Note: This document has been translated from the Japanese original only for reference purposes. In the event of any
discrepancy between this translation and the Japanese original, the original shall prevail. The Company
assumes no responsibility for this translation or for any direct, indirect or consequential damage arising fromthis translation.

Disclosure through the Internet regarding
Notice of the 9th Annual General Meeting of Shareholders

Structure to ensure the appropriateness of business………………………………………

2

Status of operation of structure to ensure the appropriateness of business…………………

5

Notes to consolidated financial statements…………………………………………………

7

Notes to non-consolidated financial statements……………………………………………

18

The items above are provided to our shareholders by posting our website(http://www.asahiholdings.com/) in accordance with laws and regulations, and Article 14 of
the Articles of Incorporation of Asahi Holdings, Inc.

Asahi Holdings, Inc.

1
Cover

Structure to ensure the appropriateness of business
Decisions on a framework to ensure that the performance of duties by the directors is consistent
with the laws and the Articles of Incorporation and a framework to secure the appropriatenessof the businesses of the Company are as follows:
1) Framework to ensure that the performance of duties by the directors, corporate
officers and employees of the Company and our subsidiaries is consistent with the laws
and the Articles of Incorporation(a) The Board of Directors will establish “Asahi Way” and “Code of Ethics” for the
directors and employees in order for the directors, corporate officers and employees tocomply with the laws, Articles of Incorporation and internal rules and to fulfill theirduties.
(b) We will distribute “Asahi Way” to the directors and employees so as to keep theminformed of legal compliance. The internal audit division will make improvements andgive guidance through the business audit.
(c) We will establish the “internal control promotion meeting” consisting of responsible
persons of various divisions as an organization that controls the entire compliance inorder to promote the construction, maintenance and improvement of the internal control
system.
(d) To promote compliance, the actual situation of compliance will be audited.
(e) In order to respond appropriately to any legal violation or other doubtful act under laws
which may be discovered by a director or an employee, we will develop and operate awhistle-blowing system.
(f) We will never have any relationship, including business relationships, with anti-social
forces which threaten the social order and sound corporate activities. In the event of anillegal request, we will take a firm attitude and respond to it organizationally inaccordance with the law and internal rules.
2) Framework for storage and management of information relating to business
operations by the directors and a framework for report to the Company about thematters relating to the performance of duties by the directors and employees of our
subsidiaries(a) We will appropriately control the manner of storing, disposing of and otherwise
managing the records and documents relating to the performance of duties and decisionmaking of the directors and will review the relevant rules from time to time whenneeded.
(b) The directors, Audit and Supervisory Committee Members and Accounting Auditor will
always have access to these information and documents.
(c) We will manage our subsidiaries and they will report important matters to us.
3) Rules and other frameworks for management for risk of loss in the Company and our
subsidiaries(a) We will establish the risk management rules and build a risk management system inaccordance with such rules.
(b) In the event of an unexpected event, we will discuss and make decisions at the
management meeting, etc., and the responsible manager will inform such decisions toeach division and plant. Each division and plant will take prompt actions to prevent

2
Structure to ensure the appropriateness of businessdamage from expanding and will arrange a system to minimize the damage.
4) Framework to secure the efficient performance of duties by the directors of theCompany and our subsidiaries(a) The Board of Directors will hold a meeting regularly no less than once every threemonths and from time to time when needed in order to determine the management
policies and other important matters relating to the business strategies and to supervise
the situation of business operations by the directors.
(b) In order to enhance the functions of the Board of Directors and improve management
efficiency, the Board of Directors will hold an extraordinary meeting from time to time
when needed in order to expeditiously make decisions on basic matters and importantmatters relating to the business operations.
(c) The Board of Directors will draft a mid-term business plan and a budget for each fiscal
year to set the business target and will supervise the progress.
(d) Regarding the business operations according to decisions made by the Board of Directors,
we will establish the responsibility of the directors for performance of duties and theprocedures for performance so as to ensure the efficient performance of duties. Eachprovision will be reviewed from time to time when needed.
5) Framework to secure the appropriateness of business of the corporate groupconsisting of the Company and our subsidiaries(a) We will build a system to manage our subsidiaries and will develop a system to reporttheir business results, business activities and the like to our board of directors on aregular basis.
(b) A manager of the Company will serve as an officer of our subsidiary and will develop asystem to observe the appropriateness of such subsidiary’s business.
(c) The internal audit division of the Company will conduct the internal audit regularly or
when needed and will develop a system to report the result of audit to the representative
director and president, the Audit and Supervisory Committee and the relevant divisionsof the Company.
6) Framework to appoint an employee who assists the duties of the Audit andSupervisory Committee of the Company, and the matters relating to the independenceof such employee from the directors (except those who are Audit and Supervisory
Committee Members) and the matters relating to the assurance of effective
instructions given by the Audit and Supervisory Committee to such employee(a) We will assign an employee who assists the duties of the Audit and Supervisory
Committee in the Audit and Supervisory Committee Secretariat.
(b) Appointment and relocation of the Audit and Supervisory Committee Secretariat staff
that assists such committee in performing its duties requires prior consent of suchcommittee.
(c) The Audit and Supervisory Committee shall have the right to direct and order the Audit
and Supervisory Committee Secretariat staff who assists the committee in performing
its duties to perform his/her duties.

3
Structure to ensure the appropriateness of business7) Framework where the directors (except those who are Audit and Supervisory
Committee Members) and employees of the Company and the directors, corporate
officers, employees and auditors of our subsidiaries or parties who receives a reportfrom aforementioned persons report to the Audit and Supervisory Committee of theCompany, and other matters relating to reporting to the Audit and Supervisory
Committee(a) The directors (except those who are Audit and Supervisory Committee Members) andemployees of the Company and the directors, corporate officers, employees and auditorsof our subsidiaries or parties who receive a report from aforementioned persons willpromptly report the important matters relating to, without limitation, the management,
the accounting division and division in charge of compliance and awards and penalties to
the Audit and Supervisory Committee of the Company, in addition to the matters whichconflict with the laws and Articles of Incorporation and the matters which may
remarkably damage the Company and our subsidiaries.
(b) In order to grasp the important decision-making process and the situation of its business
operations, the Audit and Supervisory Committee Members may attend important
meetings in addition to the meeting of the Board of Directors, access important
documents relating to the business operations and request a director or an employee toexplain the situation when needed.
8) Framework to ensure that no person who reported to the Audit and Supervisory
Committee of the Company is treated disadvantageously by reason of the report
We will not treat any officer or employee of the Company and our subsidiaries whoreported to the Audit and Supervisory Committee disadvantageously by reason of suchreport.
9) Matters relating to the policies for settlement of expenses or debts associated with theprocedures for prepayment or reimbursement of expenses incurred for the
performance of duties by the Audit and Supervisory Committee Members of theCompany (limited to the performance of duties of the Audit and Supervisory
Committee) and the performance of other duties
The Audit and Supervisory Committee Members may request the company to repay the
expenses required for the performance of their duties (limited to the performance of dutiesof the Audit and Supervisory Committee).
10) Other framework to ensure that the Audit and Supervisory Committee of theCompany conducts audits effectively
The Audit and Supervisory Committee, Accounting Auditor and Audit and Supervisory
Committee Secretariat will cooperate with each other in audit tasks and the director andemployees will assist them in conducting audits efficiently.

4
Structure to ensure the appropriateness of businessStatus of operation of structure to ensure the appropriateness of business
As of June 16, 2015, the Company made a transition to the Board with Audit and Supervisory
Committee to promote efforts to ensure transparency and improve the efficiency of corporate
management by reinforcing the supervisory function of the Board of Directors and utilizing
Outside Directors. The Company’s Board of Directors discusses management risks and reviews
the Company’s internal organizations, operations and regulations accordingly to enhance theireffectiveness.
The status of operation of structure to ensure the appropriateness of business operations is asfollows.
1) Status of efforts to enhance the appropriateness and efficiency of business execution(a) The Board of Directors consists of five (5) Directors with executive authority over
operations and four (4) Directors serving as Audit and Supervisory Committee
Members (including three (3) Outside Directors) and has held active discussions.
(b) During the fiscal year under review, the Board of Directors held nine (9) meetings
where the status of business execution was supervised by deliberating proposals andreceiving reports on the status of important business execution.
(c) The Board of Directors entrusts the authority over some important businessexecution to Directors to ensure efficient decision making and business execution.
(d) To secure the transparency in decisions on nomination and compensation for
Directors and Group companies, the Nominating Committee and the Compensation
Committee, each of which consists of one Representative Director and two (2)Outside Directors serving as Audit and Supervisory Committee Members, were
established as voluntary committees, and have provided advice and suggestions to
the Board of Directors.
2) Status of efforts regarding compliance and risk management(a) Continuous efforts to ensure compliance with laws, regulations and the Articles ofIncorporation have been made by providing employees with compliance education
through in-house trainings and meetings and announcing the content of laws andtheir revisions on the internal portal site or with other means.
(b) To counter an act that violates laws, regulations and the Articles of Incorporation, thewhistle-blowing system has been reinforced to monitor such an act, thereby
strengthening legal compliance and risk management.
(c) The internal control promotion meeting engages in identification and control ofinternal risks, and improves the internal organizations, facilities and equipment,
information systems and internal regulations accordingly.
3) Status of execution of duties of the Audit and Supervisory Committee(a) Directors serving as Audit and Supervisory Committee Members join the discussion
and resolution of proposals and receive reports on the status of business execution at
the meetings of the Board of Directors and attend the Group Subsidiaries
Management Meeting and other meetings to enhance the effectiveness of audits.
(b) To ensure the effectiveness of audits by Directors serving as Audit and Supervisory
Committee Members, the full-time support staff for the Audit and Supervisory
Committee Members are placed in the Audit and Supervisory Committee Secretariat,

5
Status of operation of structure to ensure the appropriateness of businesswhich is independent of orders from Directors with authority over operations.
4) Status of the internal audits system(a) An internal audit division for conducting audits on a Group-wide basis has been inplace for enhancement of the internal audits system.
(b) The internal audit division conducts audits on overall business operations andreports to the Representative Director and Directors. The division also cooperates
with the Audit and Supervisory Committee Members and the Accounting Auditor toenhance the effectiveness of audits.

6
Status of operation of structure to ensure the appropriateness of businessNotes to consolidated financial statements(Basis of preparing consolidated financial statements)
1. Standards for preparing the consolidated financial statements
The consolidated financial statements are prepared in accordance with International Financial
Reporting Standards (hereinafter “IFRS”) under the provision of Article 120, Paragraph 1 of theRules of Corporate Accounting. Certain disclosures required by IFRS have been omitted fromthese consolidated financial statements under the provision set forth in the second sentence of saidParagraph.
2. Scope of consolidation
Number of consolidated subsidiaries

Major consolidated subsidiaries

3. Equity method affiliate
Equity method affiliates

21
Asahi Pretec Corp.
Japan Waste Corporation
JW Chemitech Co., Ltd.
JW Logistics, Co., Ltd.
Taiyo Chemical Co., Ltd.
Iyotec Co., Ltd.
Fuji Rozai Co., Ltd.
JW Glass Recycling Co., Ltd.
ECOMAX INCORPORATEDINTER CENTRAL, INC.
KOEIKOGYO CO., LTD.
FUJI MEDICAL INSTRUMENTS MFG. CO.,LTD.
Asahi G&S Sdn. Bhd.
Shanghai Asahi Pretec Co., Ltd.
Asahi Pretec Korea Co., Ltd.
Asahi Pretec Taiwan Co., Ltd.
Asahi Americas Holdings, Inc.
Asahi Refining USA Inc.
Asahi Refining Canada Ltd.
and 2 other companies

None

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.

7
Notes to consolidated financial statements

5. Accounting policies(1) Valuation standards and methods for major assets
1) Financial assets other than derivatives(i) Initial recognition and measurement
The Group recognizes financial assets when it becomes a party to the contract clauses offinancial instruments and classifies the financial assets into financial assets measured at fairvalue through profit or loss or other comprehensive income and financial assets measured atamortized cost.
All financial assets, unless they are classified into those measured at fair value throughprofit or loss, are measured at fair value plus transaction costs.
Financial assets are classified as financial assets measured at amortized cost if both of thefollowing conditions are met:
The financial asset is held within a business model for which the objective is to holdfinancial assets in order to collect contractual cash flows; andThe contractual terms of the financial asset give rise on specified dates to cash flowsthat are solely payments of principal and interest on the principal amount outstanding.
Financial assets other than those measured at amortized cost are classified as financial assets
measured at fair value.
For financial assets measured at fair value, except equity instruments that are held for
trading and must be measured at fair value through profit or loss, a designation is made ofindividual equity instruments as those measured at fair value through profit or loss or thosemeasured at fair value through other comprehensive income, and such designation is appliedconsistently.
(ii) Subsequent measurement
After initial recognition, financial assets are measured based on the classification as follows.
a) Financial assets measured at amortized cost
Financial assets measured at amortized cost are measured using the amortized cost basedon 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 in
profit or loss. However, for equity instruments designated as those measured at fair value
through other comprehensive income, changes in the fair value are recognized in othercomprehensive income. Said amounts recognized in other comprehensive income are notsubsequently reclassified into profit or loss. In cases where such financial assets are
derecognized, the other comprehensive income previously recognized is directlytransferred to retained earnings. Dividends relating to such financial assets arerecognized as part of finance income and in profit or loss for the fiscal year under review.
(iii) Impairment of financial assets
The Group recognizes impairment of financial assets based on whether the credit risk on thefinancial asset or financial asset group measured at amortized cost at each end of thereporting periods has increased significantly since initial recognition. Specifically, if thecredit risk has not increased significantly since initial recognition, a loss allowance isrecognized based on 12-month expected credit losses. On the other hand, if the credit risk
has increased significantly since initial recognition, a loss allowance is recognized based on

8
Notes to consolidated financial statements

expected credit losses through the remaining life of the financial asset. Whether the credit
risk has increased significantly is determined based on changes in the risk of default.
Whether there are changes in the risk of default is determined by taking into account any
significant changes in the external credit ratings of the financial asset, unfavorable changes
in the status of business operations or financial position, any events of overdue payments
and other information. For trade receivables, however, lifetime expected credit losses arerecognized from when the instruments are first recognized.
Expected credit losses are measured based on the discounted present value of differences
between contractual amounts to be received and amounts expected to be received.
(iv) Derecognition of financial assets
The Group derecognizes a financial asset when the contractual rights to the cash flows fromthe financial asset expire or when the Group transfers substantially all the risks and rewardsof ownership of the asset to another entity. If the Group retains control over the transferredasset, the Group recognizes the asset and related liability to the extent of its continuing
involvement.
2) Derivatives
The Group utilizes derivatives, including foreign exchange forward contracts, interest rate
swaps and commodity forward contracts, to hedge, respectively, foreign exchange, interest
rate and commodity price risks. These derivative instruments are initially measured at fairvalue when the contract is entered into and are subsequently remeasured at fair value.
3) Inventories
Inventories are measured at the lower of cost and net realizable value. The net realizablevalue of inventories is the estimated selling price in the ordinary course of business less theestimated costs of completion and the estimated costs necessary to make the sale. The costof inventories is determined mainly by the moving-average method and includes the cost ofpurchase, cost of conversion and all other costs incurred in bringing the inventories to theirpresent location and condition.
(2) Depreciation and amortization for major assets
1) Property, plant and equipment other: Assets other than land and construction inthan leased assets
progress are depreciated using the straight-line
method over their estimated useful lives asfollows.
Buildings and structures: 2–50 years
Machinery, equipment and vehicles: 2–
17 years
Estimated useful lives, residual values anddepreciation methods are reviewed at each fiscal
year-end, and any changes are applied
prospectively as changes in accounting
estimates.

9
Notes to consolidated financial statements2) Intangible assets other than leased
assets3) Leased assets: Intangible assets, except those for which theuseful life is not determined, are amortizedusing the straight-line method over theirestimated useful lives as follows.
Software: 5 years
Estimated useful lives, residual values andamortization methods are reviewed at eachfiscal year-end, and any changes are applied
prospectively as changes in accounting
estimates.
: Leased assets under finance leases are
depreciated using the accounting method that is
applied for said assets over their estimateduseful lives or lease terms, whichever is shorter.

(3) Recognition criteria for significant provisions
Provisions are recognized when the Group has present legal or constructive obligations as aresult of past events and it is probable that outflows of resources embodying economic benefits
will be required to settle the obligations and reliable estimates can be made of the amount of theobligations. When the effect of the time value of money is material, the amount of a provision ismeasured by discounting the estimated future cash flows at the discount rate, which is a pretax
rate that reflects the time value of money and the risks specific to the liability. The unwindingof the discount due to the passage of time is recognized as finance cost.
(4) Other important items for preparing consolidated financial statements
1) Hedge accounting:
At the inception of a hedge, the Group formally provides a hedge designation anddocumentation relating to the hedging relationship to which hedge accounting will beapplied, as well as the risk management objective and strategy in carrying out the hedge.
Said documentation includes specific hedging instruments, hedged items or transactions, thenature of hedged risks and the method for assessing the effectiveness of a hedging
relationship. These hedges are assessed on an ongoing basis to determine whether they wereactually effective for all financial reporting periods when they were designated as hedges.
Specifically, a hedge is judged as effective if all of the following requirements are fulfilled.
- There is an economic relationship that provides an offset between the hedged item andthe hedging instrument;- The effect of credit risk does not dominate the value changes that result from that
economic relationship; and- The hedge ratio of the hedging relationship is the same as that resulting from thequantity of hedged items and the quantity of hedging instruments that the Company
actually uses.
The Company uses the following hedge accounting method if the requirements for hedge
accounting are met.
Cash flow hedges

10Notes to consolidated financial statements

The effective portion of gains or losses on hedging instruments is recognized as othercomprehensive income, while the ineffective portion is recognized immediately in profit orloss in the consolidated statement of income.
Amounts relating to hedging instruments recognized as other comprehensive income arereclassified to profit or loss when hedged transactions affect profit or loss.
If a hedging relationship ceases to meet the hedge effectiveness requirement relating to thehedge ratio, but the risk management objective for that designated hedging relationshipremains the same, the Group adjusts the hedge ratio of the hedging relationship so that itmeets the qualifying criteria again (this is referred to as “rebalancing” hereinafter). After
rebalancing, if a hedge becomes no longer qualified for hedge accounting or a hedging
instrument expires, or is sold, terminated or executed, hedge accounting is discontinued
prospectively.
When hedge accounting is discontinued, the balance of cash flow hedges already recognizedin other comprehensive income remain in equity if the hedged future cash flows are still
expected to occur, whereas such balance is reclassified immediately to profit or loss if thehedged future cash flows are no longer expected to occur.
2) Accounting method for: Consumption taxes are accounted for using the net
consumption taxes
method of reporting.
3) Foreign currency translation: A foreign currency transaction is translated into thefunctional currency of each Group company at the rateof exchange at the date of the transaction.
Foreign currency monetary assets and liabilities at theend of the reporting period are translated into thefunctional currency at the rate of exchange at the end of
the reporting period.
Foreign currency non-monetary assets and liabilities
measured at fair value are translated into the functional
currency at the rate of exchange at the date when said
fair value is determined.
Differences arising from translation or settlement arerecognized in profit or loss, except that differences
arising from financial assets measured at fair value
through other comprehensive income and cash flow
hedges are recognized in other comprehensive income.
The assets and liabilities of foreign operations aretranslated into Japanese yen at the rate of exchange atthe end of the reporting period, while the income andexpenses of foreign operations are translated into
Japanese yen at the average exchange rate for theperiod, unless exchange rates do not fluctuatesignificantly during the period. Exchange differences
arising from the translation of the financial statementsof foreign operations are recognized in othercomprehensive income. On the disposal of a foreign

11
Notes to consolidated financial statements4) Treatment of goodwill5) Employee benefits

6) Presentation of amounts

operation, the exchange differences relating to that
foreign operation are recognized in profit or loss during
the period when said disposal was made.
: Goodwill is not amortized but is subject to an
impairment testing annually and whenever anindication of impairment exists.
Impairment losses relating to goodwill are recognizedin the consolidated statement of income, andsubsequent reversals of the losses are not conducted.
: The Group adopts defined benefit pension plans anddefined contribution pension plans as post-employment
benefits for employees.
The Group determines the present value of defined
benefit obligations and related current service cost andpast service cost using the projected unit credit method.
The discount rate is determined by reference to market
yields on high-quality corporate bonds at the end of thereporting period corresponding to the discount period,
which is established to reflect the period until theestimated timing of benefit payments in each fiscal
year in the future.
Liabilities or assets pertaining to defined benefit
pension plans are calculated by deducting the fair valueof plan assets from the present value of defined benefit
obligations.
Remeasurements of defined benefit pension plans arecollectively recognized in other comprehensive income
for the period when they are incurred and are
immediately transferred from other components ofequity to retained earnings.
Past service cost is amortized as profit or loss for theperiod when it is incurred.
Cost relating to defined contribution pension plans is
recognized as an expense at the time of contribution.
: Amounts less than one million yen are truncated.

12
Notes to consolidated financial statements

(Notes to the consolidated statement of financial position)
1. Assets pledged as collateral and obligations related to collateral(1) Assets pledged as collateral
Property, plant and equipment
Buildings and structures
Land
Total
(2) Obligations related to collateral
Loans payable (current)
Total
2. Allowance for doubtful accounts directly deducted from assets
Trade and other receivables
Financial assets (non-current)

62 million yen
160 million yen
223 million yen

50 million yen
50 million yen

16 million yen
18 million yen

3. Accumulated depreciation of property, plant and equipment
30,562 million yen(Notes to the consolidated statement of changes in equity)
1. Class and number of issued shares and treasury shares
Number of shares Number of shares Number of shares Number of sharesat the beginning of increased during decreased during at the end of this
this consolidated
this consolidated this consolidated consolidated
accounting period accounting period accounting period accounting period(Thousands of(Thousands of(Thousands of(Thousands ofshares)shares)shares)shares)Issued shares
Common stock
36,2543,600
39,854
Total
36,2543,600
39,854
Treasury shares
Common stock
3,654
0
3,400
255
Total
3,654
0
3,400
255
(Notes) 1. The increase of 3,600 thousand shares in issued shares of common stock was due to theissuance of new shares.
2. The increase of 0 thousand shares in treasury shares of common stock was due to thepurchase of shares less than one unit.
3. The decrease of 3,400 thousand shares in treasury shares of common stock was due tothe disposal of treasury stock.
4. The treasury shares include 145 thousand shares held by the ESOP trust and 76
thousand shares held by the BIP trust.

13
Notes to consolidated financial statements

2. Dividends(1) Dividends paid
Class of
Total
Dividends
Effective
Record datesharesdividends
per sharedate
May 10, 2017
Common984
March 31,
May 31,30.00 yen
Board of Directors’ Meetingstock
million yen
2017
2017
October 26, 2017
Common984
September November
30.00 yen
Board of Directors’ Meetingstock
million yen
30, 2017
27, 2017(Notes) 1. Total dividends according to the resolution at the Board of Directors’ meeting on May
10, 2017 include dividends of 6 million yen relating to the Company’s shares held by
the ESOP trust and the BIP trust.
2. Total dividends according to the resolution at the Board of Directors’ meeting on
October 26, 2017 include dividends of 6 million yen relating to the Company’s shares
held by the ESOP trust and the BIP trust.
Resolution(2) Among dividends whose record date within this consolidated accounting period, those having
an effective date within the following consolidated accounting period (scheduled)Class of
Total
Source ofDividends
RecordEffective
Resolution
sharesdividends
dividends
per sharedate
date
May 8, 2018
Board ofCommon1,314 Retained
March 31,
May 30,33.00 yen
Directors’
stockmillion yen earnings
2018
2018
Meeting(Note) Total dividends according to the resolution at the Board of Directors’ meeting on May 8, 2018
include dividends of 7 million yen relating to the Company’s shares held by the ESOP trust
and the BIP trust.

14
Notes to consolidated financial statements

(Notes to financial instruments)
1. Status of financial instruments
In the course of business activities, the Group is exposed to financial risks, such as credit risks,liquidity risks, currency risks, interest rate risks and market price fluctuation risks, and performs
risk management activities to reduce said financial risks.
The Group also uses derivative financial instruments, such as foreign exchange forward contracts
and interest rate swaps, to hedge against market risks and makes it a policy not to enter into
derivative transactions for speculative purposes.
1) Credit risk
A credit risk refers to a risk of customers going into default on contractual debts, causing
financial losses to the Group.
The Group manages the credit risk in accordance with its credit control regulations, using
the credit limits set for its business partners.
The Group’s receivables consist of receivables from many customers operating in a wide
range of industries and regions, and are not subject to risks excessively concentrated on asingle customer or the group to which said customer belongs.
The carrying amount of financial assets, net of accumulated impairment loss, presented in
the consolidated statement of financial position represents the maximum exposure of theGroup’s financial assets to credit risks without taking into account the value of the collateralobtained.
Regarding the exposure to these credit risks, there are no properties held as collateral andother credit enhancements.
2) Liquidity risk
A liquidity risk refers to a risk of the Group becoming not able to repay the financial
liability for debts on the due date.
The Group manages liquidity risk by preparing adequate amount of funds for repayment,
while securing from financial institutions a line of credit to which it is accessible as needed
and monitoring the plans and results of cash flows on a continuous basis.
3) Currency risk
The Group operates globally and is exposed to currency risks related to foreign currencytransactions. For certain foreign currency transactions for which the amounts are significant
and that are individually identifiable, the Group uses hedging instruments to hedge against
currency risks relating to the hedged items within a certain range in accordance with its
internal regulations.
Accordingly, the exposure to currency risks is insignificant and is judged as immaterial to
the Group.
4) Interest rate risk
An interest rate risk is defined as a risk of the fair value of financial instruments or the
future cash flows from financial instruments fluctuating due to fluctuations in market
interest rates. The Group’s exposure to interest rate risks mainly relates to payables, such asloans payable, and receivables, such as interest-bearing deposits. Because the amount ofinterest is subject to fluctuations in market interest rates, the Group is exposed to interest
rate risks that cause fluctuations in future cash flows of interest.
The Group uses interest rate swaps to mitigate the risk of fluctuations in interest payable15
Notes to consolidated financial statements

relating to loans payable, thereby stabilizing cash flows.
Accordingly, the impact of fluctuations in the amount of interest payments due to interestrate fluctuations on the Group is insignificant, and interest rate risks are judged as
immaterial to the Group.
5) Market price fluctuation risk
Precious metals and rare metals, the core products of the Group’s precious metal business,
are traded in international markets, and the prices thereof are exposed to commodity pricerisks due to the political and economic trends of supplier and consumer countries, as well as
foreign exchange rates.
To mitigate commodity price risks, the Group uses derivative instruments such ascommodity forward contracts, as hedging instruments against commodity price risks mainly
due to market price fluctuations.
Accordingly, the Group’s exposure to commodity price fluctuation risks is insignificant andmarket price fluctuation risks are judged as immaterial to the Group.
2. Fair value, etc., of financial instruments
The carrying amounts reported in the consolidated statement of financial position on March 31,2018 (consolidated fiscal closing date for the fiscal year under review), and the fair value offinancial instruments are as follows:(Millions of yen)
Carrying amount inconsolidated statement
Fair value (*1)
of financial position(*1)
Financial assets
Financial assets measured at amortized cost
Cash and cash equivalents
24,14024,140Trade and other receivables
36,97336,973
Other
427
427
Financial assets measured at fair value
through other comprehensive income
Other financial assets
110
110
Financial assets designated as hedging
instruments
Derivative instruments
659
659
Financial liabilities
Financial liabilities measured at amortized
cost
Trade and other payables
14,17914,179Loans payable
41,115
41,175
Other
109
109
Financial liabilities designated as hedging
instruments
Derivative instruments
2,151
2,151

16
Notes to consolidated financial statements

(*1)

The methods used for determining the fair value of financial instruments are as follows.
Cash and cash equivalents, trade and other receivables and trade and other payables:
These are settled in a short term, and the carrying amount thereof is a reasonableapproximation to the fair value thereof.
Other financial assets and other financial liabilities:
The fair value of listed shares is determined based on the market prices at the end of
the reporting period.
The fair value of derivative instruments is determined mainly by reference to prices
quoted by financial institutions.
Loans payable:
The fair value of loans payable is determined based on the present value, which is
obtained by discounting future cash flows at an interest rate assumed to be applied if
similar contracts were newly executed.

(Notes to information per share)
Equity attributable to owners of parent per share
Basic profit per share
Diluted profit per share(Notes to significant subsequent events)
Not applicable

17
Notes to consolidated financial statements

1,627.20 yen
270.77 yen
269.90 yen

Notes to non-consolidated financial statements(Notes to significant accounting policies)
1. Valuation standards and valuation methods for assets
Securities
Shares of subsidiaries: Cost mainly determined by the moving-averagemethod.
2. Depreciation methods for non-current assets
Property, plant and equipment: Straight-line method
Assets with acquisition amount of 100 thousand
yen or more to less than 200 thousand yen are
equally depreciated for three years.
Intangible assets: Straight-line method
Software for internal use is amortized under thestraight-line method based on the period forwhich the Company can use such software (fiveyears or less).
3. Accounting standards for provisions
Allowance for doubtful accounts: To provide for possible losses due to theuncollectibility of claims, an allowance for
doubtful accounts is provided for specific claims
with a higher probability of default at an
uncollectible amount estimated by considering
the collectability of individual claims.
Provision for bonuses: To allow for the payment of bonuses to
employees, the standard for estimated amountsof bonuses to be paid is recorded.
Provision for director’s bonuses: To allow for the payment of bonuses to directors,
the standard for estimated amounts of bonuses
to be paid is recorded.
Provision for management board incentive: To allow for the granting of the Company sharesplan trust
to the Company’s Directors in accordance with
the Regulations Concerning Stock Issuance, anamount of stock grant obligations estimated at
the end of the fiscal year under review isrecorded.
Provision for stocks payment: To allow for the granting of the Company sharesto the Group employees in accordance with theRegulations Concerning Stock Issuance, anamount of stock grant obligations estimated at
the end of the fiscal year under review isrecorded.

18
Notes to non-consolidated financial statements

4. Other important items for preparing financial statements
1) Treatment of deferred assets
Share issuance cost is recognized as an expense
when expended.
2) Hedge accounting
Hedge accounting methods: The Company accounts for hedging activities
under deferral hedge accounting. Furiate-shori(accounting method in which the current andforward rate difference is allocated by period
length for the calculation at the accounting
period) is applied to foreign exchange forward
contracts which conform to the requirements ofsuch hedge accounting. Tokurei-shori (anaccounting method in which the net interest
swap amount is treated by adjusting the intereston hedged items) is applied to interest rate
swap contracts that conform to the requirementof such hedge accounting.
Hedging instruments and hedged items
Hedging instruments: Currency swaps and interest rate swaps
Hedged items: Payment of principal and interest of long-termloans payable
Hedging policy: In accordance with internal regulations, theCompany hedges risks associated withfluctuations in foreign currency exchange rates
and interest rates.
Methods for assessing the effectiveness : During the inception of hedging to theof hedging
judgment of effectiveness, accumulated rate
fluctuations in hedged items and hedging
instruments are compared and then assessment
is made on the basis of the amount of thesefluctuations. For currency swaps subject tofuriate-shori and interest rate swaps subject totokurei-shori, the assessment of effectiveness isomitted.
3) Accounting method for consumption: Consumption taxes are accounted for using thetaxes
net method of reporting.

19
Notes to non-consolidated financial statements

(Notes to balance sheet)
1. Accumulated depreciation of property, plant and equipment

1,775 million yen

2. Guarantee liabilities
Guarantees are provided for the bank loans of the following company.
Asahi Refining Canada Ltd.
21,255 million yen
Total
21,255 million yen
3. Monetary claims and monetary obligations related to affiliated companies
Short-term monetary claims
41,686 million yen
Short-term monetary obligations
24 million yen(Notes to statement of income)Amount of transactions with affiliated companies
Amount of operating transactions with affiliated companies
Operating revenue
Amount of other operating transactions
Amount of transactions other than operating transactions

7,903 million yen
89 million yen
244 million yen(Notes to statement of changes in net assets)
Class and number of treasury stocks
Number of shares Number of shares Number of shares Number of sharesat the beginning
increased during
decreased during at the end of thisClass of shares of this fiscal year this fiscal year
this fiscal year
fiscal year
(Thousands of(Thousands of(Thousands of(Thousands ofshares)shares)shares)shares)Common stocks
3,654
0
3,400
255
Total
3,654
0
3,400
255
(Notes) 1. The increase of 0 thousand shares in treasury shares of common stock was due to thepurchase of shares less than one unit.
2. The decrease of 3,400 thousand shares in treasury shares of common stock was due tothe disposal of treasury stock.
3. The treasury shares include 145 thousand shares held by the ESOP trust and 76
thousand shares held by the BIP trust.

20
Notes to non-consolidated financial statements

(Notes to tax effect accounting)Breakdowns of main items causing deferred tax assets and deferred tax liabilities
Deferred tax assets
Provision for stocks payment
3 million yen
Impairment losses
13 million yen
Business tax
15 million yen
Provision for directors’ bonuses
7 million yen
Allowance for doubtful accounts
5,116 million yen
Loss on valuation of shares of affiliated
3 million yen
companies
Other
9 million yen
Subtotal
5,169 million yen
Valuation allowance(5,119) million yen
Total deferred tax assets
49 million yen
Net deferred tax assets
49 million yen(Notes to transactions with related parties)
Subsidiaries and affiliated companies, etc.
Category

Subsidiary

Name ofcompanies

Asahi Pretec
Corp.

Voting rights(%)

Details oftransaction

Amount oftransaction(Millions ofyen)Collection ofloaned funds

35,761

Support of funds

Loan of funds(Note 1)

41,678

Management
guidance

Receipt of interest(Note 1)
Management
guidance(Note 2)
Receipt ofdividends

Relationshipwith relatedparties

Owned
Direct 100%

Receipt ofdividends

Account

Term-endbalance(Millions ofyen)

Short-termloans toaffiliatedcompanies(Note 3)

41,678

121

–

–

698

–

–

6,700

–

–

Transaction terms and conditions and policy, etc., to determine terms and conditions fortransactions(Note 1) As for loans of funds, we reasonably determine interest rates taking into consideration
market interest rates.
(Note 2) We determine prices and other terms and conditions for transactions by reference toprevailing market interest rates, etc.
(Note 3) Allowance for doubtful accounts of 16,709 million yen is recognized to provide forclaims with a higher probability of default.
In addition, provision of allowance for doubtful accounts of 55 million yen isrecognized for the fiscal year under review.
(Notes to information per share)
Net assets per share
Net profit per share
Diluted net profit per share

21
Notes to non-consolidated financial statements

1,319.27 yen
195.73 yen
195.10 yen

(Notes to significant subsequent events)
Not applicable22
Notes to non-consolidated financial statements