Consolidated Financial Results for the Fiscal Year Ended March 31, 2017
Asahi Holdings, Inc. [IFRS]
May 10, 2017

Stock code:
Shares listed:

5857
Tokyo Stock Exchange (First Section)

URL:
Representative:

http://www.asahiholdings.com
Mitsuharu Terayama, President & CEO

For further information please contact:

Koji Sasaya, Human Resources and General Administration
Department, Corporate Planning & Communications
Department General Manager(Phone) +81-3-6270-1833

The Ordinary General Meeting of Shareholders:Filing date of financial statement:

June 20, 2017
June 21, 2017

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

May 31, 2017
No

Investor conference for the financial results:

Yes (for institutional investors, analysts)(Rounded down to the nearest million yen)
1. Results of the fiscal year ended March 31, 2017 (From April 1, 2016 to March 31, 2017)(1) Results of operations(Percentage: Changes relative to corresponding previous period)
Revenue

The fiscal year ended
March 31, 2017
March 31, 2016

Millions of yen%

OperatingincomeProfit before
tax

ProfitProfitattributable toowners of parent

Total
comprehensive
incomeMillions of yen %Millions of yen %Millions of yen %Millions of yen %Millions of yen %(1,086) −2,985 −

(1,213) −2,867 −

106,828 (10.5)
119,352 −2,038 (66.3)
6,057 −

1,751 (70.2)
5,868 −

Basic earning per Diluted earningshare
per share
The fiscal year ended
March 31, 2017
March 31, 2016

Profit to equity
attributable toowners of parent%

Yen(37.24)
87.48

Yen
−
−

(2.6)
5.8

Total assets

Total equity

Equity attributableto owners of parent

Millions of yen
88,976
101,599

Millions of yen
44,82748,988Millions of yen
44,303
48,591(2,217)
56−−

Profit before
tax to total
assets
%1.8
5.7

Operatingincome torevenue%
1.9
5.1

Equity attributableto owners of parent
ratio

Equity per share
attributable toowners of parent(2) Financial Position

As ofMarch 31, 2017
March 31, 2016

%
49.8
47.8

Yen
1,359.02
1,490.56(3) Cash flows

The fiscal year ended
March 31, 2017
March 31, 2016

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Millions of yen
3,319
14,321Millions of yen(2,442)(1,936)

Millions of yen(6,630)(6,473)

Cash and cash
equivalents at end of
the fiscal year
Millions of yen
10,79816,564

2. Dividend payments
Dividends per share

Year ended March 31, 2016
Year ended March 31, 2017
Year ending March 31, 2018
(Forecast)First
quarter

Secondquarter

Third
quarterYearendAnnual

Yen
−

Yen
30.00
30.00

Yen
−
−

Yen
30.00
30.00

Yen
60.00
60.00

−

30.00

−

30.00

60.00

−

3. Forecast (From April 1, 2017 to March 31, 2018)%

Millions of yen

Dividend
to equity
attributableto owners ofparent(consolidated)

Payoutratio(consolidated)%

Millions of yen

1,969
1,969

%

68.6
−

3.9
4.2

25.7

(Percentage: Changes relative to corresponding previous period)
OperatingincomeRevenueSix months ending
September 30, 2017
Year ending March 31, 2018

Total
dividend
payment(annual)%Millions of yen%

Profitattributable toowners of parent
Millions of yen%

Profit before
tax
Millions of yen

Basic earningper shareYen

58,000

12.2

5,500

(3.5)

5,400

(1.8)

3,600

(9.6)

110.43120,000

12.3 11,500

464.2

11,300

545.2

7,600

−

233.13* Notes(1) Changes in significant subsidiaries during the current fiscal year: No(2) Changes in accounting policies and accounting estimates(i) Changes in accounting policies required by IFRS: No(ii) Changes other than (i) above: No(iii) Changes in accounting estimates: No(3) Number of issued shares (common stock)(i)

Number of issued shares at the end of year (including treasury shares)
As of March 31, 201736,254,344 shares

As of March 31, 201636,254,344 shares(ii) Number of treasury shares at the end of year
As of March 31, 2017

3,654,987 shares

As of March 31, 2016

3,654,607 shares(iii) Averaged number of shares during the period
Year ended March 31, 201732,599,539 sharesYear ended March 31, 2016

32,773,714 shares(Reference) Summary of Nonconsolidated Results
1. Nonconsolidated Results of the Year ended March 31, 2017 (From April 1, 2016 to March 31, 2017)(1) Results of operations(Percentage: Changes relative to corresponding previous period)
Net sales
The fiscal year ended
March 31, 2017
March 31, 2016

The fiscal year ended
March 31, 2017
March 31, 2016

Millions of yen

6,183
6,865

Operating income%

Millions of yen

(9.9)
2.6

4,846
5,604

%

Ordinary income
Millions of yen

%

5,079
5,764

(11.9)
1.1(13.5)
0.5

Net income per share

Diluted net income per shareYen(359.25)173.01Yen−−

Net income
Millions of yen(11,711)
5,670

%

−
(0.1)

(2) Financial Position

As ofMarch 31, 2017
March 31, 2016
(Reference)
Shareholders’ equity

Total assets

Net assets

Shareholders’ equity ratio

Millions of yen
55,32174,009Millions of yen
34,533
48,21462.4
65.1

As of March 31, 2017: 34,533 million yen%

Net assets per shareYen
1,059.32
1,478.98

As of March 31, 2016: 48,214 million yen*This report is not subject to audit procedures*Statement regarding the proper use of financial forecasts and other special remarks(IFRS adoption)
The Group has adopted IFRS starting from the first quarter of the fiscal year ended March 31, 2017. For details
about the differences between IFRS and Japanese GAAP with respect to financial figures, please refer to“4. Consolidated Financial Statements (7) Notes on Consolidated Financial Statements 9. First-time adoption”
on page 29 of the appendix of the consolidated financial results.
(Notes on forward looking statements, etc.)
These forecast performance figures are based on the information currently available to the company’s
management and certain assumptions judged rational. Accordingly, there might be cases in which actual resultsmaterially differ from forecasts of this report. Please refer to page 2 “1. Overview of Consolidated Operating
Results (1) Consolidated Business Performance for the Year ended March 31, 2017” for the assumptions used
and other notes.

【Appendix】

Table of contents of the appendix
1.Overview of Consolidated Operating Results................................................................................................

2(1) Consolidated Business Performance for the Year ended March 31, 2017 ..............................................

2(2) Consolidated Financial Position and Cash Flows for the Year ended March 31, 2017 .........................

3(3) Dividends ...................................................................................................................................................

3(4) Business and other risks ..........................................................................................................................

3

2. Our Group ......................................................................................................................................................

6

3. Basic Concept Regarding Selection of Accounting Standards .....................................................................

9

4. Consolidated Financial Statements ..............................................................................................................

10(1) Consolidated Statements of Financial Position ......................................................................................

10(2) Consolidated Statements of Income .........................................................................................................

12(3) Consolidated Statements of Comprehensive Income ..............................................................................

13(4) Consolidated Statements of Changes in Equity ......................................................................................
(5) Consolidated Statements of Cash Flows..................................................................................................

1416(6) Notes on Assumptions for Going Concern ...............................................................................................

16(7) Notes on Consolidated Financial Statements .........................................................................................

17

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

17

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

17

3. Significant accounting policies............................................................................................................

17

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

25

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

26

6. Goodwill ...............................................................................................................................................

28

7. Per share information .........................................................................................................................

28

8. Subsequent events ...............................................................................................................................

28

9. First-time adoption ..............................................................................................................................

29

5. Others .............................................................................................................................................................

38(1) Amounts of Sales .......................................................................................................................................

38

−

1 −

1. Overview of Consolidated Operating Results(1) Consolidated Business Performance for the Year ended March 31, 2017
① Operating results
In the Japanese economy during the consolidated fiscal year ended March 31, 2017, moderate recovery
continued, as exhibited by signs of improvement in corporate earnings and employment environment, on theback of the government’s economic policies and the Bank of Japan’s monetary easing policies, despite
lackluster personal consumption figures. The political changes have had a significant impact on the currency
exchange and commodity market conditions.
Under these economic conditions, the group’s results in each business segment were as follows.
Precious metal business
Volume of collection in the precious metals recycling business was as follows. In the electronics sector, thevolume of collection of gold was at the same level as in the same period a year earlier despite the continued
contraction of the domestic market, thanks to the sustenance of current customers and development of new
customers in the E-scrap and precision cleaning businesses. In the dental sector, amidst the amount ofprecious metals used for dental materials declining, the volume of collection of gold and palladium remainedat the same level as in the same period last year. In the jewelry sector, the volume of collection of platinum
was larger than in the same period a year before, although the year-on-year volume of collection of gold was
lower due to continued drop in the volume of distribution in the purchasing market. In the automotive
catalyst sector, vigorous marketing efforts led to a higher volume of collection of palladium and platinum thanin the same period a year earlier despite the continued decline in the number of domestic scrapped vehicles.
Regarding the average price of precious metals, the average price for silver was higher than in the same
period a year before, while the average prices for gold, palladium and platinum were lower than in the same
period last year.
As for gold and silver refining business in North America, the unit price for commissioned refining businessremained at a low level due to continued slowdown of related industries.
Environmental preservation businessAlthough the volume of industrial waste discharged in Japan is on a downward trend in general, the overall
volume handled by the group remained stable as group companies focused on developing new customers andobtaining contracts by capitalizing on their characteristics and inter-company collaboration.
Life & health businessIn the health care equipment, overall sales of large-size massage chairs as the core item and other products
remained sluggish amidst weak personal consumption and other factors despite efforts to expand the sales of
low-style massage chairs, small-sized massage devices, and electrolytic hydrogen water ionizers, among
others. As for fire-fighting equipment, business remained strong thanks in part to an increase in building
construction projects in the metropolitan area.
As a result of the above, in terms of the performance for this consolidated fiscal year, revenue was 106,828
million yen, a year-on-year decrease of 12,524 million yen (-10.5 percent). Operating income was 2,038 million
yen, a decrease of 4,018 million yen (-66.3 percent) year-on-year. Profit before tax was 1,751 million yen, a
year-on-year decrease of 4,117 million yen (-70.2 percent).Loss was 1,086 million yen (profit was 2,985 million
yen in the previous fiscal year). Loss attributable to owners of parent was 1,213 million yen (profit was 2,867
million yen in the previous fiscal year). By segment, revenue in the precious metal business was 66,994
million yen, a year-on-year decrease of 10,972 million yen (-14.1 percent). In the environmental preservation
business, revenue was 15,942 million yen, an increase of 153 million yen (+1.0 percent) year-on-year. Revenue
in the life & health business was 23,967 million yen, a decrease of 1,752 million yen (-6.8 percent) year-onyear.
Figures stated in these financial results are presented on the basis of the International Financial ReportingStandards (IFRS). Figures for the previous fiscal year have been presented on the basis of IFRS through thereclassification of the JGAAP-based figures disclosed in the previous fiscal year.

−

2 −② Outlook
While the Japanese economy is expected to continue its moderate recovery phase in the future, growing
uncertainties over the world’s political and economic situation, fueled by anxieties over the policy
management of the new U.S. president and other matters of concern, have cast a slowdown on the prospects
for the domestic economy. In view of the sustained high downside risks in the domestic and global economy,
the group is aware of the need to carefully monitor the prospects of its management environment.
In terms of our forecast for performance in the next period, we predict revenue of 120,000 million yen,operating income of 11,500 million yen, profit before tax of 11,300 million yen, and profit attributable toowners of parent of 7,600 million yen.

(2) Consolidated Financial Position and Cash Flows for the Year ended March 31, 2017
As of this fiscal year ended March 31, 2017, total assets amounted to 88,976 million yen, down 12,622
million yen from the previous fiscal year end. This was due mainly to the increase of 2,265 million yen in
inventories, the decrease of 5,766 million yen in cash and cash equivalents and the decrease of 8,684 million
yen in goodwill.
Total liabilities amounted to 44,148 million yen, down 8,462 million yen from the previous fiscal year end.
This was due mainly to the decrease of 2,415 million yen in trade and other payables, the decrease of 4,704
million yen in loans payable and the decrease of 951 million yen in income tax payable.
Total equity amounted to 44,827 million yen, down 4,160 million yen from the previous fiscal year end.
Net cash provided by operating activities amounted to 3,319 million yen due mainly to 1,751 million yen of
profit before tax, 2,340 million yen of depreciation and amortization, increase in trade and other receivables,
decrease in trade and other payables, and income taxes paid.
Net cash used in investing activities amounted to 2,442 million yen due mainly to 2,676 million yen ofpurchase of property, plant and equipment.
Net cash used in financial activities amounted to 6,630 million yen due mainly to 5,270 million yen of
repayment of long-term loans payable, and 1,956 million yen of cash dividends paid.
As a result, cash and cash equivalents as of March 31, 2017 decreased 5,766 million yen from March 31,
2016, to 10,798 million yen.

(3) Dividends
Our basic policy is to improve corporate value continuously by maintaining stable profitability andachieving further growth, and to meet shareholders’ expectations by continuous stable dividends. We also
consider it important to fulfill internal reserves for strategic investment to enhance existing business anddevelop new business.
Under this basic policy, the fiscal year’s year-end dividend will be 30 yen per share, consequently, theannual dividend per share for the fiscal year ended March 31, 2017 will total 60 yen including the interim
dividend of 30 yen per share.
Further, for the year ending March 31, 2018, we are planning to pay out 30 yen per share for both interim
and year-end dividend, making the full year amount 60 yen per share.

(4) Business and other risks
Major risks that could affect the Group's operating results and financial condition include the following. We
believe these matters could have a significant impact on investor decisions, but the categories below arelimited to those that the Group is currently aware of; and not necessarily all risks are covered here.
① Precious metals prices and currency exchange rates
The precious metals and rare metals that are the main products of the Group's precious metals business
are traded on international markets. Their prices fluctuate based on global elements such as political andeconomic trends in supply countries and demand countries, currency exchange rates, and so on. The Group
therefore hedges through forward transactions, etc., in order to reduce risk, although the size of fluctuationin precious metals prices and currency exchange rates can affect the Group's operating results and financial
condition.

−

3 −② Laws and regulations
In the countries and regions where the Group operates business, various laws and regulations apply
regarding matters such as permission to do business, rules for import/export/transport, commercial
transactions, labor, taxation, intellectual property rights, and environmental preservation. Taking the
stance that compliance is important, the Group carefully follows laws, regulations, and social rules.
However, in the unlikely event that laws, regulations, and social rules could not be followed, or if theychange such that business is restricted, it could affect the Group's operating results and financial condition.
In the environmental preservation business in particular, the Group engages in the collection, transport
and treatment of various types of industrial waste as an enterprise under the Waste Management andPublic Cleansing Act. In addition to that law, the business is regulated by laws such as the Water Pollution
Control Act, the Air Pollution Control Act, and the Sewerage Act. Furthermore, the Group has a license forthe collection and transport of industrial waste in every prefecture and ordinance-designated city, for its
disposal in 13 prefectures and 9 ordinance-designated cities and core cities, and for the collection andtransport of specially-controlled industrial waste in every prefecture and ordinance-designated city, for its
disposal in 11 prefectures and 8 ordinance-designated cities and core cities. Obtaining such licenses ispredicated on strict compliance with regulations at the regional level, including each prefectural andmunicipal ordinance and rule.
With society's interest in environmental issues rising, such legal regulations are tending to tighten. Not
only capital investments as countermeasures to those trends but also the construction, relocation, andrenovation of disposal facilities require construction permits and permission to change. On such occasions,the consent of nearby residents may also be necessary, which could be difficult to obtain in some cases.
Therefore, such legal regulations and social trends could affect the Group's operating results and financial
condition.
③ Economic fluctuation
Manufacturing industries are among the primary demand industries for the Group's precious metals
business and environmental preservation business. Demand trends in each sector within these industries
are affected by economic conditions in various countries and regions. When demand from such industries
declines due to recession and so on, it can affect the Group's operating results and financial condition.
Moreover, large reductions in construction-related demand or falls in personal consumption can affect thelife & health business, in turn affecting the Group's operating results and financial condition.
④ Business environment
All three of the Group's business segments, the precious metals business, the environmental preservation
business, and the life & health business, face the possibility of major changes in customer needs due tochanges in laws, regulations, and permits that concern a sector or faster-than-expected shifts overseas bycorporate customers. Furthermore, industry reorganization and other major changes in the businessenvironment are possible. The results could affect the Group's operating results and financial condition.
⑤ Intensified competition
All three of the Group's business segments, the precious metals business, the environmental preservation
business, and the life & health business, face competition from various companies. The Group continues tomake efforts to overcome the competition in each sector by accurately meeting customer needs throughsales efforts and initiatives on technology, products, and cost responsiveness. Intensified competition fromcompetitor companies, however, can force the Group's products and services into harsh price competition.
The results could affect the Group's operating results and financial condition.
⑥ Overseas business deployment
The Group carries out business in countries and regions in North America, Asia, etc. Political or economic
phenomena unfavorable to business, labor disputes due to differences in labor environment, uncertainty infinding suitable local personnel, conflicts, terrorism, and other social disturbances, and unfair intervention
by authorities due to underdeveloped business infrastructure in a country or region are inherent risks. If
such situations occur, it could affect the Group's operating results and financial condition.
−

4 −⑦ Corporate acquisition, etc.
The Group has worked to expand its lines of business and business scale through corporate acquisitionand expects to take a forward-looking approach to attractive cases in the future. In order to maximize theintegration effect with target businesses and companies, the Group will attempt to integrate and unify themwith its business strategy and operations. However, it is possible that the expected integration andunification effects will not be realized. Furthermore, target businesses and companies not achieving thebusiness results initially expected and posting markedly worse operating results could lead to impairmentof goodwill. The results could affect the Group's operating results and financial condition.
⑧ Natural disasters, accidents, etc.
Natural disasters such as large earthquakes or typhoons could cause serious damage to the Group's
production, distribution, sales, and information management facilities. That could affect the Group's
operating results and financial condition. Moreover, although the Group works to strengthen its safety
management system and regularly carries out disaster/accident prevention activities in order to eliminate
occupational and facilities accidents, there is no guarantee that they can be completely prevented or
mitigated. Therefore, if a serious occupational or facilities accident should occur it could affect the Group's
operating results and financial condition.
⑨ New product development
The Group's life & health business aims to provide devices and equipment that are "people-friendly, forbetter life and health." We develop attractive products by accurately assessing customer needs andoptimally applying the Company's technology. However, if we are unable to respond accurately to market
and industry needs and carry out timely product development, it could lessen future growth and profits,affecting the Group's operating results and financial condition.
⑩ Key intellectual property rights
In order to protect intellectual property rights important to business deployment, the Group carries out
appropriate management. However, unforeseen leaks to outside parties can occur, and complete protectionof intellectual property rights may be impossible in certain regions. Therefore, it may not be possible toeffectively prevent third parties from using the Group's intellectual property rights to manufacture and sellsimilar products and services. The results could affect the Group's operating results and financial condition.
⑪ Product quality assurance and product liability
The Group makes every effort with its product quality assurance system, but if a product produced by theGroup causes damages, it could affect the Group's operating results and financial condition.
⑫ Environmental protection
Based on its Environmental Policies, the Group carries out various initiatives to protect the global
environment. However, there is no guarantee that all pollution and other environmental risk can becompletely prevented or mitigated, so if the Group should cause serious pollution of the environment, it
could affect the Group's operating results and financial condition.
⑬ Lawsuits and other legal procedures
As the Group carries out business in Japan and overseas, it could be subjected to lawsuits and other legal
procedures. If the Group becomes a party to such action, it might have to pay large damages, etc. The
results could affect the Group's operating results and financial condition.

−

5 −2. Our Group
Our Group comprises of the holdings company “Asahi Holdings, Inc.”, “Asahi Pretec Corp.”, “Japan Waste
Corporation”, “Asahi Americas Holdings, Inc.”, and 20 other subsidiaries. Our main businesses are precious metalbusiness, environmental preservation business and life & health business. The details are as follows.

(1) Precious metal businessIn the precious metals recycling business, we sell precious/rare metal products such as gold, silver,
platinum, palladium, and indium by recycling scrap containing rare metals, etc.
In Japan, Asahi Pretec Corp. collects scraps containing precious/rare metals from the electronics, dentistry,jewelry manufacturing and distribution, and automotive catalyst sectors. At factories around the country, itcollects, separates and refines the scrap and sells high-purity metals to trading companies,
semiconductor/electronic component makers, film manufacturers, etc. also engages in precision cleaning andprecious metal delamination of manufacturing equipment parts from semiconductor/electronic component
makers.
Overseas, Asahi G&S Sdn. Bhd. in the Malaysia/Singapore region, Shanghai Asahi Pretec Co., Ltd. in China
and Asahi Pretec Korea Co., Ltd. in South Korea are engaged in the precious metals recycling business.
Additionally, Asahi Pretec Taiwan Co., Ltd. is engaged in the precious metal recycling business and Asahi
Shih Her Technologies Co., Ltd. collects scraps containing precious metals in Taiwan. Furthermore, Asahi
Refining USA Inc. and Asahi Refining Canada Ltd. carry out the refining and processing of gold, silver, andother precious metals in the United States and Canada respectively.

(2) Environmental preservation business
The main line of our environmental preservation business is the collection, transport, and intermediate
treatment of industrial waste.
Asahi Pretec Corp. treats and detoxifies waste acid, waste alkali, waste oil, sludge, waste drugs, andmedical-related waste generated by sites in various industries, such as factories, photo labs, printing presses,
hospitals, schools, and research institutes. Additionally, a group of companies with Japan Waste Corporation
as their parent firm is engaged in the environmental preservation business as follows. Nihon Chemitech Co.,
Ltd. and JW Logistics, Co., Ltd. mainly perform the collection, transport, and intermediate treatment ofindustrial waste generated by factories. Iyotec Co., Ltd. engages in business such as dispatch of personnel tomanufacturers and collaborates on the treatment of waste from industrial sites. Taiyo Chemical Co., Ltd.
processes medical-related waste and industrial effluent from companies in the IT, electronics, andpetrochemical businesses. Fuji Rozai Co., Ltd. processes specially controlled industrial waste including dioxin
and heavy metals at local governments' incinerators. It engages in repair, demolition, and waste brickprocessing of smelting furnaces for glass manufacturing. It removes firebricks from smelting furnaces andperforms materials recycling and hazardous materials handling. JW Glass Recycling Co., Ltd. collects sheet
glass and glass bottles, separates them for crushing, and recycles them into high-quality glass cullet, which it
sells. Ecomax Co., Ltd. performs detoxification (concrete solidification) treatment of combustion residue,
sludge, soot, and dust produced by incineration facilities. Kyodo Chemical Co., Ltd. carries out collection andtransport of industrial waste and engages in the photographic materials business.

(3) Life & health businessIn the life & health business, the main operation is the manufacture and sale of massagers, hearing aids,
and other health equipment, the manufacture and sale of electric heaters, the design and installation ofradiant heating and air conditioning systems, and the design and installation of disaster prevention
equipment.
As "The Health and Beauty Manufacturer," FUJI MEDICAL INSTRUMENTS MFG. CO., LTD. provides
various products approved under the Pharmaceutical Affairs Act, such as massage chairs, hearing aids, andelectric therapy apparatus for household use, to electronics store, JA (Japan Agricultural Cooperatives)channel, regional consumer electronics dealers, mail-order companies, and so on. INTER CENTRAL, INC.,
manufactures and sells electric heaters and designs and installs radiant heating and air conditioning systems.
They offer products such as electric heaters that provide warmth efficiently and flexibly and radiant heating−

6 −and air conditioning equipment that achieves comfortable, clean, and quiet environments. Their products areused in offices, schools, hospitals, cultural facilities, commercial facilities, and ordinary homes. KOEIKOGYO
CO., LTD., designs and installs disaster prevention, air conditioning, and sanitation equipment. They havesuccessfully installed equipment in many public facilities, hospitals, cultural facilities, and commercial
facilities.

−

7 −Precious Metal Business

Environmental Preservation Business

Life
HealthBusinessBusiness
Lifeand& Health

Asahi Holdings, Inc.
Asahi Americas Holdings，Inc.

Asahi Pretec Corp.

Japan Waste Corporation①

Overs ea s Ba s es

（USA）
Asahi Refining
USA Inc.

②

Overs ea s Ba s es

Domes ti c Ba s es

（Malaysia）
Asahi G&S
Sdn. Bhd.

Nihon ChemitechCo., Ltd.

（Canada）
JW Logistics,
Co., Ltd.

Asahi Refining
Canada Ltd.
（China）
Shanghai Asahi
Pretec Co., Ltd.

Taiyo ChemicalCo., Ltd.

Iyotec Co., Ltd.
（Korea）
Asahi Pretec
Korea Co., Ltd.

Fuji Rozai Co., Ltd.

JW Glass RecyclingCo., Ltd.
（Taiwan）
Asahi Pretec
TaiwanCo., Ltd.

Ecomax Co., Ltd.

Asahi Shih Her
Technologies
Co., Ltd.

Kyodo ChemicalCo., Ltd.
2 other companies（Notes）capital relationshipbusiness relationship① Selling recycling scrap containing precious / rare metals② Entrustment of industrial waste treatment* All companies except for parent company (Asahi Holdings, Inc.) are consolidated subsidiaries−

8 −Domes ti c Ba s es

INTER CENTRAL, INC.

KOEIKOGYO
CO., LTD.

FUJI MEDICALINSTRUMENTS MFG.
CO., LTD.

3. Basic Concept Regarding Selection of Accounting Standards
We have applied International Financial Reporting Standards (IFRS) with the objectives of enhancing ourmanagement base for global business development and enabling easier international comparison of financial
information in capital markets from the first quarter of fiscal year ended March 31, 2017.

−9 −4. Consolidated Financial Statements(1) Consolidated Statements of Financial Position
As ofApril 1, 2015
(Date oftransition to
IFRS)Millions of
yen

As of
March 31,
2016

As of
March 31,2017

Millions ofyenMillions ofyen

ASSETS
Current assets
Cash and cash equivalents

10,841

16,564

10,798Trade and other receivables
Inventories

15,851
15,817

14,64415,09015,557
17,356

Income tax receivables
Other financial assets

2,506
674

2,520
105

1,574
103

Other current assets

930

811

664

Total current assets

46,622

49,73746,056

33,66331,78831,987

Goodwill
Intangible assets

21,737906

16,922
969

8,238
918

Deferred tax assets
Net defined benefit asset

1,291
154

1,381
−

1,167
64

Financial assets
Other non-current assets

807
13

771
27

528
15

Total non-current assets

58,57351,861

42,920105,195

101,599

88,976

Non-current assets
Property, plant and equipment

Total assets

−

10 −

As ofApril 1, 2015
(Date oftransition to
IFRS)Millions of
yen

As of
March 31,
2016

As of
March 31,2017

Millions ofyenMillions ofyen

LIABILITIES and EQUITY
Liabilities
Current liabilities
Trade and other payables

11,787

15,125

12,710Loans payable
Income tax payable

26,441
2,111

7,115
2,012

2,720
1,061

Other financial liabilities
Provisions

46
1,259

187
1,522

191
1,490

Other current liabilities

3,638

2,953

2,613

Total current liabilities
Non-current liabilities

45,28628,917

20,787Loans payable
Deferred tax liabilities

6,550
2,061

20,503
1,582

20,195
1,790

Net defined benefit liability
Other financial liabilities

126
72

143
1,221

Other non-current liabilities

0

142
1,465
−

Total non-current liabilities
Total liabilities
EquityCapital stock

10

8,810

23,69323,36154,096

52,61044,148

4,480

4,480

4,480

Capital surplus
Treasury stock

6,116(5,159)6,112(5,371)

6,126(5,371)Retained earnings
Other components of equity

44,999346

45,845(2,476)42,783(3,716)

Total equity attributable to owners ofparent50,783

48,59144,303

Non-controlling interests

315

396

524

51,09848,98844,827105,195

101,599

88,976

Total equity
Total liabilities and equity

−

11 −

(2) Consolidated Statements of Income
The fiscal year ended
March 31, 2016

The fiscal year ended
March 31, 2017

Millions of yen

Millions of yen

Revenue
Cost of sales

119,352(93,394)

106,828(82,520)Gross profit

25,95824,307

Selling, general and administrative expenses
Other operating income(15,699)
109(15,215)
729

Other operating expenses(4,310)(7,784)

Operating income

6,057

2,038

Finance income
Finance cost

39
(227)

17
(304)

Profit before tax

5,868

1,751

Income tax expenses(2,883)(2,837)

Profit (loss)

2,985(1,086)

Owners of parent
Non-controlling interests

2,867
118

(1,213)
127

Profit (loss)

2,985(1,086)87.48(37.24)

Profit attributable to:Earning (loss) per share
Basic earning per share (Yen)

−

12 −

(3) Consolidated Statements of Comprehensive Income
The fiscal year ended
March 31, 2016

The fiscal year ended
March 31, 2017

Millions of yen

Millions of yen

Profit (loss)

2,985(1,086)

Financial assets measured at fair value
through other comprehensive income

(2)

(1)

Remeasurements of defined benefit plans

(99)

87

(102)

86

(693)

275

Translation adjustments of foreign operations(2,133)(1,493)

Total items that will be reclassified to profit orloss(2,826)(1,217)(2,929)(1,130)Comprehensive income

56(2,217)

Comprehensive income attributable to:
Owners of parent(54)(2,345)

110

128

56

(2,217)

Other comprehensive income
Items that will not be reclassified to profit or loss

Total items that will not be reclassified to profit
or loss
Items that will be reclassified to profit or loss
Cash flow hedges

Other comprehensive income, net of tax

Non-controlling interests
Comprehensive income

−

13 −

(4) Consolidated Statements of Changes in Equity(Millions of yen)
Equity attributable to owners of parent

Capitalstock

Balance at April 1, 2015
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Disposal of treasury stock
Changes in ownershipinterests in subsidiaries
that do not result in loss ofcontrol
Dividends
Lapse of subscription rights
to shares
Reclassified from othercomponents of equity toretained earnings
Total transactions withownersBalance at March 31, 2016

CapitalsurplusTreasurystock

Retainedearnings

Other components ofequityTranslation
adjustments Cash flowof foreign
hedgesoperations

4,480
−

6,116
−

(5,159)−44,999
2,867

−
−

313
−

−

−

−

−

(2,125)

(693)

−

−

−

2,867

(2,125)

(693)

−
−

−
40

(338)
127

−
−

−
−

−
−

−

−

−

−

−

−

−

−

−

(1,966)

−

−

−

(44)

−

44

−

−

−

−

−

(98)

−

−

−

(3)

(211)

(2,020)

−

−

4,480

6,112

(5,371)45,845(2,125)(380)(Millions of yen)
Equity attributable to owners of parent
Other components of equity
FinancialassetsRemeasuremeasured atments offair value
definedthrough
benefitotherplanscomprehensive income
Balance at April 1, 2015
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Disposal of treasury stock
Changes in ownershipinterests in subsidiaries
that do not result in loss ofcontrol
Dividends
Lapse of subscription rights
to shares
Reclassified from othercomponents of equity toretained earnings
Total transactions withownersBalance at March 31, 2016

Total

Noncontrollinginterests

Total

Total

33
−

−
−

346
−

50,783
2,867

315
118

51,098
2,985

(2)

(99)

(2,921)(2,921)(7)(2,929)(2)(99)(2,921)

(54)

110

56

−
−

−
−

−
−

(338)
167

−
−

(338)
167

−

−

−

−

(29)

(29)

−

−

−

(1,966)−(1,966)

−

−

−

−

−

−

(1)

99

98

−

−

−

(1)

99

98

(2,137)(29)(2,167)29−(2,476)

48,591396

48,988−14 −(Millions of yen)
Equity attributable to owners of parent

Capitalstock

Balance at April 1, 2016
Profit (loss)
Other comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Dividends
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Total transactions withownersBalance at March 31, 2017

CapitalsurplusTreasurystock

Retainedearnings

Other components ofequityTranslation
adjustments Cash flowof foreign
hedgesoperations

4,480
−

6,112
−

(5,371)−45,845(1,213)(2,125)
−

(380)
−

−

−

−

−

(1,492)

275

−

−

−

(1,213)(1,492)

275

−
−

−
−

(0)
−

−
(1,955)

−
−

−
−

−

−

−

107

−

−

−

13

−

−

−

−

−

13

(0)

(1,848)

−

−

4,480

6,126

(5,371)42,783(3,618)(104)(Millions of yen)
Equity attributable to owners of parent
Other components of equity
FinancialassetsRemeasuremeasured atments offair value
definedthrough
benefitotherplanscomprehensive income
Balance at April 1, 2016
Profit (loss)
Other comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Dividends
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Total transactions withownersBalance at March 31, 2017

Total

Total

Noncontrollinginterests

Total

29
−

−
−

(2,476)−

48,591(1,213)396
127

48,988(1,086)(2)

87(1,131)(1,131)0(1,130)(2)

87(1,131)(2,345)128(2,217)

−
−

−
−

−
−

(0)
(1,955)−−(0)(1,955)

(19)

(87)

(107)

−

−

−

−

−

−

13

−

13

(19)

(87)

(107)

(1,943)−(1,943)7−(3,716)44,303524

44,827−15 −(5) Consolidated Statements of Cash FlowsThe fiscal year
ended March 31,
2016

The fiscal year
ended March 31,
2017Millions of yen

Millions of yen

Profit before tax
Depreciation and amortization

5,868
2,389

1,751
2,340

Impairment loss
Finance income and finance cost

4,194
104

7,653
251

Decrease (increase) in inventories
Decrease (increase) in trade and other receivables

711
1,058

(2,271)(989)

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

3,097
1,781

(2,390)954

SubtotalInterest and dividends income received

19,204
42

7,299
15

Interest expenses paid
Income taxes paid

(130)
(6,432)(242)(5,888)

Income taxes refund

1,637

2,134

14,321

3,319

−
92

(205)
291

(1,532)129(2,676)378

Purchase of intangible assets
Purchase of investments

(345)
(195)

(270)
−

Proceeds from sales and redemption of investments
Other, net

10
(96)

71
(30)

Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities(1,936)(2,442)

Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable(24,300)
20,304

633
−

(270)
(338)

(5,270)(0)(1,967)97(1,956)(36)(6,473)(187)(6,630)(13)

Net increase (decrease) in cash and cash equivalents

5,723(5,766)

Cash and cash equivalents at beginning of period

10,841

16,564

Cash and cash equivalents at end of period

16,564

10,798Net cash provided by (used in) operating activities

Net cash provided by (used in) operating activities
Net 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

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(6) Notes on Assumptions for Going Concern
Not applicable

−

16 −

(7) Notes on Consolidated Financial Statements
1. Reporting entity
Asahi Holdings, Inc. (hereinafter the “Company”) is a company located in Japan. The addresses of theCompany’s registered head office and principal offices are available on its website(http://www.asahiholdings.com). The Company’s consolidated financial statements have a fiscal year-end
date of March 31, 2017 and comprise the financial statements of the Company as well as its subsidiaries(the “Group”).
For the main activities of the Group, please refer to Note 5. Segment information.

2. Basis of preparation(1) Statement of compliance with IFRS and matters regarding the first-time adoption thereof
The consolidated financial statements of the Group have been prepared based on IFRS issued by theInternational Accounting Standards Board.
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 Consolidated Financial Statements (Ordinance of the Ministry of Finance No. 28 of 1976; the“Ordinance on Consolidated Financial Statements”), the Group adopts the provisions of Article 93 of theaforementioned rules.
The Group has adopted IFRS from the fiscal year ended March 31, 2017 (from April 1, 2016 to March
31, 2017). Thus, the annual consolidated financial statements for the fiscal year ended March 31, 2017
are the first consolidated financial statements prepared based on IFRS standards.
The date of transition to IFRS was April 1, 2015, and the impacts of the transition to IFRS on theGroup’s financial position, business performance and cash flows are described in Note 9. First-time
adoption.
(2) Basis of measurement
The consolidated financial statements of the Group have been prepared based on costs of acquisition,
except for the specified financial instruments that have been measured at fair value as mentioned in Note
3. Significant accounting policies.
(3) Functional currency and presentation currency
The consolidated financial statements of the Group are presented in Japanese yen, which is thefunctional currency of the Company, and figures less than one million yen are rounded down to thenearest million yen.
(4) Early adoption of new standards
The Group has implemented an early adoption of IFRS 9 “Financial Instruments” (published in
November 2009, and revised in July 2014; “IFRS 9”), as from the date of transition to IFRS.

3. Significant accounting policies
Accounting policies stated below have been continuously applied to all the periods stated in these
consolidated financial statements (including the consolidated statements of financial position at the date oftransition to IFRS).
(1) Basis of consolidation
Subsidiaries
A subsidiary is an entity that is controlled by the Group companies. The Group considers that it hascontrol over an entity when it has exposures or rights to variable returns arising from its involvementwith the entity, while having the ability to affect those returns through the exercise of its power over theentity.
Financial statements of a subsidiary are consolidated from the date on which the Group obtains control
over such subsidiary, until the date on which the control is lost.
If the accounting policy adopted by a subsidiary is different from that adopted by the Group, financial
statements of such subsidiary shall be subject to adjustment as deemed necessary. Intra-Group balances−

17 −of receivables and payables and intra-Group transactions, as well as unrealized gains or losses arisingfrom the intra-Group transactions shall be eliminated at the time when consolidated financial statements
are prepared.
If the Group loses control over the subsidiary, gains or losses derived from such loss shall be recognizedas profit or loss.
(2) Business combinations
Business combinations are accounted for by using the acquisition method. Consideration for an
acquisition is measured at the sum of the acquisition-date fair value of the assets transferred, liabilities
assumed, equity instruments issued by the Group in exchange for the control over the acquiree. If thesum of the fair value of consideration for the acquisition, amount of non-controlling interests in theacquiree, and (if it is a step acquisition) equity interests in the acquiree held previously by the acquirer
exceeds the net amount of identifiable assets and liabilities, such excess is recognized as goodwill in the
consolidated statements of financial position. If, conversely, the sum turns out to be less than the net
amount of identifiable assets and liabilities, the balance shall be directly recognized as profit or loss.
Costs incurred by the Group companies in connection with the business combinations, such as agent
commissions, legal fees and due diligence costs, are recognized as expenses in the period in which they
are incurred.
If the initial accounting for business combinations is incomplete by the end of the fiscal year in which
the business combinations occur, the Group companies report provisional amounts for the items for which
the accounting is incomplete. Those provisional amounts are retrospectively adjusted during themeasurement period to reflect new information obtained about facts and circumstances that existed at
the acquisition date that, if known, would have affected the amounts recognized as of that date.
Additional assets or liabilities are recognized if new information is known to have resulted in the
additional recognition of assets or liabilities. The measurement period does not exceed one year.
Additional acquisition of the non-controlling interests is accounted for as an equity transaction, in
which no goodwill shall be recognized.
Identifiable assets and liabilities in the acquiree are measured at their acquisition-date fair value,
except for the following.
- Deferred tax assets and liabilities, as well as assets and liabilities associated with employee benefits
contracts- Contract on compensation based on the shares in the acquiree- Assets or asset disposal groups classified into those held for sale in accordance with IFRS 5 “Noncurrent Assets Held for Sale and Discontinued Operations”(3) Foreign currency translation① Foreign currency transactions
Foreign currency transactions are translated into the functional currencies of individual Group
companies using the exchange rate at the date of transactions.
At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies
are translated into functional currencies using the exchange rate at the end of the reporting period.
Non-monetary assets and liabilities measured at fair value and are denominated in foreign currencies
are translated using the exchange rate at the date when such fair value was determined.
Translation adjustments arising from translations or settlements are recognized as profit or loss;
provided, however, that translation adjustments arising from financial assets measured through othercomprehensive income as well as from cash flow hedges are recognized as other comprehensive income.
② Financial statements of foreign operations
Assets and liabilities of foreign operations are translated into Japanese yen using the exchange rates atthe end of the reporting period. Income and expenses are translated into Japanese yen using the averageexchange rates for the fiscal year unless exchange rates significantly fluctuate during the period.
Translation adjustments arising from translation of financial statements of foreign operations arerecognized as other comprehensive income. Such translation adjustments of foreign operations arerecognized as profit or loss for the period in which the foreign operations concerned are disposed of.
−18 −(4) Financial instruments① Financial assets(i) Initial recognition and measurement
The Group classifies financial assets into financial assets that are recognized when it becomes a party to
the contract on the financial instruments concerned, and measured at fair value through profit or loss, or
through other comprehensive income, and financial assets measured at amortized cost.
All financial assets are measured at fair value plus transaction expenses, except for those classified intoa category subject to fair value measurement through profit or loss.
Financial assets are classified into financial assets measured at amortized cost, on the condition thatthey meet both of the following criteria.
- Financial assets are held based on the business model to hold financial assets for the purpose ofcollecting contractual cash flows.
- Contractual terms associated with financial assets gives rise to cash flows on specified dates, consisting
only of payment of the principal and interest on the principal balance.
All financial assets other than those measured at amortized cost, are classified into financial assets
measured at fair value.
With respect to financial assets measured at fair value, excluding equity instruments held for trading
subjected to fair value measurement through profit or loss, each equity instrument shall be designatedwhether to be measured at fair value through profit or loss, or measured at fair value through othercomprehensive income, and such designation shall remain applicable to each such instrument thereafter.
(ii) Subsequent measurement
Measurement of financial assets after the initial recognition shall be as follows, depending on respectiveclassification.
(a) Financial assets measured at amortized cost
Financial assets measured at amortized cost are measured at amortized cost using the effective interest
method.
(b) Financial assets measured at fair value
Changes in the fair value of financial assets measured at fair value are recognized as profit or loss,
provided, however, that changes in the fair value of those equity instruments designated to be measured atfair value through other comprehensive income, shall be recognized as other comprehensive income. Suchamount recognized as other comprehensive income shall not be transferred to profit or loss ex post facto.
When financial assets are derecognized, amounts previously recognized in other comprehensive income are
directly reclassified into retained earnings. Meanwhile, dividend from such financial assets shall berecognized as profit or loss for the period, as part of finance income.
(iii) Impairment of financial assets
The Group recognizes impairment of financial assets, based on the determination at the end of eachreporting period as to whether financial assets or financial assets group measured at amortized cost present
significant increase in credit risk since their initial recognition. Specifically, if there is no significant
increase in credit risk since their initial recognition, estimated credit loss in the next 12 months isrecognized as allowance for doubtful accounts. On the other hand, if there is a significant increase in credit
risk since their initial recognition, estimated credit loss during residual period of the financial assets is
recognized as allowance for doubtful accounts. Whether there is a significant increase in credit risk or not
is determined by the change in default risk, and whether there is a change in default risk or not isdetermined based on considerations including significant change in the external credit rating of thefinancial instruments, adverse change in the business condition or financial position, and overdue
information, provided, however, that trade receivables are subject to recognition of estimated credit loss forthe residual period of the financial assets since initial recognition.
Estimated credit loss is measured based on the discounted present value of the difference between thecontractually receivable amount and the estimated amount of receipt.
(iv) Derecognition of a financial asset
The Group derecognizes a financial asset when the contractual right to cash flows derived from the−

19 −financial asset expires or nearly all of the risks and rewards of the ownership thereof are transferred outside
the Group. Meanwhile, if the Group remains in control of such transferred financial asset, liabilities
associated therewith shall be recognized to the extent of its continuous involvement therein.
② Financial liabilities(i) Initial recognition and measurement
The Group recognizes financial liabilities when it becomes a party to the contract concerning the financial
instruments concerned, and they are classified into financial liabilities measured at fair value throughprofit or loss, or those measured at amortized cost.
All financial liabilities are subject to initial measurement at fair value, whereas financial liabilities
measured at amortized cost are subject to measurement at fair value less directly attributable transaction
costs.
(ii) Subsequent measurement
Measurement of financial liabilities subsequent to its initial recognition shall be as follows, depending
on respective classification.
(a) Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss include financial liabilities for trading
purpose as well as financial liabilities designated to be measured at fair value through profit or loss at theinitial recognition, which thus shall be measured at fair value after the initial recognition while changes
therein shall be recognized as profit or loss.
(b) Financial liabilities measured at amortized cost
Financial liabilities measured at amortized cost are measured at amortized cost subsequent to the initialrecognition, by using the effective interest method.
Amortization by the effective interest method, as well as gains and losses associated with thederecognition shall be recognized as part of financial expenses in profit or loss.
(iii) Derecognition of a financial liability
The Group derecognizes a financial liability when it is extinguished, namely when the obligation specified
in the contract is discharged, cancelled or becomes invalid.
③ Presentation of financial assets and liabilities
Financial assets and liabilities are offset, with the net amount presented in the consolidated statementsof financial position, only if the Group companies hold a currently enforceable legal right to set off therecognized amounts, and there is an intention to settle on a net basis or to realize the asset and settle theliability simultaneously.
④ Derivatives and hedge accounting
The Group uses derivatives, such as exchange contracts, interest rate swaps and commodity forward
contracts, as hedging instruments against exchange rate risk, interest rate risk and commodity price risk.
These derivatives are initially measured at fair value at the date of contract, and are subsequently remeasured at fair value.
The Group officially makes designation and prepares documentation at the inception of the hedge,
regarding the hedging relationship to which hedge accounting is applied, as well as the risk management
objectives and strategies in the hedges. Such documentation mainly contains specific hedging
instruments, hedged items or transactions, and the method for evaluating the nature of the risks to behedged and the hedging effectiveness. Such hedges shall be continually evaluated to determine whether
they have been effective throughout the financial reporting periods subject to the hedging designation.
Specifically, a hedge is determined to be effective when all of the following criteria are met.
- Economic relationship between hedged items and hedging instruments is of mutually offsetting
nature- Impact on credit risk is not significantly larger than the changes in valuation derived from theeconomic relationship−20 −- Hedge ratio is the same as the ratio determined quantitatively from the hedged items and hedging
instruments practically in use
Hedge accounting used by the Company when criteria for hedge accounting are met, is as follows.
Cash flow hedges
Of the gains or losses associated with the hedging instruments, the portion resulting from hedging
effectiveness shall be recognized as other comprehensive income in the consolidated statements ofcomprehensive income, while the rest shall be recognized as profit or loss directly in the consolidated
statements of income.
The amount associated with hedging instruments recorded in other comprehensive income istransferred to profit or loss, at the point in time when the hedged transactions exerts impact on profit orloss.
Even in the event that the hedging relationship no longer meets the hedge ratio-based criteria forhedging effectiveness, such ratio associated with the hedging relationship shall be adjusted again to meetthe criteria, insofar as the risk management objectives remain the same (the “rebalancing”).
If, after the rebalancing, the hedges no longer meet the criteria for hedge accounting, or if hedging
instruments are eliminated, sold, terminated or exercised, adoption of hedge accounting shall be
discontinued for the future period. When the Group discontinues hedge accounting, the balance of cash
flow hedges that have been recognized in other comprehensive income remain in equity if the hedged
future cash flows are still expected to occur, or the balance is immediately reclassified to profit or loss if
the hedged future cash flows are no longer expected to occur.
(5) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, and other short-term
highly liquid investments with original maturities of three months or less and insignificant risk ofchanges in value.
(6) Inventories
Inventories are measured at the lower value between cost or net realizable value. Net realizable value
is determined at the estimated selling price in the ordinary course of business less estimated costrequired up to the completion of the process and estimated selling expenses. The costs of inventories arecalculated principally by using the moving average method, which include purchase cost, processing cost,and other costs incurred in bringing inventories to their present location and condition.
(7) Property, plant and equipment
Property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses.
Cost includes any costs directly attributable to the acquisition of assets, dismantlement, removal, andthe restoration of land, as well as borrowing costs eligible for capitalization.
Depreciation of all items of property, plant and equipment other than land and construction in progress
is recorded by the straight-line method over the respective estimated useful life. Estimated useful lives ofmajor asset items are as follows:- Buildings and structures: 2-50 years- Machinery, equipment and vehicles: 2-17 years
The estimated useful lives, residual values and depreciation methods are subject to review at the end ofeach reporting period, and any change to them is prospectively applied as a change in an accounting
estimate.
(8) Goodwill
Goodwill arising from the acquisition of a subsidiary shall be recorded in the consolidated statements offinancial position at its book value, namely cost less an accumulated impairment loss.
Goodwill is not amortized, subject to impairment test in each fiscal year, or as appropriate when there
is an indication of impairment loss.
−

21 −Impairment loss of goodwill is recognized as the consolidated statements of income, which shall not bereversed thereafter.
(9) Intangible assets
Intangible assets acquired separately shall be measured at cost at the time of initial recognition.
Intangible assets excluding those with indefinite useful lives are amortized after the initial recognition,
based on the straight-line method over their respective estimated useful lives, and recorded at their bookvalue i.e. cost less accumulated amortization and accumulated impairment loss. Estimated useful lives ofmajor items of intangible assets are as follows, while there is no significant intangible asset that has anindefinite useful life.
- Software: 5 years
The estimated useful lives, residual values and amortization methods are reviewed at the end of eachyear, and any change to them is prospectively applied as a change in an accounting estimate.
(10) Lease transactions
Leases involving transfer to the Group of substantially all the risks and rewards associated with theownership of the leased assets, are classified into finance lease, while other type of leases are classified
into operating lease.
Leased assets in finance lease transactions are subject to initial recognition at the fair value of theleased property determined at the inception of the lease, or the present value of the total amount of theminimum lease payments also at the inception of the lease, whichever lower. Such assets, following theinitial recognition, shall be subject to depreciation based on the accounting policies applicable thereto,over the estimated useful lives or the lease term, whichever shorter.
Lease payments are allocated into finance costs and the payments of lease obligations. Finance costs
are distributed, so that the interest rate will remain at a certain level against the obligation balance foreach lease term.
Lease payments in operating leases are recognized as expenses in the consolidated statements ofincome, using the straight-line method over the lease term. Variable lease payments are recognized as
expenses for the period in which such payments are made.
(11) Impairment of non-financial assets
The Group companies assess at the end of each reporting period whether there is an indication that a
non-financial asset, except for inventories and deferred tax assets, may be impaired. If any such
indication exists, the Group companies estimate the recoverable amount of the asset. For the intangible
assets with indefinite goodwill and useful lives, or those yet to be usable, are subject to impairment tests
in each reporting period, regardless of whether there is indication of impairment loss.
The recoverable amount of an asset or cash-generating unit is the larger of its value in use and fairvalue less costs to sell. In assessing value in use, the estimated future cash flows are discounted to theirpresent value using a pre-tax discount rate that reflects the time value of money and the risks specific to
the asset. Assets that are not subject to separate impairment test, are integrated into the smallest cashgenerating unit involving continuous use, thus generating cash inflow largely independent of cash inflows
from other assets or asset groups. Impairment test of goodwill involves integration of cash-generating
units to which goodwill is allocated, to ensure the impairment test is done reflecting the smallest unit
involving goodwill. Goodwill acquired through business combinations is allocated to the cash-generating
unit expected to achieve synergy from the business combinations.
Corporate assets of the Group do not generate independent cash flows. If there is an indication that
corporate assets may be impaired, the recoverable amount is determined for the cash-generating unit towhich the corporate assets belong.
Impairment losses are recognized as profit or loss when the book value of an asset or cash-generating
unit exceeds its estimated recoverable amount. Impairment losses recognized as respect of a cashgenerating unit are recognized as principle first reducing the book value of any allocated goodwill andthen are allocated to other assets of the cash-generating unit on a pro-rata basis based on the book valueof such assets.
Impairment losses recognized as respect of goodwill are not reversed. Assets other than goodwill are−

22 −reviewed at the end of each reporting period to assess whether there is any indication that an impairment
loss recognized as prior years may no longer exist or may have decreased. An impairment loss is reversed
if there is a change in the estimates used to determine the asset’s recoverable amount. The reversal of an
impairment loss does not exceed the book value, net of required depreciation and amortization, which
would have been determined if any impairment loss had never been recognized for the asset in prioryears.
(12) Employee benefits
The Group adopts defined benefit plans as well as defined contribution plans as retirement benefits
systems.
The Group calculates the present value of defined benefit obligations and associated current service
cost as well as past service cost by using the projected unit credit method.
For the purpose of applying discount rate, a discount period is determined based on the period up to the
expected date of future benefit payment in each fiscal year, whereby discount rate is determined byreference to market yields on high quality corporate bonds at the end of reporting period corresponding to
the discount period.
Liability or asset associated with a defined benefit plan is calculated by subtracting the fair value ofplan assets from the present value of defined benefit obligations.
Remeasured amount of a defined benefit plan is recognized at once as other comprehensive income in
the period in which the remeasurement takes place, and immediately reclassified from other componentsof equity to retained earnings.
Past service cost is recognized as profit or loss in the period in which it arises.
Expenses associated with retirement benefits based on a defined contribution plan are recognized as
expenses at the point of disbursement.
(13) Share-based payment
The Group adopts equity-settled and cash-settled share-based compensation systems.
For equity-settled share-based compensation system, services received and corresponding increases inequity are measured at the fair value of (the equity financial instruments) as of the grant date, and arerecognized as expenses over the vesting period, while the same amount is recognized as increases inequity. For cash-settled share-based compensation system, services received and the liabilities incurred
are measured at the fair value of the liabilities, and are recognized as expenses over the vesting period,
while the same amount is recognized as increases in liabilities. The fair values of the liabilities are
remeasured on the balance sheet date and on the date of settlement, and any changes in fair value arerecognized as profit or loss.
(14) Provisions
Provisions are recognized when the Group companies have a present legal or constructive obligation asa result of past events, it is probable that an outflow of resources will be required to settle the obligation,and the amount has been reliably estimated. Where time value of money is material, estimated future
cash flows are discounted into present value, by using the pre-tax interest rate reflecting the time valueof money as well as the risks inherent to the associated liabilities. Reversal of the discounted amount due
to passage of time is recognized as finance costs.
(15) Revenue
Revenue is measured at the fair value of considerations received with respect to sale of goods orprovision of services less discounts, rebates and sales-related taxes.
① Sale of goods
Revenue from the sale of goods is recognized when the Group transfers to the buyer significant risks
and rewards associated with ownership of the goods, without retaining continuous involvement in, nor
substantial control over the goods, while the Group perceives a highly probable inflow of future economic
benefit associated with such transfer, and when such benefit and associated cost are reliably measurable.

−

23 −

While terms and conditions on the timing of transfer of risks and economic benefits associated with theownership of goods are different depending on an individual sales agreement, revenue is usually
recognized when the goods are delivered to customers.
② Provision of services
Revenue derived from the provision of service is recognized based on the progress of the transaction at
the end of the reporting period in which the service is provided.
(16) Current and deferred income taxes
The income tax comprises current and deferred income taxes. These are recognized as profit or loss,
except for the items associated with business combinations and those directly recognized as equity orother comprehensive income.
Current taxes are measured at an expected amount of taxes to be paid to or of refund from the tax
authorities. The amount of taxes is calculated based on the tax rates and the tax laws that have beenenacted, or substantially enacted by the end of the fiscal year in the countries where the Group conducts
business activities and generates taxable profit.
Deferred tax assets and liabilities are recognized, based on the temporary differences between the bookvalues of assets and liabilities for accounting purposes and their amounts for tax purposes on the balance
sheet date, as well as unused tax losses and unused tax credits.
However, deferred tax assets and liabilities are not recognized for the following temporary differences.
- Temporary differences arising from the initial recognition of goodwill- Temporary differences arising from the initial recognition of assets or liabilities generated fromtransactions other than business combinations, which affect neither accounting profit nor taxable profit- Taxable temporary differences arising from investments in subsidiaries and affiliates, insofar as thetiming of its reversal is at the discretion of the Group, and that such reversal is not likely in theforeseeable future
Deferred tax liabilities are recognized as principle, for all taxable temporary differences, while deferred
tax assets are also recognized for all taxable temporary differences, but to the extent that the Group is
likely to earn the level of taxable income that warrants the use of taxable temporary differences.
The book value of deferred tax assets is reviewed every reporting period, and reduced to the extent that
the Group is no longer likely to earn the level of taxable income that warrants the use of the whole or partof deferred tax assets. Unrecognized deferred tax assets are reviewed every reporting period, and arerecognized to the extent that it has become likely that future taxable income will achieve recovery ofdeferred tax asset.
Deferred tax assets and liabilities are measured, in accordance with the tax rates and the tax laws thatare expected to prevail in the period in which the asset is realized or the liability is settled, based on the
tax laws and the tax rates that have been enacted or substantially enacted at the end of the fiscal year.
Deferred tax assets and liabilities are offset, if the Group has a legally enforceable right to offset acurrent tax liability against current tax asset, and income taxes are imposed by the same tax authorities
on the same taxable entity.
(17) Per share information
Basic earning per share is calculated by dividing profit attributable to common shareholders of parent,by the weighted-average number of common shares outstanding, subject to the adjustment to the numberof treasury shares for the period concerned. Diluted earning per share is calculated reflecting theadjustment of the impact from all diluted shares with dilutive effect.
(18) Segment reporting
Business segments correspond to business activities, from which the Group companies earn revenues
and incur expenses, including revenues and expenses relating to transactions with other businesssegments. Discrete financial information on operating results of all business segments is obtainable, andis regularly reviewed by the Board of Directors of the Company in order to determine the allocation of
resources to each segment and assess its performance.
−

24 −(19) Assets held for sale
Assets or asset groups expected to be recovered not by continuous use but by sale that are quite likely
to be sold within one year, while available for immediate sale in its present condition on the basis solely of
normal or conventional terms and conditions and management of the Group is committed to such sale,shall be classified as non-current assets or disposal group held for sale. In such case, non-current assets
shall neither be depreciated nor amortized, and shall be measured at book value or fair value less cost tosell, whichever lower. With respect to the initial or subsequent reduction in book value of non-current
assets (or disposal group) to the fair value less cost to sell, impairment loss is recognized as profit or loss.
In the case of increase in the fair value less cost to sell thereafter, gain on valuation shall be recognized as
profit or loss to the extent, however, not exceeding the accumulated impairment loss recognized thitherto.
(20) Treasury stock
Treasury stock is measured at acquisition cost and deducted from equity. No gain or loss is recognizedassociated with the purchase, sale or retirement of treasury stock of the Company. Any difference between
the book value and the consideration received from the sale is recognized as capital surplus.

4. Significant accounting estimates and associated judgements
In preparing consolidated financial statements, the management is required to make judgment, estimatesand assumptions that affect the adoption of accounting policies and the amounts of assets, liabilities,
revenues and expenses. Actual results may differ from such estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. The effect of a change inaccounting estimates is recognized in the accounting period in which such change occurs as well as theaccounting periods to be affected in the future.
The estimates and judgements made by the management that may have material impacts on the figuresin the consolidated financial statements are as follows.
- Impairment of property, plant and equipment, goodwill and intangible assets
The Group tests property, plant and equipment, goodwill, and intangible assets for impairment inaccordance with Note “3. Significant accounting policies.” Assumptions concerning future cash flows,
discount rates, etc., are set to calculate recoverable amounts in testing for impairment. Although theseassumptions are determined based on management’s best estimates and judgement, they may be affected
as a result of changes in uncertain future economic conditions. Should those assumptions require change,
the consolidated financial statements may be significantly affected.
- Recoverability of deferred tax assets
A deferred tax asset is recognized to the extent that it is likely that taxable income will be available
against which the deductible temporary difference can be utilized. In determining the probability thattaxable income will be available, the Group estimates the timing and the amount of the taxable income
based on the business plan. Although these estimates are management’s best estimates, the actual results
may differ as a result of changes in uncertain future economic conditions.

−

25 −

5. Segment information(1) Overview of reporting segments
The Group’s reporting segments are those Group constituent units for which separate financial
information is obtainable, and which the Board of Directors subjects to regular examination in order todecide the allocation of management resources and evaluate business results.
As a pure holding company, the Company is in charge of overall strategic function for the Group,
whereas operating companies of the Group engage in the precious and rare metals recycling business andthe refining and processing business, industrial waste management and other environmental
preservation business, and life & health business including manufacturing and selling of healthequipment.
Therefore, the Group is composed of product and service segments based on business sectors. The threereporting segments are the precious metal business, the environmental preservation business, and thelife & health business. Meanwhile, these reporting segments are not be aggregated.
The precious metals business engages mainly in recycling and selling of precious and rare metals suchas gold, silver, palladium, platinum, and indium, as well as refining and processing of precious metals
such as gold and silver. The main work of environmental preservation business is the collection, transport
and intermediate processing of industrial waste. In the life & health business, the main work is the
manufacture and sales of massagers, hearing aids, and other health equipment, the manufacture andsales of electric heaters, the design and installation of radiant heating and air conditioning systems, andthe design and installation of disaster prevention equipment.
(2) Segment revenue and performance
Accounting policies of the reporting segments are the same as those of the Group stated in “Note 3.
Significant accounting policies.”
Revenue and other performance of each reportable segment of the Group are as follows.
For the fiscal year ended March 31, 2016 (from April 1, 2015 to March 31, 2016)(Millions of yen)
Reporting segment
Precious metalbusiness

Environmental
preservation
business

Life & healthbusiness

77,967−

15,666122

25,718
1

119,352
123

77,967

15,78925,720

119,476

4,577

2,802

1,260

8,639

Total

Adjustment

Consolidated

−
(123)

119,352−(123)

119,352(2,582)

6,057

Revenue
External revenue
Intersegment revenue
Total
Operating income by businesssegment
Finance income
Finance costs

39
(227)

Profit before tax

5,868

Others:Depreciation and amortization

1,089

495

175

1,761

627

2,389

Impairment loss

3,824

258

45

4,127

66

4,194

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

−

26 −

For the fiscal year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)(Millions of yen)
Reporting segment
Precious metalbusiness

Environmental
preservation
business

Life & healthbusiness

66,994−

15,86775

23,966
0

106,82876

66,994

15,942

23,967

(61)

3,256

1,359

Total

Adjustment

Consolidated−(76)

106,828−

106,905(76)

106,828

4,555(2,516)

2,038

Revenue
External revenue
Intersegment revenue
Total
Operating income (loss) bybusiness segment
Finance income
Finance costs

17
(304)

Profit (loss) before tax

1,751

Others:Depreciation and amortization

1,045

511

177

1,735

605

2,340

Impairment loss

7,580

13

53

7,647

5

7,653

(Note) 1. Intersegment transactions are based on prevailing market prices.
2. Adjustments of operating income (loss) by business segment are mainly corporate expenses that are notallocated to each reporting segment.
3. Please refer to page 28 “6. Goodwill” for the detailed information of Impairment loss.

−

27 −

6. Goodwill
Goodwill impairment loss
Goodwill impairment loss recorded in the current fiscal year is as shown below:
In the precious metal business, following the deterioration of business environment and decrease in therevenue of Asahi Refining, the Company decided to record 7,512 million yen in other operating expenses as
impairment loss after carefully examining its future recoverability on the goodwill generated at its
acquisition. The recoverable amount for the said business, which is 6,768 million yen, is measured at value
in use. The amount is calculated by discounting estimated cash flows based on the business plan for the next
five years as approved by the management to the present value using 11.5% discount rate, which is the pretax discount rate based on weighted average capital cost of the cash-generating units of other companies inthe same industry. Cash flows beyond the period covered by the business plan are estimated using thelong-term average growth rate and other indicators of the market to which the cash-generating units belong.
Impairment loss is recorded as “Other operating expenses” in the Consolidated Statements of Income.

7. Per share information
The following shows basic earning (loss) per share.
Diluted earning (loss) per share is not presented as the Company has no potential stocks with dilution
effect.
The fiscal year ended

The fiscal year ended

March 31, 2016

March 31, 2017

Profit (loss) attributable to owners of parent (Millionsof yen)Number of weighted average common shares
outstanding during the fiscal year (Shares)
Basic earning (loss) per share (Yen)

8. Subsequent events
Not applicable

−

28 −

2,867

(1,213)32,773,714

32,599,539

87.48(37.24)

9. First-time adoption
The Group has started to disclose IFRS-based consolidated financial statements from the fiscal year
under review (from April 1, 2016 to March 31, 2017). The last Japan GAAP-based consolidated financial
statements were prepared for the fiscal year ended March 31, 2016, while transition to IFRS took place on
April 1, 2015.
(1) Exemption under IFRS 1
A company adopting IFRS for the first time (“first-time adopter”) is required to retrospectively apply
the standards required under IFRS, provided, however, that IFRS 1 ”First-time Adoption of International
Financial Reporting Standards” (“IFRS 1”) specifies certain standards subject to compulsory applicationof exemption (from the aforementioned retrospective application), along with others subject to voluntary
application of exemption. Impacts from the application of these exemptions are adjusted by retained
earnings, or other components of equity on the date of transition to IFRS. In the process of transition to
IFRS from Japan GAAP, the Group adopted the following exemptions.
- Business combinations
A first-time adopter is allowed to elect not to retrospectively apply IFRS 3 “Business Combinations” tothe business combinations that took place before the date of transition to IFRS. The Group elected, byapplying this exemption, not to retrospectively apply IFRS 3 to the business combinations that took place
before the date of transition. As a result, the amount of goodwill arising from the business combinations
before the date of transition is recognized at the book value as at the date of transition based on theJapan GAAP. Incidentally, goodwill is subject to impairment test on the date of transition, regardless ofwhether there is an indication of impairment loss.
- Foreign currency translation adjustments of foreign operations
Under IFRS 1, an option is allowed whereby cumulative translation differences of foreign operations as
at the date of transition to IFRS may be assumed to be nil. The Group elected to assume such cumulativetranslation differences to be nil as at the date of transition to IFRS.
(2) Compulsory exception under IFRS 1IFRS 1 prohibits retrospective application of IFRS with respect to “estimates,” “derecognition offinancial assets and financial liabilities,” “hedge accounting,” “non-controlling interest,” and“classification and measurement of financial assets.” Thus the Company applies IFRS to these items fromthe date of transition and onwards.
The reconciliation required to be disclosed at the first-time adoption of IFRS is as follows.

−

29 −

(3) Reconciliation
The reconciliation required to be disclosed at the first-time adoption of IFRS is as follows.
Reconciliation of equity as of April 1, 2015 (date of transition to IFRS)Line item underJapan GAAP

Japan
GAAP

Reclassificationof line items

Difference inrecognition and

IFRS

Notes

measurement

Millions

Millions

Millions

Millionsof yenof yenof yenof yenLine item under
IFRS

AssetsAssetsCurrent assets

Current assets
Cash and cash

Cash and deposits
Notes and accounts
receivable-trade
Inventories

11,046(205)−

10,841

15,146

1,973(1,267)

15,851

15,630

−

854
−

(854)
2,506

187
−
−

15,817
−

−
5,919

674
(4,988)(40)(1)(2),(3)equivalents
Trade and other

(4)
(4)

receivables
Inventories

2,506

(6)
(2)

Income tax receivables

−
−

674
930

(1),(3)(2)

Other financial assets
Other current assets

40

−

−

(3)

48,556(854)(1,079)46,622

Property, plant andequipment

32,334−

1,328

33,663(7)

Goodwill
Intangible assets

21,737
906

−
−

−
−

(8)

Investment securities
Deferred tax assets

168
368

−

Net defined benefit asset

154
−

(168)
854
−

21,737906−

Other
Allowance for doubtful

676

Deferred tax assets

Other
Allowance for doubtful
accounts
Total current assets
Non-current assets

accounts
Total non-current
assetsTotal assets

1,291

807

68
−
−

(662)

−

13

(24)

24

−

−

56,321854

1,397

58,573

104,877−

317

105,195

−

30 −

154
807

Total current assets
Non-current assets(5)(6)(3),(5)

Property, plant andequipment
Goodwill
Intangible assets
Deferred tax assets
Net defined benefit asset
Financial assets
Other non-current assets(3)
Total non-current
assetsTotal assets

Line item underJapan GAAP

Japan
GAAP

Reclassificationof line items

Difference inrecognition and

IFRS

Notes

measurement

Millions

Millions

Millions

Millionsof yenof yenof yenof yenLine item under
IFRS

Liabilities and Equity
Liabilities
Current liabilities

Liabilities
Current liabilities

Notes and accounts
payable-trade

6,161

5,460

165

11,787(2)

Trade and otherpayablesShort-term loans
payable26,171

270−

26,441(9)Loans payable

Current portion of longterm loans payable

270

(270)

−

−

(9)

Accounts payable-other
Income tax payable

3,473
2,111

(3,473)
−

−
−

−

(2)

2,111

−

46

−

46

1,362
776

−

(102)
−

1,259
−

Provisions
Deferred tax liabilities
Other
Total current
liabilities
Non-current liabilities
Long-term loans payable
Deferred tax liabilities
Net defined benefit
liability

Other
Total non-current
liabilities
Total liabilities
Net assets(776)

Income tax payable(5)

Other financial
liabilities
Provisions

(6)
(2),
(5),(11)5,276(2,033)

396

3,638

Other current liabilities

45,603(776)

459

45,286

6,550

−

−

6,550

1,567

776

(282)

2,061

126

−

−

126

−

72

−

72

(5)

72

(72)

−

0

(5)

8,316

776

(282)

8,810

53,919−176

54,096

−

−
−

4,480
6,116

Capital stock
Capital surplus−(5,159)Treasury stock

Total current
liabilities
Non-current liabilities
Loans payable(6)

Deferred tax liabilities
Net defined benefit
liability
Other financial
liabilities
Other non-current
liabilities
Total non-current
liabilities
Total liabilities
EquityCapital stock
Capital surplus

4,480
6,038

Treasury stock
Subscription rights to(5,159)

77
−

77

(77)

−

−

44,459−539

44,999

685

−

(338)

346

50,582−200

50,783

Total equity attributableto owners of parent

375

−

(60)

315

Non-controlling interests

50,958−140

51,098

Total equity

104,877−

317

105,195

Total liabilities and equity

sharesRetained earnings
Total accumulated othercomprehensive income

Non-controlling interests
Total net assets
Total liabilities and net
assets

−

31 −

(12),
(13)
(12)

Retained earnings
Other components ofequityReconciliation of equity as of March 31, 2016
Line item underJapan GAAP

Japan
GAAP
Millionsof yenReclassificationof line items

Difference inrecognition and

IFRS

Notes

measurement

Millionsof yenMillionsof yenLine item under
IFRS

Millionsof yenAssetsCurrent assets

AssetsCurrent assets

Cash and deposits

16,668(103)−

16,564(1)

Cash and cash
equivalents

Notes and accounts
receivable-trade

11,558

3,827

(741)

14,644(2),(3)(4)

Trade and otherreceivables

15,244
937
−
−

−
(937)

(153)
−

15,090
−

(4)
(6)

2,520
105

−
−

2,520
105

(2)
(1),(3)

Income tax receivables
Other financial assets

7,192(6,380)

−

811

(2)

Other current assets

(31)

31

−

−

(3)

51,570

(937)

(895)

49,737

Inventories
Deferred tax assets

Other
Allowance for doubtful
accounts
Total current assets
Non-current assets
Property, plant andequipment
Goodwill−

997

31,788(7)

16,922

(8)

969
−

(5)
(6)
(3),(5)

19,136

Intangible assets
Investment securities

969
155

−
(155)

(2,213)−−

Deferred tax assets

322
−

937
771

121
−

1,381
771

Other
Allowance for doubtful

664

(637)

−

27

(21)

21

−

−

52,019937(1,095)51,861

103,589−(1,990)101,599

accounts
Total non-current
assetsTotal assets

Total current assets

30,791−−32 −Inventories

Non-current assets
Property, plant andequipment
Goodwill
Intangible assets
Deferred tax assets
Financial assets
Other non-current assets(3)
Total non-current
assetsTotal assets

Line item underJapan GAAP

Japan
GAAP

Reclassificationof line items

Difference inrecognition and

IFRS

Notes

measurement

Millions

Millions

Millions

Millionsof yenof yenof yenof yenLine item under
IFRS

Liabilities and Equity
Liabilities
Current liabilities

Liabilities
Current liabilities

Notes and accounts
payable-trade

8,875

6,063

186

15,125(2)

Trade and otherpayablesShort-term loans
payable

1,845

5,270

−

7,115

(9)

Loans payable

Current portion of longterm loans payable

5,270(5,270)−−(9)

Accounts payable-other
Income tax payable

1,891
2,012

(1,891)
−

−
−

−

(2)

2,012

−

187

−

187

1,534

−

(11)

1,522

Provisions
Other

Income tax payable(5)

Provisions
(2),

7,012

(4,359)

300

2,953

28,442−475

28,917

21,584−(1,080)20,503

(10)

1,937

−

(355)

1,582

(6)

142

−

−

142

119

−

(119)

−

−

62

1,403

1,465

62

(62)

−

−

23,846−(153)

23,69352,288−322

52,610Capital stock
Capital surplus

4,480
6,112

−
−

−
−

4,480
6,112

Treasury stock(5,371)−−(5,371)

Total current
liabilities
Non-current liabilities
Long-term loans payable
Deferred tax liabilities
Net defined benefit
liability
Provisions

Other
Total non-current
liabilities
Total liabilities
Net assets

Retained earnings
Total accumulated othercomprehensive income

Non-controlling interests
Total net assets
Total liabilities and net
assets47,524−(1,678)45,845(1,884)−(591)(2,476)50,862−(2,270)48,591Other financial
liabilities(5),(11)

Other current liabilities
Total current
liabilities
Non-current liabilities
Loans payable
Deferred tax liabilities
Net defined benefit
liability(5),(10)

Other financial
liabilities(5)
Total non-current
liabilities
Total liabilities
EquityCapital stock
Capital surplus
Treasury stock
(12),
(13)
(12)

Retained earnings
Other components ofequityTotal equity attributableto owners of parent

438

−

(42)

396

51,300−(2,312)

48,988

Total equity

103,589−(1,990)101,599

Total liabilities and equity

−

33 −

Non-controlling interests

Notes on reconciliation of equity(1) Reclassification of cash and deposits
Time deposits with deposit terms of over three months, which were included in “cash and deposits” underJapan GAAP, are reclassified into “other financial assets (current)” under IFRS.
(2) Reclassification of other current assets and current liabilities
Accounts receivable – other, which were included in “other” of current assets under Japan GAAP, have been
reclassified as “trade and other receivables” and “Income tax receivables” under IFRS, while accounts payable– other, which was presented as a separate item of current liabilities, and accrued expenses, which were
included in “other” under Japan GAAP, have been reclassified as “trade and other payables” under IFRS.
(3) Reclassification of allowance for doubtful accounts
Allowance for doubtful accounts (current),” which was separately presented under Japan GAAP, has been
reclassified under IFRS to be directly deducted from “trade and other receivables” as well as “other financial
assets (current)” to present their net amounts, while “allowance for doubtful accounts (non-current)” has also
been reclassified under IFRS to be directly deducted from “financial assets (non-current)” to present the net
amount.
(4) Adjustment to operating receivables and inventories due to changes in timing of revenue recognition
Timing of revenue recognition for some of the transactions of sales of goods which were recognized on
shipment basis under Japan GAAP has been changed to customer delivery basis under IFRS, whereby
operating receivables and inventories are subject to adjustments accordingly.
(5) Reclassification of other financial assets and financial liabilities
Investment securities,” which were presented separately under Japan GAAP, have been reclassified as“financial assets (non-current)” under IFRS. Lease obligations, which were included in “other” of current
liabilities and “other” of non-current liabilities under Japan GAAP, have been reclassified as “other financial
liabilities (current)” and “other financial liabilities (non-current),” respectively, under IFRS.
(6) Reclassification of deferred tax assets and deferred tax liabilities, review of recoverability of deferred tax assets
Since IFRS requires all deferred tax assets and liabilities to be classified as non-current items without
making a distinction between current and non-current items, deferred tax assets and liabilities which werepreviously recorded as current items have been reclassified as non-current items. Meanwhile, as a result of
the adoption of IFRS, the recoverability of all deferred tax assets is currently under review and consideration.
(7) Adjustment to the recorded amount of property, plant and equipment
Under the Japan GAAP, the Group was mainly using the declining-balance method for the purpose ofdepreciating property, plant and equipment (excluding lease assets); under the IFRS, the Group has adopted
the straight-line method.
Fixed asset acquisition tax, which was treated as expenses under Japan GAAP, is capitalized under IFRS.
(8) Adjustment to the recorded amount of goodwill
Goodwill was amortized over a certain period of time under Japan GAAP, whereas it is not subject toamortization under IFRS. In addition, goodwill was subject to reviews for decisions on impairment only when
there was an indication of impairment under Japan GAAP, while impairment tests are conducted every
reporting period under IFRS.
Based on the difference between Japan GAAP and IFRS, the precious metal business segment recognized
3,776 million yen impairment loss in the fiscal year ended March 31, 2016. Recoverable amount is measured
at value in use, and calculated by discounting future cash flows using 11.84% discount rate.
(9) Reclassification of loans payable
Current portion of long-term loans payable,” which was presented as a separate item of current liabilities,
has been reclassified as “loans payable (current)” under IFRS.
−

34 −(10) Adjustment to loans payable and other financial liabilities
With respect to derivative transactions for the purpose of avoiding risks associated with fluctuations ofinterest rate of long-term borrowings as well as those of exchange rate, exceptional accounting (tokurei-shori)and designated hedge accounting (furiate-shori) were adopted for the basis of hedge accounting under Japan
GAAP, whereas under IFRS, they are measured at fair value.
(11) Adjustment to other current liabilities
Allowance for unused compensated absences, which was not accounted for under Japan GAAP, is recorded
as “other current liabilities” under IFRS.
(12) Reclassification of accumulated translation adjustments for overseas subsidiaries
Exemption under IFRS 1 was elected at the first-time adoption, whereby the accumulated translation
adjustments as at the date of transition to IFRS have been wholly reclassified as retained earnings.
(13) Reconciliation of retained earnings
Date of transition to
IFRS(April 1, 2015)

As of March 31, 2016

Millions of yen

Millions of yen

Adjustment to trade receivables and

(359)

(156)

1,328

997

−

(2,213)

(874)

(895)

translation adjustments for overseas
subsidiaries

338

338

Other

(305)

(162)

Subtotal
Tax effect reconciliation

128
351

(2,092)
371

Reconciliation for non-controllinginterests

60

42

539

(1,678)inventories
Adjustment to recorded amount ofproperty, plant and equipment
Adjustment to recorded amount of
goodwill
Reconciliation of compensatedabsences payable
Reclassification of accumulated

Total

−

35 −

Reconciliation of profit or loss and comprehensive income for the fiscal year ended March 31, 2016 (from April 1,2015
to March 31, 2016)
Line item underJapan GAAP

Japan
GAAP

Reclassificationof line items

Difference inrecognition and

IFRS

Notes

measurement

Line item under
IFRS

Millions

Millions

Millions

Millions

Net salesof yen118,473of yen−of yen879

of yen119,352(1)

Revenue

Cost of sales(92,719)−(675)(93,394)(1)

Cost of sales

Gross profit

25,753−204

25,958Selling, general andadministrative expenses(17,048)

(72)

1,421

(15,699)(2)

Selling, general andadministrative expenses

−
−

157
(545)

(48)
(3,765)109(4,310)(3)(4)

Other operating income
Other operating expenses

Operating income

8,705

(460)

Non-operating income
Non-operating expenses

89
(284)

(89)
284

(2,187)
−
−

6,057
−
−

Extraordinary income
Extraordinary loss

109
(512)
−
−

(109)
512

−
−

−
−

(3)
(4)

40
(251)

(1)
24

39
(227)

(5)
(5)

Income before income
taxes

8,106

(72)

(2,165)

5,868

Profit before tax

Income taxes-current
Income taxes-deferred(3,153)
179

251
(179)

18
−

(2,883)−

Income tax expenses

Profit5,132−(2,146)

2,985

ProfitOther comprehensive
incomeGross profit

Operating income(3),(5)(4),(5)

Finance income
Finance cost

Other comprehensive
incomeItems that will not bereclassified to profit or loss

Valuation difference on
available-for-sale

(4)

1

−

(2)

securities
−

−

(99)

(99)

(4)

−

(99)

(102)

Financial assets measured
at fair value through othercomprehensive income
Remeasurements ofdefined benefit plans
Total of items that will not
be reclassified to profit orloss
Items that will bereclassified to profit or loss

Deferred gains or losses
on hedges
Foreign currencytranslation adjustment

Total othercomprehensive income
Comprehensive income

(425)

−

(268)

(693)

(2,148)−15(2,133)(2,573)−(252)(2,826)(2,577)−(352)(2,929)2,554−(2,499)

56

−

36 −

Cash flow hedges
Translation adjustments offoreign operations
Total of items that will bereclassified to profit or loss
Other comprehensive
income, net of tax
Comprehensive income

Notes on reconciliation of profit or loss and comprehensive income(1) Revenue and cost of sales
Timing of revenue recognition for some of the transactions of sales of goods which were recognized on
shipment basis under Japan GAAP has been changed to customer delivery basis, whereby revenue and cost of
sales are subject to adjustments accordingly under IFRS.
(2) Selling, general and administrative expenses
Goodwill was subject to amortization under Japan GAAP, whereas it is not under IFRS, and therefore, theamount of amortization of goodwill under Japan GAAP has been reversed.
(3) Other operating income
Gain on sales of non-current assets and others, which were presented as extraordinary income under Japan
GAAP, are presented as other operating income under IFRS.
(4) Other operating expenses
Loss on sale and disposal of non-current assets and others, which were presented as extraordinary loss
under Japan GAAP, are presented as other operating expense under IFRS. Based on the difference between
Japan GAAP and IFRS, the precious metal business segment recognized 3,776 million yen impairment loss forthe fiscal year ended March 31, 2016.
(5) Finance income and costs
Interest income, dividend income, and foreign exchange gain, which were presented as non-operating
income under Japan GAAP, as well as interest expenses and foreign exchange losses, which were presented as
non-operating expenses under Japan GAAP, are presented as finance income and finance costs, respectively,
under IFRS.

Reconciliation of cash flows for the fiscal year ended March 31, 2016 (from April 1, 2015 to March
31, 2016)
There is no significant difference between the consolidated statements of cash flows disclosed based on JapanGAAP and those disclosed based on IFRS.

−

37 −

5. Others(1) Amounts of SalesYear ended March 31, 2016
Amount(Millions of yen)

Year ended March 31, 2017Gold

39,023Year-on-Year(%)−

32,76284.0

SilverPalladium

4,318
14,401−−

4,454
12,695103.1
88.2

Platinum
Industrial waste treatment

7,615
17,936−−

5,271
18,018

69.2
100.5

Other

36,058−33,624

93.3

Total

119,352−

106,828

89.5

−

38 −

Amount(Millions of yen)

Year-on-Year(%)