Asahi : Integrated Report 2022

INTEGRATED REPORT 2022

Innovation&

Challenge

ASAHIT h e A s a h i W a y WAY

The Asahi Holdings Group has established the Asahi Way as a set of values for all 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 lead by serving as role models who put it into practice.

	Our Purpose	"Totally Committed to
PURPOSE	Protecting the Natural Environment
		and Preserving Resources"
		Our Credo	Our Employee Principles

We conserve limited natural resources,preserve the global

Innovate and embrace challenges Put safety first

Contents

environment, and contribute to the realization of a sustainable world.

Our Corporate Values

Cooperation with stakeholders

We constantly seek to earn even greater trust from shareholders, customers, business partners, employees, and local communities as we work to preserve the natural environment.

Corporate governance with a balance of protective and proactive measures

We boldly promote growth strategies and business reform while securing transparency in 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 brand

We aim to be widely recognized as an exemplary corporate group 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 to prevent accidents.

Highly motivated employees

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

Strong sense of mission and high ethical standards

Maintain high quality

Promptly report (especially bad news) Build trust and connections

The Asahi Holdings Group Code of Conduct

#1 We comply with all laws and regulations

#2 We respect the dictates of social norms and our own conscience

#3 We treat everyone equally, regardless of age, gender, nationality, race, religion, or other characteristics

#4 We refrain from conducting any political or religious activities in the workplace

#5 We treat customers with sincerity

#6 We practice fair competition and optimal decision-making when selecting business partners

#7 We respect the confidential information obtained through our work and

avoid disclosing it externally

#8 We refrain from providing or receiving meals or gifts in pursuit of personal benefit

#9 We act for the greater good, not for

About Asahi Holdings

STRENGTHS �������������� 02 History of the Asahi Holdings Group…………… 04

Message from the CEO…………………………… 06

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-Term

Business 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

ESG Initiatives

1. 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

S SOCIETY

Human Capital to Support Business and Strategy…………………………………………… 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

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; the logo also indicates continuity and growth. The arrows pointing upward and downward symbolize Asahi Holdings as an advanced, cutting- edge company. The three colors

of blue, red, and green signify "clean water and sky," "the energy of people carrying out activities," and "beautiful nature and forests," respectively.

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

Being a company of good people

We value good employees over the long term.

Our vision of a "good employee" is a person who is not self- centered and who contributes to mutual prosperity and the development of the business.

personal or affiliated parties' gain

#10 We focus on the actual sites, actual things, and actual facts

Editorial Policy	Report Period	Numbers and Graphs	Note on Future Prospects
This report provides an overview of the	April 1, 2021, to March 31, 2022	The figures shown here are rounded off. Due	In addition to past and current facts about
activities and operations of Asahi Holdings,	Scope	to this rounding, totals may not agree with	the Group, this report includes forecasts
Inc., with a focus on the company's	the constituent figures shown.	based on strategies, outlooks, and business
measures to address social issues through	In principle, this report covers the entire	The Group adopted the International	plans. These forecasts were created based
its business activities. It has been prepared	Asahi Holdings Group, including Asahi	Financial Reporting Standards (IFRS) in	on information available at the time of
as a way for the Asahi Holdings Group to	Holdings, Inc., and its consolidated	fiscal 2016, and each reporting item name	writing. Therefore, it is important to note
communicate with a broad range of	subsidiaries.	basically follows the IFRS guidelines.	that actual performance and results may
stakeholders and explain the kind of value it		The financial figures for fiscal 2015 are also	differ greatly from any forecasts presented
is working to create. By presenting specific		shown based on IFRS.	here, and depend to a large extent on future
group activities and initiatives, the report			changes in the business environment.
also serves as a company profile.

INTEGRATED REPORT 2022

ASAHI HOLDINGS

01

STRENGTHS

Our Strengths Based on the "Asahi Way"

Innovate and

Embrace Challenges

Putting the "Scrap and Build" Business Approach into Practice

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 from photographic fixer, and in 1975, we became the first company in Japan to obtain an industrial waste disposal license from Kobe City, which is a license 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 the challenge 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 to innovate and embrace challenges.

Promoting Business Reform with an Emphasis on Speed

Strengths Our

A Trust-Based

Relationship

with Our Employees

Being a Company of Good People

A trusting relationship with our employees has definitely supported the development of our company. We've gone through a number of phases, starting off as a family-run business focused on personal ownership ("My Company"); then becoming a business focused on 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 and other stakeholders. Throughout this journey, we have maintained a strong sense of purpose and high ethical standards in spreading the "Asahi Way," which summarizes the management philosophy and code of conduct that comprise our traditional values. At the same 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 work- life balance, implementing the internal application system and satisfaction surveys, among other changes. Just as "being a company of good people," one of the principles of the Asahi Way, suggests, a group of employees that contributes to mutual prosperity and

the development of the business is the foundation for overcoming difficulties brought about by various changes in the business environment.

8 Factors Supporting Value Creation

	Strengths rooted in Asahi's history
Ability to Adapt	Industry-Leading	Highly Motivated
to Change	Unique Technologies	Employees

Good Relationships with Stakeholders

Photographic

Hard drive

LCD

South

Precision

Refining

Minting/carbon

Malaysia

magnetic

PDP

Shanghai

Glass

E-scrap

Taiwan

L&H*

in North

treatment in

materials

materials

indium

Korea

cleaning

America

North America

Major Business

1952

1994

1999

2000

2003

2003

2006

2009

2011

2011

2013

2014

2015

2019

Expansions

Scrap & Build

Major Business

By paying close attention to the business environment and lifecycle and practicing flexible thinking, decisive action, and quick decision-making, we have built original business models and quickly exited businesses in decline. With the ability to respond in this manner, we will continue to maintain growth.

Management Capabilities for Regeneration of Business

We are proud of the original technologies we have developed. These include the following technologies: recovering precious metals with high efficiency and advanced analytical capabilities, properly processing various industrial waste materials, and product development based on accurately ascertaining customer needs. Through constant research and development, the Group continues to enhance its unique technologies in each of its business fields.

Trusted

Asahi Brand

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

Globally Expanding

Network

We actively engage in dialogue with investors and listen to our customers and business partners to strengthen governance and develop our products and services. We value the mutual trust we have with our employees with the local community and work to increase our long-term corporate value.

Substantial

Market Share

Withdrawals

2011		2013		2017		2018		2018		2018		2020		2022
Hard drive		PDP		LCD		Shanghai		Taiwan		Photographic		L&H*		Glass
magnetic			indium				materials
materials

* Life & Health Business Segment

Over the past 20 years, we have brought more	The Asahi Group's precious metal products
than 20 companies into the Group through	are highly regarded throughout the world for
mergers and acquisitions, and we have	their reliable quality. We are committed to
improved corporate management. Thanks to	building a trusted Asahi brand by continuing
our flexible management capabilities matched	to provide high-quality products and services
to specific business environments, nearly all	in all of our businesses.
of our companies perform better than they did
prior to joining the Group. We will continue to
improve performance.

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 around the world.

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

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INTEGRATED REPORT 2022

ASAHI HOLDINGS

03

History of the Asahi Holdings Group

3

2012

Our 70-year history is one of innovation and challenge.

1999

Exchange

Act 1

Over that time, we have developed into a global corporate group

Act

and continue to grow today.

Act 2

New Development

Public Company

2012

The Asahi Way established

Foundation and

Selected for inclusion in an ESG index by the Tokyo Stock

2015

Company with an Audit and Supervisory Committee system

1952

1999

Initial public stock offering made on

adopted

Early Decades

over-the-counter market

Nominating and Compensation Committees established

2000

Performance-basedstock-option system introduced

Listed on the 2nd Section of the Tokyo

1952

Asahi Chemical Laboratory founded in Joto-ku, Osaka City

2002

Stock Exchange

2016

International Financial Reporting Standards (IFRS) adopted

1964

Becomes kabushiki gaisha (stock-based company)

Promoted to the 1st Section of the Tokyo

2017

Capital increased through new share issue

Stock Exchange

Fukuoka sales office opens. Sales offices start to be established

The Asahi Way undergoes comprehensive revision

1974

2009

2018

Asahi Holdings, Inc. established

across Japan

2022

Transferred to the Tokyo Stock Exchange Prime Market

1978

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

1997

Name changed to Asahi Pretec Corp.

2003

Automobile catalyst business launched

1998

Headquarters operations transferred to Chuo-ku, Kobe City

2015

2006

Asahi Pretec Korea Co., Ltd. established

US and Canadian gold and silver refining subsidiaries

Technical Research Center opens in Nishi-ku,

Precious

MetalsPrecious

2011

E-scrap business launched

acquired from Johnson Matthey (UK), and Asahi

Kobe City

Refining USA Inc. and Asahi Refining Canada Ltd.

Precision cleaning business launched

established

1952

Launch of business recycling silver extracted from

BusinessMetals

Business

2019

Asahi Refining Florida LLC established

MetalsPrecious

photographic fixer

1975

Compact electrolytic silver collection equipment

2022

Construction of new plant in Bando City, Ibaraki Prefecture

"PLATA" developed

1982

Precious metals recycling business launched in the dental sector

completed

1984

Precious metals recycling business launched in the plating

2017

Nihon Chemitech Co., Ltd. and Ecomax Co., Ltd.

1986

solution sector

integrated into Japan Waste Corporation

Precious metals recycling business launched in the electronics

Environmental

2020

Asahi Pretec Corp. and Japan Waste Corporation

Environmental

components and jewelry sectors

Environmental

Business

integrate environmental preservation businesses

Compact electrolytic gold collection equipment "ZIPANG" developed

1994

ASAHI G&S SDN. BHD. established in Malaysia

2004

Nihon Chemitech Co., Ltd. acquired

2021

Asahi Pretec merges with Japan Waste Corporation

1972

Equipment for detoxification of photographic effluents installed

Business

Business

2007

Taiyo Chemical Co., Ltd. acquired

Preservation

and Taiyo Chemical Co., Ltd.

at the Kobe Plant

Kitakyushu Office of Asahi Pretec Corp.

1975

Industrial waste disposal license acquired from Kobe City

(detoxification of photographic effluent containing harmful

opened

2008

Preservation

substances)

Preservation

Japan Waste Corporation established

Business

businesses other than photographic

Corporation opened

1978

Registered as an environmental measurement certification office

Fuji Rozai Co., Ltd. acquired

1990

Entry into environmental preservation

2010

Yokohama Office of Japan Waste

		effluents												Ecomax Co., Ltd. acquired
Business Performance
(Billion yen)	Revenue	Operating Profit																																								(Billion yen)
	200																																								25.0
	180																																											22.5
	160																																											20.0
	140																																											17.5	ProfitOperating
Revenue	120																																											15.0
100																																											12.5
80																																											10.0
60																																											7.5
	40																																											5.0
	20																																											2.5
	0																																											0
	1964	1980	1981	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	[FY]

Group Holdings Asahi the of History

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INTEGRATED REPORT 2022

ASAHI HOLDINGS

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Message from the CEO

CEO the from Message

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 our company's purpose. This slogan was inspired directly by a submission by one of our employees for an in-house contest we held in 1978. From the company's founding up until that point, our customers had been photo studios and processing laboratories, and our main business involved recovering silver from silver- containing liquids and detoxifying hazardous waste liquids. As we developed our own technologies and expertise, we subsequently

expanded our business domains to encompass a variety of services 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 of people inside and outside the company have come to understand and agree with this model. With "Totally Committed to Protecting the Natural Environment and Preserving Resources" as our lodestar, 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. Through these two businesses, we strive to generate both economic value

and social value.

Precious Metals Business

Demand for precious metals is spreading throughout the industrial 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 is divided 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 variety of scrap materials-originating in sectors such as electronics, catalysts (automotive and chemical), dentistry, and jewelry- that contain precious metals to produce high-purity bullion.

The business combines a highly skilled sales force that visits customers in person, with plants that have the expertise and breadth of experience necessary for material recovery. Because raw materials come in a wide variety of shapes, properties, and quantities, 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 unique traceability system allows us to prove that the raw materials used in 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

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INTEGRATED REPORT 2022

ASAHI HOLDINGS

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