Basic Policy on Internal Control System

Based on the Company Law and associated enforcement regulations, TISI resolved, as follows, a system — internal control system — that ensures the services provided by the corporate group to which the Company and its subsidiaries belong (hereafter, "the Group" or "the corporate group") are fair, and in line with the content of this resolution, the Company will determine rules, establish relevant divisions, formulate plans and policies and otherwise prepare systems to promote a sound management structure. Of note, TISI handles business administration for its subsidiaries under group management and operating agreements signed with the corporate group for which the Company executes business administration directly (hereafter, "subsidiaries"). Business administration of companies other than subsidiaries that still fall under the umbrella of the corporate group will, in principle, be handled by subsidiaries.

1. System to Ensure that the Execution of Duties by Directors and Employees of the Corporate Group Conforms to Relevant Laws and Regulations as well as the Articles of Incorporation

1. To ensure that the execution of duties by directors and employees of the corporate group complies with laws and regulations as well as the Articles of Incorporation, TISI formulated its Basic Policy on Corporate Sustainability. The representative director will make this direction extensively known to the directors and employees of the corporate group and make abundantly clear to all that the basis of corporate activities is premised upon respect for the law and respect for social ethics.
   
   
2. In the course of performing their respective duties, directors and employees of the corporate group will abide by rules pertaining to the organization, the division of duties and designated authority.
   
   
3. TISI will appoint a director responsible for compliance who coordinates compliance practices on a groupwide basis. The Company will establish a compliance control department, set in place a compliance structure that cuts across the Group, identify problem points and make efforts to guide, educate and train directors and employees in appropriate actions to uphold compliance standards.
   
   
4. TISI will maintain an internal reporting system that enables directors and employees of the corporate group to report directly to a designated contact point any behavior that may violate compliance.
   
   
5. Individuals using the internal reporting system shall not be treated unfavorably (put at a disadvantage) on the basis of such reports. Necessary measures will be enforced to protect individuals who have made reports.
   
   
6. Management believes that measures to prevent relationships with antisocial forces (i.e., organized crime groups and other illicit entities) are absolutely imperative, in terms of corporate social responsibility and also as a corporate defense strategy, and declares that the Company will maintain an uncompromising attitude throughout the organization toward antisocial forces and will have no association whatsoever with such individuals or groups.
   
   
7. TISI will put in writing that no relationships with antisocial forces are to be tolerated. In addition, the Company will, through the compliance control department, collect information and always be on the lookout for relationships that could involve antisocial forces, and also maintain a structure underpinned by close cooperation with lawyers and agencies, such as the police, to facilitate appropriate courses of action when required.

2. System for Storing Information Related to the Execution of Duties by Directors

TISI will properly store and maintain the minutes of Board of Directors' meetings as well as authorization documents and other important information pertaining to the execution of duties by directors of the Company, in accordance with laws and regulations and rules for document management.

3. Regulations and Other Systems for Limiting Loss Exposure

1. TISI will properly acknowledge Group risk and establish Rules for Risk Management to prevent the occurrence of loss. In accordance with these rules, the Company will appoint a director responsible for risk management who supervises risk management activities for the Group as a whole and will also set up a risk management supervision division and establish a risk management structure.
   
   
2. TISI will formulate an overall risk management policy for the Group and verify the status of measures to control risk on a regular basis.
   
   
3. TISI will set up a task force when critical risk appears within the corporate group and draw up suitable measures to hold loss to a minimum should such loss arise.

4. System to Ensure Efficient Execution of Duties by Directors of the Corporate Group

1. The Board of Directors at TISI will decide on matters stipulated by law and set forth under Rules for the Board of Directors as well as other significant matters related to business, and will monitor the status of duties executed by directors.
   
   
2. TISI will introduce an executive officer system to realize fast and highly efficient corporate management.
   
   
3. To contribute to the efficiency of the Board of Directors, TISI will set up an executive committee. This committee will discuss important matters related to the execution of business by TISI and the corporate group and perform duties within the scope of authority granted by the Board of Directors.

5. System to Ensure Appropriate Operations in the Corporate Group

1. To contribute to proper and effective management practices throughout the Group while respecting the independence of its subsidiaries to run their own operations, TISI will establish a Management Philosophy for the Group, Internal Control Rules for the Group and Management Rules for the Group. Subsidiaries, too, will be required to adhere to this philosophy and efforts will be made to create a unified environment for internal control in the Group as a whole.
   
   
2. TISI will send directors and employees, as necessary, to serve as directors and Audit & Supervisory Board members of subsidiaries in order to raise the level of governance on a groupwide basis and will monitor management practices at subsidiaries.
   
   
3. TISI will appoint a director responsible for internal control who coordinates internal control on a groupwide basis and will set up an internal control supervision department, put in place an internal control system that cuts across the Group and identify problem points. The Company will set up a Group Internal Control Committee, which will have the internal control supervision department as its secretariat, and this committee will evaluate and discuss important matters from an internal control perspective, such as compliance, risk management and information security, and report its conclusions to the Board of Directors.
   
   
4. The department responsible for internal audits at TISI will implement internal audits in each division of the Company and will also implement or coordinate audits at subsidiaries and monitor the status of internal control practices established by subsidiaries in line with the standard set by TISI and offer guidance, when necessary, to ensure that the internal control mechanism is functioning properly.

6. Matters Relating to Employees Assisting the Audit and Supervisory Committee in Its Duties

TISI will assign employees with the required abilities and knowledge to assist the Audit and Supervisory Committee in its duties.

7. Matters Relating to Independence from Directors (Excluding Directors Who are Audit and Supervisory Committee Members) of Employees Assisting the Audit and Supervisory Committee in Its Duties

1. To ensure the independence of employees who have been assigned to help the Audit and Supervisory Committee execute its duties, assigned employees shall not take instructions or orders from directors (excluding directors who are Audit and Supervisory Committee members) when executing said duties.
   
   
2. Transfers, personnel evaluations and disciplinary action affecting employees who have been assigned to assist the Audit and Supervisory Committee in the execution of its duties shall require approval from the Audit and Supervisory Committee.
   
   
3. Employees who have been assigned to assist the Audit and Supervisory Committee in the execution of its duties shall have the authority to engage in duties at the request of the Audit and Supervisory Committee as well as those incidental to the execution of audits, and shall have the authority to collect information necessary to their tasks.

8. System for Directors and Employees of the Corporate Group to Report to TISI's Audit and Supervisory Committee, and Other Systems for Reporting to the Company's Audit and Supervisory Committee

1. Directors and employees of the corporate group will provide reports to TISI's Audit and Supervisory Committee about management practices, operations, finances, compliance, risk management and the status of internal audits on a regular basis, mainly through the committee meeting structure that runs laterally through the Group, to facilitate information sharing and discussion on issues and solutions as well as to confirm business direction. In addition, directors and employees of the corporate group will inform TISI's Audit and Supervisory Committee immediately should facts be discovered that indicate a possibly serious violation of laws or internal rules or might lead to a material loss.
   
   
2. TISI shall not engage in negative treatment (put at a disadvantage) of a director or employee of the corporate group who has reported a concern to TISI's Audit and Supervisory Committee by reason of said report.
   
   
3. The compliance control department will report to TISI's Audit and Supervisory Committee on a regular basis regarding the operating status of the internal reporting system as well as important information and matters requiring consultation.
   
   
4. Directors and employees of the corporate group will provide explanations about matters pertaining to the execution of business whenever requested to do so by TISI's Audit and Supervisory Committee.

9. System for Ensuring that Other Audits by the Audit and Supervisory Committee are Effective

1. TISI's directors who are Audit and Supervisory Committee members (hereafter, "Audit and Supervisory Committee members") shall attend meetings of the Company's Board of Directors as well as those of the Executive Committee and other key councils and committees, and may express opinions at any of these meetings.
   
   
2. The representative director of TISI, the accounting auditor and departments responsible for internal audits will meet separately with the TISI's Audit and Supervisory members on a regular basis to exchange opinions.
   
   
3. TISI will appoint experts, such as lawyers and certified public accountants, as required by TISI's Audit and Supervisory Committee, and ensure opportunities to access advice related to auditing duties.