Review of the 14th Medium-Term Management Plan Fiscal 2021–2023

The 14th Medium-Term Management Plan set out a management policy of “Corporate evolution through ESGmanagement,” and during those years we moved forward with efforts to strengthen our corporate structure invarious ESG-related areas that support business growth. We made progress on priority measures, but theextremely challenging business environment caused by the pandemic and material supply shortages left
outstanding issues in terms of profitability. We will implement the 15th Medium-Term Management Plan to ensurethat all remaining challenges are addressed, such as achieving as yet unattained commercial rights targets in new
business areas and remedying the downturn in capital efficiency.

● Operating margin (%)

Evaluation◎•	Active incorporation of joint development and other types of open innovation
Capital and business partnership with Imasen Electric Industrial Co., Ltd.
Business partnership with ALPS ALPINE CO., LTD.
Investment in teTra aviation corp.

Newly established mold manufacturing and technology development bases△Evolution forbusiness growth•	Steady receipt of orders from major customers for target commercial rights
through spec proposals that leverage our strengths and enhanced
development collaboration•	Precise selection of target and strategic order development to acquire newcustomers and new commercial rights	Although the number of new orders increased, the target for final orders received was
not achievedContribution to a sustainable society○◎• Streamlining and increased efficiency through allocation reviews andrestructuring of business operations both in Japan and overseas based onreorganization of production
UK and Hungary: Reorganization of production hubs
India: Reorganization of automobile and motorcycle businesses
Mexico: Establishment of trim cover production company
Poland: Establishment of seat production company•	Establishment of the Sustainability Committee•	Identifying material issues and setting KPIs and targets for 2030
• Stronger global CO₂ emissions reduction activities and related
management to help achieve a low-carbon society
Endorsement of TCFD recommendations and disclosure response•	Enhancing resource management to achieve a circular society

Recognition for top quality△• Enhanced know-how and support from the first production base during
global rollout of new models• Prevention of defects by strengthening verification in the beginning stagesof development•	Stronger quality control systems at Group and business partner locations
Impact on income due to quality-related response costs

Stronger business
operations
structure tosupport evolution

Strengthening of continuous
earnings structure◎•	Establishment of a lowest-cost procurement structure by enhancing ourglobal procurement system• More efficient administrative and indirect operations through active useof IT• Studying and formulating financial strategies aimed at medium- tolong-term growth•	Establishment of a system to promote advancement of diverse
human resources
Introduction of referral and return of former employees recruitment

Maximization of employee andstructural efficiency◎TS TECH Integrated Report 2023

4.9

3.7

Rating: C
Aiming to achieve highest rating of AAA

Fiscal 2020 results

Fiscal 2021 results

Fiscal 2022 results

Fiscal 2023 results

359.6

346.1

349.9

409.2

Revenue (Billion yen)

Fiscal 2024 plan
410

Operating income (Billion yen)

26.3

26.7

22.9

15.2

20

Operating margin

7.3%

7.7%

6.6%

3.7%

4.9%

ROE

5.9%

7.8%

4.3%

1.8%

3.4%

[USD]

108.7

106.1

112.4

135.5

130.0

[CNY]

15.6

15.7

17.5

19.8

19.0

Averageexchangerate

Non-Financial Trend

The TS TECH Group measures its ESG quality
using an evaluation method based on the Dow
Jones Sustainability Indices (DJSI).1
In the 14th Medium-Term Management Plan,
our governance reforms, including becoming“a company with an Audit and Supervisory
Committee” structure and enhanced disclosure of non-financial items, were all well received. This meant that we significantly
improved our scores in the domains of corporate governance and social reporting. We willcontinue to move forward with advanced ESG
management, which we highlighted as a challenge in the 13th Medium-Term ManagementPlan (fiscal 2018–2020), as we strive to build anindustry-leading corporate structure and deliver sustainable corporate growth.
1 A sustainability-related index that evaluates companies’
sustainability from ESG and economic perspectives, publishedannually by S&P Dow Jones Indices LLC of the United States
2 Indicates the company’s position in the industry, with thehighest score being 100
3 New item from fiscal 2021, so no score recorded for the 13thMedium-Term Management PlanDJSI Evaluation (Indicated as a percentile ranking within the auto parts industry*2)

Occupational health & safety (OHS)
Corporate citizenship & philanthropy
Talent attraction & retention

CorporategovernanceMateriality
Risk & crisis management

14th Medium-Term
Management Plan

Codes of business conduct/compliance/anti-corruption
and bribery

Human capitaldevelopment

Policy influence

Human rights

Supply chain
management

13th Medium-Term
Management Plan

Labor practiceindicators

Tax strategy

Social reporting

Cybersecurity*3

Innovation management

Climate strategy

Product quality & recall management

Product stewardshipOperational eco-efficiency

Environmental policy& management systems

Environmental reporting

Major Initiatives

E• E ndorsement of TCFD recommendations and disclosure response• E nhancing environmental management and CDP initiatives

S• I mplementation of employee engagement survey• E xpanded the deployment of Supplier Sustainability Guidelines
and the scope of surveys about the guidelines• Implementation and utilization of employee engagement survey•	Evolution of our evaluation system to accommodate various work styles•	Review of our training system for next-generation humanresource development

14

6.6

Notable initiatives• Application of advanced processing technology in mass production

Optimization of business
operations structure

7.7◎: Very good ○: Good △: Average

Announcement of next-generation vehicle interior XR Cabin

Expansion of strategiccommercial rights(Fiscal 2021–2023)■ Operating income (Billion yen)•	Acceleration of development of sensing and other technologies that lead toattractive products
Commercialization oforiginal technologies

14th Medium-Term Management Plan

■ Revenue (Billion yen)

7.3

Progress on Priority Measures
MeasureFinancial TrendG• T ransition to “a company with an Audit and SupervisoryCommittee” structure• E stablishment of the Nomination and Compensation Committee•D iversification of the Board of Directors (appointment of femaledirectors, etc.)• E stablishment of the Sustainability Committee• F ormulation of material issues and setting of 2030 targets

TS TECH Integrated Report 202315