Compliance

Policy and approach

The Group places its corporate philosophy, Jun-Ri-Soku-Yu (adhering to reason leads to prosperity), at the core of compliance.

Furthermore, based on the fundamental principles stated in the TOYOBO Group Charter of Corporate Behavior, we have established the TOYOBO Group Employee Conduct Standards as the rules all employees must follow. To promote understanding and widespread awareness of the rules among group employees, we distribute the TOYOBO Group Compliance Manual, which clearly explains the standards, and conduct workplace reading sessions.

TOYOBO Group Compliance Manual / TOYOBO Group Employee Conduct Standards (theme excerpts only)
(24th edition, October 1, 2025)

Structure

The Compliance Committee, composed of members from the Board of Management, promotes Group-wide compliance from a management perspective. A sub-committee, the Compliance Promotion Committee, has been established to consider specific initiatives. The Legal and Compliance Department serves as the secretariat for both committees, driving legal compliance and fostering adherence to compliance standards throughout the group.

Compliance promotion cycle

Targets and indicators

Targets

Each and every employee complies with laws, regulations, and rules, and acts with integrity. By fostering a shared strong sense of ethics, we aim to cultivate a corporate environment and culture founded on trust.

Indicators and results

Initiatives

Compliance promotion activities

In fiscal 2026, the Compliance Committee met twice and the Compliance Promotion Committee met four times. Under the slogan “small things matter,” the Group conducted awareness-raising activities, education and training, and compliance consultation services to enhance compliance awareness.

Compliance consultation desks

The Group has established various compliance consultation desks (internal reporting desks) for all employees and executives. These desks receive reports and requests for consultation regarding violations of laws and rules, misconduct, unethical behavior, including corruption such as bribery, embezzlement, and other corrupt practices, violations of competition laws such as bid-rigging and cartels, and bullying and harassment, as well as other issues occurring in the workplace. We strive for early detection, correction, and prevention of these issues.

Following fiscal 2025, the Group continued to develop overseas and multilingual consultation channels (global internal whistleblowing hotline).

To ensure that these consultation desks can be used with confidence, we guarantee protection of privacy, including the names of people who seek consultations, ensure that there will be no disadvantage for employees who consult or report, and accept anonymous requests for consultation.

We are making efforts to raise awareness of these consultation desks through means including the distribution of stickers with information on the desks’ usage and the publication of Compliance Mini Study for learning about compliance through case studies.

Topics for consultation

1. Legal violations and violations of internal regulations and rules
2. Acts that violate the Compliance Manual "Corporate Code of Conduct"
3. Workplace harassment
4. Consultation on other compliance issues that are difficult to judge, etc.

• The global reporting desk is intended for serious violations, misconduct, and wrongdoing involving executives.

Types of compliance consultation desk

1. Internal consultation desk
2. External professional service company consultation desk (corporate ethics hotline, including the global internal reporting desk)
3. External legal counsel desk
4. Audit and Supervisory Committee desk

In fiscal 2026, there were 100 consultations, including two received through external compliance consultation desks. The largest number of consultations related to communication, interpersonal relationships, and harassment, followed by human resources and labor matters, such as attendance and employment conditions. In addition to providing advice and responding to inquiries, the Company conducted fact-finding and investigations while respecting the wishes of the person seeking consultation. Where issues were identified, corrective actions and measures to prevent recurrence were implemented.

Number of consultations for compliance consultation desks (internal reporting service)

Details of consultations (FY2026)

Process for handling consultations at compliance consultation desks

1. Verify the content of the consultation or report received at the reporting desk.
2. Conduct fact-finding investigations through the reporting desk and relevant departments or companies, including verification of evidence and interviews with the involved parties or third parties.
3. Assess the presence and severity of any violations or misconduct based on the investigation results.
4. If a violation or misconduct is confirmed, implement corrective and recurrence prevention measures through the relevant departments or companies based on the nature of the issue. Provide guidance or impose disciplinary action on the responsible individuals as appropriate, and implement recurrence prevention measures across the group.
5. Provide feedback to the reporting or consulting individual via the reporting desk and follow up on corrective actions as needed.

Education and awareness-raising activities

Formulation, revision and dissemination of compliance manual

We established the TOYOBO Group Employee Conduct Standards, which outline the rules that all employees of Toyobo Group must adhere to, in accordance with the corporate ethics provisions outlined in the TOYOBO Group Charter of Corporate Behavior.

In 2000, we issued the TOYOBO Group Compliance Manual, which provides a clear and understandable explanation of the Employee Conduct Standards, and distributed it to all employees. Subsequently, we have issued global versions in English and Chinese and have been revising the Manual gradually. At overseas locations, we are creating localized versions tailored to the laws, regulations, and customs of each country or region.

We promote awareness of the Charter of Corporate Behavior and Employee Conduct Standards through training that includes readings of the Manual at workplaces, among other efforts. This training applies to all officers and employees of our Group, including contract, temporary, and part-time positions. Overseas personnel are assigned from Japan.

The Manual includes measures to prevent corruption, bribery, and other corrupt practices, bid-rigging, cartels, unfair competition, improper accounting, along with provisions for health and safety, proper management of working hours, and prevention of bullying and harassment.

Awareness-raising activities during Compliance Enforcement Month

Every October is designated as Compliance Enforcement Month within Toyobo Group. During this time, various initiatives are undertaken collectively throughout the Group, including the dissemination of a message from the president, readings of the Compliance Manual, hosting of compliance study sessions, and conducting compliance questionnaires. We also use posters and digital signage to communicate information about the consultation desk for compliance.

Holding compliance study sessions (training)

In fiscal 2026, we distributed a video of the compliance study sessions (training) targeting management-level personnel—including general managers, managers, section chiefs, and supervisors— as well as general employees across all Toyobo business sites and affiliate companies. We produced and distributed 12 in-house training videos covering such themes as compliance, handling workplace consultations, information security and legal systems, and the prohibition of sexual harassment. A cumulative total of 5,328 employees completed the training.

Various other trainings

As part of level-specific and occupation-specific training for managers, new employees, sales staff, and personnel being sent on overseas assignments, compliance education is provided. In fiscal 2025, a total of 30 various training sessions were held.

We also implemented discussion-type training for managers, focusing on topics that are of particular importance to the company, such as safety, quality, and compliance (e.g., accounting fraud prevention, bullying and harassment prevention).

Mini study and report issuance

We publish the “Compliance Mini Study,” which educates employees on potential workplace violations using a case study format (in principle, Japanese versions in odd-numbered months and multilingual versions in even-numbered months), as well as "Compliance Reports," issued on an ad hoc basis and based on actual cases of workplace violations.

Compliance and risk assessment

Every year during Compliance Enforcement Month, the Group conducts an anonymous awareness survey. Through this survey, the Group assesses the level of compliance awareness and identifies the existence and nature of compliance-related issues at Group companies. When issues are identified, corrective actions are taken and compliance activities are improved. The survey also serves as a compliance self-check for respondents, and through its regular implementation, the Group seeks to further enhance compliance awareness throughout the organization.

In fiscal 2026, responses were received from 7,534 employees. The aggregated and analyzed results of the awareness survey are disclosed to all employees. Information on individual issues and concerns identified through the survey is also shared with relevant departments in a manner that does not identify respondents, and is used to improve situations and help prevent the occurrence of problems.

Anti-corruption initiatives

The Group positions the prevention of corruption, including bribery and other improper conduct, as well as the prevention of bid-rigging and cartels, unfair competition, and accounting fraud, as key compliance issues. In particular, to prevent corruption such as bribery, the Group has established policies and regulations and developed guidelines that set forth practical and specific rules, including decision-making criteria and monetary thresholds for gifts and hospitality.

In order to maintain fair and sound business relationships with business partners, the TOYOBO Group of gifts and hospitality require employees to decline monetary gifts, cash equivalents, and gifts or hospitality that exceed socially accepted norms. In addition, the Group has introduced a reporting system requiring the appropriate reporting of gifts and hospitality received and works to ensure transparency.

In fiscal 2026, there were no violations of anti-corruption laws, no administrative penalties, employee dismissals, fines, or surcharges related to corrupt practices.

Assessment of Corruption Risks

In fiscal 2022, as part of our Company-wide risk management activities, we conducted a comprehensive risk identification and determined our critical risks through an assessment based on two axes: impact and likelihood of occurrence.
Among these, we selected legal and compliance risks including corruption risks. Following the decisions on activities by the Risk Management Committee chaired by the President, the departments responsible for risk management are leading the ongoing implementation of control measures.
From fiscal 2023 through fiscal 2025, we conducted assessments of significant risks including corruption risks at Group companies including overseas locations and engaged in dialogues based on anticipated risk scenarios. We confirmed the magnitude of risks at each location and the status of responses, thereby comprehensively grasping legal compliance risks.
In fiscal 2026, the Group also carried out more specific risk assessments across the Group covering matters such as violations of anti-corruption laws in overseas jurisdictions and illegal political contributions and donations. The assessments confirmed that there were no significant corruption risks at any department or site, and the Group has continued these efforts since then.

Supervision by Directors

Each year, the status of compliance activities, including anti-corruption initiatives, is reported to the Board of Directors, and effective oversight is provided by Outside Directors and members of the Audit and Supervisory Committee from an external perspective.