Consolidated Financial Results for the Third Quarter Ended December 31, 2020
Asahi Holdings, Inc. [IFRS]January 29, 2021

Stock code:
Shares listed:

5857
Tokyo Stock Exchange (First Section)

URL:
Representative:

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

For further information please contact:

Kunihiko Chogo, General Manager, Corporate Planning &Communications Department

Filing date of Quarterly Report:(Phone) +81–3–6270–1833
February 12, 2021

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

Investor conference for the financial results:

No(Rounded down to the nearest million yen)
1. Results of the nine months ended December 31, 2020 (From April 1, 2020 to December 31, 2020)(1) Results of operations (cumulative)(Percentage: Changes relative to corresponding previous period)
OperatingprofitRevenue
The nine months ended
December 31, 2020
December 31, 2019

Millions of yen

120,033
99,108%Millions of yen

21.1 17,248
26.3 12,246

Profit before
tax%

Basic earnings per share
The nine months ended
December 31, 2020
December 31, 2019

Millions of yen

40.8 17,332– 12,070

Profitattributable toowners of parent

Profit% Millions of yen

43.6 11,961
36.0 6,402%

Millions of yen

86.8 11,961
2.1 6,402%

Total
comprehensive
incomeMillions of yen%

86.8 14,387 153.1
2.1 5,683 (33.9)

Diluted earnings per share

Yen

Yen

303.98162.72301.93
162.17(Notes) 1. Since the Company transferred 60% of all shares in Fuji Medical Instruments MFG. Co., Ltd. in the fiscal
year ended March 31, 2020, this business was classified as discontinued operations with the amounts ofrevenue, operating profit and profit before tax presented as amounts for the continuing operations excluding
the discontinued operations.
2. Due to the retrospective application of the changes in accounting policies, the figures shown for the ninemonths ended December 31, 2019 are the figures after retrospective application and presentation of changes
relative to the corresponding previous period has been omitted for operating profit.
(2) Financial Position

As ofDecember 31, 2020
March 31, 2020

Total assets

Total equity

Equity attributable toowners of parent

Millions of yen

Millions of yen

Millions of yen

266,468
229,958

77,814
69,17477,814
69,174Equity attributable toowners of parent ratio
%

29.2
30.1

2. Dividend payments
Dividends per share

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

Second quarter

Third quarter

Year–end

Yen

Yen

Yen

Yen

Annual
Yen

–
–

60.00
80.00

–
–

70.00

130.0090.00

170.00(Note) Revisions in dividend forecast in the current quarter: Yes
For details, please refer to “Notice on the Revision of Financial Forecast and Revision of Dividend Forecast (Dividend
Increase)” made public on January 29, 2021.

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

OperatingprofitRevenue
Millions of yen

Year ending March 31, 2021 165,000(Percentage: Changes relative to corresponding previous period)% Millions of yen

21.7 24,000

Profit beforetax% Millions of yen

33.3 24,900

Profitattributable toowners of parent% Millions of yen%

41.1 25,000

153.9

Basic earnings
per shareYen

635.35(Note) Revisions in forecast in the current quarter: Yes
For details, please refer to “Notice on the Revision of Financial Forecast and Revision of Dividend Forecast (Dividend
Increase)” made public on January 29, 2021.
* Notes(1)
Changes in significant subsidiaries during the current quarter: No(2)

Changes in accounting policies and accounting estimates(i) Changes in accounting policies required by IFRS: No(ii) Changes other than (i) above: Yes(iii) Changes in accounting estimates: No
For details, please refer to page 12 “2. Condensed Consolidated Financial Statements (7) Notes on Condensed
Consolidated Financial Statements (3. Changes in accounting policies).”(3)

Number of issued shares (common stock)(i)

Number of issued shares at the quarter end (including treasury stock)
As of December 31, 2020

39,854,344 shares

As of March 31, 2020

39,854,344 shares(ii) Number of treasury stock at the quarter end
As of December 31, 2020

505,837 shares

As of March 31, 2020

505,637 shares(iii) Averaged number of shares during the period (quarterly cumulative period)
Nine months ended December 31, 2020

39,348,579 shares

Nine months ended December 31, 201939,348,848 shares* The quarterly financial statements are not subject to quarterly reviews by accounting auditors.
* Statement regarding the proper use of financial forecasts and other special remarks(Notes on forward looking statements, etc.)
These forecast performance figures are based on the information currently available to the Company’s
management and certain assumptions judged rational. Accordingly, they are not meant to be a commitment by
the Company. There might be cases in which actual results materially differ from forecasts of this report. Pleaserefer to page 3 “1. Qualitative Information (3) Consolidated Performance Forecasts” for the assumptions used andother notes.

【Appendix】

Table of contents of the appendix
1. Qualitative Information .................................................................................................................................................. 2(1) Consolidated Business Performance.......................................................................................................................... 2(2) Consolidated Financial Position and Cash Flows for the Third Quarter of the Fiscal Year Ending March 31, 2021
2(3) Consolidated Performance Forecasts......................................................................................................................... 3
2. Condensed Consolidated Financial Statements ............................................................................................................ 5(1) Condensed Consolidated Statements of Financial Position ..................................................................................... 5(2) Condensed Consolidated Statements of Income for the Nine Months Ended December 31, 2020 ......................... 7(3) Condensed Consolidated Statements of Comprehensive Income for the Nine Months Ended December 31, 2020
8(4) Condensed Consolidated Statements of Changes in Equity..................................................................................... 9(5) Condensed Consolidated Statements of Cash Flows .............................................................................................. 11(6) Notes on Assumptions for Going Concern ............................................................................................................... 12(7) Notes on Condensed Consolidated Financial Statements ...................................................................................... 12
1. Reporting entity ..................................................................................................................................................... 12
2. Basis of preparation ............................................................................................................................................... 12
3. Changes in accounting policies .............................................................................................................................. 13
4. Significant accounting estimates and associated judgements ............................................................................. 13
5. Segment information ............................................................................................................................................. 14
6. Impairment loss ..................................................................................................................................................... 16
7. Discontinued operations ........................................................................................................................................ 16
8. Subsequent events ................................................................................................................................................. 17-1-

1. Qualitative Information(1) Consolidated Business Performance
The Japanese economy continued to be in an extremely difficult situation during the nine months ended
December 31, 2020 due to problems associated with the global spread of the novel coronavirus disease (COVID–
19). Despite signs of the effects of economic measures by the Japanese government, the outlook remains opaquedue to negative factors such as another increase in the number of people infected with COVID-19. Under these
conditions, the Group’s results in each business segment were as follows.
Precious Metals business
Revenue and operating profit in precious metal recycling business in Japan and other countries increased
from the same period in the previous year thanks to the rise in precious metal prices and the stable achievementof precious metal collection in volume. Also, revenue and operating profit in precious metal refining business inNorth America expanded from the same period a year before thanks to increases in product processing and sales
as well as financial transactions. As a result, revenue and operating profit in the Precious Metals businessincreased from the same period in the previous year.
Environmental Preservation businessAlthough there were signs of improvement for some industrial and production activities, the total disposal
volume of industrial waste decreased. Given these market conditions, revenue in the Environmental
Preservation business decreased from the same period in the previous year, but operating profit was at almost
the same level compared with the same period in the previous year due to maintaining the utilization rate at
the Company’s facilities, increasing the price of processing and other factors.
As a result of the above, revenue during the nine months ended December 31, 2020 was 120,033 million yen,a year-on-year increase of 20,925 million yen (+21.1 percent). Operating profit was 17,248 million yen, a yearon-year increase of 5,001 million yen (+40.8 percent). Profit before tax was 17,332 million yen, a year-on-yearincrease of 5,261 million yen (+43.6 percent). Profit was 11,961 million yen, a year-on-year increase of 5,558
million yen (+86.8 percent). Profit attributable to owners of parent was therefore 11,961 million yen, an increaseof 5,558 million yen (+86.8 percent) year-on-year. By segment, revenue in the Precious Metals business was
105,581 million yen, a year-on-year increase of 22,825 million yen (+27.6 percent). In the Environmental
Preservation business, revenue was 14,452 million yen, a year-on-year decrease of 831 million yen (-5.4 percent).

(2) Consolidated Financial Position and Cash Flows for the Third Quarter of the Fiscal YearEnding March 31, 2021
As of December 31, 2020, total assets amounted to 266,468 million yen, up 36,510 million yen from theprevious fiscal year end. This was due mainly to a decrease of 15,193 million yen in cash and cash equivalents,
an increase of 24,354 million yen in trade and other receivables and an increase of 17,414 million yen in
inventories.
Total liabilities amounted to 188,654 million yen, up 27,871 million yen from the previous fiscal year end.
This was due mainly to an increase of 25,254 million yen in bonds and loans payable.
Total equity amounted to 77,814 million yen, up 8,639 million yen from the previous fiscal year end. This wasdue mainly to an increase of 14,387 million yen in comprehensive income and a decrease of 5,902 million yen
used for dividends.
As a result, the equity attributable to owners of parent ratio changed to 29.2%, from 30.1% at the end of theprevious fiscal year.
Net cash used in operating activities amounted to 10,812 million yen due mainly to 17,332 million yen of
profit before tax, 1,870 million yen of depreciation and amortization, 17,417 million yen of increase ininventories, 18,544 million yen of increase in trade and other receivables, 21,570 million yen of increase in trade,loans and other payables and 9,338 million yen of income taxes paid.
Net cash used in investing activities amounted to 4,495 million yen due mainly to 4,013 million yen ofpurchase of property, plant and equipment.
Net cash provided by financial activities amounted to 516 million yen due mainly to 6,744 million yen of net
increase in long–and short–term loans payable and 5,896 million yen of cash dividends paid.
As a result, cash and cash equivalents as of December 31, 2020 decreased 15,193 million yen from March 31,
2020, to 7,714 million yen.
-2-

(3) Consolidated Performance Forecasts① Reasons for the revision of financial forecast
In addition to precious metal prices trending above forecasts, in the precious metal recycling business, astable volume of precious metal collection has been realized. In the precious metal refining business inNorth America, the increase in product processing, sales, and financial transactions led to operating profit
and profit before tax that are expected to exceed the previously announced forecasts.
Additionally, following the introduction of a consolidated taxation system and organizational restructuring of
the Group as well as a detailed evaluation of the recoverability of deferred tax assets for tax losses carriedforward, we decided to record deferred tax assets. As a result, in the fourth quarter of the fiscal year ending
March 31, 2021, we expect to record income taxes-deferred (profit) of 8,200 million yen and to see a large
increase in profit attributable to owners of parent.
Revisions of the consolidated financial forecast for the year ending March 31, 2021
(April 1, 2020 to March 31, 2021)(Millions of yen)
ProfitBasic earnings
Operating profit Profit before tax attributable toper shareowners of parent

Revenue

Yen SenPrevious Forecast (A)165,000

21,00020,80014,000355

79

Revised forecast (B)165,000

24,00024,90025,000635

35Change (B-A)

0

3,000

4,100

11,000–Change (%)

0.0

14.3

19.7

78.6

–

135,563

18,01017,6509,846(Ref.)
Results for the previous FY

250

24

(FY ended March 31, 2020)② Reasons for the revision of dividend forecast
In our current revisions to the financial forecast for the fiscal year, revenue, operating profit, profit before
tax, and profit attributable to owners of parent all recorded all-time highs. Based on this decision, theCompany plans to increase its dividend payment at the end of fiscal year by 10 yen from 80 yen in theprevious forecast, and the total annual dividend of the year is planned to be 170 yen.
Revision of dividend forecast for the year ending March 31, 2021
Annual Dividend
End of second quarter
Previous forecast(Announced on July 29, 2020)

80 yen

Revised forecast
Results for the current FY
Results for the previous FY(FY ended March 31, 2020)

End of FY

Total
80 yen160 yen

90 yen

170 yen

70 yen

130 yen

80 yen60 yen(Note) As described in the “Notice on Stock Split, Partial Amendment of Articles of Incorporation, and Abolishmentof Shareholder Special Benefit Plan,” made public on January 29, 2021, the Company plans to institute a 2for-1 stock split for common shares which will become effective on April 1, 2021. The year-end dividend forthe fiscal year ending March 31, 2021, which has the record date of March 31, 2021, will be based on thenumber of shares prior to the stock split.
-3-

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

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

As of
December 31,
2020

Millions ofyenMillions ofyen

ASSETS
Current assets
Cash and cash equivalents

22,9087,714

Trade and other receivables
Inventories

119,754
37,748144,109
55,162

Income tax receivables
Other financial assets

2,029
93

422
692

Other current assets

5,069

13,429Total current assets

187,604

221,530

34,95337,028Goodwill
Intangible assets

1,604
529

1,604
590

Investments accounted for using equity method
Deferred tax assets

3,254
1,132

3,459
664

155
683

61
1,484

Non–current assets
Property, plant and equipment

Net defined benefit asset
Financial assets
Other non–current assets

42

44

Total non–current assets

42,35444,938229,958

266,468

Total assets-5-

As ofMarch 31,
2020

As of
December 31,
2020

Millions ofyenMillions ofyen

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

13,710121,873

24,294
147,116

Income tax payable
Other financial liabilities

4,624
6,991

2,730
3,590

Provisions
Other current liabilities

1,293
4,643

1,032
2,382

Total current liabilities
Non–current liabilities

153,137

181,147

Bonds and loans payable
Deferred tax liabilities

4,928
1,453

4,940
1,557

Net defined benefit liability
Other financial liabilities

172
1,066

183
824

Other non–current liabilities

24–

Total non–current liabilities

7,645

7,507

160,783

188,654

7,790

7,790

Capital surplus
Treasury stock

10,755(956)

10,909(956)

Retained earnings
Other components of equity

60,797(9,212)

66,779(6,708)

Total liabilities
EquityCapital stock

Total equity attributable to owners of parent

69,17477,814

Total equity

69,17477,814229,958

266,468

Total liabilities and equity-6-(2) Condensed Consolidated Statements of Income for the Nine Months Ended December 31,
2020
The nine months
ended December 31,
2019

The nine months
ended December 31,
2020

Millions of yen

Millions of yen

Continuing operations
Revenue
Cost of sales

99,108(80,905)

120,033(97,474)

Gross profit

18,20322,559Selling, general and administrative expenses
Other operating income(4,992)
161(5,221)
81

Other operating expenses
Share of profit (loss) of investments accounted for(1,125)
–

(372)
202

Operating profit

12,246

17,248Finance income
Finance costs

18
(141)

155
(67)

Other non–operating income
Other non–operating expenses

87
(140)

–
(3)

Profit before tax

12,07017,332

Income tax expenses(4,527)(5,371)

Profit from continuing operations

7,543

11,961(1,140)–

6,402

11,961

6,402

11,961

–

–

6,402

11,961

Basic earnings (loss) per share (Yen)Continuing operations

191.71303.98Discontinued operations(28.99)–Total

162.72303.98Continuing operations
Discontinued operations

191.06(28.89)301.93–

Total

162.17301.93using equity method

Discontinued operations
Profit (loss) from discontinued operations
ProfitProfit attributable to:
Owners of parent
Non–controlling interests
ProfitEarnings per share

Diluted earnings (loss) per share (Yen)-7-

(3) Condensed Consolidated Statements of Comprehensive Income for the Nine Months Ended
December 31, 2020

Profit

The nine months
ended December 31,
2019

The nine months
ended December 31,
2020

Millions of yen

Millions of yen

6,402

11,961

3

3

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

(6)

(77)

Share of other comprehensive income ofinvestments accounted for using equity method–2

Total items that will not be reclassified to profit
or loss

(2)

(71)

(753)
37

2,219
278

(716)

2,498

(719)

2,426

5,683

14,387

Owners of parent
Non–controlling interests

5,683
–

14,387–

Comprehensive income

5,683

14,387

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

operations

Balance at April 1, 2019
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Dividends
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Other comprehensive
income related to assets
held for sale
Total transactions withownersBalance at December 31,
2019

7,790
–

10,353–(955)–

55,547
6,402(3,737)–(1,203)
–

–

–

–

–

37

(753)

–

–

–

6,402

37

(753)

–
–

–
–

(0)
–

–
(4,721)

–
–

–
–

–

–

–

(2)

–

–

–

53

–

–

–

–

–

–

–

(0)

–

–

53

(0)

(4,724)

(0)

–

7,790

10,406(955)

57,225(3,700)(1,956)–(Millions of yen)
Equity attributable to owners of parent
Other components of equity
FinancialassetsRemeasuremeasured atments offair value
definedthrough otherbenefitcomprehenplans
sive income

Balance at April 1, 2019
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Dividends
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Other comprehensive
income related to assets
held for sale
Total transactions withownersBalance at December 31,
2019

Other
comprehensive income
related toassets held
for sale

Total

Total

Total equity

8
–

–
–

(4,931)–––67,804
6,402

67,804
6,402

3

(6)

(719)

–

(719)

(719)

3

(6)

(719)

–

5,683

5,683

–
–

–
–

–
–

–
–

(0)
(4,721)(0)(4,721)

(3)

6

2

–

–

–

–

–

–

–

53

53

(9)

–

(9)

9

–

–

(12)

6

(6)

9

(4,668)(4,668)(0)–(5,657)

9

68,81868,818-9-

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

operations

Balance at April 1, 2020
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Dividends
Reclassified from othercomponents of equity toretained earnings
Share–based paymenttransactions
Total transactions withownersBalance at December 31,
2020

7,790
–

10,755–(956)–

60,797
11,961(4,198)–(5,008)
–

–

–

–

–

278

2,219

–

–

–

11,961

278

2,219

–
–

–
–

(0)
–

–
(5,902)

–
–

–
–

–

–

–

(77)

–

–

–

154

–

–

–

–

–

154

(0)

(5,979)

–

–

7,790

10,909(956)

66,779(3,919)(2,788)(Millions of yen)
Equity attributable to owners of parent
Other components of equity
FinancialassetsRemeasuremeasured atments offair value
definedthrough otherbenefitcomprehenplans
sive income

Balance at April 1, 2020
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Dividends
Reclassified from othercomponents of equity toretained earnings
Share–based paymenttransactions
Total transactions withownersBalance at December 31,
2020

Total

Total

Total equity

(5)
–

–
–

(9,212)–

69,174
11,961

69,174
11,961

5

(77)

2,426

2,426

2,426

5

(77)

2,426

14,387

14,387

–
–

–
–

–
–

(0)
(5,902)(0)(5,902)

–

77

77

–

–

–

–

–

154

154

–

77

77

(5,748)(5,748)0–(6,708)77,81477,814- 10 -

(5) Condensed Consolidated Statements of Cash FlowsThe nine months
ended December
31, 2019

The nine months
ended December
31, 2020

Millions of yen

Millions of yen

Cash provided by (used in) operating activities
Profit before tax
Profit (loss) before tax from discontinued operations

12,070(486)

17,332–

Depreciation and amortization
Impairment loss

2,179
2,018

1,870
58

122
52

63
3

–

(202)

Decrease (increase) in inventories
Decrease (increase) in trade and other receivables(6,592)(60,531)(17,417)(18,544)

Increase (decrease) in trade, loans and other payables
Other, net

61,343(844)

21,570(8,103)

SubtotalInterest and dividend income received

9,330
19

(3,369)4Interest expenses paid
Income taxes paid

(40)
(5,891)(58)(9,338)

Income taxes refunded

1,394

1,948

4,812

(10,812)

(93)
–

(88)
88

(2,119)116(4,013)43

Purchase of intangible assets
Proceeds from sales of shares of subsidiaries

(146)
–

(178)
162

Proceeds from sales and redemption of investments
Other, net

216
44

–
(509)

Net cash provided by (used in) investing activities
Cash provided by (used in) financing activities(1,981)(4,495)351–

27,049(20,304)(0)(4,708)(0)(5,896)

(365)

(330)

Finance income and finance cost
Other non–operating income and expenses
Share of loss (profit) of investments accounted for using equity
methodNet cash provided by (used in) operating activities
Cash provided by (used in) investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment

Net increase (decrease) in short–term loans payable
Repayment of long-term loans payable
Purchase of treasury stock
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents included in assets held for sale
Cash and cash equivalents at end of period- 11 -(4,722)

516

(131)

(402)

(2,021)
16,297(15,193)
22,908(209)–

14,065

7,714

(6) Notes on Assumptions for Going Concern
Not applicable(7) Notes on Condensed Consolidated Financial Statements
1. Reporting entity
Asahi Holdings, Inc. (hereinafter the “Company”) is a company located in Japan. The Company’s condensed
consolidated financial statements for the nine months ended December 31, 2020 comprise the Company andits subsidiaries (hereinafter the “Group”) as well as the interests in its affiliated companies.
For the main activities of the Group, please refer to Note “5. Segment information.”

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

- 12 -

3. Changes in accounting policies
The significant accounting policies adopted for the condensed consolidated financial statements are thesame as those for the consolidated financial statements for the fiscal year ended March 31, 2020, with the
exception of the change described below.
The income tax for the nine months ended December 31, 2020 was calculated based on the estimatedaverage annual effective tax rate.
(Change in the classification for recording interest expenses corresponding to Advanced Trading for precious
metal products)
Each Asahi Refining company, consolidated subsidiaries of the Company, undertakes Advanced Tradingof precious metal products as an added value service incidental to the precious metal refining business.
Commission income obtained from customers in accordance with the forward period is recorded as revenue.
The interest expenses corresponding to such Advanced Trading of precious metal products werepreviously recorded as finance cost, but the method was changed from the first quarter of the fiscal year
ending March 31, 2021 to be recorded as cost of sales.
Furthermore, due to these changes, the “increase (decrease) in trade and other payables” has beenchanged to “increase (decrease) in trade, loans and other payables” in the Condensed Consolidated
Statements of Cash Flows. Furthermore, the change in loans payable procured for such Advanced Tradingis included in “increase (decrease) in trade, loans and other payables” in the Condensed Consolidated
Statements of Cash Flows.
This change is attributed to the change in the funds management system due to the aim to expand
Advanced Trading of precious metal products as a measure to increase income at each Asahi Refining
company and in consideration of the increase in the financial importance of interest expenses corresponding
to this income and the forecast for future increases.
Accordingly, compared to the previous method, cost of sales rose 663 million yen and operating profit fell
663 million yen, but there was no impact on profit before tax, profit, and profit attributable to owners ofparent.
The Condensed Consolidated Statements of Cash Flows during the nine months ended December 31,
2020 show an increase of 11,369 million yen in increase (decrease) in trade, loans and other payables andrespective declines of 11,369 million yen in net increase (decrease) in short–term loans payable, 663 million
yen in finance income and finance cost, and 663 million yen in interest expenses paid.
There is no impact on basic earnings per share and diluted earnings per share during the nine months
ended December 31, 2020.
Such changes in accounting policies are applied retrospectively, and the consolidated financial statements
restate the figures for the quarters in the previous fiscal year and for the previous fiscal year following
retrospective application.
As a result, compared to before the retrospective application, the Condensed Consolidated Statements ofIncome for the nine months ended December 31, 2019, shows an increase of 1,648 million yen in cost of
sales and a decline of 1,648 million yen in operating profit, but there is no impact on profit before tax, profit,and profit attributable to owners of parent.
The Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2019shows an increase of 60,779 million yen in increase (decrease) in trade, loans and other payables andrespective declines of 60,687 million yen in net increase (decrease) in short–term loans payable, 1,648
million yen in finance income and finance cost and 1,556 million yen in interest expenses paid.
There is no impact on basic earnings per share and diluted earnings per share for the nine months ended
December 31, 2019.

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

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

5. Segment information(1) Overview of reporting segments
The Group’s reporting segments are those Group constituent units for which separate financial
information is obtainable, and which the Board of Directors subjects to regular examination in order todecide the allocation of management resources and evaluate business results.
As a pure holding company, the Company is in charge of overall strategic function for the Group, whereas
operating companies of the Group engage in the precious and rare metals recycling business and therefining and processing business, industrial waste management and other environmental preservation
business.
Therefore, the Group is composed of product and service segments based on business sectors. The tworeporting segments are the Precious Metals business and the Environmental Preservation business.
Meanwhile, these reporting segments are not aggregated.
The Precious Metals business engages mainly in recycling and selling of precious and rare metals suchas gold, silver, palladium, and platinum, as well as refining and processing of precious metals such as goldand silver.
The main work of the Environmental Preservation business is the collection, transport and intermediate
processing of industrial waste, and the manufacture and sale of electric heaters.
The interest expenses corresponding to the Advanced Trading of precious metal products at each Asahi
Refining company, consolidated subsidiaries of the Company, were previously recorded as finance cost, but
the method was changed from the first quarter of the fiscal year ending March 31, 2021 to be recorded ascost of sales.
In addition, the segment information for the nine months ended December 31, 2019 also reflects suchchange.
As a result, compared to the figures prior to such change, the operating profit by business segment for
the Precious Metals business decreased by 1,648 million yen for the nine months ended December 31, 2019,and decreased by 663 million yen for the nine months ended December 31, 2020.
In the previous fiscal year, the Company transferred 60% of all shares of Fuji Medical Instruments MFG.
Co., Ltd., (hereinafter “Fuji Medical Instruments”) to Johnson Health Tech Co., Ltd., a company listed on
the Taiwan Stock Exchange. Consequently, the Company classified the business of Fuji Medical
Instruments under discontinued operations, and the amounts presented for segment information for thenine months ended December 31, 2019 are amounts from continuing operations from which discontinued
operations have been excluded. Please refer to Note “7. Discontinued operations” for details on discontinued
operations.

- 14 -

(2) Segment revenue and performance
Accounting policies of the reporting segments are the same as those of the Group stated in Note “3.
Changes in accounting policies.”
Revenue and other performance of each reportable segment of the Group are as follows.
For the nine months ended December 31, 2019 (from April 1, 2019 to December 31, 2019)
Reporting segment(Millions of yen)

Precious
Metals Business

Environmental
Preservation
Business

82,755

15,28098,036

1,072

–

3

3

Total

82,755

15,284

Operating profit
by business

10,756

3,027

Revenue
External
revenue
Intersegment
revenue

Adjustment

Consolidated

99,108–

99,108

–

3

(3)

–

98,039

1,072

99,112(3)

99,10813,78360

13,844(1,597)

12,246

Total

Other

Subtotalsegment
Finance income
Finance costs

18
(141)

Other non–87

operating profit
Other non–operatingexpenses(140)

Profit before tax

12,070(Notes) 1. Intersegment transactions are based on prevailing market prices.
2. Adjustments of operating profit by business segment are mainly corporate expenses that are notallocated to each reporting segment.
For the nine months ended December 31, 2020 (from April 1, 2020 to December 31, 2020)
Reporting segment(Millions of yen)

Precious
Metals Business

Environmental
Preservation
Business

105,581

14,452120,033

–

–

–

–

Total

105,581

14,452

Operating profit
by business

16,214

2,837

Revenue
External
revenue
Intersegment
revenue

Total

Adjustment

Consolidated

120,033–

120,033

–

–

–

–

120,033–

120,033–

120,033

19,051

202

19,253(2,005)

17,248

Other

Subtotalsegment
Finance income
Finance costs

155
(67)

Other non–operating(3)

expensesProfit before tax(Note)

17,332Adjustments of operating profit by business segment are mainly corporate expenses that are not allocatedto each reporting segment.
- 15 -

6. Impairment loss
For the nine months ended December 31, 2019 (from April 1, 2019 to December 31, 2019)
The impairment loss of 997 million yen on property, plant and equipment recognized during the ninemonths ended December 31, 2019 was due to the decision of disposal of gold and silver refining facilities(buildings and machinery) in Asahi Refining Florida Inc. belonging to the segment of Precious Metals
business to further enhance the efficiency and profitability of business in North America. And the bookvalue of the property, plant and equipment has been reduced to the recoverable amount. The recoverable
value is measured based on the fair value less costs of disposal, and the fair value less costs of disposal isevaluated using the reasonably calculated value based on the expected value of disposal. The fair value
hierarchy level is 3.
Impairment losses are recorded in “Other operating expenses” in the Condensed Consolidated
Statements of Income.
For the nine months ended December 31, 2020 (from April 1, 2020 to December 31, 2020)
Not applicable

7. Discontinued operations(1) Outline of discontinued operations
The Company transferred 60% of all shares of Fuji Medical Instruments, which was a consolidated
subsidiary of the Company, to Johnson Health Tech Co., Ltd., a company listed on the Taiwan Stock
Exchange, in the previous fiscal year which was then excluded from the scope of consolidation. Consequently,
profit and loss as well as cash flows relating to Fuji Medical Instruments and its subsidiaries werereclassified as discontinued operations with the discontinued operations concerned displayed in a separate
category.
(2) Discontinued operations performance(Millions of yen)
The nine months ended
December 31, 2019

The nine months ended
December 31, 2020

13,698(14,185)––

Profit (loss) before tax from discontinued
operations

(486)

–

Income tax expenses (Note)

(653)

–

Profit or loss of discontinued operations
Revenue
Expense (Note)

Profit (loss) from discontinued operations(1,140)–(Note) This includes losses worth 1,020 million yen, which were recognized by the measurement in the ninemonths ended December 31, 2019 of the disposal group that constitutes discontinued operations at fairvalue less selling cost. Income tax expenses pertaining to this change totaled 487 million yen.
(3) Cash flow from discontinued operations(Millions of yen)
The nine months ended

The nine months ended

December 31, 2019

December 31, 2020

Cash flow from discontinued operations
Net cash provided by (used in) operating
activities
Net cash provided by (used in) investing
activities
Net cash provided by (used in) financing
activities
Total- 16 -

1,388

–

(80)

–

(1,493)

–

(184)

–

8. Subsequent events(Stock split and partial amendment to the Articles of Incorporation)
At the Board of Directors’ meeting held on January 29, 2021, the Company resolved to implement a stock
split and partially amend the Articles of Incorporation.
(1) Purpose of stock split
The purpose of the stock split is to create a more investment-friendly environment for investors bylowering the unit investment amount, thereby increasing the liquidity of the Company’s stock andbroadening the shareholder base.
(2) Overview of stock split(i) Method of split
The Company will implement a 2-for-1 share split of common shares owned by shareholders listed orrecorded in the closing register of shareholders with a record date of March 31, 2021.
(ii) Number of shares to be increased by split
Total number of issued shares before stock split:

39,854,344 shares

Number of shares to be increased by stock split:

39,854,344 shares

Total number of issued shares after stock split:

79,708,688 shares

Total number of shares authorized to be issued after stock split:

258,000,000 shares(iii) Schedule of split
Public notice of record date:

March 16, 2021

Record date:

March 31, 2021

Effective date:

April 1, 2021(iv) Effect on per-share information
Per-share information on the premise that the stock split was conducted at the beginning of theprevious fiscal year is as follows.
The nine months
ended December 31,
2019

The nine months
ended December 31,
2020

Yen

Yen

Basic earnings per
share (Yen)

81.36

151.99Diluted earnings per
share (Yen)

81.08

150.97(3) Partial amendment to the Articles of Incorporation in relation to stock split(i)Reason for the amendment to the Articles of Incorporation
In connection with this stock split, pursuant to the provisions of Article 184, paragraph (2) of theCompanies Act, the total number of shares authorized to be issued stipulated in Article 6 of theCompany’s Articles of Incorporation will be amended.
(ii) Details of the amendment to the Articles of Incorporation
The details of the amendment are as follows.
Current Articles of Incorporation(Underlined portions represent amendment)
Proposed Amendment

Article 6 (Total Number of Shares Authorized to Article 6 (Total Number of Shares Authorized to
Be Issued)
Be Issued)
The total number of shares authorized to be The total number of shares authorized to beissued by the Company shall be 129,000,000.
issued by the Company shall be 258,000,000.
(iii) Schedule of the amendment to the Articles of Incorporation
Effective date:
April 1, 2021
- 17 -

(4) Others
Change in amount of capital stock
The amount of capital stock will not change as a result of this stock split.
(Subsidiary share transfer)
At a meeting of the Board of Directors held on January 29, 2021, the Company resolved to transfer all
the shares in its consolidated subsidiary INTER CENTRAL, INC. to OTEC Corporation.
The effects of this share transfer on the Company’s consolidated results for the fiscal year ending March
31, 2021 is minimal.
Below is an overview of the share transfer.
(1) Reason for share transfer
INTER CENTRAL, INC. became a consolidated subsidiary of the Company in July 2012 and has been
engaged in the design and construction of radiant air-conditioning systems and the manufacturing andsales of various types heating equipment.
OTEC Corporation runs two businesses, its “Environmental Preservation business” that conducts design,
installation, and maintenance of automatic air-conditioning control systems, and its “Piping Materials
business” that sells piping materials and home equipment and appliances.
INTER CENTRAL, INC. is building a track record for its radiant air-conditioning system that use radiantheat and its electric heating equipment in building entrances, hospitals, airports, and libraries. While it
contributed to the Company’s consolidated results, we decided to transfer its shares to optimize theallocation of our management resources in our future growth strategy. Furthermore, we expect synergistic
effects in installation systems and equipment sales with the addition of INTER CENTRAL, INC. to the
OTEC Group.
(2) Outline of subsidiary to transfer shares
NameBusiness content
CapitalMajor shareholder andshareholding ratio

INTER CENTRAL, INC.
Design and construction of radiant air-conditioning systems andmanufacturing and sale of various types of heating equipment
153 million yen
Japan Waste Corporation 100%(3) Name of the transferee
Name
Business content
CapitalDetails of transactions
with the Company

OTEC Corporation
Design and installation of automatic air-conditioning control
systems and sales of home equipment and appliances
599 million yen
Not applicable(4) Number of shares transferred and number of shares owned before and after transfer
Number of shares owned
before transfer

148,557(Ratio of voting rights held by the company: 100%)

Number of shares to betransferred

148,557(Ratio of voting rights held by the company: 100%)

Number of shares owned
after transfer

0(Ratio of voting rights held by the company: 0%)- 18 -

(5) Schedule
Resolution dateat the Board of Directors
Date of the conclusion ofDefinitive Agreement
Date of share transfer
to be executed (scheduled)

January 29, 2021
January 29, 2021
March 31, 2021

- 19 -