• ●The Corporate Directors will work to conduct fair and appropriate corporate management, and promote thorough dissemination of the particulars of internal controls to employees in accordance with the Corporate Directors Action Guidelines on Internal Controls.
• ● We will take a resolute attitude toward and cut off any and all relationships with antisocial forces that may obstruct the order and security of civil society and corporate activities.
  We will respond to unfair demands organizationally in close coordination with external specialized bodies such as the police and lawyers.
• ●We will strive to build internal control systems integrated with management processes for the purposes of improved business effectiveness and efficiency, increased reliability of corporate information including financial reports, compliance with laws and regulations, and asset protection.
• ●The President will promote the development of internal control systems taking into consideration proposals from the Corporate Director in charge of internal controls as well as the Compliance Committee and the Risk Management Committee established under the Board of Directors.
  For the development of internal control systems, we will take the following measures:

• (i) Corporate Directors will comply with the Corporate Directors Action Guidelines on Internal Controls, which sets forth action standards and norms, practice fair and appropriate corporate management with high ethical standards under an understanding that legal compliance with laws and regulations is necessary as a matter of course, and take the initiative in internal organizations.
• (ii) For the Board of Directors to supervise the execution of duties by Corporate Directors, Corporate Directors will report on their execution of TED’s business to the Board of Directors and mutually monitor and supervise the business execution by other Corporate Directors.
• (iii) To ensure the appropriateness of decision-making processes by the Board of Directors, we will encourage the invitation of non-executive Corporate Directors including Outside Corporate Directors.
• (iv) We will ensure that the execution of duties by Corporate Directors is audited by Audit & Supervisory Board Members in accordance with auditing standards to establish corporate governance systems of high quality that satisfy social reliability.

• (i) Systems Concerning the Preservation and Management of Information on the Execution of Duties by TED’s Corporate Directors

  Information on the execution of duties by Corporate Directors will be prepared and preserved in accordance with laws and regulations and internal rules based on the management standards and management systems for documents relating to the execution of duties by Corporate Directors and managed in a condition that allows them to be inspected by Corporate Directors, Audit & Supervisory Board Members, accounting auditors, etc.

• (ii) Regulations and Other Systems Concerning the Management of Risks of Loss by TED

  a. The Risk Management Committee will be established under the recognition that risk management is one of the highest-priority issues for corporate management.
  b. The Risk Management Committee will, pursuant to the risk policies and the Risk Management Regulations, identify, analyze, and evaluate risks to the entire company, select and monitor those that should be responded to preferentially, and report the status to the Board of Directors.
  c. For risks identified pursuant to the Risk Management Regulations (excluding those addressed by the Risk Management Committee), the Executive Officer in charge will develop, carry out, and continuously improve specific response policies and measures and report particularly significant risks to the Executive Officers Council.

• (iii) Systems to Ensure the Efficient Execution of Duties by TED’s Corporate Directors

  a. Management and execution of duties will be separated through the adoption of an Executive Officer system, and the Board of Directors will determine basic policies and important matters for corporate management based on the Management Policies and supervise the execution of duties.
  
  b. The Board of Directors will determine the Management Plan to clearly define management objectives.
  Executive Officers from the respective divisions will develop and execute strategies for carrying out the Management Plan.
  
  c. The progress of the Management Plan will be managed by the Executive Officers Council composed of Executive Officers from the respective divisions or similar bodies and reported to the Board of Directors.
  
  d. To ensure appropriate and effective duties execution systems, TED will review the Regulations on Approval Authority, etc., as necessary.
  
  e. To ensure the efficient decision-making concerning management and active deliberation, Board of Directors meetings will be held at least once every two months, in principle, and may be held on other occasions as necessary.

• (iv) Systems to Ensure That the Execution of Duties by TED’s Employees Complies with Laws and Regulations and the Articles of Incorporation

  a. TED employees will comply with the Ethics Policies setting forth action standards and norms as well as the Compliance Regulations.
  
  b. The Compliance Committee will monitor the compliance systems and the information security systems including those concerning education and enlightenment and report the status of development and operation of such systems to the Board of Directors.
  
  c. TED will endeavor to understand and prevent the situation of any internal accident or scandal at an early stage through internal or external information reported under the internal reporting system where a third-party agency designated by TED serves as a contact in addition to the internal contact, and in accordance with the internal accident and scandal response flow. TED will guarantee anonymity to reporters if they so desire and ensure that they will suffer no disadvantage.
  
  d. TED will seek to confirm and ensure, through internal audits, compliance with laws and regulations as well as internal rules and regulations including the Articles of Incorporation.

• (i) Systems Concerning Reporting of Matters Regarding the Execution of Duties by Directors, etc. of Subsidiaries of TED

  a. The results of the duties executed by directors, etc. of subsidiaries based on business plans will be reported to the controlling division of TED in accordance with the Affiliated Companies Management Regulations.
  Regarding important matters for the execution of duties, approval by or reports to TED will be requested in accordance with the Approval Standards.
  
  b. The circumstances of subsidiaries will be monitored by TED’s Executive Officers concurrently assuming the position of director, etc. of the relevant subsidiaries, and reported at the Board of Directors meetings of TED, as necessary.

• (ii) Regulations and Other Systems Concerning the Management of Risks of Loss by Subsidiaries of TED

  TED will establish Risk Management Regulations for risk management including that by subsidiaries. Also, in addition to regular reports provided by subsidiaries to the controlling divisions of TED in accordance with the relevant internal regulations, temporary reports will be provided to the controlling divisions, as necessary.

• (iii) Systems to Ensure the Efficient Execution of Duties by Directors, Etc. of Subsidiaries of TED

  The business circumstances of subsidiaries will be reported through the Board of Directors, etc. of subsidiaries, and directors, etc. of subsidiaries will consult with and report to TED's related divisions and Executive Officers in charge, as necessary.

• (iv) Systems to Ensure That the Execution of Duties by Directors, Etc. of Subsidiaries of TED Complies with Laws and Regulations and the Articles of Incorporation

  TED will establish Ethics Policies for the corporate group including its subsidiaries and take measures for compliance with corporate ethics led mainly by the Compliance Committee. It will additionally seek to continuously practice compliance with laws and regulations in its business activities in accordance with the Compliance Regulations.

• (v) Other Systems to Ensure the Appropriate Operations of the Corporate Group Consisting of TED and Its Subsidiaries

  The controlling division will take the initiative in monitoring overall controls to ensure the thorough functioning of the internal control systems including compliance with internal regulations, etc. within the corporate group.

• a. The President will implement measures for ensuring the reliability of financial reports, positioning the development of internal control systems to ensure the reliability of financial reports as one of the most important matters in corporate management.
• b. TED will seek to maintain systems where internal controls will function effectively by reducing, and managing to prevent, the risk of misrepresentation in financial reports.
• c. To ensure the reliability of financial reports, the evaluation team composed mainly of the Auditing Office will continuously perform risk evaluations for business processes and report the evaluation results to the President.
• d. Internal regulations will be developed and enforced with conformity to related laws and regulations such as the Financial Instruments and Exchange Act taken into consideration, as necessary.

a. Systems will be put in place whereby Audit & Supervisory Board Members attend Board of Directors meetings and other important meetings, reports are made to them, and they can inspect important approval requests and reports at any time.

b. Corporate Directors will report to the Audit & Supervisory Board immediately if they discover a fact or an illegal act, etc. that may cause serious damage to TED.

c. Corporate Directors and employees will report the status of the execution of duties promptly upon request by Audit & Supervisory Board Members, and systems will be put in place where employees can report directly to Audit & Supervisory Board Members through the internal reporting system.

• (i) Matters Concerning Supporting Personnel Requested by Audit & Supervisory Board Members to Be Appointed to Assist with Their Duties

  Upon request by an Audit & Supervisory Board Member, an employee will be assigned as a full-time or concurrently appointed assistant to the Audit & Supervisory Board Member after consultation with the Audit & Supervisory Board Member.

• (ii) Matters Concerning the Independency from the Corporate Director of the Assistant Set Forth in the Above Item

  Personnel changes and performance evaluations of Audit & Supervisory Board Members' assistants will require the prior consent of the relevant Audit & Supervisory Board Members.

• (iii) Matters Concerning Assurance of the Effectiveness of Instructions to Supporting Personnel Requested by Audit & Supervisory Board Members to Be Appointed to Assist with Their Duties

  Audit & Supervisory Board Members will request Corporate Directors or the Board of Directors to develop a system to ensure the effective operation of the cooperation system with their assistants.

• (iv) Systems Concerning Reporting to Audit & Supervisory Board Members of TED

  a. Systems for Corporate Directors and Employees of TED to Report to Audit & Supervisory Board Members of TED Audit & Supervisory Board Members will request Corporate Directors and employees to report on business in accordance with the Audit & Supervisory Board Members Audit Standards, and endeavor to collect information and maintain the audit environment.
  
  b. Systems for Directors, Company Auditors, Employees, etc. of Subsidiaries of TED or Those Reported to by Such Persons to Report to Audit & Supervisory Board Members of TED
  To practice compliance management in the corporate group consisting of TED and its subsidiaries, TED will establish an internal reporting system where Audit & Supervisory Board Members serve as contacts.

• (v) Systems to Ensure That Persons Who Made a Report under the Preceding Item (iv) Are Not Treated Disadvantageously Because of Such Report

  TED will provide in the Compliance Regulations that dismissal or any other disadvantageous treatment of reporters on the grounds that they made a report, etc. will not be permitted and take appropriate measures to prevent the workplace environment of the reporter from worsening.

• (vi) Matters Concerning Policies on the Procedure for advance Payment or Reimbursement of Expenses That Arise in Relation to the Execution of Duties by Audit & Supervisory Board Members or other Processing of Expenses or Obligations That Arise in Relation to the Execution of Such Duties

  It will be provided in the Audit & Supervisory Board Members Audit Standards that the expenses determined by Audit & Supervisory Board Members to be necessary for the execution of their duties will be budgeted in advance based on audit plans and that for expenses paid urgently or temporarily, subsequent reimbursement may be required from TED.

• (vii) Other Systems to Ensure That Audits by Audit & Supervisory Board Members Are Performed Effectively

  a. Audit & Supervisory Board Members will maintain close coordination with the Auditing Office and utilize the Auditing Office for support as necessary without requiring the permission of Corporate Directors.
  
  b. Audit & Supervisory Board Members will hold regular meetings with the Representative Director to exchange opinions regarding important audit issues and maintenance in the environment of Audit & Supervisory Board Members audits
  
  c. External specialists such as certified public accountants and lawyers will be utilized if deemed necessary by Audit & Supervisory Board Members for the implementation of audits.