social & environmental report 2008 · 7 kenwood social & environmental report 2008...

1Kenwood

Social & Environmental Report 2008

2008Social & Environmental Report

2Kenwood


About this report

Kenwood started environmental conservation activities in 1992 and has published this "Environmental Report" since 2000. We changed the name in 2007 to "Social and Environmental Report" to reflect a desire to report on activities that are making Kenwood a more socially conscience company with products and services that make our world a better place to live.

This report was compiled to introduce our stake holders to the business activities of the Kenwood Group from the viewpoint of social responsibility and trust. We've spent considerable time crafting this document, using many pictures and adjusting the styles, sizes, and colors of fonts to make it easier to read and more visually appealing.

● Structure of this report"Corporate Integration Activities", "Social Activities", and "Environmental Activities" are derived from the Kenwood Group's corporate vision and are the pillars of our broad range of activities. Detailed information on our financial status is available in our Annual Report.

CorporateDeveloping a stable and

socially conscience company through corporate

governance and internal controls.

EnvironmentActively working to

preserve the environment and reduce

CO2.

SocietyAdding value to society through products and

services, providing stable employment, developing

employees, and helping out in our communities.

● Special FeatureIntroducing our research that has produced product designs which embrace interaction with music.

● Period covered by this reportApril 2007 through March 2008 2008 is only partially covered in this report.

● Applicable rangeThis report covers the activities of the Kenwood Group around the world.

● Published September 2008 (next publication scheduled for September 2009)

● Reference materialsEnvironmental Reporting Guidelines from the Japanese Ministry of the Environment (2007)2002 GRI Sustainability Reporting Guidelines

Message from the President 3

Business Overview 4

Special Feature

Tokyo Design Week Exhibit 6

Corporate Vision, Guiding Principles 11

Corporate Governance 12

Social Activities

Stakeholders 14

Working with Our Customers 14

Working with Our Employees 24

Working with Our Suppliers 28

Acting Locally 29

Environmental Activities

Environmental Management 32

Making Products Environmentally Friendly 37

Making Our Offices Green 41

History of Environmental Activities 46

Table of Contents

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Message from the President

As part of Kenwood’s corporate vision of “Reaching out to discover, inspire and enhance the enjoyment of life”, we are creating products by putting ourselves in our customer’s shoes.

President and CEO Environment Board Chairperson

At Kenwood, management means CSR At Kenwood, we are striving towards our corporate vision of "Reaching out to discover, inspire and enhance the enjoyment of life" by developing our three core businesses of car electronics, communications (wireless transmitters), and home electronics in the area of "Mobile & Home Multimedia Systems". This vision has guided us since the dawn of FM broadcasting when as TRIO Electronics our corporate philosophy was to contribute to society through FM radio. A fundamental part of our company is contributing to society by making corporate social responsibility (CSR) a part of our business, products, and services. Providing products and services that integrate with and inspire the lives of people around the world is a major goal for Kenwood and is the first step for CSR. Taking this first step requires each of our employees to be intimately familiar with our business and to be aware of world trends and conditions.

Providing high-quality products around the globe There is no question that during this rapid shift to digital technology management must respond globally to support the quality and services demanded of Kenwood products. We are actively pursuing the following points to secure society's trust and further grow as a global corporation. 1) Constantly foster a spirit of craftsmanship and

technological development by continually asking ourselves what products and services would inspire and enhance the enjoyment of life of our customers.

2) Strive to provide a high level of satisfaction to our customers by strengthening our marketing and services.

3) Educate Kenwood employees around the globe about CSR and create a working environment that inspires and gives employees a sense of purpose.

Environmental ActivitiesKenwood has established an environmental vision in its pursuit of creating products with a reduced environmental impact. Our efforts begin with the joint pursuit of "green products" and "environmental conservation" and continue throughout the planning and design stages, to the procurement of parts, production and distribution. At our offices and production facilities around the globe, we are reducing our environmental impact through a zero-emissions policy encompassing waste disposal, saving energy, and reducing the amount of paper used in the office. Kenwood is also actively engaged in environmental activities in cooperation with local communities.

We are working towards the realization of our corporate vision by upholding our social responsibility as a global corporate citizen while keeping in mind that we are a "green corporation", existing in harmony with the environment.

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Business Overview

Research to develop the next breakthrough technology

As the digital network society of the future begins to take shape around us, we are developing the next generation of breakthrough technologies to bolster our three core businesses (car electronics, communications, and home electronics).

• Speaker technology

• DLNA technology

• Next generation traffic information systems for car electronics

• Technology for receiving terrestrial digital and satellite broadcasts

• Audio compression-related technologies

• Mechanisms for optical disk drives (CD/DVD) in cars

• Audio research for reproducing natural sound

• New interfaces for car navigation systems

Development of products that include DLNA

Analysis of highly-efficient speaker magnet circuitry

Company Overview (March 2008)

Mechanisms for optical disk drives (CD/DVD) in cars

Speakers

Digital audio players

Original audio navigation

Car audio

All-in-one navigation and entertainment systems

Audio, Navigation, and Visual Products

Kenwood is bringing to market the best sound quality in home audio, car audio, all-in-one navigation and entertainment systems, and new types of media like digital audio players and USB memory to provide a seamless "audio entertainment" experience that people can enjoy in their homes and cars. Our car OEM (products retailed under other brands) business is quickly expanding as we provide audio, navigation, and optical disk drive mechanisms to automobile manufacturers worldwide.

Major Management Indicators (consolidated) (millions of yen)

Breakdown of consolidated sales by region (Fiscal 2007 results)

Founded December 21, 1946

Capital 11.1 billion yen

Employees 4,483 (consolidated)

Head Office Tokyo (Hachioji)

Factories Hachioji and Yokohama plants

Core business operations

Car electronics businessCommunications businessHome electronics business

March 2004 March 2005 March 2006 March 2007 March 2008 Sales

Operating profits

Net profits

178,731

12,610

7,318

181,112

7,061

4,836

183,616

8,686

6,104

169,194

5,617

1,586

165,262

6,259

3,181

Asia 13%

Europe 22%

Japan 35%

Americas 30%

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Since the successful introduction of our FM tuner across the globe, Kenwood has unfailingly reacted to lifestyle changes based on the ideal of "High Quality Sound". Our customers have continued to support us as we provide products that integrate into their lives and utilize our superior high frequency technology.

Kenwood Group

PlantsKenwood Yamagata Corporation (Yamagata Plant)

Kenwood Nagano Corporation (Nagano Plant)

Kenwood Devices Corporation

Kenwood Electronics Bretagne S.A. (France Plant)

Kenwood Electronics Technologies (S) Pte. Ltd.

(Singapore Plant)

Kenwood Electronics Technologies (M) Sdn. Bhd.

(Malaysia Plant)

Shanghai Kenwood Electronics Co. Ltd. (Shanghai Plant)

AffiliatesKenwood Core Corporation

Kenwood Kenex Corporation

Kenwood Geobit Corporation

Kenwood Service (Japan) Corporation

Kenwood Design Corporation

Kenwood Admi Corporation

Kenwood Personnel Corporation

Kenwood Engineering Corporation

Sales & Other Offices ●North America

Kenwood U.S.A. Corporation

•California Headquarters

•Communications Sector

Zetron, Inc.

Kenwood Electronics Canada Inc.

●Central America/South America

Kenwood Electronics Latin America S.A.

Kenwood Electronics Brasil Ltda.

●Europe

Holland

Kenwood Electronics Europe B.V.

Belgium

Kenwood Electronics Belgium N.V.

United Kingdom

Kenwood Electronics UK Limited

Zetron, Inc.

Germany

Kenwood Electronics Deutschland GmbH

France

Kenwood Electronics France S.A.

Italy

Kenwood Electronics Italia S.p.A.

Spain

Kenwood Ibérica, S.A.

●Asia/Oceania

Kenwood Electronics Australia Pty. Ltd.

Zetron Australasia Pty Ltd.,

●Singapore

Kenwood Electronics Singapore Pte. Ltd.

●Malaysia

Kenwood Electronics (Malaysia) Sdn. Bhd.

●Thailand

Kenwood Electronics (Thailand) Co., Ltd.

●China

Hong Kong

Kenwood Electronics (Hong Kong) Ltd.

Shanghai

Kenwood Electronics Trading (Shanghai) Co. Ltd.

Beijing


Beijing Office

Guangzhou


Guangzhou Office

Middle East/Africa

Kenwood Electronics Gulf Fze

Communications Products (Wireless Transmitters)

Kenwood leads the market for wireless transmitter, high customer satisfaction and brand loyalty. We have broadened the wireless transmitter business, providing analog business transmitters, amateur radios, and short range transmitters that you see around you everyday. We are actively developing cutting-edge digital business radio systems that incorporate our proprietary Kenwood digital technology honed through our long experience with high frequency technology. We also provide high-performance digital radios for the famous Vodafone McLaren Mercedes F1 racing team. Our radios provide reliable and stable communications under the extreme conditions of F1 racing and significantly contribute to this winning team.

Digital radios for the McLaren team

Special low-power radios

DEMITOSSSatellite marine telecommunications equipment

Amateur radios Radios for police and fire departments in the U.S.A.

Next generation digital radio systems

NEXEDGE

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Rapid technological development and changes in our social environment are causing significant changes in the relationship between people, music, and lifestyle in today's society. The Kenwood design division designs products that create a comfortable living space at the intersection of life and music. These products provide people with inspiration and excitement as only Kenwood can. Creating a comfortable music space in places where people gather - with this as our goal, we participated in the Tokyo Design Week to offer people something entirely new.

Special Feature

Offering product designs that embrace interaction with music - Tokyo Design Week Exhibit -

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"Tokyo Design Week 2007" was held for 5 days from

October 31 to November 4, 2007 and showcased the

latest designer products from over 1000 businesses,

schools, embassies, designers, and shops from

around the world. At our Kenwood Square Marunouchi

showroom, we gave everyone a look at our HIBACHI and

Parasweet products. These products are professional-

grade wireless speaker systems that embody Kenwood's

ideal of creating a new living environment.

Catching the World’s Imagination “Tokyo Design Week”

Communicating with Society through Design Events

HIBAC

HIHIBACHI is a wireless speaker system that produces a

time for relaxing and enjoying friends and family by creating

"a place where people gather around the music". The

Japanese hibachi embodies the image of a place where

friends and family can come together and be surrounded

by warmth and relaxation. Kenwood’s HIBACHI reminds

us of a time when people did not enjoy music alone and

instead knew the importance of listening to music while

talking with friends and family. Kenwood has provided a

product that creates a new space for living, combining

wireless technology and traditional Japanese culture.

Special Feature

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Parasweet overflows with a sense of the interior, imagining

the speaker as a flower and the cable as its stem.

The system was grown from the desire to “wrap our

homes in music”. Kenwood took the unusual step of

making the cable an important element in this design to

The event was very important for hinting at the trends design will take in the future because it provided a space for communication between commercial enterprises,

Connecting with customers and design students

The event was an opportunity for Kenwood design staff to

get feedback about our products for future improvements.

Also, a number of design students came to Tokyo Design

Week, making it a place where students and professional

designers could have a lively exchange of ideas.

create the image of a long and colorful stem leading up

to a large flower in full bloom. Parasweets can be placed

anywhere, as if decorating a room with flowers, and are

imbued with a sense of comfort creating a new and fun

space for living.

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HIBACHI on display at the Yokohama Art Museum

Since its exhibition and presentation during the Tokyo

Design Week, the HIBACHI has been highly acclaimed by

everyone who has seen it. One of these fans is Laurent

Ghnassia, the guest curator at the Yokohama Museum

of Art. At his urging, the HIBACHI was exhibited as

part of the LAND x YMA ART PROJECT, an exhibit for

experiencing artwork.

The project started with

the idea of "creating a city

through art and culture"

and seeks to foster mutual communication between the

Yokohama Museum of Art, citizens, and businesses by

promoting various types of fine art through the museum’s

"Look", "Create",

and "Learn"

activities. It is

sponsored by the

LAND real estate

company,

A number of food designs individually and painstakingly created for the pleasure of the guests. The motif was based on the exhibited products, HIBACHI and Parasweet.

Participating in corporate collaborations at the Yokohama Museum of Art

The first phase of this project was exhibited as a collection

from April 5 to July 13, 2008 at the Yokohama Museum

of Art in collaboration with the furniture maker CONDE

HOUSE from Asahikawa in Hokkaido. The HIBACHI played

the role of creating a comfortable music environment while

attracting the interest of visitors as a product integrated into

an exhibit based upon the concept of harmony or "wa" and

born of Ghnassia’s long experience in Japan.

Kenwood is committed to supporting and cooperating

with collaborative design activities at art museums just

like this.

Special Feature

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Joint development with our technology division

The design division set the direction of concepts and

designs and then reviewed the internal structure with the

engineers in the speaker division.

To create a new music style imbued with our concepts

while preserving high-quality sound, we worked closely

with our technology division throughout the project.

Designs were updated based upon the advice of our

engineers to successfully create a prototype true to our

conceptions.

Conceiving the HIBACHI and the Parasweet

Joint development with outside designers

In addition to the creation of a prototype, we put a great

deal of thought into running the event and promoting

communication with the visitors. Towards this end, we

challenged ourselves to surpass the limits of conventional

designs by consulting with designers from outside the

company. We collaborated with artists and designers who

were active worldwide to ensure that the image created by

the party and the entire showroom matched our concepts.

Special Feature

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● Corporate Vision

Reaching out to discover, inspire and enhance the enjoyment of life.

● Guiding Principles

Cultivate original thinking and execute with pride, passion and precision.

● Core Values

A Step AheadTo drive dynamic evolution through progressive thinking and a willingness to embrace change.

The Right Fit To create products and services that have an intuitive appeal because they fit customer needs and lifestyles.

Fresh ExperienceTo foster the spirit of discovery and refreshing surprise at work and in daily life.

Quality and PerformanceTo insist upon uncompromising quality and performance in our products, our people and our business practices.

Confidence and TrustTo build confidence in the brand and lasting goodwill through relationships based on trust.

Corporate Vision

The employees of the Kenwood Group all share the Kenwood Corporate Vision. Our employees are proud that Kenwood is a company that does business based on five core values. Kenwood is a company that works harmoniously with the communities that surround it.

Kenwood employees keep cards describing our corporate vision, guiding principles and core values close to their hearts throughout the day.

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Corporate Governance

Kenwood management believes that increasing the efficiency and transparency of

decision making through enhanced corporate governance is crucial to improving

corporate value. To achieve this, we are striving to strengthen and fully implement

corporate governance by implementing a group-wide internal control system. The

checks in this system are improved by separating management and executive

functions, employing outside directors and corporate auditors, and establishing an

Internal Auditing Division.

Corporate Governance System

Board of DirectorsAs a body that makes fundamental and strategic decisions, they are responsible for supervising the executives. They deliberate and vote on the basic policy of management and other important matters, and supervise the state of corporate affairs. Since 2000, terms of service have been set at one year. Currently three of the eight directors are from outside the company.

Executive Officer SystemIn 2002 we laid out a new system of governance, the basis of which was introducing an executive officer system to clarify the separation between the directors and the executives. The executive officer committee meets every week to quickly make decisions on management problems. There are currently ten executive officers, four of whom are also on the board of directors.

AuditorsThe auditors are present at meetings of the board and they supervise the directors based upon their understanding of the state of the entire Kenwood Group and corporate affairs. Auditors facilitate supervision of the Kenwood Group as a whole, auditing business, accounting, and internal controls as necessary. Currently, there are 3 external auditors and 5 internal operators fulfilling these responsibilities.

Status of the Internal Control System

The following system has been established to ensure that Kenwood's business practices are appropriate.

System to Ensure Lawful Execution of Duties Establishment of "Basis for Decision Making Authority" We established regulations to clarify who within the company has the responsibility to make decisions. We are working towards a complete system that ensures the execution of duties by employees throughout the Kenwood Group is quick and appropriate.

Establishment of a Compliance Committee This committee was created at the top of the corporate division to draft policies for group compliance and education, and respond to inquiries by the CEO.

Establishment of Kenwood Compliance GuidelinesIn 2003, guidelines were established for all employees of the Kenwood Group. Kenwood is continually making efforts to familiarize all employees with these guidelines. The guidelines have been distributed to all employees and they are required to sign a statement indicating their intent to follow the compliance guidelines. In addition to constant monitoring, we have implemented compliance education using e-learning and other methods.

Ch. 1 As a Member of Society

Ch. 2 For Investors

Ch. 3 Dealing with Competitors and Suppliers

Ch. 4 Regarding Customers

Ch. 5 As a Member of Our Company

Ch. 6 As an International Citizen

Ch. 7 Protecting the Environment

Ch. 8 As an Employee

Ch. 9 Aims and Application of the Guidelines, Hot Line

●Kenwood Compliance Guidelines

13Kenwood


to the board of directors. Its policies and directives are set out in our "Regulations on the Management of Affiliated Companies" and our "Basis for Decision Making Rights".

Establishing a "Hot Line"Our "Hot Line" (corporate reporting system) was set up for people to contact the Internal Auditing Division. This system is meant to prevent the violation of laws and company policies by providing employees access to the advice of corporate lawyers and other outside advisors. It also provides whistle-blowers with anonymity.

Timely and Appropriate Release of InformationEstablishment of an "Information Disclosure Council" Kenwood has declared its stance on the timely and appropriate disclosure of information. To facilitate this, Kenwood has set out policy in its "Regulations on the Timely and Appropriate Release of Information" and distributes it to the entire group. Also, audits are performed by the auditors and the Internal Auditing Division through the establishment of the Information Disclosure Council.

Risk Management Activities Responding to RiskThe Kenwood Group is predicting risks, preventing accidents, and quickly responding to emergency situations through the establishment of a "Risk Management Policy", a "Disaster Response Plan", and an "Insider Information Management Policy". We also established a risk management headquarters to facilitate swift and appropriate responses during crises.

Environmental Management System In order to enhance our environmental measures and the environmental risks inherent in the production and sale of products, we have implemented policies for each division as decided by our Green Product Promotion Conference and the Environment Protection Promotion Conference under the auspices of the Kenwood Environment Board.

Maintenance of Internal Audits and Establishment of a Hot Line Establishment of an Internal Auditing DivisionKenwood has established an Internal Auditing Division that audits all aspects of the Kenwood Group and reports directly

●Corporate Governance Framework

Overview of Year's Progress Toward Complete Corporate GovernanceIn 2006, Kenwood organized a project spanning the entire Kenwood Group to comply with the internal control reporting system prescribed by the Financial Instruments and Exchange Law. These efforts to secure effective operation and maintenance of internal controls related to financial reporting continue even today.

Shareholders meeting

Board of Directors (8 members, 3 from

outside the company)

Board of Corporate Auditors (5 members, 3 from

outside the company) Accounting Auditor

Internal Auditing Division Executive Officer Committee

Each division

Compliance Committee

Chairman of the Board

President and CEO

Information Disclosure Council

Kenwood Environment Board

Company-wide PL CouncilCompanies in the Kenwood Group

Selection/dismissal

Selection/dismissal

Oversight and direction

Appointment and removal Appointment and removalAppointment and removal

Report

Report

ReportAudit

Audit

ExecutionInternal Audit

Financial Audit Invitation

Duty and diligence towards good management

Audit

Report

14Kenwood


● Quality

All of our employees are working to improve the quality

of our products, instilling the idea of insisting upon

uncompromising quality and performance in our products,

our people and our business practices" as a core value.

● Developing activities based upon clear objectives as set

down in the midterm plan for quality reforms.

● Striving to design quality into every product through

quality reviews by management at the planning,

development, and design stages.

● Linking the business and production facilities to promote

on-going activities that seek to improve quality.

● Putting the customer at the end of every stage of

production to ensure quality products.

Social Activities

The Kenwood Group is communicating with stakeholders to maintain high customer

satisfaction and provide products and services as responsible members of society.

Stakeholders

Working with Our Customers

Giving our customers peace of mind

Stemming from our corporate vision of, "Reaching out

to discover, inspire and enhance the enjoyment of life",

we at Kenwood are striving to produce products and

services that satisfy our customers by putting ourselves

in their shoes.

Our goal is to continually boost customer satisfaction by

treating customer comments obtained at showrooms,

customer service centers, and service locations as an

important resource.

Quality products and safetyThe Kenwood Group is going the extra mile to improve the

quality of products throughout their entire lifecycle, from

planning and development, to production, shipping, sales,

use and disposal, all to provide products that people will

love and can use worry-free for many years.

Kenw

oo

d G

roup

CustomerAt the core of the products and services we provide is our company vision, “Reaching out to discover, inspire and enhance the enjoyment of life”. Towards this end, we are reflecting the unique ideas and comments of our customers through market research, showrooms, and customer support centers.

Stock holders, financiers

We are working to secure appropriate profits and provide a return on investment by building our business. We are publicly reporting company information in a timely manner through shareholder meetings, annual reports, and our home page.

EmployeesKenwood is working to increase the satisfaction of every employee by creating an open corporate culture and a stable work environment where employees are excited to work.

Business partners

We are developing a procurement system that facilitates fair and impartial business deals which are mutually beneficial to all parties while adhering to green procurement guidelines.

National and local government

Delivering products in accordance with all regional laws.

Consortiums Helping to develop new technical standards through active participation in industry groups.

UniversitiesCollaborating with universities to educate the next generation through our Industry and Academic Research program.

Local communities

Actively contributing to society to help make our company more a part of local communities.

15Kenwood


Reflected in products and

services

Customer feed-back

Requests, comments,

consultations, complaints

Customers

Planning, development,

quality, service

Showrooms, after-service,

customer support centers

● Safety

At Kenwood, we believe that providing safe products

that customers can use worry-free is our most important

responsibility and we are working daily toward that end.

We have established a Product Liability Committee with

the CEO as its chair. On the rare chance that there is

a problem with one of our products, a plan is quickly

developed to recall the product and take measures to

prevent further risk.

● Educating Employees

Looking to improve our employees' skills and enhance

their awareness of quality, Kenwood holds educational

activities, such as a "Lecture on Reliability" for our

engineers and the Kenwood Group Quality Awareness

Month held every November.

Customer support and after service

● Customer support center

Kenwood's Customer Support Center was created to

build trust, satisfaction, and give peace of mind to our

customers through pre-purchase consultations and

product support.

Kenwood has established a feed-back system, where

customer comments, requests, and complaints, are

quickly sent to the appropriate division and then put to use

improving product quality and business operations.

● After service

Kenwood's service division provides training on checking

soldering, service technologies, and responding to

customers. This lets our employees provide quick and

precise service to increase customer satisfaction, trust,

and peace of mind. Also, the large amounts of service

information in the market is quickly circulated within the

company to improve the quality of products.

Kenwood is actively working to save the environment

based upon our corporate environmental guidelines. Our

business is environmentally conscious and conforms to

ISO 14001. We instituted the use of lead-free solder in

early efforts to protect the environment.

For our older and physically challenged customers, we

provide home service to help people move, setup, and

connect our products.

Customer support center Customer service representative explains the nature of the malfunction to the customer.

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Connecting with customers

In August 2007, Kenwood reopened its newly renovated

Kenwood Square Marunouchi as a place where

stakeholders can interact with our innovative products

and services through various events in a bright and

open environment.

Activities at Kenwood Square Marunouchi

(1) Music and friends

Visitors enjoyed live entertainment from music producer

Yukio Iwata and folk singer Mariko Aoki. The event

featured Aoki's

vocals and

guitar playing

with high-quality

Kenwood audio

equipment over a

variety of genres,

from pop, to rock

and folk.

(2) The Sound Meister Lecture

This event featured analysis and explanations of sound

from Kenwood's own sound meister.

(3) Promenade Concert

With a history of over 35 years, this concert provides an

avenue for people to experience the sound of Kenwood

audio during the noon-time hour at Marunouchi. Although

there is no lecture, adults can enjoy a selection of songs

tailored to create a relaxing lunch-time atmosphere.

(4) Twilight Live

People can enjoy live

music by popular

artists, centering

on classical, jazz,

pop, and world

music. This live

event provides

a comfortable

environment for

artists and the

audience to coalesce.

(5) Jazz Collectors Club

This event has been held over 400 times for jazz music

fans who are members of the club. People from the music

industry and jazz connoisseurs meet here to exchange

commentary on selections.

Participating in Events Around the Globe

Kenwood has exhibited at the 2007 Tokyo Motor Show, CES 2008, and a variety of other events worldwide, talking with

customers and introducing them to the fabulous products Kenwood has to offer.

Mariko Aoki singing and playing her guitar

Live performance at Twilight Live

Visit Kenwood’s home page to see the current schedule of events.

CEATECJAPAN

AutoRAI

ParisTuningShow

MoscowInternationalMotor Park Beijing

MotorShow

APCOShow

Tokyo Motor Show HAM Fair

IFA

Car & Sound,SINSHEIM

SEMA

CESIWCE

17Kenwood


Providing enticing products through our core business

Kenwood has received numerous awards around the

globe for developing superb products. We will continue

to create enticing and superior products to further

enhance customer satisfaction.

High praise from Germany's premier car audio

magazines

Articles from the German car magazines auto hifi and CAR

& HIFI evaluating the sound quality and performance for

different price ranges have a major

influence on customer purchases.

In January 2008, auto hifi gave

our car audio digital power amp

KAC-PS4D its highest praise,

the "editor's choice", and

certified it as an "Absolute Top

Choice (Spitzenklasse)". Among

systems 1000 Euros or less, the

KAC-PS4D received high praise

for its sound quality and DSP

operability, and its overall rating

was the highest of any Japanese

manufacturer.

Among mid-priced CD

receivers, the KDC-W4537UA

and KDC-W4037 received the

highest overall ranking from CAR

& HIFI and the May/June edition

of auto hifi.

CarPortal, which allows integration with existing

car stereos, receives awards at CES and the

SEMA SHOW

CarPortal is a product highly popular in Europe and

the U.S. designed to work with your existing car stereo

system to add external devices such as an iPod, car

navigation, international satellite

radio, and amplifiers. For its high-

level of expandability, it received

the CES Innovation Award at

the International Consumer

Electronics Show (CES), and

the Popular Mechanics Editor's

Choice Award at the Specialty

Equipment Market Association

Show (SEMA).

We are extremely pleased to have received these awards

at these annual shows that are popular with both dealers

and customers. It

encourages us to

continue providing

products with a high

level of customer

satisfaction.

German audio magazines CAR & HIFI (above) and auto hifi (below)

Senior Vice President Keith Lehmann (center left) and Product Manager Rick Noetzli (center right) receiving the Popular Mechanics Editor's Choice Award

Use CarPortal to add a variety of external devices to your existing car stereo system

Articles from CAR & HIFI ranking Kenwood top

auto hifi declares Kenwood the winner

KAC-PS4DWinner of the Absolute Top Choice award from auto hifi

18Kenwood


Home audio amplifier earns the bronze medal at Japan's "2008 Audio Excellence Awards".

Kenwood's Sound Meister-edition K1000 series pre-main amplifier, the R-K1000-N, went on sale in November of 2007 and received the bronze medal at the 2008 Audio Excellence Awards sponsored by Ongen Publishing's Audio Accessories Quarterly magazine. It also received a special award for Best Music Tool for combined use with the Sound Meister-edition K-series CD receiver R-K711-N, released in October, and the LS-K711 speaker system. After receiving the bronze medal for the R-K1000-N in an open competition with high-end models from around the world, we are even more committed to consistently producing and selling these types of products.

Providing high-quality sound technology to miuro, a robot that moves to and plays music from a location of your choice

The miuro from ZMP Inc., is a network audio robot that can play net radio and music stored on a PC or portable music player such as an iPod. The miuro is built around the advanced high-quality speaker system jointly developed with Kenwood, and the advanced autonomous motion robot technology that includes a high-speed sensor and a gyro that allow the miuro to sense the beat and dance to the music. This new listening style of enjoying music while moving garnered high praise and won the miuro the 12th annual Technological Innovation Award from the Robotics Society of Japan.

All-in-one navigation and entertainment systems providing a high level of satisfaction in foreign markets

There is an increasing demand for the Japanese-style all-in-one navigation and entertainment systems in foreign markets where the navigation system monitors often block the driver's view. In 2006, Kenwood began selling its car AV systems integrated with Garmin's* navigation systems in the U.S. and European markets. In 2007, we moved towards an all-in-one navigation and entertainment system and quickly expanded our sales area from the U.S. and Europe to include Asia, the Middle East, Oceania, and South America. We concluded an exclusive sales agreement for the commercial market with Garmin in 2007, with plans to strengthen our collaborative efforts and gradually introduce products into the world market. As a result, the superior operability and the unique functions incorporated into our products have earned a high level of satisfaction and support from our customers.

DVD component

Navigation component

Audio component

All-in-one navigation and entertainment systemsKenwood's Sound Meister Mr. Hayakawa receives the Technical Innovation Award for providing the high-quality sound technology for the miuro

The R-K1000-N pre-main amplifier (above) and the DP-K-1000-N CD player (below)

*Garmin Ltd. Garmin is a U.S.-based navigation system manufacturer that maintains a vast database of maps for foreign markets, holds the largest share of portable navigation systems, and is experienced with business navigation systems.

19Kenwood


Singapore plant receives the MAXA 2007

Innovation Award at MAXA 2007

On November 12, 2007, the Singapore Plant received an

Innovation Award at MAXA 2007, an award for excellence

in manufacturing sponsored by the government of

Singapore. This award is managed by the Economic

Development Board, a governmental group, and business

consultants who evaluate companies on "innovation in

manufacturing", "excellence in management systems",

and "sustainability". Companies are not only evaluated

on the low rate of defects and market share, they

are also evaluated on their management techniques,

their streamlined corporate structure, their low rate

of employee attrition, their benefits program and their

employee evaluation system. It is also a recognition of

a corporation's continual drive for improvement and the

unified vision of the company and the employees.

Receiving this award has caused us to redouble our efforts

to produce products that customers enjoy.

Kenwood ec direct - Providing incredible and

original products

Kenwood ec direct is more than just an Internet shopping

site that allows customers to order a product directly

from Kenwood and have it delivered. Customers can also

order products available only online and participate in the

"Monitor Campaign" where answering surveys about new

products leads to special discounts. Customers benefit

because optional or even hard-to-find products are sent

directly from our warehouse for quick delivery.

We hope that this will continue to be a gateway for

customers to directly interact with Kenwood.

http://www.ec-kenwood.com/

Senior Executive Manager Aigami (left) of the Communications Division receiving

The K-series Silver Limited model only from ec direct. Only 50 were available.

The Monitor Campaign from Kenwood ec direct

Presentation to the MAXA judges

20Kenwood


Next-generation product development

Kenwood is developing the latest cutting-edge technologies to bring unique products to the marketplace.

Exhibited Smartway 2007, a prototype that supports next-generation ITS services, at the Tokyo Motor Show and the World Congress on ITS

This system provides new services such as information to support safe driving, paying of parking fees, and Internet access. The system utilizes new wireless technologies and is based on existing services such as VICS and ETC. Kenwood has developed this cutting-edge system to make driving safer and more enjoyable.

● Smartway 2007 From October 14 through the 17, 2007, we presented the results of this jointly developed project with the Ministry of Land, Infrastructure, and Transport at the Tokyo International Forum. Participants were able to take a test drive on parts of the Tokyo Metropolitan Expressway and test parking at the Marunouchi Kajibashi parking area. This next-generation ITS service uses Dedicated Short Range Communication (DSRC) in the 5.8 GHz range, an upgraded ETC standard, to transmit road information. It also pays parking fees with an IC credit card and provides information about road-side facilities and other points of interest. Testing of the service is scheduled to start in mid-2008 between Tokyo, Osaka, and Nagoya and then across Japan in 2009. There are also plans for a host of new services for this system.

● Tokyo Motor Show The success of Smartway 2007 was on display at the 40th Tokyo Motor Show. Many of the participants experienced first hand Kenwood's prototype and new information service.

● World Congress on ITS Smartway 2007 was at the forefront during the World Congress on ITS in Beijing. ITS members from around the globe, including academics, ITS-related ministries, and businesses were in attendance and participated in lively discussions, presentations, and exhibits. Kenwood exhibited its system for supporting safe driving with voice guidance in Japanese, English, German, French, Chinese, and Korean at the Ministry of Land, Infrastructure, and Transportation's booth.

Prototype ITS car product

Example of information provided to support merging into traffic Ministry of Land, Infrastructure, and Transportation's booth at the World Congress on ITS in Beijing

40th Tokyo Motor Show 2007

Detects merging traffic

Roadside device

Provides information about merging cars Return

Sound and images

Expressway information

Caution, merging from the left

Car sensor

5.8 GHz DSRC

Caution, merging from the left

21Kenwood


Synchronizing paper maps and navigation - Development of SMART INTERFACE

This is an entirely new interface technology that allows the driver to make course decisions by tracing desired routes and specifying destinations with a digital pen on a paper map. A prototype was on display at the 40th Tokyo Motor Show in 2007.

Prototype on display at the 40th Tokyo Motor Show 2007

DLNA network amplifier

DLNA network car audio

*DLNA (Digital Living Network Alliance)DLNA is a group of leading companies in consumer electronics, computing, and mobile devices that are working together to advance standardization to achieve interoperability and connectivity in the digital age.

DLNA network cradle for a digital audio player

guidelines and is just one way that we are creating a more convenient space for living. Kenwood is committed to developing new products that integrate into everyday life using new technologies from our three core businesses.

Introducing products that provide a seamless digital world of entertainment

All around us, products that include DLNA*, a technology for freely sharing content over a network among digital home electronics, mobile devices, and PCs from different manufacturers, are steadily increasing. The DLNA logo, shown to the right, can be seen on products and in catalogs, indicating DLNA compatibility. Kenwood has been a promoter of DLNA since its inception in 2004, actively working to develop guidelines, testing, and certification programs. We demonstrated our "seamless entertainment world" by sharing digital content over a home network using our NMD-000 small data communication module in our showrooms across the globe. The unit is compliant with the 2007 DLNA

NMD-000 small data communication module incorporating the 2007 DLNA guidelines

Prototype equipped with the NMD-000 exhibited at CEATEC 2007

22Kenwood


Well-known business radios with high

reliability used around the globe

There are many people working to maintain the safe living

environment we take for granted everyday. Police, fire, and

emergency services are ready to respond 24-hours a day

and they choose business radios over regular cell phones.

Benefits of Business Radios (1) Communication with the press of single button. There

is no need to wait for the other person to answer as

with a cell phone.

(2) While cell phones are limited to one-to-one

communication, the zone programming option on

business radios allows calling of groups or all parties.

(3) A direct mode of communication, rather than through a

base station, guarantees reliable communication in an

emergency.

(4) The heavy-duty design gives them strong impact-

resistance against drops on even the hardest surfaces.

(5) Explosion proof business radios are available for use at

chemical and oil plants.

(6) Water resistant business radios are available for fire

fighting and use in other severe environments.

Because Kenwood business radios provide analog

and digital communication under harsh environmental

conditions, they are used around the globe to support

activities guaranteeing the safety of assets and human life.

Moreover, the famed high reliability of our radios has lead to their

use by first responders, fire, at malls, events, hotels, schools,

factories and for shipping. This is yet another way that we are

contributing to a multitude of social and business activities.

Developing total system large-scale wireless solutionsZetron, a company in the Kenwood Group, is well

regarded in the areas of wireless network systems and

wireless command and control systems used by airlines

and government agencies around the globe. It provides

business radios with the high reliability and fault tolerance*

for communications pathways demanded by the market.

As the business radio market moves from analog to

digital, Kenwood is at the forefront, providing total wireless

system solutions that integrate Zetron's command and

control systems, and network systems.

Next generation digital radio system "NEXEDGE" Kenwood is developing a wireless system utilizing

the latest digital business radio formats and terminals

optimized for the business and industrial markets. The

NEXEDGE series digital business radios, introduced in

2007, is an extremely popular next-generation system

in this market. The series combines the advantages of

transmission scrambling and low-noise communication

that only digital wireless can provide

with a simple and low-

cost method of

migrating from

existing analog

systems.

Controller Base station and console

Wireless systems

Zetron Kenwood

*Fault tolerance: Establishing a backup system to respond to major device malfunctions using 2 to 3 redundant wired communication circuits.

23Kenwood


Amateur radios are loved even in spaceYou can find Kenwood amateur radios even on the

International Space Station. To be used on the space

station, products must pass a number of strict tests.

Kenwood radios were selected because of their high

reliability, multitude of functions and superior operability.

Amateur radios are recognized as a way to facilitate

communication to help maintain the mental stability of

astronauts working in such a unique environment and to

stimulate education about both radios and space.

TM-D700E

Digital communications support famed F1 team In the world of Formula One where g-forces and vibrations

are extreme while racing at speeds in excess of 300 km/h,

maintaining

stable

communication

is difficult and

radio makers

who can meet

this challenge

are few.

Kenwood has

long been the official supplier for

the famous Vodafone McLaren

Mercedes team, contributing to

this winning team by developing

and supplying a digital radio

system for their exclusive use

under these extreme conditions.

Emergency broadcast systems for schools Kenwood has developed an emergency broadcast system

for schools that acts as a safety net providing safe learning

environments for our children. It was introduced in the

"Collection of Initiatives for School Safety Management"

published by the Ministry of Education and has been

employed in many schools around Japan. In the event of an

emergency, evacuation instructions can be broadcast to every

room. It facilitates communication on a daily basis between

the pool, the gym, the school yard, and the teacher's room

and can be used

on a wide variety

of other occasions

such as school

sports and culture

festivals, and even

on off-campus

excursions.

Astronaut using the TM-D700E on the International Space Station

Working to protect our customers from inferior imitations In September and October 2007, Kenwood won three favorable decisions from the Beijing First Intermediate People's Court in China for trademark infringement and violation of the Act Against Unfair Competition, Copyright Infringement, and Design Patent Infringement. The companies were ordered to pay damages totaling 4.3 million yuan (approx. 66.65 million yen). Counterfeit products have a significant negative impact on the level of satisfaction of customers who have purchased the real product. Kenwood has taken a harsh stance towards counterfeiters, working through litigation to expose them. We are increasing these efforts and expanding them globally by actively pursuing administrative measures, litigation, and trade regulations to prevent infringement on our intellectual property rights and protect our customers from mistakenly purchasing inferior copies.

KenwoodTK-2118/3118

Examples of typical counterfeit products

Counterfeit model Kenwei KW-5118

Australian students talk with the International Space Station

New wireless headset provided to the Vodafone McLaren Mercedes team in 2008

24Kenwood


educating employees

Evaluation and HR systems that recognize initiative and foster success

Kenwood's personnel evaluation system seeks to develop, train, and employ people who can think and act on their own to resolve problems. Kenwood motivates its employees in a number of ways. During annual evaluations, employees can apply to work in the department or location of their choice based on their career plans. In addition to this Self-recruiting Application System and the company's Internal Recruiting System to find employees to fill company-wide openings, Kenwood instituted the Free Agent (FA) System in 2007 to allow employees to move to the department of their choice. In these ways, we aim to provide an environment where each employee can become a self-motivated professional who can act autonomously with confidence. By highly evaluating the employee's subsequent contributions, the person's skills and actions will in turn contribute to the company's business. At the same time, the individual employee will gain a sense of accomplishment and become even more motivated which contributes to their personal growth. These two cycles of growth and achievement contribute to the vitality of the employee and the organization.

Employees enjoying the lunch party after the awards ceremony in December 2007.

Awards ceremony U.S. sales company president Mr. Eguchi presents a certificate of appreciation and a reward

Outline of the FA System (introduced in September 2007)

Working with Our Employees

Kenwood strives to enable each employee to attain their full potential by incorporating various programs and building an excellent work environment. We want them to grow as individuals to work as a team in an energized workplace.

Kaizen

Vigorous kaizen activities at the US office

Although these activities are familiar to Japanese companies, employees at the U.S. sales company in Long Beach, California participated in business improvement activities with a special flare. The Kaizen committee selects the best suggestions from all employee submissions and presents the winners with a monetary prize. At the awards ceremony, all employees gathered together for a simple yet sociable lunch party. As a result, these activities help foster communication among departments and paved the way for an active and smooth exchange of suggestions for improvement.

Respecting and

Monthly Kaizen Newsletter published by the Kaizen Committee

RequirementsEmployees with over 5 years at the company and over three years in the same department

Application period

FA declarations every August and September (Directly apply to the personnel department)

Date changes effective

Every October

Fiscal 200711 of the 22 employees who applied passed and changed jobs

25Kenwood


● Horizontal-based training: Hierarchy-based training Hierarchy-based training has groupings for new employees, mid-level employees (basic course), mid-level employees, leaders, company directors, and top executives. The training aims to instill the Kenwood way of thinking and mental attitude within the group. It conducts "Basic Ability Development Training" to develop and expand the basic abilities required by that group. Also, "Practical Training" focuses on business skills, compliance, and essential knowledge and skills for daily work. The planned "Career Development Seminar" will help formulate the employee's career plan and life plan. A "Life Plan Seminar" is also offered to employees.

Human Resource Development Center Activities

Since its inception in April of 2007, the Human Resource Development Center has been tirelessly working to improve the work environment and atmosphere. In addition to conducting educational training that fosters a free and open company by enhancing a person's inner strength, communication skills and organizational abilities, the Human Resource Development Center also organizes the following activities.

Unique education & training programs foster employees

Kenwood emphasizes employee training because we understand the value of good employees. Kenwood's education and training programs aim to strengthen the employee's ability to handle on-the-job situations. While the employees study on their own, they improve their ability to resolve problems and think independently.To attain this goal, Kenwood's education and training programs are provided according to the employee's company position (vertical-based training) and job responsibility (horizontal-based training). This is a unique system.

Activities of the Human Resource Development Center for 2007 (excluding education)

● Vertical-based training: Family training (training of workplace teams)

Family training has the boss and subordinates at the same workplace staying at the training facility where they cook, clean, etc., together while discussing predetermined work-related topics and finding solutions. The objective is for them to find solutions themselves and learn from each other. During this training period, everyone does the household chores fairly, regardless of job title, whether the employee is the department/section head or a new employee. In the work-related discussions, everyone is free to air his or her own opinions regardless of one's position in the company. Current work-related topics are discussed, and by working together as a team and fostering open communication, they can find solutions and strengthen their workplace teamwork.

Horizontal-based training Career

Age

Vertical-b

ased training

Family training

Family training

Family training

20

30

40

50

60

Employee grown and increased productivity

New employee training

Mid-level employee training (basic course)

Mid-level employee training

Leader training

Company director training

Top executive training

Career Development Seminar

Career Development Seminar

Life Plan Seminar

As part of its continuing mission, the Human Resource Development Center feeds back the problems learned through workplace consultations and hearings to managers to improve the overall company.

Hearings for group employees in Japan

Kenwood carries out workplace surveys and hearings (over 160 times) for all group employees of any department (in all locales) in Japan. Over 860 employees, about 1/3 of the personnel in Japan, have participated.

Workplace Consultation Room

Employees can voice their concerns about the workplace and receive advice by sending them to a special email address.The Human Resource Development Center then works to resolve the problem. In some cases this involves working with the department.

26Kenwood


Balancing work and home

Support for child rearing and nursing care

To cope with changes in the work environment due to fewer children and the aging population, Kenwood has developed a Balanced Work and Life Program. Various programs are provided to support employees who are raising children or caring for a family member (elderly parent, etc.) so they can pursue both work and home life. These programs are available to both male and female employees.

● Renaissance Project In response to the continuing trend for extremely long working hours, especially in the design and development departments, Kenwood's management and the union jointly established the "Renaissance Project" in 2007. The project is designed to reduce overtime work and increase employee use of paid vacation time. As part of the project, Kenwood has strengthened enforcement of rules agreed upon with the union and related to working hours. We have also proactively worked to re-evaluate work processes and use of vacation time by creating a framework for supervisors to be more aware of how often their employees are working late or on their days off. As a result, employees in 2007 worked an average of 33 hours less per month than they did in 2006.

Flexible working hours and vacation time

To enable employees to make good use of their off-hours, flexible working hours and vacation time are provided to support diverse working schedules. The flextime system enables employees to flexibly adjust their working hours to suit their current workload, based on the number of hours in a standard working day. Also, the half-day off system enables employees to attend school activities or run errands at the local city hall. These systems have been in place for 15 years, and are well established amongst employees.

Kenwood's Child Rearing & Nursing Care Support Systems

Comparison of employee overtime for fiscal 2006 and 2007

Re-employment of Senior Workers

To provide more choices for life after retirement and to pass on the senior employee's valuable skills and experience, Kenwood has a re-employment program for senior workers. As long as the person is healthy and motivated, he or she can continue working in the same group after reaching the retirement age of 60.

2006

420

22

24

26

28

30

32

34

36

38

40

-20.0

-15.5

-10.0

-5

0.0

5.0

10.0

15.0

20.0

5 6 7 8 9 10 11 12 1 2 3 (Months)

(Time) (%)

2007 Compared with 2006

Name Explanation

Child care leaveLeave of absence is allowed up to the end of March following the child’s first birthday.

3 people

Shorter work hours during child care

The daily working hours can be shortened by up to 2 hours, in addition to the child-rearing hours set by law up to when the child enters primary school.

2 people

Childbirth leaveA five-day leave is allowed for an employee whose spouse gives birth.

Avg. of 3.3 days

(43 people)

Rehiring of employees who resign due to childbirth or child care

Employees who leave the company due to childbirth or child care can be rehired upon applying.

Unused

Nursing care leave

Up to 1 year of absence is allowed for nursing care.

Unused

Shorter work hours during nursing care

Together with nursing care leave, the daily working hours may be shortened by up to 3 hours per day for up to 1 year.

1 person

Programrecord

(fiscal 2007)

27Kenwood


Safety and health for workers

Kenwood is revising its corporate structure and organizing committees of experts to help preserve the health and safety of is most important asset, its employees.

Maintaining our safety and health system

The Kenwood Group saw an increased expansion of the safety and health system in 2007. We have clarified the roles of and strengthened cooperation between employees and departments that manage safety and health in an effort to

improve the working environment and secure the health and safety of employees.

Maintenance of the safety and health system

Headquarters From left: Ms. Nishino (registered nurse), Dr. Arai (occupation counselor), Dr. Taniguchi (industrial physician), and Ms. Wakamatsu (public health nurse)

Yokohama Office Ms. Osumi (registered nurse)

Featured health supervisor Jun Sakamoto, Administration Dept., Corporate Administration Division, Hachioji Plant

The Safety and Health Committee has been actively re-evaluating the health management system at Kenwood, placing special interest on mental health and metabolic syndrome measures. As for mental health, we've placed emphasis on protecting those people most at risk by working with other departments to attack the problem from multiple angles. I believe that the remodeling of the Health Center and increasing the number of medical personnel has been a significant improvement for the Kenwood employees.

Improvement of the Safety and Health Committee

Clarified the role of the Safety and Health Committee with the advice of experts and proactively expanded its activities.

Expansion of the health management system

Made the health supervisors full-time in order to better recognize everyday health and safety problems.

Access to various counselors

Remodeled the health center and expanded the medical staff to include occupational health specialists, public health nurses, and registered nurses. We have also improved support for problems related to long working hours.

Utilization of outside resources

Added more avenues for employees to get advice on their problems through individual counseling at the Workplace Consultation Room (see the section about the Human Resource Development Center on page 25), the Health Center, and with occupational counselors, resulting in flow more tailored to employee needs.

28Kenwood


Communication with suppliers

Close communication with our suppliers is absolutely necessary to the pursuit of green procurement. As part of our pursuit of environmental preservation in the Kenwood Group, we require all our suppliers to have an environmental management system that meets ISO 14001 standards and be certified. Through our environmental management system and management of pollutants, we are actively working with our partners to help preserve the environment.

Meeting explaining the Green Procurement Guidelines in Japan

Suppliers join an orientation about Kenwood's business policies

Meeting explaining the Green Procurement Guidelines in Malaysia

Working with Our Suppliers

As part of its social responsibility, the Kenwood group continues to improve its environmental management system for the entire supply chain, including its suppliers.

Promotion of green procurement

The Environmental Philosophy of the Kenwood Group states that, "As we aim to expand our business around the world, we will help create a society with sustainable growth while acting responsibly to preserve and improve the Earth's environment." Kenwood believes that preservation of the environment is the most important problem the human race will face in this century and we are working towards realizing a renewable society by pursuing the development of environmentally conscious products. Towards this end, Kenwood is pursuing the procurement of products, parts, and materials with minimal environmental impact, as defined by local law, from environmentally conscious suppliers. This "green procurement" is based on our Green Procurement Guidelines*.

*Our Green Procurement Guidelines specify 16 prohibited substances and 25 controlled substances including those to be eliminated. (The 5th Edition was published May 2008.)

29Kenwood


Entertaining students on off-campus excursions

As a corporate citizen of Hachioji, we are cooperating with the environmental education activities of local schools. In February 2008, the Hachioji Plant was used to educate students from a local junior high school about the environment. The Hachioji Plant also hosted young employees from the Hachioji City offices sent to study private business.

Acting Locally

Aiming to be a good corporate citizen in local areas where we operate, we hold various activities to deepen our relationship with the local communities.

In Japan Kenwood Service receives the bronze prize for safe driving

The Kenwood Group issues drivers licenses based upon company standards to employees at sales and affiliated companies around the nation who drive for work-related purposes as part of our commitment towards safe driving. As a result of its efforts to prevent traffic accidents while on the job, Kenwood Service received the bronze prize for safe driving from the Kanagawa office of the Japan Safe Driving Center. We will continue to make strides toward accident prevention by increasing employee awareness of safe driving.

Management and labor volunteer as part of the Minami Tama District Council's 2008 Asakawa Clean Campaign

The people at Kenwood and their families participated in the Asakawa Clean Campaign run by the Minami Tama District Council of the Japanese Trade Union Confederation (comprising Hachioji, Machida, and Hino Cities) as part of the Kenwood Union's local activities on April 5, 2008. This activity represents the fusion of Kenwood's social responsibility to preserve and beautify the environment as a corporate citizen of Hachioji City.

Kenwood Service President Anzai (center left) and Mr. Miura (center right) from the Business Promotion Department accept the bronze prize for safe driving

Students collect data about waste separation at the plant

Environmental education at the junior high school

Panel discussion on the environment held in Hachioji City (Hachioji Plant Director Takeda is second from the right)

Symposium held in Sakata City (Yamagata Plant President Takami is in the center)

A trash truck running on biofuel from the city also joined in

Clean-up activities with the cherry blossoms in full bloom

Communicating with the community

Kenwood has participated in several activities designed to promote discussion about the current state of the area, and corporate and government interaction on the environment. Yamagata Plant President Takami participated in a symposium entitled "Toward a beautiful ocean in Yamagata" held in Sataka City on November 4, 2007. Then on December 22, Hachioji Plant Director Takeda joined a panel discussion entitled "What we can do to prevent global warming" held in Hachioji City. These events provided a unique opportunity for Kenwood to introduce its environmentally conscious activities to the residents. It also was a venue for Kenwood to raise awareness about the necessity for making changes in our overly convenient lives and the environment.

30Kenwood


Singapore Plant and Sales Company● Helping the community:

Kenwood Community Service Day activities

On May 5th, the Singapore Plant and the Singapore Sales

Company co-hosted the 1st Annual Kenwood Community

Service Day. As part

of these activities,

they cleaned up the

Changi Beach Park on

the eastern seaboard

of Singapore. The

National Environment

Agency gave its

approval to the plans

for our activities. The

220 participants from

both companies

collected plastic,

cigarette butts,

styrofoam, and empty

cans to beautify the Changi Beach Park which stands

out in Singapore for its uncleanliness. We plan to use the

Kenwood Community Service Day Committee as a vehicle

for continued activities that contribute to society.

Malaysia Plant● Organizing and supporting a youth soccer tournament

Employees volunteered as part of the Kenwood Union's

continuing activities to contribute to the community to

support the Johor youth soccer tournament. The event

promoted the mental and physical health of the children

through cooperation between the Johor government's

Youth Sports Division and Kenwood Union staff from

Japan. The

competition

included a team

from the Japanese

school and 14 junior

high school teams

from the state.

Hosting Plant Tours Our Yamagata and Nagano Plants here in Japan host daily

tours for local elementary,

junior, and high school

students. In 2007, 311

students visited the plants,

learning about the product

creation process by

viewing actual production

lines and they learn about

measures Kenwood takes

to prevent global warming

such as waste separation

for zero emissions.

Opening ceremony

Champions, in front, and runners up, in back.

Kenwood Abroad

Shanghai Plant● Volunteer clean-up of roads around the plant

Environmental pollution resulting from rapid industrial

development has become a serious problem in China. In

response, our Shanghai Plant conducts environmental

beautification activities

every three months,

cleaning up around

the plant and in nearby

parks. Around 300

employees participate

every time and through

these types of regular

volunteer activities, Kenwood seeks to be a green

company while enhancing local beauty.

31Kenwood


Canadian Sales Company● Supporting solar car teams from universities.

Kenwood provides support for races and wireless

communications every year for the solar car teams of

the engineering departments at the renowned Queens

and McGill Universities in Canada. Kenwood radios are

used by both teams in races across North America and

are essential to their

success, providing

communication

between the driver and

the support team.

● Provided sponsorship for Paralympics athlete

Fabrizio Macchi.

Kenwood provides continuing

support to Fabrizio Macchi, the

bronze-medal winner in bicycle

racing at the 2006 Athens

Paralympics. This sponsorship

sends a message to our partners,

customers, journalists, employees,

and people everywhere to "believe

in yourself and never give-up on

your dreams".

Netherlands Sales Company● Organized a marathon for city residents

Since 2002, the annual Kenwood Run marathon has

been held to promote local sports. The marathon drew

1500 participants,

an increase of over

200 people from last

year, and was a huge

success thanks to the

help of Kenwood staff.

Italian Sales Company● Main sponsor for the Cinque Mulini (5 mills) cross

country race.

The Cinque Mulini is one of the most prominent cross

country races in the world and is an IAAF World Cross

Country event. Kenwood was

a main sponsor of the February

2008 event and our logo was

featured on the Raisat Sport

satellite broadcast of the event.

U.S. Sales Company

● Support for the NASCAR Penske Racing Team. In the extremely popular world of NASCAR racing,

Kenwood provides support and wireless communications

during races to the famous Penske Racing Team.

NASCAR is supported by over 75 million dedicated fans

and cars #12 and #77 bearing the Kenwood logo race all

over the country.

Netherlands Kenwood Run

Fabrizio Macchi

McGill University

Queens University

Cinque Mulini

First race, February 17, 2008: Daytona 500

32Kenwood


Guiding Principles

The Environmental Action Plan is a guideline for individual

employees to take environmental actions in their jobs.

All employees carry a card reminding them of the

environmental actions they should take.

Environmental Phi losophy True to the Kenwood Group’s corporate vision of “Reaching out to discover, inspire and enhance the enjoyment of life,"

we strive to expand our presence around the world. We are fulfilling our responsibility to the community by working

toward continuous maintenance and improvement of our precious global environment and contributing to sustainable

social development.

View our environmental policy on the web at http://www.kenwood.co.jp/j/eco/activity/index.html

Environmental Activities

All employees carry an Environmental Action Plan card with their ID.

Environmental Action Plan's Nine Categories

In corporate management, the Kenwood Group places top priority on "sustainable economic growth" and "global environmental protection." We are using environmental management to meet our social responsibility as a "green company".

We live in a convenient society with electricity, automobiles, and easy access to whatever we need. However, CO2 emissions are increasing, the Earth is being polluted, and the ecosystem is being destroyed. The global environment is being damaged by the way we live.

Environmental Management

Environmental design Green procurement Pollution prevention

Operation reforms Delivery efficiency Manufacturing efficiency

Compliance with laws Education and enlightenment Contribution to society

33Kenwood


Although Japan agreed in the Kyoto Protocol to reduce

CO2 emissions between 2008 and 2012 to 6% below

their 1990 levels, CO2 emissions increased by 7.7% as of

2005. In order to fulfill its obligations, Japan must reduce

The Kyoto Protocol goes into effect in 2008, making this a critical year. Although each and every person must increase their awareness of the environment around them in order to preserve our comfortable way of life, it seems that there is a lack of understanding about exactly what each of us must do. Contributing to the environment begins with everyday life. For example, we can reduce waste and properly separate our garbage, limit the amount of fuel used in our cars, and reduce the electricity we use everyday. We must, as a corporate citizen, make these goals a reality. Customers are demanding that products have, in addition to Kenwood's superior design and functionality, environmental value. Kenwood is developing environmentally conscious products through implementation of a systemized environmental evaluation that begins at the design stage. We are using materials without toxic substances and designing simple packaging, lightweight, low energy consumption, and easy disassembly into every product. At the office level, we are limiting usage of electricity, minimizing waste, and working to ensure that we do not pollute the air, earth, or water. As the person responsible for environmental measures at Kenwood, I am working to promote reductions in CO2 and environmentally conscious manufacturing.

Tamio Takeda, Kenwood Environmental Management Director

The Kenwood Group Builds Green Products to Help Protect the Global Environment

emissions by 13.7%. The Kenwood Group is contributing

to these efforts by implementing energy-saving measures

at its plants, headquarters, and sales offices.

Energy Usage in the Kenwood Group

1,842 t

SKE

875 t

KETS

5,891 t

KETM

35 t

KEB

1,000

2,000

3,000

02006 2007

Head Office

2006 2007 Yokohama

Office

2006 2007 Nagano

Plant

2006 2007 Yamagata

Plant

(t)

The Kenwood Group CO2 emissions for fiscal 2007 was approximately 14,824 tons (including electricity)

34Kenwood



Green Product CommitteeGreen Products Promotion Conference

Secretariat

Internal Audit

Promotion of green product design

Reduction of Toxic Substances in Products

Dealing with environmentally regulated substances

Green Procurement Committee

Hachioji Head Office Environment Protection Promotion Conference

Yokohama Office Environment Protection Promotion Council

Procurement of environmentally-friendly parts

Environmental Protection Promotion Conference

Environmental council of business divisions

Environmental council of group companies

Environmental council of Japanese factories

Environmental council of overseas factories

Energy conservation and waste reduction at offices and factories

ISO 14001 Certified Facilities

Hachioji, Yokohama offices

Nagano Kenwood (Nagano Plant)

Yamagata Kenwood (Yamagata Plant)

Kenwood Electronics Technologies (M) Sdn. Bhd. (Malaysia Plant)

Kenwood Electronics Technologies (S) Pte. Ltd. (Singapore Plant)

Shanghai Kenwood Electronics Co. Ltd. (Shanghai Plant)

Kenwood Electronics Bretagne S.A. (France Plant)

Certified July 1998

Certified December 1998

Certified December 1999

Certified January 1999

Certified September 1999

Certified August 2001

Certified June 2005

In Japan

Abroad

ISO 14001 certificate


Environmental Promotion Organization

35Kenwood


●Laws in each country

Educating the children We offer factory tours to children as part of our education for non-employees during which we explain Kenwood's environmental activities.

Education for internal auditors and auditing Kenwood’s internal auditors study to acquire the knowledge and abilities to properly execute our management system (ISO 14001). They start by learning the JIS standards (JIS Q 14001:2004) and doing simulated audits. Those who attain a score of 80 or above on the exam are certified to be internal auditors. Currently, we have 127 certified internal auditors. To promote the objectivity and openness of our audits, audits are done by auditors outside the department being audited.

Auditing compliance with environmental laws & regulationsFrom the design stage, the design auditors check to make sure products adhere to the rules of the countries where they are to be sold. They also audit the sales offices yearly to confirm compliance with regulations and make reports to the environmental management director.

Specialist education Specialized education is given to employees who work in fields (legal regulations, measurements, equipment, and environmental design) in which a lack of proper training and skill could adversely affect the environment.

Emergency training Every year we hold training on how to handle various emergencies related to boilers, oil tanks, hazardous materials, and abnormal equipment noise or vibrations. We use the results of the training to revise our equipment operation manuals to help prevent accidents.

Law for Promotion of Effective Utilization of Resources

Containers and Packaging Recycling Law

California's Appliance

Efficiency Regulations

RoHS directive

WEEE directive

ELV directive

Chinese RoHS (Administrative Measures on the Control of Pollution Caused by Electronic Information Products)

Environmental Education and Internal Audits

Every year in accordance with our corporate plan, Kenwood implements audits, general environmental education, special education, education for internal auditors, and training to respond to environmental hazards in emergency situations.

General educationBased on laws for increasing the desire for environmental protection and for conducting environmental education, all Kenwood employees (including new employees, temps, and part-timers) receive environmental education every year. They learn about the importance of the environment, the current condition of the global environment, and how the environment affects our daily lives and the world. We also educate them about implementing improvements through our management system (ISO 14001), and the importance of preserving the global environment.

36Kenwood


Results of fiscal 2007 activities

The results of the Kenwood Group’s environmental activities for fiscal 2007 are summarized in the table below.

Green Product Promotion Activities

Indicates activities for producing products that have a reduced environmental impact.

Environmental Protection Activities

Theses graphs indicate the amount of energy used, office paper consumed, final amount of waste disposed, and the rate of

recycling from 1997 at our four facilities in Japan.

● Car electronics business: Newly-designed lighter models

Weight reduction goal attained

Making products lighter and more energy efficient

Introduction of LCA

Formulation of design standards

Green procurement

Reduction of toxic substances in products

Lower weight of newly-designed models

Activity Kenwood's Environmental Goals for 2007 Fiscal 2007 results Goals for Fiscal 2008

1997 2003 2004 2005 2006 2007

(t)

(Year)

8,962

7,093 7,324 7,1656,447 6,025

0

2000

4000

6000

8000

10000Reductions in CO2 from energy savings (in tons)

1997 2003 2004 2005 2006 2007

(%)

(Year)

41.5

88.497.5 99.7 99.74 99.79

Recycle rate (%) 100

80

60

40

20

01997 2003 2004 2005 2006 2007

(1000s of sheets)

(Year)

17,535

8,6417,522

6,0464,680

3,395

Amount of office paper used (1000s of sheets)

0

5000

10000

15000

20000

01997 2003 2004 2005 2006 2007

5

10

15

20

100

1200(t)

(Year)

1,1441,14481.281.2

17.217.2

2.1 1.5 0.9

Waste material - Final amount processed

Monitoring of toxic substances management by suppliers

● Database management ● Advancement of compliance with

environmental laws in various countries● Maintenance of a self-analysis system

● All models are green

Implement environmental design evaluation method for all product types

Trial of Life Cycle Assessment (LCA) method

● Communications business: Reduction of electricity consumption during reception

standby for newly-designed models

● Home electronics business: Reduction of standby electricity consumption for

newly-designed models Reduction of electricity consumption during operation

Goal attained

Goal attained

Unattained by some models

Goal attained

Goal attained

Standby power current goal attained

Reduction of electricity consumption during standby and operation attained

Monitoring of suppliers

Database management Maintenance of a self-analysis system

Support for all product types

Implement environmental design evaluation method for all product types

Evaluations from each sales office

Reduction of electrical consumption in standby of newly-designed products

Reduction of electrical consumption of newly-designed products during standby and operation

37Kenwood


Making Products Environmentally Friendly

To cut back on CO2 emissions, the Kenwood Group

strives to make car electronics lighter so the car

saves gasoline and to make wireless and home

electronics consume

less power in standby.

Less energy, lighter weight

Car electronics business

Since 2002, we have pursued the production of lighter car

electronics products to help save gas and consume less

resources.

New products

developed in

fiscal 2007 are

lighter than ever.

The KAC-9104D

and KAC-7404 car

audio amplifiers are

24.4% and 35% lighter

than the previous

year's models, and

the DDX512 AV unit

is 35.5% lighter than

similar models.

This lighter weight

helps to save about

68.6 tons of CO2 emissions per year.

We will continue to make new products lighter to help stop

global warming.

Communications business

From fiscal 2003, we started reducing the standby current

consumption of wireless devices.

2007 saw the development of the NEXEDGE (NX-

200/300) digital business radio optimized for use by hotels

and factories in the business and industrial markets. These

radios use 24% less

energy when in standby

than the standard 2002

models.

This reduced CO2

emissions for the year by

119 tons, and significantly

contributed to our efforts

to stop global warming.

We will continue to help

protect the environment.

Home electronics business

In 2007 we pursued development of an improved digital

amplifier that operates on less energy. We separated the

digital and analog circuits and supplied them individually

with electricity to reduce the noise inherent in digital

amplifiers. These efforts were rewarded by high praise for

sound quality from audio magazines.

The switch to digital and the addition of an energy saving

mode (CLEAR A mode) to the R-K1000 has resulted in an

operating energy consumption of only 19.02 W. This is a

54% reduction over the 2006 R-K1 model, and has helped

us to reduce annual CO2 emissions by 58 tons.

These are just some of the ways that Kenwood is working

to develop products that are environmentally friendly.

KAC-9104D

DDX512

2006 model R-K1

NX-200/300

Digital amplifier R-K1000

38Kenwood


Product Recycling

Examining product construction at the design stage Minimizing the number of parts used during construction

makes for easier disassembly later. The following picture

is an example of a CD receiver made for sale outside of

Japan. There are only eight parts: the 2 metallic parts

that make up the

chassis, the CD

mechanism, the

3 panels, and the

2 circuit boards.

Fewer parts also

helps to minimize

the energy costs

associated with

assembly.

●Resin material markings

To make it easier to sort waste materials during product

disposal, resin parts are marked with the material name.

Recycling of packaging and rechargeable batteries in Japan Kenwood has been boosting its recycling of rechargeable

batteries and packaging materials.

Eco mark

Products with this mark indicate that

Kenwood has designed the product

to be environmentally friendly. The

eco mark appears in instruction

manuals and catalogs.

Design Concept

This fresh design depicts a green Earth with a lively plant

and circulating natural resources. The curve below is

Earth, and the plant sprouting on it has twin leaves which

symbolize the circulation of natural resources.

From the product and parts development stage,

Kenwood strives to reduce the number of parts and

screws to make recycling easier.

Product construction

Marking on back of operation panel of Home Stereo R-K711.

PS indicates polystyrene.

(t)

2006 2007 (Year)

Batteries (tons)

0

2

4

6

8

10

8.37.5

(t)

2006 2007

Plastic packaging Paper packaging

(Year)

Packaging (tons)

0

20

40

60

80

100

29 25

59 55

39Kenwood


Chemical Substance Management

Outline of chemical substance management The Kenwood Group monitors toxic substances through

a system of checks at every stage of the manufacturing

process, from the design and development stages through

production.

While complying with the environmental regulations

of each country, the Kenwood Group provides safe

products by restricting the use of substances toxic to

the environment and humans.

Lead-free soldering tank

Reduction of toxic substances in productsOn July 1, 2006, the Restriction of Hazardous Substances

Directive (RoHS) took effect in Europe banning the sale of

products within the EU which contain any of the following

six banned substances: Lead, cadmium, mercury,

chromium (VI), polybrominated biphenyls (PBB), and

polybrominated diphenyl ethers (PBDE).

To comply with the RoHS Directive, the Kenwood Group

formed a Lead-free Solder Promotion Committee to switch

to lead-free solder. Except for products with custom

specifications, almost all products now use lead-free solder.

We also established a chemical substance compliance

evaluation system to ensure that our products comply with

the RoHS Directive.

The Lead Free (LF) logo indicates a printed circuit board

that uses lead-free solder.

Flow of the chemical substance management system

Log chemical composition in the design support system

Evaluation of supplier's green

level

Evaluation of chemical composition

of parts

Acceptance inspection

Product manufacturing

Shipping

Logging in the environmental database

Suppliers (parts

manufacturers)

Design and developm

ent phase Production phase

Confirming the environmental management system of suppliers

Checking the chemical composition of parts

Confirmation of chemical substances in structural parts

Checks when parts are received

Confirmation of product

specifications

Design checks

Shipment checks

Final check before shipment

40Kenwood


Compliance with Chinese RoHS

The Chinese RoHS

(Administrative Measures

on the Control of Pollution

Caused by Electronic

Information Products) took

effect on March 1, 2007,

requiring manufacturers to

indicate whether the product

contains any restricted

substances on both the

product and in the instruction manual.

Internal analysis for non-use of toxic substances

In accordance with the Green Procurement Guidelines,

the Kenwood Group requires its suppliers to certify that

materials and parts do not contain any toxic substances.

Suppliers are required to

submit the Declaration

of Non-use of Banned

Substances and the

Ingredients of Materials.

In addition, all Kenwood

factories in Japan and

overseas have an X-ray fluorescence spectrometer

operated by a certified analysis engineer to inspect and

evaluate materials and parts from suppliers for toxic

substances to ensure compliance.

Car audio name plate

Using an X-ray fluorescence spectrometer to analyze the composition of parts.

41Kenwood


The Kenwood Group is working to reduce to the bare

minimum the amount of energy used in planning,

design, and production.

Green Procurement of Office Supplies

The Kenwood Group's four bases in Japan (Head office, Yokohama office, Nagano Plant, and Yamagata Plant) strive to use more environment-friendly office supplies. Staff in charge of procurement use the office supply purchasing system on the Internet and order products designated as ecologically or environmentally friendly. These include products with the Eco or Green Marks, or those designated as complying with the Law on Promoting Green Purchasing. Also, we started sending reports on the status of green purchasing to the staff in charge of procurement from 2007 to increase our rate of usage. During the period of April 2007 to March 2008, 67.9 percent of office supply purchases by Kenwood's four bases in Japan were environmentally friendly or green products. This was a 5.3% increase from 2006.

Energy resources

Electricity 15.4 million kWh

Heavy oil 71.3 kl

LPG gas 16.2 thousand m3

Public gas 13.4 thousand m3

Waterworks＋ground water

69.7 thousand m3

Water resources

Waste materials Atmospheric emissions

Waste water CO2 emissions

6,025 tons 64.3 thousand m3

Amounts recovered and sorted 457 tons

Final amount processed 0.943 tons

Ethanol 0.98 tons

Isopropyl alcohol 3.92 tons

Lead and lead compounds 7.80 tons

Ethanol 0.73 tons

Isopropyl alcohol 1.83 tons

I N P U T O U T P U T

Amount of chemical substances*

66.8%67.8%

67.8%

67.7%

67.9%

64.2%65.0%63.0%

70.5%

69.4%

62.4%

65.1%

0

300

600

900

1,200

1,500

1,800

2,100

4 5 6 7 8 9 10 11 12 1 2 30.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

(Ordered)

Fiscal 2007

(%)

(Months)

Total purchasing rate Non-green Green

66.8%

Making Our Offices Green

Outline of Kenwood's environmental impact

Statistics gathered from the Head Office, Yokohama Office, Nagano Plant, and Yamagata Plant. Period: April 1, 2007 - March 31, 2008*Chemical substances and their major applications Ethanol Used during production for cleaning

equipment, during development for testing, and also for cleaning during servicing.

Isopropyl alcohol Used to clean production equipment. Lead and lead compounds Used for soldering parts during the

production process.

42Kenwood


Helping to Stop Global Warming

ISO 14001 management systems were instituted in 1998 at each of the Kenwood Group's 4 bases in Japan (Head Office, Yokohama Office, Nagano Plant, and Yamagata Plant). The ensuing energy-saving activities (electricity, natural gas, heavy oil, etc.) have led to a 2,939 ton reduction in CO2 (compared with 1997 calculations) for fiscal 2007. Kenwood takes a multifaceted approach to preventing global warming. We do not leave company cars idling, we have improved the distribution system, and we are replacing air conditioners, vending machines, and computers with more energy-efficient models. We have also asked employees to make changes in their everyday work through CoolBiz, WarmBiz, turning off the lights at lunch time, and turning off computer monitors not in use. Kenwood has also participated in Team -6% since 2006 as part of our environmental activities.

usage for optimum energy distribution. These measures have allowed us to understand our day-time and night-time energy needs and clarified areas for improvement. In 2007 the Nagano Plant saw a 330 ton reduction in CO2 emissions compared with 2006, thanks to the installation of a building management system. This removed the plant from the list of facilities being monitored under the Law Concerning the Rational Use of Energy*.

● Energy conservation patrols The Yamagata Plant has instituted energy conservation patrols in cooperation with local businesses that overcome corporate barriers and allow personnel from other businesses to visit facilities to help discover waste. These patrols reveal waste in areas that we miss, working from the perspectives of "comprehending other companies" and "imitating good practices". Focusing on facilities that use large amounts of energy, this is one way that Kenwood continues to reduce CO2 emissions.

The Kenwood Group is doing its part as a global citizen, proactively working to reduce CO2 emissions in its business operations to prevent global warming.

Equipment activities● Introduction of a building management system

reduces CO2 emissions The Nagano Plant installed a building management system that "visualizes" energy consumption. This has not only increased employee awareness of energy consumption, but it has lead to major reductions in CO2 emissions. A centralized air conditioner management system allows for individual control of units across the factory and a power monitoring system then provides extensive 24-hour monitoring in realtime of each floor's energy

Power monitoring system provides realtime status updates

*Law Concerning the Rational Use of Energy: Plants that utilize

more than a specified amount of fuel and energy are designated

for monitoring by the government to help reduce their energy

consumption.

Control computer for the centralized air conditioning management system

43Kenwood


At our 4 bases in Japan (Head Office, Yokohama Office,

Nagano Plant, and Yamagata Plant), we have instituted the

summer CoolBiz and winter WarmBiz seasonal measures

to help prevent global warming.

We have selected staff to

monitor the temperature in

air conditioned environments

to keep the temperature at

28°C in both summer and

winter. Employees are then

encouraged, with posters

and messages on the

company intranet, to not

wear neckties and to dress

appropriately for the season.

Improving distribution Kenwood is creating a more efficient distribution system,

so in August 2006 we introduced the cross-dock

distribution* system for delivering products in Europe.

Previously, each plant supplied products to major sales

companies. Now, the products are sent to a distribution

center where they are consolidated for efficient delivery

to the sales companies. This new system has helped

Kenwood reduce delivery costs and CO2 emissions.

Participation in the Light Down Campaign ● Participated in Black Illumination 2007 ● Turned off neon signs at the Sapporo bus terminal tower

and the Kanda Kyodo Building ● Reduced lighting at our plants by adjusting work hours

CoolBiz and WarmBiz implementation

Kenwood's neon sign

CoolBiz poster on display in our offices

* Cross-dock distribution: Freight from various factories is

delivered and consolidated at a distribution center from where the

products are supplied in bulk to retail outlets.

Sea route Land route

Previous distribution

Cross-dock distribution

Through these activities and by planning and designing new activities, the Kenwood Group continues in its tireless

efforts to prevent global warming.

44Kenwood


Conservation & Efficient Use of Resources

Aiming to reduce waste through "zero emissions*" As a global citizen, the Kenwood Group is working to save

and improve efficient use of resources. Our 4 facilities in

Japan (Head Office, Yokohama Office, Nagano Plant, and

Yamagata Plant) have set a goal to recycle at least 99.5%

of their resources for their "Zero Waste Material Emissions"

program since July 2006.

● Recovering rare metals from used margin boards

*Zero emissions: Concept advocated by United Nations University

in 1994 to "effectively utilize our planet's limited resources and

minimize the effect of the human race on the natural environment".

*Margin boards: Frame used to hold the printed circuit board while attaching parts using an inserting machine. They are normally thrown away after being used.

● Switching to a multifunction copier reduces office

paper usage

The head office and the Yokohama Office have reduced

office paper usage by replacing their existing copiers with

new multifunction color copiers. Employees input their ID

and password before using the copier. This allows us to

track usage and increases awareness of paper reduction

amongst employees.

The efforts of

Kenwood's 4 Japanese

bases since 1998 to

reduce paper used

in our office saved

approximately 1,063

trees in 2007 compared

with 1997.

(calculations based on

1 tree, 8 m tall and 14

cm in diameter equaling

13,300 sheets of paper)

The growth in the demand for metals has lead to a

worldwide shortage. In response, Kenwood Group

factories are working to recover copper and slag from

the large number of margin boards* consumed during the

production process.

Recycling Loop

Recycling of metal, plastic, paper

Kenwood

Collection and delivery

Sorting

Land�ll

Unrecyclable materials

Fuel

Materials/parts supplier

1997 2003 2004 2005 2006 2007

Company-wide reduction of 1,063 trees

compared to 1997

Use of office paper at Kenwood's 4 facilities in Japan

1,318 trees

650 trees 566 trees

455 trees 352 trees

255 trees

Recovered copper

Slag is turned into concrete

Multifunction color copier Fuji Xerox Apeos Port III C4400 PFS

Users must enter their ID and password when copying and printing. Authorization screen from the Fuji Xerox Apeos Port III C4400 PFS

Used margin boards from the production process

45Kenwood


● The Yokohama Plant receives the Yokohama Environmental Action Award for Offices with Excellent (Three-Star) Garbage Separation

Of the zero emissions efforts by Kenwood's 4 facilities in

Japan (Head Office, Yokohama Office, Nagano Plant, and

Yamagata Plant) , the Yokohama Office was awarded a

Yokohama Environmental Action Award for Offices with

Excellent (Three-Star) Garbage Separation on November

4, 2007.

* Yokohama Environmental Action

Awards:

The Yokohama Office and 13

other businesses were recognized

in 2007 based on proper and

thorough separation of waste, and

complete recycling of recyclable

materials.

● Converting food waste from the cafeteria into fertilizer

Kenwood is reusing waste materials by converting food

waste from our company cafeterias to fertilizer. We have

Environmental Board Chairman Shiohata receives the Environmental Action Award from Mr. Inoue, Chairman of the Yokohama Environmental Preservation Council.

Offices with Excellent (Three-Star) Garbage Separation

concluded agreements with local farmers to utilize food

waste for fertilizing broccoli

and other vegetables.

Creating great farming soil

Food waste from our cafeterias is sprayed with bio liquid.

Food waste and wood chips are mixed and fermented

After mixing, the fermented soil is plowed into the �eld.

The soil can then be used for growing vegetables.

1

2

4

3

46Kenwood


1992 January Environmental Task Committee created (forerunner of current committee).

1992 November Kenwood is the first in the industry to use environmentally friendly "pulp mold" packaging for portable CD players.

1997 April Environmental Management System Promotion Office established at the head office's management headquarters.

1998 July Kenwood's Hachioji and Yokohama Offices acquire ISO 14001 certification.

1998 December The Nagano Plant, Kenwood's audio factory in Japan, acquires ISO 14001 certification.

1999 January Kenwood Electronics Technologies (M) Sdn. Bhd (Kenwood Malaysia Plant: KETM) acquires ISO 14001 certification (Certified Jan. 8).

1999 September Kenwood Electronics Technologies (S) Pte. Ltd. (Kenwood Singapore Plant: KETS) acquires ISO 14001 certification.

1999 December The Yamagata Plant, Kenwood's communications equipment factory in Japan, acquires ISO 14001 certification.

2000 April Registered with the Japan Containers and Packaging Recycling Association as a business entity.

2000 October The environmental activities report "Environmental Report 2000" is issued.

2001 August Shanghai Kenwood Electronics Co., Ltd. (Kenwood Shanghai Plant: SKE) acquires ISO 14001 certification.

2001 September Registered with the Japan Portable Rechargeable Battery Recycling Center as a business entity.

2002 October Nagano Plant reports attainment of "Zero emissions."

2003 April Environmental Promotion Dept. established within the Corporate Administration Division. The Kenwood Environment Board, Green Product Promotion Conference, and Environment Protection Promotion Conference also established.

2003 May Study begins for compliance with European environmental regulations (WEEE & RoHS).

2004 September From the "Environmental Report 2004" onward, paper publishing switched to the Web.

2005 June Kenwood Electronics Bretagne S.A. (Kenwood France Plant: KEB) acquires ISO 14001 certification.

2005 October Product collection and recycling contracted to Matsushita Electric Industrial Co. subsidiary ENE Co. to comply with Europe's WEEE Directive. Registration completed (application preparation completed) with the German National Register for WEEE. Infrastructure preparations for product recycling in accordance with the WEEE Directive.

2005 October Lead-free solder is incorporated at all plants.

2006 April Preparation completed for compliance with European RoHS directive.

2006 June Registered with the Team -6% project to stop global warming and engaged in related activities. "CoolBiz" adopted by Kenwood in Japan and a poster was created to promote CoolBiz in our offices.

2006 November All four Kenwood offices and plants in Japan attain "Zero Waste Material Emissions." This is reported in and outside the company.

2007 April Name changed from the Environmental Promotion Dept. to the Environmental & Social Contribution Department.

2007 April Revised Environmental Principles and Policies. Issued Environmental Guidelines, 1st edition.

2007 July Successfully renewed ISO 14001 certification for the third time.

History of Environmental Activities

Kenwood is an Of�cial Supplier of radio communication systems to Vodafone MacLaren Mercedes.

2967-3, Ishikawa-machi, Hachioji-shi, Tokyo, 192-8525 Japan

Contact information:

● Corporate Administration Division,

Environmental and Social Contribution Department

Tel: 042-646-6732 Fax: 042-646-7960

You can also access this report from out homepage.

URL. http://www.kenwood.co.jp/j/eco/activity/

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