Systems for Ensuring the Compliance with Laws and the Articles of Incorporation in the Performance of Duties by Directors, Officers and Employees of the Company and its Subsidiaries

1. (1)The Company has established basic principles for compliance in the Teijin Group’s Corporate Governance Guide which include the following statement: All directors, officers and employees of the company are required not only to comply with any laws and regulations but also to act with good faith as a businessperson and as a member of society based on ethics and social norm. In this regard, Teijin strives not only to make fair and proper management decisions but also to harmonize with the civil society based on the full compliance with social norm, ethics, laws and regulations.
2. (2)To practice these basic principles, the Company shall establish systems and organizational structures that ensures practical operation and observation of Teijin Group’s Corporate Philosophy, Corporate Code of Conduct, Corporate Standards of Conduct and other related internal regulations. The Representative Directors, other executive directors and corporate officers shall take the initiative and set good examples in observing laws, the Articles of Incorporation, social rules and ethics, and shall promote compliance awareness among directors, officers and employees of the Company and its subsidiaries.
3. (3)In order to supervise of the entire Teijin Group’s compliance and identify and address any potential issues, the Company appoints a Chief Sustainability Officer as the officer in charge of compliance.
4. (4)The directors, officers and employees of the Company and its subsidiaries shall be required to report to Teijin entity or to the holding company, i.e. Teijin Limited, any significant violations of laws or other serious information concerning compliance, in accordance with Group Ethics Regulations and others. Chief Sustainability Officer shall direct and supervise investigations to confirm such facts and, upon consultation with President (CEO), determine appropriate measures.
5. (5)Teijin shall provide necessary means for directors, officers, employees and business partners to directly report any violation or doubtful activities of non-compliance in Teijin or its subsidiaries. As one of such means, Teijin shall establish and operate a reporting and consultation hotline with outside counsel and other experts, so that any director, officer or employee of the Company and its subsidiaries can directly contact the outside counsel. The anonymity of the caller shall be protected, and any repercussions to the caller shall be prevented. Important reports as well as measures taken by the relevant Teijin entity and their results shall be announced as appropriate to, and shall be recognized by, all directors, officers and employees of the Company and its subsidiaries.
6. (6)The directors of the Company and its subsidiaries shall receive audits on their performance of duties by statutory auditors and will respect any advice or recommendations received from the statutory auditors.
7. (7)The Company places Corporate Audit Department directly supervised by CEO, which performs internal auditing of Teijin Group’s business operations and conducts the evaluation of the internal control system and proposes its improvement.
8. (8)Teijin Group shall maintain a resolute attitude toward pressure from antisocial forces, including demands for payoffs from specific shareholders or interference by crime syndicates, and shall not allow such interference. Chief Sustainability Officer shall be appointed as the person in charge of actions against antisocial forces and, in collaboration with Human Resources Officer, establish action policies and other rules and shall ensure observance of such policies and rules by directors, officers and employees within the Company and its subsidiaries.
9. (9)More than four independent outside directors shall be appointed as members of the Board of Directors in order to intensify the validity of the decisions to be made by the Board of Directors in principle.These outside directors must satisfy the requirements for independence set forth by the Company.

Rules and Other Systems for Management of Risk of Loss in the Company and its Subsidiaries

1. (1)The Board of Directors of the Company shall operate a Total Risk Management (TRM) system to deal with every risk that may threaten the mission of achieving sustainable business development of the Teijin Group.
2. (2)The TRM Committee, to be established under the Board of Directors of Teijin, primarily focuses on operational risks and strategic risks within the Teijin Group. The committee proposes TRM basic policies, annual TRM plans, and other related matters to the Board of Directors of the Company.
3. (3)Chief Sustainability Officer shall implement necessary measures to ensure the continuation of businesses of the Teijin Group in the face of risks arising from disasters, the inappropriate performance of duties by directors, officers and employees, and the technical problems in the critical IT systems.

Systems for Ensuring that Duties by Directors and Employees of Teijin and its Subsidiaries Are Performed Efficiently

1. (1)The Company shall establish Group Regulations to provide the necessary rules and guidelines for the Group to ensure the efficient performance of duties throughout the Teijin Group.
2. (2)The Board of Directors of the Company shall have Representative Directors, etc. execute business operations, and the matters delegated to the representative directors, etc. shall be determined based on the organization and in compliance with the procedures stipulated by internal regulations. These regulations shall be revised as may be necessary to reflect any revision and/or abolition of laws and/or to increase efficiency.
3. (3)The Board of Directors of the Company shall organize the basic structure of the Teijin Group, and shall promote efficient management and supervision of these organizational bodies.
4. (4)The Company shall formulate the Group medium-term management plan, and each fiscal year it shall formulate Short- Term plans, and Group’s entire key management targets and budgets, as well as carrying out progress checks, in order to realize the medium-term management plan.

Systems for Ensuring that Proper Business Operations Are Conducted within the Teijin Group

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

Systems for the Preservation and Management of Information in Relation with the Directors’ Performance of Their Duties

1. (1)Directors shall preserve and manage, in an appropriate manner and in accordance with the relevant company regulations, documents related to the execution of their duties, including the minutes of General Meetings of Shareholders and minutes of the Board of Directors meetings, and other important information.
2. (2)The CEO shall be responsible for monitoring and supervising the preservation and management of these documents and information.
3. (3)Documents related to the performance of director duties shall be preserved for at least ten years and shall be accessible whenever necessary.

Provisions Concerning Employees Assigned to Assist the Statutory Auditors in Performing Their Duties, the Independence from Directors of Such Employees, and the Validity of Instructions Given to Such Employees

1. (1)The Company places the Teijin Group Auditors Office directly supervised by full-time Statutory Auditors to assist Statutory Auditors in performing their duties, which shall have, as a general rule, two or more Auditor Assistants. The Auditor Assistants may also act as Statutory Auditors of Teijin Group companies, but it shall not act as corporate officers or employees having executory duties at Teijin Group companies.
2. (2)The Auditor Assistants may also act as Statutory Auditors of Teijin Group companies, but it shall not act as corporate officers or employees having executory duties at Teijin Group companies.
3. (3)To secure the independence of Auditor Assistants above, all decisions concerning personnel issues affecting Auditor Assistants require the prior consent of the full-time Statutory Auditors, and the full-time Statutory Auditors shall assess the performance of Auditor Assistants.

Systems for Reporting to Statutory Auditors by Directors, Corporate Officers and Employees of Teijin and its Subsidiaries, and Other Systems for Reports to Statutory Auditors

1. (1)The full-time Statutory Auditors of the Company shall attend the meetings of the Board of Directors and other important meeting bodies of the Company, as well as those of the important meeting bodies of its main subsidiaries.
2. (2)Representative Directors, etc. shall report at the meetings of the Board of Directors and other important meetings on their performance of duties with regard to the business operations, functions, and subsidiaries under their charge.
3. (3)Directors, officers and employees of the Company and its subsidiaries shall report to a Statutory Auditors of the Company as soon as they discover a significant decline in Company's credibility, serious adverse effects on the performance of the Company, significant damage related to the environment, safety and health (ESH) or product liability (PL), serious violations of internal rules and other similar events.
4. (4)The Directors, officers and employees of the Company and its subsidiaries shall report on the business operations, functions, and subsidiaries under their charge, when they deem it necessary to do so, or at the request of the Statutory Auditors of Teijin, and shall cooperate with the investigations of the Statutory Auditors of the Company.

Systems for Ensuring that Persons Reporting to the Statutory Auditors Are Not Subject to Unfair Treatment Because of Such Reporting

1. (1)Group Ethics Regulations stipulates that no person shall be treated unfairly because of reporting or notifying illegal or unethical conduct and so forth.

Policy Regarding Processing of Expenses and Payment Duties Arising with Respect to the Statutory Auditors’ Performance of Duties, Prepayment of Expenses, and Reimbursement Procedures

1. (1)The Company shall bear the expenses and payment duties required for the Statutory Auditors’ performance of duties, and shall promptly respond to requests for pre-payment of expenses in accordance with the Companies Act after confirmation.

Other Systems for Ensuring that the Audits of Statutory Auditors Are Conducted Effectively

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