For the Society
We continue making our social
contributions through various
activities as a good corporate citizen
that should coexist in harmony withsociety.

INDEX
25

Corporate Governance

27

With Our Customers

28

With Our Communities

30

With Our Employees

35With Our Shareholders and Investors

For the Society

CORPORATE GOVERNANCE
Under the holding company structure, the Group is committed to building a stronger group governance anddriving risk management.

Corporate governance philosophy
In order to meet the expectations of stakeholders and to maximize the corporate value, we are committed to enhancing our corporate
governance with Asahi Holdings taking the initiative as a holding company. Operating companies, Asahi Pretec and Japan Waste maketimely decisions and develop operations in each specialty area in order to reinforce competitiveness and expand profitability. With eachcompany carrying out its functions, we will strive to achieve lasting growth and development as a corporate group. Currently, one out of
the seven directors and two out of the three statutory auditors are selected as external corporate executives, monitoring and supervising
management from an independent perspective.

● Asahi Holdings Corporate Governance Structure

Shareholders' General Meeting
Board of Directors
7 Board Member（including 1 outside director)

Accounting
Auditors

Board of Auditors

audit

Auditors(including 2 outside auditors)
audit(Independent
Auditor)collaboration

Representative Director

Group Management Strategy Meeting

Each Department of Group Companies
audit

Internal Auditing
Asahi Pretec

Japan Waste− 25 −

audit

Maintaining an internal control
systemRisk management
To properly manage apparent and potential risks in businessactivities, we study risks from a comprehensive standpoint, against
which assessment is performed and actions taken. We are working
hard to prevent risks from arising, and to minimize losses whenrisks develop into a crisis, through the promotion of risk management.

We have enhanced our internal control system by establishing a
structure in which the Board of Directors, Board of Corporate
Auditors, Accounting Auditors, Internal Audit Department, andInternal Control Department each works effectively to develop
regulations and implement company-wide initiatives regarding
compliance, risk management, and information management.
Additionally, Asahi Way provides codes of conduct the Group
employees should adhere to in order to perform fair and soundbusiness activities.

Business continuity plan (BCP)
Due to various factors such as large scale disasters, there is a riskthat our Group’s functions needed for business continuity may
weaken. As an action plan to achieve quick restoration of missioncritical functions even after a disaster, we created a business
continuity plan and have carried out the following initiatives:

Compliance
We consider compliance a priority issue in delivering fair businessactivities and ensuring legal compliance and high ethical standards.
Particularly, operations related to appropriate processing of wastes
are based on environmental laws and regulations as well as governmental licenses, and each and every employee is required to always
act with a highly compliant mindset. We are conducting activities
to raise the legal compliance awareness of each and every employee through education and mutual communication, along with rules
and manuals related to compliance.

・Installation of power generators in major plants to supply
backup power・Suppression of peak power [use] by adjusting running hoursof plant equipment and by saving electricity in offices
・Strengthening of backup of information systems including
servers
・Decentralization of some parts of production and processing(multiple locations supplementing each other)・Enhancing of earthquake resistance in equipment andfacilities
・Reinforcement of facilities to prevent leakage or diffusion ofchemicals, etc.
・Storing of drinking water and food at all Group locations (43sites)
・Maintaining a system for safety confirmation and updated
emergency contact information

Handling of Conﬂict Metals

IT Protection Education Program

Adhering to a strict rule on neither purchasing nor using any conflict minerals, we construct and operate our management system
by setting our procurement and management policies. Receiving
a designated third-party audit, in compliance with EICC Gold Conflict-free Smelter Program (www.conflictfreesmelter.org), we acquired the relevant “EICC Gold Conflict-Free Smelter Program Certification”. Asahi Pretec Corp. will fulfill a level of responsibility
commensurate with a recycler of precious metals and will make aneffort in neither purchasing nor using any conflict minerals so that
our customers around the world can make use of our precious
metal products without anxiety.

Internal reporting system
To quickly identify and resolve problems such as unlawful andunjust behavior, we have set up “Asahi Hotline” (internal issue-reporting program). An external law firm acts as a contact point andresponds to calls, including anonymous disclosures. We improve asystem where disclosed matters are to be investigated and corrective actions taken without revealing the identity of the disclosing
and disclosed parties.

*Conflict metals can be defined by any conflict minerals derived from countries orregions, in which any inhuman acts such as conflicts, human trafficking, slavery,
forced labor, child labor, abuse, war crimes, any terrorist activities, or any fraudulent activities such as money laundering, which can become a source of war
chests.

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For the Society

WITH OUR CUSTOMERS
We make efforts to provide detailed responses to the wide-ranging needs of each of our customers
under our motto that “customers come ﬁrst.”

Initiatives to
Improve Customer Service● Customer Satisfaction Surveys● Fair trade initiatives

We periodically conduct Customer Satisfaction Surveys. We survey
the level of satisfaction with our business activities as a whole, andthen improve upon problem areas based on the results of thereports. Hereafter, we will continue conducting periodic surveys
and working to improve customer satisfaction.

Our group [of companies] provides, in the Asahi Way (Page 3),“Prohibition of Acts That Compromise Fair Competition”, “Confidentiality of Supplier Information and Technology”, “Prohibition of
Inappropriate Offering/Receiving of Benefits” and other rules, toensure fair trade practices and compliance with corporate ethics.

Quality Assurance System

Risk Management System for
Information Leakage

We hold a Quality Assurance Meeting that is led by the Quality Assurance Division through an amalgamation of our Sales Division,
Technology Development Division, and Product Manufacturing Division. Through this meeting we share information such as customer opinions and market trends in our efforts to improve customer
satisfaction. In addition, in order to provide customers with products that earn greater reassurance and satisfaction from customers,
we have acquired ISO9001 certification and strive to make continuous improvements to our quality management system and maintenance and enhancement of quality. In March 2010, we integrated thecertifications of four bases which acquired ISO9001 certification andstarted operation of a company-wide uniform quality managementsystem. Furthermore, Asahi Pretec also makes efforts to reduce theenvironmental burden while giving consideration to “green procurement” and the Restriction of Hazardous Substances (RoHS) Directive, which is a European regulations on chemical substances.

We employ the latest security measures on PCs and tablet-type devices used by sales persons. In case of the property loss or theft, we
can reduce the possibility of information leakage close to as zero bymeans of deleting the information through remote operation, andetc. Recycling Centers located in Saitama and Amagasaki acquired
ISO27001 certification in March 2011. We provide a data deletionand HDD destruction, etc. service as measures to prevent information leakage in connection with disposal of PCs and contribute to
information protection through our business activities.

Acquisition of
ISO 9001 approval
Asahi Pretec Co., Ltd.
Technical Research Center
Fukuoka Plant
Ehime Plant
Saitama Plant

Data deletion using an exclusive software

ISO9001 Certiﬁcate− 27 −

WITH OUR COMMUNITIESUnderstanding and support from people in local communities are indispensible for our company since we develope
our business operation across the county. To be a company that coexists with society as a corporate citizen, we
carry out activities that are rooted in communities in various ways.

Our Initiative Activities● Effort for the Environment Beautiﬁcation
Since 1999, at the time of Okinawa Office establishment, all thestaff member at Okinawa Office have cleaned up beaches aroundNishizaki area in Itoman City. It sometimes happens at the sea inthe district that marine creatures eat the rubbish by mistake. We
feel even more keenly the importance of the continuous environment cleaning activities and will make continued efforts for thecommunity environment conservation activities.

● Kobe Association of Corporate Executive’s

Forest Project
We participate in “The Kobe Association of Corporate Executive’s(KACE) Forest Project”, a volunteer program organized by KACE.
This program is intended to assist efforts to develop the forests
over five years, and employees of participating companies work on
forest conservation and engage in nature walks. The program
includes volunteer activities (forest thinning and improvement
cutting) on Mt. Futatabi-san in the Rokko Mountains, and willcontinue in the future.

● Patrol Activity for the Illegal Waste Dumping/

Clean-up Activity
Ecomax Co., Ltd., one of our group companies, conducts a regularenvironment patrol around Samukawa town in Chigasaki city cooperating with companies belonging to Industrial Wastes Associationin the central district of Kanagawa Prefecture. We also engage in theclean-up and environment beautification activities around the Sagami River, which is one of the most precious water sources.

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For the Society

Social Contributions ThroughBusiness Activities
We agree with the purpose and support the activities of the 8020
Promotion Foundation for the 8020 Campaign (a campaign to still
have over 20 of one’s own teeth upon reaching the age of 80).
We also recycle the removed teeth crowns collected by dental clinics
that agree with the purpose of the cooperating organization forreproducing precious metals such as gold and palladium. The net
profits obtained from sales of these precious metals are madeavailable as funds to assist the activities of various cooperatingorganizations.

©V. Dupont/Medecins Du Monde
Medical assistance by Medecins Du Monde<Major organizations that our company assists>● The 8020 Promotion● The Japan Cleft Palate

Foundation

Foundation, a Speciﬁed NPO(Provides medical assistance to children withoral handicaps such as cleft lips and palates)● Medecins Du Monde Japon, a Speciﬁed NPO(Provides medical assistance to people suffering from wars
and natural disasters)

TOPICS

Participation in the TOOTH FAIRY Project
The social project “TOOTH FAIRY”, promoted by the cooperation of Nippon Foundation and Japan Dental Association, recycles metals that have finished their functional role at dental clinics across Japan to support children andtheir families both domestically and abroad. As a partner company in metals recycling, we participate in supporting and operating this project. The project contributes establishing “The Ocean View Forest”, a facility that
supports children with incurable diseases and serious disabilities, and “Child Chemo House - Dream Hospital”, a
residential center for pediatric chemotherapy that allows children and their families to live together during their
healing. As an overseas project, we have built schools in Myanmar to support the education of economicallydisadvantaged children.

TOPICSInternational Environmental Management Program
Asahi Pretec Corp. participated, as a cooperative company, in the
Fukuoka International Environmental Management Program foryoung administrative officers assuming the role of environmental
measures and policies in Asian countries. Trainees from overseas
were invited to our Kita-Kyushu Plant and a lecture on the industrial waste and incineration disposal a plant tour were conducted.
They gained better understanding about the industrial treatment
technology through lively questions from the trainees.

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WITH OUR EMPLOYEES
By respecting individuality, we aim to create a positive and cohesive workplace in which employees
develop their skills through work and ﬁnd something to live for. Also, we are providing various support
so that each and every employee can bring out the best in their work and engage and ﬁnd their duties“rewarding” and “fulﬁlling”.

Creating an Environment Where People Can Work Free from Anxiety

Living one’s life by utilizing the abilities to full extent while striking a balance between
challenging, rewarding work and a fulfilling personal life is not only important to employees,
but to the company as well. There are a wide variety of important values in one’s personal
life, such as family, health, sports, and hobbies, which vary depending on each individuals.
Our company offers support which allows employees to strike a balance in their personal andworking lives.

Work-Life Balance● Holding General Meetings of Employees● Mental Healthcare

We hold a general meeting of employees every year. At the general
meeting of employees a number of different activities are held,
including a message from CEO, presentations on the previous term’s
performance and priority issues for the current term and discussions
between top management and employees.

It is said that stress from work or daily-living related anxieties or
worries is spreading in our modern society.
At Asahi Holdings, we believe that mental health is a vital key to ouremployees’ productivity and the improvement of their vitality, andwork with industrial medical professionals with expertise on mental
healthcare to provide individual consultations and preventive
seminars. In addition, efforts are made toward comprehensive
health management and seminars concerning better health throughmedical viewpoints are given whenever necessary.

General Meeting of Employees● Our Healthcare Administration

Individual Consultation

Regular physical examination programs (e.g., checkup for preventing lifestyle-related disease, checkup for people engaged in designated operations, and general medical checkup), which are requiredby law, are offered to all employees. For those aged 45 or above andall managers, a comprehensive medical checkup program is offered.
We also support medical checkups for brain and PET scans for early
detection of cancer upon requests from eligible employees.
100% of the employees go through these routine checkups, whichshows that both the company and the employees are committed to
improving health, preventing disease, and detecting early symptoms.

Mental Health Care Management Traiing− 30 −

For the Society● Self-assessment system● Childcare Leave

Once a year, all employees are asked to carry out a written self
assessment on topics including how effectively they are using theirabilities, their suitability for their roles, their feelings of challenge
and accomplishment, and the atmosphere in their workplace, andare invited to write about their desired career path. The report cardalso includes a checklist to self-diagnose the degree of fatigue
accumulation. The completed self assessments are submitted
directly to the HR department, which works together with employees’ managers and supervising directors in order to adjust personnel
assignments, improve the work atmosphere, and promote a feelingof rewarding and encouraging work.

The Company supports the balance between birth, childcare andnursing care of family members and work. We support working
patterns suited to the lifestyles of employees by shortening working
hours specified in the childcare leave system.

● Holiday for Refreshment
This is a system whereby employees can take three to five days ofcontinuous holiday time every year beginning in their second year.
This makes it possible to take nine days of continuous vacation time
if weekends are included, which can be used for travel with family or
hobbies.

● Interviews for all employees
Every three years, individual interviews are held for all employees.
Employees are asked about their current work environment andtheir jobs in the interview. In order to improve the working environment by taking into account the work-life balance for each employee, employees are advised to maintain an appropriate workload aswell as [appropriate number of] working hours.

● Employee Survey
Every three years, an “employee surveyl” is given to all company
employees. This survey is carried out in order to objectively measure employees’ attitudes to and levels of satisfaction with theirworkplace, work, managers and the company, and their awarenessof the corporate culture. The survey results are used to promote thefurther development of the organization and its employees.

● Supporting Company Club Activities
Communication between colleagues and with clients is enhanced
through club activities such as baseball and futsal.

● Employment of Disabled Persons
Employees with disabilities engage in the same types of work thatphysically unimpaired employees do at our workplaces.

Amagasaki Recycling Center− 31 −

Fostering Human Resources

Employees at all levels/in all lines of work are encouraged to become professionals with anemphasis on expertise, and are offered original certification programs as well as internal
educational curriculums. Additionally, so-called ASG Activities are carried out in small groups
on a voluntary basis. Furthermore, we hope to cultivate ambition in employees through aperformance-based personnel system which evaluates the performance and contributions ofeach employee in an impartial and fair manner.

HR development
philosophy● Employee Training Program
Our company provides education suited to the employees’ level ofproficiency from the time they join the company (Entrance Training,
Step-up Training, Power-up Training), as well as education andtraining for selective human resources by rank (Junior Leader
Training, Manager Training, Leader Training). In addition to which

we also instill each individual with the practical knowledge neededby professional human resources through training by division andtechnical ability education. We have also established training
programs which make it possible to nurture specialized capabilities.

Step-up Training

Power-up Training

Training by rank

Entrance training

Self-education

Support for acquiring qualifications

Correspondence education

ASG Activities (Asahi Small Group Activities)

DIPS Training (Dental Division training)− 32 −

Promotion test and training

Leader Training

Manager Training

Junior Leader Training

Power-up Training (around 1 year after joining the company)

Step-up Training (around 3 to 6 months after joining the company)

Primary
management
positions

Training upon joining
the company

Mid-level
management
positions

Training for management positions
upon joining the company

High-level management positions
Specialized andfull-time positions

Training for new entrants

Training by division

For the Society

Promoting Safety and Health Activities
Initiatives for OSHMS

Environmental Safety Education

It is essential to nip disasters in the bud by focusing on the innumerable risks latent in the workplace and reducing such risks in advanceso as to reduce the number of disasters. Our company aims to
improve the safety and health standards of our workplaces by
incorporating the reasoning behind the Occupational Safety and
Health Management System (OSHMS*) and reducing risks.
Our OSHMS is based upon reducing workplace risks by repeatedly
applying the PDCA Cycle. This is a sequential cycle which runs from“establishing a plan” based on assessments of factors contributing torisk and hazards (Plan) -> “implementing the plan” (Do) -> “evaluating the results of the plan” (Check) -> “revisions and improvements
based on the evaluation” (Act).

Environmental safety education is conducted as part of the Human
Resource Fostering Program in the employee training systemdescribed above, and teaches things like a frame of mind for safely
conducting work and basic knowledge of hazardous substances.
Furthermore, we also incorporate into this role play-type education
which holds group discussions by envisioning specific emergency
situations, such as how you should react if a fire were to break out
during working hours. We also contrive of means to enable individuals to correctly understand the actions that should be taken at theactual work site.

A(Act)

Revise and improve

C(Check)Conﬁrm and evaluate
the progress

D(Do)Implement
the plan

Environmental safety education

P(Plan)In terms of on-site support, on-the-job training (OJT) is provided by
specialized staff concerned with health and safety at our sales andplant sites. We strive to improve health and safety in workplaceenvironments by means of safety instruction to workers and persons
in charge.

Create a plan

Rank challenges
in order of priority
Identify and evaluate
risk factors* Occupational Safety and Health Management System

TOPICS

Approach to Safety Activity

We make an effort for a risk reduction by picking up and improving potential risks in the work place. In January 2012, a
special project team for tightening security measures was
set up in order to accept and study the information of theserious industrial accidents, the hazardous waste liquid spillincidents and the explosion accidents occurred in othercompanies. We made on-site visits with our revised strict
safety standards and found 94 risk factor items, which canlead to serious accidents. In FY2012, we implemented a risk
assessment of those risk factors extracted and 32 items were
improved by prioritizing of the measures and actions. Continuous amelioration for the rest of the items will be executed accordingly.

Plant training− 33 −

Responding to Emergencies

Safety Commendation Activities

By way of safety measures at plants, our company seeks out risks
regarding our business activities, decides on a “Safety Promotion
Director” for each work site, and takes preventive measures. In
addition, we have set in place a structure for promptly responding
to any problems in the event that something should occur.
Furthermore, as a means of responding within the company andoutside the company when emergencies occur, we have completed
the “Emergency Response and Management Manual. ” We have also
distributed “Accident and Disaster Response Procedures,” whichcontain essentials for responding to accidents and disasters when
they initially occur, and have mandated that every employee mustcarry these with them at all times.
We set up the disaster headquarters led by our CEO of Asahi Holdings on the day of the Great Eastern Japan Earthquake in March,
2011. Then we confirmed all of the safety of our employees andtheir family members and offered support for our damaged production/sales sites to be restored.

Every year, we strive to enhance awareness of safety by holding
activities to commend business sites and employees who havemade a contribution to safety management at general meetings of
employees.

TOPICS

Safety commendation

Re-assessment of Heightof Tsunami, Tidal Waves

Creating Vital Workplaces
Through Small Group Activities

We re-assessed the envisioned maximum height of Tsunami
of each office in our group companies in preparation for
Tokai Earthquake, Tonankai Earthquake, Nankai Earthquake,
which are said they are well overdue and ready to happen at
any moment. Cabinet Office released them re-assessed number of the maximum height of each earthquake. Based on thenumbers reviewed, we re-investigate the height of Tsunami
at each office in group companies and shared the information of the evacuation area, the route, etc. Each office conducts an emergency drill to prevent the expansion of thedamage and to take measures so that we can act appropriately without any confusion in a state of emergency.

We implement what we call Asahi Small Group Activities (ASG
Activities) with voluntary participation from employees within thesame workplace. Through these activities, participants use theircreativity to work toward solving issues and problems within theirworkplace. Groups with outstanding efforts are awarded at theemployee general assembly.

Fireﬁghting training

INTERVIEW

Taking Part in AGS Activities

Kyushu Plant, where I work for, treats, disposes and manages the industrial wastes properly, which
are collected from all customers across the nation. On-site inspections by our customers, who are
the original waste producers, and factory tours by the overseas trainees are frequently made atour plant. Providing a thorough control, as a trusted and reliable factory offering a proper disposal for the industrial waste, we take a serious effort for the plant aesthetic maintenance and improve the work environment. Emphasizing on the self-maintenance and the management rule
review, we have aimed for getting the state of “the always well-organized plant “entrenched,without just ending a simple cleaning activity, by creating the working atmosphere where everybody can work on one’s own initiative. The activity brought us a lot of positive impacts on ourdaily work such as a smooth communication among the organization and the deep understanding of the facility derived from the enhancment of the self - maintenance consciousness.

− 34 −

Group Leader Koji Kodama
Kita-Kyushu Plant

For the Society

WITH OUR SHAREHOLDERS AND INVESTORSWe are proactively promoting growth strategy and striving to improve corporate value and provide
stabilized returns to our shareholders through business development.
● Stock Distribution by Shareholders● Net Sales

Securiteis ﬁrms
555,339 stocks

1.53%
Treasury Stocks
3,517,739 stocks

9.70%

Indivisuals and Others
13,943,247 stocks

38.46%

Other Corporations
3,608,700 stocks

9.95%
Financial Institutions
7,424,650 stocks

20.48%

Foreign Investors, etc.
7,204,669 stocks

19.87%
as of March 31, 2013

● Operating Proﬁt

Basic Policy on Shareholder Returns
In order to continue to grow our corporate value, we carry out strategic investment for growth while working to enhance our revenue
base. Our payout ratio is a key metric in the distribution of the proceeds of this, and we return profits to our shareholders through theprovision of a stable dividend.

● Dividend Per Share● ROE (Return on Equity)

TOPICS
Selected “ESG Theme Issues” by Tokyo
Stock Exchange (TSE) Group, Inc.

● Capital Equity Ratio

ESG stands for “Environmental”, “Social”, and “Governance”.
It is expected that appropriate evaluation for companies’ attitudes toward ESG issues and its incorporation into investment decision will contribute to solving and improving environmental problems and social issues, as well as developing asound capital market. Fifteen companies were selected as acompany with high evaluation of ESG activities and higher
ROE compared to the industry average, and Asahi Holding
was evaluated and selected as one of the companies among
over 1,600 listing companies at TSE 1st section.

− 35 −