The Teijin Group believes that compliance and risk management are two inseparable pillars of internal control that form the basis for sound corporate governance. We are working hard to ensure that corporate ethics are strictly upheld at our group companies in Japan and overseas.

The Teijin Frontier Group has established a Compliance Risk Management Committee as an organization designed to promote a sound corporate culture while overseeing total risk management for risk accompanying business operations. Based on the corporate philosophy of Teijin Frontier Co., Ltd., the committee puts forward proposals to strengthen corporate ethics, develops compliance systems, and formulates and deliberates on basic policies, objectives, and strategies related to risk management for business operations.

We work to ensure thorough compliance with the Anti-Monopoly Act, an important related law, in accordance with regulations formulated by the Teijin Group such as the "Detailed Regulations Governing Conduct Related to Compliance with the Anti-Monopoly Act and Other Applicable Laws" and the "Anti-Monopoly Act Compliance Guidebook." At the same time, we strive to realize thorough compliance with the "Act Against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors" through related information and educational materials established by the Teijin Frontier Group.

The Teijin Group has set up contact points for consultations and whistle-blowing so that it can activate self-improvement mechanisms in response to problems that arise due legal or ethical deficiencies and resolve these internally. The group has established three contact points for consultations and whistle-blowing in the form of a "Comment Box for Issues Related to Corporate Ethics," which enables consultations with the CSR Chief Executive and the CSR Planning Office Manager, and a "Sexual Harassment Hotline" and a "Compliance Hotline," which enable consultations with external specialist organizations. Each of these enable group officers and employees to consult on issues, provide whistle-blower reports, make requests, or offer suggestions. The hotlines take appropriate measures to protect the identity of persons requiring consultation or whistle-blowers, and are operated in accordance with relevant laws, social norms, and internal regulations under the supervision of the CSR Chief Executive.

To conduct management that is consistent with the Whistleblower Protection Act enforced from April 1, 2006, the Teijin Group also accepts consultations and whistle-blower reports on (suspected) violations of laws and corporate ethics at Teijin Group from Teijin Group subcontractors or other business partners (excluding consultations or whistle-blower reports that are slanderous or malicious in intent). Teijin Group's Corporate Ethics Regulations stipulate that the business partner who initiated the consultation or made the whistle-blower report will not be treated disadvantageously as a result, provided there is no slanderous or malicious intent.

In addition, Teijin Frontier Co., Ltd. has set up a "Questions and Messages to Management" site, that allows people to freely post opinions and questions to the President via the company intranet system, and a "Human Resources Hotline," that accommodates consultations related to human resources or personal issues. In addition, we also set up a new "Corporate Ethics Hotline" that welcomes opinions, consultations, and whistle-blower reports related to corporate ethics, and a consultation desk for consultations and questions related to everyday work activities. In this way, Teijin Frontier Co., Ltd. endeavors to support an open and transparent corporate climate.

• Contact point for consultations and questions related to corporate ethics violations.

Teijin Frontier Co., Ltd. formulated a Major Earthquake Response Manual in 2005, and has enforced it since. The manual calls for the formation of an organization that facilitates responses such as (1) the prompt establishment of an Earthquake Response Headquarters headed by the President following an earthquake, (2) the establishment of an On-Site Earthquake Response Headquarters in the affected area, (3) the confirmation of the safety of employees and their families, and an assessment of damage incurred, (4) the deployment of measures to support living conditions such as the distribution and supply of emergency relief goods, and the provision of temporary housing, and (5) recovery support measures for affected employees and their families. An additional manual was formulated to cover actions during emergency situations such as when an official warning (of an impending earthquake) is expected.

In addition, in the event of major disasters other than earthquakes that have a serious impact on business operations (e.g., natural disasters such as fires, typhoons, and floods) or overseas disasters (e.g., terrorist attacks, riots, kidnappings, SARS), a similar response system will be put in place to stop damage from spreading or prevent secondary damage.

In order to control export security, the Foreign Exchange and Foreign Trade Act regulates brokered transactions involving trade or technology (such as exports of goods and services) with the aim of preventing weapons or other goods that can be used for military purposes from falling into the hands of regimes that threaten international peace and security or into the hands of terrorists or other people likely to engage in alarming activities.

Teijin Frontier Co., Ltd., enacted Security Control Regulations in 1987, and has accordingly built control systems that prevent illegal exports for goods and technologies that may be utilized in the applications described above such as functional materials (e.g., carbon fibers, aramid fibers). All goods or services exported by the company are subjected to a comprehensive examination that reviews parameters, customers, consumers, applications, and destinations, and transactions are approved by an export control officer. In addition, we conduct regular internal audits to verify that export control is properly conducted.

We always post the latest information on laws and regulations related to security export control on our intranet, aim to share regulatory information details internally, and reflect the latter in export control check sheets and other documents through revisions. Furthermore, we conduct security control education to cultivate an understanding of the importance of relevant laws and security control regulations among our employees, and to effectively manage and implement such regulations.