CSR Report 2023

Published by:
F-tech Inc.
19, Showanuma, Shobucho, Kuki, Saitama 346-0194
Japan
Inquiries:
Corporate Planning Office, F-tech Inc.
Phone: +81-480-85-5213 Fax: +81-480-85-7672
E-mail: webmaster@ftech.co.jp
Published in December 2023

Introduction

We aim to be the world’s leading manufacturer of functional area for vehicle chassis.

Introduction
3 Company Outline
7 History of the F-tech Group

Message from the President
9 Message from the President

Running, turning, stopping, and bearing loads

Management Strategy
13 Aiming to Realize a Society with Sustainable
Mobility
15 Mid-Term Business Plan
17 Financial and Environmental Indicators, andOther Data
19 Consolidated Balance Sheets and Consolidated
Statements of Income

Functional parts for vehicle chassis, which we supply to global automakers, areessential components for safe driving. We believe that companies handling

Governanceproducts that involve human life bear a responsibility that goes beyond the quality

21 Corporate Governance System
23 Sustainability Promotion Structure
27 Directors and Auditors

and performance of the products we produce and extends to various activities

Socialundertaken by the Company. The F-tech Group takes a broad perspective in

30 Human Capital Initiatives
VOIC E31
On Cultivating People
32 Creating a Comfortable Working Environment
VOIC E
Understanding Diversity and
Improving Quality
34 Occupational Health and Safety Initiatives
VOIC E
35
The Experience and Value of Parental
Leave
36 Quality Improvement Initiatives
37 Relationship with Shareholders and Investors
38 Relationship with Local Communities
39 The Eiichi Shibusawa Award

tackling environmental, human rights, and economic challenges and works to fulfill
its social responsibility of being a corporate group that contributes to thehappiness of all people.

Environment

Better than Ever

41 Disclosure Based on the TCFD Recommendations
46 Metrics and Targets
Progress toward Our 2030 Global
Environmental Targets
47
14th Mid-Term Business Plan
FY2022 Environment and Energy Plan48
15th Mid-Term Business Plan
FY2023 Environment and Energy Plan
49
Material Flows (FY2022 Results)
50
FY2022 F-tech Environmental Accounting
51
Promoting Initiatives Focused on the Value Chain
T OP IC S
52
TOPICS Regional Environmental
Conferences in FY2022
53 Environmentally Friendly Products andTechnologies
VOIC E54
Development That Contributes toSociety and the Environment

Global Initiatives
55
57
59
60

Japan
North America
China
Asia (Philippines, Thailand, Indonesia)

Global Network
61 Fourteen Production Sites and Nine R&D and Sales
Facilities in Nine Countries

Editorial Policy
As in the previous fiscal year, in FY2022 the F-tech Group was significantly affected by external changes in its operating environment. These included the ongoing COVID-19 pandemic,
and a surge in raw material and energy prices caused by yen depreciation. These negative external effects have not yet subsided, and real value and the evolution of the Group's
For more than a decade, we have reported on our environmental and social contribution activities in this report. Social demands for disclosure of information regarding sustainability
covering our basic policy on sustainability, roadmap, and identification of materiality items. We hope this report will aid our stakeholders in understanding the F-tech Group.
In preparing this report, we referred to the GRI Standards as the basis for our identification of materiality and considered the TCFD recommendations for environmental
26000 and other relevant guidelines. In this report, the F-tech Group is also referred to as “the Group,” and F-tech Inc. may be referred to simply as “F-tech” or “the Company.”

01

F-TECH CSR REPORT 2023

production volatility due to semiconductor shortages, the situation in Russia and Ukraine,
resilience, adaptability, and sustainability are being tested.
are increasing year by year. In response, this year we have expanded this content,
considerations and climate change risks. For social responsibility, we referred to ISO

Future Projections, Plans, and Targets
This report is a forecast based on information available at the time it was
written and is not definitive. Therefore, the results of future businessactivities may differ from the projections contained in this report.

F-TECH CSR REPORT 2023

02

Ou r A c tio n Gu ide lin e s

Mission Statement● Compliance with laws and ordinances
We always give top priority to ethically appropriate conduct in all our
activities. We always comply with laws and ordinances and act with agood social conscience as a good member of society in keeping withbeing a company with a high commitment to legal compliance. If we
discover any violation or possible violation of any laws, ordinances orcompany rules, we will report the matter, make suggestions, andconsult with our direct supervisor or the Corporate Ethics Kaizen
Desk.

From a global perspective, we strive to contributeto our society and to improve the quality of life
through manufacturing of the highest quality
products with ambition and sincerity.

● Respect for human rights
We respect all individual and human rights.
We do not tolerate any child labor, forced labor, discrimination or any
type of harassment that violates human rights.

● Labor and Safety & HealthCorporate Philosophy

Challenging Spirit

We will establish a safe and secure working environment for all our
employees, and maintain a pleasant and safe working environment.

Respecting People

Making Profit● Quality
We strictly follow the highest standards and procedures giving toppriority to provide products and services with safety to meetcustomer's expectations.

● Compliance with company rules
We create our company's internal rules and regulations based onrational reasoning and relevant objectives to create a fair and equal
working environment and we commit to communicating with our
employees effectively.

Bas i c P olicy on Su staina b ili t y
Based on our mission statement, corporate philosophy, and action guidelines, we will strive
sincerely to solve global issues and enhance our corporate value through our business activities in
the aim of realizing a society with sustainable mobility.

● Traffic safety
As a member of the automotive components manufactures, wealways observe traffic safety laws, rules and regulations, being a good
citizen on the road by giving way to others on the road.

● Environmental protection
We will endeavor to protect the environment, with the belief that the
Earth belongs to all humankind. We always consider minimizing theimpact on nature and optimize energy resource utilization in
production.

● Increasing corporate value
We believe the purpose of a company as a going concern is thecreation of value. We will always strive to maximize socially accepted
corporate values by bringing profit long-term for our shareholders
and society.

● Disclosure and management of information
We strictly distinguish and manage information from personal,
company confidential, and to be disclosed appropriately. However,
we strive to publicly make available any required information inaccordance with respective laws and corporate regulations
appropriately and in a timely manner.

● Fair transactions
We always ensure business is conducted in a free, equal and fairmanner with transparency, and will not engage or agree with any
irrational, corrupt business practices.
We will not allow giving and receiving of any benefit or conveniencebeyond reasonable and legal limits socially acceptable, and we will
not maintain any unfair relationship with political parties orgovernment authorities.
We will never permit or tolerate any relationship or connection withany anti-social organizations or behaviors which may threaten thesafety and well-being of our society.

● Community involvement
Being a member of the local community, we support the creation ofan equal, wealthy and well-being of our society through participation
in local community development, promotion of cultural, educational,
and the improvement of the welfare of the local society.

way
Working toward a Sustainable Future by the Challenging Spirit
That We Have Embraced Since Our Founding

03

F-TECH CSR REPORT 2023

F-TECH CSR REPORT 2023

04

A Specialized Manufacturer of Functional Parts for
Vehicle Chassis Responding to the Shift to EVs❸ Chassis systems

We manufacture automotive components that have an important impact on safety, such as suspension arms,
subframes and pedals, utilizing sophisticated design capabilities and a unique integrated processing system. In
addition to ensuring the high-quality automobile manufacturers require, our components simultaneously offer
strength, durability and weight reduction.

Our Products❺❸❶❹❶ Mounted components❺❷ Control parts

❶

❺

❷

❸
❹

❹ Modules❺❺ Suspension components

Global Network
Design Technology Capabilities

Processing Technologies

We utilize our proprietary analysis technology to
conduct development based on productperformance predictions, such as suspension
during driving.

We have developed unique technologies such ashydroforming, friction stir welding (FSW), and FUT1 (a type of ultra-precise forming).

●

Production Sites●

R&D and Sales Facilities Japan (two), North America (three), China (two), Asia (two)Japan (two), North America (six), China (two), Asia (four)

We have opened development locations in all regions where we have production sites to ensure prompt response
to customers' needs. We aim to improve our operations across the Group through information sharing across allareas including quality, development, procurement and the environment.

Fourteen Production Sites and Nine R&D
and Sales Facilities in Nine Countries
05

F-TECH CSR REPORT 2023

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06

History of the F-tech Group

From a Small-Town Factory to a Global Company
Jul. 1947

Oct. 1959
Jul. 1961

May 1964

Founder Jiroku Fukuda established
Fukuda Seisakusho in Soka City,
Saitama Prefecture, for press
working of toy parts.
Began manufacturing motorcycle
parts for Honda Motor Co.
Honda won the Isle of Man race.
Received a letter of appreciationfrom Mr.Soichiro Honda for
supplying parts.
Company name changed to Fukuda
Press Kogyo Co.

Jan. 1965

May 1967

Dec. 1978

Developed and manufactured
functional parts for four-wheeledvehicles.

Jul. 1990

Kameyama Plant (currently
Kameyama Wada Plant) establishedin Kameyama, Mie Prefecture.

Jul. 1993

Head office and plant (now Kuki
Plant) moved to Kuki City, Saitama
Prefecture.

Jan. 1994

Haga Technical Center was
established in Haga, Tochigi
Prefecture.
F&P America Mfg., Inc. wasestablished in Ohio, U.S.A.
Kyusyu F.tech Inc. was establishedin Yamaga City, Kumamoto
Prefecture, Japan.

May

F-TECH PHILIPPINES, MFG., INC. wasestablished in Laguna, Philippines
as the first base in Asia.

Nov. 1983

Fukuda Engineering Co. wasestablished.

Oct. 1986

F&P Mfg., Inc. was established in
Ontario, Canada, as the Group's firstoverseas base.

Sep. 1996

Register stocks over-the-counter
with the Japan Securities Dealers
Association.

Dec. 1988

Company name changed to F-tech
Inc.

Apr. 1997

DYNA-MIG, a division of F&P Mfg.
was established in Ontario, Canada.

Nov. 1999

All domestic offices acquired ISO
14001 certification.

Oct. 2000

F&P Georgia, a division of F&P America Mfg., wasestablished.

Jan. 2001

Listed on the Second Section of the Tokyo Stock
Exchange.

Mar.

Began transactions with Toyota Motor
Manufacturing North America, Inc.

Jun.

F.E.G. DE QUERETARO S.A. DE C.V. was established.

Jan. 2002

F-tech Zhongshan Inc. was established as the firstbase in China.

Apr. 2003

F.TECH R&D NORTH AMERICA INC. was establishedin Ohio, U.S.A.

Nov. 2004

F-tech Wuhan Inc. was establishedMar. 2006

F-TECH MFG. (THAILAND) LTD. was established in
Ayutthaya, Thailand.

Sep.

Listed on the First Section of the Tokyo Stock
Exchange.

Dec. 2011

F-tech R&D (Guangzhou) INC. was established.

Jun. 2012

Established F&P MFG DE MEXICO S.A. DE CV. in Guanajuato,
Mexico.

Feb. 2013

PT. F.TECH INDONESIA was established in Karawang, Indonesia

Aug.

Michigan/R&D NA Branch Office was established in Michigan,
U.S.A.

Oct.

Kameyama Plant obtained ISO 50001 certification.

Jun. 2016

Current Public Interest Incorporated Foundation F-TECHSCHOLARSHIP FOUNDATION was established.

Expansion Period II
2011 to Present

1961｜Certificate of Appreciationfrom Mr. Soichiro Honda

2023 Consolidated net sales reach¥261.2

1993｜F&P America Mfg., Inc.,
established in Ohio, U.S.A.

Expansion Period I

Sep. 20182000 to 2010

F-Tech Automotive Components Private Limited. was establishedin Gurugram, India/.

Nov. 2020

Invested in VEE GEE Auto Components Private Limited.in Gujarat,
India.

Mar. 2021

Started business with Toyota Motor Corporation.

Dec.

Established Nomination and Compensation Committee as avoluntary advisory body to the Board of Directors.

Apr. 2022

Moved to the Prime Market from the First Section of the Tokyo
Stock Exchange.

2010 Consolidated net sales reach¥122.0Period of Expansion
into the North American
Market1986｜F&P Mfg., Inc., theGroup’s first overseas baseRetera Co. Ltd. was acquired as a subsidiary.

May

Dec.

Established FUTIAN MOULD TECHNOLOGY (YANTAI)
CO., LTD, a subsidiary of Fukuda Engineering Co.,
LTD., in Shandong Province, China, currently YANTAIFUYAN MOULD CO., LTD.

Acquired India Steel Summit Private Limited in Uttar Pradesh,
India.

Apr. 2023

Established F-TECH NORTH AMERICA INC. in the US state ofMichigan.

OctoberMoved from the Prime Market to the Standard Market of theTokyo Stock ExchangeJul. 2008

At the time of establishment

1965 to 1989

Founding PeriodbillionNov. 2007

1990 to 1999

Founding Period ofAutomobile BusinessbillionF.tech R&D Philippines Inc. was established in
Laguna, Philippines.

1999 Consolidated net sales reach¥71.2 billion

1989 Non-consolidated net sales reach¥17.4 billion

May 2022 India Steel Summit Private Limited
becomes a subsidiary1947 to 1964
1964 Non-consolidated net sales exceed
millionF&P MFG DE MEXICO S.A. DE CV.

¥200

1988｜Change to the current
Company name07

F-TECH CSR REPORT 2023

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08

Message from the President

Accelerating Our Earning Power to Becomea Company More Sought After by Society
Looking Back on the 14th Mid-Term Business Plan
Introduction

Overall, we achieved an increase in sales and profits. However,
we regrettably fell short of our goal of achieving profitability
at all site. The three years of the 14th Mid-Term Business Plan
were a battle against COVID-19. Our business activities weresignificantly affected by reduced production and plant

Message from the President

shutdowns by our customers, as well as parts shortages due
to disruptions in the supply chain. Additionally, we faced atight labor market and soaring costs for materials andYuichi Fukuda
President & CEO

transportation, making the operating environment extremely
challenging.
One particular challenge that became evident was thatchanges in the operating environment. We need to becomesocial challenges, while fulfilling our corporate social

able to demonstrate solid earning power even under difficult

responsibility. To achieve this, we need to develop andcircumstances.

implement specific measures to contribute to society. It isalso important for each employee to understand the concept

achieving stable mass production of new models even amidof sustainability and take appropriate actions based on it. We

these challenging conditions. We are also proud to haveestablished the Sustainability Promotion Department toreceived quality awards from many of our valued customers.

systematically carry out necessary internal awareness-raising

We have strengthened our base in Mexico and enhanced ouractivities to this end.

business in India, as well as established a new sales office in
Sustainability Promotion Department.

Establishment of
the Sustainability Promotion Department

Action Policies of the 15th Mid-Term Business Plan

We believe that addressing environmental issues, social

North America. In addition, in Japan we set up theGovernanceHowever, we did succeed in securing new orders andManagement Strategy

our strength was insufficient to effectively counteract theseconcerns, and economic challenges related to sustainability,commonly referred to as ESG, requires both internal andlack of earning power became apparent, so under the 15th

external actions.

Mid-Term Business Plan, we will focus on activities aimed at
improving earning power.

The establishment of the Sustainability Promotion
Department serves two main purposes. The first is to foster ashared understanding within the Company of themonozukuri (manufacturing). We doggedly pursue the true

significance of sustainability, including how our corporate

essence of manufacturing and strive to improve earning

activities are connected to social contribution andpower, aligning with our company-wide policy of “enhancing

sustainability, and why we must conduct our operations

earning power to achieve sustainable growth and contributebased on sustainability principles.

specific initiatives towards this goal.

The second objective is to provide information to ourEnvironment

The “F-tech family” is a group of companies focused on

to society.” In each area, we will continue to implement

SocialDuring the period of the 14th Mid-Term Business Plan, ourshareholders and external stakeholders to help themunderstand what we are actually doing.
This CSR report is part of that effort.

Incorporating sustainability into corporate activities has

provide and foster an understanding of sustainability

already become a global standard. We recognize theinitiatives both internally and externally, and to effectively

importance of establishing sustainability management from

communicate our activities in order to play a leading role in

the perspective of addressing environmental, economic, andpromoting sustainability.

We expect the Sustainability Promotion Department to09

F-TECH CSR REPORT 2023

F-TECH CSR REPORT 2023

Global Initiatives

Building Sustainability Management

10Message from the President

Initiative for Carbon neutrality as an urgent issue

Group. Since its founding, We have conducted its businessenvironment where individuality is respected regardless ofsustainability. The Company has created a roadmap forgender, age, nationality, religion, or political ideology, andachieving carbon neutrality and is working actively to thismaximizing each person’s potential. Respecting people isend.

about allowing each individual to leverage their strengths
and support each other's weaknesses, thereby maximizing

companies must face to address global warming. But rather

our organizational capabilities. We recognize that cultural,than a problem at the individual company level, it is a global

historical, and political differences exist in the countries andissue that needs to be addressed by all humankind.

regions where we operate, and we believe it is important to

It is important to share such a sense of urgency with as
many people as possible, and on an individual level, each

Message from the President

Reducing CO2 emissions is an urgent challenge that

Introduction

based on the principle of respecting people, creating an
Achieving carbon neutrality is key to our efforts to promote

fully acknowledge, understand, and embrace thesedifferences.

person should do what they can. As a company, we need to

The Global Development of the F-tech GroupManagement Strategy

set higher goals and work towards achieving carbon
neutrality even as much as, one year, one month, or one day
faster.
We can maximize the impact of our efforts by linking
the efforts of companies, entire industries, and evencountries, based on specific goals.

We divides our operations according to three regional
segments: Japan, North America, and Asia.
The Japanese market continues to shrink, due to social
factors such as an aging population and a declining
birthrate. Accordingly, in order to achieve stable, sustained

Practicing Respect for Human Rights and Diversity

business growth, we need to keep expanding ourin India. Our performance in these two countries has made

Each of our locations is implementing initiatives to

All companies, regardless of size, have a social responsibility.

a significant positive contribution to the Company's

address environmental issues. We share these case

However, not all companies can address these responsibilities

consolidated performance.

studies within the Group and consider the feasibility ofin the same environment or at the same pace. This reality isadopting them based on the realities of each location,evident in our own supply chain, which is composed ofaiming to introduce them promptly if possible. To

different types of companies. Accordingly, it is important tofacilitate this effort, the F-tech Group holds an annual

have open discussions about what is expected of individual

Global Environment Conference, with the theme ofcompanies, what they need to possess and how they should

Currently, the automotive industry is heavily focused on“becoming an environmental front-runner.” At thismeet these expectations. It is important to fully understandthe trend towards electrification, specifically electric

conference, practitioners from each location report on

the challenges and work together to resolve them.

vehicles (EVs). The transition of automotive power sources

their initiatives to promote sharing within the Group. In

To remain a company that society needs, we mustfrom gasoline engines to batteries will not render the

recent years, the COVID-19 pandemic has interrupted in-accurately understand what characteristics society seeks andCompany's expertise in chassis components obsolete.

person gatherings. However, we were able to hold thecontinuously do what should and can be done to meet those

Rather, we need to actively expand sales our channels inconference in person in 2023.

expectations. As the social landscape shifts, the demands

North American business in Mexico and our Asian businessResponding to
the Accelerating Global Shift toward EVs

placed on us will also change. For this reason, we need toAuto manufacturers have clearly emphasized the shift

Company—both on environmental initiatives but also to

consistently cycle through this process as we fulfill our

towards electrification in their management strategies,

address social challenges. While one company's efforts

corporate social responsibilities.

with the United States and China leading the way in EV

may have their limits, collaborating with like-minded

Every member of the F-tech Group will take responsible

adoption. As these two countries clarify their approach tocompanies can generate greater impact. We aim toactions based on our mission statement, corporate

EV adoption, we will need to actively pursue strategic

actively engage with companies who share our values,

philosophy and our action guidelines, contributing to theorders and firmly ascertain growth opportunities. We

expanding the circle of collaboration and enhancing thesustainable development of our business. We will continue

believe that this will be a key factor in the Company's

effectiveness of our activities.

working to enhance corporate value and devote our full

this direction.

future business expansion.
11

F-TECH CSR REPORT 2023

Global Initiatives

We are committed to taking responsible actions as a

Environment

Continuing to Be a Company Society Requires

Recently, we have been focusing on strengthening our

Action Guidelines, a set of guidelines shared throughout theSocialAddressing the Social Issues Right Before Us

We have emphasized human rights and diversity in Our

Governance

operations overseas.

efforts to help realize a sustainable society.
F-TECH CSR REPORT 2023

12

Management Strategy

Aiming to Realize a Society with Sustainable Mobility
The Process of Identifying Materiality Items
We have identified materiality items by considering our stakeholder relationships, taking into account the importance of building a sustainable society and enhancing the corporate value of the F-tech Group.

Identified Materiality Items

nvironment

Development ofenvironmentally friendly products

Safe and hygienic working environment■ Evaluate products using LCA■ Implement third-party verification■A chieve Scope 1 and 2 carbon neutrality in

manufacturing area by 2035■A chieve carbon neutrality throughout the

supply chain by 2050

■ Expand the use of renewable energy■ Foster a corporate culture that respects diversity

Further strengthen our businessfoundation, ensure a comfortableworking environment for our
employees, and provide a secure andsafe future for all■ Strengthen and enhance employee engagement■C ontinue to comply with occupational safety laws andregulations■ Augment customer satisfaction

Compliance■ Expand compliance training

Expand the corporate infrastructure toenhance corporate value over the
medium to long term

Fair trade

Relation to the SDGs

■ Enhance CSR verification sheets■ Human rights training— 100% employee participation■ No lost time injuries— 0 cases■ Serious quality defects— 0 cases■ Compliance training— 100% employee participation— 0 cases■ Violation of laws and regulations■ Supplier CSR verification sheet— 100% deployment

Governance■ Expand supply chain management

Sustainability Roadmap

Realize a Society

Phase

Based on our mission statement,

guidelines, we will strive sincerely to

UnderstandPut into Practice

EntrenchContinue to Promote

Create an Internal Promotion Structure

Establish a PDCA Cycle

Report and Communicate

Sustained Growth2026

solve global issues and enhance our

Build a New System

Continue to Operate

Ensure Transparency and Mutual Understanding■ Establish the Sustainability Promotion Department■ Improve issues by utilizing the results of■ Integrate important themes into management and reflect

corporate value through our■S tep up initiatives to promote an understanding of sustainability■E stablish and review of policies in each■E nsure management soundness and maximize value■ Launch the Sustainability Committee

realizing a society with

■ Publish an integrated report■ Consider KPIs for sustainability

onwards

Practice Disclosure Dialogue■ Implement sustainability training

2023

Recognition of issues Establishment of systems

2024
System development Practice Disclosure2025

Co-create with Stakeholders■ Formulate the Company’s purpose(targeting 2050)■ Develop through disclosure and dialogue■ Pursue new business

Practice Disclosure Dialogue

Global Initiatives■ Identify materiality items and formulate basic policies

Sustainability
Standards Board ofJapan (SSBJ)
Consider legal
disclosure initiatives

▲Establish Policies and Issues■ Identify issues through the use of external evaluations

F-TECH CSR REPORT 2023

■ Engage in effective dialogue with investors■ Establish a value-creation process■ Prepare to formulate a purpose

13■C onduct disclosure in line with stakeholder needs

Make Value Creation Visible
Annual Securities Report
Response to new disclosure items▲

sustainable mobility.

area■ Establish a sustainable supply chain

Mobility

Environment

business activities in the aim ofthem in the mid-term business plan

external evaluations

with Sustainable
Socialcorporate philosophy, and action

Management Strategy

Basic Policy on Sustainability

customer needs■ Reduce environmentally hazardous substances

Provision of high-quality products

overnance

KPI (2030)■D esign and develop items, such as EV products, that meet

Establish a low-carbon and highly
efficient production system anddevelop environmentally friendly
products

Respect for human rights

ocial

The Company’s Main Initiatives

Message from the President

E
S
G

Response to carbon neutrality

Our Aims

Introduction

Materiality Items

Enhance Sustainability Management■ Formulate a medium-term vision■ Strengthen environmental, social, and economic sustainability initiatives

F-TECH CSR REPORT 2023

14

Management Strategy

Mid-Term Business Plan
15th Mid-Term Business Plan (FY2023–FY2025)

In the 68th fiscal period, the Group’s sales and profits increased. However, our business activities were significantly affected bycustomers’ lower production levels and disruptions in the supply chain due to COVID-19, leading to parts shortages.
Additionally, the business environment became extremely challenging due to a tight labor market, rising material andtransportation costs. This situation underscored the importance of earning power.
Even under these adverse circumstances, we succeeded in winning new orders and developing a framework for the 15th
Mid-Term Business Plan.

During the period of the 14th Mid-Term Business Plan, our lack of earning power became apparent, so under the 15th MidTerm Business Plan, we will focus on activities aimed at improving earning power. The “F-tech family” is a group of companies
focused on monozukuri (manufacturing). We doggedly pursue the true essence of manufacturing and strive to improveearning power, aligning with our company-wide policy of “enhancing earning power to achieve sustainable growth andcontribute to society.” In each region, we will continue to implement specific initiatives towards this goal.

Earning power is the most pressing issue amid production cutbacks.

Companywide Policy Contribute to society by improving earning power and achieving sustainable growth.

Operating Profit(Billions of yen)

300
250

218.7

3.2

216.0
183.6

2.3
150
31
100
50

5.0

222.04.0
3.5

191.9

計画

217.0

0

5
3

41

1.7

1.0

68th Fiscal Period
FY2022

0.8

0.6

0

65th Fiscal Period
FY201966th Fiscal Period
FY2020■Forecast ■Actual

FY2020 FY2021

20

11

1

4.0
3.0

2.3
31

2

■ Actual
利益率計画■ Forecast
利益率実績

■ 実績

1.9

5.0

3.5

3.2

50

67th Fiscal Period
FY202168th Fiscal Period
FY20222.0
1.00

Pursue Strategic Opportunities toGrowth the Business

operating margin down 0.6pt■Operating profit down ¥5.9 billion from FY2021 forecast;operating margin down 2.6pt■Recovery in OEM production led to an increase of ¥46.0 billion(+21.2%) versus the forecast.

■Operating profit was down ¥5.5 billion versus forecast, and theoperating margin was down 2.6pt.

and foreign exchange effects.

■ Enhance reputation among stakeholders

Invest in growth

Earn

Reduce borrowings

Back to Basics
Enhance Earning Power■P roduce results from investments under the 14th

■ Improve profitability by strengthening competitive

advantage■ Improve employee engagement■D evelop human resources who can play an activerole in the F-tech family

Pursuethe essence of
manufacturing

Build a Sounder Financial Structure■ Deploy F-tech integrated support at problem sites

FY2022■Key factors included price hikes on materials in North America

5%■ Promote carbon neutrality

activities■ Expand EV commercial rights■ Maximize development efficiency■ Establish new technologies

Mid-Term Business Plan

■ Curtail investment■R einforce system for monitoring income andexpenditures

Operating profit:
Operating margin:

Shortfall

7.5 billion
3.5%¥

FY2022 Actual
Operating profit:
Operating margin:

2.0 billion
0.8%¥

Numerical Targets

Operating profit¥5.6 billion¥8.0 billion

Profit attributable to owners of parent

5.5billion¥1.5 billion¥3.3 billion

Operating margin

2.0%

2.7%

Net debt/EBITDA

3.6 times or less

3.1 times or less

¥80 or more¥175 or more

-¥

China

- ¥2.39billion

Other

North America- ¥ 4.87billion

Japan

AP

- ¥ 0.62billion¥ 1.22billion

Forex

2.0billion¥ 1.06billion ¥¥ 0.13billion

EPS

Global Initiatives¥300.0 billion

Environment

7.5billion¥

Positive Factors in Japan● Increase in royalties¥0.7 billion (foreign exchange, neworders)● Increase in equipment sales¥0.8 billion (Te Co. GM, etc.)

FY2025¥287.0 billion

Net sales
Negative Factors● Cutbacks in OEM production due tosemiconductor shortages● Soaring material and transportation
costs● Tightening labor market in North
America

FY2023SocialEarning power

Target vs. Actual Operating Profit in the Final Year FY2022)

FY2022 Targets

Governancetransportation costs, and higher production losses in response tochanges in production■Operating profit down ¥1.9 billion from FY2020 forecast;

FY2022

Build Sustainability Management

Actual operating margin

Forecast operating margin

Target:Operatingmargin of■ Strengthen ESG management initiatives■E xpand added value through strategic sales■Large-scale production cutbacks, soaring prices on materials andsemiconductor shortages.
■Net sales down ¥32.4 billion (-15.0%) from FY2020 forecast■Net sales down ¥30.1 billion (-13.6%) from FY2021 forecast(FY2026–FY2028)

Challenge for New

FY2020 FY2021■Substantial OEM production cut due to COVID-19 and16th Mid-TermBusiness Plan

(%)

75

70

7

4

0.6

0.6

8
6

2.0

0
66期 65th Fiscal Period67期 66th Fiscal Period 68期67th Fiscal Period
FY2019 FY2021 FY2020 FY2022 FY2021
FY2020
0

261.2

3.0

15

Growth(Billions of yen)Management Strategy

1.7

75

70

50 200（単位：％）

Message from the President

Net Sales

Introduction

Looking Back on the 14th Mid-Term Business Plan (FY2020–FY2022)

Note: Assumed exchange rate is $1.00=¥128.

15

F-TECH CSR REPORT 2023

F-TECH CSR REPORT 2023

16

Management Strategy

Management Strategy

Financial and Environmental Indictors

Other Data

Financial Indicators

Environmental Indicators

Breakdown of Share of Sales by Customer in FY2022

Share of Sales by Customer

Net Sales

100

CO2 Emissions
Target: R educe CO2 emissions per unit of production by
7.0% compared with FY2017 levels.
In FY2022, emissions were 0.285 t-CO2 per million yen of sales(down 36.1% from FY2017).

Operating profit grew 78.5% year on year, to more than ¥2.0
billion. In Japan, higher sales of machinery and tools, as well as
sales of technical services (royalties), combined with the impact
of cost reductions, boosted operating profit ¥0.9 billion year onyear.

In FY2020, the Company took on debt in preparation for the
impact of COVID-19, but debt levels were down year on year. In
FY2021 and FY2022, the Company continued to borrow funds forsuch purposes as a large-scale investment project in Mexico,
boosting interest-bearing debt to nearly ¥74.0 billion.

Interest-Bearing Debt Ratio

12.7

GM

10.9

9.3

60

Te Co.

11.4

Toyota
72.0

70.0

71.9

66.8

Mitsubishi

Target: Reduce water resources used per unit of production
by 5.5% compared with FY2017 levels.
In FY2022, water use amounted to 2.42m3 per million yen of sales(down 23.5% from FY2017).

Waste Generated

20

Target: Reduce waste generated per unit of production by
5.0% compared with FY2017 levels.
In FY2022, the Group generated waste of 0.018 ton per million
yen of sales (down 23.0% from FY2017).

2018

2019

2020

2021

2022 (Fiscal year)

Total Assets/Equity Ratio

Operating profit

8,000

Operating margin

7,000

(%)

3.5
3.0

6,000

2.5

5,000

3,000

2019

2020

2021

Million yen

235,361

FY2019218,712

FY2020183,647

FY2021

191,892

FY2022

261,156

Operating margin

ROE

2,000

%

2.8

1.9

1.7

0.6

0.8

-2,000

%

6.9

0.8

- 2.9

0.5

3.6

R&D Expenses/Capital Expenditures

Interest-bearing
debt ratio

38.3

36.3

40.3

42.0

CO2 emissions (per million yen ofunit of production)
sales

0.431

0.416

0.392

0.374

0.285

Water resources
used (per unit ofproduction)

m3 per million
yen of sales

0.318

3.24

3.48

3.27

2.42

Waste generated(per unit ofproduction)

Tons permillion yen of
sales

F-TECH CSR REPORT 2023

0.020

0.021

0.023

0.021

0.018

2019

2020

0
2022 (Fiscal year)

2021

Earnings per share

ROE

ROA

(%)

14.0

225

10.5

150

7.0

75

3.5

-1,000

0

0.0

2018

2019

2020

2021

R&D expenses

18,0002022 (Fiscal year)

2018

2019

2020

-3.5
2022 (Fiscal year)

2021

Employees by Geographic Segment
Capital expenditures

16,000Asia(People)12,00010,00014,00010,195
1,539

8,000

12,00010,000

6,000

8,000

8,751
1,491

4,670

9,400
1,355

North America

9,150
1,298

Japan

9,763
1,296

4,755

3,552

4,556

4,516

3,986

3,708

3,489

3,336

3,712

2018

2019

2020

2021

2022 (Fiscal year)

4,000

6,000
4,000

2,000

2,000
0

-75

2018

2019

2020

2021

2022 (Fiscal year)

0

F-TECH CSR REPORT 2023

Global Initiatives

17

73,92533.7%
t-CO2 perEnvironmental
Indicators

64,867

2018

1,000

2,038

49,565

0

300

1,142

51,342

5

20

ROE, ROA/Earnings per Share

3,072

46,220

10

40

(Yen)

4,088

Million yen

15

Net Income or Net Loss

(Millions of yen)Interest-bearing
debt

20

(Millions of yen)

6,580

Financial
Indicators

25

Environment

Million yen

30

60

0
2022 (Fiscal year)

0

Operating profit

35

120

80

(%)

40

SocialNet sales

FY2018

160
140

1.5

4,000

Equity ratio

Governance

2018

180

100

0.5

1,000

Total assets(Billions of yen)

2.0

1.0

2,000

0

（％）

（億円）

Operating Profit/Operating Margin

3,000
Unit

60.4%

Others0

4,000

Details of environmental indicators are explained on page 46 of
this report. In addition, we have revised some content comparedwith the previous year’s report.

11.4%

S Co.

(Millions of yen)

From FY2017 through FY2020, we maintained our debt ratio at
the 30% level through ongoing efforts to strengthen ourmanagement of total assets and interest-bearing debt. Since
FY2021, however, the debt ratio has been at the 40% level, owing
to large new investments.

Item

9.4%

Nissan

60.4

11.1%

Management Strategy

Interest-Bearing Debt

12.9

40

Water Resources Used

Operating Profit

80

0.3%
1.0%
1.0%
5.4%

Message from the President

Net sales grew 36.1% year on year, to ¥261,156 million, due tothe effect of yen deprecation and the impact of new orders on
production in North America. Meanwhile, the market isrecovering from the impact of COVID-19, despite being affectedby semiconductor shortages.

Honda

Introduction

(%)

18

Management Strategy

Consolidated Balance Sheets and Consolidated
Statements of Income(Fiscal Year Ended March 31, 2023)
Balance Sheets(Millions of yen)

Assets(Millions of yen)Line item
Line item

AmountLiabilities

72,603Current assets

5,491

Cash and deposits
Accounts receivable - trade

Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net

Net assets

36

6,790

Capital stock

6,733

Capital surplus

253

27,979Retained earnings

1,963

(60)

Treasury shares

1,283

Other

41,443

Shareholders’ equity

7,464

Deferred tax assets

111,380

Total liabilities

10,965Retirement benefit assets

187

Other

248

Investment securities

33

Negative goodwill

285

Right of using facilities

1,003

Net defined benefit liability

5,461

Investments and other assets

53

Provision for directors’ retirement benefits

13,005

Software

2,707

Deferred tax liabilities

724

Intangible assets

1,942

Lease obligations

2,785

Other, net

29,908Long-term loans payable

6,059

Construction in progress

35,836

Non-current liabilities

45,363

Leased assets, net

6,198

Other

18,884

Land

85

Provision for directors’ bonuses

92,284

Dies and tools, net

228

Notes payable - facilities(55)

103,534

Non-current assets

942

1,845

Accounts payable - other

3,729

Allowance for doubtful accounts

1,247

Income taxes payable

12,702

Other

12,995

Lease obligations

7,632

Raw materials and supplies

27,832Current portion of long-term loans payable

5,296Work in process

24,169

Short-term loans payable

37,177

Merchandise and finished goods

75,544

Notes and accounts payable - trade628

Notes receivable - trade

AmountCurrent liabilities

8,595

Accumulated other comprehensive income

543

Valuation difference on available-for-sale securities

386

Deferred gains or losses on hedges

7,731

Foreign currency translation adjustment(65)

Remeasurements of defined benefit plans

14,717

Non-controlling interests

64,756

Total net assets
176,137

Total assets

Total liabilities and net assets

176,137

Statements of Income(Millions of yen)Line item

AmountLine item

261,156

Net sales

242,414

Cost of sales

18,741Gross profit

16,702

Selling, general and administrative expenses

2,038

Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Foreign exchange gains
Other

Other
Ordinary profit

19

F-TECH CSR REPORT 2023

Gain on sales of non-current assets
Gain on negative goodwill
Gain on change in equity

59

Profit before income taxes

306
880

343

Income taxes - current
Income taxes - deferred
1,688

ProfitProfit (loss) attributable to non-controlling interests)

1,758

47

153

1,416

12

24

36

The Company has established various departments and committees,such as the Compliance Committee, to enhance internal controls.
In particular, we have established the Sustainability Promotion

3,300

Department and the Sustainability Committee to address the important issue(754)

of sustainability and ensure effective responses both internally and externally.

2,398
1,657

(77)

We are committed to achieving fair and effective corporate governance,
contributing to society through sustainable growth,

1,806
1,921

Governance

26

1,237

Extraordinary losses
Loss on retirement of non-current assets

Non-operating expenses
Interest expenses

Extraordinary income

Loss on sales of non-current assets
97

AmountProfit attributable to owners of parent

1,734

and enhancing corporate value.
F-TECH CSR REPORT 2023

20

GovernanceCorporate Governance System

Board of Directors

Compliance Initiatives

Overseas Business

Policy for Determining Remuneration

Initiatives Addressing Risk

The Nomination and Remuneration Committee is a voluntarycommittee that advises the Board of Directors. A majority ofcommittee members are independent outside directors, and theWe have established Risk Management Regulations, and we
strive to address and avoid various risks. The Risk Management

Compliance training

SocialShareholders’ Meeting
Selection/Removal

Selection/Removal

Audit & Supervisory Board

Consult

Internal Audit Office
Audit

President
ReportManagement Meeting
Control/monitor

Corporate Ethics
Committee

AdvisePublication of a CrowdStrikecase study

Global Initiatives

Accounting Auditors

Exchange Opinions↑Report↓Direction

Supervision

General Counsel

ReportReportSelection/Removal

Environment

Audit

Nomination andRemuneration Committee

Board of Directors↑Report↓Approval

ReportCheck thereasonablenessof the audit

GovernanceFor the overseas business, directors who are also senior
managing executive officers are appointed as a global chief SED
officer and a global business management officer. These
executives participate in the decision-making process foroverseas group companies. The system is designed to enable an
overall evaluation of investment appropriateness and businessprofitability.

We distribute Information Security Guidelines to all employees
and strive to ensure a thorough understanding of theseguidelines among employees. Minutes of Board of Directors andother important meetings are handled in accordance with our
Regulations for the Management of Documents and Forms,
Confidentiality Regulations, and Regulations on Information
System Management. Contracts and other agreements are
subject to Contract Management Regulations and are handledaccordingly. In June 2022, we introduced CrowdStrike, an EDR/MDR product, to address unknown threats.
F-tech has a dedicated team manned 24/7 to monitor andrespond to the needs of its clients. In addition to augmenting
security, this team reduces the workload of the administrators.
In addition, the Information Security Committee conducted
for the first time an emergency response drill based on theassumption of a security incident or accident.
After the training, we will formulate implementation
guidelines for information security incident/accident
countermeasures to enhance the accuracy of our response in theevent of an accident so that we can respond quickly andappropriately.
As the use of cloud services is expected to increase, we will
promote the introduction of an authentication infrastructure tocreate an environment that offers both convenience andsecurity.

Management Strategy

In addition to complying with domestic and international laws
and internal regulations, we have established “Compliance
Regulations” to prevent harassment, including human rights
violations. We also provide compliance training tailored to
employees of different ages and job levels, and disseminate
information through a monthly e-mail newsletter.
To facilitate anonymous reporting, we have established
Corporate Ethics Kaizen Desks both internally and outside theCompany, making it easy to offer suggestions. If a problem is
discovered, the Corporate Ethics Committee meets, both toprotect the whistleblower and to conduct investigations, study
countermeasures, and issue instructions for improvement to therelevant department. Each of our overseas subsidiaries has set up
either a suggestion box or a whistleblowing desk to promote a
more open workplace environment.

Information Security Initiatives

Message from the President

As the decision-making body for management issues, theCompany’s Board of Directors, consisting of five directors(including two outside directors), decides important topics
related to business execution and legal matters, and monitors
business execution. We have separated the management andbusiness execution functions by introducing an executive officer
system. This move was aimed at strengthening the Board of
Directors’ decision-making and oversight functions, thereby
expediting the execution of business.
In addition, to ensure monitoring of management, F-tech
has appointed two highly independent outside directors, whose
external viewpoints are actively incorporated into management
by receiving opinions and suggestions from multiple
perspectives. Moreover, the directors' terms of office are limited
to one year to facilitate the Company's ability to respondproactively to changes in the business environment.

Committee is composed of the Production Planning Division
Manager (who serves as risk management officer), theManagement Planning Division Manager, and each individual
division manager. The committee discusses specific measures,
drawing on specialized input from each business.
The BCP (business continuity plan) Working Group preparesand updates department-specific manuals. In the event of alarge- scale disaster or other unforeseen event, an emergency
task force headed by the president is immediately established todetermine countermeasure policies and to quickly restore andrecover from the disaster.
In addition to these initiatives, we are also focusing on
employee education, such as IT data protection utilizing data
centers, stockpiling of food and disaster supplies, and regulartraining for disaster preparedness education and safety
confirmation.

Introduction

committee aims to ensure the Company is transparent, fair, andrational in remuneration amounts and calculation methods for
directors and other executives. The committee deliberates on the
results of regular third-party surveys of corporate manager
remuneration. The committee reports the results of its
deliberation to the Board of Directors, and the board decides on
remuneration.
Similarly, the Board of Directors resolves performance-linked
remuneration following deliberation by the Nomination andRemuneration Committee of key indicators, target levels, andcalculation methods.

Proposals for
improvement

Compliance poster
Departments, affiliated companies, subsidiaries
Audit

Scenarios used in emergency response training

21

F-TECH CSR REPORT 2023

F-TECH CSR REPORT 2023

22

Governance

Sustainability Promotion Structure

Board of Directors

Propose/ReportManage/Supervise

Sustainability Committee

Responsible for

Corporate Planning
OfficeSustainability Committee

Management policy, medium-term planning, TAmanagement, subsidiary management, sustainability
promotion, environment, carbon neutrality

Management Planning
Division

Compliance Committee

Legal, risk compliance secretariat, internal control, PR/IR,
tax, capital policy, budget, human rights, labor relations

Research & Development
Division

New model development planning and formulation,
testing and evaluation, intellectual property

Sales and Marketing
Division

Overseas TA, SED, purchasing planning

Engineeing Division

Matters related to equipment and plastic forming

Quality Assurance Office

Matters related to FQS maintenance, quality

Production Planning
Division

23

F-TECH CSR REPORT 2023

Risk Management Committee
Health and Safety Committee
Security Committee

Mass production, safety, system operation, information
security management, global manufacturing
management, purchasing management, and system
operation, supervising.

1 Basic Policy

The F-tech Group places the highest priority on ethics to
conduct all of its actions, always complying with the laws
and rules of each country in which it operates, and actingwith social good sense to remain a highly law-abiding
company. In addition, we shall comply with internal rules
and regulations in order to build an equal and sound work
environment with better communication. Furthermore, wewill not follow unreasonable business practices and will work
to prevent all forms of corruption, including profiteering,favors, extortion, and bribery that exceed socially accepted
norms. We will also not have any relationships with politicalor administrative bodies or antisocial forces, and conduct
free, fair, and sound business transactions.
The F-tech Group has established the following
individual policies that embody and supplement important
individual areas of compliance. The relevant policies, etc. are
as follows• Corporate Governance Guidelines (established November
2015, revised November 2021)• Information Security Guidelines (established April 2019)• F-tech Group Tax Policy (established March 2023)• S upplier Sustainability Guidelines (established October2023)

3 Project StructureT he president of the board of directors has the highest
responsibility for promoting compliance throughout theF-tech Group, and the director in charge of theadministrative division is responsible for promoting
compliance. The Compliance Promotion Manager holds theCompliance Committee meetings to promote compliance.
Role of the Compliance Committee• Deliberations on the Group's overall compliance programand various measures• D iscussion of the progress of the F-tech Group's
compliance program
Composition and Roles of the Compliance Committee• Committee Chairman : Officer in Charge of Administration
oversees, directs, and supervises the compliance program• C o m m i t t e e M e m b e r s : G e n e r a l M a n a g e r o f e a c hdepartment establishes compliance system and makes sureof its adherence to policies in each department• Executive office Administration Division: General Affairs
Department, Administration Division: Promotion of theoperation of the Compliance Committee under the
direction of the chairperson

4 Matters considered in international norms(1) Prohibition of corrupt practices
The F-tech Group shall not offer or promise any money,
goods or other benefits to government officials or similar
persons for the purpose of obtaining business profits. We
shall comply with the anti-corruption laws and regulations of
all countries in which we operate, and shall not engage inany corrupt acts, including bribery, breach of trust,embezzlement, and insider trading.
(2) Prohibition of Conflicts of Interest
In order to maintain fairness in its dealings, the F-tech Groupwill not engage in any conflicts of interest regulated by law
in all countries in which it operates.

F-TECH CSR REPORT 2023

Global Initiatives

Committee chair: President
Members:	Division managers, officemanagers, and executive
officers
Secretariat:	Sustainability Promotion
Department

Committees

The F-tech Group has established “Compliance with Laws andRegulations,” “Compliance with Internal Rules,” and “Fair Trade” aspart of “Our Code of Conduct”. The F-tech Group has recently
established the F-tech Group Ethics Policy (hereinafter referred toas the “Policy”) to further substantiate its ethical behavior.
After obtaining advice from outside experts and respecting
the United Nations “Global Compact” adopted in July 2000 and
the Keidanren “Charter of Corporate Behavior. This policy wasapproved by the Board of Directors of F-tech Inc. on November
21, 2023.
Through the implementation of this policy, we will work
together with our stakeholders to engage in business activities inorder to continue to be a company that society accepts. This
policy is disclosed on the F-tech Group's website and iscommunicated to all stakeholders.

T his policy applies to all officers and employees (including
temporary employees) of the F-tech Group (F-tech Inc. andits subsidiaries). The F-tech Group also expects all business
partners of Ftech group to understand and support thecontents of this policy and requests to comply with it.

Environment

Management Meeting

Division in Charge

Introduction

2 Scope (of a document)

SocialSustainability Committee

F-tech Group Ethics Policy

Governance

We have established the Sustainability Committee, which isbased on the Companywide CSR Committee, to further
strengthen our commitment to sustainability. The committee ischaired by the president and CEO and is composed of
department heads, section chiefs, and executive officers.
The committee deliberates the direction that the Company
should take, and each department promotes initiatives to solve
issues in accordance with the direction determined by thecommittee and reports the results. Furthermore, theSustainability Committee collaborates with other specializedcommittees, such as the Compliance Committee, to function in a
unified manner across the entire Company. The Sustainability
Promotion Department, which serves as the secretariat, reviews

Each year, the F-tech Group sends an F-tech CSR Verification
Sheet to each of its 18 subsidiaries in Japan and overseas toenable self-assessments (193 questions covering environmental,
labor and human rights, ethics, and sustainable materials
procurement, among others). Based on the results, theSustainability Committee secretariat takes the lead in overall
evaluation and identification of issues for the Group, and thenreports them to the Board of Directors. These efforts are
conducted to strengthen corporate governance and internal
controls, with a focus on addressing the issues that have been
identified.
We are promoting various initiatives to reduce environmental
impacts at each site, share activity status, create a working
environment that facilitates a work-life balance, improve safetylevels and overall quality throughout the Company, engage indialogue and timely disclosure with stakeholders, and create aworkplace environment that encourages open communication
among all employees.
“Our Action Guidelines” and the accompanying explanatory
document serve as the starting point for actions by Company
employees to promote sustainability. We will continue toadvance efforts to solve social issues and realize a sustainable
society.

The F-tech Group has established new policies on ethics, human rights, and labor. Specifically, we have introduced the F-tech Group Ethics
Policy, the F-tech Group Human Rights and Labor Policy, and the F-tech Procurement Basic Policy to strengthen the sustainability of theCompany and to foster deeper trust with stakeholders. These initiatives are based on the three perspectives of promoting sustainability,
conducting ethical business operations, and respecting human rights. We believe that these efforts will contribute to creating a better world
and fulfilling our social responsibilities in a sincere manner. The F-tech Group will continue to work towards sustainability, guided by thesenew policies, in collaboration with all stakeholders, and strive to be a company that is expected by society and remains committed tosustainable business activities.

Management Strategy

Establishment of a Sustainability Committee

Global Initiatives

New Initiatives Targeting Sustainability and Social Responsibility

Message from the President

We have been working towards achieving sustainable
management, aiming to balance the realization of a sustainable
society with the sustainable growth of the Company. However,the surrounding business environment, including climatechange and population decline, has undergone significant
changes. In response, we have established the Sustainability
Promotion Department to further achieve the sustainablegrowth of the Company and society. The main purpose of thisestablishment is to formulate and promote measures related tosustainability activities and carbon neutrality, as well as toenhance various information disclosure initiatives.
We will continue working earnestly to solve social issues,
always taking global trends and the Company's business model
into account.

matters reported and discussed matters at management
meetings and presents them to the Board of Directors. The Boardof Directors uses this information as a reference to implement
necessary governance and develop strategies for achieving asustainable future. The Company will continue to maintain thisstructure and pursue sustainability initiatives.

Introduction

Establishment of a Sustainability Promotion
Department

24

Governance

Sustainability Promotion Structure25

F-TECH CSR REPORT 2023

T his policy applies to all officers and employees (including
temporary employees) of the F-tech Group (F-tech Inc. andsubsidiaries).
The F-tech Group also expects all of its business partners
to understand and support the contents of this policy andencourages them to comply with it.

3 GovernanceT he F-tech Group has established respect for humanrights as one of its most important management issues,
and will clarify the officers responsible for formulating
and implementing this policy, establish an appropriate(1) Human Rights Due Diligence
In order to fulfill its responsibility to respect human rights,
the F-tech Group will establish a human rights due diligencesystem in accordance with procedures based on the United
Nations Guiding Principles on Business and Human Rights,
and shall continuously strive to prevent or mitigate negative
impacts on human rights.
(2) Remedies and Corrections
When it becomes clear that F-tech Group has directly or
indirectly caused or contributed to a negative impact onhuman rights, F-tech Group shall work to remedy thesituation. As part of these efforts, the F-tech Group has
established “F-tech Group Corporate Ethics Improvement
Proposal Desk,” which all directors and employees canconsult with and report to, as well as “Contact Us” page on
the F-tech Group's website will also allow stakeholders toreport such matters.
(3) Education and Training
The F-tech Group conducts appropriate education andtraining for all officers and employees to ensure that thepolicy is properly understood and implemented.
(4) Communication and Consultation with Stakeholders
The F-tech Group will consult with outside experts andT he F-tech Group continues to promote fair, just, andtransparent transactions in accordance with Mission Statement,
Our Action Guidelines, and various other policies. We arecommitted to fostering a spirit of coexistence and mutual
prosperity with our business partners.
Open and Fair Transactions
In its procurement of materials and parts, F-tech Group
conducts purchasing activities that support appropriate
corporate activities through fair, equitable, and opentransactions both in Japan and overseas. In selecting suppliers,
we make comprehensive evaluations and judgments from avariety of perspectives, including quality, technology, price,delivery time, stability, and commitment to continuous
improvement and systems.
Partnership with Business Partners
We will strive for mutual understanding with our business
partners as a good partner producing better products, andbuild a relationship of trust with the idea of coexistence andmutual prosperity by making full use of mutual wisdom andingenuity from an equal standpoint.
Promotion of Green Purchasing
In order to improve environmental conservation efforts, theF-tech Group considers environmental management activities
in the supply chain to be essential. We distribute the F-tech
Environmental Policy and seek understanding and cooperationfrom our business partners to aim for the purchase ofenvironmentally friendly materials and components withminimal environmental impact. Furthermore, we strive forlogistics efficiency in order to reduce the environmental impactof transportation.
Consideration for Human Rights and Labor
The F-tech Group conducts procurement activities that giveconsideration to human rights and labor, both in Japan andoverseas. We avoid the procurement of raw materials and parts
that have not given due consideration to conflict minerals andthe like.
Compliance with Laws and Regulations
The F-tech Group complies with all applicable laws, regulations,and social norms in each country and region in which it
conducts its purchasing activities, and ensures that
confidentiality is maintained.

F-TECH CSR REPORT 2023

Global Initiatives

 e conduct periodic questionnaires on stress checks at eachWworkplace, and in the course of these checks, we review forsign of any occurrence of harassment and other problems.
Based on the results of this analysis, each organization andworkplace implements improvement measures, and theCompliance Committee monitors the progress of thesemeasures.

2 Scope (of a document)

5 Practice of respect for human rights

F-Tech procurenent Basic Policy

Environment

7 Understanding Ethics andCompliance AwarenessT he F-tech Group recognizes that its business activities may
affect the human rights of various internal and external
stakeholders.
The F-tech Group respects human rights as expressed in
the International Bill of Human Rights and the ILO Core
Labour Standards listed in the Declaration on Fundamental
Principles and Rights at Work. We also support the United
Nations Guiding Principles on Business and Human Rights
and work toward implementation in our business activities.
The F-tech Group shall comply with the laws andregulations of each country and region in which it operates.
However, in cases where there is a conflict between the laws
and regulations of each country or region and international
human rights principles, we will seek to respect international
human rights principles.

The F-tech Group recognizes the following as key issues
related to human rights and will promote initiatives torespect human rights. We will continuously review the policy
as human rights risks may change with businessdevelopment and business trends.
(1) Prohibition of discrimination and harassment
We will not engage in discrimination or harassment basedon race, nationality, place of origin, gender, age, religion,
creed, sexual orientation, gender identity, or disability.
(2) Prohibition of forced labor and child labor
We do not permit any form of forced or compulsory labor or
the employment of children under the minimum age for
employment as stipulated by the laws of each country or
region.
(3) Respect for workers' rights
We will respect workers' rights to organize, bargain
collectively, and act collectively, and will prevent low-wagelabor and long working hours.
(4) Creation of a safe and healthy working environment
We will strive to maintain a safe and healthy working
environment and promote the maintenance andimprovement of the physical and mental health of ouremployees.
(5) Sharing human rights with business partners
We will share with our business partners our concern forhuman rights, labor, the environment, and anti-corruption,and engage in ongoing discussion regarding respect forhuman rights.

SocialIn order to create ethical awareness among all F-tech
employees and to ensure that all employees are aware of thecontact information for the Corporate Ethics Improvement
Proposal Desk, we distribute the “Our Code of Conduct”
pocket book and a guidebook for easy understanding. In
addition, information is distributed through a monthly e-mailnewsletter, as well as periodic compliance training will be
provided to employees according to job level.

1 Commitment to Respect for Human Rights

4 Respect for Human Rights

Governance

6 Education

The F-tech Group has established “Respect for Human Rights” aspart of “Our Code of Conduct”. The F-tech Group has recently
adopted the corporate motto, “We will do our utmost to create
value with high aspirations and sincerity from a global
perspective, contribute to national society, and build aprosperous future. and the management philosophy “Respect for
Humanity,” and to further substantiate our respect for humanrights, we have established the F-tech Group Human Rights andLabor Policy (hereinafter referred to as the “Policy”).
This policy is guided by the United Nations Guiding
Principles on Business and Human Rights, adopted in June 2011,
and in accordance with international norms on human rights,
including the United Nations Bill of Rights and the ILO
Declaration on Fundamental Principles and Rights at Work, andafter obtaining advice from outside experts, was approved by the
Board of Directors of F-tech Inc. on November 21, 2023.
Through the implementation of this policy, we will work
together with our stakeholders to engage in sustainable businessactivities in order to continue to be a company that society
accepts.
This policy is disclosed on the F-tech Group's website and iscommunicated to all stakeholders.

engage in communicating and consulting with relevant
stakeholders regarding implementation of this policy.
(5) Information Disclosure
The F-tech Group shall disclose information on its efforts torespect human rights through its website and other means.

Management Strategy

The F-tech Group has established a “F-tech Group Corporate
Ethics Improvement Proposal Desk” both internally andexternally for direct contact and consultation regarding
human rights (harassment and working conditions), corrupt
practices (bribery, anti-competitive practices, etc.), andviolations of laws, regulations, and corporate ethics.
Proposals to the desk will be accepted from all
employees of the F-tech Group. The privacy of the proposer
shall be protected, and necessary measures shall be taken to
ensure that the proposer will not be disadvantaged in theperformance of his/her duties because of his/her proposal tothe contact point. We will conduct fact-finding investigations
to determine whether there are any legal or ethical issues
with respect to the reports we receive. Depending on theimportance of the suggestion, the Company will takeinternal disciplinary action, issue cautions and instructions,and alert employees via e-mail or other means.

Introduction

internal system, and reflect the policy in its business
policies and procedures.

Message from the President

5 Internal Reporting System

F-tech Group Human Rights
and Labor Policy

Introduction(3) Prohibition of Fraud and Deception
The F-tech Group, in accordance with its belief that fraud is
unacceptable, will strive to create an organization that does
not engage in intentional acts of deception,
misrepresentation or concealment of material facts, orcomplicity in crimes such as money laundering.
(4) Prohibition of anti-competitive practices
The F-tech Group will follow the laws and regulations of all
countries in which it operates, including “prohibition ofprivate monopolization,” “prohibition of unfair restraint oftrade (cartels and bid rigging),” and “prohibition of unfair
trade practices,” and will conduct business through free andfair competition.
(5) Ensuring Information Security
The F-tech Group is committed to the appropriate
management of its information assets, the prevention of
information security incidents, and the safe and accurate
operation of its information assets.

26

GovernanceDirectors and Auditors

Directors

Auditors

Hajime Fujitaki

Yasuyuki Ikezawa

Michiaki Nakanishi

President & CEO

Director & Senior Managing Executive Officer
Global Chief SED Officer

Full-time Auditor

Full-time Auditor

Significant Concurrent Positions Outside the Company
None

Significant Concurrent Positions Outside the Company
None

Significant Concurrent Positions Outside theCompanyNone

Significant Concurrent Positions Outside theCompany
None

Career Summary
Dec. 1994 Joined the Company
Jun. 2004 Director
Jun. 2008 Director & Senior Managing Executive Officer
Mar. 2010 Division Manager of Management Planning Division
Apr. 2012 Chief Sales & Marketing Officer and Regional CEO of North America
Apr. 2013 Chief Domestic Business Officer
Apr. 2014 Director & Executive Vice President
Apr. 2015 President & CEO (current position)
Dec. 2021	Member of Nomination and Remuneration Committee (current
position)

Career Summary
Aug. 1981 Joined the Company
Jun. 2004 Senior Operating Officer
May. 2008 President of F&P America Mfg. Inc.
Apr. 2012 Division Manager of Quality Assurance DivisionJun. 2012 Director& Managing Executive Officer
Apr. 2013 Division Manager of Production Planning Division
Apr. 2016 Division Manager of Sales & Marketing Division
Apr. 2017	Division Manager of Sales & Marketing Division and Regional CEO of
Asia
Apr. 2020 Director & Senior Managing Executive Officer (current position)
Apr. 2020 Global Chief SED Officer (current position)

Career Summary
Apr. 1980 Joined the Company
Apr. 2002 Administration Block Leader of Development Planning OfficeJun. 2004 Administration Block Leader of Kuki Plant
Mar. 2009 Administration Block Leader of Kameyama Plant
Apr. 2013 Director of F&P Mfg., Inc.
May. 2016 Managing Director of F&P Mfg., Inc.
Jun. 2018 Full-time Auditor (current position)

Career Summary
Apr. 1985 Joined The Hyakugo Bank, Ltd.
Jun. 2013 General Manager of Kameyama Branch, The Hyakugo Bank, Ltd.
Jun. 2015	Business Promotion Officer of Branch Management Division, The
Hyakugo Bank, Ltd.
Jul. 2017 Joined the Company
Apr. 2018 General Manager of Internal Audit Office
Apr. 2020 Personnel Department, Management Planning DivisionSep. 2020 Director of F&P Mfg., Inc.
Jun. 2023 Full-time Auditor (current position)

Hiroyuki Aoki

Naoko Tomono

Hiroshi Takahashi

Kenichiro Masuda

Director & Senior Managing Executive Officer
Division Manager of Management Planning
Division
Global Business Management Officer

Director

Auditor

AuditorSignificant Concurrent Positions Outside the Company
Director of Non-life Insurance Policy-holders Protection
Corporation of Japan
Chairperson of Egusa Foundation for International Cooperation in theSocial Sciences
Advisor of Atsumi & Sakai
Representative Director and Vice Chairman of Japan Institute ofBusiness Law

Significant Concurrent Positions Outside the Company
President of The Saitama Resona Foundation for Industrial andEconomic Promotion
Outside Auditor of Daizo Corporation

Career Summary
Aug. 1985 Professor, Faculty of Law, The University of Tokyo
Dec. 1998	Director of Non-life Insurance Policy-holders Protection
Corporation of Japan (current position)
Apr. 2007 Executive Vice President of The University of Tokyo
May 2009 Professor Emeritus of The University of Tokyo
Jun. 2009 Special Counsel of Mori Hamada & Matsumoto
Feb. 2010 Director of Japan Institute of Business Law
Jun. 2017	Chairperson of Egusa Foundation for International Cooperationin the Social Sciences (current position)
Apr. 2018 Advisor of Atsumi & Sakai (current position)
Jun. 2019 Outside Auditor of the Company (current position)
Jun. 2022	Representative Director and Vice Chairman of Japan Institute ofBusiness Law (current position)

Career Summary
Apr. 1984	Joined Saitama Bank, Limited (currently Saitama Resona Bank,
Limited)Jun. 2011	Executive Officer, General Manager of Group Strategy Division,
Resona Holdings, Inc.
Apr. 2013 Executive Officer, Resona Bank, Limited
Apr. 2013 Executive Officer, Resona Holdings, Inc.
Apr. 2016	Director and Managing Executive Officer, Saitama Resona Bank,
LimitedApr. 2018	Representative Director and Senior Executive Officer, Saitama
Resona Bank, Limited
Jun. 2019 President and Representative Director, Resona Guarantee Co., Ltd
Apr. 2022	President, The Saitama Resona Foundation for Industrial andEconomic Promotion (current position)
Jun. 2022 Outside Auditor of the Company (current position)
Oct. 2022 Outside Auditor of Daizo Corporation (current position)

Nobuhiro Koga
Director

OutsideIndependent

F-TECH CSR REPORT 2023

Name/Item

GenderIndependence

Yuichi Fukuda

Male

Hajime Fujitaki

Male

Hiroyuki Aoki

Male

Naoko Tomono

FemaleOutside/Independent

Nobuhiro Koga

Male

Outside/Independent

Corporate
Management

Technology/
Development◯◯

Production/
Engineering

Sales/
Procurement

Finance/
Accounting

◯

◯

◯

◯

◯

Governance/
CSR

Academic
Experience

Overseas
Experience

◯
◯

◯

◯

Legal/Risk
Management

◯

◯

◯

◯

◯

◯

Global Initiatives

Career Summary
Apr. 1996	Associate Professor, Faculty of Fundamental Engineering (formerly
Department of Mechanical Engineering), Nippon Institute ofTechnology
Apr. 2002	Professor, Faculty of Fundamental Engineering (formerly
Department of Mechanical Engineering), Nippon Institute ofTechnology (current position)
Apr. 2013	Chairman, Industry-University Cooperation and Entrepreneurial
Education Center, Nippon Institute of Technology (current
position)May. 2016	Director, Association of Saishin Collabo Sangakukan industryacademic-government collaboration (current position)
Jun. 2018 Outside Director of the Company (current position)
Dec. 2021	Member of Nomination and Remuneration Committee (current
position)

Skill Matrix

Environment

Significant Concurrent Positions Outside the Company
Professor, Faculty of Fundamental Engineering, Nippon Institute ofTechnology
Chairperson, Industry-University Cooperation and Entrepreneurial
Education Center, Nippon Institute of Technology
Director, Association of Saishin Collabo Sangakukan industryacademic-government collaboration (current position)

27

OutsideSocialCareer Summary
Apr. 1988	Joined Sogo & Seibu Co. Ltd. (formerly Seibu Department Store Co.
Ltd.)
Dec. 2008 Registered as an attorney at law (Daini Tokyo Bar Association)
Jan. 2009	Joined T and T PARTNERS LAW OFFICE (formerly Takagi Yoshiko
LAW OFFICE)
Jan. 2013 Partner (current position)
Jun. 2016 Outside director of Taisei Lamick Co., Ltd. (current position)
Jun. 2017 Outside director of the Company (current position)
Dec. 2021	Chairperson of Nomination and Remuneration Committee(current position)

Independent

GovernanceSignificant Concurrent Positions Outside the Company
Partner of T and T PARTNERS LAW OFFICE
Outside director of Taisei Lamick Co., Ltd.

OutsideManagement Strategy

Career Summary
Aug. 2015	Joined the Company as Assistant Division Manager of Management
Planning Division
Apr. 2016 Senior Operating Officer
Apr. 2016	Division Manager of Management Planning Division (current
position)
Jun. 2016 Director and Senior Operating Officer
Apr. 2020	Director & Senior Managing Executive Officer (current position)
Apr. 2020 Global Business Management Officer (current position)

Independent

Message from the President

Significant Concurrent Positions Outside the Company
None

OutsideIntroduction

Yuichi Fukuda(Engineering)

F-TECH CSR REPORT 2023

28

Human Capital Initiatives

Efforts to Enhance Corporate Value
by Cultivating Human Resources

Hiroyuki Aoki
Director & Senior Managing Executive Officer
Management Planning Division Manager

Human Resource Strategy

Nurturing People

Mentoring System

individuality and enthusiasm of each employee, demonstrating a
growing awareness of the importance of human capital. These

environment. Additionally, as a member of the local community,
the Company engages in social contribution activities such as
clean-up campaigns and food drives, aiming to contribute to thecreation of a sustainable and prosperous society.
29

F-TECH CSR REPORT 2023

In FY2023, the Company launched “F.Career Design Advance,” acareer development and engagement enhancement program
based on the F.Career Design program that was briefly
implemented by the Company’s president in 2014. The program
targets approximately 70 influential employees, including thoseat subsidiaries, and consists of 10 sessions. Its objective is toenhance employee engagement and reassess career plans.
This program provides an opportunity to learn about theessence of the Company's corporate philosophy and values, its
founding story, and its history of taking on challenges, as well as
the current situation the Company faces. Participants will also

The Company is committed to human resource developmentthat maximizes the motivation and individuality of each
employee and helps them embody elements of ourmanagement philosophy, of having a “challenging spirit” and“respecting people.”
We provide various types of training programs to support
the development of our employees based on their growth stage
and career. These programs include “hierarchy-based education,”
which focuses on providing new employees with fundamental
knowledge on the significance of work and safety, as well as
leadership training for newly appointed managerial positions
from a management perspective. We also offer “purpose-based
education” to nurture people who excel in specific areas, such as
those working at overseas locations. Additionally, we have “jobspecific education” programs to develop professionals in various
fields. Furthermore, we encourage self-development by
providing opportunities for employees to enhance their skills andknowledge. Through these initiatives, we strive to foster thegrowth of each individual and support their career progression.
F-TECH CSR REPORT 2023

Global Initiatives

efforts include talent development and creating a healthy working

Cultivating Human Resources Capable ofActing Autonomously
Working to Enhance Engagement

Training and Education

Environment

The Company actively discloses its efforts to nurture theIn addition to providing an environment for people to work, we
also offer life planning seminars and other information to help
people think about working after retiring at 60.

SocialSocialNumber of rehired retirees (mentor candidates) (As of
September 30, 2023)•Total number rehired as part-time employees: ................. 49•Of whom, rehired as takumi mentors: ................................. 16

Governance

In July 2019, we launched our “takumi” (mentor) system toprovide a new way for retired employees to work, boosting
retirees’ motivation while passing on their skills. In this system,
our talented workers with advanced skills are recognized as“takumi,” and they play the important role of instructors who
pass on their skills to their successors. Their remuneration isdetermined according to their roles and responsibilities.

receive direct explanations from top management regarding thefuture direction the Company should take and the qualities
required to compete globally. In dialogue with top management,
participants have expressed appreciation for the program, statingthat it has allowed them to reaffirm the meaning behind our
mission statement andcorporate philosophy,
understand thequalities the Company
seeks in its employees,
and clarify their own
roles. We will continue
to offer this program
going forward.

Management Strategy

The Company is committed to helping to develop employees’ capabilities through efforts tailored to individual growth stages and careers. We
seek to harness employees’ motivation and take advantage of their individuality, based on our management strategy, in order to maximize theirabilities. Furthermore, recognizing that the abilities and values of diverse talents, regardless of gender, nationality, or race, enhance a company's
creativity and improve its corporate value, we aim to actively recruit diverse personnel and create an organizational culture and work
environment where diverse talent can work and thrive in a healthy manner.

Message from the President

To date, many companies have regarded personnel as a cost necessary to provide
the labor for business operations, referring to them as “human resources.”
However, in recent times, there has been a shift in thinking to consider personnel
as an element of a company's capital and need to maximize their value, alongwith the recognition that this is necessary for enhancing corporate value.
As part of its management strategy, the Company aims to strengthen its
earning power by pursuing the essence of manufacturing and achieving asounder financial structure. It also aims to create opportunities for growthbusinesses and pursue sustainable management. To ensure the successful
implementation of its management strategy, the Company will focus on
enhancing its human capital in tandem with its efforts to augment corporate
value.

Introduction

Message from the
Executive in Charge of
Human Resources

30

Creating a Comfortable Working Environment

Aiming to Create a Work Environment
That Is Comfortable for Everybody

F-tech’s HR Development System
Guided by its philosophy of “respecting people,” the Company
focuses on human resource development so that each and every
employee can achieve personal growth. We provide a wide rangeof educational and training programs, including onboarding

Employee Training StructureManagement, Other

SelfWorkplace-Specific Training Development

Promoting the Active Participation of People
with Disabilities
F-tech actively promotes the employment of people withVOICE

F&P Mfg., Inc.

Flexible Workstyle Initiatives

Understanding Diversity
and Improving Quality(Diversity Management)

I am currently working at the Quality Assurance Department at F&P,
utilizing the experience in quality management systems and onsite improvement activities that I gained in Japan. Canada is acountry of immigrants, and F&P has a large number of employees
from around the world. In the production area, there are many
workers of Indian descent, and we create and use work instructionsin the other languages for workers who do not understand English.
Additionally, unlike Japan, where male employees dominate incertain departments, women play a more active role, and there aremany women in managerial positions. The company places astrong emphasis on diversity management. In terms of education,
we have a training room where we provide training for new

Hikaru Tomonaga
F&P Mfg., Inc.

employees, education on quality, environment, safety, and health,
IATF16949 as well as training on welding skills. It has been a year
since I was assigned here, and I am grateful that all the employees
have welcomed me warmly. As someone who naturalized to Japanand is currently working in Canada, I have once again realized theimportance of mutual respect in building good relationships withcolleagues in a multicultural environment. I have frequentdiscussions and exchanges of opinions with local staff members invarious situations. By understanding and accepting the culture andcustoms of others and respecting diversity, we can earn trust, which
I believe has a significant impact on building relationships withpeople.

F-TECH CSR REPORT 2023

Global Initiatives

looking for, I decided to apply to work at F&P.
My English is by no means good. However, through daily
study by working to understand those around me, I can now
communicate in English in my daily interactions.
Having actually worked as an expatriate, I realized that there
are many things that you can't fully understand just by going on
business trips abroad. I feel the differences between Japan andother countries in various aspects, such as the way people
approach and carry out work and tasks. It is important tothoroughly understand the ways local offices work in order tosucceed in anything. I believe that these are things that can only
be understood when you actually working alongside local
superiors and colleagues.
As part of the F-tech family, I will work toward the further ofoverseas locations, leveraging my valuable overseas working
experience.

VOICE

Environment

I am Yoji Takano, and I have been working at F&P as a quality
assurance officer since April 2022. I was assigned to my current
position through the overseas recruiting system introduced in
FY2021.
Until my transfer to F&P, I had no experience working
overseas. However, during my business trips for the Quality
Assurance Department, I saw firsthand that things considered
normal in Japan were not being done at our overseas locations.
This experience made me realize the need to strengthen
production and operational capabilities at our overseas bases.
Additionally, F-tech's overseas sales ratio has now reachedapproximately 90%, so overseas markets have become our main
focus. This fueled a strong desire to take on improvement
initiatives at our overseas locations.
Around that time, I applied for an open position as an
expatriate, and after comparing it with the type of work I was

Yoji Takano

Social(Cultivation through the Overseas
Recruiting System)

F-TECH CSR REPORT 2023

The F-tech Group has 19 overseas locations, and collaboration
with each of these locations is essential for the overall growth of
the Group. Furthermore, overseas sales account for
approximately 90% of the Group's total sales, underscoring theneed to actively work on the globalization of our business andour workforce.
To promote employment diversity, we actively recruit
international students in our hiring of new graduates. Since 2013,
we have also participated in the Boston Career Forum to recruit
Japanese and foreign students studying abroad.
To date, we have hired 18 foreign nationals throughrecruitment activities in Japan and 15 people through the Boston
Career Forum.
We also welcome technical and short-term trainees fromoverseas locations.
In Japan, we strive tocreate a working environmentthat is comfortable for people
who do not read Japanese by
employing multilingualsignage and manuals, as well as promoting interaction throughinternal events.

Flexible Workstyle Initiatives

On Cultivating People

31

Employing Foreign Nationals

GovernanceOn-siteimprovement
proposals
Poka-Yoke cost
reduction

F-tech strives to create aworkplace where all employees,
regardless of gender, candemonstrate their individuality
and abilities. In departments
such as manufacturing,
engineering, development, and procurement, which havehistorically been predominantly male, we are actively working to
improve the work environment and promote the assignment of
women, enabling them to work in various fields throughout theCompany. Until a decade ago, it was uncommon for women towork in manufacturing sites that dealt with sheet metal, forexample. However, with the use of support equipment, it is now
possible for women to handle such tasks, and expectations
toward the cultivation of female technicians is growing. Goingforward, based on the Act on the Promotion of Women's Active
Engagement in Professional Life, we will further expand theopportunities for women to excel and continue to make efforts
in the areas of recruitment, promotion, and leadershipdevelopment. To promote the active participation of women, we
also need to reassess men’s working styles. We will strive tocreate an environment where both men and women can have afulfilling social life by balancing work and personal life.

Management Strategy

English conversation, correspondence education

Educational support (skills-based education, etc.)

TWI
supervisor training

Subcontracting Act

ISO 14001 basic course

Reading financial statements

Internal environmental auditor training course

Functional training course

KYT

for new
New employees Training
employees

Environment

TQM course

Writing analysis reports
QCIF/QCIJ courses, etc.

General

RST

Mid-career
employeetraining

GeneralGlobal HR development training (overseas training)

Supervisor
training

Fukuda Juk

Staff
administrator
Staff engineer
GeneralNew
management
training

Internal quality auditor training course

Chiefadministrator/
chief engineer

Job-Specific Training
Quality

Risk assessment training

Section manager

Education for passing on core technologies and skills (subcommittee)

Department
managerManagement
training

Core human resource development

General manager

ObjectiveBased Training Health and Safety
Next-generation management

Management

Senior chief
administrator/
senior chiefengineer

Level-Based
Training

Promoting the activities of Female
Employees

disabilities, participating in information exchange meetings withspecial needs schools, among other initiatives. We strive to create
an environment where individuals can work with a sense offulfillment, taking into account the extent of their disabilities
while maximizing their abilities. Currently, we maintainemployment rates that surpass statutory requirements. In
FY2022, our employment rate was at 2.6% (23 people) comparedwith the statutory rate of 2.3% (20 people).

Message from the President

Level

Utilizing Diverse Human Resources

Introduction

programs for new employees who are taking their first steps into
the professional world, training tailored to different levels andfunctions, and opportunities for self-development in pursuit offurther skill enhancement. By realizing individualized development
based on each employee's goals, the Company creates anenvironment where people can achieve maximum performance.

32

Occupational Health and Safety Initiatives

Aiming to Bolster Safety Levels throughout the Group

Creating a Comfortable Working Environment

Keeping Overtime Hours within 20 Hours per Month
Fiscal year

2020

2021

2022

Average monthly overtime hours

5.9H

6.3H

3.7H

Aiming to Completely
Eliminate Paid Leave
Expiration

Goal Achieved for
24 Consecutive Years1．
We provide the “Guidebook for Supporting a Balance
between Work and Childcare/Nursing Care” on the
Company's portal site.
W2．
 e hold explanatory meetings for managers on revisions
to the Act on Childcare Leave, Caregiver Leave, and Other
33

F-TECH CSR REPORT 2023

Returnees

6

6

7

5

2022
5
3
8
8
(expected)

100% of eligible women took maternity leave (ratio of pregnant
women who took maternity leave)
96.9% return-to-work rate (rate of men and women who
returned to work after taking leave)•Employees can work shorter hours when providing childcare
to children until the end of the third grade of elementary
school, which exceeds the legal requirement. (Currently 13
employees are using this system.)•Employees can take nursing care leave up to three times for a
maximum of one year per family member, which is longer thanlegally mandated.
In 2015, we introduced a general employer action plan based on
the Act on Advancement of Measures to Support Raising NextGeneration Children, administered by the Ministry of Health,Labour and Welfare.
From April 2018 to March 2021, we worked on the following
initiatives:
1．C
 onducting explanatory sessions on childcare support
systems for managerial employees.
2．Implementing a system of interviews before
and after taking childcare leave.
As a result of these efforts, we obtained theKurumin certification for the second time inAugust 2021.

Human Rights Awareness Initiatives
In line with the Company’s philosophy of respecting people, we
conduct training for employees and disseminate information
through monthly newsletters to prevent various forms ofharassment, including child labor and forced labor, and topromote the respect for human rights.
We have established anonymous reporting channels
internally and externally to address any potential human rights
violations or compliance issues, ensuring a supportive
environment where employees can feel secure in seeking
assistance. We strive to create a workplace with an open andtransparent atmosphere.

Conducting Health Checkups
To maintain and improve the health of our employees, which area vital corporate resource, we conduct annual health checks forall employees. Additionally, we have established a system topartially subsidize the cost of comprehensive healthexaminations for employees who wish to have moresophisticated checks.

*Head office, Kuki Plant, Kameyama Plant, Haga Technical Center and Kazo Equipment
Center

System for Sharing Information about Operational Accidents within the Group
Location

Overseas
sites

DomesticplantsReporting
Methods

Type of Accident

Disaster Communication Network

Management Meeting
Reporting

Category B or higher accident
Note: Excludes accidents that are
unclear, such as those involving
muscular pain (at the discretion of thebase director)

In the event of a serious accident(Category S accident or a fatal traffic
accident), the safety supervisory
officer (Production Planning Division
Manager) is contacted immediately.
After that, information is sent via theaccident communication network.

Covered by workers'
compensation
All accidents

Information shared
via the accident
communication
network

Reported once permonth to theManagement
Meeting

Regular reports on domestic
and international accidents atmonthly Management
Meetings

Telephone, fax, e-mailAccident bulletin, e-mailStandard Categories for Operational Accidents
Category

Description
Death

S

Death or loss of function or significant disability

A

Requiring ongoing therapy and involving partial or temporary loss offunction

B

Temporary medical treatment action is required (requiring the findings of a medical specialist or occupational physician)• Requires examination at a medical institution or diagnosis/treatment by a physician but not requiring absence from work for continuous
treatment for four days or more
• Back pain/tendonitis requiring a corset or other protective device

C

Items that can be handled with first aid and confirmation of examination (keeping a record of location, contents, treatment, etc.)• Cuts that do not require special hemostatic treatment and can be treated with first aid such as bandages• Bruises, sprains, or burns that can be treated with ointments or compresses

Severe residual disability (permanent total/partial
incapacity for work, Categories 1 to 14)(Requires the findings of a medical specialist or
occupational physician)

F-TECH CSR REPORT 2023

Global Initiatives

We promote the following working environment initiatives
targeting employees who are raising children or caring for family
members. Our aim is to foster a cooperative work environment
with mutual understanding between supervisors andsubordinates.

2021
4
1
5

Environment

Helping to Balance Work alongside Childcare
and Nursing Care

2020
1
6
7

SocialF-tech has set the goal of having all employees use up theirannual paid leave before it expires by the statute of limitations,and we have reached this goal among regular employees for 24
consecutive years. Each department creates a plan for utilizing
annual paid leave and provides progress updates at meetings
every three months to ensure progress is carefully managed.
Additionally, the Company has revised its policies to allow
employees to take leave in half-day increments up to 20 times
per year. This encourages people to take leave and provides
flexibility to accommodate a work-life balance, includingchildcare and caregiving responsibilities.

2019
3
3
6

In accordance with our reporting criteria, in the event of abusiness accident occurring at a domestic or overseas location of
the F-tech Group, we share information immediately throughout
the Group, including information about countermeasures. We
have established an awareness-raising system to prevent similar
accidents from recurring. We conduct prompt and thoroughinspections in the event of an operational accident or accident
that causes major physical damage, revealing dangers that wereformerly hidden. Based on the results of such inspections, we
conduct initiatives at Group locations such as reviewing safety
rules and criteria.

Governance

Promoting the Use of Annual Paid Leave

2018
1
6
7

F-tech* and Fukuda Engineering Co., Ltd. have set a
Companywide safety policy for FY2022: “We aim to improve thesafety level at all of our sites by globally standardizing andsharing safety and health rules.” Accordingly, they continue to
implement occupational health and safety activities throughout
the Group.
In addition, to comply with revised health and safety
legislation, we established consistent safety evaluations and rules(routine/non-routine work) and undertook initiatives to achieve
zero lost-workday accidents and also prevent accidents that do
not involve lost workdays.
In FY2023, as in FY2022, we will continue working toward ourgoal of zero accidents by further building on our existing efforts.

Management Strategy

We take a proactive stance toward reducing working hours
through labor–management cooperation and time
management. In FY2022, average monthly overtime hours were
down 2.6 hours from the previous year, to 3.7 hours. We haveintroduced a flextime system at the Haga Technical Center toenable employees to balance their personal lives and work more
efficiently. This system has been gradually expanded to otherdepartments, enabling employees to adjust their working hours
according to the demands of their assigned tasks. This hashelped to reduce overtime hours.

People Taking Childcare Leave
Men
Women
Total

Establishing a Groupwide Health and Safety
SystemMessage from the President

Reducing Overtime Hours

People Returning to Work Following Childcare Leave

Groupwide Efforts to Embrace a Safety Policy
Aimed at Zero Accidents

Introduction

F-tech emphasizes the importance of work-life balance. We
believing that in order to work with a sense of fulfillment, it isnecessary to have a fulfilling personal life as well. Under the
principle of respecting human dignity, F-tech strives to be a
Company where all employees, not just those with childcare or
caregiving responsibilities, have a comfortable and supportive
work environment. This is a goal shared across the entire Group.

Measures for the Welfare of Workers Caring for Children
or Other Family Members.
3．We post notices encouraging male employees to takechildcare leave.

34

Quality Improvement Initiatives

Launch of the 15th Mid-Term Business Plan
Aiming to Enhance Customer Satisfaction by
Pursuing the Essence of Quality
Challenge for New, Better than Ever
Promoting Quality Control DX

Last year was the final year of the 14th Mid-Term Business Plan.
The F-tech Group focused on quality improvement with the goalof optimizing value provided and maximizing customer
satisfaction. We made progress in improving quality indicatorssuch as customer registration issues and in-process waste,earning us quality awards from major customers in various
regions. However, we also saw the emergence of risks that could
negatively impact quality, particularly in North America, due toincreasingly volatile production levels and labor shortages. We
recognize the need to address these risks to prevent them frommanifesting. Against this backdrop, for the 15th Mid-TermBusiness Plan, we have established a quality policy, of “enhancing
customer satisfaction by pursuing the essence of quality.” In
addition, we will prioritize the promotion of two key initiatives
across all locations.
The first initiative, “enhance supervisors’ skills,” recognizes thegrowing role and importance of supervisors. In an ever-changing
landscape, supervisors must be leaders in the pursuit of excellent
quality. We will reinforce our training and development to ensurethat supervisors have the knowledge and skills to effectively
convey quality management to the workplace and control
quality reliably on a daily basis. Under the second initiative,“reinforce operational oversight,” we will enhance the daily
confirmation and monitoring of operations on production lines.
By improving the understanding of and adherence toinstructions, we aim to enhance the quality of work and ensurecompliance.
To achieve our objectives for the final year of the 15th MidTerm Business Plan, we will recommence the Global Quality Joint
Conference that was postponed due to COVID-19. In this way,the entire F-tech Group will come together and strengthen its
quality-enhancement activities.

To prioritize our pursuit of the essence of quality, we will use
artificial intelligence and other information technologies to makequality control more efficient. First, we have developed aninternal system (Q-FIND *1) that allows us to share quality
information across the F-tech Group. This system enables all
employees to share the content and trends of past issues basedon the latest quality records, and utilize them for further quality
improvement. Second, through SQC*2, we are digitizing our daily
quality control
activities and striving
to utilize the results
in a timely manner.

ファミリー共有品質情報データベース（社内作成）

Management Strategy

Safety countermeasures plan at a site in Mexico

Back to Basics: Quality Deployment underthe 15th Mid-Term Business Plan

1

品質保証室

■名称

“Q-FIND”（キューファインド）
Quality Ftech Information Network Database”⾒つける、存在を知る、探り出す”という意味をもつ "Find"
このデータベースに⼊れば、品質情報が探せるという意味も込めて*1 Quality Ftech Information Network Databaseファミリー登録不具合情報リスト

2

品質保証室

詳細情報の閲覧

表題、項⽬はJPN/ENG変換可
不具合情報の検索・抽出

不具合情報⼀覧（CSV出⼒）→分析活⽤

傾向グラフ

登録不具合情報が⾃由に閲覧できます

F-TECH CSR REPORT 2023

childcare. Furthermore, I took on the task of picking up anddropping off our eldest son at daycare, which allowed me togain a deeper understanding of that environment. During the
car rides, I was able to enjoy precious one-on-one
conversations with my son, which, looking back, I realize wereinvaluable moments.
I was able to take this leave thanks to the understanding
and cooperation of my colleagues and superiors. I am gratefulto everyone who helped share my workload, and I hope thatin the future, there will be an even more conducive
environment for male employees to take such leave.

▪ Key Awards
・GM’s “Supplier of the Year Award” (Second consecutive year)
・Nissan’s “Global Supplier Award”
・Honda (HCM)’s “Honda Delivery & Quality Award”
・Toyota Auto Body’s “Excellent Quality Award”

F-TECH CSR REPORT 2023

Global Initiatives

I am currently working in the Administrative Section of theKuki Plant’s Manufacturing Department, where I am mainly
responsible for product shipping operations. In July 2022, mysecond son was born, and I took one month of parental leave.
At first, I had some concerns about taking long-term leave, butparenting turned out to be even more challenging than I
expected, making me forget about any worries. However, thetime spent with my family was extremely meaningful, and I am
grateful that I had the opportunity to witness my son's growth.
In addition, it helped me to understand my wife’s
struggles in balancing responsibilities of housework and

Administrative Section,
Manufacturing Department,
Kuki Plant

Last fiscal year, our quality improvement initiatives, stable newmodel launches, and products generated high praise and earned
us numerous quality-related awards from major and newcustomers. We will continue to promote efforts to enhancecustomer satisfaction.

Environment(Paternal Leave)

Daisuke Minemura

SocialThe Experience and Value of
Parental Leave

35

Quality Awards Received from Customers in
Various Regions

Flexible Workstyle Initiatives

Governance

機能１︓ファミリー登録不具合情報閲覧
⾔語切替え表⽰(⽇/英)*2 Statistical quality control (SQC)

VOICE

Message from the President

Utilizing networks that involve
our customer base and industry
associations in the automotive
parts sector, we share
information about operational
accidents not only among
similar businesses within the
F - t e c h Gr o u p (s t e e l s h e e tpressing industry), but also with
automobile dealerships. This
allows us to identify potential
hazards in the workplace andfurther strengthen operational
accident prevention measuresacross F-tech Group facilities,
both in Japan and overseas.

Management chart showing results of regular inspections

Introduction

We share information
about accidents indifferent industries toreinforce our systemfor preventing
operational
accidents.

36

Relationship with Shareholders and Investors

Relationship with Local Communities

We aim to increase management transparency andachieve sustainable growth through timely andappropriate disclosure.

Social Contribution Activities for a Sustainable Future

Appropriate Disclosure「Joint Food Donation Ceremony」(Held in Conjunction with Saitama Resona
Bank)

Constructive Dialogue with Shareholders

Based on the disclosure standards of the Tokyo Stock Exchange,
we disclose information to shareholders, supplier, investors andthe regional community in a timely manner while confirmingwith the Tokyo Stock Exchange and the general counsel. In orderfor our investors to understand our company, we provide various
opportunities for communication including an annual general
meeting of shareholders, financial results briefings, one-on-one
meetings and telephone conferences. In addition, we have
prepared English-language materials for overseas investors, andwe are also working to provide English translations.

(F-tech Corporate Governance Guidelines, Article 34,
Paragraph 1)

Cleanup Activities

Policy Related to Constructive Dialogue with Shareholders

Kuki Area

Based on the recognition that meaningful dialogue withshareholders is essential to enhance sustainable growth andmedium-term corporate value, F-tech approaches these
dialogues based on the following policies.

Zero-Trash Clean Kuki Citizens’ Movement
May 25, 2022

Cleanup at Bizenhorikawa River

1 To the extent reasonable, dialogues with shareholders are
conducted by the president and CEO, the director responsible
for IR oversight, other management, or managers from thedivision responsible for IR.

Note: The Bizenhorikawa River cleanup was in cooperation with six nearby
companies.

The Adopt Program* Cleanup Green Place in
Meihan Industrial Park

F-tech provides “Kids Smile QUO Cards”
as a shareholder benefit, andcontributes ¥50 per card to activities tosupport children in the areas affectedby the Great East Japan Earthquake.

Presentations of results for the fiscal year ended March 31, 2022
(held in May 2022) and for the first half of the fiscal year ended
March 31, 2023 (held in November 2022) were streamed online.

2023/05/17

11:38:34

Booth Exhibit at the SAITAMA Environmental
Fest & Children's Eco Festival: Making BathAir Freshener Bags Using Thinned Cypress
On November 11 and 12, 2023, we conducted an experiential
activity to create bath aroma bags using wood from the thinking
of Japanese cypress. This activity used wood thinned during
forest activities in Saitama Prefecture and allowed many people
to create handmade, fragrant batharoma bags. Through this activity,
we were able to promote theeffective use of forest resources
while sharing the joy of handmade
craftsmanship. Moving forward, aspart of the Company's eco-friendly
initiatives, we will continue tofocus on protecting and utilizing
local forest resources.
F-TECH CSR REPORT 2023

Global Initiatives*Adopt ProgramAn adopt program is an initiative that aims to achieve clean, trash and weedfree communal areas through volunteer cleanup activities, based on the“adoption” of nearby parks and green tracts of land by people of local
communities. The city of Kameyama introduced this system in April 2007, and
our Kameyama Plant was the city’s first participant.

1

Environment

May 21 and October 29, 2022
Total participants: 91

Online streaming

F-TECH CSR REPORT 2023

63 people on October 17, 106 people on
November 16, and 21 people on
November 29

010_7015990282306.indd

Kameyama Area

4 D ivision responsible for IR plans to conduct multiple IR
activities such as individual interviews, including financial
results briefings and facility tours and attending IR fairs.

37■W e hosted three tours in 2022:

Social3 We shall explain to our shareholders in an understandable
manner, the strategies, investments, and Key performanceindicators (KPIs) related to the mid-term business plan, andendeavor to disclose information for shareholders todetermine medium-term corporate value.

6 I n order for thoroughly fair information disclosure, theexecutive officer responsible for IR strictly secures important
non-public information in accordance with company rules.

Each year, the Kameyama Plant hosts factory tours for nearby
elementary schools. Visitors have the opportunity to observe theoperation of large press machines, the robot welding process,and product automation in the painting facility.
Even during the COVID-19 pandemic, when the number ofcompanies hosting tours decreased, the Kameyama Plant
continued this initiative. Like ourother factories around Japan, thisplant endeavors to provide
learning opportunities forchildren in the local community.

Shareholder Benefit Initiatives That
Contribute to Society

2 T he division responsible for IR shall collaborate with andengage in meaningful dialogue with the internal related
divisions.

5 T he executive officer responsible for IR conscientiously
conveys the Company policies to shareholders throughdialogue and shares any opinions he or she receives fromshareholders with directors and others.

Plant Tours for Elementary School Students

GovernanceNovember 18, 2022 and March 17, 2023
Total participants: 140

May 26, 2022
July 21, 2022
October 20, 2022
Total participants: 65

Management Strategy

Based on the recognition that constructive dialogue withshareholders is essential to enhance sustainable corporate
growth and increase corporate value over the medium term,
F-tech uses every effort to engage in such mutual dialogue.

In November 2023, we held our third food drive. More than 805
food and daily-use items were collected over the course of two
weeks through donations within the Company and at Fukuda
Engineering. The items were donated to seven facilities in thecities of Kuki and Kazo,
providing support forneedy children.
We will continue
taking the lead in
activities that enable us
to contribute to the
local community.

Cleanup Efforts in Haga Industrial Park

Message from the President

In its aim to build a relationship of mutual trust with all
stakeholders, including shareholders, the Company ensuresmanagement transparency by disclosing fairly and in a readerfriendly manner information, including legal disclosures,
management policies, financial status, and business initiatives, aswell as procedures and reasons in the appointment of the senior
management and nomination of, directors, and Audit &Supervisory Board Member candidates.

Haga Area

Introduction(F-tech Corporate Governance Guidelines, Article14)

Communication with Shareholders &Investors

38

Akihide Fukuda, Supreme Advisor to the Company,

Receives 21st “Eiichi Shibusawa Award”

For a Life of Constant Support of
Others and Continuously Taking on
Challenges in Business Innovation
In February 2023, Akihide Fukuda, the Supreme advisor to the Company, received the 21st
Eiichi Shibusawa Award, sponsored by Saitama Prefecture and other organizations.
The Eiichi Shibusawa Award is presented to business leaders across Japan who carryforward the spirit of Eiichi Shibusawa, recognizing his way of life and achievements incontributing to the establishment and growth of many companies, as well as his dedication
to social initiatives such as welfare and education, which laid the foundation of modern
Japan. This award also serves to exemplify the ideal qualities of today's entrepreneurs. It is
bestowed upon business leaders who embody the spirit of Eiichi Shibusawa, strive to create
value with a global perspective, have high aspirations and integrity, contribute to thecountry and society, and build a prosperous future. This award is a testament to the efforts ofall employees within the F-tech Group, who under the guidance of Supreme Advisor Fukuda,
in uphold the Company's mission statement: “From a global perspective, we strive tocontribute to our society and to improve the quality of life through manufacturing of thehighest quality products with ambition and sincerity.” This was a historic achievement for the
F-tech Group.
We were established in 1947 as a manufacturer of miscellaneous goods and toys. In
1959, we expanded our business to include the production of motorcycle and automobile
parts, and since then, we have continued to diversify our operations. Initially, we had only
one factory in the city of Soka, Saitama Prefecture. However, all employees of the F-techGroup have embraced the high aspiration of making the company truly competitive globally.
This has been the driving force behind our expansion into overseas markets and our decision
to go public. It is thanks to the shared vision held by all employees of the F-tech Group that
we have become the company we are today. Furthermore, in 2016, we established theF-tech Scholarship Foundation, a public interest foundation that has contributed to society
by providing scholarships to over 200 students.
We currently face a very challenging operating environment due to factors such as
soaring material and transportation costs, as well as a tight labor market. In suchcircumstances, it is crucial to consider how the Company should proceed and what kind of
aspirations it should have. Guided by the belief in our corporate principle of creating value,
we will continue to forge ahead with determination, aiming to create value that F-tech is
uniquely positioned to provide and ultimately become a world-leading company.

Environment
Recognizing that adapting to climate change is a topmost
management priority on the path to achieving carbon
neutrality, the Company has established a system to promote
carbon neutrality. In addition, we will address the various
changes associated with climate change proactively, viewing
them as opportunities. Furthermore, we will expand ourdisclosure based on the TCFD’s recommendations and strive toenhance corporate value.

39

F-TECH CSR REPORT 2023

F-TECH CSR REPORT 2023

40

Disclosure Based on the TCFD Recommendations

In September 2023, the Company committed to achievecarbon neutrality throughout the supply chain by 2050.
We will continue to address climate change in accordancewith the TCFD's disclosure recommendations.
▶ Address selected short-, medium-, and long-term climate change risks and opportunities▶ Board of Directors oversight of climate-related risks and opportunities

Team (referred to as CFT) under the supervision of a director tostrengthen its response to this issue. The organizational structure isshown in the diagram below.

Climate-Related Governance Structure

Strategies▶ Ensure the resilience of strategies in light of climate-related scenario-based considerations

We have identified climate change risks and opportunities and assessed their impact, based on assumptions about 2050 and taking into
account scenarios from the IPCC and the IEA, policy and regulatory trends, and industry developments. Climate change risks and opportunities
are constantly evolving, and we will continue to adapt to changing risks and opportunities and strive to further enhance disclosure.

Identification of Climate-Related Risks/Opportunities and Impact Assessment
Business Risks for the Company

Policies,
laws andregulations

Sustainability Committee

Increase in capital expenditures tomeet energy saving requirements

Impact on material prices

Rise in raw material prices andmanufacturing costs➡

Impact on energy prices

Rising energy prices/increased
expenses➡

Changes in customer
behavior

Lost orders due to delay
inenvironmental response

Reputational change among
investors/financial
institutions
Complaints from neighbors

Increase in financing costs (interest
rates)
Damage to corporate image/fines

Change in precipitation/
climate patterns

Production stoppage due toflooding/water shortage

Increased averagetemperature impact

Heat stroke/worker injury/
increased air conditioning costs

Intensification of extreme
weather events

Supply chain disruption/reduced
production

Acute

Chronic

ExpensesLong
term

Medium
term

Long
term

Sales

Expenses

We expect to incur higher costs in our efforts
to reduce product weights, due to the use of
more expensive high-tensile-strength
materials and non-ferrous metals, as well as
the decarbonization of electricity used in the
manufacturing process.
If we are tardy in responding to customer
needs, the Company may lose orders for newmodels and other products. In addition,
procurement costs could rise due to delays in
our move to decarbonization, owing toincreased ESG investments.

Sales

Expenses

the Company has an electrodeposition
coating process, and water shortages could
hamper this production process. In addition,
the Company will need to deal with heatstroke and other risks over the long term due
to rising average temperatures.
Production and delivery could be affected byextreme weather events.

Sales

Business Risks for the Company
Perspective

PolicyContent

Impact on production
processes• Establishment of a sustainableproduction system• Implement and expand water reduction
measures that address water risks• Promote waste recycling

EnergysourcesUse of low-carbon energy• Promotion of carbon neutrality• Improving the efficiency of
production processes• Pursue high-efficiency and minimum-energy
production• Introduce renewable energy sources andcomply with future carbon taxes

Impact on R&D• Creation of environmentally friendly
products• Develop lightweight products• Consider and utilize recycled materials• Expand product applications to electricvehiclesMarkets

Growing adoption of electricvehicles• Establishment of sustainable
management• Appropriate information disclosure• Expand disclosure of non-financial information• Lower financing costs

Robustness
Resilience

Business sustainability
partnerships• Improvement of corporate
competitiveness throughcollaboration with suppliers• Strengthen BCP initiatives• Support decarbonization

Opportunities
stemmingfrom response Products
Services
to climatechangeScope

Financial
Impact➡

Mediumterm
Profits

Long
term

Sales

Sales
Profits

F-TECH CSR REPORT 2023

Global Initiatives

Resource
efficiency

Period➡

Category

Environment

F-TECH CSR REPORT 2023

The CFT is led by the general manager of the Corporate
Planning Office, heading a team consisting of department
heads from related departments. They are involved informulating the roadmap and strategy for the Company until
2050. Their main initiatives include gathering and analyzing
information on carbon neutrality, identifying business risks andopportunities, and playing a central role in implementing
climate change mitigation measures approved by the Board of
Directors.

Uptake of renewable energy
and energy-saving
technologies

In order to meet customer needs forelectrification, over the long term we will needto design and develop lighter-weight andlower-carbon products and establish anenergy-saving production system.

Social41

Carbon Neutral Promotion Cross-Functional
Team (CFT)

Development of lightweightcomponents
Spread of electric vehicles

GovernanceTo ensure the smooth operation of the Company's businessactivities, the Management Meeting engages in the resolution,
discussion, and understanding of important management
matters. We conduct deliberations on overall business plans andbudgets based on annual and medium-term management
policies. Moreover, we hold discussions and review progress onimportant matters such as implementation plans and roadmaps
related to climate change adaptation.

Physical risks
associatedwith failure to
respond toclimatechange (4°C)➡

Increased R&D expenses to meetcustomer needs
Conversion to new technologies
and increased capital R&D expenses.

➡

Management Meeting

Reputation

Short
term

➡

The committee is chaired by the president and CEO and consistsof division managers, general managers. The Company conducts
its business activities with consideration for various aspects of theeconomy, environment, and society, aiming to build better
relationships with stakeholders and contribute to a sustainabledecarbonized society. The committee is responsible for managing
and overseeing implementation activities based on the Company's
carbon neutral roadmap, discussing and sharing information on
action plans and amendments to committee regulations, andhandling other important matters that have been discussed by the
Cross-Functional Team (CFT). To facilitate decision-making onimportant matters, the committee submits proposals and reports
to the Board of Directors and the Management Meeting.

Increased regulations and fines

We assume that the impact of carbon taxes
and stricter regulations will be small due toour responsiveness to carbon neutrality, but
we expect to purchase credits for some ofemission allowances.

➡

The Company considers adapting to climate change adaptation
a topmost management issues based on the identification ofmateriality in its areas of business. The Board of Directors receives
regular reports and conducts monitoring regarding thedeliberation and decision-making on important corporate
governance policies and the status of sustainability management.
Additionally, significant matters such as the roadmap for carbon
neutrality, the implementation plan developed by CrossFunctional Team (CFT), and the establishment and revision ofcommittee regulations are discussed in the Management
Meeting before being presented to the Board of Directors.

Compliance with GHG
emission regulations➡

Carbon Neutral Strategy Committee

Long
term

➡

Board of Directorss

Increased operating costs due tointroduction of carbon tax andpurchase of credits➡

Chair: General Manager of Corporate Planning OfficeMembers: Department managers of related divisions

Explanation of and Response to Risks➡

Chair: President & CEO
Members: Heads of divisions·offices

Transitionalrisks toward in
the movetoward adecarbonizedsociety(2°C/1.5°C)
MarketApplication of carbon taxes
and carbon trading schemes➡

Carbon Neutral Promotion Cross-Functional Team (CFT)Period➡

Carbon Neutral Strategy Committee

Technology

Scope

Financial
ImpactContent

Management Strategy

Management Meeting

Perspective➡

Category➡

Board of Directors

Message from the President

The Company recognizes climate change as a topmost
management issue and has established a Carbon Neutral Strategy
Committee and a Carbon Neutral Promotion Cross-Functional▶ Gauge impacts of climate-related risks and opportunities on business, strategic, and financial planning

Introduction

Governance▶ Management's role in assessing and managing climate-related risks and opportunities.

42

Disclosure Based on the TCFD Recommendations

F-tech Our 2050 Carbon Neutral Challenge

Strengthening cooperation withcompanies in other industries andmembers of the supply chain

Phase

Energy-saving, highefficiency/product initiatives

TargetScope 1 and 2 by 2035
Achieve carbon neutrality in the manufacturing domain
Contribution to the mobility society

To date･Energy
conservation
initiatives･Adoption of ISO
50001･Partial
introduction of
low-CO2 electricity

Identify climatechange issues andstrategies for eachdepartment

Scope 3 by 2050
Achieve neutrality
Respond to
customer needs

Achieve carbon
neutrality in thematerials andlogistics domains

Expand into supply chain (SC) domain
Minimize CO2 emissions at
subcontractors (Tier 2 and below)･Provide energy conservation/technicalsupport for decarbonization･Request introduction of renewableenergy and low-CO2 electricity

Electrification of gas combustion facilities /Switching to alternative fuels
Minimization of Scope 1 CO2 emissions(direct combustion)･Electrification of facilities using gas in thepainting process･Employ processes that use synthetic fuels

Stakeholders' demands and expectations

Legal and other requirements

Assess impact ofCompany-wideissues andstrategies

CFT to develop
and prioritize
strategies

Discuss at Carbon
Neutral Strategy
Committee andManagement
Meeting

Receive Boardof Directors
approval

Establish policies, roadmaps, and goals, develop action plans, and incorporate into operational and mid-term business plans

Increased take-up of renewable energy
Active use of renewable energy

2035

Company's business situation

2050

Operation and management based on ISO 14001 management system

Operational support through in-house education, etc.

Performance evaluation and management review
Report on operations at Company-wide
environmental meetings and review by the
director in charge of environmental affairs

Regular reports at Carbon Neutral
Strategy Committee andManagement Meeting

External assessment institutions

Periodicrequests forevaluation
Organizations
that study responses
to climate change

Report on initiatives to address climatechange risks and opportunities at Boardof Directors meetings

Status of Integration with OtherManagement Systems Regarding ClimateRelated Risk Management Processes
F-tech has started integrating carbon neutrality into its ISO 14001
environmental management system (EMS) to effectively carryout environmentally friendly business activities across Group
companies and its supply chain.
In addition, identified risks such as heavy rains are managed
as part of the Company's business continuity plan within its risk
management framework. F-tech is working on establishing a
prompt response system and improving its ability to respond to
accidents.

Results of FY2022 CDP Assessment
We have been actively addressing environmental issues bydeveloping our environmental management system on a global
basis. In FY2017, we shifted our environmental communication,
which was previously conducted individually with eachautomaker, to an evaluation system through a third-party
organization (CDP), and we received a “B” rating in the CDP
survey in FY2022. We will continue to make maximum use of
external evaluations by CDP to further strengthen our own
environmental initiatives.

CDP
Assessment

43

F-TECH CSR REPORT 2023

FY2022 Assessment

Climate Change

Water Security

F-TECH CO. LTD.

B

B

F-TECH CSR REPORT 2023

Global Initiatives

2022

Minimization of CO2 emissions in
manufacturing processes･Visualization of energy consumption(product LCA)
･Planned switchover to large generalpurpose facilities and high-efficiency
facilities･Systematic introduction of renewableenergy and low-CO2 electricity

F-tech has identified climate change risks and opportunities byconsidering requests and expectations from such stakeholders as
customers and local communities. Identified risks andopportunities have been approved through the Company's
climate change governance structure, and policies and targets
have been set and reflected in operational and mid-termbusiness plans.

Environment

Manufacturing area

Decarbonization of business domains

We are managing climate change measures based on theexisting ISO 14001 management system. However, in order toestablish a lower-carbon production system, some measures
may go beyond the framework of ISO 14001, such as planned
updates to large-scale and general-purpose equipment and theintroduction of renewable energy. In cases where theredistribution and adjustment of management resources at theCompanywide level are necessary, the Carbon Neutral Strategy
Committee will discuss and consider effective measures for
implementation.

SocialCollaboration between
development and manufacturing in
our integrated processing system

Process Flow for Climate-Related Risk
Screening, Assessment, and Management

Governance･Improvementof productfuel efficiency(weight
reduction)

Development of environmentally friendly
products･Consideration of low-CO2 specifications in
the development domain･Develop processes with low environmental
impact in the manufacturing domain･Propose specifications that emphasize highquality, high performance, low cost, lightweight, and low CO2 emissions▶ Status of integration of climate-related risk management processes into comprehensive risk management

Determination of climate change risks and opportunities

Decarbonization challenge

Achieve carbon neutrality by 2050

Design, development,
and engineering areas

The F-tech Carbon Neutral Challenge

To dateRisk Management

Management Strategy

Under a new governance structure for climate change adaptation, the Company has formulated a roadmap that takes climate changerisks and opportunities into account. Based on this roadmap, the Company will proceed with identifying more specific measures anddeveloping reduction plans.

▶ Process for managing climate-related risks

Message from the President

Roadmap to Achieving Carbon Neutrality by 2050

▶ Process for screening and assessing climate-related risks

Introduction

We have “We aim to achieve a decarbonized society throughcontributions to a mobility society, in collaboration withsociety and our customers.” as our slogan. As specificinitiatives, we will focus on the introduction of large-scale,
high-efficiency facilities and the promotion of energy
conservation and renewable energy. Additionally, we will
tailor our product development efforts to meet the needs ofour customers.
The Company has established an integrated processing

system from development to mass production. In thedevelopment area, we are conducting evaluations based onlife cycle assessments (LCAs) to explore product specifications
that are CO2-free. In manufacturing, we will strive to develop
processes that have minimal environmental impact. Throughthe coordination of development and production, we arecommitted to environmentally conscious manufacturing.
In the long term, we will strengthen collaboration among
our supply chain by sharing Company initiatives andproviding support for decarbonization. Through these efforts,
we aim to enhance our competitiveness.

44

Disclosure Based on the TCFD Recommendations

Metrics and Targets

Progress toward Our 2030
Global Environmental Targets

CO Emissions Results▶ Indicators for assessing climate-related risks and opportunities

Metrics and Targets

Target > R educe CO2 emissions per unit of production▶ Targets and achievements in managing climate-related risks and opportunities.

by 7.0% compared to FY2017 levels

Result > The target was achieved, with aLong-Term Targets

2035

2050

emissions (Scope 1 and 2) in the manufacturing

zero CO2 emissions for all operations throughout

area by 2035.

supply chain.

(1)Implement improvement activities to achieve targets by(3) Promote the sustainable use of natural resources suchas water

45

F-TECH CSR REPORT 2023

0.200

40,000

0.100

36 %
0

2017

2019

2020

2021

0.000
2022(Fiscal year)

Water Resource Usage Resultscompared to FY2017 levels

Result > The target was achieved, with a

23.5% reduction.

Japan

(m3)

1,400,000

North America
China

1,200,000

Water consumption decreased by 3.5% (26,306 m3) year
on year. The majority of the Group's water consumption isused for product cleaning, surface treatment,
electrodeposition coating, and steam in the painting
process, and many locations are highly dependent onwater to maintain water quality in the painting process
and to prevent adverse effects on quality. In FY2022, we
implemented measures to reuse water in the painting
process and improve painting efficiency, reducing water
consumption by 16,871 m3.

3.16

3.24

3.48

(m3 per million yen of sales)

3.70

3.27

Asia-Pacific1,000,000
859,474 846,222
800,000

11%

778,565 762,334

736,028600,000

16 %

28%

45%

2.42

400,000

2.85

2.00

1.15

200,000
0

2017

2019

2020

2021

0.30
2022 (Fiscal year)（年度）

Waste Emissions Results(2)P revent environmental pollution by complying with relevant
environmental laws, regulations, and other requirements.
all people involved in our business activities and internal activities.
3. Strive to coexist in harmony with local communities.
(1) Promote biodiversity conservation and social
contribution activities(2) Appropriately disclose environmental information
Revised: September 8, 2023

Target > 5% reduction in wase emissions by per unitof production compared to FY2017

Result > The target was achieved, with a

23.0% reduction.

Japan(Tons)

North America
China

12% 6 %

0.030

0.024

Asia-Pacific
Per unit of production

Waste emissions increased 13.9% (670 tons) year on year.
By region, we saw a significant increase in waste
generation, of 724 tons, due to production increases at
our North American facilities. In an effort to curb waste
emissions, in FY2022, we implemented nine waste
reduction initiatives (567-ton reduction), primarily in North
America.
The Group will continue working together to shareeffective measures and reduce waste emissions.

(Tons per million yen of sales)

16,0000.021

12,000

0.023

0.025

0.021
0.018

8,000
11%

6,385

0.020
0.015

5,474

5,065

4,833

5,503

0.010

4,000
0.005
72%
0

2017

2019

2020

2021

0.000
2022(Fiscal year)

F-TECH CSR REPORT 2023

Global Initiatives

products that help extend the cruising range of automobiles

86,49980,000

Environment(2) D evelop environmentally friendly products, such as lightweight

87,1310.300

utilizing the environmental management system(1)P romote carbon neutrality, focusing on CO2 reduction
throughout the lifecycle of corporate activities and products

26 %

0.400
0.285

108,463
87,56113%

0.374

2. Strive to reduce our environmental impact and prevent pollution.

(3)C ultivate human resources through environmental education for
1. Contribute to the realization of a sustainable society

120,972

0.392

SocialWe have revised our environmental policy as part of our effort to realize a decarbonized society. We have added the promotion ofcarbon neutrality and revised the wording to be more concise and easier to understand.

Based on our company Mission Statement, “We will do ourutmost to contribute to national society and build a prosperous
future,” we will continuously promote the following
environmental improvement activities in all of our businessactivities.

120,000

24 %

0.500

0.416

160,000

Asia-Pacific

Per unit of production

Reviewing Our Environmental Policy

0.445

Governance

We will take on the challenge of achieving net

Environmental Policy

Production was down at many locations due to COVID-19
and the impact of semiconductor shortages. However,CO2 emissions fell 0.7% (632t-CO2) year on year.
By region, emissions fell 14% year on year at our basein China. In FY2022, the Group implemented 23 to reduce
power use (514t-CO2 reduction) and four measures toreduce fuel use (273t-CO2 reduction).
We are introducing solar power generation systems in
Thailand and China, and we will continue to promote theuse of renewable energy throughout the Group.

(t-CO2 per million yen of sales)China

Per unit of production

Target > 5.5% reduction in water consumption

We aim to achieve carbon neutrality for CO2

200,000

Management Strategy

Together with society and our customers, we aim to realize a decarbonizedsociety through our contribution to mobility.

(t-CO2)

North America

Message from the President

As part of its efforts to realize a sustainable society, F-tech is
working to reduce its environmental impact by focusing on
the following important environmental issues: “reduction of
CO2 emissions,” “environmental conservation, including air,water, and soil,” “resource saving and reduction of water
consumption and waste,” “management of chemical
substances,” “development of environmentally friendly

products,” and “biodiversity conservation.”
Regarding the “reduction of CO2 emissions,” we arecommitted to our efforts to achieve carbon neutrality by 2050
across the entire supply chain, as part of our efforts to realize
a decarbonized society. Currently, the calculation of Scope 3
emissions is limited to Category 9, which covers shipping andtransportation. Going forward, we will collaborate withcustomers and suppliers to conduct global investigations onother categories of Scope 3 emissions.

36.1% reduction.

Japan

Introduction▶ Scope 1, 2, and 3 greenhouse gas (GHG) emissions and associated risks

46

Metrics and Targets

14th Mid-Term Business Plan/
FY2022 Environment and Energy Planapproach towards water reduction, to save water in the future,and our policy for reducing landfill waste, in response to growing
climate change. We confirmed at regional environmental
conferences (page 52) that we will transition from global goals toautonomous management at our facilities and review themaccordingly.”

FY2020

FY2021

FY2022Planｰー

Improved by 15% (compared to FY2017)

Achievementーー

Improved by 28.5%

Evaluation

ー

ー

〇

Plan

Environmental
management

Improvement of CO2 emissions
per unit of production(compared to FY2017)

Visualization of processenergy through product
LCA

Understanding of the amountof energy used per unit ofproduction

Improved by 12.1%

Improved by 16.1%

Improved by 36.1%

Evaluation

〇

〇

〇

Sustainability
management

Establishment of sustainability
management

Improved by 3.3% (compared to FY2017) Improved by 4.4% (compared to FY2017) Improved by 5.5% (compared to FY2017)
Worsened by 10.0%

Worsened by 3.4%

Improved by 23.5%

Evaluation

×

×

〇

Plan

Improved by 3% (compared to FY2017)

Improved by 4% (compared to FY2017)

Improved by 5% (compared to FY2017)

Achievement

Improved by 3.7%

Improved by 11.8%

Improved by 23.0%

Evaluation

〇

〇

〇

2. Rationalization of energy use

96.2 points
3.8% improvement○

Reduction of CO2 emissions
through measures

Reduction of 1.0% or more compared with the 67th
fiscal period
More than 91.9 t-CO2 reduction by measures

273t-CO2 reduction○

Project kickoff
Consideration of roadmap

Structure approved
Roadmap proposed

Implementation of biodiversity activities/social
contribution activities
Implementation of at least one example at each site

F-TECH CSR REPORT 2023

4. Priority management items○

Kuki: 3 initiatives implemented
Kameyama: 2 initiatives implemented
Haga: 3 initiatives implemented○

Note: We refrain from disclosing the targets of "Development/Engineering" due to confidentiality considerations.

3. Development ofenvironmentally friendly
products○

Global development of domestic water reduction
policy and approach
Completion of landfill volume study and policy
development〇 : Target achieved × : Target not achieved

24% improvement

Individual locations

6% improvement

7% improvement

8% improvement

Plants in JapanKuki, Kameyama
Model lines

Process analysis
Comparison

Major products
completed

Overseas plants―

PlantsModel lines

Process analysis
Comparison

Japan

Identifying material
issuesPlanning/implementationof countermeasures

Implementation ofcountermeasures

5. Fulfillment of social
responsibility

FY2023 Management Items

Reduction of total CO2 emissions(Scope 1 and 2)

Reduction of CO2 emissions by 18.0% or more compared with FY2017

Improvement of CO2 emissions
per unit of production (Scope 1
and 2)

2% improvement compared with FY2021 in all areas (Kuki, Kameyama,Haga), 98 points or less

Reduction of CO2 emissions
through measures

Reduction of 89.4 t-CO2 or more (1.0% or more) compared with 67th
fiscal period

Weight reduction of newly
developed parts

Reduction of 5% or more compared to the previous year's model

Probability of new technology
and new products

At least one plan/proposal

Establishment of calculation
system for Scope 3

Establishment of global GHG calculation standards and strengthen
calculation system

Product LCA
Establishment of CO2 tables

Understanding of energy consumption by building model lines
Study for creation of CO2 table

Revision of G.Ftech_EnMS

Compliance of internal global energy management standards to ISO 50001:2018 version
Establishment of management standards and rules for LCA

Sustainability-related policies
Creation of guidelines• Formulation of F-tech Basic Policy on Sustainability• Establishment of Sustainability Committee• Publication of Sustainability Guideline for suppliers

Contribution to local
communities

Implement biodiversity activities/social contribution activities
Implementation of at least one example at each site

Global Initiatives

Contribution to local
communities

Investigation of recycling of landfill waste/examination of countermeasures

21% improvement

Environment

All domestic sites (Kuki, Kameyama, Haga)
1% improvement from FY2011, less than 99 points

Evolution of environmental
management

47

Assessment

Reduction of CO2 emissions
per unit of production

Proposed measures to standardize water reduction efforts

18% improvement

SocialTarget: F-tech’s three locations in Japan (Kuki Plant, Kameyama Plant, Haga Technical Center)

Establishment of aninternal program topromote carbon neutrality

Entire GroupFY2023 Environment and Energy Plan (Japan)

1. Achieving carbon neutrality by
2050

Results of the FY2022 Environment and Energy Plan*

Results (Full-Year Estimates)

FY2025Theme〇 : Target achieved × : Target not achievedControl Level

FY2024

Note: For reductions of water and waste emissions, we moved from global targets to site management.

Achievement

TargetFY2023Governance

Reduction in waste emitted
per unit of production

Improved by 4.2% (compared to FY2017) Improved by 5.6% (compared to FY2017) Improved by 7.0% (compared to FY2017)

Achievement

Plan
Reduction in water use perunit of production

Reduction of total CO2
emissions (compared to
FY2017)

TargetManagement Strategy

Reduction in CO2 emissions
per unit of production(Scope 1 and 2)

Carbon neutral by 2050
PeriodEnhancement Details

Management Items

Message from the President

Target: F-tech Group (6 locations in Japan, 14 overseas)

Carbon neutrality by 2050
Reduction of CO2 emissions(Scope 1 and 2)

15th Mid-Term Environmental Plan (FY2023–FY2025)
Key Measures

Outcomes of the Third Year of the 14th Mid-Term Environmental Plan (FY2020–FY2022)

environmental energy plan for FY2023. This is in line with its
commitment to strengthen and pursue climate change
mitigation initiatives.

To further enhance its efforts to address climate change andcontribute to a sustainable mobility society, the Company haslaunched the 15th Mid-Term Business Plan in the environmental
category. As part of this plan, the Company has formulated an

Introduction

In the 14th Mid-Term Business Plan, we added the goal ofmanaging total CO2 emissions toward our goal of achievingcarbon neutrality by 2050. In FY2023, we met our 2030
environmental goals due to signs that production was recovering
post- COVID-19 and the impact of policy measures.
In the 15th Mid-Term Business Plan, we discussed our

15th Mid-Term Business Plan/
FY2023 Environment and Energy Plan

* The target value of 89.4 t-CO2 for reduction by measures has been relaxed due to the substantial achievement of the previous year's results at some sites.

F-TECH CSR REPORT 2023

48

Metrics and Targets

Material Flows (FY2022 Results)

Water
resources

OUTPUTS

736,000 m3

Research& Development

Environmental Conservation Costs

5,503 tOf which, direct
landfill outside
the Company

1,279 tElectricity 191,033 MWh

4,656,000 m3

Natural gas 3,018,000 m3

3,403 tGasoline

130 kℓDiesel fuelKerosene

128 kℓFY2022(1) Pollution prevention cost

Prevention of air and water pollution

14,781

19,486

18,401(2) Global environmental
protection costs

Capital investment for energy saving, management costs of CFC-containing
equipment, and appropriate treatment costs

20,317

24,89046,493(3) Resource recycling costs

Proper disposal costs of industrial waste

18,811

12,85813,06653,90957,234

77,959

6,786

7,268

9,321

856,000

731,000

731,000

1,920

1,795

1,625

972,274854,531

897,864

Subtotal

Management activity costs

ISO certification cost, CSR report cost, environmental measurement cost, etc.

R&D costs

Research and development to reduce environmental impact

Social activity costs

Participation in, donation to, and support of environmental conservation
activities

Stamping
Welding
Painting
Assembly

Scope 1 and 2
CO2 emissions
86,499t-CO2

Company car

Economic Benefits Associated with Environmental Protection Measures
Classification

FY2022

Income from valuable resources

431,949

688,824596,782

Cost saving

Cost savings from energy-saving activities

19,23015,953

12,029

Total

451,180

704,778

608,810Classification

End users

CO2 emissions under OUTPUTS are calculated by multiplying the energy consumption of the INPUTS by the CO2 conversion factor.
The CO2 calculation method is based on the “Greenhouse Gas Emissions Calculation and Reporting Manual” of the Ministry of Economy, Trade and Industry and the Ministry of the Environment and “The Greenhouse Gas Protocol” of the WRI/WBCSD.
⚫ Domestic electricity is calculated based on the latest coefficient for each electric power company.
⚫ The data covers the period from April 2022 to March 2023.

Emissions of environmentally hazardous
substances from transportation

AmountUsed in
FY2021

AmountUsed in
FY2022

FY2022
Reduction by
Measures

Unit

Total energy consumption

GJ

231,264

225,165

216,122

13,514

Electricity

GJ

176,067

172,142

165,622

13,161City gas

GJ

42,67041,25838,977

353

LPG

GJ

12,497

11,696

11,4810

Water resources

m³

76,85861,62960,8930

CO2 emissions

t-CO2

11,233

9,590

9,378

515

Thousand yen/t-CO2

49

65

83

-

Specific chemical emissions

ton

0.9

1.7

0.4

0

Emissions of waste andother items

ton

444

404

428

0

CO2 emissions

t-CO2

1,680

1,567

1,614

164

In-house carbon value⚫

49

F-TECH CSR REPORT 2023

Notes:The calorific value of the GHG emissions calculation, reporting, and publication system based on the Law Concerning the Promotion of the Measures to Cope with Global Warming in Japan is used in the calculation.
Our environmental accounting is in accordance with the “Environmental Accounting Guidelines” of the Ministry of the Environment, and only shows activities in Japan.

F-TECH CSR REPORT 2023

Global Initiatives

Environmental conservation effects
related to environmental impact andwaste emitted from business activities

AmountUsed in
FY2020

Environmental Performance
Index

Environment

Customers (automakers)

FY2021

Environmental Conservation Effects

Scope 3CO2 emissions
4,578t-CO2

1,538 kℓ

FY2020

Income

7 kℓ

68 kℓ

(Thousands of yen)

Effects

Environmental conservation effects
related to resources used in businessactivities⚫

FY2021SocialDiesel fue

FY2020Total

Shipping
Gasoline

Main Initiatives

Governance

LPG

Classification

Management Strategy

City gas

Production(Thousands of yen)

Message from the President

Waste

Cost in business area

Energyinvestment and cost, is important for further improvement of ourinitiatives and for fulfilling our accountability to stakeholders.
We are considering the possibility of including overseas
Group companies in our calculations to the extent possible.

F-tech has been preparing for environmental accounting since
the publication of its Environmental Report, before it became a
CSR report. We believe that accurately identifying, measuring,
totaling, and analyzing the amount of investment in and cost ofenvironmental conservation, and knowing the effects of that

Introduction

INPUTSFY2022 F-tech Environmental Accounting

50

Metrics and Targets

Promoting Initiatives Focused on the Value Chain

OPICS

Regional Environmental Conferences in FY2022

Examples of Environmental Improvement

Purpose and Background

By reviewing transportation routes for facilities and equipment
destined for North America, we have reduced truck transportdistances within the United States and improved transportation
efficiency by optimizing cargo loading for maritime transport andcontainer utilization. Additionally, we received environmental
performance reports from three of our business partners.

Structure of the F-tech Supplier Sustainability Guidelines

With a view to a global roll-out, F-tech will conduct selfassessments and on-site audits of suppliers based on theguidelines, aiming to build a sustainable supply chain with its
business partners.

Domestic

Overseas

Promote coordination with new and recently established companies
Prepare translated versions for roll-out to other countries(Develop policies appropriate to local conditions)
Promote coordination with suppliers through offices
Establish supplier evaluation system(t-CO2)

2,000
1,800
1,600

CO2 emissions

100%

100%

100%

1,615

Submission rate

(%)

100.0

96%

92%

80.0

1,400
1,200

60.0

1,000
800

669

600

620

40.0

549

551

400

20.0

200
0

2018

2019

2020

2021

0.0

2022 (Fiscal year)

Management of Chemical Substances
Contained in Products
To address the regulation of chemicals in its products, the F-techGroup has established a management system and conducts
IMDS* surveys. The use of hazardous substances regulated bylaw are prohibited under the “F-tech Product Chemical
Substance Management Standards.” We also work incollaboration with our business partners to eliminate targeted
substances and provide safe products.

2 15th Mid-Term Business Plan: In the Environmental Category, Development Details and Action Policies
toward Carbon Neutrality
Efforts toward carbon neutrality have increasingly become a central
focus of our management through communication with ourcustomers. In FY2022, we continued to build a framework for
promoting carbon neutrality. We also announced at regional
environmental conferences that in FY2023, we would begin efforts to

In FY2022, we decided on excellence measures to serve as a model for sites in each domain.
Excellent Energy
Conservation
Measures

F-TECH MFG. (THAILAND) LTD. (FMTL / Ayutthaya Province, Thailand)

Installation of Solar Power Generation System on Factory Roof

51

F-TECH CSR REPORT 2023

F&P America Mfg., Inc. (FPA / Ohio, United States)

Plastic Container Recycling
Large plastic containers no longer
needed at FPG, FPC, and FPA were
repaired and recycled.
The recycled plastic containers areturned into chips, which have recently
been utilized as flooring material for
temporary shelters.

Excellent
CSR Measures

F.E.G. DE QUERETARO S.A. DE C.V. (FEGQ / Querétaro, Mexico)Santa Catarina River Cleanup Activities
FEGQ's first social
contribution activity
was a river cleanup, in
which 80 kg of trash
was collected.

*1 RMI: Responsible Minerals Initiative*2 CMRT: Conflict Minerals Reporting Template*3 Conflict minerals: Tin,Tantalum, tungsten, gold

F-TECH CSR REPORT 2023

Global Initiatives

Survey of the Status of Environmental Initiatives
1. Survey of environmentally hazardous substances(1) Consumption by type of energy (2) Water resources used
2. Establishment and achievement of CO2 reduction targets
3. Status of biodiversity and social contribution activities
4. S haring of improvement measures for energy saving,water use, and waste discharge

Excellent
Waste-Related
Measures

Review of Water Reprocessing Frequency
The company was using 22
tons of water to reprocess
softened water twice a day,but after checking thewater quality, the frequencyof such treatment waschanged to once a day.

Power generation:
3.84 MWh/day

Responsible Mineral Procurement

F-TECH MFG. (THAILAND) LTD. (FMTL / Ayutthaya Province, Thailand)

Environment

Explanation of Purchasing Policy
We support the RMI*1 and promote “Responsible Mineral
Procurement” using the CMRT*2 to avoid the use of conflictminerals*3 that may involve risks or illicit activities such as childlabor, human rights abuses, poor working conditions,environmental destruction, and corruption associated with mineralsourcing from conflict areas or high-risk countries. We require
suppliers to comply with the “F-tech Supplier Sustainability
Guidelines” to prevent inappropriate mineral use.

Excellent
Measures Related
to Water Resources

Installed panel
capacity:
avg. of 997.35 kW
average*IMDS: International Material Data System

In April 2023, we distributed materials explaining our purchasing
policy and introducing examples of the Company's environmental
initiatives to 72 suppliers and asked for their cooperation in
conducting a survey on the status of their environmental initiatives.

promote carbon neutrality. Furthermore, we shared a roadmap
toward achieving carbon neutrality by 2050. Building upon our
existing environmental initiatives, we will further develop specificmeasures to reduce our total CO2 emissions.

SocialCategory
Establish guidelines

CO2 Emissions of Company Suppliers

GovernanceFuture Developments

Greenhouse Gas Emissions of Domestic Customers (FY2022 Results)

During the FY2022 regional environmental conferences, we added
unable to set a global goal of achieving zero landfill waste. Instead, we“achieve carbon neutrality by 2050” as a new environmental goal for
instructed each site to focus on its own waste reduction. As for the
the Group. We reported on the progress of achieving the global
management of water resources, efforts have been made over theenvironmental goals for the first quarter of FY2022 at the time of thelong term to ensure the quality of reclaimed water, secure reuse
conferences. We achieved significant progress towards the 2030
destinations, and address regulatory and cost issues. Such issues havetargets for CO2, water resources, and waste generated. Moving
made it challenging to reduce water use. Nevertheless, given the highforward, we confirmed our commitment to a focus on transitioning
water risk in certain locations, the Group has reviewed its uniform
to a decarbonized society and addressing climate change. As part ofwater reduction target in order to achieve more effective results.
these efforts, we shared the remaining
challenges in water resources used andAnnual Amount of Landfill Waste by Site
SurveyDetails of Waste
SurveyRecyclability(Environment in 2021)
Results ❶ Requiring Landfill
Results ❷waste generated, and made adjustments toprioritize self-management based on the
Site
Total amount of Landfill
Type of landfill waste
name* waste (kg)volume (kg)
Recyclable amount 587t 41%
risks at each site, excluding them from the•Paint sludge
DM732,605
552,740
global management goals.
•Waste in factory sewage filters
FPA
814,016
287,435
The issue of waste requires a sustainable•Cafeteria food waste
Type of landfill waste 237t 17%
FTZ
468,069
286,189•Others
approach that promotes resource
FPG
304,026
143,057
FMTL
202,220
68,270circulation. An investigation into the content
Needs further
FEGQ
47,30537,860607t 27%
and recyclability of landfill waste determinedverification
FPMI
75,091
25,051that approximately 40% of the waste isFPC
853,595
12,860recyclable. However, due to a lack of disposal
FEG
167,255
5,145
No processor exists 223t 16%
2,564
FTI
21,802
contractors and legal restrictions, we wereManagement Strategy

Ⅰ．Introduction
F-tech Basic Policy on Sustainability and Our Action Guidelines
Ⅱ．
Ⅲ．F-Tech Basic Policy on Purchasing
Ⅳ．Scope of Application
Ⅴ．Requests to Our Business Partners
1 Safety and Quality
6 Business Continuity Plan (BCP)
Development and Preparation
2 Human Rights and Labor
3 Environment
7 Information Disclosure to Stakeholders
4 Responsible Mineral Procurement 8 Community Involvement
5 Compliance
9 Expansion to your suppliers
Confirmation of the Status of Initiatives
Ⅵ．
Ⅶ．Measures to Be Taken When a Violation of the Guidelines Occurs
Ⅷ．Confirmation of Agreement on Guidelines
Ⅸ．Contact for Inquiries Regarding these Guidelines

Understanding Greenhouse Gas Emissions in
the Value Chain

1 Progress in the Third Year of the 14th Mid-Term Business Plan

Message from the President

The F-tech Group has been promoting environmental
considerations through the “F-tech Green Purchasing Guidelines.”
To contribute further to a sustainable society, we have newly
established the “F-tech Supplier Sustainability Guidelines.” These
guidelines aim to achieve a sustainable supply chain byconsidering not only the environment but also the economic andsocial aspects, in collaboration with our business partners.

Introduction

F-tech Supplier Sustainability Guidelines

Since 2009, we have held the F-tech Group Global Environmental Conference, a gathering for major Group companies from aroundthe world. In FY2022, we were unable to hold the conference in person due to COVID-19. Instead, we held regional environmental
conferences online in North America, China, and other parts of Asia. At these environmental conferences, we focused on exchanging
opinions about region-specific initiatives and problems—an approach that differed from that of global environmental conferences.
Instead, we spent the limited amount of time available in the active exchange of opinions within the region or between countries.
We undertook 56 new environmental measures at 14 locations in Japan and overseas. These efforts resulted in savings ofapproximately ¥120 million. To date, such environmental efforts throughout the Group have resulted in improvements amounting toapproximately ¥670 million in terms of reduced environmental impact and manufacturing costs. The two main topics communicatedby the secretariat at these meetings are outline below.

52

Environmentally Friendly Products and Technologies

Using Our Advanced Proprietary Methods toDevelop Products with Reduced Environmental Impact

The manufacture and sales of the Toyota GR Corolla began in
October 2022. This model incorporates our proprietary optimized
front suspension member, which we developed in-house. By
implementing unique optimization analysis and a closed crosssectional structure, we improve the member’s performance,
resulting in a weight reduction of 5kg (25% decrease) comparedto the base model. Furthermore, product specifications were
designed to maximize manufacturing efficiency, achieving a
production line where one cell corresponds to one line in thewelding process. This enables the production of the required
number of units with minimal equipment, contributing to costcompetitiveness through reduced investment and decreased
CO2 emissions by lowering operational energy consumption,
including electricity usage. Through continuous improvements
in our analysis technology, we aim to transition to prototype-lessdevelopment, reducing CO2 emissions during the prototyping
stage and further striving for environmental impact reduction.

VOICE

Development That Contributes to Society and the Environment

Aiming to Design Products That
Maximize Weight Reduction andLower Environmental Impact
through Optimization Analysis
Hiroki Ono
Team 2, Design Section 1,
Product Development Department

weight reduction is possible while maintaining performance,such as by optimizing plate thickness and efficiently increasing
section rigidity. It provides results that assist in the design andspecification development process.
The shapes that are discovered vary. Depending on how
the conditions are set, and it can yield results that humans may
not have thought of. Careful consideration can facilitate swift
problem-solving.
We fully utilized this optimization analysis in the developmentof the front suspension member for Toyota's new model.
We established our unique analysis conditions anddeveloped a decision-making approach to the results of theanalysis. It was challenging to implement these results into thespecifications, but we were able to leverage them to efficiently
create the lightest possible specifications while meeting therequired performance levels, which led to component orders for
the GR Corolla.
Moving forward, under F-tech's “challenging spirit,” we aim
to continue challenging ourselves and growing by taking on
new endeavors.

Governance

I was assigned to the design department and soon specialized
in analysis. At first, I was a bit puzzled by the term “specialized
analyst,” as I had expected to work on design. However, now I
realize that the role suits me well, as my nature seeks to pursue
the essence of things.
I mainly conduct detailed evaluations on whether the
specifications constructed by the designers meet therequirements for strength and durability.
To improve the accuracy of analysis, it is necessary toreconcile the differences in boundary conditions between
testing and analysis. The ability of the analysis personnel istested in how they interpret the theoretical setting of the test
and how they reflect it in the settings of the analysis. This also
incorporates our identity. It is a great joy when test results
match predictions. These daily trials and errors eventually leadto reductions in testing and prototyping, helping tosubstantially lower the environmental impact.
I have been involved in various types of analysis, and ofthese, I find optimization analysis to be fascinating andintriguing. Optimization analysis helps identify areas where

Management Strategy

With the increasing use of terms such as SDGs and carbon
neutrality, awareness of environmental issues is on the rise, leading
to various initiatives in the automotive industry to addressenvironmental concerns and reduce CO2 emissions. One of these
initiatives is the shift toward electric vehicles (EVs). However, theincreased weight of EVs due to battery installation can negatively
impact their energy efficiency. Similarly, in gasoline-fueled cars,
increased weight can lead to lower fuel efficiency and,
consequently, higher CO2 emissions. As a result, there is a growing
need for lightweight solutions in the Company's development
components. One of our key customers, Honda, aims to transition
all new vehicle sales in major markets to EVs and fuel cell vehicles(FCVs) by 2040. Toyota, meanwhile, has set a goal to make nearly
all new vehicle sales EVs by 2050. This trend towards electrification
is expected to accelerate further. To outperform our industry
competitors, it has become even more essential to develop
lightweight, cost-effective, and high-performance components.
Leveraging its unique simulation technology, built on past design
expertise, the Company is committed to developing lightweight,
high-strength, and environmentallyfriendly products.

Message from the President

Product Development Using Simulation
Technology (Front Suspension Member)

Introduction

Responding to Environmental Needs by
Making Products More Lightweight

SocialEnvironment
Global Initiatives

53

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54

Global Initiatives

Japan
Measures to Reduce the Loss of Gas Used by Paint Drying Furnaces

Fukuda Engineering has been actively investing in the developmentof engineers specializing in mold production and has previously
brought in employees from Group companies overseas to provide
technical guidance. In September 2022, two employees from its
subsidiary in India, ISS, were dispatched to the Company as overseas
trainees for one month to enhance their technical skills. Despite thecultural, religious, and dietary differences between India and Japan,
the trainees enjoyed their training and made diligent efforts toimprove their skills.
Although the training period was short, the training program was
successfully completed as planned. The trainees returned to Japan

Fukuda Engineering Co., Ltd. (FEG / Kazo, Saitama Prefecture)

after making plans to in turnprovide technical guidance tolocal employees.
Currently facing a shortageof mold production andmaintenance engineers,
Fukuda Engineering is planningto strengthen its role as acenter for mold technology
education in order to cultivate
mold engineers.

Ongoing Certification as a “Bright Company in Kumamoto Prefecture”

Kameyama Plant (Kameyama, Mie Prefecture)

Electricity consumption: Reduced by 2,670 kWh/year
CO2 emissions: Reduced by 0.7t-CO2/year[Cost 0] Effective reduction: ¥35,000/year

Haga Technical Center (Haga-cho, Haga-gun, Tochigi Prefecture)

Furthermore, by changing over the power-consuming vibration
tester used during the product evaluation stage from a hydraulic toan electric model, we have lowered power consumption by as muchas 1/10th. We are also strengthening our efforts to reduce
environmental impact(LCA) throughthe use of low-warming gas emission
electric furnace materials in thematerial field.
F-tech will continue to prioritize
research and development activities
aimed at reducing environmental
impact in the future.
Electric vibration tester

Reterra Inc. has been awarded the “Excellence Award” in the
Sainokuni Saitama Small and Medium-Sized Enterprises CO2
Reduction Awards for its efforts in reducing CO2 emissions as part ofits commitment to carbon neutrality.
This award is presented to companies selected from a pool of(t-CO2)
16,00013,067Reterra CO₂ Emissions

Ener

gy sa

10,77912,000
8,000

ving

eﬀec

t

8,733

10,951

2018

2019

2020

2021

912

2022 (Fiscal year)

Reterra CO₂ Reduction
600t-CO₂ Reduction every year

800

543

600

Increased production

4,000
0

9,645

(t-CO2)
1,000

Global Initiatives

In keeping with the global trend towards electrification in the pursuitof a decarbonized society, demand to expand our portfolio oflightweight components has been increasing.
At the Haga Technical Center, we utilize proprietary optimization
design tools from the initial stages of design to create lightweightcomponents while meeting all required criteria for rigidity, strength,
durability, and collision performance.
Recently, we have achieved a weight reduction of more than
10% compared to the current subframe used in global models. In
next-generation models, we will continue to offer even lighter
components to improve fuel efficiency and contribute to global
efforts to reduce CO2 emissions.

Award ceremony (May 11, 2023 at the Saitama Prefectural governor's mansion)

600 enterprises in Saitama Prefecture that have demonstrated
outstanding initiatives and served as models for others, based on
their continuous efforts in promoting energy efficiency andachieving significant results. Reterra has actively implemented andimproved the operation of high-efficiency furnaces and motors,
such as melting holding furnaces and casting machines, and has
thoroughly reduced air conditioning loads at its facilities. Theircollaborative efforts with Group companies (16 locations worldwide)
and the sharing of energy-saving
measures through global expansion,as well as their unique “Energysaving Case Studies” document,
featuring over 100 examples, haveearned high praise led to thisprestigious and award.

400

620

440

573

200
0

2018

Environment

Efforts to Reduce Component Weightand Improve the Environment

Reterra Inc. (Ogano, Chichibu, Saitama Prefecture)

Social

250-ton press
Timer to stop
the main motor

Sainokuni Saitama Small and Medium-Sized
Enterprises CO2 Reduction Awards “Excellence Award”

GovernanceThe 250-ton press operates alongside a 1,000-ton machine. The 250-ton press is unmanned,
and production stops only when the coil material for the leveler machine is depleted.
However, the main motor continues to rotate, wasting energy until the next setup. To
address this issue, we have introduced a new timer interlock function and implemented arelay circuit control to ensure that the main motor also stops when the leveler machine halts.
This improvement has reduced power consumption by 2,670 kWh per year (equivalent to 0.7
t-CO2 in emissions).

received certification in October 2019 and,after a three-year certification period, has
successfully applied for and received therenewal of its certification for the period from
October 11, 2022, to October 10, 2025. As of
FY2022, a total of 383 companies inKumamoto Prefecture have been registeredand certified under this program. Kyushu
F-tech will continue to actively engage in activities involving all
employees to ensure its ongoing certification in the future.

Management Strategy

Saving Energy by Using a Timer to Stop the Main Motor (250-Ton Press)

Kyushu F.tech Inc. . has applied for the renewal of its certification as a“bright company in Kumamoto Prefecture,” under a prefectural
government program. The initiative aims to designate companies thatprovide a vibrant and safe working environment where employees
can thrive, in contrast to “black companies” (a term coined by
Kumamoto Prefecture to represent the opposite of such companies).
Through widespread recognition of the exemplary efforts of these“bright companies,” the program aims to enhance the overall working
conditions and treatment of employees in the prefecture, as well as
promote local employment for young people. Kyushu F-tech initially

Kyushu F-tech (QFT / Yamaga, Kumamoto Prefecture)

Message from the President

alarms are triggered at the appropriate times. These improvements
have allowed us to minimize the time drying furnaces are in
operation. This has in turn resulted in a significant reduction in gas
consumption and helped lower CO2 emissions.
This in-houseinitiative has
reduced our annual
gas consumption
by 5,641 m3 andCO2 emissions by
11,733 kg.

Global Human Resource Development Initiatives

Introduction

The Kuki Plant operates with an integrated production system, frompressing to assembly, and requires a significant amount of energy.
In particular, the painting process uses burners that consume alarge amount of natural gas to maintain products at a constantsurface temperature. We have been working on gas reduction
measures to lower CO2 emissions.
Specifically, we have introduced a system that calculates thetime it takes for products to arrive at the drying furnace and thetime required for the furnace temperature to rise, and then ignites
and extinguishes the burners at the optimal timing. Sensors areused to detect the position of the initial and final products, andKuki Plant (Kuki, Saitama Prefecture)

2019

2020

2021

2022 (Fiscal year)
（年度）

55

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56

Global Initiatives

North America“Relay for Life”

https://relayforlife.jp/whats-rfl

From September to December 2022, DM’s Environmental Systems
Division conducted a donation campaign for prescription eyeglasses.
A total of 73 employees participated in this activity, collecting 88 pairsof glasses, which were donatedto a collection station at a local
eyewear store. The glasses werethen sent to the nearest LionsClub Eyeglass Recycling Center,
where volunteers sorted,
cleaned, and measured theprescription strength, carefully
packaging the glasses for storage
until they are needed.

The Relay for Life is an international event organized by the American Cancer Society (ACS).
This charity activity is aimed at supporting cancer patients and their families, with the mission
to “Save Lives.” It aims to empower those who have been diagnosed with cancer, remember
those who have passed away, and create a society where no one suffers from cancer.
FPA employees participated in this event and collectively raised $1,300 in donations tocontribute to the association.

Efforts to Resolve Labor Shortagest
at Production Sites

to keep up on the training front. Promoting employee recruitment
and retention is crucial for the company. FPG is committed totackling thischallenge as one
united team, as it
is also essential
for creating afulfilling work
environment for
its employees.

F.TECH R&D NORTH AMERICA INC. (RDNA / Ohio, United States)

financial contributions as a company. RDNA remains committed tocontinuing such community contribution activities.

F-TECH CSR REPORT 2023

*Activities in which individuals or groups of people care for specific trees (planting,pruning, etc.), caring for the trees as if they were “their own children.”

FAMILYABUSESHELTERMC.ORG/DONATE

F.tech RDNA will be collecting items from November 28
to December 8th for the shelter.

The mission of the Family Abuse Shelter of Miami Co.,
Inc. is to provide safe shelter to homeless and abused
persons in times of crisis and to offer life-changing
services promoting stability, dignity and self-reliance.

familya bu ses helt ermc.org/d onate
and you can make a monet ary
do nat ion t o t he s helt er.

VOLUNTEER
Y ou can v olunt eer wit h t he s helt er bychecking thei r webs ite for o pe ni ng s .

ITEMS TO DONATE:
Clothes
Toilet paper
Trash bags
Paper towels
TissuesCleaning
products
Lysol wipes
Twin sheets
Baby wipes
Canned formula
Diapers (all sizes)

OTHER WAYS TO DONATE
Y ou can al so go to their webis te at

Body wash
Feminine hygiene
products
Used cellphones
Toothpaste
Toothbrushes
Deodorant
Shampoo
Conditioner
Toys
Blankets

DONATION PROGRAMSConnect wi th t hem on A maz on Smileand Kr oge r Commu nity Re wards,
and e lig ible purchas es will be
donat ed back t o t he s helt er at no
cost t o yo u.

*ALL ITEMS MUST BE NEW, UNOPENED, AND
IN ORIGINAL PACKAGING*

F&P Mfg., Inc. (F&P / Ontario, Canada)

Nineteen volunteers planted 140 seedlings and 196
trees provided by the South Simcoe Streams Network.

Efforts to Protect Vital Water Resources
Due to its desert location, water is a precious resource for FEGQ,
which pursues ongoing efforts to reduce its water consumption. In
2023, FEGQ decreased annual water use by reducing its green
space. The 337.46 square meters of green space previously required
328.46 cubic meters of water annually. The annual waterrequirement per square meter of lawn is 1,000 liters, and the cost
per cubic meter of water amounts to 65.37 Mexican pesos. Whencalculated on an annual basis, this amounts to a cost of 21,471

F.E.G. DE QUERETARO S.A. DE C.V. (FEGQ / Querétaro, Mexico)

Mexican pesos. By replacing this green space with volcanic rock,
FEGQ reduced its annual water consumption by an average of
328.46 cubic meters.

Global Initiatives

F&P has introduced oil separators in the cleaning process at its painting department.
Separators allow for the removal of excess oil and extend the life of the cleaning baths. This
move has reduced waste generation by 330,512 liters. To decrease CO2 emissions, the facility
has replaced all fluorescent lights with 310 LED lighting fixtures. This has lowered monthly
electricity consumption by 24,257 kWh and yearly CO2 emissions by 87 tons, improving theworking environment for employees.
In terms of recycling, F&P has established standards for the safe and reliable recycling ofelectronic devices and partnered with “Recycle my Electronics,” a leading non-profit
organization known in the industry for its award-winning efforts. Since November 2022, thisorganization has recycled 1.56 tons of the company’s electronic waste. Additionally, F&P held
its annual tree-planting event on April 23, 2023. The company will continue to actively pursue
various initiatives to reduce environmental impact.

Under the “Adopt a Tree” initiative, all employees were invited toparticipate in tree planting activities at their own homes. A total of 20
employees took part in the activity. They and their families planted
the trees provided by the company and sent photos of the planted
trees to the company. Additionally, there was a request to plant trees
at the kindergarten attended by their children. In response, thecompany provided three additional seedlings. In the end, a total of 23
trees were able to find new “homes.”

Environment

Environmentally Friendly Initiatives—Reduction, Recycling, Afforestation

57

FPMX conducted an off-site tree-planting activity in August 2022.
Currently, there is no available space for tree planting on thecompany's premises, so alternative initiatives had to be considered.

F&P MFG DE MEXICO S.A. DE CV. (FPMX / Guanajuato, Mexico)

SocialEach year since FY2017, RDNA has made donations to the Family
Abuse Shelter of Miami County to support and provide care andeducation for domestic violence victims and the homeless. This
organization, with a history of over 40 years, continues to expand its
services and facilities to meet the increasing needs of the local
community.
In FY2022, RDNA also collected donations of essential goods
and new clothing from willing employees, as well as making“Adopt a Tree*” Initiative

GovernanceDonations to Support the Homeless
and Victims of Domestic Violencs

At outreach events, ophthalmologists, opticians, and trained
volunteers conduct vision screenings. Suitable recycled glasses
are then provided free of charge to the children and adults whoneed them.

Management Strategy

In recent years, local companies have struggled to find employees,
disrupting production. In the United States, labor supplies are tight,
particularly in manufacturing, where personnel outflows are morethan triple the number of inflows each year, so the situation isserious.
FPG was already working actively on a policy of recruiting andretaining employees as the foundation of its local operations since
before the disruption caused by the COVID-19 pandemic in 2020.
This approach has been highly praised by customers, but theongoing reality is that employee turnover is high and FPG is unable

F&P Georgia, A Division of F&P America Mfg., Inc. (FPG / Georgia, United States)

DYNA-MIG, A Division of F&P Mfg., Inc. (DM / Ontario, Canada)

Message from the President

Eyeglass Donation and Recycling Activities

Introduction

F&P America Mfg., Inc. (FPA / Ohio, United States)

BEFOREAFTER

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58

Global Initiatives

Global Initiatives

China

Asia

Philippines/Thailand/Indonesia

Promoting Renewable Energy with Solar Panels—Reduced Annual CO2 Emissions by Approximately 2,305 Tons

F-tech R&D (Guangzhou) Inc. (FRDCH / Guangdong, China)

implement waterproofing measures. The cause of the leak wasinvestigated in collaboration with a vendor, and appropriate
countermeasures were implemented (as explained in theattached photos). Furthermore, to prevent a recurrence, monthly
inspections of the area will be conducted to thoroughly mitigate
the risk of water damage.

addition to reducing energy costs, the solar panels led to a reductionof 517.9 tons of CO2 emissions within one year. Moving forward, thecompany will continue to promote improvements to achievecarbon neutrality.

Ritual Feasts and Donations to Children's Homes

PT. F.TECH INDONESIA (FTI / Karawang, Indonesia)

In 2022, as public activities that had been restricted due to the impact
of COVID-19 gradually resumed, a local tradition of ritual feasts wasreintroduced. This festival is based on religious teachings to provide
assistance to those in need, and as a contribution to the community,
FTI donated two goats and provided financial support to a children's
foster home. The goats were donated through the local government,
and the donation was personally handed to the children's foster
home, allowing people from the company to witness the joy on therecipients' faces. Their expressions of happiness reminded employeesof the importance of community contribution and encouraged us totake part in further opportunities to contribute to the community.

Global Initiatives

Cover around piping with waterproof material Trays installed for double protection

FMTL recognized that Thailand's consistently high temperatures andlong hours of sunshine meant it might be effective to introduce asystem of solar panels, so it established a project team to conduct aninvestigation. After meeting with various manufacturers andconsidering their respective features, amanufacturer was selected. The installationof solar panels on the factory roof wascompleted and operations commenced inJune 2022. FMTL adopted a PPA system witha power generation capacity of 997.3 kWh.
This solar panel system has approximately
halved the company’s cost of electricity. In

F-TECH MFG. (THAILAND) LTD. (FMTL / Ayutthaya, Thailand)

Environment

F-TECH CSR REPORT 2023

Lowering of CO2 Emissions by Installing Solar Panels—Cost of Power Reduced by Half

Social

59

Replacement packing

Every December, FRDP’s staff strive to share the blessings they havereceived throughout the year by conducting the Christmas Gift
Project as a way to give back to the local community. This year, thecompany donated a kitchen and a complete set of tableware to Ang
Bahay Parola, a missionary home that provides a loving family for
approximately 50 homeless children in Sta. Rosa Laguna. FRDP also
supports and cooperates with FPMI’s blood donation activities.

Governance

At FRDCH, the air conditioning unit in a new server room developed
a water leak. The leak was directly above the server equipment,
posing a serious risk of system failure (water damage).
The server contains valuable data (intangible assets)
generated from daily business activities. To ensure peace of mind
and safety, measures were taken to address the water leak andemployee. As a member of the group, we will continue to contributeto the local community in terms of environment, culture, andeducation, and grow together with the community.

F.tech R & D Philippines Inc. (FRDP / Laguna, Philippines)

Management Strategy

Facility Risk Countermeasure Initiatives

Packing that had deteriorated

Contributing to the Community through theChristmas Gift ProjectF-tech Wuhan Inc. (FTW / Hubei, China)

In keeping with FTW's action policy of “engaging with the local
community,” all employees have united to cooperate with local
public projects. Amid the continued spread of COVID-19, in
December 2022 the company sought to prevent infections as it went
about its social contribution activities. Employees contacted publicorganizations online to confirm the required support. FTW decided tofocus on donating books for children, as it was the most needed formof support at the time. Within only a few days of announcing thebook drive, employees had donated hundreds of books. Not only did
employees donate books their own children had used, but some alsopurchased new books specifically to contribute. We were deeply
moved by the profound affection shown by each and every

FPMI has introduced a wellness program to maintain the health and safety of employees
and their families, and the company collaborates with hospitals to provide support forblood transfusions when needed by Company employees. Donating blood can also
reduce the risk of heart and liver diseases, cancer, and contribute to the production of
new blood cells, weight maintenance, lowering cholesterol levels, and improving mental
health. On August 26, 2022, a blood collection event was held on-site, during which 47
bags of blood were collected from 44 donors, with 30% of the donations reserved as
inventory for FPMI.

Message from the PresidentChildren's Book Donation Activity

it at 85% of the regular rate. Through this initiative, the company
expects to save around approximately 488 thousand yuan inelectricity costs annually while contributing to a cleaner and moresustainable energy supply for society.

F-TECH PHILIPPINES MFG., INC. (FPMI / Laguna, Philippines)

Introduction

As part of its corporate social responsibility efforts, FTZ promotes theuse of renewable energy. The company introduced a solar power
generation system in the second half of 2022. The new system
consists of 6,140 panels with an area of approximately 25,000 square
meters, capable of generating up to
2.4 MWh per day and reducing CO2
emissions by approximately 2,305
tons annually.
All the electricity generated
from the installed power
generation system is supplied tothe power grid, and FTZ purchases

F-tech Zhongshan Inc. (FTZ / Guangdong, China)

FPMI Blood Donation Event Combining Health
Promotion and Social Contributions

F-TECH CSR REPORT 2023

60

Global Network (As of April 1, 2023)

Fourteen Production Sites and Nine R&D andSales Facilities in Nine Countries
In addition to expanding production bases, we have established development centers in various regions to enhance our responsivenessto customer needs. We are advancing information sharing in areas such as quality, development, procurement, and the environment,
aiming to elevate the overall level of the Group.

Overseas Locations
DYNA-MIG,Adivision of
F&P Mfg.,Inc.

FUTIAN MOULDTECHNOLOGY (YANTAI) CO., LTD.

CANADA
F&P America Mfg., Inc.

F-tech Wuhan Inc.

UNITED STATESOF AMERICA
F&P Georgia, A division of
F&P America Mfg.,Inc.

F-tech R&D (Guangzhou) Inc.

CHINA

F-tech Zhongshan Inc.
F-Tech Automotive
Components Private Limited.
India Steel
Summit Private Limited

THAILANDINDIA

F-TECH PHILIPPINES, MFG., INC.
F.tech R & D Philippines Inc .

North America (6)China (2)AP (4)●…R&D and Sales Facilities
Japan (2)North America (3)China (2)AP (2)

Overseas Affiliates●F&P Mfg., Inc. [Ontario, Canada] (F&P)●DYNA-MIG, a division of F&P Mfg., Inc.
[Ontario, Canada] (DM)●F&P America Mfg., Inc.
[Ohio, United States] (FPA)●F&P Georgia, A division of F&P America Mfg., Inc.
[Georgia, United States] (FPG)●F.TECH R&D NORTH AMERICA INC.
[Ohio, United States] (RDNA)<Equity-Method Affiliates>●Johnan America, Inc.
●Johnan De Mexico, S.A.de C.V.
●Johnan F.tech (Thailand) LTD.
●V EE GEE Auto Components Private Limited.

●Head office, Kuki Plant [Kuki, Saitama Prefecture]●Kameyama Plant [Kameyama, Mie Prefecture]●Equipment Center [Kazo, Saitama Prefecture]●Haga Technical Center [Haga-cho, Haga-gun, Tochigi Prefecture]

Haga Technical Center

Reterra Inc. (Chichibu)

Equipment Center (Kazo)

Johnan Manufacturing Inc.

Head office, Kuki Plant
Fukuda Engineering Co., Ltd.
(Kazo)

Johnan-Kyushu
Manufacturing Inc.

F-TECH CSR REPORT 2023

●F-TECH MFG. (THAILAND) LTD.
[Ayutthaya, Thailand] (FMTL)●PT. F.TECH INDONESIA[Karawang, Indonesia] (FTI)●F-tech Automotive Components Private Limited[Haryana, India] (FTAC)●India Steel Summit Private Limited[Uttar Pradesh, India] (ISS)●F-tech Zhongshan Inc. [Guangdong, China] (FTZ)●F-tech Wuhan Inc. [Hubei, China] (FTW)●FUTIAN MOULD TECHNOLOGY (YANTAI) CO., LTD.
[Shandong, China] (FEGY)●F-tech R&D (Guangzhou) Inc.
[Guangzhou, China] (FRDCH)

Domestic Locations

Domestic Locations

61

F.TECH R&D
NORTH AMERICA INC.

F&P MFG DE MEXICO, S.A. DE C.V.

●Michigan/ R&D NA Office[Michigan, United States]●F-TECH NORTH AMERICA INC.
[Michigan, United States]●F.E.G. DE QUERETARO S.A. DE C.V.
[Querétaro, Mexico] (FEGQ)●F&P MFG DE MEXICO S.A. DE CV.
[Guanajuato, Mexico] (FPMX)●F-TECH PHILIPPINES, MFG., INC.
[Laguna, Philippines] (FPMI)●F.tech R & D Philippines Inc.
[Laguna, Philippines] (FRDP)

Kyushu F.tech Inc. nc.

MEXICO

F.E.G. DE QUERETARO S.A. DE C.V.

PT. F.TECH INDONESIA

Japan (2)Michigan/R&D NA Office
F-TECHNORTH AMERICA INC.

PHILIPPINES

F-TECH MFG. (THAILAND) LTD.

●…Manufacturing Locations

F&P Mfg., Inc.

Kameyama Plant

Domestic Subsidiaries●Fukuda Engineering Co., Ltd.
[Kazo, Saitama Prefecture] (Fukuda Engineering)●Kyushu F.tech Inc. [Yamaga, Kumamoto Prefecture] (QFT)●Reterra Inc. [Ogano, Chichibu, Saitama Prefecture]

Domestic Affiliated Companies●Johnan Manufacturing Inc. [Ueda, Nagano Prefecture]●Johnan-Kyushu Manufacturing Inc. [Nogata, Fukuoka Prefecture]