REPORT 2023
TPR Integrated Report 2023

TPR Co., Ltd.

TPR’s Mindset

Founded on Technology,
Passion, and Reliance,
Create Tomorrow’s World

Superior technologies in powertrains, diversified products, and advanced materials. Each
employee’s passion and the relationships of trust cultivated with numerous customers in diverse
fields. Plus the network of TPR Group companies operating in six regions across the globe.
Making the best use of this foundation and integrating its comprehensive capabilities, the
TPR Group is pursuing further technological innovation, provision of high-value products, andcultivation of new fields to create tomorrow’s world.
TPR is deploying its superior technological capabilities to respond to innovations
in engines and new fuels. We are also engaged in multifaceted R&D and new
business development. By further enhancing and combining the technologies
we have cultivated, we will respond to various needs and nurture seeds in themarket by offering products with superior environmental performance.

All of us at TPR are pursuing excellence in production, engineering,development, sales, or administration with vigor and enthusiasm, embracing
new challenges. The global network we have built with our customers in regions
worldwide is the fruit of TPR’s passion.

The trust of our customers around the world in TPR’s commitment to monozukuri
and quality is an irreplaceable asset that we have earned over a long period oftime as attested by our proven track record. With that trust as our lodestar, we will
strive to meet our customers’ expectations and further deepen their trust as anenterprise with the flexibility and agility to win in the global market.

Table of Contents
01
02
03
07
09
10
15
01

TPR’s Mindset
Corporate Philosophy
Message from theManagement
TPR’s History
TPR at a Glance
TPR’s Three Strengths
Value Creation Process

17

Business Strategy
Powertrain Business
Diversification Business and New
Business
Faltec23

Sustainability

27
29
30

Risk Management

31

Environmental Initiatives

Information
Financial Highlights

TPR’s Sustainability Management

25

Social Initiatives
Corporate GovernanceCompliance32Company Data / Stock
Information

Corporate Philosophy

Realizing a Clean andHigh-quality Global Society

Corporate
Philosophy

With our origins in sophisticated powertrains, we shall try to achieve
unlimited potential, and contribute to realizing a clean and high-quality
global society by offering unmatched technologies and products withsuperior value.

We will create and meet expectations to win the highest trust of ourManagement
Attitudecustomers.
We will expand and deepen our technologies to offer world-leading
products.
We will develop and learn from people, and realize a meaningful andrewarding workplace together with our employees.

Guiding
Principles

With passion, we see things through to the end.
Challenge with passion. Pursue with passion.
Create with passion. Discuss with passion.

Editorial Policy
This integrated report is a communication tool designed to provide shareholders, investors, business partners, local communities,
employees, and other stakeholders with easy-to-understand information on TPR’s management policies, business strategies, and financial
information, as well as on TPR’s various activities, including CSR activities aimed at realizing a sustainable society, to help them understandour corporate value, growth potential, and business continuity.
Period Covered
Fiscal 2022 (from April 1, 2022 to March 31, 2023), in principle. (This report also introduces activities outside the period covered.)Scope
TPR Co., Ltd. and its consolidated subsidiaries (The content also covers other TPR Group companies in Japan to some extent.)
Disclaimer
The information on the Company’s current plans and strategies contained in this report is based on the information currently available to
the Company. Therefore, actual results may differ significantly from the forecasts owing to various risks, uncertainties, and other factors.

02

Message from the Management

Hiroshi Suehiro

Kazumi Yano

Representative Director, Chairman & CEO

Representative Director, President & COO

Two-wheeled Management to
Seize Growth Opportunities andContribute to a Sustainable Society
The TPR Group is promoting two-wheeled management, with the powertrain business as one
wheel and the diversification business and new business as the other wheel, in order to achieve
continuous growth toward 2040, the centenary of the Company’s foundation. Inheriting theaspiration to offer value to society that has animated the Company ever since its inception andleveraging our technological capabilities as well as the production and distribution system, we
will endeavor to write the next chapter in the inspiring story of TPR’s progress.
03

Social Value Provided by TPR andValues TPR Has Inherited sinceIts Foundation
TPR’s Corporate Philosophy, Management Attitude,
and Guiding Principles were established in 1991
through internal discussions, taking the opportunityof the 50th anniversary of the Company’s foundation.
Although established more than 30 years ago,
they include environmental and social themes that
anticipate the trend of ESG/SDGs management.
Our founder Gentaro Tanaka started out as asupplier of engine oil for aircraft. Prompted by his
recognition that piston rings and cylinder liners have adecisive influence on engine performance, he launcheda business that eventually became today’s TPR. The
manufacture and supply of these products remains at
the heart of TPR’s business. We have long been awarethat it is our mission to contribute to environmental
conservation and energy saving through the
manufacture of products that improve engine thermal
efficiency while reducing engine weight. The wording“realizing a clean and high-quality global society” in the
Corporate Philosophy articulates this awareness. In the
conduct of business, TPR’s mission, which prioritizes
benefiting the environment and society, remains as
fresh and inspiring as ever.
The Management Attitude expresses ourdetermination to meet stakeholders’ expectations,build relationships of trust, and share prosperity
through the provision of value by developing people
and learning from them.
TPR has supported the growth of the automotive
industry globally and developed hand in hand with
the industry. Our deep engagement in manufacturingreflects our strong commitment and sense of
responsibility. We seek to ensure not only the safetyand durability required of critical parts but also highquality and stable supply. Furthermore, as a partner of
automobile manufacturers, we are involved in engine
development from the initial phase and have refined
our technological and proposal capabilities to satisfy
the requirements of our partners in the automotive
industry. We take pride in this deep engagement,
which has fueled TPR’s continued development over
the years.
The automotive industry is undergoing a
multifaceted transformation centering on the shift toEVs. TPR’s core business of powertrains involves the
manufacture of piston rings, cylinder liners, and otherparts for internal combustion engines. We have gained
a high market share for these products, but the market
is expected to shrink in the future owing to the mass
adoption of EVs.
It is in this context that we are leveraging our
prowess in technological development, mass
production, and distribution systems, long cultivatedin the powertrain business, and, looking beyond

engines, we will apply those capabilities to develop
the diversification business and new business. We
intend to provide social value through sophisticatedpowertrains, a keyword in the Corporate Philosophy.
Toward 2040, when TPR will celebrate its centenary,
we will promote a growth strategy based on twowheeled management of the powertrain business andthe diversification business and new business to makea great leap forward. We have grown through businessdevelopment in the engine area over the years. In
order to continue to exist as a company that is neededby society, it is necessary for us to promote a change
in the mindset of its people and take on the challengeof new areas, swiftly implementing initiatives.

Two-wheeled Management
Targeting Continuous Growth—
Prospects and Issues
Although the shift to EVs is underway, demandassociated with the internal combustion engine isstill booming, with production at an all-time high.
By pursuing two-wheeled management, we aredetermined to capture this high demand. Whilemaintaining the powertrain business as the earnings
base, we will invest the profit from the powertrain
business in the growth of the diversification businessand new business, thus achieving medium- to longterm expansion.
In the powertrain business, we have secured a solid
customer base, centering on Japanese automakers,
and, by virtue of our quality and technologicalcapabilities and stable mass production and supply
systems, we have earned a high level of trust as asupplier. TPR has expanded its production and sales
network, including joint ventures, to encompass six
regions across the globe (Japan, China, Asia, North
America, South America, and Europe). In particular,
TPR maintains the top share of the global market forcylinder liners.
Meanwhile, regarding business development in the
non-engine area, TPR invested in Faltec Co., Ltd.,
which is engaged in the manufacture and sales ofautomotive exterior resin parts, making it a subsidiaryin 2012. In recent years, TPR has been executing
projects in the diversification business and new
business, ranging from EVs applications and rubber
and resin parts to surface treatment, and materials
development, including that of carbon nanotubes.
Since, in the powertrain business, growth in global
demand for parts is expected to continue until circa
2025, TPR envisages maintaining the associatedupward trend in sales and profit. However, in themedium to long term, the shift to EVs will accelerate,
underpinned by governmental policy in Europe, theU.S. and China, and we project shrinking demandfor powertrain parts in line with this trend. Based onthese assumptions, TPR will promote two-wheeled04Message from the Management

engine parts, mainly piston rings and cylinder liners. In
order to apply the expertise we cultivated in the engine
area to diverse non-engine areas, that is, by shiftingfrom vertical deployment to horizontal deployment, it
is essential that we embrace change. Going forward,
we need to secure and train human resources capableof working effectively in the diversification businessand new business. In addition, we must cultivate a
corporate culture predisposed to taking on challenges
leading to creation of new business, and moreover,efficiently allocate management resources, not least by
shifting human resources from existing fields to growthfields.

management and endeavor to increase net sales
and profit in the runup to TPR’s centenary. For thediversification business and new business, our target isnet sales of 50.0 billion yen and operating profit of 5.0
billion yen in aggregate.
In the powertrain business, setting “develop
environmentally conscious products and maximize
profits” as our theme toward 2040, we will promote
the development of products that contribute to engine
thermal efficiency of 50% or higher and products
for next-generation engines ready for new fuels thatwill help reduce CO2 emissions. At the same time,
utilizing our global network of sites across six regions,
we will establish the optimal production and supply
system that is responsive to risks and geared to further
cost reduction through regional diversification, andmoreover, we will endeavor to improve production
efficiency and achieve rationalization of our motherfactories in Japan, thus maximizing profit.
In the diversification business and new business, we
intend to achieve early commercialization and businessexpansion by leveraging our strengths in technologies
related to sliding, sealing, heat control, and surface
treatment for smooth movement, which we havecultivated in the powertrain business, as well as inquality control know-how for high-mix, high-volume
production. In particular, the transition from metalparts to ones made of rubber and resin and the useof nanomaterials (carbon nanotubes and nanoporous
materials) for thermoelectric power generation andfuel cells are priority investment targets. Regarding the
supply of parts for EVs, TPR ARN (Anhui) New Energy
R&D Co., Ltd. (TANE), a new joint-venture R&D centerestablished with a local partner in the Chinese market,
where the shift to EVs is occurring ahead of othermarkets, will spearhead development of technologies
and products.
There is no doubt that the medium-to longterm expansion of the EVs market is a huge growth
opportunity for TPR. However, we have beenenhancing our value proposition by exploring every
avenue to maximize value in the manufacturing of
05

Progress of the Mid-termManagement Plan and Key Points
in the Final YearWe are currently implementing a four-year Mid-termManagement Plan whose final year is fiscal 2023.
Under this plan, financial goals on a consolidated basis
for fiscal 2023, a milestone on the path to 2040, arenet sales of 180.0 billion yen, ordinary profit of 21.0
billion yen (ordinary profit margin of 11.6%), ROE of
10% or more, and an equity ratio of 45% or more aswell as stable shareholder returns.
Qualitatively, we have positioned “secure acommanding position in powertrain products,” “speed
up our active development of new business,”“thoroughly maintain safety, environmental, anddisaster prevention standards,” and “create a
motivating work environment” as four pillars.
Pursuing a growth strategy based on two-wheeledmanagement, we have achieved progress with respect
to each of these pillars.
However, in regard to financial goals, progress interms of profit is not in accordance with the plan owing
to the COVID-19 pandemic and sharp increases in raw
material and energy prices triggered by the RussoUkraine conflict, which were not anticipated when theplan was formulated. To compensate for the shortfall,
we will strive for further production rationalization in
fiscal 2023.
In the final year of the plan, in the powertrain
business, in parallel with the implementation of
measures to cope with rising costs, we will review
global business development with an eye to the future.
In doing so, we would like to identify promising regions
on which we should focus in pursuit of future growth,and establish a framework geared to the next round ofgrowth.
In the diversification business and new business,
we will verify and judge the feasibility and growthpotential of the new business and new product themes
on which we have been working and then promote
initiatives. Since investments in the diversification
business and new business are geared to returns
over the longer term, it is difficult to evaluate thesebusinesses based solely on progress to date. We
intend to gather detailed information on trends inadvanced technologies and market needs, and thenuse the information as the basis for verification andjudgment. It is in these circumstances that our new
R&D center (TANE) in China, a country that playsa pivotal role in the EVs market, is participating indevelopment projects. Indeed, related to the outcomesof this R&D, we have received several orders for mass
production. In the carbon nanotube business, weare making progress in commercialization, including
application proposals. These initiatives are scheduled
to take off within fiscal 2023.
In fiscal 2023, we will formulate our next Mid-termManagement Plan, which will be the next milestone
on the path to TPR’s centenary. Under the current
plan, we have been greatly affected by the COVID-19
pandemic and the Russo-Ukraine conflict, neitherof which had been anticipated when the plan wasformulated. In the current era typified by lack of clarityand deepening uncertainty, it is difficult to anticipate
the medium-term outlook and formulate a realistic
plan. However, formulation of a plan on a medium-termtime axis is effective for organizing growth strategies
linked to a vision of the future, and, in particular, forsharing the orientation of management resource
allocation necessary for two-wheeled management.
We believe it is meaningful to implement a mid-term
management plan while continually reviewing it in lightof the changing environment.

endorsement of the recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD)
and are endeavoring to disclose information based onthese recommendations.
We intend to provide stable and sustainable
shareholder returns for investors and shareholders.
While maintaining a total payout ratio of 30%,
comprising dividends and flexible share buybacks, wewill also endeavor to increase shareholder value overthe medium to long term.
Moreover, we hold townhall meetings (dialogue
meetings between employees and management) toenhance engagement of employees and encouragethem to demonstrate their full potential, while
promoting understanding of two-wheeled management
and awareness of sustainability throughout TPR. The
townhall meetings are functioning effectively, serving
as a forum where management and employees shareideas and management can hear the authentic voicesof front-line employees. The results of employee
engagement surveys, which we conduct alongside themeetings, show a trend toward improvement.

Value Inherent in TPR Recognized
by All Stakeholders
The continued existence of a company is predicatedon the continued support of numerous stakeholders
and the company develops together with them bysharing the achievements of its business with them.
From this perspective, it is only natural for us at TPR
to position our contribution to sustainability throughESG/SDGs management at the heart of our corporate
activities. As mentioned at the outset, TPR’s Corporate
Philosophy and related principles encompass
environmental and social themes linked to ESG/
SDGs management, and express TPR’s approach tosustainability. We recognize the need to promote ESG/
SDGs management in line with the changing times
and to communicate this corporate posture to ourstakeholders with a high degree of transparency.
TPR contributes to environmental conservation
through its business activities, such as by creatingproducts that improve engine thermal efficiency andreduce weight, and by responding to the shift to EVs.
Having set ourselves the goal of achieving carbon
neutrality by 2045, we are introducing solar power
generation, purchasing renewable energy, and reducing
electricity consumption in production processes toachieve this goal. In May 2022, we announced ourIn addition to these efforts to strengthen internal
communication, we are also striving to revitalize TPR
as a whole through initiatives related to human capital,such as by enhancing the education and training
system and soliciting ideas from our employeeson the development of the diversification businessand new business. We are convinced that TPR’s
human capital management should seek to maximize
employee happiness through manufacturing by“people” so that we can offer society value suffusedwith happiness and thus achieve continuous growth.
We will maintain the tempo of our efforts so that all
our stakeholders recognize the value inherent in TPR.
In all our endeavors, we will greatly appreciate yourcontinued support.

06

TPR’s History

TPR has been striving to contribute to
the realization of a clean and high-quality
global society by offering unmatchedtechnologies and products with superiorvalue.
1939
TPR’s turning
point

Socialbackground

Milestones in
Japan

1940

1950

Founded From wartime demand to
civilian industry

1960

Business expansion during the highgrowth period

1970
Improvement of efficiency
and technology during
the low-growth period

High-growth period led
by domestic demand

Rising wartime demand

Nixon shock

Postwar economic
reconstruction period
1939
1940
Tanaka Piston Nagano Factory
Ring Co., Ltd. establishedestablished

Energy crisis

1945
Switched tocivilian demand

1961
Listed on the Second
Section of the Tokyo
Stock Exchange

1970
Teipi Industry Co., Ltd.
(current TPR Industry
Co., Ltd.) established

Milestones
outside Japan

History of Technological Development and Value Provided
Rings

Liners

Chrome-plated pistonrings for aircraft highly
evaluated

Entered theautomotive fieldwith piston rings

Started production of rings forheavy-duty diesel engines
Superior durability and economy

Developed porous chrome plated liner
Used in all types of internal combustion
engines, contributing greatly to improved
engine performance

Sintering

Diversification

Net Sales

1961

07

1965

1970

1975

1980

75

Founded in 1939, the TPR Group has established a global production and sales network covering six regions
across the globe and achieved sustainable growth based on the Corporate Philosophy: “With our origins insophisticated powertrains, we shall try to achieve unlimited potential, and contribute to realizing a clean andhigh-quality global society by offering unmatched technologies and products with superior value.”
Leading the way in technological development, we provide unique powertrain products with superior value,
including piston rings, cylinder liners, and sintered products at low cost, and have been contributing to the“manufacture of environmentally friendly engines” that are lightweight, fuel efficient and offer improved seizure
resistance. Moreover, we have promoted diversification of our business. We now offer automotive exterior parts,
resins, and rubber parts, which have received high praise from customers worldwide.
The automotive industry is in an era of great change. The business environment is changing significantly,
in view of the impact of the COVID-19 pandemic on the economy and society as well as the emergence ofenvironmental and energy challenges on a global scale. In addition, demands on companies are becoming
increasingly diverse.
To prosper in such a challenging business environment, we are accelerating cultivation of new fields andcreation of new business, applying our core technologies. Leveraging our superior technological capabilities,
global monozukuri strengths, and a broad network with our customers, we are making a Group-wide effort tocontribute to realization of continuous growth and a sustainable society.

1980

1990

2000

Strengthening of thestructure and global
business development

Diversification and strengthening of
response to environmental requirements

Plaza Accord andyen appreciation

Economic bubble burst

Japan-U.S. trade
friction intensified

Stricter emission regulations,
Kyoto Protocol

1976
Gifu Factory
established1989
50th anniversary

2010

Growing need for low
fuel consumption

Emphasis on theenvironment, intensifying
competition to improve fuelefficiency

Bankruptcy ofLehman Brothers

Promotion of
two-wheeledmanagement
Growing
momentum for
decarbonization

2022
2011
Company name changed to TPR Transitioned to thePrime Market
2012
Faltec became a subsidiary

1999
2004
Technology Center
Listed on theFirst Section of establishedthe Tokyo Stock
Exchange
2005
Startedbusiness inThailand

1990
1996
StartedStarted businessbusiness in in China
the U.S.
1997
1991
Started businessStartedin Indiabusiness in
Europe2000
Started businessin Indonesia

Developed wear- andseizure-resistant rings
Providing products thatmeet the needs of theautomotive industry

Developed ion nitride oil ringContributing to engine weight
reduction and environmental
friendliness

Developed 1.5 mm-width oil ringand innovative ring using DLC
Contributing to further weight reduction
and improved seizure resistance

Promoted improvement ofcylinder liner technology
High seizure resistanceand wear resistancerealized

Developed cast-in
liners2003
Started businessin South Korea
Started businessin Turkey

2020

2014
Started business in
Brazil2022
TPR ARN (Anhui) New
Energy R&D Co., Ltd.
(TANE) established2006
Startedbusiness inVietnamAdvances in DLC processing technology
Established PCF03 thick film processing
technology
Greatly contributing to satisfaction of low-friction needs

Developed AsLock cast-in liners
Significant contribution to weight reduction,
fuel efficiency, and durability improvement,
resulting in an overwhelming market share(Millions of yen)

200,000

Promoted developmentof sintered valve seats
Improved wear resistance

Developed sinteredvalve seats

150,000

Strengthened automatic
temperature control valve businessElectrical parts, exterior parts
Responding to various needs

Developed infrared equipment
Contributing to satisfaction ofvarious industrial needs

100,000

50,000

1980

1985

1990

1995

2000

2005

2010

2015

2020 2022

008

TPR at a Glance
Consolidated Results (fiscal 2022)

Japan

Faltec GroupNet sales

178.6

billion yen

Ordinary profit

10.2

Composition of Net
Sales by Segment
billion yen
Other regions

Asia

Profit attributable to owners of parent

3.8

North America

billion yen

Net assets

165.9

Equity-to-asset ratio

billion yen

ROE

50.5 2.9%%

TPR’s Businesses
Powertrain BusinessWe offer parts (piston rings, cylinder liners, sinteredproducts, seal rings, etc.) that support engines andtransmissions used in automobiles, transportation
machinery, industrial machinery, and power generationequipment. We also offer proposals based on
advanced development and evaluation technologies.

Diversification BusinessCentering on material compounding technology,
mold design, and product processing technology,
we provide diverse products to customers in thepneumatic machinery, automotive, and housing
industries.

New BusinessWe are cultivating new fields and creating new
business by applying our core technologies,
including the development of new business basedon ideas developed from insights into the future andapplication of cutting-edge new materials.

Faltec Group Products
We provide automotive exterior parts, OEM parts,
and automotive-related equipment globally, pursuinghigh quality and functional beauty by leveraging ourtechnological capabilities in resin molding, surface
treatment, and other areas.

09

TPR’s Three Strengths
Ever since its founding in 1939, the TPR Group has been pursuing unlimited potential andoffering products with superior value to the world. We have cultivated strengths includingcore technologies, a broad network with our customers, and global monozukuri strengths. Byleveraging and further evolving these strengths, we will continue to provide high-value-added
products globally.

1

Core technologies
Powertrains: evaluation, measurement,
and analysis technologies
Evaluation of internal combustion engines,
evaluation of motors

Various material sliding seal technologies
Castings, steel materials, sintered metals,
engineering plastics, rubber

Nanostructured materials technologies
Carbon nanotubes, nanoporous materials

TPR’s

2

three

Automotive manufacturers in Japan andoverseas3

Two-wheeled vehicle and generalpurpose equipment manufacturers

Global six-region structure

Broad customer base

Agricultural machinery and outboard
motor manufacturers
Construction machinery and equipment
manufacturers
Housing equipment manufacturers

strengths

Global network

Global partners
Academic connections

Emerging EVs manufacturers

10Strength1Coretechnologies

Leveraging our superior technological capabilities cultivatedfor internal combustion engines, we contribute not only to thesophistication of environmentally friendly powertrains but also to
the creation of products in the diversification business and new
business fields through proposals that meet customer needs.

Powertrains
evaluation, measurement, andanalysis technologies
Our engine evaluation, measurement, and analysis technologies
have evolved along with the development of internal combustion
engine and automotive technologies over the years. Based on
the evaluation results so far, we are promoting the transition to
analytical simulation technology as DX technology to contributeto global environmental protection and CO2 emissions reduction.

Engine evaluation

Oil film visualization andanalysisOil ring CFD analysis

Various material sliding seal technologies

Piston rings

Fig. AsLock® liner outercircumference (AL13)

AsLock®

Centering on piston rings, which are critical functional parts of an engine block,we possess various surface treatment technologies corresponding to the sliding
environment of internal combustion engines. By applying chromium nitride (CrN) anddiamond-like carbon (DLC) using the physical vapor deposition (PVD) method, which
is a dry coating method, in recent years, high durability and low fuel consumption
have been achieved. Cylinder liners are also critical functional parts of an engine block.
AsLock® liners with bundled protrusions on theouter circumference achieved by the centrifugal
casting method are used by customers aroundthe world.
We also offer sealing parts made of polymer
materials for applications other than internal
combustion engines, such as seal rings madeof engineering plastic materials for sliding
environments in high-temperature oil and O-rings
Rubber sealing partsfor pneumatic seals made of rubber materials.

Nanostructured materials
technologies
Carbon nanotubes manufactured by TPR are longand have thin layers.
We are also developing technologies forvarious applications, including bioelectrodes,
power generation elements, and electromagnetic
shielding for use in various products.

CNT

Dispersant

CNT composite rubber

Substrate appearance
CNT non-woven fabric

SEM image

CNT film

Drawable CNT

CNT yarn

11

Strength2

Broad customer
base

Customers

Capitalizing on superior technological capabilities to offer
unique products with superior value at low cost and global
monozukuri strengths, we have earned a high reputation from
customers around the world.

Value offered by TPR

Automotive
manufacturers
Emerging EVs
manufacturers
Two-wheeledvehiclemanufacturers
Construction
machinery
manufacturers
Agricultural
machinery
manufacturers
Outboard motor
manufacturers
General-purpose
equipment
manufacturers

Contribution to improved thermal efficiency,
high durability, and low fuel consumption
through various materials and surface treatment
technologies
Improved development efficiency (reductionof development time and significant reductionof fuel consumption during testing) by utilizing
computer aided engineering (CAE)
Provision of high-quality products at low cost
Provision of socially and environmentallyconscious products, cleaner exhaust gas
Contribution to design through forming anddecorating technologies

Equipment
manufacturers
Automotive
manufacturers
Emerging EVs
manufacturers

High durability for peace of mind
Provision of products that support industry atsites around the world

Housing equipment
manufacturers

Design conveying traditional beauty
Thermal insulation for comfort and functionality
Contribution to people’s lifestyles in various
scenes (offering of value)

12

Strength3

We began overseas business development in the 1990s, built a
global production and sales network spanning six regions acrossthe globe, and have achieved continuous growth.

Global network

Europe3

U.K.

companies

China(373 employees)

8South Korea

companies

Germany(1,717 employees)
China
TurkeyIndia
Vietnam

Asia

Thailand6companies(1,697 employees)

Overseas joint-venture
partners

Anhui ARN Group Co., Ltd. (China)

Tenneco, Inc. (U.S.)
Nanjing Navigation and Navigation Mark
Equipment General Factory (China)

13

Indonesia

Yoosung EnterpriseCo., Ltd. (South Korea)
Manoyontchai Co., Ltd. (Thailand)

North America

5companies(339 employees)

Japan

15

North America

companies(2,759 employees)

South America

1company(50 employees)

BrazilNote: Number of companies and number of employees are those for consolidated subsidiaries.

T O P I C SStarted Mass Production of New Products for
New Energy Vehicles (NEVs) in China

TPR ARN (Anhui) New Energy R&D Co., Ltd. (TANE) established in March 2022
as a joint venture with a Chinese partner has received several orders from
Chinese enterprises and European and U.S. companies for mass production
and development of new products for EVs (battery-related parts, differential
gearbox parts, motor peripheral parts, etc.).

14

Value Creation Process
Leveraging its superior technological capabilities, global monozukuri strengths, and a broad
network with our customers, the TPR Group strives to contribute to realization of continuous growth
and a sustainable society based on the Corporate Philosophy: “With our origins in sophisticatedpowertrains, we shall try to achieve unlimited potential, and contribute to realizing a clean and highquality global society by offering unmatched technologies and products with superior value.”

Corporate Philosophy / Medium-to Long-term Vision

Social Issues
Response to environmental
issues and climate change

Input
Manufactured capital

about safety and security

Production sites in Japan andoverseas
High-efficiency facilities

Stricter governance andcomplianceIntellectual capital

Enhancement of awarenessCore technologies
Number of patent applications
filed

Business Issues
Shift to EVs

Business Model
R&D

Powertrain
business
Piston rings
Cylinder liners
Sintered parts

Human capital
Diverse human resourcesHigh level of expertise

Soaring commodity prices
Geopolitical risksSocial capitalHigh trust from customers

Materiality

Financial capital
Stable financial baseP.24 See p. 24 Sustainability.

Core
technologies

Natural capital
Efficient use of various types ofcapitalCorporate governanceRisk management
Quality and safety

15

Value Offered to
Stakeholders and Society
Environment
Reduction of CO2 emissions
Development of environmentallyfriendly products

Procurement

Production /Quality control

Order-taking /Sales

Diversification / New
businessTwo-wheeledmanagement

Rubber and resin
products
Faltec products(exterior / electrical parts)
Nanomaterials

Shareholders and investors
Enhancement of shareholder value
over the medium to long term
Stable and sustainable shareholder returns

Customers
Provision of high-quality products andservices

Employees
Comfortable workplace culture
Diverse human resources
demonstrating their capabilities

Suppliers
Sustainable, fair, and equitabletransactions

Local communities
Contribution to local communities
Contribution to education, culture,
sports, and welfare

TPR’s strengths

Outcome / Economic Value
Broadcustomer baseGlobal network

Net sales

178.6 billion yen

Ordinary profit

10.2 billion yen

ROE

Compliance
Payout ratio

2.9%
34%
(3-year average)

Response to environmental issues
Human capital management

16

Business Strategy

Powertrain BusinessWe offer parts essential for engines and transmissions usedin automobiles and other forms of transportation machinery,industrial machinery, and power generation equipment.

Piston rings

Cylinder liners

Valve seats

Valve guides

Seal rings

Carbon scraper rings

Line of Business
The main products of TPR’s powertrain business include piston rings, cylinder liners, valve seats, valve guides, andother critical parts for automotive engines, as well as various sealing parts and other parts widely used in transportation
machinery, industrial machinery, and power generation equipment.
Capitalizing on advanced evaluation, measurement, and analysis capabilities, as well as various technological expertise
cultivated over many years, we make design proposals corresponding to customers’ development phases, thereby
contributing to the realization of engines whose higher performance and lower fuel consumption are environmentally
beneficial.

Strengths

Threats andOpportunities

Product superiority in terms of environmental performance (unique product,high market share)
Development and evaluation technology capabilities (simulation technology,etc.) cultivated over the years
Involved in design from the development phase and trusted by a wide rangeof customers
Providing highly functional and high-quality products
Global supply covering six regions across the globe and an alliance andcollaboration structure
Shrinking market for conventional internal combustion engine parts due tothe ongoing transition to EVs
Decline in global automobile production and sales
Stricter environmental requirements, fuel regulations, etc.
Intensifying competition for the existing businessResponse to carbon neutral internal combustion engines and diversificationof next-generation fuels
Expansion of market share for aftermarket parts
Application of anti-wear and sealing function technologies

Strategy17

In its 2023 Mid-term Management Plan, TPR has set “secure a commanding
top position in powertrain products” as the first pillar of the four pillars, and ispursuing the following priority initiatives.
Establishment of the very best technologies that lead the market
Pursuit of the highest quality
Innovative rationalization of production
Optimization of production, procurement, and logistics
Dynamic expansion of global sales activities
Promotion of transfer of technological know-how and skills

Product Overview

Piston Rings
3-piece oil ringSide rail: SUS + outer circumference PVC CrNSpacer: SUS untreated (or SUS nitride
treatment)

Lighter and more fuel-efficient gasoline engines as well as diesel engines that meetemission regulations and achieve higher output are in demand. TPR’s new surface
treatment technology, ring shape modification, and other ideas reduce friction,
oil consumption, and wear loss and contribute to further improvement of engine
thermal efficiency.
In recent years, we have been actively engaged in joint development with ourcustomers to optimize engines ready for multiple fuels, including hydrogen andsynthetic fuels (e-fuel).

Cylinder Liners
Fig. AsLock® liner
outer circumference(AL13)

TPR’s AsLock® liners (patented technology) are the world’s first cast-in liners
developed for aluminum engine blocks. Having succeeded in mass production
by a low-cost process, AsLock® liners are currently used by almost all Japanese
automobile manufacturers, and their use is spreading to non-Japanesemanufacturers.
The centrifugal casting method, which has matured over the years, enables
stable low-cost, high-quality manufacturing, and we are working on labor-saving
automated inspections to further strengthen our cost competitiveness.

Sintered Products
TPR’s valve seats and valve guides support the pedestal and stem of the engine
intake and exhaust valves. For application to environmentally friendly engineswith high output and low fuel consumption, they are made of materials containing
dispersed hard particles based on a special alloy powder developed in-house.
TPR’s valve seats and valve guides have been adopted by many customers.
Because of their superior wear resistance at high temperatures, development of
products for engines that use alternative fuels, such as hydrogen, LPG, and CNG,
and are subject to a harsh thermal environment, has progressed in recent years.

Seal Rings

Ring rotation direction

Deep groove

Shallow groove

Sintered and steel seal rings with excellent sealing and heat resistance are usedin turbochargers, EGR valve seals, housing seals, and other products applied inexhaust systems.
Resin seal rings with T-section spiral groove shape were invented by TPR for
automotive transmissions (AT/CVT/DCT). Made of novel materials and featuring a
special shape, these seal rings achieve both high sealing performance and wear
resistance, as well as reduced friction.

Development and Evaluation Technologies

Cylinder liner heat
conduction analysis

T O P I C S

TPR has engine evaluation facilities at its Nagano Factory and Gifu Factory. Using
various types of evaluation equipment and evaluation technologies cultivated over
the years, TPR proposes new surface treatment technology, material development,
and function development to further improve thermal efficiency of internal
combustion engines and reduce exhaust gas emissions.
As CAE function analysis becomes increasingly important for supporting productdesign, we are vigorously engaged in activities in response to model-based
development (MBD), providing optimal design proposals based on structural,
thermal, behavioral, and fluid analysis.

Thermal spray treatment on the outer circumference of the AsLock®
liner increases adhesion (bonding strength) with the aluminum engine
block and contributes to improved thermal conductivity.
In view of the transition to EVs, we installed an EVs motor evaluation
facility at the Gifu Factory, our production site in Japan, and began
operating the facility in January 2023. We will accelerate R&D of EVsrelated parts and add new items to our product lineup, both in Japanand overseas, by utilizing the actual equipment evaluation know-how
we have cultivated in cooperation with major automobile manufacturers.

EVs motor and battery emulator forevaluation

18

Business Strategy

Diversification Business and
New Business
By using the TPR Group companies’ technologies to the fullest,
we offer solutions across diverse fields, such as resin, rubber,aluminum, and equipment.

Industrial rubber parts

Home equipment

Infrared equipment

Temperature control
valves

Aluminum products

New businessLine of BusinessIn contrast to TPR’s core business of powertrain products, which are mainly made of steel, the diversification businesshandles products mainly made of rubber and resin.
We are also stepping up cultivation of new fields and creation of new business by applying our core technologies,
including the development of new business based on ideas developed from insights into the future and the application of
cutting-edge new materials.

Strengths

Diversification BusinessCentering on material compounding technology, mold design, and product processing
technology, we provide diverse products to customers in the pneumatic machinery,automotive, and housing industries.
Linked to mother factories in Japan, our production sites in China and Vietnam respond to
customers’ needs for global supply.

New Business
TPR excels in its core advanced material technologies, such as carbon nanotubes (CNT)
and nanoporous (NP) materials, and know-how related to quality, cost, and delivery(QCD) for their application. TPR’s strengths also include industry-academia-government
collaboration and open innovation with universities, research institutions, and consortiums
researching advanced technology.

Threats andOpportunities

Strategy

19

Material prices are soaring; transportation, labor, and infrastructure costs are rising;and geopolitical risks are mounting around the world. In these circumstances, in thediversification business, we will vigorously increase production and invest in order toreduce costs. As well as passing on technology to the next generation and raising the levelof technology at mother factories in Japan, we also emphasize training of local staff atoverseas sites and promote diversity and inclusion. Recognizing current circumstances asopportunities for business expansion, we provide products to customers around the world.
In new business, we will accelerate business creation by viewing changes in the world andshifts in preferences as opportunities, including opportunities for partnerships with venturecompanies.
The diversification business handles various materials and products and is emphasizing thedevelopment of environmentally conscious products. Meanwhile, while securing resources
for the next phase of development by determining which products should be continued
and which should be discontinued in view of their life cycles, we will continue to provide
products with superior value so as to achieve business growth. Regarding new business,based on existing technologies, we will work to develop businesses in new fields adjacent
to existing fields and to create new business through open innovation in various industryacademia-government collaborations based on insights into the future with a 2050 time
horizon.

Measures by
Business

Diversification
Business

We are working to develop superior products by taking advantage of the sealing technology that TPR has
cultivated for piston rings, that is, the know-how related to sliding characteristics and wear resistance, and by
applying the mechanism to rubber and resin products.
Moreover, with the aim of commercializing products for new applications, which is a theme that our new
business development team is tackling, by combining new materials, such as CNTs, with rubber and resin, we
will endeavor to respond to customers’ requests.
T O P I C S

We are promoting production optimization globally.
In order to prepare for future sales expansion and increased production, and also from the viewpointof optimization of the Group’s production, TPR Sunlight Co., Ltd., which is responsible for the TPRGroup’s rubber business, opened a new factory in Sakura City, Chiba Prefecture, in April 2023,
utilizing a plant that was previously used for the copper business.
We are also expanding facilities in Vietnam and promoting production optimization between Japan
and Vietnam in anticipation of future growth in demand for the products of the rubber and resin
businesses.

New
Business

Individuals selected through an open application process are taking the lead in new business development
based on ideas for new business formulated by backcasting from insights into the future with a 2050 time
horizon. All employees can refer to these insights into the future on the TPR intranet, and a framework has
been established to solicit ideas as needed, with the aim of facilitating generation of ideas through a bottom-up
approach.
Whereas TPR has promoted R&D of nanomaterials, such as CNT and NP materials, a current issue is the needto prepare for production so as to win orders for mass production while pursuing R&D. We are working to speed
up development of new business by establishing an organization with clearly defined roles and cultivating amindset geared to development in accordance with the Guiding Principles.

T O P I C S

We are conducting R&D with research institutions and customers todevelop applications of new materials, namely, CNT and NP materials. The
results and statuses of these R&D initiatives are presented and explained atvarious exhibitions.

Main exhibitions in which TPR participated
Automotive Engineering Exposition, nano tech 2023, Smart Energy Week [March], Tokyo Care Week ’23
Using nanomaterials, we have developed applications such as electromagnetic wave absorbing sheets andsurface heat generators.

20

Business Strategy

FaltecThe Faltec provides superior products in the automotive exterior
parts, OEM parts, and automotive-related equipment businesses
by applying its outstanding technological, developmental, andsolution-proposing capabilities.

Radiator grilles

Millimeter-wave radar
coversRoof rails

Radiator grilles with
illumination

Automotive inspection /maintenance machinery

Automotive related
equipmentLine of Business
Faltec’s principal customers are automobile manufacturers, and its principal products are automotive exterior parts, OEMparts, and automotive-related equipment.
With exterior parts and OEM parts, Faltec seeks to offer premium quality and functional beauty. Faltec is also engaged
in joint development with its customers, proposing high-value-added products and expanding globally based on theexpertise cultivated in Japan.

Strengths

New product development based on three keywords: carbon neutrality,
decoration, and CASE
Investment of resources focused on strategic products
Global unification of facilities, processes, quality, kaizen, and management
Deployment of manufacturing standards and technology standards from themother factories in Japan to production sites overseas

Threats andOpportunities

Changes in composition of parts due to the shift to EVs
Decline in global automobile production and sales
Intensifying competition for the existing business
Expansion of new areas such as communication and decoration in line withthe progress of CASE
Development of design and material technologies to improve environmental
performance and fuel efficiency

Strategy

T O P I C S

21Under the mid-term management plan, Faltec aims to achieve an operating
margin of 4% in fiscal 2026. The company is focusing on building a muscularprofit structure, creating new products and technologies, and enhancing themanagement foundation.

By combining Faltec’s technology for the telematics control unit (TCU), a key component that connects
the internet and the car, with servers owned by a partner company, a completely non-face-to-face car
rental service has been realized, signaling Faltec’s full-scale entry to connected business.

Product Overview

Resin Products (Radiator Grilles, Roof Rails, Other Exterior Parts)
From small to large resin parts, Faltec offers
products utilizing molding technologies that meetcustomers’ needs.
To reduce losses arising at material input, materialchangeovers are automated and recycling is
promoted.
Surface treatment is applied to resin molding
to create aesthetically pleasing radiator grilles andmillimeter-wave radar covers.

Metal Products (Roof Rails, SUS Moldings, Window Moldings, Etc.)
Faltec develops metal products utilizing bend
processing, roll forming, and extrusion technologies.
For aluminum roof rails, five-axis CNC machining
and stretch benders are utilized to produce roof railswith three-dimensional special bent shapes that
follow the roof panel. Regarding SUS moldings, SUS
material that has been roll-formed using multi-stage
tooling is bent, cut/processed, etc., to decorate
window frames. Regarding window moldings, Faltec
provides roll-formed metal products covered withresin. In addition to products with a single section
profile, Faltec has also developed technology thatcan modify the section profile.

Electrical and Electronic Parts (Radiator Grilles with Illumination, Fog Lamps, Remote Control Engine Starters, TCU)
Faltec proposes new styling, offering attractive
products that leverage electrical and electronic partstechnology.
Faltec excels in controls that use the CAN, whichis the in-car LAN, and manufactures the telematics
control unit (TCU), which is the key part thatconnects the internet and the car, remote control
engine starters, and other parts. Moreover, Faltec
has developed a fleet management system based on
the combination of the TCU, a drive recorder, and a
web application. By using Faltec’s newly developed
system for collection and analysis of vehicle
information, the company provides a corporate
fleet management system that addresses threemain business issues: improvement of operational
efficiency, cost reduction, and peace of mind in theevent of an emergency.

Automotive Related Equipment
Faltec provides vehicle inspection and maintenance equipment used for automobile maintenance, etc. handled by car dealers’ service
and maintenance shops; automobile manufacturing facilities and equipment for vehicle production lines; and power systems such as
emergency power units and gas engines for air conditioning.

22

Sustainability

TPR’s Sustainability Management
In accordance with the Corporate Philosophy, “to contribute to realizing a clean and high-quality
global society by offering unmatched technologies and products with superior value,” the TPRGroup is striving to resolve social issues.
With the aim of promoting our initiatives systematically, we have established a sustainability
management promotion structure and identified materiality. By pursuing these initiatives
throughout the Company, we will contribute to the realization of a sustainable society whileaiming for continuous corporate growth.

Sustainability Management Promotion Structure

Corporate Philosophy &Management Attitude

Corporate Philosophy
With our origins in sophisticated powertrains, we shall try to achieve unlimited
potential, and contribute to realizing a clean and high-quality global society by offering
unmatched technologies and products with superior value.
Management Attitude
We will create and meet expectations to win the highest trust of our customers.
We will expand and deepen our technologies to offer world-leading products.
We will develop and learn from people, and realize a meaningful and rewarding
workplace together with our employees.

By putting the Corporate Philosophy into practice and through behavior based

Basic approach tosustainability initiatives

on the Management Attitude, we will enhance company-wide engagement inenvironmental management, promotion of diversity, and risk management tocontribute to the realization of a sustainable society while aiming for continuous
corporate growth.

We have identified materiality (ESG) and will address them throughout the Company.

Engagement inmateriality

Execution of the
management planE

Responding to climate change, environmentally conscious manufacturing, etc.

S

Quality assurance, securing safety, creating a rewarding workplace, etc.

G

Thorough compliance, enhanced risk management, enhanced corporate
governanceMid-term Management Plan (Basic concept for corporate behavior)
Behavior based on the Corporate Philosophy
Execution of four pillars (management strategies) based on technology, passion, andreliance
Commitment to IEGS
Realization of a sustainable and diverse society where no one is left behind
Execution of the Corporate Philosophy (cycle of execution of strategies, commitment to
IEGS, and realization of a sustainable society)Response to sustainability issues and contribution to the SDGs through business activities

23

Sustainability Initiatives Promotion Structure
We are tackling sustainability issues through meeting forums focused on the environment, quality, and safety. To promotethese initiatives more systematically, we have established the Sustainability Promotion Committee, which identifies priority
matters, sets various policies and directions of initiatives, conducts follow-up of activities, and reports to the Board of
Directors.

Board of Directors
Sustainability Promotion
Committee

Carbon Neutrality
Promotion
MeetingCompany-WideEnvironmental
Conservation
MeetingCompany-Wide
Development
MeetingCompany-WideHealth & Safety
MeetingCompany-Wide
Quality
Assurance
Meeting

Compliance
Committee

Risk
Management
Committee

E

E

E

S

S

G

G

Materiality
We have identified priority matters (materiality) to be addressed for the realization of a sustainable society, continuous
corporate growth, and enhancement of corporate value by means of the following process and are pursuing these goals
throughout the Company.
STEP

1
STEP

2

Each department sets their KPIs in cooperation with the secretariat based on the 17 SDGs

Determine the degree of importance of the KPIs set in Step 1 by mapping them in terms of theirimportance for TPR and for stakeholders, and identify the materiality

STEP

3

The Sustainability Promotion Committee deliberates on the identified materiality and grants approval

Materiality

E

S

Main KPIs

Provide products and services that contribute to a clean and high-quality global
society

Development of environmentally conscious
products

Promote environmentally conscious manufacturing

Total CO2 emissions
Number of serious environmental incidents

Realize a rewarding and diverse workplace that develops people and learns fromthem and contribute to local communities

Ratio of female employees and ratio of
employees who are foreign nationals

Provide high-quality products and services meeting customers’ expectations andtrust

Number of major quality incidents

Enhance a fair and highly transparent governance structure

Report of compliance activities to the Boardof Directors

Risk management to ensure globally robust and stable business continuity

Number of BCP drills conductedG24

Sustainability

Environmental Initiatives
Ever since its founding, adhering to the Corporate Philosophy, “to contribute to realizing a clean
and high-quality global society by offering unmatched technologies and products with superiorvalue,” the TPR Group has been striving to fulfill corporate social responsibility and is working
on ESG initiatives. We have established the Environmental Policy, which provides the frameworkof TPR’s environmental initiatives, and are addressing environmental issues vigorously andcontinuously.

Environmental Policy
1. Provide environmentally friendly products
We are committed to reducing environmental impacts through design and development of mechanical parts andprovision of products that contribute to the realization of powertrains with minimal environmental impact.

2. Reduce CO2 emissions toward realization of a carbon-free society and realize environmentallyconscious business activities
In all business activities,
We aim to achieve carbon neutrality by 2045 following our mid-term target of a 50% reduction in fiscal 2030
compared to fiscal 2013.
We comply with laws and regulations, save energy, save resources, reduce waste and convert waste into resources,
recycle, manage harmful substances, and pursue green procurement.

3. As a corporate citizen
To secure the reliance and empathy of society, we will proactively communicate and protect biodiversity.

4. Realize more effective environmental activities
By carrying out education and training for all employees and affiliated companies, we will endeavor to boost awarenessof the criticality of environmental activities and adherence to the law.

Environmental Management Structure
TPR’s environmental management is spearheaded by
the Company-Wide Environmental Conservation Meetingoverseen by the President & COO. The Company-WideEnvironmental Conservation Meeting, attended by TPR Board
Members, affiliated companies’ Board Members, and General
Managers of each business, deliberates and determines
how best to tackle environment-related matters ranging fromcurrent pressing problems to medium- to long-term issues.
Also, at each business site, domestic affiliated company,
and overseas affiliated company, a person is selected to be
in charge of environmental matters, including the fostering ofcommunication across the TPR Group.

President
Board Member in chargeof environment
Company-WideEnvironmental
Conservation Meeting

EMS Secretariat (Safety
Environment Department)
EMS Internal Audit Team

Headquarters

NaganoFactory

Gifu Factory

Affiliatedcompanies
in JapanAffiliatedcompanies
overseas

Environmental Objectives and Results
Initiatives
Reduction of CO2 emissions:

FY2022 targets

50% reduction in FY2030 vs. FY2013

Reduction of incinerated waste and landfill waste:

30% reduction in

FY2030 vs. FY2013
Efficient use of water resources:

25

30% reduction in FY2030 vs. FY2013

TPR Group’s sites in Japan:

20% reduction vs. FY2013

TPR Group’s sites in Japan:

15.9% reduction vs. FY2013

TPR Group’s sites in Japan:

15.9% reduction vs. FY2013

Ensuring compliance with environmental laws and regulations to prevent
accidents/pollution

Zero non-compliance

Environmental communication activities

Participation in environmental conservation activities

Evaluation

Responding to Climate Change
Having identified “promotion of environmentally conscious manufacturing” as one aspect of materiality, TPR is responding
to climate change. We have declared our support for the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD) and are participating in the TCFD Consortium.
We recognize that climate-related risks and opportunities have a major impact on business strategy, and based on the
TCFD recommendations, we are engaged in the four items of governance, strategy, risk management and metrics andtargets, as described below, and will promote information disclosure.

Item

Activities

Governance

We are tackling various sustainability issues. To promote these initiatives more systematically, we haveestablished the Sustainability Promotion Committee, which identifies priority matters, sets various policies anddirections of initiatives, follows up activities, and reports to the Board of Directors, thereby strengthening oursustainability initiatives.
We position the response to climate change as a critical management issue. Based on various policies, etc.
that the Sustainability Promotion Committee formulates, the Carbon Neutrality Promotion Meeting and various
ESG meetings deliberate and determine how best to tackle environment-related matters ranging from current
pressing problems to medium- to long-term issues.

Strategy

TPR has long engaged in climate change countermeasures and reduction of CO2 emissions. Recently wehave set a target of achieving carbon neutrality in 2045 and are making a company-wide effort in this regard.
To achieve this target, taking into consideration the 4°C Scenario, 2°C Scenario, etc. published by the UN
Intergovernmental Panel on Climate Change (IPCC), we have identified and are addressing climate changerisks (transition risks and physical risks) and opportunities related to business activities.

Risk
Management

At TPR, the Risk Management Committee evaluates and recognizes risks related to the execution of TPR’s
business, deliberates on risk management at TPR and each Group company, and monitors critical risk
matters.
Regarding climate change, TPR’s Environmental Policy is a matter requiring resolution by the Management
Meeting. Issues are recognized, response statuses are followed up, and the Environmental Policy isdisseminated by the Company-Wide Environmental Conservation Meeting, which manages all environmental
matters. The identification of and response to climate-related risks and opportunities are carried out in line withthe framework recommended by the TCFD, based on scenario analysis.
The Board of Directors receives reports relating to critical matters concerning ESG risks and sustainability
efforts, and, through discussion, supervises these matters.

Metrics andTargets

TPR’s long-term metrics to mitigate climate change are Scope 1 and 2 CO2 emissions. TPR’s targets areto achieve a 50% reduction in CO2 emissions in Scope 1 and 2 by 2030 vs. 2013, and carbon neutrality by
2045.
Toward these targets, we are promoting cross-organizational CO2 emissions reduction activities, such as
production process and facility renewal that is considerate to the environment, as well as use of renewableenergy.

Reduction of Total CO2 Emissions
2045

TPR is working to achieve carbon neutrality by 2045 throughimplementation of the following measures.
Formulation of the CO2 emissions reduction master plan
Thorough reduction of CO2 emissions and implementationof energy-saving and cost reduction activities
Introduction of solar power generation
Reduction of electricity consumption for melting in blast
furnaces
Reduction of CO2 emissions by reducing development
processes (use of MBD)
Purchase of renewable energy

Achieve carbon
neutrality

2030 milestone

50% reduction vs. FY2013

2022 result

24% reduction vs. FY2013(Scope 1 and 2)

2013

2022

2030

2045

26

Sustainability

Social Initiatives
Quality Control
Based on the Corporate Philosophy, we will continuously strengthen customer trust in the TPRGroup and customer satisfaction, through pursuit of the highest quality, making the best and themost in the world, quickly and affordably.
For this purpose, we are executing operations based on the Quality Way, the guiding principles,indicated below.

Quality Way (Guiding Principles)
Genchi-genbutsu (actual place, actual thing) (scientific approach)
Increase quality-related skills, adopt a scientific approachContinuous improvement (hard and soft)
Continue hard and soft improvement to continuously increase product quality and work quality
Own process completion (The next process is done by the customer)
Resolve concerns in your own process, only pass good products onto the next process
Full participation by all members (autonomy)Take ownership of all concerns and issues

Quality Control Promotion Structure
TPR’s quality management is spearheaded by the Company-Wide Quality Assurance Meeting and the Global Quality
Assurance Meeting overseen by the President & COO. At the Company-Wide Quality Assurance Meeting, attended by
TPR Board Members, heads of each site, and the quality control departments, the results of activities of each site andkey measures are reported and improvement is pursued.
The Global Quality Assurance Meeting is held to strengthen the quality foundation of overseas sites, and TPR’s sites
are working to achieve uniform quality worldwide.
Based on these two meetings we are striving to continuously improve the TPR Group’s reliance and customer
satisfaction.
President

Top down fromthe President
President

Board Member in charge of
QualityCompany-Wide Quality
Assurance Meeting

Quality Assurance
Department

Global Quality Assurance
Meeting

QMS Secretariat

Aim

QMS Internal Audit Team

Involvement oflocal staff

Aim

Expatriate in charge of
quality
Mother factory /Quality assurance

Consistent policy
deployment

Local staff
NaganoFactory

Gifu Factory

TPR Industry
Co.,Ltd.

Affiliatedcompanies inJapan

Affiliatedcompanies
overseas

Aim

Mutual learning
among sites

Procurement Management
Aiming for the highest-quality manufacturing and the realization of a sustainable society, TPR is conducting procurement
activities in cooperation with all its suppliers, taking ”mutual growth based on mutual reliance,” “legal compliance,” and“environmentally friendly procurement (green procurement)” into consideration.
Environmentally Friendly Procurement (Green Procurement): In order to deliver environmentally friendly, highest-quality products for ourcustomers, TPR collaborates with its suppliers to procure materials and parts with low environmental impact (i.e., green procurement). To
do so, we request all our suppliers to confirm that substances of concern are not contained in the items that TPR procures and that they
proactively engage in environmental conservation based on consideration of the following.
Management ofchemical substances

27

Resource saving

Resource recycling

Ease of disassembly

Energy saving

Reinforcement of Human Capital
The TPR Group recognizes the importance of respecting human rights, securing diverse humanresources, and developing highly motivated people who are willing to take on big challenges.
We are committed to human capital management based on the policy of “Realize a rewarding
and diverse workplace that develops people and learns from them and contribute to local
communities” pursuant to TPR Group’s materiality.
In the era of CASE and amid the ongoing shift to EVs, the TPR Group is making a concerted
effort to achieve continuous growth. In these circumstances, we are proactively investing inpeople and promoting development of human resources, diversity and inclusion, and creation of
a comfortable working environment as priority measures.

Development of Human Resources
We believe that mutual understanding and empathy among all employees and high performance are critical to take onchallenges in the current era. We hold townhall meetings with all executives and employees and roundtable discussions with
top management, in order to strengthen through dialogue the motivation to tackle new challenges. Moreover, in order tomaximize performance of individuals, we will systematically conduct training, including leadership training mainly for mid-level
employees, organizational management training for executives, and compliance training and education on safety and theenvironment for all employees. We will also continue to invest in training and education aimed at improving the abilities, skills,
and expertise of each employee. Furthermore, we are promoting internal open recruitment and assignment to encourage
people who are willing to take on challenges and to identify talented human resources in house.

Promotion of Diversity and Inclusion
Since establishing its first overseas site in 1990, TPR has proactively recruited non-Japanese nationals as employees,
promoted them to managerial positions, and proactively pursued global training and education, personnel exchanges,
and collaboration, including the Global QC Circle Presentation Congress. Going forward, we intend to promote these
initiatives with greater vigor. With the aim of creating a workplace where women can work with greater dynamism andenthusiasm, we are working to improve the environment throughout the TPR Group so that female employees can pursue
long-term career development while going through various life stages such as childbirth and child rearing. We also aim toincrease the ratio of women in managerial positions.

Creation of a Comfortable Workplace
Aiming for a comfortable workplace, we engage in continuous dialogue with the labor union and pursue initiatives that
contribute to a better work-life balance, such as increasing the rate of paid leave acquisition, introduction of the “jobreturn system,” and increasing the rate of childcare leave acquisition by men. At the same time, as a manufacturer, weare proactively engaged in improvement of the workplace environment to ensure a comfortable working environment for
employees at factories.

Employee Engagement
To grasp the effect of its investment in people comprehensively, the TPR Group has been conducting an engagement
survey periodically since fiscal 2020 and using its scores as an indicator. By running the cycle of improvement based on
analysis of issues, implementation of measures, surveys, and subsequent measures, we identify priority areas and takeaction to create a comfortable workplace.

Engagement with Local Communities
TPR addresses social issues in various fields and regions and contributes to the sustainable development of society as awhole.

Environmental
Protection

TPR is involved in community cleanup activities and biodiversity protection, and also holds
meetings to exchange information on the environment with local communities and local
government.

Social Welfare

We support single-parent households through donations to Single Mothers Forum, acertified NPO.
28

Sustainability

Corporate GovernanceOur origins are the materials, processing, and surface treatment technologies as well as otheraspects of monozukuri that we have cultivated since our establishment in 1939. In its business
operations, TPR Group endeavors to make the Corporate Philosophy, “realizing a clean and highquality global society,” an everyday reality.
To accomplish this, we cultivate good relationships not only with shareholders and customers,
but also with suppliers, local communities, employees, and other stakeholders. We aim to achieve
continuous growth by offering unmatched technologies and products with superior value while
always practicing good corporate governance.
On the firm foundation of the basic policy described below, we endeavor to improve theeffectiveness of corporate governance.

Corporate Governance Structure
Corporate Governance Structure

TPR has a Board of Directors and an Audit & Supervisory
Board. To separate Directors’ oversight function frombusiness execution, TPR has introduced an executive
officer scheme, including the Chairman & CEO andPresident & COO.
The Audit & Supervisory Board communicates with theinternal audit department, regularly exchanges opinionswith the accounting auditor, and promotes corporate
governance by conducting appropriate and proper audits.

: Internal Director / Audit & Supervisory Board Member: Outside Director / Audit & Supervisory Board Member

General Meeting of Shareholders
Election /Dismissal

Submission of
proposals / Report

Board of Directors

ReportReportConsult

Nomination andRemuneration Committee

Accounting
audit
institution

Business execution body
Representative Directors

Audit by the Accounting
Auditor

Audit by Audit &Supervisory Board
Members(Chairman & CEO, President & COO)

Management Meeting, Budget Meeting, etc.

Audit
Department

Business execution / Oversight of subsidiaries

LawyerReportReportCollaboration

Audit &
Supervisory Board

Business/accounting audit
institution

Internal audit

Board of Directors
The Board of Directors consists of nine Directors. To
enhance corporate governance, including reinforcementof internal control and ensuring compliance, four
independent Outside Directors (from the financial sector,
manufacturing industry, and the legal profession) areappointed.
In principle, a meeting of the Board of Directors is held
every month, but also on an ad hoc basis as required. In
addition to deliberating and deciding critical aspects ofmanagement, the Board of Directors oversees businessexecution.
Audit & Supervisory Board
There are five Audit & Supervisory Board Members,of whom three are highly independent Outside Audit& Supervisory Board Members who have specialist
knowledge, to ensure a neutral and objective audit
structure. Audit & Supervisory Board Members conduct
audits in line with the audit policy and division of duties
defined by the Audit & Supervisory Board.

Election /Dismissal

Accounting Auditor

ReportElection /Dismissal

Executive Officers / General Managers /Presidents of Affiliated Companies
Headquarters

Factories

Affiliated companies
In Japan Overseas

TPR Group’s various committees, responsible persons, etc.
• Sustainability Promotion Committee• Compliance Committee• Risk Management Committee• Health & Safety Committee• Person Responsible for Organizing QMS
Internal Audit• Person Responsible for EMS Control• Person Responsible for Organizing
Insider Trading Information

Collaboration

Skills Matrix of Directors and Audit & Supervisory Board Members
Regarding the composition of
the Board of Directors, we aim
to enhance diversity in termsof expertise, knowledge, andexperience in various fields,
regardless of age and gender. As
for the skills of Directors and Audit& Supervisory Board Members, wehave identified those skills deemednecessary from the perspective ofcontributing to TPR’s continued
growth and enhancement ofcorporate value over the medium tolong term.

Areas of particular expertise
Name

Hiroshi Suehiro
Kazumi Yano
Takehiko Karasawa
Akihiko Ii
Noriaki Ayuzawa
Masataka Honke
Toshihisa Kato
Kanako Osawa
Kenji Muneto
Hiroshi Kato
Yutaka Sukegawa
Masahiro Kitahara
Takashi Yonekawa
Shinya Tanaka

29

Position
Representative Director,
Chairman & CEO
Representative Director,
President & COO
Director, Senior Managing
Executive Officer
Director, Senior Managing
Executive Officer
Director, Executive Officer
Director (Outside)
Director (Outside)
Director (Outside)
Director (Outside)
Full-time Audit & Supervisory
Board Member
Full-time Audit & Supervisory
Board Member (Outside)
Full-time Audit & Supervisory
Board Member
Audit & Supervisory Board
Member (Outside)
Audit & Supervisory Board
Member (Outside)

Corporate
management

Finance /accounting

Manufacturing /technology / IT

Sales &
marketingGlobalNomination
and
Legal
affairs / risk Remuneration
management CommitteeCompliance
The TPR Group has established the TPR Group Compliance Basic Rules and TPR Compliance
Rules. Based on these rules, we promote the maintenance and improvement of Group-wide
compliance structures. In accordance with the TPR Group Compliance Basic Attitude described
below, our employees execute their day-to-day business activities.

TPR Group Basic Attitude Toward Compliance
Sincere Behavior
Assuring Transparency andSoundness of Management

Transactions Based on Fair and Free
Competition
Making Safe and Comfortable Workplace

Contribution
to the Society

Compliance Structure
Based on the above rules, with the Chairman & CEO as the overall responsible person, the Compliance Committee
comprising Management Meeting members has been established. Within this framework, each General Manager
promotes the maintenance and improvement of compliance structures as the person responsible.
The Group Governance Oversight Department serves as the secretariat and its responsibilities encompasses all
domestic and overseas Group companies. Its role is to prevent unlawful or unethical actions throughout the TPR Group,
such as improper accounting processes. For this purpose, it has established a mechanism for early detection of any
such actions, aiming to enhance Group governance. Furthermore, compliance training is a mandatory component of theemployee education curriculum.

Risk Management
Risk Management Structure
TPR works continuously to manage risk by accurately identifying increasingly diverse and complex risks, preventing
risks from materializing, and minimizing damage when they do materialize. The Risk Management Committee strives toaccurately assess, recognize, and implement countermeasures for risks related to business execution. TPR and its Group
companies deliberate on risks And important issues concerning risks are continuously monitored.

Operation of Risk Management
In accordance with the TPR Group Risk Management Basic Rules, the Management Planning Department supervises risk
management activities and divisions, departments, and sites implement risk management corresponding to the particularrisks they face. In the event that a major risk arises, a task force will be established to respond as necessary. Moreover,important matters related to risk management activities are reported periodically to the Board of Directors.

Priority Risk Management Activities
In order to prioritize human life and maintain business continuity in the event of a disaster such as an earthquake ortorrential rain, we continuously engage in activities based on the business continuity planning (BCP), including initial
response and recovery response training.
The TPR Group comes into possession of various personal and confidential information in the course of its businessactivities. To handle such information and maintain confidentiality, the TPR Group, led by the System Development
Department, has implemented information security management measures. In particular, to strengthen countermeasuresfor cyber-attacks against companies, which have become more frequent in recent years, we are reinforcing educationand training for employees, introducing software, etc. as countermeasures, and commissioning vulnerability assessments
by third-party organizations.
30

Information

Financial Highlights
Net Sales

Ordinary Profit(Millions of yen)

(Millions of yen)

240,000

24,000

192,619

178,530

180,000

152,002

163,537 178,619

12,00060,0006,000

2019/32020/32021/32022/32023/3

設備投資

11,785

10,84012,000

8,000

8,000

4,000

4,000

2020/32021/32022/32023/3

純資産

2022/3

10,652

11,131

11,241

11,1690

2019/32020/32021/32022/32023/3

12,642(%)

200,000

143,139
135,472 139,007

159,752 165,903

80

40

50,00020

2020/32021/3

45.9

45.4

47.6

50.4

50.5

2019/32020/32021/32022/32023/358

58

2022/32023/360

100,000

2019/32021/3Equity-to-asset Ratio(Millions of yen)02023/32020/3

自己資本比率Net Assets

150,000

2019/316,00010,172

2019/3

10,215(Millions of yen)

14,426

12,0000

14,633

Depreciation(Millions of yen)

13,9160

14,138

減価償却

Capital Investment
16,00016,40018,000120,000

0

21,7652022/32023/3

配当性向

0

株主還元

Payout Ratio

Dividend per Share

(%)

(Yen)

51.4

60

29.1

28.5

30

100

54

24.7

60
44

50

16.6

0

2019/32020/32021/32022/32023/30

2019/32020/32021/3

Note: The dividend for the fiscal year ended March 31, 2020 includes anordinary dividend of 56 yen and a commemorative dividend of 4 yen(80th anniversary commemorative dividend).

31Company Data / Stock Information
Company Outline

Company Information
Name

Directors and Audit & Supervisory Board
Members (as of June 29, 2023)

TPR Co., Ltd.

Representative Director, Chairman & CEO

Headquarters 10th Floor, Shinmarunouchi Center Building,
1-6-2 Marunouchi, Chiyoda-ku, Tokyo 1000005, Japan

Hiroshi Suehiro

Representative Director, President & COO

Kazumi Yano

Director, Senior Managing Executive Officer

Takehiko Karasawa

Director, Senior Managing Executive Officer

Akihiko Ii
Noriaki Ayuzawa

Founded1939

Director, Executive Officer

Capital4,758 million yen(as of March 31, 2023)

Director

Masataka Honke

Director

Toshihisa Kato

Director

Kanako Osawa

Manufacture and sale of functional parts forengine blocks and other products

Director

Kenji Muneto

Full-time Audit & Supervisory Board Member

Hiroshi Kato

6,935 persons on a consolidated basis(as of March 31, 2023)

Full-time Audit & Supervisory Board Member

Yutaka Sukegawa

Business
Number of
employees

Full-time Audit & Supervisory Board Member

Masahiro Kitahara

Audit & Supervisory Board Member

Takashi Yonekawa

Audit & Supervisory Board Member

Shinya Tanaka

Stock / Shareholder Information

Stock Information (as of March 31, 2023)
Securities code
Listed market
Fiscal year
Ordinary General Meetingof Shareholders
Number of sharesconstituting one unit
Total number of sharesauthorized to be issued
Total number of issued
sharesNumber of shareholders
Shareholder register
administrator

Major Shareholders (as of March 31, 2023)

6463
Prime Market of the Tokyo Stock
Exchange
From April 1 to March 31 of thefollowing year
June every year
100 shares
135,000,000 shares
34,300,099 shares
26,778 shareholders
1-3-3 Marunouchi, Chiyoda-ku,TokyoMizuho Trust & Banking Co., Ltd.

Numberof shares Shareholding
held
ratio
(thousands(%)
of shares)

Shareholder name

The Master Trust Bank of Japan, Ltd. (Trust
Account)

2,561

7.54

Meiji Yasuda Life Insurance Company

2,395

7.05

Sompo Japan Insurance Inc.

2,293

6.75

Custody Bank of Japan, Ltd. (Trust Account)

1,786

5.26

Mizuho Bank, Ltd.

1,518

4.47

Hulic Co., Ltd.

1,231

3.62

Tokyo Tatemono Co., Ltd.

933

2.75

TPR Business Partner Shareholding Association

842

2.48

Mizuho Trust & Banking Co., Ltd.

766

2.25

Custody Bank of Japan, Ltd. (Sumitomo Mitsui
Trust Bank, Limited Re-trust Account / Trust
Account for Hino Motors, Ltd. Retirement Benefits)

744

2.19

Note: Shareholding ratios are calculated excluding treasury stock (355,541 shares).

Share Distribution by Shareholder Type(as of March 31, 2023)

Number of shares
34,300,099 shares

Financial institutions

14,172,136 shares (41.3%)

Other domestic legal entities

6,848,381 shares (20.0%)

Individuals/others

6,837,541 shares (19.9%)

Foreign nationals

5,514,542 shares (16.1%)

Securities companies

571,958 shares(1.7%)

Treasury stock

355,541 shares(1.0%)

32

TPR Co., Ltd.
10th Floor, Shinmarunouchi Center Building, 1-6-2 Marunouchi, Chiyoda-ku, Tokyo
100-0005, Japan
Tel: +81-3-5293-2811

https://www.tpr.co.jp/tp_e