Sustainability Report 2022 (English version)

1

Corporate Philosophy

VisionCorporate Creed

Sincerity““

Corporate Philosophy

1

Top Message

2

Corporate Profiles/ Financial
Information/ Corporate History

3

Foster Group ESG Management

5

Environment

10Social14

Governance27

External Recognition

32

Data Table

33

MissionThrough 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.

Foster Rhythm

CONTENTS

1

To make contributions for future society through acoustics“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 ourinspiring “Vision.”
Our “Mission” motivates us to help people achieve new happiness via acoustic technology and our “Values” are guides to filter our choices sothat 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.

““Sincerity” has been the Foster Group’s corporate
creed since its establishment.
By the term “sincerity”,“sincerity,” we mean the act of treating
all concerned parties of the Company with a sincere
approach. The concept of CSR, which shares thesame basic philosophy as the corporate creed of“sincerity,” has always governed the Company’s“sincerity”,
corporate management and business operations
since its foundation.
To continue to grow in the coming age, we believe
it is important for each member of the Foster Groupto act in accordance with the CSR philosophy, or
the corporate creed of “sincerity”,“sincerity,” which we haveadhered to since our establishment.

- Our Principles and Values -I

THE LEADING

Sound to Life*SOLUTION COMPANY

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

II

ALWAYS
IMPROVING

Create a more efficient, effective, profitableand better place to work. Always seek newmarket categories and opportunities.

III

EVER MORE GLOBAL
AND INCLUSIVE

Embrace diversity and pursue 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-Minded: Be open–minded andinclusive

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 the environment

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

6. Proactive: Embrace learning and proactive
leadership10.Team: Respect others as part of a teamwith shared goals

7. Steadfast: Show steadfast dedication ingoing beyond our promised goals

Sound to Life*

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”.

Sustainability Report 2022「English version」

2

Corporate Philosophy

Top Message

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table

1

Corporate Social Responsibility and Promoting ESG Management
The COVID-19 pandemic has changed the face of the world
today. People's activities have been restricted and supply
chains have been disrupted, greatly affecting people's lives
and the economy. However, there have been clear signs
that economic activity is recovering due in part to the increase of vaccination and the financial and economic policies of governments all around the world. While the future
has been increasingly uncertain due to the elevated geopolitical risks such as the Russian invasion of Ukraine, corporations are subject to scrutiny that is stricter than everregarding whether they take care of their own employees,
contribute to the local community and respond to environmental issues appropriately.
Omi Shonin (merchants from present-day Shiga Prefecture), used to say that in business you should have “three
goods”— good for the seller, good for the buyer and goodfor society. I believe that many corporate entities that havebeen operating for more than 100 years secure these “three
goods” by making reasonable profits and returning them forthe good of society. Arguably, these movements are being
accelerated globally in response to the pandemic. Securing
these “three goods," we also aim to be a centennial company that has a shining presence in the coming new society.

Atsushi Narikawa
CEOIn the medium-term business plan, we set “Zero Emissions”
as our environmental target for 2050 and the slogan “Be
Happy 80%*” for our employees. In line with moves to enhance initiatives to achieve the 1.5°C target set at COP26,
we expressed our support for the recommendations of the
Task Force on Climate-Related Financial Disclosures (TCFD)
in February 2022, as a participant in this consortium. At thesame time, we formulated an action program aimed at reducing CO2 emissions over the medium to long term, thusbuilding a framework for moving forward toward carbon
neutrality on a global scale. In June last year, our excellent ESG activities were highly evaluated by FTSE Russell,a world-leading rating agency, and we were selected as aconstituent of the FTSE Blossom Japan Index.

* “Be Happy 80%”: The ideal environment that we would
like to achieve company-wide, which was presented by ateam of young employees during internal leadership training. "We will achieve a working environment and corporatebody where 80% of our employees can feel 80% happiness." It is not 100%, which reflects our consideration ofothers.
Based on our fundamental principle that employees areat the root of all corporate activities and companies thatcannot make their employees happy cannot promote ESG,
either, 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 offer
an environment where more employees feel that they canwork flexibly and freely, thus cherishing our employees andachieving the goal of “Be Happy 80%*”.
We were selected by the Ministry of Economy, Trade andIndustry and the Nippon Kenko Kaigi in their Certified Health& Productivity Management Outstanding Organizations
Recognition Program (large enterprise category). We werealso awarded the “Kurumin Certification” (Ministry of Health,Labour and Welfare) and the “Certification of Excellent
Company in Health: Gold Accreditation” (Tokyo Promotion
Council for Healthy Company Declaration), among others.
We will continue those efforts in the future. Based on our
ESG Management Statement, we will keep the promotionof ESG management at the core of our company policy andcontinue to foster a healthy corporate climate, further work
style reforms, ensure thorough quality control and risk management and work to solve social issues. We will cherish
our employees and instill our corporate philosophy further
among them to reinforce our corporate foundation.
We will continuously strive to offer satisfaction to our various
stakeholders, and to become an enterprise that is loved bysociety.

Sustainability Report 2022「English version」

Net sales

3

Corporate Philosophy

Top Message

Corporate Profiles/Financial Information/Corporate History

Environment

Foster Group ESG Management

Governance¥

Social91,106
million91,106External Recognition¥1(up 6.9% y-o-y)millionOperatin7,7

Data▲¥
Table(up 6.9% y-o-y)

7,75

▲¥
(Operating
profitin the previous(Operating
profit ofin the previous fi

Overview
by Segment
Overview by Segment

About Foster(Consolidated)(Consolidated)

Speaker
SpeakerSegment
Segment

M
Foster Electric was founded as a loudspeaker manufacturer in 1949.
Mo
Since that time, we have established ourselves as a specialist in audio technologies, and have provided the audio industry with many products and technologies.
NetNet
76.0%
NeN
76.0%
¥ 69,676 million
Among them, acoustic transducers have become our mainstay products. We have created a wide array of unique technologies and accumulated broad expertise,sales
sasales ¥ 69,676 million
saleincluding in automotive speakers and other automotive audio products, audio equipment (AV speakers) for home entertainment, high-end Hi-Fi speaker systems,
Financial Highlights Consolidated Performance for the Fiscal Year ended March 31
headphones and headsets, compact speakers for information equipment, buzzers, and vibration actuators that apply audio technologies. With these technologies
and accumulated expertise as our backbone, we provide quality, optimal acoustic experiences that fulfill the expectations of our customers.Net
Products
sales from Foster Operating loss
Ordinary loss
Electric have been used in many products around the world. They contribute to society by providing audio and vibration solutions through the products of our clients’brands.
¥million▲¥million▲¥millioSales/Development BasesGroup companies

Sales Bases

Manufacturing Bases

91,106

7,757

7,473

(up 6.9% y-o-y)(Operating profit of ¥0.7 million
in the previous fiscal year)(Ordinary profit of ¥219 million
in the previous fiscal year)

OthersOverview by Segment

The Foster Group operates 38
bases in 12 countries and regions
worldwide as bases for development,
manufacturing and sales.

(Consolidated)

Speaker Segment

EUROPE

2

Net
sales

bases

JAPAN

We have established a sophisticatedproduction system integration
processes from components
manufacturing to finished goods
manufacturing.

¥

Mobile Audio Segment

69,676 million 76.0%

Net
sales

¥

14,227 million

Ot
16.0%

8 bases Highlights Consolidated Performance for the Fiscal Year ended March 31, 2022
Financial
Net sales¥

Operating loss

91,106 million▲¥

7,757 million▲¥

AMERICAS

7(Operating profit of ¥0.7 million
in the previous fiscal year)(up 6.9% y-o-y)

Net loss attributable toowners of the parent

Ordinary loss

7,473 million▲¥

bases(Ordinary profit of ¥219 million

7,017 million(Net loss of ¥3,363 million
in the previous fiscal year)

in the previous fiscal year)

ASIA (excluding Japan)

by Segment
21 Overview(Consolidated)bases

Speaker Segment
Net
sales

Company Information

¥

Net
76.0%
69,676
million Informationsales ¥ 14,227 million
Stock

Company Profile (As of March 31, 2022)
Company Name

Foster Electric Company, Limited

Mobile Audio Segment

6,770,360,135 yen
ofthe Tokyo loss
Stock
Operating lossThe Prime MarketOrdinary
Ordinary
lossExchange

CommonStock
Operatingloss

91,106
million91,106million
7,757
million ▲¥▲¥7,757
million
0.7¥¥

Headquarters(up 6.9% y-o-y)(up 6.9% y-o-y)

7,473
7,473
219

Total number of sharesauthorized to be issued
by the Company
80,000,000 shares
Net loss attributabletoPanyu, China)

https://www.foster-electric.com/

URL

Overview
Overviewby
bySegment
Segment(Consolidated)(Consolidated)

Speaker
SpeakerSegment
Segment

Net loss attributable toownersparentTotal
numberof shares
ownersofofthe
theparentissued25,000,000
7,017
million
7,017
million
3,363

1-1-109, Tsutsujigaoka, Akishima City, Tokyo,196-8550 ▲¥million▲¥▲¥million▲¥Phone: +81-42-546-2311 (main number)(Operating profit of ¥million(Ordinary profit of ¥million(Operating profit of ¥0.7 million(Ordinary profit of ¥219 million
in the previous fiscal year) 17,258 (Numberin theincludes
previous fiscal
year)
our outsourcee
inin the previous
fiscal year)
in the previous fiscal year)
Numberof Employees

Foreign entities,
etc.
24.3%

sharesNumbermillionof shareholders(Net loss of ¥(Net loss of7,936¥3,363 million
in the previous
fiscal year)
in the previous fiscal year)

Financial
institutions
39.2%

¥

8,330 million

8.0%

Individuals andothers26.1%

Securities companies 6.4%
Domestic corporations, etc. 4.0%
* Excluding treasury stock

Note: The figure above includes intersegment sales.

Major Shareholders

The Master Trust Bank of Japan, Ltd.

(trust account)
MobileSegment
Segment
Hiromi
Yoshizawa Senior Executive Officer Other
Hidetoshi
Shirakawa
MobileAudio
Audio
Segment
Other
Segment

Director and Chairperson

Net
sales

Distribution of Shareholders by Shareholder
Type

Shareholder’s Name

Directors and Corporate Auditors (As of June 24, 2022)

16.0%

Status of Shares (As of March 31, 2022)

Financial
Performance for the Fiscal Year ended March 31, 2022
FinancialHighlights
HighlightsConsolidated
Consolidated
Performancefor20,
the1949
Fiscal Year ended March 31, 2022
FoundedJune
Net
Netsalessales

Other Segment

Number of Shares Held(thousands)

Ratio of Shares Held
(%)

4,617

20.6

Sustainability Report 2022「English version」

NsaTop Message

7

ASIA (excluding Japan)

21

Headquarters

etc.

7

Individuals andothersof Shares (AsExternalof March 31,
2022)
Social Status
Governance
Recognition

Total
number of sharesCompany
Name
Foster Electric Company, Limited
issued1-1-109, Tsutsujigaoka, Akishima City, Tokyo,
ASIA (excluding Japan)
FoundedJune 20, 1949
25,000,000 shares
196-8550
Securities companies 6.4%
Phone: +81-42-546-2311 (main number)
6,770,360,135 yen
Numberofshareholders
Common Stock
Domestic corporations, etc. 4.0%
bases
The Prime Market of the Tokyo Stock Exchange
7,936* Excluding treasury stock
17,258 (Number includes our outsourcee in

Total number of sharesauthorized to be issued
by the Company
80,000,000 shares

21

bases

Number of Employees

Company Information

Stock Information

AMERICAS

Financial
institutions

80,000,000
sharesCompany
Profile(AsManagementof March
Foster
Group
ESG
bases
24.3%31, 2022)39.2% Environment
26.1%

Panyu, China)

1-1-109, Tsutsujigaoka, Akishima City, Tokyo,196-8550
Ratio of Shares Held
Number of(mainShares number)
Held
Phone: +81-42-546-2311
Shareholder’s Name

Stock Information

Major Shareholders
Headquarters

https://www.foster-electric.com/

Company Information

URL

Company Profile (As of March 31, 2022)

Directors
andCorporate
Auditors(As of June 24, 2022)
Company
StatusofProfileShares(As of(AsMarchof
March
31, 2022)
31, 2022)

Company
Stock Information
Information

Stock Information(thousands)

17,258 (Number includes our outsourcee in(%)

FoundedJune 20, 1949

Common Stock

6,770,360,135 yen
The Prime Market of the Tokyo Stock Exchange

Headquarters

1-1-109, Tsutsujigaoka, Akishima City, Tokyo,196-8550
Phone: +81-42-546-2311 (main number)

Number of Employees

17,258 (Number includes our outsourcee in
Panyu, China)

The
MasterTrustof Japan,
Ltd.
20.6
4,617
of Bank
Shares(As ofMarch 31, 2022)
NumberofStatus
Employees
Panyu, China)(trust account)
Total number of shares Distribution of Shareholders by Shareholder
https://www.foster-electric.com/
URL
authorized to be issued Typeauthorized
to Japan,be issued
Custody
Bank ofLtd. Type
4.9
1,097
CEO Founded
Atsushi
Tatsuhito Tanaka
JuneNarikawa
20, 1949 Senior Executive Officer
by the Company
byaccount)
the Company(trustForeign entities,
Financial
Individuals andForeign entities,
Financial
Individuals andinstitutions
etc.
institutions
othersSenior Managing
Director
SeniorExecutive Officer others Yasuhide Takahara
80,000,000
shares80,000,000
sharesLu6,770,360,135
San etc.
Tie
yenMizuhoBank,
Ltd.
Directors
andCorporate
Auditors
(As
of
June
24,
2022)
1,016
%
%
Common Stock24.3%Market of39.2
26.1
24.3%
39.2%
26.1% 4.5
The PrimeTokyo
Exchange
Senior the
Executive
OfficerStockand CFOManaging Director
Kazuhiro
Kishi
Akihito Mochizuki
Total number of shares
Total
numberDirector andChairperson
MUFG
Bank,
Ltd. of shares
4.2 Shirakawa
945Officer
Hiromi Yoshizawa Senior Executive
Hidetoshi
issuedissued1-1-109,
Akishima
Tokyo,
Senior Executive
Officer City,
Director
Hiroki
Miura Tsutsujigaoka,
Naoki
Kanai CEO JPMorgan Securities Japan
Co., Ltd. Senior Executive
2.9 Tanaka
665Officer
Atsushi Narikawa
Tatsuhito
25,000,000 shares 196-8550
25,000,000 shares
Headquarters%%
Securities
companies
Securities companies 6.4
Executive
Officer 6.4 Hiroyuki Asada Senior Managing
Independent Director
Minoru Matsumoto Senior
MizuhoTrustof&shareholders
BankingCo.,TieLtd.
1.8 Takahara
405Officer
Director
Senior Executive
Lu SanYasuhide
Phone: +81-42-546-2311 (main number)
Number of shareholders
Number%%Domestic corporations, etc. 4.0
Domestic corporations, etc. 4.0
Executive Officer
Independent
Director
Yasuhiro Goto
Terushige Nagasawa
7,936
7,936
BANK OF NEW YORK
361
Senior Executive
Officer and CFO* Excluding
Director
KazuhiroMELLON
Kishi
Akihito1.6
Mochizuki* Excluding treasury
treasurystock
17,258 (Number includes our outsourcee
in stock ManagingTHE
Numberof Employees Kaoru Chujo
140042
Independent
Director
Yuji Sakuta
Panyu, China) Executive Officer

https://www.foster-electric.com/

Standing
Corporate Auditor (Independent) Satoko
Executive Officer
Kimotohttps://www.foster-electric.com/
URL

Company Name

URL

Distributionof Shareholders
by Shareholder
DirectorandTotal
Chairperson
SeniorExecutiveLimited
OfficernumberCompany
Name of shares
Hiromi
Yoshizawa
Hidetoshi Shirakawa
FosterElectric Company,

Foster Electric Company, Limited

Director

Major Shareholders

Corporate Auditor

Directors and Corporate Auditors (As of June 24, 2022)

Number of Shares Held

Shareholder’s Name

Tsutomu Inokuma

Executive(thousands)
Officer

Oh In-Yong

Independent Director

Ratio of Shares Held(%)Quan Hoang
NguyenThe
MasterTrust Corporate
Bankof Japan,
20.6
4,617
Directors
andAuditors(As of June 24,Tan
2022)
Independent
Corporate
AuditorExecutive Officer
TakashiSuzuki Ltd.
GuiHai(trust account)Hiroki Miura

Major
Shareholders
MSIP
CLIENT
SECURITIES

Naoki Kanai

Senior Executive Officer

1.5

345

Executive Officer
Minoru Matsumoto Senior Number
Hiroyuki
Asada
Ratio of Shares Heldof Shares Held

Shareholder’s
NameFOR BNY
BNYM SA/NV
FOR BNYM
317(thousands)
Independent
Director
Yasuhiro
GCM
CLIENT ACCOUNTS
MGoto
LSCB RDExecutive Officer
The Master Trust Bank of Japan, Ltd.
4,617
Executive
OfficerIndependent
Director
Kaoru
Chujo
GOLDMANSACHS INTERNATIONAL
315(trust account)

Terushige Nagasawa
20.6

Yuji Sakuta
1.4

Director and Chairperson

Hiromi Yoshizawa

Senior Executive Officer

Director Corporate
and Chairperson
Hidetoshi Shirakawa
Independent
AuditorCEO

Atsushi Narikawa

Senior Executive Officer

Tatsuhito Tanaka CEO (trust account)

Atsushi Narikawa

Senior Executive Officer

Tatsuhito Tanaka(trust account)
Corporate Auditor

Senior Managing Director

Lu San Tie

Senior Executive Officer

Managing Bank,
Director Ltd.
Yasuhide TakaharaSeniorMizuho

Lu San Tie

Senior Executive Officer

YasuhideMizuhoAuditor
Bank, Ltd.Takashi Suzuki
4.5 Takahara
Independent Corporate

Managing Director

Kazuhiro Kishi

Senior Executive Officer and CFO Akihito Mochizuki Managing
Director
MUFG
Bank, Ltd.

Kazuhiro Kishi

Director

Hiroki Miura

Senior Executive Officer

Senior Executive
MUFGAuditor
Bank, Ltd. Aiko Oue
4.2 Mochizuki
945 Officer and CFO Akihito
Independent Corporate
Executive Officer 945
Senior Executive
Naoki
JPMorgan Securities Japan Co., Ltd.
2.9 Kanai
665 Officer
665

Hiroyuki
1.8 Asada

Mizuho Trust & Banking Co., Ltd.

405

1.8

Independent Director

Yasuhiro Goto

Executive Officer

Independent
Director OF NEW YORK
Terushige Nagasawa
Yasuhiro
Goto
THE BANKMELLON

Terushige
Nagasawa
1.6

1.6

Kaoru Chujo

Executive Officer

Yuji Sakuta

Executive Officer

Yuji Sakuta

THE BANK OF NEW YORK MELLON
140042361

Independent Director

140042
Independent
Director

Executive361
OfficerMSIP
CLIENT
SECURITIESStanding
Corporate
Auditor (Independent)
Satoko Kimoto

Corporate
History
Independent Director
Minoru Matsumoto Senior Executive Officer

SeniorOfficer
Executive Officer Wong
Hidetoshi
Shirakawa
AikoHiromi
Oue YoshizawaExecutive
Wing Chung
Standing Corporate Auditor (Independent) Satoko Kimoto

1.4(%)

Custody Bank of Japan, Ltd.

1,016

Naoki Kanai

Director
HirokiCo.,
MiuraLtd.
JPMorgan Securities Japan

Hiroyuki Asada

Independent
Director
Matsumoto Senior Executive
MizuhoTrust & Banking Minoru
Co., Ltd.
405 Officer

Kaoru Chujo

Custody Bank of Japan, Ltd.

Tsutomu Inokuma

Executive Officer

Tan GuiHai

Takashi Suzuki

Executive Officer

Tan GuiHai

Independent Corporate Auditor

Aiko Oue

Executive Officer

Wong Wing ChungIndependent Corporate Auditor

Aiko Oue

Executive Officer

Wong Wing Chung

2006

Began production in Vietnam
to meet rising demand forheadphones and headsets

Transferred from the Second
Section to the First Sectionof the Tokyo Stock Exchange

315

665

2.9

Mizuho Trust & Banking Co., Ltd.

405

1.8

THE BANK OF NEW YORK MELLON
140042361

1.6

Treasury stock (2,647,224 shares) is excluded for the calculation of the “Ratio of Shares Held”.

1.4

Headquarters functions relocated tothe current location, Tsutsujigaoka,
Akishima City (headquarters
relocated in 2013)

2009

1999

70th anniversary

Took over the micro
acoustic components
business from STAR
MICRONICS CO., LTD.
Acquired shares of SUZUKI
KANSHI (THAILAND) CO.,LTD.

Converted Korea-based
ESTec CORPORATION into a
consolidated subsidiary
Began online sales ofcustom-made headphones“KOTORI”

1973

1986

4.2

JPMorgan Securities Japan Co., Ltd.

Treasury stock (2,647,224 shares) is excluded for the calculation of the “Ratio of Shares Held”.

2014-2017

1982

1959

GOLDMAN SACHS INTERNATIONAL

2012

Takashi Suzuki

1988 - 1989

1.4

Independent Corporate Auditor

1955

4.5

945

1.4

1.5

1949

1,016

MUFG Bank, Ltd.

315

317

Merged with
Tonegen Co., Ltd.

Mizuho Bank, Ltd.

2.9

345

Fostex Corp.
established

4.9

GOLDMAN SACHS INTERNATIONAL

4.2
Wong Wing
Chung

BNYM SA/NV FOR BNYM FOR BNYGCM CLIENT ACCOUNTS M LSCB RD

G-205 Speaker loaded
into Japan’s firsttransistor radio

1,097

1.4

MSIP CLIENT SECURITIESBegan supplying
car speakers

Custody Bank of Japan, Ltd.
(trust account)

Tan GuiHai4.5

1.4 Quan Hoang
NguyenRenamed Foster
Electric Co., Ltd.

20.6

Executive Officer1,016

Oh1.5
In-Yong

Began production ofheadphones, microphones,
and speakers in Panyu, China

Ratio of Shares Held
(%)

4,617

Shareholder’s Name

1.5

Executive317
OfficerS. Nishimura and H.
Shinohara established
Shinano Onkyo Institute

Number of Shares Held(thousands)

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

317

Executive345
Officer

1.4* Excluding treasury stock

Major Shareholders

345

BNYM
SA/NV FOR BNYM
FOR Inokuma
BNY
Corporate
AuditorNguyen Quan Hoang
Tsutomu

315

7,936

BNYM SA/NV FOR BNYM FOR BNYGCM CLIENT ACCOUNTS M LSCB RD

Oh In-Yong

Treasury stock (2,647,224 shares) is excluded for the calculation of the “Ratio of Shares Held”.

Domestic corporations, etc. 4.0%

MSIP CLIENT SECURITIES

4.9

Executive Officer

GOLDMAN SACHS INTERNATIONAL

Securities companies 6.4%

Number of shareholders

Nguyen Quan Hoang

Executive Officer

Independent Corporate Auditor

Individuals andothers26.1%

Oh In-Yong

1,097

Tsutomu Inokuma

GCM CLIENT ACCOUNTS M LSCB RD

Financial
institutions
39.2%

Executive Officer

Corporate Auditor

Standing Corporate Auditor (Independent) Satoko Kimoto

Foreign entities,
etc.
24.3%

Executive Officer

Treasury stock (2,647,224 shares) is excluded for the calculation of the “Ratio of Shares Held”.

4.9

1,097

Total number of sharesissued25,000,000 shares

Data Table

Distribution of Shareholders by Shareholder
1
Type

Hiromi Yoshizawa was
appointed as CEO
Atsushi Narikawa was
appointed as COO

2020

Corporate Philosophy

6,770,360,135
yen
Corporate
Profiles/Financial
Information/CorporatebasesHistory
Common Stock
The Prime Market of the Tokyo Stock Exchange

2019

4

authorized to be issued

TypeCompany
Informationby the Company
Foreign entities,

AMERICAS

June 20, 1949

FoundedSustainability Report 2022「English version」

5

Corporate Philosophy

Top Message

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table

1

Foster's ESG Management and Sustainability
Since our founding in 1949, we have consistently striven to
be a sustainable company that is needed by society andthat continues to develop under the corporate creed of“Sincerity", vision of “To make contributions for future society
through acoustics", and our mission “Through acoustic
products or its solutions, a total commitment to help create
a comfortable life and pleasure of communication around theworld. A truly global enterprise our future society counts on."In March 2021, we established our ESG Management
Statement along with the formulation of medium-termbusiness plan, thus announcing Foster’s commitment tomanagement focused on E (environment), S (social), andG (governance) initiatives, both internally and externally. In
April 2022, we reorganized the ESG Promotion Department
into the Sustainability Promotion Department and enhanced
its ability to push forward with ESG management to pursue
the medium- to long-term sustainability of Foster and society.

ESG Management Statement
In March 2021, we established the Foster Group ESG Management Statement. By positioning “Be
happy 80%” (see page 2) for its employees at the root of all corporate activities and by improving
their well-being, it expresses in concrete term what we want to be like, which will be the guidepost inpromoting ESG management toward the realization of sustainability both for the Group and society.

Foster Group ESG Management Statement

Akihito Mochizuki, Sustainability Officer

Above all, we position the realization of a decarbonized society as one of the most important businesschallenges we face and engage in initiatives accordingly. Specifically, we have set a new long-term
goal, aim to achieve carbon neutrality by 2050. We have also revised our medium-term goal from theprevious "reduce absolute CO2 emissions 30% by 2030 from a 2018 base-year" to reduce absolute
CO2 emissions 50%, following a decision to accelerate initiatives. We will strive to build a sustainable
society with all of the technological capabilities of the Foster Group, improving from our previous "social
responsibilities to be fulfilled by a company" to the "source of a differentiating competitive advantage."
Further, in addition to “Environment”, there have been growing social concerns about and requirements
related to “Human Rights”, for the realization of a sustainable society. The Foster Group operates
globally in Japan, the rest of Asia, the Americas, and Europe. Therefore, we advance initiatives toincrease the respect for human rights within the Group and its supply chain, aiming to provide andbuild workplaces and a society where people with diverse attributes, such as age, gender, nationality,
and creed, respect and accept each other as they are.
The Foster Group and all of its employees will continue to push forward with corporate activities withsincerity, our corporate creed that was set based on ESG management, leveraging non-financial
capital such as (1) intellectual capital, (2) human capital, (3) manufactured capital, (4) social andrelationship capital, and (5) natural capital, and (6) financial capital, which are the strengths of the
Foster Group. Thus, we will increase our corporate value and contribute even more greatly to themedium- to long-term sustainability of the Group and also society while responding appropriately tothe expectations of and requests from our stakeholders.

At the Foster Group, our ESG initiatives stem from our corporate creed of “Sincerity”. The“Sincerity”, is defined in Foster Rhythm* as “Always tell the truth, be kind to others as well as
the planet, and serve with all your heart”.
Foster believes that its employees play the central role in ESG activities. A company cannot
promote ESG if it cannot make its employees, who are at the root of all corporate activities,
happy. Based on this idea, we have positioned “Be Happy 80%” for employees as the base pointof our ESG activities. We would like to contribute to a future society to fulfill the expectations of
all the stakeholders. We believe that 80%, not 100%, is the benchmark for happiness. We haveleft room to consider the satisfaction of other stakeholders as well as that of our company andourselves.
* Foster Rhythm: Corporate philosophies including the corporate creed of “Sincerity” which were expressed inplain words by our employees, so they will be understood by our global employees

Foster is strongly committed to ESG and aims to achieve the following
from a long-term perspective.
1. Initiatives to promote “Decarbonized Society”, “Resource Recycling”, and “Harmony with
Nature” and tireless efforts to achieve “Zero Emissions”
2. E
 xciting, unrestricted work styles appropriate for each life stage and goal in life
3. A society where people with diverse attributes, such as age, gender, nationality, and creed,
respect each other and accept each other as they are
4. A true expert trusted by customers and business partners
5. H
 aving “Zero Defects” established in various aspects, including product quality andbusiness quality
6. Improving the quality of people’s lives by providing solutions through sound and vibration
technologies
7. Implementing strict risk management and enhancing the compliance structure, which
contributes to strengthening corporate governance⇒	Enriching people’s lives with the power of sound and vibration and delivering happinessand sustainable future to all stakeholders — this is what we desire to do at Foster.

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The Foster Group's Promotion of Sustainability

Sustainability Charter

The Foster Group issued the first version of its CSR Charter*1) in 2006, and updated it to pursue global
versatility and universality in 2010, by incorporating the EICC*2) 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 ESG management. In addition to these efforts, we also promote sustainability in compliance with the United Nations
Global Compact and the ISO 14001 and ISO 45001 standards, among other global guidelines.

We established the new Sustainability Charter in March 2022 as a revision of the CSR Charter that
we published in 2006. The revised charter clearly states that we will pursue the (medium- to longterm) sustainability of both the Group and society, in addition to continuing to work on corporatesocial responsibility (CSR). Further, in the supplemental rules of the charter, we state our medium- tolong-term goals in the “ESG Management Statement” for practicing management focused on aspects of E (environment), S (social), and G (governance), and we have identified “Materiality” (priority
issues), the issues we should specifically address, aiming to achieve sustainability.

*1) Revised to Sustainability Charter in March 2022
*2) Electronic Industry Citizenship Coalition (renamed Responsible Business Alliance in 2017)

Materiality (Priority Issues)

Sustainability Promotion Structure
As shown in the following “Sustainability Promotion Structure”, the Foster Group has established theSustainability Committee with representatives of related sections as core members, at its headquarters.
The Sustainability Committee, which meets every month, is chaired by the president. The committee
meets via a teleconferencing system and the sustainability officer who is the chair of the committee andthe sustainability representatives and staff from the headquarters and each site attend the meetings.
They monitor the activities of the Group as a whole for the promotion of sustainability and engage incollaborative activities. Important matters decided on by the Sustainability Committee are deliberated
during Board of Directors' meetings which are attended by directors and outside directors.

We issued the revised Materiality in March 2021. In identifying Materiality, we conducted backcastingfrom our ESG Management Statement and medium- to long-term goals under the mid-term businessplan and listed the material items (priority issues) that should be addressed first by reflecting expectations of our stakeholders, including customers and external rating companies. Further, the ESG Promotion Task Force, consisting of staff and managers in each ESG field, held discussions, and material
items were determined and approved by the Sustainability Committee and the Board of Directors.

Environment (E)Social (S)Decarbonized Society

Product Quality
and Safety

Governance (G)General Meeting of Shareholders
Board of Statutory Auditors

Board of Directors

Accounting Auditor* CO₂ Emissions (Scope1, 2, 3)

CEO/ PresidentInternal Audit Department
Sustainability
Officer

Resource Recycling

Sustainability Promotion
Department
Sustainability
Committee

Sustainability
Representative
Corporate divisions and business divisions
Engineering Division

Sales Division

Production Division* Resource saving products
・Solder-less, adhesive-less,lightweight* Production process improvement
・Reduction of waste emissions(Reduction of hazardous waste)
・Circulation of water resources
related to papermaking

Relevant committees
Compliance Committee
Risk and Crisis Management
Committee
Environment Committee
Health and Safety Committee, etc.

Supply Chain
Management

Governance
Enhancement

Creation of Exciting
WorkplaceGroup companies
Global Corporate Support
Division(Including procurement department) (Including human resources, generalaffairs, governance, legal affairs,
and finance departments)

Quality Assurance Division(Including quality andenvironmental departments)

Harmony with Nature* Management of chemical
substances (no legal violation)

Diversity andInclusion

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Our Approach to Materiality (Priority Issues)
ESG

Materiality

Environment (E)Decarbonized Society

Resource Recycling

Target (KPI)

Social (S)Supply Chain Management

Creation of Exciting Workplace

Governance (G)Diversity and Inclusion

Achievements until FY2021

Refer to• Absolute Scope 1, 2 emissions• FY2025 Target: Reduce by 30% from a FY2018 base-year• FY2030 Target: Reduce by 50% from a FY2018 base-year

Reduced by 32% reduction from a FY2018 base-year• Weight reduction: Develop element technologies to achieve
further weight reduction from conventional car speakers.

FY2025 target: Productize developed products incorporating elemental technologies forspeakers weighing less than 100 g.

Technologies developed for weight reduction• Achieved productization of a product developed on our own that incorporates the CFRTP*(1) diaphragm material as a technology for weight
reduction to less than 120 g.

• Increase the ratio of environmentally responsible speakers*(2)The ratio of environmentally responsible car speakers*(2) (per sales): FY2025 target: 20%• FY2021: 13%• FY2022: 14%• FY2023: 16%• FY2024: 18%• FY2025: 20%• 14% (as of March 31, 2022)• Reduce the use of VOCs

The ratio of toluene-free new mobile audio products: FY2025 target: 100%
• FY2021: 40%• FY2022: 60%• FY2023: 80%• FY2024: 100%

• 44.4% (as of March 31, 2022)• The number of failures with a serious social impact (human
life, property, environment and so on)

Maintain 0 failures

0 failures• SAQ response rate from suppliers• Existing suppliers: 93% or higher

93%• New suppliers: 100%100%

• Existing suppliers: 99% or higher

99%• New suppliers: 100%100%

• Average deviation value of employee satisfaction survey
items (headquarters)• Total working hours per employee (headquarters)• Rate of specific health guidance taken (headquarters)• Rate of periodic health examinations taken (headquarters)• Displaced worker due to nursing care (headquarters)

53.0 or more

FY2021: 50.7

Monthly average of 153 hours or less80%
Maintain 100%
Maintain 0%

151.9 hours
82.4% (including people those who received a post-health checkup interview)
Maintained 100%
Maintained 0%• Female manager ratio (headquarters)• Ratio of overseas human resources (headquarters)• Employment rate of persons with disabilities (headquarters)• Ratio of males taking childcare leave (headquarters)• Provide training to encourage the development of an organization where diverse people can demonstrate their capabilities (headquarters).

FY2021: 15% FY2025: 30%
FY2021: 20% FY2025: 30%
More than 2.3% of the legal employment rate
100%
Provide training to eliminate unconscious biases which hamper the active participationof women and foreigners, and deepen understanding of SOGI and LGBT issues

13.2% (as of March 31, 2022)
9.8% (as of March 31, 2022)
2.3% (FY2021 average)
57.1% (percentage of special leave for spouse's childbirth taken: 100%)(1) L GBT issues training to make diversity an organizational strength (participation rate: 92%)
(2) T raining on unconscious bias (participation rate: 91%)(3) Basic knowledge on the prevention of workplace harassment (participation
rate: 89%)
(4) Basic knowledge regarding mental toughness (participation rate: 87%)(5) Mental health management in the workplace (participation rate: 86%)

• Enhancement of corporate governanceCompliance with the revised Corporate Governance Code: 100%100%

• Reinforcement of compliance• Maintain a response rate of 100% to the compliance test and the compliancesurvey.
• Percentage of employees informed of the internal whistleblowing system: 100%
• Provide compliance training and maintain the satisfaction level at 4 or higher out of 5.

100%
100%

Pages

Maintained 4 or higher on average.

27 - 29• Achievement rate of risk profile review: 100%
• Achievement rate of monitoring and achieving key items

100%
98%

Harmony with Nature

Product Quality and Safety*(1) CFRTP: Carbon Fiber Reinforced Thermo Plastics*(2) Environmentally responsible speaker: A speaker with any environmentally friendly element, such as light weight, reduced applications of VOCs or solder, and application of dry process• Response rate for the conflict minerals survey collected fromsuppliers

Governance Enhancement• Enhancement of risk and crisis management

Corresponding
SDGs

Page 13

Page 14

Page 14

Page 18Pages
16 - 17Pages
16 - 17Pages
21 - 23Pages
20 - 21

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Sustainable Development Goals (SDGs)
The Foster Group will continue to promote the Sustainable Development Goals (SDGs), which are proposed by the United Nations,and conduct sustainability activities through the UNGC framework.

Our Actions on SDGs
SDGs

Activities

Business

SocialContribution

In-house

Refer to

SDGs

Activities

Business

SocialContribution

In-house

Refer to●Pages
20 - 21

Donation activities for low-income
households, assistance with food,clothes, necessities, etc.

●

Page 26

Education on promoting diversity
Driving the employment of diverse
human resources, regardless of theirnationality

Participation in a blood donation
program●Page 26

Management of chemical substances●

Page 13

Page 22

Promotion of recycling●

Page 13

Environmentally friendly products●

Page 14

CO₂ reduction

●

Pages
11 - 13

Promotion of clean energy use●

Page 13

Environmentally friendly products●

Page 14

Implementation of Health Point Systemand health enhancement seminars●●

Acceptance of student interns

Opening of an intranet on diversity
to provide information or supporting
women’s active participation

Page 21●

Page 20

Water risk management●

Page 13

Planting activities

CO₂ reduction●

Page 13

Basic policy on conflict minerals

Management of environmentallyhazardous substances●

Page 13Governance structure●

Page 15●

Page 17●Pages
27 - 31Work style reform

●

Pages
21 - 22

CSR assessments and audits

●

Pages
16 - 17

Reduction of scheduled working hours

●

Pages
21 - 22

Responsible procurement

●

Pages
16 - 17

Lifting the ban on second jobs●

Page 22

Enrichment of holiday/leave programs●

Page 22

Personnel system with multiple courses●

Page 23

Technical master system●

Page 23

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United Nations Global Compact

About United
Nations Global
Compact

Activities as amember of the
Global Compact
Network Japan(GCNJ)In January 2017, Foster Groupsigned and joined the United Nations Global Compact (UNGC), theworld’s largest corporate sustainability initiative.
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, and sustainability procurement, etc.

We are participating in the Human-rights Education Subcommittee, Environmental Management Subcommittee, WEPs
Subcommittee, Supply Chain Subcommittee, DRR (Disaster
Risk Reduction) Subcommittee, ESG Subcommittee, SDGs
Subcommittee, Reporting Study Subcommittee, Subcommittee to Cultivate Awareness of the Global Compact, CSV Subcommittee, and Circular Economy Subcommittee of the GCNJ,
which consist of the member companies of the UNGC (as ofJuly 2022). The subcommittees not only share the sustainability-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 sustainability activities of various companies based on the member
companies’ experiences in a wide range of industries. In addition, knowledge gained at the subcommittees is reflected in oursustainability activities.

The Task Force on Climate-related Financial Disclosures (TCFD)
Recommendations
Believing in the importance of topics related to the environment and climate change, we declared our
support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD*)
in February 2022. At the same time, we joined the TCFD Consortium, where member companies,
financial institutions, and other entities discuss effective information disclosure and appropriate initiatives following the TCFD recommendations.

* Task Force on Climate-related Financial Disclosures:This task force was established in 2015 by the Financial Stability Board (FSB), which comprises
central banks, financial authorities, and international organizations from all over the world. It isaimed at considering how to estimate the impact of climate change on business management
and how to disclose such information. It recommends that companies and other entities disclose
information about climate change-related risks and opportunities.
We will identify our climate change-related risks and opportunities and then continue to drive effective measures by leveraging internal and external knowledge. At the same time, we will disclose
information proactively by following the TCFD recommendations.

Response to the TCFD Recommendations
Details of the Foster Group's information disclosure based on the TCFD recommendations are available here (page 11).

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Environment
Environmental Philosophy and Policy
Environmental Philosophy
As a global corporation in the acoustic industry, Foster Group contributes to the realization of asustainable society in all fields of corporate activities by considering the harmony between; The
activities under the company vision of “To make contributions for future society through acoustics”,
and Environment as one of essential tasks.

Environmental Policy- Preface Foster Group aims to contribute for “Decarbonized society”, “Resource recycling” and “Harmony
with nature”, by pursuing eco-friendly technologies in the lifecycle of our products, and people ofFoster Group act with priority on eco-friendliness.
1. We contribute to the realization of a sustainable society by continually improving our environmental
management systems, and by communicating and cooperating with our stakeholders proactively.
2. Realization of “Decarbonized society” We reduce CO2 emissions throughout our value chain including procurement of raw materials, manufacturing, transportation, selling and disposal of our
products.
3. Realization of “Resource recycling” We strive for the waste reduction by promoting effective useof resources in our group-wide activities and product development. We also use water resources
responsibly in our manufacturing processes.
4. Realization of “Harmony with nature” We strive for the promotion of activities considering Biodiversity conservation, prevention of pollution and environmental load reduction by chemical substancemanagement.
5. We comply with domestic and international environmental laws and regulations and other requirements related to our group-wide activities.
6. We develop human resources who practice environmental activities through enlightening people
involved in group activities and educating employees.
[Issued following the approval by senior management in July 1993. Revised in March 2021.]て、ISO14001 認定証を提示しています。

Specific Environmental Initiatives

しBased on our Environmental Philosophy and
Policy, we have set mid-term environmental
goals to achieve by 2025 for three issues: decarbonized society, resource recycling, andharmony with nature. We are pursuing specific initiatives to achieve these goals. Further,countermeasures against climate change areglobally important tasks, and we need to takelong-term initiatives. We are taking action withthe aim of achieving carbon neutrality by 2050.

Environmental
Philosophy

項目

環境理念

環境理念

Environmental Policy
Preface
環境方針 前文

環境方針

Item 1:
１項︓環境マネジメントシステムの継続的改善、ステークホルダーとの連携
Continuous improvementof environmental management systems and cooperation with stakeholders

Item ２項︓脱炭素社会
2:
Item
3:
３項︓資源循環Decarbonized society
Resource recycling

Item５項︓法令順守
5:
Compliance with laws

環境方針

Item 4:
４項︓自然との共生
Harmony with nature

Item 6:６項︓人財育成

Human resources development
and regulations* The Environmental Philosophy shows the goals of ourenvironmental activities while the preface of the Environmental Policy shows the direction of such activities. The
six items of Environmental Policy show the prerequisites for achieving the goals, three mid-term environmental goals, and thefactors for achieving them, which are reflected in the Foster Group’s environmental management system.

Mid-Term Environmental Goals 2025
To achieve the mid-term environmental goals 2025 that we set in 2020, we continue activities to reduce
the environmental load from a lifecycle perspective, by working together with manufacturing sites.
Goals
Reduction of
Item 2 ofDecarbonized
CO2 emissions
Environmentalsociety
Policy(Scope1,2,3)
Resource saving products
Item 3 ofResource
Environmental
recycling
PolicyImprovementof production
process
Managementof chemical
substances

Item 4 ofHarmony with
Biodiversity
Environmental
natureconservation
PolicyPartnership withstakeholders

2020 - 2025

FY2021ResultScope 1, 2: Reduce absolute CO2 emissions by
30% from a 2018 base-year
Scope 3: Reduce absolute CO2 emissions by 3%
from a 2018 base-year- Establish technology for eco-friendly products- Reduce the hazardous waste generated by 5%from a 2018 base-year- Reduce water consumption (Efficient use ofwater resource)Seepage 7of thisreport.

- Build global management system based on thecompany standards and regulations- Establish a biodiversity policy and the mid-term
action plan
- Build a cooperative structure and implementation of activities with our suppliers* For details of the mid- and long-term CO2 reduction goals, see "4. Metrics and Targets" (page 12) of "Information Disclosure
Based on the TCFD Recommendations."

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Information Disclosure Based on
the TCFD Recommendations

Impact on Business Related to Climate Change Risks and Opportunities
Climate-related risks/
opportunities

In February 2022, we declared our support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD*). (*See page 9) We will identify our climate change-relatedrisks and opportunities and then continue to drive effective measures by leveraging internal andexternal knowledge and contribute to building a sustainable society.

1. GovernanceViewing sustainability as an important theme, we announced our ESG Management Statement and
set goals of achieving "a decarbonized society" and "zero emissions in 2050" as part of our materiality (priority issues) in March 2021. These goals and reduction activities have been shared by all
employees and are being driven by them.
We have set up the Sustainability Committee (which meets every month), chaired by the president,
for the purpose of driving ESG management. This committee meets with the attendance of thesustainability officer, heads of divisions, and persons responsible for the promotion of sustainability
activities appointed by departments of the headquarters and overseas bases. It identifies climatechange-related issues, deliberates on and determines related policies and measures, and sharesand monitors their progress.
The Board of Directors deliberates on and makes decisions on announcements of support and information disclosure related to TCFD concerning management issues, as well as reduction targets,measures, and other matters. It also receives reports on deliberations and progress made by thecommittee, regularly and as needed, thus supervising the execution of operations by the committee.
Link to related page:"Sustainability Promotion Structure" under "Foster Group ESG Management" (page 6)

2. Strategy
Under the framework advocated in the TCFD recommendations, we considered changes in theexternal environment in 2030 and analyzed the impact of climate change on us.
We adopted the 1.5-degree and 4-degree scenarios for analyzing risks and opportunities. Regardingtransition risks, we analyzed how policies and markets will be changed for alleviating climate change.
Concerning physical risks, we also analyzed how the frequency and impact of climate change-related weather disasters will change.
We reflected the identified risks and opportunities in the medium-term business plan. Moving forward, we will also consider the financial impact on the Company. In the current fiscal year, we areconducting an analysis of the automotive business, which is subject to a significant impact. We willcontinue the analysis by focusing on other businesses as well.

Impact on business activities

Assessment

Policies andregulations• Increase in business costs for responding to climate change-related
regulations (including carbon tax, investments in additional equipment
for saving energy and using renewable energy, and the purchase ofgreen energy certificates)• Increase in cost, which is expected if regulations related to recycling
and the use of recycled materials are tightened

Large

Technologies• Risk that market share may be decreased due to a delay in technology
development toward a decarbonized society

LargeMarket• The impact that is expected if we fail to respond to business partners'
requests to take environmental measures (such as introduction ofrenewable energy and use of recycled materials)• Intensification of competition resulting from an increase in new entrants
to the electric vehicle market, which is expected to expand

Large

Reputation• Decrease in business opportunities resulting from insufficient initiatives
to tackle climate change• Risk of a decline in corporate value that may result from lower ESG
ratings by customers and rating agencies

Large

Acute

• Suspension of factory operations and supply chain disruptions
resulting from damage from a disaster caused by climate change

MediumChronic• Increase in energy consumption for the use of air conditioners andother equipment• Depletion of water resources and restrictions on water intake• Risk of factory inundation resulting from rising sea levels

Small• Reduction of CO2 to be achieved by promoting local production for
Resource
local consumption
effectiveness • Increase in sales opportunities resulting from manufacturing
appropriate for a recycling-oriented society

MediumTransition risks

Physical risks

EnergyOpportunities sources
Products
and services• Decrease in energy costs resulting from the introduction of energysaving equipment and technologies

Large• Increase in sales opportunities achieved by driving the development oftechnologies for low-carbon products• Growth in demand for ADAS-compatible products resulting from the
expansion of markets related to electric vehicles (development of afunction that sends alerts with sounds and vibrations)

Medium• Target business: Automotive as the Company's main business• Level of impact on business activities: Evaluated on a three-point scale of Large, Medium, and Small[Scenarios that were used]
Transition risks: International Energy Agency (IEA)(*1• World Energy Outlook 2021: SDS(*2, STEPS(*3• Net Zero Emissions by 2050 Scenario(*4Physical risks: Intergovernmental Panel on Climate Change (IPCC) (*5• 6th Report: SSP1-1.9, SSP5-8.5 (*6*1. IEA: International Energy Agency*2. SDS: Sustainable Development Scenario*3. STEPS: Stated Policies Scenario*4. NZE: Net Zero Emissions by 2050 Scenario*5. IPCC: Intergovernmental Panel on Climate Change*6. SSP: Shared socioeconomic pathways
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3. Risk Management
We have established the Risk and Crisis Management Committee, which is chaired by the president,
to ensure that risks which may affect business management are addressed promptly and appropriately. This committee evaluates and manages company-wide risks and devises and implements
measures to address them.
Climate change-related risks are positioned among the top risks in the committee's total risk assessment. The Sustainability Committee identifies and evaluates such risks, implements measures
to tackle them, and takes other initiatives to improve the effectiveness of risk management.
Information about the statuses of risk management and measures is also shared with the Board of
Directors, which supervises and monitors risk and crisis management of the overall company andtries to ensure consistency between risk management and materiality analysis, thus enhancing thetotal risk management in the entire company.

4. Metrics and Targets
Toward the achievement of sustainability, we have established the Foster Group ESG Management
Statement, under which we aim for "Decarbonized Society" and "tireless efforts to achieve Zero
Emissions" in the medium and long run. Under this Statement, we have revised our mid-term environmental goals for 2030 (Scope 1, 2) in line with the 1.5-degree goal of the Paris Agreement. We
have also set a new long-term goal for 2050.
(1) Mid-Term Reduction Goals for 2030
• Scope 1, 2: Reduce absolute CO2 emissions 50% by 2030 from a 2018 base-year• Scope 3: Reduce absolute CO2 emissions 15% by 2030 from a 2018 base-year(2) Long-Term Reduction Goal for 2050
• Aim to achieve carbon neutrality by 2050
To achieve this goal, we have developed the CO2 Reduction Action Program [Ver. 2022]. The headquarters and the other sites will work together in accelerating CO2 reduction activities in a groupwide manner.

(3) Specific Reduction Measures
1. Our own power-saving efforts (steady efforts and innovative activities)[Steady efforts]
Specific measures:• Operational improvements: Improvements of operation, maintenance, heat retention, heatinsulation, etc.
• Introduction of energy-saving equipment: Remodeling or replacing equipment[Innovative activities]
Activities:• Studying and introducing new manufacturing methods and design specifications
Specific measures:• Developing innovative technologies through a next-generation speaker project, etc.
2. Renewable energy procurement• Switching electricity purchased from electric power companies to an option with 100% renewable energy sources
3. In-house power generation from renewable energy sources• Introducing equipment for in-house solar power generation• Introducing off-site corporate PPA
4. Purchasing green energy certificates for offsetting (shortfalls)(4) Specific KPIs
• Setting "Power consumption ÷ Net sales" at each site as a KPI for power-saving activities• Having each site set a goal of building a framework, which makes it possible to post the sameamount of net sales with 38% less power consumption than the actual power consumption in
fiscal 2020, by the end of 2024. We will achieve the interim goal for fiscal 2025 (30% reduction
from a 2018 base-year), aiming to surely achieve the fiscal 2030 goal (50% reduction from a 2018
base-year).

Link to related page: Our Approach to Materiality (Priority Issues) (page 7)

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Environment Management System
and ISO 14001 Certification
We have obtained ISO 14001 certification at headquarters andall overseas manufacturing sites and embody the Foster Group’s
Environmental Philosophy and mid-term environmental goals.
At headquarters, we monitor the activities conducted at each siteand check their results. We have expanded the scope of application to the Head Office of Foster Electric (1-1-109 Tsutsujigaoka, Akishima City, Tokyo) and its Shizuoka Office (6-12-2 Toro,
Suruga Ward, Shizuoka City, Shizuoka) while maintaining theenvironment management system. We present the ISO 14001
certification at the request of stakeholders.

Environmental Activities
CO2 Reduction (Scope 1, 2)
The Foster Group’s absolute CO2 emissions in fiscal 2021 were
6% less than the previous fiscal year and 32% below the fiscal
2018 level, partly reflecting restrictions on production activities
amid the COVID-19 pandemic. For Scope 3 emissions, the data
can be found in the Data Table at the end of this report.
CO2 Emissions(t-CO2)

73,19660,06560,00052,54749,5052020

2021

40,00020,000

0
2018

2019
Scope 1+2 total

Environmental Consideration at Headquarters

Each site manages water withdrawal and discharge by setting theirstandards based on local laws and regulations. The headquarters
uses “AQUEDUCT”, a water risk assessment tool of the World Resources Institute (WRI), to understand the local water risks at eachsite. Since 2020, we have been addressing water risks by including“Reduce water consumption” in the mid-term environmental plan.

Our headquarters employs environmental load reduction technologies such as lighting control by daytime sunlight, air conditioning byoutside air, ice thermal storage air conditioning system, and doubleskin facade. Electricity consumption is controlled further by limiting
maximum power consumption during the day, promoting Cool Biz
and Warm Biz campaigns, turning off all the lights in the building forlunch breaks, and having employees work from home in responseto the COVID-19 pandemic. The headquarters strongly promotes
active participation in climate control measures by procuring clean
energy prior to the other sites in the Group. In addition, as part of
ESG activities, we use reusable cups for beverages sold at the cafeteria. (Disposable plastics and paper cups have been abolished).
This initiative was introduced in a special cable TV program on reusebusiness, which was presented by the Ministry of the Environment.

External Communications
Decarbonization Management Promotion Network
We participate in the Decarbonization Management Promotion
Network, which is part of the Program for Enhancing Corporate
Value through Decarbonized Management being run by the Ministry of the Environment, as a target-setting member. (The following site is in Japanese.)
URL: https://www.env.go.jp/earth/ondanka/supply_chain/gvc/
Japan Climate Initiative (JCI)In 2020, we joined the Japan Climate Initiative (JCI) by agreeing
to its declaration of “Joining the front line of the global push fordecarbonization from Japan”.
URL: https://japanclimate.org/

Chemical Substance Management

100,000

80,000

Water Risk Management

The Group has set forth its autonomous management standard,
which reflects the applicable laws and regulations of countries,
including the RoHS Directive and REACH regulations, and customers’ requests for handling environmentally hazardous substances contained in its products to minimize their impact on
the environment. We eliminate any controlled substances fromour products by managing applicable parts and/or materials purchased. Based on the aforementioned scheme, we have established an optimum management system for the efficient searchand collection of information about chemical substances that arecontained in parts and materials and precise communication of
information necessary in the supply chain.
In addition, to ensure communications of related information, we
provide our suppliers with briefing meetings every year primarily
at our overseas sites.

Reusable cup

Initiatives to Achieve Zero Waste Emissions
At headquarters we are engaged in the recycling of waste (wastethat contains recyclable elements) through the sorting and separation of regular waste, plastics and industrial waste, together
with comprehensive awareness raising activities.
Assembled products and parts are being recycled into raw materials through professional recycling, as part of our continuing
activities aiming to achieve zero waste emissions from our business activities.

Recycled
materials being
carried out

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Environmentally Friendly Products

Headphones and Headsets

Speakers

For headphones and headsets, we have been active in incorporating environmental considerations
in our product and/or process design. In reducing environmentally hazardous substances in our
products, we address the most up-to-date information regarding country-specific legal requirements
and the RoHS2, and propose to our customers. As a way of reducing waste volume, we have also
been keen on minimizing waste materials, reusing raw materials by introducing new equipment, anddeveloping products made of natural materials. For products with electronic circuits, we have adopted power-saving parts in our efforts to develop products with low power consumption.
For microspeakers used for headphones or headsets, we are working towards environmentallyfriendly product manufacturing by introducing adhesives that do not contain toluene for new microspeakers in order to reduce VOCs (replacing the parts that use solvent adhesives).

We are accelerating moves to develop basic technologies for next-generation speakers for eco-friendly vehicles and to introduce such technologies to commercial products.
[Development of lightweight speakers] We are developing on our own and productizing speakers
incorporating technologies enabling lighter weight, by taking measures including optimization of resinand metal components, which are made with optimization design using CAE analysis, and studies
of carbon fiber reinforced thermoplastics (CFRTP) as a new material. At present, we continue to develop element technologies for lightweight speakers, aiming to reduce the weight of 6.5” lightweight
speaker, which is approx. 200 g, to 100 g or less by 2025.
[VOC reduction] As initiatives to reduce the volume of VOCs remaining at production sites and in thepassenger cabins of vehicles, we have cut the use of organic solvent adhesives for bonding partsand drive the development and adoption for commercial products of an adhesive with a reduced
solvent content. We are also committed to the development of bonding methods which do not use
adhesives, such as ultrasonic welding.
[Reduction of CO2 emissions] We are undertaking design development activities for reducing power
consumed in manufacturing speakers to cut CO2 emissions. We are making development efforts toachieve the medium-term CO2 emissions reduction target, by improving and changing methods ofbonding parts and by reducing the use of a drying furnace in stages.
* We will continue development and introduction with a target of achieving 30% as the ratio (to sales) of commercialized car speakers incorporating these environmental technologies.
2021 result: 14%2025 target: 20% or higher
2030 target: 30% or higher[Development target and result for toluene-free products]• Target for 2025: The ratio of products using toluene-free adhesives to be 100% by 2025.
• FY2021 Result: The ratio of products using toluene-free adhesives: 44%[Plans for achieving targets]• Make confirmations based on requirements on the use of toluene in the development and design
stage.
• Continue to study alternative adhesives to achieve 100% as the ratio of products using toluenefree adhesives.

Adhesives
Adhesives

Speakers developed with weight reduction
technologies

Actuators
We proactively apply environmentally friendly design to haptic vibration actuator devices, which area part of new user interfaces for CASE*, VR, AR, and other technologies. In consideration of VOCemissions, we have adopted adhesives that do not contain harmful solvents. To reduce the labornecessary to manufacture products, we have realized quick curing using UV radiation and pulse heat soldering. In addition, toreduce solder consumption, we have developed resistance welding, etc. and put it to practical use. We will maintain our status
of using adhesives that 100% do not contain harmful solvents.

Example: Environmentally friendly microspeaker(microspeaker with a 35 mm diameter for headphones)

Toluene-free adhesives

Toluene-free tapes

Example: Application of toluene-free adhesives
Example: Product developed by using power-saving parts(Bluetooth wireless earphones)* CASE: Connected, Autonomous, Shared, Electric

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Environment Month Activities (Headquarters)

Environment Month Activities (Overseas)

Environment Lecture Presentation

China

We invited an outside expert to speak on decarbonization management leading to corporate value
to our officers, department heads, and group leaders (in the form of a Web conference). The lecture
served as an opportunity to think about issues that we should address.

We performed cleanup activities around each plant to raise employees’ awareness on environmental
protection.

Other activities
We solicited photos of the immediate natural environment
and environmental slogans, thus created catalysts to be
in close contact with the natural environment and think
about environmental initiatives from different positions.

City cleanup activities

VietnamEnvironment Lecture Presentation

We performed cleanup activities around each plant. We also undertook planting activities and provided environmental training, internally at each plant.

Akishima City Cleanup Movement (Mini-Clean Activities)
We prepare an annual plan to carry out monthly mini-clean activities of clearing the footpaths andsidewalks around our headquarters. We are working towards the beautification of our local area (biodiversity protection), in which all departments including the members of the Environment Committee
can participate. Although many of those activities were postponed or cancelled due to the COVID-19
pandemic, the annual number of participants increased by as much as 75% from the previous fiscal
year, to 113 (participation rate: 22.3%). The total weight of waste increased to 37 kg. This fiscal year,
we will also participate in the city cleanup movement of Akishima City.

Internal training

Planting activities

City cleanup activities

Myanmar
We performed cleanup activities around the plant. We further performed planting activities and held
an environmental competition to raise environmental awareness internally.

Mini-clean activities

City cleanup activities

Planting activities

Environmental competition

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SocialSustainability Promotion in the
Supply Chain
Driving sustainability activities is not limited within a company or groupcompanies alone, but is to be managed by the entire supply chain
including customers/suppliers. We are proactive in responding to sustainability-related requests from customers, driving sustainability activities within the Foster Group, and implementing responsible procurement activities for suppliers.

Customer Audit and Questionnaire
We respond to various sustainability-related requests from over 60
corporate customers. We have received a total of 2 CSR audits from
2 corporate customers from April 2021 through March 2022. In addition, we responded to a total of 38 sustainability-related surveys by 19
corporate customers in the past year. We will organize issues identified
in this process, make improvements, and improve our sustainability
initiatives further.
We would like to continue driving sustainability-based manufacturing
to respond sincerely to sustainability-related requests.

Internal Audit on Sustainability
We conduct internal audit on sustainability to check the status of oursustainability activities and to maintain a sound framework for driving such activities. We conducted a total of 23 sustainability-related
internal audits at target sites during April 2021 to March 2022. The
standards and guidelines for these audits were based on local laws, inprinciple, and we also applied RBA code of conduct, RBA-VAP (Validated Assessment Program), ISO 14001, ISO 45001, SA8000, as wellas customer standards.

Responsible Procurement
In our global expansion, we have developed the “Basic Principles ofProcurement” for the supply chain, including ourselves and our suppliers, based on which we build fair and healthy relationships.

Basic Principles of Procurement
We will deal with all of our suppliers in good faith.
1. Compliance with laws and ordinances
We will comply with the laws, ordinances and regulations in the

countries and regions where we conduct business activities, andwill conduct purchasing duties in accordance with social ethics.
We will not accept any gifts or entertainment that violates laws orsocial ethics.
2. Fairness and impartiality
We will keep our doors open and provide equal opportunities to allbusinesses, and will evaluate and select suppliers with impartiality
based on reasonable criteria.
3. Sustainable procurement
We will promote clean and green procurement based on the Foster Group Supplier Sustainability Code of Conduct.
4. Partnerships
We will endeavor to deepen mutual understanding with our suppliers and build bonds of trust with them.
5. Confidentialit
We will strictly manage confidential information that comes into ourknowledge in doing business.

Clean Procurement
The Foster Group Code of Conduct for Staff stipulates that we shallcomply with laws and internal rules related to entertainment and gifts
to and from customers and suppliers, and prohibits us from providing
and accepting profits in violation of such laws and rules. Specifically,
we have set strict rules on transactions, including the provision andacceptance of money and coupons, acceptance of gifts, provision of
goods as gifts, and provision and acceptance of entertainment.

Representatives and Structures
The Procurement Department belongs to the Production Division andperforms activities under the head of the division (Executive Officer) as
the representative. Each manufacturing site and business division has
a procurement department. We are enhancing sustainability activities
in cooperation with each manufacturing site and business division. We
check the PDCA cycle, share future issues, and take appropriate actions at Sustainability Committee Meeting (held monthly), Global Procurement Meeting held by the representatives of the Procurement Department from all sites (held biannually), and the Supplier Procurement
Conference, in which suppliers and our president and other directors
participate (held once every two years).

Management System
We strive to trade with suppliers who not only provide excellent technologies, quality, delivery dates, and suchlike, but also take sustainability initiatives regarding human rights, labor, safety, the environment,compliance, information security, and others. We believe the Procure-ment Department’s promotion of sustainability to be an important business policy and conduct management review on a regular basis. Our
suppliers conduct CSR self-assessments for us, and we include CSR
requirements in the basic transaction agreements that we enter intowith them. Further, we conduct CSR audits of our suppliers and request that they take corrective actions to improve based on the resultsof the CSR self-assessment and of the regular audits on quality (ISO,VDA, and IATF), the environment (hazardous substance management
and ISO 14001), and CSR (status of CSR activities) and other evaluations regarding delivery dates, services, and other aspects of the relationships. We take measures to address the problem of conflict minerals that adhere to the OECD Conflict Minerals Due Diligence Guide.

Education
The Procurement Department implements an education and training
plan covering an extensive choice of programs for acquiring a widearray of necessary skills, including ones on sustainability operations. In
2021, a total of 576 employees received training online in 92 courses,
mainly those on overall sustainability matters, legal affairs (contracts
and intellectual property), the environment (management of controlled
substances, environmental measurement, and ISO 14001), quality(ISO, VDA, IATF), QMS, EMS (auditor training), the Subcontract Act,
product technologies, and raw materials and components. These
training courses are aimed at improving skills to solve problems at
work sites. We provided the training for overseas sites by using a video conferencing system and LMS, thus developing human resources
who will fulfill social responsibilities in procurement operations. Further,in 2021, we held an environmental briefing remotely for 400 people
from all of our 257 supplier companies and informed them fully of controlled substances and regulatory requirements that have been added,
the time when they would come into effect, and other matters.

Sustainable Procurement
To promote sustainable procurement activities, we established theFoster Group Supplier Sustainability Code of Conduct in 2016 andhave been driving such activities since then. We first developed related internal rules and documents. In 2018, we started requesting suppliers to sign the agreement with the Foster Group Supplier
Sustainability Code of Conduct, perform self-assessment, and takecorrective actions. In 2020, we conducted SAQ (Self-Assessment
Questionnaire) of approximately 250 suppliers, and where necessary,requested them to take corrective actions and performed on-site audit, in our efforts to build a sound supply chain. Moving forward, we
will establish initiatives by working together with suppliers in identifying issues to address.
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Overview of Our Supplier Partners

CSR Self-Assessments and Supplier Audits

We trade with approximately 300 suppliers, 58% of which are in
China. The machined parts industry accounts for 77% of all businesssectors. We work on sustainability initiatives throughout the entire
supply chain and drive responsible procurement activities with Group
companies and suppliers.

Others9%

Others9%

Status of
Status of
ASEAN
ChinaTransactions
Transactions(by region) 30%61% (by region)

China
61%

In fiscal 2018, we began having our suppliers conduct CSR selfassessments concerning their initiatives addressing human rights,
labor, safety, the environment, compliance, and information security.
Based on the results of the self-assessment, we visit suppliers to
inspect their work sites and interview them as necessary. In fiscal
2021, we had approximately 250 suppliers conduct self-assessments.
Based on their results, we audited six of the companies, which
Electronics
Electronics
5%5%
needed corrections, and audited two of them again to check if they
have taken countermeasures. We created corrective action plans byMaterials
Materials
sharing
Machined
Machinedspecific points needing improvement in the on-site audits
17%
17%
Status of parts Status of andparts
requested the suppliers to take corrective actions proactively.
Transactions
78%TransactionsWe will
78%continue to request that suppliers conduct self-assessments(by business(by business
type)type) regularly and take corrective action immediately if any problems are
identified, in our efforts to build a sound supply chain.

Intra-Industry Collaboration (Engagement)

Supplier Selection and Evaluation
The Foster Group sets the implementation of sustainability activities
as a business condition when selecting suppliers. We ask new
suppliers to agree to the Foster Group Supplier Sustainability Codeof Conduct and reply to the SAQ (Self-Assessment Questionnaire).
We conclude a basic transaction agreement containing CSR
requirements with suppliers before starting trade with them. Fromamong our existing suppliers, we identify important suppliers who
together constitute the top 80% or so in terms of the amount ofpurchases in the previous fiscal year, with a focus on those fromwhom we purchase important raw materials or irreplaceable items,
and ask them to reply to the SAQ. Based on the results of the SAQ,
we conduct audits, give instructions on corrective and improvement
actions, and provide educational activities for them.

Initiatives for Tier-2 and Lower-Tier Suppliers
Through our Tier-1 suppliers, we request that our Tier-2 and lowertier suppliers comply with the Foster Group Supplier Sustainability
Code of Conduct. Specific initiatives include requesting that Tier-1
suppliers distribute the Code of Conduct to their own suppliers andrequire that they comply with it, in addition to asking Tier-1 suppliers
themselves to understand the Code of Conduct, share it internally,
and conduct self-assessments to ensure their compliance with it.

Since fiscal 2016, we have been a member of the Global Compact
Network Japan (GCNJ), a network of the United Nations Global
Compact (UNGC), and have engaged in the activities of the Supply
Chain Subcommittee of the GCNJ. In this subcommittee, wehave discussed the latest global supply chain trends, beyond theboundaries between industries, and the practical issues regarding
sustainable procurement that are faced by each industry andcompany. We work on tasks such as the creation of deliverables
for solving the above practical issues as well as the consideration
and revision of CSR self-assessments, among others. In addition,
because the numbers of minerals designated as conflict minerals
are increasing, we participate in the Outreach Meeting hosted by the
Responsible Business Alliance (RBA) and explanatory meetings on
conflict minerals hosted by the Japan Electronics and Information
Technology Industries Association (JEITA), to ensure that informationis shared regarding the latest trends and to develop intra-industry
collaborations that raise awareness in the supply chain and improvethe efficiency of investigations into conflict minerals.
Supply Chain Subcommittee of the GCNJCSR Procurement Self-Assessment Tool Set(The following site is in Japanese)
https://www.ungcjn.org/activities/topics/detail.php?id=357

Connecting with Our Business Partners inEnvironmental Burden Reduction
We have established the “Green Procurement Standard” for chemical
substances contained in the procured parts, and connect with ourbusiness partners to reduce environmental burdens.

Responsible Minerals Sourcing
Illegal mining and smuggling of minerals by armed forces/groups in
the Democratic Republic of the Congo, its surrounding countries,
and high-risk regions not only provide a source of funding for thesegroups, but also lead to human-rights violation such as child labor,
poor working conditions, environmental destruction, and otherissues. In accordance with the Dodd-Frank Wall Street Reform andConsumer Protection Act in the U.S. established in July 2010, we
promote responsible minerals sourcing for the entire supply chain to
fulfill social responsibility in procurement activities.

Our Approach to Due Diligence
We promote responsible minerals sourcing for the entire supply chain
by communicating our policies to our business partners. We use
standard investigation tools and materials as it requires cooperationfrom all the business partners including smelters. As for tools,
we refer to Conflict Minerals Reporting Template (CMRT) issued
by the Responsible Minerals Initiative (RMI). We also attend theinquiry briefings held by JEITA Responsible Minerals Trade Working
Group and use investigation manuals/guidance commonly sharedwith automotive manufacturers and Japan Auto Parts Industries
Association.

Conflict Minerals Investigations
In fiscal 2021, we achieved a 99% response rate for investigations
into conflict minerals carried out on approximately 300 suppliers. We
conducted risk analysis and evaluation from collected CMRT andrequested further examination according to the risk levels by eachsupplier. Among the smelters that we identified, 80% have passed
the conformant smelters audits (RMI). In fiscal 2018, we started
investigating cobalt and mica according to the due diligence guidance
by OECD. We will continue to conduct investigations for tantalum,tin, tungsten, and gold (3TG) because the refinery certification statuscontinues changing for these minerals. If any sourcing of a mineral
involving a risk is identified, we will take appropriate actions byworking together with the supplier.
Conflict Minerals Policy
https://www.foster-electric.com/procurement/csr.html

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Quality and Safety Assurance

Global Quality Assurance Structure

The Foster Group is promoting and deploying quality assurance activities based on the FOSTERThe 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.

TQM (Total Quality Management).

Our Quality Assurance Policies and Actions
Under our customer-focused philosophy, the Foster Group considers the delivery of safe, ecofriendly 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 that our products are of high quality.
Safety, reliability, and management of environmentally hazardous substances are taken into accounton our products and components at all times during the processes (product/process design,purchase, and manufacturing) supported by our high-level technologies.
Increasing the satisfaction, trust and reliance of customers, contributing to
the community and society and preserving/protecting the environment

Continuous Improvement

FOSTER TQM(Total Quality Management)

SystemCreation

Quality and Environmental Policy
TQM Regulations/Quality Management
ManualQuality system rules and/or regulations
Response to legal requirements

Product creation
Quality creation
Quality to be accomplishedby the across-the-board Human
Technology
eﬀorts of
Resource
Creation
the employees
Development
Product development technology
Environment and safety related
technologies
Production technology

Human resource development inquality management

Basic Quality Policy Our Quality Assurance Activity System (Main Process) and Mechanism

Quality Assurance Activities based on APQP (Advanced Product Quality Planning)
Process

Market needs, customer expectations and requirements
Contract check
Product feasibility review (DR-0)
Design, prototype production
Design/prototype validation and review (DV, DR1/2)
Mass-production of prototype, validation, and evaluation

Quality certiﬁcation
Mass-production, product inspection, shipment
Customers, marketsNote) DR-0: Product feasibility review, DV: Product design validation,
DR1/2: Product design review

TQM and QMS* at FOSTER
We develop QMS by seeking “Zero Defect”

Our QMS is based on the development of quality assurZero Defectance and management activities under its customer-focused philosophy.
In 1975, we formulated the Total Quality Control (TQC)
Regulations, which was upgraded to Total Quality Management (TQM) Regulations in May 2006.
Since 1998, all the Group companies have successfully acquired the QS9000 certification (including ISO 9001: 1994).
In 2004, all the Group companies successfully acquired the ISO/TS 16949 certification.
In 2017, we switched to ISO 9001: 2015 and IATF 16949: 2016 standards company-wide andhave continued to comply with them.

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

Enhancing Quality Awareness and Developing
Human Resources in Quality Management
We drive training in a company-wide manner for developing quality specialists in each job class. We
have also made November the Quality Month and hold a variety of events by involving overseas sites
to improve quality awareness.
Quality-related events held by involving overseas sites• Quality improvement case exhibition
We hold this exhibition online by collecting cases of quality-related improvement and know-how we should sharefrom headquarters and all overseas sites, and summarizingthem in documents and videos.
• Quality lecture presentation
We have an activity of inviting a speaker from another company, selecting a quality-related theme
which can be told as an attractive story, sharing our cases and problematic points with the speaker, and then enhancing employees' quality awareness through a comparison and discussion ofcontents and frameworks of activities.
• Global QC Circle Convention
More than 100 circle teams are conducting activities at overseas sites under the theme of quality
improvement. Among them, teams that won the QC Circle Convention at each factory give presentations of their achievements at the company-wide convention.
Developing quality specialists
We plan training on quality-related standard requirements and tools, which not only provides knowledge but also includes cases and key points for practical operations, thus driving the development ofquality specialists with levels of skills that can be applied for practical operations and on site.

Holding the Global Quality Meeting (GQM)
At this meeting, senior management from headquarters and overseas factories and sales companies
share priority measures and issues faced by each division and site and determine commitments forthe next fiscal year, thus unifying the overall company's direction and awareness regarding quality.

* QMS: Quality Management System

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Customer Satisfaction
Foster Group Sales Department

Fostex Company

Policies

Policies

The Foster Group Sales Department mainly sells speakers and headphones for cars and audio
devices.
To realize our vision “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. One thing we must do to achieve this mission is to “create a customer”, as a wise person
once said. (Needless to say, the creation of a customer can be achieved by continuously satisfying
someone’s needs.) Based on this idea, we believe that customer satisfaction is the principle of all
our activities.

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

Structure
We have sales offices in Japan (headquarters), the U.S., Europe, and other Asian countries/regions.
This tetrapolar structure is the base of the framework that enables our flexible responses not only
based on the local time and 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, anddeliver 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 tetrapolar structure 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 thatmeet changing needs and deliver greater satisfaction to customers around the world.

Structure
We always listen to our customers’ comments and seek what they need so that we offer productsthat 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 to develop products specific to each region.

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. As part of our educational activities for audio equipment, we offer lectures on working principles of speakers and speaker craft classes at universities or vocational schools.

Future Plan
We will continue to supply products of our trusted original brand, FOSTEX, to introduce our hightechnical competences and the high competitiveness of our products. In fiscal 2021, we will continue to develop products that can deliver greater listening pleasure to our customers through sound,
focusing on the expansion of high-end full-range speakers, a strength of Fostex, and its peripheraldevices such as power amplifiers.

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Initiatives to Improve Employee Wellbeing

Human Rights Protection

Compliance with Labor-related Laws
We comply with the labor-related laws and endeavor to maintain a comfortable and healthy workplaceenvironment.
In order to ensure that the working conditions stay within the limit set forth in the "Labor Standards Act" andthe related laws and regulations of each country, 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.

Policies

Activity Promotion Structure

In 2003, we established the “Foster Group Corporate Action Guidelines” 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 for human rights. An outline is provided below.

We have established the Sustainability 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 and reporting and provide advice to various stakeholders.

We are engaged in initiatives to improve diverse aspects of employee wellbeing, including as this relates
to diversity, labor affairs, human resource development, and health and safety, so that every employee canwork with enthusiasm in good physical and mental health balancing work and their personal lives using
diverse workstyles.

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 forcedlabor and child labor.
Respect for Human Rights and Anti-discrimination
We do not engage in irrational discrimination based on birthplace, nationality, race, origin, creed, religion,
gender, age, disability of various kinds, hobby, academic background, skin color, sexual preference, gender
identity disorder, pregnancy, political belief, participation to associations, marital status, hometown, etc.
We do not conduct any actions that might lead to human rights violations such as violence, ridicule, defamation, slander, forcible working by threat, bondage (including by liabilities), human trafficking, 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 otherpersons from engaging in such acts.
Protection of Personal Information and Privacy
With respect to personal information and privacy, we only use the personal information for the work andcontrol it strictly. We control it strictly in compliance with related laws and regulations, 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 workplaceenvironment, understand the laws and orders concerning work-related safety and health and comply withthem. If any work-related disaster arises under any circumstance, Foster Group directors and staff strive tocarry out the prescribed procedures such as the creation of an immediate report in order to minimize andprevent the recurrence of such accident in a reliable manner.

1. Diversity
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 create synergies with the realization of enjoyable personal lives for each employee, the creation of newvalue, and improvement in 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 (Headquarters)<Supporting Employees Raising Children and Providing Nursing Care>
To promote a working environment where employees who are raising young children or providing nursing
care can work at ease, we have improved our system to support the balance between work and child careor 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. We have also expanded the range of employees
eligible for sick/injured childcare leave from the those stipulated by law to all who are raising children who
are junior high school students or younger. In addition, we have signed a joint use agreement with company-led childcare centers, which offers preferred benefits such as the right to the early nursery applications.
<Promoting Women’s Active Participation>
By providing female employees with planned cultivation and supporting their career development, we areaiming to have female managers represent 30% of all managers by 2025.
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Foster Group ESG Management

Environment

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External Recognition

Data Table

1<Educational Activities on Diversity>
We have set up a special website on diversity on our internal intranet, where we provide information
to foster a better understanding of the fact that active participation of diverse human resources willlead to new value creation by the company. We also conduct awareness-raising activities for consciously eliminating unconscious prejudice and preconceptions (Unconscious Bias). In fiscal 2021,
more than 90% of employees received training (e-learning) to increase knowledge about unconscious biases.
<Our Activities for LGBT (Sexual Minority)>
Currently, the Human Resources and Sustainability departments are carrying out activities to deepen understanding of LGBT and increase the number of allies (those who show understanding andsupport for LGBT people). In fiscal 2021, more than 90% of employees received training on LGBT
issues (e-learning). The goal of the program was to change diversity into an organizational strengthand increase employee understanding of LGBT issues.
<Promoting Student Internships>
We have accepted student interns since 2012. In addition to the work programs for learning acoustic
technologies and sales activities, we provide a program for learning ESG, a program for experiencing
speaker assembly, a program for planning new products, and various other courses. We have received positive feedback from the participants, who said that they were able to experience the sounddevelopment of Foster. In fiscal 2021, we hired interns online because of COVID-19, and 93 people
participated in the internship program.
<Global Human Resource Employment>
The Foster Group employs a variety of human resources regardless of theirnationalities, and is actively promoting international communications in theGroup to cultivate human resources and enhance the functionalities.
* 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)”
by the Ministry of Economy, Trade and Industry. We will continue to create a working environmentthat makes the most of the employees’ diversity with various backgrounds.
■ Website of the Ministry of Economy, Trade and Industry:
New Diversity Management Selections 100 (2017) Companies (The following site is in Japanese)
https://www.meti.go.jp/policy/economy/jinzai/diversity/kigyo100sen/practice/pdf/H29_diversity_ichiran.pdf
Best Practices in Fiscal 2017 (The following site is in Japanese)
https://www.meti.go.jp/policy/economy/jinzai/diversity/kigyo100sen/practice/pdf/H29_diversity_bestpractice.pdf

Future Plan
• Female manager ratio (at headquarters): To increase the ratio to 30% by 2025.
• Ratio of overseas human resources (at headquarters): To increase the ratio to 30% by 2025.
• Employment rate of persons with disabilities (at headquarters): To keep the rate above the mandatory rate required by law.
• Displaced worker for nursing care (at headquarters): To maintain 0% for displaced worker due tonursing care and enhance the nursing care leave system.

2. Labor (Labor Practices and Decent Work)
Policies
We put a high value on creating an environment in which each employee can grow through workand display their capabilities in a rewarding work. To realize this, we believe it is important to create a“workfriendly” 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 and develop various institutions,aiming to create an environment where employees with various lifestyles and aspirations can work inthe style that suits their situation.

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

Main Activities (Headquarters)<Work-Style Reforms>
Since September 2016, we have established the systems and culture that satisfy a variety of work-style 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. As for the work-at-home program, we introduced
it at full scale without limiting the targets, and were selected as one of the “Top100 Telework Pioneers” by the Ministry of Internal Affairs and Communications
for its telework initiatives in 2018. In fiscal 2020, we took the opportunity of our 70th anniversary to
reduce scheduled working hours per day by 15 minutes, to 7 hours and 30 minutes. At the sametime, we enabled all employees to work using the flex time system without core time. We haveengaged in creating a work environment where employees can work flexibly to suit their lifestyles regardless of "time" or "place" by utilizing ICT. In fiscal 2021, we eliminated distance constraints to give
employees more freedom to choose their place of residence. We will continue to work on work-stylereform to become a company that can offer a more desirable work environment and fulfilling career.

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Data Table

1<Removal of Ban on Second Jobs>
On September 1, 2020, we removed the ban on second jobs. This reflects our belief that a wide
variety of experience gained outside the company will increase opportunities to demonstrate one’s
capabilities in new domains and achieve personal development, thus helping to increase the breadthand depth of career development of individuals. At present, more than ten employees have second
jobs.
<Enhancement of the Leave System and the Leave of Absence System>
In October 2020, we officially introduced an hourly paid leave system, which utilizes unused paid
leave, in addition to the volunteer leave system and systems that grant a leave of absence to employees desiring to pursue further education and those who desire to accompany their spouses onoverseas assignment. We have also increased the maximum number of days of such unused paid
leave from 20 to 22 and increased the purposes for which use of the hourly paid leave is permitted,
so that it can be used for nursing care of families as well.
<Health Enhancement>
Mental and physical health is essential for employees to feel job satisfaction and have a fulfilling
career. We position employees’ health as an important management issue and are taking 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 fiscal 2021, we held
online seminars about health problems specific to women and training (e-learning) for the acquisitionof basic knowledge about mental health issues. More than 80% of employees participated in theseseminars.
Our initiatives for improving employee health were evaluated and we received a “Certification of
Excellent Company in Health: Gold Accreditation” from the Tokyo Promotion Council for Healthy
Company Declaration in December 2018. (This certification was renewed on January 1, 2022.) In
addition, in March 2022, we received recognition for a certified “Health & Productivity Management
Outstanding Organization (Large Enterprise Category)” by the Ministry of Economy, Trade and Industry.

Future Plan
Target for fiscal 2022:• Total working hours (at headquarters): Average 153 hours or less per month• Rate of periodic health examinations taken (at headquarters): Maintain 100%, and achieve 80% forre-examination rate
• Rate of specific health guidance taken (at headquarters): 80%

3. Human Resources Development
Policies
Our human resource development is based on “continuous performance by linking various personnel systems with individual development goals determined by mid/long term business strategy andindividual personality (strength/ weakness)”. The ideal for human resource development is as follows:• Personnel who embody our corporate philosophies and corporate creed through their duties andwho have a “strong will” 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 take responsibility 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.

Certification
Number: 10-(3)認定 協会第10号(3)

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Main Activities, Measures, and Development• To promote philosophy-focused management (Way Management), enhance the power of humanresources and organization, 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.
• As part of our long-term strategies of developing managerial personnel with a view to becoming acentennial company in 2049, we implement the Global Leadership Development Program (GLDP)
to foster reform-minded human resources for the next and future generations globally. GLDP isa program where we select three different talent categories based on the job and experiencelevels—Next Leaders, Future Leaders and Rising Suns—and implement the most suitable talentdevelopment according to each category.
• We make use of new employee training, training for newly promoted employees, manager training,
lectures by senior management, and other opportunities to improve inter-cultural communication
skills, promote diversity, and foster and enhance the global mind of our employees. We have also
introduced the Global-eye Program, a 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 make the transition to a more flexible personnel system with a wider range of
selections according to each employee’s career plan, life stage, and work-life balance. At the sametime, 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 exchange by the Overseas Trainee Program and the international
employee reassignment within Group companies, etc. to develop human resources globally.

Future Plan
• Formulating the Personnel Grand Design by viewing recruitment, development, utilization, assessment, and treatment organically and in an integrated manner, and building a Personnel Frameworkthat enables every employee to demonstrate their capabilities with pride and job satisfaction• Promoting human resource development aimed at forming a solid foundation of human resources
to be the next-generation leaders of Foster• Realizing a portfolio of diverse human resources by eliminating every form of discrimination basedon age, gender, nationality, creed, or other attributes, based on the belief that a truly diverse andinclusive organization enables high productivity• Promoting true work-style reforms by offering diverse options to cater to the career-planning andwork style needs of each one employee• Establishing a corporate climate which enables all employees to feel pride as a professional and thepleasure of working for Foster and to positively impact on all the stakeholders

4. Safety and health
Policies
Foster Electric has established a rule to prioritize health and safety, and endeavors to create a safeand healthy working environment. Based on this rule, we are advancing redressing activities, which
are carried out mainly by the Health and Safety Committee that governs health and safety, and thehealth 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 and prevent 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 and administrative 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, andcontrolled.
5. Employee exposure to the hazards of physically demanding tasks is to be identified, evaluatedand 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 suitabledrinking 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 and Crisis Management Committee. By sharing information among
the health and safety management organizations at each site, the Group is working as one to create
an appropriate working environment.
CEO/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

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Main Activities

Bicycle Safety

Every year, we implement health and safety education, which is the basis of occupational activities.
Further we tackle “group-wide issues” based around the Risk and Crisis Management Committee at
headquarters. As part of the activities based on the “Health and Safety Management Regulations”,
the health and safety management organization, which consists of representative workers and management, discusses site specific issues, legal inspection, risk assessment, and so on at each site toprevent accidents and eliminate risks.
With regard to the group-wide issues, we take initiatives to resolve occupational health and safetyissues for all employees based on the “Foster Group Corporate Action Guidelines” and the “Foster
Group Code of Conduct for Staff”. This year, the Health and Safety Committee took the lead to
implement prevention measures to cope with threats from COVID-19 as they did last year. The
headquarters continued to work on the plan based on the policy of the Health and Safety Committee, “Globally reduce risks and make provisions against the occurrence of crises”, as an initiative toaddress individual issues. This includes the distribution of a video instructing easy stretching exercises that can be done at home and provision of instructions on healthy diet in the form of e-learning,which are aimed at supporting health management by employees working remotely in the COVID-19
pandemic, as well as actions to reduce the use of VOCs from the product development stage andactivities to promote good health among all employees. These initiatives were evaluated and we received “Certification of Excellent Company in Health: Gold Accreditation” from the Tokyo Promotion
Council for Healthy Company Declaration in December 2018, which was later renewed on January
1, 2022.

Our employees' safe use of bicycles and our traffic accident prevention activities were evaluated by
the Japan Traffic Management Technology Association, and we were certified as a Model Company
for National Bicycle Safety in February 2017, with our activities being seen as making us a role model. The certification was again renewed this year in recognition of our continuing activities.

Measures to Tackle COVID-19

Future Plan

We took thorough measures to prevent the spread of COVID-19 infections, including basic measuresat our manufacturing sites (such as body temperature checks, wearing masks, hand washing, andsterilization), the promotion of vaccination, and testing. We will maintain a safe, secure production
system. At our development facilities, including headquarters, we will continue to effectively use
the work-from-home system, treat time taken off for vaccination as work hours, and prohibit conversation during meals. Thus, we will continue striving to reduce the risk of infections to keep ourdevelopment efforts unaffected.

Model Company for Bicycle Safety plaqueInitiatives at Overseas Sites
We improve health and safety related matters through the Management Systems.
The Bac Ninh Plant in Vietnam and the Panyu and Heyuan Plants in China obtained ISO 45001 certification in 2019. The plants have continued to renew their certification since then. In 2022, the Binh
Duong Plant in Vietnam also obtained this certification.
We will examine our global BCP structure by assuming disasters affecting our overseas plants,
enhancing the management of our fire protection framework, and pushing forward with the development of systems for responding flexibly to a range of risks such as COVID-19, and the Health and
Safety Committee will continue to promote information sharing.

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Social Contribution
Policies
With our mission “Through acoustic products or its solutions, a total commitment to help create acomfortable life and pleasure of communication around the world. A truly global enterprise our futuresociety counts on.”, the Foster Group will seek to earn greater trust from the community throughbusiness activities in which we evolve together with local residents.

Code of Conduct

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 throughefforts such as cooperation with the Akishima Location Service to engage in activities for revitalizing
the local area. In the field of welfare, we have continued to make donations to the Social Welfare
Council.
In May 2020, we donated nonwoven fabric masks and received a certificate of gratitude for thisactivity.

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

Main Activities 《Headquarters》<Communicating with the Local Community>
Since April, 2014, we have had the naming rights contract with Akishima City regarding Akishima
Community Hall, which is known locally as KOTORI Hall by the citizens of Akishima City. We willcontinue to pursue activities to win the affection of the local community.
In addition, in Ukraine, battles have intensified in various areas resulting in civilian casualties anddamage to infrastructure. Many citizens of the country have been forced to evacuate to surrounding
countries. To provide support for people in this situation, we worked to raise funds internally anddonate them to the Japan Red Cross Society's relief fund for people affected by the humanitariancrisis in Ukraine.

We continued to participate in Akishima City’s Environmentally Friendly Business Operator Network,
which carries out environmental activities with businesses in the city, as a lead member. However, various annual events hosted by this organization were again cancelled this year due to the
COVID-19 pandemic.

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Main Activities 《Overseas sites》

Vietnam

Foster Group’s overseas sites provide active support for regional volunteering and donation activities, activities to support victims andthose who are economically disadvantaged, and other initiatives each year.

January 2022: We made donations for local people facing financial difficulties from Cam Le district and Hòa Vang district of Da
Nang.

China
June 2021: Our employees made a donation on Poverty Eradication Day in Guangdong Province.

March 2022: We sent sympathy money to employees sufferingfrom diseases and former employees' bereaved families facing
financial difficulties.

Korea
July 2021: Our employee volunteers participated in a blood donation program implemented at the Cultural Center in Panyu District, Guangzhou City.

September 2021 and January 2022: Charity funds for neighbors
raised by officers and employees of ESTec Corporation, a Group
company in South Korea, were donated to those in need of support in Yangsan City through the inhabitant life support office ofthe city government.

United States

August 2021: Our employee volunteers participated in a blood
donation program implemented at the Central Blood Donation
Station in Heyuan City.

December 2021: Every year, we raise funds and donate them to
Make-A-Wish Michigan, which engages in activities to make the
dreams of children fighting critical illnesses come true.
April 2021: We raised funds to donate to the Gyeongnam branchof the Republic of Korea National Red Cross, in support of the fundfor sharing hope to strengthen the safety nets of local communities.

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GovernanceCorporate Governanceincluding independent officers (currently a total of five members, with attendance of the standing statutory auditor). Chairperson and vice chairperson are selected from independent directors for both of these committees.
General Meeting of Shareholders

Policies
Board of Directors

Management Monitoring

Representative Directors

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 the execution 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 areheld to report and discuss matters 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 for the management of the domestic Group companies;
the Global Budget Meeting is held by the top executives of the overseas Group companies to discuss theirbudgets; 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 the direction in which theentire Foster Group is heading, and reinforce collaborative efforts within the Group.
Nominating 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 and appointing people to managerial positions, and in determining the details of their remuneration, etc. The Nominating Committee consists of representative directors, managing directors, directors,
standing statutory auditor, and statutory auditors, including independent officers (currently a total of six members). The Remuneration Committee consists of representative directors, managing directors, and directors,(Internal Control)

Management Meeting

Board ofManaging Directors

Division Head Meeting

Corporate Governance Structure
Board of Directors
The Board of Directors meetings are held regularly on a monthly basis, in principle, and whenever necessary to
discuss and decide important agenda items and the execution of important business concerning the Group’s
management policies and strategies. It also supervises the management from an independent and objective
standpoint.

Accounting Auditor

Statutory Auditors / Board of Statutory Auditors

Internal Audit
Department
Corporate Staff
Departments

Business Divisions
Domestic Group
Company Meeting
Global Budget
Meeting, etc.

Sustainability Committee
Compliance Committee
Risk and Crisis Management Committee
Environment Committee

Hotline

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

Personal Information Management
Committee, etc.

Corporate Governance Guidelines
The Foster Group has established Corporate Governance Guidelines that express our basic way of
thinking and framework with regard to corporate governance. (The following site is in Japanese)
https://www.foster.co.jp/csr/governance/pdf/corporate_governance_guidelines.pdf

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

Foster Group Corporate Action Guidelines
The Foster Group has established Corporate Action Guidelines that express our actions with public decency in compliance with laws and regulations inside and outside 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

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Compliance

Compliance Committee

Policies
The Foster Group emphasizes compliance (with laws, regulations and corporate ethics) as a core elementof 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 under operation through the “Compliance Hotline” and “Harassment Helpline” that connects whistleblowers to external corporate lawyers available for 24 hours by email. Internally, the highly
independent internal audit office and HR representative act as a window to early detect violations ofcompliance. The whistleblowing hotline is extensively available to employees and officers of the entire
Group as well as to their families and the employees of business associates. We also hold briefings on the
Compliance Hotline and Harassment Helpline for employees, to ensure that they are fully informed of theinternal whistleblowing system.
For the protection of whistleblowers, the internal reporting regulations are established and disseminated toensure that they are treated fairly or not involved in any trouble as a result of the their actions.

Organization of the Compliance Committee(The same applies to the Risk and Crisis Management Committee)

The Foster Group’s compliance programs are led by the Compliance Committee with the president as achief executive.
In fiscal 2021, we conducted a compliance test and a questionnaire on overall compliance matters, including the “Foster Group Code of Conduct for Staff”. We also gave all employees online compliance training
related to contracts, the Subcontract Act, secret management, and export management and took othermeasures in our efforts to raise their awareness of compliance.

Future Plan
The Foster Group will continue to promote activities such as the enrichment of internal trainings 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 compliancestructure.

Risk Management
Policies
The Foster Group is focused on predicting risks and taking preventive measures so that such risks will notmaterialize. They also focus on minimizing damage to the Company should a risk develop and materialize,
resulting in the occurrence of danger. Specifically, we are working to make the risk control matrix (RCM)
framework more sophisticated and to reinforce our structure for managing and sharing information underthe basic operating policy of "being prepared for forward-looking risk and crisis management."

Chief Executive

Risk Management Structure

Chairperson
Vice Chairperson
Consultation Contacts / Hotline

Secretariat

Committee members from the headquarters / Committee members from Group companies

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 thechairman to identify risks using a checklist, analyze such risks and promote preventive measures on aGroup-wide basis.
In the event of any incidents or accidents, we will set up a task force, mainly consisting of the Risk andCrisis Management Committee members, and take prompt measures to minimize damage, ensuring restoration of the original state as early as possible and preventing any recurrences.

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Risk and Crisis Management Committee

Activity Promotion Structure

The Committee identifies and evaluates risks based on the result of risk reexamination conducted by respective department each year. From among those risks, the Committee selects important risk items thatit needs to control. Specific measures which have been taken to address such risk items are monitored
through regular meetings of the Committee, which are held every three months. The risk evaluation result
is also referenced during the business policy planning. The Committee reports the status of its operation,risks faced by the Group, and measures that have been taken to tackle those risks to the Board of Directors as appropriate. The Board of Directors fulfills its function of supervising risk management, such as bygiving advice and instructions based on specialized knowledge of outside officers. Our important risk items
that were reviewed in fiscal 2021 included suppliers' business continuity management, increase in ocean
freight cost, BCP structure building, and information security management system.
The Risk and Crisis Management Committee held weekly meetings, separately from its regular meetings,
because the future of the economy remained uncertain due to factors including the spread of the highly
infectious COVID-19 variant, lockdowns in Vietnam and China, and the rising tensions in Ukraine. At the
weekly meetings of the Committee, departments and sites collected and shared customer information,
supplier information, and other information, identified top risks from among various materialized risks, andclarified the responsible department and action policy for each of such risks, thus handling them in an
appropriate, timely, flexible manner.

The Foster Group promotes business continuity through the function recovery activities undertaken byeach function department of headquarters and through collaboration with the task forces at each sitein 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
CEO/President

Executive Chairperson

Vice Executive Chairperson

Secretariat

Committee members
from the Production
Division

Committee members fromthe Global Corporate
Support Division

Committee members fromthe Corporate Planning
Department

Committee members
from the Quality
Assurance Division

Committee members
from the Internal Audit
Department

Committee members
from the Sales Division

Committee members fromthe R&D Department

Committee members fromthe Engineering Division

Committee members fromthe Fostex Company

Committee members fromGroup companies

Future Plan
In addition to monitoring important risk items at its regular meetings, the Risk and Crisis Management
Committee will continue to meet every week and update the top risks as needed, thus reinforcing thestructure for immediate response amid the growing uncertainty. In addition, in operating this Committee,
we will conduct forward-looking risk communication, improve risk analysis capability, create more sophisticated frameworks for optimizing RCM, identifying residual risks, and others, and take other measures tostrengthen the risk management system.

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 to minimize the damage to the Company and avoid inconvenience to customers should a risk
occur or be embodied, with the highest priority given to preventing the recurrence of risks/crises.

Main Activities and Measures
Operation of the Emergency-Contact Network(Safety Confirmation System)
To keep the headquarters functional in the event of an earthquake, disaster, or other emergency, the Foster Group has introduced a safety confirmation system using mobile phones thatallow headquarters to issue an emergency notice to confirm thesafety of its employees and their families and ensure prompt initial response.
Disaster-Prevention Activities
Our daily disaster prevention activities and regional disaster prevention activities were recognized, and we received a letter ofgratitude from the Akishima Fire Department. In future, we willcontinue to work to be a company that is needed in the community. In October, we gave initial response training to the headquarters' task force by assuming the Tokyo Inland Earthquake inJapan. We will make improvements based on problems foundthrough this training, as part of our efforts to enhance our business continuity plan.

A letter of gratitude for our fire prevention andlife safety measures

Certificate of gratitude for regional safety anddisaster prevention

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Corporate Philosophy

Top Message

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table

1

Enhancing Measures to Tackle COVID-19
At overseas manufacturing sites, we continue to take basic measures -- that is, body temperature checks,
hand washing, sterilization, and use of masks -- and drive vaccination and testing to control the spread of
infection thoroughly. We will maintain a safe, secure production system.

Our Stance on Tax Matters
Basic Stance
The Foster Group works to maintain and improve tax compliance and perform proper filing and paymentof taxes in accordance with the local tax-related laws and international rules based on its business andsustainable development strategies.

Governance
The Foster Group has established the global tax department within the Finance and Accounting Department of the Global Corporate Support Division at headquarters, so as to manage and monitor tax risks.
Critical issues are reported to the top management including Board of Directors for their directions.

Dealings Between Affiliated Companies
Our measures to tackle COVID-19 (Myanmar and Vietnam)

Disaster Drills at Overseas Sites
The Foster Group appoints a person in charge of BCP for each overseas site, and implements disaster
drills on a regular basis to improve our employees' awareness of disaster prevention.

The Foster Group determines prices for dealings between its affiliated companies based on the principles
of pricing between independent companies.

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

Transparency

Evacuation drill and firefighting drill (China)

A training session on fire prevention
equipment (Myanmar)

Future Plan
In addition to drawing up and executing a business continuity plan (BCP) to tackle the threat of COVID-19,
which has yet to show a sign of abating, we will aim to build a BCP system that will allow us to respondflexibly even to such an international emergency. We will aim to be a company which is trusted and seen
as reliable by our stakeholders.

The Foster Group prepares and discloses its financial statements in compliance with the Financial Instruments and Exchange Act and related laws. It also discloses tax information in the financial statements
based on the related laws and regulations.
The Group also understands OECD's initiatives related to the BEPS (Base Erosion and Profit Shifting)
1.0 to address the aggressive tax planning and responds appropriately to documentation obligation andsuchlike.
It also watches for and will respond appropriately to moves to revise the taxation system based on BEPS
2.0, which requires countries to introduce new taxation rules such as the minimum tax rate system.

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Top Message

Corporate Philosophy

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table

1

Information Security and Personal Information Protection

Main Activities and Measures

Policies

The 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 and other accidents involving information assets.

We recognize the importance of securing the trust of our customers, suppliers, shareholders, employees
and other stakeholders based on our corporate creed of “Sincerity." We also understand that appropriate
management of information assets is an important part of the management agenda.
To appropriately protect and handle the information assets possessed by the 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

Mid-term Plan
• Penetration of the infrastructure for information protection and management on a global basis.
• Conduct of risk analyses and plan of concrete preventive measures based on the Business Continuity
Plans (BCPs).
• Assurance of the awareness of the information security policies and respective regulations■ Information Security Policies:
https://www.foster-electric.com/security/index.html

Activity Promotion Structure

Information Security Committee
Chief Executive

Chairperson

Task force

Committee
memberCommittee
memberCommittee
memberCommittee
memberVice Chairperson

Secretariat

Information Security Auditor

For protection and appropriate management of all information assets possessed by the Group, it hasestablished the Information Security Committee, which mainly consists of management, to maintain thesystem for understanding the management status of information security and prompt implementation ofrequired security measures according to the risk analysis results.

Chief of Secretariat

Secretariat at
the headquarters

Secretariat at eachGroup company

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Corporate Philosophy

Top Message

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table

1

External Recognition

EcoVadisFebruary 2019: We received a Silver ranking (=top 30%, we ranked top 10%) from EcoVadis, France for the CSR assessment to evaluate suppliers based on the following categories: “Environmental”, “Labor & Human Rights”, “Ethics”, and“Sustainable Procurement”.

[Japan]
New Diversity Management Selection 100 (fiscal 2017)
March 2018: Recognized for our activities to promote diversity and achieve work-life balance, we wereselected as one of the winners of the New Diversity Management Selection 100 (fiscal 2017) by the
Ministry of Economy, Trade and Industry.
Top 100 Telework Pioneers (fiscal 2018)
November 2018: To realize a flexible workstyle using ICT that fits individuals’ lifestyles and is free fromrestrictions such as time and place, we have introduced the work-at-home program and implemented initiatives to establish the environment. Evaluated for such activities, we were selected as one of the winnersof the Top 100 Telework Pioneers (fiscal 2018) by the Ministry of Internal Affairs and Communications.
“Kurumin” Certification (obtained in 2021)
January 2021: We have been working to enhance programs for helping employees balance work andfamily life. These efforts are aimed at creating an environment where employees with small children canwork with peace of mind, in accordance with the Act on Advancement of Measures to Support Raising
Next-Generation Children. Because of these initiatives, we were granted the “Kurumin” Certification by
the Minister of Health, Labour and Welfare in January 2021, recognized as a company supporting childcare. We received this certification for the second time following 2014.
2022 Health & Productivity Management Outstanding Organization (Large Enterprise Category)March 2022: Recognized for our initiatives that consider employee’s health from the management perspective and practice it strategically, we were certified as one of the winnersof the 2022 Health & Productivity Management Outstanding Organizations (Large Enterprise Category) by the Ministry of Economy, Trade and Industry and Japan Health Council.
We were certified for the third time following 2020 and 2021. (Certified as White 500 in 2019)
Certification of Excellent Company in Health: Gold Accreditation
January 2022: Highly evaluated for our active initiatives to realize health and productivity management,
we received the Certification of Excellent Company in Health: Gold Accreditation from the Tokyo Promotion Council for Healthy Company Declaration in December 2018. The certification was renewedagain in 2022, following 2021.
Selected as a constituent of S&P/JPX Carbon Efficient Index
We have been selected as a constituent of the S&P/JPX Carbon Efficient Index (evaluated based on
the disclosure status and results of CO2 emissions data), an ESG index which was adopted by theGovernment Pension Investment Fund (GPIF) in 2018.
Selected as a constituent of SOMPO Sustainability Index (fiscal 2021)
March 2022: We have been selected as a constituent of the SOMPO Sustainability Index, which is operated by Sompo Asset Management Co., Ltd., for the sixth consecutive year. The index places weighton the ESG evaluation by rating firms.

[Overseas sites]
GlobalSelected as a constituent of FTSE Blossom Japan Index
June 2021: In recognition of our excellent environmental, social and governance (ESG) practices, wewere selected for the first time as a constituent of FTSE Blossom Japan Index, an ESG investment
index created by FTSE Russell, which is a global index provider. This index provides a performancebenchmark and tool for the creation of index-tracking investments, financial instruments or fund products focused on sustainable investment.
Details of the FTSE Blossom Japan Index are available here.
CDP
December 2021: We received “B-: Management Level” both for Climate Change and Water Security
category for the 2021 survey by CDP, a British non-profit organization that evaluates and discloses
information on organization’s environmental management. (CDP applies an eight-point scale consistingof A, A-, B, B-, C, C-, D, and D-.)

Vietnam
FOSTER ELECTRIC (VIETNAM) CO., LTD.

Awarded by the Social Insurance Agency of Binh Duong Province for having spread and operating
excellent insurance systems
June 2021: We were recognized with an award by the Social Insurance Agency of Binh Duong Province for having promoted and operated an excellent insurance systems related to social insurance,
health insurance, employment insurance, and others.

FOSTER ELECTRIC (BAC NINH) CO., LTD.

Granted a distinguished service award by the People's Committee of Bac Ninh Province
July 2021: We were granted a distinguished service award by the People's Committee of Bac Ninh
Province for our contribution to the national budget.
Awarded by Bac Ninh Trade Union in gratitude for our “efforts on the treatment of
employees”
January 2022: We were awarded by Bac Ninh Trade Union in recognition of our treatment of employees.

FOSTER ELECTRIC (DANANG) CO., LTD.

認定 協会第10号(3)
Certification
Number: 10-(3)Awarded for proactive labor movements and strong labor union by the Trade Union
Federation of Da Nang Industrial Zone
February 2022: We were awarded by the Trade Union Federation of Da Nang Industrial Zone in recognition of our proactive labor movements and activities for building a strong labor union.

FOSTER ELECTRIC (QUANG NGAI) CO., LTD.

Granted a distinguished service award by the board of management of Quang Ngai
Industrial ParkMay 2021: We were granted a distinguished service award by the board of management of Quang
Ngai Industrial Park in recognition of our contribution to the Dung Quat Economic Zone.
Awarded for employees' labor movements by the Labor Confederation of Quang Ngai
Province
December 2021: We were recognized with an award by the Labor Confederation of Quang Ngai
Province for our employees' excellent labor movements and activities to build a strong labor union.

[Surveys from External Organizations]
The Foster Group responds sincerely to the CSR and ESG surveys received from external investigatory bodies.
In fiscal 2021, we responded to a total of nine surveys, including those on SDGs, CSR, ESG, and SRI. Notably, as aresult of the “Toyo Keizai CSR Ranking,” which ranks trusted companies in Japan in terms of both sustainability initiatives
based on corporate social responsibility (CSR) and the financial aspect, we were ranked 276th (out of 1,631 companies
in total). We will continue to respond to survey requests from external investigatory bodies with sincerity.

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Top Message

Corporate Philosophy

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table

1

Data Table
Economic Data
201-2 Financial implications and other risks and opportunities due to climate change

202-2 Proportion of senior management hired from the local community

Costs for measures taken to manage risks and opportunities - total environmental protection expenditures and investments by category

Percentage (%)
of seniormanagement*1
hired from the local
community*2

Environmental preservation cost (classified by business operations)
Location

Category

Key activity andthe outcome(1) Business area cost(1)-1 Pollution prevention costs

Breakdown

Japan

FOSTER
ELECTRIC
CO., LTD.
(Headquarters)(1)-2 Global environmental
conservation costs

Investment
Cost(Unit: one (Unit: one
thousand thousand
yen)
yen)
0

28,599Air and water controlrelated prevention
countermeasures

0

6,971

Prevention of global
warming and energysaving measures

0

Waste disposal andrecyclingAsia

18,149

Green purchasing expenses

00(3) Administration costs

Environmental education, EMS
construction expenses etc.

012,486(4) R&D costs

Research and development etc.

01,597,994(2) Upstream/
downstream cost

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

Japan

3,479

0

(1)-3 Resource circulation costs

Location*3

76

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

100

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

72
90

North America

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

100

EuropeFOSTER ELECTRIC (EUROPE) GmbH and group companies

100*1 Senior management: Department managers or higher, excluding directors.
*2 Local community: The country and region to which each site above belong.
*3 Significant locations of operations: The headquarters and 9 main sites that are checked based on J-SOX internal control framework.

204-1 Proportion of spending on local suppliers
Category

0342

Location*100All procurement sites in China

Total

0

1,639,421

Tree planting etc.

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

ESTec CORPORATION and group companies(6) Environmental
damage handling costs(5) Social activity costs

100

Percentage*2 (%)

Local procurement rate of materials in China

90

All procurement sites in ASEAN Local procurement rate of materials in Vietnam and Myanmar

70* “Investment” refers to equipment investments for the purpose of environmental conservation. “Cost” refers to personnel and miscellaneous expenses/costs incurred for environmental conservation activities.

*1 Local / Significant locations of operation: The above-mentioned areas where Foster’s manufacturing sites reside.
*2 Indicates the percentage in transaction amount for material procurement with corporations in above sites.

202-1 Ratios of standard entry level wage by gender compared to local minimum wage

205-1 Operations assessed for risks related to corruption

Location*1
Japan

Asia

Percentage (%)
The same ratio formale and female

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

108

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

113

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

N/A

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

119

ESTec CORPORATION and group companies

118

North America

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

114

EuropeFOSTER ELECTRIC (EUROPE) GmbH and group companies

116

Location
Domestic and overseas
companies

Total number ofoperations

Domestic and overseas locations of operations

Percentage (%)
13

72

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

205-2 Communication and training about anticorruption policies and procedures

Location

Total number and percentage of notifications
on anticorruption related organizations
policies and procedures.
Governance body members
Total*1 Significant locations of operations: The headquarters and 9 main sites that are checked based on J-SOX internal control framework.

Percentage (%)

Japan

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

27

100

Overseas

All overseas sites

88

84

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Corporate Philosophy

Top Message

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table

1

Environmental Data

302-3 Energy intensity / 302-4 Reduction of energy consumption / 305-1 Direct (Scope 1) GHG emissions
305-2 Energy indirect (Scope 2) GHG emissions / 305-4 GHG emissions intensity
305-5 Reduction of GHG emissions

301-2 Recycled input materials used
Location
Overseas

Percentage (%)

All procurement sites (China/Vietnam/Myanmar)

Category
7* Percentage of recycled materials among all the resin materials purchased.

302-1 Energy consumption within the organization

Location

Japan

Asia

Purchased
DieselKerosene Gasoline
Electricity
Fuel(liter)*(liter)(MWh)(liter)LPG(liter)NaturalGas(liter)

City
Gas
(m3)

Total Fuel
Consumption
in theOrganization(MWh)

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

2,594

6,532

38,049000 10,813

3,160

GUANGZHOU PANYUJIU SHUI KENG FOSTER
ELECTRIC FACTORY(*outsourcee)

27,870033,453

917

0

0

0

28,201FOSTER ELECTRIC CO.,(NANNING) LTD.

4,105

0

12,988

0

0

0

0

4,230

FOSTER ELECTRIC CO.,(HEYUAN) LTD.

16,966

039,3260056,2480

18,085

FOSTER ELECTRIC CO.,(TAIWAN) LTD.

12

0

1,101

5,879

0

0

0

22

FOSTER ELECTRIC(VIETNAM) CO., LTD.

8,896

0

8,092

3,880

13,291

0

0

9,202

FOSTER ELECTRIC(DA NANG) CO., LTD.

4,573

0

4,567

3,598

13,520

0

0

4,846

FOSTER ELECTRIC(QUANG NGAI) CO., LTD.

2,048

FOSTER ELECTRIC(BAC NINH) CO., LTD.

17,062

FOSTER ELECTRIC(THILAWA) CO., LTD.

6,909

0
0

4,254

75

29,951 11,010

3,929
57,46400

00(Unit: t-CO2)

1,953

1,501

1,214

1,152

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

71,24358,564

51,33348,354

Scope1+2 total(Unit: t-CO2)

73,19660,06552,54749,505

Sales (JPY)(100 million yen)

1,205

876

674

594

Per sales unit (JPY)(Unit: t-CO2 / 100 million yen)

60.7

68.6

78.0

83.3

Scope		 Japan:	FOSTER ELECTRIC CO., LTD. (Headquarters, Shizuoka Office, Osaka Office, Iga Logistics Center),
FOSTER BUSINESS SERVICE LTD., FOSTER ELECTRONICS LTD.
		 Overseas:
9 plants and 2 offices
CO2 conversion factor (Electric) Japan:	Ministry of the Environment, 2018 factor based on CO2 conversion factor of electric power supplier(2020)		 Overseas:
Fiscal 2018 factor based on IEA CO2 Emissions Factors 2020
CO2 conversion factor (Fuel)		 Japan/overseas:	Factor based on the “Greenhouse gas emissions calculation and report manual” released by the
Ministry of the Environment, Ministry of Economy, Trade and Industry.
Global warming potential		 Incorporated 100 year value of IPCC Fifth Assessment Report (AR5)
We have set a medium-term target of re-ducing 50% from a FY2018 base-year by 2030 based on the 1.5-degree target of Science Based Targets.
Net sales		 Amount of consolidated net sales excluding ESTec CORPORATION* The scope of sites, actual sales and per sales unit for FY2018 and thereafter were corrected reflecting revisions of targets and data.

Unit (t-CO2)

GHG (greenhouse gas)

FY2021

Carbon dioxide (CO2)49,505

Methane (CH4)0.023

Dinitrogen monoxide (N2O)

0.048

305-3 Other indirect (Scope 3) GHG emissions
Emissions (t-CO2)
Category

2,145

FY2020
1. Purchased products and services

18,276

2. Capital goods
3,024

4,595

2,878

0

0

0

7,014

North
America

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

735

0

1,236

0

57

95,4860

1,902EuropeFOSTER ELECTRIC(EUROPE) GmbH and groupcompanies

57

0

1,274

1,905

0

0

0

89

Total

FY2018 FY2019 FY2020 FY2021

Scope 1 (Direct greenhouse gas emission from business activities)

Upstreamcategories

91,826

9,556

178,885 30,142

88,261 151,734 10,813

6,764

6,460

16,64020,597

5. Waste generated from operation

2,189

1,251

9. Downstream transportation and distribution
Downstream
categories

3,914

3. Fuel- and energy-related activities (not included in Scope 1 or Scope 2)

6. Business trip

97,172

138,699371

4. Upstream transportation and distribution

7. Employee commute* Calorific Value (Fuel): Japan/Overseas: Factor based on the “Greenhouse gas emissions calculation and report manual” released by the Ministry of
the Environment, Ministry of Economy, Trade and Industry.
* The scope of sites was changed in FY2021.

FY2021

186,672

11. Use of sold products
12. Disposal of sold products
Total

352

321

3,562

3,066

2,237

2,809

155,887

160,565

9,095

2,843

383,769

340,525

Scope: Japan:	FOSTER ELECTRIC CO., LTD. (Headquarters, Shizuoka Office, Osaka Office, Iga Logistics Center), FOSTER BUSINESS SERVICE
LTD., FOSTER ELECTRONICS LTD.
Overseas: 9 factories and 2 offices* Results for FY2020 and thereafter were corrected reflecting the revision of the calculation method.

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Corporate Philosophy

Top Message

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table1

303-3 Water withdrawal / 303-4 Water discharge / 303-5 Water consumption /306-1 Water discharge by quality and destination
Location

Japan

Asia

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

306-2 Waste by type and disposal method
Waterdischarge(Unit: m3)

Water
withdrawal(Unit: m3)

Total water
consumption(Unit: m3)

8,828

8,387

441

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

431,981345,585

86,396

FOSTER ELECTRIC CO., (NANNING) LTD.

26,601

21,281

5,320

FOSTER ELECTRIC CO., (HEYUAN) LTD.

147,210

117,768

29,442

FOSTER ELECTRIC CO., (TAIWAN) LTD.

118

112

6

FOSTER ELECTRIC (VIETNAM) CO., LTD.

58,05046,44011,610

FOSTER ELECTRIC (DA NANG) CO., LTD.

46,212

36,970

9,242

FOSTER ELECTRIC (QUANG NGAI) CO., LTD.

37,73030,184

7,546

FOSTER ELECTRIC (BAC NINH) CO., LTD.

87,747

70,19817,549FOSTER ELECTRIC (THILAWA) CO., LTD.

108,245

86,596

21,649North America FOSTER ELECTRIC (U.S.A.), INC. (EL PASO OPERATIONS)

1,741

1,393

348

12

11

1

954,475

764,924

189,551

EuropeFOSTER ELECTRIC (EUROPE) GmbH and group companies
Total

Japan

Asia

North
America

Category

Waterdischarge(Unit: m3)

Total water
consumption(Unit: m3)

Surface water

-

-

-

Groundwater

-

-

-

Seawater---

Produced water

-

-

-

Third-party water
Total

954,475

764,924

189,551

954,475

764,924

189,551

Total waste

Asia

North
America

Landfill

0.65

0.00

0.65

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

61.50

0.00

61.50

FOSTER ELECTRIC CO., (NANNING) LTD.

8.58

0.00

8.58

FOSTER ELECTRIC CO., (HEYUAN) LTD.

50.61

0.00

50.61

FOSTER ELECTRIC (VIETNAM) CO., LTD.

15.83

4.67

11.16

FOSTER ELECTRIC (DA NANG) CO., LTD.

52.03

0.07

51.96

FOSTER ELECTRIC (QUANG NGAI) CO., LTD.

7.03

0.00

7.03

FOSTER ELECTRIC (BAC NINH) CO., LTD.

71.05

48.50

22.55

FOSTER ELECTRIC (THILAWA) CO., LTD.

6.01

0.00

6.01

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

0.00

0.00

0.00

273.2953.24

220.05Non-hazardous waste (Unit: ton)

LocationJapan

Recycling

FOSTER ELECTRIC CO., LTD. (Headquarters)

Total* The scope of sites was changed in FY2021.

Water
withdrawal(Unit: m3)

Hazardous waste (Unit: ton)

Location

Total waste

Recycling

Landfill

FOSTER ELECTRIC CO., LTD. (Headquarters)

40.08

35.29

4.79

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

626.00576.00

50.00
45.44

FOSTER ELECTRIC CO., (NANNING) LTD.

77.99

32.55

FOSTER ELECTRIC CO., (HEYUAN) LTD.

271.53221.8049.73

FOSTER ELECTRIC (VIETNAM) CO., LTD.

322.18214.46107.72

FOSTER ELECTRIC (DA NANG) CO., LTD.

120.96

77.67

43.29

FOSTER ELECTRIC (QUANG NGAI) CO., LTD.

64.14

13.77

50.37

FOSTER ELECTRIC (BAC NINH) CO., LTD.

1,161.30

756.10405.20

FOSTER ELECTRIC (THILAWA) CO., LTD.

184.2418.00

166.24

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

477.17273.71203.46

3,345.59

2,219.35

1,126.24

Total

308-1 New suppliers that were screened using environmental criteria
Percentage of new suppliers that were screened based on the environmental criteria

Location
Domestic andAll procurement sites (Japan/China/Vietnam/Myanmar)
overseas companies

Percentage (%)
100* We distribute our environmental regulations to all the suppliers, update them and obtain environment-related materials.

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Corporate Philosophy

Top Message

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table

1

Social Data
401-1 New employee hires and employee turnover401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees
New employee hires (person)
By gender

Location
Male

Japan

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

Overseas

Female

Under
30

Total

30 - 50

Over 50

Total

12

6

18

8

7

3

18

All overseas sites

2,037

5,757

7,794

5,172

2,571

51

7,794

Total

2,049

5,763

7,812

5,180

2,578

54

7,812

Employee turnover (person)
By gender

Location
Male

Japan

Overseas

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

Female

22

4

Total

26

30 - 50

3

18

5

26

1,945

7,484

9,429

5,134

4,151

144

9,429

1,967

7,488

9,455

5,137

4,169

149

9,455

Japan

By gender

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

2

Total

4

3

Under
30

30 - 50

Over 50

13

2

1

By gender
Male

Japan

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

Female42Life insurance, disability and illness compensation, medical insurance, parental leave,
retirement allowance, etc.

*1 Significant locations of operations: The headquarters and 9 main sites that are checked based on J-SOX internal control framework.

401-3 Parental leave
Total number of employees that were entitled to / took parental leave
Total number of employees thatwere entitled to parental leave*¹
Location(person)

Total
3

5

Total

Male

Female

Total

Japan

Overseas

All overseas sites

2,974

12,727

15,701

103

863

966

Total

3,419

12,877

16,296

109

872

981

445

150

595

6

9

15

*1 Total number of employees that were entitled to parental leave during the reporting period*2 Total number of employees that were entitled to and took parental leave during the reporting period

Total number of employees due
to and did return to work afterparental leave (person)

Location

Total

30 - 50

Over 50

5

0

Male

3

By age group
Under
30

FemaleTotal number of employees thattook parental leave*²(person)Domestic Companies: FOSTER
ELECTRIC CO., LTD. (Headquarters),
FOSTER BUSINESS SERVICE LTD.,
FOSTER ELECTRONICS LTD.

By age group

Employee turnover rate*2 (%)
Location

9 Significant locations of operations

Return to work rate / Retention rate

New employee hires rate*1 (%)

FemaleOverseas

Total

Total

Male

Retirement allowance

MaleOver 50

All overseas sites

LocationJapan

FOSTER ELECTRIC CO., LTD.
(Headquarters)

By age group
Under
30

Contents

Location*1

By age group

Total

Male

Female

Total

Japan

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

Overseas

All overseas sites

102

788

890

99

94

95

Total

107

789

896

99

94

95

Total

5

1

6

Total number of employees
retained 12 months after
returning to work following aperiod of parental leave in theprior reporting period (person)
Male
FemaleTotal

3*1 Rate of new employee hires in the reporting period to the number of employees in the first month of the same reporting period (fiscal year)*2 Rate of the number of employees who left the company for their own reasons during the reporting period to the number of employees in the firstmonth of the same reporting period (fiscal year)

FemaleReturn to work rate for
employees due to return to work
after taking parental leave (%)

Location

100

100

100

12 months retention rate of
employees returning fromparental leave(in the prior reporting period) (%)
Male

Female

Total

Japan

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

Overseas

All overseas sites

143

654

797

91

74

76

Total

146

657

803

91

74

76

3

3

6

100

75

86

Sustainability Report 2022「English version」

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Top Message

Corporate Philosophy

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table1

403-9 Work-related injuries

Location

Employee Categoryi. The number and rate of fatalities as a result of workrelated injury
Fatalities (person)
FY2019 FY2020 FY2021

Japan

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

Overseas All overseas sites

*1

0

0

0.79

0.00

0.00

b. For all workers who are not
employees but whose work
and/or workplace is controlled
by the organization

0

0

0

0.00

0.00

0.00

0.00

a. For all employees

46

28

43

1.02

0.74

1.48

b. For all workers who are not
employees but whose work
and/or workplace is controlled
by the organization

0

2

3

0.00

2.13

3.54

0

0.00

0.00

0.00

b. For all workers who are not
employees but whose work
and/or workplace is controlled
by the organization

0

0

0

0.00

0.00

0.00

a. For all employees

0

1

0

0.00

0.03

Japan

Total

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

b. For all workers who are not
employees but whose work
and/or workplace is controlled
by the organization

0

0

0

0.00

0.00

0.00

a. For all employees

0

1

0

0.00

0.03

0.00

a. For all employees

47

28

43

1.01

0.72

1.42

0.00

b. For all workers who are not
employees but whose work
and/or workplace is controlled
by the organization

0

2

3

0.00

1.93

3.21

Bone
fracture,
cutting,bruise,sprain,etc.

Bonefracture,
cutting,bruise,sprain,
etc.

0

0

0

0.00

0.00

Traffic
accident
which
occurredwhile
commuting

Employee Category

Overseas All overseas sites

Total

iv. The main types of work-related injury

ii. The number and rate of high-consequence workrelated injuries (excluding fatalities)
Injuries (person)

Location

Rate*3

FY2019 FY2020 FY2021 FY2019 FY2020 FY2021

Overseas All overseas sites

Rate*41

0

LocationJapan

Injuries (person)

FY2019 FY2020 FY2021 FY2019 FY2020 FY2021
a. For all employees

0iv. The main types of work-related injury

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

Employee Category

FY2019 FY2020 FY2021

a. For all employeesb. For all workers who are not
employees but whose work
and/or workplace is controlled
by the organization

Total

Location

Rate*2iii. The number and rate of recordable
work-related injuries

Japan

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

v. The number of hours worked (hour)

Employee Category

FY2019a. For all employeesb. For all workers who are not
employees but whose work
and/or workplace is controlled
by the organizationa. For all employees

0

1

0

0.00

0.82

0.00

b. For all workers who are not
employees but whose work
and/or workplace is controlled
by the organization

0

0

0

0.00

0.00

0.00

a. For all employees

1

0

0

0.02

0.00

0.00

b. For all workers who are not
employees but whose work
and/or workplace is controlled
by the organization

0

0

0

0.00

0.00

0.00

a. For all employees

a. For all employees

1

1

0

0.00

0.03

0.00

b. For all workers who are not
employees but whose work
and/or workplace is controlled
by the organizationb. For all workers who are not
employees but whose work
and/or workplace is controlled
by the organization

0

0

0

0.00

0.00

0.00

iv. The main types of work-related injury

Bonefracturea. For all employees
Overseas All overseas sites

Total

Cutting,bruise,sprain,burn,
etc.

b. For all workers who are not
employees but whose work
and/or workplace is controlled
by the organization

FY2020

FY2021

1,268,573

1,213,116

1,122,304

86,077

96,21789,32145,128,065

37,869,378

29,123,722

470,658

938,802846,306

46,396,637

39,082,494

30,246,026

556,734

1,035,019

935,627*1 Injuries caused during commuting began to be excluded in FY2021.
*2 Rate of fatalities as a result of work-related injury =Number of fatalities as a result of work-related injury × 1,000,000
Number of hours worked*3 The rate of high-consequence work-related injuries = Number of high-consequence work-related injuries (excluding fatalities) × 1,000,000(excluding fatalities)
Number of hours worked*4 Rate of recordable work-related injuries=

Number of recordable work-related injuries × 1,000,000
Number of hours worked

Sustainability Report 2022「English version」

38

Corporate Philosophy

Top Message

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table1

405-1 Diversity of governance bodies and employees
Governance bodies (by gender/age)

403-10 Work-related ill healtha. For all employees
i. The number of fatalities as aresult of work-related ill healthii. The number of cases ofrecordable work-related illhealthFY2019FY2020

FY2021FY2019FY2020

FY2021

0

0

0

0

0

0

Overseas All overseas sites

0

0

0

0

0

0

Total

0

0

0

0

0

0

LocationJapan

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

Location
Japan

LocationJapan

i. The number of fatalities as aresult of work-related ill healthii. The number of cases ofrecordable work-related illhealthFY2019FY2020

FY2021FY2019FY2020

FY2021

0

0

0

0

0

0

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

Overseas All overseas sites

0

0

0

0

0

0

Total

0

0

0

0

0

0

iii. The work-related hazards that pose a risk of ill health

Average hours of training (hour)Japan

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

Male
10

Female9

Total

Management

10

9

10

10

17

17

37

16

17

Total

16

17

17

31

16

17

404-3 Percentage of employees receiving regular performance and career development reviews

Japan

Over 50

15

0

3

97

Overseas All overseas sites

90

10

0

32

68

Total

88

12

0

24

76

Employee (by gender/age)
LocationJapan

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

Percentage (%)
Male

FemaleUnder 30

30 - 50

Over 50

75

25

9

48

43

Overseas All overseas sites

19

81

37

61

2

Total

21

79

36

60

4

405-2 Ratio of basic salary and remuneration of women to men
Ratio of the basic salary and remuneration of women to men
Percentage (%)*2
Location*1
Management General
100

100

Overseas 9 significant locations of operations

Japan

100

100

Total

100

100

Total

17

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

30 - 50

FOSTER ELECTRIC CO., LTD. (Headquarters)

Ratio of remuneration of women to men

GeneralOverseas All overseas sites

Location

Under 30

*1 Significant locations of operations: The headquarters and 9 main sites that are checked based on J-SOX internal control framework.
*2 Ratio of the amount paid to men when the amount paid to women is set at 100.

404-1 Average hours of training per year per employee
Location

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

Female85iii. The work-related hazards that pose a risk of ill healthb. For all workers who are not employees but whose work and/or
workplace is controlled by the organization

Percentage (%)
Male

Location*1
Japan

FOSTER ELECTRIC CO., LTD. (Headquarters)

Percentage (%)*2
Management

General107

116

Overseas 9 significant locations of operations

102

100

Total

103

103

*1 Significant locations of operations: The headquarters and 9 main sites that are checked based on J-SOX internal control framework.
*2 Ratio of the amount paid to men when the amount paid to women is set at 100.

Percentage (%)
Male
89

Female
76

Total
86

Management

General

98

83

Total
86

Overseas All overseas sites

67

48

58

95

51

52

Total

70

49

53

95

52

53

Sustainability Report 2022「English version」

39

Corporate Philosophy

Top Message

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table1

410-1 Security personnel trained in human rights policies or procedures
Security personnel
LocationJapan

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

Overseas

All overseas sites

Total personnel(person)Total

Trained personnel(person)

Percentage (%)

4

4

100

155

152

98

159

156

98

* The above includes employees from third party organizations.

412-2 Employee training on human rights policies or procedures
Employee training
Location

Total hours (hours)

Employeepercentage (%)

Japan

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

1,121

89

Overseas

All overseas sites

65,473

95

66,59495

Total

414-1 New suppliers that were screened using social criteria
Percentage of new suppliers that agreed to the sustainable procurement criteria
Location
DomesticandAll procurement sites
overseascompanies

Percentage (%)
100* Percentage of new suppliers that agreed to ideas based on the Foster Group Supplier Sustainability Code of Conduct418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data
Total number of substantiatedcomplaints received concerning
breaches of customer privacy
Location

DomesticandAll the domestic and overseas companies
overseascompanies

Complaints
received fromoutsideparties andsubstantiated by
the organization

Complaints from
regulatory bodies

00

Total number ofidentified leaks,
thefts, or losses ofcustomer data0

Sustainability Report 2022「English version」

40

Corporate Philosophy

Top Message

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table

1

GRI Content Index
GeneralDisclosures
Organizational
ProfileGRI Standard
No.
102-1

Name of the organization

102-2

Activities, brands, products, and services

P3-4-

Corporate profile and financial information
 Securities report (available in Japanese)

Location of headquarters

P3-4-

Corporate profile and financial information
 Securities report (available in Japanese)

102-4

Location of operations

P3-4-

Corporate profile and financial information
 Securities report (available in Japanese)

102-5

Ownership and legal form

P3-4-

Corporate profile and financial information
 Securities report (available in Japanese)

102-6

Markets served

P3-4-

Scale of the organization

102-7

102-27

P5-9

Foster Group ESG Management102-28

Evaluating the highest governance body’s
performanceP10-15
P16-26
P27-31-

Environment
SocialGovernance Securities report (available in Japanese)

Corporate profile and financial information
 Securities report (available in Japanese)

102-29Identifying and managing economic,
environmental, and social impacts

P5-9

Foster Group ESG Management

P3-4-

Corporate profile and financial information
 Securities report (available in Japanese)

102-30Effectiveness of risk management processes

P5-9

Foster Group ESG Management

P3-4-

Corporate profile and financial information
 Securities report (available in Japanese)

102-31

Review of economic, environmental, andsocial topics

P5-9

Foster Group ESG Management102-32Highest governance body’s role insustainability reporting

P5-9

Foster Group ESG Management102-33

Communicating critical concerns

P27-31Governance102-34Nature and total number of critical concerns-

Not applicable

102-35

Remuneration policies-

 Securities report (available in Japanese)

102-36

Process for determining remuneration-

 Securities report (available in Japanese)

102-37

Stakeholders’ involvement in remuneration-

 Securities report (available in Japanese)

102-38Annual total compensation ratio- Securities report (available in Japanese)

102-39Percentage increase in annual totalcompensation ratio- Securities report (available in Japanese)

102-40

List of stakeholder groups

P32

 General meeting of shareholders Financial result briefing
External Recognition

102-41

Collective bargaining agreements-

 Securities report (available in Japanese)

102-10Significant changes to the organization andits supply chain-

 Securities report (available in Japanese)

P10-15
P16-26
P27-31-

Environment
SocialGovernance Securities report (available in Japanese)

P9
P5-9
P13

United Nations Global Compact
Task Force on Climate-related Financial
Disclosures (TCFD) Recommendations
External Communications

102-13

Membership of associations

P9

United Nations Global Compact

102-14

Statement from senior decision-maker

P2

Top message

Key impacts, risks, and opportunities

P2-

Top message
 Securities report (available in Japanese)

102-16

Values, principles, standards, and norms of
behavior

P1-

Corporate Philosophy
 Corporate Action Guidelines Code of conduct for staff

102-17

Mechanisms for advice and concerns about
ethics

P27-31

102-18Governance structure
Delegating authority

 Corporate governance guidelines (available
in Japanese)Collective knowledge of highest governancebody Securities report (available in Japanese)

102-19Page Number / URL-

Role of highest governance body in setting
purpose, values, and strategy-

102-15Disclosure102-26

Supply chain

External initiatives

Governance

GRI Standard
No.

Conflicts of interest

102-9Precautionary principle or approach

GeneralDisclosures102-25

Information on employees and other workers

102-12GovernanceCorporate profile and financial information
 Securities report (available in Japanese)

102-8

102-11

Ethics andintegrity

Page Number / URL
P3-4
-

102-3

Strategy

Disclosure

Governance

Stakeholder
engagement

Reportingpractice

P5-9

Foster Group ESG Management102-42

Identifying and selecting stakeholders

P5-9
P27-31

Foster Group ESG Management
Governance102-43

Approach to stakeholder engagement

P5-9
P27-31

Foster Group ESG Management
Governance102-44

Key topics and concerns raised

P5-9

Foster Group ESG Management102-45

Entities included in the consolidated financial
statements

P3-4-

Corporate profile and financial information
 Securities report (available in Japanese)

102-46-

 Corporate governance guidelines (available
in Japanese)

Defining report content and topic Boundaries

P5-9

Foster Group ESG Management

P27-31-Governance Corporate governance guidelines (available
in Japanese)

102-47

List of material topics

P5-9

Foster Group ESG Management102-48

Restatements of information-

No restatement of information

102-49Changes in reporting-

No significant changes in reporting

P43

Provision of Information Regarding
Sustainability

P43

Provision of Information Regarding
Sustainability

P43

Provision of Information Regarding
Sustainability

102-20Executive-level responsibility for economic,
environmental, and social topics

P5-9

Foster Group ESG Management102-50

Reporting period

102-21

Consulting stakeholders on economic,
environmental, and social topics

P5-9

Foster Group ESG Management102-51

Date of most recent report102-22Composition of the highest governance bodyand its committees

102-52

Reporting cycle

102-53

Contact point for questions regarding thereportP43

102-23

Provision of Information Regarding
Sustainability

102-24102-54Claims of reporting in accordance with the
GRI Standards

P43

Provision of Information Regarding
Sustainability-

 Securities report (available in Japanese) Corporate governance guidelines (available
in Japanese)

Chair of the highest governance body- Securities report (available in Japanese)

Nominating and selecting the highest
governance body- Securities report (available in Japanese)

Sustainability Report 2022「English version」

41

Corporate Philosophy

Top Message

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table

1

GeneralDisclosures
Reporting
PracticeGRI StandardNo.

GRI Content Index

P40-42102-56External assurance-

GRI 201:
Economic
Performance

Foster Group ESG Management

103-2

The management approach and its
components

P5-9
P10-15
P16-26
P27-31

Foster Group ESG Management
Environmental
SocialGovernance

P5-9
P10-15
P16-26
P27-31

Foster Group ESG Management
Environmental
SocialGovernance

GRI StandardNo.

GRI 203: Indirect
Economic
Impacts

Disclosure

201-1
201-2

Financial implications and other risks andopportunities due to climate change

P33-39201-3

Defined benefit plan obligations and otherretirement plans- Securities report (available in Japanese)-

201-4-a, 201-4-b
ii. Subsidies
Total amount of employment adjustment
subsidy and other subsidies received at sites
in Japan, the United States, China and South
Korea: ¥351 million (Japan: ¥102 million, US:¥91 million, China: ¥149 million, South Korea:¥6 million)-

Data table

Ratios of standard entry level wage by
gender compared to local minimum wage

202-2

Proportion of senior management hired fromthe local community

P33-39

Data table203-1

Infrastructure investments and services
supported

P25-26Social Contribution

-

203-2

Significant indirect economic impacts

204-1

Proportion of spending on local suppliersP33-39

Data table

GRI 205:
Anti-corruption

205-1

Operations assessed for risks related tocorruption

P33-39

Data table205-2

Communication and training about anticorruption policies and proceduresP33-39205-3

Confirmed incidents of corruption andactions taken-

Not applicable

206-1

Legal actions for anti-competitive behavior,anti-trust, and monopoly practices-

Not applicable

GRI 206:
Anti-competitive
Behavior

GRI 302: Energy

GRI 303: Water
and EffluentsGRI 304:
Biodiversity

Data table

GRI 204:
Procurement
Practices

GRI 205:
Anti-corruption

GRI 301:
Materials

Not applicable

Data table

GRI 305:
EmissionsDisclosure

Page Number / URL

207-1

Approach to tax-

N/A (Confidentiality constraints)

207-2

Tax governance, control, and risk
management-

N/A (Confidentiality constraints)

207-3

Stakeholder engagement and managementof concerns related to tax-

N/A (Confidentiality constraints)

207-4

Country-by-country reporting-

N/A (Confidentiality constraints)

Disclosure

Page Number / URL

301-1

Materials used by weight or volume301-2

Recycled input materials used

301-3

Reclaimed products and their packaging
materials

302-1

Energy consumption within the organization

302-2

Energy consumption outside of theorganization

302-3

Energy intensity

P33-39

Data table

302-4

Reduction of energy consumption

P33-39

Data table

302-5

Reductions in energy requirements ofproducts and services

P14
P33-39Environmentally Friendly Products
Data table

303-1

Interactions with water as a shared resource

P13

Environmental Activities

303-2

Management of water discharge-related
impacts

P13

Environmental Activities

303-3

Water withdrawal

P33-39

Data table

303-4

Water discharge

P33-39

Data table

303-5

Water consumption

P33-39

Data table

304-1

Operational sites owned, leased, managed
in, or adjacent to, protected areas and areasof high biodiversity value outside protected
areas

-

Not applicable304-2

Significant impacts of activities, products,
and services on biodiversity-

N/A (Information unavailable)

304-3

Habitats protected or restored-

Not applicable

304-4

IUCN Red List species and national
conservation list species with habitats inareas affected by operations-

N/A (Information unavailable)

305-1

Direct greenhouse gas (GHG) emissions(Scope 1)

P33-39

Data table

305-2

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

P33-39

Data table

305-3

Other indirect (Scope 3) GHG emissions

P33-39

Data table305-4

GHG emissions intensity

P33-39

Data table

305-5

Reduction of GHG emissions

P33-39

Data table

305-6

Emissions of ozone-depleting substances
(ODS)

-

Not applicable

305-7

Nitrogen oxides (NOx), sulfur oxides (SOx),
and other significant air emissions-

Not applicable Securities report (available in Japanese)

202-1

P33-39GRI Standard
No.

Environmental GRI Standard
TopicsNo.

Page Number / URL

Direct economic value generated anddistributed

Financial assistance received fromgovernment

GRI 207: Tax

Page Number / URL
P5-9

Management approach

EconomyTopicsNot applicable

Explanation of the material topic and its
Boundary

201-4

GRI 202: Market
Presence

Disclosure

GRI content index

103-1

103-3

EconomyTopicsPage Number / URL

102-55

Management GRI Standard
ApproachNo.
GRI 103:
Management
Approach

Disclosure-

N/A (Information unavailable)

P33-39-

Data table
N/A (Information unavailable)

P33-39-

Data table
N/A (Information unavailable)

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42

Corporate Philosophy

Top Message

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table

1

Environmental GRI Standard
TopicsNo.
GRI 306:
Effluents andWaste

GRI 307:
Environmental
Compliance
GRI 308:
Supplier
Environmental
Assessment

Social Topics
GRI 401:
Management
Approach
Disclosures

GRI 402: Labor/
Management
Relations
GRI 403:
Occupational
Health and
SafetyGRI 405:
Diversityand Equal
Opportunity

Page Number / URL

306-1

Water discharge by quality and destination

P33-39

Data table

306-2

Waste by type and disposal method

P33-39

Data table

306-3

Significant spills-

Not applicable

306-4

Transport of hazardous waste-

Not applicable

306-5

Water bodies affected by water discharges
and/or runoff-

N/A (Information unavailable)

307-1

Non-compliance with environmental laws
and regulations-

Not applicable308-1

New suppliers that were screened using
environmental criteria

P33-39308-2

Negative environmental impacts in the
supply chain and actions taken-

Data table
No “negative environmental impacts in the
supply chain and actions taken”, according to
the SAQ result containing these questions.

Social Topics

Page Number / URL-

Not applicable

407-1

Operations and suppliers in which the rightto freedom of association and collective
bargaining may be at risk-

No “Operations and suppliers in which theright to freedom of association and collective
bargaining may be at risk”, according to the
SAQ result containing these questions.

408-1

Operations and suppliers at significant risk
for incidents of child labor-

No “Operations and suppliers at significant
risk for incidents of child labor”, according to
the SAQ result containing these ques-tions.

409-1

Operations and suppliers at significant risk
for incidents of forced or compulsory labor-

No “Operations and suppliers at significant
risk for incidents of forced or compulsory
labor”, according to the SAQ result containing these questions.

GRI 410:
Security

410-1

Security personnel trained in human rights
policies or proceduresP33-39

GRI 411: Rights
of Indigenous
Peoples411-1

Incidents of violations involving rights ofindigenous peoples-

Not applicable

GRI 412:
Human Rights
Assessment

412-1

Operations that have been subject to human rights reviews or impact assessments-

N/A (Information unavailable)

412-2

Employee training on human rights policies
or proceduresP33-39412-3

Significant investment agreements and contracts that include human rights clauses orthat underwent human rights screening

-

413-1

Operations with local community
engagement, impact assessments, anddevelopment programs

P25-26413-2

Operations with significant actual andpotential negative impacts on local
communities

-

414-1

New suppliers that were screened usingsocial criteria

P33-39414-2

Negative social impacts in the supply chain
and actions taken-

No “Negative social impacts in the supply
chain and actions taken”, according to the
SAQ result containing these questions.

415-1

Political contributions-

Not applicable

416-1

Assessment of the health and safety
impacts of product and service categories-

N/A (Information unavailable)

416-2

Incidents of non-compliance concerning
the health and safety impacts of products
and services-

N/A (Information unavailable)

417-1

Requirements for product and service
information and labeling-N/A (Information unavailable)

417-2

Incidents of non-compliance concerning
product and service information and labeling-N/A (Information unavailable)

417-3

Incidents of non-compliance concerningmarketing communications-

Not applicable

GRI 418:
CustomerPrivacy

418-1

Substantiated complaints concerning
breaches of customer privacy and losses ofcustomer data

P33-39

GRI 419:
Socioeconomic
Compliance419-1

Non-compliance with laws and regulationsin the social and economic area-

GRI 407:
Freedom of
Association
and Collective
Bargaining
GRI 408: ChildLabor
GRI 409: Forced
or Compulsory
Labor

401-1

New employee hires and employee turnoverP33-39

Data table401-2

Benefits provided to full-time employeesthat are not provided to temporary or parttime employees

P33-39

Data table

401-3

Parental leave

P33-39402-1

Minimum notice periods regarding
operational changes

403-1

Occupational health and safety
management system

P23-24

Health and Safety

403-2

Hazard identification, risk assessment, andincident investigation

P23-24

Health and Safety403-3

Occupational health services

P23-24

Health and Safety

403-4

Worker participation, consultation, andcommunication on occupational health andsafetyP23-24

Health and Safety

403-5

Worker training on occupational health andsafetyP23-24

Health and Safety

403-6

Promotion of worker healthP23-24

Health and Safety

GRI 415: Public
Policy403-7

Prevention and mitigation of occupational
health and safety impacts directly linked bybusiness relationships

P23-24

Health and Safety

403-8

Workers covered by an occupational healthand safety management system

P23-24

Health and Safety

GRI 416:
Customer Healthand Safety

Work-related injuries

P23-24
P33-39Health and Safety
Data table

403-10Work-related ill healthP23-24
P33-39Health and Safety
Data table

404-1

Average hours of training per year per
employee

P33-39

Data table

404-2

Programs for upgrading employee skills andtransition assistance programs

P22-23

Human Resource Development

404-3

Percentage of employees receiving regularperformance and career development reviews

P33-39

Data table

405-1

Diversity of governance bodies andemployees

P33-39

Data table

405-2

Ratio of basic salary and remuneration of
women to men

P33-39

Data table-

Disclosure

406-1

Disclosure

Page Number / URLGRI Standard
No.

Incidents of discrimination and corrective
actions taken

GRI 406: Nondiscrimination

GRI Standard
No.

403-9

GRI 404:
Training and
Education

Disclosure

Data table
The minimum notices are given according to
the law of the countries / regions.
GRI 413: Local
Communities

GRI 414:
Supplier Social
Assessment

GRI 417:
Marketingand Labeling

Data table

Data table

N/A (Information unavailable)

Social Contribution

Not applicable
Data table

Data table

Not applicable

Sustainability Report 2022「English version」

43

Corporate Philosophy

Top Message

Corporate Profiles/Financial Information/Corporate History

Foster Group ESG Management

Environment

SocialGovernance

External Recognition

Data Table

1

Provision of Information Regarding Sustainability
Our View on Disclosure
Information on the Foster Group’s sustainability is provided with a view to increasing the transparencyof the Foster Group and conveying the activities for Foster Group’s sustainability and their results to ourstakeholders. This information is provided in accordance with the GRI (Global Reporting Initiative) andother international reporting standards and 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 for appropriate disclosure of the decision-making processes and the soundness of PDCA and its operation. The information
is provided via our sustainability report and corporate website.

Contents Reported in Sustainability Report 2022
• About this report
The Sustainability Report 2022 was prepared to report the Foster Group’s environmental, social, andgovernance (ESG) activities during the fiscal year ended March 31, 2022 (fiscal 2021) for our stakeholders in a way that is easy to understand. With regard to our ESG activities, your valued opinion would begreatly appreciated to help us fulfill our corporate social responsibilities in the years to come. We hope
this report will help you better understand the sustainability activities of the Foster Group.
• Reporting scope
Unless specifically indicated, the reporting scope includes the activities of the Foster Group, which consists of Foster Electric Company, Limited, and its consolidated subsidiaries in Japan and overseas.
• The reporting period of the Report 2022
The reporting period of the Report 2022 is from April 1, 2021, to March 31, 2022 (fiscal 2021). The Report also includes statements concerning activities outside the reporting period, including those in fiscal
2022.
• Referenced standards and guidelines
This report has been prepared in accordance with the GRI Standards: Comprehensive option. The Environmental Reporting Guidelines 2012 by the Ministry of the Environment were also referred to when
preparing the Report.
• Month of issue: July 2022
• Reporting to the United Nations Global Compact
As a company that has signed the United Nations
Global Compact, we have announced this reportas the “Communication on Progress (COP)” for thefour fields and ten principles to our stakeholders.
• 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

Sustainability Report 2022「English version」

FOSTER ELECTRIC CO., LTD.

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
https://www.foster-electric.com/
The illustration on the cover of this report represents our mission, "Throughacoustic products or its solutions, a total commitment to help create acomfortable life and pleasure of communication around the world. A truly
global enterprise our future society counts on," with our key automotive
business depicted at the center. The illustration also reflects our desire
to enrich people’s lives with the power of sound and vibration and deliver
happiness and sustainable future to all stakeholders, based on the ESG
Management Statement that we established in March 2021. The left sideof the illustration features a selection of icons for technologies related toour acoustic and vibration products, including speakers, headphones, andactuators. The right side shows icons for our environmental initiatives that wework on as material issues, such as “Decarbonized Society” and “Resource
Recycling”.

Sustainability Report 2022「English version」