We believe that accelerating management decision-making and smoothly executing business initiatives, while ensuring transparency throughout the process and eliminating illegal activities through mutual checks and balances, are essential elements of corporate governance.

To earn the trust of shareholders, investors, and other stakeholders, we believe that a dual structure is both effective and efficient. This consists of:
● strategic and prompt decision-making and oversight by the Board of Directors, which is well-versed in the challenges faced by both the automotive parts manufacturing industry and our company, and
● supervision and auditing by external directors and external auditors.
For this reason, we consider the structure of a company with an Audit & Supervisory Board to be appropriate. Under this framework, we will continue to strengthen our corporate governance.

Our Board of Directors consists of five directors. In addition to regular monthly meetings, extraordinary meetings are held as needed to deliberate and make decisions on important business operations. The Board also supervises the execution of duties by the Representative Director and Executive Directors through reports on the status of their activities.
Audit & Supervisory Board Members attend Board meetings and provide opinions as necessary.
To strengthen the function of the Board of Directors and ensure oversight from anindependent standpoint, we have appointed two Outside Directors. These Outside Directors provide valuable suggestions and advice based on their independent perspective, extensive management experience, and broad knowledge and insight.

Number of meetings held in FY2023: 20

To enhance the fairness, transparency, objectivity, and accountability of the Board of Directors in matters related to director nominations and compensation, we have voluntarily established a Nomination and Remuneration Committee. The committee is convened as necessary.
The committee consists of four directors, including two Outside Directors, with the Chairperson and the majority of members being independent Outside Directors.
The committee discusses matters such as proposals regarding the appointment and dismissal of directors, the compensation system for directors, and performance evaluations.

To earn and maintain the trust of shareholders and investors, our company has adopted an Audit & Supervisory Board system. We believe that this system—combining swift and strategic decision-making and oversight by the Board of Directors, who are well-versed in both the automotive parts manufacturing industry and our company’s management challenges, with supervision and auditing by Outside Directors and Outside Audit & Supervisory Board Members—is both effective and efficient.

The Audit & Supervisory Board consists of three members: one full-time member and two part-time members, all of whom are Outside Audit & Supervisory Board Members.
Each of the three members qualifies as an independent officer as defined by the Tokyo Stock Exchange.
They do more than simply audit legal compliance; acting from an independent and objective standpoint, they actively and assertively exercise their authority, ensuring a structure that enables proper judgment and action.

Our company has entrusted its accounting audit operations to KPMG AZSA LLC. The Accounting Auditor maintains close coordination with the Audit & Supervisory Board, providing reports on audit plans and results, and conducting necessary information and opinion exchanges throughout the fiscal year. These efforts aim to ensure audits are carried out both efficiently and effectively

The Executive Officers’ Committee consists of nine executive officers, including those who concurrently serve as directors. The committee deliberates and makes decisions on specific management issues related to business execution.

The Management Meeting is convened as necessary and consists of directors (excluding outside directors) and the presidents of each subsidiary. The meeting receives reports on the business plans and operational status of both domestic and overseas subsidiaries, enabling top management to monitor and follow up on business execution.

Under the activity slogan “Challenge to the Future,” our company is promoting the 15th Medium-Term Management Plan.
This plan sets forth the key theme of “rebuilding a management foundation that ensures sustainable profitability.”
To achieve this goal, we have established a system that enables prompt and objective decision-making on management issues from various perspectives. Accordingly, we appoint directors and auditors with consideration for diversity, including gender and international experience.

To contribute to the enhancement of medium- to long-term corporate value, the Company evaluates the effectiveness of its Board of Directors by verifying the performance of governance, business progress, and other factors from the perspectives of both executive directors and outside directors. The results of the effectiveness evaluation of the Board of Directors for fiscal year 2023 are as follows.

(1) Overview
Based on the results of the aforementioned questionnaire, the effectiveness of our Board of Directors was generally assessed to be appropriately maintained. Compared to the previous year, improvements were confirmed in the overall total of the items listed in the above table.
However, some items still show room for improvement. We recognize that these issues require continued examination and improvement on a regular basis moving forward.

(2) Items Showing Improvement

(3) Items Needing Improvement

Based on these evaluation results, focused deliberations will be conducted on the extracted issues. Priority will be given to items needing improvement, with corres ponding measures formulated and implemented. Specifically, meetings will be held a mong Board members to deepen discussions on management issues from diverse internal and external perspectives. By gathering each director’s views and expertise, improvement plans will be devised and advanced through the PDCA cycle.

Our company will continue to work on enhancing the effectiveness of the Board of Directors to achieve sustainable growth and medium- to long-term enhancement of corporate value.

The compensation system for directors is designed to function effectively as an incentive to sustainably enhance corporate value, linking remuneration to shareholder interests. The basic policy is to determine the appropriate level of individual director compensation based on their respective responsibilities.

Compensation for executive directors consists of fixed remuneration—“base salary” and “stock-based compensation”—and variable remuneration—“performance-linked bonuses” and “performance-based stock compensation.” For outside directors, who serve supervisory functions, fixed remuneration consisting of “base salary” and “stock-based compensation” is provided.

Note 1: STBP refers to the Short-Term Business Plan

Additionally, as part of the performance-based stock compensation, we have introduced a "Stock Grant Trust (BBT※2)."
This system involves the acquisition of our company shares through a trust funded by monetary contributions made by the company. Shares are then granted to directors and others through this trust in accordance with the rules for stock-based compensation established by the company. Generally, the timing for directors and others to receive the shares is upon their retirement from the company.
※2 BBT = Board Benefit Trust

The TBK Group fundamentally commits to appropriate tax filing and payment. We strictly comply with the laws and regulations of each country where we operate, strive to eliminate any arbitrary tax avoidance, and work to optimize our tax burden by utilizing available tax incentives within the scope of legitimate business activities. We maintain transparent communication with domestic and international tax auth orities and endeavor to build mutual understanding and trust