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.

Asahi Holdings, Inc.
(Stock code: 5857)

Notice of the 8th Annual General Meeting of Shareholders
Date and time:
10:30 a.m. on Tuesday, June 20, 2017
Venue:
KOBE PORTOPIA HOTEL
10-1, Minatojima Nakamachi 6-chome, Chuo-ku, Kobe, Hyogo“Kairaku-no-ma,” basement floor, Main Building(Please refer to the place of the meeting shown at the end of this notice.)
Proposals:
Proposal 1:
Proposal 2:

Election of Five (5) Directors (Excluding Directors Serving as the Audit andSupervisory Committee Members)
Election of Four (4) Directors Serving as the Audit and Supervisory Committee
Members

Deadline for the exercise of voting rights:
Documents must arrive before noon on Monday, June 19, 2017.

CoverContents
 Notice of the 8th Annual General Meeting of Shareholders ............................................................. 2
Attached documents
 Business Report....................................................................................................................... 6
 Consolidated Financial Statements ....................................................................................... 25
 Financial Statements ............................................................................................................. 39
 Audit Reports ........................................................................................................................ 46
 Reference Documents for General Meeting of Shareholders.......................................................... 52

1
Contents

(Stock code: 5857)
May 30, 2017
4-4-17 Kano-cho, Chuo-ku, Kobe, Japan
Asahi Holdings, Inc.
Mitsuharu Terayama, President & CEO

Convocation Notice

Dear Shareholders:

3. Meeting Agenda
Items to be reported: 1) Business Report, the consolidated financial statements and the resultsof audits of the consolidated financial statements by the Accounting
Auditor and the Audit and Supervisory Committee for the 8th fiscal
term (April 1, 2016 through March 31, 2017)
2) Report on non-consolidated financial statements for the 8th fiscal
term (April 1, 2016 through March 31, 2017)
Items to be resolved:
Proposal 1: Election of Five (5) Directors (Excluding Directors Serving as the Audit andSupervisory Committee Members)
Proposal 2: Election of Four (4) Directors Serving as the Audit and Supervisory Committee
Members2
Cover letter of convocation

Consolidated
Financial Statements
Financial Statements

1. Date and time:
2. Venue:

Details of the meeting
10:30 a.m. on Tuesday, June 20, 2017
KOBE PORTOPIA HOTEL
10-1, Minatojima Nakamachi 6-chome, Chuo-ku, Kobe, Hyogo“Kairaku-no-ma,” basement floor, Main Building(Please refer to the place of the meeting shown at the end of this notice.)
Please understand that souvenirs for shareholders who attend themeeting will not be provided.

Audit Reports

Exercise of voting rights by mail:Please return the enclosed “Voting Right Exercise Form” by the aforementioned deadline,
after indicating your approval or disapproval of each agenda item
Exercise of voting rights via the Internet, etc.:
Please review the “Procedure for Exercising Voting Rights via the Internet, etc.,” on pages
4–5 and exercise your voting rights by the aforementioned deadline.

Reference Documents for
General Meeting of Shareholders

This is to inform you that the 8th Annual General Meeting of Shareholders will be held at thefollowing time and place and to cordially request your presence.
If you are unable to be present, you are entitled to exercise your voting rights through either ofthe following methods. You are kindly requested to read the attached reference documents andexercise your voting rights by noon on Monday, June 19, 2017.

Business Report

Notice of the 8th Annual General Meeting of Shareholders

If you attend the meeting, please submit the “Voting Right Exercise Form” at the reception desk
upon arrival.
Please note that any modifications to the business report, the financial statements and/or thereference documents will be posted on our Web site (http://www.asahiholdings.com/).

3
Cover letter of convocation

*i-mode, EZweb and Yahoo! are trademarks or registered trademarks of NTT DOCOMO INC., KDDI
CORPORATION and Yahoo! Inc. of U.S., respectively.
(2) The exercise of voting rights using computers or smartphones may be disabled by operating

environments, including the use of a firewall when accessing the Internet, the use of antivirus
software, the use of a proxy server and/or if you have not designated the use of encryptedtransmission (TSL transmission).
(3) For your exercise of voting rights using mobile phones, make sure to use i-mode, EZweb orYahoo! service. To preserve security, you cannot vote through a model of phone that does notallow TSL transmission or transmission of the phone ID information.
(4) Although we will accept the exercise of voting rights via the Internet until noon on Monday,
June 19, 2017, we recommend voting as early as possible. If you have any questions, pleasecontact our Help Desk.
2. Exercising Your Voting Rights via the Internet(1) At the Voting Rights Exercise Web site (http://www.evote.jp/), use the log-in ID andtemporary password given on the enclosed Voting Right Exercise Form and follow the onscreen instructions to indicate your approval or disapproval of each proposal.
(2) To protect against illegal access by persons other than qualified shareholders (“spoofing”)
and the manipulation of voting details, please be aware that shareholders using the site will
be asked to change their temporary password.
(3) Whenever a meeting of shareholders is convened, new log-in IDs and temporary passwords
will be issued.
3. Treatment of Voting Rights Exercised Multiple Times(1) If you have exercised your voting rights both by mail and via the Internet, those exercised
via the Internet will be considered as valid.
(2) If you have exercised your voting rights multiple times on the Internet, the final vote will beconsidered as valid. If you have exercised your voting rights via multiple equipment such as
computers, smartphones and/or mobile phones, the final vote cast will be considered as valid.
4. Costs Incurred in Accessing the Voting Rights Exercise Web Site
The costs incurred when accessing the Voting Rights Exercise Web Site such as Internet access fees
will be the responsibility of the shareholder. Similarly, fees required to use mobile phones, such as
packet transmission fees, will also be the responsibility of the shareholder.

4
Procedure for Exercising Voting Rights via the Internet, etc.

Convocation NoticeBusiness Report(1) The exercise of voting rights via the Internet is possible only by accessing the Voting Rights
Exercise Web Site (http://www.evote.jp/) designated by the Company either from a computer,a smartphone or a mobile phone (i-mode, EZweb or Yahoo!Keitai).* (However, this Web site
is not available from 2 a.m. to 5 a.m. daily.)

Consolidated
Financial Statements

1. Voting Rights Exercise Web Site

Financial Statements

If you are attending the meeting, no procedures to exercise voting rights by mail or via the Internet,
etc., are necessary.

Audit Reports

If you intend to exercise your voting rights via the Internet, etc., please pay attention to the following
notes.

Reference Documents for
General Meeting of Shareholders

Procedure for Exercising Voting Rights via the Internet, etc.

5. Electronic Voting Platform for Institutional Investors
Nominee shareholders including banks specializing in asset and trust management/custody may use
with prior application the “Electronic Voting Platform” operated by ICJ Inc. established by Tokyo
Stock Exchange, Inc., and other entities, as a means to exercise their voting rights electronically andparticipate in the General Meeting of Shareholders of the Company.
For inquiries about the system or other matters, contact:
Corporate Agency Division (Help Desk), Mitsubishi UFJ Trust and Banking Corporation
Phone: 0120-173-027 (Toll Free within Japan) (available from 9 a.m. to 9 p.m.)

5
Procedure for Exercising Voting Rights via the Internet, etc.

Precious metal business
Volume of collection in the precious metals recycling business was as follows. In theelectronics sector, the volume of collection of gold was at the same level as a year earlier
despite the continued contraction of the domestic market, thanks to the sustenance of current
customers and development of new customers in the E-scrap and precision cleaning
businesses. In the dental sector, amidst the amount of precious metals used for dental
materials declining, the volume of collection of gold and palladium remained at the samelevel as the previous year. In the jewelry sector, the volume of collection of platinum waslarger than a year before, although the year-on-year volume of collection of gold was lower
due to continued drop in the volume of distribution in the purchasing market. In theautomotive catalyst sector, vigorous marketing efforts led to a higher volume of collectionof palladium and platinum than a year earlier despite the continued decline in the number ofdomestic scrapped vehicles. Regarding the average price of precious metals, the average
price for silver was higher than a year before, while the average prices for gold, palladiumand platinum were lower than the previous year.
As for gold and silver refining business in North America, the unit price forcommissioned refining business remained at a low level due to continued slowdown ofrelated industries. This affected revenue of the business, and as a result of a careful reviewof the future recoverability of goodwill generated on the acquisition of Asahi Refining, an
impairment loss of 7,512 million yen was recorded. As a result of this, the outstandingbalance of goodwill for Asahi Refining decreased to zero.
Environmental preservation businessAlthough the volume of industrial waste discharged in Japan is on a downward trend ingeneral, the overall volume handled by the Group remained solid as Group companies
focused on developing new customers and obtaining contracts by capitalizing on theircharacteristics and inter-company collaboration.
Life & health business

6
Status of business for the fiscal year

Convocation NoticeBusiness Report
Consolidated
Financial Statements

1) Circumstances and results of businessIn the Japanese economy during the consolidated fiscal year ended March 31, 2017,
moderate recovery continued, as exhibited by signs of improvement in corporate earnings
and employment environment, on the back of the government’s economic policies and the
Bank of Japan’s monetary easing policies, despite lackluster personal consumption figures.
The political changes have had a significant impact on the currency exchange andcommodity market conditions.
Under these economic conditions, the Asahi Holdings Group (the “Group”)’s results ineach business segment were as follows.

Financial Statements(1) Status of business for the fiscal year

Audit Reports

1. Current Status of the Group

Reference Documents for
General Meeting of Shareholders

Attached documents
Business Report (April 1, 2016 through March 31, 2017)

In the health care equipment sectors, overall sales of large-size massage chairs as thecore item and other products remained sluggish amidst weak personal consumption andother factors despite efforts to expand the sales of low-style massage chairs, small-sizedmassage devices, and electrolytic hydrogen water ionizers, among others. As for firefighting equipment, business remained strong thanks in part to an increase in building
construction projects in the metropolitan area.
As a result of the above, as consolidated results of operations for the fiscal year, werecorded consolidated revenue of 106,828 million yen, operating income of 2,038 million
yen and loss attributable to owners of parent of 1,213 million yen.
Compared with the previous fiscal year, revenue decreased by 12,524 million yen,operating income decreased by 4,018 million yen and profit attributable to owners of parent
decreased by 4,081 million yen.
By segment, revenue in the precious metal business was 66,994 million yen, revenue inthe environmental preservation business was 15,942 million yen and revenue in the life &health business was 23,967 million yen.
Effective from the fiscal year ended March 31, 2017, the Group prepares consolidated
financial statements in accordance with the International Financial Reporting Standards(hereinafter “IFRS”) pursuant to the provision of Article 120, Paragraph 1 of the Rules ofCorporate Accounting.

7
Status of business for the fiscal year

Convocation Notice

Revenue was composed of the following:<Breakdown of revenue>

Gold metals

32,76230.7

84.0

Silver metals

4,454

4.2

103.1

Palladium

12,695

11.9

88.2

Platinum

5,271

4.9

69.2

Disposal revenues

18,018

16.9

100.5

Other

33,624

31.4

93.3

Total

106,828

100.0

89.5

YOY change (%)

Business Report

Ratio (%)

Reference Documents for
General Meeting of Shareholders

Audit Reports

2) Capital expenditure
Capital expenditure made in the fiscal year totaled 3,036 million yen. The main expenditure
was an investment in buildings, machinery and equipment.
3) Financing
Not applicable for the fiscal year4) Assignment, absorption-type split and incorporation-type split of businessNot applicable for the fiscal year5) Acquisition of the business of other companies
Not applicable for the fiscal year6) Succession of rights and obligations pertaining to the business of other corporations,etc., through an absorption-type merger or an absorption-type split
Not applicable for the fiscal year7) Acquisition or disposal of shares or other equity or share options of other companies
Not applicable for the fiscal year

Consolidated
Financial Statements

Revenue(Millions of yen)

Financial Statements

Category

8
Status of business for the fiscal year

(2) Property and profit/loss

Category

Net sales /Revenue
Operating income
Profit (loss)
attributable toowners of parent
Net income pershare /
Basic earnings(loss) per share
Total assets

5th term
April 1, 2013
through
March 31,2014

6th term
April 1, 2014
through
March 31,2015

7th term

JapaneseJapaneseJapanese

GAAP

GAAP

GAAP

April 1, 2015 throughMarch 31, 2016

8th term
April 1, 2016
through
March 31,2017
(Current
fiscal year)

IFRS

IFRS

(Millionsof yen)(Millionsof yen)94,254111,417

118,473

119,352

106,828

9,631

10,480

8,705

6,057

2,038

(Millionsof yen)

5,971

5,774

5,031

2,867

(1,213)(Yen)

183.50176.89153.5487.48(37.24)

66,112

104,877

103,589

101,599

88,976(Millionsof yen)(Millionsof yen)Net assets /46,491
50,95851,30048,98844,827
Total equity
Net assets per
share /
Equity(Yen)
1,422.51
1,542.82
1,560.21
1,490.56
1,359.02
attributable toowners of parent
per share
Note: 1. The figures for the 5th term reflect the retrospective application of the “Practical Solution on
Transactions of Delivering the Company’s Own Stock to Employees, etc., through Trusts” (ASBJ
PITF No. 30, March 26, 2015).
2. Beginning with the 8th term, the consolidated financial statements are prepared in compliance with
IFRS. For reference, figures for the 7th term calculated in compliance with IFRS are presented
together with those in compliance with the Japanese GAAP.
3. If the presentation of account names differs between the Japanese GAAP and IFRS, both names arepresented.

(3) Significant parent company and subsidiaries
1) Relationship with parent company
Not applicable2) Significant subsidiaries
Company name
Asahi Pretec Corp.
Japan Waste Corporation
Asahi Americas Holdings,
Inc.

Capital4,480 million
yen
400 million
yen
10 million
yen

Our voting
right ratio

Major business100.0%

Precious metal business andenvironmental preservation business100.0%

Environmental preservation business100.0%

Precious metal business9
Property and profit/loss and Significant parent company and subsidiaries

(5) Principal businesses (as of March 31, 2017)
The Group is mainly engaged in the precious metal business, the environmental
preservation business and the life & health business.
1) Precious metal business○ Collection/reproduction and processing of precious metals and other metals (gold,
silver, palladium, platinum, indium, etc.) and refining of precious metals○ Purchase and sales of precious metals and other metals○ Sales of precious metal products
2) Environmental preservation business3) Life & health business

10
Significant parent company and subsidiaries, Challenges to be addressed, and Principal businesses

Convocation NoticeBusiness Report
Consolidated
Financial Statements
Financial Statements
Audit Reports(4) Challenges to be addressed
1) Precious metal business segment
As it is the Group’s core business, the Group will take the following measures to expand
earnings in this segment.
In the domestic market, although the total amount of precious metals collected fromvarious sectors called “urban mines” is on a decline, we will enhance our competitiveness byaggressively developing new routes of collection. For the gold and silver refining business inNorth America, we will reconstruct its operating foundations through production cost
reduction efforts and proactive marketing efforts to increase the Asahi brand recognition. In
Asian markets, we will review our businesses with an emphasis on profitability.
2) Environmental preservation business segment
As a stable growth business of the Group, we will manage the segment’s business with anemphasis on profitability. To streamline business operations, we will encourage the Group
companies in the environmental preservation business to capitalize on their strengths andcollaborate with each other. In addition, we will make capital investments of an appropriate
scale that will ensure stable growth.
3) Life & health business segment
Through measures to expand earnings, such as developing new products and new sales
channels, building innovative business models and promoting overseas development, we willgrow this segment into a new business pillar of the Group.

Reference Documents for
General Meeting of Shareholders3) Specified wholly owned subsidiarya. Name and address of the specified wholly owned subsidiary
Name: Asahi Pretec Corp.
Address: 21 Uozakihamamachi, Higashinada-ku, Kobeb. Total book value of shares of the specified wholly owned subsidiary held by theCompany and wholly owned subsidiaries at the end of the fiscal year under review:
24,621 million yen
c. Total amount recorded in the assets section of the balance sheet of the Company for the
fiscal year under review:
55,321 million yen

(6) Major sales offices and plants (as of March 31, 2017)
1) The Company
Main office
Head offices

4-4-17 Kano-cho, Chuo-ku, Kobe
Kobe Head Office: 4-4-17 Kano-cho, Chuo-ku, Kobe
Tokyo Head Office: 1-7-12 Marunouchi, Chiyoda-ku, Tokyo
2) Major subsidiaries’ business offices(a) Asahi Pretec Corp.
Main office
21, Uozakihamamachi, Higashinada-ku, Kobe
Head offices
Kobe Head Office: 4-4-17 Kano-cho, Chuo-ku, Kobe
Tokyo Head Office: 1-7-12 Marunouchi, Chiyoda-ku, Tokyo
Research laboratory The Technical Research Center (Kobe-shi)
Business offices
Kitakanto (Kitakatsushika-gun, Saitama Pref.), Nagano (Tomi-shi,
Nagano Pref.), Hanshin (Amagasaki-shi, Hyogo Pref.), Kobe (Kobeshi), Shikoku (Saijo-shi, Ehime Pref.), Kitakyushu (Kitakyushu-shi),
Fukuoka (Koga-shi, Fukuoka Pref.)Sales offices
Sapporo (Kitahiroshima-shi, Hokkaido), Aomori (Aomori-shi),Sendai (Miyagi-gun, Miyagi Pref.), Niigata (Sanjo-shi, Niigata Pref.),
Kitakanto (Kitakatsushika-gun, Saitama Pref.), Kanto (Kawaguchishi, Saitama Pref.), Yokohama (Yokohama-shi), Kofu (Chuo-shi,
Yamanashi Pref.), Shizuoka (Yaizu-shi, Shizuoka Pref.), Nagoya(Komaki-shi, Aichi Pref.), Hokuriku (Toyama-shi), Hanshin(Amagasaki-shi, Hyogo Pref.), Kobe (Kobe-shi), Okayama(Okayama-shi), Hiroshima (Hiroshima-shi), Shikoku (Saijo-shi,Ehime Pref.), Fukuoka (Koga-shi, Fukuoka Pref.), Kagoshima(Kagoshima-shi), Okinawa (Itoman -shi, Okinawa Pref.)PlantsSaitama (Kitakatsushika-gun, Saitama Pref.), Nagano (Tomi-shi,
Nagano Pref.), Amagasaki (Amagasaki-shi, Hyogo Pref.), Kobe
(Kobe-shi), The Technical Research Center (Kobe-shi), Ehime (Saijoshi, Ehime Pref.), Kitakyushu (Kitakyushu-shi), Kitakyushu Hibiki(Kitakyushu-shi), Fukuoka (Koga-shi, Fukuoka Pref.)(b) Japan Waste Corporation
Main office
1-7-12 Marunouchi, Chiyoda-ku, Tokyo
Head office
1-7-12 Marunouchi, Chiyoda-ku, Tokyo
Business office
Yokohama (Yokohama-shi)
PlantsOgimachi Center (Kawasaki-shi)(c) Asahi Americas Holdings, Inc.
Main office
1-7-12 Marunouchi, Chiyoda-ku, Tokyo
Head office
1-7-12 Marunouchi, Chiyoda-ku, Tokyo

11
Major sales offices and plants

Overseas

Asahi G&S Sdn. Bhd. (Malaysia), Shanghai Asahi Pretec Co., Ltd.
(China), Asahi Pretec Korea Co., Ltd. (Chungju), Asahi Pretec
Taiwan Co., Ltd. (Taiwan), Asahi Shih Her Technologies Co., Ltd.
(Taiwan), Asahi Refining USA Inc. (USA) and Asahi Refining
Canada Ltd. (Canada)(7) Employees (as of March 31, 2017)
1) Employees of the Group
Number of employees
1,961 (761)

Change from the end of previous fiscal year
–44 (down 91)

Note: The number of employees refers to the number of workers (excluding the staff seconded
from the Group to companies outside the Group but including staff seconded fromcompanies outside the Group to the Group) and for the number of part-timers and fixedterm employees, annual average number of persons are shown separately in brackets.

Convocation NoticeBusiness Report

1. Nihon Chemitech Co., Ltd., was renamed JW Chemitech Co., Ltd., as of April 1, 2017.
2. Kyodo Chemical Co., Ltd., was absorbed into Asahi Pretec Corp. as of April 1, 2017.

Consolidated
Financial Statements(Notes)Nihon Chemitech Co., Ltd. (Kawaguchi-shi, Saitama Pref.), JW
Logistics, Co., Ltd. (Yokohama-shi), Taiyo Chemical Co., Ltd.
(Kagoshima-shi), Iyotec Co., Ltd. (Akashi-shi, Hyogo Pref.), Fuji
Rozai Co., Ltd. (Ota-ku, Tokyo), JW Glass Recycling Co., Ltd.
(Koto-ku, Tokyo), Ecomax Incorporated (Koza-gun, Kanagawa
Pref.), Kyodo Chemical Co., Ltd. (Kitahiroshima-shi, Hokkaido),
INTER CENTRAL, INC. (Takizawa-shi, Iwate Pref.), KOEIKOGYO
CO., LTD. (Yokohama-shi), FUJI MEDICAL INSTRUMENTS
MFG. CO., LTD. (Osaka-shi), and other

Financial Statements

3) Other subsidiaries
Japan

Change from the endof previous fiscal year

Average age

56 (1)+2 (0)

41 years and
11 months

Average length ofserviceThree years andfour months(Note) The number of employees refers to the number of workers (excluding the staff seconded
from the Company to companies outside the Company but including staff seconded
from companies outside the Company to the Company) and for the number of parttimers and fixed-term employees, annual average number of persons are shown
separately in brackets.

12
Major sales offices and plants and Employees

Reference Documents for
General Meeting of Shareholders

Number of employees

Audit Reports

2) Employees of the Company

(8) Major financial institutions with loans to the Company (as of March 31, 2017)
Financial institutions
Loan amount
Syndicated loan
20,304 million yen
Resona Bank, Limited
2,350 million yen
The Minato Bank, Ltd.
1,100 million yen
Mizuho Bank, Ltd.
100 million yen
The Chugoku Bank, Ltd.
100 million yen
Note: The syndicated loan is extended by two banks with The Bank of Tokyo-Mitsubishi UFJ,
Ltd. as the lead bank.
(9) Other important matters relating to the current state of the GroupNot applicable

13
Major financial institutions with loans to the Company and Other important matters relating to thecurrent state of the GroupNumber ofshares held(Thousands ofshares)Percentage ofshares held(%)

Japan Trustee Services Bank, Ltd. (Trust account)

2,195

6.69

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

1,406

4.29

TERA ENTERPRISES Co., Ltd.

1,150

3.50

Mitsuharu Terayama

882

2.69

Masamichi Terayama

802

2.44

Asahi Employee Stock Ownership Plan

714

2.18

K&M Co., Ltd.

700

2.13

CBNY-GOVERNMENT OF NORWAY

647

1.97

Japan Trustee Services Bank, Ltd. (Trust account 5)

579

1.76

567

1.73

Shareholders

STATE STREET BANK AND TRUSTCOMPANY 505025

Audit Reports(Notes) 1. The Company holds treasury stock of 3,432,987 shares, which is excluded from theabove major shareholders. The treasury stock (3,432,987 shares) does not include
the Company’s shares held by the Employee Stock Ownership Plan (ESOP) trust
account (145,200 shares) and the Company’s shares held by the Board Incentive
Plan (BIP) trust account (76,800 shares).
2. Percentage of shares held is calculated by excluding treasury stock.

Consolidated
Financial Statements

129,000,000 shares
1) Number of shares authorized:
36,254,344 shares
2) Number of shares issued:
9,0623) Number of shareholders:
4) Major shareholders (top 10 shareholders)

Financial Statements(1) Shares (as of March 31, 2017)

Business Report

Convocation Notice

2. Current state of the Company(2) Stock options, etc.

Reference Documents for
General Meeting of Shareholders

Not applicable

14
Shares and Stock options, etc.

(3) Board members and corporate officers
1) Directors (as of March 31, 2017)
Position

Name

Representative Director, President
and CEO

Mitsuharu Terayama

Director

Yoshikatsu Takeuchi

Director

Tomoya Higashiura

Director

Keitaro Shigemasa

Director

Kazuo Kawabata

Director/Audit and Supervisory
Committee Member
Director/Full-Time Audit andSupervisory Committee Member

Shoji Morii
Yukio Tanabe

Director/Audit and Supervisory
Committee Member

Kazuhiko Tokumine

Director/Audit and Supervisory
Committee Member

Hiroharu Okubo(Notes)Responsibility and importantconcurrent assignment
Chairman and Director
Asahi Pretec Corp.
Representative Director andPresident, Japan Waste Corporation
Representative Director andPresident, Asahi Pretec Corp.
Representative Director andPresident, Asahi Americas Holdings,
Inc.
Director, Asahi Americas Holdings,
Inc.

LawyerOutside Corporate Auditor, RICOHLEASING COMPANY, LTD.
Advisor, Senshu Ikeda Bank, Ltd.
President & Representative Director,
Shizen Soken Co., Ltd.
Outside Corporate Auditor,
Mitsuboshi Belting Ltd.

1. According to a resolution at the meeting of the 6th Annual General Meeting of
Shareholders held on June 16, 2015, the Company made a transition to a Board with
Audit and Supervisory Committee as of the same date.
2. Directors/Audit and Supervisory Committee Members Shoji Morii, Kazuhiko Tokumineand Hiroharu Okubo are Outside Directors.
3. Director/Full-Time Audit and Supervisory Committee Member Yukio Tanabe has
longtime experience of accounting of the Company and possesses extensive expertise infinance and accounting.
4. The Company has a full-time Audit and Supervisory Committee Member to enhance theeffectiveness of audits including information gathering and strengthen its auditing andsupervisory functions.
5. The Company designated Directors/Audit and Supervisory Committee Members Shoji
Morii, Kazuhiko Tokumine and Hiroharu Okubo as independent board members under
the provisions of the Tokyo Stock Exchange, and filed such status with the exchange.

15
Board members and corporate officers

Payment amount5(0)

90 million yen
(0)

4
(3)

30 million yen
(18)

9
(3)

120 million yen(18)(Notes) 1. The amount of compensation for Directors not serving as an Audit and Supervisory
Committee Member does not include the employee salaries of Directors who serve
concurrently as employees.
2. At the 6th Annual General Meeting of Shareholders held on June 16, 2015, it was
resolved that the limit of compensation for Directors not serving as Audit andSupervisory Committee Members be up to an annual 200 million yen (notincluding the portion of salary as employees) and that the limit of compensation for
Directors serving as Audit and Supervisory Committee Members be up to anannual 100 million yen.
3. The above amounts of compensation do not include the 7 million yen provision ofreserve for the performance-based stock compensation plan for Directors, which
was approved at the 6th Annual General Meeting of Shareholders held on June 16,

16
Board members and corporate officers

Reference Documents for
General Meeting of Shareholders

Directors not serving as an Audit andSupervisory Committee Member(Outside Director)
Directors serving as an Audit andSupervisory Committee Member(Outside Directors)
Total(Outside board members)

Number of persons
subject to payment

Audit Reports

4) Compensation, etc., for Directors
Total compensation, etc., for the fiscal year
Category

Convocation Notice
Financial Statements

3) Description of the limited liability contract
The Company and each Director (excluding any Director with executive authority over
operations, etc.) signed a contract that limits the liability for compensation for damage set
forth in Article 423, Paragraph 1 of the Companies Act under provisions set forth Article
427, Paragraph 1 of the same Act.
The limit amount of the liability for compensation for damage under such a contract isdetermined to be the minimum liability amount stipulated in Article 425, Paragraph 1 of
the Companies Act.

Business Report2) Directors and Corporate Auditors who resigned during the fiscal year
Not applicable

Consolidated
Financial Statements

6. As of April 1, 2017, the following changes have been made to the important concurrent
assignment above.
Director Keitaro Shigemasa resigned as Representative Director of Asahi
Americas Holdings, Inc.
Director Tomoya Higashiura assumed office as Representative Director of Asahi
Americas Holdings, Inc.
7. Director Keitaro Shigemasa resigned as Director of the Company as of April 30, 2017.

2015, and recorded for the fiscal year under review.
5) Matters related to outside board members(a) Important concurrent assignment at other corporations, etc., and relationship between the
Company and the other corporations, etc.
Director/Audit and Supervisory Committee Member Kazuhiko Tokumine serves as
the Outside Corporate Auditor of RICOH LEASING COMPANY, LTD. There are no
special relationships between the Company and the corporation where he has theconcurrent assignment.
Director/Audit and Supervisory Committee Member Hiroharu Okubo serves as theAdvisor to Senshu Ikeda Bank, Ltd., President & Representative Director of Shizen
Soken Co., Ltd., and Outside Corporate Auditor of Mitsuboshi Belting Ltd. There areno special relationships between the Company and the corporations where he has
concurrent assignments.
(b) Kinship with a person executing business or an officer not executing business of theCompany or specified related business operators of the Company
Not applicable(c) Main activities in the fiscal year
Category

Name

Director(Audit andSupervisory
Committee
Member)Shoji Morii

Director(Audit andSupervisory
Committee
Member)Kazuhiko
Tokumine

Director(Audit andSupervisory
Committee
Member)Hiroharu
Okubo

17
Board members and corporate officers

Activities
He attended all the meetings of the Board of Directors
and the Audit and Supervisory Committee held during the
fiscal year. He has expertise and experience related to
management, including finance, and has been submitting
advice / recommendations to ensure the validity andappropriateness of making decisions on deliberations ofagenda and other matters.
He attended all the meetings of the Board of Directors
and the Audit and Supervisory Committee held during the
fiscal year. He has been submitting advice /recommendations to ensure the validity andappropriateness of making decisions on deliberations ofagenda and other matters from the highly professional
viewpoint for laws as a lawyer.
He attended all the meetings of the Board of Directors
and the Audit and Supervisory Committee. He has
considerable expertise and experience concerning thefinancial industry and has been submitting advice /recommendations to ensure the validity andappropriateness of making decisions on deliberations ofagenda and other matters.

1. In the agreement between the Company and the Accounting Auditor, the amount ofcompensation, etc., for audit under the Companies Act and the amount ofcompensation, etc., for audit under the Financial Instruments and Exchange Act are
not separated and may not be separated actually. Therefore, the total of thoseamounts is stated for the amount in (a) above.
2. The Audit and Supervisory Committee provided its consent to the amount ofcompensation, etc., for the Accounting Auditor based on its verification asnecessary of its auditing plan, the status of its execution of duties of accounting
audits and the appropriateness of the basis for calculating its estimates.

3) Policy for determining the dismissal or the refusal of reappointment of the Accounting
Auditor
When it is found that the Accounting Auditor falls under the items set forth in any of itemsof Article 340, Paragraph 1 of the Companies Act, the Audit and Supervisory Committee
will dismiss the Accounting Auditor in accordance with the consent of all Audit andSupervisory Committee Members. In this case, the Audit and Supervisory Committee
Member appointed by the Audit and Supervisory Committee will report the fact of thedismissal of the Accounting Auditor and reasons for the dismissal at the General Meeting of
Shareholders convened for the first time after the dismissal.
When it is deemed necessary to change the Accounting Auditor in consideration of thestatus of the execution of its duties, the Company’s auditing system and other factors, theAudit and Supervisory Committee will determine the content of a proposal concerning thedismissal or the refusal of reappointment of the Accounting Auditor to be submitted to a
General Meeting of Shareholders.
4) Issuance in the past two years of an order for the Accounting Auditor to suspend
operations
Description of the disciplinary action announced by the Financial Services Agency as ofDecember 22, 2015:(a) Entity subject to the disciplinary action
Ernst & Young ShinNihon LLC(b) Content of the action
Partial suspension of operations for three months (suspension of any operations
concerning the conclusion of new contracts from January 1, 2016 to March 31,
2016)

18
Accounting Auditor

Convocation NoticeBusiness Report

55,000 thousand yen

Consolidated
Financial Statements(Notes)Amount of compensation, etc.
31,800 thousand yen

Financial Statements(a) Amount to be paid by the Company(b) Total amount of money to be paid by the Company
and the Company’s subsidiaries and other benefits
on property

Audit Reports

1) Name of Accounting Auditor
Ernst & Young ShinNihon LLC
2) Amount of compensation, etc., for the Accounting Auditor

Reference Documents for
General Meeting of Shareholders(4) Accounting Auditor

Business improvement order (improvement of the business management systems)(c) Reasons for the action
In auditing the financial documents for other corporations, Ernst & Young
ShinNihon LLC, in negligence of due care, attested documents containing
material misstatements as if they contained no material misstatements.
Ernst& Young ShinNihon LLC’s management of operations was deemed asconsiderably unjust.

19
Accounting Auditor

20
Structure to ensure the appropriateness of businessConvocation NoticeBusiness Report
Consolidated
Financial Statements
Financial Statements
Audit Reports

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 appropriateness ofthe businesses of our company are as follows:
1) Framework to ensure that the performance of duties by the directors, corporate
officers and employees of our 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 our 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 our 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

Reference Documents for
General Meeting of Shareholders(5) 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 ourcompany 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 the procedures for performance so as to ensure the efficient performance of duties.
Each provision will be reviewed from time to time when needed.
5) Framework to secure the appropriateness of business of the corporate groupconsisting of our 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 our 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 our 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 our company.
6) Framework to appoint an employee who assists the duties of the Audit andSupervisory Committee of our 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.
7) Framework where the directors (except those who are Audit and Supervisory
Committee Members) and employees of our company and the directors, corporate
officers, employees and auditors of our subsidiaries or parties who receives a report

21
Structure to ensure the appropriateness of business

22
Structure to ensure the appropriateness of businessConvocation NoticeBusiness Report
Consolidated
Financial Statements
Financial Statements
Audit Reports
Reference Documents for
General Meeting of Shareholders

from aforementioned persons report to the Audit and Supervisory Committee of ourcompany, 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 our 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 our company, in addition to the matterswhich conflict with the laws and articles of incorporation and the matters which may
remarkably damage our 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 our company is treated disadvantageously by reason of the report
We will not treat any officer or employee of our 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 ourcompany (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 ourcompany 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.

(6) 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,

23
Status of operation of structure to ensure the appropriateness of businessConvocation Notice
Reference Documents for
General Meeting of Shareholders

Audit Reports(Note) The amount and the number of shares stated in this report are rounded down to the nearest unit.
The percentage is rounded to the nearest unit.

Business Report

The Articles of Incorporation stipulates that the Company may carry out the distribution, etc.,
of surplus pursuant to the resolutions of the Board of Directors, instead of the resolutions of
the General Meeting of Shareholders. In addition, we believe that it is also important to seek
to improve our corporate value through ongoing stable profitability and further growth, andto enhance retained earnings to prepare for investments in growth fields and the developmentof new businesses, with a basic policy to respond to expectations of shareholders throughstable dividends.
Under this policy, regarding the distribution, etc., of surplus, we will further strengthen
consolidated and nonconsolidated results for each fiscal year and our financial structure, withgiving comprehensive consideration to the future management strategy, etc., of our group.
After then, we will return earnings to shareholders.

Consolidated
Financial Statements(7) Policy to determine the distribution, etc., of surplus

Financial Statements

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.

24
Status of operation of structure to ensure the appropriateness of business and Policy to determine the
distribution, etc., of surplus

Consolidated Financial Statements
Consolidated Statement of Financial Position (as of March 31, 2017)(Millions of yen)Account

AmountASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax receivables
Other financial assets
Other current assets

46,056
10,79815,557
17,356
1,574
103
664

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

42,92031,987
8,238
918
1,167
64
528
15

Total assets

88,97625
Consolidated Statement of Financial Position

Account
LIABILITIESCurrent liabilities
Trade and other payables
Loans payable
Income tax payable
Other financial liabilities
Provisions
Other current liabilities
Non-current liabilities
Loans payable
Deferred tax liabilities
Net defined benefit liability
Other financial liabilities
Other non-current liabilities
Total liabilities
EQUITY
Equity attributable toowners of parent
Capital stock
Capital surplus
Treasury stock
Retained earnings
Other components of equity
Non-controlling interests
Total equity
Total liabilities and equity

Amount20,787
12,710
2,720
1,061
191
1,490
2,613
23,361
20,195
1,790
143
1,221
10
44,14844,303
4,480
6,126(5,371)42,783(3,716)524
44,827
88,976

106,828(82,520)
24,307(15,215)729(7,784)17(304)(22,269)
2,038
(286)
1,751
(2,837)(1,086)(1,213)127

Reference Documents for
General Meeting of Shareholders

Audit Reports

Financial Statements

Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other operating income
Other operating expenses
Operating income
Finance income
Finance cost
Profit before tax
Income tax expenses
Loss
Profit (loss) attributable to:
Owners of parent
Non-controlling interests

AmountBusiness Report

Account

Consolidated
Financial Statements(Millions of yen)

Convocation Notice

Consolidated Statement of Income (April 1, 2016, to March 31, 2017)26
Consolidated Statement of Income

Consolidated Statement of Changes in Equity (April 1, 2016, to March 31, 2017)(Millions of yen)
Equity attributable to owners of parent
Other components of equity
Translation
CapitalTreasury
Retained
adjustments
Cash flow
surplusstockearnings
of foreign
hedgesoperations

Capitalstock
Balance at April 1,
2016
Profit (loss)
Other comprehensive
incomeTotal comprehensive
incomePurchase of treasury
stock
Dividends
Reclassified fromother components ofequity to retained
earnings
Share-based paymenttransactions
Total transactions
with owners
Balance at March 31,
2017

4,480

6,112

(5,371)45,845(380)(1,492)275(1,492)275(1,213)－－－(1,213)(0)(1,955)
107
13
－

13

(0)

(1,848)

－

－

4,480

6,126

(5,371)42,783(3,618)(104)

Equity attributable to owners of parent
Other components of equity
FinancialassetsRemeasuremeasured at
Total
ments of
Total
fair value
definedthrough otherbenefit planscomprehensi
ve incomeBalance at April 1,
2016
Profit (loss)
Other comprehensive
incomeTotal comprehensive
incomePurchase of treasury
stock
Dividends
Reclassified fromother components ofequity to retained
earnings
Share-based paymenttransactions
Total transactions
with owners
Balance at March 31,
2017(2,125)29－

Noncontrollinginterests

Total(2,476)

48,591396

48,988－(1,213)127(1,086)(2)

87(1,131)(1,131)0(1,130)(2)

87(1,131)(2,345)128(2,217)

－

(0)

(0)

－

(1,955)(1,955)

(107)

－

－

13

13

(19)

(87)

(19)

(87)

(107)

(1,943)－(1,943)7－(3,716)44,303524

44,82727
Consolidated Statement of Changes in Equity

Major consolidated subsidiaries

3. Equity method affiliate
Equity method affiliates

Asahi Pretec Corp.
Japan Waste Corporation
Nihon Chemitech Co., Ltd.
JW Logistics, Co., Ltd.
Taiyo Chemical Co., Ltd.
Iyotec Co., Ltd.
Fuji Rozai Co., Ltd.
JW Glass Recycling Co., Ltd.
ECOMAX INCORPORATED
Kyodo Chemical Co., Ltd.
INTER 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 Shih Her Technologies 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.

28
Notes to consolidated financial statements

Convocation NoticeBusiness Report
Consolidated
Financial Statements

23

Financial Statements

2. Scope of consolidation
Number of consolidated subsidiaries

Audit Reports

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, beginning with the fiscal year under review. Certain disclosuresrequired by IFRS have been omitted from these consolidated financial statements under theprovision set forth in the second sentence of said Paragraph.
The Company and its subsidiaries (hereinafter the “Group”) adopted IFRS for the first timeeffective from the fiscal year under review, and the date of transition to IFRS is April 1, 2015.

Reference Documents for
General Meeting of Shareholders

Notes to consolidated financial statements(Basis of preparing 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

29
Notes to consolidated financial statements

30
Notes to consolidated financial statements

Convocation NoticeBusiness Report
Consolidated
Financial Statements
Financial Statements
Audit Reports(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.
2) Intangible assets other than leased: Intangible assets, except those for which theassetsuseful life is not determined, are amortized

Reference Documents for
General Meeting of Shareholders

has increased significantly since initial recognition, a loss allowance is recognized based on
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.

3) Leased assets

using 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
The effective portion of gains or losses on hedging instruments is recognized as othercomprehensive income, while the ineffective portion is recognized immediately in profit or31
Notes to consolidated financial statements

32
Notes to consolidated financial statements

Convocation NoticeBusiness Report
Consolidated
Financial Statements
Financial Statements
Audit Reports
Reference Documents for
General Meeting of Shareholders

loss 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
operation, the exchange differences relating to that
foreign operation are recognized in profit or loss during

4) Treatment of goodwill5) Employee benefits

6) Presentation of amounts

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.

33
Notes to consolidated financial statements

Convocation NoticeBusiness Report

17 million yen
20 million yen

3. Accumulated depreciation of property, plant and equipment
30,220 million yen

Reference Documents for
General Meeting of Shareholders(Notes to the consolidated statement of income)Impairment loss
In the precious metal business segment, revenue of the Asahi Refining, a consolidated subsidiaryof the Group, deteriorated due to changes in the business environment, and as a result of a careful
review of the future recoverability of goodwill generated on the acquisition thereof, an
impairment loss of 7,512 million yen was recorded. The recoverable amount for said business is
6,768 million yen. The recoverable amount was determined as value in use, which were
calculated by discounting estimated cash flows based on the business plan for the coming five
years approved by the management to the present value using the pretax discount rate of 11.5%,
which is based on the weighted average cost of capital of competitors of said cash-generating unit.
Cash flows beyond the period of said business plan were estimated mainly based on the longterm average growth rate of the market where the cash-generating unit operates.
The impairment loss is included in other operating expenses in the consolidated statement ofincome.

Consolidated
Financial Statements

2. Allowance for doubtful accounts directly deducted from assets
Trade and other receivables
Financial assets (non-current)

50 million yen
50 million yen

Financial Statements(2) Obligations related to collateral
Loans payable (current)
Total

69 million yen
158 million yen
228 million yen

Audit Reports(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

34
Notes to consolidated financial statements

(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
36,25436,254
Total
36,25436,254
Treasury shares
Common stock
3,654
0
3,654
Total
3,654
0
3,654
(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 treasury shares include 145 thousand shares held by the ESOP trust and 76
thousand shares held by the BIP trust.
2. Dividends(1) Dividends paid
Class of
Total
Dividends
Effective
Record datesharesdividends
per sharedate
May 10, 2016
Common984
March 31,
May 30,30.00 yen
Board of Directors’ Meetingstock
million yen
2016
2016
October 28, 2016
Common984
September November
30.00 yen
Board of Directors’ Meetingstock
million yen
30, 2016
25, 2016(Notes) 1. Total dividends according to the resolution at the Board of Directors’ meeting on May
10, 2016 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 28, 2016 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 10, 2017
Board ofCommon984 Retained
March 31,
May 31,30.00 yen
Directors’
stockmillion yen earnings
2017
2017
Meeting
Note: 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.

35
Notes to consolidated financial statements

36
Notes to consolidated financial statements

Convocation NoticeBusiness Report
Consolidated
Financial Statements
Financial Statements
Audit Reports
Reference Documents for
General Meeting of Shareholders(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 payable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 31,2017 (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
10,798
10,798Trade and other receivables
15,557
15,557
Other
454
454
Financial assets measured at fair value
through other comprehensive income
Other financial assets
85
85
Financial assets designated as hedging
instruments
Derivative instruments
92
92
Financial liabilities
Financial liabilities measured at amortized
cost
Trade and other payables
12,71012,710Loans payable
22,915
22,959
Other
73
73
Financial liabilities designated as hedging
instruments
Derivative instruments
1,339
1,339

37
Notes to consolidated financial statements

(Notes to information per share)
Equity attributable to owners of parent per share
Basic loss per share

Convocation NoticeBusiness Report

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.

Consolidated
Financial Statements(*1)

1,359.02 yen(37.24) yen

Reference Documents for
General Meeting of Shareholders

Audit Reports

Financial Statements(Notes to significant subsequent events)
Not applicable38
Notes to consolidated financial statements

Financial Statements
Balance Sheet (as of March 31, 2017)(Millions of yen)Account
ASSETSLIABILITIESCurrent liabilities
Current assets
21,704
Short-term loans payable
Cash and deposits
1,658
Current portion of long-term
Deferred tax assets
12loans payable
Accounts payable-other
Short-term loans to affiliated35,761
Accrued expenses
companies
Provision for directors’
Income taxes receivable903
bonuses
Other
22
Other
Allowance for doubtful
Non-current liabilities(16,654)
accounts
Long-term loans payable
Provision for management
Non-current assets
33,616
board incentive plan trust
Property, plant and
6,044
Provision for stocks payment
equipment
Other
Buildings
2,668
Total liabilities
Tools, equipment andNET ASSETS
2
fixturesShareholders’ equity
Land
3,373
Capital stock
Capital surplus
Intangible assets
42
Capital reserve
Software42
Other capital surplus
Investments and other
Retained earnings
27,530assetsOther retained earnings
Shares of affiliatedRetained earnings
27,509companies
carried forward
Deferred tax assets
20
Treasury stock
Total Net Assets
Total Liabilities And Net
Total assets
55,321
Assets(Note) Amounts less than one million yen are omitted.
Account

39
Balance Sheet

AmountAmount
432
300
20
58
27
20
7
20,355
20,31414
19
620,78834,533
4,480
23,086
6,054
17,032
12,337
12,337
12,337(5,371)
34,53355,321

30

30
5,079

1

1

4
48
16,6541078(1)16,716(11,634)
76(11,711)

Business Report

264

Consolidated
Financial Statements

113
143
0
7

Reference Documents for
General Meeting of Shareholders

Audit Reports

Operating revenue
Operating expenses
Operating income
Non-operating income
Interest income
Guarantee commission received
Foreign exchange gains
Other
Non-operating expenses
Interest expenses
Ordinary income
Extraordinary gain
Gains on sale of non-current assets
Extraordinary loss
Loss on retirement of non-current assets
Impairment losses
Provision of allowance for doubtful accounts
Loss on valuation of shares of affiliated companies
Net loss before income taxes
Income taxes-current
Income taxes-deferred
Net loss(Note) Amounts less than one million yen are omitted.

Financial Statements

Account(Millions of yen)Amount
6,183
1,336
4,846

Convocation NoticeStatement of Income (April 1, 2016, to March 31, 2017)40
Statement of Income

Statement of Changes in Net Assets (April 1, 2016, to March 31, 2017)(Millions of yen)
Shareholders’ equity
Capital surplus
Retained earnings
Other retained
earnings
CapitalOther capitalreserve
surplusRetained earnings
carried forward

Capitalstock
Balance atApril 1, 2016
Changes during
the period
Dividends
from surplus
Net loss
Purchase oftreasury stock
Total changes
during theperiodBalance at
March 31, 2017

4,480

6,054

26,017(5,371)

Total
shareholders’equity48,214(1,969)(1,969)(11,711)(11,711)
(0)

(0)

－

－

－

(13,680)(0)(13,681)

4,480

6,054

17,032

12,337(5,371)

34,533

Total net
assetsBalance atApril 1, 2016
Changes during
the period
Dividends
from surplus
Net loss
Purchase oftreasury stock
Total changes
during theperiodBalance at
March 31, 2017

17,032

Treasurystock

48,214(1,969)(11,711)(0)(13,681)
34,533(Note) Amounts less than one million yen are omitted.

41
Statement of Changes in Net Assets

: 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 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.

42
Notes to non-consolidated financial statements

Convocation NoticeBusiness Report
Consolidated
Financial Statements

3. Accounting standards for provisions
Allowance for doubtful accounts

Financial Statements

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 our company can use such software (5years or less).

Audit Reports

1. Valuation standards and valuation methods for assets
Securities
Shares of subsidiaries: Cost mainly determined by the moving-averagemethod.

Reference Documents for
General Meeting of Shareholders

Notes to non-consolidated financial statements(Notes to significant accounting policies)

4. Other important items for preparing financial statements
1) 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
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.
2) Accounting method for consumption: Consumption taxes are accounted for using thetaxes
net method of reporting.

43
Notes to non-consolidated financial statements

Convocation Notice

1,638 million yen

6,183 million yen
88 million yen
256 million yen

Reference Documents for
General Meeting of Shareholders

Audit Reports(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
—
3,654
Total
3,654
0
—
3,654
(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 treasury shares include 145 thousand shares held by the ESOP trust and 76
thousand shares held by the BIP trust.

Consolidated
Financial Statements(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

Business Report

2. Monetary claims and monetary obligations related to affiliated companies
Short-term monetary claims
35,775 million yen
Short-term monetary obligations
18 million yen

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

44
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
6 million yen
Impairment losses
14 million yen
Business tax
2 million yen
Provision for directors’ bonuses
6 million yen
Allowance for doubtful accounts
5,099 million yen
Loss on valuation of shares of affiliated
3 million yen
companies
Other
4 million yen
Subtotal
5,136 million yen
Valuation allowance(5,102) million yen
Total deferred tax assets
33 million yen
Net deferred tax assets
33 million yen(Notes to transactions with related parties)(1) Subsidiaries and affiliated companies, etc.
Category

Subsidiary

Name ofcompanies

Asahi Pretec
Corp.

Voting rights(%)

Details oftransaction

Amount oftransaction(Millions ofyen)Collection ofloaned funds

37,096

Support of funds

Loan of funds(Note 1)35,761

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)35,761

113

–

–

848

–

–

4,800

–

–

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) Provision of allowance for doubtful accounts of 16,654 million yen is recognized for the
fiscal year under review to provide for claims with a higher probability of default.
(Notes to information per share)
Net assets per share
Net loss per share(Notes to significant subsequent events)
Not applicable45
Notes to non-consolidated financial statements

1,059.32 yen(359.25) yen

Independent Auditor’s Report
May 8, 201746
Transcript of accounting auditor’s audit report on consolidated financial statements

Consolidated
Financial Statements

Pursuant to Article 444, paragraph 4 of the Companies Act, we have audited the consolidated
financial statements, namely the consolidated statement of financial position, the consolidated
statement of income, and the consolidated statement of changes in equity, and the basis of preparing
consolidated financial statements and other notes of Asahi Holdings, Inc. for the consolidated fiscal
year from April 1, 2016, to March 31, 2017.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of consolidated financial
statements in conformity with the provision of the second sentence of Article 120, Paragraph 1 of theRules of Corporate Accounting, which allows partial omission of the disclosures required by thedesignated international accounting standards. This includes the improvement and application of theinternal control that management deemed necessary to prepare and fairly present consolidated
financial statements that are free from material misstatements caused by fraud or error.
Auditors’ Responsibility
Our responsibility is to express independent opinions on consolidated financial statements based on
our audit. We conducted our audit in accordance with auditing standards generally accepted in Japan.
Those standards require that we draw up a plan and perform the audit pursuant to the plan to obtainreasonable assurance about whether the consolidated financial statements are free from material
misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the consolidated financial statements. Audit procedures are selected and applied depending on
auditor judgment on the basis of the assessment of the risks of material misstatements of theconsolidated financial statements arising from fraud or error. The purpose of the audit of theconsolidated financial statements is not to express an opinion on the validity of internal control, but
in assessing the risks, the auditors consider internal control relevant to the preparation and fairpresentation of the consolidated financial statements in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the accounting policies adopted
by management, application methods therefor and estimates made by management, as well as
evaluating the overall financial statement presentation.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.

Financial Statements

Toshinari
TakenoAudit Reports

Mitsuo Cho

Reference Documents for
General Meeting of Shareholders

Ernst & Young ShinNihon LLC
Designated andCertified Public Accountant
Engagement Partner,
Designated andCertified Public Accountant
Engagement Partner,

Business Report

To the Board of Directors of
Asahi Holdings, Inc.

Convocation Notice

Audit Reports
Transcript of accounting auditor’s audit report on consolidated financial statements

Audit Opinion
In our opinion, the above consolidated financial statements prepared in conformity with theprovision of the second sentence of Article 120, Paragraph 1 of the Rules of Corporate Accounting,which allows partial omission of the disclosures required by the designated international accounting
standards, present fairly, in all material respects, the assets as well as income and losses in the period
pertaining to consolidated financial statements of the corporate group which consists of Asahi
Holdings, Inc. and its consolidated subsidiaries.
Interests
There are no interests between the Company and us or engagement partners, which should be statedin compliance with the Certified Public Accountants Act.

47
Transcript of accounting auditor’s audit report on consolidated financial statements

Toshinari
TakenoPursuant to Article 436, paragraph 2, item 1 of the Companies Act, we have audited the financial
statements, namely the balance sheet, the statement of income, and the statement of changes in net
assets of Asahi Holdings, Inc. for the 8th fiscal year from April 1, 2016 to March 31, 2017, including
notes to non-consolidated financial statements and supplementary schedules thereto.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of financial statements andsupplementary schedules thereto in conformity with corporate accounting principles generally
accepted in Japan. This includes the improvement and application of the internal control thatmanagement deemed necessary to prepare and fairly present financial statements and supplementaryschedules thereto that are free from material misstatements caused by fraud or error.
Auditors’ Responsibility
Our responsibility is to express independent opinions on financial statements and supplementaryschedules thereto based on our audit. We conducted our audit in accordance with auditing standards
generally accepted in Japan. Those standards require that we draw up a plan and perform the audit
pursuant to the plan to obtain reasonable assurance about whether the financial statements and the
supplementary schedules thereto are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial statements and the supplementary schedules thereto. Audit procedures are selected
and applied depending on auditors’ judgment on the basis of the assessment of the risks of material
misstatements of the financial statements and the supplementary schedules thereto arising from fraud
or error. The purpose of the audit of the financial statements and the supplementary schedules thereto
is not to express an opinion on the validity of internal control, but in assessing the risks, the auditors
consider internal control relevant to the preparation and fair presentation of the financial statements
and the supplementary schedules thereto in order to design audit procedures that are appropriate in
the circumstances. An audit also includes evaluating the accounting policies adopted by management,
application methods therefor and estimates made by management, as well as evaluating the overall
financial statement presentation.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Audit Opinion
In our opinion, the financial statements and the supplementary schedules thereto referred to theabove present fairly, in all material respects, the assets as well as income and losses in the period

48
Transcript of accounting auditor’s audit report

Business Report

Mitsuo Cho

Consolidated
Financial Statements

Ernst & Young ShinNihon LLC
Designated andCertified Public Accountant
Engagement Partner,
Designated andCertified Public Accountant
Engagement Partner,

Financial Statements

To the Board of Directors of
Asahi Holdings, Inc.

Audit Reports

May 8, 2017

Reference Documents for
General Meeting of Shareholders

Independent Auditor’s Report

Convocation NoticeTranscript of accounting auditor’s audit reportpertaining to such financial statements and the supplementary schedules thereto in conformity withcorporate accounting principles generally accepted in Japan.
Interests
There are no interests between the Company and us or engagement partners, which should be statedin compliance with the Certified Public Accountants Act.

49
Transcript of accounting auditor’s audit report2) Each Audit and Supervisory Committee Member monitored and verified whether theaccounting auditor maintained its independence and properly conducted its audit, received areport from the accounting auditor on the status of its performance of duties, and requested
explanations as necessary. Each Audit and Supervisory Committee Member was notified by
the accounting auditor that it had established a “system to ensure that the performance of
duties of the accounting auditor was properly conducted” (the matters listed in the items of
Article 131 of the Rules of Corporate Accounting) in accordance with the “Quality Control
Standards for Audits” (Business Accounting Council on October 28, 2005), and requested
explanations as necessary.
Based on the above-described methods, each Audit and Supervisory Committee Member
examined the business report and the supplementary schedules thereto, the financial statements(balance sheet, statements of income and statements of changes in net assets and notes to nonconsolidated financial statements) and the supplementary schedules thereto, as well as theconsolidated financial statements (consolidated balance sheet, consolidated statements of income
and consolidated statements of changes in net assets and notes to consolidated financial
statements) and the supplementary schedules thereto, for the fiscal year under review.

50
Transcript of Audit and Supervisory Committee’s audit report

Business Report
Consolidated
Financial Statements

1) In conformity with the Audit and Supervisory Committee Auditing Standards established by
the Audit and Supervisory Committee, in accordance with the audit policies and important
audit items, and in cooperation with the internal audit division and internal control division,
each Audit and Supervisory Committee Member attended important meetings, received
reports on the status of performance of duties from the directors and other employees andrequested explanations as necessary, examined important approval/decision documents, andinspected the status of the corporate affairs and assets of the Company. Regarding theCompany’s subsidiaries, the processes of determining the execution of business operations
were investigated by attending important meetings, receiving reports on businesses andrequesting explanations as necessary.

Financial Statements

1. Method and Content of Audit
The Audit and Supervisory Committee received reports periodically from directors and employees
about the details of Board of Directors’ resolutions concerning the matters set forth in Article 39913, Paragraph 1, Item 1 (b) and (c), of the Companies Act, as well as the establishment andapplication of the internal control systems based on such resolutions, and then requested
explanations as necessary, expressed opinions and conducted audits by the following methods.

Audit Reports

The Audit and Supervisory Committee audited the directors’ performance of their duties during the
8th fiscal year (from April 1, 2016 to March 31, 2017), and hereby reports the method and results of
the audit as follows.

Reference Documents for
General Meeting of Shareholders

Audit Report

Convocation NoticeTranscript of Audit and Supervisory Committee’s audit report2. Results of Audit(1) Results of audit of business report, etc.
(i) We acknowledge that the business report and the supplementary schedules thereto fairly
present the status of the company in conformity with the applicable laws and regulations
and the Articles of Incorporation of the company.
(ii) We acknowledge that no misconduct or material fact constituting a violation of any law or
regulation or the Articles of Incorporation of the company was found with respect to thedirectors’ performance of their duties.
(iii)We acknowledge that the Board of Directors’ resolutions with respect to the internal control
systems are appropriate. We did not find any matter to be mentioned with respect to thedirectors’ performance of their duties concerning the internal control systems.
(2) Results of audit of financial statements and supplementary schedules thereto
We acknowledge that the methods and results of audit performed by the Accounting Auditor,
Ernst & Young ShinNihon LLC, are appropriate.
(3) Results of audit of consolidated financial statements
We acknowledge that the methods and results of audit performed by the Accounting Auditor,
Ernst & Young ShinNihon LLC, are appropriate.
May 10, 2017
Audit and Supervisory Committee, Asahi Holdings, Inc.
Chairman:
Shoji Morii
Full-time Audit and Supervisory Committee Member: Yukio Tanabe
Audit and Supervisory Committee Member:
Kazuhiko Tokumine
Audit and Supervisory Committee Member:
Hiroharu Okubo(Note) Audit and Supervisory Committee Members Shoji Morii, Kazuhiko Tokumine and Hiroharu
Okubo are Outside Directors set forth in Article 2, Item 15 and Article 331, Paragraph 6 of
the Companies Act.

51
Transcript of Audit and Supervisory Committee’s audit reportCareer, Position and Duties at Asahi Holdings(Important concurrent assignment)

April 1964:
Joined KURARAY CO., LTD.
July 1973:
Joined Asahi Pretec Corp.
October 1973: Appointed as Senior Managing
Director of Asahi Pretec Corp.
May 1981:
Appointed as Representative
Director and President of Asahi
Pretec Corp.
April 2009:
Appointed as Representative
Director and President of Asahi
Mitsuharu Terayama
Holdings, Inc.
(March 10, 1940)
April 2011:
Appointed as CEO & COO of
To be Reelected
Asahi Holdings, Inc.
April 2011:
Appointed as Chairman and
Director of Asahi Pretec Corp. (topresent)
June 2012:
Appointed as CEO of Asahi
Holdings, Inc.
June 2014:
Appointed as President & CEO of
Asahi Holdings, Inc. (to present)[Significant concurrent duties]
Chairman and Director of Asahi Pretec Corp.

Ownershipof Shares

882,345
sharesAudit Reports

1

Name(Date of birth)

Reference Documents for
General Meeting of Shareholders

CandidateNo.

52
Reference Documents for General Meeting of Shareholders

Business Report

One (1) Director (excluding Directors serving as the Audit and Supervisory Committee
Members; the same applies hereinafter in this proposal) resigned as Director during his term ofoffice, and the terms of office of the other four (4) Directors will expire at the close of thisAnnual General Meeting of Shareholders.
Accordingly, we propose the election of five (5) Directors.
The Audit and Supervisory Committee has expressed no opinion on this proposal.
The candidates for Director to be elected are as follows.

Consolidated
Financial Statements

Election of Five (5) Directors (Excluding Directors Serving as the Audit andSupervisory Committee Members)

Financial Statements

Proposal 1

Convocation Notice

Reference Documents for General Meeting of Shareholders

Candidate
No.

Name
(Date of birth)

Career, Position and Duties at Asahi Holdings(Important concurrent assignment)

Ownershipof Shares(Reason for nomination as a candidate)
Mr. Terayama engages in the management of the entire Group as a Representative Director of theCompany and as a Representative Director/Director of the Group companies. The Company
therefore requests his election as a Director of the Company based on its judgment that his
continued tenure of office as a Director is appropriate because his past performance of having
driven the entire Group with strong leadership, as well as his deep insight and abundant experiencein overall management, would contribute to the further functional reinforcement of the Board of
Directors and the corporate governance of the entire Group.

53
Reference Documents for General Meeting of Shareholders

(Reason for nomination as a candidate)
Mr. Takeuchi engages in the management of the Group as a Director of the Company and as a
Representative Director/Director of the Group companies, having deep insight and abundant
experience in overall management. The Company therefore requests his election as a Director of theCompany based on its judgment that his continued tenure of office as a Director is appropriate
because his abundant job experience in the environmental preservation business and the life &health business would contribute to the sustainable enhancement of the corporate value of theGroup.

54
Reference Documents for General Meeting of Shareholders

Business Report
Consolidated
Financial Statements
Audit Reports

Financial Statements

8,050
sharesReference Documents for
General Meeting of Shareholders

2

Joined Hyogo Sogo Bank
Joined Asahi Pretec Corp.
Appointed as Director andGeneral Manager of General
Affairs Department of Asahi
Pretec Corp.
April 2004:
Appointed as Director andGeneral Manager ofEnvironmental Business Divisionand concurrently serving as
General Manager of Business
Coordination Division of Asahi
Yoshikatsu Takeuchi
Pretec Corp.
(January 1, 1956)
March 2006: Appointed as Director and
To be Reelected
General Manager ofEnvironmental Recycling
Business Division of Asahi Pretec
Corp.
May 2008:
Appointed as Representative
Director and President of Japan
Waste Corporation (to present)
April 2009:
Appointed as Director of Asahi
Holdings, Inc. (to present)[Significant concurrent duties]
Representative Director and President of Japan
Waste Corporation

Convocation Notice

April 1978:
April 1999:
June 2001:

3

April 1984:
Joined NEC Corporation
February 2001: Joined Asahi Pretec Corp.
June 2006:
Appointed as Director andGeneral Manager of
Administration Division of Asahi
Pretec Corp.
April 2009:
Appointed as Director andGeneral Manager of Corporate
Development & Administration
Division of Asahi Holdings, Inc.
June 2010:
Appointed as Director andGeneral Manager of Precious
Metal Recycling Business
Division of Asahi Pretec Corp.
Tomoya Higashiura
April 2011:
Appointed as Director of Asahi(January 26, 1961)
Holdings, Inc. (to present)
To be Reelected
January 2012: Appointed as Director of Asahi
Pretec Corp.
June 2014:
Appointed as Representative
Director & President of Asahi
Pretec Corp. (to present)
April 2017:
Appointed as Representative
Director and President of Asahi
Americas Holdings, Inc.
(to present)[Significant concurrent duties]
Representative Director & President of Asahi Pretec
Corp.
Representative Director and President of Asahi
Americas Holdings, Inc.

7,700
shares(Reason for nomination as a candidate)
Mr. Higashiura engages in the management of the Group as a Director of the Company and as a
Representative Director/Director of the Group companies, having deep insight and abundant
experience in overall management. The Company therefore requests his election as a Director of
the Company based on its judgment that his continued tenure of office as a Director is appropriate
because his abundant job experience in the precious metal business and the environmental
preservation business would contribute to the sustainable enhancement of the corporate value of
the Group.

55
Reference Documents for General Meeting of Shareholders

Business Report
Reference Documents for
General Meeting of Shareholders(Reason for nomination as a candidate)
Mr. Kawabata engages in the management of the Group as a Director of the Company and as a
Director of the Group companies, having deep insight and abundant experience in overallmanagement. The Company therefore requests his election as a Director of the Company based on
its judgment that his continued tenure of office as a Director is appropriate because his abundantjob experience in the overseas business and technical areas would contribute to the sustainableenhancement of the corporate value of the Group.

Financial Statements

Consolidated
Financial Statements

12,700sharesAudit Reports

4

Kazuo Kawabata(April 20, 1957)
To be Reelected

Joined NIPPON STEELCORPORATION
July 2006:
Joined NIPPON STEELENGINEERING CO., LTD.
July 2008:
Joined Asahi Pretec Corp.
October 2008: Appointed as Deputy Head ofTechnology Support &Production Management Divisionof Asahi Pretec Corp.
April 2012:
Appointed as General Manager ofTechno Center of Asahi Pretec
Corp.
April 2013:
Appointed as Director andGeneral Manager of Techno
Center of Asahi Pretec Corp.
June 2014:
Appointed as Director of Asahi
Holdings, Inc. (to present)
December 2014: Appointed as Director of Asahi
Americas Holdings, Inc.
(to present)[Significant concurrent duties]
Director of Asahi Americas Holdings, Inc.

Convocation Notice

April 1982:

56
Reference Documents for General Meeting of Shareholders

Candidate
No.

Name
(Date of birth)

Career, Position and Duties at Asahi Holdings(Important concurrent assignment)
April 1992:
March 2011:

5

Amane Kojima(April 9, 1968)
Newly Elected

Joined Nissho Iwai Corporation
Joined Asahi Pretec Corp.
Appointed as General Manager of
Accounting Division of Asahi
Pretec Corp.
April 2012:
Appointed as General Manager of
Accounting Division of Asahi
Holdings, Inc. (to present)
December 2014:Appointed as Corporate Auditorof Asahi Americas Holdings, Inc.
(to present)
June 2016:
Appointed as Corporate Auditorof Asahi Pretec Corp. (to present)[Significant concurrent duties]
Corporate Auditor of Asahi Pretec Corp.
Corporate Auditor of Asahi Americas Holdings, Inc.

Ownershipof Shares—(Reason for nomination as a candidate)
As General Manager of Accounting Division, Mr. Kojima is in charge of financial and accounting
matters for the entire Group. In addition, he is qualified as a certified public accountant in the US,
and has extensive expertise and practical capabilities. The Company therefore requests his election
as a Director of the Company based on its judgment that he will be able to contribute to thesustainable enhancement of the corporate value of the Group and is qualified for the position of
Director.
Note:

There are no special interests between each candidate and the Company.

57
Reference Documents for General Meeting of Shareholders

April 1972:
June 2001:

June 2003:

1

Shoji Morii(February 12, 1948)
To be Reelected

June 2006:

June 2009:
June 2010:
June 2015:

Joined Sumitomo Trust andBanking Co., Ltd.
Appointed as Corporate Officer
and General Manager of Kyoto
Branch of Sumitomo Trust andBanking Co., Ltd.
Appointed as Representative
Director and President of Kobe
Airport Terminal Co., Ltd.
Appointed as Representative
Director and President of Kaijo
Access Co., Ltd.
Appointed as Outside Director of
Asahi Pretec Corp.
Appointed as Outside Director of
Asahi Holdings, Inc.
Appointed as Outside Director(serving as Audit and Supervisory
Committee Member) of Asahi
Holdings, Inc. (to present)

Ownershipof Shares

Consolidated
Financial Statements

Career, Position and Duties at Asahi Holdings(Important concurrent assignment)

1,000
sharesAudit Reports

Name(Date of birth)

Reference Documents for
General Meeting of Shareholders

CandidateNo.

58
Reference Documents for General Meeting of Shareholders

Convocation Notice

The terms of office of all four (4) Directors serving as the Audit and Supervisory Committee
Members will expire at the close of this Annual General Meeting of Shareholders.
Accordingly, we propose the election of four (4) Directors serving as the Audit and Supervisory
Committee Members.
This proposal has already acquired the approval of the Audit and Supervisory Committee.
The candidates for Director serving as the Audit and Supervisory Committee Members to beelected are as follows.

Business ReportElection of Four (4) Directors Serving as the Audit and Supervisory Committee
Members

Financial Statements

Proposal 2

Candidate
No.

Name
(Date of birth)

Career, Position and Duties at Asahi Holdings(Important concurrent assignment)
April 1981:

2

Yukio Tanabe(December 27, 1958)
To be Reelected

Joined Victor Company of Japan,
LimitedJanuary 1988: Joined Sony Corporation
September 2004: Joined Asahi Pretec Corp.
June 2008:
Appointed as Deputy General
Manager of Corporate
Development Division of Asahi
Pretec Corp.
April 2009:
Appointed as Director andGeneral Manager of Management
Division of Asahi Pretec Corp.
April 2009:
Appointed as Director of Asahi
Holdings, Inc.
April 2010:
Appointed as Director andGeneral Manager of Corporate
Development & Administration
Division of Asahi Holdings, Inc.
June 2011:
Appointed as Full-Time
Corporate Auditor of Asahi
Holdings, Inc.
June 2015:
Appointed as Director (serving as
Full-Time Audit and Supervisory
Committee Member) of Asahi
Holdings, Inc.
(to present)

Ownershipof Shares

59
Reference Documents for General Meeting of Shareholders

1,000
sharesCareer, Position and Duties at Asahi Holdings(Important concurrent assignment)

Audit Reports

April 1989:—
Reference Documents for
General Meeting of Shareholders

4

Joined FUJI RESEARCHINSTITUTE CORPORATION
April 2000:
Registered as lawyer
April 2000:
Joined Kazama & Hata Law
Office (currently Hata & Co. Law
Offices) (to present)
June 2010:
Appointed as Compliance
Kyoko Kanazawa
Committee Member of National(October 11, 1965)
Consumer Affairs Center of Japan
Newly Elected(to present)
April 2014:
Appointed as personnel in chargeof pre-examination for Reexamination Committee of Japan
Legal Support Center(to present)[Significant concurrent duties]
Lawyer—Financial Statements

3

Business Report

April 1979:
July 2006:

Yuji Kimura(July 23, 1955)
Newly Elected

Joined the Environment Agency
Appointed as General Manager ofIndustrial Waste Management
Division, Waste Management andRecycling Department of the
Ministry of the Environment
August 2010: Appointed as Director-General of
Kyoto Mechanism Business
Promotion Department of New
Energy and Industrial Technology
Development Organization
July 2012:
Appointed as Director-General of
Hakodate Customs, Ministry of
Finance Japan
October 2014: Appointed as Executive Director
and General Manager of Tokyo
Office, Global Environment
Centre Foundation (to present)[Significant concurrent duties]
Executive Director and General Manager of Tokyo
Office, Global Environment Centre Foundation

Ownershipof Shares

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Reference Documents for General Meeting of Shareholders

Convocation Notice

Name(Date of birth)

Consolidated
Financial Statements

CandidateNo.

(Notes) 1. There are no special interests between each candidate and the Company.
2. Shoji Morii, Yuji Kimura and Kyoko Kanazawa are candidates for Outside Director.
3. Shoji Morii has professional expertise and experience in management including financeand financial affairs. We ask shareholders to elect him as an Outside Director for his
expected useful opinions. His term of office as Outside Director will be seven years at
the close of this Annual General Meeting of Shareholders. In addition, he once served as
Outside Director of Asahi Pretec Corp., a wholly owned subsidiary of the Company.
4. Yuji Kimura has professional expertise and experience in environmental preservation,
including waste treatment and recycling. We ask shareholders to elect him as an Outside
Director for his expected useful opinions. Although he has no experience of being
directly engaged in corporate management, we anticipate that he will be capable ofappropriately performing his duties as an Outside Director serving as Audit andSupervisory Committee Member for the aforementioned reason.
5. We ask shareholders to elect Kyoko Kanazawa as an Outside Director for her expected
useful opinions on the validity and appropriateness of making decisions on deliberationsof the agenda and other matters from her highly professional viewpoint as a lawyer.
Although she has no experience of being directly engaged in corporate management, we
anticipate that she will be capable of appropriately performing her duties as an Outside
Director serving as Audit and Supervisory Committee Member for the aforementioned
reason.
6. The Company has entered into a contract with each of Shoji Morii and Yukio Tanabethat limits their liability for compensation for damages set forth in Article 423,
Paragraph 1, of the Companies Act under provisions set forth in Article 427, Paragraph
1, of the same Act. The limit amount of the liability for compensation for damages
under such a contract is determined to be the minimum liability amount stipulated in
Article 425, Paragraph 1, of the Companies Act. If Shoji Morii and Yukio Tanabe arereelected, the Company intends to continue said contract with each of them. If Yuji
Kimura and Kyoko Kanazawa are newly elected, the Company intends to enter into thesame contract with each of them to limit their liability for compensation for damages.
7. The Company has notified the Tokyo Stock Exchange that Shoji Morii is an independent
board member as per the provisions of the Tokyo Stock Exchange, and he will continue
to be an independent board member if this proposal is approved and he assumes the
position of Outside Director. Yuji Kimura and Kyoko Kanazawa satisfy therequirements of an independent board member as per the provisions of the Tokyo Stock
Exchange. Accordingly, if this proposal is approved and they assume the position of
Outside Director, the Company intends to newly notify the Tokyo Stock Exchange thatthey are independent board members.

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