AKEBONO REPORT 2018

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E : Initiatives to Reduce Environmental Impact S : Strengthen Ties with Stakeholders G : Corporate Value Improvement through Stronger GovernanceMessage About Akebono Medium- to Long-Term Growth ModelReview of OperationsCorporate Information Contents01 AKEBONO REPORT 2018Editorial PolicyWe compiled the AKEBONO REPORT 2018 based on “integrated thinking,” a concept proposed by the International Integrated Reporting Council (IIRC). In doing so, we have focused on actual examples of the Akebono Group’s operations, the kind of growth it aims to achieve and how it will fulfill its commitment to delivering safety and peace of mind through brake products.To effectively convey abovementioned content to our stakeholders, we prepared both printed booklet and web editions of the AKEBONO REPORT 2018. In the printed booklet, we put greater emphasis on reader-friendliness, focusing on matters that we want to communicate to a broader range of stakeholders. In this year’s report, we have presented various Company initiatives from the standpoint of ESG (Environment, Society, and Corporate Governance) and SDGs. We hope this will help you understand the business we are promoting with the aim of sustainable growth. Further details on topics presented in the printed booklet can be found on our website.It is our hope that the aforementioned articles help readers understand Akebono’s determination to lead the way in realizing unparalleled competitiveness as a small, specialized, independent manufacturing company.In preparing this edition, we referred to the Guiding Principles set forth by the IIRC as well as the Global Reporting Initiative Sustainability Reporting Guidelines (G4) and ISO 26000.Reporting PeriodThis report covers the annual results data for the 2017 fiscal year (April 1, 2017 to March 31, 2018). In addition, the report contains references to some ongoing activities undertaken after the latter date to provide readers with a better understanding of the latest status of initiatives.OrganizationsJapan: Akebono Brake Industry (including HP BU, Foundation BU, Infrastructure & Mobility Systems (AIMS) BU, Friction Material BU, Aftermarket BU, and R&D, automotive sales, production, production engineering, quality assurance, purchasing department, and administrative departments as well as Tatebayashi Foundry), domestic Group companies including four production plants (Yamagata, Fukushima, Iwatsuki and Sanyo), Alocs Corporation, Akebono Research & Development Centre, Akebono 123, and Akebono Advanced Engineering; Overseas: ABC, AEC, ABE, ABG, ABCT and ABCS (U.S.); ABM (Mexico); AESA (Gonesse), AESA (Arras) (France); AEG (Germany); AAE (UK); ABSK (Slovakia); AKBT, A&M (Thailand); two Chinese subsidiaries (Guangzhou and Suzhou); AAIJ (Indonesia); and AAVH (Vietnam). Please refer to “Akebono Locations” on pages 47 to 48 for the formal names of those organizations that are presented in the above listing as abbreviations.Top Message ...................................................................................................................03Akebono’s Journey ..........................................................................................................05Akebono 2018 .................................................................................................................07Product Introduction ........................................................................................................09Basic Principles of Brakes ...............................................................................................11Global Expansion .............................................................................................................13Overview of Sustainability Management .......................................................................15Expand into Next-Generation TechnologyNext-Generation Friction Materials .........................................................................17Next-Generation Electro-Mechanical/High Performance Brakes1: Next-Generation Brakes ......................................................................................182: High Performance Brakes ....................................................................................19Sensor Technologies ................................................................................................20Environmental Management ...................................................................................21Initiatives in Purchasing ...........................................................................................22Initiatives in Production ...........................................................................................22Initiatives in Logistics ..............................................................................................23Human Resources and Diversity ..............................................................................24Together with Local Communities ...........................................................................28Providing Safety and Security ..................................................................................29Initiatives to Raise Corporate Value ........................................................................30Corporate Governance System ................................................................................31Management Systems .............................................................................................35Conversation with the President and Outside Director ...........................................36Financial and Non-Financial Highlights ..........................................................................37Progress of akebono New Frontier 30 - 2016 .................................................................39Review of Operations ......................................................................................................42Review of Operations by Region .....................................................................................42Directors and Officers .....................................................................................................45Company Outline/ Investor Information ..........................................................................46Akebono Locations ..........................................................................................................47