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

The 100th Annual General Meeting of Shareholders
Matters subject to measures for electronic provision
excluded in the delivery of paper-based documents

TABLE OF CONTENTSSYSTEMS TO ENSURE APPROPRIATE EXECUTION OF DIRECTORS’
DUTIES IN CONFORMITY WITH LAWS AND REGULATIONS AND THE
ARTICLES OF INCORPORATION, AND OTHER SYSTEMS TO ENSURE
APPROPRIATE BUSINESS OPERATIONS

1BASIC POLICY CONCERNING THE PERSONS WHO CONTROLDECISIONS ON THE COMPANY’S FINANCIAL AND BUSINESS POLICY

8

THE CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED STATEMENT OF CHANGES IN EQUITYNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

10
12

THE NON-CONSOLIDATED FINANCIAL STATEMENTS
NON-CONSOLIDATED BALANCE SHEETNON-CONSOLIDATED STATEMENT OF INCOME
NON-CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSNOTES TO THE NON-CONSOLIDATED FINANCIAL STATEMENTS
Independent accounting auditor’s report on non-consolidated
financial statements[Reference] Criteria for independence of Outside Directors andOutside Audit & Supervisory Board Members

31
33
34
35
43
47

The above items are not provided in the documents delivered toshareholders who have requested the delivery of paper-based
documents, in accordance with the provisions of relevant laws andregulations and Article 15 of the Company’s Articles of Incorporation.

ASAHI GROUP HOLDINGS, LTD.

I

SYSTEMS TO ENSURE APPROPRIATE EXECUTION OF
DIRECTORS’ DUTIES IN CONFORMITY WITH LAWSAND
REGULATIONSAND
THEARTICLESOFINCORPORATION, AND OTHER SYSTEMS TO ENSURE
APPROPRIATE BUSINESS OPERATIONS

Overview of the resolution regarding systems to ensure
appropriate business operations
The Board of Directors passed the following resolution with respect to the abovementioned systems.
To “deliver on our great taste promise and bring more fun to life” as stipulated inits group philosophy, the “Asahi Group Philosophy,” the Company shall:•establish, in accordance with the Companies Act and the Regulation for
Enforcement of the Companies Act, the following basic policies (the “Basic
Policies”) to improve systems designed to ensure the appropriate executionof Directors’ duties in conformity with laws and regulations and the Articles ofIncorporation of the Company and its subsidiaries (herein this section the“Group Companies”) and ensure the appropriate business operations of theGroup Companies (herein this section the “Internal Control System”);•

recognize that it is the Representative Director(s) who shall assume theultimate responsibility for the improvement of the Internal Control System inaccordance with this resolution and demand the Representative Director(s) tocause the officers in charge, through the respective organizations they are in
charge of, to develop and fully enforce individual internal regulations that will
be applied to the Company and the entire Asahi Group and are required basedon the Basic Policies; and•take steps to maintain and enhance the effectiveness of the Internal Control
System by reviewing the Basic Policies and relevant internal regulations thatwill be applied to the Company or the entire Asahi Group in a timely andappropriate manner in accordance with changes in conditions andcircumstances.

(1) System to ensure execution of duties by Directors and employeesof the Company and the Group Companies in conformity with laws
and regulations and the Articles of Incorporation of the Company
and the Group Companies
1)

2)

3)

4)

In order to promote “Building value together with all our stakeholders” asstipulated in the “Asahi Group Philosophy,” the Company shall establish“The Asahi Group Code of Conduct” and ensure its Directors, Audit &Supervisory Board Members and employees abide by these regulations.
The Company shall establish a “Compliance Committee” to oversee
compliance of the Asahi Group based on “The Asahi Group
Ethics/Compliance Policies.”
An officer of the Company in charge shall have authority over compliancewithin the Asahi Group. The organization in charge of legal affairs shallhandle compliance tasks.
The Company shall assign responsible persons in charge of compliance in
the Company and the Group Companies. The responsible person shall make
1

5)

6)

7)

8)

efforts to prioritize compliance in all aspects of business activities at eachGroup Company.
The Company shall establish a “Clean Line System” and other systems for
employees in Japan and overseas, enabling them to blow the whistle on
illicit behavior of others.
The Company shall establish “Asahi Global Procurement Regulations”
addressing mutual cooperation for fair and equitable deals and social
responsibilities between each Group Company and suppliers and a systemthat enables suppliers to blow a whistle on breaches of the Policy asnecessary. The Company shall inform and spell out these measures to its
suppliers to enable the Company to develop an Internal Control System incooperation with its suppliers.
To ensure antisocial forces do not exert any undue influence on the Group,
all relevant information shall be shared within the Asahi Group and theCompany shall establish an internal system on the measures. The Company
shall also cooperate closely with industry bodies, local communities, thepolice and other external specialist organizations in this field.
The operational details of the aforementioned agencies and systems shallbe spelled out under a separately prepared set of internal regulations thatwill be applied to the Company or the entire Asahi Group.

(2) System to ensure the preservation and management of information
related to execution of duties by Directors
1)

2)

3)

Information related to execution of duties by Directors shall be properly
preserved and managed in accordance with “Document-Management
Policies” and other related internal regulations that will be applied to theCompany or the entire Asahi Group.
The aforementioned information shall be preserved and managed in a way
accessible by Directors and Audit & Supervisory Board Members forinspection at any time.
Control over the clerical tasks related to preservation and management of
the aforementioned information shall be determined in accordance withinternal regulations that will be applied to the Company or the entire Asahi
Group.

(3) Regulations and other organizational structures of the Asahi Groupto manage risk of loss
1)

2)

3)

4)

The Company shall position risk management as a core element of its
corporate management in “The Asahi Group Risk Management Policies,” andimplement it in a continuous manner.
In addition to having the appropriate organizations manage risk in theirrespective areas, the Company shall establish a “Risk Management
Committee” to identify and evaluate cross-sectional material risk for theentire Asahi Group, and design countermeasures accordingly.
With regard to the risk of failing to maintain product quality, as a food anddrink manufacturing group, the Asahi Group strongly recognizes their social
responsibility to consumers to ensure the safety and security of theirproducts and shall establish sufficient control systems.
In the event of any major accident, disaster, scandal, etc., the Company
shall establish an “Emergencies Response Headquarters” chaired by the
President and Representative Director.
2

(4) System to ensure efficient execution of duties by Directors of theCompany and the Group Companies
1)

2)

3)

4)

5)

To ensure efficient performance of duties by Directors, the Board of
Directors shall divide duties in a reasonable way to be delegated torespective Directors.
The Company shall establish “Delegation of Authority” and “The Asahi
Group’s Delegation of Authority” stipulating rules of delegation of power andfor a mutual checks-and-balances mechanism among organizations andamong Group Companies.
The Company shall ensure the effective utilization of the “Corporate
Strategy Board,” consisting of the Company’s internal Directors andStanding Audit & Supervisory Board Members by such means as formulating
the Asahi Group’s corporate strategy and implementing progress
management.
To maximize operational efficiency, the Company shall utilize indices thatprovide an objective and rational way of measuring its management andcontrol of operations; and it shall employ a unified system of follow-up andevaluation.
To use funds efficiently, a global cash management system among theCompany and the Group Companies is introduced.

(5) System to ensure appropriate operations of the Asahi Group
1)

2)

3)

4)

All systems required for the Internal Control, including those for risk
management, compliance and crisis management system, shall apply
comprehensively across the entire Asahi Group. As the holding company,
the Company shall manage the said systems of the Group Companies while
respecting their autonomy, and supporting the development and operationof the Internal Control System, in accordance with the conditions andcircumstances with which individual companies are facing.
While cooperating with the internal auditing organs established within the
Asahi Group, the organization in charge of internal auditing in the Company
shall get a grasp of and evaluate the Internal Control System and disciplinein day-to-day tasks within the Asahi Group by directly and indirectly
auditing the Group Companies, and this section shall also conduct theevaluation of internal control related to financial reporting of the Group
Companies and submit the relevant reports.
Decision-making authority related to business activities of the Group
Companies shall be subject to the document entitled “Asahi Group’s
Delegation of Authority.”
Each of the Group Companies will provide reports at the “Corporate
Strategy Board” one or more times each quarter on performance of its
operations including risk-related information.

(6) Securement of employees in the event that Audit & Supervisory
Board Members request staff to assist in their auditing duties
The “Audit & Supervisory Board” shall appoint staff to serve the Audit &Supervisory Board, for assistance in the activities of the Audit & Supervisory
Board Members.

3(7) Independence of employees assigned to assist the Audit &Supervisory Board Members from the Directors and ensuring theeffectiveness of instructions given to relevant staff
1)

2)

When a member of the staff who serves the Audit & Supervisory Board, as
stipulated in the previous paragraph, receives an order from an Audit &Supervisory Board Member in relation to auditing duties, he/she shall not
be subject to directives or orders from Directors or other employees
regarding that order.
Any issuance of orders to, personnel transfers of, merit evaluations of, or
reprimands of a member of the staff who serves the Audit & Supervisory
Board shall require the prior concurrence of Audit & Supervisory Board
Members.

(8) System for Directors’ and employees’ reporting to Audit &Supervisory Board Members
1)

2)

3)

Directors and employees shall report regularly to Audit & Supervisory Board
Members on matters related to the Internal Control System, and shall reporton an as-needed basis when a significant event occurs. When necessary,
the Audit & Supervisory Board Members shall be entitled to request reports
from the Directors and employees (including from Directors and employeesof the Group Companies).
Directors shall ensure that Audit & Supervisory Board Members have every
opportunity to participate in discussions of important bodies, etc. such as
the Board of Directors meetings, the “Corporate Strategy Board” meetings,
the “Risk Management Committee” meetings, and the “Compliance
Committee” meetings. Directors shall provide details of the agenda itemsof such meetings beforehand for Audit & Supervisory Board Members.
Audit & Supervisory Board Members shall at all times have the right toreview documents such as the minutes of important meetings and the
documents of approval.

(9) System for reporting, by the Group Companies’ Directors, Corporate
Auditors, employees or persons receiving reports, to the Company’s
Audit & Supervisory Board Members
1)

2)

3)

4)

The Group Companies’ Directors, Corporate Auditors, employees or persons
receiving reports from them shall report regularly to the Company’s Audit& Supervisory Board Members on matters related to the Internal Control
System and, shall report on an as-needed basis when a significant event
occurs. When necessary, the Audit & Supervisory Board Members shall beentitled to request reports from the Directors and employees of the Group
Companies.
The Company’s or the Group Companies’ organizations in charge of internal
auditing shall report the results of the Group Companies’ internal audits to
the Audit & Supervisory Board Member of the Company without delay.
The whistle blowing channels under the Clean Line System shall include thatfor reporting to the Company’s Audit & Supervisory Board Members, andthe information reported to other whistle blowing channels shall be reported
to the Company’s Audit & Supervisory Board Members.
The Company prohibits any party from treating the whistle blower
prescribed in the preceding item and this item in any mannerdisadvantageous to him/her on the ground of the whistle blow.
4

(10) Policy on procedures for advance or reimburse expenses incurredin association with Audit & Supervisory Board Members’ executionof their duties, and treatment of other expenses or debts incurredin association with the execution of their duties
To defray expenses incurred in association with the Audit & Supervisory
Board Members’ execution of their duties, the Company shall secure acertain specific amount of budget and shall, in response to the request of
the Audit & Supervisory Board or the Standing Audit & Supervisory Board
Members concerned, advance or reimburse expenses or otherwise treat
debts incurred in association with the Audit & Supervisory Board Members’
execution of their duties.
(11) Other systems ensuring effective auditing by Audit & Supervisory
Board Members
To ensure the effectiveness of auditing activities, Directors shall ensure
opportunities for Audit & Supervisory Board Members to exchange
information and opinions regularly with members of the organization in
charge of internal auditing of the Company and with the Independent
Accounting Auditor.

5

Overview of operation of systems to ensure appropriate
business operations(1) Overall Internal Control System
1)2)

In order to develop and operate the Internal Control Systems of theCompany and the Group Companies and effectively achieve the objectivesof internal control, the organization of the Company in charge of internal
auditing cooperates with the internal auditing organs established within the
Asahi Group in conducting audits to determine whether business operations
are executed properly and efficiently in accordance with annual audit plans.
With respect to internal control over financial reporting, the organization of
the Company in charge of evaluation of internal control cooperates with theorgans in charge of evaluation of internal control established within the
Asahi Group and performs evaluations of the Group Companies’ internal
control activities based on the “Policies of Management Assessment andReporting of Internal Controls over Financial Reporting.”(2) Compliance System
1)
2)

3)

4)

The Company established “The Asahi Group Code of Conduct,” and tries
hard to keep its employees informed about it.
The Company promotes awareness of compliance by putting managers
responsible for compliance in place in the Company and the Group
Companies and conducting education by job class.
The Company conducts multifaceted and multilayered surveys ofcompliance awareness and behavior by conducting a “Compliance Survey”
to the employees of the Company and the Group Companies.
By keeping in place the “Clean Line System,” the Company detects andresolves risk problems early, and effectively prevents risk problems
themselves from occurring.

(3) Risk Management System
1)
2)

3)

The Risk Management System adopts enterprise risk management (ERM)for the overall Asahi Group.
The respective companies of the Asahi Group identify and evaluate criticalrisks that could impede achievement of business objectives across all risk
categories such as strategy and operations. They also draw up action plans
and continually implement and monitor such plans. The respective
companies of the Asahi Group report details of such initiatives to theCompany’s Risk Management Committee, which monitors such initiatives,
while its members identify and evaluate critical risk across the Group, draw
up action plans, and execute and monitor such plans. They also report to
the Board of Directors with the aim of ascertaining effectiveness of suchinitiatives.
The Company has a risk management system in place to deal with any
major accident, disaster, scandal, etc. by setting up an “Emergency
Response Headquarters” under the management of the President andRepresentative Director.
In managing normal risks, the Company prepares for possible crises byusing a “risk scenario approach” to identify risks that require immediate
responses when the risks materialize and forecast the degree of impact and6the necessary responses. In addition, the Company has established asystem globally that predetermines the initial response system, response
subjects, and information line necessary in the event of the occurrence of acrisis and allows us to mobilize the crisis management smoothly, swiftly
without interruption, and appropriately in the event of an actual crisis.
In addition, in the event of a disasters that affects business continuity, theCompany has established a business continuity plan (BCP) and has
established a system that enables us to quickly restore business.
(4) Business Management of Group Companies
1)

With respect to the Group Companies’ business management, the Company
has put in place a system whereby, pursuant to the “Asahi Group’s
Delegation of Authority,” the Group Companies’ business executions are
subject to resolutions of the Company’s Board of Directors or decisions ofan individual Director or the responsible persons of the responsibleorganizations of the Company, depending on the degree of their importance.

2)

Once a month, the “Corporate Strategy Board” receives reports from main
Group Companies on the status of their business executions.

(5) Execution of Directors’ Duties
In order to ascertain the efficiency of Directors’ duties, the Board of
Directors conducts rational assignment sharing of services to be performed
by Directors, and has each Director report on the status of his/her businessexecution once every 3 months.
(6) Execution of Audit & Supervisory Board Members’ Duties
1)

2)

3)

Audit & Supervisory Board Members attend meetings of the Board of
Directors, the “Corporate Strategy Board,” the “Risk Management
Committee,” the “Compliance Committee” and other important organs, andreceive reports from Directors, employees, thereby confirming the status ofdevelopment and operation of the Internal Control System.
Audit & Supervisory Board Members work to enhance the effectiveness ofauditing by finding opportunities regularly or as needed for exchanging
information and views with the organization in charge of internal auditing,the Independent Accounting Auditor, etc. During fiscal 2023, Audit &Supervisory Board Members had opportunities to exchange information andviews with the organization in charge of internal auditing for a total of 11
times, with the Independent Accounting Auditor for a total of 20 times. Audit& Supervisory Board Members also find opportunities to exchange
information and views with Audit & Supervisory Board Members of the main
Group Companies once a month in principle.
The Company ensures that Audit & Supervisory Board Members and the
Audit & Supervisory Board will be able to smoothly perform their duties by
posting 4 dedicated staff members to the Audit & Supervisory Board.

7

II

BASIC POLICY CONCERNING THE PERSONS WHO
CONTROL DECISIONS ON THE COMPANY’S FINANCIAL
AND BUSINESS POLICY(1) Basic policy
According to the Company’s view, the persons who control decisions on its
financial and business policy must properly grasp various mattersconcerning its business, including the initiatives to “create appealing
products,” to “care about quality and craftsmanship” and to “convey theinspiration to customers,” which form the source of the corporate value ofthe Asahi Group, and other tangible and intangible management resources
thereof, potential effects of forward-looking measures and other items that
constitute the corporate value, and must enable the Company to maintainand increase the Asahi 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 notalways in a position to automatically object to the purchases even if it is a
so-called hostile takeover, which is pursued without approval from the Boardof Directors, provided that such takeover contributes to the increase of thecorporate value and the common interests of shareholders 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 atransfer 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
share purchases that would not contribute to the increase of the corporate
value and the common interests of shareholders of a company, includingones that would, in light of their purposes, etc., cause obvious damage tothe corporate value and the common interests of shareholders or could
effectively coerce shareholders to sell their shares, ones that the purchaser
does not provide information and/or time reasonably necessary for thetarget company’s board of directors and shareholders to review andexamine details of the proposed purchase or for the target company’s boardof directors to make an alternative proposal, and ones where the target
company’s board of directors would have to conduct negotiation with thepurchaser so as to seek more favorable terms than those initially proposedby 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 Asahi Group’s
corporate value and have the capability to maintain and enhance it in themedium- and long-term; otherwise, the Asahi Group’s corporate value andthe common interests of shareholders would be damaged.
The Company thus believes that it is necessary to protect the Asahi Group’s
corporate value, and in turn, the common interests of shareholders, fromsuch large-scale share purchases.
(2) Framework that contributes to realization of the basic policy
1)

Special Measures Contributing to Realization of the Basic Policy
The Company established a group philosophy, the “Asahi Group Philosophy,”which articulates the Group’s mission and vision for the future, reaffirms
values cherished and handed down over the years, and serves as a code of8

2)conduct for our stakeholders and the Group’s commitments to them. At thesame time, the Company established a “Medium- to Long-Term
Management Policy” for the realization of the “Asahi Group Philosophy” andput group-wide efforts based on them.
The Company believes that it will be able to assure the flexibility of its
corporate strategy by setting and carrying out such management policy andwill be able to increase its sustained corporate value and ultimately securecommon interests of its shareholders by setting such a policy as“Engagement Agenda” (agenda for constructive dialogs) and making dialogs
with the stakeholders even more firm, and is striving to further strengthen
its corporate governance.
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
The Company will take appropriate measures against any person who
attempts to make a large-scale purchase in accordance with the Financial
Instruments and Exchange Act, the Companies Act and other related laws
and regulations such as requesting provision of necessary and sufficient
information for shareholders to properly determine whether to approve ordisapprove the large-scale purchase, disclosing the opinions, etc. of theBoard of Directors of the Company and endeavoring to secure enough time
for shareholders to contemplate the large-scale purchase.

(3) Judgment of the Company’s Board of Directors regarding thespecific measures and reasons therefor
The measures described above in 1) of (2) conform to the basic policy of
the Company as described above (1), are fully compatible with thecorporate value and the common interests of shareholders of the Asahi
Group including the Company, and are never implemented for the purposeof maintaining the status of Directors and Audit & Supervisory Board
Members of the Company.

9

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended December 31, 2023

(million yen)

Equity attributable to owners of parent
Other components of equity

Issued capital

Balance at
beginning ofcurrent period

220,044

CapitalsurplusRetainedearnings

161,793

1,165,542

Changes in fairvalue offinancial
Remeasureinstruments
ments ofmeasured atdefinedfair value
benefit plans
through othercomprehensive
incomeTreasuryshares(1,178)35,667–

13,37010,626

13,37010,62648(10,626)

Comprehensive
incomeProfit164,073

Other
comprehensive
incomeTotal
comprehensive
income––164,073–

Transfer to nonfinancial assets
Transactions
with owners
Dividends(57,762)

Purchase oftreasury shares(25)

Disposal oftreasury shares

013Changesthroughbusiness
combination
Share-based
paymenttransaction

74

Transfer fromothercomponents ofequity toretainedearnings

10,578Other increase(decrease)
Total
contributions byowners anddistribution toowners–74(47,183)(12)

48(10,626)

Total
transactions
with owners–

74(47,183)(12)

48(10,626)

220,044

161,867

1,282,432(1,190)49,086–

Balance at endof current
period10

Equity attributable to owners of parent
Other components of equity
Cash flow
hedgesBalance at
beginning ofcurrent period

2,577

Costs ofhedging(478)

Translationdifferences
on foreign
operations
476,765

Total
equityTotal otherattributablecompoto owners
nents ofof parent
equityNoncontrollinginterests

Total
equity514,532

2,060,734

2,210

2,062,945–

164,073

1,957

166,031

Comprehensive
incomeProfitOther
comprehensive
income(1,600)53

271,742

294,192

294,192281

294,473

Total
comprehensive
income(1,600)53

271,742

294,192458,266

2,238

460,504

Transfer to nonfinancial assets

(752)

(752)

(752)

–

(752)

Dividends–(57,762)(16)(57,779)

Purchase oftreasury shares

–

(25)

(25)

Disposal oftreasury shares

–

13

13

Changesthroughbusiness
combination––

Share-based
paymenttransaction

–

74

74

Transfer fromothercomponents ofequity toretainedearnings(10,578)––

Other increase(decrease)

–

–

0

0

Transactions
with owners

800

800

Total
contributions byowners anddistribution toowners–––(10,578)(57,700)

784(56,916)

Total
transactions
with owners

–

–

–

(10,578)(57,700)

784(56,916)

224

(425)

748,508

797,3932,460,548

5,233

2,465,781

Balance at endof current
period11

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Material Matters Supporting the Basis for Preparation of Consolidated
Financial Statements(1) Basis of consolidated financial statements
The Company and subsidiaries of the Company (hereinafter collectively
referred to as the “Group”) have prepared their consolidated financial
statements in accordance with International Financial Reporting Standards(hereinafter referred to as “IFRS”), pursuant to the provisions of Article 120-1of the Regulation on Corporate Accounting. The latter part of the Article 120-1
prescribes some omissions of disclosure items required under IFRS.
(2) Scope of Consolidation
Number of consolidated subsidiaries: 199
The Company’s principal consolidated subsidiaries are listed under “VI
Other Status of the Asahi Group, 4. Status of Major Establishments andPrincipal Subsidiaries” of the Business Report.
Note that during the fiscal year, the number of companies included in thescope of consolidation decreased by nine companies. This was the result of
the addition of three companies that were newly established, the removalof three companies due to changes in the parent company with the joint
share transfer, and the removal of nine companies due to liquidation.
(3) The equity method
Number of companies accounted for using the equity method: 32
Principal affiliates accounted for using the equity method were Dynamic
Vending Network, Inc, Asahi Business Solutions Corp., Shenzhen Tsingtao
Beer Asahi Co., Ltd. and Asahi Beer Communications, Ltd.
(4) Accounting policies
1) Financial assets(i) Initial recognition and measurement
The Group recognizes financial assets when it becomes a party to thecontract. Financial assets purchased or sold in a regular way are recognizedon the transaction date. Financial assets are subsequently classified as
financial assets measured at amortized cost or financial assets measured atfair value.
Financial assets measured at fair value through profit or loss are initiallyrecognized at fair value. Financial assets measured at fair value throughother comprehensive income and financial assets measured at amortizedcost are initially recognized at fair value plus transaction costs that are
directly attributable to the acquisition. However, trade receivables that do
not contain a significant financing component are initially recognized at thetransaction price.
a. Financial assets measured at amortized cost
Financial assets are classified as financial assets measured at amortizedcost only when the requirements that the objective of the Group’sbusiness model is to hold assets in order to collect the contractual cash
flows and that the contractual terms of the financial assets give rise on
12

specific dates to cash flows that are solely payments of principal andinterest on the principal amount outstanding are both met.
b. Financial assets measured at fair value
Financial assets that do not satisfy either of the 2 requirements above
are classified as financial assets measured at fair value.
With regard to financial assets measured at fair value, the Groupdecides to irrevocably designate each financial instrument as measured
at fair value through other comprehensive income, except for equity
instruments held for trading, which must be measured at fair value
through profit or loss. Equity instruments that are not designated aremeasured at fair value through profit and loss.
Information on derivatives is provided in “11) Derivatives and hedge
accounting.”(ii) Subsequent measurement
Financial assets are subsequently measured based on the classification of
the asset as follows:a. Financial assets measured at amortized cost
These financial assets are measured at amortized cost using theeffective interest method.
b. Financial assets measured at fair value
These financial assets are measured at fair value at the end of the fiscal
year.
Changes in fair value of such financial assets are recognized in profit orloss or other comprehensive income, depending on their classification.
Dividend income arising from equity instruments designated asmeasured at fair value through other comprehensive income isrecognized in profit or loss. If the fair value decreases significantly or
the equity instrument is disposed of, the accumulated othercomprehensive income is transferred to retained earnings.
(iii) Derecognition
Financial assets are derecognized when the contractual rights to receive
cash flows from the financial assets expire or are transferred in a transactionin which substantially all the risks and rewards of ownership of the financial
assets are transferred to another entity.
(iv) Impairment of financial assets
The Group estimates expected credit losses at the end of each fiscal year
for recoverability of financial assets measured at amortized cost.
For financial instruments of which the credit risk has not increased
significantly after initial recognition, expected credit losses within the next
12 months are recognized as loss allowance. For financial instruments ofwhich the credit risk has increased significantly after initial recognition,
lifetime expected credit losses are recognized as loss allowance. However,for trade receivables, loss allowance is always measured based on lifetime
expected credit losses.
For financial assets with significantly increased credit risk that have
objective evidence of impairment, interest income is measured bymultiplying the net carrying amount of the financial asset, less loss
allowances, by effective interest rate.
13

If all or part of a financial asset cannot be recovered, or is judged to be
extremely unlikely to be recovered, it is deemed to be in default.
In determining whether any objective evidence of impairment exists, theGroup uses the following requirements:● Significant financial difficulties of the issuer or the borrower;● A breach of contract, such as default or past due event in interest or
principal payments;● The lender(s) of the borrower, for economic or contractual reasons
relating to the borrower’s financial difficulty, having granted to theborrower a concession(s) that the lender(s) would not otherwise
consider;● It is becoming probable that the borrower will enter bankruptcy or otherfinancial reorganization; or● The disappearance of an active market for that financial asset becauseof financial difficulties.
The Group directly reduces the gross carrying amount of a financial asset
when there is no reasonable expectation of recovering the financial asset inits entirety or a portion thereof. Subsequent changes in loss allowance arerecognized as impairment gains or impairment losses in profit and loss.
2) Inventories
Inventories are measured at the lower of cost and net realizable value. The
cost is calculated mainly using the weighted-average method for merchandise,finished goods and semi-finished goods, and mainly using the movingaverage method for raw materials and supplies. The cost of merchandise,finished goods and semi-finished goods consists of raw material costs, direct
labor costs, other direct costs and related production overhead costs (basedon the normal production capacity). Net realizable value is determined at theestimated selling price in the ordinary course of business less the relevant
estimated selling expenses.
3) Property, plant and equipment
Buildings and structures, machinery and vehicles, tools, furniture and fixtures,and land mainly consist of production and processing equipment and facilities
for the head office. Property, plant and equipment are recognized at cost, andcarried at cost less accumulated depreciation and accumulated impairment
losses. The cost includes the purchase price, the costs directly related toacquisition of the asset, costs for asset dismantlement and removal and site
restoration, and borrowing costs that are required to be capitalized.
Concerning expenditure after acquisition, in cases when it is highly probablethat future economic benefit relating to the item will flow to the Group, andthe item has a cost that can be measured reliably, such costs are recognizedeither together in the carrying amount of the asset, or when deemed
appropriate, as a separate asset. The carrying amounts of parts that are
replaced are derecognized. Other repair and maintenance costs arerecognized in profit or loss in the accounting period in which the cost wasincurred.
Land is not depreciated. The amount of depreciation of other assets is
calculated by allocating the cost of each asset less the residual value using
the straight-line method over the following major estimated useful lives:
Buildings and structures
3 to 50 years
14Machinery and vehicles
2 to 15 years
Tools, furniture and
2 to 20 years
fixtures
Residual values, useful lives and depreciation methods of property, plant andequipment are reviewed at the end of each fiscal year, and revised where
necessary.
Gains or losses on disposal are computed by comparing the carrying amountwith the proceeds from disposal, and then recognized in profit or loss.
4) Goodwill and intangible assets(i) Goodwill
Goodwill is tested for impairment annually, and the carrying amount is thecost less accumulated impairment losses. Impairment losses of goodwill are
not reversed. Gain or loss on sales of business operations includes carrying
amount of goodwill related to the business operation.
Goodwill is allocated to cash-generating units or groups of cash-generating
units that are expected to benefit from the business combination.
(ii) Trademarks
Separately acquired trademarks are recognized at cost. Trademarks
acquired through business combinations are recognized at fair value as of
the acquisition date. Trademarks, for which a certain useful life isdetermined, except for those with indefinite useful lives, are recorded atcost less accumulated amortization and accumulated impairment losses.
The amount of amortization is calculated by allocating the cost of
trademarks using the straight-line method mainly over the estimated usefullife of 20 to 40 years.
(iii) Software
Software is carried at cost less accumulated amortization and accumulated
impairment losses.
Development costs directly related to design and testing of the Group’s
proprietary software are recognized as intangible assets only when they are
reliably measurable, they are technically feasible, it is highly probable togenerate future economic benefits, and the Group has an intention andadequate resources to complete the development and use the assets.
Other development costs that do not satisfy these requirements arerecognized as expenses as incurred. Development costs previously
recognized as expenses are not recognized as assets in subsequent fiscal
years.
Software is amortized mainly using the straight-line method over theestimated useful life of 5 years.
Expenses related to maintenance of software are recognized as expenses
as incurred.
(iv) Other intangible assets
Other intangible assets are initially recognized at cost. The costs ofintangible assets acquired through a business combination and recognizedseparately from goodwill are measured at fair value at the acquisition date.
Other intangible assets, for which a certain useful life is determined, arecarried at the cost less accumulated amortization and accumulated
impairment losses. However, some intangible assets (such as leasehold
15interests in land) are determined to have indefinite useful lives and are notamortized, because they exist fundamentally as long as the business
continues. The amount of amortization is calculated by allocating the costof each other intangible asset using the straight-line method over theestimated useful life.
Residual values, useful lives and amortization methods of intangible assets
are reviewed at the end of each fiscal year, and revised where necessary.
5) Leases(i) Leases as Lessee
The Group recognizes the right-of-use asset and the lease liability at thecommencement date of the lease. The right-of-use asset is initiallymeasured at cost. The cost of the right-of-use asset is measured using theamount of the initial measurement of the lease liability adjusted for any
lease payments made at or before the commencement date, plus any initial
direct costs incurred and an estimate of costs to dismantle and remove theunderlying asset or to restore the underlying asset or the site on which it islocated, less any lease incentives received. In its consolidated statement offinancial position, the Group presents right-of-use assets in “Property, plantand equipment” and “Intangible assets,” and lease liabilities in “Other
financial liabilities.”
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the earlier of the end of the usefullife of the right-of-use asset or the end of the lease term. The estimateduseful lives of the right-of-use assets are determined on the same basis as
those of the equivalent property, plant and equipment. In addition, theright-of-use asset is reduced by impairment losses, if any, and adjusted forcertain remeasurements of the lease liability.
Lease liabilities are initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using
the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. Generally, the Group
uses its incremental borrowing rate as the discount rate.
The Group applies the recognition exemption on short-term leases andleases for which the underlying asset is of low value.
(ii) Leases as Lessor
For leases where the Group is the lessor, it determines whether each leaseis a finance lease or an operating lease at contract inception.
When classifying each lease, the Group makes an overall assessment of
whether the lease transfers substantially all the risks and rewards ofownership of the underlying asset. The lease is classified as a finance leasein cases where the risks and rewards are transferred and as an operatinglease in cases where they are not transferred. As part of this assessment,
the Group considers certain indicators, such as whether the lease period
covers the major part of the economic useful life of the underlying asset.
When the Group is an intermediate lessor, it accounts for its interests in thehead lease and the sublease separately. It assesses the subleaseclassification by reference to the right-of-use asset arising from the headlease, not by reference to the underlying asset. If the head lease is a shortterm lease to which the Group applies the exemption described above, thenit classifies the sublease as an operating lease. In its consolidated statement16

of financial position, the Group presents finance leases of the lessor
pertaining to the sublease under “trade and other receivables” and “othernon-current assets.”
6) Impairment of non-financial assets
Goodwill and intangible assets with indefinite useful lives are not subject toamortization and are tested for impairment annually. Other non-financial
assets are examined for impairment if there is an indication that the carrying
amount may not be recovered due to occurrence of an event or change in thecircumstances. When the carrying amount of an asset exceeds its recoverable
amount, an impairment loss is recognized at the excess amount. The
recoverable amount is the higher of its fair value less costs of disposal of theasset and value in use. To assess impairment, an asset is grouped at thesmallest unit which generates separately identifiable cash flows (cashgenerating unit). Non-financial assets for which impairment losses arerecognized, excluding goodwill, are reassessed at the end of each fiscal year
for the possibility that the impairment losses may be reversed.
7) Provisions
The Group recognizes provisions when it has a present legal or constructive
obligation as a result of past events, it is probable that an outflow of resources
will be required to settle the obligation, and the amount can be reliably
estimated.
Where there are a number of similar obligations, the probability that an
outflow of resources will be required in settlement is determined taking into
account the similar obligations as a whole. Provisions are recognized even if
the likelihood of the outflow is low for 1 item in the similar obligations.
Provisions are measured as the present value of expenditures expected to berequired to settle the obligation, using the pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specificto the obligation. An increase in provisions due to passage of time isrecognized as interest expense.
8) Employee benefits(i) Post-employment benefits
The Group companies have various pension plans. The Group has adopted
defined benefit plans, and certain consolidated subsidiaries haveestablished a retirement benefit trust. In addition to these plans, certain
consolidated subsidiaries have introduced defined contribution plans andretirement benefit prepayment plans.
Defined benefit plans are post-employment benefit plans other than defined
contribution plans. Defined contribution plans are post-employment benefit
plans in which the employer pays fixed contributions to other separate
entities and has no legal or constructive obligations to make further
contributions.
In defined benefit plans, the present value of defined benefit obligations is
calculated separately for each plan by estimating the amount of future
benefits that employees have earned in exchange for their service renderedin the prior fiscal years and this fiscal year and discounting that amount.
The Group recognizes the amount calculated by deducting fair value of plan17

assets from the present value of defined benefit obligations as net defined
benefit liability (asset).
Defined benefit obligations are calculated using the projected unit credit
method. The discount rates are determined based on market yields of highquality corporate bonds at the end of the fiscal year that correspond to thediscount period, which is set on the basis of a period up to the estimateddate of benefit payment for each future year.
Contributions to the plans are determined based on periodic actuarial
calculation and are usually paid to the funds managed by insurancecompanies or trust companies.
In case that the Group has a surplus in the defined benefit plans as a resultof calculation, the net defined benefit asset is measured to the extent of thepresent value of economic benefits available in the form of a future refund
from the plan or a reduction in future contributions to the plan. In
calculating the present value of economic benefits, the Group takes into
account minimum funding requirements applicable to its plan. Economic
benefits shall be available to the Group, if the economic benefits can berealized during the life of the plan or at the time when the pension liabilities
are settled.
The Group recognizes remeasurements of the net defined benefit liability(asset) arising from the defined benefit plans in other comprehensive
income and immediately reclassifies them to retained earnings.
Contributions to the defined contribution plan are recognized as employee
benefits expense in profit or loss in the period during which employees
render their service.
(ii) Short-term employee benefits
Short-term employee benefits are measured on an undiscounted basis andrecognized as expenses when the related service is rendered. Bonuses arerecognized as a liability at the amount estimated to be paid under the plans,
when the Group has present legal or constructive obligations to pay as aresult of past service rendered by employees, and the amount of obligations
can be reliably estimated.
9) Revenue
The Group recognizes revenue based on the following 5 step approach.
Step 1: Identify the contract with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in thecontract
Step 5: Recognize revenue when the entity satisfies a performanceobligation
For sales of goods, as the customer obtains control over the goods upondelivery, the performance obligation is determined to have been satisfied andrevenue is therefore recognized upon delivery of the goods. Revenue ismeasured using the net amount after eliminating goods returned, rebates anddiscounts.
Because the period from satisfaction of the performance obligation to receipt
of consideration is usually within 1 year or less, the Group uses the practical18

expedient and does not adjust the promised amount of consideration for theeffects of a significant financing component for such receivables.
The Group’s view is that the Group is acting as a principal if it controls
promised goods before transferring them to a customer and it recognizes
revenue in the gross amount of consideration to which it expects to be entitledin exchange for the specified goods to be transferred.
10) Foreign currency translation(i) Functional currency and presentation currency
Items included in financial statements of each company of the Group aremeasured using the currency of the primary economic environment in which
the company operates (hereinafter referred to as the “functional currency”).
The consolidated financial statements are presented in Japanese Yen, whichis the presentation currency of the Group.
(ii) Transactions and balances
Foreign currency transactions are translated into functional currencies using
the exchange rate at the date of the transactions. Foreign exchange
differences arising from settlement of transactions and those arising fromthe translation of monetary assets and liabilities denominated in foreign
currencies using the exchange rate at the end of the fiscal year are
recognized in profit or loss. However, exchange differences arising fromfinancial assets measured through other comprehensive income, qualifying
cash flow hedges and hedges of net investments in foreign operations arerecognized in other comprehensive income.
(iii) Foreign operations
Operating results and financial position of all the foreign operations using afunctional currency that is not the presentation currency are translated into
the presentation currency in the ways described below. Among the foreign
operations, there is no company that uses a currency of a hyperinflationary
economy.
a. Assets and liabilities are translated using the closing rate as of the endof the fiscal year.
b. Income and expenses are translated using the average rate (unless theaverage rate is not a reasonable approximation of the cumulative effectof the exchange rates prevailing on the transaction date, in which caseincome and expenses are translated using the rate on the transactiondate).
c. All resulting exchange differences are recognized in othercomprehensive income and accumulated in exchange differences on
foreign operations, which is other components of equity.
When a foreign operation is partially disposed of or sold, the exchange
differences recognized in other comprehensive income are recognized in
profit or loss as part of a gain or loss on the sale.
11) Derivatives and hedge accounting
Derivatives are initially recognized at fair value on the date when thederivative contract is concluded and subsequently remeasured at fair value atthe end of each fiscal year. The method of recognizing gains or losses arising19

as a result of the remeasurement depends on whether the derivative isdesignated as a hedging instrument, and if it was designated as a hedging
instrument, on the nature of the hedged item.
The Group designates certain derivatives as hedging instruments of cash flow
hedges (hedge of a particular risk associated with recognized assets or
liabilities, or highly probable forecast transactions) and certain borrowings
denominated in foreign currencies and bonds denominated in foreign
currencies as hedging instruments of net investments in foreign operations.
The Group documents the relationship between the hedging instrument andthe hedged item and the risk management objective and strategy forexercising the hedging transactions at the inception of the transaction. The
Group also documents its assessment, both at the inception and on an
ongoing basis, of whether the derivatives or non-derivative hedging
instruments used in hedging transactions are effective in offsetting changes
in cash flows of hedged items or foreign exchange fluctuations in net
investments in foreign operations.
The Group assesses the effectiveness of hedges on an ongoing basis, anddetermines that a hedge is effective when the requirement that there is an
economic relationship between the hedged item and the hedging instrument,
the requirement that the effect of credit risk does not significantly dominate
the value changes that result from the economic relationship, and therequirement that the hedge ratio of the hedging relationship is the same as
the ratio resulting from the quantities of the hedged item actually hedged andthe hedging instrument actually used are all satisfied.
The effective portion of changes in fair value of derivatives that are designatedas a hedging instrument of cash flow hedges and satisfy the requirements as
the hedging instrument is recognized in other comprehensive income. Gainsor losses on the ineffective portion are immediately recognized in profit orloss.
Accumulated gains or losses recognized through other comprehensive income
are transferred to profit or loss in the period during which cash flows arisingfrom the hedged item affect profit or loss. However, when a forecast
transaction as the hedged item results in the recognition of non-financial
assets (e.g. inventories or property, plant and equipment), gains or losses
previously deferred in other comprehensive income are transferred andincluded in the initial measurement of the cost of the assets. The deferred
amount is eventually recognized as cost of sales for inventories, and as
depreciation expense for property, plant and equipment.
Application of hedge accounting is discontinued prospectively when the hedge
no longer qualifies for hedge accounting due to expiry, sale of the hedging
instrument and other reasons. When the hedged future cash flows are still
expected to occur, accumulated gains or losses recognized in othercomprehensive income remain as accumulated other comprehensive income.
When a forecast transaction is no longer expected to occur and in other cases,
accumulated gains or losses recognized in other comprehensive income are
immediately transferred to profit or loss.
With regard to derivatives or non-derivative hedging instruments, including
borrowings, held for hedging foreign exchange risk in net investments inforeign operations, the portion of foreign exchange differences deemed
effective as a hedge is recognized in other comprehensive income as hedging
of net investments in foreign operations. Of exchange differences forderivatives or non-derivative hedging instruments, the portion deemed20

ineffective as a hedge and not subject to the assessment of hedging
effectiveness is recognized in profit or loss.
Accumulated gains or losses recognized in other comprehensive income
through net investment hedges are transferred to profit or loss upon disposalof foreign operations.
12) Application of group tax sharing system
The Company and its wholly owned subsidiaries in Japan have applied thegroup tax sharing system.
(5) Changes in accounting policies(IAS 12 “Income Taxes”)
International Tax Reform—Pillar Two Model Rules
The “International Tax Reform—Pillar Two Model Rules (Amendments to
IAS 12)” issued on May 23, 2023 provides a temporary mandatory
exception for the recognition and disclosure of deferred taxes relating totaxes arising from the tax system associated with the Pillar Two Model
Rules.
The Group applies the exception retrospectively upon the announcementof the amendments to IAS 12 in accordance with IAS 8 “Accounting Policies,
Changes in Accounting Estimates and Errors.”
The adoption of the amendments to IAS 12 does not have a material impact
on the Group’s consolidated financial statements.
Deferred Tax related to Assets and Liabilities arising from a Single
Transaction
The Group has adopted the amendments to IAS 12 “Income Taxes”(Clarifying accounting treatment for deferred taxes related to assets andliabilities arising from a single transaction) from the beginning of this fiscal
year.
The adoption of the amendments to IAS 12 does not have a material impact
on the Group’s consolidated financial statements.
2. Notes on Accounting Estimates
The estimates and underlying assumptions are reviewed on an ongoing basis.
The effect of a change in accounting estimates is recognized in the accounting
period in which such change occurs as well as the accounting periods to beaffected in the future.
Items for which the amount was recorded based on accounting estimates in
the consolidated financial statements for this fiscal year and which may havea material impact on the consolidated financial statements for the following
fiscal year, are as follows.
(Impairment of non-financial assets)
Impairment test for goodwill and intangible assets with indefinite useful lives

21

In this fiscal year, significant items among goodwill and intangible assets withindefinite useful lives allocated to each cash-generating unit (group of cashgenerating unit) are as below.
(Oceania segment)
Goodwill allocated to the Oceania business is ¥1,358,310 million.
The recoverable amount is measured at fair value less costs of disposal andthe fair value hierarchy is classified into Level 3. The fair value less costs ofdisposal is calculated by discounting the future cash flows at 10.2%. Discountrate is determined with reference to the pre-tax weighted average cost ofcapital of cash-generating unit (group of cash-generating unit).
The future cash flows are based on business plans for 5 years or less thatreflect past experience and external information and have been approved by
the management. The growth rate after the period covered by the businessplans is 2.5%, which has been determined with reference to factors such as
inflation rates in the markets to which cash-generating unit (group of cashgenerating unit) belongs.
Whereas these estimates enlist key assumptions such as increases in future
revenue and growth rates subsequent to the period covered by the businessplans, these estimates are subject to significant effects associated with
substantial uncertainty and management judgment given that theassumptions are affected by changes in factors such as the businessconditions and competitive environment in Oceania.
The recoverable amount exceeds the carrying amount by ¥170,462 million inthis fiscal year. However, if the discount rate increases by 0.8%, the carrying
amount will exceed the recoverable amount.
(Europe segment)
Goodwill allocated to the Europe (Czech Republic and Slovakia) business is¥361,338 million.
The recoverable amount is measured at value in use. The value in use iscalculated by discounting the future cash flows at 6.7%. Discount rate isdetermined with reference to the pre-tax weighted average cost of capital of
cash-generating unit (group of cash-generating unit).
The future cash flows are based on business plans for 5 years or less thatreflect past experience and external information and have been approved by
the management. The growth rate after the period covered by the businessplans is 2.0%, which has been determined with reference to factors such as
inflation rates in the markets to which cash-generating unit (group of cashgenerating unit) belongs.
The recoverable amount exceeds the carrying amount by ¥243,827 million inthis fiscal year. However, if the discount rate increases by 1.5%, the carrying
amount will exceed the recoverable amount.
Goodwill allocated to the Europe (International) business is ¥113,145 million.
The recoverable amount is measured at value in use. The value in use iscalculated by discounting the future cash flows at 8.1%. Discount rate isdetermined with reference to the pre-tax weighted average cost of capital of
cash-generating unit (group of cash-generating unit).
22

The future cash flows are based on business plans for 5 years or less thatreflect past experience and external information and have been approved by
the management. The growth rate after the period covered by the businessplans is 2.0%, which has been determined with reference to factors such as
inflation rates in the markets to which cash-generating unit (group of cashgenerating unit) belongs.
Whereas these estimates enlist key assumptions such as increases in future
revenue and growth rates subsequent to the period covered by the businessplans, these estimates are subject to significant effects associated with
substantial uncertainty and management judgment given that theassumptions are affected by changes in factors such as the businessconditions and competitive environment in each region of export markets.
The recoverable amount exceeds the carrying amount by ¥20,930 million inthis fiscal year. However, if the discount rate increases by 0.6%, the carrying
amount will exceed the recoverable amount.
3. Notes to Consolidated Statement of Financial Position(1) Pledged assets and secured liabilities
The following assets are pledged as collateral for borrowings of ¥1,964 million.
Property, plant and equipment¥345 million

Cash and cash equivalents¥68 million(2) Accumulated depreciation on property, plant andequipment(3) Provisions directly deducted from assets
Trade and other receivables¥1,236,599 million¥11,399 million

Other financial assets¥626 million(4) Contingent liabilities
Guarantees¥2,825 million

4. Notes to Consolidated Statement of Changes in Equity(1) Total number of the issued shares as of the end of this fiscal year
Common stock
507,003,362 shares(2) Dividends during this fiscal year
1) It was resolved at the 99th Annual General Meeting of
Shareholders of March 28, 2023 as follows:
Dividends on common stock
Total amount of dividends:¥29,395 million

Dividend per share:¥58

Record date:

December 31, 2022

Effective date:

March 29, 2023

23

Total amount of dividends includes dividends of ¥7 million for shares of theCompany held by Custody Bank of Japan, Ltd. as the trust assets of a stockcompensation plan.
2) It was resolved at the Board of Directors Meeting of August 9,2023, as follows:
Dividends on common stock
Total amount of dividends:¥28,381 million

dividend per share:¥56

Record date:June 30, 2023

Effective date:
September 1, 2023
Total amount of dividends includes dividends of ¥7 million for shares of theCompany held by Custody Bank of Japan, Ltd. as the trust assets of a stockcompensation plan.
(3) Dividends after the end of this fiscal year
The following item will be placed on the agenda for approval at the 100th
Annual General Meeting of Shareholders scheduled for March 26, 2024.
Dividends on common stock
Source of dividends:

Retained earnings

Total amount of dividends:¥32,942 million

Dividend per share:¥65

Record date:

December 31, 2023

Effective date:
March 27, 2024
Total amount of dividends includes dividends of ¥8 million for shares of theCompany held by Custody Bank of Japan, Ltd. as the trust assets of a stockcompensation plan.
5. Notes on Financial Instruments(1) Status of financial instruments
1) Capital management
The Group’s purpose for capital management is to maintain its ability tocontinue as a going concern in order to provide returns to shareholders, grant
benefits to other stakeholders and maintain the most appropriate capital
structure for reducing capital cost.
In order to maintain or adjust the capital structure, the Group may adjust theamount of dividends paid to shareholders, redeem the capital to shareholders,issue new shares, or sell assets to reduce debts.
The Group monitors the capital based on the capital and liabilities ratio. Thisratio is calculated by dividing the amount of net liabilities by the capital. The
amount of net liabilities is calculated by deducting cash and cash equivalentsfrom interest-bearing debts. The capital shall be the “equity” presented in the
consolidated statement of financial position (equity attributable to owners ofparent).

24

2) Risk management
The Group’s activities are exposed to various financial risks such as market
risks (including foreign exchange risk, price risk and interest rate risk), credit
risks and liquidity risks. The Group’s risk management policy focuses on theunpredictability of financial markets and minimize the potentially adverse
impact on the Group’s financial performance. The Group uses derivativetransactions to hedge certain risk exposures.
The Company and its principal consolidated subsidiaries procure necessary
funds via loans from financial institutions and by issuing commercial papers
and bonds, while taking into account the balance between direct and indirect
financing or the balance between short- and long-term debt from theperspective of fund procurement cost and risk diversification in response tochanges in the business environment. To use funds efficiently in the entire
Group, the Company and its principal consolidated subsidiaries haveintroduced a cash management system to reduce consolidated interestbearing debt. If surplus funds are generated temporarily, the Company
invests it only in safe financial instruments.
The Group uses derivative transactions to the extent of the transaction
balances of foreign currency denominated assets and liabilities, bonds andborrowings and forecast transaction amounts as a means to mitigate foreignexchange risk, price risk of raw materials, energy and others, and interest
rate risk, as well as to reduce fund procurement costs.
When using derivative transactions, in principle, the Company trades only withfinancial institutions with high credit ratings.
At the Company, the Finance Section is in charge of executing and managing
derivative transactions, in accordance with internal rules. Contracts on each
derivative transaction are entered into after approval is received inaccordance with the Company’s authorization criteria. The Finance Section
reviews the status of derivative transactions including the content andbalances, and reports it to the Head of the Finance Section and the officer incharge of finance as needed.
The consolidated subsidiaries also enter into such agreements in accordancewith the Group’s authorization criteria, and the Company reviews their statusbased on reports submitted by them on a regular basis.
(i) Market risk
a. Foreign exchange risk
The Group conducts business activities internationally and is exposed
to foreign exchange risk mainly related to US dollar, Euro, Czech Koruna
and Australian dollar. Foreign exchange risk arises from forecast
transactions such as future purchase, sale, financing and repayment orassets and liabilities that have already been recognized.
The Group uses foreign exchange contracts and currency swaps tomitigate foreign exchange risk. Hedge accounting is applied to thetransactions that qualify for hedge accounting. When designating
hedging instruments, the Group classifies the currency basis spread of
currency swaps and the forward element of forward exchange contracts
as costs of hedging for accounting treatment, and records them as costsof hedging, which are an independent item of other components ofequity.
Although receivables, payables and others denominated in a foreign
currency have a risk of foreign exchange fluctuations, the impact islimited since the risk is offset with the exchange contracts.
25

b. Price risk
The Group is exposed to price risk of equity instruments since it holds
investments classified as the category measured at fair value in the
consolidated statement of financial position. To manage price risk
arising from investments in equity instruments, the Group regularly
keeps track of fair value, financial conditions of issuers and others, andalso reviews the overall holding status on an ongoing basis.
The Group has no equity instruments held for short-term trading anddoes not intend to actively trade these investments.
Furthermore, the Group is exposed to price risk from the prices of the
raw materials, energy, and others used in the production of its products
as they fluctuate according to the weather, natural disasters, theeconomic environment and other factors. To mitigate the risk of thesefluctuations in the prices of raw materials, energy, and others, theGroup mainly engages in commodity swap transactions and virtual
power purchase agreements (“VPPA”). Although commodity swap
transactions used by the Group have risks of fluctuations in market
prices of commodities, price risk is limited because these risks are offset
with risks of fluctuations in market prices of commodities in association
with trade payables of those commodities that the Group has. Although
VPPA has risks of fluctuations in market prices of electricity, price risk
is limited because these risks are offset with risks of fluctuations inmarket prices of electricity used in the production of products.
c. Interest rate risk
The Group raises funds with variable interest rates and is exposed tointerest rate risk. Interest rate risk mainly arises from non-current
borrowings.
The Group uses interest rate swaps, which substantially fix interest
rates, to mitigate interest rate risk. Hedge accounting is applied to thetransactions that qualify for hedge accounting.
(ii) Credit risk
The Group is exposed to credit risks for trade receivables (notes andaccounts receivable-trade), other receivables (accounts receivable-other)and other financial assets (operating loans and others).
In accordance with the accounting regulations, the Group regularly monitors
the status of major business partners for trade receivables and operatingloans and routinely checks the management status of deadlines andbalances for each business partner. The Group also monitors creditimpaired financial assets and their collection status.
When executing derivative transactions, in principle, the Group trades onlywith financial institutions with high credit ratings to mitigate credit risk.
The Group classifies receivables based on credit risk profile to calculate loss
allowance.
For trade receivables, loss allowance is always recognized at the amountequal to lifetime expected credit losses. For receivables other than tradereceivables, loss allowance is recognized at the amount equal to 12-month
expected credit losses, in principle. However, in cases such as overdue,
because the credit risk is considered to have significantly increased fromthe initial recognition, loss allowance is recognized at the amount equal tolifetime expected credit losses.
The amount of loss allowance is calculated as follows:26● Trade receivables
The simplified approach is applied. The Group categorizes receivables
according to credit risk profile of the counterparty and calculates loss
allowance by multiplying the receivables by the provision rate, which isdetermined by adding projection of future economic conditions andothers to the historical rate of credit losses calculated according to thecategory.
● Receivables other than trade receivables
The general approach is applied. Loss allowance for receivables forwhich the credit risk is not considered to have significantly increased is
calculated by multiplying the carrying amount by the provision rate,
which is determined by adding projection of future economic conditions
and others to the historical rate of credit losses for similar assets. For
assets for which the credit risk is considered to have significantly
increased and credit-impaired financial assets, loss allowance iscalculated as difference between the amount of the present value,
which is computed by discounting estimated future cash flows using theoriginal effective interest rate of the asset, and the carrying amount.
(iii) Liquidity risk
The Group raises funds via loans and by issuing commercial papers andbonds, and is exposed to liquidity risk, which means there is a possibility
the Group fails to make payment on the due date due to deterioration in
the fund procurement environment.
Since the Company and its principal consolidated subsidiaries haveintroduced the cash management system, the Company manages liquidity
risks of those companies participating in this system.
Based on reports from each Group company, the Company creates its cash
management plan and updates the plan on a timely basis. The Group
monitors an ongoing forecast for fund demand, while always maintaining
sufficient margin in the unused portion of the contractual credit line andensuring that all loan agreements do not conflict with the borrowing limits
or covenants (if applicable). In these forecasts, the Group takes into
account its borrowing and financing plan, compliance with covenants,
adherence to internal target ratio for the statements of financial position as
well as applicable external regulatory and statutory requirements, such asa regulation of currency, if any.
Surplus that the Company and its principal consolidated subsidiaries hold inexcess of the balance necessary for management of working capital ismanaged at the Group level under the cash management system. The
Group chooses financial instruments with appropriate maturity and liquidity,
and makes investments in current deposits, time deposits, money market
deposits and marketable securities to ensure a sufficient margin determinedin the above forecast.
(2) Fair value of financial instruments
In fair value measurement, the Group uses observable market data wheneveravailable. The fair value measurement is categorized into any of the following
levels based on the level of the input:
Level 1: Input consisting of unadjusted quoted prices in active markets
for identical assets and liabilities

27

Level 2:

Input consisting of directly or indirectly observable prices
other than market prices used in level 1
Level 3: Input that is not based on observable market data
Reclassification between levels in the fair value hierarchy is recognized on thedate of the event or change in circumstances that caused the reclassification.
The carrying amounts and fair values of financial instruments not measured atfair value are as follows:
Carrying amountLong-term loans receivable
Long-term borrowings
Bonds(million yen)
Fair value

2,559

2,446

153,638

153,746

1,233,312

1,203,626

Each of the amounts in the above table includes the portion scheduled to becollected, repaid, or redeemed within 1 year.
Financial instruments for which the carrying amount is reasonably approximate
to the fair value, and lease liabilities, are not included in the table above.
The fair value of long-term loans receivable is calculated by discounting the
expected amount of principal and interest receivable by the interest rate
expected if a similar new loan were to be issued, thereby deriving the present
value.
The fair value of long-term borrowings is calculated by discounting the total
amount of principal and interest by the interest rate expected if a similar new
borrowing were to be taken out, thereby deriving the present value.
The fair value of bonds is set to market prices when market prices are available.
In the above fair value measurement, bonds are classified into Level 2, whileothers are classified into Level 3. For bonds in Level 2, fair value is estimatedusing the reference trading statistics of Japan Securities Dealers Associationand others. Fair value of financial instruments in Level 3 is measured bydiscounting contractual cash flows using the market interest rate, and thedifference with carrying amount is due to a difference between the market
interest rate and the contractual interest rate.
Financial assets and liabilities of the Group measured at fair value are as
follows:

28

(million yen)
Level 1
Financial assets
Derivatives designated as
hedging instruments
Derivatives not designated as
hedging instruments
Equity instruments

Level 3

Total–

17,1493,329

20,479

–

3,299

–

3,299

90,19852

34,446124,696

–

1,620

20

1,640

90,19822,122

37,796150,116

–

4,567

1,810

6,377

–

1,611

1,553

3,165

–

–

12,183

12,183–

6,178

15,547

21,726

OthersTotal financial assets

Level 2Financial liabilities
Derivatives designated as
hedging instruments
Derivatives not designated as
hedging instruments
Contingent consideration
Total financial liabilities

There were no material transfers between Levels 1 and 2 in the fair value
hierarchy during this fiscal year.
The fair value of financial instruments traded in active markets is the quoted
market prices at the end of the fiscal year. These financial instruments are
categorized into Level 1. In the Group, financial instruments categorized into
Level 1 comprise primarily equity instruments traded in active markets.
The fair value of financial instruments that are not traded in an active market(for example, interest rate swaps and foreign exchange contracts) isdetermined by using a valuation technique which maximizes the use ofobservable market input and minimizes the use of entity specific estimates asmuch as possible. Derivative financial instruments are primarily valued basedon the price indicated from financial institutions with which the Company does
business. If all significant inputs required for measuring the fair value of afinancial instrument are observable, the financial instrument is categorized into
Level 2.
If one or more of the significant inputs is not based on observable market data,
the financial instrument (for example, an equity instrument that is not tradedin an active market or VPPA) is categorized into Level 3. These financial
instruments are primarily valued with the comparable company analysis
method or the discounted cash flow method, using inputs that are reasonably
available and that many market participants consider reasonable. Contingent
consideration is calculated based on expected payment by taking into accountfuture business performance and others.
The principal unobservable input used in calculating the fair value of
instruments classified as Level 3 is the price book-value ratio in the comparable
company analysis method for equity instruments (ranging from 0.9 to 1.7
times) and the forecasted electricity purchase volumes in the discounted cash
flow method for VPPA (ranging from 66 to 512 GWh per agreement). The
estimated fair value of equity instruments increases (decreases) when the pricebook-value ratio increases (decreases). The estimated fair value of VPPA
generally increases (decreases), in the case that market price exceeds the priceinitially expected, when the forecasted electricity purchase volume increases(decreases).

29

The Group analyzes changes in fair value measurements (including Level 3)
based on factors such as inputs. The result of fair value measurements and thecalculation processes (including assessments of valuation performed by a third
party) as well as the results of analysis for the factors which caused thechanges in the fair value are reported to the officer in charge of finance, andafter reviewing the results, the officer reports to the Board of Directors asnecessary.
6. Notes on Revenue Recognition(1) Disaggregation of revenue
Relationship between disaggregation of revenue and segment revenue
The Group has broken down the reportable segments of “Japan,” “Europe,”“Oceania,” and “Southeast Asia,” into the categories of “Manufacture andsales of alcohol beverages,” “Manufacture and sales of soft drinks,”“Manufacture and sales of food and pharmaceuticals,” and “Others,”
depending on the type of goods and services.
The “Others” category includes operation of logistics, restaurants, andothers in “Japan.”(million yen)
Manufacture
Manufactureand sales ofand sales ofalcohol
soft drinks
beverages

Manufactureand sales offood andpharmaceuticals

OthersEliminationofintersegment
revenue

Total

Japan

800,178

374,899

122,673

65,098(9,656)

1,353,194Europe688,725–––(1,088)687,637

OceaniaSoutheast
Asia

492,229

159,925––(2,641)

649,513–57,806

–

–

(602)

57,204

Others14,945

2,582

–

4,013

–

21,542

1,996,079

595,214

122,673

69,112(13,988)2,769,091

Consolidated
Total(2) Transaction price allocated to the remaining performance obligations
Due to the fact that the Group does not have material transactions whose
expected contract duration exceed one year individually, the Group uses thepractical expedient, and has omitted information regarding remaining
performance obligations. In addition, among consideration arising fromcontracts with customers, there are no material amounts not included intransaction price.
7. Notes to per Share Information(1) Equity attributable to owners of parent per share(2) Basic earnings per share¥4,856.22¥323.82

8. Significant Subsequent Events
There are no significant subsequent events.
9. Other
The stated amounts are the figures after truncating fractions less than the
representative unit.
30

NON-CONSOLIDATED FINANCIAL STATEMENTS (Japanese GAAP)NON-CONSOLIDATED BALANCE SHEET(million yen)

As ofDecember 31,
2023

As of
December 31,
2022[Reference]

ASSETS
Current assets:
Cash and deposits
Short-term loans receivable
Prepaid expenses
Accounts receivable - other
Income taxes refund receivable
Other

10,10355,071
1,030
13,565–489

5,524
134,454550
22,6390127

Total current assets
Non-current assets:
Property, plant and equipment:
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Leased assets
Construction in progress

80,260163,297

14,905329
2
0607
15,03719
19

15,269357
40493
15,03728
0Total property, plant and equipment
Intangible assets:
Right to use facilities
Trademark right
SoftwareOther

30,921

31,191

27
5,077
976
2

27
6,045
1,116
3

Total intangible assets
Investments and other assets:
Investment securities
Shares of subsidiaries and associates
Investments in capital of subsidiaries
and associates
Deferred tax assets
Other
Allowance for doubtful accounts

6,083

7,191

8,425
2,692,570

6,656
2,689,543

4,519

4,519

44,737553(160)

33,166518(167)

2,750,646

2,734,237

2,787,651
2,867,911

2,772,620
2,935,917

Total investments and other assets
Total non-current assets
Total assets

31

NON-CONSOLIDATED BALANCE SHEET(million yen)

As ofDecember 31,
2023

As of
December 31,
2022[Reference]

LIABILITIESCurrent liabilities:
Short-term borrowings
Commercial papers
Current portion of bonds payable
Lease obligations
Accounts payable - otherAccrued expenses
Deposits received
Provision for bonuses
Provision for bonuses for directors(and other officers)
Other

44,42019,000321,398
10
2,859
12,172
221,744311

154,088
110,000
100,000
10
3,500
6,054
132,011
223

308

288

1,853

6,479

624,078

512,656

898,244108,98010
1,067

1,022,714
103,40020
1,090

Total non-current liabilities

1,008,303

1,127,225

Total liabilities
NET ASSETS
Shareholders’ equity:
Share capital
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Other retained earnings
General reserve
Retained earnings brought forward
Treasury shares

1,632,381

1,639,882

220,216
194,511
87,977
106,534
886,969
886,969
195,000
691,969(1,190)220,216
194,511
87,977
106,533
913,748913,748
195,000
718,748(1,178)

Total shareholders’ equity
Valuation and translation
adjustments:
Valuation difference on availablefor-sale securities
Deferred gains or losses on hedges

1,300,506

1,327,297

3,270

2,094

(68,246)(33,356)(64,976)(31,262)

1,235,530
2,867,911

1,296,035
2,935,917

Total current liabilities
Non-current liabilities:
Bonds payable
Long-term borrowings
Lease obligations
Other

Total valuation and translation
adjustments
Total net assets
Total liabilities and net assets
32

NON-CONSOLIDATED STATEMENT OF INCOME(million yen)

For the year
ended
December 31,
2023
Operating revenue
Operating income of the Group
Real estate lease revenue
Dividends from subsidiaries andassociates
Operating expenses
Operating profit
Non-operating income
Interest and dividend income
Foreign exchange gains
Reversal of allowance for doubtful
accounts
Other
Non-operating expenses
Interest expenses
Bond issuance costs
Provision of allowance for doubtful
accounts
Other
Ordinary profit
Extraordinary income
Gain on sale of investment securities
Other
Extraordinary losses
Loss on sale and retirement of noncurrent assets
Loss on sale of investment securities
Business restructuring expenses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Profit33

For the year
ended
December 31,
2022[Reference]

65,25833,443
1,894

172,189
30,326
1,829

29,920140,033

25,99639,262
5,799
3,656
2,062

22,225
149,963
5,697
583
1,150

–

3,757

80
13,813
12,002
634

205
7,189
6,683
268

5

–

1,170
31,248
141
141
–
71

237
148,471
75
11
63
1,291

71

147

–
–
31,318415(95)
30,9981,030
113
147,25442442
146,769

NON-CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSFor the year ended December 31, 2023

(million yen)
Shareholders’ equity

Capital surplus

Retained earnings
Other retained earnings

SharecapitalLegalcapitalsurplus

Othercapitalsurplus

Total capitalsurpluses

220,216

87,977

106,533

194,511

Generalreserve

Retainedearnings
brought
forwardTotal
retainedearnings

195,000

718,748913,748

Dividends(57,776)(57,776)

Profit30,99830,998

Balance at
beginning ofcurrent period
Changes of items
during period

Purchase oftreasury shares
Disposal oftreasury shares

00

Net changes of
items other thanshareholders’equityTotal changes of
items during
period

–

–

0

0

–

(26,778)(26,778)

Balance at end
220,216of current period

87,977

106,534

194,511

195,000

691,969

886,969

Shareholders’ equity
TreasurysharesBalance at
beginning ofcurrent period

Valuation and translation adjustments

Valuation
Total
difference onshareholders’available-forequity
sale securities(1,178) 1,327,297

2,094

Deferred
gains orlosses onhedges(33,356)

Total
valuation andtranslation
adjustments

Total net
assets(31,262) 1,296,035

Changes of items
during period
Dividends(57,776)(57,776)

Profit30,99830,998Purchase oftreasury shares

(25)

(25)

(25)

Disposal oftreasury shares

13

13

13

Net changes of
items other thanshareholders’equityTotal changes of
items during
periodBalance at endof current period

1,175(34,890)(33,714)(33,714)(26,791)

1,175(34,890)(33,714)(60,505)(1,190) 1,300,506

3,270(68,246)(64,976) 1,235,530

(12)

34

NOTES TO THE NON-CONSOLIDATED FINANCIAL STATEMENTS
1. Notes to Significant Accounting Policies(1) Valuation basis and method for securities
Shares in subsidiaries and affiliates:
Stated at cost based on the moving-average method
Available-for-sale securities
Other than shares that do not have a market valueMarket price method (related valuation differences are directly charged or
credited to net assets, and the cost of securities sold is computed by themoving-average method.)
Shares that do not have a market value
Stated at cost based on the moving-average method(2) Valuation basis and method for derivatives
Market price method(3) Depreciation methods for non-current assets
Property, plant and equipment (excluding leased assets):
Property, plant and equipment are depreciated using the straight-line
method.
The estimated useful lives of the assets are based on the same standards
as those specified in the Corporation Tax Act.
Intangible assets (excluding leased assets):
Intangible assets are amortized using the straight-line method.
The estimated useful lives of the assets are based on the same standards as
those specified in the Corporation Tax Act.
Software for internal use is amortized by the straight-line method over auseful life of 5 years. Trademark right is mainly amortized over 20 years
using the straight-line method.
Leased assets:
Finance leases that do not transfer ownership rights are amortized to aresidual value of zero using the straight-line method, with the lease period
as the estimated useful life.
(4) Accounting criteria for allowances
Allowance for doubtful accounts:
The allowance for doubtful accounts consists of the individually estimateduncollectible amounts with respect to certain identified doubtful receivables
and the amounts calculated using the rate of actual collection losses withrespect to the other receivables.
Provision for bonuses:
A provision for bonuses is provided to prepare for the bonus payment toemployees at the estimated amount applicable to this fiscal year out of theestimated future bonus payment amount.
Provision for bonuses for directors (and other officers):
A provision for bonuses for directors (and other officers) is provided to prepare
for the bonus payment to officers at the estimated amount applicable to thisfiscal year out of the estimated future bonus payment amount.

35

(5) Hedging accounting method
1) Hedging accounting method
The Company defers gains or losses on its hedges.
For foreign exchange contracts and currency swaps, the Company allocatesdifferences 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 the conditions
for application of such exceptional treatment.
2) Hedging instruments and hedged items
Hedging instruments:

Foreign exchange contracts, interest rate swaps,
currency swaps, and bonds denominated in foreign
currencies

Hedged items:

Forecasted foreign currency transactions, loans
receivable in foreign currencies, interest on
borrowings, bonds denominated in foreign
currencies, and investments in foreign subsidiaries

3) Hedging policy
Derivatives are used to avoid risks associated with fluctuations in foreignexchange markets and in interest rates and to reduce the costs of financing.
It is the Company’s policy not to engage in speculative transactions thatdeviate from real demand or in highly leveraged derivatives.
4) Method of evaluating the effectiveness of hedging
The Company assesses the effectiveness of its hedges by comparing changes
in the market values of the hedging instruments and of the hedged items overthe entire period of 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 inthese cases.
(6) Accounting criteria for revenue and expenses
The Company recognizes revenue based on the following five step approach.
Step 1: Identify the contract with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in thecontract
Step 5: Recognize revenue when the entity satisfies a performanceobligation
The Company principally formulates the Group’s management policies,
management strategies, and management resource allocation policies, provides
necessary guidance, etc., to subsidiaries to implement them, and implements
various measures to enhance the overall brand value and comprehensive
strength of the Group. The Company has identified the provision of management
guidance and benefits that rely on the brand value and comprehensive strengthof the Group to the subsidiaries, and others, as a performance obligation. Such36

performance obligations are fulfilled by providing contractual services tocustomers; hence the Company recognizes revenue over the period of theservices being provided.
In addition, the consideration is collected within one year and does not include
significant financing component or variable considerations.
(7) Other significant items associated with the preparation of nonconsolidated financial statements
Application of group tax sharing system
The Company has applied the group tax sharing system.
2. Notes to Changes in Accounting Policies(1) Application of Implementation Guidance on Accounting Standard for Fair
Value Measurement
The Company has adopted the “Implementation Guidance on AccountingStandard for Fair Value Measurement” (ASBJ Guidance No. 31, June 17, 2021)
from the beginning of this fiscal year, and it has applied the new accounting
policy provided for by the Implementation Guidance on Accounting Standard
for Fair Value Measurement prospectively in accordance with the transitional
measures provided for in paragraph 27-2 of the Implementation Guidance on
Accounting Standard for Fair Value Measurement.
This has no impact on the non-consolidated financial statements.
3. Notes on Accounting Estimates
The accounting estimates have been calculated using amounts deemed
reasonable based on information available when preparing the nonconsolidated financial statements. Of the amounts calculated based on
accounting estimates and recorded in the non-consolidated financial
statements of this fiscal year, the following items are subject to risk that
could significantly affect non-consolidated financial statements of thesubsequent fiscal year.
(1) Valuation of shares of subsidiaries and associates that do not havea market value
1) Amounts recorded in the non-consolidated balance sheet of thisfiscal year
An amount of ¥2,692,570 million has been recorded under shares ofsubsidiaries and associates. The amount includes ¥1,340,416 million
associated with shares of Asahi Holdings (Australia) Pty Ltd.
2) Other information to facilitate understanding of the accounting
estimates among users of the non-consolidated financial
statements
For shares of subsidiaries and associates that do not have a market value, avaluation loss is recognized if the value in substance decreases significantly
due deteriorating financial position of the company issuing such shares, unlessthere is sufficient evidence otherwise substantiating the potential forrecoverability.
37

In addition, valuation in substance with respect to some shares of subsidiaries
and associates is calculated to reflect excess earnings power. Accordingly,
valuation of Asahi Holdings (Australia) Pty Ltd. shares has been calculated toreflect excess earnings power of the Oceania business.
In relation to the valuation of excess earnings power, the Company tests for
impairment with respect to such goodwill on an annual basis in the
consolidated financial statements. For further details, please refer to “NOTESTO THE CONSOLIDATED FINANCIAL STATEMENTS, 2. Notes on Accounting
Estimates, (Impairment of non-financial assets).”
As a result of the above, valuation loss has not been recognized with respect
to the end of this fiscal year because value in substance, which reflects theexcess earnings power of the company, has not decreased significantly.
Key assumptions of the estimate of the value in substance for the shares ofAsahi Holdings (Australia) Pty Ltd. are the same as the assumptions employedin calculating the recoverable amount estimates used in testing for
impairment when preparing the consolidated financial statements “NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS, 2. Notes on Accounting
Estimates, (Impairment of non-financial assets).”
Valuation loss may occur in the subsequent fiscal year if it becomes necessary
to revise these assumptions.
4. Notes to the Non-Consolidated Balance Sheet(1) Accumulated depreciation on property, plant and equipment¥30,121 million(2) Contingent liabilities
Guarantees against bank loans and trade payables
Guarantees:¥9,072 million(3) Monetary claims and obligations with associates (excluding thoseclassified separately in the Balance Sheet)
Short-term monetary claims on associates:¥68,586 million

Short-term monetary obligations to associates:¥226,614 million

5. Notes to the Non-Consolidated Statement of Income
Transactions with associates
Operating revenue:¥65,024 million

Operating expenses:¥8,184 million

Transactions other than operating transactions:¥6,607 million

38

6. Notes to the Non-Consolidated Statement of Changes in Net Assets
Treasury shares(Shares)
Type of stock

Number ofsharesas of Jan. 1,
2023

Increaseduring thisfiscal year

Decreaseduring thisfiscal year

Number ofsharesas of Dec. 31,
2023

Common322,338
4,850
3,085
324,103stock(Outline of reason 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 fromshareholders upon request:
4,850 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
upon request:
122 shares
Decrease resulting from payment of stock compensation to retired directors:
2,963 shares
Treasury shares include 132,505 shares of the Company’s common stock heldby Custody Bank of Japan, Ltd. as the trust assets of a stock compensation
plan.

39

7. Notes to Tax Effect Accounting(1) Breakdown of main reasons for the accrual of deferred tax assets
and liabilities(Deferred tax assets)
Shares of subsidiaries and associates due to restructuring:
Loss on valuation of shares of subsidiaries, non-tax
deductible:
Loss on valuation of capital contributions for subsidiaries,
non-tax deductible:
Deferred losses on transfer of business:
Deferred losses on hedges:
Others:Subtotal deferred tax assets:
Valuation allowance:¥19,727 million¥32,082 million¥4,558 million¥746 million¥28,103 million¥1,664 million¥86,880 million¥(35,723) million

Total deferred tax assets¥51,157 million(Deferred tax liabilities)
Deferred gain on transfer of business between
consolidated corporations:
Valuation difference on available-for-sale securities:
Others:¥(5,026) million¥(1,372) million¥(20) million

Total deferred tax liabilities¥(6,418) million

Net deferred tax assets¥44,737 million(2) Breakdown of main items which caused the difference between thestatutory effective tax rate and the effective tax rate after adoptionof tax effect accounting
Statutory effective tax rate:(Adjustments)
Permanent difference (non-deductible), including
entertainment expenses:
Valuation allowance:
Permanent difference (non-taxable), including dividend
income:Tax credits:
Others:
Effective tax rate after adoption of tax effect accounting:30.62%
0.12%
0.50%(27.87)%(4.28)%
1.93%
1.02%

(3) Accounting treatment for corporate and local income taxes and for
related tax effect accounting
The Company has transitioned from the consolidated taxation system to thegroup tax sharing system from this fiscal year.
The accounting treatment and disclosure for corporate and local income taxes
and tax effect accounting with this transition follow the “Practical Solution on
the Accounting and Disclosure Under the Group Tax Sharing System” (PITF No.
42, August 12, 2021).
40

Furthermore, based on PITF No. 42 paragraph 32-1, we do not expect an
impact from the changes in our accounting policy with the application of PITF
No. 42.
8. Notes to Related Party Transactions
Subsidiaries and affiliates(million yen)Type

Company

Subsidiary Asahi Group
Japan, Ltd.

Percentage Relationshipof voting with related
rights held
party

Descriptionoftransaction100%
directownership

Interlocking
of officers

Transaction
amountAccount
item

Balance asof Dec. 31,
2023

Operatingrevenue(Note 1)

7,373

Accounts
receivable-other2,199

Loaning
funds(Note 2)(80,454)

Shortterm loans
receivable

43,633100%
indirectownership

Interlocking
of officers

Operatingrevenue(Note 1)

14,870Accounts
receivable-other6,080

Subsidiary Asahi Europe 100%
anddirectInternational ownership
Ltd

Interlocking
of officers

Operatingrevenue(Note 1)

13,477

Accounts
receivableother492

Deposits
received(Note 3)73,147

Deposits
received

161,283

Payment ofinterests(Note 3)

4,843

Accruedexpenses

509

Operatingrevenue(Note 1)

20,838

Accounts
receivableother

1,014

Deposits
received(Note 3)

14,546

Deposits
received

55,672

Outsourcing
research
services,
etc.
(Note 4)

6,921

Accruedexpenses

2,090

Subsidiary Asahi
Breweries,
Ltd.

Subsidiary Asahi
Holdings(Australia)
Pty Ltd100%
directownership

Subsidiary Asahi Quality 100%&
directInnovations, ownership
Ltd.

Interlocking
of officers

Interlocking
of officers

Terms and conditions of transaction and policy on determination thereof
Note 1: Operating revenue is determined in accordance with certain reasonable standards in order toprovide supervision and guidance, etc. regarding business management.
Note 2: The interest rate for the loans receivable is reasonably determined, taking the market interest
rate into consideration. For the transaction amount, the amount of net increase (decrease) in thisfiscal year is stated.
Note 3: The interest rate for the deposits received is reasonably determined, taking the market interest
rate into consideration. For the transaction amount, the amount of net increase (decrease) in thisfiscal year is stated.
Note 4: The amount of outsourced research services, etc. is determined based on certain reasonable
standards.

9. Notes on Revenue Recognition
Information that provides the basis for understanding revenue
As stated in “(6) Accounting criteria for revenue and expenses” under “1.
Notes to Significant Accounting Policies”
10. Notes to per Share Information(1) Net assets per share:(2) Earnings per share (Profit per share):41¥2,438.49¥61.18

11. Significant Subsequent Events
There are no significant subsequent events.
12. Other
The stated amounts are the figures after truncating fractions less than the
representative unit.

42Independent accounting auditor’s report on non-consolidated
financial statements
Independent Auditor’s ReportFebruary 8, 2024

To the Board of Directors of Asahi Group Holdings, Ltd.:KPMG AZSA LLC
Tokyo Office, Japan
Kanako Ogura
Designated
LimitedLiability
PartnerEngagement Partner
Certified Public Accountant
Hiroshi Tani
Designated
LimitedLiability
PartnerEngagement Partner
Certified Public Accountant
Masahiro Morita
Designated
LimitedLiability
PartnerEngagement Partner
Certified Public Accountant

OpinionWe have audited the non-consolidated financial statements, which comprisethe non-consolidated balance sheet, the non-consolidated statement ofincome, the non-consolidated statement of changes in net assets and therelated notes, and the accompanying supplementary schedules (“the financial
statements and others”) of Asahi Group Holdings, Ltd. (“the Company”) as at
December 31, 2023 and for the year from January 1, 2023 to December 31,
2023 in accordance with Article 436-2-1 of the Companies Act.
In our opinion, the financial statements and others referred to above present
fairly, in all material respects, the financial position and the results ofoperations of the Company for the period, for which the financial statements
and others were prepared, in accordance with accounting principles generally
accepted in Japan.

43Basis for Opinion
We conducted our audit in accordance with auditing standards generally
accepted in Japan. Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Financial
Statements and Others section of our report. We are independent of theCompany in accordance with the ethical requirements that are relevant to our
audit of the financial statements in Japan, and we have fulfilled our otherethical responsibilities in accordance with these requirements. We believethat the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

Other Information
The other information comprises the business report and its supplementaryschedules. Management is responsible for the preparation and presentationof the other information. The Audit & Supervisory Board Members and the
Audit & Supervisory Board are responsible for overseeing the directors’
performance of their duties with regard to the design, implementation andmaintenance of the reporting process for the other information.
Our opinion on the financial statements and others does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements and others, our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements and others or our knowledge obtained in the audit, or otherwise
appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.

Responsibilities of Management, the Audit & Supervisory Board
Members and the Audit & Supervisory Board for the Financial
Statements and Others
Management is responsible for the preparation and fair presentation of thefinancial statements and others in accordance with accounting principles
generally accepted in Japan, and for such internal control as management
determines is necessary to enable the preparation of financial statements andothers that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements and others, management is responsible
for assessing the Company’s ability to continue as a going concern, disclosing,as applicable, matters related to going concern in accordance with accounting
principles generally accepted in Japan.
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The Audit & Supervisory Board Members and the Audit & Supervisory Board
are responsible for overseeing the directors’ performance of their duties withregard to the design, implementation and maintenance of the Company’s
financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements
and Others
Our objectives are to obtain reasonable assurance about whether the financial
statements and others as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis ofthese financial statements and others.
As part of our audit in accordance with auditing standards generally acceptedin Japan, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial
statements and others, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evidence thatis sufficient and appropriate to provide a basis for our opinion. The
selection and application of audit procedures depend on the auditor’s
judgment.

Obtain an understanding of internal control relevant to the audit in orderto design audit procedures that are appropriate in the circumstances,while the objective of the audit is not to express an opinion on theeffectiveness of the Company’s internal control.

Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made bymanagement.

Conclude on the appropriateness of management’s use of the going
concern basis of accounting and based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosuresin the financial statements and others or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Company to cease to continue as agoing concern.



Evaluate whether the presentation and disclosures in the financial
statements and others are in accordance with accounting standards
generally accepted in Japan, the overall presentation, structure andcontent of the financial statements and others, including the disclosures,45

and whether the financial statements and others represent the underlying
transactions and events in a manner that achieves fair presentation.
We communicate with the Audit & Supervisory Board Members and the Audit& Supervisory Board regarding, among other matters, the planned scope andtiming of the audit, significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide the Audit & Supervisory Board Members and the Audit &Supervisory Board with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them
all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.

Interest required to be disclosed by the Certified Public Accountants
Act of Japan
We do not have any interest in the Company which is required to be disclosed
pursuant to the provisions of the Certified Public Accountants Act 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 for theconveniences of the reader.

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[Reference] Criteria for independence of Outside Directors and Outside
Audit & Supervisory Board Members
The Company has established standards as set forth below for objectively
assessing the independence of its Outside Directors and Outside Audit &Supervisory Board Members (herein this section the “Outside Directors/Audit &Supervisory Board Members”) and accordingly deems that an Outside
Director/Audit & Supervisory Board Member lacks sufficient independence for theCompany if any of the following apply, such that he or she is:
1. A party who serves as an executive*1 of the Company or a subsidiary of theCompany (herein this section collectively referred to as the “Group”) or has
served as an executive of the Group in the past;
2. A party for whom the Group is a major business partner*2 (or if the business
partner is an incorporated entity, an executive thereof);
3. A party who is a major business partner of the Group*3 (or if the business partner
is an incorporated entity, an executive thereof);
4. A consultant, certified public accountant or other accounting professional, or an
attorney at law or other legal professional who has been paid substantial
amounts of money or other financial benefits*4 other than Directors’ and Audit &Supervisory Board Members’ remuneration paid by the Group (or if the party
receiving such financial benefits is an incorporated entity, association or otherorganization, then persons belonging to such organization);
5. A certified public accountant who belongs to the auditing firm which serves as
the Independent Accounting Auditor of the Group;
6. A major shareholder*5 of the Group (or if the major shareholder is anincorporated entity, an executive thereof);
7. An executive of an incorporated entity that is a major shareholder of the Group;
8. An executive of a company which has a relationship involving cross-assumptionof office of Outside Directors/Audit & Supervisory Board Members*6;
9. A party who receives substantial donations*7 from the Group (or if the party
receiving such donations is an incorporated entity, association or otherorganization, then an executive thereof);
10. A close relative*8 of a party who falls under any of the above items from 1 to 9
(limited to important persons*9, with the exception of item 1);
11. A party who has fallen under any of the above items from 2 to 10 during thepast ten (10) years;
12. A party who has exceeded the tenure of Outside Directors/Audit & Supervisory
Board Members stipulated by the Company*10; or
13. Notwithstanding the provisions of the respective items above, a party withrespect to whom there are special grounds for deeming there to be potential
for conflict of interests with general shareholders.
*1. “Executive” refers to an executive as defined in Item 6, Paragraph 3, Article 2 of theRegulation for Enforcement of the Companies Act, and includes both executive directors
and employees, but does not include Audit & Supervisory Board Members.
*2. “Party for whom the Group is a major business partner” refers to a party whosetransactions in the most recent fiscal year amount to 2% or more of the consolidated net
sales of the business partner’s group.
*3. “Party who is a major business partner of the Group” refers either to a party whosetransactions in the most recent fiscal year amount to 2% or more of the Company’s
consolidated revenue, or a party who loans to the Group an amount equivalent to 2% ormore of the Company’s consolidated total assets as of the end of the most recent fiscal
year.

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*4. “Substantial amounts of money or other financial benefits” refers to money and otherfinancial benefits amounting to 10 million yen or more annually, excluding Directors’ andAudit & Supervisory Board Members’ remuneration, for the most recent fiscal year (if suchfinancial benefits are obtained by an incorporated entity, association or otherorganization, it refers to money or other financial benefits amounting to 2% or more ofsuch organization’s total revenues for the most recent fiscal year).
*5. “Major shareholder” refers to a person or incorporated entity that directly or indirectly
holds 10% or more of the Company’s total voting rights.
*6. “Relationship involving cross-assumption of office of Outside Directors/Audit &Supervisory Board Members” refers to a relationship where an executive of the Group
serves as an outside director/audit & supervisory board member of another company,
and an executive of that company serves as an Outside Director/Audit & Supervisory
Board Member of the Company.
*7. “Substantial donations” refers to annual donations of 10 million yen or more made during
the most recent fiscal year.
*8. “Close relative” refers to a spouse or persons within the second degree of consanguinity.
*9. “Important persons” refers to Directors (excluding Outside Directors), officers, Executive
Officers, and other executives in positions of General Manager or above; certified public
accountants belonging to auditing firms or accounting offices; attorneys at law belonging
to legal professional corporations or law firms; councilors, directors or other officers
belonging to incorporated foundations, incorporated associations, educational institutions
and other incorporated entities; and other persons objectively and reasonably deemed to
be in positions of similar importance.
*10. “Tenure of Outside Directors/Audit & Supervisory Board Members stipulated by theCompany” means ten (10) years with respect to Directors and twelve (12) years withrespect to Audit & Supervisory Board Members.

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