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TBM ACTION

LIMEX

COMPANY

Corporate Governance

1. Corporate Governance Approach

TBM aims to create businesses where all parties including the company, stakeholders, and shareholders share the same goal. We aim to sustainably develop by establishing a transparent operation and management. Furthermore, we strive to build a flexible corporate mechanism in order to be adaptable to the ever-changing business environment.

2. Corporate Governance Structure (as of January 26, 2017)

General Meeting of Shareholders

3. General meeting of shareholders

The Board of Directors is composed of seven directors including three outside directors. The rule of the Board is to hold monthly meetings. Decisions are made on basic management policy, medium-term management plans, fiscal year budget, important matters including concerns of sales, office, contract, organization, personnel, employment, and property. To perform audits and in order to improve transparency, an auditor is required to attend the Board of Directors meeting.

In principle of the statutes of the company, the number of directors is set below 8, and their term is fixed at 2 years after appointed.

4. Board of Corporate Auditors/Auditor

The Board of Corporate Auditors consists of three members: one full-time outside director and two part-time outside directors (as of January 26, 2017). In principle, the Board of Corporate Auditors meetings are held once a month, supplemented on an ad-hoc basis as necessary.

According to the auditing rules, when execution of duties by Director violates or is suspected to violate laws or the Articles of Incorporation, a report will be made at the Board of Directors meeting. In addition, necessary measurements such as hearing of the current status of work, review of minutes of important committees, approval documents, and other important documents, and investigation of accounting books and documents will be conducted at the headquarter and branch offices.

In accordance with the Articles of Incorporation, the Corporate Auditors shall have a maximum of four members and the four-year term of office. The appointment shall be made at a general meeting of shareholders by a majority of the voting rights of the shareholders who attended, whose voting rights collectively account for at least one-third of the total amount of voting rights of the shareholders.

5. Accounting Auditor

The accounting auditor audits the head office and the plant twice a year under the Financial Instruments and Exchange Act. In addition, the accounting auditor will be appointed at the general shareholders' meeting and the term of office shall be one year.

Internal Control

We are developing and operating our internal control system by establishing provisions such as compliance, risk management, and authority for job function.

Compliance

1. Compliance Approach

Activities for compliance are important items of the basic management policy. We encourage all officers and employees to comply with laws, ordinances, regulations, etc. and act based on high ethical standards and strive to faithfully and fairly carry out management and operations.

2. Compliance Committee

A meeting is held once a month and is made sure that no one has done anything that is legally against our rules. When a compliance violation or the like is confirmed, it is reported to the representative director, and matters that are deemed to have a serious effect on management are reported to the directors.

3. Internal reporting system

We have established and managed an in-house reporting system called "Compliance Consultation Desk" that directs officials and employees who are in violation of laws and regulations, or who are in doubt of the suspicion, can directly provide such information.

4. Training

For executives and employees, we will conduct training to raise interest in compliance and give correct knowledge.

Risk management

1. Risk Management Approach

Based on the "Basic Policy of Internal Control", we will establish and maintain a management system concerning the prevention of risks that may occur at our company.

2. Procedure

External and internal factors that impede the company's business plans and business operations listed below are taken as risks and evaluated according to the following procedures.

  • Risk Identification
    We recognize, define, and identify the risks that may hinder our business plans and business operations. The identified risks are labelled based on the business process where they occur.
  • Risk Classification
    We classify the risks based on its level (corporate-level or operational process level) and past exposure (the company has experienced it or not)
  • Risk Analysis
    We analyse the probability and the magnitude of the potential impact of the recognized/classified risks.
  • Risk Evaluation
    We evaluate the materiality of the risks and necessity for countermeasures.
  • Risk Response
    We select appropriate measures such as risk avoidance, mitigation, transfer, or acceptance based on the evaluation.

3. Risk Response

The CEO directs the risk management system for the daily operation, supervised by the board of directors and supported by the head of the Administration Department.
The board of directors, as an institution under the Corporate Law, reflects the risk evaluations accurately in management decisions and directs business operations properly.
It also formulates a system to prepare for the risks and respond to them immediately and properly when materialized (Risk Response System), and the system is reviewed and updated as necessary.
When the risks are materialized, the prescribed department and the person in charge are promptly and accurately notified in accordance with the Risk Response System. In response to the notice, the CEO activates the Risk Response System. In the case where the CEO is not available to instruct it immediately, the head of Administration Department orders it on behalf of the CEO.