KO K U YO G r o u p

CSR Report

2014
Detailed Version

Japan

India

China

VietnamEditorial Policy
Each year, the KOKUYO Group publishes a CSR Report to provide our stakeholders with the Group's efforts to realize asustainable society, along with intelligible information concerning its social responsibilities to maintain good communication
with diverse stakeholders. There are several reporting tools to facilitate the reading and visualization of the report. The
special feature articles not only cover the approaches and devotions of top management in pursuit of creating new value
for those who learn and work, but also the messages from employees who bear each function of the value chain.

Period Covered

CSR Reporting Tools
A Website for CSR andEnvironmental Management

CSR Report:
Detailed Version in PDF files

This report focuses on activities carried out from January
1, 2013, to December 31, 2013, but also includes some
information about the most recent activities.

KO K U YO G r o u p

CSR Report

2014

Scope of the Report

Detailed Version

The KOKUYO Group refers to KOKUYO Co., Ltd., and
Japan

India

China

its domestic and overseas Group companies, comprising

Vietnam25 consolidated subsidiaries, except certain activities
implemented by other subsidiaries and affiliates.
The website contains a comprehensive

The information disclosed on thereport of the Group's overall activities.

website for CSR and environmental

Guidelines Used As Reference

http://www.kokuyo.com/en/csr/

management is published annually・ ISO 26000

in PDF files.

・ Japanese Ministry of the Environment Environmental Reporting
Guidelines 2012

CSR Report:
Data Collection in PDF

・ GRI (Global Reporting Initiative) Sustainability Reporting
Guidelines 3.1 Edition

Data related to environment, society
and governance is published annually

Next Publicationin PDF files.

April 2015 (TBD)

Outline of the KOKUYO GroupThe KOKUYO Group practices an axial business model centered on the stationary business segment, which makes andsells stationery and office supplies; the furniture business segment, which makes and sells furniture for offices and public
spaces and handles office space configuration; and the mail-order and retail business segment, which is engaged in the
mail-order sales of office supplies and the sale of interiors and household goods.
Establishment： October 2, 1905

Registered capital ： 15.8 billion Japanese yen
Representative： Akihiro Kuroda

Number of consolidated subsidiaries ： 24
： 6,399 (consolidated) *As of the end of December 2013

Number of employees

Consolidated Net Sales

Group Operating Profit(Unit: JPY 1 million)(Unit: JPY 1 million)

400,000

10,000288,083

300,000

200,000

100,000

01： 6-1-1 Oimazato-minami, Higashinari-ku, Osaka-shi, Osaka

Headquarters address

275,821266,725
261,873

2009
Dec.

2010
Dec.

Stationery Business

28.6％

8,000

2011
Dec.

2,000

2012 2013
Dec.
Dec.

0

Furniture
Business

36.3％

6,426

6,000
4,000

260,004

Composition of Consolidated Net Sales

579
2009
Dec.

3,282
2010
Dec.

4,072
2011
Dec.

4,852

2012 2013
Dec.
Dec.

Mail-order& RetailBusiness

35.1 ％(January 1 through December 31, 2013)

Contents

Corporate Philosophy

Enrich the World through Our Products

KOKUYO's CSR Charter
Grounded in the founding corporate philosophy of “Enrich the World throughOur Products” the KOKUYO Group conducts business that is necessary forsociety, while remaining profitable and honest in its business practices.
In addition to complying with laws and regulations, we seek to maintaincontinuity 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.
For Our Customers
1. Without being satisfied with the present conditions, we continue
to improve the safety and quality of our entire product line andservices.
2. Strive to continually innovate society through our business
operations by developing new products and services.
For Regional Communities
1. Strive to be a trusted 'corporate citizen' on both regional andnational levels via proactive interaction and planning with
regional communities, while respecting regional culture andcustoms and encouraging their advancement.
For Environmental Conservation
1. Concentrate the wisdom of each of our employees, and alignthe actions of our entire company in order to assist in reachingsolutions for the common environmental problems facing theworld today.
2. By developing Eco Products, we strive to decrease theenvironmental 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 and environments, anddecrease society's overall burden on the environment.
Corporate Activities
1. Conduct transparent, just, and free competition and business
transactions while keeping sound and correct relations with
politicians and governmental bodies.
2. In order to become a trusted company, we strive for business
partner relations that are consistently fair and built upon afoundation of reciprocal cooperation, allowing for mutual
growth.
3. Recognize our responsibility to increase our corporate value forstockholders, and maintain a corporate management style thatearns the trust of society through its transparency and virtue.
Respect for Human Rights
1. Respect the human rights of all individuals involved with oraffected by all of our corporate activities. We support work
environments free from discrimination, and do not approve ofchild labor or forced labor practices.
2. Strive to accept each and every employee's individual
character and personal values, and become a company where
many different human resources can fully express their abilities
and develop themselves.

1 Editorial Policy

Outline of the KOKUYO Group

3 TOP Dialogue

A Company that Contributes to the
Enrichment of the Lives of People
in Asia

8 Introduction of the KOKUYO Group
15 Special Report:

Pursuit Values to the Limits
for Learners and Workers

・ Top Interview
・ For Learners
・ For Workers

25 CSR Management
41 With Customers
64 With Employees
87 With Business Partners
93 With Stakeholders
95 With Local Communities
115 With the Global Environment
133 ISO26000 Table
136 Third-Party Assessments

KOKUYO Group CSR Report 2014

2

TOP Dialogue

The Origin for the Creation of Value that Has Been Handed Down Since the Inception of theCompany Via the thorough Commitment to each Task and the Pursuit of Excellence in Every
Ordinary Task.
KurodaKOKUYO's founding spirit is the Business of kasu. The word means that it makes good business sense tosincerely commit to a troublesome, small potato-like (kasu) task that no one wants to do and bring it to the level
where it becomes essential for the world. This is the founder's business spirit. Our company will celebrate its
110th anniversary next year. Through these years, the business spirit has been passed down in our company
and served as the driving force for business. Unicharm upholds “the three DNAs” as core corporate values.

Takahara

In my view, the strongest organization is a momotaro (a popular hero from Japanese folklore) team that wipes
out ogres while sucking on a piece of Kintaro candy (traditional cylinder-shaped candy: no matter how thecylinder-shaped candy is cut, Kintaro's face appears). The Kintaro candy represents a set of values shared
among our employees while the momotaro team symbolizes an organizational operation system based on theright-person-in-the-right-place principle. At Unicharm, the Kintaro candy to be passed on to future generations
is called “the three DNAs” (changing values, find reason within ourselves, maintain our No. 1 position throughcontinued and dedicated service).
Simply put, changing values means to generate new values by continuing to change every day without settlingfor the status quo. Find reason within ourselves means that one can continue growing if he/she reflects upon
him/herself all the time in a humble manner and listens to others' views. Maintain our No. 1 position throughcontinued and dedicated service means to develop an altruistic attitude. While our founder has left many otherlessons to us, we have condensed the essence of his lessons into the three DNAs. None of the people withdifferent values or people of different ages or none of the countries in the world would disagree with the threeprinciples. Anyone who works at Unicharm must inherit, practice, and embody them.

Kuroda“Maintain our No. 1 position through continued and dedicated service” has something in common withKOKUYO's business of kasu. Our second president launched the furniture business and said that the businessof kasu means to leave nothing undone. He said, “Thorough commitment to each task” because thoroughness
was his life's motto. He said that we should do all we can do and leave nothing undone, all the more so fortroublesome, tiring tasks. He believed that it is in such tasks that we find unmet or new value for customers.

Takahara

I empathize with what you just said. Our company puts it in another way, that is, the thorough practice ofordinary tasks leads to something extraordinary. This value is exactly the same as your company's and meansthat repeated practice gives rise to evolution. If we keep doing the same thing, we can achieve a sudden
breakthrough like finally climbing up a flight of stairs. However, in reality, it is not easy to do. Persons who
produce products grow tired of doing the same thing faster than customers and tend to want to start something
different.

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KOKUYO Group CSR Repor t 2014

KurodaYes, I know. When a new product does not sell well, employees stop trying
by attributing the cause of dull sales to changes in the needs of customers
or to strong competitors. As shown by one of the three DNAs of yourcompany, the cause inhibiting continuous effort lies in us.

Takahara

You are right. Until a chemical change occurs, a manager needs to be patient and encourage employees tocontinue their efforts. A Japanese proverb says, “Three years on a cold stone will make the stone warm,” andso a significant change or the understanding of the true nature of the problem requires three years of patience.
Based on this understanding, we have recently made the span of personnel changes a little longer than before.

KurodaTo mark the 50th anniversary, our founder put his ideas into the KOKUYO Creed. One phrase that represents
the essence of the Creed is “integrity not in words but in action.” In an effort to encourage all employees,
including those overseas, to gain a deep understanding of the essence and put it into practice, we redefined it
last year as the Guiding Principle: Act with Integrity (share the mission and seek true customer value) x Take
Charge (take on challenges and grow with others) x Pursuit of Excellence (pursue value to the limits andover-deliver). We believe that if each employee practices the Guiding Principle, it will generate a chain of trust,leading to the generation of business power unique to KOKUYO.

Employees' Realization of Growth and Enrichment Are the Source of the Development of
Human Resources
KurodaThe development of global human resources is our urgent issue for the further development of KOKUYO in
Asia. I understand that Unicharm is one of the companies that entered Asia early and has since developed as a
global company. How do you address the development of human resources that enables continuous growth?

Takahara

When we began global expansion, I defined a global company based noton the number of countries where we do business or the percentage of
foreign employees, but as “a company that can do business in any country
or region based on a shared management model, a shared business style,and shared values.” To that end, values, the guiding principles, andmanagement method, which should be shared, were spelled out, and put
together as the Unicharm Way in a binder of bible size. The manual wastranslated into different languages and distributed to all employees aroundthe world, who are required to carry it with them at all times.

KurodaThe tool is meant to instill Unicharmism in every employee.

Takahara

Naturally, the penetration rate varies from country to country. I think that the most important factor required tonurture and retain people in an organization is not salary or position, but a solid sense that one is growing
through work. The distribution of the human resources of a company is in the form of a pyramid with 20% in theupper section, 60% in the middle, the largest section, and 20%, who need more effort, in the lower section.
Since the strength of a company is the total area of the pyramid, the expansion of the upper triangle does nothave a significant impact on overall company strength. Actually, the middle (60%) and lower (20%) sections
have greater potential for growth and constitute critical areas for the growth of the company. The developmentof human resources at Unicharm, therefore, focuses on the development of ordinary employees and those whohave difficulty reaching their full potential.

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KOKUYO Group CSR Repor t 2014

KurodaYou mean you also focus on the development of the bottom 20% of employees. I can tell that you are preparedto nurture all employees as a manager. However, training each employee to fulfill his/her potential is a toughtask.

Takahara

Yes, it is. Specifically, we use our unique business management technique called the SAPS Management
Model* for our human resources development, which centers on OJT. The system is where one PDCA (plan,do, check, act) cycle is implemented and completed each week under the leadership of a superior to have
employees acquire the behavior.

Takahara

When coaching someone, we often just say the goal instead of issuing instructions on how to achieve it. In
baseball, for example, a manager would just say, “Hit a homerun!” If a player could have hit a homerun, hewould have done so. In our case, when a sales representative is having difficulty getting orders from clients, wegive the representative a specific action to take, for example, to increase the visit frequency from once in two
weeks to three times a week. While the representative may not immediately realize the difference that such anaction can make, continuing to visit three times a week will require the person to prepare more businessproposals or deepen each proposal. In short, if a person is forced to act, the employee will go back to theoriginal goal and start pondering strategies to achieve it on his/her own.

KurodaI see. You mean that a behavior pattern changes the person's attitude. I suppose that the implementation of the
PDCA cycle on a weekly basis would be quite tough for employees, but frequent communication between
superiors and subordinates will feel like coaching in a timely manner and a proper evaluation to them.
Communication will also enhance the overall trust relationships within the organization. It is an excellent humanresources development model that reflects close care by management. President Takahara, do you also checkthe cycle yourself?

Takahara

In reality, it is difficult for me to check it every week, but I confirm the issuesof the entire Group and those of directors in weekly meetings. Before
listening to person-to-person explanations by the heads of departments
where performance has been low, I check the dedicated format that lists
past performance in the SAPS management model. Since the SAPS
management model has a common format used by all group companies
around the world, I can readily grasp the causes of a problem by having thecorresponding section written in a foreign language translated into
Japanese. I often say that slowing or cessation of performance and growth is due to four mental disorders(conceit, arrogance, dependence, and mannerisms). While we often use the third person when talking about
departments and organizations, this is not right: a company does not become sick. Individuals become sick,and the company is a group of sick individuals. The weekly check system allows us to readily identify the four
disorders. The founder of our company used to say that it is a change in the mindset of employees that brings
about a change in behavior. I tell employees, however, that a behavioral change starts everything. A behavioral
change will lead to a change in the mindset, capabilities, and eventually one's life.

KurodaKOKUYO's strength has long been its unique value chain encompassing everything from development andproduction to distribution and sales. However, along with the maturity of the markets, customers who acquired
new values are leaving KOKUYO. Before we know it, our value chain will become a relay devoid of customers.
Consequently, each function in the value chain must begin to combine with other functions like in a centipede
race. Actions intended to take charge and pursue excellence for customers are making the functions seek
collaboration with particular persons or functions, leading to the generation of a chain of trust. These DNAs
seem to be activated in situations where customers are in trouble and unite every employee beyond positionaland departmental borders. This year, we received many orders in March as a result of corporate relocations
and reorganizations. However, as it coincided with the last-minute demand prior to the tax increase, it became
difficult for us to make arrangements for truck transportation required to meet the delivery dates specified byour customers. At the time, I was surprised to see employees in all departments, regardless of their positions,

5

KOKUYO Group CSR Repor t 2014

cooperating with one another and making a desperate attempt to secure trucks in order not to cause any
trouble for customers, particularly individual customers.

Takahara

It sounds great. It is something that becomes more difficult to find as an organization becomes bigger. When I
saw your offices a while ago, I found good teamwork there. I think that great corporate culture and spirit are
firmly established at KOKUYO.

KurodaThank you. We decided to keep asking nine questions to each other at each worksite to promote theimplementation of the Guiding Principle: “Do you know to whom we should deliver value and what value they
want?” “Are you avoiding troublesome, difficult tasks?” and “Do you continuously raise the bar?” While itsounds an analog approach, we believe that building a chain of trust not only within our company, but including
suppliers and customers by continuously pursuing value, which enriches our customers, and excellence to thelimits will lead to the growth of and the actual experience of enrichment by each employee.

* The SAPS Management Model is a management style where business objectives are broken down into annual, monthly, and weekly
objectives, which are implemented by repeating the following cycle on a weekly basis: S (Schedule: Creation of an action plan), A (Action:
Implementation of the plan), P (Performance: Review of the effect), and S (Schedule: Creation of the next action plan based on the review).

Business that Leverages Domestic Business Strengths and Contributes to the Realization of
Enrichment in Asia
KurodaAt present, KOKUYO is trying to implement its corporate philosophy, “Enrich the world through our products,” inAsia by applying its strengths developed through domestic business to the Asian market. This goal cannot be
achieved unless every employee ponders ways to be useful for society and put the ideas into practice. I hopethat witnessing the severe reality of the serious social issues of the reconstruction of Tohoku, which wassignificantly damaged by the Great East Japan Earthquake and the learning environment of children in Asia,
will inspire and drive our employees to the firm resolution to become useful human resources.

Takahara

The ultimate goal of our corporate philosophy, NOLA & DOLA (Necessity of Life with Activities & Dream of Life
with Activities), is to provide support to every being, including babies, the elderly, and companion animals,
through products that free them from burdens and thereby fulfill the dream of each citizen. In Asia, we began
our business with the provision of high-demand, yet poorly supplied goods, such as feminine hygiene products
and baby care products. We believe that supporting the enrichment of each consumer will lead to thedevelopment of society and eventually the development of a country. For example, the dissemination of diapers
will free people from the washing of cloth diapers and those people can use the time for doing something new.
While babies grow soundly when freed from the discomfort of cloth diapers, a decrease in the frequency of
crying and diaper changes at night reduces the mental and physical stress on grandparents and parents, whoused to wake up often in the middle of the night. If each of these people can use the time for their own
well-being and for the development of society or the country, it will produce energy for society or the country.

KurodaKOKUYO has also provided high-demand, yet poorly supplied products andservices for many years. During the high-growth period in Japan, we served
customers by delivering an enormous amount of products without any
out-of-stock cases, and by doing so, KOKUYO grew. In India, where webegan our business through M&As, we can make the most of our capability
to “deliver products without any out-of-stock cases” since the country is in
the process of making a great leap forward. Since we cannot immediately
build factories or warehouses, we established a system where local sales
representatives use tablet PCs to promptly transmit orders from customers to manufacturers' warehouses. We
are finally reaping the fruits of the system. The presidents of our affiliated companies in India are pleased with

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KOKUYO Group CSR Repor t 2014

the system, saying that it is a typical Japanese business style. In the future, we will continue pursuing ways to
become useful, which are tailored to each country and region, to the limit.

Takahara

While it is not limited to the Asian market, the CSR activity of our company aims to contribute to society throughour core business and its ultimate goal is to contribute to the realization of symbiotic society. Our ideal society
is a place where every person, including infants and the elderly, can lead an independent life as much as
possible. We aim to support people's independent lives through our products.

KurodaThe realization of symbiotic society is directly linked to your business activities.

Takahara

Clearly, a symbiotic society cannot be realized only with our products. However, since Japan is one of the mostadvanced countries in terms of population aging and there are countries in Asia where population aging istaking place faster than Japan, if we can create success in Japan, we think that we can apply that to Asia.

KurodaI think that the driving force for the global growth of Unicharm lies in the fact that the daily practice of businessobjectives based on behavioral patterns implanted in each of several thousand employees is directly linked to
the realization of its lofty mission. What is most remarkable is the attitude of your company where even theemployees in the bottom 20% of the HR pyramid are nurtured in an effort to enhance the development of theorganization as a whole. The weekly management method inevitably requires superiors to take time forinferiors who have problems or are behind schedule while engaging people in the upper 20% in the
improvement of each department. This talk gave us many ideas for the future development of our company inAsia. While KOKUYO is trying to break down its corporate philosophy into behavioral patterns, I realized that
our effort has been insufficient in light of lessons you gave us today.
We will continue to tackle challenges by asking the questions: “What are the actions that contribute to thegrowth and enrichment of working and learning people?” “Are we pursuing to the limits?” and “What are thelimits?” in a repeated manner between superiors and inferiors and among colleagues and by using thecommitment of each employee to “becoming the glory of Asia” as the driving force.
Thank you very much for sharing your valuable experience with us today.

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KOKUYO Group CSR Repor t 2014

Introduction of the KOKUYO Group

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

“Honor of the Country” Inherent in the KOKUYO Name
The KOKUYO name was originally written in Japanese as a combination of the character for “country” and the character for“honor.” When KOKUYO's founder Zentaro Kuroda left his native city, he was told to “become someone who brings honor tohis hometown.” When he founded his own business, he adopted the trade name “KOKUYO” (Country“国”+ Honor“誉”) to
remind himself at all times of his mission, and the name has remained unchanged until today. Over the 100 years since
KOKUYO was founded, its businesses have evolved along with the changing times, but each and every employee is awareof his or her behavior and avoids any activities that might dishonor the Company name. At present, the KOKUYO Group is
growing from being a Japanese company to become an Asian company and is striving to become the “honor of Asia.”8

KOKUYO Group CSR Repor t 2014

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

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

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

9

KOKUYO Group CSR Repor t 2014

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

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

10

KOKUYO Group CSR Repor t 2014

Introduction of the KOKUYO GroupThe KOKUYO Group is dedicated to growing in Japan by creating demand while also extending its operations to othercountries in Asia. In the growing markets of Asia, we will leverage the expertise and technologies gained from operations inJapan while acquiring knowledge about these markets. We will use this approach to make steady progress toward our goal.
From the “honor of Japan” to the “honor of Asia”—
Our objective is to supply products and services that enhance the fulfillment and creativity of the jobs and lives of people inthe countries and regions where we do business. We want the KOKUYO Group to play a role in the further advancement of
the rapidly growing economies of countries in Asia.

Aiming for the “Honor of Asia”

VietnamStationery Business A TV Ad for Campus Notebook Launched!

To coincide with the demand season of notebooks from May to August, KOKUYO
Vietnam Trading launched a large-scale promotional campaign to boost the sales ofCampus notebooks mainly using a TV ad.,Pao-chan, a popular high-school model, hasbeen picked as a poster girl and appears in the TV ad.

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KOKUYO Group CSR Repor t 2014

Thailand
Furniture Business Grand Opening of Newly Renovated Showroom

Thanks to the booming economy across ASEAN countries in recent years, KOKUYOINTERNATIONAL (THAILAND) has been greatly improving its financial results after the
grand opening of its newly renovated showroom. It has been making a major
contribution to the design of office space for both local and Japanese-affiliatedcompanies in Thailand.

India
Stationery Business KOKUYO Reached an M&A Agreement with the Indian Notebook Manufacturer,

Riddhi Enterprises
KOKUYO concluded an M&A agreement with the Indian notebook manufacturer, Riddhi
Enterprises, in August. Looking ahead, as we continue to gain production capacity for
notebooks, this M&A deal will help us make inroads into new markets in America, Southand Central America, the Middle East, and Africa, creating an opportunity to launch newmarkets from India, further strengthening cost competitiveness.

Stationery Business Conclusion of Rights Issue and Acquisition of Land for New Factory by KOKUYO

Camlin Limited
KOKUYO Camlin Limited has recently finished raising a total of about 1,600 million Japanese yen from a rights issue(allocation of new shares). KOKUYO S&T was allocated the vast majority of the shares of the rights issue, pushing its
equity ratio to 65.77%. Simultaneously, KOKUYO Camlin Limited purchased the land of approximately 56,000 m2 for the
new factory. While increasing business efficiency by proceeding with the concentrating of factories, which were previously
scattered in various places, to the new factory, KOKUYO Camlin Limited will gain competitiveness in the domestic market inIndia from a substantial reinforcement of production capacity.

Japan
Stationery Business Launch of First KiSPA Catalog, Which Lists Office Supplies from Nearly 450

Manufacturers
For the purposes of further promoting partnership with stationery stores and enhancing
the customers' convenience when buying stationery and office supplies, we publishedthe first KiSPA catalog. For the catalog preparation, we utilized our know-how to theutmost extent, which we have accumulated by operating the mail-order company,
KAUNET.

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KOKUYO Group CSR Repor t 2014

Furniture Business Umeda Live Office and Umeda Showroom Opened near JR Osaka Station

KOKUYO Furniture and KOKUYO Marketing jointly opened a Live Office and showroom
to serve as a new business base in the Kansai area. Located at the Knowledge Capitalat Grand Front Osaka, these venues will be utilized as a place to showcase a range of
office space design ideas that lead to expansion and growth of customer companies.

Indonesia
Furniture Business KOKUYO Furniture Opens Jakarta Showroom

KOKUYO Furniture and its dealer, Krisson Indonesia, joined hands to open a showroom
in Jakarta, the capital city of Indonesia, to gain domestic demand for office furnitureamong the middle and high class.

China
Furniture Business Shanghai Flagship Showroom Acquired LEED Gold Certification for the First Time forthe KOKUYO Group!
For the first time for the KOKUYO Group worldwide, a flagship showroom in Shanghai
acquired LEED Gold certification. Leadership in Energy and Environmental Design(LEED) is a set of rating systems for the overall design, construction, operation, andmaintenance of green buildings, which is intended to allocate points based on theenergy-saving benefits and potential environmental impacts. With the acquisition of the
LEED certification, KOKUYO is expected to see a significant increase in its social
valuation.

Furniture Business The First Issue of Quarterly Magazine, HOMARE, Published for Dealers in China

KOKUYO Furniture Commerce & Trading (Shanghai) launched its first issue of aquarterly magazine, HOMARE, for dealers in China. By sharing new products fromKOKUYO and its participating events with dealers, KOKUYO aims to support their sales
efforts and deepen relations of trust as a KOKUYO's true partner dealer.

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KOKUYO Group CSR Repor t 2014

Stationery Business The First Independent Exhibition Held in China

For the first time since its establishment, KOKUYO Commerce (Shanghai) held an
independent exhibition in Shenzhen to showcase new products, along with sales
promotion meetings and individual business negotiation sessions with the aim ofdeveloping an understanding of KOKUYO's products for dealers.

Stationery Business Notebook Cover Design Competition in China

As an academic-industrial cooperation project with Mode Gakuen, KOKUYO Commerce(Shanghai) held a design competition, aiming to study a wide variety of design acceptedby the Chinese market. Some of the best designs have been chosen forcommercialization.

In June, KOKUYO joined 2013 NeoCon, one of the world's largest furniture
fairs held in Chicago, USA, for the first time to showcase its AIRFORT series.

KOKUYO Campus notebooks marked the 39th anniversary in 2014. To
express our gratitude to our customers, a series of appreciation events has
been offered in celebration of the 39th anniversary.

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KOKUYO Group CSR Repor t 2014

Special Report: Pursuit Values to the Limits for Learners and Workers

Notebooks Create a Starting Point for Learning
Although people in Japan routinely obtain stationery anywhere and receive a quality
education in a well-organized environment, many children in some parts of Asia do noteven have notebooks and pencils. While this is an extreme example, children living in
the rural areas of India use the ground as a notebook or write and erase notes so they
can reuse notebooks. In the cities, I saw a thousand children studying outdoors while
holding an umbrella in the rain trying to get an education. Even though their notebooks
were wet, the glint in their eyes showed a total commitment to learning. I was deeply
Takuya Morikawa

moved by how desperately these children wanted to learn. There is always a notebook
Representative Director andwhen a person starts learning. These children taught me anew that notebooks were thePresident
starting point for learning.
KOKUYO S&T Co., Ltd.
Upon witnessing the reality of education in Asia, I felt even more strongly about helping
those in need and providing a better learning environment and tools. With the goal of making education readily available,
we have embarked on a mission to offer reasonably priced, high-quality products, which we have achieved with KOKUYO's
Campus notebooks, while keeping pace with the actual conditions in China, Vietnam, and India.

Campus Notebooks Continue to Surpass Customer Expectations
KOKUYO is celebrating the 39th anniversary of Campus notebooks this year. For thesemany years, we have consistently pursued the upper limits of customer satisfaction andworked to attain the ultimate in quality and functionality.
A notebook consists of three parts—the cover, the inside pages, and the cloth of thespine. From these three parts, six elements of value are created: the binding, quality ofthe materials, ruled lines, size, design, and price. This is why we consistently focus on
the details, make the best use of inventiveness, and seek excellence, aiming toenhance the fundamental value of Campus notebooks.
Campus notebooks with dotted lines (released in 2008), which generated value with theease of organizing text, neat writing, and memorizing information, were further improved by taking student perspectives tothe limit, such as a notebook designed for humanities, one for sciences, and the launch of the new Campus notebook
series, a Campus notebook with ruled lines designed for learning (released in 2013). This is indeed a good example of ourcommitment to overcome the challenge of surpassing customer expectations at all times.
I believe that the outcome of all of our efforts is that Campus notebooks now rank at the top in popularity by domestic
customers (as of April 2014), and I always tell company employees to follow the success of Campus notebooks or evenexceed that success. My belief is that, in order for us to enrich the world through our products and services, we must learn

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KOKUYO Group CSR Repor t 2014

and develop ingenuity.
As we stand on the mission to increase learning opportunities for people in Asia to strengthen the ability to learn, we haveworked to accelerate growth and motivate people to learn using KOKUYO products, tools, and a learning environment,
which also fuels the development of these countries.
While the challenges people face differ from country to country when it comes to learning, we strive to create value
appropriate for each region to be consistently recognized and chosen by customers, as we continue to step closer to earn
recognition as the honor of Asia. Even though the road is long and rough in earning this honor, we pledge to pursue
customer satisfaction to the limit.
* Related information:「Campus Notebooks with Ruled Lines Designed for Study」

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KOKUYO Group CSR Repor t 2014

Special Report: Pursuit Values to the Limits for Learners and Workers

For Workers Who Are Set to Create Innovation
With the aging of Japanese society, companies are expected to innovate in every
aspect of corporate activities by changing the mindset and creating new value. The
sources of innovation that lead to the sustainable development of society are those whowork, and thus, our mission is to challenge ourselves to support those workers.
As we continue to tackle the challenges presented by customers, the employees of
KOKUYO have worked on the design of office spaces and proposed new work styles,
as well as researching value creation, by expanding into paper products and furniture.
As a result of continuous research of work styles began in 1986, I have sensed changes
in the relationship between individuals and company in step with the times. To that end,
we established the Worksight Lab to promote the study of next-generation working andlearning styles by incorporating the Future Center.*1 Faced with challenge, different
corporate sectors participated in the Worksight Lab to regularly discuss the cases listedin Worksight*2 and the challenges faced by member corporations.

Hidekuni Kuroda
Representative Director andPresident,
KOKUYO Furniture Co., Ltd.

The Creative Lounge MOV was one project where we accepted the challenge ofproviding advanced practice. As the challenges posed by customers are becoming
increasingly complicated and sophisticated, people say it is difficult to nurture innovationfrom an isolated office. The aims of MOV are to provide self-sustaining individuals with avenue to discover each other and create an organic community irrespective ofgenerations and organizations, generating new connections for individuals and between individuals and corporations. Twoyears have passed since the launch of MOV, and I am starting to see signs of innovation being created from the newcommunity.
*1 The WORKSIGHT LAB is a place where people of different trades, sectors and specialties come together to have conversational interaction
to work on creating new businesses and solving social issues.
*2 WORKSIGHT is the work-style strategic media for a business person to think about the working environment. It is focused on the perspectiveof re-designing the working environment consisting of workspace and work policy.

A Challenge to Produce New Value from Diversity
In every aspect of corporate activities, we strive to stay on top of the challenge to create value from a diverse community.
One excellent example is the development of the Madre lobby chair designed for public spaces. A cross-functional team ofsales personnel, developers, and designers repeatedly discussed the ideal lobby chair for government offices, which werevisited by the public and thus became the focal point of the project. The development target was to create a comfortable
place for a diversity of users, including elderly people, expectant mothers, and mothers with infants, not for the benefit of the17

KOKUYO Group CSR Repor t 2014

government office. In particular, we invited physically challenged people, who experience the greatest inconvenience, andextracted potential needs via observation and interviews, as well as verification of the prototype, successfully completingthe development project as a team. As a result, Madre has received favorable reviews from a variety of public spaces,
providing a sense of fulfillment to enrich the world through our products and allowing us to share it with physicallychallenged people and employees. Employees who were involved in the development sometimes debated all through thenight. Their forward-looking attitudes were extraordinary—everyone enjoyed working 100 times longer than usual. When I
saw it, I felt that the DNA accumulated from KOKUYO's forerunners had been passed down from generation to generation.
In this way, each of us strives to take on the difficult challenge of bringing joy to customers by pursuing maximum value. Ourcommitment is to design the relationships of corporations and individuals, including the personnel system andorganizational design so that all employees can actually feel that they serve a useful purpose in enriching the world.
* Related information:「The UD+3 Series」

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KOKUYO Group CSR Repor t 2014

Special Report: Pursuit Values to the Limits for Learners and Workers

KOKUYO intends to offer more learning opportunities to persons in Asia to strengthen the power of learning. Each of theemployees in the value chain strives to continuously raise the bar and to create value suitable for each country and region.

InquireWith the aim of offering products that meet the detailed demands of customers,
KOKUYO understands the need to focus on the future of customers in each country andregion. To do this, we must appreciate the environment where people learn. For
example, we visit classrooms to talk to teachers and students and bring products thatare on sale to grasp the convenient features of a product. Also, by considering thecharacteristics of each country and region in the determination of the product logo,
color, and sales promotion, we constantly market our products while asking each other if
we are pushing ourselves without limitation.

Scott Crist
Global Marketing GPCW
Development DeptKOKUYO S&T

CreateWith the objective of offering the right product to the right person, we seek out productsthat customers truly find delightful. Product development involves the difficulties of highcost, the inability to decide on the design, and failure to produce the expected quality.
The interesting part and the real thrill is to work as a team to resolve each issue. To
properly solve both the visible and invisible problems of customers, we collect opinionsfrom many customers so that we can constantly provide new value.
Yoshiko Yokota
Manager of the Development
Innovation Dept.
Stationery Products Business
Division
KOKUYO S&T

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KOKUYO Group CSR Repor t 2014

Produce
For the past 30 years since I joined the company, I have watched the evolution ofCampus notebooks from the second generation to the fifth generation in my capacity todevelop ideas for technology and manufacturing as the person in charge ofmanufacturing. While a notebook is just part of the annual production of a hundred
million notebooks as producers, one notebook is invaluable to customers. To offer
products that customers treasure, we continue to focus on the durability and quality ofruled lines without compromise. In Vietnam and China, where I went to give technicalguidance, their eagerness tells me that this idea has been passed down to them.

Yasuji KatoKOKUYO Product Shiga

Protect
I help to develop the technology for the adhesive tape glue, Dot Liner. The current Dot
Liner was developed from the printing technology for glue patterns, which originatedfrom the development of photo album pages by our predecessors. Even though theinitial version had a tape thickness of 25 μ,* it was improved to 19 μ, then to 12 μ for thecurrent version, meeting the requests of customers for a super tiny size that fits in a pen
case. We could not perfect the technology without the cooperation of the team in
obtaining a patent and designing performance. My biggest protection for customers is topush adhesive technology to its limits. I will continue working with my peers to challenge
myself for customers.
* μ: micrometer

Hiroyuki Kasahara
Technology Group No. 2
Technical Center
KOKUYO S&T

Communicate
The store is where customers meet products, and this is where I communicate theattractive product features to customers. To have our products chosen by customers,
the marketers must play their role through the value chain before products reach thestore. We seek to maximize product appeal by ensuring that each product exceeds
customer expectations, and we make the packaging properly conveys what it is
supposed to convey. Since the packaging serves as the only communication tool, we
thoroughly review the packaging. When I see customers choosing our products, I rejoicethat I am doing something useful.

Mai Kitagawa
Market Creation Dept.
Store-Front Marketing Division
KOKUYO S&T

Deliver
At present, distribution centers across the country are promoting a project to reinforce
workplace skills. By improving the movement by one or two seconds for each operation
at a job site, the accumulation of these efforts becomes a larger improvement effect,
which eventually leads to improved value for customers. While we strive to fulfill
physical distribution function, which is to form value for customers, we are committed tomaximizing the value for customers with logistics at the core.
Kohei Arinishi
Section manager of the
management division at Kinki IDC
CS Operation Dept.
KOKUYO Supply Logistics Co., Ltd.

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KOKUYO Group CSR Repor t 2014

Rooted in the Community
Vietnam is seeing a surge in living standards and needs on a daily basis. KOKUYO
Vietnam cannot grow bigger without continuously being selected by customers. That's
why we believe it is important to provide customers with value that exceeds their
expectations. In Vietnam, sales of adhesive-bound notebooks were launched in 2009,
venturing into the innovative changes of notebooks by adding the new value of adhesive
binding. In 2014, sales of notebooks with 8 mm dotted lines for students were launched,enjoying popularity from dealers. We are stepping up our efforts to provide value by
sharing KOKUYO's corporate philosophy with team members.

21

Pham Tung Lam
KOKUYO Vietnam Trading

KOKUYO Group CSR Repor t 2014

Special Report: Pursuit Values to the Limits for Learners and Workers

The KOKUYO mission is to challenge ourselves to support those who work because they are the source of innovation andthe creation of new value. We pledge to push the boundaries of the search for customer value and our own work stylethrough the autonomous challenge of overcoming difficult issues by each one of the employees who play a role in the value
chain.

InquireI am in charge of the marketing of furniture for medical facilities. In a hospital, medical
personnel work closely together in attending to their duties and experience
overwhelming tension and fatigue. We must have a clear understanding of not only
effectiveness but also the ways that people work because the hospital is a place where
people cure disease and watch over patients. Even though our products do not curepatients, I believe that the more we improve the work environment for medical
personnel, the more the personnel improve medical performance. We also serve a
useful purpose for hospitals, our customers, but we also serve patients who are the end
users.

Yumiko Aoyanagi
Development Marketing Group
Medical TCM
KOKUYO Furniture

CreateThe development team shapes ideas. We sometimes face the tradeoff between costs
and convenient functions, or products become less attractive after cutting back on costs
too much. We work on shaping ideas by setting the priority through dialogs withmarketers and customers to overcome the limitations of manufacturing. We arecommitted to provide customers with KOKUYO products that make workers feel more
alive. Although we cannot directly excite workers with the value provided by products,
we strive to develop products that are capable of supporting these scenes.
Toru Hasegawa
Desk Value Team
Product Making Value Unit
KOKUYO Furniture22

KOKUYO Group CSR Repor t 2014

Produce
I place a high priority on communicating the necessary information faithfully withoutomission. While the design of plants is the starting process, design drawings serve togive instructions—incorrect drawings make employees work hard to produce the wrong
products. In my day-to-day work, I cherish the words of my predecessors: we must
place ourselves in the position of users when making products and the post-process isalways the customer. Making sure that we communicate the necessary information
faithfully without omission when making drawings ultimately serves a useful purpose for
Yasushi Okada
Building Materials Design andcustomers, and this is something I do thoroughly.

Development Team
Shibayama Plant
KOKUYO Furniture

Protect
My job is to resolve customer complaints, and I always try to relate to the context ofcomplaints as much as possible. I not only have to understand the immediate complaint,
but I must also understand the essence of the dissatisfaction to find the best solution.
Even though a concern may remain after presenting the best solution to customers,
since there is only so much we can do, I believe that if I continue giving sincere
responses, customers will return and purchase KOKUYO products in the future.
Takeshi Nishiguchi
Quality Assurance Dept.
KOKUYO Furniture

DesignDesign projects vary depending on the customer objectives, the type of buildings, costs,
and the period of construction. Although there are limitations with each project, I believe
one of the missions for the design team is to create an office that makes the best use ofclient desires by overcoming the limitations. While considering the actual end users of
the office, I strive each day to design spaces based on each work style with the goal of
creating an office that surpasses the expectations of clients.
Ai Yamamoto
The Group No. 2
Space Solution Section No. 1
KOKUYO Furniture

Construct
I aim to become is a complete professional serving as the final anchor bringing
additional value to the existing value chain for a construction project. In order tocomplete the construction project, we share goals internally and with partner companies
as we discuss the details of the execution design, parts, component arrangements, andconstruction management. Looking ahead, we work in locations across the nation as thesales force with the goal of accumulating experience patiently and gradually to beconstantly selected by customers while placing ultimate priority on quality and safety.
Kazuyasu Oura
SE Section No. 1
KET Tokyo Office23

KOKUYO Group CSR Repor t 2014

Rooted in the Community
I am engaged in sales at Chinese outlet stores and dealers in Shanghai. By offering
KOKUYO products and services across China, I get the pleasure of providing a more
comfortable environment for workers in China, which is my main motivation. With therapid economic growth in China, changes have taken place in worker customs andmanagement attitudes. I visit many companies so that I can come up with the value
sought by the Chinese with the concerted efforts of dealers. By communicating thesevalues with the development sector in Japan and China, I hope to develop products thatsatisfy customers and further contribute to the development of Chinese corporations.

Zhonghong Qian
KOKUYO Furniture Commerce &Trading (Shanghai) Co., Ltd.

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KOKUYO Group CSR Repor t 2014

CSR Management
Grounded in the founding corporate philosophy of enriching the world through our products, the
KOKUYO Group conducts business that is necessary for society and that customers continue toselect, while remaining profitable and honest in its business practices.

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

26p Corporate Philosophy

32p Start of the Anniversary Month of KOKUYO's Founding

27p Top Commitment and Basic Concepts

33p Efforts for Promoting an Understanding of KOKUYO'SCSR Activities

30p KOKUYO's CSR Charter

35p Initiatives to Promote Compliance

31p Kokuyo Group Code of Conduct

38p KOKUYO's Business Continuity Planning Initiatives

Views linked with the corporate philosophy, which have been highly valued by KOKUYO
Three years after the founder started his business, he decided to start the production of wach pads in 1908. At

Sho Hyaku Mai Wacho---A notebook with 100 pages

that time, it was standard practice to consider 96 as a complete hundred. However, the founder insisted that thecover and backing paper were for protecting the inner pages and should not be included in a count. He then- hyaku mai (meaning exactly 100 sheets) on the
produced a 100-page notepad and added an inscription of shocover. Even though the founder was faced with peer pressure, he constantly considered customer perspectives
and felt massively confident about his products, making him stick to what he believed in without giving up. It is
the origin of KOKUYO's sense of integrity, forming the basis of KOKUYO.

CSR Management (Organizational governance)

Corporate Philosophy

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

Guiding Principle

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KOKUYO Group CSR Repor t 2014

CSR Management (Organizational governance)

Top Commitment
KOKUYO remained focused on the corporate philosophy of enriching the world throughour products by facing the challenges from customers in successive periods anddemonstrating the ability to create new value. In 2011, KOKUYO made a majorcommitment to looking for a new stage of growth in Asia. The social issues facing Asia
and Japan today are complicated and becoming more serious while the challenges andneeds of customers are becoming much more diverse. To offer value that surpasses
customer expectations, KOKUYO continues to accept the challenge to persevere withactivities that are deeply entrenched in each country and region.
In Japan, we tried to bring the value chain closer to the suppliers and retail channels
outside our borders to reconstruct our unique selling position. Overseas, we are

Akihiro Kuroda
Chief Executive Officer, President
and Director
KOKUYO Co., Ltd.

constructing a mechanism to offer a stable supply of products and maintain a reliable
inventory so as to support the rapid growth of customers.
In order for us to practice the corporate philosophy in Asia, I believe it is crucial to knowthat each and every employee in Asia will strengthen our business capabilities and takeaction. To that end, we have set the guiding principle to sincerely face customers' challenges and think through to the limit
while pursuing excellence to the end. We aim to cause a chain reaction of small successes to enrich the world,
accumulating success faithfully, so as to be recognized by customers and society. Even though it is a long, rough road, weare pledged to take each step, aiming to become the Honor of Asia.

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

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KOKUYO Group CSR Repor t 2014

System for the Promotion of CSR
The KOKUYO Group promotes CSR activities on a group-wide basis through linkages among CSR-related sections. In thisconnection, the CSR & Environmental Group was established as a special section charged with carrying out functions thathave an impact on the entire company. The CSR & Environmental Group formulates and reviews policies and helps todefine issues and targets in order to strategically promote CSR.
We also operate an environmental committee, a central health and safety committee, and a diversity promotion committee,
among other such organs tasked with dealing with important concerns. With special sections leading the way, our entire
group pursues these concerns in a coordinated fashion. In aspiring to become an Asian company, the establishment of asystem for the promotion of CSR in a global context will become an issue that will need to be addressed. We will continue
to strive to achieve sustained growth for society and the Group while maintaining a state of harmony with stakeholders
through CSR information disclosure and dialogue.

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 (the risk committee, investments and loans council, J-SOX committee, disclosure committee, and compliancecommittee) 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.

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KOKUYO Group CSR Repor t 2014

Board of Directors, Audit & Supervisory Board Members, and Corporate Officers
Board of Directors
Representative Director

Independent Director

Akihiro Kuroda

Takeharu Nagata

Representative Director

Independent Director

Yasuhiro Kuroda

Nobuyuki Oneda

Director

Independent Director

Takuya Morikawa

Hisao Sakuta

Director

Independent Director

Hidekuni Kuroda

Hiroshi Hamada

Board of Directors

Director

Masa Matsushita

Audit & Supervisory Board Members
Standing Audit & Supervisory

Outside Audit & Supervisory

Yoichi Kotani

Tomomi Yatsu

Standing Audit & Supervisory

Outside Audit & Supervisory

Nobuyuki Miyazaki

Yutaka Mizuno

Audit & Supervisory Board
Members

Corporate Officers
President and CEO

Senior Executive Officer

Senior Corporate Officer

Akihiro Kuroda

Takuya Morikawa

Masa Matsushita

Executive Vice-President

Senior Executive Officer

Yasuhiro Kuroda

Hidekuni Kuroda

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KOKUYO Group CSR Repor t 2014

CSR Management (Organizational governance)

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

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

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

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

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

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

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KOKUYO Group CSR Repor t 2014

CSR Management (Organizational governance)

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

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KOKUYO Group CSR Repor t 2014

CSR Management (Organizational governance)

KOKUYO celebrated its 108th anniversary on October 2, 2013. Starting in 2012, the company has set October of each year
as the anniversary month of the KOKUYO's founding to provide each employee with an opportunity to think over thesignificance of its founding spirit and corporate philosophy for the entire month with the goal of encouraging its embodiment
into their day-to-day tasks and activities.

A Founding Anniversary Lecture Held for Executives
On the day of the founding anniversary, the executives from major operating companies
were invited to join the representative of the KOKUYO Group, Akihiro Kuroda, for alecture where he spoke for more than two hours. He talked about significant remarks
made by the founder and stories about how the company continued to meet thechallenges of successive periods, as well as the Founding Spirit that underlies thecompany and the concept of values that have always been upheld, calling for an
in-depth understanding among the executives. He shared his goal of becoming the
Honor of Asia with the executives by making KOKUYO's intangible essence that has been passed down up to now as theaxis of the business strategy.

A Corporate Philosophy Meeting Launched for Employees on Their 11th Year
Since 2013, as an approach to mark the founding anniversary month, a corporate philosophy meeting has been launched toprovide employees of 11 years an opportunity to have a dialogue with President Kuroda on the theme of the corporate
philosophy. The employees who marked 10 years since they joined the company and have been delegated to responsible
tasks, entering a position to nurture young players, got together to talk to each other face-to-face as to why KOKUYO has
made such development and the significance of working. In the first half of the meeting, President Kuroda provided theessential meaning of KOKUYO's founding spirit, the business of KASU, and why the corporate philosophy was important forcorporations, while the participants discussed with each other their experiences based on the corporate philosophy and how
they actually felt about their growth through these experiences in the latter half.

Delivering the Explanation of "Integrity Not in Words but in Action" (From the KOKUYO Creed)by the Top Executives from the Operating Companies
During the founding anniversary month launched in the previous year, a specific themeis set annually and messages from the top executives of the operating companies are
published on the intranet. KOKUYO's concept of value that had been respected since
the founding was compiled as the KOKUYO Creed on the 50th anniversary of its
founding. Since then, the KOKUYO Creed has been handed down carefully as theaction guidelines for employees. Above all, “Integrity not in words but in action” is thewords that maintain the essence. For the anniversary month, the top executives ofmajor operating companies explained the implications of the KOKUYO Creed along with
their own experiences and thoughts so as to provide the momentum for pushing the company in the direction it is aimed at.

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KOKUYO Group CSR Repor t 2014

CSR Management (Organizational governance)

With the goal of raising awareness and promoting an understanding of CSR initiatives among employees, the KOKUYOGroup has implemented e-learning training for all employees and group newsletters via intranet to facilitate communication
among employees.

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

CSR E-Learning for the Entire Employees in JapanThe CSR e-learning program for 2013 was implemented with an aim to actively communicate KOKUYO's CSR activities tostakeholders. In addition to cover the themes of customers, shareholders, business partners, local communities, naturalenvironment, and employees, the CSR e-learning program addressed the important themes, such as corporate governanceand compliance. Also, prior to start the e-learning training, the group newsletter, YOU, published on the intranet, featured
department-specific activities that employees talked about their efforts toward CSR, on the themes of CSR for protection
and CSR for growth, which helped gain further understanding of the employees for CSR. In fiscal 2013, the e-learning
training was attended by nearly 3,000 domestic employees of the KOKUYO Group, which was successful in promoting abetter understanding of CSR through each operation of the KOKUYO Group.
Additionally, in fiscal 2013, as the first attempt to further widen the understanding of CSR among employees working
overseas, a Chinese group newsletter was published to introduce the fundamental knowledge of CSR and KOKUYO'sviews on CSR among local employees in China, as well as an employee survey to assess their awareness. To enhance andimprove the CSR activities, it is vital to recognize the importance and share the significance among employees. The
KOKUYO Group is pledged to maintaining efforts to increase the awareness of CSR among all employees including themanagement layer.

Training materials for CSR
e-learning

Group newsletters are used tocommunicate case studies specific

CSR awareness survey for Chinese
employees

to departments

33

KOKUYO Group CSR Repor t 2014

The KOKUYO Group periodically publishes a group newsletter YOU on theintranet and features KOKUYO people where diverse group employees talkabout their passion for work and the real pleasure of working. It introduces
employees who have been practicing KOKUYO's philosophy in their tasks andwhat they are aware of and how they face with daily tasks, as well as how
they receive feedback from customers and colleagues with it. The KOKUYO
people series are published once a month and so far, a total of seven

The KOKUYO people series

employees had shared their stories.
In addition, the page where the series are provided has a like button and a space to leave comments to contrive
ways to share feedback of employees, rather than focusing on a one-way transmission of information.

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KOKUYO Group CSR Repor t 2014

CSR Management (Organizational governance)

As it develops and becomes a truly Asian company, the KOKUYO Group is working to ensure that all management and staff
will have a strong awareness of compliance and will take the right actions in sincerity at all times.

Global Efforts to Lay a Framework Focused on Raising Awareness of Compliance
KOKUYO Group Code of Conduct Explanatory Meetings in Offices Overseas.
Formulated in 2012, the KOKUYO Group Code of Conduct is intended to establish thebasic standards to ensure that all KOKUYO Group management and staff comply withlaws and regulations and conduct its business activities in compliance with social ethics.
After it was deployed in Japan, we also laid a framework focused on raising awarenessof the KOKUYO Group Code of Conduct globally.
In 2013, meetings were held to explain the KOKUYO Group Code of Conduct in theseven countries and regions where the KOKUYO Group has operations (China,
Vietnam, Thailand, Malaysia, Singapore, Hong Kong, and India). At the beginning ofeach meeting, a responsible person in each country emphasized the importance ofcompliance as a member of the KOKUYO Group and explained the Group's views
toward compliance and the background of formulating the Code of Conduct, with an aim
to foster a better understanding of the content of the KOKUYO Group Code of Conduct
among participants. Local employees shared their feelings that “it became a good

A picture taken at a meeting at
KOKUYO Malaysia.

opportunity for me to understand the importance of compliance and made realize that I
was a part of the group” and “I was able to understand more about the importance ofcompliance and it made me want to learn more.”
A pocket-size card with theAdditionally, in China, where we prioritized its introduction and meetings, as a part of the
KOKUYO Creed and the 11 Rules
efforts to deepen the understanding of the KOKUYO Group Code of Conduct, a book ofof Code of Conductcase studies that reflected actual cases in China was compiled and distributed to the entire eligible employees. Also, theemployees of KOKUYO Malaysia are embarking on their own efforts based on an idea of local employees (see the column
for more detail). We will continue to work hand-in-hand with each company to engage in activities focused on raisingawareness of compliance that matches regional situations.

Annual mandatory pledge on the establishment anniversary month (October) to encourage
employees to think about complianceFollowing the establishment of the KOKUYO Group Code of Conduct in 2012, allmanagement and staff are now required to submit a pledge each year indicating they
will be compliant with laws and regulations. Each member of management and staff is
expected to confirm the content of the code of conduct periodically. The aim of thepledge is to encourage management and staff to review their own conduct and toprovide an opportunity to think about compliance.
In 2013, in addition to the KOKUYO Group Code of Conduct (common global office
KOKUYO Group Code of Conduct

regulations), a KOKUYO Group Code of Conduct handbook was compiled to take into
Handbook for each country
account differences in business practices, laws, and other matters across countries andregions, and meetings were held in series to explain the handbook in each area. With these, the entire employees working
overseas submitted a pledge indicating they will also be compliant with the KOKUYO Group Code of Conduct.

35

KOKUYO Group CSR Repor t 2014

Continuous Implementation of Compliance Surveys
Further Expansion of the Target Range of Compliance Surveys
While the compliance surveys targeted only Japan and China in 2012, the compliance surveys of 2013 covered the entire
KOKUYO Group, targeting a total of 43 companies including overseas bases (29 domestic companies, five companies in
China and nine companies overseas excluding China). The fixed point observation of the awareness of compliance allows
us to detect changes and signs to grasp problems and take necessary measures beforehand. The KOKUYO Group plans to
conduct the compliance surveys on a yearly basis in the future.
The results of the compliance surveys are fed back to employees of each company, and the problemsthat can be detectedfrom the compliance surveys are responded by dividing into measures to be taken by each company and those by theentire group. In 2013, the entire group reviewed the guidelines for client entertainment and gifting, as well as thedevelopment of rules and standards such as the guidelines for side jobs and businesses.

Compliance Enlightenment Activities
Implementation of Compliance Business Self-Checks
We have made arrangements for compliance business self-checks by group leaders in various workplaces. These checks
have the group leaders verify periodically the operating risks in daily business processes and create opportunities for them
to be aware of such risks. In addition, the results of the checks are discussed among the organizational head and groupleaders with the objective of raising awareness and promoting communication.
In 2012, these self-checks were first conducted by 456 group leaders, and they covered the categories of sales functions,procurement functions, and regulations and rules. To further expand target companies and categories, a total of nine
domestic companies and three principal companies in China newly participated in the compliance business self-checks in
2013. The contents of discussion among the organizational head and group leaders were stored in the database with theaims of clarifying challenges as a company and taking necessary measures to solve problems.

Periodic Training Both Overseas and in Japan
In 2013, over 1,000 employees took part in discussion-type training, named Compliance
Discussion, which was held 20 sessions in Japan and China. Also, starting 2013,
discussion-type compliance training has been added to the training program sponsoredby the Human Resource Development Department, such as training for new employees,
newly appointed management and newly-hired mid-career employees.
In the periodic training courses on intellectual property and legal matters held in Japanand overseas, in a new effort to draw awareness among employees and prevent risks, aguidebook was compiled to include basic things that the group employees need to know

People holding a discussion at
KOKUYO Logitem

about intellectual property and legal matters, and meetings were held for the entire
group to learn about the guidebook. In addition, to respond to individual requests from a business unit, workshops, joint
study sessions and other interactive training program was held both at home and overseas.

36

KOKUYO Group CSR Repor t 2014

Mini Compliance Quiz Choikon Launched
Mini compliance quiz called Choikon covers topics that people tend to misunderstandand surprising facts about compliance, which employees participate willingly.
Participants can answer questions on database and check their results and obtain
explanations within moments. The mini compliance quiz has been implemented sinceJune 2013, and since then, quiz is given twice a month (five questions per session) andeach session is attended by nearly 400 people. Since we received positive feedback
that the “... quiz is made simple and I can do it in my spare time” and “… familiar

A screen for mini compliance quiz

questions make it easy to understand,” indicting that the quiz plays a part in creating a knowledge base for learningcompliance for employees.
*Choikon: It was named with the hope to encourage employees to come in contact with compliance occasionally.

KOKUYO (Malaysia) Sdn. Bhd. mainly serves as a manufacturing plant ofdesks and storage units and began its operations in 1997. At present, it
employs a total of nearly 170 employees. After a meeting was held in May
2013 to explain the KOKUYO Group Code of Conduct ("Code of Conduct"), a
pocket-size card with the KOKUYO Creed and the 11 Rules of Code of
Director (President)
Kamarulzaman Bin Othman
Conduct is prepared and distributed among all employees, with the hopes tocultivate loyalty to the company by having them develop a deeper understanding for KOKUYO and tounderstand the importance of conducting ourselves by taking the perspective of others.
In addition, to thoroughly implement the Code of Conduct, not only we explain the KOKUYO Creed in a generalmorning assembly each month, but we also read out the pocket-size card and each item of the Code of
Conduct in a daily morning assembly for each sector. Since the start of the activities, inter-company
communication, especially among leaders, became active, encouraging them to think they want to make abetter company, which also manifests in their behaviors.
Not only when forming a line to do a morning exercise, leaders are playing a central role in making
improvements, such as improving the arrangement in the merchandise storage space, development andimplementation of organization methods and the visualization of process progress and each activity in a plant.

37

KOKUYO Group CSR Repor t 2014

CSR Management (Organizational governance)

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

KOKUYO's Formulation and Implementation of the Business Continuity Planning
The KOKUYO Group began the consideration and preparations of business continuity planning (BCP) in 2007 to be readyfor damage that might be sustained to production facilities and office functions in the event of national disasters and othercontingencies. During the Great East Japan Earthquake that occurred on March 11, 2011, the plans that had already been
made in KOKUYO's BCP activities, including the sharing of information and various countermeasures, proved to be useful,even though we have learnt many things from the experience of the unprecedented great disasters. Although none of
KOKUYO's business locations suffered serious damage, suppliers of raw materials did suffer damage, and, as part of our
BCP activities, we surveyed the suppliers of raw materials for our major products and considered alternative suppliers. On
the other hand, we faced a large number of unexpected issues, including confusion in product distribution because of
shortages of fuel and production stoppages because of scheduled power outages. In the future, we will take these issues
into account, and, to ensure a faster return to stable product supplies, we will implement the following measures in our BCP
activities.

(1) Early Response Measures During Disasters
The disturbing impact of major disasters on employees was greater than anticipated, and we realized once more that
prompt and precise information collection, good judgment, quick dissemination of information, and how to restore calm
behavior were major issues. In 2013, in addition to survival cards, which were distributed previously, emergency actionplans for employees were newly created and posted on the intranet so that employees can browse at anytime.

(2) Creation of a Safety Confirmation System and Implementation of Practice Drills
To make quick confirmation of the safety of Group employees in times of major disasters, in 2006, we set up a safety
confirmation system using the mobile phones, PCs, fixed line telephones, and other means of communication of
employees. Immediately after the earthquake, it was temporarily not possible to use telephones and e-mail. At present,
however, no other alternative systems seem to exist that would enable confirmation of the safety of a large number of
employees. For the time being, we will continue to require all employees to register their mobile and other contact
addresses and make sure that these are kept up to date and in a usable state. (In 2013, practice drills were implemented
twice with approximately 5,500 participants)(3) Implementation of Emergency Drills at Business Locations
Along with regular countermeasures for earthquakes, we are conducting periodic training and drills that simulate a fictionallarge-scale earthquake on weekdays. In 2013, the Osaka head office and Shinagawa office held an evacuation drill andfirefighting training. Also, a desktop exercise that simulated a fictional large-scale earthquake was implemented in principal
domestic bases to increase the group-wide crisis-response capability.

An emergency drill implemented at
the Osaka Head OfficeAn emergency drill held at the
Shinagawa Office

A desktop exercise held at principal
offices across Japan.

38

KOKUYO Group CSR Repor t 2014

(4) Countermeasures for Disease Epidemics
Based on the experience gained during the H1N1 influenza epidemic in 2009, we are considering and pursuingcountermeasures for the recurrence of such epidemics. In 2013, the Group mainly focused on countermeasures for
influenza for the 2013-2013 seasons. In addition, to respond to the dangers of possible epidemics, such as the one thatmight occur following the transmission of the H5N1 avian influenza virus to and among human beings, we are working toprepare BCP contingency measures.

Structuring Business Continuity Management Systems (Furniture)
KOKUYO Furniture has been designated as the KOKUYO Group's pilot company for BCP activities. Beginning in 2007,
measures have been taken to identify and make assessments of risks in major business processes within the supply chain
and prepare recovery scenarios and related plans. In fiscal 2008, KOKUYO's business processes related to office furniture,
construction material manufacturing and shipment, and customer response and service systems received certification under
BS 25999-2 standards for its Business Continuity Management System (BCMS). This was the first such certification
received by a company in the office furniture industry in Japan. After 2012, based on the issues that have been brought tolight after the Great East Japan Earthquake, we are promoting the reconstruction of our unique BCP activity plans with thegoal of delivering a better and highly practical system.

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

Issues of BCP Initiatives and the Redevelopment of Action Plans
In the aftermath of the Great East Japan Earthquake, KOKUYO reminded us of our role
as a part of infrastructure companies because we received a series of restoration
requests from infrastructure companies. Although we have implemented the business
continuity management initiatives as a manufacturer, we faced with various difficulties
during and after the Great East Japan Earthquake, causing inconveniences to ourcustomers and bringing the deficiency in planning to our attention. Based on theexperiences, we are clarifying problems with the front, production, logistics, delivery,and systems by functions and sectors to formulate feasible plans by clarifying priorities.

A picture taken at the walkthroughtraining.

Additionally, we organize the actions to take in response to emergencies in detail inchronological order by functions to create more workable systems. We will continue to familiarize employees with themeasures by each function and bring about a continuous improvement in BCP initiatives.

39

KOKUYO Group CSR Repor t 2014

While the KOKUYO Group has expanded its overseas bases in Asian countries (China, Thailand, Malaysia,
Singapore, Vietnam, India and Indonesia), we think it is extremely challenging to respond without any delay tocrisis occurred overseas because there are not too many things we can do from Japan in the initial stage. As
the phrase goes, protect your own safety on your own, people are required to make decisions and take actions
in response to crisis right then and there. To this end, we have started laying out a system to encourage
employees to calm down and take actions in the event of crisis. At present, we are working on clarifying
possible risks involved with responsible persons overseas and offices in each country to consider measuresand add them to crisis action plans. As for the production base, although certain levels of system and action
procedures exist, we feel the need to examine its validity and make recurring improvements of the measures.
We continuously improve the measures under constant review, without being satisfied with the status quo ofcountermeasures against crisis, regardless of home and abroad.

Persons in charge of crisismanagement system in
KOKUYO, China

Action manual in Chinese

Firefighting training at a plant inThailand40

KOKUYO Group CSR Repor t 2014

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

42p INSPINE - Inspiring Innovations in Office Chairs

53p Views Regarding Quality Assurance at KOKUYO S&T

44p Campus Notebooks with Ruled Lines Designed for Study

55p Views Regarding Quality Assurance at KOKUYOFurniture

47p The UD+3 Series
50p Red Tech: Red-Colored Instant Adhesive That Turns
Transparent as It Dries
52p KAUNET Offers Ease of Choice and Awareness

57p Activities for Creating a Menu of Countermeasures for
Disasters
60p Customer Support and Services
62p A System for Utilizing Feedback from Customers

Views linked with the corporate philosophy, which have been highly valued by KOKUYO
Every product rests on customer dissatisfaction. The moment when a

The products today exist for products tomorrow.
There are no products that are absolutes
Shonosuke Kuroda

customer picks up a product, and the second when he or she finds
satisfaction in some part of the product, the demand for "better products"
starts there. Unlike high-tech products, as stationery is a product thatnecessarily does not attract interest from the community, KOKU YO
constantly value the attitude of making a direct effort to keep our ears open
for customers' next demands.

With Customers (Consumer Issues)

The information technology environment surrounding workers is rapidly changing. KOKUYO focused on the changes inworking styles and attitude and developed office chairs, INSPINE, with a new design that supports individual's movementand differences in physique, offering seating comfort.

The Half-Century History of the Office Chair Development Is Consolidated into theFundamental thought of Three Principles Plus One.
OKUYO's history of developing office chairs dates back to half a century and the development also involved the research ofergonomics and working styles. In the efforts, although we used to be meticulous about the form of the backrest and seating
surface, or the movement of the backrest, we questioned anew to see what has been truly valued, making clear the "threeprinciples plus one" for comfortable chairs. These principles have been shared not only among development members but
also in the entire value chain. Also, by making a declarative statement to customers, we promise to deliver value unique to
KOKUYO that also leads to an increase in proposal capability.

Unique Function and Leading-Edge Aesthetic Sensitivity Created from the New Production
SystemTo further respond to the needs of customers and surpass their expectations, themarketing and development functions for office chairs have been consolidated to launcha Chair Value Team in 2012. A team of highly professional members in marketing,development, and production work together and continue creating new value, instead of
manufacturing in the form of a relay. In the development of INSPINE office chairs, thedevelopment team focused attention on changes in working styles and attitude involvedin the rapidly changing information technology environment surrounding workers.
INSPINE office chairs take new ideas of offering support to individual differences in
INSPINEphysique to offer seating comfort, combined with functional beauty suitable foradvanced office settings. By making use of our studies and know-how in working styles and ergonomics we have gained in
the past, a team of highly professional members brought together the wisdom in each function to pursue a unique set ofvalues.

The Flexibility of a Single Wire That Supports Advanced Working Style
To flexibly follow the posture and movement of workers, the backrest has a wired lumbar
support for the first time in the industry in which the backrest is wired with a single wireusing a certain tension. Also, the wire is designed to slidingly move along with thechanges in body pressure toward the upper or lower part of the backrest, distributing the
body pressure properly according to the changes in body posture. The seating surface
has a unique posture support seat where a cushion layer is placed on a base layer that

Wire Lumber Support

has a surface shape for supporting the pelvis, as well as the function to support theposition of forward inclining that optimally adjusts the seating surface angle. These features prevent the waist from shifting
forward, which is known as one of the problems of losing the seating posture, bringing the stability in retaining posture andrealizing proper dispersion of body pressure in various postures from the position of forward and backward inclining.

42

KOKUYO Group CSR Repor t 2014

Under the new system of the Chair Value Team, we were able to promote trustwith sales by receiving any type of inquiries, expanding the opportunities for
feedback from customers by leaps and bounds. It also gave us a sense ofunity across the entire value chain. For the development of INSPINE officechairs, we made a prototype once a week and everyone from VT members
and partner plants gathered together to make a valuation, trying to fine down
the office chair. The entire members involved in the development repeatedhearings with customers and the sales to keep thinking endlessly. The
INSPINE office chairs are the product that was born after a process ofcondensed adhesion.

43

Wataru Saito, Kazuo Oku andYasutaka Takahashi
Chair Value TeamKOKUYO Furniture

KOKUYO Group CSR Repor t 2014

With Customers (Consumer Issues)

After a thorough study of 500 notebooks used by actual junior and high school students, KOKUYO has successfully
developed a new series of Campus notebooks: Campus notebooks with ruled lines for writing (designed for learning
humanities subjects, making it easy to read and write) and Campus notebooks with ruled lines for drawing charts (designed
for learning science subjects, making it easy to draw charts).

Further Evolution of a Smash-Hit Series, Campus Notebooks with Dotted Lines
In the evolution of the Campus notebook series, which the first series was released 39
years ago, we have launched a new series, Campus notebooks with dotted lines, in
2008, developed to provide learning support for junior and high school students. Afterthe new series was launched, as the notebook market continues to expand in thecontext of new launches of ruled notebooks by various manufacturers, we started to
notice the actual situation of users, including "there are so many types and I don't know
which will work best for me" and "the existing ruled lines are hard to use depending on
subjects." As we listened to the opinions of actual students, even though the new series
with dotted lines enjoyed great popularity and became a students' standard notebook,we saw the necessity of further evolving the series and embarked on the developmentof Campus notebooks with ruled lines designed for study.

Released in 2008
Campus Notebook series withdotted lines

New Concepts of Notebooks Designed for Humanities and Science Subjects, which Were
Developed after a Use Survey
A Thorough Study of 500 Notebooks Used by Actual Junior and High School Students
To begin with, a total of 500 used notebooks were collected from junior and high school
students for intensive study. By making a detailed analysis of present conditions, suchas which notebooks are used for which subjects, how they use their ingenuity according
to each subject and what characteristics are found in a neat and easy-to-readynotebook, we repeatedly examined the new ways of ruled lines and dots that best
support the learning needs of students.
After spending many days discussing, it came to our attention that the age group of
junior and high school students are at an important point where they have to decide
whether to choose humanities course or science course for the consideration of theirUsed notebooks collected fromstudents

future path. In such a background, a new idea of notebooks designed for humanities and science subjects was created by
employing a new angle, in hopes of offering the fun of choosing notebooks appropriate to subjects, as well as the ease ofuse and review.

44

KOKUYO Group CSR Repor t 2014

To study ruled lines and dots appropriate to subjects, we repeated hypothesis testing and trial production and invited 100
students from junior and high schools to compare notebooks to directly obtain comments and requests about usability. As aresult, the development allowed us to offer two products: Campus notebooks with ruled lines for writing (designed forlearning humanities subjects, making it easy to read and write) and Campus notebooks with ruled lines for drawing charts(designed for learning science subjects, making it easy to draw charts).

An Inventive Approach to the Printing Technology for Unobtrusive, Visible Dots and Lines
The development of Campus notebooks with ruled lines designed for study also required hard work in the production stage.
In addition to know-how accumulated from the development of Campus notebooks with dotted lines released in 2008, it took
a lot of trial and error in order to be creative with the size and shade of dots between ruled lines for a notebook with lines fordrawing charts. Even though dots are necessary for junior and high school students, the shade and size of dots must
maintain a fine balance so that they will not interfere when students read back. Additionally, it was an obstacle to evenly
print small light gray dots throughout a page, requiring repeated tests.
Points That Match the Trend of Subjects
Along the development, it was brought to our attention that a notebook used for humanities subjects that was easy to readback had an appropriate amount of blank space, as well as that a notebook used for science subjects that was easy to readback indicated students' ingenuity in drawing charts. After a process of trial and error, blank spaces were added to a
notebook for humanities subjects (with ruled lines for writing) while maintaining the average size of text to be written on anotebook. For a notebook for science subjects (with ruled lines for drawing charts), it was designed to make it easy to draw
charts by adding dots between ruled lines about quarterly apart.
Okurigana can be written in the margins to maintain the balance of the text, making it easy to read!
Use small dots as a mark to draw curved lines of values in detail!
Thank you! Campus notebooks marked the 39th anniversary in 2014. To express our hearty thanks to our customers, weare holding a series of appreciation events to celebrate the 39th anniversary.

Adding a Special Symbol to the Cover of Notebooks to Make It Easy to Find at Stores
The development team also made the best use of inventiveness in designing a
notebook cover so that not only students but also parents can easily find new Campus
notebooks in stores to facilitate the distinction of the Campus Notebook series with ruled
lines for study, as well as the distinction of notebooks with ruled lines for writing and fordrawing charts among many types of Campus notebooks. The notebook with ruled lines
for writing was designed with colorful two-tone color combination and that one fordrawing charts was designed with sophisticated gray-based color combination.
Additionally, both covers were designed with a special mark indicating each feature, which was placed next to the logo on acover. For a five-pack version, an instruction was added to a back cover to show examples of how to use ruled lines
because the content cannot be checked from the outside.

Teachers Chose as the Most Recommended Notebook to Students for each Humanities andScience Subject
A survey of 150 junior and high school teachers was implemented using ten types of notebooks with functional ruled line*,
including those from other manufacturers to study notebooks that they want to recommend to students for each humanities
and science subject. The result showed that teachers chose Campus notebooks with ruled lines <for writing> and Campus
notebooks with ruled lines <for drawing charts> as the most recommended notebooks to students for learning eachhumanities and science subject.
* Notebooks with functional ruled line
A type of notebook that has auxiliary lines and dots for ease of writing/drawing text and charts with enhanced readability.

45

KOKUYO Group CSR Repor t 2014

It is a product where I was involved in product planning for the first time. I took
part in the development in hopes of delivering the fun of neat note taking tojunior and high school students. I hope the notebooks in which students took
note neatly will become their one and only study guide. (Fujitani)
Junko Miyanishi and Shingo

I sometimes receive a letter from customers saying they succeeded in
Fujitani
entrance examination of a high school/university because they studied with
Paper Stationery Value Unit,
Campus notebooks. I am always delighted to hear such a positive comment
Creative Products Dept.
KOKUYO S&T Co.,Ltd.
because it gives me a realization that Campus notebooks are serving theiruseful purpose. I will continue to develop better products to support the students' learning. (Miyanishi)

46

KOKUYO Group CSR Repor t 2014

With Customers (Consumer Issues)

The UD+3 (Universal Design Plus 3) series offers furniture designed for public spaces, which are developed jointly withsensitive users.** Sensitive user
Sensitive users are those who are people with visual impairments, wheelchair users, and general users with difficulties, such as hemiplegia.
While they have limitations on transportation, movement, and recognition, they are our key partners because they are sensitive toward
challenges and shed light on hidden difficulties and the stress they experience by sharing how it should be and necessary processes.

The UD+3 Series with Attentive Usefulness
The UD+3 series were furniture developed for public spaces to offer comfort to any users. Through an exhaustive study ofphysical and psychological difficulty provided by users with disabilities, we successfully refined the existing values.
Beginning with the release of Madre chairs in 2010, four series are available at present, including the LISMA foldable
conference room table released in 2011, the PADRE series released in 2012, and the SATIO series released in 2013.

Development Process That was Evolved in Step with Customers
1. The Momentum of the Birth of UD+3 Series
Taking advantage of municipal mergers nowadays, KOKUYO Furniture has been engaged in a number of improvement
projects for the workplace environment around reception desks in local government offices. Despite the circumstances,
KOKUYO Furniture at that time did not have any suggestible products specializing in waiting spaces that are of capitalinterest to local governments. In view of the growing elderly population, the social progress of persons with disabilities, andother social trends, the company has embarked on the development of lobby chairs around a reception desk designed withthe use of diverse users in mind, aiming to respond to the increasing needs for spaces that anyone can use safely andcomfortably.

Three Approaches toward Universal Design
KOKUYO supports the idea of Universal Design that creates a reliable product adiversity of people can use safely and equally. In order to reflect the idea morestrongly, the UD+3 series uses the following three approaches to study productusability with thoroughness:
1. UD products are tested in a realistic environment close to usage scenes
2. UD products are tested based on a series of user's movement
3. Users' unconscious stress are discovered through dialogue with users
These three approaches are practiced in a workshop by inviting users of various ages, genders, and physical47

KOKUYO Group CSR Repor t 2014

characteristics. After testing, UD products are granted a mark to prove that they were designed with universal designprinciples.

2. Dialogue at a Workshop Featuring the Participation of End Users
The development team then made an attempt by holding a workshop with users with disabilities. Wheelchair users andthose with paralysis of the extremities and visual impairments experience limited movement and muscle power and theytend to be extremely sensitive to any slight difficulty, so they gave the team additional details that development members
might overlook, as well as a fresh perspective that they could not think of. Another advantage of carrying out discussions
with end users was that the team got to know their psychological stress, such as being overly concerned, feeling pressed,
and uncomfortable, helping us to improve the quality of usability.

The team began by understanding
the problems they experienced in a
replicated waiting room.

Each idea was verified right thenand there. Using paper, the teamdiscussed how long the distanceshould be between a wheelchairand seat.

3. Ripple Effects of Workshops
After the launch of the Madre series, it came to the attention of the development team that there was a difference in thelevel of awareness between sales personnel who took part in a workshop and those who did not. It became apparent thatsales personnel who determined the necessity of UD gave a product description to end users more diligently. To solve this,a product briefing session was held by inviting sales personnel who did not participate in a workshop in order to makenecessity of UD appreciated by them. At the session, end users talked about problems they experienced at the reception
desk of a government office and various effects of ingenuity implemented for the Madre series, so that the sales personnel
could understand why UD products were necessary and how they were effective through actual experience. In closing,several participants made a simulated presentation to customers to check each other's understanding.

4. Expansion to a spatial proposal
The products developed through a trial and error process are packed with usability
designed for many people. Also, KOKUYO makes a proposal of universal design forplanning itself at the time of installation because we got the know-how, such as thearrangement of lobby chairs and the measurement of traffic lines, though study by three
approaches.
Aiming for a public space where anyone can spend time without being overly
concerned

Saitama City Minami Ward Office

After its release, the UD+3 series has been widely used in public spaces, such as local
governments, medical institutions, and banks across the country. Customers also sent us comments of agreement saying
they were surprised to know the UD+3 series was developed with a well-reasoned plan. Additionally, the release of tables(LISMA) and chairs (Satio) for conference rooms of community centers and libraries for the general public was anothersuccess. KOKUYO is gradually expanding its types of spaces suitable for proposing universal design.

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KOKUYO Group CSR Repor t 2014

Creating Better Products in Step with Customers
What we have reaffirmed from a workshop is that the important things to create pleasant and comfortable public space formany people are not only to enhance the usability of each piece of furniture, but also to improve physical and psychologicalusability though the space designs. To that end, we believe that an important key is to create a partnership where we
consider how customers feel and work together through dialog, instead of merely listening to their voices. We arecommitted to continuing our positive attitude to work with customers to brush up on products while playing a role indeveloping public space where many people can use without anxiety.
KOKUYO Won a Number of International Awards for Universal Design:
Universal Design Award 2012
IAUD Award 2012 Product Design Gold Award
IAUD Award 2013 Product Design IAUD Award

49

KOKUYO Group CSR Repor t 2014

With Customers (Consumer Issues)

The liquid of instant adhesives that are available in general is colorless and transparent. To solve a customer concern that itis difficult to see where and how much glue is applied, KOKUYO developed an instant adhesive, Red Tech, in which atransparent adhesive stays red when applied but changes to transparent as it dries.

Major Dissatisfaction with the Way of Application
When KOKUYO conducted a survey to determine why customers were dissatisfied with instant adhesives, a number ofcustomers reported the difficulty of application that it was hard to see where and how much glue was applied, besides thefact that the glue dried out and it became unable and it was difficult to get the glue off of a hand (n=531, surveyed by
KOKUYO S&T). To that end, KOKUYO focused attention on the method of application and started working towards thedevelopment of red-colored instant adhesive that was easy to see where and how much the glue was applied, as well as toprevent running off or applying excessively, and after application, the red-colored adhesive should turn transparent as it
dried.

The Pursuit of the Technology of Glue That Has a Color and Then Turns to Transparent as it
Dries
KOKUYO started off by thoroughly sorting out the technology for changing to transparent glue. We repeated tests using
various methods, such as the technology using heat retained in stationery to remove the color and the reaction with air withthe use of pH indicators like stick glue. As a result, we focused attention on the technology called photochromic, which uses
light to remove color, as it worked best with instant adhesive. After three years of trial and error, photochromic materials
were successfully developed and by developing unique production facilities that enable mass production, KOKUYO madethe development of red-colored instant adhesive possible, introducing glue that is red when applied and becomestransparent as it dries. The instant adhesive developed using the photochromic technology has obtained a patent for its
composition.

The Structure of the Main Unit Offers the Ease of Application for Adhesive That Does not Harden
EasilyTo further pursue the ease of application, KOKUYO has made all kinds of efforts todeliver a neat finish by introducing a useful inclined nozzle to make it easy to apply glue
with precision and a pushbutton mechanism for the case to make it easy to adjust theadhesive amount. In addition, to prevent adhesive from hardening easily and to use fora long time, the structure of the cap has great sealing performance so as to use it in an
upright position, bringing together the wisdom of KOKUYO employees to complete the case for the main unit.

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KOKUYO Group CSR Repor t 2014

KOKUYO's successful adhesive products include Pritt; stick glue released in
1969, and Dotted Liner; tape glue released in 2005, and a number of productseries have been deployed. The instant adhesive was one of the products that
we explored ideas trying to create new value further. However, the knowledge
and know-how of adhesive bonding and adhesion that have been
accumulated over a long period of time could not easily undergo horizontal
expansion. As a result of trial and error trying to commercialize the technology
of changing red-colored adhesive to transparent while maintaining the quality
as an instant adhesive, finally seeing the possibility of commercialization, wefaced a major challenge in that the red color could not be maintained before

Masako Yanai, Takashi Ohashi
and Shogo Kobayashi
Glue Stationery VU
Creative Products Department
KOKUYO S&T

filling in the tube. We spent a year and a half reviewing the material and after
uniquely designing and developing production facilities, we managed to construct a framework for mass
production. We will continue to upgrade our technical skills to solve customers' problems.

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KOKUYO Group CSR Repor t 2014

With Customers (Consumer Issues)

KAUNET offers mail-order and online shopping services of office supplies. Its value added is more than just price and agood selection of merchandise. KAUNET is committed to delivering catalogs and website by making it easy for thecustomer to select items and to offering its awareness to come up with solutions to help customers overcome any
dissatisfaction and problems that arise.

KAUNET's Website Is Developed to Deliver Ease of Choice and Awareness
While KAUNET publishes its mail-order catalogs twice yearly, KAUNET's website is
updated daily to include new products and information. For that reason, we are seeing
growing importance of the website, and according to the results of a customer survey,
customers are expecting to see a website that allows them to place orders accurately
and expeditiously. Because most customers browse a product detail page that gives
details about a product and its use situation, we made efforts to enhance information
provided on a product detail page. Other enhancements include characters and images,
as well as product videos for certain products to transmit product usage and

A product detail pageuser-friendliness that cannot be fully expressed using printed catalogs.

Value-Added Original Products, Kau-Core Premium, and Kau-Core Price Offering Affordability
The elements of ease of choice and awareness are also incorporated into thedevelopment of original products, Kau-Core series. Kau-Core Premium offers
value-added products by adding a new twist and originality unique to KAUNET, such asa flat file with reinforced spine, which is equipped with a durable file spine, anddrawstring trash bags for shredded paper, which have a mechanism to prevent paper
scraps from flying around, offering original products with small schemes to help
customers overcome any dissatisfaction and problems that arise. On the other hand,
Kau-Core Price handles copy paper, clear holder sheets and an array of products atlower prices, which also come with dependable quality.

Fall/Winter 2013 Catalog and logo
marks for Kau-Core

To offer ease of choice and awareness in selecting office furniture, KAUNET
had made various improvements, such as the notation of catalogue by addingreference index of comfort for office chairs and free returns to enhancecustomer services, so that customers can purchase furniture with an easymind.
However, some customers feel uneasy about using online shopping topurchase office furniture because they do not know how to make choices andthat they cannot see actual products. To relieve such concerns, we launched
counseling services where our expert staff helps customers select furniture.
Additionally, we have implemented a free trial program of our leading product,
Luna Chair, so that customers can actually try the level of comfort before theybuy, which is the first of its kind in the industry, and it has been received wellby customers.

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KOKUYO Group CSR Repor t 2014

With Customers (Consumer Issues)

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

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

Quality Maintenance and Improvement(1) Tightening the Quality Assurance System
KOKUYO S&T has realigned its quality assurance organization and systems,
strengthened related corporate governance activities, including internal auditing
functions, and reviewed its manufacturing system, including the close examination of
the content of quality assurance operations. KOKUYO's Partner Plant also conducts
thoroughgoing checks not only regarding cost and delivery issues but also from theperspective of quality.
(2) Full-Scale Introduction of the Quality Cost Concept
Quality cost comprises the investment and expenditures needed for quality assurance
activities. Quality cost is divided into three categories—prevention, assessment, andfailure costs, and it is considered one indicator for implementing quality control policy.
Beginning in 2010, KOKUYO made a full-scale introduction of the concept of “failure
cost.” By measuring not just the number of instances of faulty products that entered themarket and customer complaints but also the cost of dealing with these, KOKUYO is
working to strengthen the focus on quality, clarify the magnitude of claims against theCompany, and stimulate initiatives to make improvement. The actual results by plant are
analyzed, used to compare plant capabilities for delivering quality objectively, and used
to set priorities for quality improvement.

People in charge of productdevelopment and quality assurance
get together to check out productquality(3) Introduction of Product Risk Analysis Using the R-Map Method
To prevent accidents involving products, KOKUYO has begun to analyze the risk inherent in its products using the risk map(R-Map) method, adopted from the field of reliability engineering and recommended by Ministry of Economy, Trade andIndustry. The R-Map method uses a matrix, with “frequency of occurrence” on the vertical axis and “level of damage” on thehorizontal axis, to express the level of risk. This approach is useful in preparing safe design specifications for products andmaking assessments of safety before the fact and after the fact. Use of this method is spreading among companies
concerned with manufacturing excellence.
(4) Conduct of Plant Diagnoses (Quality Audits)
To maintain and increase product quality among KOKUYO's more-than-10,000 items, it conducts plant diagnoses (quality
audits) in its plants in Japan and overseas. This involves the examination of the framework of individual plants and theclarification of their respective strengths and weaknesses. This information is then used to make improvements in
productivity and quality. In addition measurements of the capability of various plants to deliver quality products is then put togood use in developing optimal production strategies.

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KOKUYO Group CSR Repor t 2014

In September 2013, KOKUYO Camlin opened the Immigration Quality Gate
(IQG), which is designed to conduct an acceptance inspection of purchased
goods produced in partner plants in India and overseas on a consignment
basis, after remodeling a portion of the mother depot (main physicaldistribution base) in an outlying city of Mumbai, Bhiwandi. The IQG wasestablished with the aims of achieving better quality more efficiently andeffectively by consolidating its quality inspection system and improving skills

Measuring a paper pressureusing a machineby working together with the S&T quality assurance department to acquireand accumulate knowhow in quality control. The IQG was named with the hope to ensure quality control that aswith airports, products that pass the gate get the all clear to make their ways to markets. Looking ahead, we areplanning to open a similar IQG in the Delhi area in the future.

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KOKUYO Group CSR Repor t 2014

With Customers (Consumer Issues)

KOKUYO Furniture expanded the scope of its ISO 9001 certification in 2010 to include furniture for public-sector facilities
that are accompanied by construction and then again in 2012 to include construction material products, such as room
dividers and partitions. As sales in overseas markets are expanded, KOKUYO Furniture will prepare to meet global quality
standards and aim for a level of quality that will be accepted in various countries the world.

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

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

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

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KOKUYO Group CSR Repor t 2014

With the aim of improving the quality of delivery services offered bydeliverymen who serve as a contact point with customers, KOKUYO Logitem
has begun holding an annual National Driver Competition since 2010. This
company-wide competition is joined by representatives of delivery partners
from around the country who are selected from a total of nearly 800 drivers,
competing with each other in the skills that they practiced every day on theirjobs, such as delivery services, assembly techniques and hospitality.
On August 10, 2013, the final game of the fourth National Driver Competition
was held on the eighth floor of the KOKUYO Head Office, and it wascontested by three teams from partner companies who passed thePeople in charge of productdevelopment and quality
assurance get together to checkout product quality

competition's preliminary rounds that lasted about three months from May atdelivery centers around the country.

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KOKUYO Group CSR Repor t 2014

With Customers (Consumer Issues)

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

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

(1) Implementation of demonstration experiments under various seismic motions and conditions
After the Great East Japan Earthquake, an increased number of customers, especially from around the Tokyo area, sent us
consultation requests to prepare for earthquakes, and we saw many requests that cannot be solved with verification
experiments for vibration in the past, asking us how to prepare for earthquakes from the perspectives of BCP (business
continuity plan) and cost advantages, as well as reasons why there was damage even though countermeasures weretaken. To respond sincerely to these requests and make a concrete proposal on countermeasures, we implemented
vibration experiments according to the seismic intensity scale to obtain data sets and study the behaviors of storage
furniture by using different methods of fixation. The experiment also recreated seismic waves that occurred in Kobe during
the Great Hanshin-Awaji Earthquake, and the killer pulse,* which is known to overturning of furniture, as well as similar
long-duration seismic waves that hit Sendai, which is one of the characteristics of the Great East Japan Earthquake. We
spent more than 200 hours and experimented 300 patterns to obtain data.
* What is a killer pulse?
In seismology, the killer pulse is a period of earthquake of one to two seconds, and it is known to damage wooded houses in particular. In
general, if the shock of the earthquake is closer to the natural period of a building, buildings tend to shake more intensively. The killer pulse is
known to be a period that medium-low story buildings and wooden houses become most vulnerable to damage, and it is a type of seismic
activity that demands maximum alert.

Equivalent to the intensity 6 upper

Equivalent to the intensity 5 lower

level
Left: With wall fixtures
Right: Without wall fixtureslevel
Left: Without connectors
Right: With connectors

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KOKUYO Group CSR Repor t 2014

(2) Developing a new menu of countermeasures against earthquakes for office
Based on the enormous amounts of data acquired from verification experiments, we are developing objective evaluation
criteria of earthquake-resisting capacity for furniture by rationally understanding the relationship between seismic waves
and measures against earthquakes. On that basis, we propose a selection of earthquake-preparedness plans for office,which customers can make a choice according to the level of preparedness and costs they are looking for. The
preparedness levels are determined not only based on the criteria for overturning of furniture according to the seismic
intensity scale but also, for example, from the perspective of BCP (business continuity plan) to provide an easiness ofrestoration. Also, for customers who select an earthquake-preparedness plan with a higher level of security, we carefully
conduct a preliminary survey to study your office and make a proposal based on floor and wall materials and the structureof office. Please be sure to look into this service.

(3) Raising the Level of Awareness
KOKUYO is working aggressively to raise the 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 haveincluded the difficulties faced by management immediately after the Earthquake (using KOKUYO Tohoku Sales Co., Ltd., as
an example), disaster countermeasures from the perspective of business continuity planning (BCP) (KOKUYO S&T),
designing offices that can withstand strong earthquakes (KOKUYO Furniture), and other topics.

(4) Proposing Stockpiling of Emergency Supplies to Corporations
How to stockpile emergency supplies is a necessary part of BCP for organizations.
KOKUYO is, therefore, developing its disaster solution business, which includes offering
proposals for disaster countermeasures that are tailor to the needs of individual
customers. KOKUYO's guidebook, SONAeL, for companies on stockpiling of emergency
supplies and the Disaster Countermeasure Expert Series of KOKUYO original products
for coping with disasters have been highly appraised. These provide practical andworkable solutions to disaster issues, and their approach is from the perspective ofanalyzing and improving office storage conditions.

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KOKUYO Group CSR Repor t 2014

The KOKUYO Group has two companies: KOKUYO Furniture; a company that accumulates know-how on
countermeasures to prevent overturning of office furniture and designing offices that can withstand strong
earthquakes, and KOKUYO S&T; a company that not only offer emergency supplies but also a service for
proposing stockpiling of emergency supplies.
Bringing together our Group's know-how enables us to offer proposals special to KOKUYO, such as
implementing a disaster-preparedness plan at the timing of new construction and relocation and bringing awell-balanced stockpiling plan in consideration of everyday work environment and work efficiency. KOKUYO
believes that improving the disaster preparedness in each company speed the recovery of supply chain during
times of emergency, allowing us to continue with economic activities. We hope to serve as a bridge to makeoffices in Japan stronger.

A desired future image aimed at with a joint effort of S&T and FN.
This service also works simultaneously with furniture delivery, and customers also enjoy the advantage of being able to place bulk
orders.

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KOKUYO Group CSR Repor t 2014

With Customers (Consumer Issues)

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

Accuracy, Readiness, Kindness, and Politeness as Our Motto for Improving Customer
Satisfaction
With the goal of improving customer satisfaction, we offer a group-wide customer
support center to respond to inquiries, proposals and requests sent from customers. In
fiscal 2013, we received a total of nearly 120,000 inquiries and of them, nearly 90% of
the customers called our toll-free number. At the customer support center, where ourrepresentatives receive calls from customers in the first place, we hold study sessions toimprove product knowledge and make efforts to create better database of productinformation with the aim of serving customers with accuracy, readiness, kindness andpoliteness. In addition, our website introduces frequently asked questions and answers,
as well as improvements made with the help of customers.

A portion of the inquiry menu
provided on our website

Experience-Based Training That Listens to Customers to Apply into Day-to-Day Work
The KOKUYO Group has enhanced its employee training by providing them with
opportunities to experience the actual work site of customer service center and hear
opinions directly from customers because they do not get a chance to come face-to-facewith customers at other times. This training has been successful in bringing customers'
valuable inputs and opinions to manufacturing sites. Also, similar training is offered to
new employees in May to get the experience of working in customer support center.
Listening to customers' feedback is vital in knowing the basics of manufacturing. The
training provides employees with good communication technique with customers andhow customers' feedback is utilized for developing products. They work in tandem withan experienced-operator to respond to an array of inquiries submitted to the customer
support center. In addition, international employees who newly joined the KOKUYOGroup experience speed-recognition technology, which converts the content of
conversation with customers into a text. This training aims to cultivate necessary skills,
such as readability and an ease of utilization, to share accurate information about

An employee role-plays a training
scenario at a new employees'
training. To prepare for actual
training session, participants learn
communications skills, including theability of attentive listening, capacity
to empathize and the speaking
ability.

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

Implementation of Product Movies Introducing Convenient and Safety Use of Products,
Products with Excellent Features and Our Unique Efforts
Using the inquiries submitted to the customer support center, we create a movie tointroduce contents that are difficult to express by phone and letters. All of the movies wecreated are published on the website under the KOKUYO's room for instruction manualsof the KOKUYO Channel page. The KOKUYO Channel uses unique approaches tointroduce our products, how to use, corporate activities and employees' efforts so that
customers can learn more about us.
In addition to the KOKUYO's room for instruction manuals of the KOKUYO Channel
page, other sections include KOKUYO G Men; a section that is dedicated to reveal thesecrets of products, Let's Report!; a section that introduces working styles practiced in

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KOKUYO Group CSR Repor t 2014

offices at KOKUYO and the coverage of events that are held for improving intellectual
productively, Benri no Tane; a section that focuses on KOKUYO products with uniquefeatures, Shuukatsu no Tobira; a section designed to introduce activities for student job
seekers and KOKUYO Kudasai!; a section that actual employees choose and introduce
the Group's unpopular products and activities.

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KOKUYO Group CSR Repor t 2014

With Customers (Consumer Issues)

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

All KOKUYO Employees Are Pledged to Accept Customers' Feedback with Sincerity
In order to share customers' feedback across the entire group, we use the intranet, VoiceClip, to publish feedback
submitted by customers excluding any personal information to share with all group employees. In addition to angry
complaints and words of appreciations given from customers, which are updated weekly, VoiceClip includes customers'
feedback submitted via Twitter and blogs and the results of customer surveys, which are provided to customers throughproducts and promotional campaigns. Starting 2012, we are working to improve visualization by displaying customers'
feedback on a top page of the Group's intranet.
Additionally, the customers' feedback submitted to the customer support center are summarized in a database, VoiceDB,
excluding personal information, so that the Group employees can access the database to freely navigate through previous
feedback according to purposes.

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KOKUYO Group CSR Repor t 2014

KNC Laboratories Co., Ltd. mainly engages in OEM production and R&D
manufacturing of chemical compounds to assist chemical manufacturers in
the development stage. The company uses printer labels on bottles filled withchemical compounds before shipping to customers. Because of thecharacteristics of their products, they need to use printer labels that canwithstand refrigerator and freezer conditions. For that reason, they carry out
their own quality inspection to test the labels for endurance against sweating,smudging and running of ink when bringing to room temperature from a
refrigerator/freezer.
We visually confirm that KOKUYO's water-resistant paper labels are highly
water-resistant, just like the name suggests. The labels also have a great
texture and are best suited to use on our made-to-order, high value-added

Yasuhide Kuriyama and Mayumi

products, which requires extensive refrigeration and freezing. Although we
Furukiuse computer and free printing software (Awase Meijin) to print labels with a
KNC Laboratories Co., Ltd.
printer, the labels do not work well with some printers. I think the product increases usability by resolving thisissue and becomes a choice by many businesses.

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KOKUYO Group CSR Repor t 2014

With Employees
KOKUYO believes that the growth of companies is based on the growth of individuals who work inthese companies. KOKUYO, therefore, implements a range of initiatives to draw forth the fullcapabilities of a diversity of human resources, with differing personal attributes and differing ways ofthinking and values, to realize its own growth and development.

65p Personnel System

74p Achieving a Good Work/Life Balance

67p Human Resource Development Program

77p Support for Active Participation of Diverse Human
Resources

69p Enhancement of Global Human Resource Development
72p Basic Framework for Diversity

83p Labor Practices/Safety and Health85p Healthy Living and Mental HealthViews linked with the corporate philosophy, which have been highly valued by KOKUYO
Those who can bring changes to themselves can bring changes toThose who do not undergo personal transformation
can never bring changes to products
Shonosuke Kuroda

products, and because changes are brought to products, the society can be
improved and changed for better convenience of customers. KOKUYO
considers that products are ourselves and better products are generated
from our own growth. With the goal of generating better value for ourcustomers, new employees to the top management aim to learn constantly
to continue making progress.

With Employees (Human Rights/Labor Practices)

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

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

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

65

KOKUYO Group CSR Repor t 2014

KOKUYO is a company that proposes new ways of working and the future of
offices. As an employee, we are also promoting work style innovation,
including the future of offices and the utilization of IT tools. We are also
looking at the necessity of organically linking the personnel system, thestructure of nurturing human resources, work styles, space, and IT tools sothat a diversity of employees can fully demonstrate their abilities because themotivation and productivity of employees are largely influenced by work styles
and the support system.
We are committed to the realization of improved productivity by adding
diverse work styles so that Japan can overcome the extremely difficult social

Masayuki Hida
Personnel Measures Group,
Human Resource Development
Department,
KOKUYO

challenge of a declining birth rate and an aging society, as well as the decline
in the working population. It is the goal of KOKUYO employees to strive each day to develop further to polishthe value provided to customers.

66

KOKUYO Group CSR Repor t 2014

With Employees (Human Rights/Labor Practices)

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

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

Capacity-Building Programs
The KOKUYO Group has been holding annual cross-industry exchange training, better
known as the Open Challenge Program since fiscal 2011, by inviting participants within
the Group companies. This program mainly aims for (1) the expansion of visions (tobecome aware of their own potential); (2) acquisition of knowledge, skills, and mindset
required for future career formation; and (3) meeting new people (building of external
network). By offering an opportunity to learn together with excellent human resourcesfrom different companies and industries, the participants can be exposed to many morestimuli and learning opportunities that are not available within the company, which is one

GL Workshopof the greatest benefits. In 2013, a total of 48 selected participants of different ages andprofessions from different companies took part in nine different types of training courses
in Tokyo and Osaka, Japan.
In addition to above, as a new initiative in 2012, the GL Workshop (setting appropriate
challenges and enhancing the capability to develop subordinates) for group leaders,

67

KOKUYO Group CSR Repor t 2014

who are the core leaders in the workplace, was introduced. The two objectives of thisprogram are to provide strong support for managers at the working level and, thereby,
promote the implementation of the KOKUYO Group's strategy and to develop
management capabilities that will enable us to continue to show results as a team.
The program uses a unique approach by taking up actual problems and challenges
faced by managers, without taking the form of lectures. The participants share theknow-how that they have developed on a field and exchange opinions to seek out ideal
solutions. The program started by getting the participants to recognize the roles ofOpen Challenge Program

managers, and they learned how to set and solve essential challenges and points of developing subordinates. Since 2012,
over 300 people participated in the workshop.

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KOKUYO Group CSR Repor t 2014

With Employees (Human Rights/Labor Practices)

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

Emphasizing Human Resource Development throughout Asia
Program for Training Global Leaders
The KOKUYO Group aims to grow as an Asian company. Therefore, KOKUYO is
conducting a two-year Global Leader Development Program for global leader
candidates who will be responsible for leading the development of the Group in Asia. In
2013, the second year of the program, each team visited and worked at the overseas
subsidiaries of the KOKUYO Group for a short time and experienced diversity of thelocal subsidiaries. The aim of the program is to widen participants' vision and improvetheir adaptability as global leaders by examining a solution for business challenges
through communication with local members. The participants became determined andnurtured their value as a leader of Asia business during the last camp, and on the last day, they provided recommendations
to management executives.

Program for Training Global Managers
KOKUYO offered a training program for 24 global managers from six countries,
including Malaysia, Thailand, Vietnam, India, Hong Kong, and Singapore. This programsets the following three goals:

1. With an awareness of the responsibility as an executive officer of the KOKUYOGroup, recognize the desired roles in the workplace and concurrently learn theskills and attitudes required of executive officers.
2. Properly understand KOKUYO's corporate philosophy for use in daily decisionmaking and operations.
3. Raise awareness as a member of the KOKUYO Group to build a network withmanagers in other countries.

For the participants, we created a mailing list to build a sustainable network so as to lay out the framework to mutuallyfollow future action plans. Many of the participants shared the corporate philosophy and what they gained from the programwith junior staff upon returning to their countries after the program ended, taking the first step in becoming sure-footed
global managers.

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KOKUYO Group CSR Repor t 2014

Training for Country Managers in the Stationery Business
KOKUYO S&T offers training for country managers with the goal of sharing KOKUYO's
important corporate mission and values with managers in the Stationery Businessoverseas, as well as building personal human networks, acquiring knowledge, andimproving skills. In 2013, a total of 21 managers from four countries, including China,
Thailand, Vietnam and India, participated in the training program, which was the thirdyear the training was held. In addition to learning KOKUYO's founding spirit, corporate
mission, and history as a member of the KOKUYO Group, participants also had achance to experience the persistence and completeness practiced in manufacturing anddistribution facilities in Japan and meet with members of management, key persons, and others in the stationery businessto work to build personal human networks.

Exchange Meetings for Persons in Charge of Personnel Affairs in Chinese Subsidiaries
The KOKUYO Group holds monthly study sessions by inviting persons in charge of
personnel affairs with the aim of expanding the vision of each employee andstrengthening their expertise as they learn about the challenges faced by each company
and their efforts to overcome the challenges. A total of 18 people in charge of personnel
affairs in six subsidiaries took part in the first study session, and each person in chargeof areas besides Shanghai also participated in the session via videoconference. The
participants shared the status of labor management and challenges of managing
personnel affairs in each company to receive advice and suggestions from othermembers to actively exchange opinions, making it a meaningful exchange meeting. In this way, we are creating anenvironment where employees can feel free to express themselves and cooperate with each other within the KOKUYOGroup.
Because the laws related to personnel affairs change frequently in China, we also need to use the exchange meetings tostudy such laws. We are advancing efforts to create a team of professionals who can bring together the persons in chargeof personnel affairs in Chinese subsidiaries to support the development of business operations in China.

Training Workshop for Intellectual Properties in KOKUYO Camlin, India
The KOKUYO Group held a training workshop for the development members of
KOKUYO Camlin, an overseas subsidiary in India, with the goal of bringing about
recognition to learn about patents. At present, although there are not many applications
for the protection of intellectual property in India, the numbers of applications have beenshown sharp growth in recent years. While KOKUYO Camlin has previously filed forregistration of the design and trademark, it has no experience in patent applications. For
that reason, the training workshop provided an explanation of the intellectual propertysystem in India and introduced case studies of patents in KOKUYO. The development

Participants from the Vasai Plant,
KOKUYO Camlin

department of KOKUYO Camlin is planning to increase its workforce by adding
approximately 20 people for the next year and is expected to see an increase in development products in future. We
therefore continue to make efforts to encourage closer cooperation with the KOKUYO Camlin R&D to make intellectual
property-related activities run smoother in India.

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

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KOKUYO Group CSR Repor t 2014

What we are aiming to realize is a group where self-directed, independentminded employees with strong wills and abilities have a deep sense of
empathy for KOKUYO's corporate philosophy to fulfill its corporate strategies
in Asian subsidiaries, regardless of race, nationality, gender, and concept ofvalues. In order to deliver growth to the company, not only Japaneseemployees, but also those who were hired from overseas subsidiaries must
understand the corporate philosophy, which defines the code of behavior, as
well as KOKUYO's unique ideas and concept of values. To become an “Asiancompany” (or “the honor of Asia”), KOKUYO will step up its drive to develop
global human resources throughout Asia.

71

Takeshi Watanabe
Global Development GroupKOKUYO Human Resource
Development Department

KOKUYO Group CSR Repor t 2014

With Employees (Human Rights/Labor Practices)

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

Sharing the Significance of Addressing Diversity
The KOKUYO Group has established the Committee for the Promotion of Diversity since August 2007 to address thepromotion of diversity as part of its business challenge. Additionally, each group company is promoting diversity activities,
and a Group's portal forum repots the Group's overall effort and that taken by each company to share within the Group.

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

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

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

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

Sick/Injured childcareleave

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

Family care leave

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

Nursing care leave

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

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KOKUYO Group CSR Repor t 2014

Short working hour system

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

Teleworking

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

Re-employment system

Eligible personnel include regular employees who left their jobs due to marriage, childbearing, childcare, job relocation of spouse, study abroad, volunteer work, 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.)* Related information:“Number of Employees Taking Leave for Childbearing and Senior Care”

73

KOKUYO Group CSR Repor t 2014

With Employees (Human Rights/Labor Practices)

The KOKUYO Group is committed to providing ideal working conditions with consideration forachieving a good work/life balance. These efforts have been recognized by the government andsix of the group companies have received a certification logo (nickname: Kurumin Mark) as ofDecember 31, 2013. 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, 2013
KOKUYO Co., Ltd., KOKUYO S&T Co., Ltd., KOKUYO Furniture Co., Ltd., KAUNET Co., Ltd., KOKUYO Marketing Co.,
Ltd., KOKUYO Engineering & Technology Co., Ltd.

A Workshop for Working Moms, Supporting Returned and Short-Time Employees
In May 2013, sponsored by the Solution Planning Department of KOKUYO FurnitureCo., Ltd., a discussion luncheon for returned and short-time employees for child care
was held in the Kasumigaseki Office. While it initially targeted workers who returned totheir jobs within the last two years, those who were interested in the system also
participated in the discussion to exchange information on the themes of challenges
faced by working mothers, how to overcome challenges, and the moment when theywant to work harder.
Participants took an active part in
While there were many opinions, such as changes in work conditions before and after
the discussion at the workshop
taking a childcare leave, various worries, and confusion associated with communicatingwith other workers, the discussion with other mothers who returned to their jobs, along with the story of their personal
experiences, helped relieve their concerns in some degree. As a company that proposes new ways of working to ourcustomers, we will continue to commit ourselves to provide ideal working conditions where working mothers can fulfill theirpotentials and play an active role.

I gave a birth to my oldest son in 2010 and became a working mother from
April 2012 after taking maternity leave. Although I worked shorter hours using
a flextime schedule, it took me considerable time to get used to a totallydifferent environment than when I worked alone. Every day, I felt reluctant togo home before my coworkers and felt anxiety that I had a limited amount oftime to spend time with my child, but at the same time, I wanted to think thatworking would not only benefit myself but also my child. When Abenomics,
which refers to Japanese government's measures, gradually started to call for

Ritsuko Kawauchi, KOKUYO RDICenterthe need to promote women's active roles in society, the RDI Center I belong
to was required to verify new services involving ways of working and learning.
To that end, with the goal of bringing satisfactory working/child-raising style tothose who are in a similar position as myself, we launched an information
website, WorMo, at the end of August 2013, to support work and learning forworking mothers. The website not only offers information associated withworking and children's learning, but it also organizes workshops and events
under the real themes of women's career strategies and children's creativity
that is fostered while playing.

74

An information website, WorMo,
supports the working and learning
style of working mothers

KOKUYO Group CSR Repor t 2014

Each working mother faces different challenges, which vary by the company system, environment, healthconditions of children, and partner's support. However, through these activities, we received many positive
opinions, such as "it is time to make plans and decide how my career should be. I will wait until my child getsolder to take action" and "By working short-hours, I became able to be aware of effective working habits." Wewill continue to provide support for women so that they can make a genuine choice to work without being
influenced by their life events.

Aiming to Raise Awareness of Promoting Diversity
The KOKUYO Group implements activities to raise awareness and other measures with the aim of creating an environment
where each employee respects each other's diversity and takes full advantage of individual abilities.
The promotion of diversity is not for some employees. It is important that each employee recognizes the promotion ofdiversity as a personal goal and takes an interest to raise awareness.
To that end, KOKUYO S&T publishes a diversity bulletin periodically to increase opportunities for employees to come incontact with the topics of diversity. The content of the bulletin not only covers the balance of work and life and support forthe success of women in the workplace, but also the articles aimed at gaining a better understanding of different cultures byintroducing overseas offices and interviews (voice of experts) with successful employees who are playing an active role witha sense of professionalism, regardless of gender, ensuring that the bulletin covers topics related to diversity from various
dimensions, contriving ways to get as many as employees interested in diversity.
In addition, we provide support for the balancing of work and nursing care so as to create an environment that employees
can bring out their own strength. Because it can happen to anyone, we created a booklet for supporting the balancing ofwork and nursing care to transmit information about the system of nursing-care insurance and in-house systems(nursing-care leave, family care leave and short working hour system) to promote its understanding. Looking ahead, weplan to work hand in hand with external experts and establish a free consultation service and hold seminars to support thebalance of work and nursing care.

Expatriate employees introduced

The diversity bulletin is issued on a

The diversity bulletin is published on

their cultures and customs. The

periodic basis and covers a wide

an internal portal. Employees

picture shown is an Indian festival.

variety of subjects aiming to makethe promotion of diversity somethingthat people can relate to.

working overseas can also access it
freely.

My daughter was born in November last year, and I took childcare leave for a
first month after my wife returned from her parents' house to give birth.
Although we had worries about how it would be like to raise a child with bothparents working, it became a valuable opportunity for me, who was unrealistic
about the situation and not mentally prepared, to think about the future(sorting out the future) while it is common practice for households withchildren.
After my childcare leave started and I started taking care of my child frommorning until night, I found that changing diapers, bathing, and giving milk

Yutaro Yatsuka
Solution Planning Department
KOKUYO Furniture

were not that challenging as I started to get used to it. It was actually fun and75

KOKUYO Group CSR Repor t 2014

delightful, and I realized that the fathers' active participation in householdchores was more important. Household chores have rush hours and thetiming of child rearing and household chores overlaps during the morning andevening (see the right chart). The most important thing about making asatisfying home life is the expeditious cooperation between mother and father.
For men who lack confidence in doing household chores, I think it is a greatchance for you to become your wife's apprentice to learn how to do householdchores.
Additionally, the rush hour for household chores coincides with commuting. I
see why many working mothers choose to work shorter hours (2 hours) to dohousehold chores than working from home once a week. However, I think it
will be better to realize two-hour teleworking as a work style for the future.
With this, working parents can work from home for two hours before or afterwork. I believe the balance of work and child rearing will be improved if theregular commuting hours can be used for household chores. Although, forcompanies, there are many hurdles to overcome for realizing working fully
from home due to the aspects of work progress and labor management, it
helps reduce stress if we can work person-to-person with each other everyday.
I returned to work from my childcare leave after completing my wife's
apprentice for household chores. My next goal is to learn the quality use oftime and the secrets of leading the fun life of double working and childrearing
from working mothers.

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KOKUYO Group CSR Repor t 2014

With Employees (Human Rights/Labor Practices)

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

Promoting Understanding of Human Rights
The KOKUYO Group conducts training programs for various levels of employees topromote a better understanding and awareness of the importance of respecting humanrights, as well as CSR and compliance. The aim of these activities is to encourage thedevelopment 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 relationship issues at any time, while also
providing related counseling services. In fiscal 2013, internal the activities to increase
understanding and awareness of human rights included training programs that entitled“Respect for Human Rights Brings New Life to the Company and Everyone Can Enjoy aParticipants listened to the lectureof mental health with rapt attention.

Better Life,” for employees newly entering the Company. These included sessions entitled “Respect for Human Rights
Brings New Life to the Company and Everyone Can Enjoy a Better Life,” and Also, “Training Program that shows the wayofon dDealing with mMental hHealth for Newly Appointed Managerial Personnel.” is held intermittently.

Handing Know-How of Well-Experienced Employees
In August 2012, the KOKUYO Furniture Mie Plant launched the committee of instructors
aimed at handing down expertise and skills and maintaining and enhancing
workmanships, as well as efficiently improving chronic problems in the workplace. The
members consist of employees who belong to the classification of S bands (specialists),
employees of more than 40 years, senior employees, and well-experienced employees,
and at that moment, there are 23 members in total. All of the members are powerfulplayers who have experienced a number of successes and failures, and they
demonstrate persistence in their jobs.
Although these members tend to be seen as unapproachable old men in workplaces,
they always rise above their difficulties and have a strong will to play their roles topassionately hand down the KOKUYO spirit, which employees tend to forget theseyears, without trying to look good.
The KOKUYO Group will continue to shed light on problems that exist in plants to clarify
why, what to change and what to do, as well as to engage in proactive actions by

An instructor (right) gave advice tojunior staff

A badge for instructors

focusing on each area of assignment and positions. Furthermore, for improvements at job sites and the reformation of thecorporate climate, weto fully utilize potential abilities through ingenious attempts and, improvements at job sites and thereformation of the corporate climate to keep handing down what's valuable to the next generation.

77

KOKUYO Group CSR Repor t 2014

KOKUYO Gave a Speech as a Panelist at the Diversity Management Forum
Starting in fiscal 2012, the Ministry of Economy, Trade and Industry selects and honors
companies that successfully improve their corporate values via Diversity Management *for three consecutive years and recognizes them as Diversity Management Selection
100. KOKUYO was recognized for its efforts toward employment of persons withdisabilities and was selected for inclusion in the 2012 Diversity Management Selection
100 awards. To celebrate the occasion, Hidehiko Kuroda, the president of KOKUYO K
Heart, made a presentation of the company's efforts at the Diversity Management
Forum and gave a speech at the panel discussion on July 12. This time, five companiesof the Kinki region that were selected among the 2012 Diversity Management Selection
100 made a presentation of their efforts at the forum with the aim of promoting active
utilization of diverse human resources in companies within the region. A total of 120
people participated in the forum, including business owners, persons in charge of
personnel affairs, economic organizations, local governments, education institutions andstudents, and they all listen to the presentations in rapt attention.

Giving a speech at the Diversity
Management Forum* Diversity Management
Diversity management is where female, young people, the elderly, and persons with disabilities can participate in depending on their immediate
environment and abilities to bring out potentials of diverse human resources to gain competitiveness.

KOKUYO Group's Efforts Toward Employment of Persons with Disabilities
Since the period prior to World War II, the founder of KOKUYO
supported physically challenged employees. At present, KOKUYO K
Heart and Heartland, which are special subsidiaries *1 of KOKUYO,
offer a range of job opportunities to employees with physical disabilities,
and these companies are aiming to develop a progressive new businessmodel for the employment of the physically challenged.
The founder of KOKUYO, Kuroda Zentarou, who wished to realize thesocial participation of people with disabilities, in 1940, started employing
people with hearing difficulties at the main factory. Since then, KOKUYO
has been standing in its belief of training human resources who arecapable of making the most of their innate abilities and following the
KOKUYO's corporate philosophy, Enrich the World through Our
Products, without treating people with disabilities any differently.
In 2003, with the closure of the Yao Factory, KOKUYO newly establisheda subsidiary, KOKUYO K Heart, where employees with disabilities canwork within their commuting distance. KOKUYO K Heart celebrated its
10th anniversary last year. Additionally in 2007, to provide people withintellectual and mental disabilities with a place of employment, who are
difficult to work in KOKUYO K Heart, KOKUYO established anothersubsidiary, Heartland, which produces and sells vegetables. Although
corporations must actively employ people with disabilities since the employment of people with disabilities has become
mandatory in 1976, KOKUYO's employment rate of people with disabilities at that time already reached 1.76%, which ismore than statutory employment rate. As of January 1, 2014, the employment rate of people with disabilities in the
KOKUYO Group is 2.24%. While the Group has already achieved the statutory employment rate of 2.0%, we are pledged topromote the employment of people with disabilities as a whole by making use of the Corporate Grouping System *2
centering around the special subsidiaries, KOKUYO K Heart and Heartland.
*1: Special subsidiaries
Special subsidiaries are subsidiaries that are established to employ people with disabilities in accordance with the Act for Promotion of
Employment of Persons with Disabilitiesthe Act for Employment Promotion of Persons with Disabilities. It requires a state authorization.

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KOKUYO Group CSR Repor t 2014

*2: Corporate Grouping System
Under the system applied to corporate groups, employees (physically challenged personnel) of special
subsidiaries are regarded as being employed by a company (or group of companies) and can be
included in calculating employment ratios.

Initiatives at KOKUYO K HeartAt the start-up, KOKUYO K Heart was fixated on the employment of persons withdisabilities and served as one of the ordinary subcontractors in the KOKUYO Group as
it mainly engaged in the printing and binding of catalogs and leaflets.
The Group therefore left out the employment of persons with disabilities in the hands of
KOKUYO K Heart, causing a challenge that the business volume at KOKUYO K Heart
became unstable. To create a new business model for the employment of persons withdisabilities that makes the most of KOKUYO K Heart with operating companies, theEmployees of KOKUYO K Heart

company came up with ways to jointly reorganize operations (BPO: Business Process
support the development work of
Outsourcing) to entrust KOKUYO K Heart with a portion of operations run by operating
stationery.
companies. With this, operating companies can focus on their original operations toimprove productivity, while enabling KOKUYO K Heart to secure stable jobs that are meaningful, not just simple tasks. The
operating company that outsources their jobs reviews operation process to sort out and subdivide operations to allow
sharing operations with persons with disabilities. On the other hand, KOKUYO K Heart selects human resources who matcha diverse range of operations, including architectonics, product development, designing, and text making in accordance withthe characteristics of employees with various disabilities, such as hearing difficulties, severe physical disabilities, andmental disabilities.
To help the employees of KOKUYO K Heart, including persons with disabilities, to perform tasks of higher value, senior
employees with know-how and employees in charge of product development are invited from operating companies as
instructors to establish a follow-up system. In addition, KOKUYO K Heart introduces flexible work styles and systems, suchas teleworking and flexible work schedules. In this way, we have successfully defied the stereotype that persons withdisabilities can only perform simple tasks and opened up opportunities for new challenges by offering a wide variety of tasks
and work styles.

KOKUYO K Heart Celebrated Its 10th Year In Business
On December 26, a party was held in Osaka to celebrate the 10th anniversary of KOKUYO K Heart. A total of 76
participants, including employees of KOKUYO K Heart, former presidents and the employees of KOKUYO Human
Resources Development Department, took part in the party. The former presidents of KOKUYO K Heart gave acongratulatory message at the ceremony and the president of KOKUYO, a parent company, and a vice president sent avideo message to celebrate the occasion. KOKUYO's president, Akihiro Kuroda, presented the following video message,“The founder Zentaro worked with people with disabilities since 1940 with the hope of bringing happiness to many people.
KOKUYO K Heart put forth its whole energy to deal with printing and a variety of jobs to accumulate results, leading to avariety of high quality tasks in sequence,” Akihiro Zentaro continues. “It is my hope that they continue to make challenges
without being satisfied with current tasks to build a chain of trust with the operating department.”
Also, the president of KOKUYO K Heart, Hidehiko Kuroda, took a look back in its corporate history and talked about how
the company, which was founded for printing and binding with a total of 36 employees, including 17 persons with disabilities
in 2004, grew to hold a total of 79 employees, including 35 persons with disabilities, as of January 2014, as well as how it
originally started doing support operations of operating company as its main tasks.
Other party attractions included a magic show and other fun events to facilitate interaction of employees from different
offices to end on a high note. At the end, all participants sang in chorus in by means of sign language and then pledged tomake strenuous efforts for the next 10 years. In addition, an anniversary newsletter, titled K-HEART 10th ANNIVERSARY,
was issued to introduce messages from KOKUYO's president and board members, as well as KOKUYO K Heart's history of79

KOKUYO Group CSR Repor t 2014

10 years. What is more, the newsletter introduces pictures showing big smiles of people working in nine sections of
KOKUYO K Heart, as well as their stories for the last 10 years and their passionate goals for the next 10 to 20 years.

A picture taken at the party
celebrating the 10th anniversary

An anniversary newsletter was
published. The kanji character on

The entire employees talked about
their passion for the next 10 years.

the cover was written by an
employee of KOKUYO K Heart who
has hearing difficulties.

While the KOKUYO Group is pushing ahead with diversity, it is also making steady progress in the employmentof persons with mental illness, which will be mandatory in 2018. KOKUYO K Heart takes on a wide variety ofassignments from operating companies and hires human resources suitable for each assignment, regardless oftypes and degrees of disabilities. To allow the operating companies to execute business plans swiftly, each
employee engages in support operations according to the aptitude.
T Y (A female in her 40s) Development support and general affairs at KOKUYO S&T
T had the onset of a panic disorder about 10 years ago. After seeing a doctorof psychosomatic medicine and taking medications, she was able to takecontrol of her illness. She spent a year in job training to acquire the mindset,
knowledge, and skills necessary to continue working and joined KOKUYO K
Heart. Currently, she engages in various assignments, from the creation ofsamples for product development to the preparation of slips. Since she
became able to work as a member of society and be of help to the company
and society even slightly, it has given her massive confidence and joy in her life.
Keisuke Goto Customer service section of KOKUYO
After experiencing 15 years of social withdrawal due to mental illness, I joined
KOKUYO K Heart to overcome the illness. Besides the assignments I tookcharge in, I also share my experiences of my illness and work with persons
with disabilities and participate in a lecture for them and their supporters. Also,
by making use of my own experiences, I instruct junior staff as a good advisor
for those who have similar disabilities. I would like to continue making acontribution for people with similar disabilities so that they can also follow mypath for success.

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KOKUYO Group CSR Repor t 2014

Initiatives at Heartland
Heartland was established to produce and sell vegetables with the hope to provide
places of employment to persons with mental disabilities and illness, who are faced withthe difficulty of getting employed to engage in the operations of the KOKUYO Group.
While making use of know-how as a traditional manufacturer, Heartland utilizes persons
with disabilities to operate hydroponic culture of salad spinach and ship to major grocery
chains to deliver stable quality and establish a production system.
In order to assist those with disabilities, the hydroponic farms are introduced withcomputers and machinery equipment to automate temperature control by computer,which is difficult for those with disabilities, as well as automatic packaging machine andpanel washer to eliminate manual packaging and reduce work hours. Other measures

A workplace of Heartland

include specially marked scales and cases that are easy to count the number of spinach
to deliver operational efficiencies and smoother operations through ingenious attempts.
As a result of the improved work environment, the company was able to reinforce thecollaboration with local welfare facilities, which also helped strengthen the efforts to offer
a place of employment. For the users of the facilities who aim to get a job at a company,
they have a difficult time gaining an opportunity to receive on-the-job training in a
regular company, and if they start working without training, it causes a gap between

With a divided crate, staff can easily
see how many bags of spinachshould be put in a box.

those who hire them and those who are hired. Heartland has been receiving gratitude
from welfare facilities for its contribution to offer practical on-the-job training and that they engage in activities beyond thecompliance with the statutory employment of persons with disabilities as the KOKUYO Group. In 2009, Heartland received
the Osaka Heart-full company award in the recognition of the company's attempt to focus attention on agriculture to expand
the occupational field for the employment of persons with disabilities, as well as its high employment rate of persons withmental illness and disabilities.

Joint Efforts with Companies Engage in Both the Employment of Persons with Disabilities andHydroponic Culture
In the same way as Heartland, the KOKUYO Group has built a network named the Heartful Agri Association and started
activities as an attempt to deepen its cooperation with other companies engaging in hydroponic culture to facilitate theemployment of persons with disabilities. By sharing problems and challenges of business operations at each company tosolve them, we are striving to ensure stable quality, steady supply, and stable prices.

The KOKUYO Group has been engaged in efforts to improve entire
employees' health under the philosophy, “It is the health of employees thatserves as a base for supporting the execution of group strategies,” under the
management of the Human Resources Development Department. As part ofthe effort, the Human Resources Development Department, healthmanagement office and Heartland work together to develop food items with agoal of reducing the risk of lifestyle diseases, which has been a major issue
for companies and society, as much as possible.
The development project is named the Hapius Project with the goals to

A logo for the Hapius Projectencourage office workers to get healthy by eating healthy meals on a daily
basis, as well as to cheer for domestic vegetable producers and create asystem that allows them to take part in the social contribution and job
assistance for physically challenged persons, hoping to make everyone
happier tomorrow.
Speaking of the recent social background, it is said that one out of four office81

KOKUYO Group CSR Repor t 2014

workers is suffering from lifestyle-related diseases, and it is vital to improveeating habits and receive preventive care. Even in the KOKUYO Group,
according to an industrial physician, employees were faced with various
various problemschallenges, such as irregular eating schedules due toovertime work, poor nutritious balance, and poor intake of vegetables. To
overcome these problemschallenges, we have developed the concept for newmenu items as follows:
Uses salad spinach from Heartland.
Can take 120 grams of vegetables, which is equivalent to one serving.
Reduces salt content to 1 g per serving.
Develops menu items that busy office workers can effortlessly eat on adaily basis.

Menu items made with thevegetables harvested byHeartland were added to thecafeteria menu.

After a great deal of discussion and consideration to find the best food that match the development concept,
they have come up with a soup, which is easy to create a menu with other food items. Because the tasting by
employees showed that a single item of soup and ramen were received well, soup with a daily serving ofvegetables and tomato ramen with eight types of vegetables were added to standard menu items of cafeteriasfrom June last year.

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KOKUYO Group CSR Repor t 2014

With Employees (Human Rights/Labor Practices)

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

Fundamental Policy for Workplace Safety and Health

Initiatives That Match the Requirements of Each Workplace Category
Activities of the KOKUYO Group extend from manufacturing to construction and cargo transportation. We undertake healthand safety measures that match the requirements of each activity to help maintain safety, peace of mind, and comfort for
employees. Monthly Safety and Health Committee activities in each workplace are the basis for health and safetymeasures. There are also many special events during National Safety Week and National Health Week in Japan to raiseawareness of the importance of workplace safety and health.
(1) Manufacturing
During National Safety Week in July, the entire employees of all seven KOKUYO Groupfactories are invited to convene a safety conference and safety meeting to ensure thatsafety is given the highest priority. By the same token, aiming to further radiate theculture of safety first in overseas factories, overseas employees are convened to ameeting and provided with training by teams. The Shibayama Plant of KOKUYOFurniture opened an experience-based safety dojo for prevention of accidents. Anotherapproach is a safety coaching by safety consultants, which has been in place
continuously.
(2) Construction
The KOKUYO Group Construction Safety and Health Conference was held at several
locations in Japan from June 5 through 26. This event was conducted by the Central
Safety and Health Committee. About 600 people, including employees in the Group's
construction business and executives from partner companies attended the regional
conferences. Participants made presentations about accidents involving construction
activities and talked about ways to prevent accidents. The conference set a goal, “Thegoals were to horizontally the increase in the use of safety and health activities, active participation in upgrade safety
education programs, and elimination eof third-party accidents.”(3) Transportation
Group companies start every day by confirming that workplaces are clean and orderly
and hold monthly safety patrols. Furthermore, to make transportation workplaces in the
KOKUYO Group safer, there are regular training sessions for operating forklifts, working
in high places, and performing other tasks. This training improves the safety skills ofworkers. For off-site work, workers check the safety and quality of all tasks performed atdelivery sites and make continuous improvements. KOKUYO Logitem held its firstsafety conference by inviting partner companies.

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KOKUYO Group CSR Repor t 2014

(4) Offices
Besides the Monthly Safety and Health Committee activities in offices, many workplaces
have a weekly no-overtime day and a patrol system to ensure that no one stays late on
those days. Those who have a lot of overtime are encouraged to have an interview withan industrial physician to confirm their health conditions and submit an improvement
plant for the following month. The Umeda Live Office, opened in April, offers AED
training to prepare for any contingency that may occur to visitors and employees,
creating a safe office environment.

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KOKUYO Group CSR Repor t 2014

With Employees (Human Rights/Labor Practices)

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

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

KOKUYO Group health targets

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

Results for 2012

Results for 2013

Goal for 2015

23%

21%

20%

28%

26%

19%

Our specific efforts(1) Healthy meals at the Company cafeteria
KOKUYO has been promoting healthy meals to be served at cafeterias. As part of theefforts, the KOKUYO Human Resources Development Department, health management
office, and Special Subsidiary Heartland jointly developed menus with the goal of
making changes in the awareness and behavior for food education to reduce the risk oflifestyle-related diseases as much as possible. The healthy meals have been added tothe menus of the cafeterias.
(2) Health seminar and smoking cessation seminar
By holding health seminars and other activities periodically, KOKUYO is striving to makeA smoking cessation briefing
session held in the Osaka Head
Office.

people aware of the importance of leading a healthy life. To reduce smoking, KOKUYO
and its health insurance association are working together to create an environment thatmakes it easy to quit smoking. A no-smoking campaign is under way to assist people
who have recently stopped smoking. In 2013, a smoking cessation briefing session washeld in offices in Shinagawa and Osaka.
(3) Mental health
Employees have access to mental health checkups to prevent problems related tostress. The Employee Assistance Program (EAP) gives individuals access to counselingwith an external professional directly or via telephone or e-mail.

Participants enjoyed walking anddoing stretches at the seminar heldin the Health Festa Shiga.

(4) Healthy approaches practiced by each business corporation
An event aimed at the maintenance and promotion of health based on the heath objectives of the KOKUYO Group, titled"Health Festa Shiga 2013," was held on Saturday, May 18, as a joint health promotional event for three companies,
including KOKUYO Product Shiga, KOKUYO Logitem (Shiga Distribution Center) and KOKUYO Supply Logistics (Shiga
NDC). The event was organized in cooperation with the KOKUYO's Human Resource Development Department and the
KOKUYO Health Insurance Union and a total of about 80 employees and their family members joined the event to break asweat.

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KOKUYO Group CSR Repor t 2014

Needless to say, the base for executing the KOKUYO Group's businesses is the health of each employee. Japan is facedwith the age that requires people to maintain their health so that they can work for long time as the aging of population will
advance increasingly in days to come and it became normal to continue working after reaching the age of 60. Amid thecircumstances, the results of physical exam for the KOKUYO Group employees indicate that over 20% of all employees arein the range of overweight. If this problem remains untouched, risks of getting lifestyle-related diseases such as high bloodpressure and diabetes increase further, pushing them to a situation that they cannot maintain their health.
Also, it has become a matter of public knowledge that smoking causes many illnesses. While self-management is a key tomaintain health, we are committed to supporting the health of employees as part of our corporate efforts to prevent
employees with risks from getting ill and prevent those who are anxious about their illness from developing into serious
illness. To that end, we lay out a goal related to health as the KOKUYO Group to prevent lifestyle diseases. We are making
movements to make employees conscious of their own health without letting things take their course.

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

88p KOKUYO Group Basic Procurement Policy
90p Working together with Our Suppliers
91p Working with Supply Channel Participants

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

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

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

With Business Partners (Fair operating practices)

The KOKUYO Group has established the Basic Procurement Policy and the Procurement Guidelines.

Building Stronger Relationships of Trust with Our Suppliers
As it aims to become the “honor of Asia,” the KOKUYO Group, with the understanding that mutual understanding andmutual development with suppliers will be increasingly important, issued its Basic Procurement Policy. The KOKUYO Groupwill take this as an opportunity to build stronger relationships of trust.

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

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KOKUYO Group CSR Repor t 2014

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 Repor t 2014

With Business Partners (Fair operating practices)

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

KOKUYO Furniture and KOKUYO S&T Held the Basic Procurement Policy Explanation
Meeting.
Upon the establishment of the KOKUYO Group Basic Procurement Policy and the KOKUYO Group Procurement
Guidelines in March 2013, the KOKUYO Group has made them available to inside and outside the company through the
CSR Report 2013 and its official website. Subsequently, the KOKUYO Furniture and KOKUYO S&T held the Basic
Procurement Policy explanation meetings in August and September, respectively, by inviting their principal subcontractors.
As the corporate activities are becoming more globalized, the KOKUYO Group is well aware that managing only its own
company and its subsidiary companies is insufficient to fulfill the scope of social responsibility. The Group therefore invited
its principal subcontractors to give an account of its social background and its goals, such as building relationships of trust
and promoting truthful and proper procurement in the entire supply chain. Additionally, the KOKUYO Furniture and S&T
implemented a self-examination questionnaire to their 32 principal subcontractors to determine the current status and gave
its feedback to the subcontractors.
The KOKUYO Group will continue to deploy the four cyclic activities for its suppliers in order of importance:
1. disclosing the Basic Procurement Policy and the KOKUYO Group Procurement Guidelines,
2. hosting a briefing session for subcontractors,
3. distributing a self-examination questionnaire and giving feedback, and4. promoting voluntary improvements.

KAUNET Holds Catalog Partner Kickoff Meetings
KAUNET publishes its mail order and online catalogs twice yearly in February and August. When preparation for the next
catalog begins, each time, KAUNET holds a Catalog Partner Kickoff Meeting that is attended by its suppliers (procurement
suppliers) and other companies involved in preparation of the catalogs. At this meeting, the presentations are made on theeditorial policy of the upcoming catalog, policies for choosing products to be included in the catalog, and productdevelopment policies. The purpose of these meetings is to share with and help participants to gain an understanding of
KAUNET's ideas and strategies. KAUNET's value added is more than just price and a good selection of merchandise.
KAUNET also takes care to add value by making it easy for the customer to select items and offer its awareness to comeup with solutions to help customers overcome any dissatisfaction and problems that arise. By staying in close touch with
suppliers and partner companies, KAUNET aims to be a company that is chosen over and over by its customers.

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KOKUYO Group CSR Repor t 2014

With Business Partners (Fair operating practices)

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

45th KJM Awards Ceremony Held
The 45th KOKUYO Jewelry Members (KJMs) Awards Ceremony (*) was held in Hotel
Okura, Toranomon, Tokyo, on November 19, 2013. KJMs with outstanding sales results
for the previous year (August 2012 through July 2013) were invited to extend ourappreciation for their efforts and to deepen our cooperative relations. A total of 154
KJMs and 190 persons, including KJMs and other KOKUYO-related participants,
attended the ceremony.
* There are currently 1,259 KJMs, which are divided into two courses, one for stationery and the otherfor furniture, and the KJMs are classified into various ranks using the names of jewels, such as
emerald, diamond, sapphire, and opal, according to their ranking in terms of sales made.

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

KOKUYO S&T Retail Messe 2013 Held
KOKUYO S&T held its two-day annual Retail Messe 2013 for sales and logistics service
partners on July 25 and 26, 2013, on the second and third floors of the KOKUYO's
Tokyo Showroom. This Messe (exhibition) has been held annually since 1997 and has
the aim of developing sales. The theme of the exhibition in 2013 was “Surprise,” and inorder to give a fresh surprise to its participants, a number of surprising product plans(new products and existing products that are added with the new value by editing) andideas of creating sales spaces were introduced. A total of 1,067 buyers and others fromretail stores and mass retailers attended, making the event a successful occasion.

New Products Training Sessions Held for Nationwide Dealers
From November 6, 2012, to February 7, 2013, KOKUYO Furniture and other KOKUYOGroup sales companies jointly sponsored the KOKUYO University New Products
Training Sessions 2013 for major dealers in 16 cities (in the order of Tokyo, Osaka,
Fukuoka, Hiroshima, Nagoya, Shizuoka, Sapporo, Niigata, Maebashi, Matsuyama,
Okayama, Utsunomiya, Mito, Sendai, Fukushima, and Morioka). A total of more than
900 dealer employees attended the sessions. Comments of participants included “Thetraining session has given me useful and practical ways to introduce products atbusiness negotiations,” “The session actually compared new products and competitive
products to make it easy to understand,” and “The flow of attaining new projects thatwas introduced in the seminar could be useful in sales activities.”

91

Dealers taking a closer look at theiS Desk System, which newly
comes with a center drawer withsafety latches.

KOKUYO Group CSR Repor t 2014

Dealership Convention Held by KOKUYO Furniture Commerce and Trading Co., Ltd.
From September 13 to 14, 2013, KOKUYO Furniture Commerce and Trading Co., Ltd.
held its two-day annual event, the 2nd KOKUYO China Dealership Convention in
Shanghai flagship showroom and nearby hotel. The Convention consists of three
sessions, including new product announcements, presentation of business strategies
and convivial gathering and a training session for the executives of dealership. A total of
64 participants attended, making the event a great success. It may be no exaggeration
to say that the success of the furniture business in China is influenced by the successand failure of the sales made by dealerships. The KOKUYO Group continues making
steadfast efforts to become the number one in Asia.

92

Dealers in the showroom browsing
each product with enthusiasm.

KOKUYO Group CSR Repor t 2014

With Stakeholders (KOKUYO'S Responsibilities to Stakeholders)

KOKUYO is aware that raising corporate value is a responsibility that it has to shareholders and investors, and, to maintaintransparent and sound corporate management, it strives to make accurate and timely disclosure of corporate information.

Policy and Achievements Regarding Dividends
With the objective of emphasizing shareholder interest, in addition to the previous policy of paying stable dividends,
KOKUYO takes account of consolidated financial results and pays dividends aiming at a dividend payout ratio of 20% ormore. Retained earnings are employed to make investments for future growth with the aim of increasing corporate value.

Making Management More Transparent(1) IR Activities: Given a greater level of interest in our Asian strategy (especially withrespect to our focus on India and China), inquiries and interview applications submitted
by foreign investors have been on the rise. Against this backdrop, we participated inconferences for foreign investors held in Japan in March and September and in a
conference held in Singapore in August. At these events, meetings were proactively
conducted with investors. The situation pertaining to our corporate group is explained todomestic institutional investors through financial results briefings held twice a year,
small-scale meetings held four times a year, and individualized visits. We will continue
to proactively engage in IR activities to raise our corporate value.

A meeting with investors(2) Information Disclosure: We disclose information in accordance with the rules established fby various stock exchanges
for the timely disclosure of corporate information by issuers of listed securities (hereinafter referred to as the “rules
governing timely disclosure”). We endeavor, as a matter of basic policy, to promptly disclose, as proactively and fairly as
possible and by way of appropriate methods, information that may not be subject to the rules governing timely disclosure
but that we deem will help investors to better understand our company. In December 2011, we upgraded our information
website for shareholders and investors. We enhanced the information made available through this website, such as byposting reports on negotiable securities and financial highlights dating back more than twenty years, and made this website
more user-friendly. We will continue to work hard to make this website easier to use and easier to understand as well as
more functionally useful.
* Related information:「Investor Relations」

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

Morningstar Socially
Responsible
Investment Index(MS-SRI)

Morningstar Japan K.K. by way of the selection of 150 companies deemed to constitute socially
exceptional companies from among all listed companies in Japan and the conversion of the share prices of thesecompanies into an index figure.

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KOKUYO Group CSR Repor t 2014

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.

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KOKUYO Group CSR Repor t 2014

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

96p The Job Study Initiative
98p KOKUYO Design Awards
101p The Future of Tohoku
104p Education Support Activities in China

106p KOKUYO Camlin of India's Promotion of Artistic
Activities
108p Social Contribution Activities by Countries
110p Regional Brand Production
112p Contribution Activities Deeply Rooted in Regional
Communities

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

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

A job is not something that you can obtain or go to only on your own will,
and it is something that is given by a sudden chance or s tr ange
conjuncture. That is why we must do our best to generate the maximum
outcome to give back to societ y. We are commit ted to mak ing acontribution to the local community through our business without everforgetting our feelings of appreciation.

With Local Communities (Community involvement and development)

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

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

A picture taken at the panel
discussion of the seminar

then, nine years have passed and we have continued to face with students with sincerity, and today, a total of 31 leading
companies from various industries have joined the Job Study.

Promoting More Proactive Thinking and Expanded Visions
In 2013, in addition to the cross-industry seminar started nine years ago, KOKUYO
implemented a collaboration internships program, which is offered by participatingcompanies of the Job Study, and the Job Study Collaboration Kansai/Kanto, which aims
to expand the vision of student to include small and medium-sized companies to selecta company that meets their own concept of values. This event offers a joint panel
discussion by inviting major companies and local small and medium-sized companies
that are participants of the Job Study, a round-table talk program where they genuinely
answer to the questions given by students and a guidance session aimed at letting
students face their own future.

Participants of the Job Study
Collaboration Kansai/Kanto

Each program is thoughtfully developed with a mechanism to allow students to think independently, and students who took
part left comments that “it became a great opportunity to listen to real talk of people who are from various companies inclose distance,” and “This event allowed me to know the advantages and difference between working in major companies
and mid-sized companies.”Awarded the Encouragement Prize from the 4th Career Education Award
In February 2014, in recognition of our achievements in the past nine years, KOKUYO received the encouragement prize ofthe 4th Career Education Award (an award system established by the Ministry of Economy, Trade and Industry in 2010 withthe goal of encouraging and diffusing the efforts of companies and economic organizations in education assistance).
The following three reasons for winning the prize were highly acclaimed and there are great expectations toward the Job
Study in the future.
1. KOKUYO was recognized for its efforts to offer a place where diverse corporations can share their concepts covering awide range of challenges faced by students before entering the workforce and to respond flexibly.
2. Job Study has constructed its sustainable system.
3. It implements consistent and specific measures to come up against the challenge of how corporations can stop theincrease of early job-leaving rate.

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KOKUYO Group CSR Repor t 2014

This year marks the 10th anniversary of the Job Study program. For
corporations and students to come together seriously to address the today's
challenges, the program must continue to progress without being content withthe present state. While the environment for students' job hunting andcorporations' hiring changes dramatically, we gained more confidence byreceiving the encouragement prize at the 4th Career Education Award. We willcontinue to promote the independence of students as part of career education

Hirofumi Nagata
KOKUYO Human Resource
Development Department

assistance that draws a line from ordinary job hunting and hiring activities and create opportunities for students
to come in contact with true feelings of various people in the workforce.

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KOKUYO Group CSR Repor t 2014

With Local Communities (Community involvement and development)

KOKUYO DESIGN AWARD, a competition designed to attract fascinating commercial designs from a broad range of users
and to commercialize the successful designs, was held in 2013.

KOKUYO DESIGN AWARD, Celebrating Its 11th Time
Since 2002, KOKUYO has sponsored the KOKUYO Design Awards annually, and the 11th set of awards has beenpresented (except for 2010) in 2013. The past award-winning items include Kadokeshi, Campus notebook <Paracuruno>
and Beetle Tip, which all became hit products. In recent years, success in the award has been known as the first step to a
successful career for young designers.

KadokeshiParacuruno

Beetle Tip

The 2013 Theme, HAPPY x DESIGN
The main theme for 2013 is HAPPY x DESIGN. We believe the power of design is vital,
especially in view of today's challenges, such as natural disasters, various
environmental issues, and population problems, and that's why we chose the theme in
the hope of making people more upbeat and happy with the power of design. This year,
we set sub themes for each business category. Under the theme of HAPPY x
ECOLOGY, the stationary category welcomed designs that are eco-friendly, convenientand easy to use. Also, the other sub theme is designs that give people a positive feelingand help make work easier. The furniture category chose HAPPY x PUBLIC as its
theme to look for happy and innovative ideas that create a happy, comfortable designfor the enjoyment of people of all ages from children to the elderly.
As a result, we saw participation of a total of 1,217 applicants from 20 countries (853applicants for the ST category, 331 applicants for the FN category, 33 applicants forother categories). The submitted designs were screened in three stages, and all thedesigns submitted were prescreened internally first. A total of 40 KOKUYO personnel
from product planning and development used their abundant expert knowledge andyears of experience to carefully check each piece to eliminate imitations. The next first98

KOKUYO Group CSR Repor t 2014

screening was joined by people who are active on the frontlines of the times, including
Yoko Kawashima, Yasuhiro Suzuki, Kashiwa Sato, Kinya Tagawa and Akihiro Kuroda(chief executive officer, president and director, KOKUYO Co., Ltd.), and checked for
product compatibility and the possibility of commercialization.
After that, based on the patent research, finalists were invited to deliver a presentation
for final judging, which picked out one design for the Grand Prix, three designs for the
Merit Award and four designs for the Special Award. This year's recipient of the GrandPrix was GARI Ball, designed by Hyoun Dain. GARI Ball is a ballpoint pen with a lot,
and when all of the ink is gone, a lot is drawn from the pen. If you are lucky, you will win
another pen. The Grand Prix winner, Hyoun Dain, said "Even though a ballpoint pen
cannot deliver major benefits for ecology, I wanted to change the mindset of people
toward ecology by providing the fun of using up a pen." GARI Ball won the Grand Prix
as it was recognized for its clear-cut expression of the theme for the Stationery
category, HAPPY x ECOLOGY.
Comments by the judges included “What I get from GARI Ball at a glance is strength.
This easy-to-come-up, yet totally new, brilliant idea successfully completes its clear-cut
design. The elements of HAPPY x ECOLOGY that transmits without explanation truly
deserves to win the Grand Prix” (Kashiwa Sato); “Although it tends to lose reality when
ecology is defined on a conceptual basis, I believe it is important to use the simplicity
that GARI Ball has to define ecology” (Yasuhiro Suzuki); “This artwork lets you discover2013's Grand Prix GARI Ballthe relationship between stationery and the human within the flow of time that is
generated after the first letter of a lot starts to reveal” (Kinya Tagawa); “I like it because
the design made me feel like smiling from the moment I clap eyes on it.” (Yoko Kawashima) The design of GARI Ball was
highly acclaimed and won the Grand Prix by the common consent of judges. For the details of the winners, please go to the
KOKUYO Design Award website.

Toward the Commercialization of Prize-Winning Designs
Since its start in 2002, the KOKUYO Design Award has positioned itself award from therest as it is premised on the commercialization of prize-winning designs and showed its
competitive presence for more than a decade. On the other hand, it is also a fact thatthe commercialization was challenging due to the originality of ideas, marketability, andthe technology front. However, even if we have interesting ideas, it would not lead tobenefit the business without outputting into a product and questioning its need to the
public. To this end, we take the first step by developing a design into a form that people
can pick up and touch (= commercialization) without taking it to the commercialization
straight away.

2011's Grand-Prix, roll table, wascommercialized.

The first commercialization was for the 2011 Grand-Prix, roll table, in January this year, which we spent two years trying tocommercialize it. Roll tables were sold on the website, KOKUYO S&T Showcase, operated by the KOKUYO Group's
KOKUYO S&T, in a limited quantity (sales end after all items are sold), and received feedbacks and opinions from users
through roll table workshops for children. We will continue to further deepen communication with users to brush up the
product.
* Related information:「Product Progress “roll table”」

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KOKUYO Group CSR Repor t 2014

The year 2013 marked the 11th year for KOKUYO Design Award, thanks to
the help and cooperation received from everyone. We are committed toensuring that we exercise our ingenuity to make improvements to operate theaward in a joyful way. Also, as a place to practice KOKUYO's corporate
philosophy, "Enrich the world through our products", we will continue toactively transmit information within and outside the company, so as to create
growth of the KOKUYO Design Award with our customers. Don't miss it!

100

Yumiko Shimono
Brand Communication GroupKOKUYO Public-Relations
Communication Department

KOKUYO Group CSR Repor t 2014

With Local Communities (Community involvement and development)

It has been three years since the Great East Japan Earthquake occurred. Out of our earnest desire to be of any help to thepeople in the Tohoku region who began moving toward the future, we have been carrying on our program to support
learners and workers in the Tohoku region.

What It Means to Work for a Company - A Lecture to the First-Year Students of Kesennuma
High School
Okatake, president of KOKUYO Tohoku Sales Co., Ltd., spoke to 280 first-year students
at Miyagi Prefectural Kesennuma High School, which is located in the northern part of
Miyagi, from the perspective of a company manager. This lecture was given as part of alesson on “working in society” conducted in the integrated study period. KOKUYO
Tohoku received a request for the lecture meeting from Mr. Akinori Nagane, headteacher in charge of the first-year classes of Kesennuma High School. Mr. Nagane
decided to invite President Okatake as a lecturer as he found President Okatake's
statement, “We, as a local company, want to provide both affluence and excitement toyoung people,” in the KOKUYO's Group Dialog on Tohoku's Future featured in the CSR Report 2013.
“During a preliminary meeting, I was shown compositions the first-year students wrote on the theme of “the meaning ofwork.” In the compositions, students mentioned “To support my family,” “To earn a salary to live,” “To say the truth, I want tokeep goofing around, but I will have to give it up as an adult,” and “It is a matter of course for members of society to work”
as reasons to work. I was a little surprised to find that work was not associated with positive words, such as “dream” and“happiness,” but maybe, I should allow for the fact that this was the first time for many students to seriously think about “themeaning of work.” However, Mr. Nagane said it was exactly why he arranged this lecture meeting. He says that thinking
about why they will work will make them think why they are studying now. He wants the students to think about why they are
studying at this high school and study with a sense of purpose, which made me as a representative of a company that
supports leaners and workers realize anew the significance of this lecture meeting. I selected “What it means to work for acompany” as the theme of the lecture. I decided to share with the students my experiences and view that one should notwork for compensation or because one has to, but should pursue one's dream by proactively working with a sense of
purpose.” (Okatake)

People have three motives to work: compensation, personal growth, andsocial significance. I believe that one can enjoy working only when he/she cangain personal growth out of work and feel his/her work is socially significant.
Working proactively while experiencing personal growth, making some impact
through your work, and feeling that you are a useful part of society will lead toa sense of satisfaction or fulfillment.
Then how can you find social significance or meaning in your work? People
who clean Disneyland enjoy talking with children and show them some
performances. They do not limit their work to cleaning, but try their best to
provide visitors a dream-like fantastic time. What is most important is not tolimit the scope of your work, but to view it from a wider perspective, think how
you can please people around you, and implement the idea while imagining
their smiles.
I think that satisfaction you can get through work depends largely on yourStudents with Campus notebooks
we distributed as a souvenir

motivation rather than the content of your work. If you have to work after all,you might as well work in the field you are really interested in or turn your dream into your job. However, don't

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KOKUYO Group CSR Repor t 2014

you sometimes feel discouraged with or blame yourself for not having found your own dream? When I wasyoung, I committed myself to rugby and a tough part-time job at a broadcasting station. After finishing school, I
worked for a global company, where I engaged in the semiconductor business. Later I entered the KOKUYOGroup, where I work now.
While I did not continue pursuing one big dream over the past years, I thoroughly committed myself to my workat hand, even when the results of my work were not so promising, while aiming at current goals.
I think that not many people know their dreams right from the beginning and that you can always change yourdream. While I am much older than you, I still wonder what my true dream is. To live is to continue seeking an
ideal dream. Although it is not sure if a dream can be realized in the end, I believe that the first step toward a
dream is to commit yourself fully to what you are interested in now and doing so will promote your personal
growth. Take on challenges without fear of failure!
Later We Received the Following Comments from the Students:“I sympathized with the statement, “Don't you sometimes blame yourself for not having found a dream.” Whilereflecting on what it is that I really want to do or I am really interested in, I will make the first step by making an
all-out effort to concentrate on work at hand.”“I was surprised to hear that doing only what is required to do is not exciting. I realized that it is important to use
my imagination and creativity when doing what is required to do.”“It will take some time for our students to fully understand what President
Okatake shared with us today. Therefore, I would like to provide the first-year
students an opportunity to reflect on today's speech again before they
graduate from our high school. In a sense, the Great East Japan Earthquake
gave tremendous energy to these students. I think we need to provide themnew energy and opportunities to think about own future course before
memories of the Earthquake wear thin with time.” (President Jun Koyama,
Miyagi Prefectural Kesennuma High School)

From left to right: Akinori Nagane(teacher), President Okatake,Naotaka Kimura (teacher),President Jun Koyama of
Kesennuma High School

One Notebook Makes Children Smile
In collaboration with local stores, boards of education, newspaper companies, andNPOs, we hold the Notebook Decoration Workshop on a regular basis. More than 1,200
children have participated in the workshops with big smiles.
The Notebook Decoration Workshop is a program with the theme of “Cheer up Childrenin Tohoku! Tap into their energy through Writing and Drawing,” where children decorate
the covers of Campus notebooks with markers and stickers. While many people tend to
think that children should use notebooks only for their studies, we think that notebooks
can be used as one likes and want children to keep notebooks at hand as something
they love. We believe that a notebook is a tool that can develop creativity of users bymaking them become familiar with and enjoy writing.
In 2013, we held the workshop in Natori, Miyagi, and Minamisoma, Fukushima. In theworkshop, children gave their creativity full play and created unique decorated
notebooks by using many stickers, colorful markers, and masking tapes with cutepatterns. Children were so absorbed in decorating notebooks that the one-hourworkshop ended all too soon. These children commented with bright smiles, “I loved it!”
“I want you to hold the workshop again.” By making a departure from a stereotyped ideathat covering notebook covers with graffiti is a terrible thing to do and giving children an

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KOKUYO Group CSR Repor t 2014

opportunity to create a one and only notebook of their own, we hope that children will feel closer to notebooks, discoverenjoyment in writing and drawing, and develop their creativity.

We Support the Michinoku Future Fund
KOKUYO Tohoku Sales Co., Ltd., supports the Michinoku Future Fund, which
provides children who lost their parents in the Great East Japan Earthquake
assistance for their education after graduating from high schools. On March 15, a
Third Class Get-together was held at Miyagi University to celebrate the third classscholarship students who will graduate from high school and go onto university
this spring. At the event, these scholarship students expressed their gratitude tosupporters across the nation and their determination to work hard toward their dreams. We hope that they will makesteady steps toward the realization of their big dreams.
Hiroaki Okatake, President, KOKUYO Tohoku Sales Co., Ltd.

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KOKUYO Group CSR Repor t 2014

With Local Communities (Community involvement and development)

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

Grassroots Support Activities -Gifts of Notebooks to Children Living in Underprivileged AreaTo meet the diverse needs of developing countries, KOKUYO has participated in the
Grant Assistance for Grassroots Human Security Projects (hereinafter referred to as
Grassroots Gratuitous Cooperation) since 2006, which was introduced by the Ministry ofForeign Affairs in 1989.
There are still many villages deep in the mountains in China that do not have any
schools. The Grassroots Gratuitous Cooperation is an activity aimed at creating
opportunities and the environment where underprivileged children can equally receive
education. Due to a variety of reasons, they could not fully receive education. With the
grants donated by a number of sponsoring companies, the organization built schoolStudents of Haze, Shandong,received notebooks protectively.

buildings and provided children with school supplies, offering a place and tools to help them receive fair education.
KOKUYO is participating in this cooperative effort through the donation of Campus notebooks, and in fiscal 2013, 9,960
notebooks were donated to 15 schools. Since the start-up of these activities in 2006, KOKUYO has donated more than
430,000 notebooks to this cause in the last seven years. We are continuing the activities to bring smiles to children throughthese opportunities.

Library Donation Project-Offering a Place of Learning for ChildrenWith the help of a welfare volunteer organization in China, One village school, KOKUYO Furniture Commerce & Trading
took part in a project aimed at donating books to elementary schools in a remote region of Yunnan province (Library
Donation Project.) The purpose of this project is to collect books in an elementary school located deep in the mountains in
Yunnan province, which is difficult to access by cars, and donate a library to provide a place of learning for children.
KOKUYO Furniture Commerce & Trading teamed up with KOKUYO Commerce, KOKUYO Commerce (Shanghai)(Stationery Business) and KOKUYO (Shanghai) Management to donate over 2,500 books in four months from June to
October to successfully complete a library in the remote region. The library was named the KOKUYO One village school
Library to show that KOKUYO played a central part in the support and cooperation.

Children delightfully holding books

Boys getting into books quickly.

A sign for the KOKUYO One village

at the new library

Travel phrase books and mangacomics are also among popular
books.

school Library104

KOKUYO Group CSR Repor t 2014

KOKUYO has earned the trust of society as a well-established company ofover 100 years, and it is because, in addition to its usual business operations,the company has participated in various CSR activities to fulfill its social
responsibilities in the proper way. In the future, I hope to expand thecompany's image across the country through the CSR activities within China.
(Chuntao Liu)
The KOKUYO a Wild Boar Elementary School Library was completed in theend of October and we received pictures showing smiling students jumpingwith joy. The passion of KOKUYO China's employees turned into a library forchildren, creating a warm atmosphere in offices. I think it was a truly amazing

Left: Chuntao Liu, Human
Resources and General Affairs
Department, KOKUYO(Shanghai) Management Co.,Ltd.
Right: Jiaqian Wang, Business
Strategy Department, KOKUYOFurniture Commerce &p Trading(Shanghai) Co., Ltd.

opportunity. (Jiaqian Wang)105

KOKUYO Group CSR Repor t 2014

With Local Communities (Community involvement and development)

KOKUYO Camlin, a manufacturer of visual art products, such as crayons and paints, as its flagship products, is taking aproactive stance in the promotion of artistic activities in India.

The World's Biggest Painting Competition
KOKUYO Camlin Ltd., is a long-established manufacturer of stationery items and visual
art materials, including pens and crayons. Camlin is also a pioneer in the area of
supporting artistic activities in India, and, even after it became a member of the
KOKUYO Group in 2011, as KOKUYO Camlin, it has continued to actively provide
support for the arts. One of the most representatives of these activities is the “All India
Camel Color Contest (AICCC)” for children. This contest has been held now for 40
years with the objective of raising the awareness of students regarding artistic activities
Children preparing their drawings at

and art, within the context of school education in India. This has been an extremely
schoolsignificant event for schools and children of India, and it targets students in a wide age
range from preschool children to 10th graders (equivalent to junior high school students in Japan). Excellent students are

selected from each school and after going through a regional qualifier, selected students receive the first prize. In fiscal
2013, 4,110,626 students from 4,631 schools participated in the contest. The unheard-of scale and size of this content havebeen acclaimed, and it was entered in the Guinness Book of Records as “The largest art competition in the world” in 2011.

Camel Art Foundation
The Camel Art Foundation (CAF), which was established by KOKUYO Camlin in 1997
with the aim of nurturing aspiring artists with talent, holds annual exhibitions in parts ofIndia to evaluate artworks created by art students, young professionals and artists. So
far, the exhibitions have been held 58 times and presented an award to a total of 650
artists, and the top performers are invited to a tour in Europe.
In 2013, the exhibition saw a large increase in applicants and at the same time, theFoundation made efforts to expand the range of activities through demonstrations andworkshops at art schools and education institutions. Additionally, the award winners ofWinners at the award ceremony

2013 were invited to an event, India Art Camp, which is set to start in June this year. This will be the first event for theFoundation to offer an opportunity to enrich their views of art history and culture. In the future, we will continue to step up
efforts to make the activities of the Foundation more valuable to nurture young talent.

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In India, although mathematics and science education is being emphasized,
the art receives little attention. However, a later study showed that the art
stimulates the innate curiosity of young children and increases the receptivityof the brain, suggesting evidence that art education is an extremely important,especially for children. What is more, art is also thought to help in establishingchildren's own sense of value and identity. For the past 40 years, KOKUYO
Camlin has been a host company of AICCC to aim for the enhancement of its
position in education. Today, AICCC has been incorporated into annual eventsin many schools and grown to become the world's largest art competition for
the number of participants, and it was entered in the Guinness Book ofRecords. We have set a goal to achieve 10 million participants in the near

(From left)
KOKUYO Camlin
Neelima Deodhar, in charge of
CAF,
Saumitra Prasad, Marketing
Division Director
Chandra Shekhar Ojha, in chargeof AICCC

future and continue with our activities under the goal.
Also, along with our efforts through AICCC, we participate in the assistance of future artists via CAF, and thisactivity mainly aims to increase the exposure of their artworks at exhibitions held by KOKUYO in various
regions in India and provide them with an opportunity to receive correct evaluation. We will continue contributing
to the development of the art field in India through the activities of AICCC and CAF.

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KOKUYO Group CSR Repor t 2014

With Local Communities (Community involvement and development)

Besides China and India, the KOKUYO Group actively participates in social contribution activities that make use of regional
characteristics in local communities, where the Group has developed its business, by endeavoring to understand cultural
background, religion, language, and the needs in each country and region.

Donation of Anniversary Notebooks in the Celebration of 40th Anniversary of Japan and
Vietnam Friendship
The year 2013 marks the 40th anniversary of Japan and Vietnam friendship (40thAnniversary of Diplomatic Relations between Japan and Vietnam), and a broad array ofmemorial projects were held in Vietnam throughout the year. To provide cooperation forthese memorial projects and in the hope of expanding the Japan-Vietnam relationship in
future, KOKUYO Vietnam manufactured original Campus notebooks printed with a logo
of Japan-Vietnam Friendship Year and donated approximately 200,000 notebooks to the
Executive Committee of the Japan-Vietnam Friendship Year. The original Campus
notebooks that were donated were mainly distributed among elementary and junior highschool students, as well as scholarship students, universities and schools offering
Japanese education, elementary and junior high schools involved in education andnutrition improvement projects and event venues of corporations and organizations.
One of the children who received the notebooks shared feedback that "I began studying
harder than before and became able to understand better. Learning is really fun!" Thechildren took advantage of the notebooks very well.
In future, we will continue to make a contribution to the development of both countries
and stay active for the children who will play important roles in the future for Vietnam.

Mangrove Planting Project in Thailand
In an effort to promote environment conservation, KOKUYO-IK Thailand engages in an
activity to plant mangrove trees in Thailand. Let by employee volunteers, the tree
planting project was conducted on the beaches located adjacent to the Bangpoo
Industrial Estate that KOKUYO-IK Thailand belongs to. A local administrative
organization takes charge of the cultivation and maintenance of mangrove trees after
planting to promote the formation of mangrove forests on an ongoing basis. In the
future, we will continue our efforts for environmental conservation hand-in-hand with thegovernment and organizations to promote sustainable management and theconservation of forests.

Activities with Local Communities in Malaysia
Each year, the volunteer employees of KOKUYO Malaysia engage in a wide variety ofsocial contribution activities. In fiscal 2013, a total of 30 employees joined the Maulidur
Rasul parade, which celebrates the birth of the Islamic Prophet Muhammad in January.
Although this annual parade is held in Negeri Sembilan, Seremban was chosen to be ahosting city that called in a number of corporations and organizations to participate in.
Also, in May, a total of 10 employees took part in the 7th Malaysia International Ekiden
Run in Putrajaya, a federal administrative capital located 25 km from Kuala Lumpur. The
Malaysia International Ekiden Run is one of the related events of the National YouthDay sponsored by the Ministry of Youth and Sports, and the participating Japanese108

KOKUYO Group CSR Repor t 2014

organizations include the Japanese Chamber of Commerce, Japanese schools,
Japanese corporations, Japanese Embassy, JICA and a team of Japanese students
learning Malay in Malaysia.
Besides, KOKUYO Malaysia takes part in an internship program and accepts interns
from nearby schools. We contribute to ongoing activities rooted in local communities.

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KOKUYO Group CSR Repor t 2014

With Local Communities (Community involvement and development)

The Flow of Utilizing Regional Materials
KOKUYO Furniture has been promoting the use of regional materials for more than 10
years. Using the regional timber, such as cedar and cypress, around the country,
KOKUYO Furniture can make a suggestion of furniture, accessories, and interior
design. In 2013, the Forestry Agency implemented the Wood-Use Points Program topromote the use of timber. Under the program, KOKUYO Furniture launched products
using Kitayama cedar of Kyoko, Shimanto cypress of Kochi, and cedar from Gunma.
The Harinoha series made by cedarof Gunma

Kitayama Cedar of Kyoko and White Birch of Hokkaido
One of the unique proposals made by KOKUYO Furniture is the production of regional
brands, which jointly develops products with using regional timber and establishes asales structure with local manufacturers and sales companies. Good examples include
the Imatoko series; furniture made using Kitayama cedar of Kyoto, which we have been
engaged in since 2010, and the Epiluca series; furniture made using white birch of
Hokkaido, which is currently in progress.
The Imatoko series offer furniture that utilizes the surface textures of Kitayama cedar of
Kyoto, which was used for alcove posts.
In recent years, as houses are becoming more westernized, not many houses havealcoves, causing the demand for alcove posts to decline dramatically. To that end, todiscover a new demand for Kitayama cedar, centering on a local design office, furniture

Table from the Imatoko series

plants in the production area of Kitayama cedar, local plants in Kyoto and designers
formed a team to create collaboration products. At present, we are offering proposals to
local governments and corporations in Kyoto in collaboration with sales companies.
The Epiluca series offers furniture with simple design that utilizes plywood made with
Sofa and chairs of the Epiluca
serieswhite birch of Hokkaido. It was designed with an image to use in lobbies and lounges.
Of all broad-leaf trees that are declining in Japan, white birch is the only tree that isseeing an increase of its accumulation, making it an eco-friendly resource. In the development, we teamed up with a local
plywood plant, furniture plant in Asahikawa and designers to successfully create furniture that is unique in Hokkaido.
Particularly in 2013, we paid a visit to broad leaf forests in Nakagawa-cho to hear about their policy of cultivating valuable
large-diameter trees while protecting broad-leaf trees and pledged to promote the cooperation of the lower and upper partsof river. In the future, we plan to make proposals to local governments and corporations through sales companies in
Hokkaido.

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KOKUYO Group CSR Repor t 2014

While Shimanto and KOKUYO Furniture have a long-established relationship,since the formation of the Yui no Mori Project in 2006, the degree of ourcollaboration became deeper. In the end of 2013, we jointly developed aProtocol Counter that uses Shimanto cypress and launched its sales. The
Protocol Counter is a highly flexible counter system that combines theadvantages of house fixtures and ready-made products. It also has anuniversal design and is designed to overturn the fixed image of traditional

Protocol Counter made using
Shimanto cypress

furniture made with timber from forest thinning. In addition, it is characterized
by its flexibility that allows using regional timber from all over the country, besides the Shimanto cypress,
making it easy to target local governments with forests across the country. Even if the timber from Shimanto is
not used, local laminated lumber plants can play a central role in producing furniture for people across thecountry.

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KOKUYO Group CSR Repor t 2014

With Local Communities (Community involvement and development)

The KOKUYO Group is continuously working to make a contribution toward measures against disasters in local
communities. We also take an active part in environmental conservation activities with local communities and engage insocial contribution activities for the field of education by utilizing product characteristics.

Council for Promotion of Measures Against People Stranded in the Shinagawa Station Areas
KOKUYO is a participating company of the council for promotion of measures against people stranded in the Shinagawa
station areas, which was established in 2008 and currently operated by the city of Minato. This council was originallypromoted by the Tokyo Metropolitan Government to establish a council in terminal stations to address the early return ofpeople stranded in the Shinagawa station areas due to the suspension of transportation facilities when a large earthquake
occurs.

We Took Part in the Joint Training for Addressing an Issue of People Stranded in the City of
Minato
One of the specific activities in fiscal 2013 includes the participation in the joint training
to address an issue of people stranded in the city of Minato, which was held by the cityof Minato in February 13. This training mainly aims to verify the rules for assisting
stranded people, which was provided by the council for promotion of measures against
people stranded in the Shinagawa station areas, as well as to promote better
understanding of the rules and identify issues. The training was joined by a total of 74
organizations and 171 participants who promote support for people who are unable toreturn home and stranded people in the city of Minato. The training was implemented on
the assumption that an earthquake occurred directly beneath the Tokyo Metropolitan
Area (maximum seismic intensity 7) and the essential utilities and public transportation

Training information shown on a
LCD screen

stopped in the entire Tokyo metropolitan area, and a large number of people are
stranded at Shinagawa station in search for information. The KOKUYO General Affairs
Department took part in the training as Headquarters members for the assistance of
stranded people. Together with people from other companies who acted as supporters
for stranded people and stranded people, the participants from KOKUYO helped withthe roll calls after assembling, preparation of equipment, support request to supporters,
information sharing (collection, organization, and provision of information) and the
distribution of entry tickets to enter transit facilities.

A picture taken during the training
held in Shinagawa station

With the participation in the training, we became able to gain a better understanding of a series of steps that are necessary
for support activities of stranded people based on the elements of actual work and the rules to be added to assist stranded
people. Additionally, the KOKUYO General Affairs Department was able to detect a number of envisioned emergencies andissues that were not on the rules and action checklist, which they created beforehand, and it was a good opportunity to
become conscious of various matters from the viewpoint of participants. The council will continue its efforts to make more
effective measures based on the envisioned emergencies and challenges found from the training.

Copy Paper Links to the Environment, Welfare, and the Community -The Eco-Lab Heart Shiga
Initiative KOKUYO Product Shiga and KOKUYO Marketing jointly engage in green procurement activities and since June 2006, they
have also participated in the Shiga Green Procurement Network (Abbreviated name: Shiga GPN), which is a regional
network activity in local communities. Additionally, from the very beginning, the KOKUYO Group has been engaged in the
Eco-Lab Heart Shiga initiative, which was developed by the study group for evaluation technique of green procurement of112

KOKUYO Group CSR Repor t 2014

the Shiga GPN and is currently operated by the Shiga Social Work Business Promotion
Center.
In this project, copy paper for daily use is put in a plastic packaging instead of
paperboard and people with disabilities who work at 150 cooperative workshops locatedin Shiga help deliver the copy paper, and it was established in 2007, aiming to strike abalance between the environment (reduction of unnecessary packaging) and thewelfare (promotion of the employment of people with disabilities). Also, copy paper ismanufactured by KOKUYO Product Shiga, ensuring the model of local production for
local consumption.

Plastic packaging that is used as a
substitute for paperboard packaging

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

Accepting Plant Tours
The KOKUYO Group offers plant tours for local students, aiming to nurture their viewsof profession and work awareness that are in close contact with local companies.
KOKUYO Product Shiga, which is the KOKUYO Group's key plant for paper products,
was visited by a total of 756 students from 13 schools in fiscal 2013. We hope tocontribute to school education by allowing students to have a look at the process ofmanufacturing products and see employees working, and from there, we want them tofeel the preciousness of products, ingenious attempts of workers and their passion for
manufacturing. Also, our environmental efforts can serve as tools for learning theenvironment, and our efforts are introduced in a supplementary reader for students of local elementary schools.

High School Students from Nagasaki Visited KOKUYO Commerce and KOKUYO (Shanghai)Management
On March 13, a total of seven high school students and two escorting teachers from
Nagasaki visited KOKUYO Commerce as part of the East Asia High School Students
Friendship Career Up Project *, which Nagasaki's High School Education Section has
launched this year. Students took a tour around the offices of KOKUYO Commerce and
KOKUYO (Shanghai) Management and listened to the explanation about KOKUYO's
stationery business in China, then asked questions. Although students had nervous facebecause they have never worked before and have little occasion to speak in front ofStudents received Campus

businesspersons, they sent us a strong and pure message that they wanted to learn
notebooks as a keepsake.
something out of it.
In recent years in China, we see an increased number of requests for accepting internships for high school and college
students, which aims to facilitate communication between students and businessmen, and we realize that the globalization
efforts are becoming more intense not only in corporations but also in the place of education. We will continue to engage incontribution activities rooted in local communities.
* To expand the vision of high school students who are the bearers of Nagasaki's future, the project aims to nurture human resources with
communication skills that can build global perspectives and affluent human relations and those who can play an active part in local communities
by experiencing industrial job sites that are active on a global scale in the international city, Shanghai.

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Blood Donation Activity in Workplaces Across the Country
As a social contribution activity that anyone can easily access, the Osaka Head Office ofthe KOKUYO Group has been engaged in a blood donation activity since 1980, and so
far, a total of 4,635 people participated in the project. (Of them, 3,940 people drew
blood) Although the blood donation activity was normally implemented during winterwhen there was a shortage of blood, we have started the activity during summer since2011. In fiscal 2013, we invited the Japanese Red Cross Osaka Blood Center inJanuary and July and a total of 92 people participated in blood donation. (Of them, 65
people drew blood) We also hold blood donation activity in plants and distribution
centers of the KOKUYO Group. Not only for social contribution, is it also useful for self-health management.

Regional Contribution through Clean-Up Activities
The Osaka Head Office of the KOKUYO Group implements an annual clean-up activity
to jointly clean up the periphery of the office with local residents' association. Since
fiscal 2011, the activity has linked up with the Osaka Marathon and implemented acleaning activity in the entire Osaka area, named Osaka Marathon Clean-Up Project,with an intention to welcome visitors in a cleaner city. In fiscal 2013, we took part in the
project with local residents' association. A total of 60 people including local volunteers
participated in the clean-up activity from early morning on October 21 and collected 20
kg of garbage. We also hold clean-up activity in plants and distribution centers of the
KOKUYO Group across the country, and through the activity, we are pledged to promote cooperation with local
communities and fulfill our social responsibilities as a trusted corporate citizen in the future.

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With the Global Environment
KOKUYO recognizes solving global environment concerns, such as global warming and deforestation
as the urgent problem of. Each and every one of our employees is concentrating their intellect on the
search for solution to these problems. Furthermore, we have introduced an environment management
system throughout our entire company in order to work in solidarity along with the environment.

116p Environmental Management
119p Global Warming Preventive Measures
122p Resource-Saving and Recycling Measures
124p Compliance with Laws and Regulations and Preventing
Pollution

125p Developing Environmentally Friendly Products andServices
127p Biodiversity
130p Promoting Environmental Communications
132p Third-Party Verification Report

Views linked with the corporate philosophy, which have been highly valued by KOKUYOIn 2008, KOKUYO made a pledge to zero the number of eco-batsu products

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

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

With the Global Environment (The environment)

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

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

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KOKUYO Group CSR Repor t 2014

Medium- to Long-Term Environmental Action Plan
Medium- to long-term environmental action plan (fiscal year 2020)
Environmental
policyFiscal 2013
performance

Fiscal 2020
goals

Reduced by 7.6% (inJapan)

Reduce by
30% (in

Measures

Prevention of global
warmingPrevention of
globalwarming
Energy conservation

Cut CO2 emissions (vs. FY
1990)

Japan)
Cut energy consumption (vs.
FY 2010)

Reduced by 7.5%
(unit energy

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

consumption)energyconsumption)

Resource
saving andResource-saving
and recycling

recyclingmeasures

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

92.7%

100%

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

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

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KOKUYO Group CSR Repor t 2014

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 2013, primary audits were conducted between July 1 and 31, secondary audits
were conducted between August 1 and 28, and third-party inspection was carried out between December 3 and 6.

Internal audits

Third-party inspection (ISO 14001)

FY in which
conducted

2012

2013

Sites subject tomonitoring

75

75

FY in which conducted2012(update)2013(periodic)

Sites subject to examination

24

23

0

0

· Improvement opportunities

26

20

Strong points

00Good points

7

6

Matters cited for improvement· Primary audits

59· Secondary
audits16

Matters cited60· Minor points of

52

15

nonconformity

55· Minor points ofnonconformity

13

16· Corrections

39

39

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KOKUYO Group CSR Repor t 2014

With the Global Environment (The environment)

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

Summary for Fiscal 2013
If calculated for the existing scope of operations using the electricity emissions factor of 0.378 kg-CO2/kWh (which is theoverall power average in 2000 as reported by the Federation of Electric Power Companies), the KOKUYO Group's CO2
emissions in fiscal 2013 totaled 26,626 tons, 866 tons more than in the previous fiscal year. Based on estimates, there wereemission reductions of 768 tons due to operational improvements and 281 tons due to equipment improvements.
Manufacturing operations and the closing and consolidating of facilities raised emissions by 1,915 tons. As a result, there
was an effective reduction in CO2 emissions of 1,049 tons from a combination of operational and equipment improvements.
Consequently, excluding the impact of production activities, emissions were down 4.1% from the previous fiscal year toallow us to meet our goal of a 2.8% reduction.
Looking at sources of CO2 emissions, there was a decrease of 537 tons at factories due to higher manufacturing efficiency
and other improvements. However, factories recorded a net increase in emissions of about 954 tons because growth inproduction volume raised emissions by 1,491 tons. For distribution activities, although emissions increased by 250 tons
because of a higher volume of operations, there was a reduction of 178 tons due to heightened measures to conserve
electricity and other energy use for a net increase in emissions of 72 tons. In the offices, emissions were down 160 tons
thanks to the more efficient use of heating and cooling systems and the effective use of heat storage. Additionally, to use
energy more efficiently, we oversee unit energy consumption, which is obtained by dividing energy consumption by sales. In
fiscal 2013, our unit energy consumption was 0.9% less than in the previous fiscal year.

Major Increase in CO2 as Emission Figures Worsen
If the figures for each of the various countries on the greenhouse gas (GHG) protocol website made public by the World
Business Council for Sustainable Development (WBCSD) and the World Resource Institute (WRI) are adopted as thefigures for the CO2 emission coefficients and added to the Japanese CO2 emission coefficients based on the Act
Concerning the Promotion of Global Warming Countermeasures (for fiscal 2013, figures by electric power utility in fiscal
2011 and actual emission coefficients in fiscal 2012), then the total rises 7,178 tons to 33,804 tons.

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KOKUYO Group CSR Repor t 2014

Expanding the Scope of Reporting
While 17 companies were included in the scope of CO2 emission reporting (reporting scope A(*1)) until fiscal 2011, allconsolidated subsidiaries came to be included in the scope of reporting starting in fiscal 2012 (for fiscal 2013, 36
companies; reporting scope B(*2)). As a result, CO2 emissions totaled 44,777 tons (including 1,800 tons at
non-consolidated sales companies). The use of a less favorable emission coefficient and the extension of CO2 emission
reporting to the supply chain have resulted in significant changes for the KOKUYO Group. Consequently, we believe thatthe medium-term goals for emissions will have to be reexamined.
*1: A: KOKUYO Co., Ltd., 13 consolidated subsidiaries, and 3 affiliated companies*2: B: KOKUYO Co., Ltd., 24 consolidated subsidiaries, and 11 affiliated companies* Related information：「Changes in CO2 emissions」

Global Warming Preventive Measures at Factories
Operational improvements at factories lowered CO2 emissions by 325 tons. This wasachieved in part by replacing product molds faster, reviewing compressor operations,performing inspections, strictly following operating rules for production equipment, andconducting energy checks to reduce waste. Installing energy-conserving equipment,such as inverters and LED lighting, also cut emissions by 212 tons. A higher volume of
production raised emissions by 1,491 tons over the previous fiscal year. However, theaforementioned operational and equipment improvements lowered emissions by 537
tons for a net increase of 954 tons (649 tons in Japan and 305 tons at factories
overseas).

Solar panels installed at KOKUYO
Product Shiga

Global Warming Preventive Measures for Distribution
Emissions associated with distribution (storage and shipments) were 72 tons more thanin the previous fiscal year. Constant measures to conserve energy resulted inoperational improvements that cut emissions by 112 tons. Equipment improvements,
such as the installation of energy-efficient lighting fixtures and the reviewing of theproper lighting of distribution centers, lowered emissions by 66 tons. At the KOKUYO
Logitem Ina Distribution Center (which has an automated multilevel warehouse), a
power demand monitoring system was installed to reduce this facility's peak electricity
use. While CO2 emissions attributed to distribution increased 352 tons due to the
opening of the KAUNET Sapporo Distribution Center and a larger volume of operations

Hybrid street lights installed at the
KOKUYO Metropolitan IDC

in 2013, the net increase was 72 tons because of offsetting by a reduction of 178 tons from operational and equipment
improvements and 102 tons from the closing and consolidation of distribution facilities.

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KOKUYO Group CSR Repor t 2014

Global Warming Preventive Measures at Offices
Offices lowered CO2 emissions by 160 tons over the previous fiscal year. To accomplish
this, we conducted a review of the methods by which heating and cooling systems werebeing operated, a review of working styles, promotion of no-overtime days and activity
encourages employees to go home early, and reduction of electricity use, such as byreplacing lighting fixtures with LEDs. At our Shinagawa office, an electric power
visualization system is used to lower electricity use during on-peak hour of daytime
through the efficient operation of heating and cooling systems and heat storage tanks.
In addition, a program that encourages people to use public transportation for sales
activities cut gasoline use by 7%, which represents a reduction in CO2 emissions of 74

Solar panels installed at our
Shinagawa officetons. In fiscal 2013, the cool biz and warm biz campaigns were combined into a smart biz campaign that is in effect all year
long.

The ECOLIVE Office was opened in November 2008. Progress has beensteadily made towards achieving our goal of reducing CO2 emissions to half ofwhat they were before renovations were undertaken. However, emissions
rose on a year-on-year basis for the first time in fiscal 2012. In fiscal 2013,
operating rules were reviewed and strictly applied once again to employees

Shiori Yomogida
Environmental Business TCM
Tasks
TCM Value Unit
KOKUYO Furniture

working at this office. This helped to bring about a 56.2% reduction inemissions.
It goes without saying that basic rules consist of such stipulations as thosethat require that employees refrain from using electricity wastefully. In 2013, particular effort was directed atarea lighting during overtime periods. Thus, the use of lighting is reduced after 7:00 pm and only certain areas
are permitted for overtime use.
Although we were beginning to lose sight of what this initiative was all about after the passage of five years fromthe opening of our office, we were glad to have had a chance to renew our understanding of how people workand the importance of awareness on their part.

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With the Global Environment (The environment)

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

Summary for Fiscal 2013
Higher Recycling Rate
The volume of waste materials generated by KOKUYO Group business offices in fiscal 2013, including all consolidated
subsidiaries, was 19,370 tons (including 94 tons at non-consolidated sales companies) for a year-on-year increase of 1,898
tons. Of this amount, the launch of operations at our Shanghai plant accounted for approximately 700 tons. While
production rose by 8%, we managed to limit the increase in the volume of waste materials generated to 4% thanks in part toimproved yield rates.
Such efforts on our part give rise to a recycling rate of 97.8%, an increase of 0.4 percentage points over the previous year.

Strict Adherence to the Proper Disposition of Waste Materials
The responsibilities of general contractors with respect to the processing of construction site waste materials are clearly
defined and the obligations of companies that generate waste materials are becoming even stricter. In fiscal 2013, we
endeavored to improve the precision of data on waste materials generated at construction sites. Consequently, we
ascertained that approximately 5,200 tons of waste materials were generated at construction sites and the recycling rate
was approximately 74%. While the mix of many different types of waste materials generated at construction sites accounts
for the difficulty of recycling in many cases, we will reduce emissions and continue to take actions aimed at properly
disposing of waste materials and achieving our medium to long-term goal of a recycling rate of 100%.

Reusing and Recycling End-of-Life Products
When we deliver products, we pick up end-of-life products for disposal from customers
and recycle or reuse these items depending on their condition.
In fiscal 2013, KOKUYO Logitem collected 1,165 tons of office desks and chairs andother used products. Fifty-two tons were reused and 629 tons were dismantled andsorted for recycling. Our distribution center manages to reduce waste materials byapproximately 200 tons by repairing and reusing cardboard, wooden pallets, and otheritems.
A chair being dismantled and sorted
for recycling

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KOKUYO Group CSR Repor t 2014

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

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KOKUYO Group CSR Repor t 2014

With the Global Environment (The environment)

We strive to prevent environmental pollution by complying with environmental laws and regulations, as well as with industry
guidelines and voluntary standards to which we have agreed to be bound.

Fiscal 2013 Activities
Conducting a Soil-Pollution Survey in the South Block of KOKUYO's Head Office
We independently conducted a soil-use history investigation and soil-pollution investigation to ascertain whether there is
any soil pollution caused by specified toxic substances in the south block of KOKUYO's Osaka head office. A soil-use
history investigation is conducted by consulting registries and old maps to get a handle on the historical geography for andthe state of the past handling of hazardous substances at a given site and can be used to ascertain the risk of soil orgroundwater pollution. This particular investigation did not reveal any history of the use of hazardous substances.
We then conducted a soil-pollution investigation by obtaining bore samples and were able to detect lead and leadcompounds in amounts that exceeded an acceptable threshold. Because the south block is covered in asphalt and therange of detection extended to 50 centimeters below the surface, the groundwater at this site is unaffected by pollution. We
reported the results of these investigations to the city of Osaka, submitted a plan of measures to be subsequently
implemented, and proceeded to remove the tainted soil from the ground and replace it with clean soil after an attended
survey was conducted by the city of Osaka. The tainted soil will be reused as construction material after it is cleaned andprocessed by a licensed polluted soil treatment facility operator.

Pollution investigation

Polluted soil is dug up and removed

Clean soil is returned to the groundManagement of Substances Subject to the PRTR Law (Pollution Release and Transfer Register
Law)
The KOKUYO Group endeavors to strictly manage substances subject to the PRTR Law and seeks to impose controls onsuch substances. The revisions made to the PRTR Law in 2010 caused ferric chloride, which is used as a flocculating agent
in the treatment of wastewater at KOKUYO Furniture's Mie Plant, to be designated a class I designated chemical
substance. After undergoing neutralization in a wastewater treatment facility, ferric chloride is transformed into ferrichydroxide, which does not constitute a substance subject to the PRTR Law, and is then subject to waste treatment in a
detoxified state.

Wastewater treatment facility at our

Wastewater undergoing treatment

Transformed into ferric hydroxide

Mie Plant

124

KOKUYO Group CSR Repor t 2014

With the Global Environment (The environment)

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

Fiscal 2013 Activities
Continuing to Ensure That No Eco-Batsu Mark Graces Our Catalog
The KOKUYO Group started using the Eco-Batsu mark for products in the 2008 General Catalog. This mark is used forgroup products that are not sufficiently environmentally friendly at any of the stages of their life cycle: manufacturing,
distribution, usage, and disposal. We tasked ourselves with removing the Eco-Batsu mark from all of our products in three
years. This goal was reached in the 2011 General Catalog and no Eco-Batsu products have emerged since that time. In
continuing this trend, none can be found in the 2013 General Catalog.

Further Progress of Eco-Friendly Products
Eco-Batsu activities go beyond manufacturing processes. Even for employees not directly involved in production, Eco-Batsu
serves to prompt a reexamination of how jobs are done, how office space is utilized, and how proposals are submitted tocustomers. Since achieving the goal of removing the Eco-Batsu mark from our products, we have been seeking to develop
eco-friendly products that surpass customers' expectations in accordance with the theme of “eco + creativity.”

YOKUMI-L, a Whiteboard Marker

Since the YOKUMI-L uses a cartridge filled with ink formulated to be resistant toadhesion, a user can tell at a glance how much ink is remaining and whether or not it istime to change cartridges. In addition, the cartridge and pen tip are designed to beeasily replaced without getting your hands dirty.

125

YOKUMI-L, a whiteboard marker

KOKUYO Group CSR Repor t 2014

RAKU HARI, Double-Sided TapeTo use RAKU HARI, simply slide the dispenser back on the intended surface in order tolay down tape while the sticker-release paper is rewound at the same time. There is noneed to manually peel off the sticker-release paper, which means that no trash is
RAKU HARI, double-sided tapeproduced while you are working. Since the dispenser and refillable tape are compatible
with each other irrespective of the width of the tape and the type of adhesion in use, loading is possible no matter what
combination is applied.

JUTO, a Meeting Table

JUTO is a meeting table that offers extensive variations to enable you to create aconfiguration that meets your current needs. The tabletop and legs each come in threedifferent colors. Feel free to put together a work configuration, a configuration for
JUTO
visitors, or a configuration for a rest, to name but a few examples of what you can do. Inorder to reduce CO2 emissions when these tables are shipped, they are packaged in a compact, disassembled state.
Simply assemble the product at the site where it will be used.

From May 2013, KAUNET, an office supplies mail and online order business
operating in Japan, launched a service to allow customers to select a type of
packaging for products to be delivered when placing an online order. At
KAUNET, the type of packaging is determined upon taking into account theneed to maintain the quality of the products that are to be delivered, achieve
resource savings, and reduce the amount of waste products that are
generated. In addition to the cardboard packaging that is typically used by amail and online order business, we have been promoting the adoption of
Simplified packaging initiative

simplified packaging based on the use of paper or polyethylene bags fromearly on as a resource-saving measure that can be applied for low-bulk orders for which it is determined that
quality can be maintained.
Shipping products prepared with simplified packaging has garnered favorable reviews from customers. On theother hand, customers have also indicated that they prefer cardboard packaging when a purchased product will
be delivered to a client or presented as a gift. For this reason, each customer can choose packaging type ateach time an order is placed.

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KOKUYO Group CSR Repor t 2014

With the Global Environment (The environment)

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

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

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

ReEDEN Project
The KOKUYO Product Shiga, one of the KOKUYO Group's principal facilities for
manufacturing notebooks and other paper-based products, supports the lives of many
people and engages actively in environmental conservation projects as it operates inclose proximity to Lake Biwa, an important natural home for many different species oflife. One of these receiving special emphasis is the ReEDEN Project, which began inNovember 2007 and aims to promote the use of the yoshi reed plant, a type of common
reed plant that grows along the shores of nearby Lake Biwa, and conduct an
educational program to shed light on this plant species. The yoshi reed plant absorbs
CO2, as well as nitrogen and phosphorous as it grows and thereby helps to purify theJanuary: A magnificent field of yoshi
reed plants

lake's water. It is, therefore, indispensable for preserving the habitats of fish and birds. (Although the yoshi reed plant wastraditionally harvested for use as a roofing material, demand gradually diminished as lifestyles changed, which caused yoshi
reed fields to fall into a state of neglect.) As a local enterprise that manufactures paper products, KOKUYO recognizes theneed to spearhead broader efforts to utilize the yoshi reed plant .

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KOKUYO Group CSR Repor t 2014

Protecting Lake Biwa by Expanding the Use of Yoshi Reed Plants
Drawing on KOKUYO's production technology and the development capabilities of paper manufacturing companies,
KOKUYO is cultivating the yoshi reed plant, using it in the production of industrial products, including copier paper andnotebooks, and selling them at appropriate market prices as part of the ReEDEN brand series. In addition, KOKUYO hasdeveloped higher-value-added products, such as paper for business cards made using 100% yoshi pulp and yoshi
calligraphy pens. The objective of these activities is to promote the use of the yoshi reed plant to create a market that willcontribute to preserving the environment. Seventy-six products have been released thus far. KOKUYO's ReEDEN series
aims to create products and services that convey the appeal of Shiga Prefecture and was selected as an authorized bearerof the prefecture's official brand, Koko Cool Motherlake Selection 2012. In addition, a portion of the sales of these products
is donated to local environmental groups and used in activities to preserve the yoshi reed plant.

Broadening the Circle of Friends Helping to Preserve Lake Biwa as a Member of the Community
The Network for Preserving Lake Biwa with Yoshi was formed in 2009 with the KOKUYO Shiga Plant serving as its
secretariat. The purpose of this network is to contribute to preserving the natural environment of Lake Biwa through a loose
alliance of a wide range of companies, groups, and other organizations. This network, which comprised only a few
companies in the beginning, has grown to the point where the Lake Biwa Museum was recently welcomed as its one
hundredth member, as clear a sign as any that the mission of this network enjoys broad support. The main activities of thisnetwork include preservation of the yoshi fields that play an important role in preserving the ecosystem and water
environment of Lake Biwa. Initially, a few employees from the KOKUYO Shiga Plant began these activities by harvesting
the yoshi reed plant several times in winter. Now, however, several hundred members of local environmental groups andthis network gather together for harvesting. In addition, these members highlight environmental issues affecting the region
and the environmental activities of network members. To further heighten awareness of the environment and strengthen ties
among members, the network sends out a newsletter. Looking ahead, the network is examining a range of issues related to
the lake and is exploring ideas for new activities that are both fun and that will draw the attention of local communities to its
goal of contributing broadly to improving the Lake Biwa environment.

The ReEDEN series was selected as an authorized bearer of Shiga
prefecture's official brand, Koko Cool.

Network members harvest the yoshi
reed plant

Yui no Mori Project
The KOKUYO Shimanto Yui no Mori Project, which began in the Shimanto region of Kochi Prefecture in 2006 with the aimof regenerating man-made forests that have fallen into ruin and revitalizing the areas that protect these forests inaccordance with the theme of “creating a virtuous circle between the environment and the economy,” celebrated its eighthyear of operations in 2013.
Making the effect of forest thinning visible is essential for the success of forest protection activities. To observe the effects ofthese activities over the long term, KOKUYO works with the Shimanto-cho Forest Union and Shimanto High School toconduct annual monitoring surveys. As one of the types of surveys that are conducted, vegetation surveys are ongoing at
two specific locations to classify vegetation and determine the degree of the thickness of vegetation growth, including for talltrees, short trees, and herbaceous plants. The seventh of these surveys was conducted in July 2013 and revealed that the
number of species increased from 68 to 74 and from 44 to 75, respectively, at these two sites. The change in the number of
species found at the latter site was especially large and is believed to represent the first signs of a gradually emerging
dividend of the thinning that was carried out in 2011.

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KOKUYO Group CSR Repor t 2014

Expanding the Yui no Mori Project with the Aim of Creating a Virtuous Circle Between theEnvironment and the Economy
To use the wood fiber cut through thinning activities effectively, KOKUYO Furniture has been working in collaboration withthe local Shimanto-cho Forest Union since 2000 to manufacture and sell furniture made from this wood. In 2013, theProtocol Series was launched to manufacture and sell products made from this wood. In addition, KAUNET began selling
products, mainly stationery items under the Yui no Mori brand, in 2007 and now offers 47 items as of 2013. To increase
understanding of this project and increase the ranks of its supporters, KAUNET created a system in 2008 to allow
customers to donate some of the points they have earned to the project; about 100 applications have been made fordonating points this year alone. Beginning in 2013, the issuance of CO2 Absorption Certificates for areas of land thinned
thanks to donations has helped to make the effects of forest thinning visible. It is hoped that this initiative will continue topromote a greater understanding of this project. In addition, the Yui no Mori 1% Gift Project was inaugurated in February
2011 and continues to operate today. Under this project, a portion of the sales of Yui no Mori brand products is donated toMidori no Bokin (Green Collection Drive), which is organized by Japan's National Land Afforestation Promotion
Organization.
The Yui no Mori project began with only 100 hectares. In fiscal 2013, the land area covered by this project has grown toabout 3,900 hectares and the cumulative area that has been thinned has expanded to 883 hectares. The project received a
CO2 absorption certificate from Kochi Prefecture, testifying that the forestlands had absorbed 5,628 tons of CO2. With thesupport of so many interested persons, we will continue to expand the Yui no Mori project.

Conducting a water-quality survey

KAUNET is conferred a CO2
absorption certificate

Protocol Series furniture madeusing wood fiber cut throughthinning activities

The Yui no Mori Facebook Page Is Now Open!
The Yui no Mori Facebook page was launched in 2013 with the aim of galvanizing bothinternal and external communications while transmitting information on businessactivities and events relating to the project. The activities put in daily by employees andlocal supporters will be showcased through Facebook.

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KOKUYO Group CSR Repor t 2014

With the Global Environment (The environment)

We carry out dialogue concerning information on initiatives for environmental conservation and on the burden placed on theenvironment with various stakeholders.

Three-Party Discussion Held by President Kuroda with C.W. Nicol and Governor Ozaki of
Kochi Prefecture at a Conference Organized for the Appreciation of Forests
On February 22, 2013, an event entitled A Conference Organized in Osaka for the Appreciation of Forests: Protecting the
Shimanto River, the Last Clear Stream in Japan was held to cast light on the role played by forests and the unparalleledappeal of the Shimanto River. At this event, a three-party discussion attended by President Akihiro Kuroda of KOKUYO,
C.W. Nicol, and Governor Masanao Ozaki of Kochi Prefecture was held.
As part of this discussion, President Kuroda introduced contributory activities being carried by the Kuroda Afforestation
Promotion Corporation, the founding of which was inspired by the founder's love of the natural environment, outlined theresults that have been obtained through the Yui no Mori Project, and identified a number of initiatives. These include tours
for the certification of new employees of the KOKUYO Group and the development of products and space design usingwood obtained through the thinning process.
To protect forests, we have to play an active part and use more trees. This is the key message coming out of this event, onethat we will continue to communicate to people through the Yui no Mori Project.

Companies and Environment Expo 2013 and a Contest Featuring Business Ideas
Companies and Environment Expo 2013 is an annual event held under the auspices of the Minato Eco-Conscious
Consortium, an organization formed to bring Minato Ward and companies based in Minato Ward together. This event washeld Between November 8 (Friday) and 10 (Sunday). As part of this event, a contest of environmental business ideas
proposed by university students was organized to raise environmental awareness among the young and harness their ideas
for the environmental activities of companies. Entrants were required to conceptualize business models according tothemes assigned to them by companies. As a company providing a theme, KOKUYO participated in this contest. Fiveteams of university students entered this event, of which two came up with a business model that adhered to the theme
presented by KOKUYO: develop a business model that ties the corporate social responsibility of companies operating inlarge cities to the conservation of local forests and regional revitalization. On the day of the event, the business conceived
by each of these teams was presented. One was entitled “Dining tables and forests: a project of warmth” while the otherwas entitled “Nurturing people in the bosom of forests.”130

KOKUYO Group CSR Repor t 2014

Helping out in Our Small Way by Donating to the Tanzania Pole Pole Club
Since 2008, KOKUYO Group has worked with the Tanzania Pole Pole Club, a citizen's
group engaging in international cooperation activities (gathering used stamps andcards) in collaboration with villagers for the planting of trees in this east African country.
In fiscal 2013, KOKUYO donated 49,800 stamps and 1,108 cards to this group. As aresult, about 160 tree seedlings were donated. These seedlings were planted as part ofafforestation activities being conducted near Mt. Kilimanjaro (in Tanzania), which has
been designated a World Heritage site.

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KOKUYO Group CSR Repor t 2014

With the Global Environment (The environment)

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

Summary of Third-Party Verification Report
The environmental load data of 36 companies of the KOKUYO Group were subjected to third-party verification as carriedout at the KOKUYO Head Office. In addition, on-site examinations of data measurement and management methods wereconducted at the KOKUYO MVP Aoya Factory, the KOKUYO COMMEREC (SHANGHAI) CO.,LTD Shanghai Factory(production division), KOKUYO Furniture Store Business Division, KOKUYO Engineering & Technology Osaki Office,
KOKUYO Marketing Hiroshima Office (sales and service division), and KAUNET Fukuoka Distribution Center (logistics
division).
As a result of this process, a rating of “assessable” was received for 11 cases, a rating of “improvement opportunity” wasreceived for 28 cases, and a rating of “request revisions” was received for 34 cases. KOKUYO is slated to respondproactively in order to improve the accuracy of information disclosure in those cases rated as “improvement opportunity.”132

KOKUYO Group CSR Repor t 2014

CSR Management (Organizational governance)

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

IssuesWeb page
TOP Dialogue
Corporate Philosophy
Top Commitment and Basic Concepts
Corporate Governance
KOKUYO's CSR Charter
Kokuyo Group Code of Conduct
Start of the Anniversary Month of KOKUYO's Founding

Organizational
governanceEfforts for Promoting an Understanding of KOKUYO'SCSR Activities

Issue 1: Organizational governanceInitiatives to Promote Compliance
KOKUYO's Business Continuity Planning Initiatives
KOKUYO'S Responsibilities to Stakeholders
Awards and Other Recognition Received from Outside
the KOKUYO GroupSpecial Report: Pursuit Values to the Limits for Learners
and Workers
Corporate Philosophy
Top Commitment and Basic Concepts
KOKUYO's CSR Charter

Human rights

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

Kokuyo Group Code of Conduct

Issue 3: Avoidance of complicity
Issue 4: Resolving grievances

CSR Activities

Efforts for Promoting an Understanding of KOKUYO'S
Initiatives to Promote Compliance

Issue 5: Discrimination andvulnerable groups
Issue 6: Civil and political rights
Issue 7: Economic, social andCustomer Support and Services
A System for Utilizing Feedback from Customers
Basic Framework for Diversity

cultural rights
Issue 8: Fundamental principles andSupport for Active Participation of Diverse Human
Resources

rights at work

KOKUYO Group Basic Procurement Policy
Working together with Our Suppliers
Education Support Activities in China
CSR Data: Society

133

KOKUYO Group CSR Repor t 2014

KOKUYO's CSR Charter

Labor
practices

Issue 1: Employment andemployment relationships

Kokuyo Group Code of Conduct

Issue 2: Conditions of work andsocial protection
Issue 3: Social dialogue

Human Resource Development Program

Issue 4: Health and safety at work

Labor Practices/Safety and Health

Issue 5: Human development and

Healthy Living and Mental Healthtraining in the workplace

KOKUYO's Business Continuity Planning Initiatives

Personnel System
Achieving a Good Work/Life Balance
Enhancement of Global Human Resource Development

CSR Data: Society
KOKUYO's CSR Charter
Kokuyo Group Code of Conduct
Environmental Management
Global Warming Preventive Measures
Issue 1: Prevention of pollution
Issue 2: Sustainable resource use
Theenvironment

Resource-Saving and Recycling Measures
Compliance with Laws and Regulations and Preventing
Pollution

Issue 3: Climate change mitigation
and adaptation
Issue 4: Protection of theDeveloping Environmentally Friendly Products andServices

environment, biodiversity andBiodiversity

restoration of natural habitats

Promoting Environmental Communications
Third-Party Verification Report
Environmental Performance Data
Reports by Business Site
Corporate GovernanceFair operating
practices

Issue 1: Anti-corruption
Issue 2: Responsible politicalinvolvement
Issue 3: Fair competition
Issue 4: Promoting social

KOKUYO's CSR Charter

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

KOKUYO Group Basic Procurement Policy

Kokuyo Group Code of Conduct
Efforts for Promoting an Understanding of KOKUYO'SCSR Activities
Initiatives to Promote Compliance
Working together with Our SuppliersWorking with Supply Channel Participants

134

KOKUYO Group CSR Repor t 2014

KOKUYO's CSR Charter
Red Tech: Red-Colored Instant Adhesive That Turns

Issue 1: Fair marketing, factual andunbiased information and faircontractual practices

Transparent as It Dries
Campus Notebooks with Ruled Lines Designed for
Study

Issue 2: Protecting consumers'
health and safety
Issue 3: Sustainable consumption
ConsumerissuesThe UD+3 Series
INSPINE - Inspiring Innovations in Office Chairs

Issue 4: Consumer services,support and complaint and dispute

KAUNET Offers Ease of Choice and Awarenessresolution
Issue 5: Consumer data protection
and privacy

Views Regarding Quality Assurance at KOKUYOFurniture

Views Regarding Quality Assurance at KOKUYO S&T

Issue 6: Access to essential

Activities for Creating a Menu of Countermeasures for
Disasters

services

Customer Support and Services

Issue 7: Education and awareness

A System for Utilizing Feedback from Customers
The Future of Tohoku
KOKUYO's CSR Charter
Kokuyo Group Code of Conduct

Community
involvement
anddevelopment

Issue 1: Community involvement
Issue 2: Education and culture
Issue 3: Employment creation andskills development
Issue 4: Technology development
and access

The Job Study Initiative

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

Social Contribution Activities by Countries

KOKUYO Design Awards
The Future of Tohoku
Education Support Activities in China
KOKUYO Camlin of India's Promotion of Artistic
Activities
Regional Brand Production
Contribution Activities Deeply Rooted in Regional
Communities
Biodiversity

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KOKUYO Group CSR Repor t 2014

Third-Party Assessments

A List of Awards and Other Recognition Received from Outside the KOKUYO Group
CompanyAwardsSponsor

The flagship showroom in Shanghai received

CIID (China

KOKUYO Furniture

the silver prize at the China Interior Design
Academy Award.

Institute of Interior
Design)

UDS and KOKUYOFurniture

Hotel Anteroom Kyoto received the 2013 Gold
Circle Award (a link to an external site)AGODA

KOKUYO Furniture

AIRFORT received the Merit Prize for Seating
Options at the Product Innovations 2013.

Date
December
2013
December
2013
December

Buildings

2013

KOKUYOWorksight magazine won the first prize in theProfessional Information Services at the HR
Award 2013.

Personnel Affairs
Department inJapan

November
2013

KaunetKaunet won the Merit Prize at the HitosuzumiAward 2013.

Japan
Empowerment
Consortium (JEC)

November
2013

KOKUYO Furniture

The flagship showroom in Shanghai received
theTop10 Design of year Retail Prize and the
Design and Material Promotion award at theJINTANG PRIZE 2013.

www.chinadesigner.com

November
2013

International
Association for

November

KOKUYO Furniture

KOKUYO FurnitureService counter lobby chair, PADRE, won the
IAUD Award 2013.

Universal Design(IAUD)

Received the first prize in the office furniture at
the building materials and equipment supplierranking 2013.

Nikkei BP

2013

November
2013

Five products (PUNTO; office chair, brackets;a module-type high back sofa system, WT-300
KOKUYO Furnitureseries; conference table, ofon; a new officefurniture brand, and Leafline; conferencetable), and Creative Lounge MOV; amembership office service, won the 2013

Japan Institute of
Design Promotion

October 2013

Good Design Award.
UDS and KOKUYO

Anteroom Apartment Osaka won the 2013

Japan Institute ofFurniture

Good Design Award (a link to an external site)

Design Promotion

136

October 2013

KOKUYO Group CSR Repor t 2014

Company

KOKUYO FurnitureAwardsSponsor

Date

The iPad application, te.to.te, won first prize at

JWSDA (JapanWeb Solution

September

the JWSDA Web Solution Design Award
2012-13.

DesignAssociation)
India Quality
Control Forum(Mumbai Office)2013

KOKUYO Camlin

Won the gold prize at the Quality Improvement
Case Presentation.
The flagship showroom in Shanghai received
the Red Dot Design Award at theCommunication Design 2013.

Design Zentrum

KOKUYO Furniture

Kids' furniture series, anfun, won the 7th Kids

Kids Design

Design Award.

Association

The flagship showroom in Shanghai has

U.S. Greenearned LEED Gold certification.

Building Council

UDS and KOKUYOFurniture

Hotel KANRA TOKYO received “Certificate of
Excellence”

Trip Advisor

May 2013

KOKUYO Furniture

The flagship showroom in Shanghai won thebest of commercial space design award of the

China Institute ofInterior Design

April 2013

Design Zentrum
Nordrhein
Westfalen

April 2013

ACTUS

KOKUYO FurnitureGolden Bund Award.

KOKUYO S&T

KOKUYOKOKUYO S&T

KOKUYO's portable pouch and pen board of“SPREAD” series which are sold under
KOKUYO's original “trystram” brand, received
design awards in Germany's “Red Dot Design
Prize: Product Design 2013”
KOKUYO received the DIVERSITY

Nordrhein
Westfalen

August 2013

July 2013

June 2013

Ministry of

MANAGEMENT SELECTION 100

Economy, Tradeand Industry

KOKUYO S&T received the “GOLD BRANDS”

Gold Brands
Councilaward in the Philippines

September
2013

March 2013

March 2013

Philippines137

KOKUYO Group CSR Repor t 2014

Published by

KOKUYO Co.,Ltd.
CSR and Environmental management, Corporate Administrations
6-1-1 Oimazato-minami, Higashinari-ku, Osaka 537-8686, Japan

Direct inquiries to

KOKUYO Co., Ltd. Customer Center
Tel: +81-120-201-594

INSPINE

AIRFORT

Scirocco

Gufo