Supply Chain Initiatives
TS TECH Philosophy
Vision Statement
Mission Statement
Operational Directives

Supply Chain Management Policy

In order to coexist harmoniously with society and be a company sincerely appreciated by all and whose presence is valued by all of its stakeholders, management focused on
ESG-related issues, not just the pursuit of profit, is necessary.
Based on the TS TECH Philosophy, the Group aims torealize a sustainable society by promoting initiatives thatconsider the environment, safety, human rights, compliance,and social responsibility not only independently but throughout its supply chain.

Application of TS TECH Supplier
Sustainability Guidelines

We established the TS TECH Supplier Sustainability Guidelines to share and promote our views on sustainability withour business partners. We ask all business partners to comply with these guidelines in the following six categories: (1)Safety and Quality, (2) Human Rights and Labor, (3) The Environment, (4) Responsible Mineral Sourcing, (5) Compliance,and (6) Information Disclosure. In August 2023, we revised
the guidelines, mainly enhancing the two areas of “HumanRights and Labor” and “The Environment” in response to social changes.

The guidelines are posted on the company’s website
and shared with all suppliers in and outside Japan. We also
use a survey to verify compliance with these guidelines by
our business partners in Japan. We surveyed a total of 121
partners in fiscal 2023. As a result, we were able to confirm
that all partner companies maintain the same understanding of these guidelines as the TS TECH Group. The Group
recognizes these initiatives as part of its materiality (key material issues), continues them annually, and since fiscal 2024
will work to roll them out to suppliers outside Japan as partof efforts to build a sustainable supply chain.

TS Standards for Conduct—TS TECH’snorms and ideals
TS Guidelines for Conduct—Expectations forday-to-day conduct

TS TECH
Supplier Sustainability Guidelines

Category

Content

1. S afety andQuality• P rovide products and services that meet consumer
and customer needs• P rovide appropriate information about products
and services• E nforce governance over safety and quality ofproducts and services•G uarantee safety and quality of products
and services

2. HumanRights
and Labor•N o discrimination and respect and acceptancetoward diversity• R espect of human rights and no harassment•N o child labor•N o forced labor• Compliance with laws and regulations regarding wages• C ompliance with laws and regulations regarding
working hours• R espect to freedom of association and collective
bargaining rights• A dherence to occupational health and safety• R espect to the rights of local residents andindigenous people

3. TheEnvironment• E nvironmental management• R educe greenhouse gas emissions• E nvironmental preservation of air, water, soil, etc.
• E fficient use of resources• C hemical substance management• C onservation of biodiversity

4. Responsible
MineralSourcing• C onflict minerals

5. Compliance• Compliance with laws and regulations• Compliance with competition laws
• Prevention of corruption• Prohibition of conflicts of interest• Confidential information controls and safeguards• Whistleblower protection• Export trade• Intellectual property protection• Exclusion of antisocial forces

5. Information
Disclosure• Disclosure of information to stakeholders

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Supply Chain Initiatives

Basic Policy on Procurement

The TS TECH Group’s products are made from a wide variety
of materials and components provided by its suppliers.
In order to reliably offer quality products at competitive
prices to our customers, solid partnerships with our suppliers are indispensable.
The Group has established the Four Principles of TS Procurement, explained below, to ensure fair, just transactions
as well as to construct and maintain win–win relationships
with suppliers globally. By following these principles,
we strive to build a supply chain that can be relied upon by
all stakeholders.

Other Major Initiatives for Supply
Chain Management

Annual conference with major business partners
The TS TECH Group facilitates communication with business
partners by providing opportunities to share information
regarding purchasing strategies and policies. We hold anannual conference with major suppliers to explain our mediumterm management plan and operating policies and to exchange information. After switching to video distribution
due to the COVID-19 pandemic, in April 2023 we held anin-person meeting for the first time in four years, strengthening unity with each company to promote our 15th MediumTerm Management Plan by working together as one.

Four Principles of TS Procurement(1) Fair Trade	When selecting a supplier, we offer our business toseveral candidates irrespective of their nationality,
size, or past transactions and finalize our choice in afair manner by comprehensively evaluating theirability to offer superior quality, expertise, price, delivery, and other elements, as well as competitiveness,rationality, efforts for business security and otherrelevant matters.
(2) Mutually Beneficial Transactions	We share with our trade partners business challenges
such as development and competitive pricing, setgoals from a common perspective, and conduct joint
efforts to achieve targets. We afford the highest priority to mutually beneficial transactions in terms of results
thus obtained and make continuous efforts tostrengthen trust as the basis of mutually beneficialrelationships.
(3) Environmental Responsibility	In our corporate activities, we attach the greatest importance to global environmental preservation under
all circumstances. Accordingly, we practice “greenpurchasing,” granting preference to environmentallyresponsible products, services, companies, etc.
(4) Legal Compliance and Confidentiality	We respect the principle of legal compliance and thoroughly observe relevant laws and regulations and generally accepted norms. We handle with the greatest
care all kinds of information obtained from our customers and trade partners and make the utmost effort
to prevent the loss or misuse of such information.

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TS TECH Integrated Report 2023

Promoting environmental activities
CO₂ emissions from Category 1 “Purchased goods and services” in Scope 3 account for 88.3%* of the CO₂ emissions
from the TS TECH Group’s business activities including thesupply chain. We therefore recognize the importance of reducing emissions at our suppliers. Starting in April 2023, wehave presented CO₂ emissions reduction targets not only tosuppliers in Japan but also to suppliers worldwide, promoting
reduced emissions across our entire supply chain. To incorporate more specialized knowledge and increase effectiveness,
we held an online Carbon Neutrality Seminar with an external
lecturer and rolled out an effective emissions reduction process to our suppliers. In this manner, rather than unilaterallydemanding reductions, we work together with suppliers toreduce CO₂ emissions across the entire supply chain.

Survey on conflict minerals
The TS TECH Group’s procurement activities are founded ona basic policy of not using conflict minerals* in order to prevent the flow of funds to armed forces and situations that violate human rights. As part of this process, the Group checks
whether conflict minerals originating in or near the Democratic Republic of the Congo, as designated by the Dodd–
Frank Wall Street Reform and Consumer Protection Act of theUnited States, are used in our products. In light of the recent
increasing risk of social human rights infringement, we havealso expanded our examination to include cobalt.
In this examination, we probe the origin of minerals,
and if we identify a mineral of concern, we take appropriate
measures in cooperation with the supplier.
* Refers to the four minerals: tin, tantalum, tungsten, and gold.

* Percentage of total Group CO₂ emissions in fiscal 2023

Annual conference with major business partners

Supply chain risk management
To address procurement risks, the TS TECH Group works toprevent all “events that impact production,” including natural
disasters, fires, and financial challenges affecting its business partners. After visualizing information from upstream
to downstream in the supply chain, we identify procured
parts concentrated on a single supplier as “high-risk parts.”
We implement initiatives in cooperation with suppliers to
prepare for contingencies like natural disasters and secure
alternative procurement sources. As an initiative to minimize
risk, we are also working to consolidate and streamline supply chains that have become complex in terms of distribution channels and hierarchy.
For business partners who are especially important tous from a production reliability standpoint, we confirm information on risk countermeasures both in writing and throughinterviews, and we work with partners who are experiencing
challenges to implement improvement activities. Thesesteps are effective in strengthening our risk management
structure and enhancing business continuity.
Business partner assessments
In order to continuously supply high-quality products to ourcustomers, we evaluate business partners once a year. We
assess each business partner in terms of Quality, Cost, Delivery, Development, and Management (QCDDM) and ESG toevaluate overall capabilities. For business partners that need
improvement, we work to improve their overall capabilities
with the cooperation of each department.

Carbon Neutrality Seminar

We also examine components to ensure they do notcontain chemicals prohibited by laws and regulations ineach country and region. We do not permit the use ofchemicals prohibited by laws and regulations, even in
manufacturing processes within supplier companies.
Additionally, we have established rules to monitor theemissions of specified chemical substances designatedby laws and regulations, and to report any issues thatmay arise to the relevant government.

CommentCompliance with the Antimonopoly Act and prohibitionof corruption
TS TECH has prepared and put into use its own Antimonopoly Act and Subcontract Act Compliance Manual, which sets
forth the approach and considerations related to Japan’s Act
on Prohibition of Private Monopolization and Maintenanceof Fair Trade (“Antimonopoly Act”) and the Act against Delayin Payment of Subcontract Proceeds, etc., to Subcontractors(“Subcontract Act”). The relevant departments utilize themanual in day-to-day operations in conjunction with an accurate understanding of the two laws and a thorough, close
examination into the legality of individual events.
TS TECH has created mechanisms that allow relevant
departments to liaise with the department responsible forlegal affairs and consult as needed with attorneys on events
that cannot be definitively decided based solely on the manual. Moreover, TS TECH provides training on the Antimonopoly Act and the Subcontract Act in accordance with its
rank-specific training programs to foster awareness of compliance among employees.
In March 2016, the Group issued new anti-corruption
guidelines and anti-cartel guidelines as part of its continuing
effort to build a solid framework for ensuring fair, honest
business operations across all Group operations.

Building Robust Partnerships to Improve Corporate Value Together
As a global supplier to TS TECH, we have supplied products such as the high-precision fastening parts that are used in automobile seat frames for over 30 years.
In recent years, based on the TS TECH Supplier Sustainability Guidelines, we haveworked together to improve overall QCDDM and ESG performance. We believe these activities have shifted our partnership toward even more robust cooperation, enabling us toachieve competitive pricing and quality while ensuring stable product supply even in uncertain conditions. We also believe being selected for the Supplier Award four years in a row
testifies that these activities have been effective.
Moving forward, we will use our own technology and expertise to create new value, as
we strive to balance the pursuit of economic value and the creation of social value via soundbusiness activities emphasizing ESG performance. We will pursue sustainable growth while
practicing TS TECH’s vision statement of “A company dedicated to realizing people’s potential” and “A company sincerely appreciated by all.”Mamoru Shibasaki
President and CEO
Ohashi Technica, Inc.

TS TECH Integrated Report 2023

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