The Shin-Etsu Group has established internal guidelines and rules for complying with various laws and regulations to ensure that it carries out its corporate activities in full compliance with those laws and regulations.

Whenever laws and regulations related to corporate activities are enacted or revised, the Legal Department shares the information internally and ensures that all employees are fully aware of the changes. In addition, to promote understanding of important laws and regulations, we serialize articles explaining them in the company newsletter and host lectures by outside experts. From January to August 2025, we held online courses for employees of Shin-Etsu Chemical and 35 Group companies in Japan on the Antimonopoly Act, the anti-bribery policy, the Subcontracting Act, and the Freelance Protection Act, and 2,156 employees passed a test to confirm their understanding. Furthermore, in December 2025, 2,098 employees from Shin-Etsu Chemical and 32 Group companies in Japan watched a web video explaining the Japan Fair Trade Commission's amendments to the Subcontracting Act (the Proper Transactions Act). We also provided information to Group companies in Japan via the Company’s intranet on topics such as the amendments to the Subcontracting Act and Logistics Special Designation under Japan’s Antimonopoly Act. We also provided information to our overseas Group companies regarding the prohibition on the imposition of non-compete agreements for employees in the United States, the ordinance on payment guarantees for small and medium-sized enterprises in China, and similar topics. To ensure compliance with laws and regulations, the Auditing Department also checks whether Group companies have taken any actions that violate them.

All of the officers and employees have submitted a written oath of compliance to the company. The oath covers compliance with laws, ethics, and company regulations, including compliance with antitrust laws and the prohibition of conflicts of interest. We have also established disciplinary measures to deal with any inappropriate action that may occur.

Shin-Etsu Chemical has established internal rules on insider trading and conducts training and awareness-raising activities to ensure compliance with laws and regulations.

As part of this initiative, in July 2025, we invited an external lawyer to give a lecture in a webinar format. In addition to our own employees, many people from Group companies in Japan and overseas also took part, with a total of 832 people attending.

The lecture explained the scope of parties subject to insider trading regulations and how to identify material non-public information, and introduced points that are prone to misunderstanding and specific examples that require attention in practice. The lecture, which incorporated examples of public tender offers and internal company regulations, gave attendees a deeper understanding of the fact that sharing insider information and recommending transactions are prohibited, and that such actions are subject to disciplinary measures regardless of whether any profit is made. Furthermore, since information can be spread through everyday conversations, meals with friends and colleagues, and the like, the lecture reinforced the importance of maintaining a high level of awareness regarding the handling of internal information.

Feedback from participants included comments such as, "I hadn't realized that transaction may still constitute insider trading even if money is lost," and "This was a valuable presentation, especially investing is becoming more commonplace through programs such as the NISA (Nippon Individual Savings Account)." The lecture materials and recordings are available on the Legal Department's page on intranet so that employees who were unable to attend can access them.

Officers and employees are stipulated to report to the “Compliance Consultation Office” if they discover a violation of laws and/or regulations.

The Compliance Consultation Office is a point of contact for consultation and reporting in the event of identifying suspected violations of laws, ethics, or company regulations in the course of business, or in the event of assuming any suspected violations to happen. Any Shin-Etsu Group officer, employee, adviser, staff member, contractor, or other employee and retiree can use this. To inform employees about the Compliance Consultation Office, we publicize it, for example by posting about it on the Company intranet.

If a report is made to the Compliance Consultation Office, the department in charge of investigation will investigate the content of the report, and the company will take corrective measures as necessary after accurately grasping the facts. The confidentiality of people seeking consultation and whistleblowers will be protected, and they will not be treated unfavorably for consulting or reporting.

In the Basic Sustainability Policy, the Group declares that we will conduct our corporate activities in compliance with laws. In 2015, we established the Anti-Bribery Regulations to clearly indicate that we will not be involved in any form of bribery. The scope of application of the Anti-Bribery Regulations is our officers, employees, and contract employees, and stipulates prohibition of bribery of public officials, non-public officials, etc., and disciplinary action. In addition, by submitting a "Compliance Pledge," we thoroughly prevent the provision of unfair benefits and requests to public officials, customers, and business partners in Japan and overseas. Furthermore, by making the status of compliance with ethics in general one of the items in personnel evaluations, we are working to raise employees' awareness of legal compliance. We also conduct regular internal audits for corruption, embezzlement and bribery. We are also promoting anti-bribery education. From January to August 2025, we held online anti-bribery courses for employees of Shin-Etsu Chemical and 35 Group companies in Japan, and 2,156 employees passed a test to confirm their understanding.

For overseas Group companies, we also conduct risk assessments related to anti-bribery and anti-corruption using the country-by-country corruption perception index published by Transparency International (an international non-governmental organization that tackles corruption issues) to take into account the circumstances such as the country, company size, business details, etc.

The Group declares in the Basic Sustainability Policy that it is committed to conducting its corporate activities in compliance with laws, and we are working to prevent corruption, including bribery. The “Tokyo Principles for Strengthening Anti-Corruption Practices” of Global Compact Network Japan (GCNJ) correspond with the Group’s current policy and initiatives for preventing corruption, so we immediately decided to support them and became a signatory in February 2018.

We will continue to make it our principle to comply with laws and regulations and carry out business activities fairly, and work to conduct business in accordance with the Tokyo Principles and our internal anti-corruption regulations.

In order to comply with export-related laws and regulations such as the Foreign Exchange and Foreign Trade Law, we have established the Security Export Control Regulations. In accordance with this regulation, we are working on the following:

The Group declares in its “Basic Policy on Internal Controls” that the Group shall adopt a firm attitude towards anti-social forces and shall take the measures necessary to cut itself off from any and all associations with them. In accordance with this policy, we developed internal systems under the leadership of the department in charge of managing these issues, and signed memorandums and letters of confirmation regarding the exclusion of anti-social forces with customers and suppliers. In addition, we are working closely with external specialized agencies.