Consolidated Financial Results for the First Quarter Ended June 30, 2020
Asahi Holdings, Inc. [IFRS]July 29, 2020

Stock code:
Shares listed:

5857
Tokyo Stock Exchange (First Section)

URL:
Representative:

https://www.asahiholdings.com
Tomoya Higashiura, Representative Director, President & CEO

For further information please contact:

Kunihiko Chogo, General Manager, Corporate Planning &Communications Department

Filing date of Quarterly Report:(Phone) +81-3-6270-1833
August 11 2020

Start of dividend payment:
Supplementary materials for the financial results:–
Yes

Investor conference for the financial results:

No(Rounded down to the nearest million yen)
1. Results of the three months ended June 30, 2020 (From April 1, 2020 to June 30, 2020)(1) Results of operations (cumulative)(Percentage: Changes relative to corresponding previous period)
OperatingincomeRevenue
The three months ended
June 30, 2020
June 30, 2019

Millions of yen

39,20630,257%

Millions of yen

29.6 5,258－
3,359

Profit before
tax%

Millions of yen

56.5 5,311－
3,256% Millions of yen

63.1 3,632
－
2,035

%

Millions of yen

78.4 3,632(14.2) 2,035

Basic earnings per share

Diluted earnings per share

Yen
92.31
51.74

Yen
91.69
51.56

The three months ended
June 30, 2020
June 30, 2019

Profitattributable toowners of parent

Profit%Total
comprehensive
incomeMillions of yen

78.4 5,326(14.2) 3,076(Notes) 1. Since the Company transferred 60% of all shares in Fuji Medical Instruments MFG. Co., Ltd. in the fiscal
year ended March 31, 2020, this business was classified as discontinued operations with the amounts ofrevenue, operating income and profit before tax reclassified and presented as amounts for only thecontinuing operations excluding such business.
2. Due to the retrospective application of the changes in accounting policies, the figures shown for the threemonths ended June 30, 2019 are the figures after retrospective application(2) Financial Position

As ofJune 30, 2020
March 31, 2020

Total assets

Total equity

Equity attributable toowners of parent

Equity attributable toowners of parent ratio

Millions of yen
236,105
229,958

Millions of yen
71,79869,174

Millions of yen
71,79869,174

30.4
30.1

%

2. Dividend payments
Dividends per share

Year ended March 31, 2020
Year ending March 31, 2021
Year ending March 31, 2021
(Forecast)First quarter

Second quarter

Third quarter

Year-end

Annual

Yen

Yen

Yen

Yen

Yen

－

60.00

－

70.00

130.00

80.00

－

80.00

160.00－(Note) Revisions in dividend forecast in the current quarter: Yes
For details, please refer to “Notice on the Revision of Financial Forecast and Revision of Dividend Forecast(Dividend Increase)” made public on July 29, 2020.

%

73.1
57.9

3. Forecast (From April 1, 2020 to March 31, 2021)

OperatingincomeRevenue
Millions of yen

1st half(Percentage: Changes relative to corresponding previous period)% Millions of yen

Profit beforetax% Millions of yen

Profitattributable toowners of parent% Millions of yen%

Basic earnings
per shareYen

79,00029.5 10,800

55.7 10,700

58.6

7,300

62.0

185.52

Year ending March 31, 2021 165,000

21.7 21,000

16.6 20,800

17.8 14,000

42.2

355.79(Note) Revisions in forecast in the current quarter: Yes
For details, please refer to “Notice on the Revision of Financial Forecast and Revision of Dividend Forecast(Dividend Increase)” made public on July 29, 2020.
* Notes(1)

Changes in significant subsidiaries during the current fiscal year: No(2)

Changes in accounting policies and accounting estimates(i) Changes in accounting policies required by IFRS: No(ii) Changes other than (i) above: Yes(iii) Changes in accounting estimates: No
For details, please refer to page 13 “2. Condensed Consolidated Financial Statements (7) Notes on Condensed
Consolidated Financial Statements (3. Changes in accounting policies).”(3)

Number of issued shares (common stock)(i)

Number of issued shares at the quarter end (including treasury stock)
As of June 30, 2020

39,854,344 shares

As of March 31, 2020

39,854,344 shares(ii) Number of treasury stock at the quarter end
As of June 30, 2020

505,687 shares

As of March 31, 2020

505,637 shares(iii) Averaged number of shares during the period (quarterly cumulative period)
Three months ended June 30, 2020

39,348,665 shares

Three months ended June 30, 201939,348,857 shares* The quarterly financial statements are not subject to quarterly reviews by accounting auditors.
* Statement regarding the proper use of financial forecasts and other special remarks(Notes on forward looking statements, etc.)
These forecast performance figures are based on the information currently available to the company’s
management and certain assumptions judged rational. Accordingly, there might be cases in which actual resultsmaterially differ from forecasts of this report. Please refer to page 3 “1. Qualitative Information (3) Consolidated
Performance Forecasts” for the assumptions used and other notes.

【Appendix】

Table of contents of the appendix
1. Qualitative Information ................................................................................................................................

2(1) Consolidated Business Performance ........................................................................................................

2(2) Consolidated Financial Position and Cash Flows for the three months ended June 30, 2020 .............

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

3

2. Condensed Consolidated Financial Statements...........................................................................................

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

5(2) Condensed Consolidated Statements of Income for the three months ended June 30, 2020 ...............
(3) Condensed Consolidated Statements of Comprehensive Income for the three months ended June30, 2020 ....................................................................................................................................................
(4) Condensed Consolidated Statements of Changes in Equity ...................................................................

78(5) Condensed Consolidated Statements of Cash Flows ..............................................................................

911(6) Notes on Assumptions for Going Concern ...............................................................................................

12(7) Notes on Condensed Consolidated Financial Statements ......................................................................

12

1. Reporting entity ...................................................................................................................................

12

2. Basis of preparation ............................................................................................................................

12

3. Changes in accounting policies ...........................................................................................................

13

4. Significant accounting estimates and associated judgements ..........................................................

13

5. Segment information ...........................................................................................................................

14

6. Discontinued operations ......................................................................................................................

16

7. Subsequent events ...............................................................................................................................

16

－ 1 －

1. Qualitative Information(1) Consolidated Business Performance
The Japanese economy was in an extremely difficult situation during the current consolidated cumulative
first quarter as a result of the impact of the global spread of the novel coronavirus disease (COVID-19), andthe stagnation of socio-economic activity due to the request for businesses to close temporarily and the request
for people to refrain from going out, resulting from the declaration of a state of emergency. Furthermore, theoutlook continues to remain opaque, even after the lifting of the state of emergency, due to factors such as theconcern regarding a second wave of the spread of infection. Under these conditions, the group’s results in eachbusiness segment were as follows.
Precious Metals business
Revenue and operating income in precious metal recycling business in Japan and other countries increased
from the same period in the previous year thanks to ensuring the volume of precious metal collection and therise in precious metal prices. Also, revenue and operating income in precious metal refining business in North
America expanded from the same period a year before thanks to factors such as increases in productprocessing and sales as well as financial transactions, despite a decrease in the volume of materials received
due to factors such as disruptions in the public transportation network. As a result, revenue and operating
income in Precious Metals business increased from the same period in the previous year.
Environmental Preservation business
Because of the stagnation of industrial production due to refraining from corporate activities anddisturbances in the supply chain, as well as a decrease in the volume of industrial waste disposed, revenue
and operating income in Environmental Preservation business decreased from the same period in the previous
year.
As a result of the above, revenue during the first quarter of the current fiscal year was 39,206 million yen, a
year-on-year increase of 8,949 million yen (+29.6 percent). Operating income was 5,258 million yen, a year-onyear increase of 1,898 million yen (+56.5 percent). Profit before tax was 5,311 million yen, a year-on-yearincrease of 2,054 million yen (+63.1 percent). Profit was 3,632 million yen, a year-on-year increase of 1,596
million yen (+78.4 percent). Profit attributable to owners of parent for the period was therefore 3,632 million
yen, an increase of 1,596 million yen (+78.4 percent) year-on-year. By segment, revenue in the Precious Metals
business was 34,961 million yen, a year-on-year increase of 10,388 million yen (+42.3 percent). In theEnvironmental Preservation business, revenue was 4,245 million yen, a year-on-year decrease of 374 million
yen (-8.1 percent).

(2) Consolidated Financial Position and Cash Flows for the three months ended June 30, 2020
As of June 30, 2020, total assets amounted to 236,105 million yen, up 6,146 million yen from the previous
fiscal year end. This was due mainly to the decrease of 7,059 million yen in cash and cash equivalents, theincrease of 11,766 million yen in trade and other receivables and the increase of 1,755 million yen in
inventories.
Total liabilities amounted to 164,306 million yen, up 3,523 million yen from the previous fiscal year end.
This was due mainly to the increase of 11,901 million yen in trade and other payables, the decrease of 1,594
million yen in bonds and loans payable, the decrease of 2,958 million yen in income tax payable and thedecrease of 1,671 million yen in other financial liabilities.
Total equity amounted to 71,798 million yen, up 2,623 million yen from the previous fiscal year end. Thiswas due mainly to comprehensive income of 5,326 million yen and dividends of 2,754 million yen.
As a result, the equity attributable to owners of parent ratio changed to 30.4%, from 30.1% at the end of theprevious fiscal year.
Net cash used in operating activities amounted to 2,458 million yen due mainly to 5,311 million yen of profit
before tax, 608 million yen of depreciation and amortization, 1,762 million yen of increase in inventories,
8,821 million yen of increase in trade and other receivables and 6,280 million yen of income taxes paid.
Net cash used in investing activities amounted to 928 million yen due mainly to 1,031 million yen ofpurchase of property, plant and equipment.
Net cash used in financial activities amounted to 3,512 million yen due mainly to 2,743 million yen of cash
－ 2 －dividends paid.
As a result, cash and cash equivalents as of June 30, 2020 decreased 7,059 million yen from March 31, 2020,
to 15,849 million yen.

(3) Consolidated Performance Forecasts① Reasons for the revision of financial forecast
Consolidated earnings for the year ending March 31, 2021 are expected to largely exceed the level
planned at the beginning of the current fiscal year due to securing precious metal collection volumes andrising precious metal prices in the precious metal recycling business in Japan and other countries, as wellas increased product processing and sales and financial transactions in the North American metal refining
business. Therefore, we have revised both our consolidated financial forecast for the current second
quarter cumulative period and for the current fiscal year.
Furthermore, starting in the year ending March 31, 2021, we have changed the recording category ofinterest on loans payable associated with metal procurement in our financial service transactions, one ofour main earnings transactions in the North American precious metal refining business, from finance costto cost of sales. As a result, performance for the year ended March 31, 2020 shows figures after thechanges to our accounting policy. Due to these changes, operating income performance for the year ended
March 31, 2020 decreased by 2,108 million yen compared to that under the accounting policy prior to thechanges. The changes had no impact on profit before tax or on profit attributable to owners of parent.
1.

Revisions to the consolidated financial forecast for the current second quarter cumulative period(April 1, 2020 to September 30, 2020)

Revenue

Operatingincome(Millions of yen)
ProfitBasic earnings
Profit before tax attributable toper shareowners of parent
Yen SenPrevious Forecast (A)69,000

6,700

6,600

4,400

111

82

Revised forecast (B)79,00010,80010,700

7,300

185

52

Change (B-A)

10,000

4,100

4,100

2,900

－

Change (%)

14.5

61.2

62.1

65.9

－

60,985

6,937

6,744

4,506

(Ref.)
Results for the previous FY（Six months ended
September 30, 2019）

－ 3 －

114

53

2.

Revisions to the consolidated financial forecast for the year ending March 31, 2021
(April 1, 2020 to March 31, 2021)

Revenue

Operatingincome(Millions of yen)
ProfitBasic earnings
Profit before tax attributable toper shareowners of parent
Yen SenPrevious Forecast (A)150,000

16,00015,80010,600269

39

Revised forecast (B)165,000

21,00020,80014,000355

79Change (B-A)

15,000

5,000

5,000

3,400

－

Change (%)

10.0

31.3

31.6

32.1

－

135,563

18,01017,6509,846(Ref.)
Results for the previous FY(FY ended March 31, 2020)

250

24

② Reasons for the revision of dividend forecast
In our current revisions to the financial forecast for the fiscal year, revenue, operating income, profit
before tax, and profit attributable to owners of parent all recorded all-time highs. Based on this decision,
we have decided to increase our dividend at the end of the second quarter for the fiscal year ending March
31, 2021 and the end of FY dividend from the previous forecast of 70 yen each by 10 yen each, for a total
annual dividend of 160 yen.
Revision of dividend forecast for the year ending March 31, 2021
Annual Dividend
End of second quarterEnd of FY

Total

Previous forecast(Announced on April 30, 2020)

70 yen70 yen140 yen

Revised forecast

80 yen80 yen160 yen

60 yen70 yen

130 yenResults for the current FY
Results for the previous FY(FY ended March 31, 2020)

The above forecast was decided based on information currently available, and there may be changes due
to various factors such as the impact of the spread of novel coronavirus disease (COVID-19) on industrial
activities in Japan and overseas, financial trends and the change in the price of precious metals.

－ 4 －2. Condensed Consolidated Financial Statements(1) Condensed Consolidated Statements of Financial Position
As ofMarch 31,
2020

As of
June 30
2020

Millions ofyenMillions ofyen

ASSETS
Current assets
Cash and cash equivalents

22,90815,849Trade and other receivables
Inventories

119,754
37,748

131,52139,503

Income tax receivables
Other financial assets

2,029
93

2,090
88

Other current assets

5,069

4,905

Total current assets

187,604

193,958

34,95335,260Goodwill
Intangible assets

1,604
529

1,604
537

Investments accounted for using equity method
Deferred tax assets

3,254
1,132

3,247
919

155
683

1
534

Non-current assets
Property, plant and equipment

Net defined benefit asset
Financial assets
Other non-current assets

42

41

Total non-current assets

42,354

42,146229,958

236,105

Total assets－ 5 －As ofMarch 31,
2020

As of
June 30
2020

Millions ofyenMillions ofyen

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

13,710121,873

25,612120,274

Income tax payable
Other financial liabilities

4,624
6,991

1,665
5,408

Provisions
Other current liabilities

1,293
4,643

821
2,896

Total current liabilities
Non-current liabilities

153,137

156,678

Bonds and loans payable
Deferred tax liabilities

4,928
1,453

4,933
1,489

Net defined benefit liability
Other financial liabilities

172
1,066

172
978

Other non-current liabilities

24

54

Total non-current liabilities

7,645

7,628

160,783

164,306

7,790

7,790

Capital surplus
Treasury stock

10,755(956)

10,806(956)

Retained earnings
Other components of equity

60,797(9,212)

61,559(7,402)

Total equity attributable to owners of parent

69,174

71,798

Total equity

69,174

71,798229,958

236,105

Total liabilities
EquityCapital stock

Total liabilities and equity－ 6 －(2) Condensed Consolidated Statements of Income for the three months ended June 30, 2020
The three months
ended June 30, 2019

The three months
ended June 30, 2020

Millions of yen

Millions of yen

Continuing operations
Revenue

30,257

39,206

Cost of sales(25,214)(32,246)

Gross profit
Selling, general and administrative expenses

5,042(1,698)

6,959(1,662)Other operating income
Other operating expenses

20
(4)

15
(46)

Share of profit (loss) of investments accounted forusing equity method－(7)

Operating income
Finance income

3,359
5

5,258
71

Finance cost
Other non-operating income

(108)
－

(22)
3

Profit before tax

3,256

5,311

Income tax expenses(1,223)(1,678)

Profit from continuing operations

2,033

3,632

Discontinued operations
Profit from discontinued operations

2

－

2,035

3,632

Non-controlling interests

2,035
－

3,632
－

Profit

2,035

3,632

Basic earnings per share (Yen)Continuing operations

51.68

Discontinued operations

0.06

92.31
－

Total

51.74

92.31

Continuing operations
Discontinued operations

51.50
0.06

91.69
－

Total

51.56

91.69

ProfitProfit attributable to:
Owners of parent

Earnings per share

Diluted earnings per share (Yen)－ 7 －(3) Condensed Consolidated Statements of Comprehensive Income for the three months ended
June 30, 2020

Profit

The three months
ended June 30, 2019

The three months
ended June 30, 2020

Millions of yen

Millions of yen

2,035

3,632

(5)

1

Other comprehensive income
Items that will not be reclassified to profit or loss
Financial assets measured at fair value
through other comprehensive income
Remeasurements of defined benefit plans

(49)

(115)

Share of other comprehensive income ofinvestments accounted for using equity method－0

Total items that will not be reclassified to profit
or loss

(55)

(113)

1,099
(4)

1,673
134

1,095

1,808

1,040

1,694

3,076

5,326

Owners of parent
Non-controlling interests

3,076
－

5,326
－

Comprehensive income

3,076

5,326

Items that will be reclassified to profit or loss
Cash flow hedges
Translation adjustments of foreign operations
Total items that will be reclassified to profit orloss
Other comprehensive income, net of tax
Comprehensive income
Comprehensive income attributable to:－ 8 －(4) Condensed Consolidated Statements of Changes in Equity(Millions of yen)
Equity attributable to owners of parent
Other components ofequityCapitalTreasury
Retained
Translation
surplusstockearnings
adjustments
Cash flowof foreign
hedgesCapitalstock

operations

Balance at April 1, 2019
ProfitOther comprehensive
incomeTotal comprehensive
incomeDividends
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Total transactions withownersBalance at June 30, 2019

7,790
－

10,353－(955)－

55,547
2,035(3,737)－(1,203)
－

－

－

－

－

(4)

1,099

－

－

－

2,035

(4)

1,099

－

－

－

(2,360)

－

－

－

－

－

(49)

－

－

－

18

－

－

－

－

－

18

－

(2,410)

－

－

7,790

10,371(955)

55,172(3,741)(103)(Millions of yen)
Equity attributable to owners of parent
Other components of equity
Financial
Remeasureassets
measured atments offair value
definedthrough otherbenefitcomprehenplans
sive income

Balance at April 1, 2019
ProfitOther comprehensive
incomeTotal comprehensive
incomeDividends
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Total transactions withownersBalance at June 30, 2019

Total

Total

Total equity

8
－

－
－

(4,931)－67,804
2,035

67,804
2,035

(5)

(49)

1,040

1,040

1,040

(5)

(49)

1,040

3,076

3,076

－

－

－

(2,360)(2,360)

－

49

49

－

－

－

－

－

18

18

－

49

49

(2,342)(2,342)

3－(3,841)

68,537

68,537－ 9 －(Millions of yen)
Equity attributable to owners of parent
Other components ofequityCapitalTreasury
Retained
Translation
surplusstockearnings
adjustments
Cash flowof foreign
hedgesCapitalstock

operations

Balance at April 1, 2020
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Dividends
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Total transactions withownersBalance at June 30, 2020

7,790
－

10,755－(956)－

60,797
3,632(4,198)－(5,008)
－

－

－

－

－

134

1,673

－

－

－

3,632

134

1,673

－
－

－
－

(0)
－

－
(2,754)

－
－

－
－

－

－

－

(115)

－

－

－

51

－

－

－

－

－

51

(0)

(2,870)

－

－

7,790

10,806(956)

61,559(4,063)(3,334)(Millions of yen)
Equity attributable to owners of parent
Other components of equity
Financial
Remeasureassets
measured atments offair value
definedthrough otherbenefitcomprehenplans
sive income

Balance at April 1, 2020
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Dividends
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Total transactions withownersBalance at June 30, 2020

Total

Total

Total equity

(5)
－

－
－

(9,212)－

69,174
3,632

69,174
3,632

1

(115)

1,694

1,694

1,694

1

(115)

1,694

5,326

5,326

－
－

－
－

－
－

(0)
(2,754)(0)(2,754)

－

115

115

－

－

－

－

－

51

51

－

115

115

(2,703)(2,703)(4)－(7,402)

71,79871,798－ 10 －

(5) Condensed Consolidated Statements of Cash FlowsThe three months
ended June 30,
2019

The three months
ended June 30,
2020

Millions of yen

Millions of yen

3,256
10

5,311
－

Depreciation and amortization
Impairment loss

728
0

608
39

Finance income and finance cost
Other non-operating income and expenses

105
－

20
(3)

Share of loss (profit) of investments accounted for using equity
method－7

Decrease (increase) in inventories
Decrease (increase) in trade and other receivables(2,949)2,983(1,762)(8,821)

Increase (decrease) in trade, loans and other payables
Other, net(1,803)
3,083

8,406
16

SubtotalInterest and dividends income received

5,414
6

3,821
2

Interest expenses paid
Income taxes paid

(3)
(3,694)(10)(6,280)Net cash provided by (used in) operating activities
Profit before tax
Profit (loss) before tax from discontinued operations

Income taxes refund

3

7

1,724

(2,458)

Payments into time deposits
Proceeds from withdrawal of time deposits

(98)
－

(89)
89

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

(993)
2

(1,031)
3

Purchase of intangible assets
Proceeds from sales of shares of subsidiaries

(26)
－

(65)
20

Other, net

(9)

145

(1,124)

(928)

(2)
－

(658)

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

Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Purchase of treasury stock
Cash dividends paid

(2,336)

Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents(0)(2,743)

(151)

(111)

(2,489)(3,512)

(144)

(158)

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period(2,033)
16,297(7,059)22,908Cash and cash equivalents at end of period

14,263

15,849－ 11 －

(6) Notes on Assumptions for Going Concern
Not applicable(7) Notes on Condensed Consolidated Financial Statements
1. Reporting entity
Asahi Holdings, Inc. (hereinafter the “Company”) is a company located in Japan. The Company’s condensed
consolidated financial statements for the three months ended June 30, 2020 comprise the Company and its
subsidiaries (hereinafter the “Group”) as well as the interests in its affiliated companies.
For the main activities of the Group, please refer to Note 5. “Segment information.”

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

－ 12 －

3. Changes in accounting policies
The significant accounting policies adopted for the condensed consolidated financial statements are thesame as those for the consolidated financial statements for the fiscal year ended March 31, 2020, with the
exception of the change described below.
The income tax for the three months ended June 30, 2020 was calculated based on the estimated averageannual effective tax rate.
(Change in the classification for recording interest expenses corresponding to Advanced Trading for
precious metal products)
Each Asahi Refining company, consolidated subsidiaries of the Company, undertakes Advanced Tradingof precious metal products as an added value service incidental to the precious metal refining business.
Commission income obtained from customers in accordance with the forward period is recorded as revenue.
The interest expenses corresponding to such Advanced Trading of precious metal products werepreviously recorded as finance cost, but the method was changed from the first quarterly consolidated
accounting period ended June 30, 2020 to be recorded as cost of sales.
Furthermore, due to these changes, the “increase (decrease) in trade and other payables” has beenchanged to “increase (decrease) in trade, loans and other payables” in the Condensed Consolidated
Statements of Cash Flows. Furthermore, the change in loans payable procured for such Advanced Tradingis included in “increase (decrease) in trade, loans and other payables” in the Condensed Consolidated
Statements of Cash Flows.
This change is attributed to the change in the funds management system due to the aim to expand
Advanced Trading of precious metal products as a measure to increase income at each Asahi Refining
company and in consideration of the increase in the financial importance of interest expenses corresponding
to this income and the forecast for future increases.
Accordingly, compared to the previous method, cost of sales rose 205 million yen and operating income
fell 205 million yen, but there was no impact on profit before tax, profit, and profit attributable to ownersof parent.
The Condensed Consolidated Statements of Cash Flows during the three months ended June 30, 2020
show respective declines of 3,552 million yen in increase (decrease) in trade, loans and other payables, 3,510
million yen in net increase (decrease) in short-term loans payable, 205 million yen in finance income andfinance cost, and 247 million yen in interest expenses paid.
There is no impact on basic earnings per share and diluted earnings per share during the three months
ended June 30, 2020.
Such changes in accounting policies are applied retrospectively, and the Consolidated Financial
Statements restate the figures for the quarters in the previous fiscal year and for the previous fiscal year
following retrospective application.
As a result, compared to before the retrospective application, the Condensed Consolidated Statements ofIncome for the three months ended June 30, 2019, show an increase of 451 million yen in cost of sales anda decline of 451 million yen in operating income, but there is no impact on profit before tax, profit, andprofit attributable to owners of parent.
The Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2019 show
an increase of 880 million yen in increase (decrease) in trade, loans and other payables and respective
declines of 880 million yen in net increase (decrease) in short-term loans payable, 451 million yen in financeincome and finance cost and 451 million yen in interest expenses paid.
There is no impact on basic earnings per share and diluted earnings per share for the three months ended
June 30, 2019.

4. Significant accounting estimates and associated judgements
In preparing condensed consolidated financial statements, the management is required to make judgment,
estimates and assumptions that affect the adoption of accounting policies and the amounts of assets, liabilities,
revenues and expenses. Actual results may differ from such estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. The effect of a change inaccounting estimates is recognized as the accounting period in which such change occurs as well as the－ 13 －

accounting periods to be affected in the future.
The estimates and judgments made by the management that may have material impacts on the figures in
the condensed consolidated financial statements are the same as those for the consolidated financial
statements for the fiscal year ended March 31, 2020.

5. Segment information(1) Overview of reporting segments
The Group’s reporting segments are those Group constituent units for which separate financial
information is obtainable, and which the Board of Directors subjects to regular examination in order todecide the allocation of management resources and evaluate business results.
As a pure holding company, the Company is in charge of overall strategic function for the Group,
whereas operating companies of the Group engage in the precious and rare metals recycling business andthe refining and processing business, industrial waste management and other environmental
preservation business.
Therefore, the Group is composed of product and service segments based on business sectors. The tworeporting segments are the Precious Metals business and the Environmental Preservation business.
Meanwhile, these reporting segments are not aggregated.
The Precious Metals business engages mainly in recycling and selling of precious and rare metals suchas gold, silver, palladium, and platinum, as well as refining and processing of precious metals such as goldand silver. The main work of Environmental Preservation business is the collection, transport andintermediate processing of industrial waste, and the manufacture and sale of electric heaters.
The interest expenses corresponding to the Advanced Trading of precious metal products at each Asahi
Refining company, consolidated subsidiaries of the Company, were previously recorded as finance cost, but
the method was changed from the first quarterly consolidated accounting period ended June 30, 2020 to berecorded as cost of sales.
In addition, the segment information for the three months ended June 30, 2019 also reflects such change.
As a result, compared to the figures prior to such change, the operating income by business segment for
the Precious Metals business decreased by 451 million yen for the three months ended June 30, 2019, anddecreased by 205 million yen for the three months ended June 30, 2020.
In the previous consolidated fiscal year, the Company transferred 60% of all shares of Fuji Medical
Instruments MFG. Co., Ltd. (hereinafter “Fuji Medical Instruments”) to Johnson Health Tech Co., Ltd., acompany listed on the Taiwan Stock Exchange. Consequently, the Company classified the business of Fuji
Medical Instruments under discontinuing operations, and the amounts presented for segment
information for the three months ended June 30, 2019 are amounts from continuing operations fromwhich discontinuing operations have been excluded. Please refer to Note “6. Discontinued Operations” fordetails on discontinued operations.

－ 14 －

(2) Segment revenue and performance
Accounting policies of the reporting segments are the same as those of the Group stated in “Note 3.
Changes in accounting policies.”
Revenue and other performance of each reportable segment of the Group are as follows.
For the three months ended June 30, 2019 (from April 1, 2019 to June 30, 2019)(Millions of yen)
Reporting segment
Precious
Metals Business

Environmental
Preservation
Business

24,572

4,614

29,187

1,070

－

5

5

Total

24,572

4,620

Operating income
by business

2,987

859

Revenue
External
revenue
Intersegment
revenue

Adjustment

Consolidated

30,257－30,257

－

5

(5)

－

29,192

1,070

30,262(5)30,257

3,846

101

3,948

(588)

3,359

Total

Other

Subtotalsegment
Finance income
Finance costs

5
(108)

Profit before tax

3,256(Notes) 1. Intersegment transactions are based on prevailing market prices.
2. Adjustments of operating income by business segment are mainly corporate expenses that are notallocated to each reporting segment.

For the three months ended June 30, 2020 (from April 1, 2020 to June 30, 2020)(Millions of yen)
Reporting segment
Precious
Metals Business

Environmental
Preservation
Business

34,961

4,245

39,206

－

－

－

－

Total

34,961

4,245

Operating income
by business

5,287

685

Revenue
External
revenue
Intersegment
revenue

Total

Adjustment

Consolidated

39,206－

39,206－－－－

39,206－

39,206－

39,206

5,972

(7)

5,964

(706)

5,258

Other

Subtotalsegment
Finance income
Finance costs

71
(22)

Other nonoperating income

3

Profit before tax

5,311(Note)

Adjustments of operating income by business segment are mainly corporate expenses that are notallocated to each reporting segment.

－ 15 －

6. Discontinued operations(1) Outline of discontinued operations
The Company transferred 60% of all shares of Fuji Medical Instruments, which was a consolidated
subsidiary of the Company, to Johnson Health Tech Co., Ltd., a company listed on the Taiwan Stock
Exchange, in the previous consolidated fiscal year which was then excluded from the scope of consolidation.
Consequently, profit and loss as well as cash flows relating to Fuji Medical Instruments and its subsidiaries
were reclassified as discontinued operations with the discontinued operations concerned displayed in a
separate category.
(2) Discontinued operations performance(Millions of yen)
The three months ended
June 30, 2019

The three months ended
June 30, 2020

Revenue and expense of discontinued operations
Revenue
Expense

3,717(3,707)－－

Profit before tax from discontinued operations
Corporate income tax expense

10
(7)

－
－

Profit from discontinued operations

2－(3) Cash flow from discontinued operations(Millions of yen)
The three months ended

The three months ended

June 30, 2019

June 30, 2020

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

591－

Net cash provided by (used in) investing
activities(4)－

Net cash provided by (used in) financing
activities

(850)

－

(263)

－

Total

7. Subsequent events
Not applicable－ 16 －