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.

Items Disclosed on the Internet in relation to the
Convocation Notice of the 94th Annual General Meeting of Shareholders

TABLE OF CONTENTSCONSOLIDATED STATEMENT OF CHANGES IN EQUITYNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NON-CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSNOTES TO THE NON-CONSOLIDATED FINANCIAL STATEMENTS

1
3
17
18

Above items have been provided to our shareholders by posting them on the Company’s
website in accordance with the provisions of relevant laws and regulations and the Article
15 of the Company’s Articles of Incorporation.

ASAHI GROUP HOLDINGS, LTD.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended December 31, 2017

(million yen)
Equity attributable to owners of parent
Other components of equity

Balance at beginningof current period

Issued capital

Share premium

182,531

118,668

Changes in fairvalue of financial
instruments
RemeasureTreasury sharesmeasured at fair ments of definedvalue throughbenefit plansother comprehensive income

Retainedearnings

589,935(76,709)51,881–

23,083

5,200

23,083

5,200(3,578)(5,200)Comprehensive
incomeProfit141,003

Other comprehensive
incomeTotal comprehensive
income––141,003–

Transfer to nonfinancial assets
Transactions withownersDividends(26,571)

Purchase of treasury
shares(38)

Disposal of treasury
shares00Changes throughbusiness
combinations
Changes throughsales of consolidated
subsidiaries

332

Share-based paymenttransaction

48

Transfer from othercomponents ofequity to retained
earnings

8,779

Transfer to othercomponents ofequity related todisposal groups held
for sale
Other increase(decrease)
Total contributions
by owners anddistribution toowners–Acquisition of noncontrolling interests
without change incontrol

380(17,792)(38)(3,578)(5,200)2

Total changes in theownership interest in
subsidiaries

–

2

–

–

–

–

Total transactions
with owners–

383(17,792)(38)(3,578)(5,200)

Balance at end ofcurrent period

182,531

119,051

713,146(76,747)

71,386–1

Equity attributable to owners of parent
Other components of equity

Cash flow
hedgesBalance at beginningof current period

Other
components
NonTotal equity
of equity
Translation
attributable controlling
Total otherrelated todifference
to owners of interests
components
disposalon foreign
parentof equitygroupsheld
operations
for sale

Cost ofhedging(219)–(29,734)

21,927

Other comprehensive
income(12,200)(1,179)167,304

Total comprehensive
income(12,200)(1,179)167,304

182,208

Transfer to nonfinancial assets

11,795–Total
equity836,3549,750

846,105–

141,003(2,155)

138,848

182,208

182,208(76)

182,131323,211(2,232)

320,979

Comprehensive
incomeProfit–11,795

11,795

11,795

Dividends–(26,571)

Purchase of treasury
shares

–

(38)

(38)

Disposal of treasury
shares–00Changes throughbusiness
combinations––

Changes throughsales of consolidated
subsidiaries

–

332

332

Share-based paymenttransaction

–

48

48

Transfer from othercomponents of equity
to retained earnings(8,779)

–

–

–

–

Transactions withownersTransfer to othercomponents of equity
related to disposalgroups held for sale

3,440

3,440

Other increase(decrease)
Total contributions byowners anddistribution to owners(3,440)

–
–

–

3,440

(5,338)Acquisition of noncontrolling interests
without change incontrol(3,440)

–

(405)

300

(26,976)

300

–

242

242

(26,229)136(26,092)

2

(42)

(39)

Total changes in theownership interest in
subsidiaries

–

–

–

–

–

2

(42)

(39)

Total transactions
with owners

–

–

3,440

(5,338)(3,440)(26,226)

93(26,132)

Balance at end ofcurrent period(624)(1,179)141,010

210,592(3,440)1,145,135

7,612

1,152,748

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis for Preparation of Consolidated Financial Statements(1) Basis of consolidated financial statements
The Group has prepared its consolidated financial statements in accordance with theInternational Financial Reporting Standards (hereinafter referred to as the “IFRS”), pursuant
to the provisions of Article 120-1 of the Ordinance of Companies Accounting. The latter partof the Article 120-1 prescribes some omissions of disclosure items required under IFRS.
(2) Consolidation
Number of consolidated subsidiaries: 146
Please see Item 1 of the “Business Report” (“Overview of Operations of the Asahi Group,
section (5) Status of Major Establishments and Principal Subsidiaries”), for a summaryof the current status of principal consolidated subsidiaries.

Asahi Breweries Europe Ltd was added to the scope of consolidation during this fiscal
year due to its incorporation; and Plzeňský Prazdroj, a. s., Pivovary Topvar a. s.,
Kompania Piwowarska S.A., Ursus Breweries S. A., Dreher Sörgyárak Zrt. were also
added to the scope of consolidation during this fiscal year due to the acquisition of theirshares.
(3) The equity method
Number of companies accounted for using the equity method: 19
Principal affiliates accounted for using the equity method were Asahi Business Solutions
Corp., Shenzhen Tsingtao Beer Asahi Co., Ltd., and Asahi Beer Communications, Ltd.

Tsingtao Brewery Co., Ltd. and PT Indofood Asahi Sukses Beverage were not accounted
for by the equity method because they were classified as disposal groups held for sale.
(4) Significant accounting policies
1) Financial assets
The Group has early adopted IFRS 9 “Financial Instruments” (amended in July 2014).

(i)

Initial recognition and measurement
The Group recognizes financial assets when it becomes a party to the contract on thefinancial instruments concerned. Financial assets purchased or sold in a regular way arerecognized on the transaction date. Financial assets are classified as financial assets
subsequently measured at amortized cost or financial assets subsequently measured at fairvalue.
Financial assets measured at fair value through profit or loss are initially recognized atfair value. Financial assets measured at fair value through other comprehensive income
and financial assets measured at amortized cost are initially recognized at fair value plustransaction costs that are directly attributable to the acquisition.
a. Financial assets measured at amortized cost
Financial assets are classified as financial assets measured at amortized cost only
when the requirement that the objective of the Group’s business model is to holdassets in order to collect the contractual cash flows and the requirement that thecontractual terms of the financial assets give rise on specific dates to cash flows thatare solely payments of principal and interest on the principal amount outstanding areboth met.

3

b. Financial assets measured at fair value
Financial assets that do not satisfy either of the two requirements above are classified
as financial assets measured at fair value.
With regard to financial assets measured at fair value, the Group decides toirrevocably designate each financial instrument as measured at fair value throughprofit or loss or 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.
Information on derivatives is provided in 11) Derivatives and hedge accounting.
(ii) Subsequent measurement
Subsequent to the initial recognition, financial assets are measured as follows, dependingon the respective classifications.
a. Financial assets measured at amortized cost
These financial assets are measured at amortized cost using the effective interest
method.
b. Financial assets measured at fair value
These financial assets are measured at fair value at the end of the fiscal period.
Changes in fair value of such financial assets are recognized in profit or loss or othercomprehensive income, depending on their classification.
Dividend income arising from equity instruments designated as measured at fairvalue through other comprehensive income is recognized in profit or loss. If the fairvalue decreases significantly or the equity instrument is disposed of, the accumulated
other comprehensive income is transferred to retained earnings.
(iii) Derecognition
The Group derecognizes a financial asset when the contractual rights to receive cash
flows from the investment expire or when the Group transfers the investment andsubstantially all the risks and rewards of the ownership.
(iv) Impairment of financial assets
The Group estimates expected credit losses at the end of each fiscal period forrecoverability 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 of which the credit risk 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.
If there is any objective evidence of impairment for financial assets of which the credit
risk has increased significantly, interest income is measured at the amount calculated bymultiplying the carrying amount less the loss allowance by the effective interest rate.
In determining whether any objective evidence of impairment exists, the Group uses thefollowing requirements:● Significant financial difficulty of the issuer or borrower;● Breach of contract, such as a default or delinquency in interest or principal
payments;● Concessions granted to the borrower for economic or legal reasons relating to theborrower’s financial difficulty, that the Group would not otherwise consider;4● Increased probability that the borrower will enter bankruptcy or other financial
reorganization;● Disappearance of an active market for that financial asset because of financial
difficulties.
When the Group has no reasonable expectation that all or a portion of a financial asset
will be recovered, it reduces the amount directly from the carrying amount of thefinancial asset.
If in a subsequent period, the credit risk decreases and the decrease can be related
objectively to an event occurring after the impairment was recognized (such as an
improvement in the credit rating of the borrower), reversal of previously recognizedimpairment loss is recognized in profit or loss.
2) Inventories
Inventories are measured at the lower of cost or net realizable value. The cost is calculated
principally using the weighted-average method for merchandise, finished goods and semifinished goods, and mainly using the moving-average method for raw materials and supplies.
The acquisition 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(based on 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 landprincipally consist of production and processing equipment and facilities for the head office.
Property, plant and equipment are recognized at the acquisition cost, and carried at cost lessaccumulated depreciation and accumulated impairment losses. An acquisition cost includes
the purchase price, the costs directly related to acquisition of the asset, costs for asset
dismantlement and removal and site restoration, and borrowing costs that are required to becapitalized. Concerning expenditure after acquisition, in cases when it is highly probablythat future economic benefit relating to the item will flow to the Group, and the item has acost that can be measured reliably, such costs are recognized either together in the carrying
amount of the asset, or when deemed appropriate, as a separate asset. The carrying amountsof parts that are replaced are derecognized. Other repair and maintenance costs arerecognized in profit or loss in the accounting period in which the cost was incurred.
Land is not depreciated. The amount of depreciation of other assets is calculated byallocating the acquisition 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
Machinery and vehicles
2 to 15 years
Tools, furniture and fixtures
2 to 20 years
Residual values, useful lives and depreciation methods of property, plant and equipment are
reviewed at the end of each fiscal period, and revised where necessary.
Gains or losses on disposal are computed by comparing the carrying amount with theproceeds from disposal, and then recognized in profit or loss.
4)(i)

Goodwill and intangible assets

Goodwill
Goodwill is tested for impairment in each fiscal period, and the carrying amount is theacquisition cost less accumulated impairment losses. Impairment losses of goodwill are5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
Individually acquired trademarks are recognized at the acquisition cost. Trademarks
acquired through business combinations are recognized at fair value as of the acquisition
date. Trademarks, for which a certain useful life is determined, except for those withindefinite useful lives, are recorded at the acquisition cost less accumulated amortization
and accumulated impairment losses. The amount of amortization is calculated byallocating the acquisition cost of trademarks using the straight-line method principallyover the estimated useful life of 20 to 40 years.
(iii) Software
Software is carried at its cost less accumulated amortization and accumulated impairment
losses.
Development expenses directly related to design and testing of the Group’s proprietary
software are recognized as intangible assets only when they are reliably measureable,
they are technically feasible, it is highly probable to generate future economic benefits,
and the Group has an intention and adequate resources to complete the development anduse the assets.
Other development expenses that do not satisfy these requirements are recognized as
expenses as incurred. Development expenses previously recognized as expenses are notrecognized as assets in subsequent fiscal periods.
Software is amortized primarily using the straight-line method over the estimated usefullife 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.
Other intangible assets, for which a certain useful life is determined, are carried at thecost less accumulated amortization and accumulated impairment losses. However, someintangible assets (such as leasehold interests in land) are determined to have indefinite
useful lives and are not amortized, because they exist fundamentally as long as thebusiness continues. The amount of amortization is calculated by allocating the acquisition
cost of each other intangible asset using the straight-line method over the estimated usefullife.
Residual values, useful lives and amortization methods of intangible assets are reviewed
at the end of each fiscal period, and revised where necessary.
5) Leasing
The Group leases certain property, plant and equipment and intangible assets as a lessee.
Leases of property, plant and equipment and intangible assets are classified as finance leases,
when substantially all the risks and rewards of ownership are attributable to the Group. In
cases of finance leases, leased properties are recognized as assets at the commencement of
the lease term at fair value of the leased property or, if lower, the present value of theminimum lease payments.
Each lease payment is allocated between liabilities and finance costs. The interest
component, which is a finance cost, is expensed in profit or loss over the lease term to
produce a constant periodic rate of interest on the remaining balance of the liability in each6

fiscal period. Property, plant and equipment and intangible assets acquired through financelease are depreciated or amortized using the straight-line method over the useful life of theasset or, if shorter, the lease term.
Leases other than finance leases are classified as operating leases.
Lease payments in operating leases (less incentives received from the lessor) are recognizedin profit or loss using the straight-line method over the lease term.
6) Impairment of non-financial assets
Goodwill and intangible assets with indefinite useful lives are not subject to amortization
and are tested for impairment in each fiscal period. 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 the circumstances. When the carrying amount of anasset 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 the asset andvalue in use. To assess impairment, an asset is grouped at the smallest unit which generates
separately identifiable cash flows (cash-generating unit). Non-financial assets for which
impairment losses are recognized, excluding goodwill, are reassessed at the end of eachfiscal period 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 aresult of past events, it is probable that an outflow of resources will be required to settle theobligation, and the amount can be reliably estimated.
If there are many similar obligations, the possibility 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 possibility of the outflow is low for one item in thesimilar obligations.
Provisions are measured as the present value of expenditures expected to be required tosettle the obligation, using the pre-tax discount rate that reflects the current market
assessments of the time value of money and the risks specific to the obligation. An increasein provisions due to passage of time is recognized as interest expense.
8)(i)Employee benefits

Post-employment benefits
The Group companies have various plans. The Group has adopted a defined benefit plan,and certain consolidated subsidiaries have established a retirement benefit trust. In
addition to these plans, certain consolidated subsidiaries have introduced a defined
contribution plan and a retirement benefit prepayment plan.
Defined benefit plans are post-employment benefit plans other than defined contributionplans. Defined contribution plans are post-employment benefit plans in which theemployer pays fixed contributions to other separate entities and will have no legal orconstructive 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 haveearned in exchange for their service rendered in the prior fiscal years and the current
fiscal year and discounting that amount. The Group recognizes the amount calculated bydeducting fair value of plan 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 high quality corporate bonds at7

the end of the fiscal period that correspond to the discount period, which is set on thebasis of a period up to the estimated date of benefit payment for each future year.
Contributions to the plans are determined based on regular actuarial calculation andusually paid to insurance companies or funds managed by trust companies.
When it is discovered as a result of the calculation that the Group has a surplus in thedefined benefit plan, net defined benefit asset is measured to the extent of the present
value of economic benefits available in the form of future refunds from the plan or areduction 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) arisingfrom the defined benefit plan in other comprehensive income and immediately transfers
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 and recognized as
expenses when the relevant service is rendered. Bonuses are recognized as a liability at
the amount estimated to be paid under the plans, when the Group has present legal orconstructive obligations to pay as a result of past service rendered by employees, and theamount of obligations can be reliably estimated.
9) Revenues
Revenues consist of fair value of consideration received for sale of goods, rendering ofservices and others in the Group’s ordinary business activities. Revenues are presented on a
net basis after the deduction of sales returns, rebates and discounts.

(i)

Sale of goods● Alcoholic Beverages Segment–

Manufacture and sale of beer, happoshu (lowmalt beer), shochu (distilled spirits), whisky
and other liquor products, restaurant business,wholesale business, and others● Soft Drinks Segment– Manufacture and sale of soft drinks and others● Foods Segment– Manufacture and sale of foods and medicines● International Operations Segment – Manufacture and sale of beer and other liquor
products and soft drinks, and others
The Group recognizes revenues when the significant risks and rewards of ownership of
the goods have been transferred to the customer, the collectability of consideration is high,related costs and the possibility of sales returns can be measured reasonably, the Group
does not retain continuing managerial involvement in association with the goods, and theamount of revenues can be measured reliably. Revenues are usually recognized when theGroup delivered the goods to the customer and any incomplete obligation no longer exists.
(ii) Rendering of services
The Group provides real estate business such as building management, logistics businesssuch as warehousing, and other services.
Revenues from the rendering of services are recognized when the service is provided.

8

(iii) Gross and net presentation of revenues
The Group thinks that it is acting as a principal in a transaction when it has exposure to
the significant risks and rewards associated with the sale of goods or the provision ofservices, and presents the gross amount of the transaction as revenues.
The Group considers that it is acting as an agent in a transaction when it does not have
exposure to the significant risks and rewards associated with the sale of goods or theprovision of services, and presents only the net amount of the transaction after the
deduction of payments made to a third party from the total amount of consideration
earned from the transaction as revenues.
(iv) Interest income
Interest income is recognized using the effective interest method.
(v) Dividend income
Dividend income is recognized when the right to receive dividends is established.
10) Foreign currency translation(i)Functional currency and presentation currency
Items included in financial information of each company of the Group are recorded in thefunctional 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, which is the presentation currency of theGroup.

(ii) Transactions and transaction balances
Foreign currency transactions are translated into functional currencies using the exchange
rate at the date of the transactions. Foreign exchange differences arising from settlementof transactions and those arising from the translation of monetary assets and liabilities
denominated in foreign currencies using the exchange rate at the end of the fiscal period
are recognized in profit or loss. However, exchange differences arising from financial
assets measured through other comprehensive income and qualifying cash flow hedges
are recognized in other comprehensive income.
(iii) Foreign operations
Operating results and financial position of all the foreign operations using a functional
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 thatuses a currency of a hyperinflationary economy.
a. Assets and liabilities are translated using the closing rate as of the end of the fiscal
period.
b. Income and expenses are translated using the average rate (unless the average rate is
not a reasonable approximation of the cumulative effect of the exchange rates
prevailing on the transaction date, in which case income and expenses are translatedusing the rate on the transaction date).
c. All resulting exchange differences are recognized in other comprehensive income
and accumulated in exchange differences on foreign operations, which is othercomponents of equity.

9

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 again or loss on the sale.
11) Derivatives and hedge accounting
Derivatives are initially recognized at fair value on the date when the derivative contract isconcluded and subsequently remeasured at fair value at the end of each fiscal period. The
method of recognizing gains or losses arising as a result of the remeasurement depends onwhether the derivative is designated as a hedging instrument, and if it was designated as ahedging 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 as hedging
instruments of net investments in foreign operations.
The Group documents the relationship between the hedging instrument and the hedged item
and the risk management objective and strategy for exercising 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 ofhedged items or foreign exchange fluctuations in net investments in foreign operations.
The Group assesses the effectiveness of hedges on an ongoing basis, and determines that ahedge is effective when the requirement that there is an economic relationship between thehedged 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, andthe requirement that the hedge ratio of the hedging relationship is the same as the ratio
resulting from the quantities of the hedged item actually hedged and the hedging instrument
actually used are all satisfied.
The effective portion of changes in fair value of derivatives that are designated as a hedging
instrument of cash flow hedges and satisfy the requirements as the hedging instrument isrecognized in other comprehensive income. Gains or losses on the ineffective portion are
immediately recognized in profit or loss.
Accumulated gains or losses recognized through other comprehensive income aretransferred to profit or loss in the period during which cash flows arising from 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 acquisition cost of the asset. The deferred amount is eventually
recognized as cost of sales for inventories, or as depreciation expense for property, plant andequipment.
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 so on.
When the hedged future cash flows are still expected to occur, accumulated gains or losses
recognized in other comprehensive 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 immediatelytransferred to profit or loss.
With regard to derivatives or non-derivative hedging instruments, including borrowings,
held for hedging foreign exchange fluctuation risk in net investments in foreign operations,the portion of foreign exchange differences deemed effective as a hedge is recognized inother comprehensive income as hedging of net investments in foreign operations. Of
exchange differences for derivatives or non-derivative hedging instruments, the portion
deemed ineffective as a hedge and not subject to the assessment of hedging effectiveness are10

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 disposal of foreign operations.
12) Accounting for consumption taxes
Consumption taxes that are received from customers and paid to tax authorities are excluded
from revenue, cost of sales, and expense on the consolidated statements of profit or loss.
2.

Notes to Consolidated Statement of Financial Position(1) Pledged assets and secured liabilities
The following assets have been provided as collateral for short-term loans payable of ¥4,209
million.

Property, plant and equipment¥4,037 million(2) Accumulated depreciation on property, plant and equipment(3) Bad debt provisions directly deducted from assets
Trade and other receivables¥837,668 million

Other financial assets¥3,084 million¥864 million(4) Contingent liabilities
Guarantees¥2,981 million(5) Changes in presentation“Provisions” that was included in other current liabilities in the previous fiscal year is shown
separately from this fiscal year due to its increased materiality. The amount of “provisions” inthe previous fiscal year was ¥4,870 million.
3.

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

483,585,862 shares(2) Dividends during this fiscal year
1) It was resolved at the 93rd Annual General Meeting of Shareholders of March 28, 2017
as follows:

Dividends on common stock
Total amount of dividends:¥12,827 million

Dividend per share:¥28

Record date:

December 31, 2016

Effective date:

March 29, 2017

11

2)

It was resolved at the Board of Directors Meeting of August 3, 2017, as follows:

Interim dividends on common stock
Total amount of interim dividends:¥13,743 million

Interim dividend per share:¥30

Record date:June 30, 2017

Effective date:

September 1, 20173) Dividends after the end of this fiscal year
The following item has been placed on the agenda for approval at the 94th Annual General
Meeting of Shareholders scheduled for March 27, 2018.

Dividends on common stock
Source of dividends:

Retained earnings

Total amount of dividends:¥20,615 million

Dividend per share:¥45

Record date:

December 31, 2017

Effective date:4.

March 28, 2018

Notes on Financial Instruments(1) Status of financial instruments
1) Capital management
The Group’s purpose for capital management is to maintain its ability to continue as a going
concern in order to provide returns to shareholders, grant benefits to other stakeholders andmaintain the most appropriate capital structure for reducing capital cost.
In order to maintain or adjust the capital structure, the Group may adjust the amount ofdividends 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. This ratio is
calculated by dividing the amount of net liabilities by the capital. The amount of net
liabilities is calculated by deducting cash and cash equivalents from interest-bearing debts.
The capital shall be the “equity” presented in the consolidated statement of financial
position (the portion attributable to owners of parent).
2) Risk management
The Group’s activities are exposed to various financial risks such as market risks (including
foreign exchange risk, interest rate risk and price risk), credit risks and liquidity risks. The
Group’s risk management policy aims to specialize in the unpredictability of financial
markets and minimize the potentially adverse impact on the Group’s financial performance.
The Group uses derivatives 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 changing business environment. In doing so, the Company and its principal
consolidated subsidiaries consider the balance between direct and indirect financing or thebalance between short- and long-term debt based on fund procurement costs and risk
diversification in response to changes in the business environment. Looking to use funds
efficiently, the Group introduced a cash management system among the Company and its
principal consolidated subsidiaries in Japan to reduce consolidated interest-bearing debt. If

12surplus funds are generated temporarily, the Company invests it only in safe financial
instruments.
The Group uses derivatives to the extent of balances of foreign currency denominated assets
and liabilities and bonds and borrowings, as means to mitigate foreign exchange risk,interest rate risk and price risk of raw materials and others, and to reduce funding cost.
When using derivatives, the Company trades with financial institutions only with high credit
ratings.
At the Company, the Finance Section is in charge of executing and managing derivatives, inaccordance with internal rules. Agreements on individual derivatives are entered into after
approval is received in accordance with the internal authorization criteria. The Finance
Section understands the status of derivatives including the content and balances, and reports
it to the General Manager of the Finance Section and Directors in charge of finance asneeded.
The consolidated subsidiaries also enter into such agreements in accordance with theGroup’s authorization criteria, and the Company reviews their status based on reports
submitted by them on regular basis.
(i)

Market risk
a. Foreign exchange risk
The Group conducts business activities internationally and is exposed to foreignexchange risk primarily related to US dollar and euro. 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 to mitigate foreignexchange risk. Hedge accounting is applied to the transactions that qualify for hedge
accounting.
When designating hedging instruments, currency basis spreads for currency swap are
excluded as cost of hedging.
Although receivables, payables and others denominated in a foreign currency have arisk of foreign exchange fluctuations, the impact is limited since the risk is offset
with the exchange contracts.
b. Price risk
The Group is exposed to price risk of equity instruments because 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 inequity instruments, the Group regularly keeps track of fair value, financial conditionsof issuers and others, and also reviews the overall status on an ongoing basis.
The Group has no equity instruments held for short-term trading and does not intend
to actively trade these investments.
Furthermore, the Group is exposed to price risk of raw materials since prices ofmajor raw materials used in its products fluctuate according to weather, natural
disaster and other factors. The Group engages in commodity swap transactions to
mitigate risks of fluctuations in raw materials prices. Although commodity swap
transactions used by the Group have risks of fluctuations in market prices ofcommodities, price risk is limited because these risks are offset with risks offluctuations in market prices of commodities in association with trade payables of
those commodities that the Group has.
c. Interest rate risk
The Group raises funds with variable interest rates and is exposed to interest rate risk.
Interest rate risk mainly arises from non-current borrowings.

13

The Group uses interest rate swaps, which substantially fix interest rates, to mitigate
interest rate risk. Hedge accounting is applied to the transactions that qualify forhedge accounting.
(ii) Credit risk
The Group is exposed to customers’ credit risks for trade receivables (notes and accounts
receivable-trade), other receivables (accounts receivable - other) and other financial assets(operating loans and others).
In accordance with the accounting rules, the Group regularly monitors trade receivables
and operating loans to major business partners, and routinely checks the management
status of deadlines and balances for each business partner. The Group monitors bad debts
and their collection status.
When executing derivatives, the Group trades with financial institutions only with highcredit ratings to minimize credit risk.
The Group classifies receivables and others based on credit risk profile to calculate loss
allowance.
For trade receivables, loss allowance is always recognized at the amount equal to lifetime
expected credit losses. For receivables other than trade receivables, loss allowance isrecognized at the amount equal to 12-month expected credit losses. However, in casessuch as overdue because the credit risk is considered to have significantly increased fromthe initial recognition, loss allowance is recognized at the amount equal to lifetime
expected credit losses.
The amount of loss allowance is calculated as follows:● Trade receivables
The simplified approach is applied. The Group categorizes receivables according tocredit risk profile of the counterparty and calculates loss allowance by multiplying
the receivables by the provision rate, which is determined by adding projection of
future economic conditions and others to the historical rate of credit losses calculated
according to the category.
● Receivables other than trade receivables
The principle approach is applied. Loss allowance for receivables for which thecredit risk is not considered to have significantly increased is calculated bymultiplying the carrying amount by the provision rate, which is determined byadding projection of future economic conditions and others to the historical rate ofcredit losses for similar assets. For assets for which the credit risk is considered tohave significantly increased and credit-impaired financial assets, loss allowance iscalculated as difference between the amount of the present value, which is computedby discounting estimated future cash flows using the original effective interest rateof the asset, and the carrying amount.
(iii) Liquidity risk
The Group raises funds via loans and by issuing commercial papers and bonds, and is
exposed to liquidity risk, which means there is a possibility the Group fails to makepayment on the due date due to deterioration in the funds procurement environment.
Since the Company and its principal consolidated subsidiaries have introduced the cash
management system, the Company manages liquidity risks of those companies
participating in this system.
Based on reports from each Group company, the Company creates its cash management
plan and updates the plan on a timely basis. The Group monitors an ongoing forecast forfund demand, while always maintaining sufficient margin in the unused portion of the14

contractual credit line and ensuring that all loan agreements do not conflict with the limit
and restrictive provisions (if applicable). In these forecasts, the Group takes into accountits borrowing and financing plan, compliance with restrictive provisions, adherence tointernal targets for the statements of financial position ratio as well as applicable external
regulatory and statutory requirements, such as a regulation of currency, if any.
Surplus that the Company and its principal consolidated subsidiaries hold in excess of thebalance necessary for management of working capital is managed at the Group level
under the cash management system. The Group chooses financial instruments withappropriate maturity and liquidity, and makes investments in current deposits, time
deposits, money market deposits and marketable securities to ensure a sufficient margin
determined in the above forecast.
(2) Fair value of financial instruments
In fair value measurement, the Group uses observable market data whenever available. The
fair value measurement is categorized into any of the following levels according to the levelclassification of inputs:
Level 1: Input consisting of quoted unadjusted market prices in active markets for
identical assets and liabilities
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

Transfer between levels in the fair value hierarchy is recognized on the date of the event orchange in circumstances that caused the transfer.
Financial instruments measured at amortized cost
Carrying amounts and fair values of financial instruments measured at amortized cost are as
follows:(million yen)

Carrying amountLong-term loans receivable
Long-term loans payable
Bonds
Lease obligations

1,485
492,456
539,945
22,990Fair value
1,445
492,372
542,279
23,385The above figures include balances of the current portion of those loans receivable andpayable, bonds and lease obligations whose repayments or redemption is scheduled within
one year.
Financial instruments for which the carrying amount is reasonably approximate to the fairvalue are not included in the table above.
The fair value of long-term loans receivable is calculated by discounting the expected amountof 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 loans payable is calculated by discounting the total amount ofprincipal and interest by the interest rate expected if a similar new borrowing were to betaken out, thereby deriving the present value.
The fair value of bonds is set to market prices when market prices are available.
The fair value of lease obligations is calculated by taking the present value of the obligation
concerned – discounting the total amount of principal and interest by the interest rate
expected if a similar new lease transaction were to be conducted.
In the above fair value measurement, bonds are classified into Level 2, while others are15

classified into Level 3. For bonds in Level 2, fair value is estimated using the reference
trading statistics of Japan Securities Dealers Association and others. Fair value of financial
instruments in Level 3 is measured by discounting contractual cash flows using the market
interest rate, and the difference with carrying amount is due to a difference between themarket interest rate and the contractual interest rate.
5. Per Share Information(1) Equity attributable to owners of parent per share(2) Basic earnings per share¥2,499.62¥307.786.

Additional Information
The Group completed the acquisition of the beer business in 5 Central and Eastern European
countries (Czech Republic, Slovak Republic, Poland, Hungary and Romania) and otherrelated assets as of March 31, 2017. The purchase price of the beer business in the 5 Central
and Eastern European countries was ¥899,077 million. The main contents of the assets
acquired and liabilities assumed at the date of the business combination were goodwill of¥427,995 million and intangible assets of ¥484,665 million.
Since the Group is currently examining to specify identifiable assets and liabilities at the dateof the business combination and the allocation of the acquisition cost is underway, theamounts of goodwill arose from the acquisition, and the assets acquired and liabilities
assumed at the date of the business combination are preliminary.

7.

Other
The stated amounts are the figures after truncating fractions less than the representative unit.

16

NON-CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSFor the year ended December 31, 2017

(million yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings
Generalreserve

Retainedearnings
brought
forward

Total retained
earnings

195,000

67,045

262,045

Dividends(26,571)(26,571)

Profit

65,97565,975

Issued capital Legal capital Other capitalsurplussurplus
Balance at beginningof current period

182,531130,292

21,390Total capitalsurpluses

151,683

Changes of items
during period

Purchase of treasury
shares
Disposal of treasury
shares00

Net changes of items
other thanshareholders’ equity
Total changes of items
during period
Balance at end ofcurrent period

–

–

0

0

–

39,40439,404

182,531130,292

21,390151,683

195,000

106,450

301,450

Shareholders’ equity

Balance at beginningof current period

Valuation and translation adjustments

Treasury shares

Total
shareholders’equity(76,709)519,550

Valuation
Total valuationdifference on Deferred gains or
and translation
available-for- losses on hedges
adjustments
sale securities
8,923

(356)

8,566

Total net assets

528,117

Changes of items
during period
Dividends(26,571)(26,571)

Profit

65,97565,975Purchase of treasury
shares

(38)

(38)

(38)

Disposal of treasury
shares000

Net changes of items
other thanshareholders’ equity
Total changes of items
during period
Balance at end ofcurrent period(1,747)(275)(2,022)(2,022)(38)

39,366(1,747)(275)(2,022)

37,343(76,747)

558,917

7,175

(631)

6,543

565,460

17

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
Securities with market value:
Carried at the average market value for the month immediately preceding the balance sheet
date (related valuation differences are directly charged or credited to net assets, and thecost of securities sold is computed by the moving-average method).
Securities without market value:
Stated at cost based on the moving-average method(2) Valuation basis and method for derivatives
Market price method(3) 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 thosespecified 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 thosespecified in the Corporation Tax Act.
Software for internal use is amortized by the straight-line method over a useful life of 5
years. Trademarks is mainly amortized over 20 years using the straight-line method.
Leased assets:
Finance leases that do not transfer ownership rights are amortized to a residual value ofzero using the straight-line method, with the lease period as the estimated useful life.
(4) Accounting criteria for allowances
Allowance for doubtful accounts:
The allowance for doubtful accounts consists of the individually estimated uncollectible
amounts with respect to certain identified doubtful receivables and the amounts calculatedusing the rate of actual collection losses with respect to the other receivables.
Provision for bonuses:
A provision for bonuses is provided to prepare for the bonus payment to employees at theestimated amount applicable to this fiscal year out of the estimated future bonus payment
amount.
Provision for directors’ bonuses:
A provision for directors’ bonuses is provided to prepare for the bonus payment to officers
at the estimated amount applicable to this fiscal year out of the estimated future bonus
payment amount.

18

(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 allocates differences in thevalues of hedging instruments when such hedges meet all requirements for such allocations. Forinterest rate swaps, the Company applies exceptional treatment when the swap in question meetsthe conditions for application of such exceptional treatment.
2) Hedging instruments and hedged items

Hedging instruments:

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

Hedged items:

Forecasted foreign currency transactions, loans receivablein foreign currencies, interest on borrowings, borrowings
denominated in foreign currencies and investments inforeign subsidiaries

3)

Hedging policy

Derivatives are used to avoid risks associated with fluctuations in foreign exchange markets andin interest rates and to reduce the costs of financing. It is the Company’s policy not to engage in
speculative transactions that deviate 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 over the 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 toforgo evaluation of the effectiveness of hedges in these cases.
(6) Other significant items associated with the preparation of non-consolidated financial
statements

Treatment of consumption taxes
Consumption taxes are excluded from the statements of income, except in the case of nondeductible consumption taxes related to non-current assets that are charged when incurred.
(Additional Information)
Effective from the fiscal year ended December 31, 2017, the Company has applied the“Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, March 28,2016).
2.

Notes to the Non-Consolidated Balance Sheets(1) Accumulated depreciation on property, plant and equipment(2) Contingent liabilities
1) Guarantees against bank loans
Guarantees:
2)¥30,591 million¥42,687 million

Guarantees against derivatives

Guarantees:¥511 million(3) Monetary claims and obligations with associates (excluding those classified separately in

19the Balance Sheets)
Short-term monetary claims on associates:
Short-term monetary obligations to associates:
3.

¥222,121 million¥151,761 million

Notes to the Non-Consolidated Statements of Income(1) Loss on valuation of shares of subsidiaries and associates
The loss on valuation of shares of subsidiaries and associates is the loss on valuation of shares of
the intermediate holding company for the Southeast Asia business, Asahi Group Holdings
Southeast Asia Pte. Ltd.
(2) Transactions with associates
Operating revenue:¥136,295 million

Operating expenses:¥4,812 million

Transactions other than operating transactions:
4.

¥766 million

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

Common stock(shares)Number of shares
Increase during Decrease during Number of shares
as of Jan. 1, 2017
this fiscal year
this fiscal year as of Dec. 31, 201725,453,509
8,274
14
25,461,769(The outline of a change reason)
The increase in the number of shares was the result of the following:

Increase resulting from purchases of Less-than-One-Unit Shares from shareholders uponrequest:8,274 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:
14 shares

20

5.

Notes to tax effect accounting(1) Breakdown of main reasons for deferred tax assets and liabilities(Deferred tax assets)
Shares of subsidiaries and associates due to restructuring:
Allowance for doubtful accounts, in excess of tax-deductible amount:
Loss on valuation of investment in subsidiaries, non-tax deductible:
Loss on valuation of capital contributions for subsidiaries, non-tax
deductible:
Deferred loss on transfer of business between consolidated corporations:
Gain on transfer of shares of subsidiaries and associates:
Others:Subtotal deferred tax assets:
Valuation allowance:
Total deferred tax assets(Deferred tax liabilities)
Valuation difference on available-for-sale securities
Deferred gain on transfer of business between consolidated corporations:
Total deferred tax liabilities
Net deferred tax assets:¥16,703 million¥588 million¥31,596 million¥4,558 million¥942 million¥10,793 million¥1,284 million¥66,466 million¥(38,020) million¥28,446 million¥(2,916) million¥(5,026) million¥(7,942) million¥20,503 million21

(2) Breakdown of main items which caused the difference between the statutory tax rate andthe effective tax rate after adoption of tax effect accounting
Statutory effective tax rates:(Adjustments)
Permanent difference (non-deductible), including entertainment expenses:
Valuation allowance:
Permanent difference (non-taxable), including dividend income:Tax credit:
Others:
Effective tax rates after adoption of tax effect accounting:

30.9%
0.2%
16.3%
(46.5)%(0.2)%(0.3)%
0.3%

6. Notes to related party transactions
Subsidiaries and affiliates
Type
Subsidiary

Company

Percentage
of votingrights held

Relationship
Description
with relatedof transaction
party

Asahi
Breweries,
Ltd.

100%
directownership

Interlockingof directors/
corporate
auditors

Transaction
amount(million yen)
Balance as
Account
of Dec. 31,
item
2017

Operatingrevenue(Note 1)

87,838–

Loaning
funds(Note 2)

3,002

Short-term
loans
receivable–

171,745

Subsidiary

Asahi Soft
DrinksCo., Ltd.

100%
directownership

Interlockingof directors/
corporate
auditors

Operatingrevenue(Note 1)

26,859––Subsidiary

AI Beverage
HoldingCo., Ltd.

100%
directownership

Interlockingof directors/
corporate
auditors

Deposits
received(Note 3)

51,208Deposits
received

68,843

Subsidiary

Asahi
Breweries
Europe Ltd

100%
directownership–

Borrowing offunds(Note 3)54,171

Short-termloanspayable54,171

Subsidiary

Asahi
Holdings(Australia)
Pty Ltd
Asahi
Professional
Management
Co., Ltd.

100%
directownership

Interlockingof directors/
corporate
auditors
Interlockingof directors/
corporate
auditors

Guarantees
forliabilities(Note 4)
Outsourcing
indirect
services,
etc.
(Note 5)

15,650

–

–

4,137

–

–

Subsidiary100%
directownership

Terms and conditions of transaction and policy on determination thereof
Note 1: Operating revenue is determined in accordance with certain reasonable standards in order to provide
supervision, guidance 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 this fiscal year is stated.
Note 3: The interest rates for the deposits received and short-term loans payable are reasonably determined, taking
the market interest rate into consideration.
For the transaction amount, the amount of net increase (decrease) in this fiscal year is stated.
Note 4: The Company guaranteed bank loans in the amount of AUD177 million.
Note 5: The amount of outsourced indirect and other services is determined based on certain reasonable criteria.

22

7.

Notes to per share information(1) Net assets per share:(2) Earnings per share (Net income per share):8.

¥1,234.30¥144.01Other

The stated amounts are the figures after truncating fractions less than the representative unit.

23