FY2016 Version

ISEKI Group aims to"live peacefully with a stable natural environment"

CSR Report
Corporate Social Responsibility Report• 7DEOHRI&RQWHQWV ÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂ 2

Aiming to bring about aprosperous community, constantly
growing in affluence:<Feature articles>
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ISEKI Group is are in pursuit of foodproduction that secures our daily lives.

The growth of agriculture is a top-priority
issue that holds the key to global food problems.

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• 7RJHWKHUZLWKWKHHPSOR\HHVÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂÂ• Examples of reducing environmental
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ISEKI Group will contribute to thedevelopment of agriculture around the world.

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Cover photograph: Cabbage patch in the high plateau of Nagano prefecture
Photograph on the Table of Contents page: "Yoko cherry blossoms" photographed at the Tobe Office of ISEKI[About Yoko cherry blossoms] After World War II, Mr. Masaaki Takaoka (1909 to 2001), who repented having sent out his students
to fight in a war, originated a new cherry tree breed, "Yoko," expressing his wish for peace. A movie made in his memory, entitled"YOKO THE CHERRY BLOSSOM," was filmed on location mainly in Matsuyama city, Ehime prefecture in 2015. The Development& Production Division of ISEKI (Tobe town, Iyo-gun, Ehime prefecture) has about 30 Yoko cherry trees on its premises, which
bloom beautifully every year. These trees were planted just after the division's relocation from the Matsuyama city. Yoko cherry
blossoms are in full bloom in late March, still in chilly weather, even before Somei Yoshino cherry blossoms bloom, and please theeyes of the ISEKI employees. In the Akasaka Izumi Park nearby, there is a monument for Mr. Masaaki Takaoka who originatedthe "Yoko" cherry trees and visitors can admire Yoko cherry blossoms around a fountain there.

MessageSocial Mission as an Agricultural Machinery Manufacturer

Contributing to the development of recycling-oriented society

In 2015, ISEKI & Co., Ltd. is celebrating its 90th anniversary.
Since the establishment of the company, with the principle of our founder, "free farmers from exhausting labor" as thecornerstone, ISEKI has been striving to contribute to the modernization of Japan's agricultural industry as a full-time
manufacturer specialized in agricultural machinery. Over the period, we have consistently pursued efficiency andlaborsaving advances in agriculture and kept providing the products to the market by pioneering the development of agreat deal of agricultural machinery and facilities. When we consider the increase of global population, food issues, foodself-sufficiency and land conservation, and global environmental issues, the role agriculture plays is significant and,
consequently, the social mission of agricultural machinery manufacturer becomes more and more important.

Regarding environmental issues, including global warming, we set our goal to cooperate in forming recycling-oriented society and position this goal as
one of the most important issues of the management. Such efforts include the implementation of an Environmental Management System (EMS)
throughout the entire ISEKI group, from our domestic manufacturing locations to the headquarters and sales subsidiaries. Starting from FY2015, welaunched the full-scale activities in the overseas locations as well. We implemented tangible targets and management system from initial productdevelopment phase in an effort towards environmental preservation. In order to convey the results of these approaches in an easy-to-understand mannerto the customers and all stakeholders, we have set environmental-friendly design standards, and we are promoting the implementation of an "eco-productcertification system." In this system, based on the evaluation results, environmental labels are used only for products that have met our own standard.
In addition, we are actively engaged in various social engagement activities, so that we can contribute to the people in the community.

Importance of human resources development
Contributing to Agriculture in Japan and the World
To contribute to agriculture both in Japan and throughout the world, ISEKI Group will continue to operate under the basic
business philosophy to "provide products that will satisfy customers".
For the growth and development of Japan's agriculture, we provide support from various points of view.;we offer
energy-saving, low cost, and environmental- friendly products that help improve the agricultural productivity, save fueland fertilizers, and products in which ICT and robot technologies are introduced. We are also promoting to spreadcultivation and farm management technologies, supporting the revitalization of deserted farmland and regional
activation, and offering support to women, young, and new farmers. We also work on the food education and "local
production for local consumption" in an attempt to improve the food self-sufficiency. To cope with the recent global needs
to increase food production, we are actively providing products to Europe, North America, China, and ASEAN countries.

< Spirit of ISEKI– Passion of founder – >"I want to free farmers from exhausting labor"
Agriculture was hard work, done by hand and with the help of animal
power. To change this, Kunisaburo Iseki, the founder endeavored torealize laborsaving and further development of agriculture throughmechanization.
"We produce good machinery that customers highly praise,"
Kunisaburo used to say. He devoted himself to provide products andservices that made the customers happy. That founder's passion has
been inherited in an unbroken line until today as "Iseki's spirit."< Company Motto >Our management philosophy is to provide

1. Products that satisfy customers,
2. A stable workplace to the employees,
3. Appropriate dividend to theshareholders,
and thereby we will fulfil our social mission.

What we see at the base of these activities and initiatives is people. We realize that human resource
development is essential for us. We make sure that skills and techniques, which are indispensable in the
production site, are improved and properly passed on. We also make sure to develop human resources
who can offer comprehensive farm business proposals to the customers and who can work actively inglobal fields. We also promote recruitment of foreign nationals and appointment of female managers.

Realizing "prosperous community, constantly growing in affluence"
ISEKI Group positions the contribution to achieving a recycling-oriented society as
one of our most important management tasks. We will continue our efforts to realize
a "prosperous community, constantly growing in affluence," work on various issues
and carry out our social responsibilities together with the stakeholders.

< Providing products that please the customers >Contribute to the mechanization and modernizationof agriculture as "all-round agricultural machineryand equipment manufacturer"
Development of two-wheel ricetransplanter equipped withbackward-tilting seedling tanks

Developed the self-threshingcombine harvester for the firsttime in the world

After repeated trial and error, we developed arice transplanter "PF20" with a plastic float
which maintained the constant planting, solving
a challenging issue at that time in 1971.
The unique technology of this "two-wheel ricetransplanter equipped with backward-tilting
seedling tanks" is still used in the current ricetransplanters in Japan.

We announced the self-threshing combine harvester
in 1966 and launched it in the following year. This iscurrently the major combine harvester type in Japan.
At that time, farmers used the conventionallarge-sized combine harvesters imported fromabroad. Under such circumstances, ISEKI's engineer
team endeavored to "produce a combine harvesterthat satisfies farmers" and that suited the rice farmingin Japan. The outcome was the "self-threshingcombine harvester" which combined the function of
automatic threshing machine and reaper.

The nickname of this model "Sanae" hasbecome well-known andused as the synonym of
ISEKI's transplanter.

President

Eiichiro Kinoshita

Inventions that brought about theinnovation in Japan's agriculture

Self-threshing combine harvester and rice transplanter
were selected as "100 Postwar Japanese Inventions"!

The First "100 Postwar Japanese Inventions" was announced
by the Japan Institute of Invention and InnovationŶChange of labor hours of rice farming (per 10a)
1954

2010

Putting seedlings in bed, growing in nurseries, transplanting

37.55 hrs.

3.33 hrs.

Harvesting and threshing

57.20 hrs.

3.54 hrs.

Ɣ Without these two inventions, rural labor powers would not haveconcentrated in the urban areas that rapidly and the rapid economic
growth would not have progressed at that pace.
Ɣ In the past, rice farming, especially transplanting and harvesting, wascontinuous repetition of hard labor. This overwork often caused farmers to
suffer from illnesses. Mechanization of transplanting and harvesting was alongtime dream of farmers. In the past, many people have invested fortune outof their pockets in an attempt to improve this situation by invention.
Ɣ Rice transplanters and self-threshing combine harvesters are not only
utilized in Japan. (Omitted) In the age of internationalization, thetechnology which was cultivated in the development of transplantersand self-threshing combine harvesters should be utilized soon.
*Excerpt from the announcement of the award announcement.
In the "100 Postwar Japanese Inventions," ISEKI's efforts were referred to as a part of descriptionof the combine harvester.

To bring about "a prosperous community, constantly growing in affluence"

Establishment of "Dream Agricultural Research Institute (Yumesoken)"
Bringing Agriculture to the Next Stage
ISEKI Group has so far made various proposals including low-cost cultivation such as sparse planting technology tobring about agriculture that inspires hopes for the future.
On the other hand, the agriculture in Japan is undergoing major changes such as introduction of large-scale farming,
entry of companies into farm business, conversion staple rice into other crops for full utilization of rice paddies, etc.
ISEKI, which will be more and more required to make proposals to cope with these changes in the future, establishedthe "Dream Agricultural Research Institute (Yumesoken)" that will research, demonstrate, and promote advanced farmbusiness technologies.

Dream Agricultural Research InstituteResearch and demonstration of advanced technologies
Research and demonstration of agricultural machinery equipped with advanced
cultivation technologies and cutting-edge technologies such as robot
technology and ICT will be conducted through enhanced joint work withadministrative agencies, research institutes, universities, JA, and companies,

Gallery for Full of dreams
farming industry

Farm business promotion
Proposals on farm business in general will be
provided to all kinds of farmers including agricultural
corporations and large-scale farmers.

Exhibition Hall

Movie on Full Utilizationof Rice Paddies

AGRISUPPORT Theater

3
Exhibition
Machinery
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Agri

23

HJ61

Digital Rice Paddies

NP8ry0Exhibition 2ean
Sa Machine
lturalAgricu120 ion 1
TJW chinery Exhibit

a
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ultur
Agric

Human resources development
Human resources development of the group employees will
be conducted, turning them into someone who can offer farmbusiness proposals to farmers.

AGRISUPPORT TheaterThis theater introduces our ICT-based
agricultural support system, "AGRISUPPORT"
using visually impactful video. You canexperience the operation of a tractor withLEADEYE.

Movies on Full Utilization of
Rice Paddies
The screen starts playing video when
you set a vegetable-motif cube on it. You
can watch movies about the technologies
for full utilization of rice paddies.

Exhibition HallThis hall introduces advanced farm businesstechnologies such as cultivation technologies
and agricultural machinery equipped withadvanced technologies.

Digital Rice Paddies
The latest cultivation technologies
such as sparse planting and direct
seeding are simulated on digital ricepaddies.

Outline of our businessEconomic report
ISEKI Group is engaged in business activities mainly concerning development and manufacture and sale of agricultural
machinery related to rice and vegetable cropping.

< Major products >Harvesting
Machinery

We respond to a wide-variety customer needs!
To respond to a wide-variety customer needs, the sales, development, and manufacturing departments work together. We develop products
in support of energy-saving and low cost agriculture, environmental preservation and the safety of agricultural work. In domestic business,in addition to the agricultural machinery for rice cultivation, which is our main field, we engage in the mechanization of crops and vegetable
cultivation, where the needs for laborsaving are high, and the utilization of advanced technologies, such as introduction of IT in agriculture,use of robots in agricultural machinery and plant factory. In overseas business, we provide products which meet the needs of customers andareas in a wide range of fields, including lawn mowing, light civil work and environmental conservation, in addition to agricultural machinery.

Combine Harvesters,
Binders
Combine Harvesters

Tractors, tillers, highclearance
multipurpose
vehicles, mowers

Combine Harvesters

Binders

Processing
Machinery
Dryers, Rice Hullers,
Rice Cleaners, Rice
Graders, Vegetable
Harvesting andProcessing Machinery

Cultivating &Mowingmachinery

Combine Harvesters

DryersRice Hullers

Rice Graders

Coin-operated
Rice Cleaners

Vegetable Harvesting Machinery

Miscellaneous
Tractors

Tractors

Tractors

Tractors

Implements, SpareParts, Agricultural
Facilities, etc.
Implement(In-Ridge Partial Fertilizer)
Tillers and high clearance
multipurpose vehicles

High clearance
multipurpose vehicles

MowersHydroponics facility

Plant growth diagnosis device

MowersTo provide "products that satisfy customers"!

Planting
machinery"No. 1 patent allowance rate in Japan!""No. 1 open patent per specialty field for 14 consecutive years"

Rice transplanters,
vegetabletransplanters
Ride-on rice transplanters

Walk-behaind rice transplanters

Vegetable transplanters

Vegetable transplanters< Overview of account settlement as of December 2015 at the end of FY2015 >The fiscal year-end has been changed from FY2015.
The fiscal year-end of ISEKI & Co,.Ltd and subsidiaries has been change to the period from January 1 to December 31 so that we can
improve business management and operation efficiency in terms of budget planning etc. and can disclose management information
on a timely and precise manner to improve management transparency.
As a transitional treatment, nine-month results were included in the consolidated results for the fiscal year ended 31, 2015.
Note: Two subsidiaries in France only adopt September 31 as their fiscal year-end.

< Total assets trends >< Achievement trends (consolidated >(billion yen)(billion yen)With an aim to "provide products that satisfy customers," ISEKI is actively pursuing the development,
introduction, and implementation of new technology.
In the "Patent Administration Annual Report 2015 Edition," ISEKI has secured the No.1 ranking in thefollowing categories:• No.1 with the number of patent allowance rate in 2014 (Patent allowance rate: 99.2%)• No.1 with the open patent per specialty field in 2013 (other special machinery sector)*For details, see the "Intellectual Property Report" and our website.
results per product type in< Sales
FY ended December, 2015 >< Company profile >Company Name(billion yen)

ISEKI & CO., LTD.
700 Umaki-cho, Matsuyama-shi, Ehime-ken, 799-2692 JAPAN

Other
agricultural
related business
21%
Planting
machinery7%

Head Office

Tel 089-979-6111
Fax 089-978-6440

Cultivating andmowing machinery34%

5-3-14, Nishi-Nippori, Arakawa-ku, Tokyo, 116-8541 JAPANTokyo
Headquarters

Tel 03-5604-7602
Fax 03-5604-7701

Net sales(billion JPY)
Ordinary income(billion JPY)

Included:
Net assets
FY 2012ended
Mar.31

FY 2013
ended
Mar.31

FY 2014
ended
Mar.31

FY 2015
ended
Mar.31

FY 2015
ended
Dec.31

FY 2012ended
Mar.31

FY 2013
ended
Mar.31

FY 2014
ended
Mar.31

FY 2015
ended
Mar.31

Parts and farming
implements
23%

Harvestingand processing
machinery15%

FY 2015
ended
Dec.31

Note: As a transitional treatment, nine-month results were included in
the consolidated results for the fiscal year ended 31, 2015.

Note: As a transitional treatment, nine-month results were includedin the consolidated results for the fiscal year ended 31, 2015.

Foundation

August 1926

Paid-in Capital

23,344 million yen (as at December 31, 2015)

Number of
Employees

Consolidated: 6,021 Non-Consolidated:
744 (as at December 31, 2015)

Domestic businessDream Agricultural Research Institute (Yumesoken)

Economic report- Research and promotion base of advanced farmbusiness that will support domestic agriculture -Developing initiatives to cope with the agriculture facing
significant changes we will further expand our domestic business!

We will enhance joint work with administrative offices, research institutes,
universities, JA, and companies to reinforce research, demonstration, andpromotion of advanced cultivation technologies and agricultural machinery.

Domestic agriculture is now undergoing significant changes, which provide the conventional farming just to produce staple
rice with various opportunities to grow other crops like feed rice or vegetables. Furthermore, major change is recently
occurring due to introduction of large-scale farming, together with the application of IT and robotic technology into the farming.
In response to these changes we will enhance our "support capacity to the customers" by providing high-quality marketing
services from various points of view and offering proposals that suit farm management of our customers.
Maintenance bases for large-scale farming andintroduction of large agricultural machines
To cope with the trend of large-scale farming, we offer "wide line-up of large machines"
and "refurbishment of our maintenance bases" in various locations in Japan.

<Outline of the activities>

Ɣ Advanced farm business technology research(1) Research and demonstration of advanced cultivation technologies,
such as low cost agriculture, new strains cultivation, etc.
(2) Research and development of advanced agricultural
machinery, such as ICT, robot, plant factory, etc.
(3) Research of data analysis and effective use of agricultural ICT.
Ɣ Farm business promotion(1) Providing consultation of farm business to the farmers,
agricultural firms, etc.
(2) Human resources development of the group employees, turningthem into someone who can offer farm business proposals(3) Offering information on the farm businessDream Agricultural Research Institute (Yumesoken) and
Exhibition Hall (Tsukubamirai city, Ibaraki prefecture)

Farm business proposals to support farmers

Large maintenance and service facility(Mashiki town, Kumamoto prefecture)

Advanced technology and smart agriculture machinery
We develop and promote the "smart agricultural machinery" and "farmbusiness and management methods," utilizing advanced technologies, suchas ICT and robot technology, to improve productivity and efficiency.

To establish the cultivation technologies, such as low cost,laborsaving
production and crop conversion, we are engaged in "Agri-Heros support
project." In this project, we foster human resources who can make farmbusiness proposals from various points of view to support all kinds offarmers like agricultural firms, large-scale farmers and female farmers etc.,
hoping that they can play a significant role in domestic agriculture in the
future.

Enhancement of support system (nationwide)

Autonomous tractor(under development)
GPS guidance for tractors

Auto-control of fertilizer application

LEADEYE

Variable fertilizing ricetransplanter

To provide support to farmers nationwide, we will establish large
maintenance and service facilities at the sales subsidiaries throughout thecountry and assign staff who have completed trainings in the “Agri-Heros
support project” where they learn how to promote cultivation technologies,
agricultural machinery application technologies, advanced agricultural
machinery, etc.

Measuring yields andmoistures of paddy

Combine harvesterwith yield sensor

Expansion of vegetable machinery to support crop conversion

ISEKI high-tech green house

As to the crop conversion of soybeans, wheat, vegetables, from ricepaddies, and the expansion of production, we offer various support with theenhanced line-up that covers the new mechanization system of vegetable
farming and know-hows to utilize the machines.

We research and demostrate advanced technologies for cultivation andenvironmental control of the plant factory., Also, we provide trainings todevelop human resources in the facility.

In-Ridge Partial Fertilizer

ISEKI high-tech green house(Matsuyama city, Ehime prefecture)

Overseas business

Main overseas locations and business partners (as at March 31, 2016)
China

Economic report

Dongfeng ISEKI Agricultural MachineryCo., Ltd. <China>

In addition to the expansion of business in North America andEurope, we regard the business in China and Southeast Asia as
our engine of growth and further accelerate our global strategies.
EuropeCarrying out our global strategies, we will strive to maintain an overseas sales ratio of at least 20% and improve
profitability.

N.V ISEKI Europe S.A <Belgium>
ISEKI France S.A.S <France>
ISEKI-Maschinen GmbH Deutschland <Germany>

North America
AGCO group

South East Asia
ISEKI SALES (THAILAND) CO., LTD <Thailand>
PT.ISEKI INDONESIA <Indonesia>

Business in Europe

Business in North America

We will expand sales through initiatives taken by ISEKI France S.A.S

We will increase our market share by full-scale distribution of economy tractors, our strategic product.

Since the establishment of N.V. ISEKI Europe.S.A. in Belgium in 1971, we have introduced products, such as tractors and riding
mowers, mainly into the landscaping market and expanded our sales area. Through initiatives taken by our new subsidiary inFrance, we will further expand the sales by launching new strategic products that meet our customers' requirement.

In North America, we provide products, such as compact tractors and utility tractors to AGCO cooperation, an agricultural
machinery manufacturer with a wide sales network in America, as an OEM supplier. We will expand our market share broader
distribution of economy tractors and wider lineup of utility tractors.

Full-fledged launch of economy tractors
produced in Indonesia in 2016

ISEKI France S.A.S, strategic sales
base in Europe

Sales start of economy tractors in 2015

Enhancement of utility tractor line

Business in China

Business in South East Asia

We will expand the sales through full-fledged launch of tractors and introduction of new products.

We will try to expand sales through full-scale production at PT. ISEKI INDONESIA andfull-fledged launch of strategic tractors.

In Chinese market, where agricultural mechanization is advancing rapidly, through the establishment of Dongfeng ISEKI
Agricultural Machinery Co., Ltd., we will increase the sales through full-fledged launch of tractors and introduction of new
products such as combine harvesters. In 2016, we are constructing a new plant to increase production by supplying not onlyin China but also in the Southeast Asian market like Indonesia and Thailand.

Full-fledged launch of tractors poduced in China in 2016

New plant in Xiangyang, Hubei province

In the Southeast Asian market, PT. ISEKI INDONESIA, which now reaches full production, will manufacture tractors for the
North American and European markets and increase the production for the Asian countries.
Also, we will try to establish the ISEKI brand by enhancing the sales of ISEKI SALES THAILAND, which has started selling strategic tractors.

PT. ISEKI INDONESIA, production site for strategic tractors

Strategic tractor for Southeast Asia

CSR initiatives of ISEKI Group
Sociality report
Based on our management philosophy "providing products that satisfy customers", the corporate social
responsibility (CSR) of ISEKI Group is to provide products and services that meet the needs of customers in Japanand other countries. and thus earn reasonable profits and share them with shareholders, employees, andcommunity/society in order to bring about an affluent society, increase the corporate value, and ensure sustainable
development of the entire group. ISEKI Group needs not only to carry out economic activities but also to fulfill socialand environmental responsibilities through business activities. For the sake of our activities, therefore, we
determine important issues and goals for business management in accordance with ISO26000 and GRI Guidelines
G4 and through communications with stakeholders.

Important issues of ISEKI GroupWe define the important issues and goals of ISEKI Group based on the seven core subjects of the international standard ISO26000
and opinions and requests that we received in dialogs with stakeholders.
Information disclosure, one of the important issues, is conducted in accordance with GRI Guidelines G4 in an effort to improve thetransparency, objectivity, and completeness of information.

Constantly growing in agriculture

environmentally-compatible productsƔ Reduction of environmental load in business activitiesƔ Conservation of natural environmentƔ Promotion of green procurement
Ɣ Response to biodiversity
Ɣ Energy and resource conservation, etc.

Seven core subjects of ISO26000(1) Organizational Governance(2) Human Rights(3) Labor Practices(4) The Environment(5) Fair Operating Practices(6) Consumer Issues(7) Community Involvement andDevelopment

Enhancement of
dialogs

Environmental issues

Ɣ Supply and expanded sale ofSeven core subjects of ISO26000 standard
ISEKI Group regards the seven core subjects of the international standard
ISO26000 as the basic requirements of social responsibilities and thus promotes
compliance with these requirements.
They are also treated as the requirements from society in general to check thedirection and completeness of a company's initiatives when we evaluate and review
them.

Stakeholder engagement

Ɣ
Ɣ
Ɣ
Ɣ
Ɣ
Ɣ

Ɣ
Ɣ
Ɣ
Ɣ
Ɣ
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ISEKI group's engagement with main stakeholders
ISEKI Group provides various opportunities for hearing the voices of our
stakeholders. The feedbacks through dialogue with stakeholders are summarized
by the sections in charge and introduced into corporate activities and are also
reported to the company’s executives in a monthly meeting.

Customer

Local
community

Important issues of
ISEKI Grouptransparency

Human rights andlabor practices

Ɣ Diversity
Ɣ Promotion of employment of womenƔ Work-life balanceƔ Human resources development and trainingƔ Occupational safety and health, etc.

Sources of feedbacks
Sales and after-sales service desk
User meetings, trainings and seminars
Exhibitions, demonstrations, farm business and technology support
Farm business information magazine, product brochures, DVDs
Corporate website, inquiry by e-mail, consultation desk
Farm business Information site ( i-Next)
Publicity during factory tour & in exhibition halls (ISEKI Dream Gallery)Social contribution activities
Volunteer activities
Corporation with with administrative organization, research institutes, schools, etc.
Publicity via Environmental Report and Intellectual Property Report
Corporate website, inquiry by e-mail, consultation and report desk
Various activities through economic &industrial organizations

Examples of initiatives

Giving questionnaire survey to guests to"ISEKI Dream Gallery"
Holding seminars - Children from the local community -Visit to the company - People from the local community -Employees

Ɣ Active disclosure of information
Ɣ Securement and monitoring of businessƔ Compliance, etc.

Supply of safe, secure, and high-quality products
Advanced and autopilot products
Inexpensive and lightweight products
Easy to handle by female and elderly farmers
High maintainability
Work efficiency, etc.

ISEKI Group evaluated and checked important issues and exercised the following initiatives in 2015. In the future, we will try tofurther improve dialogs with stakeholders. For details, see the relevant pages.
Seminars and trainings on agricultural machinery- Customers -General shareholders' meeting
IR activities
Shareholders Various reports (Securities Report, Annual Report, CSR Report,
and investors Intellectual Property Report, etc.)
Corporate website, inquiry by e-mail, consultation and report desk
Replies to various questionnaires & surveys

Suppliers

Organizational
governance andcompliance

Agricultural issues
Support for profitable agriculture management
Development and revitalization of local farming industry
Support for large-scale farming and agricultural corporations
Improvement of maintenance service
Research and promotion of advanced cultivation
technologies
Laborsaving, high efficiency, etc.

Requests for products

StakeholderƔ Enhancement of information disclosureƔ System for request summary and evaluation
Ɣ Request for IDG exhibition and explanation
Ɣ Community volunteers and exchange activities

IR information meeting to vendors
Dealer meetings
Inspection training workshop, ISEKI group Green Supply Guidelines
Corporate website
Suppliers' business support
Internal IR meeting, Labor management council, Sales subsidiary meeting
House magazine, information magazine, CSR Report, Intellectual Property Report
Corporate website, intranet
Inquiry by e-mail, counseling and report desk
Various trainings on skills development

Exhibitions and demonstrations - Customers -Stakeholder

Core subjects of ISO26000 See(1) (2) (3) (4) (5) (6) (7) page

Customer22
to28

Research &promotion of ICT, advanced
farm management / technologies
Agri-Heros support project to revitalize local
farming industry
After-sales service & product quality assurance
Recall & customer consulting service

Local
community

29
to
30

Publicity at IDG
Exchange with local communities &volunteer activities

Shareholders
and investors

31

Corporate information disclosure &periodical meetings

Suppliers

31

Meetings, seminars, & business support

Employees

32

Human resources development,
work-life balance, employment of women,
diversity, occupational safety and health

Example of initiative

Corporate governance and complianceTo achieve customer satisfaction

Sociality reportSociality report

Responding quickly and accurately to the changes of our business climate, we operate our corporate management
system and maintain fair business operation. To keep up a good relationship with the stakeholders, we are
improving corporate governance,developing an internal system and sharing information to disclose important
information in a timely manner. The "Corporate Governance Report" is available at our corporate website.

To practice efficient farm management and reduce farm production costs, it becomes more and more necessary toobtain a system to support agricultural work through data analysis. Farmers who are going to expand theirproduction have to restructure the production management and cultivation technology. To support them, we areworking on the development and promotion of software with the use of ICT.

Corporate governance system

Agricultural ICT
General shareholders' meeting
Appointment/
Dismissal

Appointment/
Dismissal

Board ofDirectors

Board ofAuditors
Audit

Directors
11 directors(Incl. 2 outside directors)
5 corporate auditors

Appointment/
Dismissal

Corporate Auditors

Audit

Appointment/
Dismissal/
Monitor<AGRISUPPORT>

Independent Public
Accounting firm
Audit

Audit

President
Directors’ Operation Committee(Directors & appointed Corporate
Officers, General Managers)

Management
Supervisory
Committee

Corporate Officers
Associated companies, divisions & sections(Business execution system)

Strong desire to "make delicious rice and vegetables" and "provide consumers with safe and secure food" have improved
the farmer's techniques Their passion and know-how are extremely important assets which must not be forgotten andshould be passed down to the next generations.
We developed a system to accumulate records of daily work that enables farmer's experience and intuition to be visualized andstored for the next generations and that helps to realize low cost,high-quality, and more efficient farming.

5 auditors(incl. 4 outside auditors)

Internal Control & Audit Department

Board of Directors makes decisions on basic matters in
relation to management as well as matters set forth in laws,
regulations and the articles of association.
Regarding the business execution, the corporate officers fulfill
their duties smoothly as the persons responsible for the various
operations. In addition, to manage businesses in a soundmanner, Directors' Operation Committee meetings are held
twice a month, in principle, in order to share the latest informationand discuss and report on how the business should be operated,the existence of risks, and how to prevent and avoid them.
Corporate Auditors attend the Board of Directors andManagement Supervisory Committee meetings. They audit theoperations and assets of our offices and subsidiaries incooperation with the Internal Audit Department and accounting
auditors. Moreover, they strictly check the important agenda at
the Directors' Operation Committee meetings and the status ofoperation execution by Directors to ensure the effectiveness of
our corporate governance.
We open the Management Supervisory Committee with thechairman of the Board of Directors as the head, all the
directors as members and all the auditors as observers tocheck if compliance is penetrated thoroughly into the Group,
as well as check the measures and their status.

Internal
Audit(Cooperation)

Establishment and use of Group Internal Communication System
We have defined the basic policy on internal control to organize the internal control system and revise it if necessary. To secure
efficient job execution by directors, various regulations and systems, such as Assignment of Duties Regulations and Internal
Control System, were established and important matters are deliberated from various points of view at the Director's Operation
Committee. The Internal Control & Audit Department, an organization responsible for the internal audit and monitoring, is placed
under the Management Supervisory Committee, which is independent from the business section, to enhance neutrality.

Compliance system
We open the "Management Supervisory Committee" to check if compliance is penetrated thoroughly into the Group. According toan annual plan, we provide compliance trainings to all the group employees continuously to a sense of compliance so that injusticeand misconduct will never happen.

Status of approach to fair trade
To ensure fair trade, we prepare and circulate the comprehensive "Action Guidelines" and "Antitrust Compliance Manual" in thecompany. We also provide trainings to the employees regularly to keep them thoroughly informed. In addition, we enhanced therisk management system by setting up a consultation service desk and conducting a regular audit.
Concerning a bidding of facility construction, ISEKI received a cease and desist order and a surcharge payment order underthe Anti-Monopoly Act on March 26, 2015 and February 10, 2016. Also, we received an on-site inspection by the Japan Fair
Trade Commission for an Anti-Monopoly Act violation in October 6, 2015 concerning "bidding for orders for construction work
comprising facilities for protected horticulture and ancillary facilities which would be placed by local public agencies in the
Tohoku region." We are cooperating fully with the investigations.
With full recognition of the severity of the case, we established, implemented measures to prevent the recurrence of such
misconduct and appointed new management. In terms of organizational structures, we transferred the Management Control
Division for the Agri-Plant Business, which is meant to monitor and supervise the facility business, to the Internal Control &Audit Department on May, 2015. In addition, we transferred and placed the Internal & Audit Department under the Management
Supervisory Committee that is independent from the business execution divisions.
Furthermore, we determined to draw on external personnel in the audits on the facility business. We have also reviewed the code of
conduct and manuals for the facility business, while enhancing the training of human resources including those at sales subsidiaries.
We assigned one director in charge of the facility business. Under this new system, we will continue to accomplish thoroughcompliance with all laws and regulations and further enhance the internal control.

This system converts the track of work, the use of fertilizer,
agrochemical, and machine information into data. Farmers
utilize them to improve daily farm work.
We have a line of smart agri –machinery with GPS and sensors,etc., to realize, so-called "smart agriculture", precise agriculture.

Location information
AntennaƔ Smart agri- machinery with AGRISUPPORT"LEADEYE" for tractors
LEADEYE provides visual guidance for
operators who used to depend only on theirexperience They are able to know:

Tablet terminal
Download the app!

Controller• How far the tractor should travel• How much work has been done, etc.

<Smart Farmer's Support>

In the past, Farmers depended on their experience and intuition or had to leave many notebooks to describe work procedures indetails. Today, it is becoming more difficult to follow these ways as the number of large-scale farmers are increasing and a variety
of management styles have been introduced. The Smart Farmer's Support allows farmers to share daily- stored information andprovides them with the data to reduce cost and stabilize quality.

ŶICT in the farming(1) Planning(2) Record(3) Work assist

Make an annual plan andwork schedule.

Record work and materials used.

Operate our smart agri-line.

RecordPlan

Work assist(4) Check(5) Management(6) MaintenanceCheck the information &work progress stored.

Summery the costs &control materials.

Get data on the machinery.
Inspect & do maintenance.

Check

Management

MaintenanceTo achieve customer satisfaction
Sociality report< Agri-Heros support project >ISEKI Group is working on the "Agri-Heros support project" to back up all farmers. To cope with changes andcontribute to the agriculture in Japan, we foster human resources who can provide support to the farmers.

The Agri-Heros support project
1. "Agri-Heroes" stands for all the farmers in Japan. We back them up by fostering theGroup’s employees so that they can give high-quality services as well as proposals
on general farm management, and cultivation techniques.
2. We educate the staff at the sales subsidiaries throughout Japan to support
Agri-Heroes.
<Policy of human resource development>• Persons to be able to make proposals on soil preparation, an essential work to cultivate crops• Persons to be able to make proposals on techniques to cultivate soybeans, wheat, vegetables
and rice as well as to produce them at a lower cost
• Persons to be able to make proposals on farm management using ICT technologies

Supporting female farmers in the "YUMEARU NOGYOJOSHIPROJECT"
Holding seminars in various parts of Japan<Seminar on agricultural machines>

We are holding seminars on highly demanded topics such as safe operations and maintenance of agricultural machinery and soil
preparation. Topics about agricultural administration are also included through collaboration with public administration, business
partners, etc.
At the start in 2014, female farmers gathered from all over Japan to our training center in Ibaraki prefecture. Since they wanted seminars
to be held in their own areas, we have started local seminars since 2015 so that many female farmers are able to participate.

Development and market launch of "SHIROPUCHI," a tractor for female farmers<NOGYOJOSHI Tractor Project>

We collaborated with female farmers and developed a tractor easy for them to handle through identifying problems and requests on
agricultural machinery from female point of view : "Women and men are different in strength and physique." and "Women are
unfamiliar with agricultural machinery, so we are anxious about operating it."Opinions

Training of Agri-Heros support projectAt our "Dream Agricultural Research Institute (Yumesoken)" inTsukubamirai city, Ibaraki prefecture, we hold trainings todevelop human resources who can support domestic farmers.
In the first-year from April 2014 to November 2015, wecompleted 15 trainings in total. All the trainees are now making
full use of the knowledge they acquired in the trainings toprovide support to farmes throughout the country. The trainings
for the second-year has started in February 2016.

< Initiatives for revitalization of local farming industry >We are working on "expansion of the products that meet the local needs" and "improvement of support service
system" to develop local farming industry.

Development of an all-round cultivation system for vegetable farming
At present, the cultivation of local vegetables is gaining more popularity. We expanded a lineup of vegetable growing machineryand developed an all-round cultivation system for the farming of major vegetables.

Activities at a facility & training center for various farming proposals
In February 2016, ISEKI Kyushu opened the "Dream Agricultural Support Kyushu Training Center (Yumekyuken for short) Kyushu
AGRISUPPORT Center," a facility and training center for customers in the entire Kyushu region. For promotion ofadvanced agricultural machinery, you can visit there to experience the advanced machinery. We also proposal to introduce
an all-round cultivation system of vegetable farming.
• Advanced cultivation techniques unique toeach region• Show room where exhibits machinery using
advanced technologies: ICT and robot
technology• Adjacent farm to know our machinery &cultivation techniques

Special specifications of "SHIROPUCHI" Z15,
a tractor for female farmers

Specifications"It’s hard to reach the steering wheel and foot pedals.""Exhausted from operating the tractor whole day.

Fore-aft adjustablesuspension seat

" Too heavy to hold a fuel tank while refueling."

Foldable refueling stand"I want to change the conventional image of agriculture."

Bright white color"Glad if we can avoid being tanned during operation."

Wide canopy"I want to drink something during operation."

Cup holder"It’s hard to get on and off from such a big tractor."

Auxiliary grip and sub-stepTo achieve customer satisfaction
Sociality report< ISEKI's product quality assurance >To "provide products that satisfy customers," ISEKI Group listens to "real voices of customers" and develops
products that can build trust of customers in the entire process from the product planning to after-sales service.

< Initiatives for providing a high-quality and quick service system >In terms of farm management, it is crucial to keep farm work without interruption. The larger the scale of agriculture, themore important it is to use agricultural machinery as planned. Therefore, our large facilities are now available in various
parts of Japan to provide high-quality and speedy services for repair and maintenance of agricultural machinery.

Kyushu Agri-Service Center (KASC)In November 2015, ISEKI Kyushu opened the "Kyushu
Agri-Service Center (KASC for short)," where we canprovide maintenance service for large agricultural
machines throughout the Kyushu region. It covers theentire Kyushu region and supplies quick maintenanceservice with its large space, cranes and trucks. We also
introduced “AGRISUPPORT wagons” to enhance
after-the sales services.

To improve customer satisfaction
To provide products and services that satisfy customers, we promote ISEKI's product quality assurance by conducting:(1) Feedback system of customers' voices,(2) Quality assurance examination at each development step,(3) Backup system as the whole company.
To realize products that meet the expectation of customers in terms of safety and trust, we listen to the "real voices of customers"
and analyze the product quality in every step : product planning, development, design, production and after-sales service.
We elaborate the quality in the product planning, development and design phases, examine the manufacturing quality in the next
phase, and evaluate the adequacy of the products in the final phase. Likewise, to provide the products that meet the trust ofcustomers, we perform consistent product quality assurance activities.
Feedback of customers' voices

AGRISUPPORT wagon<

Approach to the services

ISEKI's product quality assurance

Product
planning>

After-sales service
Delivery of
product

Examination of quality assurance at each step

Elaboration of product quality
Verification of
manufacturing quality

Delivery ofsafety andtrust

Evaluation of
product adequacy

Real voices of customers(opinions and requests)< Handling recall >If any problem occurred to products used by customers
and we find it necessary to take improvement measures,
we check and repair the products immediately, giving
first priority to the safety of the customer.
When we launch a recall, we give notice and report to theorganizations concerned (*1) and disclose the informationon the website of ISEKI CO., LTD. to draw attention ofcustomers and provide them with information.

“Before-sales” service

Ɣ Safety training
We have safety trainings at our sales subsidiaries so that thecustomers can use our product safely.

Ɣ Instruction on delivery
According to our check sheet, we offer delivery instructions to thecustomer at the delivery time.

After sales service

Note

Notices on reporting of recall are posted on our website.
Please visit the following address:

http://www.iseki.co.jp/news<Numbers of recalls over years (*2)>
FY

2010

2011

2012

2013

2014

2015

Recalls

6

2

3

3

7

3

*1 Ministry of Land, Infrastructure and Transport, Ministry of Agriculture,
Forestry and Fisheries, Ministry of Economy, Trade and Industry, etc.
*2 Number of recalls reported to the Ministry of Land, Infrastructure andTransport< Customer consulting service and inquiries >Ɣ Troubleshooting
As for the problems on our customer’s machinery, our staff from the sales offices and service centers will solve
them immediately.

Ɣ Inspection and maintenanceUp on the customers’ request, we will provide the inspection and maintenance so that they can use our product without any
anxiety in the next season.

Ɣ Inquiry after conditions
We inquire after the conditions of new or repaired products after the start of use.

At our Training Center in Tsukubamirai city, Ibaraki prefecture, we
regularly run courses to the service staff to improve their technical skills.

Manufacturing

Consistent product quality assurance activities

In order for the customers to use our products "securely" and "safely," ISEKI Group is engaged in the service activities.

Internal training

Development& design<Number of people who obtained the national
license of agricultural machinery mechanic>
1,316 people in and before 2015
LicenseFirst class
Second class

Number of people
668
648

Inquiry services
In the "Contact Us" page of the website of ISEKI CO., LTD., we welcome inquiries from customers by e-mail concerning the
topics listed below.Please visit the following adress for inquiries:

http://www.iseki.co.jp/contact(1) Products(2) Company in general(3) Investor information(4) Our environmental initiatives, etc. Please visit thefollowing address for inquiries:<Number of inquiries in 2015: Approx. 740 in total>
Subject
Ratio Number of inquiries
Tractors
195
26％
Tillers and high clearance multipurpose vehicles 11％
81
Rice transplanters
85
12％Combine Harvesters
73
10％
Manuals, etc.
63
9％Others239
33％Inquiries can be received both via e-mail and telephone. Each of the departments in charge will reply to them.
As for the frequently asked questions, we are improving the information on the corporate website for customers to quickly refer to.

Together with the people in community
Sociality report< Exchange with communities and volunteer activities >To make people get better understanding of food, agriculture and agricultural machinery, we offer exhibitions
actively at local events. Shown below are how we have relationships with community and do social contribution
activities through the use of IDGs.

< Communication through ISEKI Dream Gallery >We established exhibition halls called "ISEKI Dream Gallery" (IDG) in manufacturing companies in Matsuyama, Kumamoto andNiigata. The IDGs were built to communicate with elementary and junior high school students visiting there for social studies or foodeducation, as well as visitors and people in the community. IDGs focus on the "history of foundation" of the company and"manufacturing and technology" of the agricultural machinery. They also exhibit and describe our approaches to "the future farming."ƔParticipate and sponsor events
Farmers and Kids Festa 2015
(Chiyoda-ku, Tokyo)

Food in Hometown & Food in Japan
National Festival (Shibuya-ku, Tokyo)

Ehime, Matsuyama Sangyo Festival- Sugoi-Mono Exhibition 2015 - (Matsuyama city, Ehime)ƔISEKI Dream Gallery (Matsuyama) renewal to offer a new " rice transplanting game"!
ISEKI Dream Gallery MATSUYAMA is located next to the ISEKI Matsuyama MFG. Co., Ltd. It offers a "3-Step Tour," including IDG
and factory tour, to show visitors the manufacturing process of tractors. Since its opening in 2014, it have welcome 6,000 visitors every
year. Based on the opinions and requests, three booths were renovated in February 2016.
Advanced technology and
ICT section

Learn the process of making ricethrough our original game

Exhibition of an all-round cultivation
system of vegetable farming

Exhibition of our flagship machinery & virtual
experience of advanced technologies"Rice transplanting game" to learn about
the process with fun

Full lineup of vegetable growing machinery

Tsubame Sanjo Factory Festival(Tsubame and Sanjo cities, Niigata)If you would like to visit an IDG, see the corporate website for a reservation and other information.

ƔISEKI Dream Gallery KUMAMOTO (Kumamoto) ƔISEKI Dream Gallery NIIGATA (Niigata)
Location: Next to the ISEKI Kumamoto MFG. Co., Ltd. (Mashiki
town, Kumamoto prefecture)
Features: Exhibition of "manufacturing and technologies" of combine
harvesters; factory tour also available (Opened in October, 2014)ƔInteract with the local community

Location: Next to Niigata MFG. Co., Ltd. (Sanjo city, Niigata
prefecture)
Features: Exhibition focused on rice transplanters and vegetabletransplanters; factory tour also available (Opened in April 2015)

IDG Visit and Exchange Festival(Nishi Osaki, Sanjo city, Niigata)Thanks giving festival for customers(Kamphaeng Phet province, central Thailand)ƔVolunteer activities
Shirakawa Day (cleaning activities)(Kumamoto city, Kumamoto)

Shigenobu River Cleanup Campaign

Rice transplanting event with children(Tanokubo-ku, Toon city, Ehime) - ISEKI Shigenobu -- ISEKI Kyushu, ISEKI Labor Union, and ISEKI Kumamoto MFG. Co., Ltd. -< Social contribution activities - for supporting children who will bear the future >Kids' seminars

Introduction of Japanese agriculture in classroom

Accepting interns- Iyo Bank and ISEKI Matsuyama MFG. Co., Ltd. -- ISEKI Kumamoto MFG. Co., Ltd. -- Development & Production Division of ISEKI & Co., Ltd. -20th Sanae National Children's Drawing Contest
We host this contest annually and have received more than
23,000 drawings in cumulative total.

We received 82 works fromelementary and junior highschools as well as boys andgirls invention club in theprefecture. Special awards andprizes, including ISEKI Award,
were given to 35 works in total.
We participate in the reviewing
process of this exhibit and grant
ISEKI Award every year.

National
Best
Award"Food education" by growing “bucket paddy rice”(Learning about the process of growing rice)(Niihama city, Ehime prefecture)- ISEKI Matsuyama MFG. Co., Ltd. -Host " Manufacturing education" festival

Company tour for female science students- ISEKI Matsuyama MFG. Co., Ltd. -- ISEKI Matsuyama MFG. Co., Ltd. -74th Ehime Prefecture Children's
Exhibit of Invention and Devices- ISEKI Award winner -ISEKI Award winner:"Tableware that facilitates
scooping of food"Organized by Women's Future Development Center, Organization
for Diversity Management Female students of the Department of
Science and Engineering, Ehime University visited the factory.

FY2015 National Best Award winner:"Agriculture by Whole Family"
Suzuka Horigome, 10 years old (Miyagi, ISEKI Tohoku)

The shapes of bowls and lids andthe angles of spoons are designed
to allow a user to easily scoop foodwith one hand without dropping it.

For shareholders and investors

Together with the employees

Sociality reportSociality report

To be a good corporate citizen, we will continue to enhance IR activities by holding general shareholders' meetings
and quarterly briefing sessions on financial results.
As one of our responsibilities, we are committed to disclosing information to shareholders and investors in ourreports and corporate website in a precise and timely manner.

We strive to provide the Group employees with appropriate treatment and opportunities for them to perform actively and strive to create
a comfortable working environment so that they can make the most out of life. The priority issues in the human resource strategies areto support the carrier formation of employees, develop wide-ranging human resources, and make the most of female human resources.
The company and the employees will collaborate with each other to realize a community that grows constantly in affluence.
Recruitment and human resource development

Offering information on by various reports and corporate website

ISEKI Group recruits people based on their personalities and abilities. Above all, we focus on recruiting those
who can actively contribute to the full-scale development of global strategies to increase overseas sales. To
fulfill such criteria, we also positively work on mid-carrier recruitment of people with abilities and precious
experience. In addition to the trainings divided by their skills and occupation, we offer our employees various
programs, such as correspondence or foreign language courses and opportunities to study abroad. We also
introduce the "Meister" system so that accumulated experience and skills can be smoothly passed on.

"All ISEKI Group Technical Skills Contest"
In October 2015, the "All ISEKI Group Technical Skills
Contest" was held to improve the technical skills of workers
at manufacturing sites and to develop young workforce. 30
young employees including those from other countries
participated and competed in five categories: "NC lathe,""fineness of machine assembly finishing," and "welding" etc.

Work-life balance initiative
We introduced the following measures to ensure thateach employee can lead a more fulfilling life by
maintaining a work-life balance.
(1) Fixed work location recruitment(2) Flextime system (Not all departments adopted)(3) Implementation of "no-overtime" day, etc.

Prohibition of discriminatory treatment

Together with the suppliers
ISEKI Group is committed to nurturing human resources; those who can establish a supply chain and handle
business issues from a global point of view. With this in mind, we work together with the suppliers to draw out
maximum performance from the human resources and expand the business further.
Approach to the human resource development
As the base of human resource development, we provide
various trainings at our internal facilities. To expand anddevelop the business continuously with the suppliers, weare holding variety of ability development programs.
Location

Training

Enhancement of sales andTraining Center(Tsukubamirai city, Ibaraki prefecture) service skills etc.
ISEKI TechnicalTraining Center(Matsuyama city, Ehime Prefecture)

Improvement of manufacturing
skills etc.

Advanced farm businessDream Agricultural
management & techniques,
Research Institute
Human resource development(Tsukubamirai city, Ibaraki prefecture)of group employees

Initiatives for suppliers (incl. IR meeting)
To expand and develop business together, we hold IR meetingsand company tours for the suppliers. As well as providing
business support, we offer information through various meetingsand on our corporate website in a transparent manner.
In terms of preserving environment,
we suppose it essential to corporate Certified Green Suppliers ratiowith the suppliers, and we request
their understanding and cooperation
Non-certified
to attain the "ISEKI Group Green
Certified
Supply Guidelines". Regarding the
suppliers superior in environmental
activities, we ask them to be our"Certified Green Suppliers."

ISEKI Group observes the labor law and works onappropriate
employment
management,
avoiding
discriminatory treatment based on nationality, race, religion,sex, disability, etc. and distribute the "Code of EthicalBehavior," which describes these points, to all employees.
We educate and instruct the employees to be careful about
their language and behavior on a daily bases.
As a whistle-blower system, we have established the"Ethical Hotline" through which they can directly inform
personnel department and external corporate lawyers with
their human rights and privacy highly protected.

Occupational safety and health
Setting up "a healthy and safe workplace" as the code of
conduct, we conduct safety and health check according
to the working environments of each group company. We
try to enhance the awareness of the workers at
manufacturing sites to keep up "zero industrial accident"
and to reduce accident risks completely.

Diversity initiative
As a part of management strategy, we promote global
strategies and diversity in human resources.
(1) Recruit foreign nationals continuously(2) Employ more female workers and promote toappointment of women in management(3) Promote physically-challenged people employment
We provide the employees having ability and motivation withappropriate treatment and opportunities so that they can
perform actively. We also support their carrier formation.
Gender ratios of employees

Gender ratios of managers
Male
FemaleNow: Low ratio of women

Now: Low ratio of women in the management

Initiatives regarding the Act of Promotion of Women's
Participation and Advancement in the Workplace (April 2016)
Our action plan and targets for utilizing female
human resources are follows;(1) At least 20% of all the new employees
will be female employees.
(2) At least 10% of all the manager
candidates will be female employees
In particular, although its number and ratio is low atpresent, we intend to recruit more women as engineers
and take in new ideas from female point of view into product development.
In July 2015, in a special authorization system named “Kurumin”,runby the Ministry of Health, Labour and Welfare, we were certified as acompany that promotes child-care assistance. In order to employ
more female workers, we are making efforts not only to appeal our
activities to the market but to hold trainings for the group companies,
executives and managers for them to get better understandings.
Women in new employees ratio

Female employees ratio by job grade<Statistics of industrial accidents>
Severity rate (From 2011 to 2015)

Male
FemaleNow: Target achieved in 2016

Corporate Manag- Superin- Assistant Senior Interme- Juniorofficers
ers tendent superindiateclass tendent class

Now: Low female ratio in the superintendents
class, manager candidates.

Ratio among general employees

Ratio among engineers
Male
Female*Severity rate: Number of work days lost per 1,000 working hours*Target: ISEKI & Co., Ltd. and its four factories in Japan*Period: Calculated by twelve-month data from April 2015 toMarch 2016 for comparison with the past data

Now: Lower female ratio than general employees

ISEKI group environmental management

Mid-term and long-term environmental targets and FY2015 results

Environmental report

Environmental report

ISEKI Group has walked together with agriculture since its establishment and operated on the axis of "agriculture andagricultural machinery." In environmental management, too, we set up the environmental concept of promoting
environmental preservation activities to contribute to the formation of a continuously growing society in harmony with nature,society and other business entities. We establish the "Environmental Conduct Guidelines," with which the entire ISEKI Group
constructs the management system and make middle- and long-term targets, on which all employees work together.

ISEKI Group made the mid-term and long-term environmental targets from the FY ended Mar.2011 to the FY ended Dec.2015.
Hereby, we report the results of our major activities in the FY ended Dec.2015. We are going to establish new targets up to 2020.
<About the period of report> The fiscal year end of ISEKI Group changed in FY 2015 ending December 31 instead of March 31.
So, nine-month results from April 1 to December 31 are included in Therefore the report.

1. Mid-term and long-term targets, FY2015 results and future targets< Environmental conduct guidelines >< Outline of management >ISEKI Group promotes environmental activities in each district in accordance with the environmental targets decided in the Director'sOperation Committee Each district follows its own plan and the progress is managed by the Environmental Planning Group Meeting.
The activity records and future actions are reported to the Director's Operation Committee.
[Environmental Management System]
President

To realize a low-carbon
emission society

4. Environment-friendly logistics
5. Biodiversity action
6. Environmental education and information disclosure

To restrain the useof manufacturingresources

1. Environment-friendly development activities
2. Environment-friendly manufacturing activities
3. Environment-friendly business activities in the office

Item

Per production unit

93％

Total volume

93％

Per transportation
unit(10,000 ton-km)

102％

At least 5% reduction per
production unit from the averageamount for the period between
FY2008 and FY2010

Per production unit

115％

Total volume

83％

Reduction of
volume ofwater used

At least 5% reduction per production
unit from the average amountfor the period between
FY2008 and FY2010

Per production unit

83％

Total volume

270％

Reduction of
final volume
of wastes

At least 25% reduction per production
unit from the average amountfor the period between
FY2008 and FY2010

Per production unit

269％

Total volume

107％

Reduction of usedvolume of chemical
substances subject
to PRTR law

At least 20% reduction per production
unit from the average amountfor the period between
FY2008 and FY2010

Per production unit

106％

Total volume

93％

Reduction ofenergy-generated
CO2 emission

At least 10% reduction the averageamount for the period between
FY2008 and FY2010

Reduction ofenergy-generated
CO2 emissions
during transportaion

At least 5% reduction pertransportation unit (10,000 ton-km)
from the average amount for theperiod between FY2008 and FY2010

Reduction of
total material input

Tokyo Headquarters

Matsuyama (Tobe) Office
General Division Manager ofDevelopment &Production Division
Environment Control Manager

Matsuyama (Wake) Office

Matsuyama (Shigenobu) Office

Kumamoto OfficeNiigata OfficeDirector in charge of General
Affairs department
Environment Control Manager

President of ISEKI-Matsuyama MFG.
President of ISEKI-Houei MFG.
Environment Control Manager

President of ISEKI-Shigenobu
MFG.
Environment Control Manager

President of ISEKI-Kumamoto
MFG.
Environment Control Manager

CEO of ISEKI-Niigata MFG.
Environment Control
Manager

Environment
Promotion Council

Environment
Promotion Council

Environmental
Management Committee

Environmental
Management Committee

Environmental
Management Committee

Environmental
Management Committee

Environmental
Management Committee

Comments from the environment control manager
Hiroaki Kurokawa, General Manager of Production

Comments from the environment control manager
Toshio Endo, General Manager of Production

Engineering Department, ISEKI-Matsuyama MFG.

Engineering Department, ISEKI-Kumamoto MFG.

"Seto Inland Sea has incomparable beauty in theworld; Green islands are scattered in the blue sea
under a clear sky." To protect this precious naturalenvironment, all members of the factory are working
together to reduce environmental burdens andpromote business activities that contribute to the
local community in harmony with the environment.

To preserve environmental resources such as
beautiful nature, countryside, and water of the
Kumamoto prefecture in Aso and Amakusa district,
we are striving to reduce hazardous materials thatmight pollute the environment and promoting
contribution to the local community and carrying out
environment-friendly business activities.

< Domestic sales subsidiaries and overseas locations >All domestic sales subsidiaries have acquired EA-21 certification and are actively involved in environmental preservation activities, such as
reduction of environmental burdens. In overseas locations, we have started carrying out environmental preservation activities, including
acquisition of EMS certification. In January 2016, the Xiangyang Factory of Dongfeng ISEKI Agricultural Machinery Co., Ltd., a large production
base in China, acquired ISO14001 certification. Other overseas locations are also working to acquire certification by the end of 2016.
(Planned) N.V. ISEKI Europe S.A.

ISEKI Hokkaido Co., Ltd.

[ISO14001 certification acquisition]
Xiangyang Factory of Dongfeng ISEKI Agricultural Machinery Co., Ltd.

Sales subsidiary headquarter

To restrain the useof toxic chemical
substances

Sales Subsidiaries
President of subsidiaries
Environment Control
Manager

Evaluation

Future targets up to 2020
11% reduction per production unit
from the result of FY2013;
1.57% reduction per year

10.5% reduction per transportation
unit (10,000 ton-km) from the resultof FY2013; 1.5% reduction per year

114％

10.5% reduction per production
unit from the result of FY2013;
1.5% reduction per year

51% reduction per production
unit from the result of FY2013;
7.3% reduction per year

14% reduction per production
unit from the result of FY2013;
2% reduction per year

19.6% reduction per production
unit from the result of FY2013;
2.8% reduction per year

2. Challenges of business activities, FY2015 results, and future issues
The results of major activities in FY2015 are described below.
Category
Environmental
Management

Product Assessment Committee

Product development
and service

Environmental Planning Group Meeting

To build a recyclingoriented society

Directors’ Operation Committee
Environmental Control Section

FY2015 results

Mid-term & long-term environmental targets

Items

FY2015 results

Quality improvement of environmental management system

Expanded the range of the target among the non-production bases in Japanand promoted ISO14001 certification acquisition among overseas bases

Implementation of environmental education

Promoted environmental education

Responses to stakeholders

Collected the opinions and made various opportunities to have dialogs withstakeholders

Prohibition, reduction and restraint of use of toxic
substances included in procured parts

Offered "certificates" to the suppliers who are active in environmental initiatives

Development of products to reduce environmental burdens
Expansion of product assessments and execution of
LCA evaluation
Provision of information contributing to environmental
preservation
Development of products in consideration of biodiversity

Expanded the lineup of "eco-products" models through promoting theenvironment conscious design with a product assessment system.
Opened the "ISEKI high-tech green house to demonstrate our plant growth
diagnosis devices.
Provided information about environmental preservation at the corporate website
and product manuals

Having investigated these results and discussed the departments involved, we defined priority issues to be addressed for FY2020.

Sales subsidiary branch

Future issues to be addressed by FY2020
Gunma ISEKI Sales Co., Ltd.

To expand the application of EMS to the overseas locations

ISEKI Shin-tsu Co., Ltd.
ISEKI Tohoku
Co., Ltd.

ISEKI Hokuriku Co., Ltd.
ISEKI Kansai Co., Ltd.

(Planned) Changzhou Factory of Dongfeng
ISEKI Agricultural Machinery Co., Ltd.

ISEKI Kanto Co., Ltd.

To enhance communication with stakeholders
To promote green procurement in collaboration with the suppliers

ISEKI Chugoku
Co., Ltd.

To supply safe and secure products, ensure product quality, and promote the environment-conscious designing

ISEKI Kyushu
Co., Ltd.
ISEKI Tokai Co., Ltd.

To increase the product lineup certified as "eco-products" to achieve 25% of all the domestic sales in 2017

(Planned) ISEKI France S.A.S

Mie ISEKI Sales Co., Ltd.
ISEKI Shikoku Co., Ltd.

(Planned) PT.ISEKI Indonesia

Note: The achievement ratios of The results of FY2015 listedon this page are based on the nine –month results from
April to December.

Business activities and environmental burdens

Environmental risk management

Environmental report

Environmental report[Eco balance][Actions to comply with Antipollution Laws]< Establishment of self-directed standards and management in the company >The four ISEKI group factories in Japan use materials like fuel, electricity, water and other raw materials in the processof production, and discharge chemical substances and industrial wastes subject to carbon dioxide (CO2) and PRTR law.
To continue business activities with less environmental burdens, we always check the volume of materials used for
production (INPUT) and discharged volume of chemical substances and industrial wastes (OUTPUT) to reduce
discharging such chemical substances and industrial wastes.

The four ISEKI group factories in Japan set forth and applied more stringent self-directed control standard values
than those set forth in the environment-related laws and regulations. As shown in the table below, we met all the
self-directed control standards in FY2015, making progress to reduce environmental pollution.

Unit

Measured item

Energy469,000GJ

Electricity
Kerosene
Heavy oil
Butane gas
City gas
Gasoline
Light oil

Atmosphere

Business activities

39,900,000kWh
265kƐ
350kƐ
365,000m3
94,000m341kƐ
18kƐDevelopment• Promotion of environmentconscious design

Air

Procurement• Green procurement

Discharge water
Discharge volume
BOD

Water

156,000m3

Production

Tap water
Ground Water

60,000m3
97,000m3• Promotion of energy saving• Promotion of effective
utilization of resources• Reduction of final volume ofwastes• Reduction of toxic chemical
substances• Reduction of volume of waterused

Chemical substances
Chemical substances subject to PRTR law 85t
Substances subject to PRTR law★ Major products:
Tractors, tillers,
combine harvesters,
rice transplanters, engines,
dryers, rice hullers,
vegetable harvestingmachines, etc.

Total substances
Main raw materials

20,000t
CO2 emission
Soot and dust emission 401kg
NOx emission
1,120kƐ
SOx emission
2,570kƐ

Water
quality

37,400t

Volume of suspended substances (SS)80t

Transported volume 19,200,000 ton-km
CO2 emission
2,600t

40

5.0

90

45

25

8

2

60

30

5.7

2

5.0

2.4

Less than 0.5

5.0

4.0

0.11

Particulate

g/m3N

0.30

0.18

Less than 0.01

0.30

0.08

Less than 0.01

0.20

0.10

0.01

Nitrogen oxide

ppm

260

91

63

250

200

23

230

50

16

Particulate (electric casting melt furnace)

g/m3N

0.10

0.08

0.03

í

í
í
í
í
í
–: Shows standard N/A or not applicable machines

Measurement frequency
Measured item

Industrial effluent

Water quality

ISEKI-Matsuyama & ISEKI-Houei MFG. Co., Ltd.

ISEKI-Kumamoto MFG. Co., Ltd.

ISEKI-Niigata MFG. Co., Ltd.

Once a year

Once a year

Once a month

Twice a year––-

Twice a year

Twice a year

Twice a year

Noise

Twice a year

Once a year

Once a year

Vibration

Twice a year

–

–

Air

Lot border line–: Shows standard N/A or not applicable machines

Environmental accounting
To be used by customers

In order to make management decisions on environmental preservation and to provide guidelines for evaluation of our social activities, ISEKI
Group adopts the environmental accounting in which we sum up the investments and expenses for the environmental preservation activities.
The amount invested for environmental reservation costs (pollution prevention, environmental preservation, and resource recycling
costs) in FY2015 (from April to December 2015) was 384 million JPY. The total amount of expenses was 304 million JPY in which we
included the investments into diesel engine gas emission control and fuel efficiency improvement to comply with the laws andregulations of Europe, U.S., Southeast Asia and Japan★Environmental burden integrated index: The lower

Environmental preservation cost

the index, the smaller the environmental burdens.

Category

Major programs(Index)Integrated
coefficient
1

2005
2015
Actual Integrated Actual Integrated
value (t)valuevalue (t)value
34,60034,60026,723

26,723239

174

41,500106

25,300

3

2,750

8,260

221

664

Environmental burden integrated
values in total

í84,300í

52,700Eco-efficiency

í

83.3

í

115

í

100

í

63

CO2 emission volume
Non-methane VOC emission
and displacement volume
landfilled waste volume

Environmental burden integrated
values (2005 as reference year)
Eco-efficiency index(2005 as reference year)

í

100

í

138

Environmental burden integration and eco-efficiency(FY)

Eco-efficiency index & environmental burden
integrated index (100 in FY2005)

Note: The FY2015 indexes listed in this section are based on thenine-month result from April to December and distributed
proportionally to twelve months.

Details of effect

3.0
33.9

(2) Reduction of environmental burden substances

Sewage treatment

1.2

50.7

(3) Reduction of energy consumption

2) Environmental preservation cost Inverter installation

275

1.3

Waste treatment

0.0

23.5

(2) Cost required at previous and later stages Green purchasing

0.0

15.6

81.1

41.2

(4) Research and development cost Compliance with emission gas regulations
Cleaning activity in the communities,(5) Community activity costsocial contribution activities

26.4

159

0.0

12.5

(6) Environment recovery cost

0.0

0.0

384

304

1) Pollution prevention cost3) Resource recycling cost

Maintenance of environmental
management system

–
Total

Coverage: ISEKI-Matsuyama, ISEKI-Kumamoto, ISEKI-Niigata, andISEKI-Houei MFG. Co., Ltd. and Tobe office

Note: The results of FY2015 listed on this page are based on thenine-month result from April to December.

Amount (in mil. JPY)

(1) Reduction of the volume of various resources to be consumed

75.5(3) Control activity costEco-efficiency index
Environmental burden integrated index

Economic effects resulting from the environment preservation measures
Amount ofinvestment Expenses(in mil. JPY) (in mil. JPY)
276

(1) Cost spent in the business segment
Breakdown

Item

0.7

4

Machine, equipment,
and place

It is important to improve eco-efficiency to realize a sustainable society. Although eco-efficiency is usually calculated by subtracting
environmental burdens from the value of a product or service, we adopt our own formula: "eco-efficiency production
volume/environmental burdens" and evaluate with the eco-efficiency index and environmental burden integrated index. Comparedwith the indexes of 100 in FY2005, we improved and achieved eco-efficiency index to be 138 and environmental burden integrated
index improvement to be 63 in FY2015.

more efficient.

200

87

< Frequency of environment data measurement >[Eco efficiency]★Eco-efficiency index: The higher, the

32

500

30

Product transportation to distributors

Note: The results of FY2015 listed in this section are based
on r the nine-month result from April to December.

500

600

ppm

BoilerTotal volume of industrial wastes 7,850t
Recycled volume7,140tReduction volume
543t
Final disposal volume
166t

600

n-hexane (Mineral oil)

Casting melt furnace
Industrial wastes

mg/L

Volume of biochemical oxygen demand (BOD)

82,000m3
4,360kg

Chemical substances
Chemical substances
subject to PRTR law
Discharge/transfer volume

ISEKI-Matsuyama &ISEKI-Kumamoto
ISEKI-Niigata MFG. Co., Ltd.
ISEKI-Houei MFG. Co., Ltd.
MFG. Co., Ltd.
Regulatory Self-directed Result in Regulatory Self-directed Result in Regulatory Self-directed Result incontrol
control
control
standards standards
2015
standards standards
2015
standards standards
2015

Total

2.9
39.8

The environment preservation measures have two typesof effects: Economic and physical (reduction) effects.
The effects in FY2015 resulted from recycling of wastes,
streamlining of painting methods, use of energy-saving
machines, use of processing machines equipped withinverters, etc.

Reduction of environmental burdens
Environmental report
We have four manufacturing sites in Japan: ISEKI-Matsuyama, ISEKI-Kumamoto, ISEKI-Niigata, and ISEKI-Houei
MFG. Co., Ltd, and three counterparts in overseas: Changzhou and Xiangyang Factories of Dongfeng ISEKI in
China and PT. ISEKI INDONESIA in Indonesia.
The results of FY2015, their reasons, and future actions are described below.

[Reduction of CO2 emissions](ton)

Factories in Japan
Volume of energy-generated CO2
emissions and per-production volume<Factories in Japan>
The target was not achieved in FY2015. We will further promote to replace into
more energy-saving equipment and implement energy-saving improvement
activities at the manufacturing floor.

(t-CO2/100
million yen)

1997
Total volume(t-CO2)Per-production
volume (t-CO2/
100 million yen)

2008

2009

2010

í

2013

2014

Target27,500 26,900 18,700
34,500 29,800 28,600 29,300 29,200 Result
30,300 30,200 20,000
Achievement rate
93%
91%
89%
Target
40.9
43.5
42.6
50.0
47.2
44.1
44.0
43.0
43.3
48.4
46.3 Result
Achievement rate
93%
99%
99%

(ton)

Factories in overseas
Volume of energy-generated CO2
emissions and per-production volume

1997

2008

2009

2010

Total volume(10,000 ton)

58.2

42.4

34.2

35.5

Per-production
volume (ton/
100 million yen)

844

617

565

588

Average ofresults of
3 years

Target37.4 Result
Achievement rate
Target590 Result
Achievement rate

Per-production
volume2008 2009

Average of2010 results of
3 years

10,000 ton-km
Total volume (t-CO2)

2,990 2,920 2,980
4,740 3,920 4,180

Rate(t-CO2/10,000 ton-km)

1.59

1.34

1.40

Modal shift rate

31%

46%

43%

Total volume of materials used at the four factories in Japan
We achieved the target in FY2015. We will set forth higher reduction targets topromote the reduction activities.

í

2013

2014

2015

í
í

í
3,350 2,770 1,920
í
4,030 3,660 2,600
Target1.40 1.39 1.38
1.21 1.32 1.35
1.45 Result
Achievement rate 116% 105% 102%í
í
52% 52% 49%

2001

2008

2009

2010

Total volume
(ton)

157

165

145

149

Per-production
volume (ton/
100 million yen)

0.277

0.240

0.240

0.245

Average ofresults of
3 years(ton)

Factories in Japan
Total volume of material used for
production and per-production volume(ton)

Factories in overseas(ton/100Volume of water used/per-production volume million yen)
Volume of water used
Per-production
volume(ton)

FY endied
December
2015

2013

2014

135
156
86%
0.213
0.226
94%

92
128
86
144
89% 107%0.203 0.200
0.205 0.189
99% 106%

Factories in Japan
Volume of chemical substances used/per-production volume(ton/100
million yen)

Volume of waterused
Per-production
volume[Reduction of final volume of wastes]<Factories in Japan>
We achieved the target in FY2015 because the ISEKI-Matsuyama MFG. restarted
recycling of molding sand in the latter half of FY2014. We will further try to improve
the recycling process.

í

2013

2014

FY endied
December
2015

Total volume
Per-production volume(ton)

Factories in Japan
Final disposed volume/
per-production volume(ton/100
million yen)

Volume ofwastesPer-production
volumeTotal volume of wastes at the four factories in Japan
2008

2009

2010

Average ofresults of
3 years

í

2013

í

í

10,700 10,900 7,850

ííTarget(ton/100
million yen)

58,400 57,800 42,900
Target72,100 66,000 56,900 57,600 60,200 Result
57,600 57,500 37,400
Achievement rate 101% 100% 115%
Target
91.3
93.6
92.2
103
93.9
81.9
82.3
83.7
96.1
95.2
95.1 Result
Achievement rate 110% 111% 114%

Note: The results of FY2015 listed on this page for the factories in Japanare based on the nine-month result from April to December.

í

Target153 Result
Achievement rate
Target0.242 Result
Achievement rate

Total volume (t) 11,900 10,400 8,990 9,390
Industrial
Per-production volume
17.3
14.8
15.5
15.1
wastes(t/100 million yen)

Total volume of material used for production at four factories in Japan

Per-production
volume (ton/
100 million yen)

13.1
15.6
83%
285
344
83%

Volume of use of chemical substances subject to PRTR law at four factories in Japan[Reduction of total material input]

Total volume
(ton)

20.9
24.8
85%
330
353
94%

FY endied
December2015

We achieved the target in FY2015. We will reconsider the use of paint solvents inall the factories to further promote improvement activities.

1997

Average ofresults of
3 years

25.1
29.4
85%
395
427
92%

2014

[Reduction of volume of chemical substances used]

Emission

Note: Modal shift rate = (railway ton-km + sea freight ton-km)/total ton-km

2010

2013

Volume of energy-generated CO2 emissions in product distribution in Japan

We achieved the target in FY2015. We will further
promote to improve load efficiency and modal shift to
reduce CO2 emissions.

2009

í

(t-CO2/100
million yen)

[Reduction of CO2 emissions in product distribution]

2008

Per-production volume<Factories in overseas>
The volume of water increased due to an expansion of equipment and an increasein the number of factories.

<Factories overseas>
At the Xiangyang Factory of Dongfeng ISEKI in China, new production lines wereadditionally constructed in FY2015, resulting in a significant increase in the CO2
emissions. To reduce the total amount of CO2 emissions, we will apply theenergy-saving approaches in Japan to the overseas factories.

2005

Volume of water used

Total volume of water used at the four factories in Japan

Per-production volume

FY endied
December
2015

Factories in Japan(ton/100Volume of water used/per-production volume million yen)

<Factories in Japan>
In FY2015, we tried to reduce the volume of water by replacing paint facility thecooling equipment, and improving sewage treatment at the Kumamoto factory,.
However, we t we couldn’t achieve the target because these were not introduced
until the middle of a fiscal year, in August. We will further promote the reduction
activities on the manufacturing floor.

Emission

Volume of energy-generated CO2 emissions at four factories in Japan
Average ofresults of
3 years[Reduction of volume of water used](10,000 ton)Final
volume ofwastesTotal volume (t)Per-production volume(t/100 million yen)

Reduction volume (t)Recycled volume of wastes (t)Final disposal rate (%)
Recycling rate(%)

4,390

6.36

754

1.10

859

1.42

FY endied2014 December
2015

15.5

17.3

637
676
3,090 1,030

448
166

15.6

774

796 Result

Achievement
rate

22%

62% 270%

1.28

Target1.26 Result

1.07
4.49
24%

1.01
1.0
1.47
0.4
69% 269%

1,260
483
553
571
6,279 9,050 7,650 8,060
37
9.6
8.2
7.3
53
85
86
87

Achievement
rate

í
í
í
í

í
í
í
í

636
717
543
6,990 9,150 7,141
9.5
29
2.1
84
65
91

(ton)

Factories in overseas
Total volume of waste/
per-production volume(ton/100
million yen)

Volume ofwastesPer-production
volume<Factories overseas>
After full-fledged production started at the factories overseas, the amount ofwastes per-production volume dropped. We will further work on recycling andwaste reduction through continuous control of them.

Note: The FY2013 results on this page are for the Changzhou
and Xiangyang Factories of Dongfeng ISEKI in China.

Note: The results of FY2015 listed on this page for the factories in Japanare based on the nine-month result from April to December.

Note: The FY2013 results listed on this page are for the Changzhou
and Xiangyang Factories of Dongfeng ISEKI in China.

Examples of reducing environmental burdens

Approaches to design for environment

Environmental report

Environmental report< Initiative for reducing environmental burdens with the use of water-based solutions in the honing process >ISEKI-Matsuyama MFG. replaced the equipment in the cylinder case production line and started using environmental
friendly water-based solutions in the honing process instead of an oil-based ones to reduce environmental burdens.
This change has led to a reduction of honing oil use, the occurrence of oil mist, and improved the working
environments. The change of honing oil has also allowed workers to measure the dimension of cylinders cases
during machining which improves the machining accuracy and reduce the machining loss.

[Annual reduction]• The volume of oil-based cutting fluid used
reduced: 1,190 L per year
• The cost of cutting fluid reduced:
350,000 yen per year

Initiative for reducing environmental burden, improving the quality, and cutting costs by updating the paint facilities>

ISEKI-Kumamoto MFG. Co., Ltd. upgraded the D line of the paint facilities. It introduced the latest ones to enhance
the painting quality and reduce the environmental burden.

The bio-decomposition of waste water from the painting booth significantly helped
reduce the cleaning cost of the booth and the burden of discharging waste water on
the premises.

2015

HFC330 HFC433

Eco-product

Dryer

GML25H 30H 35H 40H 45H

Super-eco-product

Electric tiller

KDC20 VAB235

Super-eco-product

Dryer

GHL50H・55H・60H・65H

Eco-product9.4

Ride-on rice transplanter

NP50 NP60 NP70 NP80 NP60D

Eco-product

Combine harvester

HFR463 HFR450

Eco-product––

Variable fertilizing ricetransplanter with soil sensor

NP80D

Super-eco-product

Tractor

NTA283･313･343･403･453･503･543･603

Eco-productEco-Unemaze-Kun

UBS series

Super-eco-product

12.7

2016

The soil sensors installed under the right and left auxiliary seedling frames measure
the distance to the soil and the depth is calculated based on how much the machine
itself sinks into the paddies.. Furthermore, the electric resistances provided by theelectrode sensor installed in the front wheels tell the fertility value of plowed soil.

Appropriate fertilizer application to prevent plant loading at the time of harvesting

NP80D, variable fertilizing rice transplanter with soil sensor

Certification as "super-eco-product"
This rice transplanter has been certified asa "super-eco-product" due to the functionsof reducing fertilizer and preventing plantlodging, which helps improve work efficiency.

< Initiative for NTA tractor series >Reduction of CO2 emissions due to reduction of LP gas used

The "NTA series," middle-sized tractors to support the farming industry, have been available since 2013. We brought
more environment-friendly new "NTA 3 series" into the market, which equip a new engine complying with the (Tier4) emission gas regulation in Japan and offer GREENMODE and AGRISUPPORT features.
The painting boothCompliance with the (Tier 4) emission gas regulations
In addition to the high torque, low fuel consumption, low noise, electronically-controlledcommon rail engine, the tractor equips the following:• Exhaust gas recirculation system (EGR),• Exhaust gas after-treatment equipment using oxidation catalysts (DOC), and• Diesel exhaust gas particulate filters (DPF).
These functions helped reduce nitrogen oxide (NOx) formation and realize clean
emission that complies with the emission regulations.

Water saving
The cooling equipment at the loading/unloading place for painting hangers waschanged from a water-cooled type to an air-cooled one, which reduced the volume
of water usage.

[Annual reduction]

Tractor NTA 603• The volume of CO2 emissions reduced: Approx. 11,800㎏-CO2• The water used reduced: Approx. 1,500t• The costs reduced: Approx. 500,000 yen
August 2015

2014

Eco-product rank

Combine harvester
4.3

The measurement results from the two sensors enable for the ricetransplanter to decrease the amount of fertilizer applied in real time to thepoints where soil is plowed deep and its fertility is high.
Appropriate fertilizer application ensures uniform growing of rice plants, and prevents
plant lodging caused by excessive fertilizer applied, which helps improve the work
efficiency at the time of harvesting. The acquired data can be plotted into farm maps.

Bio-decomposition technology[Introduction]

2013

Certified productMeasurement of depth of plowed soil and its fertility value

Grinding equipment(1) The combustion efficiency of gas burners significantly improved (5% reduction)(2) Upgraded the drying furnace from an open-hearth type to a mound-shaped one
with a high heat efficiency (95% reduction)(3) Replaced all 20 motors with high-efficiency ones(4) Introduced inverter-based speed control system to the places where the energy
saving effects are highApproval Ratio to Domestic
year
sales (%)

As the number of large-scale farmers and the size of the paddy fields is increasing, the demand for low-cost farming ismore and more growing. Our variable fertilizing rice transplanter automatically controls the amount of fertilizer
application according to the depth of plowed soil and its fertility, which reduces plant lodging at the time of harvesting.

June 2015<ŶStatus of certification of eco-products< Initiative for NP80D, variable fertilizing rice transplanter with soil sensor >[Introduction]

FMS line for manufacturing new cylinder cases

In order to promote environment-friendly
design, to reduce environmental burden andperform LCA evaluation at each stage of manufacturing, use, and disposal, we execute theproduct assessment at all product development
processes. We use an "eco-product certification system" only to give environmental labels
to the products that meet ISEKI's own environment-friendly evaluation standards. We try toprovide easy-to-understand information of certified products to customers and all stakeholders
increase the number of models of certified
products.

Certification as "eco-product"
LPG burner for the drying furnace

The NTA 3 series has been certified asan "eco-product" because it complies
with the (Tier 4) emission gas regulation
and achieves a high heat conductive
efficiency and a low fuel consumption.

Coping with energy saving work
GREENMODE is a feature that keeps fuel consumption low during light-duty work
as long as large engine torque is not required. Unnecessary torque is limited bycontrolling the fuel injection. The GREEN NAVI mode, displayed on the LCD monitor
can reduce more fuel consumption and realizes energy-saving work.

Approaches to preserve biodiversity

Green purchasing/Green procurement

Environmental report

Environmental report

Benefited from the blessings of nature that biodiversity produces, ISEKI Group provides business activities, products
and services that take biodiversity into consideration and contributes to the realization of sustainable society incooperation with various stakeholders, including the local communities.

<

Initiatives at ISEKI high-tech greenhouse>

In March 2016, we opened the ISEKI high-tech greenhouse at the premises of ISEKI-Matsuyama MFG.
(Umaki-cho, Matsuyama city, Ehime prefecture).
It is open to the general public including customers, local residents and children who visit
the factory as part of a social study. We will make full use of this facility toresearch and develop human resources, to show major models of
future agriculture as well as to demonstrate the industry's first"plant growth diagnosis devices."< Green purchasing initiative >We promote green purchasing to prioritize productswith environmental labels, such as eco marks andGPN (Green Purchase Network) standard products
when purchasing office supplies and electric andelectronic devices etc.. The total amount of green
purchasing of the entire ISEKI group was accounted
for 96% of the total purchase in FY2015.

Resource
extraction

Green purchasing ratio
Non-green
4%

Manufacturing

Distribution

Disposal

Green
96%

RecyclingUse &consumption< Green procurement initiative >ISEKI Group is promoting environmental-friendly design throughout the processes of product development. In
addition to the product quality, cost and delivery time, we established "Green Supply Guidelines" to develop products
in consideration of environmental preservation with our suppliers.

Advanced cultivation and environment control system, MINORI+• Automatic adjustment and control of optimal temperature, humidity,
optical environment, and carbon gas environment• Remote control from PCs and smartphones and device alarms via e-mailInternet

Plant growth diagnosis device• Measurement of plants’ photosynthesis and display ofmeasurement results in graphs• Analysis of photosynthesis and environmental information
about optimal environmental control to be accumulatedBattery-operated device without any exhaust gas emission• Minimum power consumption due to LED irradiation andauto power-on and off function

Monitoring available from anywhere<Result of green procurement in FY2015>
We have offered "Certified Green Suppliers" to approximately 300 suppliers who are superior in the environmental preservation
activities. 65% of the suppliers were certified as green suppliers, the amount of which accounted for 80% of all the transactions. ISEKI
Group will make efforts to improve the green procurement ratio.
Certified companies ratio

Ratio of transaction amount by the certified companies

ISEKI high-the green house

Pollination by black bumblebees• Use of black bumblebees that fly around in thegreenhouse to pollinate crops• No burden on the ecosystem because of indigenous
species; No permission required from the Ministry of theEnvironment under the Invasive Alien Species Act

Long-term multi-stage cultivation• Temperature control enables long-term cultivation for 10
months from September to June next year.
• Possible harvesting of about 30 clusters of tomatoes per plant• Training of tomatoes to a 4-meter height using higheaves to allow light to reach even the leaves in lower
layers and facilitate harvesting• Use of rail-traveling work trucks for laborsaving

Green Supplier Certificate

Black bumblebee

Mixing tank unit

Rock wool culture

Diagnosis using
LED irradiation

DBJ Environmental Rating

Ultraviolet disinfection device< The highest "DBJ Environmental Rating" ten times in a row >Nutrient solution system• Mixture of nutrient solution along with adjustment ofelectric conductivity and acidity and culture on rock wool
• Recycling of surplus nutrient solution after ultraviolet
disinfection to reduce water and fertilizer and minimize
environmental burdens

Training of tomato
plants to a height

Clean due to no use of soil

Raw
water

Solution

Recovery off solution

Eco

Every year, ISEKI & Co., Ltd. undergoes the audit for "DBJ Environmental Rating" by theDevelopment Bank of Japan (hereinafter "DBJ"), one of our main financial institutions. Again
in FY2015, we obtained the best rating, which proves "doing environment-friendly businessactivities progressively," ten times in a row.

Disinfected solution

Nutrient solution circulation system
Certificate
Note: The results of FY2015 listed on this page are calculated
from the nine-month result from April to December.

Environmental performance of four factories
Environmental report

ISEKI-Matsuyama MFG. Co., Ltd.

< Company profile >ISEKI-Niigata MFG. Co., Ltd.

< Environmental data >< Company profile >< Environmental data >Wastes and final disposal rate
Address
Number of
Employees

Area

Wastes and final disposal rate

700 Umaki-cho, Matsuyama-shi, Ehime prefecture

Address
Number of
Employees

559 (As of December 31, 2015)
151,000m

2

Areahigh clearance multipurpose vehicles,
Major products Tractors,
lawnmowers, engines

3-12-23 Nishiosaki, Sanjo-shi, Niigata prefecture)204 (As at December 31, 2015)
29,000m2transplanters, rice hullers, vegetable
Major products Ricetransplanters, binders

Recycling volume
Reduction volume
Final volume of wastes
Final disposal rate

Volume of energy-generated
CO2 emissions andper-production volume(1,000 ton)

(ton/100
million yen)

(1,000 ton)

Volume of water used andper-production volume

Volume used
Per-production
volumeVolume of chemical substances (ton/100(ton) used and per-production volume million yen)

(ton/100
million yen)

Volume used
Per-production
volumeRecycling volume
Reduction volume
Final volume of wastes
Final disposal rate

Volume of energy-generated
CO2 emissions andper-production volume(ton)Volume used
Per-production
volumeAddress
Number of
Employees

Area

Volume of water used andper-production volume(ton/100
million yen)(ton)Volume of chemical substances (ton/100
used and per-production volume million yen)

Volume used
Per-production
volumeVolume used
Per-production
volume

ISEKI-Houei MFG. Co., Ltd.

< Environmental data >1400 Yasunaga, Mashiki-cho, Kamimashiki-gun,
Kumamoto prefecture(1,000 ton)

Volume used
Per-production
volume

ISEKI-Kumamoto MFG. Co., Ltd.

< Company profile >(ton/100
million yen)

< Company profile >< Environmental data >Wastes and final disposal rate

Wastes and final disposal rate
Address
Number of
Employees

261 (As at December 31, 2015)
217,000m2

Area

combine harvester, multi-crop
Major products Head-feeding
combine harvesters, carrot harvesters

878-1 Umaki-cho, Matsuyama-shi, Ehime prefecture
224 (As at December 31, 2015)
8,959m2

tillers, system rice cooker, vinegar
Major products Cultivators,
mixing device

Recycling volume
Reduction volume
Final volume of wastes
Final disposal rate

Volume of energy-generated
CO2 emissions andper-production volume(ton)(ton/100
million yen)

(1,000 ton)

Volume of water used andper-production volume

Volume used
Per-production
volumeNote: The results of FY2015 for the factories in Japan are basedon the nine-month result from April to December.

(ton/100
million yen)

Volume of chemical substances (ton/100(ton) used and per-production volume million yen)

Volume used
Per-production
volumeRecycling volume
Reduction volume
Final volume of wastes
Final disposal rate

Volume of energy-generated
CO2 emissions andper-production volume(ton)(ton/100
million yen)

Volume used
Per-production
volume(1,000 ton)

Volume used
Per-production
volumeNote: The results of FY2015 for the factories in Japan are basedon the nine-month result from April to December.

Volume of water used andper-production volume(ton/100
million yen)

Volume used
Per-production
volumeThird-party comments

Targets of this report

Environmental report

Targets of report< Third-party comments on environmental preservation activities >ISEKI & Co., Ltd. is an all-around manufacturer engaged in developing, manufacturing, andselling agricultural machinery.

[About completeness of information in this report]
The CSR report of this year starts with an environmental report that describes environmental
policies and environmental management systems and then concisely summarizes thesecond mid-term and long-term environmental targets from 2011 to 2015 and the results ofactivities for them together with data (such as reduction of CO2 emissions, eco balance,measurement of densities of environmental pollutants in discharge water, environmental
accounting, reduction of environmental burdens, environment-friendly design, green
purchasing, environmental education, and responses to stakeholders). In sum, thecompany's environmental preservation activities are almost completely covered.

[About important issues and environmental policies]
Since its business activities, depending on their nature, may give significant impacts on theenvironment, this company recognizes the solution to environmental problems as one of the mostimportant issues. Thus, it clearly defines policies to construct a recycling-oriented system that
harmonizes and coexists with the nature and society and ensure continuous development toward
the future. These ideas are exceedingly important as corporate ethics of a manufacturer.

[About environmental management system]

Editing policy: This report is edited to inform all the stakeholders about the economic and sociality
reports and environmental preservation
activities of ISEKI Group in terms of typicalinitiatives and characteristic approaches.
Target period: This report mainly summarizes activities
carried out from April to December 2015.
Some recent activities are also described.
Result report: Due to a change in the fiscal year-end,, theresults for FY2015 are a nine-month from
April to December. The results before
FY2015 are a twelve month from April to
March of the following year.
Target range: This report describes the activities both inJapan and overseas.

Target organization: This report describes the activities by
ISEKI & Co., Ltd., its group companies
in Japan and overseas, and sales
subsidiaries in Japan. It describes theresults of environmental approaches by
the four manufacturing companies inJapan and three factories overseas,
which are marked within the following table.
References used for this report
Ministry of the Environment:"Environmental Reporting Guidelines (2012 Edition)""Guide to Descriptions in Environmental Reports (3rd
Edition)"GRI"Sustainability Reporting Guidelines 4th Edition"

Faculty of Agriculture, Ehime University
Department of Bio-mechanical Systems,
Laboratory of Environment informatics
and Control

Professor Tetsuo Morimoto

Offices and major group companies in JapanThe environmental management system consists of the Director's Operation Committee chaired by the CEO at the head office,the Environmental Planning Group Meeting under it, and the Environment Promotion Council at each of the factories. This
organization represents ISEKI Group's determination to make concerted efforts together on environmental problems under theleadership of the CEO. First, the Director's Operation Committee sets forth environmental targets. Next, the Environmental
Planning Group Meeting encourages the factories to achieve these targets, evaluates activity records, discusses future actions,and reports the results to the Director’s Operation Committee. In other words, the management system based on the PDCA cycle
is clearly defined, suggesting this company's positive efforts.

Office nameSales subsidiaries

Affiliate companies

Head Office

ISEKI Hokkaido Co., Ltd.

ISEKI-Matsuyama MFG. Co., Ltd.

Tokyo Headquarters

ISEKI Tohoku Co., Ltd.

ISEKI-Kumamoto MFG. Co., Ltd.

Tobe Office

ISEKI Kanto Co., Ltd.

ISEKI-Niigata MFG. Co., Ltd.

Kumamoto OfficeGunma ISEKI Sales Co., Ltd.

ISEKI-Houei MFG. Co., Ltd.

[About initiative for reducing environmental burdens]

Tsukubamirai Office

ISEKI Shin-etsu Co., Ltd.

ISEKI-Shigenobu MFG. Co., Ltd.

• Technical Service Center

ISEKI Hokuriku Co., Ltd.

ISEKI Matsuyama Factory K.K.

• Training Center

ISEKI Tokai Co., Ltd.

ISEKI AGRI Co., Ltd.

• Dream Agricultural Research Institute

The achievement rates in FY2015 for the second mid-term and long-term environmental targets resulted in 93% for the CO2
emissions (per-production volume), 115% for the total volume of materials used, 83% for the volume of water used, and 107%
for the volume of chemical substances used, leaving some of the targets unachieved. In the future, achievement rates of 100%or higher are expected for all the items.
The voluntary limit values of sewage pollution concentration are stricter than those required by lows and achieved.. Considering
this fact, the efforts to environmental pollution control is considered basically sufficient.

[Summary]

Mie ISEKI Sales Co., Ltd.

ISEKI Logistics Co., Ltd.

Ibaraki Center

ISEKI Kansai Co., Ltd.

ISEKI TLS Co., Ltd.

Kansai Office (IMPL)

ISEKI Chugoku Co., Ltd.
ISEKI Shikoku Co., Ltd.

As described above, this report is generally well prepared, for most of the environmental conservation activities are properly
evaluated based on the actual data and summarized.. However, the report would be even better if it contains the reasons for
success in reducing environmental loads and specific actions to be taken for the evaluation results.

ISEKI Kyushu Co., Ltd.

Major group companies in overseas<

Reply to third-party comments>

We have been collaborating with Ehime University for a long time. Since the conclusion of a
research collaboration agreement in 2005, we have run endowed courses carried out joint researchwith the university. Particularly, the Faculty of Agriculture to which Professor Morimoto belongs andthe Research Center for High-technology Greenhouse Plant Production have given us special
considerations in joint research and development.
I would like to express my gratitude to Professor Morimoto for precious comments on this report.
Up to last year, ISEKI Group has been issuing "environmental reports" that included sociality andeconomic reports with a focus on environmental preservation activities. This year, we improved thecontents and issued as a "CSR report." We will further improve the CSR report making full use of
the comments given by Professor Morimoto to facilitate understanding by all the stakeholders. To
Corporate Executive Officer,
expand the circle of ISEKI fans, we will properly identify what the stakeholders expect of ISEKI
ISEKI & Co., Ltd.
Group and what we should do in a society as a corporation and make concerted efforts as ISEKI
Deputy Chief Operation Officer,
Development & Production Division Group.
Assigned to Environmental
Control Section

Seiji Senba

Subsidiaries overseas

Affiliate companies overseas

N.V. ISEKI EUROPE S.A. (Belgium)

ISEKI SALES（THAILAND） CO.,LTD (Thailand)

ISEKI France Holding S.A.S. (France)

Dongfeng ISEKI Agricultural Machinery Co., Ltd. (China)

ISEKI France S.A.S

Iseki-Maschinen GmbH Deutschland (Germany)

P.T. ISEKI INDONESIA (Indonesia): Enterprises and companies with environmental results included in this report

ISEKI Group expresses its deepest condolences to those who have suffered losses from a series of earthquakes struck in
Kumamoto areas in 2016.
ISEKI Kyushu Co., Ltd. and ISEKI-Kumamoto MFG. Co., Ltd., both of which were affected by the earthquakes, resumed its
operation in late April and production in mid-May respectively. We will continue to dedicate all our strength until we achieve fullrecovery as soon as possible.We ISEKI Group sincerely hope for earliest recovery of the affected areas and will make efforts
to offer support for reconstruction of the areas in corporation with local residents.

Achieving Harmony between Human Beings and the Earth

The CSR report is available for viewing at the corporate website.

ISEKI
ISEKI corporate website "CSR & Environment" - "CSR Report"

Contact about this report

IR and Public Relations Office, ISEKI & CO., LTD.
5-3-14, Nishi-Nippori, Arakawa-ku, Tokyo, 116-8541 JAPANTEL: (03) 5604-7602 FAX: (03) 5604-7701
E-mail: kankyo@iseki.co.jp
Issued in May 2016

Let’s keep up with Green Purchasing.