Procurement Initiatives

We engage in procurement activities with integrity in compliance with the laws
and regulations of each country and social norms based on our corporate ethics.

2. Priority on the Environment
We conduct procurement with full consideration for reduction of environmental
impact and protection of the global environment.

3. Fair Business Practices
We continuously seek high-value technologies and create broad opportunities
for their business transactions based on the precondition of open competition.

4. Partnership
We prioritize relationships of trust based on mutual understanding withsuppliers and conduct activities in the pursuit of mutual continuous growth.

5. Information Management

Communication with suppliers
The TEL Group not only uses electronic data interchange(EDI)*1 for procuring parts and materials online, but also
operates its own website to promote efficient two-way
communication with suppliers.
We share our business overview and policies through thesemiannual Production Update Briefing held by the Group’s
manufacturing companies and the annual TEL Partners Day as
well as daily communication.

The TEL Group is formulating disaster mitigation programs incooperation with our suppliers. In order to promptly identify
damage and take steps for recovery following a disaster, wehave built a database of suppliers’ production sites. We also
conduct an annual survey and use the results to carry out
activities aimed at reducing risks together with suppliers.

SOCIETY

We properly manage the confidential information of suppliers that we obtain in
the course of business.

Business Continuity Plan (BCP)

Initiatives for procurement BCP

Post-disastermeasures

Investigate damage &evaluate impact(Procurement BER*3)
Support recovery efforts &take procurement measures(Procurement BDR*4)

Pre-disastermeasuresEstablish BCP systemwith suppliers

Build relationship with suppliers based on
mutual trust and respect

Speed & accuracy

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Minimize risks

Procurement Policy

The TEL Group calls for the cooperation of its suppliers withregard to compliance with labor-related laws, including those on
child labor and forced labor. Specifically, this means we expect
our suppliers to respect fundamental human rights, protect
intellectual property rights, comply with import/export-related
laws and regulations, prohibit the involvement with antisocial
forces and take measures in regard to conflict minerals*2. With
regard to specific requests, such as requests to respond tochemical substance regulations, we hold briefing sessions for
suppliers so that we can work together with them.
Meanwhile, in order to reduce environmental impacts andlogistics costs, we cooperate with our suppliers to conduct
joint operations for highly efficient pick-up and delivery at twolocations, namely, Tohoku and Kyushu.

Procurement BCP scheme

The high-value manufacturing that the TEL Group strives foris based on the functions of all materials and components thatmake up the products and the pursuit of high quality.
We value communications with suppliers and seek to growmanufacturing on a global scale with our suppliers based on
ongoing trusting relationships.

Working together with suppliers

Procurement BCP

Our approach to procurement

TEL Partners Day
held in fiscal 2013

Glossary

data interchange (EDI): A framework to facilitate the electronic exchange of information related to commercial transactions among corporations in*1 aElectronic
unified standard format
minerals: Four minerals (tantalum, tin, gold and tungsten) mined or traded in the Democratic Republic of the Congo or its neighboring countries that
*2 Conflict
form a source of funds for armed groups, and give rise to violations of human rights or labor problems.
BER: Business Emergency Response. First response taken immediately after a disaster*43 BDR:* Business Disaster Recovery. Recovery effort that is made according to the results of the damage investigation
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