Group 22Prabhuvardhan Reddy Pranay Karthik Prasoon Jain Prateek Ahuja

Introduction
Tokyo Electron Limited or TEL, is a supplier of semiconductor fabrication equipment and flat panel display (FPD) production equipment. It is headquartered in Akasaka, Minato-ku, Tokyo, Japan. As of 2009, TEL is the largest manufacturer of such equipment in Japan and the second largest in the world. The company was founded as Tokyo Electron Laboratories, Inc. in 1963.

Origins
On November 11, 1963, Tokyo Electron Laboratories Incorporated was founded by Tokuo Kubo and Toshio Kodaka, largely funded by the TBS or the Tokyo Broadcast System, with a capital of over five million yen. Later that year, their office opened in the TBS main building and began manufacturing thousands of quality-control and importing diffusion furnaces made by Thermco and selling Japanese-made car radios. In 1965, the company approached a rapidly growing business in the market, Farchild Semiconductor Corporation and agreed to serve as a sales agency for them, increasing their capital to twenty million yen and began exporting IC testers, IC sockets, IC connectors, and other similar computer components.

Ctd...
They opened a new office in San Francisco, California and their new branch, Pan Electron in 1968 establishing themselves as the only stocking distributor of imported electronic components in the region. One year later, they opened their still-functioning Yokohama office and established Teltron, a major manufacturer and distributor of car stereos, expanding their headquarters to fill the entire TBS-2 building and raising their capital to 100 million yen.

Group Of Companies
Tokyo Electron U.S. Holdings, Inc. Tokyo Electron America, Inc. TEL Venture Capital, Inc. TEL Technology Center, America, LLC. Tokyo Electron Massachusetts, LLC. Tokyo Electron Europe Limited Head Office (Crawley, England) Tokyo Electron Israel Limited Tokyo Electron Korea Limited Tokyo Electron Taiwan Limited Tokyo Electron (Shanghai) Limited Hermes-Epitek Corp Pte Limited

Corporate Governance
Against a backdrop of on-going business globalization, Tokyo Electron maintains a management philosophy that puts emphasis on maximizing corporate value and enhancing shareholder satisfaction Tokyo Electrons Governance Basic Principles of Corporate

Ensure the transparency and soundness of business operations Facilitate quick decision-making and the efficient execution of business operations Disclose information in a timely and suitable manner

Ctd
There are a number of features that stand out.
They use a statutory auditor system; however, the Nomination Committee and Compensation Committee are incorporated into the Board of Directors. These committees make proposals to the full Board, which considers them and makes a final decision. The representative directors (the chairman and the President & CEO) do not take part in either of these committees, since there is a risk that their participation might result in an unbalanced power structure in the committee and detract from fair decision-making processes.

Ctd
Also the benchmarks for both shareholder dividends and management bonuses on net income for the period have been based, and have linked employee bonuses to operating income. This way helps to ensure that the goals of management and the employees are closely aligned to the interests of shareholders. Thus, all three groups benefit to a similar degree from any increase in corporate value. These incentives also ensure that countries and the society in which we operate benefit from Tokyo Electrons success, via increased tax revenues

Framework
Tokyo Electron has also adopted the executive officer system to streamline the decision-making process. In addition, Tokyo Electron has been disclosing the individual remunerations of representative directors since 1999 in recognition of the importance of managerial transparency for shareholders

Board of Directors
The Board of Directors consists of 15 members, two of whom are outside directors. The term of office for directors is set at one year. During fiscal 2011, the Board of Directors met on 11 occasions.

Contd..
Furthermore, there are two committees whose activities are intended to improve corporate governance:
Compensation Committee and Nomination Committee.

Compensation Committee: This committee proposes the remuneration to

be paid to representative directors at the Board meeting for approval.

Nomination Committee: This committee nominates candidates for

directors to be selected at the annual shareholders meeting, and nominates a candidate for CEO to be selected by the Board, which it submits at the Board meeting for approval.

Each of these committees is composed of members of the Board of Directors, excluding the representative directors, or statutory auditors.

Board of Statutory Directors

Tokyo Electron has four statutory auditors, two of whom are outside auditors. The statutory auditors
Attend meetings of the Board of Directors, Also attend the Management Meeting and other important business meetings, Conduct operations audits and accounting audits, Evaluate risk management, Auditing the performance of duties by directors.

During fiscal 2011, the board of statutory auditors met six times.

Internal Control & Risk Management Systems

To strengthen the internal control and risk management systems of the TEL Group more effectively
Tokyo Electron has also appointed a Chief Internal Control Director and a Compliance & Internal Control Executive Officer.

Under them, Tokyo Electron has established the Risk Management & Internal Control Department,
Evaluates and analyzes risks that could affect the TEL Group Works to reduce risks by promoting the necessary measures.

In addition, the Global Audit Center, as an internal audit organization,

Oversees the internal auditing activities of the entire groups domestic and overseas bases, as well as their compliance and systems.

When necessary, the Global Audit Center also provides guidance to operating divisions.

Co-ordination
The statutory auditors coordinate with the department responsible for internal auditing activities primarily by attending the Global Audit Centers report meetings, which were held 13 times during fiscal 2011. The statutory auditors receive audit plans for the fiscal year from the independent auditors, as well as explanations regarding auditing methods and particular areas of focus, among other matters.

Compliance
Trust is the cornerstone of Tokyo Electrons business foundation. The fundamental requirements for maintaining trust are rigorous conformity to ethical standards and compliance with the law, by individual employees and by each of our organizations. In 1998, the Company formulated the Tokyo Electron Code of Ethics (revised in April 2011) to establish uniform standards to govern all of its global business activities. The Company operates an internal reporting system (Hotline) that employees may use to report their concerns.

Components