Management and Corporate Policy
Accuphase is not simply a technology-oriented company. Rather, we givehighest priority to the concept of customer satisfaction. We pride ourselves on
creating products that come from the heart and that will be cherished by the user.
We endeavor to be thorough and meticulous in all aspects of this process, frombuilding to marketing and servicing the products. We have formulated the uniqueManagement and Corporate Policy shown below, which guides and informs ouractions as we continue to pursue our craft.

● Avoid undue company expansion, in keeping with the principleof "small numbers ‒ exceptional talent".
● Avoid drastic changes in design.
● Make products that last a long time.
● Design products to be sturdy, but easy to fix if necessary. Thismeans a clean and aesthetically pleasing look also internally.
● High quality, long-term reliability, and safety are paramount.
● Give priority to quality over quantity, producing an ample
number of models in small quantities.
● Keep capital within the company.
● Aim for improved capital adequacy ratio.
● Strongly adhere to debt-free management.
● Fulfill all tax liabilities and maintain in-house reserves.

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■Not aiming for expansion
One of the corporate principles that Accuphase has observed since its
beginning is the conscious decision not to pursue expansion. In a free economy,
most companies try to grow. However, demand is not unlimited. If we were tochase the numbers, trying to sell more and more products and compete only on
price, we would lose our ability to create truly high-end audio components.
We therefore are not increasing our staff numbers (currently about 80, similar
to the time of the company's founding), in keeping with the principle of "smallnumbers ‒ exceptional talent". Rather than trying to expand the scale of thecompany, we believe in quality over quantity. We adhere to a low-volume
production schedule, building and marketing only about 5,000 units per year. But
with regard to the products that we are making, we passionately care about theirsound, their performance, their quality, and their design. We do not ship aproduct unless it fully meets our exacting standards. This gives it lasting valueand ensures the excellent reputation of the Accuphase brand.

■Avoid drastic changes in design and create long-selling
products
Products with high added value that bring real satisfaction to the user
necessarily will carry a higher price tag. Customers who realize this are glad topurchase such products, knowing that they will receive something of lastingvalue. The manufacturer therefore has a responsibility to ensure that thisexpectation is realized, by building quality into the product, and making it retain
its value for as long as possible This is one of the reasons why the characteristic
look of Accuphase, including the coloring and design of the logo and thefaceplate do not change significantly. Model changes are spaced at fairly longintervals. After being introduced, an Accuphase product will be available at thevery least for four years, with some models remaining on the market for tenyears and more.
As a result, an Accuphase component will not lose its value even after
extended ownership, and it does not feel old or obsolete. Accuphase products
are much sought after also on the second-hand market.

2Precision Stereo Pre-amplifier C-2800 launched in 2002

Precision Stereo Pre-amplifier C-2850 launched in 2016

■Develop high quality products and market them properly
Designing products to be reliable and sturdy, but easy to fix if necessarymeans that the interior will also look clean and aesthetically pleasing. We aim tobuild the kind of components that we ourselves are excited about, and that will
provide the eventual owner with the pleasure and pride of possessing and using
an Accuphase product. Not only do we care about every detail when building
them, we also want our products to be sold by people who understand theiressence, i.e. a select network of dealers who put quality before quantity. Ifmarketing is all about moving as many units as possible, quality and value will3

invariably suffer, and the customer will not obtain true satisfaction.
Authorized Accuphase distributors and dealers in various countries around theworld value the dialog with customers and understand the management andcorporate philosophy behind our products. We firmly believe that "selling with
understanding" is the key to winning the trust and loyalty of customers,
contributing to their satisfaction with the purchase.

■Sales volume ratio: domestic 70%, export 30%
Accuphase has set the basic sales volume ratio of its products to 70% for
domestic and 30% for overseas sales. In Japan, we sell our products toaudiophiles via a network of authorized retailers.
On the export side, our products go to over 60 countries in various areas
around the world, including Europe, Southeast Asia, and the Americas. Theproducts are sent directly to authorized import agents and reach the end user
only via strictly selected dealerships.

■Keep capital within the companyAccuphase is not a publicly traded company. We therefore need not tailor ouroperations to the wishes of external shareholders (interests), which frees us topursue product development with an emphasis on commitment and with along-term perspective.
In addition, Accuphase currently has a capital adequacy ratio of more than
85%, and we have been engaging in debt-free management since more than 20years. At the end of our financial period, we settle our tax liabilities, and we strive
to allocate investments to research and to build in-house reserves.

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