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

Items Disclosed on the Internet in Relation to the
Convocation Notice of the 98th Annual General
Meeting of Shareholders

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

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

8

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

10
12

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

29
30

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

ASAHI GROUP HOLDINGS, LTD.

I

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

Overview of the resolution regarding systems to ensure
appropriate business operations
The Board of Directors passed the following resolution with respect to the abovementioned systems.
To “deliver on our great taste promise and bring more fun to life” as stipulated

in its group philosophy, the “Asahi Group Philosophy,” the Company shall:• establish, in accordance with the Companies Act and the Regulation for
Enforcement of the Companies Act, the following basic policies (the “Basic
Policies”) to improve systems designed to ensure the appropriate execution of
Directors’ duties in conformity with laws and regulations and the Articles ofIncorporation of the Company and its subsidiaries (herein this section the“Group Companies”) and ensure the appropriate business operations of theGroup Companies (herein this section the “Internal Control System”);• recognize that it is the Representative Director(s) who shall assume theultimate responsibility for the improvement of the Internal Control System inaccordance with this resolution and demand the Representative Director(s) tocause the officers in charge, through the respective organizations they are in
charge of, to develop and fully enforce individual internal regulations that will
be applied to the Company and the entire Asahi Group and are required basedon the Basic Policies; and• take steps to maintain and enhance the effectiveness of the Internal Control

System by reviewing the Basic Policies and relevant internal regulations thatwill be applied to the Company or the entire Asahi Group in a timely andappropriate manner in accordance with changes in conditions andcircumstances.
(1) System to ensure execution of duties by Directors and employeesof the Company and the Group Companies in conformity with laws
and regulations and the Articles of Incorporation of the Company
and the Group Companies
1)

2)

3)

4)

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

5)

6)

7)

8)

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

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

2)

3)

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

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

2)

3)

4)

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

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

2)

3)

4)

5)

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

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

2)

3)

4)

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

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

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

2)

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

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

2)

3)

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

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

2)

3)

The Group Companies’ Directors, Corporate Auditors, employees or persons
receiving reports from them shall report regularly to the Company’s Audit& Supervisory Board Members on matters related to the Internal Control
System and, shall report on an as-needed basis when a significant event
occurs. When necessary, the Audit & Supervisory Board Members shall beentitled to request reports from the Directors and employees of the Group
Companies.
The Company’s or the Group Companies’ organizations in charge of internal
auditing shall report the results of the Group Companies’ internal audits to
the Audit & Supervisory Board Member of the Company without delay.
The whistle blowing contacts under the Clean Line System shall be theCompany’s Audit & Supervisory Board Members, organization in charge ofgeneral and legal affairs of the Group Companies, or external attorneys atlaw designated by the Company (“external attorneys at law”), and theinformation reported to the Company’s organization in charge of generaland legal affairs of the Group Companies or the external attorneys at law
shall be reported to the Company’s Audit & Supervisory Board Members.
4

4)

The Company prohibits any party from treating the whistle blower
prescribed in the preceding item and this item in any mannerdisadvantageous to him/her on the ground of the whistle blow.

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

5

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

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

3)

4)

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

(3) Risk Management System
1)
2)

3)

The Risk Management System adopts enterprise risk management (ERM)for the overall Asahi Group.
The respective companies of the Asahi Group identify and evaluate criticalrisks that could impede achievement of business objectives across all risk
categories such as strategy and operations. They also draw up action plans
and continually implement and monitor such plans. The respective
companies of the Asahi Group report details of such initiatives to theCompany’s Risk Management Committee, which monitors such initiatives,
while its members identify and evaluate critical risk across the Group, draw
up action plans, and execute and monitor such plans. They also report to
the Board of Directors with the aim of ascertaining effectiveness of suchinitiatives.
The Company has a risk management system in place to deal with any
major accident, disaster, scandal, etc. by setting up an “Emergency
Response Headquarters” under the management of the President andRepresentative Director. The Company assigns top priority to the safety ofits business partners and employees with respect to COVID-19. To suchends, it continues to implement measures to prevent further spread of
infection and has been promoting various initiatives seeking new work6

arrangements, which has entailed making teleworking more of the norm inJapan and carrying out meetings and business discussions online.
In addition, the Company has been making progress in setting the stage forfacilitating a seamless transition to a crisis management approach to be set
into action in times of crisis. During 2021, this has entailed implementing
risk management practices under ordinary conditions, which involves
pinpointing risk that must be addressed immediately should such riskmaterialize, as well as envisioning ramifications of such risk scenarios andmeasures necessary in response. Meanwhile, in alignment with its transition
to a framework consisting of four Regional Head Quarters (RHQ) including
one in Japan, the Company has been strengthening its crisis management
structure internationally in part by clearly assigning entities primary
responsibility for addressing different categories of crisis and bystreamlining flows of information used in the event of a crisis.
(4) Business Management of Group Companies
1)2)

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

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

2)

3)

Audit & Supervisory Board Members attend meetings of the Board of
Directors, the “Corporate Strategy Board,” the “Risk Management
Committee,” the “Compliance Committee” and other important organs, andreceive reports from Directors, employees, thereby confirming the status ofdevelopment and operation of the Internal Control System.
Audit & Supervisory Board Members work to enhance the effectiveness ofauditing by finding opportunities regularly or as needed for exchanging
information and views with the organization in charge of internal auditing,the Independent Accounting Auditor, etc. During fiscal 2021, Audit &Supervisory Board Members had opportunities to exchange information andviews with the organization in charge of internal auditing for a total of 10
times, with the Independent Accounting Auditor for a total of 16 times. Audit& Supervisory Board Members also find opportunities to exchange
information and views with Audit & Supervisory Board Members of the main
Group Companies once a month.
The Company ensures that Audit & Supervisory Board Members and the
Audit & Supervisory Board will be able to smoothly perform their duties by
posting 3 dedicated staff members to the Audit & Supervisory Board.

7

II

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

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

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

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

9

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended December 31, 2021

(million yen)

Equity attributable to owners of parent
Other components of equity

Issued capital

Balance at
beginning ofcurrent period

220,044

Share
premium

Retainedearnings

161,783

967,230

Changes in fairvalue offinancial
Remeasureinstruments
ments ofmeasured atdefinedfair value
benefit plans
through othercomprehensive
incomeTreasuryshares(1,031)

39,605–(8,080)4,584(8,080)

4,584

6,450

(4,584)Comprehensive
incomeProfit153,500

Other
comprehensive
incomeTotal
comprehensive
income––153,500–

Transfer to nonfinancial assets
Transactions
with owners
Dividends(54,220)

Purchase oftreasury shares(26)

Disposal oftreasury shares

0

Share-based
paymenttransaction

134

(52)

Transfer fromothercomponents ofequity toretainedearnings(1,865)

Total
contributions byowners anddistribution toowners–(52)(56,085)

108

6,450

(4,584)Totaltransactions
with owners

–

(52)

(56,085)

108

6,450

(4,584)220,044

161,7311,064,644(923)

37,975–

Balance at endof current
period10

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

2,526

Costs ofhedging(773)

Translationdifferences
on foreign
operations
126,739

Total
equityTotal other attributablecomponent to owners
s of equityof parent

Noncontrollinginterests

Total
equity168,097

1,516,124

1,691

1,517,816–

153,500

322

153,823

Comprehensive
incomeProfitOther
comprehensive
income5,072

172

140,006

141,755

141,755

43

141,799

Total
comprehensive
income5,072

172

140,006

141,755

295,255366

295,622

Transfer to nonfinancial assets

(111)

(111)

(111)

Dividends–(54,220)

Purchase oftreasury shares

–

(26)

(26)

Disposal oftreasury shares

–

135

135

Share-based
paymenttransaction

–

(52)

(52)

1,865

–

–

(111)

Transactions
with owners

Transfer fromothercomponents ofequity toretainedearnings(13)(54,233)

Total
contributions byowners anddistribution toowners

–

–

–

1,865

(54,163)(13)(54,177)

Total
transactions
with owners

–

–

–

1,865

(54,163)(13)(54,177)

7,486

(601)

266,746

311,607

1,757,104

2,043

1,759,148

Balance at endof current
period11

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Basis for Preparation of Consolidated Financial Statements(1) Basis of consolidated financial statements
The Company and subsidiaries of the Company (hereinafter collectively
referred to as the “Group”) have prepared their consolidated financial
statements in accordance with International Financial Reporting Standards(hereinafter referred to as “IFRS”), pursuant to the provisions of Article 120-1of the Regulation on Corporate Accounting. The latter part of the Article 120-1
prescribes some omissions of disclosure items required under IFRS.
(2) Consolidation
Number of consolidated subsidiaries: 211
The Company’s principal consolidated subsidiaries are listed under “VI
Other Status of the Asahi Group, 4. Status of Major Establishments andPrincipal Subsidiaries” of the Business Report.
Allpress Espresso NZ Limited and 7 other companies were added to thescope of consolidation this fiscal year due to the acquisition of their shares.
(3) The equity method
Number of companies accounted for using the equity method: 27
Principal affiliates accounted for using the equity method were Asahi
Business Solutions Corp. and Asahi Beer Communications, Ltd.
(4) Significant accounting policies
1) Financial assets(i) Initial recognition and measurement
The Group recognizes financial assets when it becomes a party to thecontract. Financial assets purchased or sold in a regular way are recognizedon the transaction date. Financial assets are subsequently classified as
financial assets measured at amortized cost or financial assets measured atfair value.
Financial assets measured at fair value through profit or loss are initiallyrecognized at fair value. Financial assets measured at fair value throughother comprehensive income and financial assets measured at amortizedcost are initially recognized at fair value plus transaction costs that are
directly attributable to the acquisition. However, trade receivables that do
not contain a significant financing component are initially recognized at thetransaction price.
a. Financial assets measured at amortized cost
Financial assets are classified as financial assets measured at amortizedcost only when the requirements that the objective of the Group’sbusiness model is to hold assets in order to collect the contractual cash
flows and that the contractual terms of the financial assets give rise on
specific dates to cash flows that are solely payments of principal andinterest on the principal amount outstanding are both met.
b. Financial assets measured at fair value
Financial assets that do not satisfy either of the 2 requirements above
are classified as financial assets measured at fair value.
12With regard to financial assets measured at fair value, the Groupdecides to irrevocably designate each financial instrument as measured
at fair value through other comprehensive income, except for equity
instruments held for trading, which must be measured at fair value
through profit or loss. Equity instruments that are not designated aremeasured at fair value through profit and loss.
Information on derivatives is provided in “11) Derivatives and hedge
accounting.”(ii) Subsequent measurement
Financial assets are subsequently measured based on the classification of
the asset as follows:a. Financial assets measured at amortized cost
These financial assets are measured at amortized cost using theeffective interest method.
b. Financial assets measured at fair value
These financial assets are measured at fair value at the reporting date.
Changes in fair value of such financial assets are recognized in profit orloss or other comprehensive income, depending on their classification.
Dividend income arising from equity instruments designated asmeasured at fair value through other comprehensive income isrecognized in profit or loss. If the fair value decreases significantly or
the equity instrument is disposed of, the accumulated othercomprehensive income is transferred to retained earnings.
(iii) Derecognition
Financial assets are derecognized when the contractual rights to receive
cash flows from the financial assets expire or are transferred in a transactionin which substantially all the risks and rewards of ownership of the financial
assets are transferred to another entity.
(iv) Impairment of financial assets
The Group estimates expected credit losses at the end of each fiscal year
for recoverability of financial assets measured at amortized cost.
For financial instruments of which the credit risk has not increased
significantly after initial recognition, expected credit losses within the next
12 months are recognized as loss allowance. For financial instruments ofwhich the credit risk has increased significantly after initial recognition,
lifetime expected credit losses are recognized as loss allowance. However,for trade receivables, loss allowance is always measured based on lifetime
expected credit losses.
Interest income for financial assets whose credit risk has significantly
increased that have objective evidence of impairment is measured bymultiplying the net carrying amount of the financial asset, less loss
allowances, by effective interest rate.
If all or part of a financial asset cannot be recovered, or is judged to be
extremely unlikely to be recovered, it is deemed to be in default.
In determining whether any objective evidence of impairment exists, theGroup uses the following requirements:● Significant financial difficulties of the issuer or the borrower;● A breach of contract, such as default or past due event in interest or
principal payments;
13

● The lender(s) of the borrower, for economic or contractual reasons
relating to the borrower’s financial difficulty, having granted to theborrower a concession(s) that the lender(s) would not otherwise
consider;● It is becoming probable that the borrower will enter bankruptcy or otherfinancial reorganization; or● The disappearance of an active market for that financial asset becauseof financial difficulties.
The Group directly reduces the gross carrying amount of a financial asset
when there is no reasonable expectation of recovering the financial asset inits entirety or a portion thereof. Subsequent changes in loss allowance arerecognized as impairment gains or impairment losses in profit and loss.
2) Inventories
Inventories are measured at the lower of cost and net realizable value. The
cost is calculated mainly using the weighted-average method for merchandise,finished goods and semi-finished goods, and mainly using the movingaverage method for raw materials and supplies. The cost of merchandise,finished goods and semi-finished goods consists of raw material costs, direct
labor costs, other direct costs and related production overhead costs (basedon the normal production capacity). Net realizable value is determined at theestimated selling price in the ordinary course of business less the relevant
estimated selling expenses.
3) Property, plant and equipment
Buildings and structures, machinery and vehicles, tools, furniture and fixtures,and land mainly consist of production and processing equipment and facilities
for the head office. Property, plant and equipment are recognized at cost, andcarried at cost less accumulated depreciation and accumulated impairment
losses. The cost includes the purchase price, the costs directly related toacquisition of the asset, costs for asset dismantlement and removal and site
restoration, and borrowing costs that are required to be capitalized.
Concerning expenditure after acquisition, in cases when it is highly probablethat future economic benefit relating to the item will flow to the Group, andthe item has a cost that can be measured reliably, such costs are recognizedeither together in the carrying amount of the asset, or when deemed
appropriate, as a separate asset. The carrying amounts of parts that are
replaced are derecognized. Other repair and maintenance costs arerecognized in profit or loss in the accounting period in which the cost wasincurred.
Land is not depreciated. The amount of depreciation of other assets is
calculated by allocating the cost of each asset less the residual value using
the straight-line method over the following major estimated useful lives:
Buildings and structures
3 to 50 years
Machinery and vehicles
2 to 15 years
Tools, furniture and
2 to 20 years
fixtures
Residual values, useful lives and depreciation methods of property, plant andequipment are reviewed at the end of each fiscal year, and revised where
necessary.

14

Gains or losses on disposal are computed by comparing the carrying amountwith the proceeds from disposal, and then recognized in profit or loss.
4) Goodwill and intangible assets(i) Goodwill
Goodwill is tested for impairment annually, and the carrying amount is thecost less accumulated impairment losses. Impairment losses of goodwill are
not reversed. Gain or loss on sales of business operations includes carrying
amount of goodwill related to the business operation.
Goodwill is allocated to cash-generating units or groups of cash-generating
units that are expected to benefit from the business combination.
(ii) Trademarks
Separately acquired trademarks are recognized at cost. Trademarks
acquired through business combinations are recognized at fair value as of
the acquisition date. Trademarks, for which a certain useful life isdetermined, except for those with indefinite useful lives, are recorded atcost less accumulated amortization and accumulated impairment losses.
The amount of amortization is calculated by allocating the cost of
trademarks using the straight-line method mainly over the estimated usefullife of 20 to 40 years.
(iii) Software
Software is carried at cost less accumulated amortization and accumulated
impairment losses.
Development costs directly related to design and testing of the Group’s
proprietary software are recognized as intangible assets only when they are
reliably measurable, they are technically feasible, it is highly probable togenerate future economic benefits, and the Group has an intention andadequate resources to complete the development and use the assets.
Other development costs that do not satisfy these requirements arerecognized as expenses as incurred. Development costs previously
recognized as expenses are not recognized as assets in subsequent fiscal
years.
Software is amortized mainly using the straight-line method over theestimated useful life of 5 years.
Expenses related to maintenance of software are recognized as expenses
as incurred.
(iv) Other intangible assets
Other intangible assets are initially recognized at cost. The costs ofintangible assets acquired through a business combination and recognizedseparately from goodwill are measured at fair value at the acquisition date.
Other intangible assets, for which a certain useful life is determined, arecarried at the cost less accumulated amortization and accumulated
impairment losses. However, some intangible assets (such as leaseholdinterests in land) are determined to have indefinite useful lives and are notamortized, because they exist fundamentally as long as the business
continues. The amount of amortization is calculated by allocating the costof each other intangible asset using the straight-line method over theestimated useful life.
Residual values, useful lives and amortization methods of intangible assets
are reviewed at the end of each fiscal year, and revised where necessary.
155) Leases(i) Leases as Lessee
The Group recognizes the right-of-use asset and the lease liability at thecommencement date of the lease. The right-of-use asset is initiallymeasured at cost. The cost of the right-of-use asset is measured using theamount of the initial measurement of the lease liability adjusted for any
lease payments made at or before the commencement date, plus any initial
direct costs incurred and an estimate of costs to dismantle and remove theunderlying asset or to restore the underlying asset or the site on which it islocated, less any lease incentives received. In its consolidated statement offinancial position, the Group presents right-of-use assets in “Property, plantand equipment” and lease liabilities in “Other financial liabilities.”
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the earlier of the end of the usefullife of the right-of-use asset or the end of the lease term. The estimateduseful lives of the right-of-use assets are determined on the same basis as
those of the equivalent property, plant and equipment. In addition, theright-of-use asset is reduced by impairment losses, if any, and adjusted forcertain remeasurements of the lease liability.
Lease liabilities are initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using
the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. Generally, the Group
uses its incremental borrowing rate as the discount rate.
The Group applies the recognition exemption on short-term leases andleases for which the underlying asset is of low value. Furthermore, theGroup has adopted “COVID-19-Related Rent Concessions (Amendment to
IFRS 16).” When the practical expedient is applied, eligible rent concessions
that are direct consequences of the COVID-19 pandemic do not require an
assessment of whether the concessions are lease modifications. The Groupapplies the practical expedient consistently to contracts with similar
characteristics and in similar circumstances. For rent concessions to which
the Group chooses not to apply the practical expedient or that do not qualify
for the practical expedient, the Group assesses whether there is leasemodification.
(ii) Leases as Lessor
For leases where the Group is the lessor, it determines whether each leaseis a finance lease or an operating lease at contract inception.
When classifying each lease, the Group makes an overall assessment of
whether the lease transfers substantially all the risks and rewards ofownership of the underlying asset. The lease is classified as a finance leasein cases where the risks and rewards are transferred and as an operatinglease in cases where they are not transferred. As part of this assessment,
the Group considers certain indicators, such as whether the lease period
covers the major part of the economic useful life of the underlying asset.
When the Group is an intermediate lessor, it accounts for its interests in thehead lease and the sublease separately. It assesses the lease classification
by reference to the right-of-use asset arising from the head lease, not byreference to the underlying asset.
If the head lease is a short-term lease to which the Group applies the
exemption described above, then it classifies the sublease as an operating16

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

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

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

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

ineffective as a hedge and not subject to the assessment of hedging
effectiveness are recognized in profit or loss.
Accumulated gains or losses recognized in other comprehensive income
through net investment hedges are transferred to profit or loss upon disposalof foreign operations.
12) Application of consolidated taxation system
The Company and its wholly owned subsidiaries in Japan have applied theconsolidated taxation system for filing and paying corporate tax as a single
consolidated group for tax purposes.
13) Accounting for consumption taxes
Consumption taxes that are received from customers and paid to tax
authorities are excluded from revenue, cost of sales, and expense on the
consolidated statement of profit or loss.
2. Notes on Accounting Estimates
The estimates and underlying assumptions are reviewed on an ongoing basis.
The effect of a change in accounting estimates is recognized in the accounting
period in which such change occurs as well as the accounting periods to beaffected in the future.
As of the end of this fiscal year, the Group has made estimates and judgmentsthat have significant impact on the amounts of the consolidated financial
statements, considering the impact of the spread of COVID-19.
Items for which the amount was recorded based on accounting estimates in
the consolidated financial statements for this fiscal year and which may havea material impact on the consolidated financial statements for the following
fiscal year, are as follows.
(Impairment of non-financial assets)
Impairment loss of amounting to ¥11,141 million (goodwill) recognized by theEurope (International) business in the Overseas segment constitutes asignificant portion of the impairment loss recorded in this fiscal year. The
carrying amount of the asset has been reduced to a recoverable amount of¥189,231 million because its recoverable amount has fallen below the carrying
amount as a result of increase in the discount rate, etc. The details have been
provided under “impairment test for goodwill and intangible assets withindefinite useful lives.”(Note) Impairment loss is included in “other operating expense” of theconsolidated statement of profit or loss.
Impairment test for goodwill and intangible assets with indefinite useful lives
In this fiscal year, significant items among goodwill and intangible assets withindefinite useful lives allocated to each cash-generating unit (group of cashgenerating unit) are as below.
Goodwill allocated to the Oceania business in the Overseas segment is¥1,165,801 million.
21

The recoverable amount is measured at fair value less costs of disposal andthe fair value hierarchy is classified into Level 3. The fair value less costs ofdisposal is calculated by discounting the future cash flows at 9.3%. Discountrate is determined with reference to the pre-tax weighted average cost ofcapital of cash-generating unit (group of cash-generating unit).
The future cash flows are based on business plans for 5 years or less thatreflect past experience and external information and have been approved by
the management. The growth rate after the period covered by the businessplans is 2.5%, which has been determined with reference to factors such as
inflation rates in the markets to which cash-generating unit (group of cashgenerating unit) belongs.
Whereas these estimates enlist key assumptions such as increases in future
sales volume and growth rates subsequent to the period covered by thebusiness plans, these estimates are subject to significant effects associatedwith substantial uncertainty and management judgment given that theassumptions are affected by changes in factors such as the businessconditions and competitive environment in Oceania.
The recoverable amount exceeds the carrying amount by ¥277,735 million inthis fiscal year. However, if the discount rate were to increase by 1.3%, thecarrying amount would exceed the recoverable amount.
Goodwill allocated to the Europe (Czech Republic and Slovakia) business in
the Overseas segment is ¥287,218 million.
The recoverable amount is measured at value in use. The value in use iscalculated by discounting the future cash flows at 6.2%. Discount rate isdetermined with reference to the pre-tax weighted average cost of capital of
cash-generating unit (group of cash-generating unit).
The future cash flows are based on business plans for 5 years or less thatreflect past experience and external information and have been approved by
the management. The growth rate after the period covered by the businessplans is 1.2%, which has been determined with reference to factors such as
inflation rates in the markets to which cash-generating unit (group of cashgenerating unit) belongs.
The recoverable amount exceeds the carrying amount by ¥148,783 million inthis fiscal year. However, if the discount rate increases by 1.3%, the carrying
amount will exceed the recoverable amount.
Goodwill allocated to the Europe (International) business in the Overseas
segment is ¥92,835 million.
The recoverable amount is measured at value in use. The value in use iscalculated by discounting the future cash flows at 7.1%. Discount rate isdetermined with reference to the pre-tax weighted average cost of capital of
cash-generating unit (group of cash-generating unit).
The future cash flows are based on business plans for 5 years or less thatreflect past experience and external information and have been approved by
the management. The growth rate after the period covered by the businessplans is 1.0%, which has been determined with reference to factors such as
inflation rates in the markets to which cash-generating unit (group of cashgenerating unit) belongs.
22

Whereas these estimates enlist key assumptions in terms of increases infuture sales volume and growth rates subsequent to the period covered bybusiness plans, these estimates are subject to significant impact associatedwith a high degree of uncertainty and management judgment given that theassumptions are susceptible to effects of factors that include the businessenvironment with respect to export markets and variation in the competitive
landscape.
3. Notes to Consolidated Statement of Financial Position(1) Pledged assets and secured liabilities
The following assets are pledged as collateral for borrowings and other current
liabilities of ¥2,645 million.
Property, plant and equipment¥887 million

Cash and cash equivalents¥76 million

Other¥1,254 million(2) Accumulated depreciation on property, plant andequipment¥1,076,256 million(3) Bad debt provisions directly deducted from assets
Trade and other receivables¥9,199 million

Other financial assets¥681 million(4) Contingent liabilities
Guarantees¥22 million

4. Notes to Consolidated Statement of Changes in Equity(1) Total number of the issued shares as of the end of this fiscal year
Common stock
507,003,362 shares(2) Dividends during this fiscal year
1) It was resolved at the 97th Annual General Meeting of
Shareholders of March 25, 2021 as follows:
Dividends on common stock
Total amount of dividends:¥26,861 million

Dividend per share:¥53

Record date:

December 31, 2020

Effective date:
March 26, 2021
Total amount of dividends includes dividends of ¥5 million for shares of theCompany held by Custody Bank of Japan, Ltd. as the trust assets of a stockcompensation plan.
2) It was resolved at the Board of Directors Meeting of August 10,
2021, as follows:
Interim dividends on common stock23

Total amount of interim dividends:
Interim dividend per share:¥27,368 million¥54

Record date:June 30, 2021

Effective date:
September 1, 2021
Total amount of interim dividends includes dividends of ¥4 million for sharesof the Company held by Custody Bank of Japan, Ltd. as the trust assets of astock compensation plan.
(3) Dividends after the end of this fiscal year
The following item has been placed on the agenda for approval at the 98th
Annual General Meeting of Shareholders scheduled for March 25, 2022.
Dividends on common stock
Source of dividends:

Retained earnings

Total amount of dividends:¥27,875 million

Dividend per share:¥55

Record date:

December 31, 2021

Effective date:
March 28, 2022
Total amount of dividends includes dividends of ¥4 million for shares of theCompany held by Custody Bank of Japan, Ltd. as the trust assets of a stockcompensation plan.
5. Notes on Financial Instruments(1) Status of financial instruments
1) Capital management
The Group’s purpose for capital management is to maintain its ability tocontinue as a going concern in order to provide returns to shareholders, grant
benefits to other stakeholders and maintain the most appropriate capital
structure for reducing capital cost.
In order to maintain or adjust the capital structure, the Group may adjust theamount of dividends paid to shareholders, redeem the capital to shareholders,issue new shares, or sell assets to reduce debts.
The Group monitors the capital based on the capital and liabilities ratio. Thisratio is calculated by dividing the amount of net liabilities by the capital. The
amount of net liabilities is calculated by deducting cash and cash equivalentsfrom interest-bearing debts. The capital shall be the “equity” presented in the
consolidated statement of financial position (equity attributable to owners ofparent).
2) Risk management
The Group’s activities are exposed to various financial risks such as market
risks (including foreign exchange risk, price risk and interest rate risk), credit
risks and liquidity risks. The Group’s risk management policy focuses on theunpredictability of financial markets and minimize the potentially adverse
impact on the Group’s financial performance. The Group uses derivativetransactions to hedge certain risk exposures.
The Company and its principal consolidated subsidiaries procure necessary
funds via loans from financial institutions and by issuing commercial papers
24and bonds, while taking into account the balance between direct and indirect
financing or the balance between short- and long-term debt from theperspective of fund procurement cost and risk diversification in response tochanges in the business environment. To use funds efficiently in the entire
Group, the Company and its principal consolidated subsidiaries haveintroduced a cash management system to reduce consolidated interestbearing debt. If surplus funds are generated temporarily, the Company
invests it only in safe financial instruments.
The Group uses derivative transactions to the extent of balances of foreign
currency denominated assets and liabilities and bonds and borrowings, asmeans to mitigate foreign exchange risk, price risk of raw materials and others
and interest rate risk, as well as to reduce fund procurement cost.
When using derivative transactions, in principle, the Company trades only withfinancial institutions with high credit ratings.
At the Company, the Finance Section is in charge of executing and managing
derivative transactions, in accordance with internal rules.
Contracts on each derivative transaction are entered into after approval isreceived in accordance with the Company’s authorization criteria. The Finance
Section reviews the status of derivative transactions including the content andbalances, and reports it to the General Manager of the Finance Section andthe officer in charge of finance as needed.
The consolidated subsidiaries also enter into such agreements in accordancewith the Group’s authorization criteria, and the Company reviews their statusbased on reports submitted by them on a regular basis.
(i) Market risk
a. Foreign exchange risk
The Group conducts business activities internationally and is exposed
to foreign exchange risk mainly related to US dollar, Euro, Czech Koruna
and Australian dollar. Foreign exchange risk arises from forecast
transactions such as future purchase, sale, financing and repayment orassets and liabilities that have already been recognized.
The Group uses foreign exchange contracts and currency swaps tomitigate foreign exchange risk. Hedge accounting is applied to thetransactions that qualify for hedge accounting. When designating
hedging instruments, the Group classifies the currency basis spread of
currency swaps and the forward element of forward exchange contracts
as costs of hedging for accounting treatment, and records them as costsof hedging, which are an independent item of other components ofequity.
Although receivables, payables and others denominated in a foreign
currency have a risk of foreign exchange fluctuations, the impact islimited since the risk is offset with the exchange contracts.
b. Price risk
The Group is exposed to price risk of equity instruments since it holds
investments classified as the category measured at fair value in the
consolidated statement of financial position. To manage price risk
arising from investments in equity instruments, the Group regularly
keeps track of fair value, financial conditions of issuers and others, andalso reviews the overall status on an ongoing basis.
The Group has no equity instruments held for short-term trading anddoes not intend to actively trade these investments.
25

Furthermore, the Group is exposed to price risk of raw materials sinceprices of major raw materials used in its products fluctuate according
to weather, natural disaster and other factors. The Group engages incommodity swap transactions to mitigate risks of fluctuations in raw
materials prices. Although commodity swap transactions used by theGroup have risks of fluctuations in market prices of commodities, pricerisk is limited because these risks are offset with risks of fluctuations inmarket prices of commodities in association with trade payables of
those commodities that the Group has.
c. Interest rate risk
The Group raises funds with variable interest rates and is exposed tointerest rate risk. Interest rate risk mainly arises from non-current
borrowings.
The Group uses interest rate swaps, which substantially fix interest
rates, to mitigate interest rate risk. Hedge accounting is applied to thetransactions that qualify for hedge accounting.
(ii) Credit risk
The Group is exposed to credit risks for trade receivables (notes andaccounts receivable-trade), other receivables (accounts receivable-other)and other financial assets (operating loans and others).
In accordance with the accounting regulations, the Group regularly monitors
the status of major business partners for trade receivables and operatingloans and routinely checks the management status of deadlines andbalances for each business partner. The Group also monitors creditimpaired financial assets and their collection status.
When executing derivative transactions, in principle, the Group trades onlywith financial institutions with high credit ratings to mitigate credit risk.
The Group classifies receivables based on credit risk profile to calculate loss
allowance.
For trade receivables, loss allowance is always recognized at the amountequal to lifetime expected credit losses. For receivables other than tradereceivables, loss allowance is recognized at the amount equal to 12-month
expected credit losses, in principle. However, in cases such as overdue,
because the credit risk is considered to have significantly increased fromthe initial recognition, loss allowance is recognized at the amount equal tolifetime expected credit losses.
The amount of loss allowance is calculated as follows:● Trade receivables
The simplified approach is applied. The Group categorizes receivables
according to credit risk profile of the counterparty and calculates loss
allowance by multiplying the receivables by the provision rate, which isdetermined by adding projection of future economic conditions andothers to the historical rate of credit losses calculated according to thecategory.
● Receivables other than trade receivables
The general approach is applied. Loss allowance for receivables forwhich the credit risk is not considered to have significantly increased is
calculated by multiplying the carrying amount by the provision rate,
which is determined by adding projection of future economic conditions
and others to the historical rate of credit losses for similar assets. For
assets for which the credit risk is considered to have significantly26

increased and credit-impaired financial assets, loss allowance iscalculated as difference between the amount of the present value,
which is computed by discounting estimated future cash flows using theoriginal effective interest rate of the asset, and the carrying amount.
(iii) Liquidity risk
The Group raises funds via loans and by issuing commercial papers andbonds, and is exposed to liquidity risk, which means there is a possibility
the Group fails to make payment on the due date due to deterioration in
the fund procurement environment.
Since the Company and its principal consolidated subsidiaries haveintroduced the cash management system, the Company manages liquidity
risks of those companies participating in this system.
Based on reports from each Group company, the Company creates its cash
management plan and updates the plan on a timely basis. The Group
monitors an ongoing forecast for fund demand, while always maintaining
sufficient margin in the unused portion of the contractual credit line andensuring that all loan agreements do not conflict with the borrowing limits
or covenants (if applicable). In these forecasts, the Group takes into
account its borrowing and financing plan, compliance with covenants,
adherence to internal targets for the statements of financial position ratio
as well as applicable external regulatory and statutory requirements, suchas a regulation of currency, if any.
Surplus that the Company and its principal consolidated subsidiaries hold inexcess of the balance necessary for management of working capital ismanaged at the Group level under the cash management system. The
Group chooses financial instruments with appropriate maturity and liquidity,
and makes investments in current deposits, time deposits, money market
deposits and marketable securities to ensure a sufficient margin determinedin the above forecast.
(2) Fair value of financial instruments
In fair value measurement, the Group uses observable market data wheneveravailable. The fair value measurement is categorized into any of the following
levels based on the level of the input:
Level 1: Input consisting of unadjusted quoted prices in active markets
for identical assets and liabilities
Level 2: Input consisting of directly or indirectly observable prices
other than market prices used in level 1
Level 3: Input that is not based on observable market data
Reclassification between levels in the fair value hierarchy is recognized on thedate of the event or change in circumstances that caused the reclassification.
The carrying amounts and fair values of financial instruments not measured atfair value are as follows:(million yen)
Carrying amount
Fair value
Long-term loans receivable
Long-term borrowings
Bonds

1,666

1,582

197,997

197,978

1,165,905

1,176,248

Each of the amounts in the above table includes the portion scheduled to becollected, repaid, or redeemed within 1 year.
27

Financial instruments for which the carrying amount is reasonably approximate
to the fair value, and lease liabilities, are not included in the table above.
The fair value of long-term loans receivable is calculated by discounting the
expected amount of principal and interest receivable by the interest rate
expected if a similar new loan were to be issued, thereby deriving the present
value.
The fair value of long-term borrowings is calculated by discounting the total
amount of principal and interest by the interest rate expected if a similar new
borrowing were to be taken out, thereby deriving the present value.
The fair value of bonds is set to market prices when market prices are available.
In the above fair value measurement, bonds are classified into Level 2, whileothers are classified into Level 3. For bonds in Level 2, fair value is estimatedusing the reference trading statistics of Japan Securities Dealers Associationand others. Fair value of financial instruments in Level 3 is measured bydiscounting contractual cash flows using the market interest rate, and thedifference with carrying amount is due to a difference between the market
interest rate and the contractual interest rate.
6. Notes to per Share Information(1) Equity attributable to owners of parent per share(2) Basic earnings per share¥3,467.47¥302.92

7. Additional Information(Business combination)
In this fiscal year, the provisional accounting treatment for businesscombinations were finalized regarding the acquisition of all issued shares of CUB
Australia Holding Pty Ltd (Company name changed from ABI Australia Holding
Pty Ltd on August 7, 2020) through the Company’s consolidated subsidiary Asahi
Holdings (Australia) Pty Ltd. There is no change in this fiscal year arising fromthe finalization of the provisional accounting treatment in the previous fiscal
year.
8. Significant Subsequent Events
Not applicable.
9. Other
The stated amounts are the figures after truncating fractions less than the
representative unit.

28

NON-CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSFor the year ended December 31, 2021

(million yen)
Shareholders’ equity

Capital surplus

Retained earnings
Other retained earnings

SharecapitalLegalcapitalsurplus

Othercapitalsurplus

Total capitalsurpluses

220,216

87,977

106,533

194,511

Generalreserve

Retainedearnings
brought
forwardTotal
retainedearnings

195,000

508,383

703,383

Dividends(54,230)(54,230)

Profit173,574

173,574

Balance at
beginning ofcurrent period
Changes of items
during period

Purchase oftreasury shares
Disposal oftreasury shares

00

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

–

–

0

0

–

119,344

119,344

Balance at end of
220,216
current period

87,977

106,533

194,511

195,000

627,728

822,728

Shareholders’ equity
TreasurysharesBalance at
beginning ofcurrent period

Valuation and translation adjustments

Valuation
Total
difference onshareholders’available-forequity
sale securities(1,031) 1,117,079(458)

Deferred
gains orlosses onhedges(3,085)

Total
valuation andtranslation
adjustments

Total net
assets(3,543) 1,113,536

Changes of items
during period
Dividends(54,230)(54,230)

Profit173,574

173,574

Purchase oftreasury shares

(26)

(26)

(26)

Disposal oftreasury shares

134

135

135

Net changes of
items other thanshareholders’equity2,340(5,581)(3,241)(3,241)

116,211

Total changes of
items during
period108

119,453

2,340(5,581)(3,241)

Balance at endof current period(923) 1,236,533

1,882(8,667)(6,785) 1,229,747

29

NOTES TO THE NON-CONSOLIDATED FINANCIAL STATEMENTS
1. Notes to Significant Accounting Policies(1) Valuation basis and method for securities
Shares in subsidiaries and affiliates:
Stated at cost based on the moving-average method
Available-for-sale securities
Securities with market value:
Carried at the average market value for the month immediately preceding
the balance sheet date (related valuation differences are directly charged or
credited to net assets, and the cost of securities sold is computed by themoving-average method.)
Securities without market value:
Stated at cost based on the moving-average method(2) Valuation basis and method for derivatives
Market price method(3) Depreciation methods for non-current assets
Property, plant and equipment (excluding leased assets):
Property, plant and equipment are depreciated using the straight-line
method.
The estimated useful lives of the assets are based on the same standards
as those specified in the Corporation Tax Act.
Intangible assets (excluding leased assets):
Intangible assets are amortized using the straight-line method.
The estimated useful lives of the assets are based on the same standards as
those specified in the Corporation Tax Act.
Software for internal use is amortized by the straight-line method over auseful life of 5 years. Trademark right is mainly amortized over 20 years
using the straight-line method.
Leased assets:
Finance leases that do not transfer ownership rights are amortized to aresidual value of zero using the straight-line method, with the lease period
as the estimated useful life.
(4) Accounting criteria for allowances
Allowance for doubtful accounts:
The allowance for doubtful accounts consists of the individually estimateduncollectible amounts with respect to certain identified doubtful receivables
and the amounts calculated using the rate of actual collection losses withrespect to the other receivables.
Provision for bonuses:
A provision for bonuses is provided to prepare for the bonus payment toemployees at the estimated amount applicable to this fiscal year out of theestimated future bonus payment amount.
Provision for bonuses for directors (and other officers):
A provision for bonuses for directors (and other officers) is provided to prepare
for the bonus payment to officers at the estimated amount applicable to thisfiscal year out of the estimated future bonus payment amount.

30

(5) Hedging accounting method
1) Hedging accounting method
The Company defers gains or losses on its hedges.
For foreign exchange contracts and currency swaps, the Company allocatesdifferences in the values of hedging instruments when such hedges meet all
requirements for such allocations. For interest rate swaps, the Company
applies exceptional treatment when the swap in question meets the conditions
for application of such exceptional treatment.
2) Hedging instruments and hedged items
Hedging instruments:

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

Hedged items:

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

3) Hedging policy
Derivatives are used to avoid risks associated with fluctuations in foreignexchange markets and in interest rates and to reduce the costs of financing.
It is the Company’s policy not to engage in speculative transactions thatdeviate from real demand or in highly leveraged derivatives.
4) Method of evaluating the effectiveness of hedging
The Company assesses the effectiveness of its hedges by comparing changes
in the market values of the hedging instruments and of the hedged items overthe entire period of the hedge.
When the Company allocates differences in the values of hedging instruments
or when it accounts for the value of swaps under exceptional treatment, these
determinations allow it to forgo evaluation of the effectiveness of hedges inthese cases.
(6) Other significant items associated with the preparation of nonconsolidated financial statements
1) Application of consolidated taxation system
The Company has applied consolidated taxation system from this fiscal year.
As for items regarding the transition to the group tax sharing system
introduced in the “Act Partially Amending the Income Tax Act” (Act No. 8 of2020), the Company has not applied the provisions of paragraph 44 of the“Guidance on Accounting Standard for Tax Effect Accounting” (AccountingStandards Board of Japan (ASBJ) Guidance No. 28, February 16, 2018) asallowed by the provisions of paragraph 3 of the “Tax Effect Accounting for theTransition from the Consolidated Taxation System to the Group Tax Sharing
System” (ASBJ PITF No. 39, March 31, 2020). Accordingly, amounts ofdeferred tax assets and deferred tax liabilities are determined in accordancewith the provisions of the tax law before the revision.

312) Treatment of consumption taxes
Consumption taxes are excluded from the statement of income, except in thecase of non-deductible consumption taxes related to non-current assets thatare charged when incurred.
2. Notes to Changes in Presentation(1) Notes on accounting estimates are to be presented in the non-consolidated
financial statements beginning with this fiscal year in accordance withapplication of the “Accounting Standard for Disclosure of Accounting
Estimates” (ASBJ Statement No. 31, March 31, 2020).
(2) In the previous fiscal year, “Accounts receivable-other” was included in“Other,” but because of increasing materiality in quantity, it is separately
presented from this fiscal year. “Accounts receivable-other” in the previous
fiscal year was ¥9,042 million.
3. Notes on Accounting Estimates
The accounting estimates have been calculated using amounts deemed
reasonable based on information available when preparing the nonconsolidated financial statements. Of the amounts calculated based on
accounting estimates and recorded in the non-consolidated financial
statements of this fiscal year, the following items are subject to risk that
could significantly affect non-consolidated financial statements of thesubsequent fiscal year.
(1) Valuation of shares of subsidiaries and associates whose market
values are deemed extremely difficult to measure1) Amounts recorded in the non-consolidated balance sheet of thisfiscal year
An amount of ¥2,674,981 million has been recorded under shares ofsubsidiaries and associates. The amount includes ¥1,340,416 million
associated with shares of Asahi Holdings (Australia) Pty Ltd., and ¥175,364
million associated with shares of Asahi International Ltd.
2) Other information to facilitate understanding of the accounting
estimates among users of the non-consolidated financial
statements
For shares of subsidiaries and associates whose market value is extremely
difficult to measure, a valuation loss is recognized if the value in substancedecreases by 50% or more due deteriorating financial position of the company
issuing such shares, unless there is sufficient evidence otherwise
substantiating the potential for recoverability.
In addition, valuation in substance with respect to some shares of subsidiaries
and associates is calculated to reflect excess earnings power. Accordingly,
valuation of Asahi Holdings (Australia) Pty Ltd. shares has been calculated toreflect excess earnings power of the Oceania business, and valuation of Asahi
International Ltd. shares has been calculated to reflect excess earnings powerof the Europe (International) business.
In relation to the valuation of excess earnings power, the Company tests for
impairment with respect to such goodwill on an annual basis in the
consolidated financial statements. For further details, please refer to “NOTES
32

TO THE CONSOLIDATED FINANCIAL STATEMENTS, 2. Notes on Accounting
Estimates (Impairment of non-financial assets).”
As a result of the above, valuation loss has not been recognized with respect
to the end of this fiscal year because value in substance, which reflects thevalue in substance of the companies, has not decreased by more than 50%.
Key assumptions of the estimate of the value in substance for the shares ofAsahi Holdings (Australia) Pty Ltd. and the shares of Asahi International Ltd.
are the same as the assumptions employed in calculating the recoverable
amount estimates used in testing for impairment when preparing theconsolidated financial statements (Please refer to “NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS, 2. Notes on Accounting Estimates(Impairment of non-financial assets”).
Valuation loss may occur in the subsequent fiscal year if it becomes necessary
to revise these assumptions.
4. Notes to the Non-Consolidated Balance Sheet(1) Accumulated depreciation on property, plant and equipment¥32,314 million(2) Contingent liabilities
1) Guarantees against bank loans
Guarantees:¥6,534 million

2) Guarantees against derivatives
Guarantees:¥47 million(3) Monetary claims and obligations with associates (excluding thoseclassified separately in the Balance Sheet)
Short-term monetary claims on associates:¥252,137 million

Short-term monetary obligations to associates:¥211,190 million

5. Notes to the Non-Consolidated Statement of Income(1) Loss on valuation of shares of subsidiaries and associates
Loss on valuation of share of subsidiaries and associates is an impairment loss
related to the shares of Lotte Asahi Liquor Company Ltd., which operates
importing and marketing of liquor in South Korea.
(2) Transactions with associates
Operating revenue:¥209,978 million

Operating expenses:¥10,052 million

Transactions other than operating transactions:¥2,751 million

33

6. Notes to the Non-Consolidated Statement of Changes in Net Assets
Treasury shares(shares)Number of
Number of
Decrease
Increasesharessharesduring thisduring thisType of stock
as of Dec. 31,
as of Jan. 1,
fiscal year
fiscal year
2021
2021
Common287,954
5,363
30,130263,187
stock(Outline of reason for change)
The increase in the number of shares was the result of the following:
Increase resulting from purchases of Less-than-One-Unit Shares fromshareholders upon request:
5,363 shares
The decrease in the number of shares was the result of the following:
Decrease resulting from sales of Less-than-One-Unit Shares to shareholders
upon request:
170 shares
Decrease resulting from payment of stock compensation to retired directors:
29,960 shares
Treasury shares include 80,482 shares of the Company’s common stock heldby Custody Bank of Japan, Ltd. as the trust assets of a stock compensation
plan.

34

7. Notes to Tax Effect Accounting(1) Breakdown of main reasons for the accrual of deferred tax assets
and liabilities(Deferred tax assets)
Shares of subsidiaries and associates due to restructuring:
Allowance for doubtful accounts, in excess of taxdeductible amount:
Loss on valuation of shares of subsidiaries, non-tax
deductible:
Loss on valuation of capital contributions for subsidiaries,
non-tax deductible:
Loss on valuation of investment securities, non-tax
deductible:
Tax loss carry forwards
Deferred losses on hedges
Deferred loss on transfer of business between consolidated
corporations:
Others:Subtotal deferred tax assets:
Valuation allowance:¥16,703 million¥1,202 million¥34,725 million¥4,558 million¥788 million¥1,014 million¥3,862 million¥746 million¥1,016 million¥64,618 million¥(33,372) million

Total deferred tax assets¥31,245 million(Deferred tax liabilities)
Deferred gain on transfer of business between
consolidated corporations:
Valuation difference on available-for-sale securities:
Others:¥(5,026) million¥(760) million¥(316) million

Total deferred tax liabilities¥(6,104) million

Net deferred tax assets¥25,141 million(2) Breakdown of main items which caused the difference between thestatutory effective tax rate and the effective tax rate after adoptionof tax effect accounting
Statutory effective tax rate:(Adjustments)
Permanent difference (non-deductible), including
entertainment expenses:
Valuation allowance:
Permanent difference (non-taxable), including dividend
income:Others:
Effective tax rate after adoption of tax effect accounting:35

30.62%
0.33%(7.28)%(32.44)%0.08%(8.69)%

8. Notes to Related Party Transactions
Subsidiaries and affiliates(million yen)Type

Company

Subsidiary Asahi
Breweries,
Ltd.

Subsidiary Asahi Soft
Drinks Co.,Ltd.

Subsidiary Asahi Group
Foods, Ltd.

Percentage Relationshipof voting with related
rights held
party

Descriptionoftransaction100%
directownership100%
directownership100%
directownership

Subsidiary Asahi Europe 100%
anddirectInternational ownership
Ltd

Subsidiary Asahi
Holdings(Australia)
Pty Ltd100%
directownership

Transaction
amountAccount
item

Balance asof Dec. 31,
2021

Operatingrevenue(Note 1)60,964Other(current
assets)15,435

Loaning
funds(Note 2)

(8,714)

Short-term
loans
receivable

123,619

Operatingrevenue(Note 1)

26,799Other(current
assets)17,944

Deposits
received(Note 3)48,507

Deposits
received

48,507

Interlocking Loaningof directors/ funds
corporate(Note 2)
auditors(1,649)

Short-term
loans
receivable

32,076

Operatingrevenue(Note 1)

47,124Other(current
assets)22

Deposits
received(Note 3)

15,224

Deposits
received

78,306

Operatingrevenue(Note 1)

59,786Other(current
assets)561

Deposits
received(Note 3)224

Deposits
received

63,956

Guarantees
for liabilities(Note 4)

3,336

–

–

Interlockingof directors/
corporate
auditors

Interlockingof directors/
corporate
auditors

Interlockingof directors/
corporate
auditors

Interlockingof directors/
corporate
auditors

Subsidiary Asahi
100%
Professional direct
Management ownershipCo., Ltd.

Interlockingof directors/
corporate
auditors

Outsourcing
indirect
services,
etc.
(Note 5)

3,395

Accruedexpenses

82

Subsidiary Asahi Quality 100%&
directInnovations, ownership
Ltd.

Interlockingof directors/
corporate
auditors

Outsourcing
research
services,
etc.
(Note 6)

5,899

Accruedexpenses

1,640

Terms and conditions of transaction and policy on determination thereof
Note 1: Operating revenue is determined in accordance with certain reasonable standards in order toprovide supervision and guidance, etc. regarding business management.
Note 2: The interest rate for the loans receivable is reasonably determined, taking the market interest
rate into consideration. For the transaction amount, the amount of net increase (decrease) in thisfiscal year is stated.
Note 3: The interest rates for the deposits received and short-term borrowings are reasonably determined,taking the market interest rate into consideration. For the transaction amount, the amount of net
increase (decrease) in this fiscal year is stated.
Note 4: The Company guaranteed bank loans in the amount of AUD40 million.
Note 5: The amount of outsourced indirect services, etc. is determined based on certain reasonable
standards.
Note 6: The amount of outsourced research services, etc. is determined based on certain reasonable
standards.
Note 7: In September 2021, Asahi Breweries Europe Ltd was renamed Asahi Europe and International Ltd.

36

9. Notes to per Share Information(1) Net assets per share:(2) Earnings per share (Profit per share):¥2,426.78¥342.54

10. Significant Subsequent Events(Company split)
At a meeting of the Board of Directors held on November 10, 2021, theCompany passed a resolution to transfer certain functions of the Company
relating to the business management of domestic operations to Asahi Group
Japan, Ltd., a wholly-owned subsidiary of the Company, by way of a corporate
split, and transferred the business of the Company to the successor company
on January 1, 2022.
(1) Description of transaction
1) Parties to the business combination and description of businesses
thereofa) Combiner (successor company)
Name:
Asahi Group Japan, Ltd.
Business description:
Overseeing alcoholic beverages, soft drinks, andfoods operations, etc. in Japan as anintermediate holding companyb) Combinee (split company)
Name:
Asahi Group Holdings, Ltd.
Business description:
Setting strategies and overseeing managementof the entire Group as a holding company
2) Date of business combination
January 1, 2022
3) Legal form of the business combination
Simple absorption-type split with the Company constituting the split company
and Asahi Group Japan, Ltd. constituting the successor company
4) Name after business combination
Unchanged
5) Purpose of the split
The Asahi Group is looking to generate global synergies and expand anddevelop its five global brands while further boosting the competitiveness ofbusiness conducted in the areas overseen by each of its RHQ in Japan, Europe,
Oceania, and Southeast Asia. The split will enable the Company to shift its
focus to developing strategies and overseeing the management of the entire
Group, while Asahi Group Japan will seek to expand the Group’s businesses
in Japan and maximize its value.
(2) Overview of accounting treatment
In accordance with the “Accounting Standard for Business Combinations” (ASBJ
Statement No. 21, January 16, 2019) and the “Implementation Guidance on
Accounting Standard for Business Combinations and Accounting Standard forBusiness Divestitures” (ASBJ Guidance No. 10, January 16, 2019), the37Company will account for the business combination as a transaction undercommon control.
11. Other
The stated amounts are the figures after truncating fractions less than the
representative unit.

38