Sustainability
Report201764

Corporate Philosophy

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

Corporate Creed

VisionMission

Sincerity

To makeThrough acoustic
products or its solutions,a total commitment tohelp create a comfortable
life and pleasure ofcommunication aroundthe world. A truly global
enterprise our futuresociety counts on.

contributions for
future society
through acoustics

CONTENTS
Corporate Philosophy

1

Governance19

Top Message

3

Society

27

Interview

5

Environment

37

Foster Group CSR Management

743

United Nations Global Compact (COP)

17

Corporate Profile and Financial
Information
Corporate History

45

Data Table

47

1

Corporate Philosophy

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

- Principles & Values -

I

II

III

THE LEADING
SOUND-TO-LIFE
SOLUTIONCOMPANYALWAYS
IMPROVING

EVER MORE
GLOBAL AND
INCLUSIVE

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

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

Embrace diversity andpursue more global synergy
at all management levels.

1. Trusted: Earn trust of users andpartners.

4. Fast and Flexible: Be fastmoving and flexible

8. Open-Minded: Be open–
minded and inclusive

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

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

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

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

6. Proactive: Embrace learningand proactive leadership

10. Team: Respect others aspart of a team with sharedgoals.

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

2Top Message

Top Message

FOSTEX Speaker System G2000a

3

Hiromi Yoshizawa President

Top Message

Corporate Social Responsibility and Management
As we fulfill our corporate social responsibilities, Foster Group sincerely wishes to be a corporate citizen that is relied on
and loved by our various stakeholders. It seeks to do this by maintaining the consistent spirit of doing business for society
and people based on our corporate creed of “sincerity.”Omi Shonin (merchants from modern Shiga Prefecture), used to say that in business you should have “three goods”—goodfor the seller, good for the buyer and good for the society. I believe that many corporate entities that have been operating
for more than 100 years secure these “three goods” by making reasonable profits and returning them for the good ofsociety. Securing these “three goods,” we also aim to be a centennial company that has a shining presence in the coming
new society.
Society is currently experiencing major changes. With the industrial revolution being brought about by IoT (Internet ofThings), cars with automated driving capabilities, the growing use of drones, the development of AI and many otheradvances, we feel that the development of technologies with the potential to fundamentally change our way of life, andother changes in society, are progressing undeniably, at a pace that far exceeds anything that we anticipated.
In order to realize our corporate vision “to make contributions for future society through acoustics” and provide thrilling,heart-moving experiences that resonate with people around the world, we must continue to uphold the basic philosophyof “sincerity” that Foster has adhered to since its founding, while simultaneously making major changes ourselves as
we move forward. The key players who have a central role in achieving this are people, the tens of thousands of Foster
Group employees around the world. In addition to producing higher-caliber human resources, increasing opportunities
for personnel exchange to achieve greater globalization and improving and enhancing our training programs, we will also
make proactive efforts to utilize and promote a wider range of human resources within our organization. We will accelerate
reforms to our working method to enable a greater number of valuable human resources to overcome various constraints,
to excel and to play an active role within the Foster Group. We will seek to achieve diversity, in the true meaning of theword.
To unite people with digital technology through acoustics and become a company that is loved by all, Foster will continue
to be a specialist in acoustics that pursues better quality sound to delight music-lovers worldwide.
In addition, the Foster Group will continue to maintain compliance and promote environmental activities as part of our
CSR activities, to ensure thorough quality control and risk management, and conduct our business operations based on
the values of discipline, responsibility and social contribution.
Foster Group has signed the “United Nations Global Compact” to represent our commitment to CSR activities. We havealso defined “Foster Rhythm” to clearly describe “Principles & Values,” penetrate the concept of our corporate philosophy
to our employees, and strengthen and hand the foundation of the corporation on to future generations.
We will continue to strive to become an enterprise that is loved by society and that offers satisfaction for its various
stakeholders.

Technologies involving interfaces between
acoustic signals and human beings
Strengthen vibration components initiative- Develop “making sound” into “making vibrations” -Wearable
DevicesAutonomous
Driving/ADAS

IoT

AI

(Internet of Things)(Artificial Intelligence)

Robotics

VR(Virtual Reality)

DronesDevelop actuators that enable tactileinteractivity in gaming, manufacturing,and medical settings

Develop new products equippedwith vibration components

4Interview

Interview
Challenges of Foster to Become aCentennial Company
Foster Group will mark its 68th anniversary in July of this year. We have responded to the expectations of our customers
all over the world, “enjoying sounds,” through the OEM business specialized in acoustic products since our founding.
Those products have been born from “the power of approximately 50 thousand employees” who are working around theworld.
Looking forward, we have started to become a corporation with a history of 100 years, a centennial company. The bridge
between the Foster of the past and the future Foster targeting its 100th year anniversary depends mostly on the power of
each employee.
To achieve these goals and dreams, approach the “Vision” of “making
contributions for future society through acoustics” and to align the vectorsof all members, Foster employees played a central role in developing the“Foster Rhythm Guidebook.” This so-called manual provides guidancefor our daily behavior. Currently, employees around the world have the“Principles & Values” card, which has been translated into nine languages.
Together with the “Foster Rhythm,” the skills that will lead us to the future
are nothing less than the acoustic technology that we have accumulated
over more than 60 years. We have especially focused on acoustic quality
to improve our technology.

Foster Rhythm Card

It is said that the most important part that determines the quality of a speaker’s sound is generally the one made of asaucer-shaped thin material, called the diaphragm. This diaphragm is the part that converts the sound signals input via
various means such as a CD or a smartphone into vibrations and outputs them as audible sounds. In other words, for us
to hear any sounds from the speaker, the diaphragm plays the role of an interface between acoustic signals and humanbeings.
The diaphragm that produces sounds is generally called cone paper. Relying on the fact that sounds differ dependingon the selection and manufacturing method for cone paper materials, we test the possibilities of various materials at thedevelopment division in Akishima headquarters in Tokyo and develop the materials that are the most suitable for theserespective sounds.
It is said that the materials most suitable for the cone paper
should have the following three elements: 1. lightness,
2. strength, and 3. internal loss (vibration energy damping). In
addition to the conventional paper pulps, we combine a wide
range of materials such as non-wood pulp (kenaf); natural
materials including mitsumata, which is also used for bills, andganpi, which is also used for Japan paper; and high-modulus
fibers including aramid and carbon to explore the possibilities of alimitless expanse of sounds.

Takashi Mikuniya, Material Development Section,
Speaker Engineering Department 3, SP Business Division
In charge of the development of the diaphragm materials

5

Cellulose nanofiber is a material that our development engineers
have employed to actual cone paper in collaboration witha material manufacturer. There are various types of cellulose
nanofibers such as one made of wood and one producedwith the help of bacteria. The thickness of a single fiber isInterview

approximately 1/5000 to 1/10,000 of human hair, yet it is five times stronger than iron. While maintaining that strength,
the internal loss (vibration energy dump) performance of this fiber contributes to the production of quality sounds that are
obviously different from the other materials.
As you see with the case of the cellulose nanofiber, our development engineers who keep exploring suitable materials arelike “cooks” who create recipes of materials that will produce quality sounds, from various materials. Using those recipes, wemanufacture cone paper at our internal factories in China and Myanmar. This is because we deeply understand that different
recipes for cone paper create different sounds that are desired by customers, which is to say, those recipes are the sourceof our value creation.
Speakers generally consist of a small number of parts. With
such a limited number of components, which create the different
sounds, we closely examine materials with a strong persistence
for each of those parts to create the recipes of the materials.
The recipe created by a “cook” (development engineer) isthen handed over to another “cook” (design engineer), who
combines such parts to produce the sounds that are desiredby our customers.
Our customers deliver the sounds we have produced throughvarious types of products, including automobiles, smartphones,
and audio products to their end-users as top-level companies ineach field. They are located in not only Japan but also in a wide
Masahiro Miwa, Diaphragm Engineering Section,
Speaker Engineering Department 3, SP Business Division
range of regions such as Asia, America, and Europe. Therefore,
In charge of developing diaphragms
they have different cultural backgrounds and substantiallydifferent target “sounds.” To catch the subtleties of those desired “sounds” is very much a part of the technology we haveaccumulated.
In the section “Foster Rhythm” above, “Steadfast” and “Expert”
are listed as “Principles & Values.” While focusing on theanalog area (using sounds to appeal to hearing, which is oneof the five senses of human beings), we continue our steadyefforts to sincerely produce the “sounds” that are desired byour customers as specialists. We will continue to recognize its
value.
Like many other excellent companies, we will continue to work
towards our ambition of being a centennial company while
appreciating our corporate culture of the “three goods”—goodfor the seller, good for the buyer and good for the society—(“we do our best for our customers and other stakeholders
while keeping in mind that a proper attitude as human beings
is more important than acquiring income from the business”).
We will also continue to develop as a specialist of sounds andfulfill our social mission with “sincerity” to contribute to thecontinuous development of society.
Yuji Yokota, Speaker Engineering Department 2,
SP Business Division
In charge of designing speakers for customers

6Foster Group CSR Management

CSR Management
Since its founding, the Foster Group has aimed to become indispensable
to society, and has continued to grow and develop under its corporate
philosophy of “Sincerity.” For more than half a century since its founding,the Group has continued its activities in the spirit of its corporate creed of“Sincerity,” the essence of which remains unchanged to date.
With the 70th anniversary in 2019, while “aiming to be a centennialcompany” the Group recognizes it as the key to continue to adhere to
the management that is based on its corporate creed of “Sincerity,” thatis, “always convey the truth and offer human- and environmentally friendly
services to all stakeholders with cordiality.”
The Foster Group’s Corporate Governance Code, which was establishedin 2015, presents “appropriate cooperation with stakeholders other thanshareholders” as one of its basic principles. This reflects the ever-increasing
Atsushi Narikawa
social demand for the environmental, social and governance (ESG) activities
Officer in charge of CSR, Senior Managing Directorof a business entity. The Foster Group and all of its directors, officers andemployees hereby declare that we will engage in “corporate activities withsincerity” in accordance with the CSR Charter below. We will also continue to seek greater corporate value by addressing
the needs and expectations of our stakeholders in the most appropriate way.

Foster Group CSR Charter
Foster Group’s activities are under the corporate creed of “Sincerity”, and vision of “To make contributions for futuresociety through acoustics” and its mission “Through acoustic products or its solutions, a total commitment to help create
a comfortable life and pleasure of communication around the world. A truly global enterprise our future society counts on.”A subject of “Corporate Social Responsibility” itself is a universal proposition in the deployment of corporate management
at Foster Groups. As shown in the corporate creed, a CSR way of thinking has lied beneath in this company from thetime of its foundation.
CSR or CSR Management that suit Foster Groups, who extends business activities globally, are “to concentrate on
its core business based on the corporate creed for the purpose of sustainable development of a company as a global
corporation, and to fulfill its social responsibility by enhancing the corporate value while raising the stakeholder satisfaction
not only in financial aspect, but also in the harmony of environment and society aspects”. The CSR management meansthat the corporation fulfills its social responsibilities through such activities.
In achieving this objective from global perspectives, the Foster Group and all of directors and employees will initiate CSR
activities based on followings.
1. We stand and act on our corporate creed, vision and mission.
2. We act in accordance with the “Foster Group Corporate Action Guideline” that a company should comply, and the“Foster Group Code of Conduct for Staffs” that all directors and employees of the group should abide by.
3. We regard variety of stakeholders including customers, employees, suppliers, shareholders and investors, and local
communities as the subject of our CSR activities, and pay respect to diversified sense of “value”, “culture” and“economic, environmental or social” circumstances that vary depending on countries or areas.
4. We act in accordance with laws, regulations of home and abroad, and international rules by responding to various
requirements. Those requirements are compliance to corporate ethics, security of product quality and safety,
environmental protection, improvement of work environment, maintenance of employment, development of humanresources, respect to human rights, fair competition, contribution to society and community, and proper tax payment.

7

Foster Group CSR Management

5. We perform proper risk control, disclose information timely and adequately with accountability to support the reliabilityof CSR, and put value on having dialogue with stakeholders.
6. We identify company representatives responsible for ensuring implementation of the management systems andassociated programs in order to comply with this CSR Charter. Status review, with personnel designated bymanagements, is held on a regular basis.
By conforming to this CSR Charter, we hereby declare to engage in the “corporate activity with sincerity.”

Foster Group CSR Promotion
Foster Group CSR Systems
As shown in the following “CSR System,” Foster Group has established the CSR Committee with representatives of related
sections as core members at its headquarters. CSR Committee Meetings are held monthly to ensure the monitoring andcollaborative promotion of CSR activities on a Group-wide basis, including overseas business locations, each of which
has an appointed person responsible for the promotion of CSR activities.

General Meeting of Shareholders
Board of Statutory Auditors

Board of Directors

Accounting Auditor

PresidentInternal Audit Department
Officer in Charge of CSR
CSR Promotion Department

Relevant committees
CSR Committee

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

CSR Representative

Corporate divisions and business divisions

Group companies

8

Foster Group CSR Management

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

Sustainable development

Provision of new value
Improvement of corporate value

Engagement

Directors/Officers
Employees

Ideal centennial company
with a century of history
Back casting The Ten Principles of the United
Nations Global Compact
 EICC Code of Conduct

Respond tosocial demands

Socially valuable domains
Risk Management
Basic CSR

Compliance with laws
and regulations

Clients
Consumers
Shareholders
Investors

Sustainably
developing domains

CSR reflecting ourcorporate value

Stakeholders

 Environment Human rights
 Anti-corruption
 Industrial safety and health Quality and product safety
 Corporate governance Disclosure of information  Information security, etc.

Suppliers
Communities
Future generations
Governmental
Agencies
Industry

Business domains
Triplebottom line

EconomyEnvironment

Society

Sustainability

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

Development of CSR Materiality
The Foster Group developed the CSR Materiality for the first time in 2016. The development method and procedures
were determined by extracting the important items for CSR from the policies and their items set out by the Company.
The basic policies and extracted items are:
1. The Major policy “To establish a base of global business and create a profitable structure toward the year 2020” from“2016 Managerial Policy.”
2. The following two items were extracted from “Annual TQM (Total Quality Management) Policy for Fiscal Year(2016)”:∙ Draw and execute an improvement plan suitable for the maturity of each site for “customer claim reduction” measures.
∙ Establish a global environment management system and embody and promote the orientation of “energy
management” targeting 2020.
3. The following two items were extracted from “Environmental Policy”:∙ Conserve the global environment by promoting resource and energy saving in product development and design.
∙ Prevent contamination and reduce CO2 emissions in all phases of business activities including manufacturing anddisposal.
4. The item “Raise the awareness of environmental protection and biodiversity and thereby develop human resources
who contribute to society” was extracted from the “Medium-term Environmental Policy.”9

Foster Group CSR Management

Influences on stakeholders' evaluation and decision making

The extracted materiality items are as follows:
1. Responsibilities in the value chain: Decent work, quality, customer-oriented and environmental conservation
2. Global human resource development and utilization
3. CSR-based global Group governance
For item 1, we consider the entire value chain as a primary body and divided it into items for “strengthening positiveeffects” and items for “minimizing negative effects.” From each of those items, we extracted the detailed items.
Quality and sustainable product supply

Scope 3: GHG reduction

Decent work
Organization's global system establishment andgovernance strengthening

LCA (Life Cycle Assessment)

Penetration of our philosophies
Global Human Resource Development

Degrees of economic, environmental andsocial influences of the organization

CSR Materiality-based PDCA
Goal

Materiality

We will conduct hearings on aperiodic basis and perform usefulness
assessments.

We signed the United Nations
Global Compact and started
considerations on activities
regarding human rights and laborfor 10 principles in four areas.

We will continue to collect information
through subcommittee activities andfurther strengthen our activities in the
supply chain.

Quality andsustainableproduct supply

We maintained a record of zero
failures that would have serious
influences on society (human life,
property, environment and so on).

We will maintain a record of zero failuresthat would have serious influences onsociety (human life, property, environmentand so on) and reduce customer
complaints.

LCA(Life Cycle Assess)

We started considerations
aiming to define the life cycle
range and set KPIs.

We will develop an activity plan for the
future using the results of considerationon the definition of the life cycle range andsetting of the KPIs.

In addition to Scopes 1 and 2,
which we already had started
implementing, we started
considerations for reducing
GHG in Scope 3.

We will develop an activity plan for the
future using the results of consideration on
Scope 3: GHG reduction.

Global Human Resource
Development

To further promote diversity,
we started consideration on
the introduction of a global
grade system, which enables
employees at Group companies
worldwide to work moreglobally.

We will continue to implement our current
activities. In addition, we will conduct
global leadership training on a regularbasis.

Penetration of our philosophies

We developed the “Foster
Rhythm Guidebook” to penetrate
our philosophies, and started
distributing it to all employees in
our Group.

We will adapt the philosophies of Foster
Rhythm to concrete activities for theirpenetration into the entire Group.

Organization's global systemestablishment and governancestrengthening

We selected the persons
in charge of CSR at theheadquarters and seven Group
companies, and established a
global CSR structure.

We will continue the CSR promotion
activities for Group companies based on
the established CSR promotion system.

Strengthening
positive effects
1. Responsibilities inthe value chain:
Decent work,
quality, customeroriented andenvironmental
conservation

Minimizing
negative
effects

3. CSR-based global
Group governanceFuture Plan

We implemented various
activities such as reduced
working hours in the first year of
the working style innovation.
Decent work

2. Global humanresource
development andutilization

Results and Progress

Scope 3: GHG
reduction

10

Foster Group CSR Management

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

Customer Audits and Assessments
To meet various requests from customers, the Foster Group accepts audits by customers at its manufacturing sites. In
terms of the environment and occupational safety and health, our production facilities in China and Vietnam received 16
on-site audits by 4 corporate customers during the period from April 2016 to March 2017. Over the course of the year,
we also received 20 requests (from 11 different customers) to complete and return Self-Assessment Questionnaire, andwe responded to these requests accordingly.
We will continue to focus attention on the environment and safety in our manufacturing practices and address requests
from customers with sincerity.

External view of the factory in Vietnam

Customer audit closing meeting (China)

Surveys from External Organizations
The Foster Group also responded sincerely to the CSR surveys received from external investigatory bodies. Last year, we
received and responded to eight surveys regarding CSR, environmental management, ESG, SRI and others.
Among them, as a result of the “CSR company ranking survey,” which was conducted by Toyo Keizai Inc., we ranked
248th, which was a significant improvement from 323rd two years ago. We will continue to address the survey requests
from external investigatory bodies with sincerity.

11

Foster Group CSR Management

Expansion of CSR In-house Education
Holding the Global CSR Communication Conference
We held the “Global CSR Communication Conference” on November 15 and 16, 2016. A total of 29 directors, officers
and employees involved in CSR gathered from the headquarters and 10 overseas sites on Penang Island, Malaysia,
where the Southeast Asia Procurement Center is located, in order to exchange their opinions through the accumulationof knowledge, information sharing, team building and other initiatives to accelerate the Foster Group's CSR activities.
We will continue to provide places for periodic communication to deepen mutual understanding beyond cultural, ethnic
and regional borders and unite as the Foster Group to actively promote in-house CSR education.

People holding discussions

Group photo of participants

12Foster Group CSR Management

Contributions to the community
Policies
With our mission “Through acoustic products or its solutions, a total commitment to help create a comfortable life andpleasure of communication around the world. A truly global enterprise our future society counts on,” the Foster Groupwill seek to build the trust of the community through our business activities to evolve jointly with inhabitants in local
communities.

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

Activity Promotion Structure
The Foster Group's social contribution activities are promoted by the CSR Promotion Department in cooperation with all
departments, including General Affairs, Manufacturing, Engineering and Sales.

Main Activities
Communicating with the community
We continued the naming rights contract with Akishima City regarding Akishima Community Hall, which is known locallyas KOTORI Hall by the citizens of Akishima City. The KOTORI brand name was given to the hall by Foster in April 2014.
In October 2016, Foster hosted the seventh “Screen Music-no-Utage” music festival. At the event, Foster exhibitedand sold KOTORI brand products. It built bridges between people in the local community and the Company with thecorporate philosophy of contributing to future society through acoustics.

Products being exhibited at KOTORI Hall

13

Foster Group CSR Management

As a company that regards harmony with the environment as one of its highest priority issues in its business management
activities, Foster held environmental studies class sessions and invited elementary school students in Akishima City to takepart in October 2016. These sessions enabled the children who will play a role as the next generation of adults to learn
about the importance of environmental preservation, and about the care for the environment that goes into our products.

Our product being explained at the gallery of our headquarters

Session about our care for the environment (headquarters)

As a member of Akishima City’s Environmentally Friendly Business Operator Network, we took part in the Akishima
Industrial Festival, where we promoted our environmental activities and eco-friendly products, and also heard the valuable
opinions of members of the local community in relation to our activities.

Exhibition booth

Our products being introduced at the booth

Investing in human resources for the future
In December 2016, we held a Speaker Study Class for general citizens at the Citizen's College Forum and a WinterVacation Parent & Child Crafts Class for sponsoring the event as a part of the Akishima Crafts Classroom community
course as a winter holiday event for parent-child interaction. The event was well received by local citizens as an event thatcreated good memories for the winter holidays.

Trainers who taught at the crafts class

Making speakers

14Foster Group CSR Management

In March 2017, we held a speaker making class, which was the first event sponsored for children by our consumer brand
FOSTEX company, at “Anfelit” showroom, where the FOSTEX products were exhibited. Eight children, between lateelementary to junior high school students, learned the mechanism of sound making and enjoyed making speakers thatplay melodies.

Making speakers

Listening to sounds from the speakers that the children madeSponsoring community development
In addition to these activities, Foster is promoting activities for exposing people to local traditional cultures throughAkishima Showa No Mori Organization and Akishima Tourism & City Planning Association, in which our headquarters
participates. Foster is also deepening communications with the local community through efforts such as cooperation with
the Akishima Location Service to engage in activities for revitalizing the local area and donations to the Social Welfare
Council to contribute to welfare in the local community.

Crime prevention and disaster readiness initiatives
Wishing the success of 2020 Tokyo Olympic and Paralympic Games, Foster is cooperating with the Tokyo Metropolitan
Police Department’s ANTEP (Anti-Terrorism Partnership, Tokyo) initiative, conducting disaster drills under fire department
oversight, and otherwise bolstering its crime prevention and disaster readiness initiatives in the local community.

Future Plan
Based on the Foster Group's policies, we will continue to conduct activities for communicating with not only the people
in the community, but also a wide range of stakeholders through our acoustic products and solutions.

15

Foster Group CSR Management

Community Contribution Activities at Overseas Sites

Students from Thanlyin Technological
University visiting Foster Thilawa

Foster Group's overseas manufacturing sites are active in local humanresource development. We accept students from universities and careercolleges in the local communities for internship placements, providing students
with opportunities to deepen their expertise by learning through practice andacquiring techniques that have not been taught in schools. The Foster Thilawa
in Myanmar not only accepted students for internships but also donatedmachines for learning to Thanlyin Technological University so that the students
can learn techniques and practice at school too.

In 2016, central Vietnam suffered flooding and the inhabitants sufferedextensive damage. Our subsidiary in Vietnam is conducting support
activities for the disaster victims. Clothes, rain coats, blankets,
drinking water containers and other items were delivered to thedisaster victims. Our subsidiary also donated money collected from
employees to the victims.
Employees of Group company in Vietnam andpeople in the affected area

Donation activity for children
in low-income households
conducted by the employees
at our Group company in Vietnam

Blood donation activity conductedby the employees at Foster Indonesia

Foster Group's overseas companies areengaged in various volunteering activities.
Our subsidiary provides support to match theneeds of inhabitants in local communities;
such as donation activities for children in
low-income households and the distribution
Donation activity for deprivedof essential daily supplies for impoverishedareas conducted by
the employees at our Group
families.
company in China
Our subsidiary has also actively participatedin the blood donation activities held by the Red Cross in that area.
Some overseas sites also conduct blood donation activities held within
the company on a regular basis every year and many employees haveparticipated.
Every year since 2004, under the corporate vision “To make contributions
for future society through acoustics,” ESTec Corporation, a Group
company in South Korea, cosponsors the Eom Jeong Haeng South Korea
National Choir Contest.
In line with the thinking of the Company's officers—that if everyone works
together and combines their power, it is easy to help at least one person—
the collected donations are being conveyed, via the inhabitant life support
office, to people in need of support in the Yangsan area in February and
September 2016.
On December 3, 2016, all the employees at ESTec attended the “WithCompassion—Share Kimchi” campaign, and donated 1,500 kg ofhandmade kimchi for the coming winter to a volunteer center in Yangsan
City. These donation activities have been carried out every year since 2010.

“With Compassion—Share Kimchi” campaign
in which the chairman and president of
ESTec Corporation also participated16

United Nations Global Compact

UN Global Compact
United Nations Global Compact
The Foster Group signed and joined the “United Nations Global Compact (UNGC),” the world’s largest corporate
sustainability initiative promoted by the United Nations, in January 19, 2017.
As a company that operates globally, we support the 10 principles of the UNGC of “Human Rights,” “Labour,”“Environment” and “Anti-Corruption” and conduct activities for compliance, decent work, care for the environment, andCSR procurement, etc.
To report the progress of those activities, we prepared the Communication On Progress (COP) for fiscal 2017.

UNGC Communication On Progress (COP) 2017
Human Rights
Principle 1

Businesses should support and respect the protection ofinternationally proclaimed human rights; andPrinciple 2

make sure that they are not complicit in human rights
abuses.

LabourPrinciple 3

Businesses should uphold the freedom of associationand the effective recognition of the right to collective
bargaining;

Principle 4

the elimination of all forms of forced and compulsory
labour;Principle 5

the effective abolition of child labour; andPrinciple 6

the elimination of discrimination in respect of
employment and occupation.

Environment
Principle 7

Businesses should support a precautionary approach toenvironmental challenges;

Principle 8

undertake initiatives to promote greater environmental
responsibility; andPrinciple 9

encourage the development and diffusion ofenvironmentally friendly technologies.

The Foster Group's commitments to human rights,
labor, environment and anti-corruption are defined in
the Foster Group Code of Conduct for Staffs. This code
covers the provisions of the EICC (Electronic Industry
Citizenship Coalition) Code of Conduct and Rev. 4,
which was revised in April 2017, is currently effective.
The items that correspond to the 10 principles are:Human Rights
10. Responsible sourcing of minerals
23. Respect to Human Rights and No Discrimination
Labour
23. Respect to Human Rights and No Discrimination
27. Compliance with Labor-related Laws
Environment
17. Preservation and Protection of Environment
Anti-Corruption
2. Compliance with Laws and Norm
8. Prohibition on Bribes to Foreign Officials
In addition, our commitments to the environment are
defined in the Foster Group Environmental Policy.

Anti-Corruption
Principle 10

Businesses should work against corruption in all its
forms, including extortion and bribery.

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

17United Nations Global Compact

Sustainable Development Goals (SDGs)
In line with the signature of UNGC, the Foster Group will continue to promote the Sustainable Development Goals (SDGs),
which are proposed by the United Nations, and conduct other CSR activities through the UNGC framework.
We will promote the following items among the 17 goals through our business activities to support societal change.

■ Sustainable Development Goals (SDGs):
United Nations Website: http://www.un.org/sustainabledevelopment/sustainable-development-goals/

18Governance

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

Corporate GovernanceTatsuhito Tanaka
Executive Officer and Head of Corporate Management Division

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

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

Board of Managing Directors
The Board of Managing Directors mainly consists of representative directors, managing directors, executive directors,
senior executive officers and statutory auditor. They hold discussions at the meetings before making decisions on theexecution of business operations.

Management Meeting, etc.
Mainly comprising the president and the head of the Company’s business divisions (including those who serve concurrently
as director or executive officer), the Management Meetings and the Division Head Meetings are held to report and discussmatters concerning the execution of businesses at the business divisions, in order to expedite decision making processes
and ensure that unified decisions are reached.
On a Group-wide level, twice a year, in order to facilitate consolidated management within the Group, the Domestic Group
Company Meeting is held by the top executives responsible for the management of the domestic Group companies;
the Global Budget Meeting is held by the top executives of the overseas Group companies to discuss their budgets;and the Global Strategy Meeting is held to discuss global strategies with regard to sales, technology, quality control andmanufacturing. Through these meetings, we share and reaffirm the direction in which the entire Foster Group is heading,and reinforce collaborative efforts within the Group.

Nominating Committee and Remuneration Committee
The Company has established Nominating and Remuneration committees as advisory organizations offering voluntary
advice to the Board of Directors. These committees are designed to enhance fairness and transparency in selecting andappointing people to managerial positions, and in determining the details of their remuneration, etc. Each committee

19

Governanceconsists of representative directors, managing directors, directors, standing statutory auditors, and statutory auditors(currently a total of six members including two independent officers).
General Meeting of Shareholders
Statutory Auditors/
Board of Statutory Auditors

Board of Directors

Accounting Auditor

Management Monitoring
President(Internal Control)

Management Meeting

Board ofManaging Directors

Division Head Meeting

Audit OfficeInternal Control OfficeBusiness Divisions

Domestic Group Company Meeting
Global Budget Meeting, etc.

Corporate Staff
Departments

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

HotlineCorporate Governance Guidelines
The Foster Group has established Corporate Governance Guidelines that express our basic way of thinking and frameworkwith regard to corporate governance. Details of these guidelines can be viewed via our website (Japanese).
http://www.foster.co.jp/csr/foster_group/pdf/20160401_corporate_governance_guideline.pdf

Corporate Governance Report
This report describes the concept and structure of our corporate governance in accordance with the regulations of theJapanese stock exchange.

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

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

Compliance Structure
The Foster Group places emphasis on the internal whistleblowing system to promote compliance. Such system is underoperation through the Compliance Hotline that connects whistleblowers to corporate lawyers or the highly independent
Internal Audit Office to early detect violations of compliance. The whistleblowing hotline is extensively available toemployees and officers of the entire Group as well as to their families and the employees of business associates.
For the protection of whistleblowers, internal regulations are established and disseminated to ensure that are treated fairly
or not involved in any trouble as a result of the their act.
Another specific effort is to reinforce the development and operation of internal control systems, with a focus on meeting
the internal control requirements of the Financial Instruments and Exchange Act, the J-SOX requirements, for the reliabilityof financial reports. Currently, the business operational processes at the Group’s headquarters and 11 major businesslocations are under supervision for compliance with the J-SOX requirements.

20

Governance■ Organization of the Compliance Committee (The same applies to the Risk and Crisis Management Committee)
Chief Executive (President)
Chairperson (Senior Managing Director)
Vice Chairperson (Executive Officer)
Consultation Contacts / Hotline

Secretariat

Committee members from the headquarters / Committee members from Group companies

Compliance Committee
Compliance efforts are led by the Compliance Committee based on the respective internal regulations.
In fiscal 2016, a compliance test was conducted to help improve awareness of compliance among employees, and in
an initiative led by the Compliance Committee, an outside expert (lawyer) was invited to lecture to employees with theobjective of making compliance related issues known and ensuring thorough observance.

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

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

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

Risk and Crisis Management Committee
As the basic operation policy in fiscal 2016, we promoted the enhancement and global expansion of risk management
ability and crisis responsibility and established a structure for prompt responses in the event of a crisis and a response
structure for any serious risk or incident when it is predicted, and enhanced the risk management system for usual
conditions. Specifically, we also held the Risk and Crisis Management Committee meeting in fiscal 2016 to review themeasures for the safety of the manufacturing facilities and inspection rooms on a Foster Group-wide basis. In addition
to those activities, we extracted important items to be monitored in fiscal 2017 at the Risk and Crisis Management
Committee, aiming to enhance the risk and crisis management structure.

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

21

Governance

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

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

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

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

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

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

Executive Chairperson

Vice Executive Chairperson

Secretariat

Committee members
from the New Business
Development Division

Committee members
from the Global Corporate
Support Division

Committee members
from the Corporate
Management Division

Committee members
from the Quality Assurance
Division

Committee members
from the Internal Audit OfficeCommittee members
from the Corporate
Planning Department

Committee members
from the MA Business Division

Committee members
from the SP Business Division

Committee members
from the Production Division

Committee members
from Fostex

Committee members
from Foster Micro Acoustic
Company

Committee members
from the Corporate Information
Strategy Department

Committee members
from Group companies

22Governance

Main Activities and Measures
Operation of the emergency-contact network (safety confirmation system)∙ To keep the headquarters functional, Foster Group has introduced a safety confirmation system using mobile phonesthat allow headquarters to issue an emergency notice to confirm the safety of its employees and their families when an
earthquake, disaster, or other emergency occurs.

Disaster drills conducted by headquarters and domestic offices∙ Once a year, the Foster Group conducts disaster drills involving all employees at headquarters and domestic offices.
At headquarters, the drill was conducted in October 2016. Firefighting training was conducted by the fire-extinguishingteam of the self-defense fire-fighting force on the day.

All employees evacuating to the parking lot
next to the headquarters building

Firefighting training∙ The Company provides an opportunity to participate in the
self-defense fire-fighting examination board hosted by therelevant fire department to improve the skills of the selfdefense fire-fighting force members. In past examination
boards, the team has achieved impressive results, with our
women’s team winning first prize for instance.

Self-defense fire-fighting examination board

Disaster drills at overseas sites

The Foster Group appoints a person in charge of BCP for each overseas
site. In addition, overseas sites conduct disaster drills on a regular basis toencourage employee awareness of disaster defense.

Chemical substance treatment practice (Vietnam)

Firefighting training (Vietnam)

Fire drill (China)

Fire drill (South Korea)

Future Plan
The Foster Group plans to implement the jointly hosted business continuity plan (BCP) drill this term by increasing the levelof disaster drills that have been held at each site in Japan and other countries/regions to further strengthen the system.

23

Governance

Information Security and Personal Information
Protection
Policies
The Foster Group recognizes the importance of securing the trust of its customers, suppliers, shareholders, employees,
and other stakeholders based on its corporate creed “Sincerity,” and appropriate management of information assets is
an important part of the management agenda.
To appropriately protect and handle the information assets possessed by the Group, we define the information security
policies as follows:∙ Establishment of an information security management system			∙ Development of internal regulations regarding information security		∙ Implementation of information security measures∙ Provision of information security education∙ Implementation of continuous improvement activities

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

Main Activities and Measures
The Foster Group takes security measures as organizational, human, physical, and technical safety management initiatives
to prevent unauthorized access, damage, leakage, falsification and other accidents involving information assets.
In addition, when the Group outsources all or part of its business, it implements thorough reviews on the appropriatenessof the outsourcing companies, requests them to maintain the same or higher security level as the Group, and works onperiodical reviews of the outsourcing companies and strengthening of the agreements with them.

Future Plan
∙ Enhancement of the infrastructure for information protection and promote implementation on a global basis.
∙ Conduct of risk analyses and plan of concrete preventive measures based on the Business Continuity Plans (BCPs).
∙ Assurance of the awareness on the information security guidelines.
Details on our personal information protection can be viewed at our website (Japanese):■ Personal information protection:
http://www.foster.co.jp/privacy/index.html

24Governance

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

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

CSR Procurement
The Foster Group recognizes that across-the-board CSR procurement along its entire supply chain is essential indeveloping its global materials procurement activities. To this end, we have established the Foster Group Supplier CSR
Code of Conduct, based on our CSR-related regulations and Basic Principles of Procurement. Based on this standard,
we distribute CSR-related questionnaires to our suppliers, and ask that they cooperate with us on our CSR initiatives.
In fiscal 2016, the Company conducted a survey on all procurement sites in Japan, China, Vietnam, Indonesia, andMyanmar. Many of our suppliers considered CSR as a social trend and we received positive replies from 97% of them.
We are now considering the possibility of requesting our suppliers to fill in the “check sheet” to acquire a more detailed
understanding of CSR in the future.
Details on the “Foster Group Supplier CSR Code of Conduct” can be viewed at our website:
http://www.foster-electric.com/procurement/index.html

Response to Conflict Minerals
In recent years, the illegal mining and smuggling of minerals
by armed forces/groups in the Democratic Republic of theCongo and its surrounding countries—and the fact thatthese activities not only provide a source of funding forthese groups, thereby fueling further conflict, but also lead toforced labor, human-rights violations and other issues—has
become a major social problem; and it is being demandedthat companies making use of mineral resources should takeresponsibility for the problem.
The Foster Group has established a Basic Policy on Conflict
Minerals, and conducts investigations into the production
areas and distribution processes used in relation to minerals
in its supply chain. In fiscal 2016, we achieved a 99%
In-house briefing (headquarters)
response rate for investigations into conflict minerals carriedout on a group of 389 suppliers.
Going forward, the Group will continue to conduct detailed investigations as the refinery certification status changes(addition and deletion), and to work actively towards ensuring the responsible procurement of minerals.
Details can be viewed at our website:
http://www.foster-electric.com/procurement/csr.html

25

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

Education
In fiscal 2016, our Company held nine study sessions (basic
and advanced) on CSR procurement and green procurementfor domestic and overseas sites.
For CSR, we held the Global CSR Communication Meetingin Penang, Malaysia to share the opinions and future policies
of CSR procurement among CSR-related personnel. For
green procurement, our Company is fostering humanresources who can acquire the knowledge needed to reduce
environmental risks and conduct procurement operations ina socially responsible way.

Lesson in the Global CSR Communication Meeting 2016

Global Procurement Structure
The Foster Group is promoting the global development of business activities, local procurement, and local production for
local consumption. In doing this, we consider it vital to share a mutual understanding with our suppliers and we therefore
hold procurement, environment, and CSR briefings to promote a strong and healthy relationship with them.

Training across sites by using the TV conference system(headquarters and Vietnam)

Technological exchange with our suppliers headquarters

Social gathering at the procurement briefing 2017 (China)

Conference held at the procurement briefing 2017 (China)

Future Actions (Request to Fill in the CSR Self-Assessment Questionnaire)
We have started requesting our suppliers to check the status of their activities regarding human rights, safety and health,environment, and ethics.
We analyze and evaluate risks on our suppliers based on the self-assessment results and conduct interviews and/or
audits if necessary.

26Society

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

Human Rights Protection

Iwaki Tsugane
Deputy Head of Global Corporate Support Division

Policies
In 2003, we established the “Foster Group Corporate Action Guideline” and the “Foster Group Code of Conduct for
Staff”, which define our respect for human rights in compliance with all laws and regulations, international rules and their
spirits and concepts. We have also requested our business partners in the value chain to show a similar respect forhuman rights.
An outline is provided below.

Respect for Employees’ Humanity
Under our labor-management mutual trust and responsibility, we seek to create safe and work-friendly worksites, aiming
to help our employees enjoy comfortable and affluent lives. We also respect our employees' human rights, personalities,
individuality, and abilities. In addition, we do not support any form of forced labor and child labor.

Respect for Human Rights and Anti-discrimination
Working to maintain healthy worksites at all times, we respect the human rights of each employee and do not conduct
any actions that lead to discrimination.
We do not engage in irrational discrimination based on place of birth, nationality, race, origin, creed, religion, gender, age,disability of various kinds, hobby, academic background, etc.
We do not conduct any actions that might lead to human rights violations such as violence, ridicule, defamation, slander,
forcible working by threat, or bullying.

Sexual Harassment
We do not engage in any act of sexual harassment or any act that could be misconstrued by others as sexual harassment.
We do not engage in any sexual speech or acts that are offensive to another person and prevent other persons fromengaging in such acts.

Protection of Personal Information and Privacy
With respect to personal information and privacy of Foster Group Directors and Staff or for persons outside the Company
that become known to Foster Group Directors and Staff during the course of work, we only use the personal information
for the work and control it strictly. We control it strictly so that it will not be divulged outside the Company.

Worksite Health and Safety
We give priority to the provision of safety and health, endeavor to maintain a safe and healthy workplace environment,
understand the laws and orders concerning work-related safety and health and comply with them. If any work-related
disaster arises under any circumstance, Foster Group Directors and Staff strive to carry out the prescribed procedures

27

Societysuch as the creation of an immediate report in order to minimize and prevent the recurrence of such accident in a reliable
manner.

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

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

Diversity and Inclusion
Policies
The Foster Group seeks to create the systems and environments that maximize the abilities of a diverse workforce,
regardless of personal attributes such as gender, age, nationality, and background. It aims to encourage a vigorous
approach to work, accommodating needs for a diversity of work styles at each life event, such as raising children andproviding nursing care.
Through those activities, we aim to build a “Win-Win relationship” between the company and its employees and createsynergies with the realization of enjoyable personal lives for each employee, the creation of new value, and improvementin the company's creativity and competitiveness.

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

Main Activities, Measures, and Development<Supporting Employees Raising Children and Providing Nursing Care>
To promote a working environment where employees who are raising young children can work at ease, we have improved
our system to support the balance between work and child care. In addition to implementing flex-time for employees withyoung children, we also formally introduced the work-at-home program in March 2017 to support employees who areraising children or providing nursing care.
Going forward, we will expand work options and provide a place for communications among employees who are working
while providing child care or nursing care, so that they can obtain useful information.

<Promoting Women's Active Participation>
By providing female employees with planned cultivation and supporting their career development, we are aiming to havefemale managers represent 30% of all managers by the end of March 2021. We will continue to support the continuous
career development of female employees and establish in-house network events such as communication meetings.

<Our Activities for LGBT (Sexual Minority)>
Currently, the Human Resources and CSR departments are carrying out activities to deepen understanding of LGBT and
increase the number of allies (those who show understanding and support for LGBT people). In the future, we will increase
allies company-wide through activities designed to foster understanding.

28

Society<Global Human Resource Employment>
The Foster Group employs a variety of human resources regardless of their nationalities, and is actively promotinginternational communications in the Group to cultivate human resources and enhance the functionalities.

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

Upgrading and Expanding Our Support for Trainees and Transferred Employees from Overseas Sites
The Foster Electric accepts many trainees and transferred employees from overseas sites at the headquarters every year. In fiscal 2016,
we accepted 12 trainees and transferred employees from Vietnam for periods of 6 to 12 months. In circumstance where many employees
from overseas experience a long stay in Japan for the first time, we have prepared the “Living and working at Foster in Tokyo” guidebook tominimize their concerns about life and work.
This guidebook was prepared mainly at the initiative of Vietnamese employee working at headquarters. This guidebook is written in
Vietnamese and consists of 14 chapters in 43 pages. It covers a wide range of information from the general information required to stay inJapan, including the way to headquarters after arrival, to information required to work at headquarters. With this guidebook, even employees
visiting Japan for the first time can prepare for their stay in Japan with confidence.
The guidebook was completed in March this year and distributed from the Human Resources Department at the Vietnam site to their local
employees. It is already being used as a guide for visiting Japan. We will review the contents on a regular basis to further upgrade andexpand our support for employees from overseas.

Cover page of the “Living andworking at Foster in Tokyo” guidebook

29

Guidebook preparation team

Society

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

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

Main Activities, Measures, and Development<Work-style reforms>
Since September 2016, we have started a trial-run diverse working
style project, such as a flex-time system and individual working
shift system, to promote diversity and realize a work-life balance.
We have also shortened the predefined working hours by 15
minutes a day.
Since March 2017, as phase 2 of the trial-run diverse working styleproject, we have started a trial-run of a new flex-time system andfully introduced a work-at-home program.
In addition, along with the private-public initiative of the Premium
Fridays, which is promoted by the Ministry of Economy, Trade andIndustry, we have set a Premium Friday every month and started
activities to encourage employees to leave at 3:00 p.m. or obtaina paid holiday.

Encouraging employees to go home on Premium Friday(headquarters)<Health Enhancement>
Mental and physical health is essential for employees to feel job satisfaction and work with vigor. We position theenhancement of employees' health as an important management measure and conducted a trial run of the “Health Point
System,” in which we give points and provide health incentives to employees depending on their health check results.
This system gave employees an opportunity to review their health check results, which are often forgotten after they havereceived.
In January 2017, we issued the “Declaration of Healthy Company” sponsored by the Tokyo Promotion Conference of
Heath Company Declaration. Going forward, we will actively promote activities to prevent an increase in the severity oflifestyle diseases, antismoking measures, mental health measures and other activities.

Future Plan
∙ To improve the rate of paid holidays taken∙ To reduce overtime work
∙ To improve the rate of periodic health examinations taken

30

Society

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

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

Risk and Crisis Management
Committee
Health and Safety
Committee

Industrial doctor

Outsourced contractor

Fire controller(self-defense fire-fighting force)

Health supervisor

Organic solvent manager

Health and safety
management organization
at each Group company

Building healthadministrator

Hazardous material
safety supervisor

Chief pressmachine operator

Specially controlledindustrial waste manager

Safe driving administrator

Main Activities
The health and safety initiatives carried out by the Foster Group are separated into initiatives to address Group-wideissues, which are conducted mainly by the Risk and Crisis Management Committee, and initiatives to address sitespecific issues, which are conducted by the health and safety management organization at each site.
We are carrying out initiatives to address the “Group-wide issues” based on the Foster Group Corporate Action Guidelines
and the Foster Group Code of Conduct for Staff.
In the next fiscal year, we will start initiatives to address issues common to the Group by using ISO 45001-Occupational
Health and Safety, which will be established as part of the mid-term plan.
The Foster Group implemented safety inspections of the inspection facilities as an issue common to the Group for
preventive maintenance.
The headquarters has developed and promoted the implementation plan of the policy of the Health and Safety Committee,“Prepare for Disasters,” as an initiative to address site-specific issues.
Particularly in response to the revision of the Industrial Safety and Health Act, we launched the chemical substance risk

31

Societyassessment project in 2015 and have worked to reduce the risks of chemical substances. We will enhance initiatives formental health care this year, aiming to create a mentally and physically healthy working environment for our employees
through a stress check system.
In addition, our Health and Safety Committee implemented the 5S inspection at headquarters in cooperation with senior
management and industrial doctors to raise employees' safety awareness in offices, an area that tends to receive less attention.

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

Our Activities at Overseas Sites
We have allocated a health and safety person in charge at each site. Each site holds lectures on health and safety (such as
handling of chemical substances) on a regular basis to promote activities for raising employee awareness of health and safety.

Lecture on handling of chemical substances (Vietnam)

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

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

32

Society

Main Activities, Measures, and Development∙ To promote philosophy-focused management (Way Management), enhance the power of human resources andorganization, and transform the organization, the Foster Group developed the action guidelines by redefining “the ideal
company.” We summarized those into the “Foster Rhythm Guidebook” and “Foster Rhythm Card” and distributed themto our employees across the world. We will also continue to expand awareness raising activities in the future.
∙ We are working to promote diversity and foster and enhance the global mind of our employees by regularly conducting“Inter-Cultural Communication Training” at various levels.
∙ To ensure that effective human resource development continues globally, we have introduced the online-based “Learning
Management System” and the “Talent Management System” for skills management and the planned development of
successors.
∙ To promote localization of overseas site management, we have also actively worked on the nurture of the local managing
staff at each site. Specifically, we ran the Global Leader’s Training and facilitated human resources exchange by theOverseas Trainee Program and the international employee reassignment within Group companies, etc. to develop
human resources globally.

Future Plan
∙ Further instilling our corporate philosophies (understand -> empathize -> perform)∙ Promotion of use of the Learning Management System and expansion of its contents∙ Full-scale use of the Talent Management System and enhancement of the talent management∙ Establishment of global human resource utilization base and development of global leaders

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

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

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

33

Society

Future Plan
∙ We provide our products equally in the fields of cars, entertainment, and communications and deliver happiness topeople around the world through our sounds.
∙ As new markets for cars, entertainments, and communications are growing at an accelerated pace and surrounding
fields are getting involved accordingly, the markets are being integrated into a comprehensive living field. Under thesecircumstances, we provide new products that meet changing needs and deliver greater satisfaction to people aroundthe world.

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

Activity Promotion Structure
We always listen to our customers’ voices and seek what product they need now to offer products our customers canuse with satisfaction and peace of mind. Based on these activities, we have established a project promotion structure
across our sales and technical units. In addition to the domestic market, we also identify needs in each country and region
around the world and strive to develop products specific to each region.

Main Activities
As domestic activities, we share information with the dealers who are constantly in contact with our customers andalso make efforts to listen to as many customers’ voices as possible at exhibitions and trial listening events. In overseas
markets, we aim to identify the needs of customers from overseas countries/regions through cooperation with ourcontracted sales agencies.

Future Plan
We will continue to supply our trusted original brand, FOSTEX brand products, to introduce our high technical competences
and the high competitiveness of our products. In addition, we will continue to develop products (mainly speaker units,
speaker systems, and head phones) that can deliver greater listening pleasure to our customers through the sound.

ETC audio guidancee-Call audio guidance

Various types of warning sounds/
turn signal sounds
Approximation notification sounds

ECU warning sounds

Opening/closing door warning sounds

Alarm buzzer and speaker products for
accident prevention
Our products are incorporated in a variety of devices to issue alarmsounds and audio guidance for human safety.
In automobiles, our products are used to issue alarm sounds for the ADAS
(Advanced Driver Assistance System) function supports (automaticbraking, crash prevention, lane keeping assist, etc.), warning sounds
when a slide door is opened/closed, and approximation notification
sounds of HV and EV vehicles.
■ Product lineup:
http://www.foster-electric.com/products/index.html

34

Society

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

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

FOSTER TQM

Continuous Improvement (activity)(Total Quality Management)

Creationof System

Contract check

Quality and Environmental Policy
TQM Regulations/Quality
Management Manual
Quality system-related rules
and/or regulations

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

Product creation
Quality creation
Quality to beaccomplished by the
Humanacross-the-board
Technology
Resources
efforts of thecreation
Development
employees
Product development technology
Environmental and safety-related
technologies
Production technology

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

Quality certification

Development of
human resources

Mass-production, product inspection, shipment
Customers, markets

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

FOSTER TQM and Quality Management System (QMS)*▲ As for the quality management system of the Company, quality assurance and management activities have been developed under its
customer-focused philosophy on quality since the Company’s foundation.

▲ In 1975, we formulated the Total Quality Control (TQC) Regulations in accordance with the philosophy of FOSTER Total Quality Control (TQC).
In May 2006, the TQC Regulations were upgraded as the Total Quality Management (TQM) Regulations.

▲ Since 1998, all the Group companies have successfully acquired the certification of the quality assurance (system) standards (including theISO9001: 1994).

▲ In 2004, all the Group companies successfully acquired the certification of the ISO/TS 16949, a quality standard based on the ISO9001:
2000, which has continued to be renewed to date.
* QMS: Quality Management System

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

35

The Group guarantees product quality in allof the products it supplies worldwide throughits Global Quality Assurance Structure

Society

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

Main Events Held Last Fiscal Year
■ Holding the quality lecture presentation
The quality lecture presentation was held by inviting outside lecturers. More than 100 employees attended thisevent, which led to an improvement in their quality awareness.

Quality lecture presentation (headquarters)■ Encouraging our employees to participate in quality-related forums■ Asking for a quality slogan
We asked for a quality slogan for each division during the period. They were compiled in a booklet, which is carried withall employees at all times.

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

QC Circle Convention (headquarters)

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

36

Environment

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

Environmental Philosophy
and Policy

Ryoji Otowa
Executive Officer and Head of Quality Assurance Division

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

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

37

Environment

Environmental Management Structure
We have established an environment management system at headquarters and overseas manufacturing sites andembody the Foster Group’s environment philosophies and mid-term environment policies.
At headquarters, we monitor the activities conducted at each site and check their results.

Activities to Reduce the Environmental Burden (headquarters building)Headquarters moved to a new company building in November 2012 and was reborn as an eco-friendly office building
using multifarious technologies to reduce its environmental burden. These technologies include “lighting control using
daytime sunlight,” which effectively brings daytime sunlight into the office, and removing the need for lighting; the “humanbody sensor light control,” which turns lights on and off by sensing people’s movements; “air conditioning using outsideair,” which brings in natural air to optimize the efficiency of air conditioning; an ice thermal storage air conditioning system,*
which enabled a peak cut in the daytime use of electricity; and a double-skin facade, that maximizes heating efficiency.
Adopting all these technologies, the efficiency of electricity use has been maximized. In addition, thorough temperature
control through the Cool Biz and Warm Biz campaigns further helped control of electricity use, and contributed significantly
to reductions per unit of revenue.
* A system to use the air conditioner during the daytime that cold air is made from the ice produced during the nighttime.

Daytime sunlight brought from the top of the staircase(ceiling at 4th floor of the Headquarters building)Management of Chemical Substances
The Group has set forth its autonomous management standard, in which applicable laws, regulations and customers’
requests are reflected, for handling environmentally hazardous substances contained in its products to minimize theirimpact on the environment. We eliminate any controlled substances from our products via eco-friendly procurement andmanagement of necessary parts and/or materials purchased.
Based on the aforementioned scheme, we have established an optimum management system for the efficient search andcollection of information about chemical substances that are contained in parts and materials and precise communicationof information necessary in the supply chain. We have taken all possible measures to ensure that we do not miss to copewith annually added chemical substances that need to be monitored in accordance with the EU’s RoHS2.0 Directive andthe REACH regulations implemented in 2013. In addition, to ensure communications of related information, we provide
our suppliers with briefing meetings every year primarily at our overseas sites. In fiscal 2017, we monitor 41 substances
as controlled substances and banned heavy metals such as lead, cadmium, mercury and hexavalent chromium together
with other highly harmful substances from use so that our products are completely free of these substances.
In compliance with the trend of legal regulations and/or customers’ requests, some of our products are manufactured
without some chemical substances, such as certain phthalate esters which are used as plasticizing agents (referred to as
certain phthalate ester-free manufacture).

38

Environment

Environment Management System based on ISO14001
Since 2000, when head office was certified ISO14001, all manufacturing sites worldwide have obtained the ISO14001
certification and are making continuous improvements.
In fiscal 2017, HEAD OFFICE of Foster Electric (1-1-109, Tsutsujigaoka, Akishima City, Tokyo, Japan) and the Miyazawa
office of the Fostex Company (512, Miyazawa-cho Akishima City, Tokyo, Japan), as registered organizations and addresses,
switched to ISO14001: 2015. Our manufacturing sites overseas are also sequentially switching to Version 2015.
In addition, we present the ISO14001 certification upon the request of stakeholders.

Environmental Education
The Foster Group is continuing its environment management activities,
based on the belief that such activities are vital to survive as a centennialcompany. To accompany the switch to the ISO14001: 2015, we provided
training on the key points of this revision to our management and all
employees working at headquarters to improve our activities.

Training on ISO14001: 2015 (headquarters)

Our manufacturing sites across the world are
implementing emergency practices on site.

Winning the award of “Excellence inEnvironmental Empowerment Award 2016”

Practice against leakage at China factory (Nanning)

We won the Encouragement Award at the
Excellence in Environmental Empowerment
Award 2016, an initiative hosted by the Ministryof the Environment and the Environmental
Consortium for Leadership Development(EcoLeaD) to honor companies that aredeveloping superior environmental leaders. To
respond to demands in the environment field,
which is expanding with globalization, we are
Commendation certificate at the “Excellence in
actively developing environmental leaders who
Environmental Empowerment Award 2016”
will work globally.
■ Examination results of the “Excellence in Environmental Empowerment Award 2016”:
http://www.env.go.jp/press/103892.html (Japanese)■ Projects won at the “Excellence in Environmental Empowerment Award 2016”:
http://www.eco-lead.jp/commendation/history/winner2016/ (Japanese)■ Our projects that won awards:
http://www.eco-lead.jp/award/2016/practices/2016_foster.pdf (Japanese)

Encouragement Award ceremony

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

39

Recycled materials being carried out (headquarters)

Environment

Mini-clean Activities
As part of our CSR activities, we conduct “mini-clean” activities, cleaning the footpaths and sidewalks around ourheadquarters, and develop an annual plan, which is to be implemented every month. We also participate in the Akishima
Cleanup movement, and are powerfully working towards the beautification of our local area.

“Mini-clean” activities in which all our divisions participate in turn (headquarters)

Iwaizumi (Carbon Offsetting Activities)
Aiming to become a company trusted by the local community, we are providing
support for global environmental preservation activities through Akishima-shi
environment consideration enterprise network. We are also taking part in theArbor Day for Future and other activities run by Akishima City and the townof Iwaizumi (in Iwate Prefecture, closed the friendship city agreement with
Akishima City) as part of our carbon offset initiatives.

Participating in the carbon offsetting activity (at Iwaizumi in Iwate Prefecture)

Environmental Activities at Overseas Sites
Our Vietnam factory was commended for the “Binh Duong Green Book
2016” by the Department of Natural Resources and Environment of Binh
Duong Province as an environmentally friendly company.

At the awarding ceremony (Vietnam)

As one of their environmental activities, the China factory (Panyu) has added the carbon filter to the exhaust equipment
to exhaust cleaner air.

Carbon filter being installed to the outdoor exhaust equipment (China)

40

Environment

Environmentally Friendly Products
The Foster Group designs and develops products by taking into account all aspects of product life-cycles; from theprocurement of raw materials to the manufacturing, use, disposal and recycling of its products. We strive to develop andprovide products with the least possible environmental burden, such as through the manufacture of eco-friendly productsthat minimize the use of harmful chemical substances, and the creation of lightweight products engineered to reduce
CO2 emissions.

Lightweight speaker for in-vehicle use, eco-friendly speakers● We developed a lightweight speaker, optimum for next-generation eco-friendly vehicles such as electric vehicles (EVs).
We reduced the weight of the speaker significantly to 140 grams for a speaker with a diameter of 17 centimeters while
minimizing the suppression of its sound pressure level, a fundamental performance feature for speakers. Its advanced
design has taken into account the need to reduce overall CO2 emissions from vehicles.
● Frame is made of a specific polypropylene (PP) material and succeeded in reducing the frame weight while maintaining
practical strength through profile optimization.
● We have employed adhesives that do not contain harmful solvents and put them to practical use with the aim of
reducing the volume of VOC remaining inside the passenger cabin of vehicles. We are taking steps to eliminate
solvents in new models.
● The diaphragms and the center caps, made out of recyclable paper with the high waterproofing of speakers requiredfor in-vehicle use.
● As one aspect of our environmental activities, we have developed and found practical application for speakers that
reduce the use of solder. We will disseminate this activity to all Group companies and expand in mass production.

Lightweight speaker for in-vehicle use

Headphones and headsets
For headphones and headsets, we have been active in incorporating environmental considerations in our product and/or process design. For reducing the substances in our products that burdens the environment, we address the most upto-date information regarding country-specific legal requirements and the RoHS2 to promote proposals to our customers
and dissemination to all the Group companies. We have reduced energy consumption in manufacturing and the volumeof raw materials that would be disposed as wastes. We also have been keen on measures to minimize the volume ofwaste materials, reuse raw materials by introducing new equipment and developing products using natural materials
as well as addressing the manufacturing of more eco-friendly products with less use of adhesives and developing a
manufacturing method using less solder.
Measure for solderless production
By applying resistance welding forheadphone frame terminals, we achieved
eco-friendly welding without using solder.
Environmentally friendly headphone andheadset41

Environment

In-vehicle speakers that support reflow soldering SAE-20D-30
These products not only achieve reductions in the mounting time required on the customer side when fitting the speakers
by automatic mounting machine, they also enable reductions in the amounts of solder used and waste flux produced,
through the use of paste solder during mounting.
Moreover, connections inside the product are achieved without the use of solder, using heat and pressure joining
techniques.
In addition, acoustic-structure design is no longer required because a three dimensional sound emitting hole (duct) isadded on the back of the speakers to separate the sounds from the front and back of the speakers (patent pending).
Despite their high acoustic pressure of 800 Hz approximately 91 dB/10 cm, the speakers are lightweight at 3 g, also
contributing to weight reduction in our customer’s products.
It employs 100% Sn-plated phosphor bronze (composed of copper, tin and phosphorus) in their solder-attachment
contacts. Residual materials cut out during component processing are all recycled and reused during repeat phosphor
bronze fabrication processing.
■ SAE-20D-30 product information:
http://www.foster-electric.com/products/micro-acoustic-transducers/sae-20.html

Compact personal amplifier AP20d
A low power consumption power amplifier that employs a class-D digital amplifier.
This product is equipped with the auto standby function that automatically reduces power consumption after input signals
have been at a certain level or lower for a certain period of time, and allows users to turn ON/OFF the auto standby
function and set the time before this function is enabled.
■ AP20 d product information:
http://www.fostex.jp/products/ap20d/ (Japanese)42Corporate Profile and Financial Information

Group
Companies

The Group operates 41 bases in 15 countries and regions worldwide as bases fordevelopment, manufacturing and sales bases.
We have established a sophisticated production system integrating processes fromcomponents manufacturing to finished goods manufacturing.

EUROPE

3

JAPAN

9

bases

Group
Companies

The Group operates 41 bases in 15 countries and regions worldwide as bases for
AMERICAS
development, manufacturing and sales bases.
ASIA (excluding Japan)
We have established a sophisticated production system integrating processes frombases
components manufacturing tobases
finished goods manufacturing.
JAPAN
Sales/Development Bases

9

bases

ASIA (Excluding Japan)

JAPAN

FOSTER ELECTRIC CO., (HONG KONG) LTD.
Company Information

FOSTER ELECTRIC CO., LTD.
(HEADQUARTERS)KANSAI SALES OFFICE

Company Name

FOSTEX COMPANY

Sales Bases

Manufacturing Bases

OthersAMERICAS

bases

Stock Information

FOSTER ELECTRIC (VIETNAM) CO., LTD.

FOSTER ELECTRIC (U.S.A.), INC.
DETROIT OFFICEGUANGZHOU PANYU JIU SHUI KENG
FOSTER ELECTRIC FACTORY *Outsourcee

FOSTER ELECTRIC (DA NANG) CO., LTD.

FOSTER ELECTRIC CO., (GUANGZHOU) LTD.

TotalELECTRIC
number of sharesauthorized
be LTD.
FOSTER(BAC
NINH) toCO.,

Company Profile (As of March 31, 2017)

IGA WAREHOUSE

8

21

EUROPE

3bases

PASO OPERATIONSFOSTER
ELECTRICof(QUANG
NGAI)(AsCO.,ofLTD.
StatusSharesMarch 31,EL
2017)

Foster Electric Company, Limited

FOSTER ELECTRIC CO., (NANNING) LTD.

LOS ANGELESOFFICEcompanies 2.3%
Securities

issued by the Company:

Domestic
SAN JOSE OFFICE
Treasury
corporations, etc.
stock
FOSTER MICRO ACOUSTIC COMPANY
80,000,000 shares
FOSTER ELECTRIC CO., (HEYUAN) LTD.
BOSTON OFFICE
ESTec CORPORATION¥6,770,360,135
4.7%
4.5%
FOSTER Common
TRANSPORTATIONS
CO.,LTD. Stock
Stock LTD.
Listed on theFOSTER
FirstELECTRIC
Sectionof(TAIWAN)
the Tokyo
Individuals
number ofsharesCO., LTD.
ThomasKL Indústriade Alto Falantes S.A.
ESTecTotal
ELECTRONICS(JIAXING)
Distributionofand others
Foreign entities,
Exchange
FOSTER ELECTRONICS LTD.
FOSTER ELECTRIC (SINGAPORE) PTE. LTD.
issued:etc.
ShareholdersCORPORATION
by
13.6%
ESTec AMERICA
ESTec
VINA CO., LTD.
AMERICAS
1-1-109, Tsutsujigaoka, Akishima City, Tokyo, 19633.4%
26,931,051 shares
Shareholder TypeFOSTER FINANCE CO., LTD.
PENANG OFFICE
ESTec PHU THO CO., LTD.
8550, Japan(excluding Japan)
ASIA
Headquarters
ESTec JAPAN CORPORATION Phone: +81-42-546-2311(switchboard)
PT FOSTER ELECTRIC
INDONESIAof shareholders:bases
ESTecNumber
ELECTRONICS(M) SDN. BHD. Financial
EUROPE
FAX: +81-42-546-2317
institutions
6,006
FOSTER ELECTRIC IPO (THAILAND) LTD.
bases ESTec CORPORATION (CAMBODIA) LTD.
FOSTER ELECTRIC (EUROPE) GmbH
41.5%
476 (Total of group companies: 49,194);
Number of
MUNICH OFFICE
To t a l n u m b e r FOSTERi n c l u dELECTRIC
e s t h e (THILAWA)e m p l o yCO.,e e sLTD.
of ourJune 20, 1949

Founded8

21

employees

outsourcee in Panyu, China.

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

URL

Major Shareholders

Sales/Development Bases

Company
Directors andInformation
Statutory Auditors (As of June 22, 2017)
Senior Officer
Hiromi Yoshizawa
Terushige Nagasawa
Senior Officer
Atsushi Narikawa
Takuro Yamaguchi
Company
Name Kazuhiro
FosterKishi
Electric Company,
Managing Director
SeniorLimited
Officer
Masatoshi Kohama
FoundedManaging Director LuJune
Officer
San Tie20, 1949
Yoichi Takahashi¥6,770,360,135
Director
Officer
Hidetoshi
Shirakawa
Tatsuhito Tanaka
CommonStock
ListedontheFirst
SectionoftheTokyo Stock
Director*1
Officer
MinoruMatsumotoRyoji Otowa
Exchange*1
Director
Officer
ChiekoMatsudaTsutsujigaoka,
Yasuhide
Takahara
1-1-109,
Akishima City,
Tokyo,
196Standing Statutory Auditor Tsutomu
Officer
Naoki Kanai
8550,Inokuma
Japan
Headquarters*2
Phone:+81-42-546-2311(switchboard)
Statutory Auditor
Officer
Takuma Ino
Yuji Harada
FAX: +81-42-546-2317
Statutory Auditor*2 Takashi Suzuki
Officer
Roy Ching-Sheng Chen
476 (Total of group companies: 49,194);*2
Numberof
Statutory Auditor
Officer
Yasuhiro
Goto
To t a l n u m b e r i n c l u d e s t h e e m pOh
l o In-Yongyees of our
President and Representative Director

Company Profile (As of March 31, 2017)

Senior Managing Director

employees

outsourcee in Panyu, China.

URL*1 Minoru Matsumoto http://www.foster-electric.com/
and Chieko Matsuda are Outside Directors.
*2 Takuma Ino, Takashi Suzuki and Yasuhiro Goto are Outside Corporate Auditors.

Directors and Statutory Auditors (As of June 22, 2017)
Information for Shareholders

Senior Officer
Hiromi Yoshizawa
Terushige Nagasawa
FiscalFrom Narikawa
April 1 to March 31
of eachyear
SeniorYear
Managing Director Atsushi
SeniorOfficer
Takuro Yamaguchi
Ordinary
GeneralManaging Director Kazuhiro
Senior Officer
June ofKishi
each year
Masatoshi Kohama
Meeting of Shareholders
Managing Director Lu
Officer
San Tie General Meeting
Takahashi
Ordinaryof Shareholders:Yoichi
March
31
RecorddateYear-end
dividends: March
31
Director
Officer
Hidetoshi
Shirakawa
Tatsuhito Tanaka
Interim dividends: September 30*1
Director
Officer
Minoru Matsumoto
Ryoji Otowa
Number of Unit (“tangen”)
Shares100
Director*1
Officer
ChiekoMatsudaYasuhide Takahara
Stock Transfer Agency Department, Head Office of Mizuho
Transfer
AgentStanding
Statutory Auditor Tsutomu
Officer
Naoki Kanai
Trust &Inokuma
Banking Co., Ltd.
Transfer Agent Branch
1-2-1,Ino
Yaesu, Chuo-ku, Officer
Tokyo
Statutory Auditor*2 Takuma
Yuji Harada
Nihon Keizai Shimbun (daily newspaper) issued in the
Statutory
OfficerMedia
for Public Auditor
Notice *2 Takashi Suzuki
Roy Ching-Sheng Chen
Metropolis of Tokyo
Statutory Auditor*2 Yasuhiro Goto
Officer
Oh In-Yong
President and Representative Director*1 Minoru Matsumoto and Chieko Matsuda are Outside Directors.
*2 Takuma Ino, Takashi Suzuki and Yasuhiro Goto are Outside Corporate Auditors.
010_0727302982906.indd

SWEDENBases
OFFICE
Number of
Ratio of
Sales Bases
Manufacturing
OthersShares Held Shares Held
Shareholder’s Name
(Thousand)(%)

Japan Trustee Services Bank, Ltd. (trust account)
Stock
Information

2,833

11.01

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

1,680

6.53

StatusBank,of Shares(As of March 31, 2017)
Mizuho
Ltd.

1,016

3.95

Total number of shares authorized to be

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

issued by the Company:

Domestic

corporations,etc. account 9)
Japan Trustee shares
Services Bank,
Ltd. (trust
80,000,000

4.7%

Securities companies 2.3%

945

3.67

764

Treasury
stock
2.96
4.5%

Individuals
GOVERNMENTOF NORWAY
Total
number of shares

2.71
Distribution of 699
and others
Foreign entities,
Shareholders by 693
13.6%S.A. 380578
J.P. Morgan Bank Luxembourg
2.69 etc.
33.4%
26,931,051 shares
Shareholder TypeDFA INTL SMALL CAP VALUE PORTFOLIO
599
2.32

issued:Number of shareholders:

Financial

STATE STREET BANK AND TRUSTOMNIBUS ACCOUNT OM25
institutions
6,006

457

1.77

SHOWA AIRCRAFT INDUSTRY CO., LTD.

446

1.73

41.5%

Major Shareholders

Treasury stock (1,201,261 shares) is excluded for the calculation of the “Ratio of
Number of
Ratio of
Shares Held.”
Shares Held Shares Held
Shareholder’s Name
(Thousand)(%)

Japan Trustee Services Bank, Ltd. (trust account)

2,833

11.01

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

1,680

6.53

1,016

3.95

MizuhoBank, Ltd.
Inquiries
for Handlingof Stocks

Shareholders
have an
The Bankwhoof Tokyo-Mitsubishi
UFJ,
Ltd. company with which
945 you have
3.67a
The
securities
account at a securities
business connection
company
Japan Trustee Services Bank, Ltd. (trust account 9)764
2.96
Shareholders who have a special accountStock Transfer Agency Department, Mizuho Trust &GOVERNMENT
699
2.71*Shareholders
are not allowed to OF
make NORWAY
any
Banking Co., Ltd.
stock transactions other than the purchase2-8-4, Izumi, Suginami-ku, Tokyo, 168-8507, Japan
J.P.
MorganBank
Luxembourg
S.A.
380578693
2.69
of shares less than one unit (“tangen”).
Tel: 0120-288-324 (toll-free telephone service in Japan)
Head office and branches nationwide of Mizuho
DFA INTLSMALL
CAP VALUEPORTFOLIO
599
2.32
Paymentof unpaid
dividends
Trust & Banking Co., Ltd., and Mizuho Bank, Ltd.

STATE STREET BANK AND TRUST OMNIBUS ACCOUNT OM25

457

1.77

SHOWA AIRCRAFT INDUSTRY CO., LTD.

446

1.73

Treasury stock (1,201,261 shares) is excluded for the calculation of the “Ratio of
Shares Held.”1

2017/06/29

Information for Shareholders

43

Fiscal Year
Ordinary General
Meeting of Shareholders

From April 1 to March 31 of each year
June of each year
Ordinary General Meeting of Shareholders: March 31

Inquiries for Handling of Stocks
Shareholders who have an
account at a securities
company

The securities company with which you have abusiness connection

20:33:10

Corporate Profile and Financial Information

Consolidated Financial Information
Consolidated Financial Highlights(Millions of yen)

81st Fiscal Year

82nd Fiscal Year

(Fiscal Year ended March 31, 2015)

Interim Period

Net sales

87,481

Operating income (loss)
Ordinary income
Net income (loss) attributable to owners of the parent

Full Year

83rd Fiscal Year

(Fiscal Year ended March 31, 2016)

Interim Period

Full Year(Fiscal Year ended March 31, 2017)

Interim Period

Full Year

189,124

96,641

190,928

68,342160,896

3,852

9,747

5,524

10,351

182

2,963

4,342

10,398

5,927

10,847

28

3,017

2,285

4,858

4,406

6,833

227

1,088

Net income (loss) per share (Yen)

97.95

206.18164.71

255.44

8.51

41.16

Net Assets

52,05664,944

68,41567,01760,91363,901

Total Assets

107,264

104,843

107,099

98,73597,557

102,409

Net assets per share (Yen)2,089.51

2,279.32

2,404.39

2,350.26

2,138.03

2,316.09

45.4

58.2

60.1

63.7

58.6

58.2

Equity ratio (%)

Note: All amounts less than 1 million yen are truncated.

Consolidated Financial Statements (Summary)(Millions of yen)

Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Cash Flows

83rd Fiscal Year 82nd Fiscal Year

83rd Fiscal Year 82nd Fiscal Year

83rd Fiscal Year 82nd Fiscal YearAs of March 31, 2017

As of March 31, 2016

69,31533,094102,40969,95928,77598,73529,3909,116
38,507

29,111
2,605
31,717

From April 1, 2016 to
March 31, 2017

From April 1, 2015 toMarch 31, 2016

Gross profit

160,896
143,527
17,369190,928
163,876
27,052

Selling, general andadministrative expenses

14,405

16,701

Operating income

Net income

2,963
750
696
3,017
736
354
3,399
1,818
1,581

10,351
1,072
576
10,847
719
1,578
9,989
2,610
7,378

Net income attributableto owners of the parent

1,088

6,833

Net sales

AssetsCurrent assets
Non-current assets
Total assets
Liabilities
Current liabilities
Long-term liabilities
Total liabilities
Net assets

Cost of sales

Non-operating income
Non-operating expenses
Ordinary income
Extraordinary income

Shareholders’ equity

58,972

60,954Extraordinary losses
Income before income taxes

Accumulated othercomprehensive income

620

1,924

Non-controlling interests

4,309
63,901
102,409

4,138
67,017
98,735

Total net assets
Total liabilities and net assets

Total income taxes

From April 1, 2016 to
March 31, 2017

From April 1, 2015 toMarch 31, 2016

Operating activities

4,372

24,057

Investing activities

11,0893,946

Financing activities

1,690

6,676

Effect of exchange
rate changes on cash
and cash equivalents

795

1,499

Net increase(decrease) in cash andcash equivalents

5,820

11,934

Cash and cash
equivalents, beginningof period

17,858

5,924

Cash and cash
equivalents, end of
period12,037

17,858

Note: All amounts less than 1 million yen are truncated.

Overview by Segment (Consolidation)
Information & Communication
Components and Products
45.9 %
Segment
Net sales:¥73,815 million

Revenue declined as headset
sales shrank due to lower-than-expected sales of major
customers’ smartphones, inaddition to the transition period
to new models.

Other Segment
Net sales:¥5,762 million

Net sales of thissegment, including micro acoustic
components and“FOSTEX” brandproducts, wereflat year-over-year.

010_0727302982906.indd

4

FOSTEX
products

Automotive Components andProducts Segment(A 24.6% year-overyear decrease)

Headsets

3.6 %(A 6.6% year-overyear decrease)

Micro acoustic
components

Net sales:

83rd Fiscal YearNet sales¥160,896 million

38.7 %¥62,288 million

Despite strong sales of automotive speakers and speaker systems buoyed by demand in the
North American market, revenue
declined due to the strong yen.

Automotive speakers

Acoustic Components andProducts Segment
Net sales:¥19,029 million

Although sales volumes of flat TV
speakers and speaker systems,
audio speakers and headphones
were generally in line with ourplan, revenue fell due to the effects of a strong yen.

(A 4.2% year-overyear decrease)11.8 %(A 12.5% year-overyear decrease)

TV speakers

2017/06/29

20:33:15

44

Corporate History

45

Corporate History

46

Data Table All Foster Groups
 FOSTER ELECTRIC CO., LTD. (Headquarters) Domestic Companies: FOSTER ELECTRIC CO., LTD. (Headquarters),
		 FOSTER TRANSPORTATIONS LTD.,
		 FOSTER ELECTRONICS LTD.
 All Manufacturing Sites
 All Procurement Sites
No mark Indicated locations only

Economic data
G4-EC9Proportion of spending on local suppliers at significant locations
TargetDescription

Rate (%)

All procuring sites in Vietnam

Local procurement ratio of materials at overseas manufacturing sites (Vietnam). *1

33

All procuring sites in Singapore and Indonesia

Local procurement ratio of materials at overseas manufacturing sites (Singapore andIndonesia). *2

28

All procuring sites in China

Local procurement ratio of materials at overseas manufacturing sites (China). *3

79*1 Index showing the amount of transaction with ASEAN corporations out of all the procurement transactions.
*2 Index showing the amount of transaction with ASEAN corporations out of all the procurement transactions.
*3 Index showing the amount of transaction with China corporations out of all the procurement transactions.

Social data
 G4-LA1

New employee hires/employee turnover
Number of new employee hires

Number of employee turnoverFemaleFemaleAverage

Company nameJapan

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

Overseas

All overseas companies

Male

Total

Male

age

Total

9

21

30

6

32

38

44

33,987

3,999

37,98636,927

3,736

40,66330● G4-LA3

Childcare leave

Company name

Total number of employees
entitled
FemaleJapan

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

Overseas

All overseas companies

Male

Total number of employees who
took the leave

Total

Female

Male

Total

6

2

8

6

2

8

4,120

347

4,467

4,082

337

4,419

3,062

340

3,402

Rate (%)

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

100

Overseas

All overseas companies

100 G4-LA6

Industrial accidents

47

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

Overseas

All overseas companies

Total

27

Japan

Japan

Male

21

Percentage of total workforce represented in formal joint management-worker health and safety committees

Company nameFemale6

 G4-LA5

Company name

Total number of employees
retained

Numberof injuries

Numberof absentdays

numberoffatalities

Frequency
rate

Severity
rate

2

42

0

1.437

0.030

195

1,658

0

1.256

0.011

Data Table G4-LA8

Percentage of health and safety topics covered in formal agreements with trade unions
Company name

Asia

Rate (%)

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

FOSTER ELECTRIC CO., (NANNING) LTD.

-

FOSTER ELECTRIC CO., (HEYUAN）LTD.

-PT FOSTER ELECTRIC INDONESIA

16

FOSTER ELECTRIC (THILAWA) CO., LTD.

-

FOSTER ELECTRIC (VIETNAM) CO., LTD.

6

FOSTER ELECTRIC (DA NANG) CO., LTD.

6

FOSTER ELECTRIC (QUANG NGAI) CO., LTD.

6

FOSTER ELECTRIC (BAC NINH) CO., LTD.

6

ESTec CORPORATION

9

Health and safety topics covered in Collective agreements with trade unions.

 G4-LA9

Training hours (training hours per employee)
Company name

Average hours

Japan

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

20 h 10 minutes

Overseas

All overseas companies

11 h 42 minutes

 G4-LA11

Percentage of employees receiving regular performance and career development reviews
Rate (%)
Company name

Femal

Male

Total

Japan

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

100

100

100

Overseas

All overseas companies

20

51

23

 G4-LA12
Age group

Rate (%)
Company nameLessthan 30year old

30-50
year old

Over 50
year oldJapan

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

13

51

36

Overseas

All overseas companies

54

46

0

 G4-LA13

Ratio of basic salary and remuneration of women to men
Company nameJapan

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

Rate (%)

100

 G4-LA14/G4-HR10/G4-SO9
Supplier Screening

Company nameDomestic
and overseas
companies

All procuring sites

Rate (%)

97

Percentage of suppliers who have procurement contract with Foster Groups and agreed to “Foster Group Supplier CSR Code of Conduct” by the end of December, 2016.

48

Data Table G4-50/G4-LA16

Number of grievances about labor practices filed, addressed, and resolved through formal grievance mechanisms.
Company nameJapan

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

Number0

 G4-50/G4-HR2

Human rights trainings
Rate (%)
Company nameFemale

Male

Japan

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

4

21

Overseas

All overseas companies

8977

 G4-HR7

Human rights trainings for security personnel
Security personnel (Internal)
Company nameJapan

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

Overseas

All overseas companies

Numberofemployees

Numberofstudents

0

0

319

318

Security personnel (Outsourcing)Numberofemployees

Numberofstudents

0

3

3

100

93

265

263

99

(%)

 G4-HR11

Impact assessment on human rights
Company name

Overseas

All overseas companies

Ratio (%)

99

Collection ratio of supplier questionnaire for conflict mineral due diligence activities.

 G4-50/G4-HR12

Numer of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanisms
Company nameJapan

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

Number8

 G4-50/G4-SO11

Number of grievances about impacts on society filed, addressed, and resolved through formal grievance mechanisms
Company name

Japan

49

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

Number2(%)

Data Table

Environmental data
G4-EN3Engergy consumption
Company Name

Japan

ASIA

North America

Purchased
Electricity(MWh)Gasoline(liter)

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

Natural Gas(m3)

City Gas(m3)

FOSTER ELECTRIC CO., LTD. (Headquarters)

2,078

12,650000012,656GUANGZHOU PANYU JIU SHUI KENG FOSTER
ELECTRIC FACTORY (*outsourcee)

48,406

93,56322,0710088,8530

FOSTER ELECTRIC CO., (NANNING) LTD.

13,74572,736

16,54500

0

0

FOSTER ELECTRIC CO., (HEYUAN) LTD.

18,93055,817

26,7170

078,9370

FOSTER ELECTRIC (VIETNAM) CO., LTD.

27,90733,0471,520

0150,16100

FOSTER ELECTRIC (DA NANG) CO., LTD.

10,267

22,8364,708

059,2700

0

FOSTER ELECTRIC (QUANG NGAI) CO., LTD.

3,863

4,194

0

0

29,7160

0

FOSTER ELECTRIC (BAC NINH) CO., LTD.

16,99636,3777,204

044,8260

0

PT FOSTER ELECTRIC INDONESIA

7,601

4,860

13,748240

24,1920

0

FOSTER ELECTRIC (THILAWA) CO., LTD.

2,184

10,144

22,15200

0

0

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

468

1,330

0

0

0

0

52,770152,444

347,554

114,665240

308,164

167,790

65,426Total

G4-EN8Water comsumption
Company Name

Japan

Asia

North America

Water
Consumption(Unit: m3)

FOSTER ELECTRIC CO., LTD. (Headquarters)

10,656GUANGZHOU PANYU JIU SHUI KENG FOSTER
ELECTRIC FACTORY (*outsourcee)

823,259

FOSTER ELECTRIC CO., (NANNING) LTD.

144,350

FOSTER ELECTRIC CO., (HEYUAN) LTD.

342,177

FOSTER ELECTRIC (VIETNAM) CO., LTD.

378,002

FOSTER ELECTRIC (DA NANG) CO., LTD.

115,391

FOSTER ELECTRIC (QUANG NGAI) CO., LTD.

76,127

FOSTER ELECTRIC (BAC NINH) CO., LTD.

73,443

PT FOSTER ELECTRIC INDONESIA

24,477

FOSTER ELECTRIC (THILAWA) CO., LTD.

37,649FOSTER ELECTRIC (U.S.A.), INC. (EL PASO
OPERATIONS)

2,111

Total

2,027,642

G4-EN23
Weight of disposed waste
Hazardous Waste (unit: ton)
Company Name

Japan

Asia

North America

Waste
Generation

Recycled

Non-hazardous Waste (unit: ton)

Final Disposal

Waste
Generation

FOSTER ELECTRIC CO., LTD. (Headquarters)

0.46

0.00

0.46

124.85GUANGZHOU PANYU JIU SHUI KENG FOSTER
ELECTRIC FACTORY (*outsourcee)

238.59238.590.00

FOSTER ELECTRIC CO., (NANNING) LTD.

31.20

31.20

0.00

FOSTER ELECTRIC CO., (HEYUAN) LTD.

56.47

56.47

FOSTER ELECTRIC (VIETNAM) CO., LTD.

218.03

Recycled

Final Disposal

84.00

40.85

1,531.87

0.00

1,531.87

269.80155.50114.300.00

559.60559.600.00

186.1131.91

2,248.68

782.74

1,465.94

FOSTER ELECTRIC (DA NANG) CO., LTD.

123.00118.504.50

820.70261.50559.20

FOSTER ELECTRIC (QUANG NGAI) CO., LTD.

24.10

23.88

0.22

254.22103.55150.67

FOSTER ELECTRIC (BAC NINH) CO., LTD.

82.07

18.11

63.96

603.80221.00382.80PT FOSTER ELECTRIC INDONESIA

123.83

82.23

41.60

433.84151.80282.04

FOSTER ELECTRIC (THILAWA) CO., LTD.

2.37

2.37

0.00

25.77

21.82

3.95

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

0.04

0.04

0.00

869.00126.00743.00900.15757.50142.65

7,742.13

2,467.51

5,274.62

Total

50

Data Table

G4-EN15/G4-EN16/G4-EN18/G4-EN19
CO2 emission
Index

2012

2013

2014

2015

2016

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

2,198

2,403

2,431

2,155

2,549

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

87,17891,54788,56886,66888,222

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

89,375.88

93,950.15

90,998.80

88,823.10

90,771.67

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

62.3

56.6

48.1

46.5

56.4

Scope
FOSTER ELECTRIC CO., LTD. (Headquarters) and 10 overseas manufacturing sites as in EN23)
CO2 conversion factor (Electric)
Japan: Ministry of Environment, 2012 factor based on CO2 conversion factor of electric power supplier (2013)
Overseas: IEA, 2012 factor based on CO2 emissions from fuel combustion (2014)
CO2 conversion factor (Fuel)Japan/overseas: Factor based on the “Greenhouse gas emissions calculation and report manual” released by the Ministry of Environment, Ministry of Economy, Trade and Industry.
Global warming potential
Incorporated 100 year value of IPCC Second Assessment Report (AR2) G4-EN31

Environmental preservation cost (classification through business operations）
Environmental preservation cost (Classification according to business activities）
Company Name
Category

Key activity and the outcome(1) Business area cost

Breakdown

Japan

FOSTER ELECTRIC CO., LTD.
(Headquarters)

Invesment

Cost
0

11,570(1)-1 Pollution prevention
costs

Air and water control-related prevention
countermeasures0545(1)-2 Global environmental
conservation costs

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

0

1,258

(1)-3 Resource circulation
costs

Waste disposal and recycling

0

9,767

(2) Upstream/downstream
costGreen purchasing expenses

00(3) Administration costs

Environmental education, EMS
contruction expenses etc.

0

8,900

(4) R&D costs

Research and development

01,604,629

0877(5) Social activity costs

Tree planting(6) Environmental damage handling costs
Total

0

0

0

1,625,975* Unit (one thousand yen)
* “Investment” refers to equipment investments for the purpose of environmental conservation. “Cost” refers to personnel and miscellaneous expenses/costs incurred forenvironmental conservation activities.

 G4-EN32

Supplier Screening
TargetDomestic and overseas companies

All procuring sites

Rate (%)

97

Percentage of suppliers who have procurement contract with Foster Groups and agreed to “Foster Group Supplier CSR Code of Conduct” by the end of December, 2016.

51

Data TableGRI Guideline (G4) Table
GENERAL STANDARDDISCLOSURESGRISTRATEGY ANDANALYSIS

ORGANIZATIONAL
PROFILEThis report or Corporate Site

G4-1

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

P3~4

Top message

G4-2

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

P3~4-

Top message
 Securities report (Japanese)

G4-3

a. Report the name of the organization.

P43~44-Company Profile/Financial Results Securities report (Japanese)

G4-4

a. Report the primary brands, products, and services.

P43~44-Company Profile/Financial Results Securities report (Japanese)

G4-5

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

P43~44-Company Profile/Financial Results Securities report (Japanese)

G4-6

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

P43~44-Company Profile/Financial Results Securities report (Japanese)

G4-7

a. Report the nature of ownership and legal form.

P43~44-Company Profile/Financial Results Securities report (Japanese)

G4-8

a. Report the markets served (including geographic
breakdown, sectors served, and types of customers
and beneficiaries).

P43~44-Company Profile/Financial Results Securities report (Japanese)

G4-9

a. Report the scale of the organization, including:• Total number of employees• Total number of operations• Net sales (for private sector organizations) or net
revenues (for public sector organizations)• Total capitalization broken down in terms of debt andequity (for private sector organizations)• Quantity of products or services provided

P43~44-Company Profile/Financial Results Securities report (Japanese)

G4-10

a. Report the total number of employees by employment contract
and gender.
b. Report the total number of permanent employees by
employment type and gender.
c. Report the total workforce by employees andsupervised workers and by gender.
d. Report the total workforce by region and gender.
e. Report whether a substantial portion of theorganization’s work is performed by workers who arelegally recognized as self-employed, or by individuals
other than employees or supervised workers, including
employees and supervised employees of contractors.
f. Report any significant variations in employment
numbers (such as seasonal variations in employment in
the tourism or agricultural industries).

P43~44-Company Profile/Financial Results Securities report (Japanese)

G4-11

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

-

 Securities report (Japanese)

G4-12

a. Describe the organization’s supply chain.

- Securities report (Japanese)

G4-13

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

 Securities report (Japanese)52

Data Table

GENERAL STANDARDDISCLOSURES
ORGANIZATIONAL
PROFILEGRI

P19~26
P27~36
P37~42-GovernanceSocialEnvironment
 Securities report (Japanese)

P7-16
P17-18

Foster Group CSRManagement
UN Global Compact (COP)

G4-16

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

P17-18UN Global Compact (COP)

G4-17

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

P43-44-Company Profile/Financial Results Securities report (Japanese)

G4-18

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

P7-16

Foster Group CSRManagement

G4-19

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

P7-16

Foster Group CSRManagement

P7-16

G4-20

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

Foster Group CSRManagement
 Securities report (Japanese)

P19-26
P27-36
P37-42
P43-44-GovernanceSocialEnvironment
Company Profile/Financial Results Securities report (Japanese)

G4-14

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

G4-15

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

IDENTIFIED MATERIALASPECTS AND
BOUNDARIES

G4-21

53

This report or Corporate Site

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

Data Table

GENERAL STANDARDDISCLOSURESIDENTIFIED MATERIALASPECTS AND
BOUNDARIESSTAKEHOLDERENGAGEMENTREPORT PROFILEGRIThis report or Corporate Site

G4-22

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

-

No restatements

G4-23

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

-

No significant changes

G4-24

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

-

 General Meeting of
Shareholders Financial Result Briefing
Procurement Briefing

G4-25

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

P19-26

Governance

P7-16

G4-26

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

Foster Group CSRManagement
GovernanceP19-26

G4-27

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

-

None

G4-28

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

P47-62

Data

G4-29

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

P47-62

Data

G4-30

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

P47-62

Data

G4-31

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

P47-62

Data

G4-32

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

P47-62

Data

G4-33

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

-

None

G4-34

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

-

 Corporate Governance
Guideline (Japanese)

G4-35

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

G4-36

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

GOVERNANCE

P19-26-

Governance Corporate Governance
Guideline (Japanese)

P7-16

Foster Group CSRManagement

54

Data Table

GENERAL STANDARDDISCLOSURESGRI

GOVERNANCE

55

G4-37

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

G4-38

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

G4-39

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

G4-40

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

G4-41

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

G4-42

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

G4-43

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

This report or Corporate Site

P7-16

-

Foster Group CSRManagement

 Consolidated Financial
Results
 Corporate Governance
Guideline (Japanese)- Securities report(Japanese)- Corporate Governance
Guideline (Japanese)- Corporate Governance
Guideline (Japanese)

P7-16

Foster Group CSRManagement

P7-16

Foster Group CSRManagement

Data Table

GENERAL STANDARDDISCLOSURESGRI

GOVERNANCE

G4-44

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

G4-45

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

G4-46

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

G4-47

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

G4-48

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

G4-49This report or Corporate Site

P19-26
P27-36
P37-42GovernanceSocialEnvironment

P7-16

Foster Group CSR
management

P7-16

Foster Group CSR
management

P7-16

Foster Group CSR
management

P7-16

Foster Group CSRManagement

a. Report the process for communicating critical concerns
to the highest governance body.

P19-26

Governance

G4-50

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

P19-26
P47-62Goverance
Data

G4-51

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

G4-52

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

-

 Corporate Governance
Guideline (Japanese)

-

None

56

Data Table

GENERAL STANDARDDISCLOSURESGRI

GOVERNANCE
G4-53

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

-

None

G4-54

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

-

None

G4-55

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

-

None

G4-56

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

P1-2-

Corporate Philosophy
Corporate Action Guideline
Code of Conduct for Staff

G4-57

a. Report the internal and external mechanisms for seeking
advice on ethical and lawful behavior, and matters related
to organizational integrity, such as helplines or advicelines.

P19-26

Governance

G4-58

a. Report the internal and external mechanisms forreporting concerns about unethical or unlawful behavior,and matters related to organizational integrity, such as
escalation through line management, whistleblowing
mechanisms or hotlines.

P19-26

Governance

ETHICS AND INTEGRITYECONOMICGRIECONOMIC DMAECONOMICPERFORMANCEPROCUREMENT
PRACTICES

Direct economic value generated and distributed.

-

None

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

-

None

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

-

None

G4-EC4

Financial assistance received from government.

-

None

G4-EC5

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

-

None

G4-EC6

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

-

None

G4-EC7Development and impact of infrastructure investments andservices supported.

-

None

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

-

None

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

P47-62Data

GRI

ENVIRONMENTAL DMAENERGY57

Top message

G4-EC1ENVIRONMENTAL

MATERIALS

This report or Corporate Site
P3-4

MARKET PRESENCEINDIRECT ECONOMIC
IMPACTSThis report or Corporate Site

This report or Corporate Site
P3-4
P37-42Top message
Environment

G4-EN1

Materials used by weight or volume.

P37-42

Environment

G4-EN2

Percentage of materials used that are recycled input
materials.

P37-42

Environment

G4-EN3

Energy consumption within the organization.

P47-62Data

Data Table

ENVIRONMENTAL
ENERGY

WATER

GRI

P7-16

Foster Group CSRManagement

Energy intensity.

P47-62

Data

Reduction of energy consumption.

P47-62Data

G4-EN7

Reductions in energy requirements of products andservices.

P37-42

Environment

G4-EN8

Total water withdrawal by source.

P47-62Data

G4-EN9Water sources significantly affected by withdrawal of water.

P37-42

Environment

G4-EN10Percentage and total volume of water recycled andreused.

P37-42

Environment

G4-EN11

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

-

None

G4-EN12

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

-

None

G4-EN13

Habitats protected or restored.

G4-EN14

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

G4-EN15

G4-EN4

Energy consumption ouside of the organization.

G4-EN5
G4-EN6

BIODIVERSITYEMISSIONSEFFLUENTS AND
WASTEPRODUCTS ANDSERVICES

P37-42

Environment

-

None

Direct greenhous gas (GHG) emissions (Scope 1)

P47-62Data

G4-EN16

Energy indirect greenhouse gas (GHG) emissions (Scope2).

P47-62Data

G4-EN17

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

P7-16

Foster Group CSRManagement

G4-EN18

Greenhouse gas (GHG) emissions intensity.

P37-42

Environment

G4-EN19

Reduction of greenhouse gas (GHG) emissions.

P37-42

Environment

G4-EN20

Emissions of ozone-depleting substances (ODS)-

N/A

G4-EN21

NOX, SOX, and other significant air emissions.

-

N/A

G4-EN22

Total water discharge by quality and destination.

P47-62Data

G4-EN23

Total weight of waste by type and disposal method.

P37-42

Environment

G4-EN24

Total number and volume of significant spills.

-

N/A

G4-EN25

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

-

N/A

G4-EN26

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

-

None

G4-EN27

Extent of impact mitigation of environmental impacts ofproducts and services.

P37-42

Environment

G4-EN28

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

P37-42

Environment

G4-EN29

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

G4-EN30

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

G4-EN31

Total environmental protection expenditures andinvestments by type.

COMPLIANCE

TRANSPORTOVERALL

This report or Corporate Site

-

N/A

P7-16

Foster Group CSRManagement

P47-62

Data

58

Data Table

ENVIRONMENTAL
SUPPLIER
ENVIRONMENTALASSESSMENT

ENVIRONMENTALGRIEVANCEMECHANISMS

GRI
G4-EN32

Percentage of new suppliers that were screened using
environmental criteria.

P47-62Data

G4-EN33

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

-

None

G4-EN34

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

-

N/A (Headquarters)

SOCIALGRISOCIAL DMALABOR PRACTICESAND DECENT WORKLABOR PRACTICESAND DECENT WORKThis report or Corporate Site
P3-4
P27-36Top message
Social

G4-LA1

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

P47-62Data

G4-LA2

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

-

None

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

P47-62Data

G4-LA4

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

-

None

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

P47-62Data

G4-LA6

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

P47-62Data

G4-LA7

Workers with high incidence or high risk of diseases related totheir occupation.

-

None

G4-LA8

Health and safety topics covered in formal agreementswith trade unions.

P47-62Data

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

P47-62Data

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

-

None

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

P47-62Data

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

P47-62Data

G4-LA13

Ratio of basic salary and remuneration of women tomen by employee category, by significant locations ofoperation.

P47-62Data

G4-LA14

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

P47-62Data

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

-

None

G4-LA16

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

P47-62Data

G4-HR1

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

-

None

HUMAN RIGHTS

59

This report or Corporate Site

Data Table

SOCIALGRI

HUMAN RIGHTSThis report or Corporate Site

G4-HR2

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

P47-62Data

G4-HR3

Total number of incidents of discrimination and corrective
actions taken.

-

N/A

G4-HR4

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

-

None

G4-HR5

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

-

None

G4-HR6

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

-

None

G4-HR7

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

P47-62Data

G4-HR8

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

-

N/A

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

-

None

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

P47-62Data

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

P47-62Data

G4-HR12

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

P47-62Data

G4-SO1

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

-

None

G4-SO2

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

-

None

G4-SO3

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

-

None

G4-SO4

Communication and training on anti-corruption policies
and procedures.

-

None

G4-SO5

Confirmed incidents of corruption and actions taken.

-

None

G4-SO6

Total value of political contributions by country andrecipient/beneficiary.

-

None

G4-SO7

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

-

N/A

G4-SO8

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

-

N/A

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

P47-62Data

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

-

None

G4-SO11

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

P47-62

Data

SOCIETY

60

Data Table

SOCIALPRODUCTRESPONSIBILITY

61

GRI

This report or Corporate Site

G4-PR1

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

-

None

G4-PR2

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

-

None

G4-PR3

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

-

None

G4-PR4

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

-

None

G4-PR5Results of surveys measuring customer satisfaction.

-

None

G4-PR6

Sale of banned or disputed products.

-

None

G4-PR7

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

-

None

G4-PR8

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

-

N/A

G4-PR9

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

-

N/A

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

Items Reported in Sustainability Report 2017
∙ About this report
The “Sustainability Report 2017” (the Report 2017) was prepared to comprehensively report the Foster Group’s corporatesocial responsibility (CSR) activities throughout the fiscal year ended March 31, 2017 (fiscal 2016), for our stakeholders.
With regard to our CSR activities, your valued opinion would be greatly appreciated to help us fulfill our corporate social
responsibilities in the years to come. We hope this report will help you better understand the CSR activities of the Foster
Group.
∙ Reporting scope
Unless specifically indicated, the reporting scope of the Report 2017 includes the CSR activities of the Foster Group,
which consists of Foster Electric Company, Limited, and its consolidated subsidiaries in Japan and overseas.
∙ The reporting period of the Report 2017
The reporting period of the Report 2017 is from April 1, 2016, to March 31, 2017 (fiscal 2016). The Report also includes
statements concerning activities outside the reporting period, including those in fiscal 2017.
∙ Referenced guidelines
The Environmental Reporting Guidelines 2012 by the Ministry of the Environment and the GRI Sustainability Reporting
Guidelines G4 were referred to when preparing the Report 2017.
∙ Month of issue:June 2017∙ Next issue of the CSR report (planned):
June 2018∙ Reporting to the United Nations Global Compact
As a company that has signed the United Nations Global Compact, we have announced this report as the “Global
Compact Communication on Progress (COP)” for the four fields and ten principles to our stakeholders. Details on our
activities related to the United Nations Global Compact can be found in page 17.
∙ Provision of the sustainability information on our corporate website
http://www.foster-electric.com/csr/index.html∙ Contact:
Foster Electric Company, Limited

Phone: +81- (0) 42-546-2311

Fax: +81- (0) 42-546-2317

62

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

The cover page features 15 colorful andslender threads that are crossing one
another. These 15 colors indicate thenumber of countries and regions in which
the Foster Group has its sites and theslender threads indicate every employee.
This design expresses the Foster Group
being weaved from every employee and theculture of each country/region.
June 2017 Edited in Japan