English Translation of Original JapaneseThis is a translation of the original notice in Japanese. In the event of any discrepancy, the original
notice in Japanese shall prevail.

ASAHI GROUP HOLDINGS, LTD.
(Securities Code: 2502)
March 4, 2013
Dear Shareholders:

CONVOCATION NOTICE OF
THE 89th ANNUAL GENERAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the Annual General Meeting of Shareholders of Asahi Group
Holdings, Ltd. (the “Company”), which will be held as described in the Particulars below.
If you can attend the meeting, please submit the enclosed voting form directly at the meeting.
If you are unable to attend the meeting in person, you may exercise your voting rights via
either postal mail or Internet. Please review the attached “REFERENCE MATERIALS FOR
ANNUAL GENERAL MEETING OF SHAREHOLDERS”, and exercise your voting rights
no later than 5:30 p.m., March 25 (Monday), 2013 (JST) by following the “Guide to
Exercising Voting Rights” on page 3.
Sincerely,
Naoki Izumiya,President and Representative Director
ASAHI GROUP HOLDINGS, LTD.
23-1, Azumabashi 1-chome, Sumida-ku, TokyoPARTICULARS
1. DATE AND TIME
March 26 (Tuesday), 2013, at 1:00 p.m. (JST)
2. PLACE
Banquet Room “Tsuru”, Main Banquet Floor of Hotel New Otani, 4-1, Kioi-cho, Chiyoda-ku, Tokyo(Please note that if Banquet Room “Tsuru” becomes full, you will be guided to another venue.)
3. PURPOSES
Items to Be Reported:
Business Report, Consolidated Financial Statements, Non-Consolidated Financial
Statements and reports of the audit results of the consolidated financial statements by
the Independent Auditor and the Board of Auditors for the 89th term, from January 1,
2012 to December 31, 2012.
Items to Be Resolved:
Item 1: Appropriation of surplus
Item 2: Election of eleven (11) Directors
Item 3: Election of one (1) Corporate Auditor
1*Please see the additional notes on the following page.

On the day of the Meeting, please submit the voting form at the reception desk. Please also bring this Notice with you, to help us
preserve resources.
You are advised to arrive at the venue early, as the reception desk is expected to become extremely crowded immediately before
the commencement of the Meeting. (The reception desk will open at 11:30 a.m.)
Please note that anyone other than a shareholder who is entitled to exercise voting rights (e.g., non-shareholding proxy, person
accompanying the shareholder) will not be allowed inside the venue.
Corrections to Reference Materials for General Meeting of Shareholders, Business Report, Consolidated Financial Statements, and
Non-Consolidated Financial Statements, if any, will be posted on the Company’s website (http://www.asahigroup-holdings.com/).

The Notice of the resolutions at the 89th Annual General Meeting of Shareholders is scheduled to be included in the “Asahi
Super Report – Spring 2013” to be mailed out after the Annual General Meeting of Shareholders.

2Guide to Exercising Voting Rights* The online voting site and Help Desk information are available only in Japanese.
Please exercise your voting right,
which is the right to participate in the Company’s management.
A voting right at the General Meeting of Shareholders is an important right that entitles
shareholders to participate in the Company’s management.
Please exercise your voting right by referring to the following three methods.
Attending the General Meeting of Shareholders in person
Please submit the voting form at the reception desk at the venue.
Voting via Postal Mail
Please indicate your consent/dissent concerning the items shown on the voting form, and sendback the form so that it will arrive no later than 5:30 p.m., March 25 (Monday), 2013 (JST).
Voting via Internet(1) Accessing the voting website
Online voting is available only by accessing the website noted below. This website may beaccessed from a computer or a cellular phone. (Please note that the connection fees with theInternet service providers and communication fees, such as telephone bills, should be borne by
the shareholders when using the online voting website.)
Online voting website: http://www.web54.net* If your cellular phone is equipped with a barcode reader, you
may use the two-dimensional code at right in order to access theonline voting website. For more detailed information on thatprocedure, please refer to your cellular phone’s user manual.
(2) Entering your “voting code” and “password”
Enter the voting code and password indicated on the voting form. Then indicate yourconsent/dissent concerning each item by following the instructions displayed on the screen.
Enter the voting code indicated on the voting form and click “Log in”.
Enter the password indicated on the voting form and click on “Continue”.
Follow the instructions on the screen to cast your vote.
Shareholders who wish to receive the convocation notices of Annual General Meetings ofShareholders by e-mail beginning with the next meeting may so register on the e-mail address
registration website noted below. Please note that the site cannot be accessed via cellular phone.
E-mail address registration website: http://www.web5106.net
Please note that shareholders who received the notice of upcoming Annual General Meeting of
Shareholders by e-mail will not find the “password” referred to in (2) above on their voting
form. These shareholders are asked to enter the password that they specified when registering
their e-mail address.

3

Deadline for Exercising Voting Rights via the Internet
No later than 5:30 p.m., March 25 (Monday), 2013 (JST)(Day before the Annual General Meeting of Shareholders)Q. What happens if I exercise my voting right not only via postal mail but also via the Internet?
A. If you exercise your voting right in duplicate (i.e., voting online as well as voting by using
the voting form), only the online vote will be counted.
Q. I can exercise my voting right online more than once. Will all my voting attempts beconsidered valid?
A. If you exercise your voting right online more than once or in duplicate (voting via PC andvoting via cellular phone), only the most recent vote will be counted.

System Requirements for Online Voting
When voting online, please ensure that your system satisfies the relevant system requirements.
(1) Voting via PC
Screen resolution of 800 (horizontal) x 600 (vertical) pixels (SVGA) or higher, Microsoft®
Internet Explorer Ver. 5.01 SP2 or newer as the browser software, and Adobe® Acrobat®
Reader™ Ver. 4.0 or newer or Adobe® Reader® Ver. 6.0 or newer as the PDF file browser.
*If your browser's “pop-up Blocker” function, or a similar add-on, is enabled, please disable(or temporarily disable) this function.
(2) Voting via cellular phone
Internet connectivity via i-mode, EZweb, or Yahoo!Keitai, and compatibility with a 128-bit
SSL (Secure Socket Layer) communication protocol (encrypted communication).
*While voting via smartphones and other cellular phones with full browser functionality is
supported in principle, we cannot guarantee compatibility with all available models.

Inquiries for Online Voting
Please contact the following Help Desk for inquiries about online voting.
Sumitomo Mitsui Trust Bank, Limited
Stock Transfer Web Support Phone No.
Toll-free (within Japan): 0120-652-031 (9:00 a.m. to 9:00 p.m.) (JST)* The online voting website and Help Desk information are available only in Japanese.

4

REFERENCE MATERIALSFOR ANNUAL GENERAL MEETING OF SHAREHOLDERS
Agenda Items and Reference Information
Item 1: Appropriation of surplus
The Company proposes the appropriation of surplus in the following manner:
1. Year-end dividends
As a holding company of the Group (the Company, its subsidiaries and its affiliates arecollectively referred as the “Group” or the “Asahi Group”) , the Company placed priority on
returning profit to shareholders in its “Medium-Term Business plan 2012”, which ended with thecurrent fiscal year, and adhered to a basic policy of implementing returns to shareholders with thebusiness performance taken into account while seeking enhanced profitability and stronger
financial conditions of the Group. Further, the Company continually strived to ensure sustainable
and stable dividend payments while fulfilling the benchmark of 20% or more in the consolidated
payout ratio. Based on the aforementioned policy and taking into consideration a variety of factors,
including the Company’s consolidated financial condition and achievement for the fiscal year
under review, the Company proposes a year-end dividend of ¥14.0 per share, as follows:(1) Type of dividend asset
Cash(2) Allocation of dividend assets to shareholders and total amount of allocation¥14.0 per share of common stock

Total amount of payout: ¥6,523,641,292

Since the Company previously paid out ¥14.0 per share as an interim-period dividend, the total
dividend for the fiscal year under review will amount to ¥28.0 per share, which is an increase of¥3.0 per share from the previous fiscal year.
(3) Effective date of dividend payment
March 27, 2013

5

Item 2: Election of eleven (11) Directors
At the conclusion of this Annual General Meeting of Shareholders, the terms of office of all the
Directors will expire. The Company therefore asks the shareholders to elect eleven (11)Directors.
The candidates for the position of Director are as follows. Among these, the candidates for
position for Outside Director meet the requirements for independent directors/auditors as
defined by the Tokyo Stock Exchange and the Osaka Securities Exchange.

Candidatenumber1

Name(Date of birth)

HitoshiOgita(January 1,
1942)

Career summary and significant concurrent
positions held by the candidate

Apr. 1965

Entered the Company

Mar. 1997

Director, General Manager of
Fukuoka Branch

Sep. 1997

Director, Senior General
Manager of Kyushu Regional
Headquarters

Mar. 2000

Managing Corporate Officer,
Senior General Manager ofKyushu Regional Headquarters

Oct. 2000

Managing Corporate Officer,
Senior General Manager ofKanshin-etsu Regional
Headquarters

Mar. 2002

Senior Managing Corporate
Officer, Senior General Manager
of Kanshin-etsu Regional
Headquarters

Sep. 2002

Corporate Officer, Vice
President of Asahi Soft Drinks
Co., Ltd.

Mar. 2003

President and Representative
Director of Asahi Soft Drinks
Co., Ltd.

Mar. 2006

President and Representative
Director of the Company

Mar. 2010

Chairman of the Board andRepresentative Director(to the present)<Significant concurrent positions>
Outside Director of NEC Corporation
Outside Director of Imperial Hotel, Ltd.
Position: Chairman and Representative Director
Responsibility: Overall Group Management

6

Number ofshares in theNotes toCompany
Appointment
owned by thecandidate

52,000

Reappointment

Candidate
number2

Name(Date of birth)

Naoki
Izumiya(August 9,
1948)

Career summary and significant concurrent
positions held by the candidate

Apr. 1972

Entered the Company

Mar. 2000

Corporate Officer, Senior
General Manager of GroupManagement Strategy
Headquarters

Oct. 2000

Corporate Officer, Senior
General Manager of Strategy
Planning Headquarters

Sep. 2001

Corporate Officer, Deputy
General Manager of Shutoken
Regional Headquarters, General
Manager of Tokyo BranchMar. 2003

Director

Mar. 2004

Managing Director

Mar. 2006

Managing Director, Managing
Corporate Officer, Senior
General Manager of Liquor Sales& Marketing Headquarters

Mar. 2009

Senior Managing Director,
Senior Managing Corporate
OfficerMar. 2010

President and Representative
Director

Number ofshares in theNotes toCompany
Appointment
owned by thecandidate

46,900(to the present)
Position: President and Representative Director
Responsibilities: Overall Group Management
Group Food Business

7

Reappointment

Candidate
numberName(Date of birth)

Katsuyuki
Kawatsura
3(October 1,
1950)

Career summary and significant concurrent
positions held by the candidate

Apr. 1975

Entered the Company

Mar. 2005

Corporate Officer, Senior
General Manager of Product &Technology Development
Headquarters

Oct. 2007

Corporate Officer, Senior
General Manager of Research &Development Headquarters for
Alcoholic Beverages

Jul. 2008

Corporate Officer, Senior
General Manager of Research &Development Headquarters

Mar. 2009Managing Corporate Officer,
Senior General Manager ofResearch & Development
Headquarters

Mar. 2010

Managing Director, Managing
Corporate Officer, Senior
General Manager of Research &Development Headquarters

Mar. 2011

Managing Director, Managing
Corporate Officer, Senior
General Manager of Research &Development Headquarters,
Senior General Manager of
Production Headquarters

Jul. 2011

Managing Director, Managing
Corporate Officer

Number ofshares in theNotes toCompany
Appointment
owned by thecandidate

10,100

Reappointment(to the present)
Position: Managing Director, Managing Corporate Officer
Responsibilities: Procurement Section, Production Section, Research & Development
Section, Intellectual Property Section, Quality Assurance Section

8

Candidate
number4

Name(Date of birth)

ToshioKodato(September
20, 1954)

Career summary and significant concurrent
positions held by the candidate

Apr. 1978

Entered the Company

Mar. 2008

Corporate Officer, Senior
General Manager of Shikoku
Regional Headquarters

Sep. 2009

Corporate Officer, Senior Deputy
General Manager of International
Headquarters

Mar. 2010

Director, Corporate Officer,
Senior General Manager ofInternational Headquarters

Jul. 2011

Number ofshares in theNotes toCompany
Appointment
owned by thecandidate

7,200

Reappointment

Director, Corporate Officer(to the present)

Position: Director, Corporate Officer
Responsibilities: Legal Affairs Management Section, Public Relations Section,
International Business Section
Group International Operations

9

Candidate
number5

Name(Date of birth)

Shiro
Ikeda
(November
25, 1956)

Career summary and significant concurrent
positions held by the candidate

Apr. 1980

Entered the Company

Mar. 2009

Corporate Officer, Senior
General Manager of Marketing
Headquarters, General Manager
of Product Development
Department I

Sep. 2010

Corporate Officer, Senior
General Manager of Marketing
Headquarters

Jul. 2011

Director, Corporate Officer,
Senior General Manager ofMarketing Headquarters of Asahi
Breweries, Ltd.

Mar. 2012

Director, Corporate Officer of theCompany

Number ofshares in theNotes toCompany
Appointment
owned by thecandidate

4,600

Reappointment(to the present)<Significant concurrent positions>
Director of Asahi Soft Drinks Co., Ltd.
Director of Calpis Co., Ltd.
Director of LB Co., Ltd.
Position: Director, Corporate Officer
Responsibilities: Audit Section, Secretary Section, Corporate Social Responsibility
Section, Lifestyle & Culture Section
Group Soft Drinks Business

6

Akiyoshi
Koji(November 8,
1951)

Apr. 1975

Entered the Company

Sep. 2001

Corporate Officer

Mar. 2003

Managing Director, Senior
General Manager of Planning
Division of Asahi Soft Drinks
Co., Ltd.

Mar. 2006

Senior Managing Director,
Senior General Manager ofPlanning Division of Asahi Soft
Drinks Co., Ltd.

Mar. 2007

Jul. 2011

Managing Director, Managing
Corporate Officer of theCompany
Director(to the present)<Significant concurrent positions>
President and Representative Director of
Asahi Breweries, Ltd.
Position: Director
Responsibilities: Group Alcoholic Beverages Business

10

13,900

Reappointment

Candidate
numberName(Date of birth)

Career summary and significant concurrent
positions held by the candidate

Jul. 1969

Joined staff of Prime Minister’s
OfficeOct. 1985

Councilor of Cabinet Secretariat

Jul. 1989

Director of Consumer Statistics
Division, Statistics Bureau,
Management and Coordination
AgencyApr. 1995

Vice-Governor of Saitama
Prefecture

Jun. 1998

Consul General of Brisbane,
Australia

Jan. 2001

Director General of Gender
Equity Bureau, Cabinet Office

Oct. 2003

Director of Showa Women’s
University

Number ofshares in theNotes toCompany
Appointment
owned by thecandidate(to the present)
Apr. 2007

7

MarikoBando(August 17,
1946)

President of Showa Women’s
University(to the present)

Mar. 2008

Director of the Company(to the present)<Significant concurrent positions>
President of Showa Women’s University
Director of Showa Women’s University
Director of The Institute of Women’s Culture,
Showa Women’s University
Chairman of the Board of Rural Women
Empowerment and Life Improvement
Association
Outside Director of Asahi Mutual Life
Insurance Company―

Candidate for
OutsideDirector
Reappointment<Remarks>
Number of years of service as Director:
5 years (at the conclusion of this Annual
General Meeting of Shareholders)
Attendance at Board of Directors meetings:
Attended all 10 meetings held

Position: Outside Director<Notes on Candidate for Outside Director>
 Reasons for recommending Mariko Bando as a candidate for Outside Director
Mariko Bando has a wide range of knowledge as an educator in addition to her diverse experience inpublic administration. To provide the Company with the benefit of this experience and knowledge,
11the Company recommends her election to the Board as an Outside Director.
Although Mariko Bando has not been involved in company management other than as an Outside
Director or an Outside Auditor, the Board has concluded that she will be able to perform her duties
properly as an Outside Director of the Company based on the reasons noted above.

In cases in which the candidate has served during the past five years as an Outside Director or an
Outside Corporate Auditor of other companies, records of inappropriate actions by these companies
during the candidate’s terms of office therein, steps taken by the candidate to prevent such
inappropriate actions, or responses taken by the candidate to deal with such actions after theiroccurrence.
Asahi Mutual Life Insurance Company, where Mariko Bando also serves as an Outside Director,
received a business improvement order from the Financial Services Agency (FSA) on July 3, 2008
regarding its inadequate management of payments of insurance claims, etc., based on Paragraph 1,
Article 132 of the Insurance Business Act. This followed an overall review of its payments of
insurance claims and benefits during a five-year period (from fiscal 2001 to fiscal 2005), throughwhich it was revealed that there had been failures in adequate payments of insurance claims. (Of note,
FSA retracted said business improvement order against Asahi Mutual Life Insurance Company
effective December 16, 2011, as adequate improvement measures were deemed to have been taken.)
Although Ms. Bando was not involved in the case in question, she has fulfilled her responsibilities by
speaking out in favor of measures to prevent a recurrence of similar problems.

12Candidate
numberName(Date of birth)

Career summary and significant concurrent
positions held by the candidate

Jan. 1971

Senior Fellow of Kokumin
Keizai Research InstituteApr. 1997

President of the 21st Century
Public Policy InstituteApr. 2007

President of Center forInternational Public Policy
StudiesNumber ofshares in the
Company
owned by thecandidateNotes toAppointment(to the present)
Mar. 2009

Director of the Company(to the present)8< Significant concurrent positions>
President of Center for International Public
Policy Studies
Naoki<Remarks>
TanakaNumber of years of service as Director:(September 1,
4 years (at the conclusion of this Annual
1945)
General Meeting of Shareholders)―

Candidate for
OutsideDirector
Reappointment

Attendance at Board of Directors meetings:
Attended 9 out of 10 meetings held

Position: Outside Director<Notes on Candidate for Outside Director>
 Reasons for recommending Naoki Tanaka as a candidate for Outside Director
Naoki Tanaka has a great deal of experience as a member of government councils and broad
knowledge as a specialist deeply versed in economic policy. The Company thus recommends hiselection to the Board as an Outside Director to provide the benefit of this experience and knowledge
to the management of the Company.

13

Candidate
numberName(Date of birth)

Career summary and significant concurrent
positions held by the candidate

Apr. 1966

Entered Asahi Chemical
Industry Co., Ltd. (present
Asahi Kasei Corporation)

Jun. 2001

Director

Feb. 2003

Managing Director

Jun. 2003

Director, Primary Executive
Officer

Apr. 2006

Director, Vice President
Executive Officer

Apr. 2010

Chairman and Representative
Director

Number ofshares in the
Company
owned by thecandidate(to the present)
Mar. 2011
9IchiroIto(July 6, 1942)

Director of the Company(to the present)

1,000

Notes toAppointment

Candidate for
OutsideDirector
Reappointment< Significant concurrent positions>
Chairman and Representative Director of
Asahi Kasei Corporation<Remarks>
Number of years of service as Director:
2 years (at the conclusion of this Annual
General Meeting of Shareholders)
Attendance at Board of Directors meetings
Attended 8 out of 10 meetings held

Position: Outside Director<Notes on Candidate for Outside Director>
 Reasons for recommending Ichiro Ito as a candidate for Outside Director
Ichiro Ito would bring a wealth of company management experience and insight into a broad range
of issues to the management of the Company. The Company thus recommends his election to theBoard as an Outside Director.

14

Candidate
numberName(Date of birth)

Career summary and significant concurrent
positions held by the candidate

Apr. 1977

Entered Yoshida Kogyo K.K.
(current YKK Corporation)

May 1991

Entered the Company

Apr. 2006

Senior Officer of the Company

Number ofshares in theNotes toCompany
Appointment
owned by thecandidatePresident and Representative
Director of Asahi Beer
Engineering Co., Ltd. (current
Asahi Group Engineering Co.,
Ltd.)
Mar. 2008

Corporate Officer, Senior Deputy
General Manager of Production
Headquarters, General Manager
of Production Technology
Department

Jul. 2011

Corporate Officer, Senior Deputy
General Manager of Research &Development-Production
Headquarters, General Manager
of Production Strategy
Department of Asahi Breweries,
Ltd.

10

Katsutoshi
Takahashi

Mar. 2012(September
24, 1954)

Corporate Officer, General
Manager of the Production
Section of the Company
Corporate Officer, Senior Deputy
General Manager of Research &Development-Production
Headquarters, General Manager
of Production Strategy
Department of Asahi Breweries,
Ltd.

Sep. 2012

Corporate Officer, General
Manager of the Production
Section of the Company
Corporate Officer, Senior Deputy
General Manager of Research &Development- Production
Headquarters of Asahi
Breweries, Ltd.
(to the present)

15

3,000

New candidate

Candidate
numberName(Date of birth)

Career summary and significant concurrent
positions held by the candidate

Apr. 1978

Entered Konishiroku Photo
Industry Co., Ltd. (Current Konica
Minolta Holdings, Inc.)

Sep. 1988

Entered the Company

Apr. 2008

Senior Officer, Manager ofFinance Department

Sep. 2009

Senior Officer, General Manager
of Finance Department

Mar. 2010

Corporate Officer, General
Manager of Finance Department

Mar. 2011

Corporate Officer, General
Manager of Finance Departmentof the Company
Senior Managing Director of
Asahi Management Services Co.,
Ltd. (current Asahi Professional
Management Co., Ltd)

11
Jul. 2011
Yoshihide
Okuda

Number ofshares in theNotes toCompany
Appointment
owned by thecandidate

4,700

New candidate

Corporate Officer, General
Manager of Finance Section of theCompany
Senior Managing Director of
Asahi Management Services Co.,
Ltd.

(January 3,
1956)
Sep. 2012

Corporate Officer in charge ofpromoting efficiency(administrative sections overall) of
the Company
Senior Managing Director of
Asahi Professional Management
Co., Ltd.

(to the present)<Significant concurrent positions>
Senior Managing Director of Asahi
Professional Management Co., Ltd.
Notes:
1. None of the candidates for Directors has any special interest in the Company.
2. Regarding agreements limiting the liability of Outside Directors
To enable him/her to contribute fully in his/her role as an Outside Director, the Company has enteredinto agreements with Mariko Bando, Naoki Tanaka and Ichiro Ito that limit his/her liability fordamages as prescribed in Paragraph 1, Article 423 of the Companies Act. Under the terms of these
agreements, their respective liabilities are limited to ¥20 million or to the minimum limited amountstipulated by applicable laws and regulations, whichever is higher. If this agenda item is approved assubmitted, the current agreements will be extended.

16

Item 3: Election of one (1) Corporate Auditor
At the conclusion of this Annual General Meeting of Shareholders, the term of office of Tadashi
Ishizaki, Corporate Auditor, will expire. The Company therefore asks the shareholders to electone (1) Corporate Auditor.
The candidate for the position of Corporate Auditor is as follows. Tadashi Ishizaki meets therequirements for independent directors/auditors as defined by the Tokyo Stock Exchange andthe Osaka Securities Exchange.
This proposal is submitted with the prior consent of the Board of Auditors.

Number of
Name(Date of birth)

Career summary and significant concurrent positions heldby the candidate

shares in the
Company
owned by theNotes toAppointment

candidate
Apr. 1970

Assistant of Faculty of Commerce, Chuo
University

Apr. 1972

Lecturer of Faculty of Commerce, Chuo
University

Apr. 1973

Associate Professor of Faculty of Commerce,
Chuo University

Apr. 1982

Professor of Faculty of Commerce, Chuo
University

Apr. 1986

Professor of Graduate School of Commerce,
Chuo University

Apr. 2000

Director of Institute of Business Research,
Chuo University

Mar. 2005

Corporate Auditor of the Company(to the present)

Apr. 2012

Professor of Faculty of Management andCulture, Shoin University(to the present)

TadashiIshizaki(June 2, 1941)―

Candidate for
OutsideCorporate
AuditorReappointment<Significant concurrent positions>
Professor of Faculty of Management and Culture, Shoin
University
Professor Emeritus, Chuo University<Remarks>
Number of years of service as Corporate Auditor:
8 years (at the conclusion of this Annual General
Meeting of Shareholders)
Attendance at Board of Directors meetings:
Attended all 10 meetings held
Attendance at Board of Corporate Auditors meetings:
Attended all 8 meetings held
Position: Outside Corporate Auditor
17

<Notes on Candidate for Outside Corporate Auditor> Reasons for recommending Tadashi Ishizaki as a candidate for Outside Corporate Auditor
Tadashi Ishizaki has years of research experience and expertise in accounting. To provide theCompany with the benefit of his experience and expertise in the area of auditing, the Company
recommends his election as an Outside Corporate Auditor.
Although Tadashi Ishizaki has not been involved in company management other than as an Outside
Director or an Outside Auditor, the Board has concluded that he will be able to perform his duties
properly as an Outside Corporate Auditor of the Company based on the reasons noted above.
Notes:
1. The candidate for Corporate Auditor has no special interest in the Company.
2. Regarding agreements limiting the liability of Outside Corporate Auditor
To enable him to contribute fully in his role as an Outside Corporate Auditor, the Company hasentered into an agreement with Tadashi Ishizaki that limits his liability for damages as prescribed in
Paragraph 1, Article 423 of the Companies Act. Under the terms of this agreement, such liability islimited to ¥20 million or to the minimum limited amount stipulated by applicable laws andregulations, whichever is higher. If this agenda item is approved as submitted, the current agreement
will be extended.

18

(Reference) CSR Activities of the Asahi Group
Living in harmony with the global environment and passing on this heritage to thenext generation are important missions for the Asahi Group, which conducts businessactivities that make use of the gifts of nature, such as water and grain.:
The Company, as a whole, is proactively working on CSR activities.
■ Support for the Great East Japan Earthquake Reconstruction
The Asahi Group continues the supports to address the needs of the areas affectedby the earthquake in accordance with three specific themes; namely “support for theenvironment”, “support for community revitalization” and “support for economic
stimulation”.
<Description of major activities>
 Participated in the “Mori no Gakkou” (school in a forests) at HigashiMatsushima City, Miyagi Prefecture, a project supported by the C.W. Nicol
Afan Woodland Trust.
 Undertook the project “Let's spend this summer at home town with family”
jointly with Fukushima University's Faculty of Administration & Social
Sciences, for families in Fukushima Prefecture who are being forced to live
apart due to the Great East Japan Earthquake and related disasters.
 Held the exhibition of the products of Fukushima named “Fukushima Aizu
Marché” at the Head Office of the Asahi Group with the cooperation of AizuWakamatsu City, Fukushima Prefecture.

Mori no Gakkou

Let's spend this summer at home
town with family

Fukushima Aizu Marché■ Donations through the Shareholder Courtesy Program
The Company has introduced an option of shareholder courtesy program, where
shareholders are able to have the Company to make donation of comparable value to theprice of the Group's gift packages in lieu of receiving the packages.
The Company donates to the “Green Fund” of the National Land Afforestation
Promotion Organization through the Asahi Group environmental fund “Mizu no
Wakusei” (Water Planet) in order to support activities aimed at protecting “water” itself,
which is a gift of nature and “forests” which serve as resources for water.
19

Further, last year the Company added an option of shareholder courtesy to have theCompany to make a “donation in support of Great East Japan Earthquake recovery
efforts” in response to the shareholders’ requests that “shareholder courtesy program isto be utilized to support the areas affected by the Great East Japan Earthquake”. The
donations are used to fund the activities of local NPOs and other organizations
supporting the reconstruction efforts.

■ Regional Contributions
Asahi Breweries, Ltd. conducted the sixth term of “Refreshingly Sustainable
Project” in 2012, donating 1 yen per unit from sales of products covered by the projectto the activities of each prefecture throughout Japan for the preservation or conservationof natural, environmental, and cultural assets. The cumulative amount of donations
made since the inception of the Project in spring 2009 is ¥2,013,063,987.

■ Utilization of Green PowerWith the exception of electrical power that is generated in-house, green power
accounts for all of the electrical power required annually for the production of all 350
ml canned Asahi Super Dry by the company's eight plants in Japan, as well as for the inhouse production of beers in gift packages.
Further, green power is used in the Asahi Group Head Office building, at the venue
for the General Meeting of Shareholders, and for the printing, binding and delivery of
the materials to shareholders including this Notice.

20

The 88th Annual General Meeting of Shareholders■ MÉCÉNAT Activities
The diverse supportive and collaborative activities of Asahi Breweries, Ltd. with
art-related NPOs, including the “Asahi Art Festival” introduced in 2001 for therevitalization of communities through culture, were recognized and awarded the“Mécénat Grand Prize” at the “Mécénat Awards 2012” sponsored by the Association for
Corporate Support of the Arts.
Since 1996, the “Oyamazaki Villa” (registered as a tangible cultural properties) has
been opened to the public as its main building of the Asahi Beer Oyamazaki Villa
Museum of Art which was constructed by entrepreneur Shotaro Kaga in the period fromthe Taisho Era to the early Showa Era as his personal villa. The museum includes“Underground Jewelry Box” designed by architect Tadao Ando as an annex.
Additionally, “the Dream Box”, a multi-purpose gallery designed by Ando which
opened in 2012, is now in use mainly to exhibit artwork or hold seminars.

Mécénat Awards Ceremony

Asahi Beer Oyamazaki Villa Museum of Art

21

BUSINESS REPORT
From January 1, 2012 to December 31, 2012

1. Overview of Operations of the Asahi Group(1) Business Progress and Results
During the fiscal year under review, the global economy remained slow due mainly
to concerns of a decline in the economic growth rate of emerging countries such as inparticular China and India, in addition to sovereign debt problems in Europe. The
movement of the Japanese economy was weak in spite of the strong reconstruction
demand following the Great East Japan Earthquake, largely due to the impact of weak
exports caused by the slowdown of the non-domestic economy.
Against this backdrop, the Asahi Group reinforced its domestic business platformin the last year of “Medium-Term Management Plan 2012” through such means as the
improvement of profitability of its businesses and enhancing its strengths in“Craftsmanship” based on “Safe and Reliability” products. The Group also endeavoredto boost the enterprise value of the Group as a whole by building a business portfoliothat can achieve sustainable growth and by demonstrating synergies with groupmembers, including new business platforms that have been acquired.
As a result, the Asahi Group posted net sales of ¥1,579,076 million, a year-on-yearincrease of 8.0%. Operating income increased by 1.2% year-on-year to ¥108,437
million, and recurring profit rose by 3.5% to ¥114,821 million. Net income totaled¥57,183 million, an increase of 3.8% compared with the previous year.
The following provides an overview of the Group’s operations by business segment
for the fiscal year under review.

22■ Business performance of the Asahi Group

Overview by Business Segment for 89th Term
■ Asahi Group Breakdown of Net Sales

Million yen, except percentagesthSegmentth

88 term
2011

89 term2012(under review)

Change inamountChange inpercentage

Alcoholic Beverages¥921,657¥922,249

¥592

0.1%

Soft Drinks

324,782

370,836

46,054

14.2

Foods

98,033

101,626

3,593

3.7

International Operations

94,219157,932

63,712

67.6

Other Businesses

24,043

26,431

2,387

9.9

Total

1,462,736

1,579,076

116,3408.0

Note: The above figures exclude intra-Group sales.

23

The alcoholic beverages business segment posted net sales of ¥922,249 million, up
0.1% from the previous year, as a result of a year-on-year increase in the sales volume
of beer and beer-type beverages. Operating income rose by 12.2% from the previous
year to ¥113,305 million, due to a steep increase in the sales volume of beer-type
beverages along with reduction of fixed costs, especially depreciation.
-Asahi Breweries, Ltd.
Asahi Breweries, Ltd. worked onreforming its earning structure andendeavoring to expand overall demandby generating and offering original value
sought by customers.

in the sales of wine, including “Sainte
Neige Rela” with its enhanced lineup that encompasses the smaller 320 ml
bottles, and the sales of low-alcohol
beverages, such as “Asahi Sparx” which
saw the addition of new flavors.

In the beer-type beverages sector,
the sales volume of beer increased fromthe previous year, due primarily to thesolid performance of “Asahi Super Dry –Dry Black–”, launched in April as a partof the effort to provide new values. The
new-genre (malt-type) category saw adecline in overall sales from the previous
year in spite of efforts to bolster andpromote the flagship brand “Clear Asahi”.
As a result, the sales volume of beer-type
In the alcohol-taste beverages sector,
the sales volume of the beer-taste
beverage “Asahi Dry Zero”, released inbeverages fell from the previous year.
In the non-beer sector, the overallsales volume decreased from theprevious year due mainly to slow sales ofshochu despite the year-on-year increase

February, greatly exceeded its initialsales target, contributing to a large year24

on-year increase in the overall sales
volume of the sector.

investments on its core brands.

In terms of earnings, Asahi
Breweries endeavored to improve its
production efficiency through integrationof the production function of the
Nishinomiya Brewery into the Suita
Brewery, as well as by reducing
advertising and sales promotion expenses
by concentrating its marketing

The soft drinks business segment posted net sales of ¥370,836 million, an increaseof 14.2% compared with the previous year, reflecting of the performance of Calpis Co.,
Ltd., which newly became a consolidated subsidiary as of October, in addition to thesignificant increase in sales volume at Asahi Soft Drinks Co., Ltd. Operating income
decreased by 35.2% from the previous year to ¥7,379 million, primarily due to anincrease in the advertising expenses of Asahi Soft Drinks.

25

-Asahi Soft Drinks Co., Ltd.
Asahi Soft Drinks Co., Ltd. reinforced its
efforts to realize dramatic growth, with
“Growth Strategies” and “Structural
Reforms” as its key strategies.
Asahi Soft Drinks worked
proactively to strengthen and develop
brands, mainly “Asahi Oishii Mizu”
released in June, in addition to the key
brands “MITSUYA”, “WONDA”, and“Asahi Juroku-Cha”. Furthermore, as aresult of additional efforts aimed atinvigorating “Bireley’s”, “Wilkinson”
and other long-selling brands, companywide sales volumes increased at a rate far
greater than the market growth rate.
In the course of its endeavors toachieve optimum production andlogistics systems to become the industry
leader in terms of cost competitiveness,

Asahi Soft Drinks renovated the
production lines of its Fujisan Plant in
anticipation of increasing sales in themineral water market, which is expected
to grow.

-Calpis Co., Ltd.
Calpis Co., Ltd. worked to expand theapplied microbiological business thatutilizes its proprietary technologies, inaddition to enhancement of the brandvalue of “Calpis” in the domestic market
and strengthen its overseas soft drinks
business.
Calpis redesigned the container for
its core lactic acid drink “Calpis”
concentrate for the first time in 17 years.
The redesigned container was caught onmaterials and technologies, also
performed steadily.
In terms of earnings, Calpis
promoted efforts to cut production costs
through such means as reducing weightof packaging materials for PET bottles
and labels, and increasing in thepercentage of in-house production.

to customers for its functionality,
including its ability to retain the qualityof contents and its ease of use. Calpis’
direct marketing operations, involving
the mail-order sales of functional foodproducts that utilize its proprietary

26

-LB Co., Ltd.
LB Co., Ltd. viewed this year as the

production and distribution expenses bycost reduction of raw materials, such as“year to make dramatic advances in the
expansion of business domains” andsweeteners and packaging materials,
through consolidation of its suppliers andengaged in endeavors to strengthen andexpand its business platform.
Although the sales volume of thepromotion of group purchasing, and byimplementing a local production systemfor chilled soft drinks.

milk beverage category in the chilled
soft-drink operations increased
significantly from the previous year due
in part to success in capturing market
growth through continual release of new
products, its overall sales suffered adecrease from the previous year mainly
as a result of weak performance of
products in the tea category inconvenience stores.
Meanwhile, LB streamlined its

In the foods segment, Asahi Food & Healthcare Co., Ltd. enjoyed solid sales of its
mainstay products, while Amano Jitsugyo Co., Ltd. saw its distribution sales operation
expand. Mainly as a result of the foregoing, net sales rose by 3.7% from the previous
year to ¥101,626 million. Operating income decreased by 11.7% from the previous yearto ¥3,669 million, due primarily to an increase in advertising and sales promotion
expenses in the business of Wakodo Co., Ltd.
-Asahi Food & Healthcare Co., Ltd.
Asahi Food & Healthcare Co., Ltd.

endeavored to expand sales primarily
through the cultivation of new sales
27channels, in addition to the further
strengthening of its core brands along

reducing advertising and sales promotion
expenses mainly through the effectivewith the development and release of new
products.

use of advertisements, but also on
reducing inventories through appropriate

Asahi Food & Healthcare saw anincrease in net sales from the previous
year as a result of actively advertisingstock management.

“MINTIA” breath mints and “DearNatura” dietary supplements, releasing
new products or relaunching modified
versions of existing products under thebrands, as well as promoting the sales of
products such as “BALANCEUP”
nutritional snacks.
In terms of earnings, Asahi Food &Healthcare also worked not only on
into its core business, overall sales
decreased from the previous year, due inpart to a decrease in the contract
manufacture of institutional-use products.
At the same time, Wakodo worked
to improve its profitability by promoting
the reduction of dairy product and otherraw material costs and production costs.

-Wakodo Co., Ltd.
In line with its management policy of“taking on challenges to advance to a
new stage”, Wakodo Co., Ltd.
endeavored to increase its presence in thebaby foods and the powdered baby milks
markets and to strengthen its revenue
base by gaining new customers ofcommercial-use products.
Wakodo expanded the product line
up of “Goo Goo Kitchen” and renewed“Eiyo Marche” products in its mainstay
baby food segment. While it also workedon the business for senior citizens byreinforcing the product line-up and sales
structure of retort pouch foods fornursing care, as it is expected to grow-Amano Jitsugyo Co., Ltd.

channels, development of products that

Amano Jitsugyo Co., Ltd. sought toexpand its business and improve
profitability through expansion of sales

meet customer needs, and enhancementof production equipment.
In distribution sales operations, there28was a considerable increase in thenumber of mass retailers that carry

reduce costs by improving efficiency
through such means as partial automation

Amano Jitsugyo’s products owing to thelaunch of set products of freeze-driedof the packaging process.

miso soup, “Genen type Omisoshiru”(Reduced Sodium Miso Soup),“Freeze Dried Curry recommended by
Yukio Hattori” and other products, alongwith enhancement of sales and marketing
activities relating to the products. Amano
Jitsugyo also aggressively promoted
sales in its mail-order sales operations toachieve a company-wide increase in sales
from the previous year.
In terms of earnings, Amano
Jitsugyo made efforts to enhance its
freeze dry production equipment and

The international operations segment recorded net sales of ¥157,932 million, up
67.6% from the previous year, due to additional sales of the newly consolidated
subsidiaries in Oceania and Malaysia. In spite of the improved profitability of the Chinese
business and the positive contributions of the newly consolidated companies, operating
loss decreased by ¥959 million from the previous year to ¥3,872 million due to theincreased burden of amortization of goodwill, etc. of the newly consolidated companies.
-Oceania Business Segment
In the Oceania business segment,

establish a basis for growth as acomprehensive beverage businesscompanies led by Asahi Holdings

encompassing both alcoholic beverages(Australia) Pty Ltd., the subsidiary
overseeing the Oceania region, sought toand soft drinks, mainly through thestrengthening of their core brands and29generation of cost synergy.
The establishment of an efficient

to strengthen their revenue bases
primarily through the consolidation ofsales and marketing structure through thepartial integration of the sales

their back office sections, establishmentof optimum production systems for

departments of the companies in theregion, as well as the launch of a newcola beverage by Schweppes Australia

products in the mineral water category of
the soft drinks business, and joint
procurement of raw materials.

Pty Limited, resulted in an increase insales in the soft drinks sector. Companies
endeavored to strengthen their presencein growth areas of the alcoholic
beverages sector, taking on the functionof selling “Asahi” brand products undercontract in Oceania in addition toenhancing their low-alcohol beverageline-up through the renewal of their core
brands and the release of new products.
Furthermore, the companies sought-China Business Segment
In the China business segment, efforts
were made to improve profitability andenhance quality by expanding sales of
the “Asahi” brand products andstrengthening the local production
system.
In spite of a boost in sales activities
targeting Japanese restaurants andconvenience stores, along with an

Xihu Beer Asahi Co., Ltd. and Zhejiang
Xihu Beer Asahi Co., Ltd., whose entire
equity interests were transferred in theprevious year, from the scope of
consolidation.
Meanwhile, the Group endeavoredto improve profitability by concentrating
the production of “Asahi” brand products
for sale within China in Beijing Beer
Asahi Co., Ltd.

expansion of the sales area covered by
Yantai Beer Tsingtao Asahi Company,
Ltd., the China business segment saw adecrease in overall sales from theprevious year, due mainly to the
exclusion of the net sales of Hangzhou-Southeast Asia Business Segment

efforts were made to expanding the

In the Southeast Asia business segment,

business platform in Southeast Asia
30

centered around Permanis Sdn. Bhd., inaddition to improve its standing in thethe largest food products company inIndonesia, in order to establish a base in

Malaysian beverage market.
Permanis Sdn. Bhd. made aggressive

the Indonesian beverage market, which is
expected to continue to grow going

marketing investments mainly in its core
brands, while endeavoring to increase
profitability by improving the efficiency

forward.

of raw materials procurement throughreduction of the unit prices primarily ofsugar and aluminum cans.
Additionally, the Group establisheda beverage joint venture with
PT.Indofood CBP Sukses Makmur Tbk,

In the other businesses segment, net sales increased by 9.9% year-on-year to¥26,431 million, thanks to the expansion of cargo transportation business. However,operating income decreased by 20.1% year-on-year to ¥606 million, due to thecontinual increase in costs associated with deterioration of the balance between supply
and demand of vehicles in the cargo transportation industry.

31

(2) Financial and Profit/Loss Indicators

Net sales (million yen)

89th term
2012

86th term
2009

87th term
2010

88th term
2011(under review)

1,472,468

1,489,460

1,462,736

1,579,076

Operating income (million yen)

82,777

95,349107,190

108,437

Recurring profit (million yen)

90,546

101,142

110,909

114,821

Net income (million yen)

47,64453,08055,09357,183

Net income per share (yen)102.49114.10118.36122.75

Total assets (million yen)

1,433,652

1,405,358

1,529,907

1,732,187

Net assets (million yen)

577,702612,670643,798

726,879

Net assets per share (yen)1,233.25

1,315.51

1,378.19

1,553.35

Note: Net income per share is calculated based on the average total number of shares outstanding during
the term. Net assets per share are calculated based on the total number of shares outstanding at
term-end. The number of shares outstanding is exclusive of treasury stock.

(3) Capital Investment Activities
Consolidated capital expenditures in the year under review totaled ¥50,169 million,
the segment breakdown of which is as follows. A large portion of the capital
expenditures represented investments made to upgrade existing facilities and implement
energy conservation measures. In addition to these, Asahi Soft Drinks Co., Ltd. carriedout new construction and expansion work, etc. for the manufacturing facility for softdrinks at the Fujisan Plant in the amount of ¥2,584 million.
Amount of capital expenditure

Business segment(Million yen)

Alcoholic Beverages

18,095

Soft Drinks

15,883

Foods

5,211

International Operations

9,966

Other Businesses

219

Company-wide (common)

792

Total

50,16932

(4) Financing Activities
The Company financed the capital investments detailed in item (3) above and othercapital requirements through loans from financial institutions, commercial paper, andbonds. The Company issued its 3rd series of unsecured bonds (5-year, ¥18 billion bondissue) and 4th series of unsecured bonds (7-year, ¥10 billion) on July 13, 2012.
Funds required for companies’ businesses of the Group are primarily sourced by
the Company.

(5) Status of Principal Lenders(As of December 31, 2012)

Outstanding balance

Lender(Million yen)

Sumitomo Mitsui Banking Corporation

46,521

Mizuho Corporate Bank, Ltd.

20,062

Sumitomo Mitsui Trust Bank, Limited

16,657The Norinchukin Bank

16,500

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

11,500Note: The Sumitomo Trust & Banking Co., Ltd., which was the Company’s principal lender, merged with
the Chuo Mitsui Trust and Banking Company Limited and Chuo Mitsui Asset Trust and Banking
Company Limited. and became Sumitomo Mitsui Trust Bank, Limited as of April 1, 2012.

33

(6) Management Perspectives
Long-Term Vision 2020
Striving to be a corporate group trusted around the world through the Kando offood (deliciousness, happiness and innovation)34

Asahi Group Holdings, Ltd. has established “Long-Term Vision 2020” in orderto address the changes in the increasingly tough business environment and thediversification of stakeholder needs, together with the three-year “Medium-Term
Management Plan 2015” for the achievement of the Vision.
The Company will strive to enhance its corporate value by promoting “Valueand Network Management” from 2013, which is the first year covered by the Plan.
In “Value and Network Management”, the Company will focus on the “strengths”
that it developed and acquired over the years, such as its brand, technologies andcost competitiveness, and leverage them for the creation of new values andinnovation. The Company will also seek to maintain long-term stable growth byfurther expanding its domestic and overseas networks. Giving utmost priority to
growth of its sales and profit, the Group will work together for the continual
increase in key performance indicators ROE (return on equity) and EPS (netincome per share) by improving capital efficiency through such means as increaseof shareholder returns.
Alcoholic Beverages Business-Asahi Breweries, Ltd.
Asahi Breweries, Ltd. will seek to become a company that is “selected” bycustomers by developing products that accurately reflect potential customer needs andmarket trends.
In the beer-type beverages sector, Asahi Breweries will focus on enhancing theflagship brands “Asahi Super Dry”, “Clear Asahi” and “Asahi Style Free”. Asahi
Breweries will gain new “Asahi Super Dry” customers to further popularize andestablish the brand in the market by rolling out “Asahi Super Dry Extra Cold” more
broadly and enhancing the quality of “Asahi Super Dry – Dry Black –”. Asahi
Breweries will launch the “Clear Asahi Prime Rich” with “rich flavor and smooth after
taste” in March as the first derivative of “Clear Asahi” in the new-genre (malt-type)
category and aggressively promote “Asahi Style Free”, the first carbohydrate-freehapposhu, to strengthen its brand power.
As for the non-beer sector, Asahi Breweries will continue to work to foster andstrengthen its core brands. Asahi Breweries will also seek to expand its business further
by selling the globally known American whisky in Japan beginning in January, such as“Jack Daniel’s” and “Early Times”, of Brown-Forman Corporation.
In the alcohol-taste beverages category, Asahi Breweries will make aggressive
marketing investments in beer-taste beverage “Asahi Dry Zero” to increase its presence35

in the market.
Further, Asahi Breweries strive to reform its earning structure by pursuing highproductivity through accumulation of process improvements in its breweries and further
increasing logistics efficiency through such means as improvement of its infrastructure.
Soft Drinks Business-Asahi Soft Drinks Co., Ltd.

Asahi Soft Drinks Co., Ltd. will endeavor to strengthen its business platform byenhancing the status of existing brands and proposing new values to accelerate growth,
as well as by working on a company-wide level to reform its earning structure.
Asahi Soft Drinks will develop and strengthen the brands “MITSUYA”,“WONDA”, “Asahi Juroku-cha”, “Asahi Oishii Mizu” and “Wilkinson”, while
proceeding with the development of products that will serve as the new pillars of its
business. In the vending machine business, Asahi Soft Drinks will work towards theachievement of stable business performance by not only expanding the number of units
installed, but also increasing per unit sales.
Further, Asahi Soft Drinks will seek to reform its earning structure by focusing its
efforts primarily on restructuring its product line-up so as to realize phenomenal growth.
-Calpis Co., Ltd.
Calpis Co., Ltd. will seek to further enhance the brand power of its flagship brand“Calpis” to firmly establish and solidify its status in the milk-based beverages market.
Calpis will continue to refine and improve on the flavor of concentrated lactic aciddrink “Calpis”, while working to further enhance the functionality of its new container“peace bottle”. As a company that provides “taste value” and “health value”, Calpis willtake on the challenge of developing products in a new field of healthcare, utilizing
lactobacilli and fermentation technologies.
Additionally, it will seek to improve efficiency and productivity in the areas oflogistics and procurement by promoting collaboration with the Group companies in
addition to implementing its own measures for cost reduction.
-LB Co., Ltd.
Through the development of products in its mainstay categories of tea and softdrinks, LB Co., Ltd. will continue to offer to customers the added values of freshness
and enticing flavor characteristic of chilled soft drinks.
36

LB will strengthen its collaboration with the Group companies even more than it
used to in the past and aggressively work on the introduction and popularization of
products, such as “Bireley’s” and “Calpis” in the chilled soft drinks segment.
In addition, LB will establish an optimum production system capable ofaccommodating changes in demand, while working on improving the efficiency of
production and logistics operations using the new mission-critical systems introduced in2012.
Food Business-Asahi Food & Healthcare Co., Ltd.
Asahi Food & Healthcare Co., Ltd. will realize growth and profitability bygenerating unique strengths that its competitors cannot offer by working on “steady andsound growth”, “establishment of organization and infrastructure capable of addressingchanges in customers” and “enhancement of corporate brand and reform of corporate
culture”.
Asahi Food & Healthcare will enhance the value of all its products from thecustomer perspective, mainly by further strengthening its flagship brands anddeveloping and nurturing brands that will serve as the new pillar.
Asahi Food & Healthcare will take cost reduction into consideration beginning withthe design and procurement stages when developing new products and maintain a betterbalance between supply and demand by increasing the accuracy of sales forecast.
-Wakodo Co., Ltd.
Wakodo Co., Ltd. will enhance the profitability of existing businesses and aspire todevelop businesses that will serve as the next pillars in growth areas.
As regards to baby food, Wakodo will push forward with its sales strategies andexpansion of the target range of customer age by taking advantage of its strengths as anindustry leader with the largest share in the domestic market. For products targeted atseniors, Wakodo will strive to develop products and engage in sales promotion activities
that are always one step ahead in terms of addressing the market needs. For
institutional-use products, Wakodo will make efforts to increase sales as well by
cultivating new customers.
Additionally, Wakodo will work on the reduction of material costs andimprovement of productivity, and control fixed expenses by working on achievement of
increased efficiency of sales promotion expenses.
37

-Amano Jitsugyo Co., Ltd.
Amano Jitsugyo Co., Ltd. will manage business in accordance with the basic
policies of “increasing presence in the food market”, “reforming the earning structure”,
and “creative company that enriches customer life”.
Amano Jitsugyo will aim to expand sales by increasing corporate visibility throughrunning antenna shops and TV commercials and by strengthening measures to increase
the number of new subscribers for mail-order sales operations.
Amano Jitsugyo will also endeavor to increase profitability by reducing the timerequired for production processes, introducing automating production partially, andreducing material costs.
International Operations-Oceania BusinessIn the Oceania business segment, the Group will seek to grow as a comprehensive
beverage business, which covers both alcoholic beverages and soft drinks, mainly
through the generation of cost synergy among the business companies in the region, in
addition to developing and nurturing the core brands, such as those of Schweppes
Australia Pty Limited, and conducting business in growth areas.
In the soft drinks business sector, the Group will strive to expand sales bystrengthening its presence in business categories other than business to mass retailers, inaddition to reinforcing sales promotion activities relating to mainstay products such ascarbonated drinks and entering markets where growth is anticipated. In the alcoholic
beverages business sector, the Group will proceed to firmly establish the status ofmainstay low-alcohol beverages and endeavor to secure a business structure for future
progress and development through proactive marketing activities in growth areas
including the Asahi brand and other imported beers.
Meanwhile, the Group will endeavor to further strengthen its revenue base bypromoting the establishment of optimum production and logistics systems, as well as
the joint procurement of raw materials, centered around Australia.
-China BusinessIn the China business segment, the Group will aspire to improve quality of the“Asahi” brand and profitability by enhancing the status of the “Asahi” brand in themarket by increasing sales, in addition to further promoting the consolidation of
production sites.
38

The Group will seek to increase product sales through the cultivation of newmarkets and sales channels, in addition to the reinforcement of sales efforts targeting
Japanese restaurants in the Shanghai area where is a top priority market.
Further, the Group will secure its revenue base by revising the sales structure in
Beijing Beer Asahi Co., Ltd and pushing ahead with the transfer of productions
functions of export products for “Asahi” brand to Beijing Beer Asahi.
-Southeast Asia BusinessIn the Southeast Asia business segment, the Group will endeavor to expand thebusiness network in Southeast Asia by building a beverage business platform inIndonesia, in addition to increasing sales through the strengthening of the main brandsof Permanis Sdn. Bhd.
Permanis Sdn. Bhd. will strive to expand its sales by launching new products andstrengthening its sales structure, while aggressively engaging in marketing activities
centered around its existing key brands. Permanis will also seek to improve the overallprofitability of the business by promoting efficiency through such means as reducing
the weight of PET bottles.
Further, the joint venture with the Indonesian company PT.Indofood CBP Sukses
Makmur Tbk will build a platform for full scale business deployment, including thedevelopment of its own brands and construction of production facilities.
The Asahi Group intends to enhance the corporate value of the entire Group by
improving the profitability of each business and increasing the capital efficiency
through “Medium Term Management Plan 2015”.
The Group cordially requests shareholders’ continuing encouragement and support.

39

(7) Principal Subsidiaries
Company name

CapitalShareholdings(Million yen)(%)

Main operations

Asahi Breweries, Ltd.

20,000100.0

Asahi Soft Drinks Co., Ltd.

11,081100.0

Calpis Co., Ltd.

13,056100.0

Production andmarketing of soft drinks

LB Co., Ltd.

487

100.0

Production andmarketing of soft drinks

Asahi Food & Healthcare Co., Ltd.

3,200

100.0

Wakodo Co., Ltd.

2,918

100.0

Production andmarketing of foods
Production andmarketing of foods

67

100.0

27,593100.0

Amano Jitsugyo Co., Ltd.
Schweppes Australia Pty Limited(A$372,231
thousand)Asahi Professional Management Co.,
Ltd.

50

100.0

Production andmarketing of alcoholic
beverages
Production andmarketing of soft drinks

Production andmarketing of foods
Production andmarketing of soft drinks
Contracting of clerical
work

Notes:
1. Shareholding percentages include shares held indirectly.
2. Calpis Co., Ltd. became a wholly owned subsidiary of the Company as a result of the Company
acquiring all of its shares on October 1, 2012.

3. There were 84 consolidated subsidiaries of the Company as of the end of the fiscal year underreview, including those listed above. There were 100 affiliates accounted for by the equity
method, including Tsingtao Brewery Co., Ltd. and Tingyi-Asahi Beverages Holding Co., Ltd.

40

(8) Significant Developments such as Corporate Reorganization
A. On January 31, 2012, the Company acquired all shares of Mountain H2O Pty Ltd. throughwholly-owned subsidiary Asahi Holdings (Australia) Pty Ltd.
B. On October 1, 2012, the Company acquired all shares of Calpis Co., Ltd.

(9) Principal Offices and Factories(As of December 31, 2012)

A. Asahi Group Holdings, Ltd.
(Registered head office)23-1, Azumabashi 1-chome, Sumida-ku, Tokyo(Laboratories)

Research Laboratories for Food Safety Chemistry, ResearchLaboratories for Fundamental Technology of Food, ResearchLaboratories for Applied Technology of Food, Research &Development Laboratories for Sustainable Value Creation (all inMoriya City, Ibaraki Prefecture)41

B. Subsidiaries
Businesssegment

Alcoholic
Beverages

Company name

Asahi Breweries,
Ltd.

Asahi Soft Drinks
Co., Ltd.

Soft Drinks

Calpis Co., Ltd.

LB Co., Ltd.

Major establishments
Registered head
office23-1, Azumabashi 1-chome, Sumida-ku, Tokyo

Regional sales
officesTokyo Metropolitan Headquarters for OnPremise Retailers (Chuo-ku, Tokyo), etc.

Production
facilities

Ibaraki Brewery (Moriya City, Ibaraki
Prefecture), etc.

Laboratories

Development Laboratories for Alcoholic
Beverages (Moriya City, Ibaraki Prefecture), etc.

Registered head
office23-1, Azumabashi 1-chome, Sumida-ku, Tokyo

Regional sales
offices

Kanto and Tokyo Metropolitan Regional
Headquarters (Chuo-ku, Tokyo), etc.

Production
facilities

Akashi Plant (Akashi City, Hyogo Prefecture),
etc.

Laboratories

Products Research & Development Laboratory(Moriya City, Ibaraki Prefecture), etc.

Registered head
office4-1, Ebisu-minami 2-chome, Shibuya-ku.
Tokyo

Regional sales
officesTokyo Branch (Shibuya-ku, Tokyo), etc.

Production
facilities

Gunma Plant (Tatebayashi City, Gunma
Prefecture), etc.

Laboratories

Microbiology & Fermentation Laboratory(Sagamihara City, Kanagawa Prefecture), etc.

Registered head
office3469-1, Aza Sakuragaoka, Ooaza Kurohama,
Hasuda City, Saitama Prefecture

Regional sales
offices

CVS Marketing Department (Taito-ku, Tokyo),etc.

Production
facilities

Hasuda Plant (Hasuda City, Saitama
Prefecture), etc.

Laboratories

Product Development Department (Hasuda
City, Saitama Prefecture)42

Asahi Food &Healthcare Co.,Ltd.

Wakodo Co., Ltd.

Foods

Amano JitsugyoCo., Ltd.

International
operations

Schweppes
Australia Pty
LimitedRegistered head
office23-1, Azumabashi 1-chome, Sumida-ku, Tokyo

Regional sales
offices

Food Sales Section for Chain Stores (Chiyodaku, Tokyo), etc.

Production
facilities

Osaka Plant (Suita City, Osaka Prefecture), etc.

Laboratories

Laboratory (Chuo-ku, Tokyo)

Registered head
office14-3, Kanda Tsukasa-cho 2-chome, Chiyodaku, Tokyo

Regional sales
officesTokyo Branch (Shinjuku-ku, Tokyo), etc.

Production
facilities

Tochigi Plant (Sakura City, Tochigi Prefecture),
etc.

Laboratories

Research Laboratory (Chofu City, Tokyo)

Registered head
office9-10, Dosan-cho, Fukuyama City, Hiroshima
Prefecture

Regional sales
offices

East Japan Branch (Chiyoda-ku, Tokyo), etc.

Production
facilities

Satosho Factory (Asakuchi-gun, Okayama
Prefecture)

Laboratories

R&D Center (Asakuchi-gun, Okayama
Prefecture)

Registered head
officeVictoria, Australia

Business locations

New South Wales, Australia, etc.

(10) Employees(As of December 31, 2012)

Business segment

Number of employees

Increase (decrease) from end of previous term

Alcoholic Beverages

4,783

(142)

Soft Drinks

4,082

1,080

Foods

1,727

79

International Operations

5,109

143

Other Businesses

1,723

(24)

Company-wide (common)

532

61

Total

17,956

1,197

43

2. Overview of the Company(1) Shares Outstanding(As of December 31, 2012)
A. Total number of authorized shares

972,305,309

B. Total number of issued shares

483,585,862(including 17,611,484 shares in treasury stock)

C. Number of shareholders

120,251(Decreased by 3,680 from the end of the previous term)

44

D. Major shareholders
Shareholders’ investment in the Company
Number ofshares held

Percentage ofshares held(in hundreds)(%)

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

252,081

5.4

Japan Trustee Services Bank, Ltd. (Trust Account)

204,729

4.4

Asahi Kasei Corporation

187,853

4.0

The Dai-ichi Life Insurance Company, Limited

169,200

3.6

Fukoku Mutual Life Insurance Company

166,830

3.6

JPMorgan Chase Bank 380055

95,852

2.1

Sumitomo Mitsui Banking Corporation

90,2801.9

SSBT OD05 Omnibus Account – Treaty Clients

89,498

1.9

Sumitomo Mitsui Trust Bank, Limited

81,2601.7

Mellon Bank ABN Amro Global Custody N.V.

73,844

1.6

1,411,428

30.3

Total
Notes:

1. The Company holds treasury stock numbering 176,114 hundred shares. However, the Company is
excluded from the above list of major shareholders.
2. Shareholding percentages are calculated based on the total number of issued shares less the numberof shares in treasury stock.

45

(2) Status of Stock Acquisition Rights, etc.
A. Stock acquisition rights held by Directors and Corporate Auditors of the Company

Date of issuance resolution
Number of stock acquisitionrightsClass and number of sharessubject to stock acquisitionrightsFee for exercise of stockacquisition rights
Exercisable period
Conditions for exercise ofstock acquisition rights

1) First issue of stock acquisitionrightsMarch 28, 2003

(As of December 31, 2012)
2) Second issue of stock acquisitionrightsMarch 30, 2004

10

340

Shares of common stock: 10,000

Shares of common stock: 34,000¥830 per share¥1,205 per share

March 28, 2005 to March 27, 2013

March 30, 2006 to March 29, 2014

 The options are exercisable evenafter the resignation of Directors or
Corporate Auditors, as the case maybe.
 The options may be passed on toheirs.
 The options shall be cancelled if aholder is dismissed for certain
specified reasons.
 Any assignment or pledging of theoptions is prohibited.

 The options are exercisable evenafter the resignation of Directors or
Corporate Auditors, as the case maybe.
 The options may be passed on toheirs.
 The options shall be cancelled if aholder is dismissed for certain
specified reasons.
 Any assignment or pledging of theoptions is prohibited.

Situation concerning the holding of stock acquisition rights by Directors and Corporate Auditors
Directors
 Number of stock acquisition rights:
 Number of stock acquisition rights:(except Outside Directors)—140
 Number of shares subject to stock Number of shares subject to stockacquisition rights: —acquisition rights: 14,000 Number of holders: 2
 Number of holders: —Outside Directors
 Number of stock acquisition rights:
 Number of stock acquisition rights:——
 Number of shares subject to stock Number of shares subject to stockacquisition rights: —acquisition rights: — Number of holders: — Number of holders: —Corporate Auditors
 Number of stock acquisition rights:
 Number of stock acquisition rights:
10200
 Number of shares subject to stock Number of shares subject to stockacquisition rights: 10,000
acquisition rights: 20,000
 Number of holders: 2
 Number of holders: 1

46

Date of issuance resolution
Number of stock acquisitionrightsClass and number of sharessubject to stock acquisitionrightsFee for exercise of stockacquisition rights
Exercisable period
Conditions for exercise ofstock acquisition rights

3) Third issue of stock acquisitionrightsMarch 30, 2005

4) Fourth issue of stock acquisitionrightsMarch 30, 2006

630

950

Shares of common stock: 63,000

Shares of common stock: 95,000¥1,374 per share¥1,688 per share

March 30, 2007 to March 29, 2015

March 30, 2008 to March 29, 2016 The options are exercisable evenafter the resignation of Directors or
Corporate Auditors, as the case maybe.
 The options may be passed on toheirs.
 Any assignment or transfer of thestock acquisition rights is subject toapproval of the Board of Directors.

 The options are exercisable evenafter the resignation of Directors or
Corporate Auditors, as the case maybe.
 The options may be passed on toheirs.
 Any assignment or transfer of thestock acquisition rights is subject toapproval of the Board of Directors.

Situation concerning the holding of stock acquisition rights by Directors and Corporate Auditors
Directors
 Number of stock acquisition rights:
 Number of stock acquisition rights:(except Outside Directors)
330
650
 Number of shares subject to stock Number of shares subject to stockacquisition rights: 33,000
acquisition rights: 65,000 Number of holders: 4
 Number of holders: 3
Outside Directors
 Number of stock acquisition rights:
 Number of stock acquisition rights:——
 Number of shares subject to stock Number of shares subject to stockacquisition rights: —acquisition rights: — Number of holders: — Number of holders: —Corporate Auditors
 Number of stock acquisition rights:
 Number of stock acquisition rights:
300
300
 Number of shares subject to stock Number of shares subject to stockacquisition rights: 30,000
acquisition rights: 30,000
 Number of holders: 3
 Number of holders: 3

47

B. Significant items regarding other stock acquisition rights
Overview of Euroyen conditional convertible bonds with stock acquisition rights

Date of issuance resolution

1) Euroyen conditional convertible
bonds with stock acquisition rights
maturing in 2023
May 13, 2008

Date of issue
May 29, 2008
Outstanding amount of bonds¥35,121 million
with stock acquisition rights
Details concerning the stock acquisition rights
Number of stock acquisition Total of 35,000 and the number
rightscalculated by dividing the total facevalue of the substitute bonds with stockacquisition rights by ¥1,000,000
Class and number of shares
Shares of common stock: 16,611,295
subject to stock acquisitionrightsFee for exercise of stock¥2,107 per shareacquisition rights
Exercisable period
June 12, 2008 to May 12, 2023
Conditions for exercise of Certain stock acquisition rights may
stock acquisition rights
not be exercised.
 Prior to May 29, 2011, but only when
the closing price of the Company’scommon stock for 20 of the last 30
trading days (including the last
trading day) exceeds 125% of theconversion price (¥2,107) as of thelast trading date of each quarter. In
such cases, exercise is possible, in
principle, during the following
quarter.
Conditions under which the On or after May 29, 2011, theCompany may acquireCompany may acquire all of thestock acquisition rights
bonds after notifying thebondholders.
 The acquisition date shall be at least
60 but no more than 75 days from thenotification date.

482) Euroyen conditional convertible
bonds with stock acquisition rights
maturing in 2028
May 13, 2008
May 29, 2008
¥35,000 million

Total of 35,000 and the number
calculated by dividing the total facevalue of the substitute bonds with stockacquisition rights by ¥1,000,000
Shares of common stock: 17,073,170¥2,050 per share
June 12, 2008 to May 12, 2028
 Certain stock acquisition rights may
not be exercised.
 Prior to May 29, 2014, but only when
the closing price of the Company’scommon stock for 20 of the last 30
trading days (including the last
trading day) exceeds 125% of theconversion price (¥2,050) as of thelast trading date of each quarter. In
such cases, exercise is possible, in
principle, during the following
quarter.
 On or after May 29, 2014, theCompany may acquire all of thebonds after notifying thebondholders.
 The acquisition date shall be at least
60 but no more than 75 days from thenotification date.

(3) Directors and Corporate Auditors of the Company
A. Directors and Corporate Auditors(As of December 31, 2012)

Name
Hitoshi
Ogita

Areas of responsibility andsignificant concurrent positions

Position

Chairman and Representative Overall Group Management
Director
Outside Director of NEC Corporation
Outside Director of Imperial Hotel, Ltd.

Naoki
IzumiyaPresident andRepresentative Director

Kazuo
Motoyama

Executive Vice President and General Affairs Management Section, Finance Section,
Representative Director
Information Technology Section, Logistics Section,
Agribusiness Development Section

Overall Group Management, Group Food BusinessPresident and Representative Director of Asahi Professional
Management Co., Ltd.
Katsuyuki
Kawatsura

Managing Director

Procurement Section, Production Section, Research &Managing Corporate Officer Development Section, Intellectual Property Section, Quality
Assurance Section

ToshioKodatoDirector

Shiro

Director

Ikeda

Corporate Officer

Corporate Officer

Legal Affairs Management Section, Public Relations Section,
International Business Section
Group International Operations
Audit Section, Secretary Section, Corporate Social
Responsibility Section, Lifestyle & Culture Section
Group Soft Drinks BusinessDirector of Asahi Soft Drinks Co., Ltd.
Director of Calpis Co., Ltd.
Director of LB Co., Ltd.

Akiyoshi
Koji

Director

Group Alcoholic Beverages BusinessPresident and Representative Director of Asahi Breweries,
Ltd.

MarikoBando

Outside Director

President of Showa Women’s University
Director of Showa Women’s University
Director of The Institute of Women’s Culture, Showa
Women’s University
Chairman of the Board of Rural Women Empowerment andLife Improvement Association
Outside Director of Asahi Mutual Life Insurance Company

Naoki
TanakaOutside Director

President of Center for International Public Policy Studies

IchiroIto

Outside Director

Chairman and Representative Director of Asahi Kasei
Corporation

49

Name
Yoshihiro
Tonozuka

Areas of responsibility andsignificant concurrent positions

PositionStanding Corporate Auditor

Corporate Auditor of Asahi Breweries, Ltd.
Corporate Auditor of Calpis Co., Ltd.
Corporate Auditor of Asahi Food & Healthcare Co., Ltd.

Yukio
KakegaiStanding Corporate Auditor

Takahide
Sakurai

Outside Corporate Auditor

Naoto
Nakamura

Outside Corporate Auditor

Corporate Auditor of Asahi Soft Drinks Co., Ltd.
Corporate Auditor of Wakodo Co., Ltd.
Corporate Auditor of Amano Jitsugyo Co., Ltd.
Special Adviser to The Dai-ichi Life Insurance Company,
LimitedOutside Director of Imperial Hotel, Ltd.
Partner and Attorney at Law of Nakamura, Tsunoda &Matsumoto Law OfficeOutside Corporate Auditor of Mitsui & Co., Ltd.
Outside Corporate Auditor of Recruit Holdings Co., Ltd.

TadashiIshizakiOutside Corporate Auditor

Professor of Faculty of Management and Culture, Shoin
University
Professor Emeritus, Chuo University

Notes:
1. Directors Mariko Bando, Naoki Tanaka and Ichiro Ito are Outside Directors as defined in Item 15,
Article 2 of the Companies Act.
2. Corporate Auditors Takahide Sakurai, Naoto Nakamura and Tadashi Ishizaki are Outside Corporate
Auditors as defined in Item 16, Article 2 of the Companies Act.
3. The Company designated Outside Directors Mariko Bando, Naoki Tanaka and Ichiro Ito and Outside
Corporate Auditors Takahide Sakurai, Naoto Nakamura and Tadashi Ishizaki as Independent
Directors/Auditors as defined by the Tokyo Stock Exchange and the Osaka Securities Exchange andreported to said exchanges thereof.
4. Corporate Auditor Yukio Kakegai was formerly General Manager of Audit Department of theCompany and has considerable expertise in finance and accounting.
5. Corporate Auditor Naoto Nakamura who is an attorney at law is jurisprudent, among others, tocorporate legal affairs; he also has considerable expertise in finance and accounting.
6. Corporate Auditor Tadashi Ishizaki has carried out research on accounting for many years as auniversity professor; he has considerable expertise in finance and accounting.
7. Shiro Ikeda was newly elected as Director and Yoshihiro Tonozuka was newly elected as Corporate
Auditor, at the 88th Annual General Meeting of Shareholders held on March 27, 2012, and bothassumed their respective offices. Also, Yoshihiro Tonozuka was elected as Standing Corporate Auditor
by resolution of the Board of Auditors and assumed office on the same day.
8. Recruit Holdings Co., Ltd., where Corporate Auditor Naoto Nakamura concurrently serves as an
outside corporate auditor, changed its name from Recruit Co., Ltd. as of October 1, 2012.
9. Of the Directors who were in office on or after the day following the date the aforementioned 88th
Annual General Meeting of Shareholders adjourned, those who retired during the term under review
are as follows:

50

Name

Position upon

Areas of responsibility and significant

Date of

Reason for

retirement

concurrent positions upon retirement

retirement

retirement

Human Resources Section
Group Food BusinessToshihiko
Nagao

Managing
Director
Managing
Corporate
Officer

Director of Asahi Food & Healthcare Co.,Ltd.

Dec. 27,

Deceased2012

Director of Wakodo Co., Ltd.
Director of Amano Jitsugyo, Co., Ltd.
Director of Asahi Professional
Management Co., Ltd.

10. In addition to the above, the retirement from significant concurrent positions by Directors or
Corporate Auditors during the year under review are detailed below.
Name
Kazuo Motoyama

Position
Executive Vice
President andRepresentative
Director

Significant concurrent positions

Date ofupon retirement

retirement

Director of LB Co., Ltd.

March 22, 2012

Director of Asahi Soft Drinks Co.,Ltd.

March 23, 2012

Naoki Tanaka

Outside Director

Chairman of Postal Services
Privatization Committee

March 31, 2012

Tadashi Ishizaki

Outside Corporate
Auditor

Professor of Faculty of Commerce,
Chuo University

March 31, 2012

51

B. Remuneration paid to Directors and Corporate Auditors
Category
Directors[of which, Outside Directors]
Corporate Auditors[of which, Outside Corporate
Auditors]

Basic remuneration
Number of
Total amount of
persons
remuneration paid
remunerated(yen)
11
337,440,000[3][31,200,000]
6[3]

96,000,000[32,400,000]

Number of
persons
remunerated
11
[3]
—
—

Bonus
Total amount of
remuneration paid(yen)
105,400,000[11,100,000]

Total amount
(yen)

—
—

442,840,000[42,300,000]
96,000,000[32,400,000]

Notes:
1. The figures above include Director Yoshihiro Tonozuka and Corporate Auditor Yoshifumi Nishino,
who retired at the conclusion of the 88th Annual General Meeting of Shareholders held on March
27, 2012, and Director Toshihiko Nagao, who retired on December 27, 2012, due to his deceased.
2. A resolution authorizing payments associated with the termination of the retirement bonus system
to be paid at the time of retirement was passed at the 83rd Annual General Meeting of Shareholders
held on March 27, 2007. As of the end of the fiscal year under review, the anticipated total amountof future payments was as follows:
Total of ¥36,000,000 to three Directors
Total of ¥33,000,000 to three Outside Corporate Auditors
The anticipated total amount of future payment to one Director retiring at the conclusion of the89th Annual General Meeting of Shareholders to be held on March 26, 2013, is ¥4 million.
3. The total amount of Directors’ remuneration, etc. is ¥760 million (including ¥50 million for
Outside Directors) per year according to the resolution passed at the 83rd Annual General Meetingof Shareholders held on March 27, 2007.
4. The total amount of Corporate Auditors’ remuneration, etc. is ¥120 million (including ¥40 million
for Outside Corporate Auditors) per year according to the resolution passed at the 83rd Annual
General Meeting of Shareholders held on March 27, 2007.

C. Policies concerning the setting of remuneration paid to Directors and Corporate
Auditors

Directors’ and Corporate Auditors’ remuneration amounts are set within the total
amount of remuneration resolved in advance at a General Meeting of Shareholders.
Furthermore, Directors’ remuneration is set in line with a resolution at a meeting of theBoard of Directors, and Corporate Auditors’ remuneration is set by discussion by the
Corporate Auditors thereof. When remuneration -related resolutions are being made by
the Board of Directors, the Compensation Committee, having Outside Directors making
up half of its membership, acts as an advisory body to the Board of Directors,
evaluating the content of said resolutions in the interests of greater transparency andobjectivity.
It should be noted that the retirement bonus system and stock option system wereboth discontinued in 2007.
In the interests of setting Directors’ remuneration in a reasonable manner given
roles and responsibilities, the system for doing so takes into consideration each
Director’s motivational abilities in terms of ongoing enhancement of corporation
performance and value in addition to the recruitment of talented persons.
In specific terms, remuneration comprises basic remuneration (a fixed monthly
amount) and bonuses (yearly performance-linked amounts), and each item is determined52

using survey data prepared by external specialist organizations and based on duties andstatus as Director or Outside Director. In addition, bonuses are raised or lowered basedon consolidated operating income as the main index.
In the interests of setting Corporate Auditors’ remuneration in a reasonable
manner given roles and responsibilities, the system for doing so takes the recruitment of
talented persons into consideration.
In specific terms, remuneration comprises only basic remuneration (a fixedmonthly amount), and it is determined by discussion by the Corporate Auditors using
survey data prepared by external specialist organizations and based on duties and status
as Corporate Auditor or Outside Corporate Auditor.
D. Outside Directors and Outside Corporate Auditors

1) Major activities of Outside Directors and Outside Corporate Auditors
Category
OutsideDirector

OutsideCorporate
Auditor

Name

Number of
Number of
Board of Directors Board of Auditors
meetings attended meetings attended

Form of participation

Mariko Bando

10/10

—

Ms. Bando participated in
discussions as necessary, primarily
from the perspective of her wealthof experience as an educator.

Naoki Tanaka

9/10

—

Mr. Tanaka participated in
discussions as necessary, primarily
from the perspective of his wealth ofexperience as an expert in economic
policy.

Ichiro Ito

8/10

—

Mr. Ito participated in discussions asnecessary, primarily from theperspective of his wealth ofexperience as a manager.

Takahide Sakurai

10/10

8/8

Mr. Sakurai participated in
discussions as necessary, primarily
from the perspective of his wealth ofexperience as a manager.

Naoto Nakamura

9/10

6/8

Mr. Nakamura participated in
discussions as necessary, primarily
from his expert perspective as an
attorney at law.

Tadashi Ishizaki

10/10

8/8

Dr. Ishizaki participated in
discussions as necessary, primarily
from his expert perspective as ascholar of accounting.

532) Summary of agreements limiting liability
The Company has entered into an agreement with each of its Outside Directors andOutside Corporate Auditors limiting his/her liability for damages as prescribed in
Paragraph 1, Article 423 of the Companies Act, to either ¥20,000,000 or theminimum amount stipulated by applicable laws and regulations, whichever is higher.

54

(4) Independent Auditor
A. Name of the Independent Auditor

KPMG AZSA LLC
B.

Remuneration paid to the Independent Auditor for the fiscal year under review
Amount payable

Remuneration paid for the fiscal year under review¥126 million
Total of cash and other financial profits payable by the Company and¥512 million
its subsidiaries to the Independent Auditor
Notes:
1. In its agreement with the Independent Auditor, the Company makes no distinction between the
remuneration that it pays for auditing services governed by the Companies Act and for auditing
services governed by the Financial Instruments and Exchange Act. Consequently, the amount ¥126
million shown above is a sum of these two amounts.
2. Of the Company’s principal subsidiaries, Calpis Co., Ltd. is audited by an Accounting Auditor
other than KPMG AZSA LLC.

C. Nature of non-audit professional services provided by the Independent Auditor

The Company also assigns professional duties to the Independent Auditor that are
not statutory auditing duties as stipulated in Paragraph 1, Article 2 of the Certified
Public Accountants Law. These non-audit services include “guidance and advisory
services for conversion to International Financial Reporting Standards”.

D. Company Policy regarding dismissal of or decision not to reappoint the Independent
Auditor

Article 340 of the Companies Act stipulates that the Board of Auditors shall beentitled to dismiss the Independent Auditor for reasons stipulated therein. In addition,
when it is reasonably recognized that the Independent Auditor is no longer able toexecute its duties in an appropriate manner, the Company, with the prior consent of, or arequest by, the Board of Auditors, shall offer to the General Meeting of Shareholders aresolution to dismiss or not to reappoint the Independent Auditor.

55

3. Systems to Ensure Appropriate Execution of Directors’ Duties in
Conformity With Laws and Regulations and the Articles ofIncorporation, and Other Systems to Ensure Appropriate Business
Operations
The Board of Directors passed the following resolution with respect to the abovementioned systems:
The Company has adopted the following corporate philosophy of the Asahi
Group: “The Asahi Group aims to satisfy its customers with the highest levels of quality
and integrity, while contributing to the promotion of healthy living and enrichment ofsociety worldwide”. To make these aims a reality, the Company shall:establish, in accordance with the Companies Act and the Enforcement Regulationsof the Companies Act, the following basic policies (the “Basic Policies”) to
improve systems designed to ensure appropriate business operations of theCompany and its subsidiaries (herein this section the “Group Companies”) (herein
this section the “Internal Control”);

recognize that it is the Representative Director(s) who shall assume the ultimate
responsibility for the improvement of the Internal Control in accordance with thisresolution and demand the Representative Director(s) to cause the Directors andCorporate Officers, through the respective departments and organizations they arein charge of, to develop and fully enforce individual internal regulations required
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 in a timely andappropriate 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” asstipulated in “Asahi Group’s Corporate Action Guidelines”, the Company shallestablish “Regulations on Corporate Ethics for the Asahi Group” and “Asahi Group
Corporate Ethics Guidelines” and procure its Directors, Corporate Auditors andemployees abide by these regulations.

B.

In accordance with internal regulations, the Company shall establish the “RiskManagement Committee”, which will oversee the compliance affairs and risk
management of the Asahi Group. One of the committee’s members shall be an
outside attorney-at-law.

C.

An Officer of the Company in charge of compliance shall have authority over56

compliance and risk management within the Asahi Group. The sections in chargeof general and legal affairs shall handle day-to-day compliance and risk
management tasks.
D.

The Company shall assign an appropriate number of persons as “CompliancePromotion Personnel” in each Group Company depending on its size. In
conjunction with the section in charge of legal affairs at the Company andrespective organizations in charge of general or legal affairs of the Group
Companies, all Compliance-Promotion Personnel shall endeavor to disseminate
legal knowledge and to heighten a general awareness of importance of compliancein their respective Group Companies.

E.

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

F.

The Company shall establish “Asahi Group’s Basic Policy on Procurement”
addressing mutual cooperation for fair deals and social responsibilities between theeach Group Company and suppliers and system that enables suppliers to blow awhistle on breaches of the Policy as necessary. The Company shall inform andspell out these measures to its suppliers to enable the Company to develop Internal
Control in cooperation with its suppliers.

G.

To ensure antisocial forces do not exert any undue influence on the Group, allrelevant information shall be shared within the Asahi Group and the Company
shall establish an internal system on the measures. The Company shall also
cooperate closely with industry bodies, local communities, the police and otherexternal specialist organizations in this area.

H.

The operational details of the aforementioned agencies and systems shall bespelled out under a separately prepared set of internal regulations.

<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 internal regulations.

B.

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

C.

Control over the clerical tasks related to preservation and management of theaforementioned information shall be determined in accordance with internal
regulations.

57

<Regulations and other organizational structures to manage risk of loss>A.

The Company shall develop and adopt “Asahi Group Risk Management
Regulations” and shall affirm them as the highest standards governing risk
management within the Asahi Group. It shall also establish a manual on theRegulations and disseminate the same among all over the Group.

B.

In addition to having the appropriate sections manage risk in their respective areas,
the “Risk Management Committee” shall perform comprehensive risk management
across the entire Asahi Group. The “Risk Management Committee” shallperiodically analyze and evaluate risks in accordance with internal regulations
cited in the previous paragraph and, when necessary, carry out comprehensive
reviews of the risk management system. Utmost attention shall be paid to the riskof failing to maintain product quality. As a food and drink manufacturing group,
the Asahi Group strongly recognizes their social responsibility to consumers toensure the safety of their products.

C.

In the event of any major accident, disaster or scandal, the Company shall establish
a “Crisis-Response Meeting” 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”
shall divide duties in a reasonable way to be delegated to different Directors andshall appoint appropriate persons as Corporate Officers in charge of different
sections.

B.

The Company shall establish “Regulation of Authority” stipulating rules ofdelegation of power and for a mutual checks-and-balances mechanism among
different sections.

C.

The Company shall ensure effective utilization of the system of the “Corporate
Strategy Board”.

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 Group. As
the holding company, the Company shall manage and operate the said systems of
the Group Companies in accordance with the conditions and circumstancesindividual companies are facing.
58

B.

The section in charge of internal auditing in the Company shall get a grasp of andevaluate the Internal Control and discipline in day-to-day tasks within the Asahi
Group by directly and indirectly auditing the Group Companies. In addition,
regarding the Internal Control related to financial reporting, the organization in
charge of evaluation established within the Asahi Group shall conduct theevaluation on the Internal Control of the Group Companies and submit the relevant
reports.

C.

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

D.

Decision-making authority related to business activities of the Group Companies
shall be subject to the document entitled “Asahi Group’s Regulation of Authority”.

<Securement of employees in the event that Corporate Auditors request staff to assist
in their auditing duties>
The “Board of Auditors” shall appoint staff to serve the Board of Auditors, forassistance in the day-to-day activities of the Corporate Auditors.
<Independence of employees assigned to assist the Corporate Auditors from the
Directors>
A.

When a member of the staff who serves the Board of Auditors, as stipulated in theprevious paragraph, receives an order from a Corporate 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 who serves the Board of Auditors shall require
the prior concurrence of Corporate Auditors.

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

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

B.

Directors shall ensure that Corporate Auditors have every opportunity toparticipate in discussions of important bodies, etc. such as the “Board of Directors”
meetings, the “Corporate Strategy Board” meetings and the “Risk Management
Committee” meetings. Directors shall provide details of the agenda items of such59

meetings beforehand for Corporate Auditors.
C.

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

<Other systems ensuring effective auditing by Corporate Auditors>
To ensure the effectiveness of auditing activities, Directors shall ensure
opportunities for Corporate Auditors to exchange information and opinions regularly
with members of the section in charge of internal auditing of the Company and with the
Independent Auditor.

The corporate governance system of the Company is shown in the chart below.

60

4. Basic Policy Concerning the Persons Who Control Decisions on the
Company's Financial and Business Policy<Basic policy>
According to the Company's view, the persons who control decisions on its
financial and business policy must properly grasp various matters concerning its
business, including the initiatives to “create appealing products”, to “care about quality
and craftsmanship” and to “convey the sense of joy to customers”, which form thesource of the corporate value of the Group, and other tangible and intangible
management resources thereof, potential effects of forward-looking measures and otheritems that constitute the Group's corporate value, and must enable to maintain andenhance the Group's corporate value as well as the common interests of shareholders
continuously and sustainably.
Upon facing a proposal of large-scale share purchases, the Company is not always
in a position to automatically object to the purchases if it is a so-called hostile takeover,which is pursued without approval from the Board of Directors (hereinafter referred toas the “Board”) provided that such takeover is intended to contribute to theenhancement of the Company's corporate value and the common interests ofshareholders of the Company. Also, the Company recognizes that the final decision as
to whether to accept a proposal for an acquisition of shares in the Company that would
lead to a transfer of control of the Company should be made based on the will of theshareholders as a whole.
It shall be noted, however, that there are not a few cases of large-scale sharepurchases that would not contribute to the enhancement of the corporate value and thecommon interests of shareholders of a company, including ones that would, in light of
their purposes, cause obvious damage to the corporate value and the common interestsof shareholders or could effectively coerce shareholders to sell their shares, ones that thepurchaser 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 thoseinitially proposed by the purchaser.
The person who intends to conduct a large-scale purchase of shares in the Company
must have an understanding of the source of the Group's corporate value and have thecapability to maintain and enhance it in the medium and long term; otherwise, theGroup's corporate value and the common interests of shareholders would be damaged.
Based on the factors and matters stated above, the Company determines that it isvital to have in place a framework for preventing large-scale share purchases that would
61

undermine the Group's corporate value and the common interests of shareholders.
<Framework that contributes to realization of the basic policy>

A. Special Measures Contributing to Realization of the Basic Policy
In its “Long-Term Vision 2015”, the Company sets out its aim to “Striving fortransforming the bounty of nature into the “Kando” (joy and satisfaction) of food
while becoming a trusted company with global quality”. Measures set forth in“Medium-Term Management Plan 2012” in order to achieve this aim got underway
in earnest in 2010.
“Medium-Term Management Plan 2012” targets further enhancement of theCompany’s strengths in “craftsmanship” as a means of boosting corporate value; in
addition, it also looks to raise quality in all aspects of business – from products, tomanagement, to human resources – to world class levels and to raise theprofitability of existing businesses in order to develop a new growth path.
Meanwhile, the Company has adopted “Share the Kando” as its Corporate
Brand Statement, underlining its commitment to clearly define the value that theGroup delivers to customers and to society as a whole.
The Company is convinced that by diligently implementing “Medium-Term
Management Plan 2012” in pursuit of the goals of “Long-Term Vision 2015”, andtherefore, by successfully delivering the value called for by the Corporate Brand
Statement based on the raison d’être engrained in the Group’s corporate philosophy,
it can significantly strengthen the relationship of trust between the Group and its
stakeholders, and in addition, can secure and enhance corporate value, and thus, thecommon interests of shareholders.
Furthermore, the Company also plans to further strengthen its corporate
governance in the execution of the above-mentioned measures.
By introducing a corporate officer (Sikko-Yakuin) system on March 30, 2000,
the Company separated the management decision-making and execution functions
with a view to speeding up execution of business decisions and endeavored tostrengthen the supervisory function of the Board. In addition, the Company
operates a system that facilitates checks by Outside Directors/Corporate Auditors
by electing Outside Directors/Corporate Auditors and by establishing the“Nomination Committee” and the “Compensation Committee”, both including
Outside Directors as their members, as a sub-body of the Board.
In order to further clarify the accountability of the management to shareholders,the Company shortened the term of office of its Directors from two years to one
year at the 83rd Annual General Meeting of Shareholders held on March 27, 2007.
By transitioning to a pure holding company structure in July 2011, the62Company strengthened its business platforms through the pursuit of specializationand the clarification of authorities and responsibilities of each business section, as
well as promoted the expansion of domestic and overseas business networks inorder to enhance its corporate value.
B. Efforts to prevent decisions on the Company’s financial and business policy
from being controlled by any person who is inappropriate according to thebasic policy (plan against large-scale purchase of shares in the Company)
With the approval at the meeting of the Board held on February 8, 2010, theCompany resolved to update its “countermeasures against large-scale purchases ofthe shares in the company” (hereinafter, the “Plan”) in light of the fundamental
approach to corporate control as set forth in <Basic policy> above, and the updated
Plan was approved at the 86thAnnual General Meeting of Shareholders held on
March 26, 2010.

The Plan shall be applicable to any of the following two types ofPurchase(s)(“Purchase”).
i) A purchase of shares in the Company as a result of which the holder’s(shareholder’s) holding ratio will rise to 20% or more of the total outstanding
shares in the Company; andii) A tender offer for shares in the Company as a result of which the purchaser’s
shareholding ratio targeted by the tender offer and the holding ratio of “persons
in special relationship”, when combined, will be 20% or more of the total
outstanding shares in the Company.
A Purchaser contemplating a Purchase shall be requested to provide in advanceof commencement of the Purchase a statement of intent containing a written pledge
to follow the procedures set forth in the Plan in conducting the Purchase. Thereafter,
the Purchaser shall be requested to provide, in a format set forth by the Company, aPurchase Prospectus containing the information necessary to evaluate the content
of the Purchase. The Company shall present the content of the Purchase Prospectus
to the Independent Committee whose members shall consist of Outside Directors,
Outside Corporate Auditors and/or experts, all of whom are independent ofmanagement of the Company. The content shall be assessed and evaluated by thiscommittee. On its own accord, the Independent Committee will obtain advice fromindependent third parties (including financial advisers, CPAs, lawyers, consultants
and other experts) and, on the basis of such advice, will assess and evaluate thecontent of the Purchase, evaluate alternative proposals offered by the Company’s
Board, negotiate with the Purchaser, and disclose information to shareholders of the63Company. If the Independent Committee determines that the information provided
by the Purchaser does not meet the criteria for the Required Information (as definedin the Plan), it may, either directly or indirectly, request the Purchaser to submit
additional information within an appropriate period of time as designated by the
Independent Committee. In this event, the Purchaser shall submit such additional
information within the period of time provided.
The Independent Committee will make recommendations to the Board to
execute the Plan to allot gratis the Stock Acquisition Rights (as defined in the Plan)
to shareholders of the Company if the Independent Committee has determined that
the Purchase meets either of the requirements for exercise of the Plan and it isappropriate to so exercise: e.g. in case the Purchaser has not observed and followed
the procedures specified in the Plan or in case, as a result of review by theCommittee, the Committee concludes the Purchase could cause obvious damage to
the Company’s corporate value and the common interests of shareholders in theopinion of the Committee. In the event that the Independent Committee cannot
easily determine whether or not the Purchase as set forth in the Plan (a) could cause
obvious damage to the Company’s corporate value and the common interests ofshareholders; (b) could result in implementation of a coercive two-tier purchasemethod or any other method by which the shareholders could be forced to sell theirshares; or (c) its terms would be notably inadequate or inappropriate in light of thefundamental value of the Company, said Independent Committee may attach an
opinion to its recommendation that the will of the shareholders concerning
execution of the gratis Allotment of the Stock Acquisition Rights should be
confirmed at a shareholders’ meeting. These Stock Acquisition Rights shall entitle
their holders to acquire one (1) share of the common stock in the Company by
exercising the rights at a price to be determined by the Company’s Board - whichshall be set at a level between a minimum of one (1) yen and a maximum of onehalf the market value per share of the Company’s stock. In addition, these rights
shall contain conditions that exclude the Purchaser from exercising the rights andshall also be accompanied by provisions that enable the Company to acquire one(1) Stock Acquisition Right in exchange for one (1) share of the Company’s stockfrom persons other than the Purchaser.
While paying utmost respect to the recommendation made by the Independent
Committee as stated above, the Company’s Board shall, as the organizational bodyauthorized to do so under the Companies Act, promptly decide whether or not to
execute the gratis Allotment of the Stock Acquisition Rights. In the event that theBoard deems confirmation of the will of the shareholders to be appropriate andconvenes a shareholders’ meeting for this purpose, the Board shall, as theauthorized body as described above and in accordance with the resolution of said
64

meeting, issue a resolution concerning execution or non-execution of the gratis
Allotment of the Stock Acquisition Rights.
The Plan shall be effective from the conclusion of the 86th Annual General
Meeting of Shareholders held on March 26, 2010 until the conclusion of theCompany’s Annual General Meeting of Shareholders that concerns the last one of
the Company’s business years that end within three years from the conclusion of
the 86th 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.
Under the Plan, shareholders of the Company remain directly and specificallyunaffected unless and until the gratis Allotment of the Stock Acquisition Rights is
executed. On the other hand, if the Plan is set in motion and a gratis Allotment of
the Stock Acquisition Rights is executed, the shares held by a shareholder of theCompany will be subject to dilution unless he/she carries out the procedures
required for the exercise of the Stock Acquisition Rights (note, however, nodilution shall occur in case the Company exercises option of acquisition of theStock Acquisition Rights for shares in the Company).
<Judgment of the Company’s Board regarding the specific measures and reasons
therefor>The special measures intended to contribute to realization of the Basic Policies
described above in A of <Framework that contributes to realization of the basic policy>
conform to the basic policy of the Company as described above, are fully compatible
with the corporate value and the common interests of shareholders of the Company, andare never implemented for the purpose of maintaining the status of Directors andCorporate Auditors of the Company.
The following elements having been taken into consideration and incorporated into
the design of the Plan described above in B of <Framework that contributes torealization of the basic policy>, the Board of the Company believes that the Plan
conforms to the basic policy of the Company as described above and meets thecorporate value as well as common interests of shareholders of the Company and that itis never for the purpose of maintaining the status of Directors and Corporate Auditors of
the Company.
A. Respect for Shareholders’ WillThe Plan was approved at the 86th Annual General Meeting of Shareholders held on
March 26, 2010.
65The effective period of the Plan is limited, running until the conclusion of theCompany’s Annual General Meeting of Shareholders that concerns the last one of
the Company’s business years that end within three years from the conclusion of
the above Annual General Meeting of Shareholders.



The term of office of Directors is one year, allowing the shareholders to have theirintentions reflected through elections of Directors every year.

B. Respect for Judgment of Outside Parties with High Degree of Independence
and Information Disclosure
In updating the Plan, the Company has established the Independent Committee
as a body to make a substantial judgment objectively with regard to mattersconcerning the operation of the Plan such as its exercise of, abrogation of,amendment to or alteration of the Plan for and on behalf of shareholders with aview to preventing arbitrary decisions by the Board. The members of the
Independent Committee consisting of three (3) or more are appointed by the Board
from among Outside Directors, Outside Corporate Auditors and/or experts whomeet the requirements stipulated in the Company’s internal rules for the
Independent Committee.
Once a Purchase has been made, the Independent Committee shall offer arecommendation as to whether or not the Purchase would damage the Company’s
corporate value as well as common interests of shareholders, as stated above. Then,the Board shall honor the Independent Committee’s recommendation andsubsequently make a resolution under the Companies Act.
In this way, the Independent Committee shall maintain close surveillance overthe Board to prevent any arbitrary decision by the Board and disclose toshareholders information concerning the details of its judgment, thus ensuring that
the Plan will be handled in a transparent manner within the limits necessary forcontributing to the enhancement of the Company’s corporate value as well as
common interests of shareholders.

66

C. Setting of Reasonable and Objective Conditions
The Plan is designed in ways not to be triggered unless and until reasonable
and objective conditions are met, and ensures a structure to eliminate arbitrary
triggering by the Board.

(Reference)
This plan is valid until the conclusion of the 89th Annual General Meeting of
Shareholders to be held on March 26, 2013.
Although this is not officially a part of the business report, we hereby report to ourshareholders that the Company’s Board of Directors held on February 13, 2013 resolved
to abolish this plan without renewing it upon conclusion of the aforementioned Annual
General Meeting of Shareholders.
67

CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEETS
As of
December 31, 2012

Million yen
As ofDecember 31, 2011
(Reference)

ASSETS
Current assets:
Cash and deposits
Notes and accounts receivable
Merchandise and finished goods
Raw materials and supplies
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets

34,573
317,008
79,152
34,366
12,62256,379(4,914)
529,189

16,893
279,596
70,40032,22912,982
48,369(3,326)457,145

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

170,347
127,276
50,374
205,553
21,944
7,828
73
583,398

164,671
123,455
46,740176,054
19,8715,354
88536,236

Intangible fixed assets:
Goodwill
Other intangible fixed assets
Total intangible fixed assets

203,764
95,373299,137

184,407
49,880234,288266,248
4,232
8,245
18,212
26,932(3,409)320,461
1,202,998
1,732,187

236,099
5,103
8,601
28,95029,136(5,655)302,237
1,072,762
1,529,907

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
Total assets

68

CONSOLIDATED BALANCE SHEETS

As of
December 31, 2012

Million yen
As ofDecember 31, 2011
(Reference)

117,774
174,697—
7,975
112,598
17,722
23,201
67,91060,376
21,20068,0004,139
4,470
680,068

104,527
136,679
25,0006,200
111,063
17,41225,01861,221
61,877
18,931
28,0003,051
3,182
602,166

188,121
25,415
15,62023,851

160,133
40,27915,133
21,854480
31,433471
39,846325,239
1,005,308

372
6,601
478
39,089283,942886,108

LIABILITIES AND NET ASSETSLIABILITIESCurrent liabilities:
Notes and trade accounts payable
Short-term borrowings
Bonds due within one year
Lease obligations
Alcohol tax payable
Consumption taxes payable
Income taxes payable
Other accounts payable
Accrued expenses
Deposits received
Commercial paper
Allowance for employees’ bonuses
Other current liabilities
Total current liabilities
Long-term liabilities:
Bonds
Long-term borrowings
Lease obligations
Allowance for employees’ severance and retirement benefits
Allowance for retirement benefits for directors and corporate
auditors
Deferred tax liabilities
Asset retirement obligations
Other long-term liabilities
Total long-term liabilities
Total liabilities

69

CONSOLIDATED BALANCE SHEETS

As of
December 31, 2012

Million yen
As ofDecember 31, 2011
(Reference)

NET ASSETS
Shareholders’ equity:
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity

182,531150,641
383,177(27,763)688,586

182,531
150,788338,809(28,295)
643,833

Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Total accumulated other comprehensive income

3,259
(5)
31,97835,232(2,685)1584(2,100)3,060
726,879
1,732,187

2,065
643,798
1,529,907

Minority interests
Total net assets
Total liabilities and net assets

70

CONSOLIDATED STATEMENTS OF INCOME

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income:Interest income
Dividend income
Gain on valuation of derivatives
Equity in net income of non-consolidated subsidiaries andaffiliated companies
Other non-operating income
Non-operating expenses:
Interest expenses
Other non-operating expenses
Recurring profit
Extraordinary gains:
Gain on sales of fixed assets
Gain on sales of investment securities
Gain on sales of shares in affiliates
Reversal of allowance for doubtful accounts
Gain on change in equity
Other extraordinary gains
Extraordinary losses:
Loss on sales and disposal of fixed assets
Loss on sales of investment securities
Loss on devaluation of investment securities
Impairment loss on fixed assets
Loss on factory restructurings
Loss on liquidation of subsidiaries and affiliates

For the year ended
December 31, 2012

Million yen
For the year ended
December 31, 2011
(Reference)

1,579,076
974,702604,374
495,937
108,437
14,123
402
1,335
207

1,462,736
907,234
555,492
448,302
107,190
11,154
333
1,136
3,079

10,616
1,559
7,738
4,043
3,695
114,821
9,356
353
187
201
—
8,088
525
24,338
3,388
93
888
3,069
1,459

5,479
1,125
7,435
3,668
3,767
110,909
10,387
2,607
535
4,677
966
—
1,599
30,874
3,695
0
2,192
—
734

Earthquake related expenses
Loss on adjustment for changes of accounting standard for
asset retirement obligations
Business integration expenses
Adjustment of goodwill
Other extraordinary losses
Income before income taxes and minority interests

0—18
17,914

—
5,943
7,954
1,539
99,840

460
3,615
—
2,243
90,422

Income taxes－current

33,85429,937

Income taxes－deferred

8,453
57,532
349
57,183

4,949
55,535441
55,093

Income before minority interests
Minority interests
Net income
71

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Million yen

For the year ended December 31, 2012
Shareholders' equity

Balance as of Jan. 1, 2012

Capital stock

Capital surplus

Retained earnings

Treasury stock

Total
shareholders'equity182,531

150,788338,809(28,295)

643,833

Changes during the term
Dividends(12,808)(12,808)

Net income (loss)

57,18357,183Acquisition of treasury stock
Disposal of treasury stock(147)

Change in scope of equity
method

(13)

(13)

545

398

(7)

(7)

Other changes in nonshareholders' equity items
during the term (net)Total changes during the term—

Balance as of Dec. 31, 2012

182,531(147)

44,368532

44,753

150,641

383,177(27,763)688,586

Accumulated other comprehensive income

Balance as of Jan. 1, 2012

Valuationdifference on
available-forsale securities

Deferred gains orlosses on hedges(2,685)1Foreign currencytranslation
adjustments

584

Total
accumulated
othercomprehensive
income(2,100)Minority
interests

Total
net assets

2,065

643,798

Changes during the term
Dividends(12,808)

Net income (loss)

57,183Acquisition of treasury stock(13)

Disposal of treasury stock

398

Change in scope of equity
method(7)

Other changes in nonshareholders' equity items
during the term (net)

5,945

Total changes during the term

5,945

(6)

31,39437,333994

83,080

Balance as of Dec. 31, 2012

3,259

(5)

31,97835,232

3,060

726,879(6)

72

31,39437,333994

38,327

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Basis for Preparation of Consolidated Financial Statements(1) Items in the scope of the consolidation
A. Number of consolidated subsidiaries: 84
Principal consolidated subsidiaries
Please see Item 1 of the “Business Report” (“Overview of Operations of the Asahi
Group, section (7) ‘Principal Subsidiaries’”), for a summary of the current status ofprincipal consolidated subsidiaries.
Companies added to the scope of consolidation during the consolidated fiscal year underreview were Mountain H2O Pty Ltd., Calpis Co., Ltd., Calpis Foods Service Co., Ltd.,
Calpis U.S.A., Inc., Taiwan Calpis Co., Ltd. and PT. Calpis Indonesia due to theacquisition of their shares; and PT. Asahi Indofood Beverage Makmur and Calpis
America, Inc. due to their incorporation.
Companies removed from the scope of consolidation during the consolidated fiscal year
under review were Flavoured Beverages Group Holdings Limited, Asahi Liquor New
Zealand Limited and Asahi Beverages New Zealand Limited due to merger withconsolidated subsidiaries.
B. Principal non-consolidated subsidiary
DEMBALL LIMITED
Rationale for exclusion from the scope of consolidation:
The non-consolidated subsidiary including the one mentioned above is all small in termsof total assets, sales, net profit or loss, and retained earnings (amount corresponding toequity ownership); it has no material impact as a whole on the consolidated financial
statements and is thus excluded from the scope of consolidation.
(2) Items concerning application of the equity method
A. Number of companies subject to application of the equity method: 100
Non-consolidated subsidiaries subject to application of the equity method: 2
Asahi Group Engineering Co., Ltd., Yeastock, Ltd.
Yeastock, Ltd. was subject to application of the equity method during the consolidated
fiscal year under review due to additional acquisition of shares.
Affiliates subject to application of the equity method: 98
These include Asahi Business Solutions Corp., Shenzhen Tsingtaobeer Asahi Co., Ltd.,
Asahi & Mercuries Co., Ltd., Tsingtao Brewery Co., Ltd., China Foods Investment
Corp., Jiangsu Saint Fruit Winery Co. Ltd, Tingyi-Asahi Beverages Holding Co., Ltd.
73

and eighty-eight (88) other affiliated companies, one (1) affiliated company of Mountain
H2O Pty Ltd., Shanghai Jiayou Investment Management Co., LTD. and PT. Indofood
Asahi Sukses Beverage.
Companies that became subject to application of the equity method during theconsolidated fiscal year under review are fifteen (15) affiliates of Tingyi-Asahi
Beverages Holding Co., Ltd. and PT. Indofood Asahi Sukses Beverage due toincorporation; twenty-three (23) affiliates of Tingyi-Asahi. Beverages Holding Co., Ltd.
and one (1) affiliate of Mountain H2O Pty Ltd. due to acquisition of their shares; andShanghai Jiayou Investment Management Co., LTD. due to an increase in its materiality.
Companies no longer subject to application of the equity method in the consolidated
fiscal year under review are one (1) affiliate of Tingyi-Asahi Beverages Holding Co.,
Ltd., due to liquidation; and Yeastock, Ltd. due to additional acquisition of shares.
B. Principal non-consolidated subsidiaries and affiliates not subject to application of the equity
methodNon-consolidated subsidiaries:

DEMBALL LIMITED

Affiliates:

Asahi Business Produce Co., Ltd.

Rationale for not applying the equity method to the non-consolidated subsidiaries andaffiliates:
The companies in question have extremely slight impact on net profit or loss andretained earnings (amount corresponding to the Company’s equity ownership); they haveno material impact as a whole on the consolidated financial statements and thus theequity method was not applied.

(Additional Information)
Matters relating to application of the equity method
Although the equity on earnings of affiliates for Tingyi-Asahi Beverages Holding Co.,
Ltd. and its affiliates had heretofore been calculated using closing figures from
December, when the company’s fiscal year ends, the Company has adopted the methodof calculating equity in earnings of affiliates using financial statements based on theprovisional fiscal year ending at September 30 (calculated by a reasonable procedure inaccordance with legitimate accounting methods) beginning from the consolidated fiscal
year under review in order to expedite disclosures and decision making relating tofinancial performance. However, because equity on earnings based on the company’s
financial statements as of the consolidated closing on December 31 was recognized in
the previous consolidated fiscal year, the equity based on the company’s closing figures
for a nine-month period is recognized for the consolidated fiscal year under review.
74

(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
was used for Asahi Beer U.S.A., Inc. for consolidation purposes. All other consolidated
subsidiaries have the same accounting period as the Company.
(4) Significant accounting policies
A. Policies and methods of valuation for significant assets
1) Valuation basis and method for securities
Held-to-maturity debt securities:
Held-to-maturity debt securities are stated at the 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 net assets, and the cost of securities sold is computed by themoving-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
mainly by the weighted-average method (write-downs to net selling value regarded as
decreased profitability).
Raw materials and supplies are stated at cost determined mainly by the movingaverage method (write-downs to net selling value regarded as decreased profitability).
B. Depreciation methods for major assets
Tangible fixed assets (excluding lease assets):
Tangible fixed assets are mainly depreciated using the straight-line method. However,some consolidated subsidiaries use the declining balance method.
The estimated useful lives of the assets are based mainly on the same standards as
those specified in the Corporation Tax Act.
Intangible fixed assets (excluding lease assets):
Intangible fixed assets are amortized using the straight-line method.
75

The estimated useful lives of the assets are based mainly on the same standards as
those specified in the Corporation Tax Act.
Software for internal use is amortized by the straight-line method over a useful life of
five (5) years. Trademark rights are mainly amortized over twenty (20) years using thestraight-line method.
Lease assets:
Finance leases that do not transfer ownership rights are amortized to a residual valueof zero using the straight-line method, with the lease period as the estimated usefullife.
Of the finance leases that do not transfer ownership rights, those that began before
December 31, 2008 are treated similarly as those applied to regular operating leases.
C. Accounting criteria for major allowances
Allowance for doubtful accounts:
The allowance for doubtful accounts consists of the individually estimateduncollectible amounts with respect to certain identified doubtful receivables and theamounts calculated using the rate of actual collection losses with respect to the otherreceivables.
Allowance for employees’ severance and retirement benefits:
The Company and its consolidated subsidiaries make provisions in the necessaryamount of allowance for employees’ severance and retirement benefits deemed tohave accrued during the term, based on each company’s projected benefit obligations
and the pension fund balance as of the end of the consolidated fiscal year underreview.
Actuarial gain or loss is amortized, beginning in the year following the year in which
the gain or loss is recognized, by the straight-line method for a given number of years(mainly ten (10) years) within the employees’ average remaining years of service.
Prior service costs are amortized by the straight-line method within the employees’
average remaining years of service (mainly ten (10) years) from the time they arise.
Allowance for retirement benefits for Directors and Corporate Auditors:
Some of the consolidated subsidiaries calculate the required amount as of the end of
the consolidated fiscal year under review, based on internal regulations, in
preparation for payment of retirement benefits to Directors and Corporate Auditors.
Allowance for employees’ bonuses:
An allowance for employees’ bonuses is provided at the estimated amount applicableto the consolidated fiscal year under review.
76D. Other significant items associated with the preparation of consolidated financial statements
1) Significant hedge accounting method
a. Hedge accounting method
The Company defers gains or losses on its hedges.
For currency swaps, the Company allocates differences in the values of hedging
instruments when such hedges meet all requirements for such allocations. For interest
rate swaps, the Company applies exceptional treatment when the swap in question meetsthe conditions for application of such exceptional treatment.
b. Hedging instruments and hedged items
Hedging instruments:

Currency swaps, foreign exchange contracts and interest
rate swaps

Hedged items:

Transactions in foreign currencies and interest on
borrowingsc. 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. It is theCompany’s policy not to engage in speculative transactions that deviate from realdemand 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 periodof the hedge. When the Company allocates differences in the values of hedging
instruments or when it accounts for the value of swaps under exceptional treatment,these determinations allow it to forgo evaluation of the effectiveness of hedges in thesecases.
2) Treatment of consumption taxes
Consumption taxes are mainly excluded from the statements of income, except in thecase of non-deductible consumption taxes related to fixed assets that are charged whenincurred.
(5) Amortization of goodwill
Goodwill is amortized by the straight-line method over a five (5) to twenty (20)year period.

77

(Additional Information)
Application of Accounting Standards for Accounting Changes and Error Corrections
The Company has applied “Accounting Standards for Accounting Changes and Error
Corrections” (ASBJ Statement No. 24, published December 4, 2009) and “Guidance on
Accounting Standards for Accounting Changes and Error Corrections” (ASBJ Guidance
No. 24, published December 4, 2009) to the accounting changes and errors corrections
made on or after January 1, 2012.

2. Notes to the Consolidated Balance Sheets(1) Pledged assets and secured liabilities
The following assets have been provided as collateral for short–term borrowings of ¥261
million and long-term borrowings of ¥1,087 million:
Buildings and structures:¥3,970 million

Machinery, equipment and vehicles:¥1,845 million

Land:¥9,188 million

Total¥15,003 million(2) Accumulated depreciation of tangible fixed assets:¥781,923 million(3) Contingent liabilities
Guarantees:¥691 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 clearing houses the next business day. Current
assets and current liabilities thus respectively include notes receivable and notes payable
with maturity on the balance sheet date as follows:
Notes receivable:¥180 million

Notes payable:¥124 million

3. Notes to the Consolidated Statements of Income(1) Non-operating expenses
Among non-operating expenses, “Other non-operating expenses” include goodwill
amortization costs of ¥424 million arising in relation to the holding company of a Groupaffiliate accounted for by the equity method.

78

(2) Extraordinary loss
The “adjustment of goodwill” recognized as extraordinary loss mainly comprises loss
attributable to circumstances that the Company found out after the acquisition of Flavoured
Beverages Group Holdings Limited (currently Independent Liquor (NZ) Limited), an
alcoholic beverage company in New Zealand acquired in 2011, that there was false
information in the financial information provided by the seller side, which served as thebasis for the purchase price of the company. The Company has decided to take legal actions
in order to recover the damages incurred. The amount of loss recognized by the Company
for accounting purposes differs from the amount of damages incurred in the legal sense,
which will be determined by the Court based on legal principles and expert evidence.
4. Notes to the Consolidated Statements of Changes in Net Assets(1) Total number of the issued shares as of the end of the consolidated fiscal year underreview
Common stock

483,585,862 shares(2) Dividends from surplus distributed during the consolidated fiscal year under review
A. It was resolved at the 88th Annual General Meeting of Shareholders of March 27, 2012 asfollows:
Item related to dividends on common stock
Total amount of dividends:¥6,286 million
Dividend per share:¥13.50Record date:
December 31, 2011
Effective date:
March 28, 2012
B. It was resolved at the Board of Directors Meeting of August 2, 2012 as follows:
Item related to interim dividends on common stock
Total amount of interim dividends:¥6,522 million
Interim dividend per share:¥14
Record date:June 30, 2012
Effective date:August 31, 2012
(3) Dividends from surplus to be distributed after the final day of the consolidated fiscal
year under review
The following item has been placed on the agenda for approval at the 89th Annual General
Meeting of Shareholders scheduled for March 26, 2013.
Item related to dividends on common stock
Source of dividends:
Retained earnings
Total amount of dividends:¥6,523 million
Dividend per share:¥14
Record date:
December 31, 2012
Effective date:
March 27, 201379

(4) Number of shares subject to stock acquisition rights upon exercise thereof at the end of theconsolidated fiscal year under review
The First Issue of stock acquisition rights (issued March 28, 2003)
Number of stock acquisition rights:

33

Class and number of shares subject to the stock acquisition rights:
33,000 shares of common stock
Amount to be paid in per share upon exercise of the stock acquisition rights:
Exercise period:¥830

March 28, 2005 to March 27, 2013

The Second Issue of stock acquisition rights (issued March 30, 2004)
Number of stock acquisition rights:

2,820

Class and number of shares subject to the stock acquisition rights:
282,000 shares of common stock
Amount to be paid in per share upon exercise of the stock acquisition rights:
Exercise period:¥1,205

March 30, 2006 to March 29, 2014

The Third Issue of stock acquisition rights (issued March 30, 2005)
Number of stock acquisition rights:

5,247

Class and number of shares subject to the stock acquisition rights:
524,700 shares of common stock
Amount to be paid in per share upon exercise of the stock acquisition rights:
Exercise period:¥1,374

March 30, 2007 to March 29, 2015

The Fourth Issue of stock acquisition rights (issued March 30, 2006)
Number of stock acquisition rights:

6,120

Class and number of shares subject to the stock acquisition rights:
612,000 shares of common stock
Amount to be paid in per share upon exercise of the stock acquisition rights:
Exercise period:¥1,688March 30, 2008 to March 29, 2016

5. Notes on Financial Instruments(1) Financial instruments
A. Policy on handling of financial instruments
The Company and its principal consolidated subsidiaries procure necessary funds via loans
from financial institutions and by issuing commercial paper and bonds while taking into
account the changing business environment. In doing so, the Company and its principal
consolidated subsidiaries consider the balance between direct or indirect financing as well as
short and long-term debt based on fund procurement costs and risk diversification. Looking
80to use funds efficiently, the Group introduced a cash management system among theCompany and its principal domestic consolidated subsidiaries to reduce consolidated
interest-bearing debt. If surplus funds are generated temporarily, as a result, the Company
invests it in safe financial instruments.
The Company’s policy is to use derivatives trading only to hedge risks to be discussed later,and not for speculation.
B. Details of financial instruments and risks
Trade receivables of the Group companies, including notes and accounts receivable andlong-term loans receivable, are exposed to client credit risks. Additionally, foreign currencybased trade receivables are exposed to currency fluctuation risk as well.
Securities and investment securities of the Company and the Group companies include
equity interests in business partners and bonds to be held to maturity and are thus exposed torisks of the stock or bond issuer (i.e., the business partner) as well as market pricefluctuation risk. Of these, foreign currency-based investment securities are exposed tocurrency fluctuation risk as well.
Trade payables of the Group companies, including notes and trade accounts payable andother accounts payable, generally have a due date of one (1) year or less. Foreign currencybased trade payables are exposed to currency fluctuation risk as well.
Commercial paper, borrowings, and bonds are exposed to liquidity risk (i.e., the risk ofbeing unable to make payment on the due date due to deterioration in the funds procurement
environment). Some of the Company’s borrowings are based on variable interest rates, forwhich the Company hedges risks using interest rate swaps. Foreign currency-based
borrowings are exposed to currency fluctuation risk as well.
Derivatives trades include currency swap transactions and foreign exchange contracts tohedge against foreign exchange fluctuation risks related to foreign-currency based
receivables and payables, interest rate swap transactions to hedge against interest rate risks
on borrowings, and commodity swap transactions and currency option transactions to hedge
against price fluctuation risks when overseas subsidiaries procure raw materials.
For hedging instruments, hedged items, hedging policy, and method of evaluating theeffectiveness of the hedging for the hedge accounting, please see “Significant hedge
accounting method” within “Significant accounting policies” discussed earlier.
C. Risk management system relating to financial instruments
1) Credit risk management (managing risks related to business partners not fulfilling
contract obligations)
In accordance with accounting rules, guidelines on handling accounting operations, andaccounts receivable management rules, each business section or sales management section81

of the Group companies regularly monitors trade receivables and long-term loans to major
business partners. The above sections also routinely check the management status ofdeadlines and balances for each business partner. In collaboration with each of the sales
sections, the Group companies monitor non-performing assets and their collection status.
When executing derivatives transactions, the Company as a rule limits its transactions tofinancial institutions with high credit ratings to minimize credit risk.
2) Managing market risks (foreign exchange and interest rate fluctuation risks)
Looking to reduce foreign exchange fluctuation risks on future foreign currency-based
cash flows which the Company has ascertained for specific currencies, the Company has
established a currency hedging policy which mainly uses currency forward contracts basedon the current status and future outlook of the foreign exchange market. The transactions arebeing carried out in accordance with the regulation of authority. The Company also engages
in interest rate swap transactions to avoid interest rate fluctuation risks relating toborrowings.
For securities and investment securities, the Group companies regularly monitor theirmarket values and financial status of the issuers (the Group company’s business partners).
This is to review the Group company’s holdings on a consistent basis based on its
relationship with business partners.
Each finance section engages in derivatives transactions in accordance with thederivatives transaction management rules which stipulate the transaction policy and trading
authority and reports the transactions to the Executives in charge of finance pursuant to theregulation of authority. Consolidated subsidiaries also manage their trading according to theCompany’s rules.
3) Managing liquidity risk related to funds procurement (risk of being unable to makepayment on the due date)Since the Company and its principal domestic consolidated subsidiaries have introduced
the cash management system, the Company manages liquidity risks of those companies
participating in this system.
Based on reports from each Section and each company, the Company’s Finance Section
manages liquidity risk by creating and updating its cash management plan as necessary andby engaging in efficient fund procurement while reducing short-term liquidity.
(2) Market value of financial instruments
The amount recorded on the consolidated balance sheets at the end of the consolidated fiscal
year under review, the market value and the difference between the two are shown below foreach financial instrument. Financial instruments with respect to which the Company considers
deriving the market value to be extremely difficult are not included in the table (see Note 2).
82Million yen

Amounts
recorded on the
consolidatedbalance sheets
34,573
317,008(3,635)313,372

Market value

Difference(1) Cash and deposits
34,573—(2) Notes and accounts receivable
Allowance for doubtful accounts (*1)
Notes and accounts receivable (net)313,372—(3) Securities and investment securities
A. Shares in affiliates
74,115
135,779
61,664
B. Held-to-maturity debt securities
500
500
0
C. Other securities
76,75076,750—(4) Long-term loans receivable (*2)
7,387Allowance for doubtful accounts (*3)
(2,796)Long-term loans receivable (net)
4,591
4,597
6
Total assets
503,902565,574
61,671(1) Notes and trade accounts payable
117,774
117,774—(2) Short-term borrowings
159,330
159,330—(3) Other accounts payable
67,91067,910—(4) Deposits received
21,20021,200—(5) Commercial paper
68,00068,000—(6) Bonds
188,121
191,101
2,979(7) Long-term borrowings (*4)
40,782
41,367585(8) Lease obligations (*5)
23,59624,333737
Total liabilities
686,715
691,018
4,302
Derivatives (*6)
(146)
(146)
—
(*1) Allowances for doubtful accounts recorded under notes and accounts receivable are excluded.
(*2) Long-term loans receivable within one (1) year are included.
(*3) Allowances for doubtful accounts recorded individually under long-term loans receivable areexcluded.
(*4) Long-term borrowings due within one (1) year are included.
(*5) Lease obligations (current liabilities) are included.
(*6) The net amount of receivables and payables accrued from derivatives transactions are indicated.

Note 1. Calculation methods for deriving market values of financial instruments, items relating
to securities and derivatives transactions
Assets(1) Cash and deposits, (2) Notes and accounts receivable
Book value is used because these items are settled in a short time, making their market
value about equivalent to their book value.
(3) Securities and investment securities
Market value at financial instruments exchange is used for stock, whereas the value
indicated by the financial institution with which the Company does business is used for
debt securities and others.
(4) Long-term loans receivable
The market value of long-term loans receivable is calculated by discounting the expectedvalue of principal and interest receivable by the interest rate expected if a similar new
loan were to be issued.
Liabilities(1) Notes and trade accounts payable, (2) Short-term borrowings, (3) Other accounts payable,83(4) Deposits received, and (5) Commercial paperBook value is used because these items are settled in a short time, making their market
value about equivalent to their book value.
(6) Bonds
For bonds the Company issues, market price is used for those that have a market value
and the price indicated by financial institutions with which the Company does business isused for those without market value.
(7) Long-term borrowings
The market value of long-term borrowings is calculated by taking the total amount ofprincipal and interest and discounting it by the interest rate expected if a new borrowing
were to be taken out, thereby deriving the present value. Long-term borrowings withvariable interest rates are subject to exceptional treatment using interest rate swaps.
These are calculated by discounting the total amount of principal and interest involved in
the interest rate swap concerned by the interest rate deemed appropriate if a similarborrowing were to be taken out.
(8) Lease obligations
The market value of lease obligations is calculated by taking the present value of theobligation concerned – discounting the total amount of principal and interest by theinterest rate expected if a similar, new lease obligation were to be incurred.
Derivatives transactions
The Company considers the price indicated by the financial institution with which it does
business as the market value. However, since derivatives transactions subject to exceptional
treatment using interest rate swaps are processed as part of long-term borrowings subject tohedging, the market value of these derivative transactions are recorded as part of the market
value of the long-term borrowings concerned.
Note 2. Of the other securities and securities of affiliates, those that are unlisted (¥115,382
million recorded on the consolidated balance sheets) do not have a market price andestimating future cash flow is not possible. The Company thus considers deriving theirmarket value as being extremely difficult and does not include these securities under(3) Securities and investment securities.

6. Per share information(1) Net assets per share:¥1,553.35(2) Net income per share:¥122.75

7. Other notes
Figures in amounts of less than one million yen are omitted.

84

Reference: CONSOLIDATED STATEMENTS OF CASH FLOWS (Summary)

Cash flows from operating activities:
Income before income taxes and minority interests
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for employees' severance
and retirement benefits
Increase (decrease) in allowance for doubtful accounts
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in alcohol tax payable
Other cash flows from operating activities
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities

For the year ended
December 31, 2012

Million yen
For the year ended
December 31, 2011

99,84059,365
10,55290,422
58,134
6,796

1,693
(509)
(8,797)(5,373)(3,399)1,208
2,480
157,062
5,020(4,275)(48,515)
109,292(1,423)(1,811)(837)(3,089)(890)(9,293)
14,896
152,904
5,745(3,345)(46,791)
108,513(40,341)(4,741)
1,039
552(26,594)(8,352)
977—

Cash flows from investing activities:
Purchase of fixed assets
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from sales of investments in subsidiaries
Purchase of investments in subsidiaries resulting in change inscope of consolidation
Proceeds from sales of investments in subsidiaries resulting inchange in scope of consolidation
Other cash flows from investing activities
Net cash used in investing activities(88,270)(142,142)—(2,557)(134,319)

3,014
1,863
(171,234)

Cash flows from financing activities:
Increase (decrease) in financial liabilities
Purchase of treasury stock
Cash dividends paid
Other cash flows from financing activities
Net cash provided by (used in) financing activities

63,893(13)(12,808)(8,069)43,002

83,831(11)(11,170)(5,559)67,09085

Reference: CONSOLIDATED STATEMENTS OF CASH FLOWS (Summary)Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents resulting from change
in scope of consolidation
Cash and cash equivalents at end of year86

For the year ended
December 31, 2012

Million yen
For the year ended
December 31, 2011

207
18,182
16,137819
5,187
10,813—34,320136
16,137

FINANCIAL STATEMENTS
NON-CONSOLIDATED BALANCE SHEETS
As of
December 31, 2012

Million yen
As ofDecember 31, 2011
(Reference)

ASSETS
Current assets:
Cash and deposits
Short-term loans receivable
Prepaid expenses
Deferred tax assets
Income taxes receivable
Other current assets
Allowance for doubtful accounts
Total current assets

21,113372,836
1,044
198
11,633
13,964(1,040)419,751

3,637
43,445
782
193
1,458
15,129(389)
64,257

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

14,143
327
163
1
665
15,037438
108
30,886

14,677
349
177
1
664
15,034532
305
31,743

Intangible fixed assets:
Rights to use of facilities
Trademark rights
SoftwareLease assets
Other intangible fixed assets
Total intangible fixed assets

40
15,7168,646
81
024,48441
16,6846,020
21
022,76787

NON-CONSOLIDATED BALANCE SHEETS

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

88

As of
December 31, 2012

Million yen
As ofDecember 31, 2011
(Reference)

36,358463,950
7,388
4,727
14,612
1,184(274)
527,946
583,317
1,003,068

32,394
902,820
7,309
4,877
21,338
1,337(1,931)
968,145
1,022,656
1,086,914

NON-CONSOLIDATED BALANCE SHEETS

As of
December 31, 2012

Million yen
As ofDecember 31, 2011
(Reference)

LIABILITIESCurrent liabilities:
Short-term borrowings
Bonds due within one year
Lease obligations
Other accounts payable
Accrued expenses
Deposits received
Commercial paper
Allowance for employees’ bonuses
Allowance for directors’ and corporate auditors’ bonuses
Other current liabilities
Total current liabilities

157,550
—
256
491
3,678
14,93468,000117
112
149
245,290

121,400
25,000
284
1,080
2,714
191,187
28,000130101
217370,116Long-term liabilities:
Bonds
Long-term borrowings
Lease obligations
Other long-term liabilities
Total long-term liabilities
Total liabilities

188,121
21,200290
100
209,712455,002160,133
35,200299
100
195,732
565,848

LIABILITIES AND NET ASSETS

89

NON-CONSOLIDATED BALANCE SHEETSNET ASSETS
Shareholders’ equity:
Capital stock
Capital surplus
Capital reserve
Other capital surplus
Retained earnings
Other retained earnings
Reserve for reduction in entry of fixed assets
General reserve
Retained earnings carried forward
Treasury stock
Total shareholders’ equity
Valuation and translation adjustments:
Valuation difference on available-for-sale securities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

90

As of
December 31, 2012

Million yen
As ofDecember 31, 2011
(Reference)

182,531
159,658
130,292
29,366
233,105
233,105
195,000
38,105(27,763)547,532

182,531
159,805130,292
29,513
209,705
209,705
185,000
24,705(28,295)
523,747

533
533
548,065
1,003,068(2,681)(2,681)
521,065
1,086,914

NON-CONSOLIDATED STATEMENTS OF INCOME

Million yen
For the year ended
December 31, 2012

For the year ended
December 31, 2011
(Reference)

Net sales
Operating revenue
Operating income of the Group
Rent income from real estate
Dividends from subsidiaries and affiliates
Total operating revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating expenses
Operating income
Non-operating income:Interest and dividend income
Gain on valuation of derivatives
Reversal of allowance for doubtful accounts
Other non-operating income
Non-operating expenses:
Interest expenses
Other non-operating expenses
Recurring profit
Extraordinary gains:
Gain on sales of fixed assets
Gain on sales of investment securities
Gain on sales of shares in affiliates
Gain on liquidation of subsidiaries and affiliates
Reversal of allowance for doubtful accounts
Extraordinary losses:
Loss on sales and disposal of fixed assets
Loss on devaluation of investment securities
Loss on sales of shares in affiliates
Loss on devaluation of shares in affiliates
Loss on devaluation of equity participation in affiliates
Loss on liquidation of subsidiaries and affiliates
Earthquake related expenses
Extra retirement payments
Loss on adjustment for changes of accounting standard for
asset retirement obligations
Income before income taxes
Income taxes－current
Income taxes－deferred
Net income

91

70,16924,822
1,535
43,81070,169———22,64847,521
3,352
2,120
—
999
233
3,957
2,358
1,598
46,917
20,528—149
18,1372,241—
25,684308
755
17,739
4,764
2,115
0
—
—

400,141
12,523
11,191
726
605
412,665
278,948
121,192
90,363
11,87831,474
20,17915,817
3,281
—
1,079
5,092
2,445
2,647
46,562
1,746
0
—
257
39
1,449
15,485
1,078
1,587
63
433
—
596
9,833
1,637

—
41,761
589
4,963
36,208254
32,823
3,708
7,273
21,841—NON-CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFor the year ended December 31, 2012

Million yen
Shareholders' equity
Capital surplus

Capital stock

Balance as of Jan. 1, 2012

182,531

Retained earnings
Other retained earnings

Capital reserve

Other capitalsurplus

Total capitalsurplusGeneral reserve

130,292

29,513

159,805

185,000

Total
Retained earnings
retained earnings
carried forward
24,705

209,705

Dividends(12,808)(12,808)

Net income (loss)

36,20836,20810,000(10,000)—

Changes during the term

Acquisition of treasury
stock
Disposal of treasury stock

(147)

(147)

Provision of generalreserve
Other changes in nonshareholders' equity items
during the term (net)Total changes during the
term

—

—

(147)

(147)

10,00013,39923,399Balance as of Dec. 31, 2012

182,531130,292

29,366

159,658

195,000

38,105

233,105

Valuation and translation
adjustments

Shareholders' equity

Balance as of Jan. 1, 2012

Treasury stock

Total shareholders' equity

Valuation difference on
available-for-sale securities(28,295)

523,747(2,681)

Total net assets

521,065

Changes during the term
Dividends(12,808)(12,808)

Net income (loss)

36,20836,208Acquisition of treasury
stock

(13)

(13)

(13)

Disposal of treasury stock

545

398

398

—

—

Provision of generalreserve
Other changes in nonshareholders' equity items
during the term (net)

3,214

3,214

Total changes during the
term

532

23,784

3,214

26,999Balance as of Dec. 31, 2012(27,763)547,532533

548,06592

NOTES TO THE NON-CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies(1) Valuation basis and method for securities
Shares in subsidiaries and affiliates:
Stated at cost based on the moving-average method.
Other securities
Securities with market value:
Carried at the average market value for the month immediately preceding the balance
sheet date (related valuation differences are directly charged or credited to net assets,
and the cost of securities sold is 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
Supplies are stated at cost determined by the moving-average method (write-downs to net
selling value regarded as decreased profitability).
(4) Depreciation methods for fixed assets
A. Tangible fixed assets (excluding lease assets):
Tangible fixed assets are mainly depreciated using the straight-line method.
The estimated useful lives of the assets are based on the same standards as thosespecified in the Corporation Tax Act.
B. Intangible fixed assets (excluding lease assets):
Intangible fixed assets are amortized using the straight-line method.
The estimated useful lives of the assets are based on the same standards as thosespecified in the Corporation Tax Act.
Software for internal use is amortized by the straight-line method over a useful life of
five (5) years. Trademark rights are mainly amortized over twenty (20) years using thestraight-line method.

93

C. Lease assets:
Finance leases that do not transfer ownership rights are amortized to a residual value ofzero using the straight-line method, with the lease period as the estimated useful life.
Of the finance leases that do not transfer ownership rights, those that began before
December 31, 2008 are treated similarly as those applied to regular operating leases.
(5) Accounting criteria for allowances
Allowance for doubtful accounts:
The allowance for doubtful accounts consists of the individually estimated uncollectible
amounts with respect to certain identified doubtful receivables and the amounts
calculated using the rate of actual collection losses with respect to the other receivables.
Allowance for employees’ bonuses:
An allowance for employees’ bonuses is provided at the estimated amount applicable tothe fiscal year under review.
Allowance for Directors’ and Corporate Auditors’ bonuses:
An allowance for Directors’ and Corporate Auditors’ bonuses is provided at theestimated amount applicable to the fiscal year under review.
(6) Hedging accounting method
A. Hedging accounting method
The Company defers gains or losses on its hedges.
For foreign exchange contracts, the Company allocates differences in the values of hedging
instruments when such hedges meet all requirements for such allocations. For interest rate
swaps, the Company applies exceptional treatment when the swap in question meets theconditions for application of such exceptional treatment.
B. Hedging instruments and hedged items
Hedging instruments: Foreign exchange contracts and interest rate swaps
Hedged items:

Loans receivable in foreign currencies and interest on borrowings

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. It is theCompany’s policy not to engage in speculative transactions that deviate from real demand orin 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 values of hedging instruments or94

when it accounts for the value of swaps under exceptional treatment, these determinations
allow it to forgo evaluation of the effectiveness of hedges in these cases.
(7) Treatment of consumption taxes
Consumption taxes are excluded from the statements of income, except in the case of nondeductible consumption taxes related to fixed assets that are charged when incurred.

(Additional Information)
Application of Accounting Standard for Accounting Changes and Error Corrections, etc.
The Company has applied “Accounting Standards for Accounting Changes and Error
Corrections” (ASBJ Statement No. 24, published December 4, 2009) and “Guidance on
Accounting Standard for Accounting Changes and Error Corrections” (ASBJ Guidance
No. 24, published December 4, 2009) to the accounting changes and error corrections
made on or after January 1, 2012.

95

2. Notes to the Non-Consolidated Balance Sheets(1) Accumulated depreciation on tangible fixed assets¥29,216 million(2) Contingent liabilities
A. Guarantees, etc., against bank borrowings
Guarantees:¥14,250 million

B. Guarantees, etc., against derivatives
Guarantees:
Contract amount, etc.:¥10,861 million

Unrealized gains (losses):¥(122) million(3) Monetary claims and obligations with affiliates
Short-term monetary claims on affiliates:¥378,246 million

Long-term monetary claims on affiliates:¥4,727 million

Short-term monetary obligations to affiliates:¥13,747 million

3. Notes to the Non-Consolidated Statements of Income
Transactions with affiliates
Operating revenue:¥70,064 million

Operating expenses:¥922 million

Transactions other than operating transactions:¥3,934 million

4. Notes to the Non-Consolidated Statements of Changes in Net Assets
Treasury stock
Type of stock

No. of shares as ofJan. 1, 2012

Increaseduringthe year

Decreaseduringthe yearNo. of shares as ofDec. 31, 2012

Common stock

17,950,000

7,673

346,189

17,611,484(Reasons for change)
The increase in the number of shares was the result of the following:
Increase resulting from purchases of Less-than-One-Unit Shares from shareholders
upon request:

7,673 shares

The decrease in the number of shares was the result of the following:
Decrease resulting from sales of Less-than-One-Unit Shares to shareholders uponrequest:89 shares
Decrease resulting from exercise of stock options:
346,100 shares96

5. Tax effect accounting(1) Deferred tax assets and liabilities
Deferred tax assets
Shares in affiliates due to restructuring:
Allowance for doubtful accounts, in excess of tax-deductible amount:
Allowance for employees’ bonuses, non-tax deductible:
Loss on devaluation of investment in subsidiaries, non-tax deductible:
Loss on devaluation of investment securities, non-tax deductible:
Loss on devaluation of capital contributions for subsidiaries,
non-tax deductible:
Deferred loss on transfer of business between consolidated corporations:
Others:Subtotal deferred tax assets:
Valuation allowance:
Total deferred tax assets¥19,278 million¥356 million¥44 million¥9,777 million¥869 million¥5,260 million¥987 million¥252 million¥36,827 million¥(15,898) million¥20,928 million

Deferred tax liabilities
Deferred gain on transfer of business between consolidated corporations:
Valuation difference on available-for-sale securities:¥(5,826) million¥(291) million

Total deferred tax liabilities¥(6,117) million

Net deferred tax assets:¥14,811 million(2) Effective tax rates before and after application of tax effect accounting
Statutory effective tax rates:

40.4%

Adjustments
Permanent difference (non-deductible), including entertainment expenses:

1.4%

Valuation allowance:(7.2)%

Permanent difference (non-taxable), including dividend income:(59.3)%

Difference due to change in tax rates:(2.9)%

Gain (loss) on transfer of shares of subsidiaries between consolidated corporations:41.8%

Tax credit:(0.5)%

Others:(0.5)%

Effective tax rates after application of tax effect accounting:

13.3%

97

6. Related party transactions
Subsidiaries and affiliates
Million yen

TypeCompany

Subsidiary

Subsidiary

Subsidiary
Subsidiary

Subsidiary

Asahi
Breweries,
Ltd.

Asahi Soft
DrinksCo., Ltd.
WakodoCo., Ltd.
AI Beverage
Holdings
Co., Ltd.
Asahi
Holdings(Australia)
Pty. Limited

Percentage
of votingrights, etc.
held

100% directownership

100% directownership

100% directownership
100% directownership
100% directownership

Relationship withrelated party

Interlocking of
directors/corporate
auditors

Interlocking of
directors/corporate
auditors
Interlocking of
directors/corporate
auditors
Interlocking of
directors/corporate
auditors
Interlocking of
directors/corporate
auditors

Description of transaction

Transaction
amountBalance as ofDec. 31, 2012

Account item

Operating revenue (Note1)

55,768

Loaning funds (Note 2)

297,351

Deposits received (Note 3)
Transfer of shares of anaffiliate (Note 4)
Operating revenue (Note1)(178,388)

Short-term loans
receivable—

46,894

—

—

8,657

—

—

Loaning funds (Note 2)

27,883

Short-term loans
receivable

Transfer of shares of anaffiliate (Note 5)

19,945——

Transfer of shares of anaffiliate (Note 5)

9,999

—

—

Loaning funds (Note 2)(1,880)

Short-term loans
receivable

Guarantees for liabilities(Note 6)

10,327———297,351—

27,88324,453—

Terms and conditions of transaction and policy on determination thereof
Note 1. Operating revenue is determined in accordance with certain reasonable standards inorder to provide supervision, guidance, etc., regarding business management.
Note 2. The interest rate for the loans receivable is reasonably determined, taking the market
interest rate into consideration.
Note 3. The interest rate for the deposits received is reasonably determined, taking the market
interest rate into consideration.
Note 4. For consistency in capital ties and corporate governance within the Group, theCompany sold alcoholic beverage business subsidiaries to Asahi Breweries, Ltd. The
price and other terms and conditions of the transaction were calculated or determined,taking the market conditions into consideration.
Note 5. Shares of affiliates were assigned to accommodate the acquisition of treasury sharesby the respective companies in order to improve capital efficiency within the Group.
The price and other terms and conditions of the transaction were calculated ordetermined, taking the market conditions into consideration.
Note 6. The Company guaranteed a bank loans in the amount of A$115 million.
7. Notes related to leased fixed assets
Separately from the fixed assets carried on the balance sheets, some software packages aretreated based on finance lease agreements that do not transfer ownership rights.
(1) As of the end of the fiscal year under review
Amount equivalent to acquisition costs:¥25 million(2) As of the end of the fiscal year under review
Amount equivalent to accumulated depreciation and amortization:¥19 million(3) As of the end of the fiscal year under review
Amount equivalent to prepaid lease rents:98¥6 million

8. Per share information(1) Net assets per share¥1,176.17(2) Net income per share¥77.72

9. Other notes
Figures in amounts of less than one million yen are omitted.

99

AUDIT REPORT
Accounting audit report on consolidated financial statements

Independent Auditor’s ReportFebruary 7, 2013
The Board of Directors
ASAHI GROUP HOLDINGS, LTD.

KPMG AZSA LLC
Hiroyuki Sakai (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hirotaka Tanaka (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Yukihiko Ishiguro (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the consolidated financial statements, comprising the consolidated balance sheet, theconsolidated statement of income, the consolidated statement of changes in net assets and the related
notes of ASAHI GROUP HOLDINGS, LTD. as at December 31, 2012 and for the year from January 1,
2012 to December 31, 2012 in accordance with Article 444-4 of the Companies Act.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audit as
independent auditor. We conducted our audit in accordance with auditing standards generally acceptedin Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on our judgement, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due tofraud or error. In making those risk assessments, we consider internal control relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, while the objective of the financial statement audit is
not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit100also includes evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position and the results of operations of ASAHI GROUP HOLDINGS, LTD. andits consolidated subsidiaries for the period, for which the consolidated financial statements wereprepared, in accordance with accounting principles generally accepted in Japan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to
the provisions of the Certified Public Accountants Law of Japan.

Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report
as required by the Companies Act.

101

Accounting audit report on non-consolidated financial statements
Independent Auditor’s ReportFebruary 7, 2013
The Board of Directors
ASAHI GROUP HOLDINGS, LTD.

KPMG AZSA LLC
Hiroyuki Sakai (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hirotaka Tanaka (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Yukihiko Ishiguro (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the financial statements, comprising the balance sheet, the statement of income, thestatement of changes in net assets and the related notes, and the supplementary schedules of ASAHIGROUP HOLDINGS, LTD. as at December 31, 2012 and for the year from January 1, 2012 to December
31, 2012 in accordance with Article 436-2-1 of the Companies Act.
Management’s Responsibility for the Financial Statements and Others
Management is responsible for the preparation and fair presentation of the financial statements and the
supplementary schedules in accordance with accounting principles generally accepted in Japan, and forsuch internal control as management determines is necessary to enable the preparation of financial
statements and the supplementary schedules that are free from material misstatements, whether due tofraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial statements and the supplementary schedules
based on our audit as independent auditor. We conducted our audit in accordance with auditing
standards generally accepted in Japan. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements and the supplementary schedules arefree from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements and the supplementary schedules. The procedures selected depend on ourjudgement, including the assessment of the risks of material misstatement of the financial statements andthe supplementary schedules, whether due to fraud or error. In making those risk assessments, weconsider internal control relevant to the entity’s preparation and fair presentation of the financial
statements and the supplementary schedules in order to design audit procedures that are appropriate in thecircumstances, while the objective of the financial statement audit is not for the purpose of expressing an
102

opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements and the
supplementary schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
OpinionIn our opinion, the financial statements and the supplementary schedules referred to above present fairly,
in all material respects, the financial position and the results of operations of ASAHI GROUPHOLDINGS, LTD. for the period, for which the financial statements and the supplementary schedules
were prepared, in accordance with accounting principles generally accepted in Japan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to
the provisions of the Certified Public Accountants Law of Japan.

Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report
as required by the Companies Act.

103

REPORT OF THE BOARD OF AUDITORSThe Board of Auditors has prepared the following report based on the audit reports prepared byindividual Corporate Auditors related to the Directors’ execution of their duties during the 89th fiscal year,
the period from January 1, 2012 to December 31, 2012, after due discussions and consultations among the
Corporate Auditors.

1. Methods used in audits by the individual Corporate Auditors and by the Board ofAuditors and content of audits(1) The Board of Auditors determined the audit policies and division of duties, and received reports fromeach Corporate Auditor regarding the status and results of the audits, as well as reports from the
Directors and Independent Auditor on the execution of their duties, and requested explanations of
those reports when necessary.
(2) Each Corporate Auditor sought to achieve mutual understanding with the Directors, sections incharge of internal audit and other employees, and strove to collect information and create an audit
environment in accordance with the audit policies and division of duties based on the audit standards
established by the Board of Auditors. The Corporate Auditors also attended meetings of the Board of
Directors and other important meetings, received reports from Directors and other employees
regarding the execution of their duties and requested explanations when necessary, reviewed
documents related to important decisions, and inspected the operations and property of the head
office and other locations. With respect to “systems to ensure appropriate execution of Directors’
duties in conformity with laws and regulations and the articles of incorporation, and other systems toensure appropriate business operations (internal control systems)” (Item 6, Paragraph 4, Article 362of the Companies Act and Paragraph 1 and 3, Article 100 of the Ordinance for Enforcement of theCompanies Act) that is included in the Business Report, the Board received reports regularly from
Directors and other employees regarding the status of the establishment and implementation of thesystems, sought additional explanations as necessary and expressed opinions thereon. As regards“basic policy concerning the persons who control decisions on the Company’s financial and business
policies” (Item 3, Article 118 of the Ordinance for Enforcement of the Companies Act) included in
the Business Report, based on discussions with the Board of Directors and other parties. With respect
to subsidiaries, the Corporate Auditors took steps to facilitate communications with the Directors andCorporate Auditors of subsidiaries and, when necessary, received reports from subsidiaries on thestatus of their businesses. Using the foregoing methods, the Corporate Auditors reviewed theBusiness Report and the supplementary schedules thereto for the fiscal year under review.
(3) The Board of Auditors oversaw and verified that the Independent Auditor maintained its
independence and carried out appropriate audits, moreover, and received reports from the
Independent Auditor regarding the execution of its duties and requested explanations when necessary.
The Board also received notifications from the Independent Auditor to the effect that “a system forthe maintenance of appropriate execution of duties” (included in Article 131 of the Corporate
Calculation Regulations) in accordance with the “standards for quality control of audits” (BusinessAccounting Council; October 28, 2005), and requested explanations when necessary. Based on theabove activities, the Board of Auditors examined the financial statements (Balance Sheets, Statementsof Income, Statements of Changes in Net Assets, and notes to the financial statements),
supplementary schedules, and the consolidated financial statements (Consolidated Balance Sheets,
104

Consolidated Statements of Income, Consolidated Statements of Changes in Net Assets, and notes tothe financial statements) for the business year under review.

2. Results of the Audit(1) Results of audit of the Business Report







In our opinion, the Business Report and the supplementary schedules thereto present thesituation of the Company fairly, 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 the execution of their duties by the Directors.
In our opinion, the content of the resolution by the Board of Directors regarding internal control
systems is appropriate, and, furthermore, content of the Business Report regarding the internal
control systems and the execution by the Directors have been appropriate.
In our opinion, the Company’s basic policy concerning the persons who control decisions on the
Company’s financial and business policies in the Business Report is appropriate. We
acknowledge that the measures implemented to achieve this basic policy are consistent with thebasic policy, will not harm the common interest of the Company’s shareholders, and serve thepurpose of maintaining the positions of the Company’s Directors and Corporate Auditors.

(2) Results of the audit of financial statements and the supplementary schedules thereto
In our opinion, the auditing methods used by KPMG AZSA LLC, the Independent Auditor, and theresults of its audit are appropriate.
(3) Results of the audit of consolidated financial statements
In our opinion, the auditing methods used by KPMG AZSA LLC, the Independent Auditor, and theresults of its audit are appropriate.

February 8, 2013
Board of Auditors
Asahi Group Holdings, Ltd.
Yoshihiro Tonozuka (Seal)
Standing Corporate Auditor
Yukio Kakegai (Seal)
Standing Corporate Auditor
Takahide Sakurai (Seal)
Outside Corporate Auditor

Naoto Nakamura (Seal)
Outside Corporate Auditor
Tadashi Ishizaki (Seal)
Outside Corporate Auditor

105