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 11th Annual General Meeting of Shareholders
Date and time:
10:30 a.m. on Tuesday, June 16, 2020
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:

Election of Four (4) Directors (Excluding Directors Serving as the Audit andSupervisory Committee Members)

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 15, 2020.
There are concerns surrounding 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 may take infection prevention measures at the meeting.

CoverMessage from the CEO
To Shareholders
Mitsuharu Terayama, Chairman & CEO
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 11th Annual General Meeting of
Shareholders to offer a short greeting.
Fiscal year 2019, which served as the second fiscal year of the 8th Mid-term Business Plan, achieved
revenue of 135.5 billion yen and operating income of 20.1 billion yen on a consolidated basis. The
results surpassed our targets for the second fiscal year of 19.0 billion yen in operating income, revised
upward from 15.0 billion yen on October 29 last year, and achieved a historic high for the third
consecutive year. ROE (Return on Equity), which the Company considers an indicator of improvements
in management efficiency, rose further to 14.4% compared to 13.6% for fiscal year 2018. The Company
increased the year-end dividend by 10 yen to make it 70 yen per share for the fiscal year 2019. The
dividend policy is one of our most important issues in relation to returning profits to shareholders. The
forecast for the annual dividend for fiscal year 2020 is 140 yen per share, based on the “dividend policyof maintaining a payout ratio of 50% or more.”
In December last year, we announced our plan to “transfer 60% of our equity interest in Fuji Medical
Instruments MFG. Co., Ltd., a consolidated subsidiary of the Company, to Johnson Health Tech Co.,
Ltd.” and the transfer was completed in March this year. As a result, the number of reporting segmentsof the Group was reduced to two: “Precious Metals business” and “Environmental Preservation
business.”
All employees of the Group, who are engaged in these two businesses, are contributing directly to the“SDGs (Sustainable Development Goals)” adopted by the United Nations through their daily tasks.
Moreover, the Company established the “SDGs Promotion Team” to promote related activities by bothindividual employees and groups. This March, the Company procured funds that will be necessary to
introduce eco-friendly equipment by issuing a Green Bond, as part of the sustainability management
initiatives. A Green Bond is a bond used to finance projects that have an environmental improvement
impact (green projects) including measures to combat global warming and promote renewable energy.
Regarding the eligibility of this Green Bond, Rating and Investment Information, Inc., a third-party
assessment institution, has given it a “GA1”, which is the top rating.
Throughout the world, people’s lives are in an unstable condition that we have never experienced before,
due to the novel coronavirus. The global economy and all corporate managers are facing an uncertain
situation and it is difficult to forecast the future. That is why the Group will never lose the spirit of“Innovate and embrace challenges” set forth in the Asahi Way and will overcome tough situations.
I hope that you will continue to support the “Asahi Holdings Group.”

1
Message from the CEO

Contents
 Notice of the 11th Annual General Meeting of Shareholders ........................................................... 5
 Reference Documents for General Meeting of Shareholders.......................................................... 10
Proposal:

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

Attached documents
 Business Report .......................................................................................................................... 15
 Consolidated Financial Statements ............................................................................................. 37
 Financial Statements ................................................................................................................... 41
 Audit Reports .............................................................................................................................. 44
 TOPICS........................................................................................................................................... 52

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 Conserve Resources”

Our Credo
We conserve limited natural resources, preserve the global environment, and support human health.
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 thebusiness.

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 26, 2020
4-17 Kano-cho 4-chome, Chuo-ku, Kobe-shi, Japan
Asahi Holdings, Inc.
Mitsuharu Terayama,
Chairman & CEO

Notice of the 11th Annual General Meeting of Shareholders
This is to inform you that the 11th 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). You are kindly requested to read the attachedreference documents and exercise your voting rights by noon on Monday, June 15, 2020, 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 16, 2020
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 11th fiscal
term (April 1, 2019 through March 31, 2020)
2) Report on non-consolidated financial statements for the 11th fiscal
term (April 1, 2019 through March 31, 2020)
Items to be resolved:
Proposal:
Election of Four (4) Directors (Excluding Directors Serving as the Audit andSupervisory Committee Members)

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 theCompany, 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,

5
Cover letter of convocation

Convocation Noticerespectively.
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/).

Audit Reports

Financial Statements

Consolidated Financial
Statements

Business Report

Reference Documents for
General Meeting of Shareholders

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 15, 2020
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 by mail and via the Internet, those exercised via
the Internet will be considered as valid.
(2) If you have exercised your voting rights multiple times on the Internet, the final vote will beconsidered as valid. If you have exercised your voting rights 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 15, 2020, 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 by mail (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:
Corporate Agency Division (Help Desk), 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

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 four (4) Directors.
The Audit and Supervisory Committee has expressed no opinion on this proposal.
The candidates for Director to be elected are as follows.

No.

(Date of birth)

Position and Duties at Asahi
Holdings(Important concurrent assignment)

Attendance at theBoard of Directors
meeting

Chairman & CEO
1

To be
Reelected

10 out of 10

Mitsuharu Terayama(March 10, 1940)[Significant concurrent duties]

meetings

None
Representative Director andPresident
2

To be
Reelected

Tomoya Higashiura[Significant concurrent duties]

10 out of 10(January 26, 1961)

Director of Asahi Pretec Corp.

meetings

Representative Director andPresident of Asahi Americas
Holdings, Inc.
Director, CFO and General Manager
of Financial Planning Office3

To be
Reelected

Amane Kojima[Significant concurrent duties]

10 out of 10(April 9, 1968)

Corporate Auditor of Asahi Pretec

meetings

Corp.
Corporate Auditor of Asahi Americas
Holdings, Inc.
Director
4

To beHiroyuki Nakanishi[Significant concurrent duties]

10 out of 10

Reelected(July 5, 1962)

Representative Director andmeetings

Business Report

Name

Consolidated Financial
Statements

Candidate

Reference Documents for
General Meeting of Shareholders

Election of Four (4) Directors (Excluding Directors Serving as the Audit andSupervisory Committee Members)

Financial Statements

ProposalConvocation Notice

Reference Documents for General Meeting of Shareholders

Audit Reports

President of Asahi Pretec Corp.

10
Reference Documents for General Meeting of Shareholders

Candidate
No.

Name
(Date of birth)

Career, Position and Duties at Asahi Holdings
April 1964:

Joined KURARAY CO., LTD.

July 1973:

Joined Asahi Pretec Corp.

Ownershipof Shares

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

1
Mitsuharu Terayama(March 10, 1940)
To be Reelected

May 1981:

Appointed 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. (to present)

887,145
shares[Significant concurrent duties]
Attendance at the Board of Directors meeting: 10 out of 10 meetings(Reason for nomination as a candidate)
Mr. Terayama engages in the management of the entire Group as a Representative Director of theCompany. 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 insightand abundant experience in overall management, would contribute to the further functional
reinforcement of the Board of Directors and the corporate governance of the entire Group.

11
Reference Documents for General Meeting of Shareholders

April 1984:

Ownershipof Shares

Joined NEC Corporation

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.
(to present)

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)

25,000sharesConsolidated Financial
Statements

Tomoya Higashiura(January 26, 1961)
To be ReelectedAppointed as Director andGeneral Manager of
Administration Division of Asahi
Pretec Corp.

Financial Statements

2

June 2006:

Reference Documents for
General Meeting of Shareholders

February 2001: Joined Asahi Pretec Corp.

[Significant concurrent duties]
Director of Asahi Pretec Corp.
Representative Director and President of Asahi
Americas Holdings, Inc.
Attendance at the Board of Directors meeting: 10 out of 10 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 Representative Director and Director of the Group companies, having deep
insight and abundant experience in overall management. The Company therefore requests hiselection as a Director of the Company based on its judgment that his continued tenure of office as a
Director is appropriate because his abundant experience in the precious metal business and its
global expansion would contribute to the sustainable enhancement of the corporate value of theGroup.

12
Reference Documents for General Meeting of Shareholders

Convocation Notice

Career, Position and Duties at Asahi Holdings

Business Report

Name(Date of birth)

Audit Reports

CandidateNo.

Candidate
No.

Name
(Date of birth)

Career, Position and Duties at Asahi Holdings
April 1992:

Joined Nissho Iwai Corporation

March 2011:

Joined Asahi Pretec Corp.

Ownershipof Shares

Appointed as General Manager of
Accounting Division of Asahi
Pretec Corp.
April 2012:

Appointed as General Manager ofFinance & Accounting
Department of Asahi Holdings,
Inc.

December 2014: Appointed as Corporate Auditorof Asahi Americas Holdings, Inc.
June 2016:

Appointed as Corporate Auditorof Asahi Pretec Corp. (to present)

June 2017:

Appointed as Director andGeneral Manager of Finance &Accounting Department of Asahi
Holdings, Inc.

3
Amane Kojima(April 9, 1968)
To be Reelected

April 2018:

2,600
sharesAppointed as Director of Asahi
Americas Holdings, Inc.

October 2019: Appointed as Corporate Auditorof Asahi Americas Holdings, Inc.
(to present)
April 2020:

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

April 2020:

Appointed as Director andGeneral Manager of Financial
Planning Office of Asahi
Holdings, Inc. (to present)[Significant concurrent duties]
Corporate Auditor of Asahi Pretec Corp.
Corporate Auditor of Asahi Americas Holdings, Inc.
Attendance at the Board of Directors meeting: 10 out of 10 meetings(Reason for nomination as a candidate)
Mr. Kojima engages in the management of the Group as a Director of the Company and as a
Corporate Auditor of the Group companies. As General Manager of Financial Planning Office, he isin charge of financial and accounting matters for the entire Group. In addition, as a certified public
accountant in the US, he has extensive expertise and practical capabilities. The Company therefore
requests his election as a Director of the Company based on its judgment that his continued tenureof office as a Director would contribute to the sustainable enhancement of the corporate value of
the Group.

13
Reference Documents for General Meeting of Shareholders

January 2008:

Appointed as General Manager of
Human Resources Department,
Administration Division of Asahi
Pretec Corp.

April 2009:

Appointed as General Manager of
Photosensitive Material Business
Department of Asahi Pretec Corp.

April 2013:

Appointed as Director of Japan
Waste Corporation

July 2014:

Appointed as Senior Vice
President of Fuji Medical
Instruments MFG. Co., Ltd.

4
Hiroyuki Nakanishi(July 5, 1962)
To be Reelected

June 2016:

Appointed as President & CEO of
Fuji Medical Instruments MFG.
Co., Ltd.

April 2018:

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

June 2018:

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

13,500sharesConvocation Notice

Joined Asahi Pretec Corp.

Reference Documents for
General Meeting of Shareholders

April 1986:

Ownershipof Shares

Business Report

Career, Position and Duties at Asahi Holdings[Significant concurrent duties]
Representative Director and President of Asahi
Pretec Corp.
Attendance at the Board of Directors meeting: 10 out of 10 meetings(Reason for nomination as a candidate)
Mr. Nakanishi engages in the management of the Group as a Director of the Company and as a
Representative Director of the Group companies, having deep insight and abundant experience inoverall 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 the environmental preservation businesswould contribute to the sustainable enhancement of the corporate value of the Group.

Audit Reports(Note) There are no special interests between each candidate and the Company.

Consolidated Financial
Statements

Name(Date of birth)

Financial Statements

CandidateNo.

14
Reference Documents for General Meeting of Shareholders

Attached documents
Business Report (April 1, 2019 through March 31, 2020)
1. Current Status of the Group(1) Status of business for the fiscal year
1) Circumstances and results of business
During the consolidated fiscal year ended March 31, 2020, the Japanese economy showedsigns of moderate recovery, backed by improvements in the employment and income
environment. Meanwhile, prospects in the international and domestic markets remained
opaque due to the spread of novel coronavirus disease in Japan and overseas, in addition to
decreased personal spending after the consumption tax hike and slowdowns in the global
economy triggered by the U.S.-China trade dispute.
Under these conditions, the Asahi Holdings Group (the “Group”)’s results in each businesssegment were as follows. During this consolidated fiscal year, the Company transferred its
equity interest in Fuji Medical Instruments MFG. Co., Ltd., a consolidated subsidiary of theCompany. Businesses of Fuji Medical Instruments and its subsidiary that were previouslyclassified under “Life & Health business” have consequently been reclassified as discontinued
operations. In addition, beginning in this consolidated fiscal year, the Group reduced thenumber of reporting segments from three: “Precious Metals business,” “Environmental
Preservation business” and “Life & Health business” to two: “Precious Metals business” and“Environmental Preservation business.”
Precious Metals business segment
Revenue: 113,755 million yen (up 29.6% YOY)
Revenue from business in the precious metal recycling sector in Japan, South Korea andMalaysia expanded from the previous year. Also, the revenue of precious metal refining
business in North America improved from the previous year. In order to further enhance theefficiency and profitability of precious metal refining in North America, the Company decided
to discard the gold and silver refining facilities of Asahi Refining Florida Inc. and posted an
impairment loss on its fixed assets. However, revenue and operating income in this segment
increased significantly from the previous year.
Environmental Preservation business segment
Revenue: 20,716 million yen (up 6.7% YOY)
Revenue and operating income in this segment posted a year-on-year increase as theCompany worked to develop new projects and strengthened mutual cooperation while
capitalizing on the strengths of the respective group companies.
As a result of the above, operating income, profit before tax, profit, and profit attributableto owners of parent all achieved historic highs. In terms of the performance for thisconsolidated fiscal year, revenue was 135,563 million yen, a year-on-year increase of 25,150
million yen (+22.8 percent). Operating income was 20,119 million yen, an increase of 6,676
million yen (+49.7 percent) year-on-year. Profit before tax was 17,650 million yen, a yearon-year increase of 5,298 million yen (+42.9 percent). Profit was 9,846 million yen, a year-

15
Status of business for the fiscal year

Operating
Income(Millions of yen)

Ratio (%)

YOY change(%)

113,755

83.9

29.6

18,022

20,716

15.3

6.7

4,355

1,090
135,563

0.8
100.0

22.8

(2,258)
20,119

Revenue
Operating Income
ROE

135,563 million yen
20,119 million yen
14.4%

Up 22.8% YOY
Up 49.7% YOY
Up 0.8% YOY2) Capital expenditure
Capital expenditure made in the fiscal year totaled 4,152 million yen. The main expenditure
was an investment in buildings, machinery and equipment.
3) Financing
The Company issued the bonds to finance projects that have an environmental improvement
impact as follows:
Date ofRedemption
Company name
Type of bonds
Issue amountissuancedate
Asahi Holdings,
Unsecured
5,000 million
March 31, 2020
March 31, 2025
Inc.
bonds
yen
4) Assignment, absorption-type split and incorporation-type split of businessNot applicable for the fiscal year5) Acquisition of the business of other companies
Not applicable for the fiscal year6) Succession of rights and obligations pertaining to the business of other corporations,etc., through an absorption-type merger or an absorption-type split
Not applicable for the fiscal year7) Acquisition or disposal of shares or other equity or share options of other companies
As of August 1, 2019, all shares of KOEIKOGYO CO., LTD., a consolidated subsidiary of
the Company, were transferred to Eiwa Facilities Co., Ltd.

16
Status of business for the fiscal year

Convocation Notice
Reference Documents for
General Meeting of Shareholders

Precious Metals
business
Environmental
Preservation business
Other
Total

Revenue(Millions of yen)

Business Report

Category

Consolidated Financial
Statements<Breakdown of revenue and operating income>Financial Statements

Revenue and operating income were composed of the following:

Audit Reports

on-year increase of 845 million yen (+9.4 percent). Profit attributable to owners of parent was
9,846 million yen, a year-on-year increase of 845 million yen (+9.4 percent). By segment,
revenue in the Precious Metals business was 113,755 million yen, a year-on-year increase of
25,951 million yen (+29.6 percent). In the Environmental Preservation business, revenue was
20,716 million yen, an increase of 1,308 million yen (+6.7 percent) year-on-year.

As of March 13, 2020, 60% of all shares of Fuji Medical Instruments MFG. Co., Ltd., aconsolidated subsidiary of the Company, were transferred to Johnson Health Tech Co., Ltd.
As a result, Fuji Medical Instruments MFG. Co., Ltd. became an equity method affiliate.

17
Status of business for the fiscal year

10th term
April 1, 2018
through
March 31, 201911th term
April 1, 2019
through
March 31, 2020
(Current fiscal
year)(Millions ofyen)(Millions ofyen)

106,828

115,797

110,412

135,563

2,038

13,791

13,442

20,119(Millions ofyen)(1,213)

9,416

9,000

9,846

(Yen)

(37.24)270.77228.14250.24

88,976

131,484

160,272

229,958

44,82764,43567,804

69,174

Category

Revenue
Operating income
Profit (loss)
attributable to ownersof parent
Basic earnings (loss)
per share
Total assets
Total equity(Millions ofyen)(Millions ofyen)

Audit Reports

Financial Statements

Consolidated Financial
Statements

Equity attributable to(Yen)owners of parent per
1,359.02
1,627.20
1,723.16
1,758.00
share
Note:
Beginning with this term, businesses of Fuji Medical Instruments MFG. Co., Ltd. have been
reclassified as discontinued operations. Consequently, income from discontinued operations arepresented separately from continuing operations in the consolidated statement of income. Accordingly,
revenue and operating income are presented in amounts from continuing operations. In addition, theCompany also restated revenue and operating income from the previous consolidated fiscal year toamounts from continuing operations.

Convocation Notice

9th term
April 1, 2017
through
March 31, 2018

Reference Documents for
General Meeting of Shareholders

8th term
April 1, 2016
through
March 31, 2017

Business Report(2) Property and profit/loss

18
Property and profit/loss

(3) Major sales offices and plants (as of March 31, 2020)
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
Asahi Pretec Corp.
Main office
Head offices

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.)19
Major sales offices and plants

Overseas
subsidiaries

Convocation Notice

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)
Fukuoka (Koga-shi, Fukuoka Pref.)Asahi G&S Sdn. Bhd. (Malaysia)
Asahi Pretec Korea Co., Ltd. (Korea)

Reference Documents for
General Meeting of Shareholders

PlantsConsolidated Financial
Statements

Business ReportJapan Waste Corporation
Main office7-12 Marunouchi 1-chome, Chiyoda-ku, Tokyo
Head office7-12 Marunouchi 1-chome, Chiyoda-ku, Tokyo
Business office
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)
INTER CENTRAL, INC. (Chuo-ku, Tokyo)

Audit Reports

Financial Statements

Asahi Americas Holdings, Inc.
Main office7-12 Marunouchi 1-chome, Chiyoda-ku, Tokyo
Head office7-12 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.)

20
Major sales offices and plants

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

Capital4,480 million
yen
400 million
yen
10 million
yen
10 million
yen

Our voting
right ratio

Major business100.0%

Precious Metals business andEnvironmental Preservation business100.0%

Environmental Preservation business100.0%

Life & Health business100.0%

Precious Metals business(Note) Asahi Life & Health Corporation, the Company’s subsidiary, and Japan Waste
Corporation carried out an absorption-type merger with Japan Waste Corporation as thesurviving company on April 1, 2020.
3) 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:
85,838 million yen

21
Significant parent company and subsidiaries

Change from the end of previous fiscal year
–468 (down 460)

(Note) 1. 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 andfixed-term employees, annual average number of persons are shown separately inbrackets.
2. The number of employees decreased by 468 (the number of part-timers and fixed-term
employees decreased by 460) compared to the end of previous fiscal year. This ismainly because the number of employees of Fuji Medical Instruments MFG. Co., Ltd.,
which has been reclassified as discontinued operations, were excluded.
2) Employees of the Company
Change from the end
Number of employeesof previous fiscal year
44 (2)–10 (0)

Average age
41 years and8 months

Average length ofservice
5 years and2 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.

22
Principal businesses and Employees

Convocation Notice
Reference Documents for
General Meeting of Shareholders
Business Report

1) Employees of the Group
Number of employees
1,574 (153)

Consolidated Financial
Statements(6) Employees (as of March 31, 2020)

Financial Statements

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)

Audit Reports(5) Principal businesses (as of March 31, 2020)

(7) Major financial institutions with loans to the Company (as of March 31, 2020)
Financial institutions
Loan amountMUFG Bank, Ltd.
55,415 million yen
Mizuho Bank, Ltd.
38,190 million yen
Syndicated loan
18,879 million yen
Sumitomo Mitsui Banking Corporation
10,338 million yen(Note) The syndicated loan is extended by two banks with MUFG Bank, Ltd. as the lead bank.

(8) Other important matters relating to the current state of the Group
Asahi Life & Health Corporation, the Company’s subsidiary, and Japan Waste Corporation
carried out an absorption-type merger with Japan Waste Corporation as the surviving
company on April 1, 2020.

(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.
○ Improve treatment and refining processes for higher quality, lower cost and higher
efficiency.
○ Realize production and sales of high value-added precious metal products.
○ Promote the business globally and establish our position as the world’s leading brand.
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.
○ Enhance our capabilities for recycling and treating waste that is difficult to treat, andestablish a brand that can surpass competitors.
○ Expand our business through appropriate capital investments and strengthen our revenue
base.
○ Link organically the network of Group companies across the country and expand thescope of our operations.

23
Major financial institutions with loans to the Company,
Other important matters relating to the current state of the Group and Challenges to be addressedOur Vision for 70th Anniversary of Our Founding:● Precious Metals business: Be the number one precious metal refining in the world● Environmental Preservation business: Be a leader in the environmental business in Japan

Audit Reports

Financial Statements

Consolidated Financial
Statements

Progress Reports of the Second Year of Mid-term Business Plan:
In the 8th Mid-term Business Plan, focusing on the vision for 70th anniversary of our founding foreach business, we promote activities to grow over the medium to long-term while maintaining the
profitability.
As the performance of the second year has shown solid growth, we are progressing at a good rate
toward an achievement of the plan.
We will strive further to achieve the goals of the 8th Mid-term Business Plan.

Business Report

Basic Policy:
1. Building a new business foundation that will support the coming era
2. Improving productivity and work styles utilizing information processing technology
3. Sharing the Asahi Way with all employees group-wide

Reference Documents for
General Meeting of Shareholders

Convocation Notice■ The 8th Mid-term Business Plan (the 10th fiscal term to the 12th fiscal term)
Slogan: Building a global company that pursues originality and growth24
Challenges to be addressed■ Reference: Initiatives for the achievement of SDGs
Sustainability vision:
Asahi Holdings Group’s core mission is to “do our part to protect the natural environment andresources,” based on which the Group has developed business activities over the years. Our businessactivities themselves contribute to sustainability, and therefore both business growth and resolution ofsocial issues are realized.
Now that the efforts of the whole society including corporations are needed, the Group will strive toachieve our mission of working proactively toward themes and goals, aiming to resolve issues forwhich a significant contribution from us is expected.
Sustainability promotion system:
Within Asahi Holdings Group, the “SDGs Promotion Meeting” supervised by the Chairman & CEOleads discussions and decision-making on the establishment of policies focusing on key SDG themes,monitoring of achievement status of goals, and communication inside and outside of the Company.

SDGs Promotion Meeting
Supervisor Chairman & CEO
SDGs Promotion Meeting

Board of Directors

Human Resourceand General
Administration
Department
Corporate
Planning &Communications
Department

Each Department

25
Challenges to be addressed

Technical Division

Domestic

Overseas

Consolidated
Subsidiaries

Consolidated
Subsidiaries

Group Executive
Committee

13 CLIMATE ACTION

15 LIFE ON LAND

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

6 CLEAN WATER AND
SANITATION

9 INDUSTRY,INNOVATION AND
INFRASTRUCTURE
11 SUSTAINABLE
CITIES ANDCOMMUNITIES
12 RESPONSIBLE
CONSUMPTION AND
PRODUCTION
14 LIFE BELOW
WATER

15 LIFE ON LAND

TargetTarget
410 tons by
FY2030 (1.5 times
that of FY2015)

Reduction of CO2
emissions:1.465 million tons
by FY2030 (1.5times that of
FY2015)

Amount ofappropriate
disposal ofindustrial waste:

0.5 million tons by
FY2030 (1.6 times
that of FY2015)

Audit Reports

Total amount ofprecious metal
recycling:

Convocation Notice

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

Reference Documents for
General Meeting of Shareholders

12 RESPONSIBLE
CONSUMPTION AND
PRODUCTION

We will expand the provision of
raw materials that do notinclude conflict minerals andprecious metals produced from
scrap
containing
precious
metals in consideration ofhumanrightsandtheenvironment and promoteresponsible precious metal
management.

Business Report

9 INDUSTRY,INNOVATION AND
INFRASTRUCTURE

3. Expanding appropriate
disposal of industrial waste

Consolidated Financial
Statements

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

2. Precious metal provisionthat is safe for people,
society, and theenvironment

Financial Statements

SDGs Key Themes
1. Expanding precious metal
recycling

26
Challenges to be addressed4. Reducing CO2 emissions

5. Enriching foundations forwork-life balance anddiversity

6. Encouragement andsupport for SDG 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,
healthmanagement,
anddiversity promotion, we will
work to raise job satisfaction byenriching foundations to allow
for diverse human resources totake active roles.

We will encourage and support
extracurricular activities that
contribute to SDGs such asindividual and group volunteer
work as “Asahi Group Holdings
SDGs Activities.”

7 AFFORDABLE AND
CLEAN ENERGY

12 RESPONSIBLE
CONSUMPTION AND
PRODUCTION

3 GOOD HEALTH AND
WELL-BEING

4 QUALITYEDUCATION

5 GENDER EQUALITY
13 CLIMATE ACTION

17 PARTNERSHIPSFOR THE GOALS

TargetEmissions of CO2
derived fromenergy including
electricity andgasoline:

8 DECENT WORK AND
ECONOMIC GROWTH

Target–26% compared to
FY201527
Challenges to be addressed

Achievement rateof rest intervals ofat least 11 hours:

100% by the endof FY2020

Usage rate ofrefreshment leave(at least 3
consecutive days):
Percentage offemale employees
in managerial
positions:
Employment rateof people withdisabilities:

100% by the endof FY2020

Equal to male
employees by theend of FY2030
At least 2.5% by
the end of FY2030

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 consists of the Executive Directors
who are familiar with the fields of businesses, technology andmanagement and the Outside Directors who have the diversified expert
knowledge necessary for the corporate management. In order to carry out
an effective and active discussion at the Board of Directors meeting, thenumber of Directors is eight (8) including three (3) Independent Outside
Directors. All Directors actively exchange opinions freely concerning
important subjects, such as the Group’s management strategies andbusiness plan.
The Group has adopted a company with an Audit and Supervisory
Committee as a form of organization under the Companies Act andappoints three (3) Independent Outside Directors.
As a result, we enhance the function to supervise the Board of Directors,
and realize rapid decision-making by delegating determination ofimportant business operations to the Executive Directors, to raisemanagement efficiency.
We have established the “Compensation Committee” and “Nominating
Committee” that respectively consist of three (3) members including two(2) Independent Outside Directors as an advisory body of the Board of
Directors in order to further enhance corporate governance by securingtransparency, fairness and objectivity in appointing and dismissing the
Directors and key management candidates and determining the amountof compensation of Directors.

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/

28
Challenges to be addressedCorporate Governance Structure
General Meeting of Shareholders
Appointment/Dismissal

Appointment/Dismissal

Appointment/Dismissal

Board of Directors (8 Directors)

Audit/Supervisory(including 3 Independent
Outside Directors)

Inquiry/Reply
Supervisory/
Appointment/
Dismissal

Collaboration

Nominating Committee,
Compensation Committee
3 Directors for each(including 2 Independent
Outside Directors)

Representative
Director

Group Executive
Committee

AssistDirection/Report

Audit andSupervisory
Committee
Secretariat

Audit Department

Internal Control Promotion Meeting
Safety Management Meeting

Accounting Auditor

4 Directors with executive
authority over operations

Audit and Supervisory
Committee
4 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.

29
Challenges to be addressed129,000,000 shares
1) Number of shares authorized:
39,854,344 shares
2) Number of shares issued:
17,042
3) Number of shareholders:
4) Major shareholders (top 10 shareholders)Number ofshares held(Thousands ofshares)Percentage ofshares held(%)

Japan Trustee Services Bank, Ltd. (Trust account)

3,506

8.81

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

3,075

7.73

STATE STREET BANK AND TRUST COMPANY 505025

1,039

2.61

Mitsuharu Terayama

887

2.23

Masamichi Terayama

802

2.01

Asahi Employee Stock Ownership Plan

736

1.85

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

709

1.78

JP MORGAN CHASE BANK 385151

693

1.74

Japan Trustee Services Bank, Ltd. (Trust account 9)

652

1.63

RE FUND 107-CLIENT AC

540

1.35

Shareholders

Shareholder Distribution
Individuals, Others
Financial Institutions
Foreign Corporations, etc.
General Corporations, Other Corporations
Securities Companies

Consolidated Financial
Statements(Note) Percentage of shares held is calculated by excluding treasury stock.

Business Report(1) Shares (as of March 31, 2020)

Reference Documents for
General Meeting of Shareholders

Convocation Notice

2. Current state of the Company

15,325 thousand shares (38.45%)
12,396 thousand shares (31.10%)
10,233 thousand shares (25.68%)
1,289 thousand shares (3.23%)611 thousand shares (1.53%)

Financial Statements(2) Stock options, etc.

Audit Reports

Not applicable

30
Shares and Stock options, etc.

(3) Board members and corporate officers
1) Directors (as of March 31, 2020)
Position
Chairman & CEO

Name
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.
Representative Director andPresident, Asahi Americas Holdings,
Inc.
General Manager of Finance &Accounting Department
Corporate Auditor, Asahi Pretec
Corp.
Corporate Auditor, Asahi Americas
Holdings, Inc.
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 meeting of the 6th Annual General Meeting of
Shareholders held on June 16, 2015, the Company made a transition to a Board with Audit
and Supervisory Committee as of the same date.
2. Directors/Audit and Supervisory Committee Members 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 board members under theprovisions of the Tokyo Stock Exchange, and filed such status with the exchange.

31
Board members and corporate officers

Convocation Notice
Audit Reports

Financial Statements

Consolidated Financial
Statements

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.

Reference Documents for
General Meeting of Shareholders

2) Directors who resigned during the fiscal year
At the conclusion of the 10th Annual General Meeting of Shareholders held on June 18,
2019, Directors/Audit and Supervisory Committee Members Shoji Morii and Yukio Tanabe
retired due to expiration of their term of office.

32
Board members and corporate officers

4) Compensation, etc., for Directors
Total compensation, etc., for the fiscal year
Category
Directors not serving as an Audit andSupervisory Committee Member(Outside Director)
Directors serving as an Audit andSupervisory Committee Member(Outside Directors)
Total(Outside Directors)

Number of persons
subject to payment

Payment amount5(0)

111 million yen
(0)

6
(4)

42 million yen
(19)

11
(4)

154 million yen(19)(Notes) 1. The amount of compensation for Directors not serving as an Audit and Supervisory
Committee Member does not include the employee salaries of Directors who serve
concurrently as employees.
2. At the 6th Annual General Meeting of Shareholders held on June 16, 2015, it was
resolved that the limit of compensation for Directors not serving as Audit andSupervisory Committee Members be up to an annual 200 million yen (not including
the portion of salary as employees) and that the limit of compensation for Directors
serving as Audit and Supervisory Committee Members be up to an annual 100
million yen.
3. The above amounts of compensation do not include the 22 million yen provision ofreserve for the performance-based stock compensation plan for four (4) Directors(excluding Directors serving as the Audit and Supervisory Committee Members),
which was approved at the 9th Annual General Meeting of Shareholders held on June
19, 2018, and recorded for the fiscal year under review.

33
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 considerable expertise and experiencein environmental preservation, including waste treatment
Yuji Kimura
and recycling and has been submitting advice /recommendations to ensure the validity andappropriateness of making decisions on deliberations ofagenda and other matters.
She attended all the meetings of the Board of Directors andthe Audit and Supervisory Committee held during the
fiscal year. She has been submitting advice /Kyoko
recommendations to ensure the validity andKanazawa
appropriateness of making decisions on deliberations ofagenda and other matters from the highly professional
viewpoint for laws as a lawyer.
He attended all the meetings of the Board of Directors andthe Audit and Supervisory Committee held on and after his
appointment on June 18, 2019. He has been submitting
Yoshinori Hara advice / recommendations to ensure the validity andappropriateness of making decisions on deliberations ofagenda and other matters from the highly professional
viewpoint for service innovation.

34
Board members and corporate officers

Convocation Notice
Reference Documents for
General Meeting of Shareholders
Business Report

Activities

Consolidated Financial
Statements

Director(Audit andSupervisory
Committee
Member)Name

Financial Statements

Category

Audit Reports

5) 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.
31 million yen
55 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) 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.

35
Accounting Auditor

Dividend policy: The Company will maintain a payout ratio of 50% or more of
consolidated net profit.
Our basic policy is to improve corporate value by maintaining stable profitability andsustainable growth and meet the expectations of shareholders by continuously paying a stabledividend. In addition, it is also important for the Company to strengthen internal reserves toprovide for investment in growing fields and new business development.
Under the policy above, for distribution of surplus, we intend to maintain a consolidated
payout ratio of 50% or more, taking into account the result of each fiscal year, further
enhancement of financial structure and the Group’s management strategy.

Audit Reports

Financial Statements

Consolidated Financial
Statements

Business Report

Starting from the fiscal year 2018, the Company introduced a special benefit plan forshareholders.

Convocation Notice

Reference Documents for
General Meeting of Shareholders(5) Policy to determine the distribution, etc., of surplus

36
Policy to determine the distribution, etc., of surplus

Consolidated Financial Statements
Consolidated Statement of Financial Position (as of March 31, 2020)(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

187,604
22,908
119,754
37,748
2,029
93
5,069

Non-current assets
Property, plant and equipment
Goodwill
Intangible assets
Investments accounted forusing equity method
Deferred tax assets
Net defined benefit asset

Account
LIABILITIESAmount42,35434,953
1,604
529

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

153,137
13,710121,873
4,624
6,991
1,293
4,643
7,645
4,928
1,453
172
1,066

3,254

Other non-current liabilities

24

Total liabilities
EQUITY
Equity attributable toFinancial assets
683
owners of parent
Other non-current assets
42
Capital stock
Capital surplus
Treasury stock
Retained earnings
Other components of equity
Total equity
229,958
Total liabilities and equity
Total assets(Note) Amounts less than one million yen are omitted.

160,783

1,132
155

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Consolidated Statement of Financial Position

69,174
7,790
10,755(956)
60,797(9,212)
69,174229,958(8,179)
20,11924(2,440)87(140)(2,469)17,650(6,230)11,419(1,573)
9,846

9,846
－

Reference Documents for
General Meeting of Shareholders(45)

Business Report(7,174)
195(1,154)

Audit Reports

Financial Statements

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

135,563(107,264)
28,298

Consolidated Financial
Statements

Account
Continuing operations
Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other operating income
Other operating expenses
Share of loss of investments accounted for using
equity method
Operating income
Finance income
Finance cost
Other non-operating income
Other non-operating expenses
Profit before tax
Income tax expenses
Profit from continuing operations
Discontinued operations
Loss from discontinued operations
Profit(Millions of yen)AmountConvocation Notice

Consolidated Statement of Income (April 1, 2019 to March 31, 2020)38
Consolidated Statement of Income

Consolidated Statement of Changes in Equity (April 1, 2019 to March 31, 2020)(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,
2019
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury
stock
Dividends
Changes due to lossof control ofsubsidiaries
Reclassified fromother components ofequity to retained
earnings
Share-based paymenttransactions
Total transactions withownersBalance at March 31,
2020

7,790

10,353(955)

55,547(3,737)(1,203)(461)(3,805)(461)(3,805)

9,846

－

－

－

9,846

(0)
(4,721)
337

125
64
－

401

(0)

(4,596)

－

－

7,790

10,755(956)

60,797(4,198)(5,008)(Note) Amounts less than one million yen are omitted.

39
Consolidated Statement of Changes in Equity

(4,931)67,80467,804

－

9,846

9,846

(15)

125

(4,155)(4,155)(4,155)(15)

125(4,155)

5,690

5,690

－

(0)

(0)

－

(4,721)(4,721)

－

337

337

(125)

－

－

－

64

64

0

(125)

0

(125)

(125)

(4,320)(4,320)(5)－(9,212)

69,174

69,174

Reference Documents for
General Meeting of Shareholders－

Business Report

8

Total

Consolidated Financial
Statements

Balance at April 1,
2019
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury
stock
Dividends
Changes due to lossof control ofsubsidiaries
Reclassified fromother components ofequity to retained
earnings
Share-based paymenttransactions
Total transactions withownersBalance at March 31,
2020

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.

40Consolidated Statement of Changes in Equity

Financial Statements
Balance Sheet (as of March 31, 2020)(Millions of yen)Account

AmountASSETS
Current assets

52,733

Cash and deposits

13,466

Short-term loans to affiliatedcompanies

54,747

Income taxes receivable

1,835

Other

31

Allowance for doubtful
accounts(17,347)

Non-current assets

33,104

Property, plant andequipment

5,500

Buildings

2,144

Tools, equipment andfixtures
Land

0
3,355

Intangible assets

15

Software15

Investments and otherassetsShares of affiliatedcompanies

27,58827,519Deferred tax assets

69

Other

0

Total assets

85,838

Account
LIABILITIESCurrent liabilities
Short-term loans payable
Current portion of long-termloans 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
Total Net Assets
Total Liabilities and Net
Assets(Note) Amounts less than one million yen are omitted.

41
Balance Sheet

Amount20,541100
20,304
43
12
19
53
7
5,170
5,000
27
50
92
25,711
60,126
7,790
27,651
9,364
18,28725,63925,63925,639(956)
60,126
85,838301
10,273000010,273

164
(13)

150
10,122

Reference Documents for
General Meeting of Shareholders

26
71
204

488

Business Report

187
297
3

Audit Reports

Financial Statements

Operating revenue
Operating expenses
Operating income
Non-operating income
Interest income
Guarantee commission received
Other
Non-operating expenses
Interest expenses
Bond issuance cost
Provision of allowance for doubtful accounts
Ordinary income
Extraordinary gain
Gains on sale of non-current assets
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.

Consolidated Financial
Statements

Account(Millions of yen)Amount11,398
1,310
10,087

Convocation NoticeStatement of Income (April 1, 2019 to March 31, 2020)42
Statement of Income

Statement of Changes in Net Assets (April 1, 2019 to March 31, 2020)(Millions of yen)
Shareholders’ equity
Capital surplus
Retained earnings
Other retained
earnings
CapitalOther capitalreserve
surplusRetained earnings
carried forward

Capitalstock
Balance atApril 1, 2019
Changes during
the period
Dividends
from surplus
Net profit
Purchase oftreasury stock
Total changes
during theperiodBalance at
March 31, 2020

7,790

9,364

20,295

(955)

Total
shareholders’equity54,782(4,778)(4,778)

10,122

10,122
(0)

(0)

－

－

－

5,343

(0)

5,343

7,790

9,364

18,28725,639(956)

60,126

Total net
assetsBalance atApril 1, 2019
Changes during
the period
Dividends
from surplus
Net profit
Purchase oftreasury stock
Total changes
during theperiodBalance at
March 31, 2020

18,287

Treasurystock

54,782(4,778)
10,122(0)
5,343
60,126(Note) Amounts less than one million yen are omitted.

43
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, 2019 to March 31, 2020.
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 12, 2020
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 the45
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 12, 2020
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 11th fiscal year from April 1, 2019 to March 31, 2020, 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

48
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 andconsolidated statements of changes in equity and notes to consolidated financial statements), for the

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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, in accordance with the audit policies and important audit
items, and in cooperation with the audit department and internal control division, each Audit
and Supervisory Committee Member attended important meetings, received reports on thestatus 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 Chairman & CEO and Representative Director and President. Regarding the Company’s
major subsidiaries, the processes of determining the execution of business operations were
investigated by attending important meetings, receiving reports on businesses and requesting
explanations as necessary.

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 the
11th fiscal year (from April 1, 2019 to March 31, 2020), 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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 12, 2020
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● Acquisition of RJC certification
Asahi Pretec Corp., one of the companies in the Group, acquired RJC (Responsible Jewellery Council)
certification on July 29, 2019. The corporation is a member of the supply chain for precious metals
like gold and platinum, and was able to clear the RJCʼs strict standards audit in order to become thefourth company and first refinery in Japan to acquire the certification.
*About RJC (Responsible Jewellery Council)
The RJC is an international non-profit organization that evaluates transparency, ethics andenvironmental efforts for the handling of gold, platinum, diamonds and other precious metals in thejewelry industry. To obtain certification, applicants must pass a third-party certification audit to ensure
they meet rigorous standards including corporate ethics, legal compliance, human rights, working
environment and environmental protection.
● Issuance of Green Bond
The Company issued a Green Bond in March 2020 to procure funds to introduce eco-friendly facilities
and equipment.
A Green Bond is a bond used to finance projects that have an environmental improvement impact(green projects) including measures to combat global warming and promote renewable energy. This is
the first Green Bond issued in the non-ferrous metal industry in Japan.
Regarding the eligibility of this Green Bond and its third-party evaluation, Rating and Investment
Information, Inc. has given it a “GA1”, the top rating in R&I Green Bond Assessment.
Moving forward, the Group will continue to launch initiatives aimed at the “resolution of the earth’s
sustainability.”

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TOPICS