KOKUYO Group CSR Report

Founded in 1905

Detailed Version

Founder Zentaro Kuroda

Wacho launched during the
Taishō period

Spirit of“shō hyaku mai”

Shop in Shinmachi

The first trademark“Kokuyo”

Stationery pad with highquality paperboard

Label of 3K Stationery
Paper

Duplicate Telegram Slip

BinderHead office, 1936

Sign for advertising Ink
kk55

Ink kk55

Field Notebook

Bill

First steel product(Steel filing cabinet)

Jun Mitsumata Hankeishi (Ruled papers
made of 100% mitsumata plant)

Invoice Pad

Yao Factory

Ochanomizu Office

Swivel chair

Estimate Pad

Kickoff meeting of Jewelry
Members

New head office, 1969

Live office advertisement

Electronic Abacus(outer case)

Tack Index (outer case)Portable box seat
(Ryogoku Kokugikan)

Lonely Little Fox(original mascot)

ECIFFOMiss Blanche

1Corporate logo changed
in 1981High-Grade Accounting Pad

KuruKuruMeka

Dynafit Chair

MX Desk System

Title Brain

Pochette Album

Third-generation
Campus Note

Keishipita

BezierAGATA

HakoboRatchkiss

AGATA/D

Kadokeshi

Nursing Cart

Dotliner

W
Fifth-generation
Campus Note

Kokuyosekiroll table

Campus UP

SAIBI

ith

G r a ti t udeCorporate Philosophy/CSR Charter

Corporate
Philosophy

Enrich the World through Our Products

KOKUYO's CSR
Charter

Grounded in the founding corporate philosophy of“Enrich the World through Our Products”the KOKUYOGroup conducts business that is necessary for society, while remaining profitable and honest in its businesspractices.
In addition to complying with laws and regulations, we seek to maintain continuity of our business byacquiring the trust of all related stakeholders, investors, and, of course, our customers by fulfilling our social
responsibilities as a corporate citizen.

For Our
Customers

For Regional
Communities

For
Environmental
Conservation

1.Without being satisfied with the present conditions, we continue to improve the safety and quality of ourentire product line and services.
2.Strive to continually innovate society through our business operations by developing new products andservices.

1.Strive to be a trusted‘corporate citizen’on both regional and national levels via proactive interaction andplanning with regional communities, while respecting regional culture and customs and encouraging theiradvancement.
1.Concentrate the wisdom of each of our employees, and align the actions of our entire company in order toassist in reaching solutions for the common environmental problems facing the world today.
2.By developing Eco Products, we strive to decrease the environmental burden over the life cycle of these
Products and to introduce new environmental engineering and green procurement techniques.
3.Contribute towards the advancement of a‘low carbon society’by proposing revolutionary work styles andenvironments, and decrease society's overall burden on the environment.

Corporate
Activities

1.Conduct transparent, just, and free competition and business transactions while keeping sound and correct
relations with politicians and governmental bodies.
2.In order to become a trusted company, we strive for business partner relations that are consistently fair andbuilt upon a foundation of reciprocal cooperation, allowing for mutual growth.
3.Recognize our responsibility to increase our corporate value for stockholders, and maintain a corporate
management style that earns the trust of society through its transparency and virtue.

Respectfor
Human
Rights

1.Respect the human rights of all individuals involved with or affected by all of our corporate activities. We
support work environments free from discrimination, and do not approve of child labor or forced labor
practices.
2.Strive to accept each and every employee's individual character and personal values, and become a company
where many different human resources can fully express their abilities and develop themselves.

The KOKUYO Creed
When born into this world, a child has nothing to call its own.
Our bodies, minds and spirits grow and are nourished by the love of our parents and families,
the guidance and discipline of our teachers, and the encouragement of society as a whole.
We grow and adopt vocations suitable to ourselves and the education instilled in us.
These vocations must be pursued with utmost diligence by gaining the trust of colleagues,
clients and communities around us.
The only way to secure this trust is to act with absolute integrity in every action and endeavor
we undertake.
In this way, our endeavors succeed in and of themselves, and we are happy in our vocations.
Integrity is not in words but in action.
This is the KOKUYO creed.

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KOKUYO Group CSR Report 2015

Editorial Policy

Contents

Each year, KOKUYO Group publishes a CSR Report to provide our
stakeholders with the Group's efforts on realizing a sustainable
society, along with intelligible information concerning KOKUYO’ssocial responsibilities so as to maintain good communication withdiverse stakeholders. There are several reporting tools to facilitate
the reading and visualization of the report.

2 Corporate Philosophy / KOKUYO's CSR Charter
3 Editorial Policy

CSR Reporting Tools

4 Top Message

Website for CSR and Environmental Management

5 Introduction of the KOKUYO GroupThe website contains a comprehensive report of theGroup's overall activities. Since 2014, new features havebeen added to enhance the retrieval performance ofthe top page, including recommended articles by typesof stakeholders, search by keywords, and the table ofcontents categorized by the core subjects of ISO 26000
guidelines.
http://www.kokuyo.com/en/csr/

6 Top Dialogue
10 History of
the KOKUYO Group for 110 Years

Digest Version

12 Highlights of 2014

It offers a digest of the KOKUYO Group's activities for fiscal 2014.
Information in detail can be found on the website marked with PC
marks()for CSR and environmental management.

14 Key Non-financial Data
15 Financial Data Highlights

PeriodThis report focuses on activities carried out from January 1, 2014, toDecember 31, 2014, but also includes some information about the activities
implemented by March 31, 2015.

Scope of the Report
The KOKUYO Group refers to KOKUYO Co., Ltd., and its domestic andoverseas Group companies, comprising 22 consolidated subsidiaries,
except certain activities implemented by other subsidiaries and affiliates.

Guidelines Used As Reference
・ISO 26000ISO 26000
・Japanese Ministry of the Environment Environmental Reporting Guidelines
2012
・GRI (Global Reporting Initiative) Sustainability Reporting Guidelines 4th
Edition

16 Refine value for Learners
and Workers
FURNITURE
16 INSPINE・Bezel
18 Campus UP
STATIONERY
20 Harinacs Press
22 KaruCut
24 Kaunet

Cover pageThe history of KOKUYO, which will be marking
the 110th anniversary of its founding in October
2015, is traced through a presentation of products
and other milestone images on the cover pageof this document. Beginning with covers for
Wacho (Japanese-style account ledgers) in 1905,
numerous items of topical interest corresponding
to each era are highlighted.

30 CSR Management
48 With Customers
60 With Employees
83 With Business Partners
93 With Stakeholders
95 With Local Communities
114 With the Global Environment
132 ISO 26000 Table
135 Third-Party Assessments

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KOKUYO Group CSR Report 2015

Top Message
By seriously accepting the difficult challenges
that confront customers and communities,
we aim to help realize a sustainable society

Akihiro Kuroda

Hidekuni Kuroda

Representative Director& Chairperson,
KOKUYO Co., Ltd.

Representative Director& President,
KOKUYO Co., Ltd.

For the glory of Ecchu. Born in present-day Toyama Prefecture, company founder Zentaro Kuroda vowed to establish
himself in business and set out for Osaka with the intent of being an honor to his hometown. In Osaka, he started Kuroda
Hyoshi-Ten, a workshop that produced cover paper for account books, which was the beginning of the business of
KOKUYO. In October of this year, KOKUYO will mark its 110th anniversary.
The founder's resolution came to be incorporated into the KOKUYO trademark in 1917. In 1961, the present-day name of
the company was adopted. And now the resolution isembraced by the entire KOKUYOgroup and would constitute the basis
for decision-making process in the company. We believe that our company name is a significant reason that we cancelebrate our 110th anniversary despite having encountered numerous difficulties throughout our history. It is because each
employee has been inspired to go forth and prevail over each new complication by revisiting the KOKUYO company name.
The company has not managed to survive for 110 years on its own. We owe our existence today to the many stakeholders
including customers who have great expectations of our company and countless business connections who have lent us ahelping hand along the way. We express our heartfelt gratitude to those leaders who helped shape our history based on
respect for the founder's resolution and to those stakeholders who supported us day in and day out.
Our corporate philosophy of enriching the world through our products has remained unchanged since we were founded. We
have been promoting our day-to-day business by supporting the growth of our customers (individuals and companies)
through our products and services so as to enrich society. In recent years, however, societal values have diversified and thegrowth of people and companies has come to take on varied forms. In order to achieve sustainable growth even as it
becomes more difficult to determine what it means to enrich the world, we are presently engaged in efforts to undertake
management reforms for rebuilding a foundation for management and business.
In the first phase of reforms begun in 2010, Group businesses were broadly divided into three sections: stationery, furniture,and mail orders and retail. By tightening up and streamlining value chains for each business, we achieved business-focusedmanagement for enhancing value provided. At the same time, we proactively moved forward with overseas expansion while
attempting to figure out new ways of enriching the world based on our experience in high-growth Asian countries. After
reflecting on compliance violations in the past, we embraced CSR-based management and reviewed our system ofcorporate governance thoroughly Consequently, results have been yielded as seen in steadily recovering performance
results up to fiscal year 2014.
In 2015, with a rejuvenated management system in place, phase 2 of our reforms was launched. In October, two key
operating companies will be merged with KOKUYO Co., Ltd., and we will go beyond the framework of our business andseek to create value that is truly desired by customers . We will build on our early successes, enhance the value that wehave been providing based on a new mid- to long-term vision, and take on the challenge of generating new value. At thesame time, we will continue to strive to resolve such societal issues as the protection of the global environment and respectfor human rights.
We have managed to survive and prosper for 110 years by seriously dealing with customer issues that vary with the times
and finding solutions to each one of these issues along the way. This approach will not change even as we operatepresently in a time described as uncertain and in a society that finds itself more and more beset by societal issues andbusiness-related problems. By valuing an approach to dealing seriously with both customer problems and societal issues
within the context of a new management system and flexibly modifying our way of resolving these problems and issues, wewill try our hardest to bring about a sustainable society. We respectfully ask for your continued support and understanding.
Thank you very much.
Hidekuni Kuroda

Akihiro Kuroda

Representative Director &President,
KOKUYO Co., Ltd.

Representative Director& Chairperson,
KOKUYO Co., Ltd.

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KOKUYO Group CSR Report 2015

Introduction of the KOKUYO Group

Our Corporate Philosophy Handed Down from the Time of KOKUYO's Founding: “Enrich theWorld through Our Products”
The origins of today's KOKUYO Group trace back to 1905 when our founder, Zentaro Kuroda, opened a shop selling covers
for Japanese-style accounting ledgers. In that era, making covers for ledgers that contained many sheets of thin,
Japanese-style paper was regarded as a troublesome, low-value-added business activity. The founder of KOKUYO thought
otherwise. His view was that even work that is troublesome or bothersome, provided KOKUYO approached it with sincerity
and thoroughness, would eventually lead to the development of items with new value added. He held fast to this belief
throughout his life. Since then, under its corporate philosophy of “Enrich the World through Our Products” KOKUYO has
focused on developing its business activities, working to raise its profitability as it becomes a company that society needs,
and will be the first choice of its customers.

“Honor of the Country” Inherent in the KOKUYO Name
The KOKUYO name was originally written in Japanese as a combination of the character for “country” and the character for“honor.” When KOKUYO's founder Zentaro Kuroda left his native city, he was told to “become someone who brings honor tohis hometown.” When he founded his own business, he adopted the trade name “KOKUYO” (Country“国”+ Honor“誉”) to
remind himself at all times of his mission, and the name has remained unchanged until today. Over the 100 years since
KOKUYO was founded, its businesses have evolved along with the changing times, but each and every employee is awareof his or her behavior and avoids any activities that might dishonor the Company name. At present, the KOKUYO Group is
growing from being a Japanese company to become an Asian company and is striving to become the “honor of Asia.”

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KOKUYO Group CSR Report 2015

Introduction of the KOKUYO GroupAt present, the KOKUYO Group practices an axial business model with three main business segments: Stationery
Business, Furniture Business, and Mail-Order & Retail Business. By straightening coordination in the entire value chain, weare committed to agile management practices, timely product development, and the provision of products and services thatsuit consumer's specific demands.

Stationery Business
Being of Assistance to those Who Work and Learn
Centering on the manufacture and sales of paper products, KOKUYO's stationery
business offers stationery and PC-related products designed to facilitate the knowledge
work performed by diverse customers in a variety of working and learning environments.
The company's aim is to achieve sustained growth by targeting both domestic andoverseas markets; to do this, we will actively expand our business in rapidly growing
emerging Asian markets of Vietnam, China, and India.
Stationery
Hirameki Products with Inspirations
Office solutions

Furniture Business
Taking on the Challenge for New Work Styles
The furniture business segment engages in the manufacture and sales of furniture for
offices, public areas, and retail spaces and provides a variety of spatial planning for
offices, public facilities, and commercial establishments. Using results from a survey on
corporate strategies, work styles, and facility characteristics, we offer a personalized
solution for spatial design and total project support to create spatial values withcustomers. Also in Asia, we are embarking on a new challenge to deliver highly
competitive products to the market by stepping up marketing, planning, and thedevelopment of office furniture.
Office space
Educational institutions
Retail and commercial space
Civil services and public facilities
Medical facilities
Hotel space

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KOKUYO Group CSR Report 2015

Mail-Order & Retail Business of Office Supplies
Delivering an Excitement Beyond Happiness
Aiming to serve the needs of customers by taking their perspective, KOKUYO engages
in the mail-order and retail business of office supplies for corporations and individuals
from diversified directions with the KAUNET mail and online order business at the core.
Online and Catalog Sales Business
Wholesale Business
Online and Catalog Business of Office Supplies in China
Easy Buy
Offers all necessary office supplies you need as well as KOKUYO's products and stationery supplies

Retail Business
Bringing a Sense of Fine Quality and Excitement to Daily Life
KOKUYO operates ACTUS, specializing in furniture, textiles, and general homefurnishings mainly imported from Europe.
ACTUS
Promoting a gracious way of living where people esteem highly of products that
ensure satisfaction.
Ecocochi Plans
ACTUS engages in an activity for changing comfort into eco-friendly.

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KOKUYO Group CSR Report 2015

TOP Dialogue

Founded nearly a century ago, Kewpie has continued to grow impressively by hewing to its philosophy. Built to take on
greater challenges, Sengawa Kewport was conferred the 2014 Ministry of Economy, Trade and Industry Award, an award of
the New Office Promotion Awards, for the clarity of a concept that is directly tied to the company's management strategy.
Thanks to the connection that was developed through support provided by KOKUYO for constructing this office, aconversation between President Miyake of Kewpie and Chairman Kuroda of KOKUYO was held. A considerable amount ofknowledge was obtained from this esteemed representative of a client and of a company that has engaged in management
based on corporate philosophy.

The philosophy that has been handed down to us from the founder becomes a guiding
principle that transcends the times.
KurodaKOKUYO will commemorate the 110th anniversary of its founding in October 2015. At this juncture, we areattempting to formulate a new management vision based on the philosophy that has been handed down to us fromthe founder. I know that you are also set to commemorate your centennial. Could you share with us the thinking thathas bolstered your growth over the years?
Miyake

The company creed and guiding precepts constitute the thinking that is valued by us here at Kewpie.

These are the ways of life and the philosophical underpinnings that our founder Toichiro Nakashima subscribed to.
They are properly passed down from managers to new employees. We believe that our company creed and guiding
precepts constitute decision-making axes for engaging in management whenever the company comes to a crossroador critical point in its history. While major food companies one after another attempted to enter the mayonnaise
market, I believe that Kewpie owes its existence today to the ability shown by our entire workforce to come together
and overcome this considerable tribulation.
Since we are a food company, quality is our number one concern. Ever since we were founded, we have been
pursuing safety, security, and deliciousness on the basis of our belief that good products can only be derived fromgood ingredients. To illustrate this point, we spent six years weeding our plant without any production both during and
immediately after the war at a time when we could not obtain quality ingredients. Many of our employees left during
those years. When we were finally able to secure good ingredients, we resumed our production of mayonnaise. The
remnants of our workforce worked hard to contribute to the recovery of Japan. This is the very essence of ourcompany creed in that people who embrace the same vision and ideas and who overcome difficulties hand in handwill later reap the happy fruits of such hard work together.
Kuroda At KOKUYO, our founding spirit can be described as the business of kasu (business of providing
underappreciated business necessities). Founder Zentaro Kuroda was convinced that you could take even
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KOKUYO Group CSR Report 2015

underappreciated jobs that are troublesome and make them into thriving
businesses simply by believing that they could enrich the world and thenendeavoring to enhance their value accordingly. KOKUYO got its start as abusiness making paper for Japanese-style ledgers and expanded into
Japanese-style ledger and Western-style ledger. With the arrival of the FirstWorld War, however, it was no longer possible to import ledger paper stably. In
order to properly supply the domestic market (which was undergoing
Westernization at the time), we sought to develop Western-style ledger that could
be produced in Japan. We focused on paper quality in terms of the ability to write
well and the ability to prevent the bleeding of ink. Although KOKUYO was only asmall local plant with a staff of about sixty workers back then, we managed to develop ledger paper over a period ofnine years in collaboration with major company Oji Paper. Evidence of our focus on paper quality can still be seen in
the Campus notebooks, which were first sold forty years ago.
Apparently, we were also using your Western-style ledger back then. These sheets here date from the late fifties
Miyaketo early sixties.
Kuroda You've kept these in perfect condition! By applying a marbled effect to thisedge part, we incorporated a feature that prevented ledger alterations caused by
the tear of pages. I've even heard that taxation offices recommended our ledger
because it could not be altered. This allowed us to gain nearly the entire market
for Western-style ledger.
On the occasion of the fiftieth anniversary of the establishment of KOKUYO's
foundation, the KOKUYO Creed*, which summarized the thoughts and ideas
valued by our founder, was drafted to include the following: “A person arrives inthis world with nothing… and grows in both body and mind thanks to society….” This is precisely conveyed to
employees as a means of explaining why we work. One might live in a way that is often taken for granted. However,the fact that we can live while obtaining life-sustaining pharmaceutical products, foods, and convenient transportation
at reasonable prices is a benefit based on value generated by the effort of society and companies. In other words,
this is all made possible thanks to society. We need to work to enrich society in order to pay back to society for what
we are thankful to have received ourselves.
* See page 31p ：「KOKUYO Creed」

MiyakeThis also ties in with our guiding precept to be kind to your parents. Parents provide their children with love freeof charge. A person who has a sense of filial obligation in response to this love is someone who will never forget to
repay those who took care of them in school or at their place of work with gratitude,. When people will draw together
others who possess feelings of goodwill towards them. The idea that a company will evolve and grow from out of thisvirtuous cycle is what we have adopted as one of our guiding precepts.

Focal point, creativity, and originality enable us to further cement our strengths and yield newvalue.
MiyakeIn 2015, we are celebrating the ninetieth anniversary of the launch of Kewpie's mayonnaise. Our
founder first encountered mayonnaise in the United States, where he became captivated by both thedeliciousness and high nutritional value of this food item. His aim to introduce mayonnaise to Japan
led to the commencement of our business. With a strong desire to further enrich the Japanese diet,the company went beyond simple nutritional considerations and developed a more full-bodied
mayonnaise by insisting on using only the egg yolk and increasing the amino acid content of the egg
yolk by allowing it to mature.

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KOKUYO Group CSR Report 2015

KurodaMayonnaise made overseas contains egg white, which accounts for the whiter color of the product. Japanesemayonnaise is yellow and is undeniably delicious. Incidentally, I see that you use the word “unique” in yourmanagement philosophy.

MiyakeWithout a sense of uniqueness, I believe that it would not be possible tomaster our guiding precepts of respecting moral principles and endeavoring to becreative and original. However, it can be said that what makes us most unique is
our avoidance of areas in which we are weak and our engagement in efforts toexhaustively explore value through a thorough focus on eggs.
In fact, our entire group uses ten percent of all eggs produced in Japan eachyear. For this reason, we make sure to fully use the egg white and even the shellsof eggs after using the yolk for making mayonnaise, thereby avoiding wasting any
part of the egg. An egg contains all of the nutrients needed to raise a single chicken. When you think about theessential functions of each part of an egg, the egg yolk is surely the most important. The shell is porous enough toallow air but not water to pass through in order to protect the contents of the egg from the elements. The egg white
has antibacterial properties to protect the egg yolk. We engaged in research with a thorough focus on these functions
to identify the various benefits associated with different parts of the egg. Recently, we developed an alcoholic
preparation derived from egg white for deactivating the norovirus in collaboration with a university. At Kewpie, weconvert all parts of the egg, including the shell, into value that we can offer to our customers.

Kuroda So you really don't discard any part of the egg, do you? While I'm also quite
interested in the extent to which you thoroughly pursue creativity and originality,
your focal point is truly a sight to behold. We at KOKUYO also value the ability to
be focused. This tape glue was actually inspired by the photo albums that were in
use a long time ago. To replace photos in one of these old albums, you were able
to peel back the film, switch the photos, and re-affix the film, over and over again.
With a focus on this method of adhesion, we developed a technique for transferring glue in a dot configuration withrollers. Having garnered an exceedingly positive reception for this product from the very outset, we now offer a huge
range of choices in this product line - from temporary-adhesion-type tape glue to strong-adhesion-type tape glue and even sell these products overseas. Even for a product that would appear at first glance to be a product that has
fulfilled its purpose, we learned that a different focal point can give applicable techniques associated with the productnew values. Nevertheless, it is only by communicating this value to vendors and having vendors in turn communicate
this value to customers that this value will end up enriching the world. Thus, the ability to make value that has been
the subject of our focus known to others is an issue that needs to be tackled.

We identify issues affecting our customers and join forces with them to create new value.
KurodaDuring the years of high economic growth, we experienced surges of demand for consumables and furniture in

March, which corresponded to the month in which our customers settled their accounts and to the month treated bygovernment offices as the end of the fiscal year, so at that time the maintenance of sufficient stock was a value
demanded by KOKUYO. In this connection, we grew along with the market by building a new information system andlogistics framework and thereby obtaining the trust of vendors. With the collapse of the bubble economy, however,reliable supply came to be treated as a matter of course by customers and customer expectations underwent
significant changes. The creativity of individuals working to accommodate diverse needs and differentiate themselvescame to be necessary and the offices in which these individuals worked came to attract much attention. What kindsof offices generate value for customers? We spent many years dealing with customer issues and engaging in aprocess of ongoing research and proposals towards this end. To solve the issues that affect our customers, we
believe that it is important to establish a chain of trust linking everyone from suppliers to vendors and customers
together and to generate value in collaboration with these different parties. For us, it has been a truly valuable
experience to have been given the chance to be involved in helping build your new office, an office that embodies the
management reforms that you have begun to implement.

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KOKUYO Group CSR Report 2015

MiyakeOn the occasion of the ninetieth anniversary of the launch of our mayonnaise, we would like to once again
properly convey the basics of our mayonnaise to everyone in our company.
How will we cultivate value as we look forward to celebrating the centennial of the launch of our mayonnaise? Wehave been discussing a view for orchestrating our group strengths. An embodiment of this approach is Sengawa
Kewport. We brought our 17 business offices and 1,400 workforce, which had been scattered far and wide as a resultof corporate splitting, together in this one location. Previously, there were no opportunities for conversations to beundertaken across different companies that were located physically apart from one another. We wanted to create anenvironment in which one could move around a floor and get a number of different tasks done and completed in theprocess.

KurodaThe triangular shape of your office building is also unique, isn't it?

MiyakeThis is the shape that we considered for creating what we conceived as asynergy effect by bringing together and reinforcing connections among groupcompanies. With a triangular shape, each zone is connected to the other zones.
We proactively incorporated gaps and other features for generating conversations
and dialog transcending the boundaries that delineate companies and divisions
into the connecting parts. An office system where staff members are free tochange desks at will was adopted for all board members and employees. Indeed,
the fact that seats were set up for only eighty percent of the workforce is anotable feature of this office building.

KurodaI imagine that making the decision to adopt this office system on such a large scale for a workforce of 1,400

employees was a truly bold one. Could you elaborate on the specific aims of this decision?

MiyakeIn a word, we aim to achieve the mobilization of information. We can break down our diet into cooking and eating

at home (naishoku), meals purchased in-store and taken home (chushoku), and eating out (gaishoku). The ability to
strike a proper balance among these different options is a competitive advantage uniquely associated with Kewpie.
Nevertheless, it is important that we focus on how each individual customer will choose to break down his or her dietinto the aforementioned categories, such that different sections should effectively use information in one another's
possession for this purpose. To illustrate, imagine that you somehow overhear snippets of a telephone conversation
being engaged in by a member of a different section. This in turn inspires discussions on a new idea. It is for thisreason that we insisted on certain size specifications for our tables. They are a superb size for getting peopleinterested enough in the conversations of nearby people to interject in those conversations in spite of themselves.
This use of real-time information is the essential objective of an office system where staff members are free tochange desks at will.

KurodaFor your efforts with respect to Sengawa Kewport, you were conferred the 2014 Ministry of Economy, Trade andIndustry Award, an award of the New Office Promotion Awards. I believe that you have greatly inspired othercompanies dealing with office-related challenges.

MiyakeWe wanted to change our work style with Sengawa Kewport. You firmly
grasped this concept and presented us with a proposal accordingly. In our caseas well, we are never clearly told by clients from the outset, “This is what wewant.” It is only when we set up a hypothesis and propose a solution that a client
will remark that it's not quite right, thereby sparking dialog in the right direction.
This is what we refer to as concept work. If we can understand what troubles aclient and what a client wishes to change and if we can work out a concept while
sharing difficulties, this process will surely be appreciated considerably by theclient.

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KOKUYO Group CSR Report 2015

Kuroda This is truly a discussion that is consistent with our own stance. When a new office building is being built for the
first time in twenty years, the person in charge will invariably prioritize budgetary considerations. However, themanager will seek to maximize the value of the office. It is our mission to generate a concept and value exceeding
the expectations of the manager while convincing the person in charge that “things are difficult because this has
never been done before” and that “there is no desire to proceed with difficulty”. We want our clients to understandthat our employees will even go with them to see the president of the company if need be. The value of an officebuilding varies for each company, such that it is no easy matter to identify the issues and establish a concept in eachcase. In your case, since you already had a clear concept in mind, there was considerable pressure on our project
members to exceed expectations.

The pursuit of excellence by way of sharing and acting on values makes it possible to take on
the challenge of finding solutions to problems.
Kuroda Kewpie's approach to manufacturing appears to be defined by a desire to take on challenges. What is yourmethod of human resources development that can support this approach?

MiyakeTaking on new challenges is the most difficult thing to do. We aim to create an organization in which eachindividual member thinks in a manner not constrained by the past. We encourage our employees to wonder why
something can't be done, to wonder why something has been done the way it has always been done, and tounderstand that there are no taboos for such inquiries. To this end, we value a climate in which emphasis is placedon what is right rather than who is right so that anyone can feel free to speak out. If someone is not convinced after
discussing something with his or her direct superior, our rules permit suggestions to be made to a higher-ranked
person. Although there are no taboos, you will be asked if you properly identified all the potential risks andconsidered them adequately. While the result might turn out to be some failures, is the more important thing is thatyou delve into the reasons for your success or failure and harness the results of this process for the future. Asking“why” five times and inquiring directly into the success or failure of an effort will yield the essence of what you arelooking for.

Kuroda It looks like you've stipulated clear rules designed to promote an organization whose members are encouraged
to think. At KOKUYO, we are also attempting to foster habits of thought and conduct based on an approach thatinvolves thinking about things to the limit of possibilities. The KOKUYO Creed as referred to earlier ends as follows:Integrity is not in words but in action. This is the KOKUYO creed. This can be further broken down as follows: (i) Act
with integrity, (ii) Take charge, and (iii) Pursuit of excellence. These were redefined two years ago through our Group
Code of Conduct. To act with integrity means to share the vision and seek true customer value. In contrast, it feels as
somehow we fall short of standards with respect to taking charge and pursuing excellence. To take charge means totake on challenges and grow with others. There is nothing to be gained by being self-satisfied with being the only one
to run a hundred meters in under ten seconds. It is important that every member of the team advances at the samepace. Pursuit of excellence means to pursue values to the limit and to go beyond expectations. However, there is nogoal line since the limit is constantly shifting. What is important is a stance of pursuit.

MiyakeCreativity and originality are also required to apply the philosophy of acompany to human resources. Many initiatives are undertaken here at Kewpie. In
this connection, we run an exciting program of awards, called Waku Waku, torecognize those who make improvement recommendations. A final-roundcompetition for finalists from different regions is held by our group. Last year, thisevent was held at Shibuya Public Hall and was attended by nearly 1,000
employees. Participants arrived from as far away as China and Vietnam anddelivered fantastic presentations based on our company creed and guiding
precepts in Japanese. I would like to value opportunities in such ways to share our happiness with employees.

12

KOKUYO Group CSR Report 2015

Kuroda It is a global awards program, I see. We've also established Like! Award, an awards program that inspires
reactions of excitement in people. Nominees put forth by employees are selected by a judging panel of members
who applied for. Ultimately, winners are decided by a vote of all employees. Not only do winners personally receive
recognition for themselves but they also get to share the honors conferred upon them with the value chains which
they are involved in, so that these value chains benefit from being associated with such reliable persons. Theseawards represent an excellent opportunity to fortify value chains of trust that are connected to customers. Designers
placed in charge of the Sengawa Kewport project were also awarded in recognition of their fine work.

MiyakeFor us as well, Sengawa Kewport was our first challenge in getting 1,400 workers gathered in a single location

where group management could be carried out. Based on this work style concept, we discussed various matters withyou. The resulting process constituted a wonderful experience as we look ahead to the centennial of our founding infour years and for ensuring the continuity of new growth. This is definitely due to the new chain of trust that we havedeveloped with you. We are truly grateful that you chose to take on challenges together with us. We would like tocontinue to be passionate about taking on challenges by always directly confronting the desires of and challenges
facing our clients and working with them together.

KurodaThank you very much. Thank you for allowing us to be involved in the development of the office building for

Kewpie, a company that is always taking on new challenges, while cherishing the philosophy that you share with us
and while exhaustively seeking out competitive advantages represented. It was a huge challenge and opportunity for
growth, both for the person in charge and for our company as a whole. While we intend to take on challenges with aneye to achieving new growth on the occasion of the 110th anniversary of our founding, we are committed tosupporting our clients through proposals for solutions that beyond expectations and to contributing to the evolution ofsociety by way of amassing a track record of successful proposals made along these lines.
Thank you very much for giving us so many valuable suggestions today.

13

KOKUYO Group CSR Report 2015

History of the KOKUYO Group for 110 Years
Evolution of the Campus notebook
Sales of stationery pad with highquality paperboard begin.

1932

Sales of Tube Files
begin.

Sales of Flat Files begin.

1983

1991

Sales of File Box - FS
begin.

Sales of Keshipita
begin.

1991

1927
1974

Sales of Pritt begin.

1956

1983

1965
Sales of Gavatte Files
begin.

Yao Plant is completed.
Introduced an automatedslip-production machine(Bielomatik).

Sales of Survey Field
Book begin.

1908

Third-generation
Campus notebooks
available

Sales of homecabinets begin.

1964
Production of Wacho(Japanese-style accountledgers) begins.

Second-generation
Campus notebooks
available

1975

Sales of Scrapbooks
begin.

1963

Domestic production ofledger paper begins.

First-generation Campus
notebooks available

Entered the album market.

Production of Western-styleaccount ledgers as off-the-shelfproducts begins.

1994
Sales of the Lonely
Little Fox (original
character) begin.

1970

Sales of Tube Files(PP) begin.

1961

KOKUYO Jewelry
Members is formed.

1913

1905

1968

1917

1957

Company is
KOKUYO trademark is adopted.
1914
founded. Production of vouchers begins.

1986

1976

1959

1953

Japan's first
forklift is
adopted.

National KOKUYO
Exclusive Retailers
Organization isformed.

1966
1961

Tokyo Showroom/KOKUYOHall are completed.

1982

1972

Yao Automated
Listed on the First Section
Rack Warehouse of both the Tokyo andis completed.
Osaka Stock Exchange.

New company building for the Tokyo Branch
Office is established (designed by Kenzō Tange).

1979

New company buildingin Shinagawa, Tokyo, iscompleted.
Mie Plant is completed.

1993

Shibayama Plant
is completed.

Furniture business is launched(sales of filing cabinets begin).

1994

Sales of desks and chairs
for students begin.

Sales of BioTech chairs
begin.

Creative collaboration
for Miss Blanche (Shiro
Kuramata
designs).

Sales of Dynafit chairs
begin.

1983

1988

1988

Sales of KuruKuru Meka
begin.

1960
Sales of steel desks
begin.

1975

Kashiwarashi Plant iscompleted (to facilitate
in-house production ofsteel products).

Sales of theater
chairs begin.

1979
1965
Sales of rotating
office chairs begin.

Sales of museum cases
begin.

1973

Sales of Beje
begin.

1981

1971
Construction materials
business is launched (sales ofoffice dividers begin).

Sales of the MX Desk Systems
begin.

1995

1988

1984
History of work-style proposals
Entire head office building isconverted into a showroom.

Office laboratory
opens.

Inaugural issue of
ECIFFO is launched.

The Kasumigaseki Office is opened

1969

1986

1988

1997

(non-territorial office concept is introduced).

Store business is launched(sales of supplies for storesand restaurants begin).

1966

1974

14

KOKUYO Group CSR Report 2015

Sales of will kits
begin.

Sales of Campus Junior Pencils
begin.
Sales of Harinacs Press
staplers begin.

2011
Fourth-generation
Campus notebooks
available

Fifth-generation
Campus notebooks
available

40th anniversary ofCampus notebooks

2009
Sales of Airofit scissors
begin.

Sales of CamiApp
products begin.

2014
2000

2011

Initiatives regarding
universal design arecommenced.

2009

2015
Sales of KAO
notebooks begin.

Sales of Dot Liners
begin.

Sales of Harinacs
staplers begin.

Sales of
Jibun-Techo
handbooks Sales of Karu-Cut
begin.
tape cutters begin.

2011

1998

Sales of Punyo
Punyo Pins begin.

2008

2005

2012

2009

2013

2000
Kaunet islaunched.

Sales of Kado-Keshi
erasers begin.

Sales of NeoCritz
cases begin.

Sales of ReEDEN
notebooks begin.

Stationery-related
business

KOKUYO Camlin isestablished.

Actus joins
KOKUYO Group.

2011

2006
2000

2006

2003

The Yui-no-Mori Projectis commenced.

KOKUYO K Heart isestablished.

2003

2002

Sales of SIMPLEX
begin.

2006

2005

KOKUYO DesignAward is launched.

2007

2008

2007

2012

Corporate logo isHeartland is established.
redesigned.
100th anniversary
2006of the company.
Vietnamese plant is completed.

Sales of EDIA
systems begin.
Sales of AGATA
chairs begin.

The KiSPA catalog
is inaugurated.

The Eco-Batsu mark iscommenced.

Shanghai plant for
producing notebooks
is completed.

Sales of nursing
carts begin.

2005
2001 Sales of WORKGATE

Sales of C Square units begin.

workstations begin.

1998

2003

2013

HARMONii work
stations unveiled at
Orgatec.

2008
Sales of FUBI furniture
made with timber fromforest thinning begin.

2010

Furniture-related
business

Sales of INSPINE
chairs begin.

2010

2000

2013

2015

Sales of Campus
Desks begin.

Mail-order andretail business

Sales of Madre lobby chairs for local
government reception areas begin.

2011

2009

Eco-Live Office
Shinagawa is opened.

The Worksite
Creative Lounge
The Shanghai
Laboratory is opened. MOV is opened. Showroom is opened.

The Umeda Live Office/Umeda Showroom areopened.

Shinagawa Live Office
SHIPP is opened.

2008

2012

2013

2014

15

KOKUYO Group CSR Report 2015

Highlights of 2014
June

January

Furniture business
Shopping Partner, a cart for use instores, is released.

Furniture businessCampus UP, a chair for active learning,
is released
Campus UP, a chair for active learning at university, isreleased. By supporting various postures and free bodily
movements in accordance with different learning scenarios,
this chair promotes a more dynamic approach to the processof learning.

Designed for customers of such as supermarkets, drugstores,
and other retail outlets and consisting of a light, compact cartwith a tight turning radius for use in stores, Shopping Partneris released.

CSR

IR

KOKUYO Product Shiga:
Cutting down reeds by Lake Biwa

A company information session andnotebook factory inspection tour is held
as IR activities for individual investors

Reeds are cut down in an organized fashion by a network
established in 2009 to protect Lake Biwa based on the use ofreeds with KOKUYO Product Shiga as the secretariat.

A company information session and notebook factoryinspection tour is held at KOKUYO Product Shiga for individual
investors residing in Shiga Prefecture for the purpose of
attracting enthusiastic shareholders (stable shareholders).

February

CSR

Stationery businessSelected as an excellent example of a
Discover Village Treasure

Beetle Tip Dual Color fluorescentmarkers are released

An agricultural business program for disabled persons
operated by Heartland is selected as a prime example of a
Discover Village Treasure ＊ .

Beetle Tip Dual Color fluorescent markers capable of marking
text in two different colors with the same tip are released.
Text can be rapidly and efficiently marked with different colors
according to need.

CSR

Furniture business

Held a team-strategy seminar for supporting the childrearing generation

Brackets Lite, a modular table, isreleased

A team strategy seminar for supporting the child-rearing
generation (“How to work in a way that increases teamstrengths as considered from the standpoint of superiors,
women, and men”) is held as an initiative for helping strike abalance between work and life.

Brackets Lite, a modular table developed in collaboration with design
office firm Nendo ＊ , is released. Placing them in various locations
could induce casual communications among workers in the office.
＊ A design office firm led by product designer Oki Sato.

Furniture businessMay

Special lecture delivered by Lynda
Gratton
FUTURE of WORK X WORKSIGHT LAB
seminar is held

Stationery business
Tape-cutter Karu-Cut (handy-type)is released

With a theme of future approaches to work, special seminar
FUTURE of WORK x WORKSIGHT LAB is held. A special lectureis delivered by Lynda Gratton, author of the bestseller Work
Shift.

July

Karu-Cut (handy-type), a tape cutter that cleanly cuts tapewith minimal effort, is released. The specially processed edge
reduces the amount of force required for tape cutting by
approximately 50 percent compared to the force required
using conventional tape cutters offered by KOKUYO.

Stationery business
Pen case NeoCritz is released
NeoCritz is a pen case of which over one million units wereshipped in fiscal year 2013. This product definitely meetsthe varied demands of our customers. We introduced new
patterns and added mini-versions of this popular product line.

Furniture business
Workstation series SAIBI
is released
Workstation series SAIBI is launched in pursuit of design
sensibilities and functionality appropriate for settings of finequality. This series will provide workers with a pleasant work
environment.

Stationery business

Received an award

Campus Loose-Leaf Case (30 sheets ofloose-leaf paper included), a case speciallydesigned to hold loose-leaf paper, isreleased

KOKUYO S&T is conferred an Invention
Award at a national invention awards
ceremony for its Harinacs technology
An Invention Award was conferred at the 2014 national
invention awards ceremony (hosted by the Japan Institute ofInvention and Innovation) ＊ for the invention of a staple-lesspaper-binding implement employing an H-shaped blade.

Campus Loose-Leaf Case (30 sheets of loose-leaf paper
included), a convenient case specially designed fortransporting loose-leaf paper, is released. Since it is a
polypropylene case that is more durable than a pouch forholding loose-leaf paper, its contents can be carried in a very
neat and tidy state.

＊ An award that is given to recognize exceptional, highly original inventions for the
purpose of helping improve Japanese science and technology and contributing to thegrowth of industry.

16

KOKUYO Group CSR Report 2015

November

July

Stationery business
Hosomi, a portable pair of scissors,
is released
Hosomi, a slim, portable pair of scissors whose long blades
make it possible to cut long straight lines, is released. A
uniquely shaped three-dimensional handle renders this item
both portable and practical.

Stationery business
For writing down and organizing
important matters four types of Daily
Records notebooks that belong to theLife Event Support Series are released
Four types of Daily Records notebooks that belong to theLife Event Support Series for writing down and organizing
important matters are released: Gift Records, Health Watch
Notebook, Travel Log, and Smart Money Management.

October

Received an award

Furniture business

KOKUYO S&T is conferred an honorablemention award at a regional invention
awards ceremony for its dot-liner
technology

Jakarta Live Office isinaugurated
The Jakarta Live Office is set up with the aim of acquiringdomestic demand for office furniture. Business targeting theIndonesian market is being developed.

An honorable-mention award ＊ is conferred on the company
at the 2014 Kinki invention awards ceremony (held by theJapan Institute of Invention and Innovation) for our patterncoated pressure-sensitive transcription-type adhesive tape.

Received awards＊ : Conferred in recognition of significant contributions made to improving Japanesescience and technology and promoting Japanese industry through the completion ofa superior invention.

2014 Good Design Awards won by three
KOKUYO Group products

December

The 2014 Good Design Awards heldby the Japan Instituteof Design Promotion are given to three KOKUYO Group
products: Jibun_Techo (2015), Yokumieiru (white board
markers), and Scirocco (office chair).

Stationery business
Harinacs Press, a staple-less paper-binding
implement, is released
Harinacs Press, a staple-less paper-binding implement thatworks without opening holes in the paper as the latest
addition to the Harinacs line, is released. Using a new presslocking system, this product can firmly bind together up up to
five sheets of paper.

Furniture business
KOKUYO Kitakanto Sales
Tochigi Live Office is inaugurated
We propose that corporate competitiveness will be elevatedby having concentration, interactions, and cooperation
repeatedly undertaken and by promoting the cultivation ofautonomy and co-existence at a workplace emphasizing the
3Cs—communication, concentration, and collaboration.

CSR
The company joins the Ikuboss Alliance

The company joins the Ikuboss Alliance, a network ofcompanies that seeks to proactively reform the thinkingof their own managers in an age in which employees areundergoing diversification and to cultivate ideal superiors forthis new age (iku-bosses).

Furniture businessParticipated in
Orgatec 2014

The company participates in Orgatec 2014, an international
office furniture trade fair (Cologne International Office
Furniture Trade Fair). In our booth designed by design officefirm Nendo, our latest office furniture is displayed in an
original exhibition setting not bounded by conventional officeconcepts.

Furniture business
Office chair Bezel isreleased
Bezel, an office chair that supports the posture and enhances
the beauty of the space that it occupies, is released. This
product was developed with a focus on variations in the
posture that occur when a user sits down in this changing IT
environment in which workers perform their duties.

CSR
Winning products for KOKUYO DesignAward 2014 are determined
KOKUYO Design Award 2014, a competition organized
to encourage a wide range of general users to submit
superior product designs of the sort that could only havebeen conceived by users with the aim of getting themcommercialized, is held. Five winning products, including
grand prize winner Sukeru Hasami, are chosen.

Topic of focus
Shinagawa Live Office (SHIPP) is opened
With an office concept based on Shinagawa Practical Place (SHIPP), theShinagawa Live Office underwent renovations. SHIPP encourages employees
to take on the challenge of reforming their own approach to work and also
welcomes clients to observe new approaches to work in real time. The entire
floor can be likened to a ship being dispatched to sea according to the themeof an office where employees grow by continuing to take on challenges
in a practical setting. This office shall be harnessed as an opportunity foramassing experience and know-how andfor comprehensively proposing officespace that supports the grow th andexpansion of client companies.

IR
IR activities are carried out in
Singapore

In order to convey KOKUYO’s strategies to overseas
investors and enable management to receive feedback fromthese investors, IR activities are carried out in Singapore. By
proactively transmitting and collecting information to andfrom overseas investors, we will continue to increase thecorporate value of KOKUYO.

17KOKUYO Group CSR Report 2015

Key Non-financial Data

Employees
History ofhiring disabled persons

75

Customers

years

Campus notebooks
released40

In 1940, we began hiring deaf people at our head
office factory. At present, we provide various duties
and various approaches to work to employees
according to the characteristics of their disability
at special subsidiaries (KOKUYO K Heart and
KOKUYO Heartland). Disabled employees
account for 2.14 percent of theworkforce of the KOKUYOGroup (as of January
Customers2015).

thanniversary
Since Campus notebooks were released in 1975, wehave sold more than 2.7 billion units in total; 2015
marks the fortieth anniversary of the launch of thisproduct. To mark this achievement, we havedesignated this year as Happy Campus Year!
Various projects will be unveiled andimplemented accordingly.

Number of officeconstruction projects

25,000Over
Customers
Customer feedback

Approximately

110,000

Society

In fiscal year 2014, we provided support for over
25,000 office construction projects in the spanof a year. We will continue to propose spacedesign and new approaches to work inline with the strategies of clientcompanies and the attributesof their facilities.

Our customer service office received approximately
110,000 comments from customers in 2014.
Inquiries and requests are shared with all Group
employees through our intranet network tofacilitate efforts to develop new products
and services and improve existingones by taking each customer’s
opinions into account.

Yui-no-Mori:aggregate area
thus far subjected to tree thinning

1,135

ha

(approximately equal to 295 times the area of Koshien
Stadium; calculated on the assumption that Koshien
Stadium sits on approximately 38,500 square meters of land)
Based in Shimanto-cho, Kochi Prefecture, and undertakenwith the aim of regenerating a planted forest and revitalizing
the community that seeks to protect this forest, the KOKUYO
Shimanto Yui-no-Mori Project marked its ninth year ofoperation in 2014. This project encompasses approximately
4,900 hectares of land, and the aggregate area of thisforest subjected to tree thinning has been increased
to 1,135 hectares, such that the amount ofcarbon dioxide absorbed by this forest hasreached 5,275 tons.

14,000Over(aggregate over 12 years)

comments

Environment

Number of submissions for the
KOKUYO Design Awards up to 2014

Business connections
Number of vendors
utilizing our catalog

By soliciting a broad range of designs from the perspectiveof customers, KOKUYO Design Award are organized withthe aim of enhancing the design capabilities of not just
KOKUYO itself but also Japan. In fiscal year 2014,
the twelfth year of this event was held. The
recognition of this award as a valued gateway
to success for young designers is risingwith each passing year.

140

Approximately％
vendors using our catalog
comparing to the previous year
We published the KiSPA Catalog, which carried
approximately 21,000 new products and standard
articles offered by approximately 450 companies
consisting of stationery manufacturers and otheroffice appliance suppliers.
The number of vendors utilizing the KiSPA
Catalog increased from around 1,500 in
fiscal year 2013 to approximately
2,000 in fiscal year 2014.

Environment
Eco-Batsu mark0

% for six years

KOKUYO Group undertook an initiative to post an
Eco-Batsu mark for KOKUYO products that are
insufficiently friendly to the environment andbring the number of products with Eco-Batsu
mark down to zero in three years. Since wepublished our 2010 General Catalog, wehave managed to maintain an ongoingstreak of zero Eco-Batsu marks
for six years.

18

Corporate governance
Percentage ofoutside directors

37.5

%

Our board of directors consists of eight members,
three of whom are outside directors. Since
2010, KOKUYO has been engaged in efforts
to reform its corporate governance and has
been endeavoring to improve thetransparency and fairness of its
management at all times.

KOKUYO Group CSR Report 2015

Key Financial Data
Key Financial Data
(Consolidated)

December

December

December

December

December

2010

2011

2012

2013

2014

Sales (Millions of yen)

261,873

260,004

275,821288,083

293,054

3,282

4,072

4,852

6,426

7,598

1.3

1.6

1.8

2.2

2.6

3,324

4,098

6,142

8,276

9,643

Net Income (Millions of yen)815

-5,460

2,428

4,804

5,065

Total Assets (Millions of yen)

252,879

252,794

258,461

270,738

273,772

Net Assets (Millions of yen)

156,632

149,581

153,069

165,656

170,352

Earnings per Share (yen)6.89-46.16

20.53

40.62

42.83

Dividend per Share (yen)

15.0

15.0

15.0

15.0

15.0

0.5

-3.6

1.6

3.1

3.1

61.7

58.3

58.3

60.4

61.5

293,054

Sales Composition (Consolidated)

Operating Income (Millions of yen)
Operating Income (%)
Ordinary Income (Millions of yen)

Other Financial Index
Return on Equity (ROE) (%)
Equity Ratio (%)

Sales and Operating Income Ratio(Millions of yen)（%）

300,000

3.0

2.2%

290,000
280,000

1.3%

270,000
260,000

261,873

1.6%
260,004

1.8%
275,8212.6%

288,083

Sales

December

2011

December2012

December

2013

8,000

Retail andmail-order business

33.7%

2014

* Sales composition is calculated based on the sales to customers.

3.1%

1.6%
0.5%

2,428

（%）

280,000

70.0

3.0
270,000

2.0

58.3%
252,879

250,000-2.0-6,000270,73861.7%

260,000

-1.0

-3.6%

-4,000(Millions of yen)

4.0

0

4,804

273,772（%）

1.0-5,460815

Total Assets and Equity Ratio

5,065

3.1%

6,000

-8,000

million yen

December(Millions of yen)

-2,000293,054

Operating Income on Sales

Net Income and Return on Equity (ROE)

0

Sales in FY 2014

0

2010

2,000

2.0

0.5

December

4,000

26.0%

2.5

1.0

240,000

40.3%

Stationery business

1.5

250,000

Furniture business

252,794

58.3%

60.4%

61.5%

65.0

60.0

258,46155.0-3.0
December2010
Net Income

December

2011

December2012

December

2013

December

240,000

-4.0

2014

December

2010
Total Assets

Return on Equity (ROE)

19

December

2011

December2012

December

2013

December

50.0

2014

Equity Ratio

KOKUYO Group CSR Report 2015

SpecialfeatureRefine value for Learners
and Workers
FURNITURE

When sitting When sitting(S-shaped form)(arched form)

When sitti(arched fo

History of KOKUYO office chairs

Of fice chairs have evolved in line withchanges in tools and changes in posture.
We developed these rotating chairs for the
next generation of users to accommodate
sitting postures that differ from previous
ones, through complex actions,.

INSPINE

When sitting(S-shaped form)

01

Office chair

Evolution of
INSPINE and Bezel

FURNITURE

KOKUYO office chairs evolved through the constant pursuit of optimal functions designed toaccommodate new postures and new tools in conjunction with the approach to work undertaken
by office workers.
During thisperiod of higheconomic
growth, workers’
duties primarily
involved writingby hand.

The advent of the 1980s
saw the rise of officeautomation. Because
workers spent more
and more time at their
computers, they spent
longer hours in a seatedposition.

1966

1980-1985

In the second halfof the 1980s, thedesire to improve theoffice environment
increased. With theaim of raising thelevel of employee
motivation, officechairs also evolved.

1986-2000

Bezel
CR-1

Biotech chair

Dynafit chair

Our first rotating office chair,built to match a steel deskthat we had released the year
before. This chair represents theprogenitor of all sorts of chairs
being developed and sold by
KOKUYO today.

Based on the results of research
into human engineering, thischair was developed for theJapanese office environment
and the physique of Japanesepeople. Innovations to prevent
fatigue caused by long hoursof use have been incorporated
throughout this chair.

Using molded urethane derived
according to the study of humanengineering, innovations wereincorporated into the surface
contours of the back and seat
to make cushions that fit thehuman body better.

Refining value with three innovative
features

Refining the value of the back of the chair

The INSPINE and Bezel office chairs were developed with a focus on
Innovations to encourage the user to approximate
the sitting postures of office chair users. Sitting with an S-shaped backthe natural S-shaped posturethat somewhat approximates a standing posture is good. However,
The human backbone
a look around any office will reveal that many people sit with afundamentally traces an S-shaped
stooped or slouching posture. With the desire to solve this problem,
curve. When you sit down, this
we began to observe, analyze, and generate ideas. We determined
S-shaped form breaks down andthe lower back and other parts ofthat some of the most prominent causes of slouching are as follows:
the body come under strain. The
a downward-gazing posture due to the increased use of laptop
back of each KOKUYO chair has
computers; the tendency to place one’s elbows and arms on the
been functionally made to support
desk when operating mobile tools, taking memos, and multitasking in
the posture of the user in order toother ways; and the tendency to sit apart from the desk because theproperly maintain this S-shaped
armrests get in the way.
When sitting When sitting
When sitting Whensittingform.
(S-shaped form)(S-shaped form)

In order to resolvethese issues, thedevelopment teamdefined their productconcept in terms of achair for those who
use the latest tools
and whose approach
to work is cutting edge
and proceeded tofocus on adjusting theseat angle, providing
lumbar support, andenabling moveable
armrests suitable
for today’s work
environment.

Wired lumbar support(Left) Yasutaka Takahashi(Right) Kazuo Oku
Chair Products Department,
MONOZUKURI Division,
KOKUYO Furniture Co., Ltd.

20

KOKUYO Group CSR Report 2015(arched form) (arched form)

A single wire is stretched across theback of each INSPINE chair. This wire
can be freely adjusted according tochanges in the curvature of the spineand changes in the posture of theuser. By having this wired lumbar partprovide support for the body as if itwere an integrated surface, support
will definitely be provided for the
lower back while the mesh-coveredback of the chair offers an extremely
comfortable sitting experience.

INSPINE

Te n s i o n - a dj u s t m e n t g r i p a n dinternal wired structure

When force is applied on the upperside

When force is applied on the lowerside

FURNITURE

When sitting(S-shaped form)

When sittingWhen sitting(S-shaped form)(arched form)

In the first half of the first
decade of the new century,
the growing popularity of theInternet meant that workers
were spending even moretime at their computers. Theirseating posture also changed,
such that the angle at which
they tilted their seats increased.
The need for a headrest to
support the head when the user
leaned backwards and movablearmrests to support the working
posture also arose.

When
When sitting
sitting(S-shaped(arched form)
form)

When sitting(arched form)

In the second decade of thiscentury, the rise of tablets
and other mobile terminals
led to even more time spent
by workers assuming adownward-gazing posture.
The compound use ofdevices has also given rise
to a greater diversity of
postures.

In the second half ofthe first decade of the
new century, notebook
computers became amainstream device inthe office. The amountof time spent by workers
assuming a postureof gazing downwards
increased.

2000-2005

2006-20102010 to present

When sitting
When sitting(S-shaped form)(S-shaped form)

AGATA/A

FOSTER
When sittingMore and more chairs thatare designed to allow manualadjustments of numerous
parts according to the shapeand desires of the individual
emerged. Chairs belonging to
the AGATA series were releasedby KOKUYO as one of the firstexamples of this trend.

Rather than make adjustments
to accommodate body
movements, we adopted a
3D-fitted structure to conformto the movements of the body.
By designing the back partof the chair to move in three
dimensions, we achieved aflexible fit for users.

(S-shaped form)

Refining the value of the seat

When sitting(arched form)

When sitting
When sitting(arched form)(arched form)

INSPINE

Bezel

With a focus on changes in the
IT environment where workers
operate and on changes in theapproach to work and posture
attributed to these changes, wedeveloped this product based on
the concept of a chair for those
who use the latest tools and whose
approach to work is cutting edge.

This chair incorporates avariety of different posturesupport features designed toaccommodate variable seating
postures in line with approaches
to work and tools that are
diversifying and becoming evermore complex.

Refining the value of movable armrests

Innovations for dispersing body pressure

Innovations to support diversifying work postures

Since workers tend to assume aforward-leaning posture when theirwork involves the use of tablets andother such devices, the opening
angle between the spine and thefemurs narrows, which makes it
difficult to maintain an S-shaped
form. With a KOKUYO chair, theseat leans forward, thereby opening
and expanding the angle between
the back and the seat. This featureprovides forward-leaning support
that renders it easier to maintain an
S-shaped form.

Forward-leaning posture
supportINSPINE

With the INSPINE and Bezel
chairs, the seat leans forward,
thereby opening and expanding
the angle
the back
hen sittingWhensitting between
When sitting
When sitting
haped form) (S-shapedform)
a n d t hform)e s e a t , (archedl e s s e nform)i n g t h(archedestress placed on the femurs, anddispersing the body pressure.
Abdominal constriction is also
eased.

Bezel

Postures while performing duties
are diversifying and now include
a downward-facing posturebrought on by work involving theuse of laptop computers and theplacement of elbows and arms
on desks to operate mobile tools,
take memos, and multitask in otherways. We focused on movablearmrests to support a diverse rangeof work postures.

Crank-sliding armrests

Bezel

We added the ability to slide
the armrests back significantly
in order to enable them to be
moved to positions proximate to
the body regardless of whether
the user is assuming a rearleaning posture or a forwardleaning posture. A mechanism formoving armrests smoothly rather
than in increments and armreststhat are angled allow changes
in work posture to be flexibly
accommodated.

KOKUYO Group CSR Report 201521

SpecialfeatureRefine value for Learners
and Workers
FURNITURE

FURNITURE

02

History of KOKUYO Active Learning

Chairs for active learning

The evolution ofCampus UP

KOKUYO has been involved in constructing settings and engaging in research from the earliest daysof the active learning movement. Based on this track record and the results that have been achieved,
we continue to propose and construct settings suitably tailored to each university.

These days, universities are being
challenged to cultivate students with theknowledge and skills required by society.
Active learning has garnered attention as
one of the solutions to this issue. Campus
UP was developed to target settings inwhich active learning is practiced.

2008

2010

2011

LaunchResearch

Deployment

Komaba Active Learning Studio(KALS) was established at
the University of Tokyo. The
University thus constructed thearchetype of active learning
studios.

Settings for learning are jointly
researched at the University ofTokyo’s Fukutake Hall (Information
Studies), an active learning site.
Settings for Learning Will Change
Universities is published as a resultof this research.

Based on the results of research,
Kyushu Institute of Technology,
University Consortium Ishikawa,
Taishō University, and others
deploy active learning.

Refining value through collaborations
In order to produce a chair that enables more in-depth studying by students, we harnessed the expertise of university educators, outside
designers, and our own engineers for the manufacturing process.

Universities + Creators + KOKUYO
Refining value through observations
Delving into the essence of things through overall
observations

Visualizing ideas with quick-and-easy prototyping

In order to identify active learning issues,
we thoroughly observed the settings forlearning. Through this process, we tookapproximately 2,000 photographs andhold discussions among members todetermine the essence of active learningfrom the extensive depictions shown inthese photographs. We also invited outside
experts to join us in carrying out thisprocess of observation.

Using tags, disposable chopsticks, andother materials that one can find lying
around, we created simple prototypes
to visualize ideas. After rendering theconceived ideas into tangible items, wewere able to engage in discussions. If we
encountered difficulties, we simply built
another prototype. As we repeated thisprocess over and over again, we finallyarrived at a point when every member of
the team exclaimed, “This is it!”Supporting active learning morethrough 12 typical postures
We focused on the fact that students assume a wide variety
of different postures, which makes their study process
more animated. Such postures were compiled into acollection we like to call the “12 typical postures.” Active
learning can be promoted by supporting free postures andbodily movements on the part of students during lectures,practical lessons, discussions, group activities, and othersuch active learning scenarios.

22

Refining value through prototypes

KOKUYO Group CSR Report 2015

(From left upper section)Move, look down, write,
sit, approach, twist(From left bottom section)
Stretch, lean forward,
rotate, recline, lean
forward more, draw closeFURNITURE

What is active learning?
2012

In contrast to mass lectures delivered in a unidirectionalmanner by instructors, active learning is a classroom stylethat incorporates the active participation of students.
Given topics are discussed in groups and materials aregathered and presented accordingly. By having students
experience these problem-solving approaches to learning,
more in-depth learning by students is promoted. Active
learning is linked to the cultivation of individuals capableof playing active roles in society.

Present

Integration

Popularize

The University of Tokyo’s 21 Komaba
Center for Educational Excellence (21
KOMCEE) is completed as an ideal
education center that fully integrates
the concept of active learning. Thisestablished the standard for Japanesestyle active learning studios.

Wayo Women’s University,
International Christian
University, and numerous
other universities adopt active
learning.

Campus UP x Waseda University's Kawai Laboratory

Developer's column

Refining value through the verification of effects

Innovations to support
diversifying work postures

Innovations to suppor t diversif ying work
postures
We verified the effects obtained through the use of Campus
UP during active learning periods with the full cooperation of
Waseda University’s Kawai Laboratory.

Through a considerable number ofobservations, we once again recognized theimportance—along with realizing functional
elements for supporting free bodily
movements—of incorporating into thedesign of each chair consideration of thestate of mind of students while studying.
While this refers in part to the question of
how the form and color of the chair canevoke a sense of fun and novelty, we also
wanted to produce something that would
give rise to expectations that “something
new is about to happen” in students at
the moment they enter
the classroom and evena slight residual sense of
strangeness or discomfort.

We learned that the brain is stimulated when an individual isactively learning.
Verified effect 1
Cerebral blood flow andheartbeats are stimulated incommunication scenarios during
active learning.

Verified effect 2
Compared to other chairs
designed for active learning,
Campus UP naturally induces
communication scenarios that
promote stimulation.

Hiroshi Tokuyama

75.4

Campus UP
Chair A

68.4

Chair B

68.4
0＊

Education-related Department,
TCM Value Unit,
KOKUYO Furniture Co., Ltd.

＊

50

100
(Unit: %)Scenarios involving solitary thinking
Communication scenarios＊ p<0.05

KOKUYO Group CSR Report 201523

Refine value for Learners
and Workers

SpecialfeatureSTATIONERYSTATIONERY

01

Staple-less paper-binding
implements

The evolution ofHarinacs Press

First released in 2009, the Harinacs seriesc o n s i s t s o f p ro d u c t s t h a t b i n d p a p e r
together without metal staples or otherco n su m a b les . D o m es t i c a n d ove rs ea s
users have responded incredibly positively
to these products for making it possible
to streamline work in anenvironmentally friendly
and safe manner.

History of staple-less paper-binding implements

These implements initially consisted of large two-hole type implements before evolving over timein response to customer demands being operated with one hand and binding more sheets of paper
together. The Harinacs Press emerged out of efforts to accommodate a desire for binding paper
together without opening any holes at all.

Desktop type(binds up to 10 sheets with 2 holes)
2009

Harinacs Press

2010

Handy type(binds up to 4 sheets)

Value added to settings forwork and study

Value

1

Value

2

Value

3

24

2011

Handy type(binds up to 8 sheets)

In the food industry,
pharmaceutical industry

Prevent contamination by foreign
substances

One of the most important issues faced by customers in thefood or pharmaceutical industry is the need to implement
measures to deal with the risk of contamination by foreign
substances. Harinacs provides significant value on this issue.

Prevent injuries caused by accidental
ingestion of staples

In the education sector,
welfare sector

Imagine a crawling infant at a daycare discovering a staple
on the floor without being noticed by attendants. The childmight proceed to put the staple into mouth with an intentionof swallowing it. Harinacs can prevent such incidents andeliminate one worry of child-care workers.

Enriches creative activities

By using Harinacs in paper handiwork for which tape andglue are used traditionally, users can enjoy making works
that differ from what they created before. Since staples are
not used, Harinacs can be safely used even in a family withsmall children.

KOKUYO Group CSR Report 2015

Enriches creative activities

STATIONERYWe
res achiep
cus onse vedtom
to evolu
feeers
db tion i
!
ack
n
fro
m

Desktop type(binds up to 12 sheets)

Toshiko Yamada

Press type(binds up to 5 sheets)

Development Innovations Department,
Stationery Products Division,
KOKUYO S&T Co., Ltd.

2012

Harinacs Press

2013

Compact(binds up to 5 sheets)

2014
Feature 1

Feature 2

Firmly binds sheets ofpaper without opening
holes.

Just rub to release thebinding effect.

Development point

The person in chargeof developing Harinacs
Press spoke to us about
the process of refining
value.

2

Prototyped more than 50 patterns
and 200 individual samples ofbinding teeth
The binding teeth were also an ongoingsource of difficulties. This is because wewere forced to formulate a method forevaluating the binding force between sheetsof paper and otherwise create assessment
standards with no precedent. One of thecharacteristics of the Harinacs Press is its

1

Generates force that is 30 times
or much greater than the gripping
force applied to this productWe began development with the aim ofgenerating a force twenty times or muchgreater than the gripping force that would
be applied with the handy-sized version ofthis product but found it rather difficult toachieve the targeted output values. Throughan unrelenting process of trial
and error, we ultimately
managed to enable aforce generated thirty
times or much greaterthan the gripping force.

Not bulky.

(Approximately 60 percent
thinner than paper bound withconventional staplers.)

Handy type(binds up to 10 sheets)

Process for generating value

Development point

Feature 3

ability to demonstrate holding power witha small, inconspicuous binding component.
To this end, we researched the binding force
between sheets of paper, the form and size ofthe binding component, and other aspects ofthe product. In order to improve performance,
we tried out one research-based tooth pattern
after another. Over fifty such patterns were
examined.

Development point

3

Trial and error in increments of 0.1
millimeters
Despite nearing completion of the teeth andthe main body, there was a time when wejust could not bind paper effectively whenputting these components together. Since it
was not possible to ascertain the causes ofthese difficulties immediately, we set about
pinpointing the causes by making adjustments
to the size specifications of parts and theirpositioning in increments of 0.1 millimeters.
We were unable to tell whether we managed
to bind sheets of paper together effectively
or not simply by looking. In addition, most of
the research and development work we were
doing involved an ongoing process of trial anderror whereby one hypothesis after anotherwould be formulated and subject to testing.

Sō Hasegawa(in charge of the development of the main unit)

Creative Stationery Products Development Value Unit,
Creative Products Division,
KOKUYO S&T Co., Ltd.

KOKUYO Group CSR Report 201525

SpecialfeatureRefine value for Learners
and Workers
STATIONERY

02

Tape cutter

The evolution of
Karu-CutSTATIONERY

Tape cutter is a product that is daily used
for such purposes as packaging items andsealing envelopes without much thought.
We developed Karu - Cut, a product for
which we focused on the ability to cut tapecleanly in response to customer feedback.

History of Karu-Cut

The development of Karu-Cut began with the pursuit of easy cutting as a basic function. We are
currently expanding our lineup of Karu-Cut offerings in response to the positive feedback andrequests received from our customers.

Development
commenced

Released a KOKUYO
tape cutter

1972

2010

Is it true that conventional tapecutters don't actually cut tape?

i-i-p…

R-i-i-i-Conventional
tape cutter

Tape cutters are literally an implement for cutting tape.
Conventional tape cutters, however, are not necessarily
outfitted with a sharp blade. Rather than saying that such
implements cut tape, it would be more accurate to say that How
the tape is torn
引き裂くきっかけ
they lacerate tape when the tape is pushed down on theserrated blade edge.
Thus, it is unsurprising that the cut is neither clean nor easy.
One of the top responses put forth in a survey of users who
use tape cutters frequently every day revealed a level ofA look at the
dissatisfaction with the quality of the blade.
刃を上から見たイメージ
blade from above

Close-up
look
刃のアップイメージat the blade

Value added to settings forwork and study

Value

1

Value

2

Value

3

26

Can cut well with little force
Karu-Cut’s specially processed blade has raised
and recessed parts of the blade that are fully
sharpened. By cutting rather than ripping tapes,
50 percent less force is needed to cut tape(compared to conventional tape cutters made by
KOKUYO).

Cut straight and peel easily
With conventional tape cutters, the serrate edgeof a cut piece of tape corresponds precisely to theblade of the product. With the blade attached toKaru-Cut tape cutters that it meets the tape ata perpendicular angle, the edge of a cut piece oftape is straight, which in turn means that the tapeis less likely to be split when peeling off.

Cut various types of tape
Regardless of the type of tape in use, it only takes
a light touch to cut a piece off. Karu-Cut offers
great value since you can cut different kinds oftape with just this one item!

KOKUYO Group CSR Report 2015

Comparison of
the force needed
to cut tape

50 % reduction !

For children who
enjoy making crafts(compared to conventional
tape cutters made by KOKUYO)

Conventional
tape cutters

Karu-CutComparing the edges of cut
pieces of tape
Conventional
tape cutters

For store cashiers
and other workers

Karu-Cut

ALL OK !
Masking Cellophane Polypropylene Mending
tape
tape
tape
tape

For all sorts ofcreators

STATIONERY

Ou

r lin

ReleasedKaru-Cut

Released Karu-Cut(handy type)

December
2013

May
2014

eup

is e

xpa

ndi

ng!

November2014
Slash!

We thoroughly focused on thefunctional value of cutting tape easily.

When we conducted an analysis of competitors with regard
to tape cutters, we understood that there were no productson the market that offered the most basic of functions
expected of tape cutters: easy-cutting blades. Blades on
裂くきっかけconventional tape cutters are made simply by pressing the刃required shaped out of a metal sheet, such that the blade Blade
刃edge is obtuse-angled. The blade for Karu-Cut is made Blade刃by etching, a technique used often for semiconductors Bladeand other precision equipment. The metal is subject tocorrosion
with a chemical agent to create the desired form
刃を上から見たイメージ
which is a sharp blade.

Developing a varied lineup in
response to customer feedback

Blade
刃 刃
Blade
刃

A look at theblade from above

刃を上から見たイメージ

Close-up look
刃のアップイメージ

アップイメージat the blade

A mounted product offering a clean cut never seen before
in tape cutters was finally released in winter 2013. It turned
out to be considerably noticeable. Requests for handy-type
tape cutters for personal use and coupled-type tape cutterswere subsequently fielded from many distributors attending
exhibitions and trade fairs. These desired products werethen commercialized. Our handy-type tape cutters are used
for children’s crafts and our coupled-type tape cutters
are used by cashiers who need to use different types oftape as part of their duties. These are some of the many
examples by which the value of these products is being
demonstrated.

A look at a blade from the side
ApproxTape

Development point

2

0.2
mm

Blade

Process for generating value
The person in charge ofdeveloping Karu-Cut
spoke to us about theprocess ofrefining value.

Released Karu-Cut(coupled type)

Ayumi Nishimura

Market Creation Department,
Storefront Marketing Division,
KOKUYO S&T Co., Ltd.

Don’t cut fingers!
Safe design

The more the blade cuts well, the higher therisk that users get cut will be. To inhibit cutting
fingers even when the hand is put at the blade
and thereby to make this product safer, we
adjusted the height of the blade to less thanDevelopment point

1

Achieving an amazing cut!
Etching
Etching refers to a processing technique forcreating a form by corroding metal with achemical agent. The parts of the metal thatyou do not want to corrode are masked. By
gradually corroding the rest of the metal, ablade with a sharp-edged finish can be created.

about 0.2 millimeters, which is the approximate
thickness of the skin covering the human finger.

Development point

3

Inspired by train hanging straps?
Pursued an easy-to-grip design
When designing this handy type, we focusedon achieving an easy-to-grip structure.. So
we tried to seek inspiration in things that we
grasp all the time without feeling any senseof discomfort. What came to mind were thehanging straps which typically set in a train. I
believe that this focus allowed us to recreate
the ease with which we can grip something thatis familiar to everyone.

Taichi Honda

Stationery Products Development Core Unit 1,
Stationery Products Division,
KOKUYO S&T Co., Ltd.

KOKUYO Group CSR Report 201527

SpecialfeatureRefine value for Learners
and Workers

KaunetKaunet is involved in the distribution trade for the office mail-order business, an area withwhich the KOKUYO Group has not dealt in the past. This involvement has allowed thecompany to mark its fifteenth year of operations. In addition to sharing our Group philosophyof enriching the world through our products, Kaunet believes in enriching customers bythinking about things from their perspective. As a distributor, the company conscientiously
strives to see the world through the eyes of its customers.
As a guideline for action, a vision for inspiring in a way that goes beyond making customers
happy and for evolving into an inspirationally creative company has also been put forth.
Kaunet adopted a thorough strategy of differentiation along with its vision of evolving into
an“inspirationally creative company”. The company continues to provide customers with“inspiration”by identifying potential difficulties unnoticed by customers and presenting waysof solving these difficulties.

The value of deliveries by Kaunet
1

Delivering everything needed for those whowork and for work settings
When hearing “office supply mail-order business”, mostpeople probably think of stationery products and copierpaper. Yet, the products and services handled by Kaunet
include toilet paper and other daily commodities; mineralwater and other foodstuffs and beverages; electricalappliances; gift items; medical supplies; supplies for store
operations; business cards, stamps, and other customordered items; office furniture; and a vast array of otheritems required for settings in which customers engage in
work.

2

Stationery andoffice supplies

Business cards, stamps, and othercustom-ordered items

Heavy or bulky daily commodities

Required items are promptly delivered on a
one-stop basis
Free shipping for orders of 1,000 yen(tax included) and above

Deliver to anywhere within Japan! (*)

Order via theInternet or fax.
Orders in
the same-day

Provide same-day
or next-day delivery

Additional orders canalso be free shipped

Same-day delivery area:
Same-day delivery for orders submitted by 11:00!
Next-day delivery area:
Next-day delivery for orders submitted by 18:00!

Free return service“I ordered the wrong thing…”“What arrived is not what I was expecting to receive.”

Don’t worry!

(*)Okinawa and remote islands are excluded from the scope of delivery.

Return or exchange(*) Please note that returns may not be accepted in some cases.

Value provided by Kaunet:“Facilitation of choices”and“Awareness”
Kaunet is engaged in creating new unique forms of value that are not simply represented by the low prices and extensive selection of
items conventionally provided by mail-order office suppliers. By providing“facilitating choices”as customers select products and providing“awareness”tied to solutions to dissatisfaction and difficulties affecting customers, the company aims to have its products and services
keeping selected by customers.

Thoroughly“facilitating choices”: providing value through both catalog and website
A catalog that facilitates choices by making product2 company's website

1) Select products as if you are
actually having them in your hand

1) Videos to show the instructions of
products and other facts

Even the items such as files that actuallyl a rge r t h a n t h e c at alo g i n size, t h eposting of a full-scale photograph of thespine parts lets customers make theirselection while comparing the actual
size to the actual item.

28

Taking maximum advantage of the salient features of the

1 attributes instantly discernible

KOKUYO Group CSR Report 20152) Easy to compare products
according to the measuresinvented by Kaunet
For example, a tasting chart forevaluating tea acco rding to four
different factors is presented to allow
customers to choose based on personal
preferences.

T h e co m p a ny a i m s to a l l ow cu s to m e rs
to have a simulated experience of using
products through watching videos in lieu ofactually examining these products in person.

2) Six sub-images posted for each product
Usage instructions and product images incorporatingo ri g i n a l s t a n d a rd s h a v e b e e n re - e d i te d fo r t h ecompany's website.

kaunetGranting“awareness”to customers: a unique program operated through Kaucore (Private brand)
In 2013, Kaunet launched Kaucore, a new brand under which it intended to sell private brand products.
Kaunet's private brand products had existed since the inaugural issue of the company's catalog in 2000. Two
sub-brands was set up to clarify the direction in which these private brand products were to be taken when
the Kaucore brand was established: Kaucore Price, consisting of products providing reassuring quality at
low prices; and Kaucore Premium, consisting of value-added products incorporating Kaunet's own ideas forresolving any tangible dissatisfaction and potential difficulties of customers.
Yasuhiro Kametsuru When we examine the market, we find that there are problem-solving products offered in B to C market but
Marketing Planningvery few such products in B to B market. Kaunet thoroughly focuses on resolving operational issues in the& Development 1
work setting and will continue to provide unique products not available elsewhere, the aim of which is that
Department,
KAUNET Co., Ltd.
customers will gladly use Kaunet to purchase products that cannot be acquired from any other vendor.

1

Kaucore Premium, a brand thoroughlyrooted in customers
Kaucore Premium consist s of value -added
products incorporating Kaunet 's own ideas
for resolving the tangible dissatisfaction andpotential difficulties of customers. The company
looks at the results of surveys included with its
catalog and administers individual surveys using
Kaunet Monika (a monitoring organization withapproximately 8,100 registered members) for actual interviews withclients. In order to ascertain real on-site difficulties, importance is ofcourse attached to the results of quantitative survey-based analyses
and to the free-descriptive opinions provided through surveys andfeedback directly obtained from interviews.

2

Dokokara-Demo-Fusen “tag(memosfrom anywhere”)
Since the pad will not break part when
taking memos indifferent color sections,
you can choose memos from dif ferent
colors simply by carrying one single memo
pad with you.

Manufacturing together with customers
Initiatives of the Personnel and General Affairs Shop
The Personnel and General Affairs Shop is a catalog and website
outlet offering products primarily designed to solve problems for
persons in charge of human resources, general affairs, or accounting
department. Rather than simply of fering products, this outletorganizes work on developing unique products in a series constituted
under the Kaucore Premium brand by proactively communicating withcustomers through round-table discussions, daily-journal surveys, andother channels.

Administering a survey

Kaiwa-Shiyasui Kuchimoto Yuttari
Mask “a( mask that guards comfortably
around the mouth while speaking”)
Wires are inserted into the center of the mask
to maintain the mask's shape. Because themask does not cling to the mouth too muchand space around the mouth is assured,
it is still easy to speak and listen during
conversations while wearing the mask.

Product development round- U s a g e r e p o r t s s u b m i t t e dtable discussion conducted by b y c u s to m e r s a re re c e i v e doutside users
one after another along withphotographs.

Comment by the persons in charge
We identify problems affecting our customers through surveys and round-tablediscussions.
Because we don't know, we must ask.
We established our Personnel and General Affairs Shop in 2008 and proceeded to proactively
listen to the opinions of customers because of a very simple idea. In the beginning, we went
directly to customers of Kaunet to ask their thoughts. However, we soon ran out of clues
to help us determine what problems needed to be solved. How could we figure out what
was troubling our customers? The answer lay in a new program based on the use of Kaunet
Monika, Kaunet's hearing system. This program consisted of a combination of a daily-journal
survey administered to participants and round-table discussions. Every week, approximately
twenty survey questions are sent to around thirty participants. Through this approach, details
concerning specific problems are carefully elicited over and over again. By administering thissurvey in a daily journal form, the aim is to have participants notice operational difficulties thatsuddenly occur during the performance of regular duties. In addition, five to six participants
are asked to stop by the office two or three times to participate in round-table discussions andhelp us probe daily-journal survey responses with a more in-depth look at distinctive problems.
These actions contribute to the commercialization of products which could actually solve thetroubles of our customers. And these products are chosen by our customers, which will be theapproval of our work.

Ayako Higano (left)‘Kaunet monika’Group,
KAUNET Co., Ltd.

Yutaka Maeda (right)
Product Development
Group
Marketing Planning& Development 1
Department
KAUNET Co., Ltd.

Industrial waste manifest file
This is a dedicated file to ensure that the manifest
of industrial waste storage would neither be lost
nor be forgotten for the five-year obligational
period of time. Numerous problems of the complex
document management existed at the time.

KOKUYO Group CSR Report 2015

29

CSR Management
Since its establishment, with a grounding corporate philosophy of Enrich the world

through our products , KOKUYO Group has developed honest business practices, raised
proﬁts, and has always been selected by people.

Pursuit of proﬁt is not our purpose in business.
The proﬁt is the reward that is given form
society when our business contributes to its
development.
- Zentaro Kuroda, Oriori gusa

31p Corporate Philosophy

37p Anniversary Month of KOKUYO's Founding

32p Basic Concepts

39p Efforts for Promoting an Understanding of KOKUYO'S

35p KOKUYO's CSR Charter
36p Kokuyo Group Code of Conduct

CSR Activities

41p Initiatives to Promote Compliance
45p KOKUYO's Business Continuity Planning Initiatives

Views linked with the corporate philosophy, which have been highly valued by KOKUYO

Shō Hyaku Mai Wachō-A notebook with 100 pages

Three years after the founder started his business, he decided to start the productionof wach pads in 1908. At that time, it was standard practice to consider 96 as acomplete hundred. However, the founder insisted that the cover and backing paper
were for protecting the inner pages and should not be included in a count. He thenproduced a 100-page notepad and added an inscription of sh-o hyaku mai (meaning
exactly 100 sheets) on the cover. Even though the founder was faced with peerpressure, he constantly considered customer perspectives and felt massively conﬁdent
about his products, making him stick to what he believed in without giving up. It is theorigin of KOKUYO's sense of integrity, forming the basis of KOKUYO.

CSR Management (Organizational governance)

Corporate Philosophy

We shall continue to enrich our customers and society by contributing to the growth of our customers through the provisionof unique values.

Guiding Principle

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KOKUYO Group CSR Report 2015

CSR Management (Organizational governance)

Basic Concepts
The KOKUYO Group began when founder Zentaro Kuroda opened a small shop selling ledger covers made with Japanese
paper in 1905. It was his understanding that high value-added businesses were already being operated by others, leaving
behind only low value-added pickings from among which someone likes him could choose. The founder neverthelessbelieved that even troublesome work can enrich the world if it were to be infused with original ideas in a simple and honest
manner and held fast to this ideal his entire life. For over a hundred years, the KOKUYO Group has ceaselessly adhered tothis founding spirit as captured in this business of KASU and operated under our corporate philosophy of enriching theworld through our products.
The founder also bequeathed us with his basic ideas on CSR: We do not pursue business profits. Profit is the reward
conferred onto us by society for contributing to society through our business. In 2004, based on our corporate philosophy
we enacted the KOKUYO Group CSR Charter to establish better relations with various stakeholders as a good corporate
citizen (which was partially revised in 2012). Our basic policy for ensuring the ongoing growth of society and the KOKUYOGroup has been clarified in line with five key themes: our customers, regional communities, environmental conservation,
corporate activities, and respect for human rights.

System for the Promotion of CSR
The KOKUYO Group promotes CSR activities on a group-wide basis through linkages among CSR-related sections. The
CSR & Environmental Group formulates and reviews policies and helps to define issues and targets in order to strategicallypromote CSR.
We also operate an environmental committee, and a central health and safety committee, among other such organs tasked
with dealing with important concerns. With special sections leading the way, our entire group pursues these concerns in acoordinated fashion. In aspiring to become an Asian company, the establishment of a system for the promotion of CSR in a
global context will become an issue that will need to be addressed. We will continue to strive to achieve sustained growthfor society and the Group while maintaining a state of harmony with stakeholders through CSR information disclosure anddialogue.

Efforts for Promoting Corporate Governance
KOKUYO reaffirms the significance of corporate governance for top management to proceed with management reforms.
Since 2010, we drastically have reformed the corporate governance to lay the foundation of governance structure and havebeen making efforts to maintain and operate proper corporate governance structure while enhancing the managementtransparency. The nominating and compensation committee established in 2010 as the advisory panel for the board of
directors consists of a majority of the independent directors and external intellectuals, and it considers candidates for
directors, auditors, and managing officers ("board members"), as well as their appointment and dismissal, and discusses
compensation plans, evaluates individual board members, and then verifies compensation to inquire and make proposals tothe board of directors. Beginning in April 2015, new top management structure was introduced after the replacement of thechief executive officer, president and director, etc., and it was determined through a fair process based on the objective
assessment of the nominating and compensation committee, which took nearly three years.

Governance StructureWith the aim of ensuring the reproducibility and continuity of transparent, apt, and efficient business administration, weestablished a structure for corporate governance. In order to ensure that business and operations are carried out without
improprieties, without mistakes, and efficiently, we developed and are operating a system of internal control that we are
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KOKUYO Group CSR Report 2015

striving to improve and enhance on an ongoing basis. Headed by various board members, key committees linked to internal
control appoint members from among multiple related sections and endeavor to systematically promote and fortify
responses to important issues concerning CSR on a group-wide basis.

Board of Directors, Audit & Supervisory Board Members, and Managing Officers
Members of the Board
Representative Director of the Board,
Chairman

Akihiro Kuroda

Independent Director of the Board

Hisao Sakuta
Independent Director of the Board

Representative Director of the Board,
President and CEO

Hiroshi Hamada

Hidekuni Kuroda

Independent Director of the Board

Taketsugu Fujiwara
Director of the Board, Vice Chairman

Members of the Board

Yasuhiro Kuroda
Director of the Board

Takuya Morikawa
Director of the Board

Nobuyuki Miyagaki

Audit & Supervisory Board Members
Standing Audit & Supervisory Board

Outside Audit & Supervisory Board

MemberMemberYoichi Kotani

Tomomi Yatsu

Standing Audit & Supervisory Board
MemberOutside Audit & Supervisory Board
MemberTsutomu Sumitani

Yutaka Mizuno
Audit & Supervisory Board
Members

Managing Officers
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KOKUYO Group CSR Report 2015

President and CEO

Managing Officer

Managing Officer

Hidekuni Kuroda

Corporate Planning Office"Kaunet" Business Division

Naotaka Umeda（President & CEO, Kaunet Co.,Ltd.）

Senior Managing Officer

Kenichiro Takahashi

International Business Division

Managing Officer

Takuya Morikawa

Furniture Business Division

Managing Officer（President & CEO, KOKUYO Furniture

Stationery Business Division

Senior Managing Officer

Co.,Ltd.）（President & CEO, KOKUYO S&T

Corporate Administrations

Kozo Sakagami

Co.,Ltd.）

Nobuyuki Miyagaki

Takuji Yaso

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KOKUYO Group CSR Report 2015

CSR Management (Organizational governance)

KOKUYO's CSR Charter
Grounded in the founding corporate philosophy of “Enrich the World through Our Products” the KOKUYO Group conducts
business that is necessary for society, while remaining profitable and honest in its business practices.
In addition to complying with laws and regulations, we seek to maintain continuity of our business by acquiring the trust of
all related stakeholders, investors, and, of course, our customers by fulfilling our social responsibilities as a corporate
citizen.

1. Without being satisfied with the present conditions, we continue to improve the safety and quality of ourentire product line and services.
2. Strive to continually innovate society through our business operations by developing new products andservices.

1. Strive to be a trusted ‘corporate citizen’ on both regional and national levels via proactive interaction andplanning with regional communities, while respecting regional culture and customs and encouraging theiradvancement.

1. Concentrate the wisdom of each of our employees, and align the actions of our entire company in order toassist in reaching solutions for the common environmental problems facing the world today.
2. By developing Eco Products, we strive to decrease the environmental burden over the life cycle of these
Products and to introduce new environmental engineering and green procurement techniques.
3. Contribute towards the advancement of a ‘low carbon society’ by proposing revolutionary work styles andenvironments, and decrease society's overall burden on the environment.

1. Conduct transparent, just, and free competition and business transactions while keeping sound and correct
relations with politicians and governmental bodies.
2. In order to become a trusted company, we strive for business partner relations that are consistently fair andbuilt upon a foundation of reciprocal cooperation, allowing for mutual growth.
3. Recognize our responsibility to increase our corporate value for stockholders, and maintain a corporate
management style that earns the trust of society through its transparency and virtue.

1. Respect the human rights of all individuals involved with or affected by all of our corporate activities. We
support work environments free from discrimination, and do not approve of child labor or forced labor
practices.
2. Strive to accept each and every employee's individual character and personal values, and become acompany where many different human resources can fully express their abilities and develop themselves.

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KOKUYO Group CSR Report 2015

CSR Management (Organizational governance)

Accompanying the development of KOKUYO's overseas activities, it is necessary to prepare a common code of contact for
the group by taking into account of local customs and mores. In August 2012, the KOKUYO Group enacted its KOKUYOGroup Code of Conduct as a set of common provisions applicable to the KOKUYO Group and prepared the KOKUYOGroup Code of Conduct Handbook with supplementary points based on business practices, laws, and other matters thatdiffer depending on the country or region.
1) Compliance with laws and internal rules and acting with integrity
We not only comply with laws and internal rules, but also act with high ethical standards and integrity.
2) Respect for human rights and personality
We do not discriminate based on race, ethnicity, religion, nationality, language, gender, disability or other status.
We do not engage in conduct that constitutes sexual harassment or power harassment.
We do not tolerate child labor or forced labor.
3) Preservation of the global environment
We work to eliminate or reduce the environmental burden whilst focusing on global environmental issues, such as global
warming and declining forest resources.
4) Free competition and fair trading
We comply with laws and internal rules related to prohibition of monopolization, fair competition and fair trading and will
not engage in conduct that deviates from these standards.
5) Provision of safe and reliable goods and services
We strive to win customers' satisfaction continuously through the provision of safe and reliable goods and services.
6) Proper handling of company assets and protection of intellectual property
We properly manage, maintain, and utilize every tangible and intangible company asset. We respect the intellectual
property rights of others.
7) Proper information management and financial reporting
We honestly and properly create records of the company, as well as manage and report information collected andobtained in the course of business in accordance with proper procedures based on the materiality of such information.
We carry out accounting and financial reporting in compliance with laws and internal rules relevant to financial,accounting, and tax affairs.
8) Prohibition of acts involving conflicts of interest
We will not engage in any act that involves or may involve a conflict between personal and corporate interests. If there isa possible conflict of interest, we will report it to our superiors.
9) Prohibition of insider trading
We will not engage in insider trading or any act that triggers insider trading laws or regulations in connection with thetrading in shares of the Kokuyo Group or any other company.
10) Proper management of entertainment and gifts
We will not give or receive entertainment and gifts in deviation from normal business practices. We will not illegally giveentertainment or gifts to public servants or government officials.
11) Handling of unreasonable external demands
We will not comply with any unreasonable external demand.

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KOKUYO Group CSR Report 2015

CSR Management (Organizational governance)

As KOKUYO was founded on October 2nd, the company has set October of each year as the anniversary month of
KOKUYO's founding to provide each employee with an opportunity to understand more about the significance of its
founding spirit and corporate philosophy for the entire month. During the period, the employees are encouraged to reflect on
their attitudes and actions to practice and embody the founding spirit and corporate philosophy into day-to-day tasks.

Sitting In A Circle with The Top Management
While the executives were invited to join President Kuroda for a lecture in 2013, for 2014, sixty-eight employees whoentered their names voluntarily and four directors engaged in a direct discussion to talk about KOKUYO's characteristics
that have been passed down since its founding. KOKUYO stands on its founding spirit, the business of KASU, and defines
its corporate philosophy as enriching the world through our products. The founding spirit and the corporate philosophy form
the axis and origin of employees behave and think. While they each define important terms, the most essential thing is tobring them into practice on a regular basis above all things. We familiarize each employee with the corporate philosophy
aiming at developing their own principles they could stick to in their daily tasks, which helps employees achieve theirpotential.
In 2014, we emphasized the importance of strength in individuality as well as in teamwork, and the rediscovery andreinforcement of strength in business. During the meeting where management and employees sat in a circle, everyone
expressed opinions to discuss whether the company follows its corporate philosophy, persists in enriching society(customers), focuses on originality and ingenuity thoughtfully, and work together to polish the value offered to customers.
The employees who took part in the discussion left positive feedback, such as the following: "This opportunity makes us
come in direct communication with the top management. It encourages me to check my own idea. It is also a good
opportunity for me to take another look at how I want to work in the future. I pledge to do my best to maximize our strength
by encouraging the entire members of the company to understand the KOKUYO's philosophy. And I feel a deep sense of
empathy to take concerted action and increase the degree of sincerity, autonomy, and thoroughness to the extreme."

Corporate Philosophy Meeting Launched for Employees on Their 11th Year
Since 2013, corporate philosophy meeting has been launched to provide employees of 11 years an opportunity to have a
dialog with the president on the theme of the corporate philosophy. The employees who marked 10 years since they joined
the company and had accumulated experience in various business fields got together with management executives andspoke out their thoughts that the philosophy was not something that competes on what they remember but something thatmust link to products, employees' regular tasks, and their behavior. The participants also enjoyed listening to episodes
shared by the executives. The 2014 discussion theme was making a new proposal of the business of KASU. The
employees were asked to think about the theme beforehand and make presentations at the meeting. The founding spirit of
the business of KASU is to have the certainty and determination to absolutely serve a useful purpose for customers and findthe source of value in the business of KASU, of which no one took notice, and focus on tedious and cumbersome tasks todevelop KASU with overwhelming value. It is a theme that had more than one answer so that the meeting could be an
opportunity for a fresh look at the KOKUYO's spirit of originality and ingenuity. The participants left a number of favorable
comments, such as the following: "It encouraged me to think about what customers really want from us," "I start to think that
we must put ourselves in the customers' position again to make efforts by determining what customers really want and what
they are concerned about, instead of proceeding with each task simply to respond to their requests," "I thought I shouldchange the way I work in the past" and "I want to take part in such an opportunity again."37

KOKUYO Group CSR Report 2015

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CSR Management (Organizational governance)

With the goal of raising awareness and promoting the understanding of CSR initiatives of each employee, the KOKUYOGroup has implemented e-Learning training to educate the employees and group newsletters, namely YOU, via intranet tofacilitate communication among employees.

CSR Is Our Business Itself
In recent years, CSR includes the natural environment, employment, human rights,
governance, risk management and other general business responsibilities. For
KOKUYO, which defines its corporate philosophy as enriching the world through our
products, CSR is our business itself, and in order to for us to make continuous
development and fulfill our role as a company that society can continue to rely on, we
believe it is our responsibility to promote CSR through our business activities. Since
2011, the KOKUYO Group has implemented a CSR e-Learning program via intranet toprovide the group employees with the necessary knowledge about CSR initiatives andits importance in their day-to-day operations.

Training materials for CSR
e-Learning

CSR e-Learning for the Entire Group Employees in Japan
Continued from previous year, the CSR e-Learning program for 2014 was implemented
with an aim to promote each employee's understanding and actively communicate
KOKUYO's CSR activities to stakeholders. In addition to covering the themes ofcustomers, shareholders, business partners, local communities, the naturalenvironment, and employees, the CSR e-Learning program addressed the important
themes of corporate governance and compliance. Also, before the e-Learning training,
there was a special topic on the themes of learning about CSR in 2014 featuring
department-specific activities that employees talked about their efforts toward CSR in
the group newsletter, YOU, on the intranet, , which helped to promote further
understanding of the employees for CSR.

Group newsletters, namely YOU,are used to communicate casestudies specific to departments

As a result, in fiscal 2014, the e-Learning training was attended by nearly 3,500
domestic employees of the KOKUYO Group, which was successful in promoting abetter understanding of CSR through each operation of the KOKUYO Group. In
addition, an employee survey of CSR awareness was held to exam the fundamental
knowledge of CSR among local employees in China. To enhance and improve the CSR
activities, it is vital to recognize the importance and share the significance among
employees. The KOKUYO Group pledges to maintain efforts to increase the awarenessof CSR among all employees including the management layer.

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An employee in charge explains thedetails of results

KOKUYO Group CSR Report 2015

To further widen the understanding of CSR among Chinese employees, theoffices in China use the Chinese group newsletters, titled YOU ONLINECHINA. The newsletters not only introduce the efforts made by local
employees in China, but also the CSR activities in Japan and employees who
proactively participate in the activities to publish a wide range of information
within the Group periodically to facilitate communication among employees. In
the same manner as the Japanese group newsletters, YOU, the page where

Chinese group newsletters,
YOU ONLINE CHINA

the series are provided has a like button and a space to leave comments.
Employees are expected to share their thoughts, rather than focus on a one-way transmission of information.

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CSR Management (Organizational governance)

As it develops and becomes a truly Asian company, the KOKUYO Group has been engaged in various activities to ensurethat all management and staff will have a strong awareness of compliance and will take the right actions in sincerity at all
times.

Aiming to Raise the Awareness of Compliance
Annual mandatory pledge on the establishment anniversary month to continuously encourage
employees to think about compliance
In October, which is the anniversary month of the KOKUYO Group, all management and staff members of subsidiaries andaffiliated companies in Japan and abroad are provided an opportunity to think about compliance by reflecting on their own
conduct. During the month, everyone submits a pledge indicating they will be compliant with the KOKUYO Group Code of
Conduct and confirms the content. In 2014, the framework of compliance surveys is added to the step of submitting thepledge. Everyone answered questionnaires on the corporate philosophy and compliance, as well as read the messages
from representatives about rethinking the sincere conduct of each employee, which aims at enriching the understanding ofcompliance.

Continuous Implementation of Compliance Efforts in the entire GroupThe compliance surveys cover the entire KOKUYO Group, targeting a total of 43
companies, including overseas bases (27 domestic companies and 16 overseas
companies). The fixed point observation allows us to detect the status and signs ofchanges in the awareness of compliance to grasp problems and take the necessary
measures beforehand. The KOKUYO Group plans to continue the compliance surveys
on a yearly basis in the future. For each business group, by analyzing the secularchanges in comparison to the previous year and the trends of each company, necessary
Training of newly appointed
measures are implemented. Additionally, in 2014, nearly 300 employees took part inmanagement
discussion-type training using simulated case studies, namely Compliance Discussion.
A total of 28 sessions were hold among factory supervisors and the employees of group companies and holding companies.
Also, discussion-type compliance training that uses case studies tailored to each level has been offered as part of the
training program held by the Human Resource Development Department, such as training for new employees, newly
appointed management and newly hired mid-career employees. On the other hand, the mini compliance quiz Choikon,
which began in May 2013, encourages employees to gain knowledge and awareness by answering questions on the
database and immediately checking the answers and descriptions. The mini compliance quiz was held a total of 39 times by
the end of December 2014 and each session was attended by nearly 400 employees. Recently, the number of divisions
where the entire members took a proactive stance in non-mandatory workshop-type quiz hosted by supervisors in theworkplace without the intranet has also increased.

Implementation of compliance training held by each company (Japan)
Each group company also implements initiatives to promote compliance independently.
At KOKUYO S&T, in collaboration with the legal department, nearly 300 employees
voluntarily took part in the training to learn about work-related laws and regulations,such as the Subcontract Act, Product Liability Act, and the law related to contracts.
Additionally, e-learning has been implemented to provide each employee with theopportunity to individually watch a short video and answer questions about compliancefrom their own desk between day-to-day tasks with the aim of increasing the awarenessTraining at KOKUYO S&T
of compliance. KOKUYO Furniture also worked with the legal department to holdtraining concerning general knowledge of legal and intellectual property, educating nearly 300 employees. KOKUYO
Marketing hosted a free discussion session for each workplace in a small group setting on the theme of compliance, and a41

KOKUYO Group CSR Report 2015

test was provided mainly to department managers and group managers to check their knowledge in compliance related totheir operations. Each company has been sparing no effort on promoting compliance.

Operation of a whistle-blower system, KOKUYO Group Hotline.
The KOKUYO Group Hotline is a hotline where employees can seek advice on problems related to compliance andcorporate ethics which are difficult to counsel and resolve within the workplace. It is a global system where not only
employees in Japan but also the employees of the KOKUYO Group in overseas offices can use.

An internal search engine, named the Archive for Awareness, has been released.
The search engine system has been released to the entire KOKUYO Group so that
employees can access the well-organized awareness information accumulated overtime. The system aims to offer fuzzy reference and easy search of the knowledge
required for employees when they transfer to new department, requiring the creation ofa new operational flow from zero, and previous ingenuity that senior employees
developed from past experience, as well as what the KOKUYO Group had experienced
in the past and what the employees should pay attention to when dealing withcompliance. For example, the database accumulates information on sales,
procurement, various business acts, compliance, and internal systems.

The Archive for Awareness

KOKUYO Group's basic idea on intellectual property
As a strategy to differentiate ourselves from competitors, the KOKUYO Group promotes the following initiatives toencourage the acquisition of intellectual property rights, and at the same time, to respect others' intellectual property rights:
1) Management and operational structure of intellectual property rights
The KOKUYO Group aims to standardize and centralize utilization and strategies for intellectual property rights bycontrolling the operations related to the intellectual property rights of subsidiaries and affiliated companies in Japan andoverseas centrally within the intellectual property rights group of the legal department. The group monitors competitors'
products on a daily basis for the acquisition of rights in inventions, design, and trademarks; executes thorough preliminary
surveys to prevent a violation of others' intellectual property rights; and protects our intellectual property rights. In addition,in cases where there is a conflict with competitors, the group corresponds to such a situation through cooperation with the
management by taking a rapid and optimal approach for resolution.
2) Protection and legal compliance of intellectual property rights
The KOKUYO Group Code of Conduct stipulates that we respect the intellectual property rights of others while theintellectual property group establishes and operates the system for research, analysis, and close investigation to prevent
and avoid the violation of rights held by others. Additionally, the group offers educational activities to the development
division through occasional training and day-to-day operations for promoting the awareness of legal compliance andrespects for the intellectual property rights of others.
3) Promotion of creation and utilization of intellectual property rights
The intellectual property group and development division work closely from the early stage of development to increase thesuperiority of the products in the market and focus on creating and discovering inventions that contribute to differentiationfrom competitors' products. We also aim to adhere to Sec. 33 of the Patents Act and establish an incentive system for
employee invention as an internal rule, aiming to increase customer satisfaction and encourage inventions that strengthen
the Group's development.

Overseas bases also deploy initiatives to promote compliance in line with the local situation
In order to work together to observe the laws and regulations and conduct business activities in accordance with social
ethics, the overseas bases implement initiatives to promote compliance that is consistent with the local situation.

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KOKUYO Group CSR Report 2015

Continuous Implementation of Compliance Discussions
In China, we implemented discussion-type training using simulated case studies,
namely Compliance Discussion. In the key bases, the leaders act as a facilitator to
deploy initiatives to promote compliance after participating in training. Also, in 2013,
various tools have been developed to facilitate understanding of the collection ofcompliance case studies (it contains compliance violations occurred at Chinese
subsidiaries and the laws and regulations in China), which was created to promote
understanding of the KOKUYO Group Code of Conduct. These tools are set up at
cafeterias (rest stations) of factories and warehouses. In addition, posters are createdand posted on the walls with the aim of disseminating the understanding of the
KOKUYO Group Code of Conduct and getting across the reform of the corporate
A poster put up on the wall of plantin China

climate.

Explanation conference tour for the KOKUYO Group Code of Conduct travels across India
KOKUYO Camlin has nearly 1,200 employees across India. In 2013, the KOKUYOGroup Code of Conduct Handbook was distributed to all employees and conferenceswere held as part of introductory training. For the first year, the management including
the president and chief executive officer (CEO) traveled across India to hold explanation
conferences. In 2014 as the second year, with the aim of further promote theirunderstanding, the management spent about two months in the same way as the initial
year and visited nine bases and held as many as ten sessions for the explanation
conference. In the vast land of India, where people speak different languages from state
to state, the KOKUYO Group Code of Conduct Handbook was translated into thenational language of Hindi, second national language of English, and Marathi, which is
the language of Maharashtra where the headquarters and three of five factories arecentralized. At the conferences, Indian CEOs provided an explanation of elevenprovisions of the Code of Conduct in their language while giving examples, and allparticipants read the provisions aloud. Exciting conferences were held in series, giving a

Explanation conference at Jammu
factory in northern India

sense of tension. Also in India, because it is extremely rare for the presidents and CEOs
to gather with employees to hold a conference, Our ingenuity makes maximum use of
the opportunity of the large-scale conference tour by sharing various information in timewith the explanation conference tour of the KOKUYO Group Code of Conduct.

CEO Srikanth offered a passionate
speech at the Bangalore venue insouthern India

Concurrently, besides the annual explanation conference, the explanations about the KOKUYO Group Code of Conduct arealways delivered at manager training and introductory training for new employees to continuously enlighten the employeeswith the goal of further disseminating the KOKUYO Group Code of Conduct.

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KOKUYO Group CSR Report 2015

I always have the KOKUYO Group Code of Conduct Handbook at handbecause I think it is crucial to repeatedly review the KOKUYO Group Code of
Conduct. In India, the turnover of sales personnel is particularly high, so it isessential to provide compliance education to new employees working at
KOKUYO Camlin. In addition, although we tour around India every year tocarry out educational activities on the KOKUYO Group Code of Conduct bysharing opinions with employees to raise their awareness, I feel there are

A. Srikanth,Chief Executive Officer,

more challenges to ensure the dissemination. We will step up our efforts by

KOKUYO Camlin Ltd.

encouraging employees to provide examples of the eleven provisions and dividing participants into teams at the
explanation conference tour to disseminate the KOKUYO Group Code of Conduct, so that each team canpresent two to three provisions in a competition style, which gives them an opportunity to think more deeply
about the KOKUYO Group Code of Conduct. The road show must go on to disseminate the KOKUYO Group
Code of Conduct!

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KOKUYO Group CSR Report 2015

CSR Management (Organizational governance)

The KOKUYO Group develops necessary business continuity plans and procedures to ensure quick recovery of its
operations in the event of a large-scale disaster or a new influenza pandemic.

KOKUYO's Formulation and Implementation of the Business Continuity Planning
Business Continuity Planning (BCP) defines action plans to continue business operations to the best of our ability after theoccurrence of unforeseen circumstances, such as disasters and accidents, as well as action plans to recover and resume
business in as little time as possible where interruption is unavoidable. In the event of a disaster, disease epidemics, andother crisis situations, in order to ensure more stable product supplies the KOKUYO Group would implement the following
measures in our BCP activities to facilitate crisis response activities as the entire Group.

1) Early Response Measures during Disasters
To ensure all employees can restore calm behavior in the event of large-scale disaster,
we distributed survival cards that list procedures to be followed during times of disasterand ask all the employees carry cards with them at all times. The survival card provides
three rules to follow during disasters, which are (1)to ensure one's personal safety, (2) toremain calm, and (3) to report one's own condition, and also the information about how
to browse a disaster message board offered by cell phone companies and theinformation section for identification in case of unexpected circumstances. In addition,
the emergency action plans for employees that provide a full detail of the survival card
are posted on the intranet to raise awareness of measures against disaster in mind.

Survival cards (left) and emergency
action plans for employees (right)

2) Creation of a Safety Confirmation System and Implementation of Practice
To make quick confirmation of the safety of Group employees in times of disasters, in 2006, we set up a safety confirmation
system using mobile phones, PCs, fixed line telephones, and other means of communication by employees. Immediately
after the earthquake in March 2011, it was temporarily not possible to use telephones and e-mail. At present, however, noother alternative systems seem to be able to confirm the safety of a large number of employees. For the time being, we willcontinue to require all employees to register their mobile and other contact addresses and make sure that all employees
receive notification and that contact information is kept up to date and in a usable state. (In 2014, practice were
implemented twice with approximately 5,500 participants)

3) Implementation of Emergency Drills at Business Locations
To ensure that all employees take safety precautions on their own in an emergency,
along with regular countermeasures for earthquakes, we are conducting periodic
training and drills that simulate a large-scale earthquake on weekdays. In 2014, theShinagawa office held an evacuation drill simulating the situation after receiving an early
earthquake warning. Actions for maintaining safety by taking cover under desks areapplied. There were also initial firefighting training and reporting to the fire department
and disaster center to the evacuation after terminating initial firefighting based on a
scenario of an office fire after earthquake. Also, the Osaka head office held simulated
training for group-wide task force aimed at gathering disaster information of each branch

An emergency drill held at the
Shinagawa Officelocation in a disaster affected area and planning support plans. The KOKUYO Group continues to increase the group-widecrisis-response capability in the future.

4) Countermeasures for Disease Epidemics
Based on the experience gained during the epidemic of a new strain of influenza in 2009, we are considering and pursuing
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KOKUYO Group CSR Report 2015

countermeasures for the recurrence of such epidemics. In 2014, as countermeasures for the influenza season in
2013-2014, we raised awareness by reserving and distributing antivirus masks, enforcement of hand-washing and gargling,
and the adherence of cough etiquette to prevent infectious diseases. The Group continues to take a fresh look atcountermeasures for possible events including a new strain of influenza as part of the precautions for a pandemic.

Structuring Business Continuity Management Systems (KOKUYO Furniture's Initiatives)
KOKUYO Furniture has been designated the KOKUYO Group's pilot company for BCP activities. After 2012, based on theissues that have been brought to light after the Great East Japan Earthquake, we are promoting the reconstruction of BCP
activity plans unique to KOKUYO Furniture with the goal of delivering a better and highly practical system, so that we canoffer products and services to fulfill customers' expectations and make them feel relieved.

KOKUYO Furniture's Basic Policy for BCP Activities
Objective
KOKUYO's aim is to fulfill corporate social responsibilities and secure customer satisfaction and trust by taking initiatives forbusiness continuity management to ensure and share continuity in the provision of furniture-related products and services inthe event of unexpected circumstances.
Policy for BCM Activities
1. Assess risks that may endanger business continuity and implement appropriate countermeasures.
2. In preparation for unforeseen circumstances, make recovery plans n advance.
3. Make continuing improvements in BCM systems.

Issues of BCP Initiatives and the Redevelopment of Action Plans
In the aftermath of the Great East Japan Earthquake, we were reminded of our role as apart of infrastructure companies because we received a series of restoration requests
from infrastructure companies. Although we have implemented the business continuity
management initiatives as a manufacturer, we faced various difficulties during and after
the Great East Japan Earthquake, causing inconveniences to our customers andbringing the deficiency of plan to our attention. Based on the experiences, we areclarifying problems occurred in the front, production, logistics, delivery, and systems aswell as clarifying priorities so as to formulate feasible plans. Additionally, we organize

Workshop for formulating BCP

the detailed actions to take in response to emergencies in chronological order to create more effective systems.

Implementation of crisis response training at offices in China
Starting in 2013, KOKUYO's General Affairs Department and persons in charge of crisis
management in overseas subsidiaries have been working together on the structure forcrisis response framework and crisis management planning within the local offices. In
2014, with the aim of verifying response procedures after the outbreak of the crisis andthe aim of improving response ability, in February, the staff in charge of crisis
management of three overseas subsidiaries were called to join a desktop exercise toconfirm response procedures in the outbreak of a new strain of influenza andprecautions to take as companies and offices for each pandemic phase are verified.

Training that assumed real fires

Also in October, educational and actual firefighting training was held for both companies' private fire brigades in thebuildings where KOKUYO (Shanghai) Management and KOKUYO Commerce are located. The educational training allowed
the staff to confirm each person's actions and tasks in the event of fire while the actual firefighting training allowed them toconfirm evaluation routes and how to use firefighting equipment.

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KOKUYO Group CSR Report 2015

In July, KOKUYO Sanyo Shikoku Sales held surprise training by assuming an early earthquake warning. The
surprise training assumed an earthquake measuring a magnitude of lower 6 and distributed emails through thesafety confirmation system as well as emergency network to conduct safety reports by telephone. However, therate of safety reports by telephone resulted in only 47% so that in August, with the aim of enhancing awareness,each office implemented a disaster preparedness briefing to explain the issues such as the neglecting of
telephone communication and communication interruption with staff in charge of information collection As thesales base located at the place where Tonankai earthquake happens at a high probability, we will continue toprepare stockpiles, implement training for emergency networks, and repeat practical training, such as
evacuation drills and fire drills, in order to establish the preparedness structure for autonomous actions in an
emergency.

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KOKUYO Group CSR Report 2015

With Customers
KOKUYO develops products and services from the customer's perspective at all times andcontinues to improve the safety and quality of all products and services without being
satisﬁed with the status quo.

49p Views Regarding Quality Assurance at KOKUYO S&T

57p Customer Support and Services

51p Views Regarding Quality Assurance at KOKUYO Furniture

59p A System for Utilizing Feedback from Customers

53p Provision of peace of mind and safety to customers
Quality according to the consideration of Kaunet

55p Activities for Creating a Menu of Countermeasures for
Disasters

Views linked with the corporate philosophy, which have been highly valued by KOKUYOThe products today exist for products tomorrow.
There are no products that are absolutes Shonosuke Kuroda

Every product rests on customer dissatisfaction. The
moment when a customer picks up a product, and thesecond when he or she ﬁnds satisfaction in some partof the product, the demand for "better products" starts
there. Unlike high-tech products, as stationery is a
product that necessarily does not attract interest fromthe community, KOKUYO constantly value the attitudeof making a direct effort to keep our ears open forcustomers' next demands.

With Customers (Consumer Issues)

As the KOKUYO S&T increases the ratio of its sales in markets outside Japan, we are preparing quality standards that
customers will support suited to the features of various countries and regions.

Right Product for the Right Region - Creating Optimum Quality Standards According toCountries and Regions The business environment and conditions that influence thinking about quality standards differ from one country or region toanother. These differences in thinking are influenced by culture, people's sense of values, such economic conditions as per
capita GDP, laws and regulations relating to quality, and the natural environment. While giving maximum priority to ensuringconsumer safety, our thoughts for quality standards are shifting from being uniform across markets to being the rightproduct for the right region.

Quality Maintenance and Improvement(1) Deepening the Quality Assurance System
KOKUYO has re-examined design review and safety review, which are important
processes for the quality, and production trial observation as well as guidelines forchemical management to work out the details of the contents to reflect the times. Thoseefforts have been utilized for the education of young and new employees and promoted
for use as a bible for employees involved in quality control, aiming to deepen the quality
assurance system.
(2) Establishment of the inspection system on a global basis
KOKUYO has established an inspection skill evaluation method with global standards,
which evaluates the skill level of inspectors around the world and sets up a system foreducation and guidance with the aim of maintaining a certain level of inspection skills. In
addition, we provide necessary paraphernalia and manuals for inspection globally tomaintain the level of inspection at a certain level, thereby increasing the accuracy of
discovering faulty products during inspection to prevent the outflow of faulty products.
(3) Increasing the accuracy and speed of handling complaints
Introduction of robots in quality
In addition to safety, people around the world seek a sense of reassurance; moreover,testinganybody can receive and transmit much information anytime. As we think it is essential
to further increase the accuracy and speed of handling customer complains in the future, we have embarked on visualizing
and standardizing the processes, information for making decisions, and evaluation criteria of the course of actions that
corporations should take when product risk occurs. This will ensure the unification of decision-making process procedures
within the organization and minimize the variation of determination, as well as to speed up the process.
(4) Enhancement of value evaluation testing in addition to quality verification testing
While we thoroughly implement quality verification testing at the time of the renewal of existing products and developmentof new products, we make continuous efforts to maintain and improve testing quality by introducing robots. Additionally, torespond to the various needs of users, we have been working to conventionally confirm quality to see whether products are
sturdy and offered at a low price and to quantify the quality to ensure that valuable and attractive products are offered tocustomers.

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KOKUYO Group CSR Report 2015

Sponsored by the Quality Circle Forum of India (QCFI), the Kaizen
Competition was held for the first time on June 21, 2014, and the members of
the Tarapur factory and Vasai factory won the golden prize among 37 teams
from remarkable corporations in India. In particular, the Tarapur factory team
was awarded first place out of all competitors. On the day of the competition,
the Tarapur factory team delivered a presentation on the improved productivity
and cost reduction in RMG (a machine for generating colors by mixing

The quality control team won the

golden prize.
together coloring and oil of crayons), and the Vasai factory team delivered apresentation on the theme of doubling the service life of dies by reuse of impressions. Each of the projects was

highly valued for achieving the productivity increases by 50% and realizing cost reduction by 30% to 40% while
contributing to quality improvement.

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KOKUYO Group CSR Report 2015

With Customers (Consumer Issues)

Domestically, KOKUYO Furniture expanded the scope of its ISO 9001 certification to include furniture for public-sector
facilities that are accompanied by construction in 2010 and to include construction material products, such as room dividers
and partitions in 2012, and then again in 2014 to include stocking sales of outside articles. In addition, KOKUYO Furniture
Commerce & Trading (China) acquired ISO 9001 certification in December of fiscal 2014.

Activities for Enhancing Quality
In the furniture business, the issues go beyond product quality and include quality-control activities covering the full supply
chain from product marketing to after-sales service and requiring close communication among various departments. In
addition, the opinions and requests from customers are used as feedback to departments in charge of each of these
activities to improve overall quality.

Enabling Customers to Use KOKUYO Products with Confidence(1) Setting High In-House Standards
In the process of developing new products, related departments hold meeting from the planning and design stages andhave discussions, as well as make assessments of product safety, including ease of use. When new products are to becommercialized, thorough examinations are conducted to ensure compliance with Japanese Industrial Standards (JIS),
industry, and other specifications as well as even more demanding in-house standards.
(2) Responding when Accidents Occur
In the rare cases where accidents occur, related departments work together to give a fast response. In the event of major
accidents also, reports are made to management and the Compliance Committee, and appropriate measures are taken
promptly. In addition, reports are made to the relevant government authorities, and notifications are issued in newspapers
and via the Internet as well as other media to prevent the possible spread and recurrence of accidents. In addition,corrective measures are taken and policies implemented to prevent the occurrence of similar accidents horizontally acrossproduct lines.
(3) Notifications Regarding Product Safety and Quality
KOKUYO Furniture uses its corporate website as a media for making notifications
regarding product safety and quality. The most-appropriate one of the following four
sections of the website is selected, depending on the nature of the notifications.
1. Important notice regarding product safety
2. Important notice regarding defective quality
3. Announcement regarding the safety and proper use of a product
4. Other announcement regarding product safety and quality

Web page forKOKUYOFURNITURE Co.,Ltd
Notifications Regarding Product
Safety and Quality(4) Full Set of Initiatives through to Delivery
To give customers who have purchased KOKUYO Furniture products an even higher level of satisfaction than they had
expected, at each stage of the value delivery process from manufacturing to delivery and then to installation, efforts are
made to provide maximum quality. For example, KOKUYO Furniture has instituted an in-house qualifications system for
employees who interface with customers, including delivery vehicle drivers and other delivery personnel. The number ofqualified staff under this system is being increased daily, and a National Contest for Delivery Service Quality is held
together with partner companies who deliver products on a subcontracting basis. The aim of these activities is to make“Inspiring Deliveries” and raise the awareness among employees of the importance of high service quality.

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KOKUYO Group CSR Report 2015

An annual National Driver Competition is a competition for delivery drivers ofpartner companies, which is held with the aim of further increasing customer
satisfaction when delivering furniture products. Since it started in 2010, fiscal
2014 marked the fifth year, and it has become a competition that invites 400
drivers from about 40 companies from all parts of the country. About 80
drivers took part in the regional preliminary round after representative drivers
were selected from each company. The participants with honed professional
skills and pride competed with each other in heated contests throughout thenation. The National Finals were held on August 2nd and contested byrepresentative drivers of partner companies from a total of three teams,

The participants of thecompetition assemble products inearnest.

including two teams that defeated the final teams of the east and west block and a team that was specially
recommended, competed against each other. KOKUYO Logitem strives to continuously evolve as a company
with the goal of making “Inspiring Deliveries.”

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KOKUYO Group CSR Report 2015

With Customers (Consumer Issues)

Kaunet handles an array of products from stationery, office supplies such as copy papers to beverages, food, electric
appliances, gifts, medical related products, store operation products, made-to-order products including business cards andstamps, and office furniture from 1,000 manufacturers. As a distributor, Kaunet has been making efforts to work together inthe value chain and improve not only the quality of the line of goods but also the customer service at call centers anddelivery to offer a sense of security and safety to customers.

Distribution services for delivering products to customers with sureness
Kaunet considers it is a matter of course to steadily deliver products to customers and aims to offer “inspiring” quality inproduct distribution to please our customers.

For product deliveries (Main services)(1) Same-day, next-day delivery services (Except for certain products andservices)
Except Okinawa Prefecture, remote islands and some hilly and mountainous areas,
Kaunet delivers orders the next day if orders are placed before 6 p.m.
The same-day delivery areas may receive the order on the same day if an order isplaced before 11 a.m.
Our efforts on simple packaging(2) Promotion of simple packaging
For deliveries of products in a paperboard box, which is the most common packaging,
Kaunet exercises its ingenuity in using cushioning materials for protecting products as little as possible. Besides, forimperious products in a lower volume and , the orders are delivered using simple packaging, such as paper bags orpolyethylene bags, in an effort to conserve resources.
(3) The services for selecting packaging of delivery (For online orders only)
While customers highly appreciate the delivery using simple packaging, Kaunet also responds to the request for delivery
using boxes to accommodate occasions when sending orders to business partners or as a gift. When placing an order,
customers can select the packaging form each time.
(4) Furniture delivery with assembly services
Delivery staff specializing in furniture offer delivery, unpacking, assembling, and installation to packing material collection forthe delivery of large furniture, heavy furniture, and those requiring complicated assembly.

Collection services
Kaunet promotes resource conservation and recycling outdated Kaunet catalogues and cardboards for shipping, as well as
the collection services for used toner cartridges.

For our customer's peace of mind and safety
In addition, we offer free returns within 365 days from the date of purchase even at the customers' cause (certain products
and services are excluded), and we offer follow-up services after the receipt of products with the cooperation of
manufacturers and suppliers.

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KOKUYO Group CSR Report 2015

Kaunet holds sales data of customers that keeps track of date/time,customer's name, and product name. In cases of product failure and whenrecall is required, we may notify our customers via the website and directly
contact customers who purchased via fax or telephone. Although it requires a
great deal of time and effort to go back and check a huge volume of salesdata, this service could be applied only via mail-orders. Our steady efforts
ensure customers' safety and peace of mind for using Kaunet. That's what we
believe in day-to-day business operations to respond to our customers.

54

Hiroshi Sugayama
Quality Control Dept., Kaunet

KOKUYO Group CSR Report 2015

With Customers (Consumer Issues)

KOKUYO is working to develop a menu of countermeasures to prepare for large-scale earthquakes.

The weight of responsibility that was brought to our attention by the Earthquake
While KOKUYO has been making efforts to better prepare for disasters since 2007 as part of the disaster solution business,
the Great East Japan Earthquake occurred on March 11, 2011, not only caused tremendous damage but also made us
realize that we were a member of infrastructure companies. It was because we received a considerable amount of requests
from customers asking us to help establish disaster headquarters for restoration activities.

(1) Developing a menu of countermeasures against earthquakes for office
After the Great East Japan Earthquake, we carried out wide-ranging verification experiments, andbased on an enormous quantity of data obtained from the experiments, we make a rational
determination of the relationship between seismic waves and earthquake preparedness to devise
objective evaluation criteria of earthquake-proof furniture. Asking us how to prepare for earthquakes
from the perspectives of BCP (business continuity plan) and cost advantages, as well as reasons why
there was damage even though countermeasures were taken. To respond sincerely to these requests
and make a concrete proposal on countermeasures, we implemented vibration experiments according
to the seismic intensity scale to obtain data sets and study the behaviors of storage furniture by using
different methods of fixation. The experiment also recreated seismic waves that occurred in Kobe during the Great
Hanshin-Awaji Earthquake, and the killer pulse,* which is known to overturning of furniture, as well as similar long-duration
seismic waves that hit Sendai, which is one of the characteristics of the Great East Japan Earthquake. We spent more than
200 hours and experimented 300 patterns to obtain data.

(2) Proposing Stockpiling of Emergency Supplies to Corporations
How to stockpile emergency supplies is a necessary part of BCP for organizations. KOKUYO is,therefore, developing a disaster-proof solution business, which includes offering proposals for disastercountermeasures tailored to the needs of individual customers. Both KOKUYO's guidebook, SONAeL,
for companies on stockpiling of emergency supplies and KOKUYO's Disaster Countermeasure Expert
Series original products for coping with disasters have been highly appraised. These provide practicaland workable solutions to disaster issues, and their approach is from the perspective of analyzing andimproving office storage conditions.

Emergency supplies cabinet for

Mobile rescue equipment set

Toppling-resistant belt for paper

elevator

shredder55

KOKUYO Group CSR Report 2015

(3) Raising the Level of Awareness
KOKUYO is working aggressively to raise the awareness of the need to be prepared fordisasters. These include holding seminars around Japan on the theme of earthquake
countermeasures for offices. Subjects covered in these seminars have included the
difficulties faced by management immediately after the Earthquake (using KOKUYO
Tohoku Sales Co., Ltd., as an example), disaster countermeasures from the perspectiveof business continuity planning (BCP) (KOKUYO S&T), designing offices that canwithstand strong earthquakes (KOKUYO Furniture), and other topics.
Seminars on disastercountermeasures for corporation

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KOKUYO Group CSR Report 2015

With Customers (Consumer Issues)

KOKUYO strive to respond to customers' inquiries with the best of intentions in a respectful manner. We also share
feedback from customers company-wide as valuable opinions to help us offer better products and services.

Accuracy, Readiness, Kindness, and Politeness as Our Motto for Improving Customer
Satisfaction
With the goal of improving customer satisfaction, we offer a group-wide customer support center to respond to inquiries,
proposals and requests sent from customers. At the customer support center, where our representatives receive calls from
customers in the first place, we hold study sessions to improve product knowledge and make efforts to create betterdatabase of product information with the aim of serving customers with accuracy, readiness, kindness and politeness. In
addition, our website introduces frequently asked questions and answers, as well as improvements made with the help ofcustomers.

On-Site Experience-Based Training That Allows Employees to Listen to the Voice of Customers
and Apply into Day-to-Day Work
The KOKUYO Group has enhanced its employee training by providing opportunities toexperience the actual worksite of customer service center and hear opinions directlyfrom customers because employee do not usually get a chance to come face-to-facewith customers. Also, similar training is offered to new employees in May with the goalof gaining awareness when asking and knowing customers' requests and utilizing theseexperiences in the day-to-day operations in the future. The training provides employeeswith good communication technique and customers' feedback is utilized for developing
products. They work in tandem with an experienced-operator to respond to an array of
inquiries submitted to the customer support center. In addition, international employees
who newly joined the KOKUYO Group experience speed-recognition technology, whichconverts the content of conversation with customers into a text. This training aims tocultivate necessary skills, such as readability and an ease of utilization, to share

Customer service personnel work intandem with experienced operators
to respond to customers. When acustomer offers appreciation andgratitude, unforced smiles wereshown on their faces.

accurate information about customer's standpoint, sentiment and views within the
KOKUYO Group.

Implementation of Product Movies Introducing Convenient and Safety Use of Products,
Products with Excellent Features and Our Unique Efforts!
In order to answer the inquiries submitted to the customer support center, we create
movies to introduce contents that are difficult to express by phone and email. All of themovies we created are published on KOKUYO's homepage under the section of
KOKUYO's Room of Instruction Manuals on the page of KOKUYO Channel. KOKUYOChannel specifically offers movies that introduce KOKUYO products and its various
efforts.
In addition to KOKUYO's Room of Instruction Manuals, KOKUYO G Men and KOKUYO
Kudasai! introduce products in a fun way through a dialogue with KOKUYO's employees
and comedians, Let's Report explains the company's unique activities, and Benri no
Tane describes the convenient function of products. In addition, starting from fiscal
2014, the programs named Ano Machi, Kono Machi, KOKUYO no Aru Machi, introduce

The KOKUYO's Room of Instruction
Manuals is a program for customers
who purchased KOKUYO products
so that they can use the products
better.

stores and companies around Japan which handle KOKUYO products.

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KOKUYO Group CSR Report 2015

KOKUYO Channel received the Best Video Marketing Award.
KOKUYO Channel won the Best Video Marketing Award, recognizing KOKUYO's efforts
to make maximum use of videos for corporate marketing in the 2014 Brightcove Japan
Innovation Award, which awards corporations marketing efforts using innovative andcutting-edge online videos in Japan. This time, KOKUYO was highly rated for its efforts
of using videos as a part of corporate promotion, including the efforts 1) to launch avideo site on the corporate website faster than other Japanese companies and keep
working on it, 2) to plan and deliver contents specially for the movie site, and 3) torelease videos that communicate well with the target audience and to improve quality
while paying attention to the viewing trends for each video by providing a performance index.

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KOKUYO Group CSR Report 2015

With Customers (Consumer Issues)

The KOKUYO Group is working consistently to share live feedback from customers with group employees to always listen
to our customers and strives to foster an environment for developing new products and services by utilizing customers'
feedback.

All KOKUYO Employees Are Pledged to Accept Customer Feedback with Sincerity
In order to share customer feedback across the entire group, we use the intranet, VoiceClip, to share feedback ofcustomers with all the group employees (customer personal information is excluded beforehand). Both angry complaints
and words of appreciation from customers are updated weeklyon VoiceClip. Starting in fiscal 2012, we have been working
to improve visualization by displaying customer feedback on the top page of the Group's intranet. Additionally, the customer
feedback submitted to the customer support center is summarized in a database (personal information excluded), VoiceDB,
so that Group employees can access the database to freely navigate through previous feedback at need.

Customers have supported NeoCritz's functions as a portable pen stand andthe ease of confirming and taking out the contents in it. Also, use of the standhas expanded to use as a cosmetic bag and a case for mobile gadgets. As aresult, we have received a number of requests asking for unique colors thatare not traditionally used for stationery, larger sizes to increase the capacity,and smaller sizes to be able to fit in a bag. In response to the requests forcolors, we added stripes and a dot pattern on the exterior material and aLeft) NeoCritz in new colors
Left) NeoCritz in new colors

bi-color version that creates a beautiful contrast in the scenes of life such as a living room and caf?.
Additionally, in response to two types of requests, we used new ideas for increasing by decreasing andreleased NeoCritz Mini to propose space-saving ideas for a single item and increasing the capacity by using
multiple items.

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KOKUYO Group CSR Report 2015

With Employees

KOKUYO believes that the growth of companies is based on the growth of individuals who
work in these companies. KOKUYO, therefore, implements a range of initiatives to draw

forth the full potential of each employee with differing personal attributes and differing
perspective and values to realize its own growth and development.

61p Personnel System

71p Achieving a Good Work/Life Balance

63p Human Resource Development Program

74p Support for Active Participation of Diverse Human

64p Enhancement of Global Human Resource Development
69p Basic Framework for Diversity

Resources

79p Labor Practices/Safety and Health81p Healthy Living and Mental HealthViews linked with the corporate philosophy, which have been highly valued by KOKUYO

Those who do not undergo personal transformation
Shonosuke Kuroda
can never bring changes to products

Those who can bring changes to themselves can bringchanges to products, and because changes arebrought to products, the society can be improved andchanged for better convenience of customers. KOKUYO
considers that products are ourselves and better
products are generated from our own growth. With thegoal of generating better value for our customers, newemployees to the top management aim to learn
constantly to continue making progress.

With Employees (Human Rights/Labor Practices)

At the KOKUYO Group, we see our human resources as the most important element of management. We are promoting
the creation of an environment to facilitate the growth of employees in their daily work and to bring the best out of each
employee. The personnel system is also one of the infrastructures that have to be improved. As the goal for 2020, the
KOKUYO Group is striving to create an environment where employees can work enthusiastically and be assessed, trained,
promoted, and treated fairly and equally regardless of race, nationality, gender, or age, while they repeat challenges andgrow to continuously create customer value to achieve a virtuous circle.

Creating an Environment that Facilitates the Growth of each Employee
We provide a fair assessment of employees` job skill and performance after clarifying the duties and roles of employees,
and we reflect the assessment appropriately in their treatment and compensation. We further review the result of theassessment and link it to the growth of employees and improve the environment to ensure that our efforts function well.
In fiscal 2012, KOKUYO introduced a renewed personnel system in which the capabilities, roles, and terms of employmentof managerial-level personnel were redefined. Along with the start of this system, consideration was given to how toleverage it to promote the growth of individual employees. Along with this, specific initiatives were begun in the areas ofgoal setting, evaluation, feedback, and reflecting results in terms of employment. Also, since the abilities, roles, and termsof employment of non-managerial personnel were redefined, after the redefinition of those pertaining to managerial
personnel, those of all levels of personnel in the system were renewed as of fiscal 2013. In addition, the KOKUYO Group is
promoting the development of a mechanism and an environment where capable and enthusiastic employees can play anactive role in a workplace and where they are appreciated for their performance regardless of race, nationality, gender, orage. One example is that, prior to 2012, the Group implemented a system to re-employ retiring elderly employees aged 60
to 65 after reaching the mandatory retirement age (hereinafter referred to as a “Senior Employee System”) to offer a placeof employment for the elderly who are older than 60 years old. However, starting in 2013, the Group reviewed the Senior
Employee System and considered offering a place of employment as a matter of course, bringing about a major change indirection to seek the display of higher performance and to further make the elderly a substantial part of the workforce, whichis expected to increase in future.
The KOKUYO Group is striving for the realization of an environment that facilitates the growth of employees through daily
pursuits and brings the best out of each employee by promoting active participation to increase job satisfaction and byreflecting the increased expectations in their treatment.

Creating the Environment where any Employee can make a Significant Contribution both
Overseas and in Japan
While the Group focuses on setting the renewed personnel system within Japan, we aim to increase customer value by
getting across the abilities and roles needed overseas so that the employees and companies can further progress together.

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KOKUYO Group CSR Report 2015

The personnel system becomes the basis for employees working for thecompany. Now that the working style has become diversified from employees
who wish to challenge various types of work extensively, those who preferfollowing through on one career, those who want to work actively even after
reaching retirement age to those who want to work while seeking a balance
between childcare/nursing-care and work, they are also seeking more flexible
ideas in the personal system.
We aim to realize the personnel system with the aim of creating anenvironment to facilitate the growth of employees in their daily work and tobring the best out of each employee, to allow them to plan their own future

Yoshiaki Morinaka
Human Resources Development
Division,
KOKUYO Co., Ltd.

and careers and challenges, and to receive fair and equitable evaluations, appointments, and treatment. By
doing so, our goal is to allow the KOKUYO Group employees to develop on a daily basis and the group to growas a corporation to provide better value to customers.

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KOKUYO Group CSR Report 2015

With Employees (Human Rights/Labor Practices)

KOKUYO is working to develop human resources with the aim of creating a workplace where each employee can work
enthusiastically and repeatedly take on challenges to grow and continuously create customer value.

Policy of Human Resource Development
The KOKUYO Group is promoting systematic individual development centered on three elements, including job site,
feedback, and training, with the goal of maximizing the individual value of each employee. The training is given mainly byprofession at each turning point for businesspersons to provide them with different opportunities to develop their potential
through training for selected employees and optional training, offering strong support for employees willing to accept suchchallenges.

Capacity-Building Programs
The KOKUYO Group has been holding annual cross-industry exchange training, better
known as the Open Challenge Program, since fiscal 2011 by inviting participants within
the Group companies who voluntarily put their name down. This program mainly aims
for the expansion of visions (to become aware of their own potential); acquisition ofknowledge, skills, and mindset required for future career formation; and meeting new
people (building of external network). By offering an opportunity to be inspired byexcellent human resources from different companies and industries, the participants canbe exposed to many learning opportunities and different values that are not available

Open Challenge Program

within the company, which is one of the greatest benefits. In 2014, a total of 40 selected participants of different ages andprofessions from different companies took part in eight different types of training courses in Tokyo and Osaka, Japan.
In addition to above, as a new initiative in 2012, the GL Workshop for group leaders, who are the core leaders in theworkplace, has been held. The two objectives of this program are to provide strong support for managers at the working
level for promoting the implementation of the KOKUYO Group's strategy and to develop management capabilities that will
enable us to continue to show results as a team. The program uses a unique approach by taking up actual problems and63

KOKUYO Group CSR Report 2015

With Employees (Human Rights/Labor Practices)

For over 100 years, KOKUYO has been serving the needs of customers in Japan through our products and services. With
the goal of serving the needs of global customers for the next 100 years, we have been proactively promoting the nurturingof human resources and an organization that can bring in global and continuous growth to become a truly Asian company
by 2020, regardless of nationality, race, gender, age, religion, and academic background. As part of the efforts, we arefocusing on the development of human resources who can promote business globalization both within and outside Japan.
By promoting the development of the potential abilities of employees at overseas subsidiaries, besides the employees inJapan, we are aiming to re-create KOKUYO's values for customers in each country so that the employees can play activeroles around the world.

Emphasizing Human Resource Development throughout Asia
Program for Training Global Leaders
The KOKUYO Group aims to grow as an Asian company. Therefore, Global Leader Development Program is conducted for
global leader candidates who will be responsible for leading the development of the Group in Asia. In 2014, the third year of
the program, after a kickoff meeting in April, the program run for about seven months and ended with a final presentation
meeting in November.
The program was offered based on the following:

1. Global leadership session, which aims to allow participants to understand the ability required for a global leader
through case studies, exercises and role-play.
2. Diversity session,which aims to provide an understanding of diversity in business.
3. Corporate philosophy session,which teaches participants to use their own words to transmit the corporate
mission and founding spirit.
4. Global leadership review, which offers an opportunity to come face-to-face with their leadership skills
transformed through training.

In addition to the training in Japan, the program offered an opportunity for participants to develop the ability to propose asolution for business challenges through communication with local members in the KOKUYO Group's overseas subsidiaries
with the aim of widening their vision and improving their adaptability as global leaders. In 2014, the participants divided into
four teams: three teams visiting China and one team visiting India, and at the final presentation meeting on November 13,
they provided recommendations to management executives.

Meeting in India.

Session for corporate mission.

The Fujian Province (China) teamwon first place in the businesschallenge recommendationcompetition.

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KOKUYO Group CSR Report 2015

I was on a team of seven people, and we worked on developing andrecommending a sales strategy for the furniture business in China throughon-site fieldwork in Fujian Province, China. While many members did not havean opportunity to get involved with foreign relations in the course of day-to-day
activities, we learned about the difference in market environments and that
our strengths in Japan were not effective as they are through the actual
communication with users and sales outlets in China. On the other hand, Ialso experienced opportunities that were different from businesses in Japan's
mature market. In addition, the program was extremely meaningful for
members who had less of a chance to be involved in developing a businessstrategy in their day-to-day tasks to experience the process.

Taro Yamashita
Corporate Management
Department,
Corporate Management Division,
KOKUYO Furniture Co., Ltd.

Top Executive Personnel Development Training in China
For the first time in fiscal 2014, top executive human resource development training was held by inviting five candidates as
next-generation top executives of KOKUYO Commerce and KOKUYO Furniture Commerce & Trading in China. The aim of
the program is to develop next-generation executive personnel who can communicate and expand KOKUYO's value andstrength in China. After the program began in June, the program ran for about six months and ended with a final
presentation meeting in November.
The program was offered based on the following contents:

1. The finance and accounting session aimed to develop the ability to read the financial statement to evaluate
corporate value and use it to make business judgments.
2. The strategy building session aimed to develop the ability to read the changes in the external environment andlook down on the internal organization and use it for business development.
3. The strategic issue workout was offered in parallel with a daylong training to make a recommendation for new
business of the subsidiaries in China.

The program offered four sessions in China (Shanghai), and the final presentation meeting was held in Japan (Shinagawa).
The participants were divided into two teams to create a strategy story. They validated the evidence on-site and received
interval coaching to repeatedly work on polishing their skills, and on the final day, they provided their recommendations tomanagement executives.

The finance and accounting session
held in the flagship showroom in
Shanghai

Strategy building session

A commemorative photo taken at
the Shinagawa Showroom after the
final presentation meeting

Program for Training Chinese Leaders
Beginning in fiscal 2014, KOKUYO offers a training program for leader-class personnel in subsidiaries in China. The logicalthinking training was offered in Shanghai and Beijing in December and a total of 42 participants from KOKUYO Commerce;
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KOKUYO Group CSR Report 2015

S&T Logistics Co., Ltd.; KOKUYO Furniture Commerce & Trading; and KOKUYO Design Consultants Co., Ltd participatedin the training program.
The program sets the following two goals:

1. Understand desired roles and mind as leaders and have a sense of self required to move up to managerial
positions in the future.
2. Pursue essential challenges with a complete view and learn the method of logical thinking for problem solution.

The participants learned brainstorming and the KJ method, pyramid structure, MECE, deductive method, inductive method,various tree structures, hypothesis thinking, PREP method and the framework of decide-communicate-execute, as well aspracticed discussion methods and how to compile and communicate using logical thinking skills in a group setting.

Training session in Shanghai

Training session in Beijing

At the Shanghai Flagship showroom

Training for Country Managers in the Stationery Business
KOKUYO S&T offers training for country managers with the goal of sharing KOKUYO's
important corporate mission and values with managers in the Stationery Businessoverseas, as well as building personal human networks, acquiring knowledge, andimproving skills. In 2014, a total of 20 managers from China, Vietnam, and India
participated in the training program, which was the fourth year since the training washeld. As a member of the KOKUYO Group, in addition to learning KOKUYO's founding
spirit, corporate mission, and history, participants also had a chance to experience the
At KOKUYO Product Shiga
persistence and completeness practiced in manufacturing and distribution facilities inJapan and meet with members of management, key persons, and others in the stationery business to build personal human
networks. It became a good opportunity to understand the significance of embodying KOKUYO's corporate mission andvalues in their countries by seeing actual examples in practice at the scenes of manufacturing in Japan.

Training for Overseas Financial Officers (Furniture Business)
From September 25 and 26, 2014, five financial officers of the overseas bases in thefurniture business received training in Japan. The program sets the following threegoals:

1. To ensure that the KOKUYO Group's corporate philosophy and mission are
inherited and the significance is firmly taught so that the participants can realize
and utilize in day-to-day decision-making and tasks for succession.

Financial affairs training

2. To ensure that as members of the KOKUYO Group, they understand the accounting policy and know their roles asoverseas financial officers with a heightened awareness.
3. Through direct communications with the members of head office in daily business operations, they can facilitatecommunication and develop a sense of togetherness.

Through the two-day training program, the participants boosted their awareness as members of the KOKUYO Group.
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KOKUYO Group CSR Report 2015

Toward the Utilization of International Human Resources Working in JapanThe KOKUYO Group is advancing the recruitment of the workforce based on ability, regardless of nationality, race, gender,
age, religion, and academic background, and hires international human resources. As the component ratio of international
personnel is increasing year by year, the number of personnel with foreign citizenship working in offices in Japan is also
increasing. In order to be on the same wavelength with the international employees who joined us with dreams and hopesof working in a Japanese corporation, we communicate with each other on a routine basis. We aim to utilize the value of
diverse human resources by not only understanding their perspectives of their own careers but also providing detailed
support for their problems caused by differences in language, culture, and customs.

What we are aiming to realize is a group where self-directed, independent
minded employees with strong will and abilities have a deep sense of
empathy for KOKUYO's corporate philosophy to fulfill its corporate strategies
in Asian subsidiaries, regardless of race, nationality, gender, religion,
educational background and concept of values. Aiming to become a truly
Asian company, KOKUYO will step up its drive to develop global humanresources and support personnel development throughout Asia so that theemployees working in the KOKUYO Group around the world can relate to thecorporate philosophy and concept of values and continuously work withsatisfaction.

67

Yuki Akagi
Human Resources Development
Division,
KOKUYO Co., Ltd.

KOKUYO Group CSR Report 2015

challenges faced by managers. The participants share the know-how that they have developed on a field and exchange
opinions to seek out ideal solutions. The program started by getting the participants to recognize the roles of managers, andthey learned how to set and solve essential challenges and points of developing subordinates. Since fiscal 2012, over 500
people participated in the workshop.

Promoting Understanding of Human Rights
The KOKUYO Group conducts training programs for various levels of employees to promote a better understanding andawareness of the importance of respecting human rights, as well as CSR and compliance. The aim of these activities is toencourage the development of a company and society that is without any kind of discrimination. In addition, KOKUYO has
provided for the KOKUYO Hotline, which makes it possible for employees to report harassment and human relationshipissues at any time, while also providing related counseling services. In fiscal 2014, the internal activities to increase
understanding and awareness of human rights included training programs that entitled “Respect for Human Rights Brings
New Life to the Company and Everyone Can Enjoy a Better Life,” for employees newly entering the Company. Also, themental health seminars are held at training for newly appointed managerial staff on a continuous basis with the aim ofunderstanding characters coming from different backgrounds.

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KOKUYO Group CSR Report 2015

With Employees (Human Rights/Labor Practices)

The KOKUYO Group promotes diversity as an essential initiative for sustainable growth and development. We believe thatdiversity means creating a work environment where many positions and values are mutually recognized and various work
styles are permitted, thus making it possible for each and every employee to draw on his or her innate abilities. KOKUYO
has identified the following four basic themes related to diversity:

Establishment and Penetration of Support Systems
The KOKUYO Group is working to make improvements in its systems that will create an environment where it is easy to geta good balance between work and life, such as bearing children, raising them, and caring for senior family members. (Theparts underlined are beyond the range of statutory provisions)

Statutory system for the purpose of child-raring and nursing-care support*
Maternity leave
Spousal maternity leave

14 weeks before and after childbirth (22 weeks for multiple-fetus pregnancy)
A leave of absence granted when a spouse is giving birth. Two days for each childbirth.
A childcare leave is given until the end of April after a child reaches the age of 1, or until
the child reaches the age of one and a half, whichever longer. (For those who were born

Childcare leavein April, it is given until the end of April when the child reaches the age of two)
*Including the Additional Leave for Mom & Dad (Extension of period when both parents
take a childcare leave)

Sick/Injured childcareleave

Up to 5 days per year, or 10 days for two or more children, to look after a child below
school age.

Family care leave

Up to a total of 183 days for each person requiring nursing care.

Nursing care leave

Up to 5 days per year per person requiring nursing care, or 10 days for two or more.

Short working hour system

Childcare: Until a child finishes its third year in elementary school.
Nursing care: Up to three years per person requiring nursing care.
Once a week, in principle.

Teleworking

Childcare: Until a child finishes its third year in elementary school.
Nursing care: Up to three years

Re-employment system

Eligible personnel include regular employees who left their jobs due to marriage, childbearing, childcare, job relocation of spouse, study abroad, volunteer work, career69

KOKUYO Group CSR Report 2015

change and other reasons recognized by the company.
* The system is applied to KOKUYO and its principal subsidiaries (In principal, all employees are eligible for flextime work schedule.)* See page “2015data.pdf” 2p 「Number of Employees Taking Leave for Childbearing and Senior Care」

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KOKUYO Group CSR Report 2015

With Employees (Human Rights/Labor Practices)

The KOKUYO Group is committed to providing ideal working conditions with consideration forachieving a good work/life balance. These efforts have been recognized by the government andsix of the group companies have received a certification logo (nickname: Kurumin Mark) as ofDecember 31, 2014. The Kurumin Mark is a certification logo issued by the Ministry of Health,Labour and Welfare, which promotes the improvement of the nation's declining birth rate, basedon the Law for Measures to Support the Development of the Next Generation, to recognize
corporations and organizations taking an active stance in supporting child-raising.
[Companies that received the Kurumin Mark] As of December 31, 2014
KOKUYO Co., Ltd., KOKUYO S&T Co., Ltd., KOKUYO Furniture Co., Ltd., KAUNET Co., Ltd., KOKUYO Marketing Co.,
Ltd., KOKUYO Engineering & Technology Co., Ltd.

Four seminars were held to raise awareness of team strategy for maximizing families withsmall children.
It has become the time when working parents are quite common. As symbolized by the word, ikumen; men who are actively
involved in child-raising, an increasing number of men want to actively take a role in the raising of their children. Also, due
to child-raising, nursing care, an aging population, and other family circumstances, the way of working has become
diversified, such as short working hour system, teleworking and contract worker, it has become essential to achieve results
as a team.
Although the government has been promoting women's active participation in the workplace and corporations enhanced thesystem for maternity/childcare leave, there are limitations just to expect working mothers to change their way of thinking anddedication. The key is that supervisors, co-workers, and husbands must be aware of the working mothers' career and bringchanges to their own working style. Based on the awareness of how the workplace can support supervisors and working
parents so that working parents can be happy at work and home, the WorMo'* and KOKUYO CSR Division jointly hosted a
total of four seminars to raise awareness of a team strategy for maximizing families with small children by inviting
wide-ranging participants inside and outside the company.
The seminars were held with different targets; the first seminar targeted supervisors, the central players (women) for thesecond seminar and the partners for the third seminar. Each seminar consists of two parts and was joined by teachers withunique characteristics, including Mr. Ando, the representative of Fathering Japan, who gave a lecture to enrich participants'
understanding, which was followed by a discussion on the recognition of challenges and awareness. The final forth seminarcomplied with the awareness and challenges raised in the previous three seminars and was offered in a workshop format todetermine the system and device toward the realization of working styles for increasing team strength. The participants leftcomments that “I received a memorable teaching that the setup for child-raising leads up to the setup for work. This helpedme realize I should be more cooperative in helping with household chores instead of working late,” and “The seminarbroadened my outlook that we should support each other's private lives without giving special weight to people who areraising their children.”

Lecture given by Mr. Ando ofWorkshop on child-raising andWorkshop on career progression

Fathering Japan in the first seminaron the theme of “What's iku-boss?
supervisors who actively support

career in the second seminar on thetheme of “Social politics thatworking mothers should know”

with partners in the third seminar on
the theme of “Good balance of workand child-raising that husbands

families with small children canshould consider”

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KOKUYO Group CSR Report 2015

increase team strength.”*WorMo’ is an information website that defines child rearing and working from a standpoint of learning and plays an active role in increasing as
many as possible the number of positive thinking working mothers who consider they can enjoy both child-raising and working and develop
personally. The website offers unique information such as interviews with fascinating working mothers who are raising children or raised children
before.

Thanks to the opportunity given through the team strategy seminar andworkshop for maximizing families with small children, we took part in the
Iku-Boss Project Alliance sponsored by the Fathering Japan.
In order for organizations to maximize the abilities of employees respectively who have their own problems(employees with constraints, etc.), the management must also undergo changes in their way of thinking. By
participating in the Iku-Boss Corporation Alliance, participating advanced corporations with the same awarenessof challenges can share their knowledge to make it an opportunity to reconsider their diversity management aswell as working style and workplace climate. In addition, by considering the image of ideal supervisors(Iku-Boss) in the new era through the collaboration of corporate networks with the aim of developing further,
KOKUYO strives to use it for the solution to challenges held by customers as a corporation that suggests newworking styles.

Practice of effective work style
I am a mother of a 16-year-old son and 6-year-old daughter. I use the short working
hour system and strive hard to maintain a good balance of work and childcare with thehelp of my family. In order to use the limited time effectively, I prioritize things I need to
do and try not to accumulate work and hold back my feelings by having a talk at all
times. I also communicate my desire to make a contribution at work and take action to
gain understanding from colleagues. When my oldest son entered an elementary
school, there was no short working hour system, and there was a time when my son
was under a burden. When I gave birth to my daughter, I was able to use the childcare

Tomoko Doe
Corporate Communications,
KOKUYO Co., Ltd.

leave system before she turned two years old thanks to the addition and revision ofsystem. I am grateful that I was able to take time and face my two children, and thecommunity tie was encouraging. After becoming a mother, I learned a lot about persistence and following through. There
are many challenges when it comes to work, but I wish to be a professional, family person and mother who can turnchallenges into my strength.

Keeping a fulfilling balance of work and childcare
I strive to raise my six-year-old son and three-year-old daughter in tandem with my wife
who also works in the same office. As we try to experience my children's lives at
daycare firsthand, we do our best to send them off to daycare together as much as
possible. To do this, I make a habit of finishing my work on time and have more chances
to talk with my wife during commute hours. In addition, if we have to work late, because
we know each other's work status, we can easily make adjustments smoothly, which is
helpful. Our children are now old enough to use the products I develop, and it hasbrought more happiness into my work and private life. I will continue to do my best to
enjoy fathering my children so that everyone in the family thinks each day is fulfilling andKiyoshi Shimizu
ISP Development Department,
Production & Procurement Division,

fun.

KOKUYO S&T Co., Ltd.

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KOKUYO Group CSR Report 2015

Creating pleasant work environment as an Iku-Boss
I work as a manager of the Solution Planning Department and work hard to be a good
father for my four daughters. I noticed the importance as an Iku-Boss when a competentfemale staff member said she wanted to leave the company for childbirth. Although I did
not give serious thought to the difficulty of maintaining a good balance between childraising and work until then, I started to think it was a challenge that a supervisor should
address in more responsible ways instead of letting female members fighting alone. For
instance, when I have to take a day off due to a family matter, I let my team members
know the reason. By doing so, I think it makes my junior staff feel more easily to take a
day off for their private reasons. In order to increase the number of Iku-Bosses insociety in the future, I want to have more meaningful discussions about approaches for

Kanya Shimoji
Solution Planning Department,
Corporate Management Division,
KOKUYO Furniture Co., Ltd.

increasing productivity over the medium term and creating a pleasant work environment
as supervisory staff.

Initiatives for supporting a good balance of work and nursing care
The necessity for providing nursing care can happen to anyone. The KOKUYO Group
provides support for balancing work and nursing care so as to create an environmentthat employees can bring out their own strengths. For instance, KOKUYO S&T works
with external experts to establish a free consultation service and hold seminars to
support the balance of work and nursing care. The nursing care consultation service is asystem for employees to seek help in solving problems related to nursing care andreceive proper advice from experts according to their individual situation. The seminars
for supporting the balance of work and nursing care invite lecturers who have vast
knowledge and experience in nursing care to provide the knowledge necessary tomaintain a good balance in an easy-to-understand way even for beginners. The
participants left positive comments that “I came to the realization that there is something
I can prepare for my parents when they are in good health,” and “The seminar helped
me to take specific action.” Besides, the internal portal site offers useful information on acontinuous basis.
In 2014, we newly published a checklist for preparing for a good balance between workand nursing care. The checklist offers twenty points to confirm in advance to prepare
when family members are in need of nursing care. We forecast an increase in thenumber of employees who must provide nursing care while working. To prepare for the

Seminar for supporting the balanceof work and nursing care.

It also offered an opportunity toreceive simulated experience of
having the body of the elderly.

coming of such a time, we are committed to implementing initiatives to support the balance on an ongoing basis.

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KOKUYO Group CSR Report 2015

With Employees (Human Rights/Labor Practices)

Not only is the respect of human rights, the KOKUYO Group is making its efforts to develop a work climate that respects
diverse individual characteristics, concepts of value and lifestyles of different backgrounds, such as nationality, race,
gender, religion, age, academic background, career, and the presence or absence of disabilities.

Active participation of senior employees
The KOKUYO Group is working to broaden the place where senior human resources can take an active role by maximizing
their past experience and knowhow, as well as the initiatives to inherit their high skills.

An in-office college Quality Seminar was held
KOKUYO S&T holds a study session called Quality Seminar, where senior employees
act as a lecturer to positively teach younger employees their experiences and know
how. So far, the seminars were held to study the creation of quality standards, how toproceed with DR/SR (design review/safety review), and the statistical tools at
acceptance inspection on a periodical basis. Through these activities, we are engaged
in promoting active participation of senior employees and the development of young
employees.

Quality Seminar

Mie Factory Instructor Group System
The Mie Factory of KOKUYO Furniture launched an instructor group in August 2012
with the goal of handing down skills and techniques, maintaining and improving
workmanship, as well as improving efficiency in chronic challenges in the workplace.
With the changes in the positions and work contents after reaching retirement age formanagerial personnel, senior staffs tend to experience a decline in motivation for work.
However they have an extremely important role as instructors in guiding and developing
junior staffs by utilizing the knowledge and skills they developed over years. The
Instructors at age 63 on averageoutcomes of junior staffs improvement in the workplace and increased efficiency lead tothe motivation of senior staffs for work and even a meaningful life. With the consistent motto of seeing all things to the end
rather than finishing by saying, senior staffs are committed to offering guidance on a daily basis.

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KOKUYO Group CSR Report 2015

KOKUYO Group's Efforts Toward Employment of Persons with Disabilities
Since the period prior to World War II, the founder of KOKUYO
supported disabled employees. The founder of KOKUYO wished torealize the social participation of people with disabilities and so in 1940
started employing people with hearing difficulties at the main factory.
KOKUYO has remained firm in its belief of that time, which is to train
human resources who are capable of making the most of their innate
abilities and follow KOKUYO's corporate philosophy, Enrich the Worldthrough Our Products, without treating people with disabilities any
differently.
Although the employment of people with disabilities became mandatory
in 1976, KOKUYO's employment rate for people with disabilities at thattime already reached 1.76%, which is more than the statutory
employment rate. As of January 1, 2015, the employment rate for people
with disabilities in the KOKUYO Group is 2.14%. While the Group has
already achieved the statutory employment rate of 2.0%, we are pledged
to promote the employment of people with disabilities by making use of
the Corporate Group-wide System *1 with the special subsidiaries,
KOKUYO K Heart and Heartland.
Additionally, aiming to develop a progressive new business model for the employment of
the disabled people, KOKUYO K Heart and Heartland offer a range of job opportunities
and working styles for employees with disabilities, depending on the characteristics ofthe disabilities. KOKUYO was recognized for its efforts toward employment of persons
with disabilities and was selected for inclusion in the 2013 Diversity Management
Selection 100 Awards, which was held by the Ministry of Economy, Trade and Industry.
KOKUYO Heartland alone was also recognized for its efforts of focusing on agriculture
for increasing jobs available for disabled people and for its high rate of hiring theintellectually and mentally challenged people. Heartland received the Osaka Prefecture
Heartfull Corporation Award in 2009. The company was also recognized for its efforts incontributing to the hydroponic vegetable farming business and the promotion of theemployment of disabled people in the region and selected for inclusion in the Discover
Treasure of Rural Areas *2 in 2014.
*1: Corporate Group-wide System
Under this system, employees (disabled people) of special subsidiaries are deemed to be employed by the parent company (or the corporategroup) and can be included in calculating employment ratios.
*2: Discover Treasure of Rural Areas
The Cabinet Secretariat and the Ministry of Agriculture, Forestry and Fisheries select excellent projects aimed at rejuvenating and improving
income in rural areas.

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KOKUYO Group CSR Report 2015

Initiatives at KOKUYO K HeartAt the start-up, KOKUYO K Heart served as one of the ordinary subcontractors in the
KOKUYO Group as it mainly engaged in the printing and binding of catalogs andleaflets. The Group left out the employment of persons with disabilities in the hands of
KOKUYO K Heart, causing a challenge that the business volume at KOKUYO K Heart
became unstable. To create a new business model for the employment of persons withdisabilities that makes the most of KOKUYO K Heart, the group companies jointly
reorganized operations to entrust KOKUYO K Heart with a portion of operations (BPO:
Business Process Outsourcing). With this, other group companies can focus on their
original operations to improve productivity, while enabling KOKUYO K Heart to securewide-ranging jobs according to each person's ability, not just simple tasks.

Members of the Production Groupat KOKUYO K Heart.

To help the employees with disabilities to perform tasks of higher value, senior employees with know-how are invited to
KOKUYO K Heart from the other group companies as instructors to establish a unique management system. In addition,
KOKUYO K Heart introduces flexible work styles and systems, such as teleworking and flexible work schedules. In this way,
we have successfully defied the stereotype that persons with disabilities can only perform simple tasks and opened up
opportunities for new challenges by offering a wide variety of tasks and work styles.
* See page ●● 「KOKUYO K Heart 」

Initiatives at KOKUYO Heartland
To provide job for intellectually and mentally challenged persons, Heartland utilizes
persons with disabilities to operate the hydroponic culture of salad spinach, ship tomajor grocery chains with a stable quality and establish a production system while
making use of know-how as a traditional manufacturer. In order to assist those withdisabilities, the hydroponic farms are equipped with computers and machinery toautomate temperature control, which is difficult for those with disabilities, as well as
automatic packaging machines and panel washers to eliminate manual packaging andreduce work hours.

A workplace of Heartland

In the same way as Heartland, the KOKUYO Group has built a network named the Heart-full Agri Association and started
activities as an attempt to deepen its cooperation with other companies engaging in hydroponic culture to facilitate theemployment of persons with disabilities. The related organization of Osaka Prefecture also joined the network. By sharing
problems and challenges of business operations at each company, we are striving to ensure stable quality, a steady supply,and stable prices.
* See page ●● 「Heartland」

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KOKUYO Group CSR Report 2015

While the KOKUYO Group is pushing ahead with diversity, it is also making steady progress in the employmentof persons with mental illness, which will be mandatory in 2018. KOKUYO K Heart hires human resources
suitable for each assignment, regardless of types and degrees of disabilities, to allow the other groupcompanies to execute business plans swiftly, and each employee engages in support operations according to
the aptitude.
K.Y. (Male in his 40s) In charge of manufacturing duplicate keys for office furniture at KOKUYO Logitem Co., Ltd.
Mr. Y developed a panic disorder about twenty years ago. Currently, he is very
happy that he can engage in making duplicate keys for office furniture andappreciates the company's understanding of his illness. In the future, hewishes to take a further step in his current task, and at the same time, hewants to help eliminate the prejudice against mental disorders due to incorrectunderstanding by participating in a community for those who are mentallychallenged.
H.K. (Male in his 20s) In charge of manufacturing duplicate keys for office furniture at KOKUYO Logitem Co., Ltd.
Due to a disorder, Mr. K experiences a hard time remembering things andforgets easily sometimes. Because of this, he tries to take as many notes as
possible so that he can go back and read them again later. The production ofkeys provides him with an environment where he can focus, making it easy for
him to work. He finds great joy and a sense of achievement in doing so. Also,from April, he wishes to go to an evening high school to study once again.

Initiative of KOKUYO ART PROJECT for enriching the minds of workers, learners and people
in community.
KOKUYO started its project aimed at enriching the minds of workers, learners, andpeople in community by adding art and a playful attitude to common items.
Titled KOKUYO ART PROJECT, it is a project for getting the best out of fascinating
artworks into products in various life scenes by working together with groups andindividuals related to art with the aim of making everyday life fun and enriched.
For the first term of the project, KOKUYO collaborated with Able Art Company* todesign and release new products.
This time, KOKUYO S&T released the field notebook in three designs under thetrystrams brand. Kaunet developed eco-bags, sticky notes, and notebooks that utilize
the colorful and cute design. In addition, KOKUYO Furniture offers Art Madre, whichuses the artwork of artists with disabilities as a fabric for lobby chair series for lobby
Madre. KOKUYO's special subsidiary KOKUYO K Heart also offers envelopes andbusiness-card cases as promotional products in the KOKUYO Group to proceed with
the initiative in an integrated manner.
The proceedings earned from the current collaboration project are partially provided toAble Art Company as author fees depending on the sales volume of products as a

Field notebook collaborated with
Able Art Company

support of the work of people with disabilities.
*Able Art Company
Aiming to offer an environment where people with disabilities can transform artistic ability into a job, it was established in 2007 to help them finda job by utilizing their creative work in advertisements and product design.

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Kaunet's original products

Art Madre

Envelopes and business-card caseIn 2007, we launched Able Art Company in collaboration with the nonprofit
organization Able Art Japan in Tokyo and the nonprofit organization Maru inFukuoka with the goal of helping people with disabilities find a job using theirart skills. Nowadays, although there are demands that people with disabilities
also work as a member of society, they are left with insufficient options. To that
end, we wanted to help those who enjoy drawing and expressing to transformtheir interest into a business, which is why we launched the organization. Art
is a driving force in acknowledging each other's differences and diversification.
By utilizing rich characteristics in expression in manufacturing and systemdesign, we think we can create a next-generation society where more people
can have a decent live.

78

Shizuka Morishita
Managing Director,
Tanpopo-No-Ye Foundation
Kansai Office, Able Art Company

KOKUYO Group CSR Report 2015

With Employees (Human Rights/Labor Practices)

The KOKUYO Group is promoting safe, secure, and pleasant working environments while encouraging active exchange of
opinions with the field site as they are vital to smooth business operations.

Fundamental Policy for Workplace Safety and Health

Initiatives That Match the Requirements of Each Workplace Category
Activities of the KOKUYO Group extend from manufacturing to construction and cargo transportation. We undertake healthand safety measures that match the requirements of each activity to help maintain safety, peace of mind, and comfort for
employees. Monthly Safety and Health Committee activities in each workplace are the basis for health and safetymeasures. There are also many special events during National Safety Week and National Health Week in Japan to raiseawareness of the importance of workplace safety and health.
(1) Manufacturing
During National Safety Week in July, the employees of all seven KOKUYO Groupfactories are invited to convene a safety conference and safety meeting to ensure thatsafety is given the highest priority. By the same token, aiming to further radiate theculture of safety first in overseas factories, overseas employees are convened to ameeting and provided with training by teams. The Mie plant of KOKUYO Furniture helda mandatory seminar, titled the four-round KYT seminar, to increase the sensitivity
toward safety. Another approach is a safety coaching by safety consultants, which has
been held continuously.
(2) Construction
To prepare for the Safety Week starts on July 1, the KOKUYO Group Construction
Safety and Health Conference was held at seven locations in Japan from June 4
through 26. This event was conducted by the Central Safety and Health Committee.
Group employees were provided with regular safety education and a training program
for laws and regulations to ensure safety in accordance with the Safety and Health Act
and Construction Industry Act.
(3) Transportation
Group companies keeps confirming that the workplaces are clean and orderly every day
and hold monthly safety patrols. Furthermore, to make transportation workplaces in the
KOKUYO Group safer, there are regular training sessions for operating forklifts, working
in high places, and performing other tasks. This training improves the safety skills ofworkers. For off-site work, workers check the safety and quality of all tasks performed atdelivery sites and make continuous improvements. KOKUYO Supply Logistics
conducted complete inspection from stepladders to stools in each workplace to ensure
work safety during repair and replacement.

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(4) Offices
Besides the Monthly Safety and Health Committee activities in offices, many workplaces
have a weekly No-Overtime Day and a patrol system to ensure that no one stays late on
those days. Those who have a lot of overtime are encouraged to have an interview withan industrial physician to confirm their health condition and submit an improvement
plant for the following month. For disaster preparedness, the offices in the east and west
regularly implement disaster and evacuation drills to confirm the roles of organizations
and individuals in an emergency.

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With Employees (Human Rights/Labor Practices)

Under the philosophy, “The health of employees serves as a basis for supporting the execution of group strategies,” theKOKUYO Group, centering around the KOKUYO Human Resources Development Department, has been making efforts toimprove the health of entire employees.

KOKUYO Group health targets and the 2014 results
We have established the following targets for the Group's workforce to prevent lifestyle diseases for the three years starting
2013.

KOKUYO Group health targets

Percentage of employees with a BMI over 25(overweight)
Average percentage of employees who
smoke

Results for 2013

Results for 2014

Goal for 2015

21%

23%

20%

26%

26%

19%

Our Specific Efforts(1) Healthy meals at the Company cafeteria
KOKUYO has been promoting healthy meals below 600 kcal with less than 3 g of salt at cafeterias. From August to
November 2014, the campaign for healthy meals was held that a ticket was attached to each healthy meal. Employees whocollected twenty tickets would receive a free healthy meal. During the period, a number of employees purchased more
healthy meals than before and the effort of promoting healthy meals was successful.
(2) Health seminar
Continued from 2013, health seminars were held periodically. As its main effort, besides the regular seminars for being
active physically, we began implementing seminars for mental health with the use of the mindfulness method. Also, theseminars are offered after work and during lunch to allow employees who work in reduced hours to take part. Also we
expanded the area to Nagoya and other locations where the seminars were not held previously, to ensure that more
employees become conscious of their health.
(3) Mental health
Employees have access to mental health checkups to prevent problems related to stress. The Employee Assistance
Program (EAP) gives individuals access to counseling with an external professional directly or via telephone or e-mail. As
another effort to conduct mental health checkups for all employees, we measured the necessity of taking countermeasures
for mental health at each company, as well as to offer training programs for management-level employees based on the
results of checkups.

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(4) Implementation of health campaign in cooperation with the health insurance association.
KOKUYO took part in the walking campaign held by the health insurance association in the past and sponsored the GG
campaign twice a year. By setting health-related goals, the employees who achieved thegoals were awarded withwatermelon in summer and citrus fruit in winter. The campaign offered delicious rewards while promoting healthconsciousness, of which the number of participants was increased about 100 from 340 in summer to 440 in winter.
KOKUYO is committed to continuously promoting initiatives to change employees' consciousness toward health and have
fun in becoming fit.

The KOKUYO Group health goals marked the third year since it began as an effort for the entire KOKUYO Group. We arecommitted to supporting the health of employees as part of our corporate efforts to prevent employees with the risks ofillness and those who are anxious about a current illness from developing a more serious illness, as well as to continuously
prevent lifestyle diseases in the future.

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With Business Partners
The KOKUYO Group creates new value together with its business partners and pursues

customer satisfaction. In addition, to build relationships of trust with its business partners
and achieve mutual development, KOKUYO issued its Basic Procurement Policy.

84p Procurement Policy
86p Working together with Our Suppliers
88p Working with Supply Channel Participants
91p Initiative of KiSPA for deepening the bond with retail stores

Views linked with the corporate philosophy, which have been highly valued by KOKUYO

If there are only one or two reasons behind the popularity,
a competitor will catch up in no time.
We must develop a product that customers say
the product is somehow good without exact reasons.
Zentaro Kuroda

He described a "somewhat good product" as a value thateven customers could not sum up as the reason why the
product was selected in a simple sentence. Offering a"somewhat good product" is a challenge for everyone
who is engaged in any process before a productreaches a customer. It is KOKUYO's basic attitude that
we want to share with our business partners who areaiming to add value in the entire value chain.

With Business Partners (Fair operating practices)

As it aims to become the “honor of Asia,” KOKUYO Group, with the comprehension that mutual understanding and mutual
development with suppliers will be increasingly important, issued its basic procurement policy and its guidelines in March2013.

Building Stronger Relationships of Trust with Our Suppliers
As corporate activities are becoming more globalized, KOKUYO Group is well aware that managing its own company andits subsidiary companies is insufficient to fulfill the scope of social responsibility. In 2013, the Group therefore invited 32
principal subcontractors to give an account of the procurement policy and implemented a self-examination questionnaire for
feedback to the subcontractors. In 2014, we sent the basic procurement policy and guidelines to nearly 400 suppliers. We
strive to further build relationships of trust through these activities.

The Kokuyo Group shares its Corporate philosophy of “Enrich the world though our products” with its suppliers,
and, while working to create relationships of mutual understanding and confidence as well as fulfillig its social
responsibility, continues to contribute to social development.
Pursuit of Quality and Safety
The Group strives to maintain its position as the first choice of its customers, while responding to the special
needs of various countries and regions as well as pursuing the highest standards of quality and safety.
Mutual Development
The Group respects and observes the regulations as well as social norms of various countries and regions,while also conducting fair and transparent transactions, as it works to structure sincere relationships of mutual
trust and achieve mutual development.
Respect for Human Rights
The Group understands the culture and business customs of various countries and regions and aims for asociety where the rights of all people are respected.
Environmental Protection and Symbiosis with Local Communities
The Group takes environmental protection initiatives on a global scale, and, by actively participating in the life of
the community and acting as a good corporate citizen, seeks to create mutually beneficial relationships withsociety.

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KOKUYO Group Procurement Guidelines
The Kokuyo Group fulfills its social responsibilities throughout its supply chains. To contribute to society through its businessactivities, the Group has prepared its Kokuyo Group Procurement Policy and the Kokuyo Group Procurement Guidelines.

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With Business Partners (Fair operating practices)

To enhance the value that we offer to customers, we aim to achieve mutual development based on long-term relationshipsof trust by sharing our strategies and policies with both our manufacturing and logistics service suppliers periodically.

KOKUYO Furniture holds subcontractor meetings on a periodic basis
KOKUYO Furniture holds subcontractor meetings with major subcontractors twice a year . In the first one, participantsreflected upon the previous year and shared the current year's business strategy, and in the second one, they looked backover the first half and held discussions centering on the prospect for the latter half. In addition, in the execution of businessstrategy, subcontractors that especially made excellent efforts were awarded as power subcontractors and presented with acertificate of commendation. The contents of the initiative were shared during the meeting so that each subcontractor could
use it to improve themselves. We will continue to learning from others for co-existence and co-prosperity with the aim ofdeveloping products that exceed customers' expectations.

Explanation of policy

Presentation of a certificate ofcommendation

A get-together for strengthening thecohesiveness

Kaunet Holds Catalog Partner Kickoff Meetings
Kaunet publishes its mail order and online catalogs twice yearly in February and August.
When preparation for the next catalog begins, each time, Kaunet holds a Catalog
Partner Kickoff Meeting that is attended by its suppliers (procurement suppliers) andother companies involved in preparation of the catalogs. At this meeting, thepresentations are made on the editorial policy of the upcoming catalog, policies forchoosing products to be included in the catalog, and product development policies. The
purpose of these meetings is to share with and help participants gain an understanding
Explanation of policyof Kaunet's ideas and strategies. Kaunet's added value is more than just price and agood selection of merchandise. Kaunet also takes care to add value by making it easy for the customer to select items andoffers the awareness to come up with solutions to help customers overcome any dissatisfaction and problems that arise. By
staying in close touch with suppliers and partner companies, Kaunet aims to be a company that is chosen over and over by
its customers.
The 2014 meetings were held on April 15 and October 9. The meeting held on October 9 consisted of two parts in themorning and afternoon so that Kaunet, which celebrated its 15th year since establishment, offered a detail explanation of
the category policy for the next catalog. The morning session invited partners of office supplies and office automationequipment, and the afternoon session invited partners of household necessities, specialized articles, and furniture. It was
joined by 240 people from 144 companies.

KOKUYO S&T conducted an audit of subcontractors
KOKUYO S&T has been implementing an audit of subcontractors for the purpose of securing reliability for environmental
indicators on product catalogs in the past. In 2014, we conducted a factory audit of 90 companies. We visit our
subcontractors to check for the compliance of standards concerning environment-friendliness in compliance with the Green
Purchasing Law, etc. The audit follows the audit procedure established by the company to confirm whether the ratios of86

KOKUYO Group CSR Report 2015

used paper and reprocessed resin conform to the standards, specified materials that meet the standards are used in
production process and if there is no issue in the legitimacy of materials. In addition, for audit, we work with thesubcontractors to consider challenges to properly guarantee the compliance with the environment-conscious standards andby exchanging information on improvement cases for increased reliability in the aspect of production control to strive forsecuring reliability in environmental indicators in the future.

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KOKUYO Group CSR Report 2015

With Business Partners (Fair operating practices)

The KOKUYO Group works together with supply channel participants with the aims of delivering true value to customers
and meeting a diverse range of needs. To do this, the Group shares its strategies and policies with participants, works tosecure customer satisfaction, and achieve mutual development.

46th KJM Award Ceremony
The 46th KOKUYO Jewelry Members (KJMs*) Awards Ceremony was held at the Hotel
Okura, Toranomon, Tokyo, on November 18, 2014. KJMs with outstanding sales results
for the previous year (August 2013 through July 2014) were invited to extend ourappreciation for their efforts and to deepen our cooperative relations. A total of 180
KJMs attended the ceremony.
* There are currently 1,230 KJMs, which are divided into two courses, one for stationery and the otherfor furniture, and the KJMs are classified into various ranks using the names of jewels, such as
emerald, diamond, sapphire, and opal, according to their ranking in terms of sales made.

KJMs received an award for being
the best 10 in handling KOKUYO
products.

KOKUYO Partners' Messe 2014 (Stationery Business)
The two-day KOKUYO Partners' Messe 2014 was held at the Shinagawa Showroom on
July 24 and 25. The Partners' Messe is a product exhibition held annually by thestationery business sector. While the Messe was called Retail Messe and targeted sales
and logistics service partners until 2013, the name was changed to Partners' Messe in2014 by positioning it as the place where the customers of various channels in thestationery business are partners who create value together.
The Messe's theme was “Link,” and it introduced high-value added products and the
The Color Tag series that issuggestion of familiar products added with value from a new perspective, as well as
excellent in design and affordable
various recommendations on in-store plans and case studies on delivery by different
price.
industries. The goal of the Messe was to be a place of communication that links eachother's thoughts, advantages and strengths for making highly valued recommendations for customers. A total of 1,075
people from the retail stores and buyers from volume retailers attended the Messe and it ended with a high note.

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KOKUYO Group CSR Report 2015

New product announcement was held by KOKUYO Vietnam Trading
On April 19, 2014, KOKUYO Vietnam Trading held a new product announcement by inviting 140 people from 100
companies including distribution partners and major retail stores in the northern area. It has been five years since KOKUYO
entered the notebook market in Vietnam, and through locally oriented marketing activities, we improved our understandingof the preference of customers and distribution partners, the way they use products and the challenges they are facing. This
time's announcement incorporated various renovation elements including the expansion of new design, the improvement ofexisting ruled lines, the development of totally new ruled lines and the improvement of packaging specifications. Also, thelogo was changed to symbolize these renovations. Through marketing activities rooted in local areas, we will continue todiscover user needs and understand and resolve the challenges of distribution partners so that we can establish credibility
with distribution partners to build good relationships.

Design notebook, JEAN, with
innovation.

There was an air of excitement at a
product exhibition venue.

Colorful package cardboard boxes

Initiative for strengthening cooperation with retail stores (Furniture Business)
In order to deliver value to customers and suggest diversifying needs and business solutions unique to regions, it isessential to reinforce relationships with retail stores rooted in the regions. KOKUYO Furniture and KOKUYO Group sales
companies jointly implement various approaches.
1) New Products Training Sessions Held
From November 2013 to February 2014, KOKUYO Furniture and other KOKUYO Group sales companies jointly sponsored
the KOKUYO New Products Training Sessions 2014 for major dealers in 16 cities (in a random order of Tokyo, Osaka,
Sapporo, Sendai, Morioka, Fukushima, Utsunomiya, Maebashi, Mito, Niigata, Shizuoka, Nagoya, Okayama, Takamatsu,
Hiroshima and Fukuoka). A total of nearly 800 dealer employees attended the sessions. Comments from participants
included “I think this year's new products offer a great lineup of swivel chair for both quality and quantity,” “it was easy forme to understand as I was able to compare new products and actual products from competitors,” and “it was a good
opportunity for me to understand the background of the development of certain products.”

At a venue in Hiroshima

At a venue in Osaka

At a venue in Fukuoka

2) Furniture Campaign Held
From August to December 2014, KOKUYO Furniture and KOKUYO Group sales companies jointly sponsored a furniture
campaign for retail stores to arouse customers' latent demand. A training session to teach effective use of the officeguidebook and catalogs for sales promotion that are packed with the knowhow of office-making and various competitions
were held to boost the bond with retail stores.

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KOKUYO Group CSR Report 2015

The session at KOKUYO Hokkaido
Sales

The session at KOKUYO SanyoShikoku Sales

The session at KOKUYO TokaiSales

KOKUYO Furniture (China) held a training program for manager of sales agents
KOKUYO Furniture (China) held its first training session for sales agents, KOKUYO University @ China at Shanghai
Flagship Showroom in April 2014 and was joined by 57 people mainly sales managers at sales agents.
The training provided an explanation of the product development philosophy and detailed characteristics with the aim of
deepening knowledge in KOKUYO's product to expand sales. Additionally, by understanding KOKUYO's characteristics
more, it plays a key role in helping to strengthen the cohesiveness between sales agents and KOKUYO.
A get-together was held to promote friendship among participants beyond regions and companies. Participants also took atest on a final day as a compilation of training along with the presentation of award certificate and gift for excellent sales
agents. The satisfaction level of participants exceeded 80%, which was a confirmation of further expansion of sales in
China. Beginning with such a training program in Shanghai, we visited seven key sales agents and held a training session
for new products in Shanghai twice so as to boost the cooperation with sales agents by offering periodical training.

Participating members

Excellent sales agent staff received
a prize

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KOKUYO Group CSR Report 2015

With Business Partners (Fair operating practices)

For the purposes of further promoting partnership with stationery stores and enhancing the customers' convenience whenbuying stationery and office supplies, we published the first KiSPA catalog in December 2013. We aim to increase theoverall value in the structure of delivery channels in the KOKUYO Group years ahead.

Supporting the Mortar Business
Stationery can be purchased from various sales channels such as mass retailers, convenience stores or 100 yen shop, etc.
In addition, thanks to mail order catalogs and online shopping, one-stop shopping has become available to purchasestationery, office supplies, and office necessities even with a quick delivery. It has become a major challenge for existingstationery stores to respond to the changes that how customers purchase stationery and office products. Over the years,
KOKUYO has offered a system called @office as a model for retail stores, in which customers order directly from KOKUYO
and KOKUYO directly ships products to customers. Additionally, from December 2013, KOKUYO began offering the KiSPA
platform for traditional mortar delivery business which retail stores receive orders from customers and they deliver products
to customers with the aim of rationalizing complicated operation for sales retailers and supporting the sales expansion ofhandling products.

A discussion with retail stores

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KOKUYO Group CSR Report 2015

Re-building the business established with general catalog
The initiative of KiSPA was implemented for KOKUYO to rebuild business established with general catalogs and various
systems. Our general stationery catalogs helped us to develop from a paper product and file manufacturer to who we are
now with the support of partner suppliers by increasing the number of products in the stationery sector while introducing aphysical distribution system. With the changes in times, general catalogs and traditional structure become less effective andcould not meet the needs for retail stores and customers. The mortar business cannot be achieved just by evolving
catalogs. We strive to continuously improve the KiSPA Platform after full reviews of the order system, price competitiveness,
physical distribution, contact center, and sales activities.

Placing importance on the person-to-person relation
The core of the mortar business is the value of people. While it is important to use structure for reinforcement, after all, thebusiness is built by people. The goal of KiSPA is to immediately understand the environment surrounding our partner retailstores and to provide optimal services to each customer in different situations. KiSPA originally is an abbreviation for
KOKUYO Information System for Partner and is the name of the operation support system for retail stores, which was laterchanged to KOKUYO IS your PARTNER, hoping to be the best partner for our customers and stationery stores.

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With Stakeholders (KOKUYO'S Responsibilities to Stakeholders)

KOKUYO is aware that raising corporate value is a responsibility to shareholders and investors. KOKUYO strives to makeaccurate and timely disclosure of corporate information in order to maintain transparent and sound corporate management.

Policy and Achievements Regarding Dividends
With the objective of emphasizing shareholder interest, in addition to the previous policy of paying stable dividends,
KOKUYO takes the consolidated financial results into account and pays dividends at a payout ratio of 20% and above. In
fiscal 2014, we offered an annual dividend of JPY 15 per share (JPY 7.5 as an interim dividend and JPY 7.5as a year-end
dividend). Retained earnings are employed to make investments for future growth with the aim of increasing corporate
value.

Making Management More Transparent(1) IR Activities:
Given a greater level of interest in our Asian strategy (especially with respect to our
focus on India and China), inquiries and interview applications submitted by foreign
investors have been on the rise. In 2014 fiscal, we participated in conferences forforeign investors in Japan and visited investors in Singapore. The situation pertaining toour corporate group is explained to domestic institutional investors through financial
results briefings held twice a year, small-scale meetings held three times a year, andindividualized visits. For individual investors, in addition to company information
sessions, we held events aimed at improving the depth of understanding and

A Shiga factory tour held forindividual investorsdeveloping a sense of familiarity with KOKUYO, including a visit to the Shiga factory and introduction of productdevelopment stories by people in charge of product development. We will continue to proactively engage in IR activities toraise our corporate value.
(2) Information Disclosure:
We disclose information in accordance with the rules established by the Tokyo Stock Exchange for the timely disclosure ofcorporate information by issuers of listed securities (hereinafter referred to as the “rules of timely disclosure”). And theinformation that may not be subject to the rules of timely disclosure we also endeavor, as a matter of basic policy, topromptly disclose as proactively and fairly as possible by way of appropriate methods so as to help investors to understandour company better.
* See：「Investor Relations」

Selected to the Morningstar Socially Responsible Investment Index
In the area of the management of investment trusts, recent years have seen a rising level of interest
in socially responsible investments (SRI) for which important investment criteria consist not just offinancial considerations but also of the environmental and social aspects of corporate behavior. The
market for SRI is expected to grow as SRI becomes more popular and mainstream among investors.
The shares of the KOKUYO Group are included in the Morningstar Socially Responsible Investment
Index (MS-SRI). As the first socially responsible investment index in Japan, this index is produced by
Morningstar Japan K.K. by way of the selection of 150 companies deemed to constitute socially

Morningstar Socially
Responsible
Investment Index(MS-SRI)

exceptional companies from among all listed companies in Japan and the conversion of the share prices of thesecompanies into an index figure.

Shareholder Special Benefit Plans
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KOKUYO Group CSR Report 2015

To respond to the continuing support of KOKUYO shareholders and with the aim ofsignificantly deepening the understanding of the KOKUYO Group by having
shareholders actually use Group products, KOKUYO has established a shareholder
special benefit plan. Under this plan, KOKUYO Group products are sent once a year toholders of 500 shares or more.

KOKUYO Group products sent toshareholders

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KOKUYO Group CSR Report 2015

With Local Communities
KOKUYO strives to be a trusted corporate citizen on both regional and national levels via
proactive interaction and planning with regional communities, while respecting regional
culture and customs and encouraging advancement.

96p KOKUYO Design Awards

105p The Future of Tohoku

99p Initiatives in India

109p The Job Study Initiative

102p Education Support Activities in China

111p Contribution Activities Deeply Rooted in Regional
Communities

Views linked with the corporate philosophy, which have been highly valued by KOKUYO

An industry is the accumulation of various privileges
and the connection of fate in many ways,
Zentaro Kuroda
creating jobs for society.

A job is not something that you can obtain or go to only
on your own will, and it is something that is given by asudden chance or strange conjuncture. That is why wemust do our best to generate the maximum outcome togive back to society. We are commit ted to making acontribution to the local community through ourbusiness without ever forgetting our feelings ofappreciation.

With Local Communities (Community involvement and development)

The KOKUYO Design Awards is an international design competition that aims to attract product designs that are superior
from a user's perspective from a broad range of users for commercialization. In 2014, this event was held in accordancewith the theme of Next Quality.

The twelfth KOKUYO DESIGN AWARDSThe KOKUYO Design Awards is an awards ceremony that is organized to give voice to consumers by way of firmly
ascertaining the various needs of the times and introducing products based on designs that address these needs to themarket. With the aim of enhancing the design strengths of KOKUYO and contributing to the design strengths of Japanthrough a process of soliciting designs from a broad range of sources in accordance with the perspectives of customers,
this event has been held annually since 2002 (with a break in 2010 only).
Past winners include such hit products as Kadokeshi (eraser), the PARACURUNO Campus notebook, and the Beetle Tip
highlighter. This event has also developed a reputation as an important gateway of career opportunities for young
designers.

Kadokeshi eraser

PARACURUNO Campus notebook

Beetle Tip highlighters

Theme for fiscal year 2014: Next Quality
Whether you are working, studying, or otherwise living, the visual spectacles associatedwith such activities will become more enriched the more quality products are madeavailable. We would like to increase the stock of products for use in real life that are, ofcourse, reliable and that incorporate superior functions that are beautifully presented.
With this in mind, we solicited ideas in fiscal year 2014 for products that go beyond
mere convenience to inspire and tickle the soul and for whimsical, humorous productsthat can put a wide grin on users' faces. At the end of the day, we managed to attract
1,442 entries from twenty-nine countries around the world.
Judging took place over three rounds. Internal preliminary judging was undertaken bychecking solicited products and eliminating those that resembled existing products. The
subsequent first round of judging was attended by people active at the forefront of thecurrent age-Yoko Kawashima, Kashiwa Sato, Yasuhiro Suzuki, and Kinya Tagawa-as
well as Akihiro Kuroda (Representative Director and Chairman of KOKUYO Co., Ltd.),
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Internal judging being carried out

KOKUYO Group CSR Report 2015

top members of the development teams at each operating company, and employees participating in the internal judging
process. Conformity to the product theme and the feasibility of commercialization were checked by these people.
The twelve finalists chosen to undergo a final round of judging spent time preparing until the last moment before distributing
presentation sheets and making presentations based on the use of mocked up products with unbridled zeal. The judges
engaged in careful discussions while taking into account the feasibility of commercialization and verifying the conceptual
underpinnings and the completeness of the design. At the end of the day, one grand prize winner and four awards of
excellence were conferred.

The 2014 grand prize winner is Sukeru Hasami (“see-through scissors”)
The grand prize was awarded to Naoki Ogishita and koichro Oishi for their see-throughscissors.
Concept: When you cut paper along a line, there are times when the line you want to cut
becomes hidden behind the blade of the pair of scissors you are using for this purpose.
Sukeru Hasami represents an evolution into an implement for dispelling even small
sources of stress by making the blades of the pair of scissors transparent. By producing
the entire product, including the handle, with the same transparent material, we were2014 Grand Prize winnerable to harness the beauty of the material and create a product that is also superior in
Product name: Sukeru Hasami
terms of productivity and recyclability. In these ways, our pair of scissors represents
Creators: Naoki Ogishita andnext-stage quality that was attained by taking another look at the functions and beauty
Koichiro Oishi
of this product.
What impressed the judges about this product was the fact that it was fully transparent, which made for easy cutting, thebeauty of the design, the recyclability of the product thanks to the use of the same material throughout, and the feasibility ofcommercialization by way of the use of transparent ceramic as presented during the final judging round. This productamazingly won the grand prize after being evaluated highly by the judges, from whom a number of positive comments wereobtained, including: “The plan for raising the caliber of transparent ceramics, a material that would have been inconceivablewith conventional scissors, overwhelmed the competition.”

General comments by the judges: Winning products that are representative of next-stage quality
Yoko Kawashima (head of the IFS Future Laboratory, Itochu Fashion System Co., Ltd.)I felt that NEXT QUALITY, a theme for depicting the near future for maturing modes of manufacturing, yielded many
products that may have looked simple but were rather sophisticated and that entailed the discovery of new strains of quality
by way of looking at conventional concepts from a slightly different perspective. Design is a function that is fulfilled byrendering ideas and imaginative concepts into concrete form to induce the act of utilization and the feelings of joy anddelight. I would love to continue to see designers strive towards meeting the challenge of designing new strains of quality.
Kashiwa Sato (representative, art director, and creative director of SAMURAI)
Many of this year's winners were of the type of product that made me sit up and want to actually try using with my own
hands. Their concepts were so extraordinarily good that I kept finding myself wanting to nod in agreement at the brilliancecaptured in their descriptions. Among these winners, the grand prize winner Sukeru Hasami was a product that combinedfunctionality and beauty to an exquisitely wonderful degree. I look forward to seeing this item undergo commercialization to
become a product that offers exceptional performance that defies expectations.
Yasuhiro Suzuki (artist)
What came to be associated with the NEXT QUALITY theme were proposals for new value that were inclusive of anelement of surprise. I felt that, beyond boundlessly bringing the user's hand and the pair of scissors closer together, thetransparency of the grand prize winner Sukeru Hasami gave rise to an ideal form whereby the pair of scissors appeared todisappear as a tangible object. It is my belief that familiar things like stationery and furniture are sometimes discussed only
when they are rendered into a topic for communications. On this note, I expect to see the KOKUYO Design Awards become
an event that will attract not just designers but all sorts of people who are able to track down latent visions for society thathave yet to manifest.
Kinya Tagawa (representative of and design engineer at Takram Design Engineering)
The word “NEXT” in NEXT QUALITY also encompasses a sense of something “not yet seen.” We set the theme this yearwith the expectation that we would receive proposals that have never before been seen and that correspond to a high level
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KOKUYO Group CSR Report 2015

of quality. Consequently, we fielded proposals representing wonderful breakthroughs of various kinds consistent with thisyear's theme. I am truly convinced that the total time and energy spent thinking about the NEXT QUALITY theme byeveryone who submitted entries will help to produce quality for the following era to come.

Begun in 2002, the KOKUYO Design Awards will be held for the thirteenth timein 2015. Held in the year in which the company will mark its 110th year ofoperations, the 2015 version of this event will focus on making proposals for the
future while remaining true to a basic concept by which these awards constitutedesign awards premised on commercialization.

Takeshi Fujiki
MONOZUKURI Division,
KOKUYO Furniture

The theme for fiscal year 2015 is Beautiful Living. What we want to create areproducts that are beautiful not just in terms of appearance but also in terms ofmaking our lives and even state of mind more attractive. In addition to thecompetition itself, this year will also feature a theme-related talk show andworkshop. Past winners and the latest information will be showcased throughthe KOKUYO Design Awards website and other channels, which you are invited
to visit.
* See page ●●「KOKUYO Design Awards official website」* See page ●●「KOKUYO Design Awards Facebook page 」* See page ●●「KOKUYO Design Awards official Twitter account 」

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With Local Communities (Community involvement and development)

As a company whose main product lines consist of crayons, paints, and other art supplies, KOKUYO Camlin is proactively
engaged in art-promotion activities and environmental conservation activities both inside and outside India.

Camel Art Contest
Kokuyo Camlin organizes Camel Art Contest (earlier called AICCC) every year toencourage art amongst the children at all levels. This contest has already qualified as
the world's largest contest by Guinness Book Records when more than 48 lac children
participated in the year 2011. This year the number of participants has already crossed
70 lac students (as per last counting) and also this year make students outside India toalso participate with the help of social media.
This year Kokuyo Camlin has proposed an innovative and novel prize for the first time.
Christened as 'Grand Prize - Great Gift' it is, introduced at the Grand Finale. Under theChildren clutch completed entries'Grand Prize - Great Gift' the schools of the first prize winners will receive grant of Rs 50, 000/- for the improvement of theart infrastructure in the school. . The school would be able to procure art infrastructure as per their requirement with thisbudget of Rs 50,000/- on the sponsorship of Kokuyo Camlin... The art infrastructure procured under this scheme would bear
the name of the winner making one remembered for years to come inspiring the coming generations of students for art andCamel Art Contest

Camel Art Foundation
Camel Art Foundation (CAF), the philanthropic wing of Kokuyo Camlin Limited, pioneersof stationery and color products in India, has substantially contributed to the growth ofart, artists, art appreciation and art education in India.
To celebrate the spirit of art, this non-profit organization holds four art exhibitions eachyear, in the Northern, Southern, Eastern and Western regions. This year 3,500 artist
participated in the event with around 7,500 entries.
Though the Foundation's main objective is to promote art activities and create aplatform for budding artists, it also provides an opportunity for professional artists tobecome popular and look beyond the Indian art scene.

Exhibition guide panels in southern
India

Besides getting an opportunity to display their work, the artists with the best paintings isalso rewarded with grand prizes from Kokuyo Camlin Limited. The entries, categorized
into professional artists and art students, are sub divided by the art media like Oil,
Water, Acrylic and Drawing & Pastels. The contest is open to all participants above 18
years of age.
THERE IS NO ENTRY FEE and a participant can send multiple entries across all
mediums.

A commemorative photograph of

The student awards are Rs. 10,000 which is given 50% in cash and 50% in Camel art
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KOKUYO Group CSR Report 2015

material, while the professional regional awards are Rs. 25,000.

the winners

Children's Day Activity
Every year Kokuyo Camlin dedicates children's day which is celebrated in India on 14th
November to its consumers - the children of the country. While we celebrate the event
on TV and social media, this year we also had a theme which was related to the brandphilosophy and noble cause - “Make Learning Fun”. There was a contest on social
media which wherein children would write on ways to make learning fun. Like always
Kokuyo Camlin always remembers that there are many underprivileged children who
don't get to celebrate children's day and so the company the day special for theunderprivileged kids by organizing various initiatives in the city.

A customary cake-cutting ceremony
during a celebratory moment

Kokuyo Camlin invited the kids of one NGO called TOUCH to the Camlin Head Office atAndheri in Mumbai. . There was a puppet show that had an interesting theme -‘Swachh Bharat’ - which emphasized on the theme of cleanliness and hygiene -inculcating the values of keeping the surrounding clean. The kids then took part in fun
and games that were organized especially for them where they met with the Chhota
Bheem mascot who entertained the kids and posed for photographs with them.
A commemorative photograph of all
the participants

Environment Day Drive
This World Environment Day, on June 5th, Kokuyo Camlin started a new drive whichaims to work towards environment by both protecting trees and also promoting trees.
The activity was built on an insight that it is easy to cut down trees because they areanonymous and don't have an identity. The insight was simple, that if trees had names,
probably it would be tougher to axe them down. In addition, the highlight of the initiative,
the underlying thought was to expose and motivate the larger audience on social media
as a contemporary platform and to appreciate the contents and to adopt the practice,widening the scope of influence.
Building on this insight we came up with ‘The Tree Naming Project' where children were

The campaign is being carried out
online on the company's website.

invited to a special workshop, in which they would gift their name to a tree. The
workshop was filmed and will be released on the digital medium on World Environment
Day, urging people to participate in The Tree Naming Project. Further Kokuyo Camlin
had a drive on wherein the staff including senior management participated in planting
trees in the Tarapur factory and giving them their names.

Trees are planted around thecompany's Tarapur plant.

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The vision of marketing in Kokuyo Camlin is to build Camlin and Camelbrands on a powerful philosophy of “making learning fun for everyone”. We
believe that when education is made fun, the children are more receptive
towards it. We want the children of our country to have overall development
rather than become bookworms. In this light the emphasis on art in many
activities was not just to make children artists, but because of the fact that art
helps in the overall development of the child. We also want the children to beaware of the social issues right at the beginning so that they become
responsible citizens of the country, and this is reflected in the activities onenvironment.

Saumitra Prasad
Chief Marketing Officer,
KOKUYO CAMLIN Ltd.

While we make efforts to develop world class products which provides the consumers unmatched experience,
we also aim to touch the lives of millions of children to make their education exciting. Despite being acommercial organization driven by growth and profit targets, marketing investments not only goes in generating
demand for products but also working towards the society and especially the underprivileged section. Almost all
are activities have a social cause and there is a space for less privileged children.
We are confident that our since efforts will make Kokuyo Camlin a responsible and reputed organization in theeyes on people.

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With Local Communities (Community involvement and development)

To contribute to society on a global scale, the KOKUYO Group conducts an array of social contribution activities in local
communities around the world. In China, we are engaged in education support activities with the aim of providing a place of
education for the future of children.

Grassroots Support Activities -Gifts of Notebooks to Children Living in Underprivileged AreaTo meet the diverse needs of developing countries, KOKUYO has participated in the
Grant Assistance for Grassroots Human Security Projects (hereinafter referred to as
Grassroots Gratuitous Cooperation) since 2006, which was introduced by the Ministry ofForeign Affairs in 1989.
There are still many villages deep in the mountains in China that do not have any
schools. The Grassroots Gratuitous Cooperation is an activity aimed at creating
opportunities and the environment where underprivileged children can equally receiveChildren are writing their name on

education. Due to a variety of reasons, they could not fully receive education. With thenotebooks carefully
grants donated by a number of sponsoring companies, the organization built schoolbuildings and provided children with school supplies, offering a place and tools to help them receive fair education.
KOKUYO is participating in this cooperative effort through the donation of Campus notebooks, and in fiscal 2014, 10,940
notebooks were donated to 17 schools. Since the start-up of these activities in 2006, KOKUYO has donated more than
450,000 notebooks to this cause in the last nine years. We are continuing the activities to bring smiles to children throughthese opportunities.

Celebrating an annual physical education and arts festival together with local primary school
students
On May 30, 2014, employees belonging to the Beijing branch of KOKUYO Commerce
participated in an annual physical education and arts festival held to celebrate
Children's Day (June 1) together with over 800 children at Qingdao Chaoyin Primary
School in Qingdao City, Shandong Province.
June 1 is Children's Day in China, a holiday that children in that country look forward to
the most. In addition, Qingdao Chaoyin Primary School is a full-time, privately operated
primary school affiliated with Qingdao Chaoyin Middle School and backed by equity
provided by the Qingdao Chaoyin Group. Designated a national experimental bilingualsite by the education department of China's administrative division, it is one of two

Employees of KOKUYO Commerce
who participated in this event

model schools for UNESCO's education for sustainable development program in China(ESD*) situated in Shandong Province.
On the day in question, the efforts of the teachers and students allowed guests to enjoy
recitations of poems in two languages, a wind ensemble performance, and singing and102

KOKUYO Group CSR Report 2015

dancing numbers. After the arts festival came to an end, students were given gift
packages of KOKUYO stationery by representatives of the KOKUYO Group in hopesthat they might seize more opportunities to study towards the realization of their goals.
While happily holding onto their gifts, students indicated that they would like to use their
new stationery to continue dedicating themselves to their studies. We would like tocontinue to engage in activities that bring smiles to the faces of children through suchopportunities.
* ESD stands for “education for sustainable development.” ESD refers to learning and activities
undertaken with the aim of generating new values and actions tied to solutions to the various
challenges that are faced by modern society in such areas as the environment, poverty, human rights,
peace, and development by regarding these challenges as one's own problems and engaging in efforts
to address them in one's own life and thereby creating a sustainable society.

Children were delighted to havereceived gifts of stationery fromKOKUYO and indicated that theywould like to use their new
stationery to continue dedicating
themselves to their studies.

Chasing big dreams with small notebooks! Holding classes on dreams and the world forchildren
For four days between June 15 and 18, 2014, five employees from different locations-namely, KOKUYO Management,
KOKUYO Commerce, and the Shanghai, Beijing, and Shenzhen offices of KOKUYO Furniture-gathered together to visit
primary schools in Liandang County, Gansu Province (Yuchi Primary School, Xinghua Primary School, and Zuojiazhen
Primary School, and interact with children.
Home to a number of primary schools, Liandang County, Gansu Province, is situated in northwestern China, such that it
takes a total of ten hours of travel to reach these local primary schools (2.5 hours aboard a plane, 6 hours aboard a train,followed by 1.5 hours aboard a bus). The children warmly welcomed the employees of KOKUYO who arrived from faraway
places. In addition to donating 840 Campus notebooks upon their arrival, KOKUYO representatives held classes on
producing original notebooks to which students affixed their own photographs and classes on foreign countries taught withthe use of a world map and photographs of iconic architectural structures from around the world. During break times, games
were played with the children on school grounds and tours were taken of the dormitories. In these and other ways, a highlymeaningful time was had by all.

Children listen intently to a

Paintings of dreams depict the

Smiling students were a common

KOKUYO Furniture employee
serving as an instructor in thewonderful dreams of students who
yearn to become, among othersight during these visits.

classroom

occupations, doctors, teachers,
dancers, and geologists.

Welcoming visitors to our showroom and plant
KOKUYO Furniture's showroom was toured by the students and professors (totaling
thirty-four persons) of Chuo University on September 11, 2014, and Akita Prefectural
University on September 19.
During the showroom visit, the history of KOKUYO Furniture in China and future plansfor expansion were introduced. Numerous questions were posed by students during thequestion-and-answer session. In this way, the site was humming with excitement.
Participating students remarked that they got a sense of what it felt like to work on a
global stage and that these classes were an inspirational springboard to taking on thechallenges that came with such a theme. Thank-you letters were subsequently received.
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Letters of appreciation fromstudents

KOKUYO Group CSR Report 2015

On December 16, a total of thirty persons consisting of students and supervisingteachers from six high schools across Nagasaki Prefecture took a tour of KOKUYO
Commerce's office building and Shanghai-based plant through the East Asian HighSchool Students Friendship and Career Enhancement Program* as run by the highschool education section of the government of Nagasaki Prefecture. For the plant tour,
an outline of the plant and the processes and equipment used for producing notebooks
were introduced before students were given a chance to try their hands at creating
handmade original notebooks on their own.

Participants tried their hands atcreating handmade notebooks.

*In order to expand the outlooks of high school students who are expected to become future leaders in Nagasaki Prefecture, this program
endeavors to develop individuals who are active in the community and who possess global perspectives and the communications skills forbuilding rich personal connections with others by providing training opportunities in different industrial fields with companies that conduct global
operations in Shanghai, an international city.

In fiscal year 2014, we engaged in various social-contribution activities
according to our philosophy of enriching the world through our products. By
continuing to plan activities that adhere to our philosophy and having our
employees participate in these activities on a broad basis, we would like to
see KOKUYO's philosophy embodied in many members of our workforce.
(Liu)

Left: Liu Chuntao,

I am very happy to hear that many students who have taken tours of our

Public Relations & General
Affairs Dept.,

showroom wish to work for KOKUYO. I believe that an ongoing commitment
to such social-contribution activities will help us to fulfill our CSR. I would liketo see us continue to engage in contributory activities rooted in thecommunity. (Chen)

KOKUYO (Shanghai)Management Co.,Ltd
Right: Chen Cong,
Corporate Planning & Strategy
Dept.,KOKUYO
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KOKUYO Group CSR Report 2015

With Local Communities (Community involvement and development)

Four years have passed since the Great East Japan Earthquake struck. In desiring to be of help to everyone in the affectedareas, we have continued to engage in reconstruction-aid activities, including initiatives to provide support to students andworkers who represent the future of Tohoku.

A single notebook can bring smiles to the faces of children: Deco-Notebook Workshops
We hold Deco-Notebook Workshops on an ongoing basis as a program for supporting
earthquake-recovery efforts directed at children in collaboration with local stores, boardsof education, newspaper companies, non-profit organizations, and other interested
parties.
These Deco-Notebook Workshops are workshops for decorating the covers of Campus
notebooks with markers and stickers according to a theme summed up as follows:
Cheer up, children of Tohoku! Be positive through writing and drawing. Over 1,300
children have participated with smiles and laughter in this program to date.

Children working with a serious
focus on their notebooks

Held in Ishinomaki, Miyagi Prefecture in May
In 2014, we participated as a presenter in an earthquake-recovery event for primaryschool students called the Ishinomaki Earthquake Recovery Event for Waku-Waku
Genki Kids in collaboration with Eco-Family Shimbun, which issues newspapers toprimary school kids in Miyagi Prefecture. Employees belonging to KOKUYO Product
Shiga, which produces Campus notebooks, also participated. As part of the conclusionof a workshop, participants got to hear a lecture on Campus notebooks as delivered bya travelling instructor. Many children gathered at the venue and had tremendous funcreating their own original notebooks.
Awesome notebooks brimming with
While we interact with children through stationery, school furniture, and other products, it
dreams are created
is normally not possible for us to witness them actually using these products with asmile on their faces. We will continue to support children who will play important roles in
the future in areas that were affected by the earthquake and would like to remain committed to this initiative in order to getmany more children to laugh and smile.

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We wanted to share the joys of science with children! UD classes offered at Scienze Kingdom
We participated in Scienze Kingdom for Primary School Students, an event that washeld in Sendai in September 2014. Classes on universal design were offered to children
jointly by KOKUYO, KOKUYO S&T, and KOKUYO Tohoku Sales.
Scienze Kingdom for Primary School Students is an education-supporting projectplanned with the aim of conveying the joys of science in an effort to counter thedisengagement of children from science. It is experimental class tour led by visiting
professors for primary school students held in a primary school that has been rented foran entire day. The goal is to get children unaware of the links between science andsociety to develop an interest in science and technology by having “professors” fromcompanies, universities, and laboratories share secrets and surprises relating to theirChildren enthusiastically raising
their hands and answering
questions posed by an employee
playing the part of a professor

fields of science and manufacturing directly with primary school students throughexperimental classes and booth displays.
For this event, KOKUYO held classes entitled “Let's learn some secrets about
stationery!” to get participants to think about the various points of innovation
incorporated into universal design stationery products while playing around with actual
products on a hands-on basis. In offering three classes in total, seventy-five children
ranging from grade one students to grade six students gathered to participate in a truly
fun one-hour class while expressing genuine surprise at all the ways in which you cantake common daily-use stationery products and make them easier to use just by
tweaking them with small innovative changes.

Students had tremendous fun
participating in our classes

Many children attending this event arrived not just from Sendai but also from coastal areas and other disaster-affected
zones and let us know that they had tremendous fun. Profound questions were posed by students engaged in their own
research projects for school based on the theme of universal design. This event came to constitute a meaningful
opportunity for communications at which KOKUYO Group employees were able to field questions and feedback directlyfrom children and their parents from across the Tohoku region through our classes.

Providing study tools to children through a donation of children's furniture and other items to
Ashinaga
As part of our Furniture Likes project for supporting the Tohoku region, we converted
like-points obtained from customers at the KOKUYO Fair into a monetary amount anddonated primarily children's furniture out of a desire to support children in disasteraffected zones to the Tohoku Rainbow House, which was newly opened by Ashinaga,an organization that supports children orphaned in the earthquake disaster. The
operating staff at Ashinaga expressed their appreciation for this gesture: “Our children
love KOKUYO's children's furniture items and are always scrambling for a chance to
A playroom in which children's
furniture has been placed

use them.”

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Dabbed by everyone! Madre seats featuring handprint designs are produced
Our Madre lobby seats with upholstery featuring designs consisting of children's handprints have been set up in front of thelobby at the Ishinomaki Rainbow House, one of three newly built Rainbow House facilities in the Tohoku region. At the
opening ceremony for the Ishinomaki Rainbow House, children's handprints were taken and subsequently printed onto theupholstery fabric. This was commissioned by Ashinaga in hopes of bringing a little more joy into the lives of children and inhopes of getting children to view their arrival at this Rainbow House as delightful.

Taking children's handprints

Handprints are collected andincorporated into lobby chair

Madre lobby chairs featuringchildren's handprints in their design

upholstery

Providing support for the Michinoku Mirai Fund
Based on a belief that young people belonging to the next generation form the basis fortrue reconstruction, KOKUYO Tohoku Sales supports the purpose of the Michinoku
Mirai Fund, a scholarship fund set up to help high school students orphaned by theearthquake disaster pursue their dreams of higher education (university, college, andvocational schooling). Since fiscal year 2012, the company has provided support as acorporate supporter.
On March 14, 2015, a coming-of-age ceremony to celebrate the fourth year ofscholarship students set to pursue higher education this spring and a commencement
ceremony for scholarship students set to join the workforce upon completing theirstudies were held at the Taihaku Campus of Miyagi University. This year, 104 students
entered this program. Ninety-two of these students have thus far determined where theyGroup photograph of scholarshipstudents taking their first steps
towards their dreams as well as
their supporters

will study. More than 400 students in total have benefited from this fund since the first year of its operations. Scholarshipstudents are grateful to supporters from across the country and have expressed their resolve in no uncertain terms. They
have taken the first steps towards realizing their dreams.

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At the end of January 2015, President Okatake of KOKUYO Tohoku Sales
delivered a lectured entitled Working at a Company to approximately 200
third-year students at Shokei Gakuin Senior High School in Sendai. The
principal from whom the request for a lecture was received briefed us on theacute situation facing his school: Some of these students have sustained
significant damage from the earthquake. The disaster altered their values.
While I believed that they would seek out the social significance of
employment within the context of their overall mood, their motivation to study

Lecture delivered by President
Okatake of KOKUYO Tohoku

Sales
for a given purpose has not been clearly defined. Since I am certain that a talkgiven by a top manager of a local company would resonate with these students, I want you to deliver a measurethat will encourage them to think about their future.
On the day in question, President Okatake spoke for about an hour and a half on the development of theCampus notebook, specific activities undertaken by KOKUYO Tohoku Sales, and what he learned from his own
life experiences about holding onto your dreams and about how one can live by linking one's job with one's
happiness. He expressed his hope that this lecture could cause the students in attendance who were about todepart on a new journey in their lives to think about their future. Feedback received from students several days
after the lecture included the following: “I listened to the lecture and was impressed that Mr. Okatake could fully
approach office development projects and a focus on products with such a positive mindset”'; and “While I had
never given thought to the possibility that work could bring happiness, I was inspired by the notion thathappiness is not the goal and that it is the journey towards that end that brings one true happiness.”

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With Local Communities (Community involvement and development)

The Job Study program was created in 2005 to address the early departure issue of newly hired college graduates, aiming
to provide an opportunity for corporations and students to come together. KOKUYO played a central role in launching the
Job Study to be in charge of the general management as an organizing company.

Seminar Started in the Hope of Addressing the Early Departure Issue
The Job Study is a cross-industry seminar held by a team of personnel affairs personnel
from leading companies in each type of industry, which they discuss what kind of
seminar is truly useful for students and reflect the results to craft seminars by hand.
When it was first launched in 2005, the issue of early departure for newly hired college
graduates, which about 30% leave their employment within only three years, was amajor issue. To address this issue, aiming to provide an opportunity for corporations andstudents to come together, we have brought about the realization of mutualcommunication where corporations and students can talk about the significance ofworking by planning a program on the concept of real opinions and hand-made. Since

A picture taken at the panel
discussion of the seminar

then, 10 years have passed and we have continued to face with students with sincerity, and today, a total of 25 leading
companies from various industries have joined the Job Study.

Getting students to think with more initiative and expand their horizons
In 2014, joint cross-sectoral seminars, which had been organized since ourestablishment, were held as were collaborative internships offered jointly by companies
participating in the Job-Study Program. Job Study Collaboration (Kansai/Kanto) is an
event that was held in order to expand student outlooks to encompass mid-sized andsmall to medium-sized companies and to encourage students to select companies notbased on their names but on the basis of a true concordance of values with personalvalues. This event consisted of panel discussions held jointly by large companies
participating in the Job Study Program and local mid-sized and small to medium-sizedcompanies, as well as round-table discussion programs where participants would

Job Study Collaboration Program(Kansai/Kanto)

respond forthrightly to students in face-to-face settings. Guidance for getting participating students to confront their own
present selves and the future was provided. Each program was organized to present the means of getting students to thinkwith initiative. Feedback received from participating students included the following: “It was great that we were able to hearcompany representatives speak so honestly about issues in a way that was very accessible to us,” and “I learned about thedifferent advantages associated with large companies and mid-sized companies and the differences between the two.”

The eleventh year of the Job Study Program is a year of challenges and reform
As of the end of 2014, the Job Study Program had amassed a decade of positive results.
At the fourth Career Education Awards, the Job Study Program received the Award for Encouragement for sharing
philosophies regarding the broad range of challenges students face just prior to entering the workforce with a wide variety ofcompanies and flexibly dealing with these challenges. However, numerous issues between students and companies are
arising in part due to economic fluctuations and changes in the times during which students are being hired. Against thisbackdrop, the Job-Study Program is asking the representatives of the personnel departments of twenty-five participatingcompanies to shun the status quo and come together and seriously consider what is required and what they would like to
do as they look to the future.

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After ten years of operations, the Job Study Program takes its first new step inthe second decade of its existence in 2015.
I first came to be placed fully in charge of the Job Study Program in 2014. The
more I learn about the history of this program, the difficulties dealt with bymanagers, and the unchanging passion of companies participating in thisprogram, the more I realize what a fantastic program this is.
I believe that a new opportunity to engage in forthright interactive dialog is

Kazuyuki Takimoto
Human Resources Development
Division,
KOKUYO Co., Ltd.

needed in particular when the environment is changing in terms of changes tothe timing at which companies start recruiting activities and when issues between students and companies are
increasing in number. While KOKUYO as a single company can only do so much on its own, the twenty-fivecompanies that comprise this program are committed to joining forces to create new value and opportunities
that others cannot provide.

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With Local Communities (Community involvement and development)

We are proactively engaged in environmental activities integrated with local communities, educational activities for which
product attributes are leveraged, activities directed at the revitalization of local communities, and other such initiatives.

Plant tours that convey the importance of manufacturing and workers' ideas and thoughts
regarding manufacturing
The KOKUYO Group conducts plant tours for students in different countries and regions
in hopes of cultivating work values and employment awareness tied to local companies.
We wish to contribute to the education provided in schools by having students observe
the process of making products and work being performed by employees and perceive
the importance of manufacturing and workers' ideas and thoughts regarding
manufacturing.
We aim to become a company coexisting harmoniously with local communities bycontinuing to enrich interactions with local students and developing contributory
activities rooted in local communities.

A plant tour being conducted at
KOKUYO MVP

Plant tours for members of the public commenced at one of the biggest notebook production
plants in the country
At KOKUYO Product Shiga, plant tours for members of the public began in May 2014 inorder to enrich communications with customers.
Since it was founded in 1988, KOKUYO Product Shiga has continued to manufacture
paper products while carefully fostering its ties to the local community throughcontributions to the community and to the environment. It is presently the one of thebiggest domestic notebook plants transmitting the spirit of technology andmanufacturing from Shiga Prefecture to KOKUYO Group paper-product plants aroundthe world.
For these plant tours, the company established a ReEDEN exhibition corner to explain

A dedicated attendant provides an
explanation

the company's environmental activities in an easy-to-understand manner as well as a corner for examining production
equipment and equipment for accommodating the environment and for experiencing the company's focus on quality
according to the theme of inspiring visitors and becoming Japan's most fascinating notebook-producing plant. A safe routefor families with children in tow has been set up to allow visitors to embrace the ambience that comes from actually walking
through the production plant. Tours are also conducted with a focus on making things exciting by administering aninteractive quiz.
Activities will be pursued in collaboration with the local government in order to have plant tours seen as a tourism resourceand promote revitalization of the community.

Tying together the environment, welfare, and the community with photocopier paper: theEco-Lab Heart Shiga initiative
KOKUYO Marketing and KOKUYO Product Shiga are engaged in green purchasing
activities and have been participating in the Shiga Green Purchasing Network (Shiga
GPN), a local network program, since June 2006. The KOKUYO Group has been
involved since the beginning with the Eco-Lab Heart Shiga initiative, which wasdeveloped by Shiga GPN's Research Society for Green Purchasing Evaluation
Techniques and is being presently operated by NPO Shiga Prefecture Social
Employment Business Promotion Center.
This initiative constitutes a system for requesting the use of plastic boxes in place of
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Delivery using a plastic box insteadof a cardboard box

KOKUYO Group CSR Report 2015

cardboard boxes to deliver daily-use photocopier paper to cooperative workshops within Shiga Prefecture whereapproximately 150 disabled persons are employed. It was begun in 2007 with two aims: environmental (reducing
unnecessary packaging) and welfare (promoting and employing disabled persons). By using photocopier paper
manufactured at KOKUYO Product Shiga, a model consisting of elements based fully in the local community is in place.

Would You Like to Participate in the CSR Activities Unique to Shiga?
The Eco-Lab Heart Shiga initiative has been highly acclaimed in terms of its originality, continuity and the possibilities, and it
won the 13th Green Procurement Award in 2011. As the number of participating companies and organizations grow, theamount of waste is reduced and by delivering not only copy paper but also other ecology products and products
manufactured in a workshop, the people with disabilities who work in a workshop can earn more money. We invitecompanies and organizations that have their offices in Shiga to participate in the CSR activities unique to Shiga, theadvanced prefecture of the environmental and welfare initiatives.

Two works of art owned by KOKUYO-as painted by Millet and Cézanne-are deposited with theHiroshima Museum of Art
On July 3, 2014, a ceremony to deposit two works of art owned by KOKUYO with theHiroshima Museum of Art and a press conference were held in the special event space
under the dome of the Main Hall of the museum. The paintings that were deposited
consisted of Millet's Tondeuse de Moutons (1862, oil on canvas) and Cézanne's Les
Marronniers et le Bassin du Jas de Bouffant (around 1871, oil on canvas). The
Hiroshima Museum of Art is home to an impressive collective of modern Western art.
With the addition of these two works deposited by KOKUYO, the museum is the only
place in Japan with three works by each of Millet and Cézanne in its possession. Thesepaintings had been hung in the reception room of the head office of the company as a

Ceremony to deposit paintings withthe museum

way to welcome guests and visitors. However, the decision was made to deposit themwith the Hiroshima Museum of Art out of a belief that paintings can be rendered more valuable through greater exposure topeople.

Experience-based study of universal design
Out of a desire to be of service to children who will be leading the next generation, we
are undertaking an experience-based learning initiative to get children to learn about
universal design (“UD”), an approach to manufacturing from the standpoint of users, andto cultivate compassion and kindness in children by getting them to think about thingsfrom the standpoint of the other party.
Experience-based learning is an approach whereby employees of the Public Relations
and Communications Department visit schools as instructors. Students are exposed toactual UD products and learn about the differences between such products andA lesson on UD is being given

conventional products and the thought process that led to their development. In addition to learning about UD, students also
engage in off-campus learning by visiting the company's Tokyo showroom and taking tours of the offices where employees
actually work.

Local cleanup activities and blood donations
The KOKUYO Group collaborates with local communities through cleanup activities carried out at office buildings, plants,
distribution centers, and overseas business offices. Cleanup activities are performed around the head office building in
Osaka with the cooperation of the local government once a year.
Through a tie-up with the organizers of the Osaka Marathon, Operation Osaka Marathon Cleanup has been organized since
fiscal year 2011 as a cleanup activity for all areas of Osaka undertaken to present a clean city to visitors to Osaka. The
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company participated in this activity once again in fiscal year 2014 in collaboration withthe local government. On October 20, eighty people, including local volunteers, took
part in this activity in spite of the early morning hour at which it was held.
At various sites around the country, employees of the company have participated inblood donation drives since 1980. In fiscal year 2014, seventy-eight employees madedonations on two different occasions when the Japanese Red Cross Osaka Blood
Center visited the company.
Cleanup activities being carried out
at the head office building in Osaka

Various forms of grand prix events are held these days as local economic
development projects throughout Japan. The KOKUYO Group participates in
the ISU-1 Grand Prix as part of our effort to help rejuvenate local
communities. The ISU-1 Grand Prix is a two-hour endurance race withcompetitors consisting of three-person teams treating office chairs likemachines and is held throughout Japan each year.
In September 2014, the second East-Japan Competition was held in the

ISU-1 Grand Prix

central shopping district of Shinjo, Yamagata Prefecture. Members of
KOKUYO Furniture and KOKUYO Tohoku Sales participated at this event.
On the day in question, teams must avoid elimination in the preliminary time-trial round before competing over a
two-hour period to see how many times they can travel around a 200-meter course constructed on a public
streets inside the shopping district that were closed off to traffic. In the team event, the team representing
KOKUYO Furniture came in first place while the team representing KOKUYO Tohoku Sales put up a good fightto finish in fourth. At the ISU-1 Grand Prix, teams dress up in cosplay costumes or put on company advertisingand embellish their chairs to ensure that there is a focus on having fun despite the competitive nature of theevent. This is truly a fantastic event at which participants and spectators alike join forces to revel in thefestivities.
We would like to continue to enthusiastically partake in such activities for the revitalization of local communities.

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With the Global Environment

KOKUYO recognizes solution of global environment concerns such as global warming and deforestation as
the urgent problems. Each and every one of our employees is concentrating their intellect on the searchfor solution to these problems. Furthermore, we have introduced an environment management systemthroughout our entire company in order to work in solidarity along with the environment.

115p Environmental Management
118p Global Warming Preventive Measures
121p Resource-Saving and Recycling Measures
123p Compliance with the law and the prevention of pollution

124p Developing Environmentally Friendly Products andServices

127p Biodiversity/Promoting Environmental
Communications

131p Third-Party Veriﬁcation Report

Views linked with the corporate philosophy, which have been highly valued by KOKUYO

It has become common practice to engage in business activities
in consideration of the environment,
and it is the origin of the eco-batsu activities.
ere is no goal for ecology. Working face to face withthe environment is to think outside of the box.
Zentaro Kuroda

In 2008, KOKUYO made a pledge to zero the number of
eco-batsu products in three years. While the eco-batsu products
were successfully cut to zero, it also aroused the spirit of going
beyond common sense among employees as represented by theshō hyaku mai wachō pads at the same time. As long as we stayin business, we must come face to face with global environment
conservation and arrive at a solution suitable for KOKUYO that
goes beyond common sense, which is the attitude that has been
handed down since the day of establishment.

With the Global Environment (The environment)

With an understanding that solutions to the problems of global warming, deforestation, and other issues affecting the global
environment are urgently required, our entire workforce is committed to combining our collective wisdom in order to engage
in actions designed to resolve these issues.

The Group's Vision for the Environment
Building a sustainable society will require creating a recycling-oriented, low-carbon society that can coexist with nature. The
KOKUYO Group Vision for the Environment consists of an environmental philosophy and an environmental policy withseven specific activities: prevention of global warming; resource saving and recycling; procurement, development andsupply of environmentally friendly products; biodiversity; legal compliance and preventing pollution; information disclosureand communication; and environmental management. Based on this vision, all group companies have developed goals thatreflect the characteristics of their business activities and are working on reducing their environmental impact.

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KOKUYO Group CSR Report 2015

Medium- to Long-Term Environmental Action Plan
Medium- to long-term environmental action plan (fiscal year 2020)
Environmental
policyFiscal 2014
performance

Fiscal 2020
goals

Reduced by 6.9% (inJapan)

Reduce by
30% (in

Measures

Prevention of global
warmingPrevention of
globalwarming
Energy conservation

Cut CO2 emissions (vs. FY
1990)

Japan)
Cut energy consumption (vs.
FY 2010)

Reduced by 8.8%
(unit energy

Reduce by
10% (unit* average 1% reduction per year

consumption)energyconsumption)

Resource
saving andResource-saving
and recycling

recyclingmeasures

Increase the rate of recycling
in relation to the total volumeof emissions

95.1%

100%

* incl. waste materials produced atconstruction sites (prime
contractor)

We Aspire to Implement Environmental Management That Takes Advantage of the Unique
Qualities of each Company in Accordance with ISO 14001 Group Multi-Site Certification.
In 2004, the scope of registrations for the environmental management system was enlarged to cover all major consolidated
subsidiaries in Japan. This resulted in a multi-site certification system that encompasses planning, R&D, manufacturing,sales and services, and warehousing and shipping operations. The environmental management system is structured toreflect the level of the environmental impact while preserving consistency across the KOKUYO Group. Companies andfactories with a relatively large environmental impact are classified as individual units. Companies with a relatively small
impact are classified as common units. In addition, the environmental management system reflects the unique aspects of
the activities of each group company. This allows companies to perform environmental management that matches theiroperations, such as by establishing goals based on each company's business plan. While MELON, a database system forthe management of environmental documents and records, was previously introduced, we enhanced the functionality of thissystem in July 2013 in an effort to expand the scope of target sites and achieve improvements in terms of theuser-friendliness, efficiency, and accuracy of document management and browsing.

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Results of Internal Audits and Third-Party Inspection
The KOKUYO Group performs internal audits in two stages: primary audits are conducted by operating companies andsecondary audits are conducted primarily by the ISO Promotion Secretariat. Ensuring compliance with laws and regulations
is the highest priority of these audits. Group audits also undergo ISO 14001 third-party inspection and the CSR Report ischecked by a third party. For fiscal year 2014, primary audits were conducted between July 1 and 31, secondary audits
were conducted between August 1 and 29, and third-party inspection was carried out between December 2 and 5.

Internal audits

Third-party inspection (ISO 14001)

FY in which
conducted

2013

2014

Sites subject tomonitoring

75

69

FY in which conducted2013(periodic)

2014(periodic)

Sites subject to examination

23

19

0

0

Matters cited for improvement· Primary audits

60

54· Secondary audits

15

15

nonconformity

Matters cited

55

40· Improvement opportunities

20

23

16

9

Strong points

00Good points

6

7

39

31

· Minor points of· Minor points ofnonconformity· Corrections

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KOKUYO Group CSR Report 2015

With the Global Environment (The environment)

We are developing an environmental management system to be an Asian company. In order to take measures tosignificantly cut the amount of greenhouse gases with a view to achieving a low-carbon society, we expanded the scope ofour reporting targets.

Summary for Fiscal 2014
If calculated for the existing scope of operations using the electricity emissions factor of 0.378 kg-CO2/kWh (which is theoverall power average in 2000 as reported by the Federation of Electric Power Companies), the KOKUYO Group's CO2
emissions in fiscal 2014 totaled 26,264 tons, 362 tons（1.4%） more than in the previous fiscal year. Based on estimates,
there were emission reductions of 784 tons due to operational improvements and 311 tons due to equipment improvements.
Manufacturing operations and the closing and consolidating of facilities raised emissions by 1,477 tons. As a result, there
was an effective reduction in CO2 emissions of 1,095 tons from a combination of operational and equipment improvements.
Consequently, excluding the impact of production activities, emissions were down 4.1% from the previous fiscal year toallow us to meet our goal of a 1.3% reduction.
Looking at sources of CO2 emissions, there was a decrease of 525 tons at factories due to higher manufacturing efficiency
and other improvements. However, factories recorded a net decrease in emissions of about 136 tons because growth inproduction volume raised emissions by 389 tons. For distribution activities, although emissions increased by 114 tons
because of a higher volume of operations, there was a reduction of 138 tons due to heightened measures to conserve
electricity and other energy use for a net increase in emissions of 24 tons. In the offices, emissions were down
approximately 200 tons thanks to the more efficient use of heating and cooling systems and the effective use of heatstorage. Additionally, to use energy more efficiently, we oversee unit energy consumption, which is obtained by dividing
energy consumption by sales. In fiscal 2014, our unit energy consumption was 1.4% less than in the previous fiscal year.

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Major Increase in CO2 as Emission Figures Worsen
If the figures for each of the various countries on the greenhouse gas (GHG) protocol website made public by the World
Business Council for Sustainable Development (WBCSD) and the World Resource Institute (WRI) are adopted as thefigures for the CO2 emission coefficients and added to the Japanese CO2 emission coefficients based on the Act
Concerning the Promotion of Global Warming Countermeasures (for fiscal 2014, actual emission coefficients for eachpower company for fiscal 2012 and 2013), then the total rises 7,974 tons to 34,238 tons.

Expanding the Scope of Reporting
While 16 companies were included in the scope of CO2 emission reporting (reporting scope A *1 ) until fiscal 2011, allconsolidated subsidiaries came to be included in the scope of reporting starting in fiscal 2012 (for fiscal 2014, 33
companies; reporting scope B *2 ). As a result, CO2 emissions totaled 45,479 tons (including 1,743 tons at
non-consolidated sales companies). The use of a less favorable emission coefficient and the extension of CO2 emission
reporting to the supply chain have resulted in significant changes for the KOKUYO Group. Consequently, we believe thatthe medium-term goals for emissions will have to be reexamined.
*1: A: KOKUYO Co., Ltd., 12 consolidated subsidiaries, and 3 affiliated companies*2: B: KOKUYO Co., Ltd., 22 consolidated subsidiaries, and 10 affiliated companies* See page“2015data.pdf”11p： 「Changes in CO2 emissions」

Measures for the prevention of global warming in our plants
A reduction of 316 tons in CO2 emissions was achieved at our plants thanks tooperational improvements attributed in part to a shortening of the time required to makechanges in product types, the thorough application of rules for the operations of
production equipment, the conducting of inspections, the elaboration of production
schedules, and a reduction of waste made possible through energy checks. In addition,a reduction of 209 tons in CO2 emissions was achieved by switching from LPG to LNG,
adapting systems to enable the installation of inverters, switching to LED lights, andotherwise embracing energy-saving equipment. While an increase in production
resulted in an increase in CO2 emissions of 389 tons on a year-on-year basis, there wasa net reduction of 136 tons in CO2 emissions (reduction of 179 tons domestically and anincrease of 43 tons overseas) resulting from a reduction of 525 tons attributed to theabove operational improvements and equipment improvements.

119

A reduction of approximately 170
tons in CO2 emissions wasachieved by our plant in Thailand
thanks in part to a review carriedout into the operations of molding
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KOKUYO Group CSR Report 2015

Measures for the prevention of global warming in the area of logistics
In the area of logistics (storage and shipping), we achieved a reduction of 24 tons in
CO2 emissions compared to the preceding fiscal year. A reduction of 88 tons in CO2emissions due to operational improvements attributed to the promotion of energy-saving
activities carried out on a day-to-day basis was achieved. In terms of equipment
improvements, a reduction of 50 tons in CO2 emissions was achieved thanks to theintroduction of energy-saving lighting fixtures and a review of the optimal luminance ofthe distribution center. In operating an automated three-dimensional warehouse,
KOKUYO Logitem's Ina Distribution Center adopted an electricity demand meter as partof efforts to reduce peak electricity consumption in response to tight demand-and-supply
conditions for electricity. While CO2 emissions increased by 114 tons due to an

Hybrid streetlights installed at our
Metropolitan Area Integrated
Distribution Center (IDC)

increased rate of operations in 2014, a net reduction of 24 tons in CO2 emissions was achieved by way of a reduction of
138 tons due to operational improvements and equipment improvements.

Global Warming Preventive Measures at Offices
Offices lowered CO2 emissions by 202 tons over the previous fiscal year. To accomplish
this, we conducted a review of the methods by which heating and cooling systems werebeing operated, a review of working styles, promotion of no-overtime days and activity
encourages employees to go home early, and reduction of electricity use, such as byreplacing lighting fixtures with LEDs. At our Shinagawa office, an electric power
visualization system is used to lower electricity use during on-peak hour of daytime
through the efficient operation of heating and cooling systems and heat storage tanks.
In addition, a program that encourages people to use public transportation for sales
activities cut gasoline use by 8%, which represents a reduction in CO2 emissions of 160

Solar panels installed at our
Shinagawa officetons. In fiscal 2014, the cool biz and warm biz campaigns were combined into a smart biz campaign that is in effect all year
long.

Ascertaining GHG emission volumes for the entire supply chain
In recent years, a movement to engage in carbon disclosure projects

Emission volumes by scope(CDP) and otherwise manage and externally disclose Scope 3(encompassing production, shipping, business trips, commutation, andother categories) emissions generated through supply chains thatindirectly emit GHG has been gaining steam. While the KOKUYO Group
has also endeavored to engage in such actions in shipping and certain
other areas, initiatives were undertaken beginning in 2014 in accordancewith the Ministry of the Environment's Basic Guidelines on Calculating
Volumes of Greenhouse Gas Emissions Generated Through Supply
Chains. The volume of GHG emissions for the entire supply chain in
fiscal year 2014 was 544,430 tons of CO2. Scope 3 emissions
accounted for approximately 90 percent of this figure with 70 percent thereof attributed to “Category 1 purchased products
and services”. Since data has not yet been fully collected from all cooperating plants, however, this percentage figure is
expected to rise. Given that there are also problems relating to other categories, amelioration will proceed beginning next
term. Third-party verification services provided by Bureau Veritas Japan have also been secured to ensure the reliability of
disclosed information and data.

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With the Global Environment (The environment)

To promote the growth of a recycling-oriented society, we are endeavoring to reduce, reuse, and recycle by effectively
utilizing limited resources.

Summary for Fiscal 2014
Higher Recycling Rate
The volume of waste materials generated by KOKUYO Group business offices in fiscal 2014, including all consolidated
subsidiaries, was 19,422 tons (including 198 tons at non-consolidated sales companies) for a year-on-year increase of 52
tons. Of this amount, the production increases at factories overseas accounted for approximately 180 tons. While
production rose by 3.6%, we managed to limit the increase in the volume of waste materials generated to 0.9% thanks inpart to improved yield rates.
Such efforts on our part give rise to a recycling rate of 98.0%, an increase of 0.2 percentage points over the previous year.

Thoroughly ensuring the proper disposition of waste materials
The responsibilities of the prime contractor with respect to the disposition of waste materials generated on construction sites
have been clarified and the obligations of the waste-generating company have been tightened. In fiscal year 2014, efforts
were made to contain waste materials in part through a review of the methods by which parts subject to processing atconstruction sites are ordered. As a result, we determined that we generate approximately 4,500 tons of waste materials on
construction sites with a recycling rate of approximately 82.5 percent. Waste materials generated on construction sites are
not homogenous, such that there are many cases in which recycling is difficult due to the intermingling of various types ofwaste materials in a given batch. Nevertheless, we will continue to properly dispose of waste materials in conjunction with
the implementation of controls on their generation and shall aim to achieve our medium- and long-term target of 100
percent for the rate at which waste materials are recycled.

Reusing and Recycling End-of-Life Products
When we deliver products, we pick up end-of-life products for disposal from customers
and recycle or reuse these items depending on their condition.
In fiscal 2014, KOKUYO Logitem collected 1,050 tons of office desks and chairs andother used products. Three tons were reused and 385 tons were dismantled and sorted
for recycling. Our distribution center manages to reduce waste materials byapproximately 40 tons by repairing and reusing cardboard, wooden pallets, and otheritems.
A chair being dismantled and sorted
for recycling

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When we have furniture that we really love, we want to continue to use it for a
lifetime, even if it has to be repaired sometimes. Also, if we use furniture for along time, we do not need to waste energy or effort in disposing of it. That is
also good for the environment. Related to these ideas, ACTUS is conducting
activities that change comfort into eco-friendliness, which it has named the
EcoCochi Plan. It involves developing products that have a long useful life,
are completely safe and have no ill effects on human beings, are integrated
into recycling activities, and for which after-sales service is easy to access. As a result of this EcoCochi Plan,customers are able to choose furniture that is perfectly safe, as a matter of course, and gentle on theenvironment.

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With the Global Environment (The environment)

We are striving to prevent environmental pollution by complying with statutes and regulations relating to the environment aswell as with industry guidelines to which we have subscribed and our own standards.

Overview of fiscal year 2014
Disposing of waste electrical equipment that includes minute amounts of PCB
Transformers and other electrical equipment decommissioned as a result of the dismantling of the south building on thepremises of KOKUYO's head office in Osaka have been subject to PCB measurements in order to check whether such
equipment contains polychlorinated biphenyl (PCB).
These measurements revealed the presence of minute amounts of PCB in a number of transformers and other devices,which were then properly disposed of by entrusting their disposition to facilities certified for the detoxification of wastematerials containing low concentrations of PCB.

Transformers prior to dismantling

Storage prior to disposition

Removal for detoxification

Proper disposition of chemical substances
The KOKUYO Group endeavors to properly manage and handle chemical substances.
At KOKUYO Furniture's Shibayama Plant, visualization is undertaken when handling chemical substances included in paintand other materials. The company is converting safety data sheets (SDS) for purchased paint and other items into a
database into which warnings for usage and references to related laws and regulations are included in order to enablerequired information to be checked at any time. In addition, efforts are being made to prevent accidents by posting panels
indicating warning levels for toxicity, hazardousness, and flammability as divided by color (green, yellow, and red) based on
the content of chemical and other substances at sites where paint and other items are used and by making warnings more
visible for handlers at the time that such substances are used.

Panels posted at the Shibayama
Plant

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With the Global Environment (The environment)

The KOKUYO Group is working on new environmental technologies and green procurement to in order to reduce theenvironmental load over the entire life cycle of its products.

Fiscal 2014 Activities
Continuing to Ensure That No Eco-Batsu Mark Graces Our Catalog
The KOKUYO Group started using the Eco-Batsu mark for products in the 2008 General Catalog. This mark is used forgroup products that are not sufficiently environmentally friendly at any of the stages of their life cycle: manufacturing,
distribution, usage, and disposal. We tasked ourselves with removing the Eco-Batsu mark from all of our products in three
years. This goal was reached in the 2011 General Catalog and no Eco-Batsu products have emerged since that time. In
continuing this trend, none can be found in the 2015 General Catalog.

Continuing evolution
Verification of conformity to standards has been more thoroughly undertaken since 2012. This process has revealed thatcertain products do not conform to standards for compliance with the Green Purchasing Act. While this fact has been
accepted in good faith, we believe that it reflects a raised level of verification. Our Eco-Batsu initiative was an opportunity forreviewing manufacturing processes and getting employees not directly involved with manufacturing to review their own
approaches to work, office environments, and proposals made to clients. Since reaching our goal of zero Eco-Batsu marks,
we have been pursuing the development of eco-friendly products that over-deliver to customers in accordance with thewatchword: eco + creative.

Eco-Batsu mark124

KOKUYO Group CSR Report 2015

Promoting the management of chemical substances included in products
In recent years, regulations governing chemical substances-including the RoHS
Directive and REACH in Europe-have been strengthened worldwide and demands forreports on the status of the use of a wide range of chemical substances have been
received from the market. The KOKUYO Group recognizes that the non-use of
substances regulated by law and the management and provision of information on thestatus of the use of substances for which there is potentially a negative impact on theenvironment and people are social obligations shared by all companies that provide
products. At the same time, there has been a clear shift from a conventional
hazard-based management approach that used to focus only on the hazardous nature
inherent in chemical substances to a risk-based management approach based on the

Checking for the presence of heavy
metals using an X-ray fluorescence
spectrometer.

scientific method. In responding to these global changes, we first set about specifying a hazards-based list of substances in
2014. We will begin a risk survey in collaboration with business connections and other companies tied to the supply chain
for our products and accordingly manage chemical substances contained in our products.

FSC®-certified products
The Forest Stewardship Council® (FSC) is one of several third-party organizations operating an international forestry andwoodlands certification program and aims to appropriately conserve the environment found in forests and woodlands andpromote the management of forests and woodlands in a manner that is socially beneficial for local communities andeconomically sustainable. COC (short for "chain-of-custody") certification constitutes the certification of the management of
the processes of processing and logistics. In the KOKUYO Group, KOKUYO S&T, KOKUYO Furniture, and Kaunet have all
obtained FSC® and COC certification and are selling copier paper, notebooks, and other FSC-certified products.

Protocol counters made with timber from forest thinning
Commercialization was achieved by harnessing the advantages of timber from forest
thinning, thoroughly verifying functions and usability to ensure that counters are used byvisitors and staff members alike, and keeping the following points in mind:
1) Ensuring strength independently of variability in the quality of the woodmaterial
Strength is ensured by using steel legs attached to the structure while the surface
materials (such as top panels and side boards) can accommodate variability in the quality of the material.
2) Adopting universal design
Designed by taking usage by an unspecified large number of visitors (such as the elderly, persons in wheelchairs, andcolor-blind persons) into account.
3) Design that dispels the negative image of furniture made with timber from forest thinningFeatures a design that presents an upscale image premised on the use of straight lines and that evokes a sense of thelateral expansion of space125

KOKUYO Group CSR Report 2015

By harnessing the know-how that we have cultivated to date, we have helped construct office space as well asdelivered information desk counter and lobby furniture made with cypress timber from forest thinning for thisnew complex.

Minato Park Shibaura is a complex that opened in Minato Ward in December 2014. It has adopted numerous
leading-edge technologies as a facility that is suitable for Minato Ward, an advanced autonomous community interms of taking environmental considerations into account. The local government has achieved a 45 percent
reduction in carbon dioxide emissions from facilities (compared to 1990). As a model enterprise under the
Minato Model Carbon Dioxide Fixation Certification Program*, this complex has drawn nationwide attention as
an attractive facility built using generous amounts of domestic timber throughout the structure, such as for thefloors, walls, ceilings, and interior and exterior finish.
KOKUYO supports Minato Ward's initiatives for environmental conservation, has proposed more functional
products that are easy to use for visitors while remaining environmentally friendly, and has produced anddelivered products suitable for Minato Park Shibaura, of which the centerpiece is undoubtedly the first-floor
information desk counter. We will take what we learned from this valuable experience to further entrench the
Minato Model Carbon Dioxide Fixation Certification Program in Minato Ward as a company operating in thisward and will strive to help expand the environmental conservation activities promoted by Minato Wardnationwide.
* Minato Model Carbon Dioxide Fixation Certification Program
The Minato Model Carbon Dioxide Fixation Certification Program is a program that was launched in October 2011 for the purposeof contributing to the prevention of global warming through increases in the volume of carbon dioxide (CO2) that is fixed in theward and the promotion of the proper maintenance of domestic forests and woodlands by way of efforts to encourage the use ofdomestic timber for buildings and structures built in the ward.

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With the Global Environment (The environment)

The KOKUYO Group strives to reduce its impact on ecosystems and help conserve natural habitats by carrying out
business activities that take biodiversity into proper account. We are proactively engaged in forest-conservation activities in
the Shimanto River basin area of Kōchi Prefecture and environmental conservation activities in the area in and around Lake
Biwa in Shiga Prefecture.

KOKUYO Group's Basic Policy for Timber Procurement
In 2011, the KOKUYO Group prepared its Basic Policy for Timber Procurement and clarified its stance regarding thesustainability of forest resources that are the most significant of the Group's important raw materials. Since its founding, the
KOKUYO Group has broadened and developed its business activities using forest-derived materials, including paper
production. KOKUYO is fully aware of the roles that forests have played and will continue to play regarding global warming
and biodiversity. KOKUYO will aim to develop in harmony with forest resources as it gives proper regard to the rational
procurement of materials, transparency, and sustainability.

The KOKUYO Group procures forest-derived materials according to the following policy and is working to makecontinuing improvements.
1. Aim for highly transparent materials procurement, with an awareness of the illegal cutting and illegaltransactions issues in the timber trade.
2. Procure material through more appropriate supply chains to support sustainable use of forest resources.
3. Based on an awareness of the social value and roles of forest resources in the region, procure materials withdue consideration for maintaining supply and preservation of resources.

Obtaining certification as a company dealing with matters of legality and sustainability
We have been granted certification as a company dealing with matters of legality and sustainability by the Japan OfficeInstitutional Furniture Association (JOIFA) in line with revisions made to the Green Purchasing Act. We are endeavoring topromote the use and sale of timber and wood products that have been certified as legal and sustainable in such terms asforms control, the appointment of managers, and usage reports in accordance with this practice code.

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Status of the use of wood materials
Approximately 4,600 tons of wood materials were used by KOKUYO Furniture in fiscal year 2014 to make products. This
figure is equivalent to 5 percent of all materials used for production (excluding packaging). In breaking down these woodmaterials, 20 percent consists of solid wood, laminated wood (plywood), and other wood materials which are made with raw
lumber while 80 percent consists of wood materials which are not made with raw lumber, such as thinned wood, waste
wood, unused materials and wood boards constituting pieces fabricated from the foregoing materials (MDF and particle
boards). This information is reported annually to JOIFA as yearly handling results for certification as a company dealing with
lawful wood materials under the Green Purchasing Act. We also endeavor to ascertain the types of trees corresponding towood materials which are made with raw lumber pursuant to JOIFA's guidelines on the written declarations that are made ofwood.

Small social contribution activities: cooperating with the Tanzania Pole Pole Club
Since 2008, the KOKUYO Group has been supporting the international cooperative
activities (collecting used stamps and cards) of the Tanzania Pole Pole Club, agrassroots civilian group engaged in tree-planting activities together with villagers in theeast African country of the United Republic of Tanzania. As a result of collection
activities undertaken nationwide by the KOKUYO Group, we were able to collect 60,370
stamps and 1,010 cards in fiscal year 2014, resulting in the donation of approximately
200 seedlings. These seedlings are being harnessed for tree-planting activities carriedout on Mount Kilimanjaro (United Republic of Tanzania), which has been registered as a World Heritage site.

Yui-no-Mori ProjectBegun in 2006 in Shimanto, Kōchi Prefecture, with the aim of regenerating a decaying planted forest and revitalizing thecommunity that seeks to protect this forest in accordance with the theme of creating a virtuous circle between theenvironment and the economy, the KOKUYO Shimanto Yui-no-Mori Project marked its ninth year of operations in 2014.

Periodically monitoring the effects of thinning
The visualization of the effects of thinning is essential for carrying out forest-conservation activities. In order to monitor theeffects of these activities over the long run, we conduct a monitoring survey once a year in collaboration with the Shimanto
Forestry Cooperative, Shimanto High School, and the staff members of the Kōchi Prefectural and Shimanto municipal
governments. A monitoring survey was conducted for the eighth time in October 2014. As part of this survey, a vegetation
survey is ongoing at two specific sites. For this survey, the types of vegetation and extent of coverage are examined foreach of the following categories: tall trees, low trees and shrubs, and herbaceous plants (grass). This most recent survey
revealed a reduction in the number of species from 74 to 56 at one site and from 75 to 61 at the other site. In particular, thenumber of species of herbaceous plants declined significantly, a result that is thought to be attributed to the growth of low
trees and shrubs and to damage caused by foraging deer.

Expanding the Yui-no-Mori Project
In order to effectively take advantage of forest thinning, KOKUYO Furniture has been manufacturing and selling furniture
made with timber from forest thinning in collaboration with the local Shimanto Forestry Cooperative since 2000. Catalog
retailer Kaunet also began selling primarily stationery as Yui-no-Mori branded products in 2007 and currently offers 33 items
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KOKUYO Group CSR Report 2015

as of 2014. In order to promote understanding of its activities and increase supporters, Kaunet implemented a frameworkfor donating customer points for the thinning of Yui-no-Mori in 2008. This year alone, the company has received
approximately 100 applications for the submission of donations. The Yui-no-Mori 1% Donation Project was commenced in
February 2011 and continues to operate to this day. For this project, a portion of the sales of Yui-no-Mori products goes to
the National Land Afforestation Promotion Organization's Green Fund. Yui-no-Mori began as a 100-hectare site and has
grown to approximately 4,900 hectares in terms of applicable area and to 1,135 hectares in terms of total thinned forest
area by fiscal year 2014. A certificate attesting to the absorption of 5,275 tons of CO2 has been granted by Kōchi
Prefecture. In these ways, Yui-no-Mori is expanding thanks to the support of many people and parties. The challenges of
the Yui-no-Mori project will continue in the aim of cultivating a virtuous circle between the environment and the economy.

Vegetation survey being conducted

Fourth year of employees planting

Absorption certificate being granted

chestnut trees

ReEDEN Project
KOKUYO Product Shiga is a main plant for the KOKUYO Group where notebooks and other paper products are
manufactured. As the plant operates near Lake Biwa, a place that supports the lives of people and that is a dynamic habitat
for many forms of life, KOKUYO Product Shiga has engaged in proactive activities for environmental conservation. Focus
has been especially directed towards activities involving reeds. Reeds could not only absorb carbon dioxide but also help
purify the water by absorbing nitrogen and phosphorous in the process of growing and serve as a home for organisms living
in Lake Biwa. Reeds used to be used for making reed screens, roofs, and other goods, however, such uses disappearedwith changes in lifestyles, such that reed beds were no longer being maintained and consequently fall into a state of
dilapidation. In November 2007, the ReEDEN Project was launched in order to promote the use of reeds and spreadknowledge on the current state. Activities have been steadily expanding in line with the desire of KOKUYO to spearhead
such activities as a local company engaged in the production of paper products.

Protecting Lake Biwa by promoting the use of reeds
By harnessing production technologies cultivated to date and development capabilities with a paper-production company,
KOKUYO Product Shiga has been using reeds to produce copier paper, notebooks, and other industrial products andselling them at a price suitable for the market under the ReEDEN Series brand name. Business cards made with 100
percent reed pulp, reed-based brush pens, and other high value-added products have also been developed in an effort tocreate a market that contributes to the environment through the use of reeds. This series was certified by Shiga Prefecture
in 2012 as a Kokocool Mother Lake Selection brand for constituting a product or service that conveys the essence of Shigato the market. A portion of sales is donated to a local environmental organization for activities dedicated to the conservationof reeds.

The ReEDEN Tabokun notebook
created in collaboration with Shiga

Lake Biwa stationery

Notebook made from flax and reed

Furusato tourism ambassador
Takanori Nishikawa's mascot
character

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KOKUYO Group CSR Report 2015

Recruiting members of the local community to protect Lake Biwa with reeds
The Network to Protect Lake Biwa With Reeds was set up in 2009 with KOKUYO
Product Shiga serving as the secretariat of this organization. This network aims tocontribute to the conservation of the natural environment of Lake Biwa in part throughthe establishment of modest connections among various companies and organizations.
This network, which began with a handful of corporate members, now boasts a
membership of 110 supporting entities. The primary activity of this network entails theconservation of reed beds that fulfill an important role for the Lake Biwa ecosystem andwater environment. In the beginning, reeds were reaped in winter by a number of
KOKUYO Product Shiga employees. Presently, members of local environmental groups
and representatives of network members gather in the hundreds to participate inReeds being harvested withmembers of the Network to Protect
Lake Biwa With Reeds

activities. Network communications are transmitted to introduce topics of local environmental interest and the environmental
activities of member companies, thereby raising everyone's level of environmental awareness and community awarenessas well as deepening links. In order to broadly contribute to improving the environment of Lake Biwa, we are seeking newactivities that will garner the attention of the local community for targeting various environmental issues affecting Lake Biwa
and helping conserve the environment in a way that is fun and enjoyable.

As cause for celebration, the Lake Biwa Museum became the one hundredth
member on this network. I was deeply impressed to learn that so many
companies were passionately engaged in dealing with environmental
problems through this network. With a desire to introduce such corporate
efforts, we put on an exhibition of the initiatives undertaken by the ReEDEN
Project entitled "A corporate project for conserving reed beds" between
November 6 and 28. While we had previously presented and introduced
initiatives undertaken by schools and private citizens' groups, this is really the

Keiichi Takahashi,
Deputy Director,
Lake Biwa Museum

first time that we focused on efforts carried out by corporate players. Thismeans that we have expanded the scope of some of our basic philosophies-namely, the fact that we constitutea museum as a place for interactions and the fact that we constitute a museum for everyone and everywhere in
the community-to include companies. The ReEDEN Project promotes commercialization rooted in reed
harvesting as an on-site activity. We expect to see such activities continue for a very long time to come.

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KOKUYO Group CSR Report 2015

With the Global Environment (The environment)

To obtain an independent opinion regarding the accuracy, transparency, consistency, validity, and completeness of theenvironmental performance data of the KOKUYO Group, we asked Bureau Veritas Japan Co., Ltd., to prepare a third-party
verification report.

Outline of third-party verification
Environment load data and scope 3 emissions for thirty-three KOKUYO Group companies have been subject to verification
at KOKUYO's head office. On-site examinations relating to data measurements and management methods have also been
conducted at three sites in Japan-KOKUYO Product Shiga (plant), KOKUYO Supply Logistics' Chubu IDC (logistics), and
the Actus head office (offices and store) - and two sites overseas-KOKUYO IK Thailand (plant) and KOKUYO Malaysia(plant). This process yielded a number of matters that were pointed out: a total of 12 assessable points, 9 opportunities foramelioration, and 53 requests for modifications. For the verification of scope 3 emissions, the need to have the grounds forcalculations clarified and other such matters were pointed out. Based on these matters that were pointed out to us, we will
endeavor to enhance the disclosure of information encompassing the entire supply chain and improve the precision of suchinformation.

On-site examination at our plant in Thailand

On-site examination at our plant in
Shiga

131

KOKUYO Group CSR Report 2015

CSR Management (Organizational governance)

Information about issues concerning the following core subjects of ISO26000 can be viewed in the following sections of thisCSR report.
ISO26000
Core subjects

IssuesWeb page
Top Dialogue
Corporate Philosophy
Top Message
Basic Concepts of CSR
Corporate Governance
KOKUYO CSR Charter
KOKUYO Group Code of Conduct

Organizational
governance

Anniversary month of KOKUYO's founding

Issue 1: Organizational governanceEfforts for Promoting an Understanding of KOKUYO's
CSR Activities
Initiatives to Promote Compliance
Responsibilities to shareholders
Awards and Other Recognition Received from Outside
the KOKUYO Group
Dialogue with Customers
CSR Data: GovernanceCorporate Philosophy
Top Message
Basic Concepts of CSR
KOKUYO CSR Charter

Human rights

Issue 1: Due diligence
Issue 2: Human rights risk situations

KOKUYO Group Code of Conduct

Issue 3: Avoidance of complicity
Issue 4: Resolving grievances
Issue 5: Discrimination andvulnerable groups

CSR Activities

Efforts for Promoting an Understanding of KOKUYO's
Initiatives to Promote Compliance
Customer Support and Services
A System for Utilizing Feedback from Customers

Issue 6: Civil and political rights
Issue 7: Economic, social, andBasic Framework for Diversity
Support for Active Participation of Diverse Human
Resources

cultural rights
Issue 8: Fundamental principles andrights at work

KOKUYO Group Basic Procurement Policy
Working together with Our Suppliers
Initiatives in China
Initiatives in India
CSR Data: Society

Labor
practices

Issue 1: Employment and

KOKUYO CSR Charter

employment relationships
Issue 2: Conditions of work and

KOKUYO Group Code of Conductsocial protection
Issue 3: Social dialogue
Issue 4: Health and safety at work

Human Resource Development Program

Personnel System
Achieving a Good Work/Life Balance132

KOKUYO Group CSR Report 2015

Enhancement of Global Human Resource Development
Issue 5: Human resource
development and training in the

Labor Practices/Safety and Healthworkplace

Communicating with Employees

Healthy Living and Mental Health
CSR Data: Society
KOKUYO CSR Charter
KOKUYO Group Code of Conduct
Initiatives in India
Environmental Management
Global Warming Preventive Measures

Issue 1: Prevention of pollution

Environment

Resource-Saving and Recycling Measures

Issue 2: Sustainable resource use
Issue 3: Climate change mitigation
and adaptation

Compliance with Laws and Regulations and Preventing
Pollution
Developing Environmentally Friendly Products andServices

Issue 4: Protection of theenvironment, biodiversity, andrestoration of natural habitats

Taking into Account Biodiversity and Promoting
Environmental Communications
Third-Party Verification Reports
Environmental Performance Data
Reports by Business Site
Yui-no-Mori
Corporate Governance
KOKUYO CSR Charter

Fair businesspractices

Issue 1: Anti-corruption
Issue 2: Responsible politicalinvolvement
Issue 3: Fair competition

KOKUYO Group Code of Conduct

Issue 4: Promoting social
responsibility in the value chain
Issue 5: Respect for property rights

KOKUYO Group Basic Procurement Policy

Efforts for Promoting an Understanding of KOKUYO's
CSR Activities
Initiatives to Promote Compliance
Working together with Our SuppliersWorking together with Supply Channel Participants
Initiative of KiSPA for deepening the bond with retailstoresConsumerissuesIssue 1: Fair marketing, factual and

KOKUYO CSR Charter

unbiased information, and faircontractual practices
Issue 2: Protecting consumers'

Special feature: Refine value for Learners and Workers
Views Regarding Quality Assurance at KOKUYO S&T
Views Regarding Quality Assurance at KOKUYOFurniture

health and safety
Issue 3: Sustainable consumption
Issue 4: Consumer service and

How Kaunet Considers Qualities
Activities for Creating a Menu of Countermeasures for
Disasters

support and resolution of complaintand dispute

Customer Support and Services

Issue 5: Consumer data protection
and privacy

Community
involvement

A System for Utilizing Feedback from Customers

Issue 6: Access to essential
services
Issue 7: Education and awarenessDialogue with Customers

Issue 1: Community involvement
Issue 2: Education and culture

KOKUYO CSR Charter

The Future of Tohoku
Eco-Batsu Initiatives

KOKUYO Group Code of Conduct

133

KOKUYO Group CSR Report 2015

The Job Study Initiatives

anddevelopment

Issue 3: Employment creation and

KOKUYO Design Awards

skills development

The Future of Tohoku

Issue 4: Technology development
and access

Initiatives in China

Issue 5: Wealth and income creation
Issue 6: Health
Issue 7: Social investments

Contribution Activities Deeply Rooted in Regional
Communities

Initiatives in India

Taking into Account Biodiversity and Promoting
Environmental Communications

134

KOKUYO Group CSR Report 2015

Third-Party Assessments

List of awards and other recognition received from outside the KOKUYO Group
Company
KOKUYO Product Shiga

KOKUYO Camlin

KOKUYO

Kaunet

KOKUYO S&T

UDS and KOKUYOFurnitureAwardsSponsorReceived the grand prize at the first Kaueco

Green Purchasing

GP

Network

Recognized as one of Asia's Most

World Consulting

Promising Brands 2014 in the stationery
category

and Research
Corporation

Received the Best Video Marketing Awardfor the KOKUYO channel

Received an excellence award at theHitosuzumi Awards 2014

Received an honorable-mention award at aregional invention awards ceremony fortechnology used for applying patterned tapeglue
Received an excellence award at APIDA
2014 (Asia-Pacific Interior Design Awards2014) in the interior design category

Date
March 2015

January 2015

December

Brightcove Inc.

2014

Heatstroke
Prevention
Communication
Project

November
2014

Japan Institute ofInvention andNovemberInnovation

2014

Hong Kong Interior
Design Association(HKIDA)

November
2014

Nikkei Business
Publications

November
2014

Japan Institute of
Design Promotion

October 2014

Received a first-place award for the third
KOKUYO Furniture

year in a row in the 2014 Rankings of
Manufacturers of Desired Building Materials
and Equipment in the office furniturecategory

KOKUYO S&T

Received 2014 Good Design Awards for two
products (Jibun-Techo (2015 version) andwhite-board marker Yokumi-L (direct liquid
cartridge type))

KOKUYO Furniture

KOKUYO Supply Logistics

Received a 2014 Good Design Award forJapan Institute of

office chair Scirocco

Design Promotion

Received an award recognizing the Kinki
IDC as an “excellent building in terms ofEnvironmental

reductions achieved in the volume of trash
generated”

KOKUYO Camlin

Eight teams and six teams belonging to
KOKUYO Camlin respectively won gold andsilver medals at the Chapter Convention on
135

October 2014

Bureau, City of
Osaka

October 2014

Quality Circle Forumof India

September
2014

KOKUYO Group CSR Report 2015

CompanyAwardsSponsor

Date

Quality Concepts

KOKUYO Supply Logistics

Received an award recognizing the Kyushu
IDC as having endeavored to rationalize

Japan Institute oflogistics at the National Convention forHighlighting Examples of Logistical

Logistics Systems(JILS)

August 2014

Improvements 2014

KOKUYO S&T

Heartland

UDS and KOKUYOFurniture

Received an Invention Award at a national
invention awards ceremony for theJapan Institute ofInvention andtechnology behind Harinacs

Innovation

Selected as an excellent example of a
Discover Village Treasure
Hotel Kanra Kyoto was selected first in aranking of popular hotels in free paper
Rakuten Travel Navigator - Summer/Fall

Ministry ofAgriculture, Forestry

July 2014

June 2014

and Fisheries

Rakuten Travel

June 2014

Edition@Kyoto
KOKUYO Camlin

Received a gold medal at a Kaizen
Competition

Quality Circle Forumof India

June 2014

UDS and KOKUYOFurniture

Hotel Kanra Kyoto and Hotel Anteroom
Kyoto received double awards at Trip
Advisor's Certificate of Excellence 2014

Trip Advisor

May 2014

KOKUYO S&T

Received a Red Dot Award at Product
Design 2014, a German design award, for
Magnet Smoothstyle products sold under
original brand name Trystram

Nordrhein Westfalen

April 2014

KOKUYO

Received an incentive award at the 4th
Career Education Awards for a job-study
seminar held with representatives of otherindustries

Ministry of Economy,
Trade and Industry

February
2014

Trip Advisor

January 2014

Japan Facility
Management

January 2014

Hotel Kanra Kyoto received awards for the
UDS and KOKUYO

second year in a row in two categories atFurniture

Trip Advisor's Travelers' Choice Awards
2014

UDS and KOKUYOFurniture

An incentive award was received at theJapan Facility Management Association
awards for the effective use of Anteroom
Apartments Osaka and other properties by
NTT West Corporation

136

Association

KOKUYO Group CSR Report 2015

KOKUYO Co., Ltd.
Corporate Communications, Corporate Administrations Department
6-1-1 Oimazato-minami, Higashinari-ku, Osaka 537-8686, Japan

Published by

Direct inquiries to KOKUYO Co., Ltd. Customer Center
Tel: 0120-201-594 (Domestic Only)

Account Book

FukurochoWestern-style accountledgers

Marbling

Sample of ledger paper

Nakamichi Factory

Duplicate Itemized Invoice

Sign of dealer

Carbon Paper

First exclusive dealer(Ito Shoten)

Designed stationery pad

KOKUYO Creed

Stationery Pad

Receipt

Functional Stationery Pad

Flat File

Free Album

Graph pad

Steel desk

ScrapbookAlbum

The industry’s first
designed notebook

Loose Leaf (payroll book)

Home Cabinet

Essay Pad

Pritt

Elefinder (outer box)

High-Grade Receipt

Tube FileFirst-generation
Campus Note

Desk and chair for student

Theater seats

Shinagawa OfficeSecond-generation
Campus Note

File box

Bio-Tech Chair

Museum case

Tack Memo

Ginger Town
(original mascot)

Furniture and fixtures forbook store

Corsa chairC SquareClear Book

Fourth-generation
Campus Note

Simplex

Punyo Punyo Pin

Kaunet catalog (First issue)

TepitaEpiphyKao Note (Face Notebook)

Wammy

Harinacs

Airofit

M4

ReEDEN Colours

Madre

KOKUYO Group CSR Report 2015