Integrity represents the source of Teijin's compliance and serves as the most fundamental course of action. To ensure that our business activities are carried out with integrity, we rigorously promote the practical application of our Code of Conduct as the Code of Corporate Ethics, under the supervision of the Board of Directors. In addition to complying with laws and regulations, we require our corporate officers and employees to act with integrity and in accordance with social norms, based on the concept that promoting compliance is essential for creating a sound corporate culture. To that end, we ensure that the Company's corporate officers, starting with the representative directors, lead by example in this regard. At the same time, we provide compliance-related education and awareness activities to the corporate officers and employees of the Company and its subsidiaries. In these ways, we aim to increase shareholder value and enhance the level of employee satisfaction by fostering a corporate culture that respects honest behavior.

The Group CSR Committee holds discussions and shares compliance and risk management policies within the Group. The Group Compliance Subcommittee was established to serve as a task force for this committee. It is chaired by the general manager of the Sustainability Development and Engagement Department and is composed of managers from the compliance departments of each business unit. Confirmation on the status of compliance promotion in each department within the Group is done through this subcommittee. We also appoint Compliance Risk Management Promotion Managers in each business and at each Group company to encourage the implementation of compliance-related activities. In addition, we appoint Compliance Managers at regional headquarters to assist in promoting compliance-related activities in accordance with regional characteristics. Under these structures, we verify compliance-related issues in each department within the Group through compliance reports compiled from the hotline reporting system, relevant managerial personnel, and employee awareness surveys. To address the issues identified through these means, we incorporate compliance-related education and awareness activities within the compliance promotion plans of each Group department. By putting such a PDCA cycle into motion within our compliance promotion structure, we are able to ensure sustainable adherence to compliance, and conduct regular evaluation and improvement activities. In this manner, we are working to enhance compliance awareness throughout our organization, foster a corporate culture of adherence to laws and regulations, and minimize compliance-related risks.

We feel that promoting compliance is essential for creating a sound corporate culture. Given this, we are engaging in the following initiatives to not only ensure adherence to internal rules and laws relevant to our business, but also to promote a thorough awareness of corporate ethics.

Operating a hotline reporting system

We operate a hotline reporting system that enables Group corporate officers, employees, and business partners to directly report any illegal conduct or conduct that goes against our corporate values that occur within the Group. Reports of conduct that could present a major risk are reported to upper management, who responds to these allegations accordingly. In addition, information on reports of issues that have been addressed are disclosed to employees twice a year via the Company's intranet while giving proper consideration to privacy. This in turn helps raise employee awareness. Furthermore, the operational status of the internal whistleblowing system is reported to the Board of Directors on a regular basis, so that they can provide relevant supervision.

We established the Teijin Group Anti-Corruption Policy under which we lay out procedures and establish the framework for preventing corruption. In addition, we have formulated conduct guidelines for preventing corruption and work to ensure that our corporate officers and employees rigorously adhere to these guidelines.

• Teijin Group Anti-Corruption Policy

For the Teijin Group, whose business is expanding globally, compliance with laws and a fully functioning security export control system are vitally important. In light of this, we have established the Group Security Export Control Regulations governing the corresponding Security Export Control Regulations and Detailed Implementation Rules, which apply to each Group company that conducts exports. We implement this via a dual-level control system, placing specialist back-office staff at the head office and business units to ensure a highly reliable level of security export control.

The laws that must be complied with in security export control are frequently amended, so an important factor in training activities is to ensure high levels of awareness and thoroughness within the business units in regard to the latest information. In this regard, we conduct regular training and promote skills development of employees by encouraging them to sit external practical skills certification exams.