Consolidated Financial Results for the First Quarter Ended June 30, 2016
Asahi Holdings, Inc. [IFRS]July 28, 2016

Stock code:
Shares listed:

5857
Tokyo Stock Exchange (First Section)

URL:
Representative

http://www.asahiholdings.com
Mitsuharu Terayama, President & CEO

For further information please contact:

Koji Sasaya, Human Resources and General Administration
Department, Corporate Planning & Communications
Department General Manager(Phone) +81-3-6270-1833

Filing date of Quarterly Report:
Start of dividend payment:

August 12, 2016–

Supplementary materials for the financial results:
Investor conference for the financial results:

No
No(Rounded down to the nearest million yen)

1. Results of the three months ended June 30, 2016 (From April 1, 2016 to June 30, 2016)(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 three months ended
June 30, 2016
June 30, 2015

Millions of yen%

27,800 (14.4)
32,466 －2,645 (6.7)
2,834 －

2,517 (11.8)
2,854 －

1,893 (3.7)
1,966 －

Basic earning per share

Diluted earning per share

Yen
57.64
58.58

Yen
－
58.54

The three months ended
June 30, 2016
June 30, 2015

1,879 (2.1)
1,919 －

127 (96.1)
3,304 －

(2) Financial Position

As ofJune 30, 2016
March 31, 2016

Total assets

Total equity

Equity attributable toowners of parent

Equity attributable toowners of parent ratio

Millions of yen
94,156
101,599

Millions of yen
48,134
48,988Millions of yen
47,724
48,591

50.7
47.8

%

2. Dividend payments
Dividends per share

Year ended March 31, 2016
Year ending March 31, 2017
Year ending March 31, 2017
(Forecast)First quarter

Second quarter

Third quarter

Year-end

Annual

Yen

Yen
30.00

Yen
－

Yen
30.00

Yen
60.00

30.00

－

30.00

60.00

－
－

(Note) Revisions in dividend forecast in the current quarter: No

3. Forecast (From April 1, 2016 to March 31, 2017)(Percentage: Changes relative to corresponding previous period)
Operating
Profit before Profit attributable to
Basic earning
owners of parent
per share
incometax

Revenue
1st half
Year ending March 31, 2017

Millions of yen%

Millions of yen%

53,000110,000－－

5,000
10,000－－%Millions of yen

5,000
10,000Millions of yen

%

Yen

3,400
6,600

－
－

104.30202.46－－(Note) Revisions in forecast in the current quarter: Yes* 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: No(ii) Changes other than (i) above: No(iii) Changes in accounting estimates: No(3) Number of issued shares (common stock)(i) Number of issued shares at the quarter end (including treasury shares)
As of June 30, 201636,254,344 shares

As of March 31, 201636,254,344 shares(ii) Number of treasury shares at the quarter end
As of June 30, 2016

3,654,787 shares

As of March 31, 2016

3,654,607 shares(iii) Averaged number of shares during the period (quarterly cumulative period)
Three months ended June 30, 2016

32,599,647 shares

Three months ended June 30, 2015

32,776,462 shares*Indication regarding the situation of quarterly review procedures
These financial results are not subject to the quarterly review procedures pursuant to the Financial
Instruments and Exchange Act; the procedures for reviewing quarterly financial statements pursuant to the
Financial Instruments and Exchange Act are in progress at the time of disclosure of these financial results.
*Statement regarding the proper use of financial forecasts and other special remarks(IFRS adoption)
The Group has adopted IFRS starting from the three months ended June 30, 2016. For details about thedifferences between IFRS and Japanese GAAP with respect to financial figures, please refer to “3. Condensed
Consolidated Financial Statements (7) Notes on Condensed Consolidated Financial Statements 7. First-time
Adoption” on page 25 of the appendix of the consolidated financial results.
(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 three months ended June 30, 2016 .............

2(3) Consolidated Performance Forecasts .......................................................................................................

4

2. Notes Regarding Summary Information ......................................................................................................

4(1) Changes in important subsidiaries during the current quarter.............................................................

4(2) Changes in accounting policies, accounting estimates ...........................................................................

4

3. Condensed Consolidated Financial Statements ...........................................................................................

5(1) Condensed Consolidated Statements of Financial Position ...................................................................

5(2) Condensed Consolidated Statements of Income for the three months ended June 30, 2016 ...............
(3) Condensed Consolidated Statements of Comprehensive Income for the three months ended June30, 2016......................................................................................................................................................
(4) Condensed Consolidated Statements of Changes in Equity ...................................................................

789(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. Significant accounting policies............................................................................................................ 13
4. Significant accounting estimates and associated judgements .......................................................... 22
5. Segment information ........................................................................................................................... 23
6. Subsequent events ............................................................................................................................... 24
7. First-time adoption .............................................................................................................................. 25－

1 －1. Qualitative Information(1) Consolidated Business Performance
In the Japanese economy during the first quarter of the current fiscal year (April 1, 2016 to June 30, 2016),
a standstill is apparent with regard to corporate earnings, and personal consumption as well is in a situationthat lacks vigor. In addition, there was a deepened sense of uncertainty concerning economic prospects due toelements such as economic disorder in Europe stemming from the United Kingdom's vote to withdraw fromthe EU, the stagnation of emerging countries' economies, and so forth.
Under these economic conditions, the group’s results in each business segment were as follows.
Precious metal business
Volume of collection in the precious metals recycling business was as follows. In the electronics sector,
amidst the contraction of the domestic market continues, due to expanded shares for the E-scrap business andthe precision cleaning business, the volume of collection of gold was at the same level as it was during thesame period a year earlier. In the dental sector, influenced by a decline in the amount of precious metals used
for dental materials, the volume of collection of gold and palladium decreased compared to that of the same
period a year earlier. In the jewelry sector, due to a decrease in the volume of circulation into the purchasing
market, there was a lower year-on-year volume of collection of gold and platinum. In the automotive catalyst
sector, while the number of domestic scrapped vehicles decreased, the year-on-year volume of collection of
palladium increased.
The average prices of gold, silver, palladium, and platinum were lower compared with the same period lastyear.
Further, for the gold and silver refining business in North America, both processing volume and unit pricefor commissioned refining business remained at a low level.
Environmental preservation business
While the production activity of domestic businesses continued to slump and wastes decreased, as the resultof putting efforts into new cultivation activities and the acquisition of projects that leverage the group
network, the performance was solid for the segment as a whole.
Life & health businessIn the healthcare equipment sector, amidst lacking recovery for personal consumption, sales for the major
massage chairs were sluggish. In addition to the promotion of sales for small massage chairs such as seatmassagers, sales development is being undertaken positioning hearing aids, electrolytic hydrogen water
ionizers, and so forth as strategic products. With regard to firefighting facility-related matters, due to anincrease in building construction in the Tokyo metropolitan area, the sales performance was strong.
As a result of the above, revenue during the first quarter of the current fiscal year was 27,800 million yen, a
year-on-year decrease of 4,666 million yen (-14.4 percent). Operating income was 2,645 million yen, a decreaseof 188 million yen (-6.7 percent) year-on-year. Profit before tax was 2,517 million yen, a year-on-year decreaseof 337 million yen (-11.8 percent). Profit was 1,893 million yen, a year-on-year decrease of 72 million yen (-3.7
percent). Profit attributable to owners of parent for the period was therefore 1,879 million yen, a decrease of
40 million yen (-2.1 percent) year-on-year. By segment, revenue in the precious metal business was 18,369
million yen, a year-on-year decrease of 4,145 million yen (-18.4 percent). In the environmental preservation
business, revenue was 3,868 million yen, and increase of 250 million yen (+6.9 percent) year-on-year. Revenue
in the life & health business was 5,580 million yen, down 781 million yen (-12.3 percent) year-on-year.
Figures stated in these financial results are presented on the basis of the International Financial ReportingStandards (IFRS). Figures for the three months ended June 30, 2015 and the full-year figures for the previous
fiscal year have been presented on the basis of IFRS through the reclassification of the JGAAP-based figures
disclosed in the previous fiscal year.

(2) Consolidated Financial Position and Cash Flows for the three months ended June 30, 2016
As of June 30, 2016, total assets amounted to 94,156 million yen, down 7,442 million yen from the previous
fiscal year end. This was due mainly to the decrease of 4,277 million yen in cash and cash equivalents.
Total liabilities amounted to 46,021 million yen, down 6,589 million yen from the previous fiscal year end.
－

2 －This was due mainly to the decrease of 4,480 million yen in loans payable.
Total equity amounted to 48,134 million yen, down 853 million yen from the previous fiscal year end. Thiswas due mainly to other components of equity of 1,783 million yen.
As a result, the equity attributable to owners of parent ratio changed to 50.7%, from 47.8% at the end of theprevious fiscal year.
Net cash provided by operating activities amounted to 608 million yen due mainly to 2,517 million yen of
profit before tax , 575 million yen of depreciation and amortization, 878 million yen of decrease in inventories,
1,448 million yen of increase in trade and other receivables, and 3,089 million yen of income taxes paid .
Net cash used in investing activities amounted to 160 million yen due mainly to 265 million yen of purchaseof property, plant and equipment.
Net cash used in financial activities amounted to 4,496 million yen due mainly to 5,135 million yen of
repayment of long-term loans payable.
As a result, cash and cash equivalents (hereinafter the “funds”) as of June 30, 2016 decreased 4,277 million
yen from March 31, 2016, to 12,287 million yen.

－

3 －(3) Consolidated Performance Forecasts
We have revised our six-months forecast reflecting its consolidated business results of the first quarter andthe business environment.
There are no changes to the previously announced (May 10, 2016) full-year forecast for the year ending
March 31, 2017.
Revision of the first half period consolidated results forecast（April 1, 2016 to September 30, 2016）

OperatingincomeRevenue

Profit before
tax（Millions of yen, ％）ProfitBasic earning
attributable toowners ofper share
parentPrevious Forecast (A)(Announced on May 10, 2016)

53,000

4,500

4,500

2,900

88.96

Revised Forecast (B)53,000

5,000

5,000

3,400

104.30Change (B－A)

－

500

500

500

－

Change (%)

－

11.1

11.1

17.2

－

2. Notes Regarding Summary Information(1) Changes in important subsidiaries during the current quarter
Not applicable(2) Changes in accounting policies, accounting estimates
Not applicable－4 －3. Condensed Consolidated Financial Statements(1) Condensed Consolidated Statements of Financial Position
As ofApril 1, 2015
(Date oftransition to
IFRS)Millions of
yen

As of
March 31,
2016

As of
June 30,
2016

Millions ofyenMillions ofyen

ASSETS
Current assets
Cash and cash equivalents

10,841

16,564

12,287

Trade and other receivables
Inventories

15,851
15,817

14,64415,09015,84614,184

Income tax receivables
Other financial assets

2,506
674

2,520
105

1,604
199

Other current assets

930

811

505

Subtotal
Assets held for sale

46,622－

49,737－44,62815

46,622

49,73744,643

Property, plant and equipment
Goodwill

33,663
21,737

31,78816,92231,01815,661Intangible assets
Deferred tax assets

906
1,291

969
1,381
－

989
1,085

Total current assets
Non-current assets

Net defined benefit asset
Financial assets

154
807

771

11
721

Other non-current assets

13

27

23

Total non-current assets

58,57351,86149,512

105,195

101,599

94,156

Total assets－

5 －As ofApril 1, 2015
(Date oftransition to
IFRS)Millions of
yen

As of
March 31,
2016

As of
June 30,
2016

Millions ofyenMillions ofyen

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

11,787
26,441

15,125
7,115

15,438
3,744

Income tax payable
Other financial liabilities

2,111
46

2,012
187

497
37

Provisions
Other current liabilities

1,259
3,638

1,522
2,953

907
1,917

Total current liabilities
Non-current liabilities

45,28628,91722,543Loans payable
Deferred tax liabilities

6,550
2,061

20,503
1,582

19,394
1,531

126
72

137
2,413

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

0

142
1,465
－

Total non-current liabilities

8,810

23,693

23,47854,096

52,61046,021

Total liabilities
EquityCapital stock

2

4,480

4,480

4,480

Capital surplus
Treasury stock

6,116(5,159)6,112(5,371)

6,116(5,371)Retained earnings
Other components of equity

44,999346

45,845(2,476)46,759(4,260)50,783

48,59147,724

Total equity attributable to owners ofparentNon-controlling interests
Total equity
Total liabilities and equity

－

6 －

315

396

409

51,09848,98848,134105,195

101,599

94,156

(2) Condensed Consolidated Statements of Income for the three months ended June 30, 2016
The three months
ended June 30, 2015

The three months
ended June 30, 2016

Millions of yen

Millions of yen

Revenue
Cost of sales

32,466(25,716)

27,800(22,008)

Gross profit
Selling, general and administrative expenses

6,750(3,928)

5,792(3,786)

20
(8)

650
(10)

Operating income

2,834

2,645

Finance income
Finance cost

69
(50)

5
(134)

Profit before tax
Income tax expenses

2,854
(887)

2,517
(623)

Profit

1,966

1,893

Profit attributable to:
Owners of parent

1,919

1,879

46

14

1,966

1,893

58.58
58.54

57.64
57.64

Other operating income
Other operating expenses

Non-controlling interests
ProfitEarning per share
Basic earning per share (Yen)
Diluted earning per share (Yen)－7 －(3) Condensed Consolidated Statements of Comprehensive Income for the three months ended
June 30, 2016
The three months
ended June 30, 2015

The three months
ended June 30, 2016

Millions of yen

Millions of yen

Profit

1,966

1,893

Financial assets measured at fair value
through other comprehensive income

5

(20)

Remeasurements of defined benefit plans

35

22

Total items that will not be reclassified to profit
or loss

40

2

Cash flow hedges
Translation adjustments of foreign operations

(59)
1,357

194
(1,962)

Total items that will be reclassified to profit or
loss

1,297

(1,767)

1,338(1,765)

3,304

127

3,257
47

114
13

3,304

127

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
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Non-controlling interests
Comprehensive income－

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

Capitalstock

Balance at April 1, 2015
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Disposal of treasury stock
Dividends
Lapse of subscription rights
to shares
Reclassified from othercomponents of equity toretained earnings
Total transactions withownersBalance at June 30, 2015

CapitalsurplusTreasurystock

Retainedearnings

Other components ofequityTranslation
adjustments Cash flowof foreign
hedgesoperations

4,480
－

6,116
－

(5,159)－44,999
1,919

－
－

313
－

－

－

－

－

1,357

(59)

－

－

－

1,919

1,357

(59)

－
－
－

－
37
－

(0)
116
－

－
－
(982)

－
－
－

－
－
－

－

(1)

－

1

－

－

－

－

－

35

－

－

－

35

116

(944)

－

－

4,480

6,152

(5,043)45,974

1,357

253(Millions of yen)
Equity attributable to owners of parent
Other components of equity
FinancialassetsRemeasuremeasured atments offair value
definedthrough
benefitotherplanscomprehensive income
Balance at April 1, 2015
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Disposal of treasury stock
Dividends
Lapse of subscription rights
to shares
Reclassified from othercomponents of equity toretained earnings
Total transactions withownersBalance at June 30, 2015

Noncontrollinginterests

Total

Total

Total

33
－

－
－

346
－

50,783
1,919

315
46

51,098
1,966

5

35

1,337

1,337

0

1,338

5

35

1,337

3,257

47

3,304

－
－
－

－
－
－

－
－
－

(0)
154
(982)

－
－
－

(0)
154
(982)

－

－

－

－

－

－

－

(35)

(35)

－

－

－

－

(35)

(35)

(828)

－

(828)

38

－

1,649

53,213362

53,575－9 －(Millions of yen)
Equity attributable to owners of parent

Capitalstock

Balance at April 1, 2016
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 June 30, 2016

CapitalsurplusTreasurystock

Retainedearnings

Other components ofequityTranslation
adjustments Cash flowof foreign
hedgesoperations

4,480
－

6,112
－

(5,371)－45,845
1,879(2,125)
－

(380)
－

－

－

－

－

(1,961)

194

－

－

－

1,879

(1,961)

194

－
－
－

－
－

(0)
－
－

－
－
(984)

－
－
－

－
－
－

－

－

－

19

－

－

－

3

－

－

－

－

－

3

(0)

(965)

－

－

4,480

6,116

(5,371)46,759(4,087)(185)(Millions of yen)
Equity attributable to owners of parent
Other components of equity
FinancialassetsRemeasuremeasured atments offair value
definedthrough
benefitotherplanscomprehensive income
Balance at April 1, 2016
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 June 30, 2016

Noncontrollinginterests

Total

Total

Total

29
－

－
－

(2,476)－

48,591
1,879

396
14

48,988
1,893

(20)

22

(1,764)(1,764)(1)(1,765)(20)

22(1,764)

114

13

127

－
－
－

－
－
－

－
－
－

(0)
－
(984)

－
－
－

(0)
－
(984)

3

(22)

(19)

－

－

－

－

－

－

3

－

3

3

(22)

(19)

(981)

－

(981)

11

－

(4,260)47,724409

48,134－10 －(5) Condensed Consolidated Statements of Cash FlowsThe threemonths ended
June 30,
2015

The threemonths ended
June 30,
2016

Millions of yen

Millions of yen

2,854
603
－

2,517
575

Net cash provided by (used in) operating activities
Profit before tax
Depreciation and amortization
Impairment loss
Finance income and finance cost

34

1
96

Decrease (increase) in inventories
Decrease (increase) in trade and other receivables

842
(552)

878
(1,448)

Increase (decrease) in trade and other payables
Other, net(73)(1,066)482(294)

SubtotalInterest and dividends income received

2,642
17

2,808
4

Interest expenses paid
Income taxes paid

(43)
(3,499)(27)(3,089)

Income taxes refund

486

913

Net cash provided by (used in) operating activities

(397)

608

Net cash provided by (used in) investing activities
Proceeds from withdrawal of time deposits

9－

Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment

(509)
7

(265)
169

Purchase of intangible assets
Other, net

(54)
(8)

(51)
(12)

Net cash provided by (used in) investing activities

(554)

(160)

Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable

(300)

1,627

Repayment of long-term loans payable
Purchase of treasury stock

(135)
(0)

(5,135)(0)Cash dividends paid
Other, net

(973)
142

(976)
(11)

(1,266)(4,496)

(61)

(230)

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period(2,280)10,841(4,277)
16,564

Cash and cash equivalents at end of period

8,560

12,287

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

－

11 －

(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 three months ended June 30, 2016 comprise thefinancial statements of the Company as well as its subsidiaries (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 IFRS and matters regarding the first-time adoption thereof
The 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.
The Group has adopted International Financial Reporting Standards (“IFRS”) from the fiscal year
ending March 31, 2017 (from April 1, 2016 to March 31, 2017). Thus, the annual consolidated financial
statements for the fiscal year ending March 31, 2017 are the first consolidated financial statements
prepared based on IFRS standards.
The date of transition to IFRS was April 1, 2015, and the impacts of the transition to IFRS on theGroup’s financial position, business performance and cash flows are described in Note 7. First-time
adoption.
(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 as
mentioned in Note 3. Significant accounting policies.
(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.
(4) Early adoption of new standards
The Group has implemented an early adoption of IFRS 9 “Financial Instruments” (published in
November 2009, and revised in July 2014), as from the date of transition to IFRS.

－

12 －

3. Significant accounting policies
Accounting policies stated below have been continuously applied to all the periods stated in thesecondensed consolidated financial statements (including the consolidated statements of financial position at
the date of transition to IFRS).
(1) Basis of consolidation
Subsidiaries
A subsidiary is an entity that is controlled by the Group companies. The Group considers that it hascontrol over an entity when it has exposures or rights to variable returns arising from its involvementwith the entity, while having the ability to affect those returns through the exercise of its power overthe entity.
Financial statements of a subsidiary are consolidated from the date on which the Group obtains
control over such subsidiary, until the date on which the control is lost.
If the accounting policy adopted by a subsidiary is different from that adopted by the Group, financial
statements of such subsidiary shall be subject to adjustment as deemed necessary. Intra-Groupbalances of receivables and payables and intra-Group transactions, as well as unrealized gains or losses
arising from the intra-Group transactions shall be eliminated at the time when consolidated financial
statements are prepared.
If the Group loses control over the subsidiary, gains or losses derived from such loss shall berecognized as profit or loss.
(2) Business combinations
Business combinations are accounted for by using the acquisition method. Consideration for an
acquisition is measured at the sum of the acquisition-date fair value of the assets transferred, liabilities
assumed, equity instruments issued by the Group in exchange for the control over the acquiree. If thesum of the fair value of consideration for the acquisition, amount of non-controlling interests in theacquiree, and (if it is a step acquisition) equity interests in the acquiree held previously by the acquirer
exceeds the net amount of identifiable assets and liabilities, such excess is recognized as goodwill in the
consolidated statements of financial position. If, conversely, the sum turns out to be less than the net
amount of identifiable assets and liabilities, the balance shall be directly recognized as revenue in the
consolidated statements of income.
Costs incurred by the Group companies in connection with the business combinations, such as agent
commissions, legal fees and due diligence costs, are recognized as expenses in the period in which they
are incurred.
If the initial accounting for business combinations is incomplete by the end of the fiscal year in which
the business combinations occur, the Group companies report provisional amounts for the items for which
the accounting is incomplete. Those provisional amounts are retrospectively adjusted during themeasurement period to reflect new information obtained about facts and circumstances that existed at
the acquisition date that, if known, would have affected the amounts recognized as of that date.
Additional assets or liabilities are recognized if new information is known to have resulted in the
additional recognition of assets or liabilities. The measurement period does not exceed one year.
Additional acquisition of the non-controlling interests is accounted for as an equity transaction, in
which no goodwill shall be recognized.
Identifiable assets and liabilities in the acquiree are measured at their acquisition-date fair value,
except for the following.
- Deferred tax assets and liabilities, as well as assets and liabilities associated with employee benefits
contracts- Contract on compensation based on the shares in the acquiree- Assets or asset disposal groups classified into those held for sale in accordance with IFRS 5 “Noncurrent Assets Held for Sale and Discontinued Operations”

－

13 －

(3) Foreign currencies
1) Foreign currency transactions
Foreign currency transactions are translated into the functional currencies of individual Group
companies using the exchange rate at the date of transactions.
At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies
are translated into functional currencies using the exchange rate at the end of the reporting period.
Non-monetary assets and liabilities measured at fair value and are denominated in foreign
currencies are translated using the exchange rate at the date when such fair value was determined.
Translation adjustments arising from translations or settlements are recognized as profit or loss;
provided, however, that translation adjustments arising from financial assets measured through othercomprehensive income as well as from cash flow hedges are recognized as other comprehensive income.
2) Financial statements of foreign operations
Assets and liabilities of foreign operations are translated into Japanese yen using the exchange rates
at the end of the reporting period. Income and expenses are translated into Japanese yen using the
average exchange rates for the fiscal year unless exchange rates significantly fluctuate during theperiod. Translation adjustments arising from translation of financial statements of foreign operations
are recognized as other comprehensive income. Such translation adjustments of foreign operations arerecognized as profit or loss for the period in which the foreign operations concerned are disposed of.
(4) Financial instruments
1) Financial assets(i) Initial recognition and measurement
The Group classifies financial assets into financial assets that are recognized when it becomes aparty to the contract on the financial instruments concerned, and measured at fair value throughprofit or loss, or through other comprehensive income, and financial assets measured at amortizedcost.
All financial assets are measured at fair value plus transaction expenses, except for thoseclassified into a category subject to fair value measurement through profit or loss.
Financial assets are classified into financial assets measured at amortized cost, on the condition
that they meet both of the following criteria.
- Financial assets are held based on the business model to hold financial assets for the purposeof collecting contractual cash flows.
- Contractual terms associated with financial assets gives rise to cash flows on specified dates,consisting only of payment of the principal and interest on the principal balance.
All financial assets other than those measured at amortized cost, are classified into financial
assets measured at fair value.
With respect to financial assets measured at fair value, excluding equity instruments held for
trading subjected to fair value measurement through profit or loss, each equity instrument shall be
designated whether to be measured at fair value through profit or loss, or measured at fair value
through other comprehensive income, and such designation shall remain applicable to each such
instrument thereafter.
(ii) Subsequent measurement
Measurement of financial assets after the initial recognition shall be as follows, depending on
respective classification.
(a) Financial assets measured at amortized cost
Financial assets measured at amortized cost are measured at amortized cost using the effective
interest method.
(b) Financial assets measured at fair value
Changes in the fair value of financial assets measured at fair value are recognized as profit orloss, provided, however, that changes in the fair value of those equity instruments designated to be－

14 －measured at fair value through other comprehensive income, shall be recognized as othercomprehensive income. Such amount recognized as other comprehensive income shall not betransferred to profit or loss ex post facto. When financial assets are derecognized, amounts
previously recognized in other comprehensive income are directly reclassified into retained
earnings. Meanwhile, dividend from such financial assets shall be recognized as profit or loss forthe period, as part of finance income.
(iii) Impairment of financial assets
The Group recognizes impairment of financial assets, based on the determination at the end ofeach reporting period as to whether financial assets or financial assets group measured atamortized cost present significant increase in credit risk since their initial recognition. Specifically,
if there is no significant increase in credit risk since their initial recognition, estimated credit loss
in the next 12 months is recognized as allowance for doubtful accounts. On the other hand, if there
is a significant increase in credit risk since their initial recognition, estimated credit loss duringresidual period of the financial assets is recognized as allowance for doubtful accounts. Whether
there is a significant increase in credit risk or not is determined by the change in default risk, andwhether there is a change in default risk or not is determined based on considerations including
significant change in the external credit rating of the financial instruments, adverse change in thebusiness condition or financial position, and overdue information, provided, however, that tradereceivables are subject to recognition of estimated credit loss for the residual period of the financial
assets since initial recognition.
Estimated credit loss is measured based on the discounted present value of the difference
between the contractually receivable amount and the estimated amount of receipt.
(iv) Derecognition of a financial asset
The Group derecognizes a financial asset when the contractual right to cash flows derived fromthe financial asset expires or nearly all of the risks and rewards of the ownership thereof aretransferred outside the Group. Meanwhile, if the Group remains in control of such transferredfinancial asset, liabilities associated therewith shall be recognized to the extent of its continuous
involvement therein.
2) Financial liabilities(i) Initial recognition and measurement
The Group recognizes financial liabilities when it becomes a party to the contract concerning thefinancial instruments concerned, and they are classified into financial liabilities measured at fairvalue through profit or loss, or those measured at amortized cost.
All financial liabilities are subject to initial measurement at fair value, whereas financial
liabilities measured at amortized cost are subject to measurement at fair value less directly
attributable transaction costs.
(ii) Subsequent measurement
Measurement of financial liabilities subsequent to its initial recognition shall be as follows,
depending on respective classification.
(a) Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss include financial liabilities for
trading purpose as well as financial liabilities designated to be measured at fair value throughprofit or loss at the initial recognition, which thus shall be measured at fair value after the initialrecognition while changes therein shall be recognized as profit or loss.
(b) Financial liabilities measured at amortized cost
Financial liabilities measured at amortized cost are measured at amortized cost subsequent to
the initial recognition, by using the effective interest method.
Amortization by the effective interest method, as well as gains and losses associated with thederecognition shall be recognized as part of financial expenses in profit or loss.
－

15 －(iii) Derecognition of a financial liability
The Group derecognizes a financial liability when it is extinguished, namely when the obligation
specified in the contract is discharged, cancelled or becomes invalid.
3) Presentation of financial assets and liabilities
Financial assets and liabilities are offset, with the net amount presented in the consolidated
statements of financial position, only if the Group companies hold a currently enforceable legal right to
set off the recognized amounts, and there is an intention to settle on a net basis or to realize the asset
and settle the liability simultaneously.
4) Derivatives and hedge accounting
The Group uses derivatives such as forward exchange contracts and interest rate swaps, as hedging
instruments against foreign exchange risk and interest rate risk. These derivatives are initiallymeasured at fair value at the date of contract, and are subsequently re-measured at fair value.
The Group officially makes designation and prepares documentation at the inception of the hedge,
regarding the hedging relationship to which hedge accounting is applied, as well as the risk
management objectives and strategies in the hedges. Such documentation mainly contains specifichedging instruments, hedged items or transactions, and the method for evaluating the nature of therisks to be hedged and the hedging effectiveness. Such hedges shall be continually evaluated todetermine whether they have been effective throughout the financial reporting periods subject to thehedging designation. Specifically, a hedge is determined to be effective when all of the following criteria
are met.
- Economic relationship between hedged items and hedging instruments is of mutually offsetting
nature- Impact on credit risk is not significantly larger than the changes in valuation derived from theeconomic relationship- Hedge ratio is the same as the ratio determined quantitatively from the hedged items and hedging
instruments practically in use
Hedge accounting used by the Company when criteria for hedge accounting are met, is as follows.
Cash flow hedges
Of the gains or losses associated with the hedging instruments, the portion resulting from hedging
effectiveness shall be recognized as other comprehensive income in the consolidated statements ofcomprehensive income, while the rest shall be recognized as profit or loss directly in the consolidated
statements of income.
The amount associated with hedging instruments recorded in other comprehensive income istransferred to profit or loss, at the point in time when the hedged transactions exerts impact on profit
or loss.
Even in the event that the hedging relationship no longer meets the hedge ratio-based criteria forhedging effectiveness, such ratio associated with the hedging relationship shall be adjusted again tomeet the criteria, insofar as the risk management objectives remain the same (the “rebalancing”).
If, after the rebalancing, the hedges no longer meet the criteria for hedge accounting, or if hedging
instruments are eliminated, sold, terminated or exercised, adoption of hedge accounting shall be
discontinued for the future period. When the Group discontinues hedge accounting, the balance of
cash flow hedges that have been recognized in other comprehensive income remain in equity if thehedged future cash flows are still expected to occur, or the balance is immediately reclassified to
profit or loss if the hedged future cash flows are no longer expected to occur.
(5) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, and other short-term
highly liquid investments with original maturities of three months or less and insignificant risk of－

16 －changes in value.
(6) Inventories
Inventories are measured at the lower value between cost or net realizable value. Net realizable value
is determined at the estimated selling price in the ordinary course of business less estimated costrequired up to the completion of the process and estimated selling expenses. The costs of inventories arecalculated principally by using the moving average method, which include purchase cost, processing cost,and other costs incurred in bringing inventories to their present location and condition.
(7) Property, plant and equipment
Property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses.
Cost includes any costs directly attributable to the acquisition of assets, dismantlement, removal, andthe restoration of land, as well as borrowing costs eligible for capitalization.
Depreciation of all items of property, plant and equipment other than land and construction in progress
is recorded by the straight-line method over the respective estimated useful life. Estimated useful lives ofmajor asset items are as follows:- Buildings and structures: 2-50 years- Machinery, equipment and vehicles: 2-17 years
The estimated useful lives, residual values and depreciation methods are subject to review at the end ofeach reporting period, and any change to them is prospectively applied as a change in an accounting
estimate.
(8) Goodwill
Goodwill arising from the acquisition of a subsidiary shall be recorded in the consolidated statements offinancial position at its book value, namely cost less an accumulated impairment loss.
Goodwill is not amortized, subject to impairment test in each fiscal year, or as appropriate when there
is an indication of impairment loss.
Impairment loss of goodwill is recognized as the consolidated statements of income, which shall not bereversed thereafter.
(9) Intangible assets
Intangible assets acquired separately shall be measured at cost at the time of initial recognition.
Intangible assets excluding those with indefinite useful lives are amortized after the initial recognition,
based on the straight-line method over their respective estimated useful lives, and recorded at their bookvalue i.e. cost less accumulated amortization and accumulated impairment loss. Estimated useful lives ofmajor items of intangible assets are as follows, while there is no significant intangible asset that has anindefinite useful life.
- Software: 5 years
The estimated useful lives, residual values and amortization methods are reviewed at the end of eachyear, and any change to them is prospectively applied as a change in an accounting estimate.
(10) Leasing transactions
Leases involving transfer to the Group of substantially all the risks and rewards associated with theownership of the leased assets, are classified into finance lease, while other type of leases are classified
into operating lease.
Leased assets in finance lease transactions are subject to initial recognition at the fair value of theleased property determined at the inception of the lease, or the present value of the total amount of theminimum lease payments also at the inception of the lease, whichever lower. Such assets, following the－17 －initial recognition, shall be subject to depreciation based on the accounting policies applicable thereto,over the estimated useful lives or the lease term, whichever shorter.
Lease payments are allocated into finance costs and the payments of lease obligations. Finance costs
are distributed, so that the interest rate will remain at a certain level against the obligation balance foreach lease term.
Lease payments in operating leases are recognized as expenses in the consolidated statements ofincome, using the straight-line method over the lease term. Variable lease payments are recognized as
expenses for the period in which such payments are made.
(11) Impairment of non-financial assets
The Group companies assess at the end of each reporting period whether there is an indication that a
non-financial asset, except for inventories and deferred tax assets, may be impaired. If any such
indication exists, the Group companies estimate the recoverable amount of the asset. For the intangible
assets with indefinite goodwill and useful lives, or those yet to be usable, are subject to impairment tests
in each reporting period, regardless of whether there is indication of impairment loss.
The recoverable amount of an asset or cash-generating unit is the larger of its value in use and fairvalue less costs to sell. In assessing value in use, the estimated future cash flows are discounted to theirpresent value using a pre-tax discount rate that reflects the time value of money and the risks specific to
the asset. Assets that are not subject to separate impairment test, are integrated into the smallest cashgenerating unit involving continuous use, thus generating cash inflow largely independent of cash inflows
from other assets or asset groups. Impairment test of goodwill involves integration of cash-generating
units to which goodwill is allocated, to ensure the impairment test is done reflecting the smallest unit
involving goodwill. Goodwill acquired through business combinations is allocated to the cash-generating
unit expected to achieve synergy from the business combinations.
Corporate assets of the Group do not generate independent cash flows. If there is an indication that
corporate assets may be impaired, the recoverable amount is determined for the cash-generating unit towhich the corporate assets belong.
Impairment losses are recognized as profit or loss when the book value of an asset or cash-generating
unit exceeds its estimated recoverable amount. Impairment losses recognized as respect of a cashgenerating unit are recognized first reducing the book value of any allocated goodwill and then areallocated to other assets of the cash-generating unit on a pro-rata basis based on the book value of such
assets.
Impairment losses recognized as respect of goodwill are not reversed. Assets other than goodwill are
reviewed at the end of each reporting period to assess whether there is any indication that an impairment
loss recognized as prior years may no longer exist or may have decreased. An impairment loss is reversed
if there is a change in the estimates used to determine the asset’s recoverable amount. The reversal of an
impairment loss does not exceed the book value, net of required depreciation and amortization, which
would have been determined if any impairment loss had never been recognized for the asset in prior years.
(12) Employee benefits
The Group adopts defined benefit plans as well as defined contribution plans as retirement benefits
systems.
The Group calculates the present value of defined benefit obligations and associated current service
cost as well as past service cost by using the projected unit credit method.
For the purpose of applying discount rate, a discount period is determined based on the period up to the
expected date of future benefit payment in each fiscal year, whereby discount rate is determined byreference to market yields on high quality corporate bonds at the end of reporting period corresponding to
the discount period.
Liability or asset associated with a defined benefit plan is calculated by subtracting the fair value ofplan assets from the present value of defined benefit obligations.
Remeasured amount of a defined benefit plan is recognized at once as other comprehensive income in
the period in which the remeasurement takes place, and immediately reclassified from other components－

18 －of equity to retained earnings.
Past service cost is recognized as profit or loss in the period in which it arises.
Expenses associated with retirement benefits based on a defined contribution plan are recognized as
expenses at the point of disbursement.
(13) Share-based payment
The Group adopts equity-settled and cash-settled share-based compensation systems.
For equity-settled share-based compensation system, services received and corresponding increases inequity are measured at the fair value of (the equity financial instruments) as of the grant date, and arerecognized as expenses over the vesting period, while the same amount is recognized as increases inequity. For cash-settled share-based compensation system, services received and the liabilities incurred
are measured at the fair value of the liabilities, and are recognized as expenses over the vesting period,
while the same amount is recognized as increases in liabilities. The fair values of the liabilities are
remeasured on the balance sheet date and on the date of settlement, and any changes in fair value arerecognized as profit or loss.
(14) Provisions
Provisions are recognized when the Group companies have a present legal or constructive obligation asa result of past events, it is probable that an outflow of resources will be required to settle the obligation,and the amount has been reliably estimated. Where time value of money is material, estimated future
cash flows are discounted into present value, by using the pre-tax interest rate reflecting the time value ofmoney as well as the risks inherent to the associated liabilities. Reversal of the discounted amount due topassage of time is recognized as finance costs.
(15) Revenue
Revenue is measured at the fair value of considerations received with respect to sale of goods orprovision of services less discounts, rebates and sales-related taxes.
1) Sale of goods
Revenue from the sale of goods is recognized when the Group transfers to the buyer significant risks
and rewards associated with ownership of the goods, without retaining continuous involvement in, nor
substantial control over the goods, while the Group perceives a highly probable inflow of future
economic benefit associated with such transfer, and when such benefit and associated cost are reliably
measurable.
2) Provision of services
Revenue derived from the provision of service is recognized based on the progress of the transaction
at the end of the reporting period in which the service is provided.
(16) Current and deferred income tax
The income tax comprises current and deferred income taxes. These are recognized as profit or loss,
except for the items associated with business combinations and those directly recognized as equity orother comprehensive income.
Current taxes are measured at an expected amount of taxes to be paid to or of refund from the tax
authorities. The amount of taxes is calculated based on the tax rates and the tax laws that have beenenacted, or substantially enacted by the end of the fiscal year in the countries where the Group conducts
business activities and generates taxable profit.
Deferred tax assets and liabilities are recognized, based on the temporary differences between the bookvalues of assets and liabilities for accounting purposes and their amounts for tax purposes on the balance
sheet date, as well as unused tax losses and unused tax credits.
－

19 －However, deferred tax assets and liabilities are not recognized for the following temporary differences.
- Temporary differences arising from the initial recognition of goodwill- Temporary differences arising from the initial recognition of assets or liabilities generated fromtransactions other than business combinations, which affect neither accounting profit nor taxable
profit- Taxable temporary differences arising from investments in subsidiaries and affiliates, insofar as thetiming of its reversal is at the discretion of the Group, and that such reversal is not likely in theforeseeable future
Deferred tax liabilities are recognized as principle, for all taxable temporary differences, while deferred
tax assets are also recognized for all taxable temporary differences, but to the extent that the Group is
likely to earn the level of taxable income that warrants the use of taxable temporary differences.
The book value of deferred tax assets is reviewed every reporting period, and reduced to the extent that
the Group is no longer likely to earn the level of taxable income that warrants the use of the whole or partof deferred tax assets. Unrecognized deferred tax assets are reviewed every reporting period, and arerecognized to the extent that it has become likely that future taxable income will achieve recovery ofdeferred tax asset.
Deferred tax assets and liabilities are measured, in accordance with the tax rates and the tax laws thatare expected to prevail in the period in which the asset is realized or the liability is settled, based on the
tax laws and the tax rates that have been enacted or substantially enacted at the end of the fiscal year.
Deferred tax assets and liabilities are offset, if the Group has a legally enforceable right to offset acurrent tax liability against current tax asset, and income taxes are imposed by the same tax authorities
on the same taxable entity.
Income taxes in the condensed consolidated financial statements are calculated based on the estimatedannual effective tax rate.
(17) Earning per share
Basic earning per share is calculated by dividing profit attributable to common shareholders of parent,by the weighted-average number of common shares outstanding, subject to the adjustment to the numberof treasury shares for the period concerned. Diluted earning per share is calculated reflecting theadjustment of the impact from all diluted shares with dilutive effect.
(18) Segment reporting
Business segments correspond to business activities, from which the Group companies earn revenues
and incur expenses, including revenues and expenses relating to transactions with other businesssegments. Discrete financial information on operating results of all business segments is obtainable, andis regularly reviewed by the Board of Directors of the Company in order to determine the allocation of
resources to each segment and assess its performance.
(19) Assets held for sale
Assets or asset groups expected to be recovered not by continuous use but by sale that are quite likely
to be sold within one year, while available for immediate sale in its present condition on the basis solely of
normal or conventional terms and conditions and management of the Group is committed to such sale,shall be classified as non-current assets or disposal group held for sale. In such case, non-current assets
shall neither be depreciated nor amortized, and shall be measured at book value or fair value less cost tosell, whichever lower. With respect to the initial or subsequent reduction in book value of non-current
assets (or disposal group) to the fair value less cost to sell, impairment loss is recognized as profit or loss.
In the case of increase in the fair value less cost to sell thereafter, gain on valuation shall be recognized as
profit or loss to the extent, however, not exceeding the accumulated impairment loss recognized thitherto.

－

20 －

(20) Treasury stock
Treasury stock is measured at acquisition cost and deducted from equity. No gain or loss is recognizedassociated with the purchase, sale or retirement of treasury stock of the Company. Any difference between
the book value and the consideration received from the sale is recognized as capital surplus.

－

21 －

4. Significant accounting estimates and associated judgements
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 judgements made by the management that may have material impacts on the figuresin the condensed consolidated financial statements are as follows.
- Impairment of property, plant and equipment, goodwill and intangible assets
The Group tests property, plant and equipment, goodwill, and intangible assets for impairment inaccordance with Note “3. Significant accounting policies.” Assumptions concerning future cash flows,
discount rates, etc., are set to calculate recoverable amounts in testing for impairment. Although theseassumptions are determined based on management’s best estimates and judgement, they may be affected asa result of changes in uncertain future economic conditions. Should those assumptions require change, theconsolidated financial statements may be significantly affected.
- Recoverability of deferred tax assets
A deferred tax asset is recognized to the extent that it is likely that taxable income will be available
against which the deductible temporary difference can be utilized. In determining the probability thattaxable income will be available, the Group estimates the timing and the amount of the taxable income
based on the business plan. Although these estimates are management’s best estimates, the actual results
may differ as a result of changes in uncertain future economic conditions.

－

22 －

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 andthe refining and processing business, industrial waste management and other environmental
preservation business, and life & health business including manufacturing and selling of healthequipment.
Therefore, the Group is composed of product and service segments based on business sectors. The threereporting segments are the precious metal business, the environmental preservation business, and thelife & health business.
The precious metals business engages mainly in recycling and selling of precious and rare metals suchas gold, silver, palladium, platinum, and indium, as well as refining and processing of precious metals
such as gold and silver. The main work of environmental preservation business is the collection, transport
and intermediate processing of industrial waste. In the life & health business, the main work is the
manufacture and sales of massagers, hearing aids, and other health equipment, the manufacture andsales of electric heaters, the design and installation of radiant heating and air conditioning systems, andthe design and installation of disaster prevention equipment.

(2) Segment revenue and performance
Accounting policies of the reporting segments are the same as those of the Group stated in “Note 3.
Significant accounting policies.”
Revenue and other performance of each reportable segment of the Group are as follows.
For the three months ended June 30, 2015 (from April 1, 2015 to June 30, 2015)(Millions of yen)
Reporting segment
Environmental
preservation
business

Life & healthbusiness

22,514
－

3,590

6,361

27

Total

22,514

3,618

Operating income by businesssegment

2,571

524

348

Precious metalbusiness

Revenue
External revenue
Intersegment revenue

Total

Adjustment

Consolidated

32,466

－

0

28

(28)

32,466－

6,361

32,495(28)

32,466

3,444

(610)

2,834

Finance income

69

Finance costs(50)

Profit before tax

2,854(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.

－

23 －

For the three months ended June 30, 2016 (from April 1, 2016 to June 30, 2016)(Millions of yen)
Reporting segment
Precious metalbusiness

Environmental
preservation
business

Life & healthbusiness

18,369
－

3,851
17

5,580
－

27,8001718,369

3,868

5,580

2,388

706

160

Total

Adjustment

Consolidated－(17)

27,800－27,818(17)

27,800

3,255

(609)

2,645

Revenue
External revenue
Intersegment revenue
Total
Operating income by businesssegment
Finance income
Finance costs

5
(134)

Profit before tax

2,517(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. Subsequent events
Not applicable

－

24 －

7. First-time adoption
The Group has started to disclose IFRS-based condensed consolidated financial statements from the firstquarter under review (from April 1, 2016 to June 30, 2016). The last Japan GAAP-based consolidated
financial statements were prepared for the fiscal year ended March 31, 2016, while transition to IFRS took
place on April 1, 2015.
(1) Exemption under IFRS 1
A company adopting IFRS for the first time (“first-time adopter”) is required to retrospectively apply
the standards required under IFRS, provided, however, that IFRS 1 ”First-time Adoption of International
Financial Reporting Standards” (“IFRS 1”) specifies certain standards subject to compulsory applicationof exemption (from the aforementioned retrospective application), along with others subject to voluntary
application of exemption. Impacts from the application of these exemptions are adjusted by retained
earnings, or other components of equity on the date of transition to IFRS. In the process of transition to
IFRS from Japan GAAP, the Group adopted the following exemptions.
- Business combinations
A first-time adopter is allowed to elect not to retrospectively apply IFRS 3 “Business Combinations” tothe business combinations that took place before the date of transition to IFRS. The Group elected, byapplying this exemption, not to retrospectively apply IFRS 3 to the business combinations that took place
before the date of transition. As a result, the amount of goodwill arising from the business combinations
before the date of transition is recognized at the book value as at the date of transition based on theJapan GAAP. Incidentally, goodwill is subject to impairment test on the date of transition, regardless ofwhether there is an indication of impairment loss.
- Foreign currency translation adjustments of foreign operations
Under IFRS 1, an option is allowed whereby cumulative translation differences of foreign operations as
at the date of transition to IFRS may be assumed to be nil. The Group elected to assume such cumulativetranslation differences to be nil as at the date of transition to IFRS.
(2) Compulsory exception under IFRS 1IFRS 1 prohibits retrospective application of IFRS with respect to “estimates,” “derecognition offinancial assets and financial liabilities,” “hedge accounting,” “non-controlling interest,” and“classification and measurement of financial assets.” Thus the Company applies IFRS to these items fromthe date of transition and onwards.
The reconciliation required to be disclosed at the first-time adoption of IFRS is as follows.

(3) Reconciliation
The reconciliation required to be disclosed at the first-time adoption of IFRS is as follows.

－

25 －

Reconciliation of equity as of April 1, 2015 (date of transition to IFRS)Line item underJapan GAAP

Japan
GAAP

Reclassificationof line items

Difference inrecognition and

IFRS

Notes

measurement

Millions

Millions

Millions

Millionsof yenof yenof yenof yenLine item under
IFRS

AssetsAssetsCurrent assets

Current assets
Cash and cash

Cash and deposits
Notes and accounts
receivable-trade
Inventories

11,046(205)－

10,841

15,146

1,973(1,267)

15,851

15,630

－

854
－

(854)
2,506

187
－
－

15,817
－

－
5,919

674
(4,988)(40)(1)(2),(3)equivalents
Trade and other

(4)
(4)

receivables
Inventories

2,506

(6)
(2)

Income tax receivables

－
－

674
930

(1),(3)(2)

Other financial assets
Other current assets

40

－

－

(3)

48,556(854)(1,079)46,622

Property, plant andequipment

32,334－

1,328

33,663(7)

Goodwill
Intangible assets

21,737
906

－
－

－
－

(8)

Investment securities
Deferred tax assets

168
368

Net defined benefit asset

154
－

(168)
854
－

21,737906－

Other
Allowance for doubtful

676

Deferred tax assets

Other
Allowance for doubtful
accounts
Total current assets
Non-current assets

accounts
Total non-current
assetsTotal assets

－

1,291

807

68
－
－

(662)

－

13

(24)

24

－

－

56,321854

1,397

58,573

104,877－

317

105,195

－

26 －

154
807

Total current assets
Non-current assets(5)(6)(3),(5)

Property, plant andequipment
Goodwill
Intangible assets
Deferred tax assets
Net defined benefit asset
Financial assets
Other non-current assets(3)
Total non-current
assetsTotal assets

(Millions of yen)Line item underJapan GAAP

Japan
GAAP

Reclassificationof line items

Difference inrecognition and

IFRS

Notes

measurement

Millions

Millions

Millions

Millionsof yenof yenof yenof yenLine item under
IFRS

Liabilities and Equity
Liabilities
Current liabilities

Liabilities
Current liabilities

Notes and accounts
payable-trade

6,161

5,460

165

11,787(2)

Trade and otherpayablesShort-term loans
payable26,171

270－

26,441(9)Loans payable

Current portion of longterm loans payable

270

(270)

－

－

(9)

Accounts payable-other
Income taxes payable

3,473
2,111

(3,473)
－

－
－

－

(2)

2,111

－

46

－

46

1,362
776

－

(102)
－

1,259
－

Provisions
Deferred tax liabilities
Other

(776)

Income tax payable(5)

Other financial
liabilities
Provisions

(6)
(2),
(5),(11)5,276(2,033)

396

3,638

45,603(776)

459

45,286

6,550
1,567

－

－

776

(282)

6,550
2,061

126

－

－

126

－

72

－

72

(5)

Other financial
liabilities

72

(72)

－

0

(5)

Other non-current
liabilities

8,316

776

(282)

8,810

Total liabilities

53,919－176

54,096

Total liabilities

Net assets
Capital stock

4,480

－

－

4,480

EquityCapital stock

6,038(5,159)

77
－

－
－

6,116
(5,159)

77

(77)

－

－

44,459－539

44,999(12),(13)

Retained earnings

685

－

(338)

346

(12)

Other components ofequity50,582－200

50,783

375

－

(60)

315

50,958－140

51,098

Total equity

104,877－

317

105,195

Total liabilities and equity

Total current
liabilities
Non-current liabilities
Long-term loans payable
Deferred tax liabilities
Net defined benefit
liability

Other
Total non-current
liabilities

Capital surplus
Treasury stock
Subscription rights tosharesRetained earnings
Total accumulated othercomprehensive income

Non-controlling interests
Total net assets
Total liabilities and net
assets－27 －Other current liabilities
Total current
liabilities
Non-current liabilities(6)

Loans payable
Deferred tax liabilities
Net defined benefit
liability

Total non-current
liabilities

Capital surplus
Treasury stock

Total equity attributableto owners of parent
Non-controlling interests

Reconciliation of equity as of June 30, 2015
Line item underJapan GAAP

Japan
GAAP
Millionsof yenReclassificationof line items

Difference inrecognition and

IFRS

Notes

measurement

Millionsof yenMillionsof yenLine item under
IFRS

Millionsof yenAssetsCurrent assets

AssetsCurrent assets

Cash and deposits

8,756

(195)

－

8,560

(1)

Cash and cash
equivalents

Notes and accounts
receivable-trade

13,670

3,606

(713)

16,563(2),(3)(4)

Trade and otherreceivables

15,388
591
－
－

－
(591)

(408)
－

14,980
－

(4)
(6)

2,086
740

－
－

2,086
740

(2)
(1),(3)

Income tax receivables
Other financial assets

8,154(6,272)

(124)

1,757

(2)

Other current assets

(35)

35

－

－

(3)

46,526(591)(1,246)44,687

Inventories
Deferred tax assets

Other
Allowance for doubtful
accounts
Total current assets
Non-current assets
Property, plant andequipment
Goodwill－

1,236

33,655

(7)

426
－
－

22,848

(8)

916
－

(5)

117
40
－
－

1,027
200

(6)

Deferred tax assets
Net defined benefit asset

815
21(3),(5)

Financial assets
Other non-current assets(3)

22,421Intangible assets
Investment securities

916
177

－

Deferred tax assets
Net defined benefit asset

317
160
－

(177)
591
－

Other

683

815
(662)

Allowance for doubtful
accounts

(24)

24

－

－

57,072591

1,820

59,485103,599－574

104,173

assetsTotal assets

Total current assets
Non-current assets
Property, plant and

32,419－Total non-current

Inventories

－

28 －

equipment
Goodwill
Intangible assets

Total non-current
assetsTotal assets

Line item underJapan GAAP

Japan
GAAP

Reclassificationof line items

Difference inrecognition and

IFRS

Notes

measurement

Millions

Millions

Millions

Millionsof yenof yenof yenof yenLine item under
IFRS

Liabilities and Equity
Liabilities
Current liabilities

Liabilities
Current liabilities

Notes and accounts
payable-trade

6,924

5,217

－

12,141(2)

Trade and otherpayablesShort-term loans
payable25,871

5,270－

31,141(9)Loans payable

Current portion of longterm loans payable

5,270(5,270)－－(9)

Accounts payable-other
Income taxes payable

2,441
681

(2,441)
－

－
－

－

(2)

681

－

43

－

43

967

－

11

979

Provisions
Other
Total current
liabilities
Non-current liabilities
Long-term loans payable
Deferred tax liabilities
Net defined benefit
liability

Other
Total non-current
liabilities
Total liabilities
Net assets

Income tax payable(5)

Other financial
liabilities
Provisions

(2),

4,501

(2,820)50

1,731

46,658－61

46,720

1,415

－

－

1,415

2,316

－

(222)

2,094

133

－

－

133

－

71

163

234

(5)

71

(71)

－

0

(5)

3,936

－

(58)

3,877

50,594－

3

50,597

－

－
－

4,480
6,152

Capital stock
Capital surplus－(5,043)

Treasury stock(5),(11)

Other current liabilities
Total current
liabilities
Non-current liabilities
Loans payable(6)

Deferred tax liabilities
Net defined benefit
liability
Other financial
liabilities
Other non-current
liabilities
Total non-current
liabilities
Total liabilities
EquityCapital stock
Capital surplus

4,480
6,106

Treasury stock
Subscription rights to(5,043)

45
－

45

(45)

－

－

44,915－

1,058

45,974

2,098

－

(449)

1,649

52,604－608

53,213

399

－

(37)

362

Total net assets

53,004－571

53,575

Total equity

Total liabilities and net
assets103,599－574

104,173

Total liabilities and equity

sharesRetained earnings
Total accumulated othercomprehensive income

Non-controlling interests

－

29 －

(12),
(13)
(12)

Retained earnings
Other components ofequityTotal equity attributableto owners of parent
Non-controlling interests

Reconciliation of equity as of March 31, 2016
Line item underJapan GAAP

Japan
GAAP
Millionsof yenReclassificationof line items

Difference inrecognition and

IFRS

Notes

measurement

Millionsof yenMillionsof yenLine item under
IFRS

Millionsof yenAssetsCurrent assets

AssetsCurrent assets

Cash and deposits

16,668(103)－

16,564(1)

Cash and cash
equivalents

Notes and accounts
receivable-trade

11,558

3,827

(741)

14,644(2),(3)(4)

Trade and otherreceivables

15,244
937
－
－

－
(937)

(153)
－

15,090
－

(4)
(6)

2,520
105

－
－

2,520
105

(2)
(1),(3)

Income tax receivables
Other financial assets

7,192(6,380)

－

811

(2)

Other current assets

(31)

31

－

－

(3)

51,570

(937)

(895)

49,737

Inventories
Deferred tax assets

Other
Allowance for doubtful
accounts
Total current assets
Non-current assets
Property, plant andequipment
Goodwill－

997

31,788(7)

16,922

(8)

969
－

(5)
(6)
(3),(5)

19,136

Intangible assets
Investment securities

969
155

－
(155)

(2,213)－－

Deferred tax assets

322
－

937
771

121
－

1,381
771

Other
Allowance for doubtful

664

(637)

－

27

(21)

21

－

－

52,019937(1,095)51,861

103,589－(1,990)101,599

accounts
Total non-current
assetsTotal assets

Total current assets

30,791－－30 －Inventories

Non-current assets
Property, plant andequipment
Goodwill
Intangible assets
Deferred tax assets
Financial assets
Other non-current assets(3)
Total non-current
assetsTotal assets

Line item underJapan GAAP

Japan
GAAP

Reclassificationof line items

Difference inrecognition and

IFRS

Notes

measurement

Millions

Millions

Millions

Millionsof yenof yenof yenof yenLine item under
IFRS

Liabilities and Equity
Liabilities
Current liabilities

Liabilities
Current liabilities

Notes and accounts
payable-trade

8,875

6,063

186

15,125(2)

Trade and otherpayablesShort-term loans
payable

1,845

5,270

－

7,115

(9)

Loans payable

Current portion of longterm loans payable

5,270(5,270)－－(9)

Accounts payable-other
Income taxes payable

1,891
2,012

(1,891)
－

－
－

－

(2)

2,012

－

187

－

187

1,534

－

(11)

1,522

Provisions
Other

Income tax payable(5)

Provisions
(2),

7,012

(4,359)

300

2,953

28,442－475

28,917

21,584－(1,080)20,503

(10)

1,937

－

(355)

1,582

(6)

142

－

－

142

119

－

(119)

－

－

62

1,403

1,465

62

(62)

－

－

23,846－(153)

23,69352,288－322

52,610Capital stock
Capital surplus

4,480
6,112

－
－

－
－

4,480
6,112

Treasury stock(5,371)－－(5,371)

Total current
liabilities
Non-current liabilities
Long-term loans payable
Deferred tax liabilities
Net defined benefit
liability
Provisions

Other
Total non-current
liabilities
Total liabilities
Net assets

Retained earnings
Total accumulated othercomprehensive income

Non-controlling interests
Total net assets
Total liabilities and net
assets47,524－(1,678)45,845(1,884)－(591)(2,476)50,862－(2,270)48,591Other financial
liabilities(5),(11)

Other current liabilities
Total current
liabilities
Non-current liabilities
Loans payable
Deferred tax liabilities
Net defined benefit
liability(5),(10)

Other financial
liabilities(5)
Total non-current
liabilities
Total liabilities
EquityCapital stock
Capital surplus
Treasury stock
(12),
(13)
(12)

Retained earnings
Other components ofequityTotal equity attributableto owners of parent

438

－

(42)

396

51,300－(2,312)

48,988

Total equity

103,589－(1,990)101,599

Total liabilities and equity

－

31 －

Non-controlling interests

Notes on reconciliation of equity(1) Reclassification of cash and deposits
Time deposits with deposit terms of over three months, which were included in “cash and deposits” underJapan GAAP, are reclassified into “other financial assets (current)” under IFRS.
(2) Reclassification of other current assets and current liabilities
Accounts receivable – other, which were included in “other” of current assets under Japan GAAP, have been
reclassified as “trade and other receivables” and “Income tax receivables” under IFRS, while accounts payable –other, which was presented as a separate item of current liabilities, and accrued expenses, which were included
in “other” under Japan GAAP, have been reclassified as “trade and other payables” under IFRS.
(3) Reclassification of allowance for doubtful accounts“Allowance for doubtful accounts (current),” which was separately presented under Japan GAAP, has been
reclassified under IFRS to be directly deducted from “trade and other receivables” as well as “other financial
assets (current)” to present their net amounts, while “allowance for doubtful accounts (non-current)” has also
been reclassified under IFRS to be directly deducted from “financial assets (non-current)” to present the net
amount.
(4) Adjustment to operating receivables and inventories due to changes in timing of revenue recognition
Timing of revenue recognition for some of the transactions of sales of goods which were recognized on
shipment basis under Japan GAAP has been changed to customer delivery basis under IFRS, whereby operatingreceivables and inventories are subject to adjustments accordingly.
(5) Reclassification of other financial assets and financial liabilities“Investment securities,” which were presented separately under Japan GAAP, have been reclassified as“financial assets (non-current)” under IFRS. Lease obligations, which were included in “other” of current
liabilities and “other” of non-current liabilities under Japan GAAP, have been reclassified as “other financial
liabilities (current)” and “other financial liabilities (non-current),” respectively, under IFRS.
(6) Reclassification of deferred tax assets and deferred tax liabilities, review of recoverability of deferred tax assets
Since IFRS requires all deferred tax assets and liabilities to be classified as non-current items without making
a distinction between current and non-current items, deferred tax assets and liabilities which were previously
recorded as current items have been reclassified as non-current items. Meanwhile, as a result of the adoption of
IFRS, the recoverability of all deferred tax assets is currently under review and consideration.
(7) Adjustment to the recorded amount of property, plant and equipment
Under the Japan GAAP, the Group was mainly using the declining-balance method for the purpose ofdepreciating property, plant and equipment (excluding lease assets); under the IFRS, the Group has adopted thestraight-line method.
Fixed asset acquisition tax, which was treated as expenses under Japan GAAP, is capitalized under IFRS.
(8) Adjustment to the recorded amount of goodwill
Goodwill was amortized over a certain period of time under Japan GAAP, whereas it is not subject toamortization under IFRS. In addition, goodwill was subject to reviews for decisions on impairment only when
there was an indication of impairment under Japan GAAP, while impairment tests are conducted every
reporting period under IFRS.
Based on the difference between Japan GAAP and IFRS, the precious metal business segment recognized
3,776 million yen impairment loss in the fiscal year ended March 31, 2016. Recoverable amount is measured atvalue in use, and calculated by discounting future cash flows using 11.84% discount rate.
(9) Reclassification of loans payable“Current portion of long-term loans payable,” which was presented as a separate item of current liabilities,
has been reclassified as “loans payable (current)” under IFRS.
－

32 －(10) Adjustment to loans payable and other financial liabilities
With respect to derivative transactions for the purpose of avoiding risks associated with fluctuations ofinterest rate of long-term borrowings as well as those of exchange rate, exceptional accounting (tokurei-shori)and designated hedge accounting (furiate-shori) were adopted for the basis of hedge accounting under Japan
GAAP, whereas under IFRS, they are measured at fair value.
(11) Adjustment to other current liabilities
Allowance for unused compensated absences, which was not accounted for under Japan GAAP, is recorded as“other current liabilities” under IFRS.
(12) Reclassification of accumulated translation adjustments for overseas subsidiaries
Exemption under IFRS 1 was elected at the first-time adoption, whereby the accumulated translation
adjustments as at the date of transition to IFRS have been wholly reclassified as retained earnings.
(13) Reconciliation of retained earnings
Date of transition to
IFRS(April 1, 2015)

As of June 30, 2015

As of March 31, 2016

Millions of yen

Millions of yen

Millions of yen

Adjustment to trade receivables and

(359)

(99)

(156)

1,328

1,236

997

－

426

(2,213)

(874)

(908)

(895)

translation adjustments for overseas
subsidiaries

338

338

338

Other

(305)

(271)

(162)

Subtotal
Tax effect reconciliation

128
351

721
299

(2,092)
371

Reconciliation for non-controllinginterests

60

37

42

539

1,058

(1,678)inventories
Adjustment to recorded amount ofproperty, plant and equipment
Adjustment to recorded amount of
goodwill
Reconciliation of compensatedabsences payable
Reclassification of accumulated

Total

－

33 －

Reconciliation of profit or loss and comprehensive income for the three months ended June 30, 2015
(from April 1, 2015 to June 30, 2015)
Line item underJapan GAAP

Japan
GAAP

Reclassificationof line items

Difference inrecognition and

IFRS

Notes

measurement

Line item under
IFRS

Millions

Millions

Millions

Millions

Net salesof yen31,610of yen－of yen856

of yen32,466(1)

Revenue

Cost of sales(25,037)－(678)(25,716)(1)

Cost of sales

Gross profit

6,573

－

177

6,750

Selling, general andadministrative expenses(4,284)(24)379(3,928)(2)

Selling, general andadministrative expenses

－
－

22
(9)

(1)
1

20
(8)

(3)
(4)

Other operating income
Other operating expenses

2,289

(11)

Non-operating income
Non-operating expenses

83
(57)

(83)
57

556
－
－

2,834
－
－

Extraordinary income
Extraordinary loss

8
(2)
－
－

(8)
2

－
－

－
－

(3)
(4)

69
(50)

(0)
0

69
(50)

(5)
(5)

Income before income
taxes

2,321

(24)

556

2,854

Profit before tax

Income taxes-current
Income taxes-deferred

(625)
(234)

(210)
234

(52)
－

(887)
－

Income tax expenses

Profit

1,461

－

504

1,966

ProfitOperating income

Other comprehensive
incomeGross profit

Operating income(3),(5)(4),(5)

Finance income
Finance cost

Other comprehensive
incomeItems that will not bereclassified to profit or loss

Valuation difference on
available-for-sale

5

－

－

5

securities
－

－

35

35

5

－

35

40

Financial assets measured
at fair value through othercomprehensive income
Remeasurements ofdefined benefit plans
Total of items that will not
be reclassified to profit orloss
Items that will bereclassified to profit or loss

Deferred gains or losses
on hedges
Foreign currencytranslation adjustment

Total othercomprehensive income
Comprehensive income

50

－

(110)

(59)

1,358

－

(0)

1,357

1,409

－

(111)

1,297

1,414

－

(75)

1,338

Other comprehensive
income, net of tax

2,876

－

428

3,304

Comprehensive income

－

34 －

Cash flow hedges
Translation adjustments offoreign operations
Total of items that will bereclassified to profit or loss

Reconciliation of profit or loss and comprehensive income for the fiscal year ended March 31, 2016 (from
April 1, 2015 to March 31, 2016)
Line item underJapan GAAP

Japan
GAAP

Reclassificationof line items

Difference inrecognition and

IFRS

Notes

measurement

Line item under
IFRS

Millions

Millions

Millions

Millions

Net salesof yen118,473of yen－of yen879

of yen119,352(1)

Revenue

Cost of sales(92,719)－(675)(93,394)(1)

Cost of sales

Gross profit

25,753－204

25,958Selling, general andadministrative expenses(17,048)

(72)

1,421

(15,699)(2)

Selling, general andadministrative expenses

－
－

157
(545)

(48)
(3,765)109(4,310)(3)(4)

Other operating income
Other operating expenses

Operating income

8,705

(460)

Non-operating income
Non-operating expenses

89
(284)

(89)
284

(2,187)
－
－

6,057
－
－

Extraordinary income
Extraordinary loss

109
(512)
－
－

(109)
512

－
－

－
－

(3)
(4)

40
(251)

(1)
24

39
(227)

(5)
(5)

Income before income
taxes

8,106

(72)

(2,165)

5,868

Profit before tax

Income taxes-current
Income taxes-deferred(3,153)
179

251
(179)

18
－

(2,883)－

Income tax expenses

Profit5,132－(2,146)

2,985

ProfitOther comprehensive
incomeGross profit

Operating income(3),(5)(4),(5)

Finance income
Finance cost

Other comprehensive
incomeItems that will not bereclassified to profit or loss

Valuation difference on
available-for-sale

(4)

－

－

(4)

securities
－

－

(99)

(99)

(4)

－

(99)

(103)

Financial assets measured
at fair value through othercomprehensive income
Remeasurements ofdefined benefit plans
Total of items that will not
be reclassified to profit orloss
Items that will bereclassified to profit or loss

Deferred gains or losses
on hedges
Foreign currencytranslation adjustment

Total othercomprehensive income
Comprehensive income

(425)

－

(268)

(693)

(2,148)－15(2,133)(2,573)－(252)(2,826)(2,577)－(352)(2,930)2,554－(2,499)

55

－

35 －

Cash flow hedges
Translation adjustments offoreign operations
Total of items that will bereclassified to profit or loss
Other comprehensive
income, net of tax
Comprehensive income

Notes on reconciliation of profit or loss and comprehensive income(1) Revenue and cost of sales
Timing of revenue recognition for some of the transactions of sales of goods which were recognized on
shipment basis under Japan GAAP has been changed to customer delivery basis, whereby revenue and cost of
sales are subject to adjustments accordingly under IFRS.
(2) Selling, general and administrative expenses
Goodwill was subject to amortization under Japan GAAP, whereas it is not under IFRS, and therefore, theamount of amortization of goodwill under Japan GAAP has been reversed.
(3) Other operating income
Gain on sales of non-current assets and others, which were presented as extraordinary income under Japan
GAAP, are presented as other operating income under IFRS.
(4) Other operating expenses
Loss on sale and disposal of non-current assets and others, which were presented as extraordinary loss underJapan GAAP, are presented as other operating expense under IFRS. Based on the difference between JapanGAAP and IFRS, the precious metal business segment recognized 3,776 million yen impairment loss for the
fiscal year ended March 31, 2016.
(5) Finance income and costs
Interest income, dividend income, and foreign exchange gain, which were presented as non-operating income
under Japan GAAP, as well as interest expenses and foreign exchange losses, which were presented as nonoperating expenses under Japan GAAP, are presented as finance income and finance costs, respectively, under
IFRS.

Reconciliation of cash flows for the three months ended June 31, 2015 (from April 1, 2015 to June30, 2015) and the fiscal year ended March 31, 2016 (from April 1, 2015 to March 31, 2016)
There is no significant difference between the consolidated statements of cash flows disclosed based on JapanGAAP and those disclosed based on IFRS.

－

36 －