Creating Value,
The AMITA Way
Annual Report 2014

AMITA HOLDINGS CO., LTD.

The morality that pollution is criminal
only after legal conviction is the morality that causes pollution.

Eugene Smith

Contents
02 Greetings from the CEO

04 Creating Value, the AMITA Way

06 Business Domains of the AMITA GroupSpecial FeatureCore Initiatives of the AMITA Group46 FY2014 Financial Report
48 Plans for FY2015 andThree-Year Midterm Plan

50 Environmental Initiatives
52 Risk Management

08 Environmental BPO Services

54 Initiatives Key to the Realization of Our Mission

12 Expansion of AMITA Group Businesses

56 Engaging with Our Stakeholders"Best Way to Manage Waste"
Outside Japan

Spheres of Business16 Terrestrial Resources

32 Information Resources

55 Joining the UN Global Compact
58 Stakeholder Survey Results

62 Remaking AMITA into an Era-defining Company
64 A Value-creating Organization

38 Regional Resources01

Putting Japan's Era of Aspirations
Gone Wrong Behind Us
We at the AMITA Group make it our business to provide
solutions to the critical problems challenging modern
society, while aiming to bring about a sustainable future inwhich the growth of the company inherently creates bothnatural capital (healthy ecosystems) and relational capital(interconnectedness and trust among people).
Since our founding, one constant in our business has been
the manufacture of what we call terrestrial resources.
Extractive resources, exemplified by fossil fuels and metals
such as iron and nickel, which must be dug out of theground, are finite. Today, most of the metals that are theraw inputs to Japanese industry come from mines incountries that are far away: Chile, Australia, Bolivia andso on. More than 45 different mineral resources are usedin building a single automobile—that is just one exampleof how essential these resources are to producing
products that can compete on the global stage. As
a result, worldwide demand for these resources isrising. The same is true of fossil fuels. At this very
moment there are wars in a number of countries
being fought for control of these finite resources.
Many lives are being lost, and this fact should weighon our minds. Meanwhile, the world's many mines strip away
topsoil, and forests are felled to develop oil wells. Very often,
ecosystems are devastated, rivers are polluted and human healthis compromised in the vicinity of these extractive operations.
AMITA offers solutions to these problems by providing asubstitute for extractive resources: terrestrial resources,
which are manufactured from neglected resources alreadypresent in Japan. Our recycling business turns industrial
waste into metals of higher quality than virgin natural
resources, and into fuels that can take the place of
petroleum. We then provide these to companies
in need of resources. I believe that recycling
technology is not only a pro-environment
technology, but also a pro-peace technology
02

that can prevent fighting over natural resources, and a prowellness technology that can protect human health and safety.
In recent years we have expanded our definition of neglectedresources. We have launched new business ventures that involve
forests and farmland that have fallen into disuse, traditional
culture and landscapes that are vanishing, and even humanresources such as the elderly and the disabled whose potential
contributions to society have been under-appreciated. We do thisbecause in the present era we have seen the advent of problems
that cannot be solved simply by the conventional production ofindustrial resources.
Japan today is at the forefront of facing challenges uniqueto mature economies. Despite Japan's great material wealth,
exceptionally clean and safe living conditions, and outstanding
utility infrastructure, over the past 15 years the annual number ofsuicides has hovered around 30,000, while the number of people
diagnosed with psychiatric disorders has risen year after year.
The extreme ageing of the population has triggered a crisis ofelder care and elder impoverishment, regional governments havegone bankrupt, and the pension system is crumbling. In recent
decades Japan has faced a series of natural disasters, radioactive
contamination, and a number of shocking crimes. Our country's
problems are deep-rooted and grave. What can be done to solvethem?
I believe that the collective power of the citizenry will be hugely
important to changing the future of the country. Why? Because
an era is the product of the hopes and dreams of the people wholive it. Our parents and grandparents and the generations before
them dedicated their lives to building a future for their children
and their country, a future they hoped would bring happiness.
But with Japan mired in so many problems, we see that theirhopes have not been fully realized. The reason is that previous
generations did not pursue their hopes in the best way. They
made wrong choices. We want to create solutions that will correct
the errors of the past even as we inherit their aspirations for aShaping a Company to Forge a Flourishing Future
happy future. The time has come to dedicate ourselves to finding
the determination, passion and, ultimately, the solutions thatwill build a better future. As an individual citizen at this time inhistory, and also as a businessman, I intend to dedicate my life tosolving Japan's pressing problems.
According to projections, by 2040 the global population will top
9 billion, even as Japan's population shrinks inexorably. In theyears ahead, Japan needs to mitigate the risks it faces as a resultof its dependence on other countries for resources, food andenergy. At the same time, it needs to develop systems that can
supply social services such as welfare, health care, educationand disaster preparedness to thinly populated regions of thecountry. The answer to these twin dilemmas is not to extend or
expand existing facilities and systems. For example, as of theend of 2012, there were 1,142 active waste incinerators in Japan,of which 496 were operating beyond their designed service of
20 years. If no new incinerators are built, at the end of 2017, thenumber of superannuated incinerators will be 774 (68% of all
those operating). At the end of 2022, 1,001 (88%). Among Japan's
968 sewage treatment plants, 558 are already past their 20 year
designated service.*1 With Japan's population ageing rapidly, andconsequently shrinking, the enormous expense of rebuilding all
this infrastructure is prohibitive.
Moving forward, making plans on the assumption of an
expanding society no longer makes sense, and we must instead
plan for contraction, with flexible systems that are resilient tochange. Specifically, what will be needed are small-scale power
generation and recycling facilities that serve a few hundred ora few thousand people. Simple in construction, so that they canbe maintained at the local level, and with a generalized design,
so that they can be a ready source of local employment. The
resources and energy produced by these facilities would be usedby local industries, and would provide a utility infrastructurethat can be restored rapidly after a disaster. Since 2012, we havebeen developing a model of exactly this type of system in Minami
sanriku.

The vastness of the problems that Japan faces makes ourcompany's efforts seem like a drop in the bucket, but if we
succumb to the belief that society cannot change—that
we are powerless—then that is when there is no hope. I
firmly believe that by joining with like-minded clientsand partner companies, with municipalities and citizens
who want to work together to create new systems andsolutions, and with shareholders who want to invest in
a future with true promise, our collective strength cansolve many of Japan's problems and pave the way to abetter tomorrow.
Over the past few years, the AMITA Group's sales have been
ﬂat, failing to live up to our own expectations and those of our
stakeholders.
Keenly aware that I bear the ultimate responsibility
for our performance as a company, I regard this as a
critical juncture for AMITA and am devoting my full
efforts to improving the structural profitability of ourexisting businesses and boosting the pace of new productdevelopment. Moreover, I reiterate my commitment toshaping AMITA into the kind of company that Japanneeds most: one that delivers tangible results. I ask forthe continued backing of all our stakeholders as we movetoward that goal.
Finally, to everyone who shares the AMITA Group's vision
for the future, and supports our efforts to bring it about:Help us ensure that we are opening—not closing—doors thatwill allow future generations to enjoy a happy and flourishingsociety.
*1 Source: Japanese Ministry of the Environment Survey on Disposal of General Waste

Eisuke Kumano
Founder & CEO
AMITA HOLDINGS Co., Ltd.

03

INPUTOUR ORGANIZATION

Creating Value,
the AMITA Way
Since the AMITA Group was founded in 1977, we have beendeveloping an environmental strategy support service thathelps companies both reduce environmental risks and costs
and raise their environmental value. There is an emerging
need in our society for lifestyles based on healthy coexistence
between people and nature. Since the 1990s, AMITA has
been working to construct new social systems by identifying
neglected resources in regions and putting them to the best
possible use, while also fostering cyclical resource usage
within those regions. We will continue to forge a genuinely
thriving future for society by developing "social technologies"that offer solutions to the depletion of food, energy, minerals
and other resources.
�
Here we summarize how the AMITA Group takes inputs ofresources and raw materials and uses our manufacturingassets and knowhow to create value. (Figures are for 2014.)
In the coming years we will further reduce
our energy consumption; embrace theuse of renewable energy sources; work
to grow our physical, human andintellectual capital; and create morefinancial, client and social value
from our inputs.
�

04

Energy inputs

1.77 million kWh
Diesel oil 149 kl
Kerosene 25 kl
Petrol
8 kl
Electricity(of which 160,000 kWh from renewables)

Water usage

Tap water

AMITA Resource Recycling Plants

5 plants

Recycling network
companies

Employees

Approx.

150 Approx. 300

Includes those AMITA has
done business with in the last
five years

CO2 emissions from plants

3,954 m3

Raw materials
raw materials
Industrial waste (asfor recycling)

865 sites
2,177types
137,000 t
From

862 t CO

2

Employee relations

62 %of AMITA employees
say that the job they
do at the AMITA Group
is fulfilling84 %say they agree withAMITA's corporate
philosophy

Other raw materials(no natural resources consumed)

12,000 t

Above figures are for AMITA's
five resource recycling plants.
Does not include company
headquarters & sales offices(Promotion of renewable energy usage)
In October 2014, AMITA launched a line of businesswhere it acts as a sort of green electricity agency. In
2015 and beyond, renewable energy will be adopted at
AMITA plants, and the proportion of renewable energy
in our resource inputs will grow.
Electric power generated from solar, wind, biomass andother natural sources

Waste products value analytics

Approx.

12,600 entries

Waste products generation processes

Approx.

12,000 entries

OUTPUT

Physical capital
At AMITA's five domestic recycling plants, we produce
terrestrial resources (alternatives to extractive
resources). In Japan we are expanding our bases
through tie-ups with AMITA Terrestrial Resources
Manufacturing Partners. And in 2015 we plan toopen our first plant outside Japan, in Taiwan.
For details on expansion of bases see P27, for ourbusiness initiatives outside Japan see PP12-15.

Financial capital

Net sales

4.36

billion yen

Ordinary income

-101

1,155

million yen

Human capital
The AMITA Group fosters a "work family" relationshipwith employees in order to promote social value
creation that cannot be achieved by individuals
acting alone. Based on our corporate philosophy that"people are an asset, not a cost," we are committed
to making work motivating and meaningful, and to
helping our employees raise their performance andcommitment level.

For more on employee indicators, see P54, for survey
results, see PP58-61.

Intellectual capital
Our unique recycling technology analyzes more than
2,000 types of waste annually, right down to thechemical elements that make them up, and thenblends them to achieve the desired specifications of agiven product. We have accumulated information on
approximately 12,000 waste generating processes
and 12,600 waste analyses, and we harness thisknowledge to do things like develop higher-quality
resource recycling technologies and systems.

For more on our development of recycling technologies
see P26, for technology development related to Regional
Cyclical Systems of Resource Usage, P40.

companies

companies

1,373 people

million yen

Results for four Resource Recycling Plants(the Kyotango Resource Recycling Plant had no output ofrelevant products in this period)

76,774 t

Equivalent coalore and relatedresources saved

Alternative
nickelmaterials
produced *2,480tEquivalentnickel ore andrelated resources
saved

26,798 t

Alternative
coppermaterials
produced

737t

Equivalentcopper ore andrelated resources
saved

42,276 t

Calculated as those specialty steel materials that serve as nickel raw material
alternatives. For AMITA's full recycling results, see P22.

Email newsletter
distributed toover

AMITA Group website users

people389,000/year

Fudenkan Museum

Visitors
Approx.

Companies receiving
environmental
certification

230,396 t 281companies

Amount ofalternative
cementmaterials(calorific)
produced

25,00075

Participants in AMITA
environmental training seminars

Net income

2Companies using
multiple AMITA
services

No. of AMITA Groupbusiness partners

100/monthIn FY2014 AMITA reallocated some of our corporate
resources to lay the groundwork for businessexpansion. In FY2015, we are taking steps to place
the company on a growth trajectory.
For more details on financials, see P46.

Client value
AMITA provides solutions to environmental problems
for the companies who are our clients. In addition toproviding recycled resources as alternatives toextractive ones, we support the environmental
management activities of 96 companies through ourconsulting and outsourcing services, training support,
etc.
For accomplishments of our Terrestrial Resources
Business see PP22-23.

Natural capital
By promoting cyclical usage of resources throughthe production of recycled resources, AMITA
indirectly reduces the amount of virgin natural
resources that are extracted and used.
Also, through our environmental certification services,
we are contributing to both sustainable forestry
management and the prevention of overfishing.
For more details on environmental value created by
AMITA, see P51.

Example ofincreased social capitalAt the Kyotango Resource
Recycling Plant, organic wastefrom companies and food wastefrom a portion of the city'shouseholds are recycled into
liquid fertilizer. This is used for
growing food, but that's not all.
AMITA is creating a system forthe waste from local foodconsumption to be recycled
again into liquid fertilizer,
contributing to increased brandvalue of the region.

Social capital
AMITA reduces the environmental burdens of ourcustomers, our supply chain, and municipalities,
thereby making society as a whole moreenvironmentally friendly.
By producing recycled resources, we indirectlyreduce the amount of ore mined, and theaccompanying environmental impacts and effects
on human habitation.
We are also actively engaged in building a network ofpartners to work with in building a sustainable society.
For more on AMITA's social activities see P54.

05
03

Business Domains of the AMITA Group
Promoting sustainable resource and energy usage through the harnessing of neglected resources

Environmental BusinessOutsourcing

Improving compliance

Supporting
primary industries

Promoting material andenergy self-sufficiency

06

Preserving
natural resources

Green energy
usage

100% recyclingof waste

Producing
biogas and fertilizer
from food waste

Building a new social system

Terrestrial
Resources Business

Regional
Resources Business

From consuming resources tocreating them

Building self-sufficient
cyclical systems

Through 100% recycling of industrial waste (by-products andresidues), AMITA creates what we call "terrestrial resources", which
offer a solution to the problem of extractive resource exhaustion.
By providing consulting and training services that support
the waste management operations of customers, we help
them raise their environmental value and contribute to
the sustainable development of society.

AMITA empowers regions to fulfill their inherent potential byestablishing positive relationships among people and between
people and nature. By designing a Comprehensive Cyclical
System of Resource Usage—which uses a region's neglectedresources to develop products that harness its unique
attributes—and by introducing biomass and othertechnologies, we aim to create thriving regions.

Details of Terrestrial Resources
Business begin on P16

Specific Services

Value Provided

Recycling ofwaste generated
by companies

Reduce amount of
natural resources usedby creating alternative
resources

Environmental
operations consulting

Improve quality ofenvironmental operations
by preventing illegal
dumping, regulatory
violations, etc.

Green energy
services

Reduce amount of
natural resources
used by promoting
use of renewableenergySpecific Services

Value Provided

Digital waste
management
system

Improve efficiency
and reduce risks/costof waste management

Assessments
for international
eco-labelling(certification)

Prevent
unsustainablefishing andforestry

Information
Resources Business

Details of Regional Resources
Business begin on P38

Specific Services

Value Provided

Demonstration
research, planningand operation of
biogas plant

Coping with ageing
utility infrastructure,
adopting distributed
energy generation

Symbiotic
farming of
Sasanishiki rice

Solve problems of
disused farmland,
lack of regional
employment

Restructuring information tocreate value
All of the AMITA Group's businesses collect and compile various
forms of information about the environment, and then employ
technologies that can sift through it. We provide services
that support customers' efforts to increase efficiency ofenvironmental operations, environmental certification, andmore. AMITA helps companies reach a higher level ofenvironmental value.
Details of Information Resources
Business begin on P32

This organization of three business units is valid as of2014. From 2015 the AMITA Group has reorganized
into two business units, the Environmental Strategy
Design Business and the Regional Systems Design
Business. For details please see P62.

07

Special Feature:Core Initiatives of the AMITA Group (1)Supporting environmental strategies
that will enable companies to thrive in the years ahead
Environmental BPO Services

Business Process Outsourcing

How "Best Way to Manage Waste" Works

In February 2014, AMITA launched our BESTWAY
Environmental Business Process Outsourcing (BPO)
line of Environmental Strategy Support Services.
Our first offering is the Best Way to Manage Waste
system, under which AMITA will take over a company's
waste management operations processes.

Reports
Instructions
Decisions
Approvals

Dedicatedsystem for realtime logging
and information
sharing of disposal
status

Focus ondecisionmaking

Follow-up

AMITA
operators homein on customer
needs

Corporate
Management

Reporting

Best Way to Manage Waste is an outsourcing service provided

Risks & Costs

by AMITA. We take on a company's entire waste management
expertise and regulatory knowledge relating to Japan's Waste
Management Act. It can also be time and labour intensive: a company

Instructions
Decisions
Approvals

Representative fromnearby AMITA sales office

ReportGeneration

Report Submission

ReportingPlant-level
Personnel

operations. Waste management often requires specialized legal

ClientSupply Data
Specify Work

Follow-up

must generate and manage deadlines for extensive documentation,
identify/select disposal providers, and generate reports.

Operators

By allowing AMITA—with its 35 years of experience in carrying

Collection Schedule
Returning Manifest

out waste management itself, and in advising others on waste
management—to take over these operations, a company can

Representative fromnearby AMITA sales officeestablish a comprehensive legal compliance system while cuttinginternal costs, reducing waste management risks, and increasing theefficiency and effectiveness of its business process and information
management.

08

Compliance &Operational Efficiency

Data Collection
Quotes
Negotiation of Condition Data Provision
Making Contract
Returning Manifest
Issuing Manifest

Waste Collection
Companies

Municipalities

Experts

Data Collection
Negotiation of Condition
Making Contract
Issuing Manifest

Intermediate & Final
Disposal Companies

The Best Way to Manage Waste: Environmental Business Process Outsourcing (BPO)

Q. Why is Environmental Business Outsourcing
needed today?

A. Companies today need to focus not on"environmental business", but rather on
formulating and implementing a comprehensive
environmental strategy.
Currently, economic growth and industrial development are achieved throughmassive consumption of natural resources, destruction of ecosystems, disruptionof the global climate and other negative externalities for the environment. These
will have a blowback effect on our way of life by triggering food shortages andlarge-scale disasters.
Over the coming decades, many of Earth's natural resources will be exhausted,
imposing severe constraints on our lifestyles. So in deciding how to operate,companies need to ask themselves the question, "How can we contributeto the sustainability both of our enterprise and of society as a whole underenvironmental constraints in the years ahead?" Companies should formulate
and implement environmental strategies that are mindful of the future.
Meanwhile, Japan's population is shrinking, and ageing rapidly. Manycompanies will soon face a serious management challenge to secure theworkforce they need. Outsourcing aspects of the business that entail significant
risk and labor to specialized professionals will be a key means of conserving
scarce resources. That is why Business Process Outsourcing (BPO) is in the
spotlight: it is a focused means of formulating and implementing a futureoriented strategy.

Metal resources usage in 2050
Metals whose current reserves will be nearlyexhausted by 2050

Iron, platinum, molybdenum,
tungsten, etc.

Metals whose demand will exceed current
reserves by at least 100% by 2050

Nickel, manganese, indium, etc.

Metals whose demand will exceed DRB by 2050

Copper, zinc, lead, gold, silver, etc.

Reserves are ores known to be economically extractable at the present time
DRB (Demonstrated Reserve Base) includes ores that are infeasible or uneconomical to extract at the present time
Source: Forecasting of the Consumption of Metals up to 2050
[https://www.jstage.jst.go.jp/article/jinstmet/71/10/71_10_831/_article/-char/ja/], Harada et al.

Ecosystem Destruction
100 years ago

Approx.Approx.
one species
one species
went extinct
went extinct
per yearper yearNow

Approx.Approx.
40,000 species
40,000 species
going extinct
going extinct
per yearper year

ONE YEARONE YEARONE YEARONE YEAR
Source: The Sinking Ark (Norman Myers)(Workforce Challenges in an Aged Society)
Labour force
cohort ratio, 20101 :(% of population age 15-64)

Will dropby half
in the next
50 years!

:
15-29
year olds

Working-age population

30-65
year olds

10

Source: Annual Report on the Aging Society: 2012
(Cabinet Office, Government of Japan)

09

Special Feature:Core Initiatives of the AMITA Group (1)Environmental BPO Services

Business Process Outsourcing

Q. How will things change for my company after introducing AMITA's Best Way to Manage Waste?
A. AMITA will reduce a client's waste management risks and costs,

freeing up budget and personnel to craft an environmental strategy.
Before outsourcing

Environmental strategy(development andimplementation)

Training
Handoff
Legal compliance
Regulatory compliance

Environmental
management tasks(operations,oversight,
decision-making)Environmental strategy: formulate/implement
We do outsourcing!

Document preparation

Proactive environmental/CSR activities: plan/execute

Environmental education for employees

Outsource

A big management
burden…

10

After outsourcing

Focusing
resources!

Value-creating
environmental strategy:
formulate/implement

R&D to minimize environmental impacts
Product development with high environmental value

Effective environmental communications
Management
oversight/
decision-making

Cut internal management costs
and focus on raising value!

The environment-related tasks that a company must handle are wide-

With Japan's domestic market reaching its limits, and the only path forward

ranging, and they are growing each year: pollution mitigation, adopting waste

leading to new markets in the fast-growing emerging economies, success hinges

management and environmental management systems, reducing CO2 emissions,

not on price competitiveness but on value competitiveness. And the biggest

environmentally responsible international expansion.

weapon in competing on value is being able to offer environmental value.

Does every company really have the internal resources to handle all those tasks?

By making the most labour-intensive waste management tasks and risks visible

By identifying what can be outsourced and what cannot, and the risks andto decision-makers, and effectively outsourcing those tasks, a company can freeimportance of each type of work, AMITA guides our clients to optimal resourceup budget and personnel to focus on an environmental strategy, and ultimately

allocation and risk management, ultimately saving them money.

increase its value. That is what AMITA can offer.

The Best Way to Manage Waste: Environmental Business Process Outsourcing (BPO)

FY2014

Performance

Best Way to Manage Waste

2 places of business
Prospective* 1 place of business
Engagements

Exploratory Study for BESTWAY
Waste Management Operations Visibility Service

11 companies
Prospective* 1 company
Engagements

Drivers of Service Uptake
Actual outsourcing needs• Cannot replace veteran knowhow of retiring employees• Do not have the necessary resources for global business expansion• Want to rationalize internal operations in line with corporate strategy(based on interviews with approx. 400 publicly traded companies)*Prospective: scheduled for 2015

Targets for
FY2015

Common barriers to outsourcing
Best Way to Manage Waste

Sales

25 million yen

Launch new offerings in BESTWAY line

• Involvement of multiple departments (environmental, human resources,
administration, etc.) means decision-making process is drawn out• Lack of clear vision for how costs and resources freed up by outsourcing could
be repurposed, making impact hard to project

Develop new lines for 2016 launch
Steps toward uptake
Plans to offer BESTWAY outside Japan starting in 2017!
Japanese companies continue to expand outside Japan in search of new markets, andenvironmental operations needs outside Japan, particularly in Southeast Asia, are growing.
Many companies urgently need to get their high-risk waste management operations inorder. Starting in 2017, AMITA plans to put its experience and expertise in the Japanesemarket to use outside Japan by offering Best Way to Manage Waste in foreign markets. In
FY2015, we are assessing SE Asian markets carefully and in depth.

• Provide operations visibility service that will supply the necessary informationfor organization to evaluate outsourcing and enable projections of impact• Support company in envisaging a future vision for its environmental
operations and environmental strategy

11

Special Feature:Core Initiatives of the AMITA Group (2)Promoting a cyclical system of resource use andincreased regional awareness of the environment
Expansion of AMITA Group Businesses Outside Japan

Starting in FY2015, the AMITA Group will start
making a serious move into SE Asian markets
In recent years, Japanese companies have actively expanded into foreign markets,and now have more than 25,000 foreign subsidiaries.*1 In order to avoid the risk ofover-dependence on China, the recent trend has been to diversify the supply base toother nations.
Meanwhile, with new air travel routes, some of the world's most scenic, out-of-theway places are undergoing tourism development. In areas that are not advancing
their recycling technology apace, we are seeing deepening problems with rubbish andpollution.
*1 KAIGAI SHINSHUTSU KIGYO SORAN 2013 (Toyo Keizai)

For about 25 years now, AMITA has been developing its resource circulation businessin Taiwan, South Korea, Russia and various countries in SE Asia, primarily tradingfor valuable materials. Starting in 2015, based on our track record, and the know-how
and technology of our environmental businesses in Japan, we will engage in full-scalebusiness expansion in other countries. We will offer companies environmental strategy
advising, and push forward with building comprehensive cyclical systems of resource
utilization.

2018: Establish foundation for offering
environmental strategy advising and regional
design businesses in markets outside Japan

1980s Services will include trading valuable by-product materials outside Japan, investigating foreign environmental laws, assessing local risk, etc.
From 2015 Deploy recycling technologies outside Japan (establish recycling plants)
2015 Establish recycling plant in Taiwan (scheduled to begin operation in October)2016 Launch recycling business in Malaysia (scheduled) Since 2014, market studies and business feasibility analyses have been underway.
Carry out development of new services
based on data and know-how obtained
through business activities outside Japan
Services for Japanese companies planning to expand outside Japan are being
developed and offered in collaboration with Japan-market business units, andinclude environmental risk counseling for expansion abroad; reliability
assessments of local business partners and of foreign subsidiaries that areproving difficult to manage; local staff employee training support; andenvironmental legal and regulatory compliance support services. (In FY2014,
AMITA was engaged by three companies for these services.)

12

Aiming for1 billion yen
in sales fromenvironmental
business outside
Japan in FY2016

From 2017 Expansion outside Japan of Environmental BPO (outsourcing business)
2017 Begin offering Best Way to Manage Waste outside Japan (scheduled)Expansion outside Japan ofFrom 2018 regional cyclical system technology
2018 Build comprehensive system of cyclical resource
usage for islands such as Palau, Cát Bà, etc.

Since FY2013, market studies and pilot projects have been underway.

Taipei

In 2015, AMITA will commence operations of
its first-ever directly owned subsidiary,a resource recycling plant outside Japan, in Taiwan.
Recycling Business in Taiwan
Business
Development
Sequence

Market Study

Planning

Investment
Site Prep

Plant Construction
Start Local Sales

Plant
Operations

AMITA
now

TaiwanThe solar cellmanufacturing market
Other

Taiwan has 16% of the world
market share in solar cell
production. With global demand
for renewable energy rising,
China and SE Asian countries
are expected to boost solar cell
production.

Japan 7%
China
Taichung

60%

Taiwan16%

ChanghuaCountyWorld Solar Cell
Production Market Share

As of end of 2014

Source: "Trends in Photovoltaic Applications" (2013)

Company name

Amita Taiwan Corporation

Business

Turn silicon slurry, etc., taken from solar panel andsemiconductor manufacturing plants into recycled products(metallic silicon/regenerated coolant) and supply to user companies.

Site location

Changhua County, Taiwan Changhua Industrial Park

Site area

6,976m2

Investment

356 million yen

ScheduledStart of construction: May 2015
Start of operations:
October 2015

Waste generators
Solar panel
makers

AMITA
100% recycling

Metallic silicon

User companies

Amita Taiwan
Corporation
Silicon slurry
liquid waste

Permit for industrial park location obtainedin FY2014

TainanManufacturers
Manufacturers

Regenerated coolant

Initial construction and operation schedulerevised due to changed specifications

Goal

Aiming for sales of 230 million yen in third yearof operation, recouping initial investment.
After first plant becomes operational, plans to expand on same site.

13

Special Feature:Core Initiatives of the AMITA Group (2)Expansion of AMITA Group Businesses Outside Japan

Plan for Expansion Outside Japan from 2016
Recycling Business in Malaysia
Business
Development
Sequence

Market Study

Malaysia

Planning

Investment
Site Prep

2016(Projected)
Plant Construction
Start Local Sales

Plant
Operational

AMITA
now

As of end of 2014

After Taiwan, AMITA intends to introduce a recycling business in Malaysia. In
FY2014 we carried out a business proposal formulation study (a joint proposal
with the Kitakyushu City Environment Bureau; study commissioned by Japan's
Ministry of the Environment). The study period is April 2014 through March 2015.
Next, AMITA will establish a joint venture with a local company in Malaysia tobuild a resource recycling plant. The aim is to begin operations by the end of FY
2016, recycling Malaysia's domestic waste stream into calorific cement raw
materials.

Other Markets
Market studies and business feasibility assessments for expansion into
Thailand, Indonesia and Vietnam have been underway since 2014.

Measures to Accelerate Expansion Outside Japan

1

2

Seminars on Environmentally
Responsible International Business

Active Collaboration with Japanese
Agencies and Municipalities

For Japanese companies expanding outside
Japan, compliance with local laws andregulations can require a lot of work.
AMITA will hold seminars for foreignsubsidiaries of Japanese companies
addressing environmental matters in places
where AMITA is considering expanding its
recycling business, in order to:

Japan's environmental technologies offer
great promise for helping fast-growing
emerging economies tackle theirenvironmental problems. Japan's Ministry of
the Environment and other agencies offer
support for market entry outside Japan in avariety of ways. Also, the city of Kitakyushu,
an Eco-Model City under Japan's Future City
Initiative, is undertaking a policy ofstrengthening links with SE Asian countries,
with an environmental focus.

• Support the environmental efforts ofJapanese subsidiaries in that country• Perform on-the-ground data collection
for that country• Build a local network of companies
This will establish a foothold for full-scale
market entry.

Field study in Malaysia

14

Field study in Indonesia

AMITA will accelerate the pace of its
international expansion by actively making
use of joint proposals, joint studies,
subsidies, etc. offered by agencies andmunicipalities in Japan.

Case Study in Expansion Outside Japan:
Social Technologies for a Sustainable Community

Outline of AMITA's Proposal to Builda Comprehensive Cyclical System of Resource Usagefor the Republic of Palau
Obtain profits from operating facilities to make biogas or solid combustion fuel and selling recycled material.

Island-wide Cyclical Resource Plan for the Republic of Palau
Now
Business
Sequence
Palau

Survey regional
resources thatcan be harnessed

Pilot project/
Feasibility
assessment

Planning &
consensus
building

Investment/
Build
infrastructure

Operate/Provide
operational
supportAMITA
now

As of end of 2014

The Republic of Palau is an island country in Micronesia with a population of
about 20,000. Tourism is the main industry. Dependence on imported food andenergy is a constant issue, and in addition Palau is experiencing worseningsocial and environmental problems: constrained landfill space, rising publichealth concerns related to improper waste management, and overloaded
sewage treatment plants.

• Constraints on space and pollution problems
with landfills for final disposal• Discharge of sewage into ocean• Dependence on imported energy and fossil
fuels• Food security
Publichealth problems caused by mosquito•

Fuel

FY2014

Carried out business feasibility study on building of a Comprehensive Cyclical
System of Resource Usage based on technology for producing biogas/solid
combustion fuel/calorific cement materials from waste.

Starting in FY2015, will move to sign agreements with government
bodies and formulate detailed design of technologies, with the aimof launching the business by the end of FY2018.

• Use boilers to convert solid combustion•

Plastic
Prunings
Paper/Fiber

Used tyre recycling business• Coordination with nearby countries tosupply calorific cement raw materials

fuel into energy in a climate-control
integrated system
Air conditioning systems (absorption-typerefrigeration systems) for international
airport, government offices, national
hospital, etc.

Seafood

Cementplant

BoilerUsed tyres

Town
Airport/Hospital/
Public Facilities

Ocean

Hotel
Cooling &Refrigeration

Farm
products

The AMITA Group's Initiatives
Carried out preliminary study in order to identify environmental problems(Commissioned by Japan's Ministry of the Environment)

Business turning dry waste into
solid combustion fuelswarms and accumulation of used tyres

The AMITA Group's experience and know-how in orchestrating regionaltransformation in Japan is now being put to work to build a compact, cyclicalresource usage and low-carbon social system for Palau.

FY2013

Solidcombustion
fuel plant

Organic
agriculture

Homes
Sewagetreatment
plant septictankLivestock excrement
Food waste
Sewage & septictank sludge

EnergyCrops

Business turning wet waste andsludge into biogas

Electricity
Liquidfertilizer

Purified water

Biogas plant• Build integrated system encompassing•

electric power generation, liquid fertilizer
for agriculture and food recycling
Grow "energy crops" to raise energy
self-sufficiency

The AMITA Group is also pursuing a similar initiative for Cát Bà Island in Haiphong City, Vietnam.

15

Terrestrial Resources
Business

AMITA supports the creation of a sustainable society by finding the optimal meansof turning unharnessed, unstable waste and energy into terrestrial resources.
16

Solving waste management problems
while promoting sustainable resource use

MissionNow

FutureReducedamountof natural
resources
used

Other*Naturalresources forwhich alternatives
exist

The resources used/consumed in Japan annually amount to approximately 1.5 billion tons.

870 million t

Resourcesused inJapan
annually(1.47
billion t)(59.2%)Of that, only 210 million tons, approximately 14%, is recycled.

Recycledresources

210 million t

The mission of the Terrestrial Resources Business is to solve waste management problems for

Terrestrial Resources Business

BUSINESS MISSION

Business Mission

Increasedamountof recycledresourcesused(14.3%)

companies while forging a path to sustainable resource and energy usage. We aim to do this(Derived from Recycling Databook 2014)*Amount of rock/gravel/food/wood/etc.
used in Japanby limiting natural resources consumption and making optimal use of recycled resources
and renewable energy, moving society as a whole toward a smaller ecological footprint.

Society Today
Stimulate consumer
demandSeek efficient
production

Sales & Marketing

Manufacturing
Cheap mass
production

Society Envisioned by AMITA

Seek cheapest
possible priceConsumption

Supply chain in which resourcesand energy stagnate

Environmentally
Green procurement
conscious PRof raw materials,
Designing products forease of recycling,
Improved manufacturing Sales & Marketing
processes

Seek safe,
cheap disposal

Waste

SHIFT

Disposal in landfill

Resource inputs:1.47 billion t

Needs input of large amountsof depleting resources

Recycled inputs:210 million t (14.3%)

Only a small proportion of
resources are recycled into
raw materials today

Resources go
un-recycled andbecome rubbish

Consumption

Seamless supply chain for
Manufacturing recycling resources and energy
Environmentallyconscious planning

Planning

Choosing products withless environmental impact

Fewer inputs
with more cycles
of usage

Waste
Reuse

Planning

Recycling

Recycle waste to create
resources that can beused again

The keys to seamless recycling
Recycling technologies R&D / Increased business efficiency /Environmental education / IT implementation /Legislation / Environmentally conscious product design /Cost saving / etc.

17

PROBLEMS AND THE MARKET

Problems and the Market

Developing and offering high-quality
environmental services in Japan
while expanding that same quality ofrecycling to SE Asia

Depletion of
extractive resources

Destruction of environment
and ecosystems
Globalwarming

Solving these problems

Massive consumption of extractive resources
causes deforestation, major disasters, and climatechange, and contributes to conflict and war.

AMITA's Terrestrial Resources Business has expanded acrossJapan by offering as its primary service the 100% recycling ofAbnormalweatherwaste from company factories and sewage treatment plants,cons Putti
um ng
pti
a
on stopofex to mtracti assiv
ve
res e
ou

which produces recycled materials and fuels that are alternatives
SE Asia

to extractive resources. Moreover, we have supported theenvironmental strategies of many companies inside and outside
Japan through related services such as corporate environmental
education, IT that increases environmental operational efficiency,
and general risk reduction.

Solve SE Asia's waste
management problems
Safe, stable, affordable
recycling of waste
Reduce waste
management
risks

Recycling
plant construction
and technology
development

Recycling operations outside Japan

Stable supplyof alternative
resources

High-quality
recycling andproduction ofalternative
resources

Produce terrestrial resources(alternatives to extractive resources and fuels)

Terrestrial
Resources BusinessGreen energy services

Recycling operations

18

1980

2000

2014

War andother conflictJapan
Support formulation and implementationof environmental strategies
under environmental regulations
Safe, stable,
affordable recyclingof wasteBusiness process visibility services

IT-based support servicessJapan-quality services
extended to SE Asia

The "Best Way to Manage Waste" waste
management outsourcing service

Environmental education
support services

rce

The future...

Improve qualityof environmental
operations/CSR

Createenvironmental
value

Reduceenvironmental
risks

Stablesupply ofalternative
resources
Reduceenvironmental
costsGrowing risks in resource procurement

A vast supply of neglected resources

Asia's growing waste volumes

In 2014, Indonesia banned the export of unprocessed
ores, just one example of a country rich in natural
resources enacting export restrictions; this trend isheightening the risks Japan faces in depending on
resource procurement from overseas.

Each year, Japan generates almost 400 million tons ofwaste. The amount of waste recycled is 200 million
tons, half the total. Much material continues to beincinerated or sent to a landfill. Increasingly effective
ways of harnessing these terrestrial resources willcontinue to be needed.

By 2050, the amount of waste generated globallyeach year is projected to be 22.3 billion tons, 2.2
times greater than 2010. Growth is expected to be
especially pronounced in Asia, which will create
demand for more recycling.

Spread of natural resource export restrictions

Trends in Japan's waste volume

Projected waste volumes by world region

Volume recycled

Greater difficulty of procuring resources

China (rare metals)

Export restrictions enacted in 2012
(may be lifted through WTO dispute settlement process)Zambia (copper, etc.)

Increase in mining royalties (2011)

Zimbabwe (gold, platinum)
Increase in mining royalties (2011)

Indonesia (nickel)

Peru (copper, etc.)
Increase in mining
royalties (2011)

Export of unprocessed ore banned (2014)

Chile (copper, etc.)
Increase in mining royalties (2011)
Temporary measure to raise
funds for disaster recovery

Information compiled by AMITA

Volume of industrial waste generated(in millions of tons)

450

415

408

400

67

58

50

400
350

406

400

393

45

42

40

300
250

Volume reduced
412
30

180
179

179

179

177

175

Volume undergoing
final disposal

417
26

180

422
24

179

418
22

419
20

182

180

404
390
17
14

386
14

381
12

167

169

169

172

169

172

171

184

183

182

201

211

219

215

219

200

South
America

Africa2025

2010

Approx. 14.87 billion t.

Approx.
10.47 billion t.

100
217

207

205

200

50

50
0

North
America(units of hundred million tons)

150

150

Europe2050
Approx. 22.31 billion t.

250
170

200

100

Asia

Terrestrial Resources Business

Growing Demand for Terrestrial Resources Manufacturing

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (FY)

Source: Japanese Ministry of the Environment

0
2010

2020

2030

2040

2050 (Year)

Source: Research Institute of Solid Waste Management Engineering

AMITA believes that risks related to resource depletion and resource procurement are growing, not only
among the countries of Southeast Asia but also in Japan, even with its advanced recycling infrastructure.
In light of this, demand for advances in harnessing waste for productive uses will grow in the long term.

19THE STRENGTH OF OUR RECYCLING SERVICEThe Strength of Our Recycling Service

AMITA’s recycling service,with a track record built up over 35 years,
has three unique major strengths.
UniqueStrength01

We offer a "100% recycling" service
that is safe, reliable, and affordable

The aim of the AMITA Group’s unique recycling technology, which makes use of the fullrange of waste constituents, is not just to realize zero waste production throughrecycling processes that create resources, but to achieve recycling that also includes
the users taking delivery of these recycled resources in an overall supply chain that
produces zero secondary waste. As the image below illustrates, the AMITA Group’s
reliable network for the collection of waste, along with the production and provision ofrecycled resources, incorporates over 1,000 waste generators, along with over 300
partner recycling firms.
Examples 100% recycling of alternative sources of copper and other metals

Production of resources
through waste recycling
using unique technology

Recycledresources

Substituted fornatural copper ore

Non-ferrous
refinery makers

Slagby-products

Used instead ofnatural iron ore

UniqueStrength03

Supporting customers through expertiseand experience

AMITA aims not simply to provide a
recycling service, but to take into
account the scale, ideals, and budgetof our customers and offer solutions
that realize reductions in risk, cost, andenvironmental footprint. Our record,
including the provision of consulting toa total of over 200 companies, and theorganization of over 650 seminars thathave seen over 10,000 participants,
enables us to support customers inminimizing risk to their company brandthrough illegal dumping and breach ofother laws and ordinances.
(For examples of our proposals, see P30.)

Cement manufacturers

Employeetraining andmanagement
systems
Improvingbusiness
efficiency
and uptakeof technology

Product
collection andre-useCost

Risk

Fine-tuning
logistics

Reassessing
processes of
production
and storage

Footprint

Assessment
and selection ofmanagement
contractors
Identifying risk,
includingCommunicationand provision of environmental
risk, safety risk,
information
or reputational
risk

Complianceand protectionof classified
information

Adopting multiple perspectives
to provide solutions tailored toindividual customers

Client feedback
UniqueStrength02

Pride and passion, ideas and ideals:
the path to a sustainable society

The key principle of our recruitment andtraining is not just skill, but the greatemphasis placed on understanding our
mission of realizing a sustainable
society. Customer surveys consistently
rank our sales personnel top forenthusiasm, standards, and knowledge.

Orders attracted by the AMITA name (No.)

84

70
52

Enthusiasm andknowledge of oursales professionals

Serviceandquality(Electrical appliances industry)

We are very satisfied
with the speedy,
thorough service of thesales personnel.

We can trust them both asa consultant and acontractor.
(Paper manufacturing industry)

They made the kind of
proposals othercompanies just can't,
thereby helping us to
improve our business.
(Chemical manufacturer)(Non-ferrous metals industry)

Ability tooffer
proposals(Compiled from a 2014 Customer Survey. For details, see P58.)

20

AMITA’s commitment to theenvironment is shared by all
their staff.

(Compiled from responses to a 2014 customer survey. For details, see P58.)

Eco-solutions provided by Terrestrial Resources Business
Recycling in collaboration with partner companies
Identification of recycling providers
Market identification for valuable materials

Waste products handled
Sludge; Cinder;
Dust/soot/particulates;
Plastic waste;
Scrap metal

Approx.
450,000 t
recycled

Recycling at AMITA's
resource recycling plants

Approx.
20,000 t
recycled

Recycling through
AMITA Terrestrial Resources
Manufacturing Partners*
Alliance with AICHI KAIUN CO., LTD.

Turn 100% of industrial waste materials into
raw materials that can be supplied touser companies.

Inorganic waste recycling

Partner plants using AMITA recycling technology

Product

SlurMix ®

Product Cement materials (calorific)

Original
waste

Waste oil; waste acids;
waste alkalines; sludge andother liquid industrial wastes

Original
waste

Waste plastic; slag;
Cinder and other solidindustrial waste

Users

Cement makers

Alternativerawmaterials

Cement materials(Alternative clay, etc)
Coal/heavy oil

Alternativerawmaterials

Environmental Strategy
Support Services
Environmental risk
management/consulting
Risk assessments;
Creation of waste management
guidelines and procedures;
Reports on municipal regulations; etc.

Seminars on Waste Disposal and Public Cleansing
Act and environmental law seminars;
On-demand training

Waste management outsourcing
Waste management operations BPO(Best Way to Manage Waste)
Business process visibility services

Green energy services

Approx.
150,000 t
recycled(plans to add more such partners in 2015 and beyond)Users

Training support(seminars, education, training)

Terrestrial Resources Business

OVERVIEW OF PRODUCTS AND SERVICES

Overview of Products and Services

Cement; steel; coal; paper;
manufacturing industries etc.
Coal; heavy oil

Product

Specialty steel materials

Product

Metal materials

Original
waste

Sludge; waste catalysts, etc.

Original
waste

Sludge, etc. (copper-rich)

Users

Nonferrous metal smelters

Users

Nonferrous metal smelters

Alternativerawmaterials

Natural nickel/chromium
containing ores

Alternativerawmaterials

Natural copper
containing ores

Product

Electricity(green power certification)

Organic waste recycling

Knowledge

Technology

Using our expertise and experience acrossmultiple environmental fields, AMITA
provides optimal solutions for client needs.

Finding the optimal means to turnunharnessed, unstable waste streams
into consistent resource streams.

Unique set of technology and knowledge to provide companies withcomprehensive environmental strategy support services.

Product

Liquid fertilizer

Original
waste

Discarded food anddrink, etc.

Users

Agroindustry

Alternativerawmaterials

Chemical fertilizer

Original
waste

Discarded food anddrink, etc.

Users

Electric power companies

Alternativerawmaterials

Various fossil fuels

21

TERRESTRIAL RESOURCES BUSINESS PERFORMANCE, FY2014

Terrestrial Resources Business Performance, FY2014

Providing companies with comprehensive support
in reducing their environmental risks and costs
Performance of resource recycling plants
Change in calorific cement
raw materials output(t)
150,000

136,514
124,440 131,298

120,000
90,000146,341

136,632 138,751

Cement raw
materials

88,988

158,624 t

30,000Total amount of electric power generated
and liquid fertilizer produced

08

09

10

11

12

13

1,200,000

800,000

200,000

With full-scale recycling operations coming on stream
at our partner company in Gamagori, a new record
was set in amount produced.

3,551

1,000,000

400,000

14

(t)

5,268

1,400,000

600,000
FY2007(Kyotango City Eco Energy Centre*)(kWh)1,600,000

158,62460,0000Including AMITA
Terrestrial Resources
Manufacturing Partners

0Liquid fertilizer
production (t)

3,883

1,849

Power generated
(kWh)

174

47

96

FY2007

08

09

280
10

11

12

13

14

5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

Liquidfertilizer (t)5,268 tPower
generated

590,000 kWh

Use of liquid fertilizer is rising in the vicinity of the Kyotango
Resource Recycling Plant (Kyotango City Eco Energy
Centre), and production volume is increasing.

* The AMITA Group is the designated operator of the Kyotango City Eco Energy
Centre.

Change in metal raw materials output
(t)
4,500
4,000

Bundled service engagements
Specialty steel
materials (Ni, etc.)

4,398

Metal (Cu)

3,500
3,000

2,675

2,500
1,825
1,500 1,2041,226 1,449
1,000
2,000

2,758

3,072

1,349

1,284

1,497

22

FY2007

08

09

10

11

Specialty steel
materials(Ni, etc.)

4,201t

2,293
1,403

500
0

4,201

12

The AMITA Group is working to build closer relationships with our corporate clients by supporting theirenvironmental strategies. We are bundling multiple related services including recycling services, environmental
business consulting services, environmental certification services and others. In FY2014 AMITA increased thenumber of companies to which it provides bundled service engagements by nine, to 75 companies. The group's
total number of business partners is now 1,155 companies.

Metal (Cu)
679

737

13

14

Metal (Cu) has declined by approx. 50% since 2012,
but the amount of speciality steel materials (Ni, etc.)
produced has exceeded 4,000 t thanks to expanded
uses.

737t

66

75
1,155

companies/

companies

companies

Recycling by partner companies*3and recycling network companies (2014)

Environmental risk
management/consulting

38

Types of by-products
and residues handledcompanies

Business partner
sites served

Services provided

Creation of waste management
guidelines and procedures
Risk assessment
Advisory services on waste disposal methods

571
387

*3 AMITA Terrestrial Resources Manufacturing
Partner Gamagori Recycle SC
Examples of valuable resources handledsilica powder, polypropylene,
ZnO, Aluminum scrap,
carbon powder, wooden chip,molten metal

Outsourcing (in whole or part) *1

15

Terrestrial Resources Business

Environmental Strategy Support Services:
Business Accomplishments FY2014

companies

Services provided
Composition of reports
Document management, etc.

Waste management
outsourcing (Best Way
to Manage Waste)

Training support(seminars, education, training)

Seminars held
Seminar attendees
On-demand training
Services provided

69
1,286
43

companies

Waste management law and best practices seminar
Biodiversity seminar

Environmental law seminar*1 includes digital waste management-related outsourcing services

Accomplishments by resource recycling plants FY2014
SlurMix R / Cement materials(calorific) (t)Metal materials /Specialty steel materials (t)Ibaraki Resource Recycling Plant

22,437

Kawasaki Resource Recycling
Plant

21,528

Himeji Resource Recycling Plant

64,746

4,938

Kitakyushu Resource Recycling
Plant

29,3870

AMITA Terrestrial Resources
Manufacturing Partner Gamagori
Recycle S.C.*2

Recycling by AMITA's five plants in 2014

20,526*2 Gamagori Recycle SC is a facility of AICHI KAIUN CO., LTD. using AMITA CORPORATION recycling technology

Types of by-products
and residues handled
Factory tour participants

1,190

Business partner
sites served

2,177
865
23

FY2014 INITIATIVES AND PERFORMANCEFY2014 Initiatives and Performance

Launching of new services andexpanding business overseas
Waste, a Customer Process Visibility Service, renewable energy production, and more. We also advanced our plans for
opening a recycling plant in Taiwan, and additional recycling bases in Japan through tie-ups with partner companies.
In 2015, we are aiming to boost our sales efforts for these new services and to start expanding outside Japan in earnest.
Strategic Category

FY2014 Strategic Goals
Raise product quality, safety,
and efficiency

Hardware &Technology

Develop alternative fuels

Turn customer problem-solving
into products

Solution Delivery
Nurture expert personnel

Build out bases

Basing and
Logistics Strategy

Identify users for planned products

Increase efficiency in logistics

Strengthen remote sales

Partnering
Capabilities
Strengthen Links with Partners

Expand bases outside Japan

International Market
Expansion

Promote international cyclical systemof resource usage

Environmental
Information
Platform

Partnering
Capabilities
ProvideComprehensive
Environmental
Solutions

In FY2014, AMITA launched multiple services including the waste management BPO service Best Way to Manage

Produce and use renewable energy

24

Hardware&Technology

Solution
DeliveryBasingandLogistics
StrategyInternational
MarketExpansion

FY2014 Initiatives/Performance(1) Began renewable energy solution.
(2) Himeji Resource Recycling Plant added waste plastic, slag (processed into metal raw materials) and construction waste(processed into calorific cement raw materials) to its accepted materials.
(3) Ibaraki Resource Recycling Plant was certified by Ibaraki prefectural government as certification for superior plant.
(4) Advanced to construction planning stage for biogas plant in Minamisanriku (details on P45).

(1) Launched Best Way of Managing Waste offering in waste management BPO services line (2 engagements); also supplied
Customer Process Visibility Service (11 engagements).
(2) Increased number of waste/CSR seminar teachers.
(3) Strengthened specialized expertise through department-specific training.

(1) In 2013, one example of base expansion through partner companies was our continued partnering with AICHI KAIUN to lay
groundwork for developing bases in the Shinetsu/Southern Tohoku area.
(2) Outsourced some logistics-related operations and achieved improved operating efficiency.
(3) Consolidated Saitama and Chiba sales offices into Tokyo sales office, shifted Hamamatsu Sales Office to Gamagori Base,achieving efficiency gains.

(1) Raised customer satisfaction scores by more than 10 points though improved remote customer support and improved service
at recycling plants.
(2) Corporate website redesign brought increase in enquiries via the internet.
(3) Able to begin renewable energy production through tie-ups with partner companies.
(1) Obtained planning permission for site of plant in Taiwan. Concrete progress is being made on AMITA's first plant outside Japan.
(2) Worked with Kitakyushu City Environment Bureau to carry out a business proposal formulation study on waste recycling business in Malaysia.
(3) Based on survey work by the Ministry of the Environment, carried out feasibility studies for recycling business development in Surabaya, Indonesia
and Haiphong, Vietnam.
(4) For each base outside Japan (Taiwan, Malaysia, Vietnam, Indonesia, etc.), invite relevant public officials in those locations to participate in tours andtraining in Japan so as to strengthen links with each foreign market.

AMITA will further emphasize its capabilities
to tackle latent waste management problems
through the following 3 Key Initiatives

Terrestrial Resources Business

CLIENT PROBLEM SOLVING INITIATIVES

Client Problem Solving Initiatives (Key Initiatives for 2015)

As client problems and needs change over time, AMITA is always working to enhance the quality of its services to better address them.

Client Problems

The AMITA Group's Key Initiatives for Improving Quality of Service

Today, many companies need to cut the cost of their environmental
operations, even as the environmental processes they are

01

Providing safer and more reliable
recycling services

Hardware & Technology

responsible for increase. As a result, many companies are plunging

By expanding the range of waste that each of our resource recycling plants can handle,

how to create environmental value and make their environmentalof our waste acceptance and alternative raw materials supply capabilities.

in with cost-cutting measures before taking the time to strategize on
activities more sophisticated.

Major waste management problems facing corporate
environmental operations departments

Partnering Capabilities

and building out our recycling network of partner companies, we will enhance the reliability

02

Cutting recycling costs

Hardware & Technology

Basing and Logistics Strategy

Partnering Capabilities

AMITA is working to develop services that emphasize a high cost-benefit ratio, rather thanmerely cost-cutting, through larger economies of scale. In particular, we are aiming to
Developing personnel

Improving
operational efficiency
Ensuringrobust safety
management

Cutting recycling costs

Shifting fromincineration andlandfill to recycling

reduce the recycling costs of problematic waste and to increase the amount of valuable
materials recovered. Another way that we are contributing to lower costs for clients is byexpanding our recycling business with partner companies in regions that currently sufferfrom high recycling costs.

03
Strengthening
global warming
countermeasures

Collecting
timely data

Strengthen Environmental Strategy
SupportHardware & Technology

Solution Delivery

Through developing and enhancing our recycling services, environmental training andeducation, renewable energy production, Information Resources Business services-(environmental certification, waste management systems), etc., AMITA will strengthen thelineup of services that support clients' environmental strategies. In order to resolve clients'organizational challenges, we will also strengthen our capability both to make proposals
driven by clients' corporate policies, and to serve as an information hub.
Basedased on AMITAT Group client survey conducted in 2014. Size of the thoughtTAballoon corresponds to prominence of the problem in the minds of our clients.

For details on solutions for overall cost cutting and strengthening compliance systems for environmental operations departments, see P8.
For details on solutions to our clients' organizational issues, see P28.

25

INITIATIVES FOR 2015

Initiatives for 2015

Accomplishing Our 3 Key Priorities for 2015
(For initiatives outside Japan, see P12.)

Hardware & Technology

Solution Delivery

AMITA is developing new recycled products that connect the recycling needs of waste

Since the 1990s, AMITA has been developing software services that minimize

generators with the raw materials needs of recycled-materials user companies.

operating burdens and risks for clients' environmental operations. In 2014, weCurrently, of all the resources the cement industry uses, only 10% are recycled. AMITA

launched an outsourcing service for waste management operations that harnesses theis expanding its focus beyond the cement industry to develop recycled resources

development knowledge of our Information Resources Business.

catering to the steel and nonferrous metal industries, among others. We also plan toMoving forward, as we promote optimal solutions for each client's business plan andincrease the range of waste types accepted by our recycling plants and invest in

corporate environmental strategies, we will also develop new outsourcing offerings

pre-processing and post-processing facilities that will enable us to better meet thethat support companies' environmental CSR activities, and strengthen our various

needs of waste generators.

consulting services.

Major development and enhancement items
Develop recycled resources
Increase efforts to develop alternative raw materials for the steel andnonferrous metal industries.

Evolution and future direction of solution services
1977
HardwareBy introducing new equipment and revising processes, expand the range of
wastes currently accepted. (Accept more kinds of waste with unwelcome
chemical contents such as those with high fluorine or chlorine, varieties ofsludge with high moisture content, etc.)

From 2015

Recycling
Solution services

Expand range of waste types accepted
Product
Development

1992

Risk assessment/Proxy on-site confirmation/Advisory
education and training/DVDs

Software/Knowledge(Consulting IT Systems)

Digital waste management
systemBest Way to Manage
Waste BPO

Offer optimized
menu tailored to
a company's
environmental
strategy

Expand range of waste types accepted2015 Objectives

Improveproductivity

Through the above initiatives, implement at least five newwaste applications.

Install drying equipment to reduce manufacturing and procurement costs.
Reducing moisture content raises the quality of recycled products.
Implement real-time information sharing between AMITA plants, to determine
the client's optimal waste acceptance location.

1. Offer solutions driven by client's overall corporate strategy (see P28)

Assign one point person for overall environmental strategy support at each client company, and additional point
people for individual services such as risk assessment and digital waste management. Compare client company
perspective and product offerings to create optimized support menu.

2. Offer comprehensive environmental services
By integrating with our Information Resources Business, offer comprehensive environmental solutions thatincorporate digital waste management systems, environmental certification services, and CSR support services.

3. Strengthen consulting services
Improve the quality of existing services—such as consulting on how client companies can reengineer their supply
chain to reduce the volume of waste generated—and support the obtaining of nation-wide collection permit.
From 2015, the Terrestrial Resources Business will be largely merged with the Information Resources Business, and as the Environmental Strategy Design Business will provide services that support companies' environmental strategies (see P62).

26

Partnering Capabilities

As we expand our resource recycling bases, key considerations are enabling

To achieve 100% recycling, stronger links with partner companies through the supply chain fromAMITA to collect waste more easily, and to be better connected to companies using

waste to recycled resources are needed.

recycled materials. From 2015, AMITA plans to expand bases through tie-ups with

In 2015, in addition to entering new business arrangements involving five plants of companies

Terrestrial Resources Partners and also to strategically exploit marine transport inusing recycled materials, AMITA plans to secure tie-ups with at least three new companies thatorder to expand our service provision area and reduce costs.

will become AMITA Terrestrial Resources Partners. Also, we will work with companies using
recycled materials to solve issues that impede recycling by waste generators, such as problematic

AMITA Terrestrial Resources Partners

waste content and logistics, process and cost issues. By doing this, we will expand our

AMITA Terrestrial Resources Partners are a network of collaborating companies to which AMITA
supplies terrestrial resources recycling technology. This facilitates the entry into the recycling
market for partner companies, and creates synergies with existing businesses. For AMITA, it
accelerates the pace at which we can expand our business and allows us to make use of partnercompanies' regional networks. For the regions into which we expand, it promises lowers recycling
costs and increased recycling rates. Finally, this business model offers society the environmental
value of preserving natural resources.

Overview of Recycling Bases and Build-Out Progress
Opened 2013

Specific Initiatives to Build Relationships with Important Partners
Companies using recycled materials Add 5 plants (2015)
In 2015, AMITA aims to establish business relationships with five
new partners around Japan (such as cement, steel, nonferrous metal
and chemical makers) in order to boost the volume of recycledresources throughput.

Scheduled to Open 2015

AICHI KAIUN CO.,LTD.
Gamagori Recycle SC

Partner plant serving
Shinetsu/South Tohoku Area

Kyotango Resource
Recycling Plant

Administrative &Research Institutions
Steel/Nonferrous/
CementHimeji Resource
Recycling Plant(Recycled materials users)

Ibaraki Resource
Recycling Plant
Kawasaki Resource
Recycling Plant

Kitakyushu Resource
Recycling Plant

engagements with these companies.

Resource Recycling Plants(AMITA-owned)

AMITA Terrestrial Resources Partner Plants
More planned for the future

AMITA Terrestrial
Resources Partners:
Add 3 partners (2015)

Cement raw materials
Metal raw materials
Electricity/Gas/Energy Resources

Strengthen ties with Japan's
Ministry of the Environment,
Institute for Global
Environmental Strategies(IGES), city of Kitakyushu, etc.

Municipalities(Waste generators)

Consumers
Manufacturers(Waste generators)

Waste

Product
waste

Cement Plants
Steelmaking Plants
Nonferrous metals Plants

Based on distribution of recycled product users and waste
generators, create geographical commercial territories andenlist partner companies to expand.

Recycling Network Approx. 300 companies

Collection & Transport Companies

AMITA pursues cooperation in the recycling industry,
particularly in the handling of problematic varieties ofwaste that AMITA's own plants can't readily handle.

Along with land transport, work with marine transportcompanies on supply of recycled materials and supplyof waste to resource recycling plants.

27

Terrestrial Resources BusinessBasing and Logistics Strategy

Deeper support for client companies' environmental strategies

2015
Spotlight

Common organizational issues forcompanies' environmental operations departments
Along with the environmental issues facing specific operating sites,
many companies' environmental operations departments recognize that they have organizational issues.

Disconnect between the overall environmental
strategy adopted by company headquarters, and themeasures taken on the front lines at operating sites

case. 01case. 02case. 03
It's all laid out
clearly, right?

Refer toall these!

NO!
What?!
We have toredo it?!

HQ

Front-line
site manager

But we can't use any of that on-site...

Headquarters

The disposal providers and disposal
methods chosen at front-line sites
do not conform to the policies andobjectives laid down by headquarters,
and so the disposal provider selection
must be redone.

Lack of trust
between HQand front-line
sites

28

Lack of information and know-how sharing
between operating sites, as well as between
HQ and operating sites

The waste management systems andoperating manuals that headquarters
adopts don't fit actual conditions at
front-line sites, so they are largely
ignored.

Environmental
objectives set
by HQ notbeing reached

Front-line
site manager

case. 04
We need toolsthat do this andstandardized
formats like that...

Sure, sure, we'll
implement thosewhen we have time...

case. 05

Seminar at HQ

That'simpracticalin the field!

We alreadycoveredthat backon-site!

Headquarters

HQ fails to recognize the need forstandardized tools that front-line sites
know they need from experience, andgives these requests low priority.

No means ofsharing information/
know-howPlant B

On-site training

When training sessions are held at
HQ, there is too much overlap withtraining done on-site, or the things
learned are simply impractical in thefield, limiting the benefits.

Efficiencyof work at
front-line sites
declines, costs
increase

Plant A

HQ

Plant C

We're not harnessing
people's collective
experience...

The sharing of information/know-how
between operating sites, which HQ
wants to see in order to raise theoverall level of performance, is not
happening.

Quality ofwork atfront-line sites
declines, risks
increaseTerrestrial Resources BusinessTwo approaches to helping clients solve these problems
In 2015, AMITA will implement two initiatives intended to increase the quality of environmental strategy
support services by solving these organizational issues for companies' environmental operations
departments: offering custom-tailored solutions driven by the client's environmental policies, and hub
functionality connecting the client's HQ and operating sites.

01
Solution

Offer custom-tailored streamlined solutions to environmental issues,
driven by overall environmental policies of the client

Here's how AMITA will strengthen its sales
1

Because AMITA has sales offices from Sendai
to Kitakyushu, we can finely tune sales
activities to the particular characteristics ofmunicipalities and regions across JapanSo, beginning in 2015, AMITA will implement thefollowing three measures in order to support companies
in achieving their environmental objectives and reducing
their internal inefficiencies.
1

Get a clear understanding of the overall
environmental mission, policies and objectives of
the client company

We can offer a wide spectrum of solutions
based on accumulated experience, providing
environmental support to many companies
across Japan.

2

However, since in the past the emphasis has been on
solutions to the problems of individual client operatingsites, AMITA has not adequately tackled how to bridge
the gap between a client's HQ and its front-line sites.

Identify an environmental strategy support
programme that reflects the company's specificcharacteristics: scale, industry, number ofsites, budget, etc.

3

Based on this programme, implement multiple
environmental proposals that contribute tosolving problems between the client's HQ and
operating sites.

2

02
Solution

Offer hub functions that connect the client's HQ with its operating units

Companies that have multiple operating bases will
ideally share information between front-line sites about,for example, environmental problems and instances ofmeasures taken to address them at each site, and theknow-how gleaned from those experiences, so that all
the sites can enhance their operating effectiveness.
Thanks to a nationwide network of sales offices, AMITA
provides attentive service to clients, obtaining a detailed
understanding of circumstances at both the client's
headquarters and operating sites. This is reflected in thefrequently received feedback that, "AMITA personnel
are more familiar with our company's environmental
information than our own personnel."
Harnessing this information and our specialized
environmental expertise, AMITA can serve as a hubconnecting the client's operating sites in orderto support the sharing and circulation of criticalinformation and know-how as a stepping stone todeveloping a value-creating environmental strategy.
Through these efforts, we aim to add even more value
as an environmental partner.

Client company HQ
Problems withcompany-wide environmental
policies/objectives/priorities
Sharing of proposals to achieve
company-wide objectives andnecessary information about
front-line operations

Interviews aboutcompany-wide
policies/objectives

Identify support programs consistent withclient company's corporate policies
Use area sales efforts tomake proposals consistent
with company policy andobjectives, and sharecritical information with HQand other operating sites

Interviews about
status of initiatives
and challenges
at front-line sites

Individual plants of client company

Plant A

Plant B

Plant CIn summary

Decide on strategy support plan
Contribute to
execution of client company's
environmental strategy
Information collection/sharing

Proposal
29

EXAMPLES OF SERVICES OFFERED

Examples of Services Offered

AMITA: A Vital Partner in Environmental Strategy

iew

er Interv

CustomAMITA, working forthe implementation ofan environmental strategy for
Asahi Soft Drinks Co., Ltd.

Circa 2005

Circa 20102012

Amendments to laws clarified the
responsibilities of companies that produce
emissions. There is an increased need to
conduct waste-management activities withheightened rigour.

Events such as the 2010 Convention on Biological Diversity (CBD) in Aichi Prefecture havestimulated an increasing societal and corporate focus on environmental and CSR activities.
Against this backdrop, environmental administrators are expected to increase the scope of
their management activities while proactively planning to achieve gains in sales and brandstrength through solutions to environmental issues. With this aim, the first step was toestablish a PDCA Cycle for problem solving.

The scope of environmental business activities is
expanding, with requirements including adherence
to a broad range of applicable laws and disclosureof information, all while staff are regularly rotating
in and out. Issues to be addressed include risk
mitigation, minimizing of workload, andstandardization of practices.

Setting targets onthese issues

Reconfirm fundamental knowledge relating to the
Waste Management and Public Cleansing Act, andmake sure information relating to changes,
including revisions to the law, are actively conveyed
throughout the business, enabling awareness ofpotential risks on the part of relevant staff.

Individual staff should be mindful ofenvironmental issues in their area of work,
strengthening their ability to identify issues inorder to plan the necessary reforms andimprovements.

Using reforms and improvements overenvironmental issues as a means ofimproving understanding of these issues
throughout the company, facilitate effective
implementation of such measures.

Introduction of systems serves to boost businessefficiency while preventing an over-reliance on
individuals, and reduces the risk of legal
infringements due to human error.

AMITA solutions andtheir outcomesTraining was provided on waste-related risk,
including legal revisions and real-world examples
from the beverage industry. The aim was tostrengthen awareness and convey these principles
throughout the business, improving the level ofmanagement throughout the company as a whole.

Workshops were held on the theme of
biodiversity, and identifying problem areas
within the business practices of Asahi Soft
Drinks. Given a methodology for identifying
areas in which their company may havedeviated from best practice, individuals
became able to act independently to address
such issues.

By providing good examples of environmental
and CSR activity, we explained the key points
to achieve understanding of these issues
throughout the company. Setting concretetargets for activity while uniting theenvironmental policies of the group as a wholeenabled improvements in the company’s ability
to put activities into effect.

The introduction of a digital waste management
system made possible such gains as a reduction
in workload. This was part of a standardization ofbusiness practice that serves to prevent
over-reliance on individuals, while realizing
improvements in the level of compliance.

Issues faced by andneeds of Asahi Soft
Drinks Co., Ltd.

We are introducing AMITA’s education and training schemes
Human
Resources in order to cultivate staff who can think and act independently,
Development recognizing the importance of our business.
In order to ensure an understanding of environmental and CSR activities throughout Asahi Soft
Drinks, we decided first to foster an organizational culture that was independent. This isbecause, in order to sustain such activities, all relevant staff must be aware of the importanceof our business, as well as of risk, and work with a sense of importance and worth. As part ofour moves to foster an independent organizational culture, the environmental team leaders fromall of our facilities were required to attend regular AMITA training sessions. Through thisexternal assistance, we wanted to enable individual staff involved in environmental activities tobecome able to understand the influence of our environmental business on society and theenvironment, as well as on our own financial success, thereby acquiring strong problem-solving
skills.
The training schemes we are running have been adapted from standard AMITA courses tomatch the internal situation of our company, and the issues we face. AMITA’s training is
adapted to our business practice, is easy to put into practice following the sessions, and in
addition to its proven track record and expertise, it is striking how the courses are designed tocover everything from the initiation of a project through the identification of issues to the drawing
up of countermeasures and the eventual follow-up. The schemes are highly rated by trainees,
whose queries are answered enthusiastically. We intend to continue to make consideration of astructure focused on strong performance the basis of our environmental business PDCA.

ExamplesEnvironmental andCSR training programs
1 Backdrop to environmental
and CSR activities

2 Relationship of Group vision
to ISO26000
3 Group work
4 Key points for operations
Project planning involving staff
5 Common features of past
successes
6 Group work

Setting targets for CSR andenvironmental activities
7 Linking to profit:
Past examples

Building a
structure

Building an IT structure that promotes organizational integrationand minimizes human error.
Passion and faith in Total Support were the deciding factors.

Although human resources development through the training programs have been under way for some time,
because of profound changes both inside and outside the company, employees are often transferred after 1-3
years in a given post. We needed a system that could respond flexibly to internal organizational changes,
including our switch to holding company status. But standardized practice makes a company susceptible toover-reliance on individuals, and there is a limit to how far issues including problems during handover of roles
to new staff, and human error, can be dealt with through education alone.
Then, in 2012, we introduced AMITA’s digital waste management system, creating a structure that increased
efficiency, while minimizing the risk of over-reliance on individuals, and providing measures to counteract
human error.
The reasons we chose AMITA’s digital waste management system included AMITA’s long track record in thefield of 100% recycling, along with the diversity of solutions they were able to offer, and the enthusiasm of theirstaff.Things didn’t end with the introduction of the scheme: along with training to help practitioners respond tolegal revisions, we judged that they could continue to help us make improvements. It was a relief that, aside
from systems, we could rely on AMITA for total support in terms of recycling, education, legal matters, andmore.
By introducing the system we reduced risk and workload, while the AMITA training has helped us to continue tofoster our own company climate. I feel that through the dual implementation of systems and measures, we cancontinue to help our specialist staff to step up their activities.

AMITA is a partner you can trust to implement environmental strategies
Limited resources mean it can be difficult for a company to expand both quantitatively and qualitatively while developing specialists in the various fields of its business. External partners canhelp to bridge this gap. We needed a specialist partner that could go beyond the client–service provider relationship by simultaneously providing extended follow-up care and risk response
and participating in strategy formulation and planning. In our case, AMITA is exactly that kind of presence.
Satoru Komaki, Senior Manager
Environmental Affairs Group
Asahi Soft Drinks Co., Ltd. Quality Assurance Department

30

Create Stable Sources of Alternative Resources,
Linking Waste Generators and Users of Recycled Products

Terrestrial Resources Businessw

r Intervie

CustomeAMITA’s 100% recycling service builds cyclical resource systems by linking waste generators and resource users.

Steel, Nonferrous Metal,
Cement Makers

Logistics
Partners(Users of recycled products)

Manufacturers(Waste generators)

Partner and Client Voices
User of Recycled Products

Tokuyama Corporation
Resource Recycling Sales Group

Logistics Partner

Waste-producing Company

Toshiba Corporation
Semiconductor and Storage Company
Himeji Semiconductor Factory

Assistant Manager

Himeji Koun Co., Ltd.
Representative Director and PresidentManagement Department,
Environmental Conservation

Masaru Sasai

Shigehiko Nakamura

Tasuku Watanabe

Realizing Stable Procurement andQuality of Recycled Fuels and Materials

Standing Side-By-Side to
Broaden Scope of Transport Activities

Achieving Zero Factory Emissions
through 100% Recycling Activities

Our relationship with AMITA goes back more than 15 years.
Thanks to AMITA's diverse network of waste generators andmanufacturers of recycled products, the quantity of recycled goods
we receive are reliably tailored to meet our demands. Quality
requirements of the goods we order also are flexibly met, alongwith a stable supply of raw fuel and materials that meet thenecessary standards.

Our first dealings with AMITA came in 1977, when we conductedmaritime transport of dust they were involved in recycling. At
present we are engaged in transporting the cement raw materials
they produce at the Himeji Resource Recycling Plant, which are
directed at makers of cement.

Since 2000, the whole Toshiba Group has been working toward zero emissions(which entails a landfill rate of less than 0.5% of total waste produced). Fifteen years
ago, the constituents of waste, along with cost issues, meant that much of our waste
was sent to landfill. After consultation with AMITA, we saw that their composite
technology meant they could provide recycling services to suit our budgets, and weentered a working relationship. Because the limited space in our own factory meant
it was difficult to store waste for significant periods, AMITA helped us to procure asmall lot for exactly this purpose from a third party.

When we need to gather raw materials, there are manyrequirements, including the conclusion of various contracts, credit
management, and prior consultations—AMITA takes care of all ofthat for us, which is a great help. And they give us all the latest
recycling information from across the country, which is also very
helpful.
We hope to continue to use a lot of combustible waste in the future,
and as our business partner we have high hopes that AMITA willcontinue to supply that combustible waste.

In any such new endeavor there are various hurdles to be
overcome, including consideration and arrangement of transport
methods, acquisition of the necessary permissions, and so on.
And it is by clearing such obstacles that this company is able toacquire the necessary experience and technology to further
increase the freight volumes we handle. As a business partner,
AMITA consistently presents us with new goals and benchmarks,
and joins us in solving problems and overcoming obstacles in agreat spirit of unity, coordination, and closeness.
Because shipping companies constantly need to make daily
improvements to unloading methods and other aspects of theirbusiness, I hope to join in many new and successful undertakings
with AMITA in the future.

We also entrusted AMITA with waste that we had previously disposed of with thehelp of a cement company. We realized that costs could be kept to a minimum byentrusting all such activities, from the maintenance of crushers to price and quality
negotiations with contractors, to a single specialist company.
Now that we have achieved zero emissions*, the next issue is reducing the costs
associated with waste disposal. The unique knowhow and network AMITA offers
means that we have great expectations for their future assistance in such matters as
further technological development and cultivation of new business.
*Himeji Semiconductor Factory has met the criteria for zero emissions since fiscal 2007.

31

Information Resources
Business

Creating substancial new value
through the collection and compilation of information.
32

Supporting client environmental strategies
by leveraging information resources

Information Resources BusinessOne strength of the AMITA Group is our information compilation
capabilities. Our ability to provide a stable supply of recycledcalorific materials of consistent quality from waste that is bothinconsistent in properties and erratic in supply stems from ourknowhow in collecting, analyzing and combining information about
waste composition/generation and the specifications demanded byusers of our products. Also, sustainable resource usage demands
traceability of products and resources that only IT can provide.
Up through 2014, we provided our main IT-based environmental
services through our Information Resources Business, one of three
primary business domains. From 2015 on, in order to provide morecomprehensive environmental strategy support services to corporateclients, we have merged the Information Resources Business into
our Terrestrial Resources Business to form the new Environmental
Strategy Design Business.

Terrestrial
Resources
Business

From 2015

Regional
Resources
Business

SHIFT

Information
Resources
Business

Serves as IT platform
supporting other twobusinesses in providing
services based on
environmental
information

Environmental Strategy Design Business

Previous relationship among businesses

Regional Systems Design Business

BUSINESS POLICYBusiness Policy

Information
Resources Business

1

2

3

Waste management
systems
Digital waste
management
systemEnvironmental
certification
services

CSR/environmental
operations
personnel
support services

Terrestrial
Resources
Business*For details of this business reorganization see P62.

33

FY2014 INITIATIVES AND PERFORMANCEFY2014 Initiatives and Performance

Using AMITA's Environmental Information Platform tostrengthen foundations for offering services
By 2012, the market in Japan served by our Information Resources
Business for environmental information services such as waste
management systems, environmental certification auditing andenvironmental communications had grown to approximately 21
billion yen, roughly 2.5 times larger than it was 10 years before.
By cultivating expert human resources and reinforcing establishedchannels, AMITA, a pioneer in the field of environmental
information, is strengthening the information platform underlying
our services in this field in order to open new markets and growour customer base.

Environmental information
market growth trend in Japan(Unit: 100s of
millions of yen)

2.5x bigger
in 10 years

250
200
150
100
50
0

2002

2003

2004

Waste management systems

2005

2006

2007

2008

2009

2010

EMS certification (auditing, registration)

20112012 (Year)

Environmental communications

Source: Japanese Ministry of the Environment

Information Resources Business Initiatives for FY2014
Strategy component

34

FY2014 Strategic goal

FY2014 Initiatives and accomplishments

Building
communication
channels

Increasing and strengthening
contact centre capabilities
Strengthening web marketing
capabilities

1) Developed marketing approach for new products based on contact centre.
(Fielded 1,633 calls, up 8% from previous year.)
2) Redesigned AMITA CORPORATION website. A completely new front page and additional new content makes
the website a more effective marketing tool. Enquiries via the website were up 20% over the previous year.
3) Redesigned CSR JAPAN website. Improved search functionality and social media integration.

Developenvironmental
business
professionals

Strengthen links with externalorganizations
Encourage knowledge
acquisition

1) Trained two external auditors in environmental certification.
2) Analysed customer management database storing customer feedback entered by salespeople todiscern market trends and latent needs, to guide sales strategy.
3) Held trials of a monitoring service by outside experts to explore developing new services for
CSR JAPAN website.

Next steps for
information systems

Improve efficiency and quality ofservices through adoption of IT
platforms
Raise sales capabilities throughadoption of IT platforms

1) Rolled out new, cloud-based version of digital waste management system.
2) Developed the new environmental BPO service "Best Way to Manage Waste".
3) Tailored sales strategy to clients based on data mining of sales and marketing data.

This service offers companies reduced
waste management costs while ensuring greater compliance
Service overview and key points

2014 Accomplishments

Since 2008, the AMITA Group has been offering an efficient ASP service that we call"digital waste management". It enables customers to appropriately and efficiently
manage contracts and billing required in the disposal of industrial waste.

In 2014, AMITA pushed to sign up entire companies, not just specific businesslocations, for this service. We are also carrying out an annual system upgrade
based on user feedback. Improved usability provides customers with a unified
waste management platform.

Management
costs

Trend in number of businesses andplaces of business

Compliance(No. of businesses)

200

214

Illegaldumping

Operational
overhead

163

150

Information
management
across multiple
facilities
Management oflarge document
volumes

AMITA's
digital waste management
is the solution!

All necessary information iscollected and managed
on our ASP service

400

77
50

0

Thoroughcompliance

Reducedmanagement
costs

Digital waste
management kills
two birds with
one stone!

Digital waste management is a service offered for a fixed monthly fee per placeof business. At deployment, a full menu of support services is offered including acompliance checking of contracts/billing and training for users. This service takes
advantage of AMITA's specialized knowhow as a waste management company toprovide a platform for many (mainly publicly-traded) companies to manage theircontracts and billing.

45

200

135

428

543

651

775

851

2009

2010

2011

2012

2013

2014

Businesses

Companies ranked as Japan's
Top 20 "environmental brands"
signed up in FY2014:

800

600

119

100

Violations

236(No. of placesof business)0

Signedup

6 companies
20 companies* Based on "Environmental Brand Survey
2014" by Nikkei Business Publications
Inc. Rankings change yearly.

No. of places of business

Challenges and future initiatives
Challenges

Large engagements: enhance capability to deploy service to hundreds of business locations
simultaneously
Future initiatives

Achieve faster deployment speed through strengthened and more efficient back-office
functions and internal coordination/sharing of system proposals and sales methods
For a special section covering our waste management outsourcing offerings as a whole, see P8.

35

Information Resources Business

DIGITAL WASTE MANAGEMENT SYSTEM

Promotion of Business Activities #1: Digital Waste Management

ENVIRONMENTAL CERTIFICATION

Promotion of Business Activities #2: Environmental Certification Service

Making manufacturing data more visible
to promote green procurement and green consumption
Service Overview

2014 Performance

In order to prevent illegal logging and the overexploitation of fisheries, AMITA
offers auditing services for ECO certification of sustainably produced andmanufactured goods. Through these services, our aim is to promote green
procurement and environmental activities on the part of businesses.

Last year, we held seminars to introduce eco-labelling schemes to major
businesses engaged in the procurement of materials both from across Japanand from elsewhere. In addition, by increasing the number of staff certified as
primary auditors, and participating in the training of auditors from externalorganizations, we have promoted improvements in the quality of inspections.
FSC FM Certification

Main categories of environmental certification services offered by The AMITA Group
Forest Stewardship Council® Forest Management Certification
Forestry
Certification

Total area ofcertified woodland in Japan

Marine Stewardship Council Chain of Custody Certification

In addition to the services listed above, we also offer forestry-related assessments in line with the standards of organizations
including Forestock and the PEFC.

A typical forestry assessment may include both Forest Management (FM) andChain of Custody (COC) certification.

Product
Manufacturing

Distribution

Preferences
Taste

New value system
based on choosing

36

67

MSC COC certified

FSC FM Certified

FSC COC certified

Japan-1 (+1, -2)-19+6 (+14, -8)

AMITA-1 (+1, -2)-7+6 (+9, -3)

Key Issues
Respond to requested improvements from the certified companies and organizations
that represent our client base, including faster response times and revitalization of themarket. Note: For the results of our customer survey, see P59

Conduct sales and promotion of our certification schemes as one aspect of ourcomprehensive menu of corporate environmental strategies.

FSC certified products

AMITA is the Japanese partner of FSC-approved certifying bodies the Soil Association Woodmark and SCS Global
Services. In addition to FSC®N001887, as a certifying body fully approved by both the MSC and the ASC, we arealso able to offer both MSC COC and ASC COC certification evaluations, along with ACC-MSC-020.

Total certified locations in Japan

1,091

Future initiatives

certified products

Certified Forest

41

Key Issues and Future Initiatives

Price

DesignAMITA-certified
locations

In line with moves toward certification among Japan’s aquaculture businesses, we aim to boost activity in thearea of ASC COC certification.

Retail outlet

User
friendly(As of end of Dec. 2014)

Total certified locations in JapanFSC Certified

Certification for appropriate processing and distribution of produce from environmentallyand socially sustainable aquaculture facilities

Budget

MSC COC Certification

Net change in number of locations, 2014

Aquaculture Stewardship Council Chain of Custody Certification

COC certification

246

419,636ha

Certification for appropriate processing and distribution of catches from sustainable
natural fisheries.

FM certification

AMITA-certified
locations

299,864ha

Forest Stewardship Council ® Chain of Custody Certification

Evaluation Scheme(As of end of Dec. 2014)

AMITA-certified
woodland area

Evaluation of environmentally, socially, and economically responsible forestry
Evaluation of the appropriate processing and distribution of timber from certified forests

Fishery
Certification

FSC COC Certification

Improve business efficiency and training of auditors to improve speed of response and qualityof service.

Consumers

For an outline of plans for structural reorganization including Environmental Certification Services, see P63.

CSR/Environmental Administrator Support Site & Free Information Service

Overview of Information Service andWebsite Daily AMITA Update
Daily AMITA Update is a website providing
explanations of environmental laws andintroducing the latest environmental topics
with a focus on waste management.
In addition to the services outlined above,
AMITA also offers regular information bulletins
including reports on recycling, and an e-mailnewsletter aimed at environmental operators.

Usability and the valueof information

Changing the way information is presented
Regularly publishedbulletins providing
careful explanationof environmental
themesInformation services
making full use ofboth electronic
and print media

2014 Performance
In 2014, as well as continuing to expand our infrastructure through measures
including enhancements to our website CSR JAPAN, services such as Daily
AMITA Update were placed at the heart of an effort to step up our provisionof content addressing issues faced by environmental operators.
Performance of key AMITA Group media
Free information service

Details http://www.amita-oshiete.jp/

Daily bulletins
A practical site for CSR/Environmental operators

Daily AMITA Update
Building a platform
for the provision ofenvironmental
information

Daily AMITA Update

E-mail newsletter

E-mail newsletter

Recycling bulletins

Recycling bulletins

Recycling bulletins

2004

2006

2008

Approximately

240,000 users per year
Approximately

Linking ourcustomer databasewith our website toprovide information
closely tailored toreal customer issues

In the future

CSR JAPAN website overview
Even as many companies complain that the CSR reports
they have printed go unread, in fact more and more
people (e.g. investors and students) are choosing tosearch for the ideal venture on the basis of a company’s
CSR activities. This website provides a convergence
between those providing and those seeking informationin the field of corporate social responsibility. In 2011
AMITA launched CSR JAPAN, a website enabling
exploration and comparison of CSR information from a
range of companies, and which continues to provide aplatform for the promotion of CSR activities in Japan.
In 2015 CSR JAPAN introduced a charge for access to some services.

640,000 page views

E-mailnewsletter

BroadcastfaxingSent to over

25,000 recipients
Other services, including
Daily AMITA Update
newsletter,
Recycling bulletins, andEnvironmental
Certification News

“Bringing People’s ‘Likes’ to You”

Approximately

30,000 users per year
Approximately

150,000 page views
Carried reports from265 companies

The AMITA Group’s various websites and information services attract a combined total of approximately
400,000 users per year, making us Japan’s leading provider of information aimed at CSR/Environmental
administrators.
The monthly page view figure for the website Daily AMITA Update listed on P35 of our Fiscal 2013 Annual Report was incorrect.
Please accept our sincere apologies.

Key Issues and Future Initiatives
Key Issues

We hope to increase the number of queries to the Daily AMITA Update
website, along with the number of registered users.
We hope to remodel the CSR JAPAN website from a free service to a
profit-making enterprise.
Future Initiatives and Goals

Details http://www.csr-japan.jp/

Achieve a 50% increase in registered users of Daily AMITA Update byimproving conversion rates by 1% and providing superior content basedon analysis of user responses.
Boost the number CSR JAPAN users by expanding the range of available
functions and content, while introducing charges for services offered on
the site.
The Information Resources Business introduced on P32–P37 was in 2015 combined with our Terrestrial Resources
Business as the Environmental Strategy Design Business.
Through utilization of the core products of the Information Resources Business to provide Corporate Environmental
Strategies, we aim to bring added value to the supply chain as a whole.

37

Information Resources BusinessInformation service to support company CSR/Environmental
administrators seeking solutions to a variety of issues

AMITA's free
information
services

Regional Resources
Business

Establishing a new social systemby harnessing a region's neglected resources.
38

Identify neglected resources in a given region andEncourage a new social model that puts themto the best possible use
Make the region safe, livable, vibrant andprosperous
Since the Industrial Revolution, in the name of increased productivity andoperational efficiency, the advance of industrialization and economic globalization
has dissolved longstanding bonds among the inhabitants of local regions, andbetween them and the natural environment. As a result, the connections between
different livelihoods—work in the forests, work in the fields, work at sea—havebeen severed, and regional industries have failed to cope with the demands ofmarket forces. The mission of AMITA's Regional Resources Business is to help
create a new social model that reconnects these livelihoods of forests, fields andsea with patterns of life in urban areas. The objective is to fully harness neglectedresources within a region in a cyclical system, saving them from going to waste, in a
way that will revitalize industry and create employment and economic dynamism.

Negative
Existing regionalsocial system:a vicious
spiralForests

Regional Resources Business

MISSION

MissionPositive

New regionalsocial model:
a virtuous spiral

Forests
Forestry

Town

Agriculture

Fisheries

Sea

FieldsDisconnectedindustries

Forestry

Town
Industrial decline
Erosion of public finances

Sea

Agriculture

FieldsFisheries

Loss of population/
Lack of successors

Comprehensive Cyclical System of Resource Usage
A mechanism for creating mutually beneficial relationships among livelihoods
related to the forest, fields and sea within a given region. A new social
system introducing core infrastructure that facilitates the emergence of an
intra-regional cycle of resources, energy, people and economy, thus creatinga stable foundation for society and halting the advance of depopulation.
39

Building a prototype of a Comprehensive Cyclical System ofResource Usage in the town of Minamisanriku,
a stepping-stone to a roll-out in Japan and SE Asia.
STEP 1 Forging a Comprehensive Cyclical System of Resource Usage
The Minamisanriku Model:

A Prototype of a Comprehensive Cyclical System of Resource Usage
Since 2011, the AMITA Group has been building a prototype of a Comprehensive Cyclical System ofResource Usage in the town of Minamisanriku in Miyagi Prefecture. The Minamisanriku Model uses
biogas and wood pellet production as its core businesses while developing collateral businesses suchas symbiotic farming and medicinal plants. Efforts continue toward completing the model system in 2018.

Core Business Rollout Sequence and Investment Scheme (Outline)
Operate/Provide
operational
support

Town
Fisheries

CollateralBusiness

Sea

Agriculture

FieldsRegional
IndustryCore business provides the backbone linking
collateral businesses and regional industries

A secondary infrastructure that
supports municipal infrastructure,creating a long-term, stable profit centre

no
m
ou
s

at

he
Ele

ct

r

+Firewood
station

ue

ke

ll et

s

to c

Aq

O

Medicinal plants
Algae-based feed

ing
ss
ce
t
pr os
en
ral
ul t u due e m
Ag r ic r esi x c r

Pe

r oc

an i

oo

Fieldsts

Boiler

Lives

rg

dp

af

Pelle

Wood pellet
facilitys

Disasteremergency
response basefec s ludge

gy
ner

Ag
proricultu
duc ralts

Se

Recovery of symbiotic
farming, community branding,
improved competitivenessHe at e n e r g y
rti l i ze r /essi n g r esi dHeat eHot spring
Locavore restaurant
Industrial tourism

uid

BiogasfacilityooRegional
Industry

Pellet stove boiler

Turn waste into
resources
Disaster-resistanttown

Forestry

Foodtewas soil
t
Nigh

Town

to

Core
Business

Forests

Waste
sorting station

Au

Core
Business

Regional
Industry

Liq

Create Comprehensive Cyclical System
of Resource Usage thatmaximizes synergies between businesses.

Tim

Saw ber odus
ft, w fcut
as
te

af

CollateralBusiness

Regional
Industry

40

Pellets

In initial phase, take advantage of public funding,
subsequently ramp up business investment level.

Architecture of a Comprehensive
Cyclical System of Resource Usage

CollateralBusiness

Investment/
Build
infrastructure

FSC® forest
certificationic

Planning &Consensus
Building

ials
ter
ma
on
i
t
c
tru
ns
Co

Jo
b

Min
Ab erals
un
da Nu
nt tr
wa iente tsrm

Investment
SchemePilot project/
Feasibility
Assessment

Forestsod
wo ed
rap m bsc roos, ushBusiness
Sequence

Survey regional
resources thatcan be harnessed

wn
t to
n
a
ist
es
r-r
e
t

Responsible forest management
Recovery of agriculture
Preservation of ecology &landscape/Disaster reduction

n
tio
ea
cr

At the initial stage, take advantage of support offered by national and municipal governments to
conduct resource surveys and feasibility studies. In the course of formulating a concrete businessplan, determine appropriate balance of public sector and private sector investment to ensurebusiness viability.

Di
sa
s

Core Business Initiative Approach

ua

c

tu
ul

re

fe

ed

m
m
un
ity

AMITA will identify neglected resources in a region and design a social system thatmakes the best use of them. Businesses providing core infrastructure that can form
the backbone of cyclical resource flow within a region (hereafter called "corebusinesses") will be developed and expanded in parallel with multiple collateralbusinesses, in order to maximize synergies in the construction of a complete modelthat provides a stable and profitable business platform.

Se

BUSINESS DEVELOPMENT APPROACH

Business Development Approach

dp

ro

du

cts

di
st
rib
ute
ds
yst
em
s

Sea

BoilerSustainablefisheries/aquaculture
MSC Certification
ASC Certification

Recovery of fishing/seafood processing
Improved competitiveness

ing
nd
Bra

e
tir
en

co

In Japan, 43% of incinerators and 58% of sewage treatment plants are currently
past their 20-year service life. Amid an aging and shrinking population, manymunicipalities face the challenge of renovating or repairing these facilities.
AMITA is moving rapidly to develop a business serving this need.

Japanese
MarketSoutheast
Asian Market

AMITA plans to roll out a comprehensive resource recycling model tailored tothe conditions of individual regions of Southeast Asia, where many countries
face waste disposal problems, underdeveloped utility infrastructure, and highdependency on imported food and energy.

Age of municipal waste incinerators and sewage treatment plants(Number of facilities)
300
Incinerators

Sewage treatment plants

250

Facilities over 20 years old/All facilities278

496/1,142 (43%)

227

200

215
166

150
100

117

89 82

50

165

Facilities over 20 years old/All facilities
138 142
91

52 45

0

0-

558/968 (58%)

133

46 52

5-

10 -

15 -

20 -

25 -

30 -

35 -

Rising energy
dependency ratio
Petroleum production in ASEAN
countries is predicted to shrink
by one-third between 2012 and2035. In that period, the ratio ofimported petroleum will double to75%. Securing energy supplies isa critical issue for the region.

Figures as of end of 2012

66

(Age)

Construction costs for heat recovery/sewage treatment facilities
When a small-capacity, small-scale infrastructure facility is constructed, the unit cost is usually higher.
The Minamisanriku pilot project is planned to have a small-scale, low-cost biogas facility thatwill pioneer a new model of utility infrastructure.
Construction cost (in millions of yen/t)
160
Construction cost of heat recovery incinerators(Disposal capacity from 3t/day to 60t/day avg.)

140

4
2
0
-2
-4
2000

2010

2020

Production

2030 2035
Consumption
Source: OECD/IEA

Unelectrified
areas

Areas facing waste
disposal challenges

In ASEAN countries 130
million people live in areas
lacking electricity. Many are
islands or mountainous
regions that are challenging
to electrify.

Indonesia is one country whererecycling of household waste
hovers somewhere around 7%.
Inappropriate waste disposal(such as indiscriminate dumping)poses a pollution threat tosurrounding waterways andoceans.

Construction cost: 80 million yen/t(2035)

6

Imports/Exports

Source: Japanese Ministry of the Environment Survey on Disposal of General Waste

75%

8

-6
1990

6

40 -

ASEAN petroleum
import ratio
mb/d

At 20 years of service life, incinerators and sewage plants require replacement or renovation.
In Japan today, the number of these superannuated facilities is growing, and appropriate new
utility infrastructure is needed to serve a declining population.

120
Construction cost of sewage treatment plants(Disposal capacity from 3t/day to 60t/day avg.)

Minamisanriku pilot

100Construction cost: 47 million yen/t

Population of unelectrified
areas in ASEAN

Recycling of household
waste in Indonesia

60

Sewage calculated assuming 1t = 1m 3 = 1kL.
Construction costs are on contracted basis.

40

Heat recovery facilities harness excess heatfrom waste incinerators, and make up 65.7% of
all incinerators currently operated by Japanesemunicipalities. This excludes small incineratorswith capacity below 2t/day.

130 million

7%

80

20
0

0

50

100

150

Sewage treatment facilities
Heat recovery facilities

200

250

300

350

400

Disposal capacity (t/day)

Source: Waste disposal facilities bids & contracts database

Source: ASEAN-RESP

Source: Indonesian Ministry of the Environment

AMITA plans to pursue business opportunities
addressing these three overlapping issues,
focusing on island communities.
41

Regional Resources Business

STEP 2 Pursuing multifaceted opportunities in Japan and Southeast Asia

2014 GOALS AND PERFORMANCE

2014 Goals and Performance

Creating business opportunities byharnessing neglected resources from forests,
fields, the sea and the town, and bringing a
new vision of regional community into focus
In 2014, we at AMITA focused on building our Comprehensive Cyclical System of Resource
Usage prototype in the town of Minamisanriku, successfully concluding an MOU with the local
government for construction of a biogas facility. Preparations are now underway that should
see this facility begin operation in autumn 2015. Progress was made on business expansion
opportunities outside Japan in Palau and Vietnam (Cát Bà Island) in the form of on-site market
studies and negotiations with relevant organizations. Meanwhile, within Japan, we carried out
surveys, pilot projects and relationship-building aimed at harnessing neglected resources of forest,
fields and town in the Keihoku region of Kyoto.
Strategy Element

FY2014 Key Priorities

FY2014 Performances
Progress on Minamisanriku Model business

Harnessing neglectedresources from forests,
fields, and the sea

Harness neglectedresources from local
communities

Studies of local potential

Provided technical guidance and sales support for symbiotic farming in the town of Minamisanriku in Miyagi Prefecture.

Pursue expansion of Comprehensive Cyclical System of Resource Usage to other regions

Develop medicinal plant cultivation
techniques and expand cultivatedarea

Commissioned by the city of Kyoto (fee: 5.3 million yen) to conduct a survey identifying resources in the Keihoku
area and propose revitalization measures. Continuing to carry out studies and proposals toward realizing thisbusiness opportunity.
Commissioned by the city of Kaga in Ishikawa Prefecture (fee: 5.55 million yen) to assess the practicality andeffectiveness of symbiotic agriculture for the purpose of protecting rare bird species, and to provide support forbranding of farm products.

Develop mechanisms forcommercializing and distributing
products

Develop technologies for regional cyclical systems along with new business

Increase empathy capital ofcommunities

Push forward with Minamisanriku Model business

Expanding from Minamisanriku to the Keihoku area of Kyoto, carrying out cultivation, marketing and selling of medicinal
plant Angelica acutiloba (sales: 450,000 yen; area: 500 m2). Also begin business cultivating Panax ginseng.

Executed comprehensive contract with Minamisanriku town government for biogas plant, performed facility
design, etc.

Pursue expansion of Comprehensive Cyclical System of Resource Usage to other regions

Develop infrastructure for recycling
household waste

Commissioned by Japan's Ministry of the Environment to carry out pilot project and business feasibility studies
related to recycling infrastructure businesses (biogas/solid combustion fuel/calorific cement materials) in Palau (fee:28.7 million yen) and Vietnam's Cát Bà Island (fee: 5.55 million yen).

Develop technologies for regional cyclical systems along with new business

Build resource collection systems

42

Performed assessment of establishing a community based on a "sharing economy" model in the Keihoku areaof Kyoto, aimed at providing settlement for migrants; formulated and proposed a regional vision. (Proposal will
be carried out in 2015.)

Investing and Building Infrastructurefor Biogas BusinessResource Survey and Vision Formulation
for the Keihoku region of Kyoto

For the past several years, AMITA has been proposing mechanisms
for building a Comprehensive Cyclical System of Resource Usage,
including a biogas business, in the town of Minamisanriku. In 2014,
we focused on preparations to get the biogas facility in full-scale
operation, by facilitating public information meetings (hosted by the
local government) at approximately 60 locations around the town,
explaining how the facility will work and how residents will need to sorttheir rubbish. We also contracted with the town government to handle
distribution of liquid fertilizer, in order to promote usage of liquid
fertilizer when the biogas plant begins operations. Over the course of2014, we distributed approximately 90 tons of liquid fertilizer to thecommunity.

AMITA carried out a survey identifying resources in the Keihoku
area of Kyoto (commissioned by the city of Kyoto for a fee of 5.3
million yen). The distribution of vacant houses was mapped,
issues were identified and ways to make the best use of thehouse were proposed.
Following on from that, AMITA was commissioned (fee: 1.85
million yen) to formulate a vision for revitalizing the region. We
convened an expert advisory committee to formulate the visionand explore specific measures, and moved toward issuing a
proposed basic plan in March 2015. Once the vision is adopted,
we plan to assess how AMITA would pursue specific business
opportunities in the context of revitalization initiatives.

The wood pellet business is also moving toward implementation as
illustrated by our business plan proposal, which is aligned with the
Minamisanriku Biomass Industries City Concept.
For plans for 2015, please see P45

Business Sequence

Survey regional
resources thatcan be harnessed

Pilot project/
Feasibility
Assessment

Planning &Consensus
Building

Investment/
Build
infrastructure

Operate/Provide
operational
supportAMITA
now

Biogas business
AMITA
now

Wood pellet business

Regional Resources Business

Expanding the Comprehensive Cyclical System of Resource Usage to New Regions in Japan

Progress on Minamisanriku Model

Business Sequence

Survey regional
resources thatcan be harnessed

Formulate
VisionCreatebusiness plan

AMITA
now

SurveyInvestment

Operate/Provide
operational
supportAs of end of 2014

As of end of 2014

Expanding the Comprehensive Cyclical System of Resource Usage to New Regions outside Japan

Develop Technologies for Regional Cyclical Systems along with New Business

Evaluation and Negotiation for Cyclical System ofResource Usage in Palau

Establish Production System to
Stabilize Medicinal Plant Business

Since May 2014, studies have been progressing toward thecreation of a Cyclical System of Resource Usage and Low-Carbon
Social Model for Palau and Vietnam. Based on the biogas projectin Minamisanriku, the optimal cyclical resource usage model for
local conditions, bearing in mind the type and amount of waste,
and the local way of life, is being evaluated and negotiations withgovernment authorities to launch this business are moving
forward. In December, the Japan pavilion at the 20th Conferenceof Parties to the United Nations Framework Convention on
Climate Change in Peru featured these AMITA projects.

Since 2012, the AMITA Group has been conducting joint
research with Chiba University aiming to establish domestic
cultivation of medicinal plants that are in high demand in Japanand have a mainly imported supply. For Angelica acutiloba, wehave developed cultivation techniques to produce stems andleaves efficiently in one year, and, for Panax ginseng,techniques to grow the plants to a size in one year that would
normally take three. In 2014, we expanded test cultivation from
Minamisanriku to the Keihoku region of Kyoto, expanded thearea under cultivation, established a more stable supply, andproposed new sales channels.

For details please see P15

Business Sequence

Survey regional
resources thatcan be harnessed

Palau
Vietnam (Cát Bà Island)

AMITA
now

Pilot project/
Feasibility
Assessment

Planning &Consensus
Building

Investment/
Build
infrastructure

Operate/Provide
operational
supportAMITA
nowBusiness Sequence
Medicinal Plants BusinessTechnical
Development

On-site Test
Cultivation

Feasibility
Assessment

Expand sales
Sales/
channels/Commercialization
Expand business

AMITA
now

As of end of 2014
As of end of 201443

2015 BUSINESS DEVELOPMENT GOALS2015 Business Development Goals

Begin operating biogas facility in Minamisanriku
within the year and take steps to expand Comprehensive Cyclical System ofResource Usage both inside and outside Japan
2015 Key Development Goals
Recycling Infrastructure Domain

Push ahead with
Minamisanriku Modelbusiness

Expand model intra-regional
cycle of resources andenergy usage to otherregions (in Japan)

Biogas facility up and running within the year
Proceed with business plan targeting launch of wood pellet business in2018 and support efforts of Minamisanriku government to expand pellet users
Assess specifications of wood pellet plant
Promote wider use of liquid fertilizer in advance of targeted 2016 start offull-scale operations (Goal: Distribute 150t in FY2015)
Support government-led information campaign on rubbish separation
Carry out studies/proposals for Comprehensive Cyclical System ofResource Usage in 1 or 2 other municipalities

From 2016: Steps to Commercialization and Development Goals
Natural Products Domain
Support symbiotic farming(establish methods of growing "Minamisanriku:
Forests, Fields, Sea"-brand Sasanishiki rice;support branding)Community Domain

No specific initiatives plannedat present

Target for avg. yield of 28 bales/10 ares (approx.)

No specific initiatives plannedat present

Proceed with vision formulation for
Keihoku region as commissioned bycity of Kyoto and assess business
opportunities/make business plan

No specific initiatives plannedat present

No specific initiatives plannedat present

Palau
Expand model
intra-regional cycleof resources and energy
usage to otherregions (outside Japan)

Work toward agreement with local residents and government on design ofbusiness for cyclical resource and energy usage(Plan for partial commercial operation by March 2016)
Conduct additional studies on waste volumes
Begin tyre recycling operations
Evaluate specifications for biogas/solid combustions fuel plants

Vietnam (Cát Bà Island)
Conduct studies on rubbish volume and sorting

Develop technologies forregional cyclical systems
along with new businessNo specific initiatives plannedat present

Develop cultivation techniques for medicinal
plants, and then commercialize

Double cultivated area (from approx. 50 ares to approx.
1 hectare) to increase volume and sales

Propose environmental certification to improve
marketability of forestry and fisheries resources

Using our years of experience in the Terrestrial Resources Business,
we will successfully get our biogas business up and running.
The Regional Resource Business creates new value by forging newconnections within a region.
To accomplish that, simply building plants and other infrastructure is
not good enough. There must be inputs and outputs for the value
generated within the region. These may be newly created collateralbusinesses or industries that already exist in the region. Naturally,
they are mediated by people and nature, so connecting them requires
study and fine-tuning to ensure mutual harmony and benefit. That iswhat makes the Regional Resources Business challenging and also

44

rewarding. We have a proud history, dating back to the founding of
The AMITA Group, of listening carefully to our stakeholders andcreating value from those connections. I personally am applying mymaximum efforts and long years of experience in the recycling
business to closely manage the construction schedule, safety,
facilities specifications, and workflow of the Minamisanriku biogas
facility, so that it can be built and in operation by the end of 2015.

Takafumi Hasegawa, CSO

No specific initiatives plannedat presentKey Topics

Biogas facility

Outline of biogas business in Minamisanriku
Food waste, sewage sludge, and other organic waste producedby the homes and businesses of Minamisanriku will undergo
fermentation to produce biogas and liquid fertilizer. Biogas will
be used at the facility to generate electricity, etc., while liquid
fertilizer will be distributed to farms. This business will create amechanism for intra-regional cyclical usage of resources, and in
the future contribute to a better local economy and reduction of
the risks associated with incinerators, landfills, etc.

RubbishFoodcollection
waste
Twice weekly 1,278t/year

400 million yen

Subsidies

Subsidy of 149 million yen allocated by MAFF
(to be paid in 2016 under FY2014 programme
facilitating “sextiary sectorization”:
diversification of business into agriculturalrelated manufacturing and services in ruralcommunities)

Projected
revenue

70-80 million yen/year (subject to change)

Contract period

15 years, starting 2015

Site

Provided by Minamisanriku municipal
government free of charge

Investment
recovery period

7 years (ca. 2022)

The site where the biogas plant will bebuilt effectively repurposes the site (andstructures) of a former sewage treatment
plant rendered inoperative by the 2011
tsunami.

Heat
1.8 TJ/year
Note: Usedon-site, etc.

Biogas142,000 Nm3/year

Homes
Electricity
219 MWh/year
Note: Can be used
for emergency power
generation

Self-transportorCollection
company

Business Parameters
Investment

Regional Resources BusinessIn the autumn of 2015, in the town of Minamisanriku
in Miyagi Prefecture, a cyclical resource usage system,with a biogas facility at its core, will begin operation.

2015

Shops
Excesssludge2,555t/year

Liquid fertilizer:
4,500t/year

Note: Sufficient for 70haof farmland

Sanitation
centre2

Sewage/Combinedwastewater tanksludge5,945.06m
Site area:
954.24m2
Building area:
Processing capacity: 10.5t/day
219 MWh/year
Electric power
generating capacity:
Autumn 2015
Scheduled start ofoperations:
AMITA CORPORATION
Operating entity:
AMITA CORPORATION
Facility operator:

FieldsSchedule
Dec 2012 through Pilot project for biogas facility operation in
Mar 2013
Minamisanriku
Jul 2014

AMITA chosen as partner for Minamisanriku
Biomass Industries City Concept

Business Sequence

Survey regional
resources that canbe harnessed

Pilot project/
Feasibility
Assessment

Planning &Consensus
Building

Investment/
Build
infrastructure

2014

Biogas business

Operate/Provide
operational
support
2015

AMITA
now

Mar 2015

Start of construction

Wood pellet business

Autumn 2015

Facility begins full-scale operations

Other Implement symbiotic farming, cultivate and market medicinal plants

45

Fiscal Year 2 014 Financial Repor t

These are the AMITA Group's financial results for FY2014 (Jan. 1, 2014 - Dec. 31, 2014).

T he AMITA Group's con sol idated sales,
con s ol idate d op e rat i ng i ncome, a nd
consolidated net income over the past six years.

Consolidated sales (in millions of yen)

Consolidated operating income (in millions of yen)

251
4,732

4,735

4,987

4,676

4,412

4,360

135
84

2009

Financial Statement
The AMITA Group's Consolidated Balance
Sheet, Statement of Income and Statement of
Cash Flows for FY2014.

2010

2011

2012

2013

2014

Consolidated Balance Sheet(in thousands of yen)

5

- 350

2009

2010

2011

(Assets)

Fixed assets
Property, plant and equipment

115

80

2012

2013

- 84

- 350

- 553

2014

2009

2010

4,360,599

4,676,087

Cost of sales

3,030,345

3,173,127

2,072,570

2,142,791

Gross profit

1,330,254

1,502,960

1,836,599

1,935,269

1,414,891

1,367,823-84,636

135,137

Intangible fixed assets

67,81433,251

Investments and other assets

168,155

174,270

Operating income/loss

3,737,231

4,245,630

Non-operating income

8,384

45,563Non-operating expenses

25,44973,925Current liabilities

1,599,993

1,913,638

Ordinary income/loss-101,702

106,775

Fixed liabilities

1,434,194

1,619,438

Extraordinary income

110,605

117,963

Total liabilities

3,034,187

3,533,076

Extraordinary losses

17,122

3,038-8,219221,700
43,692(Net assets)
703,157

712,553

Income/loss before income taxes andminority interests

Common stock

474,920474,920

Income taxes, current

33,854

Capital surplus

244,683

408,499

Income taxes, deferred-44,419

62,075Retained earnings-16,262-170,731

Net income

2,345

115,932

-183

-134

EquityTreasury stock
Other comprehensive income
Total equity
Total liabilities and equity

-113

-

703,043

712,553

3,737,231

4,245,630

2013

2014

Current period Previous period
January 1 throughJanuary 1 throughDecember 31, 2014 December 31, 2013

Selling, general and administrative
expenses

Total assets

2012

Current period Previous period
January 1 throughJanuary 1 throughDecember 31, 2014 December 31, 2013
Net sales(Liabilities)

2011

2

Consolidated Statement of Cash Flows(in thousands of yen)

2,102,839

1,664,661

18

Consolidated Statement of Income(in thousands of yen)

Current period Previous period
December 31, 2014 December 31, 2013

Current assets

46

Consolidated net income (in millions of yen)

Net cash used in operating
activities

78,197440,085

Net cash used in investing
activities-75,017-64,670

Net cash used in financing
activities-317,396-202,963-959

13,889Net increase/decrease in cash
and cash equivalents-315,176

186,341

Cash and cash equivalents at
beginning of period

1,052,952

866,610

Cash and cash equivalents at
end of period

737,775

1,052,952

Effect of exchange rate changes
on cash and cash equivalents

Financial Position and Performance
Integration of financial position and performance
We refer to a maxim: “FY2014 is the launch pad for progress beyond the next fiscal year.” AMITA’s plans
for the three-year period between 2014 and 2016 are a revolution in the company’s business activities,
starting from a position of budget deficit.
The group’s consolidated sales for FY2014 stood at 4.36 billion yen –– 6.7% down from the previous year.
But despite this relative decline in both operating and ordinary income — under the influence ofdiminished consolidated sales and gross profit margins as the waste disposal effort that followed the
March 2011 Great East Japan Earthquake and Tsunami came to an end—receipt of damages due to thedisaster at the Fukushima Daiichi Nuclear Power Plant kept net profits for the year at 2,345,000 yen.

Points relating to the balance sheet

Points relating to Profit and Loss Statement

Assets

Net sales

Cost of Goods Sold (COGS) and Selling, General and
Administrative Expenses (SGA)

Liabilities and CapitalThe decline in net sales relative to the previous year saw COGS fall by 142,782,000 yen. Sales-cost ratiorose by 1.6% over the same period due to the decline in post-disaster waste-disposal operations, whichhave high profit margins.
Although factors including increased value of goods laid in meant that the first half of fiscal 2014 saw acorresponding increase in production costs, revised production cost estimates for selected production
plants meant that figures over the full year returned approximately to initial expectations.
Factors including increased equipment costs produced an SGA increase of 47,068,000 yen relative tothe previous fiscal year. In 2010, SGA-to-sales ratio stood at 42.5%, but cutbacks implemented from2011 onwards saw a transition in this figure to around 33%. The company aims to maintain this trend of
reduction in SGA.
Analysis of Difference in Consolidated Operating Income(Comparison to previous fiscal year)
2014 Performance(Millions of yen)135

SGA Increase

100
0
-100

-315

COGS Decrease -47
+142

-200

70

50

Cash Flow from Investment Activities

40

Despite gains including the recovery of lease receivables, expenditure, including on the acquisition of
fixed tangible assets (83,522,000 yen) and fixed intangible assets (50,407,000 yen), meant an overall
decrease in capital from investment activities to 75,017,000 yen.

20

Cash Flow from Financing Activities

10
Gross Margin -172

Operating Income -219

Decreases in cash flow due to investment activities including expenditure on the acquisition of tangible
fixed assets, as well as financing activities including the repayment of long-term loans left cash flow
standing at 737,775,000 yen –– an overall decrease of 315,176,000 yen compared to the previous year.

Cash Flow Resulting from Business Activities

30-84

Cash-Flow Situation

Although there were reductions in cash flow for reasons including uncollected damages, outgoingpayments including corporation tax, decreases including to accounts receivable-trade saw the result of
business activities improve by 78,197,000 yen.

60

Decline in Sales

Decreases, including to advances received due to reductions in long-term loans repayable and reductionof inventory, produced a 498,888,000 yen reduction in liabilities to 3,034,187,000 yen. Although capitaldeclined by 9,510,000 yen relative to the previous year’s consolidated accounts, the decrease in total
capital produced a net equity ratio of 18.8% an increase of 2% over the previous fiscal year.

Change in Sales-Cost Ratio and SGA-Sales Ratio(%)

80
2013 Performance

Although the development of outsourcing services for the waste management business represented anincrease in intangible fixed assets, decreases in notes and accounts-receivable trade resulting from therepayment of long-term loans, along with the end of post-disaster waste disposal activities resulted in adecrease of 508,399,000 yen in the value of the company’s assets compared to the settlement ofaccounts for the previous fiscal year to a consolidated sum of 3,737,231,000 yen.

0

2010

2011

Sales-Cost Ratio

2012

2013

2014

Although 400,000,000 yen was brought in through borrowing on long-term loans, repayments of 659,142,000 yen
on existing long-term loans resulted in an overall decrease in capital from financing activities to 317,396,000 yen.

SGA-Sales Ratio

47

2014 Financial Report

When it came to sales for the terrestrial resources business, although handling volume at the Kitakyushu
Resource Recycling Plant saw favourable developments, the conclusion in FY2013 of waste disposal
operations stemming from the March 2011 Earthquake and Tsunami meant that consolidated sales stood
at 4,360,599,000 yen––down 315,488,000 yen, or 6.7% from the previous term.

200

Ordinary Profit/Net Income/Profit Distribution
With a fall in interest and insurance dividends received relative to the previous term, pre-tax losses stoodat 101,702,000 yen –– a change of 208,477,000 yen. This was counteracted partially by receipts including
compensation following relocation of headquarters (+29,382,000 yen) and damages due to the disasterat the Fukushima Daiichi Nuclear Power Plant (+81,222,000 yen), leaving net profits for the year at
2,345,000 yen––down 98%, or 113,587,000 yen, from the previous year.
Taking into account this poor financial performance, it is with great regret that we announce thenon-payment of dividends this year.

Future Plans

Plans for FY2015
Reassessing Past Activities, to Improve Earnings and Ensure Steady Progress of New Business Initiatives

Plans for FY2015

FY2015(Unit: millions of yen)

Net Sales

Operating Profit

Ordinary Profit

Net Income

4,757

110

80

69

Activities in FY2015
At present, there is a trend of decreasing profitability in our Terrestrial Resources Business, particularly thedomestic Recycling Business that has until now provided the bulk of our Japan earnings.

1. Expansion of the "Best Way to Manage Waste" Service
We aim to boost sales of Best Way to Manage Waste (our waste management outsourcing service
launched in 2014) and related services by 25 million yen (For more details, see P8)

2. Commence Operations at Taiwan Resource Recycling Plant
Utilizing Our Unique Technology
We will commence operations at our resource recycling plant in Taiwan, AMITA’s first recycling baseoutside Japan, aiming to achieve net sales of 230 million yen by the third year of operation. With demand
for recycling in Southeast Asia expected to increase, we aim to speed up consideration of our recycling
business in Malaysia, and prepare to advance activities across the region, setting a 2016 sales target of 1
billion yen for our businesses in other countries. (For further information, see P12)

3. Boosting Production Efficiency at Resource Recycling Plants,
and Development of New Alternative Resources
As well as aiming for improvements in production efficiency at our recycling plants, we will conduct
development of recycled products aimed at producers of both ferrous and nonferrous metals, along with thedevelopment and production of new recycled products aimed at specific business operators. (For moredetails, see P26)

4. Client Development through Expansion of Franchises in
Collaboration with Recycling Partner Businesses
In addition to cultivating the market in the Shinetsu-Tohoku South regions through support offered tofacilities run by partner businesses using AMITA’s recycling technology, we will promote partnerships witha number of companies. (For more details, see P27)

5. Reform of Business Management Systems
At the same time as introducing product management tools, we must be meticulous in enacting our PDCA
cycle. We intend to approach budget and schedule with even greater rigor, and increase the speed andquality of our business development.
Additionally, in order to advance development with the Regional Resources Business as the mainstay of
future income, as well as the investment in the biogas business in Minamisanriku we will continue to initiate
new businesses on the basis of extensive feasibility studies.

48

Recycling Activities in Japan
Besides progress in recycling performance at our Kita-Kyushu Resource Recycling Plant, FY2014 saw
activity to reduce cost of sales at our Ibaraki Resource Recycling Plant and a weakening of the trend of anincrease in cost of sales. In FY2015, alongside a review of production costs at all production facilities andmeasures to bring down cost of sales, we are aiming for progress in recycling performance, starting with
our Kita-Kyushu plant.

Areas of Progress in FY2014
1. Activities at Our Kita-Kyushu Resource Recycling Plant
Progress in client development saw performance double relative to 2012.
Recycling Performance(Kita-Kyushu Resource Recycling Plant)(Tons)
50,00040,00029,38730,00021,91220,00015,854
11,581

10,0000

0FY2010FY2011FY2012FY2013

FY2014

2. Activities to Reduce Cost of Sales at Our Ibaraki Resource Recycling Plant
Gross profit margins at our Ibaraki Resource Recycling Plant saw an increase of almost 10% due to:improvements in methods of removing foreign matter from received waste and development of new customers
due to improvements in product quality; regulation of the amount of waste accepted in order to stabilize theoperating efficiency of production plants; and measures to ensure optimal product mix and streamline
distribution.

Shareholder Return Policy
The basis of AMITA Group’s dividend policy is return of profit to investors at a level commensurate withperformance, while aiming to strengthen our finances and management base, and taking steps to secure thenecessary investor reserves. The target is to pay a generous dividend of 30% of consolidated net income at
the end of each term. Although it was with great regret that no dividends were paid for FY2014, based on
the above principles we forecast a payment of 17.7 yen per share in FY2015.

Activities and Policies of Three-Year Midterm PlanThree-Year Midterm Plan (2015–2017)
Term ending
December 2015

Term ending
December 2016

Sales

4,757
(-324)

Operating Income

110

5,588
(152)
289
(-61)

Ordinary Income

80

Net Income

69

278
(-42)
346
(-63)

(Unit: millions of yen)

Term ending
December 2017

6,309
512
503
343

Amendments to the three-year midterm forecast as described in last year’s report shown in red. Revised figures given inbrackets.
Comparison of three-year midterm plan as described in last year’s report (2014–2016) with earlier three-year midterm plan,and the three-year midterm plan announced this year (2015–2017).

Term Ending December 2015
In the new three-year midterm plan 2015 sales figures of 4,757,000,000 yen are used (down 324,000,000
yen from earlier versions). There are no changes in operating income, ordinary income, and net income.
The 324,000,000 yen decrease between the new forecast and earlier versions is principally due to changes
to existing facilities, along with delays in operations due to administrative requirements as part of the
expansion outside Japan of resource recycling facilities. At present, executives are stationed at the facilitiesof our business groups in other countries and are moving to ensure timely commencement of operations.
In addition, after achieving consistent results in 2014 through action to reduce COGS at our Ibaraki
Resource Recycling Plant, a horizontal expansion to other resource recycling facilities is planned for 2015,as part of an overall strategy to secure profits.

Term Ending December 2016
In the new three-year midterm forecast, net sales estimates have been revised to 5,588,000,000 yen (up152,000,000 yen from earlier versions), while operating income has been amended to 289,000,000 yen(down 61,000,000 yen), ordinary income to 278,000,000 yen (down 42,000,000 yen) and net income to346,000,000 yen (down 63,000,000 yen).
Although joint ventures with collaborative partners are being considered for a number of our businesses
outside Japan, due to the enactment of a temporary change of plan to reduce investment in joint ventures,
taking into account business risks and the views of collaborative partners, targets in net sales, operating
income, ordinary income, and net income have been adjusted accordingly for the ventures concerned.
On the other hand, our Terrestrial Resources Business has seen advances in the development of new
recycling methods, including recycled products aimed at specific proponents, meaning that overall sales
forecasts have been upwardly revised from earlier versions of the three-year midterm forecast.
For term ending December 2017, due to development of new recycled products, along with sales of environmental bestpractice outsourcing, and development of recycling business in Taiwan and SE Asia scheduled for 2016, sales are
estimated at 6,309,000,000 yen, and net income at 343,000,000 yen.

Under the AMITA Group mission of realizing a sustainable society, our goal is to ensureadministrative efficiency, health, and transparency, while maximizing business capital andsecuring the trust of shareholders and customers alike.
Net sales, operating income and operating profit margins are key indicators of growth andprofitability, while return on equity serves as a key indicator of capital efficiency. We aim to
maintain a trend of increases and improvements in these indicators.
Though FY2014 was viewed as a key year in which to lay the groundwork for future growth, inwhich operating losses were planned for while focusing on development, in the years ahead weare aiming for steady improvements in sales, operating income, and operating profit margins. In
the period 2015–2017 we are planning for a 32.6% improvement in sales, along with a 365.5%
increase in operating income. The resulting increase in profit margins is expected to bring
improvement in capital efficiency.

Future Plans

Changes from earlier three-year midterm forecast
and rationale for the changes

AMITA Group Financial Approach

Investment projects for FY2015 onwards include a comprehensive cyclical resource system in
Minamisanriku and development of recycling in other countries. With interest rates low at present,
indirect finance forms a key pillar of our financial plan with a view to steady business growth.
Nonetheless, while continuing to consider the enactment of measures aimed at ensuring thefinancial health and stability of the company, we will continue to place great importance onshareholders' interests, while implementing a well-balanced financial plan and capital allocation
policies to prevent decline in asset turnover.
Main quantitative criteria for investment in business include key indicators such as investment
payback period and return on invested capital. Use of such concrete indicators, calibrated forbusiness segment and conditions, allows consideration of acceptable risk when seeking to
implement investment projects. Even after implementation of suchprojects, a distinction must be drawn between plan andperformance, checks enacted, and strategies for improvement
implemented where necessary. If, however, improvements failto materialize, the decision to withdraw from a given project
must be made according to consistent standards.
From here on in, in my role as chief financial officer, I
intend to propose business improvements arrived atthrough multifaceted financial analysis, and to take anactive role in business operations, including participating
in projects aimed at improving profits. I also intend toensure that operating risks are considered in minutedetail, in order to create a stable management base.

Taro Shimizu, CFO
49

Environmental Initiatives

Material balance
The Terrestrial Resources Business, the core of the AMITA Group, seeks to achieve 100% recycling, with no material sent to incinerators or landfill disposal.
AMITA is also striving to reduce the use of combustion and water in manufacturing activities in order to minimize environmental burdens.
Here we offer an overall picture of the AMITA Group's environmental footprint and the environmental value it creates.

What is being measured?

INPUTOUTPUT

Period: January 1 through December 31, 2014
Sites: 5 resource recycling plants in Ibaraki,
Kawasaki, Himeji, Kyotango and Kitakyushu

Raw materials

Recycled products

137,000 t
Other material:
12,000 t

Cement raw
material (calorific)

Industrial waste:

Liquid fertilizer
Metal alternative
raw materials

Energy1.77
Diesel oil 149
Electricity

millionkWh*1 Kerosene

Petrolkl

25
8Electricity soldto gridkl
kl

Energy input
per unit of net sales

Water*2
Mains water

4.2 GJ/million yen

3,954 cubic meters

Greenhouse gas output
per unit of net sales[The standard unit used in industrial waste disposal
in Japan is 10GJ/million yen(from data released by the National InstituteforEnvironmental Studies)]

0.3 t CO /million yen

138,000 t
5,268 t4,938 t430,000 kWh

Atmospheric emissions
Greenhousegasses

862 t CO2

2

Waste disposal industry average is
6.1 t CO2/million yen(Source: National Institute for Environmental
Studies of Japan)*1 Includes electricity generated from biomass at Kyotango Resource Recycling Plant and 160,000 kWh of generation losses.
*2 Excludes quantity of rainwater used by Kyotango Resource Recycling Plant and quantity of mains water used by
Kawasaki Resource Recycling Plant. Mains water is used primarily by the co-located office.

Wastewater emissions from manufacturing process are zero.
Excludes wastewater from offices co-located with plants.

Initiatives to reduce environmental footprint
Initiatives to cut emissions of treated wastewater to zeroAt our Kyotango Resource Recycling Plant,
where methane generated from digestingorganic waste is used to generate electricity,release of treated water from methane
digestion into the watershed has ceased, andthis treated water is now being developed asa liquid fertilizer resource. Zero wastewater
release was achieved in 2013.

50

Amount of treated wastewater released at
Kyotango Resource Recycling Plant

Water releases(cubic meters)

20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0

Green energy usage
Embracing use of renewable energy
In October 2014, AMITA launched a line of business acting as a representative forsales and purchases of green electric power*. From 2015 onward, renewable energy
will be adopted at AMITA plants, and the proportion of renewable energy in our
resource inputs will grow.
* Electric power generated from solar, wind, biomass and other natural sources

2007

2008

2009

2010

2011

2012

2013

2014 (Year)

Green energy was introduced starting January 2015 at
our Ibaraki, Kyotango and Kitakyushu plants.

Reducing natural resource consumption
By 2050, annual global consumption of nickel is projected to be roughly triple what it istoday; copper, quadruple. The fear of resource depletion is real. At the AMITA Group,
by manufacturing recycled resources, we are contributing to reduced consumptionof extractive natural resources. We have made it our business to tackle the serious
problems of resource depletion and environmental destruction that society faces. Below,
the contributions to reduced use of extractive resources made indirectly by AMITA
through provision of recycled resources to society are tabulated.
For coal mining, calculated to include the overall equivalent volume of environmental destruction
including stripping of surrounding soil and rock that is saved by reduced natural resource consumption.

Extractive resources saved bysubstituting recycled resources (FY2014)

Extractive resources—in short, ores that are mined—have benefits for the countries and regions where
they are extracted, in the form of employment creation and economic development. However, there aremany cases in which reckless extraction leads to negative environmental effects: the stripping of topsoil
and rock that accompanies mining and deforestation; water pollution; and alterations to ecosystems ofsurrounding communities.
The AMITA Group believes that each individual human being enjoying prosperity and happiness is thehighest value of all. In grasping the effects of natural resource extraction, it is not quantitative
measures—the area deforested or the number of people in a community suffering damaged health—that matter most. It is the impact on individual lives. Below are some actual reported examples ofchanges wrought by reckless mining development.

The AMITA Group is reducing consumption of the following extractive resources by recycling waste.

Recycled resource (alternative resource)
made by AMITA from waste
If this amount of recycled
cement material (calorific)
is produced in one year...

76,774 t

Deforestation

Savings in natural resource

Health damage suffered
by residents

3x

Relocation ofresidents

amount if recycledresource
produced

230,396 t
Reductionin amount
extracted is

10.8x

If this amount of recycled
nickel material is
produced in one year...

Amount ofnickel ore saved:

2,480 t26,798 t*

amount if recycledresource
produced

Release of
toxic materials

Ecosystem disruption

Polluted
agricultural land
Turbidity ofwaterways

Reductionin amount
extracted isIf this amount of recycled
copper material is
produced in one year...

737 t

Not just ecosystems are disrupted,
but the health, human rights andway of life of people who live in thevicinity.

Topsoil
stripping

Reductionin amount
extracted isAmount ofcoal saved:

Environmental initiatives

KEY
INFORMATION!

Negative effects on the environment of
reckless exploitation of extractive resources

57.4x

Amount ofcopper ore saved:

42,276 t

amount if recycledresource
produced

Disruptionof fisheries
SiltingCalculated from portion of specialty metals making up nickel alternative resources.
For details on AMITA's overall resource manufacturing results, see P22.

51

Risk Management

Risks and Mitigation Measures
By identifying risks and establishing mitigation measures, a company can minimize various kinds of risk,
including financial or reputational damage that might arise in an extraordinary situation.
At the AMITA Group, individual measures to mitigate material risks are implemented with consideration to two major factors:
1) The degree of importance of risks with respect to trust in our company, business goals, and stakeholders, and 2) the frequency at which various risks become reality.

Material Business Risks and Mitigation Measures
Category

Material Business Risks

Mitigation Measures

NaturalDisasters

Risks resulting from delays to business projects caused by suspension offunction or operations at headquarters, other major bases, and production
plants due to natural disasters

The functions of our head office are divided between Tokyo and Kyoto to enable maintenance of function even during an emergency.
We are in the process of implementing backup infrastructure to support the production plants and partner-company-run facilities involved in our core businessarea of recycling nationwide.

Violations by AMITA CORPORATION of laws including the Waste
Management and Public Cleansing Act may lead to the revocation ofbusiness licences, resulting in suspension of operations at all production plants.

Screening for association with antisocial elements is conducted at the sealing of contracts and opening of accounts with all contractors, suppliers and clientsas part of strenuous attempts to eliminate such influences.
All employees are provided with compliance and other training.
A legal advice hotline is available to employees, as part of a system to respond to questions and offer advice on such matters whenever necessary.
Changes in the law are accounted for in the extension of existing contracts and the conclusion of new contracts.
Contracting a legal team with expertise on the Waste Management and Public Cleansing Act serves to prevent violations as well as address retrospective legal action.
(See P53 for further information on compliance systems)
We have established a database of the contracts held with recycling partner companies, and conduct frequent inspections of facilities and collection of inspection
reports to ascertain conditions.

Legal
Violations

Associating with antisocial elements can lead to a loss of trust andcustom, and possibly to being barred from trading on the stock market.

Preventing
Data Leaks

Illegal dumping or other legal violations on the part of third-party waste
collectors, transport companies recommended to our customers, or partner
waste disposal companies, also place AMITA at risk of loss of trust.
Leaks of customer and other personal information carry the risk of lawsuitsand loss of trust

Accidents

Fluctuations
in Exchange
Rates andInterest Rates

Other Risks(See P53 for further explanation of information security measures)

Fires and accidents at production plants carry the risk of suspensions
to operations(due to handling of various flammable materials)

A manual on measures to be taken in the case of a fire or other serious accident is available and is updated regularly.
Fire prevention and extinguishing apparatus and measures are featured throughout our premises, including fire break construction and sprinklers.
Drills based on an official manual and aimed at preparing employees for earthquakes, fires, leaks, sudden changes in temperature, flammable gas leaks andother emergencies are conducted twice a year at all production plants.
All losses to facilities in case of fire are fully covered by fire insurance.
We are in the process of implementing backup infrastructure to support the production plants and partner-company-run facilities involved in our core businessarea of recycling nationwide.

Risk of damage from pollution to areas near production plants,
and the accompanying risk of liability for damages

Our five main production plants nationwide operate with certification under the environmental management system ISO14001. In addition, we conduct our own
localized analysis of rainwater quality twice a year.
We have environmental liability insurance, to cover the cost of cleanup operations as necessary.

Changes in economic climate can lead to increases in interest rates
that can drastically increase the burden of payments owed, and createa negative influence on the economic performance of AMITA Group.

Fixed-interest long-term loans form the basis of AMITA’s borrowing strategy, thereby keeping the risk from sudden fluctuations in interest rates to a minimum.
New long-term loans are susceptible to the influence of changes in interest rates, which may result in longer investment payback periods for new enterprises.
Although short-term loans are subject to variable interest, such loans did not feature in our consolidated financial results for fiscal 2014.

Risk due to fluctuations in exchange rates of the yen and the US dollar(NOTE: Transactions with businesses outside Japan, including those in
Taiwan and South Korea, are conducted in US dollars.)

As of the end of December 2014, business outside Japan accounted for 7.1% of net sales. At present, in order to minimize the risks posed to transactions
conducted in foreign currency by fluctuations in exchange rate, derivative risk management processes are in place, and efforts are made to reduce,
as far as possible, assets denominated in foreign currencies.

Risk of suspension of function at production plants due to cancellationof land leases

Although we cannot guarantee the actions of landowners, a portion of production plants are secured on contracts with conditions including business-use leaseagreements that do guarantee continuous use rights for the duration of the contract.

Safety Policy and Performance Measures at Recycling and Production Plants
Because of the strong ties of the recycling service that forms the mainstay of the Group’s business activities to both waste generators and users of recycled products,
temporary or partial suspension in the operations of our Resource Recycling Plants can have a significant influence on the business activities of customer companies.
For this reason, the activities in our production plants are conducted with the utmost emphasis placed on matters of safety.
Enhancing the Environmental and Safety Management Systems(Implementation of Risk Assessment)
All production plants conduct operations in accordance with the environmental management system ISO14001.
Additionally, to curb the number or accidents, near misses, and complaints, all business operations undergo a risk
assessment at the beginning of each fiscal year, with intensive efforts undertaken in high-risk areas to reduce theidentified risks.

52

Key Performance Indicators
Frequency Rate: 9.34 (Industry Average: 9.07)
Serious Accidents: 0

Severity Rate: 0.01 (Industry Average: 0.53)
Product User Complaints: 4

Frequency rate: The number of injuries or deaths per 1,000,000 working hours (frequency of accidents)
Severity rate: The number of working days lost per 1,000 working hours (severity of accidents)
Serious Accident: a legal violation, incident, or accident on a scale requiring a public announcement
Industry average figures for frequency rate and severity rate in domestic and industrial waste disposal sector takenfrom 2013 Japanese Ministry of Labour, Health and Welfare report “Survey on Industrial Accidents”.

Measures for Compliance and Information Security
The business activities of AMITA group are subject to a wide variety of laws and regulations. Any infringement of recycling regulations could lead toour business permit being revoked, so compliance is a matter of utmost importance to our business.
As a “business operator handling personal information,” responsible for gathering large quantities of customer data, we have in recent years
introduced a range of initiatives to strengthen our information security.

Principal Laws Affecting
the Activities of This Group

Compliance

Of all the laws relevant to the activities of the AMITA Group, the Waste Management and Public Cleansing Act isof particular significance, governing as it does the collection, transport, and disposal of industrial waste conducted
as part of our Recycling Business. Infringements of this law may lead to compulsory suspension of activities or the
revoking of business permits, and the gravity of such potential consequences makes the Waste Management andPublic Cleansing Act extremely important for us. Although AMITA faces no risk of legal censure for infringementson the part of third-parties—including but not limited to waste collectors, transport companies recommended to ourcustomers, or partner waste disposal companies—loss of trust would be unavoidable. For this reason, we conduct
rigorous inspections of all partner companies.

Laws affecting
the entire Group
Civil Law, Commercial Law, Act on
the Protection of Personal
Information
Corporate Law, Financial Instruments
and Exchange Act
Subcontract Act, Patent Act,
Copyright Act
Anti-Monopoly Act
Unfair Competition
Prevention Act, etc.

Laws pertaining toindividual businesses
Waste Management andPublic Cleansing Act
Other environmental laws
Industrial Safety and Health Act
Fire Service Act, Pharmaceutical
Affairs Act
Act Against Unjustifiable Premiums
and Misleading Representations
Food Sanitation Act

Strengthening Compliance through Employee
Education and Training
To ensure further progress and stability in matters of compliance, all employees take part in compliance training,
testing, seminars, discussions, etc. relating to the Waste Management and Public Cleansing Act.
1

Voluntary Seminars on the Waste Management
and Public Cleansing Act

Trainer: Masazumi Horiguchi, Chief Consultant, AMITACORPORATION
Number of Sessions: 6
Seminars on a variety of topics—including the Home Appliances
Recycling Law, mercury waste, and how to address vehicularpollution—help to boost the level of specialist knowledge among
employees.

2

Training in Compliance at Manufacturing Facilities

Monthly safety drills are conducted at our various manufacturing
facilities. Classes on topics including the Waste Management
and Public Cleansing Act and handling of pressurized gas
cylinders aim to boost safety and compliance.

3

Compliance testing unique to The AMITA Group165 examinees are tested through 47 questions on issues
ranging from AMITA’s business activities and management,along with civil, commercial, and corporate law, to the Waste
Management and Public Cleansing Act.
Boosting Awareness of and Practical Skills in Compliance.

4

Spreading awareness of compliance throughcompany social networking sites

Example topics: awareness of contract durations, stamping out
antisocial influences on society
Total number of posts and comments: 114

5Preventing Sexual Harassment and Power Harassment

E-learning courses on prevention of sexual and power
harassment are promoted to all employees.

Established norms of behaviour
The foundations of the AMITA Group’s compliance systems are the AMITA code of conduct, complianceguidelines and compliance regulations established to ensure adherence to both national laws and company
regulations, while promoting conduct based on high moral and ethical standards.
Compliance Hotline
Our compliance hotline was established to deal with cases in which employees have doubts concerningcompliance or possible contravention of laws. Specialist operators are available to provide callers with theinformation they require, thereby ensuring employee safety and the correct response to each individual case.

Risk Management

Principal laws
affecting the activitiesof this GroupIn order to ensure compliance with laws including the Waste Management and Public Cleansing Act, we have
implemented the following systems:

Risk Management Systems and Monitoring Systems
A range of supervisory departments is in place to address specific business, disaster, and information
security-related risks. Through the establishment of official regulations and guidelines, and the provision oftraining, the department in charge of legal affairs provides cross-sectional management of risk management
systems.
In addition, we have established a monitoring system, under which the Internal Audit Department conducts
periodical assessments of compliance with laws, statutes, and regulations. (In 2014 we handled 14 cases throughthis system; 10 were resolved with the problem addressed, 4 are in the process of resolution.)

Information Security Measures
Because the AMITA Group is responsible for handling the personal details of some 30,000 customers, under the
Act on the Protection of Personal Information we are regarded as a “business operator handling personal information”. The management and security of this personal information is, therefore, an issue of great importance. We
therefore maintain a Security Policy, and strive year on year to strengthen the necessary measures.
Information in red details measures implemented in 2014

Establishing Systems for the Managementof Information Security
Laying out a course of action for exceptional circumstances
resulting in accident or injury

Realizing a system to guarantee information security
Secrecy and security of a server’s physical location
Security software and systems protecting against viruses,
spam, and unauthorized accessEncryption of the telecommunication network
Measures against the erroneous sending of emails, andencryption of file attachments
User certification according to a directory service, and control
of accessAccess privileges limited in accordance with the maxim “No
Need No Access”
 Other measures

Strengthening of Internal Information
Security Regulations
Five internal regulations on the management of information
have been established.
These are applied as an operational standard.

Provision of Education on Information Security
IT training for employees joining the company
Promotion of e-learning courses on the protection of personal
information
In line with the various changes to our IT environment, 2015
will see strengthening of information security measures at
our websites, and an update to our content management
system.

53

Initiatives Key to the Realization of Our Mission
In line with our mission of realizing a sustainable society, we are constantly striving to conduct our business so as to ensure that as industry andsociety continue to develop, we see ever-greater abundance of relational and natural capital.
And this relies on indicators relating both to the building of an organization in which the employees charged with realizing value creation canenjoy long careers with peace of mind, and to the forming of connections between The AMITA Group and local areas and communities.

Building a Company that
Offers a Long Career with Peace of Mind
We intend that The AMITA Group employees not only earn their living from the company, but also feel that they arepart of a “work family” that complements their home and community life. By forming a community of shared purpose
with valued colleagues, and connections with clients, partner companies and shareholders who endorse the AMITA
mission, we create a working environment that enriches the lives of employees not just monetarily, but with a sense ofaccomplishment and of having made a difference to society that cannot be achieved as an isolated individual. We
want employees to join us in fashioning a working environment in which they can enjoy long careers with peace ofmind. We engage in constant contemplation of measures, such as abolition of the mandatory retirement system, which
will improve our HR. Here we present details of working conditions and recruitment at the AMITA Group for fiscal 2014
(Note: Information given in red covers the period January 11, 2014–January 10, 2015).
Initiatives

Categories

Departure rate of full
employees

Employment
conditions

Employment
systemLeavesystemPerformance
13% (Note: average for the service sector: 23.7%)

Note: Compiled using figures from 2013 Survey on Employment by Japan's Ministry of Labour,
Health and Welfare

Average age of
employees

38.18 years (average for male employees = 37.86 years; average for female employees = 38.49 years)

Ratio of male to female
employees

Male: 75% Female: 25% Proportion of male and female employees over the past 2 years
2013 Male: 71% Female: 29% 2014 Male: 77% Female: 23%
2% Note: Companies with over 50 employees are legally obliged to have employees withdisabilities comprise at least 2% of their workforce. Within the AMITA Group, this applies to
AMITA CORPORATION.

Number of employeeswith disabilities(AMITA CORPORATION)
Proportion of management
positions occupied byfemale staff
Average period of
employment
Number of employees
on short-hours contracts
Number of employees
working from home
Proportion of
discretionary leave taken
Total leave taken to carefor sick children
Number of employees
taking time off to carefor relatives
Number of employees
using AMITIME System

Average overtime
Working
Environment worked per employee
Management Training
Human
resources(Leadership Academy)
development/
E-learning Figures
training

TOPIC

8% (Note: figure comprises Group Leaders and Team Leaders)
7.81 years (2013 figure: 8.42 years)
Short-hours contracts are principally used by employees caring for children.
Male: 0Female: 5 (0 managerial; 5 non-managerial)
Male: 0Female: 139%

Note: average amount of paid leave taken per employee: 7 days/year

19 days (Male staff: 4 days, Female staff: 15 days)
Male: 0Female: 1

In 2014: 3 (all female)
Total to the end of 2014: 5 (all female)Note: Under the system operated by the AMITA Group, discretionary leave not taken within two
years of its conferral is lost to the individual, but stored up by the company to be used by employees.
Yearly average: 183 hours

Monthly average: 16 hours

Monthly training is conducted on ways to build connections between management and on-site workers.

Total courses attended: 578 (62 individual users)

In order to build good relationships with local communities, The AMITA Group offers sponsorship, assistance,and cooperation for local events. Key activities in this category are listed below.
Name/Details of
Lectures or Event

Overview
Event organized by the Kansai Telecasting Corporation (Kantele), at which residents gather towatch and discuss movies addressing pertinent social themes. The AMITA Group has
contributed to the planning and running of the last three events.
Seven members of staff from our Kyoto headquarters took part as volunteers in this event to
reduce littering at Kyoto’s traditional Gion Festival.

Social Cinema @ Kantele
The Gion Matsuri
Gomi Zero Daisakusen

TEDx Kyoto 2014 “ONKOCHISHIN” At this presentation event, devoted to the theme of “Ideas Worth Spreading”, AMITA tookcharge of the making the event more environmentally friendly, through fundraising and the(Learning the lessons of history)
issuance of green energy certificates.
Took part in the planning of this fieldwork camp in Minamisanriku, Miyagi Prefecture, aimed at
Meets Green Minamisanriku
middle- and high-school students from Minamisanriku and the nearby city of Sendai. Also
contributed instructors and attendants.

Lectures and Events to Build
Brand Awareness and Understanding
In order to realize a sustainable society, The AMITA Group engages in activities including hosting lecturesand making policy suggestions. Details of major external lectures and events are listed below.
Name of Lecture or
Event

Month
Held

Taking Cyclical Systems
to a New Level. Thinking
beyond coordination andcooperation to a new method2

We participated in this event, organized by the Ministry of the Environment, as thesecretariat. It was aimed at promoting the certification system for businesses detoxifying
waste, along with the “3Rs” (Reduce, Reuse, Recycle) initiative.

The Third Low Carbon
Business Model Study Group3

At this industry seminar organized by the Japan Gas Association, one AMITA employee
spoke as an instructor on the example of our Regional Resources Business in Minamisanriku.

The Fourth Cool Japan
Movement Promotion
Conference

7

JICA Themed Training

10

General Incorporated
Association Japan BusinessInitiative for Biodiversity(JBIB) Training Workshops

11

Representatives of the AMITA Institute for Sustainable Economies attended this event
alongside participating companies. In training, information was provided on Ministry ofAgriculture Forests and Fisheries initiatives based on consideration of sustainability in
Minamisanriku.

The 3rd International
Conference for Enhancing
the Biodiversity in Agriculture(2014)

12

At this international conference organized by the local government of Osaki, Miyagi
Prefecture, one AMITA employee give a lecture entitled "Supporting Communities with
Agriculture that Creates Biodiversity"

The 20th United Nations
Framework Convention on
Climate Change

12

At the Conference of the Parties (COP20) that formed part of the 20th United Nations
Framework Convention on Climate Change, the Japan Pavilion featured an introduction toactivities surrounding a resource cyclical system for the Republic of Palau.

OutlineThe AMITA Group Chairman and CEO Eisuke Kumano took part in this conference, organizedby the Cabinet Secretariat, that aimed at promoting measures and strengthening communication
concerning the commercialization and global promotion of Japanese culture and traditions.
This course––aimed at regional promotion through the full range of activities relating to theuse of forest resources, including certification schemes and branding––brought together
eight research students from five countries, for our lectures on the Forestry StewardshipCouncil’s certification programmes.

Former Kyoto Headquarters Redecorated andReopened as Fudenkan Museum

The former AMITA Group headquarters in Kyoto was redecorated and, in July 2014, reopened as the Fudenkan museum. As well as
exhibits explaining the AMITA Group’s activities and philosophy, the facility also features a community space that is used for learning
about the environment and for social activities. In 2014, we welcomed official observers from outside Japan and high school students forenvironmental study classes, life study courses with members of regional communities organized by Kyoto University Kokoro ResearchCentre, and other activities. We have so far welcomed some 600 visitors.

54

Connections with Local Areas and Communities

High-school environmental study classes

Foreign observation teams

Regional life study courses

Joining the UN Global Compact
The Global Compact (GC) is a United Nations initiative establishedin 2000 at the proposal of then UN Secretary General Kofi Annan.
Finding ourselves in agreement with the GC principles, in June 2002
the AMITA Group became the fourth Japanese organization to join theinitiative, and along with other initial signees from Japan put our efforts
into establishing Japanese local network GC-JN (Dec. 2003). As a GC
member, the AMITA Group is proceeding to step up business activities
and internal and external communications in line with GC principles,and reporting on these activities to GC head office as part of the GC
Stakeholder Communication on Progress (COPs) scheme.

Message from the CEO
Since our founding in 1977, the main purpose of the AMITAGroup has been finding solutions to environmental issues.
Because the principles of GC10 are so consistent with theideals laid out in our own Group Mission, we are one of the
few companies able to advance the ideals of GC throughour own core business activities. Aside from environmental
issues, in order to promote activities relating to issues
including human rights, labour, and anticorruption, in 2010
we established the website CSR JAPAN, to spreadawareness of corporate social responsibility. We willcontinue to further the principles of GC10 in future, bypressing on with the provision of corporate environmental
strategies to our customers, and the building ofcomprehensive regional resource cyclical systems.

For more information on the UN Global
Compact, please visit the United
Nations website.
http://www.unglobalcompact.org/

COPs (Communication on Progress)

Human Rights

UN Global Compact 10 Principles

1. Support and respect the protectionof internationally proclaimed
human rights

LabourEnvironment

Improving employee working environments and maintaining safety

In the reassessment of the dangers of handled items, risk is reduced due toincreased accuracy of such reassessments.

Maintaining employee health

Maintaining employee health

Cover the costs of follow-up health checks for employees, and strengthen efforts to support
employees in need of further treatment.

Establish proposals to maximize employee welfare

Declare our involvement and offer support

7. Support a precautionary approachto environmental challenges
8. Undertake initiatives to promote
greater environmental responsibility(i) Take part in the Stand Up and Take Action initiative aimed at the alleviation of poverty.
In order to build understanding within the company, hold a campaign explaining the aims.
Organize photo-shoots at all action sites.
(ii) Give backing to the Kurashi no Manabi initiative, which works to develop programmes thatstrengthen mutual assistance and self-assistance with the aim of preventing social isolation.
(iii) Cooperate in movie screenings and discussions on the themes of social issues of peace and poverty.

Labour negotiations(i) Improve our system for inviting the suggestions of workers for the improvement of thework environment and make the switch from unilateral decision-making to an open
exchange of ideas.
(ii) Operate initiatives aiming for qualitative improvements that encourage employees toindependently exchange ideas for improvements to the work environment.

Build a model society based on environmental technology

Declare our involvement and offer support(i) We conducted reports on the various Stand Up and Take Action activities, which
between them saw the involvement of some 142 people.
(ii) Gave backing to the Kurashi no Manabi initiative organized by Kyoto University forthe citizens of Kyoto to learn about topics including health, ageing, and care, andmade Fudenkan museum, an AMITA Group facility, available for the event.
(iii) Cooperate in the planning and running of the Social Cinema movie screening and discussion
events on such themes as poverty and economic inequality, peace, human rights, and cultureorganized by Kansai Telecasting Corporation. Events so far: 3. Total participants: 431.

P57

Building a model for society based on environmental technologies.

Development of Technologies
Promotion of Technologies

Our Kitakyushu Resource Recycling Plant introduces the Group’s technologies to 323 observers
including those from outside Japan, with 71 such visitors from 32 countries received to date.

Policies

Make clear our policy for the elimination of any antisocial elements.

These policies are stated on the websites of the Group’s various enterprises.

(i) Continue to conduct surveys and screening in aimed at eliminating transactions with
antisocial influences.
(ii) Conduct compliance training and tests to increase consciousness of compliance issues
among employees.

(i) Thorough screening was conducted at the opening of all business transactions aspart of our measures to eliminate antisocial influences.
(ii) Screening was also applied to all employees, in conjunction with the consideration ofhigh-risk areas of our business.

Preventive Measures

P54

Labour discussions(i) To facilitate discussions on both maintenance of the work environment andaction in a style befitting this company, established an internal social networking
site through which representatives of workers from various locations can freely
offer their ideas.
(ii) Organized company meetings at which management and workers can discuss
improvements to the work environment.

In February, we launched Best Way to Manage Waste, the first step in our BPO
services line, receiving two orders to date.

Policies
10. Work against corruption in all its
forms, including extortion andbribery

Establish proposals to maximize employee welfare

Develop new services that reduce the risks faced by partner companies, while simultaneously
boosting their efficiency and enabling them to transmit know-how.
We consistently and actively welcome trainees and observers from SE Asian economies,
promoting recycling technologies for the realization of a sustainable society.

P52(i) These proposals are applied to injuries sustained at work or while commuting.
(ii) We were unable to establish new measures for welfare.

(i) We have conducted surveys and empirical research both in Japan (in Miyagi
and Kyoto Prefectures) and abroad (in countries including Vietnam and Palau).
(ii) In July we signed an agreement for the implementation of biogas technology in
Minamisanriku, Miyagi Prefecture.

Promotion of Technologies

RelatedPages

We conducted strenuous efforts to make employees aware that we will cover thepartial cost of follow-up health checks (up to 10,000 yen), and covered the cost of thenine such applications received.

(i) Conduct empirical research into symbiotic farming and biomass energy technologies
and build a system for practical application.
(ii) Build cooperation with local municipalities for the implementation of regional resource
cyclical models.

Development of Technologies
9. Encourage the development anddiffusion of environmentallyfriendly technologies

FY 2014 Performance

Reassess the dangers of the items we handle.

Continue to take out casualty insurance in readiness for employee deaths or injuries in thecourse of their duties or during their commute.
(ii) Aim to maximize employee welfare.

3. Uphold the freedom of associationand the effective recognition of theright to collective bargaining
4. Eliminate all forms of forced andcompulsory labour
5. Support the effective abolition ofchild labour
6. Support the elimination of discriminationin respect of employment and occupation

Assessment

Improving employee working environments and maintaining safety(i)

2. Make sure that we are not complicit
in human rights abuses

Prevention of
Corruption

Details and Aims of Activities in FY 2014

AMITA HOLDINGS Co., Ltd.
Founder & CEO
Eisuke Kumano

Preventive Measures55

Engaging with Our Stakeholders

A framework forharnessing feedback
from stakeholders

Framework for routing stakeholder feedback and intelligencefrom employees to senior executives

At the AMITA Group, we are establishing a system that consolidates thevarious kinds of feedback received in our communications with customers,
shareholders, partner companies and local citizens. We then make thistrove of information available as an input for daily managerial decision-

Corporate andmunicipal
customers

making, business improvement and product development, systems
reengineering and more.

RoutineUrgent response
Complaints or requests from citizens living in the vicinity of client or AMITA plants are
regarded as high-priority information, and the recipient of that information relays it tosuperiors, while also reporting to a group email address for directors and related personnel
for an immediate response. In addition, in order to ensure every piece of shareholder
feedback is paid due attention, all shareholder opinions are immediately forwarded to thedirectors irrespective of content.

AMITA Holdings Co., Ltd. executive meetings

Internal Social Network
In 2011, the company introduced an internal social network system to foster information
sharing between management and employees. Separate from the reporting systems forurgent matters and for routine follow-up, the social network facilitates the company-wide
dissemination of frontline staff thoughts and observations, and provides a forum for sharing
opinions and ideas.
[FY2014: 985 posts, 1,418 comments]

56

UrgentEnquiries fromshareholders are
immediately
reported to the
executive in charge;
periodic summaries
are also issued.

Directors
RoutineRoutineAt intervals
determined by credit
and riskmanagement rank,
in-person inspections
are carried out andreports composed forthe head of therelevant department.

Other systems
Separate from the monthly board of directors meetings, the directors of AMITA HOLDINGS
Co., Ltd. gather once a week and hear reports, requests and discussion items fromdepartment heads and evaluate them, providing a flexible decision-making venue formeasures to take on issues, set or adjust business policies, etc.

Content of all contact
with customers(visits, calls, etc.) is
logged. Report with
updated informationis generated the next
day and sent toboard members,
relevant department
heads.

Shareholders

Used as input for
decision-making
on improving/developing/halting/launching businesses,
developing new
systems

UrgentIn case of
accidents/complaints/
disaster alerts, reports
are emailed directly to agroup address formembers of the board of
directors to see.

Frontline staff

Also, crucial information gathered by frontline staff is conveyed to superiors through reports
flowing up the chain of command and through various meeting structures to support
executive decision-making.

line staff
Front

Routine response
In order to minimize any loss of valuable information, a CRM system logs a complete
history of client contacts, stores observations about customer issues and needs, andmakes them available to all employees, including directors. These are critical materials forplanning and launching businesses.

UrgentIn case of
accidents/complaints/
disaster alerts,
reports are emailed
directly to a groupaddress for membersof the board of
directors to see.

Monitoring of
published
information
concerning AMITA
and company-wide
dissemination.

RoutineEvents for students held
and reports on
response generated.

Partners

Media

Urgent reporting route (High urgency)
Local
communities/
students

Administrative reporting route (Low urgency)
Meeting structure (Standard)Initiatives to give senior executives unfiltered access to stakeholder feedback
Since 2012, the AMITA Group has implemented various policies to enable executives toreceive unfiltered feedback from stakeholders in addition to the usual information
gathering by employees.
Employees

From in-person sales calls by executives, to surveys tailored to each type of stakeholder, toholding earnings reports, "town hall" meetings and various other events oriented towards all
stakeholders, etc., the company has sought multiple avenues to opinion-gathering.
Making a raw feed of the thoughts and expectations of stakeholders available to senior
management through these channels is intended to improve the accuracy and speed ofdecision-making.

Business ideas,
feelings about thecompany, and desiredchanges go directly tothe top, without being
filtered through thechain of command

Corporate andmunicipal
customers

C-suite sales
efforts (244/year)
Business partner
survey (annual)

Director "town hall" meetings:
directors visit each businesslocation several times per year
to have dialogue with staff
CEO Hotline (annual)
Workers council (twice a year)
Employee survey (annual)
For results see P61

AMITA Group
Partners Survey
For results see P59

Directors

Partners

For results
see P60

Open to all stakeholders, notjust finance and media
professionals, providing forums
for promulgating company
Earnings reportvision, financial information, and"Town hall"business strategy andmeetings (ad hoc) exchanging opinions

Local events / student events(e.g.: "What is work?" event)See P54

Shareholders

Stakeholder communications

Action items adopted based on survey results.
Grasp customer problems and guide response
Shape business strategy
For results see P58, 59

Shareholder
survey (annual)

AMITA Group
Partners Survey
For results see P59
Respond to information
requests

Media

Local
communities/
students

New initiatives for 2015
In FY2015, AMITA is implementing a new "Management Strategy Roundtable". This group will be composed mainly of middle managers that will take the raw information
obtained by frontline employees in the course of everyday interactions with stakeholders. The roundtable will then convey that information to management1) more systematically, 2) on a more timely basis, and 3) so that it can be used to the full in our management strategy PDCA process.
This roundtable, headed by the CEO, will have section-manager level employees from each department (sales, manufacturing, R&D, PR, marketing, pre-sales, HR, IT, legal,etc.) who will share information and data from their frontline activities. Based on this information, we will work through a cycle of "hypothesis ˿ devise management strategy(plan) ˿ implement (do) ˿ evaluate (check) ˿ adjust".
This approach aims to proactively align management strategy with stakeholder feedback and other information from the frontlines while cultivating a strategic management
mentality in middle managers.

57

Stakeholder Survey Results
Business partner survey(Terrestrial Resources Business)
Surveyparameters

1

Selected survey results are presented below.

3 Opinions and expectations for AMITA

Survey group : Business partners (waste generators; steel, nonferrous metal and cement makers)
Respondents : 189 companies (out of 532 who were sent the survey)
Survey period : August 26 – September 12, 2014
Survey method : E-mail and postal mailReasons for selecting AMITA as a vendor

As with last year, many respondents
mentioned that the "people" factor (that is, theassiduous efforts of our sales team), as well as
the quality of our products and services, wereamong the reasons they chose AMITA.

(No. of respondents)
Sales representatives

84

Service quality andproduct quality
More attractive proposals
than other companies

Also, a certain number of customers noted
the price advantages for certain types of
production residues, packaging, andtransportation.

70
52

Price advantage

50

Affinity with AMITA's
corporate philosophy

48

ResponsivenessMoving forward, we intend to improve thequality of our operations with quicker and moreagile responsiveness at our resource recycling
plants, in order to offer even greater value
and differentiation to customers.

44(Top six responses, multiple responses allowed, n=189)

Also, respondents expressed praisefor improvements made related topoints of dissatisfaction raised during
last year's survey. For example, delays
at some AMITA plants in receiving ofwaste were addressed by finding
new users for recycled materials andadding new equipment.

(No. of respondents)

Sales representatives'
commitment/caring andresponsiveness
Service quality

107
70

Speed of response toquestions/urgent situations

63

Results

48

Communications services

41

Price

30
(Top six responses, multiple responses allowed, n=189)

In order to strengthen AMITA's support
for customer environmental strategies,
we will continue to cultivate employeeswith the capabilities to craft appealing
proposals and implement them.

4 Desired improvements and points of concern for AMITA
Overall, we received a lot of feedback desiring
improvement on pricing, and much of thisfeedback specifically concerned our services
that turn industrial waste into valuable
materials, and also our transport costs.

2 Satisfaction with AMITA's services
Satisfaction improved from theprevious year. 83.6% of customers
responded they were "very satisfied","satisfied" or "somewhat satisfied".
Our specialized expertise in waste
disposal and flexible, detail-oriented
responsiveness were highly praised.

We received the highest praise for how
our sales representatives and otherpersonnel continue to bring as muchcommitment and conscientiousness totheir work as at the time of signing thecontract. Also receiving high marks
were our responsiveness to urgent
situations, our high level of service
quality for compliance, and our various
communications services.

2013

4.5%

0.4%

2014

2.7%

0.4%
14.7%

13.2%

19.6%

0.5%

In 2015, AMITA will expand into Japan's
Shinetsu-Tohoku South region and open a
recycling plant in Taiwan to expand the area
we can serve. This should have the effect of
reducing transport costs in those areas. We arealso making further corporate communications
efforts to raise awareness of our valuable
materials.
(http://www.amita-oshiete.jp/(Japanese only))

13.2%

10.6%
6.1%
59.8%

54.3%
(n=245)(n=189)Very satisfied

SomewhatsatisfiedSomewhat
unsatisfied

Satisfied

NeutralUnsatisfied

Very unsatisfied(In both cases, single-response questions)

After price, the most desired improvement wasin speed of response. Primarily, wishes wereexpressed for faster response to requests fortaking in industrial waste, assessment ofreceiving new types of waste, and system(No. of respondents)
Price

120

Nothing inparticular45

Responsiveness

26

Service quality
Resolution ofproblems
Sales
representatives

18
12
7(Top six responses, multiple responses allowed, n=189)

registration. In 2015 we plan to revise workflow at our plants
to improve operating efficiency and shrink response times.
Additionally, in 2015 we will develop and offer new recycled(alternative) resources for nonferrous metal and steel
makers, expanding the range of production residue andproperties that we are able to receive for recycling.

Management comment on survey results
This year's survey generated much valuable feedback from 189 customers. While customers praised the commitment andresponsiveness of our employees, only about 10% indicated that they found our proposals uniquely attractive. AMITA's
senior management takes this very seriously.
In 2015, we are undergoing a corporate restructuring, to position ourselves as an environmental partner that consults withcustomers on their environmental problems to provide total solutions beyond the framework of compartmentalized

58

services. Not only will we offer ways to optimize the cost and risk of problems that customers bring to us, we will be able
to advise them on creating and implementing a future-oriented overall environmental policy. In addition, throughmeasures including the systematization of our sales and recycling operation businesses, and investment in equipment andfacilities at our production plants, we are striving to meet demand for improved speed of collection and decision making
regarding handling as swiftly as possible.

AMITA Group Partners survey

Business partner survey(Environmental Certification Business)
Surveyparameters

Selected survey results are presented below.

Survey group : Certified businesses
Respondents : 153 companies (out of 314 who received survey)
Survey period : August 26 – September 12, 2014
Survey method : E-mail and postal mail

1.8%

3.9%

18.8%

15.2%

1.3%
15.8%

1 Thoughts on working with the AMITA Group

25.0%

6.2%

8.6%

57.1%
(n=112)

95.9% of respondents among all types of partners
were "very satisfied", "satisfied" or "somewhat
satisfied".

45.4%(n=152)

Very satisfied

SomewhatsatisfiedSomewhat
unsatisfied

Satisfied

NeutralUnsatisfied

Very unsatisfied(In both cases, single-response questions)

The ranking of most commonly cited points ofconcern and desired improvements was as follows:
1) Price (68 respondents); 2) Communications
services (13); 3) Responsiveness (9); 4) Staff
handling administration and enquiries (8); 5)
Auditors (7). This shows that along with strong
desire for better pricing, customers want to see
more awareness-building and market
development for certification, and speedierissuance of AIEC reports.

fee is allotted to its branches in various countries forawareness-building efforts. In Japan, PR activities were
ramped up last year via FSC JAPAN, focusing on mid-term
market development in the run-up to the 2020 Olympics. In
the case of AIEC, various sites belonging to the AMITAGroup are used to publicize it, and seminars on projectcertification for corporations hoping to win Olympics-related
business are being used to build that market, as AMITA
works to stimulate demand within Japan for environmental
certification products and add value to these offerings.

Reasons for more feedback about price thanthe previous year include the increase in the
consumption tax enacted in 2014, and a rise in
the annual management fee charged by FSC
itself for FSC certification.The FSC management

Concerning improvements in response speed and enquiries,
AMITA takes the feedback seriously and is planning to
upgrade the service infrastructure through retooled workflow
and further training of employees.

Management response to survey results
The decline in satisfaction from the previous year is taken very seriously by the senior management of the
AMITA Group. We acknowledge that there was a situation in which an overall value proposition that madecustomers feel that certification was cost-effective was lacking due to an unbalanced allocation of humanresources and an insufficiently robust service system. We intend that the merger with AMITA CORPORATION
effective in 2015 will allow organizational adjustments within the Group that will improve service quality.

In addition to feedback that our employees areproactive, conscientious and make customers feelthat they are working together to build value, there
was a high degree of trust in the expertise of AMITA'svarious companies.

4.2%
Very satisfied

Stakeholder survey results

One point on which respondents continued tobe satisfied was the speedy response andquality of results most often cited with respect
to responsiveness of auditors and staff. There
was praise for quick response to enquiries andeasy-to-follow explanations provided byevaluators, seminars and in cases ofcertifications standard revisions. At the sametime, respondents who were unsatisfied orsomewhat unsatisfied often pointed to price as
their concern.

AMITA HOLDINGS Co., Ltd. (below, AMITA HD) deals mainly with companies that provide services related to
web sites, publications, IT systems, etc.
AMITA CORPORATION has a larger roster of partners, such as outside speakers, vendors (web designers,
report writers, equipment suppliers, collection and transport companies, etc. AIEC's main partners are external
auditors, and for AMITA Institute for Sustainable Economies Co., Ltd. (below, AISE) the main respondents aremunicipalities and regional contacts.

2014

2013

0.9%

: Partners (collaborating companies, logistics companies,
environmental certification auditors, operating partners)
Respondents : 48 companies (out of 107 who were sent the survey)
Survey period : August 26 – September 12, 2014
Survey method : E-mail and postal mail
Survey group

Associations with survey recipientson the services of AMITA Institute of
1 Opinions
Environmental Certification Co., Ltd. (below, AIEC)
Satisfaction dropped somewhat from theprevious year. 69.8% of respondents were"very satisfied", "satisfied" or "somewhat
satisfied" while 5.2% chose "somewhat
unsatisfied" or "unsatisfied".

Surveyparameters

Selected survey results are presented below.

Satisfied

12.5%

Somewhat satisfied
39.6%

NeutralSomewhat unsatisfied

43.7%

Desires expressed by customers included tie-ups
across more businesses and improved quality ofcollaborative activities, and expanded recognition of
their businesses.

Unsatisfied
Very unsatisfied(Single-response questions, n=48)

Please tell us what undertakings

2 you would like to pursue with AMITA in the future
Our partner companies responded with many proposals for new business and technology ventures with the
AMITA Group. We will continue building our business capabilities to meet these expressed needs.
Company Name

Main areas of interest

AMITA HD

Develop new systems and services, coordinate operations, build networks, etc.

AMITA

Expand volume of business, conduct research on uses for recycled products,
mutually beneficial recycling arrangements, etc.

AISE

Develop new ways of using regional resources, etc.

AIEC

Develop new certification businesses, expand and raise awareness of existing certifications, etc.

Management response to survey results
We consider all our partner companies to be part of the AMITA "family", working with us to create theenvironmental value that the AMITA Group provides. We hope that in pursuit of our aim to meet a critical social
need of our time by bringing about a sustainable society, our partners will stand by us in tackling difficulties thatcome along, and in celebrating the solutions, as we continuously build our collaborative relationships.

59

Stakeholder Survey Results
Shareholder survey
Surveyparameters

Selected survey results are presented below.

What are your opinions and expectations

4 when it comes to how the AMITA Group can improve its business?

Survey group : Shareholders
Respondents : 104 shareholders (out of 781 who received the survey)
Survey period : October 15 – November 30, 2014
Survey method : Enclosed with Designing the Future newsletter sent to shareholders and investors

1 Reason for investing in the AMITA GroupThe most common response, from54 respondents, was "nature ofbusiness activities", followed by"significance to society" from 48
respondents. This indicates thatmany are investing in AMITA
because our socially consciousand public-spirited approach tobusiness resonates with them.
The 36 respondents citing "future
profit potential" reveal expectations
for the potential of the environmental
business field.

(No. of respondents)
Nature of business activities

54
48

Significance to society

36

Future profit potential
Approach of top management

22

Management philosophy/ideals

21
5

Other

5

Stability
No response

3(Multiple responses allowed, n=98)

aspect of the AMITA Group2 Whatwould you like to know about in more detail?
The most common response,from 38 respondents, was "trends
in main lines of business", followed
by "medium-term management
strategy" from 34 respondents
and "dividends policy" from 33
respondents. We interpret theseresults as a desire for more
explanation about how we return
profits to shareholders alongsideresults and future businessstrategy.

(No. of respondents)
Trends in main lines of business

38

Medium-term management strategy

34

16.3%

Concerning the nature and direction of
AMITA's business, respondents expressedmuch agreement, but also rising expectations
that AMITA deliver satisfactory profits.

Agreement and encouragement
Improve financial performance/
secure profitability

12.5%

Bolster IR/corporate
communications activities
No response

Raise stock price and dividend(Write-in response, n=68)

29
16

Investment plans
Management philosophy/ideals

Management response to survey results:

13
10

Environmental contributions(Top seven responses, multiple responses allowed, n=99)

3 What is your policy toward investing in the AMITA Group?

39.4%

41.4%

Increase holdings
Considering selling

7.7%

11.5%

AMITA offers its sincere gratitude to all the shareholders who took the time to respond and share their valuable
feedback in 2014. AMITA's leadership is acutely aware that since listing on the stock market, the company has
continued to fall short of satisfactory profitability and dividend distribution. The top priority in running thiscompany is the sustainable growth of company and society. Today, across the globe we are seeing resource
depletion, rising population, climate change, and, in Japan, an unprecedented ageing of the population anddecline of the birth rate, which are increasingly destabilizing society as a whole. AMITA is offering a new vision
for a way of life and a way of doing business that embraces an environmental perspective, in the firm belief thatthe businesses we are bringing into existence will be absolutely essential to Japan in the near future. That is thebasis on which we will execute our plans in FY2015.

Hold long-term

Undecided(Single-response questions, n=104)

60

7.7%

33

Dividends policy
Trends in new lines of businessAlthough "hold long-term" and "increase holdings" madeup 53% of responses (55 respondents), close to 10% of
respondents chose "considering selling". We interpret
this to mean that although sympathetic to the"significance to society" aspect of the AMITA Group's
work, and the desirability of building a sustainable
society, these respondents may not foresee the stock
reaching their desired price level.

28.9%
34.6%

In FY2014, AMITA generated expectations
associated with new businesses, including
business outside Japan, but earned
criticism over its results in recent
years and the dividend situation, andrespondents also said they expected bothmore transparency about businessstrategy and a higher stock price.

15

Uniqueness

The most common opinions expressedin the survey were: agreement andencouragement for AMITA's business at
29% (30 respondents); expectation forimproved financial performance and solid
profitability at 16% (17 respondents); andexpectation for a higher stock price anddividend at 12% (13 respondents). In
addition, 8% of surveys expressed
opinions desiring better promulgation of IR
information.

Along with our annual report issued each spring, we also publish a Designing the Future newsletter in
the autumn. It relates market conditions and strategies for important business initiatives, and thefinancial situation for the second quarter.
http://amita-hd.co.jp/ir/future.html (Japanese only)Employee survey
Surveyparameters

Selected survey results are presented below.

Assessment by management of whether the human resources development

2 principle that "people are an asset, not a cost" is being followed.

: permanent employees and contract employees (141 individuals)
The survey group did not include executives, dispatched workers or part-timers
Respondents : 111
Survey period : September 29 – October 10, 2014
Survey method : E-mail and postal mail
Survey group

Responses were roughly split down the middle
between "yes" at 40% (44 respondents) and "no" at
39% (43 respondents. In FY2013, "no" responses(31%) outnumbered "yes" responses (21%), so the2014 results show improvement.

This year's response rate among employees was 79%,a large improvement over last year's 54% (85/158 individuals)

1

The major reasons given by "yes" respondents
were "expanded educational opportunities" and"improved HR systems". Reasons given by
respondents answering "no" included "howpersonnel planning/training planning is done","high turnover of employees" and "divergence ofparticular decisions from ideals and philosophy".

Employee perceptions of their jobs

Among those who answered yes to the above
question, about 60% gave as their reason"empathy with AMITA's ideals and businessactivities" while 10% said "AMITA's
uniqueness". Also cited in the responses were
the feeling of making a contribution to society
and the enjoyment of working with colleagues
and customers. On the other hand, among
respondents who answered no, reasons given
included "pay and benefits", "company's
direction/future", and "gap between ideals andreality".
In response to a separate question about how
much employees empathize with thecompany's mission and ideals, 84% of
employees (93 respondents) indicated that they
did empathize. However only 62% (69respondents) answered yes to the question, "Is
your current job worth devoting your life to?"That is a divergence of about 20 percentage
points.
In 2014, along with the survey, AMITA's humanresources department conducted face-to-faceinterviews with all employees. It came out inthese interviews that one factor behind the"Is your current job worth devoting your life to?"(Compared to previous year)(No of. Respondents)
69

45

40

17

2013
2014

Yes

No

(Single-response question, n=111)

perception of a "gap between ideals and reality" is that AMITA's
corporate philosophy, and the intentions behind management's
decisions, are not being effectively transmitted to front-line
employees. To address that, employee training in 2014
emphasized how middle managers can connect executives withfront-line employees, giving managers a better understanding of
our corporate philosophy, so that they can better convey it intheir own words in the workplace.
If employees with a negative view of the AMITA Group's values
and corporate philosophy join AMITA just because of thecompany’s work conditions (rather than its values/philosophy),it's fair to say they’ll be working in a job that they do not feel isworth devoting their life to. It is difficult to build truly good
relationships with such employees. Beginning in 2015, AMITA's
recruiting activities will shift toward hiring individuals who are
more aligned with the values and ideals of the company.
Specifically, we will no longer use large recruiting sites, instead
relying more on our own recruiting events and web presence.

The need to make changes to personnel
planning/training planning led us in 2014 to adjust
requirements for qualification grades. In 2015 thechanges to the personnel system will be explained
company-wide, and processes for evaluation andpromotion will be brought into line with the key values of(No of. Respondents)
44

43

40

27

24

18

2013
2014

Yes

No

Not sure(Single-response question, n=111)

Stakeholder survey results

In response to the question, "Is your current job
worth devoting your life to?" 62% (69respondents) said yes, up from 53% (45) the
previous year. The number responding "notsure" fell dramatically from the previous year's
47% (40 respondents) to 15% (17). These
results indicate that the number of employeeswith an overall positive view of their job has
increased.

One company principle is that people are to be considered an
asset, not a cost. Is this thinking implemented from the
management's perspective? (Compared to previous year)

the AMITA Group. Concerning the high turnover of employees, HRinterviews pointed to inadequate communication with superiors, so
we are focusing on raising the level of people management skills
through manager training.

Assessment by employees of whether the human resources development

3 principle that "people are an asset, not a cost" is being followed.
50% of responses (55 respondents) said "yes" and21% (23) said "no", reversing the results from theprevious year. This suggests that our humanresources development philosophy is sinking in.

Q: One company principle is that people are to be considered
an asset, not a cost. Is this thinking implemented from theemployee's perspective? (Compared to previous year)(No of. Respondents)

Many responses showed recognition that eventhough there is greater consciousness of needing
to seek improvement in day-to-day operations, it
has not yet led to concrete results.
Since our employees are a great asset, what isneeded is to create an environment and mindset
enabling them to contribute to creation,enhancement and augmentation of valuecommensurate with their grade. In 2014, we aimed
to increase attention to internal training, especiallyamong managers, and introduced e-learningcompany-wide to enhance practical business skills.
In 2015, we intend to strengthen training support

55
39

34

33

23
2013

12

2014
Yes

No

Not sure(Single-response question, n=111)

measures by grade, and by attending external training andissuing recommended book lists, in order to promote achange of mindset and skill enhancement among employees.

Management response to survey results
Although some components of the survey results indicated improvement, when factoring in town-hall meetings with
employees, we perceive a trend of waning self-confidence and pride among employees, and recognize this as a very serious
problem. Since AMITA went public in 2006, we have endured prolonged difficult business conditions, and heard many
voices of impatience and anxiety about the future from employees who feel that their efforts and commitment are not beingreflected in the company's results. AMITA's leadership is making 2015 a year to follow up on important businesses and tobuild systems that can quickly and effectively implement strategic imperatives. We intend for this to be a year in which
employees can experience the joy of achieving their individual goals. Also, on the issue of improving the working
environment at our resource recycling plants, we continue to assess measures for heightening safety in the workplace andmaking operations more efficient. In addition, we will promote more interaction between subsidiaries and among
employees by making internal information more visible and accessible.

61

2015

New
Project

2015 Corporate Reengineering Project:

Remaking AMITA into an Era-defining Company
Up to this point, AMITA has unfortunately not come close to achieving the scale, profitability or pace of growthto achieve our mission of generating both enough natural and empathy capital to create a sustainable society.
In order to better bring about the thriving society of tomorrow that we envision,
beginning in 2015 the AMITA Group will carry out a corporate restructuring in stages over the next three years.

The AMITA Group Corporate Reengineering Plan
FY

2015

2016

2017

Stage

Lay groundwork/build systems

Strengthen key organizational functions/
Increase quality of value propositions

Launch new ventures/Offer new value propositions

Main initiatives

Restructure businesses to improve value propositions
Restructure organization to improve value
propositions and efficiency of operations
Implement and operate systems for collaboratingwith outside partners
Make internal preparations for establishing management
planning and management strategy functions

Business planning and strategy functions
Establish marketing function
Build up and utilize network of businessdevelopment partners
Automate recycling plants

Reengineer all departments, planning anddevelopment, sales, production and administration
Implementation planned for in 2016

Major initiatives in 2015
1 Restructure businesses to improve value propositions
On January 1, 2015, the AMITA Group officially restructured our three business domains into two.
We did this in order to focus on fostering greater social and environmental consciousness in industry and forging self-sufficient cyclical systems at a regional level.
Individual services such as recycling, outsourcing and environmental certification will be bundled into a single environmental strategy support programme for customers,
bringing forth greater synergies and contributing to the growth of environmental value for our clients.
Services for companies

Services for local municipalities

The AMITA Group is committed to solving problems facing
society by supporting the environmental strategies ofcompanies. This includes reducing environmental risks,
costs and burdens, while at the same time increasing
environmental value through the entire supply chain of acompany's products and services. By working along these
two axes, AMITA is building a value-creating system that
leads to industrial growth accompanied by growing social
value.

The AMITA Group supports the building of compact,
self-sufficient regional systems that harness neglectedresources within a given region. By designing a Regional
Comprehensive Cyclical System of Resource Usage—which
employs social technologies like biogas plants, symbiotic
farming, fuel production from neglected material resources
and waste, and distributed energy generation—we create
the resources, economic vitality, employment and positive
relationships among people that lead to a stable andviable community within the region.

Environmental Strategy Design BusinessTerrestrial
Resources
Business

Regional
Resources
Business

Information
Resources
Business

For an overview of the three business domains prior to 2015 see P7.
For details on the Terrestrial Resources Business see P16,
Information Resources Business P32, Regional Resources Business P38.

62

Regional Systems Design Business2 Restructure organization to improve value propositions and efficiency of operations
As of April 1, 2015, the AMITA Institute of Environmental Certification Co., Ltd. has been merged into
AMITA CORPORATION. The purpose of carrying out this merger was to implement a shift from offering
separate specialized services to offering a more comprehensive service supporting growth of corporate
value. This is in line with our clients' wishes to strengthen their competitiveness in global markets bygenerating more value. We anticipate the following effects from the merger:

1) The ability to offer corporate clients more comprehensive solutions
to their environmental challenges;2) Strengthened frameworks for providing each service,
due to optimized allocation of personnel;
3) Improved efficiency of sales;
4) Reduced SG&A.

Mergercontract date

January 30, 2015

Mergereffective date

April 1, 2015

Merging
corporation:

AMITA CORPORATION

Defunct
corporation:

AMITA Institute of Environmental Certification Co., Ltd.

For details on environmental certification services see P36

Implement and operate systems

3 for collaborating with outside partners
In order to simultaneously improve the profitability of existing businesses and accelerate the growth of
new businesses, optimal distribution of resources within AMITA is needed, as is creating mechanisms
for actively establishing tie-ups with outside partners. To this end, in 2015 the AMITA Group will do thefollowing:1) Establish and operate, on a trial basis, a system for engaging individuals as business
partners

Individuals such as retired people, or those unable to work full-time due to childcare obligations, have skills
and networks that the AMITA Group can benefit from and make the most of. We will build a system thatenables us to partner with such people in working to create a better future. Our plan is for the system to belaunched on a trial basis in 2015 and to go into full-scale operation in 2016.

2) Foster collaboration with outside organizations and public-private partnership measures

Continuing from 2014:
Work with the Institute for Global Environmental Strategies (IGES) and the Kitakyushu Asian
Center for Low Carbon Society to create cyclical resource systems for SE Asia
Expand recycling services domestically through tie-ups with AMITA Terrestrial Resources Partners
Collaborate with Shinrai Zaidan in forming network of "social entrepreneurs";acceleratecollaboration with the Japanese Ministry of the Environment, Ministry of Foreign Affairs,etc.; actively pursue joint research with universities; accelerate pace of business development andmarket entry; and acquire wide-ranging information and knowhow.

Held public interest event jointly with Shinrai
Zaidan and Kansai Telecasting Corporation(2014)
Conducted joint survey of Palau and Vietnam with
IGES, etc. (2014)

Real Re-engineering:
A More Sustainable Business for a More Sustainable Society
Our management decisions are guided by our philosophy of creating
sustainable growth for company and society. We prioritize measuresthat bring growth leading to genuine prosperity—long-term growth forour business and society, rather than short-term or temporary profits.
For this reason, we have on occasion made investment decisions
which we knew entailed risk, and which aimed to bring market
solutions to latent social needs that are still inchoate.

Beginning in 2015, in order to break out of the stagnant results of thepast few years, and fulfil our goal of sustainable growth for company
and society, we will carry out restructuring of our organization andbusiness domains. We will strive to create a company more open to
outside partnerships and create a business platform that is not boundby the limits of our individual organization.

Kenichi Sugimoto, COO
63

2015

AMITA’sOrganization

A Value-creating Organization
The AMITA Group, as a company that provides solutions to the challenges faced by society,is aiming to build an organization optimized for creating both the value that society needs and also positive relationships among people.

The AMITA Group
Organizational Structure

AMITA HOLDINGS
Organizational Structure for FY2015

The AMITA Group consists of parent company AMITA HOLDINGS Co.,
Ltd. and two subsidiaries. Consolidated total employees number
approximately 150. Important matters are discussed at the board meetingsof each subsidiary and at AMITA HOLDINGS Co., Ltd. board meetings. The
subsidiary AMITA CORPORATION mainly operates the Environmental
Strategy Design Business targeting corporate clients. AMITA Institute for
Sustainable Economies Co., Ltd., our other subsidiary, conducts researchand studies on technologies and new systems necessary for a sustainable
society; it is focused on the Regional Systems Design Business.

AMITA HOLDINGS Co., Ltd. serves as the wayfinder forthe entire AMITA Group, setting strategic direction andmanagement strategy. It consists of the Business Integration
Group, within which are HR, public relations, sales

AMITA HOLDINGS Co., Ltd.
AMITA CORPORATION
Environmental Strategy Design Business
100% recycling of waste / Stable supply of alternative raw materials /Consulting on environmental CSR efforts / Outsourcing of environmental
operations / Green energy services / Consulting on environmental
operations IT implementation / Environmental certification, auditing / etc.

General Meeting of Shareholders
Board ofDirectors

As part of our corporate governance structure, this independent body
Audit andSupervisory Board determines auditing policies and plans, and oversees the board of directors.

President& CEO
Business
Integration Group
10-year management
vision-setting
Manage PDCA process

Regional Systems Design Business
Design Comprehensive Cyclical System of Resource Usage model/ Harness
neglected regional resources / Build up and develop recycling technologies /Support symbiotic farming etc.

64

Performs human resources function. Cultivates
personnel with attitude and skills needed for generating
value. Drafts business plans.

Empathy
Capital Team

Performs corporate communications, IR and marketing
functions. Harnesses people's ideals and aspirations
as a form of capital mobilized through investing /participating / utilizing / cooperating with AMITA.

IT TeamBiogas electricity production, etc.

AMITA Institute for Sustainable Economies
Co., Ltd.

Design Team

Performs pre-sales, sales promotion and sales
Customerstrategy formulation functions. Brings customer
Relations Team perspective to management.

Regional Systems Design Business
AMITA Institute of Environmental Certification Co., Ltd. was merged into
AMITA CORPORATION as of April 1, 2015. The purpose of carrying out
this merger was to strengthen our services, through the ability to offer
more comprehensive solutions to corporate clients' environmental
challenges and through the optimized allocation of personnel.

promotion & marketing and IT; the Management SteeringGroup, which handles finance and accounting; and theManagement Support Group, which handles overall
administration, legal work and auditing.

Management
Steering GroupAccounting
Team
FinanceTeam

Management
Support GroupInternal
Auditing Team

Performs strategic IT development function. Builds
IT platforms needed for management strategy.

Collaborate toestablish AMITA
corporate culture
and style.
Collaborate todevelopmarketingapproaches forprice-competitivemarkets.

Increase the company's value by setting
budgets and earnings recovery measures
based on business plans.

Management Performs legal and administrative functions.
Support Team Establishes systems to mitigate risk and increase value.

AMITA HOLDINGS Executive Leadership
Exective Directors: 4 / Non-exective Directors: 1 /Audit & Supervisory Board members: 3

Interview #1

Eisuke Kumano on the Strategy for Appointing Non-exective Director

All ages given, and all responsibilities listed, are accurate as of 2015
For bios of auditors, please consult the company website at:
http://www.amita-hd.co.jp/ir/management.html
Eisuke Kumano, Founder & CEO

Kenichi Sugimoto, COO

Born 1956. Joined the company
at age 23. Became CEO in 1993.
Following his motto— "Ordinary
people, working together, canachieve the extraordinary"—hehas dedicated his life to building
a society with a new measure ofvalue: empathy capital. Serves
jointly as CEO of AMITACORPORATION and AMITA
Institute for Sustainable
Economies Co., Ltd.

Takafumi Hasegawa, CSO
Born 1962. Since joining AMITA
in 1990, has been in charge of
production management andrecruiting downstream users forthe recycling business. Sincejoining the board in 2013, hasbeen entrusted with disasterrecovery initiatives and opening
new markets. In 2015, assumed
responsibility for AMITA's sales
and product development. Motto:"If you fall, get back up."

Emile H. Ishida, PhD, Non-exective Director
Born 1953. Worked as an
executive at a major building andhome mechanical systems
company, and served as aprofessor at Tohoku University(now an emeritus professor).
Joined the board in 2014.
Advocate of management basedon "backcasting": defining adesirable future and then working
backwards to make decisions forthe present. Holds to no motto
because, as he puts it, he isalways evolving.

Strategy for Appointing Non-exective Director

Born 1960. Joined the company
in 1983, handling mainly trade invaluables for the Terrestrial
Resources Business. In 2015,
assumed responsibility for allenvironmental strategy designand legal/administrative,
Group-wide. His motto is, "Do
right in the sight of God."

Q1: Why was Prof. Ishida appointed a
Non-exective Director in April 2014?
A1: Our company previously employed a management
approach that emphasized the creation of terrestrial resources
through recycling and the development of environmental
business consulting services. But since the 2011 Tohoku
earthquake and tsunami, the AMITA Group has changed
course fundamentally. It has become a company that strives
to "forge a flourishing future" by envisioning a better way oflife for tomorrow. AMITA is transforming itself to be integral
to the future. What is needed now is to visualize what that
future should look like, and to share that vision with all our
stakeholders. In order to accomplish this, we have called
on Prof. Ishida, who has deep knowledge of the root causesof global environmental problems and their social impacts,
as well as extensive executive management experience, to aid
in our management planning. The backcasting approach that
Prof. Ishida advocates, along with his philosophy o f "natural

Interview #2

Taro Shimizu, CFO
Born 1967. Joined in 2003 afterworking in financial management,
including at a major retailer.
Overall responsibility for financial
accounting of the group.
Committed to responsive andefficient accounting operations
and robust finances. Motto: "Iknow that I do not know."technology" (which incorporates the wisdom and capacities ofnature's living systems into human civilization) will have amajor impact on the AMITA Group's product development in
the years ahead.

Q2: Currently AMITA has one Non-exective
Director. Are there plans to add morein the future?
A2: We have no firm plans at the moment to add more. But
we do intend to incorporate knowledge from the social welfare
and education sectors, and we will actively seek to increase
the voices of women in guiding the company. We will takeadvantage of our Non-exective Director’s outside perspective
and network of contacts in order to enhance the company's
capacity to develop solutions for issues facing society.

Emile H. Ishida on the Role of a Non-exective Director

Q1: Why did you agree to become a
Non-exective Director of AMITAHOLDINGS?
A1: The AMITA Group is rethinking waste from the ground up.
It wants to bring about a sustainable society by creating
unique resources, and it is one of the rare companies that isrevolutionizing how we look at the supply chain (that is, theentire set of processes from raw materials through deliveryof products and services to the consumer. A supply chainthat erases the boundary between waste processing andmanufacturing is what the coming era demands. At the sametime, however, the company has struggled for growth overthe past few years, and I believe that my expertise andprofessional network can be valuable to AMITA in making a
breakthrough.

Q2: From your perspective as a
Non-exective Director, what are thechallenges facing the AMITA Group,and how can they be surmounted?
A2: I feel that the foremost challenge is that the ideals andmission of the company are not being fully translated into
concrete strategy. Today the AMITA Group is like anoverstretched spring. The leadership is reaching for the
future, expanding the company's business ambitions, but
operations on the ground have not kept pace. Ideally, thebottom would be pulled up at the same pace as the top. For
that to happen, however, a few things must change. The
business-transformation plans of company leaders must be
communicated more clearly and shared more effectively.
Leaders who can translate the company's mission intobusiness strategy and tactics must be cultivated. The way all
employees see the nature of their work must be transformed.
Because AMITA is so serious about its ambitious mission, it is
all the more important not to leap before looking, but toproceed step by step as it implements the plans of eachbusiness unit. This will foster the entire company's ability to
execute its mission.
The management structure should delegate more authority
from the executive suite to group leaders and team leaders, tocreate a system in which managers closest to the front-line
business can formulate nuts-and-bolts strategies.

Q3: And how do you see your role?
A3: The most important thing I can do is bring an outsider's
perspective into the boardroom. I don't have any baggage
from experiences of past successes or failures here, and so I
can offer a different way of thinking about things to the
executive leadership. Primarily, I can help them define their
mission, and ensure that value-creation (which is what it allcomes down to) is instantiated in tangible products andservices that contribute to business growth.

65

Our Mission II
Wisdom and Life are infinite.
Through changes in our surroundings and the evolution of sympathy,
The formation of external and internal relationships create us.
There are no stable phenomena; the universe is in flux.
Because we are who we are,
We need to have a good relationship with inifinite life.
Our hearts hold everything that humanity seeks.
What humanity seeks is to protect the dignity of our future children.
We have the passion to give this goal a form and offer it.

We declare.
To attest that life is capital to create value,
To give priority to building cyclical relationships for realizing a sustainable society,To conduct only business that contributes to increasing natural capital and human relation capital, andTo protect the dignity of living systems.

AMITA HOLDINGS CO., LTD.
AMITA HOLDINGS CO., LTD.
535 Akinono-cho, Oshikoji-agaru, Karasuma-dori, Nakagyo-ku, Kyoto
604-0847 Japan
TEL: 075-277-0378 FAX: 075-255-4527
e-mail:press@amita-net.co.jp
JASDAQ (Securities Code 2195)
http://www.amita-hd.co.jp/

Published by:AMITA HOLDINGS CO., LTD.
Publisher:Eisuke Kumano
General Editor:Eisuke Kumano
Written and edited by
Akari Fujimoto, Junpei Yoshida, Yuichiro Ebina, Motoki Maeda
Designed and printed by Daishinsha Inc.
Copyright©2015 AMITA HOLDINGS CO., LTD. All rights reserved