Consolidated Financial Results for the Third Quarter Ended December 31, 2019
Asahi Holdings, Inc. [IFRS]January 31, 2020

Stock code:

5857

Shares listed:Tokyo Stock Exchange (First Section)

URL:
Representative

https://www.asahiholdings.com
Tomoya Higashiura, Representative Director and President
Kunihiko Chogo, General Manager, Corporate Planning &For further information please contact:

Communications Department(Phone) +81-3-6270-1833

Filing date of Quarterly Report:
Start of dividend payment:

February 13, 2020–

Supplementary materials for the financial results:

Yes

Investor conference for the financial results:

Yes (for institutional investors, analysts)(Rounded down to the nearest million yen)

1. Results of the nine months ended December 31, 2019 (From April 1, 2019 to December 31, 2019)(1) Results of operations (cumulative)(Percentage: Changes relative to corresponding previous period)
OperatingincomeProfit before
tax

ProfitProfitattributable toowners of parent

Total
comprehensive
incomeMillions of yen %Millions of yen %Millions of yen %Millions of yen %Millions of yen %Revenue
The nine months ended
December 31, 2019
December 31, 2018

Millions of yen%

99,108 26.3－
78,445

13,894 44.8 12,070 36.0－
9,595 － 8,876

6,402
2.1
6,273 (14.7)

Basic earnings per share

Diluted earnings per shareYen
162.72158.88Yen
162.17158.67

The nine months ended
December 31, 2019
December 31, 2018

6,402
2.1
6,273 (14.3)

5,683 (33.9)
8,593 15.6

(Note) The Company has signed an agreement on the partial equity transfer of Fuji Medical Instruments MFG.
Co., Ltd., which was a consolidated subsidiary of the Company, and thereby reclassified the business concerned as
discontinued operations. Consequently, revenue, operating income and profit before tax for the third quarter of thecurrent year and of the previous year indicate the figures for continuing operations that do not include discontinued
operations.
(2) Financial Position

As ofDecember 31, 2019
March 31, 2019

Total assets

Total equity

Equity attributable toowners of parent

Equity attributable toowners of parent ratio

Millions of yen
226,554
160,272

Millions of yen
68,81867,804

Millions of yen
68,81867,804

30.4
42.3

%

2. Dividend payments
Dividends per share

Year ended March 31, 2019Year ending March 31, 2020
Year ending March 31, 2020
(Forecast)First quarter

Second quarter

Third quarter

Year-end

Annual

Yen

Yen
60.00
60.00

Yen
－
－

Yen
60.00

Yen
120.0070.00

130.00－－(Note) Revisions in dividend forecast in the current quarter: Yes
For details, please refer to “Notice on the Revision of Financial Forecast and Revision of Dividend Forecast(Dividend Increase)” made public on January 31, 2020.

3. Forecast (From April 1, 2019 to March 31, 2020)

OperatingincomeRevenue
Millions of yen

Year ending March 31, 2020

135,000(Percentage: Changes relative to corresponding previous period)

%

22.3

Profit before
tax%

Millions of yen

19,00041.3

Millions of yen

16,700%

Profit attributable
Basic earnings
toper shareowners of parent
Millions of yen
%
Yen

35.2

9,400

4.4

238.89(Note) Revisions in forecast in the current quarter: Yes
For details, please refer to “Notice on the Revision of Financial Forecast and Revision of Dividend Forecast(Dividend Increase)” made public on January 31, 2020.
Year-on-year change rate indicates the rate of change in continuing operations excluding discontinued operations.
* Notes(1) Changes in significant subsidiaries during the current quarter: No(2) Changes in accounting policies and accounting estimates(i) Changes in accounting policies required by IFRS: Yes(ii) Changes other than (i) above: No(iii) Changes in accounting estimates: No
For details, please refer to page 12“2. Condensed Consolidated Financial Statements (7) Notes on Condensed
Consolidated Financial Statements (3.Changes in accounting policies)”.
(3) Number of issued shares (common stock)(i)

Number of issued shares at the quarter end (including treasury shares)
As of December 31, 201939,854,344 shares

As of March 31, 201939,854,344 shares(ii) Number of treasury shares at the quarter end
As of December 31, 2019505,537 shares

As of March 31, 2019505,487 shares(iii) Averaged number of shares during the period (quarterly cumulative period)
Nine months ended December 31, 201939,348,848 shares

Nine months ended December 31, 2018

39,487,710 shares*The quarterly financial statements are not subject to quarterly reviews by accounting auditors.
(Notes on forward looking statements, etc.)
These forecast performance figures are based on the information currently available to the company’s
management and certain assumptions judged rational. Accordingly, these might be cases in which actual resultsmaterially differ from forecasts of this report. Please refer to page 4 “1. Qualitative Information (3) Consolidated
Performance Forecasts” for the assumptions used and other notes.

【Appendix】

Table of contents of the appendix
1. Qualitative Information ................................................................................................................................ 2(1) Consolidated Business Performance ........................................................................................................ 2(2) Consolidated Financial Position and Cash Flows for the nine months ended December 31, 2019 ...... 2(3) Consolidated Performance Forecasts ....................................................................................................... 4
2. Condensed Consolidated Financial Statements........................................................................................... 5(1) Condensed Consolidated Statements of Financial Position ................................................................... 5(2) Condensed Consolidated Statements of Income for the nine months ended December 31, 2019 ........ 7(3) Condensed Consolidated Statements of Comprehensive Income for the nine months ended
December 31, 2019 .................................................................................................................................... 8(4) Condensed Consolidated Statements of Changes in Equity ................................................................... 9(5) Condensed Consolidated Statements of Cash Flows .............................................................................. 11(6) Notes on Assumptions for Going Concern ............................................................................................... 12(7) Notes on Condensed Consolidated Financial Statements ...................................................................... 12
1. Reporting entity ................................................................................................................................... 12
2. Basis of preparation ............................................................................................................................ 12
3. Changes in accounting policies ........................................................................................................... 12
4. Significant accounting estimates and associated judgments ............................................................ 14
5. Segment information ........................................................................................................................... 15
6. Impairment loss ................................................................................................................................... 17
7. Discontinued operations ...................................................................................................................... 17
8. Subsequent events ............................................................................................................................... 18

－

1

－

1. Qualitative Information(1) Consolidated Business Performance
The Japanese economy registered moderate recovery during the current consolidated cumulative third
quarter, backed by improvements in the employment situation and corporate income. Meanwhile, theprospects for the global economy remain opaque due, in part, to the impact of consumption tax hike on
personal spending and concerns over global economic slowdown triggered by the US-China trade dispute.
Under these conditions, the Group’s results in each business segment were as follows. During the third
quarter consolidated accounting period, the Company decided to transfer its equity interest in Fuji Medical
Instruments MFG. Co., Ltd., a consolidated subsidiary of the Company. Businesses of Fuji Medical
Instruments and its subsidiary that were previously classified under “Life & Health business” haveconsequently been reclassified as discontinued operations. In addition, beginning in the third quarter
consolidated accounting period, the Group reduced the number of reporting segments from three: “Precious
Metals business,” “Environmental Preservation business” and “Life & Health business” to two: “Precious
Metals business” and “Environmental Preservation business.”
Precious Metals business
Revenue and operating income in precious metal recycling business in Japan, South Korea and Malaysia
increased from the same period in the previous year, thanks to the growing volume of precious metalcollection and rise in precious metal prices. In North America, revenue and operating income in precious
metal refining business expanded from the same period a year before due to an increase in refining
transactions and financial transactions. Meanwhile, in order to further enhance the efficiency andprofitability of business in North America, the Company decided to discard the gold and silver refining
facilities of Asahi Refining Florida Inc. and posted an impairment loss on its fixed assets. However, revenue
and operating income in Precious Metals business recorded a significant growth over the same period in thepreceding year.
Environmental Preservation business
Revenue and operating income in Environmental Preservation business posted a year-on-year increase as
the Company worked to develop new projects and strengthened its sales structure for offering services bycapitalizing on the strengths of the respective group companies.
As a result of the above, revenue during the third quarter of the current fiscal year was 99,108 million yen,a year-on-year increase of 20,662 million yen (+26.3 percent). Operating income was 13,894 million yen, an
increase of 4,299 million yen (+44.8 percent) year-on-year. Profit before tax was 12,070 million yen, a year-onyear increase of 3,194 million yen (+36.0 percent). Profit was 6,402 million yen, a year-on-year increase of 129
million yen (+2.1 percent). Profit attributable to owners of parent for the period was therefore 6,402 million
yen, an increase of 129 million yen (+2.1 percent) year-on-year. By segment, revenue in the Precious Metal
business was 82,755 million yen, a year-on-year increase of 20,403 million yen (+32.7 percent). In theEnvironmental Preservation business, revenue was 15,284 million yen, and increase of 1,139 million yen (+8.1
percent) year-on-year.

(2) Consolidated Financial Position and Cash Flows for the nine months ended December 31, 2019
As of December 31, 2019, total assets amounted to 226,554 million yen, up 66,281 million yen from theprevious fiscal year end. This was due mainly to the decrease of 2,231 million yen in cash and cash
equivalents, the decrease of 6,638 million yen in goodwill, the increase of 59,699 million yen in trade andother receivables and the increase of 3,953 million yen in inventories.
Total liabilities amounted to 157,735 million yen, up 65,266 million yen from the previous fiscal year end.
This was due mainly to the decrease of 3,350 million yen in trade and other payables, the increase of 63,196
million yen in loans payable and the increase of 2,379 million yen in other financial liabilities.
Total equity amounted to 68,818 million yen, up 1,014 million yen from the previous fiscal year end. Thiswas due mainly to comprehensive income of 5,683 million yen and dividends of 4,721 million yen.
As a result, the equity attributable to owners of parent ratio changed to 30.4%, from 42.3% at the end of theprevious fiscal year.

－

2

－

Net cash used in operating activities amounted to 55,874 million yen due mainly to 12,070 million yen of
profit before tax, 2,179 million yen of depreciation and amortization, 6,592 million yen of increase ininventories, 60,531 million yen of increase in trade and other receivables and 5,891 million yen of income
taxes paid.
Net cash used in investing activities amounted to 1,981 million yen due mainly to 2,119 million yen ofpurchase of property, plant and equipment.
Net cash provided by financial activities amounted to 55,965 million yen due mainly to 61,039 million yen of
net increase in short-term loans payable, 4,708 million yen of cash dividends paid.
As a result, cash and cash equivalents as of December 31, 2019 decreased 2,021 million yen from March 31,
2019, to 14,065 million yen, excluding 209 million yen of cash and cash equivalents included in assets held for
sale.

－

3

－

(3) Consolidated Performance Forecasts① Reasons for the revision of financial forecast
As described in the “Notice on the Impairment Loss Recorded on Fixed Assets at Consolidated Subsidiary,”
which was announced separately today, an impairment loss of 1 billion yen has been recorded on facilities
related to gold and silver refining business in North America. As a result, profit before tax and profit
attributable to owners of parent are expected to be lower than those in the previous forecast. However, as theperformance of the precious metals recycling business and environmental preservation business remains
solid, exceeding the levels in the previous forecast, operating income remains unchanged from the previous
forecast.
Revision of consolidated financial forecast for the year ended March 2020 (April 1, 2019 to March 31, 2020)(Unit: millions of yen, %)Profitattributable Basic earnings
to owners ofper share
parentYen Sen

Revenue

OperatingincomeProfit before
tax

Previous forecast (A)(Announced on October 29, 2019)

135,000

19,00016,800

10,200259 22

Revised forecast (B)135,000

19,00016,7009,400

238 89Change (B-A)

－

－

(100)

(800)

－

Change (%)

－

－

(0.6)

(7.8)

－

128,669

14,47813,4059,000

228 14(Ref.) Results for the previous FY(FY ended March 31, 2019)② Reasons for the revision of dividend forecast
The Company’s basic policy is to improve corporate value by maintaining profitability and delivering
sustainable growth, and to meet the expectations of shareholders by providing sustainable, stable dividends.
The Company’s guideline on dividend payments based on this basic policy is to target a consolidated payout
ratio of 50% or more by considering such factors as the business results of each fiscal year, the need forenhancing the financial position, and the management strategy of the Group.
Even after the revision of its financial forecast, the Company expects to register record-high results for
operating income and profit before tax. Based on this judgment, the Company plans to increase its dividend
payment at the end of fiscal year by 10 yen from 60 yen in the previous forecast, and the total annual dividendof the year is planned to be 130 yen.
Revision of dividend forecast for the year ended March 2020
Annual Dividend
End of second quarter
Previous forecast(Announced on May 8, 2019)60 yen

Revised forecast

Results for the current FY

60 yenResults for the previous FY(FY ended March 31, 2019)60 yen－4－

End of FY

Total
60 yen120 yen

70 yen

130 yen

60 yen120 yen2. Condensed Consolidated Financial Statements(1) Condensed Consolidated Statements of Financial Position
As ofMarch 31,
2019

As of
December 31,
2019

Millions ofyenMillions ofyen

ASSETS
Current assets
Cash and cash equivalents

16,297

14,065Trade and other receivables

66,489126,188

Inventories
Income tax receivables

25,191
1,515

29,14572

Other financial assets

389

90

Other current assets

3,906

5,248

113,790－

174,810

Assets held for sale
Total current assets

113,790

188,494

36,0838,243

34,348
1,604

697
873
47
498

543
1,069
32
421

Subtotal

Non-current assets
Property, plant and equipment
Goodwill
Intangible assets
Deferred tax assets
Net defined benefit asset
Financial assets

13,684

Other non-current assets

39

39

Total non-current assets

46,482

38,059160,272

226,554

Total assets

－

5

－

As ofMarch 31,
2019

As of
December 31,
2019

Millions ofyenMillions ofyen

LIABILITIES and EQUITY
Liabilities
Current liabilities
Trade and other payables
Loans payable

17,16944,712

13,818
126,994

Income tax payable
Other financial liabilities

2,405
1,537

2,300
2,806

Provision

1,207

739

Other current liabilities

3,540

2,613

Subtotal

70,573－

149,272

Liabilities directly associated with assets held for sale
Total current liabilities

70,573

153,169

Loans payable
Deferred tax liabilities

19,085
1,360

－
1,978

Net defined benefit liability
Other financial liabilities
Other non-current liabilities

157
1,291
－

163
2,401
22

Total non-current liabilities

21,895

4,566

Total liabilities
Equity92,468

157,735

Capital stock
Capital surplus
Treasury stock

7,790
10,353(955)

7,790
10,406(955)

Retained earnings
Other components of equity
Other comprehensive income related to assets held forsale

55,547(4,931)

57,225(5,657)－

9

Total equity attributable to owners of parent

67,804

68,818

Total equity

67,804

68,818160,272

226,554

3,896

Non-current liabilities

Total liabilities and equity

－

6

－

(2) Condensed Consolidated Statements of Income for the nine months ended December 31, 2019
The nine months
ended December 31,
2018

The nine months
ended December 31,
2019

Millions of yen

Millions of yen

Continuing operations
Revenue

78,445

99,108

Cost of sales(63,849)(79,256)

Gross profit

14,596

19,851

Selling, general and administrative expenses
Other operating income(4,972)88(4,992)
161

Other operating expenses(117)(1,125)

Operating income

9,595

13,894

Finance income
Finance cost
Other non-operating income

15

18

(734)
－

(1,789)
87

－

(140)

Profit before tax
Income tax expenses

8,876(2,859)12,070(4,527)

Profit from continuing operations
Discontinued operations

6,016

7,543

257

(1,140)

6,273

6,402

Non-controlling interests

6,273
－

6,402
－

Profit

6,273

6,402

Continuing operations
Discontinued operations

152.36
6.52

191.71(28.99)Total

158.88162.72

Continuing operations
Discontinued operations

152.16
6.51

191.06(28.89)Total

158.67162.17

Other non-operating expenses

Profit(Loss) from discontinued operations
ProfitProfit attributable to:
Owners of parent

Earnings per share
Basic earnings (loss) per share (Yen)

Diluted earnings (loss) per share (Yen)

－

7

－

(3) Condensed Consolidated Statements of Comprehensive Income for the nine months ended
December 31, 2019

Profit

The nine months
ended December 31,
2018

The nine months
ended December 31,
2019

Millions of yen

Millions of yen

6,273

6,402

Financial assets measured at fair value through othercomprehensive income

(19)

3

Remeasurements of defined benefit plans

(16)

(6)

Total items that will not be reclassified to profit or loss

(36)

(2)

Cash flow hedges
Translation adjustments of foreign operations

2,421
(65)

(753)
37

Total items that will be reclassified to profit or loss

2,356

(716)

Other comprehensive income
Items that will not be reclassified to profit or loss

Items that will be reclassified to profit or loss

Other comprehensive income, net of tax

2,319

(719)

8,593

5,683

Owners of parent
Non-controlling interests

8,593
－

5,683
－

Comprehensive income

8,593

5,683

Comprehensive income
Comprehensive income attributable to:

－

8

－

(4) Condensed Consolidated Statements of Changes in Equity(Millions of yen)
Equity attributable to owners of parent

Capitalstock

CapitalsurplusTreasurystock

Retainedearnings

Other components ofequityTranslation
adjustments Cash flowof foreign
hedgesoperations

Balance at April 1, 2018
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock

7,790
－

10,381－(386)－

50,282
6,273(3,624)
－

(34)
－

－

－

－

－

(65)

2,421

－

－

－

6,273

(65)

2,421

－

－

(744)

－

－

－

Disposal of treasury stock
Dividends
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Total transactions withowners

－
－

24
－

70
－

－
(3,667)

－
－

－
－

－

－

－

(11)

－

－

－

(52)

104

－

－

－

－

(27)

(568)

(3,679)

－

－

7,790

10,353(955)

52,876(3,690)2,386

Balance at December 31, 2018

(Millions of yen)
Equity attributable to owners of parent
Other components of equity
FinancialassetsRemeasuremeasured atments offair value
definedthrough
benefitotherplanscomprehensive income
Balance at April 1, 2018
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Disposal of treasury stock
Dividends
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Total transactions withownersBalance at December 31, 2018

Total

Total

Total equity

27
－

－
－

(3,632)－64,435
6,273

64,435
6,273

(19)

(16)

2,319

2,319

2,319

(19)

(16)

2,319

8,593

8,593

－
－
－

－
－
－

－
－
－

(744)
95
(3,667)(744)
95(3,667)

(4)

16

11

－

－

－

－

－

52

52

(4)

16

11

(4,264)(4,264)2－(1,300)68,764

68,764－9－

(Millions of yen)
Equity attributable to owners of parent

CapitalsurplusCapitalstock

Balance at April 1, 2019
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Dividends
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Other comprehensive
income related to assets
held for sale
Total transactions withownersBalance at December 31, 2019

Treasurystock

Retainedearnings

Other components ofequityTranslation
adjustments Cash flowof foreign
hedgesoperations

7,790
－

10,353－(955)－

55,547
6,402(3,737)－(1,203)
－

－

－

－

－

37

(753)

－

－

－

6,402

37

(753)

－
－

－
－

(0)
－

－
(4,721)

－
－

－
－

－

－

－

(2)

－

－

－

53

－

－

－

－

－

－

－

－

(0)

－

－

53

(0)

(4,724)

(0)

－

7,790

10,406(955)

57,225(3,700)(1,956)(Millions of yen)
Equity attributable to owners of parent
Other components of equity
FinancialassetsRemeasuremeasured atments offair value
definedthrough
benefitotherplanscomprehensive income
Balance at April 1, 2019
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Dividends
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Other comprehensive
income related to assets
held for sale
Total transactions withownersBalance at December 31, 2019

Other
comprehensive income
related toassets held
for sale

Total

Total

Total equity

8
－

－
－

(4,931)－－－67,804
6,402

67,804
6,402

3

(6)

(719)

－

(719)

(719)

3

(6)

(719)

－

5,683

5,683

－
－

－
－

－
－

－
－

(0)
(4,721)(0)(4,721)

(3)

6

2

－

－

－

－

－

－

－

53

53

(9)

－

(9)

9

－

－

(12)

6

(6)

9

(4,668)(4,668)(0)－(5,657)

9

68,81868,818－10－

(5) Condensed Consolidated Statements of Cash FlowsThe ninemonths ended
December 31,
2018

The ninemonths ended
December 31,
2019

Millions of yen

Millions of yen

Net cash provided by (used in) operating activities
Profit before tax
Profit (loss) before tax from discontinued operations

8,876
345

12,070(486)

Depreciation and amortization
Impairment loss

1,743
15

2,179
2,018

Finance income and finance cost

675
－

1,770

Other non-operating income and expenses
Decrease (increase) in inventories(1,590)52(6,592)

Decrease (increase) in trade and other receivables(26,723)(60,531)

Increase (decrease) in trade and other payables
Other, net

1,584(1,523)563(844)

SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Income taxes refund(16,598)
15(661)(6,265)
1,366(49,800)
19(1,596)(5,891)
1,394(22,142)(55,874)

Payments into time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment(100)(1,725)221(93)(2,119)116

Purchase of intangible assets
Proceeds from sales and redemption of investments
Other, net

(103)
12
(43)

(146)
216
44

Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Repayment of long-term loans payable
Proceeds from sales of treasury stock
Purchase of treasury stock
Cash dividends paid
Other, net(1,739)(1,981)

24,727(1,010)95(744)(3,657)(55)

61,039－－(0)(4,708)(365)

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

19,354
202

55,965(131)

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period(2,021)
16,297

Cash and cash equivalents included in assets held for sale

(4,324)
24,140－Cash and cash equivalents at end of period

19,815

14,065

Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities

－

11

－

(209)

(6) Notes on Assumptions for Going Concern
Not applicable(7) Notes on Condensed Consolidated Financial Statements
1. Reporting entity
Asahi Holdings, Inc.(hereinafter the “Company”) is a company located in Japan. The Company’s condensed
consolidated financial statements for the nine months ended December 31, 2019 comprise the financial
statements of the Company as well as its subsidiaries (hereinafter the “Group”).
For the main activities of the Group, please refer to Note 5. “Segment information.”

2. Basis of preparation(1) Statement of compliance with IFRSThe condensed consolidated financial statements of the Group have been prepared based on IAS 34“Interim Financial Reporting.”
Having met the requirements for a Specified Company under the Designated International AccountingStandards, as prescribed in Article 1-2 of the Ordinance on the Terminology, Forms, and Preparation
Methods of Quarterly Consolidated Financial Statements (Cabinet Office Ordinance No. 64 of 2007), theGroup adopts the provisions of Article 93 of the aforementioned rules.
(2) Basis of measurement
The condensed consolidated financial statements of the Group have been prepared based on costs ofacquisition, except for the specified financial instruments that have been measured at fair value.
(3) Functional currency and presentation currency
The condensed consolidated financial statements of the Group are presented in Japanese yen, which isthe functional currency of the Company, and figures less than one million yen are rounded down to thenearest million yen.

3. Changes in accounting policies
The significant accounting policies adopted for the condensed consolidated financial statements are thesame as those for the consolidated financial statements for the fiscal year ended March 31, 2019, with the
exception of the items described below.
The income tax for the nine months ended December 31, 2019 was calculated based on the estimatedaverage annual effective tax rate.
(1) Leases
The Group adopted the standards shown below in the first quarterly consolidated accounting period.
IFRS
IFRS 16

Overview of new and revised items
Leases

Revision of accounting procedures on leases

The Group adopted IFRS 16 “Leases” (announced in January 2016, hereinafter referred to as “IFRS 16”)
in the first quarterly consolidated period.
IFRS 16, which replaces the former IAS 17 for lease transactions of the lessee, prescribes the eliminationof the classification between operating leases and finance leases and introduction of a single accounting
model to record assets and liabilities in relation to all important lease transactions.
As of the lease commencement date, right-of-use assets are measured at acquisition cost, and leaseliabilities are measured at the present value of remaining lease payments as of the lease commencement
date. When the ownership of the underlying asset is transferred to the Group prior to the termination of thelease period, or when the exercise of a purchase option is reflected in the acquisition price of the right-of-use
asset, the right-of-use asset is depreciated using the straight-line method based on its useful life. In othercases, right-of-use assets are depreciated using the straight-line method based on either the useful life or at
the termination of the lease period, whichever is shorter. Lease payments are apportioned between finance
－

12

－

costs and repayment of lease obligations based on the interest method, and financial costs are recognized in
the consolidated statement of profit and loss.
The lease period is determined by adjusting the period subject to an option to extend or terminate the leasethat can be exercised with reasonable certainty during the non-cancelable period as set forth in the lease
contract. The rate used in calculating the present value of the lease payments is the interest rate implicit in
the lease or the lessee’s incremental borrowing rate.
Short-term leases with a lease term of 12 months or less and leases of low-value underlying assets arerecognized as expenses on either a straight-line basis or another systematic basis over the lease term for the
total lease payments.
The method adopted in the application of IFRS 16 is to recognize the cumulative effect of applying thisstandard at the date of initial application that is approved as an interim measure without retrospectively
adjusting the balance in the earlier reporting periods.
In transitioning to IFRS 16, the Company chose to adopt the practical expedient of succeeding the previous
assessment of which transactions constitute leases. IFRS 16 is applied only to contracts that were identified
as leases under the previous IAS 17 and IFRIC 4 and a review on whether the contracts correspond to leases
is not performed on contracts not previously identified as leases.
Consequently, the identification of leases based on IFRS 16 is applied solely to contracts that were signed
or changed after the initial date of application.
For leases that were classified as operating leases under IAS 17, lease liabilities on transition are initiallymeasured at the present value of the total remaining leases as of the date of transition, discounted at theincremental borrowing rate of the lessee. Right-of-use assets are recorded at the same value as leaseliabilities. The weighted-average for incremental borrowing rate of the lessee applied to lease liabilities
recognized in the summary quarterly consolidated financial statements as of the date of initial application
is 0.4%.
Also, the Company has used the practical expedients in the past as shown below prior to the applicationof IFRS 16 to leases classified as operating leases with the application of IAS 17:* Rely on an assessment of whether leases are onerous in accordance with IAS 37 “Provisions, Contingent
Liabilities and Contingent Assets” immediately before the date of initial application as an alternative toperforming an impairment review.
* Apply a single discount rate to a portfolio of leases with reasonably similar characteristics* Account for leases for which the lease term ends within 12 months of the date of initial application in thesame way as short-term leases* Exclude initial direct costs from the measurement of right-of-use assets at the date of initial application* Use hindsight: e.g. in determining the lease term of the contract that contains options to extend or
terminate the lease.
The differential between the lease liabilities recognized on the day of initial application and total future
minimum lease payments on operating leases that cannot be terminated, disclosed by applying IAS 17, as ofthe end of the consolidated accounting year immediately before the date of initial application is 1,652 million
yen. A major reason behind this differential is a review of the lease period performed upon the application of
IFRS 16.
The carrying amount of right-of-use assets and lease liabilities as of April 1, 2019 for leases classified as
finance leases under IAS 17 is calculated at the carrying amount of lease assets and lease liabilities according
to IAS 17 as of the day immediately preceding the above date.
In transitioning to IFRS 16, the Company recorded 2,138 million yen, 507 million yen and 1,631 million
yen as Property, plant and equipment, other financial liabilities (current) and other financial liabilities (noncurrent), respectively, at the beginning of the period.
The impact of the transition on the quarterly profits and cash flow during the current third quarter
consolidated cumulative period remains minimal.

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13

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(2) Discontinued operations
The Group recognizes any component of a company that has already been disposed of or has been classified
as held for sale and that falls under either one of the following categories as a discontinued operation:• It represents a major independent business area or operating territory.
• It is a component of a consolidated plan to dispose of a major independent business area or operating
territory.
• It is a subsidiary that has been acquired solely for the purpose of resale.
The after-tax gain or loss on discontinued operations and the after-tax gain or loss recognized after the
disposal of the disposal group that constitutes the discontinued operations are reported separately fromcontinued operations as profit from discontinued operations in the condensed consolidated income statement.
The disclosed data on prior periods have also been restated accordingly.
Note 7 discloses additional information related to discontinued operations while notes to the summary of
all other quarterly consolidated financial statements show the amounts relating to continuing operations,
unless otherwise specified.

4. Significant accounting estimates and associated judgments
In preparing condensed consolidated financial statements, the management is required to make judgment,
estimates and assumptions that affect the adoption of accounting policies and the amounts of assets, liabilities,
revenues and expenses. Actual results may differ from such estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. The effect of a change inaccounting estimates is recognized as the accounting period in which such change occurs as well as theaccounting periods to be affected in the future.
The estimates and judgments made by the management that may have material impacts on the figures in
the condensed consolidated financial statements are the same as those for the consolidated financial
statements for the fiscal year ended March 31, 2019.

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14

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5. Segment information(1) Overview of reporting segments
The Group’s reporting segments are those Group constituent units for which separate financial
information is obtainable, and which the Board of Directors subjects to regular examination in order todecide the allocation of management resources and evaluate business results.
As a pure holding company, the Company is in charge of overall strategic function for the Group, whereas
operating companies of the Group engage in the precious and rare metals recycling business and therefining and processing business, industrial waste management and other environmental preservation
business.
Therefore, the Group is composed of product and service segments based on business sectors. The tworeporting segments are the Precious Metal Business and the Environmental Preservation Business.
Meanwhile, these reporting segments are not be aggregated.
The Precious Metals Business engages mainly in recycling and selling of precious and rare metals suchas gold, silver, palladium, and platinum, as well as refining and processing of precious metals such as goldand silver. The main work of Environmental Preservation Business is the collection, transport andintermediate processing of industrial waste, the manufacture and sales of electric heaters.
On December 20, 2019, the Company signed an agreement on the partial equity transfer of Fuji Medical
Instruments MFG. Co., Ltd. (hereinafter referred to as “Fuji”) to Johnson Health Tech Co., Ltd., a company
listed on the Taiwan Stock Exchange. Consequently, the Company classified the business of Fuji underdiscontinuing operations and eliminated the relevant data from the consolidated cumulative third quarterin the current year and in the previous year. Please refer to Note “7. Discontinued Operations” for details
on discontinued operations.
Also, starting in the current consolidated cumulative third quarter, the number of reporting segments
was reduced from 3 (three) in the past: “Precious Metals business”, “Environmental Preservation business”
and “Life & Health business” to 2 (two): “Precious Metals business” and “Environmental Preservation
business.” This step was taken in response to partial changes in the Group’s business management
structure following the classification of Fuji, which constituted a core section of the “Life & Health business”,
into discontinued operations. In line with this change, the Company transferred the business of INTER
CENTRAL, INC. from “Life & Health business” to “Environmental Preservation business” category in theprevious consolidated cumulative third quarter. Also, the business of KOEIKOGYO CO., LTD., transferredfrom “Life & Health business” to “Other” because it sold all shares and was excluded from consolidation.

－

15

－

(2) Segment revenue and performance
Accounting policies of the reporting segments are the same as those of the Group stated in “Note 3.

Changes in accounting policies.”
Revenue and other performance of each reportable segment of the Group are as follows.
For the nine months ended December 31, 2018 (from April 1, 2018 to December 31, 2018)(Millions of yen)
Reporting segment
Precious Metals
Business

Environmental
Preservation
Business

62,352

14,11076,462

1,983

－

34

34

Total

62,352

14,145

Operating income
by businesssegment

8,720

2,628

Revenue
External
revenue
Intersegment
revenue

Adjustment

Consolidated

78,445－78,445

0

34

(34)

－

76,497

1,983

78,480(34)

78,445

11,34979

11,429(1,834)

9,595

Subtotal

Total

Other

Finance income

15

Finance costs(734)

Profit before tax

8,876(Note) 1. Intersegment transactions are based on prevailing market prices.
2. Adjustments of operating income by business segment are mainly corporate expenses that are notallocated to each reporting segment.
For the nine months ended December 31, 2019 (from April 1, 2019 to December 31, 2019)(Millions of yen)
Reporting segment
Precious
Metals Business

Environmental
Preservation
Business

82,755

15,28098,036

1,072

－

3

3

Total

82,755

15,284

Operating income
by businesssegment

12,404

3,027

Revenue
External
revenue
Intersegment
revenue

Total

Adjustment

Consolidated

99,108－

99,108

－

3

(3)

－

98,039

1,072

99,112(3)

99,10815,43160

15,492(1,597)

13,894

Other

Subtotal

Finance income
Finance costs
Other nonoperating income
Other nonoperating
expenses

18(1,789)Profit before tax

12,070

87

(140)

－

16

－

(Note) 1. Intersegment transactions are based on prevailing market prices.
2. Adjustments of operating income by business segment are mainly corporate expenses that are notallocated to each reporting segment.

6. Impairment loss
The impairment loss of 997 million yen on property, plant and equipment recognized during the ninemonths ended December 31, 2019 was due to the decision of disposal of gold and silver refining facilities(buildings and machinery) in Asahi Refining Florida Inc. belonging to the segment of Precious Metals
Business to further enhance the efficiency and profitability of business in North American. And the bookvalue of the property, plant and equipment has been reduced to the recoverable amount. The recoverable
value is measured based on the fair value less costs of disposal, and the fair value less costs of disposal isevaluated using the reasonably calculated value based on the expected value of disposal. The fair value
hierarchy level is 3. Impairment losses are recorded in “Other operating expenses” in the condensed
consolidated statements of income.

7. Discontinued operations(1) Outline of discontinued operations
We have entered into an agreement to transfer 60% of all Fuji Medical Instruments Mfg. Co., Ltd’s shares to
Johnson Health Tech. Co., Ltd., a listed company on the Taiwan Stock Exchange, on December 20, 2019.
For this reason, profit and loss as well as cash flows relating to Fuji in the current consolidated cumulative
third quarter are classified as discontinued operations, while those for the previous consolidated cumulative
third quarter are restated, with the discontinued operations concerned displayed in a separate category.
(2) Discontinued operations performance(Millions of yen)
The nine months ended
December 31, 2018

The nine months ended
December 31, 2019

Revenue and expense of discontinued operations
Revenue

12,96913,698

Expense (note）(12,624)(14,185)

Profit (loss) before tax from discontinued
operations

345

(486)

Corporate income tax expense (note）

(88)

(653)

Profit (loss) from discontinued operations

257(1,140)(Note) This includes losses worth 1,020 million yen, which were recognized by the measurement in the current
consolidated cumulative third quarter of the disposal group that constitutes discontinued operations at fair valueless selling cost. Corporation income tax expenses pertaining to this change totaled 487 million yen.
(3) Cash flow from discontinued operations(Millions of yen)
The nine months ended
December 31, 2018

The nine months ended
December 31, 2019

Cash flow from discontinued operations
Net cash provided by (used in) operating
activities
Net cash provided by (used in) investing
activities
Net cash provided by (used in) financing
activities
Total

－

17

－

(315)

1,388

(10)

(80)

285

(1,493)

(40)

(184)

8. Subsequent events
Not applicable－18－