Published 2017

Annual Report 2016

Creating Value,
The AMITA Way

“No one will be able to live if the seas are polluted andnature disappears”- The story of a small miracle in Minamisanriku -Have you heard of Minamisanriku in Japan's Miyagi Prefecture?
After the tsunami in 2011, Minamisanriku became known for the steel girders that were all that remained of the
town's disaster response center. However, in happier times it's a beautiful place surrounded by fertile mountains andabundant seas.
The tsunami caused huge damage to the town's fishing industry. The rafts and nets the fishermen had used for decades
for aquaculture were swept away. Some of these fishermen said that, for a while, they lost the will to live. However,feeling a solemn duty to those who died, and thinking of Minamisanriku’s future, they rebuilt their businesses.

The morality that pollution is criminal
only after legal conviction is themorality that causes pollution.
W. Eugene Smith*Quote approved by Aileen M. Smith, W. Eugene Smith's wife

Then in March 2016, the town's aquaculture organization became the first in Japan to achieve certification underthe Aquaculture Stewardship Council's (ASC) Bivalve Standard. Before the earthquake, the local oyster-farmers
cultivated oysters in crowded conditions, squeezing in as many rafts as possible to boost output. After the disaster,
they cut the raft area by two thirds and switched to cultivation methods that do not have an adverse impact on themarine environment.
“At first there was strong opposition. Everyone was worried. However, we found that after sharply reducing thenumber of rafts, we harvested as much in a year as we had previously in three, and the reputation of our oysters
improved in the marketplace. We thought we knew all there was to know about oysters, but actually we knew
nothing. The disaster was our teacher. Before it happened we never dreamed we'd be the first cooperative in Japan toachieve international certification. Sales fell slightly, but whereas we used to work even on weekends, now the family
can go to the movies! We have more breathing space now, a more fulfilling life.” (Kiyohiro Goto, chairman, Togura
oyster group)
What is genuine fulfillment? True sustainability? The answers are here.
The AMITA Group established a base in Minamisanriku in March 2012. It has since developed in tandem with the town's recovery. To realize the town's vision“Forests, fields, ocean, people: the Minamisanriku cycle of life”-AMITA supports the creation of a community that places great value on linking people with theabundance of their natural surroundings. Our work includes establishing arrangements for recycling resources, conducting forest and marine environment certificationassessments and providing guidance with regard to environmental farming practices. (See pp.16 & 19 for details)

Photographs (cover/inside cover): Shigeharu Koike

CONTENTS
1 Message from the CEO: "40 years: a fresh resolve"
4 FY 2016 ﬁnancial and non-ﬁnancial highlights
12 Mid-to-long-term business strategy
14 Highlights of key initiatives in FY 2016

Growth in business in existing markets and withexisting clients
New business, market development

22 UN Global Compact progress report40 years: a fresh resolve

Creating the future with “Innovation 3.0”: social innovation
AMITA HOLDINGS Co., Ltd.

Founder and CEO

Top Priority: Value Creation and an Earnings
ReboundIn April 2017, the AMITA Group will celebrate 40
years in business. I would like to offer my heartfelt
thanks to the many stakeholders, including ourshareholders, whose help has made this possible.
In FY 2016, sales totaled ¥4,729mn (initial forecast:¥4,868mn), operating income ¥77mn (initial forecast:¥70mn), and ordinary income ¥53mn (initial forecast:¥41mn). The company booked a net loss of ¥26mn(initial forecast: ¥19mn).
While we hit our operating and ordinary income targets,
I’m afraid to say we incurred a net loss. However,results improved sharply year on year. We think the
restructuring we have implemented over the past few
years in the group as a whole is steadily yielding fruit.

Things are starting to take shape.
A decade has passed already since the company was
listed in 2006. Looking back, soon after listing, as
society was being shaken by the subprime mortgage
crisis and the collapse of Lehman Brothers, we failed
to understand and anticipate market trends and in2010 incurred a substantial net loss of ¥550mn. We
immediately restructured, ceasing some businessactivities and merging companies. The next year, 2011,
net profits rebounded to ¥250mn. Subsequently, thecore of our business gradually shifted from recycling(a volume business) to providing total solutions (aquality business). We aimed to establish a businessmodel that was lucrative even with modest sales growth.
Regrettably, in FY 2016, capex remained a priority
and we missed our profit targets. However, the biogas
facility in Minamisanriku has started to contribute toearnings, and the construction of a plant by an affiliate

Eisuke Kumano

in Malaysia is going smoothly. We will work very hard
to secure stable earnings in FY 2017.
Will the AMITA Group be able to keep its promises
to the market in FY 2017, its 40th year in business and11th year as a listed company? It will be a year in which
the AMITA Group's enterprise value will be tested.
We need to prove through our actions that we cansimultaneously offer social value and pursue profits. We
have therefore made extensive management changes,
bringing in many younger leaders in their 30s and early
40s who have extensive experience on the front lines ofbusiness and outstanding project management skills.
We have also made a major change in direction in termsof our marketing methods, moving away from faceto-face marketing (mainly visits) to inside sales (nonface-to-face sales). Via a combination that includes
effective visits when necessary, but with telephone andemail as the main contact methods, we are striving tostay in close touch with clients in real time, boost client1

satisfaction, and reduce marketing expenses. In terms ofmanagement, creating value and hitting our operating
and net income targets of ¥110mn and ¥15mn are top
priorities. We are working hard to achieve these targets
and have established a structure in which all senior
management get involved in front line activities.

AMITA's history and path to the future
The political, economic, and social setup in Japan andelsewhere has been shaken in recent years. At a time
when it's hard to forecast even a year ahead, I continue
to tell employees and students, “You are the future.” I
bring together like-minded people with a strong urge
to achieve a sustainable society, and together we turnideals into reality. This is the AMITA Group's businessprinciple, and it has not changed in the 40 years since
our founding. This is what keeps us moving steadily
forward in an uncertain world.
AMITA was founded as a metal resources trading
company in Himeji in 1977. When demand declined
due to the second oil crisis, we began to focus on
the value of industrial waste, which offered higher
quality than natural raw materials and represented acompetitively priced alternative. At the time, few people
were ready to accept this approach. Many were adamantthat waste could not be used. But circumstances changedin our favor—there were sharp rises in prices of natural
resources, Japan's economic bubble collapsed, andenvironmental awareness increased worldwide. Slowly
but surely, business expanded.

In 1992, we started operating the Himeji Resource
Recycling Plant, our first manufacturing plant. Our
recycling technology, which fully recycles waste into
resources, has been highly praised. Today we have 7
manufacturing plants and 3 partner plants in Japan andelsewhere, and a network of more than 300 partner
business bases in Japan. This constitutes Japan's
largest resource cycle platform. At the end of the
1990s, we started our Eco-solutions Business, which
simultaneously reduces a company's environmental
risk, environmental costs, and environmental
footprint. Eventually we came to provide a wide
range of environmental support programs, including
environmental certification assessments and CSR
activities. In 2005, we established a sustainable economy
research institute to handle sustainability needs inregional areas. After the Great East Japan Earthquake,
we worked on creating a comprehensive regional
recycling model in Minamisanriku, a town in Miyagi
Prefecture. This resources recycling model centeredon Minamisanriku BIO, a biogas facility that started
operating in 2015. It has attracted attention from local
governments all over Japan and a similar approach is
now being adopted in regional areas across the country.
It has been 40 years since we in the AMITA Group
first developed our core ideal of realizing a sustainable
society. We have continued to devote ourselves tothat goal in these turbulent times, with support fromcountless people, including our many clients and staff,
shareholders, local governments, national ministries andagencies, people in regional areas, and our employees'
families. It is my responsibility to repay this debt byrealizing our company's ideals, and by achieving businessperformance. This challenge gives my life meaning.

Vision of the future
Japan is fast becoming a “super-aged” society, with
30% of the population elderly. A vicious circle isstarting to form, affecting not just remote villages, butalso regional cities: a declining population results ineconomic degeneration, which leads to deterioration in
the natural and living environment, which in turn causes
populations to decline. A prevailing view is that without
an increase in population there will be no economic
development, and that a nation will decline unless it
relies on international demand. But this is mistaken.
In the second half of the Edo period, when Japan wasclosed to the outside world, the Japanese population
remained broadly unchanged, and yet per capita GDP
rose (from $570 in 1700 to $669 in 1820*).
Japanese people at the time achieved sustainable growth
without population growth by competing over value,rather than over short-term growth based on mass
production, consumption, and disposal. They improved
the Japanese morning glory, peonies and decorative carp.
They focused on extensive recycling and the pursuit ofculture and arts. This inspires me. It makes me thinkthat the quality of society can be improved throughprivate-sector knowledge and techniques without relying
on the government or politics.
The AMITA Group, along with client companies and*Ministry of Health, Labour and Welfare (MHLW) white paper2

1977 ̶2016

40 years of pioneering the future
local governments, will bring about “Innovation 3.0”
—social reform that fulfills this ideal. The first stepis two major services: The Sustainable Stage, ourintegrated service established in FY 2016, which
boosts corporate sustainability, and our BIO System,
which boosts the sustainability of regions and local
governments. In addition, we are developing outside
Japan, mainly elsewhere in Asia, a region of striking
growth. Through these business activities our aim
is to establish a Social Systems Design Businessthat will work against the negative social legacies
that are increasing due to technological and market
advances—namely environmental pollution, resource
depletion, and growing human isolation.

1970

1978 -The Second Oil Crisis

1977 Establishes SUMIEITO KOSAN
1979 Issues ﬁrst proposal to use waste in place of natural
resources

1980

1986 Starts to recover precious metals and rare earths

The Plaza Accord

1987 Establishes Tokyo ofﬁce

1985
1987

Global population
surpasses 5.0bn

1990

from electronic components

Eurobond crisis

2012 Opens Minamisanriku Ofﬁce

Establishes Kawasaki and Kitakyushu Resource
Recycling Plant

2010

2011

Great East Japan
Earthquake
Global population
surpasses 7.0bn

2013 Establishment of AMITA Resource Recycling
Partner: AICHI KAIUN Co., Ltd. Gamagori
Recycling S.C.

2014 Launches waste management business outsourcing
service "Best Way Waste Management Service"2015 Establishment of AMITA Resource Recycling
Partner: FUJI UNYU KAISHA, LTD. Resource
Recycling Plant
Establishes Minamisanriku BIO

1992 Establishes Himeji Resource Recycling Plant

1993

Basic Law on theEnvironment enacted
Japan signs
Convention on
Biological Diversity

Issues resource recycling magazine WIEDER

1995 Establishes Ibaraki Resource Recycling Plant
1996 SlurMix , a method of recycling that turns industrial

I seek your understanding and support as we strive to
make this future a reality, and I seek your constructive
guidance. I would be delighted if together, we canplay an active role in changing society. In fact,nothing would make me happier.

2010 Establishes AMITA HOLDINGS Co., Ltd.

1989 New head ofﬁce building completed in HimejiⓇ

Earnings have been sluggish in recent years, but withgrowing social needs and the development of young
people who will be leaders of the next generation, I
am confident that we will be able to bring you plentyof good news in the years ahead.

2010

1998

Global population
surpasses 6.0bn

waste into alternative fuel, successfully patented (No.
2594418)

1999 FSC Ⓡ certiﬁcation assessment service begins

2016

UK Brexit vote2016 Accredited as Japan's ﬁrst ASC aquaculture

certiﬁcation body
Establishes The Sustainable Stage, integrated
service to enhance corporate sustainability
Establishes integrated service BIO System toenhance regional sustainability
Establishes Taiwan Resource Recycling Plant
Establishment of AMITA Resource Recycling
Partner: KIMURA DOBOKU Co., Ltd. Kuchinofuto
Resource Recycling Plant

Consolidated accounting since listing

2000
2001

USA multiple
simultaneous
terrorist attacks

2000 SUMIEITO Co., Ltd. becomes AMITA CORPORATION
2001 AMITA moves head ofﬁce to TokyoAMITA business initiatives win Good Design award

2002 AMITA joins the UN Global Compact
2004 Starts to provide corporate environmental risk
consulting service in earnest

March 20172005

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

Kyoto Protocol enters
into force

2007

Subprime mortgage
crisis

2005 Establishes Institute for Sustainable Economies
Establishes Kyotango Resource Recycling Plant

2006 Listed on the Nippon New market Hercules (whichbecame part of JASDAQ in July 2013)
Starts MSC ﬁsheries certiﬁcation assessment service

2008 CSR and environmental strategy support site
"Daily AMITA Update" website set up

2009 Waste management cloud service

Digital Waste Management System starts

33

FY 2016 ﬁnancial and non-ﬁnancial highlights

INPUT-OUTPUT overview■ Energy input■ AMITA Group companies

Actual at own plant (excluding Taiwan plant,
headquarters, ofﬁces, and partner plants)

Electricity

Number of
consolidated
permanent
employees

AMITA HOLDINGS Co., Ltd.

2,013,000 kWh

156■ Financial performance (Unit: millions of yen)

Including
fixed term andtemporary staff

226*As of end Dec 2016

(renewable energy 730,000 kWh)AMITA CORPORATION

139 klDiesel oil
Kerosene

65 kl

Gasoline

7 kl

AMITA Taiwan
Corp.

■ Water used
Mains water

Actual at own and partner plants(excluding Taiwan plant)

Industrial waste(own plant 140,000t)

160,000 t

Household waste
Minamisanriku BIO, Kyotango plantCommercial food waste
Minamisanriku BIO, Kyotango plant

282 t
45 t

*1 AMITA ENVIRONMENTAL STRATEGIC SUPPORT(MALAYSIA) SDN. BHD. is located in Malaysia and is awholly owned AMITA CORPORATION local subsidiary

AKBK *2*2 AMITA KUB-BERJAYA KITAR SDN. BHD. is doing
environmental business in Malaysia as KUB
BERJAYA ENERGY SDN. BHD. joint venture■ AMITA Resource Cycle Platform

INPUT

By-products and residues
received that become resources

AESS *1

AMITA CORPORATION Resource Recycling Plants/BIO
AMITA CORPORATION ofﬁces/sales ofﬁces/branch ofﬁces
AMITA Resource Recycling Partners' Plants
Partner companies■ Recycling performance

Details on p.6

Actual at own and partner plants (excluding Taiwan plant)

Cement raw material
Specialty steel raw materials (Ni, etc.)
Metal raw materials (Cu)
Liquid fertilizer

OU TP U T

6,078 m3

AMITA Institute for Sustainable Economies Co., Ltd.

Power generated

153,085 t
1,957 t673 t9,358 t750,000 kWh■ Number of clients (companies, local governments, etc.)

1,216 companies, including 300 listed companies

Own plants

Partner plants

7 manufacturing plants

3 basesWaste generators

Collection, transportation,
disposal companies

Total number of websites operated by the group

Around 900 operational bases

Around 300 operational bases

Number of website pages viewed/year■ Company recognition

Details on p.7

Number of users/year■ CO2 emissions

227.9 PV
689,000 UV
Details on p.9

Excluding Taiwan plant, partner plants (AMITA estimate)

SludgeMinamisanriku BIO only

Other raw materials(treatment agents, etc.)

2,175 t11,000 t

In process of collecting raw materials at own plants 119.8 t-CO2
In process of manufacturing at own plants
Headquarters, sales ofﬁces, etc.

880.6 t-CO2
104.1 t-CO2

In this report, "AMITA CORPORATION Resource Recycling Plant/BIO" is sometimes referred to as "own manufacturing plant" or "own plant," while "AMITA Resource Recycling Partner's Plant" is sometimes referred to as "partner plant."

FY 2016 ﬁnancial and non-ﬁnancial highlights

44

Key financial data
Performance highlights■ Consolidated results (Unit: millions of yen)
Sales, operating income, and ordinary income were broadly in line with expectations.
The company posted a net loss of ¥26mn
The AMITA Group's full-year consolidated results for the year ended in December 2016 are as
follows: sales ¥4,729mn, operating income ¥77mn, ordinary income ¥53mn, net loss ¥26mn (sales
missed initial forecast by ¥138mn, operating income beat our forecast by ¥7mn, ordinary income
beat our forecast by ¥12mn, net income missed expectations by ¥45mn).
Sales, operating, and ordinary income rose YoY, and although sales slightly missed forecast results
were broadly in line with expectations. The company booked a net loss, due mainly to lower-thanexpected compensation from TEPCO for damages caused by the Fukushima Daiichi nuclear power
plant accident (booked as extraordinary gains).

Margins on recycling business increased due to business restructuring
Operating and ordinary income slightly beat expectations. Due mainly to establishment of astructure enabling the AMITA Group to respond quickly to emergency spot recycling projects(one-off waste disposal), the company won more for high-margin projects. However, the Taiwan
Resource Recycling Plant, which started operating in March, was slow to make an earnings
contribution due mainly to delay in administrative procedure, shipping adjustment and facility
maintenance in Q4.

■ COGS and SG&A ratios (%)

COGS■ Equity capital ratio (%)

SG&A

COGS improved slightly
COGS and the gross margin
improved slightly to 67.7% and32.3%, from 69.6% and 30.4%
last year, due to higher total sales
and reductions in manufacturingcosts.
SG&A was broadly flat at 30.7%(versus 30.2% last year).

The equity capital ratio
declined slightly
The equity ratio was 13.4%,
down slightly from 14.6% lastyear. This was mainly due tothe booking of a net loss. We
intend to reduce interest-bearing
debt and boost our equity ratio
while maintaining a balance withinvestment designed to improveearnings and rebuild a soundfinancial structure.

FY 2016 ﬁnancial and non-ﬁnancial highlights

5Key non-financial data
Key products supplied■ Number of clients

Companies,
local governments, etc.

The number of clients in the environmental
solutions menu (consulting, environmental
certification, etc.) increased, rising by 62 companies
compared with FY 2015.

Waste Management Best Way sales(Unit: ten thousands of yen)

Sales increased due to fresh orders and expansionof range of services provided to existing clients.
We will strive in FY 2017 to strengthen thefunctionality of The Sustainable Stage as a key
business.

Introduction of Digital Waste
Management System

Business
Ofﬁce

We have enhanced commerciality in terms of
product appeal, marketing capabilities, and client
satisfaction and are steadily increasing the numberof business premises where the service has been
introduced. In FY 2016, we received new orders forcompany-wide engagement from two companies.
(Details on p.17)■ Environmental certification

FSC® COC certification assessments increased,
especially in the cardboard industry. The AMITAGroup became Japan's first certification body for
ASC aquaculture certification. (Details on pp.17& 19)

Results for receipt/manufacture of 100% recycled materials
Volume of industrial waste received,
number of trading premises
Trading premises

Volume of cement raw material
manufactured (t)(including SlurMix®)■ Metal raw materials production volume (t)Specialty steel raw materials (Ni, etc.)

Metal raw materials (Cu)Total power generated

Waste

Although the number of trading premises declined,
the volume received increased. In FY 2017, ouraim is for further growth via group-wide efforts,
including drawing up effective plans for collecting
raw materials.

Total power production and amount ofliquid fertilizer used (kWh/t)

Manufacturing volume increased at the Kawasaki
and Kitakyushu plants. In FY 2016, new facilities
installation at the Kitakyushu plant, opening of anew partner plant, and development of new user
companies contributed to this increase. (Details on
pp.14 & 15)

Production volume of specialty steel raw materials(Ni, etc.) declined sharply due to circumstances at
key clients. We intend from now on to cultivate
new clients and engage in product developmentthat matches clients' needs.

Amount of liquid fertilizer used

Total power generated and the amount of liquid
fertilizer distributed both increased due mainly tothe company obtaining a permit for general waste
disposal business and full-fledged operation of
Minamisanriku BIO. (Details on p.16)

FY 2016 ﬁnancial and non-ﬁnancial highlights

6

Non-financial information
The AMITA Group categorizes its capitals
into the 6 types of capital advocated by the
IIRC* and strives to increase it.
*International Integrated Reporting Council

Manufacturing capital

Manufacturing capitalIntellectual capital

We use the term “AMITA Resource Cycle Platform” to refer to theresources manufacturing bases inside and outside Japan that handle
recycling, together with the network of collaborating companies. Weview this platform as manufacturing capital. Since the Himeji Resource
Recycling Plant opened in 1992, the AMITA Group has in stages
expanded manufacturing bases, increased recycling capacity, and expandedfacilities.

The AMITA Group has accumulated a great deal of environmentrelated knowledge and knowhow. This is applied in product and businessdevelopment.

AMITA Resource Cycle Platform, etc.

KIMURA DOBOKU Co., Ltd. joins AMITA Resource
Recycling Partners!

Intellectual capitalDue to its becoming an AMITA Resource Recycling Partners, recycling
has accelerated in the Western Kanto and Tokai regions. (Details on p.14)

AMITA’s unique expertise, technology,
brand strength, etc.

Kitakyushu Resource Recycling Plant installs new
recycling facilities!

Human capital

We aim to increase processed volume of powder waste via introduction ofrecycling facilities. (Details on p.15)

Ability of group employees to create value■ Minamisanriku BIO starts treating commercial food waste!

Social and relationship capital
Relationship with stakeholders created
via business activity and the impact of thisrelationship

Natural capital
Reduction of environmental impact via
business activity and conservation of thenatural environment, etc.

■ Blending: AMITA's unique recycling technology
Waste is inherently unstable in terms of quality and volume. Blending
is a recycling technology in which highly variegated waste is analyzed at
the elemental level, then adjusted and combined according to the client’s
product specifications. Ultimately it is shipped in a stable form as resources.
We have a database of all past waste analysis data (around 16,000 cases in
FY 2016). This information is used, for example, in the development of new
recycled products.
Since FY 2013, AMITA has been developing AMITA Resource Recycling
Partners, a network of companies that employs blending technology. At
present, partner plants have opened in three prefectures (Aichi, Niigata, andShizuoka). Compared with building new plants independently, the partner
system enables the company to develop resource manufacturing bases more
efficiently in terms of time and costs.

Obtained approval to treat general waste in June 2016. (Details on p.16)■ Establishing “Environment = AMITA” branding

However, an area needing improvement is that slight accidents, such as
damage to property at manufacturing plants, have increased in number
since FY 2015. We aim to provide safe, secure services via analysis of
the mid-to-long-term trend in accidents and by changing the working
environment and daily safety training.

AMITA operates the Daily AMITA Update website, Japan's largest
environmental information website. This helps build a solid corporate
brand so that people think of AMITA when they think of the environmentand recycling. It leads to service inquiries and orders via the internet.

Number of accidents at manufacturing plants including
slight damage to property, etc.
There were no major accidents in FY 2016.

We intend to strengthen existing business and develop new business toestablish a new corporate brand that links the concept of sustainability withAMITA in people's minds.
▶Number of users of group website (UV)

Financial capital
Financial resources, which are the source ofbusiness activity
The 6 types of capital are inter-related, impact
each other, and ultimately are given form as
financial capital.

Excludes partner plants and the Taiwan plant.
Minamisanriku BIO added from FY 2016

The Himeji plant failed to re-obtain a superior certification due toinadequacies in past administrative procedures. The company will do all it
can to improve the quality of management. (Details on p.17)

FY 2016 ﬁnancial and non-ﬁnancial highlights

7

Non-financial information
Human capitalSocial and relationship capital

Based on the idea that people are an asset, nota cost, we use team evaluation in assessment oftarget achievement and individual evaluation inassessment of ability (inventiveness, planning,
human resource development). In this system,
teams meet their mission targets while boosting
their individual abilities.

to promote their use. Also, via steps such as
having a Bring Your Child to Work Day we
deepened understanding of and support for thecompany's childcare system.

AMITA has established a leave system so that
employees can take part in social action, and has
established assigned books and training by grade
to improve employees' capabilities. Due to staff
churn, total average evaluation has remained flatover the past three years. However, evaluation ofcore employees (staff in their fourth to tenth yearwith the company) has improved year by year.

(See p.23 for details of staff evaluation, p.27 for detailsof our staff survey)

The staff survey we conduct every year showedthat degree of support for our mission andphilosophy increased to a historical high of 94%.

Employee human resources(work ability) evaluation average

In addition, in FY 2016, as part of work
environment development, we broadened therange of applicability for our paternity/maternity
leave and care leave schemes and held a briefing■ The AMITA Group employment situation/use of welfare and benefits system
The numbers cover Jan. 1 to Dec. 31. (The number of days taken off, childcare leave and leave taken tocare for relatives cover Jan. 11 to Jan. 10 the following year.)

The AMITA Group aims to increase social and relationship capital via business activities.

■ Recruiting Reform
Since FY 2014, the AMITA Group has focusedon the following two areas as part of reform of
hiring, which is the core of an organization.
(1) Construction of channels to students withstrong affinity(2) Establishment of hiring methods unique to
AMITA
In FY 2016, to deepen links to university
organizations engaged in environmental andsocial technology R&D in the Kansai region,
AMITA hosted three study meetings withresearch professors and students at Fudenkan
and the Himeji plant. In addition to contacting
people who would like to join the company
or are looking for an internship, AMITA iswidening possibilities of joint research in thelonger term.

Links with administrative
organizations, local governments
AMITA is striving to forge new partnerships
with central and local government. In April, in
Minamisanriku in Miyagi Prefecture, the company
hosted a symposium in a tie-up with the municipal
government and Ministry of the Environment (around
160 participants). Minamisanriku BIO, the town'sbiogas facility, is drawing attention as a forum forenvironmental education and a model of public-private
collaboration. In FY 2016, around 1,000 students,
company and government-related figures and local
people visited the facility. AMITA is also contributing
to horizontal business development in Kami, anothertown in Miyagi Prefecture, and to increasing the
precision of waste separation by local residents. (Fordetails about AMITA's efforts in Minamisanriku see
p.16 and p.21)

Stakeholder communication
leveraging our forum
Our 6 Japanese plants and the Fudenkan,
which contains the AMITA museum, receive
many visitors, including via corporate andregional events, shareholder gatherings, andstudy groups for students. The number ofvisitors and attendees from outside Japan has
also increased year by year, and the plants
and Fudenkan contribute to marketing
activity and hiring as places where people canexperience AMITA's knowledge.

Local elementary
school pupils visiting
Minamisanriku BIO

We have strengthened other connections including by
hosting joint press conferences with Kitakyushu City
about the opening of the Taiwan Resource Recycling
Plant.

■ Number of visitors in FY 2016
*1 Period measured changed from FY 2016 *2 Number of days leave including annual paid leave and other leave *3 System in which
employees who need to take leave to care for relatives and for childcare can make use of annual paid leave other employees do not take

Joint press conferencewith Kitakyushu CityFY 2016 ﬁnancial and non-ﬁnancial highlights

8Natural capital
All the AMITA Group's business is connectedwith growth of natural capital and relationshipcapital. 100% recycling contributes to preservationof the environment and reduction in the volume ofnatural resources mined, while support for efforts
in biodiversity and environmental certificationassessments and audits, including forestry andfisheries certification, helps promote sustainable useof natural capital. Business support services suchas the Digital Waste Management System andWaste Management Best Way lead to reductionsin inappropriate treatment such as illegal dumping.
Compliance with laws, regulations and standards isobserved. BIO System, our service for regional areas,
helps to revitalize communities and to create jobs.

■ Contribution to reducing volume of natural resources mined
100% recycling manufactures alternative resources from waste. We protect natural resources many times theamount of manufacturing volume by supplying alternative resources, which are higher quality than natural
resources.

■ Contribution to biodiversity conservation
To contribute to biodiversity conservation, AMITA offers
technical training on symbiotic farming. In Kaga City,
Ishikawa Prefecture, AMITA proposes standards for selecting
agrochemicals (basing selection on agrochemicals' impact
on the environment for living things nearby, and cultivating
crops using very safe agrochemicals). AMITA provides
agricultural training to substantially reduce the environmental
impact of agriculture. Since this initiative began in 2014, thenumber of farmers working this way has increased eight-fold,while the area under cultivation has expanded 14 times.

Farming in Kaga City

■ Efforts aimed at reducing CO2
In FY 2016, AMITA started to measure theCO 2 group plants and offices and emissions
generated by their own recycling, includingtransportation of raw materials and products (upuntil FY 2015 the company had only measured
CO2 processes at its own plants). Jan-Dec 2016
emissions are due to be disclosed on AMITAHOLDINGS' website by the end of 1H 2017.
The around 112t-CO2 produced in FY 2016 bybiogas facility Minamisanriku BIO will be offset
via the use of credits issued by Minamisanriku's
forestry management organization andother groups for which AMITA conductedcertification assessments. This should further
enhance our value proposition.
From FY 2017, in addition to existing efforts
to reduce power consumption in offices, thefollowing were implemented:-Distribution efficiency gains through provisionof recycling services-Reduction in frequency of usage of vehicles via
strengthening of non-face-to-face marketing andpromotion of the use of public transportation.

Other energy-saving activities in a bid to further
reduce CO2 emissions.

■ Minamisanriku BIO CO2 (FY 2016)

Due to differences in measurement methods, ﬁgures canchange when emissions are offset.

● What is carbon offset?
Striving as far as possible to reduce emissions ofgreenhouse gases such as CO 2 that are emitted
in the course of daily life and economic activity,
carbon offset refers to activities aimed at absorbing

unavoidable emissions directly and indirectly inother locations via reduction efforts based onplanting forests, protecting forests, and clean energy
business (purchase of emissions rights).

FY 2016 ﬁnancial and non-ﬁnancial highlights

9Financials -These are the AMITA Group's financial results for FY 2016 (Jan.1,2016 - Dec.31,2016)■ FY 2016 results(Unit: millions of yen)

Although the recycling business in Japan was firm, sales in
FY 2016 missed the initial forecast by ¥138mn due mainly
to lower-than-expected treatment volume at the Taiwan
Resource Recycling Plant. Operating and ordinary income
were both broadly in line with expectations due mainly to
lower forex losses and high-margin recycling orders. The■ Consolidated balance sheet

company booked a net loss of 26 million yen due mainly
to lower-than-expected compensation from TEPCO fordamages caused by the Fukushima Daiichi nuclear power
plant accident (booked as extraordinary gains). (YoY: sales+¥172mn, operating income +¥69mn, ordinary income+¥63mn, net income +¥73mn)(Unit: thousands of yen)

■ Consolidated income statement■ Dividends(Unit: yen)

Our basic policy with respect to dividends is to return profits commensuratewith results to our shareholders while striving to achieve financial soundness andstrengthen our management base. Accordingly, our aim is to distribute around
30% of consolidated net income at the end of the fiscal year. As regards dividend
payments for FY 2016, unfortunately, as forecast in February 2016, due to sluggish
earnings over the past few years our priority is to improve our financial soundness
and we will therefore not pay a dividend. For the same reason, we also expect to
pay no dividend in FY 2017.

(Unit: thousands of yen)

■ Consolidated cash flow statement(Unit: thousands of yen)

FY 2016 ﬁnancial and non-ﬁnancial highlights

10Plans
We aim to enhance group profitability
and achieve mid-to-long-term growthThree-year mid-term plan
■ Three-year mid-term plan unveiled in Feb 2016

(Unit: millions of yen)

■ Three-year mid-term plan renewed in Feb 2017

(Unit: millions of yen)

AMITA HOLDINGS Co., Ltd.
CFOTaro Shimizu
As we approach our 40-year milestone,
looking at current social and environmental
issues inside and outside Japan, I feel society's
need for our business is going to increase.
As CFO of a company forging a flourishing
future that meets these needs, I believe my
mission is to boost our own sustainability
from a financial perspective and strengthen
our organizational foundation.
We missed our sales and net income
forecasts for FY 2016. However, operating
and ordinary income were broadly in linewith forecast and improved sharply year on
year. This was due mainly to marketing andoperational reform, implemented as partof extensive business format reforms thatthe group as a whole has grappled with forsome years. I believe this points to gradually
restoring profitability for our business.
Especially as regards domestic recycling,where urgent projects are concerned wehave established a structure that accelerates
the work flow after receiving a request.
This includes analysis of waste materials,
consideration and selection of recycling
methods, coordination of downstream user

companies, and contact administration. Thesetasks can be completed in 1/3 to 1/2 thetime it took before, enabling us to take onhigh-margin urgent projects. Margins have
improved. The sales to operating income
ratio was 1.6% (versus 0.2% last year), while
the sales to ordinary income ratio was 1.1%
(versus minus 0.2% last year). However, as
margins are still low relative to the domestic
average, we will continue to work to enhancebusiness profitability in partnership with alldivisions including marketing, consulting,manufacturing, and development.
Partly due to lower-than-expectedcompensation from Tokyo Electric Power,
we booked a net loss of 26 million yen. In
view of FY 2016 results and forecasts ofchange in market conditions, we have drawn
up a three-year medium-term plan covering
FY 2017-19 as shown. In 2017 (year ending
December 2017), reaching our forecasts
is our top priority. We plan to implement
financial measures conscious of longer-term
growth and organizational resilience (tough,stable). We therefore continue to ask you foryour support and encouragement.

Although we booked net losses in FY 2016, we met our operating and ordinary incometargets and were able to realize the benefits of our business format reforms. However, thesocial and economic environment has become increasingly uncertain and unstable. Factors
include falling crude oil prices and major policy change with Donald Trump taking over as
US president.
With external circumstances marked by major uncertainties, we have revised our three-yearplan to a more concrete plan aimed at strategic and stable growth while anticipating businessrisk. We aim to be a company that continues to marketize social needs by steadily making
mid-to-long-term efforts focused on growth and profitability. (For details of AMITA's midto-long-term strategy see pp.12 & 13)

FY 2016 ﬁnancial and non-ﬁnancial highlights

11Mid-to-long-term business strategy

Long-term strategy -Toward establishment of Social Systems Design Business-

Mid-to-long-term business scenario aimed atrealizing a “sustainable society”
Global financial markets in 2016 were
unstable due to Brexit and the US presidential
election. AMITA sees its mission as realizing
a sustainable society by bringing about socialchange in a highly turbulent age.

measures with corporate environmental strategy.
By fusing Environmental Strategy Design andRegional Systems Design, AMITA is striving
to become a “second public body” that improvessociety as whole.

AMITA aims to establish a coexisting economy
in place of a monetary economy by about 2018
through setting up small, dispersed independent
cyclical systems that do not rely on external
economies in a number of regions and, by 2030,
expanding to regions nationwide and forming
them all into a network.

To address this challenge, we will aim to boost
profitability and cultivate new business bystrengthening existing business, developing new
business and strengthening business outside
Japan. That being the case, we will need tostrengthen our organizational foundation andenhance our value proposition. Accordingly, we
will come to grips with establishing structuresthat create value both within and outside thecompany and that nurture human resources.

What is important here is linking local
government and residents' environmental

Mid-to-long-term business strategy

12Medium-term strategy 2016-2018

Since 2014, the AMITA Group has been working on business reform aimed at improving
profitability. Since 2016, the company has been engaged in structural improvement andrestructuring on an all-company basis aimed at creating new business to strengthen its
earnings base. Here we outline our medium-term strategy and efforts aimed at boosting
growth potential and profitability.

▶ Nurture creative, constructive staff who can realize their ideas, and focus on appointing

Key points of
medium-term
strategy

younger staff.

▶ Create a better business climate by broadening internal and external afﬁnity.
▶ Focus on introducing IT technology and systems that enable the company to develop

new business and achieve business efﬁciency.

Mid-to-long-term business strategy

13Growth in business in existing markets and with existing clients

Highlights of key initiatives in FY 2016
In FY 2016, we focused on the 3 fundamental themes in order to reform ourbusiness and create new businessHighlights of main initiatives in FY 2016

Results

100% recycling raw materials procurement support
to boost input volume

・Improved business model and reduced COGS
・Addition of AMITA Terrestrial Resource Manufacturing Partner
・Focused on securing major spot contracts

Expanded provision of environmental certification surveys◎

Environmental

・Engaged in PR and marketing activities to boost awareness・Strengthened certiﬁcation team and increased number of team members

Expanded provision of Digital Waste Management System○

Strategy Design
Business growthin existing markets
and with existingclients◎

・Introduced new facilities at Kitakyushu Resource Recycling Plant

・Strengthened product appeal, marketing capabilities, client

satisfaction

・Creating values centered around Minamisanriku BIO
・Obtained permit for general waste treatment business at◎

Regional
Systems Design

Created recycling model in Minamisanriku, Miyagi Prefecture

KIMURA DOBOKU Co., Ltd. joined AMITA Resource
Recycling Partners!

AMITA Resource Cycle Platform further widened via partner development in
Shizuoka Prefecture
In August 2016, KIMURA DOBOKU Co., Ltd.
Kuchinofuto Resource Recycling Plant joined
AMITA Resource Recycling Partners. It was thethird partner plant after AICHI KAIUN, Co.,
Ltd. and FUJI UNYU KAISHA, LTD.
The new partner plant is located in Numazu City,
Shizuoka Prefecture, and is focused on markets inthe West Kanto and Tokai areas. It manufactures
cement raw materials from eleven kinds of waste it
receives.

With this plant, AMITA Resource Cycle Platform
has grown to 10 locations in Japan and elsewhere.
As well as promoting resource recycling in eachplant's area, AMITA is striving to expand business
utilizing strengths arising from nationwide
expansion, namely marine transportation and risk
reduction when disasters strike.

Results and forecasts for manufacturing
volumes at partner plants

Minamisanriku BIO△

Developed new services for companies

・Developed and provided The Sustainable Stage, an integrated

service to enhance sustainability

Environmental
Strategy Design

・Developed video training service aimed at nurturing humanresources○

Launched ASC aquaculture certification assessments

New business,
new market
development

・Obtained Japan's ﬁrst accreditation to conduct ASC aquaculture

certiﬁcation assessment for bivalve cultivation

KIMURA DOBOKU Co., Ltd. Kuchinofuto Resource Recycling PLant○

Regional
Systems Design

・Developed BIO System
・Ran resources recycling trial in Minamisanriku, Miyagi Prefecture
・Won order for concept drafting of biomass industry community in

Kami, Miyagi Prefecture

AMITA Resource Recycling Partners

TaiwanBusiness
Outside Japan

Malaysia△

・Opened Taiwan Resource Recycling Plant, started full-ﬂedged operation
・Conducted staff training, facilities maintenance, marketing activities, etc.
・Set up joint venture with local company; started building plant

Palau

Benefits of partner development

・Concluded partnership agreement with Koror State aimed atbusiness engagement▶ Expansion of business area, use of partner network▶ Cost reductions including cost of building new plants and・Visualized internal environmental burden (broadened range of

calculation of CO2)

・Established crisis management tools to cope with corporate risk
・Ran business model contests and various forms of staff training
・Consolidated labor environment by expanding range of welfare○

Enhancing value proposition,
strengthening organization

Collaborating partners that provide AMITA's 100% recycling technology.
AMITA handles marketing, collection & transportation, and delivery, while
partner companies run manufacturing plants, and engage in manufacturing.

purchasing facilities▶ Contribute to reducing clients' transportation costs(For details of the AMITA Resource Cycle Platform see p.4)

and beneﬁts system

Highlights of key initiatives in FY 2016: Growth in business in existing markets and with existing clients

14

Kitakyushu Resource Recycling Plant installs new powdersilo recycling facility!
Aiming for growth in volume received in Kitakyushu area, where business is firm
In July 2016, we installed a new recycling facility known as a powdersilo at the Kitakyushu Resource Recycling Plant in a bid to increase
the volume of waste accepted. This made it possible to safely accept
various types of powder waste.

Recycling service production improvement and switch tohigh added value
Striving to boost profitability via radical revision of business model
Due to the decline in the amount of waste generated
in Japan, production at all of AMITA's manufacturing
plants has been flat year on year over the past few years.
Production at the Himeji Resource Recycling Plant, themother plant, has been declining. To improve profitability,
in FY 2016, we strove for higher added value, and reduced
COGS via production reforms.

Kitakyushu plant, even among the 6 own plants we operate in Japan,
has maintained especially firm manufacturing volumes. In the future,
based on clients' needs and marketability, we intend to consider
beefing up the facilities in stages, so as to increase productivity.

The powder silo

As a result, we now have a system that enables theworkflow in relation to highly urgent recycling requests— consideration, contract, acceptance, shipment — to be
carried out in 1/2 to 1/3 the time it used to take, allowing
us to accept high-margin urgent contracts.

Production volume at all own plants and the
Himeji Resource Recycling Plant (t)All manufacturing plants*

Himeji Plant* Excluding Minamisanriku BIO, Kyotango plant

Outcome of introduction of powder silo
●Enabled a further 4,500t of waste a year to be recycled. Expect growth in volume accepted.
Via acceptance of powder waste, it has become possible to recycle an additional 4,500t
of waste per year. Handling powder waste, which easily disperses in the air, requires care.
Clients have a great need for recycling companies that handle such waste appropriately, andwe expect to win new clients.
●Not just improvement in the working environment: improved productivity and lower labor costs
Working conditions were substantially improved in terms of safety and environment
thanks to the decline in the amount of dust. The outcomes include boosted productivity
and improved safety while working, and reduced overtime work.

▶ Business model of
Kitakyushu Resource Recycling Plant
production volume (t)FY 2016, at all own plants:
Cement raw materials manufacturing
volume shares

own manufacturing plants

AMITA is responsible for all operation and intermediate processing.
AMITA's earnings are calculated by subtracting manufacturing costs,
collection & transportation costs, and ﬁnal disposal costs from treatment fees
received from companies that produce waste.

Excluding Minamisanriku BIO,
Kyotango plant

Highlights of key initiatives in FY 2016: Growth in business in existing markets and with existing clients

15

Highlights of key initiatives in FY 2016

Growth in business in existing markets and with existing clients
Minamisanriku BIO became cornerstone of regional resource
cycle. Obtained general waste disposal business permit!

Minamisanriku BIO volume received andtotal amount of power generated

Volume received (t)Total amount of
power generated (kWh)With the support of local residents, facilities are becoming pivotal to the town's resource cycle
Minamisanriku BIO, the biogas facility in
Minamisanriku, a town in Miyagi Prefecture, reached
the end of its first year in operation in October
2016. Since it opened, the amount of waste accepted
has increased, in FY 2016 reaching around 2,400t.
Production totaled around 14,500kWh of electricity
from biogas and roughly 2,700t of liquid fertilizer,

Main developments at
Minamisanriku in FY 2016

and the plant is beginning to play a key role in the
town's resources cycle. In FY 2016, having focused onstable operation from the start, we also concentrated
on creating added value in regional areas, and on thehorizontal development and boosted profitability of
the Minamisanriku model.

Creating added value for regional areas

Boosting proﬁtability and horizontal development●Spraying of liquid fertilizer●Creating value via environmental●Start of acceptance of commercial food waste

We sell liquid fertilizer manufactured at
Minamisanriku BIO to local farmers. To
local residents who help us by separating
waste, we distribute liquid fertilizer free
for use in their gardens. As a result of
running extensive information campaigns
about using liquid fertilizer in partnershipwith the town hall, in FY 2016, around2,000t of liquid fertilizer was used. People
are happy that food waste collected after
eating is being turned into high-quality
fertilizer. What was previously burned isnow being put to good use. This initiative
has also contributed to improving waste
separation practices.

Minamisanriku BIO has drawn attention locallyand more widely as a model of cooperation
between the government and the private sector,
and as a place of environmental education.
In the first year of operation, over a thousandpeople visited the plant, including children fromthe local elementary school as part of a social
studies course. There were also visits from privatecompanies and government organizations. Such
visits add value and increase environmental
awareness among local residents, who express
pride that the town has such facilities and cometo see that waste offers endless possibilities.

Liquid fertilizer being sprayed on farmland

education and raising awarenessInside the plant, signs explain how things are
separated in each food waste collection area,
making local visitors more conscious of thevalue of separation. Biogas facilities in which
ordinary local residents participate are said tohave contamination rates of around 5%. The rate
at Minamisanriku BIO is 1-2%, greatly reducing
the cost of pre-processing in order to remove
unwanted items.

In June, AMITA obtained a permit to engage in the general
disposal of food waste in Minamisanriku. Having obtained
this permit, it became possible to collect food waste fromthe town's hotels and restaurants and the plan is to gather
an annual 365t of resources. This is scheduled to generate
71,596kWh/year, and we expect annual cost savings ofaround a million yen.

●Transmission of the Minamisanriku model aimed

at horizontal development

In April, in partnership with Minamisanriku, the Ministryof the Environment, and other bodies, we hosted theMinamisanriku Symposium (around 160 attendees). In
September, we opened a new Regional Systems Design
Business website and beefed up communications aimed at local
government. We also gave lectures at seminars including atuniversity institutions and took a proactive stance toward media
reporting, publicizing our efforts to promote horizontal businessdevelopment. A concrete result was the receipt of an order from
Kami, Miyagi Prefecture to support the drawing up of a concept
for making the town a biomass industry community.
Regional Systems Design Business website: http://www.aise.jp/(Please refer to p. 21 for details about horizontal development regions andKami, Miyagi Prefecture)

Highlights of key initiatives in FY 2016: Growth in business in existing markets and with existing clients

16

Increase in number of surveys for FSC® project certification
Japan share 67%! Certification of buildings, products using certified timber
In 2016, AMI TA conducted two ne w FSC® projectcertifications (hereafter PJ certification), bringing the total
number of assessments it has conducted to date to 10. PJ
certification is a system of certification of projects (buildings,
products, etc.) using FSC-certified timber. It is part of
FSC® Forestry Certification, which certifies forests that areappropriately managed. The system has spread around the world
as a way to address the challenge of forest deterioration anddecline. It is expected to be applied to a wide range of buildings.

AMITA's share of PJ certificationassessments in Japan

Among the 98 FSC® projectcertifications worldwide,
15 were in Japan. AMITA
conducted 10 of theseassessments. (As of end
Dec 2016)

Publicity to raise awareness of environmental certiﬁcation
The FSC® certification system is well known in Europe
and elsewhere, but is little known in Japan. To raiseawareness in Japan, since 2014 AMITA has been beefing
up website publicity. Since FY 2016, efforts have also been
made to encourage the media to publicize the assessments.
The PJ certification assessment at Hamamatsu City Chubu
Junior High School Area Combined Elementary andJunior High School in Shizuoka Prefecture in September
was covered by four media outlets, including a television
broadcaster. The assessment was widely reported.

Expectations for environmental certiﬁcation
In FY 2016, we received a very large number of inquiries
about FSC® forest certification, ASC aquaculture
certification, and MSC fisheries certification from the media,
other companies and other bodies. FSC® certification gained
more attention. The number of inquiries, including requests
for estimates and requests for assessments, roughly doubled
year on year. More companies in the cardboard industry havegained FSC® COC certification. The number of companies
that would like to obtain it with an eye on the Olympic andParalympic Games has also increased.

Working hard to get clients to install
Digital Waste Management System at all bases!
Thanks to beefed-up products, two companies placed orders for introduction at all
their bases
Digital Waste Management System, a cloudservice for waste disposal, is a business basedon an ID paid for monthly (plus joining fee
and training costs, etc.). AMITA has worked
hard to get it introduced in all the bases ofcompanies that have facilities nationwide rather
than in individual business bases. Introduction
in all bases provides major benefits for clientsas information management at all facilities isof uniform quality. Universal introduction also
makes it easy for head office to issue instructions
and administer the system.

In FY 2016, thanks to beefed-up products,
marketing capabilities, and client satisfaction,
AMITA won orders for introduction of the system
at all bases of two new companies (a total of 359
business bases). At end-2016, 295 companies had
introduced the system at a total of 1,474 businessbases. Since FY 2016, as a key business of The
Sustainable Stage, we have been marketing thesystem in combination with other products such as
drawing up proposals for environmental strategies.

(Companies in the same group counted as single
companies. Please refer to p.6 for details about
introduction track record)▶Efforts to strengthen Digital Waste Management System●●

Product improvement
in line with clients'
needs
Added value gains
via comprehensive
proposals in line withenvironmental strategy

●

●

●

●

There were 122 environmental
certification inquiries in FY 2016●●

Product marketing seminars(eight)Publicity campaigns targeted
at different industries
In-service training to improveskill level of staff responsible
for marketing
Marketing tool upgrades, etc.

Surveys of target companies

Strengthening of operators (regular study meetings)● Report on re-certiﬁcation of Himeji Resource Recycling Plant
In August 2016, the Himeji Resource Recycling Plant failed tore-obtain certification as a superior industrial waste processing
plant* due to inadequacies in past administrative procedures(delays in disclosing information via the internet). We did
not lose any clients as a result, but it was a major blow for
the AMITA Group. The group will work hard on reforming
management structure in order to re-obtain certification.

*System in which prefectures and designatedcities conduct assessments and issue
certification to superior industrial waste
disposal companies that clear stricter
standards than the ordinary permit
standards. If certiﬁed, the industrial waste
disposal business permit is usually valid
for longer than an ordinary permit (sevenyears instead of ﬁve).

Highlights of key initiatives in FY 2016: Growth in business in existing markets and with existing clients17

Highlights of main initiatives in FY 2016

New business, market development
The Sustainable Stage

Examples of The Sustainable Stage marketing strategy and implementation strategy

Service for companies that meets their needs for sustainability
Many companies are entering a period of change. They
have long had to cope with unstable economies andfinancial markets inside and outside Japan. But thesedays environmental constraints, including climatechange, resource depletion, and social demands, aregetting tighter every year, and longer-term strategies that
contribute to business sustainability are essential. The

Sustainable Stage is a comprehensive service AMITA has
cultivated for 40 years—born from services, technology,
expertise, and networks— that boosts corporate
sustainability. Since its February release, AMITA has
conducted many consultations, mainly with major
companies. In FY 2016, AMITA won orders from six
companies for vision creation and the drafting of strategy.

Proposals to corporate headquarters, management planning department, and divisions under the
direct control of executives■ Initiatives for horizontal development on a unit company basis from business bases with which wealready work
■ Business matching via banks■ Marketing via industry organizations, industry media, etc.
■

Efforts to strengthen ability to provide solutions
We engage in the following efforts to boost the service quality of The Sustainable Stage (ability
to resolve issues, propose solutions, etc.) and differentiate ourselves from competitors.
Gather expertise required

Three features of The Sustainable Stage
Feature 1■

Draft and propose strategies taking sustainable development goals (SDGs) into account that
result in social improvements in tandem with corporate development.
We extract constraints and opportunities from Goal 17 of the SDGs and insert them into the strategy(details of the SDGs on the right). As explaining CSR policy to stakeholders will become easier, we
expect corporate needs to increase.

Feature 2

In-service training, study meetings to boost the expertise of sales staff and consultants
Collect and share client information and environmental research data from Japan and abroad via
IT systems■ Survey and analyze market needs using the company's own environmental information website■

Support reliable strategy implementation using AMITA's expertise, technology,
and network.

Proactive use of external resources■

Form an organization from groups of inﬂuential people with knowledge pertaining to SDGs

Responding to the SDGs is indispensable to sustained social and corporate growth

As AMITA can handle everything from drafting environmental strategy to implementation, it can accept
orders for every aspect of a client company's environmental business.
● Largest collection of environmental solutions in Japan▶ Environmental certiﬁcation starting with waste

management; wide range of services up to
boosting biodiversity▶ Track record of supporting over 4,000 companies▶ Doing business with over 300 listed companies

Feature 3● Japan's largest resource cycle platform▶ Own recycling plants in six locations nationwide▶ Partner plants in 3 locations▶ Recycling network comprising over 300 business bases

Quantitative and qualitative evaluation of change in business capital due toenvironmental actions.
Forecasts based on the measures and theresults of efforts are evaluated quantitatively
and qualitatively via change in the 6 capitals
advocated by the IIRC*. While the effects
of environmental measures are difficult toevaluate, it is possible to improve both financial
and non-financial capital. We anticipate
requests for long-term consulting contracts.

The Sustainable Development Goals (SDGs) wereadopted by the United Nations General Assemblyin September 2015. The SDGs are common
global goals of the 2030 Agenda for Sustainable
Development. They clarify global priorities and how
the world should develop leading up to 2030. The
Agenda calls for countries to take ownership andestablish national frameworks for the achievementof the 17 goals (please refer to the figure above).
Indispensable to SDGs implementation iscommitment not only by international institutions
and state governments, but by all stakeholders

including companies, financial institutions, andconsumers/citizens. Companies in particular are
under pressure to respond quickly as their stance on
the SDGs will have a big impact on their businessactivities, affecting global ratings and customer
purchasing behavior.
The Sustainable Stage incorporates these SDGs invision creation and strategy development at the heartof the service. This makes corporate CSR policy
clearer, supports planned implementation, andenhances overall corporate sustainability.

*International Integrated Reporting Council

Highlights of key initiatives in FY 2016: New business, market development

18

First in Japan! The AMITA Group accredited as a certification body for
ASC aquaculture certification

Drawing up standards for “Certificate to an enterpriseweaving a thousand years into the future”

Supports sustainability of aquaculture and higher corporate and brand value

Support for social business development in tie-up with the city of Kyoto

AMITA was Japan's first accredited certifier for the ASC,
which manages global standards for responsible aquaculture.
In March 2016, AMITA issued Japan's first ASC
aquaculture certificate for the oyster farms of the Shizugawa
Branch of Miyagi Prefecture Fisheries Cooperative in the
Togura area.

Leveraging a solid track record of environmental
certification, AMITA provides design support
for various social certification and approvalsystems in partnership with companies, local
governments, and other bodies.

challenges based on a cornerstone of CSR
in Japan: benefits in four “directions.” These
include the three traditional directions ofseller, buyer, and local community, plus one
new one: the future.

For example, in connection with a social
business certification system called“Certificate to an enterprise weaving a
thousand years into the future,” which was
being promoted by the city of Kyoto in
2015-16, AMITA supported the designof an assessment and participated in theassessment itself. This certification system
focuses on whether value will be offeredsustainably rather than just temporarily. It
also examines if a contribution is being madeto creating a good future by resolving social

Demand for third-party certification of social
business services is growing year by year.
Via certification, AMITA will continue tosupport the promotion of business that truly
contributes to society.

The ASC certificate is awarded when various matters havebeen assessed. Both the natural and social environments are
considered. The assessment looks at whether sustainable
methods are used, whether efforts are made to reduce theenvironmental burden of aquaculture, and whether the farm isbeing run considering the labor environment and local society.

Seriola and cobia added to ASC aquaculture standards
In November 2016, seriola and cobia were added to the scope of ASC aquaculture certification.
AMITA, aiming to be the first certification body to start assessments for these species inJapan, in 2016 undertook auditor training. The first certification assessments in Japan arescheduled for mid-2017 in West Japan.
Japan accounts for around 90% of seriola farming worldwide. In Japan, about half the
production of seriola (specifically buri, a variety of amberjack) is via aquaculture. Seriola is also
the second most heavily exported fish from Japan after mackerel, with exports in 2015 totaling
13.8 billion yen. Many organizations and companies in Japan and elsewhere have sustainableprocurement policies, making obtaining environmental certification increasingly vital.

ASC certiﬁcation logo

Expert comment Satoshi Maekawa, Marine Products Group, Nature Conservation Division, The World Wide Fund for Nature Japan (WWF Japan)
Impact of ASC certification on corporate
competitivenessWith the Japanese population trending down, andseafood consumption declining further, many Japanesefirms in the marine resources business are seeking
export paths. Japan's aquaculture techniques havebeen described as among the best in the world, but
recently technological progress in other countries has
been striking, and taste/quality alone are no longer
sufficient to survive the competition. The global market
is very concerned about the environment. With people
in Europe seeking information from Japanese buyers
about their ASC status, the front line of business itself
is changing. When Japanese laws and other regulations

concerning the marine products industry are comparedwith FAO and WHO guidelines, discrepancies areevident. Looking ahead, conforming to ASC and otherglobal benchmarks of environmental certification, andproviding evidence of doing so, can be expected to serve
as a means to strengthen corporate competitiveness.

Future development of ASC certification
Following seriola and cobia in 2016, the drafting ofstandards for tuna and red seabream is also being
considered. With both species being farmed in Japan,
efforts will be needed to have information from the frontline of Japanese aquaculture reflected as soon as theformulation of standards begins.

Developing an HR education and training program via
video production

A completely new kind of training that asks: What is work? What is enterprise value?
Together with external partners, AMITA
is developing an original human resources
education and training program in which
employees question their companies'
enterprise values and try to present them in avideo format.
In place of enterprise value statements that
rely on major external advertising agencies,
the aim is PR that generates a strong affinity
among stakeholders via the medium of
employee commitment and loyalty.

This service will boost companies' humanand intellectual capital. It is currently underdevelopment, with full release planned for 2017.

In-service training program

Highlights of key initiatives in FY 2016: New business, market development

19

Highlights of main initiatives in FY 2016

New business, market development
Taiwan Resource Recycling Plant fully operational,
but targets missed

Construction of Malaysia Resource Recycling Plant(provisional name)

The Taiwan Resource Recycling Plant, which opened
in March 2016, is engaged in 100% recycling of waste
generated by solar cell production in Taiwan.

regular maintenance is being planned, (3) operating
manuals are being drawn up and safety measures
tightened up.

Production and shipment volume fell short of initialexpectations due mainly to an earthquake in February,
delays in administrative procedures, and shipping
adjustments and facility maintenance in Q4. Annual
sales failed to reach the initial forecast.

In order to achieve a full-fledged earnings contribution
in FY 2017, in January 2016/2017 AMITA
dispatched an experienced member of staff to handle
project management locally. In addition, efforts arebeing made to achieve stable operation and greater
marketing capabilities. A basic assessment aimed
at further development of services in Taiwan is also
being conducted.

The AMITA Group is building the Malaysia Resource Recycling
Plant (provisional name), and planning to offer recycling services
from FY 2017 in Malaysia, a rapidly developing country. This willbe the first example outside Japan of AMITA’s cement recycling
technology, one of the many industrial-waste recycling technologies
that AMITA has amassed in the company’s first 40 years.

Hit by delayed start of shipments and technical issues

The following steps are being taken: (1)manufacturing staff are undergoing training, (2)

AMITA’s first cement recycling business outside Japan!

Under construction (as of Feb 2017)

Collaboration with the BERJAYA GroupAMITA set up a joint venture with BERJAYAGroup, a major local conglomerate, in Malaysia.
AMITA's stake and share of the profits is 40%.

▶Joint venture structure

Company names abbreviatedBeneﬁts of collaboration with local companies● Lower investment risk
● Credibility● Smooth administrative procedures● Access to potential client list, etc.

Marketability of recycling business in Malaysia

Taiwanese solar cell market
In October 2016, the Taiwanese
authorities announced plans to scrap
nuclear power and boost use of renewableenergy in Taiwan from 4% at present toat least 20% by 2025. Production volume
of solar cells in Taiwan is expected toincrease, and demand for our recycling
services in Taiwanese manufacturing
plants is expected to grow.

Malaysia’s targets by 2020 include recycling 22% of
the nation’s waste and recycling scheduled waste.
Much recyclable waste is currently incinerated
or disposed of in landfill, and Malaysia is underpressure to promote resource recycling.
Contracts between a company that monopolized
the market and the government expired in 2015,

and the recycling market is expected to pick up.
Malaysia continues to grow strongly among themembers of ASEAN. Many foreign companies
have moved in, including Japanese firms. AMITA
has received many inquiries from Malaysia about
advanced recycling technology and compliance.

Outlook for business development in Malaysia
This initiative represents an opportunity to learn
about business, build a network, and boost the
AMITA profile in Malaysia. Future possibilities

are also being considered, including wide-ranging
business development via individual investment.

Highlights of key initiatives in FY 2016: New business, market development

20

A fresh challenge in Minamisanriku, Miyagi Prefecture
Proof-of-concept recycling station as a step to region-wide resource recycling
The Minamisanriku BIO biogas facility turns
food waste generated by the town's households
and businesses into resources. Other wastethat cannot be turned into resources (around
60% or more of burnable waste) is currently
incinerated or buried in landfill by neighboring
local governments. Incinerators will age andlandfill capacities will shrink. AMITA believesarrangements will become necessary whereby all
waste generated in regional areas is recycled.
Accordingly, in Nov-Dec 2016, proof-of-concept
trials aimed at 100% recycling of segregated waste
were conducted using AMITA's technology

and network. This included the use of Mottainai
Station (provisional name), in which waste is
carefully separated.

Drafting of biomass industry community concept
in Kami, Miyagi Prefecture
Applying the BIO system devised in Minamisanriku in other regions
The BIO system service for local governments boosts regionalsustainability via resource recycling, and moves to introduce thissystem have accelerated in Kami, Miyagi Prefecture. In 2016, Kami
was designated a biomass industry community. The aim is to create atown that conserves the environment, resists disaster, and is based on
biomass usage. AMITA plans to contribute to this vision starting with
contracted support.

Waste sorting conducted with local residents
on a trial basis▶Flow of total regional resource cycling

Highlights of key initiatives in FY 2016: New business, market development

21

Please refer to the UN website for details on the
UN Global Compact.
http://www.unglobalcompact.org/

UN Global Compact progress report

The UN Global Compact (UNGC) is a United Nations initiative established in 2000 after a proposal by then UN SecretaryGeneral Kofi Annan. In June 2002, being in agreement with the 10 UNGC principles on human rights, labor, environment andanti-corruption, the AMITA Group became the fourth Japanese organization to join the initiative. AMITA also put efforts into
establishing a Japanese local network, GC-JN, with other Japanese companies (Dec 2003). The AMITA Group is reflecting
UNGC principles in its business operations and provides stakeholders with information about its actions via Communication on
Progress (COPs) reports submitted to UNGC headquarters.

Since its founding in 1977, the AMITA Groupʼs mission has been to realize a sustainable society bysolving social problems via business. This mission aligns perfectly with the principles of the UNGC
and the SDGs, and we are proud to be one of the few companies that can promote UNGC ideas in ourbusiness. We intend to continue to contribute to boosting the sustainability of society as a whole byhelping to resolve challenges confronting client companies and local governments.
AMITA HOLDINGS Chairman Eisuke Kumano

COPs（Communication on Progress）
The 10 Principles of the UN Global Compact

Human rights① Support and respect the protection ofinternationally proclaimed human rights

Details and aims of actions in FY 2016○

Covered full cost (100%) of 20 such applications received.

■Preserving the human dignity of disaster victims
Propose ways to create disaster-resistant regions (designs).
Support learning from the Great East Japan Earthquake and efforts to make use of theknowledge gained on a future occasion.

○●

Dispatched volunteers to the area hit by the Kumamoto earthquake. Donated to organizations providing local support.

●

Ran a new business idea contest on the theme of disaster prevention and reduction.

Labor② Make sure not to be complicit in humanrights abuses③ Uphold the freedom of association and theeffective recognition of the right to collective
bargaining■Run information campaign about social problems including human rights■Labor negotiations① Provide employees and management with opportunities to discuss the working
environment together.
② Create an environment that enables employees to propose suggestions for improving thework environment.

◯

and compulsory labor⑤ Support the effective abolition of child labor⑥ Support the elimination of discriminationin respect of employment and occupation in
respect of employment and occupation

hours in order to care for children, or sick or elderly relatives.
② Diversify workstyles.
③ Study the possibility of rehiring former employees after retirement.

■Prohibit and prevent discriminatory practices with regards to the work

environment of employees at plants outside Japan.

◎

environmental challenges

Anticorruption⑩ Work against corruption in all its forms,

including extortion and bribery

̶employees who need to take care of their children or relatives can make use of this otherwise wasted paid leave to taketime off or work shorter hours.
② Six people (ﬁve in FY 2015) used the labor system including working shorter hours.
③ Set up system for rehiring retired employees, and rehired two.

Four locally hired staff at a plant outside Japan (Taiwan) were made regular employees.
Prepared local language versions of human resources stipulations and related documentation.
● Ran training programs in Japan for employees working at manufacturing bases outside Japan.
●◎

Promoted resource recycling in the region and stable operation of biogas business in Kyotango City, Kyoto Prefecture.
Further promoted a regional resources recycling model and stable operation of biogas business in Minamisanriku, Miyagi
Prefecture (obtained permit for general waste disposal).
● Supported accreditation of biomass industry community concept in Kami, Miyagi Prefecture.
● Supported spread and establishment of eco-farming aiming to boost biodiversity in Kaga City, Ishikawa Prefecture.
● Conducted commercialization survey and its coordination outside Japan (Palau).
● In an area affected by the Great East Japan Earthquake (Minamisanriku), hosted symposium to spread understanding leading torealization of a sustainable society, and conducted eco-tours of Minamisanriku as a model to achieve this goal. Around 160 people
from the town and elsewhere took part. The event was heavily reported in the media, including TV and newspapers.

Maintain the same level of work environment as in Japan.

8, 23

̶

●
●

■Revitalize regions via environmental technologies
Promote environmentally friendly lifestyles and a model of regional resource recycling using
biomass energy technology. Engage in horizontal development in Japan and elsewhere.

environmental responsibility

environmentally friendly technologies① Held company meetings about how management and labor could improve the working environment.
② Held opinion exchange meetings (Waigaya meetings) twice a month to improve and clarify company meetings.

●⑧ Undertake initiatives to promote greater⑨ Encourage the development and diffusion of

23

8, 22

●

◎

Environment⑦ Support a precautionary approach to̶① Six people (versus ﬁve in FY 2015) used the AMITIME system, in which unused leave is stored up so that othercontinue working)① Improve AMITIME System to support employees who need to take leave or work shorter

Related pages

Set up a booth at an eco-event on the theme of recycling everything, including life and resources. Exhibited items on thetheme of everyday resource recycling.
Ran an information campaign about social issues and sustainable society via the Fudenkan communication space (1,961
visitors over the year).

●○■Improve work environment (create a company that enables employees to④ Support the elimination all forms of forced

FY 2016 performance

Assessment■Maintaining employee health
Regarding employees in need of follow-up examinations, AMITA to continue to cover costs
and announce positive changes to the cost coverage system.

■Technology proliferation① Provide sustainable management implementation services under environmental restrictions.
② Develop recycling business outside Japan.

△■Preventive measures① Strive to support and improve compliance systems in relation to legal revisions.
② Strengthen governance at bases outside Japan, realize controlled corporate governance.

○① Started new service The Sustainable Stage, which creates sustainability for companies and society, supporting corporate

environmental strategy from drafting to implementation under environmental constraints (six orders).

② Opened Taiwan Resource Recycling Plant (March) and moved into Malaysia (plant due to open in FY 2017).

① Conducting regular compliance checks (test rate 76%, percentage of correct answers 69%).
② Ran training courses etc. in internal rule compliance for local and expat staff.

9, 16, 21

18, 2022

22AMITA HOLDINGS Co., Ltd.
535 Akinono-cho, Oshikoji-agaru, Karasuma-dori Nakagyo-ku,
Kyoto, 604-0847 Japan
TEL : + 81-75 -277- 0378 FAX : + 81-75 -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: Akari Fujimoto
Written and edited by Empathy Capital Team© 2017 AMITA HOLDINGS Co., Ltd. All rights reserved.