Asahi Industries
Group Report
2017The Earth is moving.
As a hi Industr ies is cr eating t o m o r r o w , a g a i n t o d a y .

1What we are working towards.
The realization of a plentiful society that organicallyties the past to the present and the present to the
future through resource recycling.

Our role in that society is to be a driver sitting at
the center of that cycle, using our technical expertiseto seek out, utilize and restore resources so that
Earth· s wealth becomes the riches of tomorrow.

The steel and agriculture sectors that we work inare paving the way for a new future for society.
The Earth is moving, and a new tomorrow is coming.
We will continue to be a company that is always at
the forefront of creating new possibilities for resources.

2

INDEX

Man age ment Princ iple s
Being honest, fair, and respected by all, both now and for

TOP MESSAGE

4The Asahi Industries Story

6

Medium-term Management PlanɎ)LQDQFLDO5HVXOWVIRU)<7

CS R Guideline s

Medium-term Management Plan
(FY2016-2018)8

Focusing on appreciating and contributing to

Financial Results for FY201611

generations to comeContinuing to provide products and services of high quality

M anagement

and value while contributing to the global environment

Principles

the community

Environmental Guidelines

CSR

Environmental

Guidelines

Guidelines

Contributing to the environment by decreasing

Business Summary

13

Steel Business

15

Crushed Stone and Material Recycling
Business (Jobu Co., Ltd.)

19

Agribusiness21

environmental impacts, preventing global warming
The Environment, Governance &Social Responsibility

and achieving zero emissions

Corporate Icon

Environment

28

Governance

33

CSR Activities

36)LQDQFLDO'DWD&RUSRUDWH,QIRUPDWLRQ,QYHVWRUV,QIRUPDWLRQ

Wi th t he “ A” of Asahi I ndust r i es a t its c e n te r c o n n e c tin g c irc le s th a t
symbolize “Sun”, “Nature” and “Earth”, our corporate icon expresses ourmanagement vision of contributing to the global environment.

3

27

37

Financial Data

38

Corporate Information

41

Investors Information

42

T O P M E S S AG E
For over 80 years since it was founded, the Asahi Industries Group has built a proud record of “contributing to the global
environment and communities around the world”, honoring its commitment to being “a company that is respected by everyone”.
Our goal as a Group is to help create a sustainable society through our operations, from recycling steel scrap into solid steel
reinforcing for buildings, bridges and expressways through to producing safe, high-quality organic fertilizers* from livestock manure
and waste products such as poultry feathers, oil cake and the wastewater from food and beverage plants.
In the period from FY2010 to FY2013, Asahi Industries experienced unavoidable losses due to factors such as the severe business
downturn following the Great East Japan Earthquake, as well as the four-month shutdown of our steelmaking plant due to snow
damage in February 2014.
However, with the normalization of the market and thanks to the huge effort put in by all our employees, our results quickly
recovered to take us back into positive territory for three consecutive years as of FY2014. We owe a sincere debt of gratitude to all
the shareholders, customers, business partners and other stakeholders who kept the faith and supported us throughout suchexceptionally difficult times.
With a view to the stance the Asahi Industries Group needs to adopt for 2020, we formulated our medium-term business plan for
FY2016-2018 (the ASAHI 2018 Project) that points the way to a new path.

ASAHI 2018 Project

A mbition
Speciality
ActionH igh quality
I nnovation

With great ambition,
to be a leader in speciality areas,
we take immediate action.
Pursuing high quality,
we put steady effort into innovation.

July 2017

By the end of FY2016, we had already completed our management fundamentals enhancement strategy and our business strategy
for affiliated companies. In our core businesses of agriculture and steel, we will continue to further improve in areas where we
excel, such as our technology and development capacity, with the goal of becoming leaders in specialty fields, continuing to
expand and grow as a “specialty-based company” committed to a sustainable society.
We look forward to your continuing support.
*Organic fertilizer in this report refers to fertilizer containing 20% or more organic materials.
4

President
Masanori Murakami

To create a truly sustainable society

Steel Business
Structural steels

Steel BusinessDeformed bars (rebar)

Seed Business
Seeds

Fertilizer BusinessFertilizer for farmers

Hay Business
Hay

The efforts that the Asahi Industries Group is making tobuild a sustainable society are actually already part andparcel of everyone· s daily lives.

Our activities now cover a broad spectrum through our○○製紙工場

Steel Business, Crushed Stone and Material Recycling Businessand Agribusiness.

In the future, our work recycling valuable resources will
inevitably become even more wide-ranging.

Jobu Co., Ltd.
Crushed stone

5

Steel BusinessThreaded deformed bars

Fertilizer BusinessFertilizer for home gardens

Jobu Co., Ltd.
Wood chips

The Asahi Industries Story
1935

1936

1960

Asahi Chemical Fertilizer Co., Ltd. is established.
Predecessor of the fertilizer business (Amagasaki-shi, Hyogo Prefecture)

Asahi Chemical
Fertilizer Co., Ltd.
establishedJapan Nickel Co., Ltd.
established

1935

1936

Japan Nickel Co., Ltd. is established.
Predecessor of the steel business (Kodama-gun, Saitama Prefecture）

Joint venture

Asahi Chemical Fertilizer Co., Ltd. takes over the steel division of Japan Nickel
Co., Ltd. and the company name is changed to Seibu Chemical Industries Co., Ltd.
Gives rise to an integrated business model : “steel and fertilizer”.

Seibu Chemical
Industries Co., Ltd.

1960

Asahi Industries Co., Ltd.

1992

The current Asahi Industries Co., Ltd. is established.

1995

Johnson Asahi Pty. Ltd. is established as a joint venture. (Victoria, Australia)

2003

Asahi Industries leaves the Saison Group.

2005

The company is listed on the JASDAQ Securities Exchange.
(Currently JASDAQ on the Tokyo Stock Exchange, Inc.)2011

Laiyang Longda Asahi Agricultural Technology Co., Ltd. is established as a joint venture.
(Shandong Province, China)

1992

Leave the Saison Group2003

Listed on the JASDAQ Securities Exchange

2016

Medium-term Management Plan is announced.
"ASAHI 2018 Project"

2005

Announce Medium-term Management Plan
"ASAHI 2018 Project"

2016

6

0HGLXPWHUP0DQDJHPHQW3ODQɎ)LQDQFLDO5HVXOWVIRU)<7

0HGLXPWHUP0DQDJHPHQW3ODQ )<In April 2016, the Asahi Industries Group launched its “ASAHI 2018 Project” three-year medium-term business plan. This initiative is about facing the tumultuous changes of the modern era by keeping
innovation at the forefront and rolling out our policies promptly. In FY2016, we completed our management fundamentals enhancement strategy and our business strategy for affiliated companies.
Going forward, we will be fully deploying this business strategy in our core business areas of agriculture and steel, while at the same time developing new policies for the future beyond our
medium-term business plan. We are also aiming to further enhance our management platform so that the newly introduced structures and systems operate efficiently, thereby raising our corporate
value.

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Basic Policies

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DVVXSSRUWHUVRIDVXVWDLQDEOHVRFLHW\)<

)<$VDKL,QGXVWULHVLQIUDVWUXFWXUHGHYHORSPHQW
࢒Transition to a company with an audit andOur goal is to be a leader in “Speciality areas (areas of particularsupervisory committee

strength)”, committed to excellence and to further enhancing our࢒ Introduction of an executive officer systemtechnological and developmental capabilities.

Working toward࢒ Introduction of a new human resources system
࢒Transfer of administrative operations to Asahi

Improved operations in ourmanagement platform and its
deployment in affiliatedcompanies

Business Support Co., Ltd (ABS)Key Strategies%XVLQHVVVWUDWHJ\IRUDIILOLDWHGFRPSDQLHVBusiness strategy

࢒Securing of new Jobu Co., Ltd mining sites
࢒Founding of ABS●Focus resources on manufacturing and selling products backed by technical and developmental

࢒Withdrawal from the Environmental Solutions

expertise and enhance our “speciality areas (areas where we are strong)”

Business●Strive for real cost reductions through measures such as lowering speciﬁc power consumption

and improving productivity

Financial strategy

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Promotion of long-term procurement at fixed interest rates with a view to hedging risk from rising interest rates●Reform our corporate governance regime through measures such as reorganizing, transitioning

Management Indicesto a company with an audit and supervisory committee, and reviewing our committee structures)<UHVXOWV)<SURMHFWHG)<SURMHFWHG

5HOHDVHG0D\

)URP0HGLXPWHUPEXVLQHVVSODQ●Broaden our “human resources” base through measures such as introducing an executiveoﬃcer system and reforming our human resources systems

Financial strategy

Ordinary income rate (%)

3.4

4.6

5.7

ROE (%)

10.2

16.3

17.2

Net interest-bearing debt*

7,361

7,900

8,000

(Millions of yen)

●Reduce interest-bearing debt through stable proﬁts* Net interest-bearing debt = Interest-bearing debt - cash and equivalents

8

%XVLQHVV3RUWIROLR

Steel Business&UXVKHG6WRQHDQG0DWHULDO5HF\FOLQJ Key Business%XVLQHVV -REX&R/WG

Key Business

5HWDLQDQGKROGRXUSRVLWLRQLQWKHOHDGLQJJURXSIRU

Maintain its position as the top crushed stone

light bar production and sales volumes in the Kanto region

PDQXIDFWXUHULQ6DLWDPDSUHIHFWXUH

Shift to high-strength and/or large-diameter deformed bars andthreaded deformed bars

Expand market share by securing new mining sites

Reduce specific power consumption

Per-businesssales ratio

Improve productivity by reviewing our product portfolio

Segment net sales and income(Millions of yen)

Crushed Stone and
0DWHULDO5HF\FOLQJ
Business

Segment net sales and income)<
results)<
projected)<
projected

SteelBusiness)<
results)<
projected)<
projected

Net sales

2,095

2,200

2,200

Net sales

17,452

21,60020,000

Segment income

127

140

150

Segment income

1,318

1,800

1,800

(Millions of yen)

Agribusiness
Segment net sales and income*URZDVDIHUWLOL]HUPDQXIDFWXUHUWKDWVSHFLDOL]HVLQVHHGDQGKD\
Fertilizer Business
Key Business

Seed Business
Rise-to-the-Challenge Business

Agribusiness)<
results)<
projected)<
projected

Net sales

12,723

13,20014,600

740

900

1,100

Hay BusinessProfitable Business

Expand granular organic fertilizer production and sales

Develop our own products andPerform integrated management

Make production more efficient through integrated

increase domestic and overseas sales

with Johnson Asahi Pty. Ltd.

management of 3 plants

9(Millions of yen)Segment income

Business strategy

Steel Business

Agribusiness

Secure appropriate metal spread* and reduce costs
Fertilizers
6KLIWPDQDJHPHQWUHVRXUFHVinto specialty sectors

6KLIWPDQDJHPHQWUHVRXUFHVWRRUJDQLFIHUWLOL]HUV
5HYLVHRXUSURGXFWSRUWIROLR① Expand sales of our main product Ecolet② Expand sales in the Tohoku area
Implement sales strategy for Hokkaido and Kyushu
tied to our seed business

5HEDU③ Offer positive proposals to consolidate thenumber RIIHUWLOL]HUV

High
strengthLarge
diameter④ Enhance Chiba plant

StructuralsteelsThreaded
GHIRUPHG

・ Expand the high-strength product line
・ ,QYHVWLQFRORUPDUNLQJIDFLOLWLHVLQWKHWKUHDGHG
GHIRUPHGEDUVHFWRU

Seed

Hay

Expand the Asahi Industries
product range

Address the growthin global demand① Increase domestic and・ 5HVXPHVSHFLDOW\
steel production

overseas sales

Improve facilities at② Establish a safe andJohnson Asahi Pty.Ltd.

secure production system* Metal spread: The difference between the product price and the steel scrap price10)LQDQFLDO5HVXOWVIRU)<Consolidated results

3HUIRUPDQFHE\6HJPHQW,QDGLIILFXOWHQYLURQPHQWPDLQWDLQLQJRXUSURILWDELOLW\LQWKHIDFHRIIDOOLQJ
UHYHQXHVDQGSURILWV
Three consecutive years in positive territory■ Steel Business
Segment net sales <millions of yen>Segment income <millions of yen>

(Millions of yen)

25,000)<
Net Sales
Operating income)<

36,3481,915

20,00019,853

1,200

10,000

800

5,000

400

Net income

2,503 1

820

Total assets

25,82827,507

Net assets

7,716

8,404 2

Net interest-bearing debt
Dividend (yen)

7,283
40

࢒ Falling revenues resulting fromreduced shipments due tosoftening demand
the price difference between
products and metal scrap (metal
spread)0
FY2015FY2016FY2015FY2016■ &UXVKHG6WRQHDQG0DWHULDO5HF\FOLQJ%XVLQHVV
Segment net sales <millions of yen>

XS

2,500

3.4

2,010

36.4

5HDVRQVIRUFKDQJHV࢒ Lower profits due to decreases in

05.3

32% down
1,318

1,200

1,115

1,942

1,600

15,0001,931

ROE (%)

2,000

32,354

Ordinary income

Ordinary income rate (%)

12% down

10.2

Segment income <millions of yen>

150

2,095

2,000

120

1,500

90

1,000

60

500

30

XS

89

࢒ Increased revenues and profits

due to the acquisition of new
mining sites and a recovery indemand for ready-mixed
concrete

7,361
30

0

5HDVRQVIRUFKDQJHV

0FY2015FY2016FY2015FY2016■ Agribusiness

1 Particular factors in FY2015: Sale of owned securities (407 million yen) and adjustment ofcorporate tax, etc. (-527 million yen) due to changes in company partitioning in theaccounting benchmarks for tax effect accounting

Segment net sales <millions of yen>

15,0002 Ratio of equity to total assets: Increased from 29.9% to 30.6%

8% down
13,821

1,000

924

20% down

5HDVRQVIRUFKDQJHV

12,000

800

9,000

600

6,000

400

3,000

200

0


࢒Lower revenues and profits due

to falling prices, despite
increased sales of organic
fertilizer and fertilizer for homegardens0
FY2015

11

Segment income <millions of yen>

FY2016FY2015FY2016)LQDQFLDO+LJKOLJKWV &RQVROLGDWHG
Ordinary income rate (%)

Net sales

Millions of yen

50,00040,000Ordinary income

40,17543,59135,49436,348

5.3%

1,000

32 , 

2,503

10

2,000

5

1,000

0

0

△641

△1,00010,000ï

02016 FY2012

5DWLRRIVKDUHKROGHUV·
equity to total assets (%)

Net assets

Millions of yen

20,000

50

2013

10.2%
△102.5%2015

ï2016 FY

Cash and equivalents

Net interest-bearing debt

Millions of yen

12,500ï△11,0932013△12,000
2012

Operating cash flow

2015

ï
2016 FY

Investment cash flow

Free cash flow

2014

&DVKIORZ

Millions of yen

3,852

4,000

29.9％

39.9％
18.9％

21.6％
7,716

8,000
5,160

6,028

2,561

30

10

0
2013

2014

2015

2,640

0
2016 Year end

3,336

2,000

5,000

8,500

1

0

11,011



1,299

7,500

7,889

4,000

2,640


20

3,791
2,116

10,000

30.6％

0

9.8%

1,501

40

2012

2014

Net interest-bearing debt

16,482

16,00025△1,480△2,0002015△8.5%△1,000△1,235

2014

820

36.4%
549

1.0%

△3.1%

20,000

2013

50

1,115
3.4%

△1.5%

0

2012

Millions of yen

348

30,00012,000Net income

Millions of yen

1,931

2,000

ROE (%)△1,044

△293
7,283



2,500

△2,000△61△1,095△1,592△2,1150

△1,164△2,209△4,000
2012

2013

2014

12

2015

2016 Year end

2012

2013

2014

2015

2016 FY

Business Summary

13

Saitama Office- Saitama Plant (Steel)- Kanto Plant (Fertilizer)
Research Station(Seed, Fertilizer)

Laiyang Longda Asahi Agricultural
Technology Co., Ltd.

Jobu Co., Ltd. (Crushed stone
and material recycling)
Chiba Plant(Fertilizer)

Saitama Office

Head OfficeKansai Plant(Fertilizer)
Osaka Office

Jobu Co., Ltd.

Laiyang Longda Asahi Agricultural
Technology Co., Ltd.

Chiba Plant

Johnson Asahi Pty.Ltd.

Kansai Plant (Shiga prefecture)

Johnson Asahi Pty.Ltd.

14

15

Future hopes and dreams for “electric furnace steel”- the ultima te re c y c led productSteel BusinessAsahi Industries manufactures rebars (including threaded deformed bars) and structural steels from steel
scrap with an electric arc furnace. Our products are produced in environmentally friendly manufacturing
facilities with strict quality control. Our rebar is used in the construction and engineering work that
underpins our lifestyle, and our structural steels are used in products such as construction andengineering materials and machining components.
We will continue to be a familiar part of our customersʼ lives and move towards a sustainable society.
In response to the changing business environment, we will review our product portfolio and improve ourmanufacturing and sales systems as we strive to fulﬁll our hopes and dreams.

Strengthen threaded
deformed bar operations

Expand range ofhigh-strength andlarge-diameter rebar

Assured quality backed
by history

Contributing to the construction
sector by responding quickly to

Meeting the needs of high-rise

Developing advanced techniques forchanges in demand (throughbuildings and earthquake-proof

manufacturing a wide range of steels

construction method development

construction with our full range ofthrough continual quality improvement

and product research), improved

high-strength steels

work practices and shorter
construction times

R e s u l t s a n d P r o j e c t ions

Segment
net sales

Segment
income2,500

16,0002,000

12,000

1,500

8,000

1,000

4,000

500
0
2018 FY

0
2014

2015
results

16

2016

2017
projected

Segment income <millions of yen>Segment net sales <millions of yen>

20,000Manufacturing Process

Continuous casting facility (CC)

Ladle furnace (LF)

Electric-arc furnace (EAF)

Scrapyard

Melted steel following the LF process
poured into molds to manufacture billets-- an intermediate product

Impurities in the melted steel
removed and the composition
adjusted to suit the productSteel scrap melted in the arc
furnaceSteel scrap sorted and matched tothe products being manufactured

Steel scrap Collection

Dismantling

Heating furnace
Billets heated to the righttemperature for rolling

Deformed bars (rebar)

Threaded deformed bars

Rolling

Cooling bed

Heated billets formed into products
using No.0 to No.18 stands

Rolled products gradually cooled

To machining plants

To construction andengineering industries

Structural steels

Quality Control
Highly accurate electron microscopes are used in extremely precise
quality control processes to ensure that our product assurance system isflawless. We also provide rapid responses to users and implement
information feedback to earn their trust.

Microscope

17

Tension testing

Pickling

P roduc t s“Neji-A-Con” threaded deformed bars
Threaded deformed bars are rebars formed with a screw thread so that they
can be joined together using mechanical couplers. The benefits of using
these bars include shorter working times and the fact that they can beassembled in any sort of weather. With a few simple instructions, they can beassembled by anyone, and demand for this product is growing.
The USD590A, USD590B, USD685A, USD685B and USD980 Neji-A-Con
products have been granted Ministry certification.

The Asahi Industries mechanicalThe screw plate method is a mechanicalcoupling method is a process that uses

fastening method that has been certified bysteel couplers to join threaded deformed

the Building Center of Japan (BCJ). It is abars together. We provide 6 different

method for fastening rebar in place that

coupler types to suit a wide range ofoffers an alternative to fastening rebar by

applications.

bending the ends over.

Deformed bars (rebar)

Structural steels

Deformed bars are very widely used in construction projects

Structural steel is processed into a variety of secondary products ranging from mechanical components through tosuch as apartment blocks and office buildings, as well as

materials for construction and engineering. Its applications underpin our everyday lives, ranging from reinforcing

expressways and Shinkansen bridge piers. Asahi Industries ismaterial for the runways at Haneda airport to the foundations for major shopping centers.

one of the few manufacturers who produce and sell deformed
bars in a wide range of diameters. Our products have beenused in projects such as Tokyo Station and Tokyo metropolitan
expressways.

18

Crushed Stone andMaterial Recycling Business(Jobu Co., Ltd.)
Helping provide infrastructure
and recycling waste materials
for a sustainable society

19Crushed Stone Business
Jobu Co., Ltd. owns a mining claim of 1 million m2 in Minanomachi in Saitama prefecture, and the crushed stone and sand from the mine isused as a raw material for buildings, bridges, roads and other construction projects. In November 2016, it acquired a new adjoining mining
claim covering 300,000 m2 (6 times the size of Tokyo Dome). This gives us an assured crushed rock reserve equivalent to 35 million tons
and a crushed stone production system capable of consistently meeting a wide range of requirements.

N o.1 shar e
in S ait ama
prefecture

St a b l e s u p p l yof a wide
range ofproducts

Main products■ Crushed stone for concrete・Material for ready-mixed concrete・Material for secondary concrete products■ Crushed sand・Material for ready-mixed concrete・Material for secondary concrete products・Material for asphalt mixture■ Crushed stone for roads

・Material for asphalt mixture
・Gardening material

Material Recycling BusinessResults and Projections■Wood chips
・Material for pulp
・Fuel

20

Segment
net sales

Segment
income

2,500

200

2,000

160

1,500

120

1,000

80

500

40
0
2018 FY

0
2014

2015
results

2016

2017
projected

Segment income <millions of yen>

■Recycled
roadbed material
・Civil engineeringand construction
material

Segment net sales <millions of yen>

By recycling the concrete debris from building demolitions into roadbed material and turning
waste timber from house demolitions and logging into wood chips, we are helping to build asustainable society.

農業資材事業21

G r o w i n g a s a f e r t i l i zer man u f act u r er t h at sp eci al i z es
in seed and hay

AgribusinessAsahi Industries is Japanʼs only company operating a seed business and a haybusiness in addition to manufacturing and selling fertilizer, focusing particularly on
granular organic fertilizer. By drawing on our many strengths and maximizing theadvantages arising from synergies, we are exploring our potential in agriculture.

Fertilizer Business

Seed Business

Hay BusinessR e s ul t s a nd P r oj e ctions

Segment
net sales

Segment
income2,000

16,0001,600

12,000

1,200

8,000

800

4,000

400
0
2018 FY

0
2014

2015
results

22

2016

2017
projected

Segment income <millions of yen>Segment net sales <millions of yen>

20,000Fertilizer Business
The environment for our fertilizer business is undergoing significant changes due to the increasing pace ofagricultural reform in Japan. We see these changes as an opportunity and have set our sights on increasing
sales to designated special agricultural producers and agricultural corporations, with high-quality granular

Environmentally Friendly Manufacturing
Asahi Industries manufactures high-quality granular organic fertilizers while
also caring for the environment.

organic fertilizers as our key product. In addition to our joint ventures in China, our overseas developments
include starting the joint development of organic fertilizers in Thailand in April 2017, progressing the construction

Odors

・Electrostatic precipitators, exhaust gas scrubbers, soil deodorizing
equipment, regenerative thermal deodorizers
・Sealed plant buildings

Waste-water・Factory wastewater recycled inside the plant using closed systems(Chiba and Kansai plants)

Exhaustgases

・Exhaust gas scrubbers, electrostatic precipitatorsof a system able to respond nimbly to domestic and overseas demand.

Experience indeveloping raw
materials fororganic fertilizers

Expand sales areas
through cooperation
with seed business

Granulation
techniques

Promote sustainableagriculture through theutilization of unused
resources suchas livestock manure

Soil deodorizer

Laiyang Longda Asahi Agricultural Technology Co., Ltd.
・ Established in 2011 as a joint venture with Toyota
Tsusho Corporation and Longda Foodstuffs
Group Co., Ltd.

Regenerative thermal deodorizer

Exhaust gas scrubber

Thailand·s National Center for Genetic
Engineering and Biotechnology (BIOTEC)In April 2017, we signed a memorandum of understanding (MOU) with BIOTEC, a
research facility conducting R&D in the biotechnology and genetic engineering ﬁelds
and designed to foster industries. The MOU covers joint research into organic

・ Located in Shandong Province, China·s largest
agricultural production region, the company uses
environmentally friendly facilities such as exhaustgas scrubbing and industrial wastewater recycling
equipment to manufacture high-quality granularorganic fertilizers with technical guidance from
Asahi Industries

fertilizers for the Thai market and marks the start of a new fertilizer project.

・ Its sales network extends into regions beyond
Shandong Province
・Achieved profitability in FY201623

Materials Development and Manufacturing Techniques for Organic Fertilizers
Asahi Industries fertilizers are made using our own specially developed organic materials as well as regular organic materials, and are formed into superbly round,firm granules suited to mechanical application.
・ The primary organic materials developed by Asahi Industries include powdered bone made from the pork bones used by major ramen noodle chains to maketheir soup stock, compost made using bacteria from the wastewater produced by foodstuff factories, and livestock manure.
・By increasing the ratio of our own materials used in our fertilizers, we are making even more superior products (fertilizers) in terms of both quality and cost.

Bones used for
ramen stock

Pig manure

Poultry feathers

Manufacturing process for granular organic fertilizer
Plant-basedorganic fertilizer
Animal-basedorganic fertilizer

Exhaust gas scrubber

Regenerative thermal
deodorizers

Raw materials

Product shipment

Granulation fluid

Inorganic fertilizer

Mixer

Soil deodorizer

Organic fertilizer granules

Dryer
ReturnProduct
hoppers

Granulator
Bunker scale

Scale

CrusherVibrating screens

Heat sealing

Cooler

Weighing/
Loading robot
packaging unit

Fertilizer for farmers

Home gardening fertilizer

Also available from ourVege Garden website
http://www.vege-garden.com/

24

Seed Business
Using our own in-house developments coupled with techniques developed jointly with a leading Dutch seed
company, we are developing vegetable varieties with a particular focus on disease resistance, high-yields
and ease of cultivation. And by introducing unique vegetable strains from all over Japan and around theworld, we can offer a huge selection of seed varieties.

Develop kabocha
squash varieties
tailored to domestic
Japanese requirements
and original rootstock
products targeted atoverseas markets

Develop disease-resistant
tomatoes jointly witha Dutch seed company

Expand markets,
implementing cultivation
guidelines incollaboration with thefertilizer business

Kamikawa Research Station
The Kamikawa Research Station holds Field
Days twice a year in Spring and Fall, oﬀering
an opportunity to show new varieties togrowers, marketers and the media.

Products■ Shanghai Wells Seed Co.,Ltd.
In May 2016, we signed an exclusive sales agreementwith China·s Shanghai Wells Seed Co.,Ltd. In China,
grafting is recognized as an effective measure against
soil diseases and pests, so the prospects are good for
Asahi Industries rootstocks as products that offer
resistance to many such diseases.

・A sweet, smooth-fleshed and high-yielding
kabocha squash
・Rootstocks for the global market that areresistant to soil diseases and tailored forvigor

・A famously delicious tomato that is resistant
to diseases such as yellow leaf curl virus andleaf spot
・A vigorous, high-yielding cucumber that is
resistant to brown spot disease

・Vegetables that look and taste superb,
including vividly deep green spinach, sweetcorn as sweet as fruit and brilliantly colored
carrots and mini-tomatoes

25

Hay Business
European influences on diet have led to increased consumption of beef and dairy products, whilewater shortages are restricting hay production, leading to a forecast rise in global demand for hay.
Eager to grasp this opportunity, Asahi Industries is working with its Australian joint venture Johnson
Asahi Pty. Ltd. on plans to ramp up hay production and sales.

Increase sales
on the back ofrising demand forhay in Asia

Provide a stablesupply of high-quality
Australian hay toJapan· s dairy and cattle
farmers

Hay

Products
Oaten hay
Our main product and a highly palatablevariety due to its high sugar content

Johnson Asahi Pty. Ltd.
・ Established in 1995 as a joint venture with J.T. Johnson & Sons Pty. Ltd.
(Australian hay company)
・Thorough quality control for the production of high-quality hay- Secure traceability- X-ray inspection, component measurement, nitrate nitrogen concentration
measurement
・Hay produced in Victoria and exported to Japan, China, Korea and Taiwan
・Scattered corporate farms (managed by the company) to disperse climate risk

26

The Environment,
Governance & Social Responsibility

27

Fourth Medium-term
Environmental Action Plan

Environmental Management
The Asahi Industries Group endeavors above all to “contribute to the global environment

The Asahi Industries Group has formulated its “Fourth Medium-term Environmental Action Plan”

and communities around the world”, honoring its commitment to being “a company that is(FY2015-2018) and has been undertaking activities based on that plan.

respected by everyone”.

Asahi Industries Group Environmental Guidelines
Countermeasures for
global warming

Contributing to the environment by decreasing environmental impacts, preventing global
warming and achieving zero emissions

Environmental Management System

Promotion of energy savings
Promotion of environmental
impact reductions, etc.

Working to build an environmental management system that encompasses the entire
Asahi Industries Group and forcefully promoting ongoing environmental activities

Environmental impact
reductions
Environmental Management System Framework
Biodiversity conservation

President

Management Meetings

Executive Office(Environmental Safety
Management Dept)

Environment, Safety &Health Committee

Communication
enhancement
Development ofenvironmental management

Environmental Project Leaders
Assistant Environmental Project Leaders

Environmental education &training
Energy Savings
Promotion Committee

Affiliated Companies

Steel Division

Administration and
Planning Division

Agribusiness Division

Contribution to building
sustainable communities

28

28

Contribution to the environment
through business growth

Promotion of environmental impact reductions, etc.
Countermeasures for global warming

Promotion of energy savings

We are actively engaged in efforts to reduce our CO 2 emissions as a countermeasureagainst global warming. The conversion of the fuels used in our main facilities (to naturalgas) between FY2009 and FY2012 has since helped to significantly reduce CO 2
emissions.

The Asahi Industries Group is working to reduce its energy usage as a key measure. The
Steel Division is a particularly heavy user of energy and manages its energy consumption
very carefully.
The Energy Savings Promotion Committee is made up of energy managers from eachfactory and manages the progress of energy saving measures throughout the company
while also rolling out energy saving campaigns.

- Main activities in FY2016 -- Main activities in FY2016 -・Reduced energy in production processes

・Saved energy in each factory

・Saved energy thoroughly in factories/offices

・Reduced energy consumption significantly in the Steel Division by renewing burners andpromoting linked production between processes

・Converted sales fleet to hybrid vehicles
・Sold CO2 emissions reductions by Asahi Industries offices in Saitama Prefecture under the・Reduced energy consumption in the Fertilizer Division by adjusting production among

prefecture· s emissions trading system

factories

Targets

Results

࢒CO2 emissions 25% reduction on FY1990 levels
5% reduction on FY2005 levels
Assessment ◎: 100％ achieved○: 70％ achieved

Targets

Assessment

・47% reduction on FY1990 levels
・22% reduction on FY2005 levels◎

࢒Investigation into renewable energy andavailable energy

・Research into the installation of energy
conversion systems for waste heat○

Energy consumption
Year-on-year change in specificenergy consumption

࢒On FY2005 levels
47% reduction(kt-CO2)

252(Terajoules)

250

150

150

22% reduction

139

CO 2 emissions

CO 2 emissions

50

0
2015

2016 FY* Results for each year calculated using the energy coefficientfor FY1990

98.6

100.4

98.5
100.0

150

166

4,000

161

134

100

2014

98.3

Energy consumption

125

105.0

104.8

100

50

0
Benchmark year
(FY2005)

2014

2015

3,706

2,983

* Results calculated using the energy coefficient for each year

3,228

95.0

90.0

85.0

0

80.0
2013

* Terajoule -- amount of heat

29

3,346

2,000

2012

2016 FY

3,684

2014

2015

2016 FY

Specific energy consumption

200

（%）

6,000

206
200

Benchmark year
(FY1990)◎■Changes in energy consumption

࢒On FY1990 levels(kt-CO2)

Assessment

・1% increase in yearly average from
FY2012 to FY2016△: Less than 70％ achieved, improvement required■ Changes in CO2 emissions

250

Results

࢒1% reduction in specific energy consumption
on a 5-year average

Environmental impact reduction

Biodiversity conservation

In order to conserve the environment and biodiversity, we are setting and administering
our own voluntary management targets for exhaust gas and wastewater emissions fromour factories that are stricter than the standards stipulated by law.
As well as lowering our emissions, we are also making more effective use of our waste
products through in-house recycling and the re-use of valuable materials.

Each of the Asahi Industries Group plants is surrounded by abundant natural beauty. Our
environmental protection efforts include participating in local volunteer programs andconducting clean-up programs in the factory surrounds. In our Seed Business, we havealso developed disease-resistant varieties that can be cultivated with low levels ofchemicals, helping us to maintain biodiversity with products that customers prefer us touse.

- Main activities in FY2016 (exhaust gases and wastewater management) Targets

・Thoroughly implemented appropriate operation management and maintenance for exhaustgas and wastewater treatment equipment

Targets

Results
・Fully achieved◎

࢒Wastewater : One tenth or less of legal
environmental standard

・Successful, with a few exceptions
・SS (suspended solids) failed to reach 1/10,
within environmental standards○- Main activities in FY2016 (waste products) ・Recycled all soot and smoke emissions■Changes in total waste products emitted

from steelmaking processes at Asahi

Total emissions
Recycling and effective use rate

Industries recycling facilities（t）

2 , 500

99.1(Soot and smoke emissions during repairs outsourced,
total emissions increased)

2 , 000

Total waste products emitted* Recycling and effective use rate: Calculated from the ratio of
the amount for final disposal relative to standard emissions(7,223 tons in FY2003)

（％）

99.6
98.8

1 , 500

100

Target99.5%
or better

99

Recycling and effective use rate・Performed scheduled repairs of theabove facilities

98

1,120
1 , 000

812

97

683

500

96

95

0
2014

2015

2016 FY

Targets

Results

Assessment

Zero waste product emissions
Recycling and effective use rate of 99.5%
or better

・Recycling and effective use rate: 98.8%(Reason for not achieving target: Generationof waste materials that could not be recycled
due to scheduled repair work)○

30

Assessment

Promotion of the development and adoptionof disease resistant seed

・Developed the large disease-resistant "Arisa"
tomato and "Grazie" cucumber varieties◎

࢒Conservation activities at offices and plants

・Carried out workplace 5S programs and regularpatrols of the surroundings
・Drafted the Green Space Guidelines andmanaged green spaces so as to conserve
biodiversity◎

࢒Participation in programs aimed atpreserving water sources and planting trees

・Continued to undertake volunteer activities
・Maintained the Asahi Flower Garden◎

Assessment

࢒Exhaust gases: One half or less of legal
environmental standard

Results

Contribution to building
sustainable communities

Development of environmental
management

The main businesses of the Asahi Industries Group are helping to build a sustainable society.

Communication enhancement

Business growth is linked to helping the environment and the company is united in its efforts.

“Environmental Communication” seminars are held each year for regional residents toincrease community awareness of environmental activities by the Asahi Industries Group.
Factory visits and discussions serve as an opportunity to exchange views and give
people a better understanding of Asahi Industries.

࢒Dissemination of environmental informationand participation in regional discourse

・Held environmental communication seminars
to disseminate environmental information
・Expanded the Asahi Kamikawa Gallery

Assessment

Environmental
assessments
for business◎Business growth targets basedon environmental assessments↑↑

Pointscurrently reached

Environmental education & training
The Asahi Industries Group conducts a range of educational and other programs toincrease environmental awareness among its employees. By raising awareness of theenvironment among individual employees, we aim to grow our business as a contributor
to a sustainable society.

Contribution to building
sustainable communities
Contribution through increased sales
・Steel Business re-using steel scrap
・Material Recycling Business re-using waste products
・Fertilizer and Seed Business helping to reduce ourenvironmental impacts

Targets

Results

2015

2016

2017

2018 FY

Increased utilization of unused resources

Results

Sales growthTargets

Business
growthBuilding ofsustainablecommunities

Sales target

Target for utilization ofunused resources

Contribution through increased use ofunused resources
・Use of fertilizer raw materials that utilize unused
resources

Assessment

࢒Hosting of in-house environmental
seminars

・Held environmental seminars tailored towork content◎

࢒Encouragement to acquirecertifications

・Attained total of 21 certifications, including
Eco certification and internal ecologicalcertification◎

TopicsRanked 1st among steel businesses
in the Environmental Management Survey
In the Environmental Management Survey of companies conducted by Nikkei
Inc., we secured the top spot among steel companies in FY2016. This survey isa mechanism for assessing companies on both their environmental policies andtheir management. Specifically, environmental efforts such as policies to address
global warming and pollution as well as the company·s profitability are applied tothe scores for each question when the assessment is made.

31

Material Balance

Environmental Accounting

INPUT
Steel
Raw
materials

Water

Fertilizers
Crushed stone

372 kt152 kt
1,633 kt

EnergyMaterial recycling

47 kt

Water

1,658 km 3

Environmental accounting is a mechanism for ascertaining as quantifiably as possible the costsof environmental impacts and environmental conservation (environmental conservation cost)

Electricity

218MkWh

Natural gas

17Mm 3 N

and its effects (economic impact). The goal is to effectively and efficiently promote

Heavy oil

3,000 kl

environmental conservation activities so that growth is sustainable.

Other fuels

4,000 kl

Environmental conservation cost: Amount of investment and costs incurred in efforts to reduce environmental impacts and provide
infrastructure to conserve the environment
Economic impact: Results of implementing environmental conservation policies and economic benefit to profits

Environmental conservation costs* Raw materials for crushed stone production consist of the raw stone used.
Raw materials for material recycling consist of the industrial waste received

Production

Production
volumesSteel

330 ktCrushed stone

Fertilizers

136 ktMaterial recycling

1,175 kt

(Millions of yen)

Category

FY2014FY2015FY2016

Ratio (%)

Pollution prevention costs

530

560

458

47.9

Global environmental
conservation costs

84

87

77

8.1

Recycling costs

330

318

302

31.6

Management costs

38

30

29

3.0

R&D costs

50

50

54

5.7

Social activity costs

25

24

31

3.2

Environmental damage
remediation costs, etc.

5

5

5

0.5

1,062

1,074

956

100.0

61 kt

Environmental
conservation costs (total)

Economic Benefits

OUTPUT
AtmosphericexhaustWastewaterCO2

161 kt

NOx

42 t

SOx

10 t

Water

1,470 km

3

Waste
and
byproducts

Total amount generated

54 kt

Amount recycled

53 kt

Within the Group

7 kt

On consignment

46 kt

Amount treated on
consignment

1 kt

Amount for final disposal

0.08 kt(Millions of yen)

Category

FY2014FY2015FY2016

Ratio (%)

In-house recycling benefit*

381

540

389

67.8

Waste disposal benefit

57

63

49

8.5

Product cost reduction
benefit
Received industrial waste
treatment benefit

51

51

41

7.1

102

96

95

16.6

Economic benefit (total)

591

750

574

100.0

* The decline in the effects of in-house recycling is primarily due to reduced recycling of soot and smoke emissions in the steel plant.
●Reporting of environmental activities
Our environmental activities are also describedon the “Environmental Activities” page on the Asahi Industries website.
http://www.asahi-kg.co.jp/csr/environment/ (Japanese)32Corporate GovernanceOn 23 June 2016, Asahi Industries transitioned from a company with a board of corporate auditors to one with an audit and supervisory committee. In doing so, we set as our key
management issues the provision of a structure capable of responding quickly to changes in the management environment, ensuring management transparency through prompt
and appropriate public disclosure, the pursuit of eﬃciency in management based on sensible criteria, and enhanced corporate governance through measures such as strict
compliance.

Corporate Governance Framework

General Meeting of Shareholders①Board of Directors
Board of Directors (excluding directors on the
Audit and Supervisory Committee) is composedof eleven members, comprising six directors andfive members of the Audit and Supervisory
Committee (three of whom are external
directors). Regular meetings of the Board of
Directors are held monthly and extraordinary
meetings of the board are held as required. The
board is organized so as to make decisions on
items stipulated by the applicable legislation andother important matters relating to management,
and to supervise the business conduct of thedirectors.

Appointment/

Appointment/

dismissal

dismissal

dismissal

Auditing, etc./reports①
Board ofDirectors② Audit and Supervisory Committee
Cooperation

Entrustment to decide

Selection/

Reports

on important businesssupervision

Directions

Auditing

Accounts

conduct

Auditor

Auditing③Management Meetings
Management meetings are bodies that discuss,
negotiate and decide on important mattersrelating to items to be discussed by the Board of
Directors and the conduct of business for whichauthority is granted by the Board of Directors.
Management meetings are made up of
executive directors, the heads of businessdivisions, executive officers, general managers
and the heads of management divisions, andare organized so as to be capable of consideringand discussing planning for profits,
manufacturing and sales, products, personnel
and development from a medium- and long-term
perspective.

Appointment/

Discussions

Directions③ Management⑤

President

Meetings(auditingInternal
Control Dept

Reports
Inquiries

Cooperation

Responses④
࢒Compliance Committee
࢒Risk Management Committee
࢒Human Resources & Planning

Commands/

Internal

instructions

auditing

Committee

company)②Audit and Supervisory
Committee
The Audit and Supervisory Committee is madeup of three external directors and five directors
and is organized so as to meet monthly or asnecessary. It also works with the Internal Control
Office and accounts auditors in the course of
supervising the business conduct of directors.
The members of the Audit and Supervisory
Committee also attend meetings of the Board of
Directors to make decisions on proposals andalso meet each quarter with the President toexchange opinions and provide candid
feedback.

⑤Internal Control Dept

(Internal Audit Section, Internal Control Section)

The Internal Audit Section supervises matterssuch as risk management and appropriatenesswith respect to internal regulations and therelevant legislation as they pertain to the work
done by the company's departments andJapanese subsidiaries under the annual plans.
The Internal Control Section also studies andevaluates the status of the provision andoperation of internal controls regarding financial
reporting.
The Internal Control Department cooperates
with the Audit and Supervisory Committee andexternal auditors (auditing company) to ensure
effective auditing and supervision.

࢒Environment, Safety & Health④Committees
Committees are established as advisory bodies
for the President and plan, propose and discussmatters in the respective individual sectors.
Committees report on those important matters tomanagement meetings or to the Board of
Directors.

Committee

Divisions/Departments & Affiliates

33

Asahi Industries complies with the five basic principles of the code of corporate governance.
Although Asahi Industries is a company listed on the JASDAQ exchange, it discloses the 11
principles required of companies listed on the Main Markets.
The Corporate Governance Report filed to the Tokyo Stock Exchange is posted on the
Asahi Industries website.
http://www.asahi-kg.co.jp/corporate/governance (Japanese)Compliance

Compliance Framework

Board of Directors
President

In the Asahi Industries Group, compliance activities are conducted across the entire
Group. Based on a charter on ethical standards, a code of conduct and in compliance withthe legislation, Asahi Industries makes every effort to abide by corporate ethics and social
morality.
Important guidelines and promotional planning relating to Group compliance are
discussed and formulated by the Compliance Committee, an advisory body to the
President of Asahi Industries that includes representatives from the labor unions in each
workplace as members. The Committee reports either to a management committee or to
the Board of Directors where final decisions are made.

Main activities in FY2016■ Revision of the compliance manual・Compliance training for all Group employees■Revision of the management rules for the internal(Chief compliance officer)

Management Meetings
Improvements/instructions

Compliance Committee
Reports
Executive Office
Cooperation

Internal Audit
Section,Internal Control
Dept

Auditing(General Affairs &Human Resources Dept)

Compliance Managers

Communication(Division/dept heads, office managers,
plant managers & affiliate dept heads)

Reports

Reports

Guidance
Consultation

whistleblower system

Compliance Supervisors

・Whistleblower status broadened to include retirees andsuppliers as well as employees

Auditing/inquiries(Section heads)

Consultation

Education

Employees

Risk Management
In the Asahi Industries Group, risks are defined as “uncertain events that have an adverse impact on the organization” , andGroup-wide risk management is promoted so as to continually improve our capacity to deal with and appropriately manage thevarious risks that could impact on the Group.
To promote basic policies and develop systems for risk management, risk management issues, key policies and promotional
planning, and important matters relating to risk management are discussed and formulated by the Risk Management Committee.
This Committee is an advisory body to the President of Asahi Industries that includes representatives from each workplace asmembers and that reports either to a management committee or to the Board of Directors where final decisions are made.

Main activities in FY2016■Business Continuity Plan (BCP)

Risk Management Committee Framework

President

Management
Meetings

Risk Management
Committee

・ Annual implementation of BCP training in case of large-scale
earthquakes■Revision of hazard management rules
・Dealing appropriately with complaints and incidents as well aslarge-scale disasters and accidents

34

Executive Office(General Affairs &Human Resources Dept)Human Resources Management
The environment in which businesses operate is changing significantly as globalization leads togreater competition and the population and labor force shrink, and this demands constant innovation.
In this sort of environment, developing and retaining human resources has emerged as a key issue.

Inductee training

Human Resources System Reform

Self StudyIn October 2016, the new human resources system was introduced with the aims of improving human resource

We also support employees who study of their own volition to improve themselves and progress their knowledge

development and motivation, building greater diversity in our work practices and improving productivity. We are

and skills.

making efforts to promote the employment of people with a disability and the creation of a workforce that is・Correspondence courses

employable worldwide. By expanding opportunities for female participation in the workforce and rewarding workers

We offer an extensive selection of correspondence courses tailored to a wide range of employees from new

who work hard to achieve their goals, we aim to create an environment in which every single employee finds their

recruits through to managers. Courses cover areas such as sales, technology, finance, accounting, computing,work rewarding and looks forward to taking on the next challenge.

stress management, health management and gaining qualifications.
・Learning languages

Enhanced Training System

Language classes in English and Chinese are provided with the aim of improving the level of communication with
our affiliates and other overseas companies.

At present, the training conducted by Asahi Industries consists of standard employee training and specialist skills
training.

Employee Care・Standard employee training
Inductee training, mid-level (5th year) staff training, management candidate before-and-after training, department
head before-and-after training, executive training

Based on "Guidelines for Maintaining and Improving Workers' Mental Health", we are endeavoring to create vital
workplaces that support psychological wellbeing. Using the Stress Check System introduced in FY2016, employee

・Specialist skills training

stress levels are monitored to promote awareness of stress among the employees themselves. Where necessary,

Participation in training conducted by research facilities, such as instruction in DNA markers and blightcertification
New programs, such as in-house skills testing for manufacturing positions and production “maester” training, arealso planned

measures such as interviews with psychotherapists or vocational counselors can also be arranged, providing acomprehensive support structure and creating workplaces that are pleasant to work in.

Communication with employee families
So that employee families have a better understanding of Asahi Industries, we started organizing family visits(visitor days for children) as of FY2017. These events provide families with an opportunity to see the dynamic
manufacturing processes and environmentally friendly product manufacturing at our steel plants and fertilizer
SODQWVZKLOHDWWKHVDPHWLPHVWUHQJWKHQLQJHPSOR\HHV·IDPLO\ERQGV

In-house Chinese classes

Executive staff training

35

CSR Activities
The Asahi Industries Group undertakes a range of activities aimed at supporting children and regional communities.
By regularly volunteering to help clean up river banks, parks and roads, maintaining parks, holding festivals for local residents and supporting sporting events, we engage in active programs to beautify
the natural environment and local neighborhoods for all the local residents.
We also support regional education programs in the hope of enriching the lives of local children through initiatives such as classes in growing vegetables, factory and farm tours and art classes (Asahi
Kamikawa Gallery).

Engaging with local communities

Supporting regional education

Clean-up volunteers

Factory tour

Seed sowing classat a local kindergarten

Asahi Photo News

Asahi Kamikawa Gallery
Every year since March 2008, the walls surrounding the Saitama Office have been used to exhibit artworks
by children from local elementary and junior-high schools. In March 2017, 59 new artworks were added,

Summer river festival
for local residents

Asahi Flower Garden

bringing the total number exhibited so far to 446. This display of youthful energy puts a smile on
everyone· s face.

36

Financial Data,
Corporate Information,
Investors Information

37

Consolidated Balance Sheets(Millions of yen)

End FY2012

End FY2013

End FY2014

End FY2015(Millions of yen)

End FY2016

AssetsCurrent assets

End FY2012

End FY2013

End FY2014

End FY2015

End FY2016

20,27916,848

16,63813,34813,592

7,714

5,947

5,626

3,831

4,268

Liabilities
Current liabilities

18,14014,162

14,84913,845

14,856

2,561

2,640

1,501

2,640

3,336

7,792

5,952

5,671

4,727

4,734

Short-term loans payable

5,915

5,915

7,245

4,950

4,700

5,477

3,221

5,830

4,754

4,762

Current portion of bonds

120

120

120

60

60

1,908

2,060

1,527

1,397

1,510

1,690

1,790

1,434

1,649

1,947

Other

410

293

321

328

514

Income taxes payable

84

62

77

231

34

Allowance for doubtful accounts

△10

△5

△3

△1

△1

Allowance for bonuses

261

146

135

271

262

4,493

2,866

2,000

2,354

2,318

4,586

5,284

5,271

4,762

5,510

Cash and deposits

Trade notes andaccounts receivable
Merchandise inventory andfinished goods
Raw materials and supplies

Trade notes andaccounts payable

Current portion of
long-term loans payable

Other

Noncurrent assets

23,20813,12913,088

11,982

12,650Property, plant and equipment

20,112

10,652

10,620

10,116

10,611Long-term loans payable

2,395

3,105

3,623

3,234

3,870

Buildings and structures, net

3,785

3,139

3,344

3,134

3,046

Net defined benefit liability*

1,083

1,050

722

1,097

964

12,540

4,053

3,817

3,509

3,745

Other

1,107

1,128

925

430

675

Land

2,665

2,678

2,678

2,678

2,721

24,865

22,132

21,90918,111

19,102

Other

1,120

780

779

792

1,098

659

196

193

182

234

2,436

2,280

2,274

1,683

1,804

Machinery, equipment andvehicles, net

Noncurrent liabilities

Total liabilities*Figures for end FY2012 show the provision for retirement benefits

Intangible assets

Investments and other assets

Total assets

41,34827,292

27,93825,828

Net assets
6KDUHKROGHUV·HTXLW\

4,729

5,361

7,864

8,334

379

430

667

△ 148

69

Total net assets

16,482

5,160

6,028

7,716

8,404

Total liabilities and net assets

41,34827,292

27,93825,82827,507

Other comprehensive income,accumulated

27,507

38

16,10238

Consolidated Statements ofComprehensive Income

Consolidated Statements of Income(Millions of yen)

(Millions of yen)

FY2012FY2013

FY2014FY2015FY201640,17543,59135,49436,34832,354FY2012FY2013

FY2014FY2015FY2016△1,480△11,093

549

2,503

820

Net unrealized gains onavailable-for-sale securities

133

56

3

△327

133

Foreign currency translation
adjustments

50

18

28

△67

△28

204

△420

113

Net income (loss)
Sales

Other comprehensive income
Cost of sales

Gross proﬁt

Selling, general andadministrative expenses

34,34037,317

29,17428,064

24,835

5,835

6,274

6,320

8,284

7,519

7,011

6,836

5,911

6,369

6,318

Remeasurements ofdefined benefit plans
Total other comprehensive income
Comprehensive income

Operating income (loss)△1,176

△562

409

1,915

1,200

Non-operating income

178

174

197

280

149

Non-operating expenses

238

253

258

264

235

Ordinary income (loss)△1,235

△641

348

1,931

1,115

Extraordinary gains

-

3

545

410

25

Extraordinary losses

233

9,337

263

118

177

△1,468△9,975

630

2,223

963

75

104

114

246

73

Income (loss)
before income taxes

Income taxes - current

1,013

△33

△527

△11,093

549

2,503

218

785

1,688

1,038

△1,295△11,018

785

1,688

1,038

Comprehensive income attributes
to minority shareholders

-

-

-

-

-

Consolidated Statements ofCash Flow(Millions of yen)

FY2012FY2013

FY2014FY2015FY2016

Operating activities

1,299

2,116

△1,164

3,852

1,410

Investment activities△1,592△2,115△1,044△61△1,095

Financing activities

519

73

1,065

△２,639

388

7

3

4

△12

△7

234

78

△1,139

1,139

695

2,327

2,561

2,640

1,501

2,640

2,561

2,640

1,501

2,640

3,336

69
LQFDVKDQGFDVKHTXLYDOHQWV△1,480△815△11,018

Net increase (decrease)

Net income (loss)

236△1,295RQFDVKDQGFDVKHTXLYDOHQWV

△64

74

Comprehensive income attributed
to parent company shareholders

Effect of exchange rate changes

Income taxes - deferred

184

820

&DVKDQGFDVKHTXLYDOHQWV
at the beginning of current period

Current net income (loss)
returned to parent△1,480△11,093

549

2,503

820

&DVKDQGFDVKHTXLYDOHQWV
at the end of current period

company shareholders

39

Consolidated Statements of Changes in Net Assets
April 1, 2016 through March 31, 2017

(Millions of yen)

Other comprehensive income, accumulated

6KDUHKROGHUV·HTXLW\Balance at the beginning of current period

Common stock

Capital surplus

Retained earnings

Treasury stock

Total
VKDUHKROGHUV·
equity

2,190

1,802

4,166

△293

7,864

Net unrealized
gains on available
for sale securities

Foreigncurrency translation
adjustments

Remeasurementsof defined
benefit plans

Total othercomprehensive
income, accumulated

26

64

△239

△148

Total net
assets7,716

Changes in items during the period

Dividends from surplus
Current net income (loss) returned toparent company shareholders

△350

△350

△350

820

820

820

Net changes in items other than
VKDUHKROGHUV HTXLW\
Total changes in items during the period

Balance at the end of current period

133

△28

113

218

218

-

-

470

-

470

133

△28

113

218

688

2,190

1,802

4,636

△293

8,334

160

35

△125

69

8,404

Performance by Segment *1(Millions of yen)

FY2012FY2013

FY2014FY2015(Millions of yen)

FY2016FY2012FY2013

FY2014FY2015FY2016△1,045△1,210

65

1,942

1,318

77

146

151

89

127

970

1,628

1,100

924

740

4

△30

△20

△6

17

Segment income * 4

Segment net sales
24,961

26,242

19,86019,853

17,452

1,800

1,994

1,938

2,010

2,095

12,72914,62813,01813,821

12,723

374

223

151

150

338

Adjustments* 3

△385

△221

△116

△108

△255

Adjustments* 5△1,185△1,114△924△1,071△1,002

Total

40,17543,59135,49436,34832,354

Total△1,176

△562

409

1,915

1,200

Steel Business

Crushed Stone andMaterial Recycling Business

Agribusiness

Other* 2

Steel Business

Crushed Stone andMaterial Recycling Business

Agribusiness

Other* 2*1: Environmental Solutions Business sold in FY2016 not shown*2: Other: Contracting business operations not categorized in the reporting segments*3: Adjustments: Sales among segments*4: Segment income: Includes investment profit/loss under the equity method, but investment profit/loss under the equity method is excludedin the adjustment amount when the operating profit/loss is adjusted*5: Adjustments: Primarily general and administrative expenses in departments outside the reporting segments

40

Corporate Information

As of the end of June 2017

Corporate Information

OfficesCompany Name

Asahi Industries Co., Ltd.

Saitama Office (Steel Business, Agribusiness)

Head OfficeDaiwa Higashi-Ikebukuro Building, 23-5, Higashi-Ikebukuro
3-chome, Toshima-ku, Tokyo 170-0013, Japan

222 Wataruse, Kamikawa-machi, Kodama-gun, Saitama 367-0394, Japan
TEL: 0274-52-2711

TEL:

03-3987-2161

URL:

http://www.asahi-kg.co.jp/

Osaka JA Building, 2-5, Nishitenma 1-chome, Kita-ku, Osaka-shi, Osaka 530-0047, JapanFoundedAugust 16, 1935

TEL: 06-6311-6215

Established

October 29, 1991

Common Stock

2,190 million yen

No. of Employees

419 (consolidated base: 472) As of the end of March 2017

Osaka Office (Agribusiness)【Steel Plant】

Saitama Plant

222 Wataruse, Kamikawa-machi, Kodama-gun,
Saitama 367-0394, Japan TEL: 0274-52-2713【Fertilizer Plant】 Kanto Plant

222 Wataruse, Kamikawa-machi, Kodama-gun,
Saitama 367-0394, Japan TEL: 0274-52-2712

Corporate Officers

Chiba Plant

13, Sakuradai 1-chome, Asahi-shi, Chiba
289-0506, Japan TEL: 0479-68-1600

President

Masanori Murakami

Senior Managing Director

Noriyuki Nakamura

Managing Directors

Kiyoshi Hirose, Susumu Inaba

Directors

Masaru Kusama, Masaru Sekine

Directors and Audit andSupervisory Committee Members

Ichiro Tajima, Kou Sato

Kansai Plant

6776 Minakuchi, Minakuchi-cho, Koka-shi,
Shiga 528-0005, Japan TEL: 0748-62-8171

Directors and Audit andSupervisory Committee Members(Independent)【Farm】

Kamikawa
Research Station

863-2 Higashikitahara, Niisato, Kamikawamachi,
Kodama-gun, Saitama 367-0232, Japan

Affiliated Companies
Jobu Co., Ltd. (Crushed Stone Production and Sales, Construction Waste materials etc. Recycling)
President: Atsushi Terai
3085-1 Kanezawa, Minano-machi, Chichibu-gun, Saitama 369-1601, Japan

Shinichi Tajima, Hideki Hanaeda, Mitsuaki Tsuchiya

TEL: 0494-62-1321

Asahi Business Support Co., Ltd. (Contracting, Temporary Staffing)

Executive Officers

Toshio Sakamoto, Satoru Tanaka, Yoshiro Yamada

President: Makoto Sato
222 Wataruse, Kamikawa-machi, Kodama-gun, Saitama 367-0301, Japan
TEL: 0274-52-6411

41

Investors Information
Stock Information As of the end of March 2017

As of the end of June 2017

Dividends
Our basic policy is to return profits to shareholders, fully taking into consideration ourconsolidated financial results, and the company·s financial status and financial requirements,
ensuring that stable profit distribution is continued.

Stock listing

Tokyo Stock Exchange, JASDAQ

Securities identification code

5456

StocksTotal shares authorized: 24,000,000
Total shares issued:
7,200,000

No. of shareholders

7,599

FY2014FY2015FY2016

Interim

0 yen

0 yen

10 yenYear-end

0 yen

40 yen *20 yenFull-year dividends

0 yen

40 yen *30 yen■Major Shareholders
No. of shares held

Shareholding
percentage (%)

Hanwa Co., Ltd.

600,000

8.6

Mitsui & Co., Ltd.

600,000

8.6

Asagami Corporation

522,000

7.5

Katakura ＆ Co-op Agri Corporation

300,000

4.3

The Norinchukin Bank

210,000

3.0

Tokyo Tekko Co., Ltd.

200,000

2.9

Nihon Matai Co., Ltd.

181,000

2.6

Kanehira Steel Co., Ltd.

180,000

2.6

Marubeni Itochu Sumisho Techno Steel Inc.

180,000

2.6

Credit Saison Co., Ltd.

134,700

1.9

Name of shareholder*Breakdown of FY2015 year-end dividend: Ordinary dividend: 30 yen; Commemorative dividend: 10 yen

Shareholder Benefit Program
Long-term Asahi Industries shareholders are eligible for additional benefits over and above thebenefits awarded to normal shareholders.
Benefits
No. of shares held

Long-term shareholders

Normal shareholder benefits(shareholders who have owned sharesfor one year or more)*

100-199

Rice coupons (4)500 yen Quo card (gift card)

200-299

Rice coupons (8)1,000 yen Quo card (gift card)

300-499

Rice coupons (12)1,500 yen Quo card (gift card)

500 or more

Rice coupons (16)2,000 yen Quo card (gift card)* Holdings where the shareholder number has changed are not regarded as continuous holdings (as in the following situations):① Change in securities company (stockbroker)③ Use of stock lending transactions(Note) Shareholding percentage (%) is calculated exclusive of treasury stock (200,000 shares).
Percentages are shown rounded oﬀ to the ﬁrst decimal place.

■Composition② Repurchase after selling all shares held
④ Change to registered owner due to inheritance, etc.

Facility Tours

Security companies 0.1％

As of FY2016, we have been conducting tours of our various facilities to provide
all our shareholders with an opportunity to gain a deeper understanding of thework we do at Asahi Industries.In FY2016, tours of the Kamikawa Research
Station were conducted in Spring and Fall, allowing visitors to see our progressin the development of vegetable varieties and to tasted freshly picked samples.
In FY2017, tours are planned at our steel and fertilizer plants as well as the
Kamikawa Research Station. The facility tours are an opportunity for us to send
information about Asahi Industries out into the community, but also a chance tohear candid feedback from shareholders, and we plan to hold the tours on aregular basis in years to come.

of Shareholders Overseas corporate shareholders 0.5％
Treasury stock 2.8％
Financial institutions 4.0％
Individuals and others 35.2％
Japanese corporate shareholders 57.4％

42

Compilation policy
This report was compiled so as to provide everyone with clear and straightforward account of the business activities and financial details of the Asahi Industries Group (Asahi Industries Co., Ltd. and its affiliated companies), together with its
environmental and CSR activities.
Companies covered

Period covered

Reference guidelines

Asahi Industries Co., Ltd.

April 1, 2016 through March 31, 2017

・GRI (Global Reporting Initiative)

Jobu Co., Ltd.

(*Periods other than FY2016 are also partially covered.)

Asahi Business Support Co., Ltd.

Publication date:

September 2017

Johnson Asahi Pty. Ltd.

Previously published:

September 2016

Laiyang Longda Asahi Agricultural

Planned next publication: September 2018

Technology Co., Ltd.

“Sustainability Reporting Guidelines 4.0”
・Ministry of the Environment, Japan,“Environmental Reporting Guidelines” (Fiscal Year 2012 Version)
Available on our website at:

http://www.asahi-kg.co.jp/csr/

Contact information
Public Relations Section,Corporate Planning Department,
Administration and Planning Division
Asahi Industries Co., Ltd.
Daiwa Higashi-Ikebukuro Building, 23-5, Higashi-Ikebukuro
3-chome, Toshima-ku, Tokyo 170-0013, Japan
TEL: 03-3987-0283 Email: ir@asahi-kg.co.jp