CONVOCATION NOTICE OF THE 96th
ANNUAL GENERAL MEETING OF SHAREHOLDERSDATE AND TIMETABLE OF CONTENTS

March 25 (Wednesday), 2020 at 1:00 p.m. (JST)(Reception start time: 11:30 a.m.)

Convocation Notice1

Reference Materials for General Meeting of Shareholders

7

Item 1

Appropriation of Retained Earnings

7

Item 2

Election of nine (9) Directors

8

Item 3

Election of one (1) Audit & Supervisory Board Member

22

PLACE
Banquet Room “Tsuru,” Banquet Floor of “TheMain” of Hotel New Otani, 4-1, Kioi-cho, Chiyodaku, Tokyo
DEADLINE FOR EXERCISING VOTINGRIGHTS VIA POSTAL MAIL AND INTERNET,
ETC.
No later than 5:30 p.m., March 24 (Tuesday), 2020
(JST)
English Translation of Original JapaneseThis is a translation of the original notice in Japanese.
In the event of any discrepancy, the original notice inJapanese shall prevail.

Business Report

26

Consolidated Financial Statements

68

Non-Consolidated Financial Statements

72

Audit Reports

75

ASAHI GROUP HOLDINGS, LTD.
Securities Code: 2502

Dear Shareholders:

Akiyoshi Koji
President and Representative Director

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

CONVOCATION NOTICE OF
THE 96 ANNUAL GENERAL MEETING OF SHAREHOLDERSth

1. DATE AND TIME
March 25 (Wednesday), 2020, 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 96th term,from January 1, 2019 to December 31, 2019.

Items to be resolved:
Item 1: Appropriation of Retained Earnings
Item 2: Election of nine (9) Directors
Item 3: Election of one (1) Audit & Supervisory Board Member1

I would like to take the opportunity of sending this Convocation Notice of the 96th Annual
General Meeting of Shareholders to offer a short greeting.
Last year, Asahi Group Holdings, Ltd. (the “Company”) established the new group philosophy,
the “Asahi Group Philosophy,” and revised the “Medium-Term Management Policy,” which had
been used until that time. In the “Medium-Term Management Policy,” the Company set the 3 keypriorities of “Strengthening Earningｓ Power” driven by high added value enhancement andearning structure reform, “Sophisticating Management Resources” aimed at expansion of the new
foundation for growth, and “Reinforcing ESG Initiatives” supporting sustainable value creation
process. The Company enhances “Glocal Value Creation Management,” which fuses “global”
and “local,” to grow with high-value-added brands.
Going forward, the Company will deepen dialogue with our stakeholders such as shareholders
and aim to achieve sustainable growth and enhance its corporate value over the medium- to longterm by positioning these 3 key priorities as a stakeholder engagement agenda.
In that regard, you are cordially invited to attend the 96th Annual General Meeting of
Shareholders of Asahi Group Holdings, Ltd., which will be held as described in the following
particulars.

Sincerely,
March 3, 2020
Measures against the novel coronavirus infection
Currently there is an outbreak of a novel coronavirus. As a response to the current situation looking
forward to the date of the Annual General Meeting of Shareholders, we will take measures toprevent infection, such as putting in alcohol disinfectant. We look forward to the understanding of
the shareholders who attend this Annual General Meeting of Shareholders.
Note: Among attached materials to be provided with this notice, “Consolidated Statement of Changes
in Equity” and “Notes to the Consolidated Financial Statements” of the Consolidated Financial
Statements; and “Non-Consolidated Statement of Changes in Net Assets” and “Notes to the NonConsolidated Financial Statements” of the Non-Consolidated Financial Statements, are posted on the
Company’s website in accordance with the provisions of relevant laws and regulations and the Article
15 of the Company’s Articles of Incorporation, and they are not attached to this notice.
Accordingly, the attached materials to this notice are part of the Consolidated Financial Statements
and Non-Consolidated Financial Statements, which have been audited by the Independent Accounting
Auditor in preparing their audit reports and Audit & Supervisory Board Members and Audit &Supervisory Board in preparing their audit reports.
If there are any corrections to Reference Materials for General Meeting of Shareholders, Business
Report, Consolidated Financial Statements, and Non-Consolidated Financial Statements, they will be
posted on the Company’s website.

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

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

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

(1) Attending the General Meeting of Shareholders in person
Date and time of the General Meeting of Shareholders:March 25 (Wednesday), 2020, at 1:00 p.m. (JST)(Reception start time: 11:30 a.m.)Please submit the voting form at the reception desk at the venue.
Please also bring this notice with you, to help us preserve resources.
You are advised to arrive at the venue early, as the reception desk is expected to become extremely
crowded immediately before the commencement of the meeting.
Please note that anyone other than a shareholder who is entitled to exercise voting rights (e.g.,
non-shareholding proxy, person accompanying the shareholder) will not be allowed inside thevenue.

If you are unable to attend the meeting in person, you may exercise your voting rights via either
postal mail or the internet, etc.
Please review the attached “REFERENCE MATERIALS FOR GENERAL MEETING OF
SHAREHOLDERS,” and exercise your voting rights no later than 5:30 p.m., March 24(Tuesday), 2020 (JST) as instructed in (2) and (3) below on pages 4 - 6.

3

(2) Voting via Postal Mail
Deadline for exercising voting rights:

To be received by 5:30 p.m., March 24 (Tuesday), 2020 (JST)Please indicate your consent/dissent concerning each item shown on the voting form, and sendback the form so that it will arrive no later than the deadline for exercising voting rights.

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

Items 1 and 3
If you dissent:
Mark a ○If you consent:
Mark a ○in the box marked “賛”in the box marked “否”

Item 2
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”

Regarding the video of the General Meeting of Shareholders of the Company
A video of the proceedings of the 96th Annual General Meeting of Shareholders will beavailable on the “About the General Meeting of Shareholders” page of our website.
https://www.asahigroup-holdings.com/ir/shareholders_guide/shareholders_meeting.html(Japanese only)
Date and time that the video will be made available: Noon March 26 (Thursday), 2020 (JST)(Planned)(3) Voting via Internet, etc.
Deadline for exercising voting rights via the Internet, etc.:

Sent by 5:30 p.m., March 24 (Tuesday), 2020 (JST)For details on exercising voting rights via the internet, etc., please refer to following pages.
* The online voting website and Help Desk information are available only in Japanese.

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

Sent by 5:30 p.m., March 24 (Tuesday), 2020 (JST)* Institutional investors may use the platform operated for institutional investors by ICJ, Inc. to electronically exercise
the voting rights.

Method 1: “Smart Voting” Recommendation
1. If you intend to exercise your voting rights by smartphone, you can simply exercise
voting rights without entering your voting code and password by scanning the QR
code® located on the bottom right of the voting form.

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

Note: If you need to make a correction to the content of your vote after you have exercised your voting rights,
please access the website in accordance with “Method 2: Entering voting code and password” noted on thenext page, login by entering your voting code and password, and correct your vote.

5

Method 2: “Entering voting code and password”
1. You can exercise your voting rights by accessing the online voting website
https://www.web54.net from a computer, smartphone or cellular phone, andentering the voting code and password.
2. Enter the “voting code” (議決権行使コード) indicated on the voting form.
Enter the “voting code” (議決権行使コード)
Voting code

Click on “Log in” (“ログイン”)

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

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

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

If you are unclear about the procedure for voting via the Internet using a PC, smartphone ormobile phone, please contact the following Help Desk for inquiries.
Sumitomo Mitsui Trust Bank, Limited
Stock Transfer Web Support Phone No.
Toll-free (within Japan): 0120-652-031 (9:00 a.m. to 9:00 p.m.) (JST)* “QR code” is a registered trademark of DENSO WAVE INCORPORATED.

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

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

Year-end dividends
Under the “Medium-Term Management Policy,” Asahi Group Holdings, Ltd. (the “Company”),
as a holding company of the Group (the Company and its subsidiaries are collectively or individuallyreferred to as the “Group” or the “Asahi Group”), has been working toward enhancing “Glocal
Value Creation Management” based on Asahi Group Philosophy, and has been using the generated
free cash flows for investing in foundation for growth including M&A deals while seeking stronger
financial conditions. Meanwhile, in terms of shareholder returns, the Company’s policy is to stably
increase dividends aiming to achieve a dividend payout ratio* of 35% by fiscal year 2021.
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 ¥48 per share, and as a result, the annual dividend, including theinterim-period dividend of ¥52 per share that has been previously paid out, will amount to ¥100 per
share, which is an increase of ¥1 per share from the previous fiscal year, for a dividend payout ratioof 32.2%.
*

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¥48 per share of common stock
Total amount of payout: ¥21,989,387,136(3) Effective date of dividends of Retained Earnings
March 26, 2020

Note: Starting from the 93rd term (FY2016), the Asahi Group has adopted International Financial ReportingStandards (IFRS).

7

_Item 2_ Election of nine (9) Directors
At the conclusion of this Annual General Meeting of Shareholders, the terms of office of all
Directors will expire.
To ensure balance and diversity in terms of the knowledge, experience, and ability of the entire
board deemed necessary for the sustainable growth and the increase of corporate value over the
medium- to long-term of the Company, the Company has decided that the Board of Directors is
to be composed of persons suitable as the Company’s Directors who have a wealth of experience,excellent insight, expertise, and ability required by the Company, with reference to therequirements for Directors and Audit & Supervisory Board Members, which are determined basedon the group philosophy, the “Asahi Group Philosophy,” and management strategies. Furthermore,
Outside Directors shall be persons who meet the requirements of independent officers as definedby the Company such as corporate managers, experts, and others, and at least 1/3 of the Directors.
The Company therefore asks the shareholders to elect the following nine (9) candidates to fill
the Director positions.
The nomination of the candidates for the positions of Director has been deliberated at thevoluntary “Nomination Committee,” of which independent officers form a majority of themembers and which is chaired by an Outside Director who is an independent officer.
Candidate
NumberName (Age)1

Naoki Izumiya (71)2

Akiyoshi Koji (68)

Reappointment

Reappointment

3

Atsushi Katsuki (60)4

Yutaka Henmi (56)5

Taemin Park (56)6

Keizo Tanimura (54)Reappointment

Reappointment

Reappointment

Reappointment

Position and Responsibilities in the Company

Attended
Board ofDirectors
meetings

Chairman of the Board

12/12

President and Representative Director, CEO
Overall Management
Investor Relations
Research & Development

12/12

Managing Director and Managing Corporate Officer
CFO
Corporate Strategy
FinancePublic Relations
ESG (ES Sectors)
Alcoholic Beverages Business
Soft Drinks Business

12/12

Director and Corporate Officer
Supply Chain
Quality Assurance
Foods Business9/9

Director and Corporate Officer
Alliance and M&AInternational Beer Business
International Non-Alcohol Beverages Business9/9

Director and Corporate Officer
Administration and Governance
ESG (G Sector)

9/9

Outside Director

12/12

Outside Director

12/12

Outside Director

9/9

Tatsuro Kosaka (67)7Reappointment
OutsideIndependent

Yasushi Shingai (64)8Reappointment
OutsideIndependent

Christina L. Ahmadjian (61)9Reappointment
OutsideIndependent

8

Notes:1.
The age, position and responsibilities are as of this Annual General Meeting of Shareholders.
2.
Attended Board of Directors meetings is the number of times the Director attended Board of Directors meetings held in
FY2019.
3.
As 4 candidates for Director Yutaka Henmi, Taemin Park, Keizo Tanimura and Christina L. Ahmadjian were newly
elected at the 95th Annual General Meeting of Shareholders held on March 26, 2019, the above number of Board of
Directors meetings held that they could attend is different from other Directors.
Reappointment: candidate for reappointment
Outside: candidate for Outside Director
Independent: candidate for independent officer

9Candidate Number

1
Naoki Izumiya
Date of Birth (Age): August 9, 1948 (71 years old)
Reappointment
Owned Shares of the Company:
Tenure (at the conclusion of this Annual
General Meeting of Shareholders):
Attended BOD* meetings (FY2019):

52,200 shares
17 years
12/12

Reasons for recommending Naoki Izumiya as a candidate for Director
Since being appointed a Director of the Company in 2003, Naoki Izumiya has served as President andRepresentative Director, CEO of the Company; Chairman and Representative Director of theCompany; and since 2019, as Chairman of the Board of the Company. He has taken a central role inincreasing the effectiveness of the Board of Directors for this fiscal year by essentially engaging in thefair and open operation of the Board of Directors, promoting the active involvement of and theopinions and recommendations from Outside Directors, and managing proceedings that encourage
substantial dialogue between Outside Directors and internal Directors. In addition, he has played acentral role in creating mechanisms to increase the sustainable effectiveness of the Board of Directors,
which forms the basis of increased corporate value over the medium- to long -term.
Furthermore, he sufficiently possesses the insight, expertise, and ability required as a Director of theCompany due to his experience as a manager of the Company over many years. In particular, hepossesses a high level of insight and expertise regarding corporate governance and risk management,
and imagination for sustainable management.
Accordingly, we deem that Naoki Izumiya is a necessary human resource who is indispensable to thecomposition of the Board of Directors as the human resource who connects Outside Directors andinternal Directors for increasing the effectiveness of the decision-making and oversight functions of
the Board of Directors, and thus we recommend his reappointment as a Director.
Chairman of the Board◤ Position:◤ Career Summary
Apr. 1972
Joined the Company
Mar. 2000
Corporate Officer, Senior General Manager of Group Management Strategy
Headquarters
Oct. 2000
Corporate Officer, Senior General Manager of Strategy Planning Headquarters
Sep. 2001
Corporate Officer, Deputy General Manager of Tokyo Metropolitan Headquarters,
General Manager of Tokyo BranchMar. 2003
Director
Mar. 2004
Managing Director
Mar. 2006
Managing Director, Managing Corporate Officer, Senior General Manager of Sales &Marketing Headquarters for Alcoholic Beverages
Mar. 2009
Senior Managing Director, Senior Managing Corporate Officer
Mar. 2010
President and Representative Director
Mar. 2014
President and Representative Director, CEO
Mar. 2016
Chairman and Representative Director, CEO
Mar. 2018
Chairman and Representative Director
Mar. 2019
Chairman of the Board(to the present)◤ Significant Concurrent Positions External Board Director of Recruit Holdings Co., Ltd.
Outside Director of Obayashi Corporation◤ Candidate’s special interests in the Company
There are no special interests between Naoki Izumiya and the Company.
*BOD stands for Board of Directors.

10Candidate Number

2
Akiyoshi Koji
Date of Birth (Age): November 8, 1951 (68 years old)
Reappointment
Owned Shares of the Company:
Tenure (at the conclusion of this Annual
General Meeting of Shareholders):
Attended BOD meetings (FY2019):

15,900 shares
13 years
12/12

Reasons for recommending Akiyoshi Koji as a candidate for Director
Since being appointed a Director of the Company in 2007, Akiyoshi Koji has served as President andRepresentative Director of Asahi Breweries, Ltd., President and Representative Director, COO of theCompany, and since 2018, President and Representative Director, CEO. He has been promoting
sustainable growth and increased corporate value over the medium- to long-term by constructing a
growth platform through the dramatic expansion of overseas business and revision of businessportfolio, as well as giving overall direction of the Company’s management through the establishmentof a new group philosophy and group code of conduct. In particular, for this fiscal year, he has a trackrecord that includes creating a sustainable and strong foundation for growth of the Group throughforming an agreement to acquire an Australian beer and cider business, and maintaining and enhancing
competitiveness by strengthening regional headquarter function of the overseas business in responseto the globalization of the Company.
Furthermore, he sufficiently possesses the insight, expertise, and ability required as a Director of theCompany due to his experience as a manager of the Company over many years. In particular, hepossesses the high level of “foresight, decisiveness, and executive ability” required as a CEO, and the“ability to provide vision (aim and objective)” required in an environment that is subject to extremechanges and difficult to predict.
Accordingly, we deem that Akiyoshi Koji is a necessary human resource who is indispensable to thecomposition of the Board of Directors as the human resource who plays a central role within theexecutive directors for increasing the effectiveness of the decision-making and oversight functions of
the Board of Directors, and thus we recommend his reappointment as a Director.
◤ Position and Responsibilities
Position:
President and Representative Director, CEO
Responsibilities: Overall Management
Investor Relations, Research & Development◤ Career Summary
Apr. 1975
Joined the Company
Sep. 2001
Corporate Officer
Mar. 2003
Managing Director, Senior General Manager of Planning Division of
Asahi Soft Drinks Co., Ltd.
Mar. 2006
Senior Managing Director, Senior General Manager of Planning Division of
Asahi Soft Drinks Co., Ltd.
Mar. 2007
Managing Director, Managing Corporate Officer of the Company
Jul. 2011
Director of the Company
President and Representative Director of Asahi Breweries, Ltd.
Mar. 2016
President and Representative Director, COO of the Company
Mar. 2018
President and Representative Director, CEO(to the present)◤ Candidate’s special interests in the Company
There are no special interests between Akiyoshi Koji and the Company.

11

Candidate Number

3
Atsushi Katsuki
Date of Birth (Age): March 17, 1960 (60 years old)
Reappointment
Owned Shares of the Company:
Tenure (at the conclusion of this Annual
General Meeting of Shareholders):
Attended BOD meetings (FY2019):

2,598 shares
3 years
12/12

Reasons for recommending Atsushi Katsuki as a candidate for Director
Since being appointed a Director of the Company in 2017, Atsushi Katsuki has served as Managing
Director and Managing Corporate Officer since 2018, and as CFO his responsibilities have included
finance, corporate strategy, risk management, the Alcoholic Beverages Business and the Soft Drinks
Business. In the acquisition agreement for the Australian beer and cider business, he played an
important role, making use of his high expertise and knowledge of global management as a CFO. He
also has a track record that includes introducing a risk management system (Enterprise Risk
Management (ERM)), which is vital to the Company’s sustainable growth and enhancement ofcorporate value over the medium- to long-term.
Furthermore, he sufficiently possesses the insight, expertise, and ability required as a Director of theCompany due to his experience as Group CEO of an overseas regional headquarters company. In
particular, he has a high level of insight and expertise regarding finance and M&As, the ability tounderstand and accommodate diverse cultures, and management competence in overseas businesses.
Accordingly, we deem that Atsushi Katsuki is a necessary human resource who is indispensable tothe composition of the Board of Directors as a member of the Board who has diverse insight,
expertise, and capabilities for increasing the effectiveness of the decision-making and oversightfunctions of the Board of Directors, and thus we recommend his reappointment as a Director.
◤ Position and Responsibilities
Position:Managing Director and Managing Corporate Officer, CFO
Responsibilities: Corporate Strategy, Finance, Public Relations, ESG (ES Sectors)
Alcoholic Beverages Business, Soft Drinks Business◤ Career Summary
Apr. 1984
Joined The Nikka Whisky Distilling Co., Ltd
Sep. 2002
Transferred to the Company
Oct. 2011
Managing Director of Asahi Holdings (Australia) Pty Ltd
Apr. 2014
Director, Group CEO of Asahi Holdings (Australia) Pty Ltd
Mar. 2016
Corporate Officer of the Company
Director, Group CEO of Asahi Holdings (Australia) Pty Ltd
Mar. 2017
Director, Corporate Officer of the Company
Mar. 2018
Managing Director, Managing Corporate Officer(to the present)◤ Candidate’s special interests in the Company
There are no special interests between Atsushi Katsuki and the Company.

12

Candidate Number

4
Yutaka Henmi
Date of Birth (Age): August 22, 1963 (56 years old)
Reappointment
Owned Shares of the Company:
Tenure (at the conclusion of this Annual
General Meeting of Shareholders):
Attended BOD meetings (FY2019):

3,240 shares
1 year9/9

Reasons for recommending Yutaka Henmi as a candidate for Director
Since being appointed as a Director of the Company in 2019, Yutaka Henmi’s responsibilities haveincluded supply chains (procurement, production and logistics), quality assurance, and the FoodBusiness. His track record includes promoting construction of globally optimized production andlogistics systems and quality assurance management systems, and achieving efficiency gains byreforming procurement duties.
Furthermore, he sufficiently possesses the insight, expertise, and ability required as a Director of theCompany due to his extensive experience in the production section, including plant management
primarily related to engineering and as President of a company supporting the production technology,
including overseas. In particular, he has a high level of insight and expertise regarding production
technology and plant productivity, as well as supply chain management skills. (productivity
improvement management, production and logistics cost optimization, etc.)
Accordingly, we deem that Yutaka Henmi is a necessary human resource who is indispensable to thecomposition of the Board of Directors as a member of the Board who has diverse insight, expertise,and capabilities for increasing the effectiveness of the decision-making and oversight functions of theBoard of Directors, and thus we recommend his reappointment as a Director.
◤ Position and Responsibilities
Position:
Director and Corporate Officer
Responsibilities: Supply Chain, Quality Assurance
Foods Business◤ Career Summary
Apr. 1987
Joined the Company
Apr. 2015
Senior Officer of the Company
President of Asahi Group Engineering Co., Ltd.
Mar. 2016
Senior Officer, General Manager of Production Section of the Company
Mar. 2017
Corporate Officer, General Manager of Production Section
Sep. 2018
Corporate Officer responsible for Supply Chain Optimization
Mar. 2019
Director, Corporate Officer(to the present)◤ Candidate’s special interests in the Company
There are no special interests between Yutaka Henmi and the Company.

13

Candidate Number

5
Taemin Park
Date of Birth (Age): January 25, 1964 (56 years old)
Reappointment
Owned Shares of the Company:
Tenure (at the conclusion of this Annual
General Meeting of Shareholders):
Attended BOD meetings (FY2019):

61 shares
1 year9/9

Reasons for recommending Taemin Park as a candidate for Director
Since being appointed as a Director of the Company in 2019, Taemin Park’s responsibilities haveincluded alliances and M&As and overseas business (Oceania and Southeast Asia). His track record
includes promoting the transformation of the Oceania business into a steady growth engine, andleading the acquisition agreement for the Australian beer and cider business to a swift conclusion using
his high level of expertise and capabilities as the Director responsible for alliances and M&As.
Furthermore, he sufficiently possesses the insight, expertise, and ability required as a Director of theCompany due to his extensive experience in overseas business over many years, including in alliancesand M&As and as Director of overseas regional headquarters companies. In particular, he has a highlevel of insight and expertise regarding trends and new movements in the overseas alcoholic beverageand soft drink industries, and strategy formulation skills for envisaging business formations centeredon alliances and M&As.
Accordingly, we deem that Taemin Park is a necessary human resource who is indispensable to thecomposition of the Board of Directors as a member of the Board who has diverse insight, expertise,and capabilities for increasing the effectiveness of the decision-making and oversight functions of theBoard of Directors, and thus we recommend his reappointment as a Director.
◤ Position and Responsibilities
Position:
Director and Corporate Officer
Responsibilities: Alliance and M&AInternational Beer Business, International Non-Alcohol Beverages Business◤ Career Summary
Apr. 1991
Joined Hitachi, Ltd.
Apr. 2003
Joined Renesas Technology Corp. (current Renesas Electronics Corporation)
Jul. 2005
Joined the Company
Apr. 2015
Senior Officer of the Company
Director of Asahi Group Holdings Southeast Asia Pte. Ltd.
Mar. 2016
Senior Officer, General Manager of Business Development Section of the Company
Mar. 2017
Corporate Officer, General Manager of Business Development Section
Mar. 2019
Director, Corporate Officer(to the present)◤ Candidate’s special interests in the Company
There are no special interests between Taemin Park and the Company.

14

Candidate Number

6
Keizo Tanimura
Date of Birth (Age): August 11, 1965 (54 years old)
Reappointment
Owned Shares of the Company:
Tenure (at the conclusion of this Annual
General Meeting of Shareholders):
Attended BOD meetings (FY2019):

5,123 shares
1 year9/9

Reasons for recommending Keizo Tanimura as a candidate for Director
Since being appointed as a Director of the Company in 2019, Keizo Tanimura’s responsibilities haveincluded administration and governance (Human Resources, Legal Affairs, General Affairs, IT, andAudit). His track record includes promoting the creation of a succession planning system (educationand placement) for management of overseas regional headquarters companies and the construction ofa system for human resources and compensation policy, and as the director responsible for governance,
he has also promoted reinforcement of the operating foundation for increasing the effectiveness of theBoard of Directors.
Furthermore, he sufficiently possesses the insight, expertise, and ability required as a Director of theCompany due to his extensive experience in human resource sections at multiple companies, including
as Director of an overseas regional headquarters company. In particular, he has a high level of insightand expertise regarding human resources and governance from a global perspective and ability tounderstand and accommodate diverse cultures.
Accordingly, we deem that Keizo Tanimura is a necessary human resource who is indispensable to thecomposition of the Board of Directors as a member of the Board who has diverse insight, expertise,and capabilities for increasing the effectiveness of the decision-making and oversight functions of theBoard of Directors, and thus we recommend his reappointment as a Director.
◤ Position and Responsibilities
Position:
Director and Corporate Officer
Responsibilities: Administration and Governance, ESG (G Sector)◤ Career Summary
Apr. 1989
Joined the Company
Apr. 2016
Senior Officer, General Manager of Human Resources Section
Mar. 2017
Corporate Officer, General Manager of Human Resources Section
Sep. 2018
Corporate Officer responsible for Global and Local Talent Management
Mar. 2019
Director, Corporate Officer(to the present)◤ Candidate’s special interests in the Company
There are no special interests between Keizo Tanimura and the Company.

15

Candidate Number

7
Tatsuro Kosaka
Date of Birth (Age): January 18, 1953 (67 years old)
Reappointment Outside Director Independent Director
Owned Shares of the Company:
Tenure (at the conclusion of this Annual
General Meeting of Shareholders):
Attended BOD meetings (FY2019):― shares
4 years
12/12

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

16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 ofobjectively assessing independence thereof, the Company has deemed that he maintains sufficient
independence with no potential for conflict of interests with general shareholders. Moreover, as Tatsuro
Kosaka meets the requirements for independent officers as defined by the Tokyo Stock Exchange, wehave registered him as an independent officer as stipulated by the said Exchange.
Regarding agreements limiting the liability
To enable him to contribute fully in his role as an Outside Director, the Company has 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 ishigher. If his election is approved, the current agreement will be extended.

17Candidate Number

8
Yasushi Shingai
Date of Birth (Age): January 11, 1956 (64 years old)
Reappointment Outside Director Independent Director
Owned Shares of the Company:
Tenure (at the conclusion of this Annual
General Meeting of Shareholders):
Attended BOD meetings (FY2019):― shares
2 years
12/12

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

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

19Candidate Number

9
Christina L. Ahmadjian
Date of Birth (Age): March 5, 1959 (61 years old)
Reappointment Outside Director Independent Director
Owned Shares of the Company:
Tenure (at the conclusion of this Annual
General Meeting of Shareholders):
Attended BOD meetings (FY2019):― shares
1 year9/9

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

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

21

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

22

Candidate for Audit & Supervisory Board Member

Naoko Nishinaka
Date of Birth (Age): August 11, 1965 (54 years old)
New candidate
Owned Shares of the Company:
1,301 shares

Reasons for recommending Naoko Nishinaka as a candidate for Audit & Supervisory Board Member
Naoko Nishinaka sufficiently possesses the insight, expertise, and ability required as an Audit &Supervisory Board Member of the Company due to her deep understanding of the Group’s business,advanced expertise regarding supply chains and quality assurance, and a high level of insight
regarding compliance, risk management and internal audits, which she acquired through her
experience serving in the fields of quality assurance, brewing technology, and beer development,
including responsibility for the Quality Assurance Section at the Company and Group companies.
Accordingly, we deem that Naoko Nishinaka is a necessary human resource for strengthening thecomposition and functions of the Company’s Audit & Supervisory Board, and recommend her
appointment as a new Audit & Supervisory Board Member.
◤ Career Summary
Apr. 1988
Joined the Company
Apr. 2016
Senior Officer of the Company
General Manager of Quality Assurance Department of Asahi Group Foods, Ltd.
Apr. 2017
Senior Officer, General Manager of Quality Assurance Section of the Company
General Manager of Quality Assurance Department of Asahi Professional
Management Co., Ltd.
Mar. 2018
Corporate Officer, General Manager of Quality Assurance Section of the Company
General Manager of Quality Assurance Department of Asahi Professional
Management Co., Ltd.
(to the present)◤ Candidate’s special interests in the Company
There are no special interests between Naoko Nishinaka and the Company.
Notes:
1. The age is as of this Annual General Meeting of Shareholders.
2. Candidate for Audit & Supervisory Board Member Naoko Nishinaka will retire from the positions of Corporate Officer andGeneral Manager of the Quality Assurance Section of the Company and General Manager of the Quality Assurance
Department of Asahi Professional Management Co., Ltd. at the conclusion of this Annual General Meeting of Shareholders.

23[Reference] Criteria for independence of Outside Directors and Outside Audit &Supervisory Board Members
The Company has established standards as set forth below for objectively assessing theindependence of its Outside Directors and Outside Audit & Supervisory Board Members (herein
this section the “Outside Directors/Audit & Supervisory Board Members”) and accordingly
deems that an Outside Director/Audit & Supervisory Board Member lacks sufficient
independence for the Company if any of the following apply, such that he or she is:
1. A party who serves as an executive*1 of the Company or a subsidiary of the Company (herein
this section collectively referred to as the “Group”) or has served as an executive of theGroup in the past;
2. A party for whom the Group is a major business partner*2 (or if the business partner is anincorporated entity, an executive thereof);
3. A party who is a major business partner of the Group*3 (or if the business partner is anincorporated entity, an executive thereof);
4. A consultant, certified public accountant or other accounting professional, or an attorney atlaw or other legal professional who has been paid substantial amounts of money or otherfinancial benefits*4 other than Directors’ and Audit & Supervisory Board Members’
remuneration paid by the Group (or if the party receiving such financial benefits is anincorporated entity, association or other organization, then persons belonging to suchorganization);
5. A certified public accountant who belongs to the auditing firm which serves as the
Independent Accounting Auditor of the Group;
6. A major shareholder*5 of the Group (or if the major shareholder is an incorporated entity, an
executive thereof);
7. An executive of an incorporated entity that is a major shareholder of the Group;
8. An executive of a company which has a relationship involving cross-assumption of office ofOutside Directors/Audit & Supervisory Board Members*6;
9. A party who receives substantial donations*7 from the Group (or if the party receiving such
donations is an incorporated entity, association or other organization, then an executive
thereof);
10. A close relative*9 of a party who falls under any of the above items from 1 to 9 (limited toimportant persons*8, with the exception of item 1);
11. A party who has fallen under any of the above items from 2 to 10 during the past five (5)years;
12. A party who has exceeded the tenure of Outside Directors/Audit & Supervisory Board
Members stipulated by the Company*10; or
13. Notwithstanding the provisions of the respective items above, a party with respect to whomthere are special grounds for deeming there to be potential for conflict of interests withgeneral shareholders.
*1. “Executive” refers to an executive as defined in Item 6, Paragraph 3, Article 2 of the Regulation for Enforcementof the Companies Act, and includes both executive directors and employees, but does not include Audit &Supervisory Board Members.
*2. “Party for whom the Group is a major business partner” refers to a party whose transactions in the most recent
fiscal year amount to 2% or more of the consolidated net sales of the business partner’s group.
*3. “Party who is a major business partner of the Group” refers either to a party whose transactions in the most recent
fiscal year amount to 2% or more of the Company’s consolidated revenue, or a party who loans to the Group an
amount equivalent to 2% or more of the Company’s consolidated total assets as of the end of the most recent
fiscal year.
*4. “Substantial amounts of money or other financial benefits” refers to money and other financial benefits
amounting to 10 million yen or more annually, excluding Directors’ and Audit & Supervisory Board Members’
remuneration, for the most recent fiscal year (if such financial benefits are obtained by an incorporated entity,
association or other organization, it refers to money or other financial benefits amounting to 2% or more of such24

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

25

(Attached Materials)
BUSINESS REPORT
From January 1, 2019 to December 31, 2019
1. Overview of Operations of the Asahi Group(1) Business Progress and Results
During this fiscal year, driven by factors such as solid economic growth in the US with increases
in the number of employees and consumer spending, the overall recovery in the global economy
continued, despite the weak economic growth seen in Asia and Europe. While weak exports continued,
the Japanese economy recovered at a moderate pace with an uptick in consumer spending and otherfactors on the back of the improved employment/income environment.
Under these circumstances, the Asahi Group is working on enhancing its “Glocal Value Creation
Management” based on the “Medium-Term Management Policy” under its group philosophy “Asahi
Group Philosophy.” In the “Medium-Term Management Policy,” the Group has set three key priorities:i) “Strengthening Earnings Power,” ii) “Sophisticating Management Resources,” and iii) “Reinforcing
ESG Initiatives.” Particularly in “Strengthening Earnings Power,” the Group worked on initiatives
such as developing brands with high added value and reforming earnings structures in each businesssegment both in Japan and overseas.
As a result, while the Group increased the value of our mainstay brands and offered new value
proposals to our customers, unseasonable weather during our peak season and more intensecompetition in Japan and, negative effects of exchange rate fluctuations and other factors overseas, inspite of the shift to more premium products centered on Europe, led the Asahi Group to post revenueof ¥2,089,048 million, a year-on-year decrease of 1.5%. Core operating profit*1 decreased by 3.8%
year-on-year to ¥212,971 million, and operating profit fell by 4.9% to ¥201,436 million. Profit
attributable to owners of parent totaled ¥142,207 million, a decrease of 5.9% year-on-year.
Furthermore, excluding the negative effects of exchange rate fluctuations, revenue increased by
0.8% year-on-year and core operating profit decreased by 1.0% year-on-year.*2*1. Core operating profit is the Company’s original indicator of profit, which measures the ordinary business earnings
calculated by deducting cost of sales and selling, general and administrative expenses from revenue.
*2. Foreign currency amounts in 2019 are compared after conversion to the yen equivalent using the 2018 exchange
rate.

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

26

■ Financial and Profit/Loss Indicators of the Asahi Group
93rd term
FY201694th term
FY201795th term
FY2018

1,706,901

2,084,877

2,120,291

Core operating profit

148,486

196,368

221,383

Operating profit

136,889

183,192

211,772

Profit attributable to owners ofparent89,221141,003

151,077

8.0

8.8

10.0

EBITDA*1

205,803285,394

318,463

Basic earnings per share*2

194.75307.78329.80Total assets*3

2,094,332

3,346,822

3,079,315

Total equity

846,105

1,152,748

1,149,647

1,825.57

2,499.62

2,502.67

Revenue

Operating profit ratio

Equity attributable to owners ofparent per share*4
ROE(Profit ratio to equity attributableto owners of parent)
Adjusted profit attributable toowners of parent*5

14.2

13.2

89,221

120,133

150,688

Adjusted earnings per share

194.75262.23328.95Adjusted ROE (Adjusted profit
ratio to equity attributable toowners of parent)*7

11.2

13.7

15.2

*1.
*2.

*3.
*4.

*5.
*6.
*7.

142,207(%)
9.6(million yen)
304,848(yen)
310.44(million yen)
3,140,788(million yen)
1,248,279(yen)
2,720.76
(%)

11.0

*6

96th term
FY2019(current year)(million yen)
2,089,048(million yen)
212,971(million yen)
201,436(million yen)

11.9
(million yen)
142,207(yen)
310.44(%)
13.0

EBITDA is equal to the sum of core operating profit and amortization and depreciation.
Basic earnings per share is calculated based on the average total number of shares outstanding during the term.
The total number of shares outstanding is exclusive of treasury shares. The shares of the Company held by Japan
Trustee Services Bank, Ltd. as trust property for stock compensation are included in the treasury shares to be
deducted in the calculation for the 95th term (FY2018) and subsequent periods.
As acquisition cost allocation was revised following the finalization of the provisional accounting treatment
relating to a business combination carried out in the 93rd term (FY2016), this has been reflected in total assets of
the 93rd term (FY2016).
Equity attributable to owners of parent per share is calculated based on the total number of shares outstanding at
the end of the fiscal year. The total number of shares outstanding is exclusive of treasury shares. The shares of
the Company held by Japan Trustee Services Bank, Ltd. as trust property for stock compensation are included in
the treasury shares to be deducted in the calculation for the 95th term (FY2018) and subsequent periods.
Adjusted profit attributable to owners of parent is profit attributable to owners of parent less a one-time profit orloss on the restructuring of business portfolio (net of tax expenses), etc.
Adjusted earnings per share is calculated based on adjusted profit attributable to owners of parent.
Adjusted ROE is calculated based on adjusted profit attributable to owners of parent divided by total equity
attributable to owners of parent (net of exchange differences on translation of foreign operations, and changes,
etc. of fair value of investment in financial assets measured at fair value through other comprehensive income).

27

■ Overview by Business Segment for 96th Term
Asahi Group Revenue by Business Segment

95th term
FY2018(million yen)

96th term
FY2019(current year)(million yen)

Change inamount(million yen)

Alcoholic Beverages*1

913,387

886,860(26,527)(2.9)

Soft Drinks*1

370,776376,240

5,463

1.5

Foods

115,973

117,645

1,672

1.4

International Operations*1

710,403699,596(10,807)(1.5)

Other Business

109,467

109,191

(276)

(0.3)

Adjustment*2(99,718)(100,485)

(767)

–

2,120,291

2,089,048(31,243)(1.5)

Business Segment

Total

Change inpercentage(%)*1. In line with the business reorganization in the 96th term (FY2019), the Company changed classification for theexport operations of certain companies included in the alcoholic beverages segment to the international operations
segment, while changing the classification of certain companies included in the international operations segmentto the soft drinks segment. The changes have been reflected in the revenue by segment for the 95th term (FY2018).
*2. The adjustment is the elimination amount of intersegment revenue and revenue of the corporate portion not
attributable to any segment.

28

Main products

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

In the alcohol beverages segment, under the theme of “reinforcing core brands and creating new
demand,” we worked to invigorate the entire market by providing products of the highest quality andexpanding drinking opportunities, and worked to propose products aimed at creating new demand.
In beer-type beverages sector, we worked to invigorate the beer market by such means as defining
the brand slogan of “Asahi Super Dry” as “THE JAPAN BRAND” and enhancing our advertisingpromotions, and releasing products specially designed to promote the Tokyo 2020 Olympic andParalympic Games*2. Furthermore, to expand demand among the younger generation, we enhanced
our initiatives including launch of sales of “Asahi Super Dry The Cool,” which proposes new
consumption opportunities at bars and restaurants. In new genres, we enhanced our sales promotion
activities of “Clear Asahi” brand for which we improved the malty flavor and pleasant aroma. We also
launched sales of “Asahi Gokujo <Kireaji>,” realizing a taste with a clear and sharp finish, and withsatisfaction created by 100% barley*3, working to enhance our presence in the market.
Aside from beer-type beverages, in RTD beverages, in addition to launching sales of“WILKINSON Dry Seven” and “WILKINSON High-ball,” characterized by the freshness of strong
carbonation, in whisky and other spirits, we enhanced our consumption proposals in various scenes
for our core brand “Black Nikka.” We also worked to enhance and develop our mainstay brands ineach category, including activities aimed at creating new demand for “Asahi DRY ZERO” in thealcohol-taste beverages sector.
As a result of these efforts, despite increased sales for alcohol beverages other than beer-type
beverages such as RTD beverages and whisky and other spirits, revenue from the alcoholic beverages
segment decreased by 2.9% year-on-year to ¥886,860 million due to lower-than-previous-year sales
volumes for beer and happoshu, reflecting the contraction in the market and other factors.
Core operating profit decreased by 3.6% year-on-year to ¥105,543 million mainly due to the lower
revenue which outweighed our efforts such as reforming our earnings structure by reducing
manufacturing costs and introducing zero-based budgeting (ZBB) (Operating profit stood at ¥102,957
million, representing a year-on-year decrease of 3.0%).
*1. RTD stands for “Ready To Drink,” which refers to a type of beverage sold in a prepared form and ready for
consumption, such as canned chuhai.
*2. Asahi Breweries, Ltd. is a Gold Partner for the Tokyo 2020 Olympic and Paralympic Games for beer and wine.
*3. Uses malt, barley, and spirits (barley). Excludes hops usage volume.

29

Main products

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

In the soft drinks segment, we worked to reform our earnings structure by constructing new
foundations for growth through concentrating the allocation of management resources on mainstay
brands and reinforcing high-added-value products in the health function domain, etc. In addition, we
also worked to reform our earnings structure by constructing new foundations for growth by building
optimal production and logistics systems.
In our mainstay brands, for our “MITSUYA” brand, we enhanced sales of our “Tokusan
MITSUYA” series, which uses selected fruits native to regions throughout Japan. In our“WILKINSON” brand, we proactively advertised and improved our product lineup. In our “CALPIS”
brand, which welcomed its 100th anniversary, in addition to launching sales of the limited-edition“Takumi no CALPIS,” we also proactively developed new initiatives including the “Hito wo omou
kinenbi ACTION!” campaign to support various anniversaries, and the “Hakko BLEND PROJECT”
to communicate the appeal of fermented foods, working to enhance our brand value.
For the field of the health function domain, we enhanced initiatives in high-added-value products
across our brands such as “WONDA” and “CALPIS” by such means as launching sales of our“Hataraku Atamani” series, foods with function claims that incorporates lactononadecapeptide,created from our cognitive function research of “CALPIS fermented milk.”
Accordingly, despite lower-than-previous-year results for the “MITSUYA” and “CALPIS”
mainly due to unseasonable weather during our peak season, revenue from the soft drinks segment
increased by 1.5% year-on-year to ¥376,240 million due to such factors as strong sales of the“WILKINSON” brand, which enjoyed continued growth in the no-sugar carbonated beverage market,
and of high-added-value products in the health function domain.
Core operating profit decreased by 10.8% year-on-year to ¥33,239 million. This was mainly due
to increasing manufacturing costs from a decline in the operational efficiency of our factories, andproactive investment in advertising and sales promotion costs to invigorate the market with theunseasonable weather during our peak season (Operating profit stood at ¥30,576 million, representing
a year-on-year decrease of 11.9%).

30

Main products

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

In the foods segment, we sought to solidify our foundations for growth. Initiatives to this end
included concentrating management resources on mainstay brands and categories to improve ourmarket position and constructing optimal production and logistics systems to boost profitability.
For the tablet-type confectionary “MINTIA,” in addition to renewing our core products, we
worked to expand our user base by such means as launching sales of “MINTIA Breeze Clear Plus,”
combining the deliciousness of mints with a clean and clear taste that lasts from start to finish.
In the category of dietary supplements, for “Dear-Natura,” we worked to increase its brandstrength by such means as proactively engaging in sales promotion activities centered on the coreproduct and expanding its product lineup.
In the baby foods sector, we proposed new value by launching the “WAKODO GLOBAL” series
which supports the development of the sense of taste by allowing 30 different ingredients to beexperienced during the weaning period.
In the freeze-dried foods sector, we worked to further elevate our market position by such means
as launching sales of the new miso soup series “Juppinmoku-no-Ippai,” which combines 8 colorful
ingredients and 2 aromatic ingredients, and by such means as opening 2 new antenna shops.
As a result of the above, revenue from the foods segment increased by 1.4% year-on-year to¥117,645 million. This was mainly due to strong sales for core brands such as “MINTIA” and “DearNatura,” as well as proposals for new value using the strength of our baby food and freeze-dried foodproducts.
Core operating profit increased by 5.3% year-on-year to ¥13,013 million, by mainly virtue ofincreased revenue, the streamlining of fixed costs in general, and improvement in product categorycomposition (Operating profit stood at ¥12,622 million, representing a year-on-year increase of 7.3%).

31

Beer, Low-alcohol beverages, Carbonated drinks, Mineral water, Sport drinks,
Condensed milk, Fruit drinks, Coffee
In the international operations segment, the Group worked to further expand the foundation for growththrough initiatives that included enhancing the brand strength that forms the core of high-added-value
products in each business segment and creating synergies through cross-regional offerings.
In the Europe business segment, in Western Europe, the Group promoted premiumization centered on“Peroni Nastro Azzurro” and “Asahi Super Dry.” The Group also enhanced the foundation for growth bysuch means as enhancing its brand portfolio centered on high-added-value products by offering “London
Pride,” a mainstay product of the UK’s “The Fuller’s Beer Company Limited,” which it acquired in April.
In Central and Eastern Europe, the Group worked to strengthen its marketing activities around its mainstay
premium brands including the Czech “Pilsner Urquell,” Polish “Lech,” etc. In addition to working toincrease its brand value through a renewal of the Polish “Tyskie” and other initiatives, the Group worked
to promote premiumization in each country and to develop new growth drivers through initiatives including
strengthening our offerings of beer-taste beverages.
In the Oceania business segment, as to the soft drinks sector, the Group proactively developed its nosugar products centered on the carbonated drink category, its premium products and others. As for thealcohol beverages sector, it boosted its marketing activities for premium beers centered on “Asahi Super
Dry” and “Peroni Nastro Azzurro” and worked to increase its brand value.
In the Southeast Asia business segment, in Malaysia, amid a trend of health consciousness due tofactors that included the introduction of taxes on beverages with added sugar, we boosted our offerings ofhealth function products with higher added value.
In the China business segment, we worked to boost our presence in the premium beer market byenhancing sales of “Asahi Super Dry” and “Peroni Nastro Azzurro” and “Pilsner Urquell.”
As a result of the above, the international operations segment posted revenue of ¥699,596 million, adecrease of 1.5% year-on-year. While the Europe business segment and the Oceania business segment werestrong due to the promotion of premiumization and the expanded offerings of high-added-value products,
this was offset by the negative effects of yen appreciation in each region, the transition of a portion of a
Chinese operating subsidiary to a company accounted for using the equity method, a decrease in sales
resulting from the effects of a boycott in South Korea, and other factors.
Core operating profit increased by 1.8% year-on-year to ¥102,448 million by virtue of the increased
profit from the Europe business segment and the Oceania business segment, which remained strong, despite
factors that acted to reduce profit including yen appreciation and reduced revenue from the South Korea
business segment (Operating profit stood at ¥76,118 million, representing a year-on-year decrease of 1.6%).
Excluding the negative effects of exchange rate fluctuations, revenue rose by 5.4% year-on-year andcore operating profit rose by 9.1% year-on-year.*
Main products* Revenue and core operating profit are compared between the previous and current terms after foreign currency
amounts in 2019 are converted to the yen using the 2018 exchange rate.

32

Main businesses

Cargo transportation, Production and Distribution of health foods and feedstuffs

In the other business segments, revenue decreased by 0.3% year-on-year to ¥109,191 million
mainly due to a decrease in sales of health foods.
Core operating profit decreased 10.3% year-on-year to ¥2,267 million due to increased fixed costs
such as personnel costs (Operating profit stood at ¥1,910 million representing a year-on-year decreaseof 17.5%).
Notes to (1) Business Progress and Results:
1.
From the current fiscal year, in accordance with changes in the disclosure methods, the amounts of IFRS
adjustments are reflected in the core operating profit and operating profit by segment for the 95th term (FY2018).
2.
The share of revenue by segment is calculated by dividing the revenue of each segment by the consolidated total
revenue including the adjustment amount (¥100,485 million). Accordingly, the total share of revenue amounts to104.8%.

(2) Status of Capital Expenditures
Consolidated capital expenditures in this year totaled ¥108,012 million, the segment breakdownof which is as follows. A large portion of the capital expenditures represented investments made forthe purpose of enhancing production capacity and efficiency.
Amount of capital expenditure(million yen)

Business segment
Alcoholic Beverages

23,999

Soft Drinks

21,452

Foods

5,589

International Operations

48,252Other Business

4,531

Company-wide (common)

4,186
108,012Total(3) Financing Activities
The Company financed the capital requirements including capital expenditures detailed in item
(2) above through loans from financial institutions and the issuance of commercial papers.
Funds required for companies’ business segments of the Asahi Group are primarily sourced by
the Company.

33

(4) Status of Principal Lenders(As of December 31, 2019)
Outstanding balance(million yen)

LenderSumitomo Mitsui Banking Corporation

127,081Mizuho Bank, Ltd.

46,794

Sumitomo Mitsui Trust Bank, Limited

31,400

The Norinchukin Bank

31,400MUFG Bank, Ltd.

30,905(5) Status of Major Establishments and Principal Subsidiaries(As of December 31, 2019)1) Asahi Group Holdings, Ltd.
(Head office)23-1, Azumabashi 1-chome, Sumida-ku, Tokyo
2)

Subsidiaries
Company nameLocation ofhead office

Issued capital(million yen)

Shareholdings(%)

Main operations

Asahi Breweries,
Ltd.

Sumida-ku,
Tokyo

20,000100.0

Production and marketing of
alcoholic beverages

Asahi Soft Drinks
Co., Ltd.

Sumida-ku,
Tokyo

11,081

100.0

Production and marketing of softdrinksAsahi Group Foods,
Ltd.

Shibuya-ku,
Tokyo

5,000

100.0

Production and marketing of foods

Asahi Europe Ltd

Surrey,the United
Kingdom

290,994

100.0

Overseeing alcoholic beverages
operations in Western Europe

Asahi Breweries
Europe Ltd

Surrey,the United
Kingdom

100.0

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

Victoria,
Australia

100.0

Overseeing soft drinks andalcoholic beverages operations in
Oceania100.0

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

Asahi Beer (China) Shanghai,
Investment Co., Ltd. China(EUR 2,431,546 thousand)

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

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

9,996(CNY 737,487 thousand)Asahi Professional
Sumida-ku,
50
Contracting of clerical work
Management Co.,
100.0
Tokyo
Ltd.
Notes:
1.
There were 148 consolidated subsidiaries of the Company as of the end of this year, including those listed above.
There were 24 companies accounted for using equity method.
2.
There were no wholly owned specified subsidiaries of the Company as of the end of this year.
3.
Asahi Europe Ltd was renamed Asahi International Ltd effective January 1, 2020.

(6) Significant Developments such as Corporate Reorganization
1)

The Company completed the acquisition of all the issued shares of 4 companies including The
Fuller’s Beer Company Limited through Asahi Europe Ltd on April 27, 2019.

2)

The Company agreed to acquire 123 companies including CUB Pty Ltd with Anheuser-BuschInBev SA/NV and concluded a sale and purchase agreement on July 19, 2019.

34

(7) Employees
Number of
employees

Business segment(As of December 31, 2019)
Increase (decrease) fromthe end of the previous term

Alcoholic Beverages

5,693

(267)

Soft Drinks

3,529

112

Foods

1,289

(14)

International Operations

15,677

1,314

Other Business

2,446

81

693

46

29,327

1,272

Company-wide (common)
Total(8) Progress in the “Medium-Term Management Policy” Guidelines

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

Guidelines for next 3 years out

Revenue¥2,084.9 billion

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

Core Operating Profit¥196.4 billion

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

EPS (adjusted *)¥262.2

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

ROE (adjusted*)

13.7%

 Maintain 13% or above* “After adjustment” refers to figures that exclude one-time extraordinary factors such as restructuring of business portfolio andexchange rate fluctuations.
Note: The amounts for FY2017 results have been rounded to the representative unit.

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

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

Debt Reduction

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

Shareholder Returns

 Stable dividend increases with the aim of a dividend payout ratio*2 of 35% (- FY2021)(Aimed at a dividend payout ratio of 40% in the future)*1. Net debt / EBITDA (EBITDA net debt equity ratio) = (interest-bearing debt - cash) / EBITDA*2. Dividend payout ratio is calculated as profit attributable to owners of parent less a one-time profit or loss on the restructuring ofbusiness portfolio (net of tax expenses), etc.

In terms of progress in the “Key Performance Indicator Guidelines” set out in the “Medium-Term
Management Policy,” core operating profit decreased mainly due to the effects of yen appreciation
and unseasonable weather during our peak season during FY2019, leading CAGR (compound annual
growth rate) to be 4.1% and resulting in progress falling below the guidelines (progress was in linewith the guidelines when excluding the effects of exchange rate fluctuations). The EPS (adjusted)
CAGR (compound annual growth rate) was 8.8%, and ROE (adjusted) was 13.0%, each progressing
in line with the guidelines.

35

In terms of progress in our “Financial and Cash Flow Guidelines,” regarding cash flow, while profit
before tax fell due to a decline in core operating profit in FY2019, our efforts that included improving
asset efficiency allowed us to create ¥173.0 billion in free cash flows, progressing in line with theguidelines. Regarding investment for growth and debt reduction, applying free cash flows to debt
reduction resulted in net debt/EBTIDA of 2.93 times, progressing in line with the guidelines.
Regarding shareholder returns, we have progressively raised returns toward achieving the guidelines(stable dividend increases with the aim of a dividend payout ratio of 35% by FY2021) and are planninga dividend payout ratio of 32.2% in the current fiscal year (FY2019).
Note: The Company reached an agreement with Anheuser-Busch InBev SA/NV on the beer and cider business(hereinafter, the “CUB”) acquisition (hereinafter, the Transaction”), owned by the Anheuser-Busch InBev SA/NV
in Australia and concluded a sale and purchase agreement on July 19, 2019. However, the Transaction is premisedon the fulfilment of the conditions precedent to execute the transaction, including the approval of the relevant
Australian government organizations such as the Australian Competition and Consumer Commission. As such,at the time of the writing of this Business Report, the execution of the closing of the Transaction is planned forthe first quarter of FY2020. Furthermore, related to the Transcation, although the Company evaluates a financing
plan including financing, the contents of the above “Medium-Term Management Policy” guidelines do notconsider the effects of the acquisition of the CUB or financing thereof. After the closing of the Transaction is
executed, the Company plans to consider these effects and revise the “Medium-Term Management Policy.”
Furthermore, in the event the closing of the Transaction is delayed, and effective financial policy cannot be
implemented, the forecasted values for ROE (adjusted) for the 97th term (FY2020) described in the “MediumTerm Management Policy” will fall below the guidelines, meaning we will work to achieve the guidelines
through our management efforts.

36

(9)

Management Perspectives

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

37

Medium-Term Management Policy
While providing “Key Performance Indicator Guidelines” and “Financial and Cash Flow
Guidelines” for the coming 3 years or so, the “Medium-Term Management Policy,” revised basedon the AGP, sets the following three key priorities. Under this policy, the Group enhances “Glocal
Value Creation Management.”
A “Strengthening Earnings Power” by further enhancing added value and earnings structurereform Enhancing high-added-value brands in Japan and overseas and achieving revenue growththrough expanded cross-selling initiatives*1
 Reforming the earnings structure through the introduction of zero-based budgeting andoptimization of procurement systems(Target impact of earnings structure reform including zero-based budgeting [total for 2019–2021]: over ¥30.0 billion)Enhancing business management through ROIC*2 and improving asset and capital efficiency
through cash flow maximization
B “Sophisticating Management Resources” aimed at expanding new foundations for growthReforming the corporate culture to realize disruptive innovation*3 and investing in intangible
assets (R&D, human resources, etc.)
 Promoting bolt-on M&As complementing existing businesses and expanding alliance withcompetitors and companies in other industries
 Implementing business structure reform by leveraging digital transformation and advancing
our business model
C “Reinforcing ESG Initiatives” supporting our sustainable value creation process Formulating “Asahi Group Environmental Vision 2050” and improving our sustainable
activities through value creation that leverages the Group’s unique strengths
 Promoting glocal talent management and diversity and developing a human rights management
system Enhancing risk management systems (Enterprise Risk Management) and reforming corporate
governance systems supporting Group and global growth
Going forward, the Company will deepen dialogue with our stakeholders and aim to achievesustainable growth and enhance its corporate value over the medium- to long-term by positioning
these 3 key priorities as a stakeholder engagement agenda.
*1 Policies to sell the Group’s products available in individual countries in all other areas in which we operate
through establishments.
*2 Return on invested capital: An indicator obtained by dividing after-tax core operating profit by invested capital.
*3 Disrupting existing markets and creating new markets using digital technology.

Policy for 97th Term (FY 2020)
In the fiscal year 2020, based on the “Medium-Term Management Policy,” we will continue topromote “Glocal Value Creation Management.”
In terms of “Strengthening Earnings Power,” in Japan, we aim to increase the value of ourmainstay brands such as “Asahi Super Dry” and create new markets while continuing to pursue thereform of earnings structures by building optimal production and logistics systems. Overseas, wewill work to both further enhance our global premium brands and to expand the foundation forgrowth in local markets, by restructuring the international beer business and by transition to systems
capable of focusing on both global and local markets, etc.
In terms of “Sophisticating Management Resources,” we will complete the acquisition of
Anheuser-Busch InBev SA/NV’s Australian beer and cider business that was decided in July 2019,
promoting the establishment of a global business platform with 3 core pillars in Japan, Europe, andOceania. Moreover, we promote the reform of corporate culture for realizing innovation anddisruption, and investment in intangible assets (R&D, human resources and others).
In terms of “Reinforcing ESG Initiatives,” in addition to initiatives for environmental, human38rights, and alcohol-related issues, we aim to create a sustainable society with value creation using
the Asahi Group’s strengths. Furthermore, through enterprise risk management (ERM) and theeffective management of risk appetite*, we are promoting appropriate risk management and risktaking.
With these efforts, the Group projects revenue to be ¥2,135,000 million, core operating profit
to be ¥218,500 million, operating profit to be ¥203,500 million, profit attributable to owners ofparent to be ¥143,000 million, and adjusted profit attributable to owners of parent to be ¥143,000
million, for the 97th fiscal year (FY2020).
* Details on enterprise risk management (ERM) and risk appetite are provided on pages 49 - 50.
Note: The Company reached an agreement with Anheuser-Busch InBev SA/NV on the acquisition (hereinafter, the“Transaction”) of the beer and cider business (hereinafter, the “CUB”) owned by the Anheuser-Busch InBev
SA/NV in Australia and concluded a sale and purchase agreement on July 19, 2019. However, the Transaction
is premised on the fulfilment of conditions precedent to execute the transaction, including the approval of therelevant Australian government organizations such as the Australian Competition and Consumer Commission.
As such, at the time of the writing of this Business Report, the execution of the closing of the Transaction isplanned for the first quarter of FY2020. Furthermore, related to the Transaction, while a financing plan
including equity finance is under consideration, the contents of the above consolidated earnings forecast forthe 97th term (FY2020) do not consider the effects of the Transaction or financing thereof. After the closingof the Transaction is executed, the Company plans to consider these effects and revise its earnings forecast
for the current fiscal year.

The Group cordially requests shareholders’ continuing encouragement and support.

39

Reference

Acquisition of the Australian Beer and Cider Business

In July 2019, the Company agreed with Anheuser-Busch InBev SA/NV to acquire the Australianbeer and cider business owned by Anheuser-Busch InBev SA/NV (hereinafter, the “CUB”), and thecompanies concluded a sale and purchase agreement.
CUB has a range of products such as “Carlton” and “Great Northern” which are leading brands
in Australian beer business, as well as superior marketing, product development capabilities and highprofitability.
Since 2009, the Company has been promoting business acquisition in Australia, which has
enjoyed sustainable economic growth, and in addition to the non-alcoholic beverage category, hasbeen developing global premium brands such as “Asahi Super Dry,” “Peroni Nastro Azzurro,”“Vodka Cruiser” and “Woodstock.”
Going forward, in addition to these initiatives, we aim for further growth in the Australianmarket by developing products such as “Carlton” and “Great Northern,” part of CUB, which hasstrong brands. The acquisition also further enhances the Company’s management resources bybringing with it a wealth of glocal talent management.
After the conclusion of this transaction, the EBITDA of the Oceania business segment, which
includes the Company’s existing businesses, will increase to around ¥100.0 billion, creating a third
core pillar alongside the Japanese business with ¥200.0 billion of EBITDA and the European
business with around ¥100.0 billion of EBITDA. The Company aims to deliver sustained growth andenhanced corporate value in the medium- to long-term as a “Glocal Value Creator” by integrating
the strengths such as the brands and human resources that it has developed in each of its 3 core pillars.
* The Transaction is premised on the fulfilment of the conditions precedent to execute the transaction, including theapproval of the relevant Australian government organizations such as the Australian Competition and Consumer
Commission.

40

Reference

ESG initiatives of the Asahi Group

1 ESG of the Asahi Group
Based on its group philosophy, the “Asahi Group Philosophy,” stipulated in January 2019, the Asahi
Group has listed “Reinforcing ESG Initiatives” as one key priority in the “Medium-Term Management
Policy” revised in 2019. Furthermore, as our business foundation has become more global, the social
issues faced by the Group are becoming more complex and varied than ever before.
Amid these conditions, the Asahi Group is strongly focused on the “environment,” “human rights,”
and “responsible drinking” to realize sustainable growth and improvement in corporate value over the
medium- to long-term, and to pursue the possibility of a sustainable society.
We are advancing concrete initiatives based on the “Asahi Group Environmental Vision 2050”(image below), “The Asahi Group Human Rights Principles,” and the “Asahi Group Responsible
Drinking Principles.”Asahi Group Environmental Vision 2050
Passing the Gifts of Nature to Future Generations with the “Neutral and Positive” Concept
By 2050

Leverage the Group’s proprietary
technologies to create greater environmental
value in society

Aim for zero environmental burden
in our business activities

1.
Response to climatechange2.

3.

4.
Process innovation(agricultural raw materials,
packaging, water)

Use of microbe andfermentation
technologies

Sustainable use ofresources

Aim to achieve zeroCO2 emissions

Leverage strengths
to create newenvironmental value

Reduce businessrisks

Zero environmental burden (neutral)

Creategroundbreaking
technologies andframeworks

Create environmental value (positive)

2 Initiatives for the Environment
1)

Addressing climate change
Toward our goals of achieving a 30% reduction in CO2 emissions by 2030 (compared to 2015)
and “Asahi Carbon Zero” (zero CO2 emissions) by 2050, the Asahi Group is proactively advancing
initiatives for climate change such as making further use of renewable energy.
Furthermore, in May 2019, the Group agreed to support the recommendations of the “Task Forceon Climate-related Financial Disclosures (TCFD).” We are proactively working on analyzing andaddressing the business risks and opportunities caused by climate change, and going forward, weplan to disclose information in our website, etc.

2)

Addressing the marine plastic issue
To address the marine plastic issue, which has become a global issue due to marine pollution andthe effects on the ecosystem, the Asahi Group aims to create sustainable containers and packaging
and to advance a range of initiatives in Japan and overseas.
In Japan, Asahi Soft Drinks Co., Ltd. has established its “Packaging 2030” initiatives. It is
working to use recycled PET and environmentally friendly materials, to promote the reduction ofplastic usage, to develop new containers premised on environmental awareness, to develop “labelless bottles,” and to sell “Calpis Water” packaged in PET bottles using 20% recycled materials.
Asahi Beverages Pty Ltd, our Australian soft drink subsidiary, sells “Cool Ridge” mineral waterbottled in 100%-recycled PET bottles.

Label-less bottles

100%-recycled PET bottles
41

3)

Addressing sustainable water resources
The Asahi Group takes steps to realize
sustainable use of water resources, such that
include drawing up Group targets for water usage
on a per production unit basis at its respective
factories, carrying out water risk surveys to help
ensure sustainability of water resources, andextending water resource conservation activities
of its domestic breweries.
Moreover, the Asahi Group’s individual
initiatives will involve enhancing groundwater
recharge capabilities (the forest’s capacity to “Asahi Forest,” broadly located in Shobara City and
Miyoshi City, Hiroshima Prefecture (2,165ha).
capture and store water) at our company-owned
Asahi Forest where we practice sustainable forest management.
Through such initiatives, we aim to attain water neutrality* at our domestic breweries by 2025.

* Water neutrality refers to returning the same amount of water as used amount by such means as combining
reduction of water use and water replenishment through conservation of water resources.

3 Initiatives for human rights
Having drawn up “The Asahi Group
Human Rights Principles” which are
based on the United Nations “Guiding
Principles on Business and Human
Rights,” the Asahi Group will contributeto the realization of social sustainability
on a global basis through implementationof its commitment to human rights.
In 2019, with regard to human rights
management, we promoted initiatives
such as by holding a stakeholder dialogue
between officers and experts, reflecting
advice from the experts on theestablishment for the human rights
management
systemandtheimplementation of human rights due
diligence.

The Asahi Group Human Rights Principles
The Asahi Group Human Rights Principles are based on the Asahi Group Philosophy and the Asahi Group
Code of Conduct. The principles represent the Group’s foremost policy on human rights and will form thefoundation for all of the Asahi Group’s business activities.
Outline of the Asahi Group Human Rights Principles
Approach to respecting
human rights

Commitment to respecting human rights and position of policies, targets(directors, employees, business partners), awareness of scope of impact,
responsibilities of the Board of Directors, adherence to international rules,
and policies related to discrepancies between laws

Carrying out human rights
due diligence

Implementation of human rights due diligence, prevention, mitigation, andcorrection of adverse impacts, and dialogue with stakeholders

Human rights-related issues Discrimination, harassment, forced labor and child labor, freedom of
association and right to collective bargaining, occupational safety andfor the Asahi Group’s
health, working hours and wages, impact on supply chain, impact on local
business activities
communities
Mechanisms for handlingcomplaints

Contact point and response structure inside and outside the Company

Education and training

Target: Officers and employees
Language: Language spoken in each country and region of operations

Monitoring and reporting

Tracking of progress and disclosure via the Company’s corporate website(Established May 8, 2019)

4 Initiatives for responsible drinking
The Asahi Group promotes the initiatives for responsible drinking, under its “Asahi Group
Responsible Drinking Principles” enacted in January 2019, through supporting the “Global Strategy
to Reduce the Harmful Use of Alcohol” adopted by the World Health Organization (WHO).
In the respective geographic regions where we engage in the alcoholic beverages operations, we
carry out initiatives dedicated to eliminating harmful alcohol consumption through our cooperation
with the International Alliance for Responsible Drinking (IARD), a global nonprofit organization towhich the world’s leading alcoholic beverage companies belong, and accordingly fulfill our
responsibilities as a corporate group that manufactures and sells alcoholic beverages.
(Other initiatives of the Asahi Group)

Distribution of awarenessraising tools for preventionof alcohol consumption forelementary school students
in Japan

42

Campaign to prevent
alcohol consumption
by pregnant women in
Romania(1) Basic Concept
With the belief that “growth-oriented governance” by which to make transparent, fair, swift andbold decisions is indispensable for striving to achieve sustainable growth and increase corporate value
over the medium- to long-term, the Company has established its Corporate Governance Guidelines,
and makes efforts primarily in the following areas:
WEB Corporate Governance Guidelines
https://www.asahigroup-holdings.com/en/csr/gov/internal/pdf/190516_guidelines_en.pdf
1) Ensuring rights of and equality among shareholders
Recognizing that “a shareholder is equal in accordance with his/her equity interest,” theCompany strives to ensure substantial equality of shareholders and conduct appropriate
information disclosure by posting various information for shareholders and/or individual
investors with updates, as needed, on its website. Information disclosure is also ensured foroverseas investors using the English website, as well as the preparation of the English-version
Convocation Notice of the General Meeting of Shareholders in view of the convenience of
exercising of shareholders’ rights by foreign shareholders. Furthermore, the Company has
streamlined a system that allows for employees assigned to assist the Audit & Supervisory Board,
who are not subject to directives or orders from Directors or employees, under the control of the
Audit & Supervisory Board, so that Audit & Supervisory Board Members can handle claims
from any minority shareholders against the Company or any Director and Audit & Supervisory
Board Member, independently from the Board of Directors and management to substantiallyensure the rights of minority shareholders.
2) Appropriate Collaboration with Stakeholders
The Company has identified corporate value not only as financial value, but also as asummation of financial value and social value that is closely related to each other, and has set
the following as its action guidelines for enhancing corporate value, by working with its
customers, employees, society, partners, shareholders, and all other stakeholders, in its groupphilosophy, the Asahi Group Philosophy.
Customers: Win customer satisfaction with products and services that exceed expectations
Employees:
Foster a corporate culture that promotes individual and company growthSociety:
Contribute to a sustainable society through our business
Partners:
Build relationships that promote mutual growth
Shareholders: Increase our share value through sustainable profit growth and shareholder returns3) Ensuring Proper Information Disclosure and Transparency Thereof
The Company formulated the “Disclosure Policy” and proactively addresses the voluntary
disclosure of information. The Company strives to provide well-balanced information disclosure
between financial information, such as accounting, and non-financial information, such as
management strategies, risks and governance, by preparing the Integrated Report, in addition to
the statutory disclosure, timely disclosure and other information disclosures on the website.

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







2007

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

Number of Directors was reduced from 40 to 10.
Nomination Committee and Compensation Committee were established.
Corporate Strategy Board was established.
Corporate Officer System was introduced.
Number of Outside Directors was increased from 1 to 3.

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

2013

 Takeover defense measures were abolished.

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

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

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

2019 The Company transitioned to a structure in which the Chairman and Director does not serve
concurrently as a representative director and serves exclusively as the chairman of the Board of
Directors.
 Standards and guidelines were formulated for the resignation of the CEO, the appointment ofrepresentative directors, and terms of office for officers.
 The number of Outside Directors on the Board of Directors was raised, now constituting 1/3 ormore of total Board members.
 A compensation plan to incentivize internal Directors to further work towards sustainable growthand enhancement of corporate value over the medium to long term was introduced.

44

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

(3) Structure of the Board of Directors
In order to ensure balance and diversity in terms of the knowledge, experience and ability of theentire board necessary for the sustainable growth and the increase of corporate value of the Company
over the medium- to long-term, the Company shall make the Board of Directors composed of persons
suitably qualified to be Directors of the Company who possess a wealth experience, extensive
knowledge and high-level expertise required by the Company, and who reflect the requirements forofficers that were introduced from the group philosophy of the Asahi Group, “Asahi Group Philosophy,”
the action guidelines, and the management strategies. In addition, the Outside Directors shall bepersons such as corporate managers and/or experts who meet the Company’s requirements forindependent officers and for them to make up at least 1/3 of the number of Directors in the Board of
Directors.

45

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

(5) Roles and compositions of the advisory bodies
The roles and compositions of the advisory committees and deliberative bodies are as described
below:
1) Nomination Committee
Nomination Committee provides reports on its findings and views about candidates, etc. for
Directors, Audit & Supervisory Board Members and Corporate Officers in response to the inquiries
referred from the Board of Directors. The Committee consists of 2 Outside Directors, 1 Outside
Audit & Supervisory Board Member, and 2 internal Directors, and an Outside Director is cooperatively appointed as its chairperson.
The Committee held 8 meetings during fiscal 2019, and provided reports on its findings and views,
primarily about personnel affairs of officers, based on the succession plan and its planning, andrepresentatives of principal subsidiaries.
2) Compensation Committee
Compensation Committee provides reports on its findings and views about the remuneration
system and amount of remuneration for Directors and Corporate Officers in response to the inquiries
referred from the Board of Directors. The Committee consists of 2 Outside Directors, 1 Outside
Audit & Supervisory Board Member, and 2 internal Directors, and an Outside Director is cooperatively appointed as its chairperson.
The Committee held a total of 9 meetings during fiscal 2019, and provided reports on its findings
and views primarily about the new remuneration plan for officers (revision of the medium-termbonus plan and stock compensation plan, formulation of benchmarks for variable remuneration),
individual evaluations of officers and bonus amounts determined on that basis, and disclosure of
officers’ remunerations.
Nomination Committee
Director
OutsideInternal◎ Tatsuro Kosaka
Yasushi Shingai

Compensation Committee◎ Yasushi Shingai
Christina L. Ahmadjian

Audit & Supervisory
Board Member

Katsutoshi Saito

Yumiko Waseda

Director

Naoki Izumiya
Akiyoshi Koji

Atsushi Katsuki
Keizo Tanimura

Note: ◎ denotes committee chairpersons

3) Information Disclosure Committee
Information Disclosure Committee is responsible for centrally managing and controlling
corporate information disclosure, and provides reports on its findings and views in response to the46inquiries referred from the President and Representative Director from the perspective of fair,
expeditious and wide-ranging information disclosure. The Committee consists of executive directors
and Corporate Officers excluding the President and Representative Director, and the Director in
charge of public relations serves as its chairperson.
The Committee held a total of 8 meetings during fiscal 2019, analyzed the contents of relevant
information, and provided reports on its findings and views about the need or otherwise, contents,
methods, etc. of information disclosure in light of the Timely Disclosure Rules, etc. of the Tokyo
Stock Exchange.
4) Risk Management Committee
The Risk Management Committee provides reports on its findings and views on the promotion
and supervision of enterprise risk management (ERM) for the overall Asahi Group, in response toinquiries referred from the President and Representative Director. The Committee consists of the
President and Representative Director and other executive directors, as well as executive officers
who are appointed by the committee chairperson, and the President and Representative Director
serves as its chairperson. Standing Audit & Supervisory Board Members also attend thisCommittee’s meetings.
The Committee held a total of 6 meetings during fiscal 2019, and provided reports on its findings
and views primarily about identification, evaluation and action plans regarding major risks of theentire Group, the status of implementation in that regard, and risk appetite plans proposed to theBoard of Directors.
5) Compliance Committee
Compliance Committee provides reports on its findings and views on the promotion andsupervision of corporate ethics and compliance for the overall Asahi Group in response to inquiries
referred from the President and Representative Director. The Committee consists of the President
and Representative Director and other executive directors, as well as executive officers who areappointed by the committee chairperson, and the President and Representative Director serves as its
chairperson. Standing Audit & Supervisory Board Members also attend this Committee’s meetings.
The Committee held a total of 7 meetings during fiscal 2019, and provided reports on its findings
and views primarily about compliance promotion plans and the operational status of the whistle
blowing system.
6) Corporate Strategy Board
Corporate Strategy Board provides reports on its findings and views about evaluation of thelegality, objectivity and reasonableness and of substantial matters concerning business execution in
response to the inquiries referred from the President and Representative Director. The Board consistsof the President and Representative Director and other executive directors, Corporate Officers andStanding Audit & Supervisory Board Members, and the President and Representative Director
serves as its chairperson.
The Board held a total of 42 meetings during fiscal 2019, and provided reports on its findings andviews primarily about development of corporate strategies and status of business executions byGroup companies.

47

(6) Evaluation of Effectiveness of Board of Directors and Audit & Supervisory
Board
To contribute to the creation of corporate value over the medium- to long-term, the Board of
Directors analyzes and evaluates the effectiveness of the Board of Directors on an annual basis, anddiscloses the summary of the evaluation results.
As a company with an Audit & Supervisory Board, to contribute to the creation of corporate value
over the medium- to long-term, the Audit & Supervisory Board Members and the Audit & Supervisory
Board shall analyze and evaluate the effectiveness of the Audit & Supervisory Board, and disclose thesummary of the evaluation results.
The English-version summary of the evaluation results is posted on the following Company website:
WEB https://www.asahigroup-holdings.com/en/whoweare/governance/policy.html(7)Succession Plan and Training

The Company regards the succession planning involving its CEO and Directors as a matter ofutmost priority, and accordingly draws up a succession plan pertaining to the CEO, Directors andothers, pursuant to requirements demanded of the CEO and Directors as individuals, and thecomposition of the entire Board of Directors. The Board of Directors properly supervises the
succession plan.
Based on the succession plan, the Company makes appointments and assignments according to plan,
engages in coaching of successor candidates, and carries out training, etc. for successors of the next
and subsequent generations. Meanwhile, the Company arranges professional assessments by externalorganizations and makes use of such means as 360-Degree Feedback in-house. The Nomination
Committee regularly monitors and reviews such plans as necessary.
For the Directors and Audit & Supervisory Board Members, the Company provides training
required for their roles and responsibilities on a regular basis. The Company provides Outside
Directors/Audit & Supervisory Board Members with information relating to the overview of the Asahi
Group including its businesses, financial affairs and organizations, and implements measures, such as
office visits, to facilitate their understanding of the Group and human resources as needed.

(8)

Policy of Reducing Cross-Shareholdings

The Company makes it its policy to refrain from the holding of shares when such holdings are
deemed as neither contributing to the sustainable growth of the Company nor increasing its corporate
value over the medium- to long-term. This policy has been adopted out of consideration for our goalof pursuing asset and capital efficiency improvement for the promotion of “Glocal Value Creation
Management” based on the Asahi Group Philosophy in the “Medium-Term Management Policy.”
Cross-shareholdings are regularly reviewed every year by the Board of Directors. In the event thata shareholding is deemed not to contribute to the Company’s sustainable growth or to the increase of
its corporate value over the medium- to long-term, the result of said review shall be disclosed and theCompany, as a shareholder, shall engage in the requisite dialogue with the counterpart entity.
Shareholdings that are deemed not improvable, even after engaging in dialogue, are to be sold in atimely and appropriate manner.
For each target agenda item, the Company appropriately exercises the voting rights attached to thestocks it holds by comprehensively weighing factors such as whether proposals contribute to thesustainable growth of the Company and to the increases in its corporate value over the medium- tolong-term, and whether they contribute to the common interests of the investee’s shareholders.

48Reference

Risk Management Initiatives of the Asahi Group

1 Risk management structure of the Asahi GroupIn January 2019, the Asahi Group introduced enterprise risk management (ERM), coordinatedactivities to direct and control an overall organization with regard to risks for achieving businessobjectives. The Asahi Group effectively and efficiently controls its overall risk that could impede
execution of strategies and achievement of objectives defined in the Medium-Term Management
Policy based on the Asahi Group Philosophy through activities such as identifying and evaluating
critical risks across all areas that include strategy, operations, finance, and compliance, building up
responding plans, and executing and monitoring the plans.
The Company has established the Risk Management Committee to promote ERM, which
consists of the President and Representative Director and other executive directors, as well as
executive officers who are appointed by the President and Representative Director. The President
and Representative Director, as the chairperson of the Risk Management Committee, is responsible
for executing ERM across the entire Group.
The respective companies of the Asahi Group implement ERM on the basis of each business
unit, and report the details of the initiatives to the Risk Management Committee. The Committeemonitors the initiatives, and its members identify and evaluate critical risk across the Group, build
responding plans, and execute and monitor the plans. All such initiatives are reported to the Board of
Directors, which ascertains the effectiveness of ERM by monitoring the initiatives.
The Asahi Group Enterprise Risk Management49

2 The Asahi Group’s risk appetite
The Asahi Group Risk Appetite Statement
The Asahi Group Medium-Term Management Policy seeks to promote “Glocal Value
Creation Management” based on the Asahi Group Philosophy in order to sustainably increase
its corporate value.
In order to achieve the strategic objectives defined in the Policy:•

the Asahi Group achieves organic growth by building high value-added brands, andwith regard to inorganic growth achieved by M&A activities and innovations, iswilling to take commercial risks in a controlled manner that balance the need for arobust financial position whilst creating value growth for shareholders;•the Asahi Group delivers excellent quality products and ensures a safe work
environment for everyone at the Asahi Group, both of which are critical priorities at
the heart of Asahi’s success;•the Asahi Group pursues initiatives to protect the environment and is willing toinnovate to create greater environmental value in society; and•the Asahi Group accepts as little risk of non-compliance with the Asahi Group Codeof Conduct and the Asahi Group Human Rights Principles as possible.

The Asahi Group has developed “The Asahi Group Risk Appetite” to specify risks to be acceptedor to be minimized for achieving objectives of the “Medium-Term Management Policy” while
promoting ERM.
“The Asahi Group Risk Appetite” is a policy related to risk management of the Asahi Group. It
serves as a guideline for engaging in ERM and a guideline for opting whether or not to take risks when
decisions are made. It consists of the “Risk Appetite Statement” which shows the Group’s basic stancetoward risk, and the “Specific Risk Appetite” which shows each stance (appetite) for major categories
of risk that greatly affect business execution, premised on the assumption of practical application. The
Company has developed the Appetite through consideration on its Group strategy, risk culture, risk
profile, and stakeholder expectations. The Appetite is approved by the Board of Directors and isapplied to the entire Group. The Risk Management Committee monitors its implementation andreports its progress to the Board of Directors. Through the initiatives, the Company promotes
appropriate risk takings across the overall Asahi Group.
The Asahi Group Risk Appetite Framework50

3. Systems to Ensure Appropriate Execution of Directors’ Duties in Conformity
With Laws and Regulations and the Articles of Incorporation, and Other
Systems to Ensure Appropriate Business Operations
Overview of the resolution regarding systems to ensure appropriate business
operations
The Board of Directors passed the following resolution with respect to the above-mentioned systems.
To “Deliver on our great taste promise and bring more fun to life” as stipulated in its groupphilosophy, the “Asahi Group Philosophy,” the Company shall: establish, in accordance with the Companies Act and the Regulation for Enforcement of theCompanies Act, the following basic policies (the “Basic Policies”) to improve systems designed
to ensure the appropriate execution of Directors’ duties in conformity with laws and regulations
and the Articles of Incorporation of the Company and its subsidiaries (herein this section the“Group Companies”) and ensure the appropriate business operations of the Group Companies(herein this section the “Internal Control System”);
 recognize that it is the Representative Director(s) who shall assume the ultimate responsibility forthe improvement of the Internal Control System in accordance with this resolution and demand
the Representative Director(s) to cause the Directors and Corporate Officers, through therespective departments and organizations they are in charge of, to develop and fully enforce
individual internal regulations that will be applied to the Company and the entire Asahi Group andare required based on the Basic Policies; and take steps to maintain and enhance the effectiveness of the Internal Control System by reviewing
the Basic Policies and relevant internal regulations that will be applied to the Company or theentire Asahi Group in a timely and appropriate manner in accordance with changes in conditions
and circumstances.

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

2)
3)

4)

5)
6)

7)

In order to promote “Building value together with all our stakeholders” as stipulated in the“Asahi Group Philosophy,” the Company shall establish “The Asahi Group Code of Conduct”
and ensure its Directors, Audit & Supervisory Board Members and employees abide by theseregulations.
The Company shall establish a “Compliance Committee” to oversee compliance of the Asahi
Group based on the “The Asahi Group Ethics/Compliance Policies.”
An officer of the Company in charge shall have authority over compliance within the Asahi
Group. The section in charge of legal affairs shall handle day-to-day compliance and risk
management tasks.
The Company shall assign responsible persons in charge of compliance in the Company and
the Group Companies. The responsible person shall make efforts to prioritize compliance inall aspects of business activities at each Group Company.
The Company shall establish a “Clean Line System” and other systems for employees in Japanand overseas, enabling them to blow the whistle on illicit behavior of others.
The Company shall establish “The Asahi Group Sustainable Procurement Principles &Sourcing and Purchasing Policies” addressing mutual cooperation for fair and equitable deals
and social responsibilities between each Group Company and suppliers and a system thatenables suppliers to blow a whistle on breaches of the Policy as necessary. The Company shallinform and spell out these measures to its suppliers to enable the Company to develop an
Internal Control System in cooperation with its suppliers.
To ensure antisocial forces do not exert any undue influence on the Group, all relevant
information shall be shared within the Asahi Group and the Company shall establish an internal

51

8)

system on the measures. The Company shall also cooperate closely with industry bodies, local
communities, the police and other external specialist organizations in this field.
The operational details of the aforementioned agencies and systems shall be spelled out undera separately prepared set of internal regulations that will be applied to the Company or theentire Asahi Group.

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

2)
3)

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

(3) Regulations and other organizational structures of the Asahi Group to manage
risk of loss
1)
2)

3)

4)

The Company shall position risk management as a core element of its corporate management
in “The Asahi Group Risk Management Policies,” and implement it in a continuous manner.
In addition to having the appropriate sections manage risk in their respective areas, theCompany shall establish a “Risk Management Committee” to identify and evaluate crosssectional material risk for the entire Asahi Group, and design countermeasures accordingly.
With regard to the risk of failing to maintain product quality, as a food and drink manufacturinggroup, the Asahi Group strongly recognizes their social responsibility to consumers to ensure
the safety and security of their products and shall establish sufficient control systems.
In the event of any major accident, disaster, scandal, etc., the Company shall establish an“Emergencies Response Headquarters” chaired by the President and Representative Director.

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

2)

3)

4)

5)

To ensure efficient performance of duties by Directors, the Board of Directors shall divide
duties in a reasonable way to be delegated to respective Directors and shall appoint appropriate
persons as Corporate Officers in charge of respective sections.
The Company shall establish “Delegation of Authority” and “The Asahi Group’s Delegationof Authority” stipulating rules of delegation of power and for a mutual checks-and-balances
mechanism among 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 such means as formulating the Asahi Group’s corporate
strategy and implementing progress management.
To maximize operational efficiency, the Company shall utilize indices that provide an objective
and rational way of measuring its management and control of operations; and it shall employ
a unified system of follow-up and evaluation.
To use funds efficiently, a global cash management system among the Company and the Group
Companies is introduced.

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

All systems required for the Internal Control, including those for risk management, complianceand crisis management system, shall apply comprehensively across the entire Asahi Group. As
the holding company, the Company shall manage the said systems of the Group Companies
while respecting their autonomy, and supporting the development and operation of the Internal
52

2)

3)
4)

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 the evaluationof internal control related to financial reporting of the Group Companies and submit therelevant reports.
Decision-making authority related to business activities of the Group Companies shall be
subject to the document entitled “Asahi Group’s Delegation of Authority.”
Each of the Group Companies will provide reports at the “Corporate Strategy Board” one ormore times each quarter on performance of its operations including risk-related information.

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

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

2)

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

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

2)

3)

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

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

The Group Companies’ Directors, Corporate Auditors, employees or persons receiving reports
from them shall report regularly to the Company’s Audit & Supervisory Board Members on
matters related to the Internal Control System and, shall report on an as-needed basis when asignificant event occurs. When necessary, the Audit & Supervisory Board Members shall beentitled to request reports from the Directors and employees of the Group Companies.

53

2)

3)

4)

The Company’s or the Group Companies’ sections in charge of internal auditing shall report
the results of the Group Companies’ internal audits to the Audit & Supervisory Board Memberof the Company without delay.
The whistle blowing contacts under the Clean Line System shall be the Company’s Audit &Supervisory Board Members, section in charge of general and legal affairs, or external
attorneys at law designated by the Company (“external attorneys at law”), and the information
reported to the Company’s section in charge of general and legal affairs or the external
attorneys at law shall be reported to the Company’s Audit & Supervisory Board Members.
The Company prohibits any party from treating the whistle blower prescribed in the preceding
item and this item in any manner disadvantageous to him/her on the ground of the whistle blow.

(10) Policy on procedures for advance or reimburse expenses incurred inassociation with Audit & Supervisory Board Members’ execution of theirduties, and treatment of other expenses or debts incurred in association withthe execution of their duties
To defray expenses incurred in association with the Audit & Supervisory Board Members’ executionof their duties, the Company shall secure a certain specific amount of budget and shall, in responseto the request of the Audit & Supervisory Board or the Standing Audit & Supervisory Board Members
concerned, advance or reimburse expenses or otherwise treat debts incurred in association with the
Audit & Supervisory Board Members’ execution of their duties.

(11) Other systems ensuring effective auditing by Audit & Supervisory Board
Members
To ensure the effectiveness of auditing activities, Directors shall ensure opportunities for Audit &Supervisory Board Members to exchange information and opinions regularly with members of thesection in charge of internal auditing of the Company and with the Independent Accounting Auditor.

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

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

3)

4)

The Company established “The Asahi Group Code of Conduct,” and tries hard to keep its
employees informed about it.
The Company promotes awareness of compliance by putting managers responsible forcompliance in place in the Company and the Group Companies and conducting education byjob class.
The Company conducts multifaceted and multilayered surveys of compliance awareness andbehavior by conducting a “Compliance Questionnaire” to the employees of the Company and
the Group Companies. In fiscal 2019, the questionnaire results continued to reveal that:“Compliance awareness remained at a high level.”
By keeping in place the “Clean Line System,” the Company detects and resolves risk problems
early, and effectively prevents risk problems themselves from occurring.
54

(3) Risk Management System
1)
2)

3)

The Risk Management System adopts enterprise risk management (ERM) for the overall Asahi
Group.
The respective companies of the Asahi Group identify and evaluate critical risks that could
impede achievement of business objectives across all risk categories such as strategy andoperations. They also draw up action plans and continually implement and monitor such plans.
The respective companies of the Asahi Group report details of such initiatives to theCompany’s Risk Management Committee, which monitors such initiatives, while its members
identify and evaluate critical risk across the Group, draw up action plans, and execute andmonitor such plans. They also report to the Board of Directors with the aim of ascertaining
effectiveness of such initiatives.
The Company has a system in place to deal with any major accident, disaster, scandal, etc. by
setting up an “Emergency Response Headquarters” under the management of the President andRepresentative Director.

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

With respect to the Group Companies’ business management, the Company has put in place asystem whereby, pursuant to the “Asahi Group’s Delegation of Authority,” the Group
Companies’ business executions are subject to resolutions of the Company’s Board of
Directors or decisions of an individual Director or the responsible persons of the 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 3 months.

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

2)

3)

Audit & Supervisory Board Members attend meetings of the Board of Directors, the“Corporate Strategy Board,” the “Risk Management Committee,” the “Compliance Committee”
and other important organs, and receive reports from Directors, employees, thereby confirming
the status of development and operation of the Internal Control System.
Audit & Supervisory Board Members work to enhance the effectiveness of auditing by finding
opportunities regularly or as needed for exchanging information and views with the section in
charge of internal auditing, the Independent Accounting Auditor, etc. During fiscal 2019, Audit& Supervisory Board Members had opportunities to exchange information and views with thesection in charge of internal auditing for a total of 11 times, with the Independent Accounting
Auditor for a total of 15 times. Audit & Supervisory Board Members also find opportunities toexchange information and views with Audit & Supervisory Board Members of the main Group
Companies once a month.
The Company ensures that Audit & Supervisory Board Members will be able to smoothly
perform their duties by posting 3 dedicated employees to the Audit & Supervisory Board.

55

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

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

Special Measures Contributing to Realization of the Basic Policy
In 2019, the Company will establish a group philosophy, the “Asahi Group Philosophy,”which articulates the Group’s mission and vision for the future, reaffirms values cherished andhanded down over the years, and serves as a code of conduct for our stakeholders and theGroup’s commitments to them. At the same time, the Company will establish a “Medium-Term
Management Policy” for the realization of the “Asahi Group Philosophy” and put group-wide
efforts in line with them. The details of the “Asahi Group Philosophy” and the “Medium-Term
Management Policy” are as described on pages 35 and 39.
The Company believes that it will be able to assure the flexibility of its corporate strategy
by setting and carrying out such management policy and will be able to increase its sustained
corporate value and ultimately secure common interests of its shareholders by setting such a
policy as “Engagement Agenda” (agenda for constructive dialogs) and making dialogs withthe stakeholders even more firm, and is striving to further strengthen its corporate governance.
Please refer to pages 43 - 48 for an overview.

56

2)

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

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

57

5. Overview of the Company(1) Shares Outstanding (As of December 31, 2019)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 25,473,630 treasury shares)
106,544(Decreased by 4,041 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
SSBTC CLIENT OMNIBUS ACCOUNT
Japan Trustee Services Bank, Ltd. (Trust Account 5)
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
STATE STREET BANK WEST CLIENT – TREATY 505234
Total

Number ofshares held(in hundreds)

Percentage ofshares held (%)

458,917244,386
160,000
100,000
97,85385,421
85,26980,28071,26065,102

10.0
5.3
3.5
2.2
2.1
1.9
1.9
1.8
1.6
1.4

1,448,488

31.6

Notes:
1.
The Company holds treasury shares numbering 254,736 hundred shares. However, the Company is excluded
from the above list of major shareholders. The shares of the Company held by Japan Trustee Services Bank, Ltd.
as trust property for stock compensation (357 hundred shares) are excluded from the treasury shares (254,736
hundred shares).
2.
Shareholding percentages are calculated based on the total number of issued shares less the number of treasury
shares.

58

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

Directors and Audit & Supervisory Board Members

Name

Position(As of December 31, 2019)
Attended Board of
Directors [D]/Areas of responsibility
Audit &and significant concurrent positions
Supervisory
Board [A] meetings

Naoki Izumiya

Chairman of the Board

External Board Director of Recruit
Holdings Co., Ltd.
Outside Director of Obayashi
Corporation[D] 12/12

Akiyoshi Koji

President andRepresentative Director
CEO

Overall Management
IR, Research & Development[D] 12/12

Atsushi Katsuki

Managing Director
Managing Corporate
Officer
CFO

Corporate Strategy, Finance,
Public Relations, ESG (ES sectors)
Alcoholic Beverages Business
Soft Drinks Business[D] 12/12

Yutaka Henmi

Director
Corporate Officer

Supply Chain, Quality Assurance
Foods Business[D] 9/9

Taemin Park

Director
Corporate Officer

Alliance and M&AInternational Beer Business
International Non-Alcohol Beverages
Business[D] 9/9

Keizo Tanimura

Director
Corporate Officer

Administration and Governance, ESG (Gsector)[D] 9/9

Tatsuro Kosaka

Outside Director

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

[D] 12/12

Yasushi Shingai

Outside Director

Outside Director of Mitsubishi UFJ
Financial Group, Inc.
Outside Director, Dai-ichi Life Holdings,
Inc.

[D] 12/12

Christina L.
AhmadjianOutside Director

Professor of Graduate School of Business
Administration, Hitotsubashi University
Outside Director of Mitsubishi Heavy
Industries, Ltd.
Outside Director of Japan ExchangeGroup, Inc.
Outside Director of Sumitomo ElectricIndustries, Ltd.

[D] 9/9

Yoshihide Okuda

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

Tetsuo Tsunoda

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

Katsutoshi Saito

Outside Audit &Supervisory Board
MemberAdvisor of The Dai-ichi Life Insurance
Company, Limited
Outside Director of Imperial Hotel, Ltd.
Outside Corporate Auditor of Tokyu
Corporation[D] 12/12[A] 13/13

Yumiko Waseda

Outside Audit &Supervisory Board
MemberPartner and Attorney at Law of Tokyo
Roppongi Law & Patent Offices[D] 12/12[A] 13/13

Yutaka Kawakami

Outside Audit &Supervisory Board
MemberSupervisory Director of Nippon Building
Fund Inc.

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

59

Notes:
1. Directors Tatsuro Kosaka, Yasushi Shingai, and Christina L. Ahmadjian are Outside Directors as defined in Item
15, Article 2 of the Companies Act.
2. Audit & Supervisory Board Members Katsutoshi Saito, Yumiko Waseda and Yutaka Kawakami are Outside Audit& Supervisory Board Members as defined in Item 16, Article 2 of the Companies Act.
3. The Company designated 3 Outside Directors Tatsuro Kosaka, Yasushi Shingai, and Christina L. Ahmadjian and
3 Outside Audit & Supervisory Board Members Katsutoshi Saito, Yumiko Waseda and Yutaka Kawakami as
Independent Officers as defined by the Tokyo Stock Exchange and reported to the said exchange.
4. Although the Company has business transactions with The Dai-ichi Life Insurance Company, Limited, Imperial
Hotel, Ltd. and Tokyu Corporation, as the transaction value for each is minimal, less than 1% of consolidated
revenue (or consolidated net sales) for the Company and the respective companies, there is no special business
relationship that could have impact on the Company’s management.
5. There is no special relationship or significant transactions between the Company and entities where its Outside
Directors or Outside Audit & Supervisory Board Members hold significant concurrent positions.
6. Audit & Supervisory Board Member Yoshihide Okuda was formerly CFO of the Company and has considerable
expertise in finance and accounting.
7. Audit & Supervisory Board Member Yutaka Kawakami has long experience as a certified public accountant; hehas considerable expertise in finance and accounting.
8. 5 Directors Katsutoshi Takahashi, Yoshihide Okuda, Noboru Kagami, Kenji Hamada and Naoki Tanaka, and 1
Audit & Supervisory Board Member Akira Muto retired upon the expiry of their terms of office at the conclusionof the 95th Annual General Meeting of Shareholders held on March 26, 2019.
9. Yutaka Henmi, Taemin Park, Keizo Tanimura and Christina L. Ahmadjian were newly elected as Directors,
Yoshihide Okuda was newly elected as an Audit & Supervisory Board Member, and they all assumed their offices
at the 95th Annual General Meeting of Shareholders held on March 26, 2019. Accordingly, for Directors Yutaka
Henmi, Taemin Park, Keizo Tanimura and Christina L. Ahmadjian, and Audit & Supervisory Board Member
Yoshihide Okuda, the number of Board of Directors meetings and Audit & Supervisory Board meetings held isdifferent from that of the other Directors and Audit & Supervisory Board Members.

2)

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

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

Medium-term bonus

Stock compensation

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

Objective

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

PeriodSingle fiscal year

3 years

3 years

Payment method

Cash

Cash

Stock

Payment timing

March every year

March of the year
following completion of
medium-term plan

On retirement

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

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

No

Performance indicators(weighting)
Individual evaluation

Yes

Yes

No

Clawback (repayment of
remuneration) provision

No

No

Yes

<Method for determining remuneration>
Directors’ remunerations are set in line with a resolution at a meeting of the Board of Directors
within the total amount of remunerations resolved in advance at a General Meeting of Shareholders.
When remuneration related resolutions are being made by the Board of Directors, the Compensation
Committee, which has Outside Directors/Audit & Supervisory Board Members constituting amajority of its membership and an Outside Director appointed as its chairperson, acts as an advisory61

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

62

3)

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

Category

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

Variable remuneration
Annual bonus

Medium-term bonus Stock compensation

Total
amount
Total
Total
Total
Total
Number amount Number amount Number amount Number amount (million
yen)of persons (million of persons (million of persons (million of persons (million
yen)
yen)
yen)
yen)
14
[4]

353
[51]

10
[–]

228
[–]

10
[–]

83
[–]

6
[–]

80
[–]

745
[51]

6

114

–

–

–

–

–

–

114

[3]

[40]

[–]

[–]

[–]

[–]

[–]

[–]

[40]

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

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

OutsideDirectors

Name

Form of participation, etc.

Tatsuro Kosaka

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

Yasushi Shingai

Yasushi Shingai attended all Board of Directors meetings held this fiscal year
and actively gave his opinions and recommendations regarding many proposals.
In particular, he participated in discussions and activities that stimulated
substantial and appropriate supervision of the Board of Directors such as raisingconcerns looking toward management in the long term from a risk management
and sustainability perspective using his advanced and extensive experience inglobal management.
Furthermore, he attended all Compensation Committee meetings held this fiscal
year, and proactively attended the committee, took the initiative in operating thecommittee in a fair and transparent manner, and reported proposals regarding
new remuneration plans for officers and proposals regarding bonus payment to
the Board of Directors as the chairperson of the Compensation Committee. As acommittee member, he gave his opinions and recommendations from various
angles regarding officers’ remuneration plans and their operation using his actual
experience and broad knowledge in compensation management as an overseas
local manager.
In addition, since being appointed a member of the Nomination Committee inMarch 2019, he attended all Nomination Committee meetings held this fiscal
year, and given specific opinions and recommendations based on his experiencein overseas company management.

Christina L.
AhmadjianChristina L. Ahmadjian attended all Board of Directors meetings held this fiscal
year since being appointed as a Director in March 2019, and actively gave her
opinions and recommendations regarding many proposals. In particular, sheparticipated in discussions and activities that stimulated substantial andappropriate supervision of the Board of Directors such as making honest andsimple inquiries, and raising concerns about the invigoration of the managementof proceedings from the perspective of organizational culture and governanceregarding various proposals, from her standpoint as an expert in corporate
governance and organizational culture and using her experience as an outside
officer in other companies.
Furthermore, since being appointed a member of the Compensation Committee
in March 2019, she attended all Compensation Committee meetings held thisfiscal year and gave fair opinions and recommendations regarding the reportingof individual officer evaluations and the bonus amount based on theseevaluations, with consideration given to fair and understandable remunerationplans.

64

Category

Name

Form of participation, etc.

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

Outside Audit&
Supervisory
Board
Members

Yumiko Waseda

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

YutakaKawakami

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

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

65

(3) Independent Accounting Auditor
1)

Name of the Independent Accounting Auditor
KPMG AZSA LLC

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

¥215 million¥94 million

Remunerations by the Company’s subsidiaries for this fiscal year

¥148 million¥0 million

Total of cash and other financial profits payable by the Company and its
subsidiaries to the Independent Accounting Auditor¥364 million¥95 million

Category

Notes:
1. In its agreement with the Independent Accounting Auditor, the Company makes no distinction between the
remunerations that it pays for auditing services governed by the Companies Act and for auditing services governedby the Financial Instruments and Exchange Act. Consequently, the amount for “Remuneration based on audit
professional services” shown above is a sum of these 2 amounts.
2. Having performed the necessary verifications on the contents of the Independent Accounting Auditor’s audit plan,evaluation and analysis of the audits actually conducted during the previous fiscal year, status of execution of
accounting audit duties, and reasonableness of the basis for calculation of remuneration, the Audit & Supervisory
Board has consented to the amount of remunerations for the Independent Accounting Auditor.
3. Non-audit professional services refer to the services which are outside the scope of Paragraph 1, Article 2 of theCertified Public Accountants Act.
4. In addition to the above, the Company and its subsidiaries such as Asahi Holdings (Australia) Pty Ltd and Asahi
Europe Ltd paid KPMG, which belongs to the same network as the Company’s Independent Accounting Auditor,
a total of ¥398 million in audit fees and compensation for tax and related services.

3)

Consecutive audit period
50 years
The period stated above denotes the consecutive audit period through which KPMG AZSA or
its predecessor (Asahi & Co.) has been appointed as an auditor of the Company since the predecessor
was incorporated as an audit firm. If the period is counted inclusive of the term for which Asahi &Co.’s predecessor (a sole practitioner) was appointed as an auditor, the period is 59 years.
4)

Names of certified public accountants who performed the duties and number of years of
audit
Hiroyuki Yamada (Number of years of audit: 1 year)
Hiroto Yamane(Number of years of audit: 2 years)
Kei Sakayori(Number of years of audit: 5 years)
The independent Accounting Auditor has appropriately established a rotation schedule regarding
its engagement partners, pursuant to revisions of the Certified Public Accountants Act made in 2003
and 2007. The engagement partners are not involved in carrying out audit services after having been
engaged in such services for 7 consecutive years. The lead engagement partner is not involved incarrying out audit services after having provided such services for 5 consecutive years.
5)

Structure of assistants who supported the audit duties
Certified public accountants: 26
Others: 33
Note: The figures above represent the total number of assistants involved with auditing duties for this fiscal year.

66

6)

Nature of non-audit professional services provided by the Independent Accounting
Auditor
The Company also assigns professional duties to the Independent Accounting Auditor that are
non-audit services such as financial/tax due diligence services.
7)

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

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

67

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

As ofDecember 31, 2019

As ofDecember 31, 2018
[Reference]

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

48,489407,621
171,717
24,94051,27731,06757,317427,279
160,319
37,308
7,025
25,324

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

735,113714,576735,022
1,398,422
8,755
198,657
15,734
20,65528,424

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

Total non-current assets
Total assets

2,405,674
3,140,788

2,364,738
3,079,315

68

CONSOLIDATED STATEMENT OF FINANCIAL POSITION(million yen)

As ofDecember 31, 2019

As ofDecember 31, 2018
[Reference]

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

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

416,842
262,620
39,624
17,65562,027140,821

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

1,075,673

939,591

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

764,768
25,517137,277
59,776
2,736

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

816,835
1,892,509

990,076
1,929,668

182,531
119,163918,523(77,011)103,107
1,246,314
1,965

182,531
119,128
821,120(76,997)
100,637
1,146,420
3,227

Total equity
Total liabilities and equity

1,248,279
3,140,788

1,149,647
3,079,315

69

CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(million yen)

For the year ended
December 31, 2019

For the year ended
December 31, 2018
[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 investments accounted forusing equity method
Gain (loss) on sales of investments accounted forusing equity method
Profit before tax
Income tax expense
ProfitProfit attributable to:
Owners of parent
Non-controlling interests
Total

70

2,089,048(1,297,302)
791,745(578,774)
6,078(17,613)201,436
8,094(13,012)2,120,291(1,303,246)
817,044(595,661)
4,369(13,980)
211,772
8,282(12,731)

872

887

–

(901)

197,391(56,100)
141,290

207,308(56,370)
150,938

142,207(916)
141,290

151,077(139)
150,938

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

Cash flows from (used in) operating activities:
Profit before tax
Depreciation and amortization expenses
Loss (gain) on sales of investments accounted forusing equity method
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accrued alcohol tax
Increase (decrease) in net defined benefit assets andliabilities
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash flows from (used in) operating activities
Cash flows from (used in) investing activities:
Purchase of fixed assets
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from sales of investment in an entity
accounted for using equity method
Purchase of shares of subsidiaries and others
resulting in change in scope of consolidation
Proceeds from sales of shares of subsidiaries
resulting in change in scope of consolidation
Other
Net cash flows from (used in) investing activities
Cash flows from (used in) financing activities:
Increase (decrease) in financial liabilities
Purchase of treasury shares
Dividends paid
Other
Net cash flows from (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents
resulting from change of scope of consolidation
Cash and cash equivalents at end of period71

For the year ended
December 31, 2019

For the year ended
December 31, 2018

197,391
113,036

207,308
109,206–901

22,881(10,722)
2,955(9,214)(2,759)(8,966)(3,397)(3,799)

1,338

655

(7,472)
310,192
3,818(6,875)(53,666)
253,469

59,513358,664
3,662(6,831)(103,053)
252,441(85,322)(5,841)8,856(87,888)(986)
10,591–

101,646(23,942)

–

741

989

1,842
(103,666)(1,846)22,505(111,367)(31)(48,556)
1,113(158,841)(228,623)(250)(41,229)(460)(270,564)

209(4,416)(8,828)57,317(33)
58,054–(703)

48,48957,317

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

As ofDecember 31, 2019

As ofDecember 31, 2018
[Reference]

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

16,814
219,5212,288
18,67755,529(2,898)26,938213,309
1,067
35,362
14,200(1,795)

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

309,933

289,083

14,893
394
142
0
873
15,037901
314

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

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

32,55732,696

39
8,957
9,626
122
5

39
9,927
9,153
164
6

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

18,75019,291

11,886
1,520,490

13,923
1,522,395

4,519

4,519

300

550

–
2,855
(187)

10,021
2,258(182)

1,539,864
1,591,172
1,901,105

1,553,486
1,605,473
1,894,557

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

72

NON-CONSOLIDATED BALANCE SHEET(million yen)

As ofDecember 31, 2019

As ofDecember 31, 2018
[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
Deferred tax liabilities
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

73

195,20282,000125,000
328
1,144
4,462
46,058224
296
396

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

455,113371,256

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

481,604
286,800
542
–
1,174

549,346
1,004,459

770,121
1,141,377

182,531
151,683
50,292
101,391
601,846
601,846
195,000
406,846(77,011)859,049

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

3,641

4,502

33,95437,596896,646
1,901,105

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

NON-CONSOLIDATED STATEMENT OF INCOME(million yen)

For the year ended
December 31, 2019

For the year ended
December 31, 2018
[Reference]

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

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

244,201
33,073
1,520
209,606–

Operating expenses
Operating profit
Non-operating income
Interest and dividend income
Foreign exchange gains
Other

34,601
166,294
1,271
1,004
–
267

30,304
213,897
1,173
926
62
185

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

5,002
3,190
216
1,108
487
162,562
941
7
933
–

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

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

2,481
163
59

1,151
329
185

2,005

–

253
161,023826
239
159,957

636
241,937
869
10,837230,23074

AUDIT REPORTS
Independent accounting auditor’s report on consolidated financial statements
Independent Auditor’s ReportFebruary 6, 2020
The Board of Directors
Asahi Group Holdings, Ltd.

KPMG AZSA LLC
Hiroyuki Yamada (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hiroto Yamane (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Kei Sakayori (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
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, 2019, and for theyear from January 1, 2019 to December 31, 2019 in accordance with Article 444-4 of the Companies
Act.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with the latter part of Article 120-1 of the Regulation on Corporate
Accounting that prescribes some omissions of disclosure items required under International Financial
Reporting Standards, and for such internal control as management determines is necessary to enable
the preparation of consolidated financial statements that are free from material misstatement, whether
due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audit
as independent auditor. We conducted our audit in accordance with auditing standards generally
accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the consolidated financial statements. The procedures selected depend on our judgment, including
the assessment of the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error. In making those risk assessments, we consider internal control relevant to theentity’s preparation and fair presentation of the consolidated financial statements in order to design
audit procedures that are appropriate in the circumstances, while the objective of the financial
statement audit is not to express an opinion on the effectiveness of the entity’s internal control. An
audit also includes evaluating the appropriateness of accounting policies used and the reasonableness75

of accounting estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position and the results of operations of Asahi Group Holdings, Ltd. and its
consolidated subsidiaries for the period, for which the consolidated financial statements were prepared,in accordance with the latter part of Article 120-1 of the Regulation on Corporate Accounting thatprescribes some omissions of disclosure items required under International Financial ReportingStandards.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed
pursuant to the provisions of the Certified Public Accountants Act of Japan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’sReport as required by the Companies Act.

76

Independent accounting auditor’s report on non-consolidated financial statements
Independent Auditor’s ReportFebruary 6, 2020
The Board of Directors
Asahi Group Holdings, Ltd.

KPMG AZSA LLC
Hiroyuki Yamada (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Hiroto Yamane (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Kei Sakayori (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the non-consolidated financial statements, comprising the non-consolidated balance
sheet, the non-consolidated statement of income, the non-consolidated statement of changes in net
assets and the related notes, and the supplementary schedules of Asahi Group Holdings, Ltd. as at
December 31, 2019 and for the year from January 1, 2019 to December 31, 2019 in accordance with
Article 436-2-1 of the Companies Act.
Management’s Responsibility for the non-consolidated Financial Statements and Others
Management is responsible for the preparation and fair presentation of the non-consolidated financial
statements and the supplementary schedules in accordance with accounting principles generally
accepted in Japan, and for such internal control as management determines is necessary to enable thepreparation of non-consolidated financial statements and the supplementary schedules that are freefrom material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the non-consolidated financial statements and the
supplementary schedules based on our audit as independent auditor. We conducted our audit inaccordance with auditing standards generally accepted in Japan. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the non-consolidated financial
statements and the supplementary schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the non-consolidated financial statements and the supplementary schedules. The procedures
selected depend on our judgment, including the assessment of the risks of material misstatement of
the non-consolidated financial statements and the supplementary schedules, whether due to fraud or
error. In making those risk assessments, we consider internal control relevant to the entity’s
preparation and fair presentation of the non-consolidated financial statements and the supplementaryschedules in order to design audit procedures that are appropriate in the circumstances, while theobjective of the financial statement audit is not to express an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and77the reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the non-consolidated financial statements and the supplementary schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
OpinionIn our opinion, the non-consolidated financial statements and the supplementary schedules referred toabove present fairly, in all material respects, the non-consolidated financial position and the results ofoperations of Asahi Group Holdings, Ltd. for the period, for which the non-consolidated financial
statements and the supplementary schedules were prepared, in accordance with accounting principles
generally accepted in Japan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed
pursuant to the provisions of the Certified Public Accountants Act of Japan.
Notes to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’sReport as required by the Companies Act.

78

REPORT OF THE AUDIT & SUPERVISORY BOARD
Audit Report
The Audit & Supervisory Board has prepared the following report based on the audit reports preparedby individual Audit & Supervisory Board Members related to the Directors’ execution of their duties
during the 96th fiscal year, the period from January 1, 2019 to December 31, 2019, after due
discussions and consultations among the Audit & Supervisory Board Members.
1. Methods used in audits by the individual Audit & Supervisory Board Members and by the
Audit & Supervisory Board and content of audits(1) The Audit & Supervisory Board determined the audit policies and division of duties, and received
reports from each Audit & Supervisory Board Member regarding the status and results of theaudits, as well as reports from the Directors and Independent Accounting Auditor on theexecution of their duties, and requested explanations of those reports when necessary.
(2) Each Audit & Supervisory Board Member, in accordance with the audit policies, division ofduties, etc. based on the audit standards established by the Audit & Supervisory Board, soughtto achieve mutual understanding with the Directors, the section in charge of internal audit andother employees, strove to collect information and create an audit environment, attended
meetings of the Board of Directors and other important meetings, received reports from Directors,
other employees regarding the execution of their duties and requested explanations whennecessary, reviewed documents related to important decisions, and inspected the operations andproperty of the head office and other locations. With respect to “systems to ensure appropriate
execution of Directors’ duties in conformity with laws and regulations and the Articles ofIncorporation and other systems to ensure appropriate business operations, which is included in
the Business Report (internal control systems)” (Item 6, Paragraph 4, Article 362 of theCompanies Act and Paragraphs 1 and 3, Article 100 of the Regulation for Enforcement of theCompanies Act), the Audit & Supervisory Board received reports regularly from Directors andother employees regarding the status of the establishment and implementation of the systems,sought additional explanations as necessary, and expressed opinions thereon. The Audit &Supervisory Board Members discussed the contents of the “basic policy concerning the persons
who control decisions on the Company’s financial and business policies” (Item 3, Article 118 of
the Regulation for Enforcement of the Companies Act) included in the Business Report, basedon discussions of the Board of Directors and other parties. With respect to subsidiaries, the Audit& Supervisory Board Members took steps to facilitate communications and exchange
information with the Directors and Corporate Auditors of subsidiaries and, when necessary,received reports from subsidiaries on the status of their businesses. Using the foregoing methods,
the Audit & Supervisory Board Members reviewed the Business Report and the supplementaryschedules for this fiscal year.
(3) The Audit & Supervisory Board oversaw and verified that the Independent Accounting Auditor
maintained its independence and carried out appropriate audits, moreover, and received reports
from the Independent Accounting Auditor regarding the execution of its duties and requested
explanations when necessary. The Audit & Supervisory Board also received notifications fromthe Independent Accounting Auditor to the effect that “a system for the maintenance ofappropriate execution of duties” (included in Article 131 of the Regulation on Corporate
Accounting) in accordance with the “standards for quality control of audits” (BusinessAccounting Council; October 28, 2005), etc., and requested explanations when necessary. Basedon the above activities, the Audit & Supervisory Board examined the non-consolidated financial
statements (non-consolidated balance sheets, non-consolidated statement of income, nonconsolidated statement of changes in net assets, and notes to the non-consolidated financial
statements), the supplementary schedules, and the consolidated financial statements(Consolidated statement of financial position, consolidated statement of profit or loss,
consolidated statement of changes in equity, and notes to the consolidated financial statements)
for this fiscal year.

792. Results of the Audit(1) Results of audit of the Business Report, etc.
 In our opinion, the Business Report and the supplementary schedules present the situationof the Company fairly, in compliance with the provisions of applicable laws and regulations
and the Articles of Incorporation.
 In our opinion, there are no wrongful acts or material violations of applicable laws andregulations or the Articles of Incorporation in the execution of their duties by the Directors.
 In our opinion, the content of the resolution by the Board of Directors regarding internal
control systems is appropriate, and, furthermore, content of the Business Report regarding
the internal control systems and the execution by the Directors have been appropriate.
 In our opinion, the Company’s basic policy concerning the persons who control decisions
on the Company’s financial and business policies in the Business Report is appropriate.
We acknowledge that the measures implemented to achieve this basic policy are consistent
with the basic policy, will not harm the common interest of the Company’s shareholders,
and will not serve the purpose of maintaining the positions of the Company’s Directors andAudit & Supervisory Board Members.
(2) Results of the audit of non-consolidated financial statements and the supplementaryschedules
In our opinion, the auditing methods used by KPMG AZSA LLC, the Independent Accounting
Auditor, and the results of its audit are appropriate.
(3) Results of the audit of consolidated financial statements
In our opinion, the auditing methods used by KPMG AZSA LLC, the Independent Accounting
Auditor, and the results of its audit are appropriate.
February 7, 2020
Audit & Supervisory Board
Asahi Group Holdings, Ltd.
Yoshihide Okuda (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

80