Yamaha CSR Report 2006

Message from the President

Shuji Ito, President and Representative Director, expresses gratitude for stakeholder support and outlines Yamaha's commitment to CSR and sustainable development. He highlights the company's evolution into a comprehensive musical instrument manufacturer and its efforts to enrich culture through sound and music.

Yamaha's corporate objective is to create 'Kando' (an inspired state of mind) and enrich culture with technology and passion born of sound and music, together with people worldwide.

The company's Corporate Philosophy emphasizes commitments to customers (high-quality products and services), shareholders (healthy profits and transparent management), those who work with Yamaha (fair rules and mutual trust), and society (safety, environmental care, ethical conduct, and cultural contribution).

Outline of the Reporting Organizations

Yamaha Corporation, established in 1887, is headquartered in Hamamatsu, Japan. The report covers consolidated net sales by business segment, with Musical Instruments accounting for 58.8% of FY2005 sales.

The company's business segments include Musical Instruments, AV/IT, Electronic Equipment and Metal Products, Lifestyle-Related Products, and Recreation. Major business sites are distributed globally, with Japan accounting for the largest share of net sales.

The report also presents a transition of major financial indices, including net sales, income before income tax, and net income.

Management Structure

Yamaha Corporation is focused on enhancing corporate governance and refining its internal control system to maximize corporate value and brand value. Key initiatives include strengthening the Board of Directors and Executive Officers, implementing a robust audit system, and establishing a Company-wide Governance Committee.

The company emphasizes full compliance with laws, social norms, and internal regulations, promoting ethical behavior across all group companies. The CSR Committee plays a crucial role in clarifying and promoting voluntary CSR initiatives.

Initiatives for Our Customers

Yamaha is committed to product safety and quality enhancement, aiming to provide convenient and easy-to-use products that meet customer expectations. This includes an organizational structure that assures high quality, promotion of product risk management, and compliance with worldwide safety standards.

The company enhances its customer support system through improvements to the Musical Instruments Information Center and the establishment of the Yamaha Manual Library, offering online access to instruction manuals in multiple languages.

Yamaha also focuses on expanding its overseas support system for commercial audio equipment and catering to customer needs for products and services, such as the Unistyle™™ Yamaha Music and English Schools and the STAGEPASTM 300 public address system.

Initiatives for Our Shareholders

Yamaha Group practices transparent and effective management to deliver value to shareholders. The company's strategy for returning value includes increasing ROE, retaining earnings for growth, and maintaining stable dividends.

Investor and shareholder communication is prioritized through general shareholders meetings, IR activities, and online information dissemination. Yamaha also participates in Socially Responsible Investment Funds and maintains strong bond ratings.

Initiatives for the People We Work With

Yamaha Group businesses are successful due to the contributions of employees, temp staff, affiliated factories, and retailers. The company employs various methods to maximize skills and foster growth.

Key initiatives include basic employment policies respecting human rights and prohibiting discrimination, a Senior Partner System for post-retirement employment, and an Early Retirement System. Yamaha also promotes employment of people with disabilities.

Personnel and training systems are tailored to job requirements, with a focus on skill registration and passing on technical knowledge. The company also emphasizes creating a supportive work environment, including support for work and child care, and preventing sexual harassment.

Employee safety and health are paramount, with a focus on accident prevention, promoting good health, and overwork prevention. An agreement with the labor union is in place, ensuring fair treatment of partners.

Initiatives for Society

As a music-centered enterprise and a good corporate citizen, Yamaha Group contributes to society through music-related activities and opportunities for people to experience music.

Initiatives include the "Yamaha Forest" project in Indonesia, supporting hurricane-stricken areas, social contributions from the Yamaha Symphonic Band, participation in local clean-up campaigns, widening the scope of grand piano factory tours, supporting music in Singapore, supporting music in regional areas, and supporting local symphony concerts.

The company also engages in fund-raising at local children's hospitals, supports youth-based music experience programs, regional athletic events, provides children with disabilities the opportunity to become familiar with musical instruments, and supports the musical creativity of hospital patients.

Environmental Conservation Activities

Yamaha Group considers environmental conservation a vital theme, with a policy enacted in 1994 outlining its basic stance. The company focuses on reducing the use of substances that impact the environment, improving energy conservation, and enhancing recycling efficiency.

Key principles include developing environmentally-sensitive technology and products, promoting energy-saving and resource-efficient practices, minimizing and recycling waste, strictly adhering to environmental regulations, and actively distributing information.

The report details goals and achievements in environmental management, product development, green procurement, global warming prevention, waste reduction, ozone layer protection, management of chemical substances, groundwater purification, and information disclosure.

Yamaha actively works to make environmentally-friendly products through Product Life Cycle Assessment (LCA), managing chemical substances contained in products, and eliminating the use of lead in wind instruments.

The company also focuses on environmentally-friendly production and logistics, including preventing global warming, efforts to protect the ozone layer, initiatives to recycle water, reduce consumption, reduce waste, manage chemical substances, and implement initiatives in packaging and logistics.

Data by site and environmental performance data are provided, including waste generated, landfill ratio, PRTR law responses, CO2 emissions, and water consumption.