Sustainability Report

2019

日本語版

01

Corporate Philosophy

CONTENTS

01
03
05
13
19
33
43
45
47
49

Corporate Philosophy

Corporate Philosophy
Top Message
Foster Group CSR Management
Environment
SocialGovernanceCorporate Profile and Financial Information
Corporate History
External Recognition

Corporate Creed“Sincerity” has been the Foster Group’s corporate creed since
its establishment.
By the term “sincerity,” we mean the act of treating allconcerned parties of the Company with a sincere approach.
The concept of CSR, which shares the same basic philosophy
as the corporate creed of “sincerity,” has always governed theCompany’s corporate management and business operations
since its foundation.
To continue to grow in the coming age, we believe it is importantfor each member of the Foster Group to act in accordancewith the CSR philosophy, or the corporate creed of “sincerity,”
which we have adhered to since our establishment.

Data Table

Corporate Creed

VisionSincerity

To make contributions
for future society
through acoustics

MissionThrough acoustic products or
its solutions, a total commitment tohelp create a comfortable life andpleasure of communication
around the world.
A truly global enterprise
our future society counts on.

The Foster Group is celebrating its
70th anniversary in 2019.

Corporate Philosophy

02

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

- Our Principles and Values -

I

II

III

THE LEADINGALWAYS

EVER MORE

IMPROVING

GLOBAL AND

Sound to LifeSOLUTIONINCLUSIVE

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

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

Embrace diversity andpursue more global synergy
at all management levels.

1. Trusted: Earn the trust of users andpartners.
2. Expert: Take pride in our expertisein acoustic technology
3. Inspiring: Add unique value,
motivate partners and excite
customers.

4. Fast and Flexible: Be fast moving
and flexible
5. Reliable Quality: Deliver totally
reliable quality via ever more
efficient systems
6. Proactive: Embrace learning andproactive leadership
7. Steadfast: Show steadfast
dedication in going beyond our
promised goals

8. Open Mind: Be open–minded
and inclusive
9. Responsible: Fulfill our duty
to protect people and theenvironment.
10. Team: Respect others as partof a team with shared 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”.

03

Top Message

Top Message

Hiromi Yoshizawa President

Top Message

04

Corporate Social Responsibility and Management
As we fulfill our corporate social responsibilities, Foster Group sincerely wishes to be a corporate citizen that is reliedon and loved by our various stakeholders. We seek to do this by maintaining the consistent spirit of doing business forsociety and people based on our corporate creed of “sincerity.”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 good for society. I believe that many corporate entities that have been
operating for more than 100 years secure these “three goods” by making reasonable profits and returning them for thegood of society. Securing these “three goods,” we also aim to be a centennial company that has a shining presence inthe coming new society.
Society is currently experiencing major changes. With the industrial revolution being brought about by the IoT (Internet ofThings), advent of the automated driving era, development and expanded use of AI and many other advances, we feelthat the innovations that fundamentally change our way of life are progressing at a pace that far exceeds anything that we
anticipated. New players are also appearing one after another to respond to those changes and competition is becoming
increasingly intense.
To realize our corporate vision “to make contributions for future society through acoustics” and to respond to the drasticchange of technologies, we must continue to uphold the basic philosophy of “sincerity” that Foster has adhered to since
its founding, while making major changes as we move forward. The key players who have a central role in achieving thisare people, the tens of thousands of Foster Group employees around the world.
We will continue to actively promote human resource employment worldwide and diversity to cultivate truly global
and sophisticated human resources. In addition, by further promoting “work-style reform,” we would like to offer anenvironment where more employees can work flexibly and freely to achieve the goal of “Be Happy 80%*.”* “Be Happy 80%”: The ideal environment that we would like to achieve company-wide, which was presented by a teamof young employees during internal leadership training.
It refers to a working environment and corporate body where 80% of our employees can feel 80% happiness. I agreewith such idea.
Recognized for such efforts, following the “New Diversity Management Selection 100 (2017)” by the Ministry of Economy,
Trade and Industry, we were awarded ”Top 100 Telework Pioneers” (Ministry of Internal Affairs and Communications) and“Certification of Excellent Company in Health: Gold” (Tokyo Federation of the National Federation of Health InsuranceSocieties). Since this year, we have been selected for one of the “Excellent Health and Productivity Management: White
500” (Ministry of Economy, Trade and Industry) companies. We will continue those efforts in the future.
Foster Group has signed the “United Nations Global Compact” since 2017, and will continue to maintain compliance andpromote environmental activities as part of our CSR activities, to ensure thorough quality control and risk management,
and conduct our business operations based on the values of discipline, responsibility and social contribution.
We have also defined “Foster Rhythm” and introduced it across the group companies to clearly describe “Principles &Values,” instill the concept of our corporate philosophy in our employees, and strengthen the foundation of the corporation
for future generations.
We are celebrating our 70th anniversary this year. We will continue to strive to offer satisfaction to our various stakeholders,
and to become an enterprise that is loved by society.

05

Foster Group CSR Management

CSR Management
Since its founding in 1949, the Foster Group has aimed to become
indispensable to society, and has continued to grow and develop under
its corporate philosophy of “Sincerity.”
Celebrating 70th anniversary this year, and further “aiming to be acentennial company,” the Group will continue to adhere to management
based on “Sincerity,” that is, “always convey the truth and offer humanand environmentally friendly products and services to all stakeholders
with cordiality.”
In 2016, the Group established the “Foster Rhythm”, which wasformed to make its corporate philosophies easier-to-understand, anddistributed it internally. Aiming for tens of thousands of our global
employees to sympathize and embody its corporate philosophies, thiswas established and promoted by the employees themselves.

Atsushi Narikawa
Officer in Charge of CSR,
Senior Managing Director

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

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

Foster Group CSR Management

06

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

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

Board of Directors

Accounting Auditor

PresidentInternal Audit Department
Officer in Charge of CSR
CSR Promotion Department

Relevant committees
CSR Committee

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

CSR Representative

Corporate and Business Divisions
at the headquarters

Group companies

07

Foster Group CSR Management

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

End users

Engagement

Shareholders
Investors

Sustainable development domains

Directors/Officers

Ideal company with a centennial history
Back casting

CSR reflecting
our corporate value

Employees

The Ten Principles of the UN Global
Compact

Respond to social demands

Suppliers

EICC Code of Conduct
Communities
Future generations

Social value domains

Risk management
Compliance with laws
and regulations

Basic CSR

Environment
Anti-corruption
Corporate governance
Information disclosure

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

Government agencies

Industry

Business domains
Triple bottom line

EconomyEnvironment

Society

Sustainability

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

Materiality (priority issues)
When developing materiality items, we listed them by referencing the international guidelines and standards, etc., added
the priority issues extracted from the Foster Group Business Policy, and reflected the expectations of stakeholders,
including customers and investigatory bodies. As a result, we have set the Materiality (priority issues) that should be
addressed first as②follows:
マテリアリティ：重要度

The significance of the materiality issues
presented in this materiality assessment issignificant or crucial for the stakeholders
and Foster Group.

CrucialSignificant

Significance for Stakeholders

CrucialGHG Emissions
Reduction

Governance
Quality (ProductEnhancement Safety and Reliability)

Environmentally
Friendly Products

Sustainable
Supply Chain

Diversity

Decent Work

Penetration of
Corporate
Philosophy

Significant

Significance for Foster’s Business
Small

Significant

CrucialCrucial©Foster Electric Company, Limited. 2018. All rights reserved.

1

Foster Group CSR Management

08

Our Approach to Materiality (Priority Issues)
Materiality

GHG (greenhouse gas)
Reduction

Environment(E)

Environmentally Friendly
Products

Penetration of Corporate
Philosophy

Diversity

Social(S)

Decent Work

Quality (Product Safety
and Reliance)

Target· Reduce CO2 emissions(Scope 1&2)

Development ofenvironmentally
responsible products

Reduce 1% of CO2
emissions per sales unit
(Target for 2020: 7.73% ormore reduction from 2012)

CO2 emissions in fiscal 2018 decreased by 19%
year on year due to energy-saving activities
and the reduced production volume. However,
emissions per sales unit increased by 6%.

Reduce the weight of
speakers

The weight of car speakers was reduced byapproximately 50%. 140 g was achieved forspeakers with a diameter of 17 cm.

Reduce the use of VOC

Reduce power
consumption

The analog amplifiers for FOSTEX active speakers
were changed to digital amplifiers, which
achieved a reduction in power consumption.

Improve the employee
satisfaction rate80%

· Female manager ratio(headquarters)· Foreign employee ratio(headquarters)· Employment rate ofpersons with disabilities(headquarters)· Displaced worker for
nursing care(headquarters)

30% by 2021

9.7% (As of March 2019)30% by 2020

10.5% (As of March 2019)· Rate of paid holidays
taken (headquarters)· Total working hours(headquarters)

Fiscal 2018: 77%

Fiscal 2018 result: 78.9%

Monthly average of 156
hours and returning
overtime money
100%· Monthly average: 162.6 hours· Returned overtime money to the sections thathave reduced their overtime hours (fiscal 2018)· Fiscal 2018 result: 100%80%·F iscal 2017 result: 69.1% (The result from two years
ago because the result of health examinations will
be obtained in the following year.)· Rate of periodic healthexaminations taken (atheadquarters)· Rate of specific healthguidance taken(headquarters)

Enhance risk and crisis
management structure

Sustainable Supply
Chain· Response rate collected
for the conflict mineralsurvey from businessassociates

Page
2 to 4Pages
20 and 21

0% (fiscal 2018 result)· Held career development seminars for women· Introduced the Global-eye Program, anoverseas training program

Enrich corporate
governance· Response rate collected
for SAQ· Held workshops· Implemented interviews with management· Issued a collection of Foster Rhythm practices·W e plan to proceed with an employee
satisfaction survey in the future

More than 2.2% of the legal 2.3% (As of March 2019)
employment rate

The number of failuresthat would have a serious
social impact (human life, Maintain 0 failuresproperty, environment andso on)

Governance(G)

Page 14Pages
The ratio of new mobile audio products using
17 and 18
adhesives that do not contain toluene for at least
some parts was 75%.
The ratio of speakers with reduced use of solder
increased from 1.6% to 3.5% (per sales ratio).

0% by 2021

Refer
to

The ratio of car speakers using adhesives that do
not contain harmful solvents increased from 3%
to 4.4% (per sales ratio).

Reduce the use of solder

Enhance and improve
compliance structure

Governance
Enhancement

Achievements up to 2018

Existing suppliers: 91% orhigherNew suppliers: 100%

Existing suppliers: 99% orhigherNew suppliers: 100%

0 failures

Pages
21 and 22Pages
27 and 28·Implemented a compliance test (response
rate: 95.3%) and a compliance questionnaire(response rate: 78.8%)·Held compliance training for executives andmanagement·Monitored CSR activity statuses in major
business locations at the monthly CSR
committee meetings in which executives
participate

Pages
·
Implemented Foster Group risk identification 35 and 36
and assessment and provided the results of therisk assessment as input data for developing theBusiness Policy· As significant risk items, we monitored the reviewof the business continuity plan (BCP), desktop
training, the bribery prevention structure and thereview of the information security management
system, etc.
Existing suppliers: 91%
In future, we plan to continue to remind suppliers
from which we have not collected responses yet,perform analysis and risk assessment of collected
data, and take corrective actions.
Existing suppliers: 99%
In addition to maintaining and managing the
response rate, we also plan to promote procurementfrom certified refineries.

Pages
40 to 42

Applicable
SDGs

09

Foster Group CSR Management

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

Foster’s Actions
We are promoting the following 13 items among the 17 goals through our business activities and will continue to takeaction to help achieve a sustainable society.
SDGs

Actions

Business
Activities

SocialContribution

In-house

Refer toDonation activities for low-income households,
assistance with food, and others●

Pages 31 and 32

Participation in poverty reduction activities●

Pages 31 and 32

Participation in blood drives●

Pages 31 and 32

Implementation of the “Health Point System” and“Smoking Cessation Support Program”
Acceptance of student interns
Education on environment, human resource
development, health and safety etc.

●●

Page 22
Page 20●

Pages 13, 23, 25

Foster Group CSR Management

SDGs

Actions

Business
Activities

SocialContribution●

Held career development seminar for women

Measures against water risks

In-house●

Refer toPage 20

Page 14●

Well drilling for regional community

10

Page 31

CO2 reduction●

Page 14

Management of environmentally hazardous substances●

Page 14Work style reform project●

Page 21Returning overtime money●

Page 22

Setting up days to encourage employees to take paid
holidays●

Page 22

Personnel system with multiple courses●

Page 23

Technical meister system●

Page 23

Establishment of Diversity Management Section●

Page 20

Management of chemical substances●

Page 14

Zero emission●

Page 15

Environmentally friendly products●

Pages 17 and 18

CO2 reduction●

Page 14

Promotion of clean energy use●

Page 14

Environmentally friendly products●

Pages 17 and 18

Support for global environmental preservation activities●

Pages 13, 29

CSR procurement●

Pages 40 to 42

Basic policy on conflict minerals●

Page 42●

Corporate governance structure

Pages 33 and 34

CSR assessments and audits●

Page 12

Responsible procurement●

Pages 40 to 42

Continued responds to surveys from externalorganizations●

Page 12

11

Foster Group CSR Management

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

Activities as a member of the Global Compact Network Japan (GCNJ)
We are participating in the “Human-rights Education Subcommittee,” “Environmental Management Subcommittee,”“WEPs Subcommittee,” “Supply Chain Subcommittee,” “DRR (Disaster Risk Reduction) Subcommittee,” and “ESG
Subcommittee”, “SDGs Subcommittee”, “Reporting Study Subcommittee” of the GCNJ, which are composed of themember companies of the UNGC (as of June 2019). The subcommittees not only share the CSR-related latest trends andstudy cases of each company through lecture meetings by influential individuals but also are working to produce various
kinds of outputs that support CSR activities of various companies based on the member companies’ experiences in awide range of industries.
Our Involvement in Output
 Supply Chain Subcommittee CSR Procurement Self-assessment Tool Set (Japanese)
http://www.ungcjn.org/activities/topics/detail.php?id=217
In addition, the knowledge obtained through the subcommittees is reflected in our CSR activities.

Foster Group CSR Management

12

CSR Assessments and Audits
CSR Internal Audits
In order to penetrate CSR at the manufacturing sites, the Foster Group is implementing CSR internal audits. We
implemented 21 total internal audits at the facilities in the last fiscal year. We implemented the audits by basically using
the local laws as the standards and guidelines and also by referencing various social requests, such as the RBA Code of
Conduct, RBA VAP (Validated Assessment Program), ISO14001, SA8000 and customer standards to confirm compliancewith the activities and check for any measures beyond the laws.

Customer Audits and Assessments
To meet the various requests of customers, we accept audits from
customers at manufacturing sites. Our production facilities in China andVietnam received 10 on-site audits from 2 corporate customers during
the period from April 2018 to March 2019. Over the course of the year,
we also received 23 requests (from 19 different customers) to complete
and return the Self-Assessment Questionnaire, and we responded
accordingly.
We will continue to focus attention on CSR in our manufacturing practices
and address requests from customers with sincerity.

Surveys from External Organizations

Customer audit at our factory in Vietnam

The Foster Group also responds sincerely to the CSR surveys received from external investigatory bodies. Last year, we
received and responded to 8 surveys regarding CSR, environmental management, ESG, SRI and others.
Among them was the “CSR company ranking survey,” which was conducted by Toyo Keizai Inc., we ranked 228th (outof total 1,501 companies).
We will continue to address the survey requests from external investigatory bodies with sincerity.

13

Environment

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

Medium-Term Environmental Policy[Issued following the approval by senior management in March, 2016]
1.We conserve the global environment by promoting resource andenergy saving in product development and design.
Ryoji Otowa• To set targets with customers and promote reduction of product’s
Senior Executive Officer, Head of Quality Assurance
Division, and Officer in Charge of Quality and Environment
electricity consumption and weight saving.
2. We prevent contamination and reduce CO2 emissions in all the
In addition to the performance of duties regarding QMS
phases of business activities including manufacturing and disposal.
(Quality Management System) / EMS (Environment• Each site to set waste reduction target and execute as action plan
Management System) and product quality assurance
for our customers, we have overall control of the these• Reduction target (Annual average): to reduce 1% of CO2 emissions
functions over overseas sites as well.
per sales unit (Target for 2020: 7.73% or more reduction from2012)
• To create an energy saving plan at manufacturing process in order to reduce CO2 emissions.
• To grasp clean energy usage rate at each site and promote clean energy utilization.
3. We strive for the continual improvement of environmental performance in compliance with environmental laws andregulations and other requirements.
• To reduce utilization of Volatile Organic Compounds by setting the reduction target in order to satisfy increasing
customer requirement.
4. We raise the awareness of environmental protection and biodiversity and thereby develop human resources who
contribute to society.
• To implement biodiversity protection education to employees and build a base for biodiversity protection activity
rooted in the area of each site.
• Understanding water risks on a world-wide level, each site to grasp and control their water consumption anddrainage.
5. We maintain and improve environmental management system and promote external communication.
• To maintain and improve environmental management system and environmental performance by achieving smooth
shift to ISO14001:2015 at each site. [Issued following the approval by senior management in March, 2016]

Environment Management System and ISO14001 Certification
We have obtained ISO14001 certification at the headquarters and all overseas manufacturing sites and embody the
Foster Group’s environment philosophies and mid-term environmental policies. At the headquarters, we monitor theactivities conducted at each site and check their results.
Starting fiscal 2019, we have added waste generation and water use targets and implement the activities globally.
The headquarters also defined the Head Office of Foster Electric (1-1-109, Tsutsujigaoka, Akishima City, Tokyo, Japan)
as a registered organization and promote activities while maintaining the environment management system and holding
environment committee meetings every month.
In addition, we present the ISO14001 certification at the request of stakeholders.

Environment

14

Environmental Activities
CO2 Reduction (Scope 1 and 2)
The CO2 emissions of the entire Foster Group in fiscal 2018 were reduced by 19% year on year due to energy-saving
activities and the reduced production volume. However, the emissions per sales unit increased by 6%, against the targetof a 1% year-on-year reduction. For Scope 3 CO2 emissions, please refer to the data table at the end of this report.

CO2 Emissions(t-CO2)(t-CO2 / 100M¥)

120,000
100,000
80,000100

89,43062.3

93,94890,99956.6

60,00088,82390,877

90,20972,868

56.5

48.1

80

48.8

46.5

40

40,00020

20,000
0

60

51.9

2012

2013

2014

2015

Total Emissions

2016

2017

2018

0

Unit of Net Sales

Environmentally Friendly Headquarters Building
Our headquarters employs technologies such as “Lighting control using daytime sunlight”, “Air conditioning using outsideair”, “Ice thermal storage air conditioning system”,* “Double-skin facade". In addition, we control electricity use throughthe Cool and Warm Biz campaigns, and the initiative to turn off all the lights in the building. Based on the mid-term
environmental plan, by procuring clean energy prior to the other sites in the Group, the headquarters strongly promotes
active participation in climate control measures.
* “Ice thermal storage air conditioning system: A system to use the air conditioner during the daytime that cold air is madefrom the ice produced during the nighttime.

Management of Chemical Substances
The Group has set forth its autonomous management standard, in which applicable laws, regulations and customers’
requests are reflected, for handling environmentally hazardous substances contained in its products to minimize theirimpact on the environment. We eliminate any controlled substances from our products via eco-friendly procurement andmanagement of necessary parts and/or materials purchased.
Based on the aforementioned scheme, we have established an optimum management system for the efficient search andcollection of information about chemical substances that are contained in parts and materials and precise communicationof information necessary in the supply chain. We have taken all possible measures to ensure that we do not miss to copewith annually added chemical substances that need to be monitored in accordance with the EU’s RoHS2.0 Directive andthe REACH regulations implemented in 2013. In addition, to ensure communications of related information, we provide
our suppliers with briefing meetings every year primarily at our overseas sites. We monitor 40 substances as controlled
substances and banned heavy metals such as lead, cadmium, mercury and hexavalent chromium together with otherhighly harmful substances from use so that our products are completely free of these substances.
In compliance with the trend of legal regulations and/or customer requests, our products are manufactured withoutcertain chemical substances, such as certain phthalate esters which are used as plasticizing agents (referred to as certain
phthalate ester-free manufacture).

Measures against Water Risks
Each site manages water withdrawal and discharge by setting their standards 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 each site.

15

Environment

Communications with External Companies
This year, as a company that works on SBT*, we began participating in the Decarbonization Management Promotion
Network of the Program for Improving Corporate Value by Decarbonization Management hosted by the Ministry of theEnvironment and exchanging information with the member companies.
* SBT: Science Based Targets

Zero Emissions
At headquarters we are engaged in the recycling of waste, etc., (waste that
contains recyclable elements) through the sorting and separation of regularwaste, plastics and industrial waste, together with comprehensive awarenessraising activities. Assembled products and parts are being recycled into raw
materials through professional recycling (13 tons / year), as part of our continuing
activities aiming to achieve zero waste emissions from our business activities.

Recycled materials being carried out

Activities during the Environment Month (headquarters)
Environment Lecture Presentation
We invited external lecturers and asked them to give lectures on global issuesof ESG and trends of ESG investment, which are required for the sustainable
development of companies.
Approximately 100 employees, including members of the management team,participated in it and had an opportunity to consider the issues of futureenvironmental management.

Activities Related to Biodiversity

Training on ESG issues for sustainable
development (headquarters)

With the cooperation of the NPO, Shizen Academy, we implemented environmental education at headquarters to raiseinterest in and awareness of biodiversity. We dealt with the environment of Akishima City, Tokyo, where our headquarters
is located, as an opportunity to understand nature around us.

Biodiversity education (1)Biodiversity education (2)Akishima City Cleanup Movement (Mini-Clean Activities)
As part of our CSR activities, we conduct monthly mini-clean activities, clearing the footpaths and sidewalks around ourheadquarters based on our annual plan.
We also actively participate in the Akishima Cleanup movement, and are working towards the beautification of our local
area, in which all departments including the members of the Environment Committee can participate. 123 employees
participated (participation rate: 22%) last year, and the total waste weighed 33 kgs.

Mini clean activities (1)Mini clean activities (2)Mini clean activities (3)Environment

16

Environmental Activities at Overseas Sites
China
We carried out cleanup activities around each plant. In addition, we purchased a dishwasher for the cafeteria and changed
disposable containers to reusable ones to reduce waste. In the manufacturing process, we have introduced equipmentthat reuses water that has been used in the papermaking process.

Using reusable containers

Cleanup activities in the city

Water reuse for operation process

Vietnam
We carried out cleanup activities around the plant. In addition, we planted trees on the premises and took care of theplants. We also held training for waste supervisors and carried out environmental outreach activities.

Notification on Environment Month

Education for waste supervisors

Planting on the premises

Cleanup activities in the city

Indonesia
We planted avocado, mango, and orange trees in Tebing Tinggi village, Batam Island.

Planting activity

Planting activity

Planting activity

Myanmar
We carried out cleanup activities around the plant. In addition, we posted a notice to make the environmental impact
known.

Cleanup activities in the city

Notice on theenvironmental
impact17

Environment

Environmentally Friendly Products
Our Views on Environmentally Friendly Products
The Foster Group designs and develops products by taking into account all aspects of product life-cycles; from theprocurement of raw materials to the manufacturing, use, disposal and recycling of its products. We strive to develop
and provide products with the least possible environmental burden, such as through the manufacture of environmentallyfriendly products that minimize the use of harmful chemical substances, and the development of lightweight products
engineered to reduce CO2 emissions. We understand the requirements of laws, regulations, and customers before starting
development and ascertain whether those requirements have been fulfilled at the end of the product development via the
Product Assessment.
Lightweight Car Speakers, Environmentally Friendly Speakers● We developed a lightweight speaker, optimum for next-generation environmentallyfriendly vehicles such as electric vehicles (EVs). We reduced the weight of theconventional speaker by 50% to 140 grams with a diameter of 17 centimeters andenabled its mass production. Its advanced design has taken into account the needto reduce overall CO2 emissions from vehicles.
● We have employed adhesives that do not contain harmful solvents and put them topractical use in order to reduce the volume of VOC remaining inside the passenger
Lightweight car speakercabin of vehicles. We have taken steps to eliminate harmful solvents, and the ratio of
new model products not containing such solvents increased from 3% in 2017, to 4.4% in 2018 (per sales ratio).
● The diaphragms and the center caps are made out of recyclable paper with the waterproofing feature required for invehicle use.
● As one of our environmental activities, we have developed speakers with reduced solder applications. We have
expanded this to Group companies, and the ratio of products applying reduced solder increased from 1.6% in 2017,
to 3.5% in 2018 (per sales ratio).
Headphones and Headsets
For headphones and headsets, we have been active in incorporating environmental considerations in our product and/or process design. For reducing the substances in our products that burdens the environment, we address the most upto-date information regarding country-specific legal requirements and the RoHS2 to promote proposals to our customers
and dissemination to all the Group companies. We also have been keen on measures to minimize the volume of wastematerials, reuse raw materials by introducing new equipment and developing products using natural materials
For microspeakers used for headphones or headsets, we are working towards environmentally friendly productmanufacturing by introducing adhesives that do not contain toluene for new microspeakers in order to reduce VOC(replacing the parts that use solvent adhesives).
· Development target and result for products that do not use toluene
Target for 2020: The ratio of products using adhesives that do not contain toluene for at least some parts to be 100%.
Target for 2025: The ratio of products that do not contain toluene to be 100%.
Fiscal 2018 Result: Of new product lines, the ratio of products using adhesives that do not contain toluene for at least
some parts was 75%.

Example of environmentally friendly microspeaker(Microspeaker with a 35 mm diameter for headphones)

Environment

18

Active Speaker
The environmentally friendly NF04R, has an amplifier digitalized from the previous model's (NF01R) built-in analog amplifier.
It has reduced its power consumption from 50 W to 30 W, with consideration for energy saving and CO2 reduction.

Active speaker NF04R

19

SocialSocialHuman Rights Protection
Policies
In 2003, we established the “Foster Group Corporate Action Guideline”
and the “Foster Group Code of Conduct for Staff”, which define ourrespect for human rights in compliance with all laws and regulations,international rules and their spirits and concepts. We have also requested
our business partners in the value chain to show a similar respect forhuman rights. An outline is provided below.
Respect for Employees’ Humanity
Under our labor-management mutual trust and responsibility, we seek tocreate 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 donot support any form of forced labor and child labor.

Iwaki Tsugane
Deputy Head of Global Corporate Support Division

Respect for Human Rights and Anti-discrimination
The Global Corporate Support Division works withmembers from each site to promote not only regional
We do not engage in irrational discrimination based on birthplace,
activities, but also global CSR activities, humannationality, race, origin, creed, religion, gender, age, disability of various
resource development and utilization, creation ofwork-friendly worksites, as well as health and safety
kinds, hobby, academic background, skin color, sexual preference,
activities, mainly in the fields of CSR promotion,
gender identity disorder, pregnancy, political belief, participation tohuman resources, and general affairs.
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 other persons fromengaging 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 and control 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 workplace environment,
understand the laws and orders concerning work-related safety and health and comply with them. If any work-related
disaster arises under any circumstance, Foster Group Directors and Staff strive to carry out the prescribed procedures
such as the creation of an immediate report in order to minimize and prevent the recurrence of such accident in a reliable
manner.
Compliance with Labor-related Laws
We comply with the labor-related laws and endeavor to maintain a comfortable and healthy workplace environment.
In order to ensure that the working conditions stay within the limit set forth in the “Labor Standards Act,” we strictly control
working days and working hours. We do not force labor that compels excessive work or over-time work and so on.
Managers take into consideration the condition of the physical and mental health of subordinates at all times.

Social20

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

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

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

Main Activities (Headquarters)<Supporting Employees Raising Children and Providing Nursing Care>
To promote a working environment where employees who are raising young children and providing nursing care can workat ease, we have improved our system to support the balance between work and child/nursing care. Since April 2018,
we have extended the childcare leave period to three years maximum and the nursing care leave period to 183 days
maximum. In addition, we have signed a joint use agreement with company-led childcare centers, which offers preferredbenefits 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 are aiming to havefemale managers represent 30% of all management by the end of March 2021.
In fiscal 2018, we held the "Career Development Seminar for Women” for female employees, aiming to increase theirmotivations and to be able to set clear targets through self-understanding and self-analysis.
<Educational Activities on Diversity>
In fiscal 2018, we held training and lecture presentations for management to deepen their understanding of the promotionof diversity. By obtaining knowledge and information regarding diversity, we learned that the participation of diversified
human resources will lead to new value creation within the company and the need to consciously eliminate unconscious
bias. We also held a career development seminar for female employees.
<Our Activities for LGBT (Sexual Minority)>
Currently, the Human Resources and CSR departments are carrying out activities to deepen understanding of LGBT and
increase the number of allies (those who show understanding and support for LGBT people). In the future, we will increase
allies company-wide through activities designed to foster understanding.
<Promoting Student Internships>
We have accepted student interns since 2012. In addition to the work programs for learning acoustic technologies andsales activities, we provide a program for learning CSR, a program for experiencing acoustic quality evaluation, a programfor overseas students, and various other courses. We have received positive feedback from the participants, who said
that they were able to experience the sound development of Foster. In fiscal 2018, a total of 77 interns participated in
them.

21

Social<Global Human Resource Employment>
The Foster Group employs a variety of human resources regardless of their nationalities, and is actively promotinginternational communications in the Group to cultivate human resources and enhance the functionalities.
* 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 aworking environment that makes the most of the employees’ diversity with various
backgrounds.
■ Website of the Ministry of Economy, Trade and Industry: New Diversity Management Selections
New Diversity Management Selections 100 (2017) Companies (Japanese)
http://www.meti.go.jp/policy/economy/jinzai/diversity/kigyo100sen/practice/pdf/H29_diversity_ichiran.pdf
Best Practices in Fiscal 2017 (Japanese)
http://www.meti.go.jp/policy/economy/jinzai/diversity/kigyo100sen/practice/pdf/H29_diversity_bestpractice.pdf

Future Plan
· Female manager ratio (at headquarters): To increase the ratio to 30% of all the management by 2021.
· Foreign employee ratio (at headquarters): To increase the ratio to 30% of all employees by 2020.
· Employment rate of persons with disabilities (at headquarters): To keep the rate above the mandatory rate required bylaw.
· Displaced worker for nursing care (at headquarters): Aim to be zero by 2021.

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

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

Main Activities (Headquarters)<Work-Style Reforms>
Since September 2016, we have established the systems and culture that satisfy a variety ofwork-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-athome program. As for the work-at-home program, we introduced it at full scale without limiting
the targets, and have been selected as one of the “Top 100 Telework Pioneers” by the Ministryof Internal Affairs and Communications for its telework initiatives. We have engaged in creatinga work environment where employees can work flexibly to suit their lifestyles regardless of “time” or “place” by utilizing
ICT. We will continue work-style reform to become a company that can offer a more desirable work environment andfulfilling career.

Social22<Returning Overtime Money>
In order to advance not only the efforts of individual employees but also the organizational efforts to improve operational
efficiency, we return overtime money twice a year to the sections that have reduced their overtime work hours by 10%
or more.
This promotes the improvement of operational efficiency according to the actual situation of each section and awarenessraising to achieve further overtime reduction.
<Enhancement of the Leave System and the Leave of Absence System>
Since April 2018, we have introduced the volunteer leave system, so employees can grow through volunteer activities.
We have also introduced the system that grants the leave of absence for up to two years to the employees who desire to
pursue further education to deepen and expand their own expertise and the system that grants the leave of absence forup to five years to the employees who desire to accompany their spouses on overseas assignment.
During the period from December 2018 to March 2019, we implemented a trial hour-based paid holiday system thatutilizes expired paid holidays. The system was well received by the employees who participated in the trial, with thecomment that they can take paid holidays according to a range of situations. In future, we will develop the system for its
full-scale introduction.
In addition, to enhance work-life balance by establishing a working environment that encourages employees to take paid
holidays and leads to better operation performance, we set two days to encourage employees to take paid holidays infiscal 2018. 75% of employees took the holidays on these days.
As a result of these activities, the rate of paid holidays taken was 78.9% in fiscal 2018.
(Target rate of paid holidays taken in fiscal 2018: 77%)
<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.
For example, to raise the awareness of employees’ health, we implement the “Health Point System,” in which we give
points and provide health incentives to employees.., and a “Smoking Cessation Support Program,” which subsidizes theexpenses paid to medical institutes to the employees who wish to quit smoking.
Such initiatives were evaluated and we received the “Certification of Excellent Company in Health: Gold” from the Tokyo
Federation of the National Federation of Health Insurance Societies in December 2018. Subsequently we were certified
as the “Excellent Health and Productivity Management: White 500” by the Ministry of Economy, Trade and Industry in
February 2019.

Future Plan
Target for fiscal 2019:· Rate of paid holidays taken (at headquarters): 80%· Total working hours (at headquarters): Average 156 hours per month· Rate of periodic health examinations taken (at headquarters): 100%
· Rate of specific health guidance taken (at headquarters): 80%

23SocialHuman Resource Development
Policies
Our human resource development is based on “continuous performance by linking various personnel systems withindividual development goals determined by mid/long term business strategy and individual personality (strength/
weakness).” The ideal for human resource development is as follows:· Personnel who embody our corporate philosophies and corporate creed through their duties and who have a “strongwill” and “activity” to work toward their realization.
· Personnel who do not remain complacent about the current situation but utilize every opportunity to improve their own
abilities and grow with ingenious attempts and efforts.
· Professional personnel who use their expertise to play a key part in strategy formulation and implementation and who
can create value continuously.
· Self-directing personnel who are conscious about their expected and assigned roles and missions and who can takeresponsibility for their own actions and results.

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

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

Future Plan
· Further instilling our corporate philosophies (understand → empathize → implement)· Stabilization of the operation of the new personnel system (multi-stream personnel system by course)· Promotion of the human resource rotation linked with the mid- and long-term human resource development program· Establishment of global human resource utilization base and development of global leadersSocial24

Health and Safety
Policies
Foster Electric has established a rule to prioritize health and safety, and endeavors to create a safe and healthy working
environment. Based on this rule, we are advancing redressing activities, which are carried out mainly by the Health and
Safety Committee, which governs health and safety, and the health and safety management organizations at respective
sites.
Abstract from the “Code of Conduct”(1) Understand laws and orders concerning work-related safety and health and comply with them. And minimize andprevent a recurrence of an accident in a reliable manner.
(2) Employee exposure to potential safety hazards is to be controlled through the proper design, engineering andadministrative controls, preventative maintenance and safe work procedures.
(3) Procedures and systems are to be in place to prevent, manage, track and report occupational injury and illness.
(4) Employee exposure to chemical, biological and physical agents is to be identified, evaluated, and controlled.
(5) Employee exposure to the hazards of physically demanding tasks is to be identified, evaluated and controlled.
(6) Production and other machinery is to be evaluated for safety hazards.
(7) Employees are to be provided with ready access to clean toilet facilities, canteen with suitable drinking and eating
environment.

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

Risk and Crisis Management Committee

Health and Safety Committee

Industrial doctor

Outsourced contractor

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

Health supervisor

Organic solvent manager

Health and safety
management organization
at each Group company

Building healthadministrator

Hazardous material
safety supervisor

Chief press machine
operator

Specially controlledindustrial waste manager

Safe driving administrator

25

SocialMain Activities
Every year, we implement health and safety education, which is the basis of occupational activities. Based on this, we aretaking steps to address group-wide issues, led by the Risk and Crisis Management Committee. As part of the activities
based on the health and safety management regulations, the health and safety management organization, which consistsof representative workers and management, discusses site-specific issues, legal inspection, risk assessment, and so on
at each site to prevent accidents and eliminate risks.
With regard to the group-wide issues, we are carrying out initiatives to resolve occupational health and safety issues forall employees based on the Foster Group Corporate Action Guidelines and the Foster Group Code of Conduct for Staff.
This year, we will launch full-scale initiatives to address issues common to the Group using the essence of occupational
health and safety management system, ISO 45001. The headquarters has developed and executed the plan based on thepolicy of the Health and Safety Committee, “Globally reduce risks and make provisions against the occurrence of crises,”as an initiative to address individual issues. In particular, to introduce the occupational health and safety management
system, we strived to develop a standard based on JIS Q 45001, which is the Japanese equivalent to ISO 45001,
reduce highly harmful chemical materials in the production processes at plants, and enhance the health of employees.
Based on these activities, we have developed the Procedures for Occupational Health and Safety Management Program,which describes our system. In addition, as a risk of causing a failure that will lead to serious consequences for thegroup, we replaced extremely harmful chemicals with less harmful ones to prevent the occurrence of severe failures
and implemented health enhancement initiatives for all employees. These initiatives were evaluated and we received“Certification of Excellent Company in Health: Gold” from the Tokyo Federation of the National Federation of Health
Insurance Societies in February 2018.

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

Award ceremony for the “model company for bicycle safety”

Initiatives at Overseas Sites
We have commenced preparations for obtaining ISO 45001 certification for occupational health and safety management
system standards at some of our overseas manufacturing sites. We will strive to improve the issues related to occupationalsafety and health via the management system. Prior to the ISO 45001 certification, Nanning Plant in China obtained
OHSAS 18001 certification on July 3, 2018.

Future Plan
We will build a global structure based on the essence of ISO 45001-Occupational Health and Safety Management
System and promote information sharing by Health and Safety Committee.

Social26

Customer Satisfaction
Foster Group Sales Department
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 goodsounds that can impress people across the world through our products and parts. One thing we must do to achieve thismission is to “create customers,” as a wise person once said. Needless to say, customers can be created by continuously
satisfying someone’s needs. We consider it as the origin and made our primary responsibility “customer satisfaction,”
which we believe is the principle of all our activities.

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

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

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

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

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

27

SocialActivities
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 foraudio equipment, we offer lectures on working principles of speakers at universities and vocational schools.

Future Plan
We will continue to supply our trusted original brand, FOSTEX brand products, to introduce our high technical competences
and the high competitiveness of our products. In particular, in 2019 we will continue to develop products that can deliver
greater listening pleasure to our customers through sound, focusing on the development of a full-range speaker, astrength of Fostex, and Bluetooth earphones, which is a market trend.

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

Our Quality Assurance Policies and Actions
Under our customer-focused philosophy, the Foster Group considers the delivery of safe, eco-friendly products of reliable
quality by fulfilling customers’ expectations and social requirements as the basics of our quality assurance.
In addition, under the Basic Quality Policy, we globally promote comprehensive quality assurance activities to ensure thatour products are of high quality.
Safety, reliability, and management of environmentally hazardous substances are taken into account on our products andcomponents 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 Our Quality Assurance Activity System (Main Process) and Mechanism
Quality Assurance Activities based on APQP (Advanced Product Quality Planning)

FOSTER TQM(Total Quality Management)

Market needs, customer expectations and requirements

Process

Continuous Improvement

Contract check

SystemCreation

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

Design, prototype production

Product creation
Quality creation
Quality to be accomplishedHumanby the across-the-board
Technology
Resource
efforts ofCreation
Development
the employees
Product development technology
Environment and safety related
technologies
Production technology

Product feasibility review (DR-0)

Human resource development inquality management

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

Basic Quality Policy

TQM and QMS*at FOSTEROur QMS is based on the development of quality assurance and management activities under
its customer-focused philosophy since the Company’s foundation.
▲ In 1975, we formulated the Total Quality Control (TQC) Regulations, which was upgraded toTotal Quality Management (TQM) Regulations in May 2006.
▲ Since 1998, all the Group companies have successfully acquired the QS9000 certification(including ISO9001: 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-wideand have continued to comply with them.
* QMS: Quality Management System

We develop QMS by seeking “Zero Defect”

Zero DefectSocialGlobal Quality Assurance Structure

28

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

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

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

Main Events Held Last Fiscal Year■ Lecture on Quality
A lecture on quality was held by inviting outside lecturers.
Approximately 170 employees attended this event.

Quality lecture (headquarters)■ Quality Improvement Exhibition
We hold exhibitions at headquarters and overseas sites to share detailed information on the improvements.

Exhibition at the headquarters

Exhibition at Guangzhou Plant in China

Exhibition at Thilawa Plant in
Myanmar■ Seeking Ideas for a Quality Slogan
We seek ideas for a quality slogan from each division every year. Compiled in a booklet, all of our employees carry at
all times.
＊＊＊＊本部【＊＊＊＊＊＊】＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊【＊＊＊＊＊＊】＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊【＊＊＊＊＊＊】＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊【＊＊＊＊＊＊】＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊■ Global QC Circle Convention
Through the QC Circle activities, opinions from overseas production sites
are valued and used to improve product quality.
Each year, more than 100 QC circle teams are conducting activities atoverseas factories. Among them, 7 teams that won the QC Circle Convention
at each factory gave presentations of their results at headquarters.

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

29

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

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

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

Main Activities<Communicating with the Community>
We continued the naming rights contract with Akishima City regarding Akishima Community Hall, which is known locallyas KOTORI Hall by the citizens of Akishima City. We will continue to pursue activities to win the affection of the local
community.

KOTORI Hall

KOTORI product exhibition corner

In 2018, as a lead member of Akishima City’s Environmentally Friendly Business Operator Network, we have continued
to take part in the Akishima Industrial Festival, the Environment Green Festival, and other environment events. We pursue
our environmental preservation activities in cooperation with neighboring companies and the staffs of Akishima City
Environment Section. Also, valuable feedback from citizens through the events was highly beneficial for our activities. We
will continue to grow together with all citizens in the future.

Akishima industrial festival (1)Akishima industrial festival (2)Social30

In December 2018, we held “Craft Class” and “Winter Vacation Parent & Child Crafts Class”, a winter holiday event forparent-child interaction as part of the Akishima community courses, which was well received.

Winter vacation parent & child crafts class (1)Winter vacation parent & child crafts class (2)In addition, Foster is promoting activities to enable people to encounter local traditional cultures through Akishima Showa
No Mori Organization and Akishima Tourism & City Planning Association, in which we participate. Foster is also deepening
communications with the local community through efforts such as cooperation with the Akishima Location Service toengage in activities for revitalizing the local area and donations to the Social Welfare Council to contribute to welfare in
the local community.
In addition, we have continued the in-house sales of specialty goods from the town of Iwaizumi, Iwate Prefecture, whichconcluded a friendship city agreement with Akishima City, as a disaster reconstruction support activity and contributed tothe area’s recovery through economic activity.
<Crime Prevention and Disaster Readiness Initiatives>
To support the 2020 Tokyo Olympic and Paralympic Games, Foster is cooperating with the Tokyo Metropolitan Police
Department, concluding disaster prevention agreements with neighboring companies, and otherwise bolstering its crime
prevention and disaster readiness initiatives in the local community. In addition, every year, we raise funds to support
people who have been affected by crime. This initiative has been recognized, and we received a letter of gratitude fromthe Victim Support Center of Tokyo on March 28, 2019.
<Investing in Human Resources for the Future>
Following last year, we held two speaker-making classes in July and August 2018, an event sponsored for children by ourconsumer brand FOSTEX company, at “Anfelit” showroom where FOSTEX products were exhibited. About 80 children,from late elementary to junior high school students and their guardians not only learned the mechanism of sound, but also
enjoyed listening to music through the speaker.

Making speakers

Listening to sounds from the speakers
that the children made<Participation in the Akishima City Community Development Company Summit>
In December 2018, the Akishima City Community Development Company
Summit was held, and we participated with companies based in Akishima City,
the Akishima Society of Commerce and Industry, and Asia Crime Prevention
Foundation, Co., Ltd. (ACPF).
Under the leadership of the mayor of Akishima City, who wants to revitalize
Akishima City, individual companies reported their activities and exchanged
opinions with each other, including strong thoughts about and expectations ofAkishima City.
We gave a presentation about the importance of overseas human resources, etc.

31

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

Vietnam
December 2018: We offered gifts to elementary school children and employees who are economically disadvantaged.

January 2019: We gave New Year’s donations to the poor in Cam Le District and Hoa Vang District in the suburbs of Da Nang.

February, May 2018: We offered gifts to citizens and employees who are fighting serious illness.

Indonesia
June 2018: Because the power generator, which is the only power source in Tanjung Kelingking fishing village of Batam
Island, was old and experienced an operation failure, we donated a new generator.

October 2018: Tebing Tinggi fishing village in Batam is dependent on a rainwater collection pond as a water source.
Because the pond had dried up and was polluted, we supported the construction of a well.

Social32

Malaysia
January 2019: We offered donations to Penang Shan Children's Home Association, a non-profit organization catering to
the needs of orphans, neglected children, dysfunctional families and single parents.

Myanmar
Our Myanmar site performed the following activities.

March 2019: Over 200 employees participated and donated blood to the National
Blood Center Myanmar.

April 2019: We donated female clothing toThabarwa Center where more than 3,000
elderly women live in.

April 2019: We participated in the donation
event for elderly people, held near Thilawa
Special Economic Zone.

China
February 2019: We took part in the poverty reduction activities conducted by the local government by providing
employment guidance to those who are economically disadvantaged.

Korea
ESTec Corporation, a Group company in South Korea, performed the following contribution activities.

February, September 2018: Conductedby our officers and employees, funds forneighbors were donated via the inhabitantlife support office to people in need ofsupport in the Yangsan area

July 2018: We sponsored the 16th EomJeong Haeng National Musical Contest.
We have sponsored this contest since2004.

December 2018: All our employees pickled
200 boxes of kimchi (approximately 1,500kg) together and sent them to those who areeconomically disadvantaged (elderly living
alone, people with serious disabilities, andhouseholds with a child acting as the head ofhousehold), via the Yangsan Volunteer Center.
This "Kimchi sharing with love” event has been
carried out every year since 2010.

33

Governance

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

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

Tatsuhito Tanaka
Senior Executive Officer andHead of Corporate Management Division
The Corporate Management Division carries out its
operations regarding finance, accounting, IR (Investor
Relations), legal affairs and intellectual property. It has
a function that governs not only the headquarters inJapan but also the subsidiaries around the world.

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 are held to report and discussmatters concerning the execution of businesses at the business divisions, in order to expedite decision making processes
and ensure that unified decisions are reached.
On a Group-wide level, twice a year, in order to facilitate consolidated management within the Group, the Domestic Group
Company Meeting is held by the top executives responsible 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 their budgets;and the Global Strategy Meeting is held to discuss global strategies with regard to sales, technology, quality control andmanufacturing. Through these meetings, we share and reaffirm the direction in which the entire 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 andappointing people to managerial positions, and in determining the details of their remuneration, etc. Each committee
consists of representative directors, managing directors, directors, standing statutory auditors, and statutory auditors(currently a total of six members for Nominating Committee, and five members for Remuneration Committee). Chairperson
and vice chairperson are selected from independent officers for both of these committees.

Governance

34

General Meeting of Shareholders
Board of Directors

Statutory Auditors / Board of Statutory Auditors

Accounting Auditor

Management Monitoring
President(Internal Control)

Management Meeting

Board ofManaging Directors

Division Head Meeting
Internal Audit Department

Domestic Group Company
MeetingGlobal Budget Meeting, etc.

Corporate Staff
Departments

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

HotlineBusiness Divisions

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

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

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

35

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

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

Secretariat

Committee members from the headquarters / Committee members from Group companies

Compliance Committee
Foster Group’s compliance programs are led by the Compliance Committee with the president as a chief executive officer,
In fiscal 2018, a compliance survey was conducted in addition to the test. Also, an outside expert was invited to hold acompliance training to officers and managerial posts in an effort to raise compliance awareness.

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 compliance structure.

Governance36

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

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

Risk and Crisis Management Committee
Risk and Crisis Management Committee identifies and evaluates risks based on the result of risk reexamination conductedby respective department each year. The Committee determines important risk items that require controls, and suchitems are being monitored the Committee held on a regular basis. The risk evaluation result is also referenced during
the business policy planning. In fiscal 2018, our important risk items reviewed were the business continuity plan (BCP),
bribery prevention structure building, and information security management system.

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

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

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

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

37

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

Business Continuity Plan (BCP)
Policies
The Foster Group is taking steps to prevent and avoid various business risks and crises as risk/crisis control and tominimize the damage to the Company and avoid inconvenience to customers should a risk occur or be embodied, withthe highest priority given to preventing the recurrence of risks/crises.

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

Vice Executive Chairperson

Secretariat

Committee members
from the New Business
Development Division

Committee members
from the Global Corporate
Support Division

Committee members
from the Corporate
Management Division

Committee members
from Quality Assurance
Division

Committee members
from the Internal
Audit Department

Committee members
from the Corporate
Planning Department

Committee members from
the MA Business Division

Committee members fromthe SP Business Division

Committee members
from the Production Division

Committee members
from the Fostex Company

Committee members
from the Foster Micro
Acoustic Company

Committee members
from the Corporate Information
Strategy Department

Committee members
from Group companies

Main Activities and Measures
Operation of the Emergency-Contact Network (Safety Confirmation System)
To keep the headquarters functional, Foster Group has introduced a safety confirmation system using mobile phonesthat allow headquarters to issue an emergency notice to confirm the safety of its employees and their families when an
earthquake, disaster, or other emergency occurs.
Disaster-Prevention Activities
The headquarters is certified as an Excellent Fire Prevention Property. Our daily disaster prevention activities and regional
disaster prevention activities were recognized, and we received a letter of gratitude from the Akishima Fire Department.
In future, we will continue to work to be a company that is needed in the community.

A letter of gratitude for our fire prevention andlife safety measures

A letter of gratitude for regional safety anddisaster prevention

Governance38

Disaster Drills at Headquarters and Domestic Offices
Once a year, the Foster Group conducts disaster drills involving all employees at the headquarters and domestic offices.
A drill was conducted in March 2018 at the headquarters, which included evacuation guidance training for employees
who use wheelchairs.
In addition, the headquarters and Foster Transportations Ltd. conducted desktop training, assuming that a disaster had
occurred in the area of the headquarters. Foster Micro Acoustic Company visited the Shizuoka Prefecture Earthquake
Disaster Prevention Center to implement the disaster prevention experience program, etc. and undergo more expert
learning with the aim of enhancing disaster prevention measures.

Fire drill (headquarters in Japan)

BCP practice (Japan, Foster Transportations Ltd.)

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 regularbasis to improve our employees' awareness of disaster prevention.

Fire drill (China)

Emergency aid drill (China)

Fire drill (Vietnam)

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

39

Governance

Information Security and Personal
Information Protection
Policies
Foster Electric Co., Ltd. and its subsidiaries (hereinafter referred to as the Group) recognize the importance of securing
the trust of customers, suppliers, shareholders, employees and other stakeholders based on its corporate creed of“Sincerity.” Appropriate management of information assets is an important part of the management agenda.
To appropriately protect and handle the information assets possessed by the 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■ Information Security Policies:
https://www.foster-electric.com/security/index.html

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

Chief Executive

Chairperson

Task force

Committee
memberCommittee
memberCommittee
memberCommittee
memberVice Chairperson

Secretariat

Information security auditor

Information Security Committee

Chief of Secretariat
Secretariat at
the headquarters

Secretariat at
each site

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

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

Governance40

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

Outline of Supply Chain
We trade with approximately 500 suppliers, 67% of which are in China. The machined parts industry accounts for 82%
of all business sectors. Companies in the Foster Group promote CSR procurement in cooperation with the suppliers.
Trade status (by region)

Electronics 2%

Others
10%

ASEAN
23%

China

Trade status (by business sector)
Raw materials
16%

China
67%

ASEAN
ASEAN

OthersProcessed items
82%

ProcessedRawmaterials
Electronics
Processeditems
RawmaterialsElectronics

Management System
The Foster Group recognizes that the CSR procurement throughout its entire supply chain management is essential
for performing material procurement activities that contribute to corporate value improvement. To this end, we haveestablished the Foster Group Supplier CSR Code of Conduct.
Based on this standard, we distribute CSR-related questionnaires and CSR SAQ to our suppliers and ask them to confirm
their implementation status for CSR initiatives.
Since fiscal 2016, we have been participating in the supply chain subcommittee of the Global Compact Network Japan(GCNJ) and have discussed practical issues in the CSR procurement activities at each company. To solve those issues,
we are implementing development and revision of the Self-Assessment Questionnaire (SAQ) and other product creation
activities. In fiscal 2017, we conducted a survey using the SAQ developed by the subcommittee for all our relevant
suppliers. We received replies from 91% of them, and the average number of points for the entire company was 86 points(out of 100 points). Also, it was discovered that many of our suppliers considered CSR to be a social trend and actively
worked on it.
As a feedback of response results, we not only sent a comprehensive evaluation, but also a corrective action plan tosuppliers who need them for each field item, which described the analysis results and the items that required improvement,
to encourage them to implement the activities in the future. The rate of the suppliers that needed correction in fiscal 2018
was 6.1% of the entire company.

41

Governance

Basic Principles of Procurement
In its global expansion, the Foster Group has developed the “Basic Principles of Procurement” for the supply chain,including the Group and its suppliers, based on which it builds fair and healthy relationships.
Basic Policy on Purchasing: “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 businessactivities, and will conduct purchasing duties in accordance with social ethics.
We will not accept gifts, entertainment, etc. in accordance with our Norms on Employee Conduct.
2.Fairness and Impartiality
We will keep our doors open and provide equal opportunities to all businesses, and will evaluate and select supplierswith impartiality based on reasonable criteria.
3.CSR Procurement
We will promote CSR procurement in accordance with our Norms on CSR Conduct for Foster Suppliers.
4. Partnerships
We will endeavor to deepen mutual understanding with our suppliers and build bonds of trust with them.
5. Confidentiality
We will strictly manage confidential information that comes into our knowledge in doing business.

Supplier Selection and Evaluation
The Foster Group sets the implementation of CSR activities as a business condition when selecting suppliers. We ask
the suppliers to agree to the Foster Group Supplier CSR Code of Conduct and reply to the SAQ (Self Assessment
Questionnaire). We conclude a basic transaction agreement containing CSR requirements with the suppliers before
starting trade with them.
We also conduct SAQs for the existing suppliers, check the implementation status of corrective and improvement actions
and provide educational activities for them.

Sustainability
The Foster Group is implementing procurement activities while taking the perspective of sustainability into consideration
to respond to the global progress of our procurement activities and risks in value chain expansion.
Green Procurement
The Group has established the Green Procurement Standard, which governs the chemical substances contained in
procured parts and raw materials, and is making efforts to ensure the procurement of materials that comply with nationaland regional laws as well as customer requirements.
Reduction in Energy Consumption
To reduce energy consumption in supply chains, we are working to procure energy from nearer production sites byreviewing the purchase route from each site to use an appropriate route, and we are asking each supplier to cooperate,
such as through the transfer of manufacturing plants. This has resulted in reduced energy consumption (CO2 reduction)and increased purchases from local suppliers (local production for local consumption). In addition, to reduce unexpecteddisaster risks, we are promoting Business Continuity Plan (BCP) activities via the distribution of suppliers. The CO2
reduction in fiscal 2018 was approximately 20,000 kg-CO2 (Scope 3 converted value).

Representatives and Structures
The Procurement Department belongs to the Production Division and performs 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 CSR activities in cooperation with each manufacturing site and business division. We check the PDCA
cycle, share future issues and take appropriate actions at CSR Committee Meeting (held monthly), Global Procurement
Meeting held by the representatives of the Procurement Department from all sites (held annually) and the Supplier
Procurement Conference, in which our president and other directors participate (held once every two years).

Governance42

Conflict Minerals Investigations
According to the Dodd-Frank Wall Street Reform and Consumer Protection Act
in the U.S., which was established in July 2010, illegal mining and smuggling ofminerals by armed forces/groups in the Democratic Republic of the Congo and its
surrounding countries not only provide a source of funding for these groups, thereby
deepening the conflict, but also lead to forced labor, human-rights violations andother issues. It is being demanded that companies that use mineral resources
should take responsibility for the problem. The Foster Group has established a
Basic Policy on Conflict Minerals and conducts investigations into the related
production areas and distribution processes to ensure that the relevant minerals
will not become their source of funding.
In fiscal 2018, we achieved a 99% response rate for investigations into conflictminerals carried out on all the applicable suppliers. We also started someinvestigations on cobalt and mica in 2018, and established the investigation
structure. With respect to existing relevant materials, the Group will continue to
conduct detailed investigations as the refinery certification status changes (addition
or deletion) and work to eliminate any procurement of minerals if it is clarified thatthose are related to armed forces.
Details can be viewed on our website:
https://www.foster-electric.com/procurement/csr.html

Global supply meeting

Supply chain subcommittee of the GCNJ

43

Corporate Profile and Financial Information
The Group operates 44 bases in 15 countries and regions worldwide as bases for development, manufacturing and sales bases.
We have established a sophisticated production system integrating processes from components manufacturing to finished goods manufacturing.

Group Companies

Sales/Development Bases

Sales Bases

Manufacturing Bases

OthersEUROPE

3

bases

JAPAN

9

bases

AMERICAS

8

bases

ASIA
(excluding Japan)

Group Companies

The Group operates 44 bases in 15 countries and regions worldwide as bases for development, manufacturing and sales bases.
bases
We have established a sophisticated production
system integrating processes from components manufacturing to finished goods manufacturing.

24

Sales/Development Bases

Sales Bases

Manufacturing BasesEUROPE ASIA (excluding Japan)

JAPAN

Total number of shares authorizedCompany Name Foster Electric Company, Limited

3

FOSTER ELECTRIC CO., LTD.
Founded(HEADQUARTERS)June 20, 1949 bases

FOSTER ELECTRIC CO., (HONG KONG) LTD.
GUANGZHOU PANYU JIU SHUI KENG
FOSTER ELECTRIC FACTORY * Outsourcee

KANSAISALES¥6,770,360,135
OFFICE
CommonStock

Listed on the First Section of the Tokyo Stock Exchange

FOSTER ELECTRIC CO., (GUANGZHOU) LTD.

IGA WAREHOUSE

1-1-109, Tsutsujigaoka, Akishima
City, Tokyo,
NANJING BRANCH
196-8550, JapanFOSTER
ELECTRICFOSTER MICROACOUSTICCOMPANY
Phone:+81-42-546-2311 (switchboard) CO., (NANNING) LTD.
FOSTEX COMPANY

Headquarters

FOSTER ELECTRIC CO., (HEYUAN) LTD.
FOSTER
Numberof TRANSPORTATIONS
25,601; LTD.
employees
Numberin Panyu,
China.
FOSTER TRADING
CO., (HONG
KONG) LTD.
FOSTER ELECTRONICS
LTD. includes our outsourcee

URLFOSTER KIGYOU https://www.foster-electric.com/
FOSTER ELECTRIC CO., (TAIWAN) LTD.
KABUSHIKI KAISHA
ESTec JAPAN CORPORATIONFOSTER ELECTRIC (SINGAPORE) PTE. LTD.

of June 20, 2019)ASIA
Directors and Corporate Auditors
PENANG(AsOFFICE(excluding Japan)

PT FOSTER
INDONESIA
Senior Executive
OfficerELECTRIC
Terushige
Nagasawa
Hiromi Yoshizawa
FOSTEROfficer
ELECTRIC
IPO (THAILAND)
Senior Executive
TakuroYamaguchiLTD.bases
Senior Managing Director Atsushi Narikawa
Senior Executive
FOSTEROfficer
ELECTRIC(THILAWA)
CO., LTD.
Masatoshi
KohamaSenior Managing Director Lu San Tie
Senior Executive Officer Tatsuhito Tanaka
Managing Director Kazuhiro Kishi
Senior Executive Officer Ryoji Otowa
Director
Hidetoshi
ShirakawaCompany
Information
Executive Officer Yasuhide Takahara
Director*1
MatsumotoCompany Minoru
Profile(As of March Executive
31, 2019)Officer Naoki Kanai
Director*1
Chieko Matsuda
Executive
Officer Yuji Harada
Company Name Foster Electric Company, LimitedStanding Corporate Auditor Tsutomu Inokuma
Executive Officer Hiroki Miura
FoundedJune 20, 1949
Corporate Auditor*2 Takuma Ino
Executive Officer Yuji Sakuta*2¥6,770,360,135
Corporate
AuditorCommon StockTakashi Suzuki
Executive Officer Roy Ching-Sheng Chen
Listed on the First Section of the Tokyo
Stock Exchange
Corporate Auditor*2 Yasuhiro Goto
Executive Officer Oh In-Yong

President and Representative Director

Others24

1-1-109, Tsutsujigaoka, Akishima City, Tokyo,*1 Minoru Matsumoto and Chieko Matsuda are Independent Directors.
Headquarters
196-8550, Japan*2 Takuma Ino, Takashi Suzuki and Yasuhiro Goto are Independent Corporate Auditors.

Phone:+81-42-546-2311 (switchboard)

NumberofInformationfor Shareholders
25,601;
employees
Numberincludes our outsourcee in Panyu, China.
Fiscal Year
From April 1 to March 31 of each year
URL General
https://www.foster-electric.com/
Ordinary
June of each year
Meeting of Shareholders
General Meetingof Shareholders:31
Directors andOrdinary
Corporate
Auditors(As of JuneMarch
20, 2019)
Record dateYear-end dividends: March 31
Interim dividends: September 30
Senior Executive Officer Terushige Nagasawa
President and Representative Director Hiromi Yoshizawa
Number of Unit (“tangen”) Shares 100
Senior Executive Officer Takuro Yamaguchi
Senior Managing Director Atsushi Narikawa
Stock Transfer Agency Department, Head Office ofTransfer Agent
SeniorCo.,
Executive
MizuhoLtd.Officer Masatoshi Kohama
Senior Managing
Tie Trust & Banking
Transfer
AgentDirector
BranchLu San
1-2-1, Yaesu, Chuo-ku,
SeniorTokyo
Executive Officer Tatsuhito Tanaka
Managing Director Kazuhiro Kishi(daily newspaper) issued in theMedia for Public Notice Nihon Keizai ShimbunSenior
Executive Officer Ryoji Otowa
Metropolisof Tokyo
Director
Hidetoshi
Shirakawa

AMERICAS

Distribution of Shareholders by Shareholder TypeFOSTER
ELECTRIC
to be issued
by the(VIETNAM)
Company: CO., LTD.

FOSTER ELECTRIC(U.S.A.), INC.
Financial
Individuals andForeign entities, etc. institutions
FOSTER ELECTRIC (DANANG) CO., LTD.
DETROIT OFFICE
80,000,000
shares
JAPAN

37.7%

FOSTER ELECTRIC (QUANG NGAI) CO., LTD.
Total
number of shares issued:

9 26,000,000

FOSTER ELECTRIC (BAC
NINH) CO., LTD.
bases
shares17.7%

SAN JOSE OFFICE

Securities companies 1.7%

Number of shareholders:

6,690

EL PASO OPERATIONSLOS ANGELES OFFICEFSK (THAILAND) CO., LTD.
ESTec CORPORATION

others37.1%

BOSTON OFFICE

Domestic corporations, etc. 5.8%

ESTec ELECTRONICS (JIAXING) CO., LTD.

Thomas KL Indústriade Altotreasury
Falantes
S.A.
*Excluding
stock

AMERICAS
ESTec AMERICACORPORATION

ESTec VINA CO., LTD.

Major Shareholders

ESTec PHU THO CO., LTD.
ESTec ELECTRONICSShareholder’s(M) SDN. BHD.
Name EUROPE

8

bases
Number of

Ratio of
Shares Held Shares Held(Thousands)
FOSTER ELECTRIC(EUROPE) GmbH (%)

ESTec CORPORATION (CAMBODIA) LTD.

The Master Trust Bank of Japan, Ltd. (trustMUNICH
account)
OFFICE 1,660

7.3Japan Trustee Services Bank, Ltd. (trust SWEDEN
account)
OFFICE 1,284

5.6

Mizuho Bank, Ltd.

1,016

4.4

MUFG Bank, Ltd.

945

4.1

Japan Trustee Services Bank, Ltd. (trust account 9)

753

3.3

Stock Information

Status of Shares(As of March 31, 2019)
GOVERNMENTOF NORWAY

695
3.0
Total number of shares authorized Distribution of Shareholders by Shareholder TypeDFA INTL SMALL CAP VALUE
PORTFOLIO
502
2.2
to be issued by the Company:

Financial

Foreign entities, etc. institutions
Japan
Trustee Services
458
80,000,000
sharesBank, Ltd. (trust account 5)

37.7%

J.P.Total
MorganS.A. 1300000
number ofBanksharesLuxembourg
issued:Showa
Aircraft Industry
26,000,000
shares Co., Ltd.

37.1%

453

Individuals andothers
2.0
17.7%

446

1.9

1.9

Treasury stock (3,281,977 shares) is excluded for the calculation of the “Ratio of Shares Held.”
Securities companies 1.7%
Number of shareholders:

6,690

Domestic corporations, etc. 5.8%
*Excluding treasury stock

Inquiries for Handling of Stocks
Major Shareholders

Shareholders who have an
The securities company with which you haveaccount at a securities company
a business connection
Number of
Ratio of
Shareholder’sName
Shareholders who have a special
account
Stock
Transfer Agency Department,Shares
MizuhoHeld
Trust &Shares Held(Thousands)(%)*Shareholders are not allowed to make any
Banking Co., Ltd.
stock transactions other than the purchase of
2-8-4, Izumi, Suginami-ku, Tokyo, 168-8507, JapanTheBank of Japan,
Ltd. (trust(toll-freeaccount)
7.3
shareslessMasterthan one unitTrust(“tangen”).
Tel: 0120-288-324
telephone1,660
service in Japan)
Head office and branches nationwide of Mizuho
Payment
unpaid dividends
Japanof Trustee
Services Bank,
Ltd.
(trustaccount)
1,284
5.6
Trust & Banking Co., Ltd., and Mizuho Bank, Ltd.

Mizuho Bank, Ltd.

1,016

4.4

MUFG Bank, Ltd.

945

4.1

Japan Trustee Services Bank, Ltd. (trust account 9)753
3.3
Yasuhide Takahara
Director*1
Minoru Matsumoto
Executive Officer
NaokiSystem
Kanai
Informationon
Individual
Numberrelating
tostocks
GOVERNMENTOF NORWAY
695
3.0
*1
Director
Chieko Matsuda
Executive
Yuji HaradaYour Individual Number notified
by Officer
your local
government is required forDFA
tax INTL
procedures
relating
to stocks.
For this reason, shareholders
SMALL
CAP
VALUE
PORTFOLIO
502
2.2
Standing Corporate Auditor
Tsutomumust
notify Inokuma
their stockbrokersof theirIndividual
Numbers.
Executive
Officer
Hiroki Miura
*2
458
2.0
Corporate Auditor
TakumaIno
Contact
Information
for Inquiries
about
Number Notifications Japan Trustee Services Bank, Ltd. (trust account 5)
Executive
OfficerIndividual
Yuji Sakuta
your sharesa securities
stockbroker:
Pleasecontact yourbroker.
Corporate Auditor*2 If Takashi
Suzuki are in an accountMorgan Bank
Luxembourg
S.A.
1300000
453
1.9
Executive managed
Officer Royby
Ching-Sheng
Chen company orJ.P.
If your shares are not managed through a securities company or stockbroker:
Corporate Auditor*2 Yasuhiro Goto
Executive Officer Oh In-YongShowaTrust
AircraftIndustry
Co.,
Ltd. Tel: 0120-84-0178
446
1.9
Stock Transfer Agency Department, Mizuho& Banking
Co.,
Ltd.

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

Treasury stock (3,281,977 shares) is excluded for the calculation of the “Ratio of Shares Held.”Information for Shareholders
Fiscal Year
Ordinary General
Meeting of Shareholders
Record date

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

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

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

Corporate
Information
T h i Profiles r e p r o andd u c t iFinancial
on to be mo d e l r e l e a s e d i44ncommemoration of the 70th anniversary of Foster
Electric uses an alnico magnet with the magnetic
circuit structure replicated in a modern arrangement.
While it retains the original’s classical styling, thisspecial unit uses our proprietary 2-layer ES cone
paper and low-distortion magnetic circuit.

Financial Highlights
Consolidated Performance for the Fiscal Year ended March 31, 2019https://www.fostex.jp/

Net sales

Operating income¥140,303 million(down¥3,937 million

24.1 % y-o-y)(down

Net assets¥66,792 million at the end of previous FY)

Net loss attributable to owners of the parent¥4,318 million

57.7 % y-o-y)(down¥(2,026) million

52.3 % y-o-y)(Net income of¥4,265 million in previous FY)

Wireless Speaker System

Total assets

Net loss per share

Net assets per share
KOTORI 501

Equity ratio

The new speaker grill lineup offers 12 designs, using carefully selectedfabrics that do not damage sound quality. The speaker grills% can beeasily swapped with the use of magnets.
(Net income of ¥165.78 in previous FY)(¥2,412.06 at the end of previous FY)(61.5% at the end of previous FY)
They feature patterned prints that can create stylish atmospheres
tailored to users’ lifestyles.

¥59,294 million ¥91,271 million(

Ordinary income¥(83.21)¥100,870 million at the end of previous FY)(¥2,404.10

59.5

http://kotori.fostex.jp/

Overview3 by Segment (Consolidated)

010_0727302981906.indd

Speaker Segment
Net
sales

¥70,403 million

2019/06/19

Mobile Audio Segment
50.1%(down 6.8% y-o-y)

For car speakers and speaker systems, the sales
volume of premium brand products for somecustomers declined. Shipments of audio/visual
speakers and speaker systems were generally inline with our plan.

Net
sales

¥63,851 million

13:54:53

Other Segment
45.5%(down 38.3% y-o-y)

The sales volume and prices of headsets for a major
customer declined.

Net
sales

¥6,224 million

4.4%(up 5.7% y-o-y)

Net sales in this segment, including micro acoustic
components and “FOSTEX” brand products, slightly
increased.

*The above includes inter-segment sales.

010_0727302981906.indd

4

2019/06/19

13:55:09

45

Corporate History

Corporate History

46

47

External Recognition

External Recognition[Japan]
New Diversity Management Selection 100 (fiscal 2017)
March 2018: Recognized for our activities to promote diversity
and achieve work-life balance, we were selected as one of thewinners 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 andis free from restrictions such as time and place, we have introduced the work-at-homeprogram and implemented initiatives to establish the environment. Evaluated for suchactivities, we were selected as one of the winners of the Top 100 Telework Pioneers (2019)by the Ministry of Internal Affairs and Communications.

Certification of Excellent Company in Health: Gold
December 2018: Highly evaluated for our active initiatives torealize healthy management, we received the Certification of
Excellent Company in Health: Gold from the Tokyo Promotion
Council for Healthy Company Declaration. As of December
2018, more than 1,400 companies have participated, and 13
companies including the Group received the certification in theGold category.

2019 Health and Productivity Management Outstanding Organizations (White 500)
March 2019: Recognized for our excellent initiatives that consider employee’s health from the
management perspective and practice it strategically, we were certified as one of the winnersof the 2019 Health and Productivity Management Outstanding Organizations (White 500) by
the Ministry of Economy, Trade and Industry and the Nippon Kenko Kaigi.

Selected as one of the S&P/JPX Carbon Efficient Indices by the Government
Pension Investment Fund (GPIF)
September 2018: We were selected as one of the ESG indices; S&P/JPX Carbon EfficientIndex (evaluated based on the disclosure status and results of CO2 emissions data), whose
operation was started by the GPIF in 2018.

Added to SNAM Sustainability Index (fiscal 2018)
February 2019: We have been added to the SNAM Sustainability Index (Selected by placing
weight on the ESG evaluation by rating firms), whose operation was started by Sompo
Japan Nipponkoa Asset Management (SNAM) in August 2012, for the third consecutive year.

External Recognition

48[Overseas]
GlobalEcovadis Silver Ranking
February 2019: We received a Silver ranking (top 30%) from Ecovadis, France for the CSR assessment to evaluate
suppliers.

Vietnam
FOSTER ELECTRIC (VIETNAM) CO., LTD.
Awarded by the Prime Minister of Vietnam as a company that contributed toVietnamese economy
November 2018: At the “Conference on 30 Years of FDI Attraction”, held by the governmentof Vietnam in commemoration of the 30th anniversary of foreign investment attraction, wewere awarded by the Prime Minister of Vietnam as a company that contributed to theirpromotion of foreign investment.

FOSTER ELECTRIC (DANANG) CO., LTD.
Certified as one of the Top 50 Energy Saving Companies 2018 by the Department ofIndustry and Trade of Da Nang City and the Da Nang Power Company, Ltd.
November 2018: We achieved the electric energy saving target of 5% in power consumption(compared to 2017) in the third quarter of fiscal 2018 and were certified as one of the Top 50
Energy Saving Companies 2018 by the Department of Industry and Trade of Da Nang Cityand the Da Nang Power Company, Ltd.
Awarded for our contribution to the promotion of Vietnamese business community
development
March 2019: Evaluated for our excellent achievements in our manufacturing and businessactivities in 2018, and our contribution to the Vietnamese business community, we wereawarded by the Chairman of Vietnam Chamber of Commerce – Da Nang.

FOSTER ELECTRIC (QUANG NGAI) CO., LTD.
Awarded for our excellent social and family friendly businesses by the Labor Unionof Quang Ngai Province in Vietnam
December 2018: Evaluated for our excellent social and family friendly businesses, we wereawarded by the Executive Committee of the Labor Union of Quang Ngai Province.
Awarded for our excellent social security program and health insurance policy byViet Nam Social Security
December 2018: Evaluated for our excellent achievements in the social security programand health insurance plan, we were awarded by the general director of Viet Nam Social
Security.

China
GUANGZHOU PANYU JIU SHUI KENG FOSTER ELECTRIC
FACTORY
Commended for our establishment of a compliance structure
February 2018: Evaluated for our corporate management based on the Compliance
Structure Regulations, we were commended as a model company by six organizations,
including the Guangdong Legal Promotion Office and the Guangdong Ministry of Legal
Affairs.

49

Data Table

Economic Data
201-2 Financial implications and other risks and opportunities due to climate change
Costs for measures taken to manage risks and opportunities - Total environmental protection expenditures and investments by category
Environmental preservation cost (classified by business operations)
Location

Category

Key activity and the outcome

Investment(Unit: one
thousand yen)

Cost
(Unit: one
thousand yen)

026,384(1) Business area cost

Breakdown

Japan

FOSTER ELECTRIC
CO., LTD.
(Headquarters)(1)-1 Pollution prevention costs

Air and water control-related prevention countermeasures0752(1)-2 Global environmental conservation costs

Prevention of global warming, as well as energy-saving measures0631(1)-3 Resource circulation costs

Waste disposal and recycling

0

25,000(2) Upstream/downstream cost

Green purchasing expenses

00(3) Administration costs

Environmental education,
EMS construction expenses etc.

0

7,174

(4) R&D costs

Research and development etc.

01,579,501

0

646

0

0

0

1,613,704(5) Social activity costs

Tree planting etc.

(6) Environmental damage handling costs
Total* “ Investment” refers to equipment investments for the purpose of environmental conservation. “Cost” refers to personnel and miscellaneous expenses/costs incurred forenvironmental conservation activities.

202-1 Ratios of standard entry level wage by gender compared to local minimum wage
Ratio (%)
The same ratio for male andfemaleLocation*1
Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
FOSTER TRANSPORTATIONS LTD., FOSTER ELECTRONICS LTD.

155

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

158

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

100

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

100

North America

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

152

EuropeFOSTER ELECTRIC (EUROPE) GmbH and group companies

100

Japan

Asia

*1 Significant locations of operations: The headquarters and 11 main sites that are checked based on J-SOX internal control framework.

202-2 Proportion of senior management*1 hired from the local community*2
Location*3

Ratio (%)

Japan

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

100

Overseas

11 Significant locations of operations90*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 11 main sites whose operation processes are to be checked based on the J-SOX.

204-1 Proportion of spending on local suppliers
Location*1

Content

Ratio*2 (%)

All procurement sites in China

Local procurement rate of materials in China

82

All procurement sites in ASEAN

Local procurement rate of materials in Vietnam, Indonesia, and Myanmar

54*1 Local / Significant locations of operation: The above-mentioned areas where Foster’s manufacturing sites reside.
*2 An index that indicates the trade amount with corporate bodies in the targeted site, out of the material procurement trades.

205-1 Operations assessed for risks related to corruption
Location
Domestic and overseas
companies

Domestic and overseas locations of operations

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

Total number of operations
13

Ratio (%)
68

50

Data Table
205-2 Communication and training about anti-corruption policies and procedures
Total number and ratio of notifications on anti-corruption
related organizations policies and procedures.
Location

Governance body members
Total

Ratio (%)

Japan

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

32

100

Overseas

All overseas companies

78

82

Environmental data
301-2 Recycled input materials used
Location
Overseas

Ratio (%)

All procurement sites (China/Vietnam/Myanmar)

16* Recycled material ratio of all resin materials purchased.

302-1 Energy consumption within the organization
Purchased
Electricity(MWh)

Location
Japan

Asia

North
America

Gasoline(liter)Diesel Fuel(liter)LPG(liter)Natural Gas(liter)Total Fuel
Consumption in the
Organization (MWh)City Gas(m3)

FOSTER ELECTRIC CO., LTD. (Headquarters)

2,117

9,346

0

0

0

13,604

2,376

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

39,534

71,58912,074029,851040,709FOSTER ELECTRIC CO., (NANNING) LTD.

10,99535,200

9,400

0

0

0

11,432

FOSTER ELECTRIC CO., (HEYUAN) LTD.

17,45053,584

20,330079,122

0

19,134

FOSTER ELECTRIC (VIETNAM) CO., LTD.

16,83429,337

7,722

59,3280

0

18,034

FOSTER ELECTRIC (DA NANG) CO., LTD.

5,775

11,078

4,245

26,201

0

0

6,295

FOSTER ELECTRIC (QUANG NGAI) CO., LTD.

3,131

3,627

275

20,258

0

0

3,455

FOSTER ELECTRIC (BAC NINH) CO., LTD.

19,22534,1682,095

51,8670020,307PT FOSTER ELECTRIC INDONESIA

3,400

5,953

5,112

5,628

0

0

3,590

FOSTER ELECTRIC (THILAWA) CO., LTD.

7,97810,62915,460

0

0

0

8,242

437

1,003

0

97

0

74,157

1,371

126,874

265,51476,713

163,378

108,973

87,761

134,944

FOSTER ELECTRIC (U.S.A.), INC. (EL PASO OPERATIONS)
Total* Calorific Value (Fuel): Japan/Overseas: Factor based on the “Greenhouse gas emissions calculation and report manual” released by the Ministry of Environment, Ministry of Economy, Tradeand Industry.

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
Category

2012

2013

2014

2015

2016

2017

2018

Scope1(Direct greenhouse gas emission from business activities)(Unit: t-CO2)

2,198

2,403

2,431

2,155

2,549

2,381

1,745

Scope2(Indirect greenhouse gas emission due to energy usage frombusiness activities)(Unit: t-CO2)

87,232

91,54588,56886,66888,32887,82871,122

Scope1+2 total(Unit: t-CO2)

89,43093,94890,99988,82390,877

90,20972,868Per sales unit

(Unit: t-CO2/100 Million yen）

62.3

56.6

48.1

46.5

56.4

48.8

51.9

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

51

Data Table

305-3 Other indirect (Scope 3) GHG emissions
Category

Emissions (t-CO2)

1. Purchased goods and services

272,758

2. Capital goods

Upstreamcategories

Downstream
categories

575

3. Fuel- and energy-related activities (not included in Scope 1 or Scope 2)4,777

4. Upstream transportation and distribution

25,014

5. Waste generated in operations

3,104

6. Business travel612

7. Employee commuting

180

9. Downstream transportation and distribution

3,225

11. Use of sold products

74,357

12. End-of-life treatment of sold products

5,147

Total

389,748

Coverage: Foster Electric Co., Ltd. (headquarters), 2 domestic sites and 13 overseas sites

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

Asia

Total water
consumption(Unit: m3)

Water discharge(Unit: m3)

FOSTER ELECTRIC CO., LTD. (Headquarters)

10,394

9,874

520

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

540,157

486,141

54,016

FOSTER ELECTRIC CO., (NANNING) LTD.

71,56257,25014,312

FOSTER ELECTRIC CO., (HEYUAN) LTD.

278,213

222,570

55,643

FOSTER ELECTRIC (VIETNAM) CO., LTD.

184,830

147,864

36,966

FOSTER ELECTRIC (DA NANG) CO., LTD.

51,48941,191

10,298FOSTER ELECTRIC (QUANG NGAI) CO., LTD.

18,23914,591

3,648

FOSTER ELECTRIC (BAC NINH) CO., LTD.

81,734

66,827

14,907PT FOSTER ELECTRIC INDONESIA

8,540

6,832

1,708

120,331

96,26524,066

2,348

1,878

470

1,367,837

1,151,283

216,554

FOSTER ELECTRIC (THILAWA) CO., LTD.
North
America

Water withdrawal(Unit: m3)

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

Category

Total water
consumption(Unit: m3)

Water discharge(Unit: m3)

Water withdrawal(Unit: m3)

Surface water

-

-

-

Groundwater

-

-

-

Seawater---

Produced water

-

-

-

Third-party water

1,367,837

1,151,283

216,554

1,367,837

1,151,283

216,554

Total

52

Data Table
306-2 Waste by type and disposal method
Hazardous waste (Unit: ton)

Location
Japan

Asia

North
America

Total waste

Non-hazardous waste (Unit: ton)

Recycling

Landfill

Total waste

Recycling

Landfill

FOSTER ELECTRIC CO., LTD. (Headquarters)

0.20

0.00

0.20

207.4091.06

116.34GUANGZHOU PANYU JIU SHUI KENG FOSTER ELECTRIC
FACTORY (*outsourcee)

62.00

0.00

62.00

968.00944.63

23.37

FOSTER ELECTRIC CO., (NANNING) LTD.

35.20

0.00

35.20

146.000.00

146.00

FOSTER ELECTRIC CO., (HEYUAN) LTD.

54.00

0.00

54.00

330.57278.0052.57

FOSTER ELECTRIC (VIETNAM) CO., LTD.

105.04

14.49

90.55

807.74657.45150.29FOSTER ELECTRIC (DA NANG) CO., LTD.

92.72

6.74

85.98

331.14240.0091.14

FOSTER ELECTRIC (QUANG NGAI) CO., LTD.

23.21

1.91

21.30

154.91

82.34

72.57

FOSTER ELECTRIC (BAC NINH) CO., LTD.

69.50

52.70

16.80

969.30610.80358.50PT FOSTER ELECTRIC INDONESIA

74.07

0.00

74.07

86.90

0.00

86.90

FOSTER ELECTRIC (THILAWA) CO., LTD.

5.14

0.00

5.14

49.40

3.10

46.30

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

0.04

0.00

0.04

385.40259.40126.00521.1275.84

445.284,436.76

3,166.78

1,269.98

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 and overseas companies

Ratio (%)

All procurement sites

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

Social data
401-1 New employee hires and employee turnover
New employee hires (person)
Location

By gender
Male

Japan

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

Overseas

All overseas sites

By age group

FemaleTotal

Age under 30

Age 30 - 50

Age over 50

Total

34

21

55

17

29

9

55

1,840

4,925

6,765

5,171

1,591

3

6,765

Employee turnover (person)
Location

By gender
Male

Japan

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

Overseas

All overseas sites

By age group

FemaleTotal

Age under 30

Age 30 - 50

Age over 50

Total

51

9

60

10

24

26

60

3,457

22,88026,337

15,447

10,811

79

26,337401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees
Location*1

BenefitsJapan

FOSTER ELECTRIC CO., LTD. (Headquarters)

Retirement provision

Overseas

11 Significant locations of operations

Life insurance, health care, disability and invalidity coverage, parental leave, requirement provision etc.

*1 Significant locations of operations: The headquarters and 11 main sites that are checked based on J-SOX internal control framework.

53

Data Table

401-3 Parental leave
Total number of employees that were entitled to / took parental leave
Location

Total number of employees that were entitled toparental leave*1
MaleFemaleTotal number of employees that took parental leave*2

Total

Male

Female

Total

Japan

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

17

5

22

5

5

10

Overseas

All overseas sites

259

3,565

3,824

255

2,963

3,218

Return to work rate / Retention rate
Location

Total number of employees due to and did return towork after parental leave
Male

Japan

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

Overseas

All overseas sites

Female4

LocationJapan
Overseas

All overseas sites

Male

1,798

FemaleFemale

4

100

2,005

96

Total number of employees that returned to work
after parental leave ended that were still employed 12months after their return to work
Male

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

Total

N/A*3

207

Return to work rate for employees due to return towork after taking parental leave (%)
Total

N/A*3

100
97

97

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

Total

Male

Female

Total

1

4

5

100

100

100

147

1,421

1,568

53

49

50

*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*3 During the report period, due to the ongoing parental leave, there was no employees who planned to return to work among those who were on the parental leave.

403-9 Work-related injuries
a. For all employees

Location

i. The number and rate offatalities as a result of workrelated injury
Fatalities

Rate

ii. The number and rate ofhigh-consequence work-related
injuries (excluding fatalities)
Injuries*1

Rateiii. The number and rate ofrecordable work-related injuries
Injuries*2

Rate

v. The number ofhours worked

*3

Japan

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

0

0.00

0

0.00

2

1.61

1,244,382

Overseas

All overseas sites

0

0.00

0

0.00

84

1.58

53,053,768

iv. The main types of work-related injury

Back pain / Wound / Sprain / Blow / Fracture* There were no fatalities or injuries for “b. workers who are not employees but whose work and/or workplace is controlled by the organization.”
Number of fatalities as a result of work-related injury x 1,000,000
Number of hours worked*1 Rate of fatalities as a result of work-related injury =*2 Rate of high-consequence work-related injuries (excluding fatalities) =Number of high-consequence work-related injuries (excluding fatalities) x 1,000,000
Number of hours worked
Number of recordable work-related injuries x 1,000,000
Number of hours worked*3 Rate of recordable work-related injuries =403-10 Work-related ill healthb. For all workers who are not employees
but whose work and/or workplace is controlled
by the organizationa. For all employees

Location

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

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

0

0

0

0

Overseas

All overseas sites

0

0

0

0

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

N/A

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

Average hours of training (hours)
Male

FemaleManagement

GeneralJapan

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

13.19

15.02

10.59

14.47

Overseas

All overseas sites

9.51

10.23

7.34

10.24

Data Table

54

404-3 Percentage of employees receiving regular performance and career development reviews
Ratio (%)
Location
Male

FemaleManagement

GeneralJapan

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

96

94

93

98

Overseas

All overseas sites

56

25

66

29

405-1 Diversity of governance bodies and employees
Diversity of governance bodies
Ratio (%)
Location
Age under 30

Age 30 - 50

Age over 50

Japan

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

0

3

97

Overseas

All overseas sites

0

32

68

405-2 Ratio of basic salary and remuneration of women to men
Ratio of the basic salary and remuneration of women to men for each employee category, by significant locations of operation.
Ratio (%)
LocationManagement

GeneralJapan

FOSTER ELECTRIC CO., LTD. (Headquarters)

100

100

Overseas

11 Significant locations of operations

100

100

* Significant locations of operations: The headquarters and 11 main sites that are checked based on J-SOX internal control framework.

410-1 Security personnel trained in human rights policies or procedures
Security personnel
Location
Total personnel
Japan

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

Overseas

All overseas sites

Ratio (%)

Trained personnel
5

5

100

226

209

92

* The above includes employees from third party organizations.

412-2 Employee training on human rights policies or procedures
Employee training
Location
Total hours (hours)
Japan

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

Overseas

All overseas sites

Employee ratio (%)

472

42

89,08923414-1 New suppliers that were screened using social criteria
Percentage of new suppliers that agreed to Foster’s CSR procurement criteria
Location
Domestic and overseas companies

Ratio (%)
All procurement sites

100

Percentage of replies received from new suppliers that agreed to CSR procurement based on the Foster’s Code of Conduct418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data
Total number of substantiated complaints received
concerning breaches of customer privacy
Complaints received fromoutside parties andsubstantiated by theorganization

Location

Domestic and overseas companies

All the domestic andoverseas companies

0

Total number of identified
leaks, thefts, or losses ofcustomer data

Complaints from
regulatory bodies

0

0

55

Data Table

GRI Standards Content Index
General Disclosures
ORGANIZATIONAL
PROFILEGRI
Standard
No.

Disclosure

Page Number / URL
P43-44

102-1

Name of the organization
P43-44

102-2

Activities, brands, products, and services
P43-44102-3

Location of headquarters
P43-44102-4Location of operations
P43-44

102-5

Ownership and legal form
P43-44102-6Markets served
P43-44

102-7

Scale of the organization-

Strategy

Supply Chain

102-10Significant changes to the organization and its supply chain

Corporate Profile and Financial
Information
 Securities Report (in Japanese)
Corporate Profile and Financial
Information
 Securities Report (in Japanese)
Corporate Profile and Financial
Information
 Securities Report (in Japanese)
Corporate Profile and Financial
Information
 Securities Report (in Japanese)- Securities Report (in Japanese)- Securities Report (in Japanese)
Environment
SocialGovernance Securities Report (in Japanese)

102-11

Precautionary Principle or approach

P13-18
P19-32
P33-42-102-12External initiatives

P5-12
P11

Foster Group CSR Management
United Nations Global Compact

102-13

Membership of associations

P11

United Nations Global Compact

102-14

Statement from senior decision-maker

P3-4

Top Message

102-15Key impacts, risks, and opportunities

P3-4-

Top Message
 Securities Report (in Japanese)

102-16

Values, principles, standards, and norms of behavior

P1-2-

Corporate Creed Corporate Action Guidelines Code of Conduct for Staff

102-17

Mechanisms for advice and concerns about ethics

P33-42Governance102-18Governance structure102-19Delegating authority

102-20

Ethics and integrity

GovernanceCorporate Profile and Financial
Information
 Securities Report (in Japanese)-

Information on employees and other workers

102-9

Corporate Profile and Financial
Information
 Securities Report (in Japanese)

Corporate Profile and Financial
Information
 Securities Report (in Japanese)

P43-44102-8

Corporate Profile and Financial
Information
 Securities Report (in Japanese)- Corporate Governance
Guidelines (in Japanese)

P33-42-Governance Corporate Governance
Guidelines (in Japanese)

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

P5-12

Foster Group CSR Management102-21

Consulting stakeholders on economic, environmental, andsocial topics

P5-12

Foster Group CSR Management102-22Composition of the highest governance body and its
committees-

 Securities Report (in Japanese) Corporate Governance
Guidelines (in Japanese)Data Table

56

General Disclosures

GRI
Standard
No.

Disclosure

Governance102-23Chair of the highest governance body- Securities Report (in Japanese)

102-24

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

102-25

Conflicts of interest-

 Corporate Governance
Guidelines (in Japanese)

102-26

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

P5-12

Foster Group CSR Management102-27

Collective knowledge of highest governance body

P5-12

Foster Group CSR Management102-28

Evaluating the highest governance body’s performanceP13-18
P19-32
P33-42-

Environment
SocialGovernance Securities Report (in Japanese)

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

P5-12

Foster Group CSR Management102-30Effectiveness of risk management processes

P5-12

Foster Group CSR Management102-31

Review of economic, environmental, and social topics

P5-12

Foster Group CSR Management102-32Highest governance body’s role in sustainability reporting

P5-12

Foster Group CSR Management102-33

Communicating critical concerns

P33-42Governance102-34Nature and total number of critical concerns-

Not applicable

102-35

Remuneration policies-

 Securities Report (in Japanese)

102-36

Process for determining remuneration-

 Securities Report (in Japanese)

102-37

Stakeholders’ involvement in remuneration-

 Securities Report (in Japanese)

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

102-39Percentage increase in annual total compensation ratio- Securities Report (in Japanese)

102-40

List of stakeholder groups

P7

Conceptual Drawing of CSR
Management102-41

Collective bargaining agreements

Stakeholder engagement

Page Number / URL-

 Securities Report (in Japanese)
Foster Group CSR Management
Governance102-42

Identifying and selecting stakeholders

P5-12
P33-42102-43

Approach to stakeholder engagement

P5-12
P33-42

Foster Group CSR Management
Governance102-44

Key topics and concerns raised

P5-12

Foster Group CSR Management

P43-44102-45

Entities included in the consolidated financial statements-

Corporate Profile and Financial
Information
 Securities Report (in Japanese)

Reporting practice102-46

Defining report content and topic Boundaries

P5-12

Foster Group CSR Management102-47

List of material topics

P5-12

Foster Group CSR Management

57

Data Table

General Disclosures

GRI
Standard
No.

Reporting practice102-48

Restatements of information

102-49Changes in reporting

102-50

Reporting period

102-51

Date of most recent report102-52

Reporting cycle

102-53

Contact point for questions regarding the report102-54Claims of reporting in accordance with the GRI Standards

102-55

GRI content index

P55-60

GRI content index

102-56External assurance-

Not Applicable

General Disclosures
GRI 103:
Management Approach

GRI
Standard
No.
103-1

103-2

103-3

General Disclosures
GRI 201:
Economic PerformanceGRI 202:
Market PresenceGRI 203:
Indirect Economic
Impacts

GRI 204:
Procurement Practices

GRI
Standard
No.

Disclosure

Page Number / URL-

No Restatement of information-

No significant changes inreporting

P61

Provision of Information
Regarding Sustainability

P61

Provision of Information
Regarding Sustainability

P61

Provision of Information
Regarding Sustainability

P61

Provision of Information
Regarding Sustainability

P61

Provision of Information
Regarding Sustainability

Disclosure

Page Number / URL

Explanation of the material topic and its Boundary

P5-12

Foster Group CSR Management

The management approach and its components

P5-12
P13-18
P19-32
P33-42

Foster Group CSR Management
Environment
SocialGovernanceEvaluation of the management approach

P5-12
P13-18
P19-32
P33-42

Foster Group CSR Management
Environment
SocialGovernance

Disclosure

Page Number / URL

201-1

Direct economic value generated and distributed

-

201-2

Financial implications and other risks and opportunities due
to climate change

P49-54

201-3

Defined benefit plan obligations and other retirement plans- Securities Report (in Japanese)

201-4

Financial assistance received from government-

Not Applicable

202-1

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

P49-54

Data table202-2

Proportion of senior management hired from the local
community

P49-54

Data tableP29-32
203-1

Infrastructure investments and services supported“Social Contribution”,“Community Contribution
Activities at Overseas Sites”

203-2

Significant indirect economic impacts

204-1

Proportion of spending on local suppliersP49-54

 Securities Report (in Japanese)
Data table Securities Report (in Japanese)
Data table

Data Table

General Disclosures
GRI 205:
Anti-corruption

GRI
Standard
No.

Disclosure

Page Number / URL

205-1

Operations assessed for risks related to corruption

P49-54

Data table205-2

Communication and training about anti-corruption policies
and procedures

P49-54

Data table

205-3

Confirmed incidents of corruption and actions taken-

Not applicable

GRI 206:
Anti-competitive Behavior

206-1

Legal actions for anti-competitive behavior, anti-trust, andmonopoly practices-

Not applicable

General Disclosures

GRI
Standard
No.

Disclosure301-1

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 the organization

302-3

Energy intensity

P49-54

Data table

302-4

Reduction of energy consumption

P49-54

Data table

302-5

Reductions in energy requirements of products and services

P17-18“Environmentally Friendly
Products”

303-1

Interactions with water as a shared resource

P14“Environmental Activities”

303-2

Management of water discharge-related impacts

P14“Environmental Activities”

303-3

Water withdrawal

P49-54

Data table

303-4

Water discharge

P49-54

Data table

303-5

Water consumption

P49-54

Data table

304-1

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

Not applicable304-2

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

Information unavailable

304-3

Habitats protected or restored-

Not applicable

304-4

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

Information unavailable

305-1

Direct (Scope 1) GHG emissions

P49-54

Data table

305-2

Energy indirect (Scope 2) GHG emissions

P49-54

Data table

305-3

Other indirect (Scope 3) GHG emissions

P49-54

Data table305-4

GHG emissions intensity

P49-54

Data table

305-5

Reduction of GHG emissions

P49-54

Data table

305-6

Emissions of ozone-depleting substances (ODS)-

Not applicable

305-7

Nitrogen oxides (NOX), sulfur oxides (SOX), and othersignificant air emissions-

Not applicable

GRI 301:
Materials

GRI 302:
EnergyGRI 303:
Water and EffluentsGRI 304:
Biodiversity

GRI 305:
EmissionsPage Number / URL
P49-54
P49-54-

Information unavailable
Data table
Information unavailable
Data table
Information unavailable

58

59

Data Table

General Disclosures
GRI 306:
Effluents and Waste

GRI 307:
Environmental
Compliance
GRI 308:
Supplier Environmental
Assessment

General Disclosures
GRI 401:
Management approach
disclosures

GRI 402:
Labor/Management
Relations
GRI 403:
Occupational Health and
SafetyGRI 404:
Training and Education

GRI 405:
Diversity and Equal
Opportunity
GRI 406:
Non-discrimination

GRI
Standard
No.

Disclosure

Page Number / URL

306-1

Water discharge by quality and destination

P49-54

Data table

306-2

Waste by type and disposal method

P49-54

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-

Information unavailable

307-1

Non-compliance with environmental laws and regulations-

Not applicable308-1

New suppliers that were screened using environmental
criteria

P49-54308-2

Negative environmental impacts in the supply chain andactions taken-

GRI
Standard
No.

Disclosure

Data table
Information unavailable

Page Number / URL

401-1

New employee hires and employee turnoverP49-54

Data table401-2

Benefits provided to full-time employees that are notprovided to temporary or part-time employees

P49-54

Data table

401-3

Parental leave

P49-54

Data table

402-1

Minimum notice periods regarding operational changes

-

403-1

Occupational health and safety management system

P24-25“Health and Safety”

403-2

Hazard identification, risk assessment, and incident
investigation

P24-25“Health and Safety”

403-3

Occupational health services

P24-25“Health and Safety”

403-4

Worker participation, consultation, and communication on
occupational health and safety

P24-25“Health and Safety”

403-5

Worker training on occupational health and safety

P24-25“Health and Safety”

403-6

Promotion of worker healthP24-25“Health and Safety”

403-7

Prevention and mitigation of occupational health and safety
impacts directly linked by business relationships

P24-25“Health and Safety”

403-8

Workers covered by an occupational health and safety
management system

P24-25“Health and Safety”

403-9

Work-related injuries

P24-25
P49-54“Health and Safety”
Data table

403-10Work-related ill healthP24-25
P49-54“Health and Safety”
Data table

404-1

Average hours of training per year per employee

P49-54

Data table

404-2

Programs for upgrading employee skills and transition
assistance programs

404-3

Percentage of employees receiving regular performance andcareer development reviews

P49-54

Data table

405-1

Diversity of governance bodies and employees

P49-54

Data table

405-2

Ratio of basic salary and remuneration of women to men

P49-54

Data table

406-1

Incidents of discrimination and corrective actions taken-

P23

The minimum notices are given
according to the law of thecountries / regions.

“Human Resource
Development”

Not applicable

Data Table

60

General Disclosures

GRI
Standard
No.

GRI 407:
Freedom of Association
and Collective Bargaining

407-1

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

Information unavailable

GRI 408:
Child Labor

408-1

Operations and suppliers at significant risk for incidents ofchild labor-

Information unavailable

GRI 409:
Forced or Compulsory
Labor

409-1

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

Information unavailable

GRI 410:
Security Practices

410-1

Security personnel trained in human rights policies orprocedures

GRI 411:
Rights of Indigenous
Peoples411-1

Incidents of violations involving rights of indigenous peoples-

Not applicable

412-1

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

Information unavailable

412-2

Employee training on human rights policies or procedures

P49-54412-3

Significant investment agreements and contracts that
include human rights clauses or that underwent humanrights screening-

Confidentiality constraints

413-1

Operations with local community engagement, impact
assessments, and development programs

P29-32“Social Contribution”,“Community Contribution
Activities at Overseas Sites”

413-2

Operations with significant actual and potential negative
impacts on local communities

-

414-1

New suppliers that were screened using social criteria

P49-54414-2

Negative social impacts in the supply chain and actions
taken

-

Information unavailable

415-1

Political contributions-

Not applicable

416-1

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

Information unavailable

416-2

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

Information unavailable

417-1

Requirements for product and service information andlabeling-

Information unavailable

417-2

Incidents of non-compliance concerning product andservice information and labeling-

Information unavailable

417-3

Incidents of non-compliance concerning marketing
communications-

Not applicable

GRI 418:
Customer Privacy

418-1

Substantiated complaints concerning breaches of customer
privacy and losses of customer data

P49-54

GRI 419:
Socioeconomic
Compliance419-1

Non-compliance with laws and regulations in the social andeconomic area-

GRI 412:
Human Rights
Assessment

GRI 413:
Local Communities

GRI 414:
Supplier Social
Assessment
GRI 415:
Public Policy
GRI 416:
Customer Health and
SafetyGRI 417:
Marketing and Labeling

Disclosure

Page Number / URL

P49-54

Data table

Data table

Not applicable
Data table

Data table

Not applicable61

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

Contents Reported in Sustainability Report 2019
• About this report
The “Sustainability Report 2019” (the Report 2019) was prepared to comprehensively report the Foster Group’s
corporate social responsibility (CSR) activities throughout the fiscal year ended March 31, 2019 (fiscal 2018), for our
stakeholders. With regard to our CSR activities, your valued opinion would be greatly appreciated to help us fulfill our
corporate social responsibilities in the years to come. We hope this report will help you better understand the CSR
activities of the Foster Group.
• Reporting scope
Unless specifically indicated, the reporting scope includes the CSR activities of the Foster Group, which consists ofFoster Electric Company, Limited, and its consolidated subsidiaries in Japan and overseas.
• The reporting period
The reporting period of the Report 2019 is from April 1, 2018, to March 31, 2019 (fiscal 2018). The Report also includes
statements concerning activities outside the reporting period, including those in fiscal 2019.
• 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 2019.
• Month of issue
June 2019• Next issue of the Sustainability Report (planned):
June 2020• Reporting to the United Nations Global Compact
As a company that has signed the United Nations Global Compact, we have announced this report as the “Communication
on Progress (COP)” for the four fields and ten principles to our stakeholders.

• 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

MEMO

#

Foster Electric Company, Limited

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

The illustration on the cover of this report
represents our automotive business. Our
FOSTEX speakers, headsets and vibration
actuators, as well as the letters that spell
Foster are scattered around the car.
June 2019 Edited in Japan