CONVOCATION NOTICE OF THE 97th
ANNUAL GENERAL MEETING OF SHAREHOLDERS
Request to Refrain from Attending and Implementation of Limit on Admission in order toPrevent the Spread of the Novel Coronavirus Disease (COVID-19) and Ensure Safety
We strongly request that shareholders refrain from attending the General Meeting this year if possible and exercise voting
rights via either postal mail or the internet in advance.
• Please see pages 3 - 5 for details on how to exercise voting rights in advance.
• We plan on streaming the General Meeting live via the internet, and viewing will be restricted to shareholders. Please see page 6 for details.
We will implement a limit on admission to the venue of the General Meeting (pre-registration & lottery).
• Please see page 2 and the notice sent on February 24 for details regarding the limit on admission.
The provision of gifts at the General Meeting has been cancelled.

DATE AND TIME

March 25 (Thursday), 2021 at 1:00 p.m. (JST)DEADLINE FOR EXERCISING VOTING RIGHTS
VIA POSTAL MAIL AND INTERNET, ETC.
No later than 5:30 p.m., March 24 (Wednesday), 2021
(JST)

TABLE OF CONTENTS
Convocation Notice1

Reference Materials for General Meeting of Shareholders

7

Item 1

Appropriation of Retained Earnings

7

Item 2

Election of eight (8) Directors

8

Item 3

Election of one (1) Audit & Supervisory Board Member

21

English Translation of Original JapaneseBusiness Report
This is a translation of the original notice in Japanese. In theConsolidated Financial Statements
event of any discrepancy, the original notice in Japanese
shall prevail.
Non-Consolidated Financial Statements

ASAHI GROUP HOLDINGS, LTD.
Securities Code: 2502

Audit Reports

26
69
73
76

Dear Shareholders:
I would like to express my sympathies to those
who have been affected by COVID-19 and mycondolences to those who have lost their lives.
I would also like to express my sincere gratitude
to those who are doing their best, such as
medical professionals, those who are working
to prevent infection, and those who are working
to maintain social systems.
I hereby deliver this Convocation Notice of the97th Annual General Meeting of Shareholders.
We will be holding the General Meeting upontaking measures to ensure the safety ofshareholders and prevent the spread of infection,
taking the status of COVID-19 into
consideration.
We strongly request that shareholders refrainfrom attending the General Meeting this year if
possible and exercise voting rights via either
postal mail or the internet in advance.
I would like to ask that our shareholders
continue to give us their unwavering support.
Sincerely,
March 3, 2021

Akiyoshi Koji
President and Representative Director

ASAHI GROUP HOLDINGS, LTD.
23-1, Azumabashi 1-chome, Sumida-ku, Tokyo

CONVOCATION NOTICE OF
THE 97th ANNUAL GENERAL MEETING OF SHAREHOLDERS(1) DATE AND TIME
March 25 (Thursday), 2021, at 1:00 p.m. (JST) (Reception start time: Noon)(2) PLACE
Banquet Room “Tsuru,” Banquet Floor of “The Main” of Hotel New Otani,
4-1, Kioi-cho, Chiyoda-ku, Tokyo
We strongly request that shareholders refrain from attending the General Meeting this year if
possible and exercise voting rights via either postal mail or the internet in advance.
Please see pages 3 - 5 for details on how to
exercise voting rights in advance.

Deadline for exercising voting rights:
No later than 5:30 p.m., March 24, 2021 (JST)We will be live streaming the General Meeting via the internet on the day of the meeting.
► Please see page 6 for details.

1Implementation of a limit on admission to the General Meeting (pre-registration & lottery)
The number of seats at the General Meeting will be significantly reduced compared to previous years
as we will be putting more space between each seat in order to reduce the risk of infection.
Therefore, shareholders will need to pre-register in advance by applying for a seat at the General
Meeting.
In the event that applications exceed the seating capacity, we will implement a lottery system.
We ask that you carefully consider whether you wish to attend the General Meeting, and apply for preregistration if you do wish to attend.
The provision of gifts at the General Meeting has been cancelled.
◄ “Attendance Application Form” sent on February 24
Please confirm the materials provided with the“Attendance Application Form,” and in the event that you
wish to attend, fill in the designated items, affix the privacy
sticker provided, and send it via postal mail.

Application Deadline
To be received by March 11, 2021 (JST)

Only the shareholders who have applied for attendance and hold the “attendance card” and “voting
form for exercising voting rights” may attend.

Please understand that “shareholders who have not pre-registered,” “shareholders who were not selectedin the lottery,” and “shareholders who cannot confirm that they were selected upon attendance” will not
be allowed to enter the General Meeting venue.
March 16
Send “attendancecard” (postal mail)March 25
General Meetingof Shareholders

The lottery result will be sent toshareholders who were notselected on the same day.

Please present your“attendance card” and “voting
form for exercising voting
rights” at the reception desk.

(3) PURPOSES
Items to be reported:
Business Report, Consolidated Financial Statements, Non-Consolidated Financial
Statements and Reports of the audit results of the consolidated financial statements by
the Independent Accounting Auditor and the Audit & Supervisory Board for the 97th term,from January 1, 2020 to December 31, 2020.

Items to be resolved:
Item 1: Appropriation of Retained Earnings
Item 2: Election of eight (8) Directors
Item 3: Election of one (1) Audit & Supervisory Board Member
Note: Among attached materials to be provided with this notice, “Consolidated Statement of Changes
in Equity” and “Notes to the Consolidated Financial Statements” of the Consolidated Financial
Statements; and “Non-Consolidated Statement of Changes in Net Assets” and “Notes to the NonConsolidated Financial Statements” of the Non-Consolidated Financial Statements, are posted 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, and they are not attached to this notice.
Accordingly, the attached materials to this notice are part of the Consolidated Financial Statements
and Non-Consolidated Financial Statements, which have been audited by the Independent Accounting
Auditor in preparing their audit reports and Audit & Supervisory Board Members and Audit &Supervisory Board in preparing their audit reports.
If there are any corrections to Reference Materials for General Meeting of Shareholders, Business
Report, Consolidated Financial Statements, and Non-Consolidated Financial Statements, they will be
posted on the Company’s website.

Company’s website: https://www.asahigroup-holdings.com/en/2

Please exercise your voting rights, which is the right to participate in the Company’s management.

Guide to Exercising Voting Rights in AdvanceA voting right at the General Meeting of Shareholders is an important right that entitles
shareholders to participate in the Company’s management. Please refer to the following andexercise your voting rights by either method.

(1) Voting via Internet, etc.
Deadline for exercising voting rights via the internet, etc.:

By 5:30 p.m., March 24 (Wednesday), 2021 (JST)* The online voting website and Help Desk information are available onlyin Japanese.

For details on exercising voting rights via theinternet, etc., please refer to following pages.

(2) Voting via Postal Mail
Deadline for exercising voting rights via postal mail:To be received by 5:30 p.m., March 24 (Wednesday), 2021 (JST)Please indicate your consent/dissent concerning each item shown on the voting form, and sendback the form so that it will arrive no later than the deadline for exercising voting rights.

<Guide to filling in the voting form for exercising voting rights>
Please indicate your consent/dissent with respect
to each item here.
* If you exercise your voting rights in duplicate (i.e., voting
online as well as voting by using the voting form), only
the online vote will be counted.
* If you submit a voting form without indicating yourconsent/dissent with respect to each item, you will bedeemed to have voted in favor of the Company’s
proposal(s).
Items 1 and 3

If you consent:
Mark a ○ in theIf you dissent:
Mark a ○ in thebox marked “賛”box marked “否”

Item 2For all candidates,
if you consent:
Mark a ○ in theif you dissent:
Mark a ○ in thebox marked “賛”box marked “否”

If you selectively veto certain candidates:
Mark a ○ in the box marked “賛” and write thenumber of each candidate you choose to veto.

3

<Guide to exercising voting rights via the internet, etc.*>
Deadline for exercising voting rights via the Internet, etc.:

By 5:30 p.m., March 24 (Wednesday), 2021 (JST)* Institutional investors may use the platform operated for institutional investors by ICJ, Inc. to electronically exercise
the voting rights.

Method 1: “Smart Voting” Recommendation(1) If you intend to exercise your voting rights bysmartphone, you can simply exercise voting rights
without entering your voting code and password byscanning the QR code® located on the bottom rightof the voting form.

(2) Indicate your consent/dissent concerning each item by following
the instructions displayed on the screen.
Note

If you need to make a correction to the content of your vote after you haveexercised your voting rights, please access the website in accordance with
“Method 2: Entering voting code and password” noted below, login byentering your voting code and password, and correct your vote.

Method 2: “Entering voting code and password”
1

You can exercise your voting rights by accessing the online voting website
https://www.web54.net from a computer, smartphone or cellular phone, andentering the voting code and password.

2

Enter the “voting code” (議決権行使コード) indicated on the voting form.
Enter the “voting code” (議決権行使コード)
Voting code
Click on “Log in” (“ログイン”)

3

Enter the “password” (パスワード) indicated on the voting form.
Enter the “password” (パスワード)
Enter the new password that you will actually use
Password

Click on “Register” (“登録”)4* Please note that shareholders who received the Convocation Notice of the Annual General Meeting of Shareholders
for this fiscal year by e-mail will not find the “password” on your voting form. Such shareholders are asked to enter
the “password” that you set when registering your e-mail address.

4

Indicate your consent/dissent concerning each item by following the instructions
displayed on the screen.

* If you exercise your voting rights online more than once, only the most recent vote will becounted.

If you are unclear about the procedure for voting via the Internet using a computer, smartphoneor cellular phone, please contact the following Help Desk for inquiries.
Sumitomo Mitsui Trust Bank, Limited
Stock Transfer Web Support Phone Number
Toll-free (within Japan): 0120-652-031 (9:00 a.m. to 9:00 p.m. (JST))* “QR code” is a registered trademark of DENSO WAVE INCORPORATED.

To Receive the Notices by E-mailShareholders who wish to receive the convocation notices of Annual General Meetings ofShareholders by e-mail beginning with the next meeting may so register on the e-mail address
registration website noted below. Please note that the website cannot be accessed via cellular
phone.
E-mail address registration website: https://www.web5106.net

5

Guide to viewing the livestream via the internet

Video and sound of the 97th Annual General Meeting of Shareholders
will be livestreamed via the internet, and viewing will be restricted toshareholders. It is not necessary to apply in advance to view the
livestream, and you will be able to view it at your home, etc., so pleaseutilize this service.
Shareholders viewing the livestream will not be able to participate inresolutions on the day of the General Meeting. Please view after
exercising your voting rights in advance.
Note: The livestream and livestream website are available only inJapanese.
Date and time of the livestream

March 25 (Thursday), 2021, at 1:00 p.m. (JST)(It will be possible to connect before commencement from 12:30 p.m. (JST), and we plan on showing thevideo from 12:55 p.m. (JST). Before commencement, we will be running a viewing confirmation test
video.)How to view
1 Please access the “General Meeting of Shareholders livestream website” by using the URL
below or the QR code on the right with a computer, tablet or smartphone.

URL:

https://www.virtual-sr.jp/users/asahigroup/login.aspx

2 Please enter the ID and password below when the screen where you can enter your ID andpassword appears.
ID:
Shareholder number (9-digit number)
Password: Postal code registered in our shareholder directory (7-digit number without the hyphen)(Reference) Display position of ID and password on the voting form for exercising rights.

Shareholder number(9-digit number)

Postal code
(7-digit number)

3 You may view the livestream after following the on-screen instructions.

Notes to viewing the livestream• In consideration of the privacy of our shareholders, the livestream will only show the Directors and Audit& Supervisory Board Members’ seating area.
• The livestream may not be viewable depending on the internet connection environment used, theconnection status of the livestream and other factors.
• Shareholders will bear telecommunication charges in the event that they incur.
• Please refrain from taking photos, recording, or saving.
• Presenting the ID and password to a third party is strictly prohibited.

Post-meeting distribution
The video of the livestream will be available at “General Meeting of Shareholders” on the
Company’s website.
https://www.asahigroup-holdings.com/ir/shareholders_guide/shareholders_meeting.html
Date and time that the video will be made available: March 26 (Friday), 2021 at noon (JST) (Planned)
6

REFERENCE MATERIALS FOR GENERAL MEETING OF SHAREHOLDERS

Agenda Items and Reference Information
Item 1
Appropriation of Retained Earnings
The Company proposes the appropriation of retained earnings in the following manner:

Year-end dividends
Under the “Medium-Term Management Policy,” Asahi Group Holdings, Ltd. (the “Company”),
has been working toward enhancing “Glocal Value Creation Management” based on Asahi Group
Philosophy, and has been using the generated free cash flows for investing in foundation for growth
including M&A deals while seeking stronger financial conditions. Meanwhile, in terms ofshareholder returns, the Company’s policy is to stably increase dividends aiming to achieve a
dividend payout ratio* of 35% by fiscal year 2021.
Even with achievement impacted by the COVID-19 pandemic, we will seriously consider the
stable increase of dividends based on the aforementioned policy, and taking into consideration avariety of factors, including the Company’s consolidated financial condition, the Company
proposes a year-end dividend of ¥53 per share.
Since the Company previously paid out ¥53 per share as an interim-period dividend, the annual
dividend for this fiscal year will amount to ¥106 per share, which is an increase of ¥6 per share fromthe previous fiscal year, for a dividend payout ratio of 53.9%.
*

Dividend payout ratio is calculated based on profit attributable to owners of parent less a one-time profit or loss on the
restructuring of business portfolio, etc. (net of tax expenses).

(1) Type of dividend asset
Cash(2) Allocation of dividend assets to shareholders and total amount of allocation¥53 per share of common stock
Total amount of payout: ¥26,861,770,050(3) Effective date of dividends of Retained Earnings
March 26, 2021

7

Item 2

Election of eight (8) Directors

At the conclusion of this Annual General Meeting of Shareholders, the terms of office of all
Directors will expire.
To ensure balance and diversity in terms of the knowledge, experience, and ability of the entire
board deemed necessary for the sustainable growth and the increase of corporate value over the
medium- to long-term of the Company, the Company has decided that the Board of Directors is
to be composed of persons suitable as the Company’s Directors who have a wealth of experience,excellent insight, expertise, and ability required by the Company, with reference to the “Skill
Matrix of the Board of Directors,” which clearly states the personal requirements of company
officers based on the Asahi Group Philosophy, along with the Asahi Group Code of Conduct, andcorporate management strategy. Furthermore, Outside Directors shall be persons who meet therequirements of independent officers as defined by the Company such as corporate managers,
experts, and others, and at least 1/3 of the Directors.
The Company therefore asks the shareholders to elect the following eight (8) candidates to fill
the Director positions.
The nomination of the candidates for the positions of Director has been deliberated at thevoluntary “Nomination Committee,” of which independent officers form a majority of themembers and which is chaired by an Outside Director who is an independent officer.
Candidate
Number1

2

Name (Age)Akiyoshi Koji (69)
Reappointment

Atsushi Katsuki (61)Reappointment

3

Taemin Park (57)4

Keizo Tanimura (55)

5
6
7
8

Reappointment

Reappointment

Tatsuro Kosaka (68)
Reappointment Outside
Independent

Yasushi Shingai (65)
Reappointment Outside
Independent

Christina L. Ahmadjian (62)Reappointment Outside
Independent

Position and Responsibilities in the Company

Attended
Board ofDirectors
meetings

President and Representative Director, CEO
Overall Management
Corporate Communications
Research & Development

12/12

Senior Managing Director and Senior Managing
Executive Officer
CFO (Chief Financial Officer)
Senior Department Head of Japan Headquarters
Corporate Strategy
Finance
Supply Chain (procurement)
Alcoholic Beverages Business
Soft Drinks Business
Food Business

12/12

Director and Executive Officer
CAO (Chief Alliance Officer)
Alliance and M&AInternational Alcoholic Beverages Business
International Non-Alcohol Beverages Business

12/12

Director and Executive Officer
CHRO (Chief Human Resources Officer)
Administration and Governance
ESG

12/12

Outside Director

12/12

Outside Director

12/12

Outside Director

12/12

Ryoichi Kitagawa (57)–

New candidate

8–Skill Matrix of the Board of Directors
Decision Making Skill

Supervisory Skill

CandidateLong-term
Consideration
Management Finance,
GlocalPromotion of
Human
Number Outlook &ofof theAccounting
Management
Discontinuous
Resource
Strategic
Sustainability
Company’s & Internal
Skill
GrowthManagement
MindsetManagement
Business
Control

1

◯

◯

2

◯

◯

3

◯

◯

4

◯

◯

◯

5

◯

◯

◯

◯

◯

◯

6

◯

◯

◯

◯

◯

◯

7

◯

◯

◯

8

◯

◯

◯

◯

◯

◯

◯

◯

◯

◯

◯

◯

◯

◯
◯

◯

◯

Notes:
1.
The age, position and responsibilities are as of this Annual General Meeting of Shareholders.
2.

Attended Board of Directors meetings is the number of times the Director attended Board of Directors meetings held in
FY2020.

Reappointment: candidate for reappointment
New candidate: candidate for new appointment
Outside:candidate for Outside Director
Independent:

candidate for independent officer

9Candidate
Number1

Akiyoshi Koji
Reappointment

Date of Birth (Age): November 8, 1951 (69 years old)
Owned Shares of the Company:
16,500 shares
Tenure (at the conclusion of this Annual General
Meeting of Shareholders):
14 years
Attended BOD* meetings (FY2020):
12/12

Reasons for recommending Akiyoshi Koji as a candidate for Director
Since being appointed a Director of the Company in 2007, Akiyoshi Koji has served as President
and Representative Director of Asahi Breweries, Ltd., President and Representative Director, COO
of the Company, and since 2018, President and Representative Director, CEO. He has beenpromoting sustainable growth and increased corporate value over the medium- to long-term byconstructing a growth platform through the dramatic expansion of overseas business and revisionof business portfolio, as well as giving overall direction of the Company’s management throughthe establishment of a new group philosophy and group code of conduct. In this fiscal year inparticular, he has a track record that includes maintaining and enhancing competitiveness bystrengthening regional headquarter function in response to the globalization of the Company, suchas by integration with an Australian alcoholic beverage business and reorganization of theEuropean beer business, and the issuance of new shares through public offering for the first timein 30 years.
Furthermore, he sufficiently possesses the insight, expertise, and ability required as a Director of
the Company due to his experience as a top management of the Company over many years. In
particular, he possesses insight and expertise regarding the management of the Company’s businessand finance, accounting & internal control, glocal management skill which is supported byforesight, decisiveness, and executive ability, and management competence in the promotion of
discontinuous growth. In addition, he possesses a high level of diversified oversight of businessexecution for sustainable management, such as long-term outlook & strategic mindset, and theability to continue to search for the appropriate governance vision.
Accordingly, we deem that Akiyoshi Koji is a necessary human resource who is indispensable tothe composition of the Board of Directors as a member of the Board who has diverse insight,
expertise, and capabilities for increasing the effectiveness of the decision-making and oversightfunctions of the Board of Directors, and thus we recommend his reappointment as a Director.
President and Representative Director, CEO
Position
Responsibilities Overall Management
Corporate Communications, Research & Development
Career Summary
Apr. 1975
Joined the Company
Sep. 2001
Executive Officer
Mar. 2003
Managing Director, Senior Department Head of Planning Division of
Asahi Soft Drinks Co., Ltd.
Mar. 2006
Senior Managing Director, Senior Department Head of Planning Division of
Asahi Soft Drinks Co., Ltd.
Mar. 2007
Managing Director, Managing Executive Officer of the Company
Jul. 2011
Director of the Company
President and Representative Director of Asahi Breweries, Ltd.
Mar. 2016
President and Representative Director, COO of the Company
Mar. 2018
President and Representative Director, CEO(to the present)
Significant Concurrent Positions Outside Director of Imperial Hotel, Ltd.
Candidate’s special interests in the Company
There are no special interests between Akiyoshi Koji and the Company.
*BOD stands for Board of Directors.

10Candidate
Number2

Atsushi Katsuki
Reappointment

Date of Birth (Age): March 17, 1960 (61 years old)
Owned Shares of the Company:
2,598 shares
Tenure (at the conclusion of this Annual General
Meeting of Shareholders):
4 years
Attended BOD meetings (FY2020):
12/12

Reasons for recommending Atsushi Katsuki as a candidate for Director
Since being appointed a Director of the Company in 2017, Atsushi Katsuki has been responsible
for alliances & M&As and many domestic and overseas businesses, and has a track record that
includes promoting the restructuring of the business portfolio. In this fiscal year in particular, he isserving as Senior Managing Director, Senior Managing Executive Officer, is responsible forfinance, management strategy, and the domestic Alcoholic Beverages Business, Soft Drinks
Business, and Food Business as a CFO, and he played an important role in the issuance of newshares through public offering for the first time in 30 years, making use of his high expertise andknowledge of global management as a CFO. He also has a track record that includes sophisticating
cash flow management, which is vital to the Company’s sustainable growth and enhancement ofcorporate value over the medium- to long-term, and taking the lead for business performancerecovery for domestic businesses under the environment of the global spread of COVID-19 as
Senior Department Head of Japan Headquarters.
Furthermore, he sufficiently possesses the insight, expertise, and ability required as a Director of
the Company through his experience as Group CEO of an overseas Regional Head Quarters. In
particular, he has a high level of insight and expertise regarding the management of the Company’sbusiness and finance, accounting & internal control, a high level of the ability to include diverseand different cultures, a high level of the ability to promote discontinuous growth, which utilizes
his insight in M&As, and a high level of long-term outlook & strategic mindset and glocal
management skill which takes open mindedness into consideration.
Accordingly, we deem that Atsushi Katsuki is a necessary human resource who is indispensable tothe composition of the Board of Directors as a member of the Board who has diverse insight,
expertise, and capabilities for increasing the effectiveness of the decision-making and oversightfunctions of the Board of Directors, and thus we recommend his reappointment as a Director.
Senior Managing Director and Senior Managing Executive Officer,
Position
CFO (Chief Financial Officer)
Responsibilities Senior Department Head of Japan Headquarters
Corporate Strategy, Finance, Supply Chain (procurement)
Alcoholic Beverages Business, Soft Drinks Business, Food Business
Career Summary
Apr. 1984
Joined The Nikka Whisky Distilling Co., Ltd
Sep. 2002
Transferred to the Company
Oct. 2011
Managing Director of Asahi Holdings (Australia) Pty Ltd
Apr. 2014
Director, Group CEO of Asahi Holdings (Australia) Pty Ltd
Mar. 2016
Executive Officer of the Company
Director, Group CEO of Asahi Holdings (Australia) Pty Ltd
Mar. 2017
Director, Executive Officer of the Company
Mar. 2018
Managing Director, Managing Executive Officer
Mar. 2020
Senior Managing Director and Senior Managing Executive Officer(to the present)
Candidate’s special interests in the Company
There are no special interests between Atsushi Katsuki and the Company.

11

Candidate
Number3

Taemin Park
Reappointment

Date of Birth (Age): January 25, 1964 (57 years old)
Owned Shares of the Company:
61 shares
Tenure (at the conclusion of this Annual General
Meeting of Shareholders):
2 years
Attended BOD meetings (FY2020):
12/12

Reasons for recommending Taemin Park as a candidate for Director
Since being appointed as a Director of the Company in 2019, Taemin Park’s responsibilities haveincluded alliances and M&As and overseas business. His track record includes promoting thetransformation of the Oceania business into a steady growth engine, and in this fiscal year inparticular, succeeding in integrating with an Australian alcoholic beverage business andreorganizing the European beer business using his high level of expertise and capabilities as the
Director responsible for alliances and M&As.
Furthermore, he sufficiently possesses the insight, expertise, and ability required as a Director of
the Company due to his extensive experience in overseas business over many years, including inalliances and M&As and as Director of overseas Regional Head Quarters. In particular, he has ahigh level of insight and expertise regarding the management of the Company’s business, such as
trends and new movements in the overseas alcoholic beverages and non-alcohol beverages
industries, a high level of glocal management skill for envisaging business formations centered onalliances and M&As as well as decision making, and a high level of the ability to promote
discontinuous growth.
Accordingly, we deem that Taemin Park is a necessary human resource who is indispensable to thecomposition of the Board of Directors as a member of the Board who has diverse insight, expertise,and capabilities for increasing the effectiveness of the decision-making and oversight functions of
the Board of Directors, and thus we recommend his reappointment as a Director.
Director and Executive Officer, CAO (Chief Alliance Officer)
Position
Responsibilities Alliance and M&AInternational Alcoholic Beverages Business, International Non-Alcohol
Beverages Business
Career Summary
Apr. 1991
Joined Hitachi, Ltd.
Apr. 2003
Joined Renesas Technology Corp. (current Renesas Electronics Corporation)
Jul. 2005
Joined the Company
Apr. 2015
Senior Officer of the Company
Director of Asahi Group Holdings Southeast Asia Pte. Ltd.
Mar. 2016
Senior Officer, General Manager of Business Development Section of theCompany
Mar. 2017
Executive Officer, General Manager of Business Development Section
Mar. 2019
Director, Executive Officer(to the present)
Candidate’s special interests in the Company
There are no special interests between Taemin Park and the Company.

12

Candidate
Number4

Keizo Tanimura
Reappointment

Date of Birth (Age): August 11, 1965 (55 years old)
Owned Shares of the Company:
5,123 shares
Tenure (at the conclusion of this Annual General
Meeting of Shareholders):
2 years
Attended BOD meetings (FY2020):
12/12

Reasons for recommending Keizo Tanimura as a candidate for Director
Since being appointed as a Director of the Company in 2019, Keizo Tanimura’s responsibilities
have included administration and governance (Human Resources, Legal Affairs, General Affairs,
IT, and Audit). His track record includes promoting the creation of a succession planning system(education and placement) for the Group’s executives and the construction of a system for humanresources and compensation policy, and as the director responsible for governance, he has also
promoted reinforcement of the operating foundation for increasing the effectiveness of the Boardof Directors. In this fiscal year in particular, he strengthened risk management under the global
spread of COVID-19, and strengthened the foundation for the Company’s sustainable growth andincreased corporate value in the medium- to long-term.
Furthermore, he sufficiently possesses the insight, expertise, and ability required as a Director of
the Company through his extensive experience at multiple companies, including as Director of an
overseas Regional Head Quarters. In particular, he has a high level of insight and expertise
regarding human resource management and governance from a global perspective, a high level ofthe ability to include diverse and different cultures, and a high level of consideration ofsustainability management.
Accordingly, we deem that Keizo Tanimura is a necessary human resource who is indispensable tothe composition of the Board of Directors as a member of the Board who has diverse insight,
expertise, and capabilities for increasing the effectiveness of the decision-making and oversightfunctions of the Board of Directors, and thus we recommend his reappointment as a Director.
Director and Executive Officer, CHRO (Chief Human Resources Officer)
Position
Responsibilities Administration and Governance, ESG
Career Summary
Apr. 1989
Joined the Company
Apr. 2016
Senior Officer, General Manager of Human Resources Section
Mar. 2017
Executive Officer, General Manager of Human Resources Section
Sep. 2018
Executive Officer responsible for Global and Local Talent Management
Mar. 2019
Director, Executive Officer(to the present)
Candidate’s special interests in the Company
There are no special interests between Keizo Tanimura and the Company.

13

Candidate
Number5

Tatsuro Kosaka
Reappointment

Outside Director

Independent Director

Date of Birth (Age): January 18, 1953 (68 years old)
Owned Shares of the Company:― shares
Tenure (at the conclusion of this Annual General
Meeting of Shareholders):
5 years
Attended BOD meetings (FY2020):
12/12

Reasons for recommending Tatsuro Kosaka as a candidate
for Outside Director
Since being appointed as an Outside Director of the Company in 2016, Tatsuro Kosaka has used
his extensive experience, including as a CEO of a global company, to provide appropriate oversightfor business execution through active opinions and recommendations. In particular, he has
contributed to increasing the effectiveness of the Board of Directors by providing opinions andrecommendations based on his experience and insight, and through dialogue, from perspectives
including global management, group governance, and ESG. Also, as the chairperson of theNomination Committee, he has played a leading role in making fair and transparent decisions on
succession plans for management team including the CEO and on personnel affairs of officers.
Furthermore, he possesses a high level of insight, expertise, and ability required as an Outside
Director of the Company due to his extensive experience in corporate management over many
years.
Accordingly, we deem that Tatsuro Kosaka is a necessary human resource who is indispensable tothe composition of the Board of Directors, mainly to provide a supervisory function from amanagement perspective based on his high level of corporate management capability, forincreasing the effectiveness of the decision-making and oversight functions of the Board of
Directors, and thus we recommend his reappointment as an Outside Director.
Outside Director
Position
Career Summary
Apr. 1976
Joined Chugai Pharmaceutical Co., Ltd.
Oct. 2002
Vice President, General Manager of Corporate Planning Dept. of Chugai
Pharmaceutical Co., Ltd.
Oct. 2004
Senior Vice President, General Manager of Corporate Planning Dept. of Chugai
Pharmaceutical Co., Ltd.
Mar. 2005
Senior Vice President, Deputy Managing Director of Sales & Marketing Group of
Chugai Pharmaceutical Co., Ltd.
Jul. 2005
Senior Vice President, Head of Strategic & Marketing Unit of Chugai
Pharmaceutical Co., Ltd.
Mar. 2008
Senior Vice President, Head of Lifecycle Management & Marketing Unit of
Chugai Pharmaceutical Co., Ltd.
Mar. 2010
Director, Executive Vice President of Chugai Pharmaceutical Co., Ltd.
Mar. 2012
Representative Director, President of Chugai Pharmaceutical Co., Ltd.
Mar. 2016
Director of the Company(to the present)
Mar. 2020
Representative Director, Chairman & CEO of Chugai Pharmaceutical Co., Ltd.
(to the present)
Significant Concurrent Positions Representative Director, Chairman & CEO of Chugai
Pharmaceutical Co., Ltd.
Candidate’s special interests in the Company
There are no special interests between Tatsuro Kosaka and the Company.

14Views on independence
The Group maintains transactional relationships with neither Tatsuro Kosaka nor entities
where he concurrently serves, and based on the “Criteria for independence of Outside
Directors and Outside Audit & Supervisory Board Members” which have been established by
the Company as a means of objectively assessing independence thereof, the Company has
deemed that he maintains sufficient independence with no potential for conflict of interests
with general shareholders. Moreover, as Tatsuro Kosaka meets the requirements forindependent officers as defined by the Tokyo Stock Exchange, we have registered him as anindependent officer as stipulated by the said Exchange.
Regarding agreements limiting the liability
To enable him to contribute fully in his role as an Outside Director, the Company has enteredinto an agreement with Tatsuro Kosaka that limits his liability for damages as prescribed in
Paragraph 1, Article 423 of the Companies Act. Under the terms of this agreement, his
liabilities are limited to ¥20 million or to the minimum limited amount stipulated byapplicable laws and regulations, whichever is higher. If his election is approved, the current
agreement will be extended.

15

Candidate
Number6

Yasushi Shingai
Reappointment

Outside Director

Independent Director

Date of Birth (Age): January 11, 1956 (65 years old)
Owned Shares of the Company:― shares
Tenure (at the conclusion of this Annual General
Meeting of Shareholders):
3 years
Attended BOD meetings (FY2020):
12/12

Reasons for recommending Yasushi Shingai as a candidate
for Outside Director
Since being appointed as an Outside Director of the Company in 2018, Yasushi Shingai has used
his extensive experience, including as Executive Deputy President and CFO of a global company
and Deputy CEO of an overseas business headquarters company, to provide appropriate oversightfor business execution through active opinions and recommendations. In particular, he has
contributed to increasing the effectiveness of the Board of Directors by providing opinions andrecommendations based on his experience and insight, and through dialogue, from perspectives
including group governance, ESG, and management strategies in the ultra-long term. Also, as thechairperson of the Compensation Committee, he has played a leading role in making fair andtransparent decisions on verification of adequacy and effectiveness of an officers’ remuneration
plan and implementation of the plan (determining bonus amounts, etc.). Furthermore, he possesses
a high level of insight, expertise, and ability required as an Outside Director of the Company due
to his extensive experience in corporate management over many years.
Accordingly, we deem that Yasushi Shingai is a necessary human resource who is indispensable tothe composition of the Board of Directors, mainly to provide a supervisory function from a
progressive and wide-ranging global management perspective for increasing the effectiveness ofthe decision-making and oversight functions of the Board of Directors, and thus we recommend
his reappointment as an Outside Director.
Outside Director
Position
Career Summary
Apr. 1980
Joined Japan Tobacco and Salt Public Corporation (current Japan Tobacco Inc.)
Jul. 2001
Vice President of Financial Planning Division of Japan Tobacco Inc.
Jun. 2004
Senior Vice President, Head of Finance Group of Japan Tobacco Inc.
Jul. 2004
Senior Vice President, Chief Financial Officer of Japan Tobacco Inc.
Jun. 2005
Member of the Board, Senior Vice President, and Chief Financial Officer of Japan
Tobacco Inc.
Jun. 2006
Member of the Board of Japan Tobacco Inc.,
Executive Vice President of JT International S.A.
Jun. 2011
Executive Deputy President and Representative Director of Japan Tobacco Inc.
Jan. 2016
Executive Deputy President, Deputy Chief Executive Officer and Representative
Director of Japan Tobacco Inc.
Jan. 2018
Member of the Board of Japan Tobacco Inc.
Mar. 2018
Director of the Company(to the present)
Significant Concurrent Positions Outside Director of Mitsubishi UFJ Financial Group, Inc.
Outside Director of Dai-ichi Life Holdings, Inc.
Candidate’s special interests in the Company
There are no special interests between Yasushi Shingai and the Company.

16Views on independence
Although the Group maintains transactional relationships with a group company of Japan
Tobacco Inc., where Yasushi Shingai served as an Executive Director, the amounts involved insuch transactions account for less than 1% of the consolidated revenue (or consolidated net
sales) of the Company and the said group company of Japan Tobacco Inc. As such, based on
the “Criteria for independence of Outside Directors and Outside Audit & Supervisory Board
Members” which have been established by the Company as a means of objectively assessing
independence thereof, the Company has deemed that he maintains sufficient independencewith no potential for conflict of interests with general shareholders. Moreover, as Yasushi
Shingai meets the requirements for independent officers as defined by the Tokyo Stock
Exchange, we have registered him as an independent officer as stipulated by the said
Exchange.
Regarding agreements limiting the liability
To enable him to contribute fully in his role as an Outside Director, the Company has enteredinto an agreement with Yasushi Shingai that limits his liability for damages as prescribed in
Paragraph 1, Article 423 of the Companies Act. Under the terms of this agreement, his
liabilities are limited to ¥20 million or to the minimum limited amount stipulated byapplicable laws and regulations, whichever is higher. If his election is approved, the current
agreement will be extended.

17Candidate
Number7

Christina L. Ahmadjian
Reappointment

Outside Director

Independent Director

Date of Birth (Age): March 5, 1959 (62 years old)
Owned Shares of the Company:― shares
Tenure (at the conclusion of this Annual General
Meeting of Shareholders):
2 years
Attended BOD meetings (FY2020):
12/12

Reasons for recommending Christina L. Ahmadjian as a candidate
for Outside Director
Since being appointed as an Outside Director of the Company in 2019, Christina L. Ahmadjian has
used her extensive experience as a university professor and an expert in the fields of corporate
governance and organization culture to provide appropriate oversight for business execution
through active opinions and recommendations. In particular, she has contributed to increasing theeffectiveness of the Board of Directors by providing opinions and recommendations, and dialogue,
from perspectives including ESG, covering the Environment, Social, and Governance mattersoverall, and organization culture, and a global point of view. Also, as a member of theCompensation Committee, she has contributed to making fair and transparent decisions on
verification of adequacy and effectiveness of an officers’ remuneration plan, and implementationof the plan (determining bonus amounts, etc.).
Furthermore, she possesses a high level of insight, expertise, and ability required as an Outside
Director of the Company due to her research into corporate governance and organizational culture
and her experience serving as an outside director in multiple companies.
Accordingly, we deem that Christina L. Ahmadjian is a necessary human resource who is
indispensable to the composition of the Board of Directors, mainly to provide a supervisory
function from the perspective of an expert on global organizational culture and other matters forincreasing the effectiveness of the decision-making and oversight functions of the Board of
Directors, and thus we recommend her reappointment as an Outside Director.
Outside Director
Position
Career Summary
Jan. 1995
Assistant Professor, Columbia Business School
Oct. 2001
Associate Professor, Graduate School of International Corporate Strategy,
Hitotsubashi University
Jan. 2004
Professor, Graduate School of International Corporate Strategy, Hitotsubashi
University
Apr. 2010
Dean of Graduate School, Graduate School of International Corporate Strategy,
Hitotsubashi University
Apr. 2012
Professor, Graduate School of Commerce and Management, Hitotsubashi
University
Apr. 2018
Professor, Graduate School of Business Administration, Hitotsubashi University(to the present)
Mar. 2019
Director of the Company(to the present)
Significant Concurrent Positions Professor of Graduate School of Business Administration,
Hitotsubashi University
Outside Director of Mitsubishi Heavy Industries, Ltd.
Outside Director of Japan Exchange Group, Inc.
Outside Director of Sumitomo Electric Industries, Ltd.
Candidate’s special interests in the Company
There are no special interests between Christina L. Ahmadjian and the Company.

18Views on independence
The Group maintains transactional relationships with neither Christina L. Ahmadjian nor
Hitotsubashi University where she concurrently serves, and based on the “Criteria for
independence of Outside Directors and Outside Audit & Supervisory Board Members” whichhave been established by the Company as a means of objectively assessing independence
thereof, the Company has deemed that she maintains sufficient independence with no potential
for conflict of interests with general shareholders. Moreover, as Christina L. Ahmadjian meetsthe requirements for independent officers as defined by the Tokyo Stock Exchange, we haveregistered her as an independent officer as stipulated by the said Exchange.
Regarding agreements limiting the liability
To enable her to contribute fully in her role as an Outside Director, the Company has enteredinto an agreement with Christina L. Ahmadjian that limits her liability for damages asprescribed in Paragraph 1, Article 423 of the Companies Act. Under the terms of thisagreement, her liabilities are limited to ¥20 million or to the minimum limited amountstipulated by applicable laws and regulations, whichever is higher. If her election is approved,
the current agreement will be extended.

19Candidate
Number8

Ryoichi Kitagawa
New candidate

Date of Birth (Age): June 29, 1963 (57 years old)
Owned Shares of the Company:
4,681 shares

Reasons for recommending Ryoichi Kitagawa as a candidate for Director
Ryoichi Kitagawa was appointed a Director of the Company in 2016, and played an important rolein the acquisition of the beer business in Western Europe and Central and Eastern Europe. From
2017, as a Managing Executive Officer, he played an important role in the Europe business that
was acquired through the use of his high expertise and knowledge of global management inaddition to having a track record that includes leading the reorganization of the European beerbusiness in 2020.
Furthermore, he sufficiently possesses the insight, expertise, and ability required as a Director of
the Company through his experience. In particular, he has a high level of insight and expertise
regarding the management of the Company’s business and finance, accounting & internal control,a high level of glocal management skill, and a high level of management competence in the
promotion of discontinuous growth.
Accordingly, we deem that Ryoichi Kitagawa is a necessary human resource who is indispensable
to the composition of the Board of Directors as a member of the Board who has diverse insight,
expertise, and capabilities for increasing the effectiveness of the decision-making and oversightfunctions of the Board of Directors, and thus we newly recommend his appointment as a Director.
Career Summary
May 1987
Joined Hokkaido Asahi Breweries Co., Ltd.
Sep. 1993
Transferred to the Company
Apr. 2013
Senior Officer, General Manager of Business Development Section
May 2013
Senior Officer, General Manager of Business Development Section, General
Manager of International Business Section
Sep. 2013
Senior Officer, General Manager of Business Development Section
Mar. 2014
Executive Officer, General Manager of Business Development Section
Mar. 2016
Director and Executive Officer
Mar. 2017Managing Executive Officer(to the present)
Candidate’s special interests in the Company
There are no special interests between Ryoichi Kitagawa and the Company.

20

Item 3

Election of one (1) Audit & Supervisory Board Member

At the conclusion of this Annual General Meeting of Shareholders, the term of office of Audit& Supervisory Board Member Yutaka Kawakami will expire.
To ensure balance and diversity in terms of the knowledge, experience, and ability for the entire
Audit & Supervisory Board deemed necessary for sustainable growth and the increase of
corporate value of the Company over the medium- to long-term, the Company has decided that
the Audit & Supervisory Board is to be composed of suitable persons reflecting the requirementsof Directors and Audit & Supervisory Board Members derived from the group philosophy, the“Asahi Group Philosophy,” the Asahi Group Code of Conduct, and management strategy, and that
the Audit & Supervisory Board will include at least 1 Audit & Supervisory Board Member with
an appropriate knowledge of finance/accounting and at least 1 Audit & Supervisory Board
Member with an appropriate knowledge of legal affairs. Furthermore, 3 of the Audit &Supervisory Board Members will be Outside Audit & Supervisory Board Members who meet therequirements for independent officers which have been established by the Company, and beelected from among accounting experts, lawyers and corporate managers who possess abundant
experience and comprehensive knowledge in relevant fields.
The Company therefore asks the shareholders to elect the following one (1) candidate to fill the
Audit & Supervisory Board Member position.
This proposal is submitted with the prior consent of the Audit & Supervisory Board.

21

Candidate for Audit & Supervisory Board Member

Yutaka Kawakami
Reappointment
Outside Audit & Supervisory Board Member
Independent Audit & Supervisory Board Member

Date of Birth (Age): June 13, 1952 (68 years old)
Owned Shares of the Company:― shares
Tenure (at the conclusion of this Annual General
Meeting of Shareholders):
4 years
Attended BOD meetings (FY2020):
12/12
Attended ASB* meetings (FY2020):
13/13

Reasons for recommending Yutaka Kawakami as a candidate for
Outside Audit & Supervisory Board Member
Yutaka Kawakami has the expert knowledge related to accounting necessary for an Audit &Supervisory Board Member of the Company, and has a high level of insight for auditing
management that comes from abundant audit experience in Japan and overseas, which were gained
through activities over many years as an experienced certified public accountant who is well versedin accounting audits of global corporations. Furthermore, through active opinions andrecommendations as an Outside Audit & Supervisory Board Member, he has provided appropriate
auditing of the duties of the Directors of the Company.
Accordingly, we deem that Yutaka Kawakami is a necessary human resource for strengthening thefunctions of the Company’s Audit & Supervisory Board in the aim for sustainable growth andenhancement of corporate value over the medium- to long-term, and thus we recommend his
reappointment as an Outside Audit & Supervisory Board Member.
Outside Audit & Supervisory Board Member
Position
Career Summary
Feb. 1976
Joined Tohmatsu Awoki & Co. (current Deloitte Touche Tohmatsu LLC)
Mar. 1980
Registered as certified public accountant
Jun. 1990
Partner of Tohmatsu & Co.
Jun. 2007
Member of Management Council, General Manager of Human Resources
Department of Deloitte Touche Tohmatsu
Sep. 2016Retired from Deloitte Touche Tohmatsu LLC
Mar. 2017
Audit & Supervisory Board Member of the Company(to the present)
Significant Concurrent Positions Outside Audit & Supervisory Board Member of Mitsubishi
Research Institute, Inc.
Supervisory Director of Nippon Building Fund Inc.
Candidate’s special interests in the Company
There are no special interests between Yutaka Kawakami and the Company.

22Views on independence
The Group maintains transactional relationships with neither Yutaka Kawakami nor entities
where he concurrently serves, and based on the “Criteria for independence of Outside
Directors and Outside Audit & Supervisory Board Members” which have been established by
the Company as a means of objectively assessing independence thereof, the Company has
deemed that he maintains sufficient independence with no potential for conflict of interests
with general shareholders. Moreover, as Yutaka Kawakami meets the requirements forindependent officers as defined by the Tokyo Stock Exchange, we have registered him as anindependent officer as stipulated by the said Exchange.
Regarding agreements limiting the liability
To enable him to contribute fully in his role as an Outside Audit & Supervisory Board
Member, the Company has entered into an agreement with Yutaka Kawakami that limits his
liability for damages as prescribed in Paragraph 1, Article 423 of the Companies Act. Under
the terms of this agreement, his liabilities are limited to ¥20 million or to the minimum limited
amount stipulated by applicable laws and regulations, whichever is higher. If his election isapproved, the current agreement will be extended.
*ASB stands for Audit & Supervisory Board.
Note to Item 3: The age and position are as of this Annual General Meeting of Shareholders.

23[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 theindependence 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 the Company 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 the Company (herein
this section collectively referred to as the “Group”) or has served as an executive of theGroup in the past;
2. A party for whom the Group is a major business partner*2 (or if the business partner is anincorporated entity, an executive thereof);
3. A party who is a major business partner of the Group*3 (or if the business partner is anincorporated entity, an executive thereof);
4. A consultant, certified public accountant or other accounting professional, or an attorney atlaw or other legal professional who has been paid substantial amounts of money or otherfinancial benefits*4 other than Directors’ and Audit & Supervisory Board Members’
remuneration paid by the Group (or if the party receiving such financial benefits is anincorporated entity, association or other organization, then persons belonging to suchorganization);
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 an incorporated 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-assumption of office ofOutside 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 other organization, then an executive
thereof);
10. A close relative*9 of a party who falls under any of the above items from 1 to 9 (limited toimportant persons*8, with the exception of item 1);
11. A party who has fallen under any of the above items from 2 to 10 during the past five (5)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 with respect to whomthere are special grounds for deeming there to be potential for conflict of interests withgeneral shareholders.
*1. “Executive” refers to an executive as defined in Item 6, Paragraph 3, Article 2 of the Regulation for Enforcementof 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 whose transactions 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 whose transactions 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% or more of the Company’s consolidated total assets as of the end of the most recent
fiscal year.
*4. “Substantial amounts of money or other financial benefits” refers to money and other financial benefits
amounting to 10 million yen or more annually, excluding Directors’ and Audit & Supervisory Board Members’
remuneration, for the most recent fiscal year (if such financial benefits are obtained by an incorporated entity,
association or other organization, it refers to money or other financial benefits amounting to 2% or more of such24

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 theCompany’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. “Important person” refers to Directors (excluding Outside Directors), executive officers, Executive Officers, andother 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 inpositions of similar importance.
*9. “Close relative” refers to a spouse or persons within the second degree of consanguinity.
*10. “Tenure of Outside Directors/Audit & Supervisory Board Members stipulated by the Company” means ten (10)years with respect to Directors and twelve (12) years with respect to Audit & Supervisory Board Members.

25

(Attached Materials)| BUSINESS REPORT (From January 1, 2020 to December 31, 2020)

1

Overview of Operations of the Asahi Group(1) Business Progress and Results
During this fiscal year, although the global economy showed a gradual recovery earlier this year,
it deteriorated sharply due to the restriction on the economic activities caused by the spread of COVID19, and other factors, and remained in an extremely difficult condition. Japan’s economy was also hard
hit by lower consumer spending and exports due to the spread of COVID-19 in Japan and thedeterioration of the global economy.
Under these circumstances, the Asahi Group worked on promoting its “Glocal Value Creation
Management” based on the “Medium-Term Management Policy,” and enhanced the value of ourmainstay brands in each business segment and shored up the new value proposition while addressing
COVID-19.
As our countermeasures against COVID-19, while prioritizing the health of the employees andtheir families, the Asahi Group implemented marketing strategies catering to the changes of the market
environment and the consumer needs and at the same time secured financial soundness by such means
as limiting capital expenditures and fixed costs and improving working capital efficiency. We also
acted as a responsible company toward our stakeholders by supporting our partners and local
communities.
However, due to factors such as the negative effect of the economic stagnation caused by the
downturn of the food service industry and the stay-at-home restrictions worldwide, revenue of the
Asahi Group for FY2020 decreased by 2.9% year-on-year to ¥2,027,762 million. Core operating
profit*1 decreased by 21.2% year-on-year to ¥167,823 million, and operating profit fell by 32.9% to¥135,167 million. Profit attributable to owners of parent totaled ¥92,826 million, a decrease of 34.7%
year-on-year.
Furthermore, excluding the effects of exchange rate fluctuations, revenue decreased by 2.6%
year-on-year and core operating profit decreased by 21.1% year-on-year.*2*1. Core operating profit is the Company’s original indicator of profit, which measures the ordinary business earnings
calculated by deducting cost of sales and selling, general and administrative expenses from revenue.
*2. Foreign currency amounts in 2020 are compared after conversion to the yen equivalent using the 2019 exchange
rate.

■

Asahi Group’s Earnings

Note: The Asahi Group has adopted International Financial Reporting Standards (IFRS).

26

| Financial and Profit/Loss Indicators of the Asahi Group |94th term
FY201795th term
FY201896th term
FY20192,084,877

2,120,291

2,089,048

Core operating profit

196,368

221,383

212,971

Operating profit

183,192

211,772

201,436

Profit attributable to owners ofparent141,003

151,077

142,207

8.8

10.0

9.6

EBITDA*1

285,394

318,463

304,848

Basic earnings per share*2

307.78329.80310.44

Total assets

3,346,822

3,079,315

3,140,788

Total equity

1,152,748

1,149,647

1,248,279

2,499.62

2,502.67

2,720.76

Revenue

Operating profit ratio

Equity attributable to owners ofparent per share*3
ROE(Profit ratio to equity attributableto owners of parent)

13.2

11.9

120,133

150,688

142,207

Adjusted earnings per share

262.23328.95

310.44

Adjusted ROE (Adjusted profit
ratio to equity attributable toowners of parent)*6

13.7

15.2

13.0

*5

*1.
*2.

*3.

*4.
*5.
*6.

92,826(%)
6.7(million yen)
269,446(yen)
196.52(million yen)
4,439,378(million yen)
1,517,816(yen)
2,992.06(%)

14.2

Adjusted profit attributable toowners of parent*4

97th term
FY2020(current year)(million yen)
2,027,762(million yen)
167,823(million yen)
135,167(million yen)

6.7
(million yen)
92,826(yen)
196.52(%)
7.5

EBITDA is equal to the sum of core operating profit and amortization and depreciation.
Basic earnings per share is calculated based on the average total number of shares outstanding during the term.
The total number of shares outstanding is exclusive of treasury shares. The shares of the Company held by
Custody Bank of Japan, Ltd. as trust property for stock compensation are included in the treasury shares to be
deducted in the calculation for the 95th term (FY2018) and subsequent periods.
Equity attributable to owners of parent per share is calculated based on the total number of shares outstanding at
the end of the fiscal year. The total number of shares outstanding is exclusive of treasury shares. The shares of
the Company held by Custody Bank of Japan, Ltd. as trust property for stock compensation are included in thetreasury shares to be deducted in the calculation for the 95th term (FY2018) and subsequent periods.
Adjusted profit attributable to owners of parent is profit attributable to owners of parent less a one-time profit orloss on the restructuring of business portfolio (net of tax expenses), etc.
Adjusted earnings per share is calculated based on adjusted profit attributable to owners of parent.
Adjusted ROE is calculated based on adjusted profit attributable to owners of parent divided by total equity
attributable to owners of parent (net of exchange differences on translation of foreign operations, and changes,
etc. of fair value of investment in financial assets measured at fair value through other comprehensive income).

27

| Overview by Business Segment for 97th Term |Asahi Group Revenue by Business Segment

96th term
FY2019(million yen)

97th term
FY2020(current year)(million yen)

Change inamount(million yen)

Alcoholic Beverages

886,860

758,270(128,589)(14.5)

Soft Drinks*1

376,867

353,381(23,486)(6.2)

Food*1

128,966

123,486(5,480)(4.2)

Overseas*1

698,546

792,956

94,409

13.5

Other*1

97,707

93,155(4,552)(4.7)

Adjustment*2(99,900)(93,488)

6,412–

2,089,048

2,027,762(61,285)(2.9)

Business Segment

Total

Change inpercentage(%)*1. In line with the business reorganization in the 97th term (FY2020), the Company changed classification of certain
companies included in the Overseas segment to the Soft Drinks segment, while changing the classification of certain
companies included in the Other segment to the Food segment. The changes have been reflected in the revenue by
segment for the 96th term (FY2019).
*2. The adjustment is the elimination amount of intersegment revenue and revenue of the corporate portion not
attributable to any segment.

28

Main products

Beer, Happoshu (low-malt beer), New genre (malt-type), Whisky and other spirits,
RTD*, Wine, Shochu, Alcohol-taste beverages

In the Alcoholic Beverages segment, under the newly established long-term management policy—transform toward value-oriented management, aiming to create value for customers and new markets—weworked to create special value and experiences for our customers, centered on beer-type beverages.
In beer-type beverages, continuously adopting the brand message for “Asahi Super Dry” formulated
last year (“Beer ga umai. Kono shunkan ga tamaranai.”), we promoted measures in response to newlifestyles by such means as implementing marketing campaigns that allowed consumers to experience“Below-freezing Super Dry” at home and rolling out an online event called “ASAHI SUPER DRY
VIRTUAL BAR” as a proposal for new communication via beer. Furthermore, in response to a growing
demand for drinking at home, we promoted beer and meal pairings for our mainstay brand “Clear Asahi,”
and released “Asahi THE RICH” that offers “quality and sense of luxury like a premium beer” andstrengthened our advertising and sales promotion activities, working to enhance our presence in the new
genre beer-type beverages market.
Aside from beer-type beverages, in RTD beverages, we focused on fostering our unique brands byenhancing the lineup for the core brand, “Zeitaku Shibori RTD” and launching “Asahi The Lemon Craft,”which pursues the original flavor and aroma of lemons. In whiskey and other spirits, “Nikka Session,” ablend of malt liquors from Scotland and Japan, was launched to reinforce the initiative to propose newvalue. In alcohol-taste beverages, we worked to expand our new user base by renewing “Asahi DRY ZERO”
to make it taste even more like beer and proposing a variety of settings for serving it.
As a result of these efforts, though sales of the new genre beer-type beverages and RTD exceeded theprevious year’s results by capturing demand for drinking at home, revenue from the Alcoholic Beverages
segment decreased by 14.5% year-on-year to ¥758,270 million resulting from a significant decrease in salesof beer for restaurants due to the COVID-19 pandemic.
Core operating profit decreased by 23.8% year-on-year to ¥80,448 million due to the lower revenue
which outweighed our efforts such as reducing manufacturing costs and reforming our earnings structure(Operating profit stood at ¥65,933 million, representing a year-on-year decrease of 36.0%).
*

RTD stands for “Ready To Drink,” which refers to a type of beverage sold in a prepared form and ready for
consumption, such as canned chuhai.

29

Main products

Carbonated drinks, Milk-based beverages, Coffee, Tea, Mineral water,
Fruit drinks

In the Soft Drinks segment, we aimed to establish a solid business foundation for further growththrough initiatives such as revitalizing the soft drinks market via reinforcement of the carbonated beveragecategory and commercialization of the products creating new value, and strengthening initiatives to enhancesocial value.
In our mainstay brands, we launched limited edition reproduction of the product under the “MITSUYA”
brand and conducted new advertisement and sales promotion activities through SNS. For the“WILKIINSON” brand, we further enhanced the value of the brand in the well-performing carbonatedbeverage category, which enjoyed an increase in demand at home, by such means as stepping up themarketing campaigns to emphasize that WILKINSON is No.1 selling product in the carbonated watermarket*. Other initiatives to reinforce our brands included promoting proactively concentrate-type products
for the “CALPIS” brand in response to demand from staying-at-home. Meanwhile, in the Juroku Cha”
brand, “Asahi Juroku Cha Plus-Yasuragi Blend” classified as a Food with Functional Claims was launched.
It contains L-Theanine that helps to relieve stress and improve quality of sleep.
For products creating new value, we launched “GREEN CALPIS,” a plant-derived product under the“CALPIS” brand made from fermented soy milk. Also, we actively expanded the products using label-lessplastic bottles mainly under the “Asahi OISHII MIZU” brand in the e-commerce market. In this way, weenhanced marketing strategies in line with the changing consumer needs to stimulate the market.

As a result of these efforts, despite sales volumes of the carbonated beverage topping the previous
year’s results, revenue from the Soft Drinks segment decreased by 6.2% year-on-year to ¥353,381
million mainly due to the reduced sales through vending machines during the COVID-19 pandemic.
Core operating profit decreased by 16.9% year-on-year to ¥27,800 million (Operating profit stoodat ¥28,901 million, representing a year-on-year decrease of 6.1%). This was mainly due to the impactof the declining sales and the deterioration in the mix of product type and container type caused by the
reduced sales via vending machines. These impacts outweighed the effects of the streamlining ofadvertising and promotion expenses through selection and concentration strategy of the brands andthe reduction of manufacturing costs by switching outsourced products to in-house manufacturing.
*

INTAGE SRI, Carbonated water market (including flavored water), Cumulative sales, Nationwide, All Industries(SM/CVS/DRUG), January 1, 2019-December 31, 201930

Main products

Confectionery, Nutritional snacks, Supplements, Baby foods, Infant formula,
Freeze-dried foods, Products aimed at senior citizens

In the Food segment, we worked to build a sustainable growth foundation through new value
proposition for our core brands in response to diversifying lifestyles.
With the tablet-type confectionary “MINTIA,” we released new products such as “MINTIA Tasty,”a large-sized tablet with a rich taste, to meet the consumer needs for refreshment while wearing a mask
or working remotely, and also tried to stimulate demand by proposing a new way of enjoying thebreath mints to match the diversifying work styles. For health and beauty foods, we worked tostrengthen and develop our brand power by such means as expanding the product lineup of “Ippon
Manzoku Bar” protein series on the back of growing interest in building up bodies. For freeze-driedmiso soup, we emphasized the value of freeze-dried miso soup as a convenient way to enjoy theauthentic flavor by renewing the packaging of the “Itsumono Omisoshiru” series and boosting
advertising and sales promotions including TV commercials.
In the baby foods, we proposed products that satisfy the needs for homemade snacks by suchmeans as newly launching “Oyaki Dumpling Mix for Baby” series. In the category of dietary
supplements, for “Dear-Natura,” we worked to attract new users and propped up the brand power bystrengthening the promotion of products in response to a growing health consciousness.
As a result of these efforts, despite a stronger-than-previous-year sales of the health and beauty
foods, the freeze-dried miso soup, etc., revenue from the Food segment decreased by 4.2% year-onyear to ¥123,486 million mainly due to a significant decrease in sales of “MINTIA” as a result of
reduced office work hours.
Core operating profit decreased by 19.9% year-on-year to ¥10,997 million mainly due to a decrease
in revenue, which was not absorbed by an improvement of overall fixed costs (Operating profit stood at¥11,178 million, representing a year-on-year decrease of 16.2%).

31

Main products

Beer, Low-alcohol beverages, Alcohol-taste beverages, Carbonated drinks, Mineralwater, Condensed milk, Fruit drinks, Coffee

In the Overseas segment, we accelerated our efforts for further growth by expanding our premium beerbrand in the global market and pursuing the premiumization of our brand portfolio in the respective local
markets, among other measures.
With regard to the expansion of our premium brands in the global market as a whole, we worked toincrease awareness of “Peroni Nastro Azzurro” and “Asahi Super Dry” as global premium beer brands
through initiatives that included the active advertisement of these brands and the campaign to hold eventsand distribute event information via SNS.
In the Europe business, we strove to enhance the value of our mainstay brands in each country. Suchefforts include: strengthening our premium brands through aggressive marketing activities for Czech“Pilsner Urquell,” the launch of derivative products for Romanian “Ursus,” and holding online events for
Italian “Peroni” and Dutch “Grolsch.” In addition, in alcohol-taste beverages, where the market isexpanding, we fortified our brand power, tailoring to changes of diversifying consumer needs by enhancing
the development of new flavors for Czech “Birell,” Polish “Lech Free,” etc.
In the Oceania business, as for alcoholic beverages, we consolidated our existing business with
Australian beer and cider business (hereinafter the “CUB”), for which the acquisition process wascompleted in June, forging a robust sales structure for synergies. We also worked to enhance the value ofour mainstay brands, “Victoria Bitter” and “Great Northern” as well as the global premium beer brands
including “Asahi Super Dry” and “Peroni Nastro Azzurro.” As for soft drinks, we proactively developed
our no-sugar products centered on the carbonated drink category, and enhanced their presence in the market.
In the Southeast Asia business, we bolstered the sale of high-value-added products such as sugar-free“WONDA Zero Max” in Malaysia amid the growing health consciousness.
As a result of these efforts, revenue from the Overseas segment increased by 13.5% year-on-year to¥792,956 million mainly due to the effects of the newly consolidated CUB despite market contraction
caused by the restriction in various countries during the COVID-19 pandemic, and other factors.
Core operating profit decreased by 8.0% year-on-year to ¥94,122 million mainly due to a deteriorationof profitability caused by the changes in sales mix per marketing channel and one-time expenses resulting
from the acquisition of the CUB, despite an improvement of overall fixed costs (Operating profit stood at¥52,089 million, representing a year-on-year decrease of 31.4%).
Excluding the effects of exchange rate fluctuations, revenue rose by 14.5% year-on-year and core
operating profit decreased by 7.6% year-on-year.**

Revenue and core operating profit are compared between the previous and current terms after foreign currency
amounts in 2020 are converted to the yen using the 2019 exchange rate.

32

Main businesses

Cargo transportation, Production and Distribution of feedstuffs

In the Other segment, revenue decreased by 4.7% year-on-year to ¥93,155 million.
Core operating profit decreased 13.2% year-on-year to ¥1,340 million (Operating profit stood at¥1,093 million representing a year-on-year decrease of 8.0%).
Notes to (1) Business Progress and Results:
The share of revenue by segment is calculated by dividing the revenue of each segment by the consolidated total revenue
including the adjustment amount (¥93,488 million). Accordingly, the total share of revenue amounts to 104.6%.

(2) Status of Capital Expenditures
Consolidated capital expenditures in this year totaled ¥103,764 million, the segment breakdownof which is as follows. A large portion of the capital expenditures represented investments made forthe purpose of enhancing production capacity and efficiency.
Amount of capital expenditure(million yen)

Business segment
Alcoholic Beverages

25,161

Soft Drinks

16,363

Food

4,056

Overseas45,113

Other

5,716
7,352

Company-wide (common)

103,764

Total

33

(3) Financing Activities
The Company financed the capital requirements including capital expenditures detailed in item
(2) above and funds for acquiring CUB through loans from financial institutions, the issuance ofcommercial papers and bonds, and capital increase, etc.
Funds required for companies’ business segments of the Asahi Group are primarily sourced by
the Company.
Overview of issued bonds
Issued bonds

Payment date

Total amount of bonds

The 1st unsecured subordinated bonds with optional
interest payment deferral and early redemption
provisions (with a subordination provision)

October 15, 2020

¥300,000 million

The 13th issue of Unsecured Corporate Bonds(3 years)

October 15, 2020

¥100,000 million

The 14th issue of Unsecured Corporate Bonds(Green Bond*, 5 years)

October 15, 2020

¥10,000 million

Euro denominated senior unsecured bonds due 2024

October 23, 2020

EUR 800 million

Euro denominated senior unsecured bonds due 2028

October 23, 2020

EUR 800 million* “Green Bond” refers to bonds issued specifically for the use of funds for environmental initiatives. The purpose of such bonds ismainly to procure recycled PET and biomass plastics, purchase renewable energy, and maintain the company-owned “Asahi Forest.”

Overview of capital increase, etc.
Capital increase, etc.

Payment dateAmount paid

Issuance of new shares through public offering

September 14, 2020

¥67,189,692,992

Disposal of treasury shares through public offering

September 14, 2020

¥81,429,568,000

Issuance of new shares through third-party allotment

October 13, 2020

¥8,180,935,808(4) Status of Principal Lenders(As of December 31, 2020)
Outstanding balance(million yen)

LenderSumitomo Mitsui Banking Corporation

405,191

Mizuho Bank, Ltd.

55,170Sumitomo Mitsui Trust Bank, Limited

43,400

The Norinchukin Bank

43,400MUFG Bank, Ltd.

38,38634

(5) Status of Major Establishments and Principal Subsidiaries(As of December 31, 2020)

1) Asahi Group Holdings, Ltd.
(Head office)23-1, Azumabashi 1-chome, Sumida-ku, Tokyo
2)

Significant subsidiaries
Company nameLocation ofhead office

Issued capital(million yen)

Shareholdings(%)

Main operations

Asahi Breweries,
Ltd.

Sumida-ku,
Tokyo

20,000100.0

Production and marketing of
alcoholic beverages in Japan

Asahi Soft Drinks
Co., Ltd.

Sumida-ku,
Tokyo

11,081

100.0

Production and marketing of softdrinks in Japan

Asahi Group Foods,
Ltd.

Shibuya-ku,
Tokyo

5,000

100.0

Production and marketing of foods
in Japan

Asahi InternationalLtd

London,the United
Kingdom

185,459

100.0

Sales of alcoholic beverages inwhole global market

Asahi Breweries
Europe Ltd

Surrey,the United
Kingdom

100.0

Overseeing alcoholic beverages
operations in Europe

Asahi Holdings(Australia) Pty Ltd

Victoria,
Australia

100.0

Overseeing and alcoholic
beverages and soft drinks
operations in Oceania(EUR 1,560,766 thousand)

1,020,760(EUR 8,375,187 thousand)

1,385,448(AUD 18,926,514
thousand)

Notes:
1.
There were 206 consolidated subsidiaries of the Company as of the end of this year, including those listed above.
There were 25 companies accounted for using equity method.
2.
There were no wholly owned specified subsidiaries of the Company as of the end of this year.

(6) Significant Developments such as Corporate Reorganization
1)

The Company completed the acquisition of all the issued shares of 55 companies including ABIAustralia Holding Pty Ltd (currently, CUB Australia Holding Pty Ltd after renaming) throughAsahi Holdings (Australia) Pty Ltd on June 1, 2020.

2) In relation to the acquisition above, certain selected beer and cider brands acquired were divested
as of January 5, 2021, pursuant to the conditions of the approval of such transaction from theAustralian Competition and Consumer Commission.

(7) Employees
Number of
employees

Business segment(As of December 31, 2020)
Increase (decrease) fromthe end of the previous term

Alcoholic Beverages

5,754

61

Soft Drinks

3,655

126

Food

1,353

64

Overseas

15,972

295

Other

2,437

(9)

Company-wide (common)

679

(14)

Total

29,850523

35

(8) Progress in the “Medium-Term Management Policy” Guidelines
As for the guidelines set out in the “Medium-Term Management Policy,” each indicator of the “KeyPerformance Indicator (KPI) Guidelines” and cash flow in the “Financial and Cash Flow Guidelines” haveprogressed below the plan due to the significant deterioration in business performance in the current fiscal
year caused by the spread of COVID-19. Meanwhile, in terms of the investment for growth and debt
reduction, Net Debt/EBITDA worsened away from the guidelines due to an increase in debt mainly as aresult of the acquisition of the CUB.
Despite a decrease in EPS, the shareholder returns are expected to exceed the guidelines significantly by
paying a dividend of ¥106 per share for the current fiscal year (FY2020).
Key Performance Indicator (KPI) Guidelines
FY2017 results

Guidelines for next 3 years out

FY2020 progress

Revenue¥2,084.9 billion

 Stable growth from existing businesses –Business restructuring + New M&As–

Core Operating Profit¥196.4 billion

 CAGR (Compound annual growth rate):
mid to high single digit(5.1)%EPS (adjusted *)¥262.2

 CAGR (Compound annual growth rate):
mid to high single digit(9.2)%ROE (adjusted*)

13.7%

 Maintain 13% or above

7.5%* “Adjusted” refers to figures that exclude one-time extraordinary factors such as restructuring of business portfolio and exchange
rate fluctuations.

Financial and Cash Flow Guidelines
Guidelines for FY2019 onward

FY2020 progress

Cash Flow Free cash flows: above ¥170.0 billion (annual average)¥184.9 billion/annual average

Investment for Growth/
Debt Reduction

 Prioritize M&As for expansion of foundations for growth andpromote debt reduction for enhancing investment capacity(Net Debt/EBITDA*1: below 2 times by the end of FY2021)

6.03 times

Shareholder Returns

 Stable dividend increases with the aim of a dividend payout ratio*2of 35% (- FY2021)
53.9%(Aimed at a dividend payout ratio of 40% in the future)*1. Net Debt / EBITDA (EBITDA net debt equity ratio) = (interest-bearing debt - cash) / EBITDA*2. Dividend payout ratio is calculated as profit attributable to owners of parent less a one-time profit or loss on the restructuringof business portfolio (net of tax expenses), etc.
Note: The amounts in Key Performance Indicator (KPI) Guidelines and Financial and Cash Flow Guidelines for FY2017 results and
FY2020 progress have been rounded to the representative unit.

36

(9)

Management Perspectives

Management Basic Policy
The Asahi Group, under the command of Asahi Group Holdings, Ltd., a pure holding company,
conducts business activities globally in the Alcoholic Beverages, Soft Drinks and Food segments.
Establishing a group philosophy, the “Asahi Group Philosophy (AGP)” in 2019, the Group aims
to achieve sustainable growth and enhance its corporate value over the medium- to long-term. The
AGP consists of 4 elements: Mission, Vision, Values and Principles. It articulates the Group’s mission
and vision for the future, reaffirms values cherished and handed down over the years, and serves asa code of conduct for our stakeholders and the Group’s commitments to them. By generating andimplementing strategies based on the AGP, domestic and overseas operating companies of the Group
work together to further improve its corporate value.

37

Medium-Term Management Policy
While providing “Key Performance Indicator Guidelines” and “Financial and Cash Flow
Guidelines” for the coming 3 years or so, the “Medium-Term Management Policy,” established basedon the AGP, sets the following three Key Initiatives.
Given the impact of the spread of COVID-19 and the completed acquisition of the CUB, we havedecided to update some of the Key Initiatives in February 2021 and to withdraw the existing “KeyPerformance Indicator Guidelines” to reestablish them in 2022. We will respond flexibly to thechanging business environment amid the COVID-19 disaster to achieve an early recovery in businessperformance while continuously promoting “Glocal Value Creation Management” based on the AGP.
A “Strengthening Earnings Power” by further enhancing added value and earnings structure reform Promoting premium strategies by enhancing high-added-value brands in all segments andexpanding the five global brands*
 Accelerating the restructuring of earning structure in light of the changing environment- Aiming to achieve over ¥50.0 billion of cumulative effects from the restructuring of earning
structure over 2021-2023 and to accelerate business performance recovery, while
reinvesting in “Sophisticating Management Resources” and “Reinforcing ESG initiatives”
B “Sophisticating Management Resources” aimed at expanding new foundations for growth Strengthening investment in intangible assets (R&D, human resources, etc.) to realize
innovation and to create new values
 Building a new operating model by speeding up DX (Digital Transformation)
C “Reinforcing ESG Initiatives” supporting our sustainable value creation processIntegrating sustainability, such as the initiatives for “Asahi Group Environmental Vision 2050”
and “Sustainable Communities,” into management strategiesEnhancing risk management systems (Enterprise Risk Management (ERM)) as well as
strengthening global governance with three core pillars in Japan, Europe and Australia* Asahi Super Dry, Peroni Nastro Azzurro, Kozel, Pilsner Urquell and Grolsch

Medium-Term Management Policy
Enhancing “Glocal Value Creation Management” based on Asahi Group Philosophy
Key Performance Indicator (KPI) Guidelines
 Withdrawing the existing guidelines given the impact of the spread of COVID-19 and planning to establish new
guidelines in 2022
 Aiming to return to the FY2019 profit level* by FY2022* FY2019 result includes the estimated results of the CUB from January to December.

Financial and Cash Flow Guidelines

Cash Flow

Guidelines for FY2021 onward Free cash flows (FCF): above ¥200.0 billion (annual average)(FCF = Operating cash flows – Investing cash flows *excluding M&As and otherbusiness restructuring)

Investment for Growth/
Debt Reduction

 FCF is preferentially appropriated for debt reduction, and will enhance the capacity
for growth investment
 Net Debt/EBITDA: Around 3 times by FY2024(50% of the subordinated debts is excluded from net Debt)

Shareholder Returns

 Stable dividend increases with the aim of a dividend payout ratio of around 35%(Aimed at a dividend payout ratio of 40% in the future)38

Policy for 98th Term (FY 2021)
In the fiscal year 2021, based on the Key Initiatives set out in the renewed “Medium-Term
Management Policy,” we will continue to promote “Glocal Value Creation Management,” while
restructuring management in light of the changing environment amid the COVID-19 crisis.
In terms of “Strengthening Earnings Power,” aiming to enhancing the value of the mainstay brands
in each business segment, we will reinforce investments in new categories for growth such as nonalcoholic beer-taste beverages. In addition, we will promote our premium strategies as the entire
Group by such means as expanding the five global brands including “Asahi Super Dry.” At the sametime, while shoring up the recovery in business performance through further improving cost
efficiency, we will invest in “Sophisticating Management Resources” and “Reinforcing ESG
initiatives” to achieve sustainable growth, and accelerate the reform of earning structure in responseto the changing business environment.
In terms of “Sophisticating Management Resources,” we will step up investments in intangible
assets such as R&D, human resources and the synergies with the newly acquired CUB. In addition,
we will actively promote DX (Digital Transformation) initiatives to form a new operating model
including reforms in the way we work.
In terms of “Reinforcing ESG Initiatives,” we will integrate sustainability into our management
strategy through the implementation of a variety of measures to realize the “Asahi Group
Environmental Vision 2050,” and through the initiatives to energize “Sustainable Communities” ineach region. In addition, we will further sophisticate our risk management against the backdrop of
COVID-19 disaster, and fortify our global governance with Japan, Europe, and Australia as the threecore regions.
With these efforts, the Group projects revenue to be ¥2,296,000 million, core operating profit tobe ¥217,500 million, operating profit to be ¥216,000 million, profit attributable to owners of parent
to be ¥152,000 million, and adjusted profit attributable to owners of parent to be ¥152,000 million,
for the 98th fiscal year (FY2021).
The Group cordially requests shareholders’ continuing encouragement and support.

39

| ESG initiatives of the Asahi Group |(1) ESG Management of the Asahi Group
Based on its group philosophy, the “Asahi Group Philosophy,” the Asahi Group has listed“Reinforcing ESG Initiatives” as one Key Initiative in the “Medium-Term Management Policy.” In2020, we fostered a shared awareness across the Group by officially stating the significance of
pursuing sustainability and our vision for the future toward the realization of the “Asahi Group
Philosophy.”
Asahi Group Sustainability Principles
1. The Asahi Group is striving to realize the tastiness of products and services that exceed consumer
expectations, using the blessings of nature. We preserve finite nature to hand down the important
blessings of nature to future generations.
2. The Asahi Group is striving to bring more fun to life through its products and services. We build
a sustainable society to allow a better life to be inherited.
Asahi Group Sustainability Vision
Based on the Sustainability Principles, we will strive to create values toward a better future in all
regions where we operate by incorporating “Environment,” “People,” “Communities,” “Health,” and“Responsible Drinking” into our corporate strategy. Through these initiatives, we will continue totake on challenges and innovation to contribute to achieving the United Nations Sustainable
Development Goals (SDGs).

(2) Initiatives for the Environment<Addressing climate change>
The Asahi Group has actively engaged in such efforts as utilizing renewable energy toward theachievement of the “Asahi Carbon Zero,” an initiative that aims for zero CO2 emissions by 2050*1.
In 2020, we reviewed and raised the interim milestone set for 2030 from 30% CO2 reduction(compared with 2015)*1 to 50% CO2 reduction (compared with 2019)*2.
*1. For Scopes 1, 2 and 3*2. For Scopes 1 and 2

Aims for zero CO2 emissions by 2050

40

To accelerate the “Asahi Carbon Zero” initiatives, we have engaged in the utilization of renewableenergy and the acquisition of external certification.
Since October 2020, we have participated in the“RE100,” an international initiative to drive transitionof electricity in business activities to 100% renewableenergy. We will further engage in the utilization ofrenewable energy.
In February 2021, the “Asahi Carbo Zero” obtained
accreditation for the “1.5°C target” of the SBTi
(Science Based Targets initiative), an international
initiative to accredit the scientific evidence of CO2
reduction target of corporations.

1) Support for the recommendations of the “Task Force on Climate-related Financial
Disclosures (TCFD)”In May 2019, the Asahi Group endorsed the recommendations of the TCFD with therecognition that evaluating the impact of climate change-related risks and opportunities on its
businesses and drafting appropriate response measures are important matters in terms of realizing
a sustainable society and ensuring business continuity. In 2020, the Group quantitatively
evaluated the business impact with scenario analysis methods, focusing on its beer businesses
which hold the biggest impact on the Group.
◆ Evaluate business impact
We evaluated the business impact as follows, with the recognition that both “rising raw material
prices due to a decline in the harvest of agricultural materials” in our beer businesses in Japan,
Europe and Australia, and “increased costs owing to the introduction of carbon tax” may have aparticularly large influence or risks on our businesses.

Rising raw material prices due to a decline
in the harvest of agricultural materials

Increased costs owing to
the introduction of carbon tax

Impact of Harvest Yield Amounts under the 2°C
Scenario and the 4°C Scenario (Estimated values for2050 using supply volume in 2018 as 100)

Impact of Carbon Tax under the 2°C Scenario

Impact of carbon tax reduction when we implement
the “Asahi Carbon Zero”

Harvest yield amounts of barley and corns under the
4°C scenario are significantly lower than those underthe 2°C scenario.

→ ¥1.4 billion in 2030
¥7.0 billion in 2050

41

◆ Examine the direction of response measures
While continuing and accelerating our existing response measures to risks we haveevaluated, we will also adopt the following main direction as a management task.
Major risk

Existing Measures

Direction of Response Measures
Going Forward

Rising Price of Raw
Materials

 Engage in risk dispersion through multisourcing

 Development of weatherresistant raw materials
 Development and introductionof cultivation method

Carbon Tax and Carbon
Pricing Introduce co-generation systems
 Introduce renewable energy provided bywind power generation in Poland, theNetherlands, etc.

 Further utilize renewableenergyWe will adopt the following measures against other risks as well.
Direction of Response Measures
Going Forward

Major risk

Existing Measures

Regulations on Water
Use Realize water neutrality at our domestic beer
factories by 2025 through utilizing 2,467 haof our company-owned “Asahi Forest”
 Reduce the amount of water used (reducewater consumption during cleaning andsterilization processes and effectively utilize
recycled water)

 Further reduce the amount ofwater used (introduce largescale recycling systems, etc.)

Changes in Customer
Behavior

 Print the Green Energy Mark logo on “Asahi
Super Dry” 350ml cans, etc.

 Respond to the growing trendof ethical consumption (makeuse of certified raw materials,
etc.)

Intensification ofAbnormal Weather

 Formulate BCP and prepare action manuals
 Prepare facilities and equipment, andimplement disaster drills

 Give consideration to themedium- to long-term impact
of climate change whenchanging location of
production bases or building
new ones

2) Utilize renewable energy in Europe
In Europe, we will switch electricity used in all of our factories
to renewable energy by 2025, and aim to become carbon neutral
factories by 2030. Currently, electricity usage of seven breweriesin Poland, the Netherlands and Italy is renewable.
3) Expand the utilization of green electricity in Japan
Asahi Breweries, Ltd. has expanded the utilization of “green
electricity”* under contract with Japan Natural Energy Company
Limited to the manufacturing of “Asahi Super Dry” 500ml canssince the manufacturing in the latter half of May 2020, in addition
to “Asahi Super Dry” 350ml cans and “Asahi DRY ZERO” 350ml
cans.
* Green electricity is electricity generated from natural energy resources suchas wind and biomass which have a low impact on the global environment. Asahi Breweries, Ltd. has utilized“The Tradable Green Certificate System” since 2009.

42

(3) Initiatives for “Community”
The slogan of our community activities“RE:CONNECTION”

While the dilution of “connection” between people and people as well as people and community
has become an issue in the economic development, the outbreak of COVID-19 has further weakened
the “connection.”With the belief that the reassessment and evolution of “connection” is important at this stage, theAsahi Group is committed to contribute to the realization of sustainable community through enhancing“connection” between people and people, people and community as well as community andcommunity, and solving local issues.
1) Partnership toward the development of sustainable malt“Campus Peroni”
Birra Peroni S.r.l. in Italy, has implemented
a project called “Campus Peroni” since 2018
in partnership with malt factories, national
agricultural research center, and the faculties
of agriculture of multiple local universities tosupport the farmers to explore the cultivationof grain such as barley as sustainable raw
materials of beer.
Various initiatives for promoting the
research, training, innovation and exchange
among agricultural producers have been
progressing.
2) Support program for Malaysian dairy farmers
As a support measure for local dairy
farmers, Etika Dairies Sdn Bhd in Malaysia
dealing dairy products, has conducted a
program to purchase raw milk at a stableprice from the farmers who supply raw milkwith a certain level of quality and quantity.
In addition to the promotion of upgrade in
productivity and quality of existing dairy
farmers, the program has contributed tosupport those who aim to start dairy farming
as a mechanism to stabilize and increase theincome of dairy farmers.

43

2 Corporate Governance System(1) Basic Concept
With the belief that “growth-oriented governance” by which to make transparent, fair, swift andbold decisions is indispensable for striving to achieve sustainable growth and increase corporate value
over the medium- to long-term, the Company has established its Corporate Governance Guidelines,
and makes efforts primarily in the following areas:
WEB Corporate Governance Guidelines
https://www.asahigroup-holdings.com/en/csr/gov/internal/pdf/2000325_guidelines_en.pdf
1) Ensuring rights of and equality among shareholders
Recognizing that “a shareholder is equal in accordance with his/her equity interest,” theCompany strives to ensure substantial equality of shareholders and conduct appropriate
information disclosure by posting various information for shareholders and/or individual
investors with updates, as needed, on its website. Information disclosure is also ensured foroverseas investors using the English website, as well as the preparation of the English-version
Convocation Notice of the General Meeting of Shareholders in view of the convenience of
exercising of shareholders’ rights by foreign shareholders. Furthermore, the Company has
streamlined a system that allows for employees assigned to assist the Audit & Supervisory Board,
who are not subject to directives or orders from Directors or employees, under the control of the
Audit & Supervisory Board, so that Audit & Supervisory Board Members can handle claims
from any minority shareholders against the Company or any Director and Audit & Supervisory
Board Member, independently from the Board of Directors and management to substantiallyensure the rights of minority shareholders.
2) Appropriate Collaboration with Stakeholders
The Company has identified corporate value not only as financial value, but also as asummation of financial value and social value that is closely related to each other, and has set
the following as its action guidelines for enhancing corporate value, by working with its
customers, employees, society, partners, shareholders, and all other stakeholders, in its groupphilosophy, the Asahi Group Philosophy.
Customers: Win customer satisfaction with products and services that exceed expectations
Employees:
Foster a corporate culture that promotes individual and company growthSociety:
Contribute to a sustainable society through our business
Partners:
Build relationships that promote mutual growth
Shareholders: Increase our share value through sustainable profit growth and shareholder returns3) Ensuring Proper Information Disclosure and Transparency Thereof
The Company formulated the “Disclosure Policy” and proactively addresses the voluntary
disclosure of information. The Company strives to provide well-balanced information disclosure
between financial information, such as accounting, and non-financial information, such as
management strategies, risks and governance, by preparing the Integrated Report, in addition to
the statutory disclosure, timely disclosure and other information disclosures on the website.
4) Responsibilities of the Board of Directors
The Company’s Board of Directors appropriately fulfills their roles and responsibilities toensure the sustainable growth and the increase of corporate value over the medium- to long-termof the Company, as well as to promote the improvement of earning capacity and capital efficiency

44

by taking into account their fiduciary responsibility and accountability to shareholders. Suchinitiatives include determining the Medium-Term Management Policies and promoting their
execution, while also properly supporting management’s risk taking by streamlining the internal
control system and risk management system.
The Board of Directors, in deliberating management strategies etc., mainly prepared bymanagement, engages in planning the meetings as a venue for constructive discussion by
avoiding ritual discussion with measures such as sharing information with Outside Directors anda preliminary explanation of agenda items thereto in the review process or receiving reports on
the results of discussion from the Audit & Supervisory Board, thereby aiming for the sustainablegrowth and the increase of corporate value over the medium- to long-term of the Company.
5) Dialogues with Shareholders
For promoting constructive dialogues with shareholders, the Company shall appoint an officer
as a responsible executive in charge of dialogues with shareholders and ensure well-organizedcollaboration among the auxiliary organizations by providing the information for the dialogues.
In addition, the Company shall endeavor to understand the shareholder structure and conductvarious explanatory meetings by President and Representative Directors of the Company, visits
to domestic/overseas institutional investors and others.
| Measures for Enhancing Corporate Governance
2000






2007

 Terms of Directors were shortened to 1 year.
 Retirement benefits for Directors and Audit & Supervisory Board Members were abolished.

2011 The Company transitioned to a pure holding company structure.

2013

 Takeover defense measures were abolished.

2015 Corporate Governance Guidelines were formulated.
 Evaluations of the effectiveness of the Board of Directors were commenced.

2016 Performance-linked stock compensation was introduced for internal Directors.

2018 Title of CEO was transferred from Chairman and Representative Director to President andRepresentative Director to improve the effectiveness of management supervision from operational
execution.
 Outside Directors/Audit & Supervisory Board Members account for the majority of the members of
the Nomination Committee and the Compensation Committee. Both committees are chaired by
Outside Directors.
 Evaluations of the effectiveness of the Audit & Supervisory Board were commenced.

2019 The Company transitioned to a structure in which the Chairman and Director does not serve
concurrently as a representative director and serves exclusively as the chairman of the Board of
Directors.
 Standards and guidelines were formulated for the resignation of the CEO, the appointment ofrepresentative directors, and terms of office for officers.
 The number of Outside Directors on the Board of Directors was raised, now constituting 1/3 ormore of total Board members.
 The overall functions of remuneration systems were strengthened to provide an incentive tointernal Directors.

2020

 The CXO system was introduced to enhance global governance.
 The skill matrix of the Board of Directors and the skill set of CEO were formulated.

Nomination Committee and Compensation Committee were established.
Corporate Strategy Board was established.
Executive Officer System was introduced.
Number of Outside Directors was increased from 1 to 3.

45

(2) Characteristics of Current Systems
As a company with an Audit & Supervisory Board, the Company audits the execution of duties by
the Directors utilizing the Audit & Supervisory Board, of which a majority of the board members are
independent Outside Audit & Supervisory Board Members, while taking advantage of the audit &supervisory board members system with its independence, and in which the power of final decision
making is given to each person and which has Standing Audit & Supervisory Board Members. In
addition, the Nomination Committee and the Compensation Committee have been established to act
as advisory bodies to the Board of Directors, of which a majority of the members of each committee
is independent Outside Directors/Audit & Supervisory Board Members. Under the system of these
discretional bodies, the Company has created a structure that allows the Board of Directors to monitor
the management of the Company with high effectiveness.

(3) Structure of the Board of Directors
In order to ensure balance and diversity in terms of the knowledge, experience and ability of theentire board necessary for the sustainable growth and the increase of corporate value of the Company
over the medium- to long-term, the Company has formulated the “Skill Matrix of the Board of
Directors” which clarifies the requirements for the Directors derived from the group philosophy of the
Asahi Group, “Asahi Group Philosophy,” the Asahi Group Code of Conduct, and the management
strategies. The “Skill Matrix of the Board of Directors” is composed of the necessary skills for decision
making as the Board of Directors and particularly necessary skills for the oversight of businessexecution. According to the “Skill Matrix of the Board of Directors,” the Company shall make theBoard of Directors composed of persons who are suitably qualified to be Directors of the Company
possessing a wealth experience, extensive knowledge and high-level expertise required by theCompany. In addition, the Outside Directors shall be persons such as corporate managers and/or
experts who meet the Company’s requirements for independent officers and for them to make up atleast 1/3 of the number of Directors in the Board of Directors. The content of the “Skill Matrix of theBoard of Directors” is described on page 9.

46

(4) Structure of the Audit & Supervisory Board
In order to ensure a proper balance in terms of the knowledge, experience, ability and diversity of
the Audit & Supervisory Board such that is necessary for the Company to achieve sustainable growthand increase corporate value over the medium- to long-term, the Company shall assign to the Audit &Supervisory Board persons suitably qualified who reflect the requirements for officers that wereintroduced from the group philosophy of the Asahi Group, “Asahi Group Philosophy,” the Asahi
Group Code of Conduct and the management strategies.
The Company shall appoint as Audit & Supervisory Board Members those who have appropriate
experience and skills, and requisite knowledge of finance, accounting and legal affairs, and inparticular shall appoint 1 or more persons who have sufficient expertise related to finance andaccounting. In addition, the Company shall ensure that at least 3 of the Audit & Supervisory Board
Members are Outside Audit & Supervisory Board Members who meet the Company’s requirements
for independent officers and select for those positions, accounting experts, attorneys at law andcorporate managers who possess a wealth of experience and broad knowledge in their relevant fields.

(5) Roles and compositions of the advisory bodies
The roles and compositions of the advisory committees and deliberative bodies are as described
below:
1) Nomination Committee
Nomination Committee provides reports on its findings and views about candidates, etc. for
Directors and Audit & Supervisory Board Members in response to the inquiries referred from theBoard of Directors. The Committee consists of 2 Outside Directors, 1 Outside Audit & Supervisory
Board Member, and 2 internal Directors, and an Outside Director is co-operatively appointed as its
chairperson.
The Committee held a total of 9 meetings during fiscal 2020, and provided reports on its findings
and views, primarily about personnel affairs of officers, based on the skill matrix of the Board of
Directors, the skill set of CEO, the succession plan and its planning, and representatives of principal
subsidiaries.
2) Compensation Committee
Compensation Committee provides reports on its findings and views about the remuneration
system and amount of remuneration, etc. for Directors in response to the inquiries referred from theBoard of Directors. The Committee consists of 2 Outside Directors, 1 Outside Audit & Supervisory
Board Member, and 2 internal Directors, and an Outside Director is co-operatively appointed as its
chairperson.
The Committee held a total of 5 meetings during fiscal 2020, and provided reports on its findings
and views primarily about individual evaluations of officers and bonus amounts determined on thatbasis.
Director
OutsideInternal

Nomination Committee

Compensation Committee◎ Tatsuro Kosaka
Yasushi Shingai◎ Yasushi Shingai
Christina L. Ahmadjian

Audit & Supervisory
Board Member

Katsutoshi Saito

Yumiko Waseda

Director

Naoki Izumiya
Akiyoshi Koji

Atsushi Katsuki
Keizo Tanimura

Note: ◎ denotes committee chairpersons

3) Global Sustainability Committee
The Global Sustainability Committee was established on April 1, 2020 as the organization toprovide reports on its findings and views about the formulation and monitoring of sustainability
strategies for the entire Asahi Group in response to the inquiries referred from the President andRepresentative Director.
The Committee consists of the President and Representative Director, the Director in charge ofsustainability as well as CEOs of overseas Regional Head Quarters etc., and the President andRepresentative Director serves as its chairperson.

47

The Committee held one meeting during fiscal 2020, intensively discussed on reinforcing our
initiatives against climate change in the field of environment and provided reports on its findings
and views primarily about raising the interim milestone set for 2030 toward our goals of achieving
zero CO2 emissions, “Asahi Carbon Zero” by 2050.
4) Information Disclosure Committee
Information Disclosure Committee is responsible for centrally managing and controlling
corporate information disclosure, and provides reports on its findings and views in response to theinquiries referred from the President and Representative Director from the perspective of fair,
expeditious and wide-ranging information disclosure. The Committee consists of the President andRepresentative Director and other executive directors as well as executive officers appointed by thecommittee chairperson, and the President and Representative Director serves as its chairperson.
The Committee held a total of 15 meetings during fiscal 2020, analyzed the contents of relevant
information, and provided reports on its findings and views about the need or otherwise, contents,
methods, etc. of information disclosure in light of the Timely Disclosure Rules, etc. of the Tokyo
Stock Exchange.
5) Risk Management Committee
The Risk Management Committee provides reports on its findings and views on the promotion
and supervision of enterprise risk management (ERM) for the overall Asahi Group, in response toinquiries referred from the President and Representative Director. The Committee consists of the
President and Representative Director and other executive directors, as well as executive officers
who are appointed by the committee chairperson, and the President and Representative Director
serves as its chairperson. Standing Audit & Supervisory Board Members also attend thisCommittee’s meetings.
The Committee held a total of 4 meetings during fiscal 2020, and provided reports on its findings
and views primarily about identification and evaluation regarding major risks of the entire Group
including tail risk (the risk of an event with a small probability of happening but could cause
enormous losses if once happened), action plans and the evaluation of the status of implementationin that regard, and risk appetite plans proposed to the Board of Directors.
6) Compliance Committee
As an organ to provide reports on its findings and views on the promotion and supervision of
corporate ethics and compliance for the overall Asahi Group in response to inquiries referred fromthe President and Representative Director, Compliance Committee consists of the President andRepresentative Director and other executive directors, as well as executive officers who areappointed by the committee chairperson, and the President and Representative Director serves as its
chairperson. Standing Audit & Supervisory Board Members also attend this Committee’s meetings.
The Committee held a total of 4 meetings during fiscal 2020, and provided reports on its findings
and views primarily about compliance promotion plans, the status of the Group’s compliance andthe operational status of the whistle blowing system.
7) Corporate Strategy Board
Corporate Strategy Board provides reports on its findings and views about evaluation of thelegality, objectivity and reasonableness and of substantial matters concerning business execution in
response to the inquiries referred from the President and Representative Director. The Board consistsof the President and Representative Director and other executive directors and Standing Audit &Supervisory Board Members, and the President and Representative Director serves as its chairperson.
The Board held a total of 48 meetings during fiscal 2020, and provided reports on its findings andviews primarily about development of corporate strategies and status of business executions byGroup companies.

(6) Evaluation of Effectiveness of Board of Directors and Audit & Supervisory
Board
To contribute to the creation of corporate value over the medium- to long-term, the Board of
Directors analyzes and evaluates the effectiveness of the Board of Directors on an annual basis, anddiscloses the summary of the evaluation results.

48

As a company with an Audit & Supervisory Board, to contribute to the creation of corporate value
over the medium- to long-term, the Audit & Supervisory Board Members and the Audit & Supervisory
Board shall analyze and evaluate the effectiveness of the Audit & Supervisory Board, and disclose thesummary of the evaluation results.
The English-version summary of the evaluation results is posted on the following Company website:
WEB https://www.asahigroup-holdings.com/en/company/governance/policy.html(7) Succession Plan and Training
The Company regards the succession planning involving its CEO and Directors as one of the mattersof utmost priority, and accordingly draws up a succession plan pertaining to the CEO, Directors andothers, pursuant to requirements demanded of the CEO and Directors as individuals, and thecomposition of the entire Board of Directors. The Board of Directors properly supervises the
succession plan.
Based on the succession plan, the Company makes appointments and assignments according to plan,
engages in coaching of successor candidates, and carries out training, etc. for successors of the next
and subsequent generations. Meanwhile, the Company arranges professional assessments by externalorganizations and makes use of such means as 360-Degree Feedback in-house. The Nomination
Committee regularly monitors and reviews such plans as necessary.
For the Directors and Audit & Supervisory Board Members, the Company provides training
required for their roles and responsibilities on a regular basis. The Company provides Outside
Directors/Audit & Supervisory Board Members with information relating to the overview of the Asahi
Group including its businesses, financial affairs and organizations, and implements measures, such as
office visits, to facilitate their understanding of the Group and human resources as needed.

(8) Skill Set of CEO
The Company has formulated the “skill set of CEO,” the written list of essential and important skills
as CEO, in order to enhance the sustainability of management and proceed the succession planning ofCEO based on fair and transparent processes.
The skill set consists of distinctive skills required for CEO of the Company in addition to universally
essential skills as CEO, and articulates the essential skills of CEO from the perspective of ultimate
responsibility of execution.
The figures below are formulated with the business environment within and outside the Company asof now and over the next five years in mind, and are subject to review depending on environmental
changes, etc.
The Company examines the appointment, reappointment, and succession planning of CEO based on
the skill set of CEO.
Personal Image
Ideal perceptions from inside and outside the Company, and ideal presence• A leader who, as a representative of Asahi Group, thinks the most deeply about AGP,
embodying a sense of mission and an ethical code

• A leader who, regardless of any business environment, always exhibits a clear vision that
leads employees, and unshakeable code of values• A leader who actively encourages different thinking and achieves growth of employees andNecessary skillsof CEO

the Company through maximizing the capabilities of employees
Personal traits
Capabilities
Performance record
Personality, attitude andKnowledge, ability, expertise
Necessary experience andstance conductive to serving
required to accomplish duties
successes
duties• Sincerity and humility• Mental toughness• Open-mindedness

Skills required
as Director

Long-term Outlook& Strategic Mindset• Foresight, decisiveness,• Experience as a top

competency• Organizational leadership• Learning skills

management of operatingcompany or RHQ*
• Experience in international
operations• Experience in addressing
discontinuous growth

Glocal Management
Skill* RHQ: Regional Head Quarters

49

Management of theCompany’s Business

Finance, Accounting& Internal Control

(9) Policy of Reducing Cross-Shareholdings, etc.
The Company makes it its policy to refrain from holdings of shares when such holding is deemed
as neither contributing to the ongoing growth of the Company nor increasing its corporate value overthe medium to long term. This policy has been adopted out of consideration for our goal of pursuingasset and capital efficiency improvement for the promotion of “Glocal Value Creation Management”
based on the “Asahi Group Philosophy” in the “Medium-Term Management Policy.”
Shareholdings are examined in terms of their holding purpose, risks, performance as measured
against capital cost, etc., as well as the appropriateness of holding the shares. The result of
examinations of matters including the holding purpose for major ones among the shareholdings iscomprehensively reviewed every year by the Board of Directors.
In the event that a shareholding is deemed not to contribute to the Company’s sustainable growth
or to the increase of its corporate value over the medium- to long-term, the Company, as a shareholder,shall engage in the requisite dialogue with the counterpart entity. Shareholdings that are deemed not
improvable, even after engaging in dialogue, are to be sold in a timely and appropriate manner.
For each target agenda item, the Company appropriately exercises the voting rights attached to theshares it holds by comprehensively weighing factors such as whether proposals contribute to thesustainable growth of the Company and to the increases in its corporate value over the medium- tolong-term, and whether they contribute to the common interests of the investee’s shareholders.
For shareholdings during this fiscal year, strategic necessities such as maintaining and strengthening
business relationship as well as facilitating business activities, etc. were verified, and theappropriateness of holding the shares in terms of risks etc. was examined based on the above policy.
The result of examinations was reported to the Board of Directors, and the appropriateness of holding
the shares was duly confirmed. The total amounts recorded in the balance sheet and the ratio to total
equity as of the end of this fiscal year are as follows.
Total equity (a)¥1,517,816 million

Total amounts recorded in the balance sheet (b)Ratio (b/a)¥126,111 million
8.3%

The Company, in its efforts to accelerate disposal of shares with less relevance to core businesses,
including the shares in “Ting Hsin (Cayman Islands) Holding Corp.” (¥27,381 million recorded in thebalance sheet and the ratio to total equity at 1.8%), signed a non-binding memorandum of
understanding with a major shareholder of Ting Hsin (Cayman Islands) Holding Corp. in January 2021,
aiming to sign a definitive sale and purchase agreement by the end of the first quarter of FY2021.

50

| Risk Management Initiatives of the Asahi Group |(1) The Asahi Group Enterprise Risk Management
The Asahi Group has introduced enterprise risk management (ERM) for the entire Group. The Asahi
Group effectively and efficiently controls its overall risk that could impede execution of strategies andachievement of objectives defined in the Medium-Term Management Policy based on the Asahi Group
Philosophy through activities such as identifying and evaluating critical risks across all areas that
include strategy, operations, finance, and compliance, building up responding plans, and executing
and monitoring the plans.
The respective companies of the Asahi Group implement ERM on the basis of each business unit,
and report the details of the initiatives to the Risk Management Committee of the Company. The
Committee monitors the initiatives, and its members identify and evaluate critical risk across theGroup, build responding plans, and execute and monitor the plans. All such initiatives are reported
to the Board of Directors, which ascertains the effectiveness of ERM by monitoring the initiatives.
(2) The Asahi Group’s Risk Appetite
The Asahi Group has developed “The Asahi Group Risk Appetite” to specify risks to be acceptedor to be minimized for achieving objectives of the “Medium-Term Management Policy” while
promoting ERM.
“The Asahi Group Risk Appetite” is a policy related to risk management of the Asahi Group. It
serves as a guideline for engaging in ERM and a guideline for opting whether or not to take risks when
decisions are made. It consists of the “Risk Appetite Statement” which shows the Group’s basic stancetoward risk, and the “Specific Risk Appetite” which shows each stance (appetite) for major categories
of risk that greatly affect business execution, premised on the assumption of practical application. The
Company has developed the Appetite through consideration on its Group strategy, risk culture, risk
profile, and stakeholders’ expectations. The Appetite is approved by the Board of Directors and isapplied to the entire Group. The Risk Management Committee monitors its implementation andreports its progress to the Board of Directors. Through the initiatives, the Company promotes
appropriate risk takings across the overall Asahi Group.
The Asahi Group Risk Appetite Statement
The Asahi Group Medium-Term Management Policy seeks to promote “Glocal Value
Creation Management” based on the Asahi Group Philosophy in order to sustainably increase
its corporate value.
In order to achieve the strategic objectives defined in the Policy:•

The Asahi Group achieves organic growth by building high value-added brands, andwith regard to discontinuous growth achieved by M&A activities and innovations, iswilling to take commercial risks in a controlled manner that balance the need for arobust financial position whilst creating value growth for shareholders;•

The Asahi Group delivers excellent quality products and ensures a safe work
environment for everyone at the Asahi Group, both of which are critical priorities at
the heart of Asahi’s success;•

The Asahi Group pursues initiatives to protect the environment and is willing toinnovate to create greater environmental value in society; and•The Asahi Group accepts as little risk of non-compliance with the Asahi Group Codeof Conduct and the Asahi Group Human Rights Principles as possible.

51

3

Systems to Ensure Appropriate Execution of Directors’ Duties in
Conformity With Laws and Regulations and the Articles ofIncorporation, and Other Systems to Ensure Appropriate Business
Operations

Overview of the resolution regarding systems to ensure appropriate business
operations
The Board of Directors passed the following resolution with respect to the above-mentioned systems.
To “Deliver on our great taste promise and bring more fun to life” as stipulated in its groupphilosophy, the “Asahi Group Philosophy,” the Company shall: establish, in accordance with the Companies Act and the Regulation for Enforcement of theCompanies Act, the following basic policies (the “Basic Policies”) to improve systems designed
to ensure the appropriate execution of Directors’ duties in conformity with laws and regulations
and the Articles of Incorporation of the Company and its subsidiaries (herein this section the“Group Companies”) and ensure the appropriate business operations of the Group Companies(herein this section the “Internal Control System”);
 recognize that it is the Representative Director(s) who shall assume the ultimate responsibility forthe improvement of the Internal Control System in accordance with this resolution and demand
the Representative Director(s) to cause the officers in charge, through the respective organizations
and job class they are in charge of, to develop and fully enforce individual internal regulations thatwill be applied to the Company and the entire Asahi Group and are required based on 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 that will be applied to the Company or theentire Asahi Group in a timely and appropriate manner in accordance with changes in conditions
and circumstances.

(1) System to ensure execution of duties by Directors and employees of theCompany 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)

5)
6)

7)

In order to promote “Building value together with all our stakeholders” as stipulated 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 theseregulations.
The Company shall establish a “Compliance Committee” to oversee compliance of the Asahi
Group based on the “The Asahi Group Ethics/Compliance Policies.”
An officer of the Company in charge shall have authority over compliance within the Asahi
Group. The organization in charge of legal affairs shall handle compliance tasks.
The Company shall assign responsible persons in charge of compliance in the Company and
the Group Companies. The responsible person shall make efforts to prioritize compliance inall aspects of business activities at each Group Company.
The Company shall establish a “Clean Line System” and other systems for employees in Japanand overseas, enabling them to blow the whistle on illicit behavior of others.
The Company shall establish “The Asahi Group Sustainable Procurement Principles &Sourcing and Purchasing Policies” addressing mutual cooperation for fair and equitable deals
and social responsibilities between each Group Company and suppliers and a system thatenables suppliers to blow a whistle on breaches of the Policy as necessary. The Company shallinform and spell out these measures to its suppliers to enable the Company to develop an
Internal Control System in cooperation 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 the Company shall establish an internal

52

8)

system on the measures. The Company shall also cooperate closely with industry bodies, local
communities, the police and other external specialist organizations in this field.
The operational details of the aforementioned agencies and systems shall be spelled out undera separately prepared set of internal regulations that will be applied to the Company or theentire 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 andmanaged in accordance with “Document-Management Policies” and other related internal
regulations that will be applied to the Company or the entire Asahi Group.
The aforementioned information shall be preserved and managed in a way accessible byDirectors and Audit & Supervisory Board Members for inspection at any time.
Control over the clerical tasks related to preservation and management of the aforementioned
information shall be determined in accordance with internal regulations that will be applied to
the Company or the entire Asahi Group.

(3) Regulations and other organizational structures of the Asahi Group to 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,” and implement it in a continuous manner.
In addition to having the appropriate organizations manage risk in their respective areas, theCompany shall establish a “Risk Management Committee” to identify and evaluate crosssectional material risk for the entire Asahi Group, and design countermeasures accordingly.
With regard to the risk of failing to maintain product quality, as a food and drink manufacturinggroup, the Asahi Group strongly recognizes their social responsibility to consumers to ensure
the safety and security of their products 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.

(4) System to ensure efficient execution of duties by Directors of the Company
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 to respective Directors.
The Company shall establish “Delegation of Authority” and “The Asahi Group’s Delegationof Authority” stipulating rules of delegation of power and for a mutual checks-and-balances
mechanism among organizations and among Group Companies.
The Company shall ensure the effective utilization of the “Corporate Strategy Board,”
consisting of the Company’s internal Directors and Standing Audit & Supervisory Board
Members by such means as formulating the Asahi Group’s corporate strategy andimplementing progress management.
To maximize operational efficiency, the Company shall utilize indices that provide an objective
and rational way of measuring its management and control of operations; and it shall employ
a unified system of follow-up and evaluation.
To use funds efficiently, a global cash management system among the Company and the Group
Companies is introduced.

(5) System to ensure appropriate operations of the Asahi Group1)

All systems required for the Internal Control, including those for risk management, complianceand 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 operation of the Internal
Control System, in accordance with the conditions and circumstances with which individual
53

2)

3)
4)

companies are facing.
While cooperating with the internal auditing organs established within the Asahi Group, theorganization in charge of internal auditing in the Company shall get a grasp of and evaluate theInternal Control System and discipline in day-to-day tasks within the Asahi Group by directly
and indirectly auditing the Group Companies, and this section shall also conduct the evaluationof internal control related to financial reporting of the Group Companies and submit therelevant 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 ormore 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, forassistance in the activities of the Audit & Supervisory Board Members.

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

2)

When a member of the staff who serves the Audit & Supervisory Board, as stipulated in theprevious 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 amember of the staff who serves the Audit & Supervisory Board shall require the priorconcurrence 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 report on an as-needed basis when asignificant event occurs. When necessary, the Audit & Supervisory Board Members shall beentitled to request reports from the Directors and employees (including from Directors andemployees of the Group Companies).
Directors shall ensure that Audit & Supervisory Board Members have every opportunity toparticipate 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 items of suchmeetings beforehand for Audit & Supervisory Board Members.
Audit & Supervisory Board Members shall at all times have the right to review 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)

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 asignificant 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

54

3)

4)

report the results of the Group Companies’ internal audits to the Audit & Supervisory Board
Member of the Company without delay.
The whistle blowing contacts under the Clean Line System shall be the Company’s Audit &Supervisory Board Members, organization in charge of general and legal affairs, or external
attorneys at law designated by the Company (“external attorneys at law”), and the information
reported to the Company’s organization in charge of general and legal affairs or the external
attorneys at law 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 manner disadvantageous to him/her on the ground of the whistle blow.

(10) Policy on procedures for advance or reimburse expenses incurred inassociation with Audit & Supervisory Board Members’ execution of theirduties, and treatment of other expenses or debts incurred in association withthe execution of their duties
To defray expenses incurred in association with the Audit & Supervisory Board Members’ executionof their duties, the Company shall secure a certain specific amount of budget and shall, in responseto 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 theorganization in charge of internal auditing of the Company and with the Independent Accounting
Auditor.

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 the Company and the Group
Companies and effectively achieve the objectives of internal control, the organization of theCompany in charge of internal auditing cooperates with the internal auditing organs establishedwithin 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 incharge of evaluation of internal control cooperates with the organs in charge of evaluation ofinternal control established within the Asahi Group and performs evaluations of the Group
Companies’ internal control activities pursuant to the “Policies of Management Assessment
and Reporting 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 forcompliance in place in the Company and the Group Companies and conducting education byjob class.
The Company conducts multifaceted and multilayered surveys of compliance awareness andbehavior by conducting a “Compliance Questionnaire” to the employees of the Company and
the Group Companies.
By keeping in place the “Clean Line System,” the Company detects and resolves risk problems
early, and effectively prevents risk problems themselves from occurring.

55

(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 critical risks that could
impede achievement of business objectives across all risk categories such as strategy andoperations. 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 andmonitor such plans. They also report to the Board of Directors with the aim of ascertaining
effectiveness of such initiatives.
The Company has a 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 2020, the Company set up an “Emergencies Response
Headquarters” in response to the worldwide outbreak of the novel coronavirus infection. Whileplacing the safety of customers, business partners, and employees as the top priority, theCompany implemented various measures to prevent the further spread of the infection underthe management of the President and Representative Director as follows: strict observance ofprevention measures according to the guidelines of WHO and health authorities of respective
countries; travel ban in principle to and from the countries and areas of high infection risk; thesuspension and limitation of events which gather many customers such as factory tours andsales promotion activities; and making remote work as its basic work style in Japan.

(4) Business Management of Group Companies
1)2)

With respect to the Group Companies’ business management, the Company has put in place asystem 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 of an individual Director or the responsible persons of the responsibleorganizations of the Company, depending on the degree of their importance.
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 thestatus of his/her business execution 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, and receive reports from Directors, employees, thereby confirming
the status of development and operation of the Internal Control System.
Audit & Supervisory Board Members work to enhance the effectiveness of auditing by finding
opportunities regularly or as needed for exchanging information and views with theorganization in charge of internal auditing, the Independent Accounting Auditor, etc. During
fiscal 2020, Audit & Supervisory Board Members had opportunities to exchange informationand views with the organization in charge of internal auditing for a total of 8 times, with the
Independent Accounting Auditor for a total of 16 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.
The Company ensures that Audit & Supervisory Board Members will be able to smoothly
perform their duties by posting 3 dedicated employees to the Audit & Supervisory Board.

56

4

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 andbusiness policy must properly grasp various matters concerning its business, including the initiatives
to “create appealing products,” to “care about quality and craftsmanship” and to “convey theinspiration to customers,” which form the source of the corporate value of the Asahi Group, and othertangible and intangible management resources thereof, potential effects of forward-looking measuresand other items that constitute the corporate value, and must enable the Company to maintain andincrease 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 not always 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 Board of Directors, provided that such takeover contributes to the increaseof the corporate 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 a transfer of control of the Company should be made based on thewill of the shareholders as a whole.
It shall be noted, however, that there are not a few cases of large-scale share purchases thatwould not contribute to the increase of the corporate value and the common interests of shareholders
of a company, including ones 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 the target company’s board of directors and shareholders to review andexamine details of the proposed purchase or for the target company’s board of directors to make analternative proposal, and ones where the target company’s board of directors would have to conduct
negotiation with the purchaser so as to seek more favorable terms than those initially proposed by
the purchaser.
The person who intends to conduct a large-scale purchase of shares in the Company must havean understanding of the source of the Asahi Group’s corporate value and have the capability tomaintain and enhance it in the medium- and long-term; otherwise, the Asahi Group’s corporate value
and the 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, from such large scale share purchases.

(2) Framework that contributes to realization of the basic policy
1)

Special Measures Contributing to Realization of the Basic Policy
In 2019, the Company established a group philosophy, the “Asahi Group Philosophy,”which articulates the Group’s mission and vision for the future, reaffirms values cherished andhanded down over the years, and serves as a code of conduct for our stakeholders and theGroup’s commitments to them. At the same time, the Company established a “Medium-Term
Management Policy” for the realization of the “Asahi Group Philosophy” and put group-wide
efforts in line with them. The details of the “Asahi Group Philosophy” and the “Medium-Term
Management Policy” are as described on pages 37 - 39.
The Company believes that it will be able to assure the flexibility of its corporate strategy
by setting and carrying out such management policy and will be able to increase its sustained
corporate value and ultimately secure common interests of its shareholders by setting such a
policy as “Engagement Agenda” (agenda for constructive dialogs) and making dialogs withthe stakeholders even more firm, and is striving to further strengthen its corporate governance.
Please refer to pages 44 - 50 for an overview.

57

2)

Efforts to prevent decisions on the Company’s financial and business policy from being
controlled by any person who is inappropriate according to the basic policy
The Company will take appropriate measures against any person who attempts to make alarge-scale purchase in accordance with the Financial Instruments and Exchange Act, theCompanies Act and other related laws and regulations such as requesting provision ofnecessary and sufficient information for shareholders to properly determine whether to approveor disapprove the large-scale purchase, disclosing the opinions, etc. of the Board of Directorsof the Company and endeavoring to secure enough time for shareholders to contemplate thelarge-scale purchase.

(3) Judgment of the Company’s Board of Directors regarding the specificmeasures 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 the corporate value and the common interests ofshareholders 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.

58

5

Overview of the Company(1) Shares Outstanding (As of December 31, 2020)
1)

Total number of authorized shares

2)

Total number of issued shares

3)

Total number of shareholders

4)

Major shareholders

972,305,309(common stock)507,003,362(including 177,512 treasury shares)
129,324(Increased by 22,780 from the end of the previous term)

Number ofshares held(in hundreds)

Percentage ofshares held (%)

The Master Trust Bank of Japan, Ltd. (Trust Account)544,610

10.7

Custody Bank of Japan, Ltd. (Trust Account)

222,510

4.4

The Dai-ichi Life Insurance Company, Limited

160,000

3.2

SMBC Nikko Securities Inc.

115,575

2.3

Fukoku Mutual Life Insurance Company

100,000

2.0

GIC PRIVATE LIMITED - C

96,399

1.9Asahi Kasei Corporation

87,853

1.7

JPMorgan Securities Japan Co., Ltd.

84,289

1.7

Sumitomo Mitsui Banking Corporation

80,280

1.6

Name of shareholder

Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
Total

75,6271.5

1,567,143

30.9

Note:
Shareholding percentages are calculated based on the total number of issued shares less the number of treasury shares.

5)

Other significant matters related to shares
The total number of issued shares increased by 23,417,500 shares due to the issuance of newshares through public offering with the due date of payment on September 14, 2020, and thethird party allotment with the due date of payment on October 13, 2020.

Note to “(1) Shares Outstanding”:
The shares of the Company held by Custody Bank of Japan, Ltd. as trust property for stock compensation (110,442
shares) are excluded from the treasury shares (177,512 shares).

59

(2) Directors and Audit & Supervisory Board Members of the Company
1)

Directors and Audit & Supervisory Board Members

Name

Naoki Izumiya(As of December 31, 2020)
Attended Board of
Position
Directors [D]/Audit &
Supervisory
Areas of responsibility and significant concurrent positions
Board [A] meetings
Chairman of the Board[D] 12/12

External Board Director of Recruit Holdings Co., Ltd.
Outside Director of Obayashi Corporation
Akiyoshi Koji

President and Representative Director, CEO[D] 12/12

Overall Management
Corporate Communications, Research & Development
Outside Director of Imperial Hotel, Ltd.
Atsushi Katsuki

Senior Managing Director and Senior Managing Executive Officer,
CFO (Chief Financial Officer)[D] 12/12

Senior Department Head, Japan Headquarters
Corporate Strategy, Finance, Supply Chain (Procurement)
Alcoholic Beverages Business, Soft Drinks Business, Food BusinessYutaka Henmi

Director and Executive Officer, CSCO (Chief Supply Chain Officer)[D] 12/12

Supply Chain, Quality Assurance
Taemin Park

Director and Executive Officer, CAO (Chief Alliance Officer)[D] 12/12

Alliance and M&AInternational Alcoholic Beverages Business, International NonAlcohol Beverages BusinessKeizo Tanimura

Director and Executive Officer, CHRO (Chief Human Resources
Officer)[D] 12/12

Administration and Governance, ESG
Tatsuro Kosaka

Outside Director[D] 12/12

Representative Director, President of Chugai Pharmaceutical Co.,Ltd.
Yasushi Shingai

Outside Director[D] 12/12

Outside Director of Mitsubishi UFJ Financial Group, Inc.
Outside Director, Dai-ichi Life Holdings, Inc.
Christina L.
AhmadjianOutside Director[D] 12/12

Professor of Graduate School of Business Administration,
Hitotsubashi University
Outside Director of Mitsubishi Heavy Industries, Ltd.
Outside Director of Japan Exchange Group, Inc.
Outside Director of Sumitomo Electric Industries, Ltd.

Yoshihide Okuda

Standing Audit & Supervisory Board Member[D] 12/12[A] 13/13

Naoko Nishinaka

Standing Audit & Supervisory Board Member[D] 9/9[A] 8/8

Outside Audit & Supervisory Board Member[D] 12/12[A] 13/13

Katsutoshi Saito

Advisor of The Dai-ichi Life Insurance Company, Limited
Outside Director of Imperial Hotel, Ltd.
Yumiko Waseda

Outside Audit & Supervisory Board Member
Partner and Attorney at Law of Tokyo Roppongi Law & Patent
Offices

Yutaka Kawakami

Outside Audit & Supervisory Board Member
Outside Audit & Supervisory Board Member of Mitsubishi ResearchInstitute, Inc.
Supervisory Director of Nippon Building Fund Inc.

60

[D] 12/12[A] 13/13[D] 12/12[A] 13/13

Notes:
1. Directors Tatsuro Kosaka, Yasushi Shingai, and Christina L. Ahmadjian are Outside Directors as defined in Item
15, Article 2 of the Companies Act.
2. Audit & Supervisory Board Members Katsutoshi Saito, Yumiko Waseda and Yutaka Kawakami are Outside Audit& Supervisory Board Members as defined in Item 16, Article 2 of the Companies Act.
3. The Company designated 3 Outside Directors Tatsuro Kosaka, Yasushi Shingai, and Christina L. Ahmadjian and
3 Outside Audit & Supervisory Board Members Katsutoshi Saito, Yumiko Waseda and Yutaka Kawakami as
Independent Officers as defined by the Tokyo Stock Exchange and reported to the said exchange.
4. Although the Company has business transactions with The Dai-ichi Life Insurance Company, Limited and Imperial
Hotel, Ltd., as the transaction value for each is minimal, less than 1% of consolidated revenue (or consolidated net
sales) for the Company and the respective companies, there is no special business relationship that could have
impact on the Company’s management.
5. There is no special relationship or significant transactions between the Company and entities where its Outside
Directors or Outside Audit & Supervisory Board Members hold significant concurrent positions.
6. Audit & Supervisory Board Member Yoshihide Okuda was formerly CFO of the Company and has considerable
expertise in finance and accounting.
7. Audit & Supervisory Board Member Yutaka Kawakami has long experience as a certified public accountant; hehas considerable expertise in finance and accounting.
8. 1 Audit & Supervisory Board Member Tetsuo Tsunoda retired upon the expiry of his term of office at theconclusion of the 96th Annual General Meeting of Shareholders held on March 25, 2020.
9. Naoko Nishinaka was newly elected as an Audit & Supervisory Board Member, and she assumed her office at the96th Annual General Meeting of Shareholders held on March 25, 2020. Accordingly, for Audit & Supervisory
Board Member Naoko Nishinaka, the number of Board of Directors meetings and Audit & Supervisory Board
meetings held is different from that of the other Directors and Audit & Supervisory Board Members.

2)

Policies concerning the setting of remunerations paid to Directors and Audit &Supervisory Board Members
A Directors’ remunerations<Basic concepts>
The remunerations for Directors are designed and operated as follows.
To further strengthen the incentive to strive for the Company’s sustainable growth andenhancement of corporate value over the medium- to long-term
Remuneration with a content and level that is effective in continuing to ensure outstanding
human resources with diverse skills
To base on the role and magnitude of responsibilities of the Directors and their contribution to
performance
Remuneration highly variable based on performance linked to management strategy
Remuneration in which benefits and risks are shared with shareholders and which provides an
incentive to management from a standpoint as shareholders
Remuneration determined with reference to external data based on transparent and fair
processes<Composition of remuneration>
The remunerations for Directors comprise basic remuneration, bonuses (annual and medium-term),and stock compensation for Directors (excluding the Outside Directors; hereinafter the “Internal
Directors”) and basic remuneration only for Outside Directors. With the principle that the
remunerations of Internal Directors will be highly linked to performance, the percentage of variable
remuneration (bonus and stock compensation) in the annual income for the President andRepresentative Director will be more than 60%, and the percentage of stock compensation, whichis remuneration that shares benefits and risks with the shareholders, will be around 15%. With
respect to the other Internal Directors, the percentage of variable remuneration is at least 40%, by adesign based on positions and roles.

61<Remuneration level>
The remunerations for Directors are set at a level of remuneration aimed at the achievement of
performance targets, taking into consideration the level of remuneration that is effective forcontinuing to secure outstanding human resources with diverse skills using Japanese companies
with business operations that are the same in scale as those of the Company (top 100 companies bymarket capitalization) as the main group of benchmark companies.
<Fixed remuneration>
The only fixed remuneration for Directors is the basic remuneration paid in a fixed monthly amount.
The basic remuneration is determined by adding the actual expenses paid by the Directors, such as
health checkup expenses to the fixed amount based on their positions and roles.
Revisions of basic remuneration are determined based on changes in position or role, taking into
account such factors as changes in business operations and the status of remuneration levels (thetiming of any revisions is, in principle, each April but there is no requirement for an annual revision).
<Variable remuneration>
As one of the basic concepts for further strengthening the incentive to strive for the Company’ssustainable growth and enhancement of corporate value over the medium- to long-term, the systemdesign for remunerations for Directors has been implemented, with consideration given toincreasing variable remuneration (incentive) as a percentage of annual income as well as
contributing to the Company’s sustainable growth (short-term, medium-term, and long-term) andenhancement of corporate value (in terms of both financial value and social value) through an
incentive system as a whole.
Annual bonus

Medium-term bonus

Stock compensation

Forming an incentive for
Forming a strong incentive continually enhancing
for achieving discontinuous corporate value over thelong term and sharing
growth and medium-term
benefits and risks withperformance
shareholders

Objective

Forming a strong incentive
for sustainable and steady
growth, enhancement infinancial value andachievement of plans

PeriodSingle fiscal year

3 years

3 years

Payment method

Cash

Cash

Stock

Payment timing

March every year

March of the year
following completion of
medium-term plan

On retirement

Consolidated core
operating profit (50%)
Profit attributable toowners of parent (50%)

Financial value indicators(60%)
Social value indicators
(40%)

No

Performance indicators(weighting)
Individual evaluation

Yes

Yes

No

Clawback (repayment of
remuneration) provision

No

No

Yes

<Method for determining remuneration>
Directors’ remunerations are set in line with a resolution at a meeting of the Board of Directors
within the total amount of remunerations resolved in advance at a General Meeting of Shareholders.
When remuneration related resolutions are being made by the Board of Directors, the Compensation
Committee, which has Outside Directors/Audit & Supervisory Board Members constituting amajority of its membership and an Outside Director appointed as its chairperson, acts as an advisory62

body to the Board of Directors, evaluating the content of said resolutions in the interests of greatertransparency and objectivity through fair processes.
B Audit & Supervisory Board Members’ remunerations
Audit & Supervisory Board Members’ remunerations are set by discussion by the Audit &Supervisory Board Members within the total amount of remunerations resolved in advance at a
General Meeting of Shareholders.
Remunerations for an Audit & Supervisory Board Member consist only of basic remuneration paidin a fixed monthly amount, and the level of such basic remunerations is set subject to a mutual
consultation of Audit & Supervisory Board Members according to his/her job responsibilities andstatus distinction between internal and outside and by drawing on outside professional organization’survey data.

63

3)

Remunerations paid to Directors and Audit & Supervisory Board Members
Fixed remuneration
Basic remuneration

Category

Directors[of which,OutsideDirectors]
Audit &
Supervisory
Board Members[of which,Outside Audit &Supervisory
Board Members]

Variable remuneration
Annual bonus

Medium-term bonus Stock compensation

Total
amount
Total
Total
Total
Total
Number amount Number amount Number amount Number amount (million
yen)of persons (million of persons (million of persons (million of persons (million
yen)
yen)
yen)
yen)
9
[3]

343
[51]

6
[–]

205
[–]

6
[–]

81
[–]

6
[–]

82
[–]

711
[51]

6

116

–

–

–

–

–

–

116

[3]

[40]

[–]

[–]

[–]

[–]

[–]

[–]

[40]

Notes:
1. The figures above include 1 Audit & Supervisory Board Member Tetsuo Tsunoda who retired upon the expiry of
his term of office at the conclusion of the 96th Annual General Meeting of Shareholders held on March 25, 2020.
2. A resolution authorizing payments associated with the termination of the retirement benefits for Directors andAudit & Supervisory Board Members to be paid at the time of retirement was passed at the 83rd Annual General
Meeting of Shareholders held on March 27, 2007. As of the end of this fiscal year, the anticipated total amount of
future payments was ¥19 million to 1 Director. The Company plans to pay ¥19 million to 1 Director who is eligible
for such payment and will retire at the conclusion of the 97th Annual General Meeting of Shareholders to be heldon March 25, 2021.
3. The maximum amount of Directors’ remunerations (basic remuneration and bonus) is ¥1,500 million (including¥100 million for Outside Directors) per year (The resolution passed at the 95th Annual General Meeting of
Shareholders held on March 26, 2019). Other than those listed above, the Company has passed the resolution, at
the 95th Annual General Meeting of Shareholders held on March 26, 2019, to pay stock compensation to Directors(excluding Outside Directors) who were elected during the period of the Trust and took office and for whom theCompany contributed up to ¥300 million during the period of the Trust (3 years). The Company may grant up to a
total of 25,000 shares of the Company per fiscal year to all eligible Directors.
4. The amounts of annual bonus and medium-term bonus are the amount that was recorded as cost in this year.
5. The amount of remuneration stated as stock compensation is the amount that was recorded as cost in accordancewith the stock compensation plan that was resolved at the 95th Annual General Meeting of Shareholders held on
March 26, 2019.
6. The maximum amount of Audit & Supervisory Board Members’ remunerations is ¥140 million (including ¥50
million for Outside Audit & Supervisory Board Members) per year (The resolution passed at the 95th Annual
General Meeting of Shareholders held on March 26, 2019).

644) Major activities of Outside Directors and Outside Audit & Supervisory Board Members
Category

OutsideDirectors

Name

Form of participation, etc.

Tatsuro Kosaka

Tatsuro Kosaka attended all Board of Directors meetings held this fiscal year
and actively gave his opinions and recommendations regarding many proposals.
In particular, he participated in discussions and activities that stimulated
substantial and appropriate supervision of the Board of Directors such as asking
questions and raising concerns that grasp the essence of the business executionof the Group overall and each group company in Japan and overseas from theperspective of a manager of a global corporation.
Furthermore, he attended all Nomination Committee meetings held this fiscal
year, and proactively attended the committee, took the initiative in operating thecommittee in a fair and transparent manner, and reported proposals regarding
officer appointments to the Board of Directors as the chairperson of theNomination Committee. As a committee member, he gave specific opinions andrecommendations regarding evaluations, training and assignment for officers
with consideration given to an effective succession plan from the perspective ofa manager.

Yasushi Shingai

Yasushi Shingai attended all Board of Directors meetings held this fiscal year
and actively gave his opinions and recommendations regarding many proposals.
In particular, he participated in discussions and activities that stimulated
substantial and appropriate supervision of the Board of Directors such as group
governance, ESG, raising concerns looking toward management strategy in theultra-long term, using his advanced and extensive experience in global
management.
Furthermore, he attended all Compensation Committee meetings held this fiscal
year, and proactively attended the committee, took the initiative in operating thecommittee in a fair and transparent manner, evaluated the appropriateness andeffectiveness of remuneration plans for officers, and reported proposals
regarding bonus payment to the Board of Directors as the chairperson of theCompensation Committee. As a committee member, he gave his opinions andrecommendations from various angles regarding officers’ remuneration plans
and their operation using his actual experience and broad knowledge incompensation management as an overseas local manager.
In addition, as a member of the Nomination Committee, he attended all
Nomination Committee meetings held this fiscal year, and gave specificopinions and recommendations based on his experience in overseas company
management.

Christina L.
AhmadjianChristina L. Ahmadjian attended all Board of Directors meetings held this fiscal
year, and actively gave her opinions and recommendations regarding many
proposals. In particular, she participated in discussions and activities that
stimulated substantial and appropriate supervision of the Board of Directors suchas making honest and simple inquiries, and raising concerns about theinvigoration of the management of proceedings from a global perspective of
ESG and organizational culture regarding various proposals, from her standpoint
as an expert in corporate governance and organizational culture and using her
experience as an outside officer in other companies.
Furthermore, as a member of the Compensation Committee, she attended allCompensation Committee meetings held this fiscal year, evaluated theappropriateness and effectiveness of remuneration plans for officers, and gavefair opinions and recommendations regarding the reporting of individual officer
evaluations and the bonus amount based on these evaluations, with consideration
given to fair and understandable remuneration plans.

65

CategoryOutside Audit&
Supervisory
Board
Members

Name

Form of participation, etc.
Katsutoshi Saito attended all Audit & Supervisory Board meetings held thisfiscal year, and carried out activities that audit the execution of duties by the
Directors, including the internal control system, such as receiving reports fromStanding Audit & Supervisory Board Members and the internal audit section,
having meetings with the Chairman of the Board and the President andRepresentative Director, CEO, and reviewing the audit status of domestic groupcompanies and the status of activities of overseas group companies’ audit
Katsutoshi Saito committees, etc.
Furthermore, as an Outside Audit & Supervisory Board Member, he attended all
Board of Directors meetings held this fiscal year and proactively madesuggestions from a point of view based on his experience as a manager at global
corporations and institutional investors.
In addition, as a member of the Nomination Committee, he attended all
Nomination Committee meetings and gave specific opinions andrecommendations using his experience as a manager.

Yumiko Waseda

Yumiko Waseda attended all Audit & Supervisory Board meetings held thisfiscal year, and carried out activities that audit the execution of duties by the
Directors, including the internal control system, such as receiving reports fromStanding Audit & Supervisory Board Members and the internal audit section,
having meetings with the Chairman of the Board and the President andRepresentative Director, CEO, and reviewing the audit status of domestic groupcompanies and the status of activities of overseas group companies’ audit
committees, etc.
Furthermore, as an Outside Audit & Supervisory Board Member, she attended
all Board of Directors meetings held this fiscal year and proactively madesuggestions from an expert point of view as an experienced lawyer.
In addition, as a member of the Compensation Committee she attended allCompensation Committee meetings held this fiscal year, evaluated theappropriateness and effectiveness of remuneration plans for officers, and gavefair opinions and recommendations regarding the reporting of individual officer
evaluations and the bonus amount based on these evaluations, with consideration
given to fair and understandable remuneration plans.

YutakaKawakami

Yutaka Kawakami attended all Audit & Supervisory Board meetings held thisfiscal year, and carried out activities that audit the execution of duties by the
Directors, including the internal control system, such as receiving reports fromStanding Audit & Supervisory Board Members and the internal audit section,
having meetings with the Chairman of the Board and the President andRepresentative Director, CEO, reviewing the audit status of domestic groupcompanies and status of activities of Audit & Supervisory Board of overseas
group companies, and having periodic meetings with the finance section.
Furthermore, as an Outside Audit & Supervisory Board Member, he attended all
Board of Directors meetings held this fiscal year and proactively madesuggestions from an expert point of view as an experienced certified public
accountant who is well versed in accounting audits of global corporations.

5) Summary of agreements limiting liability
The Company has entered into an agreement with its Outside Directors and Outside Audit &Supervisory Board Members limiting his/her liability for damages as prescribed in Paragraph 1,
Article 423 of the Companies Act, to either ¥20,000,000 or the minimum amount stipulated byapplicable laws and regulations, whichever is higher.

66

(3) Independent Accounting Auditor
1)

Name of the Independent Accounting Auditor
KPMG AZSA LLC

2)Remunerations paid to the Independent Accounting Auditor for this fiscal year
Remuneration
based on audit
professional
servicesRemuneration
based on non-audit
professional
servicesRemunerations by the Company for this fiscal year

¥235 million¥43 million

Remunerations by the Company’s subsidiaries for this fiscal year

¥149 million–

Total of cash and other financial profits payable by the Company and its
subsidiaries to the Independent Accounting Auditor¥385 million¥43 million

Category

Notes:
1. In its agreement with the Independent Accounting Auditor, the Company makes no distinction between the
remunerations that it pays for auditing services governed by the Companies Act and for auditing services governedby the Financial Instruments and Exchange Act. Consequently, the amount for “Remuneration based on audit
professional services” shown above is a sum of these 2 amounts.
2. Having performed the necessary verifications on the contents of the Independent Accounting Auditor’s audit plan,evaluation and analysis of the audits actually conducted during the previous fiscal year, status of execution of
accounting audit duties, and reasonableness of the basis for calculation of remuneration, the Audit & Supervisory
Board has consented to the amount of remunerations for the Independent Accounting Auditor.
3. Non-audit professional services refer to the services which are outside the scope of Paragraph 1, Article 2 of theCertified Public Accountants Act.
4. In addition to the above, the Company and its subsidiaries such as Asahi Holdings (Australia) Pty Ltd and Asahi
International Ltd paid KPMG, which belongs to the same network as the Company’s Independent Accounting
Auditor, a total of ¥475 million in audit fees and compensation for tax and related services.

3)

Consecutive audit period
51 years
The period stated above denotes the consecutive audit period through which KPMG AZSA or
its predecessor (Asahi & Co.) has been appointed as an auditor of the Company since the predecessor
was incorporated as an audit firm. If the period is counted inclusive of the term for which Asahi &Co.’s predecessor (a sole practitioner) was appointed as an auditor, the period is 60 years.
4)

Names of certified public accountants who performed the duties and number of years of
audit
Hiroyuki Yamada (Number of years of audit: 2 years)
Hiroto Yamane(Number of years of audit: 3 years)
Kei Sakayori(Number of years of audit: 6 years)
The independent Accounting Auditor has appropriately established a rotation schedule regarding
its engagement partners, pursuant to revisions of the Certified Public Accountants Act made in 2003
and 2007. The engagement partners are not involved in carrying out audit services after having been
engaged in such services for 7 consecutive years. The lead engagement partner is not involved incarrying out audit services after having provided such services for 5 consecutive years.
5)

Structure of assistants who supported the audit duties
Certified public accountants: 27
Others: 33
Note: The figures above represent the total number of assistants involved with auditing duties for this fiscal year.

67

6)

Nature of non-audit professional services provided by the Independent Accounting
Auditor
The Company also assigns professional duties to the Independent Accounting Auditor that are
non-audit services such as preparation of comfort letter regarding the public offering and the issuanceof bonds.
7)

Company Policy regarding dismissal of or decision not to reappoint the Independent
Accounting Auditor
If the Independent Accounting Auditor is found to correspond to any of the items prescribed in
Paragraph 1, Article 340 of the Companies Act, the Audit & Supervisory Board shall be entitled todismiss the Independent Accounting Auditor subject to the consent of all Audit & Supervisory Board
Members, in which case the Audit & Supervisory Board Member appointed by the Audit &Supervisory Board reports on the fact that said Independent Accounting Auditor has been dismissed
and the reason for dismissal, at the first General Meeting of Shareholders held after such dismissal.
When it is reasonably recognized that the Independent Accounting Auditor is no longer able toexecute its duties in an appropriate manner, the Audit & Supervisory Board shall determine, as
necessary, the contents of a proposal for dismissing or not re-appointing said Independent Accounting
Auditor to be submitted to the General Meeting of Shareholders. On the basis of this determinationby the Audit & Supervisory Board, the Board of Directors shall offer to the General Meeting of
Shareholders a resolution to dismiss or not to reappoint the Independent Accounting Auditor.

Note: The stated amounts in the Business Report are the figures after truncating fractions less than the
representative unit, and the stated percentages are the figures after rounding off fractions to the representative
unit, unless otherwise noted.

68

CONSOLIDATED FINANCIAL STATEMENTS (IFRS)CONSOLIDATED STATEMENT OF FINANCIAL POSITION(million yen)

As ofDecember 31, 2020

As ofDecember 31, 2019
[Reference]

ASSETS
Current assets:
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax receivables
Other financial assets
Other current assets

48,460378,924
183,166
24,403
4,226
32,252

48,489407,621
171,717
24,94051,27731,067

Subtotal

671,434

735,113

Assets held for sale

17,652–

Total current assets

689,086

735,113

Non-current assets:
Property, plant and equipment
Goodwill and intangible assets
Investments accounted for using equity method
Other financial assets
Deferred tax assets
Net defined benefit assets
Other non-current assets

810,2642,701,985
5,256
160,064
27,596
19,27825,846735,022
1,398,422
8,755
198,657
15,734
20,65528,424

Total non-current assets

3,750,292

2,405,674

Total assets

4,439,378

3,140,788

69

CONSOLIDATED STATEMENT OF FINANCIAL POSITION(million yen)

As ofDecember 31, 2020

As ofDecember 31, 2019
[Reference]

LIABILITIES and EQUITY
LIABILITIESCurrent liabilities:
Trade and other payables
Bonds and borrowings
Income tax payables
Provisions
Other financial liabilities
Other current liabilities

477,098
924,760
35,68312,01989,519113,440

423,810408,259
39,555
14,40756,265
133,375

1,652,521

1,075,673

134–

1,652,655

1,075,673

Non-current liabilities:
Bonds and borrowings
Net defined benefit liabilities
Deferred tax liabilities
Other financial liabilities
Other non-current liabilities

898,867
24,093
205,275
134,729
5,941

534,955
24,778147,969
106,240
2,890

Total non-current liabilities

1,268,906

816,835

Total liabilities

2,921,562

1,892,509

220,044
161,783
967,230(1,031)
168,097

182,531
119,163918,523(77,011)103,107

1,516,124

1,246,314

1,691

1,965

Total equity

1,517,816

1,248,279

Total liabilities and equity

4,439,378

3,140,788

Subtotal
Liabilities directly associated with assets held for sale
Total current liabilities

EQUITY
Issued capital
Share premium
Retained earnings
Treasury shares
Other components of equity
Total equity attributable to owners of parent
Non-controlling interests

70

CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(million yen)

For the year ended
December 31, 2020

For the year ended
December 31, 2019
[Reference]

Revenue
Cost of sales

2,027,762(1,283,150)

2,089,048(1,297,302)

Gross profit
Selling, general and administrative expenses
Other operating income
Other operating expense

744,612(576,789)
14,870(47,526)

791,745(578,774)
6,078(17,613)

Operating profit
Finance income
Finance costs
Share of profit (loss) of investments accounted forusing equity method
Gain (loss) on sales of investments accounted forusing equity method

135,167
7,230(14,982)

201,436
8,094(13,012)285

872(2,300)–

Profit before tax
Income tax expense

125,399(32,815)

197,391(56,100)

Profit92,584

141,290

Profit attributable to:
Owners of parent
Non-controlling interests

92,826(241)

142,207
(916)

Total

92,584

141,29071

[Reference] CONSOLIDATED STATEMENT OF CASH FLOWS (Summary)(million yen)

For the year ended
December 31, 2020

For the year ended
December 31, 2019125,399
123,277

197,391
113,0362,300–

48,666
3,306(3,302)(16,609)22,881(10,722)
2,955(9,214)

1,627

1,338

52,315336,982
4,182(10,049)(55,256)(7,472)
310,192
3,818(6,875)(53,666)

275,859

253,469(90,743)(10,237)
11,869(85,322)(5,841)
8,856

1,552

–

(1,165,974)(23,942)

83

741

10,077

1,842

Net cash flows from (used in) investing activities(1,243,372)(103,666)

Cash flows from (used in) financing activities:
Increase (decrease) in financial liabilities
Proceeds from issuance of shares
Purchase of treasury shares
Proceeds from disposal of treasury shares
Dividends paid
Other

850,440
75,027(309)
81,307(46,265)(3,441)(111,367)–(31)
17(48,556)
1,096

Net cash flows from (used in) financing activities

956,759(158,841)

Effect of exchange rate changes on cash and cash
equivalents

10,725209(29)(8,828)Cash and cash equivalents at beginning of period

48,48957,317

Cash and cash equivalents at end of period

48,46048,489Cash flows from (used in) operating activities:
Profit before tax
Depreciation and amortization expenses
Loss (gain) on sales of investments accounted forusing equity method
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accrued alcohol tax
Increase (decrease) in net defined benefit assets andliabilities
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash flows from (used in) operating activities
Cash flows from (used in) investing activities:
Purchase of fixed assets
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from sales of investment in an entity
accounted for using equity method
Purchase of shares of subsidiaries and others
resulting in change in scope of consolidation
Proceeds from sales of shares of subsidiaries
resulting in change in scope of consolidation
Other

Net increase (decrease) in cash and cash equivalents72

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

As ofDecember 31, 2020

As ofDecember 31, 2019
[Reference]

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

21,633
246,972
1,799
21,8499,222(5,556)

16,814
219,5212,288
18,67755,529(2,898)

Total current assets

295,920309,933

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

15,830402
7
0303
15,037
1,717
60

14,893
394
142
0
873
15,037901
314

Total property, plant and equipment
Intangible assets:
Right to use facilities
Trademark right
SoftwareLeased assets
Other

33,35832,55739
7,981
11,262
102
6

39
8,957
9,626
122
5

Total intangible assets
Investments and other assets:
Investment securities
Shares of subsidiaries and associates
Investments in capital of subsidiaries andassociates
Long-term loans receivable from subsidiaries andassociates
Deferred tax assets
Other
Allowance for doubtful accounts

19,392

18,75038,1922,680,491

11,886
1,520,490

4,519

4,519

–

300

14,648
2,469
(183)

–
2,855
(187)

2,740,138

1,539,864

Total non-current assets

2,792,889

1,591,172

Total assets

3,088,810

1,901,105

Total investments and other assets

73

NON-CONSOLIDATED BALANCE SHEET(million yen)

As ofDecember 31, 2020

As ofDecember 31, 2019
[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

650,585
176,000
88,328
573
1,424
4,688
144,371
299
342

195,20282,000125,000
328
1,144
4,462
46,058
224
296

521

396

1,067,133

455,113881,396
24,200
1,418
–
1,126
908,140

356,604
186,362
781
4,452
1,147
549,346

1,975,274

1,004,459

220,216
194,511
87,977
106,533

182,531
151,683
50,292
101,391

Retained earnings
Other retained earnings
General reserve
Retained earnings brought forward

703,383
703,383
195,000
508,383

601,846
601,846
195,000
406,846

Treasury shares(1,031)(77,011)

1,117,079

859,049

Total current liabilities
Non-current liabilities:
Bonds payable
Long-term borrowings
Lease obligations
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities
NET ASSETS
Shareholders’ equity:
Share capital
Capital surplus
Legal capital surplus
Other capital surplus

Total shareholders’ equity
Valuation and translation adjustments:
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

(458)

3,641

(3,085)33,954

Total valuation and translation adjustments(3,543)37,596

Total net assets

1,113,536

896,646

Total liabilities and net assets

3,088,810

1,901,105

74

NON-CONSOLIDATED STATEMENT OF INCOME(million yen)

For the year ended
December 31, 2020

For the year ended
December 31, 2019
[Reference]

Operating revenue
Operating income of the Group
Real estate lease revenue
Dividends from subsidiaries and associates
Other

191,290
34,764
1,795
154,730–

200,895
33,858
1,831
163,307
1,897

Operating expenses
Operating profit
Non-operating income
Interest and dividend income
Other

32,215
159,075
1,209
1,000
208

34,601
166,294
1,271
1,004
267

Non-operating expenses
Interest expenses
Foreign exchange losses
Bond issuance costs
Provision of allowance for doubtful accounts
Other

14,435
5,726
226
3,582
2,654
2,245

5,002
3,190
216
–
1,108
487

Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associates

145,848
1,438
1
23
1,414

162,562
941
7
933
–

Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on sales of investment securities
Loss on valuation of shares of subsidiaries andassociates
Loss on sales of shares of subsidiaries and associates
Other

910
270
–

2,481
163
59

–

2,005

90
549

–
253

Profit before income taxes

146,377

161,023

Income taxes - current

(17)

826

Income taxes - deferred(1,412)

239

Profit147,806

159,95775

| AUDIT REPORTS
Independent accounting auditor’s report on consolidated financial statements
Independent Auditor’s ReportFebruary 4, 2021
To the Board of Directors of Asahi Group Holdings, Ltd.:KPMG AZSA LLC
Tokyo Office, Japan
Hiroyuki Yamada (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hiroto Yamane (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Kei Sakayori (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
OpinionWe have audited the consolidated financial statements, which comprise the consolidated
statement of financial position, the consolidated statement of profit or loss, the consolidated
statement of changes in equity and the related notes of Asahi Group Holdings, Ltd. (“theCompany”) and its consolidated subsidiaries (collectively referred to as “the Group”), as at
December 31, 2020 and for the year from January 1, 2020 to December 31, 2020 in accordancewith Article 444-4 of the Companies Act.
In our opinion, the consolidated financial statements referred to above present fairly, in allmaterial respects, the consolidated financial position and the results of operations of the Groupfor the period, for which the consolidated financial statements were prepared, in accordance withthe latter part of Article 120-1 of the Regulation on Corporate Accounting that prescribes someomissions of disclosure items required under International Financial Reporting Standards.
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 Consolidated Financial Statements section of our report. We are independent of
the Group in accordance with the ethical requirements that are relevant to our audit of theconsolidated financial statements in Japan, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.

76

Responsibilities of Management, the Audit & Supervisory Board Members and the Audit &Supervisory Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with the latter part of Article 120-1 of the Regulation on Corporate
Accounting that prescribes some omissions of disclosure items required under International
Financial Reporting Standards, and for such internal control as management determines isnecessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing theGroup’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern in accordance with the latter part of Article 120-1 of the Regulation on Corporate
Accounting that prescribes some omissions of disclosure items required under International
Financial Reporting Standards.
The Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible foroverseeing the directors’ performance of their duties including the design, implementation andmaintenance of the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and toissue an auditor’s report that includes our opinion. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these consolidated financial
statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we
exercise professional judgment and maintain professional skepticism throughout the audit. We
also:

Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

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

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability tocontinue 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 disclosures in the consolidated financial
statements 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 Group to cease to continue as a going concern.



Evaluate whether the presentation and disclosures in the consolidated financial statements
are in accordance with the latter part of Article 120-1 of the Regulation on Corporate
Accounting that prescribes some omissions of disclosure items required under International
Financial Reporting Standards, the overall presentation, structure and content of theconsolidated financial statements, including the disclosures, and whether the consolidated
financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of theentities or business activities within the Group to express an opinion on the consolidated
77

financial statements. We are responsible for the direction, supervision and performance ofthe group audit. We remain solely responsible for our audit opinion.
We communicate with the Audit & Supervisory Board Members and the Audit & Supervisory
Board regarding, among other matters, the planned scope and timing 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, related safeguards.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
We do not have any interest in the Group which is required to be disclosed pursuant to theprovisions 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’sReport as required by the Companies Act for the conveniences of the reader.

78

Independent accounting auditor’s report on non-consolidated financial statements
Independent Auditor’s ReportFebruary 4, 2021
To the Board of Directors of Asahi Group Holdings, Ltd.:KPMG AZSA LLC
Tokyo Office, Japan
Hiroyuki Yamada (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hiroto Yamane (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Kei Sakayori (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
OpinionWe have audited the non-consolidated financial statements, which comprise the non-consolidatedbalance sheet, the non-consolidated statement of income, the non-consolidated statement ofchanges in net assets and the related notes, and the supplementary schedules (“the financial
statements and others”) of Asahi Group Holdings, Ltd. (“the Company”) as at December 31, 2020and for the year from January 1, 2020 to December 31, 2020 in accordance with Article 436-2-1of 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 of operations of the Company for the period, forwhich the financial statements and others were prepared, in accordance with accounting principles
generally accepted in Japan.
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 other ethical responsibilities in accordance withthese requirements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Responsibilities of Management, the Audit & Supervisory Board Members and the Audit &Supervisory Board for the Financial Statements and Others

79

Management is responsible for the preparation and fair presentation of the financial statements
and others in accordance with accounting principles generally accepted in Japan, and for suchinternal control as management determines is necessary to enable the preparation of financial
statements and others that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements and others, management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, matters related togoing concern in accordance with accounting principles generally accepted in Japan.
The Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible foroverseeing the directors’ performance of their duties including the design, implementation andmaintenance 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 andothers 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 areconsidered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these financial statements andothers.
As part of our audit in accordance with auditing standards generally accepted in 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 that is sufficient and appropriate to provide a basis for our opinion.

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

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis ofaccounting 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 tocontinue 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 disclosures in 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 a going concern.



Evaluate whether the presentation and disclosures in the financial statements and others arein accordance with accounting standards generally accepted in Japan, the overall presentation,
structure and content of the financial statements and others, including the disclosures, andwhether the financial statements and others represent the underlying transactions and eventsin 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 and timing 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, related safeguards.

80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 theprovisions 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’sReport as required by the Companies Act for the conveniences of the reader.

81

REPORT OF THE AUDIT & SUPERVISORY BOARD
Audit Report
The Audit & Supervisory Board has prepared the following report based on the audit reports preparedby individual Audit & Supervisory Board Members related to the Directors’ execution of their duties
during the 97th fiscal year, the period from January 1, 2020 to December 31, 2020, after due
discussions and consultations among the Audit & Supervisory Board Members.
1. Methods used in audits by the individual Audit & Supervisory Board Members and by the
Audit & Supervisory Board and content of audits(1) The Audit & Supervisory Board determined the audit policies and division of duties, and received
reports from each Audit & Supervisory Board Member regarding the status and results of theaudits, as well as reports from the Directors and Independent Accounting Auditor on theexecution of their duties, and requested explanations of those reports when necessary.
(2) Each Audit & Supervisory Board Member, in accordance with the audit policies, division ofduties, etc. based on the audit standards established by the Audit & Supervisory Board, soughtto achieve mutual understanding with the Directors, the section in charge of internal audit andother employees, strove to collect information and create an audit environment, attended
meetings of the Board of Directors and other important meetings, received reports from Directors,
other employees regarding the execution of their duties and requested explanations whennecessary, reviewed documents related to important decisions, and inspected the operations andproperty of the head office and other locations. With respect to “systems to ensure appropriate
execution of Directors’ duties in conformity with laws and regulations and the Articles ofIncorporation and other systems to ensure appropriate business operations, which is included in
the Business Report (internal control systems)” (Item 6, Paragraph 4, Article 362 of theCompanies Act and Paragraphs 1 and 3, Article 100 of the Regulation for Enforcement of theCompanies Act), the Audit & Supervisory Board received reports regularly from Directors andother employees regarding the status of the establishment and implementation of the systems,sought additional explanations as necessary, and expressed opinions thereon. The Audit &Supervisory Board Members discussed the contents of the “basic policy concerning the persons
who control decisions on the Company’s financial and business policies” (Item 3, Article 118 of
the Regulation for Enforcement of the Companies Act) included in the Business Report, basedon discussions of the Board of Directors and other parties. With respect to subsidiaries, the Audit& Supervisory Board Members took steps to facilitate communications and exchange
information with the Directors and Corporate Auditors of subsidiaries and, when necessary,received reports from subsidiaries on the status of their businesses. Using the foregoing methods,
the Audit & Supervisory Board Members reviewed the Business Report and the supplementaryschedules for this fiscal year.
(3) The Audit & Supervisory Board oversaw and verified that the Independent Accounting Auditor
maintained its independence and carried out appropriate audits, moreover, and received reports
from the Independent Accounting Auditor regarding the execution of its duties and requested
explanations when necessary. The Audit & Supervisory Board also received notifications fromthe Independent Accounting Auditor to the effect that “a system for the maintenance ofappropriate execution of duties” (included in Article 131 of the Regulation on Corporate
Accounting) in accordance with the “standards for quality control of audits” (BusinessAccounting Council; October 28, 2005), etc., and requested explanations when necessary. Basedon the above activities, the Audit & Supervisory Board examined the non-consolidated financial
statements (non-consolidated balance sheets, non-consolidated statement of income, nonconsolidated statement of changes in net assets, and notes to the non-consolidated financial
statements), the supplementary schedules, and the consolidated financial statements(Consolidated statement of financial position, consolidated statement of profit or loss,
consolidated statement of changes in equity, and notes to the consolidated financial statements)
for this fiscal year.

82

2. Results of the Audit(1) Results of audit of the Business Report, etc.
 In our opinion, the Business Report and the supplementary schedules present the situationof the Company fairly, in compliance with the provisions of applicable laws and regulations
and the Articles of Incorporation.
 In our opinion, there are no wrongful acts or material violations of applicable laws andregulations or the Articles of Incorporation in the execution of their duties by the Directors.
 In our opinion, the content of the resolution by the Board of Directors regarding internal
control systems is appropriate, and, furthermore, content of the Business Report regarding
the internal control systems and the execution by the Directors have been appropriate.
 In our opinion, the Company’s basic policy concerning the persons who control decisions
on the Company’s financial and business policies in the Business Report is appropriate.
We acknowledge that the measures implemented to achieve this basic policy are consistent
with the basic policy, will not harm the common interest of the Company’s shareholders,
and will not serve the purpose of maintaining the positions of the Company’s Directors andAudit & Supervisory Board Members.
(2) Results of the audit of non-consolidated financial statements and the supplementaryschedules
In our opinion, the auditing methods used by KPMG AZSA LLC, the Independent Accounting
Auditor, and the results of its audit are appropriate.
(3) Results of the audit of consolidated financial statements
In our opinion, the auditing methods used by KPMG AZSA LLC, the Independent Accounting
Auditor, and the results of its audit are appropriate.
February 5, 2021
Audit & Supervisory Board
Asahi Group Holdings, Ltd.
Yoshihide Okuda (Seal)
Standing Audit & Supervisory Board Member
Naoko Nishinaka (Seal)
Standing Audit & Supervisory Board Member
Katsutoshi Saito (Seal)
Outside Audit & Supervisory Board Member
Yumiko Waseda (Seal)
Outside Audit & Supervisory Board Member
Yutaka Kawakami (Seal)
Outside Audit & Supervisory Board Member83