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

Asahi Holdings, Inc.
(Stock code: 5857)

Notice of the 12th Annual General Meeting of Shareholders
Date and time:
10:30 a.m. on Tuesday, June 15, 2021
Reception opens at 10:00 a.m.
Venue:
KOBE PORTOPIA HOTEL
10-1, Minatojima Nakamachi 6-chome, Chuo-ku, Kobe-shi“Kairaku-no-ma,” basement floor, Main Building
Proposals:
Proposal 1:
Proposal 2:
Proposal 3:
Proposal 4:

Partial Amendments to the Articles of Incorporation
Election of Two (2) Directors (Excluding Directors Serving as the Audit andSupervisory Committee Members)
Election of Five (5) Directors Serving as the Audit and Supervisory Committee
Members
Determination of Amounts and the Content of Performance-Based Stock
Compensation Plan for Directors

Please exercise your voting rights:
Voting rights at the General Meeting of Shareholders are an important right of shareholders. Please makesure to exercise your voting rights. Please see pages 7 to 9 for details.
- If you are attending the General Meeting of Shareholders:
Please submit the Voting Right Exercise Form at the reception desk upon arrival.
- If you are unable to attend the General Meeting of Shareholders:
Please exercise your voting rights in writing or via the Internet, etc.
Documents must arrive before noon on Monday, June 14, 2021.
From the viewpoint of preventing the spread of the novel coronavirus (COVID-19) infection, if you areattending the General Meeting of Shareholders, please pay close attention to the status of the spread of
the virus as of the date of the meeting and your physical condition. Also, please take appropriate
precautions to prevent infection, including wearing masks.
In addition, please understand that we will take infection prevention measures at the meeting.

CoverMessage from the CEO
To Shareholders
Tomoya Higashiura,
Representative Director and President
I would like to express our cordial appreciation for your continuous support and loyal patronage.
I would also like to take the opportunity of sending this Notice of the 12th Annual General Meeting of
Shareholders to offer a short greeting.
While the world has been buffeted by the COVID-19 pandemic since early 2020, the Company’s
resource recycling and environmental preservation businesses have continued operations in response to
demand from industrial and civic society and we were able to continue fulfilling the roles andresponsibilities that likened to the “veins of the human body.” As a result, with revenue of 164.7 billion
yen and operating profit of 25.1 billion yen, we achieved a record high for the fourth consecutive year.
The year-end dividend was decided to be 90 yen per share. While the new Mid-term Business Plan
started in April this year, we will make efforts to create a green society in the longer term by fully
utilizing digital technologies.
Recycling operations, which the Precious Metals business conducts in Japan and overseas, contribute tocyclical use of rare natural resources and beyond that, its sophisticated traceability system can provethat raw materials of those resources do not contribute to environmental pollution and human rights
issues while gold metals recycled from such raw materials are called “green gold,” which provide highadded value. Meanwhile, we have significantly increased production and sales of coins and bars madefrom precious metals made by the Company in North America and the high-quality Asahi brand isstarting to make inroads into the market. We will expand this type of product business worldwide.
As for the Environmental Preservation business, we will increase treatment capacity in stages throughcapital investment and improve profitability in terms of both treatment and management of industrial
waste by utilizing our strengths gained by treating various kinds of wastes across a wide area. In addition,
we would like to create opportunities for reducing the environmental load from the overall industry andaim to realize a low-carbon society by digitizing important and complicated management processes
ranging from waste emission through disposal.
As human society will need the SDGs to ensure its survival, social responsibility is becoming arequirement for companies under capitalism. The Company will contribute to realizing a sustainable
society by continuing to respond to such responsibilities in good faith through the main business and its
advancement. I hope that our shareholders will continue to give us their support.

1
Message from the CEO

Contents
 Notice of the 12th Annual General Meeting of Shareholders ........................................................... 5
 Reference Documents for General Meeting of Shareholders.......................................................... 10
Proposal 1: Partial Amendments to the Articles of Incorporation
Proposal 2: Election of Two (2) Directors (Excluding Directors Serving as the Audit and Supervisory
Committee Members)
Proposal 3: Election of Five (5) Directors Serving as the Audit and Supervisory Committee Members
Proposal 4: Determination of Amounts and the Content of Performance-Based Stock Compensation Plan
for Directors

Attached documents
 Business Report .......................................................................................................................... 27
 Consolidated Financial Statements ............................................................................................. 51
 Financial Statements ................................................................................................................... 55
 Audit Reports .............................................................................................................................. 58
 TOPICS........................................................................................................................................... 66

Documents below are disclosed on the Company’s website- Structure to ensure the appropriateness of business- Status of operation of structure to ensure the appropriateness of business- Notes to consolidated financial statements- Notes to non-consolidated financial statements
https://www.asahiholdings.com/

2
Contents

ASAHI WAY“Totally Committed to Protecting the Natural Environment and Preserving Resources”

Our Credo
We conserve limited natural resources, preserve the global environment, and contribute to therealization of a sustainable world.
Our Corporate Values
















Cooperation with stakeholders
We constantly seek to earn even greater trust from shareholders, customers, business partners,
employees, and local communities as we work to preserve the natural environment.
Corporate governance with a balance of protective and proactive measures
We boldly promote growth strategies and business reform while securing transparency in decisionmaking and properly managing risk.
No growth without profit
We realize long-term improvement of shareholder value by ensuring the entire group grows andis profitable.
Trusted corporate brandWe aim to be widely recognized as an exemplary corporate group and to build a brand that willbe trusted over many years.
Addressing diverse risks
We strive to minimize risks and avert disasters by taking daily safety measures in workplaces andby constantly working to prevent accidents.
Highly motivated employees
We promote work-life balance for employees and continuously improve working environments
and conditions.
Strong sense of mission and high ethical standards
We strive to be an organization where employees take pride in their own work and executives
maintain a strong sense of mission and high ethical standards.
Being a company of good people
We value good employees over the long-term; our vision of a “good employee” is a person who
is not self-centered and who contributes to mutual prosperity and the development of the business.

Our Employee Principles






Innovate and embrace challenges
Put safety first
Maintain high quality
Promptly report (especially bad news)
Build trust and connection

3
Group Philosophy

The Asahi Holdings Group Code of Conduct
1. We comply with all laws and regulations
2. We respect the dictates of social norms and our own conscience
3. We treat everyone equally, regardless of age, gender, nationality, race, religion, or othercharacteristics
4. We refrain from conducting any political or religious activities in the workplace
5. We treat customers with sincerity
6. We practice fair competition and optimal decision-making when selecting business partners
7. We respect the confidential information obtained through our work and avoid disclosing it
externally
8. We refrain from providing or receiving meals or gifts in pursuit of personal benefit
9. We act for the greater good, not for personal or affiliated parties’ gain
10. We focus on the actual sites, actual things, and actual facts

4Group Philosophy

Dear Shareholders:(Stock code: 5857)
May 25, 2021
4-17 Kano-cho 4-chome, Chuo-ku, Kobe-shi, Japan
Asahi Holdings, Inc.
Tomoya Higashiura,
Representative Director and President

Notice of the 12th Annual General Meeting of Shareholders
This is to inform you that the 12th Annual General Meeting of Shareholders of Asahi Holdings, Inc.
(hereinafter the “Company”) will be held at the following time and place.
Instead of attending the meeting in person, you are entitled to exercise your voting rights inwriting or by electronic method (the Internet, etc.). You are kindly requested to read the attachedreference documents and exercise your voting rights by noon on Monday, June 14, 2021, in
accordance with the instructions on the page 7 to 9.

1. Date and time:
2. Venue:

Details of the meeting
10:30 a.m. on Tuesday, June 15, 2021 (Reception will open at 10:00 a.m.)
KOBE PORTOPIA HOTEL
10-1, Minatojima Nakamachi 6-chome, Chuo-ku, Kobe-shi“Kairaku-no-ma,” basement floor, Main Building
Please understand that souvenirs for shareholders who attend the meeting
will not be provided.

3. Meeting Agenda
Items to be reported: 1) Business Report, the consolidated financial statements and the resultsof audits of the consolidated financial statements by the Accounting
Auditor and the Audit and Supervisory Committee for the 12th fiscal
term (April 1, 2020 through March 31, 2021)
2) Report on non-consolidated financial statements for the 12th fiscal
term (April 1, 2020 through March 31, 2021)
Items to be resolved:
Proposal 1: Partial Amendments to the Articles of Incorporation
Proposal 2: Election of Two (2) Directors (Excluding Directors Serving as the Audit andSupervisory Committee Members)
Proposal 3: Election of Five (5) Directors Serving as the Audit and Supervisory Committee
Members
Proposal 4: Determination of Amounts and the Content of Performance-Based Stock
Compensation Plan for Directors



If you attend the meeting, please submit the “Voting Right Exercise Form” at the reception desk
upon arrival.
Pursuant to the provisions of laws and regulations and the Articles of Incorporation of the5
Cover letter of convocation

Convocation Notice
Audit Reports

Financial Statements

Consolidated Financial
Statements

Business Report

Reference Documents for
General Meeting of ShareholdersCompany, of the documents to be disclosed, “Structure to ensure the appropriateness of business,”“Status of operation of structure to ensure the appropriateness of business,” “Notes toconsolidated financial statements,” and “Notes to non-consolidated financial statements” aredisclosed on the Company’s website (https://www.asahiholdings.com/) and therefore are notincluded in this Notice and its Appendix. Accordingly, this Notice and its Appendix constitutepart of the business report and financial statements audited by the Audit and Supervisory
Committee and Accounting Auditor when preparing the audit report and accounting audit report,
respectively.
Please note that any modifications to the business report, the financial statements and/or thereference documents will be posted on our website (https://www.asahiholdings.com/).

6
Cover letter of convocation

Guide to Exercising Voting Rights
If you are attending the General Meeting of Shareholders:
Please submit the enclosed Voting Right Exercise Form at the reception desk upon arrival.
In addition, please also bring this Notice.
If you are unable to attend the General Meeting of Shareholders:● Exercising your voting rights in writing (Voting Right Exercise Form)
Please indicate your vote for or against each proposal on the enclosed Voting Right Exercise Formand return the Form by mailing it such that it arrives by the deadline for exercising voting rights
below. If a vote for or against is not indicated for any proposal when exercising voting rights inwriting (Voting Right Exercise Form), we will treat it as an indication of approval of the proposal.
● Exercising your voting rights via the Internet
Please refer to the “Procedure for Exercising Voting Rights via the Internet” on the next page, andinput your vote for or against each proposal by the deadline for exercising voting rights below.
Deadline for Exercising Voting Rights: noon on Monday, June 14, 2021
Treatment of Voting Rights Exercised Multiple Times
If you have exercised your voting rights both in writing and via the Internet, those exercised
via the Internet will be considered as valid.
If you have exercised your voting rights multiple times on the Internet, the final vote will beconsidered as valid. If you have exercised your voting rights multiple times with computers,
smartphones and/or mobile phones, the final vote cast will be considered as valid.
Electronic Voting Platform for Institutional Investors
Nominee shareholders including banks specializing in asset and trust management/custody (including
standing proxy) may use with prior application the “Electronic Voting Platform” operated by ICJ Inc.
established by Tokyo Stock Exchange, Inc., and other entities, as a means to exercise their voting
rights electronically and participate in the General Meeting of Shareholders of the Company.

7
Guide to Exercising Voting Rights

3. Treatment of Voting Rights Exercised Multiple Times(1) If you have exercised your voting rights both in writing and via the Internet, those exercised via
the Internet will be considered as valid.
(2) If you have exercised your voting rights multiple times on the Internet, the final vote will beconsidered as valid. If you have exercised your voting rights multiple times with computers,
smartphones and/or mobile phones, the final vote cast will be considered as valid.

8
Procedure for Exercising Voting Rights via the Internet

Reference Documents for
General Meeting of Shareholders
Business Report
Consolidated Financial
Statements

2. Exercising Your Voting Rights via the Internet(1) By computers or mobile phones- At the Voting Rights Exercise Web Site (https://evote.tr.mufg.jp/), use the “log-in ID” and“temporary password” given on the Voting Right Exercise Form and follow the on-screen
instructions to indicate your approval or disapproval of each proposal.
- To protect against illegal access by persons other than qualified shareholders (“spoofing”) andthe manipulation of voting details, please be aware that shareholders using the site will be asked
to change their “temporary password.”- Whenever a meeting of shareholders is convened, new “log-in IDs” and “temporary passwords”
will be issued.
(2) By smartphones- By scanning the “QR code for log-in” given on the Voting Right Exercise Form using
smartphones, you can automatically access the Voting Rights Exercise Web Site and exercise
your voting right. (There is no need to enter the “log-in ID” and “temporary password.”)- For security reasons, the exercise of voting rights through QR code is available only once.
For the second time and afterwards, you will need to enter the “log-in ID” and “temporary
password” even when scanning QR code.
- You may not be able to log in through QR code depending on a model of smartphone. When you
cannot log in through QR code, please exercise your voting rights by computers or mobile phones
as indicated in 2. (1) above.
*QR Code is a registered trademark of DENSO WAVE CORPORATION.

Financial Statements

1. Voting Rights Exercise Web Site
(1) The exercise of voting rights via the Internet is possible only by accessing the Voting Rights
Exercise Web Site (https://evote.tr.mufg.jp/) designated by the Company either from a computer,a smartphone or a mobile phone. (However, this Web site is not available from 2:00 a.m. to 5:00
a.m. daily.)(2) The exercise of voting rights using computers or smartphones may be disabled by operating
environments, including the use of a firewall when accessing the Internet, the use of antivirus
software, the use of a proxy server and/or if you have not designated the use of encryptedtransmission (TLS transmission).
(3) To preserve security, you cannot exercise voting rights through a model of mobile phone that
does not allow TLS transmission or transmission of the phone ID information.
(4) Although we will accept the exercise of voting rights via the Internet until noon on Monday,
June 14, 2021, we recommend voting as early as possible. If you have any questions, pleasecontact our Help Desk.

Audit Reports

If you intend to exercise your voting rights via the Internet, please pay attention to the following notes.
If you are attending the meeting, no procedures to exercise voting rights in writing (Voting Right
Exercise Form) or via the Internet are necessary.

Convocation Notice

Procedure for Exercising Voting Rights via the Internet

4. Costs Incurred in Accessing the Voting Rights Exercise Web Site
The costs incurred when accessing the Voting Rights Exercise Web Site such as Internet access fees
will be the responsibility of the shareholder. Similarly, fees required to use mobile phones, such as
packet transmission fees, will also be the responsibility of the shareholder.
5. Method of Receiving a Convocation Notice
Beginning with the next meeting of shareholders, shareholders will be given the option of receiving
their convocation notices via email. If you wish to receive your convocation notices in this manner,
please use a computer or a smartphone to access the Voting Rights Exercise Web Site and take theprocedures shown on the screen. (You will not be able to access the site from a mobile phone.)

For inquiries about the system or other matters, contact:
Help Desk for voting rights exercise via the Internet, Mitsubishi UFJ Trust and Banking Corporation
Phone: 0120-173-027 (Toll Free within Japan) (available from 9:00 a.m. to 9:00 p.m.)

9
Procedure for Exercising Voting Rights via the Internet

1. Reasons for the amendment(1) We propose an amendment to Article 2 of the current Articles of Incorporation to clarify
business details in accordance with the current state of the Company’s business.
(2) To maintain and enhance independent and objective supervisory functions of management,
we propose an amendment to Article 13 and Article 21 of the current Articles ofIncorporation that currently states that only a Representative Director can become achairman of the Annual General Meeting of Shareholders and the Board of Directors, toenable any Director other than Representative Director to become a chairman.
2. Details of amendments
We propose that the current articles be partly amended as described in the draft below. The
proposed partial amendments to the Articles of Incorporation shall take effect upon the
conclusion of this Annual General Meeting of Shareholders.
Current Articles of Incorporation(Amended portions are underlined)
Draft of Amended Articles of Incorporation

CHAPTER 1.
GENERAL PROVISIONSCHAPTER 1.
GENERAL PROVISIONS

Audit Reports

Financial Statements

Consolidated Financial
Statements(Purpose)(Purpose)
Article 2: The purpose of the Company shall
Article 2: <Same as the present>
be to control or manage the businessactivities of companies engaging in
the following or similar types ofbusiness through holding shares or
equity of such companies.
1. to 14. <Omitted>
1. to 14. <Same as the present>
15. General and specified worker<Deleted>
dispatching business based on the
Act for Securing the Proper
Operation of Worker Dispatching
Undertakings and Improved
Working Conditions for Dispatched
Workers
16. Fee-charging employment placement<Deleted>business based on the Employment
Security Act
17. Antiques business
15 Antiques business18. Sales and contracts for installation<Deleted>
work of house equipment andinterior and exterior products
10
Reference Documents for General Meeting of Shareholders

Business Report

Proposal 1 Partial Amendments to the Articles of Incorporation

Reference Documents for
General Meeting of Shareholders

Convocation Notice

Reference Documents for General Meeting of Shareholders

Current Articles of Incorporation
19. Assembly and processing of gas
equipment and parts and automobileparts
20. Any and all businesses incidental toeach of the foregoing

Draft of Amended Articles of Incorporation<Deleted>

16. Any and all businesses incidental toeach of the foregoing

CHAPTER 3.
GENERAL MEETING OF SHAREHOLDERS

CHAPTER 3.
GENERAL MEETING OF SHAREHOLDERS(Convener and Chairman)
Article 13: Unless otherwise specified by laws
and regulations, the Representative
Director determined by the Board of
Directors based on a resolution of
the Board of Directors meeting shallconvene the general meeting ofshareholders and act as chairman
thereof.
2. In the event that the Representative
Director determined by the Board of
Directors is unable to act, another
Director, determined in accordancewith an order of priority previously
determined by the Board of
Directors, shall act as convener andchairman.

(Convener and Chairman)
Article 13: Unless otherwise specified by laws
and regulations, the Director
determined by the Board of
Directors based on a resolution of
the Board of Directors meeting shallconvene the general meeting ofshareholders and act as chairman
thereof.
2. In the event that the Director
determined by the preceding
paragraph is unable to act, another
Director, determined in accordancewith an order of priority previously
determined by the Board of
Directors, shall act as convener andchairman.

CHAPTER 4.
DIRECTORS AND BOARD OF
DIRECTORS, AS WELL AS AUDIT AND
SUPERVISORY COMMITTEE

CHAPTER 4.
DIRECTORS AND BOARD OF
DIRECTORS, AS WELL AS AUDIT AND
SUPERVISORY COMMITTEE(Convener and Chairman of the Meeting)
Article 21. Unless otherwise specified by laws
and regulations, the Representative
Director determined by the Board of
Directors shall convene the Board of
Directors meeting and act aschairman thereof.

(Convener and Chairman of the Meeting)
Article 21. Unless otherwise specified by laws
and regulations, the Director
determined by the Board of
Directors based on a resolution of
the Board of Directors shall convene
the Board of Directors meeting andact as chairman thereof.

11
Reference Documents for General Meeting of Shareholders

Reference Documents for
General Meeting of Shareholders

Convocation Notice

Draft of Amended Articles of Incorporation
2. In the event that the Director
determined by the preceding
paragraph is unable to act, another
Director, determined in accordancewith an order of priority previously
determined by the Board of
Directors, shall act as convener andchairman.

Audit Reports

Financial Statements

Consolidated Financial
Statements

Business Report

Current Articles of Incorporation
2. In the event that the Representative
Director determined by the Board of
Directors is unable to act, another
Director, determined in accordancewith an order of priority previously
determined by the Board of
Directors, shall act as convener andchairman.

12
Reference Documents for General Meeting of Shareholders

Proposal 2 Election of Two (2) Directors (Excluding Directors Serving as the Audit andSupervisory Committee Members)
The terms of office of all four (4) Directors (excluding Directors serving as the Audit andSupervisory Committee Members; the same applies hereinafter in this proposal) will expire at theclose of this Annual General Meeting of Shareholders.
Accordingly, we propose the election of two (2) Directors.
The Audit and Supervisory Committee has expressed no opinion on this proposal.
The candidates for Director to be elected are as follows.
Candidate

Name

Position and Duties at the Company

No.

(Date of birth)(Important concurrent assignment)

Attendance at theBoard of Directors
meeting

Director and Chairman
1

To be

Mitsuharu Terayama

Reelected(March 10, 1940)[Significant concurrent duties]

7 out of 7 meetings

None
Representative Director and
2

To be

Tomoya Higashiura

President

Reelected(January 26, 1961)[Significant concurrent duties]

7 out of 7 meetings
Director of Asahi Pretec Corp.

13
Reference Documents for General Meeting of Shareholders

July 1973:

Joined Asahi Pretec Corp.

October 1973: Appointed as Senior Managing
Director of Asahi Pretec Corp.

Mitsuharu Terayama(March 10, 1940)
To be ReelectedAppointed as Representative
Director and President of Asahi
Pretec Corp.

April 2009:

Appointed as Representative
Director and President of Asahi
Holdings, Inc.

April 2011:

Appointed as CEO & COO of
Asahi Holdings, Inc.

April 2011:

Appointed as Chairman and
Director of Asahi Pretec Corp.

June 2012:

Appointed as CEO of Asahi
Holdings, Inc.

June 2014:

Appointed as President & CEO of
Asahi Holdings, Inc.

April 2018:

Appointed as Chairman & CEO of
Asahi Holdings, Inc.

June 2020:

Appointed as Director andChairman of Asahi Holdings, Inc.
(to present)

1,774,290
sharesConsolidated Financial
Statements

1

May 1981:[Significant concurrent duties]
Attendance at the Board of Directors meeting: 7 out of 7 meetings(Reason for nomination as a candidate)
Mr. Terayama engages in the management of the Group as a Director of the Company. The
Company therefore requests his election as a Director of the Company based on its judgment that
his continued tenure of office as a Director is appropriate because his past performance of having
driven the entire Group with strong leadership, as well as his deep insight and abundant experiencein overall management, would contribute to the further functional reinforcement of the Board of
Directors and the corporate governance of the entire Group.

14
Reference Documents for General Meeting of Shareholders

Convocation Notice

Joined KURARAY CO., LTD.

Reference Documents for
General Meeting of Shareholders

April 1964:

Ownershipof Shares

Business Report

Career, Position and Duties at the Company

Financial Statements

Name(Date of birth)

Audit Reports

CandidateNo.

Candidate
No.

Name
(Date of birth)

Career, Position and Duties at the Company
April 1984:

Ownershipof Shares

Joined NEC Corporation

February 2001: Joined Asahi Pretec Corp.

2
Tomoya Higashiura(January 26, 1961)
To be Reelected

June 2006:

Appointed as Director andGeneral Manager of
Administration Division of Asahi
Pretec Corp.

April 2009:

Appointed as Director andGeneral Manager of Corporate
Development & Administration
Division of Asahi Holdings, Inc.

June 2010:

Appointed as Director andGeneral Manager of Precious
Metal Recycling Business
Division of Asahi Pretec Corp.

April 2011:

Appointed as Director of Asahi
Holdings, Inc.

June 2014:

Appointed as Representative
Director & President of Asahi
Pretec Corp.

April 2017:

Appointed as Representative
Director and President of Asahi
Americas Holdings, Inc.

April 2018:

Appointed as Representative
Director and President of Asahi
Holdings, Inc. (to present)

April 2018:

Appointed as Director of Asahi
Pretec Corp. (to present)

50,000shares[Significant concurrent duties]
Director of Asahi Pretec Corp.
Attendance at the Board of Directors meeting: 7 out of 7 meetings(Reason for nomination as a candidate)
Mr. Higashiura engages in the management of the Group as a Representative Director of theCompany and as a Director of the Group companies, having deep insight and abundant experiencein overall management. The Company therefore requests his election as a Director of the Company
based on its judgment that his continued tenure of office as a Director is appropriate because hisabundant experience in the precious metal business and its global expansion would contribute to thesustainable enhancement of the corporate value of the Group.
(Notes) 1. There are no special interests between each candidate and the Company.
2. The Company conducted a stock split with a ratio of two-for-one on April 1, 2021.
Accordingly, Ownership of Shares is based on the number of the shares after thestock split.
15
Reference Documents for General Meeting of Shareholders

Convocation Notice
Reference Documents for
General Meeting of Shareholders
Audit Reports

Financial Statements

Consolidated Financial
Statements

Business Report

3. The Company has concluded a directors and officers liability insurance agreement
provided for in Article 430-3, paragraph 1 of the Companies Act with an insurancecompany. The insurance agreement covers damages that may arise when the insured
including the Company’s Directors assume liability for the execution of their duties
or receives a claim related to the pursuit of such liability. If the candidates are elected
and appointed as Director, each of them will continue to be insured under the
insurance agreement. Also, the Company plans to renew the insurance agreementwith the same contents at the next renewal date.

16
Reference Documents for General Meeting of Shareholders

Proposal 3 Election of Five (5) Directors Serving as the Audit and Supervisory Committee
Members
The terms of office of all four (4) Directors serving as the Audit and Supervisory Committee
Members will expire at the close of this Annual General Meeting of Shareholders.
Accordingly, we propose the election of five (5) Directors Serving as the Audit and Supervisory
Committee Members.
This proposal has already acquired the approval of the Audit and Supervisory Committee.
The candidates for Director serving as the Audit and Supervisory Committee Members to beelected are as follows.

Candidate

Name

Position and Duties at the Company

No.

(Date of birth)(Important concurrent assignment)

Attendance at theBoard of Directors
and the Audit andSupervisory
Committee meeting

Outside Director (Audit andSupervisory Committee Member)
1

7 out of 7 meetings

To be

Yuji Kimura[Significant concurrent duties]

Reelected(July 23, 1955)

13 out of 13

Executive Director and General

meetings

Manager of Tokyo Office, Global
Environment Centre Foundation
Outside Director (Audit andSupervisory Committee Member)2

7 out of 7 meetings

To be

Kyoko Kanazawa[Significant concurrent duties]

Reelected(October 11, 1965)

13 out of 13

Lawyermeetings

Outside Director of Tokushu Tokai
Paper Co., Ltd.
Outside Director (Audit and
3

To be

Yoshinori Hara

Reelected(July 21, 1958)

Supervisory Committee Member)

7 out of 7 meetings[Significant concurrent duties]

11 out of 13

Professor of Graduate School ofmeetings

Management, Kyoto University
Miyoko Kimura
4

Newly
Elected(current surname:[Significant concurrent duties]-

Sakagawa)

Director in charge of branding,-(June 12, 1964)

designing and supplier relations of
ASKUL Corporation
General Manager of Audit and

5

Newly

Mitsutoshi Kagimoto

Supervisory Committee Secretariat-

Elected(June 15, 1958)[Significant concurrent duties]

-

-

17
Reference Documents for General Meeting of Shareholders

Joined the Environment Agency

July 2006:

Appointed as General Manager ofIndustrial Waste Management
Division, Waste Management andRecycling Department of the
Ministry of the Environment

August 2010:

Appointed as Director-General of
Kyoto Mechanism Business
Promotion Department of New
Energy and Industrial Technology
Development Organization

July 2012:

Appointed as Director-General of
Hakodate Customs, Ministry of
Finance Japan

1

June 2017:

Business Report

October 2014: Appointed as Executive Director
and General Manager of Tokyo
Office, Global Environment
Centre Foundation (to present)
Appointed as Outside Director(serving as Audit and Supervisory
Committee Member) of Asahi
Holdings, Inc. (to present)

Consolidated Financial
Statements

Yuji Kimura(July 23, 1955)
To be Reelected

2,000
shares[Significant concurrent duties]
Executive Director and General Manager of Tokyo
Office, Global Environment Centre Foundation
Attendance at the Board of Directors meeting: 7 out of 7 meetings
Attendance at the Audit and Supervisory Committee meeting: 13 out of 13 meetings(Reason for nomination as a candidate for Outside Director and his expected roles)
Mr. Kimura has professional expertise in environmental preservation and abundant experience
including organizational management as an executive officer of the Ministry of the Environment.
Through using such expertise and experience, he provided supervision and advice to ensure theappropriateness and properness of decision-making of the Company’s Board of Directors from an
independent standpoint and the Company expects him to continue to perform these roles. Although
he has no experience of being engaged in corporate management other than serving as an outside
director, he has appropriately performed his duties as Outside Director for the above reason andtherefore, the Company nominated him as a candidate for Outside Director.

18
Reference Documents for General Meeting of Shareholders

Convocation Notice

April 1979:

Ownershipof Shares

Reference Documents for
General Meeting of Shareholders

Career, Position and Duties at the Company

Financial Statements

Name(Date of birth)

Audit Reports

CandidateNo.

Candidate
No.

Name
(Date of birth)

Career, Position and Duties at the Company
April 1989:

Joined FUJI RESEARCHINSTITUTE CORPORATION

April 2000:

Registered as lawyer

April 2000:

Joined Kazama & Hata Law Office(currently Hata & Co. Law
Offices) (to present)

June 2017:

Appointed as Outside Director(serving as Audit and Supervisory
Committee Member) of Asahi
Holdings, Inc. (to present)

2
Kyoko Kanazawa(October 11, 1965)
To be Reelected

June 2018:

Ownershipof Shares- sharesAppointed as Outside Director ofTokushu Tokai Paper Co., Ltd. (topresent)[Significant concurrent duties]
LawyerOutside Director of Tokushu Tokai Paper Co., Ltd.
Attendance at the Board of Directors meeting: 7 out of 7 meetings
Attendance at the Audit and Supervisory Committee meeting: 13 out of 13 meetings(Reason for nomination as a candidate for Outside Director and her expected roles)
Ms. Kanazawa has highly professional expertise concerning laws as a lawyer and experience as an
outside director of the other company. Through using such expertise and experience, she provided
supervision and advice to ensure the appropriateness and properness of decision-making of theCompany’s Board of Directors from an independent standpoint and the Company expects her tocontinue to perform these roles. Although she has no experience of being engaged in corporate
management other than serving as an outside director, she has appropriately performed her duties as
Outside Director for the above reason and therefore, the Company nominated her as a candidate for
Outside Director.

19
Reference Documents for General Meeting of Shareholders

August 1990:

Appointed as Visiting Scholar at
Stanford University

July 2004:

Appointed as Manager of NEC
Kansai Research Laboratories

April 2006:

Appointed as Professor of
Graduate School of Management,
Kyoto University (to present)

April 2018:

Appointed as Dean of Graduate
School of Management, Kyoto
University

June 2019:

Appointed as Outside Director(serving as Audit and Supervisory
Committee Member) of Asahi
Holdings, Inc. (to present)- sharesConvocation Notice

Joined NEC Corporation

Reference Documents for
General Meeting of Shareholders

Yoshinori Hara
(July 21, 1958)
To be Reelected

April 1983:

Ownershipof Shares

Business Report3

Career, Position and Duties at the Company[Significant concurrent duties]
Professor of Graduate School of Management,
Kyoto University
Attendance at the Board of Directors meeting: 7 out of 7 meetings
Attendance at the Audit and Supervisory Committee meeting: 11 out of 13 meetings

Audit Reports(Reason for nomination as a candidate for Outside Director and his expected roles)
Mr. Hara has professional expertise and practical experience concerning development of service
management personnel, through his involvement in University management as a former Dean of
Graduate School of Management (MBA), Kyoto University, and as a Professor at the
aforementioned university graduate school. Through using such expertise and experience, heprovided supervision and advice to ensure the appropriateness and properness of decision-makingof the Company’s Board of Directors from an independent standpoint and the Company expects
him to continue to perform these roles. Although he has no experience of being engaged incorporate management other than serving as an outside director, he has appropriately performed his
duties as Outside Director for the above reason and therefore, the Company nominated him as a
candidate for Outside Director.

Consolidated Financial
Statements

Name(Date of birth)

Financial Statements

CandidateNo.

20
Reference Documents for General Meeting of Shareholders

Candidate
No.

Name
(Date of birth)

Career, Position and Duties at the Company
April 1988:

Joined PLUS Corporation

May 1999:

Joined ASKUL Corporation

Ownershipof Shares

February 2010: Appointed as Representative
Director and President of
ASMARU Corporation

4
Miyoko Kimura(current surname:Sakagawa)(June 12, 1964)
Newly Elected

May 2017:

Appointed as Chief Marketing
Officer (CMO), Executive Officer,
Executive Officer of Life Creation
Unit and Value Creation Center
Unit, B-to-C Company of ASKULCorporation

March 2020:

Appointed as Director, Supervisorof Merchandising Unit, Chief
Marketing Officer (CMO),
Executive Officer of ASKULCorporation

May 2021:

Appointed as Director in charge ofbranding, designing and supplier
relations of ASKUL Corporation(to present)- shares[Significant concurrent duties]
Director in charge of branding, designing andsupplier relations of ASKUL Corporation
Attendance at the Board of Directors meeting: Attendance at the Audit and Supervisory Committee meeting: (Reason for nomination as a candidate for Outside Director and her expected roles)
Ms. Kimura has been engaged in business expansion of ASKUL Corporation as a Director, after
launching the ASKUL business as one of its founders and serving as a Representative Director of
ASMARU Corporation which was a subsidiary of ASKUL Corporation. The Company expects that
she will prove supervision and advice to ensure the appropriateness and properness of decisionmaking of the Company’s Board of Directors from an independent standpoint by using herabundant business experience as corporate management and her knowledge and actual experiencein the marketing field and therefore, nominated her as a candidate for Outside Director.

21
Reference Documents for General Meeting of Shareholders

Joined TEIJIN LIMITED

February 2006: Joined Asahi Pretec Corp.

5
Mitsutoshi Kagimoto(June 15, 1958)
Newly Elected

March 2009:

Appointed as Assistant General
Manager of Kitakanto Office ofAsahi Pretec Corp.

December2009:

Appointed as Representative
Director and President of JW Glass
Recycling Co., Ltd.

April 2013:

Appointed as General Manager ofPurchase Division of INTER
CENTRAL, INC.

2000
sharesBusiness Report

October 2015: Appointed as General Manager ofAudit and Supervisory Committee
Secretariat of Asahi Holdings, Inc.
(to present)

Convocation Notice

April 1984:

Ownershipof Shares

Reference Documents for
General Meeting of Shareholders

Career, Position and Duties at the Company[Significant concurrent duties]
Attendance at the Board of Directors meeting: Attendance at the Audit and Supervisory Committee meeting: -Audit Reports(Reason for nomination as a candidate)
Mr. Kagimoto has been engaged in the management of the Group for many years as an employee of
the Company and a Representative Director of the Group company. Furthermore, he has been
engaged in auditing of the Company as General Manager of the Audit and Supervisory Committee
Secretariat of the Company, with abundant insight and experience concerning the Company’sbusiness.
The Company expects that he will provide useful opinions based on his abundant insight andexperience and therefore, determined that he is appropriate as Director serving as the Audit andSupervisory Committee Member.

Consolidated Financial
Statements

Name(Date of birth)

Financial Statements

CandidateNo.

22
Reference Documents for General Meeting of Shareholders

(Notes) 1. There are no special interests between each candidate and the Company.
2. The Company conducted a stock split with a ratio of two-for-one on April 1, 2021.
Therefore, Ownership of Shares is based on the number of the shares after the stock
split.
3. Yuji Kimura, Kyoko Kanazawa, Yoshinori Hara and Miyoko Kimura are candidates
for Outside Director.
4. The term of office of Yuji Kimura and Kyoko Kanazawa as Outside Director serving
as the Audit and Supervisory Committee Member will be four years at the close ofthis Annual General Meeting of Shareholders. The term of office of Yoshinori Hara
as Outside Director serving as the Audit and Supervisory Committee Member will
be two years at the close of this Annual General Meeting of Shareholders.
5. The Company has entered into a contract with each of Yuji Kimura, Kyoko
Kanazawa and Yoshinori Hara that limits their liability for compensation fordamages set forth in Article 423, Paragraph 1, of the Companies Act underprovisions set forth in Article 427, Paragraph 1, of the same Act. The limit amountof the liability for compensation for damages under such a contract is determined tobe the minimum liability amount stipulated in Article 425, Paragraph 1, of theCompanies Act. If Yuji Kimura, Kyoko Kanazawa and Yoshinori Hara are reelected,
the Company intends to continue said contract with each of them. If Miyoko Kimura
and Mitsutoshi Kagimoto are newly elected, the Company intends to enter into thesame contract with each of them to limit their liability for compensation for damages.
6. The Company has concluded a directors and officers liability insurance agreement
provided for in Article 430-3, paragraph 1 of the Companies Act with an insurancecompany. The insurance agreement covers damages that may arise when the insured
including the Company’s Directors serving as the Audit and Supervisory Committee
Members assume liability for the execution of their duties or receives a claim related
to the pursuit of such liability. If the candidates are elected and appointed as Director
serving as the Audit and Supervisory Committee Member, each of them will continue
to be insured under the insurance agreement. Also, the Company plans to renew theinsurance agreement with the same contents at the next renewal date.
7. The Company has notified the Tokyo Stock Exchange that Yuji Kimura, Kyoko
Kanazawa and Yoshinori Hara are Independent Directors as per the provisions of theTokyo Stock Exchange, and they will continue to be Independent Directors if this
proposal is approved and they assume the position of Outside Director. Miyoko
Kimura satisfies the requirements of an Independent Director as per the provisionsof the Tokyo Stock Exchange. Accordingly, if this proposal is approved and she
assumes the position of Outside Director, the Company intends to newly notify the
Tokyo Stock Exchange that she is an Independent Director.

23
Reference Documents for General Meeting of Shareholders

(1)Details of the Compensation Plan
The Compensation Plan is a stock compensation plan, in which the Company’s shares are
acquired through a trust using an amount of compensation for Directors contributed by theCompany as funds, and the Company’s shares are issued to Directors in accordance with theirpositions and the achievement of business performance targets as well as individual evaluation.

(2)

Maximum amount of funds to be contributed by the Company
When continuing the Compensation Plan, the Company will contribute funds, of which the
maximum amount is 330 million yen, for compensation for Directors for the three fiscal years
from the fiscal year ending March 31, 2022 to the fiscal year ending March 31, 2024
(hereinafter the “Applicable Period”), thereby establishing a trust (hereinafter the “Trust”)
with a three-year trust period during which the Company’s share are issued with an upper
limit of 120,000 shares for each Applicable Period, with Directors who meet the criteria forbeneficiaries as beneficiaries.
Meanwhile, at the expiry of the trust period of the Trust, the Trust may be continued througha revision to the trust agreement and additional trust, in lieu of establishing a new trust. In
such case, the trust period of the Trust shall be extended by three years. If the trust period is
extended, the subsequent three fiscal years shall be the Applicable Period. The Company shallmake additional contributions within 330 million yen for each extended period and continue
to grant points to Directors, while the Trust will continue to issue the Company’s shares during
the extended trust period. However, if, in the case of making such additional contributions,the Company’s shares (excluding the Company’s shares corresponding to the points whichwere already granted but not yet issued) and money (hereinafter, collectively the “Remaining
Shares, etc.”) remain in the trust assets at the time of extension, the total amount of Remaining
24

Reference Documents for General Meeting of Shareholders

Convocation Notice

Amounts and the Content of the Remuneration in the Compensation Plan

Reference Documents for
General Meeting of Shareholders

2.

Business Report

Reasons for the Proposal
A performance-based stock compensation plan (hereinafter the “Compensation Plan”) for
Directors of the Company (excluding Directors serving as the Audit and Supervisory
Committee Members and Outside Directors; the same applies hereinafter in this proposal)
was approved at the 6th Annual General Meeting of Shareholders held on June 16, 2015 andat the 9th Annual General Meeting of Shareholders held on June 19, 2018 and we propose thecontinuation of the Compensation Plan, with changes to the maximum amount of funds to becontributed, the maximum number of shares to be issued, etc. as set forth below. The purposeof the Compensation Plan is to increase the awareness of Directors of the Company (excluding
Directors serving as the Audit and Supervisory Committee Members and Outside Directors)of contributing to enhancing the Group’s business performance and corporate value and we
consider the continuation of the Compensation Plan and the partial changes to be appropriate.
The number of Directors eligible for the Compensation Plan will be two (2) Directors if
Proposal 2 “Election of Two (2) Directors (Excluding Directors Serving as the Audit andSupervisory Committee Members)” is approved and resolved as originally proposed.

Consolidated Financial
Statements

1.

Financial Statements

Determination of Amounts and the Content of Performance-Based Stock
Compensation Plan for Directors

Audit Reports

Proposal 4

Shares, etc. and additional money contributed by the Company shall be within 330 million
yen.
(3)

Calculation method and upper limit of the Company’s shares to be issued to Directors
In May of every year during the trust period, in principle, points will be awarded to Directors
in accordance with their position in the fiscal year ending March 31 of that year and theachievement of target consolidated operating profit as well as individual evaluations in eachfiscal year, and shares shall be issued according to the accumulated number of points on May
31 immediately after the end of the Applicable Period.
One point will equate to one share of the Company’s shares, and if it is recognized that an
adjustment in the points is fair and impartial due to stock splits, mergers, etc. of theCompany’s shares, an adjustment to the number of the Company’s shares per point can bemade, in accordance with the split ratio, consolidation ratio, etc.
Furthermore, the upper limit of the total number of points that Directors may be awarded per
fiscal year shall be 40,000 points, and the maximum number of the Company’s shares to beissued to Directors during the Applicable Period shall be 120,000 shares.
● Formula for calculation (number of points per fiscal year)“Base points” as described in 1) below  “performance-based coefficient” as describedin 2) below  “evaluation coefficient*” specified in the Regulations Concerning Stock
Issuance

1) Base points
The number of base points granted to Directors during applicable fiscal years is as shown
below.
Position of Director

Number of base points

Director of the Company

6,4002) Performance-based coefficient
The performance-based coefficient shall be as follows, in accordance with the achievement
ratio of “consolidated operating profit” in each fiscal year.
Business performance target
Performance-based coefficientachievement ratio
100% or more
1.0
50% or more
0.5
Below 50%0* The “Evaluation coefficient” is decided based on individual evaluations of Directors inaccordance with the Regulations Concerning Stock Issuance.

25
Reference Documents for General Meeting of Shareholders

Other details of the Compensation Plan
Other details related to the Compensation Plan shall be determined by the Board of Directors
each time the Trust is established, the trust agreement is modified, and additional
contributions to the Trust are made.

Convocation Notice(5)

Reference Documents for
General Meeting of Shareholders

Method and timing of issuance of the Company’s shares to Directors
A number of the Company’s shares calculated as described in the above item (3) will be issued
by the Trust in August immediately after the Applicable Period expires to the Directors whomeet the criteria for beneficiaries.

Audit Reports

Financial Statements

Consolidated Financial
Statements

Business Report(4)26
Reference Documents for General Meeting of Shareholders

Attached documents
Business Report (April 1, 2020 through March 31, 2021)
1. Current Status of the Group(1) Status of business for the fiscal year
1) Circumstances and results of business
The Japanese economy continued to be in an extremely difficult situation during the fiscal
year under review due to the global spread of the novel coronavirus disease (COVID-19).
Although the economy showed some signs of recovery due to the phased resumption of
economic activities and the effects of the government’s economic measures, the futureremains uncertain due to the situation of reemergence of infections and the lack of prospects
for when the COVID-19 crisis will subside.
Under these conditions, the Group’s results in each business segment were as follows.
Precious Metals business
Revenue: 144,795 million yen (up 27.3% YOY)
Revenue and operating profit in precious metal recycling business in Japan, South Korea
and Malaysia increased from the previous year, thanks to the rise in precious metal prices aswell as market share gains in all our business areas. Also, revenue and operating profit inprecious metal refining business in North America expanded from a year before thanks tosignificant expansion in product processing and sales as well as financial transactions. As aresult, revenue and operating profit in this segment increased significantly from the previous
year.
Environmental Preservation business
Revenue: 19,981 million yen (down 3.6% YOY)
Although industrial production activities are recovering after the stagnation caused by
COVID-19, revenue in this segment decreased from the previous year due to a generaldecrease in industrial waste. Operating profit remained at the same level as in the previous
year due to maintaining the utilization rate at the Company’s facilities, increasing the priceof processing and other factors, but it decreased compared to the previous year due to therecording of losses on disposal and loss on sales associated with the disposal of unnecessary
equipment.
As a result of the above, revenue during the fiscal year was 164,776 million yen, a yearon-year increase of 29,213 million yen (+21.5 percent). Operating profit was 25,126 million
yen, a year-on-year increase of 7,115 million yen (+39.5 percent). Profit before tax was
26,136 million yen, a year-on-year increase of 8,486 million yen (+48.1 percent). Profit was
25,725 million yen, a year-on-year increase of 15,879 million yen (+161.3 percent). Profit
attributable to owners of parent was therefore 25,725 million yen, an increase of 15,879
million yen (+161.3 percent) year-on-year, which are all record highs. By segment, revenue
in the Precious Metals business was 144,795 million yen, a year-on-year increase of 31,039
million yen (+27.3 percent). In the Environmental Preservation business, revenue was 19,981
million yen, a year-on-year decrease of 735 million yen (-3.6 percent).
27
Status of business for the fiscal year

144,795

87.9

27.3

24,037

19,981

12.1

(3.6)

3,833

164,776

100.0

21.5

(2,743)25,126

Revenue
Operating Profit
ROE

164,776 million yen
25,126 million yen
30.8%

Operating Profit(Millions of yen)

Up 21.5% YOY
Up 39.5% YOY
Up 16.4% YOY2) Capital expenditure
Capital expenditure made in the fiscal year totaled 5,314 million yen. The main expenditure
was an investment in buildings, machinery and equipment.
3) Financing
Asahi Refining USA Inc., a consolidated subsidiary of the Company, issued bonds as follows
to finance capital expenditure for building up precious metal refining facilities in North
America and working capital for expanding procurement of precious metals, mainly foradvance trading in the North America region:
Date ofRedemption
Company name
Type of bonds
Issue amountissuancedate
Asahi Refining
Unsecured
201 million
March 15, 2021
March 16, 2026
USA Inc.
bonds
US dollars4) Assignment, absorption-type split and incorporation-type split of businessNot applicable for the fiscal year5) Acquisition of the business of other companies
Not applicable for the fiscal year6) Succession of rights and obligations pertaining to the business of other corporations,etc., through an absorption-type merger or an absorption-type split
Not applicable for the fiscal year7) Acquisition or disposal of shares or other equity or share acquisition rights of othercompanies
As of March 31, 2021, all shares of INTER CENTRAL, INC., a consolidated subsidiary of
the Company, were transferred to OTEC Corporation.

28
Status of business for the fiscal year

Reference Documents for
General Meeting of Shareholders

YOY change(%)

Business Report

Ratio (%)

Consolidated Financial
Statements

Precious Metals
business
Environmental
Preservation business
Other
Total

Revenue(Millions of yen)

Financial Statements

Category

Audit Reports<Breakdown of revenue and operating profit>

Convocation Notice

Revenue and operating profit were composed of the following:(2) Property and profit/loss
9th term
April 1, 2017
through
March 31, 2018

10th term
April 1, 2018
through
March 31, 201911th term
April 1, 2019
through
March 31, 2020

12th term
April 1, 2020
through
March 31, 2021
(Current fiscal
year)(Millions ofyen)(Millions ofyen)(Millions ofyen)

115,797

110,412

135,563

164,776

13,791

13,44218,01025,126

9,416

9,000

9,846

25,725(Yen)

135.39114.07125.12326.90131,484

160,272

229,958

244,80364,43567,804

69,174

97,903Category

Revenue
Operating profit
Profit attributable toowners of parent
Basic earnings per
share
Total assets
Total equity(Millions ofyen)(Millions ofyen)

Equity per share(Yen)
attributable to owners
813.60861.58879.001,244.06
of parent(Notes) 1. For the 11th term, businesses of Fuji Medical Instruments MFG. Co., Ltd. have been reclassified as
discontinued operations. Consequently, income from discontinued operations are presented separatelyfrom continuing operations in the consolidated statement of income. Accordingly, revenue andoperating profit are presented in amounts from continuing operations. In addition, the Company also
restated revenue and operating profit from the 10th term to amounts from continuing operations.
2. The Company conducted a stock split with a ratio of two-for-one on April 1, 2021. Basic earnings per
share and equity per share attributable to owners of parent are calculated assuming the stock split had
already been carried out at the start of the 9th term.
3. The interest expenses corresponding to advance trading of precious metal refining business werepreviously recorded as finance cost, but the method was changed from the current fiscal year to berecorded as cost of sales. As a result, operating profit has been restated to reflect the aforementioned
reclassification, and the figures for the previous year have also been restated in the same way.

29
Property and profit/loss

30
Major sales offices and plants

Convocation Notice
Reference Documents for
General Meeting of Shareholders
Business Report

21, Uozakihamamachi, Higashinada-ku, Kobe-shi
Kobe Head Office: 4-17 Kano-cho 4-chome, Chuo-ku, Kobe-shi
Tokyo Head Office: 7-12 Marunouchi 1-chome, Chiyoda-ku, Tokyo
Research laboratory The Technical Research Center (Kobe-shi)
Business offices
Kitakanto (Kitakatsushika-gun, Saitama Pref.)Nagano (Tomi-shi, Nagano Pref.)Hanshin (Amagasaki-shi, Hyogo Pref.)Kobe (Kobe-shi)
Shikoku (Saijo-shi, Ehime Pref.)Kitakyushu (Kitakyushu-shi)
Fukuoka (Koga-shi, Fukuoka Pref.)Sales offices
Sapporo (Kitahiroshima-shi, Hokkaido)
Aomori (Aomori-shi)
Sendai (Miyagi-gun, Miyagi Pref.)Niigata (Sanjo-shi, Niigata Pref.)Kitakanto (Kitakatsushika-gun, Saitama Pref.)Kanto (Kawaguchi-shi, Saitama Pref.)Yokohama (Yokohama-shi)
Kofu (Chuo-shi, Yamanashi Pref.)Shizuoka (Yaizu-shi, Shizuoka Pref.)Nagoya (Komaki-shi, Aichi Pref.)Hokuriku (Toyama-shi)
Hanshin (Amagasaki-shi, Hyogo Pref.)Kobe (Kobe-shi)
Okayama (Okayama-shi)
Hiroshima (Hiroshima-shi)
Shikoku (Saijo-shi, Ehime Pref.)Fukuoka (Koga-shi, Fukuoka Pref.)Kagoshima (Kagoshima-shi)
Okinawa (Itoman-shi, Okinawa Pref.)Consolidated Financial
Statements

Asahi Pretec Corp.
Main office
Head offices

Financial Statements

Asahi Holdings, Inc.
Main office
4-17 Kano-cho 4-chome, Chuo-ku, Kobe-shi
Head offices
Kobe Head Office: 4-17 Kano-cho 4-chome, Chuo-ku, Kobe-shi
Tokyo Head Office: 7-12 Marunouchi 1-chome, Chiyoda-ku, Tokyo
Overseas
Asahi Refining USA Inc. (the U.S.)
subsidiaries
Asahi Refining Canada Ltd. (Canada)
Asahi Refining Florida LLC (the U.S.)

Audit Reports(3) Major sales offices and plants (as of March 31, 2021)

Plants

Overseassubsidiaries

Saitama (Kitakatsushika-gun, Saitama Pref.)Nagano (Tomi-shi, Nagano Pref.)Amagasaki (Amagasaki-shi, Hyogo Pref.)Kobe (Kobe-shi)
The Technical Research Center (Kobe-shi)Ehime (Saijo-shi, Ehime Pref.)Kitakyushu (Kitakyushu-shi)
Hibiki (Kitakyushu-shi)
Fukuoka (Koga-shi, Fukuoka Pref.)Asahi G&S Sdn. Bhd. (Malaysia)
Asahi Pretec Korea Co., Ltd. (Korea)

Japan Waste Corporation
Main office7-12 Marunouchi 1-chome, Chiyoda-ku, Tokyo
Head office7-12 Marunouchi 1-chome, Chiyoda-ku, Tokyo
Business offices
Saitama (Kawaguchi-shi, Saitama Pref.)Yokohama (Yokohama-shi)
Shonan (Koza-gun, Kanagawa Pref.)PlantsYokohama (Yokohama-shi)
Ogimachi Center (Kawasaki-shi)
Samukawa (Koza-gun, Kanagawa Pref.)Subsidiaries in Japan JW Chemitech Co., Ltd. (Kawaguchi-shi, Saitama Pref.)Taiyo Chemical Co., Ltd. (Kagoshima-shi)
Fuji Rozai Co., Ltd. (Ota-ku, Tokyo)
JW Glass Recycling Co., Ltd. (Koto-ku, Tokyo)

31
Major sales offices and plantsAsahi Pretec Corp.
Japan Waste Corporation

4,480 million
yen
400 million
yen

Our voting
right ratio

Major business100.0%

Precious Metals business andEnvironmental Preservation business100.0%

Environmental Preservation business(Note) Asahi Life & Health Corporation was excluded from the significant subsidiaries since it wasmerged with Japan Waste Corporation on April 1, 2020. Moreover, Asahi Americas Holdings,
Inc. was removed from the list of significant subsidiaries because its liquidation wascompleted on March 26, 2021.

Audit Reports

Financial Statements3) Specified wholly owned subsidiarya. Name and address of the specified wholly owned subsidiary
Name: Asahi Pretec Corp.
Address: 21 Uozakihamamachi, Higashinada-ku, Kobe-shi
b. Total book value of shares of the specified wholly owned subsidiary held by the Company
and wholly owned subsidiaries at the end of the fiscal year under review:
24,621 million yen
c. Total amount recorded in the assets section of the balance sheet of the Company for the
fiscal year under review:
111,021 million yen

Convocation Notice

CapitalReference Documents for
General Meeting of Shareholders

Company nameBusiness Report

1) Relationship with parent company
Not applicable2) Significant subsidiaries

Consolidated Financial
Statements(4) Significant parent company and subsidiaries

32
Significant parent company and subsidiaries

(5) Principal businesses (as of March 31, 2021)
The Group is mainly engaged in the Precious Metals business and the Environmental
Preservation business.
1) Precious Metals businessWe collect scraps containing precious metals which are yielded from a variety of fields andrecycle them.
In North America, we refine gold and silver from mines.
○ Collection/reproduction and processing of precious metals (gold, silver, palladium,
platinum, etc.) and other metals and refining of precious metals○ Purchase and sales of precious metals and other metals○ Manufacturing and sales of precious metal products
2) Environmental Preservation businessWe detoxify and properly dispose of each type of industrial waste.
○ Collection and transportation of industrial waste○ Intermediate treatment of industrial waste (detoxification, appropriate disposal, reuse,
reduce, and recycle)(6) Employees (as of March 31, 2021)
1) Employees of the Group
Number of employees
1,510 (133)

Change from the end of previous fiscal year
–64 (down 20)(Note) The number of employees refers to the number of workers (excluding the staff seconded
from the Group to companies outside the Group but including staff seconded fromcompanies outside the Group to the Group) and for the number of part-timers and fixedterm employees, annual average number of persons are shown separately in brackets.
2) Employees of the Company
Change from the end
Number of employeesof previous fiscal year
10 (1)–34 (1)

Average age
51 years and9 months

Average length ofservice
3 years and9 months(Note) The number of employees refers to the number of workers (excluding the staff seconded
from the Company to companies outside the Company but including staff seconded fromcompanies outside the Company to the Company) and for the number of part-timers andfixed-term employees, annual average number of persons are shown separately inbrackets.

33
Principal businesses and Employees

Not applicable(9) Challenges to be addressed
1) Precious Metals business segment
As it is the Group’s core business, the Group will take the following measures to expand
earnings in this segment.
○ Utilize IT to establish an efficient sales structure and technical process and enhancecompetitiveness.
○ Conduct thorough “Responsible Precious Metals Management” and strengthen risk
management.
○ Pursue stable operation of the refining business in North America and expand revenue
sources by building up value added services.
2) Environmental Preservation business segment
As a stable growth business of the Group, we will manage the segment’s business with anemphasis on growth and profitability. The Group will take the following measures to increase
earnings in this segment.
○ Establish a position as a leading environmental company in Japan through the Group’s
nationwide network and by utilizing a high level of treatment technology.
○ Establish an efficient and effective business structure by utilizing digital technologies.
○ Promote globalization and expand the business into the world market.
■ The 9th Mid-term Business Plan (the 13th fiscal term to the 15th fiscal term)
Slogan: Building a global company that pursues originality and growth

Basic policy
1. Reinforcing the foundation for global growth
2. Promotion of new human resources policies
3. Strengthening Group risk management
4. Promoting SDGs
34
Major financial institutions with loans to the Company,
Other important matters relating to the current state of the Group and Challenges to be addressed

Convocation Notice
Audit Reports● Precious Metals business: Strengthening domestic efficiency and promoting global strategy● Environmental Preservation business: Sustainable growth and attempts to globalization

Reference Documents for
General Meeting of Shareholders(8) Other important matters relating to the current state of the Group

Business Report

Loan amount
30,142 million yen
23,765 million yen
19,071 million yen
4,000 million yen
1,000 million yen
1,000 million yen

Consolidated Financial
Statements

Financial institutions
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Chugoku Bank, Ltd.
The Minato Bank, Ltd.
The Joyo Bank, Ltd.

Financial Statements(7) Major financial institutions with loans to the Company (as of March 31, 2021)

■ Reference: Initiatives for the achievement of SDGs
Sustainability Vision:
The Asahi Holdings Group has developed its business activities over a long period of time based on
its core mission of “A Total Commitment to Protecting the Natural Environment and Preserving
Resources.” Our business activities are our contribution to sustainability, and we are achieving bothbusiness growth and solutions for the issues our societies face.
Today, as action is required of all of society, including corporations, we will further our mission byproactively working to achieve goals that we set for those issues to which we can make significant
contributions toward solutions.
Sustainability promotion system:
The Group promotes sustainability-related initiatives by developing measures that focus on priority
SDG-related goals, monitoring the achievement of set targets, and communicating these initiatives
both internally and outside of the Group. These efforts are discussed and determined by the SDGs
Promotion Committee, headed by the President & CEO, which steers the system.

SDGs Promotion Committee
Supervisor: President & CEO
SDGs Promotion Team

Board of Directors

Human Resourceand General
Administration
Department
Corporate
Planning &Communications
Department

Each Department

Technical Division

Domestic

Overseas

Consolidated
Subsidiaries

Consolidated
Subsidiaries

35
Reference: Initiatives for the achievement of SDGs

Group Executive
Committee

12 RESPONSIBLE
CONSUMPTION AND
PRODUCTION
13 CLIMATE ACTION

15 LIFE ON LAND

We will work to expand
appropriate disposal ofindustrial waste as experts in
waste processing, and work
toward realizing a sustainable
recycling-oriented society.

8 DECENT WORKAND ECONOMICGROWTH
12 RESPONSIBLE
CONSUMPTION AND
PRODUCTION
16 PEACE, JUSTICEAND STRONG
INSTITUTIONS

6 CLEAN WATER AND
SANITATION

9 INDUSTRY,INNOVATION AND
INFRASTRUCTURE

Convocation Notice

We will expand the provisionof raw materials that do notinclude conflict minerals andprecious metals produced from
scrap containing precious
metals in consideration ofhuman rights and theenvironment and promoteresponsible precious metal
management.

Reference Documents for
General Meeting of Shareholders

9 INDUSTRY,INNOVATION AND
INFRASTRUCTURE

3. Expand proper industrial
waste disposal

Business Report

The further utilize effectively
limited earth resources, we will
globally expand and promoteprecious metal recycling.

2. Supply precious metals inways that are friendly topeople, society, and theenvironment

11 SUSTAINABLE
CITIES ANDCOMMUNITIES
12 RESPONSIBLE
CONSUMPTION AND
PRODUCTION

Consolidated Financial
Statements

Priority SDG-related Goals
1. Expand precious metal
recycling

14 LIFE BELOW
WATER

Audit Reports

Financial Statements

15 LIFE ON LAND

36
Reference: Initiatives for the achievement of SDGs

4. Reduce CO2 emissions

5. Enhance Work-Life
Balance and Employee
Diversity

6. Encourage and support
SDG-related activities

Through initiatives such asenergy conservation activities,
transitioning to next-generation
automobiles, and transitioning
to low CO2 emission power
plants, we will work toward
reducing CO2 emissions acrossthe Group.

Through workstyle reforms,
health management, anddiversity promotion, we will
work to raise job satisfaction
by enriching foundations toallow for diverse humanresources to take active roles.

We will work to preserve theglobal environment throughencouragement and support ofindividual and group cleaning
activities as the “Asahi Clean
Project.”

7 AFFORDABLE AND
CLEAN ENERGY

12 RESPONSIBLE
CONSUMPTION AND
PRODUCTION

3 GOOD HEALTH AND
WELL-BEING

4 QUALITYEDUCATION

14 LIFE BELOW
WATER

15 LIFE ON LAND
5 GENDER EQUALITY

13 CLIMATE ACTION

17 PARTNERSHIPSFOR THE GOALS

11 SUSTAINABLE
CITIES ANDCOMMUNITIES

8 DECENT WORK AND
ECONOMIC GROWTH

37
Reference: Initiatives for the achievement of SDGs

Audit and Supervisory
Committee

Convocation Notice
Reference Documents for
General Meeting of Shareholders
Audit Reports

Nominating
Committee/
Compensation
Committee

Business Report

Board of Directors

The Board of Directors of the Group is comprised of Executive Directors
who are knowledgeable concerning their respective business, technicalor administrative divisions, as well as Outside Directors with various
types of expertise essential to corporate management. To have anadequate number of Directors for active, substantial and effective
discussions at meetings, the Board of Directors consists of eight (8)Directors, including three (3) Independent Outside Directors. All
Directors share their opinions actively and freely on important subjects
such as the Group’s management strategies and business plans.
Under Japan’s Companies Act, the Group has elected to be a company
with an Audit and Supervisory Committee, and has three Independent
Outside Directors. This structure has strengthened the supervisory
function of the Board of Directors. It also delegates important executive
decisions to the Executive Directors for quicker decision-making andimproved management efficiency.
A Nominating Committee, consisting of three (3) members including two(2) Independent Outside Directors, as well as a Compensation
Committee, have been established as advisory bodies to the Board of
Directors. The aim is to further enhance corporate governance byensuring transparency, fairness, and objectivity for the appointment anddismissal of Directors and key management team members, as well as
for the determination of Director remuneration.

Consolidated Financial
Statements

To establish corporate governance and have it work effectively is a corporate social responsibility andcontributes to more efficient and transparent management as well as to sustainable corporate value
growth.
The Group will build our corporate governance that will respond to the confidence of shareholders,business partners, employees, local communities and other various stakeholders so as to fulfill oursocial mission and responsibility as a listed company. Also, we will develop a “corporate governancestructure” that will promptly respond to the management environment changes with emphasis oncompliance, aiming at sustainable corporate value growth.

Financial Statements■ Reference: Corporate Governance Structure
Basic Policies for Corporate GovernanceCorporate Governance Policies, etc. can also be found on the Company’s website:
https://www.asahiholdings.com/ir/library/governance/

38
Reference: Corporate Governance StructureCorporate Governance Structure
General Meeting of Shareholders
Appointment/Dismissal

Appointment/Dismissal

Appointment/Dismissal

Board of Directors
Audit and Supervisory
Committee Directors
Audit/Supervisory(including a majority of
Independent Outside
Directors)

Inquiry/Reply
Supervisory/
Appointment/
Dismissal

Collaboration

Nominating Committee,
Compensation Committee(including a majority of
Independent Outside
Directors)

Representative
Director

AssistDirection/Report

Audit andSupervisory
Committee
Secretariat

Audit Department

Group Executive
Committee

Internal Control Promotion Meeting
Safety Management Meeting

Accounting Auditor

Executive Directors

Collaboration

Internal Audit

Each Department and Group Companies

Evaluation of the Effectiveness of the Entire Board of Directors
Since the fiscal year ended March 31, 2016, we started the evaluation of the effectiveness of the Boardof Directors to see whether the entire Board of Directors functions appropriately. Overview of
Evaluation Results is disclosed on the Company’s website.

39
Reference: Corporate Governance StructureNumber ofshares held(Thousands ofshares)Percentage ofshares held(%)

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

3,045

7.65

Custody Bank of Japan, Ltd. (Trust account)

2,428

6.10

Mitsuharu Terayama

887

2.23

STATE STREET BANK WEST CLIENT - TREATY 505234

772

1.94

Masamichi Terayama

742

1.86

Asahi Employee Stock Ownership Plan

711

1.79

Custody Bank of Japan, Ltd. (Trust account 5)

569

1.43

Custody Bank of Japan, Ltd. (Securities investment trust
account)
Custody Bank of Japan, Ltd. (Trust account 6)

520

1.31

504

1.27

JP MORGAN CHASE BANK 385781

495

1.24

Shareholders(Notes) 1. Percentage of shares held is calculated by excluding treasury stock.
2. The Company conducted a stock split with a ratio of two-for-one on April 1, 2021.
As a result, the number of shares authorized became 258,000,000 and the number ofshares issued became 79,708,688.

Shareholder distribution
Individuals, others
Financial institutions
Foreign corporations, etc.
General corporations, other corporations
Securities companies

Financial Statements

5) Status of shares granted to the Company’s board members as consideration for
execution of their duties during the fiscal year
Not Applicable

16,773 thousand shares (42.09%)
11,036 thousand shares (27.69%)
9,890 thousand shares (24.82%)
954 thousand shares (2.39%)
1,201 thousand shares (3.01%)

Audit Reports(2) Share acquisition rights, etc.
1) Share acquisition rights granted to and held by the Company’s board members as aconsideration for execution of their duties on the end of the fiscal year under review
Not Applicable2) Share acquisition rights granted to the Company’s employees, etc. as a consideration for
execution of their duties during the fiscal year under review
Not Applicable
40
Share acquisition rights, etc.

Business Report

129,000,000 shares
1) Number of shares authorized:
39,854,344 shares
2) Number of shares issued:
26,2703) Number of shareholders:
4) Major shareholders (top 10 shareholders)Consolidated Financial
Statements(1) Shares (as of March 31, 2021)

Reference Documents for
General Meeting of Shareholders

Convocation Notice

2. Current state of the Company

3) Other status of share acquisition rights
Share acquisition rights by a resolution of the Board of Directors meeting as of February 25, 2021
• Allotment date
March 15, 2021
• Allotment method
Allot all shares to Asahi Refining USA Inc. through a third-party
allotment method• Number of share acquisition rights
2,000 units• Class and number of shares for the purpose of share acquisition rights and calculation method
thereofThe class of shares for the purpose of share acquisition rights shall be common stock of theCompany and the number of shares per unit of the share acquisition rights shall be equal tothat calculated by dividing 100,000 US dollars by the exercise price per share (value of theproperty to be contributed when the share acquisition rights are exercised or calculation
method thereof are defined in (2); however, if two or more units of the share acquisition rights
are exercised at the same time, the number equal to that calculated by dividing 100,000 US
dollars which were multiplied by the number of the units exercised, by the exercise price pershare). Any fractions below one share generated as a result of exercise shall be rounded down.
• Amount to be paid in for share acquisition rights or calculation method thereof and descriptionthat no payment is required
5,257 US dollars in cash per unit of share acquisition rights (total amount to be paid in for theshare acquisition rights: 10,514,000 US dollars in cash)• Value of property to be contributed when share acquisition rights are exercised and calculation
method thereof(1) The property to be contributed when each of the share acquisition rights is exercised shallbe cash, of which value shall be 100,000 US dollars.
(2) The value of cash per share of the Company’s common stock to be contributed when
exercising the share acquisition rights (hereinafter the “Exercise Price per Share”) shall be
initially 42.94 US dollars (Note). The Exercise Price per Share shall be adjusted inaccordance with the following rules. After the share acquisition rights are issued, theExercise Price per Share shall be adjusted in accordance with the following formula if theCompany issues the Company’s common stock or disposes of the Company’s common
stock held by the Company with a paid-in amount below the market value of the Company’scommon stock. In the following formula, “Exercise price after adjustment” is the Exercise
Price per Share after adjustment, “Exercise price before adjustment” is the Exercise Priceper Share before adjustment, and “Number of shares already issued” is the total number
shares of the Company’s outstanding common stock (excluding those held by the Company).

Number of sharesalready issued
Exercise priceafter adjustment=

Exercise pricebefore adjustment

41
Share acquisition rights, etc.

+

Number ofshares newly
issued or
disposed ofAmountpaid in per
share

Market price
Number of sharesalready issued+

Number of shares newly
issued or disposed of

Convocation Notice
Reference Documents for
General Meeting of Shareholders
Business Report
Consolidated Financial
Statements
Audit Reports(Note) The Exercise Price per Share has been adjusted to 21.47 US dollars as the Company
conducted a two-for-one stock split as of April 1, 2021.

Financial Statements

The Exercise Price per Share shall be also adjusted as necessary in case of a split or reverse
split of the Company’s common stock, a specific amount of dividend of surplus, andissuance of share acquisition rights (including those attached to bonds with share acquisitionrights) by which granting of the Company’s common stock can be requested at a price below
market value of the Company’s common stock, as well as when there are certain reasons bywhich the exchange value shall be adjusted for bonds with exchange rights (hereinafter the“Exchange Rights”) into the Company’s common stock (hereinafter the “Exchangeable
Bonds”) that are issued by Asahi Refining USA Inc.
• Period during which share acquisition rights can be exercised
Share acquisition rights may be exercised from March 29, 2021 to March 18, 2026. However,the period shall be 1) until the day that is nine business days (defined below) after theredemption date if the Exchangeable Bonds are redeemed early (excluding those that are
selected not to undergo early redemption), 2) until the day that is 12 business days after thedate on which the Exchangeable Bonds are cancelled, if the Exchangeable Bonds arepurchased and cancelled, or 3) until the day that is 12 business days after the date on which
the benefit of time is forfeited, if the benefit of time of the Exchangeable Bonds is forfeited.
In any case above, the share acquisition rights cannot be exercised after March 18, 2026.
Notwithstanding the above, if the Company reasonably determines that it is necessary to
conduct an organizational restructure, etc., the share acquisition rights cannot be exercised
during the period of within 30 days designated by the Company that will end within 14 days
from the day after the effective date of the organizational restructure, etc. “Business days”
refer to days on which commercial banks are open for business in Tokyo other than Saturdays,
Sundays and public holidays.
• Conditions for exercise of share acquisition rights(1) Partial exercise of the share acquisition rights is not allowed.
(2) Holders of the share acquisition rights may exercise the number of those corresponding to
the Exchange Rights exercised, only when the Exchange Rights have been exercised inaccordance with the guidelines of the Exchangeable Bonds.

42
Share acquisition rights, etc.

(3) Board members and corporate officers
1) Directors (as of March 31, 2021)
Position

Name

Director and Chairman

Mitsuharu Terayama

Representative Director andPresident

Tomoya Higashiura

Director

Amane Kojima

Director

Hiroyuki Nakanishi

Director/Audit and Supervisory
Committee Member

Yuji Kimura

Director/Audit and Supervisory
Committee Member

Kyoko Kanazawa

Director/Full-Time Audit andSupervisory Committee Member
Director/Audit and Supervisory
Committee Member(Notes)Responsibility and importantconcurrent assignment

Director, Asahi Pretec Corp.
General Manager of Financial
Planning Office
Corporate Auditor, Asahi Pretec
Corp.
Representative Director andPresident, Asahi Pretec Corp.
Executive Director and General
Manager of Tokyo Office, Global
Environment Centre Foundation
LawyerOutside Director, Tokushu Tokai
Paper Co., Ltd.

Yoshikatsu Takeuchi
Yoshinori Hara

Professor of Graduate School ofManagement, Kyoto University

1. According to a resolution at the 6th Annual General Meeting of Shareholders held on June
16, 2015, the Company made a transition to a Board with Audit and Supervisory
Committee as of the same date.
2. Directors/Audit and Supervisory Committee Members Yuji Kimura, Kyoko Kanazawa
and Yoshinori Hara are Outside Directors.
3. Director/Full-Time Audit and Supervisory Committee Member Yoshikatsu Takeuchi has
been engaged in the management of the Group for many years as a Representative
Director and Director of the Group companies and possesses extensive expertise in overallmanagement.
4. The Company has a full-time Audit and Supervisory Committee Member to enhance theeffectiveness of audits including information gathering and strengthen its auditing andsupervisory functions.
5. The Company designated Directors/Audit and Supervisory Committee Members Yuji
Kimura, Kyoko Kanazawa and Yoshinori Hara as Independent Directors under theprovisions of the Tokyo Stock Exchange, and filed such status with the Exchange.

2) Directors who resigned during the fiscal year
Not Applicable

43
Board members and corporate officers

Convocation Notice
Reference Documents for
General Meeting of Shareholders
Audit Reports

Financial Statements

Consolidated Financial
Statements4) Overview of the directors and officers liability insurance agreement
The Company has concluded a directors and officers liability insurance agreement provided
for in Article 430-3, paragraph 1 of the Companies Act with an insurance company. The
insurance agreement covers damages that may arise when the insured assume liability forthe execution of their duties or receives a claim related to the pursuit of such liability.
However, there are certain exemptions; for example, damage caused as a result of any
conduct committed while knowing that the conduct is in violation of laws and regulations
shall not be covered. The insured of the insurance agreement are board members, corporate
officers, executive officers and employees in managerial and supervisory positions of theCompany and all subsidiaries under the Companies Act, and the Company bears the entire
premium for all the insured.

Business Report3) Description of the limited liability contract
The Company and each Director (excluding any Director with executive authority over
operations, etc.) signed a contract that limits the liability for compensation for damage set
forth in Article 423, Paragraph 1 of the Companies Act under provisions set forth Article
427, Paragraph 1 of the same Act.
The limit amount of the liability for compensation for damage under such a contract isdetermined to be the minimum liability amount stipulated in Article 425, Paragraph 1 of theCompanies Act.

44
Board members and corporate officers

5) Compensation, etc., for Directors(a) Policy on decision of contents of the board members’ compensation, etc.
• Decision method of the decision policy
The Board of Directors of the Company consults with the voluntary Compensation Committeethat consists of three members including two (2) Independent Outside Directors about
preparation of a draft plan of the Company’s Directors compensation, etc., and based on
opinions received from the Committee, resolves a policy about decision on contents ofcompensation, etc. for each Director at a Board of Directors meeting of the Company.
• Overview of contents of the decision policy
The Company makes a decision within the maximum amount of the board members’
compensation which was resolved at a General Meeting of Shareholders at the Board of
Directors meeting based on opinions from the Compensation Committee that is an advisory
body of the Board of Directors.
The compensation structure shall be developed so that incentives for improving businessperformance will be enhanced, and compensation for Directors (excluding those serving as
the Audit and Supervisory Committee Members) consists of “basic remuneration,” “bonuses”
and “performance-based stock compensation.” Compensation for Directors serving as the
Audit and Supervisory Committee Members consists of “basic remuneration” only.
1) The amount of “basic remuneration” is determined for each Director in accordance with
their duties and responsibilities.
2) The amount of “bonuses” is determined for each Director in accordance with their position
points and contribution to business performance, after the total amount (including that for
Directors of the Company’s subsidiaries) is calculated by multiplying the consolidated
operating profit of the relevant fiscal year by a specific ratio.
3) The purpose of “performance-based stock compensation” is to enhance incentives for
improving mid- to long-term corporate value and the number of shares to be granted islinked to the business performance target achievement ratio of “consolidated operating
profits” of each fiscal year or other factors.
The base of performance-based compensation (bonuses and performance-based stockcompensation) shall be consolidated operating profits which are profits gained from themain business and we believe it is the most appropriate as a management benchmark. The
basic policy is that performance-based compensation shall account for 30% to 70% of thetotal if business performance targets are achieved. The structure and level of compensation
is determined with an importance placed on objectivity in consideration of the level ofcompensation for directors at other companies, etc., the balance with those of the Group’s
employees, and other factors.
• The reason that the Board of Directors considered that contents of compensation, etc. for each
Director for the fiscal year comply with the decision policy
For decisions on the content of compensation, etc. for each Director, the Compensation
Committee made a comprehensive review of the draft plan, including its consistency with thedecision policy, and the Board of Directors respects its opinions and determines if the decision
policy was complied with.

45
Board members and corporate officers

22
(0)

4
(0)

38
(18)

38
(18)

0
(0)

0
(0)

4
(3)

201
(18)

124
(18)

54
(0)

22
(0)

8
(3)

(Notes) 1. The amount of compensation for Directors (excluding Directors serving as the Audit
and Supervisory Committee Members) does not include the employee salaries of
Directors who serve concurrently as employees.
2. The base for performance-based compensation (bonuses and performance-based
stock compensation) is consolidated operating profits which are profits gained fromthe main business and we believe to be the most appropriate as a management
benchmark; actual results was 25,126 million yen. The amount of performancebased compensation (bonuses) of the Company is determined for each Director inaccordance with their position points and contribution to business performance, after
the total amount (including that for Directors of the Company’s subsidiaries) is
calculated by multiplying the consolidated operating profit of the relevant fiscal year
by a specific ratio.
3. The performance-based stock compensation is a stock compensation plan
(nonmonetary compensation, etc.) in which the Company’s shares are granted toeligible Directors in accordance with their positions and the achievement ratio of
business performance targets. As the purpose of the plan is to enhance incentives for
improving mid- to long-term corporate value, the points to be granted are linked tothe business performance target achievement ratio of “consolidated operating profits”
for each fiscal year. The eligible Directors are those who belong to the Company asof May 31, 2021 after the 8th Mid-term Business Plan ended. At the 9th Annual
General Meeting of Shareholders held on June 19, 2018, a continuation of theperformance-based stock compensation plan and the number of share points to be
granted to Directors (excluding Outside Directors, part-time Directors and Directors
serving as the Audit and Supervisory Committee Members) in office in a three-year
period from fiscal year 2018 to fiscal year 2020 were resolved. The performance46
Board members and corporate officers

Reference Documents for
General Meeting of Shareholders

54(0)Business Report

86(0)Consolidated Financial
Statements

Total(Outside Directors)

163
(0)

Financial Statements

Directors(excluding
Directors serving as
the Audit andSupervisory
Committee
Members)(Outside Directors)
Directors serving as
the Audit andSupervisory
Committee
Members(Outside Directors)

Number of
Directors subject
to payment(persons)

Audit Reports

Category

Total amount ofcompensation,etc.
(million yen)

Total amount of compensation, etc. by type(million yen)
Stock
Cash compensationcompensation
PerformanceNon-cash
Fixed
based
compensation,compensation compensation,
etc.
etc.

Convocation Noticeb) Total compensation, etc., for the fiscal year

based coefficient is as follows:Business performance target
achievement ratio
100% or more
50% or more
Below 50%

Performance-based coefficient
1.0
0.5
0

4. At the 6th Annual General Meeting of Shareholders held on June 16, 2015, it was
resolved that the amount of cash compensation for Directors (excluding Directors
serving as the Audit and Supervisory Committee Members) be up to an annual 200
million yen (not including the portion of salary as employees). The number of
Directors (excluding Directors serving as the Audit and Supervisory Committee
Members) was five (5) at the conclusion of said General Meeting of Shareholders.
5. At the 6th Annual General Meeting of Shareholders held on June 16, 2015, it was
resolved that the amount of cash compensation for Directors serving as Audit andSupervisory Committee Members be up to an annual 100 million yen. The number
of Directors serving as the Audit and Supervisory Committee Members was four (4)at the conclusion of said General Meeting of Shareholders.
6. At the 9th Annual General Meeting of Shareholders held on June 19, 2018, a
continuation of the “performance-based stock compensation” plan and in addition to
the maximum amount of compensation as stated above, the amount of compensation,etc. and details thereof for the Company’s Directors (excluding Directors serving as
the Audit and Supervisory Committee Members and Outside Directors) in office ina three-year period from fiscal year 2018 to fiscal year 2020 were decided. The
number of Directors (excluding Directors serving as the Audit and Supervisory
Committee Members and Outside Directors) was five (5) at the conclusion of said
General Meeting of Shareholders.

47
Board members and corporate officers

Director(Audit andSupervisory
Committee
Member)Director(Audit andSupervisory
Committee
Member)

He attended all the meetings of the Board of Directors andthe Audit and Supervisory Committee held during the
fiscal year. He has been performing his proper role toensure the validity and appropriateness of making
Yuji Kimura
decisions on deliberations of agenda and other matters by,for example, conducting supervision and providing advice
from a highly professional standpoint relating toenvironmental preservation, including waste treatment andrecycling.
She attended all the meetings of the Board of Directors andthe Audit and Supervisory Committee held during the
fiscal year. She has been performing her proper role toKyoko
ensure the validity and appropriateness of making
Kanazawa
decisions on deliberations of agenda and other matters by,for example, conducting supervision and providing advice
from a highly professional standpoint relating to laws as alawyer.
He attended all the meetings of the Board of Directors held
during the fiscal year and 11 of 13 Audit and Supervisory
Committee (85%) held during the fiscal year. He has been
performing his proper role to ensure the validity andYoshinori Hara
appropriateness of making decisions on deliberations ofagenda and other matters by, for example, conducting
supervision and providing advice from a highly
professional standpoint relating to service innovation.
48

Board members and corporate officers

Convocation Notice
Reference Documents for
General Meeting of Shareholders
Business Report

Activities and summary of duties performed in relation to
expected role of Outside Directors

Consolidated Financial
Statements

Director(Audit andSupervisory
Committee
Member)Name

Financial Statements

Category

Audit Reports

6) Matters related to outside board members(i) Important concurrent assignment at other corporations, etc., and relationship between the
Company and the other corporations, etc.
- Director/Audit and Supervisory Committee Member Yuji Kimura serves as the
Executive Director and General Manager of Tokyo Office, Global Environment Centre
Foundation. There are no special relationships between the Company and thecorporation where he has the concurrent assignment.
Director/Audit and Supervisory Committee Member Kyoko Kanazawa serves as alawyer (belonging to Hata & Co. Law Offices) and the Outside Director of Tokushu
Tokai Paper Co., Ltd. There are no special relationships between the Company and thecorporation where she has the concurrent assignment.
- Director/Audit and Supervisory Committee Member Yoshinori Hara serves as a
Professor of Graduate School of Management at Kyoto University. There are no special
relationships between the Company and the institution where he has the concurrent
assignment.
(ii) Kinship with a person executing business or an officer not executing business of theCompany or specified related business operators of the Company
Not applicable(iii)Main activities in the fiscal year

(4) Accounting Auditor
1) Name of Accounting Auditor
Ernst & Young ShinNihon LLC
2) Amount of compensation, etc., for the Accounting Auditor(i) Amount to be paid by the Company(ii) Total amount of money to be paid by the Company
and the Company’s subsidiaries and other benefits
on property

Amount of compensation, etc.
28 million yen
68 million yen(Notes) 1. In the agreement between the Company and the Accounting Auditor, the amount ofcompensation, etc., for audit under the Companies Act and the amount ofcompensation, etc., for audit under the Financial Instruments and Exchange Act are
not separated and may not be separated actually. Therefore, the total of thoseamounts is stated for the amount in (i) above.
2. The Audit and Supervisory Committee provided its consent to the amount ofcompensation, etc., for the Accounting Auditor based on its verification as necessaryof its auditing plan, the status of its execution of duties of accounting audits and theappropriateness of the basis for calculating its estimates.
3) Description of non-audit services
The Company pays to Ernst & Young ShinNihon LLC a consideration for preparation ofoverseas comfort letters relating to the issuance of corporate bonds.
4) Policy for determining the dismissal or the refusal of reappointment of the Accounting
Auditor
When it is found that the Accounting Auditor falls under the items set forth in any of items of
Article 340, Paragraph 1 of the Companies Act, the Audit and Supervisory Committee will
dismiss the Accounting Auditor in accordance with the consent of all Audit and Supervisory
Committee Members. In this case, the Audit and Supervisory Committee Member appointed
by the Audit and Supervisory Committee will report the fact of the dismissal of the
Accounting Auditor and reasons for the dismissal at the General Meeting of Shareholders
convened for the first time after the dismissal.
When it is deemed necessary to change the Accounting Auditor in consideration of the statusof the execution of its duties, the Company’s auditing system and other factors, the Audit andSupervisory Committee will determine the content of a proposal concerning the dismissal or
the refusal of reappointment of the Accounting Auditor to be submitted to a General Meetingof Shareholders.

49
Accounting Auditor

Audit Reports

Financial Statements

Consolidated Financial
Statements

Business Report

Reference Documents for
General Meeting of Shareholders

We consider improving corporate value by maintaining stable profitability and sustainablegrowth as well as meeting the expectations of shareholders through a return of profits to be
critical tasks of management.
We will strive to continue distribution of surplus without decreasing the current level ofannual dividends, intending to maintain a payout ratio of 40%, while strengthening internal
reserves to execute capital investment and M&A toward future growth.

Convocation Notice(5) Policy to determine the distribution, etc., of surplus

50
Policy to determine the distribution, etc., of surplus

Consolidated Financial Statements
Consolidated Statement of Financial Position (as of March 31, 2021)(Millions of yen)Account

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

191,961
10,023
100,775
63,515
2,833
2,169
12,644Non-current assets
Property, plant and equipment
Goodwill
Intangible assets
Investments accounted forusing equity method
Deferred tax assets

Account
LIABILITIESAmount52,84137,904
1,040
697

Current liabilities
Trade and other payables
Loans payable
Income tax payable
Other financial liabilities
Provisions
Other current liabilities
Non-current liabilities
Bonds and loans payable
Deferred tax liabilities
Net defined benefit liability
Other financial liabilities

119,568
26,46579,337
5,914
1,247
1,601
5,002
27,33125,501
968
106
754

3,544

Total liabilities

146,899

8,392

EQUITY
Equity attributable to
Net defined benefit asset
165
owners of parent
Financial assets
1,051
Capital stock
Other non-current assets
44
Capital surplus
Treasury stock
Retained earnings
Other components of equity
Total equity
Total assets
244,803
Total liabilities and equity(Note) Amounts less than one million yen are omitted.

51
Consolidated Statement of Financial Position

97,903
7,790
11,952(957)
80,604(1,486)
97,903244,803

25,126
136
(84)
962
(3)

1,010
26,136(411)
25,72525,725

Reference Documents for
General Meeting of Shareholders(7,688)－

Audit Reports

Financial Statements

Profit attributable to:
Owners of parent
Non-controlling interests(Note) Amounts less than one million yen are omitted.

285

Business Report

Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other operating income
Other operating expenses
Share of profit of investments accounted for using
equity method
Operating profit
Finance income
Finance costs
Other non-operating income
Other non-operating expenses
Profit before tax
Income tax expenses
ProfitConsolidated Financial
Statements

Account(Millions of yen)Amount164,776(131,962)
32,814(7,263)
96(806)

Convocation Notice

Consolidated Statement of Income (April 1, 2020 to March 31, 2021)

52
Consolidated Statement of Income

Consolidated Statement of Changes in Equity (April 1, 2020 to March 31, 2021)(Millions of yen)
Equity attributable to owners of parent
Other components of equity
Translation
CapitalTreasury
Retained
adjustments
Cash flow
surplusstockearnings
of foreign
hedgesoperations

Capitalstock
Balance at April 1,
2020
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury
stock
Dividends
Issuance of
convertible bond-typebonds with shareacquisition rights
Reclassified fromother components ofequity to retained
earnings
Share-based paymenttransactions
Total transactions withownersBalance at March 31,
2021

7,790

10,755(956)

60,797(4,198)(5,008)

1,254

6,462

1,254

6,462

25,725－－－25,725(0)(5,902)
996

(16)
200
－

1,197

(0)

(5,919)

－

－

7,790

11,952(957)

80,604(2,944)

1,454(Note) Amounts less than one million yen are omitted.

53
Consolidated Statement of Changes in Equity

(9,212)

69,174

69,174－25,72525,725

10

(17)

7,709

7,709

7,709

10

(17)

7,709

33,43433,434

－

(0)

(0)

－

(5,902)(5,902)

－

996

996

16

－

－

－

200

200

(0)

17

(0)

17

16

(4,705)(4,705)

3－(1,486)

97,90397,903

Reference Documents for
General Meeting of Shareholders－

Business Report

(5)

Total

Consolidated Financial
Statements

Balance at April 1,
2020
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury
stock
Dividends
Issuance of
convertible bond-typebonds with shareacquisition rights
Reclassified fromother components ofequity to retained
earnings
Share-based paymenttransactions
Total transactions withownersBalance at March 31,
2021

Convocation Notice(Millions of yen)
Equity attributable to owners of parent
Other components of equity
FinancialassetsRemeasuremeasured at
Total
ments offair value
Total
definedthrough otherbenefit planscomprehensive income

Audit Reports

Financial Statements(Note) Amounts less than one million yen are omitted.

54
Consolidated Statement of Changes in Equity

Financial Statements
Balance Sheet (as of March 31, 2021)(Millions of yen)Account

AmountASSETS
Current assets

61,646

Cash and deposits

5,912

Short-term loans to affiliatedcompanies

53,047

Income taxes receivable

2,661

Other

26

Non-current assets

49,375

Property, plant andequipment

5,343

Buildings

1,986

Tools, equipment andfixtures
Land

0
3,355

Intangible assets

23

Software23

Investments and otherassetsShares of affiliatedcompanies
Deferred tax assets
Total assets

44,00836,0877,921
111,021

Account
LIABILITIESCurrent liabilities
Short-term loans payable
Accounts payable-otherAccrued expenses
Provision for bonuses
Provision for directors’
bonuses
Other
Non-current liabilities
Bonds payable
Provision for stocks payment
Provision for management
board incentive plan trust
Other
Total liabilities
NET ASSETS
Shareholders’ equity
Capital stock
Capital surplus
Capital reserve
Other capital surplus
Retained earnings
Other retained earnings
Retained earnings
carried forward
Treasury stock
Share acquisition rights
Total Net Assets
Total Liabilities and Net
Assets(Note) Amounts less than one million yen are omitted.

55
Balance Sheet

Amount30,16430,000
84
4
1
68
6
5,274
5,000
34
83
157
35,43974,435
7,790
27,651
9,364
18,28739,95039,95039,950(957)
1,146
75,582
111,021

36
64
1,038

0
3
(7,851)494

1,139
12,4350
12,435(7,848)20,283

Reference Documents for
General Meeting of Shareholders

229
261
3

Audit Reports

Financial Statements

Consolidated Financial
Statements

Operating revenue
Operating expenses
Operating profit
Non-operating profit
Interest income
Guarantee commission received
Other
Non-operating expenses
Interest expenses
Bond issuance cost
Bad debts expenses
Ordinary income
Extraordinary loss
Loss on retirement of non-current assets
Net profit before income taxes
Income taxes-current
Income taxes-deferred
Net profit(Note) Amounts less than one million yen are omitted.

Business Report

Account(Millions of yen)Amount14,003922
13,080Convocation NoticeStatement of Income (April 1, 2020 to March 31, 2021)

Statement of Income

56

Statement of Changes in Net Assets (April 1, 2020 to March 31, 2021)(Millions of yen)
Shareholders’ equity
Capital surplus
Retained earnings
Other retained
earnings
CapitalOther capitalreserve
surplusRetained earnings
carried forward

Capitalstock
Balance atApril 1, 2020
Changes during
the period
Dividends
from surplus
Net profit
Purchase oftreasury stock
Net changesof items otherthanshareholders’equityTotal changes
during theperiodBalance at
March 31, 2021

Balance atApril 1, 2020
Changes during
the period
Dividends
from surplus
Net profit
Purchase oftreasury stock
Net changesof items otherthanshareholders’equityTotal changes
during theperiodBalance at
March 31, 2021

7,790

9,364

18,28725,639Treasury
stock
(956)

Total
shareholders’equity60,126(5,973)(5,973)

20,283

20,283
(0)

(0)

－

－

－

14,310(0)14,309

7,790

9,364

18,28739,950(957)

74,435

ShareacquisitionrightsTotal net
assets－60,126(5,973)
20,283
(0)

1,146

1,146

1,146

15,456

1,146

75,582(Note) Amounts less than one million yen are omitted.

57
Statement of Changes in Net Assets

Audit Opinion
Pursuant to Article 444, paragraph 4 of the Companies Act, we have audited the consolidated financial
statements, namely the consolidated statement of financial position, the consolidated statement ofincome, and the consolidated statement of changes in equity, and the basis of preparing consolidated
financial statements and other notes of Asahi Holdings, Inc. for the consolidated fiscal year from April
1, 2020 to March 31, 2021.
In our opinion, the above consolidated financial statements prepared in conformity with the provisionof the second sentence of Article 120, Paragraph 1 of the Rules of Corporate Accounting, which allows
partial omission of the disclosures required by the designated international accounting standards,
present fairly, in all material respects, the assets as well as income and losses in the period pertaining
to consolidated financial statements of the corporate group which consists of Asahi Holdings, Inc. andits consolidated subsidiaries.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibility under the auditing standards is stated in “Auditor’s Responsibility for the Audit of theConsolidated Financial Statements.” We are independent of the Company and its consolidated
subsidiaries in accordance with the provisions related to professional ethics in Japan, and are fulfillingother ethical responsibilities as an auditor. We believe that we have obtained sufficient and appropriate
audit evidence to provide a basis for our audit opinion.
Responsibility of Management and Audit and Supervisory Committee for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of consolidated financial
statements in conformity with the provision of the second sentence of Article 120, Paragraph 1 of theRules of Corporate Accounting, which allows partial omission of the disclosures required by thedesignated international accounting standards. This includes the improvement and application of theinternal control that management deemed necessary to prepare and fairly present consolidated
financial statements that are free from material misstatements caused by fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing whether
it is appropriate to prepare the consolidated financial statements in accordance with the premise of agoing concern, and for disclosing matters relating to going concern when it is required to do so in
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Transcript of Accounting Auditor’s audit report on consolidated financial statements

Convocation Notice
Reference Documents for
General Meeting of Shareholders

Hiroaki Hono

Business Report

Toshinari Takeno

Consolidated Financial
Statements

May 11, 2021
To the Board of Directors of
Asahi Holdings, Inc.
Ernst & Young ShinNihon LLC
Tokyo office
Designated andCertified Public Accountant
Engagement Partner,
Designated andCertified Public Accountant
Engagement Partner,

Financial Statements

Independent Auditor’s Report

Audit Reports

Audit Reports
Transcript of Accounting Auditor’s audit report on consolidated financial statements

accordance with the provision of the second sentence of Article 120, Paragraph 1 of the Rules ofCorporate Accounting, which allows partial omission of the disclosures required by the designatedinternational accounting standards.
Audit and Supervisory Committee is responsible for monitoring the execution of Directors’ duties
related to designing and operating the financial reporting process.
Auditors’ Responsibility for the Audit of the Consolidated Financial Statements
Our responsibility is to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to express
an opinion on the consolidated financial statements from an independent standpoint in an audit report,
based on our audit. Misstatements can occur as a result of fraud or error, and are deemed material ifthey can be reasonably expected to, either individually or collectively, influence the decisions of users
taken on the basis of the consolidated financial statements.
We make professional judgment in the audit process in accordance with auditing standards generally
accepted in Japan, and perform the following while maintaining professional skepticism.
・ Identify and assess the risks of material misstatement, whether due to fraud or error. Design andimplement audit procedures to address the risks of material misstatement. The audit procedures
shall be selected and applied as determined by the auditor. In addition, sufficient and appropriate
audit evidence shall be obtained to provide a basis for the audit opinion.
・ In making those risk assessments, the auditor considers internal control relevant to the entity’s
audit in order to design audit procedures that are appropriate in the circumstances, although the
purpose of the audit of the consolidated financial statements is not to express an opinion on theeffectiveness of the entity’s internal control.
・ Assess the appropriateness of accounting policies adopted by management and the method of theirapplication, as well as the reasonableness of accounting estimates made by management and theadequacy of related notes.
・ Determine whether it is appropriate for management to prepare the consolidated financial
statements on the premise of a going concern and, based on the audit evidence obtained, determine
whether there is a significant uncertainty in regard to events or conditions that may cast significant
doubt on the entity’s ability to continue as a going concern. If there is a significant uncertainty
concerning the premise of a going concern, the auditor is required to call attention to the notes tothe consolidated financial statements in the audit report, or if the notes to the consolidated financial
statements pertaining to the significant uncertainty are inappropriate, issue a modified opinion on
the consolidated financial statements. While the conclusions of the auditor are based on the audit
evidence obtained up to the date of the audit report, depending on future events or conditions, anentity may be unable to continue as a going concern.
・ Besides assessing whether the presentation of and notes to the consolidated financial statements
are in accordance with the provision of the second sentence of Article 120, Paragraph 1 of the Rulesof Corporate Accounting, which allows partial omission of the disclosures required by thedesignated international accounting standards, assess the presentation, structure, and content of theconsolidated financial statements including related notes, and whether the consolidated financial
statements fairly present the transactions and accounting events on which they are based.
・ Obtain sufficient and appropriate audit evidence regarding the financial information of theCompany and its consolidated subsidiaries in order to express an opinion on the consolidated
financial statements. The auditor is responsible for instructing, supervising, and implementing the59
Transcript of Accounting Auditor’s audit report on consolidated financial statements

Convocation Notice
Reference Documents for
General Meeting of Shareholders
Audit Reports

Financial Statements

Consolidated Financial
Statements

Business Report

audit of the consolidated financial statements, and is solely responsible for the audit opinion.
The auditor reports to Audit and Supervisory Committee regarding the scope and timing of
implementation of the planned audit, material audit findings including material weaknesses in internal
control identified in the course of the audit, and other matters required under the auditing standards.
The auditor reports to Audit and Supervisory Committee regarding the observance of provisions
related to professional ethics in Japan as well as matters that are reasonably considered to have an
impact on the auditor’s independence and any safeguards that are in place to reduce or eliminate
obstacles.
Interests
Our firm and engagement partners have no interests in the Company or its consolidated subsidiaries
requiring disclosure under the provisions of the Certified Public Accountants Act of Japan.

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Transcript of Accounting Auditor’s audit report on consolidated financial statements

Transcript of Accounting Auditor’s audit report
Independent Auditor’s Report
May 11, 2021
To the Board of Directors of
Asahi Holdings, Inc.
Ernst & Young ShinNihon LLC
Tokyo office
Designated andCertified Public Accountant
Engagement Partner,
Designated andCertified Public Accountant
Engagement Partner,

Toshinari Takeno
Hiroaki Hono

Audit Opinion
Pursuant to Article 436, paragraph 2, item 1 of the Companies Act, we have audited the financial
statements, namely the balance sheet, the statement of income, and the statement of changes in net
assets of Asahi Holdings, Inc. for the 12th fiscal year from April 1, 2020 to March 31, 2021, including
notes to non-consolidated financial statements and accompanying supplementary schedules thereto.
In our opinion, the financial statements and the accompanying supplementary schedules thereto
referred to the above present fairly, in all material respects, the assets as well as income and losses in
the period pertaining to such financial statements and the accompanying supplementary schedules
thereto in conformity with corporate accounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibility under the auditing standards is stated in “Auditor’s Responsibility for the Audit of the
Financial Statements and the Accompanying Supplementary Schedules.” We are independent of theCompany in accordance with the provisions related to professional ethics in Japan, and are fulfillingother ethical responsibilities as an auditor. We believe that we have obtained sufficient and appropriate
audit evidence to provide a basis for our audit opinion.
Responsibility of Management and Audit and Supervisory Committee for the Financial
Statements and the Accompanying Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial statements andthe accompanying supplementary schedules thereto in conformity with corporate accounting
principles generally accepted in Japan. This includes the improvement and application of the internal
control that management deemed necessary to prepare and fairly present financial statements and theaccompanying supplementary schedules thereto that are free from material misstatements caused byfraud or error.
In preparing the financial statements and the accompanying supplementary schedules, management is
responsible for assessing whether it is appropriate to prepare the financial statements and theaccompanying supplementary schedules in accordance with the premise of a going concern, and fordisclosing matters relating to going concern when it is required to do so in accordance with accounting
principles generally accepted in Japan.
Audit and Supervisory Committee is responsible for monitoring the execution of Directors’ duties
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Transcript of Accounting Auditor’s audit report62
Transcript of Accounting Auditor’s audit report

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

related to designing and operating the financial reporting process.
Auditors’ Responsibility for the Audit of the Financial Statements and the Accompanying
Supplementary Schedules
Our responsibility is to obtain reasonable assurance about whether the financial statements and theaccompanying supplementary schedules as a whole are free from material misstatement, whether due
to fraud or error, and to express an opinion on the financial statements and the accompanying
supplementary schedules from an independent standpoint in an audit report, based on our audit.
Misstatements can occur as a result of fraud or error, and are deemed material if they can be reasonably
expected to, either individually or collectively, influence the decisions of users taken on the basis of
the financial statements and the accompanying supplementary schedules.
We make professional judgment in the audit process in accordance with auditing standards generally
accepted in Japan, and perform the following while maintaining professional skepticism.
・ Identify and assess the risks of material misstatement, whether due to fraud or error. Design andimplement audit procedures to address the risks of material misstatement. The audit procedures
shall be selected and applied as determined by the auditor. In addition, sufficient and appropriate
audit evidence shall be obtained to provide a basis for the audit opinion.
・ In making those risk assessments, the auditor considers internal control relevant to the entity’s
audit in order to design audit procedures that are appropriate in the circumstances, although the
purpose of the audit of the financial statements and the accompanying supplementary schedules is
not to express an opinion on the effectiveness of the entity’s internal control.
・ Assess the appropriateness of accounting policies adopted by management and the method of theirapplication, as well as the reasonableness of accounting estimates made by management and theadequacy of related notes.
・ Determine whether it is appropriate for management to prepare the financial statements and theaccompanying supplementary schedules on the premise of a going concern and, based on the audit
evidence obtained, determine whether there is a significant uncertainty in regard to events orconditions that may cast significant doubt on the entity’s ability to continue as a going concern. If
there is a significant uncertainty concerning the premise of a going concern, the auditor is required
to call attention to the notes to the financial statements and the accompanying supplementaryschedules in the audit report, or if the notes to the financial statements and the accompanying
supplementary schedules pertaining to the significant uncertainty are inappropriate, issue amodified opinion on the financial statements and the accompanying supplementary schedules.
While the conclusions of the auditor are based on the audit evidence obtained up to the date of theaudit report, depending on future events or conditions, an entity may be unable to continue as agoing concern.
・ Besides assessing whether the presentation of and notes to the financial statements and theaccompanying supplementary schedules are in accordance with accounting principles generally
accepted in Japan, assess the presentation, structure, and content of the financial statements andthe accompanying supplementary schedules including related notes, and whether the financial
statements and the accompanying supplementary schedules fairly present the transactions andaccounting events on which they are based.
The auditor reports to Audit and Supervisory Committee regarding the scope and timing of
implementation of the planned audit, material audit findings including material weaknesses in internal
control identified in the course of the audit, and other matters required under the auditing standards.

The auditor reports to Audit and Supervisory Committee regarding the observance of provisions
related to professional ethics in Japan as well as matters that are reasonably considered to have an
impact on the auditor’s independence and any safeguards that are in place to reduce or eliminate
obstacles.
Interests
Our firm and engagement partners have no interests in the Company requiring disclosure under theprovisions of the Certified Public Accountants Act of Japan.

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Transcript of Accounting Auditor’s audit report2) Each Audit and Supervisory Committee Member monitored and verified whether the
Accounting Auditor maintained its independence and properly conducted its audit, received areport from the Accounting Auditor on the status of its performance of duties including its
auditing plan, results of quarterly review, results of audit at the end of the period and others,
and requested explanations as necessary. Each Audit and Supervisory Committee Member was
notified by the Accounting Auditor that it had established a “system to ensure that theperformance of duties of the Accounting Auditor was properly conducted” (the matters listed
in the items of Article 131 of the Rules of Corporate Accounting) in accordance with the“Quality Control Standards for Audits” (Business Accounting Council on October 28, 2005),
and requested explanations as necessary.
Based on the above-described methods, each Audit and Supervisory Committee Member examined
the business report and the supplementary schedules thereto, the financial statements (balance sheet,statements of income and statements of changes in net assets and notes to non-consolidated financial
statements) and the supplementary schedules thereto, as well as the consolidated financial
statements (consolidated statement of financial position, consolidated statements of income and64
Transcript of Audit and Supervisory Committee’s audit report

Reference Documents for
General Meeting of Shareholders
Business Report

1) In conformity with the Audit and Supervisory Committee Auditing Standards established by
the Audit and Supervisory Committee and in accordance with the audit policies and important
audit items, directing the Audit Department and cooperating with the internal control division,
each Audit and Supervisory Committee Member attended important meetings, received reportson the status of performance of duties from the Directors and other employees and requested
explanations as necessary, examined important approval documents, etc., and inspected thestatus of the corporate affairs and assets of the Company. In addition, opinions were exchanged
with Representative Director and President as well as Directors. Also regarding the Company’s
major subsidiaries, each Audit and Supervisory Committee Member attended important
meetings, received reports on businesses, requested explanations as necessary and shared
opinions with Directors.

Consolidated Financial
Statements

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

Financial Statements

The Audit and Supervisory Committee audited the Directors’ performance of their duties during the12th fiscal year (from April 1, 2020 to March 31, 2021), and hereby reports the method and results of
the audit as follows.

Audit Reports

Audit Report

Convocation NoticeTranscript of Audit and Supervisory Committee’s audit reportconsolidated statements of changes in equity and notes to consolidated financial statements), for the
fiscal year under review.
2. Results of Audit(1) Results of audit of business report, etc.
(i) We acknowledge that the business report and the supplementary schedules thereto fairly
present the status of the Company in conformity with the applicable laws and regulations andthe Articles of Incorporation of the Company.
(ii) We acknowledge that no misconduct or material fact constituting a violation of any law or
regulation or the Articles of Incorporation of the company was found with respect to thedirectors’ performance of their duties.
(iii)We acknowledge that the Board of Directors’ resolutions with respect to the internal control
systems are appropriate. We did not find any matter to be mentioned with respect to thedescriptions in the business report and directors’ performance of their duties concerning theinternal control systems.
(2) Results of audit of financial statements and supplementary schedules thereto
We acknowledge that the methods and results of audit performed by the Accounting Auditor,
Ernst & Young ShinNihon LLC, are appropriate.
(3) Results of audit of consolidated financial statements
We acknowledge that the methods and results of audit performed by the Accounting Auditor,
Ernst & Young ShinNihon LLC, are appropriate.
May 11, 2021
Audit and Supervisory Committee, Asahi Holdings, Inc.
Chairman:
Yuji Kimura
Audit and Supervisory Committee Member:
Kyoko Kanazawa
Full-time Audit and Supervisory Committee Member: Yoshikatsu Takeuchi
Audit and Supervisory Committee Member:
Yoshinori Hara
(Note) Audit and Supervisory Committee Members Yuji Kimura, Kyoko Kanazawa and Yoshinori
Hara are Outside Directors set forth in Article 2, Item 15 and Article 331, Paragraph 6 of theCompanies Act.

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Transcript of Audit and Supervisory Committee’s audit reportTOPICS● Kitakyushu and Hibiki Plants: New incineration facilities put into operation
Asahi Pretec Corp., one of the companies in the Group, renewed an incinerator for existing waste
treatment facilities at the Kitakyushu Plant in June 2020. The newly introduced power generation
facilities utilize waste heat generated by incineration of waste and generate the entire amount ofelectricity consumed in its offices, resulting in CO2 reduction.
In April 2021, in the same Kitakyushu-shi, waste treatment facilities (Hibiki Plant) were newly
installed.
For financing these projects, green bonds issued last year were used.
By further detoxifying and recycling industrial waste through promotion of proper treatment of waste,
we will contribute to solving various social problems and achieving a sustainable society.
● Received DEALWATCH AWARDSIn March 2021, Asahi Refining USA Inc., one of the companies in the Group, issued exchangeablebonds with share acquisition rights of the Company, which is its parent, to procure funds for capital
investment and working capital of the refining business in North America.
Investors were enthusiastic about Asahi Refining USA as it opened the new way for procuring US
dollar-denominated funds by introducing the first scheme in Japan that a US subsidiary issues US
dollar-denominated convertible bonds with a parent company as a guarantor. Consequently, Asahi
Refining USA won “Innovative Equity Deal of the Year” of the Equity Segment at “DEALWATCH
AWARDS 2020” sponsored by Refinitiv Japan K.K.

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TOPICS