SANGOGroup Report

2020

Manufacturing that creates harmony between the environment, people and goods
Inquiries:
Corporate Planning Division Governance, Sango Co., Ltd.
1-3-1 Mutsuno, Atsuta-ku, Nagoya-shi, Aichi-ken
TEL: +81-52-882-0035(Main) FAX: +81-52-882-3562

http://www.sango.jp/en/Message fromthe President

With the courage to change,
we will share the mission of Sangoand continue contributing to society.
President

Social role and responsibility of the Sango GroupIn the beginning of 2020, COVID-19 began its global
spread and exposed the world to an unprecedented
crisis. Although the automotive industry was alreadyexperiencing a major, once-in-a-century
transformation, this state of emergency has renewed
the sense that we cannot simply rely on conventional
beliefs to navigate turbulent times.
However, no matter the circumstance and so long as
this company exists, we must never forget our

Company CreedFY 2019 Review - 2030 Long-term Outline -mission. Our role and responsibility to society is"contribution through manufacturing" and we shallremain steadfastly dedicated to this core principle.

In FY 2019, steady progress has been made in line with the "2030Long-term Outline" management vision, which was formulated in
2018. In dividing our approach into three major areas, the main
results of the last fiscal year are shown to the right.
The long-term 2030 outline shown here and the results to date are
only excerpts. In fact, the Sango Group is carrying out a broad
range of activities in line with its long-term management plan,
ranging from management planning, development, manufacturing,and sales to work styles and greater progress toward further
expansion.

Hierarchy of Our Policies and Principles

2030 Long-term Outline

A corporate group that offers new value to non-automotive fields, achieving a safe, secure environment and way of life

Prosperity for our country, for our company

CompanyCreedand for ourselves
CSR Policy

With a steadfast commitment to thepreservation of our family-like bondand teamwork, and the developmentof our human resources,
manufacturing skills, andenvironmental policy, we shallpersevere in our challenge to create
Sango products that contribute to
global society.

01

SANGO Group Report 2020

Our accumulated knowledge and decisive action will pave the way for a new Sango GroupA corporate group where its employees and companies take on inspirational challenges to achieve new progressThree intertwined elements of prosperity

Corporate Principles

New approaches■ Development of a "circulation muffler", a heavy-duty
commercial vehicle muffler equipped with next-generation
technology■ Research on "construction pipe", a new business that utilizes
Sango proprietary technology
Maintaining existing business and building new business growth■ Establishment of "SAM", a new group company in Mexico andthe plant construction■ Expansion of sales to new customers (S Co., M Co.)
Business management innovation■ Renovation of Sango Toyota Technical Center’s 2nd Tech
Center, which integrates development teams■ Commencement of new working styles, such as using more
laptops in the office and introducing technologies atmanufacturing sites

SANGO WAY

Our philosophy, unchanged
since our foundation

New approaches

New products that utilize core technologies
Nonautomotive● Development of new products that utilize thermal management technologies● Development of new products that utilize forming and joining technologies

Corporate
Principles

Long-term 2030 Outline

The underlying principles shared
among all employees

Where we want to bein the futurePower train business (Exhaust system products)● For passenger cars:

Automobiles

Development of new products utilizing integrated / reinforced noise reduction,
emissions control, and thermal management technologies● For commercial vehicles:
Promotion of sales to multiple customers through innovative emissions control
technology

Chassis business (Drive system products, electric system products)

Fiscal year policies

Company policies
implemented in asingle year

● Development of new products based on Sango arsenal of forming technologies

Body components● Development of new products utilizing the Sango arsenal of pipe-related technologies

Maintaining existing business and building new business growth● Promotion of sales to overseas customers, while maintaining and expanding current business

Maintaining existing
through enhanced, superior cost competitivenessbusiness and building
new business growth● Maintaining and expanding precision steel products by enhancing processing techniques

Business management innovation

Greater global management● Management efficiency reforms through restructuring within the organization● Strengthening of group company business foundations and development of a global governance system

Expanded
Business functions to create new products

management● Enhancementof R&D functions (such as the Sango Group Toyota Technical Center)innovation of resources through selection and centralization, and active utilization of alliances with● Shiftingother companies

Major changes to create new working styles● Work process reform through the rebuilding of IT infrastructure● Practical implementation of work styles that will that will give employees both a sense of purposeand motivate them to take on new challenges in their work

SANGO Group Report 202002

Message fromthe President

these familiar terms, we will go no further than anextension of current conventions.
Our mufflers are equipped with functions that enable
them to purify the air as well as reduce noise at thesame time. If we consider the manufacture of emission
control devices rather than mufflers, this technology
need not necessarily be restricted to automotive parts.
We should consider how our technology can be used for
medical care, agriculture, and other fields, as well as formobility. In more familiar words, instead of saying
powertrain or chassis, we should stretch ourimagination and pursue the dream and potential of
secondary pipe processing technology. Thus, when
exploring how our technology can contribute tosociety, it is essential that we pursue flexible ideas
which go beyond conventions.
That is, Sango's future depends on the development of
human resources.

Located at Sango's Toyota Technical Center, the 2nd
Tech Center's R building renovation is the visualizationof one Sango innovation. The aim of the renovation is tospur the creation of new business and products, torespond to customers in a timely manner, and to foster
creativity by improving the office environment. For thisreason, development-related departments wereorganizationally consolidated in the center to accelerate
development capabilities. In addition, by providing officefacilities in line with such current trends as acollaborative work area, break area, and work area with
free-address seating, the R building has become adevelopment base that symbolizes "Sango—a company
known for its technology and taking on challenges".

planting long before many other companies and withlong years of experience in this area, these initiatives
have grown to include presentations to regional
communities at the behest of local governments andeducational institutions. It is at this moment, as society
struggles with the outbreak of COVID-19, that I cannot
help but reflect on "coexistence with nature." We arefacing the fact that there are things that exist in thisworld that go beyond human imagination. Japanese
used to feel the awe of nature. While feeling theneed to regain that respect for nature, we shouldtake pride in carrying out environmental activities—
represented by the tree planting that Sango has
been implementing.
This area also depends on the development of humanresources.

FY 2019 review - Promotion of CSR CSR is an eternal approach for Sango. In FY 2019, in
terms of society (S), we promoted the "Overseas
Trainee System", which sends young employees in their
20s to overseas facilities for training. In terms ofgovernance (G), we implemented a compliancepromotion month and other activities. For theenvironment (E), we set specific targets by formulating"The 1st Environmental Action Plan" as a strategy forachieving the Sango Environmental Challenge 2050.
In particular, having recognized the importance of tree

4th floor, R building at Sango's Toyota Technical Center

However, now that two years have passed since its
formulation, I think it is time for us to review some partsof the "2030 Long-term Outline". For example, the useof such expressions as "automotive parts" or the"powertrain business", "chassis business", and "bodycomponents business". So long as we continue using

CSR Policy

To be a company that contributes to society, is trusted, and grows sustainably

Three pillars
supporting the policy
Fundamental
approaches
Relations withstakeholders

E

S

G

Environment

Society

Governance

Environmental challenge

Higher customer satisfaction

Corporate governance

Human-friendly workplace

Participation in local communities

Compliance

Employees● A range of work-styles toaccommodate member
diversity and lifestyles.
● Development of a safe work
environment where everyone
can work with peace of mind
customers through innovativeemissions control technology.

03

SANGO Group Report 2020

Suppliers● Striving for mutual development

through strong partnerships
built on trust and fairness.

Customers

Local communities● Delivering satisfaction that● Actively participating in social

goes beyond customer
expectations through safe,
high-quality products.
● Development of products thatare friendly to people and theenvironment.

contribution activities as a good
corporate citizen andcommunicating with the local
community through dialog.
● Promoting manufacturing that isfriendly to the local environment.

Overseasystem

Trainee S

Planting tre

es at Toyoha

shi Plant

Imagining Sango in 10 years
Although we are currently facing difficult circumstances,
we should picture the next 10 years with a bright senseof hope. I believe our offices and plants will be evensmarter. However, behind the scenes of the sparklingclean plant along the visitor's route, I also want to see
the gritty, work-worn hands of a Sango embracing thehard work of manufacturing.
No matter how advanced AI or IoT becomes, there arethings that only people can do. And everyday life is built
by the hands of these people. As Sango is amanufacturing company, I hope that we candemonstrate the potential of our workplace byenhancing our core technologies, such as welding,stamping, secondary processing, and pipe bending,even if the products that we manufacture expand into
unknown areas.
Recently, I have been very interested in YouTube.
Until now, I have received my information fromnewspapers, TV, books, and the words of experts;
however I have found that the new media is abound withnew information. I believe that rather than how
correct an item is, the more knowledge you have,the better. The habit of picking up information on
your own volition is what is important, along withresearching it again on your own, and then thinking
about this information to lead you to an answer.
Through the accumulation of exciting efforts thatwill stimulate both the left and right sides of thebrain, I am looking forward to 10 years hence when
we see more and more self-reliant employees
paving the way for Sango's future.
Again, this will depend on the development of humanresources.
This period of once-in-a-century transformation and thecoronavirus shock have caused the collapse of concepts
that were once taken for granted, requiring that we build
new ones. Even the ongoing 30-year expansion of
globalization in Japanese corporations has come to a
halt. In all likelihood, the better path for the Sango
Group will be to change the conventional management
style to a different approach in the future–such as eachoverseas group company being managed
independently, rather than by the head office in Japan,
and the decentralization of sales management functions
at the head office, dividing them up between the head
office and group companies, even for group companies
in Japan.
Amidst such changes, as the Sango Group I want toconsistently share one passion and philosophy with all
employees. The unchanging spirit of "Contribution tosociety through manufacturing", which I mentioned
earlier, is in other words, the company creed.
Sango will continue to grow and develop freely, andalong with the local community, work to makebroad-ranging contributions to society.

SANGO Group Report 202004

Special Feature

Progress of Emission Control Dev ices for Trucks
Contributing to the Environment Through Emiss ion Control Devices

In the 1980s, factory emissions became a serious air pollution problem.
In addition, trucks on the road belching black smoke also began to gain attention as an air pollution

problem.

The Sango Group will continue working with truck manufacturers, as we take on the challenge of
becoming a world class manufacturer of environmentally-friendly diesel emission control devices.

■ Changes in emission regulation values for Particulate Matter (PM = black smoke) andexhaust system specifications (for heavy-duty vehicles)

1st generation
Noise attenuation muffler

DPF

Front pipe

Front of vehicle[Illustration of exhaust gas flow]
Removal of
NOX not
removed by
DOC(specializing in noise attenuation)

DOC(Diesel Oxidation Catalyst)

Removalof NH 3

Rear of vehicle

100■ DPF cross section

Nitrogen andwater

Exhaust gas(

Black smoke significantly
reduced by DPF

Tailpipe(Urea renders NOx (nitrogen oxide) harmless)2nd generation"DOC + DPF" muffler

60

Aqueousurea

Exhaust gas︵ ︶Percentage of PM emissions%

Clean emissions

3rd generation"DPF + Urea SCR system"
muffler

Black smoke emission
reduced significantly toa level lower thanregulation requirements

80(

CO andNOX
removalSoot
removalRemoved as
CO2 and N2
Stored in a filter, then burned andremoved as CO2

40

S-shape muffler

20

The start of regulations is used
as a point of reference

1974

1980

1990

1999 2000

2004

2005

Mass production of the 4th generation: tackling difficult manufacturing
processes and meeting high performance targets
We began collaborating with Hino Motors in 1998 to develop a diesel
engine vehicle exhaust system that would come closer to thecolorless emission of gasoline engine vehicles. In 2004, wedeveloped a system that dramatically reduced black smoke emission
by installing a DPF* in the muffler. The DPF temporarily stores theblack smoke until it can be burned off. Although we had to overcome
difficulties in assuring filter retention within the DPF, we were able tobring the 2nd generation system into mass production. Following this,
we took on the new challenge of developing the 3rd generation, which
we call the S-shape muffler. To ensure prompt decisions and swift
action, every week specialists from various Sango divisions would
catch the first bullet train of the morning to be in time for 10-hour
meetings with the customer in the Kanto (Tokyo) area.
05

SANGO Group Report 2020

This resulted in the adoption of items novel for that era, such asdifficult processing techniques for large stampings, welding processes
never attempted before and special ways to handle heavy items,
dozens of bolt and nut fasteners for each assembly, hydroforming offerritic stainless steel, and the use of super-stainless steel materials.
The weight of the finished assembly is 110 kg (for a 1.8 L engine).
Now Sango has moved on to the development of the 4th generation.
The finished assembly will be even larger, with a weight of 130 kg anda total weld length of 21 meters (about twice the weld length of the
3rd generation assembly). This time we are facing the challenges of
new difficult processing techniques, as well as short prototype leadtimes, as we dedicate our utmost to the development of this new
product. * DPF: Diesel Particulate Filter

2009

2010

1%

Message fromthe Designer

Advanced Design G, Engineeringand Sales Department

Takaomi Kamiya

4th generation
under development

2015

2016

The Hino Motors policy of equipping trucks andbuses with DPFs was initially proposed in 2001.
Although their vehicles were still able to meetemission regulations without a DPF, I was deeply
impressed by the fact that everyone at Hino,
including then-Chairman Jagawa, was determinedto pioneer the introduction of a DPF on the market.
Sango was simultaneously awarded business forexhaust systems and DPF mufflers from heavy
duty down to light duty trucks. Looking back on it
now, I can’t believe we started this developmentwith just three people.

2020

2025

(Year)

During development, there were many times when
we were unable to achieve acceptable results.
Our boss encouraged us by saying "Now is thetime to work especially hard. Doing so now will
make the next five years easier.” Believing his
elegant fabrication, we worked very hard. In spiteof the challenging situation, we were able to takeon the work in a positive way, thanks to thecooperation of everyone involved. With pride in thecontribution our products can make to theenvironment, I hope to continue our work together
in development.

SANGO Group Report 202006

Special FeatureGroup Company Activities

青森

八戸

Production base for truck products Sango Kanto Co., Ltd.
Emission control devices for installation on diesel trucks are assembled at Sango Kanto in Shimotsuma

City,

Ibaraki Prefecture and delivered in a steady stream to such truck manufacturers as Hino Motors andIsuzu Motors.

The following explains the manufacturing processes used to produce diesel
truck emission control
秋田

盛岡

devices, which play a vital role in the Japanese logistics sector.

Manufacturing process
Company Profile

History

Company Name Sango Kanto Co., Ltd.

November 2008 Sango Kanto Co., Ltd. established
Capital: 95 million yen

Representative

President

Address

304-0005
1100-5, Hanya, Shimotsuma City,
Ibaraki Prefecture

Established

November 2008

Capital95 million yen

Sales33,311 million yen (as of March 2019)

Isao Hasebe

July 2009

Operations begun at Sango Kanto Co., Ltd.
Head office: Hino City, Tokyo Metropolis
Plant: Iruma City, Saitama Prefecture(on the premises of SOHSHIN Co., Ltd.)March 2010

Production begun for "urea SCR", an emission control device
for heavy-duty trucks

May 2014

232 (as of March 2019)

Main business
partners

Hino Motors Co., Ltd.
Isuzu Motors Ltd.,
Nissan Motor Co., Ltd.
Subaru Corporationand others

仙台
新潟Completed new plant in Shimotsuma City, Ibaraki Prefecture
Head office: Relocated from Hino City,
Tokyo to Shimotsuma City, Ibaraki Prefecture
Plant: Relocated from within SOHSHIN Co.,Ltd.
to Shimotsuma City, Ibaraki Prefecture

Main Production Exhaust system parts
Items
Number of
employees

山形

福島

May 2017

郡山

長岡

Plant within Hino Motor Co., Ltd. premises relocated to
Sango Kanto head office plant.

上越 Urea line transferred from Sango Mie Co., Ltd.

January 2018

岐阜

Gunma
Prefecture

松本

SaitamaPrefecture

甲府

Tokyo

Tochigi
Prefecture
IbarakiPrefecture

Sango Kanto
Co., Ltd.
Chiba
Prefecture路

TOP Message

大阪

大津

奈良

神戸
和歌山

島

President

Isao Hasebe

07

SANGO Group Report 2020

名古屋
Contributing to a cleaner environment in the logistics sector
with aftertreatment systems for heavy duty commercial vehicles
Sango
its
we have been promoting the creation of a
津 Kanto, which marks its 12th year since静岡
establishment as a truck production company, andmarks its 6th year since thelaunch of the current
浜松
plant in Shimotsuma City, Ibaraki Prefecture, is
one of the youngest companies in the Sango
Group. We manufacture and supply Aftertreatment
Systems (ATS) for heavy duty commercial vehicles
mainly to Hino Motors and Isuzu Motors.
Originally, lines related to manufacturing were
scattered over areas that included customer
premises and Sango plants. In 2008, weconsolidated them in Shimotsuma, and since thenproduction system with better quality andefficiency. In 2019, the "Kanto Sector" wasestablished within the Sango organization. In
anticipation of expanding sales in the future, wehave created a single team with clearly establishedroles in sales, design, production engineering andmanufacturing, as we take on the challenges of
establishing the technology required for developing
and producing ATS products for heavy duty
commercial vehicles and take advantage of thebenefits of our Kanto region location.

Under a strong spiritof unity, our team iscommitted toproviding better products for ourcustomers, with care taken for absolutesafety and quality first an everyday custom.
Because I am mainly in charge of
assembly lines, I pay particular attention toquality. Our workplace has many womenand foreign members, and with their
excellent teamwork, this is a workplacewith high job satisfaction.

Inspection

Ryousuke Uki

My job is to checkquality by carryingout assembly leaktesting (a test to detect air leaks).
Although this means that there is somepressure to ensure that we do notinconvenience the customer, it is a
rewarding job. In the future, together withmy supervisors and colleagues, I hope totake on more and more new challenges
beyond the scope of the current work
processes I have been given.

Shipping
Inspection group,
Inspection Division,
EG Department

2nd Assembly Division,
1st Manufacturing Department

Isao Yoshizawa

米原
京都

Welding / assembly

Mufflers

2nd Assembly Division,
1st Manufacturing Department
Group leader

富山

金沢

福井

Pipe bending

Shodai Ochiai
My main job duties include newpart measurements and 100%part inspections, as well as thestudy of component part dimensions using the CMM(coordinate measuring machine). This is my 6th year at
Sango. At first, I struggled with reading drawings andthe different dimension specs for each product, but inthe end, I was able to learn my job by asking mymanager whenever I didn't understand something. Our
work may seem rather unglamorous when compared tothe manufacturing department, but I have a strong
sense of responsibility in our role as the last bastion for
upholding quality.

Main products■ Engine system parts■ Mufflers for trucks

Exhaust manifolds

Large (S-shaped)

Medium (I-shaped)

Small (L-shaped)
SANGO Group Report 202008

Company Profile
Company name Sango Co., Ltd.

Main Products

Representative

President Kozo Tsunekawa

Head office

1-3-1 Mutsuno, Atsuta-ku, Nagoya-shi,
Aichi-kenFoundedJune 1, 1928

Incorporated

June 1, 1950

Capitalization

Customers

608 million yen

Main Banks

Sales composition
by business field*

Sales (Consolidated)

Mufflers, exhaust pipes,
exhaust manifolds, vehicle body products,
door impact beams, other automotive parts,
cold forged products, cold finished steel bars,
drawn pipes, carbon steel pipes for mechanical structures,
machined / ground steel bar products

Secondary steel processing(Billion yen)
500.0

4,253

400.0

Toyota Motor Corporation, Hino Motors, Ltd.,
Daihatsu Motor Co., Ltd., Nissan Motor Co., Ltd.,
Mitsubishi Motors Corporation, Isuzu Motors, Ltd.,
Subaru Corporation, Mazda Motor Corporation,
Toyota Industries Corporation, JTEKT Corporation,
KYB Co., Ltd., Toyota Tsusho Corporation,
Sumitomo Corporation, Asai Sangyo Co., Ltd.,
Metal One Corporation, Canox Corporation (random order)

Sales composition
by region*

3,880

3,802

13％

4,019

4,045

China
Asia Pacifc

13％

10％

300.0
200.0

Automotive parts

0

2015

2017

2016

2018
2019
(Term that ended in March)

54％

23％

87％

100.0

Japan

Europeand theAmericas*Results for Sango Co., Ltd. and consolidated subsidiaries for FY 2019.

MUFG Bank, Ltd., Sumitomo Mitsui Banking Corporation

Global Network
95

Domestic facilities
and companies
D
STI

1

B ASCII TSC

Toyohashi Plant

K XSC

6

J
GSC

E
SIAP

A ASI

6

Inabe Plant, Komeno Plant

2

7

1

H
SID

10

7

Nisshin City

10
Head Office (ECO 35)

C SAM

11

F
YSP G
STA

12

5

2

8

Togo
Town

4

Miyoshi City

3

KariyaCity

Fukuta Plant

Miyoshi Plant

Sanpuku Co., Ltd.

3

8

11

B

D

F

H

Toyota CityJ

Overseascompanies

09

Toyota Technical Center

Miyoshi No.3 Plant

Sango Kanto Co., Ltd.

4

9

12

Yawatayama Plant

Sango Hokkaido Co., Ltd.

TTI Co., Ltd.

SANGO Group Report 2020

Canada／ASCI

Turkey／STI

Thailand／YSP

Indonesia／SID

China Guangzhou／GSC

A

C

E

G

I

K

United States／ASI

Mexico／SAM

India／SIAP

Thailand／STA

China Tianjin／TSC

China Yangyang／XSCCountries where companies
receiving Sango technicalassistance are located
MexicoVenezuela
BrazilArgentina
India
Malaysia
Indonesia
TaiwanUK
Czech Republic, Portugal
Spain
South Africa

SANGO Group Report 202010

Product overview
Exhaust system

Body, chassis[Exhaust manifolds]

Single wall tubular manifolds

Air gapa manifolds[Exhaust system parts][Heat recovery devices]

Exhaust control valve

Heat collectors

A-pillars

Roof side rails[Emission control devices]

Catalytic converters(made using spin forming)

For smalldiesel vehicles

Floor cross members

Radiator supports

Front floor reinforcements

Door impact beams

Cross members

Door hinges[Mufflers]

Spin-formed sub-muffler

Produced with
cutting-edge production
technologies
Dual mode mufflers(internal valve)

Products

Drive system products

Reduction gears

11

SANGO Group Report 2020

Precision steel

Differential
intermediate shafts

Propeller shafts

Cold finished bars

Carbon steel pipes formechanical structure
purposes

Cold finished bars
(drawn)Steel wire for cold heading
and cold extruding (drawn)

Cold forged products

SANGO Group Report 202012

Environment

A look at Sango by the numbers

ESG | Environment

Enviroment

Commitment for environmental initiatives
Long-term environmental vision: Sango Environmental Challenge 2050
Total amount of
CO2 discharge

126,263t*1

Total number of trees planted

288,794

Total amount of CO2
absorbed / sequestered asa result of planting trees

Towards a better global environment in 2050, Sango Group will strive for a balance in economic growth andpreservation of the global environment. For the realization of a sustainable society, the Sango Group will work on
5 challenges aimed at creating 3 areas of value.

309

CO2

Governance

CO2

Reduction of environmental
burdens through businessactivities

Environmentally responsible
production sites(including 1 external director)

7

Auditors(including 2 external directors)

5Frequency of Board of
Directors meetings

16times/year

Board of Directors
meeting attendance rate

93.5％

CH

PL

CT

O

Purpose

Waste
Overburden

Unevenness

D

A

ISO14001

Number ofwhistleblowing cases

28 /year*21,850 /year*1

Preservation of biodiversity and protectionof our natural environment to realize asociety where humans and nature co-exist
in harmony.
・Tree planting
・Elimination of invasive species● Number of trees
plantedCurrent record

7,106

*1

Ratio of female
employees

Average age

6.9％

40.6

5

*2

Average number ofyears at the company

16.9

*2

290,000 trees

Tree planting

1

Minimization of
new vehicle CO2
emissions

350,000

2.1％*2(from September 2019)
Created a medium-to
long-term plan for the
Sango Group andcommenced operations

139

Rate of return to work
after maternity leave

0.07％

100％
*2

Number of training courses

52

Number of workers who have acquireda National Trade Skill Test & Certification qualification

284

STEP

1 Implemented

Training tour ofgroup companies

STEP

・Utilization of exhaust heat・Weight reduction

2

Check of management
statusSTEP

Total CO2
emissions

128,568

Reduction of discharge(CO2, waste, chemical
substances, water, etc.) inall business activities

Based on the structure for promotion shown on the right, wecreated an implementation plan to roll out our activities in theentire corporate group, both in Japan and overseas. As a firststep, we provided training in the "Sango Environmental Challenge
2050" for the entire corporate group. Afterwards, a questionnaire
was carried out, and the results showed an
Questionnaire averagescore for understanding
improvement in environmental awareness
100
90.3
68.4
among our employees. In the following
50
steps, we will check on the status ofenvironmental management through0
BeforeAftertraining
genchi-genbutsu (Go, see & study).
Implementation plans

Number of educationalcorrespondence courses

Ratio of females
in management

by improving fuel efficiency

Exhaust heatrecovery device

t-CO₂● Consolidated management by the Sango Group

79,487
2016

Taking on environmental
challenges in group-wide activities
ate Employment rof
persons with a disability→ Contribute to CO2 reduction

Minimization of
production activity emissions(CO2, waste)

in 2028,

Reduction of emissions andwaste from production activities
through innovations in
manufacturing methods

Development and design of highvalue-added products that contribute to
the customers' environmental values.

2

2050

5 Challenges
Creation of asociety in harmony
with nature

3

3rd Challenge

2nd Challenge

Sango
Environmental
challenge4

1st Challenge
Development of products
and technologies that areenvironmentally-friendly
throughout their life cycle,
from material procurement
to design, manufacturing,usage, disposal, andrecycling.

Minimization oflife cycle CO2
emissions

Establishment ofan environmental
management system

4th Challenge

Number of employees
trained in security

SocialNumber of employees

Environmentally-friendly
through our products

Creation of an environmental management
system, control of environmental risk, and theprevention of contamination in conjunction with
continuous improvement.
(enhanced operations and management)
N
A

Preservation of thenatural environment

Contributing to the sustainability ofsociety and customers

5th Challenge

K
EC

Directors

CO2

Expansion and creation ofmarkets for products that
contribute to the environmentt

Total waste

6,155

40%

3,624

reduction

2030

2016

35%

reduction

2030

Sango Board of Directors
Environment Committee

Sango

Domestic affiliates

Overseas affiliates

Energy and resource savings in design and development

Product Development：Environment
Committee

Energy and resource savings in production preparations：Methods Committee

Energy and resource savings in manufacturing：Committee

Environment Innovative Production
Environmental Impact Reduction

Company environmental preservation activity (Tree planting)：Harmony with Nature Subcommittee

3

Sharing improvement
examples (“Yokoten”)

Function departments / Function meetings(See P17 to 18 for the activities of each subcommittee.)*1 Results for Sango Co., Ltd. and consolidated subsidiaries for FY 2019. *2 Results for Sango Co., Ltd. and Sango Corporation for FY 2019.

13

SANGO Group Report 2020

SANGO Group Report 202014

Environment

ESG | Environment

Targets in 2022: The 1st Environmental Action Plan (Mid- to Long-Term Environmental Action Plan)
To achieve the long-term environmental vision, or "Sango Environmental Challenge 2050", specific mid- to long-term targets and action plans

were summarized in the 1st Environmental Action Plan.

●Activities for the Sango Group 1st Environmental Action Plan (mid- to long-term environmental action plan)
Category

Expansion and creation ofmarkets for products that
contribute to theenvironment
Reduction of environmental burdens through business activities
Preservation of
the natural environment
Reduction of environmental burdens
through business activities

15

Five challenges for the "2050 Environmental Vision"

to minimize
1 Challenge
life cycle CO emissions
2to
2 Challenge
minimize newvehicle COemissions3

4

2

Challenge tominimize
production activity
emissions(CO2, waste)

Challenge tocreate a society
in harmony withnatureto establish
5 Challenge
an environmental
management system

SANGO Group Report 2020

Actions for business risks and opportunities

Specific items to be implemented

Development of products and technologies that are environmentally-friendly throughout their life cycle,
from material procurement to design, manufacturing, usage, disposal, and recycling.
Development anddesign of highvalue-added
products that
contribute tocustomers'
environmental value

Reduction ofemissions andwaste fromproduction activities
through innovations
in manufacturingmethods

Preservation of
biodiversity andprotection of our
naturalenvironment torealize a society
where humans
and nature
co-exist in harmony

Creation of anenvironmental
management system,
control ofenvironmental risks,
and the preventionof contamination in
conjunction withmakingcontinuous
improvements(enhanced
operations andmanagement)○：Target achieved
Target value for FY 2022△：Still some issues, but target expected to be achieved in 2022

Target value for FY 2019

×：Not achieved
Progresslevel

Results for FY 2019

Receive an external Environmental Promotion Award

Submit entry for the External Environmental Promotion
Award

Made a presentation at the final selection for the Supplier Awar○

Product development that contributes totop-class fuel efficiency

a. Product weight reduction
b. Development and mass-production of new products that utilize
exhaust heat

Achieve 100% of each development goal
Develop at least two new items(1) Carry out weight savings for each project in each field which
has a mass-production project, monitor the fuel efficiency
percentage, and share the status on a regular basis(2) List development items in each field and regularly
check progress / share status(1) Summarized the amounts of CO2 reduction in September andFebruary, and confirmed good progress(2) Checked item progress in June, September, December andFebruary. Each item is on track at this point○

Promotion of product development for
next-generation vehicles

c. Development and mass-production of thermal management
products for next-generation vehicles

Develop at least one new item

Move forward with an item chosen from (2) that can be
developed for a mass production project(2) Development is under way for a heat exchange system fornext-generation exhaust heat utilization and electric vehicles,
and it is making good progress○(1) Promotion of development for low CO2
innovative production technologies

d. Reduction of processes for newly introduced equipment,enhancement of productivity, making products simpler, slimmer, andmore compact, etc., and promotion of development for production
technologies that can reduce CO2 emissions

Planned CO2 emissions reduction: -40%
(compared to benchmark)Note: The target value is the reduction ratio compared tothe manufacturing method in the benchmark year
(around 2013)

Planned CO2 emissions reduction: -30%
(compared to benchmark)* Initiatives for reduction items and their implementationin each product group (business): At least one item

-36% (average value of target projects for each item)
Main reduction items: Making equipment simpler, slimmer andmore compact○(2) Promotion of development for low waste
production technologies

e. Promotion of development for production technologies that can reduceusage of cleaning fluid in newly introduced equipment, and reduce
wastewater discharged from the cation coating line, etc.

Planned waste reduction: -30% (compared to benchmark)Note: The target value is the reduction ratio compared tothe manufacturing method in the benchmark year
(around 2013)

Planned waste reduction: -30% (compared to benchmark)Improvement to washing equipment for cross members(machine change) → -75%
Reduced wastewater discharged from the cation coating line
(introduced pressure flotation processing equipment) → -99%○

f . Thorough elimination of waste when using energy▶ Activities for eliminating air leaks▶ Activities for turning off power to equipment when not in operation

Reduce power consumption to less than 50%
during lunch breaks (compared to peak power usage)(an average of 68% benchmark in 2018)

Power consumption during lunch breaks(compared to peak power usage): 63%

Power consumption during lunch breaks(compared to peak power usage): average of 62% for April to
January○g. Identify energy consumption per process and product, and promotionof reduction activities

Energy consumption per item: -5%

Set energy consumption in PKW

Identified energy consumption per field○h. Introduction of energy-saving equipment with a high return on nvestment
i . Renewal of old equipment

Always install a "Top Runner"**Top Runner: Japanese standards for energy efficiency
standards. Products meeting the standards are labelled"Top Runner".

Systematic equipment renewal plan for 26 equipment units

Implemented update for 25 units.
Changed air conditioning over to large fans△

Promotion of the use of renewable energy

J. Consider expanding areas for introduction of renewable energy,
in accordance with economical efficiency and CO2 reduction effects

Introduce a centralized monitoring system

Introduce the system to Inabe plant

Postponed this year due to management strategy△

Reduction of waste in daily production
activities

k. Introduction of equipment for reducing oil-containing wastewaterl . Introduction of waste treatment equipment for hydrochloric acidOil-containing wastewater: -20%
Hydrochloric acid waste: -20%(compared to 2016)

Introduce equipment for reducing wastewater discharged
from the cation coating line
Renew the hydrochloric acid waste handling equipmentat Miyoshi plant

Reduced to 1/10th (20 → 2 ㎥ per month)Updated in October○

Reduction of water consumption and waste
in the production process

m. Consideration for water use reduction activities, taking into account the waterconditions in each country and region
Effective utilization of water resources, use of stored rain water, and promotionof water conservation

3% reduction in water consumption (compared to 2017)

Implement a survey of actual conditions

Received actual data monthly○

Management and reduction of environmentallyhazardous substances

n. Strengthening of the management of chemical substances contained in
products

Do not use prohibited substances

Do not use prohibited substances

Did not use prohibited substances○(1) Tree planting activities aimed at increasing theamount of CO2 absorbed / sequestered (*)(target: 350,000 trees)(*) Amount of CO2 absorbed / sequestered is a value
calculated by the Company's calculation formula,which corresponds to CO2 absorbed by planting
trees

o. Support and guidance for the promotion of tree planting at each group company
p. Cooperation regarding "creating native forest for life 2020"
q. Consideration for tree planting in cooperation with the government

・Total number of trees planted: 323,000
・Amount of CO2 absorbed / sequestered: 459 t (total)

・Target for trees planted in FY 2019: 19,951 trees
・Target for trees planted in total: 286,931
・Total amount of CO2 absorbed / sequestered: 308 t・Actual result for trees planted in FY 2019: 21,814
・Actual result for total number of trees planted: 288,794
・Total amount of CO2 absorbed / sequestered: 309 t○

r. Growing seedlings for areas affected by the Great East Japan Earthquake(Will end in May 2021)

・Total number of shipments: 22,000 seedlings
・Amount of CO2 absorbed / sequestered: 23.8 t (total)

・Scheduled number of shipments in May: 1,000 seedlings
・Amount of CO2 absorbed / sequestered: 0.21 t・Actual result: 1,354 seedlings
・Amount of CO2 absorbed / sequestered: 0.43 t○(2) Conservation of the natural environment throughthe development of a biotope within the company
premisess. Promotion of conservation of the natural environment through the developmentof the ECO35 biotope and rice fields
t. Promotion of conservation of the natural environment through the developmentof Yawatayama's biotopes
u. Promotion of conservation of the natural environment through participation in
activities related to All Toyota Harmony with Nature Working Group
Conservation of the biotope ecosystem at Yawatayama Plant for"a plant that coexists with nature in harmony"

Fully promote the maintenance and management plans

Fully promote the maintenance and management plans

Promoted as planned○

Fully promote the plans for All Toyota Harmony with
Nature Working Group(scheduled for 2021)

Fully promote the plans for All Toyota Harmony with
Nature Working Group(scheduled for 2021)

Started the development of a biotope at STA
Scheduled to be completed in September 2020○

No abnormality complaints

No abnormality complaints

There was 1 abnormality complaint(It was a minor abnormality complaint (within regulation values),
and measures were taken)

×

Visit each group company or plant once a year
Hold global environmental meetings

Create periodic audit check sheets for group companies(or plants)

Completed periodic audit check sheets for group companies(or plants)○

Hold a briefing for suppliers once a year

Hold a briefing for suppliers in March

Held in May○

aa. Further enhancement of the provision of environmental-related information▶ Continuous issuance of the SANGO Group Report▶ Update of the homepage
bb. Communication with the government office and local residents

・Issue the group report and post it on the homepage
once a year
・Hold events regarding harmony with nature for thegovernment and civic groups

・Issue the group report and post it on the homepage
once a year
・Hold the events three times a year

・Issued in July and posted on the homepage
・Held report sessions at the Biotope Association in June, for the
Aichi Prefecture student project in February, and for the City of
Nagoya Board of Education in February○

cc. Improvement of external evaluations and corporate image by actively
publicizing information

CDP Supply Chain Program: Acquire "Rank B" forclimate change and water

Acquire "Rank C" for climate change and water

Acquired "Rank B" for climate change and "Rank C" for water○

Reduction of CO2 emissions in daily production
activities(mass production lines and infrastructure)(3) Environmental conservation activities incooperation with outside parties
Compliance with the environmental laws of different
countries and regions and implementation ofenvironmental accident prevention activities
Sango Group periodic audit of environmental
activities
Promotion of environmental activities in collaboration
with business partners

Proactive disclosure of environmental informationand enhancement of communicationv. Periodic check on the status of compliance with environmental laws
w. Periodic check on the status of preparations for emergencies
x. Development of people who have environmental awarenessy. Implementation of a factual survey regarding the status of environmental activities, checking on
the effects, and sharing information for improvement across the company(check on the activities throughout the entire corporate group's plants, both in Japan and overseas)z . Promotion of green procurement to all suppliers▶ Requests for establishment and operation of an environmental management system▶ Management and reduction of environmentally hazardous substances containedin materials and parts

SANGO Group Report 202016

Environment

ESG | Environment

Initiatives for energy and resource savings in design and development

Biodiversity [Harmony with Nature Subcommittee]

Challenge to minimize new vehicle / life cycle CO2 emissions [Environmental Product Development Committee]

Environmental conservation initiatives

In order to reduce CO2 emissions through such measures as reducing theweight of next-generation products and improving fuel efficiency in vehicles
through newly developed items, we are moving forward with the developmentin each product group, including exhaust systems, exhaust manifolds and bodycomponents. Although our focus is on automotive part weight reduction, we arealso applying our knowledge in thermoelectric generation for automotive
exhaust systems to utilize exhaust heat from the annealing furnace at Miyoshi
Plant to generate thermoelectric power. Data obtained from experiments
concerning durability and the amount of power generated, etc., will be used tosolve future problems and contribute to the minimization of CO2 emissions.

Begun in 2006, Sango has been carrying out tree planting activities for 14 years, withthe total number of trees planted reaching 288,794 at the end of FY2019. These tree
planting activities are also being expanded outside the company—for example,
in China, GSC had a tree planting event at a closed uranium mine site, and in Turkey,
STI’s event was in an industrial park area. By subscribing to tree planting methods
taught by Dr. Akira Miyawaki, Professor Emeritus at Yokohama National University,and with the "Forest of Life 2020↗" activities to expand Japanese tree planting culture
worldwide, we have implemented tree planting activities at each plant and groupcompany in Japan and overseas. Sango will also continue such environmental
conservation activities throughout the company in the future.

Thermoeslectric generator

the end(AsofofFY2019(
226,560

153,221
9,510

2006

33 pe
op
ipate led to p
2,000
lant
trees
!

particInitiatives for energy and resource savings in production preparations

288,794●Number of trees
planted

2013

2016

2019

71
partic 4 people
ipate
d to p
1,250
lant
trees
!

Approach for reduction of wastewater discharged from the cation coating line [Environment Innovative Production Methods Committee]

Battery clamp (used in the Toyota Prius and many other vehicle types)
Employees from GSC (closed uranium mine site, Xinfeng, Shaoguan City, Guangdong)

Employees from STI (TOSB Industrial park)

Removal of invasive alien species (Coreopsis lanceolata)

Waste (tons)

Sango carries out an in-house cation coating process for the battery clamps
we produce. As the washing process uses a large amount of water, we weresending at least 100 water drums a month to an industrial waste treatmentcompany, which had a negative impact on the environment.
To improve this situation, new pressure flotation water treatment equipment
was introduced in FY2019. With this, we commenced a new treatment
method that separates wastewater into water and oil/sludge. As a result, the
20 to 30 tons of waste (wastewater) which was
generated on a monthly basis was dramatically30
26
reduced to only a small amount of sludge. At the97%
20same time, the treated water fell within
reduction
10
environmental standards, and it is now possible to0.8
discharge it into rivers. This has led to significant
0BeforeAfter
improvement
improvement
improvements in environmental impact.

In May 2019, the 4th Coreopsis lanceolate (or "tickseed") removal campaign
was held at the Sugo River embankment located north of Miyoshi Plant.
This time, 231 people worked together to eliminate 1,070 kg of the Coreopsis
lanceolata. Because its aggressive growth drives native Japanese species
out, the flower is designated as an invasive alien species. To prevent thefurther spread of alien species into Japan, we will promote activities incooperation with local communities and government.

Pressure flotation water treatment equipment

Initiatives for energy and resource savings in manufacturing* FY2020 event canceled due to the novel coronavirus
People from the Donguri-no-kai in the Miyoshi-Kami Administrative
District also participated

Reduction of CO2 emissions and waste volume in production activities [Environmental Impact Reduction Committee]
Because the production process uses many resources, including electricity,water, and oil, each plant has taken up a number of activities to reduce CO2
and waste generated by resource consumption.
●Switching power off
All equipment power is switched off during non-operating hours, such as
during lunch breaks, to reduce the CO2 emitted by power generation.
●Reducing compressor air leaks
In production facilities, compressed high-pressure air is used for clamping
and handling parts. Air may leak at the air compressor hose joints, and if
ignored, the compressor will be constantly operating. In order to reduce
operating hours, power consumption, and CO2 emissions, intensive
inspections for leaks are conducted.
●Reducing the amount of wastewater through waste fluid treatment
As waste fluid discharged by production equipment contains a large amountof water, removing the water content from this fluid reduces the waste fluid
from the equipment.

17

SANGO Group Report 2020

● Introduction of power usage visualization systems
Centralized monitoringof power at eachplant and officeServerTOPICSCan be compared tothe previous day.

Presentation made at the Aichi andNagoya Biodiversity EXPOIn January 2020, a kick-off event for the Olympic Torch Relay,"Connecting the 'United Nations Decade on Biodiversity' to the
Future –The Aichi / Nagoya Biodiversity EXPO –" was held at the
Nagoya Congress Center. The Ministry of the Environment and theJapan Committee for the UNDB collaborated with Aichi Prefecture
and Nagoya City on the EXPO, where under the title, "Urban Oasis
ECO 35", Sango made a presentation about the ECO 35 conceptof reviving and restoring a green environment on an old factory site
and the actions taken to accomplish this. Sango will continue towork toward the realization of a society that coexists with nature inharmony.

Presentation made by Keiko Ikegami, Public Relations G,
Corporate Planning Department

SANGO Group Report 202018

Society

ESG | Society

Quality improvement for customers

Work-style reforms
Developing worker-friendly job sites

Workplace stimulation through WAY² activities
External presentation[Manufacturing division]Company-wide presentations (twice a year)[Technical division]Company-wide presentations (twice a year)

Technical, Inabe Plant

Technical, Toyohashi
Plant

Technical, Miyoshi Plant

Technical, Toyota 2nd
Technical Center

Technical, Yawadayama
Technical Center

Technical, Yawatayama
Plant

Technical, Fukuta Plant

Manufacturing, Prototype
Production Div.

Manufacturing, Miyoshi
Plant

Manufacturing, Inabe
Plant

Manufacturing,
Toyohashi Plant

Manufacturing,
Yawatayama Plant

Manufacturing, Fukuta
Plant

In Sango, we promote QC circle activities that are referred toas "Way² activities." The "WAY" in "WAY² activities" is acombination of Japanese words that mean "circle" (the"WA") and "Let's do it!" ("Yaromai" = the "Y"). So, "WAY²
activities" means "Let's enjoy doing QC circle activities!"
We aim to stimulate workplaces (demonstrate workplaceskills) by forming circles at each workplace, having front line
workers play leading roles, and bringing minds together tosolve workplace issues and problems.

In aiming to create a worker-friendly job site, we need to be able to solve daily problems that occur, create a workplace
where employees can work with peace of mind, and make it so workers can demonstrate their skills more effectively.
The following explains current and future initiatives to this end.

Balancing work and childcare

With the expansion of the maternity leave program and new establishment of a return-to-work system, Sango is enhancing
its systems for those with children. We will continue to promote initiatives to create a workplace where employees can workfrom any location.

Enhancement of discussions
at the workplace●Re-employment process
Currently, round-table meetings areheld by both labor and management
at workplaces. Through thesemeetings, we will promote initiatives
to solve problems and issues
concerning compliance, etc.

Spoma Circle

Actively taking on the challenge of participating in external presentations
Company-wide presentations are held to provide an opportunity to report on the results of daily activities and share
information. Each circle belongs to one of the above blocks, and circles selected from each block's presentation participate in
the company-wide presentation event. A circle achieving excellent results for its presentation may also participate in an
external presentation event as a representative of Sango. In FY2019, the four circles mentioned above took on such achallenge. At the 6141st QC Circle Mini Presentation, the Spoma circle from the Inabe Plant made a presentation on"Reduction activities for handling heavy objects related to quality checks." They received an "Impressive Presentation
Award", which is given to the most outstanding Circles of the event.
By stimulating workplaces through WAY² activities, we will achieve a cheerful and rewarding work climate.

April

Remarks

Retirement

評 価

・Well-planneddevelopment and issues in eachdepartment.
・Based on ability, aptitude, etc.,
re-employment job content is clarified.
・Direction provided for the enhancementof necessary knowledge and skills.

Other
departments

・Review re-employment candidate's
experience, knowledge, and skills.

・Identify potential contributions of thecandidate to candidate dept’s
development of human resources

・Supplement areas that the candidate

lacks for the re-employment position.

Information
on re-hired
employees

Coordinate with otherdepartments as necessarytransfer of re-hired
employees((

Work as are-employed
memberhuman resource
development(education of
successors) ineach department.

・Due to thechanging needs
in eachdepartment,
conduct periodic
discussions andrespond asnecessary.

・Information on

re-hired employees,
such as career andqualifications.

In addition, we have programs such as the "long-term nursing care leave program" for employees who provide long-termcare for family members. Through these programs, we are creating a system so that employees can work at Sango for as
long as they want to, in a way that suits their home circumstances.

Quality awards from our customers

Cross-discipline gathering of employees to discuss and implement ideas (renovation of the 2nd Technical Center)Out of 169 companies, Sango was one of the 25 companies recognized by Toyota Motor Corporation with a QC ExcellenceAward for our active efforts in quality control activities. In addition, Toyota Motor East Japan recognized Sango with a
Certificate of Appreciation for our active efforts in quality control to achieve fiscal year targets. From Nissan Motor, we
received the "Global Quality Award", which is awarded to only one company worldwide.
We will continue to improve
our quality so that we candeliver good products to ourcustomers.

At the end of March, the renovation of the 4th and 5th floors of the 2nd Tech Center (R building) at Sango's Toyota
Technical Center was completed for the purpose of developing new products, enhancing R&D functions, and a majortransformation to new work styles, which was set forth in "New approaches"and "Business management innovation" in the Long-term 2030 Outline.
Through many surveys and workshops, six project members who were selectedfrom relevant departments set up five areas: the work area, concentration area,
CAD/CAE area, library, and break (i.e. "re-charging") area. With a layout thatutilizes laptops and a free address seating system, we created an environmentthat crosses the boundaries of departments, so that everyone can think
together and carry out tasks. The integration of the Advanced Technology
Division, Body Components and Precision Steel / Chassis fields, thePerformance Testing Department, and the Stamping Division in this attractive
workplace will promote work style reforms that lead to a speedier development"Collaborative area" where employees can enter freely from five areas
process.

From Toyota Motor Corporation

19

January

Re-employment
job decided
Re-employment
candidatesUneven Circle[Manufacturing]
Inabe Plant

Periodic discussion

YYY Circle[Technical]
Toyohashi Plant

April

January・Summarization of human resource
Superior

Grand Line Circle[Manufacturing]
Fukuta Plant

April

Year of retirement(60 years old)

Jobs for
Organization of jobs for the re-employedre-hired
employees

Department[Manufacturing]
Prototype Div.

One year before retirement(59 years old)

Companywide

Establishment of there-hiring system
Since FY2020, we have revised our
re-hiring system—now M-level
employees (executive, management,
and professional roles) andmanagers who will be re-hired candiscuss post-retirement jobs at an
earlier stage. With regard to suitableworkplaces, we will also introduce asystem to share information with all
departments in the company about
employees who will reach theretirement age. By sharing thisinformation, we can offer a broad
range of work opportunities.

Two years before retirement(58 years old)SANGO Group Report 2020

From Toyota Motor East Japan, Inc.

From Nissan Motor Co., Ltd.

SANGO Group Report 202020

Society

ESG | Society

Multi-level training programs

Industrial safety and healthTrainee program

Aiming to obtain certification as a corporation with outstanding health management

The trainee program is an educational system that sends young employees intheir twenties to overseas affiliates for six months to one year, where theyreceive language and practical training. This program aims to develop humanresources at an early stage in their careers, by teaching language skills, andproviding a global vision and experience. Even after returning to Japan,
employees who took part in the program have been playing active roles on a
global stage by taking advantage of the networks and experience theycultivated. In FY2019, seven employees participated in this program, and fiveof them are carrying out training in ASI (USA).

In order to implement health management, we have begun activities
to obtain the status of "Certified Health & Productivity Management
Outstanding Organizations Recognition Program (Ministry of
Economy, Trade and Industry)." With regard to our representative
initiatives, we announced a "Health management declaration", which
included "Physical and mental health is a foundation for all activities",
written by President Tsunekawa in February. This declaration aims tocreate a vigorous company with the promotion of all employees'
physical and mental health, on a company-wide scale. In order tocontinue taking on the challenge of "creating Sango products thatmake worldwide contributions," preparing a healthy mind and body isfundamental. For better health of each employee, we will promotecompany-wide participation in walking activities within the premises
and the use of training gyms to enhance immunity and create
resilience. We will also aim to create a more communicative work
environment through interactive communication.

VOICE

Production Planning Division,
trainee

Yuta Kosato

VOICE(Rear center)At first, I struggledwith the difference inwork processes,
living environment,
and the language barrier. However, I gradually built up
relationships with ASI members, and now I enjoy having
conversations with them. Through this training, my desire foran overseas assignment has become even stronger. Using
the experience I cultivated for my future work, I would like tomake every effort to become an employee who can play anactive role around the world.

FY2019 ASI trainees[Back row] Tomokazu Kabeya, Yuta Kosato, andYusuke Okai
[Front row] Mayo Nakano and Ryo Miyajima

Steel, Chassis and Body Sales
Division, trainee

Mayo Nakano(on the right)

In this trainee
program, I am
learning about work
processes in ASI andreceiving training on a daily basis. However, there weremany things that were different from Sango, and at first I wasleft a little a bit confused. In the future, by communicating
more actively with ASI members, understanding why there
are differences, and sharing each other's strengths, I would
like to improve ASI's efficiency and strengthen the ties
between Sango and ASI.

Group safety and health - Working-level conference
Every year, members of the Safety Division from both domestic and overseas affiliates gather at Sango to conduct reportand study sessions, and case studies at a Sango Plant. This fiscal year, we held a study session on risk assessments toshare potential risks and examine countermeasures. The members took the content they learned back to their companies
and rolled them out to their own workplaces.

Hands-on training for group processes"Hands-on training for group processes" is an external
training camp that aims to re-recognize the importance of
teamwork and communication, and foster an awareness of aunited front through a sense of community. This fiscal year,
an event was held at the Toyota Shirakawago Nature
School, and 21 young employees in their 20s to 30s who
were recommended by those in company-wide management
positions participated.
Many participants
expressed that they would
like to apply the insights
they gained from thetraining to theirworkplaces.

Reciting the safety slogan together

Scene of a meeting being held
Scenery during mountain climbing

Tomoko Kondo, Body Production
VOICE

Engineering Department
To make things progress more smoothly,
I would like to communicate with people
in my department and other departments
more often.

21

SANGO Group Report 2020

Introducing case studies at a workplace

Participants in FY2019

Yusuke Fujishiro, Production
VOICE

Planning Division
By working together with young people
with an awareness of a united front andmaking use of the connections I built withsuperiors in this training, I would like toimprove the working level standard.

Inspecting forklift work

Observing a workplace

Group discussion

SANGO Group Report 202022

Society

ESG | Society

Supply chain

Activities that contribute to society

Global purchasing meeting – 1st Purchasing Strategy Meeting in Thailand

Tree planting activity at Millennium Hope Hills

In September, purchasing executives from the Sango Head Office, YSP,and STA gathered at YSP in Thailand to hold the 1st Purchasing Strategy
Meeting in Thailand. One aim of the meeting was to formulate a policy forordering materials, parts and indirect materials for small vehicles producedin Thailand. However, the ultimate goal was to ensure optimal
procurement by sharing and disseminating accurate information with eachother. We will continue to strengthen the ties within the group and work on
building a global supply base.

We are cooperating with others to create the "Forest Seawall" in Iwanuma City,
Miyagi Prefecture—an area that was affected by the Great East Japan Earthquake. The seawall, which is a forest, will dampen the power of Tsunamis andhelp prevent people and objects from getting swept away. In May, 1,300 people
from all over the country participated in the event and planted 10,000 seedlings.
Sango also sent 1,300 seedlings to this tree planting event, and the total numberof the seedlings reached 21,500. Five members in charge of raising theseedlings at each Sango plant participated. We hope that a towering forest
grows and protects the lives of people 1000 years into the future.

Participants planting seedlings that they have grown themselves

Order meeting in Thailand

VOICE

Wasin S. Wasin, Director of the Purchasing Department, YSP in Thailand
I felt convinced that our global meeting activities will change YSP’s purchasing system to make it more
efficient. It is very important that YSP roll out the same procurement policy as Sango in order to achieve
the same target as Sango. I believe this will also contribute to cost reductions.

Promotion of green purchasing
Request to our
suppliers

In cooperation with our suppliers, we have been
striving to better preserve the environment throughprocurement of parts and materials that are moreenvironmentally-friendly. In 2018, we released the"Sango Group Green Purchasing Guidelines" andare promoting activities aimed at sociallysustainable development, while working with our
suppliers for a better harmony with the environment.

1. Establishment of an environmental management system
2. Reduction of greenhouse gases (GHGs)
3. Reduction of environmental impact on water
4. Promotion of resource recycling
5. Control of chemical substances
6. Creation of a society in harmony with nature* "5. Control of chemical substances" is mandatory, and is theParticipating as volunteers for the Tour of Japan

Support for the Special Olympics in 2019

Every year, about 10 volunteers from Inabe Plant
participate in the Tour of Japan—the largest
international bicycle road race in Japan, which is heldin May. Of the 8 stages that are held around Japan,
the 3rd stage is held in Inabe City. 16 teams fromJapan and overseas compete for the best time on an
open circuit course that passes in front of Komeno
Plant. Our volunteers were in charge of traffic
restrictions along the course. We contribute to the local
community byensuring the safety ofspectators andathletes participatingin the world-famousroad race.

The Special Olympics Japan - Summer District Games,
which is for people with mental and physicaldisabilities, was held at the Toyota Sports Center in
October. Members of the Sango table tennis andbasketball ball club participated as operating staff tosupport setting up the venue and to referee games.
This activity has been held since 2018, and through thesupport for sports, we are cooperating to create a morelivable society for people with disabilities.

most important item.

Volunteers watching over the athletes(on the right, outside the course)

Sharing information and building partnership through supplier meetings
We hold a supplier meeting every month where we deepen our partnerships with our suppliers by sharing information on
topics such as quality, safety, and production trends. We also organize study tours and seminars on a regular basis so we
can learn with our suppliers. The things we learn together are introduced into suppliers' companies as well, and they use
these opportunities to gain knowledge to help solve their respective problems.

Supplier meeting

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SANGO Group Report 2020

Suppliers participating in the failure analysis training

Volunteers from the table tennis club

Volunteers from the basketball club

Volunteer activities at an elementary school (YSP/STA Thailand)
In Thailand, companies actively engage in CSR activities. YSP/STA has
also participated in Children's day events, mangrove planting, andconducting repairs for elementary schools. The photo on the right was
taken when employees and families participated in a volunteer activity at"Klong Krashangtoey School", which is located near the company.
Following a speech by President Kondo from YSP, and by the Principal,
the elementary school students welcomed us with a lovely Thai dance.
After that, each employee carried out repairs for damaged school
facilities with the children, built play equipment, painted, cleaned toilets,
planted trees, and cut children's hair, etc. Participants enjoyed working
with the children even though the work was unfamiliar to them. YSP/STA
will continue to promote activities that contribute to the local community.

Local elementary school students and volunteers from YSP/STA (in the back)Giving children haircuts

Planting trees

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Governance

ESG | Governance

GovernanceComplianceCorporate Governance System

Compliance Promotion Month

Sango has established the corporate governance system shown below. This system enables us to make transparent andfair decisions quickly, taking into consideration all of our stakeholders, including our employees, shareholders, customers,
suppliers, and local communities.

The Sango Group established a "Compliance Promotion Month" in
FY2019 to clearly state its stance on best compliance practices and toenhance the awareness of each employee. In implementing various
initiatives including the President's compliance declaration,
comprehension test regarding compliance, KYT (risk prediction
training) activities, and distribution of compliance cards that provide
contacts for the "Sango☆Helpline" (internal reporting and consultation
contact), etc., the company and all employees are actively
strengthening our compliance system together.

Shareholders Meeting
Auditing function

Management function
Appoint / Dismiss

Appoint / Dismiss

Board of Directors

Cooperate

President

Propose /ReportFinancial audit
Instruct / Direct

Instruct /ReportExecutive Officers
Excecution of businessDialogInternal audits
InstructFinancial auditors

Discuss / Report

ReportLabor-management
Conference
Labor-management
Informal Meeting

Auditors

Audit

Committee
Organization / Personnel Committee
Compensation Committee
CSR Committee
Internal control / Governance Committee
BCP Committee, etc.

Discuss / Report

Cooperate

Sango Grp Audit Office

ReportBusiness areas / plants /affiliates in Japan and overseas

Workshops for preventing power harassment

The highest decision-making body in the Sango Group is the Board of Directors, which consists of six directors, including
one external director, and it decides on critical issues concerned with management and statutory matters. At the same time,to ensure fairness and independence, our auditors, including external auditors, supervise management and audit how
directors are executing their duties.

Internal control / Governance Committee
In accordance with the corporate governance system to make transparent and fair decisions in a quick and decisive manner,
and with a basic approach for internal control systems to ensure the properness of operations within organizations, ourInternal Control / Governance Committee will promote approaches for compliance and risk management.

Establishment of a system to make transparent and fairdecisions in a quick and decisive manner

Internal Control / Governance Committee
Authority that controls work processes

Compliance

Risk management

Establishment of a system to ensure thatcompany employees carry out their work fairly
and justly in compliance with societal norms

Upon recognition and evaluation of various risks
surrounding the company, establishment of a policy
and system for control

SANGO Group Report 2020

Prior to the implementation of the power harassment prevention law (the Labor
Policy General Promotion Act) in June 2020, workshops for preventing power
harassment were held from December to February for executive, management,core and professional positions. Legal advisors acted as lecturers and provided
information such as the definition of power harassment, specific examples,
criteria, responsibility of companies and the perpetrators, risks at companies
with easy-to-understand cases, and questions and answers. We also adopted a
fresh perception and no longer accept such past sayings as "the more strictly
you instruct, the more your subordinates will grow". We will roll out theseworkshops for all domestic workplaces, targeting GLs, asst. managers,
supervisors, and team leaders.

Workshop for preventing power harassment

Risk management

Corporate governance

25

Example of KYT activity materials focused on hidden compliance violations around us

Risk assessment and measures
In order to avoid or minimize various risks in our corporate
activities, the Internal Control / Governance Committee,
consisting of executives and auditors, mainly conducts risk
management. The Committee extracts possible risks from alldivisions in the company and prioritizes risks company-wide
based on the results of the risk assessment. For the highpriority risks, each major division formulates and promotes
countermeasures, and the Internal Control / GovernanceCommittee monitors the progress, and as necessary, provides
instructions to each major division to continuously improve.

● Company-wide priority risk for FY2019
General category

Intermediate category

Compliance

Violations of the Antimonopoly Act,labor laws, and the Subcontract Act, etc.

Information

Information leakage, etc.

Labor affairs

Occurrence of harassment,
lack of personnel, insufficient humanresource development, etc.

Disasters and accidents

Natural disasters, industrial accidents, etc.

Production and distribution

Defective maintenance of equipment, etc.

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