The 12th Medium-Term
Management Plan
T.RAD-12(From FY2022 to FY2025)

May, 2022
T.RAD Co.,Ltd.
Copyright © T.RAD Co., Ltd. All rights reserved.
1

T.RAD-12 T.RAD Management Philosophy & Corporate
Slogan & Medium-Term Strategies
T.RAD Management Philosophy

Corporate Slogan

 T.RAD provides superior heat exchanger products and contributes
to the evolution of society and environmental preservation with
our technology and services

 With the dream of ever-expanding thermal energy
conversion technology

 T.RAD pursues the continuous prosperity of the company,
coupled with happiness of its customers, shareholders, employees,
suppliers, and the surrounding community Aiming to be the world’s No. 1 heat exchanger
manufacturer contributing to the realization of acarbon-neutral society

Strategies of the 12th Medium-Term Management Plan
【TRAD-12 Company Vision】

1. A Company that achieve carbon neutral
2. A Company that is continuously chosen
by its satisfying customers
3. A Company trusted by its stakeholders
4. A Company that values human resources
5. A Company that achieve stable profitability
6. ５C+２S＋３R
Copyright © T.RAD Co., Ltd. All rights reserved.

2

Basic Strategies 1. A Company that achieve carbon neutral(1) Development, production, sales and promotion of heat exchanger
products for various power plants in the electrification era(2) Realization of energy-saving works by promoting thedownsizing of production lines and utilizing natural energy(3) Procurement of materials and parts with low CO2 emissions
and promoting recycling(4) Accelerated reduction of logistics by promoting the completionof operations within the works and the incorporation of external
warehouses(5) Construction and utilization of solutions that improve
both productivity and reduce CO2
Copyright © T.RAD Co., Ltd. All rights reserved.

3

Basic Strategies 2. A Company that is continuously chosen by its
satisfying customers(1) Providing products with optimal quality trusted by customers(2) Maintaining and securing a production system for stable supply(3) Promoting T.RAD global sales and strengthening R&D(4) Development and proposal of products that meet the changes and needs ofcustomers, regions, and the environment due to the deepening andevolution of heat exchange technology(5) Restructuring of the global production system through the
optimization of production allocation and the promotion of local
production for local consumption(6) Challenge for new business (new energy conversion
technology, manufacturing industry and IT etc.)
Copyright © T.RAD Co., Ltd. All rights reserved.

4

Basic Strategies 3. A Company trusted by its stakeholders(1) Enhancement of corporate governance(2) Enhancement of shareholder returns by increasing
corporate value(3) Growing together with suppliers
Expanding and strengthening collaborative activities in the
supply chain

Copyright © T.RAD Co., Ltd. All rights reserved.

5

Basic Strategies 4. A Company that values human resources(1) Pursuing zero accidents through employee healthand safe production activities(2) Reforming work-style and improving theworkplace environment(3) Developing human resource throughmanufacturing(4) Developing human resource of local
management in overseas subsidiaries(5) The creation of a work environment in which a diverse
workforce can thrive and respect for human rights
Copyright © T.RAD Co., Ltd. All rights reserved.

6

Basic Strategies 5. A Company that achieve stable profitability
IoT
IoT(1)Promoting cost reduction by productivity
improvement (utilization of TPS, IoT, AI, etc.)(2) Promoting cost reduction by global supply chain systemconstruction and strengthening procurement capabilities(3) Promoting manufacturing reform by realizing
unrivaled products and unrivaled lines(4) Pursuing vertical start-up of new mass-produced products
by strengthening the mother factories management system(5) Improving investment efficiency through stricter
investment risk assessment and thorough monitoring(6) Promoting business reform (DX)by utilizing IT technology
Copyright © T.RAD Co., Ltd. All rights reserved.

7

Basic Strategies 6. ５C+２S＋３R(1)A culture that allows us to tackle new andchallenging things(2)Activities that do not fear changes in the surrounding
environment or the need to change ourselves(3) Cross-departmental and cross-divisional
communication and cooperation(4) Activities attaching importance to speed(5) Promotion of the 3Rs

Challenge

Change Co-Operation

Speed
Copyright © T.RAD Co., Ltd. All rights reserved.

＋

Co-Creation Connect

Share

＋

Reuse

RecycleReduce8

T.RAD-12 Financial Targets
Financial Targets for FY2025 (ending March 31, 2026)

Net Sales

Ordinary Income Ratio

ROE

150.0

6.0%

10.0%

Billions of yen

Ordinary Income
Ratio & ROE (%)

Net Sales(Billions of yen)

T.RAD-11
Copyright © T.RAD Co., Ltd. All rights reserved.

T.RAD-12
9

T.RAD-12 Financial Targets(Billions of Yen)

T.RAD-11

T.RAD-12

ActualTarget

FY2019FY2020

FY2021

FY2022

FY2022

FY2023

FY2024FY2025

136.1

130.5

113.0

133.6

140.0

158.4

144.0

147.0

150.0

5.6

2.9

1.5

6.0

6.3

4.6

7.2

8.1

9.0

4.1%

2.2%

1.4%

4.5%

4.5%

2.9%

5.0%

5.5%

6.0%

ROE

3.9%

3.3%

-3.0％

8.4％

8.0％

3.4％

8.8％

9.5％

10.0％

Total Sales

66.8

63.5

56.3

68.3

65.0

77.0

67.0

69.0

70.0

Ordinary Income

3.5

2.8

2.9

5.5

2.8

4.9

3.0

3.3

3.8

Ordinary Income
Ratio

5.3%

4.5%

5.2%

8.0%

4.3%

6.4％

4.5%

4.8%

5.4%

Total Sales

78.7

77.4

65.3

77.1

82.0

92.0

84.0

85.0

87.0

Ordinary Income

4.4

3.5

2.0

4.1

6.6

2.3

7.3

7.9

8.3

Ordinary Income
Ratio

5.6%

4.5%

3.0%

5.3%

8.0%

2.5%

8.7%

9.3%

9.5%

Ordinary Income
Consolidated
Ordinary Income
Total
Ratio

Overseas
Total

Forecast

FY2018
Total Sales

Domestic
Total

Target※Consolidated Total＝Domestic Subsidiaries, Consolidated Elimination, Equity in earnings of affiliates are included

Copyright © T.RAD Co., Ltd. All rights reserved.

USD

EUR

RUB

THB

FY2021115.02130.52

1.55

3.43

FY2022 Forecast

125.2

136.21

1.46

T.RAD-12 (FY2022 to
FY2025) Targets

109.2

132.71

1.48

RMB

IDR

VND

18.07

0.00810.0051

3.73

19.62

0.00870.0055

3.49

16.99

0.00760.0047
10

TRAD's commitment to "Carbon Neutral"
Supply various heat exchangers
for various power plant

CO2 reduction in manufacturing
and transporting process

1. For the electrification era

2. CO2 reduction in each process

FCEV

e-fuel
EV

PHV

HEV

CO2 reduction solutions
by TRAD’s technology
3. Contributing to the global CO2 emission

Target To reduce CO2 emissions by 3% every year
 To achieve “Carbon Neutral” in 2050

Copyright © T.RAD Co., Ltd. All rights reserved.

11

１. A Company that achieve carbon neutral(1) Development, production, sales and promotion of heat exchanger products
for various power plants in the electrification era
As a heat exchanger manufacturer in the carbon neutral (CN) era
By 2050, all heat exchangers sold by T.RAD will be products for CN vehicles
Heat exchangers
for CN vehicles
Energy used
Electricity Hydrogen e-fuelConventional heat exchangers forinternal combustion engine vehicles

Power plant configuration
2021

2022

2023

2024

2025

…

2050

Forecast of global automotive heat exchanger market

HEV

EV

FCEV

PHV

 There are various engine options in the CN era, such as EVs, FCEVs, hydrogen engines,
and e-fuel engines. In any case, all power plants require heat exchangers→ Developing and providing unrivaled products with overwhelming functions and costcompetitiveness in the expanding heat exchanger market
Copyright © T.RAD Co., Ltd. All rights reserved.

12

１. A Company that achieve carbon neutral(2) Realization of energy-saving works by promoting the downsizing ofproduction lines and utilizing natural energy

Aiming to realize an "energy-saving factory"
Solar power generation

Air conditioning system withgroundwater & products Approx. 30% of theelectricity covered by solar
power system

 Factory that is friendly toboth humans and nature witha new air conditioning system

Using the new factory as a model, we will promote converting our conventional
factory to energy-saving factory on a global scale.
Copyright © T.RAD Co., Ltd. All rights reserved.

13

１. A Company that achieve carbon neutral(3) Procurement of materials and parts with low CO2 emissions andpromoting recycling-1)【Concept of CO2 reduction activities】《In the case of each radiator manufactured using aluminum, our main material》
《 Representative:
Aluminum large RAD 》

Approximately 44 kg/unit of CO2 is generated in the
manufacturing process.
The following processes 1), 2), and 3), in particular,
have a large volume of emissions.
Materials and suppliersInternal (in-house production)

Parts molding(externally purchased)Parts
molding

Material

Internal production:
Injection molding
machine0.5kg/unit

36.2 kg /unit
2)Resin material(PA66): 5.0 kg /unit
1)Aluminum material:

Externally made: Approx. 93%

 Weight: 4.1 kg
 Black part: Resin Silver part: AluminumCoreassembly

Electricity：
0.5kg

Brazing(TAB furnace

Assembly andinspection
completed

3)1.9 kg/unit

Utility（air）:

Electricity：
1.9kg

0.3 kg/unit

In-house production: Approx. 7%(LCA)CO2 emission ratio*The amount of CO2 emissions from purchased parts, in-house processing,
Copyright © T.RAD Co., Ltd. All rights reserved. distribution, etc. is partially unidentified.

*Apportionment based on the total volume offactories/processes, according to JAPIA.
14

１. A Company that achieve carbon neutral(3) Procurement of materials and parts with low CO2 emissions andpromoting recycling-2)

Resource
miningT.RAD-11
is being
addressed

T.RAD-12
activity started(partially

Material
manufacturing

Supplier’s parts
manufacturing

T.RAD’s productmanufacturing

Producttransportation

Vehicle production
and use

Disposaland Recycling

Scope３

Scope３

Scope1 and 2

Scope３

Scope３

Scope３

 Adopting cleanmaterials

CO2 Reduction
parts

CO2
reduction
in logistics

Contributing to CO2
reduction byincreasing thedelivery ratio ofenvironmentallyfriendly products

 Considerationof the 3Rs

 Consideration ofrecycled materials

 Strengthening energysaving activities andpromoting the
introduction of energysaving equipmentin purchase=>Establishing Miniaturization andweight reduction of
products

a system to survey

 Scrap reduction

obtain indicators

 Reducing material
usage through thepromotion of scrap
reduction

the emissions ofmajor suppliers andexpanded)Starting to monitor

CO2 emissions

Strengthening promotion
for Miniaturization andweight reduction of
products
Promoting response to the
Task Force on Climate-related
Financial Disclosures (TCFD)=> Conducting
a survey on
logistics
emissions andestablishing asystem toobtainindicators

Starting tomonitor CO2
emissions

・Reuse・Reduce
・Recycle Considerationof productsthat areeasilydisassemble

Indirect contribution

Scope1：Direct greenhouse gas emissions by businesses (e.g., fuel combustion and industrial processes)
Scope2：Indirect emissions associated with the use of electricity, heat, or steam supplied by other companies(e.g., using electricity from electric power producers)
Scope3：Indirect emissions other than Scopes 1 and 2 (emissions by other companies related to the activities of the businesses)
Copyright © T.RAD Co., Ltd. All rights reserved.

15

１. A Company that achieve carbon neutral(3) Procurement of materials and parts with low CO2 emissions andpromoting recycling-3)
Concept and goals for the implementation of carbon-neutral (CO2 reduction) activities
Most CO2 emissions up to the completion of the product are from the
manufacturing process of aluminum material, the main material (Scope3)

Key Activities in T.RAD-12
We are studying ways to reduce CO2 emissions in the manufacturing process ofaluminum materials and conducting activities to reduce CO2 emissions
during our production activities
Adopting cleanmaterials

Development ofmaterials using
recycled materials

Miniaturization andweight reductionof products

Reduction of
scrap≪Target of CO2 emission reduction≫

27％
reduction

Entire life cycle assessment
2030
Target（Scope1, 2 and 3）

27% reduction fromthe FY2021 level(3% reduction/year)

Copyright © T.RAD Co., Ltd. All rights reserved.

CO2
Emission(tCO2)

T.RAD 12BM

12% reduction(3% reduction/year)

T.RAD 13

Achievingcarbonneutrality

2050

16

１. A Company that achieve carbon neutral(4) Accelerated reduction of logistics by promoting the completion ofoperations within the works and the incorporation of external warehouses
1) Promoting optimal logistics throughout theentire supply chain (including onsite logistics)

2) Minimizing and optimizing external warehouses● Establishment of optimal logistics through the coordination of production●Reduction of distribution losses by incorporating

and logistics information● Improvements in the efficiency of logistics through the use of AI and IoT

Total optimization of supply chain management

external warehouses into works●Promoting improved transportation efficiency
through relay transportation(SCM) from the procurement of raw
materials to product delivery to customers

Shiga

NagoyaHatanoT.RAD
Logistics
Shiga

T.RAD
Logistics
Higashiura

T.RAD
Logistics
HatanoNagoyaShiga

Overseas
bases

Product consolidation

Overseas
bases

Customers

Copyright © T.RAD Co., Ltd. All rights reserved.

HatanoT.RAD
Logistics

Internalization of external warehouses

Suppliers17

１. A Company that achieve carbon neutral

Expansion of production base for products for electric vehicles: Construction of new
Hatano Works (completed in March 2022)
Investment amount

About 1.5
Billions of Yen
Products for electric vehicles currently
manufactured in Shiga and Nagoya
are produced at the new Hatano Works

Shiga Works

New Hatano
No.3 Works

Nagoya Works Expansion of production systems for products for electric vehicles
 Reducing the transportation distance of products to customers in eastern Japan,
thus reducing transportation costs and CO2
Copyright © T.RAD Co., Ltd. All rights reserved.

18

１. A Company that achieve carbon neutral(5) Construction and utilization of solutions that improve bothproductivity and reduce CO2

Technology and know-how of T.RAD as a manufacturing company
Production control system（ERP）

Salesforce

IoT

Solutions using
thermal energy

T.RAD CONNECT
Improved productivity and efficiency through the use of T.RAD CONNECT (IT)

Production
efficiency UP!

Transportation
efficiency UP!

Energyefficiency UP!

・・・

Contributing to reduce CO2 emissions
Copyright © T.RAD Co., Ltd. All rights reserved.

19

２. A Company that is continuously chosen by its satisfying customers(1) Providing products with optimal quality trusted by customers
Achieving the optimal quality of heat exchanger products for diverse powertrains Research and basic R&D, model development, production preparation, quality build-up, and monitoring through initial
flow control

Preventing the recurrence of quality problems (domestic and overseas) Enhanced true cause analysis based on track records and eliminating human factors through the use of AI and IoT

Establishing a global quality assurance system (for domestic and overseas subsidiaries)
 Establishing a global quality system by correlating quality information (on business partners, production, equipment,
performance, etc.) with various information on T.RAD CONNECT

Developing suppliers and maturing the quality of purchased goods in coordination with
supply chains and global material procurement
Human resource development [Design, evaluation, and quality improvement] Education on quality methods (SQC*, multivariate analysis, reliability, FMEA*, etc.) through manufacturing

Copyright © T.RAD Co., Ltd. All rights reserved.

*SQC ＝Statistical Quality Control*FMEA ＝Failure Mode and Effects Analysis
20

２. A Company that is continuously chosen by its satisfying customers(2) Maintaining and securing a production system for stable supply
Establishment of a system to avoid component supply risks in supply chains【Preparation for risk reduction】








Systematic construction of a product configuration tree list (including
computerization)
Consolidation of supplier information and establishment of a mechanism for internal
information deployment
Promotion of suppliers’ disaster mitigation activities
Optimal inventory considering target recovery time
Planning and implementation of training plans for emergencies
Reduction of transportation costs and time by promoting local production for local
consumption＋
 Consideration and implementation of clarifying problems with alternative suppliers Consideration of global alternative procurement in case of emergency

Realization of stable parts supply
Copyright © T.RAD Co., Ltd. All rights reserved.

21

２. A Company that is continuously chosen by its satisfying customers(3) Promoting T.RAD global sales and strengthening R&D
Strengthening R&D* structure for electrification business expansion and global deployment
R&D/Production bases

Establishing an EV promotion officein China, an important EV market

China

U.S.A

Czech

India

Production bases

Mother baseJapan
ThailandIndonesia【Development of product corresponding for EV】● Planning and development for unrivaled products● Development and manufacturing for unrivaled lines

Vietnam

Accelerating customer response with proposals and trial production based on both unrivaled
product development at the mother base and localization at overseas R&D bases→ Aiming to strengthen T.RAD’s ability to respond to customer needs and to capture
further business opportunities

Copyright © T.RAD Co., Ltd. All rights reserved.

*R＆D＝ Research and development

22

２. A Company that is continuously chosen by its satisfying customers(4) Development and proposal of products that meet the changes and needs of customers, regions,and the environment due to the deepening and evolution of heat exchange technology

Development and provision of diverse products that match the latest needs
Heat Exchanger for Battery Electric Vehicles(BEV)and Fuel Cell Electric Vehicles(FCEV)Heat Exchanger for Construction Machines

Radiator for Motor and Inverter

Oil Cooler for
Motor Cooling
LLC Chiller forBattery Cooling

Radiator for
Fuel Cell Battery

Heat Sink for Battery Cooling

Hydrogen Preheater for Fuel Cells

Heat Exchanger Module forConstruction Machine (S-ACoM)

Heat Sink for Inverter

Heat Exchanger for Hybrid Electric Vehicles(HEV)

Radiator for HybridElectric Vehicle(HEV)
Copyright © T.RAD Co., Ltd. All rights reserved.

Water-Cooled
Charge Air Cooler

EGR Cooler

Heat Exchanger Module forHybrid Hydraulic Excavator

Heat Exchanger for Motorcycles

Trapezoid and Curved Radiator

Built-in Radiator for Scooter
23

２. A Company that is continuously chosen by its satisfying customers(5) Restructuring of the global production system through the optimization of production
allocation and the promotion of local production for local consumption- 1)

Restructuring of the Global Production System
Opportunities increased
by electrification
Optimization of Production Allocation

Manufacturing technology
conditions are createdat product mother

Deployed at each site
 Effectively using ALL TRAD’s resources for opportunities increased by electrification
 Manufacturing technology conditions are created at each product mother and deployed at each site
Copyright © T.RAD Co., Ltd. All rights reserved.

24

２. A Company that is continuously chosen by its satisfying customers(5) Restructuring of the global production system through the optimization of production
allocation and the promotion of local production for local consumption- 2)

Considering and promoting the introduction of a fabless production system
Production






Sales

Development

DesignProduction

Customers and subcontractors

 A mother management system that manages data
through IoT to grasp the actual status ofproduction and quality in real time Prevention of technical knowledge andinformation leakage through the introduction of
automated equipment

No investment is required for new or expanded production plants
Concentrating on product R&D, marketing, and other operations to speedily develop and propose products
Using in-house equipment to promote the accumulation of technology with automated and compact equipment
Capable of quickly identifying changes in the market and making decisions on production expansion or contraction→ Providing high-quality products at a low cost to expand market share
Copyright © T.RAD Co., Ltd. All rights reserved.

25

２. A Company that is continuously chosen by its satisfying customers(6) Challenge for new business (new energy conversion technology,
manufacturing industry and IT etc.)
Natural heat energy～～～

Geothermal

Waste heat from equipment

Hot spring

Furnace

Hot-waterheaterPower
generator

Used in air conditioning
and hot water supply

High-temperature heat source: 80°C or higher

20 to 60℃
Thermoelectric conversion

Low-temperature cooling water: 10 to 20°C

Cooling water (groundwater, river water, etc.)

Electricity

Small and medium-sized
manufacturing industry,
service industry, etc.
Use as electric power

Application of heat exchange technology
to utilize natural thermal energy and exhaust heat for energy conservation
Copyright © T.RAD Co., Ltd. All rights reserved.

26

２. A Company that is continuously chosen by its satisfying customers(6) Challenge for new business (new energy conversion technology,
manufacturing industry and IT etc.)

Technology and know-how of T.RAD as a manufacturing company
Production control system（ERP）

Salesforce

IoT

Solutions using
thermal energy

T.RAD CONNECT
Provision of IT and CO2 reduction solutions to the world

Small and medium-sized manufacturing industry all over the world,
service industry etc.
Copyright © T.RAD Co., Ltd. All rights reserved.

27

３. A Company trusted by its stakeholders(1) Enhancement of corporate governance1) Establishment and operation of internal control systems
Appropriately manage risks to increase the Group’s medium- to long-term corporate value in line with globalization.

 Establishing and operating an internal control system with a three-tier defense consisting of the businessexecution, management, and internal audit departments

Management teamDirection and supervision

Business
execution
department
Implementing necessarycontrol activities for risks
in day-to-day operations
to control risks

Ensuring
independence

Monitoring≪Other than management
department≫
Domestic factories
Sales office
Domestic subsidiaries
Overseas subsidiaries

Audit

ReportManagement
department
Monitoring risks andproviding advice asneeded, independent of
the business execution
department.
Business Planning &Administration Dept.

Ensuring
independenceInternal audit
department

Audit
and
AdviceProviding reasonableassurance regarding risk
management functions
and internal control
systems, independent of
the business execution
and risk management
departments

ReportCorporate
auditors
andexternal
auditors

Finance & Accounting Dept.

Quality Assurance Dept.
Purchasing Division
DX Promotion Division

Hardware aspects: Infrastructure building through rule development and IT utilization
Software aspects: Fostering and spreading compliance awareness on site
Copyright © T.RAD Co., Ltd. All rights reserved.

28

３. A Company trusted by its stakeholders(1) Enhancement of corporate governance2) Promoting information disclosure of Task force on Climate-related Financial Disclosures (TCFD)

Contents
Recommending
disclosure withspecific scenario
analysis on
climate change

Issues to be addressed in the future1) Actual and potential impact on climate-related risks and opportunities

Correlating with corporate strategy and financeDecisions on investment, financing, underwriting decisions, etc.

2) Medium- to long-term strategic scenario analysis


2°C scenario: Understanding the impact of transition risks and opportunities, with measures to address them



4°C scenario: Identification of physical risks and opportunities, with measures to address them3) Understanding the impact of financial compensation risks, etc. for 1) and 2),
and disclosing response measures and a supervision system for corporate
management
Transition risks

Risks posed to the revaluation of financial assets with significant greenhouse gas (GHG)
emissions as we transition to a low-carbon economy

Physical risks

Direct impacts, such as property damage caused by floods, windstorms, and other weather-related
projects, and indirect impacts, such as global supply chain disruptions and resource depletion

Liability risk

Risks created by parties suffering losses due to climate change seeking to hold others liable forcompensation and recovery

Copyright © T.RAD Co., Ltd. All rights reserved.

29

３. A Company trusted by its stakeholders(2) Enhancement of shareholder returns by increasing corporate value

1) Target balance sheet image
FY2021

FY2025Equity ratio:
47.5％

Equity ratio:
About 40.0%

interest-bearing
Liabilities

Total assets

93.7

Billions of Yen

Total assets

18.2

115.0

Billions of Yen

Billions of Yen

39.2

Billions of Yen Billions of Yen

Equity44.5

interest-bearing
Liabilities

Equity

ROE

8.4％

EPS

515Yen46.0
Billions of Yen

ROE

10％

EPS

870YenWe aim to achieve a consolidated ROE of 10% while maintaining theconsolidated equity ratio at 40% or higher by strengthening the corporate
profitability by achieving the target items of the 12th Mid-Term Management
Plan (T.RAD-12) and through an aggressive investment policy.
Copyright © T.RAD Co., Ltd. All rights reserved.

30

３. A Company trusted by its stakeholders(2) Enhancement of shareholder returns by increasing corporate value2) Capital allocation image <<Four-year cumulative total for the period fromthe fiscal year ending March 31, 2023 to the fiscal year ending March 31, 2026>>

Cash flows fromoperating activities＋
Loans payable

Total
Growthinvestments

50.7

Electrification

12.0 Billions of Yen

New orders/Increased production

8.0 Billions of Yen

Renewal and maintenance offacilities

11.0 Billions of Yen

DX and environment

4.5 Billions of Yen

Billions of Yen

61.2
Billions of Yen

Strategic
investments

Total Shareholder
returns

Billions of Yen

13.7 Billions of Yen

New businesses*10% investment of

1.5 Billions of Yen

the net income

10.5




New plant andM&A

Purchase of treasury stock

Dividends

10.5 Billions of Yen

We aim to achieve investments in growth and shareholder returns through appropriate capital policies.
We will invest in further strengthening our competitiveness (technology and productivity) in areas,
including our electrification, DX, and environment. Furthermore, we will invest in the renewal andmaintenance of existing facilities to secure our earnings base.
In addition, we will make strategic investments in new plant construction, M&A, and new businesses that will lead to future
growth.

Copyright © T.RAD Co., Ltd. All rights reserved.

31

３. A Company trusted by its stakeholders(2) Enhancement of shareholder returns by increasing corporate value

3) Dividends & Purchase of treasury stock
Total shareholder
return ratio

Total shareholder return ratio 90％ or more

Payout ratio

Payout ratio 30％ or more

90.2％

31.0%
Purchase oftreasury stock

2.1

Billions ofYen

Annualdividends

Annualdividends

FY2021

FY2022

160Yen

160YenFY2023

FY2024FY2025

While maintaining financial soundness and making investments for growth, we will flexibly
purchase treasury shares by considering the quarterly business performance, and we will
strengthen the shareholder returns, aiming for a dividend payout ratio of at least 30% anda total shareholder return ratio of at least 90%.
The remaining 10% will be used for new businesses and other strategic investments.

Copyright © T.RAD Co., Ltd. All rights reserved.

32

３. A Company trusted by its stakeholders(3) Growing together with suppliers (expanding and strengthening
collaborative activities in the supply chain)

SafetyImproving suppliers’ safety levels

Law

Promoting suppliers’ compliance

Quality

Reduction of defects in purchased parts and materials
at the time of delivery and those already received

DeliveryReinforcement of production readiness of components
for new models

Cost

Reduction in the cost of purchased parts and materials＋

Promoting CO2 reduction activities for purchased parts
Sharing problems with suppliers and promoting activities to improve communications to resolve problems
Making effective use of the T.RAD Supplier Portal to improve operational efficiency together with suppliers

Copyright © T.RAD Co., Ltd. All rights reserved.

33

４. A Company that values human resources(1) Pursuing zero accidents through employee health and safe
production activities
T.RAD aims to be a company that values people by pursuing the happiness of
its employees and their families, based on the basic philosophy that health andsafety are the highest priority in all of its activities.

1) Strengthening the Safety-first Principle

2) Strengthening health and hygiene activities in
response to the COVID-19 pandemic

 Reviewing T.RAD’s safety and health promotion system,
focusing on its efforts toward simple activities.

 Exploring new ways of working in the With/After
COVID-19 era.

 Raising T.RAD’s level of disaster prevention measures at
all sites by horizontally deploying them and further
strengthening its efforts to build and improve workplaceenvironments at all its bases.

 Continuously standardizing and improving thelevel of infection prevention measures being
taken at all locations.

 Creating a workplace with 5S keywords (Sort, Set in order, Shine, Standardize, Sustain)
 Achieving good communication among workers
Striving to ensure and promote T.RAD employees’ mental and physical health on a daily basis
through efforts including those listed above and promoting activities to maintain and improve a safe
and comfortable work environment.
Copyright © T.RAD Co., Ltd. All rights reserved.

34

４. A Company that values human resources(2) Reforming work-style and improving the workplace environment
Shifting to a personnel system that will be fairer and more convincing, rewarding those whowork hard and produce results. Furthermore, promoting work-style reforms and improving theworkplace environment by enhancing productivity through IT and other means.

Personnel system andevaluation system reforms

Close communication
between subordinates andsupervisors

Establishing a fair andhighly convincing
personnel system andevaluation system toreward those who think, act,
and produce results bythemselves.

Twice a year, each
employee and theemployee’s supervisor holda 1-on-1 meeting to provide
feedback on the employee’s
evaluation and discuss theemployee’s future career.

Establishing an open work
environment by providing
regular opportunities for
close communication.

Copyright © T.RAD Co., Ltd. All rights reserved.

Productivity improvements
through the use of IT
Reducing wasteful work andimproving T.RAD’s
productivity by using IT,from product manufacturing
processes to clerical work.
Then shifting labor to highvalue-added sectors andnew businesses.

35

４. A Company that values human resources(3) Developing human resource through manufacturing
T.RAD has defined the image of human resources that it seeks as employees who learn independently andcarve out their careers, and T.RAD is developing an education and training system to support this image.

Hierarchy
Program types

New employee

Years of service

Managers andsupervisors

On demand

Head of division

Programenrollment method

Collective,
face-to-face type

Online typeSelf-learning type(correspondence education)

Programenrollment method

Lecture style

Workshop style

OJT* style

Programenrollment purpose

Knowledge acquisition typeTechnique acquisition type

Experience,awareness type

Active skill development through the career declaration system
Capacity building through an enhanced e-learning system that can be done at any time and at any place*OJT = On The Job Training (An educational method in which supervisors and senior employees guide subordinates and junior employees throughactual work to help them acquire knowledge, skills, etc.)
Copyright © T.RAD Co., Ltd. All rights reserved.

36

４. A Company that values human resources(4) Developing human resource of local management inoverseas subsidiaries
As T.RAD operates worldwide, it is essential to establish a local employee-centeredbusiness operation system.
To this end, T.RAD is developing global human resource management and an education systemand focusing on developing excellent human resources that will be the core of T.RAD’s local subsidiaries.
T.RAD will particularly focus on the education and training programs specified below in T.RAD-12.

Promoting trainees’
understanding of policy
development system

Education to trainees’
understanding of thepersonnel evaluation
systemTraining of design
reviewers

Promoting trainees’
understanding of QC*
problem-solving
methods

Complianceeducation

Occupational healthand safety education

Copyright © T.RAD Co., Ltd. All rights reserved.

*QC＝ Quality Control
37

４. A Company that values human resources(5) The creation of a work environment in which a diverse workforce
can thrive and respect for human rights-1)【 The creation of a work environment in which a diverse workforce can thrive】

T.RAD will recognize the individuality and values of each employee and promote thecreation of a work environment in which a diverse workforce can thrive.
Recruitment and promotion ofmultinational personnel

Promoting the employment of people
with disabilities

 Proactive recruitment activities
and improvements in theworking environment toachieve the legally mandated
employment rate

Maternity, childcare, and nursing care
support systems

Promoting women’s activities Raising the target ratio of
women to the total number of
recruits to 30%, which iscurrently set at 20%

Copyright © T.RAD Co., Ltd. All rights reserved.

Proactively recruiting excellent new
graduates and career personnel
regardless of nationality
Actively promoting them tomanagerial and supervisory
positions

Developing a system that allows
employees to choose a way ofworking that meets their individual
needs during their childcare andnursing care periods

38

４. A Company that values human resources(5) The creation of a work environment in which a diverse workforce
can thrive and respect for human rights-2)【Respect for human rights】
T.RAD follows the United Nations Guiding Principles on Business and Human Rights (UNGP), which
are international standards for codes of conduct for respect for human rights that all countries
and companies must respect. Accordingly, T.RAD will promote efforts to respect the human rights
of all people involved in T.RAD’s business activities.

Human rights

policy development
Developing a humanrights policy as a basis forentrenching T.RAD’s
responsibility to respecthuman rights.

Human Rights
Due Diligence*
Establishing andimplementing a Human
Rights Due Diligencemechanism to avoid or
mitigate negative humanrights impacts.

Corrective action
Defining the remedies forvictims and measures toprevent recurrence if
T.RAD is found to havebeen involved in an act
that violates humanrights.

*Human Rights Due Diligence＝Understanding the risks of human rights violations associated with companies’ businessactivities and taking measures to prevent or mitigate them.
Copyright © T.RAD Co., Ltd. All rights reserved.

39

５. A Company that achieve stable profitability(1) Promoting cost reduction by productivity improvement(utilization of TPS, IoT, AI, etc.)
Promoting productivity improvement activities through TPS and DX (IoT + AI)
Promoting cost reduction activities through production line rectification
Realization of stable profitability with priority on safety and quality

Productivity improvement at each site
DX (AI + IoT) for the visualization offacility utilization rates and productivity
issues, and per capita volume
improvements（Unit/MH）

Process stabilization by
improving mobility and linearity→ Cost reduction

Cost reduction through thethoroughgoing elimination of waste
using the Toyota Production System

Just in time

Automation

Reduced lead time between
each order and shipment

Reduce lead time

Stops if there is an abnormality

Creating a system that does not backslide

Process
streamlining

Population
decline line

Simplification of flow Rectification, dedication, andhybridization
 Arranging facilities in process order Letting manufacturing products one
by oneCopyright © T.RAD Co., Ltd. All rights reserved.

Separation ofhuman work andmachine work

No defective
products

 Developing productivity
improvement activities through TPS
and DX (IoT + AI) Neck process visualization
 Building quality into the processaccording to the manufacturing
technology condition list

Participation in process design atthe production preparation stage

 Selling better products atlower prices40

５. A Company that achieve stable profitability(2) Promoting cost reduction by global supply chain systemconstruction and strengthening procurement capabilities

Supplier
in Japan

Japan
base

Supplier
in China Strengthening competitivenessthrough new development from a
global perspective

China
base

U.S.A
base
Supplierin U.S.A

Supplierin Asia
Europebase

Promoting cost reduction

Asia
base
Supplier
In Europe Promoting optimal procurementwith consideration of a business
continuity plan (BCP) Pursuit of optimal cost of purchased
component materials
 Standardizing parts and materials
and promoting appropriate quality
standards

Global supply chain* system construction*Supply chain ＝The entire sequence of events, from the procurement of raw materials and parts for products to the manufacturing, inventory control,delivery, sales, and consumption of products (supply chain)
Copyright © T.RAD Co., Ltd. All rights reserved.

41

５. A Company that achieve stable profitability(3) Promoting manufacturing reform by realizing unrivaled products
and unrivaled lines
Integrated development system of product design
and production technology
Product development
and design

Production technology
development

Prototyping
and evaluation

1) Developing unrivaled products and processes and establishing and maintaining a system to create them
2) Promoting the strategic development of unrivaled products and processes on a location-by-location basis
3) Striving for zero-defect lines

Realization of number-one Products and Unrivaled Lines● High functionality and high performance throughoriginal technology● Overwhelmingly excellent cost competitiveness● Optimal quality made possible bya specialized manufacturer
Copyright © T.RAD Co., Ltd. All rights reserved.

● Production volume: At least double● Installation area and workforce:
1/2 or less
● CO2 reduction: -30%

42

５. A Company that achieve stable profitability(4) Pursuing vertical start-up of new mass-produced products bystrengthening the mother factories management system
Developed
prototype

Equipment
manufacturing

Production
preparation

Manufacturing engineering
condition table*






Failure Mode and Effects Analysis(FMEA)QC process chart*

Operation standard sheet
Work and quality point statement

Expanding to overseas subsidiaries as a set
1) Vertical start-up of facilities andearly realization of stable production
Vertical start-up at overseas sites byimproving the completeness of
production processes and facilities

2) Promoting activities to produce
quality products in cooperation withmother factories
Optimization and early maturation of
specifications and processes throughthe design feedback of developed
prototype results3) Reliable transfer of manufacturing
technology conditions using a
manufacturing technology condition
table* (process chart)
Stabilization of production and quality
at the preparation stage of domestic
production, prevention of problems,and horizontal development of
improvements*QC process chart＝ A chart describing control characteristics and methods for each process from receiving raw materials to processing, assembly, and shipping.
*Manufacturing engineering condition table (process chart)＝A table summarizing the problems encountered in each process during prototyping, equipment manufacturing,and production preparation, the results of countermeasures, standards, and key points for each process.
Copyright © T.RAD Co., Ltd. All rights reserved.

43

５. A Company that achieve stable profitability(5) Improving investment efficiency through stricter investment risk
assessment and thorough monitoring
Risk assessment with return-on-investment analysis

Monitoring of investment recovery performance

Criteria for the profitability of new orders and return on
investment

Monitoring of initial plans and actual performance forinvestment recovery

 Assessing profitability and return on investment in thecase of new capital investment for new orders

Improvements in investment efficiency and accuracy by analyzing
the difference between the original plan and actual results

 Scope of new capital investment：
Applicable to new line installation, the addition andmodification of equipment due to an increase in volume

Cumulative cash flow (millions of yen)300

The future cash flows from new orders are discounted topresent value using our weighted average cost of capital. The
criterion is that the payback period for a positive cumulative
cash flow is within the life cycle period of the product.

200
100

900

2,000

Cumulative number of orders(K unit)

2,900

3,900

3,900

3,900

FY2026FY2027

FY20280-100

0FY2022

FY2023

FY2024FY2025

-200
-300
-400

5,000

-5,000(Kunit)実績
Actual(千台)

Budget for 予算
Planning unit
企画台数

Budget for accumulated
ｷｬｯｼｭﾌﾛｰ現在価値累計
予算(Millions ofYen) Actual
(百万円)
実績

present value of cash flows-10,000

Analysis of differences between the cost at the time of planning and mass production cost and actions taken

Analysis of variance results

Actions taken for analysis of variance results

Mass production cost problems

Cost reduction activities

Cost problem at the time of planning

Review and feedback on data accuracy and calculation rules

Copyright © T.RAD Co., Ltd. All rights reserved.

44

５. A Company that achieve stable profitability(6) Promoting business reform (DX) by utilizing IT technology

Necessity of DX Promotion
Prompt response
to diversifying
customer needs

Promotingcarbon neutrality

Management issues

Improvements in
productivity andoperational efficiency

Faster decision
making forinvestment andmanagement
improvement

Sales strategy
planning support

Transfer oftechnology andknowledge…

Promotion of digital transformation (DX) is essential
Copyright © T.RAD Co., Ltd. All rights reserved.

45

５. A Company that achieve stable profitability(6) Promoting business reform (DX) by utilizing IT technology
People concentrate on

Management Simulator Workflow

Analyze
Predictive
detection

Sence

and making decisions.

Think

Converting data to value

Analysisplanning countermeasures

Countermeasure planning
Utilizationof AI and IoT

Factoranalysis

Data collection and accumulation

Planning

Operation
proposal

Act

Feedback to the field

Centralized management of all data

IT×OT

Data lake
Quotation

Ordersreceived

Production
planning

DesignProcurement

Production
process

Production
results

Design and development support and manufacturing line management (PLMP and ELM)

Subsystem
group

Deliverables

Quality andcomplaints

Quality management

Taurus (production control)
Order management and supply chain management (SCM)
Monetary management and cost control
PLM：Product Life Management
ELM：Equipment & Asset Life Management
SCM：Supply Chain Management1● Agile development of various subsystems●Flexible integration between systems
Copyright © T.RAD Co., Ltd. All rights reserved.

Aim●Design productivity improvement●Decision-making support for investment
and management improvement●Model launch speed improvement
and cost reduction●Sales strategy planning support46

５. A Company that achieve stable profitability(6) Promoting business reform (DX) by utilizing IT technology

Circle of DX to Contribute to Society
Different industries,
such as the service industry
Other manufacturing
companies
T.RAD customers
and business partners

DX
Copyright © T.RAD Co., Ltd. All rights reserved.

47

６.５C+２S＋３R

５C+２S＋３R(1)A culture that allows us to tackle new andchallenging things(2)Activities that do not fear changes in the surrounding
environment or the need to change ourselves(3) Cross-departmental and cross-divisional
communication and cooperation(4) Activities attaching importance to speed(5) Promotion of the 3Rs

Challenge

Change Co-Operation

Speed
Copyright © T.RAD Co., Ltd. All rights reserved.

＋

Co-Creation Connect

Share

＋

Reuse

RecycleReduce48

T.RAD will continue to take on challenges,
seeing these times of change as opportunities!

Copyright © T.RAD Co., Ltd. All rights reserved.

49