the unit shares relating to such class of shares by
the ratio of stock consolidation generates a fraction less than one share);
⑧proposal for approval of demand for cash-out by special controlling shareholders pursuant to the provisions of
Article 179-3, Paragraph 1 of the Companies Act.
5. If the Company conducts a merger (limited to where the Company is to be dissolved as a result of the merger),
absorption-type company split or incorporation-type company split (limited to where the Company is to be split as
a result of the absorption-type company split or incorporation-type company split), or share exchange or share
transfer (limited to where the Company becomes a wholly-owned subsidiary as a result of the share exchange or
share transfer) (collectively, a “Reorganization”), in each case stock acquisition rights of a stock company set out
in (a) through (e) of Article 236, Paragraph 1, Item 8 of the Companies Act (collectively, the “Reorganized
Company”) will be delivered to the holder of the stock acquisition rights holding the stock acquisition rights that are
outstanding immediately before the effective date of the Reorganization (which means, in the case of an absorption-
type merger, the day on which the absorption-type merger becomes effective, in the case of an incorporation-type
merger, the day on which the incorporation-type merger becomes effective, in the case of an absorption-type

- 40 -
 company split, the day on which the absorption-type company split becomes effective, in the case of an
incorporation-type company split, the day on which the incorporation-type company split becomes effective, in the
case of a share exchange, the day on which the share exchange becomes effective, and in the case of a share
transfer, the day on which the wholly-owning parent company incorporated through share transfer is incorporated;
the same applies hereinafter) (the “Outstanding Stock Acquisition Rights”) on the following conditions, in which
case, the Outstanding Stock Acquisition Rights will be terminated; provided, however, that this shall apply only if
the delivery of stock acquisition rights by the Reorganized Company on the following conditions is stipulated in an
absorption-type merger agreement, incorporation-type merger agreement, absorption-type company split
agreement, incorporation-type company split plan, share exchange agreement, or share transfer plan.
(1) Numbers of stock acquisition rights of the Reorganized Company to be issued
The number of stock acquisition rights equal to the number of the Outstanding Stock Acquisition Rights held by
the holder of the stock acquisition rights shall be delivered.
(2) Type of the Reorganized Company’s shares to be acquired upon exercise of stock acquisition rights
Common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company to be acquired upon exercise of stock acquisition rights
To be determined in accordance with (Note 1) above based on the consideration of conditions for the
Reorganization and other factors.
(4) Amount of assets to be contributed upon exercise of the stock acquisition rights:
The contribution to be made upon exercise of the stock acquisition rights to be delivered will be made for cash,
and the amount of the assets to be contributed shall be obtained by multiplying one Japanese yen, which is the
amount per share of the Reorganized Company to be delivered upon exercise of the stock acquisition rights,
by the number of shares of the Reorganized Company to be acquired upon exercise of stock acquisition rights
to be determined pursuant to 3. above.
(5) Exercise period of the stock acquisition rights:
The exercise period of the stock acquisition rights will be from the later of the commencement date of the
exercise period for stock acquisition rights above in which the stock acquisition rights are exercisable or the
effective date of the Reorganization through the expiration date of the exercise period for stock acquisition rights
above in which the stock acquisition rights are exercisable.
(6) Matters relating to share capital and legal capital surplus to be increased by the issuance of new shares upon
exercise of the stock acquisition rights:
To be determined in accordance with (Note 2) above.
(7) Restriction on transfer of stock acquisition rights
Any transfer of stock acquisition rights shall be subject to the approval by a resolution of the board of directors
of the Reorganized Company.
(8) Call provision of stock acquisition rights
To be determined in accordance with (Note 4) above.
(9) Other conditions for exercising stock acquisition rights
To be determined in accordance with (Note 3) above.

Fourth Series of FY2019 Stock Fifth Series of FY2019 Stock Acquisition

Acquisition Rights Rights
Date of Resolution April 23, 2019
Category and number of eligible persons 1 Company Executive Officer
1 Company Employee 1 Subsidiaries Executive Officer
32 Subsidiaries Employees
Number of stock acquisition rights (*) 66 [66] 4,284 [4,284]
(Note 1) (Note 1)
Type, details and number of shares to be
Common stock: 6,600 [6,600] Common stock: 428,400 [428,400]
issued upon exercise of the stock
(Note 1) (Note 1)
acquisition rights (*)
Amount to be paid upon exercise of the
1
stock acquisition rights (*)
Exercise period for stock acquisition
June 1, 2019 (JST) – May 31, 2029 (JST)
rights (*)
Issue price and amount to be included in
Issue price: 495
capital when issuing shares upon the
Amount to be included in capital: 248
exercise of the stock acquisition rights
(Note 2)
(*)
Conditions for the exercise of stock
(Note 3)
acquisition rights (*)
Restriction on transfer of stock Any acquisition of the stock acquisition rights through transfer shall require the
acquisition rights (*) approval by resolution of the Board of Directors of the Company.
Delivery of stock acquisition rights in
(Note 5)
reorganization (*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the

- 41 -
 filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1-5: Same as Note 1 to 5 of Second and Third Series of FY2019 Stock Acquisition Rights.

Sixth Series of FY2019 Stock Seventh Series of FY2019 Stock

Acquisition Rights Acquisition Rights
Date of Resolution June 25, 2019
Category and number of eligible persons 484 Company Employees
14 Subsidiaries Directors
2 Subsidiaries Directors
1,848 Subsidiaries Employees
56 Subsidiaries Employees
Number of stock acquisition rights (*) 17,084 [16,650] 58,867 [57,977]
(Note 1) (Note 1)
Type, details and number of shares to be Common stock: 1,708,400 [1,665,000] Common stock: 5,886,700[5,797,700]
issued upon exercise of the stock (Note 1) (Note 1)
acquisition rights (*)
Amount to be paid upon exercise of the
1
stock acquisition rights (*)
Exercise period for stock acquisition
July 26, 2019 (JST) – July 25, 2029 (JST)
rights (*)
Issue price and amount to be included in
Issue price: 639
capital when issuing shares upon the
Amount to be included in capital: 320
exercise of the stock acquisition rights
(Note 2)
(*)
Conditions for the exercise of stock
(Note 3)
acquisition rights (*)
Restriction on transfer of stock Any acquisition of the stock acquisition rights through transfer shall require the
acquisition rights (*) approval by resolution of the Board of Directors of the Company.
Delivery of stock acquisition rights in
(Note 5)
reorganization (*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1-5: Same as Note 1 to 5 of Second and Third Series of FY2019 Stock Acquisition Rights.

Eighth Series of FY2019 Stock Acquisition Ninth Series of FY2019 Stock

Rights Acquisition Rights
Date of Resolution July 30, 2019
2 Company Directors
Category and number of eligible persons 8 Company Executive Officers 4 Company Executive Officers
2 Company Employees
6,792 [6,792] 10,918 [10,918]
Number of stock acquisition rights (*)
(Note 1) (Note 1)
Type, details and number of shares to be Common stock: 1,091,800
Common stock: 679,200 [679,200]
issued upon exercise of the stock [1,091,800]
(Note 1)
acquisition rights (*) (Note 1)
Amount to be paid upon exercise of the
1
stock acquisition rights (*)
Exercise period for stock acquisition
August 24, 2019 (JST) – August 23, 2029 (JST)
rights (*)
Issue price and amount to be included in
Issue price: 630
capital when issuing shares upon the
Amount to be included in capital: 315
exercise of the stock acquisition rights
(Note 2)
(*)
Conditions for the exercise of stock
(Note 3)
acquisition rights (*)
Restriction on transfer of stock Any acquisition of the stock acquisition rights through transfer shall require the
acquisition rights (*) approval by resolution of the Board of Directors of the Company.
Delivery of stock acquisition rights in
(Note 5)
reorganization (*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).

- 42 -
 For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1-5: Same as Note 1 to 5 of Second and Third Series of FY2019 Stock Acquisition Rights.

Tenth Series of FY2019 Stock Acquisition Rights

Date of Resolution August 27, 2019
Category and number of eligible persons 452 Subsidiaries Employees
828 [823]
Number of stock acquisition rights (*)
(Note 1)
Type, details and number of shares to be issued upon Common stock: 82,800 [82,300]
exercise of the stock acquisition rights (*) (Note 1)
Amount to be paid upon exercise of the stock
1
acquisition rights (*)
Exercise period for stock acquisition rights (*) September 21, 2019 (JST) – September 20, 2029 (JST)
Issue price and amount to be included in capital when Issue price: 661
issuing shares upon the exercise of the stock Amount of to be included in capital: 331
acquisition rights (*) (Note 2)
Conditions for the exercise of stock acquisition rights
(Note 3)
(*)
Any acquisition of the stock acquisition rights through transfer shall
Restriction on transfer of stock acquisition rights (*) require the approval by resolution of the Board of Directors of the
Company.
Delivery of stock acquisition rights in reorganization
(Note 5)
(*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1-5: Same as Note 1 to 5 of Second and Third Series of FY2019 Stock Acquisition Rights.

Eleventh Series of FY2019 Stock Twelfth Series of FY2019 Stock

Acquisition Rights Acquisition Rights
Date of Resolution September 24, 2019
Category and number of eligible persons 126 Company Employees 1 Company Executive Officer
11 Subsidiaries Employees 113 Subsidiaries Employees
Number of stock acquisition rights (*) 1,523 [1,476] 2,474 [2,446]
(Note 1) (Note 1)
Type, details and number of shares to be
Common stock: 152,300 [147,600] Common stock: 247,400 [244,600]
issued upon exercise of the stock
(Note1) (Note 1)
acquisition rights (*)
Amount to be paid upon exercise of the
1
stock acquisition rights (*)
Exercise period for stock acquisition
November 1, 2019 (JST) – October 31, 2029 (JST)
rights (*)
Issue price and amount to be included in
Issue price: 740
capital when issuing shares upon the
Amount to be included in capital: 370
exercise of the stock acquisition rights
(Note 2)
(*)
Conditions for the exercise of stock
(Note 3)
acquisition rights (*)
Restriction on transfer of stock Any acquisition of the stock acquisition rights through transfer shall require the
acquisition rights (*) approval by resolution of the Board of Directors of the Company.
Delivery of stock acquisition rights in
(Note 5)
reorganization (*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1-5: Same as Note 1 to 5 of Second and Third Series of FY2019 Stock Acquisition Rights.

- 43 -
 Thirteenth Series of FY2019 Stock Acquisition Rights
Date of Resolution November 26, 2019
Category and number of eligible persons 15 Subsidiaries Employees
762 [754]
Number of stock acquisition rights (*)
(Note 1)
Type, details and number of shares to be issued upon Common stock: 76,200 [75,400]
exercise of the stock acquisition rights (*) (Note 1)
Amount to be paid upon exercise of the stock
1
acquisition rights (*)
Exercise period for stock acquisition rights (*) December 26, 2019 (JST) – December 25, 2029 (JST)
Issue price and amount to be included in capital when Issue price: 754
issuing shares upon the exercise of the stock Amount to be included in capital: 377
acquisition rights (*) (Note 2)
Conditions for the exercise of stock acquisition rights
(Note 3)
(*)
Any acquisition of the stock acquisition rights through transfer shall
Restriction on transfer of stock acquisition rights (*) require the approval by resolution of the Board of Directors of the
Company.
Delivery of stock acquisition rights in reorganization
(Note 5)
(*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1-5: Same as Note 1 to 5 of Second and Third Series of FY2019 Stock Acquisition Rights.

Fourteenth Series of FY2019 Stock Acquisition Rights

Date of Resolution December 25, 2019
Category and number of eligible persons 23 Subsidiaries Employees
742 [742]
Number of stock acquisition rights (*)
(Note 1)
Type, details and number of shares to be issued upon Common stock: 74,200 [74,200]
exercise of the stock acquisition rights (*) (Note 1)
Amount to be paid upon exercise of the stock
1
acquisition rights (*)
Exercise period for stock acquisition rights (*) December 26, 2019 (JST) – December 25, 2029 (JST)
Issue price and amount to be included in capital when Issue price: 711
issuing shares upon the exercise of the stock Amount to be included in capital: 356
acquisition rights (*) (Note 2)
Conditions for the exercise of stock acquisition rights
(Note 3)
(*)
Any acquisition of the stock acquisition rights through transfer shall
Restriction on transfer of stock acquisition rights (*) require the approval by resolution of the Board of Directors of the
Company.
Delivery of stock acquisition rights in reorganization
(Note 5)
(*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2020).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2021), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1-5: Same as Note 1 to 5 of Second and Third Series of FY2019 Stock Acquisition Rights.

- 44 -
 (d) Stock acquisition rights in FY2020
First Series of FY2020 Stock Acquisition Second Series of FY2020 Stock
Rights Acquisition Rights
Date of Resolution May 26, 2020
2 Company Directors
6 Company Executive Officers of the 2 Company Directors
Company 4 Company Executive Officers
Category and number of eligible persons
467 Company Employees 12 Subsidiaries Directors
2 Subsidiaries Directors 1,857 Subsidiaries Employees
31 Subsidiaries Employees
32,623 [32,308] 121,730 [120,519]
Number of stock acquisition rights (*)
(Note 1) (Note 1)
Type, details and number of shares to be Common stock: 12,173,000
Common stock: 3,262,300 [3,230,800]
issued upon exercise of the stock [12,051,900]
(Note 1)
acquisition rights (*) (Note 1)
Amount to be paid upon exercise of the
1
stock acquisition rights (*)
Exercise period for stock acquisition
July 1, 2020 (JST) – June 30, 2030 (JST)
rights (*)
Issue price and amount to be included in
Issue price: 551
capital when issuing shares upon the
Amount to be included in capital: 276
exercise of the stock acquisition rights
(Note 2)
(*)
Conditions for the exercise of stock
(Note 3)
acquisition rights (*)
Restriction on transfer of stock Any acquisition of the stock acquisition rights through transfer shall require the
acquisition rights (*) approval by resolution of the Board of Directors of the Company.
Delivery of stock acquisition rights in
(Note 5)
reorganization (*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1. The number of shares to be acquired upon exercise of one acquisition right (the “Number of Shares to be Granted”)
shall be 100 shares.
However, in the case of a stock split (including gratuitous allotment of shares of common stock of the Company;
the same applies hereinafter) or stock consolidation of shares of common stock of the Company by the Company
after the allotment date, the Number of Shares to be Granted shall be adjusted using the following formula with
respect to the stock acquisition rights that have not been exercised at the time of such stock split or stock
consolidation:
(Number of shares to be granted after adjustment) = (Number of shares to be granted before adjustment) × (Ratio
of stock split or stock consolidation)
In addition to the above, if, after the allotment date, the Company carries out a merger or company split, or deems
it necessary (to essentially the same extent) to adjust the Number of Shares to be Granted in other situations, the
Company may appropriately adjust the Number of Shares to be Granted to a reasonable extent.
Any fraction less than one share resulting from such adjustment shall be rounded down to the nearest whole share.
2. (1) The amount of share capital to be increased when issuing shares upon exercise of the stock acquisition right will
be half of the maximum amount of increases of the share capital to be calculated in accordance with Article 17,
Paragraph 1 of the Regulation on Corporate Accounting, and any fractions less than one whole Yen shall be
rounded down to the nearest whole Yen.
(2) The amount of legal capital surplus to be increased when issuing shares upon exercise of the stock acquisition
right will be the amount obtained by deducting the amount of share capital to be increased set forth in (1) above,
from the maximum amount of increases of the share capital set forth in (1) above.
3. (1) The holder of the stock acquisition rights shall be in the position of director, corporate officer, corporate auditor,
executive officer or employee of the Company or its subsidiaries (the “Exercise Qualification”) at the time of
exercise of the stock acquisition rights.
(2) Notwithstanding (1) above, if the holder of the stock acquisition rights loses its Exercise Qualification (other than
loss due to death), the holder of the stock acquisition rights may exercise its stock acquisition rights only within
the period of 13 months after the immediately following day of the day of loss of the Exercise Qualification (only
if during the exercise period for stock acquisition rights above).
(3) Notwithstanding (1) above, if the holder of the stock acquisition rights dies, the stock acquisition rights may be
succeeded to by one (and only one) of the heirs of such holder (the “Rights Successor”). In this case, the Rights
Successor may exercise the stock acquisition rights in a lump sum and only before the day that is six months
after the day immediately following the day on which the holder of the stock acquisition rights dies (and only if
during the exercise period for stock acquisition rights above). If the Rights Successor dies, the heirs of the Rights

- 45 -
 Successor may not further succeed to the stock acquisition rights.
(4) If the holder of the stock acquisition rights waives the stock acquisition rights, such holder may not exercise such
stock acquisition rights.
(5) The stock acquisition rights allotment agreement between the Company and the holder of the stock acquisition
rights may provide other conditions not stipulated above.
4. If any of the following proposals is approved at a General Meeting of Shareholders of the Company (or, if a
resolution of a General Meeting of Shareholders is not required, resolved at a Meeting of the Board of Directors of
the Company), the Company may acquire all of the stock acquisition rights at no cost on the date separately
designated by the Board of Directors of the Company.
①proposal for approval of a merger agreement providing that the Company be dissolved;
②proposal for approval of a company split agreement or company split plan providing that the Company be split;
③proposal for approval of a share exchange agreement or share transfer plan providing that the Company become
a wholly-owned subsidiary;
④proposal for approval of the Company acquiring all of shares subject to class-wide call pursuant to Article 171,
Paragraph 1 of the Companies Act;
⑤proposal for approval of amendments to the articles of incorporation specifying a provision that, as a condition
pertaining to all of the shares issued by the Company, the acquisition of such shares through transfer requires
the Company’ approval;
⑥proposal for approval of amendments to the Articles of Incorporation specifying a provision that, as a condition
pertaining to the class of shares to be acquired upon exercise of the stock acquisition rights, the acquisition of
such class of shares through transfer requires the Company’ approval, or a provision that the Company may
acquire all of such class of shares by resolution of the General Meeting of shareholders;
⑦proposal for approval of stock consolidation of class of shares to be acquired upon exercise of the stock
acquisition rights (only if the number obtained by multiplying the unit shares relating to such class of shares by
the ratio of stock consolidation generates a fraction less than one share);
⑧proposal for approval of demand for cash-out by special controlling shareholders pursuant to the provisions of
Article 179-3, Paragraph 1 of the Companies Act.
5. If the Company conducts a merger (limited to where the Company is to be dissolved as a result of the merger),
absorption-type company split or incorporation-type company split (limited to where the Company is to be split as
a result of the absorption-type company split or incorporation-type company split), or share exchange or share
transfer (limited to where the Company becomes a wholly-owned subsidiary as a result of the share exchange or
share transfer) (collectively, a “Reorganization”), in each case stock acquisition rights of a stock company set out
in (a) through (e) of Article 236, Paragraph 1, Item 8 of the Companies Act (collectively, the “Reorganized
Company”) will be delivered to the holder of the stock acquisition rights holding the stock acquisition rights that are
outstanding immediately before the effective date of the Reorganization (which means, in the case of an absorption-
type merger, the day on which the absorption-type merger becomes effective, in the case of an incorporation-type
merger, the day on which the incorporation-type merger becomes effective, in the case of an absorption-type
company split, the day on which the absorption-type company split becomes effective, in the case of an
incorporation-type company split, the day on which the incorporation-type company split becomes effective, in the
case of a share exchange, the day on which the share exchange becomes effective, and in the case of a share
transfer, the day on which the wholly-owning parent company incorporated through share transfer is incorporated;
the same applies hereinafter) (the “Outstanding Stock Acquisition Rights”) on the following conditions, in which
case, the Outstanding Stock Acquisition Rights will be terminated; provided, however, that this shall apply only if
the delivery of stock acquisition rights by the Reorganized Company on the following conditions is stipulated in an
absorption-type merger agreement, incorporation-type merger agreement, absorption-type company split
agreement, incorporation-type company split plan, share exchange agreement, or share transfer plan.
(1) Numbers of stock acquisition rights of the Reorganized Company to be issued
The number of stock acquisition rights equal to the number of the Outstanding Stock Acquisition Rights held by
the holder of the stock acquisition rights shall be delivered.
(2) Type of the Reorganized Company’s share to be acquired upon exercise of stock acquisition rights
Common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company to be acquired upon exercise of stock acquisition rights
To be determined in accordance with (Note 1) above based on the consideration of conditions for the
Reorganization and other factors.
(4) Amount of assets to be contributed upon exercise of the stock acquisition rights:
The contribution to be made upon exercise of the stock acquisition rights to be delivered will be made for cash,
and the amount of the assets to be contributed shall be obtained by multiplying one Japanese yen, which is the
amount per share of the Reorganized Company to be delivered upon exercise of the stock acquisition rights,
by the number of shares of the Reorganized Company to be acquired upon exercise of stock acquisition rights
to be determined pursuant to 3. above.
(5) Exercise period of the stock acquisition rights:
The exercise period of the stock acquisition rights will be from the later of the commencement date of the
exercise period for stock acquisition rights above in which the stock acquisition rights are exercisable or the
effective date of the Reorganization through the expiration date of the exercise period for stock acquisition rights
above in which the stock acquisition rights are exercisable.
(6) Matters relating to share capital and legal capital surplus to be increased by the issuance of new shares upon
exercise of the stock acquisition rights:
To be determined in accordance with (Note 2) above.
(7) Restriction on transfer of stock acquisition rights

- 46 -
 Any transfer of stock acquisition rights shall be subject to the approval by a resolution of the board of directors
of the Reorganized Company.
(8) Call provision of stock acquisition rights
To be determined in accordance with (Note 4) above.
(9) Other conditions for exercising stock acquisition rights
To be determined in accordance with (Note 3) above.

Third Series of FY2020 Stock Fourth Series of FY2020 Stock

Acquisition Rights Acquisition Rights
Date of Resolution July 30, 2020
1 Company Director
4 Company Executive Officers 4 Company Executive Officers
Category and number of eligible persons 916 Company Employees 5 Subsidiaries Directors
1 Subsidiaries Director 1,537 Subsidiaries Employees
77 Subsidiaries Employees
3,811 [3,670] 2,947 [2,787]
Number of stock acquisition rights (*)
(Note 1) (Note 1)
Type, details and number of shares to be
Common stock: 381,100 [367,000] Common stock: 294,700 [278,700]
issued upon exercise of the stock
(Note 1) (Note 1)
acquisition rights (*)
Amount to be paid upon exercise of the
1
stock acquisition rights (*)
Exercise period for stock acquisition
August 31, 2020 (JST) – August 30, 2030 (JST)
rights (*)
Issue price and amount to be included in
Issue price: 667
capital when issuing shares upon the
Amount to be included in capital: 334
exercise of the stock acquisition rights
(Note 2)
(*)
Conditions for the exercise of stock
(Note 3)
acquisition rights (*)
Restriction on transfer of stock Any acquisition of the stock acquisition rights through transfer shall require the
acquisition rights (*) approval by resolution of the Board of Directors of the Company.
Delivery of stock acquisition rights in
(NOTE 5)
reorganization (NOTE *)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1-5: Same as Note 1 to 5 of First and Second Series of FY2020 Stock Acquisition Rights.

Fifth Series of FY2020 Stock Acquisition Sixth Series of FY2020 Stock

Rights Acquisition Rights
Date of Resolution July 30, 2020
219 Company Employees
Category and number of eligible persons 143 Subsidiaries Employees
18 Subsidiaries Employees
4,025 [3,925] 1,708 [1,638]
Number of stock acquisition rights (*)
(Note 1) (Note 1)
Type, details and number of shares to be
Common stock: 402,500 [392,500] Common stock: 170,800 [163,800]
issued upon exercise of the stock
(Note 1) (Note 1)
acquisition rights (*)
Amount to be paid upon exercise of the
1
stock acquisition rights (*)
Exercise period for stock acquisition September 1, 2020 (Japan Standard Time) – August 31, 2030 (Japan Standard
rights (*) Time)
Issue price and amount to be included in
Issue price: 667
capital when issuing shares upon the
Amount to be included in capital: 334
exercise of the stock acquisition rights
(Note 2)
(*)
Conditions for the exercise of stock
(Note 3)
acquisition rights (*)
Restriction on transfer of stock Any acquisition of the stock acquisition rights through transfer shall require the
acquisition rights (*) approval by resolution of the Board of Directors of the Company.
Delivery of stock acquisition rights in
(Note 5)
reorganization (*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the

- 47 -
 filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1-5: Same as Note 1 to 5 of First and Second Series of FY2020 Stock Acquisition Rights.

Seventh Series of FY2020 Stock Eighth Series of FY2020 Stock

Acquisition Rights Acquisition Rights
Date of Resolution October 29, 2020
Category and number of eligible persons 3 Company Employees 104 Subsidiaries Employees
432 [432] 5,969 [5,888]
Number of stock acquisition rights (*)
(Note 1) (Note 1)
Type, details and number of shares to be
Common stock: 43,200 [43,200] Common stock: 596,900 [588,800]
issued upon exercise of the stock
(Note 1) (Note 1)
acquisition rights (*)
Amount to be paid upon exercise of the
1
stock acquisition rights (*)
Exercise period for stock acquisition
December 1, 2020 (JST) – November 30, 2030 (JST)
rights (*)
Issue price and amount to be included in
Issue price: 928
capital when issuing shares upon the
Amount to be included in capital: 464
exercise of the stock acquisition rights
(Note 2)
(*)
Conditions for the exercise of stock
(Note 3)
acquisition rights (*)
Restriction on transfer of stock Any acquisition of the stock acquisition rights through transfer shall require the
acquisition rights (*) approval by resolution of the Board of Directors of the Company.
Delivery of stock acquisition rights in
(Note 5)
reorganization (*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1-5: Same as Note 1 to 5 of First and Second Series of FY2020 Stock Acquisition Rights.

(e) Stock acquisition rights in FY2021

First Series of FY2021 Stock Acquisition Second Series of FY2021 Stock
Rights Acquisition Rights
Date of Resolution January 29, 2021
Category and number of eligible persons 6 Company Employees 52 Subsidiaries Employees
134 [134] 1,986 [1,971]
Number of stock acquisition rights (*)
(Note 1) (Note 1)
Type, details and number of shares to be
Common stock: 13,400 [13,400] Common stock: 198,600 [197,100]
issued upon exercise of the stock
(Note 1) (Note 1)
acquisition rights (*)
Amount to be paid upon exercise of the
1
stock acquisition rights (*)
Exercise period for stock acquisition
February 27, 2021 (JST) – February 26, 2031 (JST)
rights (*)
Issue price and amount to be included in
Issue price: 1,169
capital when issuing shares upon the
Amount to be included in capital: 585
exercise of the stock acquisition rights
(Note 2)
(*)
Conditions for the exercise of stock
(Note 3)
acquisition rights (*)
Restriction on transfer of stock Any acquisition of the stock acquisition rights through transfer shall require the
acquisition rights (*) approval by resolution of the Board of Directors of the Company.
Delivery of stock acquisition rights in
(Note 5)
reorganization (*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1. The number of shares to be acquired upon exercise of one acquisition right (the “Number of Shares to be Granted”)
shall be 100 shares.
However, in the case of a stock split (including gratuitous allotment of shares of common stock of the Company;

- 48 -
 the same applies hereinafter) or stock consolidation of shares of common stock of the Company by the Company
after the allotment date, the Number of Shares to be Granted shall be adjusted using the following formula with
respect to the stock acquisition rights that have not been exercised at the time of such stock split or stock
consolidation:
(Number of shares to be granted after adjustment) = (Number of shares to be granted before adjustment) × (Ratio
of stock split or stock consolidation)
In addition to the above, if, after the allotment date, the Company carries out a merger or company split, or deems
it necessary (to essentially the same extent) to adjust the Number of Shares to be Granted in other situations, the
Company may appropriately adjust the Number of Shares to be Granted to a reasonable extent.
Any fraction less than one share resulting from such adjustment shall be rounded down to the nearest whole share.
2. (1) The amount of share capital to be increased when issuing shares upon exercise of the stock acquisition right will
be half of the maximum amount of increases of the share capital to be calculated in accordance with Article 17,
Paragraph 1 of the Regulation on Corporate Accounting, and any fractions less than one whole Yen shall be
rounded down to the nearest whole Yen.
(2) The amount of legal capital surplus to be increased when issuing shares upon exercise of the stock acquisition
right will be the amount obtained by deducting the amount of share capital to be increased set forth in (1) above,
from the maximum amount of increases of the share capital set forth in (1) above.
3. (1) The holder of the stock acquisition rights shall be in the position of director, corporate officer, corporate auditor,
executive officer or employee of the Company or its subsidiaries (the “Exercise Qualification”) at the time of
exercise of the stock acquisition rights.
(2) Notwithstanding (1) above, if the holder of the stock acquisition rights loses its Exercise Qualification (other than
loss due to death), the holder of the stock acquisition rights may exercise its stock acquisition rights only within
the period of 13 months after the immediately following day of the day of loss of the Exercise Qualification (only
if during the exercise period for stock acquisition rights above).
(3) Notwithstanding (1) above, if the holder of the stock acquisition rights dies, the stock acquisition rights may be
succeeded to by one (and only one) of the heirs of such holder (the “Rights Successor”). In this case, the Rights
Successor may exercise the stock acquisition rights in a lump sum and only before the day that is six months
after the day immediately following the day on which the holder of the stock acquisition rights dies (and only if
during the exercise period for stock acquisition rights above). If the Rights Successor dies, the heirs of the Rights
Successor may not further succeed to the stock acquisition rights.
(4) If the holder of the stock acquisition rights waives the stock acquisition rights, such holder may not exercise such
stock acquisition rights.
(5) The stock acquisition rights allotment agreement between the Company and the holder of the stock acquisition
rights may provide other conditions not stipulated above.
4. If any of the following proposals is approved at a General Meeting of Shareholders of the Company (or, if a
resolution of a General Meeting of Shareholders is not required, resolved at a Meeting of the Board of Directors of
the Company), the Company may acquire all of the stock acquisition rights at no cost on the date separately
designated by the Board of Directors of the Company.
①proposal for approval of a merger agreement providing that the Company be dissolved;
②proposal for approval of a company split agreement or company split plan providing that the Company be split;
③proposal for approval of a share exchange agreement or share transfer plan providing that the Company become
a wholly-owned subsidiary;
④proposal for approval of the Company acquiring all of shares subject to class-wide call pursuant to Article 171,
Paragraph 1 of the Companies Act;
⑤proposal for approval of amendments to the articles of incorporation specifying a provision that, as a condition
pertaining to all of the shares issued by the Company, the acquisition of such shares through transfer requires
the Company’ approval;
⑥proposal for approval of amendments to the Articles of Incorporation specifying a provision that, as a condition
pertaining to the class of shares to be acquired upon exercise of the stock acquisition rights, the acquisition of
such class of shares through transfer requires the Company’ approval, or a provision that the Company may
acquire all of such class of shares by resolution of the General Meeting of shareholders;
⑦proposal for approval of stock consolidation of class of shares to be acquired upon exercise of the stock
acquisition rights (only if the number obtained by multiplying the unit shares relating to such class of shares by
the ratio of stock consolidation generates a fraction less than one share);
⑧proposal for approval of demand for cash-out by special controlling shareholders pursuant to the provisions of
Article 179-3, Paragraph 1 of the Companies Act.
5. If the Company conducts a merger (limited to where the Company is to be dissolved as a result of the merger),
absorption-type company split or incorporation-type company split (limited to where the Company is to be split as
a result of the absorption-type company split or incorporation-type company split), or share exchange or share
transfer (limited to where the Company becomes a wholly-owned subsidiary as a result of the share exchange or
share transfer) (collectively, a “Reorganization”), in each case stock acquisition rights of a stock company set out
in (a) through (e) of Article 236, Paragraph 1, Item 8 of the Companies Act (collectively, the “Reorganized
Company”) will be delivered to the holder of the stock acquisition rights holding the stock acquisition rights that are
outstanding immediately before the effective date of the Reorganization (which means, in the case of an absorption-
type merger, the day on which the absorption-type merger becomes effective, in the case of an incorporation-type
merger, the day on which the incorporation-type merger becomes effective, in the case of an absorption-type
company split, the day on which the absorption-type company split becomes effective, in the case of an
incorporation-type company split, the day on which the incorporation-type company split becomes effective, in the
case of a share exchange, the day on which the share exchange becomes effective, and in the case of a share

- 49 -
 transfer, the day on which the wholly-owning parent company incorporated through share transfer is incorporated;
the same applies hereinafter) (the “Outstanding Stock Acquisition Rights”) on the following conditions, in which
case, the Outstanding Stock Acquisition Rights will be terminated; provided, however, that this shall apply only if
the delivery of stock acquisition rights by the Reorganized Company on the following conditions is stipulated in an
absorption-type merger agreement, incorporation-type merger agreement, absorption-type company split
agreement, incorporation-type company split plan, share exchange agreement, or share transfer plan.
(1) Numbers of stock acquisition rights of the Reorganized Company to be issued
The number of stock acquisition rights equal to the number of the Outstanding Stock Acquisition Rights held by
the holder of the stock acquisition rights shall be delivered.
(2) Type of the Reorganized Company’s share to be acquired upon exercise of stock acquisition rights
Common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company to be acquired upon exercise of stock acquisition rights
To be determined in accordance with (Note 1) above based on the consideration of conditions for the
Reorganization and other factors.
(4) Amount of assets to be contributed upon exercise of the stock acquisition rights:
The contribution to be made upon exercise of the stock acquisition rights to be delivered will be made for cash,
and the amount of the assets to be contributed shall be obtained by multiplying one Japanese yen, which is the
amount per share of the Reorganized Company to be delivered upon exercise of the stock acquisition rights,
by the number of shares of the Reorganized Company to be acquired upon exercise of stock acquisition rights
to be determined pursuant to 3. above.
(5) Exercise period of the stock acquisition rights:
The exercise period of the stock acquisition rights will be from the later of the commencement date of the
exercise period for stock acquisition rights above in which the stock acquisition rights are exercisable or the
effective date of the Reorganization through the expiration date of the exercise period for stock acquisition rights
above in which the stock acquisition rights are exercisable.
(6) Matters relating to share capital and legal capital surplus to be increased by the issuance of new shares upon
exercise of the stock acquisition rights:
To be determined in accordance with (Note 2) above.
(7) Restriction on transfer of stock acquisition rights
Any transfer of stock acquisition rights shall be subject to the approval by a resolution of the board of directors
of the Reorganized Company.
(8) Call provision of stock acquisition rights
To be determined in accordance with (Note 4) above.
(9) Other conditions for exercising stock acquisition rights
To be determined in accordance with (Note 3) above.

Third Series of FY2021 Stock Acquisition Rights

Date of Resolution January 29, 2021
Category and number of eligible persons 4 Subsidiaries Employees
49 [49]
Number of stock acquisition rights (*)
(Note 1)
Type, details and number of shares to be issued upon Common stock: 4,900 [4,900]
exercise of the stock acquisition rights (*) (Note 1)
Amount to be paid upon exercise of the stock
1
acquisition rights (*)
Exercise period for stock acquisition rights (*) February 27, 2021 (JST) – February 26, 2031 (JST)
Issue price and amount to be included in capital when Issue price: 1,169
issuing shares upon the exercise of the stock Amount to be included in capital: 585
acquisition rights (*) (Note 2)
Conditions for the exercise of stock acquisition rights
(Note 3)
(*)
Any acquisition of the stock acquisition rights through transfer shall
Restriction on transfer of stock acquisition rights (*) require the approval by resolution of the Board of Directors of the
Company.
Delivery of stock acquisition rights in reorganization
(Note 5)
(*)
(*) The table of above shows the contents as of the end of the current consolidated fiscal year (December 31, 2021).
For items that changed from the last day of the current consolidated fiscal year to the end of the month before the
filing date (February 28, 2022), the figures as of the end of the month before the filing date are described in brackets.
There are no changes in the other items from the end of the current consolidated fiscal year.
(Note) 1-5: Same as Note 1 to 5 of First and Second Series of FY2021 Stock Acquisition Rights.

② Description of Rights Plan

Not applicable.

③ Status of Other Stock Acquisition Rights

- 50 -
 Not applicable.

(3) Exercise of Bonds with Stock Acquisition Rights with Moving Strike Clause and Related Matters
Not applicable.

(4) Changes in Total Number of Issued Shares and Capital

Changes in Balance of
Changes in Total Balance of Changes in Balance of
Legal Capital Legal Capital
Number of Total Number of Share Capital Share Capital
Date Surplus Surplus
Issued Shares Issued Shares (Millions of (Millions of
(Millions of (Millions of
(shares) (shares) yen) yen)
yen) yen)
January 1, 2017 -
December 31, 2017 70,000 1,667,194,490 22 10,022 22 22
(Note 1)
January 1, 2018 -
December 31, 2018 1,190,900 1,668,385,390 678 10,699 678 699
(Note 1)
January 1, 2019 -
December 31, 2019 41,891,400 1,710,276,790 11,514 22,213 11,514 12,213
(Note 1)
January 1, 2020 -
December 31, 2020 21,622,200 1,731,898,990 6,758 28,971 6,758 18,971
(Note 1)
January 1, 2021 -
December 31, 2021
211,906,785 1,943,805,775 118,161 147,133 118,161 137,133
(Note 2) (Note 3)
(Note 4)
(Note) 1. The increase was due to the exercise of stock acquisition rights.
2. With the issuance of 192,252,800 shares of common stock (issue price: 1,174 yen, payment amount: 1,151.70
yen, capitalization amount: 575.85 yen) through a public offering with a payment date of June 15, 2021, share
capital and legal capital surplus increased to 110,709 million yen.
3. With the issuance of 2,067,600 shares of common stock (issue price: 1,151.70 yen, capitalization amount:
575.85 yen, allottee: Daiwa Securities Co.Ltd.) through a third-party allotment with the payment due date of
June 28, 2021, share capital and legal capital surplus increased to 1,191 million yen.
4. In addition to Note 2 and 3 above, the increase was due to the exercise of stock acquisition rights and the
Issuance of New Shares under the restricted stock units granted by the stock compensation plan.
5. During the period from January 1, 2022 to February 28, 2022, the number of issued shares increased by
498,900, share capital and legal capital surplus each increased by 166 million yen due to the exercise of stock
acquisition rights and the Issuance of New Shares under the restricted stock units granted by the stock
compensation plan.

(5) Distribution of Shares by Category of Shareholders

As of December 31, 2021
Status of
Status of Shares (Number of Shares per Unit: 100 Shares)
Shares
Financial Constituting
Classification National and Foreign Entities, etc.
Financial Instruments Other Individuals Less Than
Local Total
Institutions Business Entities Other than and Others One Unit of
Governments Individuals
Operators individuals Share
Number of
- 48 59 977 831 338 100,025 102,278 -
Shareholders
Number of
Shares Held
- 3,295,458 172,107 7,487,356 4,861,385 3,784 490,057 19,436,907 115,075
(Unit of
Shares)
Percentage of
Number of
- 16.95 0.88 38.52 39.34 0.03 4.26 100 -
Shares Held
(%)
(Note) 1. 2,581 shares of treasury stock are included in “Individuals and Others” (25 units) and in “Status of Shares
Constituting Less Than One Unit” (81 shares).
2. “Other Entities” includes 2 units of shares held in the name of the Japan Securities Depository Center.
3. Percentage of the Number of Shares Held regarding the Number of Shares Held (Unit of Shares) is rounded
off to the second decimal place.

- 51 -
 (6) Status of Large Shareholders
As of December 31, 2021
Number of Percentage of
Name of Shareholders Address Shares Held Shares Held
(shares) (%)
INCJ, Ltd. 1-3-1, Toranomon, Minato-ku, Tokyo 391,547,575 20.14
The Master Trust Bank of Japan, Ltd. (Trust 2-11-3, Hamamatsucho, Minato-ku,
157,436,900 8.09
Account) Tokyo
DENSO Corporation 1-1 Showa-cho, Kariya-shi, Aichi 153,143,625 7.87
Toyota Motor Corporation 1, Toyota-cho, Toyota-shi, Aichi 75,015,900 3.85
Custody Bank of Japan, Ltd. (Retirement Benefit
Trust Account re-entrusted by Sumitomo Mitsui
1-8-12, Harumi, Chuo-ku, Tokyo 71,779,857 3.69
Trust Bank, Limited/NEC Corporation Pension
and Severance Payments Trust Account)
Hitachi, Ltd. 1-6-6, Marunouchi, Chiyoda-ku, Tokyo 61,990,548 3.18
Custody Bank of Japan, Ltd. (Trust Account) 1-8-12, Harumi, Chuo-ku, Tokyo 55,325,100 2.84
Mitsubishi Electric Corporation 2-7-3, Marunouchi, Chiyoda-ku, Tokyo 50,706,885 2.60
25 CABOT SQUARE, CANARY
MSIP CLIENT SECURITIES WHARF, LONDON E14 4QA, U.K. 44,642,530 2.29
(1-9-7, Otemachi, Chiyoda-ku, Tokyo)
168 ROBINSON ROAD, #37-01
GIC PRIVATE LIMITED – C CAPITAL TOWER SINGAPORE
36,899,650 1.89
068912 (2-7-1, Marunouchi, Chiyoda-
ku, Tokyo)
Total – 1,098,488,570 56.51
(Note) 1. Percentage of shares held is calculated by truncating the numbers beyond the third decimal place.
2. 71,779,857 shares (“Percentage of Shares Held”: 3.69%) owned by Custody Bank of Japan, Ltd. (Re-trust of
Sumitomo Mitsui Trust Bank, Limited/NEC Corporation Pension and Severance Payments Trust Account) were
shares that were contributed by NEC Corporation as severance indemnities trusts. The voting rights of such
shares will be exercised at the instruction of NEC Corporation.
3. Capital Research and Management Company submitted the large shareholding report and related correction
report with joint ownership of Capital Guardian Trust Company, Capital International Limited, and Capital
International Co., Ltd. as of October 6, 2017, September 7, 2018, and November 19, 2018, reporting that they
jointly own 61,961,977 shares (percentage of shares held: 3.72%) as of August 31, 2018 (the date of the
reporting obligation has occurred) as follow. However, they are not included in above Major Shareholders as the
Company could not confirm the actual owning share numbers as of December 31, 2021.
The contents of the large shareholding report as of September 7, 2018, and November 19, 2018 are as follows;
Number of Percentage of
Name of Shareholders Address Shares Held Shares Held
(shares) (%)
Capital Research and Management 333 South Hope Street, Los Angeles, CA 40,564,077 2.43
Company 90071, U.S.A.
333 South Hope Street, Los Angeles, CA 8,746,000 0.52
Capital Guardian Trust Company
90071, U.S.A.
40 Grosvenor Place, London SW1X 7GG, 2,047,300 0.12
Capital International Limited
England
14th floor, Meiji Yasuda Life Insurance 10,604,600 0.64
Capital International Co., Ltd. Building, 2-1-1 Marunouchi, Chiyoda-ku,
Tokyo

- 52 -
 (7) Status of Voting Rights
① Issued Shares
As of December 31, 2021
Number of Voting
Classification Number of Shares Details
Rights

Non-voting shares - - -

Shares with restricted voting

- - -
rights (treasury stock, etc.)
Shares with restricted voting
- - -
rights (others)
Shares with full-voting rights Common
2,500 - -
(treasury stock, etc.) stock
Shares with full-voting rights Common
1,943,688,200 19,436,882 -
(others) stock
Shares constituting less than one Common
115,075 - -
unit of shares stock

Number of issued shares 1,943,805,775 - -

Voting rights of all shareholders - 19,436,882 -

(Note) “Shares with full-voting rights (others)” includes 200 shares (two (2) voting rights) held in the name of the Japan
Securities Depository Center.

② Treasury Stock, etc.

As of December 31, 2021
Percentage of
number of
Number of Number of
shares held to
shares held in shares held in Total number
Holder’s name Address of holder the total
the name of the name of of shares held
number of
holder others
issued shares
(%)
Renesas Electronics 2-24, Toyosu 3-chome,
2,581 - 2,581 0.00
Corporation Koto-ku, Tokyo

Total - 2,581 - 2,581 0.00

- 53 -
2. Status of Acquisition of Own Shares
[Class of Shares] Common stock

(1) Status of Acquisition by Resolutions of General Meetings of Shareholders

Not applicable.

(2) Status of Acquisition by Resolutions of Board of Directors

Not applicable.

(3) Description of Acquisition Other than by Resolutions of General Meetings of Shareholders or Board of Directors
Not applicable.

(4) Status of Process and Holding of Acquired Treasury Stock

Current fiscal year Current period

Classification Total amount of Total amount of

Number of Number of
disposal price disposal price
shares shares
(Yen) (Yen)
Acquired treasury stock for which
- - - -
subscribers were solicited
Acquired treasury stock cancelled - - - -
Acquired treasury stock transferred due to
mergers, share exchanges, share grants, - - - -
and company splits

Others (-) - - - -

Number of treasury stock owned 2,581 - 2,581 -

- 54 -
3. Dividend Policy
The Company distributes part of its earnings to shareholders in the form of dividends, while appropriating retained
earnings for the research and development of new products and capital expenditures, and maintaining a durable financial
structure capable of generating high earnings to maximize enterprise value. For each dividend period, payment
determinations are made with consideration of consolidated and non-consolidated income surplus, consolidated income,
forecast for income for the next and future periods, and cash flow status.
The Company’s basic policy is to pay dividends twice a year, i.e. interim and fiscal year-end dividends. The decision-
making body of the distribution of surplus is the ordinary general meeting of shareholders in the case of the year-end
dividends, and the Board of Directors in the case of interim dividends. The Company’s Articles of Incorporation provide
that “the Company may, by a resolution of the Board of Directors, make interim dividends of which record date is as of
June 30 of each year”.
The Company forewent dividend payment for the 20th fiscal year. The Company will divert its retained earnings for
strategic investment opportunities that will enable the Company to respond to rapid environmental changes in order to
thrive in the global marketplace, thus increasing shareholder profit by improving corporate value.
For the 21th fiscal year, whether the Company provides interim and year-end dividend payments remain undecided,
and the Company will immediately announce it when the decisions are made. In terms of shareholder return, the
Company aims to proceed with its own shares acquisitions as soon as possible prior to the payment of dividends.

4. Status of Corporate Governance and Related Matters

(1) Summary of Corporate Governance
① Basic Policy on Corporate Governance
Based on the following Corporate Governance Policy, the Group strives to be a company that is trusted by society
by maintaining sound relationship with any and all stakeholders including local communities, customers and business
partners in order to fulfill our social responsibility as a company.

<Corporate Governance Policy>

Based on our “Purpose”, “To Make Our Lives Easier”, the Group are committed to build a sustainable future where
technology helps make our lives easier by developing a safer, healthier, greener, and smarter world to provide
intelligence to our four focus growth segments: the Automobile Business and the Industrial/Infrastructure/IoT Business.
To achieve our Purpose, the Group aim to respond flexibly to changes, solve issues, and continue to create value in a
sustainable way based on the “Renesas Culture”, a guideline of conduct for all of our activities, behavior and decision-
making, which consists of five elements. Based on Renesas Culture, the Group aim for continuous growth and
enhancement of corporate value over the med- to long-term. In addition, the Group aim to co-exist and co-prosper with
every stakeholder in order to create long-term sustainable value as a responsible global company. In order to achieve
this, the Group must thrive in the rapidly-changing, competitive global semiconductor marketplace, and continue to
satisfy the expectations of all of our stakeholders and to grow with profit expansions. The Group will continue to solidify
our business foundation as a global semiconductor company by honing technological advancement as well as
supplying excellent semiconductor products and optimized solutions through elaborate marketing and sales activities.
The Group recognize the importance to build a corporate governance structure and system that enables transparent,
fair, quick and resolute decision-making. The Group will remain committed to enhance our corporate governance
structure and system through various measures such as communication and cooperation with our stakeholders
including shareholders, appropriate information disclosure, ensuring appropriate delegation of authority and highly
effective oversight functions.

[Our Purpose] To Make Our Lives Easier

At Renesas, the Group continuously strive to drive innovation with a comprehensive portfolio of microcontrollers,
analog and power devices. Our mission is to develop a safer, healthier, greener, and smarter world by providing
intelligence to our four focus growth segments: the Automobile Business and the Industrial/Infrastructure/IoT Business
that are all vital to our daily lives, meaning our products and solutions are embedded everywhere.

[Renesas Culture]
<Transparent>
The leadership team‘s strategy and policy, the company’s current situation, as well as the issues and thoughts of each
business organization should be well understood among employees. This is also tightly connected to the “Agile” and
“Entrepreneurial” elements described below, and we believe it is fundamental for the success of every individual and
organization.

<Agile>
In order to respond to changes in a timely manner, it is necessary to identify the likely outcomes and implications as
quickly as possible, make decisions quickly, and rapidly take or correct actions. The Group must recognize situations,
make decisions and act at a high velocity. When a follow-up regarding a task is made from inside and outside the
company, employees should understand they are not being "Agile"

<Global>
Not only the markets that the Group operates in, but also our customers and our competitors are global, and in order
to thrive in this global environment, it is essential for us to have a global perspective ourselves. It is true the Group
needs better language skills, but there are many other simple steps the Group can take to facilitate communication,
such as organizing discussion agenda, issues, alternative solutions in advance. In particular, numbers are useful as

- 55 -
 words. Whenever possible, use numbers to communicate, and try to share information more smoothly.

<Innovative>
In order for the Group to provide "Innovative" technologies and products and continue to create sustainable social
value, it is essential to practice "Innovative" way of conducting business and of thinking. Each and every one of our
employees should embody "Innovation" using their imagination and creativity to contribute to the realization of a richer
society.

< Entrepreneurial>
Individual employees should act professionally, voluntarily, and independently as if they are "running their own
business” and are responsible for the results they deliver. Based on our strategies and policies as a company, the
Group aims to develop employees who can think freely and create new value, without being constrained by existing
concepts.

② Corporate Governance Structure and Reasons for Adoption of the Structure

(a) The Company recognizes the importance of operating business efficiently and ensuring the soundness and
transparency of management in order to continuously increase corporate value. The Company is working to
improve its management system and implement various measures to enhance corporate governance.

(b) The Company is a company with Board of Corporate Auditors, and has established a corporate governance
system in which Corporate Auditors audit the execution of duties by Directors. The full-time Corporate Auditor,
who has business knowledge and experience, effectively collects high-quality information while cooperating with
the Accounting Auditor, the Internal Audit Office, which is the internal audit department, and other related divisions.
The Board of Corporate Auditors, including highly independent Outside Corporate Auditors, objectively analyzes
this information from various perspectives, therefore, the Company believes that this system is well-functioning
and suitable for the Company’s corporate governance.

(c) The Board of Directors is composed of 5 Directors, including 4 Outside Directors, who are appointed based on
their expertise, experience, and diversity. In principle, the Board of Directors meets regularly once every 3 months,
and extraordinary meetings are held as needed. The Board of Directors makes important management decisions
flexibly and promptly, and supervises the execution of duties by Directors. The functions and roles of the
Company’s Outside Directors are to supervise and check whether or not the execution of duties by other Directors
is appropriate, and to participate in management decision-making from an external perspective by utilizing their
knowledge, experience, insight, etc. cultivated from their own backgrounds.

Management Risk Internatinal Semiconductor,

Leadership Legal Finance Sustainability
Strategy Management Business Technology, DX
Hidetoshi Shibata ● ● ● ● ●
Jiro Iwasaki ● ● ● ●
Selena Loh Lacroix ● ● ● ●
Arunjai Mittal ● ● ● ●
Noboru Yamamoto ● ● ● ●

(d) The Board of Corporate Auditors is composed of 4 Corporate Auditors, including 3 Outside Corporate Auditors
(1 of whom is a Full-time Corporate Auditor). In principle, the Board of Corporate Auditors meets once every 3
months and extraordinary meetings are held as needed. The Board of Corporate Auditors decides auditing
policies and other matters, and receives reports from each Corporate Auditor on the status of audits and other
matters. With respect to two of the Corporate Auditors, both are lawyers and they are also independent Outside
Corporate Auditors. In addition, one of the Corporate Auditor has considerable knowledge of finance and
accounting.

(e) The Company has introduced the Executive Officer System to clarify responsibility for business execution and
accelerate decision-making related to business execution. The Board of Directors decides on matters that
Executive Officers should be responsible for, and delegates appropriate authority in accordance with the Basic
Rules of Ringi Approval.

(f) The Company has established a non-statutory Compensation Committee to improve the transparency and
fairness of compensation for the Company’s Directors, Executive Officers, and Corporate Auditors. The
Compensation Committee consists of a total of 4 members: 2 independent Outside Directors, 1 independent
Outside Corporate Auditor and 1 internal Director. In response to consultation by the Board of Directors, the
Committee reports on matters concerning compensation for Directors and Corporate Auditors, which are to be
submitted to the General Meeting of Shareholders, as well as on the compensation systems and compensation
levels for Directors and Executive Officers.

(g) The Company has established a non-statutory Nomination Committee to improve transparency and fairness in
the election and dismissal of Directors and the formulation of succession plans regarding the Chief Executive
Officer. The Nomination Committee is composed of 4 independent Outside Directors. In response to consultation
by the Board of Directors, the Committee reports on matters related to the election and dismissal of Directors
and the formulation of succession plans regarding the Chief Executive Officer, and monitors the progress of the
succession plans.

- 56 -
(h) The Company strives to enhance deliberations on matters to be submitted to the Board of Directors. In principle,
the Executive Committee, which is composed of full-time Directors, Executive Vice Presidents and Senior Vice
Presidents, discusses important matters prior to discussion by the Board of Directors, in order to enhance the
Board’s deliberation, except for those matters that do not require preliminary deliberation.

(i) The Board of Directors has established a basic policy for the development of the systems stipulated in Item 6 of
Paragraph 4 of Article 362 of the Companies Act and Paragraphs 1 and 3 of Article 100 of the Enforcement
Regulations of the Companies Act (including the system to ensure appropriate operation of the Group), and the
Company periodically holds meetings of the Internal Control Promotion Committee, which is composed of, among
others, the President and CEO, the Executive Officer responsible for internal controls, and the Executive Officer
responsible for administrative divisions. The Committee deliberates, proposes, and promotes the Group internal
control issues, policies and other matters as stipulated in the Companies Act and the Financial Instruments and
Exchange Act. For information on this committee, please refer to “③ Status of Development of Internal Control
System and Risk Management System”.

- 57 -
 The contents of the previous page are shown in the diagram below.

③ Status of Development of Internal Control System and Risk Management System (including Status of Development
of System to Ensure Appropriate Operation of Company’s Subsidiaries)
(a) Basic policy on, and status of, internal control system
The Board of Directors has resolved the basic policy for the development of the system (internal control system)
stipulated in Item 6 of Paragraph 4 of Article 362 of the Companies Act and Paragraphs 1 and 3 of Article 100 of
the Enforcement Regulations of the Companies Act, and has established the system based on this basic policy.
This basic policy is as shown on the Company’s website (https://www.renesas.com/jp/ja/about/investor-
relations/governance.html) and an outline is as follows:
<Systems necessary to ensure that the execution of duties by Directors, Executive Officers and employees
(“Members”) complies with laws and regulations and Company’s Articles of Incorporation>
・ The Directors shall take the lead in complying with the “Renesas Electronics CSR Charter” and the “Renesas
Electronics Group Code of Conduct” that have been adopted for the purpose of establishing corporate ethics
and ensuring compliance with laws and regulations, the Articles of Incorporation and internal rules of the
Company by Members. The Directors shall keep the Members of the Company and its subsidiaries
(collectively, the “Group”) informed of such rules, and shall have Group comply with them.
・ The Directors shall stipulate basic matters such as implementation system and educational programs for
compliance in “Global Rule for Compliance Management within the Renesas Group”, shall oblige attendees
to deliberate and resolve matters regarding compliance at “Internal Control Promotion Committee”, and shall
offer training programs and the like for the Group to be fully aware of compliance.
・ The Directors shall set up “Renesas Electronics Group Hot Line” as whistle blowing window/ internal contact
points for the Group and its business partners to report violations or possible violations of compliance.
Furthermore, the Directors shall keep the Group and its business partners informed that they assure the
anonymity of informants upon requests from informants and informants shall never be adversely affected.
・ The Directors shall keep away from any antisocial force, shall work closely with external specialized institutions,
and shall act resolutely in an organized manner when contacted by it.
<Systems for properly preserving and managing information related to execution of duties by Directors>
・ The Directors shall properly prepare, preserve and manage minutes of the General Meetings of Shareholders,
Meetings of Board of Directors and other documents in accordance with applicable laws and regulations. The
Directors shall also properly prepare, preserve and manage other documents, books and records pertaining
to the duties of Members in accordance with “Basic Rule of Document Management and Retention”.
・
<Rules and other systems regarding risk management for loss>

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 ・ The Directors shall stipulate basic matters of risk management in the Company’s “Global Rule for Risk and
Crisis Management within the Renesas Group”, and shall establish a risk management framework in
accordance with the rules.
・ The Executive Officers and division managers responsible for classified risk shall strive to minimize loss by
developing prevention measures against risk materialization and by developing countermeasures in case of
risk materialization.
・ The Executive Officers shall, depending on its importance, establish an appropriate organization chaired by
themselves, and shall implement appropriate measures in accordance with the “Global Rule for Risk and Crisis
Management within the Renesas Group” when serious risk materializes.
・ The Directors shall evaluate, maintain and improve the internal control status related to financial report of the
Group in accordance with applicable domestic and foreign laws and regulations such as the Financial
Instruments and Exchange Act.
<Systems for ensuring efficient execution of duties by Directors>
・ The Directors shall hold an ordinary Meeting of the Board of Directors once each 3-months and extraordinary
meetings as needed for the sake of quick decision-making.
・ The Directors shall constantly oversee, guide and support the Company’s subsidiaries through the responsible
divisions, and periodically receive reports on matters relating to the execution of duties by Directors of the
Company’s subsidiaries, in accordance with the “Basic Rule of Operation and Management of Affiliate
Companies”.
・ The Executive Officers (including Executive Officers who also act as Directors) shall make quick decisions for
the business operation by transferring their authorities to the relevant general managers or other employees.
The Executive Officers, the relevant general managers and other employees shall execute their authority
properly and efficiently in accordance with “Basic Rules of Ringi Approval”.
・ The Executive Officers (including Executive Officers who also act as Directors) shall execute their duties
quickly and efficiently in accordance with office routine regulations determined by the Meeting of the Board of
Directors, and shall periodically confirm the status of execution of management plans and the budget
determined at a Meeting of the Board of Directors.
<Systems necessary to ensure appropriate operation of the Group>
・ The Directors shall guide and support the Company’s subsidiaries to establish the Group-wide compliance
system in accordance with the “Renesas Electronics CSR Charter”, “Renesas Electronics Group Code of
Conduct” and “Global Rule for Compliance Management within the Renesas Group”.
・ The Directors shall constantly oversee, guide and support the Company’s subsidiaries through the divisions
responsible for the business and supervision of the subsidiaries and have the matters relating to the execution
of duties by directors of the subsidiaries periodically reported, in accordance with “Basic Rule of Operation and
Management of Affiliate Companies”
・ The Directors shall, through a division responsible for risk management, have the Company’s subsidiaries
establish rules for risk and crisis management, and, make contact lists and action plans in emergency.
・ The Directors shall, through Internal Control Promotion Committee, etc., establish the Group-wide common
decision making rules and policies on the Group governance.
・ The Directors shall have Internal Audit Office audit the Group, and shall have principal subsidiaries allocate
internal auditing staff or divisions and cooperate with the Internal Audit Office and the subsidiaries’ own
Corporate Auditors to ensure appropriate operations of the Group.
<Matters relating to employees assigned to assist Corporate Auditors and independence of such employees from
Directors>
・ The Directors shall establish the Corporate Auditors Office composed of specialized staff for the purpose of
assisting the Corporate Auditors’ audit activities. Any evaluation, personnel transfer, reprimand and the like
of such specialized staff shall require prior consultation with the full-time Corporate Auditors, and such staff
shall not be directed or supervised by the Directors for duties to assist the Corporate Auditors.
<Systems for Members of the Group, corporate auditors of the Company’s subsidiaries etc. to report to Corporate
Auditors and systems to ensure to prevent adverse treatment to the persons who reported to Corporate Auditors
>
・ Members of the Group shall, upon requests from the Corporate Auditors, report to the Corporate Auditors on
matters such as the execution of their duties.
・ Internal Audit Office shall submit the internal audit report for the Group to Corporate Auditor, and report the
results of the internal audit to the Meeting of Board of Directors where Corporate Auditor attends.
・ Internal Control Promotion Committee shall periodically report to Corporate Auditor the situation of the matters

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 reported to “Renesas Electronics Group Hot Line” by Member.
・ The Company prohibits adverse treatment to the Member of the Group and corporate auditors of the
Company’s subsidiaries who reported to Corporate Auditors for the reason that they reported so, and clearly
state these rules in “Basic Rules of Renesas Electronics Group Hot Line” and on the Company’s intranet.
<Procedures for the advance payment or reimbursement of the expenditure which occurs in connection with the
execution of Corporate Auditor’s duties, and policies on the treatment of cost, expenditure and obligations which
occurs in connection with the execution of Corporate Auditor’s duties.>
・ Upon the Corporate Auditor’s request for the advance payment of the expenditures, etc., the Company shall
bear cost, expenditure and payables except for the case it is proved that such cost, expenditure and payables
are not necessary to execute the Corporate Auditor’s duties.
<Other systems necessary to ensure effective auditing by Corporate Auditors>
・ The Corporate Auditors shall attend Meetings of the Board of Directors, and may attend important meetings of
the Company as they deem necessary. Furthermore, the Directors shall guarantee the right of Corporate
Auditors to access important corporate information.
・ The Corporate Auditors shall hold a Meetings of Board of Corporate Auditors in principle once each 3-months,
and shall exchange information and deliberate on the status of audits and related matters. The Corporate
Auditors also shall receive regular reports from Accounting Auditors on their audit activities, and shall exchange
opinions on them.
(b) The Internal Control Promotion Committee, which is composed of, among others, the President and CEO, the
Executive Officer responsible for internal control, and the Executive Officer responsible for administrative divisions,
meets once every 2 months in principle to oversee PDCA cycle for internal control-related operations at the Group
and to investigate the causes of significant violations of compliance related to the internal control system and to
discuss and consider measures to prevent recurrence.

④ Number of Directors
The Articles of Incorporation stipulate that the Company shall have no more than 15 Directors.

⑤ Resolution Requirements for Election and Dismissal of Directors

The Articles of Incorporation of the Company stipulates that a resolution electing Directors shall be adopted by a
majority of votes of the shareholders present at a general meeting of shareholders at which shareholders representing
not less than one-third of the voting rights of shareholders entitled to exercise their voting rights are present, and that
the resolution shall not be made by cumulative voting.

⑥ Requirements for Special Resolutions at General Meetings of Shareholders

The Company stipulates in its Articles of Incorporation that special resolutions required at General Meetings of
Shareholders provided for in Paragraph 2 of Article 309 of the Companies Act shall be passed by not less than two-
thirds of votes of shareholders present at a general meeting at which shareholders having not less than one-third of
the total number of voting rights of shareholders entitled to exercise their voting rights are present. The purpose of this
provision is to expedite the proceedings at the General Meeting of Shareholders by relaxing the number of
shareholders present required for special resolutions at the General Meeting of Shareholders.

⑦ Matters to Be Resolved at Shareholders Meetings that Can Be Resolved at Meetings of the Board of Directors
The Articles of Incorporation stipulates that the Company may acquire its own shares in accordance with the
provisions of Paragraph 2 of Article 165 of the Companies Act and pay interim dividends in accordance with the
provisions of Paragraph 5 of Article 454 of the Companies Act, by a resolution of the Board of Directors.
The purpose of these provisions is to enable the Company to acquire its own shares and pay interim dividends more
flexibly in response to changes in the business environment.
In addition, the Company has stipulated in its Articles of Incorporation that the Company may, pursuant to the
provision of Paragraph 1 of Article 426 of the Companies Act, release the Directors (including those who had been
Directors) and the Corporate Auditors (including those who had been Corporate Auditors) of their liability for damages
arising from negligence of their duties by a resolution of the Board of Directors, to the extent permitted by the applicable
laws and regulations, in order to enable Directors and Corporate Auditors to fully play their expected roles.

⑧ Summary of the Limited Liability Agreement

The Company has entered into agreements with Outside Directors and Outside Corporate Auditors that limit their
liability for damages as set forth in Paragraph 1 of Article 423 of the Companies Act. The maximum amount of liability
for damages under such agreements is the minimum amount of liability as set forth in Paragraph 1 of Article 425 of the
same Act pursuant to the Company’s Articles of Incorporation.

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 (2) Status of Directors and Corporate Auditors Board Members
① List of Directors and Corporate Auditors Board Members
Men: 6 persons, Women: 3 persons (Percentage of women among directors and corporate auditors board members:
33.3%)
As of March 30, 2022
Number of
Position and Name Brief Employment History, Position, Responsibility and Important Term of
Company's
Title (Date of Birth) Concurrent Positions office
Shares Held
April 1995 Joined Central Japan Railway Company
August 2001 Joined MKS Partners Limited as Principal
August 2004 Partner, MKS Partners Limited
October 2007Joined Global Private Equity, Merrill Lynch
Japan Securities Co., Ltd. (currently, BofA
Securities Japan Co., Ltd.) as Managing
Director
September 2009 Joined Investment Group, Innovation Network
Corporation of Japan (currently, Japan
Investment Corporation) as Managing Director
Representative
Hidetoshi Shibata June 2012 Executive Managing Director, Investment
Director
(November 16, Group, Innovation Network Corporation of (Note 1) 187,800
(President and
1972) Japan (currently, Japan Investment
CEO)
Corporation)
October 2013 Member of the Board, the Company
November 2013 Executive Vice President, Member of the
Board and CFO, the Company
June 2016 Executive Vice President and CFO, the
Company
March 2018 Executive Vice President, Member of the
Board and CFO, the Company
July 2019 Representative Director, President and CEO,
the Company (to the present)
April 1974 Joined Tokyo Denki Kagaku Kogyo K.K.
(currently, TDK Corporation)
June 1996 Director, General Manager of Human
Resources, TDK Corporation
June 1998 Director and Senior Vice President, Executive
Officer of Recording Media & Solutions
Business Group, TDK Corporation
June 2006 Director and Executive Vice President, Senior
Executive Officer of Administration Group, TDK
Corporation
March 2008 Audit and Supervisory Board Member, GCA
Savvian Corporation (currently, GCA
Corporation)
June 2009 Director and Senior Vice President, Executive
Officer of Strategic Human Resources and
Administration Division, JVC KENWOOD
Jiro Iwasaki
Holdings, Inc. (currently, JVC KENWOOD
Director (December 6, (Note 1) ―
Corporation)
1945)
March 2011 Audit and Supervisory Board Member, SBS
Holdings, Inc.
April 2011 Professor at Teikyo University, Faculty of
Economics/Department of Business
Administration
March 2015 Outside Director, SBS Holdings, Inc. (to the
present)
April 2015 Audit and Supervisory Board Member, GCA
Savvian Corporation (currently, GCA
Corporation)
Outside Director (Full-time Audit and
March 2016 Supervisory Committee Member), GCA
Savvian Corporation (currently, GCA
Corporation)
June 2016 Outside Member of the Board of Directors, the
Company (to the present)

- 61 -
 Number of
Position and Name Brief Employment History, Position, Responsibility and Important Term of
Company's
Title (Date of Birth) Concurrent Positions office
Shares Held
1988 Joined a Singaporean law firm as an associate
August 1992 Joined Gray Cary Ware & Freidenrich LLP
(now DLA Piper) as an associate
June 1995 Senior Counsel, Texas Instruments
Incorporated
December 2004 Vice President & General Counsel, Asia
Pacific, Honeywell International Inc.
May 2010 Global Semiconductor Practice Leader &
Global Legal, Regulatory and Compliance
Selena Loh Practice Leader, Egon Zehnder
Lacroix December 2016 Member of Board of Directors, Integrated (Note 1) 30,400
Director
(November 18, Device Technology, Inc. (Part-time; resigned
1964) March 2019)
June 2017 Global Technology & Communication Practice
Leader, Egon Zehnder
November 2017 Board Member, National Association of
Corporate Directors - North Texas Chapter
(Part-time; to the present)
December 2019 Vice Chair, Technology Practice, Korn Ferry (to
the present)
March 2020 Outside Member of the Board of Directors, the
Company (to the present)

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 Number of
Position and Name Brief Employment History, Position, Responsibility and Important Term of
Company's
Title (Date of Birth) Concurrent Positions office
Shares Held
1996 Manager, Regional Development Asia-Pacific,
Discrete & Power Semiconductors, Siemens
Components Pte. Ltd.
1998 Senior Manager, Business Operations Asia-
Pacific, Power Semiconductors, Siemens
Components Pte. Ltd.
1999 Senior Manager, Business Operations Asia-
Pacific, Power Semiconductor Business
Group, Infineon Technologies AG
2001 Vice President & General Manager,
Automotive & Industrial Business Group,
Power Management & Supply Business Unit,
Infineon Technologies AG
2005 Vice President & General Manager,
Automotive, Industrial & Multimarket Business
Group, Power Management & Drives Business
Unit, Infineon Technologies AG
2006 Senior Vice President & General Manager,
Automotive, Industrial & Multimarket Business
Group, Power Management & Drives Business
Unit, Infineon Technologies AG
Arunjai Mittal
2008 Business Division President & General (Note 1)
Director (February 8, ―
Manager, Industry & Multimarkets Division,
1971)
Infineon Technologies AG
January 2012 Member of the Management Board, Infineon
Technologies AG (responsible for Regions,
Sales, Marketing, Strategy Development and
M&A)
June 2014 Member of the Supervisory Board, tesa SE (to
the present)
February 2015 Board Member, Singapore Economic
Development Board
May 2018 Director, Silicon Solutions Ventures Pte. Ltd.
(to the present)
August 2018 Member of the Supervisory Board, OSRAM
Licht AG (to the present)
March 2019 Non-Executive Chairman, ZERO-ERROR
SYSTEMS PTE. LTD. (to the present)
February 2020 Member of the Board, Agency for Science,
Technology and Research (to the present)
March 2020 Outside Member of the Board of Directors, the
Company (to the present)
August 2020 Non-Executive Chairman, Advanced Micro
Foundry PTE. LTD. (to the present)

- 63 -
 Number of
Position and Name Brief Employment History, Position, Responsibility and Important Term of
Company's
Title (Date of Birth) Concurrent Positions office
Shares Held
April 1986 Joined Mazda Motor Corporation
May 1989 Joined Daiwa Securities Co. Ltd.
February 2002 Joined PricewaterhouseCoopers Financial
Advisory Service Ltd. (currently, PwC Advisory
LLC) as Managing Director
April 2003 Joined Lazard Frères K.K. as Managing
Director
October 2006 Joined Nikko Citi Group Securities Co., Ltd.
(currently, Citigroup Global Markets Japan
Inc.), Investment Banking Unit, as Managing
Director
November 2011 Joined BNP Paribas, Tokyo Branch,
Noboru Yamamoto
Investment Banking Division, as Co-head
Director (November 21, (Note 1) －
June 2016 Outside Director, Hitachi Koki Co., Ltd.
1962)
(currently, Koki Holdings Co., Ltd.) (to the
present)
September 2016 Representative Director, Representative
Partner & CEO, XIB Capital Partners, Inc. (to
the present)
January 2017 Senior Advisor, CLSA Capital Partners K.K. (to
the present)
March 2018 Outside Director, Tsubaki Nakashima Co., Ltd.
(to the present)
Outside Corporate Auditor (part-time), the
Company
March 2021 Outside Director, the Company (to the present)
April 1974 Joined NEC Corporation
April 2000 Department Manager, Finance Systems &
Finance Affairs Office, Corporate Finance &
Controller Division, NEC Corporation
December 2000 Senior Vice President, NEC (China) Co., Ltd.
July 2005 Associate Senior Vice President, NEC Soft,
Corporate Kazuki Fukuda Ltd. (currently, NEC Solution Innovators, Ltd.)
Auditor (November 15, June 2010 Resigned as Associate Senior Vice President, (Note 4) 4,500
(Full time) 1950) NEC Soft, Ltd.
June 2010 Corporate Auditor, NEC Mobiling, Ltd.
(currently, MX Mobiling Co., Ltd.)
June 2012 Outside Corporate Auditor (full time), the
Company
March 2020 Corporate Auditor (full time), the Company (to
the present)

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 April 1983 Registered as an Attorney-at-Law
April 1987 Managing Partner, Yamazaki Law Office (to the
present)
June 2004 Statutory Auditor, KENKO Mayonnaise Co.,
Ltd.
April 2008 Vice President, Daiichi Tokyo Bar Association
June 2014 Outside Corporate Auditor (part-time), the
Kazuyoshi
Corporate Company (to the present)
Yamazaki (Note 2) ―
Auditor April 2015 Executive Governor, Japan Federation of Bar
(July 19, 1949) Associations
January 2019 Outside Director, G.O Holdings Inc. (to the
present)
March 2020 Outside Director, Nisul Co., Ltd. (to the
present)
Outside Director, REGAO Co., Ltd. (to the
present)
July 1994 Joined Bain & Company Japan, Inc.
September 2001 Joined Eli Lilly & Company as Marketing
Associate
January 2003 Joined Eli Lilly Japan K.K. as Senior MR
June 2005 Joined Novartis Pharma K.K. as Brand
Tomoko Mizuno Manager, New Product Planning
Corporate January 2009 Group Manager, Equa Marketing Group,
(September 1, (Note 3) ―
Auditor Novartis Pharma K.K.
1970) April 2011 Joined MSD K.K. as Brand Leader, Gardasil
Marketing Group
April 2013 Joined Japan Automatic Machine Co., Ltd. as
Director (to the present)
March 2021 Outside Corporate Auditor (part-time), the
Company (to the present)
October 2002 Prosecutor. Served several posts, including
District Public Prosecutors Office in Tokyo,
Chiba, Okayama, Osaka, and Saitama.
July 2016 Retirement as a Prosecutor
Registered as a lawyer, joined City-Yuwa
Partners (to the present)
May 2018 Outside Director and Audit and Supervisory
Corporate Miya Miyama
Committee Member, RoomClip, Inc. (Note 2) －
Auditor (June 13, 1972)
April 2020 Vice Chair, Gender Equality Committee of
Kanto Federation of Bar Associations (to the
present)
June 2020 Auditor, Japan International Cooperation
System (to the present)
June 2021 Outside Director, Totetsu Kogyo, Co., Ltd. (to
the present)
Total 222,700
(Note) 1. The term of office shall expire at the conclusion of the Annual General Shareholders’ Meeting for the last
business year that ends within one (1) year after the conclusion of the Annual General Shareholders’ Meeting
held on March 30, 2022.
2. The term of office shall expire at the conclusion of the Annual General Shareholders’ Meeting for the last
business year that ends within four (4) years after the conclusion of the Annual General Shareholders’ Meeting
held on March 30, 2022.
3. The term of office shall expire at the conclusion of the Annual General Shareholders’ Meeting for the last
business year that ends within four (4) years after the conclusion of the Annual General Shareholders’ Meeting
held on March 31, 2021.
4. The term of office shall expire at the conclusion of the Annual General Shareholders’ Meeting for the last
business year that ends within four (4) years after the conclusion of the Annual General Shareholders’ Meeting
held on March 27, 2020.
5. Mr. Jiro Iwasaki, Ms. Selena Loh Lacroix, Mr. Arunjai Mittal and Mr. Noboru Yamamoto are outside Directors,
as stipulated in Item 15, Article 2 of the Companies Act.
6. Mr. Kazuyoshi Yamazaki, Ms. Tomoko Mizuno and Ms. Miya Miyama are outside Corporate Auditors, as
stipulated in Item 16, Article 2 of the Companies Act.
7. The Company adopts a corporate officer system. Corporate officers who do not concurrently hold Director
posts as of the filing date are as follows:
Masahiko Nozaki, Sailesh Chittipeddi, Hiroto Nitta, Shinichi Yoshioka, Chris Allexandre, Roger Wendelken,
Shuhei Shinkai, Jason Hall, Takeshi Kataoka, Vivek Bhan

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② Outside Directors and Outside Corporate Auditors
(a) Appointment of Outside Directors and Outside Corporate Auditors
The Company appoints 4 Outside Directors (out of 5 Directors) and 3 Outside Corporate Auditors (out of 4
Corporate Auditors) who have a great variety of experience and expertise to proactively incorporate outside
perspective and multilaterally deal with management issues. Further, aiming for obtaining appropriate and objective
advice to improve its business performance and corporate governance, the Company has notified the following
Directors and Corporate Auditors to the Tokyo Stock Exchange as Independent Executives: Mr. Jiro Iwasaki, Ms.
Selena Loh Lacroix, Mr. Arunjai Mittal, and Mr. Noboru Yamamoto (Outside Directors), and Mr. Kazuyoshi Yamazaki,
Ms. Tomoko Mizuno, and Ms. Miya Miyama (Outside Corporate Auditors).

(b) Functions and Roles of Outside Directors and Outside Corporate Auditors
Mr. Jiro Iwasaki, an Outside Director, has served as a director at multiple companies for a long time and thus
possesses management experience in electrical and electronic components businesses. He currently serves as an
outside director at other companies. Based on his abundant knowledge, experience and deep insight cultivated
through such experience, he demonstrates supervising and monitoring capabilities on the overall management of
the Company.
Ms. Selena Loh Lacroix, an Outside Director, demonstrates supervising and monitoring capabilities on the overall
management of the Company, from the perspective of promoting diversity and by leveraging her global insight in the
field of corporate legal, corporate governance and human resources gained through extensive experiences in the
semiconductor industry and several other industries.
Mr. Arunjai Mittal, an Outside Director, demonstrates supervising and monitoring capabilities on the overall
management of the Company, from the perspective of promoting diversity and by leveraging his global insight in the
business operations cultivated through years of extensive experience in the semiconductor industry and related
industries.
Mr. Noboru Yamamoto, an Outside Director, demonstrates supervising and monitoring capabilities on the overall
management of the Company, based on the abundant knowledge, experience and achievements cultivated through
years of management experience in the global finance and security industry and representative for M&A advisory
companies.
Mr. Kazuyoshi Yamazaki, an Outside Corporate Auditor, has expertise, abundant experience and deep insight
cultivated through many years of practical work as a lawyer. He demonstrates auditing capabilities concerning the
overall management of the Company from an independent and a fair standpoint and from a legal perspective.
Ms. Tomoko Mizuno, an Outside Corporate Auditor, has abundant knowledge, experience and deep insight in
corporate planning, human resources, etc., cultivated through her business operations in the machinery industry
and her work experience at global consulting firms and pharmaceutical companies. Based on such experience, she
demonstrates auditing capabilities on the overall management of the Company.
Ms. Miya Miyama, an Outside Corporate Auditor, as a lawyer, has specialized knowledge, extensive experience,
and a high degree of insight in the legal field centered on corporate crisis management. Based on such experience,
she fulfills the role of an audit function for the Company's overall management.

(c) Relationship with Outside Directors and Outside Corporate Auditors

There is no personal, financial, or business relationship or other special interested relationship between the
Company and any companies where Mr. Jiro Iwasaki, Ms. Selena Loh Lacroix, Mr. Arunjai Mittal, or Mr. Noboru
Yamamoto, Outside Directors, or Mr. Kazuyoshi Yamazaki, Ms. Tomoko Mizuno or Ms Miya Miyama, Outside
Corporate Auditors, holds any position.

(d) Standards or Policies regarding Independence for the Election of Outside Directors and Outside Corporate
Auditors
The Company has not established any special standards or policies regarding independence for the election of
Outside Directors and Outside Corporate Auditors, though the Company is currently considering establishing such
standards or policies. However, the Company has notified the Tokyo Stock Exchange, Inc. of 4 Outside Directors
and 3 Outside Corporate Auditors as Independent Executives in reference to factors considered by the Tokyo Stock
Exchange, Inc. to be potential conflicts of interest with general shareholders.

(e) Cooperation between Outside Directors and Outside Corporate Auditors and Internal, Corporate Auditors and
Accounting Audits, and Relationship with Internal Control Divisions
The Company does not have a dedicated staff to support Outside Directors, but the staff members of the Legal
Division and other employees provide support in a timely manner.
The Company has assigned a number of full-time staff members of the Corporate Auditors Office to support the
Outside Corporate Auditors in executing their duties. In addition, on the Board of Corporate Auditors, the information
on auditing activities is shared among Corporate Auditors. To that end, the full-time Corporate Auditor explains the
Company’s management trends and reports on auditing activities, while the part-time Corporate Auditors introduce
examples of other companies.
Further, the Internal Control Divisions (including Legal Division, Accounting & Control Division, Corporate Strategy
& Finance Division and CEO Office) cooperate in providing advance and ex-post explanations in a timely manner in
response to requests from Outside Directors and Outside Corporate Auditors with respect to important matters
related to internal control among the matters to be deliberated by the Board of Directors and the Executive
Committee.
At the meetings of the Board of Directors and the Board of Corporate Auditors, the Company makes efforts to

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ensure that sufficient information is provided in a timely manner so that Directors and the Corporate Auditors may
prepare beforehand. To that end, the staff members of the Legal Division provide notices and materials related to
the deliberations at the Board of Directors, and the staff members of the Corporate Auditors Office provide notices
and materials related to the deliberations at the Board of Corporate Auditors. In addition, the staff members of the
Legal Division and the Corporate Auditors Office promptly respond to questions and comments from Outside
Directors and Corporate Auditors, respectively, by making inquiries of related divisions within the Company.
The Internal Control Divisions led by the Accounting & Control Division and the Internal Audit Office, which is the
Internal Audit Division of the Company, provide the necessary support for the smooth execution of audits by the
Accounting Auditor, and also provide timely and accurate information in response to requests from Outside Directors
and Outside Corporate Auditors, thereby realizing collaboration between Outside Directors and Outside Corporate
Auditors, and the Accounting Auditor.
Outside Directors and Outside Corporate Auditors also receive reports on the status of internal audits at the
meetings of the Board of Directors or through other means. In this way, the Outside Directors and Outside Corporate
Auditors work closely with the Internal Audit Office to realize effective supervision.

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(3) Audit Status
① Internal Audit Status
(a) Overview of Internal Audits
With regard to internal audits, the Internal Audit Office, which is composed of dedicated personnel directly under
the President and CEO, verifies and evaluates the business execution of the Company’s management organization,
including business execution divisions, staffing divisions, and consolidated subsidiaries, from a third-party
perspective independent of the business execution divisions and from the perspectives of compliance, risk
management, and internal control, and recommends specific corrective and improvement measures if there are any
problems.

(b) Relationship between the Internal Audit Department and the Internal Control Department
The Internal Audit Department conducts hearings and other inquiries of internal divisions, including the Internal
Control Department, as necessary, to collect information in a timely and accurate manner.

(c) Relationship between the Internal Audit Office and the Accounting Auditor
The Internal Audit Office works closely with the Accounting Auditor by regularly exchanging information.

② Status of Audits by Corporate Auditors

(a) Overview of Audits by Corporate Auditors
In principle, the Board of Corporate Auditors meets once every 3 months, and extraordinary meetings are held as
necessary. The Board of Corporate Auditors decides audit policies and other matters, and each Corporate Auditor
reports on the status of audits and other matters. In accordance with auditing policies established by the Board of
Corporate Auditors, the Corporate Auditors audit the execution of duties by Directors by attending meetings of the
Board of Directors and other important meetings, receiving business reports and being informed of the status of
execution of duties from Directors, Executive Officers and employees (including the Internal Control Department),
reviewing important approval documents and other documents, investigating the status of operations and assets
(including the compliance system and the internal control system), and investigating subsidiaries.
Attendance at the Board of Corporate Auditors meetings by each Corporate Auditor as of December 31, 2021 is
as follows.
Position and Title Name Attendance（rate）
Corporate Auditor (full-time) Kazuki Fukuda attended 8 of the 8 meetings (100%)
Corporate Auditor (part-time) Kazuyoshi Yamazaki attended 8 of the 8 meetings (100%)
Corporate Auditor (part-time) Takeshi Sekine attended 8 of the 8 meetings (100%)
Corporate Auditor (part-time) Tomoko Mizuno attended 5 of the 5 meetings (100%)
Corporate Auditor (part-time) Noboru Yamamoto attended 3 of the 3 meetings (100%)
(Note) 1. Ms. Tomoko Mizuno’s attendance at the Board of Corporate Auditors meetings covers the Board of Corporate Auditors
meetings held after her appointment.
2. At the closing of the 19th Ordinary General Meeting of Shareholders, Mr. Noboru Yamamoto resigned as an Audit &
Supervisory Board Member.

(b) Cooperation between Corporate Auditors and the Internal Auditing Office
The full-time Corporate Auditor meets regularly with the head of the Internal Audit Department to promote
cooperation by, among others, receiving the results of internal audits and exchanging opinions on proposals for
improvement in order.

(c) Cooperation between Corporate Auditors and the Accounting Auditor

Each Corporate Auditor requires the Accounting Auditor to report on the audit from time to time. In addition, the
Board of Corporate Auditors and the Accounting Auditor promote cooperation by holding regular meetings to hear
reports on the accounting audit plan, results of implementation, and other matters as well as exchanging opinions
on auditing activities and other matters as necessary. Full-time Corporate Auditor also attends on-site inspections of
major Company assets (inventories, etc.) conducted by the Accounting Auditor to confirm that appropriate
processing is conducted.

③ Status of Accounting Audit

(a) Name of the Auditing Firm
PricewaterhouseCoopers Aarata LLC

(b) Continuous Audit Period

3 years

(c) Certified Public Accountants responsible for the audit

Hiroyuki Sawayama, Designated limited liability Partner and Engagement Partner
Takeaki Ishibashi, Designated limited liability Partner and Engagement Partner
Hitoshi Kondo, Designated limited liability Partner and Engagement Partner

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 (d) Those Assisting in Auditing Services
15 certified public accountants and 41 others assisted with accounting audit of the Company.

(e) Policies and Reasons for Selection of Auditing Firm

The Board of Corporate Auditors chose PricewaterhouseCoopers Aarata LLC as an Accounting Auditor because
the Board of Corporate Auditors determined that it has the expertise, independence and quality management
required as the Company’s Accounting Auditor as well as has a capacity to audit the Group’s global business
activities in a uniform manner, in accordance with the Company‘s Accounting Auditor evaluation and selection criteria.
The Board of Corporate Auditors, by unanimous consent, will dismiss the Accounting Auditor upon determination
that the Accounting Auditor falls under any item of Paragraph 1 of Article 340 of the Companies Act. In addition,
should anything occur to negatively impact the qualifications or independence of the Accounting Auditor, thereby
making it unlikely that the Accounting Auditor will be able to properly perform an audit, the Board of Corporate
Auditors will propose to dismiss or not to reappoint the Accounting Auditor at a General Meeting of Shareholders.
Further, if the Board of Corporate Auditors determines that the change in the Accounting Auditor will enable the
Company to establish a more appropriate audit system, it will propose not to reappoint the Accounting Auditor at a
General Meeting of Shareholders.

(f) Evaluation of Auditing Firm by Corporate Auditors and the Board of Corporate Auditors
The Board of Corporate Auditors has established evaluation standards for Accounting Auditor, which consist of,
among others, assurance of the independence of Accounting Auditor, audit implementation system, communications
with Corporate Auditors, etc., and the auditing firm’s quality control system. In accordance with these standards, the
Board of Corporate Auditors evaluates the Accounting Auditor annually by reviewing materials from the Accounting
Auditor, the Company’s officers and employees, and interviewing them on a regular basis.

④ Details of audit fees, etc.

(a) Remuneration for Auditing Certified Public Accountants or Auditing Firm

Previous Consolidated Fiscal Year Current Consolidated Fiscal Year

Classification Audit certification Non-auditing Audit certification Non-auditing
services fees services fees services fees services fees
(Millions of yen) (Millions of yen) (Millions of yen) (Millions of yen)
Filing Company 164 ― 216 56
Consolidated
18 1 14 1
Subsidiaries
Total 182 1 230 57
The non-audit services provided to the Company and its consolidated subsidiaries are financial advisory and other
services.

(b) Fees paid to Organizations in the Same Network (PricewaterhouseCoopers) as that of Auditing Certified Public
Accountants or Auditing Firm of the Company (excluding (a) above)

Previous Consolidated Fiscal Year Current Consolidated Fiscal Year

Classification Audit certification Non-auditing Audit certification Non-auditing
services fees services fees services fees services fees
(Millions of yen) (Millions of yen) (Millions of yen) (Millions of yen)
Filing Company ― 89 ― 42
Consolidated
329 28 295 39
Subsidiaries
Total 329 117 295 81
The non-auditing services provided to the Company and its consolidated subsidiaries are various advisory services,
including tax advisory services.

(c) Policy for Determining Audit Fees

Audit fees of the certified public accountants or auditing firm paid by the Company are determined by
comprehensively taking into account factors such as the number of audit days, the size of the relevant company,
and the nature of operations.

(d) Reasons for the Board of Corporate Auditors’ Agreement on Accounting Auditor Fees
The Board of Corporate Auditors obtained the necessary materials, and received reports, from the Directors,

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related internal divisions, and the Accounting Auditor. After reviewing the audit plan for the previous fiscal year and
the current fiscal year, the status of execution of audits, and the basis for calculating the fee estimate, the Accounting
Auditor concluded that the amount of the Accounting Auditor’s fees, etc., was reasonable and agreed on such
amount of fees.

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 (4) Executive Compensation and Related Matters
① Compensation for Directors and Corporate Auditors
(a) Compensation for Directors
Compensation for Directors who serve concurrently as Executive Officers is described in “② Compensation for
Executive Officers” below.
The basic policy regarding compensation for Directors who are not concurrently serve as Executive Officers is as
follows.

・Highly transparent and objective

・ Improvement of corporate value and compensation must interlock to share awareness of profit with
shareholders.
・Contribute to ensuring and retaining global management team that satisfies accurate ability requirements to
realize corporate vision

For Directors who do not concurrently serve as Executive Officers, the Company pays base salary as fixed
compensation up to the compensation limit as resolved at the General Meeting of Shareholders. For the purpose of
securing diverse and talented human resources and further raising awareness of their roles, the Company grants
some of such Director stock-based compensation (one-yen stock options with service continuity conditions until 2020,
and stock-based compensation where shares are delivered after vesting with service continuity conditions from 2021)
up to the compensation limit as resolved at the General Meeting of Shareholders.
The details of stock-based compensation are described below in “② Compensation for Executive Officers,” “(b)
Details,” “(i) Compensation Philosophy and Elements,” “(2) Stock-based Compensation,” and “<Stock Price-linked
Compensation (Long-Term Incentive (LTI))>.”
The Compensation Committee, which is entrusted with the distribution of individual executive compensation by the
Board of Directors, sets the compensation ratio, level, and mix of compensation for each Director who does not
concurrently serve as Executive Officers, taking into account the appropriate ratios and levels in light of the above-
mentioned basic policies, corresponding to the duties of the Directors. The Compensation Committee is composed
of a majority of Outside officers and is chaired by an Outside Director.

(b) Compensation for Corporate Auditors

For Corporate Auditors, the Company pays only base salary as fixed compensation that is not tied to performance,
from the viewpoint of ensuring their independence. Compensation for Corporate Auditors is determined and paid after
consultations among Corporate Auditors, up to the amount of the compensation limit as resolved at the General
Meeting of Shareholders.

(c) Total Amount of Compensation, etc., by Category of Officer of Filing Company, Total Amount of Compensation, etc.,
and Number of Officers Eligible for Compensation, etc.
Total Amount of Compensation by Type (Millions of yen)
Total
Monetary Compensation Non-monetary Compensation, etc.
Compensa
Directors and Headcou Performance- Long-term incentives tion
Corporate Auditors nt linked
Continuous Service Stock-linked (Millions of
Base Salary Compensation
(Short-term Conditional Stock- Conditional Stock- yen)
incentive) based Compensation based Compensation
Directors
(excluding Outside 2 81 74 280 176 610
Directors)
Outside Directors 4 39 - 107 - 146
Corporate Auditor
(excluding Outside
1 20 - - - 20
Corporate
Auditors)
Outside Corporate
3 12 - - - 12
Auditors
(Note) 1. As of the end of the current consolidated fiscal year, there were 6 Directors (including 5 Outside Directors) and
4 Corporate Auditors (including 3 Outside Corporate Auditors).
2. Compensation for Directors includes compensation for the CEO who also serves as an Executive Officer.
3. Amounts are rounded to the nearest million yen. Therefore, the total amount stated in each column may not
correspond to the amount in the total compensation column.
4. Of the non-monetary compensation in the table, continuous service conditional stock-based compensation
includes Time-based Stock Options (TSOs), which are one-yen stock options, and stock-linked conditional
stock-based compensation includes Performance-based Stock Options (PSOs). The fair value that is
exercisable during the current consolidated fiscal year is calculated based on the closing stock price on the
vesting date and other factors. Performance Share Units (PSUs) and Restricted Stock Units (RSUs) introduced
in the current consolidated fiscal year are not included because there were no units that vested during the

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 current fiscal year. In addition, the amount to be charged to income for the current consolidated fiscal year is
326 million yen for internal Directors and 59 million yen for Outside Directors, which is applicable to stock
options and units that have been granted.
5. For Directors and Corporate Auditors who are non-residents in Japan, the currency of payment is converted
into Japanese yen at the average exchange rate during the current consolidated fiscal year (JPY108.97 = USD
1.00).
6. At the 16th Ordinary General Meeting of Shareholders held on March 29, 2018, that the maximum amount of
compensation for Directors was resolved to be 2 billion yen per year (of which the maximum amount for Outside
Directors was 400 million yen per year). At the conclusion of this Ordinary General Meeting of Shareholders,
the Company had 5 Directors (including 2 Outside Directors).
7. At the 19th Ordinary General Meeting of Shareholders held on March 30, 2021, and the maximum amount of
stock-based compensation where shares are delivered after vesting for Directors was resolved within the
framework of the amount described in Note 6 above and the total number of shares of the Company to be
delivered by Directors was resolved within 2.7 million shares per year (of which, no more than 0.2 million shares
are for Outside Directors). At the conclusion of this Ordinary General Meeting of Shareholders, there was 1
Director (Outside Directors are not eligible for grant) eligible for Performance Share Units (PSUs) and 6
Directors (including 5 Outside Directors) eligible for Restricted Stock Units (RSUs).
8. At the Extraordinary General Meeting of Shareholders held on February 24, 2010, the maximum amount of
compensation for Corporate Auditors was resolved to be within 12 million yen per month. At the conclusion of
this Extraordinary General Meeting of Shareholders, the number of Corporate Auditors was 4 (including 3
Outside Corporate Auditors).

② Compensation for Executive Officers

The following describes the compensation program for our Executive Officers (A Director who also serves as an
Executive Officer and other Executive Officers in this section are collectively referred to as “Executive Officers”). The
composition of our Executive Officers (as of the end of the current consolidated fiscal year) is as follows. An Executive
Officer who is also a Director is remunerated as a Director.
Executive
Name Position and responsibilities Director
Officer
Hidetoshi Shibata Representative Director, President and CEO ✓ ✓
Executive Vice President, in charge of matters relating to
Masahiko Nozaki - ✓
Production & Technology Unit
Executive Vice President, in charge of matters relating to IoT
Sailesh Chittipeddi - ✓
and Infrastructure Business Unit
Senior Vice President, in charge of matters relating to IoT and
Hiroto Nitta - ✓
Infrastructure Business Unit (SoC Business)
Senior Vice President and CTO, in charge of formulation of
Shinichi Yoshioka - ✓
technology strategy and R&D policy for the Company
Senior Vice President, in charge of matters relating to IoT and
Chris Allexandre Infrastructure Business Unit (Global Sales and Corporate - ✓
Digital Marketing)
Senior Vice President, in charge of matters relating to IoT and
Roger Wendelken - ✓
Infrastructure Business Unit (MCU Business)
Senior Vice President and CFO, in charge of matters relating
to Corporate Strategy & Finance Division, Accounting &
Shuhei Shinkai - ✓
Control Division, Procurement Division, Supply Chain
Management Division, and General Affairs Division
Senior Vice President and CLO, in charge of matters relating
Jason Hall - ✓
to Legal Division, and Information Systems Division.
Senior Vice President, in charge of matters relating to
Takeshi Kataoka - ✓
Automotive Solutions Business Unit
Senior Vice President, in charge of matters relating to
Vivek Bhan - ✓
Automotive Solution Business Unit (A&P Business)

This section includes:

・The overview of the compensation program and philosophy behind the design of the program for the current
consolidated fiscal year; and
・The type of compensation, the amount of compensation paid by type, and the total amount of compensation for
each Executive Officer for the current consolidated fiscal year, which is covered by our disclosure.

Executive Officers of the Company have the broadest job responsibilities and policy-making authorities in the
Company.
Executive Officers are responsible for maintaining our business performance and a highly ethical corporate
culture, as well as for ensuring thorough compliance.
Accordingly, the Company aims to ensure transparency in our disclosure regarding executive compensation for
not only our Directors, including the CEO, but also for our core members of the management team.

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 Therefore, the Company includes in our disclosure individual compensation for the CEO, Chief Financial Officer
(CFO), Chief Legal Officer (CLO), Executive Officers in charge of the Automotive Solution Business Unit, and the
IoT and Infrastructure Business Unit, respectively, as well as compensation for Directors with total compensation
of at least 100 million yen that is required to be disclosed by law,

(a) Executive summary

The Company regularly update our compensation program for Executive Officers. The Company views
compensation as one of essential management tools to accelerate the expansion of our business portfolio in the
focus area of Automotive, and IoT and Infrastructure, where the Company has global presence and demonstrate
strong market competitiveness.
The Company designs appropriate and competitive compensation packages as a global company to attract and
retain talented Executive Officers who can drive our business.
Our compensation program is designed to include performance-linked compensation to encourage Executive
Officers to think and act in the best interests of shareholders in both the short- and long-term. A significant portion
of our Executive Officers’ total annual compensation is paid as performance-linked and stock price-linked
compensation. Short-term incentives (STIs), which are performance-linked compensation, are tied to our short-term
performance, and stock price-linked compensation (LTIs) are tied to our long-term performance. The Company also
believes that our compensation program holds our Executive Officers accountable for direct financial performance
and overall market competitiveness of the Company.

<Plans for the Future>

The Company is aiming to update our management platform to align with our business operation, which have
become more globalized in recent years. As one aspect of innovation, the Company plans to update our executive
compensation program in the coming years.
As a first step, since April 2021, we introduced Performance Share Units (PSUs) and Restricted Stock Units
(RSUs), which have been widely used globally, in lieu of one-yen stock options based on performance (Performance-
based Stock Options: PSOs) and the tenure (Time-based Stock Options: TSOs).
When establishing compensation program and setting compensation levels, the Company uses global and
Japanese companies in the semiconductor and other related industries as our peer companies for benchmark
comparisons. Each year, The Company performs a market comparison of our executive compensation packages
and update them based on the results of that comparison. In response to global trends in strengthening corporate
governance at listed companies, The Company intends to continue to update our executive compensation program
in a manner consistent with global corporate practices, and the Company will strive to have our management team
and shareholders recognize that our compensation program is suited to the market and supports a positive impact
on our business performance.

(b) Details
(i) Compensation Philosophy and Elements
The basic philosophy regarding compensation for Executive Officers is as follows.
・Highly linked to company performance, and highly transparent and objective.
・ Improvement of corporate value and compensation must interlock to share awareness of profit with
shareholders.
・Contribute to ensuring and retaining global management team that satisfies accurate ability requirements to
realize corporate vision.
In addition, the current compensation mix consists of the following:
・Base salary as fixed compensation
・ Performance-linked compensation focused on achieving shorter-term financial and strategic objectives
(Short-Term Incentives)
・Stock-based compensation where shares are delivered after vesting as stock price-linked compensation to
motivate management to increase shareholder value (Long-Term Incentives)
The Company believes that our current program is consistent with practices in the global and Japanese
domestic markets, as well as the interests of our stakeholders. The ratio of each type of compensation in the total
compensation is set based on consideration of the appropriate ratio, according to market comparisons, global
trends, and roles and performance of each Executive Officer. In addition, in order to tie long-term performance to
our executive compensation and realize strong alignment between shareholders and management team, the
Company has been promoting a compensation strategy that emphasizes long-term incentives compared to many
Japanese companies, and the Company has set the ratio of stock-based compensation to total compensation as
a majority proportion of total compensation.

(1) Cash Compensation

< Base Salary >
Base salary is the core compensation that reflects the market value of particular roles and responsibilities in
the organization and is a reward for actual responsibilities, competencies, and experience of each Executive
Officer.
This compensation is paid as a fixed amount based on the scope of responsibilities and the expected
contribution to the Company. This compensation is a fundamental element of executive compensation, and is

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 set at a level that invites and ensures retention of competent Executive Officers, and motivate them to drive
global business expansion.
This compensation will be adjusted annually in consideration of market salary increase rates, our
performance and individual performance.

< Performance-linked Compensation (Short-Term Incentive (STI))>

Short-term incentives (STIs) are paid to Executive Officers as motivation and reward for overall company
financial performance as well as assessments of the individual performance of Executive Officers for each
fiscal year. This compensation is a crucial element of our executive compensation program and is focused on
motivating Executive Officers to contribute to the achievement of performance goals.
This compensation is based on one-year company performance, which consists of performance of
Automotive Solution Business Unit, and IoT and Infrastructure Business Unit. In order to evaluate business
expansion and the profitability thereof, this is evaluated by using certain indicators, including the following:
・Revenue (growth rate)
・Operating margin (Non-GAAP basis)
Evaluation indicators and targets, and the amounts paid in response to business performance are set
annually after deliberation by the Compensation Committee.

(2) Stock-based Compensation

<Stock Price-linked Compensation (Long-Term Incentive (LTI))>
Long-Term Incentives (LTIs) are variable compensation with an evaluation period of 1 year or more and are
generally paid in a manner that corresponds to the value earned by shareholders. The role of Long-Term
Incentives is to align economic incentives for Executive Officers with the long-term performance of the
organization and the long-term orientation of our shareholders.
Beginning in 2021, current Long-Term Incentives are paid through Stock-based compensation where shares
are delivered after vesting, and the actual earnings received by Executive Officers are determined based on
stock price growth and total shareholder return (TSR) over a 3-year period.
Specifically, Long-Term Incentives consists of Performance Share Units (PSUs) that determine the number
of units according to our TSR and deliver our shares as well as Restricted Stock Units (RSUs) that are subject
to continued service. Of these, PSUs are designed with TSR added to our performance indicators in order to
tie PSUs more closely to maximizing medium- to long-term corporate value and strengthening awareness and
activities to contribute to our stock price.
The number of units to be granted will be determined based on the simple average of the closing of our
shares price on the Tokyo Stock Exchange during the 3-month period immediately before the month of the
resolution by our Board of Directors, based on the base amount of compensation set for each Executive Officer
in proportion to their responsibilities and percentages. The composition rate of the compensation base amount
for PSUs and RSUs is 50% to 50%.
Meanwhile, in the event that a person eligible for grant falls under any of the causes stipulated by the Board
of Directors, such as certain misconduct stipulated by the Board of Directors, all or part of the unvested units
shall be forfeited. In addition, if, after vesting, it is found that such events or the act causing such events
occurred before vesting, the grantee shall refund, without compensation, all or part of the shares issued in
respect of such units or an amount equivalent thereto, if deemed appropriate by the Company.

Composit
Type Purpose Basis
ion Ratio
Increase Executive Officers’ willingness to
Performance Share Units (PSUs) contribute to stock price growth and TSR 50%
corporate value
Recruit and retain outstanding talented
human resources by reinforcing the linkage
Restricted Stock Units (RSUs) Tenure 50%
between compensation and stock price and
sharing the profits with shareholders

[PSU]
Grantees are granted a number of units calculated according to the following formula:
Number of PSUs = base amount of PSU compensation (before performance evaluation) which our Board of
Directors has determined to grant to each grantee / simple average of the closing price of our shares on the
Tokyo Stock Exchange for the 3 months immediately before the resolution by the Board of Directors
Subsequent to the date the Company determines (in principle, the 3 years anniversary date after the grant
date), we will issue a number of shares equal to such vested number determined as follows, taking into account
the performance requirements for that period.
TSR: Determined by comparing the companies which constitute SOX (Philadelphia
Performance Semiconductor Index) and TOPIX (Tokyo Stock Price Index) as well as a group of companies
Indicators (Renesas Peers) that the Company selects in light of the industry, company size, business
model, etc.

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Performance
Evaluation 3 years from April 1 of the year in which the PSUs were granted
Period
(Average stock price for the 3 months before the end of the performance evaluation period
(*1)
- Average stock price for the 3 months before the day before the commencement date of the
performance evaluation period (*2)
+ Total dividends per share related to dividends of retained earnings with a record date
during the performance evaluation period)
/ Average stock price for the 3 months before the day before the commencement date of the
performance evaluation period (*2)
(*1) This refers to the simple average of the closing price of our shares on the Tokyo Stock
TSR Growth Exchange during the last 3 months of the performance evaluation period.
Rate of the (*2) This refers to the simple average of the closing price of our shares on the Tokyo Stock
Company Exchange for the 3 months before the day before the commencement date of the
performance evaluation period.

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 ・ When our TSR growth rate and the TSR growth rate of SOX-constituent companies are
classified in ascending order, the percentage (SOX calculation rate) is calculated according to
which of the following 1) to 5) is the classification of our TSR growth rate.
・When our TSR growth rate and the TSR growth rate of TOPIX-constituent companies are
classified in ascending order, the percentage (TOPIX calculation rate) is calculated according to
which of the following 1) to 5) is the classification of our TSR growth rate.
・When our TSR growth rate and the TSR growth rate of Renesas Peers are classified in
ascending order, the percentage (Renesas Peers calculation rate) is calculated according to
which of the following 1) to 5) is the classification of our TSR growth rate
・The number obtained by multiplying the number of granted PSUs (rounded up to 100) by the
weighted average of the SOX calculation rate of 25 in 100, the TOPIX calculation rate of 50 in
100, and the Renesas Peers calculation rate of 25 in 100 (hereinafter referred to as the “Base
Calculation Rate”) will be vested as the number of vested PSUs on the date specified by us
(Japan time) (as a general rule, the 3 year anniversary date from the grant date of the PSUs).
Method The number of shares in an amount equal to the number of vested PSUs will be issued to the
of grantee in an amount equal to the number of vested PSUs. However, if our TSR growth rate is
Determin 0% or less, the calculation rate is limited to 100%. Our TSR growth rate shall be determined by
ing the following formula, and the growth rate of TSR of SOX-constituent companies, TOPIX-
Issued constituent companies and Renesas Peers shall be determined by a method similar to our TSR
Shares growth rate.

TSR Vest rate

1) Less than the 25th percentile 0%
2) The 25th percentile or more, and less
Rate calculated as the same percentage increase
than the
between 25% and 50%
50th percentile
3) The 50th percentile or more, and less
Rate calculated as the same percentage increase
than the
between 50% and 75%
75th percentile
4) The 75th percentile or more, and less
Rate calculated as the same percentage increase
than the
between 75% and 100%
90th percentile
5) The 90th percentile or more 100%

[RSU]
Grantees are granted a number of units calculated according to the following formula:
Number of RSUs = the base amount of RSU compensation for the 3 years (however, for Outside Directors,
1 year) that our Board of Directors decided to grant to each grantee / the simple average of the closing price
of our shares on the Tokyo Stock Exchange during the 3 months immediately preceding the month of
resolution by our Board of Directors

As a general rule, one-third of the units vest each year after the grant date (however, for Outside Directors,
all of the units vest on 1 year after the grant date) and the Company will issue a number of shares equal to the
number of vested units.

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(ii) Comparator Group (FY2021 and thereafter, as of the end of the current consolidated fiscal year)
The Compensation Committee reviewed comparable companies in compensation to better understand program
design and competitive compensation levels. Given that the Company is operating our business globally, the
Company selected the comparable companies not only in Japan, but also from the United States and Europe,
both of which are our primary business areas and where the global executive compensation programs are
functioning. The Company referred to the 3 key global regions with an appropriate balance, and set future
performance targets, and established a compensation program with the aim of promoting the achievement of
business and financial indicators both globally and regionally.
Comparator groups in compensation include high-tech companies headquartered in Japan, which are either or
both competitors in human resources acquisition or competitors in the same industry as viewed by investors. At
this stage, the correlation between the revenue level and the executive compensation level is not so strong in
Japan, so the Company has selected Japanese companies from a wide range of revenue levels. The disclosed
personal compensation data of comparable companies in compensation is supplemented by market
compensation data (Mercer LLC survey). For US and Europe, the Company selected semiconductor companies
considering revenue level and market capitalization.
Companies with headquarters, etc. Companies with headquarters, etc. Companies with headquarters, etc.
in Japan in the US in Europe
(Number of comparable companies: (Number of comparable companies: (Number of comparable companies:
12) 13) 4)
Analog Devices Inc.
Sony Group Corporation
Skyworks Solutions Inc.
Toshiba Corporation
Texas Instruments Inc.
Mitsubishi Electric Corporation
Microchip Technology Inc.
Tokyo Electron Limited
Advanced Micro Devices Inc.
Advantest Corporation STMicroelectronics N.V.
Applied Materials, Inc.
DISCO Corporation NXP Semiconductors N.V.
Broadcom Inc.
Hitachi, Limited. Infineon Technologies AG
Lam Research Co., Ltd.
Panasonic Corporation ASML Holding N.V.
Marvell Technology Group Inc.
Olympus Corporation
Maxim Integrated
Trend Micro Incorporated.
Micron Technology, Inc.
DENSO Corporation
Qualcomm Technologies Inc.
TDK Corporation
Xilinx Inc.

(iii) Analysis of Compensation Decisions

(1) Total Compensation
The Compensation Committee reviewed both the overall package and the compensation by type before the
final determination of Executive Officers’ compensation. The target information includes total cash
compensation (base salary and STI), stock-based compensation amount, total compensation amount (base
salary, STI, and stock-based compensation), and the impact of proposed compensation on other compensation
elements. When determining the amount of compensation, compensation mix and incentives for Executive
Officers, the Compensation Committee reviewed each position, role, and status of service, including career
history, in relation to corporate performance and individual performance and our medium- to long-term value
creation, in accordance with our basic philosophy of compensation. The Compensation Committee assessed
whether overall compensation was consistent with the purposes of the program.
Based on this comprehensive review, the Compensation Committee determined that the compensation levels
and compensation mix for the current fiscal year were appropriate.

< Base Salary>

The amount of base salary paid to Executive Officers for the current consolidated fiscal year was determined
after deliberations by the Compensation Committee, taking into account the role of each position and the related
employment markets (Japan or US).

< Performance-linked Compensation (Short-Term Incentive (STI))>

The STI target amount for the Executive Officers in the current consolidated fiscal year that the Company
disclosed is shown below.
STI Base Salary
Percentage of STI
Name (Target amount: (Base amount:
for Base Salary
Millions of yen) Millions of yen)
Hidetoshi Shibata 57 74 76.6%
Shuhei Shinkai 27 24 110.7%
Jason Hall 29 41 71.0%
Takeshi Kataoka 26 23 110.7%
Sailesh Chittipeddi 52 62 85.0%
(Note) The amounts are rounded to the nearest million yen. For overseas officer, the currency for payment
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 is converted into Japanese yen at the average exchange rate during the current consolidated fiscal
year (JPY108.97 = USD 1.00). The percentage of STI for Base salary is calculated based on
amounts before rounding.

For Executive Officers in charge of the Automotive Solution Business Unit and the IoT and Infrastructure
Business Unit, the provisional amount of STI payments is determined based on the revenue (growth rate) and
operating income margin (Non-GAAP basis) of each business unit. Individual calculation methods are applied
to each business unit in order to take into account the characteristics of each business.
For Executive Officers in charge of other business units (Production & Technology Unit and Corporate),
provisional payments are calculated based on the weighted average of the payout rates for both business units
above.
This scheme is the same as the scheme for employees, and it is a mechanism for sharing incentives with
employees.
The final amount of payment will be determined upon deliberations by the Compensation Committee based
on the provisional STI payment determined by the scheme described above, our performance, various
requirements other than financial performance, and other factors for the fiscal year.

<Stock Price-linked Compensation (Long-Term Incentive (LTI))>

The following table shows the grant level for each Executive Officer based on the calculation of the number
of Stock-based Compensation granted to Executive Officers that the Company disclosed in the current
consolidated fiscal year.
Stock-based Compensation
(base amount of grant level: Millions of yen)
Name PSU RSU
Total (base amount of (base amount of
grant level) grant level)
Hidetoshi Shibata 256 128 128
Shuhei Shinkai 64 32 32
Jason Hall 73 37 37
Takeshi Kataoka 59 30 30
Sailesh Chittipeddi 340 170 170
(Note) The table sets forth the base amount of the annual grant for each Executive Officer (amounts are
rounded to the nearest million yen and, for overseas officers, the currency of payment is converted
into Japanese yen at the average exchange rate during the year (JPY108.97 = USD 1.00)). The
actual amounts vested are set forth in the table below under “(iv) Total Amount of Consolidated
Compensation for Each Executive Officer Subject to Disclosure.”

The compensation mix for Executive Officers disclosed by the Company for the current consolidated fiscal
year is shown below.
The percentage of the variable portion is greater than the current general situation of executive compensation
in Japan because it rewards Executive Officers for company performance and individual performance.

(Note) Each compensation element is based on a target base amount before reflecting performance (as of
December 31, 2021)

(2) Performance Evaluation for the Current Consolidated Fiscal Year (Non-GAAP Basis)

Revenues and operating income margin (Non-GAAP basis) both increased during the current consolidated
fiscal year.
Total shareholder return grew 0.4% on a 3-year average, outpacing the median of TOPIX constituent

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 companies and below the median of SOX-constituent companies.

Revenue
・Our revenue increased 38.9% in FY2021 compared with the previous fiscal year.
・Revenue by business unit is as follows:
- Revenue in the Automotive Solution Business Unit in FY2021 increased 35.6% compared with the previous
fiscal year.
- Revenue in the IoT and Infrastructure Unit in FY2021 increased 41.8% compared with the previous fiscal
year.

Operating margin (Non-GAAP basis)

・Our operating margin (Non-GAAP basis) in FY2021 increased 10.6 pts compared with the previous fiscal
year.
・Operating margin by business unit (Non-GAAP basis) is as follows:
- Operating margin (Non-GAAP basis) in the Automotive Solution Business Unit in FY2021 increased 12.3
pts compared with the previous fiscal year.
- Operating margin (Non-GAAP basis) in the IoT and Infrastructure Business Unit in FY2021 increased 7.7
pts compared with the previous fiscal year.

Total shareholder return (TSR)

The 3-year average of TSR growth rate used to evaluate the performance of PSOs in FY2021 was 0.4%,
higher than the median of TOPIX constituent companies and lower than the median of SOX-constituent
companies.

Overview of performance results

1 year 3 years
Revenue 38.9%
Automotive Solution Business Unit 35.6%
IoT and Infrastructure Business Unit 41.8%
Operating margin (Non-GAAP basis) 10.6pts
Automotive Solution Business Unit 12.3pts
IoT and Infrastructure Business Unit 7.7pts
Total Shareholder Return (TSR) 0.4%
(Note)
(*) Revenue and Operating Margin (Non-GAAP basis): Disclosed results on a Group-consolidated and Non-
GAAP basis
(*) TSR performance evaluation period: Apr. 1, 2018 to Mar. 31, 2021
(*) TSR calculation:
(Average stock price for the 3 months before the end of the performance evaluation period
- Average stock price for the 3 months before the day before the commencement date of the performance
evaluation period
+ Total dividends per share related to dividends of retained earnings with a record date during the
performance evaluation period)
/ Average stock price for the 3 months before the day before the commencement date of the performance
evaluation period
(*) The Company does not pay dividends from retained earnings during the performance evaluation period.

(3) Individual Performance Evaluation Results (MBO (Management By Objective))

The CEO’s performance was evaluated by the Nomination Committee for his overall contribution to our
performance.
For Executive Officers that the Company disclosed other than the CEO, the CEO considered the elements
described below in evaluating individual performance.
・Mr. Shuhei Shinkai serves as CFO and the CEO focused on our financial management.
・Mr. Jason Hall is the CLO and the CEO focused on the operational performance of legal management and
IT.
・Mr. Takeshi Kataoka serves as General Manager of the Automotive Solution Business Unit and the CEO
focused on the financial performance and strategic position of the business unit.
・Mr. Sailesh Chittipeddi serves as General Manager of the IoT and Infrastructure Business Unit and the CEO
focused on the financial performance and strategic positioning of the business unit.

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 (iv) Total Amount of Consolidated Compensation for each Executive Officer Subject to Disclosure

Amount of Compensation (Millions of yen)

Performance- Stock Price-linked Compensation Total
linked Compensatio
Name Compensation Long-term Incentives (LTI) n
Base salary Stock-linked (Millions of
Continuous Service
Short-term Conditional Stock- yen)
Conditional Stock-
Incentive (STI) based
based Compensation
Compensation
Hidetoshi Shibata 74 74 151 17 316
Shuhei Shinkai 23 35 36 2 96
Jason Hall 40 38 49 4 132
Takeshi Kataoka 17 22 15 2 56
Sailesh Chittipeddi 61 80 296 0 438
(Note) 1. Amounts are rounded to the nearest million yen. Therefore, the total of the amounts listed in each column may
not correspond to the amount in the total compensation column.
2. Stock-based compensation represents amounts vested in the current consolidated fiscal year.
3. An Executive Officer who is also Director (the CEO) are compensated as a Director.
4. In addition to the compensation described above, with respect to Mr. Jason Hall, the Company paid for various
benefits related to secondment from a U.S. subsidiary to the Company and the associated partial
reimbursement of income tax.
5. For overseas officers, the currency for payment is converted into Japanese yen at the average exchange rate
during the current consolidated fiscal year (JPY108.97 = USD 1.00).

(v) Benefits and Welfare

Executive Officers are eligible to receive various benefits equal to those of our other employees, excluding
severance benefits. Those benefits include social insurance, such as health insurance and welfare pensions,
accident insurance, commuting expenses, and rights to use group insurance.

(vi) Pay Ratio (Compensation Ratio)

The median of total annual compensation of all employees (other than the CEO) for our current consolidated
fiscal year was 5 million yen. The CEO’s total annual income was 316 million yen. Based on this information, the
ratio of the CEO’s total annual compensation to the median of total annual compensation of all employees was
approximately 63 to 1.
The following methodologies and significant assumptions were used to determine the median of total annual
compensation of all of our employees and to calculate the total annual compensation of the median employee:
・December 31, 2021 was selected as the date (record date) for determining the median employee.
・Our employees as of the record date consisted of approximately 19,000 employees working for the Company
and its consolidated subsidiaries (excluding those on leave that are not expected to return to work and those
from Dialog).
・To determine the median employee, the Company used information about base salaries and incentives paid to
all employees. The monthly salary is calculated on an annualized basis for full-time employees who have a
service period of less than 1 fiscal year or who had a non-paid holiday during a 1-year period.
The CEO’s total annual compensation is the amount shown in the column “(iv) Total Consolidated Compensation
for Each Executive Officer Subject to Disclosure” above (Base salary + STI + LTI).

③ Voluntary Compensation Committee

To ensure the appropriateness of compensation and transparency of the decision-making process, the Company
has established a Voluntary Compensation Committee as an advisory body to the Board of Directors. The
Compensation Committee is composed of a majority of Outside Officers and is chaired by an Outside Director.
The compensation level, compensation structure, and the setting of performance-linked compensation targets for
Directors and Executive Officers are decided by the Voluntary Compensation Committee, under which the Board of
Directors has discretion in allocating individual compensation for officers. Proposals to the General Meeting of
Shareholders (such as limits on the amount of compensation for Directors) and the granting of stock-based
compensation are decided by the Board of Directors after deliberations by the Compensation Committee.
Compensation Committee members are as follows:
・Chairman: Selena Loh Lacroix (Outside Director)
・Member: Hidetoshi Shibata (President and CEO)
・Member: Noboru Yamamoto (Outside Director)
・Member: Tomoko Mizuno (Outside Corporate Auditor)
During the current consolidated fiscal year, the Compensation Committee held a total of six meetings.

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(5) Status of Holding of Shares
① Standards and concept for classification of investment shares
The Company classifies investment shares held solely for the purpose of receiving profits from changes in the value
of shares or dividends on shares as investment shares held for pure investment, and investment shares held for other
purposes are classified as investment shares held for purposes other than pure investment.

② Investment shares held for purposes other than pure investment

a. Number of issues and amount recorded on the balance sheet
Number of Total Balance Sheet
Issues Amount (Millions of yen)
Unlisted shares 8 15
Shares other than
- -
unlisted shares
(Shares for which number of shares increased in the current fiscal year)
Not applicable.
(Shares for which the number of shares decreased in the current fiscal year)
Not applicable.
b. Information on the number of shares, amount recorded on the balance sheet and related matters of each type of
specified investment shares and deemed held shares.
Not applicable.
③ Investment shares held for the purpose of pure investment
Not applicable.
④ Changes in the purpose of holding investment shares from pure investment to purposes other than pure investment
during the current fiscal year
Not applicable.
⑤ Change in the purpose of holding investment shares from the purpose other than pure investment to the purpose of
pure investment during the current fiscal year
Not applicable.

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V．Accounting Status
1. Basis of Preparation of the Consolidated Financial Statements
(1) The consolidated financial statements of Renesas Electronics Corporation (hereafter “the Company”) and its
consolidated subsidiaries (hereafter “the Group”) have been prepared in accordance with International Financial
Reporting Standards (hereafter “IFRS”) pursuant to the provisions of Article 93 of the “Ordinance on Terminology,
Forms and Preparation Methods of Consolidated Financial Statements” (Ministry of Finance Ordinance No. 28, 1976,
hereafter “Ordinance on Consolidated Financial Statements”).

(2) The non-consolidated financial statements of the Company were prepared in accordance with the Ministry of Finance
Ordinance No. 59, 1963, “Ordinance on Terminology, Forms and Preparation Methods of Consolidated Financial
Statements, etc.” (hereafter “Ordinance on Financial Statements”).
As a company submitting financial statements prepared in accordance with special provisions of the Ordinance of
Financial Statements, the Company prepares its financial statements in accordance with Article 127 of the Ordinance
of Financial Statements.

(3) In the consolidated financial statements and the non-consolidated financial statements, figures are presented by
rounding them to the nearest million yen.

2. Audit Certification
The consolidated financial statements for the fiscal year ended December 31, 2021 (from January 1, 2021 to December
31, 2021) and the non-consolidated financial statements for the fiscal year ended December 31, 2021 (from January 1,
2021 to December 31, 2021) were audited by PricewaterhouseCoopers Aarata LLC in accordance with Article 193-2,
Section 1, of the Financial Instruments and Exchange Act.

3. Special Measures for Preparing Fairly Stated Financial Statements

These measures involve attaining a thorough understanding of accounting standards and developing a system for
addressing changes made to these standards. To this end, the Company has registered with the Financial Accounting
Standards Foundation, and participates in seminars.

4. Development of a System to Appropriately Prepare Consolidated Financial Statements Based on IFRS

To appropriately prepare its consolidated financial statements in accordance with IFRS, the Company obtains press
releases and accounting standards issued by the International Accounting Standards Board as required to understand the
latest standards and analyze the impact. The Company has also prepared the Group accounting policies or “Global Rule
Book” in accordance with IFRS and formulates accounting treatments based on the Group accounting policies. In addition,
the Company makes efforts to accumulate in-house expertise by participating in seminars, etc. hosted by the Financial
Accounting Standards Foundation and audit corporations, etc.

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1. Consolidated Financial Statements
(1) Consolidated Financial Statements
(i) Consolidated Statement of Financial Position
(In millions of yen)
As of December 31, As of December 31,
Notes
2020 2021
Assets
Current assets
Cash and cash equivalents 8 219,786 221,924
Trade and other receivables 9, 33 82,318 140,478
Inventories 10 89,761 137,925
Other current financial assets 16, 33 605 737
Income taxes receivable 2,190 4,395
Other current assets 11 8,162 12,352
Total current assets 402,822 517,811

Non-current assets
Property, plant and equipment 12, 14, 15, 19 187,354 195,729
Goodwill 7, 13, 15 590,459 1,234,600
Intangible assets 13, 15 364,764 371,969
Other non-current financial assets 16, 33 18,101 34,633
Deferred tax assets 17 40,600 42,414
Other non-current assets 11 4,885 9,091
Total non-current assets 1,206,163 1,888,436
Total assets 1,608,985 2,406,247

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 (In millions of yen)
As of December 31, As of December 31,
Notes
2020 2021
Liabilities and equity
Liabilities
Current liabilities
Trade and other payables 18, 33, 38 114,235 204,330
Bonds and borrowings 19, 33 93,181 121,105
Other current financial liabilities 20, 33 4,036 11,505
Income taxes payable 10,337 22,050
Provisions 21 6,383 11,185
Other current liabilities 11 58,873 77,235
Total current liabilities 287,045 447,410

Non-current liabilities
Trade and other payables 18, 33 25,177 15,100
Bonds and borrowings 19, 33 586,563 692,983
Other non-current financial liabilities 20, 33 10,241 11,536
Income taxes payable 4,084 3,792
Retirement benefit liability 22 30,012 27,926
Provisions 21 3,033 3,795
Deferred tax liabilities 17 38,680 36,229
Other non-current liabilities 11 4,489 6,016
Total non-current liabilities 702,279 797,377
Total liabilities 989,324 1,244,787

Equity
Share capital 23 28,971 147,133
Capital surplus 23 208,253 337,989
Retained earnings 23 449,975 578,017
Treasury shares 23 (11) (11)
Other components of equity (70,487) 95,015
Total equity attributable to owners of parent 616,701 1,158,143
Non-controlling interests 2,960 3,317
Total equity 619,661 1,161,460
Total liabilities and equity 1,608,985 2,406,247

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 (ii) Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income
Consolidated Statement of Profit or Loss
(In millions of yen)
The year ended The year ended
Notes
December 31, 2020 December 31, 2021
Revenue 6, 24 715,673 994,418
Cost of sales 37, 38 (379,984) (498,017)
Gross profit 335,689 496,401

Selling, general and administrative

25, 37 (266,268) (307,698)
expenses
Other income 26 4,036 8,031
Other expenses 27 (8,315) (13,133)
Operating profit 65,142 183,601

Finance income 28 7,623 4,140

Finance costs 28 (7,549) (35,278)
Profit before tax 65,216 152,463
Income tax expense 17 (19,490) (25,051)
Profit 45,726 127,412

Profit attributable to
Owners of parent 45,626 127,261
Non-controlling interests 100 151
Profit 45,726 127,412

Earnings per share 30

Basic earnings per share (yen) 26.54 68.96
Diluted earnings per share (yen) 25.97 67.44

- 85 -
 Consolidated Statement of Comprehensive Income
(In millions of yen)
The year ended The year ended
Notes
December 31, 2020 December 31, 2021

Profit 45,726 127,412

Other comprehensive income

Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans (334) 902
Equity instruments measured at fair value
(330) (311)
through other comprehensive income
Total of items that will not be reclassified to
(664) 591
profit or loss
Items that may be reclassified subsequently to
profit or loss
Exchange differences on translation of foreign
(64,290) 169,312
operations
Cash flow hedges ― (4,022)
Cost of hedges ― (153)
Total of items that may be reclassified
(64,290) 165,137
subsequently to profit or loss
Total other comprehensive income 29 (64,954) 165,728
Total comprehensive income (19,228) 293,140

Comprehensive income attributable to

Owners of parent (19,239) 292,783
Non-controlling interests 11 357
Total comprehensive income (19,228) 293,140

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 (iii) Consolidated Statement of Changes in Equity
The year ended December 31, 2021
(In millions of yen)
Equity attributable to owners of parent
Other components of equity
Equity
Notes instruments
Share capital Capital surplus Retained earnings Treasury shares Share acquisition Remeasurements measured at fair
of defined benefit value through
rights
plans other
comprehensive
income
Balance as of
22,213 201,588 403,857 (11) 16,053 ― (1,131)
January 1, 2020
Profit ― ― 45,626 ― ― ― ―
Other comprehensive
― ― ― ― ― (334) (330)
income
Total comprehensive
― ― 45,626 ― ― (334) (330)
income
Issuance of new
23 6,758 6,665 ― ― ― ― ―
shares
Share-based payment
32 ― ― ― ― 1,062 ― ―
transactions
Transfer to retained
― ― 492 ― (1,156) 334 330
earnings
Total transactions with
6,758 6,665 492 ― (94) 334 330
owners
Balance as of
28,971 208,253 449,975 (11) 15,959 ― (1,131)
December 31, 2020

Equity attributable to owners of parent

Other components of equity
Total equity Non-controlling
Notes Exchange Total equity
attributable to interests
differences on
Cash flow hedges Cost of hedges Total owners of parent
translation of
foreign operations
Balance as of
(21,114) ― ― (6,192) 621,455 2,949 624,404
January 1, 2020
Profit ― ― ― ― 45,626 100 45,726
Other comprehensive
(64,201) ― ― (64,865) (64,865) (89) (64,954)
income
Total comprehensive
income
(64,201) ― ― (64,865) (19,239) 11 (19,228)

Issuance of new
23 ― ― ― ― 13,423 ― 13,423
shares
Share-based payment
transactions
32 ― ― ― 1,062 1,062 ― 1,062
Transfer to retained
earnings
― ― ― (492) ― ― ―

Total transactions with

owners
― ― ― 570 14,485 ― 14,485

Balance as of
(85,315) ― ― (70,487) 616,701 2,960 619,661
December 31, 2020

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 The year ended December 31, 2021
(In millions of yen)
Equity attributable to owners of parent
Other components of equity
Equity
Notes instruments
Share capital Capital surplus Retained earnings Treasury shares Share acquisition Remeasurements measured at fair
of defined benefit value through
rights
plans other
comprehensive
income
Balance as of
January 1, 2021
28,971 208,253 449,975 (11) 15,959 ― (1,131)

Profit ― ― 127,261 ― ― ― ―
Other comprehensive
― ― ― ― ― 902 (311)
income
Total comprehensive
― ― 127,261 ― ― 902 (311)
income
Issuance of new
23 118,162 117,320 ― ― ― ― ―
shares
Share-based payment
32 ― 12,416 ― ― (2,843) ― ―
transactions
Transfer to retained
― ― 781 ― 154 (902) (33)
earnings
Reclassification
to non-financial 7 ― ― ― ― ― ― ―
assets
Total transactions with
118,162 129,736 781 ― (2,689) (902) (33)
owners
Balance as of
147,133 337,989 578,017 (11) 13,270 ― (1,475)
December 31, 2021

Equity attributable to owners of parent

Other components of equity
Total equity Non-controlling
Notes Exchange Total equity
attributable to interests
differences on
Cash flow hedges Cost of hedges Total owners of parent
translation of
foreign operations
Balance as of
January 1, 2021
(85,315) ― ― (70,487) 616,701 2,960 619,661

Profit ― ― ― ― 127,261 151 127,412

Other comprehensive
169,106 (4,022) (153) 165,522 165,522 206 165,728
income
Total comprehensive
169,106 (4,022) (153) 165,522 292,783 357 293,140
income
Issuance of new
23 ― ― ― ― 235,482 ― 235,482
shares
Share-based payment
32 ― ― ― (2,843) 9,573 ― 9,573
transactions
Transfer to retained
― ― ― (781) ― ― ―
earnings
Reclassification
to non-financial 7 ― 3,604 ― 3,604 3,604 ― 3,604
assets
Total transactions with
― 3,604 ― (20) 248,659 ― 248,659
owners
Balance as of
83,791 (418) (153) 95,015 1,158,143 3,317 1,161,460
December 31, 2021

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 (iv) Consolidated Statement of Cash Flows
(In millions of yen)
The year ended The year ended
Notes
December 31, 2020 December 31, 2021
Cash flows from operating activities
Profit before tax 65,216 152,463
Depreciation and amortization 141,527 136,496
Impairment losses 2,070 135
Finance income and finance costs 5,221 6,973
Share-based payment expenses 14,564 14,899
Foreign exchange loss (gain) (3,780) 22,861
Loss (gain) on sales of property, plant and
(717) (5,557)
equipment, and intangible assets
Decrease (increase) in inventories 79 (5,552)
Decrease (increase) in trade and other
1,228 (9,237)
receivables
Decrease (increase) in other financial assets (7,413) (9,699)
Increase (decrease) in trade and other
10,192 50,154
payables
Increase (decrease) in retirement benefit
194 (2,572)
liability
Increase (decrease) in provisions (1,713) 3,847
Increase (decrease) in other current liabilities 3,675 (20,435)
Other 2,931 (4,466)
Subtotal 233,274 330,310
Interest received 307 242
Dividends received 240 300
Income taxes paid (9,932) (23,468)
Net cash flows from operating activities 223,889 307,384

Cash flows from investing activities

Purchase of property, plant and equipment (22,261) (36,938)
Proceeds from sales of property, plant and
960 8,408
equipment
Purchase of intangible assets (15,925) (15,408)
Purchase of other financial assets (568) (1,416)
Proceeds from sales of other financial assets 430 579
Payments for acquisitions of subsidiaries 7 ― (614,816)
Other (2,799) (3,535)
Net cash flows from investing activities (40,163) (663,126)

Cash flows from financing activities

Proceeds from short-term borrowings 31 ― 270,000
Repayments of short-term borrowings 31 ― (270,000)
Proceeds from long-term borrowings 31 ― 240,000
Repayments of long-term borrowings 31 (93,295) (262,777)
Proceeds from issuance of bonds 31 ― 154,359
Proceeds from issuance of shares 23 ― 223,799
Payments for share issuance costs ― (1,179)
Repayments of lease liabilities 31 (4,840) (4,571)
Interest paid (6,264) (8,682)
Other (71) (34)
Net cash flows from financing activities (104,470) 340,915

- 89 -
Effect of exchange rate changes on cash and
(5,938) 16,965
cash equivalents
Net increase (decrease) in cash and cash
73,318 2,138
equivalents
Cash and cash equivalents at beginning of the
8 146,468 219,786
period
Cash and cash equivalents at end of the period 8 219,786 221,924

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Notes to Consolidated Financial Statements
1. Reporting Entity
Renesas Electronics Corporation (hereafter “the Company”) is a public company established under the Companies Act
of Japan and domiciled in Japan. The accompanying consolidated financial statements of the Company and its
consolidated subsidiaries (hereafter “the Group”) are composed of the Company, its subsidiaries and interests of the
Group in its associates, with December 31, 2021 as the closing date. The Group engages in research, design,
development, manufacturing, sales and services related to various kinds of semiconductors as a manufacturer specializing
in semiconductors. For details of the Group’s major business, please refer to “Note 6. Business Segments.”
The consolidated financial statements for the year ended December 31, 2021 were approved on March 30, 2022 by
Hidetoshi Shibata, President and CEO, and Shuhei Shinkai, Executive Vice President, Member of the Board and CFO.

2. Basis for Preparation

(1) Compliance with IFRS
Because the Group meets the requirements for “Specified Companies Complying with Designated International
Accounting Standards” stated in Article 1-2 of Ordinance on Consolidated Financial Statements, the Group has adopted
the provisions of Article 93 of the Ordinance. The consolidated financial statements of the Group have been prepared
in accordance with IFRS.

(2) Basis of measurement

The consolidated financial statements of the Group have been prepared based on the accounting policies separately
described in “Note 3. Significant Accounting Policies.” Assets and liabilities are measured at a historical cost basis
unless otherwise stated.

(3) Functional currency and presentation currency

The consolidated financial statements are presented in Japanese yen (rounded to the nearest million yen), which is
the functional currency of the Company.

(4) Changes in accounting policy

(Consolidated Statement of Cash Flows)
Within “Cash flows from operating activities” category, “Foreign exchange loss (gain)” and “Decrease (increase) in
other financial assets,” which were disclosed in “Other” for the prior fiscal year, have been presented separately from
the current fiscal year due to the increase in its materiality. Also, Loss (gain) on sales and valuation of investment
securities, which was disclosed in “Other” for the prior fiscal year, has been classified to "Finance income and finance
costs" from the current fiscal year.
In order to reflect those changes in presentation, Consolidated Statement of Cash Flows for the prior fiscal year has
been reclassified. Consequently, within “Cash flows from operating activities” category, (10,035) million yen of “Other”
has been classified to (3,780) million yen of “Foreign exchange loss (gain)”, (7,413) million yen of “Decrease (increase)
in other financial assets”, 2,931 million yen of “Other” and (1,773) million yen of "Finance income and finance costs."

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3. Significant Accounting Policies
The significant accounting policies of the Group are as follows and are applied to all the periods presented in the
consolidated financial statements.

(1) Basis of consolidation

A. Subsidiaries
Subsidiaries are entities controlled by the Group. Control refers to a case in which the Group has power over an
entity, is exposed to variable returns from involvement with the entity and has the ability to affect those returns through
its power over the entity.
The financial statements of subsidiaries are included in the consolidated financial statements from the date when
control is obtained until the date when control is lost. In the event that the Group disposes of some of its ownership
interest in a subsidiary that does not result in a loss of control, the change in ownership interest of the Group is
accounted for as an equity transaction, and the difference between the adjustment of non-controlling interests and the
fair value of the consideration is directly recognized in equity as equity attributable to owners of parent.
If the closing dates of a subsidiary and that of the consolidated financial statements are different, financial statements
prepared with a provisional closing date, which is same as that of consolidated financial statements, are used.

B. Associates
Associates are entities over which the Group has a significant influence over the decisions on financial and operating
policies but does not have control. Investments in associates are accounted for using the equity method.
Investments in associates are initially recognized at cost. Ownership interests of the Group in profit or loss and other
comprehensive income of the associate from the date when the Group obtains significant influence until the date when
the Group loses significant influence are recognized as changes in the amount of investments in associates.

C. Transactions eliminated on consolidation

Inter-company balances of receivables and payables, transactions and unrealized gains or losses resulting from
inter-company transactions are eliminated on consolidation.

(2) Business combinations

Business combinations are accounted for using the acquisition method. Consideration transferred in a business
combination is measured as the sum of the acquisition-date fair value of the assets transferred, liabilities assumed,
and equity instruments issued by the Company in exchange for control over the acquiree.
Any excess of the consideration for acquisition, the non-controlling interests in the acquiree and the fair value of
assets of the acquiree that the acquirer previously held over the net amount of identifiable assets and liabilities as of
the date of acquisition is recognized as goodwill. Conversely, if the consideration for acquisition is lower than the net
amount of identifiable assets and liabilities as of the date of acquisition, it is immediately recognized in profit or loss.
Acquisition-related costs are recognized in profit or loss. The additional acquisition of non-controlling interests after
obtaining control is accounted for as an equity transaction, and no corresponding goodwill is recognized.
If the initial accounting treatment of a business combination is not completed by the end of the fiscal year when the
business combination took place, provisional amounts for the items for which accounting is incomplete are reported,
and such provisional amounts that were recognized as of the date of acquisition are adjusted retrospectively during
the measurement period within one year from the date of acquisition.

(3) Foreign currency translation

A. Functional currency and presentation currency
The financial statements of the Group entities are prepared in their respective functional currency. The consolidated
financial statements of the Group are presented in Japanese yen, which is the functional currency of the Company.

B. Foreign currency transactions

Foreign currency transactions are translated into the functional currency at the spot exchange rate or a rate
approximate to the spot exchange rate on the date of the transaction. Monetary items denominated in a foreign
currency at the end of the reporting period are translated into the functional currency using the closing rate, while
non-monetary items denominated in a foreign currency that are measured at historical cost are translated using the
exchange rate in effect on the date of the initial transaction, and those that are measured at fair value are translated
using the exchange rate in effect on the date when the fair value was calculated.
Exchange differences from translation or settlement are recognized in profit or loss during the period when they
arise. However, exchange differences arising from equity instruments and cash flow hedges measured through other
comprehensive income are recognized in other comprehensive income.

C. Foreign operations
In preparing the consolidated financial statements, the assets and liabilities of a foreign operation are translated
into Japanese yen at the exchange rate as of the closing date of the consolidated financial statements, and profit or
loss and cash flows of the foreign operation are translated into Japanese yen at the exchange rate on the date of the
transaction or the average exchange rate for the period that is approximate to the exchange rate on the date of the
transaction. Exchange differences are recognized in other comprehensive income, and the cumulative amount thereof
is recognized in other components of equity.
On disposal of the entire ownership interest in a foreign operation or part of the interest that results in a loss of
control or significant influence, the exchange differences of the foreign operation that were recognized in other
comprehensive income and accumulated in equity are reclassified from equity to profit or loss when the related gains
or losses on disposal are recognized.

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(4) Financial instruments
A. Financial assets other than derivatives
(a) Initial recognition and measurement
Trade and other receivables are initially recognized at their transaction price on that date, and all other financial
assets are initially recognized on the date of the transaction when the Company becomes the contracting party to
the financial assets.
At the time of initial recognition, financial assets are classified as financial assets measured at amortized cost or
financial assets measured at fair value.
(i) Financial assets measured at amortized cost
Financial assets are classified as financial assets measured at amortized cost if both of the following conditions
are met or otherwise classified as financial assets measured at fair value.
• Assets are held within a business model that aims to hold assets to collect contractual cash flows.
• The contract terms of the financial assets give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
(ii) Financial assets measured at fair value through other comprehensive income
• Debt instruments measured at fair value through other comprehensive income
If both of the following conditions are met, financial assets are classified as debt instruments measured at fair
value through other comprehensive income.
- Assets are held within a business model whose objective is achieved by both the collection and sale of
contractual cash flows.
- The contract terms of the financial assets give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
• Equity instruments measured at fair value through other comprehensive income
Of financial assets measured at amortized cost, or financial assets other than debt instruments measured at
fair value through other comprehensive income, when an irrevocable election at the time of initial recognition
is made, subsequent changes in fair value are recognized in other comprehensive income and such equity
instruments are classified as financial assets measured at fair value through other comprehensive income.
(iii) Financial assets measured at fair value through profit or loss
Financial assets that do not meet the criteria for either (i) or (ii) above are classified into financial assets
measured at fair value through profit or loss.

Financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value
through profit or loss, transaction costs that are directly attributable to the acquisition of the financial assets.
Transaction costs for financial assets measured at fair value through profit or loss are recognized in profit or loss.

(b) Subsequent measurement

After the initial recognition, financial assets are measured as follows according to their classification.
(i) Financial assets measured at amortized cost
Financial assets measured at amortized cost are measured at amortized cost using the effective interest method.
(ii) Financial assets measured at fair value through other comprehensive income
・Debt instruments measured at fair value through other comprehensive income
The amount of changes in the fair value of debt instruments measured at fair value through other
comprehensive income is recognized in other comprehensive income, except for impairment gains or losses
and foreign exchange gain or loss, until the financial assets are derecognized. If the financial assets are
derecognized, gains or losses accumulated in other comprehensive income are reclassified to profit or loss.
・Equity instruments measured at fair value through other comprehensive income
The amount of changes in the fair value of equity instruments measured at fair value through other
comprehensive income is recognized in other comprehensive income. If the financial assets are derecognized,
or if the fair value has declined significantly, gains or losses accumulated in other comprehensive income are
directly reclassified to retained earnings. Dividend income from the financial assets is recognized as finance
income in profit or loss.
(iii) Financial assets measured at fair value through profit or loss
Financial assets measured at fair value through profit or loss are measured at fair value after the initial
recognition, and changes in fair value are recognized in profit or loss.

(c) Impairment of financial assets

For impairment of financial assets measured at amortized cost, the Group recognizes an allowance for expected
credit losses of financial assets. On each reporting date, the Group assesses whether the credit losses of the
financial instruments have increased significantly subsequent to the initial recognition.
If the credit losses of financial instruments have not increased significantly after the initial recognition, the loss
allowance of the financial instruments is measured at the amount of 12-month expected credit losses, and if the
credit losses of the financial instruments have increased significantly after the initial recognition, the loss allowance
of the financial instruments is measured at the amount of lifetime expected credit losses.
However, for trade receivables, etc., the loss allowance is always measured at the amount of lifetime expected
credit losses.
Expected credit losses of the financial instruments are estimated in a way that reflects:
• An unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes
• The time value of money
• Reasonable and supportable information that is available without undue cost or effort at the reporting date

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 about past events, current conditions and forecasts of future economic conditions
Changes in the amount of the measurement are recognized in profit or loss.

(d) Derecognition
The Group derecognizes financial assets if the contractual rights to the cash flows from the financial assets
expire, or if substantially all risks and rewards associated with ownership of the financial assets are transferred as
a result of assigning the contractual right to receive cash flows from the financial assets.

B. Financial liabilities other than derivatives

(a) Initial recognition and measurement
At the time of initial recognition, financial liabilities are classified as financial liabilities measured at amortized
cost or financial liabilities measured at fair value through profit or loss. Although all financial liabilities are initially
measured at fair value, financial liabilities measured at amortized cost are measured at an amount obtained by
deducting directly attributable transaction costs.

(b) Subsequent measurement

(i) Financial liabilities measured at amortized cost
Financial liabilities measured at amortized cost are measured at amortized cost using the effective interest
method.
(ii) Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss are measured at fair value after the initial
recognition, and the changes are recognized in profit or loss.

(c) Derecognition
The Group derecognizes financial liabilities when they are extinguished, for example when then obligations
specified in the contract are discharged, cancelled or expired.

C. Derivatives and hedge accounting

The Group holds derivative financial instruments for the purpose of hedging the risk of exchange rate fluctuations,
etc. The Group has a policy of not conducting speculative derivative transactions.
Derivatives are initially recognized at fair value, and related transaction costs are recognized in profit or loss when
they are incurred. After the initial recognition, derivatives are remeasured at fair value, and changes in the fair value
are accounted for as described below, depending on whether the derivative financial instruments that are designated
as hedging instruments meet the requirements for hedge accounting. The Group designates the derivatives that meet
the requirements for hedge accounting as hedging instruments and applies hedge accounting. In addition, at the
inception of a hedge, the Group formally documents the risk management objective, the relationship between hedging
instruments and the hedged items, along with strategies when executing hedging transactions, and the method of
assessing hedge effectiveness.

(i) Cash flow hedges

Of gains or losses from hedging instruments, the effective portion of the hedge is recognized in other
comprehensive income, and the ineffective portion is recognized in profit or loss.
The amount of hedging instruments that is recorded in other comprehensive income is reclassified to profit or
loss at the time when the underlying hedged transactions affect profit or loss. If the hedged items give rise to the
recognition of non-financial assets or non-financial liabilities, the amount that is recognized in other comprehensive
income is reclassified as an adjustment to the initial carrying amount of non-financial assets or non-financial
liabilities.
For cash flow hedges other than the above, the amount is reclassified from other comprehensive income to
profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or
loss. However, if the accumulated amount is a loss and if all or part of the loss is not expected to be recovered in
the future, the amount that is not expected to be recovered is immediately reclassified to profit or loss.
When hedge accounting is terminated, this accumulated amount remains in other comprehensive income until
the expected future cash flows occur, and if the forecast transaction is no longer expected to occur, this amount
is immediately reclassified to profit or loss.

(ii) Derivatives that do not meet requirements for hedge accounting

Changes in fair value are recognized in profit or loss.

(5) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, deposits that can be withdrawn at any time and short-term
investments with a maturity of 3 months or less when purchased that can be easily converted to cash and are subject
to an insignificant risk of changes in value.

(6) Inventories
The acquisition cost of inventories comprises all costs of purchase, costs of conversion and all other costs incurred
in bringing the inventories to their present location and condition.
After the initial recognition, inventories are measured at the lower of cost and net realizable value, but if cost exceeds
net realizable value, the inventories are written down to net realizable value. The net realizable value is calculated by
deducting the estimated costs of completion and the estimated costs necessary to make the sale from the estimated
selling price in the ordinary course of business.

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 The cost is also calculated using the following methods:
Merchandise and finished goods
Custom-made products: Specific identification method
Mass products: Average method
Work in progress
Custom-made products: Specific identification method
Mass products: Average method
Raw materials and supplies: Mainly average method

(7) Property, plant and equipment (other than leased assets)

The acquisition cost of property, plant and equipment includes costs directly related to the acquisition of assets,
dismantling, disposal and restoration costs and borrowing costs that meet the requirements for capitalization.
The cost model is used in the measurement of property, plant and equipment, and they are presented at the carrying
value obtained by deducting accumulated depreciation and accumulated impairment losses from the acquisition cost.
Except for land and construction in progress, the acquisition cost of each asset after deducting the residual value is
depreciated over the estimated useful life using the straight-line method.
The estimated useful life, the residual value and the depreciation method are reviewed at the end of each fiscal year,
and any changes are applied to the period when the estimated are changed and future periods prospectively as a
change in the accounting estimate. The impact of the change of these estimates is recognized in the period when the
estimates are changed and future periods.
The estimated useful lives of major assets are as follows.
Buildings and structures 10 to 45 years
Machinery, equipment and
2 to 8 years
vehicles
Tools, furniture and
2 to 10 years
fixtures

(8) Goodwill and intangible assets

A. Goodwill
The measurement of goodwill at the time of initial recognition is as stated in “(2) Business combinations.” After
initial recognition, goodwill is not amortized and is measured at cost less any accumulated impairment losses.
Goodwill is allocated to each of the acquirer’s cash-generating units that are expected to benefit from the synergies
of the business combination, and an impairment test is performed for the cash-generating units to which goodwill was
allocated at a certain time each fiscal year and whenever there is an indication of impairment. Impairment losses on
goodwill are recognized in profit or loss and are not reversed in a subsequent period.

B. Intangible assets
The cost model is used for intangible assets, and they are presented at cost less any accumulated amortization
and accumulated impairment losses.
(a) Intangible assets acquired separately
Intangible assets acquired separately are measured at cost at the time of initial recognition.

(b) Intangible assets acquired in a business combination

For intangible assets acquired in a business combination, their acquisition cost is measured at fair value as of the
date of acquisition. Intangible assets acquired in a business combination are comprised primarily of developed
technology, customer relationships, and in-process research and development.
(Developed technology)
Intangible assets that represent future excess earnings power expected to arise from the technology and that have
been already developed as of the date of acquisition with the acquiree are recognized as Developed technology.
(Customer relationships)
Intangible assets related to future excess earnings power expected to arise from the existing customers as of the
date of acquisition with the acquiree are recognized as Customer relationships.
(In-process research and development)
Intangible assets in an intermediate stage of identifiable research and development assets meeting the asset
requirements are recognized as in-process research and development.
The details for intangible assets acquired in a business combination, see “Note 13. Goodwill and Intangible Assets.”

(c) Internally-generated intangible assets (Capitalized development cost)

For internally-generated intangible assets, the expenditure is recorded as an expense, except for development costs
that meet the following requirements for capitalization:
• The technical feasibility of completing the intangible asset so that it will be available for use or sale;
• The intention of an entity to complete the intangible asset and use or sell it;
• The ability to use or sell the intangible asset;
• A method for the intangible asset to generate probable future economic benefits,
• The availability of adequate technical, financial and other resources necessary for completing the development
of the intangible asset and using or selling it; and
• The ability to measure the expenditure attributable to the intangible asset during its development reliably
These internally generated intangible assets are amortized using the straight-line method from the time when
they are provided for use in business operations based on estimated useful life (5 years) for which they are
expected to provide net cash inflows. Expenditure on research and development that does not meet the

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 requirements for capitalization above is recognized in profit or loss at the time of occurrence.

Intangible assets with finite useful lives are amortized over their respective estimated useful life using the straight-
line method, and an impairment test is performed if any indications of impairment exist. For intangible assets with
finite useful lives, their useful lives and amortization method are reviewed at the end of each fiscal year. A change in
the useful life or the amortization method is applied prospectively as a change in accounting estimate.
Commercial software products are mainly amortized using a method based on the expected sales volume over the
expected sales period (3 years or less), and software for internal use is mainly amortized using the straight-line
method based on the expected available period (5 years) for internal use. Technical assets are amortized using the
straight-line method based on the available period (12 years or less) in business activities. Customer relationships
are mainly amortized using the straight-line method based on the estimated useful life (14 years or less).
Intangible assets with indefinite useful life and intangible assets that are not yet available for use are not amortized,
and an impairment test is performed at a certain time each fiscal year or whenever any indication of impairment exists.

(9) Leases
A. Overall
(a) Identification of a lease
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or
contains, a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. The Group reviews the following to assess whether a contract conveys the right to control the use of
an identified asset.

(i) The use of the identified asset in a contract is directed.

(ii) The lessee has the right to obtain substantially all of the economic benefits from use of the identified asset
throughout the period of use.
(iii) The lessee has the right to direct the use of an asset. Also, in case that the determination of how and for what
purpose the asset is used are predetermined, if applicable to any of the following, it is determined that the lessee
has the right to direct the use of an asset.
・The lessee has the right to operate the asset.
・The lessee designed the asset in a way that predetermines how and for what purpose the asset will be used.

(b) Lease term

The lease term is defined as the non-cancellable period for which a lessee has the right to use an underlying
asset, together with both:
・periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option; and
・periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option.

B. Leases as Lessee
(a) Separable components of a contract
The Group allocates the consideration in contract for a building lease to lease and non-lease components on the
basis of the relative stand-alone price of each lease component. In addition, the Group elects not to separate non-
lease components from lease components, and instead accounts for each lease component and any associated
non-lease components as a single lease component for the lease other than a building lease.

(b) Right-of-use assets

The Group recognizes the right-of-use assets and the lease liabilities at the date of initial application. The right-
of-use assets are measured initially at cost. This cost is calculated by deducting any lease incentives received from
the sum of the amounts of the initial measurement of the lease liabilities, any lease payments made at or before the
commencement date, any initial direct costs and an estimate of costs to be incurred in dismantling and removing
the underlying assets, restoring the underlying asset or restoring the site on which it is located. After the
commencement date, the right-of-use asset is measured using a cost model by deducting any accumulated
depreciation and any accumulated impairment losses from the cost.
The right-of-use assets are depreciated using the straight-line method over the period which is the earlier of the
useful life of the underlying asset or the lease term. If it is reasonably certain that the Group will exercise a purchase
option, depreciation is based on the useful life of the underlying asset.

(c) Lease liabilities

Lease liabilities are measured initially at the present value of unpaid lease payments discounted using the interest
rate implicit in the lease. If the interest rate implicit in the lease cannot be readily determined, the Group’s incremental
borrowing rate is used. The Group typically uses our incremental borrowing rate as the discount rate.
The lease payments in the measurement of lease liabilities includes the fixed payments, the amount of payments
for the lease in any optional period if it is considered to be reasonable certain to exercise an extension option, and
the payments of penalties for terminating the lease if the lease term reflects the lessee exercising an option to
terminate the lease.
If there is a change in future lease payments resulting from a change in an index or rate, there is a change in the
amounts expected to be payable under a residual value guarantee, or there is a change in determining whether
purchase, extension and termination option is reasonably certain to exercise, lease liabilities are remeasured.
When lease liabilities are remeasured, the carrying amount of the right-of-use assets is adjusted or the remaining
remeasurement is recognized in profit or loss if the carrying amount of the right-of-use assets is reduced to zero.

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 (d) Short-term leases within 12 months and leases of low-value assets
The Group elects not to recognize right-of-use assets and lease liabilities for short-term leases within 12 months
and leases of low-value assets including IT equipment and recognizes these lease payments as expenses over the
lease term using the straight-line method.

(10) Impairment of non-financial assets

The Group determines whether there is any indication that an asset (except for inventories, deferred tax assets and
retirement benefit assets) may be impaired each fiscal year, and if such indication exists, an impairment test is
performed. However, for goodwill or intangible assets with indefinite useful life or that are not yet available for use, an
impairment test is performed at a certain time each fiscal year and when indicators of impairment are identified. or
when any signs of impairment are identified.
In the impairment test, a recoverable amount is estimated, and the carrying amount and the recoverable amount are
compared. The recoverable amount of assets or cash-generating units is calculated at the higher of the value in use
and the fair value less costs of disposal. The value in use is calculated by discounting the estimated future cash flows
to the present value, using the pre-tax discount rate that reflects the time value of money and risks specific to the asset.
If the recoverable amount of assets or cash-generating units is lower than the carrying amount as a result of the
impairment test, an impairment loss is recognized. When the impairment loss of a cash-generating unit including
goodwill is recognized, an allocation is made first to reduce the carrying amount of goodwill that is allocated to the
cash-generating unit, and then an allocation is made to proportionally reduce the carrying amount of other assets in
the cash-generating unit.
The impairment loss is reversed if there is any indication that the impairment loss recognized in a prior period may
no longer exist or may have decreased and if the estimated recoverable amount exceeds the carrying amount. The
upper limit of the reversal shall not exceed the carrying amount that would have been determined had no impairment
loss been recognized in prior years, net of depreciation or amortization. The impairment loss on goodwill is not reversed.

(11) Provisions
The Group recognizes a provision if the Group has assumed a legal or constructive obligation as a result of a past
event, if it is probable that an outflow of economic benefits will be required to settle the obligation and if a reliable
estimate can be made of the amount of the obligation.
If the time value of the money of the provision is significant, the estimated future cash flows are discounted to the
present value using a pre-tax discount rate that reflects the time value of the money and risks specific to the liability.
The unwinding of the discount amount due to the passage of time are recognized as a finance cost.

(12) Levies
For levies that are an outflow of resources embodying economic benefits required by the government to the Group
in accordance with laws and regulations, an expected payment is recognized as a liability when the obligation event
that triggers the payment of levies prescribed by laws and regulations occurs.

(13) Employee benefits

A. Short-term employee benefits
A short-term employee benefit is an employee benefit that will be settled within 12 months from the end of the fiscal
year in which the employee renders the related service, and the Group recognizes an amount expected to be paid in
exchange for the services rendered during a certain accounting period. Short-term employee benefits in the Group
include bonuses and benefits related to paid leave.
The expected costs of employee benefits related to accumulating paid leave are recognized when an employee
renders the service that will increase the entitlement to future paid leave. In addition, the Group measures the
expected cost of accumulating paid leave as an additional amount that the Group is expected to pay as a result of
the unused entitlement that has accumulated as of the end of the fiscal year.
Bonuses are recognized as a liability if the Group has a legal or constructive obligation to pay as a result of the
provision of service by the employee in the past and if the obligation can be estimated reliably.

B. Post-employment benefits
For post-employment benefit plans, the Group has adopted defined benefit plans and defined contribution plans.
(a) Defined contribution plans
Contributions to defined contribution plans are recognized as an expense when they are incurred unless they
are included in inventories or property, plant and equipment. If contributions already paid exceed contributions due
for services provided before the end of the fiscal year, the Group recognizes the excess as an asset to the extent
to which the prepayment becomes the reduction of future payments or a future refund.

(b) Defined benefit plans

The net amount of assets or liabilities of the defined benefit plan is the amount obtained by deducting the fair
value of the plan assets (including the upper limit of the assets and adjustments to minimum funding requirements,
if necessary) from the present value of defined benefit obligations, and it is recognized in the consolidated financial
statements as an asset or a liability. The defined benefit obligations are calculated using the projected unit credit
method, and the present value of defined benefit obligations is calculated by applying a discount rate to the
expected payment amount in the future. The discount rate is calculated based on market yields at the end of the
reporting period on high quality corporate bonds corresponding to the discount period which is determined based
on the period until the future expected benefit payment date in each reporting period.
Service costs and net interest expense for the net amount of assets or liabilities related to the defined benefit
plans are recognized in profit or loss.

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 Actuarial gains or losses and fluctuations in the return on the plan assets excluding the portion included in the
net interest expense and change in the impact of the asset ceiling are recognized in other comprehensive income
as “Remeasurements of defined benefit plans” in the corresponding period and are immediately transferred from
other components of equity to retained earnings. Past service costs are recognized in profit or loss when the plan
is revised or curtailed, or when related restructuring costs or termination benefits are recognized, whichever is
earlier.

C. Other long-term employee benefits

As long-term employee benefit plans other than post-employment benefits, the Group has a special leave and a
reward plan based on the number of service years. The obligations regarding other long-term employee benefits are
measured at the amount obtained by discounting the estimated amount of future benefits that the employees have
earned as consideration for services rendered in the previous and current fiscal years to the present value.

(14) Government grants

Government grants are recognized at fair value when there is reasonable assurance that the Group complies with
the required conditions and that the grants will be received. Grants related to revenue are recognized in profit or loss.
Grants recognized as profit or loss are deducted from the corresponding expenses when they are directly based on
the incurred expenses. Grants received based on other conditions are shown in other income.

(15) Treasury shares

When treasury shares are acquired, the amount of the consideration paid, including directly attributable transaction
costs, is recognized at cost and deducted from equity. If treasury shares are sold, the consideration received is
recognized as an increase in equity, and the difference between the carrying amount and the consideration received
is recognized in the capital surplus account.

(16) Share-based payments

The Group has adopted share-based payment plans as incentive plans for directors, senior vice presidents and
employees.
Restricted Stock Unit (RSU) and Performance Share Unit (PSU) are share-based payment plans with share
issuance in the future. RSU is vested subject to continued employment with a Group Company and PSU is vested in
response to the extent of the growth rate of total shareholder return. The payments are measured with reference to
the fair value of the Company's stock, recognized as an expense in profit or loss, and the same amount is recognized
as an increase in equity.
Stock options are estimated at fair value on the grant date and recognized as an expense over the vesting period,
taking into account the number of stock options that are expected to eventually vest, and the same amount is
recognized as an increase in equity. The fair value of granted options is calculated by taking the terms and conditions
of the options into account. If it is determined that the number of stock options that will be vested will differ from the
prior estimate due to subsequent information, the estimate of the number of stock options that will be vested is revised
as necessary.

(17) Revenue recognition

The Group recognizes revenue based on the following five-step model.
Step 1: Identify the contract with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the entity satisfies a performance obligation
The Group engages in research, design, development, manufacturing, sales and services related to various kinds
of semiconductors as a manufacturer specializing in semiconductors. Revenue is recognized mainly when the goods
are delivered as the ownership of these goods has been transferred to the customer and the performance obligations
are satisfied at the time of delivery.
Also, revenue is measured at the fair value of the consideration received after deducting discounts, rebates and
returns.
Sales to specific distributors may be subject to the following various sales promotion programs.
Ship and debit is a program designed to assist specific distributors on their sales to end customers through pricing
adjustments. Under this program, the selling prices will be adjusted when the specific distributors sell the products to
the end customers. At the time the Company records sales to the specific distributors, the Company accrues for refund
liabilities and deduct the same amounts from revenue based on the estimate of the variable consideration resulting
from the possible application of the ship and debit program upon the future sales by the distributors. In addition, the
related balance of accounts receivable-trade is transferred to long-term accounts receivable in order to reduce specific
distributors' financial burden caused by a time lag, and will be reversed in the future based on the contract.
Stock rotation is a program whereby on a semiannual basis, specific distributors are allowed to return, for credit,
inventories equal to a certain percentage of their purchases for the previous six months. The Company accrues for
refund liabilities related to the stock rotation program on a quarterly basis and deduct the same amount from revenue.

(18) Finance income and Finance costs

Finance income consists of dividend income, interest income, foreign exchange gain, gains on sales of financial
assets, gains on hedging financial instruments that are recognized in profit or loss, and the transfer of amounts
previously recognized in other comprehensive income. Interest income is recognized at the time of occurrence using
the effective interest method. Dividend income is usually recognized on the date when the Group’s right to receive

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 payment is established.
Finance costs consist of interest expenses for corporate bonds, borrowings and interest expenses for lease liabilities,
foreign exchange loss, losses on sales of financial assets, losses from hedging financial instruments that are
recognized in profit or loss, and the transfer of amounts previously recognized in other comprehensive income.
Acquisitions or construction of qualifying assets, or borrowing costs not directly attributable to the production, are
recognized at the time of occurrence using the effective interest method. Lease payments are allocated to finance
costs and the repayment portion of the liability balance, and finance costs are allocated over the lease term so as to
produce a constant periodic rate of interest on the remaining balance of the liability.

(19) Income taxes

Current taxes and deferred taxes are presented as income tax expense in the consolidated statement of profit or
loss, except for those related to business combinations and items that are recognized in other comprehensive income
or that are directly recognized in equity.
Current taxes and deferred taxes related to items that are recognized in other comprehensive income are recognized
in other comprehensive income.

A. Current taxes
Current taxes are measured at the amount paid to tax authorities or the amount expected to be refunded from tax
authorities. The tax rates and the tax law used for the calculation of the tax amount are those established or
substantively established by the closing date.

B. Deferred taxes
Deferred taxes are calculated based on temporary differences between the tax base amount and the carrying
amount for accounting purposes of assets and liabilities at the end of the fiscal year. Deferred tax assets are
recognized for deductible temporary differences, unused tax credits and unused tax losses are expected to arise to
the extent to which it is probable that taxable profits will be available against which they can be utilized, and deferred
tax liabilities are recognized for taxable temporary differences, in principle.
Neither a deferred tax asset nor a deferred tax liability is recognized for the following temporary differences:
• Temporary difference arising from the initial recognition of goodwill
• Temporary difference arising from the initial recognition of an asset and a liability arising from a transaction
(excluding business combination transactions) that does not have an impact on accounting profits and taxable
profits
• A case where the timing for eliminating a taxable temporary difference for an investment in a subsidiary or an
associate and an interest in the arrangement of joint control can be controlled and where it is probable that the
difference will not be eliminated in the foreseeable future
• A case where it is improbable that a deductible temporary difference for an investment in a subsidiary or an
associate and an interest in the arrangement of joint control will be eliminated in the foreseeable future, or a case
where it is improbable that a taxable profit that will be available for the temporary difference will be earned

Deferred tax assets and liabilities are measured at a tax rate (and based on tax law) that is expected to be applied
in the period when assets are realized or liabilities are settled based on the statutory tax rate (and based on tax law)
that is established or substantively established by the closing date.
Deferred tax assets and deferred tax liabilities are offset if the Group has the legally enforceable right to offset
current tax assets and current tax liabilities, and if any of the following cases applies:
• Income tax expense is imposed on the same taxable entity by the same tax authority
• Although income tax expense is imposed on different taxable entities, these taxable entities intend to settle
current tax assets and current tax liabilities on a net basis or intend to settle current tax liabilities at the same
time as realizing current tax assets.

The carrying amount of deferred tax assets is reviewed at the end of each fiscal year. If it becomes improbable that
taxable profits sufficient to realize part or all of the benefits of deferred tax assets will be earned, the carrying amount
of deferred tax assets is reduced to that extent. In addition, the amount of the write-down is reversed to the extent to
which it becomes probable that sufficient taxable profits will be earned.
The Group recognizes tax assets and liabilities at a reasonably estimated amount where there is an uncertain tax
position.

(20) Earnings per share

Basic earnings per share are calculated by dividing profit (loss) attributable to owners (ordinary shareholders) of the
parent by the weighted average number of ordinary shares outstanding, net of treasury shares, during each fiscal year.
Diluted basic earnings per share are calculated, adjusted for the effects of all dilutive potential ordinary shares.

(21) Non-current assets held for sale and discontinued operations

A. Non-current assets held for sale
For assets or asset groups that are not in continuing use and for which recovery through sale is expected, that are
highly likely to be sold within one year, and that the execution of sales plan is confirmed by management and can be
sold in their current condition, assets held for sale and liabilities directly related to assets held for sale are classified
into disposal groups separately from other assets and liabilities and recorded in the consolidated statement of
financial position.
Non-current assets classified as assets held for sale are measured at the lower of the carrying amount and the fair
value after deducting the costs for sale. Assets classified as assets held for sale are not depreciated or amortized.

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B. Discontinued operations
A component of an entity that has either been disposed of or is classified as held for sale is recognized as a
discontinued operation if any of the following applies:
• A separate major line of business or geographical area of operations;
• Part of a single coordinated plan to dispose of a separate major line of business or geographical area of
operations; or
• A subsidiary acquired exclusively with a view to resale.

If an operation is classified as a discontinued operation, the consolidated statement of profit or loss and the
consolidated statement of comprehensive income for a comparative period are restated on the assumption that the
operation was discontinued on the commencement date of the comparative period.

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4. Significant Accounting Estimates and Judgments
In preparing the consolidated financial statements, management of the Group makes judgments, accounting estimates
and assumptions that could have an impact on the application of accounting policies and the reporting amounts of assets,
liabilities, revenue and expenses. These estimates and assumptions are based on the best judgment of management,
taking into account various factors that are deemed reasonable on the closing date in light of past experience and available
information. However, figures based on these estimates and assumptions may differ from the actual results due to their
nature.
Estimates and underlying assumptions are reviewed continuously. The impact of the review of these estimates is
recognized in the period when the estimates are revised and future periods.
The Group reflects the impact of COVID-19 to estimates and assumptions (impairment test of goodwill and collectability
of deferred tax assets, etc.), to a reasonable extent based on available information.
These estimates and assumptions may be affected depending on the future situations of the spread of COVID-19.

Estimates and assumptions that could have a significant impact to the consolidated financial statements are as follows.

(1) Impairment of non-financial assets

The Group performs an impairment test for non-financial assets (excluding inventories, deferred tax assets and
retirement benefit asset) if there is any indication that the recoverable amount will be less than the carrying amount.
However, for goodwill or intangible assets with indefinite useful life or that are not yet available for use, an impairment
test is performed at a certain time each fiscal year and when any signs of impairment exist.
The impairment test is performed by comparing the carrying amount and the recoverable amount of the assets, and
if the recoverable amount falls below the carrying amount, an impairment loss is recorded. The recoverable amount is
calculated mainly using the discounted cash flow model, where certain assumptions, including, but not limited to, the
useful life of the asset, future cash flows, sales revenue, gross margin, discount rate, and long-term growth rate, are
made. These assumptions are determined based on the best estimates and judgments of management but could be
influenced by fluctuations in uncertain future economic conditions. If a revision becomes necessary, it could have a
significant impact on the amounts that will be recognized in the consolidated financial statements of subsequent
periods.
The calculation method of the recoverable amount is stated in “Note 15. Impairment of Non-financial Assets.”

(2) Post-employment benefits

The Group has a variety of post-employment benefit plans, including a defined benefit plan.
The present value of the defined benefit obligation of each plan and related service costs are calculated based on
actuarial assumptions. For the actuarial assumptions, estimates and judgments on a range of variables such as the
discount rate are required.
The actuarial assumptions are determined based on the best estimates and judgments of management but could
be affected by fluctuations in uncertain future economic conditions. If a revision becomes necessary, it could have a
significant impact on the amounts that will be recognized in the consolidated financial statements of subsequent
periods.
These actuarial assumptions and related sensitivities are stated in “Note 22. Employee Benefits.”

(3) Provisions
The Group records multiple provisions in the consolidated statement of financial position, including the provision for
product warranties and asset retirement obligations, among others.
These provisions are recorded based on the best estimate of expenditure required for the settlement of the
obligations, considering risks and uncertainties related to the obligations on the closing date.
The amount of expenditure required for the settlement of the obligations is calculated by comprehensively
considering results that could arise in the future, but it could be affected by the occurrence of unforeseeable events
and changes in the situation. If the actual amount of expenditure differs from the estimate, it could have a significant
impact on amounts recognized in the consolidated financial statements of subsequent periods.
The nature and amounts of provisions are stated in “Note 21. Provisions.”

(4) Recoverability of deferred tax assets

When deferred tax assets are recognized, the time and amount of taxable profits that will be earned in the future
based on a business plan are estimated and calculated based on judgment of the possibility that taxable profits will
arise.
Because the timing and amount of taxable profits are affected by the future business performance of the Group, if
the actual timing and amount differ from the estimate, it could have a significant impact on the amounts recognized in
the consolidated financial statements of subsequent periods.
Details and amounts of deferred tax assets are stated in “Note 17. Income Tax.”

(5) Inventories
Inventories are measured at cost, but if the net realizable value at the end of the fiscal year falls below the acquisition
cost, inventories are measured at the net realizable value, and the difference from the acquisition cost is recognized
in the cost of sales, in principle. For slow moving inventory that is outside of the operating cycle process, the net
realizable value is calculated reflecting the future demand and market trends. If the net realizable value declines
significantly due to the greater-than-expected deterioration of the market environment, a loss could arise.

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(6) Measurement method of the fair value of financial instruments
When the Group evaluates the fair value of certain financial instruments, the Group uses valuation techniques that
use inputs that are not observable in the market. These unobservable inputs could be affected by fluctuations in
uncertain future economic conditions, and if a revision becomes necessary, it could have a significant impact on the
consolidated financial statements in subsequent periods.
The details and amounts of the fair value of financial instruments are stated in “Note 3. Significant Accounting
Policies, (4) Financial instruments” and “Note 33. Financial Instruments.”

(7) Income taxes

The Group recognizes tax assets and liabilities at a reasonably estimated amount based on the interpretation of tax
laws where there is an uncertain tax position. Deferred taxes of the Group include liabilities related to an uncertain tax
position. Tax effects of assets and liabilities explained above are calculated using the expected value method.
Estimates are based on the best estimate at the moment. However, differences from the estimates could have a
significant impact on the consolidated financial statements in subsequent periods depending on the actual results. For
details, please refer to “Note 17. Income Taxes.”

- 102 -
5. Standards and Interpretations Not Yet Adopted
Of the new standards and interpretations that were newly issued or revised as of the date of the approval of the
consolidated financial statements, the major standards and interpretations that the Group has not yet adopted as of
December 31, 2021 are as follows:

IFRS 17 “Insurance Contract”

IFRS 17 “Insurance Contract” was issued as replacement for IFRS4 “Insurance Contracts.” The Group will apply the
standard from January 1, 2023. The Group has not yet calculated an impact on the consolidated financial statements by
adoption of the standards.

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6. Business Segments
(1) Overview of reportable segments
The Group’s reportable segments are components of the Group for which separate financial information is available
that is evaluated regularly by the Board of Directors to determine the allocation of management resources and assess
performance.
The Group consists of “Automotive Business” and “Industrial/Infrastructure/IoT Business” and those are the Group’s
reportable segments. The Automotive business includes the product categories “Automotive control,” comprising
semiconductor devices for controlling automobile engines and bodies, and “Automotive information,” comprising of
semiconductor devices used in sensing systems for detecting environments inside and outside the vehicle as well as
automotive information devices such as IVI (in-vehicle infotainment) and instrument panels used to give various
information to the driver of the vehicle. The Group mainly supplies microcontrollers (MCUs), system-on-chips (SoCs),
analog semiconductor devices and power semiconductor devices in each of these categories. The
Industrial/Infrastructure/IoT Business includes the product categories “Industrial”, “Infrastructure” and “IoT” which
support the smart society. The Group mainly supplies MCUs and SoCs in each of these categories. Additionally,
commissioned development and manufacturing from the Group’s design and manufacturing subsidiaries are
categorized as “Other.”

(2) Information on reportable segments

The accounting treatment for the reportable segments is same as described in “Note 3. Significant Accounting
Policies.” The Group discloses revenue from external customers, segment gross profit, and segment operating profit
(which is the segment profit). The Group added segment gross profit as a disclosure item in the business segments
from the current fiscal year. This change is reflected to the business segments for the year ended December 31, 2020.
Segment gross profit and segment operating profit are internal key performance indicators which are used by
management when making decisions and are calculated by excluding the following items from IFRS gross profit and
operating profit (Adjustments 2): amortization of certain tangible and intangible assets related to business
combinations; certain share-based payment expenses; and other non-recurring items. Other non-recurring items
include costs related to acquisitions and gains and losses the Group believes to be appropriate for deduction. However,
certain other non-recurring items the Group believes to be covered by each reportable segment are included in
segment gross profit and segment operating profit of each reportable segment (Adjustments 1). The Group’s Executive
Officers assess the performance after eliminating intragroup transactions, and therefore, there are no transfers
between reportable segments included within the segment results.
Information on reportable segments is as follows.

The year ended December 31, 2020 (In millions of yen)

Reportable Segments
Industrial/ Adjustments Adjustments Consolidation
Other Total
Automotive Infrastructure/ (Note 1) (Note 2) basis
IoT
Revenue from
341,001 363,609 11,063 ― 715,673 ― 715,673
external customers
Segment gross profit 128,489 209,127 1,122 ― 338,738 (3,049) 335,689
Segment profit 48,356 89,702 1,177 (1,697) 137,538 (72,396) 65,142
Finance income 7,623
Finance costs (7,549)
Profit before tax 65,216
(Other adjustments)
Depreciation
46,174 39,299 236 ― 85,709 55,818 141,527
and amortization

The year ended December 31, 2021 (In millions of yen)

Reportable Segments
Industrial/ Adjustments Adjustments Consolidation
Other Total
Automotive Infrastructure/ (Note 1) (Note 2) basis
IoT
Revenue from
462,309 515,547 16,562 ― 994,418 ― 994,418
external customers
Segment gross profit 214,573 312,301 1,992 ― 528,866 (32,465) 496,401
Segment profit 122,443 167,071 1,992 5,075 296,581 (112,980) 183,601
Finance income 4,140
Finance costs (35,278)
Profit before tax 152,463
(Other adjustments)
Depreciation
43,468 35,316 ― ― 78,784 57,712 136,496
and amortization

(3) Information on products and services

Information on products and services is the same with information on reportable segments and therefore, omitted
from this section.

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(4) Information on regions and countries
The components of revenue and non-current assets from external customers by region and country are as follows.
a. Revenue from external customers
(In millions of yen)

The year ended The year ended

December 31, 2020 December 31, 2021

Japan 241,186 314,528

China 168,548 231,059

Asia (Excluding Japan and China) 126,614 213,313

Europe 111,908 148,399

North America 65,048 83,584

Others 2,369 3,535

Total 715,673 994,418

(Note) Revenues are categorized into the country or region based on the location of the customers.

b. Non-current assets
Non-current assets include property, plant and equipment, goodwill and intangible assets.
(In millions of yen)

The year ended The year ended

December 31, 2020 December 31, 2021

Japan 771,228 1,402,065

Malaysia 262,719 242,557

Asia (Excluding Japan and Malaysia) 18,110 22,301

Europe 28,996 46,656

North America 61,524 88,719

Total 1,142,577 1,802,298

(5) Major customers

Revenue from a single external customer accounting for 10% or more of revenue is as follows.
(In millions of yen)

Name of related reportable segments The year ended The year ended
December 31, 2020 December 31, 2021
Automotive,
Ryosan Company, Limited 73,599 141,325
Industrial/ Infrastructure/IoT
WT Microelectoronics Automotive,
50,374 127,845
Co.,Ltd Industrial/ Infrastructure/IoT

- 105 -
7. Business Combinations
(The year ended December 31, 2021)

(Dialog Semiconductor Plc)

a. Overview of business combination
The Company made an acquisition of the entire issued and to be issued share capital of Dialog on August 31, 2021.
Following the completion of the acquisition, Dialog has become a wholly-owned subsidiary of the Company (hereafter
“the Dialog Acquisition”).

1) Name and overview of the acquiree

Name of the acquiree: Dialog Semiconductor Plc
Business overview: Development, manufacturing and sales of analog ICs such as mixed-signal devices.

2) Date of the acquisition

August 31, 2021. (LONDON, United Kingdom: August 30, 2021)

3) Purpose of the acquisition

Dialog is an innovative provider of highly-integrated and power-efficient mixed-signal ICs for a broad array of
customers within IoT, consumer electronics and high-growth segments of automotive and industrial end-markets.
Centered around its low-power and mixed-signal expertise, Dialog brings a wide range of product offerings including
battery and power management, power conversion, configurable mixed-signal (CMIC), LED drivers, custom mixed-
signal ICs (ASICs) and automotive power management ICs (PMICs), wireless charging technology, and more. Dialog
also offers broad and differentiated Bluetooth® Low Energy, WiFi and audio system-on-chips (SoCs) that deliver
advanced connectivity for a wide range of applications; from smart home/building automation, wearables, to
connected medical. All these systems complement and expand Renesas’ leadership portfolio in delivering
comprehensive solutions to improve performance and efficiency in high-computing electronic systems.
The Dialog acquisition demonstrates Renesas’ continued and unwavering commitment to further advance its
solution offering. The complementary nature of the companies’ technological assets and the scale of the combined
portfolios will enable Renesas to build more robust and comprehensive solutions to serve high-growth segments of
the IoT and automotive markets. Renesas believes there is a compelling strategic rationale for the Dialog acquisition
because it:

(i) Scales Renesas’ IoT sector capabilities with Dialog’s low-power technologies
Dialog has a differentiated portfolio of low-power mixed-signal products, decades of experience in developing
custom and configurable solutions for the world’s largest customers and expertise in low-power connectivity that are
highly complementary to Renesas. The Dialog acquisition of these low-power technologies enhances Renesas’
product portfolio and expands horizons in addressing high-growth markets in the IoT field.

(ii) Unlocks further differentiation to Renesas system solution with connectivity

Bringing together Renesas and Dialog will extend the Group's reach to a broader customer base and open up
additional growth potential in the key growth segments: industrial infrastructure, IoT and automotive. Dialog’s BLE,
WiFi and audio SoCs are highly complementary to Renesas’ microcontroller (MCU)-based solutions. Combining
Dialog’s innovative low-power Wi-Fi and Bluetooth® SoC and expertise with Renesas’ technologies will enable
Renesas to further differentiate its system solution offering and extend its footprint in high-growth segments, including
contactless IoT applications for smart home/building automation and healthcare. Renesas’ automotive solutions will
also be enriched with connectivity for a wide range of security and safety applications.

4) Acquisition Method
Renesas implemented a scheme of arrangement pursuant to UK law. The scheme of arrangement is a method of
acquisition whereby with the agreement of Dialog, the Dialog acquisition can be executed by obtaining approvals
from Dialog shareholders and the Court.

b. Consideration for the acquisition and its breakdown

(In millions of yen)
Consideration Amount
Cash 623,892
Restricted stock units 7,183
Total A 631,075

Expenses related to the acquisition were 4,589 million yen, which were recorded in “Selling, general and
administrative expenses” for the year ended December 31, 2021. Details of the consideration for acquisition in restricted
stock units are described in “Note 32. Share-based Payments.”

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c. Fair value of assets acquired, liabilities assumed and goodwill
(In millions of yen)
Date of acquisition
(August 31, 2021)
Current assets
Cash and cash equivalents 40,450
Trade and other receivables (Note 2) 39,808
Inventories 34,748
Other 8,842
Total current assets 123,848

Non-current assets
Property, plant and equipment 10,771
Intangible assets 40,303
Other 2,376
Total non-current assets 53,450
Total assets 177,298

Current liabilities
Trade and other payables 14,825
Other 36,848
Total current liabilities 51,673

Non-current liabilities
Other non-current financial liabilities 2,881
Deferred tax liabilities 4,445
Other 3,238
Total non-current liabilities 10,564
Total liabilities 62,237

Net assets B 115,061

Basis adjustment (Note 3) C 3,604

Goodwill (Note 4) A-B+C 519,618

(Note) 1. As of December 31, 2021, the acquisition was accounted for using provisional amounts determined based on
reasonable information currently available, and since the recognition and fair value measurement of the
identifiable assets acquired and liabilities assumed at the acquisition date have not been finalized, the purchase
price allocation is still preliminary. Currently the valuation of property, plant and equipment and additional
recognition of intangible assets, among other assets and liabilities, have not been completed, except for certain
inventories for which the valuation was able to be completed. As a result, goodwill was provisionally recognized
as the total amount of the excess of the consideration transferred over the net amount of the assets acquired
and liabilities assumed. The identifiable intangible assets are tentatively recorded at the book value as carried
by Dialog.
2. The total contract amount is the same as the fair value, and there are no receivables that are expected to be
unrecoverable.
3. The Company has entered into currency options and forward exchange contracts to hedge the foreign exchange
risk against EUR-denominated acquisition consideration payments and adopted hedge accounting. The hedging
instruments were settled in cash at the fair value on the acquisition date. The basis adjustment is the amount of
change in the fair value of the hedging instruments recorded in other comprehensive income on the acquisition
date and were added to the amount of goodwill.
4. Goodwill reflects future excess earning power expected from synergies between the Company and Dialog. No
amount of goodwill is expected to be deductible for tax purposes.

d. Payments for acquisition of subsidiaries

(In millions of yen)

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 Item Amount

Consideration for acquisition in cash 623,892

Cash and cash equivalents held by the acquiree at the time of obtaining control (40,450)

Amount of cash paid for the acquisition of subsidiaries 583,442

Basis adjustment 3,604

Amount of cash paid for the acquisition of subsidiaries (net amount) 587,046

e. Impact on revenue and profit as though the date of the acquisition had been as of the beginning of the fiscal year
(unaudited information)
Assuming that the date of the acquisition of Dialog was at the beginning of the fiscal year, revenue and profit for the
year ended December 31, 2021 would be 1,093,258 million yen and 156,593 million yen, respectively. As of December
31, 2021, the recognition and fair value measurement of the identifiable assets acquired and liabilities assumed at the
acquisition date have not been finalized. As a result, the adjustments such as amortization of intangible assets are not
reflected in the aforementioned revenue and profit figures. The pro forma information is not necessarily indicative of
events that may happen in the future.
In addition, in order to prepare this information, Dialog's past financial information has been adjusted for significant
differences to comply with the Company's accounting policies.

f. Revenue and profit / loss of the acquired company

From the acquisition date to December 31, 2021, the Company recorded the revenue of Dialog of 66,757 million yen
and profit of 4,545 million yen in the Consolidated Statement of Profit or Loss and Consolidated Statement of
Comprehensive Income.

(Celeno Communications Inc.)

a. Overview of business combination
On December 20, 2021, the Company made an acquisition of the entire issued share capital of Celeno, a
semiconductor company in the United States of America which mainly operates its business in Israel. Following the
completion of the acquisition, Celeno has become a wholly-owned subsidiary of the Company (hereafter “the Celeno
Acquisition”).

1) Name and overview of the acquiree

Name of the acquiree: Celeno Communications Inc.
Business overview: Development and sale of connectivity devices such as Wi-Fi 5, Wi-Fi 6 and IoT chipsets.

2) Date of the acquisition

December 20, 2021.

3) Purpose of the acquisition

Headquartered in Israel, Celeno offers a wide range of wireless communication solutions, including advanced Wi-
Fi chipsets and software solutions, for high-performance home networks, smart buildings, enterprise and industrial
markets. Its industry’s most compact chipset offerings for Wi-Fi 6 and 6E deliver exceptional Wi-Fi network
performance and increased security with low latency and low power consumption. Celeno’s breakthrough Wi-Fi
Doppler Imaging technology, a Wi-Fi based, high-resolution imaging technology is ideal for home elderly care and
assisted living, home security, safe driving and digital and connected factories. It depicts, tracks and analyzes the
motion, behavior and location of people and objects using standard Wi-Fi, eliminating the need for multiple cameras
or sensors in home environments and commercial buildings. As the world’s No.1 embedded processor supplier,
Renesas offers a breadth of low-power MCU/MPU/SoC processors, wireless ICs, sensors and power management
technologies. Celeno’s field-proven Wi-Fi and software capabilities are highly complementary to Renesas. The
combination creates a comprehensive, end-to-end embedded solutions for addressing the fast-growing markets for
low-power connectivity in IoT, infrastructure, industrial and automotive applications.
In addition to expanding the solution offering, the Celeno Acquisition also increases Renesas’ engineering and
design scale with Celeno’s design center in Israel and by welcoming R&D staff based in Israel, Ukraine, India, China,
Taiwan and more. This further strengthens Renesas’ global engineering and software development talent base,
allowing Renesas to bring more seamless and expanded services to customers around the globe.

4) Acquisition Method
For the purpose of the Celeno Acquisition, Renesas established a wholly-owned subsidiary (“Acquisition
Subsidiary”) in Delaware, the United States of America which merged with Celeno in a reverse triangular merger.
Celeno was the surviving company following the merger. The Company paid cash to Celeno's shareholders as
consideration for the merger. The shares of the Acquisition Subsidiary owned by Renesas were converted into
outstanding shares in Celeno, making Celeno a wholly-owned subsidiary of Renesas.

b. Consideration for the acquisition and its breakdown

(In millions of yen)
Consideration Amount

- 108 -
 Cash 28,037
Contingent consideration 4,681
Total A 32,718

Expenses related to the acquisition were 508 million yen, which were recorded in “Selling, general and administrative
expenses” for the year ended December 31, 2021.

c. Fair value of assets acquired, liabilities assumed and goodwill

(In millions of yen)
Date of acquisition
(December 20, 2021)
Current assets
Cash and cash equivalents 267
Trade and other receivables (Note 2) 375
Inventories 3,024
Other 396
Total current assets 4,062

Non-current assets
Property, plant and equipment 103
Intangible assets 844
Other 2
Total non-current assets 949
Total assets 5,011

Current liabilities
Trade and other payables 2,715
Bonds and borrowings 2,185
Other 1,586
Total current liabilities 6,486

Non-current liabilities
Total non-current liabilities ―

Total liabilities 6,486

Net assets B (1,475)

Goodwill (Note 3) A-B 34,193

(Note) 1. As of December 31 the acquisition was accounted for using provisional amounts determined based on
reasonable information currently available, and since the recognition and fair value measurement of the
identifiable assets acquired and liabilities assumed at the acquisition date have not been finalized, the purchase
price allocation is still preliminary. Currently the valuation of property, plant and equipment and additional
recognition of intangible assets, among other assets and liabilities, have not been completed, except for certain
inventories for which the valuation was able to be completed. As a result, goodwill was provisionally recognized
as the total amount of the excess of the consideration transferred over the net amount of the assets acquired
and liabilities assumed. The identifiable intangible assets are tentatively recorded at the book value as carried
by Celeno.
2. The total contract amount is the same as the fair value, and there are no receivables that are expected to be
unrecoverable.
3. Goodwill reflects future excess earning power expected from synergies between the Company and Celeno. No
amount of goodwill is expected to be deductible for tax purposes.

d. Payments for acquisition of subsidiaries

(In millions of yen)

- 109 -
 Item Amount

Consideration for acquisition in cash 28,037

Cash and cash equivalents held by the acquiree at the time of obtaining control (267)

Amount of cash paid for the acquisition of subsidiaries (net amount) 27,770

The acquisition consideration may change due to price adjustments in response to changes in working capital.

e. Impact on revenue and profit as though the date of the acquisition had been as of the beginning of the fiscal year
(unaudited information)
Assuming that the date of the acquisition of Celeno was at the beginning of the fiscal year, the pro forma information
is not stated since the impact on the consolidated revenue and profit for the year ended December 31, 2021 would not
be material.

f. Revenue and profit / loss of the acquired company

For the year ended December 31, 2021, the revenue and profit of Celeno from the acquisition date to the year of
December 31, 2021 had no significant impact in the consolidated financial statements.

g. Contingent consideration
Contingent consideration includes $45 million which will be paid when certain conditions related to Celeno’s future
product development and mass production progress are met.
The fair value of the contingent consideration is calculated as the present value of the amount that may be paid to
Celeno, with consideration of the probability of occurrence.
The level of the fair value hierarchy for the contingent consideration is level 3. Since the fluctuation after the acquisition
date of the contingent consideration classified in Level 3 is negligible, the reconciliation table is not presented. Of the
amount of change in fair value related to contingent consideration, the portion based on fluctuations in the time value
of money is recorded in "financial expenses", and the portion based on fluctuations other than the time value of money
is recorded in "other income" or "other expenses".

- 110 -
8. Cash and Cash Equivalents
The components of cash and cash equivalents are as described below. The balance of “Cash and cash equivalents” in
the consolidated statement of financial position and the balance of “Cash and cash equivalents” in the consolidated
statement of cash flows as of December 31, 2020 and December 31, 2021 are the same.
(In millions of yen)
As of December 31, As of December 31,
2020 2021
Cash and deposits 190,513 216,364

Short-term investments 29,273 5,560

Total 219,786 221,924

(Note) Cash and cash equivalents are classified as financial assets measured at amortized cost.

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9. Trade and Other Receivables
The components of trade and other receivables are as follows.
(In millions of yen)
As of December 31, As of December 31,
2020 2021
Notes and trade receivables 77,686 136,810

Other receivables 4,751 3,737

Loss allowance (119) (69)

Total 82,318 140,478

(Note) Trade and other receivables are classified as financial assets measured at amortized cost.

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10. Inventories
The components of inventories are as follows.
(In millions of yen)
As of December 31, As of December 31,
2020 2021
Merchandise and finished goods 26,411 38,420

Work in progress 58,138 90,186

Raw materials and supplies 5,212 9,319

Total 89,761 137,925

(Note) The amount of inventories recognized as expenses approximates “Cost of sales.” For write-downs of inventories
previously recognized as an expense as a result of declining profitability, using the reversal method (figures in
parentheses represent reversals) (2,116) million yen and (3,916) million yen were included in “Cost of sales” in the
prior fiscal year and the current fiscal year, respectively.

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11. Other Assets and Liabilities
The components of other current assets and other non-current assets are as follows.
(In millions of yen)
As of December 31, As of December 31,
2020 2021
Prepaid expenses 8,004 16,060

Consumption taxes receivable 1,708 1,766

Other 3,335 3,617

Total 13,047 21,443

Current assets 8,162 12,352

Non-current assets 4,885 9,091

The components of other current liabilities and other non-current liabilities are as follows.
(In millions of yen)
As of December 31, As of December 31,
2020 2021
Accrued expenses 46,138 57,177

Paid leave payables 9,391 11,280

Advances received 818 881

Other 7,015 13,913

Total 63,362 83,251

Current liabilities 58,873 77,235

Non-current liabilities 4,489 6,016

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12. Property, Plant and Equipment
(1) Movement during the fiscal year
The changes in acquisition cost, accumulated depreciation and impairment losses, and the carrying amounts of
property, plant and equipment are as follows.
A. Acquisition Cost
(In millions of yen)
Machinery, Tools,
Buildings and Right-of-use Construction
equipment furniture and Land Total
structures assets in progress
and vehicles fixtures
Balances as of
216,772 677,031 132,445 22,768 23,850 12,878 1,085,744
January 1, 2020
Acquisition 190 1,732 2,265 5,593 ― 16,366 26,146
Acquisition due to
― ― ― ― ― ― ―
business combination
Sales or disposal (703) (5,756) (8,258) (7,619) (205) (92) (22,633)
Transfer from
construction in 748 10,990 4,963 ― ― (16,701) ―
progress
Exchange differences (1,014) (3,539) (4) (114) (156) (61) (4,888)
Other (154) (373) (718) 188 4 (190) (1,243)

Balances as of
215,839 680,085 130,693 20,816 23,493 12,200 1,083,126
December 31, 2020

Acquisition 197 2,960 2,629 2,781 ― 44,605 53,172

Acquisition due to
987 2,983 2,908 3,856 ― 140 10,874
business combination
Sales or disposal (31,327) (81,196) (8,189) (2,923) (118) (572) (124,325)
Transfer from
construction in 1,008 36,479 8,392 ― ― (45,879) ―
progress
Exchange differences 3,047 15,363 3,157 1,316 297 171 23,351
Other (62) (476) (528) (169) ― 472 (763)

Balances as of
189,689 656,198 139,062 25,677 23,672 11,137 1,045,435
December 31, 2021

- 115 -
 B. Accumulated depreciation and impairment losses
(In millions of yen)
Machinery, Tools,
Buildings and Right-of-use Construction
equipment furniture and Land Total
structures assets in progress
and vehicles fixtures
Balances as of
(153,996) (580,702) (107,919) (9,026) (1,465) (57) (853,165)
January 1, 2020
Depreciation (5,224) (41,683) (13,368) (4,974) ― ― (65,249)
Impairment losses (384) (147) (135) (891) ― (513) (2,070)
Sales or disposal 623 5,674 8,173 6,693 114 ― 21,277
Exchange differences 234 2,432 (95) 38 ― ― 2,609
Other 26 233 640 (73) ― ― 826

Balances as of
(158,721) (614,193) (112,704) (8,233) (1,351) (570) (895,772)
December 31, 2020

Depreciation (4,982) (38,285) (11,222) (4,255) ― ― (58,744)

Impairment losses (1) (64) (64) (17) ― ― (146)

Sales or disposal 28,804 80,878 8,137 2,477 26 570 120,892

Exchange differences (1,340) (12,256) (2,577) (492) ― ― (16,665)
Other 90 (494) 965 168 ― ― 729

Balances as of
(136,150) (584,414) (117,465) (10,352) (1,325) ― (849,706)
December 31, 2021

C. Carrying amount
(In millions of yen)
Machinery, Tools,
Buildings and Right-of-use Construction
equipment furniture and Land Total
structures assets in progress
and vehicles fixtures
Balances as of
62,776 96,329 24,526 13,742 22,385 12,821 232,579
January 1, 2020

Balances as of
December 31, 57,118 65,892 17,989 12,583 22,142 11,630 187,354
2020
Balances as of
December 31, 53,539 71,784 21,597 15,325 22,347 11,137 195,729
2021
(Note) 1. The amount of property, plant and equipment under construction is presented as construction in progress.
2. For property, plant and equipment on which a mortgage is placed as collateral for liabilities, see “Note 19.
Bonds and Borrowings.”
3. For commitments to the acquisition of property, plant and equipment, see “Note 36. Commitments and
Contingencies.”
4. Depreciation is included in “Cost of sales” and “Selling, general and administrative expenses” in the
consolidated statement of profit or loss.
5. Impairment losses are included in “Other expenses” in the consolidated statement of profit or loss. For details
on impairment losses, see “Note 15. Impairment of Non-financial Assets.”
6. There are no borrowing costs included in the cost of property, plant and equipment.
7. For details on right-of-use assets, see “Note 14. Leases.”

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13. Goodwill and Intangible Assets
(1) Movement during the fiscal year
The changes in acquisition cost, accumulated amortization and impairment losses, and the carrying amounts of
goodwill and intangible assets are as follows.
A. Acquisition cost
(In millions of yen)
Intangible assets
Goodwill Capitalized
Developed Customer
Software development
technology relationships
Other Total
costs
Balances as of January 1,
625,030 77,990 8,301 355,058 102,575 110,386 654,310
2020
Internally developed ― 1,122 1,840 ― ― ― 2,962

Acquisitions ― 2,566 ― ― ― 39,245 41,811

Acquisition due to business
― ― ― ― ― ― ―
combination
Reclassification ― ― ― 11,049 ― (11,049) ―

Sales or disposal ― (485) (1,714) (1) ― (27,587) (29,787)

Exchange differences (34,571) (42) ― (18,993) (5,090) (1,083) (25,208)

Other ― 66 ― ― ― (307) (241)

Balances as of December
590,459 81,217 8,427 347,113 97,485 109,605 643,847
31, 2020
Internally developed ― 1,298 933 ― ― ― 2,231

Acquisitions ― 1,632 ― ― ― 6,024 7,656

Acquisition due to business
553,811 140 ― 11,739 23,561 5,707 41,147
combination
Reclassification ― ― ― 8,293 ― (8,293) ―

Sales or disposal ― (4,605) (2,230) (51) ― (23,027) (29,913)

Exchange differences 90,330 527 ― 36,485 10,333 5,635 52,980

Other ― 6 ― ― ― 121 127

Balances as of December
1,234,600 80,215 7,130 403,579 131,379 95,772 718,075
31, 2021

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 B. Accumulated amortization and impairment losses
(In millions of yen)
Intangible assets
Goodwill Capitalized
Developed Customer
Software development Other Total
technology relationships
costs
Balances as of
― (59,068) (4,353) (81,705) (17,671) (76,931) (239,728)
January 1, 2020
Amortization ― (6,626) (1,736) (46,494) (6,578) (14,022) (75,456)
Impairment losses ― ― ― ― ― ― ―
Sales or disposal ― 463 1,714 1 ― 27,586 29,764
Exchange
― 12 ― 4,762 626 621 6,021
differences
Other ― 1 ― ― ― 315 316
Balances as of
― (65,218) (4,375) (123,436) (23,623) (62,431) (279,083)
December 31, 2020
Amortization ― (6,188) (1,638) (48,396) (6,682) (14,067) (76,971)
Impairment losses ― (17) ― ― ― ― (17)
Sales or disposal ― 4,367 2,230 51 ― 23,022 29,670
Exchange
― (418) ― (14,370) (2,389) (2,436) (19,613)
differences
Other ― 8 ― ― ― (100) (92)
Balances as of
― (67,466) (3,783) (186,151) (32,694) (56,012) (346,106)
December 31, 2021

C. Carrying amount
(In millions of yen)
Intangible assets
Goodwill Capitalized
Developed Customer
Software development Other Total
technology relationships
costs
Balances as of
625,030 18,922 3,948 273,353 84,904 33,455 414,582
January 1, 2020
Balances as of
590,459 15,999 4,052 223,677 73,862 47,174 364,764
December 31, 2020
Balances as of
1,234,600 12,749 3,347 217,428 98,685 39,760 371,969
December 31, 2021
(Note) 1. Of software in intangible assets, the carrying amount classified as internally generated assets was 856 million
yen as of December 31, 2019 and 711 million yen as of December 31, 2020.
2. Construction in progress related to software is included in “Software” under intangible assets.
3. Intangible assets through installment purchase contracts (license fees) are included in “Other” under intangible
assets.
4. There are no intangible assets with restrictions on ownership or intangible assets on which a mortgage is
placed as collateral for liabilities.
5. For commitments related to the acquisition of intangible assets, see “Note 36. Commitments and
Contingencies.”
6. Amortization of intangible assets is included in “Cost of sales” and “Selling, general and administrative
expenses” in the consolidated statement of profit or loss.
7. Impairment losses are included in “Other expenses” in the consolidated statement of profit or loss. For details
on impairment losses, see “Note 15. Impairment of Non-financial Assets.”

(2) Significant intangible assets

Major intangible assets are developed technology acquired in the business combination with former Intersil in
February 2017, former IDT in March 2019 and Dialog in August 2021. The carrying amount of developed technology
acquired in the business combination was223,677 million yen as of December 31, 2020 and 217,428 million yen as of
December 31, 2021, and the remaining amortization period as of December 31, 2021 is 2 to 9 years. The carrying
amount of customer relationships was 73,862 million yen as of December 31, 2020 and 98,685 million yen as of
December 31, 2021, and the remaining amortization period as of December 31, 2021 is 9 to 11 years. The intangible
assets acquired in the business combination of Dialog are preliminarily recorded at the book value of Dialog.

(3) Intangible assets not yet available for use

The carrying amount of intangible assets not yet available for use is included in “Other” and was 9,522 million yen
as of December 31, 2020 and 4,509 million yen as of December 31, 2021 and represents in-process research and
development. In-process research and development is reclassified as “Developed technology” and starts to be

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amortized when the development has been completed and the related technology has been put in operational use.
The amount of reclassification was 11,049 million yen for the year ended December 31, 2020 and 8,293 million yen
for the year ended December 31, 2021.

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14. Leases
(1) Leases as lessee
A. Lease expenses, income and cash flows
Lease expenses, income and cash flows are as follows.
(In millions of yen)
The year ended The year ended
December 31, 2020 December 31, 2021
Depreciation charge for right-of-use assets by class of
underlying asset

Land 93 92

Buildings 2,861 2,766

Machinery, equipment and vehicles 1,892 1,268

Tools, furniture and fixtures 128 129

Total 4,974 4,255

Interest expense on lease liabilities 226 272

Expense relating to short-term leases 2,548 2,734

Expense relating to leases of low-value assets

437 349
(excluding short-term leases)
Expense relating to variable lease payments which are
― ―
not reflected in the measurement of lease liabilities

Income from subleasing right-of-use assets ― ―

Total cash outflows for leases 8,071 7,926

Gain (loss) from sale and leaseback transactions ― ―

B. Right-of-use assets which are included in the carrying amount of property, plant and equipment
The carrying amount and the increase/decrease in carrying amount of right-of-use assets which are included in
the carrying amount of property, plant and equipment are as follows.
(In millions of yen)
Balance as of Balance as of
December 31, 2020 December 31, 2021

Land 175 118

Buildings 8,759 12,110

Machinery, equipment and
3,513 2,871
vehicles
Tools, furniture and fixtures 136 226

Total 12,583 15,325

(Note) The increased amount of right-of-use assets for the fiscal year ended December 31, 2020 was 5,593 million
yen.

C. Nature of the leasing activities

The Group leases land, building, machinery, equipment and vehicles.
The terms of lease contracts are negotiated individually and include a wide variety of the terms of contracts.

D. Options of extension and termination

The options of extension and termination are included in many lease contracts for buildings, machinery and
equipment. The lease term for office buildings is mainly from 3 to 10 years and for machinery and equipment, its term
is from 3 to 5 years. Some contracts include an option to extend the lease for a period of one year or the same lease
years for the current lease contract after the termination date. In addition, some contracts include an option for early
termination when the lessee notifies the lessor between six months to one year before the termination date.
These options will be utilized to maximize operational flexibility from the point of asset management used in the
Group’s businesses.

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15. Impairment of Non-financial Assets
The Group recorded impairment losses for the assets below. Impairment losses are included in “Other expenses” in the
consolidated statement of profit or loss.
The components of assets for which the impairment losses are recorded are as follows.

The year ended December 31, 2020

(In millions of yen)
Reportable segments
Industrial/ Total
Automotive
Infrastructure/IoT
Property, plant and equipment 1,275 795 2,070
Total 1,275 795 2,070

The year ended December 31, 2021

(In millions of yen)
Reportable segments
Industrial/ Total
Automotive
Infrastructure/IoT
Property, plant and equipment 76 42 118
Intangible assets 8 9 17
Total 84 51 135
(Note) 1. Impairment losses recognized as for right-of-use assets are included in the impairment losses of property, plant
and equipment. The amount included in the impairment losses of property, plant and equipment was 891 million
yen for the year ended December 31, 2020 and 17 million yen for the year ended December 31, 2021.
2. The impairment losses (28 million yen) due to the fire which occurred in the current fiscal year are not included
in the table above.

(1) Impairment losses

The Group assesses impairment at the grouping level of a smallest identifiable group that generates cash inflows
that are largely independent, based on the categories used for business management. The Group assesses impairment
by each individual asset for significant assets to be disposed of and idle assets.

For the year ended December 31, 2020

(Assets to be disposed of)

For the Automotive and Industrial/Infrastructure/IoT business, the Group performs impairment tests as independent
cash-generating units for the assets that have been decided to be disposed and writes down the carrying amount of
assets to their recoverable amount. As a result, the Group has recorded impairment losses of 168 million yen.
The recoverable amount is measured at the fair value after deducting disposal costs. The fair value after deducting
disposal costs is set at zero for assets difficult to sell or the selling amount is estimated and the hierarchy level of the
fair value is 3.

(Idle assets)
For the Automotive and Industrial/Infrastructure/IoT business, the Group performs impairment tests as independent
cash-generation units, writes down the carrying amount of idle assets that are unlikely to be used to their recoverable
amount, and recorded impairment losses of 1,902 million yen.
The recoverable amount is measured at the fair value after deducting disposal costs. The fair value after deducting
disposal costs is set at zero because it is difficult to sell these assets, and the hierarchy level of the fair value is 3.

For The year ended December 31, 2021

(Assets to be disposed of)

For the Automotive and Industrial/Infrastructure/IoT business, the Group performs impairment tests as independent
cash-generating units for the assets that have been decided to be disposed and writes down the carrying amount of
assets to their recoverable amount. As a result, the Group has recorded impairment losses of 82 million yen.
The recoverable amount is measured at the fair value after deducting disposal costs. The fair value after deducting
disposal costs is set at zero for assets difficult to sell or the selling amount is estimated and the hierarchy level of the
fair value is 3.

(Idle assets)
For the Automotive and Industrial/Infrastructure/IoT business, the Group performs impairment tests as independent
cash-generation units, writes down the carrying amount of idle assets that are unlikely to be used to their recoverable
amount, and recorded impairment losses of 53 million yen.
The recoverable amount is measured at the fair value after deducting disposal costs. The fair value after deducting
disposal costs is set at zero because it is difficult to sell these assets, and the hierarchy level of the fair value is 3.

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(2) Impairment test of goodwill and intangible assets not yet available for use
The Group performs impairment tests for cash-generating units to which goodwill and intangible assets not yet
available for use are allocated at a certain time each fiscal year and whenever there is any indication of impairment.
Goodwill recorded in the consolidated statement of financial position was recognized when the Company merged
with former Intersil for the fiscal year ended December 31, 2017 and former IDT for the fiscal year ended December 31,
2019 and it is allocated to the cash-generating units of the Group expected to provide future excess earning power
arising from synergies of these business combinations.
In the impairment test, goodwill and intangible assets not yet available for use that were allocated to the cash-
generating units of the Group are as follows.

(In millions of yen)

As of December 31, As of December 31,
Reportable segments Cash-generating units
2020 2021
Automotive Automotive 231,401 257,157
Goodwill Industrial/ Industrial/
359,058 399,022
Infrastructure/IoT Infrastructure/IoT
In-process Automotive Automotive 2,070 2,300
research and Industrial/ Industrial/
development 7,452 230
Infrastructure/IoT Infrastructure/IoT
(Note) In the current fiscal year, goodwill (578,421 million yen) and intangible assets not yet available for use (1,979
million yen) recognized in connection with the acquisitions of Dialog and Celeno were not included in the table
above since the recognition and fair value measurement of the identifiable assets acquired and liabilities assumed
at the acquisition date have not been finalized. For details, please refer to “Note 7. Business Combinations.”

The recoverable amount of the cash-generating units is measured at the value in use. The value in use is calculated
by discounting the cash flows, which is estimated based on the five-year business plan approved by management
and the estimated permanent growth rate for the period thereafter, to the present value using the pre-tax discount
rate. Significant assumptions which have an impact to the calculation of the value in use include gross margin in the
business plan, permanent growth rate, discount rate and others. These assumptions are determined in the
consideration of past experiences and external information.
Additionally, the Group includes the estimated impact of COVID-19 to estimates and assumptions which are based
on information available and management believes to be reasonable at the moment.
For cash flows in a period beyond the target period of the future business plan approved by management, the value
in use is calculated using the permanent growth rate as 1.7% the current fiscal year (2.0% in the prior fiscal year).
The approved permanent growth rate is determined based on the estimated inflation rate of the market to which the
cash-generating units belong.
The discount rates are the weighted average capital cost before tax. The discount rates used for the calculation of
the value in use are 10.1% in the Automotive Business in the current fiscal year (11.7% in the prior fiscal year) and
10.8% in the Industrial/Infrastructure/IoT Business in the current fiscal year (11.2% in the prior fiscal year).
Because the recoverable amount of cash-generating units sufficiently exceeds the carrying amount in the current
fiscal year, management believes that it is unlikely that the recoverable amount of the cash-generating units will be
lower than the carrying amount even if the major assumptions (Gross margin/ Permanent growth rate/ Discount rate
before tax) used in the impairment test are changed in a reasonable range.
The following table shows the range of reasonably expected fluctuation of the major assumptions (Gross margin/
Permanent growth rate/ Discount rate before tax) used in the impairment test.

Major assumptions Cash-generating units Prior fiscal year Current fiscal year
Automotive 35~45% 35~45%
Gross margin
Industrial/ Infrastructure/IoT 50~60% 50~60%
Automotive
Permanent growth rate 1.5~2.5% 1.2~2.2%
Industrial/ Infrastructure/IoT
Discount rate before Automotive 10.7~12.7% 8.1~12.1%
tax Industrial/ Infrastructure/IoT 10.2~12.2% 9.8~11.8%

The Group recognized no impairment losses during the current year and the prior year since the value in use of
the cash generating units exceeded the carrying amount as a result of the impairment test.

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16. Other Financial Assets
(1) Components of other financial assets
The components of other financial assets are as follows.
(In millions of yen)

As of December 31, 2020 As of December 31, 2021

Stocks (Note 1) 4,740 8,849

Investment trust (Note 2) 4,160 5,475

Long-term accounts receivable
8,350 18,794
(Note 3)
Other (Note 4) 1,456 2,252

Total 18,706 35,370

Current assets 605 737

Non-current assets 18,101 34,633

(Note) 1. Stocks are classified either as equity instruments measured at fair value through other comprehensive income
or financial assets measured at fair value through profit or loss (see “Note 33. Financial Instruments”).
2. Investment trust is classified as financial assets measured at fair value through profit or loss.
3. “Long-term accounts receivable” mainly includes financial assets measured at amortized cost which are recorded
in accordance with the ship and debit programs. For details on the ship and debit programs, please refer to “Note
33. Financial Instruments.”
4. Term deposits with a deposit term of more than three months and security deposits are included in “Other.” These
assets are classified as financial assets measured at amortized cost.

(2) Equity instruments measured at fair value through other comprehensive income
Name of major equity instruments and their fair value, etc. measured at fair value through other comprehensive income
are as follows.
(In millions of yen)
Company name As of December 31, 2020 As of December 31, 2021

LeddarTech Inc. 1,035 1,150

(3) Derecognized equity instruments measured at fair value through other comprehensive income
The fair value and cumulative losses (before tax) as of the date of derecognition of equity instruments measured at
fair value through other comprehensive income that were derecognized during the period are as follows.
(In millions of yen)

As of December 31, 2020 As of December 31, 2021

Fair value ― ―

Cumulative losses (429) ―

(Note) When equity instruments measured at fair value through other comprehensive income are derecognized,
cumulative losses (after tax) previously recognized in other comprehensive income are reclassified to retained
earnings. Such amount reclassified to retained earnings was 330 million yen in the prior fiscal year.

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17. Income Taxes
(1) Components of and changes in deferred tax assets and deferred tax liabilities
The components of and changes in deferred tax assets and deferred tax liabilities by major causes of their occurrence
are as follows.

(The year ended December 31, 2020)

(In millions of yen)
Recognized in
As of As of
Recognized in other Business
January 1, December 31,
profit or loss comprehensive combination
2020 2020
income

Deferred tax assets

Inventories 5,825 (494) ― ― 5,331

Property, plant and
5,448 1,476 ― ― 6,924
equipment and other
Research and
1,415 (692) ― ― 723
development expense
Accrued expenses 10,884 619 ― ― 11,503

Retirement benefit liability 6,505 (1,540) 162 ― 5,127

Carryforward of unused tax
29,950 (14,359) ― ― 15,591
losses
Carryforward of unused tax
5,098 4,004 ― ― 9,102
credits
Other 12,189 2,066 ― ― 14,255

Subtotal 77,314 (8,920) 162 ― 68,556

Deferred tax liabilities

Intangible assets and other (64,857) 9,910 ― ― (54,947)
Tax on undistributed
(5,987) (163) ― ― (6,150)
earnings
Total income from
specified foreign (912) (201) ― ― (1,113)
subsidiaries, etc.
Other (2,765) (1,760) 99 ― (4,426)

Subtotal (74,521) 7,786 99 ― (66,636)

Net deferred tax assets
2,793 (1,134) 261 ― 1,920
(liabilities)

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 (The year ended December 31, 2021)
(In millions of yen)
Recognized in
As of As of
Recognized in other Business
January 1, December 31,
profit or loss comprehensive combination
2021 2021
income

Deferred tax assets

Inventories 5,331 (1,104) ― ― 4,227

Property, plant and
6,924 407 ― ― 7,331
equipment and other
Research and
723 1,506 ― ― 2,229
development expense
Accrued expenses 11,503 3,670 ― ― 15,173

Retirement benefit liability 5,127 (660) 452 ― 4,919

Carryforward of unused tax
15,591 (381) ― 4,336 19,546
losses
Carryforward of unused tax
9,102 (2,108) ― 1,996 8,990
credits
Other 14,255 161 ― 681 15,097

Subtotal 68,556 1,491 452 7,013 77,512

Deferred tax liabilities

Intangible assets and other (54,947) 4,881 ― (6,887) (56,953)
Tax on undistributed
(6,150) (2,526) ― ― (8,676)
earnings
Total income from
specified foreign (1,113) (346) ― ― (1,459)
subsidiaries, etc.
Other (4,426) 3,171 285 (3,269) (4,239)

Subtotal (66,636) 5,180 285 (10,156) (71,327)

Net deferred tax assets
1,920 6,671 737 (3,143) 6,185
(liabilities)
(Note) The Group considers the possibility that a portion of, or all of, the deductible temporary differences or carryforward
of unused tax losses can be utilized against future taxable profits in the recognition of deferred tax assets.
Deferred tax liabilities related to intangible assets and other include those that are related to an uncertain tax
position at an overseas subsidiary and calculated using the expected value method.
The Group reflects the impact of COVID-19 to estimates and assumptions to a reasonable extent based on
available information. The Group reflects the impact in estimating collectability of deferred tax assets.
The differences between total amount recognized in profit or loss and total amount of the deferred tax expenses
are due to changes in foreign exchange rate.

- 125 -
 (2) Deductible temporary differences, etc. for which no deferred tax assets are recognized
The amounts of deductible temporary differences, carryforward of unused tax losses and carryforward of unused tax
credits for which no deferred tax assets are recognized are as follows.
(In millions of yen)
As of December 31, As of December 31,
2020 2021
Deductible temporary differences ― 2,639
Carryforward of unused tax
210,142 25,076
losses
Carryforward of unused tax
16,178 18,154
credits
Total 226,320 45,869
(Note) Deductible temporary differences and carryforward of unused tax losses are measured on an income basis, and
carryforward of unused tax credits is measured on a tax amount basis.

The expiration schedule of the carryforward of unused tax losses for which no deferred tax assets are recognized is
as follows.
(In millions of yen)
As of December 31, As of December 31,
2020 2021
First year 197,441 ―

Second year 7,531 ―

Third year ― ―

Fourth year ― ―

Fifth year or thereafter 5,170 25,076

Total 210,142 25,076

The expiration schedule of the carryforward of unused tax credits for which no deferred tax assets are recognized
is as follows.
(In millions of yen)
As of December 31, As of December 31,
2020 2021
First year ― ―

Second year ― ―

Third year ― ―

Fourth year ― ―

Fifth year or thereafter 16,178 18,154

Total 16,178 18,154

The Group adopts the consolidated taxation system in Japan. The above figures do not include the amount of the
carryforward of unused tax losses for which no deferred tax asset is recognized for local taxes (residential tax and
business tax) that are not subject to the consolidated taxation system in Japan. The amount of the carryforward of
unused tax losses for local taxes (residential tax and business tax) was 11,755 million yen for residential tax and
265,151 million yen for business tax in the prior fiscal year (as of December 31, 2020) and 17,185 million yen for
residential tax and 97,101 million yen for business tax in the current fiscal year (as of December 31, 2021).

(3) Components of income tax expense

The components of income tax expense are as follows.
(In millions of yen)

The year ended The year ended

December 31, 2020 December 31, 2021

Current tax expense

Current tax expense 14,493 34,228

Tax expense from previous periods 1,835 1,177

Total current tax expense 16,328 35,405

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Deferred tax expense

Origination and reversal of temporary differences 3,385 3,706

Effects from tax regulation changes (5) (62)

Revaluation of deferred tax assets 294 (13,821)

Other (512) (177)

Total deferred tax expense 3,162 (10,354)

Total income tax expense 19,490 25,051

(Note) 1. Current tax expense includes the amount of previously unrecognized tax loss, tax credits or temporary differences
of a prior period, and decreases by 6,008 million yen and 16,226 million yen in the prior fiscal year and the current
fiscal year, respectively.
2. Current deferred tax expense decreases by 2,369 million yen in the current fiscal year includes the amount of
previously unrecognized tax loss, tax credits or temporary differences of a prior period. Current deferred tax
expense in the prior fiscal year does not include the amount of previously unrecognized tax loss, tax credits or
temporary differences of a prior period.
3. Current deferred tax expense includes the amount of previously unrecognized tax loss, tax credits or temporary
differences of a prior period and increases by 4,900 million yen in the prior fiscal year and decreases by 2,369
million yen in the current fiscal year.

(4) Reconciliation of the statutory effective tax rate and the average effective tax rate
The reconciliation of the statutory effective tax rate and the average effective tax rate is as follows.
(%)

The year ended The year ended

December 31, 2020 December 31, 2021

Statutory effective tax rate (Note) 31.5 31.5

Changes in unrecognized deferred tax assets (1.4) (10.7)

Permanent differences 1.2 (1.9)

Foreign tax rate differences 2.0 (1.9)

Tax credits (6.8) (3.7)

Tax on undistributed earnings 0.2 1.7

Other 3.1 1.6

Average effective tax rate 29.8 16.4

(Note) The applicable statutory effective tax rate is the sum of 24.4% for national taxes and 7.1% for local taxes.
Major taxes imposed on the Company and its subsidiaries in Japan are income tax, residential tax and business
tax. The applicable statutory effective tax rate in Japan is 31.5% in the prior fiscal year and current fiscal year.
Income taxes for overseas subsidiaries are calculated based on local tax rates applicable in their jurisdictions.

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18. Trade and Other Payables
The components of trade and other payables are as follows.
(In millions of yen)
As of December 31, As of December 31,
2020 2021
Trade payables 67,008 104,775

Other payables 47,433 59,262

Electronically recorded obligations 7,852 14,808

Refund liabilities 17,119 40,585

Total 139,412 219,430

Current liabilities 114,235 204,330

Non-current liabilities 25,177 15,100

(Note) Trade and other payables are classified as financial liabilities measured at amortized cost.

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19. Bonds and Borrowings
(1) The components of bonds are as follows.
(In millions of yen)

Interest As of December 31, As of December 31,

Issuance date Maturity date
rate 2020 2021
USD-denominated Senior
November November
Notes due 2024 1.543% ― 57,170
26, 2021 26, 2024
(Green Bonds) (Note 3)
USD-denominated Senior November November
2.170% ― 97,189
Notes due 2026 (Note3) 26, 2021 25, 2026
Others (Note4) 11 13

Total 11 154,372
Reclassification
― 179
to bond issuance costs
Current liabilities 11 13

Non-current liabilities ― 154,538

(Note) 1. Bonds are classified as financial liabilities measured at amortized cost.
2. For the balance of bonds by maturity, see “Note 33. Financial Instruments.”
3. On November 19, 2021, the Company has decided to issue senior notes denominated in USD in multiple
tranches (One of the tranches of the notes will be green bonds, proceeds from which will be used solely for
projects that are expected to contribute to the global environment).The Company issued USD-denominated
Senior Notes due 2024 (Green Bonds, Principal amount: USD 500million, Interest rate: 1.543%, Maturity Date:
November 26, 2024) and USD-denominated Senior Notes due 2026 (Principal amount: USD 850million,
Interest rate: 2.170%, Maturity Date: November 25, 2026) on November 26, 2021, raising a total of USD 1,350
million.
To reduce the risk of foreign exchanges in the USD-denominated Senior Notes, the Group uses currency
swaps. The currency swap is designated as a hedge. For details on hedge accounting, see “Note 33. Financial
Instruments.”
4. Convertible bonds that former IDT issued in 2015 were substantially repaid in 2019.

(2) The components of borrowings are as follows.

(In millions of yen)
Average As of December 31, As of December 31,
Maturity
interest rate 2020 2021
Syndicated loan A From Mar.2019
0.807% 302,803 44,632
(Note 4) to Mar.2024
Syndicated loan B From Mar.2019
0.807% 232,150 232,150
(Note 4) to Mar.2024
Syndicated loan C From Jun.2019
0.807% 148,850 144,260
(Note 4) to Jun.2024
Loan contract on
From Dec.2021
December 23, 2021 0.807% ― 96,000
to Dec.2026
(Note 5)
JBIC loan contract on
From Dec.2021
December 23, 2021 0.250% ― 144,000
to Dec.2026
(Note 5)
Others (Note 6) ― 1,095
Total
683,803 662,137

Less: Arrangement fee (4,070) (2,600)

Current liabilities 93,170 121,092

Non-current liabilities 586,563 538,445

(Note) 1. Borrowings are classified as financial liabilities measured at amortized cost.
2. For the balance of borrowings by maturity, see “Note 33. Financial Instruments.”
3. Our borrowings have financial covenants that require us to maintain a certain level of net assets, operating
profit / loss, and profit / loss, and the ratio of interest-bearing debt to EBITDA should not exceed a certain level.
We comply with the financial covenants.
4. In order to refinance the existing borrowings to finance partial funds necessary for the acquisition of former IDT

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 and working capital as the medium-and-long term funds, the Company has entered into a syndicated loan
agreement with the total amount of 897,000 million yen on January 15, 2019. During the year ended December
31, 2019, 698,000 million yen of term loan with availability period (Syndicated loan A and B, Implementation
date: March 28, 2019, Repayment date: March 28, 2024, participating financial institutions: MUFG Bank, Ltd.,
Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited and other 5 financial institutions) has been executed.
In addition, During the year ended December 31, 2019, borrowings of 149,000 million yen of term loan
(Syndicated loan C, Implementation date: June 28, 2019, Repayment date: June 28, 2024, participating
financial institutions: MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited) have been
conducted to refinance the existing term loan.
On November 10, 2021, the Company made the following changes on this loan contract. (1) Setting
the installment repayment date of Syndicated Loan B, (2) Early payment of Syndicated Loan A upon the issuance
of US Dollar-Denominated Senior Notes, and (3) Cancellation of guaranteed contract and stock collateral for
Syndicated Loans A and B.
5. To raise a portion of the funds for the Dialog acquisition, the Company entered into a loan agreement (Facilities
Agreement) with MUFG Bank, Ltd. and Mizuho Bank, Ltd. with a borrowing limit of 735,400 million yen on
February 8, 2021.
The Company also has entered into an amendment agreement (the “Amendment Agreement”) with MUFG Bank,
Ltd. and Mizuho Bank, Ltd. to partially amend the Facilities Agreement on June 30, 2021. Both net proceeds from
the fundraising through the issuance of new shares in June 2021, and Renesas’ cash on hand are appropriated
for the funds of the Dialog acquisition. Among the loan facilities, the amount has been amended in the
Amendment Agreement. The borrowing limit has been reduced for part of the loan agreement as the planned
currency hedge has been completed. Following the Amendment, the borrowing limit has changed from the initial
amount of 735,400 million yen to 665,400 million yen.
On August 31, 2021, the Company had borrowed 270,000 million yen from MUFG Bank, Ltd. and Mizuho Bank,
Ltd. under the Amended Agreement with the last repayment date of February 7, 2022, and interest rate of 0.835%.
With the purpose of refinancing 240,000 million yen of the above loans (after the repayment of 30,000 million
yen) to mid- to long-term funds, on December 23, 2021, the Company has entered into the syndicate loan
agreement (Loan amount: 96,000 million yen, Execution date of agreement: December 23, 2021, Borrowing date:
December 30, 2021, Repayment date: End of December, 2026, Participating financial institutions: MUFG Bank,
Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited., Resona Bank, Limited., Aozora Bank, Ltd., Shinkin
Central Bank, The Norinchukin Bank, Bank of America NA Tokyo Branch) and a JBIC loan agreement (Loan
amount: 144,000 million yen, Execution date of agreement: December 23, 2021, Borrowing date: December 30,
2021, Repayment date: End of December, 2026, Participating financial institutions: Japan Bank of International
Cooperation). On December 30, 2021, the Company borrowed a total of 240,000 million yen under these
agreements and fully repaid the remaining amount of the loans dated August 31, 2021.
6. Others mainly include short-term borrowings of overseas subsidiaries.

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 (3) Assets pledged as collateral and corresponding liabilities as of each fiscal year end are as follows.
A. Assets pledged as collateral
(In millions of yen)
As of December 31, As of December 31,
2020 2021
Buildings and structures 35,480 31,190

Machinery, equipment and vehicles 33,708 36,691

Land 16,720 16,628

Total 85,908 84,509

(Note) Other than the above, stock of subsidiary (1,148,461 million yen for December 31, 2020 and 638,826 million yen
for December 31, 2021) which are eliminated on the Consolidated Statement of Financial Position, are
collateralized.

B. Liabilities corresponding to assets pledged as collateral

(In millions of yen)
As of December 31, As of December 31,
2020 2021
Current portion of long-term borrowings 93,170 120,014
Long-term borrowings
586,563 538,441
(Excluding current portion)
Total 679,733 658,455

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20. Other Financial Liabilities
The components of other financial liabilities are as follows.
(In millions of yen)
As of December 31, As of December 31,
2020 2021
Derivative liabilities (Note 1) ― 1,550

Lease liabilities 13,977 16,810

Contingent consideration
― 4,681
(Note 1, 2)
Other 300 ―

Total 14,277 23,041

Current liabilities 4,036 11,505

Non-current liabilities 10,241 11,536

(Note) 1. Derivative liabilities are classified as financial liabilities measured at fair value through profit or loss. For details,
please refer to “Note 33. Financial Instruments.”
2. For details, please refer to “Note 7. Business Combinations.”

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21. Provisions
The components of provisions and their changes are as follows.
(In millions of yen)
Asset Provision for Provision for
Other
retirement business loss on Total
provisions
obligations restructuring litigation
Balances as of December 31, 2020 2,926 3,381 2,864 245 9,416

Current liabilities 21 3,253 2,864 245 6,383

Non-current liabilities 2,905 128 ― ― 3,033

Increase during the period 39 3,102 4,720 1,101 8,962

Acquisition due to business
381 672 ― 202 1,255
combination
Decrease during the period
(79) (2,971) (946) (146) (4,142)
(payment)
Decrease during the period
(57) (730) (11) (102) (900)
(reversal)
Period interest expense in discount
18 ― ― ― 18
calculation
Other 24 (25) 329 43 371

Balances as of December 31, 2021 3,252 3,429 6,956 1,343 14,980

Current liabilities 95 3,297 6,956 837 11,185

Non-current liabilities 3,157 132 ― 506 3,795

A. Asset retirement obligations

The expected amount related to performing obligations necessary to restore assets to their original state under the
real estate lease agreements of offices and plants used by the Group and legal obligations to remove hazardous
substances related to non-current assets is recorded as a provision. The amount of asset retirement obligations was
computed using an estimated useful life of 3 to 47 years as well as a discount rate of 0.1% to 10.5%, although the
timing of payments will be affected by future business plans, and other factors.

B. Provision for business restructuring

Provision for business restructuring is recorded for expected future losses in connection with business structure
reform and consolidation. The timing of payments will be affected by future business plans, and other factors.

C. Provision for loss on litigation

The Group records the estimated amount of reasonably calculated losses, considering individual risks, for losses
on litigation which could be incurred in the future from lawsuits and disputed cases. For details, please refer to “Note
36. Commitments and Contingent Liabilities, (4) Others.”

D. Other provisions
Other provisions include a provision for product warranties and a provision for an onerous contract.

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22. Employee Benefits
The Group adopts post-employment benefit plans such as a defined benefit plan and a defined contribution plan, except
for some overseas consolidated subsidiaries.
(1) Defined benefit plans
A. Characteristics of defined benefit plans and related risks
The characteristics of defined benefit plans and related risks are as follows.
(a) Characteristics of defined benefit plans
The defined benefit plans of the Company and its subsidiaries in the Group include (i) a severance indemnity
plan and (ii) a defined benefit corporate pension plan. The Group may also provide extra retirement payments upon
the retirement of employees.
(i) The severance indemnity plan is an unfunded plan to make a lump-sum payment only with an internal reserve
without making an external reserve for the obligations of the retirement benefit plans. As the lump-sum payment
is paid in an amount based on salaries and number of service years in accordance with the retirement allowance
regulations including the rules of employment of each company.
(ii) The defined benefit corporate pension plan is a defined benefit pension and a funded plan established under
the Defined Benefit Corporate Pension Act (enforced in April 2002). It is a fund-type corporate pension, and a
lump-sum payment or an annuity is paid from the fund based on salaries and number of service years. In the
defined benefit corporate pension plan, administrators of the corporate pension, such as the executive directors
of the employer and the fund, abide by laws, regulations and asset management and investment contracts, etc.,
and their standards of practice such as the prohibition of acts involving conflicts of interest against the
participants in the plan have been clearly defined.
In the defined benefit corporate pension plan, the amount of benefits is calculated based on the cumulative
number of points granted to employees according to their job classification. The Company and its subsidiaries
in Japan adopt a cash balance pension plan for the defined benefit corporate pension plan. Some of the
Company's overseas subsidiaries adopt externally funded pension plans such as trust funds for the defined
benefit corporate pension plan. Under those pension plans, each participant has an account in which a certain
amount calculated by the revaluation rate that is determined based on the current base salary, the job
classification and the market interest rate is accumulated.
(b) Risks to which an entity is exposed by the plan.
The Group is exposed to actuarial risks such as price fluctuation risk by plan assets and interest rate risk by
present value of obligations of the defined benefit plans.

B. Amounts recognized in the consolidated statement of financial position

The amounts recognized in the consolidated statement of financial position are as follows.
(In millions of yen)
As of December 31, As of December 31,
2020 2021
Present value of obligations of the funded defined
124,029 120,091
benefit plans (with plan assets)
Fair value of plan assets (145,862) (152,382)

Funded status (21,833) (32,291)

Impact of asset ceiling 22,767 32,929

Present value of obligations of the unfunded defined
29,078 27,288
benefit plans (without plan assets)
Net amount of liabilities (assets) pertaining to defined
benefits recognized in the consolidated statement of 30,012 27,926
financial position
Retirement benefit liability 30,012 27,926

Retirement benefit asset ― ―

As of December 31, 2020, the present value of obligations of the funded defined benefit plans (with and without plan
assets) was 124,135 million yen for domestic plans and 28,972 million yen for overseas plans. And the fair value of plan
assets was (125,769) million yen for domestic plans and (20,093) million yen for overseas plans.

As of December 31, 2021, the present value of obligations of the funded defined benefit plans (with and without plan
assets) was 116,990 million yen for domestic plans and 30,389 million yen for overseas plans. And the fair value of plan
assets was (129,925) million yen for domestic plans and (22,457) million yen for overseas plans.

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 C. Changes in the present value of defined benefit obligation
The changes in the present value of defined benefit obligation are as follows.
(In millions of yen)

The year ended The year ended

December 31, 2020 December 31, 2021

Present value of defined benefit obligation (beginning) 156,196 153,107

Service cost 2,572 2,360

Interest expenses 969 1,000

Benefits paid (5,981) (10,088)

Remeasurements of defined benefit plans

(i) Actuarial differences arising from changes in
82 (670)
demographic assumptions
(ii) Actuarial differences arising from changes in
204 (535)
financial assumptions
(iii) Revisions to other results (1,269) (908)

Effects of business combination and disposal ― 525

Exchange differences (132) 2,411

Other 466 177

Present value of defined benefit obligation (ending) 153,107 147,379

The weighted average duration of the defined benefit obligation in each fiscal year is as follows.
The year ended The year ended
December 31, 2020 December 31, 2021

Weighted average duration 12.7 years 12.0 years

D. Changes in the fair value of plan assets

Changes in the fair value of plan assets are as follows.
(In millions of yen)

The year ended The year ended

December 31, 2020 December 31, 2021

Fair value of plan assets (beginning) 144,613 145,862

Interest income 950 1,016

Remeasurement – Return on plan assets 3,319 8,453

Contributions by employer (Note 1) 2,258 2,323

Benefits paid (4,710) (7,805)

Effects of business combination and disposal ― 434

Exchange differences (547) 2,194

Other (21) (95)

Fair value of plan assets (ending) 145,862 152,382

(Note) 1. Contributions to the defined benefit plans in the Group are made in consideration of factors such as the financial
position of the Group, the funding situation of plan assets and actuarial factors based on laws and regulations.
In the fiscal year ending December 31, 2022, 2,068 million yen is planned to be contributed to the defined benefit
pension plans.
2. The purpose of the investment of plan assets of the Group is to secure necessary revenue in the long term within
the acceptable range of risks in order to provide benefits to beneficiaries reliably in the future.
The target rate of return aims to exceed the assumed interest rate required for the financial position of the pension
scheme on a stable basis for the long term.
The Group has set a “policy asset mix” to achieve the investment target and attempts to make an investment to
maintain the asset mix based on the policy asset mix. The asset mix is reviewed as necessary and tailored to
changes in the situation of the Group and the institution and the environment surrounding the Group.

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 3. Some consolidated subsidiaries participate in a multi-employer defined benefit pension plan.

E. Changes in the impact of the asset ceiling

The changes in the impact of the asset ceiling are as follows.
(In millions of yen)

The year ended The year ended

December 31, 2020 December 31, 2021

Impact of asset ceiling (beginning) 17,989 22,767

Interest income 149 131

Remeasurement – Changes in the impact of the asset
4,725 10,042
ceiling
Exchange differences (169) 161
Other 73 (172)

Impact of the asset ceiling (ending) 22,767 32,929

(Note) The Group sets the asset ceiling and calculates liabilities in some of its pension plans because economic benefits
could not be enjoyed as a result of contributions that will not be reduced or returned in the future.

F. Components of fair value of plan assets by type

The components of the fair value of plan assets by type are as follows.
(In millions of yen)
As of December 31, 2020 As of December 31, 2021

Equity instruments
Domestic equity securities 18,391 11,750
Foreign equity securities 21,355 25,787
Debt instruments
Domestic bonds 12,703 12,743
Foreign bonds 26,683 28,368
General accounts of life insurance company 34,280 35,714
Cash and cash equivalents 1,889 5,650
Other 30,561 32,370

Total 145,862 152,382

(Note) Most of plan assets are operated through commingled funds and classified as those with no public market price
in active markets. These commingled funds are appropriately diversified into stocks and debts that generally
listed in active market based on corporate pension fund code. “General accounts of life insurance company” are
the accounts that the life insurance company jointly manages the funds with several contracts and includes a
guaranteed interest rate and return of capital. The major components of "Other" represent alternative
instruments that are invested using long/short positions and securitized products.

G. Major actuarial assumptions

Major actuarial assumptions (weighted average) are as follows.
As of December 31, As of December 31,
2020 2021
Discount rate 0.7% 0.7%

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 H. Sensitivity analysis
In the calculation of the defined benefit obligation in the sensitivity analysis, the same method as the calculation
method for the defined benefit obligation recognized in the consolidated statement of financial position is used.
The sensitivity analysis is made based on changes in assumptions that can be reasonably presumed at the end of
the reporting period. In addition, although the sensitivity analysis assumes that all actuarial assumptions other than
those that are subject to the sensitivity analysis remain constant, changes in those other actuarial assumptions could
have an impact in reality.
The impact of a 0.5% change in actuarial assumptions on the defined benefit obligation is as follows.
(In millions of yen)
As of December 31, As of December 31,
2020 2021
Discount rate 0.5% increase (9,028) (7,323)
0.5% decrease 8,348 7,955

(2) Defined contribution plans

The Group has adopted defined contribution pension plans. The amount recognized as an expense in relation to the
defined contribution plans, including employee pension premiums paid by the employer under the Employees’ Pension
Insurance Act, is as follows.
(In millions of yen)

The year ended The year ended

December 31, 2020 December 31, 2021

Contributions 8,328 8,795

(Note) This amount is included in “Cost of sales” and “Selling, general and administrative expenses” in the consolidated
statement of profit or loss.

(3) Employee benefit expenses

The components of the employee benefit expenses are as follows.
(In millions of yen)

The year ended The year ended

December 31, 2020 December 31, 2021

Personnel expenses 156,486 185,953

Retirement benefit expenses 11,068 11,270

Extra retirement payments etc. 1,873 1,262

Other 1,906 2,409

Total 171,333 200,894

(Note) This amount is included in “Cost of sales”, “Selling, general and administrative expenses” and “Other expenses”
in the consolidated statement of profit or loss.

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23. Equity and Other Equity Items
(1) Share capital and treasury shares
Ordinary shares
Total number of Total number of
Treasury shares
authorized shares issued shares
(shares)
(shares) (shares)
As of December 31,
3,400,000,000 1,731,898,990 2,581
2020
Changes (Note 2) ― 211,906,785 ―
As of December 31,
3,400,000,000 1,943,805,775 2,581
2021
(Note) 1. All the shares issued by the Company are non-par value ordinary shares with no restrictions on rights.
2. Based on the resolution at the Board of Directors’ meeting held on May 28, 2021, the Company issued
192,252,800 shares through a public offering with the payment due date on June 15, 2021 and 2,067,600 shares
of common stock through a third-party allotment with the payment due date of June 28, 2021. As a consequence,
share capital increased by 111,899 million yen and capital surplus increased by 111,092 million yen.
3. Changes except the issuance of new shares are due to the exercise of stock options and the vesting of
Restricted Stock Unit (RSU). For details on stock options and RSU, see “Note 32. Share-based Payments.”
4. Total number of issued shares has been already paid-up.

(2) Surplus
A. Capital surplus
The Companies Act of Japan stipulates that one half or more of the paid-in amount from the issue of shares shall
be accounted for as share capital, and the remainder shall be accounted for as capital reserve included in capital
surplus. Under the Companies Act, the amount of such capital reserve may be transferred to shared capital by the
resolution of a shareholders meeting.
B. Retained earnings
The Companies Act of Japan stipulates that one tenth of the amount of the distributions of surplus shall be
accumulated as capital reserve or legal reserve until the sum of the capital reserve and legal reserve reaches one
fourth of the share capital. The accumulated retained earnings reserve may be appropriated to cover a loss. The
Companies Act also states that the retained earnings reserve may be used by the resolution of a shareholders
meeting.

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24. Revenue
(1) Disaggregation of revenue
Disaggregation of revenue recognized from contracts with customers are stated in “Note 6. Business Segments, (2)
Information on reportable segments and (4) Information on regions and countries.” Also, all of the revenue arises from
contracts with customers.

The Group engages in research, design, development, manufacturing, sales and services related to various kinds of
semiconductors as a manufacturer specializing in semiconductors, and the revenue is mainly due to sales of
semiconductor products.
Regarding the sales of these products, the Group recognizes revenue when the customer obtains control over the
product which is at the time of delivery of a product because legal title of the product, physical possession of the asset,
the significant risks and rewards of ownership are transferred to the customer, and the customer has an obligation to
pay for the products at the time of delivery of the product.
Revenue is measured at the amount of promised consideration in contracts with customers.
With regard to sales contract including variable consideration such as rebate and discounts, the transaction price is
estimated and determined using the most-likely-amount method based largely on historical data, considering variable
prices within a range that will not result in significant deviation between estimate and historical data.
Consideration under sales contracts is recovered mainly within one year from satisfaction of a performance obligation
and includes no significant financing components.

(2) Accounts arising from contracts

(In millions of yen)
As of December 31, As of December 31,
2020 2021
Contract assets ― 695

Contract liabilities 297 351

(Note) 1. Contract assets are company's rights to the consideration received in exchange for goods or services transferred
to the customer by the company, on condition of something other than the passage of time (for example, future
performance of the company). Contract assets are transferred to receivables when the right to consideration
becomes unconditional. Contract assets are included in trade and other receivables in the consolidated statement
of financial position.
2. Contract liabilities relate to the payment received in advance of performance under the contract. The contract
liabilities are reclassified to revenue when the Group satisfies a performance obligation based on the contract.
Contract liabilities are included in other current liabilities in the consolidated statement of financial position.
3. The amounts of revenues recognized during the prior fiscal year and the current fiscal year from the performance
obligations satisfied in the past periods were immaterial.
4. Of the revenues recognized in the prior fiscal year, 244 million yen was included in the balance of contract
liabilities as of January 1, 2020. In addition, of the revenues recognized in the current fiscal year, 168 million yen
was included in the balance of contract liabilities as of January 1, 2021.

(3) Transaction price allocated to the remaining performance obligation

The Group uses the practical expedient of omitting the disclosure of information on the remaining performance
obligations because it has no significant transactions with individual expected contractual terms exceeding one year. In
addition, there are no significant amounts in consideration from contracts with customers that are not included in
transaction prices.

(4) Assets recognized from the cost to obtain or fulfill contracts with customers
There are no assets recognized from the cost to obtain or fulfill contracts with customers.

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25. Selling, General and Administrative Expenses
The components of selling, general and administrative expenses are as follows.
(In millions of yen)
The year ended The year ended
December 31, December 31,
2020 2021
Research and development expenses 133,237 155,373

Depreciation and amortization 61,982 63,347

Personnel expenses 43,875 53,118

Retirement benefit expenses 2,436 2,780

Other 24,738 33,080

Total 266,268 307,698

(Note) Research and development expenses are included in selling, general and administrative expenses. Related
expenses such as outsourcing costs, personnel expenses, depreciation costs and material costs are mainly
included in research and development expenses.

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26. Other Income
The components of other income are as follows.
(In millions of yen)
The year ended The year ended
December 31, December 31,
2020 2021
Gain on sales of property, plant and equipment
762 5,618
(Note)
Insurance claim income 2,388 460

Other 886 1,953

Total 4,036 8,031

(Note) Gain on sales of property, plant and equipment recorded in the current fiscal year was mainly due to the sale of
Shiga Factory (Otsu, Shiga Prefecture, Japan) of Renesas Semiconductor Manufacturing Co., Ltd., a wholly
owned subsidiary of Renesas on August 31, 2021.

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27. Other Expenses
The components of other expenses are as follows.
(In millions of yen)
The year ended The year ended
December 31, December 31,
2020 2021
Provision for loss on litigation (Note 1) 633 4,737

Business restructuring expenses (Note 2) 4,137 3,934

Impairment losses (Note 3) 2,070 135

Other 1,475 4,327

Total 8,315 13,133

(Note) 1. Provision was recorded for payments such as such as legal proceedings and damage compensations.
2. The Group has reformed its businesses and structures of production to strengthen its financial basis, and the
related expenses are shown as business restructuring expenses. The main items of business restructuring
expenses were personnel expenses such as additional retirement benefits and expenses related to disposition
of property, plant and equipment associated with consolidating the operating bases.
3. For details on impairment losses, see “Note 15. Impairment of Non-financial Assets.”

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28. Finance Income and Finance Costs
The components of finance income and finance costs are as follows.
(1) Finance income
(In millions of yen)
The year ended The year ended
December 31, December 31,
2020 2021
Valuation gain of investment securities
Financial assets measured at fair value
1,738 3,529
through profit or loss
Foreign exchange gain 5,295 ―
Other 590 611

Total 7,623 4,140

(2) Finance costs

(In millions of yen)
The year ended The year ended
December 31, December 31,
2020 2021
Interest expenses

Financial liabilities measured at amortized cost 7,541 9,975

Foreign exchange loss (Note) ― 24,167

Other 8 1,136

Total 7,549 35,278

(Note) Foreign exchange loss include losses on valuation of currency derivatives.

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29. Other Comprehensive Income
Reclassification adjustments and tax effects of other comprehensive income by component are as follows.
(In millions of
yen)
The year ended The year ended
December 31, December 31,
2020 2021
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plans
Amount incurred during the period (496) 450
Tax effect 162 452
After tax effect (334) 902
Equity financial assets measured at fair value
through other comprehensive income
Amount incurred during the period (429) (382)
Tax effect 99 71
After tax effect (330) (311)
Total of items that will not be reclassified to profit
(664) 591
or loss

Items that may be reclassified subsequently to

profit or loss:
Exchange differences on translation of foreign
operations
Amount incurred during the period (64,290) (169,312)
Reclassification ― ―
Before tax effect (64,290) 169,312
Tax effect ― ―
After tax effect (64,290) 169,312
Cash flow hedges
Amount incurred during the period ― (3,348)
Reclassification ― (818)
Before tax effect ― (4,166)
Tax effect ― 144
After tax effect ― (4,022)
Cost of hedges
Amount incurred during the period ― (226)
Reclassification ― 3
Before tax effect ― (223)
Tax effect ― 70
After tax effect ― (153)
Total of items that may be reclassified
(64,290) 165,137
subsequently to profit or loss

Total other comprehensive income (64,954) 165,728

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30. Earnings Per Share
Basic earnings per share attributable to owners of parent and diluted earnings per share are as follows.
(1) Basic earnings per share
The year ended The year ended
December 31, 2020 December 31, 2021
Profit attributable to owners of parent used for the
45,626 127,261
calculation of basic earnings per share (million yen)

Weighted average number of ordinary shares during the

1,719,345 1,845,524
year (thousands of shares)

Basic earnings per share (yen) 26.54 68.96

(2) Diluted earnings (loss) per share

The year ended The year ended
December 31, 2020 December 31, 2021

Profit attributable to owners of parent used for the

45,626 127,261
calculation of basic earnings per share (million yen)
Adjustments on earnings (million yen) ― ―
Profit used for the calculation of diluted earnings per
45,626 127,261
share (million yen)

Weighted average number of ordinary shares during the

1,719,345 1,845,524
year before dilution (thousands of shares)
Increase in common stock

Share acquisition rights (thousands of shares) 37,701 35,233

Restricted Stock Unit (thousands of shares) ― 6,239

Weighted average number of ordinary shares during the
1,757,045 1,886,996
year after dilution (thousands of shares)

Diluted earnings per share (yen) 25.97 67.44

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31. Consolidated Statement of Cash Flows
(1) Changes in liabilities in financing activities
The components of liabilities in financing activities and their changes during the fiscal year are as follows.

(For the year ended December 31, 2020)

Non-cash transactions
As of As of
December Cash flows Increase due December
Other
31, 2019 Acquisitions to business 31, 2020
(Note 2)
combination
Long-term borrowings (Note 1) 771,747 (93,295) ― ― 1,281 679,733
Short-term borrowings ― ― ― ― ― ―
Bonds 12 ― ― ― (1) 11
Lease liabilities 14,155 (4,840) 5,593 ― (931) 13,977

Total 785,914 (98,135) 5,593 ― 349 693,721

(For The year ended December 31, 2021)

Non-cash transactions
As of As of
December Cash flows Increase due December
Other
31, 2020 Acquisitions to business 31, 2021
(Note 2)
combination
Long-term borrowings (Note 1) 679,733 (22,777) ― 71 1,463 658,490
Short-term borrowings ― ― ― 2,185 (1,138) 1,047
Bonds 11 154,359 ― ― 181 154,551
Lease liabilities 13,977 (4,571) 2,781 4,232 391 16,810

Total 693,721 127,011 2,781 6,488 897 830,898

(Note) 1. Current portion of long-term borrowings are included in long-term borrowings.
2. Non-cash transactions for long-term borrowings includes the arrangement fees.

(2) Non-cash transactions

Significant non-cash transactions are as follows.
(In millions of yen)
The year ended
The year ended
Type December 31,
December 31, 2021
2020
Purchase of intangible assets through installment
35,569 435
purchase contracts

(3) Principal assets and liabilities of a company that became a consolidated subsidiary due to acquisition of stock
(For the year ended December 31, 2021)
For details of assets and liabilities for Dialog, Celeno and these subsidiaries at time of its consolidation resulting from
the acquisition of stock as well as the relationship between the acquisition price of stock and expenditures (net) for its
acquisition, see “Note 7. Business Combinations.”

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32. Share-based Payments
The Group has adopted share-based payment plans as an incentive plan for directors, senior vice presidents and
employees.
Share-based payment expenses included in the consolidated statement of profit or loss totaled 1,234 million yen in
“Cost of sales” and 13,323 million yen in “Selling, general and administrative expenses” in the previous fiscal year, and
1,392 million yen in “Cost of sales” and 13,511 million yen in “Selling, general and administrative expenses” in the current
fiscal year.

(1) Restricted Stock Unit (RSU) and Performance Share Unit (PSU)
A. Overview of RSU and PSU
(a) RSU
RSU is a share-based payment plan in which the Company provides recipients with the number of units that
corresponds to the number of years determined by the Board of Directors (basically three years, except one year
for the Outside Directors) and annually delivers to the recipients common stock for the number of units that vested
(the units vest by one third of total units provided every year after the grant date, except that the units vest after
one year for the outside directors), subject to continued employment with the Group.
(b) PSU
PSU is a share-based payment plan in which the Company provides the recipients (excluding outside directors)
with the number of units determined by the Board of Directors and delivers to the recipients common stock for the
number of the units that vested in response to the extent of the growth rate of total shareholder return over the
three-year performance period from April 1 of the year when the PSUs are granted.

B. Details for RSU and PSU

The details of RSU and PSU granted in the current fiscal year are as follows.

Number of units Fair value (Yen)

Date of grant Category and number of grantees
RSU PSU RSU PSU
Outside directors 2
Director and corporate officer 1
April 9, 2021 Corporate officers 10 7,458,400 1,195,800 1,258.0 1,605.2
Employees of the Company and
subsidiaries 2,862
Employees of the Company and
July 16, 2021 487,200 ― 1,233.0 ―
subsidiaries 241
August 31, 2021 Corporate officer 1
13,468,700 ― 1,189.0 ―
(Note 4, 5) Employees of subsidiaries 2,192
October 15, 2021 Employees of subsidiaries 209 630,800 ― 1,337.0 ―

November 12, 2021 Employees of subsidiaries 1,973 2,491,100 ― 1,486.0 ―

(Note) 1. The fair value of RSU is calculated based on the Company's stock price on the date of grant.
2. The fair value of PSU is calculated based on the results of comparing the fluctuation rate of the Company’s stock
with that of stock indexes over a certain period.
3. Our common stock (1 unit = 1 share) is delivered based on the number of units at the time of vesting. There is no
payment from Directors, Corporate Officers and employees at the time of delivering the stock.
4. Based on the agreements regarding the acquisition of Dialog, the unvested portion of Dialog's Employee Share
Plan Award was replaced by Renesas share plans (RSU) as of the acquisition date.
5. The rights are based on the vesting conditions originally provided by Dialog except for certain awards that will be
vested earlier than scheduled.

C. Changes of the number of RSU and PSU

Changes of the number of RSU and PSU in the prior fiscal year and the current fiscal year are as follows (1 right =
1 share).

The year ended The year ended

Grant date December 31, 2020 December 31, 2021
RSU PSU RSU PSU
Beginning balance ― ― ― ―

Granted ― ― 24,536,200 1,195,800

Forfeited ― ― (808,615) (62,600)

Vested ― ― (1,838,785) ―

Ending balance ― ― 21,888,800 1,133,200

(2) Stock option

A. Overview of the stock option plan
Under the stock option plan, warrants have been granted to eligible persons in accordance with the resolution of
the Board of Directors of the Company based on the arrangement approved at the shareholders meeting of the
- 147 -
 Company. The exercise period of the stock options is set by an allotment contract, and if they are not exercised during
the exercise period, the stock options will lapse. In addition, if an eligible person has left the Company before the
vesting date, the options will also lapse. However, this does not apply to certain cases addressed in the warrants
allotment contract, such as resignation due to the expiration of the term of office.
The stock option plan of the Company is accounted for as equity-settled share-based payments.

B. Details for the stock option plan

The stock option plan in effect during the current fiscal year is as follows.

Type of
Category and
stock and Vesting Exercise
number of Grant date Vesting conditions
number of period period
grantees
shares
Fiscal year Directors of the Common August 1, The rights will vest in From From
2016 Company stock 2016 stages as follows. August 1, August 2,
Stock options 2 288,500 One third will vest on 2016 to 2016 to
No.1 shares August 2, 2017 August 2, August 1,
No.2 Corporate officers One third will vest on 2019 2026
No.3 and executive August 2, 2018
officers of the The remaining will vest
Company on August 2, 2019
10
Fiscal year Directors of the Common April 3, The rights will vest in From April From April
2017 Stock Company stock 2017 stages as follows 3, 2017 to 4, 2017 to
options 2 3,549,500 One third will vest on April 4, April 3,
No.1 – 1 shares April 4, 2018 2020 2027
No.2 – 1 Corporate officers One third will vest on
and executive April 4, 2019
officers of the The remaining will vest
Company on April 4, 2020
11

Employees of the
Company
342

Directors of
subsidiaries
20

Employees of
subsidiaries
890
Fiscal year Directors of the Common April 3, The Company sets the From April From April
2017 Stock Company stock 2017 upper limit number of 3, 2017 to 4, 2017 to
options 2 2,112,000 shares expected to vest April 3, April 3,
No.1 – 2 shares by multiplying the 2020 2027
No.2 – 2 Corporate officers number of allocated
and executive stock subscription rights
officers of the with the rate calculated
Company by comparing total
11 shareholder return
fluctuation rate of the
Employees of the Company and
Company companies that are the
78 components of PHLX
Semiconductor Sector
Directors of Index and Tokyo Stock
subsidiaries Price Index.
14

Employees of
subsidiaries
59
Fiscal year Employees of Common May 11, The rights will vest in From May From May
2017 Stock subsidiaries stock 2017 stages as follows 11, 2017 12, 2017 to
options 7 30,900 One third will vest on to April 4, May 11,
No.3 shares April 4, 2018 2020 2027
One third will vest on
April 4, 2019

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 The remaining will vest
on April 4, 2020
Fiscal year Employees of Common July 12, The rights will vest in From July From July
2017 Stock subsidiaries stock 2017 stages as follows 12, 2017 13, 2017 to
options 13 52,200 One third will vest on to April 4, July 12,
No.4 shares April 4, 2018 2020 2027
One third will vest on
April 4, 2019
The remaining will vest
on April 4, 2020
Fiscal year Employees of Common September The rights will vest in From From
2017 Stock subsidiaries stock 14, 2017 stages as follows September September
options 20 98,000 One third will vest on 14, 2017 15, 2017 to
No.5 shares April 4, 2018 to April 4, September
No.6 One third will vest on 2020 14, 2027
April 4, 2019
The remaining will vest
on April 4, 2020
Fiscal year Employees of Common October The rights will vest in From From
2017 Stock subsidiaries stock 12, 2017 stages as follows October October 13,
options 16 94,000 One third will vest on 12, 2017 2017 to
No.7 shares April 4, 2018 to April 4, October 12,
One third will vest on 2020 2027
April 4, 2019
The remaining will vest
on April 4, 2020
Fiscal year Employees of Common January The rights will vest in From From
2017 Stock subsidiaries stock 15, 2018 stages as follows January January 16,
options 26 117,300 Certain amount will vest 15, 2018 2018 to
No.8 shares on April 4, 2018 to April 4, January 15,
Certain amount will vest 2021 2028
on April 4, 2019
Certain amount will vest
on April 4, 2020
The remaining will vest
on April 4, 2021
Fiscal year Directors of the Common April 2, The rights will vest in From April From April
2018 Stock Company stock 2018 stages as follows 2, 2018 to 3, 2018 to
options 3 3,607,200 One third will vest on April 3, April 2,
No.1 – 1 shares April 3, 2019 2021 2028
No.2 – 1 Corporate officers One third will vest on
and executive April 3, 2020
officers of the The remaining will vest
Company on April 3, 2021
10

Employees of the
Company
472

Directors of
subsidiaries
18

Employees of
subsidiaries
743
Fiscal year Directors of the Common April 2, The Company sets the From April From April
2018 Stock Company stock 2018 upper limit number of 2, 2018 to 3, 2018 to
options 3 2,047,200 shares expected to vest April 2, April 2,
No.1 – 2 shares by multiplying the 2021 2028
No.2 – 2 Corporate officers number of allocated
and executive stock subscription rights
officers of the with the rate calculated
Company by comparing total
10 shareholder return
fluctuation rate of the
Employees of the Company and
Company companies that are the
95 components of PHLX

- 149 -
 Semiconductor Sector
Directors of Index and Tokyo Stock
subsidiaries Price Index.
13

Employees of
subsidiaries
47
Fiscal year Employees of the Common July 31, The rights will vest in From July From
2018 Stock Company stock 2018 stages as follows 31, 2018 August 1,
options 257 534,600 One third will vest on to April 3, 2018 to
No.3 shares April 3, 2019 2021 July 31,
No.4 Directors of One third will vest on 2028
subsidiaries April 3, 2020
1 The remaining will vest
on April 3, 2021
Employees of
subsidiaries
181
Fiscal year Employees of Common October The rights will vest in From From
2018 Stock subsidiaries stock 31, 2018 stages as follows October November
options 22 182,700 Certain amount will vest 31, 2018 1, 2018 to
No.5 shares on April 3, 2019 to April 3, October 31,
Certain amount will vest 2022 2028
on April 3, 2020
Certain amount will vest
on April 3, 2021
The remaining will vest
on April 3, 2022
Fiscal year Corporate officers Common April 9, According to completion From April From April
2019 and executive stock 2019 of the acquisitions with 9, 2019 to 9, 2019 to
Stock options officers of the 57,043,500 IDT, the existing stock March 15, April 8,
No.1 Company shares options for IDT allocated 2023 2029
No.2 1 to directors of IDT and
No.3 its subsidiaries,
Directors of corporate officers and
subsidiaries executive officers of
1 subsidiaries, and
employees of
Corporate officers subsidiaries are
and executive converted into the stock
officers of options for the Company
subsidiaries and issued.
3 The rights are based on
the vesting periods for
Employees of the stock option
subsidiaries originally scheduled in
1,337 IDT.
Fiscal year Corporate officers Common May 31, The rights will vest in From May From June
2019 Stock and executive stock 2019 stages as follows 31, 2019 1, 2019 to
options officers of the 659,800 One third will vest on to April 1, May 31,
No.4 – 1 Company shares April 1, 2020 2022 2029
No.5 – 1 1 One third will vest on
April 1, 2021
Employees of the The remaining will vest
Company on April 1, 2022
1

Employees of
subsidiaries
32
Fiscal year Corporate officers Common May 31, The Company sets the From May From June
2019 Stock and executive stock 2019 upper limit number of 31, 2019 1, 2019 to
options officers of the 364,300 shares expected to vest to April 2, May 31,
No.4 – 2 Company shares by multiplying the 2022 2029
No.5 – 2 1 number of allocated
stock subscription rights
Employees of the with the rate calculated
Company by comparing total
1 shareholder return

- 150 -
 fluctuation rate of the
Company and
companies that are the
components of PHLX
Semiconductor Sector
Index and Tokyo Stock
Price Index.
Fiscal year Employees of the Common July 25, The rights will vest in From July From July
2019 Stock Company stock 2019 stages as follows 25, 2019 26, 2019 to
options 486 16,222,700 One third will vest on to April 1, July 25,
No.6 – 1 shares April 1, 2020 2022 2029
No.7 – 1 Directors of One third will vest on
subsidiaries April 1, 2021
15 The remaining will vest
on April 1, 2022
Employees of
subsidiaries
1,875
Fiscal year Employees of the Common July 25, The Company sets the From July From July
2019 Stock Company stock 2019 upper limit number of 25, 2019 26, 2019 to
options 90 3,203,800 shares expected to vest to April 2, July 25,
No.6 – 2 shares by multiplying the 2022 2029
No.7 – 2 Directors of number of allocated
subsidiaries stock subscription rights
10 with the rate calculated
by comparing total
Employees of shareholder return
subsidiaries fluctuation rate of the
46 Company and
companies that are the
components of PHLX
Semiconductor Sector
Index and Tokyo Stock
Price Index.
Fiscal year Directors of the Common August 23, The rights will vest in From From
2019 Stock Company stock 2019 stages as follows August 23, August 24,
options 2 985,900 One third will vest on 2019 to 2019 to
No.8 – 1 shares April 1, 2020 April 1, August 23,
No.9 – 1 Corporate officers One third will vest on 2022 2029
and executive April 1, 2021
officers of the The remaining will vest
Company on April 1, 2022
12

Employees of the
Company
2
Fiscal year Directors of the Common August 23, The Company sets the From From
2019 Stock Company stock 2019 upper limit number of August 23, August 24,
options 2 1,963,800 shares expected to vest 2019 to 2019 to
No.8 – 2 shares by multiplying the April 2, August 23,
No.9 – 2 Corporate officers number of allocated 2022 2029
and executive stock subscription rights
officers of the with the rate calculated
Company by comparing total
12 shareholder return
fluctuation rate of the
Company and
companies that are the
components of PHLX
Semiconductor Sector
Index and Tokyo Stock
Price Index.

Fiscal year Employees of Common September The rights will vest in From From
2019 subsidiaries stock 20, 2019 stages as follows September September
Stock options 441 351,600 One third will vest on 20, 2019 21, 2019 to
No.10 shares April 1, 2020 to April 1, September
One third will vest on 2022 20, 2029
April 1, 2021

- 151 -
 The remaining will vest
on April 1, 2022
Fiscal year Corporate officers Common October The rights will vest in From From
2019 and executive stock 31, 2019 stages as follows October November
Stock options officers of the 887,700 Certain amount will vest 31, 2019 1, 2019 to
No.11 – 1 Company shares on April 1, 2020 to April 1, October 31,
No.12 – 1 1 Certain amount will vest 2023 2029
on April 1, 2021
Employees of the Certain amount will vest
Company on April 1, 2022
122 The remaining will vest
on April 1, 2023
Employees of
subsidiaries
123
Fiscal year Corporate officers Common October The Company sets the From From
2019 and executive stock 31, 2019 upper limit number of October November
Stock options officers of the 73,800 shares expected to vest 31, 2019 1, 2019 to
No.11 – 2 Company shares by multiplying the to April 2, October 31,
No.12 – 2 1 number of allocated 2023 2029
stock subscription rights
Employees of with the rate calculated
subsidiaries by comparing total
1 shareholder return
fluctuation rate of the
Company and
companies that are the
components of PHLX
Semiconductor Sector
Index and Tokyo Stock
Price Index.
Fiscal year Employees of Common December The rights will vest in From From
2019 subsidiaries stock 25, 2019 stages as follows December December
Stock options 15 204,800 One third will vest on 25, 2019 26, 2019 to
No.13 Shares April 1, 2020 to April 1, December
One third will vest on 2022 25, 2029
April 1, 2021
The remaining will vest
on April 1, 2022
Fiscal year Employees of Common January The rights will vest in From From
2019 subsidiaries stock 31, 2020 stages as follows January February 1,
Stock options 23 210,000 Certain amount will vest 31, 2020 2020 to
No.14 Shares on April 1, 2020 to April 1, January 31,
Certain amount will vest 2023 2030
on April 1, 2021
Certain amount will vest
on April 1, 2022
The remaining will vest
on April 1, 2023
Fiscal year Directors of the Common June 30, The rights will vest in From June From July
2020 Company stock 2020 stages as follows 30, 2020 1, 2020 to
Stock options 4 17,068,000 One third will vest on to July 1, June 30,
No.1 – 1 Shares July 1, 2021 2023 2030
No.2 – 1 Corporate officers One third will vest on
and executive July 1, 2022
officers of the The remaining will vest
Company on July 1, 2023
10

Employees of the
Company
467

Directors of
subsidiaries
14

Employees of
subsidiaries
1,888

- 152 -
Fiscal year Directors of the Common June 30, The Company sets the From June From July
2020 Company stock 2020 upper limit number of 30, 2020 1, 2020 to
Stock options 1 5,211,600 shares expected to vest to June June 30,
No.1 – 2 Shares by multiplying the 30, 2023 2030
No.2 – 2 Corporate officers number of allocated
and executive stock subscription rights
officers of the with the rate calculated
Company by comparing total
10 shareholder return
fluctuation rate of the
Employees of the Company and
Company companies that are the
88 components of PHLX
Semiconductor Sector
Directors of Index and Tokyo Stock
subsidiaries Price Index.
9

Employees of
subsidiaries
41
Fiscal year Directors of the Common August 31, The rights will vest in From From
2020 Company stock 2020 stages as follows August 31, August 31,
Stock options 1 4,725,300 One third will vest on 2020 2020 to
No.3 Shares August 31, 2020 to October August 30,
No.4 Corporate officers One third will vest on 31, 2020 2030
and executive September 1, 2020
officers of the The remaining will vest
Company on October 1, 2020
8

Employees of the
Company
916

Directors of
subsidiaries
6

Employees of
subsidiaries
1,614
Fiscal year Employees of the Common August 31, The rights will vest in From From
2020 Company stock 2020 stages as follows August 31, September
Stock options 219 665,800 One third will vest on 2020 to 1, 2020 to
No.5 Shares September 1, 2021 September August 31,
No.6 Employees of One third will vest on 1, 2023 2030
subsidiaries September 1, 2022
161 The remaining will vest
on September 1, 2023
Fiscal year Employees of the Common November The rights will vest in From From
2020 Company stock 30, 2020 stages as follows November December
Stock options 3 910,100 Certain amount will vest 30, 2020 1, 2020 to
No.7 – 1 Shares on July 1, 2021 to July 1, November
No.8 – 1 Employees of Certain amount will vest 2023 30, 2030
subsidiaries on July 1, 2022
94 Certain amount will vest
on July 1, 2023
The remaining will vest
on July 1, 2024
Fiscal year Employees of Common November The rights will vest in From From
2020 subsidiaries stock 30, 2020 stages as follows November December
Stock options 10 82,000 One third will vest on 30, 2020 1, 2020 to
No.7 – 2 Shares September 1, 2021 to November
No.8 – 2 One third will vest on September 30, 2030
September 1, 2022 1, 2023
The remaining will vest
on September 1, 2023

- 153 -
Fiscal year Employees of the Common November The Company sets the From From
2020 Company stock 30, 2020 upper limit number of November December
Stock options 1 22,600 shares expected to vest 30, 2020 1, 2020 to
No.7 – 3 Shares by multiplying the to June November
number of allocated 30, 2023 30, 2030
stock subscription rights
with the rate calculated
by comparing total
shareholder return
fluctuation rate of the
Company and
companies that are the
components of PHLX
Semiconductor Sector
Index and Tokyo Stock
Price Index.
Fiscal year Employees of the Common February The rights will vest in From From
2021 Company stock 26, 2021 stages as follows February February
Stock options 6 320,400 Certain amount will vest 26, 2021 27, 2021
No.1 Shares on July 1, 2021 to July 1, to February
No.2 Employees of Certain amount will vest 2024 26, 2031
subsidiaries on July 1, 2022
52 Certain amount will vest
on July 1, 2023
The remaining will vest
on July 1, 2024
Fiscal year Employees of Common February The rights will vest in From From
2021 subsidiaries stock 26, 2021 stages as follows February February
Stock options 4 13,200 One third will vest on 26, 2021 27, 2021
No.3 Shares September 1, 2021 To to
One third will vest on September February
September 1, 2022 1, 2023 26, 2031
The remaining will vest
on September 1, 2023
(Note) 1. Vesting conditions include a requirement for award beneficiaries to provide services to the Company until the
stock vesting date. However, this does not apply to certain cases such as mandatory retirement, resignation
due to the expiration of the term of office or the other justifiable reasons.
2. Grantees cannot exercise options during the time from the day after the grant date until when the stock is vested.
Also, the option will be forfeited if the target retires or resigns from the Company or subsidiary by the vesting date.
However, if allowed under the Stock Acquisition Rights Allocation Agreement, those options may be exercised.
For example, if awards are not forfeited upon retirement or resignation due to the expiration of terms of office
under the Stock Acquisition Rights Allocation Agreement, the said person may exercise the said stock options
starting on the day following said loss of eligibility until 13 months after.
3. If grantees forfeit their share acquisition rights, they may not exercise their stock options.

- 154 -
 C. Number and weighted average exercise price of stock options
Changes of the number and the weighted average exercise price of stock options granted in the prior fiscal year
and the current fiscal year are as follows. The number of stock options is stated by converting them to the number of
shares.

The year ended December 31, 2020 The year ended December 31, 2021
Weighted
Number of Number of Weighted
average
options options average exercise
exercise price
(shares) (shares) price (yen)
(yen)
Beginning
balance of
47,457,400 1 49,952,600 1
unexercised
options
Granted 28,895,400 1 333,600 1

Exercised 21,622,200 1 15,747,600 1

Forfeited 4,586,700 1 3,756,200 1

Expired 191,300 1 89,500 1

Ending
balance of
49,952,600 1 30,692,900 1
unexercised
options
Ending
balance of
5,320,000 1 6,520,700 1
exercisable
options
(Note) 1. For the stock options exercised during the period, the weight average share price as of the exercise date was
712 yen for the fiscal year ended December 31, 2020 and 1,269 yen for the fiscal year ended December 31,
2021.
2. Remaining weighted average contractual life outstanding as of December 31, 2020 and 2021 was 4 years and
3 years, respectively.

- 155 -
 D. Fair value of stock options granted and estimation method of fair value
The valuation techniques used for the stock options granted for the fiscal year ended December 31, 2020 and the
fiscal year ended December 31, 2021 are the Binomial model, and the major basic assumptions and estimation
method are as follows.
Fair value Expected
Share price on Exercise Expected Expected Risk-free
per share holding
Date of grant date of grant price volatility dividend interest rate
at the grant period
(yen) (yen) (Note 1) (Note 3) (Note 4)
date (yen) (Note 2)
January 2020 710 711 1 42.040% 5 years No dividend (0.182%)

550
June 2020 346 551 1 50.700% 5 years No dividend (0.100%)
(Note 5)
August 2020 666 667 1 51.210% 5 years No dividend (0.067%)

927
November 2020 583 928 1 50.393% 5 years No dividend (0.105%)
(Note 5)
February 2021 1,168 1,169 1 49.744% 5 years No dividend (0.048%)
(Note) 1. The expected volatility is calculated using the actual share prices during the expected holding period from the
grant date.
2. The expected holding period is based on the number of years from the grant date to the last day of the principle
exercise period.
3. The expected dividend is calculated based on the actual annual dividend for the year.
4. The risk-free interest rate is the yield on Japanese government bonds for the period that corresponds to the
remaining life of the option.
5. For the stock options whose vesting condition is the stock price requirement, the actual rates of granted stocks
are reflected on the fair value based on the results of comparing the fluctuation rate of the Company’s stock
with that of stock indexes over a certain period.

- 156 -
33. Financial Instruments
(1) Capital management
The Group aims to achieve sustainable growth and maximize its corporate value. Investments of surplus funds are
limited to short-term deposits and financial assets with a high level of safety. Regarding financing sources, the Group
mainly uses borrowings from banks. The Group mainly uses derivative financial instruments to manage fluctuations in
foreign currency exchange rates, and the Group’s policies prohibit holding or issuing derivative financial instruments for
speculative transactions. Items subject to management are net interest-bearing liabilities obtained by deducting cash
and cash equivalents from interest-bearing liabilities and equity. Their balances and the major indicators that the Group
uses for its capital management are as follows.
(In millions of yen)
As of December 31, 2020 As of December 31, 2021

Interest-bearing liabilities 693,721 830,898

Less: Cash and cash
(219,786) (221,924)
equivalents
Net interest-bearing liabilities 473,935 608,974
Total equity attributable to
616,701 1,158,143
owners of parent
Total liabilities and equity 1,608,985 2,406,247
Equity ratio attributable to
38.3 48.1
owners of parent (%)
Equity ratio attributable to owners of parent: Total equity attributable to owners of parent /Total liabilities and equity.

(2) Basic policies for financial risk management

The Group is exposed to financial risks (credit risk, liquidity risk and market risk) in the process of executing its
business activities. Accordingly, the Group regularly monitors the financial risks based on internal management
regulations and takes measures to avoid or reduce the risks as required.
The Group does not engage in derivative transactions for speculative purposes.

A. Credit risk
(a) Credit risk management
Notes and trade receivables are exposed to the credit risk of customers. Conforming to the internal rules for the
management of receivables, the Group regularly monitors major customers’ credit and manages the due dates of
collection and the balance for each customer. Other receivables are exposed to the credit risk of customers, but
most of them are settled in the short term. Short-term investments are financial assets invested on a short-time basis,
and the Group transacts with highly creditworthy financial institutions. Trade receivables are regarded as non-
performing if all or part of them cannot be collected or if collection is deemed extremely difficult. The Group does not
have any exposure to the significant credit risk of certain customers, and there is no excessive concentration of
credit risk that requires special management.

The largest exposure to credit risk at the end of the reporting period is the carrying amount of financial assets
after impairment, but there is no historical experience of recognizing a significant credit loss in previous years.
Regarding debt guarantees, the balance of debt guarantees presented in “Note 36. Commitments and Contingent
Liabilities” is the largest exposure of the Group to credit risk.

- 157 -
 (b) Analysis of changes in loss allowance
The changes in the loss allowance are as follows.

The year ended December 31, 2020

12-month expected
Lifetime expected credit losses
credit losses
Loss allowance for Loss allowance for Loss allowance for
financial instruments Loss allowance for financial instruments financial instruments
other than trade trade receivables whose credit risk has whose credit is
receivables increased significantly impaired
Beginning balance ― 95 ― ―
Increases ― 58 ― ―
Decreases due to
― (31) ― ―
reversal
Other ― (3) ― ―
Ending balance ― 119 ― ―

The year ended December 31, 2021

12-month expected
Lifetime expected credit losses
credit losses
Loss allowance for
Loss allowance for Loss allowance for
financial instruments
financial instruments Loss allowance for financial instruments
whose credit risk has
other than trade trade receivables whose credit is
increased
receivables impaired
significantly
Beginning balance ― 119 ― ―
Increases ― 174 ― ―
Decreases due to
― (232) ― ―
reversal
Other ― 8 ― ―
Ending balance ― 69 ― ―
(Note) Acquisition by business combination is included in “Increases.”

(c) Carrying amount of financial instruments for the loss allowance

The carrying amount (before the loss allowance) of financial instruments for the loss allowance as of each fiscal
year end is as follows.

12-month expected
Lifetime expected credit losses
credit losses
Loss allowance for Loss allowance for Loss allowance for
Loss allowance
financial instruments financial instruments financial
for trade
other than trade whose credit risk has instruments whose
receivables
receivables increased significantly credit is impaired
As of December 31, 2020 4,751 86,036 ― ―
As of December 31, 2021 3,737 155,604 ― ―

(d) Analysis of credit risk

The aging analysis of trade receivables as of each fiscal year end is as follows.
(In millions of yen)

As of December 31, As of December 31,

2020 2021

Before due date 83,560 148,040

Up to 30 days past due 1,916 7,142
Over 30 days past due and up to 90 days past
240 372
due
Over 90 days past due 320 50
Total 86,036 155,604

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For trade receivables, the Group’s major counterparties consist of specific distributors with high credit ratings and there is
no material balance of loss allowance based on expected loss rate. For financial instruments other than trade receivables,
there is no credit risk that is concentrated around credit ratings.

B. Liquidity risk
The Group is exposed to liquidity risk whereby the performance of payment obligations could become difficult. To
limit its exposure to liquidity risk, however, the Group works to maintain fund management through the optimization
of capital efficiency through the efficient management of working capital and the central management of funds by the
Company. The Group also manages the liquidity risk by appropriately maintaining liquidity on hand through the timely
preparation and updating of the financing plan and taking the external financial environment into account.

The balance of financial liabilities by due date is as follows.

As of December 31, 2020

(In millions of yen)
Due after Due after Due after Due after
Carrying Contractual Due within one year but two years but three yearsfour years butDue after
amount cash flows one year within twowithin threebut within fourwithin fivefive years
years years years years
Non-derivative
financial liabilities
Trade and other
139,412 139,412 114,235 11,695 10,979 2,503 ― ―
payables
Bonds and
679,744 698,762 98,560 97,777 96,994 405,431 ― ―
borrowings
Lease liabilities 13,977 14,487 3,927 3,388 2,278 1,738 1,365 1,791

Other 300 300 ― 300 ― ― ― ―

Total 833,433 852,961 216,722 113,160 110,251 409,672 1,365 1,791

As of December 31, 2021

(In millions of yen)
Due after Due after Due after Due after
Carrying Contractual Due within one year but two years but three years four years but Due after
amount cash flows one year within two within three but within four within five five years
years years years years
Non-derivative
financial
liabilities
Trade and
219,430 219,430 204,330 12,308 2,792 ― ― ―
other payables
Bonds and
814,088 840,156 128,366 126,503 413,823 36,931 134,533 ―
borrowings
Lease
16,810 17,683 5,654 4,098 3,021 2,232 1,075 1,603
liabilities
Lease
4,681 5,176 5,176 ― ― ― ― ―
liabilities
Contingent
consideration 1,550 1,550 1,384 ― ― ― 166 ―
(Note)
Total 1,056,559 1,083,995 344,910 142,909 419,636 39,163 135,774 1,603
(Note) For details, please refer to “Note 7. Business Combinations.”

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 C. Market risk
(a) Foreign currency exchange risk
(i) Foreign currency exchange risk management
Foreign currency receivables and obligations arising from the global business development of the Group are
exposed to the risk of foreign exchange rate fluctuations. To reduce the risk of foreign exchange rate fluctuations,
the Group uses forward exchange contracts, currency options and currency swaps.

(ii) Net foreign exchange risk exposure

The Group’s exposure to the risk of foreign exchange rate fluctuations (net amount) is as follows. This excludes
derivative transactions and the amount entered into to hedge foreign exchange rate fluctuation risk using foreign
currency deposits.
(In millions of yen)

The year ended The year ended

Currency
December 31, 2020 December 31, 2021

US dollar (145,066) (297,436)

Euro 10,083 37,706

(iii) Sensitivity analysis of foreign exchange rates

Based on the assumption that all other variables are constant for foreign currency financial instruments held
by the Group in the previous fiscal year and the current fiscal year, the amount of the impact of the 1.0%
appreciation of the yen against the US dollar and the euro on profit before tax in the consolidated statement of
profit or loss is as follows.
(In millions of yen)

The year ended The year ended

Currency
December 31, 2020 December 31, 2021

US dollar 1,451 2,974

Euro (101) (377)

(b) Interest rate risk

Although the Group raises funds through borrowings for the purpose of securing funds for long-term working
capital and the promotion of growth strategies, the Group is exposed to the risk of interest rate fluctuations because
some borrowings are made at floating interest rates. To reduce the risk of changes in the interest paid on
borrowings, the Group uses interest rate swaps as required. Accordingly, the Group has decided that the impact
of the risk of interest rate fluctuations on the Company is limited and insignificant and does not conduct a sensitivity
analysis for interest rate risk.

(c) Stock price risk

The Group has adopted an incentive plan for its employees for the purpose of securing excellent human
resources, particularly at subsidiaries. To operate the incentive plan, the Group holds shares and other financial
instruments for the long term and is exposed to the risk of changes in their market prices. Please note that, following
the introduction of a stock option plan, the incentive plan was abolished and there was no new issuance.
The Group does not conduct a sensitivity analysis for the risk of changes in share prices since the impact of
changes in share prices are immaterial.

(3) Fair value of financial instruments

A. Calculation method of fair value
The calculation method of the fair value of financial instruments is as follows.
(a) Cash and cash equivalents, and trade and other receivables
The fair value of these instruments approximates their carrying amount due to short term maturities.
(b) Trade and other payables
For trade and other payables that will mature within a short amount of time, the fair value approximates the
carrying amount. The fair value of trade and other payables that will not mature in a short amount of time is
calculated by the present value that is discounted by an interest rate assumed for the case where a similar
borrowing is newly made and classified as Level 2.
(c) Securities
If the market price of a security is available in an active market, the securities are measured using this market
price and classified as Level 1. If the market price is not available, the fair value is measured mainly by a method
based on net assets (method of calculating by making adjustments to the market value as required based on the
net assets of the entity that issues shares), etc. and classified as Level 3.
(d) Long-term borrowings
The fair value of long-term borrowings is calculated at the present value that is discounted using an interest rate
assumed for the case where a similar borrowing is newly made and classified as Level 2.
(e) Derivative transactions
Forward exchange contracts, currency options and currency swaps are calculated based on the price presented

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 by the customers’ financial institution and classified as Level 2. In addition, the fair value calculated using
unobservable inputs is classified as Level 3.
(f) Bonds
The fair value of bonds is calculated by referring to a market price and classified as Level 2.
(g) Contingent consideration
The fair value of the contingent consideration is calculated as the present value of the payments in the future
using appropriate valuation methods with consideration of the probability of occurrence and is classified as Level
3.
(h) Other financial assets and liabilities
Time deposits with maturities of more than three months, long-term accounts receivable, security deposits and
guarantee deposits received that are measured at amortized cost are classified as Level 2. Because their fair value
approximates their carrying amount, they are omitted from the following table.

B. Classification of financial instruments measured at fair value by levels

In the fair value hierarchy, financial instruments are classified from Level 1 to Level 3 as follows.
Level 1: Fair value measured using unadjusted quoted prices in the active markets
Level 2: Fair value other than quoted prices include within Level 1 that are observable, either directly or indirectly
Level 3: Fair value calculated by using a valuation technique including inputs that are not based on observable market
data
Transfers between the levels in the fair value hierarchy are recognized on the assumption that the transfers occur at
the end of each reporting period. There is no transfer between levels.

(a) Financial instruments measured at amortized cost

The carrying amount and the fair value of financial instruments measured at amortized cost are as follows.
Financial instruments measured at fair value and financial instruments whose carrying amount closely
approximates fair value are not included in the table below.

As of December 31, 2020

(In millions of yen)
Carrying Fair value
amount Level 1 Level 2 Level 3 Total

Financial liabilities
Borrowings 679,733 ― 680,962 ― 680,962
Bonds 11 ― 11 ― 11
Other payables 47,433 ― 46,736 ― 46,736

Total 727,177 ― 727,709 ― 727,709

As of December 31, 2021

(In millions of yen)
Carrying Fair value
amount Level 1 Level 2 Level 3 Total

Financial liabilities
Borrowings 659,537 ― 661,181 ― 661,181
Bonds 154,551 ― 154,551 ― 154,551
Other payables 59,262 ― 58,987 ― 58,987

Total 873,350 ― 874,719 ― 874,719

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 (b) Financial instruments measured at fair value
The components of financial assets and financial liabilities measured at fair value on a recurring basis that are
classified as each level of the fair value hierarchy are as follows.

As of December 31, 2020

(In millions of yen)
Level 1 Level 2 Level 3 Total

Financial assets
Financial assets
measured at fair value
through profit or loss
Investment trust 4,160 ― ― 4,160

Unlisted securities ― ― 2,498 2,498

Equity instruments
measured at fair value
through other
comprehensive income
Unlisted securities ― ― 2,242 2,242

Total 4,160 ― 4,740 8,900

As of December 31, 2021

(In millions of yen)
Level 1 Level 2 Level 3 Total

Financial assets
Financial assets measured at fair
value through profit or loss
Derivative assets ― 123 ― 123
Investment trust 5,475 ― ― 5,475
Unlisted securities ― ― 6,018 6,018
Equity instruments measured at
fair value through other
comprehensive income
Listed securities 250 ― ― 250
Unlisted securities ― ― 2,581 2,581

Total 5,725 123 8,599 14,447

Financial liabilities
Financial liabilities measured at
fair value through profit or loss
Derivative liabilities ― 1,550 ― 1,550
Contingent consideration
― ― 4,681 4,681
(Note)
Total ― 1,550 4,681 6,231
(Note) For details, please refer to “Note 7. Business Combinations.”

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 C. Changes in financial assets that are classified as Level 3 are as follows.
(In millions of yen)

The year ended The year ended

December 31, 2020 December 31, 2021

Beginning balance 3,926 4,740

Total gains or losses in the
674 4,438
period
Profit or loss (Note 1) 1,357 3,072
Other comprehensive income (Note 2) (683) 1,366
Purchases 140 ―
Sales ― ―
Settlement ― (623)
Acquisition due to business ― 44
combination
Other ― ―

Ending balance 4,740 8,599

Changes in financial liabilities that are classified as Level 3 are as follows.

(In millions of yen)

The year ended The year ended

December 31, 2020 December 31, 2021

Beginning balance ― ―
Total gains or losses in the
― ―
period
Profit or loss (Note 1) ― ―
Other comprehensive income ― ―
Purchases ― ―
Sales ― ―
Settlement ― ―
Acquisition due to business ― 4,681
combination
Other ― ―

Ending balance ― 4,681

(Note) 1. Total gains or losses in the period are for financial assets and liabilities measured at fair value through profit or
loss and included in finance income and finance costs in the consolidated statement of profit or loss.
2. Total gains or losses in the period are all for equity instruments measured at fair value through other
comprehensive income at the end of the reporting period and presented in “Equity instruments measured at fair
value through other comprehensive income” in the consolidated statement of comprehensive income.
3. Financial instruments that are classified as Level 3 consist of unlisted securities and contingent consideration
for acquisitions. Unlisted securities are mainly investments in funds, and the fair value of unlisted securities is
measured based on the value of net asset as a valuation technique. In addition, the fair value of contingent
consideration is measured in consideration of the possibility of achieving for developmental milestones and the
time value of money. The measurement results of the fair value are reviewed and approved by an appropriate
authorized person. Since these estimates are uncertain, fair value may increase if significant non-observable
development milestones become more likely to be achieved.
4. For details, please refer to “Note 7. Business Combinations.”

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(4) Derivative transactions and hedging activities
A. Overview of hedges
The Group uses forward exchange contracts, currency options and currency swaps for the purpose of hedging
transactions against the risk of foreign exchange rate fluctuations in foreign currency cash flows. Hedge accounting
is applied to those transactions that meet the requirements for hedge accounting. Even if the requirements for hedge
accounting are not met, the Group uses derivative transactions if they are economically reasonable. Changes in the
fair value of the derivative transactions are recognized in profit or loss. The Group has also set a policy of not engaging
in derivative transactions for speculative purposes.

Cash flow hedges

Cash flow hedges are hedging transactions to avoid the risk of changes in future cash flows, and changes in the
fair value of derivative transactions that are designated as cash flow hedges are recognized in other comprehensive
income. The amount that is recognized in accumulated other comprehensive income is reclassified to profit or loss
at the time when the hedged transactions affect profit or loss. If the hedged items give rise to the recognition of non-
financial assets or non-financial liabilities, the amount that is recognized in other comprehensive income is reclassified
as an adjustment to the initial carrying amount of non-financial assets or non-financial liabilities. Derivatives that are
designated as cash flow hedges include forward exchange contracts, currency options and currency swaps to hedge
the risk of changes in cash flows due to changes in the foreign exchange rates for foreign currency transactions.
In the previous fiscal year and the current fiscal year, the amount recognized in profit or loss for the hedge
ineffective portion and the portion that was excluded from the assessment of hedge effectiveness was not material.

B. Information on items that are designated as hedging instruments

The impact of hedging instruments that are designated as hedges on the consolidated statement of financial
position is as follows. Derivative assets and liabilities are included in “Other financial assets” and “Other financial
liabilities,” respectively, in the consolidated statement of financial position.

As of December 31, 2020

Not applicable.

As of December 31, 2021

Book value of hedging instruments Changes in fair value used as
Contract amount (Fair value) the basis for recognizing the
Assets Liabilities ineffective portion of hedges

Cash flow hedges

Foreign currency
exchange risk
Currency options 74,919 ― 918 ―
Currency swaps 155,156 123 166 (1,151)

C. Information on items designated as hedged items

The amount of the impact of hedged items that are designated as hedges on the consolidated statement of financial
position is as follows.

As of December 31, 2020

Not applicable.

As of December 31, 2021

Changes in fair value used as Surplus for cash flow Surplus for cash flow hedges
the basis for recognizing the hedges related to related to the suspension of
ineffective portion of hedges ongoing hedging hedge accounting

Cash flow hedges

Foreign currency
exchange risk
Plan on purchasing ― (684) ―

Bonds (1,151) (111) ―

- 164 -
 D. Impact of the application of hedge accounting on the consolidated statement of profit and loss and the consolidated
statement of comprehensive income
The impact of hedging instruments that are designated as cash flow hedges on the consolidated statement of profit
and loss and the consolidated statement of comprehensive income is as follows.

As of December 31, 2020

Not applicable.

As of December 31, 2021

(In millions of yen)
Changes in the Amount after
value of hedging Ineffective basis
instruments portion adjustment to
recognized in other recognized in cash flow
comprehensive profit or loss hedges
income (Note) (Note)
Cash flow hedges
Foreign currency
exchange risk
Currency options (4,329) ― ―

Currency swaps 162 ― (223)

(Note) Amount before tax effect.

E. Fair value of derivatives to which hedge accounting is not applied

The fair value and contract amount, etc. of derivatives to which hedge accounting is not applied are as follows.

As of December 31, 2020 and December 31, 2021

Not applicable.

(5) Transfer of financial assets

Accelerating from restructuring to growth stage, the Group provides diversified financing to achieve these growth
strategies and liquidates certain trade receivables by transferring receivables.
The expenses arising from transfer of trade receivables derecognized in their entirety were 40 million yen in the prior
fiscal year and 61 million yen in the current fiscal year.

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34. Related Parties
(1) Transactions with related parties
Innovation Network Corporation of Japan, which was a principal shareholder of the Group, was established in July
2009 with the Japanese government as the principal shareholder, and the total amount of investments by the Japanese
government accounts for 95% or more of the capital of Innovation Network Corporation of Japan. As a result, the
Japanese government and the government-related entities have become related parties of the Group.
In addition, Innovation Network Corporation of Japan conducted a business divestiture in September 21, 2018 and
newly created INCJ, Ltd.. INCJ, Ltd. succeeded to all of the Group’s shares of Innovation Network Corporation of Japan
and became a principal shareholder of the Group.
Between the Group and these related parties, there are neither significant transactions individually nor significant
transactions on aggregate although not significant individually.
Furthermore, transactions with INCJ and other related parties are not applicable.

(2) Compensation to key management

Compensation paid to key management personnel is as follows.
(In millions of yen)

The year ended The year ended

Category
December 31, 2020 December 31, 2021

Remuneration and bonuses 227 226

Share-based payments 292 384

Total 519 610

(Note) The exercise price and other key terms of share-based payment arrangements are as stated in “Note 32. Share-
based Payments.”

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35. Major Subsidiaries
All subsidiaries are included in the scope of consolidation for our consolidated financial statements.

Major subsidiaries as of December 31, 2021 are as follows.

Percentage Ownership
and Voting Interest (%)
(Note 1)
Descriptions of Principal
Company Location The year The year
Businesses
ended ended
December December
31, 2020 31, 2021
Manufacturing and
Renesas Semiconductor Manufacturing Co., Ltd. Hitachinaka, Ibaraki Engineering Service100.0 100.0
Companies
Renesas Electronics Hong Kong Limited Hong Kong, China Sales Companies 100.0 100.0
Design, Applications,
Renesas Electronics America Inc. California, U.S.A. Manufacturing and Sales 100.0 100.0
Companies

Renesas Electronics Europe GmbH Design, Applications and

Dusseldorf, Germany 100.0 100.0
(Germany) Sales Companies

Management of parts
100.0 100.0
of consignment
Renesas International Operations Sdn. Bhd. Selangor, Malaysia (100.0) (100.0)
business of our Group
(Note 2) (Note 2)
companies
Engineering, 100.0 100.0
Renesas Electronics (Penang) Sdn. Bhd. Penang, Malaysia Manufacturing and Sales (100.0) (100.0)
Companies (Note 2) (Note 2)

Engineering, Manufacturing100.0 100.0

Renesas Electronics Germany GmbH Dresden, Germany and Sales (100.0) (100.0)
Companies (Note 2) (Note 2)

100.0 100.0
Business Corporations and
IDT Bermuda Ltd. Bermuda (100.0) (100.0)
Others
(Note 2) (Note 2)

100.0 100.0
Business Corporations and
GigPeak, Inc. California, U.S.A. (100.0) (100.0)
Others
(Note 2) (Note 2)

Engineering, Manufacturing
Dialog (Note 3) Reading, U.K. and Sales ― 100.0
Companies

Business Corporations and

Celeno (Note 4) Delaware, U.S.A. ― 100.0
Others

(Note) 1. Percentage ownership and voting interest are rounded down to the second decimal point.
2. Numbers in parentheses represent indirect voting rights.
3. On August 31, 2021, the Company made an acquisition of the entire issued and to be issued share capital of
Dialog. In addition, Dialog changed its company name to Dialog Semiconductor Limited on September 14, 2021.
4. On December 20, 2021, the Company made an acquisition of the entire issued share capital of Celeno, a
semiconductor company in the United States of America which is headquartered in Israel.

There are no subsidiaries with significant non-controlling interests.

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36. Commitments and Contingent Liabilities
(1) Commitments for the acquisition of assets
The Group’s commitments for the acquisition of assets are as follows.
(In millions of yen)

As of December 31, 2020 As of December 31, 2021

Property, plant and equipment 4,267 25,771

Intangible assets 358 447

Total 4,625 26,218

(2) Loan commitments

The Group has entered into a contract for setting commitment lines with its main banks for the purpose of securing
long-term working capital, and the balance of unused loans is as follows.

(In millions of yen)

As of December 31, 2020 As of December 31, 2021

Total amount of commitment lines 125,000 50,000

Balance of used loans ― ―

Balance of unused loans 125,000 50,000

(3) Debt guarantees

The Group provides debt guarantees against bank loans, etc. of its employees as follows.
(In millions of yen)

As of December 31, 2020 As of December 31, 2021

Guarantees of employees’ obligations 36 26

Total 36 26

- 168 -
 (Guarantees of employees’ obligations)
The Group provides guarantees for the housing loans of employees as part of its welfare program. If an employee
cannot repay a housing loan covered by a debt guarantee, the Group must assume the obligation. These debt
guarantees are secured by the houses of the employees.

(4) Others
As the Group conducts business worldwide, it is possible that the Group may become a party to lawsuits, investigation
by regulatory authorities and other legal proceedings in various countries.
Though it is difficult to predict the outcome of the legal proceedings to which the Group is presently a party or to which
it may become a party in future, the resolution of such proceedings may require considerable time and expense. There
is a possibility that the Group’s business, performance, financial condition, cash flow, reputation and creditability to have
significant adverse effects by the outcome.
The Group records provision for loss on litigation for several cases written below to the extent possible to make a
reasonable estimation. Additionally, the Group records loss on litigation for cases other than below, to prepare for
payments regarding lawsuits against other companies and compensation for damages. In accordance with IAS 37
“Provisions, Contingent Liabilities and Contingent Assets” Article 92, the Group does not disclose detailed information
of these cases since it is likely to lead the Group to an unfavorable position.

(Civil lawsuit related to the alleged patent infringement and trade secret violation)
The Group’s subsidiary has been named as a defendant in a civil lawsuit in the United States of America related to
the alleged patent infringement and trade secret violation. The Group’s subsidiary has been named as a defendant in
a lawsuit filed in November 2008 in the United States of America District Court for the Eastern District of Texas (hereafter
“the Court of First Instance”). The Court of First Instance entered a final judgment in June 2016 against the Group in
the amount of 77.3 million U.S. dollars; however, the Group’s subsidiary immediately filed a notice of appeal at the
Court of Appeals for the Federal Circuit (hereafter “the Court of Second Instance”). In July 2018, the Court of Second
Instance rejected the judgement of the Court of First Instance for payment of compensation and conducted the retrial
order at the Court of First Instance.

(Civil lawsuits related to the alleged violations of the competition law)

In July 2019, the Group has been named in the United Kingdom as a defendant in civil lawsuits related to possible
violations of competition law involving smartcard chips brought by purchaser of such products.

(Indemnification claim related to environmental pollution)

The Group’s subsidiary in Taiwan has been subjected to requests for restitution for environmental pollution associated
with a factory in Taiwan owned by the subsidiary’s predecessor company.
Since June 2004, the Group’s subsidiary has been notified that a company reserved its right to seek indemnification
from us for all costs associated with the remediation of the contamination related to environmental pollution found at a
factory in Taiwan owned by the subsidiary’s predecessor company, and the costs associated with the lawsuit as well
as the costs relating to those retained environmental liabilities in a toxic tort class action lawsuit filed by ex-employees
worked at the factory. Though the Group’s subsidiary is not a defendant in the class action lawsuit, the claimant initiated
arbitration proceedings against us related to all claims arising out of the contamination, including the remediation, the
toxic tort claims, and attorneys’ fees in December 2017, but afterward, the arbitration was ordered to stay by the
arbitrator on a unilateral request by the claimant.

- 169 -
37. Government Grants
Government grants related to employment or other actions taken by the Group are recognized in profit or loss.
Government grants of 681 million yen and 1,471 million yen were deducted from cost of sales and selling, general and
administrative expenses, respectively for the year ended December 31, 2020. Government grants of 286 million yen and
1,051 million yen were deducted from cost of sales and selling, general and administrative expenses, respectively for the
year ended December 31, 2021. In addition, government grants related to research and development are recognized in
profit or loss and recorded in other income.

- 170 -
38. Additional Information
(Fire outbreak in a wholly-owned manufacturing subsidiary)
On March 19, 2021, a fire broke out at a manufacturing line in the N3 Building (300mm line) of Naka Factory (located
in Hitachinaka, Ibaraki Prefecture) of Renesas Semiconductor Manufacturing Co., Ltd, a wholly-owned manufacturing
subsidiary of the Company. Due to this fire, certain property, plant and equipment such as machinery and equipment and
inventories such as work in progress were damaged.
Due to this fire, the Group recorded 18,216 million yen for restoration and repairment costs of property, plant and
equipment, disposal costs and reinspection fees of inventories and fixed costs during the shutdown for the year ended
December 31, 2021. These are included in cost of sales of 18,108 million yen and other expenses of 108 million yen in
the Consolidated Statement of Profit or Loss. In addition, other payables of the fire related costs are recorded in trade and
other payables and other liabilities of 6,147 million yen in the Consolidated Statement of Financial Position. The amounts
of loss may change depending on the repair of property, plant and equipment and the determination of insurance claim
income.

- 171 -
39. Subsequent Events
Not applicable.

- 172 -
(2) Other
Quarterly information, etc. for the year ended December 31, 2021

The year ended

(Cumulative period) First quarter Second quarter Third quarter December 31,
2021
Revenue (Million yen) 203,678 421,553 679,986 994,418
Profit before tax (Million yen) 17,624 50,736 100,781 152,463
Profit attributable to owners of
(Million yen) 13,714 37,705 75,457 127,261
parent
Basic earnings per share (Yen) 7.92 21.53 41.61 68.96

(Accounting period) First quarter Second quarter Third quarter Fourth quarter

Basic earnings per share (Yen) 7.92 13.56 19.50 26.69

- 173 -
VI. Summary of Handling Procedures for Shares of the Filing Company

Business Year From January 1 to December 31

Ordinary General Meeting The Company holds the meeting within 3 months after the day immediately following
of Shareholders each fiscal year-end

Record Date December 31

Record date for dividends June 30

from surplus December 31
Number of shares
constituting one unit of 100 shares
shares
Purchase of shares
constituting less than one
unit
4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo
Handling location Sumitomo Mitsui Trust Bank, Limited, Stock Transfer Agency Business Planning
Department
4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo
Transfer agent
Sumitomo Mitsui Trust Bank, Limited
Sumitomo Mitsui Trust Bank, Limited
Brokerage office
Head Office and branches nationwide
Commission for
A separately specified amount as the commission for the entrustment of the share trade
purchase
The method of giving public notices of the Company is electronic public notices;
provided, however, that in cases where an electronic public notice is impracticable due
to an accident or other unavoidable reason, the Company will give its public notice in
Posting of Public Notices
the Nihon Keizai Shimbun. Electronic public notices can be found on the Company’s
website, at the following address:
https://www.renesas.com/jp/ja/about/investor-relations
Benefits to shareholders Not applicable
(Note) Pursuant to the provisions of the Articles of Incorporation of the Company, holders of shares constituting less than
one unit have no rights other than the rights listed in each item of Paragraph 2 of Article 189 of the Companies Act,
the right to make requests pursuant to the provisions of Paragraph 1 of Article 166 of the Companies Act, the right
to receive allotment of offered shares and allotment of offered stock acquisition rights in proportion to the number
of shares held by such shareholders, and the right to request the Company to sell to the holder such number of
shares as may, together with the number of the shares constituting less than one unit, constitute the number of
shares constituting one unit.

- 174 -
VII. Reference Information of the Filing Company

1. Information of Parent Company of the Filing Company

The Company has no parent company, etc., stipulated in Paragraph 1 of Article 24-7 of the Financial Instruments and
Exchange Act.

- 175 -
2. Other Reference Information
The Company has filed the following documents between the beginning of the current fiscal year and the filing date of
this Annual Securities Report.

(1) Annual Securities Report and its Attachments and the Confirmation
Fiscal year (19th Fiscal Year) (from January 1, 2020 to December 31, 2020) Filed with the Director-General of the Kanto
Local Finance Bureau on March 31, 2021
(2) Internal Control Report and its Attachments
Filed with the Director-General of the Kanto Local Finance Bureau on March 31, 2021
(3) Quarterly Report and Confirmation
(First Quarter of the 20th Fiscal Year) (from January 1, 2021 to March 31, 2021) Filed with the Director-General of the
Kanto Local Finance Bureau on May 14, 2021
(Second Quarter of the 20th Fiscal Year) (From April 1, 2021 to June 30, 2021) Filed with the Director-General of the
Kanto Local Finance Bureau on August 4, 2021
(Third Quarter of the 20th Fiscal Year) (from July 1, 2021 to September 30, 2021) Filed with the Director-General of the
Kanto Local Finance Bureau on November 11, 2021
(4) Extraordinary Report
Filed with the Director-General of the Kanto Local Finance Bureau on April 8, 2021
Extraordinary Report under Article 19, Paragraph 2, Item 9-2 of the Cabinet Office Order on Disclosure of Corporate
Affairs
Filed with the Director-General of the Kanto Local Finance Bureau on May 17, 2021
Extraordinary Report under Article 19, Paragraph 2, Item19 of the Cabinet Office Order on Disclosure of Corporate
Affairs
Filed with the Director-General of the Kanto Local Finance Bureau
Extraordinary Report under Article 19, Paragraph 2, Item1 of the Cabinet Office Order on Disclosure of Corporate
Affairs
Filed with the Director-General of the Kanto Local Finance Bureau on October 28, 2021
Extraordinary Report under Article 19, Paragraph 2, Item3 of the Cabinet Office Order on Disclosure of Corporate
Affairs
Filed with the Director-General of the Kanto Local Finance Bureau on November 12, 2021
Extraordinary Report under Article 19, Paragraph 1 and Article 19, Paragraph 2, Item 1 of the Cabinet Office Order on
Disclosure of Corporate Affairs
Filed with the Director-General of the Kanto Local Finance Bureau on February 9, 2022
Extraordinary Report under Article 19, Paragraph 1 and Article 19, Paragraph 2, Item 1 of the Cabinet Office Order on
Disclosure of Corporate Affairs
(5) Amendment to Extraordinary Report
Filed with the Director-General of the Kanto Local Finance Bureau on June 9, 2021
Above (4) amendment to Extraordinary Report on May 28, 2021
Filed with the Director-General of the Kanto Local Finance Bureau on June 16, 2021
Above (4) amendment to Extraordinary Report on May 28, 2021
(6) Securities Registration Statement
Allocation to other parties Filed with the Director-General of the Kanto Local Finance Bureau on May 28, 2021
(7) Amendment to Securities Registration Statement
Filed with the Director-General of the Kanto Local Finance Bureau on June 9, 2021
Above (6) amendment to Extraordinary Report on May 28, 2021
Filed with the Director-General of the Kanto Local Finance Bureau on June 16, 2021
Above (6) amendment to Extraordinary Report on May 28, 2021

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Part II. Information on Guarantor of the Filing Company
Not applicable.

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