CONVOCATION NOTICE OF THE 94th
ANNUAL GENERAL MEETING OF
SHAREHOLDERSDATE AND TIME
March 27 (Tuesday), 2018 at 1:00 p.m. (JST)(Reception start time: 11:30 a.m.)
PLACE
Banquet Room “Tsuru,” Banquet Floor of “The Main”
of Hotel New Otani, 4-1, Kioi-cho, Chiyoda-ku, Tokyo
DEADLINE FOR EXERCISING VOTING RIGHTS
VIA POSTAL MAIL AND INTERNET
No later than 5:30 p.m., March 26 (Monday), 2018 (JST)TABLE OF CONTENTS
Convocation Notice
Reference Materials for
General Meeting of Shareholders
Item 1 Appropriation of Retained Earnings
Item 2 Reduction in Amount of Legal
Capital Surplus
Item 3 Election of ten (10) Directors
Item 4 Election of one (1) Audit &Supervisory Board Member

20(Attached Materials)
Business Report
Consolidated Financial Statements
Non-Consolidated Financial Statements
Audit Reports

24
56
60
63

2
6
6
7
8

ASAHI GROUP HOLDINGS, LTD.
Securities Code: 2502
English Translation of Original JapaneseThis is a translation of the original notice inJapanese. In the event of any discrepancy, theoriginal notice in Japanese shall prevail.

Dear Shareholders:
You are cordially invited to attend
the 94th Annual General Meeting of Shareholders
of Asahi Group Holdings, Ltd., which will be held
as described in the following particulars.
Sincerely,
March 5, 2018

Akiyoshi Koji
President and Representative Director

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

1

CONVOCATION NOTICE OF
THE 94 ANNUAL GENERAL MEETING OF SHAREHOLDERSth

1. DATE AND TIME
March 27 (Tuesday), 2018, at 1:00 p.m. (JST) (Reception start time: 11:30 a.m.)

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

3. PURPOSES
Items to be reported:
Business Report, Consolidated Financial Statements, Non-Consolidated Financial
Statements and Reports of the audit results of the consolidated financial statements by
the Independent Accounting Auditor and the Audit & Supervisory Board for the 94th
term, from January 1, 2017 to December 31, 2017.

Items to be resolved:
Item 1: Appropriation of Retained Earnings
Item 2: Reduction in Amount of Legal Capital Surplus
Item 3: Election of ten (10) Directors
Item 4: Election of one (1) Audit & Supervisory Board Member
Note: Among attached materials to be provided with this notice, the “Consolidated Statement of Changes in Equity,” “Notes to theConsolidated Financial Statements,” “Non-consolidated Statement of Changes in Net Assets” and “Notes to the Non-Consolidated
Financial Statements,” are posted on the Company’s website in accordance with the provisions of relevant laws and regulations andthe Article 15 of the Company’s Articles of Incorporation, and they are not attached to this notice.
Accordingly, the attached materials to this notice are part of the Consolidated Financial Statements and Non-consolidated Financial
Statements, which have been audited by the Independent Accounting Auditor in preparing their audit reports and Audit &Supervisory Board Members and Audit & Supervisory Board in preparing their audit reports.
If there are any corrections to Reference Materials for General Meeting of Shareholders, Business Report, Consolidated Financial
Statements, and Non-Consolidated Financial Statements, they will be posted on the Company’s website.

http://www.asahigroup-holdings.com/en/2

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

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

Attending the General Meeting of Shareholders in person
Date and time of the General Meeting of Shareholders:March 27 (Tuesday), 2018, at 1:00 p.m. (JST) (Reception start time: 11:30 a.m.)Please submit the voting form at the reception desk at the venue.
Please also bring this notice with you, to help us preserve resources.
You are advised to arrive at the venue early, as the reception desk is expected to become
extremely crowded immediately before the commencement of the meeting.
Please note that anyone other than a shareholder who is entitled to exercise voting rights (e.g.,
non-shareholding proxy, person accompanying the shareholder) will not be allowed inside thevenue.

Not attending the General Meeting of Shareholders in person
If you are unable to attend the meeting in person, you may exercise your voting rights via either
postal mail or Internet. Please review the attached “REFERENCE MATERIALS FOR
GENERAL MEETING OF SHAREHOLDERS,” and exercise your voting rights no later than
5:30 p.m., March 26 (Monday), 2018 (JST) by following the “Guide to Exercising Voting
Rights” on pages 3 - 5.
Deadline for exercising voting rights:
No later than 5:30 p.m., March 26 (Monday), 2018 (JST)(1) Voting via Postal Mail
Please indicate your consent/dissent concerning the items shown on the voting form, and sendback the form so that it will arrive no later than the deadline for exercising voting rights.

<Guide to filling in the voting form for exercising voting rights>
Please indicate your consent/dissent with respect to each item here.
Your “voting code” (議決権行使コード) and“password” (パスワード),
which are necessary forexercising voting right,
are stated here.

* If you exercise your voting rights in duplicate (i.e., voting online as well as voting by using the voting form), only
the online vote will be counted.

3

If you consent:
Mark a ○in the box marked “賛”Items 1, 2 and 4
If you dissent:
Mark a ○in the box marked “否”

Item 3
If you selectively veto certain candidates:
For all candidates
Mark a ○ in the box marked “賛” andIf you consent:
If you dissent:
Mark a ○ in the box Mark a ○ in the box write the number of each candidate you
choose to veto.
marked “賛”marked “否”* If you submit a voting form without indicating your consent/dissent with respect to each item, this will be treated as
an indication of consent for each item.

Regarding the video of the General Meeting of Shareholders of the Company
A video of the proceedings of the 94th Annual General Meeting of Shareholders will beavailable on the “About the General Meeting of Shareholders” page of our website.
http://www.asahigroup-holdings.com/ir/shareholders_guide/shareholders_meeting.html(Japanese only)
Date and time that the video will be made available: Noon March 28 (Wednesday), 2018 (JST)(Planned)(2) Voting via Internet
Online voting website: https://www.web54.net
Please input your consent/dissent concerning each item no later than the deadline for exercising
voting rights. For details, please refer to following pages.

<Guide to exercising voting rights via the internet>* The online voting website and Help Desk information are available only in Japanese.
If you intend to exercise your voting rights by online voting, please access the website
noted below from a computer, smartphone or cellular phone and follow the instructions
on the screen.
Online voting website: https://www.web54.net
Deadline for exercising voting rights via the Internet:
No later than 5:30 p.m., March 26 (Monday), 2018 (JST)* If your smartphone or cellular phone is equipped with a barcode reader, you may use thetwo-dimensional code at left in order to access the online voting website. For more detailed
information on that procedure, please refer to the user manual of your smartphone orcellular phone.

4

Accessing Procedures
The following charts display PC screens.

1. Access the online voting website
https://www.web54.net
Click on“次へすすむ”(“NEXT”).

2. Log inEnter the “ voting code ” ( 議 決 権 行 使 コ ー ド )indicated on the voting form and click on “ログイン”(“Log in”).
* Shareholders who have not specified a “password” for themselves
are required to register a new password.

3. Enter the password
Enter the “password” (パスワード) indicated on thevoting form and click on “次へ”(“NEXT”).
* Please note that shareholders who received the Convocation
Notice of the Annual General Meeting of Shareholders for thisfiscal year by e-mail will not find the “password” on their voting
form. Such shareholders are asked to enter the “password” thatthey specified when registering their e-mail addresses.

4. Indicate yourconsent/dissent concerning each item by following the
instructions displayed on the screen.
* If you exercise your voting rights online more than once, only the most recent vote will be counted.

Inquiries for Online Voting
Please contact the following Help Desk for inquiries about online voting.
Sumitomo Mitsui Trust Bank, Limited
Stock Transfer Web Support Phone No.
Toll-free (within Japan): 0120-652-031 (9:00 a.m. to 9:00 p.m.) (JST)To Receive the Notices by E-mailShareholders who wish to receive the convocation notices of Annual General Meetings ofShareholders by e-mail beginning with the next meeting may so register on the e-mail address
registration website noted below. Please note that the site cannot be accessed via cellular phone.
E-mail address registration website: https://www.web5106.net

5REFERENCE MATERIALSFOR GENERAL MEETING OF SHAREHOLDERS
Agenda Items and Reference Information
Item 1: Appropriation of Retained Earnings
The Company proposes the appropriation of retained earnings in the following manner:

Year-end dividends
Under the “Medium-Term Management Policy” formulated in 2016, Asahi Group Holdings, Ltd.
(the “Company”), as a holding company of the Group (the Company and its subsidiaries arecollectively or individually referred to as the “Group” or the “Asahi Group”), has been working
toward the strengthening of “earnings power” by positioning the domestic profit base as thecornerstone of earnings and the overseas business as a growth engine, and has been using thegenerated free cash flows for investing in foundation for growth including M&A deals while
seeking stronger financial conditions. Meanwhile, in terms of shareholder returns, efforts arebeing made to achieve a dividend payout ratio* of 30% (International Financial ReportingStandards (IFRS) basis) by fiscal year 2018.
Based on the aforementioned policy and taking into consideration a variety of factors, including
the Company’s consolidated financial condition and achievement for this fiscal year, the Company
proposes a year-end dividend of ¥45 per share, as follows. Since the Company previously paid out¥30 per share as an interim-period dividend, the annual dividend for this fiscal year will amount to¥75 per share, which is an increase of ¥21 per share from the previous fiscal year.
*

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

(1) Type of dividend asset
Cash(2) Allocation of dividend assets to shareholders and total amount of allocation¥45 per share of common stock

Total amount of payout: ¥20,615,584,185(3) Effective date of dividends of Retained Earnings
March 28, 2018

6

Item 2: Reduction in Amount of Legal Capital Surplus
To secure agility and flexibility for future capital policies, the Company proposes to make a
reduction in amount of legal capital surplus in accordance with the provisions of the Paragraph
1, Article 448 of the Companies Act.

1. Content of the reduction in amount of legal capital surplus
The Company proposes to reduce the legal capital surplus of ¥130,292,423,460 by¥80,000,000,000 and to allocate the full amount of the legal capital surplus reduction toother capital surplus. The total amount of the legal capital surplus after the reduction willbe ¥50,292,423,460.

2. Effective date of reduction in amount of legal capital surplus
May 31, 2018

7

Item 3: Election of ten (10) Directors
At the conclusion of this Annual General Meeting of Shareholders, the terms of office of all ten(10) Directors will expire. The Company therefore asks the shareholders to elect ten (10)Directors.
The candidates for the position of Director are as follows.

Candidate
NumberPosition

1

Naoki Izumiya (69)
• Reappointment

Chairman and
Representative
Director
CEO

Overall Management

13/13

2

Akiyoshi Koji (66)
• Reappointment

President andRepresentative
Director
COO

Overall Management

13/13

Katsutoshi Takahashi (63)
• Reappointment

Senior Managing
Director andSenior Managing
Corporate Officer

Procurement
Production
Logistics

13/13

3

4

Yoshihide Okuda (62)• Reappointment

Responsibilities

Attended
Board ofDirectors
meetings

Name (Age)Senior Managing
Director andSenior Managing
Corporate Officer

Soft Drinks Business
Audit
General & Legal Affairs Management
Human Resources
Information Technology

13/13

Alcoholic Beverages Business

5

Noboru Kagami (59)
• Reappointment

Director andCorporate Officer

Corporate Social Responsibility
Research & Development
Quality Assurance
Foods Business

8

13/13

Candidate
Number6

Name (Age)Kenji Hamada (54)
• Reappointment

Position

Responsibilities

Director andCorporate Officer(CFO)

Corporate Strategy
Public Relations
Investor Relations
Finance
International Non-Alcohol Beverages
Business

Attended
Board ofDirectors
meetings

13/13

Southeast Asia Beverages BusinessDirector andCorporate Officer

Business Development
International Non-Alcohol Beverages
Business

7

Atsushi Katsuki (58)
• Reappointment

8

Naoki Tanaka (72)
• Reappointment• Outside• Independent

Outside Director

—

12/13

9

Tatsuro Kosaka (65)
• Reappointment• Outside• Independent

Outside Director

—

13/13

10

Yasushi Shingai (62)
• New candidate• Outside• Independent

—

—

10/10

Oceania Business—Notes:
1.
The age, position and responsibilities are as of this Annual General Meeting of Shareholders.
2.
Attended Board of Directors meetings is the number of times the Director attended Board of Directors meetings held
in FY2017.
3.
As candidate for Director Atsushi Katsuki was newly elected at the 93rd Annual General Meeting of Shareholders heldon March 28, 2017, the above number of Board of Directors meetings held that he could attend is different from other
Directors.
Reappointment: candidate for reappointment
New candidate: candidate for new appointment
Outside: candidate for Outside Director

Independent: candidate for independent director/auditor

9Candidate Number

Name

Note to Appointment

1

Naoki Izumiya

Reappointment

Date of Birth (Age)Owned Shares of the Company
Tenure (at the conclusion of this Annual
General Meeting of Shareholders)
Attended BOD* meetings (FY2017)

August 9, 1948 (69 years old)
51,800 shares
15 years
13/13

Reasons for recommending Naoki Izumiya as a candidate for Director
Naoki Izumiya has a track record encompassing his experience in exercising strong leadership geared toachieving objectives of the medium-term management plan, since being appointed as President andRepresentative Director of the Company in March 2010. Since being appointed as the Company’s Chairman
and Representative Director in March 2016, he has led the efforts to enhance the Group’s corporate value as
the CEO, and fulfills his duties as a Director.
Accordingly, we deem that he possesses capabilities appropriate for the Company’s aims to seek sustained
corporate value enhancement while promoting global management of operations and thus we recommend his
reappointment as a Director.
Position and Responsibilities
Position: Chairman and Representative Director, CEO
Responsibilities: Overall Management
Career Summary
Apr. 1972 Joined the Company
Mar. 2000 Corporate Officer, Senior General Manager of Group Management Strategy Headquarters
Oct. 2000 Corporate Officer, Senior General Manager of Strategy Planning Headquarters
Sep. 2001 Corporate Officer, Deputy General Manager of Tokyo Metropolitan Headquarters, General
Manager of Tokyo BranchMar. 2003 Director
Mar. 2004 Managing Director
Mar. 2006 Managing Director, Managing Corporate Officer, Senior General Manager of Sales &Marketing Headquarters for Alcoholic Beverages
Mar. 2009 Senior Managing Director, Senior Managing Corporate Officer
Mar. 2010 President and Representative Director
Mar. 2014 President and Representative Director, CEO
Mar. 2016 Chairman and Representative Director, CEO(to the present)
Candidate’s special interests in the Company
There are no special interests between Naoki Izumiya and the Company.
*BOD stands for Board of Directors.

10Candidate Number

Name

Note to Appointment

2

Akiyoshi Koji

Reappointment

Date of Birth (Age)Owned Shares of the Company
Tenure (at the conclusion of this Annual
General Meeting of Shareholders)November 8, 1951 (66 years old)
15,700 shares

Attended BOD meetings (FY2017)11 years
13/13

Reasons for recommending Akiyoshi Koji as a candidate for Director
Akiyoshi Koji has a track record that includes strengthening the alcoholic beverages business andcontributing to improved profitability as President and Representative Director of Asahi Breweries, Ltd.
Since being appointed as the President and Representative Director of the Company in March 2016,
Akiyoshi Koji has been fulfilling his duties as a Director, which has included him exercising strong
leadership and his efforts as COO to enhance the Group’s corporate value.
Accordingly, we deem that he possesses capabilities appropriate for the Company’s aims to seek sustained
corporate value enhancement while promoting global management of operations and thus we recommend his
reappointment as a Director.
Position and Responsibilities
Position: President and Representative Director, COO
Responsibilities: Overall Management
Career Summary
Apr. 1975 Joined the Company
Sep. 2001 Corporate Officer
Mar. 2003 Managing Director, Senior General Manager of Planning Division of Asahi Soft Drinks Co.,
Ltd.
Mar. 2006 Senior Managing Director, Senior General Manager of Planning Division of Asahi Soft Drinks
Co., Ltd.
Mar. 2007 Managing Director, Managing Corporate Officer of the Company
Jul. 2011 Director of the Company
President and Representative Director of Asahi Breweries, Ltd.
Mar. 2016 President and Representative Director, COO of the Company(to the present)
Candidate’s special interests in the Company
There are no special interests between Akiyoshi Koji and the Company.

11

Candidate Number

Name

Note to Appointment

3

Katsutoshi Takahashi

Reappointment

Date of Birth (Age)
September 24, 1954 (63 years old)
Owned Shares of the Company
6,000 shares
Tenure (at the conclusion of this Annual
5 years
General Meeting of Shareholders)
Attended BOD meetings (FY2017)

13/13

Reasons for recommending Katsutoshi Takahashi as a candidate for Director
Katsutoshi Takahashi fulfills his duties as a Director on the basis of a track record encompassing his
experience in advancing initiatives to improve quality and maximize the effect of capital investment in theoverall supply chain thorough management of procurement, production, and logistics, since being
appointed as one of the Company’s Directors.
Accordingly, we deem that he possesses capabilities appropriate for the Company’s aims to seek sustained
corporate value enhancement while promoting global management of operations and thus we recommend
his reappointment as a Director.
Position and Responsibilities
Position: Senior Managing Director and Senior Managing Corporate Officer
Responsibilities: Procurement, Production, Logistics
Soft Drinks Business
Career Summary
Apr. 1977 Joined Yoshida Kogyo K.K. (current YKK Corporation)
May 1991 Joined the Company
Mar. 2008 Corporate Officer, Senior Deputy General Manager of Production Headquarters, General
Manager of Production Technology Department
Jul. 2011
Corporate Officer, Senior Deputy General Manager of Research & Development-Production
Headquarters, General Manager of Production Strategy Department of Asahi Breweries, Ltd.
Mar. 2012 Corporate Officer, General Manager of the Production Section of the Company
Corporate Officer, Senior Deputy General Manager of Research & Development-Production
Headquarters, General Manager of Production Strategy Department of Asahi Breweries, Ltd.
Sep. 2012 Corporate Officer, General Manager of the Production Section of the Company
Corporate Officer, Senior Deputy General Manager of Research & Development-Production
Headquarters of Asahi Breweries, Ltd.
Mar. 2013 Director, Corporate Officer of the Company
Mar. 2015 Managing Director, Managing Corporate Officer of the Company
Mar. 2017 Senior Managing Director, Senior Managing Corporate Officer of the Company(to the present)
Candidate’s special interests in the Company
There are no special interests between Katsutoshi Takahashi and the Company.

12

Candidate Number

Name

Note to Appointment

4

Yoshihide Okuda

Reappointment

Date of Birth (Age)Owned Shares of the Company
Tenure (at the conclusion of this Annual
General Meeting of Shareholders)January 3, 1956 (62 years old)
6,100 shares

Attended BOD meetings (FY2017)

5 years
13/13

Reasons for recommending Yoshihide Okuda as a candidate for Director
Yoshihide Okuda fulfills his duties as a Director on the basis of a track record encompassing his
experience in promoting transformative initiatives involving capital policy serving as CFO and initiatives
to strengthen corporate governance, since being appointed as one of the Company’s Directors.
Accordingly, we deem that he possesses capabilities appropriate for the Company’s aims to seek sustained
corporate value enhancement while promoting global management of operations and thus we recommend
his reappointment as a Director.
Position and Responsibilities
Position: Senior Managing Director and Senior Managing Corporate Officer
Responsibilities: Audit, General & Legal Affairs Management, Human Resources, Information Technology
Alcoholic Beverages Business
Career Summary
Apr. 1978 Joined Konishiroku Photo Industry Co., Ltd. (current Konica Minolta, Inc.)
Sep. 1988 Joined the Company
Mar. 2010 Corporate Officer, General Manager of Finance Department
Mar. 2011 Corporate Officer, General Manager of Finance Department of the Company

Jul. 2011
Sep. 2012

Mar. 2013
Mar. 2015
Mar. 2017

Senior Managing Director of Asahi Management Services Co., Ltd. (current Asahi
Professional Management Co., Ltd)
Corporate Officer, General Manager of Finance Section of the Company
Senior Managing Director of Asahi Management Services Co., Ltd.
Corporate Officer in charge of promoting efficiency (administrative sections overall) of theCompany
Senior Managing Director of Asahi Professional Management Co., Ltd.
Director, Corporate Officer of the Company
President and Representative Director of Asahi Professional Management Co., Ltd.
Managing Director, Managing Corporate Officer of the Company
President and Representative Director of Asahi Professional Management Co., Ltd.
Senior Managing Director, Senior Managing Corporate Officer of the Company(to the present)

Candidate’s special interests in the Company
There are no special interests between Yoshihide Okuda and the Company.

13

Candidate Number

Name

Note to Appointment

5

Noboru Kagami

Reappointment

Date of Birth (Age)Owned Shares of the Company
Tenure (at the conclusion of this Annual
General Meeting of Shareholders)November 29, 1958 (59 years old)
3,998 shares

Attended BOD meetings (FY2017)

2 years
13/13

Reasons for recommending Noboru Kagami as a candidate for Director
Noboru Kagami fulfills his duties as a Director on the basis of a track record encompassing his experiencein managing CSR, R&D, and quality assurance, and promoting group management strategies inaccordance with the Medium-Term Management Policy, since being appointed as one of the Company’s
Directors.
Accordingly, we deem that he possesses capabilities appropriate for the Company’s aims to seek sustained
corporate value enhancement while promoting global management of operations and thus we recommend
his reappointment as a Director.
Position and Responsibilities
Position: Director and Corporate Officer
Responsibilities: Corporate Social Responsibility, Research & Development, Quality Assurance
Foods Business
Career Summary
Apr. 1982 Joined the Company
Sep. 2012 Corporate Officer, General Manager of Fukushima Brewery of Asahi Breweries, Ltd.
Jan. 2013 Corporate Officer, General Manager of Hakata Brewery of Asahi Breweries, Ltd.
Mar. 2016 Director, Corporate Officer of the Company(to the present)
Candidate’s special interests in the Company
There are no special interests between Noboru Kagami and the Company.

14

Candidate Number

Name

Note to Appointment

6

Kenji Hamada

Reappointment

Date of Birth (Age)Owned Shares of the Company
Tenure (at the conclusion of this Annual
General Meeting of Shareholders)January 7, 1964 (54 years old)
2,550 shares

Attended BOD meetings (FY2017)

2 years
13/13

Reasons for recommending Kenji Hamada as a candidate for Director
Kenji Hamada fulfills his duties as a Director on the basis of a track record encompassing his experiencein managing corporate strategy, public relations, investor relations, and international non-alcohol
beverages business, and promoting initiatives to improve asset and capital efficiency as CFO, since being
appointed as one of the Company’s Directors.
Accordingly, we deem that he possesses capabilities appropriate for the Company’s aims to seek
sustained corporate value enhancement while promoting global management of operations and thus werecommend his reappointment as a Director.
Position and Responsibilities
Position: Director and Corporate Officer (CFO)
Responsibilities: Corporate Strategy, Public Relations, Investor Relations, Finance, International NonAlcohol Beverages Business
Southeast Asia Beverages Business
Career Summary
Apr. 1986 Joined the Company
Sep. 2012 Senior Officer, General Manager of Corporate Strategy Section of the Company
Mar. 2014 Corporate Officer, General Manager of Corporate Strategy Section of the Company
Mar. 2016 Director, Corporate Officer of the Company(to the present)
Candidate’s special interests in the Company
There are no special interests between Kenji Hamada and the Company.

15

Candidate Number

Name

Note to Appointment

7

Atsushi Katsuki

Reappointment

Date of Birth (Age)Owned Shares of the Company
Tenure (at the conclusion of this Annual
General Meeting of Shareholders)March 17, 1960 (58 years old)
2,598 shares

Attended BOD meetings (FY2017)

1 year10/10

Reasons for recommending Atsushi Katsuki as a candidate for Director
Atsushi Katsuki, having primarily engaged in operations involving corporate alliances and international
business, fulfills his duties as a Director on the basis of a track record encompassing his experience inmanaging business development and international non-alcohol beverages business, and establishingfoundations for the steady growth of the Oceania business, since being appointed as one of theCompany’s Directors.
Accordingly, we deem that he possesses capabilities appropriate for the Company’s aims to seek sustained
corporate value enhancement while promoting global management of operations and thus we recommend
his reappointment as a Director.
Position and Responsibilities
Position: Director and Corporate Officer
Responsibilities: Business Development, International Non-Alcohol Beverages Business
Oceania Business
Career Summary
Apr. 1984 Joined The Nikka Whisky Distilling Co., Ltd
Sep. 2002 Transferred to the Company
Oct. 2011 Managing Director of Asahi Holdings (Australia) Pty Ltd
Apr. 2014 Director, Group CEO of Asahi Holdings (Australia) Pty Ltd
Mar. 2016 Corporate Officer of the Company,
Director, Group CEO of Asahi Holdings (Australia) Pty Ltd
Mar. 2017 Director, Corporate Officer of the Company(to the present)
Candidate’s special interests in the Company
There are no special interests between Atsushi Katsuki and the Company.

16

Candidate Number

Name

8

Naoki Tanaka

Date of Birth (Age)Note to Appointment
Reappointment
OutsideIndependent

September 1, 1945 (72 years old)

Owned Shares of the Company
Tenure (at the conclusion of this Annual
General Meeting of Shareholders)
Attended BOD meetings (FY2017)― shares
9 years
12/13

Reasons for recommending Naoki Tanaka as a candidate for Outside Director
Naoki Tanaka fulfills his duties as an Outside Director of the Company on the basis of his abundant
experience as a member of government councils and his broad knowledge as a specialist deeply versed indomestic and international economic policy.
Accordingly, we deem that he possesses capabilities appropriate for the Company’s aims to seek sustained
corporate value enhancement while promoting global management of operations and thus we recommend
his reappointment as an Outside Director.
Position
Outside Director
Career Summary
Jan. 1971 Senior Fellow of Kokumin Keizai Research InstituteApr. 1997 President of the 21st Century Public Policy InstituteApr. 2007 President of Center for International Public Policy Studies(to the present)
Mar. 2009 Director of the Company(to the present)
Significant Concurrent Positions
President of Center for International Public Policy Studies
Views on independence
The Group maintains transactional relationships with neither Naoki Tanaka nor entities where heconcurrently serves, and based on the “Criteria for independence of Outside Directors and Outside Audit& Supervisory Board Members” which have been established by the Company as a means of objectively
assessing independence thereof, the Company has deemed that he maintains sufficient independence withno potential for conflict of interests with general shareholders. Moreover, as Naoki Tanaka meets therequirements for independent director/auditor as defined by the Tokyo Stock Exchange, we haveregistered him as an independent director/auditor as stipulated by the said Exchange.
Candidate’s special interests in the Company
There are no special interests between Naoki Tanaka and the Company.
Regarding agreements limiting the liability
To enable him to contribute fully in his role as an Outside Director, the Company has entered into anagreement with Naoki Tanaka that limits his liability for damages as prescribed in Paragraph 1, Article
423 of the Companies Act. Under the terms of this agreement, his liabilities are limited to ¥20 million or
to the minimum limited amount stipulated by applicable laws and regulations, whichever is higher. If hiselection is approved, the current agreement will be extended.

17Candidate Number

Name

Note to Appointment
Reappointment
Outside9
Tatsuro Kosaka
Independent
Date of Birth (Age)January 18, 1953 (65 years old)
Owned Shares of the Company― shares
Tenure (at the conclusion of this Annual
2 years
General Meeting of Shareholders)
Attended BOD meetings (FY2017)
13/13
Reasons for recommending Tatsuro Kosaka as a candidate for Outside Director
Tatsuro Kosaka fulfills his duties as an Outside Director of the Company on the basis of his abundant
experience and broad knowledge as a corporate manager gained primarily while serving as the Chief
Operating Officer of a global corporation and from his involvement in various business reforms including
the medium-term management plan.
Accordingly, we deem that he possesses capabilities appropriate for the Company’s aims to seek sustained
corporate value enhancement while promoting global management of operations and thus we recommend
his reappointment as an Outside Director.
Position
Outside Director
Career Summary
Apr. 1976 Joined Chugai Pharmaceutical Co., Ltd.
Oct. 2002 Vice President, General Manager of Corporate Planning Dept. of Chugai PharmaceuticalCo., Ltd.
Oct. 2004 Senior Vice President, General Manager of Corporate Planning Dept. of Chugai
Pharmaceutical Co., Ltd.
Mar. 2005 Senior Vice President, Deputy Managing Director of Sales & Marketing Group of Chugai
Pharmaceutical Co., Ltd.
Jul. 2005 Senior Vice President, Head of Strategic & Marketing Unit of Chugai Pharmaceutical Co.,
Ltd.
Mar. 2008 Senior Vice President, Head of Lifecycle Management & Marketing Unit of Chugai
Pharmaceutical Co., Ltd.
Mar. 2010 Director, Executive Vice President of Chugai Pharmaceutical Co., Ltd.
Mar. 2012 Representative Director, President of Chugai Pharmaceutical Co., Ltd.
(to the present)
Mar. 2016 Director of the Company(to the present)
Significant Concurrent Positions
Representative Director, President of Chugai Pharmaceutical Co., Ltd.
Views on independence
The Group maintains transactional relationships with neither Tatsuro Kosaka nor entities where heconcurrently serves, and based on the “Criteria for independence of Outside Directors and Outside Audit& Supervisory Board Members” which have been established by the Company as a means of objectively
assessing independence thereof, the Company has deemed that he maintains sufficient independence withno potential for conflict of interests with general shareholders. Moreover, as Tatsuro Kosaka meets therequirements for independent director/auditor as defined by the Tokyo Stock Exchange, we haveregistered him as an independent director/auditor as stipulated by the said Exchange.
Candidate’s special interests in the Company
There are no special interests between Tatsuro Kosaka and the Company.
Regarding agreements limiting the liability
To enable him to contribute fully in his role as an Outside Director, the Company has entered into anagreement with Tatsuro Kosaka that limits his liability for damages as prescribed in Paragraph 1, Article
423 of the Companies Act. Under the terms of this agreement, his liabilities are limited to ¥20 million or
to the minimum limited amount stipulated by applicable laws and regulations, whichever is higher. If hiselection is approved, the current agreement will be extended.
18Candidate Number

Name

10

Yasushi Shingai

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

January 11, 1956 (62 years old)

Owned Shares of the Company― shares

Reasons for recommending Yasushi Shingai as a candidate for Outside Director
Yasushi Shingai served as the Chief Financial Officer of a global corporation, and has abundant
experience and broad knowledge as a corporate manager in Japan and overseas that include directing
acquisitions of and integrations with foreign companies.
Accordingly, we deem that he possesses capabilities appropriate for the Company’s aims to seek sustained
corporate value enhancement while promoting global management of operations and thus we recommend
his appointment as an Outside Director.
Career Summary
Apr. 1980 Joined Japan Tobacco and Salt Public Corporation (current Japan Tobacco Inc.)
Jul. 2001 Vice President of Financial Planning Division of Japan Tobacco Inc.
Jun. 2004 Senior Vice President, Head of Finance Group of Japan Tobacco Inc.
Jul. 2004 Senior Vice President, Chief Financial Officer of Japan Tobacco Inc.
Jun. 2005 Member of the Board, Senior Vice President, and Chief Financial Officer of Japan Tobacco
Inc.
Jun. 2006 Member of the Board of Japan Tobacco Inc.,
Executive Vice President of JT International S.A.
Jun. 2011 Executive Deputy President and Representative Director of Japan Tobacco Inc.
Jan. 2018 Member of the Board of Japan Tobacco Inc.
(to the present)
Significant Concurrent Positions
Member of the Board of Japan Tobacco Inc., External Board Director of Recruit Holdings Co., Ltd.
Views on independence
Although the Group maintains transactional relationships with each group of Japan Tobacco Inc. and
Recruit Holdings Co., Ltd., where Yasushi Shingai concurrently serves, the amounts involved in suchtransactions account for less than 1% of the consolidated revenue (or consolidated net sales) of theCompany and respective companies. As such, based on the “Criteria for independence of Outside
Directors and Outside Audit & Supervisory Board Members” which have been established by theCompany as a means of objectively assessing independence thereof, the Company has deemed that hemaintains sufficient independence with no potential for conflict of interests with general shareholders.
Moreover, as Yasushi Shingai meets the requirements for independent director/auditor as defined by the
Tokyo Stock Exchange, we have registered him as an independent director/auditor as stipulated by thesaid Exchange.
Candidate’s special interests in the Company
There are no special interests between Yasushi Shingai and the Company.
Regarding agreements limiting the liability
If election of Yasushi Shingai is approved, the Company plans to newly enter into an agreement with himthat limits his liability for damages as prescribed in Paragraph 1, Article 423 of the Companies Act inorder to enable him to contribute fully in his role as an Outside Director. Under the terms of thisagreement, such liability will be limited to ¥20 million or to the minimum limited amount stipulated byapplicable laws and regulations, whichever is higher.
Note: Yasushi Shingai currently serves as Member of the Board of Japan Tobacco Inc., but plans to retire from that positionat the conclusion of the Ordinary General Meeting of Shareholders of Japan Tobacco Inc. to be held on March 27,
2018.

19

Item 4: Election of one (1) Audit & Supervisory Board Member
At the conclusion of this Annual General Meeting of Shareholders, the term of office of Audit &Supervisory Board Member Katsutoshi Saito will expire. The Company therefore asks theshareholders to elect one (1) Audit & Supervisory Board Member.
The candidate for the position of Audit & Supervisory Board Member is as follows.
This proposal is submitted with the prior consent of the Audit & Supervisory Board.
Name
Note to Appointment
Reappointment
OutsideKatsutoshi Saito
Independent
Date of Birth (Age)
December 6, 1943 (74 years old)
Owned Shares of the Company― shares
Tenure (at the conclusion of this Annual
4 years
General Meeting of Shareholders)
Attended BOD meetings (FY2017)
13/13
Attended ASB* meetings (FY2017)
7/7
Reasons for recommending Katsutoshi Saito as a candidate for Outside Audit & Supervisory Board Member
Katsutoshi Saito, having long served as an executive of a global corporation, fulfills his duties as an
Outside Audit & Supervisory Board Member of the Company with his abundant experience and broad
knowledge as a corporate manager.
Accordingly, we deem that he possesses capabilities appropriate for the Company’s aims to seek
sustained corporate value enhancement while promoting global management of operations and thus werecommend his reappointment as an Outside Audit & Supervisory Board Member.
Position
Outside Audit & Supervisory Board Member
Career Summary
Apr. 1967 Joined The Dai-ichi Mutual Life Insurance Company (current Dai-ichi Life Holdings, Inc.)
Jul. 1994 Director of The Dai-ichi Mutual Life Insurance Company
Apr. 1997 Managing Director of The Dai-ichi Mutual Life Insurance Company
Apr. 2001 Senior Managing Director of The Dai-ichi Mutual Life Insurance Company
Apr. 2003 Senior Managing Director and Representative Director of The Dai-ichi Mutual Life
Insurance Company
Jul. 2004 President and Representative Director of The Dai-ichi Mutual Life Insurance Company
Apr. 2010 Deputy Chairman and Representative Director of The Dai-ichi Life Insurance Company,
LimitedJun. 2011 Chairman and Representative Director of The Dai-ichi Life Insurance Company, Limited
Mar. 2014 Audit & Supervisory Board Member of the Company(to the present)
Apr. 2017 Senior Advisor of The Dai-ichi Life Insurance Company, Limited(to the present)
Significant Concurrent Positions
Advisor of The Dai-ichi Life Insurance Company, Limited., Outside Director of Imperial Hotel, Ltd.,
Outside Corporate Auditor of Tokyu Corporation*ASB stands for Audit & Supervisory Board.

20Views on independence
Although the Group maintains transactional relationships with each group of The Dai-ichi Life Insurance
Company, Limited, Imperial Hotel, Ltd. and Tokyu Corporation, where Katsutoshi Saito concurrently
serves, the amounts involved in such transactions account for less than 1% of the consolidated revenue(or consolidated net sales) of the Company and the respective companies. As such, based on the “Criteria
for independence of Outside Directors and Outside Audit & Supervisory Board Members” which havebeen established by the Company as a means of objectively assessing independence thereof, the Company
has deemed that he maintains sufficient independence with no potential for conflict of interests withgeneral shareholders. Moreover, as Katsutoshi Saito meets the requirements for independent
director/auditor as defined by the Tokyo Stock Exchange, we have registered him as an independent
director/auditor as stipulated by the said Exchange.
Candidate’s special interests in the Company
There are no special interests between Katsutoshi Saito and the Company.
Regarding agreements limiting the liability
To enable him to contribute fully in his role as an Outside Audit & Supervisory Board Member, theCompany has entered into an agreement with Katsutoshi Saito that limits his liability for damages asprescribed in Paragraph 1, Article 423 of the Companies Act. Under the terms of this agreement, his
liabilities are limited to ¥20 million or to the minimum limited amount stipulated by applicable laws andregulations, whichever is higher. If his election is approved, the current agreement will be extended.
Note: The age and position are as of this Annual General Meeting of Shareholders.

21[Reference] Criteria for independence of Outside Directors and Outside Audit &Supervisory Board Members
The Company has established standards as set forth below for objectively assessing theindependence of its Outside Directors and Outside Audit & Supervisory Board Members(herein this section the “Outside Directors/Audit & Supervisory Board Members”) andaccordingly deems that an Outside Director/Audit & Supervisory Board Member lacks
sufficient independence for the Company if any of the following apply, such that he or she is:
1. A party who serves as an executive*1 of the Company or a subsidiary of the Company(herein this section collectively referred to as the “Group”) or has served as an executive of
the Group in the past;
2. A party for whom the Group is a major business partner*2 (or if the business partner is anincorporated entity, an executive thereof);
3. A party who is a major business partner of the Group*3 (or if the business partner is anincorporated entity, an executive thereof);
4. A consultant, certified public accountant or other accounting professional, or an attorney atlaw or other legal professional who has been paid substantial amounts of money or otherfinancial benefits*4 other than Directors’ and Audit & Supervisory Board Members’
remuneration paid by the Group (or if the party receiving such financial benefits is anincorporated entity, association or other organization, then persons belonging to suchorganization);
5. A certified public accountant who belongs to the auditing firm which serves as the
Independent Accounting Auditor of the Group;
6. A major shareholder*5 of the Group (or if the major shareholder is an incorporated entity,
an executive thereof);
7. An executive of an incorporated entity that is a major shareholder of the Group;
8. An executive of a company which has a relationship involving cross-assumption of officeof Outside Directors/Audit & Supervisory Board Members*6;
9. A party who receives substantial donations*7 from the Group (or if the party receiving such
donations is an incorporated entity, association or other organization, then an executive
thereof);
10. A close relative*9 of a party who falls under any of the above items from 1 to 9 (limited toimportant persons*8, with the exception of item 1);
11. A party who has fallen under any of the above items from 2 to 10 during the past five (5)years;
12. A party who has exceeded the tenure of Outside Directors/Audit & Supervisory Board
Members stipulated by the Company*10; or
13. Notwithstanding the provisions of the respective items above, a party with respect towhom there are special grounds for deeming there to be potential for conflict of interests
with general shareholders.
*1. “Executive” refers to an executive as defined in Item 6, Paragraph 3, Article 2 of the Ordinance for
Enforcement of the Companies Act, and includes both executive directors and employees, but does not include
Audit & Supervisory Board Members.
*2. “Party for whom the Group is a major business partner” refers to a party whose transactions in the most recent
fiscal year amount to 2% or more of the consolidated net sales of the business partner’s group.
*3. “Party who is a major business partner of the Group” refers either to a party whose transactions in the mostrecent fiscal year amount to 2% or more of the Company’s consolidated revenue, or a party who loans to theGroup an amount equivalent to 2% or more of the Company’s consolidated total assets as of the end of themost recent fiscal year.
*4. “Substantial amounts of money or other financial benefits” refers to money and other financial benefits
amounting to 10 million yen or more annually, excluding Directors’ and Audit & Supervisory Board Members’
remuneration, for the most recent fiscal year (if such financial benefits are obtained by an incorporated entity,
association or other organization, it refers to money or other financial benefits amounting to 2% or more of22

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

End

23

(Attached Materials)
BUSINESS REPORT
From January 1, 2017 to December 31, 2017

1. Overview of Operations of the Asahi Group(1) Business Progress and Results
During this fiscal year, driven by solid economic growth in the US and Europe with increases in
the number of employees and consumer spending in addition to signs of a pick-up in Chinese andother Asian economies, an overall mild recovery in the global economy continued. The Japanese
economy was on a modest recovery track with an uptick in consumer spending on the back of the
improved employment/income environment, in addition to improved corporate earnings.
Under these circumstances, the Asahi Group worked toward the further development of ongoing
efforts for the “Management for Corporate Value Enhancement” under the “Medium-Term
Management Policy” established in 2016 by setting three key priorities: i) strengthening of earnings
power, ii) asset and capital efficiency improvement, and iii) reinforcement of ESG initiatives.
Particularly for “strengthening of earnings power,” the Group worked in Japan to position a
profit base as the cornerstone of earnings with high value addition and differentiation as key areas offocus while in overseas markets promoting the creation of synergies utilizing leading premium
brands and extensive sales networks centered on its operations in Europe.
As a result, the Asahi Group posted revenue of ¥2,084,877 million, a year-on-year increase of
22.1%. Core operating profit* increased by 32.2% year-on-year to ¥196,368 million, and operating
profit rose by 33.8% to ¥183,192 million. Profit attributable to owners of parent totaled ¥141,003
million, an increase of 58.0% year-on-year compared with the previous year.
* Core operating profit is the Company’s original indicator of profit, which measures the ordinary business earnings
calculated by deducting cost of sales and selling, general and administrative expenses from revenue.

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

24

■ Financial and Profit/Loss Indicators of the Asahi Group
91st term
FY201492nd term
FY201593rd term
FY2016

Japanese GAAP

94th term
FY2017(current year)

IFRS(million yen)

Net sales/ Revenue

1,785,478

1,857,418

1,689,527

1,706,901

2,084,877––

140,691

148,486

196,368

128,305

135,119

96,626

136,889

183,192

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

133,168

145,946––

EBITDA*2
Earnings per share/
Basic earnings per share*3
Total assets/
Total assets*4
Net assets/
Total equity
Net assets per share/
Equity attributable to owners ofparent per share*5
ROE(Return On Equity/
Profit ratio to equity attributableto owners of parent)
Adjusted profit attributable toowners of parent*6(million yen)Core operating profit*1
Operating income/Operating profit(million yen)(million yen)–(million yen)

69,11876,42775,77089,221141,003

7.2

7.3

5.7

8.0

8.8

192,308

197,993

197,287

205,803285,394148.92

166.25164.82194.75307.78

1,936,609

1,901,554

1,804,673

2,094,332

3,346,822

896,510

891,829803,682

846,105

1,152,748(%)(million yen)

Adjusted earnings per share*7
Adjusted ROE (Adjusted profit
ratio to equity attributable toowners of parent)*8(yen)(million yen)(million yen)

(yen)

1,904.64

1,916.69

1,723.97

1,825.57

2,499.62
(%)

8.1

8.8

9.7

11.0

14.2
(million yen)

–

–

–

89,221

120,133–––

194.75262.23

–

–

–

11.2

13.7

(yen)
(%)

Note: Items with “ / ” indicate “Japanese GAAP / IFRS.”*1. Core operating profit is the Company’s original indicator of profit, which measures the ordinary businessearnings calculated by deducting cost of sales and selling, general and administrative expenses from revenue.
*2. EBITDA is equal to the sum of operating income before amortization of goodwill, etc., and depreciation underJapanese GAAP, and the sum of core operating profit and amortization and depreciation on the IFRS basis.
*3. Earnings per share/ Basic earnings per share is calculated based on the average total number of shares
outstanding during the term. The total number of shares outstanding is exclusive of treasury shares.
*4. As acquisition cost allocation was revised following the finalization of the provisional accounting treatment
relating to a business combination carried out in the 93rd term (FY2016), this has been reflected in total assetsof the 93rd term (FY2016).
*5. Net assets per share/Equity attributable to owners of parent per share is calculated based on the total number ofshares outstanding at the end of the fiscal year. The total number of shares outstanding is exclusive of treasury
shares.
*6. Adjusted profit attributable to owners of parent is profit attributable to owners of parent less a one-time profit
or loss on the restructuring of business portfolio (net of tax expenses), etc.
*7. Adjusted earnings per share is calculated based on adjusted profit attributable to owners of parent.
*8. Adjusted ROE is calculated based on adjusted profit attributable to owners of parent divided by total equity
attributable to owners of parent (net of exchange differences on translation of foreign operations, and changes
of fair value of investment in financial assets measured at fair value through other comprehensive income).

25

■ Overview by Business Segment for 94th Term
Asahi Group Revenue by Segment
93rd term
FY2016(million yen)

94th term
FY2017(current year)(million yen)

Change inamount(million yen)

Change inpercentage(%)

Alcoholic Beverages

976,649

968,858(7,790)(0.8)

Soft Drinks

363,905

374,517

10,611

2.9

Foods

110,824

113,785

2,961

2.7

International Operations

250,316

621,112370,795

148.1

Other Businesses

102,279

106,141

3,861

3.8

Adjustment*(97,073)(99,537)(2,464)–

1,706,901

2,084,877

377,975

22.1

Segment

Total* The adjustment is the elimination amount of intersegment revenue and revenue of the corporate portion not
attributable to any segment.

26

Alcoholic Beverages Segment

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

In the alcoholic beverages segment, the Group made efforts to create new value and new
demand through innovation, and to enhance the cost competitiveness, under the slogan of “Aim to be
the leading company in alcohol beverages in Japan by nurturing No. 1 brands and structuralreforms.”
In the beer-type beverages sector, we worked on enhancing the brand value of “Asahi Super
Dry” mainly by launching “Asahi Super Dry EXTRA HARD” and “Asahi Super Dry SHUNREIKARAKUCHI,” premium limited brewed products to mark the 30th anniversary of the launch of“Asahi Super Dry.” For the new genre “Clear Asahi” brand, we launched “Clear Asahi Zeitaku
ZERO,” the product rich in flavor from barley despite being carbohydrate-free*2, and expanded
limited-time products for each season, striving to further strengthen the brand’s market position.
In the sectors of alcoholic beverages other than beer-type beverages, the Group enhanced the
product lineup of “Asahi MOGITATE” and expanded the offering of “WILKINSON HARD” series
with the aim of building brand power for RTD. For whisky and other spirits, we endeavored toenhance brand value of our mainstay brands mainly by actively conducting marketing activities for“Black Nikka” brands.
In the alcohol-taste beverages sector, we worked hard to strengthen brand power of the beertaste beverage “Asahi DRY ZERO” with “improved refreshing aftertaste ideal to accompany anymeal” and launch of consumer campaigns.
As a result of these efforts, despite a stronger-than-previous-year sales of alcoholic beverages
other than beer-type beverages and of alcohol-taste beverages, revenue from the alcoholic beverages
segment decreased by 0.8% from the previous year to ¥968,858 million due to a decrease in sales
volume of beer-type beverages reflecting such factors as unseasonable weather in summer season.
Despite a decline in sales, core operating profit increased by 0.6% year-on-year to ¥121,516
million as a result of the efforts of enhancing efficiency of advertising and sales promotion expenses
as well as reducing costs such as raw materials. (Operating profit stood at ¥113,560 million,
representing a year-on-year increase of 2.1%.)*1. RTD stands for “Ready To Drink,” which refers to a type of beverage sold in a prepared form and ready for
consumption, such as canned chuhai.
*2. In compliance with the nutrition labeling standards, “carbohydrate-free” is labeled when contained carbohydrates
are less than 0.5mg per 100ml.

27Soft Drinks Segment

Main products: Carbonated drinks, Coffee, Tea, Milk-based beverages, Lactic acid drinks,
Mineral water, Fruit drinks

In the soft drinks segment, the Group engaged in establishing solid earnings base through not
only focusing management assets on core brands, and promoting growth by enhancing productcompetitiveness centered on health functionality, but also optimizing production efficiency throughsuch means as improving capacity utilization.
For the mainstay brands, aiming at improving brand value, the Group launched “MITSUYA
Shinshibori” containing clear fruit juice*1 for “MITSUYA” brand, and introduced “Asahi
JUROKUCHA Gotochi Sozai Blend” a blend of local ingredients from seven regions*2 in Japan for“JUROKUCHA” brand, while expanding the product lineup for “WONDA Kiwami” canned coffee
supervised by a well-established café to mark the 20th anniversary of launch of “WONDA” brand.
As for “OISHII-MIZU” brand, we proposed new product value through the leveraging of brandassets mainly by the release of a natural-water sourced sparkling water with added “CALPIS” lactic
acid bacteria named “Asahi OISHII-MIZU Plus <CALPIS> no Nyusankin Sparkling.”
For the field of health function domain, the Group strived to strengthen its market presence withrenewals of “Mamoru Hataraku Nyusankin” and “Todoku Tsuyosano Nyusankin,” and the launch of“KARADA CALPIS,” the Food with Functional Claims with its unique lactic acid bacteria.
Accordingly, revenue from the soft drinks segment increased by 2.9% from the previous fiscal
year to ¥374,517 million due to stronger-than-previous-year sales volume of carbonated drinks andmilk-based beverages, etc.
Core operating profit increased by 18.5% year-on-year to ¥38,321 million as a result of
increased sales and the efforts of reducing manufacturing costs by improving the component ratio of
product categories and size/type of containers and by improving the capacity utilization throughoptimized production structure. (Operating profit stood at ¥44,407 million, representing a year-onyear increase of 35.5%.)*1. Clear fruit juice is a fruit juice without pulp, which is made by resolving and filtrating extracted fruit juice withpulp (turbid fruit juice).
*2. Seven regions: Hokkaido, Tohoku, Kanto and Koshinetsu, Chubu and Hokuriku, Kansai, Chugoku and Shikoku,
and Kyushu and Okinawa.

28

Foods Segment

Main products: Confectionery, Nutritional snacks, Supplements, Quasi-drugs, Baby foods,
Infant formula, Freeze-dried foods

In the foods segment, the Group worked to build a business foundation for sustainable growththrough enhancing product power well ahead of changes in the market and nurturing brands, inaddition to “focusing more on our strengths” and creating synergies by integrated business.
For the tablet-type confectionary “MINTIA,” we strived to strengthen its brand power by thelaunch of “MINTIA EXCARE,” the product offering new value with throat refreshing andmoistening effect, and the renewal of the large-size tablet “MINTIA Breeze.”In the category of dietary supplements, we pursued enhanced brand value by releasing theaffordable pouch-type “Dear-Natura Style” and making the product lineup of the Food with
Functional Claims “Dear-Natura Gold” more extensive.
In the baby foods sector, the Group worked to strengthen its brand power through aggressive
sales promotion activities for “Goo-Goo Kitchen” and “Eiyo Marche.” For senior products, we
worked to improve our presence in the nursing care foods market by newly launching “Balance
Kondate.”In the freeze-dried foods sector, we made efforts for sales expansion by presenting our new
soup brands “The Umami” and “Kyo no Soup,” in addition to enhancing marketing activity for ourmainstay “Itsumono Omisoshiru.”
As a result of the above, the foods segment increased by 2.7% year-on-year to ¥113,785 million,
reflecting strong performances in the core brands.
Core operating profit increased by 13.4% year-on-year to ¥11,626 million as a result of
increased sales and the efforts of streamlining advertising and sales promotion expenses, andreducing manufacturing costs. (Operating profit decreased 4.3% year-on-year to ¥10,893 million.)29

International Operations Segment

Main products: Beer, Low-alcohol beverages, Carbonated drinks, Mineral water, Sport drinks, Tea,
Condensed milk

In the international operations segment, the Group worked hard to build the business foundation,
aiming at becoming a global player with its growth centered on the premium market of beer category,with the completed acquisition of beer businesses in Western, Central and Eastern Europe as well as
improved profitability in existing business through boosting core brands and creating synergies.
In the Europe business segment, we reinforced marketing activities focused on improving thevalue of our mainstay brands in Western Europe by further dissemination of information for the“Peroni” brand and other efforts. Furthermore, initiatives for creating synergy, including theestablishment of manufacturing and sales platforms for “Asahi Super Dry” with our own brewery
and sales networks in Europe, have been promoted. In addition, for the beer businesses in Central
and Eastern Europe acquired in March 2017, we worked to build platforms for continuous businessgrowth in each country, as seen in the proactive sales promotion for core brands of “Pilsner Urquell”
and “Kozel” and the launch of new products in the Czech Republic.
In the Oceania business segment, as to the soft drinks sector, the Group put efforts into further
enhancing its presence in the market through the introduction of “Schweppes” carbonated drink
products with new packaging and initiatives for enlarging shares in the expanding water category.
As to alcoholic beverages sector, the Group strived to create the synergy effect utilizing its brands.
These initiatives included the effort to further enhancing the brand strength of “Asahi Super Dry,”
the introduction of “Peroni” brand to markets, and marketing activities focused on the core lowalcohol beverages.
In the Southeast Asia business segment, the Group extended the product lineup and sales
campaigns for “WONDA” and “CALPIS” in Malaysia, and worked to strengthen the power of“Honey Gold” brand in Myanmar, in an effort to improve its presence in each market mainly by theenhancement of its own brands.
In the China business segment, the Group worked toward increased sales volume of “Asahi
Super Dry” by getting more restaurants and bars to serve draft beer in kegs as well as strengthening
sales activities for convenience stores and through e-commerce.
As a result of the above, the international operations segment posted revenue of ¥621,112
million, increased by 148.1% year-on-year, as the Oceania business has been robust along with
contributions from newly acquired operations in Europe.
Core operating profit increased by 434.0% year-on-year to ¥65,938 million with thecontribution of operations in Europe, despite acquisition-related costs incurred from the acquisitionof beer businesses in Central and Eastern Europe. (Operating profit was ¥34,837 million, an increaseof ¥34,845 million compared with the previous fiscal year.)30

Other Businesses Segment

Main businesses:

Cargo transportation, Production and distribution of health foods and feedstuffs

In the other businesses segment, revenue increased by 3.8% year-on-year to ¥106,141 million
mainly due to expansion of outsourcing in the cargo transportation business and an increase in salesof health foods.
Core operating profit decreased 0.4% year-on-year to ¥1,992 million due to increased sales
promotions related to health foods. (Operating profit decreased 0.2% year-on-year to ¥1,979
million.)31

(2) Status of Capital Expenditures
Consolidated capital expenditures in this year totaled ¥96,265 million, the segment breakdownof which is as follows. A large portion of the capital expenditures represented investments made forthe purpose of enhancing efficiency and production capacity.
Amount of capital expenditure(million yen)

Business segment
Alcoholic Beverages

25,756

Soft Drinks

25,855

Foods

4,752

International Operations

37,169Other Businesses

549

Company-wide (common)

2,182
Total

96,265(3) Financing Activities
The Company financed the capital expenditures detailed in item (2) above and capitalrequirements including those for acquiring beer businesses in Central and Eastern Europe throughloans from financial institutions and the issuance of commercial papers and bonds.
Funds required for companies’ businesses of the Asahi Group are primarily sourced by theCompany.
Overview of issued bonds
Issued bonds
The 9th issue of Unsecured Corporate Bonds(3 years)
The 10th issue of Unsecured Corporate Bonds(5 years)
The 11th issue of Unsecured Corporate Bonds(7 years)
The 12th issue of Unsecured Corporate Bonds(10 years)
Euro denominated senior unsecured bondsdue 2021
Euro denominated senior unsecured bondsdue 2025

Date of issue

Amount issued

June 13, 2017

¥100,000 million

June 13, 2017

¥130,000 million

June 13, 2017

¥20,000 million

June 13, 2017¥30,000 million

September 19, 2017

EUR 600 million

September 19, 2017

EUR 600 million(4) Status of Principal Lenders(As of December 31, 2017)

Outstanding balance(million yen)

LenderSumitomo Mitsui Banking Corporation

156,588

Mizuho Bank, Ltd.

61,194

Sumitomo Mitsui Trust Bank, Limited

50,000

The Norinchukin Bank

50,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

36,70032

(5) Status of Major Establishments and Principal Subsidiaries(As of December 31, 2017)

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

Subsidiaries
Company nameLocation ofhead office

Issued capital(million yen)

Shareholdings(%)

Main operations
Production and marketing of
alcoholic beverages

Asahi Breweries, Ltd.

Sumida-ku,
Tokyo

20,000100.0

Asahi Soft Drinks
Co., Ltd.

Sumida-ku,
Tokyo

11,081

100.0

Asahi Group Foods,
Ltd.

Shibuya-ku,
Tokyo

5,000

100.0

Asahi Europe Ltd

Surrey,the United
Kingdom

290,994

100.0

Overseeing alcoholic beverages
operations in Western Europe

Asahi Breweries
Europe Ltd

Surrey,the United
Kingdom

100.0

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

Victoria,
Australia(AUD 1,806,901 thousand)

100.0

Overseeing soft drinks andalcoholic beverages operations in
Oceania

Asahi Beer (China)
Investment Co., Ltd.

Shanghai,
China(CNY 737,487 thousand)

100.0

Overseeing alcoholic beverages
operations, and marketing of
alcoholic beverages in China

100.0

Contracting of clerical work

Asahi Professional
Sumida-ku,
Management Co., Ltd. Tokyo(EUR 2,431,546 thousand)

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

132,697

9,996

50

Production and marketing of softdrinks
Production and marketing of foods

Notes:
1.
There were 146 consolidated subsidiaries of the Company as of the end of this year, including those listed
above. There were 19 companies accounted for using equity method.
2.
There were no wholly owned specified subsidiaries of the Company as of the end of this year.

(6) Significant Developments such as Corporate Reorganization
1) The Company completed the acquisition of all the issued shares of eight companies,
including Plzeňský Prazdroj, a.s., through Asahi Breweries Europe Ltd on March 31, 2017.
2) The Company transferred all the issued shares of LB Co., Ltd. on November 30, 2017.
3) The Company transferred all the issued shares of Tingyi-Asahi Beverages Holding Co., Ltd.
held by the Company through AI Beverage Holding Co., Ltd. on December 15, 2017.
4) The Company entered into share transfer agreements with Fosun Industrial Holdings
Limited and six other companies to transfer all the issued shares in Tsingtao Brewery
Company Limited held by the Company on December 20, 2017.
5) The Company entered into share transfer agreements with PT Indofood CBP Sukses
Makmur Tbk and PT Prima Intipangan Sejati to transfer all the issued shares of PT Asahi
Indofood Beverage Makmur and PT Indofood Asahi Sukses Beverage held by the Company
through Asahi Group Holdings Southeast Asia Pte. Ltd. on December 22, 2017.

33

(7) Employees(As of December 31, 2017)

Number of
employees
5,897
3,381
1,294
17,4352,240
617
30,864

Business segment
Alcoholic Beverages
Soft Drinks
Foods
International Operations
Other Businesses
Company-wide (common)
Total

34

Increase (decrease) fromthe end of the previous term
(9)
(151)
4
7,222
152
27
7,245

(8)

Management Perspectives

1)

Management Basic Policy
Under the group-wide corporate philosophy of “The Asahi Group aims to satisfy its customers
with the highest levels of quality and integrity, while contributing to the promotion of healthyliving and the enrichment of society worldwide,” the Group conducts business activities in the“Alcoholic Beverages,” “Soft Drinks” and “Foods” segments and the “International Operations” ofsuch segments, under the command of Asahi Group Holdings, Ltd., a pure holding company.
In addition, the Group makes efforts to resolve social issues through our business activities inthe three business activity domains of “Food and Health,” “The Environment” and “People andSociety,” and set out the respective material issues (priority themes) in each domain, toward therealization of a “sustainable society,” which is essential for developing our corporate activities.
2)

Long-Term Vision
The Asahi Group sets out the updated version of the Long-Term Vision in 2016 of “striving to
be a corporate group trusted around the world through the Kando of food (deliciousness, happiness,and innovation).” Meanwhile, setting the future image of business in the next ten years or so, theGroup, as a comprehensive beverage and food business group whose core business is alcoholic
beverages, aims to be an industry leader in Japan with high value addition as a key area of focus
and to establish a unique position as a global player that leverages strengths originating in Japan.
Furthermore, in the Long-Term Vision, the Group has defined “To seek ‘sustained corporate valueenhancement’ by pursuing satisfaction for all stakeholders” as its vision set forth for all its
stakeholders.
3)

Medium-Term Management Policy
While providing Key Performance Indicator guidelines for the coming three years or so, theMedium-Term Management Policy for the realization of the Long-Term Vision sets the following
three key priorities. Under this policy, the Group works toward the further development of theongoing “Management for Corporate Value Enhancement.”
A Strengthening of earnings power by positioning the domestic profit base as the cornerstoneof earnings and the overseas business as a growth engine
B Asset and capital efficiency improvement that takes into consideration capital cost
C Reinforcement of ESG initiatives to increase sustainability
Going forward, the Company will deepen dialogue with our shareholders, investors and otherstakeholders and aim to become a corporate group trusted not only in Japan but also around theworld by positioning the Long-Term Vision and the Medium-Term Management Policy as a
stakeholder engagement agenda.
Policy for 95th Term (FY 2018)
With steady economic recovery expected in the fiscal year 2018 domestically and globally,
the Asahi Group will work further toward the positioning of the domestic profit base as thecornerstone of earnings through the enhancement of the value of brands by adding value as key
areas of focus, in line with the Medium-Term Management Policy. For global operations, centeredon its operations in Europe, the Group will accelerate the development of the International
Operations as a growth engine through initiatives for creating synergies aimed at becoming a global
premium beer manufacturer with strong competitiveness. In addition, with the enhancement of our
financial position by boosting asset/capital efficiency and the further promotion of ESG efforts, theGroup will speed up the progress of management reforms to further develop management forcorporate value enhancement.
With these efforts, the Group projects revenue to be ¥2,140,000 million, core operating profit
to be ¥220,000 million, operating profit to be ¥200,000 million, profit attributable to owners ofparent to be ¥142,000 million, and adjusted profit attributable to owners of parent to be ¥136,000
million, for the 95th fiscal year.
The Group cordially requests shareholders’ continuing encouragement and support.
4)35Corporate Philosophy of the Asahi GroupThe Asahi Group aims to satisfy its customers with the highest levels of quality and integrity,
while contributing to the promotion of healthy living and the enrichment of society worldwide.
Long-Term Vision
Striving to be a corporate group trusted around the world through the Kando of food(deliciousness, happiness and innovation)
As a comprehensive beverage and food business group whose core business is alcohol
beverages, aim to be an industry leader in Japan with high value addition as a key areaof focus and establish a unique position as a global player that leverages strengths
originating in Japan.
Seek “sustained corporate value enhancement” by pursuing satisfaction for all stakeholders
Vision for Stakeholders
Customers
Business
partners
Society
Employees
Shareholders

Continue to create new value based on strengths nurtured in Japan and achieve theNo. 1 ranking for customer satisfaction in Japan and each region of the world.
Develop relationships with our business connections and alliance partners thatenable mutual growth through new value creation.
Contribute to the resolution of social problems through the Group’s businesses inareas such as development of a wholesome food culture.
Develop an environment in which employees experience both personal andcorporate growth and can work vigorously.
Enhance corporate value (equity value) through sustained profit creation andshareholder returns.

Medium-Term Management Policy
Further development of management to enhance corporate value in order to achieve sustainable growth
Key Performance Indicator (KPI) Guidelines
Guidelines for next 3 years out
Revenue Stable growth from existing businesses – Business reorganization + New M&A

Core operating profit

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

EPS (after adjustment*) CAGR (Compound annual growth rate): Mid to high single digit

ROE (after adjustment*)  Maintenance of 13% or higher* “After adjustment” refers to figures that exclude one-time extraordinary factors such as restructuring of business portfolio andexchange rate fluctuations.

Financial and Cash Flow Guidelines
Guidelines for next 3 years out
Cash Flow
Debt Reduction
Investment for growth
Shareholder Returns

 Free cash flows: above ¥140 billion (annual average)
 Impact of business restructuring: approx. ¥100 billion (FY2018 forecast) Net debt / EBITDA*1: around 3 times by the end of FY2019
 Net D/E ratio*2: below 1 time by the end of FY2018
 Prioritize strengthening financial structure and consider M&A for expansion offoundations for growth Stable dividend increases with the aim of a dividend payout ratio of 30%*3*1. Net debt / EBITDA (EBITDA net debt equity ratio) = (interest-bearing debt - cash) / EBITDA*2. Net D/E ratio (net debt equity ratio) = (interest-bearing debt - cash) / equity*3. Dividend payout ratio is calculated as profit attributable to owners of parent less a one-time profit or loss on the restructuringof business portfolio (net of tax expenses), etc.

36

2. Corporate Governance System(1) Basic Concept
With the belief that “growth-oriented governance” by which to make transparent, fair, swift andbold decisions is indispensable for striving to achieve sustainable growth and increase corporate
value over the medium- to long-term, the Company has established its Corporate Governance
Guidelines, and makes efforts primarily in the following areas:
1) Ensuring rights of and equality among shareholders
Recognizing that “a shareholder is equal in accordance with his/her equity interest,” theCompany strives to ensure substantial equality of shareholders and conduct appropriate
information disclosure by posting various information for shareholders and/or individual investors
with updates, as needed, on its website. Information disclosure is also ensured for overseas
investors using the English website, as well as the issuance of the English-version Convocation
Notice of the General Meeting of Shareholders in view of the convenience of exercising ofshareholders’ rights by foreign shareholders. Furthermore, the Company has streamlined a systemthat allows for employees assigned to assist the Audit & Supervisory Board, who are not subject todirectives or orders from Directors or employees, under the control of the Audit & Supervisory
Board, so that Audit & Supervisory Board Members can handle claims from any minority
shareholders against the Company or any Director and Audit & Supervisory Board Member,independently from management to substantially ensure the rights of minority shareholders.
2) Appropriate Collaboration with Stakeholders
The Company has identified corporate value not only as financial value, but also as asummation of financial value and social value that is closely related to each other, and has set its
vision vis-à-vis its customers, business partners, society, employees, and shareholders as
stakeholders, as described below, to practice appropriately in collaboration with them.
Customers:
Continue to create new value based on strengths nurtured in Japan andachieve the No. 1 ranking for customer satisfaction in Japan and each regionof the world.
Business partners: Develop relationships with our business partners and alliance partners thatenable mutual growth through new value creation.
Society:
Contribute to the resolution of social problems through the Group’sbusinesses in areas such as development of a wholesome food culture.
Employees:
Develop an environment in which employees experience both personal andcorporate growth and can work vigorously.
Shareholders:
Enhance corporate value (equity value) through sustained profit creation andshareholder returns.
3) Ensuring Proper Information Disclosure and Transparency Thereof
The Company formulated the “Disclosure Policy” and proactively addresses the voluntary
disclosure of information. The Company strives to provide well-balanced information disclosure
between financial information, such as accounting, and non-financial information, such as
management strategies, risks and governance, by publicizing the Integrated Report, in addition to
the statutory disclosure, timely disclosure and other information disclosures on the website.
4) Responsibilities of the Board of Directors
The Company’s Board of Directors appropriately fulfills their roles and responsibilities toensure the sustainable growth and the increase of corporate value over the medium- to long-termof the Company, as well as to promote the improvement of earning capacity and capital efficiency
by taking into account their fiduciary responsibility and accountability to shareholders. Suchinitiatives include determining the Long-Term Vision and Medium-Term Management Policies
and promoting their execution, while also properly supporting management’s risk taking bystreamlining the internal control system and risk management system.
The Board of Directors, in deliberating management strategies etc., mainly prepared bymanagement, takes care to plan the meetings as a venue for constructive discussion by avoiding
ritual discussion with measures such as sharing information with Outside Directors and a
preliminary explanation of agenda items thereto in the review process or receiving reports on the37results of discussion from the Audit & Supervisory Board, thereby aiming for the sustainablegrowth and the increase of corporate value over the medium- to long-term of the Company.
5) Dialogues with Shareholders
For promoting constructive dialogues with shareholders, the Company shall appoint an officer
as a responsible executive in charge of dialogues with shareholders and ensure well-organizedcollaboration among the auxiliary departments by providing the information for the dialogues. In
addition, the Company shall endeavor to understand the shareholder structure and conduct various
explanatory meetings by Representative Directors of the Company, visits to domestic/overseas
investors and/or factory tours for shareholders.

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

(3) Structure of the Board of Directors
The Company has three or more Outside Directors who have been elected from among corporate
managers and/or experts in view of their experience, insight and professional background to ensure
the balance and diversity in terms of knowledge, experience and ability of the entire board. As forinternal Directors, the Board of Directors comprehensively evaluates and judges the candidates’
experience, insight, professional background, etc. with reference to the requirements for Directors,
which are determined based on the management strategies of the Company, the “Corporate
Philosophy of the Asahi Group” and the “Asahi Group’s Corporate Action Guidelines.”(4) Evaluation of Effectiveness of the Board of Directors
To contribute to the creation of corporate value over the medium- to long-term, the Board of
Directors analyzes and evaluates the effectiveness of the Board of Directors on an annual basis, anddiscloses the summary of the evaluation results.
The English-version summary of the evaluation is posted on the following Company website:
http://www.asahigroup-holdings.com/en/whoweare/governance/policy.html(5) Requirements for Directors and Audit & Supervisory Board Members
The Board of Directors appoints candidates who have a wealth of experience, excellent insightand expertise, which are appropriate for such positions of the Company for the purpose of realizing
effective corporate governance.
Also, in the interests of higher fairness and transparency in determining the personnel affairs ofofficers, the Company has established the Nomination Committee to act as an advisory body to theBoard of Directors, of which half the committee members are Outside Directors, and the Board of
Directors shall consult with the Nomination Committee concerning the candidates for Directors andAudit & Supervisory Board Members and receive reports on the findings and views of theNomination Committee concerning this.

38

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

(7) Criteria for judgment of independence of Outside Directors/Audit &Supervisory Board Members
The criteria for judgment of independence of Outside Directors/Audit & Supervisory Board
Members are as described on pages 22 and 23.

(8) System chart
The corporate governance system of the Company is shown in the chart below.

39(9) Roles and compositions of the advisory bodies
The roles and compositions of the advisory committees and deliberative bodies are as described
below:
1) Nomination Committee
The Nomination Committee provides reports on its findings and views about candidates, etc.
for Directors, Audit & Supervisory Board Members and Corporate Officers in response to theinquiries referred from the Board of Directors. The Committee consists of two Outside Directors
and two internal Directors, and an internal Director is co-operatively appointed as its chairperson.
The Committee held four meetings during fiscal 2017, and provided reports on its findings andviews primarily about personnel affairs of officers and representatives of principal subsidiaries.
2) Compensation Committee
The Compensation Committee provides reports on its findings and views about the
remuneration system and amount of remuneration for Directors and Corporate Officers in
response to the inquiries referred from the Board of Directors. The Committee consists of two
Outside Directors and two internal Directors, and an Outside Director is co-operatively appointed
as its chairperson. The Committee held a total of three meetings during fiscal 2017, and provided
reports on its findings and views primarily about officers’ bonuses, the revision of the officers’
remuneration plan and the Performance-Linked Stock Compensation.
3) Information Disclosure Committee
The Information Disclosure Committee is responsible for centrally managing and controlling
corporate information disclosure, and provides reports on its findings and views in response to theinquiries referred from the President and Representative Director from the perspective of fair,
expeditious and wide-ranging information disclosure. The Committee consists of internal
Directors and Corporate Officers excluding the Chairman and Representative Director and thePresident and Representative Director, and the Director in charge of public relations serves as its
chairperson. The Committee held a total of eighteen meetings during fiscal 2017, analyzed thecontents of relevant information, and provided reports on its findings and views about the need orotherwise, contents, methods, etc. of information disclosure in light of the Timely Disclosure
Rules, etc. of the Tokyo Stock Exchange.
4) Risk Management Committee
The Risk Management Committee provides reports on its findings and views about policies on
overall risk management activities and the measures against main risks in response to the inquiries
referred from the President and Representative Director. The Risk Management Committee
consists of internal Directors and external attorneys at law and the Director in charge of generaland legal affairs serves as its chairperson. In addition, Standing Audit & Supervisory Board
Members attend this Committee’s meetings and state opinions as necessary. The Committee helda total of four meetings during fiscal 2017, and provided reports on its findings and views about
the findings of periodic risk surveys, the status operation of whistle blowing system.
5) Corporate Strategy Board
The Corporate Strategy Board provides reports on its findings and views about evaluation of
the legality, objectivity and reasonableness and of substantial matters concerning businessexecution in response to the inquiries referred from the Chairman and Representative Director or
the President and Representative Director. The Board consists of internal Directors, Corporate
Officers and Standing Audit & Supervisory Board Members, and the President and Representative
Director serves as its chairperson. The Board held a total of fifty meetings during fiscal 2017, andprovided reports on its findings and views primarily about development of corporate strategies
and status of business executions by Group companies.

40

(As of December 31, 2017)

Name

Information
Risk
Nomination Compensation
Disclosure Management
Committee Committee
Committee Committee

Corporate
Strategy
Board

Directors
Naoki Izumiya◎

Akiyoshi Koji

〇

〇

〇

〇

◎

Katsutoshi Takahashi

〇

〇

〇

〇

Yoshihide Okuda

〇

〇

◎

〇

Noboru Kagami

〇

〇

〇

Kenji Hamada

◎

〇

〇

Atsushi Katsuki

〇

〇

〇

Akira Muto□〇

Tetsuo Tsunoda□〇*Mariko Bando〇〇*Naoki Tanaka〇◎*Tatsuro Kosaka
Audit & Supervisory
Board Members*Katsutoshi Saito*Yumiko Waseda*Yutaka Kawakami
Note: * denotes Outside Directors / Audit & Supervisory Board Members◎ denotes committee chairpersons〇 denotes committee members□ denotes monitoring by attendance41

3. Systems to Ensure Appropriate Execution of Directors’ Duties in
Conformity With Laws and Regulations and the Articles ofIncorporation, and Other Systems to Ensure Appropriate Business
Operations
Overview of the resolution regarding systems to ensure appropriate business operations
The Board of Directors passed the following resolution with respect to the above-mentioned
systems.
The Company has adopted the following corporate philosophy of the Asahi Group: “The Asahi
Group aims to satisfy its customers with the highest levels of quality and integrity, while
contributing to the promotion of healthy living and enrichment of society worldwide.” To makethese aims a reality, the Company shall: establish, in accordance with the Companies Act and the Enforcement Regulations of theCompanies Act, the following basic policies (the “Basic Policies”) to improve systems designed
to ensure the appropriate execution of Directors’ duties in conformity with laws and regulations
and the Articles of Incorporation of the Company and its subsidiaries (herein this section the“Group Companies”) and ensure the appropriate business operations of the Group Companies(herein this section the “Internal Control System”);
 recognize that it is the Representative Director(s) who shall assume the ultimate responsibility
for the improvement of the Internal Control System in accordance with this resolution anddemand the Representative Director(s) to cause the Directors and Corporate Officers, throughthe respective departments and organizations they are in charge of, to develop and fully enforce
individual internal regulations that will be applied to the Company and the entire Asahi Groupand are required based on the Basic Policies; and take steps to maintain and enhance the effectiveness of the Internal Control System by reviewing
the Basic Policies and relevant internal regulations that will be applied to the Company or theentire Asahi Group in a timely and appropriate manner in accordance with changes in conditions
and circumstances.

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

2)

3)

4)

5)
6)

In accordance with a statement of “Fair and Transparent Corporate Ethics” as stipulated in“Asahi Group’s Corporate Action Guidelines,” the Company shall establish “Asahi Group
Corporate Ethics Regulation” and “Asahi Group Corporate Ethics Guidelines” and procure
its Directors, Audit & Supervisory Board Members and employees abide by these regulations.
In accordance with “Asahi Group Risk Management Regulations,” the Company shallestablish the “Risk Management Committee,” which will oversee the compliance and risk
management of the Asahi Group. One of the committee’s members shall be an external
attorney at law.
An officer of the Company in charge shall have authority over compliance and risk
management within the Asahi Group. The sections in charge of general and legal affairs shallhandle day-to-day compliance and risk management tasks.
The Company shall assign responsible persons in charge of compliance and risk managementin the Company and the Group Companies. The responsible person shall make efforts toprioritize compliance in all aspects of business activities at each Group Company.
The Company shall establish a “Clean Line System” for employees of the Asahi Group,
enabling them to blow the whistle on illicit behavior of others.
The Company shall establish “Asahi Group Procurement Regulations” addressing mutual
cooperation for fair and equitable deals and social responsibilities between each Group
Company and suppliers and a system that enables suppliers to blow a whistle on breaches of
42

7)

8)

the Policy as necessary. The Company shall inform and spell out these measures to its
suppliers to enable the Company to develop an Internal Control System in cooperation with
its suppliers.
To ensure antisocial forces do not exert any undue influence on the Group, all relevant
information shall be shared within the Asahi Group and the Company shall establish aninternal system on the measures. The Company shall also cooperate closely with industry
bodies, local communities, the police and other external specialist organizations in this field.
The operational details of the aforementioned agencies and systems shall be spelled out undera separately prepared set of internal regulations that will be applied to the Company or theentire Asahi Group.

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

2)
3)

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

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

2)

3)

The Company shall develop and adopt “Asahi Group Risk Management Regulations” andshall affirm them as the highest standards governing risk management within the Asahi
Group. It shall also establish a manual on the Regulations and disseminate the same among
all over the Group.
In addition to having the appropriate sections manage risk in their respective areas, the “RiskManagement Committee” shall perform comprehensive risk management across the entire
Asahi Group. The “Risk Management Committee” shall periodically analyze and evaluate
risks in accordance with the “Asahi Group Risk Management Regulations” and, whennecessary, carry out comprehensive reviews of the risk management system. Utmost attention
shall be paid to the risk of failing to maintain product quality. As a food and drink
manufacturing group, the Asahi Group strongly recognizes their social responsibility toconsumers to ensure the safety and security of their products.
In the event of any major accident, disaster or scandal, etc., the Company shall establish
a “Crisis-Response Meeting” chaired by a Representative Director.

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

2)

3)

4)

To ensure efficient performance of duties by Directors, the Board of Directors shall divide
duties in a reasonable way to be delegated to respective Directors and shall appoint
appropriate persons as Corporate Officers in charge of respective sections.
The Company shall establish “Regulation of Authority” and “Asahi Group’s Regulation of
Authority” stipulating rules of delegation of power and for a mutual checks-and-balances
mechanism among sections and among Group Companies.
The Company shall ensure the effective utilization of the “Corporate Strategy Board,”
consisting of the Company’s internal Directors, Corporate Officers, and Standing Audit &Supervisory Board Members by formulating the Asahi Group’s corporate strategy andimplementing progress management, etc.
To maximize operational efficiency, the Company shall utilize indices that provide an
objective and rational way of measuring its management and control of operations; and it
shall employ a unified system of follow-up and evaluation.
43

5)

To use funds efficiently, a cash management system among the Company 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 compliance and risk
management, shall apply comprehensively across the entire Asahi Group. As the holding
company, the Company shall manage the said systems of the Group Companies while
respecting their autonomy, and supporting the development and operation of the Internal
Control System, in accordance with the conditions and circumstances with which individualcompanies are facing.
While cooperating with the internal auditing organs established within the Asahi Group, thesection in charge of internal auditing in the Company shall get a grasp of and evaluate theInternal Control System and discipline in day-to-day tasks within the Asahi Group by directly
and indirectly auditing the Group Companies, and this section shall also conduct theevaluation of internal control related to financial reporting of the Group Companies andsubmit the relevant reports.
Decision-making authority related to business activities of the Group Companies shall be
subject to the document entitled “Asahi Group’s Regulation of Authority.”
Each of the Group Companies will provide reports at the “Corporate Strategy Board” one ormore times each quarter on performance of its operations including risk-related information.

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

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

2)

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

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

2)

3)

Directors and employees shall report regularly to Audit & Supervisory Board Members on
matters related to the Internal Control System, and shall report on an as-needed basis when asignificant event occurs. When necessary, the Audit & Supervisory Board Members shall beentitled to request reports from the Directors and employees (including from Directors andemployees of the Group Companies).
Directors shall ensure that Audit & Supervisory Board Members have every opportunity toparticipate in discussions of important bodies, etc. such as the Board of Directors meetings,
the “Corporate Strategy Board” meetings and the “Risk Management Committee” meetings.
Directors shall provide details of the agenda items of such meetings beforehand for Audit &Supervisory Board Members.
Audit & Supervisory Board Members shall at all times have the right to review the minutesof important meetings, documents of approval, etc.

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

2)

3)

4)

The Group Companies’ Directors, Corporate Auditors, employees or persons receiving
reports from them shall report regularly to the Company’s Audit & Supervisory Board
Members on matters related to the Internal Control System and, shall report on an as-neededbasis when a significant event occurs. When necessary, the Audit & Supervisory Board
Members shall be entitled to request reports from the Directors and employees of the Group
Companies.
The Company’s or the Group Companies’ sections in charge of internal auditing shall report
the results of the Group Companies’ internal audits to the Audit & Supervisory Board
Member of the Company without delay.
The whistle blowing contacts under the Clean Line System shall be the Company’s Audit &Supervisory Board Members, section in charge of general and legal affairs, or external
attorneys at law designated by the Company (“external attorneys at law”), and theinformation reported to the Company’s section in charge of general and legal affairs or theexternal attorneys at law shall be reported to the Company’s Audit & Supervisory Board
Members.
The Company prohibits any party from treating the whistle blower prescribed in thepreceding item and this item in any manner disadvantageous to him/her on the ground of thewhistle blow.

(10) Policy on procedures for advance or reimburse expenses incurred inassociation with Audit & Supervisory Board Members’ execution of theirduties, and treatment of other expenses or debts incurred in association withthe execution of their duties
To defray expenses incurred in association with the Audit & Supervisory Board Members’
execution of their duties, the Company shall secure a certain 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 inassociation 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 section in charge of internal auditing of the Company and with the Independent Accounting
Auditor.
Overview of operation of systems to ensure appropriate business operations(1) Overall Internal Control System
1)2)

In order to develop and operate the Internal Control Systems of the Company and the Group
Companies and effectively achieve the objectives of internal control, the section of theCompany in charge of internal auditing cooperates with the internal auditing organs
established within the Asahi Group in conducting audits to determine whether business
operations are executed properly and efficiently in accordance with annual audit plans.
During fiscal 2017, the Company and a total of 22 Group Companies were audited.
With respect to internal control over financial reporting, the evaluating organ establishedwithin the Asahi Group performs evaluation of the Group Companies’ internal control
activities pursuant to the “Basic Regulations for the Evaluation and Reporting of Internal
Control for Financial Reporting.”45

(2) Compliance System
1)
2)

3)

The Company tries hard to keep its employees informed about the “Asahi Group Corporate
Ethics Regulation” and the “Asahi Group Corporate Ethics Guidelines.”
The Company promotes awareness of compliance by putting managers responsible forcompliance and risk management in place in the Company and the Group Companies andconducting education and training by job class.
The Company conducts multifaceted and multilayered surveys of compliance awareness andbehavior by conducting a “Compliance Questionnaire” to the employees, etc. of theCompany and the Group Companies. In fiscal 2017, the questionnaire results revealed that:“Compliance awareness remained at a high level.”(3) Risk Management System
1)

2)
3)

The Company conducts cross-sectional risk management for the entire Asahi Group throughthe “Risk Management Committee” as the highest-ranking risk management
deliberation/promotion organ. During fiscal 2017, the Committee met for a total of four times
to conduct cross-sectional analyses and evaluations under the themes of “quality,”“compliance,” “governance,” “personnel/labor affairs,” “IT,” “finance/accounting,” etc. on
the basis of the findings of periodic risk surveys conducted by sections concerned.
By keeping in place the “Clean Line System,” the Company detects and resolves risk
problems early, and effectively prevents risk problems themselves from occurring.
The Company has a system in place to deal with any major accident, disaster, scandal, etc. by
setting up a “Crisis-Response Meeting” chaired by the Representative Director.

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

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

(5) Execution of Directors’ Duties
In order to ascertain the efficiency of Directors’ duties, the Board of Directors conducts rational
assignment sharing of services to be performed by Directors and Corporate Officers, and has each
Director and Corporate Officer report on the status of his/her business execution once every threemonths.

(6) Execution of Audit & Supervisory Board Members’ Duties
1)

2)

3)

Audit & Supervisory Board Members attend meetings of the Board of Directors, the“Corporate Strategy Board,” the “Risk Management Committee” and other important organs,
thereby confirming the status of development and operation of the Internal Control System.
Audit & Supervisory Board Members enhance the effectiveness of auditing by finding
opportunities regularly or as needed for exchanging information and views with the section in
charge of internal auditing, the Independent Accounting Auditors, etc. During fiscal 2017,
Audit & Supervisory Board Members had opportunities to exchange information and views
with the section in charge of internal auditing for a total of three times, with the Independent
Accounting Auditors for a total of twelve times, and with an organ within the Asahi Group in
charge of evaluations on internal control for financial reporting for a total of four times.
The Company ensures that Audit & Supervisory Board Members will be able to smoothly
perform their duties by posting four dedicated employees to the Audit & Supervisory Board.

46

4. Basic Policy Concerning the Persons Who Control Decisions on the
Company’s Financial and Business Policy(1) Basic policy
According to the Company’s view, the persons who control decisions on its financial andbusiness policy must properly grasp various matters concerning its business, including theinitiatives to “create appealing products,” to “care about quality and craftsmanship” and to “convey
the sense of joy to customers,” which form the source of the corporate value of the Asahi Group,and other tangible and intangible management resources thereof, potential effects of forwardlooking measures and other items that constitute the corporate value, and must enable the Company
to maintain and increase the Asahi Group’s corporate value as well as the common interests ofshareholders continuously and sustainably.
Upon facing a proposal of large-scale share purchases, the Company is not always in aposition to automatically object to the purchases even if it is a so-called hostile takeover, which ispursued without approval from the Board of Directors, provided that such takeover contributes tothe increase of the corporate value and the common interests of shareholders of the Company. Also,
the Company recognizes that the final decision as to whether to accept a proposal for an acquisitionof shares in the Company that would lead to a transfer of control of the Company should be madebased on the will of the shareholders as a whole.
It shall be noted, however, that there are not a few cases of large-scale share purchases thatwould not contribute to the increase of the corporate value and the common interests ofshareholders of a company, including ones that would, in light of their purposes, etc., cause
obvious damage to the corporate value and the common interests of shareholders or could
effectively coerce shareholders to sell their shares, ones that the purchaser does not provide
information and/or time reasonably necessary for the target company’s board of directors andshareholders to review and examine details of the proposed purchase or for the target company’sboard of directors to make an alternative proposal, and ones where the target company’s board of
directors would have to conduct negotiation with the purchaser so as to seek more favorable terms
than those initially proposed by the purchaser.
The person who intends to conduct a large-scale purchase of shares in the Company must havean understanding of the source of the Asahi Group’s corporate value and have the capability tomaintain and enhance it in the medium- and long-term; otherwise, the Asahi Group’s corporate
value and the common interests of shareholders would be damaged.
The Company thus believes that it is necessary to protect the Asahi Group’s corporate value,
and in turn, the common interests of shareholders, from such large scale share purchases.

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

Special Measures Contributing to Realization of the Basic Policy
In 2016, the Company updated its “Long-Term Vision 2020,” which was formulated in2013 to declare “Striving to be a corporate group trusted around the world through the Kando
of food (deliciousness, happiness, and innovation),” to the “Long-Term Vision” as the future
image of business in the next ten years or so, by adding “Seek ‘sustained corporate valueenhancement’ by pursuing satisfaction for all stakeholders.” At the same time, the Company
set the “Medium-Term Management Policy” for the realization of this Vision and put groupwide efforts in line with them. The details of the “Long-Term Vision” and the “MediumTerm Management Policy” are as described on pages 35 and 36.
The Company believes that it will be able to assure the flexibility of its corporate
strategy by setting and carrying out such management policy and will be able to increase its
sustained corporate value and ultimately secure common interests of its shareholders bysetting 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. Please refer to pages 37 - 41 for an overview.

47

2)

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

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

48

5. Overview of the Company(1) Shares Outstanding (As of December 31, 2017)1)

Total number of authorized shares

2)

Total number of issued shares

3)

Total number of shareholders

4)

Major shareholders

972,305,309(common stock)483,585,862(including 25,461,769 treasury shares)
98,099(Decreased by 16,918 from the end of the previous term)

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

Number ofshares held(in hundreds)
379,566
247,881
163,833
155,000
117,853
90,28081,26080,15673,667
69,917
1,459,413

Percentage ofshares held (%)
8.3
5.4
3.6
3.4
2.6
2.0
1.8
1.7
1.6
1.5
31.9

Notes:
1.
The Company holds treasury shares numbering 254,617 hundred shares. However, the Company is excluded
from the above list of major shareholders.
2.
Shareholding percentages are calculated based on the total number of issued shares less the number of treasury
shares.

49

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

Directors and Audit & Supervisory Board Members
Name

Naoki Izumiya

Akiyoshi Koji

Katsutoshi Takahashi

Yoshihide Okuda

Noboru Kagami

Kenji Hamada(As of December 31, 2017)

Areas of responsibility
and significant concurrent positions
Overall Management

Position

Chairman and
Representative Director
CEO
President andOverall Management
Representative Director
COO
Senior Managing Director Procurement, Production, Logistics
Senior Managing Corporate
Soft Drinks Business
Officer
Senior Managing Director Audit, General & Legal Affairs Management,
Senior Managing Corporate Human Resources, Information Technology
Officer
Alcoholic Beverages BusinessDirector
Corporate Social Responsibility, Research &Corporate Officer
Development, Quality Assurance
Foods BusinessCorporate Strategy, Public Relations, Investor
Relations, Finance, International BusinessDirector
Corporate Officer(CFO)

International Operations (Southeast Asia
Beverage Business)
Business Development, International Business

Atsushi Katsuki

Director
Corporate Officer

Mariko Bando

Outside Director

Naoki Tanaka

Outside Director

Tatsuro Kosaka

Outside Director

Akira Muto

Standing Audit &Supervisory Board Member
Standing Audit &Supervisory Board Member
Outside Audit &Advisor of The Dai-ichi Life Insurance Company,
Supervisory Board Member Limited
Outside Director of Imperial Hotel, Ltd.
Outside Corporate Auditor of Tokyu Corporation

Tetsuo Tsunoda
Katsutoshi Saito

Yumiko Waseda

Yutaka KawakamiInternational Operations (Oceania)
Chancellor of Educational Corporation Showa
Women’s University
Chairperson of the Board of Showa Women’s
University
Supervisory Committee member of The
Norinchukin Bank
Outside Director of MS&AD Insurance Group
Holdings, Inc.
President of Center for International Public Policy
Studies
Representative Director, President of Chugai
Pharmaceutical Co., Ltd.

Outside Audit &Partner and Attorney at Law of Tokyo Roppongi
Supervisory Board Member Law & Patent Offices
Outside Audit & Supervisory Board Member of
Kao Corporation
Outside Audit &Supervisory Director of Nippon Building FundSupervisory Board Member Inc.

50

Notes:
1. Directors Mariko Bando, Naoki Tanaka and Tatsuro Kosaka are Outside Directors as defined in Item 15, Article
2 of the Companies Act.
2. Audit & Supervisory Board Members Katsutoshi Saito, Yumiko Waseda and Yutaka Kawakami are Outside
Audit & Supervisory Board Members as defined in Item 16, Article 2 of the Companies Act.
3. The Company designated Outside Directors Mariko Bando, Naoki Tanaka and Tatsuro Kosaka and Outside
Audit & Supervisory Board Members Katsutoshi Saito, Yumiko Waseda and Yutaka Kawakami as Independent
Directors/Auditors as defined by the Tokyo Stock Exchange and reported to the said exchange.
4. Although the Asahi Group has business transactions with the respective groups of MS&AD Insurance Group
Holdings, Inc., The Dai-ichi Life Insurance Company, Limited, Imperial Hotel, Ltd., Tokyu Corporation, Kao
Corporation and Nippon Building Fund Inc., as the transaction value for each is minimal, less than 1% ofconsolidated revenue (or consolidated net sales) for the Company and the respective companies, there is no
special business relationship that could have impact on the Company’s management.
5. Although the Asahi Group has business transactions such as cash loans for consumption with The Norinchukin
Bank, the amount of these loans is minimal, less than 2% of consolidated total assets of the Company, and there
is no special business relationship that could have impact on the Company’s management.
6. Audit & Supervisory Board Member Akira Muto was formerly General Manager of Finance Department of theGroup and has considerable expertise in finance and accounting.
7. Audit & Supervisory Board Member Yutaka Kawakami has long experience as a certified public accountant; hehas considerable expertise in finance and accounting.
8. Director Ryoichi Kitagawa and Audit & Supervisory Board Member Tadashi Ishizaki retired upon the expiry of
their terms of office at the conclusion of the 93rd Annual General Meeting of Shareholders held on March 28,
2017. Also, Atsushi Katsuki was newly elected as a Director, Yutaka Kawakami was newly elected as an Audit& Supervisory Board Member, and they all assumed their offices at the same meeting.
9. In addition to the above, the retirement from significant concurrent positions by Directors or Audit &Supervisory Board Members during this year are detailed below.

Name

Position

Significant concurrent positions uponretirement
President and Representative Directorof Asahi Professional Management
Co., Ltd.

Yoshihide Okuda Senior Managing
Director
Senior Managing
Corporate Officer
Katsutoshi Saito Outside Audit & Representative Director and Chairman
Supervisoryof Dai-ichi Life Holdings, Inc.
Board Member
Representative Director and Chairmanof The Dai-ichi Life Insurance
Company, Limited

51

Date of retirement
March 16, 2017

March 31, 2017

2)

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

52

3)

Remunerations paid to Directors and Audit & Supervisory Board Members

Basic remuneration
Bonus
Numberof
NumberofCategory
Total amount
Total amountpersons
persons
paid (yen)paid (yen)remunerated
remunerated
Directors
11379,290,000
8234,200,000[of which, Outside Directors][3][46,950,000][–][–]
Audit & Supervisory Board
6
106,920,000––
Member[of which, Outside Audit &[4][36,900,000][–][–]
Supervisory Board
Members]

Total amount(yen)
613,490,000[46,950,000]
106,920,000[36,900,000]

Notes:
1. The figures above include Director Ryoichi Kitagawa and Audit & Supervisory Board Member Tadashi Ishizaki,
who retired upon the expiry of their terms of office at the conclusion of the 93rd Annual General Meeting of
Shareholders held on March 28, 2017.
2. A resolution authorizing payments associated with the termination of the retirement bonus system to be paid at
the time of retirement was passed at the 83rd Annual General Meeting of Shareholders held on March 27, 2007.
As of the end of this fiscal year, the anticipated total amount of future payments was as follows:¥19,000,000 to one Director
3. The total amount of Directors’ remunerations is ¥760 million (including ¥50 million for Outside Directors) per
year.
(The resolution passed at the 83rd Annual General Meeting of Shareholders held on March 27, 2007)
4. The total amount of Audit & Supervisory Board Members’ remunerations is ¥120 million (including ¥40 million
for Outside Audit & Supervisory Board Members) per year.
(The resolution passed at the 83rd Annual General Meeting of Shareholders held on March 27, 2007)
5. Other than those listed above, in accordance with the resolution passed at the 92nd Annual General Meeting of
Shareholders held on March 24, 2016, the Company will pay performance-linked stock compensation to
Directors (excluding Outside Directors) who were elected during the period of the Trust and took office and forwhom the Company contributed up to ¥220,000,000 during the period of the Trust (3 years). The Company may
grant up to a total of 21,000 shares of the Company per fiscal year to all eligible Directors.

534) Major activities of Outside Directors and Outside Audit & Supervisory Board Members
Attended
Audit &
Supervisory
Form of participation
Board
meetings–
Mariko Bando participated in discussions asnecessary, primarily from the perspective ofher wealth of experience as an educator anddiversity promotion.

Category

Name

Attended
Board ofDirectors
meetings

OutsideDirectors

Mariko Bando

12/13

Naoki Tanaka

12/13

–

Tatsuro Kosaka

13/13

–

Katsutoshi
Saito

13/13

7/7

YumikoWaseda13/13

7/7

YutakaKawakami

10/10

5/5

OutsideAudit &
Supervisory
Board
Members

Naoki Tanaka participated in discussions asnecessary, primarily from the perspective of
his wealth of experience as an expert ineconomic policy.
Tatsuro Kosaka participated in discussions
as necessary, primarily from the perspectiveof his wealth of experience as a manager.
Katsutoshi Saito participated in discussions
as necessary, primarily from the perspectiveof his wealth of experience as a manager.
Yumiko Waseda participated in discussions
as necessary, primarily from her expert
perspective as an attorney at law.
Yutaka Kawakami participated in
discussions as necessary, primarily from his
expert perspective as a certified public
accountant.

Note: As Audit & Supervisory Board Member Yutaka Kawakami was newly elected at the 93rd Annual General
Meeting of Shareholders held on March 28, 2017, the above number of Board of Directors meetings andAudit & Supervisory Board meetings held that he could attend is different from other Directors/Audit &Supervisory Board Members.

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

54

(3) Independent Accounting Auditor
1)

Name of the Independent Accounting Auditor
KPMG AZSA LLC

2)Remunerations paid to the Independent Accounting Auditor for this fiscal year

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

Amount payable¥262 million¥826 million

Notes:
1. In its agreement with the Independent Accounting Auditor, the Company makes no distinction between the
remunerations that it pays for auditing services governed by the Companies Act and for auditing services
governed by the Financial Instruments and Exchange Act. Consequently, the amount ¥262 million shown above
is a sum of these two amounts.
2. Having performed the necessary verifications on the contents of the Independent Accounting Auditor’s audit
plan, evaluation and analysis of the audits actually conducted during the previous fiscal year, status of executionof accounting audit duties, and reasonableness of the basis for calculation of remuneration, the Audit &Supervisory Board has consented to the amount of remunerations for the Independent Accounting Auditor.

3)

Nature of non-audit professional services provided by the Independent Accounting
Auditor
The Company also assigns professional duties to the Independent Accounting Auditor that are
not statutory auditing duties as stipulated in Paragraph 1, Article 2 of the Certified Public
Accountants Law. These non-audit services include financial/tax due diligence services.
4)

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

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

55

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

As ofDecember 31, 2017

As ofDecember 31, 2016
[Reference]

ASSETS
Current assets:
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax receivables
Other financial assets
Other current assets
Subtotal
Assets held for sale
Total current assets
Non-current assets:
Property, plant and equipment
Goodwill and intangible assets
Investments accounted for using equity method
Other financial assets
Deferred tax assets
Net defined benefit assets
Other non-current assets
Total non-current assets
Total assets

56

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

48,459397,340
136,460
14,161
3,428
31,934
631,784
3,241

812,426

635,026

717,914
1,538,679
4,846
219,142
11,38826,055
16,3682,534,396
3,346,822

570,771499,489
141,398
198,586
18,825
18,942
11,293
1,459,305
2,094,332

CONSOLIDATED STATEMENT OF FINANCIAL POSITION(million yen)

As ofDecember 31, 2017

As ofDecember 31, 2016
[Reference]

LIABILITIES and EQUITYCurrent liabilities:
Trade and other payables
Bonds and borrowings
Income tax payables
Provisions
Other financial liabilities
Other current liabilities
Subtotal
Liabilities directly related to assets held for sale
Total current liabilities
Non-current liabilities:
Bonds and borrowings
Net defined benefit liabilities
Deferred tax liabilities
Other financial liabilities
Other non-current liabilities

433,582359,72251,856
15,451
29,224
144,355
1,034,191
17,965
1,052,157

332,639
281,870
34,9574,870
26,352
137,957
818,649907
819,556

902,20325,488
156,780
52,9974,446

288,490
25,78957,252
54,1273,009

1,141,917
2,194,074

428,670
1,248,226

182,531
119,051
713,146(76,747)
210,592

182,531
118,668
589,935(76,709)21,927

Total non-current liabilities
Total liabilities
EQUITY
Issued capital
Share premium
Retained earnings
Treasury shares
Other components of equity
Other components of equity related to disposalgroups held for sale
Total equity attributable to owners of parent(3,440)–1,145,135

836,354

Non-controlling interests
Total equity
Total liabilities and equity

7,612
1,152,748
3,346,822

9,750
846,105
2,094,332

57

CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(million yen)

For the year ended
December 31, 2017

For the year ended
December 31, 2016
[Reference]

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

58

2,084,877(1,295,399)
789,477(593,108)
12,530(25,706)
183,192
5,206(10,368)

1,706,901(1,098,173)
608,728(460,241)
8,004(19,600)
136,889
3,106(4,066)

1,055

1,974

17,898

12,163

196,984(58,135)
138,848

150,068(62,952)
87,115141,003(2,155)
138,848

89,221(2,105)
87,115

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

Cash flows from (used in) operating activities:
Profit before tax
Depreciation and amortization expenses
Proceeds from sales of investments accounted forusing equity method
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accrued alcohol tax
Increase (decrease) in net defined benefit assets andliabilities
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash flows from operating activities
Cash flows from (used in) investing activities:
Purchase of property, plant and equipment
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from sales of investments accounted forusing equity method
Purchase of shares of subsidiaries and others resulting
in change in scope of consolidation
Proceeds from sales of shares of subsidiaries resulting
in change in scope of consolidation
Other
Net cash used in investing activities
Cash flows from (used in) financing activities:
Increase (decrease) in financial liabilities
Purchase of treasury shares
Dividends paid
Purchase of shares of subsidiaries and others not
resulting in change in scope of consolidation
Other
Net cash flows from financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents transferred to assets held
for saleCash and cash equivalents at end of period59

For the year ended
December 31, 2017

For the year ended
December 31, 2016

196,984
101,813150,068
71,131(17,898)(12,163)(11,536)(4,752)
7,490(3,834)(9,821)
(607)
6,369
497

1,358

(2,096)40,055
309,680
5,839(5,601)(78,205)
231,7121,340
204,718
5,546(3,658)(52,153)
154,452(87,883)(1,430)11,939(58,148)(2,286)30,87068,97236,440(891,555)(290,893)

15,318–(1,184)(885,823)

15,510(268,507)

690,607(38)(26,571)

146,272(21)(23,817)(39)(2,773)(2,075)
661,882(106)
119,554

2,111

642

9,883
48,4596,141
43,290

(288)

(972)

58,05448,459NON-CONSOLIDATED FINANCIAL STATEMENTS (Japanese GAAP)NON-CONSOLIDATED BALANCE SHEETS(million yen)

As ofDecember 31, 2017

As ofDecember 31, 2016
[Reference]

ASSETS
Current assets:
Cash and deposits
Short-term loans receivable
Prepaid expenses
Deferred tax assets
Income tax receivables
Other
Allowance for doubtful accounts
Total current assets
Non-current assets:
Property, plant and equipment:
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Leased assets
Construction in progress
Total property, plant and equipment
Intangible assets:
Right of using facilities
Trademarks
SoftwareLeased assets
Other
Total intangible assets
Investments and other assets:
Investment securities
Shares of subsidiaries and associates
Investments in capital of subsidiaries andassociates
Long-term loans receivable from subsidiaries andassociates
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

60

21,212
210,421
1,362
808
9,697
12,211(1,740)253,973

20,606
207,890903
832
11,767
11,478(1,866)
251,614

15,466
423
323
0
1,026
15,037540
89

15,393
369
374
0
974
15,037578
106

32,907

32,83339
10,893
10,321167
6

39
11,857
11,498237
821,42823,641

22,0481,595,648

30,100753,723

4,519

5,822

1,114

450

19,695
2,137
(181)

9,654
1,590
(223)

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

801,118
857,593
1,109,207

NON-CONSOLIDATED BALANCE SHEETS(million yen)

As ofDecember 31, 2017

As ofDecember 31, 2016
[Reference]

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

61

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

228,500
10,00018,000
307
1,001
4,148
42,989
119
119
1,003

489,257

306,188516,604
380,282479
1,206
898,572
1,387,830

100,000
173,000
569
1,332
274,902581,090

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

182,531
151,683
130,292
21,390262,045
262,045
195,000
67,045(76,709)519,550

7,175

8,923

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

(356)
8,566
528,117
1,109,207

NON-CONSOLIDATED STATEMENT OF INCOME(million yen)

For the year ended
December 31, 2017

For the year ended
December 31, 2016
[Reference]

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

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

56,85133,306
1,469
22,074

Operating expenses
Operating income
Non-operating income
Interest and dividend income
Reversal of allowance for doubtful accounts
Other31,682
104,706
1,417
1,177
130
109

30,38826,462
1,765
1,637
72
55

Non-operating expenses
Interest expenses
Bond issuance cost
Other
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associates

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

1,597
1,334
–
263
26,630
8,825
–
8,825
–

Extraordinary losses
Loss on sales and disposals of non-current assets
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on sales of shares of subsidiaries and associates
Loss on valuation of shares of subsidiaries andassociates
Other
Profit before income taxes
Income taxes - current
Income taxes for prior periods
Income taxes - deferred
Profit47,761
1,228
136
–
94

1,542
470
0
42
–

46,105

1,029

195
66,146
9,465–(9,295)65,975033,91310(3,186)(828)
37,91762

AUDIT REPORTS
Independent accounting auditor’s report on consolidated financial statements
Independent Auditor’s ReportFebruary 9, 2018
The Board of Directors
ASAHI GROUP HOLDINGS, LTD.
KPMG AZSA LLC
Hiroyuki Takanami (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hirotaka Tanaka (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Kei Sakayori (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the consolidated financial statements, comprising the consolidated statement offinancial position, the consolidated statement of profit or loss, the consolidated statement of changes
in equity and the related notes of ASAHI GROUP HOLDINGS, LTD. as at December 31, 2017, andfor the year from January 1, 2017 to December 31, 2017 in accordance with Article 444-4 of theCompanies Act.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with the latter part of Article 120-1 of the Ordinance of Companies
Accounting that prescribes some omissions of disclosure items required by International Financial
Reporting Standards, and for such internal control as management determines is necessary to enable
the preparation of consolidated financial statements that are free from material misstatements,
whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our
audit as independent auditor. We conducted our audit in accordance with auditing standards
generally accepted in Japan. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the consolidated financial statements. The procedures selected depend on our judgement,
including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal
control relevant to the entity’s preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances, while theobjective of the financial statement audit is not for the purpose of expressing an opinion on the63effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position, and the results of operations of ASAHI GROUP HOLDINGS, LTD.
and its consolidated subsidiaries for the period, for which the consolidated financial statements wereprepared, in accordance with the latter part of Article 120-1 of the Ordinance of Companies
Accounting that prescribes some omissions of disclosure items required by International Financial
Reporting Standards.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed
pursuant to the provisions of the Certified Public Accountants Law of Japan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’sReport as required by the Companies Act.

64

Independent accounting auditor’s report on non-consolidated financial statements
Independent Auditor’s ReportFebruary 9, 2018
The Board of Directors
ASAHI GROUP HOLDINGS, LTD.
KPMG AZSA LLC
Hiroyuki Takanami (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hirotaka Tanaka (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Kei Sakayori (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the non-consolidated financial statements, comprising the non-consolidated balance
sheets, the non-consolidated statement of income, the non-consolidated statement of changes in net
assets and the related notes, and the supplementary schedules of ASAHI GROUP HOLDINGS, LTD.
as at December 31, 2017 and for the year from January 1, 2017 to December 31, 2017 in accordancewith Article 436-2-1 of the Companies Act.
Management’s Responsibility for the non-consolidated Financial Statements and Others
Management is responsible for the preparation and fair presentation of the non-consolidated
financial statements and the supplementary schedules in accordance with accounting principles
generally accepted in Japan, and for such internal control as management determines is necessary toenable the preparation of non-consolidated financial statements and the supplementary schedules
that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the non-consolidated financial statements and the
supplementary schedules based on our audit as independent auditor. We conducted our audit inaccordance with auditing standards generally accepted in Japan. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the non-consolidated
financial statements and the supplementary schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the non-consolidated financial statements and the supplementary schedules. The procedures
selected depend on our judgement, including the assessment of the risks of material misstatement of
the non-consolidated financial statements and the supplementary schedules, whether due to fraud or
error. In making those risk assessments, we consider internal control relevant to the entity’s
preparation and fair presentation of the non-consolidated financial statements and the supplementaryschedules in order to design audit procedures that are appropriate in the circumstances, while theobjective of the financial statement audit is not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of65

accounting policies used and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the non-consolidated financial statements and the
supplementary schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
OpinionIn our opinion, the non-consolidated financial statements and the supplementary schedules referred
to above present fairly, in all material respects, the non-consolidated financial position and theresults of operations of ASAHI GROUP HOLDINGS, LTD. for the period, for which the nonconsolidated financial statements and the supplementary schedules were prepared, in accordancewith accounting principles generally accepted in Japan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed
pursuant to the provisions of the Certified Public Accountants Law of Japan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’sReport as required by the Companies Act.

66

REPORT OF THE AUDIT & SUPERVISORY BOARD
Audit Report
The Audit & Supervisory Board has prepared the following report based on the audit reports
prepared by individual Audit & Supervisory Board Members related to the Directors’ execution of
their duties during the 94th fiscal year, the period from January 1, 2017 to December 31, 2017, afterdue discussions and consultations among the Audit & Supervisory Board Members.
1. Methods used in audits by the individual Audit & Supervisory Board Members and by the
Audit & Supervisory Board and content of audits(1) The Audit & Supervisory Board determined the audit policies and division of duties, andreceived reports from each Audit & Supervisory Board Member regarding the status and resultsof the audits, as well as reports from the Directors and Independent Accounting Auditor on theexecution of their duties, and requested explanations of those reports when necessary.
(2) Each Audit & Supervisory Board Member, in accordance with the audit policies, division ofduties, etc. based on the audit standards established by the Audit & Supervisory Board, soughtto achieve mutual understanding with the Directors, the section in charge of internal audit andother employees, strove to collect information and create an audit environment, attended
meetings of the Board of Directors and other important meetings, received reports from
Directors, other employees, etc. regarding the execution of their duties and requested
explanations when necessary, reviewed documents related to important decisions, andinspected the operations and property of the head office and other locations. With respect to“systems to ensure appropriate execution of Directors’ duties in conformity with laws andregulations and the Articles of Incorporation and other systems to ensure appropriate business
operations, which is included in the Business Report (internal control systems)” (Item 6,
Paragraph 4, Article 362 of the Companies Act and Paragraphs 1 and 3, Article 100 of theOrdinance for Enforcement of the Companies Act), the Audit & Supervisory Board received
reports regularly from Directors and other employees regarding the status of the establishment
and implementation of the systems, sought additional explanations as necessary, and expressed
opinions thereon. The Audit & Supervisory Board Members’ “basic policy concerning thepersons who control decisions on the Company’s financial and business policies” (Item 3,
Article 118 of the Ordinance for Enforcement of the Companies Act) included in the Business
Report, based on discussions of the Board of Directors and other parties. With respect tosubsidiaries, the Audit & Supervisory Board Members took steps to facilitate communications
and exchange information with the Directors and Corporate Auditors of subsidiaries and, whennecessary, received reports from subsidiaries on the status of their businesses. Using theforegoing methods, the Audit & Supervisory Board Members reviewed the Business Report
and the supplementary schedules for this fiscal year.
(3) The Audit & Supervisory Board oversaw and verified that the Independent Accounting Auditor
maintained its independence and carried out appropriate audits, moreover, and received reports
from the Independent Accounting Auditor regarding the execution of its duties and requested
explanations when necessary. The Audit & Supervisory Board also received notifications fromthe Independent Accounting Auditor to the effect that “a system for the maintenance ofappropriate execution of duties” (included in Article 131 of the Ordinance of Companies
Accounting) in accordance with the “standards for quality control of audits” (BusinessAccounting Council; October 28, 2005), etc., and requested explanations when necessary.
Based on the above activities, the Audit & Supervisory Board examined the non-consolidated
financial statements (non-consolidated balance sheets, non-consolidated statement of income,non-consolidated statement of changes in net assets, and notes to the non-consolidated financial
statements), the supplementary schedules, and the consolidated financial statements(Consolidated statement of financial position, consolidated statement of profit or loss,
consolidated statement of changes in equity, and notes to the consolidated financial statements)
for this fiscal year.

67

2. Results of the Audit(1) Results of audit of the Business Report, etc.
 In our opinion, the Business Report and the supplementary schedules present the situationof the Company fairly, in compliance with the provisions of applicable laws andregulations and the Articles of Incorporation.
 In our opinion, there are no wrongful acts or material violations of applicable laws andregulations or the Articles of Incorporation in the execution of their duties by the Directors.
 In our opinion, the content of the resolution by the Board of Directors regarding internal
control systems is appropriate, and, furthermore, content of the Business Report regarding
the internal control systems and the execution by the Directors have been appropriate.
 In our opinion, the Company’s basic policy concerning the persons who control decisions
on the Company’s financial and business policies in the Business Report is appropriate.
We acknowledge that the measures implemented to achieve this basic policy are consistent
with the basic policy, will not harm the common interest of the Company’s shareholders,
and will not serve the purpose of maintaining the positions of the Company’s Directors andAudit & Supervisory Board Members.
(2) Results of the audit of non-consolidated financial statements and the supplementaryschedules
In our opinion, the auditing methods used by KPMG AZSA LLC, the Independent Accounting
Auditor, and the results of its audit are appropriate.
(3) Results of the audit of consolidated financial statements
In our opinion, the auditing methods used by KPMG AZSA LLC, the Independent Accounting
Auditor, and the results of its audit are appropriate.
February 13, 2018
Audit & Supervisory Board
Asahi Group Holdings, Ltd.
Akira Muto (Seal)
Standing Audit & Supervisory Board Member
Tetsuo Tsunoda (Seal)
Standing Audit & Supervisory Board Member
Katsutoshi Saito (Seal)
Outside Audit & Supervisory Board Member
Yumiko Waseda (Seal)
Outside Audit & Supervisory Board Member
Yutaka Kawakami (Seal)
Outside Audit & Supervisory Board Member

68