Securities Code: 2502

ASAHI GROUP HOLDINGS, LTD.

CONVOCATION NOTICE OF THE 95th
ANNUAL GENERAL MEETING OF
SHAREHOLDERSTABLE OF CONTENTS
Convocation Notice2
Reference Materials for
General Meeting of Shareholders
7
Company Proposals:
DATE AND TIME
March 26 (Tuesday), 2019 at 1:00 p.m. (JST)Item 1 Appropriation of Retained Earnings
7(Reception start time: 11:30 a.m.)
Item 2 Partial Amendments to the Articles of Incorporation
8
Item 3 Election of nine (9) Directors
PLACE
9Banquet Room “Tsuru,” Banquet Floor of “The Main”
Item 4 Election of two (2) Audit & Supervisory Board Members 21
of Hotel New Otani, 4-1, Kioi-cho, Chiyoda-ku, Tokyo Item 5 Revision of Amount of Remuneration, etc. for Directors 27
DEADLINE FOR EXERCISING VOTING RIGHTS Item 6 Revision of Amount of Remuneration, etc. for
Audit & Supervisory Board Members
30
VIA POSTAL MAIL AND INTERNET, ETC.
No later than 5:30 p.m., March 25 (Monday), 2019 (JST) Item 7 Revision of Stock Compensation Plan for Directors
31
Shareholder Proposal:
Item 8 Election of one (1) Audit & Supervisory Board Member 36
English Translation of Original JapaneseBusiness Report
37
This is a translation of the original notice in Japanese.
Consolidated Financial Statements
72
In the event of any discrepancy, the original notice in
Non-Consolidated Financial Statements
76
Japanese shall prevail.
Audit Reports
79Dear Shareholders:
You are cordially invited to attend
the 95th Annual General Meeting of Shareholders
of Asahi Group Holdings, Ltd., which will beheld as described in the following particulars.
Sincerely,
March 4, 2019

Akiyoshi Koji
President and Representative Director

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

1

CONVOCATION NOTICE OF
THE 95 ANNUAL GENERAL MEETING OF SHAREHOLDERSth

1. DATE AND TIME
March 26 (Tuesday), 2019, at 1:00 p.m. (JST) (Reception start time: 11:30 a.m.)

2. PLACE
Banquet Room “Tsuru,” Banquet Floor of “The Main” of Hotel New Otani, 4-1, Kioi-cho,
Chiyoda-ku, Tokyo(Please note that if Banquet Room “Tsuru” becomes full, you will be guided to another venue.)

3. PURPOSES
Items to be reported:
Business Report, Consolidated Financial Statements, Non-Consolidated Financial
Statements and Reports of the audit results of the consolidated financial statements by
the Independent Accounting Auditor and the Audit & Supervisory Board for the 95th term,from January 1, 2018 to December 31, 2018.

Items to be resolved:
Company Proposals:
Item 1: Appropriation of Retained Earnings
Item 2: Partial Amendments to the Articles of Incorporation
Item 3: Election of nine (9) Directors
Item 4: Election of two (2) Audit & Supervisory Board Members
Item 5: Revision of Amount of Remuneration, etc. for Directors
Item 6: Revision of Amount of Remuneration, etc. for Audit & Supervisory Board
Members
Item 7: Revision of Stock Compensation Plan for Directors
Shareholder Proposal:
Item 8: 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 theConsolidated Financial Statements” of the Consolidated Financial Statements; and “Non-Consolidated Statement of Changes in Net
Assets” and “Notes to the Non-Consolidated 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.

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
A 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) Attending the General Meeting of Shareholders in person
Date and time of the General Meeting of Shareholders:March 26 (Tuesday), 2019, at 1:00 p.m. (JST) (Reception start time: 11:30 a.m.)Please submit the voting form at the reception desk at the venue.
Please also bring this notice with you, to help us preserve resources.
You are advised to arrive at the venue early, as the reception desk is expected to become extremely
crowded immediately before the commencement of the meeting.
Please note that anyone other than a shareholder who is entitled to exercise voting rights (e.g.,
non-shareholding proxy, person accompanying the shareholder) will not be allowed inside thevenue.

If you are unable to attend the meeting in person, you may exercise your voting rights via either
postal mail or the internet, etc. Please review the attached “REFERENCE MATERIALS FOR
GENERAL MEETING OF SHAREHOLDERS,” and exercise your voting rights no later than
5:30 p.m., March 25 (Monday), 2019 (JST) as instructed in (2) and (3) below on pages 3 - 6.

(2) Voting via Postal Mail
Deadline for exercising voting rights:
To be received by 5:30 p.m., March 25 (Monday), 2019 (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 toeach 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), while against the shareholder’s proposal.

3

<Items Proposed by the Company>
Items 1, 2, 5, 6 and 7
If you dissent:
Mark a ○If you consent:
Mark a ○in the box marked “賛”in the box marked “否”

Items 3 and 4
If you selectively veto certain candidates:
For all candidates
Mark a ○ in the box marked “賛” and write
If you consent:
If you dissent:
Mark a ○ in the box Mark a ○ in the box the number of each candidate you choose toveto.
marked “賛”marked “否”<Item Proposed by shareholder>
Item 8
If you consent:
Mark a ○If you dissent:
Mark a ○in the box marked “否”

in the box marked “賛”The Board of Directors of the Company is opposed to this shareholder proposal.

Regarding the video of the General Meeting of Shareholders of the Company
A video of the proceedings of the 95th Annual General Meeting of Shareholders will beavailable on the “About the General Meeting of Shareholders” page of our website.
https://www.asahigroup-holdings.com/ir/shareholders_guide/shareholders_meeting.html(Japanese only)
Date and time that the video will be made available: Noon March 27 (Wednesday), 2019 (JST)(Planned)(3) Voting via Internet, etc.
Deadline for exercising voting rights via the Internet, etc.:
To be entered by 5:30 p.m., March 25 (Monday), 2019 (JST)For details on exercising voting rights via the internet, etc., please refer to following pages.
* The online voting website and Help Desk information are available only in Japanese.

4

<Guide to exercising voting rights via the internet, etc.*>
Deadline for exercising voting rights via the Internet, etc.:
To be entered by 5:30 p.m., March 25 (Monday), 2019 (JST)* Institutional investors may use the platform operated for institutional investors by ICJ, Inc. to electronically exercise
the voting rights.

Method 1: “Smart Voting” New
1. If you intend to exercise your voting rights by smartphone, you can simply exercise
voting rights without entering your voting code and password by scanning the QR
code® located on the bottom right of 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 have exercised your voting rights,
please access the website in accordance with “Method 2: Entering voting code and password” noted below,
login by entering 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.

52. Enter the “voting code” (議決権行使コード) indicated on the voting form.

Voting code

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

3. Enter the “password” (パスワード) indicated on the voting form.

Password

Enter the “password” (パスワード)
Click on “NEXT” (“次へ”)* 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 their voting form. Such shareholders are asked to enter
the “password” that they specified when registering their e-mail addresses.

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 be counted.

If you are unclear about the procedure for voting via the Internet using a PC, smartphone ormobile phone, please contact the following Help Desk for inquiries.
Sumitomo Mitsui Trust Bank, Limited
Stock Transfer Web Support Phone No.
Toll-free (within Japan): 0120-652-031 (9:00 a.m. to 9:00 p.m.) (JST)* “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 site cannot be accessed via cellular phone.
E-mail address registration website: https://www.web5106.net

6REFERENCE MATERIALSFOR GENERAL MEETING OF SHAREHOLDERS
Agenda Items and Reference Information
Company Proposals(Items 1 to 7)

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” formulated in 2016, Asahi Group Holdings, Ltd.
(the “Company”), as a holding company of the Group (the Company and its subsidiaries arecollectively or individually referred to as the “Group” or the “Asahi Group”), has been working
toward the strengthening of “earnings power” by positioning the domestic profit base as thecornerstone of earnings and the overseas business as a growth engine, and has been using thegenerated free cash flows for investing in foundation for growth including M&A deals while seeking
stronger financial conditions. Meanwhile, in terms of shareholder returns, efforts have been madeto achieve a dividend payout ratio* of 30% (International Financial Reporting Standards (IFRS)
basis) by fiscal year 2018.
Based on the aforementioned policy and taking into consideration a variety of factors, including theCompany’s consolidated financial condition and achievement for this fiscal year, the Company
proposes a year-end dividend of ¥54 per share, as follows. Since the Company previously paid out¥45 per share as an interim-period dividend, the annual dividend for this fiscal year will amount to¥99 per share, which is an increase of ¥24 per share from the previous fiscal year.
*

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 (net of tax expenses).

(1) Type of dividend asset
Cash(2) Allocation of dividend assets to shareholders and total amount of allocation¥54 per share of common stock
Total amount of payout: ¥24,738,392,574(3) Effective date of dividends of Retained Earnings
March 27, 20197

Item 2: Partial Amendments to the Articles of Incorporation
The Company proposes to amend the Articles of Incorporation of the Company as follows:

1. Reason for the amendments
The Company will discontinue the system of Advisors to the Board in order to further
increase the transparency of management from the perspective of strengthening thecorporate governance system, and will delete the provision for Advisors to the Board in
Article 21 (Representative Director, Executive Directors, and Advisors to Board) of theCompany’s Articles of Incorporation in addition to making any necessary amendments.

2. Substance of the amendments
The proposed amendments are as follows:(Amended parts are indicated by underlining.)

Current Articles

Proposed Amendments

Chapter 4. Directors and Board of Directors

Chapter 4. Directors and Board of Directors

Article 21. Representative Director, Executive
Directors, and Advisors to Board

Article 21. Representative Director andExecutive Directors

1. The Board of Directors of the Company shall 1. The Board of Directors of the Company shallappoint Representative Directors by its
appoint Representative Directors by its
resolution.
resolution.
2. The Representative Directors shall represent
the Corporation and execute the business of
the Company.

2. The Representative Directors shall represent
the Corporation and execute the business of
the Company.

3. The Board of Directors of the Company may 3. The Board of Directors of the Company may
appoint one Chairman of the Board, one
appoint one Chairman of the Board, one
President, and one or more Vice Chairman ofPresident, and one or more Vice Chairman of
the Board, Executive Vice Presidents, Senior
the Board, Executive Vice Presidents, Senior
Managing Directors and Managing Directors
Managing Directors and Managing Directors
as Executive Directors by its resolution.
as Executive Directors by its resolution.
4. The Board of Directors of the Company may
appoint one or more Advisors to the Board by
its resolution.

(Deleted)8

Item 3: Election of nine (9) 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, and expertise required by the Company, with reference to the requirements for
Directors and Audit & Supervisory Board Members, which are determined based on the Asahi
Group Philosophy, the corporate philosophy of the Company, and management strategies.
Furthermore, the Company aims for Outside Directors to be persons who meet the requirements
of independent officers as defined by the Company such as corporate managers, experts, andothers, and to be at least one-third of the Directors.
The Company therefore asks the shareholders to elect the following nine (9) 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 the members
and which is chaired by an Outside Director who is an independent officer.
Candidate
NumberName (Age)Position and Responsibilities in the Company

Attended
Board ofDirectors
meetings

1

Naoki Izumiya (70)
• Reappointment

Chairman and Representative Director
Overall Management

13/13

2

Akiyoshi Koji (67)
• Reappointment

President and Representative Director, CEO
Overall Management

13/13

3

Atsushi Katsuki (59)
• Reappointment

Managing Director and Managing Corporate Officer
Overseas Business Strategy and Alliance
Soft Drinks Business
Overseas Non-Alcoholic Beverages Business

13/13

4

Tatsuro Kosaka (66)
• Reappointment• Outside• Independent

Outside Director

13/13

5

Yasushi Shingai (63)
• Reappointment• Outside• Independent

Outside Director

10/10

6

Yutaka Henmi (55)
• New candidate

Corporate Officer
Supply Chain Optimization—

7

Taemin Park (55)
• New candidate

Corporate Officer
General Manager of Business Development Section—

8

Keizo Tanimura (53)• New candidate

Corporate Officer
Global and Local Talent Management—

9

Christina L. Ahmadjian (60)
• New candidate• Outside• Independent——

Notes:
1.
2.
3.

The age, position and responsibilities are as of this Annual General Meeting of Shareholders.
Attended Board of Directors meetings is the number of times the Director attended Board of Directors meetings held in
FY2018.
As candidate for Director Yasushi Shingai was newly elected at the 94th Annual General Meeting of Shareholders heldon March 27, 2018, the above number of Board of Directors meetings held that he could attend is different from other
Directors.
Reappointment: candidate for reappointment
Outside: candidate for Outside Director

New candidate: candidate for new appointment
Independent: candidate for independent director/auditor

9Candidate Number

Name

Note to Appointment

1

Naoki Izumiya

Reappointment

Date of Birth (Age)Owned Shares of the Company
Tenure (at the conclusion of this Annual
General Meeting of Shareholders)
Attended BOD* meetings (FY2018)

August 9, 1948 (70 years old)
52,200 shares
16 years
13/13

Reasons for recommending Naoki Izumiya as a candidate for Director
Since being appointed a Director of the Company in 2003, Naoki Izumiya has served as President andRepresentative Director of the Company; President and Representative Director, CEO of the Company;
Chairman and Representative Director, CEO of the Company; and since 2018, as Chairman and
Representative Director of the Company. As Chairman of the Board of Directors he has taken a central rolein improving the effectiveness of the Board of Director’s functions through fair and open proceedings andreform of governance which strengthened the involvement of Outside Directors. In addition to having
experience as a manager of the Company over many years, he possesses the “experience, insight, expertise,
and ability” required as a Director of the Company. In particular, he possesses a high level of insight andexpertise relating to the most important issues for the enhancement of corporate value over the medium- tolong-term, such as corporate governance. Accordingly, we deem that Naoki Izumiya is a necessary humanresource for increasing the effectiveness of the decision-making and oversight functions of the Board of
Directors in the aim for sustainable growth and enhancement of corporate value over the medium- to longterm, and thus we recommend his reappointment as a Director.
Position and Responsibilities
Position: Chairman and Representative Director
Responsibilities: Overall Management
Career Summary
Apr. 1972 Joined the Company
Mar. 2000 Corporate Officer, Senior General Manager of Group Management Strategy Headquarters
Oct. 2000 Corporate Officer, Senior General Manager of Strategy Planning Headquarters
Sep. 2001 Corporate Officer, Deputy General Manager of Tokyo Metropolitan Headquarters, General
Manager of Tokyo BranchMar. 2003 Director
Mar. 2004 Managing Director
Mar. 2006 Managing Director, Managing Corporate Officer, Senior General Manager of Sales &Marketing Headquarters for Alcoholic Beverages
Mar. 2009 Senior Managing Director, Senior Managing Corporate Officer
Mar. 2010 President and Representative Director
Mar. 2014 President and Representative Director, CEO
Mar. 2016 Chairman and Representative Director, CEO
Mar. 2018 Chairman and Representative Director(to the present)
Significant Concurrent Positions
External Board Director of Recruit Holdings Co., Ltd., Outside Director of Obayashi Corporation
Candidate’s special interests in the Company
There are no special interests between Naoki Izumiya and the Company.
*BOD stands for Board of Directors.

10Candidate Number

Name

Note to Appointment

2

Akiyoshi Koji

Reappointment

Date of Birth (Age)Owned Shares of the Company
Tenure (at the conclusion of this Annual
General Meeting of Shareholders)
Attended BOD meetings (FY2018)

November 8, 1951 (67 years old)
15,900 shares
12 years
13/13

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 andRepresentative Director of Asahi Breweries, Ltd., President and Representative Director, COO of theCompany, and since 2018, President and Representative Director, CEO of the Company. He has a trackrecord that includes leading efforts to achieve the quantitative and qualitative management targets of themedium-term management plan through constructing a new growth platform through the dramatic expansionof global business, revising the business portfolio, and other measures, and creating a framework forbecoming a Glocal Value Creation Company, through the establishment of a new corporate philosophy. He
possesses the “experience, insight, expertise, and ability” required as a Director of the Company, including
experience as a manager of the Company over many years. In particular, he possesses a high level of ability
required (foresight, decisiveness, and executive ability) for optimizing decision-making aimed at theCompany’s sustainable growth. Accordingly, we deem that Akiyoshi Koji is a necessary human resource forincreasing the effectiveness of the decision-making and oversight functions of the Board of Directors in theaim for sustainable growth and enhancement of corporate value over the medium- to long-term, and thus werecommend his reappointment as a Director.
Position and Responsibilities
Position: President and Representative Director, CEO
Responsibilities: Overall Management
Career Summary
Apr. 1975 Joined the Company
Sep. 2001 Corporate Officer
Mar. 2003 Managing Director, Senior General Manager of Planning Division of Asahi Soft Drinks Co.,
Ltd.
Mar. 2006 Senior Managing Director, Senior General Manager of Planning Division of Asahi Soft Drinks
Co., Ltd.
Mar. 2007 Managing Director, Managing Corporate 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)
Candidate’s special interests in the Company
There are no special interests between Akiyoshi Koji and the Company.

11

Candidate Number

Name

Note to Appointment

3

Atsushi Katsuki

Reappointment

Date of Birth (Age)Owned Shares of the Company
Tenure (at the conclusion of this Annual
General Meeting of Shareholders)
Attended BOD meetings (FY2018)

March 17, 1960 (59 years old)
2,598 shares
2 years
13/13

Reasons for recommending Atsushi Katsuki as a candidate for Director
Atsushi Katsuki has been engaged, at the Asahi Group, in alliance and M&A operations, and CEO of an
overseas operating company and a regional headquarters company, etc. He has extensive experience
related to local management overseas, and possesses the corporate management experience, global
knowledge and inter-cultural competency, and financial knowledge required as a Director of theCompany. Furthermore, He was appointed a Director of the Company in 2017, and since 2018, he has a
track record that includes being responsible for alliances and M&As, and Soft Drinks Business andOverseas Non-Alcoholic Beverages Business and promoting the restructuring of the business portfolio
through selection and concentration, particularly the restructuring of the Southeast Asia business.
Accordingly, we deem that the “experience, insight, expertise, and ability” possessed by Atsushi Katsuki,
particularly his global management skills, are necessary for increasing the effectiveness of the decisionmaking and oversight functions of the Board of Directors in the aim for sustainable growth andenhancement of corporate value over the medium- to long-term, and thus we recommend his
reappointment as a Director.
Position and Responsibilities
Position: Managing Director and Managing Corporate Officer
Responsibilities: Overseas Business Strategy and Alliance
Soft Drinks Business, Overseas Non-Alcoholic Beverages 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 Corporate Officer of the Company
Director, Group CEO of Asahi Holdings (Australia) Pty Ltd
Mar. 2017 Director, Corporate Officer of the Company
Mar. 2018 Managing Director, Managing Corporate Officer(to the present)
Candidate’s special interests in the Company
There are no special interests between Atsushi Katsuki and the Company.

12

Candidate Number

Name

Note to Appointment
Reappointment
Outside4
Tatsuro Kosaka
Independent
Date of Birth (Age)January 18, 1953 (66 years old)
Owned Shares of the Company― shares
Tenure (at the conclusion of this Annual
3 years
General Meeting of Shareholders)
Attended BOD meetings (FY2018)
13/13
Reasons for recommending Tatsuro Kosaka as a candidate for Outside Director
Tatsuro Kosaka possesses the extensive experience and high level of insight as a corporate manager required
as a Director of the Company, including having served as the CEO of a global corporation and being
responsible for its overall management, and management and supervisory functions for global business at
the corporation. Furthermore, as an Outside Director he has provided appropriate oversight for businessexecution through active opinions and recommendations on the Company’s overall management in addition
to contributing to the fair and transparent consideration of the succession plan for Directors of the Company
as the chairperson of the Nomination Committee. Accordingly, we deem that the “experience, insight,
expertise, and ability” possessed by Tatsuro Kosaka, as represented by his high level of corporate
management skills, are necessary for increasing the effectiveness of the decision-making and oversightfunctions of the Board of Directors in the aim for sustainable growth and enhancement of corporate value
over the medium- to long-term, and thus we recommend his reappointment as an Outside Director.
Position
Outside Director
Career Summary
Apr. 1976 Joined Chugai Pharmaceutical Co., Ltd.
Oct. 2002 Vice President, General Manager of Corporate Planning Dept. of Chugai PharmaceuticalCo., 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.
(to the present)
Mar. 2016 Director of the Company(to the present)
Significant Concurrent Positions
Representative Director, President of Chugai Pharmaceutical Co., Ltd.
Views on independence
The Group maintains transactional relationships with neither Tatsuro Kosaka nor entities where heconcurrently 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 withno potential for conflict of interests with general shareholders. Moreover, as Tatsuro Kosaka meets therequirements for independent director/auditor as defined by the Tokyo Stock Exchange, we haveregistered him as an independent director/auditor as stipulated by the said Exchange.

13

Candidate’s special interests in the Company
There are no special interests between Tatsuro Kosaka and the Company.
Regarding agreements limiting the liability
To enable him to contribute fully in his role as an Outside Director, the Company has entered into anagreement 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 by applicable laws and regulations, whichever is higher. If hiselection is approved, the current agreement will be extended.

14Candidate Number

Name

Note to Appointment
Reappointment
Outside5
Yasushi Shingai
Independent
Date of Birth (Age)January 11, 1956 (63 years old)
Owned Shares of the Company― shares
Tenure (at the conclusion of this Annual
1 year
General Meeting of Shareholders)
Attended BOD meetings (FY2018)
10/10
Reasons for recommending Yasushi Shingai as a candidate for Outside Director
Yasushi Shingai possesses the extensive experience and high level of insight as a corporate manager
required as a Director of the Company, including having served as the Chief Financial Officer of a global
corporation as well as directing acquisitions of, and integrations with, foreign companies. Furthermore, as
an Outside Director he has provided appropriate oversight for business execution through active opinions
and recommendations on the Company’s overall management in addition to contributing to fair andtransparent decisions on the remuneration for the Company’s Directors as the chairperson of theCompensation Committee. Accordingly, we deem that the “experience, insight, expertise, and ability”
possessed by Yasushi Shingai, as represented by his extensive experience and high level of insight related
to global management, are necessary for increasing the effectiveness of the decision-making andoversight functions of the Board of Directors in the aim for sustainable growth and enhancement ofcorporate value over the medium- to long-term, and thus we recommend his reappointment as an Outside
Director.
Position
Outside Director
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. 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.
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 in such transactions accountfor less than 1% of the consolidated revenue (or consolidated net sales) of the Company and the company.
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 independence with nopotential for conflict of interests with general shareholders. Moreover, as Yasushi Shingai meets therequirements for independent director/auditor as defined by the Tokyo Stock Exchange, we haveregistered him as an independent director/auditor as stipulated by the said Exchange.

15

Candidate’s special interests in the Company
There are no special interests between Yasushi Shingai and the Company.
Regarding agreements limiting the liability
To enable him to contribute fully in his role as an Outside Director, the Company has entered into anagreement 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 by applicable laws and regulations, whichever is higher. If hiselection is approved, the current agreement will be extended.

16Candidate Number

Name

Note to Appointment

6

Yutaka Henmi

New candidate

Date of Birth (Age)August 22, 1963 (55 years old)

Owned Shares of the Company

3,240 shares

Reasons for recommending Yutaka Henmi as a candidate for Director
Yutaka Henmi has extensive experience in business execution in production sections in the Asahi Group,
having been engaged in production operations, primarily related to engineering, and having served as
President of a company supporting the production technology of the Asahi Group, including overseas
operations. He possesses supply chain management skills and insight into ESG (environmental sector)
required as a Director of the Company. Furthermore, since his appointment as Corporate Officer of theCompany in 2017, he has a track record which includes constructing overseas local production systems inconjunction with global business expansion. Accordingly, we deem that the “experience, insight, expertise,
and ability” possessed by Yutaka Henmi, particularly his global supply chain management ability, arenecessary for increasing the effectiveness of the decision-making and oversight functions of the Board of
Directors in the aim for sustainable growth and enhancement of corporate value over the medium- to longterm, and thus we recommend his appointment as a new Director.
Position and Responsibilities
Position: Corporate Officer
Responsibilities: Supply Chain Optimization
Career Summary
Apr. 1987 Joined the Company
Apr. 2015 Senior Officer of the Company
President of Asahi Group Engineering Co., Ltd.
Mar. 2016 Senior Officer, General Manager of Production Section of the Company
Mar. 2017 Corporate Officer, General Manager of Production Section
Sep. 2018 Corporate Officer responsible for Supply Chain Optimization(to the present)
Candidate’s special interests in the Company
There are no special interests between Yutaka Henmi and the Company.

17

Candidate Number

Name

Note to Appointment

7

Taemin Park

New candidate

Date of Birth (Age)January 25, 1964 (55 years old)

Owned Shares of the Company

61 shares

Reasons for recommending Taemin Park as a candidate for Director
Taemin Park has extensive experience in strategy formulation and execution of alliances in overseas
business, having been engaged in alliance and M&A operations, including overseas, and as Director of an
overseas regional headquarters company in the Asahi Group. He possesses alliance strategy formulation
skills and insight on trends in the overseas alcoholic beverage and soft drink industry required as a
Director of the Company. Furthermore, since his appointment as Corporate Officer of the Company in2017, he has a track record which includes acquisitions in the alcoholic beverage business in Western
Europe and Central and Eastern Europe and the sale of a business in Indonesia. Accordingly, we deem thatthe “experience, insight, expertise, and ability” possessed by Taemin Park, particularly his high level of
insight regarding the Company’s overseas business and the industry, are necessary for increasing theeffectiveness of the decision-making and oversight functions of the Board of Directors in the aim forsustainable growth and enhancement of corporate value over the medium- to long-term, and thus werecommend his appointment as a new Director.
Position and Responsibilities
Position: Corporate Officer
Responsibilities: General Manager of Business Development Section
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 the Company
Mar. 2017 Corporate Officer, General Manager of Business Development Section(to the present)
Candidate’s special interests in the Company
There are no special interests between Taemin Park and the Company.

18

Candidate Number

Name

Note to Appointment

8

Keizo Tanimura

New candidate

Date of Birth (Age)August 11, 1965 (53 years old)

Owned Shares of the Company

5,123 shares

Reasons for recommending Keizo Tanimura as a candidate for Director
Keizo Tanimura has extensive experience in the business execution of administrative sections, primarily
human resources, in the Asahi Group, having been engaged in human resource and general administrationin several companies, including overseas, and as a Director at an overseas regional headquarters company.
He possesses the global knowledge, inter-cultural competency, and insight related to human resources
required as a Director of the Company. Furthermore, since his appointment as Corporate Officer of theCompany in 2017, he has a track record which includes the establishment of an executive human resources
and remuneration plan that is in line with corporate governance. Accordingly, we deem that the“experience, insight, expertise, and ability” possessed by Keizo Tanimura, particularly his insight
regarding human resources from a global perspective and governance, are necessary for increasing theeffectiveness of the decision-making and oversight functions of the Board of Directors in the aim forsustainable growth and enhancement of corporate value over the medium- to long-term, and thus werecommend his appointment as a new Director.
Position and Responsibilities
Position: Corporate Officer
Responsibilities: Global and Local Talent Management
Career Summary
Apr. 1989 Joined the Company
Apr. 2016 Senior Officer, General Manager of Human Resources Section
Mar. 2017 Corporate Officer, General Manager of Human Resources Section
Sep. 2018 Corporate Officer responsible for Global and Local Talent Management(to the present)
Candidate’s special interests in the Company
There are no special interests between Keizo Tanimura and the Company.

19

Candidate Number

Name

9

Christina L. Ahmadjian

Date of Birth (Age)Note to Appointment
New candidate
OutsideIndependent

March 5, 1959 (60 years old)

Owned Shares of the Company― shares

Reasons for recommending Christina L. Ahmadjian as a candidate for Outside Director
Christina L. Ahmadjian has not been involved in corporate management in the past except as an outside
officer. However, as a university professor, through research that includes corporate governance, diversity,and international comparison of corporate governance, she possesses a high level of insight and expertise onorganizational culture and corporate governance from the global perspective necessary as a Director of theCompany. Accordingly, we deem that the “experience, insight, expertise, and ability” possessed by Christina
L. Ahmadjian, as represented by high level of insight and expertise that enable her to evaluate corporate
governance from a global perspective, are necessary for increasing the effectiveness of the decision-making
and oversight functions of the Board of Directors in the aim for sustainable growth and enhancement ofcorporate value over the medium- to long-term, and thus we recommend her appointment as a new Outside
Director.
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)
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.
Views on independence
The Group maintains transactional relationships with neither Christina L. Ahmadjian nor Hitotsubashi
University, 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 she maintains sufficient independence withno potential for conflict of interests with general shareholders. Moreover, as Christina L. Ahmadjian meetsthe requirements for independent director/auditor as defined by the Tokyo Stock Exchange, we haveregistered her as an independent director/auditor as stipulated by the said Exchange.
Candidate’s special interests in the Company
There are no special interests between Christina L. Ahmadjian and the Company.
Regarding agreements limiting the liability
If election of Christina L. Ahmadjian is approved, the Company plans to newly enter into an agreementwith her that limits her liability for damages as prescribed in Paragraph 1, Article 423 of the Companies
Act in order to enable her to contribute fully in her role as an Outside Director. Under the terms of thisagreement, such liability will be limited to ¥20 million or to the minimum limited amount stipulated byapplicable laws and regulations, whichever is higher.

20

Item 4: Election of two (2) Audit & Supervisory Board Members

At the conclusion of this Annual General Meeting of Shareholders, the terms of office of Audit &Supervisory Board Members Akira Muto and Yumiko Waseda will expire.
To ensure balance and diversity in terms of the knowledge, experience, and ability for the entire
board deemed necessary for sustainable growth and the increase of corporate value of theCompany over the medium- to long-term, the Company has decided that the Audit & Supervisory
Board is to be composed of suitable persons reflecting the requirements of Directors and Audit &Supervisory Board Members derived from the “Asahi Group Philosophy,” the corporate
philosophy of the Company, and management strategy, and that the Audit & Supervisory Board
will include at least one Audit & Supervisory Board Member with an appropriate knowledge offinance/accounting and at least one Audit & Supervisory Board Member with an appropriate
knowledge of legal affairs. Furthermore, three of the Audit & Supervisory Board Members will
be Outside Audit & Supervisory Board Members who meet the requirements for independent
officers which have been established by the Company, and be elected 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 two (2) candidates to fill the
Audit & Supervisory Board Member positions.
The nomination of the candidates for the position of Audit & Supervisory Board Members has
been deliberated at the voluntary “Nomination Committee,” of which independent
directors/auditors form a majority of the members and which is chaired by an outside director
who is an independent officer.
This proposal is submitted with the prior consent of the Audit & Supervisory Board.

21

Candidate Number

Name

1

Yumiko Waseda

Date of Birth (Age)Note to Appointment
Reappointment
OutsideIndependent

January 29, 1960 (59 years old)

Owned Shares of the Company
Tenure (at the conclusion of this Annual
General Meeting of Shareholders)
Attended BOD meetings (FY2018)
Attended ASB* meetings (FY2018)― shares
4 years
13/13
12/12

Reasons for recommending Yumiko Waseda as a candidate for Outside Audit & Supervisory Board Member
Yumiko Waseda has not been involved in corporate management in the past except as an Outside Officer.
However, through her many years of practice as an attorney she possesses expert knowledge on corporate
law and a high level of insight that enable her to audit management from the perspective of laws andregulations required as an Audit & Supervisory Board Member of the Company. Furthermore, throughactive opinions and recommendations as an Outside Audit & Supervisory Board Member, she has provided
appropriate auditing of the duties of the Directors of the Company in addition to contributing to fair andtransparent decision-making on the remuneration for the Company’s Directors as a member of theCompensation Committee. Accordingly, we deem that Yumiko Waseda is a necessary human resource forstrengthening the functions of the Company’s Audit & Supervisory Board in the aim for sustainable growthand enhancement of corporate value over the medium- to long-term, and thus we recommend herreappointment as an Outside Audit & Supervisory Board Member.
Position
Outside Audit & Supervisory Board Member
Career Summary
Apr. 1985 Completed courses at the Legal Training and Research Institute of the Supreme Court
Registered as an Attorney at Law
Joined Matsuda Masayuki Law & Patent Office (current Mori Hamada & Matsumoto)Apr. 2013 Joined Tokyo Roppongi Law & Patent Offices
Jan. 2014 Partner of Tokyo Roppongi Law & Patent Offices(to the present)
Mar. 2015 Audit & Supervisory Board Member of the Company(to the present)
Significant Concurrent Positions
Partner and Attorney at Law of Tokyo Roppongi Law & Patent Offices
Views on independence
The Group maintains transactional relationships with neither Yumiko Waseda nor entities where she
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 she maintains sufficient independence withno potential for conflict of interests with general shareholders. Moreover, as Yumiko Waseda meets therequirements for independent director/auditor as defined by the Tokyo Stock Exchange, we haveregistered her as an independent director/auditor as stipulated by the said Exchange.

22Candidate’s special interests in the Company
There are no special interests between Yumiko Waseda and the Company.
Regarding agreements limiting the liability
To enable her to contribute fully in her role as an Outside Audit & Supervisory Board Member, theCompany has entered into an agreement with Yumiko Waseda that limits her liability for damages asprescribed in Paragraph 1, Article 423 of the Companies Act. Under the terms of this agreement, herliabilities are limited to ¥20 million or to the minimum limited amount stipulated by applicable laws andregulations, whichever is higher. If her election is approved, the current agreement will be extended.
*ASB stands for Audit & Supervisory Board.

23

Candidate Number

Name

Note to Appointment

2

Yoshihide Okuda

New candidate

Date of Birth (Age)January 3, 1956 (63 years old)

Owned Shares of the Company

6,300 shares

Reasons for recommending Yoshihide Okuda as a candidate for Audit & Supervisory Board Member
Yoshihide Okuda has primarily been involved in finance and accounting at the Asahi Group, including
serving as Corporate Officer, General Manager of Finance Department. Since being appointed as a
Director of the Company in 2013, after first working as the Chief Financial Officer, he has been
responsible for management sections, including General & Legal Affairs Management, Human Resources,
IT, and Audit, as well as the Alcoholic Beverage Business. From this experience, he possesses a high levelof expertise on finance and accounting, a high level of insight on compliance, risk management andinternal auditing, and an extensive knowledge of the Company’s business, particularly the Alcoholic
Beverage Business, required as an Audit & Supervisory Board Member of the Company. Accordingly, wedeem that Yoshihide Okuda is a necessary human resource for strengthening the functions of theCompany’s Audit & Supervisory Board in the aim for sustainable growth and enhancement of corporate
value over the medium- to long-term, and thus we recommend his appointment as a new Audit &Supervisory Board Member.
Career Summary
Apr. 1978 Joined Konishiroku Photo Industry Co., Ltd. (current Konica Minolta, Inc.)
Sep. 1988 Joined the Company
Mar. 2010 Corporate Officer, General Manager of Finance Department
Mar. 2011 Corporate Officer, General Manager of Finance Department of the Company
Senior Managing Director of Asahi Management Services Co., Ltd. (current Asahi Professional
Management Co., Ltd.)
Jul. 2011
Corporate Officer, General Manager of Finance Section of the Company
Senior Managing Director of Asahi Management Services Co., Ltd.
Sep. 2012 Corporate Officer responsible for promoting efficiency (administrative sections overall) of theCompany
Senior Managing Director of Asahi Professional Management Co., Ltd.
Mar. 2013 Director, Corporate Officer of the Company
President and Representative Director of Asahi Professional Management Co., Ltd.
Mar. 2015 Managing Director, Managing Corporate Officer of the Company
President and Representative Director of Asahi Professional Management Co., Ltd.
Mar. 2017 Senior Managing Director, Senior Managing Corporate Officer of the Company(to the present)
Candidate’s special interests in the Company
There are no special interests between Yoshihide Okuda and the Company.
Notes:
1. The age and position are as of this Annual General Meeting of Shareholders.
2. Candidate for Audit & Supervisory Board Member Yoshihide Okuda will retire from the position of Senior Managing
Director and Senior Managing Corporate Officer of the Company at the conclusion of this Annual General Meeting of
Shareholders.

24[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”) andaccordingly 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
the Group 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 officeof Outside Directors/Audit & Supervisory Board Members*6;
9. A party who receives substantial donations*7 from the Group (or if the party receiving such
donations is an incorporated entity, association or 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 towhom there are special grounds for deeming there to be potential for conflict of interests
with general shareholders.
*1. “Executive” refers to an executive as defined in Item 6, Paragraph 3, Article 2 of the Ordinance for
Enforcement of the Companies Act, and includes both executive directors and employees, but does not include
Audit & Supervisory Board Members.
*2. “Party for whom the Group is a major business partner” refers to a party 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 mostrecent fiscal year amount to 2% or more of the Company’s consolidated revenue, or a party who loans to theGroup an amount equivalent to 2% or more of the Company’s consolidated total assets as of the end of themost 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 of25

such organization’s total revenues for the most recent fiscal year).
*5. “Major shareholder” refers to a person or incorporated entity that directly or indirectly holds 10% or more of
the Company’s total voting rights.
*6. “Relationship involving cross-assumption of office of Outside Directors/Audit & Supervisory Board Members”
refers to a relationship where an executive of the Group serves as an outside director/audit & supervisory board
member of another company, and an executive of that company serves as an Outside Director/Audit &Supervisory Board Member of the Company.
*7. “Substantial donations” refers to annual donations of 10 million yen or more made during the most recent fiscal
year.
*8. “Important person” refers to Directors (excluding Outside Directors), executive officers, Corporate Officers,
and other executives in positions of General Manager or above; certified public accountants belonging toauditing firms or accounting offices; attorneys at law belonging to legal professional corporations or law firms;
councilors, directors or other officers belonging to incorporated foundations, incorporated associations,educational institutions and other incorporated entities; and other persons objectively and reasonably deemed to
be in positions of similar importance.
*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.

26

Item 5: Revision of Amount of Remuneration, etc. for Directors
The total amount of remuneration, etc. for the Directors of the Company was approved at the83rd Annual General Meeting of Shareholders held on March 27, 2007 as an annual amount of
up to ¥760 million (includes ¥50 million for Outside Directors) comprised of basic
remuneration and bonus and has continued at this amount up to the present. Separately from
this, it was resolved at the 92nd Annual General Meeting of Shareholders held on March 24,
2016, that the Company would make cash contributions of not more than ¥220 million during
the period of the trust (3 years), and pay performance-linked stock compensation to Directors(excluding Outside Directors) appointed during the period of the trust.
It has been more than ten years since the previous revision of the total amount of remuneration,etc. During this period, the Company has further increased its “earnings power” through theconsolidation of domestic business in addition to achieving non-continuous growth due to the
expansion of the growth platform through the acquisition of European business, and thestructure of the business foundation has changed dramatically.
Being aware of these changes, the Company established the “Asahi Group Philosophy,” which
is its new corporate philosophy, this year, in addition to updating the “Medium-Term
Management Policy” and deciding to continue promoting concrete challenges aimed at
becoming a “Glocal Value Creation Company.”
Based on the aforementioned circumstances, the Company proposes to newly set up a“Medium-Term Bonus Plan (Cash-Based)” to further reinforce the motivation to achieve
medium-term performance objectives, and to revise the total amount of remuneration, etc. for
the Directors to an annual amount of up to ¥1,500 million (this includes ¥100 million for theOutside Directors, but does not include the employee portion of the salaries and bonuses of
those employees serving concurrently as Director). This is aimed at further strengthening the
incentive to strive for enhancement of the Company’s corporate value and sustainable growthover the medium- to long-term, and to continue securing outstanding human resources withdiverse skills in a global management environment that is changing rapidly and is difficult topredict. It is proposed that the total amount shall be the total amount of basic remuneration andbonuses (annual, medium-term), and that stock compensation for Directors shall be provided forunder a framework separate to this total amount, and determined by a resolution of a meeting ofshareholders. Accordingly, Item 7 “Revision of Stock Compensation Plan for Directors,” hasbeen submitted separately to this Annual General Meeting of Shareholders.
The level of the total amount of remuneration, etc. being proposed was established based on acomprehensive consideration of such factors as the record of past payments, the forecast
payments if targets are achieved based on future management plans, and the number of
Directors, with the premise that the remuneration for the Company’s Directors will be highly
performance-based being linked to management strategy in line with the strategy for the
remuneration of the Directors formulated this year. Specifically, this level takes into account the
expectation that payments under the Medium-Term Bonus Plan set up to further reinforce themotivation to achieve performance objectives over the medium term (3 years), and to strengthen
the link between remuneration and performance, will be made all together in the year following
the end of the performance evaluation period (3 years), and payments will be made within thelimits of the total amount of remuneration, etc. proposed here.
In addition, although there are currently ten (10) Directors (three (3) of whom are Outside
Directors), if Item 3 “Election of nine (9) Directors” is approved as originally proposed, thenumber of Directors will be nine (9) (three (3) of whom are Outside Directors).
In addition to confirming that the newly formulated strategy for the remuneration of the
Directors is a system of remuneration for the Directors that appropriately follows theCompany’s corporate philosophy and management strategy, it is positioned as a statement that
explains this approach inside and outside the Company. The strategy was reviewed by theCompensation Committee, of which independent officers form a majority of the members andwhere an Outside Director who is an independent officer serves as the Chairman, and resolvedby the Board of Directors.
The Company’s strategy for the remuneration of the Directors is composed of (i) Basic Policy;(ii) Structure of Remuneration; (iii) Level of Remuneration; (iv) Fixed Remuneration; (v)Variable Remuneration; and (vi) Method for Determining Remuneration, and an outline of eachpart is as follows.
27

(i)Basic concepts
The remuneration, etc. for the Directors of the Company is designed and operated in line withthe following basic concepts.
• 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(ii) Composition of remuneration
The remuneration, etc. for the Directors of the Company comprises basic remuneration, bonuses(annual and medium-term), and stock compensation for Directors (excluding the Outside
Directors. Hereinafter referred to as the “Inside Directors” in this Item 5) and basic remuneration
only for Outside Directors. With the principle that the remuneration, etc. of Inside Directors will
be highly linked to performance, the percentage of variable remuneration (bonus and stockcompensation) in the annual income for the President and Representative Director will be morethan 60%, and the percentage of stock compensation, which is remuneration that shares benefits
and risks with the shareholders, will be around 15%. With respect to the other Inside Directors,
the percentage of variable remuneration is at least 40%, by a design based on positions and roles.
Structure of Remuneration for the President and Representative Director (Remuneration
Model when 2019 Performance Targets have been achieved)(iii) Remuneration level
The remuneration, etc. for the Company’s Directors is set at a level of remuneration aimed at
the achievement of performance targets, taking into consideration the level of remuneration thatis effective for continuing 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(sales, market capitalization, etc.) as the main group of benchmark companies.
(iv) Fixed remuneration
The only fixed remuneration for the Company’s 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 theirpositions. 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 (the timing of any revisions is, in principle, each April but there is norequirement for an annual revision).
(v) 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, thesystem design for remuneration, etc. for the Company’s Directors has been implemented basedon the following main points, with consideration given to increasing variable remuneration(incentive) as a percentage of annual income as well as contributing to the Company’ssustainable growth (short-term, medium-term, and long-term) and enhancement of corporate28

value (in terms of both financial value and social value) through an incentive system as a whole.
•
Establish a new “Medium-Term Bonus Plan (Cash-Based)” to form a strong incentive forachieving medium-term performance•
Change to a method of evaluation for the annual bonus that combines comparison with theprevious fiscal year and the current fiscal year’s target achievement for a strong incentive
to strive for both sustainable enhancement in financial value and achievement of plans•
Introduce social value indicators in addition to financial indicators as performanceindicators for the Medium-Term Bonus Plan•
Establish the optimal performance indicators for each incentive plan so as to lead tocomprehensive enhancement of financial value•
Introduce mechanisms to reflect individual evaluations in the annual bonus and theMedium-Term Bonus Plan in order to reward the individual contributions of Directors•
Focus the objective of stock compensation on “increasing the incentive for Directors andAudit & Supervisory Board Members to strive for continually enhancing corporate value
over the long term and sharing benefits and risks with shareholders”
Comparison of Various Incentive Plans for the Directors
Annual Bonus
Medium-Term Bonus Stock Compensation
PeriodSingle fiscal year
3 years
3 years
Payment method
Cash
Cash
Stock
March of the year
Payment timing
March every year
following completion
On retirementof medium-term plan
Consolidated core
Financial value
operating profit (50%)
indicators (60%)
Performance(No)
indicators (weighting) Profit attributable toSocial value indicators
owners of parent
(40%)
(50%)
Individual evaluation
Yes
Yes
(No)
Clawback (repaymentof remuneration)
(No)
(No)
Yes
provision(vi) Method for determining remuneration
Remuneration, etc. for the Company’s Directors is determined through transparent and fair
processes based on approval or report at the Board of Directors following consideration at theCompensation Committee, of which independent officers form a majority of the members andwhere an Outside Director who is an independent officer serves as the Chairman. Furthermore,
the Compensation Committee uses objective, external data as necessary in order to ensure fairdecisions.
In addition, the Compensation Committee discusses the disclosure of remuneration, etc. for theCompany’s Directors from such perspectives as social conformity and accountability toshareholders, and reports to the Board of Directors as necessary.

29

Item 6: Revision of Amount of Remuneration, etc. for Audit &Supervisory Board Members
The total amount of remuneration, etc. for the Audit & Supervisory Board Members of theCompany was approved by resolution at the 83rd Annual General Meeting of Shareholders heldon March 27, 2007 as an annual amount of up to ¥120 million (includes ¥40 million for Outside
Audit & Supervisory Board Members) comprised of basic remuneration and has continued at
this amount up to the present.
It has been more than ten years since the previous revision of the total amount of remuneration,etc. and the content of the duties of Audit & Supervisory Board Members, who audit theexecution of duties by the Directors, has expanded alongside the dramatic change in the
structure of the Company’s business base due to full-scale globalization, which includes theacquisition of European business. Furthermore, when the Company strengthens corporate
governance, the roles required of the Audit & Supervisory Board Members become greater andmore important, including the flexible and active exercise of authority, submission of
appropriate opinions to the Board of Directors and the management team, and the performanceof oversight in collaboration with Board of Directors by the Audit & Supervisory Board
Members.
Based on this, the Company would like to revise the total amount of remuneration, etc. (onlybasic remuneration) for the Audit & Supervisory Board Members to an annual amount of up to¥140 million (includes ¥50 million for Outside Audit & Supervisory Board Members).
Currently there are five (5) Audit & Supervisory Board Members (three (3) of whom are Outside
Audit & Supervisory Board Members). If the shareholders approve Item 4 “Election of two (2)Audit & Supervisory Board Members” as originally proposed, the Audit & Supervisory Board
Members will be five (5) (three (3) of whom are Outside Audit & Supervisory Board Members).
This proposal is submitted with the prior consent of the Audit & Supervisory Board.

30

Item 7: Revision of Stock Compensation Plan for Directors
1. Reason for the proposal and reasons justifying such revision of the compensation plan
In 2016, the Company introduced a “Performance-Linked Stock Compensation Plan”(hereinafter referred to as the “Current Plan”) in order to increase the motivation of theCompany’s Directors (excluding the Outside Directors. Hereinafter referred to as the“Directors” in this Item 7) to strive for sustainable growth and the enhancement of corporate
value over the medium- to long-term. As medium- to long-term variable remuneration, theobjective of the plan was to increase the motivation to strive for sustainable growth over the
medium- to long-term by having Directors share in the benefits and risks of stock pricefluctuations with the shareholders because stock price movements will significantly impact theactual amount of remuneration received in addition to linking remuneration to the Company’s
three-year performance.
Meanwhile, the Company decided to review the incentive plans for Directors in 2018 in view of
the changes in the Asahi Group, given the expansion of the growth platform due to theacquisition of European business, and the future direction and vision for the Group. The review
led the Company to take such actions as newly establishing the “Medium-Term Bonus Plan” asa new incentive plan linked to medium-term management policy, and making revisions to the“Annual Bonus Plan” to realize strengthened incentives for performance on a single fiscal year
basis.
Based on the aforementioned background, in conjunction with the updating of the Current Plan,
the Company decided to revise the details of the Stock Compensation Plan for the Company’s
Directors based on the review of its Director incentive plans and strengthen the function playedby the overall compensation plan as an incentive for the Directors. Specifically, the motivation
for achieving medium-term performance, which is a function of the Current Plan, will be shiftedto the newly established Medium-Term Bonus Plan and strengthened (the Medium-Term Bonus
Plan sets financial value indicators and social value indicators linked to the objectives of
medium-term management policy as performance indicators), while the post-revision Stock
Compensation Plan (hereinafter referred to as the “New Plan”) will focus on “providing
incentives to the Directors to continually enhance corporate value over the long term” and“sharing benefits and risks with shareholders” in which the Directors enjoy or bear the benefits
and risks of stock price fluctuations due to the impact of performance, the external economic
environment, and other factors from the same standpoint as shareholders. Given the above, theCompany believes that the introduction of the New Plan is appropriate.
Regarding the amount and contents of the remuneration under the New Plan, the Company would
like to grant stock compensation to the eligible Directors separate from the remuneration proposed
in Item 5 “Revision of Amount of Remuneration, etc. for Directors.”
Currently there are seven (7) Directors who are eligible to receive the payment of compensation
under the New Plan. If the shareholders approve Item 3 “Election of nine (9) Directors” asoriginally proposed, the Directors eligible to receive the payment of compensation under the
New Plan will be six (6).
2. Amount and contents of compensation under the New Plan
(1) Overview of the New Plan
The New Plan is a long-term stock compensation plan for the Directors of the Company
whereby the Company will grant points every year according to the executive rank and roles of
the Directors and, at the time of their retirement, will distribute to them such number of sharesof the Company as would be equivalent to the cumulative number of points theretofore granted
to them. Under the New Plan, in the same way as in the Current Plan, the Company will adopt a
Stock Distribution Trust for Officers structure where the Company will create a trust(hereinafter referred to as the “Trust”) by contributing cash, the Trust will acquire shares of theCompany, and then distribute these shares to eligible Directors. In principle, the timing for
distributing shares of the Company to the eligible Directors will be the time of retirement.

31

(2) Method of calculating points to be granted to each Director
Pursuant to the Stock Distribution Regulations prescribed by its Board of Directors, on the dateof the meeting of the Board of Directors convened for the purpose of approving financial resultsfor each fiscal year during the period of the Trust, the Company will grant to each Director acertain number of points according to his/her executive rank and role; provided, however, thatthe aggregate number of points to be granted by the Company to the eligible Directors shall be
up to a limit of twenty five thousand (25,000) points for each fiscal year.
(3) Upper limit on the amount of Trust Money to be contributed to the Trust as a source offunds with which to acquire shares of the Company
Under the New Plan, the Company shall make additional cash contributions to the Trust alreadyset up on December 28, 2016, of not more than ¥300 million during the three-year periodrunning from the fiscal year ending on December 31, 2019 to the fiscal year ending December
31, 2021 (hereinafter referred to as the “Target Period”), as funds to acquire the shares of theCompany required for distribution of shares of the Company to Directors, and shall continue theTrust with the Directors that meet certain requirements as its beneficiaries. The Trust shall use
the additional cash payments to the Trust by the Company (together with any cash remaining in
the Trust before the additional payments were made) as a source of funds to acquire shares of
the Company in the stock market, or to acquire shares by undertaking the disposal of theCompany’s treasury shares. Furthermore, by a resolution of the Board of Directors of theCompany, the Target Period may be extended for a period of three years each, along with theTrust Period (this includes an effective extension of the Trust Period by means of transferring
the assets of the Trust to a trust set up by the Company for the same purpose), so as to continue
the Plan. In that event, the Company will make additional cash contributions to the Trust, during
the extended period of the Target Period, up to a limit of ¥300 million, as additional funds toacquire shares of the Company required for distribution to Directors under the New Plan.
Furthermore, in such a case of extension, the Company will continue to grant the points set forthin (2) above and distribute shares of the Company as prescribed in (4) below within theextended period of the Trust.
However, even where the Company does not continue to grant the points as above, if, at thetime of expiration of the period of the Trust, there are Directors who are granted points but are
not yet retired, the Company may decide to extend the period of the Trust until such time as they
are retired and distribution of shares of the Company is completed.
(*) The actual amount of additional cash to be left in the Trust by the Company will be equal to
the sum of the abovementioned funds for acquisition of the shares of the Company, and an
estimated amount of the associated necessary expenses including trust fees and fees for the
Trust Administrator.
(4) Distribution of shares of the Company to each Director
The number of shares of the Company to be distributed to each Director will be the number ofpoints granted to him/her multiplied by one (1); provided, however, that if any share split,
reverse share split or any other event for which it would be considered reasonable to adjust the
number of shares occurs with respect to the shares of the Company, then the Company will
make reasonable adjustments depending on the ratio of such stock split, reverse stock split andso on.
Shares of the Company will be distributed from the Trust to each eligible Director after he/she
performs the established beneficiary determination procedures at the time of his/her retirement.
In addition, individuals who have undistributed shares of the Company equivalent to the numberof points granted under the Current Plan shall be distributed, by the Trust, in addition to sharesof the Company equivalent to the points granted under the New Plan. Also, under certain
circumstances corresponding to situations prescribed in the Stock Distribution Regulations andin the Trust Agreement, including cases where the Company is required to deduct at source inorder to withhold assets for the withholding tax, etc., part of the shares of the Company thatshould be distributed shall be sold for cash, which shall be distributed in place of the shares of
the Company.

32

(5) Overview of the Trust(i) Name: Stock Distribution Trust for Officers(ii) Settlor: Asahi Group Holdings, Ltd.
(iii) Trustee: Sumitomo Mitsui Trust Bank, Limited(iv) Beneficiaries: Eligible Directors fulfilling the requirements of the Beneficiaries(v) Trust Administrator: The Company selects a third party who does not have any interest in the
Company, the Company’s subsidiaries, or any Directors, Outside Directors, Audit &Supervisory Board Members, or Corporate Officers belonging thereto(vi) Trust type: Trust of money other than money trust (third-party-benefit trust)(vii) Date on which additional cash will be entrusted: May 2019 (scheduled)(viii) Trust period: From December 2016 to June 2022 (scheduled)
A. Structure of the Trust[Settlor](2) Creation of trust(third-party-benefit trust) (trust of money)

Stock market

Asahi Group Holdings, Ltd.
(3) Payment[Trustee]
Sumitomo Mitsui Trust Bank, Limited
Stock distribution trust(3) Disposal of(5) Grant

treasury sharesof points(3-a) Purchase price

Shares of the Company

Cash(4) Instruction not to exercise
voting rights(1) Establishment ofstock distribution
regulations(3-a) Purchase ofshares(6) Sale of shares(6) Sale proceeds(6) Shares or cash

Trust Administrator[Beneficiaries]
Directors(Note) Dotted lines denote the movements of shares.

1. The Board of Directors of the Company will establish Stock Distribution Regulations intended
for its Directors (excluding Outside Directors) (On this occasion, the intention is to amend
existing regulations that formed the basis the previous plan.).
2. With regard to the Trust set up with Directors as beneficiaries on December 28, 2016, after
extending the Trust Period, the Company shall make additional contributions (additional
payments to the Trust) equivalent to the funds needed to acquire shares to the Trustee(however, this shall be within the monetary limits approved by a General Meeting of
Shareholders).
3. The Trustee shall use the funds within the Trust (including, as described in 2. above, any cash
remaining in the Trust before the additional payments were made, in addition to thosepayments), to acquire, in one lump, shares of the Company equivalent to the number expected
to be distributed going forward (depending on whether this is achieved by disposal of treasury
shares, or by purchases in the stock market).
4. Throughout the period of the Trust, the Company will appoint a Trust Administrator (to belimited to be a party independent of the Company, the Company’s subsidiaries, or any
Directors, Outside Directors, Audit & Supervisory Board Members, or Corporate Officers
belonging thereto) who is responsible for protecting the interests of the Beneficiaries who arecovered by the Stock Distribution Regulations and supervising the Trustee. Throughout theperiod of the Trust, the Trust Administrator will give instructions not to exercise any voting

33

rights associated with the shares of the Company kept within the Trust.
5. Pursuant to the Stock Distribution Regulations, the Company will grant points to the eligible
Directors.
6. The Directors fulfilling requirements prescribed in the Stock Distribution Regulations and theTrust Agreement will receive, as Beneficiaries of the Trust, a distribution of shares of theCompany equivalent to the cumulative number of points from the Trustee. In certain specificcases set forth in advance in the Stock Distribution Regulations and the Trust Agreement, theCompany will sell part of the distributable shares kept within the Trust in the stock market anddistribute cash.
B. Additional payments to the Trust
Subject to approval of the proposed introduction of the Plan being given by this Annual General
Meeting of Shareholders, the Company will create the Trust by making additional contributions of
the funds necessary for the Trust to acquire, in advance and for a certain specific period of time, thenumber of shares of the Company that can reasonably be expected to be required for distribution as
described in (4) above. As discussed in Item D below, the Trust will acquire, in one lump, shares of
the Company by applying the funds contributed by the Company (together with any cash remaining
in the Trust before the additional payments were made), as a source of its funds.
C. Period of the Trust
The period of the Trust was set up to run from December 28, 2016, to the end of June 2019, but it isscheduled to be extended to the end of June 2022. However, as described in (3) above, the period of
the Trust may be extended.
D. Method of Acquisition by the Trust of Shares of the Company
The Company plans to have the Trust acquire shares of the Company through the stock market orby disposing of treasury shares held by the Company.
If, during the period of the Trust, due to an increase in the number of Directors or any other cause,the number of shares of the Company kept within the Trust becomes short of that corresponding to
the number of points to be granted to the eligible Directors during the period of the Trust, theCompany may have the Trust acquire additional shares by leaving additional cash in trust within
the scope of the upper limit on the trust money approved by this Annual General Meeting of
Shareholders as stated in (3) above.
E. Exercise of the Voting Rights
Pursuant to the instructions of the Trust Administrator who will be independent of the Company
and its Directors, Outside Directors, and Audit & Supervisory Board Members, the voting rights
associated with the shares kept within the Trust will not be exercised without exception, which willassure the neutrality of the Company’s management in relation to exercise of the voting rights ofsuch shares.
F. Handling of Dividends
Dividends on the shares of the Company kept within the Trust will be received by the Trust, andwill be applied towards payment for acquisition of the shares of the Company, trust fees for the
Trustee associated with the Trust, etc.
G. Handling of Trust Property at the Time of Termination of the Trust
Of the residual property left within the Trust at the time of termination of the Trust, the Company
plans to acquire all of the residual shares of the Company without charge and cancel them by aresolution of the Board of Directors. Of the residual property left within the Trust at the time oftermination of the Trust, pursuant to the provisions of the Stock Distribution Regulations and theTrust Agreement, the Company plans to donate a certain amount of residual cash to specified

34

public-service promotion corporations who does not have any interest in the Company, theCompany’s subsidiaries, any Directors, Outside Directors, Audit & Supervisory Board Members, orCorporate Officers belonging thereto.

35

Shareholder Proposal(Item 8)Item 8 is proposed by one shareholder. The total number of voting rights held by the shareholder
proposing the item is 364.

Item 8: Election of one (1) Audit & Supervisory Board Member
Kazuo Hashimoto shall be elected as an Audit & Supervisory Board Member.
ReasonAt the Company, “amakudari” (former senior members of the public service) engages willfullyin illegal acts. This will destroy the Company if it continues<The Company’s Note>
The above description and reason for proposal are stated according to the original proposal
submitted from the shareholder. The reason for not stating the career summary, etc. of thecandidate is because the proposing shareholder has not submitted it.

Opinion of the Board of Directors
The Board of Directors objects to this proposal.
The aforementioned reason for the proposal is groundless as there are no so-called “amakudari”
at the Company, and it is untrue that “amakudari engages wilfully in illegal acts.” Moreover,with regard to the appointment of Audit & Supervisory Board Members, the Company has
decided that the Audit & Supervisory Board is to be composed of suitable persons reflecting
the requirements of Directors and Audit & Supervisory Board Members derived from the“Asahi Group Philosophy,” the corporate philosophy of the Company, and management
strategy, and that the Audit & Supervisory Board will include at least one Audit & Supervisory
Board Member with an appropriate knowledge of finance/accounting, and at least one Audit &Supervisory Board Member with an appropriate knowledge of legal affairs to ensure balanceand diversity in terms of the knowledge, experience, and ability for the Audit & Supervisory
Board overall, as required for the Company’s sustainable growth and enhancement of corporate
value over the medium- to-long term. Furthermore, three of the Audit & Supervisory Board
Members will be Outside Audit & Supervisory Board Members who meet the requirements forindependent directors/auditors which have been established by the Company, and experts inaccounting, attorneys at law, and corporate managers who possess extensive experience andbroad insight in their fields will be appointed as Audit & Supervisory Board Members.
Accordingly, the Board of Directors deems that the structure of the Audit & Supervisory Board
based on Item 4 “Election of two (2) Audit & Supervisory Board Members” is the optimum
structure and it is not necessary to appoint Kazuo Hashimoto as an Audit & Supervisory Board
Member.
The opinion of the Audit & Supervisory Board and the opinion of the Board of Directors
are the same in objection to this proposal.
End

36

(Attached Materials)
BUSINESS REPORT
From January 1, 2018 to December 31, 2018
1. Overview of Operations of the Asahi Group(1) Business Progress and Results
During this fiscal year, despite the heightened uncertainty over future prospects due to trade
friction and other factors, an overall mild recovery in the global economy continued, driven by solid
economic growth in the US with increases in the number of employees and consumer spending, inaddition to a gradual improvement in European and Asian economies. The Japanese economy
recovered at a moderate pace with an uptick in consumer spending on the back of the improved
employment/income environment, in addition to improved corporate earnings.
Under these circumstances, the Asahi Group worked toward the further development of ongoing
efforts for the “Management for Corporate Value Enhancement” under the “Medium-Term
Management Policy” established in 2016 by setting three key priorities: i) strengthening of earnings
power, ii) asset and capital efficiency improvement, and iii) reinforcement of ESG initiatives.
Particularly for “strengthening of earnings power,” the Group worked in Japan to position a profit
base as the cornerstone of earnings with high value addition and differentiation as key areas of focus
while in overseas markets promoting the creation of synergies utilizing leading premium brands andextensive sales networks centered on its operations in Europe.
As a result, the Asahi Group posted revenue of ¥2,120,291 million, a year-on-year increase of
1.7%. Core operating profit* increased by 12.7% year-on-year to ¥221,383 million, and operating
profit rose by 15.6% to ¥211,772 million. Profit attributable to owners of parent totaled ¥151,077
million, an increase of 7.1% year-on-year compared with the previous year.
* 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.

Note: Starting from the 93rd term (FY2016), the Asahi Group has adopted International Financial Reporting Standards(IFRS). For reference, two sets of figures are presented alongside one another for the 92nd term (FY2015): one
conforming to IFRS and one conforming to Japanese GAAP.

37

■ Financial and Profit/Loss Indicators of the Asahi Group
92nd term
FY201593rd term
FY2016

Japanese
GAAP

94th term
FY201795th term
FY2018(current year)

IFRS(million yen)

1,857,418

1,689,527

1,706,901

2,084,877

2,120,291–

140,691

148,486

196,368

221,383

135,119

96,626

136,889

183,192

211,772

Ordinary income
Profit/ Profit attributable toowners of parent
Operating margin/
Operating profit ratio

145,946–––

EBITDA*2
Earnings per share/
Basic earnings per share*3
Total assets/
Total assets*4
Net assets/
Total equity
Net assets per share/
Equity attributable to owners ofparent per share*5
ROE(Return On Equity/
Profit ratio to equity attributableto owners of parent)
Adjusted profit attributable toowners of parent*6

Net sales/ Revenue(million yen)Core operating profit*1
Operating income/Operating profit(million yen)(million yen)–(million yen)

76,42775,77089,221141,003

151,077

7.3

5.7

8.0

8.8

10.0

197,993

197,287

205,803285,394

318,463

166.25164.82194.75307.78329.801,901,554

1,804,673

2,094,332

3,346,822

3,079,315

891,829803,682

846,105

1,152,748

1,149,647(%)(million yen)

*7

Adjusted earnings per share

Adjusted ROE (Adjusted profit
ratio to equity attributable toowners of parent)*8(yen)(million yen)(million yen)
(yen)

1,916.69

1,723.97

1,825.57

2,499.62

2,502.67
(%)

8.8

9.7

11.0

14.2

13.2
(million yen)––

89,221

120,133

150,688––194.75262.23328.95

(yen)
(%)

–

–

11.2

13.7

15.2

Note: Categories with “ / ” indicate “Japanese GAAP / IFRS.”*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. EBITDA is equal to the sum of operating income before amortization of goodwill, etc., and depreciation underJapanese GAAP, and the sum of core operating profit and amortization and depreciation on the IFRS basis.
*3. Earnings per share/ 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 theCompany held by Japan Trustee Services Bank, Ltd. as trust property for performance-linked stock compensation
are included in the treasury shares to be deducted in the calculation for the 95th term (FY2018).
*4. As acquisition cost allocation was revised following the finalization of the provisional accounting treatment
relating to a business combination carried out in the 93rd term (FY2016), this has been reflected in total assets of
the 93rd term (FY2016).
*5. Net assets per share/Equity attributable to owners of parent per share is calculated based on the total number ofshares 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 Japan Trustee Services Bank, Ltd. as trust property for performancelinked stock compensation are included in the treasury shares to be deducted in the calculation for the 95th term
(FY2018).
*6. 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.
*7. Adjusted earnings per share is calculated based on adjusted profit attributable to owners of parent.

38

*8.

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 offair value of investment in financial assets measured at fair value through other comprehensive income).

39

■ Overview by Business Segment for 95th Term
Asahi Group Revenue by Segment
94th term
FY2017(million yen)

95th term
FY2018(current year)(million yen)

Change inamount(million yen)

Change inpercentage(%)

Alcoholic Beverages*1

958,380

919,410(38,969)(4.1)

Soft Drinks

374,517368,754(5,763)

(1.5)

Foods

113,785

115,973

2,187

1.9

International Operations*1

636,982

713,261

76,278

12.0

Other Businesses

106,141

109,467

3,326

3.1

Adjustment*2(104,929)(106,575)(1,645)–2,084,877

2,120,291

35,414

1.7

Segment

Total*1. In line with the reorganization in the 95th term (FY2018), the Company changed classification for certain companies
from the alcoholic beverages segment to the international operations segment. The changes have been reflected in
the revenue by segment for the 94th term (FY2017).
*2. The adjustment is the elimination amount of intersegment revenue and revenue of the corporate portion not
attributable to any segment.

40

Main products:

Beer, Happoshu (low-malt beer), New genre (malt-type), Whisky and other spirits,
RTD*1, Wine, Shochu, Beer-taste beverages

In the alcoholic beverages segment, the Group made efforts to create new demand centered on
the beer market, and to enhance cost competitiveness, under the slogan of “Innovate to create newvalue and further elevate industry-leading strategies.”
In the beer-type beverages sector, we strived to propose new value for beer products with thelaunch of “Asahi Super Dry SHUNREI KARAKUCHI,” a new beer product with supreme aftertaste
and refreshing coolness, and the deployment of brand products in Europe business. In addition,
initiatives have been made to capture expanding beer-consumption opportunities in restaurants andbars, such as by offering “Asahi Breweries, LTD Original Olympic And Paralympic Games Tokyo
2020 550ml Beer Mug” *2 with the Tokyo 2020 Olympic and Paralympic Games emblem. As for new
genres, we worked to further enhance our brand strength with the renewal of “Clear Asahi Prime Rich,”which has heightened full-bodied-ness, rich taste with fragrant aroma and other aspects.
In the sectors of alcoholic beverages other than beer-type beverages, we launched “Asahi Zeitaku
Shibori,” a product that contains the juice of more than half a fruit per a can *3, and expanded the
product lineup of “WILKINSON HARD” series, aiming to improve our presence in the RTD market.
For whisky and other spirits, we endeavored to enhance the brand value of our mainstay brands
through the proactive expansion of “Black Nikka Clear High-ball Keg” and other aspects.
In the alcohol-taste beverages sector, we renewed the beer-taste beverage “Asahi DRY ZERO”
with “improved refreshing aftertaste” and launched the plastic-bottled “Asahi DRY ZERO Spark” fora limited time, as a new product value proposition.
As a result of these efforts, despite stronger-than-previous-year sales of alcoholic beverages otherthan beer-type beverages and of alcohol-taste beverages, revenue from the alcoholic beverages
segment decreased by 4.1% from the previous year to ¥919,410 million due to a decrease in sales
volume of beer-type beverages, reflecting the overall market contraction, and other factors.
Despite efforts to streamline fixed costs in general, core operating profit decreased by 2.8% yearon-year to ¥117,070 million due to the decline in revenue. (Operating profit stood at ¥107,359 million,
representing a year-on-year decrease of 4.9%.)*1. 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.
*2. Asahi Breweries, Ltd. is a Gold Partner for the Tokyo 2020 Olympic and Paralympic Games for beer and wine.
*3. A can of the product contains juice equivalent to more than half a fruit, less skins and seeds by weight, calculatedusing the STANDARD TABLES OF FOOD COMPOSITION IN JAPAN - 2015 - (Seventh Revised Edition).

41

Main products:

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

In the soft drinks segment, we worked for growth through improved product strength and further
reformation of our profit structure by focusing management assets on core brands and high-valueadded product offerings in the health function domain.
For the mainstay brands, we strived to cement our position in the carbonated water market withan enhanced “WILKINSON” product lineup. As for the “CALPIS” brand, initiatives for enhancing
brand strength have been made through boosting sales of the mainstay “CALPIS” and aggressive
placement of other products utilizing its brand assets. In addition, we promoted the rollout of “Tokusan
MITSUYA,” a “MITSUYA” brand product series that uses the juice of designated fruit varieties andproducing areas in Japan, in cooperation with local governments of those areas, while striving to
improve “WONDA” brand value through the renewal of the “WONDA Kiwami” series and new
product releases.
For the field of health function domain, the Group strived to strengthen its market presence withthe launch of high-value-added products leveraging our brand strength including “WILKINSONTANSAN EXTRA” and “Asahi Karada Juroku-Cha,” both of which are Foods with Functional Claims.
Accordingly, despite stronger-than-previous-year sales volume of carbonated drinks and milkbased beverages, etc., revenue from the soft drinks segment decreased by 1.5% from the previous yearto ¥368,754 million due to the disposal of the chilled soft drinks business in the previous year.
Core operating profit also decreased by 0.6% year-on-year to ¥38,099 million due mainly to thesame reason as the revenue, despite efforts to reduce manufacturing costs through an optimized
production structure. (Operating profit stood at ¥34,520 million, representing a year-on-year decreaseof 22.3%).

42

Main products:

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

In the foods segment, the Group worked to nurture a sustainable platform for growth byestablishing an optimized production and logistics system through business integrations while
focusing managerial resources on our mainstay brands and developing our offerings of high-valueadded products utilizing our proprietary materials and technologies.
For the tablet-type confectionary “MINTIA,” the Group strived to strengthen its brand strength
by launching products with new flavor and a limited-time offer, in addition to aggressive marketing
activity linked with advertisement and promotional initiatives.
In the category of dietary supplements, the Group enhanced the “Dear-Natura” brand coverage
by entering a new market with the launch of the protein powder “Dear-Natura Active.”
In the baby foods sector, the Group enriched the product lineup for “Goo-Goo Kitchen,” in aneffort to improve its brand strength. For senior products, we worked to improve our presence in themarket by consolidating existing brands into “Balance Kondate” and launching new products.
In the freeze-dried foods sector, the Group made efforts for improving the value of the mainstay
brands “Itsumono Omisoshiru” and “The Umami” mainly by releasing products with new ingredients.
As a result of the above, revenue from the foods segment increased by 1.9% year-on-year to¥115,973 million, reflecting strong performances in the core brands.
Core operating profit increased by 4.9% year-on-year to ¥12,200 million as a result of increased
sales and reduction in manufacturing costs. (Operating profit stood at ¥11,762 million, representing a
year-on-year increase of 8.0%.)43

Main products:

Beer, Low-alcohol beverages, Carbonated drinks, Mineral water, Sport drinks,
Condensed milk, Fruit drinks, Coffee

In the international operations segment, the Group worked hard to expand the foundation forgrowth, aiming at becoming a global player with strong competitiveness through the augmentation ofeach business portfolio, promoting premiumization, and creating synergies by cross-regional offeringsof its mainstay products.
In the Europe business segment, in Western Europe, the Group reinforced offering of high-valueadded products within national markets, such as “Peroni” in Italy and “Grolsch” in the Netherlands,
and developed markets in other countries with these products, promoting premiumization. In Central
and Eastern Europe, as an effort to further enhance its brand strength and profitability, the Group
worked to promote premiumization mainly with mainstay products in each country, including theCzech “Pilsner Urquell” and Polish “Tyskie,” to strengthen sales promotion efforts, and to streamline
fixed costs. Furthermore, initiatives aimed at creating synergies for “Asahi Super Dry,” for which
production within the Asahi Group in Europe started in January this term, have been made through thesales of the product in the countries in Western, Central and Eastern Europe, re-defining it as a superpremium beer product.
In the Oceania business segment, as to the soft drinks sector, the Group put efforts into enhancing
its presence in the market through intensive sales promotion efforts focused on mainstay carbonateddrink category. As for the alcoholic beverages sector, the Group strived to create a synergy effect,enhancing its manufacturing and sales platforms. These initiatives included efforts to boost marketing
activities for its premium beer brands “Asahi Super Dry” and “Peroni Nastro Azzurro,” and thecommencement of local manufacturing of “Peroni Nastro Azzurro” in barrels.
In the Southeast Asia business segment, the Group extended the product lineup and sales
campaigns focusing on the Asahi Group’s brands, such as “WONDA,” “CALPIS” and “Goodday” in
Malaysia and “Blue Mountain” in Myanmar, in an effort to improve its brand value in each market.
In the China business segment, the Group worked toward improved presence in the premium beermarket by starting to offer “Peroni Nastro Azzurro” and “Pilsner Urquell” in addition to its mainstay“Asahi Super Dry.”
As a result of the above, the international operations segment posted revenue of ¥713,261 million,
increased by 12.0% year-on-year, as the Europe business has been robust overall along with
contributions from newly consolidated beer businesses in Central and Eastern Europe*.
Core operating profit increased by 48.5% year-on-year to ¥99,588 million due mainly to increased
revenue from the Europe business. (Operating profit stood at ¥76,347 million, representing a year-onyear increase of 114.8%.)* The business results of beer businesses in Central and Eastern Europe have been incorporated starting from April 2017.

44

Main businesses:

Cargo transportation, Production and Distribution of health foods and feedstuffs

In the other businesses segment, revenue increased by 3.1% year-on-year to ¥109,467 million
mainly due to expansion of outsourcing in the cargo transportation business and an increase in salesof health foods.
Core operating profit increased 19.7% year-on-year to ¥2,384 million due to increased revenueof health foods. (Operating profit stood at ¥2,315 million representing a year-on-year increase of
17.0%.)(2) Status of Capital Expenditures
Consolidated capital expenditures in this year totaled ¥83,616 million, the segment breakdown ofwhich is as follows. A large portion of the capital expenditures represented investments made for the
purpose of enhancing efficiency and production capacity.
Amount of capital expenditure(million yen)
25,386
14,724
3,138
36,964650
2,752
83,616

Business segment
Alcoholic Beverages
Soft Drinks
Foods
International Operations
Other Businesses
Company-wide (common)
Total(3) Financing Activities
The Company financed the capital requirements including capital expenditures detailed in item
(2) above through loans from financial institutions and the issuance of commercial papers.
Funds required for companies’ businesses of the Asahi Group are primarily sourced by theCompany.

(4) Status of Principal Lenders(As of December 31, 2018)

Outstanding balance(million yen)
136,096
48,37740,09939,90039,344

LenderSumitomo Mitsui Banking Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank, Limited
The Norinchukin BankMUFG Bank, Ltd.

45

(5) Status of Major Establishments and Principal Subsidiaries(As of December 31, 2018)

1) Asahi Group Holdings, Ltd.
(Head office)23-1, Azumabashi 1-chome, Sumida-ku, Tokyo(Laboratory)
Research & Development Center (Moriya City, Ibaraki)
2)

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

Asahi Soft Drinks
Co., Ltd.

Sumida-ku,
Tokyo

11,081

100.0

Production and marketing of softdrinksAsahi Group Foods,
Ltd.

Shibuya-ku,
Tokyo

5,000

100.0

Production and marketing of foods

Asahi Europe Ltd

Surrey,the United
Kingdom

290,994

100.0

Overseeing alcoholic beverages
operations in Western Europe

Asahi Breweries
Europe Ltd

Surrey,the United
Kingdom

100.0

Overseeing alcoholic beverages
operations in Central and Eastern
EuropeAsahi Holdings(Australia) Pty Ltd

Victoria,
Australia

100.0

Overseeing soft drinks andalcoholic beverages operations in
Oceania

Asahi Beer (China)
Investment Co., Ltd.

Shanghai,
China

100.0

Overseeing alcoholic beverages
operations, and marketing of
alcoholic beverages in China(EUR 2,431,546 thousand)

904,609(EUR 7,405,000 thousand)

198,519(AUD 2,623,514
thousand)

9,996(CNY 737,487 thousand)Asahi Professional
Sumida-ku,
50
Contracting of clerical work
100.0Management Co., Ltd. Tokyo
Notes:
1.
There were 142 consolidated subsidiaries of the Company as of the end of this year, including those listed above.
There were 24 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 transferred all the issued shares of Tsingtao Brewery Company Limited heldby the Company on March 19, 2018.
2) The Company transferred all the issued shares of PT Asahi Indofood Beverage Makmur andPT Indofood Asahi Sukses Beverage held by the Company through Asahi Group Holdings
Southeast Asia Pte. Ltd. on March 29, 2018.

(7) Employees(As of December 31, 2018)

Number of
employees
5,960
3,417
1,303
14,3632,365
647
28,055Business segment
Alcoholic Beverages
Soft Drinks
Foods
International Operations
Other Businesses
Company-wide (common)
Total

46

Increase (decrease) fromthe end of the previous term
63
36
9
(3,072)125
30(2,809)(8)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 Foods segments.
Establishing a new group philosophy, the “Asahi Group Philosophy (AGP)” in 2019, the Groupaims to achieve sustainable growth and enhance its corporate value over the medium- to long-term.
The AGP consists of four 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, andserves as a code of conduct for our stakeholders and the Group’s commitments to them. By
generating and implementing strategies based on the AGP, domestic and overseas operatingcompanies of the Group will work together to further improve its corporate value.
Medium-Term Management Policy
While providing Key Performance Indicator guidelines and financial and cash flow policies forthe coming three years or so, the Medium-Term Management Policy, revised based on the AGP, sets
the following three key priorities. Under this policy, the Group enhances “Glocal Value Creation
Management.”
A Strengthening earning power driven by high added value enhancement and earning structurereformB Sophisticating management resources aimed at expansion of the new foundation for growth
C Reinforcing ESG initiatives supporting sustainable value creation process
Going forward, the Company will deepen dialogue with our stakeholders and aim to achievesustainable growth and enhance its corporate value over the medium- to long-term by positioning
these three key priorities as a stakeholder engagement agenda.
Policy for 96th Term (FY 2019)
In the fiscal year 2019, based on the Medium-Term Management Policy, the Asahi Group will
work to “strengthen its earning power” through the development of high-value-added brands in andoutside Japan, the introduction of zero-based budgeting (ZBB) and other measures. Furthermore, theGroup strives to “sophisticating management resources” by investing in intangible assets including
research and development and human resource capabilities to realize innovation, and to “reinforce
ESG initiatives” leveraging its unique strengths to enhance “Glocal Value Creation Management”
aimed at realizing the AGP.
With these efforts, the Group projects revenue to be ¥2,153,000 million, core operating profit tobe ¥230,000 million, operating profit to be ¥217,000 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 96th fiscal year.
The Group cordially requests shareholders’ continuing encouragement and support.

47

48

Medium-Term Management Policy
Enhancing “Glocal Value Creation Management” based on Asahi Group Philosophy
Key Performance Indicator (KPI) Guidelines
FY2017 results

Guidelines for next 3 years out Stable growth from existing businesses – Business restructuring

Revenue¥2,084.9 billion

Core Operating Profit¥196.4 billion

 CAGR (Compound annual growth rate): mid to high single digit

EPS (adjusted *)¥262.2

 CAGR (Compound annual growth rate): mid to high single digit

ROE (adjusted*)

13.7%

 Maintain 13% or above+ New M&As

* “After adjustment” refers to figures that exclude one-time extraordinary factors such as restructuring of business portfolio andexchange rate fluctuations.

Financial and Cash Flow Guidelines
Guidelines for FY2019 onward
Cash Flow Free cash flows: above ¥170.0 billion (annual average)

Investment for Growth Prioritize M&As for expansion of foundations for growth and promote debt reduction
for enhancing investment capacity

Debt Reduction

 Net debt/EBITDA*1: below 2 times by the end of FY2021

Shareholder Returns

 Stable dividend increases with the aim of a dividend payout ratio*2 of 35% (- FY2021)(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 restructuring ofbusiness portfolio (net of tax expenses), etc.

49

New Key Areas and Major Themes for the Asahi GroupIn view of the establishment of its new group philosophy, the “Asahi Group Philosophy,” the Asahi
Group renewed the contents of its “Medium-Term Management Policy” from 2016, to achieve further
growth to a new stage.
Through the acquisition of new Europe business, the Group has laid the groundwork to develop
businesses globally. However, these challenges mean that the Group now faces risks that it has neverbeen exposed to before. Furthermore, the Group recognizes the need to reconsider the initiatives thatit has thus far pursued to improve its social value from the viewpoint of its own strength andcompetitiveness.
Against this background, the Asahi Group revised its major themes, and started its initiatives forpromoting sustainability under the newly set four “Key Areas” and 18 “Major Themes” in January
2019.
Key Areas
Environment

Eliminating the negative
impact of our business

Major Themes

Initiatives from 2019

・Addressing climate change・Stable procurement of raw materials
・Promoting sustainable water resources
・Recycling and preventing pollution
・Providing environmentally and sociallyconscious products

As a group that operates a business that benefits
from the blessings of nature, such as water andagricultural crops, the Asahi Group has
formulated the “Asahi Group Environmental
Vision 2050,” and works to realize this Vision.
The Group will take on challenges to grow its
business and achieve a sustainable society by
not only reducing environmental impacts but
also creating the value that provides
environmental benefits.

Increasing the positive
impact of our business

Human rights and human ・Human resource development
resources management
・Enhancing diversity
・Respecting human rights

Human resources are an indispensable factor
for sustainable business activity. With theincreasing need for respect of the human rights
of all stakeholders involved in businessactivities, the Asahi Group will establish ahuman rights policy as a Group to enhance its
initiatives. In addition, the Group will build aglobal system for human resources
development that facilitates employees’ growth
and translates it to the Group’s growth.

Responsible businessactivities

・Supply chain management
・Securing food safety and reliability
・Promoting responsible drinking
・Pursuing social responsibility throughproducts and services
・Reducing food loss

Securing food safety and reliability is the mostsignificant issue that the Asahi Group, a foodrelated company, pursues as a corporate
responsibility. Furthermore, the Group
promotes food and health education forimproved quality of life through foods inmature society as well as efforts to addresssocial issues, such as alcohol-related problems
and food loss.

Creation ofenvironmental value thatleverages Asahi
strengths

・Resolving social issues through thecreation of new drinking opportunities
・Providing products utilizing yeast,
lactic acid bacteria, and intestinal flora
・Providing products with less addedsugar・Expanding businesses focusing on
health and contributing to a recyclingbased society
・Resolving social issues in the
agricultural field through agricultural
materials utilizing yeast cell walls

There are many food-related issues worldwide,
including food shortages arising from a
growing global population and issues related tonutrition and health. The Asahi Group will
focus on creating new values aimed at
resolving social issues, utilizing its proprietarystrengths, including yeast, lactic acid bacteria,
and other microorganisms and fermentation
techniques, all cultivated through the Group’sbusiness activities.

50

Concrete Initiatives(1) Eliminating the negative impact of our business— Promote an appropriate response to the various changes in the external
environment on a global scale as part of our efforts in extensive risk
management —Establishing the “Asahi Group Environmental Vision 2050”
Aiming to contribute to a sustainable society, the Asahi Group formulated the “Asahi Group
Environmental Vision 2050.” The goal of the Group is to achieve a zero environmental impacts
throughout its business activities by 2050.
To attain this goal, the Group will aim to achieve zero CO2 emissions in 2050 by promoting further
energy-saving efforts, and actively utilizing green electricity and other renewable energy.
Furthermore, the Group will work to achieve the full utilization of sustainable resources in the areasof agricultural raw materials, containers and packaging material, and of sustainable water resources,
including attaining water neutrality*at domestic breweries.
Moving forward, as a corporate group that operates a business that benefits from the blessings ofnature such as water and crops, it will aim to pass on the blessings to the next generation.
* Water neutrality refers to returning the same amount of water as used amount by combining reduction of water use and water
replenishment through conservation of water resources.

(2) Increasing the Positive Impact of Our Business— Creating Corporate Value Centered On Social Issues —Expanding the Global Potential of Beer Yeast Cell Walls
The Asahi Group has been engaged in an agricultural material business through its group company,
Asahi Bio Cycle Co., Ltd., that harnesses the ability of beer yeast cell walls, a by-product of the beer
brewing process.
This agricultural material helps reduce the use of agricultural chemicals and chemical fertilizers,
and is safe and reliable due to its food-based origin. It also provides various other benefits, including
augmenting plants’ resistance to disease, by boosting their immunity, increasing crop yields, andenhancing crop quality by improving soil conditions, while
contributing to sustainable agriculture with the reduction ofgreenhouse gas emissions per harvested volume of crops.
By leveraging this agricultural material, which makes useof the beer yeast cell walls with such advantages, the Groupwill contribute to the realization of a safe and secure foodsupply and the promotion of environmentally friendly
agriculture in not only Japan but also Southeast Asia, North
America, and other overseas regions.

51

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/180601_guidelines_en.pdf
1 Ensuring rights of and equality among shareholders
Recognizing that “a shareholder is equal in accordance with his/her equity interest,” the Company
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 for overseas 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 theCompany or any Director and Audit & Supervisory Board Member, independently from the Boardof Directors and management to substantially ensure the rights of minority shareholders.
2 Appropriate Collaboration with Stakeholders
The Company has identified corporate value not only as financial value, but also as a summationof 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 group philosophy, 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
returns
3 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 thestatutory 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 to ensure
the sustainable growth and the increase of corporate value over the medium- to long-term of the52Company, as well as to promote the improvement of earning capacity and capital efficiency bytaking into account their fiduciary responsibility and accountability to shareholders. Such initiatives
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 andrisk management system.
The Board of Directors, in deliberating management strategies etc., mainly prepared bymanagement, takes care to plan the meetings as a venue for constructive discussion by avoiding
ritual discussion with measures such as sharing information with Outside Directors and a
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 sustainable growth
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 asa responsible executive in charge of dialogues with shareholders and ensure well-organizedcollaboration among the auxiliary departments by providing the information for the dialogues. In
addition, the Company shall endeavor to understand the shareholder structure and conduct various
explanatory meetings by Representative Directors of the Company, visits to domestic/overseas
institutional investors and/or factory tours for shareholders.
Measures for Enhancing Corporate Governance
2000







2006

 Risk Management Committee was established.

2007 Terms of Directors were shortened to one year.
 Retirement bonus system for Directors and Audit & Supervisory Board Members was 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 membersof 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.

Number of Directors was reduced from 40 to 10.
Nomination Committee and Compensation Committee were established.
Corporate Strategy Board was established.
Corporate Officer System was introduced.
Number of Outside Directors was increased from one to three.

53

2Characteristics 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
are independent Outside Directors/Audit & Supervisory Board Members. Under the system of these
discretional bodies, the Company has created a structure that allows independent Outside
Directors/Audit & Supervisory Board Members to monitor the management of the Company with higheffectiveness.

54

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 shall make the Board of Directors composed of persons
suitably qualified to be Directors of the Company who possess a wealth experience, extensive
knowledge and high-level expertise required by the Company, and who reflect the requirements forofficers that were introduced from the corporate philosophy of the Asahi Group, “Asahi Group
Philosophy,” the action guidelines, and the management strategies. In addition, the Company aims for
the Outside Directors be persons such as corporate managers and/or experts who meet the Company’s
requirements for independent director/auditor and for them to make up at least one third of the number
of Directors in the Board of Directors.

4

Structure of the Audit & Supervisory Board

In order to ensure balance and diversity in terms of the knowledge, experience and ability of theentire board necessary to contribute to the sustainable growth and the increase of corporate value of
the Company over the medium- to long-term, the Company shall make the Audit & Supervisory Board
composed of persons suitably qualified who reflect the requirements of officers that were introduced
from the corporate philosophy of the Asahi Group, “Asahi Group Philosophy,” the action guidelines,
and the management strategies. The Company shall ensure that among the Audit & Supervisory Board,
there exists at least one person has appropriate insight in finance and accounting and at least one personwith appropriate insight in law. In addition, the Company shall ensure that at least three of the Audit& Supervisory Board Members are Outside Audit & Supervisory Board Members who meet theCompany’s requirements for independent director/auditor and select for those positions, accounting
experts, attorneys at law and corporate managers who possess a wealth 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, Audit & Supervisory Board Members and Corporate Officers in response to the inquiries
referred from the Board of Directors.
The Committee consists of two Outside Directors, one Outside Audit & Supervisory Board
Member, and two internal Directors, and an Outside Director is co-operatively appointed as its
chairperson. The Committee held eleven meetings during fiscal 2018, and provided reports on its
findings and views primarily about personnel affairs of officers 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 for Directors and Corporate Officers in response to the inquiries
referred from the Board of Directors.
The Committee consists of two Outside Directors, one Outside Audit & Supervisory Board
Member, and two internal Directors, and an Outside Director is co-operatively appointed as its
chairperson. The Committee held a total of twelve meetings during fiscal 2018, and provided reports
on its findings and views primarily about the revision of the officers’ remuneration plan.

55

Nomination Committee
Naoki Tanaka◎ Tatsuro Kosaka◎ Naoki Tanaka
Yasushi Shingai

Audit & Supervisory
Board Member

Katsutoshi Saito

Yumiko Waseda

Director

Naoki Izumiya
Akiyoshi Koji

Katsutoshi Takahashi
Yoshihide Okuda

Director
OutsideInternal

Compensation Committee

Note: ◎ denotes committee chairpersons

3 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 executive
directors and Corporate Officers excluding the Chairman and Representative Director and thePresident and Representative Director, and the Director in charge of public relations serves as its
chairperson. The Committee held a total of seven meetings during fiscal 2018, analyzed the contentsof 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 theTokyo Stock Exchange.
4 Risk Management Committee
Risk Management Committee provides reports on its findings and views about policies on overallrisk management activities and the measures against main risks in response to the inquiries referredfrom the President and Representative Director. Risk Management Committee consists of internal
Directors and external attorneys at law and the Director in charge of general and legal affairs serves
as its chairperson. In addition, Standing Audit & Supervisory Board Members attend thisCommittee’s meetings and state opinions as necessary. The Committee held a total of four meetings
during fiscal 2018, and provided reports on its findings and views about the findings of periodic
risk surveys, the status operation of whistle blowing system.
Although the previous scope of Risk Management Committee included corporate ethics andcompliance, in order to secure a structure for risk management that supports the realization ofbusiness goals and medium- to long-term corporate value enhancement, Compliance Committee
was separately established on January 1, 2019 and the operational structure of risk management
was changed.
5 Compliance Committee
Compliance Committee was established on January 1, 2019 as a body that provides reports on its
findings and views on the promotion and supervision of corporate ethics and compliance for theoverall Asahi Group in response to inquiries 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 this Committee’s meetings.
6 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
consists of the President and Representative Director and other executive directors, Corporate
Officers and Standing Audit & Supervisory Board Members, and the President and Representative56

Director serves as its chairperson. The Board held a total of forty-nine meetings during fiscal 2018,
and provided reports on its findings and views primarily about development of corporate strategies
and status of business executions by Group 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.
The English-version summary of the evaluation is posted on the following Company website:
WEB https://www.asahigroup-holdings.com/en/whoweare/governance/policy.html
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, starting from fiscal 2019.

7

Succession Plan and Training

Pursuant to the requirements demanded of its Directors, the Company has identified the matters ofsuccession (cultivation of successors) and pipeline (personal resources of successors) of its Directors
and Corporate Officers as the highest priorities, and has developed a succession plan for the CEO, etc.
The Board of Directors properly supervises the succession plan.
For the Directors and Audit & Supervisory Board Members, the Company provides training
required for their roles and responsibilities on a regular basis and sets the requirements for each ofthem according to his/her executive stage, and conducts training that contributes to enhancement intheir overall performance in accordance with such requirements. On the occasions of their
appointments, the Company provides Outside Directors/Audit & Supervisory Board Members withinformation relating to the overview of the Asahi Group including its businesses, financial affairs andorganizations, and implements measures, such as office visits, to facilitate their understanding of theGroup as needed.

8

Criteria for judgment of independence of Outside Directors/Audit &Supervisory Board Members

The criteria for judgment of independence of Outside Directors/Audit & Supervisory Board
Members are as described on pages 25 and 26.

57

3. Systems to Ensure Appropriate Execution of Directors’ Duties in Conformity
With Laws and Regulations and the Articles of Incorporation, and Other
Systems to Ensure Appropriate Business Operations
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 Enforcement Regulations 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 Directors and Corporate Officers, through therespective departments and organizations they are in charge of, to develop and fully enforce
individual internal regulations that will be applied to the Company and the entire Asahi Group andare 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 sections in charge of general and legal affairs shall handle day-to-day complianceand risk management 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 “Asahi Group Procurement Regulations” addressing mutual
cooperation for fair and equitable deals and social responsibilities between each Group
Company and suppliers and a system that enables suppliers to blow a whistle on breaches of
the Policy as necessary. The Company shall inform 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
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.

58

8)

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 Regulations” 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 sections 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 or 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 and shall appoint appropriate
persons as Corporate Officers in charge of respective sections.
The Company shall establish “Regulation of Authority” and “Asahi Group’s Regulation of
Authority” stipulating rules of delegation of power and for a mutual checks-and-balances
mechanism among sections and among Group Companies.
The Company shall ensure the effective utilization of the “Corporate Strategy Board,”
consisting of the Company’s internal Directors, Corporate Officers, and Standing Audit &Supervisory Board Members by formulating the Asahi Group’s corporate strategy andimplementing progress management, etc.
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 individualcompanies are facing.

59

2)

3)
4)

While cooperating with the internal auditing organs established within the Asahi Group, thesection 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 Regulation 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 and the “Risk Management Committee” meetings.
Directors shall provide details of the agenda items of such meetings beforehand for Audit &Supervisory Board Members.
Audit & Supervisory Board Members shall at all times have the right to review the minutes ofimportant meetings, documents of approval, etc.

(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’ sections in charge of internal auditing shall report
the results of the Group Companies’ internal audits to the Audit & Supervisory Board Memberof the Company without delay.
60

3)

4)

The whistle blowing contacts under the Clean Line System shall be the Company’s Audit &Supervisory Board Members, section 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 section 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 thesection 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 section 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. During fiscal 2018,
the Company and a total of 40 Group Companies were audited.
With respect to internal control over financial reporting, the section in charge of internal
auditing in the Company performs evaluation of the Group Companies’ internal control
activities pursuant to the “Basic Regulations for the Evaluation and Reporting of Internal
Control for 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 and crisis management in place in the Company and the Group Companies andconducting education and training by job class.
The Company conducts multifaceted and multilayered surveys of compliance awareness andbehavior by conducting a “Compliance Questionnaire” to the employees, etc. of the Company
and the Group Companies. In fiscal 2018, the questionnaire results continued to reveal that:“Compliance awareness remained at a high level.”
By keeping in place the “Clean Line System,” the Company detects and resolves risk problems
early, and effectively prevents risk problems themselves from occurring.

61

(3) Risk Management System
1)

2)

The Company conducts cross-sectional risk management for the entire Asahi Group throughthe “Risk Management Committee.” During fiscal 2018, the Committee met for a total of fourtimes to conduct cross-sectional analyses and evaluations under the themes of “quality,”“compliance,” “governance,” “personnel/labor affairs,” “IT,” “finance/accounting,” etc. on thebasis of the findings of periodic risk surveys conducted by sections concerned.
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.

(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 Regulation 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 responsible
sections 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 Corporate Officers, and has each
Director and Corporate Officer report on the status of his/her business execution once every threemonths.

(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” and other important organs,and receive reports from Directors, employees, etc., thereby confirming the status ofdevelopment 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 the section in
charge of internal auditing, the Independent Accounting Auditor, etc. During fiscal 2018, Audit& Supervisory Board Members had opportunities to exchange information and views with thesection in charge of internal auditing for a total of six times, with the Independent Accounting
Auditor for a total of twelve times. Audit & Supervisory Board Members also findopportunities to exchange information and views with Audit & Supervisory Board Membersof the main Group Companies once every three months.
The Company ensures that Audit & Supervisory Board Members will be able to smoothly
perform their duties by posting three dedicated employees to the Audit & Supervisory Board.

62

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 the senseof joy 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 to the corporate value and the common interests of shareholders or could effectively
coerce shareholders to sell their shares, ones that the purchaser does not provide information and/ortime reasonably necessary for the target company’s board of directors and shareholders to review
and examine details of the proposed purchase or for the target company’s board of directors to makean alternative proposal, and ones where the target company’s board of directors would have to
conduct negotiation with the purchaser so as to seek more favorable terms than those initially
proposed by the purchaser.
The 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 will establish 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 will establish 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 48 and 49.
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 52 - 57 for an overview.

63

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.

64

5. Overview of the Company(1) Shares Outstanding (As of December 31, 2018)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)483,585,862(including 25,467,481 treasury shares)
110,585(Increased by 12,486 from the end of the previous term)

Name of shareholder
The Master Trust Bank of Japan, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account)
The Dai-ichi Life Insurance Company, Limited
Fukoku Mutual Life Insurance Company
Asahi Kasei Corporation
Sumitomo Mitsui Banking Corporation
Japan Trustee Services Bank, Ltd. (Trust Account 5)
Sumitomo Mitsui Trust Bank, Limited
STATE STREET BANK WEST CLIENT – TREATY 505234
JP MORGAN CHASE BANK 380055
Total

Number ofshares held(in hundreds)
453,422
241,997
160,000
127,500
117,853
90,28082,48571,26068,45265,4091,478,659

Percentage ofshares held (%)
9.9
5.3
3.5
2.8
2.6
2.0
1.8
1.6
1.5
1.4
32.3

Notes:
1.
The Company holds treasury shares numbering 254,674 hundred shares. However, the Company is excluded
from the above list of major shareholders. The shares of the Company held by Japan Trustee Services Bank, Ltd.
as trust property for performance-linked stock compensation (387 hundred shares) are excluded from the treasury
shares (254,674 hundred shares).
2.
Shareholding percentages are calculated based on the total number of issued shares less the number of treasury
shares.

65

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

Directors and Audit & Supervisory Board Members(As of December 31, 2018)

Name

Areas of responsibility
and significant concurrent positions
Overall Management
External Board Director of Recruit Holdings Co.,Ltd.
Outside Director of Obayashi Corporation
Overall Management

Position

Naoki Izumiya

Chairman and
Representative Director

Akiyoshi Koji

President andRepresentative Director
CEO
Senior Managing Director Supply Chain
Senior Managing Corporate
Officer
Senior Managing Director Administrative/Governance
Senior Managing Corporate Alcoholic Beverages Business
OfficerManaging Director
Overseas Business Strategy and AllianceManaging Corporate
Soft Drinks Business
Officer
Overseas Non-Alcoholic Beverages BusinessDirector
Research & Development, ESG/CSV
Corporate Officer
Foods BusinessDirector
Corporate Strategy, CFO
Corporate Officer(CFO)
Outside Director
President of Center for International Public Policy
Studies
Outside Director
Representative Director, President of Chugai
Pharmaceutical Co., Ltd.
Outside Director
Outside Director of Mitsubishi UFJ Financial
Group, Inc.
Standing Audit &Supervisory Board Member
Standing Audit &Supervisory Board Member
Outside Audit &Advisor of The Dai-ichi Life Insurance Company,
Supervisory Board Member Limited
Outside Director of Imperial Hotel, Ltd.
Outside Corporate Auditor of Tokyu Corporation
Outside Audit &Partner and Attorney at Law of Tokyo Roppongi
Supervisory Board Member Law & Patent Offices
Outside Audit &Supervisory Director of Nippon Building FundSupervisory Board Member Inc.

Katsutoshi Takahashi

Yoshihide Okuda

Atsushi Katsuki

Noboru Kagami
Kenji Hamada

Naoki Tanaka
Tatsuro Kosaka
Yasushi Shingai
Akira Muto
Tetsuo Tsunoda
Katsutoshi Saito

Yumiko Waseda
Yutaka Kawakami

Notes:
1. Directors Naoki Tanaka, Tatsuro Kosaka, and Yasushi Shingai 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 Outside Directors Naoki Tanaka, Tatsuro Kosaka, and Yasushi Shingai and Outside Audit& Supervisory Board Members Katsutoshi Saito, Yumiko Waseda and Yutaka Kawakami as Independent
Directors/Auditors 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, Imperial
Hotel, Ltd. and Tokyu Corporation, 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

66

5.
6.
7.
8.

9.

relationship that could have impact on the Company’s management.
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.
Audit & Supervisory Board Member Akira Muto was formerly General Manager of Finance Department of theGroup and has considerable expertise in finance and accounting.
Audit & Supervisory Board Member Yutaka Kawakami has long experience as a certified public accountant; hehas considerable expertise in finance and accounting.
Director Mariko Bando retired upon the expiry of her term of office at the conclusion of the 94th Annual General
Meeting of Shareholders held on March 27, 2018. Also, Yasushi Shingai was newly elected as a Director, andassumed his office at the same meeting.
In addition to the above, the retirement from significant concurrent positions by Directors or Audit & Supervisory
Board Members during this year are detailed below.

Name

Position

Yasushi Shingai

Outside Director

Yumiko Waseda

Outside Audit &Supervisory
Board Member

Significant concurrent positions upon
Date of retirement
retirement
Member of the Board of Japan
March 27, 2018
Tobacco Inc.
External Board Director of Recruit
June 19, 2018
Holdings Co., Ltd.
Outside Audit & Supervisory Board
March 23, 2018
Member of Kao Corporation

67

2)

Policies concerning the setting of remunerations paid to Directors and Audit &Supervisory Board Members
It is the basic policy for Directors’ and Audit & Supervisory Board Members’ remunerations of
the Company to ensure that its remunerations are conducive to acquiring superior human resources,
suitable for the magnitude of their roles and the scope of their responsibilities for each executive
position, motivational for the Company’s corporate value enhancement and sustainable growth; andthat transparency and objectivity will be assured with respect to the remuneration-setting procedures.
Based on the foregoing policy, Directors’ remunerations are set in line with a resolution at a
meeting of the Board of Directors, and 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. When remunerationrelated resolutions are being made by the Board of Directors, the Compensation Committee, having
Outside Directors/Audit & Supervisory Board Members making up a majority of its membership andOutside Director being appointed as its chairperson, acts as an advisory body to the Board of
Directors, evaluating the content of said resolutions in the interests of greater transparency andobjectivity.
A Directors’ remunerations
Remunerations for a Director consist of basic remuneration (monthly and fixed), bonuses(annual and short-term and medium-term performance-linked) and performance-linked stockcompensation (long-term performance-linked), forming a scheme giving consideration to
motivation for sustained enhancement of corporate performance and value. The level of each
item is set according to his/her job responsibilities and status distinction between internal andoutside and by drawing on outside expert organs’ survey data.
Basic remuneration is determined on the basis of one’s position and magnitude of one’s role.
Short-term performance-linked bonuses are determined using core operating profit and profit
attributable to owners of parent as performance benchmarks in proportion to the level ofachievement of targets, which are set at the beginning of each fiscal year, and other factors. Midterm performance-linked bonuses are determined using financial and social value indicators set
in line with the goals of the “Medium-Term Management Policy” as performance benchmarks inproportion to the level of achievement of targets, which are set at the beginning of each fiscal
year. For performance-linked stock compensation, points are granted according to the level ofachievement of targets in terms of “basic earnings per share,” one of the performance benchmarks
set in the “Medium-Term Management Policy,” and the Company shares in the number
equivalent to the cumulative number of these points will be delivered at the time of theirretirement for the purpose of offering appropriate incentives.
The bonuses and performance-linked stock compensation shall only be paid to internal
Directors.
B Audit & Supervisory Board Members’ remunerations
Remunerations for an Audit & Supervisory Board Member consist only of basic
remuneration (monthly and fixed), and the level of such basic remunerations is set subject to amutual consultation of Audit & Supervisory Board Members according to his/her job
responsibilities and status distinction between internal and outside and by drawing on outside
expert organs’ survey data.

68

3)

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

Variable remuneration

Basic remuneration

Bonus

Stock compensation

Total
amount(millionyen)

Number of
persons

Total
amount(millionyen)

Number of
persons

Total
amount(millionyen)

Number of
persons

Total
amount(millionyen)

Directors[of which, Outside
Directors]

11
[4]

393
[47]

7
[–]

328
[–]

7
[–]

62
[–]

784
[47]

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

5

109

–

–

–

–

109

[3]

[38]

[–]

[–]

[–]

[–]

[38]

Category

Notes:
1. The figures above include Director Mariko Bando who retired upon the expiry of her term of office at theconclusion of the 94th Annual General Meeting of Shareholders held on March 27, 2018.
2. A resolution authorizing payments associated with the termination of the retirement bonus system to be paid at thetime of retirement was passed at the 83rd Annual General Meeting of Shareholders held on March 27, 2007. As ofthe end of this fiscal year, the anticipated total amount of future payments was as follows:¥19 million to one Director
3. The maximum amount of Directors’ remunerations (basic remuneration and bonus) is ¥760 million (including ¥50
million for Outside Directors) per year. (The resolution passed at the 83rd Annual General Meeting of Shareholders
held on March 27, 2007) Other than those listed above, the Company has passed the resolution, at the 92nd Annual
General Meeting of Shareholders held on March 24, 2016, to pay performance-linked stock compensation to
Directors (excluding Outside Directors) who were elected during the period of the Trust and took office and forwhom the Company contributed up to ¥220 million during the period of the Trust (3 years). The Company may
grant up to a total of 21,000 shares of the Company per fiscal year to all eligible Directors.
4. 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 92nd Annual General Meeting of Shareholders held on
March 24, 2016.
5. The maximum amount of Audit & Supervisory Board Members’ remunerations is ¥120 million (including ¥40
million for Outside Audit & Supervisory Board Members) per year. (The resolution passed at the 83rd Annual
General Meeting of Shareholders held on March 27, 2007)694) Major activities of Outside Directors and Outside Audit & Supervisory Board Members

Category

Name

Attended
Board ofDirectors
meetings

OutsideDirectors

Naoki Tanaka

12/13

Tatsuro Kosaka

13/13

Yasushi Shingai

10/10

OutsideKatsutoshi
Audit &
Saito
Supervisory
Board
Yumiko Waseda
Members

12/13

YutakaKawakami

13/13

13/13

Attended
Audit &
Supervisory
Form of participation
Board
meetings–
Naoki Tanaka participated in discussions
primarily from the perspective of his wealthof experience as an expert in economic
policy.
–Tatsuro Kosaka participated in discussions
primarily from the perspective of his wealthof experience as a manager.
–
Yasushi Shingai participated in discussions
primarily from the perspective of his wealthof experience as a manager.
12/12
Katsutoshi Saito participated in discussions
primarily from the perspective of his wealthof experience as a manager.
12/12
Yumiko Waseda participated in discussions
primarily from her expert perspective as an
attorney at law.
12/12
Yutaka Kawakami participated in
discussions primarily from his expert
perspective as a certified public accountant.

Note: As Director Yasushi Shingai was newly elected at the 94th Annual General Meeting of Shareholders held on
March 27, 2018, the above number of Board of Directors meetings held that he could attend is different fromother Directors/Audit & Supervisory Board Members.

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.

70(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

Category
Remunerations paid for this fiscal year
Total of cash and other financial profits payable by the Company and its
subsidiaries to the Independent Accounting Auditor

Amount payable¥222 million¥358 million

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 ¥222 million shown above is a sum ofthese two 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)

Nature of non-audit professional services provided by the Independent Accounting
AuditorNot applicable.

4)

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 thecontents of a proposal for dismissing or not re-appointing said Independent Accounting Auditor tobe submitted to the General Meeting of Shareholders. On the basis of this determination by the Audit& Supervisory Board, the Board of Directors shall offer to the General Meeting of Shareholders aresolution 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 therepresentative unit.

71

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

As ofDecember 31, 2018

As ofDecember 31, 2017
[Reference]

ASSETS
Current assets:
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax receivables
Other financial assets
Other current assets
Subtotal
Assets held for sale57,317427,279
160,319
37,308
7,025
25,324
714,576–

58,054433,436
155,938
12,354
6,896
27,104
693,785
118,641

Total current assets
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

714,576

812,426

689,985
1,428,543
8,668
184,533
16,30019,282
17,424

717,914
1,538,679
4,846
219,142
11,38826,055
16,368

Total non-current assets
Total assets

2,364,738
3,079,315

2,534,396
3,346,822

72

CONSOLIDATED STATEMENT OF FINANCIAL POSITION(million yen)

As ofDecember 31, 2018

As ofDecember 31, 2017
[Reference]

LIABILITIES and EQUITY
LIABILITIESCurrent liabilities:
Trade and other payables
Bonds and borrowings
Income tax payables
Provisions
Other financial liabilities
Other current liabilities
Subtotal
Liabilities directly related to assets held for sale416,842
262,620
39,624
17,65562,027140,821939,591–

433,582359,72251,856
15,451
29,224
144,355
1,034,191
17,965939,591

1,052,157

764,768
25,517137,277
59,7762,736

902,20325,488
156,780
52,997
4,446

Total non-current liabilities
Total liabilities
EQUITY
Issued capital
Share premium
Retained earnings
Treasury shares
Other components of equity
Other components of equity related to disposalgroups held for sale
Total equity attributable to owners of parent
Non-controlling interests

990,076
1,929,668

1,141,917
2,194,074

182,531
119,128
821,120(76,997)
100,637

182,531
119,051
713,146(76,747)
210,592–(3,440)1,146,420
3,227

1,145,135
7,612

Total equity
Total liabilities and equity

1,149,647
3,079,315

1,152,748
3,346,822

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

73

CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(million yen)

For the year ended
December 31, 2018

For the year ended
December 31, 2017
[Reference]

Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other operating income
Other operating expense
Operating profit
Finance income
Finance costs
Share of profit (loss) of entities accounted for using
equity method
Gain (loss) on sales of investments accounted forusing equity method
Profit before tax
Income tax expense
ProfitProfit attributable to:
Owners of parent
Non-controlling interests
Total

74

2,120,291(1,303,246)
817,044(595,661)
4,369(13,980)
211,772
8,282(12,731)2,084,877(1,295,399)
789,477(593,108)
12,530(25,706)
183,192
5,206(10,368)

887

1,055

(901)

17,898207,308(56,370)
150,938

196,984(58,135)
138,848

151,077(139)
150,938

141,003(2,155)
138,848

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

Cash 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 cash flows from (used in) investing activities
Cash flows from (used in) financing activities:
Increase (decrease) in financial liabilities
Purchase of treasury shares
Dividends paid
Purchase of shares of subsidiaries not resulting inchange in scope of consolidation
Other
Net cash flows from (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents
resulting from change of scope of consolidation
Cash and cash equivalents transferred to assets
held for sale
Cash and cash equivalents at end of period

75

For the year ended
December 31, 2018

For the year ended
December 31, 2017

207,308
109,206

196,984
101,813901(17,898)(2,759)(8,966)(3,397)(3,799)(11,536)(4,752)
7,490(3,834)

655

1,358

59,513358,664
3,662(6,831)(103,053)
252,441

40,055
309,680
5,839(5,601)(78,205)
231,712(87,888)(986)
10,591(87,883)(1,430)11,939101,646

68,972–(891,555)

989

15,318(1,846)22,505(1,184)(885,823)(228,623)(250)(41,229)

690,607(38)(26,571)

–

(39)

(460)
(270,564)(2,075)
661,882(4,416)

2,111

(33)
58,054

9,883
48,459

(703)

–

–

(288)

57,31758,054

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

As ofDecember 31, 2018

As ofDecember 31, 2017
[Reference]

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

26,938213,3091,067
809
35,362
14,200(1,795)21,212
210,421
1,362
808
9,697
12,211(1,740)Total current assets
Non-current assets:
Property, plant and equipment:
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Leased assets
Construction in progress

289,893

253,973

15,306
421
283
0
1,025
15,037588
33

15,466
423
323
0
1,026
15,037
540
89

Total property, plant and equipment
Intangible assets:
Right of using facilities
Trademarks
SoftwareLeased assets
Other

32,69632,907

39
9,927
9,153
164
6

39
10,893
10,321
167
6

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

19,291

21,42813,923
1,522,395

22,0481,595,648

4,519

4,519

550

1,114

9,212
2,258
(182)

19,6952,137(181)

1,552,677
1,604,664
1,894,557

1,644,982
1,699,318
1,953,291

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

76

NON-CONSOLIDATED BALANCE SHEET(million yen)

As ofDecember 31, 2018

As ofDecember 31, 2017
[Reference]

LIABILITIESCurrent liabilities:
Short term loans payable
Commercial papers
Current portion of bonds
Lease obligations
Accounts payable - otherAccrued expenses
Deposits received
Provision for bonuses
Provision for directors’ bonuses
Other
Total current liabilities
Non-current liabilities:
Bonds payable
Long term loans payable
Lease obligations
Other
Total non-current liabilities
Total liabilities
NET ASSETS
Shareholders’ equity:
Issued capital
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Other retained earnings
General reserve
Retained earnings brought forward
Treasury shares
Total shareholders’ equity
Valuation and translation adjustments:
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

77

233,923
60,00035,000
272
765
3,858
36,304237
310
583

228,075
143,000
20,000
284
767
5,500
90,835197
293
303

371,256489,257

481,604
286,800
542
1,174

516,604
380,282479
1,206

770,121
1,141,377

898,572
1,387,830

182,531
151,683
50,292
101,390
490,449
490,449
195,000
295,449(76,997)
747,666

182,531
151,683
130,292
21,390301,450
301,450
195,000
106,450(76,747)
558,917

4,502

7,175

1,011
5,513
753,180
1,894,557

(631)
6,543
565,460
1,953,291

NON-CONSOLIDATED STATEMENT OF INCOME(million yen)

For the year ended
December 31, 2018

For the year ended
December 31, 2017
[Reference]

Operating revenue
Operating income of the Group
Rent income of real estate
Dividends from subsidiaries and associates

244,201
33,073
1,520
209,606

136,389
33,318
1,529
101,541

Operating expenses
Operating profit
Non-operating income
Interest and dividend income
Foreign exchange gains
Reversal of allowance for doubtful accounts
Other

30,304
213,897
1,173
926
62
–
185

31,682
104,706
1,417
1,177
–
130
109

Non-operating expenses
Interest expenses
Provision of allowance for doubtful accounts
Bond issuance cost
Other
Ordinary profit
Extraordinary income
Gain on sales of fixed assets
Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associates

4,033
3,747
55
–
229
211,037
32,05139
1,699
30,311

5,693
3,528
–
1,902
262
100,430
13,477
0
5,003
8,473

Extraordinary losses
Loss on sales and disposals of fixed assets
Loss on sales of investment securities
Loss on sales of shares of subsidiaries and associates
Loss on valuation of shares of subsidiaries andassociates
Other
Profit before income taxes
Income taxes - current
Income taxes - deferred
Profit

1,151
329
185
–

47,761
1,228
136
94

–

46,105636
241,937
869
10,837230,230

195
66,146
9,465(9,295)65,97578

AUDIT REPORTS
Independent accounting auditor’s report on consolidated financial statements
Independent Auditor’s ReportFebruary 8, 2019
The Board of Directors
Asahi Group Holdings, Ltd.

KPMG AZSA LLC
Hiroyuki Takanami (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
We have audited the consolidated financial statements, comprising the consolidated statement offinancial position, the consolidated statement of profit or loss, the consolidated statement of changes
in equity and the related notes of Asahi Group Holdings, Ltd. as at December 31, 2018, and for theyear from January 1, 2018 to December 31, 2018 in accordance with Article 444-4 of the Companies
Act.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with the latter part of Article 120-1 of the Rules of Corporate Accountingthat prescribes some omissions of disclosure items required under International Financial ReportingStandards, and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatement, whether due
to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audit
as independent auditor. We conducted our audit in accordance with auditing standards generally
accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the consolidated financial statements. The procedures selected depend on our judgment, including
the assessment of the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error. In making those risk assessments, we consider internal control relevant to theentity’s preparation and fair presentation of the consolidated financial statements in order to design
audit procedures that are appropriate in the circumstances, while the objective of the financial
statement audit is not to express an opinion on the effectiveness of the entity’s internal control. An
audit also includes evaluating the appropriateness of accounting policies used and the reasonableness79

of accounting estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position and the results of operations of Asahi Group Holdings, Ltd. and its
consolidated subsidiaries for the period, for which the consolidated financial statements were prepared,in accordance with the latter part of Article 120-1 of the Rules of Corporate Accounting that prescribes
some omissions of disclosure items required under International Financial Reporting Standards.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed
pursuant to the provisions of the Certified Public Accountants 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.

80

Independent accounting auditor’s report on non-consolidated financial statements
Independent Auditor’s ReportFebruary 8, 2019
The Board of Directors
Asahi Group Holdings, Ltd.

KPMG AZSA LLC
Hiroyuki Takanami (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
We have audited the non-consolidated financial statements, comprising the non-consolidated balance
sheet, the non-consolidated statement of income, the non-consolidated statement of changes in net
assets and the related notes, and the supplementary schedules of Asahi Group Holdings, Ltd. as at
December 31, 2018 and for the year from January 1, 2018 to December 31, 2018 in accordance with
Article 436-2-1 of the Companies Act.
Management’s Responsibility for the non-consolidated Financial Statements and Others
Management is responsible for the preparation and fair presentation of the non-consolidated financial
statements and the supplementary schedules in accordance with accounting principles generally
accepted in Japan, and for such internal control as management determines is necessary to enable thepreparation of non-consolidated financial statements and the supplementary schedules that are freefrom material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the non-consolidated financial statements and the
supplementary schedules based on our audit as independent auditor. We conducted our audit inaccordance with auditing standards generally accepted in Japan. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the non-consolidated financial
statements and the supplementary schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the non-consolidated financial statements and the supplementary schedules. The procedures
selected depend on our judgment, including the assessment of the risks of material misstatement of
the non-consolidated financial statements and the supplementary schedules, whether due to fraud or
error. In making those risk assessments, we consider internal control relevant to the entity’s
preparation and fair presentation of the non-consolidated financial statements and the supplementaryschedules in order to design audit procedures that are appropriate in the circumstances, while theobjective of the financial statement audit is not to express an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and81the reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the non-consolidated financial statements and the supplementary schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
OpinionIn our opinion, the non-consolidated financial statements and the supplementary schedules referred toabove present fairly, in all material respects, the non-consolidated financial position and the results ofoperations of Asahi Group Holdings, Ltd. for the period, for which the non-consolidated financial
statements and the supplementary schedules were prepared, in accordance with accounting principles
generally accepted in Japan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed
pursuant to the provisions of the Certified Public Accountants 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.

82

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 95th fiscal year, the period from January 1, 2018 to December 31, 2018, 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, etc. 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 Ordinance 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 Ordinance for Enforcement of the Companies Act) included in the Business Report, based on
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 supplementary schedules forthis 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 Rules of Corporate Accounting)in accordance with the “standards for quality control of audits” (Business Accounting Council;
October 28, 2005), etc., and requested explanations when necessary. Based on the above
activities, the Audit & Supervisory Board examined the non-consolidated financial statements(non-consolidated balance sheets, non-consolidated statement of income, non-consolidated
statement of changes in net assets, and notes to the non-consolidated financial statements), thesupplementary schedules, and the consolidated financial statements (Consolidated statement offinancial position, consolidated statement of profit or loss, consolidated statement of changes inequity, and notes to the consolidated financial statements) for this fiscal year.

83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 12, 2019
Audit & Supervisory Board
Asahi Group Holdings, Ltd.
Akira Muto (Seal)
Standing Audit & Supervisory Board Member
Tetsuo Tsunoda (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 Member

84