English Translation Originally Issued in JapaneseAsahi Breweries, Ltd.
(Ticker Code: 2502)

March 5, 2007
Dear Shareholders;

NOTICE OF THE 83rd ANNUAL SHAREHOLDERS’ MEETING

You are cordially invited to attend the Annual Shareholders’ Meeting of Asahi Breweries, Ltd. (the“Company”), which will be held as described below.
Upon attending the Meeting, please submit the enclosed voting form to the receptionist at the placeof the Meeting.
If you are unable to attend the meeting in person, you may exercise your voting right either via
postal mail or via Internet. Please review the attached Reference Materials for Shareholders’Meeting as described on pages 64 to 98 and exercise your voting right no later than 5:30 p.m.,
Monday, March 26, 2007 (Tokyo time).
Voting via Postal Mail
Please indicate your consent/dissent on the items shown on the enclosed voting form, and return theform to us by the deadline noted above.
Voting via Internet
After accessing our voting site at <http://www.webdk.net>, enter the voting code and password thatare provided on the enclosed voting form. Following the instructions on your screen, enter yourconsent/dissent on the items to be voted on by the deadline noted above. (This site is also available
through Internet via cellular phone.)
When you exercise your voting right via Internet, please review the “Reminders to Shareholders forOnline Voting” on pages 99 to 100.
* Please note that the online voting site is only available in the Japanese language.

Sincerely,
Hitoshi Ogita, President and Representative Director
Asahi Breweries, Ltd.
(Registered Head Office)7-1, Kyobashi 3-chome, Chuo-ku, Tokyo(Head Office)23-1, Azumabashi 1-chome, Sumida-ku, Tokyo11. DATE AND HOUR
March 27 (Tuesday), 2007 at 1:00 p.m. (Tokyo time)
2. PLACE
Banquet Room “Tsuru”
The Main Banquet Floor of Hotel New Otani
4-1 Kioi-cho, Chiyoda-ku, Tokyo
3. MATTERS CONSTITUTING THE PURPOSE OF THE MEETING
Items to be Reported:
Item 1: Business Report and the Statutory Report for the 83rd term from January 1, 2006 to December
31, 2006
Item 2: The Consolidated Statutory Report and the report of the audit of the consolidated accounts by
the Independent Auditor and the Board of Statutory Auditors for the 83rd term from January 1,
2006 to December 31, 2006.
Items to be Resolved:
Appropriation of retained earnings for the 83 rd term
Directors’ and Statutory Auditors’ bonuses
Amendments of the Articles of Incorporation
Election of eleven (11) Directors
Election of three (3) Statutory Auditors
Payments of Retirement Bonuses to Retiring Directors and Retiring Statutory Auditor, and Final
Payments Marking the Termination of the System of Retirement Bonuses for Directors andStatutory Auditors
Item 7: Revision of Amount of Remuneration for Directors and Statutory Auditors
Item 8: Introduction of a Plan against Large-Scale Purchases of the Shares in the Company (aframework of takeover defense measures)
Item 1:
Item 2:Item 3:Item 4:Item 5:Item 6:2

BUSINESS REPORT
From January 1, 2006 to December 31, 2006

1. Overview of Operations for Asahi Breweries Group(1) Business Progress and Results
The Japanese economy maintained a gradual recovery during 2006. Although high oil
prices, an economic slowdown in the United States and other factors provided some cause
for concern, the creation of a virtuous cycle helped to spur domestic demand. The major
growth drivers were higher levels of capital investment stemming from improved corporate
earnings and an increase in consumer spending caused by a boost to employment income.
The alcoholic beverages industry faced a harsh external environment due to a variety offactors, notably the enactment of the revised Liquor Tax Law in May 2006 and unseasonable
weather during the peak consumption season. The beer and happoshu (low-malt beer)markets both recorded sluggish demand, although the new genre market for no-maltbeer-flavored beverages expanded by about 20%. The overall market for beer-type beverages
shrank by about 1% on a taxable shipment volume basis. Elsewhere, the markets for
Otsu-type shochu (Japanese distilled liquor), low-alcohol (ready-to-drink) beverages andwine all displayed expansionary trends.
Unseasonable weather during the peak consumption season also affected the soft drinks
industry, despite aggressive promotional campaigns by makers. It is estimated that the total
sales volumes across the industry fell by approximately 1% compared with the previous year.
In the above-mentioned situation, the Company and its consolidated subsidiaries andaffiliates (collectively, the “Asahi Breweries Group” or the “Group”) made endeavors totransform itself into a new Asahi Breweries Group with abundant growth potential throughchanges in “business structure,” “profit structure” and “organizational construction” based on
its “Second Medium-Term Management Plan” covering fiscal 2004 to 2006.
These circumstances resulted in the Asahi Breweries Group’s net sales to increase by 1.1%
year-on-year to ¥1,446,385 million. Operating income declined by 1.7% to ¥88,713 million,
and recurring income declined by 1.5% to ¥90,109 million. Thanks to a significant reduction
in extraordinary losses, however, net income increased by 12.3% to ¥44,775 million, whichmarked a record high.

Net sales
Operating income
Recurring income
Net income

Asahi Breweries Group (Consolidated)¥1,446,385 million(1.1% increase, year on year)¥88,713 million(1.7% decrease, year on year)¥90,109 million(1.5% decrease, year on year)¥44,775 million(12.3% increase, year on year)

3

Asahi Breweries, Ltd. (Non-consolidated)¥1,031,060 million(2.2% decrease, year on year)¥78,596 million(0.1% increase, year on year)¥76,307 million(0.8% decrease, year on year)¥38,902 million(9.6% increase, year on year)

The following provides an overview of the Group’s operations by business segments.
Alcoholic Beverages Segment
Keeping in mind that the fiscal year 2006 as the final year of the “Second
Medium-Term Management Plan,” the Group focused its management resources on domestic
alcoholic beverage operations with the aim of generating growth in its core beer andbeer-type beverage markets to promote the reconstruction of a growth platform for the entire
business of the Group.
-

Beers and Beer-type Products BusinessIn the beer sector, the Company pursued initiatives to promote the freshness of the
Asahi Super Dry flagship brand and upgraded activities targeting commercial customers topromote the flavor of its keg draft beer. The Company launched “Asahi Prime Time” in June.
Successfully expanding its efforts in the fast-growing market for premium beers, theCompany achieved a record-high market share.
In the happoshu (low-malt beer) sector, the Company updated in February the quality of
all the three extant product lines sold under the “Honnama” brand name as part of its overall
efforts to strengthen this brand through the development of coordinated consumer andadvertising campaigns. In November the Company introduced “Asahi Zeitaku Biyori,” a new
type of happoshu offering a taste of everyday luxury appealing to the quality-seeking adultconsumers.
In the new genre sector, the Company focused on catering to diverse consumer preferences
through an aggressive new product introduction program. In May the Company launched“Asahi Gubinama,” characterized as an easy-to-drink no-malt beer lightening bitter taste. In
October the Company followed this up with the introduction of “Asahi Gokuuma,” promoted
as a no-malt beer offering an unprecedented and highly refreshing taste.
- Shochu, Low-Alcohol Beverages, Whisky and other Spirits, and Wine BusinessIn the shochu sector, the Company channeled its resources into the four leading brands“Kanoka,” “Satsuma Tsukasa,” “Daigoro” and “SAZAN.” In particular, the Company sought
to provide consumers of “Satsuma Tsukasa” with novel fresh-tasting alternatives through thelaunch of brand extensions “Satsuma Tsukasa Kurokoji Shikomi” and “Satsuma Tsukasa
Kikoji Shikomi” made with different types of malt.
In the low-alcohol beverages sector, the Company sought to boost sales throughattractive products, focusing its efforts primarily on the core brands “Asahi Cocktail Partner”
and “Asahi Shunka Shibori.” Elsewhere in the sector, the Company attempted to create
innovative value and stimulate demand through the introduction of new products such as“Asahi Honchuhai.”In the whisky and other spirits sector, the Company worked on strengthening its core
brands such as “Taketsuru Pure Malt” and “Black Nikka Clear Blend.” At the same time, theCompany implemented aggressive promotional campaigns for “Single Cask Yoichi” and“Tsuru 17 Years,” a product that underwent renewal during the year.
Marketing efforts with domestically produced wine focused on promotional campaigns forthe “Sankaboshizai-Mutenka-Yuki Wine” (antioxidant-free organic wine) and“Sankaboshizai-Mutenka Wine Monogatari” brands. The Company also worked on
developing the “Sainte Neige” brand through the launch of “Sainte Neige Excellente” andother initiatives. In imported wines business, the Company focused on boosting domestic
sales through a variety of product lineup including the “Baron Philippe” and “Gancia” labels.
4

- International Alcoholic Beverages Business
The Company’s international business expansion efforts in alcoholic beverages sector
primarily target Asia, particularly the ever-expanding Chinese market. Asahi BreweriesGroup companies operating in China recorded steady growth in sales on a volume basis
during 2006. Aggressive market development efforts in ASEAN countries also helped theGroup boost its competitiveness within Asia, leading to a substantial growth in sales. In
Europe, the Company upgraded its efforts to develop its regional business base. The
Company concluded a license agreement with a UK brewer for manufacturing anddistribution of “Asahi Super Dry,” whereby the Company began full-scale promotion for
supply of keg draft beer to commercial customers in the UK market.

In spite of all the efforts described above, sales of the Group’s alcoholic beverages
operations declined by 1.7% year-on-year to ¥1,007,557 million, impacted by the slumping
market for beers and beer-type products in the Japanese market.
Soft Drinks Segment- Domestic Soft Drinks BusinessIn domestic soft drinks business, Asahi Soft Drinks Co., Ltd. pursued a growth strategy
while implementing further structural reforms with the aim of creating a sound base for the
next stage of expansion.
Its Efforts focused on strengthening and expanding sales of the key brands that lie at theheart of its growth strategy, namely “WONDA,” “Mitsuya Cider” and “Asahi Juroku-Cha.”
Other campaigns focused on cultivating the brands “Asahi Wakamusha,” “Asahi Super H2O”
and “Vanadium-Tennensui.” Asahi Soft Drinks also launched a number of new products
targeting specific consumer needs, including “Asahi Juroku-Cha with Meals,” a product thathas been approved as a Food for Specified Health Uses (tokutei hoken-yo shokuhin), “Asahi
Sansosui” and “Asahi Gyugyutto Shimikomu Collagen Water” (a collagen-enhanced mineralwater).
In this segment, structural reforms targeted earnings structure improvements, including
a new initiative to create optimized production and logistics systems via enhanced
intra-Group cooperation, with the primary aims to reduce manufacturing costs and to boost
the cost efficiency of vending machine operations.
In chilled beverages sector, the year was positioned as one for consolidating the businessbases ahead of fresh expansion of LB Co., Ltd. (Saitama) and LB Co., Ltd. (Nagoya), twocompanies that had become consolidated subsidiaries of the Company during 2005.
- International Soft Drinks Business
The Group’s international soft drinks business expansion efforts in soft drinks revolvearound Tingyi-Asahi-Itochu Beverages Holding Co., Ltd. in China and Haitai Beverage Co.,
Ltd. in South Korea. In 2006, sales grew briskly, particularly in the Chinese market, led bytea-based drinks and mineral waters, accompanied by significant gains in terms of increased
productivity and profitability
As a result of these operations, net sales of soft drinks segment rose 6.0% from theprevious year to ¥283,121 million.

5

Foods and Pharmaceuticals Segment
In the foods and pharmaceuticals segment, Asahi Food & Healthcare, Ltd., one ofsubsidiaries of the Company, sought to expand operations and reinforce its business base bycontinuing to follow a basic strategy targeting growth, structural reforms and themaintenance of high levels of product safety.
Sales expansion efforts were focused on its four mainstay products “Mintia” (breathmints), “Balance Up” (a nutritionally balanced snack bar), “EBIOS” (a quasi-drug madefrom brewer’s yeast) and “Actio” (a nutritional supplement). It also worked on creating
brands in new product categories with the introduction of “Slim Up Slim,” a health food foruse in calorie-controlled dieting. Thanks to successful launch of other new products andexpanded sales in its direct marketing business and food product materials business,
including brewer’s yeast and freeze-dried ingredients, the Group achieved a steady increasein sales and improved the profitability of operations.
Aiming to achieve more dramatic growth in its foods and pharmaceuticals business bycreating an additional platform for future expansion, the Company successfully acquired
majority stake in Wakodo Co., Ltd., a leading baby foods maker, by a tender offer in May
2006. The Company also included Sanwell Co., Ltd., a health foods company, into its
consolidated subsidiary in the year under review.
Reflecting the above-mentioned efforts and consolidation of the said companies, net sales
generated by foods and pharmaceuticals segment amounted to ¥53,791 million, an increaseof 112.7% compared with the previous year.
Other Businesses Segment
In other businesses segment, the logistics business saw a boost in profitability through themerger and reorganization of logistics companies within the Group, while the rationalizationof the real estate business and wholesaling business resulted in lower sales. Overall, net sales
in these businesses declined 9.2% in year-on-year terms to ¥101,914 million.
Asahi Breweries Group Breakdown of Net Sales (Consolidated)
82nd Term
83rd Term
2006
2005
Segment(Under review)(Previous)¥1,007,557¥1,025,446
Alcoholic Beverages
283,121267,002
Soft Drinks
53,791
25,286
Foods and Pharmaceuticals
101,914112,291
Other Businesses
Total
1,446,385
1,430,026
Note: The above figures exclude intra-Group sales.

6(Million yen)
Change inAmountChange inPercentage(17,888)
16,11928,505(10,377)
16,358(1.7)%
6.0
112.7
(9.2)
1.1

Asahi Breweries, Ltd. Breakdown of Net Sales (Non-consolidated)
83rd Term
82nd Term
2006
2005
Business Area
(Under review)(Previous)
Beers and Beer-Type Products¥893,893¥919,471
718,169
726,226(Beer)
108,561
147,387(Happoshu)
67,16245,858(New genre)
Shochu57,17755,087
Low-Alcohol Beverages
32,741
32,690
Whisky and Other Spirits
27,43628,219Wine
15,064
14,433
Other Alcoholic Beverages
2,896
2,921
Real Estate
1,852
1,336
Total
1,031,060
1,054,161(Million yen)
Change inAmountChange inPercentage(25,578)(8,056)(38,825)
21,303
2,089
50
(783)
630
(25)
515
(23,100)(2.8)%(1.1)(26.3)
46.5
3.8
0.2
(2.8)
4.4
(0.9)
38.6
(2.2)

(2) Management Perspectives
The Asahi Breweries Group has formulated the “Third Medium-Term Management
Plan” to guide the establishment of a new growth trajectory for the Group during thethree-year period starting in fiscal 2007.
The “Third Medium-Term Management Plan” features a new long-term business visionthat further clarifies the focal areas and the concepts for improving the corporate value. The
vision also spells out the Group’s objective to become a leading company with high growthpotential by continuously offering lifelong enjoyment and satisfaction to customers, among
others, in Asia, in the business domain of “food and health.”
In order to achieve the goals of this long-term vision, the entire Group is committed inits efforts to establish a new growth path and improve the corporate brand by strengthening
the Asahi brand while pursuing self-sustaining collaborations and synergy effects with thediversified brands within the Group, based on enhanced manufacturing competitiveness.
The business strategy of the “Third Medium-Term Management Plan” focuses on
efforts to realize stable and long-term generation of cash flow through improvement of thebase of the Asahi brand in the alcoholic beverages business, with “Super Dry” at its core, andput this business back to the growth path. We aim to re-establish a new growth path for theGroup by pursuing synergy effects with new business bases acquired by M&A transactions
and continuous active business investments, as well as by further growth of existing member
companies of the Group.

7

The Domestic Alcoholic Beverages BusinessIn the alcoholic beverages business, which is the core one as well as the greatest
strength of the Group, the Company will go back to the starting point of pursuing customer
satisfaction in order to reestablish the growth path of its business through redevelopment of
the Asahi brand and its entire business activities as a whole.
In the beer and beer-type beverages sector, the Company will give top priority toactivities to appeal the brand value, from the customers’ perspective, of our flagship brand“Asahi Super Dry,” which is celebrating its 20th anniversary this year (2007). Furthermore, inthe happoshu (low-malt beer) and new genre sectors, the Company will deploy productstrategy, which shall depict the value of the products are offering to customers, to win
concrete customer loyalty in the beer and beer-type beverages market.
In the categories of shochu, low-alcohol beverages, whisky and other spirits and wine,
given the ever-diversifying customer requirements, the Company aims to achieve further
growth as well as improvements in profitability by nurturing leading brands, with uniquevalues and strong points, in each category and genre.

Group Operations
In the soft drinks business, which is the second pillar of the Group’s operations, Asahi
Soft Drinks Co., Ltd., one of the core members of the Group, plans to continue pursuing a
growth strategy focusing on strengthening core brands while at the same time implementing
structural reforms such as the establishment of optimized production and logistics systems.
In addition, following the full-scale entry into the chilled beverages business through LB Co.,
Ltd. (Saitama) and LB Co., Ltd. (Nagoya), the Group plans to exploit synergies within theGroup in order to reinforce the overall manufacturing and sales base.
In the foods and pharmaceuticals business, the Company will work towards improving
the value of its existing brands based on a three-company structure made up of Asahi Foodand Healthcare, Ltd. and newly joined Wakodo Co., Ltd. and Sanwell Co., Ltd. Further, theCompany aims to establish a growth path for this business by offering high value-added
products for a wide range of age groups, utilizing the materials developed and accumulated
over the years across the entire Group.
In international beverage operations, the Company remains to focus mainly on Asia.
Leveraging its expertise in manufacturing alcoholic beverages and soft drinks, the Company
plans to create a robust business platform and increase profitability by pursuing the growthof local brands alongside the development of the Asahi brand, particularly across the Asian
region. The Company is also seeking opportunities of new business investments and businessalliances with the aim of becoming a leading “food and health” company in that region.
Through the “Third Medium-Term Management Plan,” the Company will endeavor toestablish a solid growth trajectory for each business in the Asahi Breweries Group. At thesame time, the Company aims to boost the overall corporate value of the Group through the
pursuit of optimal financial and cash flow strategies. The Company intends to prioritize any
investments that will enhance the growth of the business base, and to consider strategicacquisitions or alliances within the “food and health” sector, both in Japan and abroad. With
the aim of creating additional corporate value, the Company intends to follow a flexible cash
flow strategy to boost shareholder returns by optimizing mixture of dividends and purchase8

of treasury stock and thereby enhancing capital efficiency.
As the Company pursues these goals, shareholders’ continuing guidance and support iscordially requested.
(3) Capital Investment Activities
Consolidated capital expenditures in the year under review totaled ¥36,893 million, of
which the majority represented investments in upgrades to existing facilities and energy
conservation measures. Other specific major projects are outlined below:
Major capital investments and facility upgrades in process during 2006
Segment concerned: Alcoholic beverages and soft drinks operations
Item and expenditure: Manufacturing facility for soft drinks and low-alcohol beverages:¥4,470 million (at Ibaraki Plant, Asahi Breweries, Ltd.: total projected capital
investment of ¥22,500 million, with completion scheduled for May 2009)(4) Financing Activities
Mainly to meet fund for redemption of corporate bonds matured during the year underreview, on June 22, 2006, Asahi Breweries, Ltd. launched two unsecured bonds, #26 (¥15
billion, 4-year maturity) and #27 (¥10 billion, 6-year maturity).
(5) Status of Principal Lenders(As of December 31, 2006)
LenderOutstanding Balance(Million yen)

Sumitomo Mitsui Banking Corporation

20,500Mizuho Corporate Bank, Ltd.

15,500The Dai-ichi Mutual Life Insurance Company

10,000The Sumitomo Trust & Banking Co., Ltd.

10,000

The Norinchukin Bank

10,000

Fukoku Mutual Life Insurance Company

8,500

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

7,000

Sumitomo Life Insurance Company

6,000

Development Bank of Japan

3,625

Mitsubishi UFJ Trust and Banking Corporation

3,500

Note: UFJ Bank Ltd. merged into The Bank of Tokyo-Mitsubishi, Ltd. on January 1, 2006 and became The
Bank of Tokyo-Mitsubishi UFJ, Ltd.

9

(6) Financial and Profit/Loss Indicators
A. Financial and Profit/Loss Indicators of Asahi Breweries Group (Consolidated)
80th Term
2003

81st Term
2004

82nd Term
2005

83rd Term
2006(Under review)

1,400,301

1,444,225

1,430,026

1,446,385

Recurring income (million yen)

70,48095,65091,45990,109Net income (million yen)

23,21030,59539,87044,775

Earnings per share (yen)

46.80

62.52

82.22

94.02

Total assets (million yen)

1,244,409

1,250,818

1,218,226

1,288,501

Net assets (million yen)

398,152

417,827454,891

509,774

Net assets per share (yen)810.19860.66951.12

1,012.77

Net sales (million yen)

Notes:
1. Earnings per share is calculated based on the average total number of shares outstanding during the term.
Net assets per share is calculated based on the total number of shares outstanding at term-end. The
number of shares outstanding is exclusive of treasury stock.
2. Effective the 83rd term (FY2006), the Asahi Breweries Group adopted Corporate Accounting Standard
No. 5 and Corporate Accounting Standard Implementation Guidelines No. 8 issued by the AccountingStandards Board of Japan, both of which relate to the balance-sheet presentation of net assets.

B. Financial and Profit/Loss Indicators of Asahi Breweries, Ltd. (Non-Consolidated)
80th Term
2003

81st Term
2004

82nd Term
2005

83rd Term
2006(Under review)

1,106,977

1,116,360

1,054,161

1,031,060

Recurring income (million yen)

62,83888,65976,90576,307

Net income (million yen)

16,37928,19635,49838,902

Earnings per share (yen)

33.11

57.80

73.41

81.69

Total assets (million yen)

1,077,786

1,038,319

981,151

1,014,878

Net assets (million yen)

386,407403,763433,689449,270

Net assets per share (yen)786.45831.88907.02954.48Net sales (million yen)

Notes:
1. Earnings per share is calculated based on the average total number of shares outstanding during the term.
Net assets per share is calculated based on the total number of shares outstanding at term-end. The
number of shares outstanding is exclusive of treasury stock.
2. Effective the 83rd term (FY2006), the Asahi Breweries Group adopted Corporate Accounting Standard
No. 5 and Corporate Accounting Standard Implementation Guidelines No. 8 issued by the AccountingStandards Board of Japan, both of which relate to the balance-sheet presentation of net assets.

10(7) Principal Subsidiaries
Company Name

Capital(Million yen)

Share Holdings (%)

Main Operations

Asahi Soft Drinks Co., Ltd.

11,081

51.2

Asahi Food & Healthcare,
Ltd.

3,200

100.0

Production and sales of softdrinks
Production and sales offoods and pharmaceuticals

Wakodo Co., Ltd.

2,918

91.0

Production and sales offoods and pharmaceuticals

The Nikka Whisky DistillingCo., Ltd.
Sainte Neige Wine Co.,Ltd.
Asahi Beer Real Estate,
Ltd.
Asahi Logistics, Ltd.

14,989100.0

Production of alcoholic
beverages

125

100.0

Production and sales ofalcoholic beverages

200

100.0

Management of real estate

80

100.0

Cargo transportation

Asahi Food Create, Ltd.

40

100.0

Operation of bars andrestaurants

LB Co., Ltd. (Saitama)

487

67.9

LB Co., Ltd (Nagoya)

55

97.0

Beijing Beer Asahi Co.,Ltd.
Hangzhou Xihu Beer
Asahi Co., Ltd.

11,426(802,208 thousand RMB)

47.0

Production and sales of softdrinks
Production and sales of softdrinksBrewing and sales of beer

3,882
(276,000 thousand RMB)

55.0

Brewing and sales of beer

Yantai Beer Asahi Co.,
Ltd.

3,032
(218,804 thousand RMB)

53.0

Brewing and sales of beer

Haitai Beverage Co., Ltd.

9,460
(100,000 million KRW)

41.0

Production and sales ofsoft drinks

Asahi Beer U.S.A., Inc.

3,720
(US$32,000 thousand)

99.2

Sales of beer

Notes:
1.

The percentage of shares held includes indirect shareholdings.

2.

The Company conducted a tender offer for shares in Wakodo Co., Ltd. during the period of April 25, 2006
to May 15, 2006; thereby the Company acquired 91.0% of outstanding shares in Wakodo and madeWakodo a subsidiary of the Company as from the year under review.

3.

The Nikka Whisky Distilling Co., Ltd. merged with Asahi-Kyowa Liquor Manufacturing Co., Ltd.,
formerly a subsidiary of Asahi Breweries, Ltd., effective as of January 1, 2006.

4.

Asahi Beer Real Estate, Ltd. conducted an absorption-type demerger against the Company effective as ofJanuary 1, 2006; as a result of which, the stated capital of the former decreased to ¥200 million.

5.

Following the reorganization and merger of logistics operations companies within the Asahi BreweriesGroup, Asahi Logistics Co., Ltd. and others merged into Asahi Logistics, Ltd. effective as of January 1,
2006.

6.

The paid-in capital of Beijing Beer Asahi Co., Ltd. increased to ¥11,426 million (from ¥4,616 million at theprevious year-end) by injections of fresh capital by the Company and Itochu Corporation. The percentageof shares held by the Company rose from 33.0% to 47.0% as a result.

7.

The paid-in capital of Hangzhou Xihu Beer Asahi Co., Ltd. rose to ¥3,882 million (from ¥3,132 million at
the previous year-end) by injections of fresh capital by Asahi Breweries Itochu (Holdings) Ltd., a holding
company joint venture between the Company and Itochu Corporation (in which the Company holds 60.0%of the shares and Itochu Corp. the other 40.0%), and by Hangzhou Industrial Asset Management Co., Ltd.

11

(8) Acquisitions of shares, equity stakes and stock acquisition rights
In line with a resolution approved at the meeting of the Board of Directors on April 24,
2006, the Company conducted a tender offer for shares of common stock of Wakodo Co.,and thereby acquired 5,403,631 shares in Wakodo. As a result of this acquisition, theCompany gained 91.0% equity stake in Wakodo Co., Ltd., as a result of which, the firm,
together with its three subsidiaries, became a consolidated subsidiary of the Company.
(9) Succession of rights and obligations by mergers or demergers involving othercorporate entities
In line with a resolution approved at the meeting of the Board of Directors on August 29,
2005, the Company succeeded by way of absorption-type demerger, the business of realestate lease and its related operating assets and rights and obligations thereto from Asahi
Beer Real Estate, Ltd., effective as of January 1, 2006.
(10) Principal Operations(As of December 31, 2006)

The Group’s principal operations and products are as listed below:
Principal
Operations

Alcoholic
Beverages

Soft Drinks

Foods andPharmaceuticals

Principal Products
Asahi Super Dry, Asahi Premium Draft Beer Jukusen, Asahi Prime Time, Asahi
Honnama, Asahi Honnama Aqua Blue, Asahi Honnama Gold, Asahi Zeitaku
Biyori, Asahi Shinnama 3, Asahi Gubinama, Asahi Gokuuma, Kanoka, Daigoro,
Ichibanfuda, Satsuma Tsukasa, SAZAN, Asahi Shunka Shibori, Asahi Cocktail
Partner, Taketsuru, Black Nikka Clear Blend, Single Malt Yoichi, Sainte Neige,
Baron Philippe, Louis Latour, Caliterra, Gancia, ALMADEN
Mitsuya Cider, Wilkinson, Bireley’s, WONDA, Asahi Juroku-Cha, Asahi
Wakamusha, FAUCHON, Asahi Ikkyu-Chaba Oolong-Cha, Asahi Super H2O,
Asahi Vanadium-Tennensui
EBIOS, Actio, Slim Up Slim, Balance Up, Mintia,
Haihai (baby milk), Gungun (baby milk), Retort Club (baby food), Gyunyuya-sanno Kohii (coffee), Oshibori Wetty (wet tissues), Siccarol (baby skincare powder)12

(11) Offices and Breweries(As of December 31, 2006)
Asahi
Breweries,
Ltd.

Registered
Head Office7-1, Kyobashi 3-chome, Chuo-ku, Tokyo

Head Office23-1, Azumabashi 1-chome, Sumida-ku, Tokyo

Regional
Sales
Offices

Hokkaido Branch (Sapporo), Tohoku Regional Headquarters(Sendai), Shutoken Regional Headquarters (Chuo-ku, Tokyo),
Kanshin-etsu Regional Headquarters (Chuo-ku, Tokyo), Chubu
Regional Headquarters (Nagoya), Hokuriku Regional Headquarters(Kanazawa), Kinkiken Regional Headquarters (Osaka), Chugoku
Regional Headquarters (Hiroshima), Shikoku Regional
Headquarters (Takamatsu), Kyushu Regional Headquarters(Fukuoka)
Hokkaido Brewery (Sapporo),
Fukushima Brewery (Motomiya-machi, Adachi-gun, Fukushima
Prefecture), Ibaraki Brewery (Moriya, Ibaraki Prefecture),
Kanagawa Brewery (Minami-ashigara, Kanagawa Prefecture),
Nagoya Brewery (Nagoya), Suita Brewery (Suita, Osaka
Prefecture), Nishinomiya Brewery (Nishinomiya, Hyogo
Prefecture), Shikoku Brewery (Saijo, Ehime Prefecture), Hakata
Brewery (Fukuoka)
Fundamental Research Technology Laboratory,
Development Laboratory for New Business,
Engineering & Technology Development Laboratory,
Brewing Research & Development Laboratory,
Analytical Technology Laboratory,
Packaging Research & Development Laboratory(all in Moriya, Ibaraki Prefecture)
North America Office (U.S.A.), Europe Branch (U.K.)
International Headquarters for China (China)

Production
Facilities

Laboratories

Overseas
Offices

13Subsidiaries

Domestic

Overseas

Asahi Soft Drinks Co., Ltd.
Headquarters: Sumida-ku, Tokyo
Sales offices:
Shutoken Branch Office (Chuo-ku, Tokyo),
Kinkiken Branch Office (Osaka), and nine others
Production
Kashiwa (Kashiwa, Chiba Prefecture), Mt. Fuji
facilities:(Fujinomiya, Shizuoka Prefecture), Hokuriku(Nyuzen-machi, Shimoniikawa-gun, Toyama
Prefecture), Akashi (Akashi, Hyogo Prefecture)
Asahi Food & Healthcare, Ltd.
Headquarters: Sumida-ku, Tokyo
Wakodo Co., Ltd.
Headquarters: Chiyoda-ku, Tokyo
The Nikka Whisky Distilling Co., Ltd.
Headquarters: Minato-ku, Tokyo
Sainte Neige Wine Co., Ltd.
Headquarters: Yamanashi, Yamanashi Prefecture
Beijing Beer Asahi Co., Ltd. (China),
Hangzhou Xihu Beer Asahi Co., Ltd. (China),
Yantai Beer Asahi Co., Ltd. (China),
Haitai Beverage Co., Ltd. (Korea),
Asahi Beer U.S.A., Inc. (U.S.A.)

Note: The address of Fukushima Brewery of the Company changed to Motomiya, Fukushima Prefecture as ofJanuary 1, 2007 due to a municipal merger.

(12) Employees(As of December 31, 2006)
A. Employees of the Asahi Breweries Group (Consolidated)
Business Segment
Alcoholic Beverages
Soft Drinks

Number of Employees
7,297
4,110
959
2,914
15,280Foods and Pharmaceuticals
Other Businesses
Total(up 103)(down 116)
(up 589)(down 174)
(up 402)

Notes: Figures in parentheses represent increase or decrease over the end of the previous term.

B. Employees of Asahi Breweries, Ltd. (Non-Consolidated)
Full-time employees

Average Age

Average Years ofService

Average annualcompensation

3,672 (up 65)

40.7

14.1

¥8,604,547

Notes:
1. Figures in parentheses represent increase or decrease over the previous term.
2. Full-time employees include 156 persons seconded to the Company from other companies.
3. In addition to the employees described above, the Company employs 122 persons on a term contract
basis.

14

(13) Overview of other significant Asahi Breweries Group activities
Research and Development
R&D operations were principally involved in the development of new products andtechnologies to reinforce the Group’s existing businesses and to foster new businessdevelopment. Notable R&D achievements in the year under review are outlined below:•

The Company achieved a world first technology with a commercial viability for theaqueous culture of fermentation yeasts, which play a key role in the manufacture ofshochu. The Company has submitted patent applications relating to this technology inJapan and also overseas. The Japan Society for Bioscience, Biotechnology andAgrochemistry (JSBBA) and The Society for Biotechnology, Japan have both publishedthese results;• The Company’s research has demonstrated that polyphenols derived from apples can
reduce intra-abdominal fat and also lower the levels of fats circulating in the blood.
These results have been published by the JSBBA. The Company has developed apple
polyphenol as an original functional ingredient and plans to use it in health foodproducts under the brand name “Apple Phenon”; and• The Company has jointly developed technology to enable production of
biomass-ethanol from high-grade biomass sugar cane with the National Agricultural
Research Center (Kyushu Okinawa Region), an independent administrative agency, andits verification tests were commenced in 2006 on the island of Iejima in Okinawa
Prefecture. The potential social significance of this research was widely reported in themass media.
Corporate Social Responsibility (“CSR”)
Under the heading of adopting “proactive measures to enhance the corporate value,” theAsahi Breweries Group has identified six priority areas for the Group’s CSR activities,
namely, “pursuit of quality,” “compliance with laws and ethical standards,” “environmental
conservation,” “appropriate information disclosure,” “living in harmony with local
communities” and “educational activities to encourage responsible drinking in moderation.”
The Group’s CSR Committee is overseeing initiatives in each of these areas. In the field ofenvironment education as part of its environment conservation activities, the Group invited highschool students in Shikokoku area to the“School for development of gallant young warriors to protect
Japanese environment” in cooperation with the local community. The Group has been particularly

active in campaigns to encourage responsible drinking and to highlight the social blightcaused by drink driving. Related activities are outlined below:•

Accepting the social responsibilities incumbent on a company that produces alcoholic
beverages, the Asahi Breweries Group conducted educational campaigns to encourageGroup employees to take a lead in setting standards for responsible drinking. We havealso adopted and abided by internal standards in this area that are stricter than theindustry’s voluntary code;• We implemented a variety of measures aimed at curbing drink driving. We distributed
posters to bars and restaurants to warn customers of the dangers of this anti-social
behavior and prevent them from drink driving. We also conducted a series of campaigns
for warnings and alerts through various advertising and promotional media including
TV and newspapers.
• We participated in the activities of the “Project of Stop Underage Drinking!” organizedby the beer industry. We also went on providing financial support to variousorganizations and individuals involved in underage drinking prevention initiatives andrelated research through our originally organized “Fund for the Prevention of Underage
Drinking.”
15

2. Overview of the Company(1) Shares Outstanding(As of December 31, 2006)

A. Total number of authorized shares

972,305,309

B. Number of shares issued

483,585,862(decreased by 10,000,000 from the end of the previous term)

Note: The decrease in shares issued above is attributable to retirement of 10,000,000
shares in treasury stock on December 1, 2006.
113,843

C. Number of shareholders(decreased by 3,233 from the end of the previous term)
D. Major shareholders
Shareholders’ Investment in the Company
Number of
Shares held
(In hundreds)

Percentage ofShares held (%)

The Master Trust Bank of Japan, Ltd. (Trust Account)239,372

4.9

Asahi Kasei Corporation

187,853

3.9

Japan Trustee Services Bank, Ltd. (Trust Account)

182,544

3.8

The Dai-ichi Mutual Life Insurance Company

179,200

3.7

Fukoku Mutual Life Insurance Company

168,830

3.5

Nomura Securities Co., Ltd.

92,087

1.9

Sumitomo Mitsui Banking Corporation

90,280

1.9

The Sumitomo Trust & Banking Co., Ltd

81,2601.7

State Street Bank and Trust Company 505103

74,921

1.5

Investor’s Bank West Pension Fund Clients

72,681

1.5

1,369,029

28.3

Total

Note: Treasury stock of 128,884 hundred shares is excluded from the above list of major shareholders.

16(2) Status of share purchase warrants, etc.
A. Share purchase warrants held by Directors and Statutory Auditors of the Company,
granted as part of consideration for execution of their duties(As of December 31, 2006)

1) Stock option system based on acquisition of treasury stock, adopted by resolution of theBoard of Directors at its meeting of March 30, 2000.
•

Class and number of shares subject to the warrants:
Common shares: 26,000 shares•

Payment due upon exercise of the warrants:¥1,115 per share•

Exercise period:
From January 1, 2005 to March 29, 2010•

Conditions for exercise of the warrants:
The warrants are exercisable even after resignation of Directors or Statutory
Auditors, as the case may be.
The warrants may be passed on to heirs.
The warrants are extinguished when holders are dismissed for certain special
reasons.
Any assignment or pledging of the warrants are prohibited.

•

Situation of holdings of the share purchase warrants by Directors and Statutory
Auditors

Type of Grantee

Number of sharessubject to sharepurchase warrants
apply

Number of holders

Directors(except Outside Directors)

16,000 shares

7

Outside Directors

4,000

2

Statutory Auditors

6,000

2

2) Stock option system based on acquisition of treasury shares, adopted by resolution of
the Board of Directors at its meeting of March 29, 2001.
•

Class and number of shares subject to the warrants:
Common shares: 116,000 shares•

Payment due upon exercise of the warrants:¥1,185 per share•

Exercise period:
From January 1, 2005 to March 28, 2011•

Conditions for exercise of the warrants:
The warrants are exercisable even after resignation of Directors or Statutory
Auditors, as the case may be.
The warrants may be passed on to heirs.
The warrants are extinguished when holders are dismissed for certain special
17

reasons.
Any assignment or pledging of the warrants are prohibited.
•

Situation of holdings of the share purchase warrants by Directors and Statutory
Auditors

Type of Grantee

Number of sharessubject to sharepurchase warrants
apply

Number of holders

Directors(except Outside Directors)

72,000 shares

8

Outside Directors

16,0002

Statutory Auditors

28,00023) Stock option system based on subscription rights, adopted by resolution of the Board of

Directors at its meeting of March 28, 2002•

Class and number of shares subject to the subscription rights:
Common shares: 205,000 shares•

Payment due upon exercise of the subscription rights:¥1,090 per share•

Exercise period:
From January 1, 2005 to March 27, 2012•

Conditions for exercise of the subscription rights:
The rights are exercisable even after resignation of Directors or Statutory Auditors,
as the case may be.
The rights may be passed on to heirs.
The rights are extinguished when holders are dismissed for certain special reasons.
Any assignment or pledging of the rights are prohibited.

•

Situation of holdings of the share purchase warrants by Directors and Statutory
Auditors
Type of Grantee

Number of sharessubject to subscription
rightsNumber of holders

Directors(except Outside Directors)

130,000 shares

9

Outside Directors

30,0003

Statutory Auditors

45,00024) The First Issue of share purchase warrants adopted by resolution of the Board of
Directors at its meeting of March 28, 2003.
•

Number of the share purchase warrants:
160•

Class and number of shares subject to the share purchase warrants:
Common shares: 160,000 shares
18

•

Payment due upon exercise of the share purchase warrants:¥830 per share•

Exercise period:
From March 28, 2005 to March 27, 2013•

Conditions for exercise of the share purchase warrants:
The rights are exercisable even after resignation of Directors or Statutory Auditors,
as the case may be.
The warrants may be passed on to heirs.
The warrants are extinguished when holders are dismissed for certain special
reasons.
Any assignment or pledging of the warrants are prohibited.

•

Situation of holdings of the share purchase warrants by Directors and Statutory
Auditors
Type of Grantee

Number of sharepurchase warrants

Number of sharessubject to sharepurchase warrants

Number of holders

Directors(except Outside Directors)

88

88,000 shares

7

Outside Directors

30

30,0003

Statutory Auditors

42

42,00045) The Second Issue of share purchase warrants adopted by resolution of the Board of
Directors at its meeting of March 30, 2004.
•

Number of the share purchase warrants:
2,100

•

Class and number of shares subject to the share purchase warrants:
Common shares: 210,000 shares•

Payment due upon exercise of the share purchase warrants:¥1,205 per share•

Exercise period:
From March 30, 2006 to March 29, 2014•

Conditions for the exercise of the share purchase warrants:
The warrants are exercisable even after resignation of Directors or Statutory
Auditors, as the case may be.
The warrants may be passed on to heirs.
The warrants are extinguished when holders are dismissed for special reasons.
Assignment and pledging of warrants are prohibited.

•

Situation of holdings of the share purchase warrants by Directors and Statutory
Auditors
Number of sharepurchase warrants

Number of sharessubject to sharepurchase warrants

Number of holders

Directors(except Outside Directors)

1,400

140,000 shares

8

Outside Directors

300

30,0003Type of Grantee

19Statutory Auditors

400

40,00046) The Third Issue of share purchase warrants adopted by resolution of the Board of
Directors at its meeting of March 30, 2005.
•

Number of the share purchase warrants:
2,250

•

Class and number of shares subject to the share purchase warrants:
Common shares: 225,000 shares•

Payment due upon exercise of the share purchase warrants:¥1,374 per share•

Exercise period:
From March 30, 2007 to March 29, 2015•

Conditions for exercise of the share purchase warrants:
The warrants are exercisable even after resignation of Directors or Statutory
Auditors, as the case may be.
The warrants may be passed on to heirs.
Any assignment or transfer of the share purchase warrants is subject to approval of
the Board of Directors.

•

Situation of holdings of the share purchase warrants by Directors and Statutory
Auditors
Number of sharepurchase warrants

Number of sharessubject to sharepurchase warrants

Number of holders

Directors(except Outside Directors)

1,450

145,000 shares

8

Outside Directors

300

30,0003

Statutory Auditors

500

50,0005Type of Grantee

7) The Fourth Issue of share purchase warrants adopted by resolution of the Board of
Directors at its meeting of March 30, 2006.
•

Number of share purchase warrants:
2,550

•

Class and number of shares subject to the share purchase warrants:
Common shares: 255,000 shares•

Payment due upon exercise of the share purchase warrants:¥1,688 per share•

Exercise period:
From March 30, 2008 to March 29, 2016•

Conditions for the exercise of the share purchase warrants:
The warrants are exercisable even after resignation of Directors or Statutory
Auditors
The warrants may be passed on to heirs
Any Assignment or transfer of the share purchase warrants is subject to approval of
the Board of Directors.
20

•

Situation of holdings of the share purchase warrants by Directors and Statutory
Auditors
Number of sharepurchase warrants

Number of sharessubject to sharepurchase warrants

Number of holders

Directors(except Outside Directors)

1,750

175,000 shares

9

Outside Directors

300

30,0003

Statutory Auditors

500

50,0005Type of Grantee

B. Share purchase warrants granted to employees of the Company as part ofconsideration for execution of their duties during the fiscal year under review
The Fourth Issue of share purchase warrants adopted by resolution of the Board of
Directors at its meeting of March 30, 2006.
•

Number of share purchase warrants:
3,650

•

Class and number of shares subject to the share purchase warrants:
Common shares: 365,000 shares•

Payment due upon exercise of the share purchase warrants:¥1,688 per share•

Exercise period:
From March 30, 2008 to March 29, 2016•

Conditions for the exercise of the share purchase warrants:
The warrants are exercisable even after resignation.
The warrants may be passed on to heirs.
Any assignment or transfer of the share purchase warrants is subject to approval of
the Board of Directors.

•

Situation of holdings of the share purchase warrants by employeesType of Grantee

Employees

Number of sharepurchase warrants

Number of sharessubject to sharepurchase warrants

Number of persons
receiving warrants

3,650

365,000 shares

31

21

(3) Directors of the Company
A. Directors and Statutory Auditors(As of December 31, 2006)
Name

Kouichi Ikeda

Position

Yoshihiro Goto

Chairman of the Board andRepresentative Director
President and Representative
Director
Senior Managing Director

Akira Ohara

Senior Managing Director

Masatoshi Takahashi

Senior Managing Director

Yoshifumi Nishino

Managing Director

Naoki Izumiya

Managing Director

Hikaru Kawamura

Managing Director

Kazuo Motoyama

Director

Nobuo Yamaguchi

Outside Director

Hitoshi Ogita

22

Areas of responsibility, primary positions, andrepresentation of other companies andorganizations
The Chairman of the board of Asahi Beer Arts
Foundation

Senior Managing Executive Officer, Group
Headquarters (Personnel Department, Finance
Department and Public Relations Department)of the Company
Senior Managing Executive Officer,
International Headquarters, International
Headquarters for China of the Company
President and Representative Director of
AI Beverages Holding Co. Ltd.
Representative Director and Chairman ofHaitai Beverage Co., Ltd.
Senior Managing Executive Officer, Domestic
Marketing Headquarters of the Company
Managing Executive Officer, Group
Headquarters (Quality Assurance Department
and Research & Development Department) of
the Company
The Chairman of the board of Asahi Breweries
Foundation
Managing Executive Officer, Senior General
Manager of Liquor Sales & Marketing of theCompany
Managing Executive Officer, Group-wide
manufacturing of the Company
Executive Officer, Group Headquarters(Corporate Planning Department andInstitute of Lifestyle & Culture) of theCompany
Chairman of the Board and Representative
Director of Asahi Kasei Corporation
Chairman of The Japan Chamber of Commerceand Industry
Chairman of The Tokyo Chamber ofCommerce and Industry

Name

Position

Areas of responsibility, primary positions, andrepresentation of other companies andorganizations
President and CEO of Okamoto Associates,
Inc.
General Partner of Pacifica Neo Ventures LLC

Yukio Okamoto

Outside Director

Tomoyo Nonaka

Director

Sugao Nishikawa

Standing Statutory Auditor

Hiroshi Fujita

Standing Statutory Auditor

Takahide Sakurai

Outside Statutory Auditor

Naoto Nakamura

Outside Statutory Auditor

Tadashi Ishizaki

Statutory Auditor

Chairman and CEO of Sanyo Electric Co., Ltd.

Senior Advisor to The Dai-ichi Mutual Life
Insurance Company
Partner and Attorney at Law, Nakamura,Tsunoda & Matsumoto Law Offices
Professor, Faculty of Commerce, Chuo
University

Notes:
1. Directors Nobuo Yamaguchi, Yukio Okamoto and Tomoyo Nonaka are outside directors as definedin Item 15, Article 2 of the Corporation Law.
2. Statutory Auditors Takahide Sakurai, Naoto Nakamura and Tadashi Ishizaki are outside statutory
auditors as defined in Item 16, Article 2 of the Corporation Law.
3. Statutory Auditor Sugao Nishikawa was formerly a Director in charge of finance of the Company
and he has considerable expertise in finance and accounting.
4. Statutory Auditor Naoto Nakamura who is an attorney at law is jurisprudent, among others, tocorporate legal affairs; he also has expertise in finance and accounting.
5. Statutory Auditor Tadashi Ishizaki has carried out research on accounting for many years as auniversity professor; he has expertise in finance and accounting.
6. In addition to the foregoing, important concurrent positions held by Directors and Statutory
Auditors are as follows.

Directors
Name

Companies and other organizations in which
Directors hold concurrent positions
New Otani Co., Ltd

Specific concurrent
position
Director

Akira Ohara

Tingyi-Asahi-Itochu Beverages Holding Co.,Ltd.

Director

Masatoshi Takahashi

Asahi Soft Drinks Co., Ltd.

Director

Yoshifumi Nishino

Asahi Food & Healthcare, Ltd.
Wakodo Co., Ltd.

Director
Statutory Auditor

Hikaru Kawamura

The Nikka Whisky Distilling Co., Ltd.

Director

Kazuo Motoyama

Asahi Logistics, Ltd.
Asahi Soft Drinks Co., Ltd.
Asahi Food & Healthcare, Ltd.
Wakodo Co., Ltd.
Haitai Beverage Co., Ltd.
Nippon Television Network Corp.
The Yomiuri Shimbun Holdings
Mitsubishi Materials Corporation
MITSUBISHI MOTORS CORPORATIONTOM FACTORY Co., Ltd.

Director
Statutory Auditor
Statutory Auditor
Statutory Auditor
Senior Officer
Director
Statutory Auditor
Director
Statutory Auditor
Director

Kouichi Ikeda

Nobuo Yamaguchi
Yukio Okamoto
Tomoyo Nonaka

23

Statutory Auditors
Name
Sugao Nishikawa

Hiroshi Fujita
Takahide Sakurai

Naoto Nakamura

Companies and other organizations in which
Statutory Auditors hold concurrent positions
Asahi Soft Drinks Co., Ltd.
Asahi Food & Healthcare, Ltd.
Wakodo Co., Ltd.
The Nikka Whisky Distilling Co., Ltd.
Imperial Hotel, Ltd.
Seven Bank, Ltd.
Tokyu Corp.
Yokogawa Electric Corp.
Eisai Co., Ltd.
Mitsui & Co., Ltd.

Specific concurrent
position
Statutory Auditor
Statutory Auditor
Statutory Auditor
Statutory Auditor
Director
Director
Statutory Auditor
Statutory Auditor
Director
Statutory Auditor

B. Remuneration Paid to Directors and Statutory Auditors
Category

Number of persons
remunerated

Total amount of
remuneration paid(yen)

Directors[of which Outside Directors]
Statutory Auditors[of which Outside Statutory
Auditors]

12
[3]
5
[3]

306,220,000[ 29,700,000 ]
73,145,000[ 23,190,000 ]Notes:
1. Remuneration above includes the following amounts, which is subject to approval at the 83rd
Annual Shareholders’ Meeting on March 27, 2007 (under a proposal to shareholders entitled“Revision of Amount of Remuneration for Directors and Statutory Auditors”): ¥45,400,000 inbonuses for Directors (including ¥3,900,000 in bonuses for three (3) Outside Directors); and¥3,800,000 in bonuses for Statutory Auditors (including ¥1,500,000 in bonuses for three (3)Outside Statutory Auditors).
2. In addition to the amounts of remuneration cited above, the Company plans to pay following
retirement compensation to retiring Directors and Statutory Auditors subject to approval at the83rd Annual Shareholders’ Meeting on March 27, 2007 (under a proposal to shareholders entitled“Payments of Retirement Bonuses to Retiring Directors and Retiring Statutory Auditor, and Final
Payments Marking the Termination of the System of Retirement Bonuses for Directors andStatutory Auditors”) : ¥77,000,000 for four (4) retiring Directors (including ¥11,400,000 for an
Outside Director); ¥20,300,000 for a retiring Statutory Auditor; and ¥166,500,000 for eight (8)Directors in office as at the closing of the fiscal year under review (excluding those retiring
Directors cited above) and inclusive of ¥34,500,000 for two (2) Outside Directors: and¥48,000,000 for four (4) Statutory Auditors in office as at the closing of the fiscal year underreview (excluding the retiring Statutory Auditor cited above) and inclusive of ¥33,000,000 for
three (3) Outside Statutory Auditors.
3. Total amount of Directors’ remuneration is limited to ¥30 million per month by a resolution
passed at the 76th Annual Shareholders’ Meeting held on March 30, 2000.
4. Total amount of Statutory Auditors’ remuneration is limited to ¥7 million per month by aresolution passed at the 65th Annual Shareholders’ Meeting held on March 27, 1989.

24

C. Outside Directors and Outside Statutory Auditors•

Concurrent positions held by Outside Directors (as for persons who are involved in
execution of operations of other companies or who are outside directors or outside
statutory auditors of other companies)

Name
Nobuo Yamaguchi

Yukio Okamoto

Tomoyo Nonaka

Companies at which concurrent positions are held and the positions held
Chairman of the Board and Representative Director of Asahi Kasei Corporation
Outside Director of Nippon Television Network Corp.
Outside Statutory Auditor of The Yomiuri Shimbun Holdings
President and CEO of Okamoto Associates, Inc.
General Partner of Pacifica Neo Ventures LLC
Outside Director of Mitsubishi Materials Corporation
Outside Statutory Auditor of MITSUBISHI MOTORS CORPORATION
Chairman and CEO of Sanyo Electric Co., Ltd.

Notes:
1. Director Nobuo Yamaguchi is Chairman of the Board and Representative Director of Asahi Kasei
Corporation. Although Asahi Kasei is a major shareholder of the Company, it does not have asignificant commercial relationship with the Company.
2. Director Yukio Okamoto is President and CEO of Okamoto Associates, Inc., which does not havea significant commercial relationship with the Company. Further, Mr. Okamoto is a General
Partner of Pacifica Neo Ventures LLC, which manages Pacifica Fund I, L.P., in which theCompany has certain investments.
3. Director Tomoyo Nonaka is Chairman and CEO of Sanyo Electric Co., Ltd. Sanyo Electric does
not have a significant commercial relationship with the Company.
•

Concurrent positions held by Outside Statutory Auditors (as for persons who are involvedin execution of operations of other companies or who are outside directors or outside
statutory auditors at other companies)

Name
Takahide Sakurai

Naoto Nakamura

Companies at which concurrent positions are held and the positions held
Outside Director of Imperial Hotel, Ltd.
Outside Director of Seven Bank, Ltd.
Outside Statutory Auditor of Tokyu Corp.
Outside Statutory Auditor of Yokogawa Electric Corp.
Outside Director of Eisai Co., Ltd.
Outside Statutory Auditor of Mitsui & Co., Ltd.

25

•

Major activities of Outside Directors and Outside Statutory Auditors
Name

Position

Major activities

Nobuo Yamaguchi

Outside Director

Participated in 9 of the 14 Board of Directors
meetings held during the fiscal year under review;
when necessary, he made statements mainly fromthe perspective of his long and successful career inmanagement.

Yukio Okamoto

Outside Director

Participated in 10 of the 14 Board of Directors
meetings held during the fiscal year under review;
when necessary, he made statements mainly fromthe perspective of his high degree of knowledge
and varied experience as an expert in diplomaticand international affairs.

Tomoyo Nonaka

Outside Director

Participated in 11 of the 14 Board of Directors
meetings held during the fiscal year under review;
when necessary, she made statements mainlyreflecting her highly original ways of looking atthings based on her experience as a journalist; andalso from the perspective of her experience ofcorporate management.

Takahide Sakurai

Outside Statutory
Auditor

Participated in 9 of the 14 Board of Directors
meetings, and in 6 of the 8 Board of Statutory
Auditors meetings, held during the fiscal year underreview; when necessary, he made statements
mainly from the perspective of his long andsuccessful career in management.

Naoto Nakamura

Outside Statutory
Auditor

Participated in 11 of the 14 Board of Directors
meetings, and in 6 of the 8 Board of Statutory
Auditors meetings, held during the fiscal year underreview; when necessary, he made statements
mainly from his expert perspective as an attorney atlaw.

Tadashi Ishizaki

Outside Statutory
Auditor

Participated in 12 of the 14 Board of Directors
meetings, and in all 8 of the Board of Statutory
Auditors meetings, held during the fiscal year underreview; when necessary, he made statements
mainly from his expert perspective as a scholar ofaccounting.

26

(4) Independent auditor
A. Name of the Independent Auditor
AZSA & CO.
B. Compensation paid to independent auditor for the fiscal year under review
Amount payable
Compensation paid for the fiscal year under review¥84 million

Total of cash and other financial profits payable by the Company andits subsidiaries to the independent auditor¥198 million

Note: All subsidiaries which are subject to statutory audit by an independent auditor have been audited by
AZSA & Co.

C. Nature of provided non-audit professional services provided by the Independent
Auditor
The Company also assigns to its independent auditor professional duties
including “financial due diligence advisory works” and “advice on construction ofinternal control system in financial reporting” which are not statutory auditing duties
stipulated in Paragraph 1, Article 2 of the Certified Public Accountants Law.
D. Company Policy regarding dismissal or decision not to reappoint theindependent auditor
Article 340 of the Corporation Law stipulates that the Board of Statutory Auditors
shall be entitled to dismiss the independent auditor for reasons stipulated therein. In
addition, when it is reasonably recognized that the independent auditor is no longer able
to execute its duties in an appropriate manner, the Company, subject to prior consent of,or request from, the Board of Statutory Auditors, will offer a resolution to the
Shareholders’ Meeting to the effect of dismissal of, or a decision not to reappoint, theindependent auditor.
3. Systems to assure appropriate execution of Directors’ duties in conformity withlaws and regulations and the Articles of Incorporation; and others systems toassure appropriate business operations
The Board of Directors made the following resolution with respect to the systems:
The Company has adopted the corporate philosophy: “The Asahi BreweriesGroup aims to satisfy its customers with the highest levels of quality and integrity, while
contributing to the promotion of healthy living and enrichment of the society
worldwide.” To make these aims a reality, the Company shall:•

Establish, in accordance with the Corporation Law and the Enforcement
Regulations of the Corporation Law, the following basic policies (the “Basic
27

Policies”) to improve systems designed to ensure appropriate business operationsof the Company and its subsidiaries (the “Group Companies” and the Company
and the Group Companies collectively, “Asahi Breweries Group”) (the “Internal
Control”);•

The Representative Director(s) shall assume the ultimate responsibility for
improvement of the Internal Control in accordance with this resolution and shallcause Directors and Executive Officers in charge of each operational area develop
and fully enforce required individual internal regulations and manuals based on the
Basic Policies; and•Take steps to maintain and enhance the effectiveness of the Internal Control byreviewing the Basic Policies and relevant internal regulations and manuals, etc. ina timely manner in accordance with changes in conditions and circumstances.

<System to ensure execution of duties by Directors and employees in conformity withlaws and regulations and the Articles of Incorporation of the Company>A.

In accordance with a statement of “fair and transparent corporate ethics” stipulated
in its corporate action guidelines, the Company shall establish the “Regulations on
Corporate Ethics for the Asahi Breweries Group” and procure its Directors,
Statutory Auditors and employees abide by these regulations.

B.

The Company shall establish the “Corporate Ethics Committee for the Asahi
Breweries Group,” which will oversee the compliance affairs of the Asahi
Breweries Group. One of the committee’s members shall be an outside
attorney-at-law.

C.

An Executive Officer of the Company in charge of compliance shall have theauthority to manage compliance-related risks within the Asahi Breweries Group.
The Legal and General Affairs Department shall handle the day-to-day tasks of
implementation of the compliance program.

D.

The Company shall assign one person as compliance-promotion personnel in eachof all the business establishments of the Company and the Group Companies tooversee the promotion of compliance in each business establishment. In
conjunction with the Company’s Legal Section and the General Affairs Department
at each business establishment or the Group Company, all compliance-promotion
personnel shall endeavor to disseminate legal knowledge and to heighten a generalawareness of importance of compliance in each business establishment.

E.

The Company shall establish a “Clean Line System” for employees of the Asahi
Breweries Group, enabling them to blow the whistle on illicit behaviors of others
28

to a specific section of the Company or a designated legal counsel.
F.

The Company shall establish a “Basic Policy on Procurement” addressing mutual
cooperation for fair deals between and social responsibilities of the Company andsuppliers and a “Clean Line System for Suppliers” enabling suppliers to blow awhistle on illicit behaviors of employees of the Company to a specific section of
the Company. The Company shall inform and spell out these measures to its
suppliers in a bid to enable the Company to improve and develop the system of theInternal Control in cooperation with its suppliers.

G.

The operational details of the aforementioned agencies and systems shall bespelled out under a separately prepared set of internal regulations entitled “Basic
Regulations on Corporate Ethics of the Asahi Breweries Group.”< System to ensure the preservation and management of information related to
execution of duties by Directors>
A.

Information related to execution of duties by Directors shall be properly preserved
and managed in accordance with document-management regulations and otherrelated regulations and manuals.

B.

The aforementioned information shall be preserved and managed in a way
accessible by Directors and Statutory Auditors for inspection at any time.

C.

Jurisdiction over the clerical tasks related to preservation and management of theforegoing information shall be determined by regulations at respective
establishments.

<Regulations and other organizational structures related to risk management>
A.

The Company shall develop and adopt basic regulations related to risk
management and shall affirm such regulations as the highest standards governing
risk management within the Asahi Breweries Group. It shall also develop andadopt an operational manual on risk management and prevail the same among allover the Group.

B.

In addition to having the appropriate departments manage risk in their respective
areas, the Company shall establish the “Asahi Breweries Group Risk Management
Committee” as a vehicle for comprehensive risk management across the entire
Asahi Breweries Group. This committee shall periodically analyze and evaluate
risk in accordance with the regulations and manuals cited in the previous
paragraphs and, when necessary, carry out comprehensive reviews of the risk
management system. An utmost attention shall be paid to the risk of failing tomaintain product quality. As a food manufacturer, the Company recognizes its
social responsibility to consumers to ensure safety of its products.
29

C.

In the event of any major accident, disaster or scandal, the Company shall establish
a crisis response group which will be chaired by a Representative Director.

<System to ensure efficient execution of duties by Directors>
A.

To ensure efficient performance of duties by Directors, the Board of Directors shalldivide duties in a reasonable way to be delegated to different Directors and shallappoint appropriate persons as Executive Officers in charge of different divisions.

B.

The Company shall establish standards on authority stipulating rules of delegationof power and for a mutual checks-and-balances mechanism among different
divisions.

C.

The Company shall ensure effective utilization of the system of the Management
Strategy Meeting and the Management Meeting.

D.

To maximize operational efficiency, the Company shall utilize indices that provide
an objective and rational way of measuring its management and control ofoperations; and it shall employ a unified system of follow-up and evaluation.

<System to ensure appropriate operations of the corporate group consisting of theCompany and its parent (if any) and its subsidiaries>
A.

All systems required for the Internal Control, including those for compliance andrisk management, shall apply comprehensively across the entire Asahi BreweriesGroup. As the corporate headquarters of the Group, the Company shall manage andoperate the said systems of the Group Companies in accordance with theconditions and circumstances individual companies are facing.

B.

The Company’s Internal Auditing Division shall conduct audits of the Group
Companies.

C.

Each of the Group Companies shall be required to provide reports on performanceof its operations including risk-related information, to the Statutory Auditors of theCompany.

D.

Decision-making authority related to business activities of the Group Companies
shall be subject to the document entitled “Standards of Authority for Group
Companies.”<Securement of employees in the event that Statutory Auditors request staff to assist
in their auditing duties>
The Board of the Statutory Auditors shall retain staff from among employees of
the Company, for assistance in the day-to-day activities of the Statutory Auditors.

30

<Independence of the employees assigned to assist the Statutory Auditors from the
Directors >A.

When a member of the staff of the Board of Statutory Auditors, as stipulated in theprevious paragraph, receives an order from a Statutory Auditor in relation toauditing duties, he/she shall not be subject to directives or orders from Directors orother employees regarding that order.

B.

Any issuance of orders to, personnel transfers of, merit evaluations of, or
reprimands of a member of the staff of the Board of Statutory Auditors shallrequire the prior concurrence of Statutory Auditors.

<System for Directors’ and employees’ reporting to Statutory Auditors; system relating
to other reporting to Statutory Auditors>
A.

Directors and employees shall report regularly to Statutory Auditors on mattersrelating to the Internal Control, and shall report on an as-needed basis when asignificant event occurs. When necessary, Statutory Auditors shall be entitled torequest reports from Directors and employees (including from Directors andemployees of the Group Companies).

B.

Directors shall ensure that Statutory Auditors have every opportunity to participate
in the Board of Directors meetings, the Management Strategy Meetings and theManagement Meetings. Directors shall provide details of the agenda items of suchmeetings beforehand to Statutory Auditors.

C.

Statutory Auditors shall at all times have the right to review the minutes ofimportant meetings, documents of approval, etc.

<Other systems ensuring effective auditing by Statutory Auditors>
To ensure the effectiveness of auditing activities, Directors shall ensure
opportunities for Statutory Auditors to exchange information and opinions regularly
with members of the Internal Auditing Division of the Company and with members of
the team of the Independent Auditors.

31

NON-CONSOLIDATED BALANCE SHEETSAs of December 31, 2006
Million yen
ASSETS
Current assets:
Cash and deposits
Notes receivable
Accounts receivable
Merchandise and finished goods
Semi-finished goods
Raw materials
Supplies
Short-term loans receivable
Prepaid expenses
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets¥

Fixed assets:
Tangible fixed assets:
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Construction in progress

2,575
4,984
202,863
11,5189,234
12,002
4,893
16,436
7,562
6,756
5,256
(7,105)276,980

142,40920,758147,06544
45,863133,024
6,562
495,729

Intangible fixed assets:
Rights to use facilities
Software
Other intangible fixed assets

757
7,240
13
8,010

Investments and other assets:
Investment securities
Shares in affiliates
Capital invested in affiliates
Long-term loans receivable
Deferred tax assets
Other investments
Allowance for doubtful accounts

75,553
123,181
3,986
9,480
5,573
24,555(8,173)
234,157
737,898¥1,014,878

Total fixed assets
Total assets

32

NON-CONSOLIDATED BALANCE SHEETSAs of December 31, 2006
Million yen
LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent liabilities:
Notes payable
Trade accounts payable
Short-term borrowings
Bonds due within one year
Other accounts payable
Alcohol tax payable
Consumption and similar taxes payable
Income taxes payable
Accrued expenses
Deposits received
Commercial paper
Allowance for employees’ bonuses
Allowance for directors’ and statutory auditors’ bonuses
Other current liabilities
Total current liabilities

40
55,35572,50040,00016,440123,276
6,957
25,20835,70439,388
3,000
1,265
49
90
419,277

Long-term liabilities:
Bonds
Long-term borrowings
Long-term deposits payable
Allowance for employees’ severance and retirement benefits
Allowance for retirement benefits for directors and statutory auditors
Other long-term liabilities
Total long-term liabilities
Total liabilities

55,00049,12535,1636,684
310
47
146,330
565,608

NET ASSETS:
Shareholders’ equity
Common stock
Capital surplus
Capital reserve
Other capital surpluses
Retained earnings
Other retained earnings
Reserve for reduction in entry of fixed assets
General reserve
Retained earnings carried forward
Treasury stock
Total shareholders’ equity

182,531
159,513130,292
29,221
109,691
109,691
1,431
65,00043,260(16,946)434,790

Valuation and translation adjustments
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

14,508(28)

Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

14,480449,270
1,014,878

33

NON-CONSOLIDATED STATEMENTS OF INCOME
For the year ended December 31, 2006
Million yen
1,031,060
729,338
301,722
223,125
78,596

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income:Interest and dividend income
Other non-operating revenues

1,843
554
2,397

Non-operating expenses:
Interest expenses
Other non-operating expenses
Recurring profit
Extraordinary gain:
Gain on sale of fixed assets
Gain on sale of investment securities
Reversal of allowance for doubtful accounts
Extraordinary loss:
Loss on sale and disposition of fixed assets
Loss on sale of investment securities
Loss on devaluation of investment securities
Loss on sale of investment in affiliates
Loss on devaluation of investment in affiliates
Loss on devaluation of equity participation in affiliates
Loss on liquidation of affiliates
Loss on amortization of merged company shares
Impairment loss on fixed assets
Income before income taxes
Income taxes:
Current
Deferred

2,475
2,210
4,686
76,307
1,991
72
1,416
3,480
5,454
99
52
91
445
534
435
422
3,238
10,77469,01330,659(547)
30,111
38,902

Net income

34

NON-CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITYAs of December 31, 2006
Shareholders' equity
Retained earnings
Other retained earnings

Capital surplus

Reserve for
reduction in
Capital Other capital Total capitalentry ofreserve
surplussurplus fixed assets
130,292
42,425
172,718
2,402

Retainedearnings
carriedforward37,043Total
retainedearnings
79,445

Total
Treasury shareholders'stockequity(17,317)417,378(8,607)(8,607)(8,607)

Payments ofdirectors’ andstatutory auditors’
bonuses

(49)

(49)

(49)

Net income (loss)

38,90238,902Millions of yen
Balance as of Dec 31,
2005

CommonStock
182,531

Generalreserve
40,000Changes during theterm
Dividends

Acquisition oftreasury stock
Retirement oftreasury stock
Disposal of treasury
stock

38,902(13,067)(13,067)(13,147)(13,147)

13,147

-

(57)

(57)

291

233

Reversal of reserve
for reduction in entryof fixed assets (forthe year to December
2005)

(200)

200

-

-

Reversal of reserve
for reduction in entryof fixed assets (forthe year underreview)

(770)

770

-

-

25,000(25,000)--

Increase (decrease)in general reserves
Other changes in
non-shareholders'equity items during
the term (net)Total changes during
the term
Balance as of Dec 31,
2006

182,531130,292(13,204)(13,204)(970)

25,0006,216

30,245370

17,411

29,221

159,513

1,431

65,00043,260109,691(16,946)434,79035

Valuation and translation adjustments

Millions of yen
Balance as of Dec 31,
2005

Valuationdifference on
availableforsale
securities
16,310Total
valuation
Deferred
gains orandlosses on translation
hedges adjustments-

16,310Total net
assets433,689

Changes during theterm
Dividends(8,607)

Payments ofdirectors’ andstatutory auditors’
bonuses(49)

Net income (loss)

38,902Acquisition oftreasury stock(13,067)

Retirement oftreasury stock-

Disposal of treasury
stock

233

Reversal of reserve
for reduction in entryof fixed assets (forthe year to December
2005)

-

Reversal of reserve
for reduction in entryof fixed assets (forthe year underreview)-

Increase (decrease)in general reserves-

Other changes in
non-shareholders'equity items during
the term (net)(1,802)(28)(1,830)(1,830)Total changes during
the term(1,802)(28)(1,830)15,581

Balance as of Dec 31,
2006

14,508(28)

14,480449,27036

NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS

1. Notes on Significant Accounting Policies(1) Valuation basis and method for securities
Investment in affiliates:
Stated at cost based on the moving-average method.
Other securities with market value
Carried at the average market value for the month immediately preceding the balance
sheet date (valuation differences are all debited or credited directly to the net assets
section, with the cost of securities sold computed by the moving average method).
Securities without market value
Stated at cost based on the moving-average method.
(2) Valuation basis and method for derivatives
Market price method(3) Valuation basis and method for inventories:
Merchandise, finished goods and semi-finished goods are stated at cost determined by theweighted average method. Raw materials and supplies are stated at cost determined by themoving-average method.
(4) Depreciation method for fixed assets:
Tangible fixed assets:
Depreciation is provided by the straight-line method with respect to production facilities
and by the declining-balance method with respect to the other tangible assets. Buildings(excluding of fixtures) acquired on or after April 1, 1998, however, are calculated using
the straight-line method. The estimated useful life and the residual value of the fixed
assets are based on the same standards as specified in the Corporation Tax Law.
Intangible fixed assets:
Intangible fixed assets are calculated using the straight-line method. The estimateduseful life of the assets is based on the same standards as specified in the Corporation
Tax Law. Software for internal use, however, is amortized by the straight-line methodin the useful period of five years.

37(5) Accounting criteria for allowances:
Allowance for doubtful accounts:
Allowance for doubtful accounts consists of the estimated uncollectible amounts withrespect to certain identified doubtful receivables and an amount calculated using the rateof actual collection losses with respect to the other receivables.
Allowance for employees’ severance and retirement benefits:
The Company makes provisions for the necessary amount of allowance for employees’
severance and retirement benefits deemed to have accrued during the term, based on the
Company’s projected benefit obligation and the balance of pension fund as of the end of
the fiscal year under review. Actuarial gain or loss is amortized, from the year following
the year in which the gain or loss is recognized, by the straight-line method for a given
number of years (10 years) within employees’ average remaining years of service.
Prior service cost is amortized by the straight-line method over 10 years within the
average remaining years of service of employees from the time it arises.
Allowance for employees’ bonuses:
Allowance for employees’ bonuses is provided at an estimated amount applicable to thefiscal year under review.
Allowance for Directors’ and Statutory Auditors’ bonuses:
Allowance for Directors’ and Statutory Auditors’ bonuses is provided at an estimatedamount applicable to the fiscal year under review.
Allowance for retirement benefits for Directors and Statutory Auditors:
The Company calculates the required amount, based on internal regulations, in
preparation for payment of a retirement allowance for Directors and Statutory Auditors
applicable to the fiscal year under review.
(6) Lease contracts:
Finance leases other than those in which ownership of the leased property is deemed to betransferred to the lessee are accounted for in the manner as followed in operational leasetransactions.
(7) Accounting for hedging
A. Accounting for hedging
The Company defers gains or losses on its hedges. For interest rate swaps, it applies an
exceptional treatment when the swap in question meets the conditions for application ofsuch an exceptional treatment.
B. Hedging instruments and risks being hedged:
Hedging instruments:

Interest rate swap

Risks being hedged:

Interest on borrowings
38

C. Hedging policy:
Derivative transactions are used to avoid risks associated with fluctuations in foreignexchange markets and in interest rates and to reduce the costs of financing. The Company
has a policy not to engage in speculative transactions which are deviated from real demandor in highly leveraged transactions.
D. Method of evaluating the effectiveness of hedging:
The Company assesses the effectiveness of its hedges by comparing changes in the market
values of the hedged items and of the hedging instruments over the entire period of thehedge. When the Company allocates differences in the value of hedging instruments orwhen it accounts for the value of swaps under special exceptions, these determinations
allow it to forgo evaluations of the effectiveness of hedges in those cases.
(8) Consumption tax and similar taxes:
Consumption tax and similar taxes are excluded from the statement of income, except
nondeductible consumption tax related to fixed assets that are charged when incurred.
(Changes in accounting treatment)(1) Accounting standard for impairment of fixed assets
As from the fiscal year under review, the Company began applying the “AccountingStandard for Impairment of Fixed Assets” {as set under the “Opinion Concerning
Establishment of Accounting Standard for Impairment of Fixed Assets” (BusinessAccounting Deliberation Council, August 9, 2002)} and the “Implementation Guidance for
Accounting Standards for Impairment of Fixed Assets” (Accounting Standards Board ofJapan, October 31, 2003; ASB Guidance No. 6). This change resulted in a decrease in net
income before taxes of ¥3,238 million.
Accumulated impairment losses were deducted directly from the value of the respective
assets concerned.
(2) Accounting standard for Directors’ and Statutory Auditors’ bonuses
As from the fiscal year under review, the Company began applying the “AccountingStandard for Directors’ and Statutory Auditors’ Bonuses” (Accounting Standards Board ofJapan, November 29, 2005; ASB Accounting Standard No. 4). This change resulted in only
an insignificant impact on earnings.
(3) Accounting standard for retirement benefits
As from the fiscal year under review, the Company began applying the “Amendment of
Accounting Standards for Retirement Benefits” (Accounting Standards Board of Japan,
March 16, 2005; ASB Accounting Standard No. 3) and the “Implementation Guidance forAmendment of Accounting Standards for Retirement Benefits” (Accounting Standards
39

Board of Japan, March 16, 2005; ASB Guidance No. 7). This change resulted in only an
insignificant impact on earnings.
(4) Accounting standard for presentation of net assets on the non-consolidated balance
sheets
As from the fiscal year under review, the Company began applying the “AccountingStandard for Presentation of Net Assets on the Balance Sheet” (Accounting Standards
Board of Japan, December 9, 2005; ASB Accounting Standard No. 5) and “Implementation
Guidance for Accounting Standard for Presentation of Net Assets on the Balance Sheet”(Accounting Standards Board of Japan, December 9, 2005; ASB Guidance No. 8). Thischange resulted in no impact on earnings. Total shareholders’ equity under the previous
standard would have been ¥449,298 million.

2. Notes to Non-Consolidated Balance Sheets(1) Pledged assets and secured liabilities
The following assets have been provided as collateral for ¥3,625 million in long-termborrowings:
Land:¥13,332 million(2) Accumulated depreciation on tangible fixed assets:¥453,038 million(3) Contingent liabilities
A. Guarantees, etc., against bank borrowings
Guarantees:¥33,061 million

Guarantee commitments:¥20 million

Comfort letters, etc.:¥1,203 million

B. Guarantees, etc., against derivatives
Guarantees:
Contract amount, etc.:¥6,000 million

Unrealized gain (loss):¥1 million

Comfort letters, etc.:
Contract amount, etc.:¥3,000 million

Unrealized gain (loss):¥(173) million(4) Matured notes at term-end
The Balance Sheet date for the term fell on a bank holiday and trade notes with maturity on
the Balance Sheet date were cleared on the next business day of the clearing houses. Thus
current assets and current liabilities include respectively trade notes receivable and tradenotes payable with maturity on the Balance Sheet date as follows:
Notes receivable:¥58 million

Notes payable:¥15 million40(5) Monetary claims and obligations with affiliates
Short-term monetary claims on affiliates:¥24,009 million

Long-term monetary claims on affiliates:¥7,049 million

Short-term monetary obligations to affiliates:¥21,644 million

Long-term monetary obligations to affiliates:¥138 million

3. Notes to Non-Consolidated Statements of Income(1) Transactions with affiliates:
Net sales:¥44,260 million

Purchases:¥89,493 million

Selling, general and administrative expenses:¥39,757 million

Transactions other than operating transactions:¥749 million(2) Impairment losses
In the fiscal year under review, the Company recognized impairment losses in the following
asset groups:
Use of Asset

Leased asset
Idle asset

Location of Asset

Sumida-ku, Tokyo and other
Akitakada, Hiroshima

Type of Asset

Land, Buildings and structuresLand

The Company in principle divides its assets by individual breweries and other operational[business establishments][locations] and determines their groupings on complementary
relations of cash flows among different assets. On the other hand, it counts as a stand-alone
asset group each of individual leased assets and idle assets. The Company’s headquarters
building and employee welfare facilities are categorized as common-use assets, as they do
not generate cash flow themselves.
At current market prices, the leased assets cited in the table above have lost a substantial
part of their respective book values and the likelihood of recovering the investment is
projected small. In addition, the market value of the idle asset cited in the table above has
also declined substantially compared to its book value and the likelihood of future
utilization thereof is completely uncertain. Consequently, the Company has written down
the book values of these assets to amounts it believes are recoverable. These write-offs haveresulted in impairment losses (¥3,238 million, of which the loss on land amounted to ¥2,853
million, and the loss on buildings and structures amounted to ¥384 million), which theCompany has recognized as extraordinary losses.
The Company arrived at the recoverable values of these respective assets by estimating net
sales amounts or value of use. The former was based primarily on an appraisal by a realestate appraiser in accordance with the Standards for Real Estate Appraisal; the latter was
calculated by future projected cash flow discounted by 4.3%.
41

4. Notes related to statement of changes in shareholders’ equity
Treasury stock
Type of stock

Balance as of the end of

Increase

Decrease

Balance as of the end of

the fiscal year (Dec. 31,

the fiscal year under2005)

review (Dec. 31, 2006)

15,494,757

7,646,104

10,252,461

12,888,400

Common Shares(Reasons for change)
The increase in shares was the result of the following:
Increase resulting from purchases of shares of less than one voting unit fromshareholders of such shares responding to their demand:
Increase resulting from purchases of treasury stock:41,604 shares
7,604,500 shares

The decrease in shares was the result of the following:
Decrease resulting from sales of shares of less than one voting unit to shareholders ofshares of less than one voting unit to make their fractional shares a voting unit
responding to their demand:
2,561 shares
Decrease resulting from exercise of stock options:249,900 shares
Decrease resulting from retirement of treasury stock:
10,000,000 shares

5. Tax Effect Accounting(1) Deferred tax assets and liabilities(Deferred tax assets)
Allowance for doubtful accounts, in excess of tax-deductible amount:¥5,006 million
Allowance for employees’ bonuses, non-tax deductible:¥488 million
Allowance for severance and retirement benefits, in excess of tax-deductible amount:¥9,283 million
Loss on devaluation of investment in affiliates, non-tax deductible:¥7,060 million
Loss on devaluation of land, non-tax deductible:¥229 million
Depreciation, in excess of tax-deductible amount:¥389 million
Loss on establishment of retirement benefit trust, non-tax deductible:¥1,470 million
Loss on devaluation of investment securities, non-tax deductible:¥4,337 million
Loss on devaluation of capital contributions for affiliates, non-tax deductible: ¥2,790 million
Amortization of deferred charges, in excess of tax-deductible amount:¥212 million
Losses from the liquidation of affiliates:¥1,082 million
Disapproval of unpaid enterprise taxes:¥1,938 million
Impairment losses:¥1,301 million
Estimated cost of removal of fixed assets, non-tax deductible:¥544 million
Others:¥1,914 million¥38,050 million
Valuation allowance:¥(14,920) million¥23,130 million
Total deferred tax assets:42

(Deferred tax liabilities)
Reserve for reduction in entry of fixed assets:¥(969) million

Other valuation difference on marketable securities:¥(9,830) million

Total deferred tax liabilities:¥(10,800) million

Net deferred tax assets:¥12,330 million(2) Effective tax rates before and after application of tax effect accounting
Statutory effective tax rates:

40.4%(Adjustment)
Permanent difference (non-deductible), including entertainment expenses:

2.2%

Valuation allowance:

1.7%

Permanent difference (non-taxable), including dividend income:(0.3)%Tax credit:(1.0)%

Others:0.6%

Effective tax rates after application of tax effect accounting:

43.6%

6. Notes related to leased fixed assets(1) As of the end of the fiscal year under review
Amount equivalent to acquisition costs:¥34,732 million(2) As of the end of the fiscal year under review
Amount equivalent to accumulated depreciation:¥17,218 million(3) As of the end of the fiscal year under review
Amount equivalent to prepaid lease rents:¥18,036 million

7. Per share information(1) Net assets per share:¥954.48(2) Net income per share:¥81.698. Other notes
Figures of less than one million yen are omitted.

43

INDEPENDENT AUDITOR’S REPORT
January 31, 2007
To: The Board of Directors
Asahi Breweries, Ltd.
AZSA & Co.
Hikoyuki Miwa (Seal)
Designated and Engagement Partner
Certified Public Accountant
Tatsunaga Fumikura (Seal)
Designated and Engagement Partner
Certified Public Accountant
Yasuyuki Nagasaki (Seal)
Designated and Engagement Partner
Certified Public Accountant
In accordance with the provision of Item 1, Paragraph 2, Article 436 of the Corporation
Law, we have audited the financial statements of Asahi Breweries, Ltd. (the “Company”) for its
83rd fiscal year, which ran from January 1, 2006 to December 31, 2006. These statements
consist of the non-consolidated balance sheets, the non-consolidated statements of income, thenon-consolidated statement of changes in shareholders’ equity, notes on significant accounting
policies, and the supporting schedules thereto. These financial statements and supporting
schedules thereto are the responsibility of the Company’s management. Our responsibility is toexpress an opinion on these financial statements and supporting schedules thereto based on our
audit as Independent Auditor.
We conducted our audit in accordance with generally accepted auditing standards in Japan.
Those auditing standards require that we obtain reasonable assurance about whether thefinancial statements and supporting schedules thereto are free of material misstatement. An
audit includes, examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, and assessing the accounting principles used, the methods ofapplication thereof, and estimates made by management, as well as evaluating the overall
presentation of the financial statements and supporting schedules thereto. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the foregoing financial statements and supporting schedules thereto present
fairly, in all material aspects, the financial position and results of operation of the Company forthe period covered by the aforesaid financial statements and supporting schedules thereto in
conformity with generally accepted accounting principles in Japan.
Postscript:
As reported in the notes on significant accounting policies, from the fiscal year underreview the Company began applying accounting standards related to impairment of fixed assets.
Consequently, the financial statements and supporting schedules thereto have been prepared inaccordance with these standards.
Our firm and our engagement partners have no interests in the Company required to bedisclosed pursuant to the relevant provisions of the Certified Public Accountants Law of Japan.

44

REPORT OF THE BOARD OF STATUTORY AUDITORSThe Board of Statutory Auditors has prepared the following report related to the executionof duties by Directors for the 83rd fiscal year, which ran from January 1, 2006 to December 31,
2006. The report was prepared on the basis of audit reports prepared by individual Statutory
Auditors and represents a unanimous opinion of all the Statutory Auditors after due discussions
and consultations among them.
1. Methods used in audits by the individual Statutory Auditors and by the Board of
Statutory Auditors; content of audits
The Board of Statutory Auditors established auditing policies and auditing plans for the
fiscal year under review and received reports from each of the Statutory Auditors on theexecution of his auditing activities andthe result thereof. In addition, it received reports on
business performance from Directors et al. and from the Independent Auditor, and, whennecessary, requested their explanations regarding such reports.
In accordance with the auditing standards for Statutory Auditors set by the Board of
Statutory Auditors, each of the Statutory Auditors communicated with Directors, the internal
auditing division of the Company, and employees, and endeavored to gather information andcreate an improved environment for auditing, in accordance with the auditing policies andauditing plans established for the year under review. Statutory Auditors also attended Board of
Director Meetings and other important meetings, received reports from Directors and theinternal auditing division of the Company on business performance, and, when necessary,requested their explanations regarding those reports. Statutory Auditors also inspected
documents related to important decisions and examined operations and assets at the Company’shead offices and major operational establishments. Statutory Auditors also monitored andexamined the systems established to ensure that the execution of duties by Directors shall be incompliance with laws and regulations and with the Company’s Articles of Incorporation, andmonitored and examined the systems established pursuant to Paragraphs 1 and 3, Article 100 of
the Enforcement Regulations of the Corporation Law to ensure that the Company’s operations
shall be conducted appropriately (internal control systems). With respect to subsidiaries,
Statutory Auditors took steps to facilitate communications with directors and statutory auditorsof subsidiaries and, when necessary, received reports from subsidiaries on the status of theirbusinesses. Using the foregoing methods, Statutory Auditors reviewed the Business Report andthe supporting schedules thereto for the fiscal year under review. In addition, Statutory Auditors
also monitored and examined whether the Independent Auditor maintains their independence
and carry out their audits in an appropriate manner. Statutory Auditors received reports from the
Independent Auditor on the execution of their duties and, when necessary, requested their
explanations regarding those reports. Statutory Auditors also received notification from the
Independent Auditor that they have taken steps to improve the “system for ensuring appropriate
execution of their duties” (as enumerated in Article 159 of the Company Accounting Regulation
Ordinance) in compliance with the “Quality Control Standards Relating to Auditing” (adopted
by the Business Accounting Deliberation Council on October 28, 2005). When necessary,
Statutory Auditors requested their explanations on these reports and notifications andconsequently confirmed that the system under which the Independent Auditor operates isappropriate. Based on the foregoing methods, Statutory Auditors reviewed the financial
statements for the fiscal year under review (balance sheets, statements of income, statement ofchanges in shareholders’ equity, and notes on significant accounting policies) and supporting
schedules thereto.

45

2. Result of the Audit(1) Result of audit of the Business Report•
In our opinion, the Business Report and the supporting schedules thereto fairly present
the situation of the Company, in compliance with the provisions of applicable laws andregulations and the Articles of Incorporation.
•
In our opinion, there are no wrongful acts or material violations of applicable laws andregulations or the Articles of Incorporation in execution of their duties by Directors.
•
In our opinion, the content of the resolution by the Board of Directors regarding internal
control systems is appropriate, and, furthermore, execution of the internal control
systems by Directors has been appropriate.
(2) Result of the audit of financial statements and the supporting schedules thereto
In our opinion, the auditing methods used by AZSA & Co., the Independent Auditor, andthe result of their audit is appropriate.
February 1, 2007
Board of Statutory Auditors
Asahi Breweries, Ltd.
Sugao Nishikawa (Seal)
Standing Statutory Auditor
Hiroshi Fujita (Seal)
Standing Statutory Auditor
Takahide Sakurai (Seal)
Statutory Auditor
Naoto Nakamura (Seal)
Statutory Auditor
Tadashi Ishizaki (Seal)
Statutory Auditor

46

CONSOLIDATED BALANCE SHEETSAs of December 31, 2006
Million yen
ASSETS
Current assets:
Cash and deposits
Notes and accounts receivable
Securities
Inventories
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets

15,873
278,139
5,320
92,344
9,688
36,684(9,099)428,951

Fixed assets:
Tangible fixed assets:
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Land
Construction in progress
Total tangible fixed assets

209,926
182,438
49,124
185,101
8,426
635,017

Intangible fixed assets:
Consolidation adjustment account
Other intangible fixed assets
Total intangible fixed assets

32,635
13,751
46,386

Investments and other assets:
Investment securities
Long-term loans receivable
Long-term prepaid expenses
Deferred tax assets
Other investments
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets

126,796
3,401
10,27519,85725,998(8,183)
178,145859,549

Total assets

1,288,501

47

CONSOLIDATED BALANCE SHEETSAs of December 31, 2006
Million yen
LIABILITIES, SHAREHOLDERS’ EQUITY
AND MINORITY INTEREST:
Current liabilities:
Notes and trade accounts payable
Short-term borrowings
Bonds due within one year
Alcohol tax payable
Consumption taxes payable
Income taxes payable
Other accounts payable
Accrued expenses
Deposits received
Commercial paper
Other current liabilities
Total current liabilities

106,592
102,658
40,000132,523
8,368
28,79649,47047,79037,627
3,000
4,090
560,918

Long-term liabilities:
Bonds
Long-term borrowings
Allowance for employees’ severance and retirement benefits
Allowance for retirement benefits for directors and statutory
auditors
Deferred tax liabilities
Other long-term liabilities
Total long-term liabilities
Total liabilities

48

55,00089,443
26,973844
5,166
40,379217,807778,726

As of December 31, 2006
Million yen
NET ASSETS:
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity

182,531
150,504
142,329(16,946)
458,418

Valuation and translation adjustments
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Valuation and translation adjustments

14,563(28)
3,753
18,289MINORITY INTERESTS

33,067

Total net assets
Total liabilities and net assets

509,774
1,288,501

49

CONSOLIDATED STATEMENTS OF INCOME
For the year ended December 31, 2006
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income:Interest income
Dividend income
Equity in net income of unconsolidated subsidiaries and affiliatedcompanies
Other non-operating income
Non-operating expenses:
Interest expenses
Allowance for doubtful accounts
Other non-operating expenses
Recurring profit
Extraordinary gain:
Gain on sale of fixed assets
Gain on sale of investment securities
Gain on reverse of allowance for doubtful accounts
Compensation for transfer of plant
Extraordinary loss:
Loss on sale and disposal of fixed assets
Retirement benefits for Directors and Statutory Auditors
Loss on sale of investment securities
Loss on devaluation of investment securities
Impairment loss on fixed assets
Loss on business reorganizations
Other

Million yen
1,446,385
950,144496,241
407,528
88,713
693
839
6,367
1,664
9,565
4,407
103
3,657
8,168
90,109
2,028
79
1,496
289
3,894
6,121
103
190
506
3,905
1,776
234
12,838
81,165

Income before income taxes
Income taxes:
Current
Deferred
Minority interests in net gain (loss) of unconsolidated subsidiaries

36,862(1,538)35,324
1,065

Net income

44,77550

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITYAs of December 31, 2006
Shareholders' equity
Millions of yen
Balance as of Dec 31, 2005

Commonstock
182,531

Capital surplus Retained earnings
163,709106,426

Treasury stock(17,317)

Total
shareholders'equity435,349

Changes during the term
Dividends(8,607)(8,607)

Payments of directors’ andstatutory auditors’ bonuses

(146)

(146)

Net income (loss)

44,77544,775Acquisition of treasury stock
Retirement of treasury stock(13,147)

Disposal of treasury stock(57)(13,067)(13,067)

13,147-291

Reduction in retained earnings
due to increase in number ofconsolidated subsidiaries(118)

Other changes in
non-shareholders' equity items
during the term (net)-Total changes during the term
Balance as of Dec 31, 2006

Millions of yen
Balance as of Dec 31, 2005

233
(118)

-

(13,204)

35,903370

23,069182,531

150,504

142,329(16,946)

458,418

Valuation and translation adjustment
Valuation
Foreigndifference on Deferred gains
currency Total valuation
available-for-satranslation and translation
or losses onle securities
adjustments
hedgesadjustment
16,584
2,957
19,542

Minority
interests
26,976Total
net assets
481,868

Changes during the term
Dividends-(8,607)

Payments of directors’ andstatutory auditors’ bonuses

-

(146)

Net income (loss)-

44,775Acquisition of treasury stock-(13,067)

Retirement of treasury stock--

Disposal of treasury stock-

233

Reduction in retained earnings
due to increase in number ofconsolidated subsidiaries

-

(118)

Other changes in
non-shareholders' equity items
during the term (net)(2,021)

Total changes during the term

(2,021)

Balance as of Dec 31, 2006

14,563

(28)

51

796

(1,253)

6,090

4,837

(28)

796

(1,253)

6,090

27,906

(28)

3,753

18,28933,067509,774

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis In Preparation Of Consolidated Financial Statements(1) Items on the scope of the consolidation
A. Number of consolidated subsidiaries: 53
Principal consolidated subsidiaries
Please see the Item 1 of the “Business Report” {“Overview of Operations of Asahi
Breweries Group, section (7) “Principal Subsidiaries,”} for a summary of the current
status of important subsidiaries.
As from the fiscal year under review, the Company added into the list of its
consolidated subsidiaries Wakodo Co., Ltd. and its three subsidiaries because of theacquisition of majority stake in Wakodo Co., Ltd. and three other subsidiaries, namely,
Sanwell Co., Ltd., AB Cargo East Co. Ltd., and AB Cargo West Co., Ltd because of
their increased materiality in the Group.
On the other hand, the Company eliminated five companies from the list of its
consolidated subsidiaries because of mergers with other consolidated companies:
Asahi-Kyowa Liquor Manufacturing Co., Ltd., Asahi Logistics Co., Ltd., Asahi Cargo
Service Nagoya, Ltd., Asahi Cargo Service Osaka, Ltd., and Asahi Cargo Service
Kyushu, Ltd. The Company also ended the consolidation of Kyoto Shurui Ryutsu
Kabushikigaisha, a distributor company of alcoholic beverages and soft drinks, because
the Company had sold all the stake in that company to a third party company during theyear under review, and of Asahi Breweries Itochu China (Holdings) Ltd., because of thecompletion of the company’s final distribution of liquidation dividends.
B. Principal unconsolidated subsidiaries:
Sumidagawa Brewing Co., Ltd., and others
Rationale for exclusion from the scope of consolidation:
The unconsolidated subsidiaries are all small in terms of total assets, sales, net profit orloss, and retained earnings (amount corresponding to equity ownership); they have nomaterial impact as a whole on the consolidated financial statements and thus are
excluded from the scope of consolidation.
(2) Items of the application of Equity Method
A. Number of companies subject to application of the equity method: 26
Subsidiary subject to the equity method: 1
Asahi Beer Engineering Co., Ltd.
Affiliates subject to the equity method: 25
These include Asahi Business Solutions Corp., Qingdao Tsingtao Beer & Asahi
52

Beverage Co., Ltd., Tingyi-Asahi-Itochu Beverages Holding Co., Ltd. and its 22
affiliated companies.
9 affiliated companies of Tingyi-Asahi-Itochu Beverages Holding Co., Ltd. which had
been incorporated and started operations during the fiscal year under review, were
accounted for under the equity method.
B. Principal unconsolidated subsidiaries and affiliates not subject to application of the equity
methodUnconsolidated subsidiaries:

Sumidagawa Brewing Co., Ltd. and others

Affiliates:

Asahi Business Produce Co., Ltd. and others

Rationale for not applying the equity method to the unconsolidated subsidiaries andaffiliates:
The companies in question have extremely slight impact on net profit or loss andretained earnings (amount corresponding to the equity ownership the Company holds);
they have no material impact as a whole on the consolidated financial statements andthus the equity method were not applied.
(3) Accounting period of the consolidated subsidiaries
The accounting period of Asahi Beer U.S.A., Inc., is October 1 to September 30 and isdifferent from that of the Company. Thus a provisional fiscal year ending at December 31(calculated by a reasonable procedure in accordance with legitimate accounting methods)
was used for Asahi Beer U.S.A., Inc. for consolidation purposes. Other consolidated
subsidiaries have the same accounting period as the Company.

(4) Significant Accounting Policies
A. Standards and methods of valuation for important assets
1) Valuation basis and method for securities:
Held-to-maturity debt securities
Held-to-maturity debt securities are stated at amortized cost.
Other securities
Securities with market value
Carried at the average market value for the month immediately preceding theconsolidated balance sheet date. (Related valuation differences are directly
charged or credited to the net assets, and the cost of securities sold is computedby the moving average method.)
Securities without market value
Stated at cost based on the moving-average method.
2) Valuation basis and method for derivatives:
Market price method533) Valuation basis and method for inventories:
Merchandise, finished goods, and semi-finished goods are stated at cost determined
mainly by the weighted average method.
Raw materials and supplies are stated at cost determined mainly using themoving-average method.
B. Depreciation methods for major assets:
Tangible fixed assets:
Depreciation is provided by the straight-line method with respect to production
facilities and by the declining-balance method with respect to other tangible assets.
Consolidated subsidiaries mainly adopt the declining-balance method. Buildings(excluding of fixtures), acquired on or after April 1, 1998, however, are calculatedusing the straight-line method.
The estimated useful life and the residual value of the fixed assets are mainly basedon the same standards as specified in the Corporation Tax Law.
Intangible fixed assets:
Intangible fixed assets are calculated using the straight-line method. The estimateduseful life of the assets is mainly based on the same standards as specified in the
Corporation Tax Law. Software for internal use, however, is amortized by thestraight-line method in the useful period of five years.
C. Accounting criteria for major allowances:
Allowance for doubtful accounts:
Allowance for doubtful accounts consists of the estimated uncollectible amounts withrespect to certain identified doubtful receivables and an amount calculated using therate of actual collection losses with respect to the other receivables.
Allowance for employees’ severance and retirement benefits:
The Company makes provisions for the necessary amount of allowance for
employees’ severance and retirement benefits deemed to have accrued during theterm, based on the Company’s projected benefit obligation and the balance ofpension fund at the term-end. Actuarial gain or loss is amortized, from the year
following the year in which the gain or loss is recognized, by the straight-line method
for a given number of years (mainly10 years) within employees’ average remaining
years of service.
Prior service cost is amortized by the straight-line method within the averageremaining years of service of employees (mainly 10 years) from the time it arises.

54

Allowance for retirement benefits for Directors and Statutory Auditors:
The Company and some of its consolidated subsidiaries calculate the required
amount, based on internal regulations, in preparation for payment of a retirement
allowance for Directors and Statutory Auditors applicable to the fiscal year underreview.
D. Other significant items associated with the preparation of consolidated financial statements
1) Methods of major lease transactions
Finance leases other than those in which ownership of the leased property is deemed
to be transferred to the lessee are accounted for in the manner as followed inoperational lease transactions.
2) Accounting for hedging
a. Accounting for hedging
The Company defers gains or losses on its hedges.
For foreign currency swaps, the Company allocates differences in the value of hedging
instruments when such hedges meet all requirements for such allocations. For interest
rate swaps, the Company applies an exceptional treatment when the swap in question
meets the conditions for application of such an exceptional treatment.

b. Hedging instruments and risks being hedged:
Hedging instruments: Foreign exchange contract, forward foreign exchange
currency swaps and interest rate swaps
Risks being hedged:

Interest on borrowings and transactions in foreign currencies

c. Hedging policy:
Derivative transactions are used to avoid risks associated with fluctuations in foreignexchange markets and in interest rates and to reduce the costs of financing. The
Company has a policy not to engage in speculative transactions which are deviatedfrom real demand or in highly leveraged transactions.
d. Method of evaluating the effectiveness of hedging:
The Company assesses the effectiveness of its hedges by comparing changes in themarket values of the hedged items and of the hedging instruments over the entire
period of the hedge. When the Company allocates differences in the value of hedging
instruments or when it accounts for the value of swaps under special exceptions,these determinations allow it to forgo evaluations of the effectiveness of hedges inthose cases.
553) Consumption tax and similar taxes
Consumption tax and similar taxes are excluded from the statements of income,
except nondeductible consumption tax related to fixed assets that are charged whenincurred.
(5) Evaluation of consolidated subsidiaries’ assets and liabilities
Fair market value method is used to evaluate all assets and liabilities of consolidated
subsidiaries.
(6) Consolidation adjustment account
The consolidation adjustment account is amortized by the straight-line method over a fiveto twenty-year period.
(Changes in accounting treatment)(1) Accounting standard for impairment of fixed assets
As from the fiscal year under review, the Company began applying the “AccountingStandard for Impairment of Fixed Assets” {as set under the “Opinion Concerning
Establishment of Accounting Standard for Impairment of Fixed Assets” (BusinessAccounting Deliberation Council, August 9, 2002)} and the “Implementation Guidance for
Accounting Standards for Impairment of Fixed Assets” (Accounting Standards Board ofJapan, October 31, 2003; ASB Guidance No. 6). This change resulted in a decrease in net
income before taxes of ¥3,905 million.
Accumulated impairment losses were deducted directly from the value of the respective
assets concerned.
(2) Accounting standard for Directors’ and Statutory Auditors’ bonuses
As from the fiscal year under review, the Company began applying the “AccountingStandard for Directors’ and Statutory Auditors’ Bonuses” (Accounting Standards Board ofJapan, November 29, 2005; ASB Accounting Standard No. 4). This change resulted in only
an insignificant impact on earnings.
(3) Accounting standard for retirement benefits
As from the fiscal year under review, the Company began applying the “Amendment of
Accounting Standards for Retirement Benefits” (Accounting Standards Board of Japan,
March 16, 2005; ASB Accounting Standard No. 3) and the “Implementation Guidance forAmendment of Accounting Standards for Retirement Benefits” (Accounting Standards
Board of Japan, March 16, 2005; ASB Guidance No. 7). This change resulted in only an
insignificant impact on earnings.

56

(4) Accounting standard for presentation of net assets on the consolidated balance sheets
As from the fiscal year under review, the Company began applying the “AccountingStandard for Presentation of Net Assets on the Balance Sheet” (Accounting Standards
Board of Japan, December 9, 2005; ASB Accounting Standard No. 5) and “Implementation
Guidance for Accounting Standard for Presentation of Net Assets on the Balance Sheet”(Accounting Standards Board of Japan, December 9, 2005; ASB Guidance No. 8). Thischange resulted in no impact on earnings. Total shareholders’ equity under the previous
standard would have been ¥476,736 million.

2. Notes to Consolidated Balance Sheets(1) Pledged assets and secured liabilities
The following assets have been provided as security for short-term borrowings of ¥1,903
million and long-term borrowings of ¥12,219 million:
Buildings and structures:¥9,906 million

Machinery, equipment and vehicles:¥3,777 million

Land:¥27,179 million

Investment securities:¥633 million

Total¥41,496 million(2) Accumulated depreciation on tangible fixed assets:¥582,154 million(3) Contingent liabilities
Guarantees:¥9,880 million

Discounted export bill of exchange:¥1 million(4) Matured notes at term-end
The Balance Sheet date for the term fell on a bank holiday and trade notes with maturity on
the Balance Sheet date were cleared on the next business day of the clearing houses. Thus
current assets and current liabilities include respectively trade notes receivable and tradenotes payable with maturity on the Balance Sheet date as follows:
Notes receivable:¥396 million

Notes payable:¥1,328 million

57

3. Notes to Consolidated Statements of Income
Impairment losses
In the fiscal year under review, the Group recognized impairment losses in the following
asset groups:
Use of Asset

Operational assets(for productdistribution)
Leased asset
Idle assets

Location of Asset

Type of Asset

Komaki, Aichi and 2 others

Land, Buildings and structures

Sumida-ku, Tokyo
Akitakada, Hiroshima andanother

Land, Buildings and structuresLand

The Company and its Group companies in principle divide their respective assets byindividual breweries, plants and other operational business establishments and[determine][bases] their groupings based on complementary relations of cash flows among
different assets. On the other hand, the Company and its Group companies count as astand-alone asset group each of individual leased assets and idle assets. Headquarters
buildings and employee welfare facilities of the Company and its Group companies are
categorized as common-use assets, as they do not generate cash flows by themselves.
At current market prices, the Group’s operational assets (for product distribution) and leased
asset cited in the table above have lost a substantial part of their respective book values andthe likelihood of recovering the investment is projected small. In addition, the market valuesof the Group’s idle assets have also declined substantially compared to their respective bookvalues and the likelihood of future utilization thereof is completely uncertain. Consequently,
the Group has written down the book values of these assets to amounts it believes arerecoverable. These write-offs have resulted in impairment losses (¥3,905 million, of which
the loss on land amounted to ¥2,352 million, and the loss on buildings and structures
amounted to ¥1,552 million), which the Group has recognized as extraordinary losses.
The Group arrived at the recoverable values of these respective assets by estimating net
sales amounts or value of use. The former was based primarily on an appraisal by a realestate appraiser in accordance with the Standards for Real Estate Appraisal; the latter was
calculated by future projected cash flow discounted by 4.3%.

4. Notes related to statement of changes in shareholders’ equity(1) Total shares outstanding as of the end of the fiscal year under review
Common shares
As of the end of the fiscal year (Dec. 31, 2005):

493,585,862 sharers

Decrease:

10,000,000 shares

As of the end of the fiscal year under review:

483,585,862 shares(Reason for decrease): Decrease due to retirement of treasury stock58

(2) Dividends from retained earnings distributed during the fiscal year under review
A. It was resolved at the Annual Shareholders’ Meeting of March 30, 2006 as follows:
Item related to dividends on common stock
Total amount of dividends:¥4,541 million

Dividend per share:¥9.50

Date of record:

December 31, 2005

Effective date:

March 31, 2006

B. It was resolved at the meting of the Board of Directors of August 4, 2006 as follows:
Item related to interim dividends on common stock
Total amount of interim dividends:¥4,065 million

Interim dividend per share:¥8.50

Date of record:

June 30, 2006

Effective date:

September 5, 2006

(3) Dividends from retained earnings to be distributed after the final day of the fiscal year underreview
The following item has been placed on the agenda for approval at the Ordinary Shareholders’Meeting scheduled for March 27, 2007.
Item related to dividends on common stock
Source of dividends:

Retained earnings

Total amount of dividends:¥4,942 million

Dividend per share:¥10.50Date of record:

December 31, 2006

Effective date:

March 28, 2007

(4) Number of shares subject of share purchase warrants upon exercise thereof (as of December
31. 2006)
The First Issue of share purchase warrants (issued on March 28, 2003)
Number of share purchase warrants:

437

Class and number of share subject of purchase warrants:

Common shares: 437,000

sharesAmount to be paid in upon exercise of the share purchase warrants:
Exercise period:¥830

March 28, 2005 to March 27, 2013

The Second Issue of share purchase warrants (issued on March 30, 2004)
Number of share purchase warrants:

5,850

Class and number of share purchase warrants:

Common shares: 585,000 shares

Amount to be paid in upon exercise of the share purchase warrants:
Exercise period:¥1,205

March 30, 2006 to March 29, 201459

5. Per share information(1) Net assets per share:¥1,012.77(2) Net income per share:¥94.02

6. Other notes
Figures of less than one million yen are omitted.

60

INDEPENDENT AUDITOR’S REPORT
January 31, 2007
To: The Board of Directors
Asahi Breweries, Ltd.

AZSA & Co.
Hikoyuki Miwa (Seal)
Designated and Engagement Partner
Certified Public Accountant
Tatsunaga Fumikura (Seal)
Designated and Engagement Partner
Certified Public Accountant
Yasuyuki Nagasaki (Seal)
Designated and Engagement Partner
Certified Public Accountant
In accordance with the provision of Paragraph 4, Article 444 of the Corporation Law,
we have audited the consolidated financial statements of Asahi Breweries, Ltd. (the“Company”) for the fiscal year that ran from January 1, 2006 to December 31, 2006. Thesestatements consist of the consolidated balance sheets, the consolidated statements of income,the consolidated statement of changes in shareholders’ equity, and notes on significant
accounting policies used in consolidation. These consolidated financial statements are theresponsibility of the Company’s management. Our responsibility is to express an opinion onthese financial statements based on our audit as Independent Auditor.
We conducted our audit in accordance with generally accepted auditing standards inJapan. Those auditing standards require that we obtain reasonable assurance about whether
the consolidated financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, and assessing the accounting principles used, the methods of application thereof,and estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements. We believe that our audit provides a reasonable basis forour opinion.
In our opinion, the foregoing consolidated financial statements present fairly, in allmaterial aspects, the financial position and results of operations of the Company and its
consolidated subsidiaries, for the period covered by the aforesaid financial statements inconformity with generally accepted accounting principles in Japan
Postscript:
As reported in the notes on significant accounting policies, from the fiscal year underreview the Company began applying accounting standards related to impairment of fixed
assets. Consequently, the consolidated financial statements have been prepared in accordancewith these standards.
Our firm and engagement partners have no interests in the Company required to bedisclosed pursuant to the relevant provisions of the Certified Public Accountants Law ofJapan.
61

REPORT OF THE BOARD OF STATUTORY AUDITORS CONCERNINGTHE CONSOLIDATED FINANCIAL STATEMENTS
Audit Report
The Board of Statutory Auditors has prepared the following report on the consolidated
financial statements (consisting of the consolidated balance sheets, the consolidated statements
of income, the consolidated statement of changes in shareholders’ equity, and notes on
significant accounting policies used in consolidation) for the 83rd fiscal year, which ran fromJanuary 1, 2006 to December 31, 2006. This report was prepared on the basis of audit reports
prepared by individual Statutory Auditors and represents a unanimous opinion of all the
Statutory Auditors after due discussions and consultations among them.
1. Methods used in audits by the individual Statutory Auditors and by the Board of
Statutory Auditors; content of audits
The Board of Statutory Auditors established auditing policies and auditing plans for the
fiscal year under review and received reports from each of the Statutory Auditors on theexecution of his auditing activities and the result thereof. In addition, it received reports on
business performance from Directors et al. and from the Independent Auditor, and, whennecessary, requested their explanations regarding such reports.
In accordance with the auditing policies and auditing plans established by the Board of
Statutory Auditors for the period under review, each of the Statutory Auditors received reports
from Directors, employees and others regarding the consolidated financial statements, and,
when necessary, requested explanations regarding these reports. Statutory Auditors also
monitored and examined whether the Independent Auditor maintains their independence andcarry out their audits in an appropriate manner. Statutory Auditors received reports from the
Independent Auditor on the execution of their duties and, when necessary, requested their
explanations regarding those reports. They also received notification from the Independent
Auditor that they have taken steps to improve the “system for ensuring appropriate execution of
their duties” (as enumerated in Article 159 of the Company Accounting Regulation Ordinance)in compliance with the “Quality Control Standards Relating to Auditing” (adopted by theBusiness Accounting Deliberation Council on October 28, 2005), and, when necessary,requested their explanations and consequently confirmed that the system under which the
Independent Auditor operates is appropriate. Based on the foregoing methods, Statutory
Auditors reviewed the consolidated financial statements for the fiscal year under review.
2. Result of the Audit
In our opinion, the auditing methods used by AZSA & Co., the Independent Auditor, andthe result of their audit is appropriate.

February 1, 200762

Board of Statutory Auditors
Asahi Breweries, Ltd.
Sugao Nishikawa (Seal)
Standing Statutory Auditor
Hiroshi Fujita (Seal)
Standing Statutory Auditor
Takahide Sakurai (Seal)
Statutory Auditor
Naoto Nakamura (Seal)
Statutory Auditor
Tadashi Ishizaki (Seal)
Statutory Auditor

63

REFERENCE MATERIAL FOR SHAREHOLDERS’ MEETING
Agenda items and reference materials
Item 1:Appropriation of retained earnings for the 83rd term
The Company is proposing the disposal of retained earnings in the following manner:
1. Year-end dividends
The Company considers the return of profits to shareholders to be an important policy. Whileendeavoring to enhance its profitability and to strengthen its financial standing, the Company’s
fundamental aim is to reward shareholders appropriately in the light of its financial standing. Its
policy with respect to dividends is basically to maintain the continuity and stability of payouts,
while at the same time targeting to increase the payout ratio up to 20 percent or higher on aconsolidated basis. In accordance with this policy, and taking into consideration a variety offactors, including financial standing and profitability of the Company, the Company isproposing to distribute the following dividend keeping in mind great support given to it by its
shareholders and in response to shareholders’ expectations.
(1) Type of dividend asset
Cash(2) Allocation of dividend assets to shareholders and total amount of allocation¥10.50 yen per share of common stock
Total amount of payout: ¥4,942,323,351
The Company previously paid out ¥8.50 per share as an interim-period dividend, so thetotal dividend for the fiscal year under review will amount to ¥19 per share.
(3) Effective date of dividend payment
March 28, 2007
2. Appropriation of other retained earnings(1) Retained-earnings accounts showing an increase, and the amount of such increases
Special reserves:¥30,000,000,000(2) Retained-earnings accounts showing a decrease, and the amount of such decreases
Retained earnings carried forward:¥30,000,000,00064Item 2: Directors’ and Statutory Auditors’ bonuses
In light of its business results during the year under review, the Company is proposing to pay
the following bonuses to its twelve (12) Directors and five (5) Statutory Auditors who were in
office as of the end of the fiscal year: ¥45,400,000 for Directors’ bonuses (of which ¥3,900,000
will be paid to three (3) Outsider Directors); and ¥3,800,000 for Statutory Auditors’ bonuses (ofwhich ¥1,500,000 will be paid to three (3) Outside Statutory Auditors). The Company
furthermore proposes that decisions regarding individual amounts, and timing and methods of
payment, etc. of the bonuses, be left to the discretion of the Board of Directors as for bonuses
for Directors, and to mutual consultations among Statutory Auditors as for bonuses for Statutory
Auditors.
Item 3: Amendments of the Articles of Incorporation
We hereby propose to amend the Articles of Incorporation of the Company as follows:(1) Reason for amendments
A. To make management accountability clearer to shareholders, this amendment changes theterm of directors to one year from the current two years (proposed amendment to the current
Article 20).
B. To enable Outside Directors and Outside Statutory Auditors to effectively fulfill their
expected roles, it is proposed that the Company be entitled to conclude agreements with
Outside Directors and Outside Statutory Auditors to the effect that liability of such Outside
Directors and Outside Statutory Auditors be limited. Toward this end, the Company isproposing the establishment of each new article (proposed amendments to Articles 25 and33). The Company has obtained the concurrence of all the Statutory Auditors for thesubmission of the proposed amendment to Article 25.
In this connection, renumbering of articles necessitated by the establishment of these new
articles shall also be made a part of this amendment.

65

(2) Details of amendments
The proposed amendments are as follows:(Revised portions are indicated with underlines.)
Current
Chapter IV: DIRECTORS AND BOARD OF
DIRECTORS

AmendedChapter IV: DIRECTORS AND BOARD OF
DIRECTORS

Article 20 (Term of Office)The term of office of a Director shall expire at
the conclusion of the annual shareholders’meeting for the latest business year ending within
two (2) years from his/her appointment of office.

Article 20 (Term of Office)The term of office of a Director shall expire at
the conclusion of the annual shareholders’meeting for the latest business year ending withinone (1) year from his/her appointment of office.

(Inserted)

Chapter V: STATUTORY AUDITORS AND
BOARD OF STATUTORY AUDITORS
Article 25 - Article 31 (Omitted)(Inserted)

Chapter VI: INDEPENDENT AUDITORS
Article 32 - Article 34 (Omitted)

Article 25 (Agreements Limiting the Liability of
Outside Directors)
In accordance with the provision of Paragraph
1, Article 427 of the Corporation Law, theCompany may enter into an agreement with an
Outside Director to the effect that his/her liability
for damages as provided for under Paragraph 1,
Article 423 of the Corporation Law is limited.
This limit, however, shall be either apredetermined amount no less than ¥10,000,000
or the minimum liability amount stipulated bylaws and regulations, whichever is higher.
Chapter V: STATUTORY AUDITORS AND
BOARD OF STATUTORY AUDITORS
Article 26 - Article 32 (Unchanged)
Article 33 (Agreements Limiting the Liability of
Outside Statutory Auditors)
In accordance with the provisions of Paragraph
1, Article 427 of the Corporation Law, theCompany may enter into an agreement with an
Outside Statutory Auditor to the effect that his/her
liability for damages as provided for underParagraph 1, Article 423 of the Corporation Law
is limited. This limit, however, shall be either apredetermined amount no less than ¥10,000,000
or the minimum liability amount stipulated bylaws and regulations, whichever is higher.
Chapter VI: INDEPENDENT AUDITORS
Article 34 - Article 36 (Unchanged)
Chapter VII: ACCOUNTS

Chapter VII: ACCOUNTS
Article 35 - Article 37 (Omitted)

Article 37 - Article 39 (Unchanged)
66

Item 4: Election of eleven (11) Directors
At the close of this Annual Shareholders’ Meeting, the term of office expires for the following
three (3) Directors: Kouichi Ikeda, Akira Ohara, and Naoki Izumiya. Item 3 proposes anamendment to the Articles of Incorporation which would change directors’ term to one (1) year
from the current two (2) years. Provided that Item 3 is approved, then, Directors’ term ischanged to one (1) year, leading to the effect that the term of all of nine (9) other Directors,
namely, Hitoshi Ogita, Yoshihiro Goto, Masatoshi Takahashi, Yoshifumi Nishino, Hikaru
Kawamura, Kazuo Motoyama, Nobuo Yamaguchi, Yukio Okamoto and Tomoyo Nonaka will
also be expiring.
Therefore, we would like shareholders to elect eleven (11) Directors.
In the event that Item 3 is rejected, however, this Item 4 shall be amended to read that only thefive (5) candidates listed as Candidates No. 1, 5, 9, 10 and 11 in the Table on pages 68 to 75 areproposed to be elected (for the avoidance of doubt, excluding those six (6) persons whose term
does not expire at the close of this meeting in case Item 3 is rejected, namely, Hitoshi Ogita,
Masatoshi Takahashi, Yoshifumi Nishino, Kazuo Motoyama, Nobuo Yamaguchi and Yukio
Okamoto).
Also, in this case, three (3) Directors, Yoshihiro Goto, Hikaru Kawamura and Tomoyo Nonaka
will be resigning voluntarily at the close of this meeting.

The candidates for the positions are as follows:67

(New candidates are marked with (*))
Candidate
NumberName(date of birth)

Career summaries, ranks within the Company,
areas of responsibility, and representation ofother companies and other organizations

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

22,200

See theNote 1

Apr. 1963 Entered Asahi Breweries, Ltd.

1

Kouichi
Ikeda(April 21, 1940)

Mar. 1996 Director; General Manager ofKyushu, Chugoku and Shikoku
Regional Headquarters
Mar. 1997 Managing Director; Senior Deputy
General Manager of Sales Division
and Senior General Manager ofKyushu and Chugoku Regional
Headquarters
Sep. 1997 Managing Director, Senior Deputy
General Manager of Sales
Division, and Senior General
Manager of Shutoken Regional
Headquarters and Kanshin-etsu
Regional Headquarters
Sep. 1998 Managing Director, Senior Deputy
General Manager of Sales
Division, Senior General Managerof Shutoken Regional
Headquarters
Mar. 1999 Senior Managing Director, Senior
Deputy General Manager of Sales
Division, Senior General Managerof Shutoken Regional
Headquarters
Mar. 2000 Senior Managing Executive
Officer, Senior Deputy General
Manager of Sales Division, Senior
General Manager of Shutoken
Regional Headquarters
Oct. 2000 Senior Managing Executive
Officer, Senior General Manager
of Liquor Sales & Marketing
Headquarters
Mar. 2001 Senior Managing Director
Jan. 2002 President and Representative
Director
Mar. 2006 Chairman of the Board andRepresentative Director(to the present)< Representation of other companies and otherorganizations >Chairman of the board of Asahi
Beer Arts Foundation

68Candidate
NumberName(date of birth)

Career summaries, ranks within the Company,
areas of responsibility, and representation of othercompanies and other organizations

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

11,000---

Apr. 1965 Entered Asahi Breweries, Ltd.

2

Mar. 1997 Director, General Manager of
Fukuoka Branch
Sep. 1997 Director, Senior General Manager
of Kyushu Regional Headquarters
Mar. 2000 Managing Executive Officer,
Senior General Manager ofKyushu Regional Headquarters
Oct. 2000 Managing Executive Officer,
Senior General Manager ofKanshin-etsu Regional
Headquarters
Hitoshi Ogita
Mar.
2002
Senior Managing Executive(January 1, 1942)
Officer, Senior General Manager
of Kanshin-etsu Regional
Headquarters
Sep. 2002 Executive Officer, Vice Presidentof Asahi Soft Drinks Co., Ltd.
Mar. 2003 President and Representative
Director of Asahi Soft Drinks Co.,
Ltd.
Mar. 2006 President and Representative
Director of Asahi Breweries, Ltd.
(to the present)69

Candidate
NumberName(date of birth)

Career summaries, ranks within the Company,
areas of responsibility, and representation of othercompanies and organizations

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

26,502---

Apr. 1969 Entered Asahi Breweries, Ltd.

3

Masatoshi
Takahashi(October 24,
1946)

Mar.2000 Executive Officer, Senior General
Manager of Chubu Regional
Headquarters
Sep. 2001 Executive Officer, Senior General
Manager of Liquor Sales &Marketing Headquarters
Mar. 2002 Managing Executive Officer, Senior
General Manager of Liquor Sales &Marketing Headquarters
Sep. 2003 Managing Executive Officer, Senior
General Manager of Kinkiken
Regional Headquarters
Mar. 2005 Senior Managing Executive Officer,
Senior General Manager of Kinkiken
Regional Headquarters
Mar. 2006 Senior Managing Director, Senior
Managing Executive Officer(to the present)70Candidate
NumberName(date of birth)

Career summaries, ranks within the Company,
areas of responsibility, and representation of othercompanies and organizations

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

Apr. 1969 Entered Asahi Breweries, Ltd.

4

Yoshifumi
Nishino(March 4, 1947)

5

Naoki Izumiya(August 9,
1948)

Sep. 2001 Executive Officer,
Senior General Manager of
Production Headquarters
Mar. 2003 Managing Executive Officer,
Senior General Manager of
Production Headquarters
Mar. 2004 Managing Director
Mar. 2006 Managing Director, Managing
Executive Officer(to the present)< Representation of other companies andorganizations>
Chairman of the board of Asahi Breweries
Foundation
Apr. 1972 Entered Asahi Breweries, Ltd.
Mar. 2000 Executive Officer, Senior General
Manager of Group Management
Strategy Division
Oct. 2000 Executive Officer, Senior General
Manager of Strategy Planning
Headquarters
Sep. 2001 Executive Officer, Deputy General
Manager of Shutoken Regional
Headquarters and General
Manager of Tokyo BranchMar. 2003 Director
Mar. 2004 Managing Director
Mar. 2006 Managing Director, Managing
Executive Officer, Senior General
Manager of Liquor Sales &Marketing Headquarters(to the present)

71

16,366

See theNote 18,800---

Candidate
NumberName(date of birth)

Career summaries, ranks within the Company,
areas of responsibility, and representation of othercompanies and organizations

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

10,200---11,000---

Apr. 1972 Entered Asahi Breweries, Ltd.

6

7

Mar. 2000 Executive Officer, Senior General
Manager of Quality Development
Headquarters and Senior General
Manager of Logistics Department
Sep. 2001 Executive Officer,
Senior General Manager of SCM
Kazuo
Headquarters
Motoyama(March 14, 1950) Sep. 2002 Executive Officer
Sep. 2003 Executive Officer, Senior General
Manager of Strategy Planning
Headquarters
Oct. 2005 Executive Officer
Mar. 2006 Director, Executive Officer(to the present)
Apr. 1952 Entered Asahi Chemical Industry
Co., Ltd.
Jun. 1976 Director
Nov. 1978 Managing Director
Jun. 1981 Executive Vice President andRepresentative Director
Mar. 1982 Director of Asahi Breweries, Ltd.
(to the present)
Nobuo
Apr. 1992 Chairman of the Board andYamaguchi
Representative Director of Asahi(December 23,
Chemical Industry Co., Ltd. (now1924)
Asahi Kasei Corporation)(to the present)< Representation of other companies andorganizations>
Chairman of the Board and Representative
Director of Asahi Kasei Corporation
Chairman, The Japan Chamber ofCommerce and Industry; Chairman, The
Tokyo Chamber of Commerce and Industry

72Candidate
Number8

Name(date of birth)

Yukio Okamoto(November 23,
1945)

Career summaries, ranks within the Company,
areas of responsibility, and representation of othercompanies and organizations

Apr. 1968 Entered the Ministry of Foreign
Affairs
Jan. 1991 Resigned from the Ministry ofForeign Affairs
Apr. 1991 Adviser to The Japan Foundation
President and CEO of Okamoto
Associates, Inc. (to the present)
Nov. 1996 Adviser to the Prime Minister on
Okinawa Affairs
Jul. 1998 Advisor to the Science andTechnology Agency
Mar. 2000 Director of Asahi Breweries, Ltd.
(to the present)
Sep. 2001 Special Advisor to the Cabinet
Apr. 2003 Special Advisor to the Prime
Minister< Representation of other companies andorganizations>
President and CEO of Okamoto Associates,
Inc.
General Partner of Pacifica Neo Ventures
LLC

73

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

3,700

See theNote 1

Candidate
Number9

Name(date of birth)

Masahiko
Osawa *
(January 28,
1946)

Number ofshares in the
Company
areas of responsibility, and representation of other
owned bycompanies and organizations
the candidate
Career summaries, ranks within the Company,

Apr. 1968 Entered Asahi Breweries, Ltd.
Mar. 1998 General Manager of Saga Branch
Sep. 1998 General Manager of Hiroshima
BranchSep. 1999 Deputy General Manager of
Chugoku Regional Headquarters
and General Manager ofHiroshima BranchMar. 2000 Executive Officer, Senior General
Manager of Logistics Department
Sep. 2001 President of Asahi Beer (Shanghai)
Product Services Co., Ltd.
Sep. 2002 Managing Executive Officer, Chief
Representative of China
Representative OfficeJan. 2005 Managing Executive Officer,
Senior General Manager of China
Business Headquarters, Chief
Representative of China
Representative Office
Oct. 2005 Managing Executive Officer,
Senior General Manager of China
Headquarters, Chief
Representative of China
Representative Office(to the present)

Specialinterests intheCompany

17,652

---

7,100

---

Apr. 1975 Entered Asahi Breweries, Ltd.

10

Akiyoshi Koji *(November 8,
1951)

Sep. 2001 Executive Officer in charge ofManagement Strategy, Personnel
Strategy and Business Planning
Promotion
Mar. 2002 Executive Officer in charge ofManagement Planning, Personnel
Strategy, Business Planning
Promoting and Public Relations
Sep. 2002 Executive Officer in charge ofBeverage Business of Asahi
Breweries, Ltd.
Mar. 2003 Managing Director and Senior
General Manager of Planning
Division, Asahi Soft Drinks Co.,
Ltd.
Mar. 2006 Senior Managing Director andSenior General Manager ofPlanning Division, Asahi Soft
Drinks Co., Ltd.
(to the present)74

Candidate
NumberName(date of birth)

Career summaries, ranks within the Company,
areas of responsibility, and representation of othercompanies and organizations

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

11,400---

Apr. 1972 Entered Asahi Breweries, Ltd.
Mar. 1999 Senior Officer of Asahi Breweries,
Ltd., Vice President of Beijing Beer
Asahi Co., Ltd.

11

Sep. 1999 Senior Officer and Deputy General
Manager, Tokyo Brewery, Asahi
Breweries, Ltd.
Mar. 2000 Senior Officer and General
Manager, Nagoya Brewery
Sep. 2001 Senior Officer and General
Manager, Production Department
Shin Iwakami* Sep. 2002 Senior Officer and General(May 18, 1949)
Manager, Production Department I
Sep. 2003 Senior Officer and Deputy Senior
General Manager, Production
Operations Headquarters; General
Manager, Production Department I
Mar. 2004 Executive Officer and Senior
General Manager, Production
Operations Headquarters
Mar. 2005 Executive Officer and Senior
General Manager, Production
Headquarters (to the present)

Notes:
1. Special interests in the Company candidates have:1) The Company has made donations to the Asahi Brewery Arts Foundation, of which board Kouichi
Ikeda is the Chairman. The Company also receives rent from the foundation with respect to facilities of
the Asahi Beer Oyamazaki Villa Museum, which is operated by the foundation.
2) The Company has made donations to the Asahi Breweries Foundation, of which board Yoshifumi
Nishino is the Chairman.
3) The Company has made investments in the Pacifica Fund 1, L.P., which is managed by Pacifica Neo
Ventures LLC, where Yukio Okamoto is a General Partner.
2. Nobuo Yamaguchi and Yukio Okamoto are both candidates for Outside Directors defined in Item 15,
Article 2 of the Corporation Law.
3. The following are items required to be noted about candidates for Outside Director.
(1) Reasons for recommending them as candidates for Outside Directors
A. Nobuo Yamaguchi would bring a wealth of company management experience and insight into a
broad range of issues, to the management of the Company. We thus recommend his election to
the board as an Outside Director.
B. As an expert on diplomatic and international affairs, Yukio Okamoto would bring deep insightand a wide range of experience to the management of the Company. We thus recommend hiselection to the board as an Outside Director.
(2) In case of the candidates’ service over the past five years as Outside Director or Outside Statutory
75

Auditor at other companies; records of inappropriate actions by these companies during thecandidates’ terms of office therein, or of steps taken by the candidates to prevent such
inappropriate actions, or of responses taken by the candidates to deal with such actions after theiroccurrence
A. Nobuo Yamaguchi has been concurrently serving as an Outside Statutory Auditor of The
Yomiuri Shimbun Holdings, which since the 1950s owned shares in a number of television
station companies through third-party accounts. This was in violation of regulations(ordinances of Ministry of Internal Affairs and Communications) limiting the holdings of suchshares, which were adopted for the purpose of eliminating an excessive concentration ofownership in the mass media. The violation was discovered in November 2004 and rectified in
March 2005. Nobuo Yamaguchi was not involved in any of the actions leading to this violation.
With respect to actions taken by the candidate since the issue was uncovered, Nobuo
Yamaguchi offered proposals designed to prevent the reoccurrence of such violations to theboard, based on internal and external investigative reports.
B. Yukio Okamoto concurrently serves as an Outside Director of Mitsubishi Materials
Corporation, which together with Mitsubishi Estate Co., Ltd. and Obayashi Corporation,
developed and sold the Osaka Amenity Park Residence Tower (a condominium tower). The
developers of the project were sued by residents of the condominium over contaminated soil on
the project site. Yukio Okamoto was not involved in this project. He offered proposals designed
to prevent the reoccurrence of such violations to the board, based on internal and external
investigative reports.
(3) Number of years of service as Outside Director
A. At the conclusion of this Annual Shareholders’ Meeting, Nobuo Yamaguchi will have served as
an Outside Director for 25 years.
B. At the conclusion of this Annual Shareholders’ Meeting, Yukio Okamoto will have served as an
Outside Director for 7 years.
(4) Regarding agreements limiting the liability of Outside Directors
To enable Outside Directors to effectively fulfill their expected roles, the Company is proposing in Item 3of the agenda for this meeting (“ Amendments of the Articles of Incorporation”) that the Company shallbe entitled to conclude agreements with Outside Directors to the effect that liability of Outside
Directors is limited. If this amendment is approved, the Company will, in accordance with Paragraph 1,
Article 427 of the Corporation Law, enter into such agreements with all the Outside Directors limiting
their liability as defined in Paragraph 1, Article 423 of the Corporation Law.

76

Item 5: Election of three (3) Statutory Auditors
At the close of this Annual Shareholders’ Meeting, the terms of office will expire for thefollowing three (3) Statutory Auditors: Hiroshi Fujita, Takahide Sakurai and Naoto Nakamura.
Therefore we would like shareholders to elect three (3) Statutory Auditors.
The candidates are as follows:
For the avoidance of doubt, the Company has obtained the concurrence of the Board of
Statutory Auditors for the submission of this proposal.
(New candidates are marked with (*))
Candidate
Number1

Name(date of birth)

Takahide
Sakurai(October 30,
1932)

Career summaries, ranks within the Company,
areas of responsibility, and representation of othercompanies and organizations

Apr. 1955 Entered The Dai-ichi Mutual Life
Insurance Company Limited
Apr. 1983 Managing Director
Apr. 1986 Executive Vice President andRepresentative Director
Apr. 1987 President and Representative
Director
Mar. 1994 Statutory Auditor, Asahi
Breweries, Ltd.
(to the present)

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

0

---

0

---

Apr. 1997 Chairman and Representative
Director, The Dai-ichi MutualLife Insurance Company Limited
Jul. 2004 Senior Advisor to The Dai-ichi
Mutual Life Insurance Company(to the present)
Oct. 1982 Passed Bar Examination

2

Naoto
Nakamura(January 25,
1960)

Apr. 1985 Graduated from the Legal
Research and Training Institute;registered with the Daini Tokyo
Bar Association; joined the Mori
Sogo Law Offices
Apr. 1998 Established the Hibiya Park Law
Office; partner
Feb. 2003 Established the Naoto Nakamura
Law Offices (present Nakamura,Tsunoda & Matsumoto Law
Offices); partner(to the present)
Mar. 2003 Outside Statutory Auditor, Asahi
Breweries, Ltd.
(to the present)77

Candidate
NumberName(date of birth)

Career summaries, ranks within the Company,
areas of responsibility, and representation ofother companies and organizations

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

11,300---

Apr. 1967 Entered Asahi Breweries, Ltd.

Yoshihiro
Goto *(October 20,
1944)

3

Mar. 1999 Director, General Manager of
Fukuoka Branch
Sep. 1999 Director, General Manager of Audit
Department
Mar. 2000 Executive Officer, General
Manager of Audit Department
Mar. 2002 Managing Executive Officer
Sep. 2003 Managing Executive Officer,
Senior General Manager ofManagement Headquarters
Mar. 2004 Senior Managing Director andSenior Managing Executive
Officer, Senior General Manager ofManagement Headquarters
Oct. 2005 Senior Managing Director andSenior Managing Executive
Officer, Group Headquarters(to the present)

Notes:
1. Takahide Sakurai and Naoto Nakamura are both candidates for Outside Statutory Auditor as defined in
Item 16, Article 2 of the Corporation Law.
2. The following are items required to be noted about candidates for Outside Statutory Auditors.
(1) Reasons for recommending them as candidates for Outside Statutory Auditors:
A. Takahide Sakurai would bring a wealth of experience of company management and insight intoa broad range of issues to the management of the Company. We thus recommend his election to
the Board of Statutory Auditors as an Outside Statutory Auditor.
B. Naoto Nakamura would bring professional perspective as an attorney at law, deep insight into
management and oversight capabilities to the task of auditing the Company. We thus
recommend his election to the Board of Statutory Auditors as an Outside Statutory Auditor.
(2) In case any candidate for Outside Statutory Auditor has not had any past involvement in the
management of companies other than in his/her role as an outside director or an outside statutory
auditor, justification that the Company believes he/she would be capable of appropriately
executing the duties of Outside Statutory Auditor:
In his position as an attorney at law, Naoto Nakamura has established a highly regarded record ofachievement in corporate laws and is deeply knowledgeable about company management. The
Company thus believes that he will be able to appropriately execute the tasks of Outside Statutory
Auditor.
(3) In case, over the past five years, any candidate for Outside Statutory Auditor has engaged inoperations of a “special related party” (as defined in Item 18, Paragraph 3, Article 2 of theOrdinance for Enforcement of the Corporation Law):
Until June 2004, Takahide Sakurai was the Representative Director and Chairman of The Dai-Ichi
Mutual Life Insurance Company, which falls under the category of a “special related party” of theCompany (a party with which the Company has had considerable dealings).
78

(4) Number of years of service as Outside Statutory Auditor
A. At the conclusion of this Annual Shareholders’ Meeting, Takahide Sakurai will have served as
an Outside Statutory Auditor for 13 years.
B. At the conclusion of this Annual Shareholders’ Meeting, Naoto Nakamura will have served as
an Outside Statutory Auditor for 4 years.
(5) Agreements limiting the liability of Outside Statutory Auditors
To enable Outside Statutory Auditors to effectively fulfill their expected roles, the Company isproposing in Item 3 of the agenda for this meeting (“Amendments of the Articles ofIncorporation”) that the Company shall be entitled to conclude agreements with Outside Statutory
Auditors to the effect that liability of Outside Statutory Auditors is limited. If this amendment isapproved, the Company will, in accordance with Paragraph 1, Article 427 of the Corporation Law,enter into such agreements with all the Outside Statutory Auditors limiting their liability as
defined under Paragraph 1, Article 423 of the Corporation Law.

79

Item 6: Payments of Retirement Bonuses to Retiring Directors and Retiring Statutory
Auditor, and Final Payments Marking the Termination of the System ofRetirement Bonuses for Directors and Statutory Auditors
In recognition of their services while in office, the Company is proposing that retirement
bonuses be paid to four (4) retiring Directors and a retiring Statutory Auditor, leaving office at
the conclusion of this Annual Shareholders’ Meeting. The retiring Directors are: Yoshihiro Goto,
Akira Ohara, Hikaru Kawamura and Tomoyo Nonaka. The retiring Statutory Auditor is Hiroshi
Fujita.
For the retiring Directors, the Company is proposing a payment of ¥77,000,000 (of which¥11,400,000 will be paid to the one retiring Outside Director). For the Statutory Auditor, theCompany is proposing a payment of ¥20,300,000. The Company furthermore proposes thatdecisions regarding specific amounts, and timing and methods of payment, etc., be left to thediscretion of the Board of Directors as for the retirement bonuses to the individual retiring
Directors and to mutual consultations among Statutory Auditors as for the retiring Statutory
Auditor.
A brief summary of the careers of each of the retiring Directors and retiring Statutory Auditor is
as follows:
Name

Yoshihiro Goto

Akira Ohara

Hikaru Kawamura
Tomoyo Nonaka
Hiroshi Fujita

Brief Record

Mar. 2004
Mar. 2001

Senior Managing Director(to the present)
Director

Mar. 2002

Managing Director

Mar. 2004

Senior Managing Director(to the present)
Managing Director(to the present)
Director(to the present)
Statutory Auditor(to the present)

Mar. 2004
Mar. 2002
Mar. 2003

Meanwhile, the Board of Directors made a resolution in its meeting of February 6, 2007 toabolish the system of retirement bonuses for retiring Directors and retiring Statutory Auditors,
effect as of the conclusion of this Annual Shareholders’ Meeting.
In this connection, the Company is proposing that a final payment to mark the termination ofthis system be made to the Directors (excluding the retiring Directors) and Statutory Auditors(excluding the retiring Statutory Auditor) who were in office as of the end of the fiscal year
under review. In recognition of services performed during their terms of office, the Company isproposing that a final payments marking the termination of the system of retirement bonuses be
paid to the following eight (8) Directors and four (4) Statutory Auditors for their contributions
80

made up to the conclusion of this Annual Shareholders’ Meeting. The Directors concerned are:
Kouichi Ikeda, Hitoshi Ogita, Masatoshi Takahashi, Yoshifumi Nishino, Naoki Izumiya, Kazuo
Motoyama, Nobuo Yamaguchi and Yukio Okamoto. The Statutory Auditors concerned are:Sugao Nishikawa, Takahide Sakurai, Naoto Nakamura and Tadashi Ishizaki.
For the Directors, the Company is proposing a payment of ¥166,500,000 (of which ¥34,500,000
will be paid to two (2) Outside Directors). For the Statutory Auditors, the Company is proposing
a payment of ¥48,000,000 (of which ¥33,000,000 will be paid to three (3) Outside Statutory
Auditors). The Company furthermore proposes that decisions regarding specific amounts andmethods of payment, etc., be left to the discretion of the Board of Directors as for the bonuses tothe individual Directors and to mutual consultations among the Statutory Auditors as for thebonuses to the individual Statutory Auditors. Finally, as for the timing of the payment thereof,
the Company proposes that payments of such bonuses be made to each of the Directors andStatutory Auditors upon his/her retirement.
A brief summary of the Directors and Statutory Auditors concerned is as follows.
Name

Kouichi Ikeda

Hitoshi Ogita
Masatoshi Takahashi
Yoshifumi Nishino

Brief Record

Mar. 2001

Senior Managing Director

Jan. 2002

President and Representative Director

Mar. 2006

Chairman of the Board and Representative Director(to the present)
President and Representative Director(to the present)
Senior Managing Director(to the present)
Managing Director(to the present)
Director

Mar. 2006
Mar. 2006
Mar. 2004
Mar. 2003

Naoki Izumiya

Kazuo Motoyama
Nobuo Yamaguchi
Yukio Okamoto
Sugao Nishikawa
Takahide Sakurai
Naoto Nakamura
Tadashi Ishizaki

Mar. 2004
Mar. 2006
Mar. 1982
Mar. 2000
Mar. 2004
Mar. 1994
Mar. 2003
Mar. 2005

Managing Director(to the present)
Director(to the present)
Director(to the present)
Director(to the present)
Statutory Auditor(to the present)
Statutory Auditor(to the present)
Statutory Auditor(to the present)
Statutory Auditor(to the present)81

Item 7: Revision of Amount of Remuneration for Directors and Statutory Auditors
At two previous Shareholders’ Meetings, shareholders approved ceilings on remuneration paid
to Directors and Statutory Auditors. With respect to Directors, the figure was set at the 76th
Annual Shareholders’ Meeting held on March 30, 2000 and it limited Directors’ remuneration
to a total of ¥30,000,000 per month (which would, however, not include salaries paid for work
done in the role of an employee to a Director who is concurrently a Director and an employee).
With respect to the Statutory Auditors, the figure was set at the 65th Annual Shareholders’Meeting held on March 30, 1989 and it limited Statutory Auditors’ remuneration to a total of¥7,000,000 per month. Both ceilings have remained in effect to date.
As part of a major reevaluation of its remuneration system for Directors and Statutory Auditors,
the Board of Directors made a resolution in its meeting of February 6, 2007 to abolish thestock option system that had been a part of the Company’s remuneration program for Directors
and Statutory Auditors since March 2000.
In addition, with the enforcement of the Corporation Law, the previously used term
“remuneration” was adjusted to “remuneration, etc.” in Paragraph 1, Article 361 and Paragraph
1, Article 387 of that law, defining that term as any and all considerations, including, without
limitation, bonuses, paid to Directors and Statutory Auditors for execution of their duties.
In light of these circumstances, the Company is proposing a revision of Directors’
remuneration, etc. to a maximum of ¥760,000,000 per year (including a maximum of¥50,000,000 for Outside Directors) and of Statutory Auditors’ remuneration to a maximum of¥120,000,000 per year (including a maximum of ¥40,000,000 for Outside Statutory Auditors),
with bonuses paid to Directors and Statutory Auditors included under these figures (the limit
for Directors, however, will not include salaries and bonuses paid for work done in the role ofan employee to a Director who is concurrently a Director and an employee). The Company
believes that these figures are appropriate in light of changes in economic conditions since theadoption of the current ceilings, abolishment of the retirement bonus system and the stock
option system, both being considered at this Annual Shareholders’ Meeting, and the need tobuild a stronger and more effective system of auditing for the Company.
While the number of Directors and Statutory Auditors now stands at 12 (including 3 Outside
Directors) and 5 (including 3 Outside Statutory Auditors), respectively, these numbers will bechanged to 11 (including 2 Outside Directors) and 5 (including 3 Outside Statutory Auditors),
respectively subject to approval of Items 4 and 5 as proposed.

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Item 8: Introduction of a Plan against Large-Scale Purchases of the Shares in the
Company (a framework of takeover defense measures) In order to maintain and enhance its
corporate value and the common interests of shareholders of the Company, the Company isrequesting shareholder approval of a plan against large-scale purchases of the shares in the
Company (the “Plan”).
1. Objectives of this Plan
In light of the fact that the Company is listed on the stock exchanges and its shares are traded
thereon, the Board of Directors of the Company (the “Board”) is not always in a position toautomatically object to a so-called hostile takeover, which is pursued without approval from theBoard provided that such takeover is intended to contribute to the enhancement of theCompany's corporate value and the common interests of shareholders of the Company. Also, theBoard recognizes that the final decision as to whether to accept a proposal for an acquisition ofshares in the Company that would lead to a transfer of control of the Company should be madebased on the will of the shareholders as a whole.
It shall be noted, however, that, as you can see in the recent capital markets aggressive takeovercases forcing through acquisition of a large number of shares in a target company in an abrupt
manner, skipping sufficient talks with and setting of a due process for agreement with the
management of the target company, there are not a few cases of large-scale share purchases thatwould not contribute to the enhancement of the corporate value and the common interests ofshareholders of a company, including ones that would, in light of their purposes, cause obvious
damage to the corporate value and the common interests of shareholders or could effectively
coerce shareholders to sell their shares, ones that the purchaser does not provide information
and/or time reasonably necessary for the target company’s board of directors and shareholders
to review and examine details of the proposed purchase or for the target company’s board of
directors to make an alternative proposal, and ones where the target company’s board of
directors would have to conduct negotiation with the purchaser so as to seek more favorable
terms than those initially proposed by the purchaser.
The initiatives to "create appealing products,” to "care about quality and craftsmanship” and to"convey a sense of joy to customers“, among others, are the source of Asahi Breweries'
corporate value. Underlying these initiatives are the brewing and fermenting technologies andthe research and development capability that Asahi Breweries has accumulated ever since its
establishment, each employee’s experiences and know-how as well as the Company’s uniquecorporate environment that encourages sustained efforts to create the Asahi Breweries Group’s
brand value and its corporate culture based on the close collaboration of labor and management.
All these shall be maintained to enhance the corporate value of the Company. Further, Asahi
Breweries has strengthened investor relations activities, so that its shareholders will become“supporters of Asahi” and thus fostered the trust between the Company and its shareholders. It
is essential to maintain the relations of trust. Given a person intending to conduct a large-scalepurchase of shares in Asahi Breweries and if he/she fails to maintain and enhance thoseelements underlying this trust after acquiring control of the Company, that means the corporate
value of the Company and its Group and the common interests of shareholders would bedamaged. If and when the Board receives a proposal for a large-scale share purchase from an83

outsider, it is necessary for the Board to make a judgment with regard to possible consequenteffects of the purchase on its corporate value and the common interests of shareholders after
properly grasping various matters including effects to value of tangible and intangible resourcesof the Company and its Group, potential effects of forward-looking measures and other items
that constitute the corporate value of the Company and the Group, in addition to the matters
mentioned above.
Based on the factors and matters stated above, the Board determined that it is vital to introduce
a framework for preventing large-scale share purchases that would undermine the corporate
value of the Company and the Group and the common interests of shareholders by enabling
shareholders of the Company to make decisions as to whether to accept a proposal of large-scale
share purchases or entitling the Board to secure the information and time necessary for making
an alternative proposal to the shareholders and conduct negotiations for the interest of and on
behalf of the shareholders.

2. Contents of the Plan
(1) Outline of the Plan(a)

Establishment of Procedures Concerning Exercise of the Plan
The Plan, with a view to enhancing Asahi Breweries' corporate value and the common
interests of shareholders, lays down procedures for measures to be taken in the event that
Asahi Breweries becomes a target of a large-scale purchase of shares or a similar move or a
proposal thereof (hereinafter collectively referred to as a “Purchase”). Such measures
include ① requiring a person conducting the Purchase (hereinafter referred to as a
“Purchaser”) to provide necessary and sufficient information in advance, ② securing timenecessary for gathering and examining information concerning the Purchase, and ③
presenting an alternative proposal to shareholders of the Company or conducting
negotiations with the Purchaser.

(b)

Gratis Allotment of the Stock Acquisition Rights

In the case where a Purchaser has conducted a Purchase without observing andfollowing the procedures set forth in the Plan and where the Purchase is recognized tobring the risk of undermining the corporate value and the common interests of shareholders(for detailed conditions, refer to (3) “Conditions for Gratis Allotment of the Stock
Acquisition Rights” below), the Company may allot gratis to all shareholders at the timeof exercise thereof stock acquisition rights with an exercise condition that the Purchaser
shall not be entitled to exercise those rights and with a provision to the effect that theCompany may acquire the rights from shareholders other than the Purchaser in exchange
for ordinary shares in the Company (hereinafter referred to as the “Stock Acquisition
Rights”)( Key details thereof are explained in (4) “Outline of Gratis Allotment of theStock Acquisition Rights” below) under the method of gratis allotment of stockacquisition rights (as specified in Article 277 and its following articles of the Corporation
Law).
(c) Utilization of the Independent Committee to Prevent Arbitrary Decisions by the Board
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With regard to decisions as to whether to exercise the gratis allotment of the Stock
Acquisition Rights and whether to acquire the allotted rights, the Plan seeks to prevent
arbitrary decisions by the Board by soliciting judgment of the Independent Committee(hereinafter referred to as the “Independent Committee” or the “Committee”) that consistsof experts with a high level of independence from the Board, such as outside directors,
outside statutory auditors and other experts, according to the rules concerning theIndependent Committee (for its outlines, refer to Note 1). The Plan also seeks to ensuretransparency by requiring information disclosure to shareholders at an appropriate time asdetermined by the Independent Committee.
Initially, the Independent Committee will consist of two outside statutory auditors of
the Company, namely, Mr. Naoto Nakamura and Dr. Tadashi Ishizaki and one outside
expert, namely, Mr. Morio Ikeda who is the Senior Advisor to Shiseido Co., Ltd. and the
Chairman of Toyo Eiwa Jogakuin. These three candidates have no special interest in the
Company and have high degree of independence from the management of the Company.
(Note. With regard to the criteria for selecting members of the Independent Committee, theconditions for the Committee’s judgments/decisions and the items subject to theCommittee’s decisions, refer to Note 1).
(d) Exercise by Shareholders of the Stock Acquisition Rights and Acquisition by the Companyof the Allotted Stock Acquisition Rights
In the case where the Stock Acquisition Rights are allotted gratis in accordance withthe provisions of the Plan and shareholders other than the Purchaser exercise the rights, or
the Company acquires the rights in exchange for the shares in the Company allotted toshareholders other than the Purchaser, the ratio of the voting rights held by the Purchaser
may be diluted by approximately 50%.
(2) Procedures concerning exercise of the Plan(a) Scope of Share Purchases subject to the Exercise of the Plan
The Plan shall be applicable to any of the following two types of share purchases (the“Purchase(s)”).
① A purchase of shares (refer to Note 2) in the Company as a result of which thepurchaser’s (shareholder’s) (refer to Note 3) holding ratio (refer to Note 4) will rise to
20% or more of the total outstanding shares in the Company; and② A tender offer (refer to Note 6) for shares (refer to Note 5) in the Company as a resultof which the purchaser’s shareholding ratio (refer to Note 7) targeted by the tender
offer and the holding ratio of its "special affiliates" (refer to Note 8), when combined,
will be 20% or more of the total outstanding shares in the Company.
(b) Request to a Purchaser for Information
A Purchaser contemplating a Purchase as specified in (a) above shall, except when thePurchase is deemed by the Board to be a friendly offer, shall be requested to provide inadvance of commencement of the Purchase a document containing the information
described below (hereinafter referred to as the “Required Information”) and a written
pledge to observe and follow the procedures set forth in the Plan in conducting the Purchasein the form prescribed by the Board (hereinafter referred to as the “Purchase Prospectus”).
The Independent Committee, if it determines that the information provided by the85

Purchaser fails to meet the criteria for the Required Information, may directly or indirectly
ask the Purchaser to provide additional information by a deadline date reasonably
designated by the Committee. In such a case, the Purchaser shall be required to provide
such additional information requested by the said deadline date.
Required Information① Details (including specific names, the shareholding structure and the financial status)of the Purchaser and its group (including co-owners (refer to Note 9), special affiliates
and, in the case where the Purchaser is an investment fund, its partners and othermembers);② The purpose, method and other details of the Purchase (including the proposed value ofthe Purchase, type of consideration, time of the Purchase, structure of relatedtransactions, the legality of the Purchase method and the feasibility of the Purchase andrelated transactions);③ The basis for the calculation of the proposed Purchase price (assumptions for thevaluation, the valuation method, numerical information used in the valuation and theamount of the synergy effects expected to be created as a result of transactions related
to the Purchase) and details of the source of the funds for the Purchase (including thenames of providers of the funds, inclusive of substantive providers, the fund-raising
method and related transactions);④ The profiles of persons whom the Purchaser plans to appoint for management posts(including information concerning such persons’ experiences in the same types ofbusinesses as those in which the Company or the Group is engaged), and the
management policy, business plan, finance plan, capital policy, and dividend policy to
be adopted, after joining the management of the Company;⑤ Whether or not the Purchaser has any plans to change the relations of the Company and
the Group with their stakeholders such as suppliers, customers and employees after thecompletion of the Purchase. If the Purchaser has such plans, the details thereof should
be provided;⑥ Specific measures for avoiding potential conflicts of interest with other shareholders of
the Company; and⑦ Other information reasonably determined as necessary by the Independent Committee.
Once the Independent Committee has determined that the Purchaser has commenced
the Purchase without observing and following the procedures set forth in the Plan, theCommittee shall in principle recommend the Board to exercise gratis allotment of the Stock
Acquisition Rights as specified in (d) ① below, except when there are special grounds forcontinuing to ask the Purchaser to provide the Purchase Prospectus and the Required
Information and conducting consultations and negotiations with the Purchaser.
(c) Examination of Details of the Proposed Purchase, Negotiations with the Purchaser andReview of Alternative Proposals① Request for Information to the Board
If the Purchaser has provided the Purchase Prospectus and the Required Information,
the Independent Committee may ask the Board to express its opinion with regard to thedetails of the Purchase (including an opinion to the effect that the Board reserves its
judgment, as the case may be. The same shall apply hereinafter) and to provide to the86Committee documents and other materials used as a basis for such an opinion and otherinformation determined as required by the Committee within a period prescribed by theCommittee (within 60 days at maximum in principle), for the purpose of conducting acomparative analysis, review and examination of the Purchase Prospectus and the Required
Information provided by the Purchaser and the business plan and the corporate assessment
provided by the Board from the viewpoint of enhancing the corporate value and thecommon interests of shareholders.
② Examination by the Independent Committee
The Independent Committee shall examine the details of the proposed Purchase,gather information concerning the business plans provided by the Purchaser and those
provided by the Board, conduct a comparative analysis, review and examination of thoseplans and examine an alternative proposal made by the Board within 60 days in principle;
provided, however, that the Committee may extend the period in the case of (d) ③ below(hereinafter referred to as the “Independent Committee Review Period”) after receiving
information from the Purchaser and from the Board (in the case where the Committee has
asked the Board to provide information as specified above). Also, the Independent
Committee shall conduct consultations and negotiations with the Purchaser directly or
indirectly if necessary in order to seek better purchase terms from the viewpoint ofenhancing the corporate value and the common interests of shareholders, or present analternative plan made by the Board to shareholders.
In order to ensure that decisions by the Independent Committee will contribute to theenhancement of the Company’s corporate value and shareholders' common interests, theCommittee may seek advice from independent third parties (including financial advisors,certified public accountants, lawyers, consultants and other experts) at the expense of theCompany.
The Purchaser, when asked directly or indirectly by the Independent Committee toprovide materials necessary for reviewing the Purchase and other information and to enter
into consultations and negotiations with the Independent Committee, shall promptly
respond accordingly.
③ Information Disclosure
The Board shall disclose information to the public with regard to the fact of theappearance of a Purchaser and receipt of a Purchase Prospectus from the Purchaser andother information including the Required Information as determined appropriate by the
Independent Committee, at an appropriate time as determined by the Committee.
(d) Procedures to Recommendations to be taken by the Independent Committee
The Independent Committee shall make recommendations to the Board in accordancewith the procedures specified below when a Purchaser appears. In the case where theCommittee has made decisions concerning recommendations specified in ① to ③ below
to the Board and in other cases determined as appropriate by the Committee, theCommittee shall disclose to the public information with regard to the outline of therecommendations and other matters determined as appropriate by the Independent
Committee (including a decision of an extension of the Independent Committee Review
Period and the reason therefor, as the case may be), immediately after making suchdecisions.
① Recommendation of the Independent Committee to Exercise the Plan:
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In the case where the Purchaser has not observed and followed the procedures
specified in the Plan, and in other cases where the Purchase is deemed to meet either of theconditions set forth in (3) “Conditions for Gratis Allotment of the Stock Acquisition
Rights” below as a result of a review of the details of the Purchase by the Committee,
leading the Committee to determine that it is appropriate to allot gratis the Stock
Acquisition Rights, the Committee shall recommend the Board to allot gratis the rights
even before the maturity of the Independent Committee Review Period.
Notwithstanding the above, even after having recommended the Board to allot gratis
the Stock Acquisition Rights but before the starting date of the exercise period for therights (as defined in (f) of (4) “Outline of Gratis Allotment of the Stock Acquisition
Rights”), the Independent Committee may make a new recommendation to the effect thatthe allotment shall be cancelled (in the case where the allotment has not yet taken effect) or
to the effect that the Company acquire the rights gratis (in the case where the allotment has
already taken effect), if the Committee determines that any of the following cases applies.
(i) When the Purchase has ceased to exist as a result of its cancellation by the Purchaser orfor any other reason; or(ii) When there has been a change in the grounds upon which the said recommendations
were based, leading to the situation where the Purchase does not meet any of theconditions set forth in (3) “Conditions for Gratis Allotment of the Stock Acquisition
Rights” below, or where, even if the Purchase meets the said conditions, it isdetermined that it is not appropriate to allot gratis the Stock Acquisition Rights orallow shareholders to exercise the rights, as the case may be.
② Recommendation of the Independent Committee Not to Exercise the Plan
The Independent Committee shall recommend non-exercise of the Plan to the Board
regardless of whether during or after the Independent Committee Review Period if theCommittee determines, as a result of analysis, review and examination of the details of thePurchase and consultations and negotiations with the Purchaser, that the Purchase does notmeet any of the conditions set forth in (3) “Conditions for Gratis Allotment of the Stock
Acquisition Rights” below or that even if the Purchase meets the conditions, it is not
appropriate to exercise the Gratis Allotment of the Stock Acquisition Rights.
Notwithstanding the above, the Committee, even after once having recommended theBoard non-exercise of the Gratis Allotment of the Stock Acquisition Rights, may make a
new decision concerning matters including the recommendation of exercise of the Gratis
Allotment of the Stock Acquisition Rights and present its recommendation to the Board in
the case where there has been a change in the grounds upon which the recommendation of
non-exercise was based, leading to the situation where the Purchase meets any of theconditions set forth in (3) “Conditions for Gratis Allotment of Stock Acquisition
Rights” below.
③ Extension of the Independent Committee Review Period
In the case where the Independent Committee fails to recommend exercise or
non-exercise of the Gratis Allotment of the Stock Acquisition Rights before theIndependent Committee Review Period elapses, the Committee shall make a decision to
the effect that the review period be extended within reasonable limits necessary to review
the details of the Purchase and conduct consultations and negotiations with the Purchaser
and review an alternative proposal made by the Board (the same procedure shall be applied
to any further extension of the review period, if any).
88

If the Independent Committee Review Period is extended based on the decision thus
taken, the Committee shall make its best efforts to gather information, conduct a review
and make a recommendation of exercise or non-exercise of the Gratis Allotment of theStock Acquisition Rights within the extended period.
(e) Decisions by the Board
The Board shall pay its utmost respect to the recommendation made by the
Independent Committee as stated above and promptly make a decision as a statutory bodyunder the Corporation Law with regard to exercise or non-exercise of the Gratis Allotmentof the Stock Acquisition Rights. Until and unless the Board makes a decision on
non-exercise of the Plan, the Purchaser shall be prohibited from conducting the Purchase.
The Board, if it has made a decision as stated above, shall promptly disclose information to
the public with regard to the outline of the decision and other appropriate matters as
determined by the Board.

(3) Conditions for Gratis Allotment of the Stock Acquisition Rights
In the case where the Purchaser’s activities meet either of the cases specified below
and where it is deemed appropriate to allot gratis the Stock Acquisition Rights, theCompany will allot gratis the rights by the resolution of the Board as specified in (e) of (2)“Procedures concerning Exercise of the Plan” above. As specified in (d) of (2)“Procedures concerning Exercise of the Plan” above, the judgment with regard towhether the cases stated below apply and whether it is appropriate to exercise the Gratis
Allotment of the Stock Acquisition Rights shall always be made after a judgment by the
Independent Committee:(a) In the case where the Purchaser does not observe and follow the procedures specified in thePlan;(b) In the case where the Purchase could cause obvious damage to the Company’s corporate
value and the common interests of shareholders by engaging in the activities listed below:① Buying up a large amount of shares in the Company and demanding that the Company
buy them back for unduly high amount of consideration;.
② Controlling the management of the Company temporarily to acquire the Company’s
important assets at unfairly low prices from the Company or acting in other ways thatwould bring profits to the Purchaser at the sacrifice of the Company;③ Using the Company’s assets as collateral of debts owed by the Purchaser or its groupcompanies or as the source of funding for repayments of the same; or④ Controlling the management of the Company temporarily to make it dispose ofhigh-value assets not related to the Company’s current business operations, with a viewto making the Company use the profits thus obtained for paying inflated dividends orwith a view to selling the shares purchased at an inflated price resulting from thepayment of such inflated dividends.
(c) In the case where the Purchaser uses a coercive two-tier purchase method (a takeover offer,such as a tender offer in which the Purchaser makes only a partial acquisition offer, instead89

of an offer for all outstanding shares, in the first stage, and sets less favorable terms orleaves details of the second stage unclear at the time of the first stage, as a way to prompt
shareholders to sell off their shares early) and other means that could in effect coerce
shareholders to sell their shares;(d) In the case where the Purchaser does not grant the Board a period of time reasonably
necessary for the Board to present an alternative proposal to the Purchase;(e) In the case where shareholders of the Company are not provided with the Required
Information and other information considered as reasonably necessary for them to make adecision with regard to the Purchase, or where the information provided to shareholders issubstantially insufficient;(f) In the case where the terms of the Purchase (including the value of the Purchase, the type ofthe consideration, the date of the Purchase, the legality of the Purchase method and thefeasibility of the Purchase and related transactions, the management policy and businessplan to be adopted after the completion of the Purchase and the policy concerning thetreatment after the Purchase of stakeholders including shareholders, employees andsuppliers) are substantially unfair or inappropriate in light of the fundamental value of theCompany; and(g) In the case where the Purchase has a serious risk of undermining the Company’s corporate
value and the common interests of shareholders by damaging the Company’s relations with
its employees and suppliers that are vital to the creation of its corporate value or by
destroying its corporate culture.

(4) Outline of Gratis Allotment of the Stock Acquisition Rights
The outline of the Gratis Allotment of the Stock Acquisition Rights under the Plan is
described below:(a) Number of Stock Acquisition Rights to Be Allotted
The number of the Stock Acquisition Rights to be allotted gratis under the Plan shallbe the same as the total number of the Company’s shares outstanding (excluding shares
held by the Company as treasury stock) on the date that shall be separately set by the Board(hereinafter referred to as the “Allotment Date”) in a Board decision concerning the Gratis
Allotment of the Stock Acquisition Rights (hereinafter referred to as the “Decision on
Rights Allotment”).
(b) Shareholders Entitled to be Allotted Stock Acquisition Rights
Shareholders whose names are registered or recorded in the registry of shareholders or
the registry of beneficial shareholders of the Company as of the Allotment Date shall beallotted gratis one (1) Stock Acquisition Right per each share in the Company held by
them.

90

(c) Effective Date of the Gratis Allotment of the Stock Acquisition Rights
The effective date of the Gratis Allotment of the Stock Acquisition Rights shall beseparately set by the Board in the Decision on Rights Allotment.
(d) Number of Shares to be Allotted for Each Stock Acquisition Right
The number of shares in the Company (refer to Note 10) to be allotted for each Stock
Acquisition Right (hereinafter referred to as the “Applicable Number”) shall be one (1).
(e) Value of Assets to Be Paid In upon Exercise of the Stock Acquisition Rights
The assets to be paid in upon the exercise of the Stock Acquisition Rights shall bemonetary currency, and the per-share price shall be separately determined by the Board in
the Decision on Rights Allotment. The per-share price shall be one yen (¥1) or higher but
not higher than half of the then fair per-share market price of the Company. “The fairper-share market price” shall be equivalent to the average of the closing prices of commonshares in the Company in regular trading on the Tokyo Stock Exchange during the 90-day
period, excluding days on which no trading was done, prior to the date of the Decision on
the Rights Allotment. A fraction portion smaller than one yen (¥1) shall be rounded up.
(f) Exercise Period for the Stock Acquisition Rights
The start date of the exercise period for the Stock Acquisition Rights (the “Start
Date”) shall be separately determined by the Board in the Decision on Rights Allotment.
The period therefor shall be separately determined by the Board in the Decision on Rights
Allotment within a range of 1 (one) to 3 (three) months. Notwithstanding the above, in theevent that the Company acquires the Stock Acquisition Rights allotted in accordance withthe provisions of (i) below, the exercise period for the rights shall expire on the previous
day of the date of such acquisition. In the case where the last day of the exercise period
falls on a non-business day for the financial institutions that accept the payment for the
exercise of the Stock Acquisition Rights, the last business day before that date shall be thelast day of the exercise period.
(g) Conditions for Exercise of the Stock Acquisition Rights
A person who fits any of the following descriptions shall not in principle be entitled toexercise the Stock Acquisition Rights:(I) a Large-Scale Shareholder (refer to Note 11);(II) a Co-Owner of a Large-Scale Shareholder;(III) a Large-Scale Purchaser (refer to Note 12);(IV) a Special Affiliate of a Large-Scale Purchaser;(V) a person to whom the Stock Acquisition Rights were transferred from a person who
fits any of the descriptions specified in (I) to (IV) above without approval from theBoard; and(VI) a person who is related to a party who fits any of the descriptions specified in (I) to(V) above (refer to Note 13).
(A person who fits any of the descriptions specified in (I) to (VI) above shall behereinafter referred to as the “Ineligible Person.”)In addition, non-residents who are required under applicable foreign laws to follow
prescribed procedures with regard to the exercise of the Stock Acquisitions Rights shall notin principle be eligible to exercise the rights. (However, certain persons including those
who are eligible for exemption from the said applicable laws concerned shall be eligible to91

exercise the rights, and the rights held by non-residents may be acquired by the Company
in exchange for shares in the Company as specified in (i) below.)(h) Restriction on Transfer of the Stock Acquisition Rights
Transfer of the Stock Acquisition Rights shall be subject to approval by the Board.
(i) Acquisition of the Stock Acquisition Rights by the Company① The Company may acquire all the Stock Acquisition Rights gratis at any time until theprevious day of the Start Date, upon a date to be separately determined by the Board, in thecase where the Board determines it is appropriate to acquire the rights.
② Upon a date to be separately determined by the Board, the Company may acquire all of
those Stock Acquisition Rights that are held by persons other than Ineligible Persons
and that remain unexercised as of the previous day of the said designated date and allot
them shares in the Company in exchange, with an exchange ratio of the Applicable
Number of shares to each one right.
When the Board determines that there are persons other than Ineligible Persons who still
hold the Stock Acquisition Rights after the Company’s acquisition of the rights
mentioned above, the Company may, upon a date that is subsequent to the said
acquisition and that shall be separately determined by the Board, acquire all of the Stock
Acquisition Rights that are still held by those persons and that remain unexercised as ofthe previous day of the said designated date. The same arrangement shall apply
thereafter.

(5) Effective Period of the Plan and Abrogation of, Amendment to and Alteration of thePlan
The Plan shall be effective until the close of the Company’s annual shareholders’ meetingthat concerns the last one of the Company’s business years that end within three years fromthe close of this Annual Shareholders’ Meeting.
Notwithstanding the above, the Company may abrogate the Plan even before the effective
period expires upon a decision thereof by the Board. Also, the Board may amend or alter
the Plan during its effective period subject to approval by the Independent Committee.
When the Plan is thus abrogated, amended or altered, the Company shall promptly disclose
to the public information with regard to the background of such abrogation, amendment oralteration, as the case may be, and, in the case of amendment or alteration, the outline ofsuch amendment or alteration and other necessary matters.

(6) Modification of the Plan due to Changes in Laws and Regulations
The provisions of the laws and regulations cited above are those that are effective as
92

of February 6, 2007. If any need arises thereafter for modification of the provisions and/or
terms specified in each of the above items due to the enactment of new laws andregulations or amendment to or abolition of existing laws and regulations, the Board mayrevise or modify the said provisions and terms as necessary within the reasonable limits
with due consideration for the purpose of the said enactment of, amendment to and/or
abolition of relevant laws and regulations.

(7) Other items
The Company’s Board of Directors shall have the authority to stipulate the details of thePlan.

(Note 1) The rules concerning the Independent Committee will contain the followings:
z The Independent Committee shall be established by a resolution of the Board.
z The Independent Committee shall consist of three or more members appointed by the
Board from among (i) the Company's outside directors, (ii) its outside statutory auditors
and/or (iii) experts, all of whom shall be independent from the Board that is in charge of
execution of the Company’s business. The experts shall be either experienced company
executives, professionals with expertise in investment banking, lawyers, certified public
accountants, researchers majoring in the Corporation Law, or persons with similar
qualifications thereto. The experts appointed shall conclude a contract, separately
prescribed by the Board, containing a duty of care clause, with the Company.
z The term of office for the members of the Independent Committee shall be until the closeof the annual shareholders' meeting concerning the last of the business years that end
within three years from their appointment. This shall, however, not apply when determinedotherwise by the Board. The term of office for the members of the Independent Committee
appointed from among the Company's outside directors and outside statutory auditors shall
expire when they cease to be outside directors and outside statutory auditors, respectively(except when they are reappointed).
z The Independent Committee shall make decisions with regard to the following items andmake a recommendation thereof to the Board with reasons therefor attached. The Board
shall pay its utmost respect to the recommendation provided by the Independent Committee
in making its decision as a statutory body under the Corporation Law whether to exercise
the Gratis Allotment of the Stock Acquisition Rights. Each of the members of the
Independent Committee and the Board shall make his/her decision with regard to thesematters from the viewpoint of enhancing the Company’s corporate value and the common
interests of shareholders, and in no event for the purpose of benefiting personal interests of
his/her own or members of the Board:① Whether to exercise the Gratis Allotment of the Stock Acquisition Rights;② Cancellation of the Stock Acquisition Rights or gratis acquisition of the allotted rights;
and③ Other matters which are subject to decisions by the Board and which the Board has
asked the Independent Committee to review for its recommendation.
z In addition to making a judgment with regard to the items listed above, the Independent
Committee may conduct the following:
93

z

z

z

z

z
z

① Judgment with regard to whether a purchase is a Purchase which is subject to the Plan;② Decision of extension of the Independent Committee Review Period;③ Designation of information a Purchaser and the Board, respectively, shall provide to
the Committee and a deadline date thereof;④ Review and examination of the details of a Purchase;⑤ Consultations and negotiations with a Purchaser;⑥ Requiring the Board to present an alternative proposal to the Purchase concerned andreviewing the same;⑦ Approval to amendment to or alteration of the Plan; provided, however, that any
alteration shall be within the limits reasonably deemed as necessary due to a change inlaws and regulations including the Corporation Law and the Securities and Exchange
Law or stock exchange rules, a change in interpretation and enforcement thereof, or achange in taxation or judicial precedents;⑧ Other matters which the Independent Committee is authorized to conduct under thePlan; and⑨ Matters separately determined by the Board as fit to be conducted by the Independent
Committee.
When the Independent Committee determines that the Purchase Prospectus and otherinformation provided by a Purchaser are insufficient, the Committee shall ask the Purchaser
to provide additional information. Once the Purchaser has provided to the Committee thePurchase Prospectus and the necessary additional information required by the Committee,
the Committee may also ask the Board to submit, within a prescribed reasonable period oftime, its opinion with regard to the details of the Purchase and supporting materials thereof
and to present an alternative proposal (if any) and provide information concerning othermatters determined as necessary by the Committee.
The Independent Committee shall directly or indirectly conduct consultations andnegotiations with the Purchaser if necessary in order to seek more favorable purchase terms
from the viewpoint of enhancing the Company’s corporate value and the common interestsof shareholders. The Committee shall also present any proposal made by the Board toshareholders.
In order to gather necessary information, the Independent Committee may summon
directors, statutory auditors and employees of the Company and other persons as
determined as necessary by the Committee and request them to give explanations withregard to necessary matters.
The Independent Committee may seek advice from independent third parties (including
financial advisors, certified public accountants, lawyers, consultants and other experts) at
the expense of the Company.
Each member of the Independent Committee may convene a meeting of the Committee
when a Purchase is conducted or on any other occasion.
The Independent Committee shall in principle make its decisions by a majority vote withall the Committee members present. Should there be an unavoidable situation, however, theIndependent Committee shall make its decision by a majority vote with a majority of all the
Committee members present.

(Note 2) As defined in Paragraph 1, Article 27-23 of the Securities and Exchange Law. The
same shall also apply elsewhere in this Agenda Item unless otherwise specified.
94

(Note 3) Including shareholders as defined in Paragraph 3, Article 27-23 of the Securities andExchange Law (also including shareholders as so recognized by the Board). The same
shall also apply elsewhere in this Agenda Item.
(Note 4) As defined in Paragraph 4, Article 27-23 of the Securities and Exchange Law. The
same shall also apply elsewhere in this Agenda Item.

(Note 5) As defined in Paragraph 1, Article 27-2 of the Securities and Exchange Law. The
same shall also apply in 2. (2) (a)and Note 12 in this Agenda Item.

(Note 6) As defined in Paragraph 6, Article 27-2 of the Securities and Exchange Law. The
same shall also apply elsewhere in this Agenda Item.
(Note 7) As defined in Paragraph 8, Article 27-2 of the Securities and Exchange Law. The
same shall also apply elsewhere in this Agenda Item.
(Note 8) As defined in Paragraph 7, Article 27-2 of the Securities and Exchange Law(including special affiliates as so recognized by the Board); provided however, thatwith regard to special affiliates as defined in Item 1 of the same paragraph, those
thereof that fit the definition specified in Paragraph 2, Article 3 of the Cabinet Orderconcerning the disclosure of tender offers for shares in companies by persons otherthan the issuer shall be excluded. The same shall also apply elsewhere in this Agenda
Item.

(Note 9) As defined in Paragraph 5, Article 27-23 of the Securities and Exchange Law,
including those deemed "co-owners" as defined in Paragraph 6 of the same article(also including co-owners as so recognized by the Board). The same definition shallalso apply elsewhere in this Agenda Item.
(Note 10) If and when the Company becomes a class-stock issuer (as defined in Item 13 of
Article 2, the Corporation Law) in the future, shares that fit the description in eitherof the following two items shall be the same type of shares as the type of theCompany shares issued and outstanding as of the date of this Annual Shareholders’Meeting (namely, common shares).
The Company shares to be allotted upon the exercise of the Stock Acquisition
RightsThe Company shares to be allotted in exchange for the Company’s acquisition of
the Stock Acquisition Rights.
(Note 11) The term “Large-Scale Shareholder” means a shareholder of share certificates, etc.
95

issued by the Company, whose holding ratio of share certificates, etc. pertaining to
the said share certificates, etc. is 20% or higher (including a person deemed by the
Board to be such a holder); provided, however, that shareholders whose acquisitionor holding of Company’s share certificates, etc. is considered by the Board not to beagainst the corporate values and the common interests of shareholders of theCompany and shareholders who are specifically designated by the Board in theDecision on the Rights Allotment shall be excluded from the scope of theLarge-Scale Shareholders. The same shall also apply elsewhere in this Agenda Item.

(Note 12) The term “Large-Scale Purchaser” means a purchaser who has announced a purchase,
etc. (as defined in Paragraph 1, Article 27-2 of the Securities and Exchange Law;
hereinafter the same shall apply in this Agenda Item) of Share Certificates, etc issued
by the Company by means of a Tender Offer and whose Ratio of Ownership of Share
Certificates, etc. pertaining to the Share Certificates, etc. after the completion of thesaid Purchase, etc. (including similar cases as specified in Paragraph 1, Article 7 of
the Order for Enforcement of the Securities and Exchange Law), when combinedwith the Ratio of Ownership of Share Certificates, etc. of the Special Affiliates
thereof, is contemplated to stand at 20% or higher (including a person deemed by the
Board to be such a Purchaser) ; provided, however, that shareholders whose
acquisition or holding of Company’s share certificates, etc. is considered by the
Board not to be against the corporate values and the common interests ofshareholders of the Company and shareholders who are specifically designated by the
Board in the Decision on Rights Allotment shall be excluded from the scope of theLarge-Scale Shareholders. The same shall also apply elsewhere in this Agenda Item.
.
(Note 13) A person is a “related party” to another, if the former essentially controls, iscontrolled by or under the common control with the latter (including a person
deemed by the Board to be such a person), or a person recognized by the Board to be
acting in concert with the said party.

96

<Reference>

Profiles of the Members of the Independent Committee
The three initial members of the Independent Committee are proposed as follows:○ Mr. Naoto Nakamura
Partner, Attorney at Law
Nakamura, Tsunoda & Matsumoto Law Offices
Born on January 25th, 1960
<Profile>
October 1982
April 1985

April 1998
February 2003

March 2003
June 2004
June 2006

Passed bar examination
Graduated from the Legal Research and Training Institute
Registered the Daini Tokyo Bar Association
Joined the Mori Sogo Law Offices
Established the Hibiya Park Law Offices (engaged as a partner)
Established the Naoto Nakamura Law Offices (present Nakamura,Tsunoda & Matsumoto Law Offices) (engaged as a partner)(to the present)
Outside Statutory Auditor of Asahi Breweries, Ltd. (to thepresent)
Outside Director of Eisai Co., Ltd. (to the present)
Outside Statutory Auditor of Mitsui & Co., Ltd. (to the present)

Mr. Naoto Nakamura is an outside statutory auditor who meets the requirement for an
outside statutory auditor candidate prescribed in item 8, paragraph 3, Article 2 of the Ordinancefor Enforcement of the Corporation Law. Mr. Nakamura will be reappointed as a statutory
auditor at the 83rd Annual Shareholders’ Meeting of Asahi Breweries, Ltd subject to approval atthat Meeting.
Mr. Nakamura has no special interest in the Company.

○ Dr. Tadashi Ishizaki
Professor, Faculty of Commerce, Chuo University
Born on June 2nd, 1941
<Profile>
April 1970
April 1972
April 1973
April 1982
April 1986
April 2000
March 2005

Assistant, Faculty of Commerce, Chuo University
Instructor, Faculty of Commerce, Chuo University
Associate Professor, Faculty of Commerce, Chuo University
Professor, Faculty of Commerce, Chuo University (to the present)
Professor, Graduate School of Commerce, Chuo University (tothe present)
Director of the Institute of Business Research, Chuo University
Statutory Auditor of Asahi Breweries, Ltd. (to the present)97Dr. Tadashi Ishizaki is an outside statutory auditor who meets the requirement for an
outside statutory auditor candidate prescribed in item 8, paragraph 3, Article 2 of the Ordinancefor Enforcement of the Corporation Law.
Dr. Ishizaki has no special interest in the Company.

○ Mr. Morio Ikeda
Senior Advisor to Shiseido Co., Ltd.
Chairman of Toyo Eiwa Jogakuin
Born on December 25th, 1936
<Profile>
April 1961
June 1990
June 1995
June 1997
June 2000
June 2001
June 2005

June 2006

Joined Shiseido Co., Ltd.
Director of Shiseido Co., Ltd.
Executive Director (Jomu-Torishimariyaku) of Shiseido Co., Ltd.
Senior Executive Director (Senmu-Torishimariyaku) of ShiseidoCo., Ltd.
Representative Director & Vice President of Shiseido Co., Ltd.
Representative Director, President & CEO of Shiseido Co., Ltd.
Director & Chairman of Shiseido Co., Ltd.
Director of Komatsu Ltd. (to the present)
Chairman of Toyo Eiwa Jogakuin (to the present)
Senior Advisor to Shiseido Co., Ltd. (to the present)

Major public duties of Mr. Ikeda are as follows:
Vice Chairman of Tokyo Chamber of Commerce and Industry, Special Advisor to theJapan Chamber of Commerce and Industry, Vice Chairmen of the Board of Councillors, Nippon
Keidanren, Chairman of the Vocational Education Promotion Association, Acting Chairman of
the Education Rebuilding Council, Manager of Keizai Doyukai (Japan Association of Corporate
Executives), and Vice-Representative of Congressional Forum for New Japan (21 Seiki Rincho)
Mr. Ikeda has no special interest in the Company.

98Reminders to Shareholders for Online Voting* The online voting site and Help Desk information is only available in Japanese.

Dear Shareholder,
Please check the points listed below when exercising your voting rights via Internet.
1. Online voting is only available by accessing the website noted below. This site is alsoavailable through Internet via cellular phone.
Online voting site URL: http://www.webdk.net* If your cellular phone is equipped with a barcode reader, you
may use the ”QR code” at right in order to access the online
voting site. For more detailed information on that procedure,please refer to the user’s manual for your phone.
2. When voting online, enter the voting code and password indicated on the enclosed voting
form. Then indicate your consent/dissent for each item by following instructions displayed onscreen.
3. Online votes are acceptable until the day immediately prior to the date of the Annual
Shareholders’ Meeting (deadline of online voting: 5:30 p.m., March 26, 2007, Tokyo time).
However, voting in advance will be highly appreciated for our convenience in vote counting.
4. In the event that a vote is exercised in duplicate via online and via enclosed voting form, theonline vote shall only be effective.
5. In the event that more than one online vote is exercised (including via PC and via cellular
phone), the latest vote shall only be effective.
6. Any costs related to connecting to your Internet provider, as well as communication charges(including telephone charges) for accessing the online voting site, will be borne by theshareholder.
7. Shareholders who are willing to receive notices of shareholders’ meetings by e-mail from thenext time may so register on the online voting site.
System Requirements for Online Voting
The following system environments are required for accessing the online voting site.
(1) Access to Internet.
(2) In case of vote via PC, Microsoft® Internet Explorer version 5.5 or newer version, orNetscape® 6.2 or newer version as a browser software with hardware compatible with them.
99

(3) In case of vote via cellular phone, 128-bit SSL communication (encrypted communication)compatible model.
(For security purposes, only 128-bit SSL communication compatible phones are accessible
to the online voting system. Other models may not be compatible with this system.)(Microsoft is a registered trademark of Microsoft Corporation in the United States and othercountries. Netscape is a registered trademark of Netscape Communications Corporation in the
United States and other countries.)

Inquiries for Online Voting
Please contact the following Help Desk for inquiries about online voting.
Agent to Manage Shareholders Registry:
The Sumitomo Trust & Banking Co., Ltd.
Stock Transfer Agency Department (Help Desk)
Phone (toll-free in Japan): 0120-186-417 (24 hours accessible)

100Location Map to the Venue of the Annual Shareholders'Meeting
Asahi Breweries, Ltd.
Location: Banquet Room“Tsuru,”The Main Banquet Floor
Hotel New Otani, 4-1 Kioi-cho, Chiyoda-ku, Tokyo
TEL 03-3265-1111
URL http://www.newotani.co.jp/tokyo/

On Foot
１. Kojimachi Station (Exit No.２)
Yurakucho Line, Tokyo Metro
２. Nagatacho Station (Exit No.７)
Yurakucho, Hanzomon or Nanboku Line, Tokyo Metro
３. Akasaka-mitsuke Station (Exit Ｄ to Kioi-cho)Marunouchi or Ginza Line, Tokyo Metro
４. Yotsuya Station (Exit No.１)
Marunouchi or Nanboku Line, Tokyo Metro
５. Yotsuya Station (Kojimachi Exit)
JR Chuo or Sobu Line
６. Yotsuya Station (Akasaka Exit)
JR Chuo or Sobu Line

９ minutes
10 minutes
10 minutes
９ minutes
９ minutes
９ minutes

Note: It is anticipated that the streets and parking lots in the area will be crowded
on the day of the meeting. We respectfully request that you do not come by car.

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