ASAHI WAY
The Asahi Way

The Asahi Holdings Group has established the Asahi Way as a set of values forall employees. The Asahi Way is made up of Our Credo, Our Corporate Values,
Our Employee Principles, and the Group Code of Conduct. The Asahi Way
drives the Group’s sustainable growth and improves corporate value over the

medium to long term, and directors and management executives take the leadby serving as role models who put it into practice.

“Totally Committed to
Our Purpose
PURPOSE
Protecting the Natural Environment
and Preserving Resources”

Our Credo

Our Employee Principles

We conserve limited natural
resources,preserve the global
environment, and contribute to therealization of a sustainable world.

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

Our Corporate Values
Cooperation with stakeholders

We constantly seek to earn even greater trust fromshareholders, customers, business partners, employees,
and local communities as we work to preserve the naturalenvironment.

Corporate governance with a balance of protective
and proactive measures

We boldly promote growth strategies and business reform
while securing transparency in decision-making and properly
managing risk.

No growth without profit

We realize long-term improvement of shareholder value
by ensuring the entire group grows and is profitable.

Trusted corporate brandWe aim to be widely recognized as an exemplary corporategroup and to build a brand that will be trusted over many years.

Addressing diverse risks

We strive to minimize risks and avert disasters by taking daily
safety measures in workplaces and by constantly working toprevent accidents.

Highly motivated employees

We promote work-life balance for employees and continuously
improve working environments and conditions.

Strong sense of mission and high ethical standards
We strive to be an organization where employees take pridein their own work and executives maintain a strong sense of
mission and high ethical standards.

Being a company of good people

We value good employees over the long term.
Our vision of a "good employee" is a person who is not selfcentered and who contributes to mutual prosperity and thedevelopment of the business.

INTEGRATED REPORT 2022

The Asahi Holdings Group Code of Conduct#1

We comply with all laws and regulations#2

We respect the dictates of social norms
and our own conscience#3 	We treat everyone equally, regardless ofage, gender, nationality, race, religion,or other characteristics#4 	We refrain from conducting any politicalor religious activities in the workplace#5

We treat customers with sincerity#6
We practice fair competition and	optimal decision-making whenselecting business partners#7 	We respect the confidential information
obtained through our work andavoid disclosing it externally#8 	We refrain from providing or receiving
meals or gifts in pursuit of personal
benefit#9 	We act for the greater good, not for
personal or affiliated parties’ gain#10 	We focus on the actual sites, actual
things, and actual facts

Contents
About Asahi Holdings

ESG Initiatives

STRENGTHS  �������������� 02
History of the Asahi Holdings Group…………… 04
Message from the CEO …………………………… 06

E ENVIRONMENT
Environmental Initiatives of
the Asahi Holdings Group………………………… 38
Environmental Management …………………… 40
Climate Change Initiatives ……………………… 41
Response to Recommendations by the Task
Force on Climate-related Financial
Disclosures (TCFD)……………………………… 42

Totally Committed to Protecting the Natural
Environment and Preserving Resources
The Value Our Business Provides
Long-Term Vision, Risks, and Opportunities
Looking Back at the Year Ended March 31, 2022
Forecast for the Year Ending March 31, 2023
Pursuing Social Sustainability and Business
Expansion Simultaneously
To Our Stakeholders
At a Glance ………………………………………… 14

Value Creation Drivers and Business
Models……………………………………………… 15
Overview of Asahi Holdings Value Creation
Process  ���������������� 16
Consolidated Financial/Non-Financial
Highlights…………………………………………… 18
Long-Term Vision and Medium-TermBusiness Plan……………………………………… 20
Overview of the 9th Medium-Term Business
Plan………………………………………………… 21
Financial Strategy………………………………… 22
Sustainability Strategy…………………………… 23
Asahi Holdings Business Portfolio
Precious Metals Business ……………………… 24
Environmental Preservation Business ……… 30
Asahi Holdings Materiality ……………………… 36

Editorial Policy
This report provides an overview of theactivities and operations of Asahi Holdings,
Inc., with a focus on the company’s
measures to address social issues throughits business activities. It has been prepared
as a way for the Asahi Holdings Group tocommunicate with a broad range ofstakeholders and explain the kind of value itis working to create. By presenting specificgroup activities and initiatives, the report
also serves as a company profile.

S SOCIETY
Human Capital to Support Business andStrategy……………………………………………… 44
Initiatives for Responsible Precious Metals
Management ……………………………………… 46
Relationship with Society………………………… 48
G GOVERNANCE
Corporate Governance…………………………… 50
Compliance and Risk Management …………… 53
Director Profiles ………………………………… 55
Special Feature

Roundtable Discussion with
Outside Directors…………………… 56

Financial and Non-Financial Data……………… 62
Group Company Structure/
External Evaluations……………………………… 64
Corporate Group Overview/
Share Information………………………………… 65

Report Period
April 1, 2021, to March 31, 2022
Scope
In principle, this report covers the entire
Asahi Holdings Group, including Asahi
Holdings, Inc., and its consolidated
subsidiaries.

Numbers and Graphs
The figures shown here are rounded off. Dueto this rounding, totals may not agree withthe constituent figures shown.
The Group adopted the International
Financial Reporting Standards (IFRS) in
fiscal 2016, and each reporting item namebasically follows the IFRS guidelines.
The financial figures for fiscal 2015 are also
shown based on IFRS.

About the Group's Logo
The Group’s logo uses a spiral shape
as a motif to signify the corporate
stance in seeking "environmental
preservation through recycling,"a main feature of its business; thelogo also indicates continuity andgrowth. The arrows pointing upwardand downward symbolize Asahi
Holdings as an advanced, cuttingedge company. The three colorsof blue, red, and green signify"clean water and sky," "the energyof people carrying out activities,"and "beautiful nature and forests,"
respectively.

Note on Future Prospects
In addition to past and current facts about
the Group, this report includes forecasts
based on strategies, outlooks, and businessplans. These forecasts were created basedon information available at the time ofwriting. Therefore, it is important to notethat actual performance and results may
differ greatly from any forecasts presented
here, and depend to a large extent on futurechanges in the business environment.

ASAHI HOLDINGS

01

Our Strengths

STRENGTHS
Our Strengths Based on the "Asahi Way"A Trust-Based
Relationshipwith Our Employees

Innovate andEmbrace Challenges
Putting the "Scrap and Build" Business Approach into PracticeBeing a Company of Good People

This year marks the 70th anniversary of our company, which was founded in 1952. Since our founding, we have consistently promoted businesses
that contribute to the creation of a recycling-oriented society, and we have now developed into a company that operates on a global scale.
Looking back on our company's history, our journey has been a series of "innovations and challenges." We got our start recycling silver fromphotographic fixer, and in 1975, we became the first company in Japan to obtain an industrial waste disposal license from Kobe City, which is alicense for detoxifying waste photographic fluid containing hazardous substances. This helped our business to expand nationwide.
Since then, while managing to overcome various difficulties, we have expanded the scope of our precious metals recycling to sectors that also
involve handling precious metals other than silver, such as dentistry, jewelry, electronics, and catalysts. At the same time, we've taken on thechallenge of creating new businesses. In addition, we have acquired about 20 companies over the past 20 years, primarily in the Environmental
Preservation Business. Further, we obtained a North American refining company in a major acquisition, transforming our business portfolio. On
the other hand, we did not hesitate to make an early exit from businesses that we determined should not be continued from the perspectives of
profitability, growth potential, and synergy. Our withdrawal from the photographic materials business and the Life & Health Business Segment,
which remained profitable at the time of withdrawal, are two such examples. Our "scrap and build" approach to business has allowed us toinnovate and embrace challenges.

A trusting relationship with our employees has definitely supported the development of our company. We've gone through a numberof phases, starting off as a family-run business focused on personal ownership ("My Company"); then becoming a business focusedon communal ownership ("Our Company") that worked with its employees to create new businesses in response to various changes;
and finally turning into a publicly listed company with external ownership ("Your Company") that is very mindful of its shareholders andother stakeholders. Throughout this journey, we have maintained a strong sense of purpose and high ethical standards in spreadingthe "Asahi Way," which summarizes the management philosophy and code of conduct that comprise our traditional values. At thesame time, we have actively recruited a diverse workforce with an eye towards future globalization. We have improved compensation
through fair and impartial evaluations and a performance-based system. We have also paid attention to job satisfaction and worklife balance, implementing the internal application system and satisfaction surveys, among other changes. Just as "being a companyof good people," one of the principles of the Asahi Way, suggests, a group of employees that contributes to mutual prosperity andthe development of the business is the foundation for overcoming difficulties brought about by various changes in the businessenvironment.

8 Factors Supporting Value Creation

Promoting Business Reformwith an Emphasis on Speed
Photographic
materials

Major Business
Expansions

1952

Malaysia

1994

Hard drive
magnetic
materials

1999

LCD
indium

2000

PDP

2003

Shanghai

2003

South
Korea

2006

Glass

2009

E-scrap

2011

Precisioncleaning

2011

Taiwan2013

Strengths rooted in Asahi's history

Refining
in NorthAmerica

L&H*

2014

2015

Minting/carbon
treatment inNorth America

2019

Scrap & Build
Hard drive
magnetic
materials

2013
PDP

2017

LCD
indium

2018

2018

2018

2020

2022

ShanghaiTaiwanPhotographic
materials

L&H*

Glass

* Life & Health Business Segment

02

INTEGRATED REPORT 2022

By paying close attention to the businessenvironment and lifecycle and practicing
flexible thinking, decisive action, and quick
decision-making, we have built original
business models and quickly exitedbusinesses in decline. With the ability torespond in this manner, we will continue tomaintain growth.

Management
Capabilities forRegeneration of Business

Major Business
Withdrawals
2011

Ability to Adapt
to Change

Over the past 20 years, we have brought morethan 20 companies into the Group throughmergers and acquisitions, and we have
improved corporate management. Thanks to
our flexible management capabilities matchedto specific business environments, nearly allof our companies perform better than they didprior to joining the Group. We will continue toimprove performance.

Industry-Leading
Unique Technologies
We are proud of the original technologies wehave developed. These include the following
technologies: recovering precious metals
with high efficiency and advanced analyticalcapabilities, properly processing various
industrial waste materials, and productdevelopment based on accurately ascertaining
customer needs. Through constant research anddevelopment, the Group continues to enhance its
unique technologies in each of its business fields.

TrustedAsahi Brand
The Asahi Group's precious metal products
are highly regarded throughout the world fortheir reliable quality. We are committed tobuilding a trusted Asahi brand by continuing
to provide high-quality products and services
in all of our businesses.

Highly MotivatedEmployees
The Group's growth has been driven by our
employees, who share the group-wide valuesof the Asahi Way, deeply value trust andconnections, and are motivated by a passion
for innovation and embracing challenges. The
Group proactively invests in human resources
and continues to develop highly motivatedemployees.

Globally Expanding
Network
Since establishing a local subsidiary in
Malaysia in 1994, we have expanded into
other countries in Asia, including South
Korea, China, and Taiwan. In 2015, we
acquired a refining business in North America
through a merger and acquisition, expanding
our target customer base to countries aroundthe world.

Good Relationships
with Stakeholders
We actively engage in dialogue with investors
and listen to our customers and business
partners to strengthen governance anddevelop our products and services. We value
the mutual trust we have with our employeeswith the local community and work toincrease our long-term corporate value.

Substantial
Market ShareOur highest priority is to satisfy ourcustomers and business partners, and wehave worked hard to improve our products
and services. Our sales and technicalcapabilities that meet a wide range of needs
have earned us the trust of our customers
and enabled us to acquire a strong market
share.

ASAHI HOLDINGS

03

Our 70-year history is one of innovation and challenge.
Over that time, we have developed into a global corporate groupand continue to grow today.

1

Act

1952

Act

Foundation and
Early Decades

1999
2000

1964

Becomes kabushiki gaisha (stock-based company)

1974

Fukuoka sales office opens. Sales offices start to be established

1978

Head Office building completed in Higashi-Nada-ku, Kobe City

1997
1998

Name changed to Asahi Pretec Corp.

1982
1984
1986
1994

1975

L
 aunch of business recycling silver extracted fromphotographic fixerC ompact electrolytic silver collection equipment"PLATA" developed
Precious metals recycling business launched in the dental sector

Precious metals recycling business launched in the platingL isted on the 2nd Section of the Tokyo
Stock ExchangeP romoted to the 1st Section of the Tokyo
Stock ExchangeA sahi Holdings, Inc. established2003

Automobile catalyst business launched

2006

Asahi Pretec Korea Co., Ltd. established2011

E-scrap business launched
Precision cleaning business launchedsolution sector

Precious metals recycling business launched in the electronics
components and jewelry sectors
Compact electrolytic gold collection equipment "ZIPANG" developed
ASAHI G&S SDN. BHD. established in Malaysia
Equipment for detoxification of photographic effluents installedat the Kobe Plant
Industrial waste disposal license acquired from Kobe City
(detoxification of photographic effluent containing harmful
substances)

1978

Registered as an environmental measurement certification office

1990

E ntry into environmental preservation
businesses other than photographic
effluents

3

New Development

2012

The Asahi Way established
Selected for inclusion in an ESG index by the Tokyo Stock
Exchange

2015

C ompany with an Audit and Supervisory Committee system
adoptedNominating and Compensation Committees established
Performance-based stock-option system introduced

2016

International Financial Reporting Standards (IFRS) adopted

2017

Capital increased through new share issue

2018

The Asahi Way undergoes comprehensive revision

2022

Transferred to the Tokyo Stock Exchange Prime Market

2015U S and Canadian gold and silver refining subsidiaries
acquired from Johnson Matthey (UK), and Asahi
Refining USA Inc. and Asahi Refining Canada Ltd.
established

2019

Asahi Refining Florida LLC established2022

C onstruction of new plant in Bando City, Ibaraki Prefecturecompleted

Environmental Preservation
Business

Environmental Preservation
Business

1972

Headquarters operations transferred to Chuo-ku, Kobe City
Technical Research Center opens in Nishi-ku,
Kobe City

Initial public stock offering made on
over-the-counter market

2004

Nihon Chemitech Co., Ltd. acquired

2007

Taiyo Chemical Co., Ltd. acquired

Environmental Preservation Business

Precious Metals Business

1975

2009

across Japan

Precious Metals Business

1952

2002

Public Company

Precious Metals Business

1952

Asahi Chemical Laboratory founded in Joto-ku, Osaka City

1999

2

Act

History of the Asahi Holdings Group2012

History of the Asahi Holdings Group        Kitakyushu Office of Asahi Pretec Corp.
opened2008

Japan Waste Corporation establishedFuji Rozai Co., Ltd. acquired2010

Yokohama Office of Japan Waste

2017

Nihon Chemitech Co., Ltd. and Ecomax Co., Ltd.
integrated into Japan Waste Corporation

2020

Asahi Pretec Corp. and Japan Waste Corporation
integrate environmental preservation businesses

2021A sahi Pretec merges with Japan Waste Corporation
and Taiyo Chemical Co., Ltd.

Corporation opened
Ecomax Co., Ltd. acquired

Business Performance
200(Billion yen)

Operating Profit

25.0

180

22.5

160

20.0

140

17.5

120

15.0

100

12.5

80

10.0

60

7.5

40

5.0

20

2.5

e
u
n
e
v
e
R

0

04

Revenue

1964

1980

1981

INTEGRATED REPORT 2022

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

t
i
f
o
r
P
g
n
i
t
a
r
e
p
O

(Billion yen)0
[FY]

ASAHI HOLDINGS

05

Message from the CEO
Message from the CEO

We Have Always Been—
and Shall Remain—
Totally Committed to Protecting
the Natural Environment
and Preserving Resources.
Representative Director,
President & CEO

Tomoya Higashiura

Totally Committed to Protecting the
Natural Environment and Preserving
Resources
This year marks the 70th anniversary of our company, which
was founded in 1952. Being “Totally Committed to Protecting
the Natural Environment and Preserving Resources” is ourcompany’s purpose. This slogan was inspired directly by asubmission by one of our employees for an in-house contest we
held in 1978. From the company's founding up until that point, ourcustomers had been photo studios and processing laboratories,
and our main business involved recovering silver from silvercontaining liquids and detoxifying hazardous waste liquids. As wedeveloped our own technologies and expertise, we subsequently

06

INTEGRATED REPORT 2022

expanded our business domains to encompass a variety ofservices and products. That being said, there has been no change
to our model of keeping our businesses and social contributions
inseparable. I have a real sense that an increasing number ofpeople inside and outside the company have come to understandand agree with this model. With “Totally Committed to Protecting
the Natural Environment and Preserving Resources” as ourlodestar, we will continue to take our company to new heights.

The Value Our Business Provides
Our business activities consist of two mainstays: Precious Metals
Business and Environmental Preservation Business. Throughthese two businesses, we strive to generate both economic value

and social value.

Precious Metals Business
Demand for precious metals is spreading throughout theindustrial and investment sectors, and the role of the Precious
Metals Business in handling limited precious metal resources
is growing more essential. Our Precious Metals Business isdivided into two areas: precious metals recycling and precious
metals refining. Our precious metal recycling business primarily
recovers gold, silver, palladium, and platinum from a wide varietyof scrap materials-originating in sectors such as electronics,
catalysts (automotive and chemical), dentistry, and jewelrythat contain precious metals to produce high-purity bullion.

The business combines a highly skilled sales force that visitscustomers in person, with plants that have the expertise andbreadth of experience necessary for material recovery. Because
raw materials come in a wide variety of shapes, properties, andquantities, our competitive advantage is derived from flexible
and creative approaches utilizing our experience, technology,
and know-how. We have a leading share in all of these sectors.
Our recycled gold and silver are certified by the London Bullion
Market Association (LBMA) and our platinum and palladium by
the London Platinum and Palladium Market (LPPM), and they
are distributed in the global market. In addition, our uniquetraceability system allows us to prove that the raw materials usedin our products do not contribute to environmental pollution,
regional conflicts, or human rights issues. This kind of certified
gold bullion is referred to as green gold, which adds a premium

ASAHI HOLDINGS

07

Environmental Preservation Business
Our Environmental Preservation Business is engaged in theproper disposal and recycling of industrial waste across thenation. Our nationwide operation is made possible by facilities
capable of handling a wide variety of items, a sales force of 150
people located all over Japan from Hokkaido to Okinawa, andour possession of collection and transportation licenses in allmunicipalities throughout Japan. We also have experience inhandling a wide variety of waste materials over a large area, andwe not only perform actual disposal of industrial waste at ourfacilities, but also turn industrial waste disposal management
into a source of revenue. Specifically, this means that we
present our customers with proposals for an optimal process
flow, from collection and transportation to disposal, and thenreceive fees for these proposals as well as their implementationand management, even if we do not use our own facilities
at all. Companies in the industrial waste industry usuallyoperate out of their own facilities and run their businesses
according to their licensed items, capabilities, and location.
However, we do our business in an opposite way. We initiate
our business according to customer needs. This is what makes
our Environmental Preservation Business unique. Whether

08

INTEGRATED REPORT 2022

customers are trying to tackle global warming by streamlining
collection and transportation routes or increasing recycling
rates, our consulting solutions can help them do so without
being restricted to the use of our own facilities.
We hope that customers will see our company as shifting
the industrial waste treatment industry toward a knowledge
industry. We believe that this will give us a decisive advantage
in the industry in the future. The Plastic Resource Circulation
Act went into effect in April 2022 as Japan looks to achievecarbon neutrality. From an early stage, we have collaborated
with the materials and chemical industries to recycle recyclable
used plastics, all without being particular about the use of ourown facilities or the framework of the industry. In addition,
DXE Inc., which we launched in June 2022, has started a paid
service that offers digital management of a series of businessprocesses, from industrial waste discharge to treatment. Our
goal is to eventually develop into a platform that proposes themost logical transportation and treatment processes for ourcustomers in terms of CO2 reduction and resource conservation.
This will serve as our ultimate goal as we continue to transformthe industrial waste treatment industry into a knowledge
industry.

Long-Term Vision, Risks, andOpportunities
Since we entered 2022, soaring resource and fuel prices, as well
as dizzying fluctuations in exchange rates, have been having asignificant impact on the economy. Dependence on fossil fuels
and global material procurement are becoming unavoidablerisks shared by all industries. That being said, I believe that manybusiness opportunities lie in creating a flow that allows one toevade such risks.

To Be a Leader in Creating a Circular Economy
That Connects Society to the Environment
Looking toward the future of human society, we wish to become“a leader in creating a circular economy that connects society
to the environment.” While this vision will remain constantover the long term, there are two things that we believe weshould pursue with care as we explore how the situation willchange going forward in the face of recent developments in thedomestic and international business environment.
One is that we must take cross-border value chain risks into
careful consideration in seeking to expand our Precious Metals
Business globally. The second is that we must firmly grasp
the changes in behavior of Japanese government and waste
generators in the move toward carbon neutrality as we further
expand our Environmental Preservation Business.
First, with regard to the issue of international value chains, inlight of the tension that has escalated between the United States
and China over the last several years, as well as the current
conflict between the G7 nations and Russia, it is clear that wecannot grow complacent based on the belief that deepening
international interdependence among sovereign nations throughtrade and direct investment will promote economic development
and deter confrontation. While we envision our successful
business model in North America expanding to other continents,
we will determine our actions based on a firm assessment of
the short-, medium-, and long-term risks involved in expanding

Message from the CEO

to the value of the bullion.
In 2015, we launched our precious metals refining business inNorth America. The scale of our refining business is the largest
in the world, exceeding 2,000 tons of gold and silver combined
per year. We acquired a gold and silver refining business with
operations in Utah (U.S.) and Ontario (Canada) from Johnson
Matthey of the UK. We also acquired the assets of Republic
Metal Corp. in Florida, (U.S.) in 2019, gaining control of minting
assets for processing precious metal products such as goldand silver coins. In addition, we will complete construction of alarge-scale warehouse in New York State in the U.S. by the end of2022, which will streamline the distribution of our products. We
are in the process of completing a system in which we use theraw materials received from mining companies and the jewelry
industry around the world to manufacture high-purity, LBMAcertified gold and silver bullion, just as we do with precious metal
recycling, process them into gold and silver products of various
forms, and enable optimal distribution and sales around theglobe.

into and doing business with new regions.
Second, with regard to the issue of carbon neutrality, waste
generators are gradually becoming more cautious about
incinerating used plastics. While incinerating biomass does notincrease CO2 emissions, incinerating waste plastics and waste
oil increases CO2 emissions, and concerns about this have been
growing. Moreover, consumption fluctuations due to COVID-19,
trade frictions among major powers, and sanctions related tothe invasion have caused coal and other fuel prices to skyrocket.
This has caused the materials industry and others to seek tosecure waste plastics as fuel and raw materials, which has
led to a major intake of waste plastics. We need to adjust ourbusinesses in line with these new trends. We are confident that
this is a transition phase in which we can leverage our bird'seye view of industrial waste management as a source of profit.

Resource Recycling That Mitigates the Risks
of Dependence on Fossil Fuels
We believe that there will be increased opportunities within the
resource recycling business if we face the risk of fossil fueldependence head-on, especially in the context of heightened
geopolitical risks. One of the real-life consequences of
Russia's invasion of Ukraine was a sharp rise in the price of
natural resources, including the precious metals we handle.
In particular, the price of palladium, of which Russia is thelargest primary producer, leaped by approximately 1.5 times ina few months from the beginning of 2022. While the situation is
critical for industries including medical care that use palladium,
our ability to recycle rare metal resources has played amajor role by serving as a buffer. The amount of palladium
we recycle annually is equivalent to about 10% the amount of
palladium Russia exports to the rest of the world in a single
year. Depending only on resources from primary mines would
surely have sent prices soaring even higher, causing panic in
the auto industry and other related industries around the globe.
We can also learn from history that sanctions can trigger major
military conflicts. Having completely local recycling operations
alleviates the issue of dependence on imported resources.
Behind our company’s purpose of being “Totally Committed toProtecting the Natural Environment and Preserving Resources”
is the preservation of world peace.

Turning Risks into Opportunities
Due to the global spread of COVID-19, material procurement
risks have become apparent in a number of industries. Ouroperations in Japan and Asia are relatively regionally selfcontained, and while we faced severe difficulties in some
sectors due to customers' production activities stalling, there
were no major obstacles in terms of our own operations.
However, our North American business uses Europeanmade equipment for some of their production facilities, andwhen that equipment broke down, it took a great deal of time
to import repair parts and perform on-site repairs, whichcaused extended production downtime. Moreover, the residue
generated during the refining process at the plant contained
a small amount of precious metals, so recovery of precious
metals from this residue had to be outsourced to a smelter. We
used a major smelter in Italy, but lead times were significantly
extended due to the slowdown in sea transport and the lack of
local workers.
With regard to the production equipment made in Europe, we
continue to use it, but we have concluded a new maintenancecontract with a local electrical equipment company at our plantand established a system that allows us to deal with productbreakdowns almost completely locally. This allows us to recoverfrom breakdowns more quickly than before the COVID-19
pandemic. In terms of outsourcing to smelters, we have decided
to bring the smelting function in-house within our Salt Lake City
plant to reduce our dependence on outsourcing. It was for thisreason that I myself decided on making a phased investment whileat the Salt Lake City in April. The smelting function is a rarity in
the North American region, and we made an immediate decision
to transform a risk into an opportunity, with the aim of developing
the combined smelting and refining business into a new service
for external customers. We will create a management structurethat retains the advantage of freely utilizing resources dispersed
around the globe while preparing contingencies in case this rapidly
turns into a risk in terms of business continuity.

ASAHI HOLDINGS

09

Our Precious Metals Business has long been focused on thedomestic market. We started expanding our business outsideof Japan in the 1990s. As mentioned previously, we entered theNorth American region in FY2015 upon acquiring a gold and silver
refining business from a British company. It has been said that
there are few examples of Japanese companies succeeding inacquisitions of businesses overseas. While we did indeed suffer
operating losses in the immediate aftermath of the acquisition,
we were able to successfully develop the business after it became
profitable in FY2017. There are still many markets across the globe
where we can profit by using the methods we used to succeed
in our North American business. Making our Precious Metals
Business multinational in scale will not only grow the businessitself, but also stabilize our business operations overall. As theindustrial and investment demand for rare precious metals grows,
the role of our Precious Metals Business will become ever more
important, and the opportunities ever more abundant.
The domestic industrial waste market is a huge market for
our Environmental Preservation Business. It is larger thanthe domestic shipping industry and three times the size of theparcel delivery industry. We have expanded our processing
capacity in this market through capital investments and M&A.
While we already occupy a leading position in the industry, no
company possesses a dominant market share yet, including
us. This is partly owing to the fact that there are complex laws,
regulations, and administrative guidance related to the market,
and establishing industrial waste facilities and conducting
treatment activities both require obtaining licenses, which makes
it difficult for outsiders to enter the market. Meanwhile, it also
takes considerable time for existing operators in the industry to
expand their businesses. However, going forward, businesses will
be tested on their ability to respond to current trends, such ascarbon neutrality and the digitization of transactions in general.
Such ability will decide the competitiveness among businesses,
and by maintaining a competitive edge, it will become easier thanever to accelerate growth.

Looking Back at the Year Ended
March 31, 2022
Record-High Operating Income for the Fifth
Consecutive Fiscal YearIn the fiscal year ended March 31, 2022, sales revenue continued
to increase compared to the fiscal year ended March 31, 2021,
with year-on-year revenue up 17% to 192.4 billion yen. Operating
profits reached 26.4 billion yen, up 5% from the previous year,
marking the fifth consecutive year of record profits. We increased
our annual shareholder dividend by 5 yen from the previous fiscal
year to 90 yen per share.
Ever since COVID-19 took hold of the world at the start of 2020,
business activities in various industries have been restricted,
and we have faced a number of restrictions ourselves, but wehave maintained our determination to "never stop business
operations" from the start. Our nonstop resource recycling andenvironmental preservation activities have enabled us to continue
to fulfill our role and responsibility as one of society's "veins." We
believe that the improvement in our financial performance andcorporate value both last year and two years ago is a result of theaforementioned efforts being met with approval.

10

INTEGRATED REPORT 2022

Industries such as electronics, telecommunications,semiconductors, chemicals, and pharmaceuticals operated at full
capacity. Given the situation, if our precision cleaning and surface
treatment-related collection activities and our factory effluent
treatment activities were to cease, it would be extremely difficultfor producers to continue production. Moreover, above all, it was
medical institutions that were required to operate nonstop. If ourcollection, transport, and detoxification of their infectious waste
had stopped, all of society would have been thrown into panic. It
once again became clear that there is an intimate interdependency
between our core businesses and industrial activities and civic life.
We are proud that our tireless efforts to be "Totally Committed toProtecting the Natural Environment and Preserving Resources"
support society's daily activities far and wide.

Japan with both COP and COC certifications from the RJC. Since"supplying precious metals in ways that are friendly to people,
society, and the environment" is our most important businessmateriality, the fact that we have received reputable third-party
certification for transparent raw material sourcing and traceability
shows progress. We will further enhance the value of the Asahi
Brand by providing precious metal products that guarantee thatconsideration is given to human rights and the environment.

Bando Plant Operations- Our Pride in Being a Responsible Refiner

For the fiscal year ending March 31, 2023, as of July 31, 2022, thecompany has announced a predicted 4% year-on-year increase
in revenue to 200 billion yen and a 9% decrease in operating
income to 24 billion yen. The decrease in profits is due to the fact
that, in accordance with the International Financial ReportingStandards (IFRS) adopted by the company, we expect to incur aone-time expense of approximately 2 billion yen in losses on theretirement of existing facilities associated with the completionof the new facilities and other projects. For example, we are
currently working with the local community to rebuild ourexisting Yokohama Plant and establish a new industrial waste
incineration facility to create a large-scale waste treatment
center in eastern Japan. As such, abandonment losses must berecorded for existing facilities that are to be decommissioned.
We also expect an abandonment loss to be incurred at the North
American sites as a result of new capital investments. Due toa confluence of factors such as abandonment losses and anincrease in depreciation, we predict a decrease in profit for the
fiscal year ending March 31, 2023. However, both of these factors
closely tied to the goal to "reinforce the foundation for growth"
set forth in our Medium-Term Business Plan. We hope that
our shareholders understand that we are not just sitting down,
exhausted, but rather squatting down in preparation to make a
giant leap forward.
In terms of shareholder dividends, we will maintain our policyof keeping a dividend payout ratio of around 40% while enhancing
internal reserves to invest in capital investments and M&A activities
for future growth. Unless there is a fundamental decline in our
profitability, there will be no change to our policy of maintaining
stable dividends without decreasing the current annual dividend
amount. Given this approach, the planned annual dividend forecast
for the fiscal year ending March 31, 2023 is 90 yen per share, thesame level as for the fiscal year ended March 31, 2022.

In the fiscal year ended March 31, 2022, we invested a total of 8.3
billion yen. One such investment was in the Bando Plant, which
will become one of the largest state-of-the-art recycling plants
in Asia. The plant began full-scale operations in April 2022. The
plant handles the recycling of precious metals from the dentistry
and jewelry sectors. Until now, the pretreatment, assay, andrefining processes were performed at the Saitama Plant, while
the final processes, which include molding, engraving, andshipping, were performed at the Technical Research Centerin Kobe. The new Bando Plant will consolidate all of theseprocesses and serve as an integrated solution for the complete
recycling process. Since there is no longer transportation
between plants like before, logistics costs and CO2 emissions
have been reduced. In addition, by forcibly dissolving NOX
generated during the acid treatment process when recovering
precious metals in water and circulating the solution as nitricacid, we have reduced the consumption rate of chemicals by
about 40% while curbing greenhouse gases. Furthermore, wehave reduced factory personnel requirements by approximately
25%, primarily by promoting automation and saving on laborthrough full utilization of IoT. Taken together, these efforts
have reduced the average lead time for precious metals fromreceipt of raw materials to product shipment by approximately
10%. Being able to improve the cost efficiency and speed of ouroperations in the face of rising prices and interest rates was avery timely development.
In July 2021, Asahi Pretec, which oversees the precious metal
recycling business, became the first refiner in Japan to obtain
Chain of Custody (COC) certification from the Responsible Jewelry
Council (RJC). Asahi Pretec already obtained Code of Practices(COP) from the RJC in July 2019, making it the only refiner in

Message from the CEO

Opportunities Expand for Two Major Businesses

Forecast for the Year Ending
March 31, 2023
Squatting Down in Preparation for the Leap
ForwardStrategic Investment Decisions
Under the 9th Medium-Term Business Plan, we have decided toinvest 22.7 billion yen over the three-year period through March
2024. The amount of investment in major investment projects,
including the Bando Plant and Yokohama Office, is almost
identical to the original plan. However, the investment amountrelated to our burgeoning North American business is expected
to be higher than originally planned. The large-scale renovationsof the silver refining process at the Salt Lake City plant, which
includes automation and was originally scheduled to begin
during the current fiscal year, will be conducted as planned. In

addition to this, instead of leasing as originally planned, we havedecided to take a long-term perspective and purchase the landand buildings for our New York warehouse business. In addition,
as was mentioned previously, we will begin efforts to internalize
the smelting function at our Salt Lake City plant. Further, since
the downstream portion of our North American business-namely,
the value-added business of processing and selling a variety ofcoin and bar products created by using our refined gold and silverbullion as raw materials-has been buoyed by favorable market
conditions and expanded more than we planned for, we havedecided to more than double our current capacity for processingthese products. These agile initiatives will result in increased
investments in our North American business.
We have also decided to temporarily suspend our originalplan for a fifth new incinerator in Kitakyushu, Japan, based on
the determination that we need to assess how the Japanese
government and waste generators will act with regard to thetrend toward carbon neutrality in Japan. We will carefully monitor
market trends and future developments. There are a few othersmall changes to the capital investment details, but there are
no changes to the plan of investing 22.7 billion yen total over thethree-year period.

Pursuing Social Sustainability
and Business Expansion
Simultaneously
Growing Our Business and Solving Social Issues
are One and the SameIn our precious metals recycling business, wet processing,

ASAHI HOLDINGS

11

Climate Change Initiatives

which we perform via acid dissolution and other techniques,
can significantly reduce CO2 emissions when producing anequal amount of gold compared to dry processing, whichmining companies and others perform via high-temperature
heating. The dry process can be scaled, and one could saythat the wet and dry processes are compartmentalized, but
in-house technological developments have enabled us toexpand the range of targets for recovery via the wet process.
At our company, “in-house production” refers to the assay andrecovery of raw materials via wet refining that were previously
subject exclusively to dry refining. We have a history of
expanding our value-added domains through this process, andwe will continue to do so going forward. From this perspective,
our growth strategy overlaps with our carbon neutrality
strategy.
At the Bando Plant, we have been able to reduce the amountof chemicals used, eliminate transportation between plants, andshorten the recycling lead time, all of which make us more costcompetitive and fuel our competitive advantage in the market.
At the same time, it is important to emphasize that all of these
initiatives reduce greenhouse gas emissions, including CO2.
Thus, our strategy for remaining competitive overlaps with ourcarbon neutrality strategy.
Like our precious metals recycling business, the role of ourEnvironmental Preservation Business can be compared to theveins circulating blood throughout the human body. The role ofveins is to purify the blood delivered to every part of the bodythrough the arteries before routing it back into circulation. The
Environmental Preservation Business requires cooperatingwith waste generators and other businesses that act asarteries so that we can harmonize with the direction in whichsociety desires to head. As director of the Japan Federation ofIndustrial Waste Management and Recycling Associations andchairperson of the Intermediate Processing Subcommittee, I
am working to update the industry's role as we progress toward
a carbon neutral future through direct discussions with the
Ministry of the Environment, the Ministry of Economy, Tradeand Industry, and other relevant government agencies. In
this context, cooperation between arteries and veins is a vital
topic. Regarding our Environmental Preservation Business,
we will do everything we can to pave the way for material andchemical recycling that incorporates arterial industries throughthe management of industrial waste disposal. For difficult-torecycle waste, we will encourage low-carbon, cost-effective,

12

INTEGRATED REPORT 2022

In December 2021, we announced our "2050 Carbon Neutrality
Declaration" and declared our goal of achieving carbon
neutrality for Scope 1 and Scope 2 emissions by FY2050. We
made reducing CO2 emissions one of our business materialities.
First, by FY2030, we will reduce energy-derived CO2 emissions
such as electricity and gasoline by 50% from their FY2015
levels. To achieve this goal, we have been reducing fuel usage
in a variety of our activities, switched to CO2-free electricity, as
well as reducing fuel consumption and converting our newly
constructed sites into Net Zero Energy Buildings (ZEBs). In
addition, as a follow-up to switching our company vehicles overto hydrogen vehicles, we plan to switch as many of our businessvehicles as possible to electric vehicles (EVs).
We are also working to link our business structure itself
more closely to global warming countermeasures. For example,
it was previously mentioned that NOX generated during the acidtreatment process at the Bando Plant is forcibly dissolved inwater and recycled as nitric acid. We are also striving to recover
the heat generated during waste incineration and convert it
into electricity. However, we encountered an issue with surplus
electricity having to be discarded. To address this, in one of
our corporate ventures, we launched an experiment to producehydrogen, which has excellent preservation and portability,
through water electrolysis using this surplus electricity.
In addition to hydrogen, the electrolysis process produceschemical by-products that are sold to make the process more
profitable. Producing hydrogen using surplus electricity will
help reduce CO2 emissions throughout the supply chain, and it
has been chosen as a demonstration experiment subsidized by
the Ministry of the Environment in anticipation of the arrival of ahydrogen-based society at some point in the future. If industrial
demand for hydrogen and other sectors further increases andsociety as a whole develops a hydrogen-based infrastructure,
this business will experience remarkable growth.
We have also endorsed the recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD) andhave established a cross-departmental TCFD response team to
conduct scenario analysis and other activities. In light of this, wehave identified the risks and opportunities, and in April 2022, wemade disclosures based on the TCFD recommendations.

Human Resource Policies
The ratio of new graduates to mid-career hires is approximately
25% new graduates and 75% mid-career hires. Because of thehigh percentage of mid-career hires, we have people from awide variety of backgrounds. Even when we had new groupsof people mixing with our own employees through M&A, we
experienced no severe clash of corporate cultures. I suspectthat the cost of post-acquisition integration is also extremely
low thanks to our diverse workforce.
That being said, if we look at our company's workforce

composition in terms of gender, the fact that the percentage
of male employees is high cannot be denied. This is because
sales and factory workers sometimes handle special chemicals
and heavy materials, and thus these tasks have been assigned
primarily to male workers from the viewpoint of maternity
protection and so on. In clerical and technical workplaces,
where there exist no such concerns, ability- and performancebased personnel management is firmly ingrained, and there
is no gender disparity in terms of compensation and speed ofpromotion. We are now in the process of expanding the numberof workplaces where female employees are assigned while
carefully implementing measures within the work environment.
In fact, of the new graduates hired in April 2022, 60% are
women, and we have placed 2 of these female employees in onsite sales positions for the first time in over 20 years. Throughmy own involvement in the North American business, I havedirectly witnessed the positive effects that diversity in terms ofgender, race, and other aspects has on organizational vitality.
We will enthusiastically promote diversity and inclusion globallyand consistently.
For our core positions, we will continue to make efforts
to enhance our human resource development infrastructure
through both internal training and mid-career hiring. We
will also strive to further enhance educational opportunities
through the use of internal and external resources. Further,to develop the company in a sustainable manner in the faceof an era of rapid change, we would like to cultivate not only
knowledge and skills, but also a sense of ownership in thecorporate management, from the top of the pyramid as far down
as possible, so that we include as many people as possible. If
each individual is able to hone their sense of responsibility andjudgment within our ever-expanding businesses, I believe wecan at least maintain the speedy management we have had up
to this point.
In terms of compensation, we have established an incentive
plan called the "Stock Grant ESOP Trust" for assistantmagagers and above, which accounts for about two-thirds of all
employees. The Compensation Committee is also planning todiscuss an increase in the ratio of stock-based compensation
within executive compensation beyond the current level so as toenhance medium- and long-term incentives.

sectors related to our management and executives from othercompanies to serve as independent outside directors. At present,
independent outside directors comprise the majority of theBoard of Directors. Moreover, we have established a voluntary
Nomination Committee and Compensation Committee to ensurethat independent outside directors are appropriately involvedin the consideration of important management matters, suchas director nominations and compensation. Each committee
is chaired by an independent outside director and is primarily
composed of independent outside directors.
To make the most of this structure, it is essential to createa working mechanism. In April 2020, the Audit Department,
which is responsible for operational audits, was given greater
authority and placed under the direct control of the Audit andSupervisory Committee. In addition, we established the Group
Risk Management Department in April 2021 to ensure crossorganizational risk management. This department monitors
compliance across the entire Group, and is focusing particulareffort on managing the credit risks of our North Americanbusiness counterparts, which are expanding at a rapid pace.

Message from the CEO

and proper disposal, and we will gradually implement energy
recovery methods such as waste power generation, which ishighly regarded as a way to conserve fossil fuel resources. As
we orient toward this business position, we are now working
on the key issues of where and how to focus our management
resources going forward and how to maximize our strengths.

Corporate Governance
As has been stated many times, our value lies in the fact that ourbusiness contributes to the sustainability of society by recyclingrare resources and helps preserve the global environment,
and our strength lies in the fact that our business growth goes
hand-in-hand with solving social issues. To form effective
governance in line with these business principles, we haveendeavored to forge sound corporate governance. While thecompany's management history has emphasized the importanceof leadership characterized by agile decision-making, and while
we continue to recognize its importance and maintain a cultureof bold risk-taking even now, the current Board of Directors
seeks clarification of the rationale with respect to decisions thatare vital to management. It can be said that we have a wellestablished practice of carefully confirming the discretion ofmanagement and the potential risks involved in such decisions.
In 2015, with the introduction of the Company Audit Committee
System, we transformed into a company with an Audit andSupervisory Committee. We have also asked experts in various

To Our Stakeholders
We will continue to take a long-term approach towardenhancing our corporate value in a sustainable manner
while strengthening our trust-based relationship with allof our stakeholders. To this end, as we continue to improve
the performance of our operations in Japan, Asia, and North
America, we will make every effort to further strengthen
corporate governance, enhance information disclosures tobolster management transparency, help address issues facing
society such as global warming, coexist with local communities
as a corporate citizen, and generate rewarding employment
opportunities for a diverse range of people. We appreciate yourunderstanding of the purpose behind these efforts and ask foryour continued guidance and support.

ASAHI HOLDINGS

13

Value Creation Drivers and Business Models

Our Purpose

We are engaged in both the Precious Metals and Environmental Preservation
Businesses based on our purpose of being "Totally Committed to Protecting
the Natural Environment and Preserving Resources."
We aim to maximize the growth of both these business areas by practicing
efficient management and leveraging synergies.

[By business segment]
Environmental
Preservation
Business

9.6 %(18,566 million yen)

Revenue

192,442

Precious Metals
Businessmillion yen

90.4 %(A year-on-yearincrease of 16.8%)(173,875 million yen)

At a Glance

Totally Committed to Protecting
the Natural Environment andPreserving Resources

Through our precious metals recycling business, we offer high-quality products by utilizing salespeople with strong
IT expertise for customer-focused sales and high-precision analysis and recovery technologies.
Our North American refining business uses the refining business as a platform to provide financial services andmanufacture value-added products.
With our Environmental Preservation Business, we provide a one-stop solution through our nationwide network,
licenses, and salespeople with thorough expertise in waste materials.

s
l
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At a Glance

Salespeople

Precious Metals Business
Refining on a World-Class Scale

Precious Metals Recycling

North American Refining

Our business began with recycling silver from photographic
fixer. Today, we recycle scrap produced by various sectors
such as the electronics industry and dentistry into high-purity
precious metals. For more than half a century, we have been
providing precious metals produced through recycling, while
continually adapting to the changing times.

In North America, our refining operations raise the purity of raw
gold and silver received mainly from mining companies. We arealso using the refining business as a platform to diversify ourrevenue sources.

Revenue

113,755

144,795

173,875

Operating Profit

24,037(million yen)

26,596

s
r
e
v
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r
D
n
o
i
t
a
e
r
C
e
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l
a
V

Our First BusinessHighly efficientprecious metals
recovery technology
By advancing andcombining both wet anddry refining technologies,
Asahi Holdings has
established effective
precious metals refining
methods that canbe applied to all raw
materials

15,914
2019

2020

2021

2019

2020

2021

[FY]

Our specialized, trained salespeople
make effective use of IT to conductcustomer-oriented sales by proposing
optimal solutions for customer needs

Licenses and collection,transport,
and processing facilities(network)
Utilizing the Group's network, our large
team of salespeople can provide a wide
range of solutions to meet customer
needs, from waste collection to transportand disposal. Our licenses cover all ofJapan, and we handle a wide variety of
waste types

Hazardous substanceprocessing,waste treatment,
and recycling
technology
We hold licenses forcollection, transportation, andintermediate treatment of
most types of industrial waste
and specially controlledindustrial waste, and oursystem enables proper andprompt disposal and recycling

Environmental Preservation Business

Precious Metals
Business

Helping to Create a Sustainable Global Environment

Proper Waste Disposal

Revenue

Operating Profit

20,716 19,981 18,566

4,355

2019

2019

2020

2021

(million yen)

3,833

3,738

2020

2021

[FY]

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This business began with the detoxifying of harmful substances contained in photographic effluent, and has since expanded to thedetoxification and proper disposal of various waste materials. Through M&A, companies with different areas of expertise have joined the
Asahi Holdings Group, thereby leveraging synergies to provide customers with a one-stop solution for a wide variety of needs.

Competitive
advantage

Environmental
Preservation Business
Competitive
Advantage

High-precision analysis

One-stop solution
for industrial waste

Highest-efficiency
collection and refinement

Small-quantity special
processing, high unit priceMarket hedge

M&A in the environmental
business area

Due to the dissolution of our Life and Health Business in FY 2019, Inter Central, Inc. was shifted to the Environmental Preservation Business category. The revenue and operating
profit figures for FY2019 reflect this change. Inter Central, Inc. was subsequently sold at the end of FY2020, but there was no reclassification of revenue and operating profit.

14

INTEGRATED REPORT 2022

ASAHI HOLDINGS

15

Overview of Asahi Holdings Value Creation Process
Over the years, we have managed to achieve both business growth and solutions to social issues in our mission
to be a leader in creating a circular economy that connects society to the environment. We strive to maximize thevalue created by our business activities and aim to position ourselves as a global company that pursues originality
and growth.

Total
capital

105.1
22.7

billionyen

Medium-Term
Investment
Plan

Salespeople
Highlyefficientprecious
metalsrecoverytechnology

P.15

Precious
MetalsBusinessbillion yen

Domestic Overseas

3810

High-precision
analysis

Employees

1,457
peopleIntellectual capital
Assay technology
Refining technology
Recyclingtechnology

Raw materials
Scraps containing
precious metals
Doré

Industrial waste

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130 people(OUTCOME)

Precious metal bullion● Creating aEnvironmental
Preservation
Business

Highest-efficiency
collection andrefinement

Small-quantity
special processing,high unit priceMarket hedge

M&A in theenvironmental
business area

In our precious metals
recycling business, we offer
high-quality products by
utilizing salespeople withstrong IT expertise forcustomer-focused sales andhigh-precision analysis andrecovery technologies.
Our North American refining
business uses the refining
business as a platform toprovide financial services
and manufacture valueadded products.

Shareholders andinvestors

One-stop solution
for industrial waste

In our Environmental
Preservation Business,
we provide a one-stop
solution through our
nationwide network,
licenses, and sales
personnel with thoroughexpertise in wastematerials.

8 Factors Supporting Value Creation P. 3
Our Purpose

The Asahi Way
Totally Committed toProtecting the Natural
Environment and Preserving
Resources

value over the
medium to long term●C
 ontinuous andstable shareholder
returns● Supply precious

Minted items
Bullion of various
precious metals
Proper industrial
waste disposal

Business
partners

metals in waysthat are friendly topeople, society, andthe environment● P roviding one-stop
solutions for waste
disposal● I mproving

Detoxification
Recycling products
Fermentation and composting,fuels and raw materials
for cement,
fire-proof bricks and paving
materials

Employees

workplace support
and job satisfaction● U tilization of diverse
human resources● C ontribution

Power generation

Local
communities

CO 2
Reduction effect fromprecious metals recycling

Natural capital

recycling-oriented
society● Effective use oflimited global
resources● I mprove corporate

Green
gold

Competitive
advantage

Competitive
advantage

Human capital

Technical specialists(OUTPUT)

Naturalenvironment

Production capital
Sites

Licenses andcollection,transport,
and processing
facilities(network)

Hazardous
substance
processing,waste treatment,
and recycling
technology

CreatedValue

438,181 t-CO 2>Emissions by the Asahi
Holdings Group

102,957 t-CO 2

Recycling of
precious
metalsproducts

throughparticipationin community
activities

Detoxification
andpropertreatmentof wastehtwoFinancial capital

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(INPUT)

Business
Activities

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CapitalInvestment

Basic Policies

To be a leader
in creating a circular
economy thatconnects society to theenvironment
Precious Metals
Business
Social value
Economic value

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Our Vision

P. 24

Effective use of resources
Stable, high profits
Contributing to the SDGs

Environmental
Preservation BusinessSocial value
Economic value

P. 30

Contributing to solving global
environmental problems

Sales leader in Japan
Contributing to the SDGs

1. R einforce theFoundation for
Global Growth
2. P romote New
Human Resource
Policies
3. S trengthenGroup Risk
Management
4. C ontribute to the
SDGs(A s of March 31, 2022)

16

INTEGRATED REPORT 2022

ASAHI HOLDINGS

17

Consolidated Financial/Non-Financial Highlights
Number of employees, percentage of womenin the workforce, and percentage of employees outside Japan

Operating profit / ROE(million yen)

192,442

Operatingprofit (million yen)

ROE (%)

25,126

Number of
employees

26,446

2,042

164,776
135,563

18,010110,41230.8

13,442
13.6

2018

2019

2021

2020

(FY)

2018

Income for the year attributable toowners of the parent

11.6

2021

2020

(FY)

93.0

114.07

2021

2020

(FY)

Total capital(million yen)

229,95842.3
160,272

2018

2020

2021

(FY)

2018

2019

9.0

9.0

2020

2021

(FY)

98.3

99.9

99.9

1,244.06

1,336.89

2019

Scope 1

Scope 2108.0
861.58

35.2

11.1

12.5

12.5

2018

2019

2020

7

2021

(FY)

Usage rate of Holidays for Refreshment* 2
(%)

2020

2021

(FY)

2018

98.2

99.7

99.6

2019

2020

2021

879.00

Scope 3

102.7

(FY)

Energy-derived CO 2 emissions

CO 2 emissions(yen)244,803

97,90367,804

2019298,387

30.1

1,457

125.12Equity ratio (%)

40.0

8

81.1

Equity attributable to owners of
the parent company per share

Total assets / Total capital /Equity ratio
Total assets(million yen)

2018

9
8

238.11

9,846

2019

2018

9.9

(yen)

326.9018,735

2018

1,510

23.1

Achievement rate for rest intervals ofat least 11 hours* 1

25,725

9,000

1,574

24.7

Percentage of female directors（％）

Number of directors

28.6

Basic earnings per share(million yen)

23.4

Percentage of employees
outside Japan

18.5

14.4

2019

21.2

Percentage of womenin the workforce

Number of directors andpercentage of female directors
d
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Revenue(1,000 tons CO2)

137.2
103.0

(1,000 tons CO2)

39.4

39.4

37.3

32.0

13.4

87.5

105,137

89.6

69,174

2019

2020

2021

(FY)

2018

2019

2020

2021

(FY)

2018

2019

2020

2021

(FY)

2018

2019

2020

2021

(FY)

*Calculations for Scope 3 emissions started in FY2021*O n April 1, 2021, a stock split was conducted with a ratio of two common shares for one. The basic earnings per share and equity attributable to owners of parent
per share have been calculated based on the assumption that the stock split was conducted at the beginning of FY2018.

*1 Scope: Group companies in Japan. We introduced a rest interval system in the second half of FY2018. Therefore, the figures for fiscal 2018 are based only on
Asahi Holdings, Inc. and Asahi Pretec Corp. in the second half.
*2 Scope: Group companies in Japan. In 2019, we introduced a Holidays for Refreshment system for group companies in Japan. Therefore, the FY2018 figures are
based only on Asahi Holdings, Inc. and Asahi Pretec Corp.

18

INTEGRATED REPORT 2022

ASAHI HOLDINGS

19

The Group's long-term vision is to be a leader in creating acircular economy that connects society to the environment.
The goals of the 9th Medium-Term Business Plan (April 2021 toMarch 2024) were devised using the process of "backcasting,"
or deciding what must be done in the present assumingthat the Group's vision is achieved in the future.
This strategy represents the first step towardrealizing our vision.

Overview of the 9th Medium-Term Business Plan

1

● Establish a sales
system that makes
efficient use of IT, andimprove market share

To be a leader in creatinga circular economy thatconnects society
to the environment● Establish a new
business model andgrow profits in the
North American
refining business

Performance Targetsof the 9th Medium-TermBusiness Plan
[Unit: billion yen]

(April 2021 to March 2024)

INTEGRATED REPORT 2022

FY2021Plan

FY2022Plan

FY2023
Plan

Revenue

190

200

210

OperatingprofitReturn on
equity [ROE]

26.0

24.0

27.5

18%

15%

16%

35%

38%

40%

Equity ratio● Leverage wide-areaand diverse networks● Give talented employees the opportunity to be promoted
to higher positions and work to revitalize the entire
organization● Pursue greening
along withdigitalization anddecarbonization

Promote diversity and inclusion● Create new value that promotes the growth of thecompany by developing workplaces that embrace diversity● Improve profitability
in terms of bothindustrial waste
treatment andmanagement● Support career advancement of women in the workforce
by increasing assistance for work-life balance

Increase hiring of seniors● Establish pay-for-performance in areas where theknowledge and experience of veteran employees can beutilized

Establish a framework to maintain a corporate brandtrusted as a global company, and create a global risk
management mechanism

Establish a Group risk management
department
Perform group-wide
management of compliancerisks along with detailed
risk management from aperspective independent ofbusiness segments

Provide opportunities for learning andchallenge-taking● Improve human resources development to foster people
who can take on global challenges and make great
strides

Strive to achievesustainable growth andglobalization

Strengthen Group Risk
Management

Establish a system
for further global
growth, including
contributing to the
SDGs

Strengthen risk management for the
North American business
Strengthen
credit risk
management
relating tobusiness
partners

Ensure all employees are compensatedbased on performance and abilities● Introduce clear, easy-to-understand qualification
requirements and determine evaluation andcompensation based on performance and abilities

Continue scrap and build strategy

3

Promote New Human
Resource Policies● Create opportunities for high-performing employees toplay an active role even after retirement age

Improve efficiency inJapan and promote
global expansion
strategy

The 9thMedium-TermBusiness Plan

Environmental
Preservation
Business2● Globally expand
through M&A

Backcasting

20

Precious Metals
Business● Boost costcompetitiveness byutilizing cuttingedge technology andexpertiseLong-Term Vision

Building a global company
that pursues originality
and growth

Reinforce the Foundation
for Global Growth

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Long-Term Vision and Medium-Term Business Plan

4

● Establish an internal venture capital system toallow employees to take on the challenge of productcommercialization and develop human resources who
can become future management leaders

Contribute to the SDGs
Effectively
utilizeresources

Enhanceprograms suchas those forencouraging
work-life balance● Expand the amounts ofprecious metals recycled
and industrial waste
properly treated, which
are our main businesses● Achieve FY2030 targets forthe percentage of managerial
positions held by women andthe percentage of employees
who have disabilities● Pursue climate change
action such as reviewing
power contracts for our
existing facilities andactively switching tohydrogen and electricvehicles● Enforce rest intervals andthe taking of Holidays for
Refreshment by all employees● Expand support for employeeswith family nursing care
responsibilities

Enhance the image of the Asahi
brand by further promoting
Responsible Precious Metals
Management, and by providing
precious metal products that
help protect human rights andthe environment

ASAHI HOLDINGS

21

Sustainability Strategy

Basic Policies

Financial Policies

The Group is expanding its business through aggressive investments towards growth as it
maintains a solid financial base. To secure the stable funds necessary for business expansion,
we strive to improve the corporate value of the entire Group by generating cash flow throughsustainable profit growth, improving capital efficiency, and strengthening financial governance.

Funding Needs and Financing

Diversifying funding sources to enhance costcompetitiveness

The Group's working capital needs are primarily for thepurchase of raw materials for manufacturing products in the
precious metal recycling business, and the purchase of precious
metal bullion for "advance trading" in the North American
refining business. Investment capital needs consist primarily of
capital investments for new businesses, expansion of capacity,and improving productivity at main plants in Japan and North
America. The company's policy is to proactively respond to
strategic funding needs for future growth while maintaining
both a stable financial base and improving capital efficiency.
Working capital and investment capital are primarily provided
by funds obtained from operating activities, and funds are raised
through loans from financial institutions and corporate bonds
as required.

In March 2021, we raised a total of US$201 million, primarily
for the expansion of our North American business, by executing
the first scheme in Japan whereby a U.S. subsidiary issued
U.S. dollar-denominated convertible bonds with the parent
company guarantee. In addition, we attained co-financing with
JBIC and private financial institutions for a total of US$117
million. Through diversification of financing, borrowing costs arebeing reduced, which has enhanced the competitiveness andprofitability of the refining business.
In Japan, we issued the first green bond ever in the domestic
non-ferrous metals industry in March 2020, raising 5 billion yen.
The eligibility of these green bonds has undergone third-party
evaluation by Rating and Investment Information, Inc., which
resulted in the highest R&I Green Bond Assessment rating of"GA1" being conferred.

Transactions that have a significant impact on our
financial indicators, but contain no credit risks orsoundness issues

Ever since acquiring its current North American business fromJohnson Matthey of the UK in 2015, the Group has expanded
its North American precious metals refining operations. In
recent years, the refining business has been used as a platform
for creating new products and services. One such service is"advance trading" transactions. In these types of transactions,once we receive raw materials from a customer, we return therefined bullion with interest at the customer's request without
waiting for the contractual delivery date. Because we procure
the bullion and make the advance trade using low-interest
loans from a financial institution, we benefit financially. This
results in a large amount of trade receivables and borrowings
being recorded on our financial statements, but because wereturn bullion after receiving raw materials in principle, there isno credit risk and virtually zero risk of bad debt. In addition, thefinancial statements will show a higher debt-to-equity ratio anda lower equity ratio. The equity ratio as of March 31, 2022 was
35.2%, but if we exclude our North American refining business,the equity ratio is 60.8%, indicating that the company is doing agood job maintaining its financial soundness.
Equity ratio

End of March 2022

35.2%

60.8%
INTEGRATED REPORT 2022

Borrowings
by means of“advance trading”

9th Medium-Term Business Plan:
Goals and Progress
Steadily continue strengthening financial base toachieve financial targets
In the 9th Medium-Term Business Plan that went into effectin April 2021, we aim to achieve an equity ratio of 40% and an
ROE of 16%. Through profit growth, we hope to expand ourequity capital and raise funds through direct financing such as
corporate bonds and commercial paper while keeping an eye onmarket trends.
Regarding our various investments toward growth, our policy
is to make investments without exceeding our operating cash
flow. Surplus funds will be used to repay loans. 22.7 billion yen
in total capital investment is planned for the three-year periodof the 9th Medium-Term Business Plan.

Investment Policies
Actively expanding investments that contribute tosolving environmental issues
The Group makes decisions on individual investment projects
by meticulously considering the potential for profit and growthin the business as well as synergies with existing businesses.
In addition to this, we are actively engaged in R&D from a
medium- to long-term perspective, energy conservation andenergy creation, promoting DX, introducing EVs, and making
other capital investments to solve environmental problems.

One of the basic policies of our 9th Medium-Term Business Plan is"contributing to the SDGs." Our Group is working to expand precious
metals recycling and proper disposal of industrial waste, as well as toenhance our work-life balance and diversity infrastructure.
In December 2021, we declared that we would achieve "carbon
neutrality by 2050" and endorsed the recommendations of the
Task Force on Climate-related Financial Disclosure (TCFD),
and we disclosed information in April 2022 in line with the TCFD
recommendations.
Moreover, to strengthen our sustainability promotion system, we
expanded the existing SDGs Promotion Committee and replaced it with
the Sustainability Committee (April 2022), which is overseen by the
Representative Director and President (CEO) and includes corporate
officers in charge of Business, Technology, and Administration units
as members. Every quarter, the Sustainability Committee discusses
sustainability-related strategies, plans, measures, risk management,
and monitoring. Important matters are also to be reported to theGroup Executive Committee.
In addition to reporting matters discussed by the Sustainability
Committee to the Board of Directors, effective governance is ensured
by having the Board of Directors pass resolutions on matters ofimport.
The risks and opportunities identified in the TCFD actions will bereported to the Board of Directors and the Sustainability Committee atleast once every year.

Materiality Identification Process

STEP 1

Continue to pay stable dividends, with a target payout
ratio of 40%
The Group's policy is to maintain a stable dividend payout
ratio of 40%, with no reduction in the current annual dividendlevel, all while ensuring sufficient internal reserves for capital
investment and M&A activities to support its growth strategy.

Board of Directors
Report/SubmitSTEP 2

Based on the idea that our business activities such as the Precious
Metals and Environmental Preservation Businesses themselves help
to achieve a sustainable society (sustainability), we have identified
the relationships between our businesses and the 17 goals and 169
themes of the SDGs in detail, as well as organizing them in terms ofboth risks and opportunities.

STEP 4

Decide priority SDG-related goals

All directors discussed the key goals and KPIs and determined theissues to be addressed by the Group.

ReportGroup Risk
Management
Department
ReportSecretariat of Sustainability
Committee (Corporate Planning &Communications Department)

Diversity & Inclusion
Working Group

Consolidated
subsidiaries
in Japan

Business
Units

Climate Change
Working Group

Consolidated
subsidiaries
outside Japan

Priority SDG-Related Goals andPriority Issues

Consider priority goals and KPIs

We held discussions with corporate officers of business units on
matters of high importance and formulated priority themes and KPI
proposals for the period through 2030.

Supervise/
DirectSustainability Committee

Begin investigating SDGs

Confirm the relevance of the SDGs to
our businessGroup Executive Committee

Chairperson: CEO Members: corporate officers of Business,
Technical, and Administration Units

We formed a cross-functional SDGs Promotion Team (at the time)and began to look into and gain an understanding of SDGs.

STEP 3
Basic Policy on Shareholder Returns

Solving
SocialIssuesBusiness
GrowthSustainability Promotion System

Resource Development andContribution to the SDGs

Excluding North
American business

22

Financial Results

Respond to funding needs while maintaining
a stable financial base and improving capital efficiency“Advance Trading” in the North American
Refining BusinessApproach to
Sustainability

With "Totally Committed to Protecting the Natural
Environment and Preserving Resources" as our Group's
common shared purpose, we are committed to making
effective use of resources and engaging in a wide range
of environmental preservation activities. Based on
the conviction that our business activities contributeto sustainability itself and that our business growth
will directly help us to address social issues, we haveestablished priority issues, themes, and targets, and areworking hard to achieve them.

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Building a Strong Financial Base to Support
Sustainable Growth

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Financial
Strategy

Priority
Goal 1

Expand Precious Metals
Recycling

Priority
Goal 2

Supply Precious Metals inWays That Are Friendly toPeople, Society, and theEnvironment

Priority
Goal 3

Expand Proper Industrial
Waste Disposal

Priority
Goal 4

Reduce CO 2 Emissions

Priority
Goal 5Enhance Work-Life Balance
and Employee Diversity

Priority
Goal 6

Encourage and Support
SDG-Related Activities

ASAHI HOLDINGS

23