KOKUYO Group CSR Report 2016

Detailed Version

KOKUYO's CSR Charter
While remaining profitable and honest in its business practices, KOKUYO conducts business that is necessary
for society.
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

1

Without being satisfied with the present conditions, we continue to improve the safety and quality of2

Strive to continually innovate society through our business operations by developing new products andour entire product line and services.
services.

For Regional Communities

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.

For Environmental Conservation

1

Concentrate the wisdom of each of our employees, and align the actions of our entire company in order2

By developing Eco Products, we strive to decrease the environmental burden over the life cycle of these3

Contribute towards the advancement of a‘low carbon society’by proposing revolutionary work styles

to assist in reaching solutions for the common environmental problems facing the world today.
Products and to introduce new environmental engineering and green procurement techniques.
and environments, and decrease society's overall burden on the environment.

Corporate Activities

1

Conduct transparent, just, and free competition and business transactions while keeping sound and2

In order to become a trusted company, we strive for business partner relations that are consistently fair3

Recognize our responsibility to increase our corporate value for stockholders, and maintain a corporate

correct relations with politicians and governmental bodies.
and built upon a foundation of reciprocal cooperation, allowing for mutual growth.
management style that earns the trust of society through its transparency and virtue.

Respect for 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 forcedlabor 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.

2

KOKUYO Group CSR Report 2016

Contents

KOKUYO’s CSR Charter・ ・・・・・・・・・・・・・・・・・・・・ 2
Top Message・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 4
Introduction to the KOKUYO Group・・・・・・・・・・ 6
Financial Highlights・ ・・・・・・・・・・・・・・・・・・・・・・・・・ 7
History of the KOKUYO Group・ ・・・・・・・・・・・・・・ 8Highlights of 2015・ ・・・・・・・・・・・・・・・・・・・・・・・・・ 10
Key Non-financial Data・・・・・・・・・・・・・・・・・・・・・・ 13
CSR Management・・・・・・・・・・・・・・・・・・・・・・・・・・・ 14
With Customers・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・ 20With Employees・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・ 34
With Business Partners・・・・・・・・・・・・・・・・・・・・・・ 51
With Stakeholders・ ・・・・・・・・・・・・・・・・・・・・・・・・・ 60
With Local Communities・ ・・・・・・・・・・・・・・・・・・・ 62With the Global Environment・ ・・・・・・・・・・・・・・ 78
ISO26000 Table・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・ 98
Awards and other recognition received fromoutside the KOKUYO Group・ ・・・・・・・・・・・・・ 100

Reporting Period
January 1, 2015 to December 31, 2015

Scope of the Report
The KOKUYO Group refers to KOKUYO Co., Ltd., and its domestic andoverseas Group companies, comprising 20 consolidated subsidiaries,
certain activities involve other subsidiaries and affiliates.

Reference Guidelines
・ISO26000
・Japanese Ministry of the Environment Environmental Reporting
Guidelines 2012
・GRI (Global Reporting Initiative) Sustainability Reporting Guidelines
4th Edition

KOKUYO Group CSR Report 20163

Top Message

By seriously accepting andconfronting the difficult
challenges that face customers
and communities, we aim to help
realize a sustainable society.
Hidekuni Kuroda
Representative Director of theBoard, President and CEO
KOKUYO Co., Ltd.

Introduction of a new medium-term management
plan under the new management system:『Value Transformation 2018』
In March 2015, KOKUYO rejuvenated its management

system and in October, KOKUYO Co. Ltd merged with two

key operating companies to go beyond the framework of
our existing business and to strive to create value that ourclients truly desire.

To take our achievements to another level, our mission

statement for the future is as follows:“KOKUYO aims to bea Life & Work Style Company that enriches society by providing value through our products and services to enhancecustomers’creativity and to deliver improvements to their
Quality of Life so that they work, learn and live better.”

4

ability”to enable medium to long term sustainable growth.
The goals of the current medium term management plan

are: (1)“The acquisition of funds for growth”: to achieve
an operating profit from domestic businesses of at least\15 billion, (2)”The implementation of high efficiency management”: to achieve an operating margin of at least 5%,(3)“Self-sustainability overseas”: to achieve profit stability

in our overseas businesses. In fiscal year 2018, we aim toachieve at least \310 billion sales, gross margin of at least

35%, operating margin of at least 5% and an operating
margin of at least \15.5 billion.

Solving issues faced by society
In working toward becoming“the corporation we want

To this end, we have adopted a new 3-year basic

to be in the future,”we would like to proactively press for-creation - Value Transformation 2018”. There will be an

satisfying the expectations of various stakeholders — thevalue creation and the“development of sustainable profit-

the employees, and the ecological environment.

management policy that is“Self-reform focusing on value

ward with operations with corporate social responsibility,“operating model reform”that realizes customer-oriented

customers, the shareholders, the clients, the community,

KOKUYO Group CSR Report 2016

The corporation we want
to be in the future
KOKUYO aims to be a Life & Work
Style Company useful to society by"improving Quality of Life" of persons
by their improved working/learning/living through our products andservices which provide the value of
improving clients' creativity

Sales

3.6％
(billion JPY)
3,042

Operating margin

3.9％
3,100

Working to become it
What we seek to accomplish with our 3-year
medium-term business plan"Value Transformation 2018"
Capital for
growthHighly eﬃcient
operation
nternational
self-suﬃciency

Over JPY 15 billion domestic
operating proﬁt

5% or greater company-wide
operating margin

Stabilization of proﬁt of international
operations

5％～

FY starting 2018

3,100 ～

Sales

over JPY

310 billion

Sales management cost rate

2015

2016

2017

2018

In doing so, we believe that the elements transparency,

fairness, and independence are integral to the form andoperation of management. We will work to keep thesethriving by fortifying our corporate governance system.

under

30％

Gross margin

over

35％

Operating proﬁtover JPY

15.5 billion(operating margin over 5%)

To the stakeholders
KOKUYO has built its history of a hundred-and-some

We will also continue our initiatives toward solving issues

years by earnestly facing issues of customers as theyronment and respect for human rights.

one. This attitude remains the same today, though it is said

faced by society, such as protection of the ecological envi-changed with the times and finding the solution for eachto be uncertain times as societal and commercial issues
are entangled with increased complexity.

Under a new management system, we will do our ut-

most to provide value which contributes to the realizationof a sustainable society by placing importance on facing

issues of both the customer and society while being flexible in the forms solutions may take.

Representative Director of the Board;
President and CEO
KOKUYO Co., Ltd.

KOKUYO Group CSR Report 20165

Introduction of the KOKUYO Group

Stationery

Stationery Business
Being of Assistance to those who Learn andWork
KOKUYO began as a supplier of account ledgers and we continue tothis day to manufacture and sell a variety of paper products, as well as
stationery and PC-related products designed to support our customers intheir pursuit of knowledge in office and school environments.

Furniture

Furniture Business
Taking on the Challenge for New Work Styles
KOKUYO engages in the manufacture and sales of furniture for offices,public areas, and retail spaces and provides a variety of spatial planningfor 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 andtotal project support to create spatial value for customers.

Mail-order Business / Retailing

Mail-Order & Retail Business
Delivering Excitement Beyond Happiness
Aiming to serve the needs of customers by taking their perspective,
KOKUYO engages in the mail-order business of office supplies forcorporations and individuals with the KAUNET mail and online orderbusiness at the core.

Adding Quality and Excitement to Life
KOKUYO operates ACTUS, an interior furnishings shop that carries
unique domestic and imported furniture, textiles and assorted small
articles that revolve around the theme of“gracious living”, and SLOWHOUSE, a lifestyle shop based on the concept of“Made with love”thatcarries truly luscious items for use in daily life.

6

KOKUYO Group CSR Report 2016

Key Financial Data
Key Financial Data
(Consolidated)

December

December

December

December

DecemberSales (Millions of yen)

260,004

275,821288,083

293,054304,276

4,072

4,852

6,426

7,598

11,102

1.6

1.8

2.2

2.6

3.6

Ordinary Income (Millions of yen)

4,098

6,142

8,276

9,643

11,880Net Income (Millions of yen)

-5,460

2,428

4,804

5,065

6,312

Total Assets (Millions of yen)

252,794

258,461

270,738

273,772

286,313Net Assets (Millions of yen)

149,581

153,069

165,656

170,352

180,793

Earnings per Share (yen)-46.16

20.53

40.62

42.83

53.37

Dividend per Share (yen)

15.0

15.0

15.0

15.0

17.5

Return on Equity (ROE) (%)

-3.6

1.6

3.1

3.1

3.6

Equity Ratio (%)

58.3

58.3

60.4

61.5

62.5

2011

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

2012

2013

2014

2015

Other Financial Index

Sales and Operating Income Ratio

Sales Composition (Consolidated)
3.6%(Millions of yen)

310,000

3.5

2.6%

300,000

2.2%

290,000
280,000
270,000
260,000（%）

1.6%
260,004

1.8%
275,821288,083

293,0543.0

304,276

0.5
0

2011
Sales

December2012

December

2013

December

2014

December(Millions of yen)

6,000

1.6%

4,000
2,000
0

3.1%

3.6%

（%）

(Millions of yen)

4.0

290,000

3.0
2.0
1.0

6,312

2,428
-3.6%

-1.0

-3.0
December

2011
Net Income

December2012

December

2013

Return on Equity (ROE)

December

2014

December

2015

-4.0

286,313280,000
270,000
260,000

58.3%

252,79458.3%
258,46160.4%
270,738

61.5%

62.5%

65.0
60.0

273,77255.0

250,000
240,000

（%）

70.0

0

-2.0

-6,000-8,00033.1%

Total Assets and Equity Ratio

5,065-5,460-2,000-4,0004,804

million yen

Retail andmail-order business* Sales composition is calculated based on the sales to customers.

Net Income and Return on Equity (ROE)
3.1%

304,276

2015

Operating Income on Sales

8,000

Sales in FY 2015

1.5

240,000
December

26.2%

2.0

250,000

40.7%

Stationery business

2.5

1.0

Furniture business

50.0

December

2011
Total Assets

December2012

December

2013

December

2014

December

45.0

2015

Equity Ratio

KOKUYO Group CSR Report 2016

7

History of the KOKUYO Group
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 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.

Sales of Gavatte Files
begin.

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

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.

1988

1984

1995

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

8

1974

KOKUYO Group CSR Report 2016

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.

Sales of Soft Ring®
notebooks 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.

2011

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

2015

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

2003

2002

Sales of SIMPLEX
begin.

2006

2005

KOKUYO DesignAward is launched.

2013

2007

The Yui-no-Mori Projectis commenced.

KOKUYO K Heart isestablished.

2008

2007

Sales of EDIA
systems begin.
Sales of nursing
carts begin.

2012

Shanghai plant for
producing notebooks
is completed.

2015

Sales of Campus
Desks begin.

2001 Sales of WORKGATE
workstations begin.

1998

2003

Furniture-related
business

Sales of INSPINE
chairs begin.

2010

Sales of C Square units begin.

2013

Sales of Campus BLOCK
and Campus BOARD
begin.

2000
2005

Mail-order andretail business

The KiSPA catalog
is inaugurated.

The Eco-Batsu mark iscommenced.

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

Sales of AGATA
chairs begin.

Kaucore islaunched.

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

2013

HARMONii work
stations unveiled at
Orgatec.

2010

2015

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.

Nagoya Live Office
Link Tube is opened.

2008

2012

2013

2014

2015
KOKUYO Group CSR Report 20169

Highlights of 2015
January

Furniture Business

Establishment of Nagoya Live Office
Nagoya Live Office“Link Tube”, based on the concepts of“Link”(Cooperation) and“Tube”(Connection), recommends the creation of offices in which cooperation
brings about growth.
Overseas

Camlin selected as“Asia’s Most Promising Brands”
Camlin was awarded the“Asia's Most Promising Brands 2014”(held by WCRC

(World Consulting and Research Corporation)) in the stationery category forachieving rapid growth.

February

Stationery Business

Limited release of 5-book pack of cake notebooks for Campus Notebooks
40th anniversary
2015 was marked as the“HAPPY Campus YEAR!”to celebrate the 40th anniversaryof the launch of Campus Notebooks. Products that would bring smiles to customers
were released and promoted, one of which was the release of a limited number of
5-book pack of cake notebooks.

Stationery Business

Launch of Soft Ring® Notebook (dotted ruled lines)
Soft Ring® Notebook (dotted ruled lines) was released. The notebook is bound by“Soft Rings”made from our original resin that does not interfere with writing.
CSR

ReEDEN Project won the grand prize of Kaueco Grand Prix
ReEDEN, the stationery products created using reeds, was awarded the grandprize of Kaueco Grand Prix (held by General Incorporated Association Shiga Green
Purchasing Network).
* The Kaueco Grand Prix aims to promote eco products made in Shiga Pref.

Company

Mail-Order & Retail Business

March

Overseas

Completion of New Building at Headquarters
The new building south of the headquarters was completed. Designed with theenvironment and BCP (Business Continuity Planning) in mind, KOKUYO aims toincrease value creation for customers by reinvigorating communication.

New release of premium magazine, Kaucore
Kaucore Premium Magazine, a magazine which collates original products developedby Kaunet that have been specially selected from the Kaucore Premium range, isreleased.

China’s Furniture Business commended by Shanghai
The Chinese subsidiary, KOKUYO Design Consultants (Shanghai) Co., Ltd. received
the“Safe and secure construction companies”commendation from the Shanghai
Chang Ning District Government for its safe work practices and significant
contribution to the economic development of the region.

April

Furniture Business

Stationery Business

May

10

Stationery Business

KOKUYO Group CSR Report 2016

Exhibited in the Milano Salone
Prototypes of the Amenity Chair which was designed in collaboration with Design
Studio nendo were showcased in Milano Salone, an international furniture trade fairheld in Milan, Italy.

KOKUYO EXPO was held
A pop-up stationery shop to allow people to touch and experience firsthand
KOKUYO’s latest stationery and products has been held annually since 2013 in
Osaka. 2015 was the first year KOKUYO EXPO was held in Tokyo.

Setting up of News and information site Inspi
The news and information site“inspi”for stationery, assorted items and furniture
aimed at providing inspiration and new discoveries in work, learning and life was
set up. In addition to latest product information, it also introduces convenient usage
ideas and product functions that users may not know about.

June

Stationery Business10th Anniversary of Dotliner: Release of Glue Tape“Dotliner Zoo”
The Dotliner series have been well received since its release in 2005 as the tapeadheres in the form of dots and is easy to apply. To mark its 10th anniversary, limited
number of products with animal motifs were released.

Furniture Business

Release of store furniture“Smart Pack Stand”
Targeted at retailers with limited spaces, 2 types of compact stands,“Smart Pack
Stand (for floor)”and“Smart Pack Stand (for tabletops)”, which can be easily
assembled piece by piece and installed solidly were released.

Furniture Business

Launch of Campus BLOCK and Campus BOARD
Campus BLOCK and Campus BOARD were launched as furniture that can be used
flexibility during lessons that take place in multifunctional spaces in educational
facilities, especially in elementary schools.

CSR

Campus Art Award was heldIR

IR for individual investors“Company information session: Secrets of Campus
Notebooks”was held

Campus Art Award, a painting competition for junior high and high school students,
was held. The contest theme was“My Sweet Home Town – a great Favorite ofMine”. The Grand Prix work was made into the cover of a Campus notebook.

In order to secure loyal stockholders, the IR activity titled“Company information
session: Secrets of Campus Notebooks”aimed at individual investors was held.

July

Stationery Business

Furniture BusinessComprehensive Partnership agreement signed with Shiga Prefecture
To promote the Shiga and Lake Biwa brand, regenerate the area and improve
services to prefectural residents, KOKUYO signed a comprehensive partnershipagreement with Shiga Prefecture. Our aim is to further strengthen the partnershipwith Shiga Prefecture through this agreement and to achieve sustainable growth andeconomic development for the region.

Participated in International Modern Hospital Show 2015
At the International Modern Hospital Show, KOKUYO held an exhibition based on
the concept of“KOKUYO- designing progress and comfort”and proposed solutions
in response to the issues raised from medical site surveys.

Received an award

Soft Ring® Notebook (dotted ruled lines) won the 24th Japanese Stationeryof the Year award for excellence in the Design category
Soft Ring® Notebook (dotted ruled lines) won the award for Excellence in the design
category in the 24th Stationery of the Year award (held by Reed Exhibitions Japan Ltd).
*Japanese stationery of the year award is an award conferred to stationery that have superior
functionality and design.

AugustCSR

KOKUYO Product Shiga received honorable mention for the 2014 company
award for the development of environmentally aware people
Staff volunteer activities to conserve reeds in Lake Biwa has spread across the region
and developed into learning societies and fishing contests to remove non-native
fishes. This progression led to KOKUYO receiving an honorable mention at the“2014company award for developing environmentally aware people”ceremony (held by the
Ministry of Environment and Environmental Consortium for Leadership Development).

Received an award

2 products won the Kids Design Award

School scissors Airofit Saxa Kids and furniture for the multipurpose spaces in educational
facilities Campus BLOCK received the 9th Kids Design Award.
*Kids Design Award is conferred to designs that contribute to children’s safety and ease, designs thatencourage creativity and lead the way into the future and designs that make the raising of children easier.

Mail-Order & Retail Business

Renewal of Kaunet Website

Kaunet renewed its website using its unique indicators based on customers’
product selection trends. As a result, Kaunet was able to meet customers’needs by
reducing order time.
KOKUYO Group CSR Report 201611

Highlights of 2015
September

Mail-Order & Retail Business

Actus Lifestyle Store“SLOW HOUSE”is opened in Futakotamagawa
SLOW HOUSE opened its 2nd store in Tokyo at 2F Tamagawa Takashimaya S.C
Maronie Court.

*SLOW HOUSE, with its theme being gracious living, stocks furniture, assorted small articles and apparelinfluenced by Northern European tastes.

Received an award

6 Products received the 2015 Good Design Award
6 products were awarded the“2015 Good Design Award”(held by the Japan

Institute for Design Promotion)（Workstation Series SAIBI, Meeting Chair Piega,
Furniture for the multipurposes spaces in educational facilities Campus BLOCK, Soft
Ring® Notebook (dotted ruled lines), Cutter Knife <C3>, Field Notebooks (Level

Book, Transit Book, Sketch Book) .

Stationery Business

OctoberNovemberIR2016 version of Monthly Pocket Diary Pat-mi was released
The 2016 version of Pat-mi was released. It is the second pocket diary produced by
Sakuma Hideaki that simultaneously resolves the two main complaints pocket diaryusers have, which are“troublesome to flip the pages between the monthly scheduleand weekly schedule”and“annual pocket diaries are thick and heavy”.

Merger with Consolidated Subsidiaries
On October 1, 2015, KOKUYO Co., Ltd., KOKUYO S&T Co., Ltd., and KOKUYOFurniture Co., Ltd. were merged, with KOKUYO Co., Ltd. as the surviving company. By
integrating the group and leveraging our collective strength, we intend to resolve theincreasingly complicated and diverse customer issues and deliver maximum value tocustomers.

Mail-Order & Retail Business

Kaunet: 15th anniversary of launch

Stationery Business

Launch of“The Workbook of Perfume”– Create your very own fragrance

Mail-Order & Retail Business

Beginning as an office supplies mail-order company that catered to small enterprisesin October 2000, Kaunet celebrated its 15th year of launch.

The authentic perfumer experience kit overseen by Shiseido“The Workbook of
Perfume”was launched. This kit enables one to mix 7 types of fragrance pastes tocreate a perfume one desires.

Opening of the 6th ACTUS Osaka Area Shop ACTUS EXPOCITY
The concept for the EXPOCITY shop, which opened in the international expo
arena, is“STYLE PLATFORM”. This Kansai Area interior furnishings shop provides
suggestions for a variety of seasons and styles, and information on interior design.

CSR

December

Furniture Business

Furniture Business

12

KOKUYO Group CSR Report 2016

Winning designs for“2015 KOKUYO Design Award”decided
The“2015 KOKUYO Design Award”with the contest theme“Beautiful Lifestyle”washeld. A total of four designs were chosen as the winning designs, including the GrandPrix winner“Word Block”.

Launch of Office Chair Doura
Doura, an office chair with new features for pelvic support, was launched. This chair
was developed with a focus on the changes to users’seating posture followingchanges to the IT environment they work in.

Launch of Office Chair Mitra
Mitra, an office chair that will fit nicely in all offices was launched. This mesh chair
incorporates all the posture support functions that KOKUYO considers necessary
and is designed to provide superior comfort for the user regardless of class.

Customers

Key NonFinancial
Data

Annual sales of Campus Notebook:

100

Over

(As of December 31, 2015)

million copies

Stack 100
million Campus
notebooks andyou will get…

2015 marked the 40th anniversaryof Campus Notebook’s launch.
Being top in the industry withannual sales of more than 100
million, we have sold morethan 2.7 billion copies since thenotebooks were released.

100Mt. Fujis
Customers
Number of live offices in Japan

２５

Live offices are the new generation of KOKUYO’s
offices created to research and introduce the secretsof office space. KOKUYO employees research thelatest working methods while actually working in thelive offices

Local Communities

Employees

Number of Campus Art Award
applications

Employment rate of Disabled
persons

1,004

works

Campus Art Award is a painting
competition that started in 2015.

The first contest theme“My Sweet
Home Town- a great Favorite of

office factory. Today, we
aim to be a new model forthe employment of disabled
persons. At our special

their attention to their local areas,
to notice their attractiveness andsubsidiary companies (KOKUYO K Heart and KOKUYOHeartland), we offer various roles and approaches to work

to share that with others.

to accommodate each employee’s disability.

Local Communities

Number of Customer Feedback

Over

Corporate Governance

Number of visitors to ournotebook factory

110,000 2,747
comments

Our customer service
office received morethan 110,000 commentsfrom customers in 2015.
We strive to share thesecomments with all Group
employees as they provide valuable insights to help
us improve our services and products.

％

In 1940, we began employing
deaf people at our headMine”created opportunities forthe youth of Japan’s future to turn

Customers

2.12

peopleKOKUYO Product Shiga Co
Ltd cherishes its relationships
with local communities
while manufacturing paper
products. Since May 2014,
the company started factory
tours to provide opportunities to visit production
facilities and environmental facilities and to experience
KOKUYO’s passion for quality.

Global Environment

Percentage of outside 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 the transparency and fairness of its
management at all times.

Customers

Amount of CO2 absorbed
by Yui no Mori

Kaunet's

6,717

tons

Based in Shimanto-cho, Kochi Prefecture, andundertaken with the aim of regenerating a planted
forest and revitalizing the community that seeks toprotect this forest, the KOKUYO Shimanto Yui-no-Mori
Project marked its 10th year of operation in 2015. This
project encompasses approximately 5,500 hectares ofland, and the aggregate area of this forest subjected
to tree thinning has been increased to 1,300 hectares,
such that the amount of carbon dioxide absorbed bythis forest has reached 6,717 tons

ShikokuYui no Mori

15thanniversary

Kaunet is celebrating its 15th year since inaugurationin 2015. Offering at least 80,000 items needed by
offices, Kaunet also develops original products so
as to provide solutions to customers’issues andrespond to various needs.

Kochi
Prefecture

KOKUYO Group CSR Report 2016

13

CSR Management
Working towards realizing a sustainable
society, the KOKUYO Group is actively
promoting CSR management to meet the
expectations of various stakeholders
including customers, shareholders, partnercompanies and local communities.

KOKUYO's View on CSR
Basic Concepts ・・・・・・・・・・・・・・・ P15
KOKUYO's CSR Charter ・・・・・・・・・・ P17
Kokuyo Group Code of Conduct ・・・・ P18

Employee Involvement in CSR
Anniversary Month of ・・・・・・・・・・・ P19
KOKUYO's Founding

CSR Management

Basic Concepts
The KOKUYO Group began when founder Zentaro Kuroda opened a small shop selling ledger covers made with Japanese
paper in 1905. The founder moved from his village to Osaka with the aspiration of making his business the pride of his
hometown Etchu (present-day Toyoma Prefecture). Through the brand Kokuyo (国誉), which is the current company name
KOKUYO (コクヨ), his aspiration has been passed down to the KOKUYO group and captured in its business. In 2004, we
enacted the KOKUYO Group CSR Charter based on our corporate philosophy to establish better relations with various
stakeholders as a good corporate citizen (which was partially revised in 2012). Our basic policy for ensuring the ongoinggrowth of society and the KOKUYO Group has been clarified in line with five key themes: our customers, regional
communities, environmental conservation, corporate activities, and respect for human rights.
* Relevant information："KOKUYO Group CSR Charter"

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 suchorgans tasked with dealing with important concerns. With special sections leading the way, our entire group pursues theseconcerns in a coordinated fashion. We will continue to strive to achieve sustained growth for society and the Group while
maintaining a state of harmony with stakeholders through CSR information disclosure and dialogue.

Corporate 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
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.

15

KOKUYO Group CSR Report 2016

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

Akihiro Kuroda

Representative Director of the Board, President and CEO

Hidekuni
KurodaDirector of the Board, Vice Chairman

Yasuhiro
KurodaDirector of the Board

TakuyaMorikawa

Director of the Board

Nobuyuki
Miyagaki

Independent Director of the Board

Hisao Sakuta

Independent Director of the Board

HiroshiHamadaIndependent Director of the Board

Taketsugu
Fujiwara

Audit & Supervisory Board Members
Standing Audit & Supervisory Board Member

Yoichi Kotani

Standing Audit & Supervisory Board Member

Tsutomu
Sumitani

Outside Audit & Supervisory Board Member

Yutaka Mizuno

Outside Audit & Supervisory Board Member

Morihiro
MurataManaging Officers
President and CEO

Hidekuni
KurodaSenior Managing Officer International Business Division

TakuyaMorikawa

Senior Managing Officer Corporate Administrations

Nobuyuki
MiyagakiManaging Officer Corporate Planning Office

Naotaka
Umeda

Managing Officer Furniture Business Division

Kozo
SakagamiManaging Officer"Kaunet" Business Division(President & CEO, Kaunet Co.,Ltd.)Managing Officer Stationery Business Division

Kenichiro
Takahashi
Takuji Yaso

16

KOKUYO Group CSR Report 2016

CSR Management

KOKUYO's CSR Charter
While remaining profitable and honest in its business practices, KOKUYO conducts business that is necessary for society.
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.

17

KOKUYO Group CSR Report 2016

CSR Management

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.

18

KOKUYO Group CSR Report 2016

CSR Management

As KOKUYO was founded on October 2nd, every October we provide each employee with an opportunity to understandmore about the significance of its founding spirit for the entire month. During the period, the employees are encouraged toreflect on their attitudes and actions to practice and embody the founding spirit into day-to-day tasks.

Discourse by the Chairperson
In the 2015 anniversary month of KOKUYO's founding, the chairperson gave a discourse on "learning from thepredecessors' efforts and sharing the lessons learnt that can be used in the jobs today". After learning about the innovation
process of predecessors, participants held group discussions to exchange opinions on "which innovations left an
impression and why?", "what are the differences between us and our predecessors?" etc. Subsequently, each participant
had to write on an A3 paper what he/she would personally like to put into practice from the next day based on the things
he/she realized from listening to other participants' thoughts and opinions. These were then attached to a whiteboard andsummarized by a group representative. Participants then spoke of resolutions such as "I will think of customers amidvarious cost, design and function restrictions" and "I look forward to the challenge of dealing with difficult issues, and I will
investigate them thoroughly so as to innovate". Furthermore, participants managed to gain awareness of things and actions
they were lacking, such as the following: "I am afraid to fail and thus I do not challenge myself" and "I should be able to do
my duties more efficiently".

Chairman Kuroda and employees intheir 11th year

A photo of the group discussion

Learning from predecessors

19

KOKUYO Group CSR Report 2016

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

Provision of peace of mind andsafety to customers
Views Regarding Quality Assurance・・ P21
at KOKUYO Stationery
Views regarding Quality Assurance ・・ P22
at KOKUYO Furniture

Provision of peace of mind and ・・・・ P24
safety to customers Quality
according to the considerationof Kaunet
Activities for Creating a Menu of ・・・ P26
Countermeasaures for Disasters

Reﬂections on Customers'comments
Customer Support and Services ・・・・ P28
A System for Utilizing Feedback ・・・・ P29
from Customers
Dialogues with our Customers ・・・・・ P30

With Customers

In order to deliver quality that our customers can trust, we have taken steps to systematically build, operate and improve on
our systems for quality assurance.

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. In addition, by introducing product risk evaluation methods andimplementing risk countermeasures, we strive to enable our customers to use our
products with confidence.
2) Establishment of the inspection system on a global basis

Introduction of robots in quality
testing

KOKUYO has established an inspection skill evaluation method with global standards, which evaluates the skill level ofinspectors around the world and sets up a system for education and guidance with the aim of maintaining a certain level ofinspection skills. In addition, we provide necessary paraphernalia and manuals for inspection globally to maintain the levelof inspection at a certain level, thereby increasing the accuracy of discovering faulty products during inspection to preventthe outflow of faulty products.
3) Increasing the accuracy and speed of handling complaints
In addition to safety, people around the world seek a sense of reassurance; moreover, anybody 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 ofdetermination, 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.

21

KOKUYO Group CSR Report 2016

With Customers

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 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 for KOKUYOFURNITURE 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.

22

KOKUYO Group CSR Report 2016

KOKUYO Logitem, the company responsible for the Group's distributionfunctions, held the National Driver Competition with the aim of improving
customer satisfaction during furniture delivery. Starting as a contest fordelivery drivers and employees of partner companies to polish their assembly
skills and customer service in 2010, awareness of the competition has been
increasing every year. The main themes for the 2015 competition are "fullparticipation" and "raising the standard". The themes are applied from thequalifying rounds at each partner company to provide opportunities for more

The participants of thecompetition assemble products

delivery employees to improve their skills. The National Finals were held on
September 26 and contested by a total of 3 teams, two of which won the qualifying rounds, regional heat andthe east and west block finals, and one that entered through special recommendations. They competed against
each other on delivery quality through the 2 categories - "mock delivery" and "product assembly inspection".

23

KOKUYO Group CSR Report 2016

With Customers

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.

24

KOKUYO Group CSR Report 2016

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.

25

Hiroshi Sugayama
Quality Control Dept., Kaunet

KOKUYO Group CSR Report 2016

With Customers

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 a wide range of verification experiments.
Based on the large amount of data obtained from the experiments, we determined the relationshipbetween seismic waves and earthquake preparedness rationally to devise objective evaluation criteria
of earthquake-resistant furniture. We also propose a menu of countermeasures against earthquakes
for offices to cater to the level and cost of countermeasures that customers' desire. Our evaluation
criteria include not only considerations of whether there will be damage at different levels of seismic
activities but also the ease of reconstruction from the perspectives of BCP (business continuity
planning). For customers wanting high levels of earthquake preparedness, we will do a proper
preliminary survey of the customer's office and adjust our recommendations according to the materials of floors and walls
and the building structure.

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 forelevator

Mobile rescue equipment set

Toppling-resistant belt for paper
shredder3) Raising the Level of Awareness
KOKUYO is working aggressively to raise awareness of the need to be prepared for disasters. These include holding
seminars around Japan on the theme of earthquake countermeasures for offices. Subjects covered in these seminars
included the difficulties faced by management immediately after the Earthquake (using KOKUYO Tohoku Sales Co., Ltd., as
an example), the continuous development of the selection-distribution-management-renewal cycle as companies move from26

KOKUYO Group CSR Report 2016

the "stockpiling" stage to the "continue to stockpile" stage 5 years after the earthquake
as a measure to stockpile emergency supplies from the perspective of business
continuity planning (BCP), and the creation of offices that can withstand strong
earthquakes (KOKUYO Furniture).

Seminars on disastercountermeasures for corporation

27

KOKUYO Group CSR Report 2016

With Customers

KOKUYO strive to respond to customers' inquiries with sincerity. We also share feedback from customers across thecompany as valuable opinions to help us offer better products and services.

To gain loyal customers
In order to improve customer satisfaction, we offer a group-wide customer support center to respond to inquiries,
suggestions and requests sent from customers. At the customer support center, our representatives receive calls from
customers in the first instance and respond to them empathetically. To do so, we hold study sessions to improve productknowledge and make efforts to create better database of product information with the aim of serving customers withaccuracy, readiness, kindness and politeness. In addition, our website introduces frequently asked questions and answers,
as well as improvements made with the help of customers.
* Relevant information "KOKUYO Customer Support Centre"

On-Site Experience-Based Training That Allows Employees to Listen to the Voice of Customers
and Apply to Day-to-Day Work
The KOKUYO Group has enhanced its employee training by providing opportunities for
employees who do not normally have contact with customers to experience the actual
worksite of the customer service center and hear opinions directly from customers. In
addition, similar training is offered to new employees in May so that they gainawareness through asking and knowing customers' requests and utilizing theseexperiences in the day-to-day operations in the future. The training provides employeeswith good communication techniques 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.

New customer service personnel
work in tandem with experienced
operators to respond to customers.

Renewal of the "Contact us" page on KOKUYO's website
The "Contact us" page is viewed by many customers daily, some of whom are looking for the inquiry counter, some ofwhom have questions regarding products. At the end of last year, the "Contact us" page underwent an extensive renewal. In
particular, to simplify the search for specific FAQs, queries are sorted not only by query type but also by products.
Furthermore, video clips published for the "manuals room" on the "KOKUYO channel" are used as easy-to-understandanswers for the FAQ. Going forward, we strive to continuously improve the page for our customers' ease of use.

Simplification of duplicate key creation procedures for cabinets
At the customer support center, we created a duplicate key for cabinets. In 2015, the procedures were changed forcustomers who do not deal with the sales department. Previously, customers had to download a specific form from thewebsite, fill in the required items and return it by fax. The customer support representative that received the hand-written fax
would then contact the customer by phone to confirm the numbers to prevent the product number and key numbers frombeing read wrongly, As a result, customers had to go through a lot of time and trouble to do so. We reviewed the flow andnow send the specific form via email to customers so that their requests can be handled more accurately and rapidly. After
this change, the number of requests has increased to 114% compared to the previous year. At the customer support center,
we strive to constantly improve our methods and procedures to enable our customers to contact us easily.

28

KOKUYO Group CSR Report 2016

With Customers

The KOKUYO Group is constantly working to share live feedback from customers with group employees so as 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 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 weekly on VoiceClip. Since 2012, we have been working to improvevisualization 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 thatGroup employees can access the database to freely navigate through previous feedback as needed.

The Hakadori Protective Film enables the tack index to last and remain
pristine by pasting the film over the tack index, especially for tack index on
documents that need to be stored long term and for documents that are read
often. The protective films have always been sold with the tack index as a set
as part of the product lineup. However, comments such as "Every time I'm in a
fix as I run out of the protective films but am left with the tack.", "Do you sell just the protective films?" havebeen provided by a lot of customers who use the protective films. Thus in 2015, we released the Hakadori
Protective film for Tack Index (Strong adhesiveness) as an individual product. As the product is just atransparent seal, it can serve a variety of functions such as the "Hakadori Cut" where customers can paste thefilm without touching the adhesive surface and as a position guide to enable the film to be attached exactly on
the index tack.

29

KOKUYO Group CSR Report 2016

With Customers

We strive to provide new products and services for people who learn and work. In order to help customers understand such
KOKUYO activities, we have actively developed our communication with our customers through various events and live
offices that opened in different regions.

25,000 Visitors at KOKUYO Haku 2015
KOKUYO Haku, the promotional stationery shop, was held from April 3 to 5 in Basement 1 of the Tokyo City Eye at JP
Tower in Tokyo Marunouchi. KOKUYO Haku means KOKUYO Exhibition in Japanese. The shop exhibited and sold latest
stationery and limited edition products and there was a corner for customers to see, touch and experience popularstationery. It was an event to help customers discover the new appeal of KOKUYO through the extensive planning which
was characteristic of KOKUYO. The sales of limited edition products to mark the 40th anniversary of Campus Notebook's
launch, and the display of contents focused on the collaboration with Shiga Prefecture, where the mother factory of Campus
Notebook is, attracted 25,000 visitors to the event in 2015, the third year it was held.

Long queue before opening on the first day

A photo of the event

Cake-cutting ceremony for Campus Notebook's 40th anniversary
To celebrate Campus Notebook's 40th anniversary, we invited Shiga Prefecture's
Governor, Mr. Mikazuki, and the mascot Caffy to the cake cutting ceremony. A cake wasspecially made to model after the limited edition release of the cake-designed Campus
Notebook, which has strawberry and other motifs printed on the cover and a cake on theside when the book is closed.

Specially made cake modelled after
the Campus notebook

Plans for collaboration with Shiga Prefecture
At the event, we introduced KOKUYO Product Shiga's efforts to contribute to the local
community and environment where Campus Notebook's mother factory is, as well assold Shiga Prefecture's representative local specialties such as raw cheesecake, carpsushi and red konnyaku. In addition, we stocked the Tobidashi Boy capsule toycollection (capsule toys where Tobita-kun goods can be obtained). Tobita-kun is acharacter that appears in the form of human-shaped signboards used by Shiga
Prefecture to warn drivers of children and elderly people dashing out in order to keep
the local children safe. KOKUYO Product Shiga sells stationery with the Tobita-kun
motifs.

KOKUYO Product Shia's original
product, ReEDEN

Workshop
At KOKUYO Haku, a usual event is the "DecoCam (Decorate a Campus Notebook)" workshop where participants
personalize Campus notebooks with easy to decorate cover page designs using masking tapes and markers. Apart from30

KOKUYO Group CSR Report 2016

that, there was an "original field notebook workshop" and a "Hemp string classroom"
where participants made simple household goods such as mini bags by weaving thehemp strings and bags by knitting the hemp strings into a net.

Participants making original fieldnotebooks at the workshop

Release of Limited Edition ProductsLong Campus:
In the printing process, 2 notebooks
are printed on the same sheet andcut subsequently. This notebook is
an uncut version.

Long Mirikeshi:
the long version of the Mirikeshi(eraser) that enables a line in thenotebook to be erased. It is 3.9
times as long as the Mirikeshi.

Gold and Silver field notebooks:
the best-selling pocketbook-stylefield notebook has a cover designthat has not changed since its
launch in 1959. It is available in goldand silver as a limited editedcolored notebook.

Campus 40th anniversary event in Hong Kong and Exhibition at Book Fair
Since 2014, the stationery business is formulating strategies and undergoing businessvalidation so as to prioritize its approach towards customers in Korea, Taiwan, Australiaand Hong Kong. In summer 2015, we actively held promotions in Hong Kong to
introduce KOKUYO to customers. For approximately a month from July 2, we held theCampus 40th Anniversary Event. We collaborated with Hong Kong's most discerning
retailer chain LOG-ON, and used the event space in their shop to introduce the Campus
brand, sell Campus products and hold a DecoCam (Decorate a Campus Notebook)workshop. Listed in a total of 14 media, including 4 magazines and websites of major
local media, we manage to garner a lot of attention. In addition, KOKUYO set up abooth in the Hong Kong Book Fair 2015. This book fair, said to be a summer feature in
Hong Kong, has the ability to attract a colossal number of customers, with more than 1

DecoCam Workshop whereparticipants decorate Campus
notebooks to create original
Campus notebooks

million visitors in a city of 7 million people. During the exhibition period, KOKUYO's
booth flourished, with more than 6,000 customers experiencing and purchasing our
products.

KOKUYO's booth bustling withcustomers

WORKSIGHT LAB Executive Seminar was held
The WORKSIGHT LAB Executive Seminar was held on June 9 in Shibuya Hikarie with a focus on customers of the furniturebusiness. 92 people from the General Affairs, Architecture, Design and Management divisions were invited. The
WORKSIGHT LAB is a research institution to pursue next-generation way of working and learning, to provide solutions and
31

KOKUYO Group CSR Report 2016

practical knowledge for key persons who want to bring change in institutions that create
value. During 3 years since it was set up, the Executive Seminar was held for the 6thtime. This seminar was based on the office concept of making all employees playleading roles, external speakers were invited to talk about organizations and working
methods titled "the work style where all employees play leading roles and showcase
their individuality". From the survey after the seminar, we found that around 70% ofparticipants knew of WORKSIGHT*, and there was a high level of interest in
WORKSIGHT which has a unique coverage of advanced offices domestically andoverseas. Customers were very satisfied on the whole, and the event was very well

WORKSIGHT's editor in chief
introducing WORKSIGHT

received by many.
* WORKSIGHT
is a media with strategic coverage of advance offices both within and outside of Japan that introduces
the working methods of growing companies worldwide, regardless of country, industry and business.
Not only does it showcase office space, it also focuses on efforts to change the soft working
environment such as behavior, practices and processes, etc.
A photo of the Seminar2016 KOKUYO new products fair
KOKUYO Fair is held not only to display KOKUYO's products and solutions, but also toshare its background in planning and development, to showcase its creative efforts andto give customers a feel of KOKUYO's hospitality. Between December 7 and 10, 2015,
the 2016 KOKUYO New Products Fair was held in its Tokyo Showroom for visitors toexperience the new products, with furniture taking center stage, and Shinagawa Live
Office. The theme for the fair was "Be- a workplace where personality shines".
Combined with introductions of new products, we proposed a way offices should be andput across the message that "an office is not just a place to work, it is a place where
people with different personalities gather; it should be a place where workers can
comfortably spend time in." During the fair, there were seminars by business managers
and university professors sharing insights into future business and working methods. In
4 days, 7,695 people (107% of the previous year) visited the fair. From January 20 toTokyo Showroom

22, 2016, the 2016 KOKUYO New Products Fair Osaka was held at Umeda Live Officein Osaka. With contents that focused on drawing the attention of vendors and customers
in the West Japan area the quality of KOKUYO's products, employees who were
Umeda Live Office
actually involved in the development of products were roped in to convey to customers
the passion that went into the product. Coupled with product display, seminars on a myriad of topics including office
information management, disaster prevention in companies and company branding and office creation were held. With
1,078 people visiting the fair, we exceeded our target of 1000 visitors.

Tour of the latest office space where employees actually work in - with Live Offices in 25
locations
For more than 45 years from 1969, efforts were made to promote the Live Offices.
Various cycles of experiments, practices and analysis were repeated, and discussions
were held with customers to continuously improve the value it provided. The live office isa cutting-edge office where employees put creative workstyles into practice. It is also amechanism to confirm the office's usability through actual use while constantly making
improvements and showing customers how productivity is enhanced. In short, the office
is not only a workplace, but a way to promote a change of mentality regarding
employees' way of working, and a space to incorporate various ways to enhancecommunication. In 2015, live offices were built in Yamaguchi and Okayama, making a
total of 25 live offices in Japan (30 including overseas live offices). Customers are able
32

KOKUYO Marketing Yamaguchi
branch Live Office

KOKUYO Group CSR Report 2016

to visit these office spaces and observe employees at work. In Yamaguchi, the
KOKUYO Marketing Yamaguchi Branch moved to the vicinity of Shin-Yamaguchi
station, which is in the center of Yamaguchi Prefecture, and became a live office. On
February 4, a Live Office Fair was held. A total of 118 vendors and customers from 58
companies visited. In addition, in Okayama, the relocation of the office of the KOKUYO
Sanyo Shikoku Sales Headquarters was used as an opportunity to set up a Live Office.
For 3 days from November 25, an Opening Fair was held and 742 people visited from499 companies.

Group photo with all employees
after the Office Fair at KOKUYO
Sanyo Shikoku Sales Okayama
officeNationwide Seminars to provide "things to note" to Customers
Seminars were held nationwide based on the theme of providing customers withvaluable hints to solve various issues faced in offices. In Hokkaido, KOKUYO Hokkaido
Sales held "KOKUYO Business Communication Fair 2015" in front of Sapporo Station
on February 5 and 6. Revolving around the theme of "Find your most suitable space!",the company introduced products for solving various issues that arise in office work byusing communication spaces for innovation. In addition, KOKUYO Kitakanto Sales Co.,
Ltd. held the "KIZUKI Fair" on August 19 and 20 in Mito City, Ibaraki Prefecture. The fair
A photo of the "KIZUKI Fair"
aimed to make customers aware of solutions to issues by displaying products fordisaster prevention, national identity security related products, stationery, office equipment and office furniture for different
businesses and businesses such as healthcare, education, government offices, and actually showing customers examples
of use. Evaluation of the product display and actual usage examples by customers who visited the fair included"understood" and "understood very well".

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KOKUYO Group CSR Report 2016

With Employees
KO K U YO b e l i e v e s t h a t t h e g r o w t h o f
c o m p a n i e s i s b a s e d o n t h e g ro w t h o f
individuals who work in these companies.
KOKUYO, therefore, implements a range ofinitiatives to draw forth the full potential ofeach employee with differing personal
attributes and differing perspective andvalues to realize its own growth anddevelopment.

Human Resource Development
Human Resource Development ・・・・・ P35
Program
Personnel System・・・・・・・・・・・・・・ P39

Basic Framework for Diversity
Basic Framework for Diversity・・・・・・ P40
Achieving a Good Work/ ・・・・・・・・・ P41
Life Balance
Support for Active Participation ・・・・ P42
of Diverse Human Resources

Employees' Safety and Health
Labor Practices/ Safety and Health ・・ P46
Healthy Living and Mental Health ・・・ P48
Communication with Employees ・・・・ P49

With Employees)

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.

Skill development programs
The KOKUYO Group has been holding annual cross-industry exchange training, better
known as the Open Challenge Program, since 2011 by inviting participants within theGroup companies who voluntarily put their name down. This program mainly aims forthe 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 2015, 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 objectives of this program are to provide strong support for managers at the working level
and to develop management capabilities that will enable us to continue to show results as a team. The program uses aunique approach by working to solve actual 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. Participants begin by recognizing the roles of35

KOKUYO Group CSR Report 2016

managers, and predominantly covered the development of subordinates in 2015. The program developed to include otherthemes since 2012 and more than 600 people have participated in the workshop.

Promoting the 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 2015, training programs such as that titled"Understanding Human Rights" for new employees and "mental health seminars" for newly appointed managerial staff areheld on a continuous basis.

Training on Founding principle that looked back on the 15 years of Kaunet's launch
Kaunet, the office mail-order business, started from scratch as a retailer in 2000. With
the aim of expanding its business, and the intention to create a corporate culture that
focuses on the customers' perspective, Kaunet deviated from the KOKOYO Group's
philosophy and vision to form its own management philosophy of "thinking from
customers' perspective to be of assistance to customers" and guiding principles "Kaunet
vision". At present, more than half of the employees joined the company in the last 10
years, and the number of members who know of the company's beginings has reducedwith the passing of time. Thus, using the 15th anniversary of launch in 2015 as anopportunity, Kaunet held a training on the founding principles for all members of staff tofamiliarize them with Kaunet's history and to let them understand why Kaunet has its
own management philosophy and vision and why Kaunet exists from the KOKUYO

The morning meeting on thefounding philosophy in the founding
monthGroup's viewpoint. Going forward, with the aim of growing into a company that can drive
the KOKUYO Group forward, we intend to continue the activities that familiarize all staff
to the Group's constitution, views and Kaunet's philosophy.

Training on the founding principle

Kaunet when I joined in 2012 already has systems in place for media (e.g.
catalogues, website), distribution, sales, retail space, etc. I learnt through thetraining of the amount of hard work that went into launching Kaunet in 2000. It
is something I cannot imagine now. Looking back at the company's history, I
realized that even though there have been various major changes such as thereplacement of Kaunet's president and changes to the management
philosophy, there is a philosophy that has never wavered, and that is thecomplete "customer's perspective" philosophy. As a retailer, not a

Kaunet Co., Ltd
Supply division
Ryota Yanagida

manufacturer, the business developed evolving around "what do customers
want? What can we provide to satisfy customers?" I understood that this is an extremely important philosophy
for Kaunet that should never be forgotten in order for Kaunet to grow in the future.

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KOKUYO Group CSR Report 2016

KOKUYO Marketing: Sharing session on problem solving case studies
Since 2012, KOKUYO Marketing and the Furniture business division started holding
sharing sessions in Kansai for case studies that can add value for customers. Now,
these sessions are held in the Tokyo metropolitan area and throughout West Japan.
The session provides a place to share a series of processes that allow employees tograsp essential issues to customers and find the most suitable solutions. For example,
rather than following the corporate stance of simply selling things or dealing with things
customers said at face value, employees could propose an issue that the customer is
not aware of with "it isn't this issue, isnt' it?" or suggest an alternative such as "wouldGroup photo of all presenters

this not be better than that?".
The highlight of the session is when the representative in charge announces good case studies of how "value for ourcustomers" is provided, and praises and commends the achievements of the winners.

Furniture business held 2015 Bonding Session
Furniture business held a bonding session where all relevant members (KOKUYO,KOKUYO Engineering & Technology, KOKUYO Logitem, KOKUYO Marketing, etc.)
gathered to strengthen their bonds. From July to September 2015, this was held in 2
parts at venues in 5 areas (Tokyo, Osaka, Nagoya, Shibayama, and Mie). For the 1stpart, the top management gave an account of the company's performance and situation
as well as the business policy going forward. The 2nd part was a social gathering where
the winners for the "That's Great! Award 2015"* are awarded. The award where"That's Great! Award" winners andemployees recommend fellow employees is decided by a selection committee
officers
comprising employees and officers. In 2015, 1765 applications for recommendations
were made, exceeding the previous year's 1409 applications. The session ended with participants reflecting on changes tothe business on its 55th anniversary and re-recognized the value chain of the furniture business through the "Bonding
ending video" that shows fellow employees working at various locations, including overseas locations.
* A system to award rolemodels whose actions are based on self reflection, unity, and the ability to respond to change (e.g. a person who nevergives up!" Employees themselves put in recommendations from any point of view. It can be for someone the employee would normally like tothank or a role mode that he/she would like to introduce to everyone.

ASEAN Joint Sales Presentation Skills Training
On September 18 and 19. 2015, the first furniture business ASEAN joint sales
presentation training was held in Kuala Lumpur, Malaysia. A total of 19 people working
in sales from Malaysia, Singapore and Indonesia attended the training. The participants
had varying experience in sales, with one who had a 15-year long sales career to one
who had only 3 months of experience. In response to requests by the sales division tolearn sales techniques, a famous lecturer with an outstanding training record in
Malaysia was invited to hold the training which was held entirely in English. On the firstday of the joint training, participants studied the theories behind presentation
preparation, speech opening techniques to captivate the audience, self introductions,etc. On day 2, they assumed a scenario where they had to sell office furniture and learnt
how to build a presentation and how to put it into practice (tone of voice, gestures, eyeParticipants listening intently to the
speaker

contact, use of props, etc.) At the end of the training, improvements could clearly beseen in the presentations they did individually using the skills they acquired. Commentsfrom participants included "It will be good if there is another chance like this", "I'd like totry this in actual sales situation soon".
Employees who received a sales
presentation skills certificate

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KOKUYO Group CSR Report 2016

China's local subsidiaries implement new employees training program
In summer 2015, the new employees at local subsidiaries in China attended a training
program where they visited the Group's distribution warehouse and the storage-furniturefactory. Their first destination was the distribution warehouse of KOKUYO Commerce's
Easybuy business division where they experience the latest facility for managing awarehouse with more than 10,000 types of products and its operations. They observed
how each and every pair of scissors or Campus notebook was accurately picked andshipped to customers while listening to the warehouse manager's explanation on theGroup photoflow of goods from arrival to shipment, afterwhich they were challenged to the task of
product warehousing. By each holding a portable shipment-confirmation device and working alongside warehouse staff,
they learnt about the systemized flow of work such as receipt of order forms, product delivery and shipment. They also
learnt about the system and efforts required to ship the correct product in the correct quantity. For example, "all products
have their barcodes checked multiple times before shipment""On each product shelf, a photo of the said product is pasted."
Next, they visited the notebook factory where they experience the latest manufacturing environment in which humidity levels
are closely controlled, and the quality management system. They experienced for themselves the founder's Hyaku Mai (100pages) spirit*1 in order to understand the strengths of KOKUYO's products. Finally, they visited the storage furniture
manufacturing plant, TaiLi factory where they witnessed the 5S*2 management, which is used in Japan, and thefastidiousness for quality. They seemed very impressed by the cutting site that uses original measuring tools and inspection
tables to achieve a 0.5mm accuracy even for large items and the painting site that where employees paint the back of
products as they would the front of products. Through the training program, new employees witnessed how all employees at
distribution and manufacturing sites work with utmost care for customer trust and renewed their commitment to be aprofessional at their own job and to provide KOKUYO's high quality of service.
* 1 KOKUYO's founder produced a 100-page notepad at a time when many wacho (Japanese account ledgers) only had 96 or 98 pages andadded an inscription of "sho-hyaku mai (exactly 100 pages)", promising quality to his customers* 2 Activities to promote the 5Ss that form the foundation of business management and quality management: Seiri(Sort), Seiton (Set in order),
Seiso (Shine), Seiketsu (Standardize), Shitsuke (Sustain)38

KOKUYO Group CSR Report 2016

With Employees)

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 has to be improved. 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 nationality, race, gender, age, religion, or academic background, while achieving a virtuous circle
where employees are challenged and thus grow continuously to create customer value.

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 employment ofmanagerial-level personnel were redefined. Along with the start of this system, consideration was given to how to leverage
it to promote the growth of individual employees. Along with this, specific initiatives were begun in the areas of goal setting,evaluation, feedback, and reflecting results in terms of employment. Also, since the abilities, roles, and terms of
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 October 2015, KOKUYO Group started the
medium-term management plan "Value Transformation 2018" where the operation model undergoes reforms to realize
customer-orientated value creation. As a part of the reform, changes are made firstly to the relationship between people
and the company. In order to create a relationship to bring out motivation and creativity, changes to the goal setting andevalution systems and methods in the personnel system are due to be made from 2016. The Group aims to challenge all
employees and create a cycle that links the company's growth to individual growth. 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 nationality, race, gender, age,religious or academic background. 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 place of 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 ofcourse, bringing about a major change in direction to seek the display of higher performance and to further make the elderly
a substantial part of the workforce, which is expected to increase in future. The KOKUYO Group is striving for therealization 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 by reflecting the increased expectations in theirtreatment.

39

KOKUYO Group CSR Report 2016

With Employees)

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

14 weeks before and after childbirth (22 weeks for multiple-fetus pregnancy)

Spousal maternity leave

A leave of absence granted when a spouse is giving birth. Two days for each childbirth.

Childcare leave

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 bornin 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

Teleworking

Re-employment 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.
Childcare: Until a child finishes its third year in elementary school.
Nursing care: Up to three years
Eligible personnel include regular employees who left their jobs due to marriage, childbearing, childcare, job relocation of spouse, study abroad, volunteer work, careerchange 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:「Number of Employees Taking Leave for Childbearing and Senior Care」

40

KOKUYO Group CSR Report 2016

With Employees)

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 andfour of the group companies have received a certification logo (nickname: Kurumin Mark) as ofDecember 31, 2015. 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, 2015
KOKUYO Co., Ltd., KAUNET Co., Ltd., KOKUYO Marketing Co., Ltd., KOKUYO Engineering & Technology Co., Ltd.

Iku-boss Gathering for Companies: Active discussions to increase awareness of Iku-boss incompanies
The KOKUYO Group attended the Iku-boss Gathering for companies that was held on
September 8 (Tokyo) and September 17 (Osaka). Members from various industries andjobs gathered. The gathering began with fellow Iku-boss members in managing
positions talking about the issues they sympathized with as managers, such as thedifficulties in personnel development, the frustration of the long working hours, and the
problems with achieving a balance between leading and praising. Then, they discussed
solutions to the problems, during which Iku-boss members from varying professions thathave different working methods and culture exchanged opinions and provided eachAt the Tokyo Venue

other with plenty of stimulation and ideas. The discussion ended with each member declaring the action plan he/she would
take from the next day as a small step towards their goal. To sum up the meeting, Mr. Ando, who is the representative
director of the NPO Fathering Japan that started the Iku-boss Corporation Alliance, shared some points on subordinate
development that he learnt from his working experience, such as the following: "Rather than using the time-consuming
reporting-contacting-consulting method to obtain report summaries, it is more effective to have instantaneous conversations
by meeting up and asking "how is XX coming along?" when you are feeling concerned." "Communication through drinks
leaves out those who do not drink so it is better to communicate through lunch instead." For KOKUYO Group member who
participated, it was a very valuable day as he acquired hints and inspirations that would be useful in management throughthe new approaches and new viewpoints he picked up, and gained a strong network of people who shared similar problems
and goals.

KOKUYO has participated in the Iku-Boss Project Alliance sponsored by
Fathering Japan since it started in December 2014. In order for organizations
to maximize the abilities of employees, the management must understand that
employees have time constraints due to childcare, care of elderly relatives, illnesses and more, and it isessential for the management to change their way of thinking. By participating in the Iku-Boss Corporation
Alliance, participating advanced corporations with the same awareness of challenges can share theirknowledge to make it an opportunity to reconsider their diversity management as well as working style andworkplace climate. In addition, by considering the image of ideal supervisors (Iku-Boss) in the new era throughthe collaboration of corporate networks with the aim of developing further, KOKUYO strives to use it for thesolution to challenges held by customers as a corporation that suggests new working styles.

41

KOKUYO Group CSR Report 2016

With Employees)

The KOKUYO Group is working to develop a work climate that respects diverse individual characteristics, concepts of value
and lifestyles of different backgrounds, such as respect for human rights, nationality, race, gender, religion, age, academic
background, career, and the presence or absence of disabilities.

KOKUYO Logitem held Female Employee Training - "What I'd like to be" Meeting
KOKUYO Logitem, the company responsible for distribution in the furniture business,held for the first time a training targeted at female employees working at centersthroughout Japan titled ""What I'd like to be" meeting" in the Osaka Umekita office. This
meeting looks at supporting success of women in the workplace and is managed by an
office comprising 3 female employees. The aims of the training are to create
opportunities to reflect female values in services provided by KOKUYO Logitem; toexpand the fields women are active in, especially the fields with potential for women toDuring a presentation

advance to management roles; and to actively communicate with female employees
nationwide. During the meeting, there were talks by women leaders holding key positions within distribution partnercompanies and KOKUYO Group's female employees in management positions. Group discussions were also held onthemes such as "working environment and in-house system that involve female employees" and "what I would like to be". In
addition to the 29 female employees of KOKUYO Logitem, female employees of each company within the furniturebusiness also attended the meeting. With around 50 employees attending, this meeting was a huge success.
* The title "What I'd like to be" is chosen with diversity as a pretext and the image of "Be myself", "Be a woman", etc.

Received Special Recognition Award "JWEF Incentive Award for Female Technicians"
Ms Tomoko Yano from the stationery business net solution VU was awarded the special
recognition award at the "JWEF Incentive Award for Female Technicians" ceremony(hosted by Japan Women Engineers Forum). This award is a way to recognize rolemodels and share the success of female technicians who are few in numbers in Japanand who have limited places to publicize their results. This award recognized Yano's
success as a technician and as a project manager, as well as her contributions via labor
union activities to the workplace and to the reforming of corporate culture.
Receiving JWEF Award

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 to realize the social participation of people
with disabilities and so in 1940 started employing people with hearing difficulties at themain 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 without
treating people with disabilities any differently. Although the employment of people withdisabilities became mandatory in 1976, KOKUYO's employment rate for people with
Employees of KOKUYO Heartland
disabilities at that time already reached 1.76%, which is more than the statutory
employment rate. As of January 2016, the employment rate for people with disabilities in the KOKUYO Group is 2.12%.
While the Group has already achieved the statutory employment rate of 2.0%, we are pledged to promote the employmentof people with disabilities by making use of the Corporate Group-wide System *1 with the special subsidiaries, KOKUYO K
Heart and Heartland. In addition, aiming to develop a progressive new business model for the employment of the disabled
people, KOKUYO offers a range of job opportunities and working styles for employees with disabilities, depending on thecharacteristics of the disabilities. For example, although KOKUYO K Heart started with the aim of employing disabled
people for the KOKUYO Group, it now contributes by playing a supporting role in driving the KOKUYO Group business as
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KOKUYO Group CSR Report 2016

well. KOKUYO was recognized for its efforts toward employment of persons with disabilities and was selected for inclusionin the 2013 Diversity Management Selection 100 Awards. KOKUYO Heartland was also recognized for its efforts offocusing on agriculture for increasing the job scope available for disabled people and its efforts in contributing to thehydroponic vegetable farming business and the promotion of the employment of disabled people in the region. In 2014, it
was selected for inclusion in the Discover Treasure of Rural Areas *2. In 2015, it was recognized for contributing to thedevelopment of Osaka's agriculture through progressive agricultural management activities and was conferred the Naniwa
Agriculture Award. Furthermore, with regards to its working environment, KOKUYO K Heart was commended by the Osaka
Labor Bureau for achieving 4,100 days without accidents as the company made improvements to the environment so that
disabled people can work safely and comfortably.
* 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.

Heartland spoke at the Farming Support Seminar
In February 2015, KOKUYO Heartland gave a talk at the Farming Support Seminar
hosted by Osaka Prefecture. This seminar aimed to create opportunities for entry into
the agriculture industry and to share the charm of working in the agriculture industry byemphasizing the importance of agriculture in the country's growth strategy and providing
information on working in the industry. 150 individuals and companies interested inengaging in agriculture attended the seminar. Heartland gave a presentation on thefollowing topics: the company's entry into the agriculture industry; the approach to
At the Farming Support Seminarproducing high quality products (spinach for salad) as a pioneer that promotes theemployment of disabled people in agriculture by fully utilizing disabled people's characteristics; the solutions to theemployment of disabled people in the farming of hydroponic vegetable through collaboration with various industries andinformation sharing; and the mechanisms for producers to achieve profits.

Heartland's approach presented at the International Ergonomics Association Conference
On August 13 2015, Heartland's approach was introduced at the IEA (International
Ergonomics Association) Conference held in Australia by a visiting professor at theTama University Graduate School. The professor gave a speech on his thesis thatemphasized that the coexistence of research and application necessary for sustainablegrowth companies was achieved by Heartland as a result of efforts to solve social
problems. Heartland's employment of disabled people triggered the entry intohydroponic vegetable farming, which in turn made full use of the main company's
At the IEA Conference
experience, such as process improvement and product development. IEA is anorganization that aims to create environments that are easy to work and live in, and organizes activities such as provision ofassistance to developing countries to enable ergonomics to be of use to society. It has around 50 federated or affiliatedsocieties originating from all over the world. Up to 1000 researchers from around 40 countries including the Oceania
countries, North and South American countries, Europe, Africa and Asia participated in the 2015 conference.

Renewal of KOKUYO K Heart's office and factory
From August to September 2015, KOKUYO K Heart's office and factory underwent
renovations. The renewal aimed to improve productivity and to comply with the
obligation to provide "reasonable accommodation" under the Act on the Elimination of
Disability Discrimination which comes into effect on April 1 2016. From the productivity
viewpoint, the office, changing rooms, canteen, meeting spaces were reconfigured toallow for zoning according to the flow of duties and the creation of an environment thatis conducive for focusing on work. On the other hand, from a reasonable43

New Office Completion Kick-off PartyKOKUYO Group CSR Report 2016

accommodation perspective, the changes were made to ensure corridors were wide
enough for wheelchairs to pass through with ease, to expand the space in changing rooms, to ensure a space where one
could rest when feeling unwell, to install a toilet with revolving warning lights to alert others in case of emergencies, etc. On
September 3, 2015, a New Office Kick-off Party was held, with around 60 people including home-based employees andemployees working at other locations attending and pledging to strive for further growth.

Before renewal）Unevenness due
to parts of the floor paint coming off

After renewal）Floor that has been
fully repainted

Installation of revolving warning
lights in the office and toilets to alert
staff of earthquakes, fires, time tone

Before renewal）Workspace andcanteen shared the same space

After renewal）canteen-cummeeting space

Wide corridors so that wheelchairs
can pass through easily

KOKUYO K Heart employee gave a speech at the Japanese Society for Day Care Treatment
The 20th Annual Symposium of Japanese Society for Day Care Treatment - Osaka
Symposium was held on October 23 and 24 with the aim of developing and improving
day care. Mr. Keisuke Goto who works at KOKUYO K Heart and is responsible fortranscribing opinions and comments from customers who contacted the customer
support center into text, gave a speech as a symposium participant. Through apresentation titled "Healing and growth in day care: from a hikikomori of 15 years who
did not have contact with others to someone who was able to work", Mr. Goto shareddetails of his 5 years in day care, its effects and the changes in emotions he felt, as well as how it led to his employment.
His speech gave everyone in day care courage and hope and was received with a huge applause.

Initiative of KOKUYO ART PROJECT for enriching the minds of workers, learners and people
in community.
KOKUYO Group is promoting its project aimed at enriching the minds of workers,
learners, and people 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 stage of the project, KOKUYO collaborated with Able Art Company* todesign and release new products.
KOKUYO's stationery business 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.
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KOKUYO Group CSR Report 2016

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 asupport 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 find a job by utilizing their creative work in advertisements andproduct design.
Able Art Company

Kaunet's original products

Art Madre

Envelopes and business card
holders45

KOKUYO Group CSR Report 2016

With Employees)

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

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, with the aim of ingraining theculture of safety first in overseas factories, overseas employees attend a safety meetingand training in teams. In fiscal 2015, Iwami Paper Industry Co., Ltd. had zero accidents.
Over the previous 9 years, some form of accident or disaster would occur around once
every 6 months. However, two years ago, the company made a safety declaration toincrease every employee's safety awareness and steps were taken to check their progress. Their hard work had finally paidoff.
2) Construction
To prepare for the Safety Week that starts on July 1, the KOKUYO Group Construction
Safety and Health Conference was held to emphasize the safety first policy. Around 600
stakeholders, both inside and outside the company, participated at seven locations inJapan from June 3 through 18. The company's website was used to share and promote
the active use of safety information. Regular training programs for laws and regulations
such as the Safety and Health Act and Construction Industry Act, even for the six Groupsales companies. Through such activities, KOKUYO Group is working to ensure safety
and compliance with laws and regulations.
3) Transportation
Group companies carry out daily checks to ensure that the workplaces are clean andorderly as well as monthly safety patrols. In addition, to make transportation sites in the
KOKUYO Group safer, there are regular training sessions such as safety education for
operating forklifts. This training improves the safety skills of workers. For off-site work,
workers check the safety and quality of all tasks performed at delivery sites and makecontinuous improvements. At KOKUYO Logitem, through initiatives for health andsafety, hazard maps were created for 19 locations throughout Japan. Originally used toWorkplace hazard map
predict the extent of impact during disasters, the hazard maps help to maintainaccident-free workplaces through its use as drawings to highlight dangerous locations and points to note, and its use during
new employee training and near misses as information for risk anticipation. With Ina Delivery's accident-free workplace
record of 8,500 days in the lead, we aim to improve safety awareness at centers across Japan and create workplaces thatremain accident free.
4) Initiatives taken to prevent the normalization of long working hours
Besides the monthly Health and Safety Committee activities in offices, discussions on the review of working methods arebeing held at labor-management conferences. We strive to improve productivity by striking a balance and using time
efficiently. At the same time, in order to achieve a work-life balance, division units have introduced a weekly No-Overtime
Day. Employees who often work overtime are encouraged to have an interview with an industrial physician to confirm theirhealth condition and submit an improvement plan for the following month.
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KOKUYO Group CSR Report 2016

5) Disaster Drills at Shinagawa Office and Osaka Headquarters
For disaster preparedness, the offices in the east and west regularly implement disasterand evacuation drills to ascertain the roles of organizations and individuals in an
emergency. The Shinagawa office held a disaster drill on May 20 2015 at 10 a.m. basedon the scenario where a low magnitude 6 earthquake with the epicenter off the coast of
Chiba Prefecture occurred in Tokyo. At the Osaka Headquarters, a disaster drill washeld on 2 September with the basic themes of "Understanding safety procedures andrules established for large earthquakes and fires "and "Confirmation of basic behavior toensure personal safety by each employee". In addition, safety confirmation via emails to

Smoke house experience

KOKUYO Group staff throughout the country was carried out in conjunction withdisaster drills. At both Osaka Headquarters and Shinagawa office, 3 days' worth of foodand water are stocked in preparation for disasters. In order to prevent the need for
employees to go to the disaster prevention warehouse to obtain the necessary items, adisaster prevention cabinet that can accommodate a day's worth of food, water, towels,
etc. has been installed in every floor and is stocked with selected essential items.
Furthermore, there is a "KOKUYO disaster prevention" page on the company networkthat holds an emergency manual for employees, survival cards and more so that
employees know how to respond and act in times of disasters.

Disaster prevention cabinet

6) Disaster (Fire) Drills at offices in China
From May 19 to 22, each office in Shanghai, Guangzhou, Shenzhen and Beijing held
tabletop exercises, actual fire simulation drills and training. The drills and training weretargeted at employees who are part of the in-house fire brigade at each office, and a
total of 70 people participated in them. Unlike Japan, the custom of having disaster (fire)
drills at schools and companies is not common in China, thus it was the first time theparticipants had the opportunity to learn of the horrors of fires and information on
evacuation. The first half of the drill consisted of a lecture on basic knowledge of fires
and firefighting and a desktop exercise to make participants consider actions to be taken in the scenario where fire occurred
during working hours. In the second half of the drill, participants learnt to use fire extinguishers through actual use, andwere trained to use the emergency staircase to escape and gather at the designated evacuation site. In order to confirm
whether the training improved the participants' understanding of actions to take to prevent disasters, check sheets
regarding the degree of understanding were prepared before and after the training. The degree of participants' improvement
were as follows: knowledge of disaster prevention and understanding of actions required during emergencies increased
from 87% before training to 95% after training.

Seiji Kimura, an in-house trainer at KOKUYO Engineering & Technology(KET) presented at the 74th National Industrial Safety and Health Convention(hosted by the Japan International Center for Occupational Safety and
Health). The convention which is the largest safety and health related event inJapan was held in Nagoya City for 3 days from October 28. At the same
convention 5 years ago, KET introduced its health and safety initiatives thatwere created from scratch through a presentation entitled "Building a healthand safety management system based on supervisor training". This time, the presentation was on thedevelopments in KEY's promotion of safety through 5 years of educational activities and titled "10th year ofsupervisor training: Improvement of health and safety initiatives through the implementation of Supervisor
re-training". It was given to an audience of more than 500 people.

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KOKUYO Group CSR Report 2016

With Employees)

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

KOKUYO Group health targets and the 2015 results
We have established the following targets for the Group's workforce to prevent lifestyle diseases for the three years startingfrom 2013. Unfortunately, 2015 saw a 1% rise in the percentage of employees who smoke. We intend to determine healthissues to focus on for improvement and take the necessary steps to improve the health of our employees.

KOKUYO Group health targets
2013

2014

2015

Percentage of employees with a BMI over 25

21%

23%

23%

Average percentage of employees who
smoke

26%

26%

27%

Specific steps we have taken in 2015
1) Implementation of health campaign
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 individual health-related goals such as recording the number of steps taken daily,
employees who achieved their goals were awarded with watermelon in summer and an assortment of kiwis in winter. The
campaign offered delicious rewards while promoting health consciousness and the number of participants doubled from 340
in the first year it was implemented (2014) to 670.
We managed to help change employees' mentality towards health promotion whereby they can fun in becoming fit. We
strive to customize the campaign and unfold it across the Group so as to encourage participants would want to continue
with the campaign.

2) Healthy meals at the Company cafeteria
Since 2012, KOKUYO has been providing healthy meals under 600 kcal with less than 3 g of salt at the headquarters' andShinagawa office's cafeterias. As a campaign to promote healthy meals, tickets will be distributed with each healthy meal
and for every twenty tickets collected, employees would receive a free healthy meal. This campaign is set to continue every
year from August to November.
3) Setting up of a Health Support Center for expatriates
In 2014, a health support center has been set up for the exclusive use of employees who work abroad. As eating habits
tend to be disrupted while working overseas, expatriates utilize the results of their health checkup and hold regularmeetings via a TV conference system with a health nurse. By using a specialized health nurse, we strive to create anenvironment where employees can discuss their issues freely while receiving medical advice.
4) Promotion of mental health initiatives
The Employee Assistance Program (EAP) has been introduced to prevent problems related to stress whereby employees
get access to individual stress checks and counseling with an external professional in person or via telephone or e-mail.
From 2016, we will hold surveys focusing on stress checks based on laws and regulations and conduct activities to increaseawareness of the burdens employees feel.

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KOKUYO Group CSR Report 2016

With Employees)

KOKUYO Group organized various events to enhance communication with employees.

KOKUYO Logitem held a Tanabata Festival
KOKUYO Logitem planned and held a Tanabata Festival (also known as Star festival) in
July 2015 in the 2nd floor caf? space in the Osaka headquarters New Building XT(Kurosuto) to promote a way of working that enables employees to meet new people.
On the day, Logitem employees as well as employees of the furniture business thatwork on the same floor had a wonderful time filled with laughter as they reminisced
about their childhood days while writing down their wishes on strips of paper andmaking decorations using origami. There was even real bamboo at the venue. The
Preparations for Tanabata Festival

strips of paper were then brought to the nearby Hiroka Shrine. Comments fromparticipants included "By simply looking at the decorations at the corner of the office I feel relaxed. We should definitely plan
another event!" Although it was a short-term event, many employees were able to enjoy a little sense of the seasons at theoffice.

KOKUYO Logitem held an event to commend delivery quality
Since 2012, KOKUYO Logitem conducts a customer survey twice a year on the qualityof delivery. Around half of the customers surveyed added comments that werepredominantly in praise of the service. Some comments were particularly moving, suchas "I was impressed by their attention to the surroundings and consideration of safety"and "They were polite and I was comfortable even while they were working". Letters ofappreciation are given through a presentation ceremony to express gratitude to suchdrivers and workers responsible who add value to KOKUYO's delivery. In March andOctober 2015, drivers and workers responsible who received exceptionally moving
comments or the highest number of moving comments from customers were selected
and given a letter of appreciation.

Letter of appreciation presentation
ceremony

Celebration of Employees' milestones
In recognition of employees who served the company diligently for 10, 20 and 30 years
and thus contributed to the company's development, the KOKUYO Group awards themfor their long service with special leave and commemorative items (travel vouchers). In
addition, in appreciation of the many years of hard work by employees who areapproaching mandatory retirement, the company holds retirement ceremonies tocelebrate their retirement. From May 1, 2015 to April 30, 2016, a total of 56 people
reached mandatory retirement and the retirement ceremonies and banquets took placein spring and autumn. Started in 1983, these ceremonies have continued for more thanAt a retirement ceremony

30 years.

Family Day
Family day is an event where employees' families are invited to the office. It serves to express gratitude for the family's
support on a day-to-day basis, to deepen their understanding of the company and work, as well as to enable lively
communication and exchanges between family members. This event was started by the employees of the stationery
business to entertain family members in 2008 and has continued running since then. Every year, junior staff members in
49

KOKUYO Group CSR Report 2016

their 1st - 2nd year in the company run the project and prepare an array of activities forthe family such as workshops using KOKUYO's products, games to test the family's
teamwork and caf? corners. In August 2015, Family Day was held in Shinagawa and the
Osaka Headquarters, attracting a record number of visitors (315 in Shinagawa and 301
in Osaka).

An event that both the adults andchildren enjoy

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KOKUYO Group CSR Report 2016

With Business Partners
The KOKUYO Group creates new value
together with its business partners andpursues customer satisfaction. In addition,
to build relationships of trust with its
business partner and achieve mutual
development, KOKUYO issued its Basic
Procurement Policy

Procurement Policy・・・・・・・・・・・・・ P52
Working together with our ・・・・・・・・ P54
suppliers
Deepening of Partnerships ・・・・・・・ P56

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

KOKUYO's Responsibilities to ・・・・・・ P60
Stakeholders

With Business Partners

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 fulfilling
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 CSR Report 2016

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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KOKUYO Group CSR Report 2016

With Business Partners

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.

Stationery Business conducted an audit of subcontractors
The stationery business has been implementing an audit of subcontractors to ensure reliability of environmental indicatorson product catalogues in the past. In 2015, we conducted a factory audit of 90 companies. We visit our subcontractors tocheck for the compliance of standards concerning environment-friendliness established by the Green Purchasing Law, etc.
The audit follows the audit procedure established by the company to confirm whether the ratios of used paper andreprocessed resin conform to the standards, whether specified materials that meet the standards are used in production
process and whether there are no issues 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. By
exchanging information on examples of cases where reliability with regards to production control were improved, we strive
to ensure the reliability of environmental indicators in the future. In order to enhance the value we offer to customers, we
aim to achieve mutual development based on long-term relationships of trust by sharing our strategies and policies withboth our manufacturing and logistics service suppliers periodically.

Furniture Business holds subcontractor meetings on a periodic basis
KOKUYO's furniture business holds subcontractor meetings with major subcontractors twice a year. In 2015, the meetings
were held in January and November. In the January meeting, participants reflected upon the previous year and shared theircurrent term's business strategy. In the November meeting, the furniture business explained their production, sales, andinventory policies for the 2016 demand season and sought the cooperation of the subcontractors. In addition, in theexecution of business strategy, the company recognized subcontractors that took excellent initiatives as power*
subcontractors to express its gratitude. Their initiatives are also presented so that companies can learn from one anotherfor co-existence and co-prosperity, and cooperate to improve the entire furniture business.
* Power is derived from the initial letters of 5 indicators: professionalism, ownership, wisdom, external focus and revolution

Subcontractors

Explanation by Group managing
officer, Head of furniture business
Mr. Sakagami

A toast at the get together

Kaunet Holds Catalogue Partner Kickoff Meetings
Kaunet publishes its mail order and online catalogues twice a year in February andAugust. At the start of the preparation for each new catalogue every year, Kaunet holds
a Catalogue Partner Kickoff Meeting that is attended by its suppliers (procurement
suppliers) and other companies involved in preparation of the catalogues. The purposeof these meetings is to share with and help participants gain an understanding of
Kaunet's ideas and strategies. At the meeting, presentations are given on the editorial
policy of the upcoming catalogue, policies for choosing products to be included in the
catalogue, and product development policies. By having close relationships with
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Partner kickoff meetings

KOKUYO Group CSR Report 2016

suppliers and partner companies, Kaunet's is able to provide added values that do not only include a low price and a good
selection of merchandise, but also unique values such as the ease of selecting items and the awareness that enables
customers to overcome any dissatisfaction and problems that arise. Through this, Kaunet aims to be a company that ischosen over and over again by its customers. To celebrate the 15th anniversary of launch, Kaunet published catalogue no.
30, a landmark issue, in 2015. Kickoff meetings were held on 16 April to provide explanations for individual productcategories, the trend in the development of PB products, the newly created separate booklet "Kaucore Premium Magazine"that only lists PB products that adds value, etc. In the morning session, partners of office supplies and office automationequipment were invited. In the afternoon session, partners of household necessities, specialized articles, and furniture wereinvited. A total of 251 people from 147 companies attended the meetings.

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KOKUYO Group CSR Report 2016

With Business Partners

To create and delivery new value to our customers, we share our strategies and policies with our retailers and agencies anddeepen our partnership. We strive to be an integrated value chain in our pursuit of customer satisfaction.

KOKUYO Partner's Messe 2015
The KOKUYO Partner's Messe 2015 was held over 2 days on July 22 and 23 on the
2nd floor of the Tokyo showroom. The Messe is a product exhibition that is held once a
year for the stationery business and an event where KOKUYO product retailers andagencies are invited and introduced to proposals to add value based on new
perspectives on new products and popular merchandise, planning proposals forstorefronts, examples on industry-specific deliveries, etc. The theme for 2015's Messe
was "Wa!" In Japanese, Wa (輪) stands for the link for bonding with partners, the "Wow!"
KOKUYO Partner's Messe 2015(わっ！) exclaimed when one sees an impressive product or moving editorial, and Wa(和) means Japanese quality that takes into account the demand from foreigners visiting Japan. At this Messe, one
particular focus is the storefront plans for specific channels. For example, for volume retailers, a product display proposal
centering on 'focused products' made for specific industries might be recommended; for specialist retailers, a productdisplay targeting foreigners who are visiting Japan might be suggested; and for other retailers selling to corporations,
proposals focusing on industry-specific display relating to government offices, schools, healthcare and financial industries,
customized products and emergency supplies might be recommended.
Over the 2 days, 1,098 people from retail stores and agencies attended the KOKUYO Partner's Messe 2015. We strive tocontinue building links with our partners through such communication means so as to create new value for our customers.

KOM (KOKUYO Office Master License) System
The KOKUYO Group uses the KOM (KOKUYO Office Master License) system to support retailers to change their sales
style to the proposal method. The KOM system started as the same time as the establishment of the Umeda showroom. By
registering with the KOM, members can use the Umeda showroom as their own and invite customers to visit the live officeduring member-only seminars. Based on the number of customers invited, members can upgrade their licenses from red tosilver to gold tiers. Currently, there are 547 registered members. In fiscal 2015, the number of companies invited by KOM
members in 1 year has increased 10% from the previous year to 1032. In particular, the number jumped significantly by 1.6
times year-on-year after January. With regards to the half year performance, we are proud of the high contract rate of 90%
for projects created with customers who visit the showroom on usual business day. In addition to the Umeda office, theKOM system has also started at the Shinagawa Live office SHIPP. The SHIPP Attend Training, which introduces the KOM
system to customers, was held over February 3 to 6 and a total of 407 people from 53 companies attended. The training
started off with the introduction of the KOM system, and was followed by a tour of the Shinagawa live office SHIPP and theTokyo showroom where explanations and points to propose to customers were introduced.

Commendation ceremony

Winners

SHIPP Attend Training

Kaunet Agent Meeting
Kaunet is actively engaged in activities to deepen its ties with distributors. The Kaunet agent meeting is held twice a year
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KOKUYO Group CSR Report 2016

around the time the catalogues are published to explain about the appeal points of the
new catalogue and management policies. Meetings were held at 7 locations across thecountry in Sapporo, Sendai, Tokyo, Nagoya, Kanazawa, Osaka and Fukuoka fromFebruary 17 to 26 after the publication of the 2015 Spring/Summer catalogue, where
312 people from 200 companies attended. After the publication of the Autumn/Wintercatalogue, meetings were held at 5 locations across Japan in Sapporo, Tokyo, Nagoya,
Osaka and Fukuoka from August 20 to 28, where 300 agents from 200 companies
participated. As Kaunet celebrates its 15th anniversary on October 2, the company
conveyed its gratitude for the agents' day-to-day cooperation at the meeting, mentioning

Kaunet Agent Meeting at the Tokyo
venue

that "It's all due to our agents who are closest to the consumers who showcased ourvalues". In addition, to enhance communication with partners of the procurement
system "Benri Net" and "Benri Net Lite", a "Benri Net Lite Agent Meeting" was held on
January 29 in Osaka and February 6 in Tokyo with the aim of conveying the role ofagents in the Benri Net Lite 2015 action plan. On both days, 65 agents from 40
companies attended. Kaunet also exhibited at the "5th Office Service Expo" held at
Tokyo Big Sight over 3 days from July 8 with the aim of creating new projects andfinding new customers and agents.

Agent Meeting at the Nagoya venue

110th Anniversary of Launch - Appreciation Ceremony
On 1 July 2015, the KOKUYO Co., Ltd held an appreciation ceremony on the 110th Anniversary of Launch to express thecompany's gratitude at Hotel Okura Tokyo Heian Room in Tokyo Toranomon. A total of 1053 people including themanagement of corporations that have supported the company over the years. The gathering began with greetings by Mr.
Hidekuni Kuroda who was appointed as President and CEO, followed by congratulations by guests and a toast. There wastime for cordial chats before the event ended with greetings by President Akihiro Kuroda to express his gratitude.
He expressed his aspiration for all employees to behave themselves in a way that do not bring shame to the KOKUYO
name and for them to be of assistance to society. The banquet ended very successfully.

President and CEO Mr. Hidekuni
Kuroda greeting the audience at the110th Anniversary Gathering

The 110th Anniversary Gathering

Product introduction that
corresponds to scenes ofcustomers' growth

KOKUYO Supply Logistics hold the 5th improvement case contest
KOKUYO Supply Logistics (KSL) implements their business policies of strengthening on-site capabilities and chain
businesses through continuous improvement activities. The Improvement Case Contest is held to share the results of these
activities and share information between distribution centers, as well as improve the presenters' presentation skills. The 5th
Improvement Case Contest was held on October 17, 2015 in the Osaka Headquarters' 8F Meeting room. A total of 70
people including some from partner companies gathered. Each center and partner company provided reports for 10 casesof improvement. Many executives from Group companies including the stationery business, furniture businessheadquarters, Kaunet, KOKUYO Logitem and KOKUYO Product Shiga also attended the meeting to better understand KSL
day-to-day activities and to offer advice and opinions from a new perspective.

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KOKUYO Group CSR Report 2016

Improvement case contest

Receiving the grand prize

Receiving the special recognition
award

47th KJM Award Ceremony
The 47th KOKUYO Jewelry Members (KJM) Award Ceremony was held at the Rihga Royal Hotel Osaka on October 29,
2015. KJMs with outstanding sales results in the previous fiscal year were invited to extend our appreciation for their efforts
and to deepen our cooperative relations. A total of 181 KJMs attended the ceremony* KOKUYO Jewelry Members (KJM) is a system to rank and incentivize retailers who sells more than a certain amount of KOKUYO products
based on their annual sales. There are two courses, one for stationery (emerald course) and the other for furniture (diamond course). Currently,
there around 1,200 members.

47th KJM Award Ceremony

Introduction of new products

At the social gathering

KiSPA* Initiative to help enhancing the convenience of retailers
In order to promote further partnership with stationery stores and enhance customers'
convenience when buying stationery and office supplies, we published the first KiSPA
catalog since December 2013. We aim to increase the overall value in the structure ofdelivery channels in the KOKUYO Group.
The KiSPA catalog is a symbol of the integration of retailers and KOKUYO. At the end of
2014, the pre-publication information session for the 2015 KISPA Catalog was held inconjunction with the kickoff party of the campaign for the 110th anniversary of
KOKUYO's launch, with 564 retailers from 383 companies attending at 17 venues

At the Hiroshima venue of the 110th
anniversary of launch Campaign

across Japan.
Kickoff Party
The KiSPA catalogue aims to be the catalogue chosen by retailers and the firstcatalogue customers take, so steps are often taken to improve and develop it. The creation of the contents for the

KiSPA2016 catalogue started with a nationwide user survey on 1600 people. While incorporating views of retailers andviews of the company's operations, product planning and development divisions, steps were taken to improve on the easeof searching and selecting, and the plans to increase sales. In addition, with regards to product selection, retailers' requests
and demand trends are taken in account and the product selection expanded to include daily necessities, office supplies forfactories, and security-related products.
*KiSPA is the abbreviation for KOKUYO is your partner. It expresses KOKUYO's desire to be the best partners with customers and stationery
retailers.

Trade fair for Compact Supermarkets
A trade fair titled "KOKUYO CSM Fair 2015 - Support for improving store productivity in small stores" was held in the 5th
floor studio of Tokyo Showroom on March 12 and 13, 2015. The fair is targeted at the CSM (compact supermarket) market,
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which has expanded due to the increasing need for convenience relating to eating habits, where people want to do their
daily shop quickly in familiar stores. It offered suggestions for store fixtures and equipment while showcasing related
products and services such as the Kakiage Cloud System, emergency supplies from the stationery business and tape cutter
Karucut. 46 people from 13 companies that were major customers of CSM visited the fair, and sales representatives
attended to each company individually. They spent more time than expected at the fair and provided a lot of comments
relating to their plans, such as the following: "I'd like to try this at the new shop soon." "I'd love to report and introduce this tothe management." "I'd like to introduce this product across all our shops."

Preparing the venue and displaying
necessary equipment

Sales talks

Fixtures and equipment for the
agricultural counter

KOKUYO Vietnam Trading: Sales Partners are invited for a Japan tour
KOKUYO Vietnam Trading invited major sales partners in Vietnam for a 7-day Japan
Tour between November 15 and 22, 2015. The tour served as an incentive for partners'
2015 sales performance relating to KOKUYO products and to deepen theirunderstanding of KOKUYO's history and initiatives in Japan so as to achieve mutual
growth in Vietnam and thereby foster close cooperative relationships. In addition totours of the KOKUYO headquarters, historical records room and other facilities todeepen their understanding of KOKUYO, the sales partners went shopping in Tokyo andTour of the Kinki IDC
visited places such as the Atami Onsen, Kyoto, Himeji Castle. They had a very
enjoyable tour of autumnal Japan.
The KOKUYO Vietnam stationery business is proud to have one of the best distribution systems in the stationery industry in
Vietnam. By improving this strong distribution network and selling products that appeal to the needs of users in Vietnam, we
aim to grow in the fast-growing emerging Vietnamese market.

New Product Experience Sessions and WORKSIGHT Seminars in ASEAN
The new product experience session and WORKSIGHT were held to increase awareness of the KOKUYO brand, toincrease the penetration KOKUYO Furniture products in the non-Japanese markets of Jakarta and Bangkok, as well as toestablish friendships with designers at sales partners. In Jakarta, 20 famous designers and stakeholders were invited to the
Jakarta Live Office on May 13, 2015 for the WORKSIGHT seminar where there were examples of the creation and working
methods of world-renowned corporate offices as well as a session to experience the swivel chair ENTRY, a strategic
product for overseas markets. In Bangkok, more than 90 designers gathered at the Central Embassy shopping mall on May
21 to attend the WORKSIGHT seminar which introduced the next-generation workstyle and working environment. Being the
3rd WORKSIGHT seminar held in Bangkok, awareness of the seminar was higher and comments like "I have been looking
forward to the seminar" were heard from participants. We strive to actively deliver the value of KOKUYO products to the
ASEAN market.

At the WORKSIGHT seminar
designers

At the event venue

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KOKUYO Group CSR Report 2016

With Stakeholders

KOKUYO is aware that increasing corporate value is our responsibility to shareholders and investors. KOKUYO strives tomake accurate and timely disclosure of corporate information in order to maintain transparent and sound corporate
management.

Policy and Achievements Regarding Dividends
We are working towards a sustainable business growth to maximize corporate value in the medium-long term and toincrease dividends paid to shareholders. We aim to provide a 25% payout by 2018 as a return to shareholders. In fiscal
2015, we offered an annual dividend of JPY 17.5 per share (JPY 7.5 as an interim dividend and JPY 7.5as a year-end
dividend, JPY2.5 as a bonus dividend in celebration of the 110th anniversary of launch). Retained earnings are actively
employed to make investments for future growth.

Making Management More Transparent
1) IR Activities
We strive to fairly and accurately convey the KOKUYO Group businesses, corporate attitude and vision for the future, as
well as achieve two-way communication. In 2015, we held the following IR activities:
For institutional investors: The financial results briefing was held twice last year where the President and CEO spoke about
the Group's results and strategies. We also explained the Group's status through individual visits, small meetings, andforeign investor conferences.
For individual investors: In addition to explanations on the Group, the person in charge of product development introduced
the product development process to help increase their understanding of the Group and to foster a sense of familiarity.
We will continue to proactively engage in IR activities to raise 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.
* Related information：IR News

Shareholder Special Benefit Plans
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 at the end of
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KOKUYO Group CSR Report 2016

An IR event was held for individual investors titled "Company information
session: Secrets of Campus Notebooks" on June 19, 2015 to secure loyal
stockholders and around 70 people participated. In general, individual
investors invest in shares to gain profits through stock dealing and to get
dividends. As such, the holding period of shares is unstable. However, we
believe that by making the individual investors loyal fans of KOKUYO, theinvestors will become great customers for our products and services and will
end up holding the shares for a longer period of time. Therefore, in addition to the provision of information suchas the company overview and future business strategies through the standard investor information sessions, we
held the IR event to convey the stories relating to products so that investors will understand KOKUYO betterand be better acquainted with the company. The first part of the company information session described
KOKUYO's history, overviews of each business, financial status, strategies for the future, target for the period
ending Dec 31, 2015, etc. In the second part, the person responsible for the stationery business introduced our
focus on transition, binding method, cover, pages, borders, design and ease of use and other aspects relating toCampus Notebooks which was celebrating its 40th anniversary of launch in 2015. Of the individual investors
who attended the event, some requested for more detailed information relating to the business and finances
while many shared opinions and thoughts on KOKUYO's focus in the creation of Campus notebooks.

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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 andencouraging advancement.

Long-term contribution activities
KOKUYO Design Award ・・・・・・・・・・ P63

Domestic contribution activities
Campus Art Award ・・・・・・・・・・・・・ P65
The Future of Tohoku ・・・・・・・・・・・ P66
Contribution Activities Deeply ・・・・・ P67
Rooted in Regional Communities
The Job Study Initiative・・・・・・・・・・ P70

Foreign contribution activities
Initiatives in India・・・・・・・・・・・・・・ P72
Initiatives in China ・・・・・・・・・・・・・ P75
Initiatives in Vietnam・・・・・・・・・・・・ P77

With Local Communities

The KOKUYO Design Award is an international design competition that aims to attract product designs forcommercialization from a broad range of users which are superior from a user's perspective. In 2015, this event was held inaccordance with the theme Beautiful lifestyle.

KOKUYO Design Award recipients

The 13th KOKUYO Design Award
The KOKUYO Design Awards is a design competition 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 ability of KOKUYO and contributing to the enhancement of the design abilityof Japan through a process of soliciting designs from a broad range of sources in accordance with the perspectives ofcustomers, 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, the Beetle Tip
highlighter and the Wagomu rubber band. This event has also developed a reputation as an important gateway to career
opportunities for young designers.

Kadokeshi (eraser)

PARACURUNO
Campus notebook

Beetle Tip highlighter

Wagomu rubber band

Theme for 2015: Beautiful Lifestyle
The theme for 2015 was Beautiful Lifestyle. It broadly captured the working and learning
environments of customers in the KOKUYO business domains. As people's lifestyles
change and the boundary between life's ON and OFF becomes less distinct, weincorporated KOKUYO's desire to match customers' perspectives of their lifestyles andthus set the theme as "Beautiful", a more instinctive sense of value compared toprevious years. In addition, as a new approach in 2015 to spread the competition theme
and ask the society, we held various events to get the public to think about "beautiful
lifestyle" during the registration period for products.
On July 2, we held a talk show in ifs Future Laboratory at Tokyo Gaienmae to convey
KOKUYO's thoughts incorporated in "Beautiful Lifestye" so as to improve the quality ofworks submitted. 2 of the judges and the President Hidekuni Kuroda were on stage totalk about a wide range of topics that included "changes to the lives of people in the63

KOKUYO Group CSR Report 2016

future" and "what is beauty in daily life?" In addition, we participated in a charity
sponsored by SUPER PLANNING Co., Ltd between July 14 and 26 at the same venue,
where tote bags designed by 10 previous Design Award winners and 10 of KOKUYO's
in-house designers based on the "Beautiful Lifestyle" theme were on display.

At a talk show held during theapplication period where KOKUYO's
thoughts on the theme Beautiful
Lifestyle was conveyed.

Grand Prix: Word Block
The KOKUYO Design Awards received a total of 1,659 entries (1,232 from Japan; 427
from overseas) during the application period of May 15 to July 31. After the initial
judging in August, the final judging was held on November 17 where 10 teams of
finalists delivered their final presentation to the judges. One Grand Prix winner and three
Merit Award winners were selected based on criteria such as commercialization of the
product from a user's perspective, compatibility with the theme and completeness of thedesign. The Grand Prix winner that shone through was Word Block by the design unit
Alab. This is a flash card deck with a ring that also functions as a band to hold the cards

A proposal that widens the potentialof flash deck cards in the form of abeautiful product where Beautiful
Lifestyle is captured as a lifestylethat places importance in the joys oflearning.

together, enabling the cards to stack neatly like blocks. This design becomes a part ofbeautiful living both in use and when stored away, and thus almost unanimously won theaward. In addition, the Merit Awards went to the following 3 entries: the calendar"Hakanaku, utsukushiku" by Ms. Mio Ueda where the numbers are sewn with one longpiece of yarn and pulling the string below undoes the sewing, deleting the calendar
numbers one by one, enabling the user to pay attention to the passing of time; the embossed notebook by Mr. Takashi Kubo
where the ruled lines in the notebook are embossed to help the user to feel nature in the changing light; the acrylic ruler"Bubble Ruler" by Mr. Kei Tsukada where bubbles with beautiful organic shapes are graduated. After the final judging, theaward ceremony and a talk show by President Hidekuni Kuroda and external judges were held in the KOKUYO Hall. In afull hall, they candidly spoke of the reasons for the winning products and their views on "Beautiful Lifestyle" that have been
stretched through an exchange of opinions during judging.
Judges (* titles current as of the time the individual served as judge)
Kashiwa Sato (SAMURAI INC. Representative / Art Director, Creative Director)
Yasuhiro Suzuki (Artist)
Kinya Tagawa (takram design engineering Representative / Design Engineer）
Ryosuke Uehara (KIGI Representative / Art Director, Creative Director）
Yoshie Watanabe (KIGI / Art Director, Designer)
Akihiro Kuroda (KOKUYO Co., Ltd / Representative Director of the Board, Chairman)

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With Local Communities

Campus Art Award on 40th anniversary of the launch of Campus Notebooks
2015 marked the 40th anniversary of the launch of Campus Notebooks. As a "HAPPYCampus YEAR!", KOKUYO held various events and campaigns. One of which was theCampus Art Award, an art competition held jointly with the Yomiuri Teens Newspaper(issued by the publishing company The Yomiuri Shimbun) to increase awareness ofCampus Notebooks and to appeal to middle and high school students who are the mainusers of Campus Notebooks.
Advertisement Poster for Campus
Art Award

Theme: "My Sweet Home Town - local choices"
The theme for the artwork was "My Sweet Home Town - local choices". It incorporated the wish to create opportunities forthe youth of Japan's future to turn their attention to their local areas, to notice their attractiveness and to share that withothers. Middle and high school students across Japan submitted artworks that depicted local landscape, customs,
traditions, events, food, confectionary, etc.

Grand Prix artwork productized and a part of the sales donated to local community contribution
activities
More than 1,000 entries were submitted and the entries underwent an initial judging by
district. At the final judging, the judges were the Minister Shigeru Ishiba, the Minister incharge of Overcoming Population Decline and Vitalizing Local Economy in Japan; Mr.
Muneto Ashizawa, a popular radio personality-cum- comedian amongst teenagers; andMiss Mai Fukagawa, a member of Nogizaka46. They judges selected the winners for
the Grand Prix, the Yomiuri Teens Newspaper Award, the KOKUYO Award, and theDistrict Merit Awards (for Hokkaido and Tohoku, North Kanto, South Kanto, Chubu,
Kinki, Shikoku and Kyushu). The Grand Prix Award went to the artwork "Nemophila's
blue" by Miss Haruna Suzuki, a 3rd year student from Nagayama Junior High in Ibaraki
Prefecture. The artwork was made into the cover of a Campus Notebook and sold as alimited edition item on KOKUYO's official online shop "KOKUYO Showcase". A part ofGrand Prix Award "Nemophila's
blue" was made into the cover of aCampus Notebook.

the sales was donated to the Japan Foundation for Regional Art- Activities to support
the development of highly creative communities through the promotion of culture andthe arts. KOKUYO aims to familiarize middle and high school students with the
KOKUYO and Campus brands and intends to hold the Campus Art Award in 2016 as
well.
Presentation ceremony of thecertificate of commendation and the
productized notebook

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With Local Communities

Five years have passed since the Great East Japan Earthquake struck. In desiring to be of assistance to everyone in theaffected areas, we have continued to engage in reconstruction-aid activities, including initiatives to provide support tostudents and workers who represent the future of Tohoku.

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 by a Public Interest Incorporated Foundation to
help high school students orphaned by the earthquake disaster pursue their dreams ofhigher education (university, college, and vocational schooling). Since fiscal year 2012,
the company has continued to provide support as a corporate supporter. The fundsupports up to a maximum of 3 million yen per annum for enrolment and tuition fees at
no charge. Unlike standard scholarships, a distinctive feature of this fund is that it does
not stop at simply providing the money. Operated to provide children who sufferedpainful experiences because of the earthquake with a feeling of "I'm not alone", theyhold periodic events, interviews as well as interactions with corporate sponsors. In
March every year, a coming-of-age ceremony for students set to pursue higher
education and a commencement ceremony for graduating students set to join theworkforce upon completing their studies are held for them to talk about their aspirations
and aims for their future and to convey their gratitude to their supporters. KOKUYO
Tohoku Sales will continue to support these children's in their dreams of higher
education.

A group photo of scholars andsupporters

Introduction of support staff

Donation of letter sets to Fukushima Friends UK
KOKUYO Tohoku Sales provides letter sets (writing pads and envelopes) for a volunteer
initiative which helps to connect children in Fukushima Prefecture to children in the
faraway UK through writing. This initiative is run by the charity organization Fukushima
Friends UK and was started by Ms. Kumiko Akatsuka, a writer who was born inFukushima Prefecture and is residing in the UK. She hoped that by linking children in
Fukushima Prefecture to people around the world, they would be able to enjoy learning
about cultures and languages.
Children writing letters happily

Right after the earthquake, KOKUYO Tohoku Sales provided stationery to children andheld activities like decoration workshops in hope of cheering them up through writing and drawing. This resonated with Ms.
Akatsuka and friends who sent a letter requesting for donation of letter sets. This was the start of the sponsorship of lettersets.
The letter sets provided by KOKUYO are products that use the KOKUYO ledger paper and is based on concept thatimportant thoughts expressed through writing are conveyed like presents. Ms. Akatsuka sent us a letter commenting that"the letter set is beautiful and high quality. Words and things written on the letter seems to have more impact than usual. It
makes our day to think of the children in Fukushima experiencing the feel of the paper and writing conditions while putting
their words and thoughts into writing to their pen pals in the UK." At a glance, the letter pad may seem unsuitable forchildren, but it seems to be most suitable for children to write wholeheartedly and thoughtfully. At present, assisted by
English and Japanese supporters of Fukushima Friends UK and volunteer translators, approximately 200 people, mainly
pupils in similar grades at elementary school, have been exchanging letters. More than 2,000 letters have been exchangedin the 3.5 years the activity has been running.

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With Local Communities

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 hope 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 in order to enhance 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 through contributions to the community and to the environment. It ispresently the one of the biggest domestic notebook plants transmitting the spirit of technology and manufacturing from
Shiga Prefecture to KOKUYO Group paper-product plants around the world.
For these plant tours, the company established a ReEDEN exhibition corner to explain the company's environmental
activities in an easy-to-understand manner as well as a corner for them to examine production equipment and equipment
for accommodating the environment and to experience the company's focus on quality so as to inspire visitors and become
Japan's most fascinating notebook-producing plant. A safe route for 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 conductedwith a focus on making things exciting by administering an interactive quiz. Activities will be pursued in collaboration withthe local government in order to have plant tours seen as a tourism resource and promote revitalization of the community.

Signing of Comprehensive Partnership Agreement with Shiga Prefecture
To promote the Shiga and Lake Biwa brand, revitalize the region and improve services
to prefectural residents, KOKUYO signed a comprehensive partnership agreement with
Shiga Prefecture on July 15, 2015.
Partnership agreements have been signed on the items below and activities are
conducted with KOKUYO Product Shiga at the core.
(1) Matters relating to education and the development of children and youth(2) Matters relating to environmental conservation(3) Matters relating to the promotion of the Shiga and Lake Biwa brand(4) Matters relating to the promotion of tourism(5) Matters relating to the promotion and development of industries within the prefecture

KOKUYO Product Shiga's original
product sales corner at the
KOKUYO Haku 2015 held in Tokyo(6) Matters relating to supporting disabled people(7) Matters relating to supporting the active participation of women in the workplace(8) Other matters relating to the revitalization of the region and the improvement of service to residents

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Tying the environment, welfare, and the community together 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
Delivery using a plastic box instead

requesting the use of plastic boxes in place of cardboard boxes to deliver photocopierof a cardboard box
paper for daily use to approximately 150 cooperative workshops within Shiga Prefecture
where 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 entirely in the local community is in place.
The Eco-Lab Heart Shiga initiative is highly regarded in terms of uniqueness, sustainability and development and it won the
grand prize of the "13th Green Purchasing Award" in 2011. With the increase in participating corporations andorganizations, not only is there a reduction in rubbish, incomes of the disabled people working in the workshops can also be
improved through delivery of photocopier paper, other eco products and products made in the workshops.
To companies and organizations with offices in Shiga Prefecture, would you like to participate in the original CSR activitiesof Shiga Prefecture, the advanced prefecture in terms of environment and welfare?

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,
and to cultivate compassion and kindness in children by getting them to think about
things from the standpoint of the other party.
Experience-based learning is an approach whereby employees of the Public Relations
Department visit schools as instructors. Students are exposed to actual UD products
A lesson on UD is being given
and learn about the differences between such products and conventional products andthe 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.
* Relevant information：「UNIVERSAL DESIGN」

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 2011 as a cleanup activity for all areas of Osaka
undertaken to present a clean city to visitors to Osaka. The company participated in this activity once again 2015 incollaboration with the local government. On October 19, fifty people, including local volunteers, took part in this activity inspite of the early morning hour at which it was held. At various sites around the country, employees of the company haveparticipated in blood donation drives since 1980. In 2015, 91 employees donated blood on two different occasions when theJapanese Red Cross Osaka Blood Center visited the company.

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The ISU-1 Grand Prix is a two-hour endurance race where competitors
consisting of three-person teams treat office chairs like vehicles. As a street
revitalization event that gets both participants and spectators excited, theevent gains populartiy every year. The KOKUYO Group actively participates in
the ISU-1 Grand Prix held across Japan as part of our effort to help rejuvenate
local communities. The KOKUYO Furniture team participated in the Kyoto
Grand Prix, which was held as a World Tournament (in Kyotanabe City, Kyoto)
from 2015 on March 28, 2015 and came in at an impressive 2nd after 125
rounds, just 2 rounds short of the winning team. The teams from the Group

Participants competing in the
Isu-1 Grand Prix

companies also did well in the Okayama tournament (May 9, Kurashiki City, Okayama Prefecture), East Japan
tournament (July 19m Shinjo City, Yamagata Prefecture), Fukuyama tournament (September 5, Fukuyama City,
Hiroshima Prefecture) , Chitose tournament (September 13, Chitose City, Hokkaido) , and the Matsue
tournament (October 10, Matsue City, Shimane Prefecture).

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With Local Communities

The Job Study program was created in 2005 to address the early departure issue of newly hired college graduates and toprovide an opportunity for corporations and students to come together. KOKUYO played a central role in launching the Job
Study, being 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 human resources
personnel from leading companies in various industries. They meet to discuss what kindof seminar is truly useful for students and use the results to organize a seminarthemselves. When it was first launched in 2005, the issue of early departure for newly
hired college graduates, where 30% leave their employment within three years, was amajor issue. To address this issue and to provide an opportunity for corporations andstudents to come together, we have brought about the realization of mutual
A picture taken at the panel

communication where corporations and students can talk about the significance ofdiscussion of the seminarworking by planning a program on the concept of real opinions and hand-made. Since
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 2015, due to changes in employment schedules, there were issues in holding thecollaborative internships jointly offered by companies participating in the Job Study
Program that have been organized annually in previous years. However, the Job Study
Collaboration (Kansai/Kanto) was held. It is an event that was held in order to expand
student outlooks to encompass mid-sized and small to medium-sized companies and toencourage students to select companies not based on their names but on the basis of atrue concordance of values with personal values. This event consisted of panel
A picture taken at the Job Study
discussions held jointly by large companies participating in the Job Study Program andCollaboration (Kansai/Kanto)
local mid-sized and small to medium-sized companies, as well as round-tablediscussion programs where participants would 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 topresent the means of getting students to think with initiative. Feedback received from participating students included thefollowing: "It was great that we were able to hear company representatives speak so honestly about issues in a way thatwas very accessible to us," and "I learned about the different advantages associated with large companies and mid-sizedcompanies and the differences between the two."

The twelfth year of the Job Study Program is a year of reform
As of the end of 2015, the Job Study Program had amassed an eleven years of positive results. At the fourth Career
Education Awards, the Job Study Program received the Award for Encouragement for sharing philosophies regarding thebroad range of challenges students face just prior to entering the workforce by a wide variety of companies and flexibly
dealing with these challenges. However, numerous issues between students and companies are arising in part due toeconomic fluctuations and changes in the times during which students are being hired. Against this backdrop, the Job-Study
Program is asking the representatives of the personnel departments of twenty-five participating companies to shun thestatus 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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KOKUYO Group CSR Report 2016

Continuing from 2015, there will be more schedule changes in 2016. I feel thatthe number of new challenges facing students, corporations and universities
have increased. Precisely because of this, I believe that it will be great if Job
Study, which is planned and managed by fellow HR professionals, can match
this change and create a place where the issues faced by all 3 parties can be
resolved. While KOKUYO as a single company can only do so much on its
own, the twenty-five companies that comprise this program are committed to

Kazuyuki Takimoto
Personnel Department, Corporate

joining forces to create new value and opportunities that others cannot
provide.

Administraions

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KOKUYO Group CSR Report 2016

With Local Communities

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 4.8 million
children participated in the year 2011. In 2014, with the active use of social media,
students outside of India also participated, leading to a significant increase inparticipants. In 2015, the number of participants reached 6.48 million, of which morethan 400,000 were participants from overseas. The final judging was held in April andindividual awards and the Grand Prize Award for schools were given out. The GrandA famous Bollywood actor, Mr. Om
Prize is an award where the schools of the first prize winners will receive grant of Rs 50,
Puri, giving the award to the000/- for the improvement of the art infrastructure in the school and the renovation andnational contest winnerpurchase of equipment. This initiative is a first step towards the provision of a complete
environment for children to learn about art and through this initiative, we hope that children at the schools that won theawards will find this contest to be within their reach.

Camel Art Foundation
Camel Art Foundation (CAF), the philanthropic wing of KOKUYO Camlin Limited set up
in 1997, has contributed to the growth of art and culture in India through a spectrum ofactivities such as the art shows held every year in various regions to evaluate works ofyoung student and professional artists. These activities aim to promote art activities andprovide a platform to nurture budding artists, as well as help professional artists gain
popularity by holding exhibitions and thus raising the bar for India's art scene. Originallya regional contest, the Camlin Art Foundation Contest changed its system to become ahigher-level nationwide contest from 2015. In addition, the contest started a system thatenables online applications. In 2015, there were more than 6,000 submitted entries.
Entries are categorized into works by students who are learning art and professional
artists, and then sorted according to the art mediums - Oil, Water, Crayon, etc.
Participation is free and anyone who is over 18 years old can participate. Entries thatpass the judging will not only get the chance to be exhibited, cash awards are alsopresented to artists of award-winning works, with professional artists receiving Rs. 1 lac(approximately 170,000 yen) and students learning art receiving Rs. 50,000 (around85,000 yen). In addition, award winners are invited to art study tours in India andabroad. The Camel Art Foundation will continue to evolve and encompass not only
young and unrecognized talent but also patrons and professionals in the art arena, truly
painting India's tomorrow

72

Commemorative photo ofparticipating artists and KOKUYO
Camlin's executives

Professional artists and art students
working alongside to create art
according to the theme

KOKUYO Group CSR Report 2016

Challenge to draw on the World's Longest Canvas broke the Guinness Record
KOKUYO Camlin held the "Camel Art Day" on April 15, 2015 to coincide with the "WorldArt Day*1" during which an event was held to challenge the Guinness World Record forthe longest canvas to be painted. 3,500 children from various schools that are part of
the IES (Indian Education Society)*2 drew their thoughts on the theme of "Swacch
Bharat - Clean India" as advocated by Prime Minister Modi on a canvas that is 7.5km
long, and longer than the previous world record. After the event ended, judging by the
Guinness World Records confirmed that the record had been broken. KOKUYO Camlin
will continue to bring joy and happiness to children through art.
* 1 IAA (International Association of Art) designated April 15 as World Art Day to commemorate
Leonardo Da Vinci's birthday* 2 An Indian education institution established in 1912. It manages more than 60 schools under its
umbrella.

A large number of children happily
working on the world's longest
canvas to break the Guinness
RecordMr. Subhash Dandekar, Chairman
Emeritus of KOKUYO Camlin,
joining in to draw

Camlin Art & Craft Studio opened in KidZania Mumbai
Kidzania, a job-experience based theme park for children that is also well known inJapan, is expanding internationally. There is one in India in RCity, a popular shopping
mall in Mumbai. KOKUYO Camlin became the official sponsor for this Kidzania in 2015
and opened the Camlin Art & Craft Studio where children can develop their creativity
through art. In the opening event on June 13, children enjoyed themselves, participatingin creative activities using the crayons, colour pencils, markers and paints that are
KOKUYO Camlin's flagship products to create an original mask. At the start, the children
who participated were a little nervous but under the leadership of the art teacher, theyused their favourite type and colour of writing instruments and had fun making masks totheir heart's content. With the Camlin Art & Craft Studio as a base, KOKUYO Camlin
strives to convey the brand message "Let's have fun".

Opening signboard

Commemorative photo of thewelcome event

Environmental Conservation Activities
Scheduled to coincide with the World Environmental Day, KOKUYO Camlin holds a tree
planting event together with children on June 5 every year. In 2015, the tree planting
event was held at 6 factories across India. In addition, in the Pithoragarh district ofNorthern India, with the cooperation of the army and children, 100,000 trees wereplanted in 20 minutes, setting a new Limca Book record (Indian version of Guinness
Book of Records).

Carrying out the campaign online73

KOKUYO Group CSR Report 2016

Participants of the event

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KOKUYO Group CSR Report 2016

With Local Communities

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 initiatives focusing on education support activities with the aimof providing a place of education for the future of children.

Grassroots Support Activities -Gifts of Notebooks to Children Living in Underprivileged Area
To 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.
The Grassroots Gratuitous Cooperation is an activity aimed at creating opportunities
and the environment where children in China's disadvantaged areas can receive thesame education that children in cities receive. With the grants donated by a number ofsponsoring companies, the organization built school buildings and provided childrenChildren receiving Campus
Notebooks from their teacher

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 2015, 84,820
notebooks were donated to 150 schools. Since the start of these activities in 2006, KOKUYO has donated more than
530,000 notebooks to this cause in the last nine years.

Village teachers invited to Shanghai
On August 1, 2015, KOKUYO (Shanghai) Management participated in the "Developing
Village Teachers" program co-sponsored by institutions like the Cui Yongyuan
Foundation and the East China Normal University. Principal Wu Ji Yun and teacher Mr.
Wu Lu Lan from the Tong Guan Primary School in the town of Yandong in Liping
County, Guizhou province were invited to Shanghai for a day and showed around thecity. They visited the children's library in the Pudong area and strolled along the Bund.
They also toured a stationery shop that sells KOKUYO's stationery and the flagship
Visiting the stationery shop
showroom of KOKUYO Furniture (China). Both of them admired the dynamic cityscapeand looked very interested in the learning environment of the city's children. In addition, they were very surprised andimpressed by the focus on quality of KOKUYO's stationery and furniture. In the future, we hope to invite more teachers andstudents in rural areas to cities for such interactions.

Chasing big dreams with small notebooks! Holding classes on dreams and the world forchildren75

KOKUYO Group CSR Report 2016

In October 2015, six employees from the Shanghai, Beijing and Shenzhen offices of KOKUYO (Shanghai) Management,
KOKUYO Commerce (Shanghai) and KOKUYO Furniture (China) gathered together to visit Liufang Primary School in the
town of Mingkou in Leping City, Jiangxi and interacted with the children. The children gave a warm welcome to the
KOKUYO employees who visited from afar. The employees presented the school with picture books and sports equipment
and conducted a lesson on environmental protection and foreign culture. In addition, together with the children they createdoriginal notebooks on which they affixed their own photographs and drew their future dreams. The employees had a very
intense and meaningful time at the school.

At the presentation ceremony"My dream"
the children had wonderful dreams
of wanting to be teachers, chefs,
etc.

76

The employees managed to see
many joyful faces of the children.

KOKUYO Group CSR Report 2016

With Local Communities

In Vietnam, KOKUYO Vietnam Trading cooperates with other Japanese corporations and universities to conduct activities tosupport youth learning.

Study Abroad Support Campaign by Campus X ANA X Universities
In 2015, KOKUYO Vietnam Trading partnered with ANA (All Nippon Airways Co., Ltd)and 4 universities in Japan (Nagoya University, Sophia University, Kansai University andRitsumeikan Asia Pacific University) to hold a Study Abroad in Japan Support
Campaign.
Many talented young people in Vietnam who have the potential to be future leaders aim
to study abroad in overseas universities. However, compared to the number of students
wishing to go to Europe and America, there are not many students wanting to go to
Japan to study. One of the main reasons for this is the limitations to informationcollecting as the only way to get information on studying in Japan is the once-a-year
Study Abroad Fair and the universities' homepages. Japanese universities, on the other
hand, face the issue of not being unable to find a good way to reach out to talented
students in Vietnam even though they would like to do so. As such, KOKUYO which
wishes to be known as the company that supports learning in Vietnamese youth, ANA
which wishes to increase awareness of the company in students studying abroad withthe hope of students using them frequently in future, and the 4 above-mentioned
universities that would like to have talented students from Vietnam joint forces to convey
the attractiveness of Japanese universities to Vietnamese high school students and helda promotion to create opportunities for them to aspire to study in Japan.

Visiting the KOKUYO showroom inTokyo

At a social gathering

KOKUYO has been selling Campus Notebooks in Vietnam since 2010 and the notebooks are used by many students. In
the capital Hanoi, Campus Notebooks has a large market share and achieved more than 90% awareness in a brandawareness survey. During the study abroad campaign, introductory articles regarding the four universities and ANA wereprinted on the insides of the cover of Campus Notebooks which are used by students daily to increase students' awareness.
Furthermore, a free 1-week Japan tour was held in conjunction with sales of this notebook. 20 high school students withexcellent results who wish to study in Japan were selected and invited to visit the 4 university campuses and experience amock student life.
The selected high school students visited Japan between July 12 and 18. They visited the campuses of all four universities,
and deepened their understanding of the universities through campus tours and mock lectures, as well as interacted withmany people including current Vietnamese and Japanese students at the universities. During their stay, they managed toexperience real life as a student in Japan where possible, in the form of using used public transport, eating at the schoolcafeteria and staying in a student dormitory. After returning to Vietnam, the comments heard from participants included thefollowing: "I managed to learn more about Japan and make a lot of discoveries." "I'd definitely like to return to Japan to
study" KOKUYO is actively working to promote activities that links Vietnamese youth to Japan.

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KOKUYO Group CSR Report 2016

With the Global Environment
KOKUYO recognizes that solutions to global
environmental issues such as global
warming and deforestation are urgently
required. All our employees are putting
their heads together in search for solutions
to these problems. Furthermore, we haveintroduced an environment management
system throughout our entire company inorder to work in solidarity.

Environmental Management ・・・・・・・ P79
Global Warming Preventive・・・・・・・・ P83
Measures
Resource-saving andRecycling Measures

・・・・・・・・・・

P86

Compliance with the law and ・・・・・・ P88
the prevention of pollution
Developing Environmentally- ・・・・・・ P89
friendly Products and Services
Biodiversity/Promoting ・・・・・・・・・・ P92
Environmental Communications
Third-Party Veriﬁcation Report ・・・・・ P97

With the Global 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 2016

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

Prevention of global
warming

Cut CO2 emissions (vs. FY
1990)

Fiscal 2015
performance

Fiscal 2020
goals

Reduced by 8.1% (inJapan)

Reduce by
30% (inJapan)

Prevention of
globalwarming
Energy conservation

Cut energy consumption (vs.
FY 2010)

Reduced by 13.7%(unit energy

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

consumption)energyconsumption)

Resource

Resource-savingsaving andand recycling

recyclingmeasures

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

94.9%

100%

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

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KOKUYO Group CSR Report 2016

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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KOKUYO Group CSR Report 2016

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 2015, primary audits were conducted between July 1 and 31, secondary audits
were conducted between August 1 and 27, and third-party inspection was carried out between November 27 and December
4.

Internal audits

Third-party inspection (ISO 14001)

FY in which
conducted

2014

2015

Sites subject tomonitoring

69

72· Primary audits

54

57

FY in which conducted2014(periodic)

2015(updating)Sites subject to examination

19

29

0

0

Matters cited for improvement· Secondary audits

15

15· Minor points ofnonconformity

Matters cited

40

53· Improvement opportunities

23

31· Minor points ofnonconformity

96Strong points

00Good points

78· Corrections

31

47

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KOKUYO Group CSR Report 2016

With the Global Environment

We are developing an environmental management system with the goal of becoming an Asian company. In order to cut theamount of greenhouse gases significantly with a view to achieve a low-carbon society, we expanded the scope of ourreporting targets.

Summary for 2015
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 2015 totaled 25,945 tons, 319 tons（1.2%） less than in the previous year. Based on estimates, there wereemission reductions of 1,350 tons due to operational improvements and 220 tons due to equipment improvements.
Manufacturing operations and the closing and consolidating of facilities raised emissions by 820 tons. As a result, there wasan effective reduction in CO2 emissions of 1,570 tons from a combination of operational and equipment improvements.
Consequently, excluding the impact of production activities, emissions were down 4.6% from the previous year to allow us
to meet our goal of a 2.0% reduction.
Looking at sources of CO2 emissions, there was an increase of 680 tons at factories due to an increase in production.
However, as there was a decrease of 1,190 tons due to higher manufacturing efficiency and other improvements, factories
recorded a net decrease in emissions of about 510 tons. For distribution activities, although emissions increased by 170
tons because of a higher volume of operations, there was a reduction of 180 tons due to heightened measures to conserve
electricity and other energy use, resulting in a net decrease in emissions of 10 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 2015, our unit energy consumption was 5.3% less than in the previous year.

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Comparison of cases with a fixed electricity emission factor and cases with separate emission
factors for each electricity company and country
If the 2012 emission coefficients for each of the various countries on the greenhouse gas (GHG) protocol website madepublic by the World Business Council for Sustainable Development (WBCSD) and the World Resource Institute (WRI) are
adopted as the figures 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 2015, actual emission coefficients for eachelectricity company for 2013 and 2014), then the total rises by 7,227 tons to 33,172 tons.

Scope of Reporting
While 16 companies were included in the scope of CO2 emission reporting (reporting scope A *1 ) until 2011, allconsolidated subsidiaries came to be included in the scope of reporting starting in 2012 (for 2015, 31 companies; reporting
scope B *2 ). As a result, CO2 emissions totaled 43,890 tons (including 1,656 tons at non-consolidated sales companies).
The changes to the emission coefficient and the extension of CO2 emission reporting to the supply chain have resulted insignificant changes for the KOKUYO Group. Consequently, we believe that the medium-term goals for emissions will haveto be reexamined.
*1: A: KOKUYO Co., Ltd., 12 consolidated subsidiaries, and 3 affiliated companies*2: B: KOKUYO Co., Ltd., 20 consolidated subsidiaries, and 10 affiliated companies (KOKUYO S&T and KOKUYO Furniture were integrated
with KOKUYO Co., Ltd. in October 2015)* Relevant information: "Changes in CO2 emissions"

Measures for the prevention of global warming in our plants
A reduction of 970 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 220 tons in CO2 emissions was achieved by embracing energy-saving
equipment, including switching from LPG to LNG, adapting systems to enable theinstallation of inverters, and switching to LED lights. While an increase in production
resulted in an increase in CO2 emissions of 680 tons on a year-on-year basis, there was

Solar panels installed at Shiga
factorya net reduction of 510 tons in CO2 emissions (reduction of 60 tons domestically and a reduction of 450 tons overseas)
resulting from a reduction of 1,190 tons attributed to the above operational improvements and equipment improvements.

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 10 tons in CO2 emissions compared to thepreceding year. A reduction of 170 tons in CO2 emissions due to operational improvements attributed to the promotion of84

KOKUYO Group CSR Report 2016

energy-saving activities carried out on a day-to-day basis was achieved. In terms ofequipment improvements, a reduction of 10 tons in CO2 emissions was achieved thanks
to the introduction of energy-saving lighting fixtures and a review of the optimal
luminance of the distribution center. In operating an automated three-dimensional
warehouse, KOKUYO Logitem's Ina Distribution Center adopted an electricity demandmeter as part of efforts to reduce peak electricity consumption in response to tightdemand-and-supply conditions for electricity. While CO2 emissions increased by 170
tons due to an increased rate of operations in 2015, a net reduction of 10 tons in CO2emissions was achieved by way of a reduction of 180 tons due to operational
improvements and equipment improvements.

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

Measures for the prevention of global warming in Offices
Offices lowered CO2 emissions by 230 tons over the previous 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 activities
that encourage 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

Solar panels installed at the newwing of our Osaka officeactivities cut gasoline use by 10% compared to the previous year, which represents a
reduction in CO2 emissions of 170 tons. In 2015, the cool biz and warm biz campaigns were combined into a smart biz
campaign that was 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(CDP) and to manage and externally disclose Scope 3 (encompassing
production, shipping, business trips, commutation, and other categories)
emissions generated through supply chains that indirectly emit GHG has
been gaining momentum. While the KOKUYO Group has also engaged
in such actions in certain areas such as shipping, actions started to be

Emission volumes by scopetaken in 2014 in accordance with the Ministry of the Environment's Basic
Guidelines on Calculating Volumes of Greenhouse Gas Emissions
Generated through Supply Chains. The volume of GHG emissions forthe entire supply chain in year 2015 was 395,611 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 fromall cooperating plants, this percentage figure is expected to rise. Given that there are also problems in other categories,
improvements will be made from 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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KOKUYO Group CSR Report 2016

With the Global 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 2015
Improving the accuracy of data on waste materials
The volume of waste materials generated by KOKUYO Group business offices in 2015 including all consolidated
subsidiaries was 19,512 tons (including 256 tons at non-consolidated sales companies). This was an increase of 90 tons.
Of this amount, the increase in production at overseas factories led to an increase of approximately 70 tons. While
production rose by 5.5%, we managed to limit the increase in the volume of waste materials generated to 3.5% thanks inpart to improved yield. However, the third party verification pointed out modifications to the waste data at KOKUYO
Vietnam. As such, the recycling rate in 2015 was 96.8%, a decrease of 1.2% compared to the previous year.

Measures taken at the factory
The recycling rate in factories in 2015 was 95.2%. The KOKUYO Group has already achieved zero emissions in relation toindustrial waste materials from our own factories in Japan. The recycling rate for overseas factories in 2015 was 82.4%. We
are working to limit the discharge of waste materials and to increase recycling, while considering the different circumstances
relating to recycling in each country.

Measures taken by the logistics division
The recycling rate in 2015 for the logistics division was 98.6%. Cardboard, wooden pallets and other packaging materials
used for packing products in the logistics process are repaired and re-used. In 2015, 106 tons of cardboard and wooden
pallets were re-used. We strive to continue making efficient use of resources.

Treatment of waste materials at construction sites
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 year 2015, efforts weremade 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 4,900 tons of waste materials on
construction sites with a recycling rate of approximately 85%. Waste materials generated on construction sites are nothomogenous, thus there are many cases in which recycling is difficult due to the intermingling of various types of wastematerials in a given batch. Nevertheless, we will continue to properly dispose of waste materials in conjunction with theimplementation of controls on their generation and shall aim to achieve our medium- and long-term target of 100% for therate at which

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
86

KOKUYO Group CSR Report 2016

depending on their condition. In 2015, KOKUYO Logitem collected 1,400 tons of officedesks and chairs and other used products. 30 tons were reused and 730 tons weredismantled and sorted for recycling.

A desk being dismantled and sorted
for recycling/p>

87

KOKUYO Group CSR Report 2016

With the Global Environment

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

Summary of 201531 environmental laws and regulations are applicable to the KOKUYO Group within Japan. In response to the amendments
to the CFC emissions law in 2015, we conducted regular inspections thoroughly. In addition, we thorough looked into wastematerial management again. Although we found offices with some deficiencies in their contracts, manifests and storage
conditions, we dealt with them promptly. In KOKUYO Product Shiga, we underwent an on-site inspection by Shiga
Prefecture under the Water Pollution Control Law. Although issues relating to reports on the special facilities were identified,
we took steps to respond to it promptly. Apart from these, there were no major offenses.

Soil survey of the West Wing of the Osaka Office
With the West Wing of the KOKUYO Osaka Office (previous Osaka showroom) relocating to the Umeda showroom, wevoluntarily conducted a soil pollution survey in order to do a usability analysis. The soil pollution survey was conducted on
the first and second types of specified hazardous substances and the PCB of the third specified hazardous substanceregulated under the Soil Contamination Countermeasures Act. The results showed that fluorine and its compounds as wellas lead and its compounds were detected. At present, the land is covered with buildings and concrete so there is no risk of
the harmful substances being scattered or penetrating underground. When buildings are taken down in future, we willhandle it appropriately.

Soil pollution survey

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 paint and other materials.
The company is converting safety data sheets (SDS) for purchased paint and other items into a database in which warnings
for usage and references to related laws and regulations are included in order to enable required information to be checked
when needed. 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 andother substances at sites where paint and other items are used and by making warnings more visible for handlers at thetime that such substances are used.

Panels posted at the Shibayama
Plant

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KOKUYO Group CSR Report 2016

With the Global Environment

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

2015 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 stage 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 then. We strive to continue
to ensure that none can be found in the 2016 General Catalog.

Improving verifications
Verification of conformity to standards has been more thoroughly undertaken since 2012. As a result, we found that some ofour products do not conform to the Electrical Appliance and Material Safety Law and discovered that there were also
products with erroneous notation of the Eco Mark. We reported these errors promptly to the relevant authorities and tookcorrective action. 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 for reviewing 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 thatover-deliver to customers in accordance with the watchword: eco + creative.

Eco-Batsu mark89

KOKUYO Group CSR Report 2016

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
spectrometerscientific method. In responding to these global changes, we first set about specifying a hazards-based list of substances in2014 and in 2015, we carried out research based on the substance list in sequence, starting from highest-priority products.

FSC®-certified products
The Forest Stewardship Council® (FSC) is one of several third-party organizations operating aninternational forestry and woodlands certification program and aims to conserve the environment
found in forests and woodlands appropriately and promote the management of forests and woodlands
in a manner that is socially beneficial for local communities and economically sustainable. COC (shortfor "chain-of-custody") certification constitutes the certification of the management of the processes ofprocessing and logistics. In the KOKUYO Group, KOKUYO, Kaunet and KOKUYO Product Shiga
have obtained FSC® and COC certification and are selling copier paper, notebooks, and other
FSC-certified products.

Printer paper

Reeds-based photocopier paper

FUBI UU chair

Protocol counters made with timber from forest thinning
Protocol counters were made 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 that strength will not be affected by wood quality
By using a steel frame, the strength of the counters is guaranteed and thus any changes
to layouts can be accommodated. The top board takes into account the ease of use andis selected from timber from forest thinning and melamine board.
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 space90

KOKUYO Group CSR Report 2016

In March 2015, protocol counters were delivered to a new government office in Shiwa-cho, Shiwa-gun, Iwate
Prefecture. This new office is the largest large-scale wooden structure in Japan that uses larch from Shiwa.
KOKUYO Tohoku Sales provided a complete service which included suggesting layouts, selecting products andsupplying products from the reception counters to furniture for the assembly hall. The protocol counters
recommended for the reception counters also used larch from Shiwa, and evokes a sense of an entrance filledwith wood. KOKUYO normally recommends Hinoki if coniferous trees are used. However, KOKUYO took on thechallenge and made the protocol counter with larch for the first time through steps that included applying asealer onto the surface of the top board to stop tar, one of the characteristics of larch. KOKUYO Group
responded to the local government's request to use local wood, while fully utilizing its knowledge on timber fromforest thinning grown around the country and its universal design know-how to produce and deliver productsthat are environmentally friendly, functional, and easy to use for all visitors to the office.

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With the Global 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 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 while taking into consideration the legality,transparency, and sustainability of the Group's procurement of materials.

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.

Use of Domestic and Local Materials
Forests, which accounts for approximately 67% of Japan's land area, play a role inretaining water (usually referred to as soil and sand outflow prevention and watershed
protection) and in absorbing CO2, etc. Forests are also renewable resources, and 40%of which are man-made. However, many of the man-made forests are unable to makethe most of the above-mentioned multiple functions that forests offer as maintenancesuch as thinning is done too late. KOKUYO worked to develop furniture from timberfrom thinning since 1998 and starting selling them from 2000. We believe that we canincrease the demand for new timber through the active use of domestic timber (timber

BS+ desk systemfrom thinning) and support the realization of a sustainable society where we live in harmony with forests.

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 endeavor 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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KOKUYO Group CSR Report 2016

KOKUYO Group CSR Report 2015 won the Award of excellence at the 19th
Environmental Communication Awards hosted by the Ministry of theEnvironment and the Global Environmental Forum. The KOKUYO Group
received the Merit Award at the 6th, 7th and 13th Awards, so this award would
be 4th award from the Environmental Communication Award that the Group
received.

Status of the use of wood materials
Approximately 4,700 tons of wood materials were used by KOKUYO Furniture in year 2015 to make products. This figure isequivalent to 7 percent of all materials used for production (excluding packaging). In breaking down these wood materials,
19 percent consists of solid wood, laminated wood, and other wood materials which are made with raw lumber while 81
percent consists of wood materials which are not made with raw lumber, such as thinned wood, waste wood, unusedmaterials 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 woodmaterials under the Green Purchasing Act. We also endeavor to ascertain the types of trees corresponding to woodmaterials which are made with raw lumber pursuant to JOIFA's guidelines on the written declarations that are made ofwood.

Study on the actual usage of wood
KOKUYO studies the tree species, amount used and the country/ regions of origin of the wood-based materials used in its
furniture products every year. However, it is hard to determine the country of origin for commercial components and similar
items. We will continue to work towards obtaining the information in order to use sustainable resources.

Tree Species

Shape of wood

Amount used（converted to m3）

Ayous

Wood veneer

3.4

Cameroon

Kapur

Solid wood

58.8

Malaysia, Indonesia

Oak

Solid wood

6.2

RussiaBeech

Solid wood

71.5

Germany, France, Croatia

Hinoki

Solid wood

2.9

Japan

PoplarSolid wood

13.6

America, Canada

White Oak

Solid wood

0.8

America, Canada

Maple

Solid wood

0.1

CanadaMempisang

Solid wood

5.3

Indonesia

Laminated wood

660.2

Malaysia, Indonesia, Philippines, France

Lauan

93

Country/region of

KOKUYO Group CSR Report 2016

Rubberwood
OthersSolid wood

63.8

Thailand, Malaysia

Laminated wood

5.3

China

Total

892.0

* Information from suppliers have been included. Wood materials such as MDF that do not use raw lumber as materials have been excluded.

* Only tree species with specified country/region of origin are shown.

Yui-no-Mori ProjectBeginning 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 10th year of operations in 2015.

Periodic monitoring the effects of thinning
The visualization of the effects of thinning is essential for carrying out forestconservation activities. In order to monitor the effects of these activities over the longrun, 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 9th time in October 2015. As part of this survey, a vegetation survey is ongoingat two specific sites. For this survey, the types of vegetation and extent of coverage are
Vegetation survey being conductedexamined for each of the following categories: tall trees, low trees and shrubs, andherbaceous plants. The most recent survey revealed a number of species similar to the previous year from 56 to 58 at onesite and from 61 to 56 at the other site. In the herbaceous layer, the number of species confirmed at one site were 15 and
17. We learnt that the species of plants differ according to the condition of the under layer.
* Relevant information:report by Shimanto High school students

Tours for fully-fledged certified employees
Over 2 days on August 29 and 30, a Yui no Mori experience tour to commemorate employees' fully-fledged certification washeld for employees in their 4th year at the company who had cleared certain requirements and taken their fully-fledged
certification. Beginning in 2008, this was the 8th time the tour was held. Through various activities such as surveying thewater quality of Shimanto, commemorative tree planting and gathering with the local Shimanto Forest Cooperative and the
Shimanto High School, the tour aimed to improve employees' environmental awareness and increase their interest in
KOKUYO's environmental activities.

Surveying water quality

Planting of chestnut trees

Presentation by Shimanto HighSchool students

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 24 items
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KOKUYO Group CSR Report 2016

as of 2015. In order to promote understanding of its activities and increase the number of supporters, Kaunet implemented
a framework for donating customer points for the thinning of Yui-no-Mori in 2008. This year alone, the company hasreceived approximately 100 applications for the submission of donations. The Yui-no-Mori 1% Donation Project wascommenced 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 received the FSC(Forest Stewardship Council)'s forest management certification since 2007 and on August 31 and on September 1, 2015
cleared their audit without any issues. It has approximately 5,500 hectares in terms of applicable area and to 1,300 hectares
in terms of total thinned forest area in 2015. In addition, the company participated in the Collaborative Reforestation Project
by Kōchi Prefecture since 2007 and received an absorption certificate for 6,717 tons of CO2. As such, with the support ofmany people, the Yui-no-Mori has expanded and will hopefully continue expanding.

Kaunet's Yui no Mori Series seal
storage for desk

Undergoing FSC Audit

Absorption certificate

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. Launched in November 2007 to promote the use of reeds and to make the state of the reeds widely known, theReEDEN Project was in its 9th year in 2015. Activities have been steadily increasing in line with the desire of KOKUYO tospearhead 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 developed to date and its developmental capabilities with a paper-production
company, KOKUYO Product Shiga has been using reeds to produce copier paper, notebooks, and other industrial products
and selling them at a price suitable for the market under the ReEDEN Series brand name. In addition, in an effort to createa market that contributes to the environment through the use of reeds, business cards made with 100 percent reed pulp,
reed-based brush pens, and other high value-added products have been developed. Other efforts included the release of
Lake Biwa stationery series as locally made stationery with themes relating to Lake Biwa, Shiga tours and local specialties,
and the joint development by Lake Biwa Museum in Shiga Prefecture and Campus Notes. A portion of sales is donated to a
local environmental organization for activities dedicated to the conservation of reeds.
* Relevant information: "Reed Calligraphy pen recognized as one of The Wonder500"

ReEDEN series

Lake Biwa stationery

Fish of Shiga reed-based notebook

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KOKUYO Group CSR Report 2016

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 116 supporting entities. The primary activity of this network entails theconservation of reed beds that fulfill an important role for the Lake Biwa ecosystem andCutting reeds with network

water environment. The activity that was initially staffed by several KOKUYO Productmembers
Shiga employees has expanded significantly to one where members of local
environmental groups and representatives of network members gather in the hundreds to participate in now. In addition,
activities such as a fishing contest to remove external fishes from Lake Biwa and a "reed bed observation on canoe event"to observe the reed beds where they cut and take reeds from the surface of the lake are held. These activities shared along
through network communications alongside topics relating to local environmental by specialists and introductions ofenvironmental activities of member companies to increase camaraderie. We will continue to cherish such links and aim toengage in activities that increase environmental awareness in a way that is fun and enjoyable while getting the members'families involved.

(February 2015)
The Kaueco Grand Prix is a system to recognize products and services.
Commissioned by the Shiga Prefecture, the Shiga Green Purchasing
Network, which is a general incorporated association, gathers a wide range ofenvironmentally-friendly products and services produced in Shiga Prefecture.
Products and services selected by a screening board are then introduced on
the website and media in the prefecture and the products and services that received huge support in popular
vote are awarded.
(August 2015)
The company award for the development of environmentally aware people isheld by the Ministry of Environment and Environmental Consortium for
Leadership Development. It is a system to award companies that takeexcellent steps to develop and promote environmental talents to lead theenvironmental conservation and greening of the society and economy so as toachieve corporate operations that are in harmony with the global environment.

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KOKUYO Group CSR Report 2016

With the Global 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-one 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 four sites in Japan-KOKUYO Shiga Plant and Mie Plant (plant), KOKUYO Logitem Shinchiba DC (logistics),
and North Kanto Sales head office (office) - and one overseas site-KOKUYO Vietnam (plant). This process yielded anumber of matters that were pointed out: a total of 11 assessable points, 12 opportunities for amelioration, 33 requests formodifications, and 26 requests for clarification. The requests for modification and clarification were dealt with during theverification period. For the verification of scope 3 emissions, we received findings relating to the elaboration of data on thematerials invested in manufacturing and improvement of data accuracy at KOKUYO factories overseas. Based on thesematters that were pointed out to us, we endeavor to enhance the disclosure of information encompassing the entire supply
chain and improve the precision of such information.

Shibayama Plant

Mie Plant／effluent treatment facility

97

Mie Plant

KOKUYO Group CSR Report 2016

CSR Management

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

IssuesPage
Top Message
Basic Concepts of CSR
KOKUYO CSR Charter
KOKUYO Group Code of Conduct

Organizational
governance

Anniversary month of KOKUYO's founding
Issue 1: Organizational governanceLabor Practices/Safety and HealthDialogue with Customers
Responsibilities to shareholders
Awards and Other Recognition Received from
Survey results for CSR Report 2015
CSR Data: GovernanceTop Message

Human Rights

Issue 1: Due diligence
Issue 2: Human rights risk situations
Issue 3: Avoidance of complicity
Issue 4: Resolving grievances
Issue 5: Issues relating todiscrimination and vulnerable
groupsIssue 6: Civil and political rights
Issue 7: Economic, social, andcultural rights
Issue 8: Fundamental principles andrights at work

Basic Concepts of CSR
KOKUYO CSR Charter
KOKUYO Group Code of Conduct
Human Resource Development Program
Basic Framework for Diversity
Support for Active Participation of Diverse Human
Resources
KOKUYO Group Basic Procurement Policy
Initiatives in China
Initiatives in India
Initiatives in Vietnam
CSR Data: Society
KOKUYO Group Code of Conduct

Labor
practices

Human Resource Development Program

Issue 1: Employment andemployment relationships
Issue 2: Conditions of work andsocial protection
Issue 3: Social dialogue
Issue 4: Health and safety at work
Issue 5: Human resource
development and training in theworkplace

Personnel System
Basic Framework for Diversity
Achieving a Good Work/Life Balance
Support for Active Participation of Diverse Human
Resources
Labor Practices/Safety and Health
Healthy Living and Mental HealthCommunicating with Employees
CSR Data: Society

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KOKUYO Group CSR Report 2016

KOKUYO CSR Charter
KOKUYO Group Code of Conduct
KOKUYO Group Basic Procurement Policy
Initiatives in India
Environmental Management
Global Warming Preventive Measures

Environment

Issue 1: Prevention of pollution
Issue 2: Sustainable resource use
Issue 3: Climate change mitigation
and adaptation
Issue 4: Protection of theenvironment, biodiversity, andrestoration of natural habitats

Resource-Saving and Recycling Measures
Compliance with Laws and Regulations and Preventing
Pollution
Developing Environmentally Friendly Products andServices
Taking into Account Biodiversity and Promoting
Environmental Communications
Third-Party Verification Reports
Environmental Performance Data
Reports by Business Site
Yui-no-Mori
Eco-Batsu Initiatives

Fairbusinesspractices

Issue 1: Anti-corruption
Issue 2: Responsible politicalinvolvement
Issue 3: Fair competition
Issue 4: Promoting social
responsibility in the value chain
Issue 5: Respect for property rights

ConsumerissuesIssue 1: Fair marketing, factual andunbiased information, and faircontractual practices
Issue 2: Protecting consumers'
health and safety
Issue 3: Sustainable consumption
Issue 4: Consumer service andsupport and resolution of complaint
Issue 5: Consumer data protection
and privacy
Issue 6: Access to essential
services
Issue 7: Education and awareness

Basic Concepts of CSR
KOKUYO CSR Charter
KOKUYO Group Code of Conduct
KOKUYO Group Basic Procurement Policy

KOKUYO CSR Charter
Views Regarding Quality Assurance at the Stationery
business
Views Regarding Quality Assurance at the Furniturebusiness
Kaunet's View on Quality
Customer Support and Services
A System for Utilizing Feedback from Customers
Dialogue with Customers
Eco-Batsu Initiatives
Survey results for CSR Report 2015

KOKUYO CSR Charter

Community
involvement
anddevelopment

KOKUYO Group Code of Conduct

Issue 1: Community involvement
Issue 2: Education and culture
Issue 3: Employment creation andskills development
Issue 4: Technology development
and access
Issue 5: Wealth and income creation
Issue 6: Health
Issue 7: Social investments

KOKUYO Design Awards
Campus Art Award
The Future of Tohoku
Initiatives in China
Initiatives in India
Initiatives in Vietnam
Contribution Activities Deeply Rooted in Regional
Communities
Taking into Account Biodiversity and Promoting

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KOKUYO Group CSR Report 2016

Third-Party Assessments

List of awards and other recognition received from outside the KOKUYO Group
CompanyAwardsSponsor

Date

World Consulting andResearch Corporation

January 2015

Selected for the "Safe and secure
construction companies" commendation

Shanghai Chang Ning
District Government

January 2015

Received the Grand Prize at the firstGreen Purchasing

Kaueco Grand Prix

Network

Won the 24th Japanese Stationery of
the Year Award for Excellence in the
Design category

Reed Exhibitions Japan
Ltd

July 2015

KOKUYO

Received the 9th Kids Design Award

NPO (certified by the
Cabinet Office) Kids
Design Association

August 2015

KOKUYO

Received 2015 Good Design Awards

Japan Institute of Design

September

Promotion

2015

Ministry of theSeptember

Environment

2015

Recognized as one of Asia's Most
KOKUYO Camlin

KOKUYO Design
Consultants (Shanghai )Co., Ltd.
KOKUYO Product Shiga

KOKUYOKOKUYO Product Shiga

KOKUYO

Promising Brands 2014 in thestationery category

Received honorable mention for the2014 company award for thedevelopment of environmentally-aware
peopleReceived an innovation award in theuser category at the 9th ASPIC CloudAward 2015

100

March 2015

NPO ASP.SaaS-Cloud
Consortium

October 2015

KOKUYO Group CSR Report 2016

Third-Party Assessments

The KOKUYO Group conducted an online survey to gather feedback from a wide range of people from both within andoutside of the company in order to improve on our activities and reports. In appreciation for everyone's cooperation, we
hereby present the survey results for the CSR Report 2015.

Attribute of the respondents

Survey results

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KOKUYO Group CSR Report 2016

Opinions and thoughts of the KOKUYO GroupThe KOKUYO Group received a lot of opinions and thoughts from everyone on our CSR initiatives. We strive to use themas a reference for our future initiatives, while sharing some of the representative comments we received here.

Messages of Support
The part on the pen case in "Casting Customers' Feedback into Shape" is great.
Opinions
andthoughts

Ourcomments

Opinions
andthoughts(Male, 20s, customer)
It is important for customer feedback to be linked directly to improvements in quality.
(Female, 30s, employee)
Thank you for your feedback. We introduced the example of the pen case NeoCritz in the previous
fiscal year. This year, the example we presented of the product made in response to customers'
feedback is the Hakadori Protective Film for tack index. The KOKUYO Group will continue to work tocreate value so as to resolve issues our customers face.

As paper is used very often of all stationeries, I think your service that considers the resources andenvironment is great.
(Female, 40s, customer)
I now understand the importance of forest thinning. I would like to find out more.
(Male, 40s, customer)

Ourcomments

The KOKUYO Shimanto Yui-no-Mori project is in its 10th year in 2015 and the ReEDEN project is also
in its 9th year. The KOKUYO Group recognizes the role forests play in global warming and biodiversity
and is actively promoting environmental conservation activities.

Suggestions for improvement
Opinions
andthoughts

It is difficult to find information on the online version. Wouldn't it be better to have PDF in easy-to-accesslocations?
(Female, 30s, student)

Ourcomments

Thank you for pointing that out to us. We have renewed the layout of the online version this year. For
easier access, we made improvements by using PDF download banners, links by categories, etc.

Opinions
andthoughts

In addition to the PR to inform us of Yui-no-Mori activities (on other sites as well), I hope that you will
promote activities that general users can participate in too.
(Male, 40s, sole proprietor)

Ourcomments

Thank you for your valuable opinion. We will use it to improve our Yui-no-Mori activities. The KOKUYOGroup is actively engaging in activities to revitalise the area and we have held various activities
whereby general customers can participate in too. For example, KOKUYO Product Shiga Co., Ltd, themother factory of Campus Notes, has started running factory tours for general customers since May
2014. From mid-July to November 2015, they also held a "1st anniversary special commemorative
project" factory tour.

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KOKUYO Group CSR Report 2016

Editorial Policy
Every 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’s social responsibilities so as to maintain good communication
with diverse stakeholders. There are several reporting tools to facilitate the reading and visualization of the report

CSR Reporting Tools
Website for CSR and Environmental Management
The website contains a comprehensive reportof the Group's overall activities. Since 2014,
new features have been added to enhance
the retrieval performance of the top page,
including recommended articles by types of
stakeholders, search by keywords, and thetable of contents categorized by the core
subjects of ISO 26000 guidelines.

http://www.kokuyo.co.jp/csr/

Yui no Mori website

S h i m a n to R i ve r i n Ko ch i Pre fe c t u re isconsidered Japan's last clear stream. Aroundits river basin lies a beautiful forest whereleaves sway gently. The forest is called "Yui noMori". With this forest as its stage, KOKUYO is
taking steps to deal with global environmental
issues.

http://www.kokuyo.co.jp/csr/yui/

Digest Version

It of fers a digest of the KOKUYO Group's
activities in 2015. Detailed information canb e fo u n d o n th e C SR a n d e nviro n m e ntal
management website.

This CSR Report is printed and bound by KOKUYO K Heart, a special
subsidiary that promotes the employment of disabled persons.
A portion of the cost of paper used inthis CSR report is donated to biologicaldiversity conservation activities.
The cover page of this CSR Report uses
paper with 30% reed pulp from theenvironmentally-friendly ReEDEN paper
product series which uses reeds from
Lake Biwa and Yodo River.

KOKUYO Group CSR Report 2016103

Published by

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

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

201605A05KH

2016-080