Note: This document has been translated from the Japanese original for reference purposes only.
In the event of any discrepancy between this translated document and the Japanese original,
the original shall prevail.

Corporate Governance
Last Updated: July 3, 2023

Toyobo Co., Ltd.
Ikuo Takeuchi
President and Representative Director
Contact: TEL: +81-6-6348-4208
Securities Code: 3101
https://www.toyobo-global.com/
The corporate governance of Toyobo Co., Ltd. (hereinafter referred to as the “Company”) is described
below.

I.

Basic Views on Corporate Governance, Capital Structure, Corporate Attributes andOther Basic Information

1. Basic Views
Based on the corporate philosophy “Jun-Ri-Soku-Yu,” the Company believes that its purpose is tocontribute to solving social issues through its proprietary technologies after ascertaining these issues
from a long-term perspective.
The Company, to respond to the changing times and enhance sustainable corporate value in the future
as well, has established the policies of (1) ensuring timeliness and accuracy in decision-making, (2)ensuring transparency in management, and (3) emphasizing fairness, and will work to appropriately
collaborate with all stakeholders, such as shareholders. Furthermore, by carrying out its fiduciary
responsibility and accountability to shareholders, the Company will ensure the effectiveness ofcorporate governance and continually work on its improvement.
[Reasons for Non-compliance with the Principles of Japan’s Corporate Governance Code][Supplementary Principle 4-2-2 Formulation of Basic Policy for Initiatives Concerning Sustainability]
The Sustainability Committee, which is chaired by the President, discusses issues concerning
sustainability, taking into account the issues of “offense” (maximization of profitable opportunities) inaddition to “defense” (risk minimization) thus far.
The Board of Directors has formulated Sustainable Vision 2030 based on discussions by the
Sustainability Committee stated above. We are developing sustainability initiatives in our businessactivities in step with the 2025 Medium-Term Management Plan, which back-casts from this vision.
Furthermore, recognizing the need to further deepen discussions on intellectual property, the Board of
Directors has included the issue into its annual plan to ensure even more effective supervision.
[Disclosure Based on the Principles of Japan’s Corporate Governance Code][Principle 1-4 Cross-Shareholdings]
The Company shall periodically review cross-shareholdings from assorted perspectives, such as theimpact on improving medium- to long-term corporate value and economic rationality, and sell any stock
which is no longer meaningful as is appropriate. On the other hand, the Company shall enter into crossshareholdings with key business partners when judging that the maintenance and strengthening of
stable relationships with the business partners will contribute to sustainable growth and enhancementof medium- to long-term corporate value of the Company.
The Board of Directors individually reviews cross-shareholdings every year, including future businessstrategies and operational relationships, and determines whether or not to continue holding theseshares.
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Also, with regard to the exercise of voting rights in cross-shareholdings, the Company deeply considers
the status of the business partner and the content of the proposals, and as needed, discusses with thebusiness partner. The Company thereby confirms whether these holdings contribute to the sustainablegrowth and medium- to long-term enhancement of corporate value of the Company and its business
partner, and makes a comprehensive decision.
[Principle 1-7 Transactions among Related Parties]
Competitive transactions and transactions involving conflicts of interest between the Company andDirectors must be approved at the meeting of the Board of Directors according to laws and regulations,and internal rules. When this transaction is carried out, important facts shall be reported to the Boardof Directors. Because there is no major shareholder who holds 10% or more of voting rights, theCompany has not established approval procedures when conducting transactions with major
shareholders.
[Supplementary Principle 2-4-1 Ensuring Diversity in Appointment of Core Human Resources]
As the Group believes that human resources are the most important management resource, it supports
the growth of each employee through the creation of an environment where employees who havediverse experiences, skills and characteristics can work with pride and a sense of fulfillment.
The Group has specified in the “Toyobo Group Charter of Corporate Behavior” that it will ensure thediversity of employees, and carries out various measures, such as the promotion of the active
participation of female, active hiring of foreign employees, hiring of employees with experience at othercompanies, maintenance of employment rate of people with disabilities, and support of the active
participation of middle-aged people and seniors. Furthermore, the department in charge of labor affairs,
the occupational physician and nursing professionals, and the health insurance association work inclose coordination under the Chief Health Officer to promote “health and productivity management,”
aiming to contribute to organizational vitality and improvement of business performance by maintaining
and improving employee health and productivity. We have received the “2023 Certified Health &Productivity Management Outstanding Organization (Large Enterprise Category (White 500))”
certification under the “Certified Health & Productivity Management Outstanding Organizations
Recognition Program.” These policies and initiatives have been disclosed on the Company’s website
and in the Integrated Report.
(Company’s website: https://www.toyobo-global.com/sustainability/society/human_resources/)(Company’s website (Integrated Report): https://ir.toyobo.co.jp/en/ir/library/integrated.html)
The diversity of managers, who are core human resources, is being worked on as an important theme
that will support the Group’s sustainable growth, and the targets, current status, etc. of such is asfollows (female and mid-career hires are on a non-consolidated basis and foreign hires are included inoverseas Group companies).
・Appointment of female employees to management positions
Due to the continuous activities to promote the active participation of female, the ratio rose yearly to
4.7% as of the end of fiscal 2023. With the target of 5.0% by fiscal 2026, the Company will continue toproactively carry out the hiring and training of female employees. One policy is that the ratio of female
employees who are hired as new graduates from the global course, making them candidates for
management, shall be 40%, and the cumulative result over the past five years was approximately 37%.
・Appointment of foreign employees to management positions
The Company believes that human resource strategies, not only for the Company, but for overseas
Group companies as well, are becoming even more important for the promotion of global expansion.
Currently, there are a small number of foreign managers at the Company, but at overseas Group
companies, foreign managers make up around half of the approximately 170 employees at a level
equivalent to department manager (full-time) or higher. Going forward, the Group will focus even moreon hiring and developing foreign employees, and will appoint even more to management positions.
・Appointment of mid-career employees to management positions
Currently, the ratio of mid-career employees among the Company’s management is 20% or more.
Going forward, the Company will proactively hire and appoint mid-career employees, primarily for roles
where sophisticated skills are required, in order to improve the current level.

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[Principle 2-6 Roles as Asset Owners of Corporate Pension Plan]
The results of operating reserves of the corporate pension fund has direct impact on the parent entity.
Therefore, the Asset Management Committee is comprised of labor side representatives and members
selected by the Finance, Accounting and Control, and Human Resources departments. This committee
regularly monitors the status of asset management and deliberates the following items.
1 Matters concerning basic policy of management
2 Matters concerning management guidelines and ratios of policy-related asset holdings
3 Matters concerning the selection and evaluation of the fund management agencies
4 Other matters concerning asset management
The Company is taking efforts to construct a system which enacts proper management, including
appointment of personnel with appropriate qualities in the executive director of operations of thecorporate pension fund and regularly undergoing rotation, as well as regularly sending officers andemployees to a pension seminar run by an outside institution to improve quality. In addition, regarding
the exercising of voting rights by entrusted fund management agencies for proposals submitted at a
General Meeting of Shareholders of the Company, the system appropriately manages conflicts ofinterest between the Company and beneficiaries by respecting the judgment of the entrusted fundmanagement agencies and allowing labor union participation in the Asset Management Committee and
Board of Representatives.
[Principle 3-1 Enhancement of Disclosure](i) Management philosophy, management plan, etc.
The Company maintains a corporate philosophy based on the words the founder Eiichi Shibusawa
lived by: “Jun-Ri-Soku-Yu (realizing prosperity by acting rationally)” Please refer to the Company’s
website for information about “Jun-Ri-Soku-Yu.”
https://www.toyobo-global.com/company/philosophy/
Upon the establishment and public announcement of the management strategy and management plan,
the Company presents its specific goals and a focused explanation of what must be done to achievethese goals through disclosure and explanations at presentation to institutional investors, Integrated
Report, and on the Company’s website. The details of the medium-term plan between 2022 and 2025
is disclosed on the Company’s website.
https://ir.toyobo.co.jp/en/ir/management_policies/mid-plan.html(ii) Basic views and basic policies on corporate governanceFor basic views, please refer to “I. 1. Basic Views.” Basic policies are as follows:[Basic policies on corporate governance](1) Securing the rights and equal treatment of shareholders- The Company shall comply with laws and regulations to appropriately secure shareholders’ rights
practically. Furthermore, the Company shall construct an environment for shareholders toappropriately exercise those rights in order to ensure appropriate cooperation with shareholders.
(2) Appropriate cooperation with stakeholders other than shareholders- The Company shall respond flexibly to changes in the times based on the corporate philosophy of“Jun-Ri-Soku-Yu” and take efforts in corporate governance and compliance, which are thefoundations of enhancing corporate value.
- The Company regards corporate value as “value formed by balancing economic value (corporate
profit) and societal value (trust and valuation from stakeholders and contribution to solving social
issues),” and we address issues surrounding sustainability under the leadership of the
Sustainability Committee (chaired by the President).
- The Company will establish various principles for cooperation with each stakeholder in the Toyobo
Group Charter of Corporate Behavior and endeavor to ensure that these principles are widely
understood and practiced by all Group officers and employees.
(3) Ensuring appropriate information disclosure and transparency- The Company conducts appropriate disclosure of not only financial information, but also nonfinancial information such as the management policy and corporate governance based on laws andregulations. Furthermore, the Company takes efforts to provide easily understandable and useful-3-

information from the perspective of actively disseminating information about the Company’s efforts
and ensuring the transparency and fairness of Company’s decision-making.
(4) Responsibilities of the Board of Directors- Based on their fiduciary responsibility and accountability to shareholders, the Board of Directors of
the Company shall construct a corporate governance system, described as below, which aim toenhance sustainable corporate value.
- The Company adopts a structure of a company with Board of Corporate Auditors and implements
an executive officer system. This system allows for timely decision-making and efficient businessexecution by clearly separating the roles of “decision-making/oversight” by the Board of Directors
and “execution” by the Executive Officers.
- In order to establish a balanced system as a whole, which maintains the expertise and skills
required for appropriate choices of a strategic course and important decisions on the execution ofbusiness and the independence required for the strengthening of management supervision, andsecures diversity in terms of career history, gender, and age, etc., the Board of Directors is
composed of the Chair of the Board, Outside Directors, and Directors who concurrently serve as
Executive Officers. The ratio of Outside Directors shall be one third or more.
- Outside Officers are appointed based on the Independence Standards for Outside Officers so thatthey will be able to execute its role and responsibilities. In particular, for Outside Directors, thefollowing main roles and responsibilities are stipulated to be fulfilled from the perspective ofensuring a supervisory function and maximizing shareholder return.
i. advise on management policy, management plan formulation, and management improvement
based on own knowledge.
ii. supervise management through the appointment and dismissal of management and otherimportant decisions at the Board of Directors.
iii. oversee any conflicts of interest between the Company or shareholders and management.
- The Company aims to enhance its support system for Outside Officers, such as the administrative
office of the Board of Directors providing prior explanation of important matters. Furthermore, aLiaison Meeting of Outside Officer, comprised only of Outside Officers, is held regularly, where they
can share their understanding and exchange information.
- The Company shall maintain transparency and fairness regarding the nomination andcompensation of Directors, etc. by consulting to the advisory body comprised mainly of Outside
Directors.
(5) Dialogue with shareholders- The Company, in order to contribute to the enhancement of sustainable corporate value, strives toconstruct an appropriate environment for its shareholders to exercise their rights. Furthermore, theCompany discloses in a timely and appropriate manner both financial and non-financial information
which can contribute to constructive dialogue as well as takes efforts to construct a system topromote constructive dialogue between the Company and shareholders and investors.
(iii) The Board of Directors’ policies and procedures in determining the compensation of the senior
management and Directors
The policies and procedures related to the compensation of senior management (hereinafter“Directors who serve concurrently as Executive Officers”; the same shall apply hereinafter) and other
Directors are stated in the Notice of the Annual General Meeting of Shareholders (“Mattersconcerning corporate officers” of the Business Report).
(Company’s website: https://ir.toyobo.co.jp/ja/ir/stock/shareholder.html)(iv) The Board of Directors’ policies and procedures in the election and dismissal of the senior
management and the nomination of candidates for Director and Corporate Auditor
The election and dismissal of senior management and the nomination of candidates for Director andfor Corporate Auditor are made in consideration of their excellent character and insight appropriate totheir respective responsibilities, as well as the separately established standards for the nomination of
officers, etc. The decision is made by the Board of Directors after deliberation by the Nomination andCompensation Advisory Committee, a majority of whose members are Outside Directors (Chairperson:-4-Outside Director). For views on the composition of the Board of Directors and the Board of Corporate
Auditors, please refer to Supplementary Principle 4-11-1.
<Reference: Outline of Standards for Nomination, etc. of Directors and Corporate Auditors>- Candidate for Director (excluding candidate for Outside Director)- In addition to managerial knowledge, achievements, experience, and skills, the candidate
should possess a company-wide perspective.
- Candidate for Outside Director- The candidate should contribute to the enhancement of corporate value and strengthening ofsupervisory functions, such as by providing business suggestions and management support.
- The candidate must meet the Independence Standards for Outside Officers.
- Candidate for Corporate Auditor- The candidate should be able to make appropriate decisions from an independent andobjective standpoint in auditing such matters as the execution of duties.
- The candidate for Outside Corporate Auditor must meet the Independence Standards for
Outside Officers.
The dismissal of senior management is decided by the Board of Directors based on deliberations andreports from the Nomination and Compensation Advisory Committee when corrupt, unjust, or disloyal
actions are suspected, or when there are reasons unbecoming of an officer.
(v) The Board of Directors’ statements concerning individual election, dismissal and nomination whenelecting and dismissing senior management and nominating candidates for Director and Corporate
Auditor based on (iv) above
Career summaries and reasons for nomination of candidates for Director and Corporate Auditor are
disclosed in the Notice of the Annual General Meeting of Shareholders (Reference Documents for
General Meeting of Shareholders).
Information regarding the dismissal of senior management shall be disclosed as needed in a timely
and appropriate manner to stakeholders, including shareholders.
[Supplementary Principle 3-1-3 Sustainability Initiatives, Etc.]
In order to accelerate initiatives for sustainability, the Group specified materiality (priority issues) on
which to focus by taking into consideration stakeholders’ expectations and wishes as well as
management issues and the level of importance for the Group, and prioritizing them.
Concerning specific initiatives for solving materiality, the Group has set targets and KPI, and theprogress of such is managed by the Sustainability Committee, which is chaired by the President.
These sustainability initiatives are proactively conveyed in the Integrated Report and on the Company’s
website.
(Company’s website: https://www.toyobo-global.com/sustainability/)(Company’s website (Integrated Report): https://ir.toyobo.co.jp/en/ir/library/integrated.html)
Concerning human capital, R&D and innovation, data security, supply chains, etc., the initiatives forrealizing the corporate philosophy and achieving SDGs are presented in the Integrated Report.
Regarding intellectual property, its basic policies and strategies are disclosed on the Company’s
website.
Furthermore, as part of our climate change-related information disclosure based on the TCFD
proposals, in fiscal 2022, in our mainstay films business, we set two scenarios and studied the risks
and opportunities for each of case: a less than 2°C scenario in which the transitional impacts become
apparent, and a 4°C scenario in which the physical impact become apparent. The details of the study
were posted in the Integrated Report issued in September 2022. In fiscal 2023, the scope of scenario
analysis was expanded to include the businesses of the Lifestyle & Environmental Solutions Division,and the company-wide financial impact was also evaluated and included in the Annual Securities
Report.

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[Supplementary Principle 4-1-1 Outline of Scope of Matters Delegated to Management]
In addition to matters designated by laws and regulations, and the Articles of Incorporation, as well as
matters delegated by the General Meeting of Shareholders, the Board of Directors of the Company
shall make resolutions regarding important management matters designated in the Board of Directors
Regulations, etc. Furthermore, matters which fall outside the scope of matters for decision by Board of
Directors shall be decided by the Board of Managing Executive Officers and Controlling Supervisorsdelegated by the Board of Directors or by internal memos, based on detailed and specificproposal/report standards established based on importance.
[Principle 4-9 Independence Standards and Qualification for Independent Outside Directors]
Independence Standards for Outside Officers is stated in the Notice of the Annual General Meeting of
Shareholders (Reference Documents for General Meeting of Shareholders).
(Company’s website: https://ir.toyobo.co.jp/en/ir/stock/shareholder.html)[Supplementary Principle 4-10-1 Views, Authority, Roles, Etc. Related to Independence of Compositionof Committees]
The Company has established the Nomination and Compensation Advisory Committee as an advisory
body for the Board of Directors after ensuring one third or more of the members of the Board of
Directors are Independent Outside Directors. The majority of members of this committee are Outside
Directors, and an Outside Director serves as Chairperson (current member composition: two Outside
Directors, one inside Director (does not execute business); Observer: one Outside Corporate Auditor).
With regard to the basic policy for nominating Directors and nomination proposals for individual
Directors as well as the systems, standards, and calculation methods and other factors for officer
compensation for this committee, each committee member provides appropriate involvement andadvice based on their abundant experience and knowledge in response to proposals from the President,
who is responsible for executives. Furthermore, the Board of Directors shall pay maximum respect tothe reports of this committee, which is highly independent, when carrying out decisions concerning
nominations and compensation.
[Supplementary Principle 4-11-1 Composition of the Board of Directors]
The Board of Directors has identified seven areas of expertise and skills to be featured in light of the
management
strategy:“Corporate
Management,”“Production/Technology/Development,”“Marketing/Sales,”“Finance/Accounting,”“Environment/Society,”“Governance/Risk
Management/Compliance,” and “IT/DX,” and publishes a skills matrix in the Notice of the Annual
General Meeting of Shareholders (Reference Documents for the General Meeting of Shareholders).
The Board of Directors is a balanced system as a whole that maintains the expertise and skills required
for appropriate choice of strategic course and important decisions on the execution of business andthe independence required for the strengthening of management supervision, and ensures diversity interms of career history, gender, and age, etc. The ratio of Outside Directors is one third or more, andthe number of members is prescribed in the Articles of Incorporation as 14 or less.
[Supplementary Principle 4-11-2 Concurrent Positions Held by Directors and Corporate Auditors]
In the election of Directors and Corporate Auditors, the Company confirms that candidates do not haveconcurrent positions which could hinder the expected execution of their duties before they arenominated, and sets guidelines for the number of companies in which they may hold concurrent
positions. In the Business Report and the Reference Documents for General Meeting of Shareholders,the Company discloses the status of important concurrent positions, including cases when a candidate
is serving concurrently as an officer in another listed company.
[Supplementary Principle 4-11-3 Evaluation of Effectiveness of the Board of Directors]
In order to further enhance the functions of the Board of Directors, the Company carried out an overall
analysis and evaluation of the effectiveness of the Board of Directors in fiscal 2023 with the support ofan external organization. An outline of this evaluation is as follows:
1. Implementation method(1) Eligible persons
All Directors and Corporate Auditors-6-(2) Method

A survey (roughly 50 questions) was conducted, and responses were madedirectly to the external organization to which the operations were
outsourced.
(3) Analysis and evaluation
The analysis and evaluation were carried out by the Board of Directors
based on the aggregate results reported by the external organization.
2. Outline of analysis and evaluation results(1) The results of the evaluation indicated that the number of members of the Board of Directors, theratio of inside and outside Directors and management of the Board of Directors meetings by the
Chairperson were largely appropriate.
(2) It was confirmed that certain results and improvements were achieved as a result of addressing
the five issues identified in the previous report: (1) risk management measures for safety anddisaster-management measures, quality assurance, etc. (2) enhancement of discussions on
medium- to long-term themes, (3) further enhancement of initiatives related to the succession planand election procedures, (4) greater efficiency regarding the management, and (5) enhancementof group governance, although there were some comments that some improvements wereinsufficient.
(3) In particular, the above items (2), (3), and (5) were rated relatively low, and are issues to beaddressed going forward, together with a review of the business portfolio newly identified in thisround. The above (1) remains an issue to be addressed going forward as well, in order to further
improve it through ongoing efforts.
3. Issues and future initiatives(1) Risk management measures for safety and disaster-management measures, quality assurance,etc.
→ Further enhance the Group-wide risk management system, including supervision of efforts
toward materiality targets and KPIs.
(2) Efforts to review the business portfolio→ (i) Set as an important theme in the annual plan, to be handled at the beginning of eachmeeting to enhance discussions.
(ii) Promote a review of the business portfolio, including group companies.
(3) Enhancement of Group Governance→ Receive reports on risk management and other matters concerning group companies from the
Corporate Business Management Department, and get involved as appropriate.
→ Ensure the effectiveness of the internal audit function and enhance group governance byreceiving reports on audit plans and results from the Internal Audit Department.
(4) Initiatives for the succession plan and election procedures for CEO→ Further ensure transparency and fairness by receiving activity reports from the Nomination
and Compensation Advisory Committee.
(5) Initiatives for other medium- to long-term themes (DX, human capital, environmental response,etc.)→ Set as an important theme in the annual plan, to be handled at the beginning of each meeting
to enhance discussions.
Through these efforts, the Board of Directors strives to improve the overall effectiveness of the Boardof Directors.
[Supplementary Principle 4-14-2 Policy on Training of Directors and Corporate Auditors]
As well as giving explanations to newly appointed Directors and Corporate Auditors concerning theirroles and responsibilities, the Company bears the cost to send Executive Officers and Directors to an
external training program upon their appointment, in order to acquire the necessary knowledge. In
addition, newly appointed Outside Directors and Outside Corporate Auditors are given explanations
concerning the Company’s operations, finances, and organization, etc. and provided visits to eachbusiness site. They are continuously provided with opportunities after assuming office to acquire thenecessary knowledge in order to sufficiently fulfill their roles and responsibilities.

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[Principle 5-1 Policy for Constructive Dialogue with Shareholders]
Basic policy for dialogue with shareholders are as follows:[Basic policy for dialogue with shareholders]
The Company constructs a system and takes efforts related to IR (including SR) to promote
constructive dialogue between investors and shareholders (including beneficial shareholders) basedon the below policy in order to continuously improve corporate value.
(Controlling supervisors)
Appointing Executive Officers who control IR operations as controlling supervisors, the Company
constructs a system and takes efforts to generate constructive dialogue.
(Sufficient opportunities for dialogue)
The Company implements the below measures for sufficient opportunities for dialogue.
- Annual General Meeting of Shareholders- Earnings briefings, etc. (for analysts and institutional Investors)- Disclosure of related information on the Company’s website(Execution of individual dialogue)
In addition to the measures above, when the Company determines that it is beneficial to the mediumto long-term improvement of corporate value and sustainable growth of the Company, it also conducts
individual dialogue after selecting appropriate responders on a case-by-case basis, while taking into
consideration fairness in information disclosure.
Furthermore, in dialogue, from the perspective of ensuring effectiveness, the Company conducts
surveys on shareholder structure on a regular basis.
(Method of feedback)Executive Officers controlling IR operations report information gained by dialogue to the Board of
Directors, etc.
(Cooperation with internal departments which assist dialogues)
The department in charge of IR operations cooperates with the Accounting and Control Department
and other related departments and summarizes the content, etc. of the dialogues while sufficiently
taking into consideration management of insider information.
(Management of insider information)
The management of insider information is handled in accordance with the disclosure policy posted on
the Company’s website.
(IR related materials)
The Company’s website includes the following data to contribute to dialogues, etc. In light of the ratioof foreign shareholders, the Company also works to provide information in English.
- Consolidated Financial Report- Presentation materials for earnings briefings
Videos, audio recordings and scripts of presentations (H1 and year-end earnings)
Presentation script and outline of questions- Materials for medium-term management plan
- ESG Meeting materials- Annual Securities Reports- Notice of the General Meeting of Shareholders- Extraordinary Reports (voting results)- Newsletter to Shareholders- Factbook- Integrated Report-8-2. Capital Structure
Foreign Shareholding Ratio

From 20% to less than 30%[Status of Major Shareholders]Name

Number of Shares Owned(Shares)

Shareholding Ratio(%)

The Master Trust Bank of Japan, Ltd.
(Trust Account)

13,894,100

15.73

Custody Bank of Japan, Ltd. (Trust
Account)

7,444,500

8.43

TOYOBO Employee Stockholders’
Association

2,315,574

2.62

Toyukai

1,940,110

2.20

SMBC Nikko Securities Inc.

1,854,300

2.10

Nippon Life Insurance Company

1,750,803

1.98

DFA INTL SMALL CAP VALUE
PORTFOLIO

1,472,297

1.67

Meiji Yasuda Life Insurance Company

1,402,900

1.59

STATE STREET BANK WEST CLIENTTREATY 505234

1,111,500

1.26

STATE STREET BANK AND TRUSTCOMPANY 505223

946,896

1.07

Controlling Shareholder (except for
Parent)—Parent (Listed Stock Market)

N/A

Supplementary Explanation—

3. Corporate Attributes
Listed Stock Market and Market Section

Tokyo Stock Exchange Prime Market

Fiscal Year-End

MarchType of BusinessTextiles & Apparels

Number of Employees (Consolidated) at
End of the Previous Fiscal Year

1,000 or more

Net Sales (Consolidated) for the Previous
Fiscal Year

From 100 billion yen to less than 1 trillion yen

Number of Consolidated Subsidiaries at
End of the Previous Fiscal Year

From 50 to less than 100-9-4. Policy for Measures to Protect Minority Shareholders in Conducting Transactions with
Controlling Shareholder—

5. Special Circumstances Which May Have Material Impact on Corporate Governance—- 10 -

II. Business Management Organization and Other Corporate Governance Systems
Regarding Decision-making, Execution of Business, and Supervision in
Management
1. Organizational Composition and Operation
Organization Form

Company with Board of Corporate Auditors[Directors]
Maximum Number of Directors Stipulated in
Articles of Incorporation

14

Term of Office Stipulated in Articles ofIncorporation

1 yearChairperson of the Board

Chairman (excluding the case where the person
concurrently serves as President)

Number of Directors

10

Appointment of Outside Directors

Appointed

Number of Outside Directors

5

Number of Independent Officers Designatedfrom among Outside Directors

5Outside Directors’ Relationship with the Company (1)NameAttribute

Relationship with the Company*
a

b

c

d

e

f

g

h

Takafumi Isogai

Academic

Kimie Sakuragi

From anothercompany

Masaaki Harima

Attorney at law

Hiroshi Fukushi

From anothercompany△

Shoko Takase

From anothercompany

△

i

j

k

* Categories for “Relationship with the Company”* “○” when the director presently falls or has recently fallen under the category;“△” when the director fell under the category in the past;* “●” when a close relative of the director presently falls or has recently fallen under the category; and“▲” when a close relative of the director fell under the category in the pasta. Executive (a person who executes business; hereinafter, the same) of the Company or its
subsidiaryb. Non-executive director or executive of the parent of the Company
c. Executive of a fellow subsidiary of the Company
d. Party whose major client or supplier is the Company or an executive thereof
e. Major client or supplier of the Company or an executive thereof
f. Consultant, accounting professional or legal professional who receives a large amount ofmonetary consideration or other property from the Company besides compensation as a director- 11 -

g. Major shareholder of the Company (or an executive of the said major shareholder if theshareholder is a corporation)h. Executive of a client or supplier of the Company (which does not correspond to any of d., e., orf.) (the director himself/herself only)
i. Executive of a corporation to which outside officers are mutually appointed (the director
himself/herself only)
j. Executive of a corporation that receives a donation from the Company (the director
himself/herself only)
k. OtherOutside Directors’ Relationship with the Company (2)Name

Takafumi Isogai

Kimie Sakuragi

MasaakiHarimaDesignationas
Independent
Officer○○○

Supplementary Explanationof the Relationship

Reasons for Appointment

No items to report.

The Company elected Takafumi
Isogai as an Outside Director sothat his expertise and wideranging knowledge as an
academic specializing in thequality control field can beleveraged to provide advice andsupervision to the Company’s
management.

No items to report.

The Company elected Kimie
Sakuragi as an Outside Director
so that her extensive experienceand wide-ranging knowledge inthe fields of corporate ethics,
compliance, sustainability, etc.
can be leveraged to provide
advice and supervision to theCompany’s management.

No items to report.

The Company elected Masaaki
Harima as an Outside Director sothat his expertise and wideranging knowledge as an attorneyat law can be leveraged toprovide advice and supervision to
the Company’s management.

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Name

Designationas
Independent
Officer

Supplementary Explanationof the Relationship

Reasons for Appointment○

Hiroshi Fukushi worked for
Ajinomoto Co., Inc., abusiness partner of theCompany.
The Company’s transaction
volumes from Ajinomoto Co.,
Inc. made up less than 1% of
the sales of both companies
on average for the past three
years. Therefore, theCompany determined that
there is no risk of a conflict ofinterest between him andgeneral shareholders.

The Company elected Hiroshi
Fukushi as an Outside Director sothat his extensive experience andwide-ranging knowledge as amanager can be leveraged toprovide advice and supervision to
the Company’s management.

○

Shoko Takase worked for
IBM Japan Ltd., a business
partner of the Company.
The Company’s transaction
volumes from IBM Japan Ltd.
made up less than 1% of thesales of both companies on
average for the past three
years. Therefore, theCompany determined that
there is no risk of a conflict ofinterest between her andgeneral shareholders.

The Company elected Shoko
Takase as an Outside Director sothat her extensive experience andwide-ranging knowledge as amanager can be leveraged toprovide advice and supervision to
the Company’s management.

Hiroshi Fukushi

Shoko Takase

Voluntary Establishment of Committee(s)Equivalent to Nominating Committee or
Compensation Committee

Established

Committee’s Name, Composition, and Chairperson’s Attributes
Committee Equivalent toNominating Committee

Committee Equivalent toCompensation Committee

Committee’s Name

Nomination and Compensation
Advisory Committee

Nomination and Compensation
Advisory Committee

Total Committee Members

33

Full-time Members

00Inside Directors

11Outside Directors

22

Outside Experts

0

0

Other

0

0

Chairperson

Outside Director

Outside Director- 13 -

Supplementary Explanation
For the major deliberations of the above committee, please refer to [Supplementary Principle 4-10-1
Views, Authority, Roles, Etc. Related to Independence of Composition of Committees] in [Disclosure
Based on the Principles of Japan’s Corporate Governance Code]. The composition of the Nomination
and Compensation Advisory Committee is as follows:(Nomination and Compensation Advisory Committee)
Committee Member Kimie Sakuragi, Outside Director
Committee Member Hiroshi Fukushi, Outside Director
Committee Member Seiji Narahara, Chairman and Director(Observer
Wakyu Shinmen, Outside Corporate Auditor)[Corporate Auditors]
Establishment of Board of Corporate
Auditors

Established

Maximum Number of Corporate Auditors
Stipulated in Articles of Incorporation

5

Number of Corporate Auditors

4

Cooperation among Corporate Auditors, Financial Auditor and Internal Audit Department- Corporate Auditors hold regular meetings to exchange information, in addition to receiving reportson the audit plans and results from Financial Auditor.
- Corporate Auditors receive explanations on the status of activities, including internal audit plans,from the Internal Audit Department, exchange opinions, and receive reports on the results ofinternal audits and reports on the status of internal control evaluations related to financial reports.
Appointment of Outside Corporate Auditors

Appointed

Number of Outside Corporate Auditors

2

Number of Independent Officers Designatedfrom among Outside Corporate Auditors

2

Outside Corporate Auditors’ Relationship with the Company (1)NameAttribute

Akihiko Irie

From anothercompany

Wakyu Shinmen

Certified public
accountant

Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

l

m

△

* Categories for “Relationship with the Company”* “○” when the corporate auditor presently falls or has recently fallen under the category;“△” when the corporate auditor fell under the category in the past;* “●” when a close relative of the corporate auditor presently falls or has recently fallen under the
category; and“▲” when a close relative of the corporate auditor fell under the category in the pasta. Executive (a person who executes business; hereinafter, the same) of the Company or its
subsidiary- 14 -

b. Non-executive director or accounting advisor of the Company or its subsidiaryc. Non-executive director or executive of the parent of the Company
d. Corporate auditor of the parent of the Company
e. Executive of a fellow subsidiary of the Company
f. Party whose major client or supplier is the Company or an executive thereof
g. Major client or supplier of the Company or an executive thereofh. Consultant, accounting professional or legal professional who receives a large amount ofmonetary consideration or other property from the Company besides compensation as acorporate auditor
i. Major shareholder of the Company (or an executive of the said major shareholder if theshareholder is a corporation)
j. Executive of a client or supplier of the Company (which does not correspond to any of f., g., orh.) (the corporate auditor himself/herself only)
k. Executive of a corporation to which outside officers are mutually appointed (the corporate auditor
himself/herself only)
l. Executive of a corporation that receives a donation from the Company (the corporate auditor
himself/herself only)
m. OtherOutside Corporate Auditors’ Relationship with the Company (2)Name

Designationas
Independent
Officer

Supplementary Explanationof the Relationship

Reasons for Appointment○

Akihiko Irie worked for Osaka
Gas Co., Ltd., a business
partner of the Company. The
Company’s transaction
volumes from Osaka Gas
Co., Ltd. made up less than
1% of the sales of bothcompanies on average forthe past three years.
Therefore, the Company
determined that there is norisk of a conflict of interest
between him and generalshareholders.

Akihiko Irie has a wealth ofexperience in auditing, including
serving as a corporate auditor of
listed companies. The Company
elected him as an Outside
Corporate Auditor to reflect his
knowledge, etc. in the auditing of
the Company.

No items to report.

Wakyu Shinmen is a certified
public accountant with extensive
experience in auditing. The
Company elected him as an
Outside Corporate Auditor toreflect his knowledge, etc. in theauditing of the Company.

Akihiko Irie

Wakyu
Shinmen○[Independent Officers]
Number of Independent Officers

7

Matters relating to Independent Officers
All Outside Officers who meet the qualifications for independent officer are designated as independent
officers.
- 15 -

[Incentives]
Implementation of Measures to Provide
Incentives to Directors

Other

Supplementary Explanation
The Company introduced a plan of compensation for granting restricted shares to Directors (excluding
Outside Directors). Furthermore, the Company introduced a similar plan for Executive Officers(excluding Directors who are also an Executive Officer).
Recipients of Share Options
Supplementary Explanation—[Director Compensation]
Disclosure of Individual Directors’Compensation

No individual disclosure

Supplementary Explanation
The total amount of compensation, etc. for Directors and Corporate Auditors for the previous fiscal year
was 407 million yen for 12 Directors and 70 million yen for four Corporate Auditors. Of the amount, thetotal amount of compensation, etc. for Outside Directors and Outside Corporate Auditors was 50 million
yen for five Outside Directors and 18 million yen for two Outside Corporate Auditors.
The total amount of compensation, etc. includes the compensation for two Directors who retired at theconclusion of the 164th Annual General Meeting of Shareholders held on June 24, 2022.
Policy for Determining Compensation
Amounts or Calculation Methods Thereof

Established

Disclosure of Policy for Determining Compensation Amounts or Calculation Methods ThereofThis information is stated in the Notice of the Annual General Meeting of Shareholders (“Mattersconcerning corporate officers” of the Business Report).
(Company’s website: https://ir.toyobo.co.jp/ja/ir/stock/shareholder.html)[Supporting System for Outside Directors and/or Outside Corporate Auditors]
The administrative office of the Board of Directors was established in the Corporate Planning
Department and it works to enhance prior briefings of important matters.
Members of the Internal Auditing Department are assigned as Corporate Auditors’ staff to assist
Corporate Auditors in their duties.

- 16 -

[Status of Persons Who Have Retired from a Position Such as President, CEO & Co-COO]
Retired President, CEO & Co-COO, etc. Holding Advisory or Any Other Position in the Company
Working FormandConditions(Full-time/Part-time,
Paid/Unpaid,etc.)

Date of
Retirementfrom Position
Such asPresident

Term of
OfficeName

Title/
Position

Responsibilities

MinoruShibata

Honorary
SeniorAdvisorExternal activities, etc.
(uninvolved in management)

Part-time,
unpaidJune 29, 2004

1 year

Junji
TsumuraHonorary
SeniorAdvisorExternal activities, etc.
(uninvolved in management)

Part-time,
unpaidJune 29, 2010

1 year

Ryuzo
Sakamoto

SeniorAdvisorExternal activities, etc.
(uninvolved in management)

Part-time,
paid

June 24, 2020

1 yearTotal Number of Retired President, CEO & Co-COO, etc. Holding
Advisory or Any Other Position in the Company

3

Other Matters
The senior advisor and honorary senior advisor system is established in internal rules.

2. Matters on Functions of Business Execution, Audit and Supervision, Nomination andCompensation Decisions (Overview of Current Corporate Governance System)
The Company is a company with Board of Corporate Auditors, and under this governance system, haselected five Outside Directors and adopted the Executive Officer system.
(1) Board of Directors
The Board of Directors has 10 Directors, including five Outside Directors. The term of office of a Director
is set at one year to ensure a timely response to changes in the business environment and to clarify
the responsibilities of the Directors. Furthermore, in order to establish a balanced system as a whole,which maintains the expertise and skills required for appropriate choices of a strategic course andimportant decisions on the execution of business and the independence required for the strengtheningof management supervision, and secures diversity in terms of career history, gender, and age, etc., theBoard of Directors is composed of the Chair of the Board, Outside Directors, and Directors who
concurrently serve as Executive Officers. The ratio of Outside Directors is one third or more, and thenumber of members is prescribed in the Articles of Incorporation as 14 or less. The Board of Directors
makes decisions and reports on matters such as management policy and management planning, as
well as oversees the business execution of each Director and Executive Officer. Regular Board of
Directors meetings are held once a month, with extraordinary meetings being held as necessary.
(2) Business execution
There are 26 Executive Officers, including some who serve concurrently as Directors. President andRepresentative Director serves currently as CEO and efficiently executes businesses. The Board ofManaging Executive Officers and Controlling Supervisors, where Managing Executive Officers andControlling Supervisors participate, deliberates in advance on matters to be resolved by the Board of
Directors, and determines matters related to business execution that has been entrusted by the Boardof Directors. The Corporate Planning Committee and the Financial Control Committee are established- 17 -

under the Board of Managing Executive Officers and Controlling Supervisors. They deliberate on
important investment and financing projects, etc. from their respective expert standpoints, thereby
managing business risk. The Board of Executive Officers also discusses management issues andcommunicates management policies.
(3) Board of Corporate Auditors
There are two full-time Corporate Auditors and two part-time Corporate Auditors (Outside Corporate
Auditors). They execute their duties by utilizing their knowledge and extensive experience related tofinance and accounting.
(4) Audit by Corporate Auditors, internal audit, and accounting audit(Audit by Corporate Auditors)- The Board of Corporate Auditors of the Company consists of four members - two full-time Corporate
Auditors and two part-time Corporate Auditors (Outside Corporate Auditors). In addition, in order toassist the duties of the Corporate Auditors, we have assigned two staff members for Corporate
Auditors to have them support the Corporate Auditors in their execution of duties.
- Corporate Auditors attend to express their opinions at Board of Directors meetings as well as otherimportant meetings based on internal rules, and investigate the business and property status of theCompany by verifying the content of reports received from Directors, etc., and reading important
documents such as approval requests, etc. They request explanations as necessary and express
their opinions from an independent and objective standpoint. Additionally, Corporate Auditor
Takayuki Tabo has many years of experience in the accounting department of the Company, andOutside Corporate Auditor Wakyu Shinmen is a certified public accountant, and both of them haveconsiderable knowledge of finance and accounting.
(Internal audit)- The Company has established the Internal Audit Department under the direct control of the
President and Representative Director. The Internal Audit Department with 16 members conducts
internal audits based on the audit plans, including at group companies, and conducts monitoring
activities to evaluate the effectiveness of internal controls. Depending on the purpose of the audit,
we conduct general audits that audit matters related to operations under the jurisdiction of theauditee, audits of risk management systems related to major risks such as safety, disasterprevention, and quality, and thematic audits in which audits are conducted based on specific themes.
If the results of an audit indicate that there are matters requiring improvement, we request theauditee to submit an improvement plan and a report on the implementation of improvements, andconfirm the state of implementation and operation of the improvement plan, thereby strengthening
internal control.
- The results of audits and the state of assessment of internal controls over financial reporting arereported to the President and Representative Director, the Board of Directors, and the Corporate
Auditors, with whom the state of activities including audit plans is explained and opinions exchanged.
It also regularly exchanges opinions with Accounting Auditor.
(Accounting audit)- The status of the accounting audit is as follows.
Name of audit corporation: KPMG AZSA LLC
Continuous audit period: 53 years
Certified public accountant who executed business: Yoshihide Takehisa, Tetsuo Yamada, Seiko
OhashiComposition of assistants: eight certified public accountants, 21 others, total 29 persons(5) Outline of limited liability agreements with Outside Directors and Outside Corporate Auditors
Pursuant to the provisions of Article 427, paragraph (1) of the Companies Act, the Company hasentered into agreements with all Outside Directors and Outside Corporate Auditors to limit their liability
for damages. The maximum amount of liability under these agreements is the minimum liability amountprovided for under laws and regulations.

- 18 -

3. Reasons for Adoption of Current Corporate Governance System
The Company is a company with Board of Corporate Auditors, and under this governance system, has
adopted the Executive Officer system and has constructed a corporate governance system whichenables timely decision-making and efficient business execution. Outside Directors bear a role ofmaintaining the transparency and fairness of the Company’s management by utilizing their extensive
experience and providing opinions from an objective perspective. The Company strives to further
ensure transparency and fairness by establishing a voluntary committee (Nomination andCompensation Advisory Committee) which is chaired by an Outside Director.
In addition, in selecting Corporate Auditors, the Company includes personnel with expertise and skills
in finance and accounting, as well as with knowledge of the Group’s business, thereby ensuring theeffective auditing of the execution of Directors’ duties.
In view of the diverse and specialized nature of the Company’s businesses, the Company considers
this current corporate governance system to be suitable.

- 19 -

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Energize General Shareholders Meetings and Smooth Exercise of Voting
RightsSupplementary Explanations
Early Notification of General
Shareholders Meeting

In addition to sending notification 22 days before the date of theGeneral Meeting, the Company publishes information on thewebsites of the Tokyo Stock Exchange and the Company prior tosending notification.

Scheduling AGMs Avoiding
the Peak Day

The Company schedules General Meetings to avoid so-called peakdays.

Allowing Electronic or
Magnetic Exercise of Voting
RightsShareholders have had the option to exercise their voting rights via
the internet using personal computers and smartphones. In addition,
the Company has adopted a service that allows shareholders toeasily exercise their shares using a 2D codes, thereby enhancing
shareholder convenience.

Participation in Electronic
Voting Platform and Other
Efforts to Enhance the
Voting Environment for
Institutional Investors

The Company participates in the electronic voting platform operated
and administered by ICJ, Inc.

Providing Convocation
Notice in English(Translated Fully or
Partially)

The brief Notice of Convocation and Reference Documents for the
General Meeting of Shareholders are provided in English.

Other

The Company strives to enhance report details at the General
Meeting of Shareholders. Additionally, for the Notice of Convocation,
the Company is promoting visualization by adopting UD fonts, using
color, and using graphs and pictures, and is striving to provide
materials for the General Meeting of Shareholders that are easy forshareholders to read and understand.

- 20 -

2. IR Activities
Supplementary Explanations
Preparation and Publicationof Disclosure Policy

This is published on the Company’s website.

Regular Investor Briefings
for Analysts and Institutional
Investors

After announcing the H1 and year-end
earnings, the Company holds briefings in which
either President or Director in charge of the
Accounting and Control Department reports anoutline of earnings, short-term and mediumterm goals, and issues of the Company.

Posting of IR Materials on
WebsiteThe Company posts materials of earnings
briefings for analysts.

Establishment of
Department and/orManager in Charge of IR

The Company established an IR Group in the
Corporate Communication Department.

Explanation byRepresentativeYes

3. Measures to Ensure Due Respect for Stakeholders
Supplementary Explanations
Provisions to Ensure Due
Respect for Stakeholders inInternal Rules, etc.

Provisions are included in Toyobo Group Charter of Corporate
Behavior.

Implementation ofEnvironmental
Conservation Initiatives,
CSR Activities, etc.

The Company established a Sustainability Committee chaired byPresident, describes initiatives related to CSR in the Toyobo Group
Charter of Corporate Behavior, and issues an Integrated Report oncea year.

Formulation of Policies for
Information Provision to
Stakeholders

Provisions related to the disclosure of information are included in the
Toyobo Group Charter of Corporate Behavior.

- 21 -

IV. Matters Related to Internal Control System
1. Basic Views on Internal Control System and Progress of System Development
In accordance with Article 362 of the Companies Act and Article 100 of the Regulation for Enforcementof the Companies Act, the Board of Directors approved a resolution as follows and the Company ispromoting a framework ensuring the properness of business operations.
(1) Framework ensuring that execution of duties by directors and employees complies with laws andregulations and the Articles of Incorporation- The Company adopts an Executive Officer system in order to improve the transparency andfairness of management by clearly separating “decision-making/oversight” and “businessexecution.” In the Executive Officer system, which is clearly defined by the Articles of Incorporation,
the Board of Directors oversees the business execution of Executive Officers. The system also
clearly defines in the Executive Officer Regulations, which state that Executive Officers have an
obligation to comply with laws and the regulations, and the Articles of Incorporation.
- The Company establishes a “Compliance Committee” which is chaired by the Executive Officer incharge of compliance, and the Legal and Compliance Department promotes compliancethroughout the Group. Furthermore, the Company establishes compliance consultation centers as
a contact point for reporting internal problems.
- The Company formulates the “Toyobo Group Charter of Corporate Behavior” and the “Toyobo
Groups Staff Code of Conduct,” which will be distributed to the Group’s officers and employees toensure thorough compliance with laws and regulations, and corporate ethics.
(2) Framework ensuring the efficiency of execution of duties by Directors- The executive officer system enables timely decision-making and oversight by the Board of
Directors and efficient business execution by the Executive Officers.
- The Board of Directors is in charge of “decision-making/oversight” and the Chair of the Board
serves as Chairperson of the Board of Directors. In addition, a dedicated staff member will beassigned to the administrative office to improve the effectiveness of the Board of Directors.
- For “business execution,” President leads business execution and serves as Chairperson of theBoard of Managing Executive Officers and Controlling Supervisors, and the Board of Executive
Officers. The Board of Managing Executive Officers and Controlling Supervisors deliberates inadvance on matters to be resolved by the Board of Directors, and determines matters related tobusiness execution that has been entrusted by the Board of Directors. The Board of Executive
Officers discusses management issues and communicates management policies. Through thissystem, the Company strives for efficient business execution.
- The Sustainability Committee, chaired by the President, establishes policies, measures, andtargets related to important medium- to long-term issues, manages their progress, and reports to
the Board of Directors.
(3) Framework for storing and managing information related to execution of duties by directors- Directors and Executive Officers shall appropriately store and manage documents related to the
execution of their duties and other information, in accordance to the Company’s Document andInformation Management Rules.
(4) Rules and framework for managing risks of loss
- The Corporate Planning Committee and the Financial Control Committee are established underthe Board of Managing Executive Officers and Controlling Supervisors. They deliberate on
important investments and new projects, important investment and financing projects, etc. fromtheir respective expert standpoints, thereby managing business risk.
- The “Risk Management Committee,” chaired by the President, selects major risks and manages
the progress of measures to avoid or mitigate them.
(5) Framework ensuring the properness of business operations of the corporate group consisting of
the Company and its subsidiaries- 22 -

- In terms of business operations, the Company’s departments in charge or the Corporate Business
Management Department manage the progress based on the business content of the relevant
company.
- With regard to governance, the Corporate Business Management Department cooperates with thedepartments in charge and staffing sector and supports the development of such measures as risk
management systems.
- The Company ensures the properness of operations by clarifying the scope in which the Company
can be involved in the important decision-making matters of group companies in accordance with
the Companies Act based on the Board of Directors Regulations, the Board of Managing Executive
Officers and Controlling Supervisors Regulations, Group Companies Management Rules, andother guideline.
- The Company promotes compliance with laws and regulations across the entire group.
- In order to ensure the reliability of financial reports, the Company constructs an internal control
system which includes group companies and conducts effective management and evaluation of
the system.
(6) Framework ensuring the effectiveness of auditing by Corporate Auditor(i) Matters related to employees who assist the duties of the Corporate Auditors, matters related tothe independence of such employees from Directors, and matters related to securing theeffectiveness of instructions to such employees- In order to assist in the duties of Corporate Auditors, Corporate Auditor staff will be assigned.
Corporate Auditors maintain the authority to provide directions and orders to the staff. The consent
of the Board of Corporate Auditors is required for human resource operations, such as theappointment and dismissal of such staff, employee performance evaluation, performance
evaluation for bonuses, etc. The opinion of the Board of Corporate Auditors must also be requested
in order to apply provisions related to rewards and punishments.
(ii) Systems for Directors and employees, etc. of the Company and its subsidiaries to report toCorporate Auditors; Other systems related to reporting to Corporate Auditors; Systems to ensurethat employees will not receive disadvantageous treatment due to reporting- The Company and group companies regularly undergo audits by Corporate Auditors and report thestatus of business operations. Furthermore, when Corporate Auditors of the Company request areport of officers and employees of the Group, they must issue that report promptly andappropriately.
- The Company establishes a dedicated e-mail address to enable officers and employees of theGroup to directly consult with or report to Corporate Auditors of the Company.
- The Company thoroughly communicates that persons who consult with or report to Corporate
Auditors of the Company cannot be dismissed or receive other disadvantageous treatment in the
Company or group companies due to the reason that they conducted this consultation or report.
(iii) Policy on procedures for advance payment or reimbursement of expenses incurred in the executionof duties by Corporate Auditors, and other expenses incurred in the said execution of duties, or
handling of debts- When there is a request from the Board of Corporate Auditors or an individual Corporate Auditor
for expenses required to seek the advice of legal or accounting specialists, this amount is paid
based on the request, excluding cases when that request is acknowledged as unnecessary to their
execution of duties.
(iv) Other Framework ensuring the effectiveness of auditing by Corporate Auditor- It shall be clearly stated in the internal rules that Corporate Auditors attend important meetings
related to group management such as the Board of Managing Executive Officers and Controlling
Supervisors, and the Board of Executive Officers, and provide their opinions. The same rules areclearly stated for the “Sustainability Committee” and other committees.
- Corporate Auditors regularly hold Group auditor liaison meetings targeting major group companies,
where they aim to enhance auditing related to the construction of an appropriate internal control.

- 23 -

- Corporate Auditors receive reports on the results of internal audits from the Internal Audit
Department, receive reports on the status of evaluations of internal control related to financial report,
and exchange information.
(7) Basic views on eliminating anti-social forces and progress of related efforts- In the “Toyobo Group Charter of Corporate Behavior,” the Company aims for the elimination of antisocial forces by standing firmly against antisocial forces and organizations that pose a threat to theorder and safety of civil life, and takes efforts to thoroughly block any kind of relationship with theseforces.

2. Basic Views on Eliminating Anti-Social Forces and Progress of Related Efforts
The Company’s basic views are published in the above “1. Basic Views on Internal Control System
and Progress of System Development (7).”- 24 -

V. Other
1. Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures

Not adopted

Supplementary Explanation
The Company has established the following basic policy regarding company control.
(1) Basic policy on ideal person who has control over decisions on the Company’s financial andbusiness policies
The Company believes that since the Company allows the Company shares to be freely traded as alisted company, the decision on whether to accept or reject any large-scale purchases that involve atransfer of control over the Company should be ultimately decided based on the shareholders’ will.
However, some large-scale purchase actions include those that aim to realize the profits of the largescale purchaser at the expense of the Company and those that may actually force shareholders to sell
their shares. We believe that there are some that may impair corporate value and, in turn, the common
interests of shareholders.
As for the person who has control over decisions on its financial and business policies, the Company
believes that anyone who engages in a large-scale purchase or similar activities that may impair the
corporate value of the Company and, in turn, the common interests of shareholders as described above,is not appropriate. The Company believes that a person who has a sufficient understanding of theCompany’s finances, basic philosophy, business activities and core technologies, and aims to increase
corporate value and, in turn, the common interests of shareholders from a long-term perspective isappropriate.
(2) Special efforts for realization of the basic policya. Efforts to improve corporate value by promoting the medium-term management plan
The Company was founded as a cotton spinning business, and thereafter expanded its business tochemical textiles and synthetic fibers. The Company later entered into the markets of films, functional
polymers, ultrahigh strength polyethylene fiber, functional membranes and enzymes for diagnostics,
and has continued to expand its specialty businesses as represented by these products. The Company
later entered into the markets of films, functional polymers, ultrahigh strength polyethylene fiber,functional membranes and enzymes for diagnostics, and has continued to expand its specialty
businesses as represented by these products. In the course of its long history, the Company has
nurtured and developed its core technologies, namely, “Polymerization,” “Modification,” “Processing,”and “Biotechnology.” The Company has established a business model that responds to meticulous
demands of customers with an integrated marketing, development and production segment. Under thisbusiness model, the Company has been steadily executing the medium-term management plan,
aiming to maintain and expand its businesses in order to further place the Company on the path to
growth.
b. Efforts to improve corporate value by strengthening corporate governance
Under our corporate philosophy of “Jun-Ri-Soku-Yu,” the Company has established an appropriate
corporate governance system according to the Company’s position, and through various measures
such as the medium-term management plan, we will address social issues. In addition to contributing
to the solution of the above, we will strive to improve economic value and enhance corporate value.
(3) Measures to prevent decisions on the Company’s financial and business policies from being
controlled by persons deemed inappropriate under the basic policy
In the event of a large-scale purchase, the Company will make efforts to secure sufficient informationand time for consideration so that shareholders can properly judge the pros and cons of the large-scalepurchase. The Company will take appropriate measures within the range permitted by the Financial
Instruments and Exchange Act, the Companies Act and other related laws and regulations.

- 25 -

(4) The reasons why the specific efforts described in (2) and (3) above are in line with the basic policy,
do not impair the common interests of the shareholders of the Company, and are not intended tomaintain the position of the Company’s officers
The specific efforts described in (2) above are based on the medium- to long-term management
strategy for continuously improving the corporate value of the Company and, in turn, the common
interests of shareholders, and are in line with the basic policy of (1) above.
In addition, the specific efforts described in (3) above are to take measures for shareholders toappropriately judge the propriety of a large-scale purchase of the Company’s shares when a large
amount of the Company’s shares are to be purchased. It is intended to maintain and improve thecorporate value of the Company and, in turn, the common interests of shareholders and is in line withthe basic policy of (1) above.
Therefore, we believe that these efforts do not impair the common interests of the Company’s
shareholders, nor are they intended to maintain the position of the Company’s officers.

2. Other Matters Concerning Corporate Governance System
Overview of Timely Disclosure System
The status of internal framework for timely disclosure of corporate information of the Company are as
follows:(1) Basic Policy of Information Disclosure
The Company’s basic policy in regards to corporate communication is to “aim for lively communicationand strive for timely and appropriate information disclosure, taking into consideration fairness andequality.” As such, the Company is focusing on a. information disclosure as a social responsibility(accountability) and b. communication which doesn’t harm corporate value.
Within which, we will engage in active bilateral communication with shareholders and investors toenhance corporate value.
(2) Internal Framework for timely disclosure
The Company has set General Manager of Corporate Communication Department as a person
responsible for information handling and the IR Group as an organization responsible for information
disclosure. The departments responsible for matters related to account settlement (including results
forecasts) are the Finance Department and the Accounting and Control Department. The department
responsible for matters related to basic policy of management is the Corporate Planning Department.
The department responsible for matters related to organizational operations, etc. is the Human
Resources Department. The department responsible for matters related to stock and securities
exchanges is the Legal and Compliance Department. Proposal of important matters will be issued byeach responsible department and, after passing through the Board of Managing Executive Officers andControlling Supervisors and being approved in the Board of Directors, the information will be promptly
and timely disclosed. Furthermore, proposals related to decisions will be deliberated in the Corporate
Planning Committee and Financial Control Committee before being proposed to the Board of Managing
Executive Officers and Controlling Supervisors.
If, contrary to our intention, a newspaper publishes information about matters not officially provided by
the Company, our first response will be to disclose the information to our shareholders, investors, etc.,
as promptly as possible, through the stock exchange.
(3) Methods of information disclosure
The Company shall disclose information through one or multiple of the following methods: submissionof Annual Securities Reports, etc., registration to stock exchange, distribution of press release, andposting on the Company’s website.
(4) Monitoring pertaining to management of corporate information
Multiple departments will inspect beforehand whether timely information disclosure is conducted
properly and appropriately. In addition, Corporate Auditors will conduct an audit once a year.

- 26 -

(5) Other
The Company makes efforts to train employees regarding information management, spread knowledge
and raise awareness by establishing rules in the Compliance Manual and the provisions on information
handling management.

- 27 -

[Corporate Governance Structure]
General Meeting of Shareholders

Nomination andCompensation Advisory Reporting
Committee*Three members, including
two Outside Directors*Chairperson: Outside
Director

Board of Directors

Accounting audit* 10 Directors, including five Outside Directors
Consultation

Decision-making, supervision, election,and dismissal

President and Representative Director, CEO

ReportingElection anddismissal

Election anddismissal

Election anddismissal

Audit
Reporting

ReportingBoard of Managing
Executive Officers andControlling Supervisors

Board of Corporate
Auditors* Four Corporate Auditors,
including two Outside
Corporate Auditors

Accounting
AuditorReportingAssessing theappropriatenessCorporate Planning
Committee
Financial Control
Committee

Board of Executive
Officers
Sustainability Committee
Risk Management Committee
Climate Change and Biodiversity Committee

Business
execution

Compliance Committee

Functionalorganization

Internal Audit Department
Cooperation
Internal audit
Audit

Internal audit

Cooperation

Group companies
Audit

Each Group company’s
corporate auditors

[Information Disclosure Structure]
Related departments(Account settlement
information/Events)(Decisions)(Other information related
to new products, etc.)(i) Proposals(i) Proposals

Corporate Planning Committee/
Financial Control Committee

Board of Managing Executive Officers andControlling Supervisors(ii) Proposals

Board of Directors(iii) Decisions/Instructions

IR Group(iv) External announcement

Stock exchanges

Press/Investors, etc.

•

Information related toaccount settlement···•

Information related todecisions
Information related toevents

···

•

···

Company’s website

Content of account settlement, revisions toperformance, revisions to dividends, etc.
(Consolidated Financial Report, etc.)
Issuance of new shares, decrease in equity,
share buybacks, share splits, etc.
Damages, changes in major shareholders,matters that cause delisting, etc.