Corporate
Philosophy

Corporate Philosophy

CONTENTS
Corporate Philosophy

1

Top Message

3

United Nations Global Compact

5Interview

9

Foster Group CSR Management

11

Corporate Creed“Sincerity” has been the Foster Group’s corporate creed since
its establishment.
By the term “sincerity,” we mean the act of treating allconcerned parties of the Company with a sincere approach.

Governance17

Social27

Environment

45

Corporate Profile and Financial Information

51

Corporate History

53

Data Table

55

The concept of CSR, which shares the same basic philosophy
as the corporate creed of “sincerity,” has always governed theCompany’s corporate management and business operations
since its foundation.
To continue to grow in the coming age, we believe it is importantfor each member of the Foster Group to act in accordancewith the CSR philosophy, or the corporate creed of “sincerity,”
which we have adhered to since our establishment.

Corporate Creed

Sincerity
VisionTo make contributions for future society
through acoustics

MissionThrough acoustic products or its solutions, a totalcommitment to help create a comfortable life andpleasure of communication around the world.
A truly global enterprise our future society counts on.
1

Corporate
Philosophy

Foster Rhythm“Foster Rhythm” is our guide to ensure we all move in the same direction to achieve our goals and dreams so we always
move closer to our inspiring “Vision.”
Our “Mission” motivates us to help people achieve new happiness via acoustic technology and our “Values” are guides
to filter our choices so that our actions support all stakeholders.
Our “Principles” conduct us to create perfect harmony and achieve the best results together.
Our “Management System” of processes and tools helps us to practice, learn and grow as members of the Foster family,
evolving new habits for future success.

- Principles & Values -

I

II

III

THE LEADINGALWAYS IMPROVINGEVER MORE
GLOBAL AND
INCLUSIVE

Strive to be number one in
the global acoustic fields.
Innovate to support everwider market needs.

Create a more efficient,effective, profitable and better
place to work. Always seek
new market categories andopportunities.

Embrace diversity andpursue more global synergy
at all management levels.

1. Trusted: Earn the trust of users
and partners.

4. Fast and Flexible: Be fast
moving and flexible

8. Open Mind: Be open–minded
and inclusive

2. Expert: Take pride in our
expertise in acoustic technology

5. Reliable Quality: Deliver totally
reliable quality via ever more
efficient systems

9. Responsible: Fulfill our duty
to protect people and theenvironment.

6. Proactive: Embrace learning andproactive leadership

10. Team: Respect others as partof a team with shared goals.

SOLUTION COMPANY

3. Inspiring: Add unique value,
motivate partners and excite
customers.

7. Steadfast: Show steadfast
dedication in going beyond our
promised goals

The slogan where Foster Rhythm strives to achieve. In pursuit of our vision “To make contributions for
future society through acoustics”, it means “To deliver sounds to life”, “To enrich life through Foster
acoustics”, “Sounds to reach lives and sustain healthy lifestyle”.

2Top Message

Top Message

Hiromi Yoshizawa President
3Top Message

Corporate Social Responsibility and Management
As we fulfill our corporate social responsibilities, Foster Group sincerely wishes to be a corporate citizen that is relied on
and loved by our various stakeholders. It seeks to do this by maintaining the consistent spirit of doing business for society
and people based on our corporate creed of “sincerity.”Omi Shonin (merchants from modern Shiga Prefecture), used to say that in business you should have “three goods”—
good for the seller, good for the buyer and good for the society. I believe that many corporate entities that have been
operating for more than 100 years secure these “three goods” by making reasonable profits and returning them for thegood of society. Securing these “three goods,” we also aim to be a centennial company that has a shining presence inthe coming new society.
Society is currently experiencing major changes. With the industrial revolution being brought about by the IoT (Internet ofThings), advent of the automated driving era, development and expanded use of AI and many other advances, we feelthat the innovations that fundamentally change our way of life are progressing at a pace that far exceeds anything that we
anticipated. New players are also appearing one after another to respond to those changes and competition is becoming
increasingly intense.
To realize our corporate vision “to make contributions for future society through acoustics,” we must continue to upholdthe basic philosophy of “sincerity” that Foster has adhered to since its founding, while making major changes as we move
forward. The key players who have a central role in achieving this are people, the tens of thousands of Foster Group
employees around the world.
We will continue to actively promote human resource employment worldwide and diversity to cultivate truly global
and sophisticated human resources. In addition, by further promoting “work-style reform,” we would like to create anenvironment where more employees can work flexibly and freely to achieve the goal of “Be Happy 80%*.”* “Be Happy 80%”: The ideal environment that we would like to achieve company-wide, which was presented by a team ofyoung employees during internal leadership training.
It refers to a working environment and corporate body where 80% of our employees can feel 80% happiness. I agree withthat opinion.
Recognized for such efforts, we were selected as one of the “New Diversity Management Selection 100 (2017)” by the
Ministry of Economy, Trade and Industry. We will continue those efforts in the future.
To unite people with digital signals through analog technologies of “acoustics” and become a company that is loved by all,Foster will continue to be an acoustics professional that pursues better sound quality to delight music-lovers worldwide.
In addition, the Foster Group will continue to maintain compliance and promote environmental activities as part of our
CSR activities, to ensure thorough quality control and risk management, and conduct our business operations based on
the values of discipline, responsibility and social contribution.
Foster Group has signed the “United Nations Global Compact” to represent our commitment to CSR activities.
We have also defined “Foster Rhythm” and introduced it across the Group companies to clearly describe “Principles &Values,” instill the concept of our corporate philosophy in our employees, and strengthen the foundation of the corporation
for future generations.
We will celebrate our 70th business anniversary next year. We will continue to strive to become an enterprise that is loved
by society and that offers satisfaction for its various stakeholders.

4United Nations
Global Compact

UN Global Compact
United Nations Global Compact
The Foster Group signed and joined the “United Nations Global Compact (UNGC),” the world’s largest corporate
sustainability initiative promoted by the United Nations, on January 19th, 2017.

Ten Principles of the UNGC and Foster’s Actions
As a company that operates globally, we support the 10 principles of the UNGC of “Human Rights,” “Labour,”“Environment” and “Anti-Corruption” and conduct activities for compliance, decent work, care for the environment, andCSR procurement, etc.
The Foster Group’s commitments to human rights, labor, environment and anti-corruption are defined in the Foster Group
Code of Conduct for Staffs. This covers the provisions of the RBA (Responsible Business Alliance, formerly EICC) Codeof Conduct and Rev. 4, which was revised in April 2017, and is currently in effect.
The items that correspond to the 10 principles are:Ten Principles of the UNGC

Foster Group Code of Conduct for Staff:

HUMAN RIGHTS
Principle 1: Businesses should support and respect the protection of Responsible Sourcing of Minerals (Section 10)
internationally proclaimed human rights; andPrinciple 2: make sure that they are not complicit in human rights abuses. Respect for Human Rights and Anti-discrimination (Section 23)
LABOUR
Principle 3: Businesses should uphold the freedom of association and the Respect for Human Rights and Anti-discrimination (Section 23)
effective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour; Compliance with Labor-related Laws (Section 27)
Principle 5: the effective abolition of child labour; andPrinciple 6: the elimination of discrimination in respect of employment andoccupation.
ENVIRONMENT
Principle 7: Businesses should support a precautionary approach to Preservation and Protection of the Environment (Section 17)
environmental challenges;*Our commitment to the environment is defined in the Foster
Principle 8: undertake initiatives to promote greater environmental Group Environmental Policy.
responsibility; andPrinciple 9: encourage the development and diffusion of environmentallyfriendly technologies.
ANTI-CORRUPTION
Principle 10: Businesses should work against corruption in all its forms, Compliance with Laws and Norms (Section 2)
including extortion and bribery.
Prohibition on Bribes to Foreign Officials (Section 8)

 Foster Group’s activities regarding UNGC:
https://www.foster-electric.com/csr/ungc/
 Foster Group Code of Conduct for Staff:
https://www.foster-electric.com/csr/governance/pdf/coc_for_staffs.pdf
 Foster Group Environmental Policy:
https://www.foster-electric.com/csr/environment/index.html

5United Nations
Global Compact

UNGC Communication on Progress (COP)
We submitted Sustainability Report 2017 as the Communication on Progress (COP) for fiscal 2017 to the UNGC toreport the progress of our activities as a member company. We also plan to submit this report as the COP.

 Foster Electric’s COP page in the United Nations Global Compact:
https://www.unglobalcompact.org/participation/report/cop/create-and-submit/active/398901

Sustainable Development Goals (SDGs)
In line with the signature of UNGC, the Foster Group will continue to promote the Sustainable Development Goals (SDGs),
which are proposed by the United Nations, and conduct other CSR activities through the UNGC framework.
What Are Sustainable Development Goals (SDGs)?
In 2015, “United Nations Sustainable Development Summit” was held at the United Nations Headquarters. With morethan 150 leaders from member countries participating, “Transforming Our World: the 2030 Agenda for Sustainable
Development” was adopted as its resolution. The Agenda made declarations and set goals as an action plan for people,
the planet and prosperity. They are known as “Sustainable Development Goals (SDGs),” which consist of 17 goals and
169 targets.
Source: United Nations Information Centre website

 United Nations Information Centre: Sustainable Development Goals (SDGs)
https://www.un.org/sustainabledevelopment/

6United Nations
Global Compact

Foster’s Actions
We are promoting the following 12 items among the 17 goals through our business activities and will continue to takeaction to help achieve a sustainable society.

Items in the SDGs

Examples of Foster’s Activities

Refer to

1. NO POVERTY

Donation activity for low-income households, assistance with food, andothersParticipation in poverty reduction activities

Overseas: pages 37 to 40

3. G
 OOD HEALTH AND
WELL-BEING

Implementation of the “Health Point System” and “Smoking
Cessation Support Program”
Participation in blood drives

Domestic: page 30

4. Q
 UALITY EDUCATION

Education on quality, environment, CSR, and so on
Acceptance of student interns
Donation of academic fees, books, and construction materials forclassrooms

Domestic and overseas:

5. G
 ENDER EQUALITY

Education to deepen the understanding of management for women
who work while raising children
Provision of systematic training to female employees and support for
their career development
Implementation of a “roundtable talk about women’s careers”

Domestic: pages 9 and 28

7. A
 FFORDABLE AND
CLEAN ENERGY

CO2 reduction
Management of environmentally hazardous substances

Domestic and overseas:

8. D
 ECENT WORK AND
ECONOMIC GROWTHWork style reform project (flex-time system, work-at-home program,
Premium Fridays, recommendation of twice-weekly no overtime days,and volunteer leave system)
New personnel system (multi-stream personnel system by course)
Technical master system

Domestic: pages 30 to 31

10. REDUCEDINEQUALITIESEstablishment of the Diversity Management Section (promoting support
for employees raising children and providing nursing care, women’s
active participation, LGBT activities, and global human resource
employment)

Domestic: pages 28 to 29

12. RESPONSIBLE
Management of chemical substances
CONSUMPTION AND Zero emissions
PRODUCTION
Reuse of wastewater at plants

7

Overseas: page 38

pages 16, 44, and 47
Overseas: pages 38 to 40

pages 45 to 47

Domestic: pages 46 and 48
Overseas: page 49

United Nations
Global Compact

Items in the SDGs
13. C
 LIMATE ACTION

Examples of Foster’s Activities

Refer toCO2 reduction
Promotion of clean energy use

Domestic and overseas:

15. L
 IFE ON LAND

Support for global environmental preservation activities

Domestic: page 48

16. P
 EACE, JUSTICEAND STRONG
INSTITUTIONS

Corporate governance structure
Compliance structure
CSR procurement
Basic policy on conflict minerals

Domestic: pages 17 to 19

17. P
 ARTNERSHIPS FOR CSR assessments and audits
THE GOALS
Responsible procurement
Holding the internal CSR communication conference

pages 45 to 47

Domestic and overseas:
pages 25 to 26

Domestic and overseas:
pages 15 to 16
pages 25 to 26

Activities as a member of the Global Compact Network Japan (GCNJ)
We are participating in the “human-rights education subcommittee,” “environmental management subcommittee,”“WEPs subcommittee,” “supply chain subcommittee,” “DRR (Disaster Risk Reduction) subcommittee 2018,” and “ESG
subcommittee of the GCNJ, which are composed of the member companies of the UNGC (as of June 2018).
The subcommittees not only share the CSR-related latest trends and study cases of each company through lecture
meetings by influential individuals but also are working to produce various kinds of outputs that support CSR activities ofvarious companies based on the member companies’ experiences in a wide range of industries.
Involvement in output◎ Supply chain subcommittee
CSR procurement self-assessment tool set (Japanese)
http://www.ungcjn.org/activities/topics/detail.php?id=217
In addition, the knowledge obtained through the subcommittees is reflected in our CSR activities.

8Interview

Interview
Foster Electric’s Challenges for Diversity
Recently, an increasing number of companies are promoting the participation of diversified human resources such as
foreigners, women, and the elderly and “Promotion of diversity” is now an important key phrase in corporate management.
What “diversity” is Foster Electric promoting? Mr. Narikawa, Senior Managing Director, and members of the Human
Resource Department who played a central role in the promotion had a discussion at a roundtable, facilitated by the CSR
Promotion Department.
—— What kind of problems do you think we had regarding diversity?
Mr. Narikawa: In recent years, we are expected to make efforts not only to increase the quality and competitivenessof our products, but also to address automatic driving, AI, IoT and other new areas, further increase quality, respond tomarket changes, strengthen global collaboration, and increase the management speed. As technologies and society
are changing at an unexpectedly rapid pace, human resources who have a variety of opinions and ideas are absolutely
necessary for a company that conducts business globally.
To have many human resources that work with enthusiasm, we have been establishing a support system for employees
who work while providing child care or nursing care. However, we were still unable to change conventional work styles orvalues completely, which was not sufficient for the operation. We were aware that it was difficult to obtain the understanding
from supervisors and colleagues and therefore take advantage of the system, and that the key issues are how to improve
such aspects.
——To solve those issues, what kind of efforts did you make?
Mr. Tsugane: We aim to establish a “win-win relationshipbetween the company and employees” through thepromotion of diversity to realize a fulfilling personal life foreach employee and generate a synergy effect between
the creation of new value and improvement of corporate
competitive power. As a result, we established the Diversity
Promotion Committee in 2010 and the Diversity Management
Section in 2011.

Roundtable talk (at the headquarters)——To change your conventional work style, what specific activities did you perform?
Ms. Sunaga: We started the work-style reform project in 2015.
First, we held a roundtable with the theme of work style by collecting members from general employees and started a trial
run of the work-at-home program and flex-time system based on the most common comments.
The trial of the work-at-home program was well-received by the employees who used it, because it allowed them tospend their time wisely.
——It is a very convenient program, but it takes guts to use, right?
Ms. Sunaga: Although the convenience for the employees has improved, some managers were cautious of it, considering
the difficulties of management and influence on operations. In such departments, we asked them to implement the
program as a trial. When they actually implemented it, problems did not occur as frequently as they expected and they
understood that they could adopt the program when it operates well. Therefore, the negative views of the managers
have changed gradually. During the trial run, we also made efforts to gradually expand the eligible persons and promote
understanding inside the company. As a result, we have successfully introduced the work-at-home program without
limiting the eligibility to those providing child care and nursing care. The program was used for 599 days total in the first
year.

9

Interview

Ms. Hashizume: For the flex-time system, we also performed its trial run in parallel with the working shift system, whichallows employees to independently select the hours that they work from four different working shifts. Through somestages, such as the one for familiarizing them with time management, we have formally introduced the system and madeit applicable to all employees.
Ms. Sunaga: Since February 2017, we have introduced Premium Fridays. Because there was also a call from the top
management, many employees seem to use the time secured through business efficiency improvement to spend theirprivate time meaningfully, for example, individual development and spending time with their families.When I see the officewith few employees on a Friday afternoon, I actually feel like their mindset is changing.
——Recently, measures are being taken for the problem with turnover for women due to childcare and family reasons.
What kind of initiatives is Foster taking?
Ms. Sunaga: We have taken an initiative to establish a working environment where women can work enthusiastically andremain in the company for a long period of time.
First, we have been providing education for the management on a periodic basis since 2010 to deepen their understanding
about women who work while raising children. The mindset of the management has gradually changed, and now they are
actively following up with their junior staff that are working while raising children. We also pay attention to the employees
who return to work after childcare leave and provide them with our nursery. In addition, we grant employees a leave ofabsence to accompany their spouses on temporary assignment, which enables female employees who would have quit
in the past to remain in the company.
——The majority of Foster’s products are manufactured in foreign countries, and you have a lot of foreign staff. Do you
make any efforts related to that?
Mr. Miyaoka: The ratio of foreign staff in our whole group is 99% and it is essential to cooperate with overseas bases toperform daily operations. We consider not only the globalization of the headquarters in Japan but also the development of
human resources at overseas bases to be important management issues. Therefore, we have been proactively employing
foreign staff at the headquarters and also making strong efforts for personnel exchanges with Group companies inforeign countries, aiming to develop global human resources. Currently, the ratio of foreign staff at the headquarters isapproximately 10%. We plan to increase it to 30% in the future. Under such circumstances, we provide cross-culturalcommunication trainings on a regular basis to understand different cultures and communication styles and strengthencommunications among employees regardless of their nationalities. In addition, we are careful of the employees’ religious
backgrounds, for example, by using illustrations to indicate the meat used in the company cafeteria. Through those
activities, we are promoting the establishment of an environment where Japanese and foreign staff can naturally work in
an integrated manner.
——Because you have diversified human resources of many nationalities, do you
feel that it is difficult to organize such staff?
Ms. Terada: We have established “Foster Rhythm” so that our employees canrespect and cooperate with diverse individuals and make business judgments
based on the concept of the “Uniqueness of Foster.” Foster’s principles andvalues are summarized in the concept of “Foster Rhythm”.
Foster Rhythm Card,——Since the establishment of the Diversity Promotion Committee, you have
which our employees carry at all bases
been creating a place where a variety of people including women and foreigners
can work actively.
Mr. Narikawa: Yes. Recognized for such efforts, we were awarded the “New Diversity
Management Selection 100 (2017),” which is hosted by the Ministry of Economy, Trade andIndustry. Let’s keep working to realize more flexible work styles andpromote the creation of a workplace that is unique to Foster!

“New Diversity Management Selection 100”
Memento from the award10

Foster GroupCSR Management

CSR Management
Since its founding in 1949, the Foster Group has aimed to become
indispensable to society, and has continued to grow and develop under
its corporate philosophy of “Sincerity.”
With its 70th anniversary in 2019, while “aiming to be a centennialcompany,” the Group will continue to adhere to management basedon “Sincerity,” that is, “always convey the truth and offer human- andenvironmentally-friendly products and services to all stakeholders withcordiality.”
In 2016, the Group established the Foster Rhythm, which was formed tomake its corporate philosophies easier-to-understand, and distributed
it internally. This was established by its employees, aiming for theemployees all over the world to sympathize and embody its corporate
philosophies. Its penetration is also promoted by the employees.

Atsushi Narikawa
Officer in charge of CSR, Senior Managing Director

It contains not only the corporate philosophies but also the strong“thinking” and “desire” its employees really want to achieve, for example,“a workplace full of team spirit where employees can work freely,” “pride as a professional, which people always desire.”
The Foster Group and all of its directors, officers and employees hereby declare that we will engage in “corporate activities
with sincerity” in accordance with the CSR Charter below. We will also continue to seek corporate value by appropriately
addressing the expectations and needs of our stakeholders.

Foster Group CSR Charter
Foster Group’s activities are under the corporate creed of “Sincerity”, and vision of “To make contributions for futuresociety through acoustics” and its mission “Through acoustic products or its solutions, a total commitment to help create
a comfortable life and pleasure of communication around the world. A truly global enterprise our future society counts on.”A subject of “Corporate Social Responsibility” itself is a universal proposition in the deployment of corporate management
at Foster Groups. As shown in the corporate creed, a CSR way of thinking has been behind this company from the timeof its foundation.
CSR or CSR Management that suit Foster Groups, who extends business activities globally, are “to concentrate on
its core business based on the corporate creed for the purpose of sustainable development of a company as a global
corporation, and to fulfill its social responsibility by enhancing the corporate value while raising the stakeholder satisfaction
not only in financial aspect, but also in the harmony of environment and society aspects”.
The CSR management means that the corporation fulfills its social responsibilities through such activities.

11

Foster GroupCSR Management

In achieving this objective from global perspectives, the Foster Group and all of directors and employees will initiate CSR
activities based on followings.
1. We stand and act on our corporate creed, vision and mission.
2. We act in accordance with the “Foster Group Corporate Action Guideline” that a company should comply, and the“Foster Group Code of Conduct for Staffs” that all directors and employees of the group should abide by.
3. We regard a variety of stakeholders including customers, employees, suppliers, shareholders and investors, and local
communities as the subject of our CSR activities, and respect a diverse sense of “value,” “culture” and “economic,
environmental or social” circumstances that vary by country or region.
4. We act in accordance with laws, regulations of home and abroad, and international rules by responding to various
requirements. Those requirements are compliance to corporate ethics, security of product quality and safety,
environmental protection, improvement of work environment, maintenance of employment, development of humanresources, respect to human rights, fair competition, contribution to society and community, and proper tax payment.
5. We perform proper risk control, disclose information timely and adequately with the accountability to support thereliability of CSR, and place value on having dialogs with stakeholders.
6. We identify company representatives responsible for ensuring implementation of the management systems
and associated programs in order to comply with this CSR Charter. Status review, with personnel designated bymanagements, is held on a regular basis.
By conforming to this CSR Charter, we hereby declare to engage in the “corporate activity with sincerity.”

Foster Group CSR Promotion
Foster Group CSR Systems
As shown in the following “CSR System,” Foster Group has established the CSR Committee with representatives ofrelated sections as core members at its headquarters. CSR Committee Meetings are held monthly with the attendance ofofficers in charge of CSR from the headquarters as well as staff at overseas bases via video conferencing to ensure themonitoring and collaborative promotion of CSR activities on a group-wide basis, including overseas business locations,each of which has an appointed person responsible for the promotion of CSR activities.

General Meeting of Shareholders
Board of Statutory Auditors

Board of Directors

Accounting Auditor

PresidentInternal Audit Department
Officer in Charge of CSR
CSR Promotion Department

Relevant committees
CSR Committee

Compliance Committee
Risk and Crisis Management Committee
Environment Committee, etc.

CSR Representative

Corporate divisions and business divisions

Group companies

12Foster GroupCSR Management

Conceptual Drawing of CSR Management
The underlying concept of the CSR management is a triple bottom line, which evaluates the corporation from the three
aspects: economy, environment and society. CSR management provides improved corporate value and new value
to stakeholders not only in the financial (economic) aspects, but also in the sustainable development of non-financial(environment and social) aspects.

Stakeholders
Sustainable development
Clients
Provision of new value /Improvement of corporate value

Engagement

Consumers
Shareholders
Investors

Sustainably developing domains

Directors/Officers

Ideal centennial company
with a century of history
CSR reflecting
our corporate value

Back castingRespond to social demands

Employees

The Ten Principles of the United
Nations Global Compact

Suppliers

EICC Code of Conduct
Communities
Future generations

Socially valuable domains

Risk management
Basic CSR

Compliance with laws
and regulations

Environment
Anti-corruption
Corporate governance
Disclosure of information

Human rights
Industrial safety and health
Quality and product safety
Information security, etc.

Government agencies

Industry

Business domains
Triple bottom line

EconomyEnvironment

Society

Sustainability

Core of CSR Activities
The Foster Group issued the first version of its CSR Charter in 2006, and updated it to pursue global versatility anduniversality in 2010, by incorporating the EICC* Code of Conduct, the CSR standards established by U.S. Electronic
Industry Citizenship Coalition, as our basic policy. Items originally set out by the Company have also been added to
the Code for reinforcement of the Group’s CSR management. In addition to these efforts, we also implement our CSR
activities in compliance with the United Nations Global Compact and the ISO 26000 standards.
* Electronic Industry Citizenship Coalition (renamed Responsible Business Alliance in 2017)

Development of CSR Materiality
The Foster Group developed the CSR Materiality in 2016. The development method and procedures were determined byextracting the important items for CSR from the policies and their items set out by the Company.
The basic policies and extracted items are:
1. The Major policy “To establish a base of global business and create a profitable structure toward the year 2020” from“2016 Managerial Policy.”
2. The following two items were extracted from “Annual TQM (Total Quality Management) Policy for Fiscal Year 2016”:- Draw and execute an improvement plan suitable for the maturity of each site for “customer claim reduction”
measures.
- Establish a global environment management system and embody and promote the orientation of “energy
management” targeting 2020.
3. The following two items were extracted from “Environmental Policy”:- Conserve the global environment by promoting resource and energy saving in product development and design.
- Prevent contamination and reduce CO2 emissions in all phases of business activities including manufacturing anddisposal.

13

Foster GroupCSR Management

4. The item “Raise the awareness of environmental protection and biodiversity and thereby develop human resources
who contribute to society” was extracted from the “Medium-term Environmental Policy.”
The extracted materiality items are as follows:
Responsibilities in the value chain: Decent work, quality, being customer oriented and environmental conservation
1. Global human resource development and utilization
2. CSR-based global Group governance
For item 1, we considered the entire value chain as a primary body and divided it into items for enhancing positive effects
and for minimizing negative effects. From each of those items, we extracted the detailed items.
Influences on stakeholders' evaluation and decision making

Quality and sustainable product supply
Scope 3: GHG reduction
LCA (Life Cycle Assessment)

Decent work
Organization's global system establishment andgovernance strengthening
Penetration of our philosophies
Global human resource development

Degrees of economic, environmental andsocial influences of the organization

CSR Materiality-based PDCA
Materiality

Contents

Decent work

1. R
 esponsibilities inthe value chain:
Decent work, quality,
customer orientationand environmental
conservation

Enhancingpositive
effects

LCA (Life Cycle
Assessment)
Scope 3: GHG
reduction
Reducing GHG (green
house gas) emissions

Global Human Resource
Development

Penetration of our philosophies

3. C SR-based global Group
governanceFuture Plan
We have set targets for fiscal 2018
as follows: The rate of paid holidays
taken: 77%, the total working hours: ayear-on-year reduction by three hours
per month. For health enhancement,
we aim to maintain the rate of periodic
health examinations taken at 100%and achieve the rate of specific healthguidance taken at 80%.

We maintained a record of zero failures that would
Quality and sustainable have a serious social impact (human life, property,
product supply
environment and so on).

Minimizing
negative
effects

2. G
 lobal human resource
development andutilization

Results and Progress in Fiscal 2017
As work style reform project, we implemented
a variety of activities such as the full-scale
introduction of flex-time system and work-athome program as well as recommendation of
twice-weekly no overtime day and Premium
Fridays.
Also, for health enhancement activities, we
implemented the "Health Point System" and"Smoking Cessation Support Program." (Refer topage 30)
We have been continuously registered with theUnited Nations Global Compact and reviewed
activities regarding human rights and labor for 10
principles in four different areas.

Organization’s global systemestablishment and governanceenhancement

To calculate Scope 3: GHG reduction, we started
a review to define the lifecycle range and set KPIs.

To reduce GHG, we have started the calculationin Scope 3, in addition to Scopes 1 and 2, whichwere already calculated. (Refer to page 49)
In addition to the global grade system, which wasstarted last year, we proceeded with preparations
at the headquarters for the introduction of a new
personnel system in fiscal 2018, which allows
employees to select their career design globally.
Furthermore, we ran the Global Leader’s Training
and facilitated the Overseas Trainee Program andinternational employee reassignment within Group
companies, among other initiatives.
To share our philosophies, we continually
implemented Foster Rhythm Workshops andvarious kinds of educational programs in Japanand at overseas sites.
We selected the persons in charge of CSR at theheadquarters and seven Group companies andmaintained a global CSR structure.

We will continue to collect information
through
GCNJ
subcommittee
activities and strengthen our activities
in cooperation with the other member
companies and organizations.
We will maintain a record of zero
failures that would have a serious
social impact and reduce customer
complaints.
We will globally expand the calculation
range of Scope 3: GHG reduction anddevelop an activity plan for the future
based on our reviews.
We will globally expand the calculation
range and work to reduce GHG
emissions in the entire supply chain.
While continuing the current activities,
we will stabilize the new personnel
system, establish a global humanresource utilization base and develop
global leaders.

We will continue to adapt thephilosophies of Foster Rhythm toconcrete activities for their further
penetration into the entire Group.
We will continue the CSR promotion
activities for Group companies basedon the established CSR promotion
system.

14

Foster GroupCSR Management

CSR Assessments and Audits
CSR Internal Audits
In order to penetrate CSR at the manufacturing sites, the Foster Group is implementing CSR internal audits. We
implemented 43 total internal audits at the facilities in the last fiscal year. We implemented the audits by basically using
the local laws as the standards and guidelines and also by referencing various social requests, such as the EICC Code of
Conduct, EICC VAP (Validated Audit Process), SA8000 and customer standards to confirm compliance with the activities
and check for any measures beyond the laws.

Customer Audits and Assessments
To meet the various requests of customers, we accept audits from customers at manufacturing sites. In terms of theenvironment and occupational safety and health, our production facilities in China and Vietnam received 10 on-site audits
from four corporate customers during the period from April 2017 to March 2018. Over the course of the year, we also
received 17 requests (from 12 different customers) to complete and return the Self-Assessment Questionnaire, and we
responded accordingly.
We will continue to focus attention on the environment and safety in our manufacturing practices and address requests
from customers with sincerity.

External view of the factory in China

Customer audit meeting (China)

Surveys from External Organizations
The Foster Group also responded sincerely to the CSR surveys received from external investigatory bodies. Last year, we
received and responded to eight surveys regarding CSR, environmental management, ESG, SRI and others.
Among them, as a result of the “CSR company ranking survey,” which was conducted by Toyo Keizai Inc., we ranked
228th (out of total 1,413 companies), which was an improvement from 248th (out of total 1,408 companies) last year.
We will continue to address the survey requests from external investigatory bodies with sincerity.

15

Foster GroupCSR Management

Expansion of CSR In-house Education
Following the “Global CSR Communication Conference” in 2016, we held CSR In-house Communication Meetings atoverseas sites in Vietnam (three sites, August 2017), China (one site, September 2017), and Myanmar (one site, February2018) in fiscal 2017 to deepen the mutual understanding between field sites and us through in-house expansion. Together
with the CSR-related departments at overseas sites, we exchanged opinions through the accumulation of knowledge,
information sharing and expansion of Foster Rhythm as well as other initiatives to accelerate the Foster Group’s CSR
activities. After the conferences, we also received requests for further opportunities for site education and similar
information sharing. We will continue to provide places for periodic communication to deepen mutual understanding
beyond cultural, ethnic and regional borders and unite as the Foster Group to actively promote in-house CSR education.

Communication Meeting at the site in Myanmar

Communication Meeting at the site in Vietnam

16

Governance

Governance
The Corporate Management Division is carrying out its
operations regarding finance, accounting, IR (Investor
Relations), legal affairs and intellectual property.
It has a function that governs not only the headquarters
in Japan but also the subsidiaries around the world.

Corporate GovernanceTatsuhito Tanaka
Senior Executive Officer andHead of Corporate Management Division

Policies
To maximize our corporate and shareholder values, we recognize the importance of establishing a fair and sound corporate
management system and a managerial structure that enables quick and accurate decision making to accommodate anever-changing business environment, and the execution of legitimate and appropriate business operations. To that end,
we are currently working to improve and enhance our approach to corporate governance.

Corporate Governance Structure
Board of Directors
Meetings of the Board of Directors are held regularly on a monthly basis and whenever necessary to discuss and decide
important agenda items and the execution of important business concerning the Group’s management policies andstrategies. It supervises the management from an independent and objective standpoint.
Board of Managing Directors
The Board of Managing Directors mainly consists of representative directors, managing directors, executive directors,
senior executive officers and statutory auditor. They hold discussions at the meetings before making decisions on theexecution of business operations.
Management Meeting, etc.
Mainly comprising the president and the head of the Company’s business divisions (including those who serve concurrently
as director or executive officer), the Management Meetings and the Division Head Meetings are held to report and discussmatters concerning the execution of businesses at the business divisions, in order to expedite decision making processes
and ensure that unified decisions are reached. On a Group-wide level, twice a year, in order to facilitate consolidated
management within the Group, the Domestic Group Company Meeting is held by the top executives responsible forthe management of the domestic Group companies; the Global Budget Meeting is held by the top executives of theoverseas Group companies to discuss their budgets; and the Global Strategy Meeting is held to discuss global strategies
with regard to sales, technology, quality control and manufacturing. Through these meetings, we share and reaffirm thedirection in which the entire Foster Group is heading, and reinforce collaborative efforts within the Group.

17

GovernanceNominating Committee and Remuneration Committee
The Company has established Nominating and Remuneration committees as advisory organizations offering voluntary
advice to the Board of Directors. These committees are designed to enhance fairness and transparency in selecting andappointing people to managerial positions, and in determining the details of their remuneration, etc. Each committee
consists of representative directors, managing directors, directors, standing statutory auditors, and statutory auditors(currently a total of six members including two independent officers).
General Meeting of Shareholders
Board of Directors

Statutory Auditors / Board of Statutory Auditors

Accounting Auditor

Management Monitoring
President
Board ofManaging Directors(Internal Control)

Management Meeting
Division Head Meeting
Internal Audit Department

Domestic Group Company
MeetingGlobal Budget Meeting, etc.

Corporate Staff
Departments

CSR Committee
Compliance Committee
Risk and Crisis Management Committee
Environment Committee
Personal Information Management Committee, etc.

HotlineBusiness Divisions

Corporate Governance Guidelines
The Foster Group has established Corporate Governance Guidelines that express our basic way of thinking and frameworkwith regard to corporate governance. (Japanese).
https://www.foster.co.jp/csr/foster_group/pdf/20160401_corporate_governance_guideline.pdf

Corporate Governance Report
The Foster Group publishes a report that describes the concept and structure of our corporate governance in accordancewith the regulations of the Japanese stock exchange.

Foster Group Corporate Action Guideline
The Foster Group has established Corporate Action Guideline that express our actions with public decency in compliancewith laws and regulations inside and outside of Japan, international rules, and their spirit and intent as well as corporate
ethics.
 Foster Group Corporate Action Guidelines:
https://www.foster-electric.com/csr/governance/pdf/corporate_action_guideline.pdf

18GovernanceCompliance
Policies
The Group emphasizes compliance (with laws, regulations and corporate ethics) as a core element of its CSR philosophy
and promotes a compliance program—setting internal rules and building a structure for management—to all Group
companies.

Compliance Structure
The Foster Group places emphasis on the internal whistleblowing system to promote compliance. Such system is underoperation through the Compliance Hotline that connects whistleblowers to corporate lawyers or the highly independent
Internal Audit Office to early detect violations of compliance. The whistleblowing hotline is extensively available toemployees and officers of the entire Group as well as to their families and the employees of business associates.
For the protection of whistle-blowers, internal regulations are established and disseminated to ensure that they are treatedfairly or not involved in any trouble as a result of the their actions.
Another specific effort is to reinforce the development and operation of internal control systems, with a focus on meeting
the internal control requirements of the Financial Instruments and Exchange Act, the J-SOX requirements, for the reliabilityof financial reports. Currently, the business operational processes at the Group’s headquarters and 11 major businesslocations are under supervision for compliance with the J-SOX requirements.
 Organization of the Compliance Committee (The same applies to the Risk and Crisis Management Committee)
Chief Executive (President)
Chairperson (Senior Managing Director)
Vice Chairperson (Executive Officer)
Consultation Contacts / Hotline

Secretariat

Committee members from the headquarters / Committee members from Group companies

Compliance Committee
Compliance efforts are led by the Compliance Committee based on the respective internal regulations.
In fiscal 2017, a compliance test was conducted to help improve awareness of compliance among employees, and in
an initiative led by the Compliance Committee, an outside expert (lawyer) was invited to lecture to employees with theobjective of making compliance related issues known and ensuring thorough observance.

Future Plan
The Foster Group will continue to promote activities such as the enrichment of in-house training and provision of
information on related laws and regulations, which are led by the Compliance Committee, established based on the
Foster Group Code of Conduct for Staff, to enhance and improve the compliance structure.

19

GovernanceRisk Management
Policies
The risk management activities of the Foster Group are focused on predicting risks and taking preventive measures sothat such risks will not materialize. They also focus on minimizing damage to the Company should a risk develop andmaterialize, resulting in the occurrence of danger. Specifically, we have established a structure for prompt response in
the event of a crisis and a response structure for any serious risk or incident when it is predicted. Meanwhile, we arestrengthening the risk management structure for usual conditions under our basic operation policy of enhancement andglobal expansion of risk management ability and crisis responsibility.

Risk Management Structure
As the foundations for the Foster Group’s risk management structure, we have established the Rules on Risk and Crisis
Management and the Risk and Crisis Management Committee with the president as the chairman to identify risks using
a checklist, analyze such risks and promote preventive measures on a Group-wide basis.
In the event of any incidents or accidents, we will set up a task force, mainly consisting of the Risk and Crisis Management
Committee members, and take prompt measures to minimize damage, ensuring restoration of the original state as earlyas possible and preventing any recurrences.

Risk and Crisis Management Committee
As the basic operation policy in fiscal 2017, we promoted the enhancement and global expansion of risk management
ability and crisis responsibility and established a structure for prompt responses in the event of a crisis and a response
structure for any serious risk or incident when it is predicted, and enhanced the risk management system for usual
conditions. In fiscal 2017, we extracted important items to be monitored at the Risk and Crisis Management Committee
and held the Risk and Crisis Management Committee on a regular basis (once every three months). Through the regular
implementation of the Risk and Crisis Management Committee meeting, we established a Foster Group-wide healthand safety management structure, reviewed the business continuity plan (BCP) and monitored the establishment of thebribery prevention structure. In addition to those activities, we extracted important items to be monitored in fiscal 2018 at
the Risk and Crisis Management Committee, aiming to enhance the risk and crisis management structure.

Future Plan
We will continue to improve the structure for prompt responses to an accident or incident in the event of its occurrence
and conduct periodic monitoring of important items at the Risk and Crisis Management Committee to further enhance
the risk and crisis management structure.

20

Governance

Our Stance on Tax Matters
Basic Stance
The Foster Group works to maintain and improve tax compliance and perform proper filing and payment of taxes inaccordance with the local tax-related laws and international rules.

Dealings Between Affiliated Companies
The Foster Group determines prices for dealings between its affiliated companies based on the principles of pricing
between independent companies. Taxes are paid in a timely and appropriate manner according to the earnings based on
tax laws and agreements in each country.

Relationship with Tax Authorities
The Foster Group works to reduce tax uncertainty by responding in good faith to prior consultations and related information
disclosure to tax authorities. In addition, it uses the Advance Pricing Agreement (APA) to obtain prior agreement with tax
authorities.

Transparency
The Foster Group prepares and discloses its financial statements in compliance with the Financial Instruments andExchange Act and related laws. It also discloses tax information in the financial statements based on the related laws andregulations.
The Foster Group also understands that the BEPS (Base Erosion and Profit Shifting) project by OECD is essential toprevent international tax avoidance and abusive tax planning and to secure the transparency of taxes through thedisclosure of tax information. As such, it gives proper responses.

Business Continuity Plan (BCP)
Policies
The Foster Group is taking steps to prevent and avoid various business risks and crises as risk/crisis control and tominimize the damage to the Company and avoid inconvenience to customers should a risk occur or be embodied, withthe highest priority given to preventing the recurrence of risks/crises.
In these activities, the Company has developed the “Business Continuity Plan” in order not to suspend important business
operations in the event of disaster and even when operations are suspended, resume them as quickly as possible tominimize the effects on customers and other stakeholders and enable a smooth response to an emergency.

Activity Promotion Structure
The Foster Group promotes business continuity through the function recovery activities undertaken by each function
department of headquarters and through collaboration with the task forces at each site in accordance with the decisions
made by the Risk and Crisis Management Committee consisting of its senior management.
Chairperson of the Risk and Crisis Management Committee
President
Executive Chairperson

Vice Executive Chairperson

21

Secretariat

Committee members
from the New Business
Development Division

Committee members
from the Global Corporate
Support Division

Committee members
from the Corporate
Management Division

Health and
Safety Committee

Committee members
from the Internal
Audit Department

Committee members
from the Corporate
Planning Department

Committee members
from the Quality
Assurance Division

Committee members from
the MA Business Division

Committee members fromthe SP Business Division

Committee members
from the Production Division

Committee members
from the Fostex Company

Committee members
from the Foster Micro
Acoustic Company

Committee members
from the Corporate Information
Strategy Department

Committee members
from Group companies

Governance

Main Activities and Measures
Operation of the emergency-contact network (safety confirmation system)
To keep the headquarters functional, Foster Group has introduced a safety confirmation system using mobile phonesthat allow headquarters to issue an emergency notice to confirm the safety of its employees and their families when an
earthquake, disaster, or other emergency occurs.
Certification of Excellent Fire Prevention Property
As one of the disaster-prevention activities, our headquarters is certified as an Excellent Fire Prevention Property under
the cooperation of the Akishima Fire Department. This year, we renewed the certification for the first time. The activitiesof our self-defense fire fighting force were inspected by the fire department. We will unite all the employees, including theself-defense fire fighting force, to continue our certification and do activities as a company needed by the local community.

Certification of Excellent Fire
Prevention Property

Presentation ceremony for the certification of
Excellent Fire Prevention Property

Disaster drills conducted by headquarters and domestic offices
Once a year, the Foster Group conducts disaster drills involving all employees at headquarters and domestic offices. At
headquarters, a drill was conducted in February 2018. Firefighting training, evacuation guidance training and so on wereconducted by the self-defense fire fighting force.

Disaster drill (Headquarters)

22

Governance

Information sharing and health and safety activities with overseas sites
Our headquarters and other departments share the information on the disasters and accidents that occurred at overseas
sites and actions taken for them via the regular video conference.
Disaster drills at overseas sites
The Foster Group appoints a person in charge of BCP for each overseas site and conducts activities for continuingbusiness globally. We also implement disaster drills on a regular basis to improve our employees’ disaster prevention skills
so that they can react without confusion in the event of a disaster.

Evacuation drill (Vietnam)

Firefighting training (China)

Injured person rescue training (China)

Night evacuation drill (Indonesia)

Future Plan
The Foster Group has been reviewing the BCP at the headquarters by learning from many of the recent natural disasters
that occurred in Japan. We are working to re-establish the headquarter BCP structure so that even when faced with an
unexpected situation, we can react flexibly, aiming to be a company that is more reliable for stakeholders.

23Governance

Information Security andPersonal Information Protection
Policies
The Foster Group recognizes the importance of securing the trust of its customers, suppliers, shareholders, employees
and other stakeholders based on its corporate creed of “Sincerity.” Appropriate management of information assets is an
important part of the management agenda.
To appropriately protect and handle the information assets possessed by the Foster Group, we define the information
security policies as follows:- Information security management system- Development of internal regulations regarding information security- Implementation of information security measures- Provision of information security education- Implementation of continuous improvement activities
Details on our information security policies can be viewed at our website: Information security policies:
https://www.foster-electric.com/security/index.html

Activity Promotion Structure
For protection and appropriate management of all information assets possessed by the Foster Group, it has establishedthe Information Security Committee, which mainly consists of management, to maintain the system for understanding themanagement status of information security and prompt implementation of required security measures according to therisk analysis results.

Chief Executive

Chairperson

Task force

Committee
memberCommittee
memberCommittee
memberCommittee
memberVice Chairperson

Secretariat

Information security auditor

Information Security Committee

Chief of Secretariat
Secretariat at
the headquarters

Secretariat at
each site

Main Activities and Measures
The Foster Group takes appropriate measures as organizational, human, physical and technical safety management
initiatives against security threats, which change daily, to prevent unauthorized access, damage, leakage, falsification andother accidents involving information assets.

Future Plan
- Penetration of the infrastructure for information protection and management on a global basis.
- Implementation of risk analyses and plan for concrete preventive measures based on the Business Continuity Plans(BCPs).
- Assurance of the awareness of the information security policies and respective standards

24Governance

Responsible Procurement
The Foster Group makes efforts to trade with suppliers that are not only superior in terms of quality, technologies, anddelivery time, but also makes efforts to trade with suppliers that carry out social responsibilities such as CSR (green
procurement, human rights, labor, safety, and compliance).
We will continue to build sound relationships with our suppliers through agreement with our CSR procurement policies,
deepening of mutual understanding, and sharing of our goals.

Basic Principles of Procurement Policy
In its global expansion, the Foster Group has developed the “Basic Principles of Procurement” for the supply chain,including the Group and its suppliers, based on which it builds fair and healthy relationships.
1. To observe laws, regulations and social norms		
2. Fairness and impartiality
3. Green Procurement					4. Confidentiality
5. CSR Procurement					6. Focus on quality, delivery time and stable supply
Details can be viewed at our website:
https://www.foster-electric.com/procurement/basic.html

CSR Procurement
The Foster Group recognizes that across-the-board CSR procurement along its entire supply chain is essential indeveloping its global materials procurement activities. To this end, we have established the Foster Group Supplier CSR
Code of Conduct, based on our CSR-related regulations and Basic Principles of Procurement. Based on this standard,
we distribute CSR-related questionnaires to our suppliers and ask them to confirm their implementation status for our
CSR initiatives.
In fiscal 2017, the Company conducted a SAQ (Self-Assessment Questionnaire) on the implementation status related tohuman rights, health and safety, the environment and ethics at all procurement sites in Japan, China, Vietnam, Indonesia,
and Myanmar. We received replies from 90% of them.
As a result of the survey, the average points for the whole company was 86 points (out of 100 points).
Also, it was discovered that many of our suppliers considered CSR as a social trend and actively worked on it.
We will continue to ask them to perform CSR self-assessments. If any problems are found, we will take countermeasuresagainst them to establish a healthy supply chain.
Details on the “Foster Group Supplier CSR Code of Conduct” can be viewed at our website:
https://www.foster-electric.com/procurement/pdf/supplier_csr_code_of_conduct_en.pdf

Responsible sourcing of minerals
In recent years, the illegal mining and smuggling of minerals
by armed forces/groups in the Democratic Republic of theCongo and its surrounding countries—and the fact thatthese activities not only provide a source of funding for thesegroups, thereby fueling further conflict, but also lead toforced labor, human-rights violations and other issues—has
become a major social problem; and it is being demandedthat companies making use of mineral resources shouldtake responsibility for the problem.
Training regarding conflict minerals (China)
The Foster Group has established a Basic Policy on Conflict
Minerals, and conducts investigations into the production areas and distribution processes used in relation to minerals in
its supply chain. In fiscal 2017, we achieved a 99% response rate for investigations into conflict minerals carried out on
the group of 363 suppliers.

25

Governance

Going forward, the Group will continue to conduct detailed investigations as the refinery certification status changes(addition and deletion) and to work actively towards ensuring the responsible procurement of minerals. (Our policies on
the conflict minerals can be viewed on our website.)
Details can be viewed at our website:
https://www.foster-electric.com/procurement/csr.html

Green Procurement
The Group has established and revised its “Green Procurement Standard”
governing the chemical substances contained in procured parts and raw
materials, and asks our suppliers to provide parts and materials that
do not contain harmful substances, in compliance with various national
regulations and the demands of customers. In order to verify that such
substances are not contained in supplied parts and materials, we ask
suppliers to submit constituent analysis results and certificates. The
Group will continue in its efforts to ensure the procurement of eco-friendly
materials.
Details on our green procurement can be viewed at our website:
https://www.foster-electric.com/procurement/green.html

Environmental measurement practice using XRF (headquarters)

Global procurement structure
The Foster Group is promoting the global development of business activities, local procurement, and local production
for local consumption. In doing this, we consider it vital to share a mutual understanding with our suppliers and wetherefore hold procurement, environment, and CSR briefings to promote a strong and healthy relationship with them. In
addition, as it is essential to acquire knowledge to reduce procurement risks, our Company is fostering human resources
who can conduct procurement operations in a socially responsible way by providing education and training on quality,
environment, CSR and others at each site on a regular basis via the video conference system.

Global materials conference (headquarters)

Industry exhibition 2017 (Vietnam)

Suppliers quality audit (Penang)

Environment education via video conference (Myanmar)

26

SocialSocialThe Global Corporate Support Division works withmembers from each site to promote not only regional
activities, but also global CSR activities, humanresource development and utilization, creation ofwork-friendly worksites, as well as health and safety
activities, mainly in the fields of CSR promotion, humanresources, and general affairs.

Human Rights Protection
Policies

Iwaki Tsugane
Deputy Head of Global Corporate Support Division

In 2003, we established the “Foster Group Corporate Action Guideline” and the “Foster Group Code of Conduct for
Staff”, which define our respect for human rights in compliance with all laws and regulations, international rules and their
spirits and concepts. We have also requested our business partners in the value chain to show a similar respect forhuman rights. An outline is provided below.
Respect for Employees’ Humanity
Under our labor-management mutual trust and responsibility, we seek to create safe and work-friendly worksites, aiming
to help our employees enjoy comfortable and affluent lives. We also respect our employees’ human rights, personalities,
individuality, and abilities. In addition, we do not support any form of forced labor and child labor.
Respect for Human Rights and Anti-discrimination
Working to maintain healthy worksites at all times, we respect the human rights of each employee and do not conduct
any actions that lead to discrimination.
We do not engage in irrational discrimination based on place of birth, nationality, race, origin, creed, religion, gender, age,disability of various kinds, hobby, academic background, etc.
We do not conduct any actions that might lead to human rights violations such as violence, ridicule, defamation, slander,
forcible working by threat, or bullying.
Sexual Harassment
We do not engage in any act of sexual harassment or any act that could be misconstrued by others as sexual harassment.
We do not engage in any sexual speech or acts that are offensive to another person and prevent other persons fromengaging in such acts.
Protection of Personal Information and Privacy
With respect to personal information and privacy of Foster Group Directors and employees or for persons outside theCompany that become known to Foster Group Directors and Staff during the course of work, we only use the personal
information for the work and control it strictly. We control it strictly so that it will not be divulged outside the Company.
Worksite Health and Safety
We give priority to the provision of safety and health, endeavor to maintain a safe and healthy workplace environment,
understand the laws and orders concerning work-related safety and health and comply with them. If any work-related
disaster arises under any circumstance, Foster Group Directors and Staff strive to carry out the prescribed procedures suchas the creation of an immediate report in order to minimize and prevent the recurrence of such accident in a reliable manner.

27

SocialCompliance with Labor-related Laws
We comply with the labor-related laws and endeavor to maintain a comfortable and healthy workplace environment.
In order to ensure that the working conditions stay within the limit set forth in the “Labor Standards Act,” we strictly control
working days and working hours. We do not force labor that compels excessive work or over-time work and so on. Managers
take into consideration the condition of the physical and mental health of subordinates at all times.

Activity Promotion Structure
We have established the CSR Committee and Compliance Committee to promote all relevant Foster Group initiatives.
In addition, we have established the Compliance Hotline and the Harassment Helpline as contacts for consultation andreporting and provide advice to various stakeholders.

Diversity and Inclusion
Policies
The Foster Group seeks to create systems and environments in which a diverse workforce of different genders, ages,
nationalities and backgrounds as well as employees who work while raising children or providing nursing care can work
actively according to their respective lives.
Through those activities, we aim to build a “Win-Win relationship” between the company and its employees and createsynergies with the realization of enjoyable personal lives for each employee, the creation of new value, and improvementin the company’s creativity and competitiveness.

Activity Promotion Structure
We have established the Diversity Management Section as a special organization in the Human Resources Department
and are involved in multifarious activities.

Main Activities, Measures, and Development<Supporting Employees Raising Children and Providing Nursing Care>
To promote a working environment where employees who are raising young children and providing nursing care can workat ease, we have improved our system to support the balance between work and child/nursing care. Since April 2018,
we have extended the childcare leave period to three years maximum and the nursing care leave period to 183 days
maximum. In addition, Diversity Management Section accepts counseling requests regarding child care and nursing carefrom employees at any time and responds carefully.
<Promoting Women’s Active Participation>
By providing female employees with planned cultivation and supporting their career development, we are aiming to havefemale managers represent 30% of all managers by the end of March 2021.
In fiscal 2017, we held the "Round-table Talk about Women’s Careers" aiming to establish a network among female
employees by sharing their real opinions and thoughts of the future careers of the women who work in a variety of job
categories.
<Our Activities for LGBT (Sexual Minority)>
Currently, the Human Resources and CSR departments are carrying out activities to deepen understanding of LGBT and
increase the number of allies (those who show understanding and support for LGBT people). In the future, we will increase
allies company-wide through activities designed to foster understanding.
In addition, we provided trainings for all employees in fiscal 2017 to deepen their understanding of LGBT.

28

Social<Global Human Resource Employment>
The Foster Group employs a variety of human resources regardless of their nationalities, and is actively promotinginternational communications in the Group to cultivate human resources and enhance the functionalities.
<Regarding the Award of New Diversity Management Selections 100 (2017)>
With our activities recognized as a company that leads diversity promotion to its management, we were selected as the“New Diversity Management Selections 100 (2017)” awarded by the Ministry of Economy, Trade and Industry. (Refer topages 9 and 10.)
We will continue to create a working environment that makes use of diversity of the employees who has various
backgrounds.
 Website of the Ministry of Economy, Trade and Industry: New Diversity Management Selections 100/Diversity
Management Prime
Companies awarded as New Diversity Management Selections 100 (2017) (Japanese)
http://www.meti.go.jp/policy/economy/jinzai/diversity/kigyo100sen/practice/pdf/H29_diversity_ichiran.pdf
Best practices in fiscal 2017 (Japanese)
http://www.meti.go.jp/policy/economy/jinzai/diversity/kigyo100sen/practice/pdf/H29_diversity_bestpractice.pdf

Future Plan
- Female manager ratio: To increase the female manager ratio to 30% of all the managers by 2021.
- Foreign employee ratio at headquarters: To increase the foreign employee ratio to 30% of all employees working at
headquarters by 2021.
- Employment rate of persons with disabilities: To keep the employment rate above the mandatory rate required by law.
- Displaced worker for nursing care: Aim to be zero by 2021.

Labor (Labor Practices and Decent Work)
Policies
We put a high value on creating an environment in which each employee can grow through work and display theircapabilities in a rewarding work. To realize this, we believe it is important to create a “work-friendly” environment where
employees with various backgrounds support each other spontaneously through daily communications and give ideas
to each other. Under labor-management trust and mutual cooperation, we seek to create an organizational culture anddevelop various institutions, aiming to create an environment where employees with various lifestyles and aspirations canwork in the style that suits their situation.

Activity Promotion Structure
In addition to the promotion activities conducted by the Diversity Management Section, we have established the innovative
working style project, which is involved in a wide range of activities with cooperation between labor and management.

29SocialMain Activities, Measures, and Development<Work-style Reforms>
Since September 2016, we have established the systems and culture that satisfy a variety of work-style needs to promote
diversity and realize a work-life balance.
In fiscal 2017, we applied the flex time system to all employees and introduced the work-at-home program at full scale.
As for the work-at-home program, though the targets were limited to the employees who are providing child and nursing
care during the trial run, we have introduced the program at full scale without limiting the targets. The program was used
for 599 days in total in fiscal 2017, which shows that flexible work styles are penetrated.
In addition, we continually implemented the initiative of the two days of week recommended to go off work at the sametime and the private-public initiative of the Premium Fridays, which is promoted by the Ministry of Economy, Trade andIndustry. We implement the initiative of Premium Fridays, which ensures leaving work on time, two times a year (Februaryand August). 84% and 92% of employees left work before the fixed time in August and February, respectively, whichshowed gradual penetration of the awareness of leaving earlier.
<Enhancement of the Leave System and the Leave of Absence System>
Since April 2018, we have introduced the volunteer leave system with an aim to grow employees through volunteer
activities.
We have also introduced the system that grants the leave of absence for two years at the longest to the employees whowish to go to school to deepen and expand their own expertise and the system that grants the leave of absence for five
years at the longest to the employees who wish to accompany with their spouses on overseas transfers.
<Health Enhancement>
Mental and physical health is essential for employees to feel job satisfaction and work with vigor. We position theenhancement of employees’ health as an important management issue and are
conducting various initiatives.
To raise the awareness of enhancement of employees’ health, we implement
the “Health Point System,” in which we give points and provide health incentives
to employees. In this system, incentives are given to the employees who took
periodic health examinations, participated in in-house health seminars andparticipated in exercise events such as the walk rally.
We also implement a “Smoking Cessation Support Program,” which subsidizes the expenses paid to medical institutes
to the employees who wish to quit smoking, and encourage them to take specific health guidance in cooperation withthe health insurance association, providing an opportunity to review their daily habits. In addition, we hold the “Autumn
Festival (athletic meet).” We implemented those initiatives by sponsoring the plans of employees’ union, aiming to maintainand enhance employees’ health and activate communications in the company.
Such initiatives were evaluated and received the “Certification of Excellent Company in Health: Silver” from the Tokyo
Federation of the National Federation of Health Insurance Societies in February 2018.

Future Plan
Target for fiscal 2018:- Rate of paid holidays taken: 77%- Total working hours: year-on-year reduction by three hours per month- Rate of periodic health examinations taken: keep 100%
- Rate of specific health guidance taken: 80%

30

SocialHuman Resource Development
Policies
Our human resource development is based on "continuous performance by linking various personnel systems withindividual development goals determined by mid/long term business strategy and individual personality (strength/
weakness)." The ideal for human resource development is as follows:- Personnel who embody our corporate philosophies and corporate creed through their duties and who have a “strongwill” and “activity” to work toward their realization.
- Personnel who do not remain complacent about the current situation but utilize every opportunity to improve their own
abilities and grow with ingenious attempts and efforts.
- Professional personnel who use their expertise to play a key part in strategy formulation and implementation and who
can create value continuously.
- Self-directing personnel who are conscious about their expected and assigned roles and missions and who can takeresponsibility for their own actions and results.

Activity Promotion Structure
Those human resource development measures are driven mainly by the Human Resources Department. In addition,
through the “Foster Rhythm Project,” which introduces our corporate philosophy penetration activities globally, we are
striving to develop human resources who can embody those corporate philosophies and create a lively organizational
environment.

Main Activities, Measures, and Development- To promote philosophy-focused management (Way Management), enhance the power of human resources andorganization, and transform the organization, the Foster Group developed the action guidelines by redefining “the ideal
company.” We summarized those into the “Foster Rhythm Guidebook” and “Foster Rhythm Card” and distributed
them to our employees across the world. We are also continually providing workshops and various kinds of education
programs.
- We are working to promote diversity and foster and enhance the global mind of our employees by regularly conducting“Inter-Cultural Communication Training” at various levels. We will also introduce the Global-eye Program, a new overseas
training program for young employees, to promote the planned and continuous development of the next-generation of
global leaders.
- Since April 2018, we have introduced a new personnel system (personnel system with multiple courses) aiming to makethe transition to a more flexible personnel system with a wider range of selections according to each employee’s careerplan, life stage, and work-life balance. At the same time, we are also working to promote the development of engineers
by providing life-career design training and introducing the “Technical Master System.”- To promote localization of overseas site management, we are also actively working on the development of the local
managing staff at each site. Specifically, we ran the Global Leader’s Training and facilitated human resources exchangeby the Overseas Trainee Program and the international employee reassignment within Group companies, etc. to develop
human resources globally.

Future Plan
- Further instilling our corporate philosophies (understand -> empathize -> implement)- Stabilization of the operation of the new personnel system (multi-stream personnel system by course)- Promotion of the human resource rotation linked with the mid- and long-term human resource development program- Establishment of global human resource utilization base and development of global leaders31SocialHealth and Safety
Policies
Foster Electric has established a rule to prioritize health and safety, and endeavors to create a safe and healthy working
environment. Based on this rule, we are advancing redressing activities, which are carried out mainly by the Health and
Safety Committee, which governs health and safety, and the health and safety management organizations at respective
sites.
Abstract from the “Code of Conduct”(1) Understand laws and orders concerning work-related safety and health and comply with them. And minimize andprevent a recurrence of an accident in a reliable manner.
(2) Employee exposure to potential safety hazards is to be controlled through the proper design, engineering andadministrative controls, preventative maintenance and safe work procedures.
(3) Procedures and systems are to be in place to prevent, manage, track and report occupational injury and illness.
(4) Employee exposure to chemical, biological and physical agents is to be identified, evaluated, and controlled.
(5) Employee exposure to the hazards of physically demanding tasks is to be identified, evaluated and controlled.
(6) Production and other machinery is to be evaluated for safety hazards.
(7) Employees are to be provided with ready access to clean toilet facilities, canteen with suitable drinking and eating
environment.

Activity Promotion Structure
The health and safety activities carried out by Foster Electric are operated by the Health and Safety Committee at
headquarters in cooperation with industrial doctors, under the supervision of its upper-level organization, the Risk andCrisis Management Committee. By sharing information among the health and safety management organizations at eachsite, the Group is working as one to create an appropriate working environment.
President

Risk and Crisis Management Committee

Health and Safety Committee

Industrial doctor

Outsourced contractor

Fire control and disasterprevention administrator(self-defense fire-fighting force)

Health supervisor

Organic solvent manager

Health and safety
management organization
at each Group company

Building healthadministrator

Hazardous material
safety supervisor

Chief press machine
operator

Specially controlledindustrial waste manager

Safe driving administrator

Main Activities
As part of our health and safety initiatives, we are taking steps to address Group-wide issues, led by the Risk and Crisis
Management Committee, together with initiatives to resolve site-specific issues, led by the health and safety management
organization at each site.
We are carrying out initiatives to address the “group-wide issues” based on the Foster Group Corporate Action Guidelines
and the Foster Group Code of Conduct for Staff.
In the future, we will begin full-scale initiatives to address issues common to the Group using ISO 45001-Occupational
Health and Safety.
The Foster Group implemented safety inspections on the bicycles used for commuting as an issue common to the Groupfor preventive maintenance.

32

SocialThe headquarters has developed and executed the plan based on the policy of the Health and Safety Committee,“Aiming for zero risks,” as an initiative to address site-specific issues. In particular, as one of the work-style reformpromotional activities, we worked on a corporate-type childcare project to enhance our benefit packages. We conducted
the "Declaration of a Healthy Company" and enhanced the system to improve work-life balance, in an effort to create amentally and physically healthy working environment for our employees through various activities.
In addition, we had a renewal audit for the certification of the excellent fire prevention property at headquarters this year
and re-checked the activities of the self-defense fire-fighting force. We are working to improve our employees’ safety
awareness to become a company that is also needed by the local community.

Bicycle Safety
Some employees working at headquarters use bicycles for their work or commute, and their safe use of bicycles and ourtraffic accident prevention activities were evaluated by the Japan Traffic Management Technology Association. We werecertified as a “model company for bicycle safety” in February 2017, with our activities being seen as a role model.

Award ceremony for the “model company for bicycle safety”

Video Conference with Overseas Sites
As one of our initiatives to expand and share information on the global industrial health and safety project based on ISO
45001-Occupational Health and Safety Management System, we held a regular video conference with the persons incharge at overseas sites. We shared cases related to industrial safety that occurred at each site and started to takepreventative measures and actions as group-wide issues.

Future Plan
We will expand the global industrial health and safety project based on ISO 45001-Occupational Health and Safety
Management System and share the information.

33

SocialSocial Contribution
Policies
With our mission “Through acoustic products or its solutions, a total commitment to help create a comfortable life andpleasure of communication around the world. A truly global enterprise our future society counts on,” the Foster Group willseek to earn greater trust from the community through business activities in which we evolve together with local residents.

Code of Conduct
We actively participate in social contribution activities as a good corporate citizen to contribute to the development ofsociety.
We continuously conduct social contribution activities such as support for culture and the arts, cooperation with local
society, participation in volunteer activities and contributions to international society to play the role of a corporate citizen.

Activity Promotion Structure
Foster Electric’s social contribution activities involve all departments, including General Affairs, Manufacturing, Engineeringand Sales.

Main Activities<Communicating with the community>
We continued the naming rights contract with Akishima City regarding Akishima Community Hall, which is known locallyas KOTORI Hall by the citizens of Akishima City. The KOTORI brand name was given to the hall by Foster in April 2014.
This year, the renovation of KOTORI Hall in Akishima City is planned. We will continue to pursue activities to win theaffection of the local community.

KOTORI Hall

KOTORI product exhibition corner

As a company that supports the industry of Akishima City, we invited its technical instructors to visit a company under thetheme of technical tradition. In addition, as a company that regards harmony with the environment as one of the highest
priority issues of its business management activities, we held classes on the environment and invited elementary school
students to join. These sessions enabled the children who will play a role as the next generation of adults to learn about
the importance of environmental preservation, and about the care for the environment that goes into our products.

Environmental class (1)Environmental class (2)34Social

In 2017, as a key member of Akishima City’s Environmentally Friendly Business Operator Network, we took part in the
Akishima Industrial Festival, the Environment Green Festival, and other environment events, and pursued our environmental
preservation activities in cooperation with neighboring companies and the staff of Akishima City Environment Section.
Also, valuable feedback from citizens through the events was highly beneficial for our activities. We will continue to growtogether with all citizens in the future.

Akishima Industrial Festival (1)Akishima Industrial Festival (2)In December 2017, we sponsored a Winter Vacation Parent & Child Crafts Class, a winter holiday event for parent-childinteraction as part of the Akishima Crafts Classroom community courses, which was well received.

Winter Vacation Parent & Child Crafts Class (1)Winter Vacation Parent & Child Crafts Class (2)In addition, Foster is promoting activities to enable people to encounter local traditional cultures through Akishima Showa
No Mori Organization and Akishima Tourism & City Planning Association, in which we participate. Foster is also deepening
communications with the local community through efforts such as cooperation with the Akishima Location Service toengage in activities for revitalizing the local area and donations to the Social Welfare Council to contribute to welfare in
the local community.
Last year, we started the in-house sale of specialty goods from the town of Iwaizumi, Iwate Prefecture, which concluded
a friendship city agreement with Akishima City, as a disaster reconstruction support activity and contributed to the area’s
recovery through economic activity.
<Crime prevention and disaster readiness initiatives>
Supporting the 2020 Tokyo Olympic and Paralympic Games, Foster is cooperating with the Tokyo Metropolitan Police
Department’s ANTEP (Anti-Terrorism Partnership, Tokyo) initiative, concluding disaster prevention agreements withneighboring companies, and otherwise bolstering its crime prevention and disaster readiness initiatives in the local
community.

35

Social<Investing in human resources for the future>
In 2017, we held a speaker-making class, an event sponsored for children by our consumer brand FOSTEX company,
at “Anfelit” showroom, where FOSTEX products were exhibited, twice during the spring holiday period (March to April)and summer holiday period (July to August). Sixty children, from late elementary to junior high school students and theirguardians enjoyed the event.
They not only learned the mechanism of sound, but also enjoyed listening to music through the speaker.

Making speakers

Listening to sounds from the speakers
that the children madeFoster Electric supports bicycle motocross (BMX) rider, Mr. Yoshii.
<PROFILE>

Kohei Yoshii,
BMX* Japan representative, works at CSR Promotion Department of Foster ElectricCompany, Limited.
Born on March 14, 1995. He fell in love with BMX racing the first time he saw it withhis family, and started BMX when he was 7 years old.
In 2012 and 2013, he won the junior class race for two years in a row. In 2013, he
won first prize in the Asian Championship junior class.
Since 2014, he has taken part in the highest class in Japan, the elite class.
He also serves as a trainer at sessions for beginners at JOSF Midoriyama track, hishome ground, and interacts with children and their guardians.
* BMX (bicycle motocross): A cycle race. Mr. Yoshii takes part in the BMX event known as the “Race.”
Players compete for top place on a dirt course of approx. 400 m including jump ramps, etc.

Mr. Yoshii joined Foster Electric Company, Limited in December 2017 and is active
internationally.

<Recent Activities>
February 2018 USA BMX Winter Nationals (U.S.)
March			 USA BMX Gator Nationals (U.S.)
April			 UCI BMX Supercross World Cup (France)
May			UCI BMX Supercross World Cup (Netherlands, Belgium)
			 Asian BMX Championships - Continental Championships (Thailand)36

SocialCommunity Contribution Activities at
Overseas Sites
Foster Group’s overseas sites provide active support for regional volunteering and donation activities, activities supporting
victims and those who are economically disadvantaged, human resource development activities, and other initiatives
each year.

<Vietnam>
We offered gifts to those who are economically disadvantaged during the Tet holidays (Lunar New Year) in February 2018.

In November 2017, due to a flood caused by Typhoon No. 23 (Damrey) in the south central of Vietnam residents sufferedextensive damage. Our Vietnam sites provided support in Quang Nam Province, where people were affected by thecollapse of houses and other damage, and donated funds and relief supplies collected from our employees.

In December 2017, we supported the construction of a canal bridge in Kien Giang Province.

37

Social<Indonesia>
In May 2017, our employees participated in a blood donation event co-sponsored by the Indonesian Red Cross Society.

In June 2017, we supported the construction of a learning room (computer room) at the Permate orphanage on Batam
Island.

The orphanage held a welcoming ceremony
for Foster in June 2017

Our employees visited the orphanage in May 2017
to gain insight into actual conditions

Construction was completedin October 2017

In November 2017, we donated over 200 picture books, dictionaries, and educational books to a school on Seraya
Island. In December 2017, we also donated school tuition, food and other supplies to Agape orphanage on Batam Island.

We donated books to a schoolon Seraya Island

We donated school tuition, food andother supplies to an orphanage on Batam Island<Myanmar>
Our Myanmar site accepted internships from universities and career colleges We provided students with opportunities todeepen their expertise through on-site learning and acquiring techniques that have not been taught in school. We not only
accepted students for internships but also visited Thanlyin Technological University to give a talk on the manufacturing
processes of speakers.

Students from Thanlyin Technological University
visiting Foster Thilawa Plant

Lecture at Thanlyin Technological University

38

Social<China>January 2018:
We distributed 5,000 reusable shopping bags to stores and consumers at no charge to reduce the amount of plastic
bags.

February 2018:
1) We took part in the poverty reduction activities conducted by the local government and provided employment guidanceand job opportunities by communicating with those who are economically disadvantaged.

2) Our employees took part in the welfare activities, visited economically disadvantaged persons in the Guangxi region,and donated money and food.

39

Social<Korea>ESTec Corporation, a Group company in South Korea, performed the following activities:
September 2017: Conducted by our officers and employees, funds for neighbors were donated via the inhabitant life
support office to people in need of support in the Yangsan area.
November 2017: The funds raised by our officers and employees were donated via the physical education office as
scholarship funds for the students in Yangsan City.
December 2017: All our employees pickled 200 boxes of kimchi (approximately 1,500 kg) together and sent them tothose who are economically disadvantaged (elderly living alone, people with serious disabilities, and households with achild acting as the head of household), via the Yangsan Volunteer Center. This "Kimchi sharing with love" event has been
carried out every year since 2010.

September 2017: Funds for neighbors

November 2017:
Scholarship funds for students in Yangsan City

December 2017: Kimchi sharing with love

<U.S.>
September 2017: Our Detroit office donated the funds collected internally to “Make A Wish,” which is an organization forchildren who are fighting serious illnesses.

40

SocialCustomer Satisfaction
Foster Group Sales Department
Policies
The Foster Group Sales Department mainly sells speakers and headphones for cars and audio devices. To realize ourvision “To make contributions for future society through acoustics,” we are working every day to create good sounds that
can impress people across the world through our products and parts. The only thing we must do to achieve this mission is
to “create customers,” as a wise person once said. Needless to say, customers can be created by continuously satisfying
someone’s needs. We consider it as the origin and made our primary responsibility “customer satisfaction,” which we
believe is the principle of all our activities.

Structure
We have sales offices in Japan (headquarters), the U.S., Europe, and other Asian countries/regions beside Japan. Thistetrapolar structure is the base of the framework that enables our flexible responses not only based on the local time,
languages, but also a deep understanding of business customs and cultures. In addition, through personnel interchanges
among regions, we have established a structure to develop global human resources as true cosmopolitans, regardless of
where they were born, and deliver our quality sounds to people all over the world.

Activities
The current economies and corporate activities are connected around the world and do not stop. Through our tetrapolarstructure described above, we have realized a 24-hour response system globally and are conducting activities to quickly
respond to every customer.

Future Plan
- We provide our products in the fields of cars, entertainment, and communications and deliver happiness to people
around the world through our sound.
- With new markets for cars, entertainment, and communications growing at an accelerated pace, with surrounding areas
becoming involved, the markets are being integrated into a comprehensive lifestyle field. Under these circumstances,
we strive to provide new products that meet changing needs and deliver greater satisfaction to customers around theworld.

Fostex Company
Policies
The Fostex Company provides high quality products at appropriate prices to deliver an enriched and comfortable life tocustomers who purchase those products. In addition, the Company always seeks to develop products that lead to thepeace of mind and satisfaction of the customers who select and own them. In its after-sales services, the Company also
pursues customer satisfaction by always promptly providing services from the customers’ perspective.

Structure
We always listen to our customers’ comments and seek what they need so that we offer products that our customers
can use with satisfaction and peace of mind. As such, we have established a project promotion structure across our sales
and technical units. In addition to the domestic market, we also understand global needs and strive to develop products
specific to each region.

41

SocialActivities
As domestic activities, we share information with the dealers who are constantly in contact with our customers and also
make efforts to listen to as many customers’ voices as possible at exhibitions and trial listening events. In 2017, we held
over 30 listening events at dealers and participated in seven exhibitions. In overseas markets, we identified the needsof customers from overseas countries/regions through cooperation with our contracted sales agencies and sold regionspecific models in Hong Kong and the U.S.

Future Plan
We will continue to supply our trusted original brand, FOSTEX brand products, to introduce our high technical competences
and the high competitiveness of our products. In particular, in 2018 we will continue to develop products that can deliver
greater listening pleasure to our customers through sound, focusing on the development of a full-range speaker, astrength of Fostex, and Bluetooth earphones, which is a market trend.

42SocialQuality and Safety Assurance
The Foster Group is undertaking quality assurance activities based on the FOSTER TQM (Total Quality Management).

Our Quality Assurance Activity Policies and Actual Activities
Under our customer-focused philosophy, the Foster Group considers the delivery of safe, eco-friendly products of reliable
quality by fulfilling customers’ expectations and social requirements as the basics of our quality assurance.
In addition, under the Basic Quality Policy, we globally promote comprehensive quality assurance activities to ensure thatour products are of high quality.
The product safety, reliability, and product environmental quality of our products and components are certainly taken
into account during the processes (product/process design, purchase, and manufacturing) supported by our high leveltechnologies.
Increasing the satisfaction, trust and reliance of customers, contributing
to the community and society and preserving/protecting the environment Our Quality Assurance Activity System (Main Process) and Mechanism
Process
Market needs, customers’ expectations, requirements

Continuous Improvement (activity)

FOSTER TQM(Total Quality Management)

Creationof System

Quality and Environmental Policy
TQM Regulations/Quality Management
ManualQuality system rules and/or regulations

Product feasibility review (DR-0)
Design, prototype production

Product creation
Quality creation
Quality to be accomplished
Human
Technology by the across-the-board
Resources
efforts ofCreation
Development
the employees
Product development technology
Environmental and safety-related
technologies
Production technology

Contract check

Design/prototype validation and review (DV, DR1/2)
Mass-production of prototype, validation, and evaluation

Quality certification

Human Resource Development

Mass-production, product inspection, shipment
Customers, markets

Basic Quality PolicyNote) DR-0: Product feasibility review, DV: Product design validation,
DR1/2: Product design review

FOSTER TQM and Quality Management System (QMS)*▲ As for the quality management system of the Company, quality assurance and management activities have been developed under its
customer-focused philosophy on quality since the Company’s foundation.
▲ In 1975, we formulated the Total Quality Control (TQC) Regulations in accordance with the philosophy of FOSTER Total Quality Control (TQC).
In May 2006, the TQC Regulations were upgraded as the Total Quality Management (TQM) Regulations.
▲ Since 1998, all the Group companies have successfully acquired the certification of the quality assurance (system) standards (including theISO9001: 1994).
▲ In 2004, all the Group companies successfully acquired the certification of the ISO/TS 16949, a quality standard based on the ISO9001:
2000, which has continued to be renewed to date.
▲ In 2017, we switched to ISO 9001: 2015 and IATF 16949: 2016 standards company-wide and have continued to comply with them.
* QMS: Quality Management System

Global Quality Assurance Structure
The Group has developed global quality assurance systems, connecting
the headquarters, overseas factories and sales companies to improve
the quality of our products to be supplied worldwide.

43

The Group guarantees product quality in all of
the products it supplies worldwide through its
Global Quality Assurance Structure

SocialEnhancing Quality AwarenessOur headquarters has made November the “Quality Month” and holds a variety of events to improve quality awareness.

Main Events Held Last Fiscal Year Holding the quality lecture presentation
The quality lecture presentation was held by inviting outside lecturers.
Approximately 170 employees attended this event, which led to an
improvement in their quality awareness.

Quality lecture presentation (headquarters)

 Holding a quality improvement case exhibition
We held improvement case exhibitions at headquarters and overseas sites to share detailed information on the
improvements.

Exhibition at the headquarters

Exhibition at Da Nang Plant
in Vietnam

Lecture at a plant in Indonesia

 Seeking ideas for a quality slogan
We seek ideas for a quality slogan for eachdivision every year. Compiled in a booklet, all of
our employees carry at all times.

 Holding the Global QC Circle Convention
At each overseas factory of Foster Group, through the QC Circle
activities, opinions from production sites are valued and used to
improve product quality.
Each year, more than 100 QC circles in total are conducting activities
at overseas factories. Among them, 12 teams that won the QC Circle
Convention at each factory give presentations of their results at
headquarters.
QC Circle Convention (headquarters)

Future Plan
We will continue to enrich its contents and promote its global extension, aiming to mature our quality-focused corporate
culture.

44

Environment

Environment
In addition to the performance of duties regarding
QMS (Quality Management System) / EMS (Environment Management System) and product quality
assurance for our customers, we have overall controlof the said functions over overseas subsidiaries as
well.

Environmental Philosophy
and Policy
Environmental Philosophy

Ryoji Otowa
Senior Executive Officer, Head of Quality Assurance Division,and Officer in Charge of Quality and Environment

In pursuit of eco-friendly technologies and manufacturing, the Foster Group, respecting nature, contributes to therealization of an affluent society and an environment where people around the world can fully demonstrate their humanity.

Medium-Term Environmental Policy
1. We conserve the global environment by promoting resource and energy saving in product development and design.
- To set targets with customers and promote reduction of product’s electricity consumption and weight saving.
2. We prevent contamination and reduce CO2 emissions in all the phases of business activities including manufacturing
and disposal.
- Each site to set waste reduction target and execute as action plan.
- Reduction target (Annual average): to reduce 1% of CO2 emissions per sales unit (Target for 2020: 7.73% or more
reduction from 2012)- To create an energy saving plan at manufacturing process in order to reduce CO2 emissions.
- To grasp clean energy usage rate at each site and promote clean energy utilization.
3. We strive for the continual improvement of environmental performance in compliance with environmental laws andregulations and other requirements.
- To reduce utilization of Volatile Organic Compounds by setting the reduction target in order to satisfy increasing
customer requirement.
4. We raise the awareness of environmental protection and biodiversity and thereby develop human resources who
contribute to society.
- To implement biodiversity protection education to employees and build a base for biodiversity protection activity
rooted in the area of each site.
- Understanding water risks on a world-wide level, each site to grasp and control their water consumption anddrainage.
5. We maintain and improve environmental management system and promote external communication.
- To maintain and improve environmental management system and environmental performance by achieving smooth
shift to ISO14001:2015 at each site.

Environmental Management Structure
We have established an environment management system based on ISO 14001 at the headquarters and overseas
manufacturing sites and embody the Foster Group’s environment philosophies and mid-term environmental policies.
At headquarters, we monitored the activities conducted at each site and check their results.
45

Environment

Environment Management System based on ISO14001
The headquarters defined the Head Office of Foster Electric (1-1-109, Tsutsujigaoka, Akishima City, Tokyo, Japan) and theMiyazawa office of the Fostex Company (512, Miyazawa-cho Akishima City, Tokyo, Japan), as registered organizations
and addresses, and switched to ISO 14001: 2015.
Each overseas manufacturing site also switched to ISO 14001: 2015.
In addition, we present the ISO14001 certification upon the request of stakeholders.

Environmental Activities
Environmentally Friendly Headquarters Building
Our headquarters, which employed technologies to reduce its environmental burden, implemented lighting control using
daytime sunlight, which effectively brings daytime sunlight into the office, and human body sensor light control to achieve
optical controls for automatically turning off lights. In addition, by adopting air conditioning control technologies, including
air conditioning using outside air, which brings in natural air to maximize the efficiency of air conditioning, an ice thermal
storage air conditioning system,* which enables a peak cut in the daytime use of electricity, and a double-skin facade,which improves heating efficiency, the efficiency has been maximized for electrical use. In addition, thorough temperature
control through the Cool Biz and Warm Biz campaigns, support for the private-public initiative of Premium Fridays as part of
the work-style reform, and the initiative to turn off all the lights in the building further helped to control electricity use. Basedon the mid-term environmental plan, by procuring clean energy prior to the other sites in the Group, the headquarters has
controlled greenhouse effect gas emissions and strongly promotes active participation in climate control measures.
* A system to use the air conditioner during the daytime that cold air is made from the ice produced during the nighttime.

Air conditioning using outside air (headquarters)

Management of Chemical Substances
The Group has set forth its autonomous management standard, in which applicable laws, regulations and customers’
requests are reflected, for handling environmentally hazardous substances contained in its products to minimize theirimpact on the environment. We eliminate any controlled substances from our products via eco-friendly procurement andmanagement of necessary parts and/or materials purchased.
Based on the aforementioned scheme, we have established an optimum management system for the efficient search andcollection of information about chemical substances that are contained in parts and materials and precise communicationof information necessary in the supply chain. We have taken all possible measures to ensure that we do not miss to copewith annually added chemical substances that need to be monitored in accordance with the EU’s RoHS2.0 Directive andthe REACH regulations implemented in 2013. In addition, to ensure communications of related information, we provide
our suppliers with briefing meetings every year primarily at our overseas sites. We monitor 41 substances as controlled
substances and banned heavy metals such as lead, cadmium, mercury and hexavalent chromium together with otherhighly harmful substances from use so that our products are completely free of these substances.
In compliance with the trend of legal regulations and/or customer requests, our products are manufactured withoutcertain chemical substances, such as certain phthalate esters which are used as plasticizing agents (referred to as certain
phthalate ester-free manufacture).
46

Environment

Zero Emissions
At headquarters we are engaged in the recycling of waste,etc., (waste that contains recyclable elements) through thesorting and separation of regular waste, plastics and industrial
waste, together with comprehensive awareness raising
activities. Already assembled products and parts are being
recycled into raw materials through a professional recycling
business operator, as part of our continuing activities aiming
to achieve zero waste emissions from our business activities.

Recycled materials being carried out

Mini-clean Activities
As part of our CSR activities, we conduct mini-clean activities, clearing the footpaths and sidewalks around ourheadquarters, and develop an annual plan to be implemented monthly. We also actively participate in the Akishima
Cleanup movement, and are working towards the beautification of our local area, in which all departments including themembers of the Environment Committee can participate.

Mini-clean activity (1)Mini-clean activity (2)Mini-clean activity (3)Environmental activities with the town of Iwaizumi
Aiming to become a company trusted by the local community, we are providing support for global environmental
preservation activities through Akishima-shi Environment Consideration Enterprise Network. We are also taking part in
the Arbor Day for Future and other activities run by Akishima City and the town of Iwaizumi (in Iwate Prefecture, closed thefriendship city agreement with Akishima City) as part of our carbon offset initiatives. For reconstruction from the damage
due to the typhoon in August 2016, we supplied environmentally friendly dishwashing detergent as a member of the
Akishima-shi Environmental Consideration Enterprise Network.

Global environmental preservation activities with the town of Iwaizumi, Iwate Prefecture

47

Environment

Activities related to biodiversity
Based on environmental policies, and aiming to improve awareness of environmental preservation and biodiversity,
we participate in biological fact-finding investigations associated with Akishima City’s Basic Environmental Plan andenvironmental learning sessions, which introduces nature-watching in Akishima City, endangered species preservation
activities, among other topics. This term, we also plan to participate in local volunteer activities. We will consider the valueof biodiversity in the community and prepare environmental preservation initiatives through our activities.

Environmental learning session (1)Environmental learning session (2)Environmental Activities at Overseas Sites
Our manufacturing sites across the world are also implementing environmental education and training.

Practice against chemical leakage at the factory (China)

ISO 14001: 2015 Training (Vietnam)

Our China plant (PANYU) purifies wastewater from the manufacturing process of speaker diaphragms through a filter andrecycles it as cooling water.
In addition, it reuses the wastewater from the lavatory for toilets.

Filter for wastewater installed on the roof (China)

Device that collects wastewater from the lavatory and feeds itwith a pump (China)

48

Environment

GHG Protocol Scope 3
Environmental Education
The Foster Group is continuing its environmental management
activities, based on the belief that such activities are vital to continue
as a centennial company. At the headquarters, in preparation forthe calculation of the GHG protocol*1 Scope 3, we attended a
training on decarbonized society and reduction of supply chain
emission*2 provided by the Ministry of the Environment during theEnvironment Month (June 2017).
*1: GHG protocol (Greenhouse Gas Protocol)
Standards for the calculation of greenhouse effect gas, whichwere developed mainly by the WBCSD (World BusinessCouncil for Sustainable Development) and WRI (World
Training in the reduction of supply chain emissions
Resources Institute)(headquarters)*2: A supply chain refers to flow processes from procurement tomanufacturing, distribution, sale, and disposal of parts and materials.
The greenhouse effect gas generated from those processes is called the supply chain emissions, which consists of
Scope 1, 2, and 3.
Scope 1: Greenhouse effect gas emitted directly from the reporting company itself (fuel combustion and industrial
process)
Scope 2: Greenhouse effect gas emitted indirectly from the use of electricity, heat, and steam, which are supplied
from other companies
Scope 3: Greenhouse effect gas emitted indirectly, which does not fall under Scopes 1 and 2 (emission from othercompanies associated with the activities of the reporting company)

Emission of Greenhouse Effect Gas (Scope 1, 2, and 3)
We have set the “CO2 reduction target for 2020” based on the Medium-Term Environmental Policy and are conducting
reduction activities on a group-wide basis. In addition to the emissions from our offices and plants (Scope 1 and 2), we
have been calculating the emissions in the overall supply chain (Scope 3) since last year. We took part in “Supply Chain
Emission Calculation Support,” which was a project by the Ministry of the Environment in 2017, and calculated theemissions in Scope 3 from the Group in Japan. Because we do not have our own plants in Japan, Categories 11 and4 account for a high percentage of the calculated emissions, which is 75% of overall emissions. In the future, we will
expand the calculation range globally and work on reducing the
Breakdown of greenhouse effect gas emissions in fiscal 2016*3
greenhouse effect gas in the entire supply chain.
Category 1:
Purchased products and services
5%

Other categories
4%

Scope 1+2
1%

 Calculation method: Calculated based on the “General
Guidelines on Supply Chain GHG Emission Accounting”(Ver. 2.2) released by the Ministry of Environment andMinistry of Economy, Trade and Industry.

Category 9:
Transportationand distribution(downstream)
Emissions in Scope 1, 2, and 3
15%

in fiscal 2016
Scope 1+2: 1,396 t-CO2
Scope 3: 108,543 t-CO2
Total: 109,939 t-CO2
Category 4:
Transportation and distribution(upstream)
32%

49

Category 11:
Use ofproducts sold43%

*3: The calculation results can be viewed on the Ministry ofEnvironment’s website “Green Value Chain Platform”:
https://www.env.go.jp/earth/ondanka/supply_chain/gvc/
en/accounting_information.html#2017

Environment

Environmentally Friendly Products
The Foster Group designs and develops products by taking into account all aspects of product life-cycles; from theprocurement of raw materials to the manufacturing, use, disposal and recycling of its products. We strive to develop andprovide products with the least possible environmental burden, such as through the manufacture of eco-friendly productsthat minimize the use of harmful chemical substances, and the creation of lightweight products engineered to reduce
CO2 emissions.
Lightweight speaker for in-vehicle use, eco-friendly speakers
 We developed a lightweight speaker, optimum for next-generation eco-friendly
vehicles such as electric vehicles (EVs). We reduced the weight of the speakersignificantly to 140 grams for a speaker with a diameter of 17 centimeters while
minimizing the suppression of its sound pressure level, a fundamental performancefeature for speakers. Its advanced design has taken into account the need to reduceoverall CO2 emissions from vehicles.
 Frame is made of a specific polypropylene (PP) material and succeeded in reducing
the frame weight while maintaining practical strength through profile optimization.
 We have employed adhesives that do not contain harmful solvents and put themto practical use with the aim of reducing the volume of VOC remaining inside thepassenger cabin of vehicles. We are taking steps to eliminate solvents in new models.
 The diaphragms and the center caps, made out of recyclable paper with the highwaterproofing of speakers required for in-vehicle use.
 As one aspect of our environmental activities, we have developed and foundpractical application for speakers that reduce the use of solder. We will disseminate
this activity to all Group companies and expand in mass production.

Lightweight speaker for in-vehicle use

Headphones and headsets
For headphones and headsets, we have been active in incorporating environmental considerations in our product and/or process design. For reducing the substances in our products that burdens the environment, we address the most upto-date information regarding country-specific legal requirements and the RoHS2 to promote proposals to our customers
and dissemination to all the Group companies. We have reduced energy consumption in manufacturing and the volumeof raw materials that would be disposed as wastes. We also have been keen on measures to minimize the volume ofwaste materials, reuse raw materials by introducing new equipment and developing products using natural materials
as well as addressing the manufacturing of more eco-friendly products with less use of adhesives and developing a
manufacturing method using less solder.

Environmentally friendly headphones and microspeaker

Active subwoofer PM-SUB8
Power-saving active subwoofer using a Class D digital amplifierThis product is equipped with the auto-standby functionthat automatically reduces power consumption after input
signals have remained at a certain level or lower for acertain period of time.
It also allows users to turn ON/OFF the auto-standby
function.

50Corporate Profile
and Financial
Information
The Group operates 42 bases in 15 countries and regions worldwide as bases for development, manufacturing and sales bases.
We have established a sophisticated production system integrating processes from components manufacturing to finished goods manufacturing.

Group Companies

Sales/Development Bases

Sales Bases

Manufacturing Bases

OthersEUROPE

3

bases

JAPAN

9

bases

AMERICAS

8

bases

ASIA
(excluding Japan)

Group Companies

22

The Group operates 42 bases in 15 countries and regions worldwide as bases for development, manufacturing and sales bases.
bases
We have established a sophisticated production system integrating processes from components manufacturing to finished goods manufacturing.
Sales/Development Bases

Sales Bases

Manufacturing Bases

OthersCompany Information

Stock Information

Company Profile (As of March 31, 2018)

Status of Shares (As of March 31, 2018)

EUROPE
Foster Electric Company,
LimitedJapan)
ASIA (Excluding
FoundedFOSTER
ELECTRIC CO.,June
LTD. 20, 1949
FOSTER ELECTRIC CO., (HONG KONG) LTD.
bases
(HEADQUARTERS)¥6,770,360,135
GUANGZHOU PANYU JIU SHUI KENG
CommonStock
ListedontheFirst Section
the Tokyo
Stock
KANSAI SALES OFFICEFOSTERofELECTRIC
FACTORY*Outsourcee
Exchange
IGA WAREHOUSE
FOSTER ELECTRIC CO., (GUANGZHOU) LTD.
1-1-109, Tsutsujigaoka, Akishima City, Tokyo,
FOSTEX COMPANY
FOSTER ELECTRIC CO., (NANNING) LTD.
Headquarters
196-8550, JapanFOSTER MICRO ACOUSTICCOMPANYFOSTER(switchboard)
ELECTRIC CO., (HEYUAN) LTD.
Phone:+81-42-546-2311
FOSTER
TRANSPORTATIONSLTD.
FOSTER ELECTRIC CO., (TAIWAN) LTD.
44,983;
Numberofemployees
includes ouroutsourcee
in Panyu, PTE.
China.
FOSTER
ELECTRONICSNumber
LTD.
FOSTER
ELECTRIC (SINGAPORE)LTD.
URL KIGYOU KABUSHIKI
http://www.foster-electric.com/
FOSTER
KAISHAPENANG OFFICE

Company Name
JAPAN

3

ESTec JAPAN CORPORATIONPT FOSTER ELECTRIC INDONESIA

Directors and Corporate Auditors (As of June 21,ASIA
2018)

FOSTER ELECTRIC IPO (THAILAND)
LTD. Japan)(excluding

Senior Executive
Officer (THILAWA)
Hiromi Yoshizawa
Terushige
Nagasawa
FOSTER
ELECTRIC
CO.,
LTD.
Senior Managing Director Atsushi Narikawa
Senior Executive Officer Takuro Yamaguchi
bases
Senior Managing Director Lu San Tie
Senior Executive Officer Masatoshi Kohama
Managing Director Kazuhiro Kishi
Senior Executive Officer Tatsuhito Tanaka
Director
Senior Executive Officer Ryoji Otowa
Hidetoshi Shirakawa
Company
Information
Director*1
Executive Officer Yasuhide Takahara
Minoru MatsumotoCompany
Profile(As of March 31,Executive2018) Officer Naoki Kanai
Director*1
Chieko Matsuda
Standing Corporate
Company
NameAuditor
FosterElectric
Company,Executive
LimitedOfficer Yuji Harada
Tsutomu
Inokuma*2
Corporate AuditorJune
Executive Officer Roy Ching-Sheng Chen
Founded20, Ino1949
Takuma*2
Corporate Auditor¥6,770,360,135
Executive Officer Oh In-Yong
Takashi Suzuki*2
CommonStockon Gotothe First Section of the Tokyo Stock
Corporate
AuditorListed
Yasuhiro
President and Representative Director

22

Exchange*1 Minoru Matsumoto and Chieko Matsuda are Independent Directors.
1-1-109,
Tsutsujigaoka,
Akishima
City, Tokyo,*2 Takuma Ino, Takashi
Suzukiand Yasuhiro Goto
are Independent
Corporate Auditors.
Headquarters
196-8550, Japan
Phone:+81-42-546-2311
Info r m ati
o n for S h a re h o l d(switchboard)ers
NumberFiscalofYear 44,983;From April 1 to March 31 of each year
employees
includes our outsourcee in Panyu, China.
Ordinary General NumberJuneof each year
https://www.foster-electric.com/
URLMeeting of Shareholders
http://www.foster-electric.com/
Ordinary General Meeting of Shareholders: March 31

Record dateYear-end dividends: March 31
Directors
and Corporate
Auditors
Interim dividends:
September (As30 of June 21, 2018)of Unit
Shares Yoshizawa
100
PresidentNumber
and Representati
ve Di(“tangen”)
rector Hiromi

Senior Executive Officer

Terushige Nagasawa

Stock Transfer Agency
Department,
Head Office ofSeniorTransfer
Managing Director
Senior Executive
Officer Takuro
Agent Atsushi Narikawa
Yamaguchi

Transfer Agent Branch Mizuho Trust & Banking Co., Ltd.
Tokyo
Senior Managing Director Lu San Tie1-2-1, Yaesu, Chuo-ku,
Senior Executive
Officer Masatoshi Kohama
Nihon Keizai Shimbun(dailyOfficer
newspaper)Managing
Senior Executive
Tatsuhitoissued
Tanakain theMediaDirector
for Public Kazuhiro
Notice Kishi
Metropolis of Tokyo

Total number of shares authorized
to be issued by the Company:

AMERICAS
Distributionof Shareholders by Shareholder Type
Financial
FOSTER ELECTRIC(U.S.A.), INC.

FOSTER ELECTRIC (VIETNAM) CO., LTD.

Foreign entities, etc.

80,000,000 shares
JAPAN
FOSTER ELECTRIC (DA NANG) CO., LTD.

9

Total
number ofshares NGAI)
issued:CO., LTD.
FOSTER
ELECTRIC(QUANG
bases 26,931,051 shares
FOSTER ELECTRIC (BAC NINH) CO., LTD.

institutions
42.6%DETROIT OFFICE
39.8%

Individuals andothers10.7%

EL PASO OPERATIONSLOS ANGELES OFFICESAN JOSEcompanies
OFFICE
Securities
2.0%

FSK (THAILAND)
CO.,
LTD.
Number ofshareholders:

DomesticBOSTON
corporations,
OFFICE etc. 4.9%

ESTec CORPORATION
4,777*Excluding treasury stock

Thomas KL Indústria de Alto Falantes S.A.

ESTec ELECTRONICS (JIAXING) CO., LTD.

AMERICAS

ESTec AMERICA CORPORATION

ESTec Major
VINA CO.,LTD.
Shareholders
ESTec PHU THO CO., LTD.

Shareholder’s
Name
ESTec ELECTRONICS (M) SDN.
BHD.
EUROPE8bases Number ofRatio of
Shares Held Shares Held(Thousand)
FOSTER ELECTRIC (EUROPE) GmbH

ESTec CORPORATION (CAMBODIA) LTD.

(%)

Japan Trustee Services Bank, Ltd. (trust account)

2,937

11.3

The Master Trust Bank of Japan, Ltd. (trust account)

1,766

6.8

GOVERNMENT OF NORWAY

1,202

4.6

1,016

3.9

945

3.6

866

3.3

MUNICH OFFICESWEDEN OFFICE

Mizuho Bank, Ltd.

Stock
The Bank Informationof Tokyo-Mitsubishi UFJ, Ltd.
Statusof Bank
Shares(As of March
31, 2018)
J.P. Morgan
Luxembourg
S.A. 380578

TotalGoldman
number of sharesauthorizedDistribution of Shareholders by Shareholder
Type
Sachs
International532
2.0
to be issued by the Company:
Financial
Individuals andJapan Trustee Services Bank,Foreign
Ltd. entities,(trust etc.
account
9)
460others 1.7
institutions

80,000,000 shares

%
42.6
39.8%
DFA INTL SMALL CAP VALUE
PORTFOLIO

Total number of shares issued:

Japan Trustee Services Bank, Ltd. (trust account 5)
26,931,051
shares45810.7%1.7
447

1.7

Treasury stock (1,090,449 shares) is excluded for the calculation of the “Ratio of Shares Held.”
Securities companies 2.0%
Number of shareholders:

4,777

Domestic corporations, etc. 4.9%
*Excluding treasury stock

Inquiries for Handling of Stocks

The securities company with which you havea business connection
Shareholders who have a special accountStock Transfer Agency Department,
NumberMizuho
of Trust
Ratio& of
Banking Co., Ltd.
*Shareholders are not allowed
to make any
Shareholder’sName
Shares Held Shares Held
2-8-4, Izumi, Suginami-ku, Tokyo,168-8507,
Japan
stock transactions other than the purchase of(Thousand)(%)
Tel: 0120-288-324 (toll-free telephone service in Japan)
shares less than one unit (“tangen”).
Japan Trustee Services Bank, Ltd.
(trustaccount)
2,937
Head office and branches nationwide of 11.3
MizuhoPayment of unpaid dividends
Trust & Banking Co., Ltd., and Mizuho Bank, Ltd.
Shareholders who have an

Major
Shareholders
account
at a securities company

The Master Trust Bank of Japan, Ltd. (trust account)

1,766

6.8

GOVERNMENT OF NORWAY

1,202

4.6

Mizuho Bank, Ltd.

1,016

3.9

447

1.7

Senior Executive Officer Ryoji Otowa
Hidetoshi Shirakawa
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
945
3.6
Director
Executive OfficerNumber
MinoruMatsumoto
Yasuhide Takahara
Information on Individual
System relating to stocks*1
J.P.
MorganBank
Luxembourg
S.A.
380578866
3.3
Director
Executive
Officer
ChiekoNaoki
Kanaigovernment is required for tax procedures relating to stocks. For this reason, shareholders
Your Matsuda
Individual Number
notifiedby your
local
must notify
theirstockbrokers
oftheir
Individual
Numbers.
Standing Corporate Auditor Tsutomu
Executive
Officer
InokumaYuji Harada
Goldman Sachs International532
2.0
Contact
Inquiries
aboutRoyIndividual
Corporate Auditor*2 Takuma
Executive
OfficerIno Information for
Ching-ShengNumber
Chen Notifications
Japan Trustee Services Bank, Ltd. (trust account 9)
460
1.7
If your shares are in an account managed by a securities company or stockbroker: Please contact your broker.
Corporate Auditor*2 Takashi Suzuki
Executive Officer Oh In-Yong
If your shares are not managed througha securities company or DFA
stockbroker:
INTL SMALL CAP VALUE PORTFOLIO
458
1.7
Corporate Auditor*2 Yasuhiro Goto
Stock Transfer Agency Department, Mizuho Trust & Banking Co., Ltd.
Tel: 0120-84-0178
Director

Notice*1*1 Minoru Matsumoto and Chieko Matsuda are Independent Directors.
*2 Takuma Ino, Takashi Suzuki and Yasuhiro Goto are Independent Corporate Auditors.

Japan Trustee Services Bank, Ltd. (trust account 5)

Treasury stock (1,090,449 shares) is excluded for the calculation of the “Ratio of Shares Held.”I n fo rm atio n fo r S ha re hol d e r s
Fiscal Year51
Ordinary General
Meeting of Shareholders

010_0727302983006.indd

Record date1

From April 1 to March 31 of each year
June of each year
Ordinary General Meeting of Shareholders: March 31
Year-end dividends: March 31

Inquiries for Handling of Stocks
Shareholders who have an
account at a securities company
Shareholders who have a special account*Shareholders are not allowed to make any

The securities company with which you havea business connection
2018/06/21
Stock Transfer Agency Department, Mizuho Trust &Banking Co., Ltd.

10:16:54

Back-loaded Horn Type Speaker Box

Wireless Stereo Earphones

BK208-Sol

TE05BT

A produced-to-order back-loaded horn type speaker box for the 20cm
cone full-range speaker FE208-Sol (limited product) reborn with a new
design philosophy.
Performance
forforthe
Fiscal
Year
March
31,
2018
Performancethe
Fiscal
Year
ended
March
31,
2018
Uses basswood
plywoodsuitedtoendedacoustics
so youcanenjoy thesound of rich base and natural reverberation.

Financial
FinancialHighlights
Highlights

Produces clear mid- to high-range sound and powerful bass
reverberation. Produces expressive, realistic sound even as wirelessearphones.

Net
Netsalessales

OperatingOperatingincome
incomeOrdinary
Ordinaryincome
incomeNetNetincomeattributableto ownersof theparentincomeattributableto ownersof theparent¥184,800¥184,800million
million¥9,307¥9,307million
million¥9,062¥9,062million
million¥4,265¥4,265million
million(up(up(up(up(up(up14.9%%
y-o-y)
14.9
y-o-y)(up(upNet
Netassets
assets(Corporate Profile
and Financial
Information

Total
Totalassets
assets214.1%%
y-o-y)
214.1
y-o-y)

200.3%%
y-o-y)
200.3
y-o-y)

292.0%%
y-o-y)
292.0
y-o-y)

NetNetincomeperpershare
assetsperpershare
incomeshare NetNet
assetsshare

EquityEquityratio
ratio

ROE
ROE

¥66,792
million¥101,350¥2,412.06
Wireless Speaker
Headphones¥66,792
millionSystem¥101,350million
million ¥165.78¥165.78 Custom¥2,412.06

61.2
61.2%%

7.0
7.0%%¥63,901
millionmillion
as at astheatend
previous
FY) FY) (¥102,409
millionmillion
as at astheatend
FY) FY) (¥41.16
in thein previous
fiscalfiscal
year)year) KOTORI(¥2,316.09
as atastheatmeetsendFY) Tatsunoko% as%atastheof previous
FY) FY) ( 1.8% in%theprevious
fiscalyear)(¥63,901
theofendof previous(¥102,409
theofendpreviousof previous(¥41.16
the previous(¥2,316.09
the ofendpreviousof previous
FY) (58.2(58.2
at endthe endof previous( 1.8
in theprevious
fiscalyear)
KOTORI
501
Built-in bass actuator (transducer) developed in-house produces highquality bass sound. Various body and speaker grill color combinations
are available.

Collaboration earphones commemorating the 55th anniversary of
Tatsunoko Production Co., Ltd., an animation studio that has
produced many masterpieces.
(Japanese Only) http://kotori.fostex.jp/

Overview by Segment (Consolidation)

010_0727302983006.indd
010_0727302983006.indd 3 3

Speaker Segment
Net
sales

¥75,520 million

2018/06/21
2018/06/21 10:16:56
10:16:56

Mobile Audio Segment

40.9%(up 0.9% y-o-y)Shipments of car speaker and speaker systems
were firm and shipments of flat TV speakers andspeaker systems, as well as audio speakers, werein line with projection.

Net
sales

¥103,513 million

Other Segment

56.0%(up 28.9% y-o-y)

We saw full-scale shipments of new headset
models for a major customer, of which production
began last year.

Net
sales

¥5,886 million

3.1%(up 2.1% y-o-y)In this segment, including micro acoustic
components and “FOSTEX” brand products, we
saw significant improvement in productivity in the
micro acoustic component business.

*The above includes inter-segment sales.

010_0727302983006.indd

4

2018/06/21

10:17:0252

Corporate
History53

Corporate
History

201854

Data Table

Economic data
G4-EC5
Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation.
Ratio (%)
The sameratio for maleand female

Location*1

Japan

Asia

FOSTER ELECTRIC CO., LTD. (Headquarters)

100

FOSTER ELECTRIC CO., (HONG KONG) LTD. and group companies

172

FOSTER ELECTRIC (SINGAPORE) PTE. LTD. and group companies

N/A

FOSTER ELECTRIC (VIETNAM) CO., LTD. and group companies

100

North America

FOSTER ELECTRIC (U.S.A.), INC. and group companies

100

EuropeFOSTER ELECTRIC (EUROPE) GmbH and group companies

221*1 Significant locations of operations: The headquarters and 11 main sites whose operation processes are to be checked based on the J-SOX.

G4-EC6
Proportion of senior management*3 hired from the local community*2 at significant locations of operation.
Location*1

Ratio (%)

Japan

FOSTER ELECTRIC CO., LTD. (Headquarters)

100

Overseas

Significant locations of operations74*1 Significant locations of operations: The headquarters and 11 main sites whose operation processes are to be checked based on the J-SOX.
*2 Local community: In this data, it refers to the country and region to which the sites above belong.
*3 Senior management: In this data, it refers to department managers or highter, excluding directors.

G4-EC9Proportion of spending on local suppliers at significant locations of operation.
Location*1

GRI

Rate (%)

All procuring sites in China

Local procurement rate of materials at overseas manufacturing sites (China).*2

80

All procurement sites in ASEAN

Local procurement rate of materials at overseas manufacturing sites (Vietnam,
Indonesia, and Myanmar).

49*1 Significant locations/regions/local areas of operation: The above-mentioned areas where Foster’s manufacturing sites reside.
*2 An index that indicates the trade amount with corporate bodies in the targeted site, out of the material procurement trades.

Environmental data
G4-EN2
Percentage of materials used that are recycled input materials.
Location
Domestic
and overseas
companies

All procuring sites

Rate (%)

14

Recycled materials as a percentage of all resin materials purchased.

G4-EN3
Energy consumption within the organization.
Location
Japan

Asia

North America

Gasoline(liter)

Type-C
Heavy Oil(liter)Diesel Oil(liter)LPG(kg)

Natural Gas(m3)

City Gas(m3)

FOSTER ELECTRIC CO., LTD. (Headquarters)

2,255

10,591000013,367GUANGZHOU PANYU JIU SHUI KENG FOSTER
ELECTRIC FACTORY (*outsourcee)

45,307

81,364

12,8620073,2370

FOSTER ELECTRIC CO., (NANNING) LTD.

14,63762,54915,67900

0

0

FOSTER ELECTRIC CO., (HEYUAN) LTD.

19,102

53,17523,8460072,5670

FOSTER ELECTRIC (VIETNAM) CO., LTD.

30,15632,464

22,1200133,830

00

FOSTER ELECTRIC (DA NANG) CO., LTD.

10,765

18,794

11,624060,1280

0

FOSTER ELECTRIC (QUANG NGAI) CO., LTD.

4,700

4,104

1,000

0

30,091

0

0

FOSTER ELECTRIC (BAC NINH) CO., LTD.

18,51335,7211,869

046,6010

0

PT FOSTER ELECTRIC INDONESIA

6,232

6,302

10,593240

14,2320

0

FOSTER ELECTRIC (THILAWA) CO., LTD.

4,517

11,03725,53700

0

0

FOSTER ELECTRIC (U.S.A.), INC. (EL PASO OPERATIONS)
Total

55

Purchased
Electricity
(MWh)

401

773

0

0

133

0

49,008

156,585

316,875

125,130240

285,015

145,804

62,375

Data Table

G4-EN5/G4-EN6/G4-EN15/G4-EN16/G4-EN18/G4-EN19
Energy intensity. / Reduction of energy consumption. / Direct greenhouse gas (GHG) emissions (Scope 1) / Energy indirect greenhouse gas (GHG) emissions (Scope 2). / Greenhouse gas(GHG) emissions intensity. /Reduction of greenhouse gas (GHG) emissions.
GRI

2012

2013

2014

2015

2016

2017

Scope 1
(Direct greenhouse gas emission from business activities)(Unit: t-CO2)

2,198

2,403

2,431

2,155

2,549

2,381

Scope 2
(Indirect greenhouse gas emission due to energy usage inbusiness activities)(Unit: t-CO2)

87,232

91,54588,56886,66888,32887,828

Scope 1+2 total(Unit: t-CO2)

89,43093,94890,99988,82390,877

90,209Unit of net sales(Unit: t-CO2/100 million yen)

62.3

56.6

48.1

46.5

56.5

48.8

Scope
FOSTER ELECTRIC CO., LTD. (Headquarters) and 10 overseas manufacturing sites as in EN3)
CO2 conversion factor (Electric)
Japan: Ministry of Environment, 2012 factor based on CO2 conversion factor of electric power supplier (2013)
Overseas: IEA, 2012 factor based on CO2 emissions from fuel combustion (2014)
CO2 conversion factor (Fuel)Japan/overseas: Factor based on the “Greenhouse gas emissions calculation and report manual” released by the Ministry of Environment, Ministry of Economy, Trade and Industry.
Global warming potential
Incorporated 100 year value of IPCC Fifth Assessment Report (AR5)Based on the “Low Carbon Implementation Plan” by the electrical and electronics industries in Japan, we have set the medium-term target for 2020 of a 1% reduction in emissions per
year per sales unit, using the fiscal 2012 value as a standard).

CO2 emissions(t-CO2)(t-CO2/100M¥)

120,000

100

100,000

93,94889,43080,00062.3

90,99990,87788,823

56.6

90,209

56.5

60

48.1

60,000

80

48.8

46.5

40

40,00020

20,000

0

0
2012

2013

2014

Total emissions

2015

2016

2017

Unit of net sales

G4-EN8/G4-EN22
Total water withdrawal by source. / Total water discharge by quality and destination.
Location
Japan

Asia

North America

Water
consumption(Unit: m3)

FOSTER ELECTRIC CO., LTD. (Headquarters)

9,907

GUANGZHOU PANYU JIU SHUI KENG FOSTER
ELECTRIC FACTORY (*outsourcee)

793,152

FOSTER ELECTRIC CO., (NANNING) LTD.

104,526

FOSTER ELECTRIC CO., (HEYUAN) LTD.

375,767

FOSTER ELECTRIC (VIETNAM) CO., LTD.

416,423

FOSTER ELECTRIC (DA NANG) CO., LTD.

111,479

FOSTER ELECTRIC (QUANG NGAI) CO., LTD.

58,139FOSTER ELECTRIC (BAC NINH) CO., LTD.

86,557PT FOSTER ELECTRIC INDONESIA

13,289FOSTER ELECTRIC (THILAWA) CO., LTD.

108,654

FOSTER ELECTRIC (U.S.A.), INC. (EL PASO OPERATIONS)
Total

3,008
2,080,901

56

Data Table

G4-EN17/G4-EN30

Other indirect greenhouse gas (GHG) emissions (Scope 3). / Significant environmental impacts of transporting products and other goods and materials for the organization’s operations, andtransporting members of the workforce.
Scope 3 emissions
Emissions(Unit: t-CO2)

Category
1. Purchased products and services

5,541

2. Capital goods

1,168

3. Fuel and energy activities that do not fall under Scopes1 and 2

96

4. Transportation and distribution (upstream)

34,8505. Waste generated from operation

94

6. Business trip

513

7. Employee commute

235

9. Transportation and distribution (downstream)

16,232

10. Fabrication of sold products

1

11. Use of sold products

46,962

12. Disposal of sold products

2,851
Total

108,543

Calculation range: domestic companies, FOSTER ELECTRIC CO., LTD. (headquarters), FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.
Calculation period: Fiscal 2016

G4-EN23
Total weight of waste by type and disposal method.
Weight of disposed waste
Hazardous Waste (unit:ton)
Location
Japan

Waste
Generation

FOSTER ELECTRIC CO., LTD. (Headquarters)
GUANGZHOU PANYU JIU SHUI KENG FOSTER ELECTRIC
FACTORY (*outsourcee)

Asia

Recycled

Non-hazardous Waste (unit:ton)Final Disposal

Waste
Generation

Recycled

Final Disposal

0.46

0.00

0.46

166.30

74.29

92.01

220.000.00

220.001,221.00

1,221.00

0.00
204.38FOSTER ELECTRIC CO., (NANNING) LTD.

34.02

0.00

34.02

204.380.00

FOSTER ELECTRIC CO., (HEYUAN) LTD.

65.00

65.00

0.00

370.34370.340.00

FOSTER ELECTRIC (VIETNAM) CO., LTD.

230.81

31.94

198.87

2,095.74

1,862.79

232.95

FOSTER ELECTRIC (DA NANG) CO., LTD.

150.426.01

144.41997.75591.56406.19FOSTER ELECTRIC (QUANG NGAI) CO., LTD.

25.63

0.00

25.63

307.80178.59129.22

FOSTER ELECTRIC (BAC NINH) CO., LTD.

79.19

62.23

16.96

717.93403.43314.50PT FOSTER ELECTRIC INDONESIA

110.360.00

110.36

195.21

0.00

195.21FOSTER ELECTRIC (THILAWA) CO., LTD.

6.54

0.00

6.54

49.88

3.00

46.88

North America FOSTER ELECTRIC (U.S.A.), INC. (EL PASO OPERATIONS)

0.07

0.00

0.07

711.00585.00126.00922.51

165.18757.33

7,037.33

5,290.00

1,747.34

Investment
Unit(one thousand yen)

Cost
Unit
(one thousand yen)

Total

G4-EN31
Total environmental protection expenditures and investments by type.
Environmental preservation cost (classification through business operations)
Location

Category

Key activity and the outcome(1) Business area cost

Breakdown

Japan

FOSTER ELECTRIC
CO., LTD.
(Headquarters)

038,523(1)-1 Pollution prevention costs

Air and water control-related prevention
countermeasures0530(1)-2 Global environmental
conservation costs

Prevention of global warming, as well as
energy-saving measures

0

1,238

(1)-3 Resource circulation costs Waste disposal and recycling(2) Upstream/downstream cost Green purchasing expenses(3) Administration costs

Environmental education, EMS
construction expenses etc.

(4) R&D costs

Research and development(5) Social activity costs

Tree planting(6) Environmental damage handling costs
Total

0

36,75600011,3730

1,648,287

0

560

0

0

0

1,698,742* “Investment” refers to equipment investments for the purpose of environmental conservation. “Cost” refers to personnel and miscellaneous expenses/costs incurred forenvironmental conservation activities.

G4-EN32
Percentage of new suppliers that were screened using environmental criteria.
Location
Domestic and overseas companies

All procuring sites

Rate (%)
100

We have distributed the environmental rules to all suppliers, updated them, and also obtained environment-related materials.

57

Data Table

Social data
G4-LA1
Total number and rates of new employee hires and employee turnover by age group, gender and region.
LocationJapan

Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.

Overseas

All overseas companies

Number of new employees hired (person) Number of displaced employees (person)
Male

Female

Total

Male

Female

Total

30

13

43

21

8

29

2,636

9,342

11,978

3,072

15,93519,007G4-LA2
Benefits provided to full-time employees that are not provided to temporary or part time employees, by significant locations of operation.
Location*1

Benefits provided to full-time employees that are not provided totemporary or part time employees

Japan

FOSTER ELECTRIC CO., LTD. (Headquarters)

Insurance, benefit plan, bonus, retirement plan, leave system andothersOverseas

Significant locations of operations

Insurance, benefit plan, bonus, retirement plan, leave system andothers*1 Significant locations of operations: The headquarters and 11 main sites whose operation processes are to be checked based on the J-SOX.

G4-LA3Return to work and retention rates after parental leave, by gender.
Number of employees who have or exercised those rights
Location

Total number of employees who
have those rights (person)*1
Male

FemaleTotal number of employees who
have exercised those rights (person)*2

Total

Male

Female

Total

Japan

Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.

32

5

37

1

5

6

Overseas

All overseas companies

350

5,447

5,797

234

3,231

3,465

Return to work and retention rates regarding the above
Location

Total number of employees who
have returned to work (person)*3
Male

Japan

Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.

Overseas

All overseas companies

FemaleReturn to work rate
after parental leave (%)

Total

Male

Female

Total

1

5

6

100

100

100

230

2,735

2,965

98

85

86

*1 Number of employees that had the right to take parental leave during the applicable period.
*2 Number of employees that had the right to take parental leave and exercised it during the applicable period.
*3 Number of employees that had the right to take parental leave, exercised it, and returned to work during the applicable period.

G4-LA5Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs.
Location

Rate
(%)

Japan

Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.

100

Overseas

All overseas companies

100

G4-LA6
Type of disability and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities by region and gender.
Location

Total working hours (hour)

Number of lost days (day)Female

Total

Japan

Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.

1,035,973

324,570

1,360,543

0

0

0

2

0

2

Overseas

All overseas companies

17,314,764

99,730,784 117,045,548

106

676

782

48

182

230

Location

Male

Female

Total

Total

Male

FemaleFrequency rate*1

Number of work-related fatalities (person)
Male

FemaleNumber of injured employees (person)

Male

Male

FemaleTotal

Severity rate*2
Total

Male

Female

Total

Japan

Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.

0

0

0

1.931

0.000

1.470

0.000

0.000

0.000

Overseas

All overseas companies

1

2

3

2.830

1.845

1.991

0.006

0.007

0.007

Number of work-related injuries or fatalities*1 Frequency rate =		
X 1,000,000
Total working hours
Workdays lost
*2 Severity rate =		
X 1,000
Total working hours

58

Data Table

G4-LA8
Health and safety topics covered in formal agreements with trade unions.
Location

Rate(%)

GUANGZHOU PANYU JIU SHUI KENG FOSTER ELECTRIC
FACTORY (*outsourcee)-

FOSTER ELECTRIC CO., (NANNING) LTD.

-

FOSTER ELECTRIC CO., (HEYUAN）LTD.

-PT FOSTER ELECTRIC INDONESIA

16

FOSTER ELECTRIC (THILAWA) CO., LTD.

-

FOSTER ELECTRIC (VIETNAM) CO., LTD.

6

FOSTER ELECTRIC (DA NANG) CO., LTD.

6

FOSTER ELECTRIC (QUANG NGAI) CO., LTD.

6

FOSTER ELECTRIC (BAC NINH) CO., LTD.

6

ESTec CORPORATION

9

Asia

“-” indicates no applicable agreements. The specialized department promotes health and safety activities in cooperation with the employees.

G4-LA9Training hours (training hours per employee)
Average training hours (hour)
Location

By employee
category

By gender
Male

FemaleManagement

GeneralJapan

Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.

19.93

19.32

15.23

21.75

Overseas

All overseas companies

14.20

11.08

8.44

11.58

G4-LA11Percentage of employees receiving regular performance and career development reviews, by gender and by employee category.
Rate (%)
Location

Male
Japan

Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.

Overseas

All overseas companies

By employee
category

By gender
FemaleManagement

General

100

100

100

100

62

31

84

33

G4-LA12Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority, and other indicators of diversity
Ratio (%)
Location

Less than
30 year old

30-50
year old

Over 50
year oldJapan

Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.

0

0

100

Overseas

All overseas companies

2

32

66

G4-LA13
Ratio of basic salary of women to men by employee category, by significant locations of operations
Ratio (%)
Location*1

By employee category
Management

GeneralJapan

FOSTER ELECTRIC CO., LTD. (Headquarters)

100

100

Overseas

Significant locations of operations

100

100

*1 Significant locations of operations: The headquarters and 11 main sites, whose operation processes are to be checked based on the J-SOX.

59

Data Table

G4-LA14/G4-HR10/G4-SO9
Percentage of new suppliers that were screened using labor practices criteria. / Percentage of new suppliers that were screened using human rights criteria./ Percentage of new suppliers
that were screened using criteria for impacts on society.
Rate
(%)

Location
Domestic
and overseas
companies

All procuring sites

98

Percentage of suppliers who have procurement contract with Foster Groups and agreed to “Foster Group Supplier CSR Code of Conduct” by the end of March, 2018.

G4-50/G4-LA16
Number of grievances about labor practices filed, addressed, and resolved through formal grievance mechanisms.
LocationJapan

Number ofgrievances

Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.

0

G4-HR2
Total hours of employee training on human rights policies or procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained.
Employee training
LocationJapan

Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.

Overseas

All overseas companies

Total hours Employees(hour)
Rate (%)
117

19

65,761

76

G4-HR7
Percentage of security personnel trained in the organization’s human rights policies or procedures that are relevant to operations.
Rate (%)

LocationInternal

Outsourcing

Japan

Domestic Companies: FOSTER ELECTRIC CO., LTD.
(Headquarters), FOSTER TRANSPORTATIONS LTD., FOSTER
ELECTRONICS LTD.

N/A*1

100

Overseas

All overseas companies

100

100

*1 No applicable persons.

G4-HR11Significant actual and potential negative human rights impacts in the supply chain and actions taken.
Rate
(%)

Location
Domestic
and overseas
companies

All procurement sites in Japan and other countries

99

Rate of replies collected for the conflict mineral survey from business associates.

G4-50/G4-HR12
Number of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanisms
LocationJapan

Number ofgrievances

Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.

7

G4-SO3
Total number and percentage of operations assessed for risks related to corruption.
Location
Domestic
and overseas
companies

Total numberof operations

Domestic and overseas locations of operations

13

Rate
(%)

68

There were no significant risks related to corruption identified by the risk assessment.

60

Data Table

G4-SO4
Communication and training on anti-corruption policies and procedures.

Location

Total number and rate of notifications
on anti-corruption related organizations’policies and procedures.
Governance body members
Total

Rate (%)

Japan

Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.

34

100

Overseas

All overseas companies

74

77

G4-50/G4-SO11
Number of grievances about impacts on society filed, addressed, and resolved through formal grievance mechanisms.
LocationJapan

Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.

Number ofgrievances0G4-PR8
Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data.
Total number of substantiated complaints
regarding breaches of customer privacy
Location

Domestic
and overseas
companies

61

All sites in Japan and other countries

Petitions filed byexternal parties
interested andapproved publicly by
the organization

Petitions filed by theregulatory authorities

Total number ofleakage, theft, andloss of customer
data

0

0

1

Data TableGRI Guideline (G4) Table
GENERAL STANDARDDISCLOSURESGRISTRATEGY ANDANALYSIS

ORGANIZATIONAL
PROFILEThis Report or Corporate Site

G4-1

a. Provide a statement from the most senior decision
maker of the organization (such as CEO, chair, or
equivalent senior position) about the relevance ofsustainability to the organization and the organization’s
strategy for addressing sustainability.

P3-4

Top Message

G4-2

a. Provide a description of key impacts, risks, andopportunities.

P3-4-

Top Message
 Securities Report (Japanese)

P51-52
G4-3

a. Report the name of the organization.

Corporate Profile andFinancial Information
 Securities Report (Japanese)

P51-52
G4-4

a. Report the primary brands, products, and services.
P51-52

G4-5

a. Report the location of the organization’s headquarters.
-

G4-6

a. Report the number of countries where the organization
operates, and names of countries where either theorganization has significant operations or that are
specifically relevant to the sustainability topics coveredin the report.

P51-52
P51-52

G4-7

a. Report the nature of ownership and legal form.
-

G4-8

G4-9

G4-10

a. Report the markets served (including geographic
breakdown, sectors served, and types of customers
and beneficiaries).
a. Report the scale of the organization, including:
Total number of employees
Total number of operations
Net sales (for private sector organizations) or net
revenues (for public sector organizations)
Total capitalization broken down in terms of debt andequity (for private sector organizations)
Quantity of products or services provided
a. Report the total number of employees by employment
contract and gender.
b. Report the total number of permanent employees by
employment type and gender.
c. Report the total workforce by employees andsupervised workers and by gender.
d. Report the total workforce by region and gender.
e. Report whether a substantial portion of theorganization’s work is performed by workers who arelegally recognized as self-employed, or by individuals
other than employees or supervised workers, including
employees and supervised employees of contractors.
f. Report any significant variations in employment
numbers (such as seasonal variations in employment in
the tourism or agricultural industries).

P51-52-

P51-52-

P51-52

Corporate Profile andFinancial Information
 Securities Report (Japanese)
Corporate Profile andFinancial Information
 Securities Report (Japanese)
Corporate Profile andFinancial Information
 Securities Report (Japanese)
Corporate Profile andFinancial Information
 Securities Report (Japanese)
Corporate Profile andFinancial Information
 Securities Report (Japanese)

Corporate Profile andFinancial Information
 Securities Report (Japanese)-

Corporate Profile andFinancial Information
 Securities Report (Japanese)

G4-11

a. Report the percentage of total employees covered bycollective bargaining agreements.

-

 Securities Report (Japanese)

G4-12

a. Describe the organization’s supply chain.

- Securities Report (Japanese)

G4-13

a. Report any significant changes during the reporting
period regarding the organization’s size, structure,
ownership, or its supply chain, including:• Changes in the location of, or changes in, operations,
including facility openings, closings, and expansions• Changes in the share capital structure and other capitalformation, maintenance, and alteration operations (forprivate sector organizations) including selection andtermination• Change (including selection and termination) of thelocation of the supplier, structure of the supply chain, or
relation with the supplier- Securities Report (Japanese)62

Data Table

GENERAL STANDARDDISCLOSURES
ORGANIZATIONAL
PROFILE

GRI

G4-14

a. Report whether and how the precautionary approach or
principle is addressed by the organization.

G4-15

a. List externally developed economic, environmental andsocial charters, principles, or other initiatives to which
the organization subscribes or which it endorses.

G4-16

a. List memberships of associations (such as industry
associations) and national or international advocacy
organizations in which the organization:• Holds a position on the governance body
• Participates in projects or committees• Provides substantive funding beyond routine
membership dues
• Views membership as strategic
This refers primarily to memberships maintained at theorganizational level.

G4-17

a. List all entities included in the organization’s
consolidated financial statements or equivalent
documents.
b. Report whether any entity included in the organization’s
consolidated financial statements or equivalent
documents is not covered by the report.
The organization can report on this Standard Disclosure
by referencing the information in publicly available
consolidated financial statements or equivalent
documents

IDENTIFIED MATERIALASPECTS AND
BOUNDARIES

G4-18

a. Explain the process for defining the report content andthe Aspect Boundaries.
b. Explain how the organization has implemented theReporting Principles for Defining Report Content.

G4-19

a. List all the material Aspects identified in the process fordefining report content.

G4-20

a. For each material Aspect, report the Aspect Boundary
within the organization, as follows:• Report whether the Aspect is material within theorganization• If the Aspect is not material for all entities within theorganization (as described in G4-17), select one of thefollowing two approaches and report either:– The list of entities or groups of entities included in G4-17
for which the Aspect is not material or– The list of entities or groups of entities included in G4-17
for which the Aspects is material• Report any specific limitation regarding the Aspect
Boundary outside the organization

G4-21

63

a. For each material Aspect, report the Aspect Boundary
outside the organization, as follows:• Report whether the Aspect is material outside of theorganization• If the Aspect is material outside of the organization,
identify the entities, groups of entities or elements forwhich the Aspect is material. In addition, describe thegeographical location where the Aspect is material forthe entities identified• Report any specific limitation regarding the Aspect
Boundary outside the organization

This Report or Corporate Site
P17-26
P27-44
P45-50-GovernanceSocialEnvironment
 Securities Report (Japanese)

P5-8

United Nations Global
Compact
Foster Group CSRManagement

P11-16

P5-8

United Nations Global
Compact

P51-52

Corporate Profile andFinancial Information
 Securities Report (Japanese)-

P11-16

Foster Group CSRManagement

P11-16

Foster Group CSRManagement

P11-16

Foster Group CSRManagement
 Securities Report (Japanese)-

P17-26
P27-44
P45-50
P51-52-GovernanceSocialEnvironment
Corporate Profile andFinancial Information
 Securities Report (Japanese)Data Table

GENERAL STANDARDDISCLOSURESIDENTIFIED MATERIALASPECTS AND
BOUNDARIESSTAKEHOLDERENGAGEMENTREPORT PROFILEGRIThis Report or Corporate Site

G4-22

a. Report the effect of any restatements of information
provided in previous reports, and the reasons for such
restatements.

-

No restatements

G4-23

a. Report significant changes from previous reporting
periods in the Scope and Aspect Boundaries.

-

No significant changes

G4-24

a. Provide a list of stakeholder groups engaged by theorganization.

-

 General Meeting of
Shareholders Financial Result Briefing
Procurement Briefing

G4-25

a. Report the basis for identification and selection of
stakeholders with whom to engage.

P17-26

GovernanceP11-16

G4-26

a. Report the organization’s approach to stakeholder
engagement, including frequency of engagement by
type and by stakeholder group, and an indicationof whether any of the engagement was undertaken
specifically as part of the report preparation process.

Foster Group CSRManagement
Governance

G4-27

a. Report key topics and concerns that have beenraised through stakeholder engagement, and how theorganization has responded to those key topics andconcerns, including through its reporting. Report the
stakeholder groups that raised each of the key topics
and concerns.

G4-28

a. Reporting period (such as fiscal or calendar year) for
information provided.

G4-29

a. Date of most recent previous report (if any).

G4-30

a. Reporting cycle (such as annual, biennial).

G4-31

a. Provide the contact point for questions regarding thereport or its contents.

G4-32

a. Report the ‘in accordance’ option the organization has
chosen.
b. Report the GRI Content Index for the chosen option(see tables below).
c. Report the reference to the External Assurance
Report, if the report has been externally assured. GRI
recommends the use of external assurance but it is nota requirement to be ‘in accordance’ with the Guidelines.

G4-33

a. Report the organization’s policy and current practicewith regard to seeking external assurance for the report.
b. If not included in the assurance report accompanying
the sustainability report, report the scope and basis ofany external assurance provided.
c. Report the relationship between the organization andthe assurance providers.
d. Report whether the highest governance body or senior
executives are involved in seeking assurance for theorganization’s sustainability report.

G4-34

a. Report the governance structure of the organization,
including committees of the highest governance body.
Identify any committees responsible for decision-making
on economic, environmental and social impacts.

G4-35

a. Report the process for delegating authority foreconomic, environmental and social topics from thehighest governance body to senior executives and other
employees.

GOVERNANCE

P17-26

-

None

P72

“Provision of Information
Regarding Sustainability”

P72“Provision of Information
Regarding Sustainability”

P72“Provision of Information
Regarding Sustainability”

P72“Provision of Information
Regarding Sustainability”

P72“Provision of Information
Regarding Sustainability”

-

None

-

 Corporate Governance
Guidelines (Japanese)

P17-26-

Governance Corporate Governance
Guidelines (Japanese)64

Data Table

GENERAL STANDARDDISCLOSURESGRI

GOVERNANCE

65

G4-36

a. Report whether the organization has appointed an
executive-level position or positions with responsibility
for economic, environmental and social topics, andwhether post holders report directly to the highest
governance body.

G4-37

a. Report processes for consultation between
stakeholders and the highest governance bodyon economic, environmental and social topics. If
consultation is delegated, describe to whom and any
feedback processes to the highest governance body.

G4-38

a. Report the composition of the highest governance bodyand its committees by:• Executive or non-executive• Independence• Tenure on the governance body
• Number of each individual’s other significant positions
and commitments, and the nature of the commitments• Gender• Membership of under-represented social groups• Competences relating to economic, environmental andsocial impacts• Stakeholder representation

This Report or Corporate Site

P11-16

Foster Group CSRManagement

P11-16

Foster Group CSRManagement-

 Securities Report (Japanese) Corporate Governance
Guidelines (Japanese)

G4-39

a. Report whether the Chair of the highest governancebody is also an executive officer (and, if so, his or her
function within the organization’s management and thereasons for this arrangement).

-

 Securities Report (Japanese)

G4-40

a. Report the nomination and selection processes forthe highest governance body and its committees, andthe criteria used for nominating and selecting highest
governance body members, including:• Whether and how diversity is considered• Whether and how independence is considered• Whether and how expertise and experience relating
to economic, environmental and social topics are
considered• Whether and how stakeholders (including shareholders)are involved-

 Securities Report (Japanese)

G4-41

a. Report processes for the highest governance body toensure conflicts of interest are avoided and managed.
Report whether conflicts of interest are disclosed to
stakeholders, including, as a minimum:• Cross-board membership• Cross-shareholding with suppliers and otherstakeholders• Existence of controlling shareholder• Related party disclosures- Corporate Governance
Guidelines (Japanese)

G4-42

a. Report the highest governance body’s and senior
executives’ roles in the development, approval, andupdating of the organization’s purpose, value or mission
statements, strategies, policies, and goals related toeconomic, environmental and social impacts.

G4-43

a. Report the measures taken to develop and enhance
the highest governance body’s collective knowledge of
economic, environmental and social topics.

P11-16

Foster Group CSRManagement

P11-16

Foster Group CSRManagement

Data Table

GENERAL STANDARDDISCLOSURESGRI

GOVERNANCE

G4-44

a. Report the processes for evaluation of the highest
governance body’s performance with respect togovernance of economic, environmental and social
topics. Report whether such evaluation is independent
or not, and its frequency. Report whether such
evaluation is a self-assessment.
b. Report actions taken in response to evaluation of
the highest governance body’s performance withrespect to governance of economic, environmental
and social topics, including, as a minimum, changes inmembership and organizational practice.

G4-45

a. Report the highest governance body’s role in
the identification and management of economic,
environmental and social impacts, risks, andopportunities. Include the highest governance body’srole in the implementation of due diligence processes.
b. Report whether stakeholder consultation is used tosupport the highest governance body’s identificationand management of economic, environmental andsocial impacts, risks, and opportunities.

G4-46

a. Report the highest governance body’s role in reviewing
the effectiveness of the organization’s risk management
processes for economic, environmental and social
topics.

G4-47

a. Report the frequency of the highest governance body’s
review of economic, environmental and social impacts,
risks, and opportunities.

G4-48

a. Report the highest committee or position that formallyreviews and approves the organization’s sustainability
report and ensures that all material Aspects arecovered.

G4-49

This Report or Corporate Site

P17-26
P27-44
P45-50GovernanceSocialEnvironment

P11-16

Foster Group CSRManagement

P11-16

Foster Group CSRManagement

P11-16

Foster Group CSRManagement

P11-16

Foster Group CSRManagement

a. Report the process for communicating critical concerns
to the highest governance bodyP17-26

Governance

G4-50

a. Report the nature and total number of critical concernsthat were communicated to the highest governancebody and the mechanism(s) used to address andresolve them.

P17-26
P55-71Governance
Data Table

G4-51

a. Report the remuneration policies for the highest
governance body and senior executives for the below
types of remuneration:• Fixed pay and variable pay:
– Performance-based pay– Equity-based pay– Bonuses– Deferred or vested shares• Sign-on bonuses or recruitment incentive payments• Termination payments• Clawbacks• Retirement benefits, including the difference between
benefit schemes and contribution rates for the highest
governance body, senior executives, and all other
employees
b. Report how performance criteria in the remuneration
policy relate to the highest governance body’s andsenior executives’ economic, environmental and social
objectives.

-

 Securities Report (Japanese)

G4-52

a. Report the process for determining remuneration.
Report whether remuneration consultants are involved
in determining remuneration and whether they are
independent of management. Report any otherrelationships which the remuneration consultants havewith the organization.

-

None

66

Data Table

GENERAL STANDARDDISCLOSURESGRI

GOVERNANCE
G4-53

a. Report how stakeholders’ views are sought and taken
into account regarding remuneration, including theresults of votes on remuneration policies and proposals,
if applicable.

-

None

G4-54

a. Report the ratio of the annual total compensation for theorganization’s highest-paid individual in each countryof significant operations to the median annual totalcompensation for all employees (excluding the highest
paid individual) in the same country.

-

None

G4-55

a. Report the ratio of percentage increase in annual totalcompensation for the organization’s highest-paid
individual in each country of significant operations
to the median percentage increase in annual totalcompensation for all employees (excluding the highest
paid individual) in the same country.

-

None

G4-56

a. Describe the organization’s values, principles, standards
and norms of behavior such as codes of conduct

P1-2-

Corporate Philosophy
Corporate Action Guideline
Code of Conduct for Staff

G4-57

a. Report the internal and external mechanisms for seeking
advice on ethical and lawful behavior, and mattersrelated to organizational integrity, such as helplines oradvice lines.

P17-26

Governance

G4-58

a. Report the internal and external mechanisms for seeking
advice on ethical and lawful behavior, and mattersrelated to organizational integrity, such as helplines oradvice lines.

P17-26

Governance

ETHICS AND INTEGRITYECONOMICGRIECONOMIC DMAECONOMICPERFORMANCEPROCUREMENT
PRACTICES

Direct economic value generated and distributed.

-

 Securities Report (Japanese)

G4-EC2Financial implications and other risks and opportunities forthe organization’s activities due to climate change.

-

None

G4-EC3Coverage of the organization’s defined benefit plan
obligations.

- Securities Report (Japanese)

G4-EC4

Financial assistance received from government.

-

None

G4-EC5

Ratios of standard entry level wage by gender comparedto local minimum wage at significant locations ofoperation.

P55-71

Data Table

G4-EC6

Proportion of senior management hired from the local
community at significant locations of operation.

P55-71

Data Table

G4-EC7Development and impact of infrastructure investments andservices supported.

P37-40Community Contribution
Activities at Overseas Sites

G4-EC8Significant indirect economic impacts, including the extent
of impacts.

-

G4-EC9Proportion of spending on local suppliers at significant
locations of operation.

GRI

P55-71

G4-EN1

Materials used by weight or volume.

G4-EN2

Percentage of materials used that are recycled input
materials.

None
Data Table

This Report or Corporate Site
P3-4
P45-50ENVIRONMENTAL DMA

67

Top Message

G4-EC1ENVIRONMENTAL

MATERIALS

This Report or Corporate Site
P3-4

MARKET PRESENCEINDIRECT ECONOMIC
IMPACTSThis Report or Corporate Site

P55-71Top Message
Environment
None
Data TableData Table

ENVIRONMENTAL
ENERGYWATER

GRI
G4-EN3

Energy consumption within the organization.

G4-EN4

Energy consumption outside of the organization.

G4-EN5

Energy intensity.

P55-71

Data Table

G4-EN6

Reduction of energy consumption.

P55-71

Data Table

G4-EN7

Reductions in energy requirements of products and services.

G4-EN8

Total water withdrawal by source.

G4-EN9Water sources significantly affected by withdrawal of water.

-

N/A

G4-EN10Percentage and total volume of water recycled andreused.

-None

G4-EN11

Operational sites owned, leased, managed in, or adjacentto, protected areas and areas of high biodiversity value
outside protected areas.

-

N/A

G4-EN12

Description of significant impacts of activities, products,
and services on biodiversity in protected areas and areasof high biodiversity value outside protected areas.

-

N/A

G4-EN13

Habitats protected or restored.

P47

Environmental activities
with the town of Iwaizumi

G4-EN14

Total number of IUCN red list species and national
conservation list species with habitats in areas affected byoperations, by level of extinction risk.

-

None

G4-EN15

Direct greenhouse gas (GHG) emissions (Scope 1)

P55-71

Data Table

G4-EN16

Energy indirect greenhouse gas (GHG) emissions (Scope 2).

P55-71

Data Table

G4-EN17

Other indirect greenhouse gas (GHG) emissions (Scope 3).

P45-50P55-71

Environment
Data Table

G4-EN18

Greenhouse gas (GHG) emissions intensity.

P55-71

Data Table

G4-EN19

Reduction of greenhouse gas (GHG) emissions.

P55-71

Data Table

G4-EN20

Emissions of ozone-depleting substances (ODS)-

N/A

G4-EN21

NOX, SOX, and other significant air emissions.

-

N/A

G4-EN22

Total water discharge by quality and destination.

P55-71

Data Table

G4-EN23

Total weight of waste by type and disposal method.

P55-71

Data Table

G4-EN24

Total number and volume of significant spills.

-

N/A

G4-EN25

Weight of transported, imported, exported, or treatedwaste deemed hazardous under the terms of the Basel
Convention ANNEX I, II, III, and VIII, and percentage oftransported waste shipped internationally.

-

N/A

G4-EN26

Identity, size, protected status, and biodiversity value ofwater bodies and related habitats significantly affected by
the organization’s discharges of water and runoff.

-

None

G4-EN27

Extent of impact mitigation of environmental impacts ofproducts and services.

-

None

G4-EN28

Percentage of products sold and their packaging materials
that are reclaimed by category.

-

None

G4-EN29

Monetary value of significant fines and total numberof non-monetary sanctions for non-compliance withenvironmental laws and regulations.

-

N/A

G4-EN30

Significant environmental impacts of transporting products
and other goods and materials for the organization’s
operations, and transporting members of the workforce.

P55-71

Data Table

G4-EN31

Total environmental protection expenditures andinvestments by type.

P55-71

Data Table

BIODIVERSITYEMISSIONSEFFLUENTS AND
WASTEPRODUCTS ANDSERVICESCOMPLIANCE

TRANSPORTOVERALL

This Report or Corporate Site
P55-71-

P55-71

Data Table
None

None
Data Table

68

Data Table

ENVIRONMENTAL
SUPPLIER
ENVIRONMENTALASSESSMENT

ENVIRONMENTALGRIEVANCEMECHANISMS

GRI
G4-EN32

Percentage of new suppliers that were screened using
environmental criteria.

P55-71

G4-EN33

Significant actual and potential negative environmental
impacts in the supply chain and actions taken.

-

None

G4-EN34

Number of grievances about environmental impacts
filed, addressed, and resolved through formal grievancemechanisms.

-

N/A (Headquarters)

SOCIALGRISOCIAL DMALABOR PRACTICESAND DECENT WORK

Data Table

This Report or Corporate Site
P3-4
P27-44

Top Message
Social

G4-LA1

Total number and rates of new employee hires andemployee turnover by age group, gender and region.

P55-71

Data Table

G4-LA2

Benefits provided to full-time employees that are notprovided to temporary or part time employees, bysignificant locations of operation.

P55-71

Data Table

G4-LA3Return to work and retention rates after parental leave, bygender.

P55-71

Data Table

G4-LA4

Minimum notice periods regarding operational changes,
including whether these are specified in collective
agreements.

-

G4-LA5Percentage of total workforce represented in formal joint
management-worker health and safety committees that
help monitor and advise on occupational health and safety
programs.

P55-71

Data Table

G4-LA6

Type of injury and rates of injury, occupational diseases,
lost days, and absenteeism, and total number of workrelated fatalities, by region and by gender.

P55-71

Data Table

G4-LA7

Workers with high incidence or high risk of diseases
related to their occupation.

-

G4-LA8

Health and safety topics covered in formal agreementswith trade unions.

P55-71

Data Table

G4-LA9Average hours of training per year per employee by
gender, and by employee category.

P55-71

Data Table

G4-LA10Programs for skills management and lifelong learning that
support the continued employability of employees andassist them in managing career endings.

P31

G4-LA11Percentage of employees receiving regular performanceand career development reviews, by gender and by
employee category.

P55-71

Data Table

G4-LA12Composition of governance bodies and breakdown of
employees per employee category according to gender,
age group, minority group membership, and otherindicators of diversity.

P55-71

Data Table

G4-LA13

Ratio of basic salary and remuneration of male tofemale by employee category, by significant locations ofoperation.

P55-71

Data Table

G4-LA14

Percentage of new suppliers that were screened using
labor practices criteria.

P55-71

Data Table

G4-LA15Significant actual and potential negative impacts for labor
practices in the supply chain and actions taken.

-

G4-LA16

Number of grievances about labor practices filed,addressed, and resolved through formal grievancemechanisms.

G4-HR1

Total number and percentage of significant investment
agreements and contracts that include human rights
clauses or that underwent human rights screening.

HUMAN RIGHTS

69

This Report or Corporate Site

P55-71

-

None

None

“Main Activities, Measures,and Development” in Human
Resource Development.

None

Data Table

None

Data Table

SOCIALGRI

HUMAN RIGHTSThis Report or Corporate Site

G4-HR2

Total hours of employee training on human rights policies
or procedures concerning aspects of human rights thatare relevant to operations, including the percentage of
employees trained.

P55-71

G4-HR3

Total number of incidents of discrimination and corrective
actions taken.

-

N/A

G4-HR4

Operations and suppliers identified in which the right toexercise freedom of association and collective bargaining
may be violated or at significant risk, and measures taken
to support these rights.

-

None

G4-HR5

Operations and suppliers identified as having significant
risk for incidents of child labor, and measures taken tocontribute to the effective abolition of child labor.

-

None

G4-HR6

Operations and suppliers identified as having significant
risk for incidents of forced or compulsory labor, andmeasures to contribute to the elimination of all forms offorced or compulsory labor.

-

None

G4-HR7

Percentage of security personnel trained in theorganization’s human rights policies or procedures that are
relevant to operations.

P55-71

G4-HR8

Total number of incidents of violations involving rights ofindigenous peoples and actions taken.

-

N/A

G4-HR9Total number and percentage of operations that have been
subject to human rights reviews or impact assessments.

-

None

G4-HR10Percentage of new suppliers that were screened using
human rights criteria.

P55-71

Data Table

G4-HR11Significant actual and potential negative human rights
impacts in the supply chain and actions taken.

P55-71

Data Table

G4-HR12

Number of grievances about human rights impacts
filed, addressed, and resolved through formal grievancemechanisms

P55-71

Data Table

G4-SO1

Percentage of operations with implemented local
community engagement, impact assessments, anddevelopment programs.

-

None

G4-SO2

Operations with significant actual and potential negative
impacts on local communities.

-

None

G4-SO3

Total number and percentage of operations assessed forrisks related to corruption.

P55-71

Data Table

G4-SO4

Communication and training on anti-corruption policies
and procedures.

P55-71

Data Table

G4-SO5

Confirmed incidents of corruption and actions taken.

-

None

G4-SO6

Total value of political contributions by country andrecipient/beneficiary.

-

None

G4-SO7

Total number of legal actions for anti-competitive behavior,anti-trust, and monopoly practices and their outcomes.

-

N/A

G4-SO8

Monetary value of significant fines and total number of
non-monetary sanctions for non-compliance with laws andregulations.

-

N/A

G4-SO9Percentage of new suppliers that were screened using
criteria for impacts on society.

P55-71

G4-SO10Significant actual and potential negative impacts onsociety in the supply chain and actions taken.

-

G4-SO11

Number of grievances about impacts on society filed,addressed, and resolved through formal grievancemechanisms.

P55-71

SOCIAL

Data Table

Data Table

Data Table
None

Data Table

70

Data Table

SOCIALPRODUCTRESPONSIBILITY

71

GRI

This Report or Corporate Site

G4-PR1

Percentage of significant product and service categories
for which health and safety impacts are assessed for
improvement.

-

None

G4-PR2

Total number of incidents of non-compliance withregulations and voluntary codes concerning the health andsafety impacts of products and services during their life
cycle, by type of outcomes.

-

None

G4-PR3

Type of product and service information required by
the organization’s procedures for product and service
information and labeling, and percentage of significant
product and service categories subject to such information
requirements.

-

None

G4-PR4

Total number of incidents of non-compliance withregulations and voluntary codes concerning product andservice information and labeling, by type of outcomes.

-

None

G4-PR5Results of surveys measuring customer satisfaction.

-

None

G4-PR6

Sale of banned or disputed products.

-

None

G4-PR7

Total number of incidents of non-compliance withregulations and voluntary codes concerning marketing
communications, including advertising, promotion, andsponsorship, by type of outcomes.

-

None

G4-PR8

Total number of substantiated complaints regarding
breaches of customer privacy and losses of customer data.

P55-71

G4-PR9

Monetary value of significant fines for non-compliance withlaws and regulations concerning the provisions and use of
products and services.

-

Data Table

N/AProvision of Information Regarding
Sustainability
Our Point of View on Disclosure
Information on the Foster Group’s sustainability is provided with a view to increasing the transparency of the Foster
Group and conveying the activities for Foster Group’s sustainability and their results to our stakeholders. This information
is provided in accordance with the GRI (Global Reporting Initiative) and other international reporting guidelines. We
disclose the information on the Foster Group’s activities and achievements that meet the needs of society such as the ten
principles of the United Nations Global Compact and RBA (Responsible Business Alliance), together with the system forappropriate disclosure of the decision-making processes and the soundness of PDCA and its operation. The information
is disclosed via our sustainability report and corporate website for communications.

Contents Reported in Sustainability Report 2018
• About this report
The “Sustainability Report 2018” (the Report 2018) was prepared to comprehensively report the Foster Group’s
corporate social responsibility (CSR) activities throughout the fiscal year ended March 31, 2018 (fiscal 2017), for our
stakeholders. With regard to our CSR activities, your valued opinion would be greatly appreciated to help us fulfill our
corporate social responsibilities in the years to come. We hope this report will help you better understand the CSR
activities of the Foster Group.
• Reporting scope
Unless specifically indicated, the reporting scope includes the CSR activities of the Foster Group, which consists ofFoster Electric Company, Limited, and its consolidated subsidiaries in Japan and overseas.
• The reporting period
The reporting period of the Report 2018 is from April 1, 2017, to March 31, 2018 (fiscal 2017). The Report also includes
statements concerning activities outside the reporting period, including those in fiscal 2018.
• Referenced guidelines
The Environmental Reporting Guidelines 2012 by the Ministry of the Environment and the GRI Sustainability Reporting
Guidelines G4 were referred to when preparing the Report 2018.
• Month of issue:June 2018• Next issue of the CSR report (planned):
June 2019• Reporting to the United Nations Global Compact
As a company that has signed the United Nations Global Compact, we have announced this report as the “Communication
on Progress (COP)” for the four fields and ten principles to our stakeholders. Details on our activities related to theUnited Nations Global Compact can be found in pages 5-8.
• Provision of the sustainability information on our corporate website
https://www.foster-electric.com/csr/index.html• Contact:
Foster Electric Company, Limited Phone: +81- (0) 42-546-2311 Fax: +81- (0) 42-546-2317

72

Foster Electric Company, Limited
1-1-109 Tsutsujigaoka, Akishima City,
Tokyo, 196-8550, Japan
Phone: +81- (0) 42-546-2311
Fax: +81- (0) 42-546-2317
URL https://www.foster-electric.com/

The 15 threads in the ribbon-like design on
the cover of this report represent the numberof countries and regions in which the Foster
Group has sites as well as each employee.
The symbol in the center is designed withthe motif of Foster’s products (speakers,
headphones, and vibration actuators).
June 2018 Edited in Japan73