INT E GR AT ED REPORT 2022

Innovation&
Challenge

ASAHI WAY
The Asahi Way

The Asahi Holdings Group has established the Asahi Way as a set of values forall employees. The Asahi Way is made up of Our Credo, Our Corporate Values,
Our Employee Principles, and the Group Code of Conduct. The Asahi Way
drives the Group’s sustainable growth and improves corporate value over the

medium to long term, and directors and management executives take the leadby serving as role models who put it into practice.

“Totally Committed to
Our Purpose
PURPOSE
Protecting the Natural Environment
and Preserving Resources”

Our Credo

Our Employee Principles

We conserve limited natural
resources,preserve the global
environment, and contribute to therealization of a sustainable world.

Innovate and embrace challenges
Put safety first
Maintain high quality
Promptly report (especially bad news)
Build trust and connections

Our Corporate Values
Cooperation with stakeholders

We constantly seek to earn even greater trust fromshareholders, customers, business partners, employees,
and local communities as we work to preserve the naturalenvironment.

Corporate governance with a balance of protective
and proactive measures

We boldly promote growth strategies and business reform
while securing transparency in decision-making and properly
managing risk.

No growth without profit

We realize long-term improvement of shareholder value
by ensuring the entire group grows and is profitable.

Trusted corporate brandWe aim to be widely recognized as an exemplary corporategroup and to build a brand that will be trusted over many years.

Addressing diverse risks

We strive to minimize risks and avert disasters by taking daily
safety measures in workplaces and by constantly working toprevent accidents.

Highly motivated employees

We promote work-life balance for employees and continuously
improve working environments and conditions.

Strong sense of mission and high ethical standards
We strive to be an organization where employees take pridein their own work and executives maintain a strong sense of
mission and high ethical standards.

Being a company of good people

We value good employees over the long term.
Our vision of a "good employee" is a person who is not selfcentered and who contributes to mutual prosperity and thedevelopment of the business.

INTEGRATED REPORT 2022

The Asahi Holdings Group Code of Conduct#1

We comply with all laws and regulations#2

We respect the dictates of social norms
and our own conscience#3 	We treat everyone equally, regardless ofage, gender, nationality, race, religion,or other characteristics#4 	We refrain from conducting any politicalor religious activities in the workplace#5

We treat customers with sincerity#6
We practice fair competition and	optimal decision-making whenselecting business partners#7 	We respect the confidential information
obtained through our work andavoid disclosing it externally#8 	We refrain from providing or receiving
meals or gifts in pursuit of personal
benefit#9 	We act for the greater good, not for
personal or affiliated parties’ gain#10 	We focus on the actual sites, actual
things, and actual facts

Contents
About Asahi Holdings

ESG Initiatives

STRENGTHS  �������������� 02
History of the Asahi Holdings Group…………… 04
Message from the CEO …………………………… 06

E ENVIRONMENT
Environmental Initiatives of
the Asahi Holdings Group………………………… 38
Environmental Management …………………… 40
Climate Change Initiatives ……………………… 41
Response to Recommendations by the Task
Force on Climate-related Financial
Disclosures (TCFD)……………………………… 42

Totally Committed to Protecting the Natural
Environment and Preserving Resources
The Value Our Business Provides
Long-Term Vision, Risks, and Opportunities
Looking Back at the Year Ended March 31, 2022
Forecast for the Year Ending March 31, 2023
Pursuing Social Sustainability and Business
Expansion Simultaneously
To Our Stakeholders
At a Glance ………………………………………… 14

Value Creation Drivers and Business
Models……………………………………………… 15
Overview of Asahi Holdings Value Creation
Process  ���������������� 16
Consolidated Financial/Non-Financial
Highlights…………………………………………… 18
Long-Term Vision and Medium-TermBusiness Plan……………………………………… 20
Overview of the 9th Medium-Term Business
Plan………………………………………………… 21
Financial Strategy………………………………… 22
Sustainability Strategy…………………………… 23
Asahi Holdings Business Portfolio
Precious Metals Business ……………………… 24
Environmental Preservation Business ……… 30
Asahi Holdings Materiality ……………………… 36

Editorial Policy
This report provides an overview of theactivities and operations of Asahi Holdings,
Inc., with a focus on the company’s
measures to address social issues throughits business activities. It has been prepared
as a way for the Asahi Holdings Group tocommunicate with a broad range ofstakeholders and explain the kind of value itis working to create. By presenting specificgroup activities and initiatives, the report
also serves as a company profile.

S SOCIETY
Human Capital to Support Business andStrategy……………………………………………… 44
Initiatives for Responsible Precious Metals
Management ……………………………………… 46
Relationship with Society………………………… 48
G GOVERNANCE
Corporate Governance…………………………… 50
Compliance and Risk Management …………… 53
Director Profiles ………………………………… 55
Special Feature

Roundtable Discussion with
Outside Directors…………………… 56

Financial and Non-Financial Data……………… 62
Group Company Structure/
External Evaluations……………………………… 64
Corporate Group Overview/
Share Information………………………………… 65

Report Period
April 1, 2021, to March 31, 2022
Scope
In principle, this report covers the entire
Asahi Holdings Group, including Asahi
Holdings, Inc., and its consolidated
subsidiaries.

Numbers and Graphs
The figures shown here are rounded off. Dueto this rounding, totals may not agree withthe constituent figures shown.
The Group adopted the International
Financial Reporting Standards (IFRS) in
fiscal 2016, and each reporting item namebasically follows the IFRS guidelines.
The financial figures for fiscal 2015 are also
shown based on IFRS.

About the Group's Logo
The Group’s logo uses a spiral shape
as a motif to signify the corporate
stance in seeking "environmental
preservation through recycling,"a main feature of its business; thelogo also indicates continuity andgrowth. The arrows pointing upwardand downward symbolize Asahi
Holdings as an advanced, cuttingedge company. The three colorsof blue, red, and green signify"clean water and sky," "the energyof people carrying out activities,"and "beautiful nature and forests,"
respectively.

Note on Future Prospects
In addition to past and current facts about
the Group, this report includes forecasts
based on strategies, outlooks, and businessplans. These forecasts were created basedon information available at the time ofwriting. Therefore, it is important to notethat actual performance and results may
differ greatly from any forecasts presented
here, and depend to a large extent on futurechanges in the business environment.

ASAHI HOLDINGS

01

Our Strengths

STRENGTHS
Our Strengths Based on the "Asahi Way"A Trust-Based
Relationshipwith Our Employees

Innovate andEmbrace Challenges
Putting the "Scrap and Build" Business Approach into PracticeBeing a Company of Good People

This year marks the 70th anniversary of our company, which was founded in 1952. Since our founding, we have consistently promoted businesses
that contribute to the creation of a recycling-oriented society, and we have now developed into a company that operates on a global scale.
Looking back on our company's history, our journey has been a series of "innovations and challenges." We got our start recycling silver fromphotographic fixer, and in 1975, we became the first company in Japan to obtain an industrial waste disposal license from Kobe City, which is alicense for detoxifying waste photographic fluid containing hazardous substances. This helped our business to expand nationwide.
Since then, while managing to overcome various difficulties, we have expanded the scope of our precious metals recycling to sectors that also
involve handling precious metals other than silver, such as dentistry, jewelry, electronics, and catalysts. At the same time, we've taken on thechallenge of creating new businesses. In addition, we have acquired about 20 companies over the past 20 years, primarily in the Environmental
Preservation Business. Further, we obtained a North American refining company in a major acquisition, transforming our business portfolio. On
the other hand, we did not hesitate to make an early exit from businesses that we determined should not be continued from the perspectives of
profitability, growth potential, and synergy. Our withdrawal from the photographic materials business and the Life & Health Business Segment,
which remained profitable at the time of withdrawal, are two such examples. Our "scrap and build" approach to business has allowed us toinnovate and embrace challenges.

A trusting relationship with our employees has definitely supported the development of our company. We've gone through a numberof phases, starting off as a family-run business focused on personal ownership ("My Company"); then becoming a business focusedon communal ownership ("Our Company") that worked with its employees to create new businesses in response to various changes;
and finally turning into a publicly listed company with external ownership ("Your Company") that is very mindful of its shareholders andother stakeholders. Throughout this journey, we have maintained a strong sense of purpose and high ethical standards in spreadingthe "Asahi Way," which summarizes the management philosophy and code of conduct that comprise our traditional values. At thesame time, we have actively recruited a diverse workforce with an eye towards future globalization. We have improved compensation
through fair and impartial evaluations and a performance-based system. We have also paid attention to job satisfaction and worklife balance, implementing the internal application system and satisfaction surveys, among other changes. Just as "being a companyof good people," one of the principles of the Asahi Way, suggests, a group of employees that contributes to mutual prosperity andthe development of the business is the foundation for overcoming difficulties brought about by various changes in the businessenvironment.

8 Factors Supporting Value Creation

Promoting Business Reformwith an Emphasis on Speed
Photographic
materials

Major Business
Expansions

1952

Malaysia

1994

Hard drive
magnetic
materials

1999

LCD
indium

2000

PDP

2003

Shanghai

2003

South
Korea

2006

Glass

2009

E-scrap

2011

Precisioncleaning

2011

Taiwan2013

Strengths rooted in Asahi's history

Refining
in NorthAmerica

L&H*

2014

2015

Minting/carbon
treatment inNorth America

2019

Scrap & Build
Hard drive
magnetic
materials

2013
PDP

2017

LCD
indium

2018

2018

2018

2020

2022

ShanghaiTaiwanPhotographic
materials

L&H*

Glass

* Life & Health Business Segment

02

INTEGRATED REPORT 2022

By paying close attention to the businessenvironment and lifecycle and practicing
flexible thinking, decisive action, and quick
decision-making, we have built original
business models and quickly exitedbusinesses in decline. With the ability torespond in this manner, we will continue tomaintain growth.

Management
Capabilities forRegeneration of Business

Major Business
Withdrawals
2011

Ability to Adapt
to Change

Over the past 20 years, we have brought morethan 20 companies into the Group throughmergers and acquisitions, and we have
improved corporate management. Thanks to
our flexible management capabilities matchedto specific business environments, nearly allof our companies perform better than they didprior to joining the Group. We will continue toimprove performance.

Industry-Leading
Unique Technologies
We are proud of the original technologies wehave developed. These include the following
technologies: recovering precious metals
with high efficiency and advanced analyticalcapabilities, properly processing various
industrial waste materials, and productdevelopment based on accurately ascertaining
customer needs. Through constant research anddevelopment, the Group continues to enhance its
unique technologies in each of its business fields.

TrustedAsahi Brand
The Asahi Group's precious metal products
are highly regarded throughout the world fortheir reliable quality. We are committed tobuilding a trusted Asahi brand by continuing
to provide high-quality products and services
in all of our businesses.

Highly MotivatedEmployees
The Group's growth has been driven by our
employees, who share the group-wide valuesof the Asahi Way, deeply value trust andconnections, and are motivated by a passion
for innovation and embracing challenges. The
Group proactively invests in human resources
and continues to develop highly motivatedemployees.

Globally Expanding
Network
Since establishing a local subsidiary in
Malaysia in 1994, we have expanded into
other countries in Asia, including South
Korea, China, and Taiwan. In 2015, we
acquired a refining business in North America
through a merger and acquisition, expanding
our target customer base to countries aroundthe world.

Good Relationships
with Stakeholders
We actively engage in dialogue with investors
and listen to our customers and business
partners to strengthen governance anddevelop our products and services. We value
the mutual trust we have with our employeeswith the local community and work toincrease our long-term corporate value.

Substantial
Market ShareOur highest priority is to satisfy ourcustomers and business partners, and wehave worked hard to improve our products
and services. Our sales and technicalcapabilities that meet a wide range of needs
have earned us the trust of our customers
and enabled us to acquire a strong market
share.

ASAHI HOLDINGS

03

Our 70-year history is one of innovation and challenge.
Over that time, we have developed into a global corporate groupand continue to grow today.

1

Act

1952

Act

Foundation and
Early Decades

1999
2000

1964

Becomes kabushiki gaisha (stock-based company)

1974

Fukuoka sales office opens. Sales offices start to be established

1978

Head Office building completed in Higashi-Nada-ku, Kobe City

1997
1998

Name changed to Asahi Pretec Corp.

1982
1984
1986
1994

1975

L
 aunch of business recycling silver extracted fromphotographic fixerC ompact electrolytic silver collection equipment"PLATA" developed
Precious metals recycling business launched in the dental sector

Precious metals recycling business launched in the platingL isted on the 2nd Section of the Tokyo
Stock ExchangeP romoted to the 1st Section of the Tokyo
Stock ExchangeA sahi Holdings, Inc. established2003

Automobile catalyst business launched

2006

Asahi Pretec Korea Co., Ltd. established2011

E-scrap business launched
Precision cleaning business launchedsolution sector

Precious metals recycling business launched in the electronics
components and jewelry sectors
Compact electrolytic gold collection equipment "ZIPANG" developed
ASAHI G&S SDN. BHD. established in Malaysia
Equipment for detoxification of photographic effluents installedat the Kobe Plant
Industrial waste disposal license acquired from Kobe City
(detoxification of photographic effluent containing harmful
substances)

1978

Registered as an environmental measurement certification office

1990

E ntry into environmental preservation
businesses other than photographic
effluents

3

New Development

2012

The Asahi Way established
Selected for inclusion in an ESG index by the Tokyo Stock
Exchange

2015

C ompany with an Audit and Supervisory Committee system
adoptedNominating and Compensation Committees established
Performance-based stock-option system introduced

2016

International Financial Reporting Standards (IFRS) adopted

2017

Capital increased through new share issue

2018

The Asahi Way undergoes comprehensive revision

2022

Transferred to the Tokyo Stock Exchange Prime Market

2015U S and Canadian gold and silver refining subsidiaries
acquired from Johnson Matthey (UK), and Asahi
Refining USA Inc. and Asahi Refining Canada Ltd.
established

2019

Asahi Refining Florida LLC established2022

C onstruction of new plant in Bando City, Ibaraki Prefecturecompleted

Environmental Preservation
Business

Environmental Preservation
Business

1972

Headquarters operations transferred to Chuo-ku, Kobe City
Technical Research Center opens in Nishi-ku,
Kobe City

Initial public stock offering made on
over-the-counter market

2004

Nihon Chemitech Co., Ltd. acquired

2007

Taiyo Chemical Co., Ltd. acquired

Environmental Preservation Business

Precious Metals Business

1975

2009

across Japan

Precious Metals Business

1952

2002

Public Company

Precious Metals Business

1952

Asahi Chemical Laboratory founded in Joto-ku, Osaka City

1999

2

Act

History of the Asahi Holdings Group2012

History of the Asahi Holdings Group        Kitakyushu Office of Asahi Pretec Corp.
opened2008

Japan Waste Corporation establishedFuji Rozai Co., Ltd. acquired2010

Yokohama Office of Japan Waste

2017

Nihon Chemitech Co., Ltd. and Ecomax Co., Ltd.
integrated into Japan Waste Corporation

2020

Asahi Pretec Corp. and Japan Waste Corporation
integrate environmental preservation businesses

2021A sahi Pretec merges with Japan Waste Corporation
and Taiyo Chemical Co., Ltd.

Corporation opened
Ecomax Co., Ltd. acquired

Business Performance
200(Billion yen)

Operating Profit

25.0

180

22.5

160

20.0

140

17.5

120

15.0

100

12.5

80

10.0

60

7.5

40

5.0

20

2.5

e
u
n
e
v
e
R

0

04

Revenue

1964

1980

1981

INTEGRATED REPORT 2022

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

t
i
f
o
r
P
g
n
i
t
a
r
e
p
O

(Billion yen)0
[FY]

ASAHI HOLDINGS

05

Message from the CEO
Message from the CEO

We Have Always Been—
and Shall Remain—
Totally Committed to Protecting
the Natural Environment
and Preserving Resources.
Representative Director,
President & CEO

Tomoya Higashiura

Totally Committed to Protecting the
Natural Environment and Preserving
Resources
This year marks the 70th anniversary of our company, which
was founded in 1952. Being “Totally Committed to Protecting
the Natural Environment and Preserving Resources” is ourcompany’s purpose. This slogan was inspired directly by asubmission by one of our employees for an in-house contest we
held in 1978. From the company's founding up until that point, ourcustomers had been photo studios and processing laboratories,
and our main business involved recovering silver from silvercontaining liquids and detoxifying hazardous waste liquids. As wedeveloped our own technologies and expertise, we subsequently

06

INTEGRATED REPORT 2022

expanded our business domains to encompass a variety ofservices and products. That being said, there has been no change
to our model of keeping our businesses and social contributions
inseparable. I have a real sense that an increasing number ofpeople inside and outside the company have come to understandand agree with this model. With “Totally Committed to Protecting
the Natural Environment and Preserving Resources” as ourlodestar, we will continue to take our company to new heights.

The Value Our Business Provides
Our business activities consist of two mainstays: Precious Metals
Business and Environmental Preservation Business. Throughthese two businesses, we strive to generate both economic value

and social value.

Precious Metals Business
Demand for precious metals is spreading throughout theindustrial and investment sectors, and the role of the Precious
Metals Business in handling limited precious metal resources
is growing more essential. Our Precious Metals Business isdivided into two areas: precious metals recycling and precious
metals refining. Our precious metal recycling business primarily
recovers gold, silver, palladium, and platinum from a wide varietyof scrap materials-originating in sectors such as electronics,
catalysts (automotive and chemical), dentistry, and jewelrythat contain precious metals to produce high-purity bullion.

The business combines a highly skilled sales force that visitscustomers in person, with plants that have the expertise andbreadth of experience necessary for material recovery. Because
raw materials come in a wide variety of shapes, properties, andquantities, our competitive advantage is derived from flexible
and creative approaches utilizing our experience, technology,
and know-how. We have a leading share in all of these sectors.
Our recycled gold and silver are certified by the London Bullion
Market Association (LBMA) and our platinum and palladium by
the London Platinum and Palladium Market (LPPM), and they
are distributed in the global market. In addition, our uniquetraceability system allows us to prove that the raw materials usedin our products do not contribute to environmental pollution,
regional conflicts, or human rights issues. This kind of certified
gold bullion is referred to as green gold, which adds a premium

ASAHI HOLDINGS

07

Environmental Preservation Business
Our Environmental Preservation Business is engaged in theproper disposal and recycling of industrial waste across thenation. Our nationwide operation is made possible by facilities
capable of handling a wide variety of items, a sales force of 150
people located all over Japan from Hokkaido to Okinawa, andour possession of collection and transportation licenses in allmunicipalities throughout Japan. We also have experience inhandling a wide variety of waste materials over a large area, andwe not only perform actual disposal of industrial waste at ourfacilities, but also turn industrial waste disposal management
into a source of revenue. Specifically, this means that we
present our customers with proposals for an optimal process
flow, from collection and transportation to disposal, and thenreceive fees for these proposals as well as their implementationand management, even if we do not use our own facilities
at all. Companies in the industrial waste industry usuallyoperate out of their own facilities and run their businesses
according to their licensed items, capabilities, and location.
However, we do our business in an opposite way. We initiate
our business according to customer needs. This is what makes
our Environmental Preservation Business unique. Whether

08

INTEGRATED REPORT 2022

customers are trying to tackle global warming by streamlining
collection and transportation routes or increasing recycling
rates, our consulting solutions can help them do so without
being restricted to the use of our own facilities.
We hope that customers will see our company as shifting
the industrial waste treatment industry toward a knowledge
industry. We believe that this will give us a decisive advantage
in the industry in the future. The Plastic Resource Circulation
Act went into effect in April 2022 as Japan looks to achievecarbon neutrality. From an early stage, we have collaborated
with the materials and chemical industries to recycle recyclable
used plastics, all without being particular about the use of ourown facilities or the framework of the industry. In addition,
DXE Inc., which we launched in June 2022, has started a paid
service that offers digital management of a series of businessprocesses, from industrial waste discharge to treatment. Our
goal is to eventually develop into a platform that proposes themost logical transportation and treatment processes for ourcustomers in terms of CO2 reduction and resource conservation.
This will serve as our ultimate goal as we continue to transformthe industrial waste treatment industry into a knowledge
industry.

Long-Term Vision, Risks, andOpportunities
Since we entered 2022, soaring resource and fuel prices, as well
as dizzying fluctuations in exchange rates, have been having asignificant impact on the economy. Dependence on fossil fuels
and global material procurement are becoming unavoidablerisks shared by all industries. That being said, I believe that manybusiness opportunities lie in creating a flow that allows one toevade such risks.

To Be a Leader in Creating a Circular Economy
That Connects Society to the Environment
Looking toward the future of human society, we wish to become“a leader in creating a circular economy that connects society
to the environment.” While this vision will remain constantover the long term, there are two things that we believe weshould pursue with care as we explore how the situation willchange going forward in the face of recent developments in thedomestic and international business environment.
One is that we must take cross-border value chain risks into
careful consideration in seeking to expand our Precious Metals
Business globally. The second is that we must firmly grasp
the changes in behavior of Japanese government and waste
generators in the move toward carbon neutrality as we further
expand our Environmental Preservation Business.
First, with regard to the issue of international value chains, inlight of the tension that has escalated between the United States
and China over the last several years, as well as the current
conflict between the G7 nations and Russia, it is clear that wecannot grow complacent based on the belief that deepening
international interdependence among sovereign nations throughtrade and direct investment will promote economic development
and deter confrontation. While we envision our successful
business model in North America expanding to other continents,
we will determine our actions based on a firm assessment of
the short-, medium-, and long-term risks involved in expanding

Message from the CEO

to the value of the bullion.
In 2015, we launched our precious metals refining business inNorth America. The scale of our refining business is the largest
in the world, exceeding 2,000 tons of gold and silver combined
per year. We acquired a gold and silver refining business with
operations in Utah (U.S.) and Ontario (Canada) from Johnson
Matthey of the UK. We also acquired the assets of Republic
Metal Corp. in Florida, (U.S.) in 2019, gaining control of minting
assets for processing precious metal products such as goldand silver coins. In addition, we will complete construction of alarge-scale warehouse in New York State in the U.S. by the end of2022, which will streamline the distribution of our products. We
are in the process of completing a system in which we use theraw materials received from mining companies and the jewelry
industry around the world to manufacture high-purity, LBMAcertified gold and silver bullion, just as we do with precious metal
recycling, process them into gold and silver products of various
forms, and enable optimal distribution and sales around theglobe.

into and doing business with new regions.
Second, with regard to the issue of carbon neutrality, waste
generators are gradually becoming more cautious about
incinerating used plastics. While incinerating biomass does notincrease CO2 emissions, incinerating waste plastics and waste
oil increases CO2 emissions, and concerns about this have been
growing. Moreover, consumption fluctuations due to COVID-19,
trade frictions among major powers, and sanctions related tothe invasion have caused coal and other fuel prices to skyrocket.
This has caused the materials industry and others to seek tosecure waste plastics as fuel and raw materials, which has
led to a major intake of waste plastics. We need to adjust ourbusinesses in line with these new trends. We are confident that
this is a transition phase in which we can leverage our bird'seye view of industrial waste management as a source of profit.

Resource Recycling That Mitigates the Risks
of Dependence on Fossil Fuels
We believe that there will be increased opportunities within the
resource recycling business if we face the risk of fossil fueldependence head-on, especially in the context of heightened
geopolitical risks. One of the real-life consequences of
Russia's invasion of Ukraine was a sharp rise in the price of
natural resources, including the precious metals we handle.
In particular, the price of palladium, of which Russia is thelargest primary producer, leaped by approximately 1.5 times ina few months from the beginning of 2022. While the situation is
critical for industries including medical care that use palladium,
our ability to recycle rare metal resources has played amajor role by serving as a buffer. The amount of palladium
we recycle annually is equivalent to about 10% the amount of
palladium Russia exports to the rest of the world in a single
year. Depending only on resources from primary mines would
surely have sent prices soaring even higher, causing panic in
the auto industry and other related industries around the globe.
We can also learn from history that sanctions can trigger major
military conflicts. Having completely local recycling operations
alleviates the issue of dependence on imported resources.
Behind our company’s purpose of being “Totally Committed toProtecting the Natural Environment and Preserving Resources”
is the preservation of world peace.

Turning Risks into Opportunities
Due to the global spread of COVID-19, material procurement
risks have become apparent in a number of industries. Ouroperations in Japan and Asia are relatively regionally selfcontained, and while we faced severe difficulties in some
sectors due to customers' production activities stalling, there
were no major obstacles in terms of our own operations.
However, our North American business uses Europeanmade equipment for some of their production facilities, andwhen that equipment broke down, it took a great deal of time
to import repair parts and perform on-site repairs, whichcaused extended production downtime. Moreover, the residue
generated during the refining process at the plant contained
a small amount of precious metals, so recovery of precious
metals from this residue had to be outsourced to a smelter. We
used a major smelter in Italy, but lead times were significantly
extended due to the slowdown in sea transport and the lack of
local workers.
With regard to the production equipment made in Europe, we
continue to use it, but we have concluded a new maintenancecontract with a local electrical equipment company at our plantand established a system that allows us to deal with productbreakdowns almost completely locally. This allows us to recoverfrom breakdowns more quickly than before the COVID-19
pandemic. In terms of outsourcing to smelters, we have decided
to bring the smelting function in-house within our Salt Lake City
plant to reduce our dependence on outsourcing. It was for thisreason that I myself decided on making a phased investment whileat the Salt Lake City in April. The smelting function is a rarity in
the North American region, and we made an immediate decision
to transform a risk into an opportunity, with the aim of developing
the combined smelting and refining business into a new service
for external customers. We will create a management structurethat retains the advantage of freely utilizing resources dispersed
around the globe while preparing contingencies in case this rapidly
turns into a risk in terms of business continuity.

ASAHI HOLDINGS

09

Our Precious Metals Business has long been focused on thedomestic market. We started expanding our business outsideof Japan in the 1990s. As mentioned previously, we entered theNorth American region in FY2015 upon acquiring a gold and silver
refining business from a British company. It has been said that
there are few examples of Japanese companies succeeding inacquisitions of businesses overseas. While we did indeed suffer
operating losses in the immediate aftermath of the acquisition,
we were able to successfully develop the business after it became
profitable in FY2017. There are still many markets across the globe
where we can profit by using the methods we used to succeed
in our North American business. Making our Precious Metals
Business multinational in scale will not only grow the businessitself, but also stabilize our business operations overall. As theindustrial and investment demand for rare precious metals grows,
the role of our Precious Metals Business will become ever more
important, and the opportunities ever more abundant.
The domestic industrial waste market is a huge market for
our Environmental Preservation Business. It is larger thanthe domestic shipping industry and three times the size of theparcel delivery industry. We have expanded our processing
capacity in this market through capital investments and M&A.
While we already occupy a leading position in the industry, no
company possesses a dominant market share yet, including
us. This is partly owing to the fact that there are complex laws,
regulations, and administrative guidance related to the market,
and establishing industrial waste facilities and conducting
treatment activities both require obtaining licenses, which makes
it difficult for outsiders to enter the market. Meanwhile, it also
takes considerable time for existing operators in the industry to
expand their businesses. However, going forward, businesses will
be tested on their ability to respond to current trends, such ascarbon neutrality and the digitization of transactions in general.
Such ability will decide the competitiveness among businesses,
and by maintaining a competitive edge, it will become easier thanever to accelerate growth.

Looking Back at the Year Ended
March 31, 2022
Record-High Operating Income for the Fifth
Consecutive Fiscal YearIn the fiscal year ended March 31, 2022, sales revenue continued
to increase compared to the fiscal year ended March 31, 2021,
with year-on-year revenue up 17% to 192.4 billion yen. Operating
profits reached 26.4 billion yen, up 5% from the previous year,
marking the fifth consecutive year of record profits. We increased
our annual shareholder dividend by 5 yen from the previous fiscal
year to 90 yen per share.
Ever since COVID-19 took hold of the world at the start of 2020,
business activities in various industries have been restricted,
and we have faced a number of restrictions ourselves, but wehave maintained our determination to "never stop business
operations" from the start. Our nonstop resource recycling andenvironmental preservation activities have enabled us to continue
to fulfill our role and responsibility as one of society's "veins." We
believe that the improvement in our financial performance andcorporate value both last year and two years ago is a result of theaforementioned efforts being met with approval.

10

INTEGRATED REPORT 2022

Industries such as electronics, telecommunications,semiconductors, chemicals, and pharmaceuticals operated at full
capacity. Given the situation, if our precision cleaning and surface
treatment-related collection activities and our factory effluent
treatment activities were to cease, it would be extremely difficultfor producers to continue production. Moreover, above all, it was
medical institutions that were required to operate nonstop. If ourcollection, transport, and detoxification of their infectious waste
had stopped, all of society would have been thrown into panic. It
once again became clear that there is an intimate interdependency
between our core businesses and industrial activities and civic life.
We are proud that our tireless efforts to be "Totally Committed toProtecting the Natural Environment and Preserving Resources"
support society's daily activities far and wide.

Japan with both COP and COC certifications from the RJC. Since"supplying precious metals in ways that are friendly to people,
society, and the environment" is our most important businessmateriality, the fact that we have received reputable third-party
certification for transparent raw material sourcing and traceability
shows progress. We will further enhance the value of the Asahi
Brand by providing precious metal products that guarantee thatconsideration is given to human rights and the environment.

Bando Plant Operations- Our Pride in Being a Responsible Refiner

For the fiscal year ending March 31, 2023, as of July 31, 2022, thecompany has announced a predicted 4% year-on-year increase
in revenue to 200 billion yen and a 9% decrease in operating
income to 24 billion yen. The decrease in profits is due to the fact
that, in accordance with the International Financial ReportingStandards (IFRS) adopted by the company, we expect to incur aone-time expense of approximately 2 billion yen in losses on theretirement of existing facilities associated with the completionof the new facilities and other projects. For example, we are
currently working with the local community to rebuild ourexisting Yokohama Plant and establish a new industrial waste
incineration facility to create a large-scale waste treatment
center in eastern Japan. As such, abandonment losses must berecorded for existing facilities that are to be decommissioned.
We also expect an abandonment loss to be incurred at the North
American sites as a result of new capital investments. Due toa confluence of factors such as abandonment losses and anincrease in depreciation, we predict a decrease in profit for the
fiscal year ending March 31, 2023. However, both of these factors
closely tied to the goal to "reinforce the foundation for growth"
set forth in our Medium-Term Business Plan. We hope that
our shareholders understand that we are not just sitting down,
exhausted, but rather squatting down in preparation to make a
giant leap forward.
In terms of shareholder dividends, we will maintain our policyof keeping a dividend payout ratio of around 40% while enhancing
internal reserves to invest in capital investments and M&A activities
for future growth. Unless there is a fundamental decline in our
profitability, there will be no change to our policy of maintaining
stable dividends without decreasing the current annual dividend
amount. Given this approach, the planned annual dividend forecast
for the fiscal year ending March 31, 2023 is 90 yen per share, thesame level as for the fiscal year ended March 31, 2022.

In the fiscal year ended March 31, 2022, we invested a total of 8.3
billion yen. One such investment was in the Bando Plant, which
will become one of the largest state-of-the-art recycling plants
in Asia. The plant began full-scale operations in April 2022. The
plant handles the recycling of precious metals from the dentistry
and jewelry sectors. Until now, the pretreatment, assay, andrefining processes were performed at the Saitama Plant, while
the final processes, which include molding, engraving, andshipping, were performed at the Technical Research Centerin Kobe. The new Bando Plant will consolidate all of theseprocesses and serve as an integrated solution for the complete
recycling process. Since there is no longer transportation
between plants like before, logistics costs and CO2 emissions
have been reduced. In addition, by forcibly dissolving NOX
generated during the acid treatment process when recovering
precious metals in water and circulating the solution as nitricacid, we have reduced the consumption rate of chemicals by
about 40% while curbing greenhouse gases. Furthermore, wehave reduced factory personnel requirements by approximately
25%, primarily by promoting automation and saving on laborthrough full utilization of IoT. Taken together, these efforts
have reduced the average lead time for precious metals fromreceipt of raw materials to product shipment by approximately
10%. Being able to improve the cost efficiency and speed of ouroperations in the face of rising prices and interest rates was avery timely development.
In July 2021, Asahi Pretec, which oversees the precious metal
recycling business, became the first refiner in Japan to obtain
Chain of Custody (COC) certification from the Responsible Jewelry
Council (RJC). Asahi Pretec already obtained Code of Practices(COP) from the RJC in July 2019, making it the only refiner in

Message from the CEO

Opportunities Expand for Two Major Businesses

Forecast for the Year Ending
March 31, 2023
Squatting Down in Preparation for the Leap
ForwardStrategic Investment Decisions
Under the 9th Medium-Term Business Plan, we have decided toinvest 22.7 billion yen over the three-year period through March
2024. The amount of investment in major investment projects,
including the Bando Plant and Yokohama Office, is almost
identical to the original plan. However, the investment amountrelated to our burgeoning North American business is expected
to be higher than originally planned. The large-scale renovationsof the silver refining process at the Salt Lake City plant, which
includes automation and was originally scheduled to begin
during the current fiscal year, will be conducted as planned. In

addition to this, instead of leasing as originally planned, we havedecided to take a long-term perspective and purchase the landand buildings for our New York warehouse business. In addition,
as was mentioned previously, we will begin efforts to internalize
the smelting function at our Salt Lake City plant. Further, since
the downstream portion of our North American business-namely,
the value-added business of processing and selling a variety ofcoin and bar products created by using our refined gold and silverbullion as raw materials-has been buoyed by favorable market
conditions and expanded more than we planned for, we havedecided to more than double our current capacity for processingthese products. These agile initiatives will result in increased
investments in our North American business.
We have also decided to temporarily suspend our originalplan for a fifth new incinerator in Kitakyushu, Japan, based on
the determination that we need to assess how the Japanese
government and waste generators will act with regard to thetrend toward carbon neutrality in Japan. We will carefully monitor
market trends and future developments. There are a few othersmall changes to the capital investment details, but there are
no changes to the plan of investing 22.7 billion yen total over thethree-year period.

Pursuing Social Sustainability
and Business Expansion
Simultaneously
Growing Our Business and Solving Social Issues
are One and the SameIn our precious metals recycling business, wet processing,

ASAHI HOLDINGS

11

Climate Change Initiatives

which we perform via acid dissolution and other techniques,
can significantly reduce CO2 emissions when producing anequal amount of gold compared to dry processing, whichmining companies and others perform via high-temperature
heating. The dry process can be scaled, and one could saythat the wet and dry processes are compartmentalized, but
in-house technological developments have enabled us toexpand the range of targets for recovery via the wet process.
At our company, “in-house production” refers to the assay andrecovery of raw materials via wet refining that were previously
subject exclusively to dry refining. We have a history of
expanding our value-added domains through this process, andwe will continue to do so going forward. From this perspective,
our growth strategy overlaps with our carbon neutrality
strategy.
At the Bando Plant, we have been able to reduce the amountof chemicals used, eliminate transportation between plants, andshorten the recycling lead time, all of which make us more costcompetitive and fuel our competitive advantage in the market.
At the same time, it is important to emphasize that all of these
initiatives reduce greenhouse gas emissions, including CO2.
Thus, our strategy for remaining competitive overlaps with ourcarbon neutrality strategy.
Like our precious metals recycling business, the role of ourEnvironmental Preservation Business can be compared to theveins circulating blood throughout the human body. The role ofveins is to purify the blood delivered to every part of the bodythrough the arteries before routing it back into circulation. The
Environmental Preservation Business requires cooperatingwith waste generators and other businesses that act asarteries so that we can harmonize with the direction in whichsociety desires to head. As director of the Japan Federation ofIndustrial Waste Management and Recycling Associations andchairperson of the Intermediate Processing Subcommittee, I
am working to update the industry's role as we progress toward
a carbon neutral future through direct discussions with the
Ministry of the Environment, the Ministry of Economy, Tradeand Industry, and other relevant government agencies. In
this context, cooperation between arteries and veins is a vital
topic. Regarding our Environmental Preservation Business,
we will do everything we can to pave the way for material andchemical recycling that incorporates arterial industries throughthe management of industrial waste disposal. For difficult-torecycle waste, we will encourage low-carbon, cost-effective,

12

INTEGRATED REPORT 2022

In December 2021, we announced our "2050 Carbon Neutrality
Declaration" and declared our goal of achieving carbon
neutrality for Scope 1 and Scope 2 emissions by FY2050. We
made reducing CO2 emissions one of our business materialities.
First, by FY2030, we will reduce energy-derived CO2 emissions
such as electricity and gasoline by 50% from their FY2015
levels. To achieve this goal, we have been reducing fuel usage
in a variety of our activities, switched to CO2-free electricity, as
well as reducing fuel consumption and converting our newly
constructed sites into Net Zero Energy Buildings (ZEBs). In
addition, as a follow-up to switching our company vehicles overto hydrogen vehicles, we plan to switch as many of our businessvehicles as possible to electric vehicles (EVs).
We are also working to link our business structure itself
more closely to global warming countermeasures. For example,
it was previously mentioned that NOX generated during the acidtreatment process at the Bando Plant is forcibly dissolved inwater and recycled as nitric acid. We are also striving to recover
the heat generated during waste incineration and convert it
into electricity. However, we encountered an issue with surplus
electricity having to be discarded. To address this, in one of
our corporate ventures, we launched an experiment to producehydrogen, which has excellent preservation and portability,
through water electrolysis using this surplus electricity.
In addition to hydrogen, the electrolysis process produceschemical by-products that are sold to make the process more
profitable. Producing hydrogen using surplus electricity will
help reduce CO2 emissions throughout the supply chain, and it
has been chosen as a demonstration experiment subsidized by
the Ministry of the Environment in anticipation of the arrival of ahydrogen-based society at some point in the future. If industrial
demand for hydrogen and other sectors further increases andsociety as a whole develops a hydrogen-based infrastructure,
this business will experience remarkable growth.
We have also endorsed the recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD) andhave established a cross-departmental TCFD response team to
conduct scenario analysis and other activities. In light of this, wehave identified the risks and opportunities, and in April 2022, wemade disclosures based on the TCFD recommendations.

Human Resource Policies
The ratio of new graduates to mid-career hires is approximately
25% new graduates and 75% mid-career hires. Because of thehigh percentage of mid-career hires, we have people from awide variety of backgrounds. Even when we had new groupsof people mixing with our own employees through M&A, we
experienced no severe clash of corporate cultures. I suspectthat the cost of post-acquisition integration is also extremely
low thanks to our diverse workforce.
That being said, if we look at our company's workforce

composition in terms of gender, the fact that the percentage
of male employees is high cannot be denied. This is because
sales and factory workers sometimes handle special chemicals
and heavy materials, and thus these tasks have been assigned
primarily to male workers from the viewpoint of maternity
protection and so on. In clerical and technical workplaces,
where there exist no such concerns, ability- and performancebased personnel management is firmly ingrained, and there
is no gender disparity in terms of compensation and speed ofpromotion. We are now in the process of expanding the numberof workplaces where female employees are assigned while
carefully implementing measures within the work environment.
In fact, of the new graduates hired in April 2022, 60% are
women, and we have placed 2 of these female employees in onsite sales positions for the first time in over 20 years. Throughmy own involvement in the North American business, I havedirectly witnessed the positive effects that diversity in terms ofgender, race, and other aspects has on organizational vitality.
We will enthusiastically promote diversity and inclusion globallyand consistently.
For our core positions, we will continue to make efforts
to enhance our human resource development infrastructure
through both internal training and mid-career hiring. We
will also strive to further enhance educational opportunities
through the use of internal and external resources. Further,to develop the company in a sustainable manner in the faceof an era of rapid change, we would like to cultivate not only
knowledge and skills, but also a sense of ownership in thecorporate management, from the top of the pyramid as far down
as possible, so that we include as many people as possible. If
each individual is able to hone their sense of responsibility andjudgment within our ever-expanding businesses, I believe wecan at least maintain the speedy management we have had up
to this point.
In terms of compensation, we have established an incentive
plan called the "Stock Grant ESOP Trust" for assistantmagagers and above, which accounts for about two-thirds of all
employees. The Compensation Committee is also planning todiscuss an increase in the ratio of stock-based compensation
within executive compensation beyond the current level so as toenhance medium- and long-term incentives.

sectors related to our management and executives from othercompanies to serve as independent outside directors. At present,
independent outside directors comprise the majority of theBoard of Directors. Moreover, we have established a voluntary
Nomination Committee and Compensation Committee to ensurethat independent outside directors are appropriately involvedin the consideration of important management matters, suchas director nominations and compensation. Each committee
is chaired by an independent outside director and is primarily
composed of independent outside directors.
To make the most of this structure, it is essential to createa working mechanism. In April 2020, the Audit Department,
which is responsible for operational audits, was given greater
authority and placed under the direct control of the Audit andSupervisory Committee. In addition, we established the Group
Risk Management Department in April 2021 to ensure crossorganizational risk management. This department monitors
compliance across the entire Group, and is focusing particulareffort on managing the credit risks of our North Americanbusiness counterparts, which are expanding at a rapid pace.

Message from the CEO

and proper disposal, and we will gradually implement energy
recovery methods such as waste power generation, which ishighly regarded as a way to conserve fossil fuel resources. As
we orient toward this business position, we are now working
on the key issues of where and how to focus our management
resources going forward and how to maximize our strengths.

Corporate Governance
As has been stated many times, our value lies in the fact that ourbusiness contributes to the sustainability of society by recyclingrare resources and helps preserve the global environment,
and our strength lies in the fact that our business growth goes
hand-in-hand with solving social issues. To form effective
governance in line with these business principles, we haveendeavored to forge sound corporate governance. While thecompany's management history has emphasized the importanceof leadership characterized by agile decision-making, and while
we continue to recognize its importance and maintain a cultureof bold risk-taking even now, the current Board of Directors
seeks clarification of the rationale with respect to decisions thatare vital to management. It can be said that we have a wellestablished practice of carefully confirming the discretion ofmanagement and the potential risks involved in such decisions.
In 2015, with the introduction of the Company Audit Committee
System, we transformed into a company with an Audit andSupervisory Committee. We have also asked experts in various

To Our Stakeholders
We will continue to take a long-term approach towardenhancing our corporate value in a sustainable manner
while strengthening our trust-based relationship with allof our stakeholders. To this end, as we continue to improve
the performance of our operations in Japan, Asia, and North
America, we will make every effort to further strengthen
corporate governance, enhance information disclosures tobolster management transparency, help address issues facing
society such as global warming, coexist with local communities
as a corporate citizen, and generate rewarding employment
opportunities for a diverse range of people. We appreciate yourunderstanding of the purpose behind these efforts and ask foryour continued guidance and support.

ASAHI HOLDINGS

13

Value Creation Drivers and Business Models

Our Purpose

We are engaged in both the Precious Metals and Environmental Preservation
Businesses based on our purpose of being "Totally Committed to Protecting
the Natural Environment and Preserving Resources."
We aim to maximize the growth of both these business areas by practicing
efficient management and leveraging synergies.

[By business segment]
Environmental
Preservation
Business

9.6 %(18,566 million yen)

Revenue

192,442

Precious Metals
Businessmillion yen

90.4 %(A year-on-yearincrease of 16.8%)(173,875 million yen)

At a Glance

Totally Committed to Protecting
the Natural Environment andPreserving Resources

Through our precious metals recycling business, we offer high-quality products by utilizing salespeople with strong
IT expertise for customer-focused sales and high-precision analysis and recovery technologies.
Our North American refining business uses the refining business as a platform to provide financial services andmanufacture value-added products.
With our Environmental Preservation Business, we provide a one-stop solution through our nationwide network,
licenses, and salespeople with thorough expertise in waste materials.

s
l
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At a Glance

Salespeople

Precious Metals Business
Refining on a World-Class Scale

Precious Metals Recycling

North American Refining

Our business began with recycling silver from photographic
fixer. Today, we recycle scrap produced by various sectors
such as the electronics industry and dentistry into high-purity
precious metals. For more than half a century, we have been
providing precious metals produced through recycling, while
continually adapting to the changing times.

In North America, our refining operations raise the purity of raw
gold and silver received mainly from mining companies. We arealso using the refining business as a platform to diversify ourrevenue sources.

Revenue

113,755

144,795

173,875

Operating Profit

24,037(million yen)

26,596

s
r
e
v
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r
D
n
o
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t
a
e
r
C
e
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l
a
V

Our First BusinessHighly efficientprecious metals
recovery technology
By advancing andcombining both wet anddry refining technologies,
Asahi Holdings has
established effective
precious metals refining
methods that canbe applied to all raw
materials

15,914
2019

2020

2021

2019

2020

2021

[FY]

Our specialized, trained salespeople
make effective use of IT to conductcustomer-oriented sales by proposing
optimal solutions for customer needs

Licenses and collection,transport,
and processing facilities(network)
Utilizing the Group's network, our large
team of salespeople can provide a wide
range of solutions to meet customer
needs, from waste collection to transportand disposal. Our licenses cover all ofJapan, and we handle a wide variety of
waste types

Hazardous substanceprocessing,waste treatment,
and recycling
technology
We hold licenses forcollection, transportation, andintermediate treatment of
most types of industrial waste
and specially controlledindustrial waste, and oursystem enables proper andprompt disposal and recycling

Environmental Preservation Business

Precious Metals
Business

Helping to Create a Sustainable Global Environment

Proper Waste Disposal

Revenue

Operating Profit

20,716 19,981 18,566

4,355

2019

2019

2020

2021

(million yen)

3,833

3,738

2020

2021

[FY]

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This business began with the detoxifying of harmful substances contained in photographic effluent, and has since expanded to thedetoxification and proper disposal of various waste materials. Through M&A, companies with different areas of expertise have joined the
Asahi Holdings Group, thereby leveraging synergies to provide customers with a one-stop solution for a wide variety of needs.

Competitive
advantage

Environmental
Preservation Business
Competitive
Advantage

High-precision analysis

One-stop solution
for industrial waste

Highest-efficiency
collection and refinement

Small-quantity special
processing, high unit priceMarket hedge

M&A in the environmental
business area

Due to the dissolution of our Life and Health Business in FY 2019, Inter Central, Inc. was shifted to the Environmental Preservation Business category. The revenue and operating
profit figures for FY2019 reflect this change. Inter Central, Inc. was subsequently sold at the end of FY2020, but there was no reclassification of revenue and operating profit.

14

INTEGRATED REPORT 2022

ASAHI HOLDINGS

15

Overview of Asahi Holdings Value Creation Process
Over the years, we have managed to achieve both business growth and solutions to social issues in our mission
to be a leader in creating a circular economy that connects society to the environment. We strive to maximize thevalue created by our business activities and aim to position ourselves as a global company that pursues originality
and growth.

Total
capital

105.1
22.7

billionyen

Medium-Term
Investment
Plan

Salespeople
Highlyefficientprecious
metalsrecoverytechnology

P.15

Precious
MetalsBusinessbillion yen

Domestic Overseas

3810

High-precision
analysis

Employees

1,457
peopleIntellectual capital
Assay technology
Refining technology
Recyclingtechnology

Raw materials
Scraps containing
precious metals
Doré

Industrial waste

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130 people(OUTCOME)

Precious metal bullion● Creating aEnvironmental
Preservation
Business

Highest-efficiency
collection andrefinement

Small-quantity
special processing,high unit priceMarket hedge

M&A in theenvironmental
business area

In our precious metals
recycling business, we offer
high-quality products by
utilizing salespeople withstrong IT expertise forcustomer-focused sales andhigh-precision analysis andrecovery technologies.
Our North American refining
business uses the refining
business as a platform toprovide financial services
and manufacture valueadded products.

Shareholders andinvestors

One-stop solution
for industrial waste

In our Environmental
Preservation Business,
we provide a one-stop
solution through our
nationwide network,
licenses, and sales
personnel with thoroughexpertise in wastematerials.

8 Factors Supporting Value Creation P. 3
Our Purpose

The Asahi Way
Totally Committed toProtecting the Natural
Environment and Preserving
Resources

value over the
medium to long term●C
 ontinuous andstable shareholder
returns● Supply precious

Minted items
Bullion of various
precious metals
Proper industrial
waste disposal

Business
partners

metals in waysthat are friendly topeople, society, andthe environment● P roviding one-stop
solutions for waste
disposal● I mproving

Detoxification
Recycling products
Fermentation and composting,fuels and raw materials
for cement,
fire-proof bricks and paving
materials

Employees

workplace support
and job satisfaction● U tilization of diverse
human resources● C ontribution

Power generation

Local
communities

CO 2
Reduction effect fromprecious metals recycling

Natural capital

recycling-oriented
society● Effective use oflimited global
resources● I mprove corporate

Green
gold

Competitive
advantage

Competitive
advantage

Human capital

Technical specialists(OUTPUT)

Naturalenvironment

Production capital
Sites

Licenses andcollection,transport,
and processing
facilities(network)

Hazardous
substance
processing,waste treatment,
and recycling
technology

CreatedValue

438,181 t-CO 2>Emissions by the Asahi
Holdings Group

102,957 t-CO 2

Recycling of
precious
metalsproducts

throughparticipationin community
activities

Detoxification
andpropertreatmentof wastehtwoFinancial capital

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(INPUT)

Business
Activities

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CapitalInvestment

Basic Policies

To be a leader
in creating a circular
economy thatconnects society to theenvironment
Precious Metals
Business
Social value
Economic value

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Our Vision

P. 24

Effective use of resources
Stable, high profits
Contributing to the SDGs

Environmental
Preservation BusinessSocial value
Economic value

P. 30

Contributing to solving global
environmental problems

Sales leader in Japan
Contributing to the SDGs

1. R einforce theFoundation for
Global Growth
2. P romote New
Human Resource
Policies
3. S trengthenGroup Risk
Management
4. C ontribute to the
SDGs(A s of March 31, 2022)

16

INTEGRATED REPORT 2022

ASAHI HOLDINGS

17

Consolidated Financial/Non-Financial Highlights
Number of employees, percentage of womenin the workforce, and percentage of employees outside Japan

Operating profit / ROE(million yen)

192,442

Operatingprofit (million yen)

ROE (%)

25,126

Number of
employees

26,446

2,042

164,776
135,563

18,010110,41230.8

13,442
13.6

2018

2019

2021

2020

(FY)

2018

Income for the year attributable toowners of the parent

11.6

2021

2020

(FY)

93.0

114.07

2021

2020

(FY)

Total capital(million yen)

229,95842.3
160,272

2018

2020

2021

(FY)

2018

2019

9.0

9.0

2020

2021

(FY)

98.3

99.9

99.9

1,244.06

1,336.89

2019

Scope 1

Scope 2108.0
861.58

35.2

11.1

12.5

12.5

2018

2019

2020

7

2021

(FY)

Usage rate of Holidays for Refreshment* 2
(%)

2020

2021

(FY)

2018

98.2

99.7

99.6

2019

2020

2021

879.00

Scope 3

102.7

(FY)

Energy-derived CO 2 emissions

CO 2 emissions(yen)244,803

97,90367,804

2019298,387

30.1

1,457

125.12Equity ratio (%)

40.0

8

81.1

Equity attributable to owners of
the parent company per share

Total assets / Total capital /Equity ratio
Total assets(million yen)

2018

9
8

238.11

9,846

2019

2018

9.9

(yen)

326.9018,735

2018

1,510

23.1

Achievement rate for rest intervals ofat least 11 hours* 1

25,725

9,000

1,574

24.7

Percentage of female directors（％）

Number of directors

28.6

Basic earnings per share(million yen)

23.4

Percentage of employees
outside Japan

18.5

14.4

2019

21.2

Percentage of womenin the workforce

Number of directors andpercentage of female directors
d
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Revenue(1,000 tons CO2)

137.2
103.0

(1,000 tons CO2)

39.4

39.4

37.3

32.0

13.4

87.5

105,137

89.6

69,174

2019

2020

2021

(FY)

2018

2019

2020

2021

(FY)

2018

2019

2020

2021

(FY)

2018

2019

2020

2021

(FY)

*Calculations for Scope 3 emissions started in FY2021*O n April 1, 2021, a stock split was conducted with a ratio of two common shares for one. The basic earnings per share and equity attributable to owners of parent
per share have been calculated based on the assumption that the stock split was conducted at the beginning of FY2018.

*1 Scope: Group companies in Japan. We introduced a rest interval system in the second half of FY2018. Therefore, the figures for fiscal 2018 are based only on
Asahi Holdings, Inc. and Asahi Pretec Corp. in the second half.
*2 Scope: Group companies in Japan. In 2019, we introduced a Holidays for Refreshment system for group companies in Japan. Therefore, the FY2018 figures are
based only on Asahi Holdings, Inc. and Asahi Pretec Corp.

18

INTEGRATED REPORT 2022

ASAHI HOLDINGS

19

The Group's long-term vision is to be a leader in creating acircular economy that connects society to the environment.
The goals of the 9th Medium-Term Business Plan (April 2021 toMarch 2024) were devised using the process of "backcasting,"
or deciding what must be done in the present assumingthat the Group's vision is achieved in the future.
This strategy represents the first step towardrealizing our vision.

Overview of the 9th Medium-Term Business Plan

1

● Establish a sales
system that makes
efficient use of IT, andimprove market share

To be a leader in creatinga circular economy thatconnects society
to the environment● Establish a new
business model andgrow profits in the
North American
refining business

Performance Targetsof the 9th Medium-TermBusiness Plan
[Unit: billion yen]

(April 2021 to March 2024)

INTEGRATED REPORT 2022

FY2021Plan

FY2022Plan

FY2023
Plan

Revenue

190

200

210

OperatingprofitReturn on
equity [ROE]

26.0

24.0

27.5

18%

15%

16%

35%

38%

40%

Equity ratio● Leverage wide-areaand diverse networks● Give talented employees the opportunity to be promoted
to higher positions and work to revitalize the entire
organization● Pursue greening
along withdigitalization anddecarbonization

Promote diversity and inclusion● Create new value that promotes the growth of thecompany by developing workplaces that embrace diversity● Improve profitability
in terms of bothindustrial waste
treatment andmanagement● Support career advancement of women in the workforce
by increasing assistance for work-life balance

Increase hiring of seniors● Establish pay-for-performance in areas where theknowledge and experience of veteran employees can beutilized

Establish a framework to maintain a corporate brandtrusted as a global company, and create a global risk
management mechanism

Establish a Group risk management
department
Perform group-wide
management of compliancerisks along with detailed
risk management from aperspective independent ofbusiness segments

Provide opportunities for learning andchallenge-taking● Improve human resources development to foster people
who can take on global challenges and make great
strides

Strive to achievesustainable growth andglobalization

Strengthen Group Risk
Management

Establish a system
for further global
growth, including
contributing to the
SDGs

Strengthen risk management for the
North American business
Strengthen
credit risk
management
relating tobusiness
partners

Ensure all employees are compensatedbased on performance and abilities● Introduce clear, easy-to-understand qualification
requirements and determine evaluation andcompensation based on performance and abilities

Continue scrap and build strategy

3

Promote New Human
Resource Policies● Create opportunities for high-performing employees toplay an active role even after retirement age

Improve efficiency inJapan and promote
global expansion
strategy

The 9thMedium-TermBusiness Plan

Environmental
Preservation
Business2● Globally expand
through M&A

Backcasting

20

Precious Metals
Business● Boost costcompetitiveness byutilizing cuttingedge technology andexpertiseLong-Term Vision

Building a global company
that pursues originality
and growth

Reinforce the Foundation
for Global Growth

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Long-Term Vision and Medium-Term Business Plan

4

● Establish an internal venture capital system toallow employees to take on the challenge of productcommercialization and develop human resources who
can become future management leaders

Contribute to the SDGs
Effectively
utilizeresources

Enhanceprograms suchas those forencouraging
work-life balance● Expand the amounts ofprecious metals recycled
and industrial waste
properly treated, which
are our main businesses● Achieve FY2030 targets forthe percentage of managerial
positions held by women andthe percentage of employees
who have disabilities● Pursue climate change
action such as reviewing
power contracts for our
existing facilities andactively switching tohydrogen and electricvehicles● Enforce rest intervals andthe taking of Holidays for
Refreshment by all employees● Expand support for employeeswith family nursing care
responsibilities

Enhance the image of the Asahi
brand by further promoting
Responsible Precious Metals
Management, and by providing
precious metal products that
help protect human rights andthe environment

ASAHI HOLDINGS

21

Sustainability Strategy

Basic Policies

Financial Policies

The Group is expanding its business through aggressive investments towards growth as it
maintains a solid financial base. To secure the stable funds necessary for business expansion,
we strive to improve the corporate value of the entire Group by generating cash flow throughsustainable profit growth, improving capital efficiency, and strengthening financial governance.

Funding Needs and Financing

Diversifying funding sources to enhance costcompetitiveness

The Group's working capital needs are primarily for thepurchase of raw materials for manufacturing products in the
precious metal recycling business, and the purchase of precious
metal bullion for "advance trading" in the North American
refining business. Investment capital needs consist primarily of
capital investments for new businesses, expansion of capacity,and improving productivity at main plants in Japan and North
America. The company's policy is to proactively respond to
strategic funding needs for future growth while maintaining
both a stable financial base and improving capital efficiency.
Working capital and investment capital are primarily provided
by funds obtained from operating activities, and funds are raised
through loans from financial institutions and corporate bonds
as required.

In March 2021, we raised a total of US$201 million, primarily
for the expansion of our North American business, by executing
the first scheme in Japan whereby a U.S. subsidiary issued
U.S. dollar-denominated convertible bonds with the parent
company guarantee. In addition, we attained co-financing with
JBIC and private financial institutions for a total of US$117
million. Through diversification of financing, borrowing costs arebeing reduced, which has enhanced the competitiveness andprofitability of the refining business.
In Japan, we issued the first green bond ever in the domestic
non-ferrous metals industry in March 2020, raising 5 billion yen.
The eligibility of these green bonds has undergone third-party
evaluation by Rating and Investment Information, Inc., which
resulted in the highest R&I Green Bond Assessment rating of"GA1" being conferred.

Transactions that have a significant impact on our
financial indicators, but contain no credit risks orsoundness issues

Ever since acquiring its current North American business fromJohnson Matthey of the UK in 2015, the Group has expanded
its North American precious metals refining operations. In
recent years, the refining business has been used as a platform
for creating new products and services. One such service is"advance trading" transactions. In these types of transactions,once we receive raw materials from a customer, we return therefined bullion with interest at the customer's request without
waiting for the contractual delivery date. Because we procure
the bullion and make the advance trade using low-interest
loans from a financial institution, we benefit financially. This
results in a large amount of trade receivables and borrowings
being recorded on our financial statements, but because wereturn bullion after receiving raw materials in principle, there isno credit risk and virtually zero risk of bad debt. In addition, thefinancial statements will show a higher debt-to-equity ratio anda lower equity ratio. The equity ratio as of March 31, 2022 was
35.2%, but if we exclude our North American refining business,the equity ratio is 60.8%, indicating that the company is doing agood job maintaining its financial soundness.
Equity ratio

End of March 2022

35.2%

60.8%
INTEGRATED REPORT 2022

Borrowings
by means of“advance trading”

9th Medium-Term Business Plan:
Goals and Progress
Steadily continue strengthening financial base toachieve financial targets
In the 9th Medium-Term Business Plan that went into effectin April 2021, we aim to achieve an equity ratio of 40% and an
ROE of 16%. Through profit growth, we hope to expand ourequity capital and raise funds through direct financing such as
corporate bonds and commercial paper while keeping an eye onmarket trends.
Regarding our various investments toward growth, our policy
is to make investments without exceeding our operating cash
flow. Surplus funds will be used to repay loans. 22.7 billion yen
in total capital investment is planned for the three-year periodof the 9th Medium-Term Business Plan.

Investment Policies
Actively expanding investments that contribute tosolving environmental issues
The Group makes decisions on individual investment projects
by meticulously considering the potential for profit and growthin the business as well as synergies with existing businesses.
In addition to this, we are actively engaged in R&D from a
medium- to long-term perspective, energy conservation andenergy creation, promoting DX, introducing EVs, and making
other capital investments to solve environmental problems.

One of the basic policies of our 9th Medium-Term Business Plan is"contributing to the SDGs." Our Group is working to expand precious
metals recycling and proper disposal of industrial waste, as well as toenhance our work-life balance and diversity infrastructure.
In December 2021, we declared that we would achieve "carbon
neutrality by 2050" and endorsed the recommendations of the
Task Force on Climate-related Financial Disclosure (TCFD),
and we disclosed information in April 2022 in line with the TCFD
recommendations.
Moreover, to strengthen our sustainability promotion system, we
expanded the existing SDGs Promotion Committee and replaced it with
the Sustainability Committee (April 2022), which is overseen by the
Representative Director and President (CEO) and includes corporate
officers in charge of Business, Technology, and Administration units
as members. Every quarter, the Sustainability Committee discusses
sustainability-related strategies, plans, measures, risk management,
and monitoring. Important matters are also to be reported to theGroup Executive Committee.
In addition to reporting matters discussed by the Sustainability
Committee to the Board of Directors, effective governance is ensured
by having the Board of Directors pass resolutions on matters ofimport.
The risks and opportunities identified in the TCFD actions will bereported to the Board of Directors and the Sustainability Committee atleast once every year.

Materiality Identification Process

STEP 1

Continue to pay stable dividends, with a target payout
ratio of 40%
The Group's policy is to maintain a stable dividend payout
ratio of 40%, with no reduction in the current annual dividendlevel, all while ensuring sufficient internal reserves for capital
investment and M&A activities to support its growth strategy.

Board of Directors
Report/SubmitSTEP 2

Based on the idea that our business activities such as the Precious
Metals and Environmental Preservation Businesses themselves help
to achieve a sustainable society (sustainability), we have identified
the relationships between our businesses and the 17 goals and 169
themes of the SDGs in detail, as well as organizing them in terms ofboth risks and opportunities.

STEP 4

Decide priority SDG-related goals

All directors discussed the key goals and KPIs and determined theissues to be addressed by the Group.

ReportGroup Risk
Management
Department
ReportSecretariat of Sustainability
Committee (Corporate Planning &Communications Department)

Diversity & Inclusion
Working Group

Consolidated
subsidiaries
in Japan

Business
Units

Climate Change
Working Group

Consolidated
subsidiaries
outside Japan

Priority SDG-Related Goals andPriority Issues

Consider priority goals and KPIs

We held discussions with corporate officers of business units on
matters of high importance and formulated priority themes and KPI
proposals for the period through 2030.

Supervise/
DirectSustainability Committee

Begin investigating SDGs

Confirm the relevance of the SDGs to
our businessGroup Executive Committee

Chairperson: CEO Members: corporate officers of Business,
Technical, and Administration Units

We formed a cross-functional SDGs Promotion Team (at the time)and began to look into and gain an understanding of SDGs.

STEP 3
Basic Policy on Shareholder Returns

Solving
SocialIssuesBusiness
GrowthSustainability Promotion System

Resource Development andContribution to the SDGs

Excluding North
American business

22

Financial Results

Respond to funding needs while maintaining
a stable financial base and improving capital efficiency“Advance Trading” in the North American
Refining BusinessApproach to
Sustainability

With "Totally Committed to Protecting the Natural
Environment and Preserving Resources" as our Group's
common shared purpose, we are committed to making
effective use of resources and engaging in a wide range
of environmental preservation activities. Based on
the conviction that our business activities contributeto sustainability itself and that our business growth
will directly help us to address social issues, we haveestablished priority issues, themes, and targets, and areworking hard to achieve them.

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Building a Strong Financial Base to Support
Sustainable Growth

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Financial
Strategy

Priority
Goal 1

Expand Precious Metals
Recycling

Priority
Goal 2

Supply Precious Metals inWays That Are Friendly toPeople, Society, and theEnvironment

Priority
Goal 3

Expand Proper Industrial
Waste Disposal

Priority
Goal 4

Reduce CO 2 Emissions

Priority
Goal 5Enhance Work-Life Balance
and Employee Diversity

Priority
Goal 6

Encourage and Support
SDG-Related Activities

ASAHI HOLDINGS

23

Precious Metals

Introduction to Segments

PalladiumGold

Plating Treatment
SilverSince precious metal plating is an
excellent way to prevent corrosionand enhance electrical conductivity,
it is used in various applications
from industrial to decorative
products. Utilizing a proprietary
electrolytic precious metals recovery
system, we recover and recycle
the precious metals remaining inplating solutions. We also return therecovered materials to customers
in the form of a precious metalcompound of their request.

24

INTEGRATED REPORT 2022

SilverPlatinum

PalladiumGold-silver-palladium alloys are themain materials in dental prostheses
such as crowns and inlays, and thepercentage of precious metal content
varies by type. Customers suchas dental clinics and laboratories
provide us with waste containing
these metals and we recycle them.
We offer high-value recovery with
our own system for integrated
management of collection, assay,
and reporting.

(manufacturers, dismantlers, and brokers)
Discarded electronic substrates andprocessing scrap

CollectionGold(manufacturers)
Electronics / semiconductor manufacturing
equipment parts, etc.

2022

[FY]

Forecast

Plating Treatment(manufacturers)
Plating solutions

Assay report(precious metals content analysis)

Catalysts(dismantlers / brokers)
Unused and waste catalysts

ReturnDentistry(dental clinics / dental laboratories)
Removed crowns and processing waste

Jewelry(purchasers, manufacturers, and distributors)
Jewelry and processing waste

Jewelry
Palladium

2021

ResultE-Scrap

SilverPlatinum

Palladium

We collect and recycle precious
metals from jewelry and ornamentsthat are no longer needed as wellas precious metal scrap generated
at each stage of the manufacturing
process from purchasers,
manufacturers, and processors. In
addition to accurate analysis, weoffer high-quality precious metalbullion products, while also returning
raw materials to manufacturing andprocessing company customers.

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Dentistry
Platinum

2020

ResultWe have deployed manufacturing operations in Japan and elsewhere in Asia that enable the most efficient recovery of
precious metals and carry out optimal processing of recyclable materials depending on the different characteristics andadmixtures in the business fields where we collect materials. Furthermore, we accurately meet customer needs by fully
utilizing optimal methods and efficient refining facilities depending on the type of precious or rare metal.

Precision Cleaning

We strive to ensure the quality ofequipment used by customers intheir electronic component andsemiconductor manufacturing
processes by regularly and precisely
cleaning them. Customers entrust
us with their equipment parts, andwe perform stripping and recovery of
precious metals adhering to them. The
recovered precious metals are returnedto the customers upon request.

GoldRhodium

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Silver

24.0

15

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Gold

26.6

24.0

25

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Precision Cleaning

Platinum

Automobiles are equipped withcatalytic converters to detoxify
harmful substances in exhaustgas, and precious metals such as
palladium and platinum are used inthese devices. We use our originaltechnologies to recycle precious
metals from automotive, chemical,
and other catalysts.

Electronic substrates used in personal
computers, smartphones, and home
appliances contain gold, silver, andpalladium. We collect manufacturing
process scrap and electronic substrates
from used products. We then put themthrough various processes such as
crushing and sorting to recover andrecycle precious metals. Our precise
sampling and advanced analysis
techniques are just some of ourstrengths.

120

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Palladium

144.8

140

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Palladium

160

181.0

173.9

180

Collecting and Recycling Precious Metals

Catalysts
Silver(Billion yen)

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Gold

As geopolitical risks, increased resource costs,
and concerns about inflation continue to surface,the expectations with regard to precious metals
recycling have only become higher. There is also
increased interest in "supplying precious metals
in ways that are friendly to people, society,and the environment." The nature of recyclingmeans that it is impacted by production trends
and other factors in the industries that provide
the materials, but we have been seeing arise in materials collected in the jewelry andelectronics sectors.

■ Revenue ■ Operating Profit
■
■

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E-Scrap

Market Conditions

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The Group collects and recycles scrap containing precious
metals from various sectors.
By recovering and providing gold, silver, platinum,
palladium and other precious metals indispensable tomodern manufacturing, we are contributing to theeffective utilization of resources and the developmentof industry.

Introduction
to Segments

Introduction to Segments

Precious Metals Business

Precious metals
marketTrading companies
Manufacturers, etc.

Sale

Main Profit Drivers for the Precious Metals Recycling Business
The main profit drivers are stable refining fees and income from yield differentials (“free metal”).
Category

Profit Drivers
Refining fees

Precious metals
recycling

Yield differential(difference between actual yieldand contracted yield = “free metal”)

Impact on Profit● Refining fee income increases along with the amount of material collected.

● T he unit price for refining fees is higher for materials that require difficult pre-processing.

This means the average unit price rises along with the proportion of items that require difficult processing.

● T he volume of “free metal” expands when the actual yield climbs due to improvements in technicalcapabilities and processes.

● Income from “free metal” increases in line with rising market prices.

ASAHI HOLDINGS

25

Introduction to Segments

North American Refining BusinessWe have been expanding our precious metals recycling operations in Asia since 1994, focusing on dentistry

In North America, we mainly refine gold and silver raw materials produced by mining companies, and we are proud of ourand electronics waste. We have done this by developing business models tailored to local market conditions

refining volume, which is among the largest in the world. We also are striving to develop new services using our refining

while utilizing the technology we have developed in Japan. Furthermore, with the addition of the Asahi Refining

business as a platform, while responding to the diverse needs of our customers with financial services and high-value-

businesses to the Group in March 2015, we have expanded our operations to North America.

added products.

Incorporated: 2015
Location: Ontario, Canada
Number of employees: 111
Business line: Gold and silver
refining

Asahi Refining Florida LLC

Incorporated: 1994
Location: Penang, Malaysia
Number of employees: 8
Business line: Precious metals
recycling from electronicmaterials and jewelry

Incorporated: 2015
Location: Utah, USA
Number of employees: 120
Business line: Gold and silver
refining

Incorporated: 2019
Location: Florida, USA
Number of employees: 64
Business line: Gold and silver productprocessing

Normally, it takes about a weekfrom the arrival of raw
materials to the return of therecycled product. Asahi
Holdings also offers “advance
trading” to provide the recycled
product in a shorter timeframe. We are also meeting thevarious financing needs of ourcustomers by leveraging ourunique capacity to produce
large, stable quantities ofprecious metals products atworld-class refining facilities.

Refining Business

Downstream

Asahi Refining USA Inc.

Financialservices

Product return

ASAHI G&S SDN. BHD.

Upstream

Asahi Refining Canada Ltd.

Established: 1952
Incorporated: 1964
Location: Kobe City, Hyogo,
Japan
Number of employees: 972

Receipt of raw materials

Asahi Pretec Corp.

Incorporated: 2006
Location: Chungju, South Korea
Number of employees: 33
Business line: Precious metals recyclingfrom dental and electronics
waste

Customers (mining companies, etc.)

Asahi Pretec Korea Co., Ltd.

Carbontreatment

Activated carbon is used as an adsorbent
by mining companies to perform
preliminary separation of gold from goldore. We collect the used carbon for proper
processing. While difficult to process,activated carbon is a valuable material, andit can be used to adsorb harmful elements
such as mercury. We remove mercury
from the used activated carbon and thenrecover the remaining precious metals.

Introduction
to Segments

Global Expansion

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Introduction
to Segments

Precious Metals

Precious Metals Business

Green
gold

Minteditems

We are focusing on supplying high value-added products
such as minted items including coins and small bars, aswell as green gold produced from recycled metal.

Product return(As of March 31, 2022)

Main Revenue Drivers for the Refining Business in North America
Representative Examples ofNorth American Financial Services

Advance Trading

 rovides “advance trading” to shorten the●Ptime between receipt of raw materials andreturn of products
 arn “interest based on the number of days●Eof advance trading” from the customer by
accepting the return of products before thecontracted delivery date o risk of bad debts since advance trading is●Nmade after receipt of raw materials

26

INTEGRATED REPORT 2022

In addition to refining fees, which are a stable source of revenue, we are expanding related businesses by using refining asa platform, such as revenues from financial services and processed products.

Financial
institutions

Customers(1) Raw
materials

Category

Refining
business(3) Advancedelivery(2) Loan(4) Product (5) Repayment

Relatedbusinesses

Profit Drivers
Refining fees
Yield differential (difference between
actual yield and contracted yield =“free metal”)
Financial revenue (advance trading,etc.)
Value-added product revenue (minted
products, etc.)

Impact on Profit● Refining fee income increases along with the volume of incoming raw materials (doré).

● The unit fee cost does not change over the short-term because contracts are long-term.
● The volume of “free metal” expands when the actual yield climbs due to improvements intechnical capabilities and processes.

● Income from “free metal” increases in line with rising market prices.
● Income increases when interest rates rise in advance delivery contracts with mining companies.

Income increases when the period of advance delivery is extended.

● Income increases when metal procurement costs fall, and the interest rate spread expands.
● Income increases along with the market demand for value-added products.
● Income increases along with the brand value of our value-added products.

ASAHI HOLDINGS

27

R&D System

Introduction to Segments

Strengths and Responses to Potential Risks

Pursuing Original R&D
We conduct proprietary research and development
and analytical technology improvement in the fieldsof recycling of precious metals and rare metals anddetoxification and recycling of industrial waste.
We established the Technical Research Center inKobe High-Tech Park to serve as our R&D hub. We
are looking to take even greater strides forward as
a company that contributes to society by improving
quality and technical innovation.

Precious Metal Recycling Business
Strengths

Responses to Risks

Refining Business in North America
Strengths

Responses to Risks(1) Ability to analyze theprecious metal content ofrecycled materials(1) Allocating resources togrowing markets and new
sectors(1) The largest refinery inNorth America as ourrefining platform(1) Expansion of value-added
services based on ourrefining platform(2) A sales force of about 200
people all over the country
who are customer-focused
and well-versed in IT(2) Growing market share byutilizing proprietary systems
in sectors with shrinking
markets(2) Location close to client
mining companies(2) Avoiding dependence on
global supply chains(3) Production processing anddistribution managementthat has obtained RJC
certification and productquality that has obtained
LBMA and LPPM certification(3) Strengthening
competitiveness throughenhanced production
efficiency(3) Our Group's credit
worthiness and financing
capacity(4) Improved green gold sales

Introduction
to Segments

Technical Research Center

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Introduction
to Segments

Precious Metals

Precious Metals Business

R&D
We anticipate the needs of our customers and strive to create new products and business byapplying our large body of elemental technologies and developing new technologies.
● Technology for separating and refining precious and rare metals ● Environmental preservation
and resource recycling technology ● Precious metals molding and refining technology

Refining Technology
In addition to wet precious metals refining technology, which is particularly effective forrecycled material processing, the Group is developing dry precious metals refining technology
effective for the primary raw material processing it is performing in North America. By
advancing and combining both wet and dry refining technologies, we are creating effective
precious metals refining techniques for handling all kinds of raw materials.

Solving Social Issues through Business Activities

Social issues
relating to
the Precious Metals
Business

Release Technology
In order to collect precious metals adhered to the surfaces of parts and jigs, etc., used in
the manufacture of electronic components and semiconductors, the Group is developing
technology to chemically and physically exfoliate precious metals safely and reliably without
damaging the parts and jigs.

Assay
The Asahi Holdings Group’s core assay function supports a diverse range of corporate activities
using the latest assay equipment and high-level assay technology. In addition, we play animportant role in maintaining and enhancing trust with the Group’s customers.
● Development of new assay technology ● Technical guidance for assay groups at each plantand sales office ● Purity assay of precious metals products ● Environmental analysis of issues
such as plant wastewater discharges ● Environmental measurement certification

Assay Technology
The Group is developing assay techniques using X-ray and inductively coupled plasma (ICP)
optical emission spectrometry with the aim of conducting rapid and accurate transactions withcustomers. We are upgrading our precious metals analysis at sites in and outside of Japan,
including Asahi Refining.

Engineering
Using cutting-edge technology, experts from each sector design, produce, construct, andprovide maintenance of facilities at subsidiaries in and outside Japan, helping to support safe
and stable operation of the facilities.
● Design, production, construction, and maintenance of facilities and buildings● Maintenance control of existing facilities● Installation and maintenance of precious metals collection facilities for our customers● Support for installation of robotics and IoT for equipment

28

INTEGRATED REPORT 2022

●Depletion of precious
metal resources●Environmental destruction
during mining●Human rights and labor issues
related to mining●Money laundering and terrorism financing risk

Contributing to the SDGs
Leveraging precious metals recycling toturn consumption into production,transforming waste into precious metal
resources

Contributing to industrial sustainability
by continually improving our highly
efficient and high-quality precious metals
recycling technologies

Helping to preserve terrestrial
ecosystems, forests, and otherland-based resources by expanding
precious metals recycling, instead ofminingPromoting peaceful, inclusive societies
by practicing responsible precious
metals management and transparent
procurement

Contributing to sustainable water use by practicing precious metals recycling without contaminantdischarge
Helping to protect human rights and prevent child labor in high-risk regions such as conflict zones
Helping to prevent climate change by supplying recycled resources with low CO 2 emissions
Promoting high levels of sustainability by collaborating with other companies

ASAHI HOLDINGS

29

Environmental Preservation
Introduction to Segments

Waste Reagents

Waste Oil and Sludge

Medical Waste■ Revenue ■ Operating Profit■■

Market Conditions(Billion yen)

Emissions from industrial waste havegenerally remained at a steady level inrecent years. The market is said to be
worth as much as five trillion yen, but evenmajor players in the industry have notsecured a large share of the market, which
underscores how many companies there
are in the market. Businesses are expected
to evolve as society as a whole transitions
towards carbon neutrality and digitaltransformation continues to spread.

25
20

20.0

19.0

18.6

15
10

5
4

3.8

3.7

3.5

3
2020

2021

2022

ResultResultForecast[FY]

Business Models for the Environmental Preservation BusinessAsahi Holdings offers proper processing of waste from various industries, including detoxification and recycling of difficultto-handle materials. In addition, we are developing consulting sales across Japan based on our multiple business models.

Business partners (plants, laboratories, hospitals, government offices, universities, high schools, etc.)

Introduction
to Segments

The companies of the Asahi Holdings Group meet the diverse needs oftheir customers by leveraging the unique technologies they have developed
over the decades in their respective sectors to detoxify
and properly dispose of various waste materials.
As experts in waste disposal, we are helping to solve global environmental
problems and playing a key role in building sustainable societies.

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Introduction to Segments

Environmental Preservation
Business

Customer consultation
The Group collects reagents for disposal
from educational and research institutions.
They are packed one by one for collection
after confirming that they are stored inproper collection containers. Chemical
content analysis is performed for any
unidentified (poorly labeled) reagents todetermine the appropriate processing method
before disposal. Even small quantities of
miscellaneous waste that are difficult tohandle are also processed properly.

Based on analysis results, waste oils
from plants are mixed and adjusted toachieve the optimal composition, before
being recycled as alternative fuels.
Meanwhile, sludge is recycled as raw
material for cement after adjusting thecontent and moisture and then kneading.
The aim is to ensure and maintain thequality of all recycled materials.

Wood Waste

Waste Fire-Proof Bricks

Large amounts of scrap wood are
generated by the demolition of buildings
and other sites. We collect and shred thismaterial into wood chips, which is used
for fueling biomass power generation
plants or for making particleboard.

30

INTEGRATED REPORT 2022

Fire-proof bricks are used as
refractories to line glass furnaces,
kilns, and incinerators. Waste fire-proof
bricks generated by the demolishingof such facilities and periodic repair
work are collected and carefully sorted.
Recyclable items are reused as paving
materials and fire-proof bricks.

We collect infectious waste and otherwaste materials generated by medical
institutions. The collected medical waste
is incinerated at our plant, and thewaste residue is finally disposed of at acontrolled final disposal site.

Providing a wide range of solutions that meet customer needs,
from waste collection to transport and disposal

Waste Acids, Alkalis, and Sludge(Inorganic/Organic)

Waste acids, alkalis, and sludge are
generated by a wide range of industries,
and they have a diverse range ofproperties, including inorganic andorganic. Liquid waste is collected by avacuum truck, subjected to neutralizationand dewatering processes, then treatedwith microbes before being discharged
into the public sewer system. The
residual sludge is recycled as a raw
material for refining or composting, etc.

Collection, transport, andproper processing

Consulting

Effluent, waste oil, sludge, waste reagents,

Proposals for best transportation andmedical waste, waste fire-proof bricks, waste

disposal methods for proper disposal

wood, etc.

ASAHI HOLDINGS

31

Introduction
to Segments

Environmental Preservation

Environmental Preservation Business

Introduction to Segments

Providing a One-Stop Solution

Group Network

The Asahi Holdings Group provides one-stop support for all inquiries regarding industrial waste disposal. We provide a wide

We have a system for swift and proper waste disposal based on the necessary licenses for collection, transportation,

range of solutions from collection and transportation to disposal through an experienced sales team that extends acrossand intermediate treatment of most types of industrial waste and specially controlled industrial waste. In addition, ourour group network. We hold relevant licenses from authorities across Japan and can handle a wide variety of materials.

outstanding technology for detoxifying various waste materials offers optimal solutions for environmental preservation.

One-stop
Introduction
to Segments

Disposal
Kobe Plant

Waste
generator

Consultation●Detoxification of liquid waste
and sludge●Oil-water separation of wasteoilGroup sales
representative
Group plant
Arrangements

Industrial waste

Partner

Kawaguchi Plant

Group plant●Neutralization and dewatering
process of inorganic liquid
waste

Kitakyushu Plant/
Hibiki Plant●I ncineration of various
types of waste●S ludge recycling●W aste plastic crushing

Ibaraki Plant●Fermentation and compostingof organic sludge and animal/
plant waste

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Collection andtransportation

Partner plant

Fuji Rozai

Ijuin Plant
Taniyama Rinkai Plant●Incineration of various types ofwaste●Detoxification of liquid waste

Industrial Waste Disposal and Recycling Processes

Samukawa Plant

Collection and transportation■Industrial waste
18 articles including waste
acids, waste alkalis, waste oil,sludge, waste plastics, etc.
■Specially controlledindustrial waste
17 articles of hazardous waste,such as waste acids, waste
alkalis, waste oil, and sludge,
which contain specified toxic
substances, and infectious
wasteIntermediate treatment

Recycling■Neutralization■Incineration■Condensation andprecipitation

Landfill■Dewatering■Cyanide decomposition■Oil-water separation■Neutralization, mixing■Kneading■Concreting■Fermentation andcomposting■Grading

Incineration facility, Asahi Pretec Kitakyushu Plant

32

INTEGRATED REPORT 2022

●Concreting processing for burnt
residues, dust, and sludge
generated by incinerators, etc.

Totsuka Plant●Neutralization and dewatering
processing of organic liquid
waste

Licenses Acquired by the Group (as of June 1, 2022)
Waste oil recycling facility, Asahi Pretec Yokohama
Plant●Regular maintenanceand demolition
work for glass
manufacturingkilns and waste
incinerators

Yokohama Plant●Recycling of sludge, waste oil, andwood chips●Sorting, recycling of other waste(A s of June 1, 2022)

Industrial waste collection andtransportation license

All prefectures, 9 government ordinance cities and core cities

Industrial waste disposal license

10 prefectures, 6 government ordinance cities and core cities

Specially controlled industrial waste
collection and transportation license

All prefectures, 9 government ordinance cities and core cities

Specially controlled industrial waste
disposal license

10 prefectures, 6 government ordinance cities and core cities

General waste

Kitakyushu City/Kagoshima CityASAHI HOLDINGS

33

Introduction to Segments

Generating Power from Waste

Strengths and Responses to Potential Risks

Power
generation

TurbineExhaust gas
Smokestacktreatment equipment

Boiler(1) Nationwide network (possession of licenses forcollection and transportation of industrial waste in all
47 prefectures in Japan)(1) Further expansion of company facilities, including
the construction of processing facilities in the Kanto
region, where demand is concentrated(2) A sales force of approximately 150 people well-versed
in waste treatment and facilities(2) Expanding consulting sales by leveraging our wealthof expertise(3) A one-stop solution for industrial waste that utilizes
our own facilities and those of our partners(3) Further promotion of businesses that contribute todecarbonization DX by taking a flexible approach toincorporating changes that push society toward carbon
neutrality

Solving Social Issues through Business Activities
Social issues
relating to
the Environmental
Preservation
Business

Waste

Garbage pit

Responses to Risks(4) The technical capability to handle highly complex
materials, such as chemicals with unknown contentsPowergenerator

Garbage craneStrengths

Incineration ash

Introduction
to Segments

Waste-to-energy is a power generation method that uses the heat generated from waste incineration. It produces hightemperatures and high-pressure steam to rotate turbines. By taking advantage of the energy released during waste
incineration to produce electricity rather than simply incinerating the waste, the Group can reduce the amount of fuel used,
thereby reducing CO2 emissions. The Group constructed a waste-to-energy power plant in the city of Kitakyushu.
A portion of the construction funds were covered by the issuance of green bonds, which can only be used for projects that
benefit the environment. The eligibility of these green bonds has undergone third-party evaluation by Rating and Investment
Information, Inc. (R&I), which resulted in the highest R&I Green Bond Assessment rating of "GA1" being conferred. We willcontinue our efforts to properly dispose of waste and reduce CO2 emissions as we transition to a decarbonized society.

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Introduction
to Segments

Environmental Preservation

Environmental Preservation Business● Contamination by hazardous waste● Impact on land and ocean ecosystems● Pollution of water resources

Digital Transformation in the Environmental Preservation Business
The Group will leverage its industry-leading experience to provide a digital platform for solving issues in the industrial
waste industry. Digital technology streamlines operations for businesses, from generation to treatment of industrial waste,
allowing for waste-free business collaboration based on the electronic manifest. Through our digital platform, we willcontribute to the creation of a sustainable society by streamlining operations and business collaboration, as well as making
proper waste management easier.

Decarbonization

Electronic manifest
automation
Three-company workflow●

CO2 emission calculations/crediting

Collection
management- Collection requests- JWNET coordination(issuing slips)

Company ratings

Order management- Order reception, collection requests,
carry-in requests- JWNET coordination(agent slip issuance, transport reports,
section 2 transport reports)●

Waste generator
・On-site checks,
administrative
reports

Collection and transport provider
・Dispatch planning,
driver coordination,route information,
billing management,
administrative reports

Realizing a sustainable society byrecycling and detoxifying waste

Ensuring the sustainability of water
resources by detoxifying discharge
such as waste acids and alkalis

Preventing marine pollution byproperly treating liquid and plastic
waste

Preventing pollution of land
environments by detoxifying waste,
and extending the lifespan of final
disposal sites by promoting
recycling

Advancing technological innovationfrom the standpoint of further
improving efficiency in utilizing
resources for various waste products,
and promoting global sustainability

Achieving sustainable cities andother communities by properly
managing waste

Business optimization

Carry-in management- Carry-in registration,
carry-in approval- JWNET coordination(disposal reports, secondary
manifest submissions)Electronic contracts

Compliance checks

Operational efficiency●

Contributing to the SDGs

JWNET

Disposal dealer
・Billing
management,
administrative
reports

Helping to prevent climate change by reducing CO 2 emissions from waste-to-energy power
generation
Promoting high levels of sustainability by collaborating with other companies

Primary manifest

34

INTEGRATED REPORT 2022

ASAHI HOLDINGS

35

FocusAsahi Holdings Materiality

Issues That Asahi Holdings Must Address
１ Expand Precious Metals Recycling

410 tons in FY2030 (1.5 times FY2015)
Effective reduction of CO2: 1.465 million tons in FY2030 (1.5 times FY2015)

Goals Total amount of recycled precious metals:

2

Supply Precious Metals in Ways That Are Friendly to People, Society,and the Environment

Business materiality

We will contribute to responsible managementof precious metals by expanding the supply of
precious metal products while protecting the environment andhuman rights. We will use precious metal-containing scrap andraw materials free from conflict minerals.

3

P38,
P41

P38,
P46-47P39

500,000 tons in FY2030 (1.6 times FY2015)

Reduce CO2 Emissions
We will work to reduce CO2 emissions
group-wide by implementing energy
saving activities at each site, switching
to next-generation vehicles, andswitching to low CO2 emission power plans.

To further promote "Responsible Precious Metals Management," the Bando Plant has enhanced the traceabilityof each line.
In addition, NOx gas generated at the plant is absorbed into the liquid, and nitric acid is produced through achemical reaction. The nitric acid produced is reused during the acid treatment process, which cuts costs andreduces the environmental impact.

Reduce CO 2 Emissions

Goals Amount of properly disposed industrial waste:

4

At the Bando Plant, we have successfully reduced lead times by about 10% compared to conventional methods
by introducing state-of-the-art equipment, automating operations that were previously done manually, andreviewing our production process. As a result, it became possible to increase the amount of precious metals
being recycled even if throughput remains the same as before.

Supply Precious Metals in Ways That Are Friendly to People,
Society, and the Environment

Expand Proper Industrial Waste Disposal
We will strive to ensure proper treatmentof waste as a waste disposal expert andwork to help build a recycling-oriented
society.

Expand Precious Metals Recycling

The Bando Plant has implemented the following initiatives to reduce CO2 emissions.
● By using high-efficiency air conditioning equipment and highly insulated walls throughout the plant, as
well as utilizing solar power, the building received the highest rating of 5 stars under the Ministry of Land,
Infrastructure, Transport and Tourism's Building-Housing Energy-efficiency Labeling System (BELS), in
addition to ZEB Ready certification.
● The finishing processes for products that had previously been carried out at the Technical Research Center inKobe were consolidated. This has cut down on transportation between sites.
● We reviewed the manufacturing process and made efforts to reduce the amount of chemicals used.

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We will expand our precious metals
recycling globally to promote more
effective use of limited resources.

In April 2022, the Asahi Pretec Bando Plant, one of our priority sites for capital investment as laidout in The 9th Medium-Term Business Plan, began operations. This plant is the largest precious
metals recycling plant in Asia and is outfitted with the latest technology and automated equipment
to improve productivity and operational efficiency. The Saitama Plant, which has handled scrap fromthe dentistry and jewelry sectors, and the functions of the Manufacturing Section of the TechnicalResearch Center, which handles the final products, have been consolidated at the Bando Plant,
enabling one-stop production from the receipt of raw materials to the commercialization of products.
At the Bando Plant, we have made a number of innovations based on our materiality.

P39,
P41-43

Goals Energy-derived CO2 emissions:-50% in FY2030 (compared to FY2015)

5
Human resource development
and contribution to the SDGs

36

Enhance Work-Life Balance and Employee Diversity
We will strive to enhance job satisfaction
by improving the system to help diverse
human resources to succeed within theGroup. This will be done by reforming
working styles, implementing health and productivity
management, and promoting diversity.

P45

100% every year
Usage rate of Holidays for Refreshment (three consecutive days or more): 100% every year
Percentage of women in managerial positions to all female employees: Equal to men by the end of FY2030
Percentage of employees with disabilities: At least 2.5% by the end of FY2030

Goals Achievement rate for rest intervals of at least 11 hours:

6

Encourage and Support SDG-Related Activities
We will encourage and support employee activities outside theGroup’s main business areas that contribute to SDGs
achievement, including individual and group volunteer activities.
This initiative is called “Asahi Holdings SDGs Activities.”

INTEGRATED REPORT 2022

P48

ASAHI HOLDINGS37

ENVIRONMENTESG Initiatives: Environment

Environmental Initiatives of the Asahi Holdings GroupThe Asahi Holdings Group strives to ensure that its business activities contribute tohealthy cyclical use of materials to protect the global environment.

Recycling
Expand Precious Metals
Recycling
We will expand our precious metals recycling
globally to promote more effective use of limited
resources.

Precious metal bullion

Recycling

216t

Amount of precious metals
recycled in FY2021

Products

Raw materials for recycling

OUTCOME
Fermented compost,
metal raw materials,
fuels and raw
materials for cement,
fire-proof brick andpaving materials, andwood chips

Industrial waste

Priority SDG-Related Goal

The precious metals we supply are certified to meetinternational standards and address the concernsof people, society, and the environment. Goingforward, we will continue our business activities
and initiatives with even greater consideration forethical, social, and environmental issues, and fulfill
our responsibilities by supplying precious metals.

Asahi
Gro

INPUT

Holdings
up

Products

million kWh/year

Kerosene324

kL/yearGasoline

PlantsBusinesssites,
research labs,
etc.

22,847t855

kL/year38

million m3/year

Up compared to the previous year

LPG

32

2.64

Down compared to the previous yeart/yearINTEGRATED REPORT 2022

All figures are for FY2021

Sludge89,00015,000t/yearOther (waste reagents, waste plastic, etc.)

98,000t/yearTotal

Chemicals

17,278t
Water

352,948m3

OUTPUT
102,957t
CO2

Priority SDG-Related Goal

Reduce CO2 Emissions
By FY2030, we aim to reduce energy-derived CO2
emissions by 50% compared to FY2015.

235,615m3

Light oil

Urban gast/yearWaste

kL/yearkL/year85,000Glass and ceramic wastet/yearEffluent

3,003

Liquid waste

21,000 308,000
t/yearHeavy oil765

Amounts of properly disposed industrial
waste FY2021 resultst/yearEnergy Sources

45.71

We will strive to ensure proper treatment of waste
as a waste disposal expert and work to help build a
recycling-oriented society.

Waste oil

EnergyElectricity

Expand Proper Industrial
Waste Disposal

E NV I R O NM E NT

Supply Precious Metals in Ways
That Are Friendly to People, Society,and the Environment

Recycling

Priority SDG-Related Goal

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Priority SDG-Related Goal[

Rate of reduction forenergy-derived CO2 emissions
FY2021 results

]

27

%
reductioncompared to FY2015

ASAHI HOLDINGS

39

E NVIRONMENTESG Initiatives: Environment
Priority SDG-Related Goal

Environmental Management

Climate Change Initiatives

ISO 14001 Certification

Climate change is a challenge shared by all humankind and is considered one of our business priorities. To make asustainable society a reality, we will continue to make contributions through our business activities and reduce ourown CO2 emissions.

Environmental Management StructureManagement
General Internal
Auditors

CO 2 Emission Trends■Energy-derived CO2 emissions (in Japan)

8.6

41.0

40

Environment Preservation
Administrator

1.7

Environmental Management Promotion System

Promoting Green Purchasing
The Group strives to solve serious environmental problems. This includes climate change, which is caused by emissions from mass production,
mass consumption, and mass disposal. To help build a sustainable society and protect the global environment, we have established guidelines
for green purchasing that comply with Japan's Act on Promotion of Procurement of Eco-Friendly Goods and Services by the State and Other
Entities (Green Purchasing Law), which encourages the use of products and services that help reduce environmental impact.

20

0Going forward, the Group will continue to actively pursue green purchasing.
We will carefully conserve limited resources and reduce waste generation,
thereby helping to build a recycling-oriented economic system.

22.3

2015

32.0
2.1

62.4

15.2

2020

2021

[FY]

In FY2021, the Group's total CO2 emissions were up approximately 4% from FY2015. This does not include the emissions
attributed to one site in Japan and one outside Japan that joined the Group after the base year. Energy-derived CO2 emissions
remained at about the same level overseas, but in Japan, they were reduced due to consumption of high-efficiency selfgenerated power using waste to energy facility as well as a review of each site's electricity contract plans. The result wasan overall reduction of 27%. On the other hand, non-energy-derived CO2 emissions generated through industrial waste
incineration were up approximately 29% from FY2015, but the lifespan of final disposal sites was extended by incinerating
waste plastic and drastically reducing its volume.
If we look at the CO2 emissions above by Scope, Scope 1 emissions account for 89,600 tons of CO2, and Scope 2 emissions
account for 13,400 tons of CO2. Scope 3 emissions account for 137,200 tons of CO2.
Scope of data
Headquarters, sites, sales offices and plants in Japan, as well as Group companies* and overseas subsidiaries* (calculation period: April to March)*The data pertains to consolidated subsidiaries as of March 31, 2022. Data for deconsolidated subsidiaries has been subtracted retroactively, while data for subsidiaries thatwere previously non-consolidated has been added retroactively, going back to the fiscal year when the subsidiary became consolidated.
Calculation method
Energy-derived emissions: Calculated based on the amounts of electricity and fuel consumed at each site (emissions in Japan calculated based on the Act on Promotion of
Global Warming Countermeasures and the Act on the Rational Use of Energy)
Non-energy-derived emissions: Calculated based on the amount of industrial waste incineration.

CO2 Emissions Reduction from Precious Metals Recycling

Effect of reducing emissions by precious metal recycling 438,000 t-CO2 >emissions
by the Asahi Holdings Group 103,000 t-CO 2 (Scope1, Scope 2)
Precious metals recycling is considered to have a lower environmental impact than producing new precious metals from virgin mining. For example, in terms of CO2 emissions, it is said to produce about one-tenth the emissions in the case of gold. If
this were applied to our precious metals recycling volume, this would result in an indirect reduction of 438,000 t-CO2, morethan four times our Group's emissions. In addition to continuing its own efforts to reduce emissions, the Group will continue
to help reduce CO2 through precious metals recycling. (The CO2 emissions reduction figure does not indicate the level of emissions directly reduced by the Group.)(t-CO 2)Emissions factors used for
calculation

Approximately
one-tenth

Contributing to Biodiversity

INTEGRATED REPORT 2022

20.8

2019

(Base year)*PEFC: Programme for the Endorsement of Forest Certification

The Group recognizes that biodiversity is essential for a sustainable society. We contribute to the preservation of ecosystems, aquatic
environments and oceans by providing recycled precious metals and proper treatment of industrial waste, which includes thedetoxification of waste liquids.

64.7

15.2

14.8

25.4

Recommended products(1)Products contributing to forest protection approved by the Programme for
the Endorsement of Forest Certification (PEFC)(2)Products that are certified by the Japan Environmental Association for their
low environmental impact and usefulness for environmental conservation(3)Products that meet the criteria for specific procured products under theGreen Purchasing Law(4)Products listed as eco-friendly by the Green Purchasing Network

15.3

37.3
1.4

E NV I R O NM E NT

Every year we develop company-wide Environmental Goals based on our Environmental Policy, which sets out our environmental
preservation philosophy. According to the above-established purposes and goals, each ISO 14001-certified site in Japan develops its own
Annual Environmental Goals and implements environmental preservation activities closely related to their business tasks. In addition, theEnvironment Committee of each site deliberates on such matters as compliance with environmental laws and regulations, revisions ofplans and environmental education, and provides reports to management. While the ISO Office controls the environmental management
system (EMS), an environmental preservation administrator is also assigned for each site in order to ensure thorough implementation ofenvironmental initiatives.

67.3

48.4

Environment
Committee
Departments

39.4

15.6

Supervisors

Internal Auditors

ISO 14001 certificate

70.9

60

ISO Office

Supervisors■Energy-derived CO2 emissions (Group basis for 2015 onward)■Non-energy-derived CO2 emissions (new incinerators)(1,000 tons CO 2)

General Environment
Committee

Supervisors■Energy-derived CO2 emissions (outside Japan)■Non-energy-derived CO2 emissions (existing incinerators)

Chief Environment
Control Manager

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In August 2018, we obtained ISO 14001 certification for our sites inJapan, including those at subsidiaries. As of March 31, 2022, we haveachieved certification for 31 sites at 4 companies. Going forward, we
will continue to focus on maintenance and improvement activities
with an emphasis on extending certification to all sites.

40

Reduce CO2 Emissions

Emissions fromrefining mined raw
material

Emissions fromrecycling

Refining
mined rawmaterial

Gold: 12,621 kg of CO2 /kg of gold
Silver: 95 kg of CO2 /kg of silver
Platinum / Palladium:
9,297kg of CO2 /kg of palladium

Recycling

Gold: 1,256 kg of CO2/kg of
gold
Silver: 22 kg of CO2/kg ofsilverPlatinum / Palladium:658 kg of CO2/kg of palladium

Reference: Calculated from “Life Cycle Assessment
Data for Computer Products, Mobile
Phones and Mixed Waste [homepage
on the internet], United States
Environmental Protection Agency

Environmental benefit of precious metals recycling
When CO2 savings are expressed as the amount ofgreenhouse gases absorbed by forests, it is equal to18,411hectares of forest

Emissions
reduction
benefit438

thousandtons-CO2(an area one-third the size of Lake Biwa)

Note: Calculation was based on the assumption that one cedar
tree absorbs 14 kg of CO2 annually (Source: Forestry
Agency of Japan), and 1,700 cedar trees are planted in anarea of one ha

ASAHI HOLDINGS

41

E NVIRONMENTESG Initiatives: Environment

Response to Recommendations by the Task Force on
Climate-related Financial Disclosures (TCFD)
Expressed Endorsement of the TCFD and Strengthening the Governance System
In December 2021, we expressed our endorsement for the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD) and established a cross-company team for TCFD consisting of the Business Unit, Technical Unit, andAdministration Unit in order to identify risks and opportunities related to climate change and understand the medium- to longterm impact of climate change on our business, and have considered relevant countermeasures. We have also strengthened our
Details on P23
Sustainability Promotion System.
The risks and opportunities identified in the TCFD actions will be reported to the Board of Directors and the Sustainability
Committee at least once every year.

Metrics and Targets● Reduce energy-derived CO2 emissions, such as electricity and gasoline, by 50%(compared to FY2015) by FY2030

We extracted risks and opportunities relevant to climate change that will affect our Precious Metals Business (domestic and North
American businesses) and Environmental Preservation Business in 2030. We qualitatively assessed them on three levels: "Large,""Medium," and "Small." At that time, we also considered the further impact of climate change from 2030 to 2050. As a result, "Policy and Legal," "Market," "Technology," etc. were identified.
Item
Transition
risks
Physicalrisks

Contents

1.5℃

-

Large

・Increased costs due to the application ofcarbon pricing (including carbon tax)

Acute・Intensifying natural disasters, such as
cyclones or floods, causing damage
to the facility and stopping long-term
operation-

・Recycled metals with relatively low CO2
emissions will be highly regarded andincrease in competitiveness with theapplication of carbon pricing
・Compliance with regulations andenhancing reporting of CO2 emissions

-

2050

Measures・Switching to CO 2 free power, replacing gasoline cars
by EVs and so on to achieve CO 2 reduction targets for
FY2030(4℃)

・E xpanding BCM at plants that are expected to be impacted
based on hazard maps
・Selecting disaster-resistant locations and implementing
measures against disasters upon large-scale capital
investment

Large・Strengthening value-added sales of recycled metals
utilizing traceability
・Strengthening consulting sales that add value, such as
CO 2 emissions analysis
・E xpanding business by supporting companies thatstruggle to comply with regulations

Market・Increase in recycling demand and target
products-

Large

・E xpanding consulting sales in the sector of materials
and chemical recycling
・Handling of low-grade scrap and expanding metals thatare handledTechnology

・Expanding the incentive to aim foraccelerating the development of technologies
that contribute to decarbonization such ashydrogen, and early commercialization-

Medium・Further promoting the utilization of hydrogen withsurplus power, etc.

Recommended
Disclosures

Status of Efforts / Action Policies

Governance・Deliberating on climate change issues at the management level of the Sustainability Committee, which is chaired by theCEO, and which consists of directors from the Business Unit, Technical Unit, and Administration Unit・E stablishing the Climate Change Working Group under the Sustainability Committee to promote measures for climatechange・Building a system to supervise the matters discussed by the Sustainability Committee under the Board of Directors

Strategy・C onducting scenario analysis of risks and opportunities related to short-, medium-, and long-term climate change at 4°C
and 1.5°C・Setting "Reduction of CO 2 emissions" as one of our business materiality themes

Risk Management

Metrics and Targets

・Reporting the progress of measures on risks and targets extracted from scenario analysis, etc. to the Sustainability
Committee and the Board of Directors on a regular basis
・Incorporating the reported matters into the overall group's risk management system by reporting it to the Group Risk
Management Department

E NV I R O NM E NT

Policies
and
Legal

Policies
and
LegalTransition
risks

2030
4℃

In order to achieve this target, we are moving forward with switching to CO 2 free electricity, reducing fuel usage, andmaking our business offices ZEBs (Zero Energy Buildings).
We have also declared that we will aim for carbon neutrality in FY2050 (targets are Scope 1 and Scope 2).
Although we recycle industrial waste that can be recycled through our Environmental Preservation Business, it is also
true that there are some things that must be incinerated to ensure proper disposal, such as reduction and detoxification.
Therefore, we will first focus on achieving our energy-derived CO 2 emissions reduction target.

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Extraction of Risks and Opportunities

Opportunities

The Climate Change Working Group will compile the status of responses to risks and opportunities related to climate change and CO 2
emissions. The Sustainability Committee will monitor and evaluate them each year. The Board of Directors will also be informed of
the contents for supervision and direction. Also, by reporting it to the Group Risk Management Department, it will be reflected in theoverall group risk management.

One of our business materiality themes is to reduce CO2 emissions. Accordingly, we have set the following targets:

Strategy

Risk

Risk Management

・The Group has already set a target of reducing energy-derived CO2 emissions by 50% from the FY2015 level by 2030, and it has
already declared that it will achieve carbon neutrality in 2050 (Scope 1 and Scope 2)
・FY2021 reduction in energy-derived CO2 emissions (-27% compared to FY2015)
For details about Scope 1 - 3 emissions, see P41

Summary of Scenarios
In the next place, we conducted a scenario analysis to investigate the impact on the business. We adopted two scenarios. One is thatthe global average temperature is expected to increase by around 4°C by 2100, and the other is that the global average temperature is
expected to increase by 1.5°C by 2100, compared to that before the industrial revolution. The analysis was based on the World Energy
Outlook 2021 by the International Energy Agency (IEA), the reports by the Intergovernmental Panel on Climate Change (IPCC), andother materials published by the Japanese government.

Results of Scenario Analysis
The 4°C scenario is a world where the current situation continues on, and we found that there would be little impact as of 2030. On
the other hand, as we move toward 2050, we anticipate an increase in physical risk: the intensification of natural disasters such as
cyclones or floods caused by abnormal weather. In addition to formulating business continuity management (BCM), we are also taking
actions such as selecting a location that is strong against disasters when a plant is moved.
In the 1.5°C scenario, strong policy measures are expected to be taken to achieve carbon neutrality in the mid-century. One of theserisks is the introduction of carbon pricing including carbon tax. Being affected by cost increases will become a risk, especially in theenvironmental preservation business. On the other hand, in the precious metals business, it is likely that the evaluation of recycled
metals with relatively low CO2 emissions and their cost superiority will increase. This is an opportunity for the company, which has
strengths in the production and traceability of recycled precious metals. In the environmental preservation business, the shift from
simple incineration to thermal recycling during the transition to decarbonization will be an opportunity for our company which has
already been addressed. The expansion of recycling demand, including the expansion of the target product, will provide an opportunity
to take advantage of our strength in consulting sales (proposal-based sales).
While reducing risk, we will focus on expanding opportunities.

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Initiatives for a Hydrogen Society
Asahi Pretec has been working with FC Development
Co., Ltd., X-Scientia Co., Ltd., and Sumitomo Mitsui
Trust Bank, Limited since September 2021 on thedevelopment of a system for building a green hydrogen
supply chain through effective use of by-products
as part of the "FY2021 Cross-Regional Cross-Sector
Carbon Neutrality Technology Research, Development
and Demonstration Program" implemented by Japan’s
Ministry of the Environment.
This program involves utilizing unused electricity
from waste to energy plants owned by Asahi Pretec
to develop a hydrogen production system that cansignificantly reduce hydrogen production costs via theco-production of hydrogen and by-products. After thecompletion of the program, we will contribute to the
spread and expansion of hydrogen by manufacturing
inexpensive hydrogen and selling it externally, thus
helping to reduce greenhouse gas emissions.

Sell byproducts to ensure businessviability and contribute to
the expanded adoption of hydrogen

Reduced CO2
emissions
Enhancingresilience,
regionalcollaboration

Byproducts

Hydrogenproduction

H2
Fuel cells, etc.

Waste power generation(unused stable power supply)
Scope of demonstration
for adopted projects

Electricity

H 2O

Heat

Regional Co-creative/Cross-sector Carbon Neutrality Technology
Development and Demonstration Project (Guided Technology
Development and Demonstration Project for Improving CO2
Emission Reduction Measures)

ASAHI HOLDINGS

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SOCIETY

ESG Initiatives: Society

The People We're Looking forWhen it comes to human capital, one of the cores of our approach is enhancing talent base with individuals who possess bothprofessional expertise and initiative. The basic qualities we require are the ability to acquire the knowledge and expertise necessary
for the job, as well as the willingness to think independently and utilize that knowledge to handle one's responsibilities on one's own.

Qualities we look for in core personnel
The core personnel who will drive our company's sustainable growth must possess the following three qualities. First, they must beable to innovate and take on challenges and act on new ideas without letting themselves be bound by existing frameworks. Second,
they must be open to diversity and accepting of differences in experience, ideology, and culture, and be able to communicate smoothly
and make the most of the abilities of those around them. Third, they must have a sense of how to manage risks appropriately for thevarious incidents that occur in a business environment that is changing at unprecedented speed.

Developing Personnel
To support the "scrap and build" approach of our resourceful businesses as well as the company's rapid growth, we have expanded
our personnel primarily through mid-career hires. One of our strengths is that we have personnel from diverse backgrounds, and it isimportant to establish a foundation that will enable each of them to maximize their potential and develop into core human resources.

Ensuring all employees are compensated based on performance and abilities● Training system diagram
New Graduate/New Recruit

Assistant Manager

Manager

General Manager

All

Basic education, e-learning, etc. (safety training, IT education, sustainability education, language learning support)
Training for new graduates andrecruits
Mentor system (for one year after
entering the company)

Level-Specific Training

Mid-career training for managers (guidance by Head of Department/on-site training)
New general manager training

New assistant manager training

Understand roles andexpectations

Correspondence education: Essential courses by level
Basic businessskillsIntermediate
courseManager fundamentals course

Practical business skills training

Priority SDG-Related GoalOur priority SDG-related goals for fiscal 2021 are as follows.
Rest intervals

99.9%

Holidays for
Refreshment

99.6%

Women in managerial
positions to all
female employees

5.8%(19.3% men)

Employees withdisabilities

1.9%

Improving work-life balance: Promotion of new work style models
Our turnover rate is around 3%, which is due to our fair evaluation system based on performance and ability as well as our safe andcomfortable work environment. Rather than grow complacent with the current state of affairs, we aim to further enhance the diverse
working lives of our employees. Specifically, we plan to introduce a new work style model in fiscal 2022 that will allow employees
to choose a "four-day workweek" option depending on their workplace and the type of work they do. We will strive to promote new
initiatives that are ahead of the times and "innovate and embrace challenges" in the way we work.

Diversity & inclusion
We are committed to making efforts to promote the advancement of women within our company. Last year, we launched the "Asahi
Cheer-Up Meeting" to enhance networking among female employees. For the first event, we had our female employees nationwide
who are assistant managers or above connect online, and we held a discussion with our female outside directors as panelists. In
addition to being exposed to the outside directors' diverse array of careers and experience, they were able to expand their networks
within the company and raise their awareness of the need for diverse career development. Besides expanding the existing support
system for balancing work and family life, we are also making efforts to transition toward work environments that are not affected byphysical disparities between genders in the various business fields, which will allow women to be active in more areas. For example,
in the dental sector, outsourcing the collection and transportation of waste materials, which has thus far been done alongside sales
activities, to a specialized company will foster an environment in which female sales staff can be more active. The percentage offemale employees among the new graduates who joined in fiscal 2022 is 60%, and we have already assigned some of them to sales
positions in the Precious Metals Business Division.
In April 2022, we established a policy to further support the increase in the rate of men taking parental leave to create a workplaceenvironment where men can take parental leave with ease, thereby lending indirect support to women being more active in the workplace.

Occupational Safety and HealthMid-career training (new hire training and follow-up training)

Manager course

Advanced management course

Training for new managers

Selective Training

44

We have established the "Asahi Intrepreneur Program," an in-house venture program that helps to commercialize employees' ideas.
By launching and managing businesses based on employees' own ideas, we can discover and cultivate future management talent.

SOCIETY

We have thoroughly implemented a system in which talented employees are given the opportunity to be promoted to higher positions
regardless of their career at the company or their age. To efficiently conduct evaluations for this purpose, by the end of fiscal 2022, weplan to launch a talent management system that makes it easy to visualize the qualifications and skills of each employee. We will use
this system to rotate and recruit personnel strategically in line with our business strategy.

Learn the core skills
necessary for business
operations

Asahi Intrepreneur Program, our in-house venture program

Results

To co-exist with society on a long-term basis, innovation that transcends conventional thinking is essential. It is also essential tosecure and develop human resources that can devise new paradigms for the industrial waste treatment process to create ways thattake climate change and biodiversity into further consideration. They should also have a high affinity for areas such as IoT and AI and
be able to accelerate and manifest the digital transformation of the industry. We believe that we can achieve our long-term vision of
being "a leader in creating a circular economy that connects society to the environment" by securing and cultivating personnel who
can propose solutions appropriate for the times at a variety of sites.

Obtain the knowledge andbusiness skills that form
the foundation of ouroperations

While we still provide a variety of training and self-development programs, we will further enhance our training opportunities, which
includes strengthening our selective training programs. One particular example is establishing a new "mentor system" and "mentor
development training." We will select senior employees to provide on-the-job training to new employees and formally appoint themas "mentors," and new employee training will be considered an official personal mission as well as an evaluation item. At the sametime, mentor development training will be provided for those employees who will become mentors so that they can learn how to guideand train junior employees and subordinates. Doing this will achieve both uniform, high-quality training for new employees and thedevelopment of future candidates for management positions.
One specific example is the establishment of a new "Global Course," which combines support for language exams and training
programs at overseas offices to enhance the development of personnel who can achieve their potential on the global stage inaccordance with our business strategy.

Enhance Work-Life Balance and Employee Diversity

Generating innovation

Qualification Level

Enhancing training opportunities to develop human capital

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Human Capital to Support Business and Strategy

Correspondence education: Essential courses for knowledge/skills
Accounting, finance andLogical writing
labor management

Health and productivity management
We consider the physical and mental health of each and every employee a corporate asset, and under the "Asahi Holdings Health
Declaration," we are working to make healthy and productive workplaces a reality. The company has a comprehensive health checkup
system that exceeds the statutory requirements, including a recommended gastrointestinal endoscopy for employees aged 35 andolder and periodic advanced medical examinations, including MRI/MRA and PET scans, for all employees aged 40 and older, and has
been recognized as a "2022 Certified Health & Productivity Management Outstanding Organization." With regard to mental health,
we are also promoting the creation of a workplace where employees can work with peace of mind in collaboration with occupational
physicians specializing in mental health.

Creating a safe workplace

Mentor development training
Domestic business schools (short-/long-term)

Gain advanced expertise
Developing global andmanagerial talent

INTEGRATED REPORT 2022

Specialized courses by job category (competence certification, on-site education, external training, support for qualification acquisition, etc.)
Global Course (support for language examinations, overseas trainees)

To reduce the occurrence of occupational accidents, we have adopted the Occupational Safety and Health Management System(OSHMS) to improve the level of safety and health in the workplace through continuous safety and health management. We willcontinue to focus on preventing serious accidents and disasters through accident prevention efforts and improved safety education,such as risk assessments and hazard prediction training.
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ESG Initiatives: Society

The Asahi Holdings Group is engaged in global procurement of the materials from which it recovers precious metals,
which are essential for manufacturing products such as electronics, auto parts, and jewelry. We have established amanagement system that complies with guidance issued by relevant international organizations. As a member of the
precious metals supply chain, we promote Responsible Precious Metals Management. This is an important part offulfilling our social responsibilities for compliance with laws, respect for international norms, human and labor rights,
health and safety, environmental preservation, fair trade, and ethics.

What is Responsible Precious Metals Management?
Responsible Sourcing of Minerals
The Dodd-Frank Act was enacted in the United States in 2010 out of concern that mineral resources were being used as sourcesof funds for armed groups causing conflict and human rights abuses. The act regulates the use of conflict minerals from the
Democratic Republic of the Congo and nine surrounding countries. Companies that are publicly listed in the U.S. and which procuretin, tantalum, tungsten, and gold (3TG) are required to carry out due diligence, survey country of origin, and report on the use of any
conflict minerals.
The Organization for Economic Co-operation and Development (OECD) has issued Due Diligence Guidance for Responsible Supply
Chains of Minerals from Conflict-Affected and High-Risk Areas. This OECD Guidance sets out a five-step framework for companies:(1) establish strong company management systems; (2) identify and assess risks in the supply chain; (3) design and implement
a strategy to respond to identified risks; (4) carry out independent third-party audits; and (5) report annually on supply chain due
diligence.
The Conflict Minerals Regulation also came into effect in the European Union in January 2021. It applies to importers of materials
containing 3TG into the EU from conflict and high-risk areas, and they are now required to carry out due diligence in their supply
chain. As a result, responsible sourcing of minerals is expanding globally.

Responsible Precious Metals Management

Asahi Holdings Group’s Action
Based on the Group's corporate philosophy and code of conduct, the "Asahi Way," we have set out a Responsible Precious Metals
Management Policy at Asahi Pretec, and a Precious Metals Procurement Policy at Asahi Refining. We conduct due diligence forsuppliers and materials of precious metals in accordance with the LBMA and LPPM Guidances, and we practice responsible
precious metals procurement.
The compliance status is audited annually by a third party, and then reported to the LBMA and LPPM. These reports are disclosed
on our website along with the assurance reports issued by the auditing organizations.
To fulfill one of our Priority SDG-Related Goals, “supply precious metals in ways that are friendly to people, society, and theenvironment,” we work to maintain the Asahi brand as a trusted presence that reassures customers all over the world that wepractice highly transparent procurement and traceability of raw materials as certified by third parties, and that our precious metal
products are made with consideration for human rights and the environment.

Asahi Pretec’s Responsible Precious Metals Management Policy ➡ https://www.asahipretec.com/responsible-sourcing/
Asahi Refining’s Precious Metals Procurement Policy

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➡ https://www.asahirefining.com/corporate-responsibility/

Utilizing its sales network that covers all of Japan as well as other sites in Asia, Asahi Pretec collects and recycles recyclable
materials containing precious metals from sources such as e-scrap, plating treatment, precision cleaning, catalysts, dentistry, andjewelry. By recycling gold, silver, platinum, palladium, and other precious metals that are essential for modern manufacturing, Asahi
Pretec is contributing to the effective use of resources and the development of the industry.
The Asahi Pretec brand is recognized worldwide for its gold, silver, platinum, and palladium products. In addition to LBMA and LPPM
Good Delivery accreditation, its products have also been accredited as a deliverable brand by futures exchanges such as the Osaka
Exchange (OSE) in Japan, as well as the Commodity Exchange (COMEX) and the New York Mercantile Exchange (NYMEX) in the UnitedStates.
In July 2019, Asahi Pretec became the first Japanese refiner to obtain the Code of Practices (COP) certification from the Responsible
Jewellery Council (RJC)*. In July 2021, the company also obtained
Chain of Custody (COC) certification. Asahi Pretec’s operations
meet the RJC’s strict standard for code of practices on ethics,
human rights, society, and the environment, as well as COC for due
diligence and traceability, and the company will continue to fulfill
its responsibilities as a member of the precious metals supply
chain.
* RJC: A non-profit organization that promotes transaction transparency
and responsible corporate behavior in the jewelry industry. This includes
businesses that handle precious metals and diamonds, from mines toretailers.

Responsible Precious Metals Management System
Based on our Responsible Precious Metals (RPM) Management
Policy, we have established the Responsible Precious Metals
Management Committee (RPM Committee) to oversee our RPM
management across the company. The President of Asahi Pretec
has ultimate responsibility for our RPM management, and wehave appointed a Compliance Officer, who is chairman of the RPM
Committee, to manage our RPM. The RPM Committee, chairedby the Compliance Officer, adopts and revises policy, decides
on important measures, implements the management system,
monitors the operation status, provides training to employees,
and reports to senior management.
We consider any transactions that adversely impact our precious
metals supply chain to be high-risk. Any transactions considered
to be risky are deliberated by the RPM Committee, and additional
due diligence is carried out as necessary to enhance themanagement system.
In FY2021, while there was one supplier that fell into the highrisk category, we continued to do business with the supplier once
the risks were mitigated.

Ultimate
responsibility

Representative
Director andPresident

RPM Committee(Administration)

Compliance
Officer(RPM members)
General managersof collection,
manufacturing, andsales departments

Business unit
managers

Plant managers(Promoters)
Staff of collection,
manufacturing, andsales departments

Staff of business
units andsales offices

Staff of plants

SOCIETY

Refiners who meet criteria in areas such as quality of products, assaying capability, and responsible sourcing, and which havepassed testing procedures, are accredited by the London Bullion Market Association (LBMA) for gold and silver or the London
Platinum and Palladium Market (LPPM) for platinum and palladium as Good Delivery refiners. Asahi Pretec has received Good
Delivery accreditation for gold, silver, platinum, and palladium, while Asahi Refining (USA and Canada) has received the same forgold and silver. These accreditations ensure the companies are trusted by customers in the global market.
To maintain Good Delivery status, in addition to regular quality and technical testing procedures, Good Delivery refiners are
required to be audited annually by a third-party for the LBMA Responsible Gold and Silver Guidance (hereafter LBMA Guidance),
and the LPPM Responsible Platinum and Palladium Guidance (hereafter LPPM Guidance) in compliance with OECD Guidance.
In addition to avoiding conflict minerals, human rights abuses, money laundering, terrorist financing, and fraudulent transactions,the LBMA Guidance also now requires refiners to fulfill their social responsibilities related to the environment and sustainability.
Asahi Pretec and Asahi Refining (USA and Canada) are also accredited by the Responsible Minerals Initiative (RMI) as conflict-freegold refiners that comply with the Responsible Minerals Assurance Process (RMAP).

Asahi Pretec's Action

Supply Precious Metals in Ways That
Are Friendly to People, Society, and theEnvironment

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Initiatives for Responsible Precious Metals
Management

Priority SDG-Related Goal

Supply Chain Management
Our due diligence process is carried out using a risk-based approach addressing the risks in the precious metals supply chain,such as conflict, compliance with laws, human rights, labor rights, health and safety, and the environment. By communicatingwith suppliers and conducting know-your-customer questionnaires, we understand the transaction and origin of materials, andwe assess risks of suppliers and materials. We send a consent form to all of our suppliers requiring them to confirm that theyconsent to our RPM Management Policy, and we ask them for their understanding and cooperation in responsible precious metals
sourcing. We establish relationships of trust with our suppliers and conduct continuous due diligence to mitigate supply chain risk.
(1) Implementation of due diligence for suppliers (risk assessment based on information such as nature of business, location of business, type ofmaterials, county of origin)(2) Communicating our Responsible Precious Metals Management Policy to suppliers(3) Recording transactions and managing traceability(4) Providing training to employees on Responsible Precious Metals Management and due diligence(5) Monitoring implementation status and reviewing by management(6) Conducting annual independent third-party audits

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Relationship with Society
The Group has relationships with various stakeholders.
We place special emphasis on maintaining good communication with stakeholders and strive to build strong
relationships with them.

Main Initiatives
Ethical Sustainable Jewelry

Strengthening Cooperation with Outside Stakeholders
The role of the Group in the circular economy is much like the veins of the human circulatory system, and this role will become evenmore important in the future. Since our business brings back waste resources from local communities and companies for reuse,
we must further strengthen our relationships with those stakeholders. Accordingly, the Group engages in various initiatives, suchas those organized by national and local governments as well as industry groups, while conducting its own social contribution andsponsorship activities.

Asahi Jewelry Journal

In recent years, ethical and sustainable jewelry has been gaining attention as products made frommaterials that are friendly to people, society, and the environment. As a company, we can help solve various
environmental and social problems by supplying this kind of jewelry. Sustainable jewelry is also very suitablefor use as special gifts such as engagement rings. This is because consumers appreciate knowing that
their piece of jewelry has not negatively impacted the environment or contributed to other social problems.
In recent years, famous jewelry brands have launched products based on a sustainability concept, whilebrands specializing exclusively in ethical and sustainable jewelry have also emerged. The new trend is evenbeing featured in women's magazines. Asahi Pretec supports the ethical and sustainable jewelry movement by supplying precious
metals that are friendly to people, society and the environment.

Nowadays, all companies are expected to promote their environmental, social,and governance activities. The Group also believes it must take its own particularmeasures such as Responsible Precious Metals Management, and widely share
information about them.
Asahi Pretec launched the Asahi Jewelry Journal in June 2020 for its partners in
the jewelry business. Published on a regular basis, it covers SDGs initiatives andother relevant topics.

Participating in Social Contribution Activities

Serving Our Customers● Asahi Refining Canada● Asahi Refining Florida

Food and toys being donatedFood and toys being donatedDonating food to the UTAH FOOD BANK and

to KNIGHTS TABLE

to FEEDING SOUTH FLORIDA

toys to CHRISTMAS BOX HOUSE● Asahi Refining USA
SOCIETY

Our motto is “the customer comes first,” and we mean it. We do all that we can to provide finely tuned responses to the wide-ranging
needs of each of our customers.

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The Group encourages and supports activities in which employees
contribute to the SDGs as members of society, such as volunteer
activities by individuals and groups, as "Asahi Holdings SDGs
Activities." On April 1, 2021, the "Asahi Clean Project" was launchedto promote activities specializing in cleaning up litter in which a totalof 527 employees and their family members participated. We areengaged in cleanup activities not only around our offices and sales
offices, but also in various areas.

As a corporate citizen, the Group carries out social contribution activities rooted in local
neighborhoods and environmental preservation. The initiatives are promoted in various
ways and are important for remaining an organization that supports local communities.
As part of its social contribution activities, Asahi Pretec participates in the TOOTH FAIRY
project, which is jointly run by the Nippon Foundation and the Japan Dental Association.
The project promotes the collection and recycling of gold, palladium, and other precious
metals that have served their purpose at dental clinics across Japan. Profits obtained
from selling the resulting recycled precious metals are used for social contribution
activities such as support for children with intractable diseases and their families in Japanand building schools in Myanmar. Asahi Pretec provides support for these activities by recycling the precious metals donated to the
TOOTH FAIRY project.
At Asahi Refining companies, the employees cooperate in making donations. In FY2021, a large number of food and toys werecollected and donated to food banks and other organizations.

Asahi Clean Project

Fair Trade Measures
As part of the Asahi Way, the Code of Conduct of the Asahi Holdings Group prohibits any behavior that impedes faircompetition, violates the confidentiality of supplier information and technology, or results in improper benefits. These rules
are strictly enforced to ensure compliance with fair business practices and corporate ethics.

Quality Assurance System
At Asahi Pretec, quality assurance is positioned as the coredepartment, and it works closely with the sales, technology
development, and product manufacturing departments. It sharescustomer feedback and market trends with these departments andcooperates with them to improve customer satisfaction. In addition,
the Asahi Holdings Group maintains ISO 9001 certification to ensurethat its products deliver satisfaction and peace of mind to customers.
We strive to continuously improve our quality management system
and maintain the highest quality possible.

Procurement Initiatives
Asahi Pretec has implemented a CSR Procurement Policy. It pertains
to the procurement of secondary materials such as chemicals
and consumables used in the precious metals recycling andEnvironmental Preservation Businesses.

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CSR Procurement Policy
Procurement is carried out based on the following sevenpoints: 1. Environmental preservation
2. Quality control 3. Fair trade 4. Information
security 5. Crisis management 6. Social responsibility
7. Human rights protection and occupational safety
and healthTransactions are promoted basedon relationships of trust with ourbusiness partners. The aim is toimprove corporate value for both thecompany and our business partners.

Other social contribution activities
・Support for the activities of nonprofits like Médecins du Monde Japon
・Support for the activities of nonprofits like the Japan Cleft Palate Foundation
・Nippon Foundation donations through vending machines, etc.

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GOVERNANCE

ESG Initiatives: GovernanceCorporate Governance

Adherence to Japan’s Corporate Governance CodeOrganization Design

Practicing effective corporate governance is a key part of corporate social responsibility. Good governance enhancesmanagement efficiency and transparency, and it helps keep corporate value growing.
The Asahi Holdings Group’s practice of corporate governance seeks to earn the confidence of shareholders,business partners, employees, local communities, and other important stakeholders. In addition to fulfillingthe social mission and responsibilities of a publicly listed company, we aim to keep growing corporate value by
maintaining a corporate governance system that can quickly respond to changes in the business environment while
always securing compliance.

Board of Directors

Corporate Governance Structure
General Shareholder’s Meeting

Appoint/Dismiss

Appoint/
Dismiss

Board of Directors(with a majority of independent
outside directors)

Appoint/Dismiss/Supervise

Representative
Director

Appoint/
Dismiss

Audit and Supervisory
Committee Director

Audit/Supervise(with a majority of independent
outside directors)

Inquire/Reply

Audit and Supervisory Committee

Nominating
Committee
Compensation
Committee

Direct/Report(with a majority of
independent outside
directors)

Audit Department

Support/
Educate/Guide/
Monitor

Safety Management
Meeting

Departments and Group Companies

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Under Japan’s Companies Act, Asahi Holdings has elected to be
a company with an Audit and Supervisory Committee, and has
four independent outside directors.
This structure has strengthened the supervisory function of
the Board of Directors. It also delegates important executive
decisions to the executive directors for quicker decision-making
and improved management efficiency.

Nominating and Compensation Committees

Collaborate

Internal Control
Promotion Meeting

Collaborate

Internal audit

Collaborate

A Nominating Committee, consisting of one internal director andtwo independent outside directors, as well as a Compensation
Committee, have been established as advisory bodies to theBoard of Directors. The chairpersons of both committees areappointed from among the independent outside directors. The
aim is to further enhance corporate governance by ensuringtransparency, fairness, and objectivity for the appointment anddismissal of directors and key management team members, aswell as for the determination of director remuneration.

Group Executive Committee
Important matters delegated to the executive directors aredeliberated and decided by the Group Executive Committee.
Other matters related to business execution are deliberated anddecided by the Group’s key company management meeting.

Aiming to reinforce internal controls, we have established an Audit and Supervisory
Committee within the Board of Directors. It includes four independent outside
directors and cooperates with Audit Department and other related departments.
The Audit Department assesses the appropriateness and effectiveness ofoperations, while also auditing compliance with laws, regulations, and company
rules. It advises and makes recommendations to each department, and promptly
reports to senior management. In addition, trained staff in each department
conduct internal audits based on an annual plan and report their findings at theInternal Control Promotion Meeting.

Evaluating the Effectiveness of the Board of Directors

As part of corporate governance enhancement, we are engaged in a continuous
process of analyzing and evaluating the effectiveness of the Board of Directors aswell as in the investigation of improvement measures. The analysis and evaluation
for the fiscal year ended March 2022 has been completed.

1 Analysis and evaluation methods for the fiscal year

ended March 2022

A questionnaire consisting of multiple evaluation items in six categories was
distributed to all directors, including directors who are Audit and Supervisory
Committee members. Responses were obtained from all directors, and theevaluation results were reported to and examined by the Board of Directors.

Questionnaire evaluation categories(1) Discussion of main strategies, such as corporate strategy (2) Creating anenvironment that promotes appropriate risk taking (3) Execution of highly effective
oversight (4) Appropriate communication with shareholders (5) Composition of theBoard of Directors (6) Management of the Board of Directors

2 Summary of evaluation results for the fiscal year ended

March 2022

The results of the evaluation of the Board of Directors' effectiveness are
summarized as follows.
(1) Discussion of major strategies, such as corporate strategy⇒Discussion was sufficient. We hope for there to be continued sharing of theGroup's vision and other information both internally and externally.
(2) Creating an environment that promotes appropriate risk taking⇒Risks related to important matters are shared appropriately throughmeetings that facilitate discussion between outside directors and executive
directors as well as corporate officers, and methods for dealing with suchrisks are given sufficient discussion. We continuously hope for sufficient
opportunities for timely and appropriate information sharing and discussionof important issues.
(3) Execution of highly effective oversight⇒Oversight is highly effective. In addition to regular discussions with theBoard of Directors and the executive directors as well as corporate
officers, the Audit and Supervisory Committee shares its opinions with theexecutive directors and corporate officers as required. To promote themanagement of human capital going forward, it is desirable to increase theinvolvement of outside directors when formulating CxO development plans,
as well as deepen discussions on the nature of succession plans for senior
management.
(4) Appropriate communication with shareholders⇒Information is disclosed in an appropriate manner, and feedback fromshareholders and other stakeholders is shared in a timely manner toensure proper communication. Going forward, in addition to conventional
IR activities, we expect to see activities that help to enhance brand value
for general consumers.
(5) Composition of the Board of Directors⇒The majority of independent outside directors provide the appropriate
combination of knowledge and skills required for effective discussions.
Diversity is sufficiently achieved as well, including an increase in thenumber of female directors and the appointment of female corporate
executives.

GOVERNANCE

Group Risk
Management
Department

AssistAudit andSupervisory
Committee
Secretariat
Collaborate

Group Executive
Committee

Outside Directors
Independence criteria have been established, and independent
outside directors with the capacity to perform their duties
independently from the management of the company have been
appointed, taking into consideration their individual backgrounds
and relationships with the Group. They attend Board of
Directors meetings and fulfill their roles and responsibilities
as directors. Whenever possible, they also attend the executive
and management committee meetings of Group companies. As
part of their wide-ranging activities, the outside directors share
their opinions from an independent point of view. In addition, inorder to further strengthen cooperation between independent
outside directors and the executive directors and to establish asystem that enables smooth communication and coordination,
we appointed one of the independent outside directors to serveas the head of the independent outside directors.

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Executive Director

The Board of Directors comprises executive directors who areknowledgeable concerning their respective Business, Technicalor Administration Units, as well as outside directors withvarious types of expertise essential to corporate management.
To further enhance the objectivity and independence of theBoard of Directors and ensure that discussions are active andeffective, the majority of members are independent outside
directors. The Board consists of two executive directors andfive Audit and Supervisory Committee members, including four
independent outside directors, two of whom are women, for a
total of seven board members. All directors share their opinions
actively and freely on important subjects such as the Group’s
management strategies and business plans.

Maintaining an Internal Control System

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Basic Corporate Governance Approach

The Asahi Holdings Group adheres to all the principles of Japan’s Corporate
Governance Code formulated by the Tokyo Stock Exchange. We submit Corporate
Governance Reports, which provide investors with 83 points of governanceinformation in a standard format, to the Tokyo Stock Exchange, and these areavailable on our website. In addition, we have formulated the Asahi Holdings
Corporate Governance Policies and are implementing each one to continuously
enhance corporate governance.

(6) Management of the Board of Directors⇒Meetings are held with appropriate frequency, and there is an active
exchange of views. For matters that have a significant impact onmanagement, we expect progress reports and the active sharing of
background information. We would also like supplementary materials forbudgets and financial statements to be visualized, as well as supplementary
explanations for areas that are difficult to understand.

3 Measures to improve effectivenessBy taking the following measures, we will further improve the effectivenessof Board of Directors management and strive to keep strengthening
corporate governance.
⃝Actively hold meetings for exchange of opinions between senior management andoutside directors to encourage appropriate information sharing and discussion ofimportant issues⃝Expand investment in human capital by enhancing education, training, and so on tonurture the next generation of executives⃝Make discussion more active by further enhancing supplementary explanatory
materials related to the budget and financial statements

ASAHI HOLDINGS51G OVERNANCE

ESG Initiatives: GovernanceDirector Skill Matrix
Industryknowledge

Director and Chairman●●

Representative Director, President & CEO

●

●

●

●

●

Mitsuharu Terayama
Tomoya Higashiura

Director, Chairman of the
Independent
Audit and Supervisory
OutsideCommittee
Director
Yuji Kimura
Director, Audit andIndependent
Supervisory Committee
OutsideMemberDirector
Kyoko Kanazawa
Director, Audit andIndependent
Supervisory Committee
OutsideMemberDirector
Yoshinori Hara
Director, Audit andIndependent
Supervisory Committee
OutsideMemberDirector
Miyoko Kimura
Director, Audit and Supervisory
Committee Member

International
experience

Sales

Technology andinnovation●●

Administrative
experience

Legal

Finance andaccounting

●

●

●

●

●

●
●

●

●

●

●

Compliance●Corporate Officer●●

Corporate Officer

●

●

●

●

Corporate Officer

●

●

●

●

Hiroyuki NakanishiNobuo Tajima
Shohei Yasuda●●●

Reasons for Selection of Skill Matrices
Our directors include executive directors who are knowledgeable concerning their respective Business, Technical or
Administration Units, as well as outside directors with various types of expertise essential to corporate management. Basedon the characteristics of our business, such as the international experience essential for conducting business on a global
scale and the administrative experience gained from operating businesses that necessitate licenses, we have identified eightskills that are required overall.

Remuneration for Directors
Policy for Determining the Details of Director Renumeration●Remuneration policy determination
The Board of Directors requests the volunteer Compensation Committee, which consists of three board members, including
two independent outside directors, to draft a recommendation for remunerating the directors of Asahi Holdings. Based on
this recommendation, the Board of Directors determines a policy detailing the remuneration for each director.
●Overview of the remuneration policy
Director renumeration must be within the limits approved by the General Meeting of Shareholders. The Board of Directors
determines the specific director renumeration policy within these limits, based on the recommendation from theCompensation Committee, which plays an advisory role. The remuneration system is designed to motivate directors to
improve the Group's business performance. Their remuneration consists of basic compensation, bonuses, and performancelinked stock-based compensation. However, directors who are Audit and Supervisory Committee members receive only
basic compensation.

Total Amount of Director Remuneration

Directors excluding those who are Audit and Supervisory
Committee members (outside directors only)
Directors who are Audit and Supervisory Committee members(outside directors only)
Total (outside directors only)

134 ( 0 )Total amounts by type of remuneration (million yen)
Stock-based
Monetary compensationcompensation
Fixed
Performance-linked
Non-monetarycompensationcompensation
remuneration

Performance-linked
coefficient

100%

1.0

50% or more

0.5

Less than 50%

0Business Continuity Management (BCM)
Various factors such as large-scale disasters entail the riskof impairing the functions needed for business continuity.
As an action plan to achieve quick restoration of missioncritical functions even after a disaster, we created abusiness continuity plan (BCP). In addition to the BCP, we
are conducting systematic business continuity management(BCM) activities to constantly improve the BCP and business
continuity endeavors.

The following statement is part of our Corporate Governance
Policies, and is understood by all our executives andemployees. "We will never have any relationship, including
business relationships, with anti-social forces that threaten
the social order and sound corporate activities. In theevent of an illegal request, we will take a firm attitude andrespond to it organizationally in accordance with the laws
and internal rules."Anti-Corruption Measures
As part of our Group Philosophy, the Asahi Way, we have aten-point Code of Conduct. One of these points states that
"we refrain from providing or receiving meals or gifts inpursuit of personal benefit." Group employees ensure thatthey do not engage in any transactions that could resultin bribery, such as providing some benefit to a business
partner or competitor for personal gain. Moreover, Asahi
Pretec, which manages the Group's Precious Metals
Business, has established a Responsible Precious Metals
Management Policy. It has declared and implemented apolicy of avoiding transactions that could result in money
laundering or fraudulent transactions in the precious
metals supply chain. Asahi Pretec also conducts employee
education on this topic on a regular basis.

Information Security
The laptops and tablets used by the Group’s sales force
are equipped with the latest security measures. Even if a
device is lost or stolen, the possibility of information leakage
is virtually zero thanks to technology such as remote data
wiping.

Number ofapplicabledirectors(people)65 ( 0 )

55 ( 0 )

14 ( 0 )4 (0)37 ( 23 )

37 ( 23 )

0 (0)

0 (0)

6 (4)

171 ( 23 )

102 ( 23 )

55 ( 0 )

14 ( 0 )

10 ( 4 )Notes 1. The amount paid to directors (excluding those who are Audit and Supervisory Committee members) does not include employee salaries for directors who also serve in employee positions. 2. The indicator used
for performance-linked compensation (bonus and performance-linked stock-based compensation) is consolidated operating profit, which is considered to be the most suitable management index for profits
earned by the main business. The result of fiscal year ended March 2022 was 26,446 million yen. The performance-linked compensation (bonuses) is calculated by first multiplying the consolidated operating
profit for the relevant fiscal year by a certain ratio to calculate the total amount for all directors including the corporate officers of Asahi Holdings and the directors of Asahi Holdings subsidiaries. The amounts
for each director are then determined according to the weighting for each position and the degree of individual contribution to business performance. 3. Performance-linked stock-based compensation is a nonmonetary compensation system in which Asahi Holdings shares are awarded to eligible directors according to their position and performance target achievement rates. Since the purpose is to provide incentive
to improve corporate value over the medium- and long-term, allocation points are awarded according to the achievement rate of the performance target, namely consolidated operating profit each fiscal year.
Those who are enrolled as of May 1, 2024 after the completion of the 9th Medium-Term Business Plan are eligible for the award. At the 12th Annual General Meeting of Shareholders held on June 15, 2021,
continuation of the performance-linked stock-based compensation system was approved. The shareholders also approved the number of allocation points to be awarded to directors in their positions for thethree years from FY2021 to FY2023, not including outside directors, part-time directors, and Audit and Supervisory Committee members. The performance-linked coefficients are provided below.

Performance target
achievement rate

We consider compliance a priority issue in delivering fairbusiness activities and ensuring legal compliance and highethical standards. Particularly, operations related to theproper processing of waste are based on environmental
laws and regulations as well as governmental licenses, andeach and every employee is required to always act with ahighly compliant mindset. We are conducting activities toraise the legal compliance awareness of each and every
employee through education and mutual communication,
along with rules and manuals related to compliance.

Avoiding All Interactions with Organized Crimeand other Anti-Social Forces

GOVERNANCE

Total amount of
remuneration(million yen)Classification

In order to appropriately manage various apparent and latent risks relating to corporate activities, the Groupidentifies risks comprehensively, evaluates them, and implements mitigation measures. By implementing
risk management, we strive to prevent risk materialization and minimize losses in the event of an incident.

●●

Mitsutoshi Kagimoto

Compliance and Risk Management

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Generalexecutive
management
skillsName

Internal Reporting System (Whistle-Blowing System)
To quickly identify and resolve problems such as unlawful
and unjust behavior, we have set up the Asahi Hotline. All
employees in and outside of Japan can directly report toeither an internal desk or an external law firm anonymously.
We take corrective actions to address the reported mattersafter investigation, without revealing the identity of thedisclosing or disclosed parties.

4. At the 6th Annual General Meeting of Shareholders held on June 16, 2015, the monetary compensation for directors (excluding those who are
Audit and Supervisory Committee members) was established at a total of no more than 200 million yen per year. (This does not include, however,
employee salaries for directors who also serve in employee positions.) The number of directors (excluding those who were Audit and Supervisory
Committee members) at the end of that general meeting was five. 5. Also at the 6th Annual General Meeting of Shareholders, the amount ofmonetary compensation for directors who are Audit and Supervisory Committee members was established at a total of no more than 100 million
yen per year. The number of directors who were Audit and Supervisory Committee members at the end of that general meeting was four. 6. At the12th Annual General Meeting of Shareholders held on June 15, 2021, continuation of the performance-linked stock-based compensation system
was approved. In addition to the above monetary compensation level, the amount and details of remuneration was determined for Asahi Holdings
directors (excluding directors who were Audit and Supervisory Committee members or outside directors) who were in their positions for the three
years from FY2021 to FY2023. At the end of the general meeting, the number of directors (excluding directors who were Audit and Supervisory
Committee members and outside directors) was two. Further, the maximum total number of points to be granted to directors per fiscal year was
set to 40,000 points, and the maximum total number of shares to be issued to directors for the target period was set to 120,000 shares.

Calculation Formula (number of points per fiscal year)→ Base number of points x performance-linked coefficient x assessment coefficient52

INTEGRATED REPORT 2022

ASAHI HOLDINGS53G OVERNANCE

ESG Initiatives: GovernanceDirector Profiles
Asahi Holdings has established a system to appropriately
oversee and audit Group companies from every angle toensure these businesses are always operating properly.
Important executive decisions for Group companies arecarefully deliberated and made by the Group Executive
Committee, attended by directors of Asahi Holdings, Inc.,and its Group companies. Particularly important matters
are submitted to the Asahi Holdings Board of Directors fordetermination. Directors who are Audit and Supervisory
Committee members also participate in the management
meetings of Group companies and actively provide input.
The management situation and sales activities of Group
companies are regularly reported to the Board of Directors of
Asahi Holdings. In addition, the company's Audit Department
audits Group companies on a regular basis and wheneverrequired, and the resulting audit reports are shared with the
Audit and Supervisory Committee and relevant departments.

Strengthening Group Risk Management
As compliance is essential to maintaining trustworthy
corporate activities, the Group ensures legal complianceand thorough adherence to corporate ethics among its
members. While developing human resources that embraceinnovation and challenge-taking by continuously expanding
the types of challenges they undertake, the Group mustalso recognize the increasingly diverse needs and valuesof society. To pursue sustainable growth going forward,
the Group must not only comply with laws and regulations,but also enhance management of all kinds of risks. Whilerisk management is practiced at each business location,
management standard-setting and location monitoring mustbe performed independently. Recognizing this, Asahi Holdings
decided to enhance its organizational response capabilities
by introducing a unified management framework for theGroup. Through these circumstances, the Audit Department
was placed under the Audit and Supervisory Committee toenhance the independence of the function responsible forchecking and monitoring business execution. We have alsoestablished a General & Legal Affairs Department and taken
other steps to bolster the framework for minimizing various
legal risks at our business locations. We will continue tofurther enhance our risk management system going forward.

Group Risk Management Department Created

On April 1, 2021, a Group Risk Management Department was
created to properly identify potential risks in the Group's businessexecution processes and business structures. It was establishedto evaluate risks in business activities and implement mitigation
measures across the Group. The department implementscompliance risk management for each business unit from an
independent perspective, and it strives to ensure appropriate
governance in collaboration with the Audit Department. We havealso established a compliance and safety system under which we
hold Internal Control Meetings and Safety Management Meetings
regularly to prevent risks from materializing.

Strengthening Risk Management in the North American
Business

In our North American business, we are working to establish amodel to expand our business into related areas, using refining asa platform. In particular, we will continue to aggressively promote
financial services such as "advance trading," and we will also
develop new financial products. To do this, we will first need toestablish strong mechanisms to ascertain and monitor the credit
risk of our business partners. In addition, identity verification(Know Your Customer, a.k.a. KYC) procedures are becoming
increasingly important to prevent the funding of organized crime
and terrorism. Accordingly, we will work to strengthen credit
risk management of business partners and enhance systems
at individual sites as we promote the expansion of our North
American business, which is one of our growth drivers.

Mitsuharu Terayama

Tomoya Higashiura

Profile(Born March 10, 1940)

Profile(Born January 26, 1961)

Apr 1964: Joined Kuraray Co., Ltd.
Jul 1973: Joined Asahi Pretec Corp
May 1981: Appointed Representative Director
and President of Asahi Pretec Corp.
Apr 2009: 	Appointed Representative Director and Presidentof Asahi Holdings, Inc.
Jun 2014: 	Appointed Representative Director, President andChairman of Asahi Holdings, Inc.
Apr 2018: 	Appointed Representative Director, Chairman of
Asahi Holdings, Inc.
Jun 2020: 	Appointed Director and Chairman of Asahi
Holdings, Inc. (to present)

Apr 1984: Joined NEC Corporation
Feb 2001: Joined Asahi Pretec Corp.
Jun 2006: Appointed Director of Asahi Pretec Corp.
Apr 2011: Appointed Director of Asahi Holdings, Inc.
Jun 2014: 	Appointed Representative Director
and President of Asahi Pretec Corp.
Apr 2017: 	Appointed Representative Director and President of
Asahi Americas Holdings, Inc.
and President of Asahi Pretec Corp.
Apr 2018: Appointed Director of Asahi Pretec Corp. (to present)
Apr 2018: 	Appointed Representative Director and President of
Asahi Holdings, Inc.
Jun 2020: 	Appointed Representative Director,
President & CEO of Asahi Holdings, Inc. (to present)

Audit and Supervisory Committee Members
Yuji Kimura

Kyoko Kanazawa

Profile(Born July 23, 1955)

Profile(Born October 11, 1965)

Apr 1979: Joined the Environment Agency
Jul 2006: Appointed General Manager of Industrial Waste	Management Division, Waste Management and Recycling
Department of the Ministry of the Environment
Aug 2010:	Appointed Director-General of Kyoto Mechanism
Business	Promotion Department of New Energy andIndustrial Technology Development Organization
Jul 2012:	Appointed Director-General of Hakodate Customs,
Ministry of Finance JapanOct 2014:	Appointed Executive Director and General Manager ofTokyo Office, Global Environment Centre Foundation (topresent)
Jun 2017: 	Appointed Independent Outside Director (serving as Audit
and Supervisory Committee Member) of Asahi Holdings,
Inc.
June 2021:	Appointed Head of Independent Outside Director
(serving as Chairman of Audit and Supervisory
Committee) of Asahi Holdings, Inc. (to present)

Apr 1989: Joined Fuji Research Institute Corporation
Apr 2000: Registered as attorney/Joined Hata & Co. Law Offices(to present)
Jun 2017: Appointed Independent Outside Director(to present)

Yoshinori Hara

Miyoko Kimura

Profile(Born July 21, 1958)

Profile(Born June 12, 1964)

Apr 1983: Joined NEC Corporation
Aug 1990: Became a Visiting Researcher, Stanford University
Jul 2004: Supervised NEC’s Kansai Research Laboratories
Apr 2006: 	Professor of Graduate School of Management,
Kyoto University (to present)
Apr 2018: 	Dean of Graduate School of Management, Kyoto
University
Jun 2019: 	Appointed Independent Outside Director (serving as
Audit and Supervisory Committee Member) of Asahi
Holdings, Inc. (to present)

Apr 1988: Joined PLUS Corporation
May 1999: Joined ASKUL Corporation
Feb 2010: 	Appointed Representative Director and President of
ASMARU Corporation
May 2017: Appointed Chief Marketing Officer (CMO),
Executive Officer, Executive Officer of Life Creation Unit
and Value Creation Center Unit,
B-to-C Company of ASKUL Corporation
Mar 2020: Appointed Director,
Supervisor of Merchandising Unit,
Chief Marketing Officer (CMO), Executive Officer 		of ASKUL Corporation
May 2021: Appointed Director in charge of branding, designing,and supplier relations of ASKUL Corporation
Jun 2021: 	Appointed Independent Outside Director of Asahi
Holdings, Inc. (serving as Audit and Supervisory
Committee Member) (to present)
Aug 2022 ASKUL Corporation Senior Fellow

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Group-Wide Oversight and Auditing by Directors

GOVERNANCE

Mitsutoshi Kagimoto
Profile(Born June 15, 1958)
Apr 1984: Joined Teijin Limited
Feb 2006: Joined Asahi Pretec Corp.
Mar 2009: Appointed Assistant General Manager
of Kitakanto Office of Asahi Pretec Corp.
Dec 2009: Appointed Representative Director and Presidentof Asahi Pretec Corp.
Apr 2013: 	Appointed General Manager of Purchasing Division of
INTER CENTRAL, INC.
Oct 2015: 	Appointed General Manager of Audit and Supervisory
Committee Secretariat of Asahi Holdings, Inc.
Jun 2021: 	Appointed Director of Asahi Holdings, Inc. (serving as Audit
and Supervisory Committee Member) (to present)
Dec 2021: Appointed Auditor of Asahi Pretec Corp. (to present)(As of June 15, 2022)

54

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ASAHI HOLDINGS

55

Outside Director

Mitsuharu
Terayama
Director and Chairman

Yuji
KimuraOutside Director

YoshinoriHara
Outside Director

Kyoko
Kanazawa
Outside Director

ーTo start things off, please share how you view
your responsibilities as outside directors and therole of the Board of Directors.
Special Feature

Roundtable Discussion with
Outside Directors

Based on the spirit of“innovate and embracechallenges,” we willcontinue to strengthen
our governance system.
In an effort to further enhance corporate governance,
Asahi Holdings has appointed four individuals witha wide range of expertise and experience as outside
directors. The Chairman of the Board of Directors alsojoined us on this occasion to speak frankly about the
governance reforms we have been working on and ourgoals for the future.

56

INTEGRATED REPORT 2022

(Yuji) Kimura: I believe that outside directors are
responsible for utilizing their expertise and experience tocontribute to healthy, sustainable corporate growth andthe enhancement of corporate value. This entails looking
at matters from the perspective of every shareholder
and stakeholder and remaining independent frommanagement so that one can ensure corporate complianceand governance and monitor the execution of business
operations to confirm management risks, as well as provide
advice on business strategies and other matters. I havebeen involved in waste management, recycling and global
environmental issues as a government official for many
years. I would like to bring my experience to bear by offering
advice and contribute to the monitoring of proper businessexecution, including compliance, as well as climate change
initiatives, which will become increasingly important.
The waste recycling sector is one of the major pillars ofour business. We are also expanding our precious metal
recycling focused business. Compliance is particularly
important in the sector of waste management and recycling,
and up until now I have offered many opinions and piecesof advice at board meetings based on my experience. I
hope to continue to apply my experience in this area going
forward. Climate change is another important issue. How do
we curb the greenhouse gas emissions produced by waste
incineration? How do we reduce greenhouse gas emissions
produced during the course of our corporate activities? How
do we raise awareness about our climate change initiatives
to the outside world? This will be a very important initiative,
and I will continue to apply my own knowledge to fulfill my
responsibilities as an outside director.

how to expand to the rest of the world from Japan.
(Miyoko) Kimura: To follow up on Director Hara’s mentionof innovation, when I joined our Board of Directors last June,
I myself was very surprised to see how the company has
continued to innovate without growing complacent due to its
success, in spite of our 70 years of history. “Innovation andtaking on challenges" are not easy, but I believe that the factthat we continue to do so is one of the great things about ourcompany. The spirit of "innovate and embrace challenges,"
respect for our employees, and our insistence on profits haveall been part of our company's DNA since its founding, but
at the same time, if we examine the history of our businessdevelopment, we have taken an aggressive “scrap and build”
approach, and this is the point I appreciate it. I agree with what
everyone has said regarding the role of outside directors, but
I believe that as a representative of general shareholders andas a member of society, it is important for us to occasionallybe able to express our opinions without worrying about how
we might be perceived, particularly when we are monitoring
executive operations from an independent and objective
standpoint. However, doing this naturally requires that I deepen
my understanding of the company. I have had the opportunity
not only to communicate with management, but also to visit
actual company sites, such as the Technical Research Centerand plants. This allowed me to get a feel for the reality on the
ground and the actual products, as well as the sincere andearnest attitude and culture with regard to workplace safety
and security. I will leverage my management experience asa founding member of a mail-order sales company for officesupplies, and I would like to contribute to the enhancement ofour medium- to long-term corporate value by incorporating
what I experienced on the ground and drawing on theexperience and knowledge I have cultivated in the launch anddevelopment of new B2B and B2C businesses, as well as in
the marketing sector. I believe that our strengths lie in the factthat our businessitself contributes to acircular economy thatlinks the environmentand society, that
we have a clear
management strategy
for expanding globallyon the strength of ouradvanced technologicaland sales capabilities,
and that we value ourcorporate culture andhuman resources
based on the "AsahiWay." In the coming
era, which willemphasize climatechange and ESG, Asahi
Holdings, Inc. will bepositioned right inthe middle of these
Yuji Kimura
issues, and I hope to
Head of Independent Outside Director (Chairman of thelend my support by
Audit and Supervisory Committee) of Asahi Holdings, Inc.
After working for the Environment Agency, the New Energy andcommunicating its
Industrial Technology Development Organization, and the Direcbranding and initiatives
tor General of Hakodate Customs at the Ministry of Finance, he
was appointed Executive Director and General Manager of Tokyo
to the outside world in
Office, Global Environment Centre Foundation in 2014. He hasserved as an independent outside director for Asahi Holdings,
a more active manner.
Inc. since June 2017, and he has been the Head of Independent

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MiyokoKimuraKanazawa: I believe that the responsibilities generally expectedof outside directors are as Director (Yuji) Kimura described at thestart. I think that one of our main characteristics is constantly
innovating and challenging ourselves, as evidenced by the factthat we have achieved growth while revamping our businessportfolio. Assuming that these characteristics remain, I believethat the most important role of the Board of Directors is to pointout the risks involved when the company is both considering andimplementing innovation and taking on challenges. This ensuresthat judgments of risk are made in an appropriate mannerand monitors whether our risk control system is in place andfunctioning. The Board of Directors should also point out when
the company is not acting as it should, such as when it is notinnovating or taking on challenges, or such efforts appear tobe weakening. In addition, given that we are a company that isalways innovating and taking on challenges, it may sometimes
be difficult for stakeholders to understand what we do. When
this happens, I would like to ask the Board of Directors to devise
ways for helping stakeholders to understand the company,
and as a member of the Board, I would like to be part of thisprocess. When it comes to my duties as an outside director
for the company, I value the approach of "harmonizing withoutagreeing." In fact, I have always emphasized this approach, evenwhen I was working as an attorney. A professor who mentored
me during my legal training told me that my duty and approachas a lawyer should be to "listen carefully, investigate carefully,
think carefully, and then repeat this process, cognizant of thefact that this occasionally means you have to say things you thinkothers may not want to hear. Even if this ends the relationship,
you have conveyed what is important." I believe this concept is
applicable not only as an attorney, but also when fulfilling myresponsibilities of an outside director.
Hara: I feel that the idea of "harmonizing without agreeing"
is vital not only for individuals, but for organizations as well.
Among the many responsibilities required of an outside
director, I believe it is particularly essential to remain unboundby internal considerations and provide candid opinions andrecommendations based on the general situation outside thecompany. I am currently conducting educational researchon innovation management at a graduate school of businessadministration. From my perspective, in addition to thenonferrous metals industry, we are a company with a very
unique business model in that, we create service innovations
that generate new added value while simultaneously creatingsocial innovations that are essential to achieving a recyclingoriented society. In the past, it has been said that achieving
the balance between economic value and social value that
we have aspired to since our founding would be difficult, but
recently, the value of ESG and non-financial information has
become more prominent, and there is a growing emphasis onbalancing economic and social values. As an academic withexpertise in business administration as well as electrical andelectronic informatics, I will contribute in terms of both theory
and practice from the perspective of the impact on stakeholder
value and strengthening governance. By taking firm steps topromote and raise awareness about the value we offer, I would
like to contribute to the sustainable growth of our company andthe enhancement of our corporate value over the medium andlong term. In addition, during my career thus far, I spent about
10 years conducting research in Silicon Valley in North America,and I have hands-on experience at an in-house research
institute. As such, I would like to lend my services by providing
both practical and academic advice on how to introduce
approaches both from abroad and from the IT field, as well as

Roundtable Discussion with Outside Directors

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Special Feature

Outside Director (Chairman of the Audit and Supervisory Committee) since June 2021.

ASAHI HOLDINGS

57

Special Feature

After working for Fuji Research Institute Corporation, she was registered as an attorney in April 2000 and joined
Hata & Co. Law Offices, where she is currently employed. She has served as an independent outside director(Audit and Supervisory Committee Member) for Asahi Holdings, Inc. since June 2017.

ーWe have been pushing for governance reform
for the past several years. Please tell us whatchallenges you have faced in the past and what
specific reforms have been made to address them.

(Yuji) Kimura: In the past, there have been areas where
it appeared that a systematic and organized approach tolegal affairs and risk management had not been sufficiently
established. Such issues have been identified at Board of
Directors meetings and Group company management meetings,
and this has led to a strengthening of the organizational
structure.
Kanazawa: The Audit and Supervisory Committee, including theoutside directors, have pointed out three issues: strengthening
the legal and risk management functions, ensuring andenhancing the independence of the internal audit function,and promoting stakeholders’ understanding of the company.
Regarding the third issue in particular, visible reforms areunderway, such as adjusting how IR materials are presented
so that stakeholders can more accurately understand thecompany's capabilities.
(Yuji) Kimura: Right. I believe that we will continue to takeactions that we feel are necessary in a timely manner. In
promoting the advancement of various aspects of governance,
I consider risk management to be the most important issue.
As Director Kanazawa mentioned earlier, the company is toanticipate social trends and develop businesses in new sectors
without growing complacent with the status quo. However,starting new businesses always entails risk. Looking back on
our company's development to date, I believe that rather than
avoiding risks, it has taken risks and managed to overcome
them in an effort to develop new businesses. The natureand content of these risks differ by business sector, and wehave also been working to make our risk management moreadvanced while taking such differences into account, such as
by establishing a new Group Risk Management Department
in April 2021 that manages risks across the entire company.
While we have always been skilled at reviewing and adapting ourorganizational structure in response to changing circumstances,
as we look ahead to future business developments, the weightof our overseas businesses is likely to increase, so we must
continue to review our risk management structure as required
to keep pace with the development of our businesses. I think it
is important to continue to recognize that risk management will
always be a challenge.
Hara: I think you’re right. Some aspects of our previous

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INTEGRATED REPORT 2022

ーWhat kinds of specific proposals or measures
were implemented to reform governance?
Additionally, what is your assessment of our current
governance structure?
Hara: To continue on the topic of diversity management that I
just mentioned, because I work at a university, I have organizeda variety of diversity-related events, introduced them to
employees, and actually had them participate in them remotely.
Further, when Outside Director (Miyoko) Kimura visited ourTechnical Research Center and plants, she had the opportunity
to discuss diversity with female employees, and I took part aswell. I know that it takes time to solve diversity issues, but when
I actually talked with the employees, I got the impression thatmany of them have very high potential, so I believe that we can
expect to see an increase in the number of female managers
depending on future initiatives. As for the current governancesystem, my assessment is that we are currently implementing
effective governance that is receptive to what is being said.
(Yuji) Kimura: Right. I believe that the executive side of thecompany has listened to the opinions of the outside directors
and created systems that are optimal for that particular point intime. I think there is a high degree of flexibility and adaptability
even as a strong core is maintained.
Kanazawa: Actually, I believe that comments from Outside
Director (Yuji) Kimura, the Chairman of the Audit andSupervisory Committee, are reflected at the Board of
Directors meetings We outside directors speak our minds,
and our opinions and suggestions are faithfully reflected in
the company’s governance management. The fact that thisattitude is present in our governance operations is appreciated.
I also find it very easy to participate in discussions at the
Audit and Supervisory Committee meetings that are held
right before the Board of Directors meetings. The Audit andSupervisory Committee is a forum for auditing the legality andappropriateness of the directors' execution of their duties, but
we consider auditing to mean monitoring in a broader sense,
and the Audit and Supervisory Committee Members(outside
directors), with their wide range of expertise, use this forum toactively ask questions, deliberate, and exchange opinions on the
Board of Directors' proposals in advance. I believe that this has

for by revisions to the 2021 Corporate Governance Code andother guidelines. This will enable us to continue to enhance ourcorporate value.
(Yuji) Kimura: Right. Regarding the first point you mentioned,
given that our expansion overseas, such as our North Americanbusiness, has become even more important, we have beenutilizing various financial methods to increase profits throughadded value in addition to refining virgin gold and silver ore. I
agree that one challenge is maximizing profits while appropriately
managing the risks associated with the use of these financial
methods. Risk assessment and management requires specialized
knowledge, and we must continue to improve efforts to ensurethat error-free management decisions are made based on
the newly developed internal system. In addition, because it ispossible that the same type of business model may be developed
in regions other than North America, it is essential to utilize theexperience gained in North America and turn it into a profitablebusiness even more quickly when making decisions on theimplementation of such business models and developing systems.
Also, with regard to the Environmental Preservation Business, I
have some challenges, or rather expectations for our company
based on my experience as an official in this sector. Looking at
the structure of this industry, the overall reality is that there are a
lot of small- and medium-sized businesses, some of which are in
non-compliance, some of which operate in a gray area, and someof which have even experienced problems with local residents.
In such an industry, we have a very high level of complianceawareness and possess excellent in-house waste treatment
and recycling technologies. Given that we also work with othercompanies to develop consulting services that allow waste
disposal to be reliably outsourced for waste generators, there is
no doubt that we are positioned as a leading company. I am verymuch looking forward to the company further enhancing this
sector to promote modernization, streamlining, and optimizationof the industry as a whole, and more broadly, to serve as a driving
force in the transition of Japanese society toward a recyclingoriented society. If this is achieved, there would be a tremendous
impact not only in terms of increasing the company's own profits,
but also in terms of contributing to society at large.

ーWhat issues do you think need to be addressed
to further enhance the company's governancestructure in the future?

(Miyoko) Kimura: I think there are two major points. The
importance of risk management was touched upon previously,
but one is strengthening cooperation with the Group Risk
Management Department and Audit Department to monitor
the establishment and operation of internal control and risk
management systems comprehensively and from a broad
perspective without becoming too removed from the situationon the ground. This is to promote "innovation and challenge" inan effort to further develop and accelerate businesses in new
sectors, such as the North American business and new DXE
businesses in the future. The other is supporting our company
in making proactive efforts to disclose information based on the
TCFD recommendations and address human rights issues in theface of new ESG-related disclosure provisions that are called

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Independent Outside Director (Audit and Supervisory Committee Member)

resulted in more effective sharing of questions, opinions, andproposals from the outside directors at the Board of Directors
meetings. In particular, I feel that the outside directors are able
to make proposals and engage in discussions regarding the
medium- to long-term direction of the company as a whole as
opposed to as individuals.
(Miyoko) Kimura: Right. I’ve also found that the Audit andSupervisory Committee discussions that take place just prior
to the Board of Directors meetings have been excellent. Having
a diverse group of experts freely share opinions and proposals
with the executive side and direct questions to the Board of
Directors in advance of the meeting has felt easy to manage.
(Yuji) Kimura: At the preliminary review for discussions at theBoard of Directors meeting held by the Audit and Supervisory
Committee prior to the Board of Directors meeting, while no
resolutions are reached, I get the impression that the outside
directors, who each have different areas of expertise, shareopinions and questions, which allows a certain degree of
direction regarding the agenda to take shape. As the Chairmanof the Audit and Supervisory Committee, I sometimes speakat Board of Directors meetings, but each outside director also
actively speaks at these meetings from the perspective of theirown area of expertise. I believe this is another part of their roleas outside directors.
Kanazawa: Director (Miyoko) Kimura mentioned earlier that
it is important to deepen one's understanding of the company
and its businesses to speak without concern about how one
is perceived. Being able to participate in Group company
management meetings in addition to Audit and Supervisory
Committee meetings has been very beneficial in terms of me
fulfilling my role as an outside director. I am grateful to have achance to gain a firsthand understanding of the situation a little
more closely by taking part.
(Yuji) Kimura: That truly is the case. In fact, without suchopportunities, I think our opinions would tend to be superficial.
Of course, compared to the executive side, our knowledge of thebusinesses and the situation on the ground is quite limited, but
I feel that through such opportunities I have gained a great dealof information that is required to participate in discussions as
an outside director and to contribute to the management of thecompany. While the agenda of the Board of Directors meetings
is limited to very broad topics, some of the topics discussed
at the management meetings naturally involve specific risks,
so I make a conscious effort to ask questions and listen to theanswers before responding to them when it comes to areas that
I need to understand as an outside director.

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Kyoko Kanazawa

governance structure that I found to be challenge were, in
addition to risk management, the lack of communication
between internal management and employees and outside
directors, as well as the inadequacy of our governance structure
due to a lack of communication among company departments.
This is because creating social capital requires each individual
in a trust-based organization to believe that they have apersonal stake in environmental issues and social values
such as the SDGs, and to pursue these issues with a sense ofownership. While I believe that organizational measures to set
and implement goals such as the SDGs have been thoroughly
implemented, there remain issues from the perspective of
diversity management, for example, particularly in termsof gender diversity. The number of female outside directors
has increased, and the percentage of women on the Board of
Directors has surpassed that of other companies. However, weneed to further increase the number of female managers andeven the number of female employees themselves, so we must
further strengthen measures to increase the number of female
managers. We believe that it is necessary to further enhancemeasures that will lead to an increase in social value, such as
promoting understanding of diversity and introducing a system
to lend support to female employees.

Roundtable Discussion with Outside Directors

Yoshinori Hara

Independent Outside Director (Audit and Supervisory Committee Member)
After working at NEC Corporation, as a visiting researcher at Stanford University, and supervised NEC’s
Kansai Research Laboratory, he became a professor at Kyoto University's Graduate School of Managementin 2006. Later, he also served as Dean of the Graduate School of Management at Kyoto University. He hasserved as an independent outside director (Audit and Supervisory Committee Member) for Asahi Holdings,
Inc. since 2019.

ASAHI HOLDINGS

59

Special Feature(Miyoko) Kimura: I believe that increasing corporate value
through intangible assets will become increasingly importantfor differentiating companies and achieving sustainable growth.
In particular, making a conscious effort to incorporate a diverse
array of human resources, including women, people fromoverseas, young people, seniors, and people with experience inother industries, will be essential for generating future-oriented

Miyoko Kimura
Independent Outside Director (Audit and Supervisory Committee Member)
After joining ASKUL Corporation and serving as Representative Director and President of ASMARU Corporation
and Chief Marketing Officer (CMO) of ASKUL Corporation, then becoming a Director of the company in charge ofbranding, designing and supplier relations, she became a Senior Fellow of the company in August 2022. She hasserved as an independent outside director (Audit and Supervisory Committee Member) for Asahi Holdings, Inc.
since June 2021.

60

INTEGRATED REPORT 2022

our human resource strategy and carrying it out. In a society thatis placing increasing emphasis on making a circular economy
and decarbonized society a reality, our company's position insociety is more important than our employees realize. Still,when I look at the degree to which our corporate philosophy
and perspectives have been instilled in our employees, I feelthat we are relatively underperforming. That being said, it isalso important to maintain a certain level of distance from ourcorporate philosophy and purpose. When I did research on what
influences corporate sustainability, I conducted a survey ofapproximately 6,000 companies that have been in business formore than 100 years and analyzed the trends in the responses
I received from approximately 450 of those companies. The
results showed that, for a company to survive over the long term,
it is best to maintain a certain degree of freedom within one’s
corporate character. In the case of our company, this meansthat our employees should be able to exercise a certain degreeof freedom of behavior that exists between what is typical ofthe "Asahi Way" and what is not. This will allow us to promote
new businesses and other activities that enhance sustainability.
As times continue to change, we should not bind ourselves
too closely to the corporate philosophy, but rather take onchallenges with a certain degree of freedom even as we continue
to respect it. I think this is a good approach to take.
Kanazawa: Regarding my involvement as an outside director
in terms of human capital management, if we look back overthe past few years, we transitioned to the Higashiura CEO
system, and last year we transitioned to a monitoring model,
so I think we were in the phase where we were keeping watch
over how these changes were coming along. I believe that weare now entering the next phase. As stipulated by the Corporate
Governance Code, I believe that we must require the executiveside to formulate a broader human resource strategy, including
a succession plan, and have the Board of Directors discussand approve it, then monitor whether the approved plan isbeing implemented. The Corporate Governance Code requires
outside directors to be actively involved in human resource
strategies, especially when it comes to succession planning.
The company’s governance system is well-organized at leastin terms of form, given that the company has established a
Nomination Committee and Compensation Committee, outside
directors comprise the majority of members on the Board of
Directors, and an outside director has been appointed as the
Chairman of the Audit and Supervisory Committee. However,there are also social demands for which form-related aspects
alone are not sufficient. Under such circumstances, in termsof the involvement of outside directors in the succession plan,
the executive side may ask, "What does an outside director
know about personnel affairs?" I am sure some share this view,
and I can understand the intent behind it. However, as long as
stakeholders demand that outside directors be substantively
involved in succession planning, it is necessary for outside
directors to consider and devise some measures for doing so.
Terayama: We have been keenly aware of the need to strengthen
governance, and we have introduced systems as well as
enhanced the content of these systems, such as by instituting acompany with Audit and Supervisory Committee and establishinga Compensation Committee and Nominating Committee We
have also made efforts to apply the feedback received fromoutside directors as quickly as possible. We will continue tostrengthen governance as we confront new challenges, but
the spirit of "innovate and embrace challenges" is key to ourefforts. As everyone pointed out today, there are always risks
involved in any new business venture. We have always taken risk

Mitsuharu Terayama
Director and Chairman
After joining Asahi Pretec in 1973, he served as President and Representative Director of Asahi Pretec Corp.
Then he served as President and Representative Director of Asahi Holdings, Inc. in 2009 and was appointed
Representative Director, Chairman, and President of the company in 2014. He has served as Director andChairman of the company since June 2020.

into consideration when conducting business, and we are very
grateful for the opportunity to receive feedback on these risks
from experts in their respective fields with perspectives different
than those that we have within the company. I believe that
discussions with outside directors are as indispensable as thetwo wheels of a car when it comes to management. The mostcommon advice we received from you today concerned humancapital. We believe that succession planning is a top priority
on the executive side, and we know that outside directors arealso keenly aware of the issue. We will take your comments
into consideration and respond to them in future. We will also
continue to promote the development of executives and midcareer employees, and in the year since the new personnel
system was launched last year, we have also promoted town
hall meetings at all sites to allow direct contact with employees
and facilitate exchanges of views. This is also where the spiritof "actual sites, actual things, and actual facts" espoused in the"Asahi Way" originated. In terms of knowing what is happening
on the ground, you mentioned earlier that Group company
management meetings are helpful for understanding ourbusiness. While we would ordinarily be happy to invite you toattend management meetings held in other countries such as
South Korea, Malaysia, and North America, it is difficult to do sogiven the COVID-19 pandemic, so they are now held remotely.
We are very grateful for your enthusiastic participation, not onlyin terms of monitoring the situation on the executive side, butalso in terms of understanding our business.
(Yuji) Kimura: I believe we are a company that incorporates
protection of the global environment into our business structure,
but there are considerable obstacles that we must overcome toachieve carbon neutrality by 2050. In this respect, I believe that
our corporate stance of taking the initiative to achieve carbon
neutrality will lead to returns in the form of increased corporate
value for our company, and I would like to see our company
make a strong, concerted move in this direction.
Terayama: I couldn't have put it better myself. I hope that ourshareholders understand our stance.
ASAHI HOLDINGS

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ーThroughout the discussion thus far, we’ve touched
upon diversity in human resources as well as
succession planning. In closing, please share yourthoughts about the issues facing the management of
human capital as well as measures that can be taken.

innovation. As Director Hara mentioned earlier, particularly
from the perspective of women's advancement, I think it isessential to create an environment that facilitates an increasein the number of female managers in key decision-making
positions throughout the company. In February of this year,
as part of the women's advancement action plan, the "Asahi
Cheer-Up Meeting," led by CEO Higashiura and the directors ofthe Human Resources Department, was launched to empower
female employees. As female directors, I and Director Kanazawa
support the promotion of diversity and inclusion for thecompany's corporate strategy. We were given the opportunity
to hold a discussion with 26 female employees at the assistantmanager level and above about our own careers, the ease withwhich women can work, past failures, and more. Besides thismeeting, I have had other opportunities to exchange views
with female employees as well since assuming my position. As
Director Hara mentioned, I was very impressed by the high levelof communication skills and the earnest, honest, and positive
attitude many of them displayed. In addition, I learned that thecompany has a good support system for balancing work withchildcare and nursing care, and that it is convenient for working
women. If we can bring out the best in these women, have themchannel those aspects into their careers, and develop them into
core personnel, I believe that we will be able to generate evenmore innovation in the future. It is also important to promote
diversity in conjunction with the succession plan mentioned
earlier by Director Kanazawa. How do we develop humanresources for the next generation, and what kind of humanresource strategy do we formulate to achieve this? As the Boardof Directors, I would like us to provide support for the company
to continue to remain sustainable while expressing our views on
issues related to such a strategy.
(Yuji) Kimura: Regarding diversity in human resources, as
Director Hara and Director (Miyoko) Kimura have pointed
out, in terms of gender diversity, the reality is that we do notnecessarily have that many female employees. I believe this isin no small part due to the nature and content of the business
we are developing. Recently, we have been reviewing job duties
in a way that is not affected by gender differences, and we arepromoting a number of initiatives, such as exchanges among
working women inside and outside the company, to enablefemale employees to advance their careers. In addition, I believethat it is essential that this issue does not only raise awarenessamong women concerning the importance of diversity, but
among male employees as well. If we examine our company's
employee composition from perspectives other than gender,
unlike most companies, we have a large number of careerhires, as well as career personnel hired with the expectationthat they will become future management candidates, midcareer executives and career personnel with expertise in
specific fields, personnel who became group employees through
M&A, and recent graduates. Our employees come from an
extremely diverse set of backgrounds, including their expertise,
experience, and careers. Because we established our corporate
values and philosophy, as represented by the "Asahi Way," in theearly stages, I believe that working to raise awareness of andinstill them within employees from diverse backgrounds will
strengthen our human capital, which will be extremely impactfulin enhancing our corporate value.
Hara: I think you are absolutely right. With regard to the raisingawareness of our corporate values and philosophy that Director(Yuji) Kimura just mentioned, I believe that we still have a lot ofwork to do in terms of instilling these values and our philosophy
within individual employees, as well as ensuring consistency with

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Kanazawa: I think that's exactly right. I would also like to add
that, to further improve governance and achieve sustainablegrowth for our company going forward, we must also think longterm and devise a plan to develop personnel who can become
our successors.
Hara: Right. As for human resources, I believe that what weneed for sustainable growth is people with an entrepreneurial
spirit. I am sure that many of the people had such a mindset
when founded, but once a company grows to a certain degree,
it becomes easier to tolerate the types of situations that ail big
companies. We are in the VUCA era, and I believe that personnel
who are willing to take action, make proposals, and assume
some degree of risk to meet challenges and seize business
opportunities are essential for our company's growth. Not
just our company, but Japanese companies in general, have aproblem with intangible assets such as human capital not being
properly reflected as corporate value, despite having extremely
high potential. We need to strengthen our public relations
strategy in a broad sense so that our intangible assets canbe properly evaluated, and we need to strive to get people tounderstand the potential of our activities and businesses. I thinkthat preparing an integrated report, which is exactly what thisroundtable discussion will address, will serve as one of the tools
for fulfilling this function.
Kanazawa: I agree. I also think that the integrated report will be
an important tool.

Roundtable Discussion with Outside Directors

61

Financial and Non-Financial Data
10-Year Financial and Non-Financial Summary← Japanese Standard
FY

2012

2013

IFRS →

2014

2015

2016

2017

2018

2019

2020

2021

Unit

Financial Data* 1
Revenue*2

Billion yen

96.4

94.3

111.4

119.4

106.8

115.8

110.4

135.6

164.8

192.4

Operating profit*2

Billion yen

7.5

9.6

10.5

6.1

2.0

13.8

13.4

18.0

25.1

26.4

Pre-tax income

Billion yen

7.3

9.9

9.7

5.9

1.8

13.4

12.4

17.7

26.1

26.4

Income for the year attributable to owners of the parent

Billion yen

4.5

6.0

5.8

2.9

-1.2

9.4

9.0

9.8

25.7

18.7

Total capitalBillion yen

42.0

46.5

51.0

49.0

44.8

64.4

67.8

69.2

97.9

105.1

Total assets

Billion yen

62.3

66.1

104.9

101.6

89.0

131.5

160.3

230.0

244.8

298.4

Capital investment

Billion yen

1.3

1.1

1.5

1.7

3.0

3.1

5.7

4.2

5.3

8.3

Depreciation

Billion yen

2.1

1.8

1.8

2.4

2.3

2.3

2.3

2.8

2.5

2.7

R&D expenses

Billion yen

0.35

0.37

0.44

0.50

0.51

0.51

0.45

0.35

0.32

0.36

Cash flow from operating activities

Billion yen

-0.4

14.1

9.4

14.3

3.3

-13.4

-20.6

4.5

-33.4

1.1

Cash flow from investing activities

Billion yen

-2.1

-1.1

-29.6

-1.9

-2.4

-2.8

-5.6

1.9

-2.8

-7.8

Cash flow from financial activities

Billion yen

2.6

-8.0

21.4

-6.5

-6.6

29.8

18.3

0.3

24.4

-6.0

Basic earnings per share (EPS)*3

Yen

69.62

91.75

88.45

43.74

-18.62135.39114.07125.12326.90238.11Equity attributable to owners of the parent company per share (BPS)*3

Yen

644.28711.26771.41745.28679.51813.60861.58879.001,244.06

1,336.89

Dividend per share*3

Yen

30.00

30.00

30.00

30.00

30.00

31.50

60.00

65.00

85.00

90.00

%

7.8

10.2

9.4

5.1

1.9

11.9

12.2

13.3

15.2

13.7

%

11.2

13.6

11.9

5.8

-2.6

17.3

13.6

14.4

30.8

18.5

%

12.9

15.6

12.4

5.7

1.8

12.2

8.5

9.0

11.0

9.7

Ratio of equity attributable to owners of the parent

%

67.3

70.1

48.2

47.8

49.8

49.0

42.3

30.1

40.0

35.2

Payout ratio

%

43.1

32.7

33.9

68.6

-

23.3

52.6

52.0

26.0

37.8

1,328

1,360

2,080

2,005

1,961

1,928

2,042

1,574

1,510

1,457

Operating profit margin
Return on equity (ROE) attributable to owners of the parent*
Pre-tax return on assets (ROA)*

5

4

Non-Financial Information* 6
Percentage of women in the workforce

%

10.4

10.5

12.0

11.7

11.8

11.5

11.6

9.9

9.0

9.0

Percentage of employees outside Japan

%

3.2

4.0

20.2

18.4

17.5

16.7

21.2

23.4

24.7

23.1

-

-

-

-

-

-

-

-

74

93

10.8

11.8

8.5

10.4

14.8

13.4

13.1

10.8

8

10

10

9

9

9

9

8

8

7

0.0

0.0

0.0

0.0

0.0

11.1

11.1

12.5

12.5

28.6

1,000 kWh

22,67022,96023,29044,60043,45041,81041,56047,85046,01045,7101,000 tons

-

-

-

41.3

40.3

39.7

39.4

39.4

37.3

32.0

Number of new hires
Percentage of women among new hires%

Percentage of managers among women%

Average years of employment (men)Year

Average years of employment (women)

Year

Number of directors*

7

Percentage of female directors
Electricity consumption*%

8

Energy-derived CO2 emissions *8

Note 1 Since the Group adopted the International Financial Reporting Standards (IFRS) in FY2016, the financial figures for FY2015 are also shown based on IFRS. Since
the Group adopted the International Financial Reporting Standards (IFRS) in FY2016, the financial figures shown are also based on the IFRS.
Note 2 The business of Fuji Medical Instruments Mfg. Co., Ltd. was categorized as a non-consolidated business in FY2019. As a result, the revenue and operating
profit figures for FY2018 and FY2019 reflect this change.

62

INTEGRATED REPORT 2022

Note 3 On April 1, 2021, a stock split was conducted with a ratio of two-for-one, and the calculation is based on the assumption that the stock split was conducted at the
beginning of FY2012.
Note 4 Return on equity (ROE) attributable to owners of the parent corresponds to return on equity under the Japanese GAAP.
Note 5 Pre-tax return on assets (ROA) corresponds to return on assets under the Japanese GAAP.
Note 6 The annual non-financial information is compiled as of March 31 and includes data for all Group companies, including overseas companies.
Note 7 The company transitioned to a “company with Audit and Supervisory Committees” structure in FY2015. Through FY2014, the figures include the number of Auditors.
Note 8 From FY2015 onwards, the data pertains to consolidated subsidiaries as of March 31, 2022. Data for deconsolidated subsidiaries has been subtracted retroactively,
while data for subsidiaries that were previously non-consolidated has been added retroactively, going back to the fiscal year when the subsidiary became
consolidated.						ASAHI HOLDINGS

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Number of employees

63

Group Company Structure

Corporate Group Overview

Asahi Holdings
Audit and Supervisory Committee

Representative Director
Financial Planning Office

Audit Department

Corporate Planning & Communications Department

Secretariat of Audit and Supervisory Committee

General & Legal Affairs Department
Group Risk Management Department
Overseas Business Development Office
North American Business Unit

Asahi Pretec
Board of Directors

Asahi Pretec Corp.

Established:
July 1952
Incorporated:
April 2009
Capital:
7,790 million yen
Representative Director: Higashiura Tomoya
Head Office: 	Nissay Sannomiya Building 16F 4-4-17 Kanocho, Chuo-ku, Kobe, Hyogo 650-0001 Japan
TEL: 078-333-5633 FAX: 078-333-5681
	Sapia Tower 11F 1-7-12 Marunouchi, Chiyoda-ku, Tokyo 100-0005 Japan
TEL: 03-6270-1833 FAX: 03-6270-1859
Number of employees : 1,457 (As of March 31, 2022)(consolidated)
https://www.asahiholdings.com/
URL:

Business activities: 	Precious metals recycling, industrial waste
management, and other environmental
preservation activities
Representative Director: Hiroyuki Nakanishi
Head Office: 	Nissay Sannomiya Building 16F 4-4-17 Kanocho, Chuo-ku, Kobe, Hyogo 650-0001 Japan
TEL: 078-333-5600 FAX: 078-333-5681
	Sapia Tower 11F 1-7-12 Marunouchi, Chiyodaku, Tokyo 100-0005 Japan
TEL: 03-6270-1820 FAX: 03-6270-1825
URL:
https://www.asahipretec.com/

Asahi Refining Canada

Precious Metal Recycling BusinessAsahi Refining USA

Domestic Business Locations

Asahi Refining Florida

Research Laboratory: 	Technical Research Center (Kobe)
Bando, Amagasaki, Ehime, Fukuoka
Plants:Business offices: ‌	Sapporo, Aomori, Sendai, Niigata, Kitakanto, Kitakanto
Electronics G/Catalyst G (Bando), Kanto, Yokohama,
Kofu, Nagano, Shizuoka, Nagoya, Hokuriku, Kobe,
Hanshin, Okayama, Hiroshima, Shikoku, Fukuoka,
Kagoshima, Okinawa

Asahi Depository
Auditors

Representative Director
Precious Metals Business Unit

Precious Metals Business Division

Subsidiaries

Tokyo Head Office

Kobe Head OfficeJewelry Business Division

ASAHI G&S SDN. BHD. (Malaysia) Asahi Pretec Korea Co., Ltd

Subsidiaries

Electronics Catalyst Business Department
Precious Metal Sales Department

Asahi Refining USA Inc.

Asahi Refining Canada Ltd.

Asahi Refining Florida LLC

Asahi Depository LLC

Domestic Business Locations

Bando Technical Department‌Plants:	Ibaraki, Kawaguchi, Yokohama, Totsuka, Samukawa, Kobe,
Kitakyushu, Hibiki, Taniyama Rinkai, Ijuin
Business offices:	Sapporo, Sendai, Kitakanto, Kanto, Yokohama, Shonan,
Shizuoka, Nagoya, Hokuriku, Kobe, Okayama, Hiroshima,
Kitakyushu, Kagoshima, Okinawa

Amagasaki Technical Department
ASAHI G&S
Asahi Pretec Korea
Environmental Preservation
Business Unit

Environmental Preservation Business Division

JW Chemitech

Environmental DX Promotion Division

Fuji Rozai

Subsidiaries
Nihon Chemitech Logitem

Technical Department

Securities Firms
1,394,000 shares

2. 43%

Foreign Investors

Research &Development Department

19,752,000 shares

24. 78%

Production Technology &Engineering Department

Number ofshares:Individuals and Others
33,188,000 shares

79,709,000

Technology Support &Production Management Department

Administration Unit

(As of June 1, 2022)

1. 75%

Corporations and Others
1,940,000 shares

Sales Office Management Department

JW Chemitech Co., Ltd. Nihon Chemitech Logitem Co., Ltd.
Fuji Rozai Co., Ltd. DXE Inc.

Share Information
Stock Ownership by Types of Shareholders

DXE

Technical Research Center

41. 64%

sharesHuman Resources Department

Financial Institutions
23,434,000 shares

29. 40%Finance & Accounting Department
Information Technology Department(A s of June 1, 2022)

64

INTEGRATED REPORT 2022

Market Capitalization■Trading Volume (shares)

Major Shareholders
Shareholder Name

Number of Shares Held
(1,000 Shares)

12,473

15.66

Custody Bank of Japan, Ltd. (trust account)

5,070

6.37

Mitsuharu Terayama

1,793

2.25

State Street Bank West Client - Treaty 505234

1,597

2.01

Masamichi Terayama

1,484

1.86

Asahi Employee Stock Ownership Plan

1,428

1.79

Ceplux-Erste Group Bank AG (UCITS Clients)

1,162

1.46

Credit Suisse (Luxembourg) S. A. /Customer Assets, Funds UCITS

976

1.23

JP Morgan Chase Bank 385781

943

1.18

Custody Bank of Japan, Ltd. (securities investment trust account)

916

1.15

■Market Capitalization (yen)Selected as acomponent of the
S&P/JPX Carbon
Efficient Index

Kurumin
Certified by the Minister of
Health, Labour and Welfare inJune 2021 as a company thatprovides support for childcare(1,000 shares)

15,000240

Certification

Health andproductivity
company
certified in 2022

Shareholding
Ratio (%)

The Master Trust Bank of Japan, Ltd. (trust account)(Billion yen)

Added to the Following Indexes

Selected as a component of the
FTSE Blossom Japan Sector RelativeIndex, an ESG investment index(As of March 31, 2022)*On April 1, 2021, a stock split was conducted with a ratio of two-for-one, and thenumber of issued shares became 79,708,688 shares.

External Evaluations

Selected as a component of
the JPX Nikkei Index 400

Environmental Preservation Business

200

12,500160

10,000

120

7,500

80

5,000

40

2,500

0

April 2016

April 2017

April 2018

April 2019

April 2020

April 2021

0

ASAHI HOLDINGS

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Board of Directors

Asahi Holdings, Inc.

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Asahi Holdings, Inc.