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

ASAHI BREWERIES, LTD.
(Securities Code: 2502)

March 3, 2011
Dear Shareholders:

NOTICE OF THE 87th ANNUAL GENERAL MEETING OF SHAREHOLDERS

You are cordially invited to attend the Annual General Meeting of Shareholders of Asahi
Breweries, Ltd. (the “Company”), which will be held as described below.
If you can attend the meeting, please submit the enclosed voting form directly at the meeting.
If you are unable to attend the meeting in person, you may exercise your voting rights via
either postal mail or Internet. Please review the attached “REFERENCE MATERIALS FOR
GENERAL MEETING OF SHAREHOLDERS,” pages 82 to108, and exercise your voting
rights no later than 5:30 p.m., Thursday, March 24, 2011 (JST).
Voting via Postal Mail
Please indicate your consent/dissent concerning the items shown on the enclosed voting form,
and return the form to us by the deadline noted above.
Voting via Internet
After accessing our voting site at <http://www.webdk.net>, enter the voting code and password
provided on the enclosed voting form. Following the instructions on your screen, enter yourconsent/dissent concerning the items to be voted on by the deadline noted above. (This site canalso be accessed on the Internet via cellular phone.)
If you exercise your voting rights via the Internet, please review “Reminder to Shareholders
Concerning Online Voting” on page 109 to 110.
* Please note that the online voting site is available only in the Japanese language.
Sincerely,

Naoki Izumiya, President and Representative Director
ASAHI BREWERIES, LTD.
23-1, Azumabashi 1-chome, Sumida-ku, Tokyo11. DATE AND TIME

March 25 (Friday), 2011, at 1:00 p.m. (JST)
2. PLACE
Banquet Room “Tsuru”
Main Banquet Floor of Hotel New Otani
4-1, Kioi-cho, Chiyoda-ku, Tokyo
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 Auditor and the Board of Corporate Auditors for the 87th term, fromJanuary 1, 2010 to December 31, 2010.
Items to Be Resolved:
Item 1: Appropriation of surplus
Item 2: Approval of absorption-type demerger agreement
Item 3: Partial amendments to the Articles of Incorporation
Item 4: Election of eleven (11) Directors
Item 5: Election of three (3) Corporate Auditors

2

BUSINESS REPORT
From January 1 to December 31, 2010

1. Overview of Operations of Asahi Group(1) Business Progress and Results
The Japanese economy has showed signs of improvement thanks to the effect of thegovernment’s economic stimulus measures and recovery in foreign economies;
nevertheless, the rapidly appreciating yen and persistently high unemployment areevidence that full-fledged recovery is not yet assured.
In the alcoholic beverages industry, while the new-genre market grew as a result ofa deep-seated tendency among consumers to exercise thrift, the markets for beer andhapposhu (low-malt beer) both shrank. Taxable shipment volumes for all types of beer
and beer-type beverages declined by 2.8%. Outside this segment, most alcoholic
beverage categories saw further maturation of markets with growth essentially flat
overall, although the low-alcohol beverages and the market for whisky and other spirits
were buoyed by renewed popularity of the highball.
In the soft drinks industry, total sales volume rose by an estimated 3%, reflecting
such factors as the summer heat wave.
Against this backdrop, during 2010, the first year of “Medium-Term Management
Plan 2012,” Asahi Breweries, Ltd. and its consolidated subsidiaries and affiliates(collectively, the “Asahi Group”, or “the Group”) focused its management resources oncore product across all of its businesses and sought to improve the overall profitabilityof its operations through ongoing reinforcement of its cost competitiveness as part ofefforts to achieve the goals elucidated in “Long-Term Vision 2015”.
The Asahi Group posted net sales of ¥1,489,460 million, a year-on-year increase of
1.2%. Operating income increased by 15.2% to ¥95,349 million and recurring profit
rose by 11.7% to ¥101,142 million. Net income totaled ¥53,080 million, an increase of
11.4% compared with the previous year.
Asahi Group (Consolidated)

Asahi Breweries, Ltd. (Non-consolidated)

Net sales¥1,489,460 million(up 1.2% year-on-year)¥963,270 million(down 2.3% year-on-year)

Operating income¥95,349 million(up 15.2% year-on-year)¥101,142 million(up 11.7% year-on-year)¥53,080 million(up 11.4% year-on-year)¥84,741 million(up 7.9% year-on-year)¥84,707 million(up 6.8% year-on-year)¥17,661 million(down 41.2% year-on-year)

Recurring profit
Net income

3

The following provides an overview of the Group’s operations by business segment.
Alcoholic Beverages Segment
In its domestic alcoholic beverages business, Asahi Breweries, Ltd. (“theCompany”) promoted brand reinforcement and growth initiatives in line with the slogan“Striving toward reform”, focusing on “Asahi Super Dry” and “Clear Asahi” as flagshipbrands. Meanwhile, in the pursuit of a solid earnings base immune to the effects ofchanges in the market environment, it pushed ahead with both earnings structurereforms through Group-wide procurement as a means of reducing raw materials costs
and the consolidation of breweries in order to enhance production efficiency.
- Beers and Beer-type Products BusinessIn the beer sector, the Company worked to enhance the appeal of its “Asahi Super
Dry” among a much wider range of customers through two proactive, conceptually
linked information provision and sales promotion projects. The first was a sales
campaign that aimed at invigorating the brand with an “Asahi Super Dry Extra Cold”
variety enjoyed at temperatures below freezing – that is, between -2°C and 0°C – thesecond, an environmental protection initiative (the “Refreshingly Sustainable” project)under which the Company donated a portion of its proceeds from sales to regionalorganizations throughout the country that are dedicated to preserving Japan’s naturaland cultural assets.
In the happoshu sector, the Company worked to energize the market by boosting
the quality of “Asahi Style Free” – its ground-breaking “zero-carbohydrate”*1 product –and also through a range of promotion activities.
In the new-genre sector, the Company focus its management resources on the“Clear Asahi” and “Asahi Off” brands in order to help establish them as the leading
products in the growing “new genre (malt-type)”*2 segment, and of particular note inthis regard was the March launch of a kegged variety of “Clear Asahi” for on-site sales.
The Company also developed products catering for diversifying customer tastes,
introducing “Asahi Strong Off” in March and “Asahi Kutsurogi-Jikomi <4VG>” in
September.
*1“Zero-carbohydrate” is defined as a sugar content of less than 0.5g per
100ml based on the Japanese labeling standards for nutritional content.

*2“New genre (malt-type)” is defined by the Company as a genre classified as“liquors (happosei) (1)” that are happoshu with less than 50% malt andmixed with barley spirits.

4

- Shochu, Low-Alcohol Beverages, Whisky and Other Spirits, and Wine BusinessIn the shochu sector, the Company renewed its “Imo-Jochu Kanoka KurokouijiJikomi” product line as part of efforts to energize the “Kanoka” brand. In May,
meanwhile, the Company continued its forward-looking sales promotion activities withthe launch of “Honkaku Imo-Jochu Satsuma Koku-Murasaki”.
In the low-alcohol beverages sector, the Company not only added new flavors to
the “Asahi Slat” and “Asahi Cocktail Partner” canned chu-hi (shochu cocktail) series,
but it also focused on brand cultivation, introducing “Asahi Chu-hi Kajitsu-noShunkan” and “Asahi Sparx” in March and July, respectively. “Asahi Chu-hi Kajitsuno-Shunkan” prides itself on the full flavor of natural fruit juice, while “Asahi Sparx”
boasts an alcohol content of 9% and 70% reduction in carbohydrates*3.
In the whisky and other spirits sector, sales of the core brand “Black Nikka Clear
Blend” continued to expand steadily, posting positive growth for the fourth successive
year. In February, “Taketsuru 21-Year Pure Malt” won accolades at the “World
Whiskies Awards (WWA) 2010” *4 as the world’s best blended malt whisky. This was
the second year in succession that the whisky won this prize, and the third time overall.
In the wine sector, the Company continued to promote sales of domestically
produced wine through renewal of the “Sanka-boshi-zai Mutenka Yuki Wine” line ofantioxidant-free organic wines as part of efforts to increase “Sainte Neige” brandpenetration. In imported wines, efforts focused on the expansion of sales throughcultivation of a varied product lineup, with the Company promoting such key labels as“Maison Louis Latour” and “Zonin.”*3

Calculated with respect to the average carbohydrate content of theCompany’s fruit chu-hi products.

*4

The WWA is an international competition exclusively for whiskies andsponsored by the specialized UK publication Whisky Magazine.

- International Alcoholic Beverages BusinessIn the Chinese beer business, Hangzhou Xihu Beer Asahi Co., Ltd. and Beijing
Beer Asahi Co. Ltd. began production of Tsingtao beer products under contract in July.
Through these and other efforts, the Group worked to strengthen its strategic partnershipwith Tsingtao Brewery Co., Ltd. as a means of improving profitability. In Asian andOceania markets such as Korea, Taiwan, Hong Kong, Thailand and Australia, the Groupboosted the market presence of the “Asahi” brand through steady growth in sales of“Asahi Super Dry” among other products.
In a reflection of lower sales of beer and beer-type beverages, net sales recorded in
the alcoholic beverages business segment amounted to ¥935,850 million, a decline of52.3% compared with the previous year. Operating income rose by 7.2% year-on-year to¥84,566 million, thanks to the Group’s efforts to stem growth in raw materials costs andto reduce other costs.
Soft Drinks Segment- Domestic Soft Drinks BusinessIn the domestic soft drinks business, Asahi Soft Drinks Co., Ltd. pursued a growthstrategy while simultaneously implementing further structural reforms to realize
dramatic growth in this sector.
Efforts have focused on channeling marketing resources in order to further
strengthen and develop key brands such as “MITSUYA”, “WONDA” and “Asahi
Juroku-Cha” at the heart of the growth strategy. Meanwhile, Asahi Soft Drinks also
worked to energize the market through, for example, its May launch of “Asahi TeaO” –a product that delivers the full flavor of black tea despite having “zero sugar”*5. And
thanks in part to the acquisition of House Foods Corporation’s “Rokko no Oishii Mizu”
production and marketing operations, overall sales volume at Asahi Soft Drinks Co.,
Ltd. grew for the eighth year in succession, hitting a record high.
Restructuring efforts in this segment targeted further quality improvements andearnings structure reforms. Besides working to stem growth in raw materials costs, theCompany added a new state-of-the-art production line featuring equipment for in-housemanufacture of PET bottles at its Ibaraki Brewery, while also enhancing the efficiency
of production and logistics operations.
*5“Zero sugar” is defined as a sugar content of less than 0.5g per 100 ml
based on the Japanese labeling standards for nutritional content.

- International Soft Drinks BusinessIn the Group’s international soft drinks business, Tingyi-Asahi Beverages Holding
Co., Ltd. worked to reinforce its position in the Chinese market through sales
campaigns and a range of other promotion activities focused on core products, thus
strengthening its business platform. In Australia, meanwhile, Schweppes Australia Pty
Limited continued to implement forward-looking policies to further enhance existing
brands and to also expand new sales routes.
In a reflection of the significant increase in sales volume at Asahi Soft Drinks Co.,
Ltd. and the sales contribution from Schweppes Australia Pty Limited, the soft drinks
business segment posted net sales of ¥391,565 million, a gain of 10.2% compared withthe previous year. Operating income increased by 608.4% from the previous year to¥4,922 million.
6

Foods Segment
In the foods segment, Group subsidiary Asahi Food & Healthcare Co., Ltd. worked
to lay the groundwork for further growth by expanding sales, strengthening corporate
capabilities, and creating safe and reassuring brands. Asahi Food & Healthcare boosted
sales through aggressive advertising expansion and sales promotion initiatives, inaddition to the ongoing introduction of new and renewed product lines. These efforts
supported the growth in sales of such mainstay brands as “MINTIA” breath mints,“BALANCEUP” nutritionally balanced snack bars, the “Ippon Manzoku Bar” range ofnutritional snacks, yeast-derived quasi-drug “EBIOS” tablets, “Dear-Natura” dietary
supplements and “Slim Up Slim” dietary aids.
In line with its management policy of building of a growth-oriented businessplatform, Wakodo Co., Ltd. pursued a strategy of reinforcing and expanding its
operating base. Leveraging its expertise in “infant-safe quality” developed in the
production of high-quality baby foods over many years, Wakodo continued to revamp
product lines and expand its brand portfolio. Thanks to these efforts, strong
performance of such mainstay brands as the “Goo-Goo Kitchen” baby food line
contributed to a year-on-year increase in sales.
In other segment developments, Group subsidiary Amano Jitsugyo Co., Ltd.
focused on business expansion and increasing its profitability with the aim ofdominating the Japanese market for freeze-dried foods. Mail-order sales operations
performed much better than in the previous year, thanks in part to sustained growth inmainstay freeze-dried miso soup products; similarly, its distribution sales operations
achieved record sales on the back of a significant increase in the number of outlets
carrying its products.
In a reflection of strong performance in mainstay Group products, net sales in the
foods segment amounted to ¥95,440 million, a gain of 3.3% compared with the previous
year. Operating income soared by 32.4% from the year before to ¥3,632 million, thanks
to sales growth and production efficiency enhancements at Asahi Food & Healthcare
among other factors.
Other Businesses Segment
In the other businesses segment, expansion of business in restaurant and logistics
operations helped to keep net sales almost level, declining just 0.2% year-on-year to¥66,604 million despite difficult market conditions. In a reflection of improved
profitability in logistics operations, segment profitability increased 69.3% from the year
before to ¥1,505 million.

7

Asahi Group Breakdown of Net Sales(Consolidated)thMillion yen

thSegment

86 term2009(previous)

87 term2010(under review)

Alcoholic Beverages¥958,155¥935,850(22,305)-2.3 %

Soft Drinks

355,162

391,565

36,403

10.2

Foods

92,39995,440

3,040

3.3

Other Businesses

66,751

66,604

(146)

-0.2

Total

1,472,468

1,489,460

16,991

1.2

Change inamountChange inpercentage

Note: The above figures exclude intra-Group sales.

Asahi Breweries, Ltd. Breakdown of Net Salesth(Non-consolidated)

Million yenth

86 term2009(previous)

87 term2010(under review)

Change inamount¥844,328¥812,496¥ (31,832)-3.8 %(Beer)

646,517620,367(26,150)-4.0(Happoshu)

96,23971,510(24,728)-25.7(New Genre)

101,571

120,618

19,046

18.8

Shochu50,26548,262(2,002)-4.0

Low-Alcohol Beverages

30,55831,209651

2.1

Whisky and Other Spirit

26,00530,411

4,406

16.9

Wine

12,420

11,546

(874)

-7.0

Other Alcoholic Beverages

3,877

6,972

3,094

79.8

Contract Manufacture

16,227

20,611

4,384

27.0

Real Estate and Others

1,785

1,760

(25)

-1.4

985,468

963,270(22,198)-2.3

Business area
Beers and Beer-Type Products

Total

Change inpercentage

Note: “Other Alcoholic Beverages” above includes beer-tasted soft drinks and soft drinks for on-site sales.

8(2) Management Perspectives
Working under the slogan “Reform, Execution, Full Participation” in 2011, thesecond year of the “Medium-Term Management Plan 2012”, the Asahi Group will
implement global management measures focused on further enhancement of corporate
value. Meanwhile, with the planned transition in July 2011 to a pure holding company
structure, it is intended not only to clarify the roles and responsibilities of each businessdepartment and strengthen business platforms through specialization, but to also target
dramatic growth through the audacious allocation of resources to growth areas both athome and overseas.
The Domestic Alcoholic Beverages BusinessIn the domestic alcoholic beverages business, the Company will target expansion of
overall demand by further building customer trust and affinity as a means of enhancing
the value of existing brands and offering original value in this market. In the beers andbeer-type products business, the Company will work to cultivate core brands in eachcategory, with a distinct focus on “Asahi Super Dry” and “Clear Asahi”; furthermore, italso aims to further energize the market for beers and beer-type products with the Marchlaunch of “Ichibanmugi” – a new product that delivers the authentic clear flavor andcrisp aftertaste of the “new-genre 100% malt beer”*. In the shochu, low-alcohol
beverages, whisky and other spirits and wine categories, the Company will work toboost its market presence, cultivating all of its major products while at the same time
striving for higher cost competitiveness. In addition, it will integrate beer production
from the Nishinomiya Brewery into Suita Brewery’s operations in order to greatly
enhance production efficiency, and through this and other measures, aims to reform its
earnings structure.
*“100% malt” is defined as a beverage produced only from malt, barleyspirits, and other barley-derived ingredients, with the exception of hops atless than 0.5%.

Group Operations
In the soft drinks business, key Group subsidiary Asahi Soft Drinks Co., Ltd. ispursuing a policy of accelerating growth through the creation of a stronger base for
future development with a focus on key brands such as “WONDA”, “MITSUYA” and“Asahi Juroku-Cha”; by offering new value in long-selling brands; and by re-launchingthe “Rokujo Mugicha” brand of barley tea products acquired from Kagome Co., Ltd. In
addition, Asahi Soft Drinks also aims to keep quality assurance as viewed through theeyes of the customer at the highest possible levels and to further optimize its production
and logistics systems in the quest to become the industry leader in terms of cost
9competitiveness. LB Co., Ltd. (Tokyo) and LB Co., Ltd. (Nagoya), which between themhandle chilled soft-drink operations, merged in January 2011, seeking to enhance
profitability and to develop new growth strategies benefiting from synergistic effects.
In the foods business, Group subsidiary Asahi Food & Healthcare Co., Ltd. aims
to expand sales by developing new products in the growing businesses of confectionery,
health foods and seasonings, and also by developing new markets. In addition, Asahi
Food & Healthcare will work to realize a structure capable of consistently generating
profits and a business platform that is sound, dependable and resilient in the face ofchange. Elsewhere, Wakodo Co., Ltd. will strive to further enhance its powerful
position in powdered baby milks, baby foods and other existing businesses, while at thesame time remaining committed to “infant-safe quality” and preparing for future growththrough the development of new businesses, including overseas operations and businesstargeting seniors. In order to realize a platform capable of supporting dramatic growth
going forward, Amano Jitsugyo Co., Ltd. is working to develop and cultivate coreproducts; to expand its marketing network; to achieve further growth in mail-order sales
operations; and in addition, to enhance its production capabilities in the field of freeze
dried products.
In international operations, the Group is committed to further improving margins
in its beer operations in the key China market through its strategic partnership with
Tsingtao Brewery Co., Ltd.; in addition, it will deploy growth strategies aimed at
expanding the Asahi brand. Elsewhere, Schweppes Australia Pty Limited will also
actively pursue growth strategies focused on expanding sales of major product lines
through forward-looking marketing investments and entry into new categories. The
company has concluded a share purchase agreement with P&N Beverages Australia Pty
Limited in anticipation of acquisition, and together, they aim to identify synergies thatcan be leveraged upon merging as they work to reinforce their position in the Australiansoft drinks market. Through a joint venture with Itochu Corporation, meanwhile, theAsahi Group has invested in the Ting Hsin International Group, one of the largest
packaged food manufacturing and distribution groups in Greater China, and in order tofurther expand its business in both China and Taiwan, it intends to work closely withTing Hsin, efficiently applying the strengths of each in the wide range of foodbusinesses in which that group is active.
In accordance with “Medium-Term Management Plan 2012,” the Asahi Groupintends to strengthen all of its brands and increase its profitability through optimizing its
finances and implementing a cash flow strategy aimed at increasing total enterprisevalue. Creating a stronger base for future growth is the Group’s top priority. To this end,
it plans to investigate and actualize opportunities for strategic business investments andalliances, both in Japan and abroad, targeting the alcoholic beverage and soft drink
business segments in particular. The Group will adopt a flexible approach with respect
10

to the allocation of funds in order to return cash flows to shareholders and create
additional corporate value.
The Group cordially requests shareholders’ continuing encouragement and support.
(3) Capital Investment Activities
Consolidated capital expenditures in the year under review totaled ¥36,737 million,a large portion of which represented investments made to upgrade existing facilities andimplement energy conservation measures. Other projects are specified below:
Major capital investments and facility upgrades in process during 2010
Segment concerned: Soft drink operations
Item and expenditure: Manufacturing facility for soft drinks: ¥3,068 million (atIbaraki Brewery, Asahi Breweries, Ltd.: total projected capital investment of¥24,500 million between 2006 and 2010)(4) Financing Activities
The Company financed the capital investments detailed in item (3) above and othercapital requirements through loans from financial institutions and the issuance ofcommercial paper. On April 27, 2010, furthermore, the Company issued its 32nd seriesof unsecured bonds (5-year, ¥20,000 million bond issue) to raise bond-redemption funds.
(5) Status of Principal Lenders(As of December 31, 2010)
LenderOutstanding balance(Million yen)

Sumitomo Mitsui Banking Corporation

34,655

Mizuho Corporate Bank, Ltd.

14,934The Sumitomo Trust & Banking Co., Ltd.

10,500The Dai-ichi Life Insurance Company, Limited

10,200

The Norinchukin Bank

7,400

Note: Pursuant to organizational changes, The Dai-ichi Mutual Life Insurance Company became The
Dai-ichi Life Insurance Company, Limited on April 1, 2010.

11

(6) Financial and Profit/Loss Indicators
A. Financial and profit/loss indicators of Asahi Group(Consolidated)th

84 term
2007th

85 term
2008th

86 term2009

87 term2010(under review)

1,464,071

1,462,747

1,472,468

1,489,460

Operating income (million yen)

86,955

94,52082,777

95,349Recurring profit (million yen)

90,21796,47490,546

101,142

Net income (million yen)

44,79745,01447,64453,080Earnings per share (yen)

94.94

96.31

102.49114.10Total assets (million yen)

1,324,391

1,299,058

1,433,652

1,405,358

Net assets (million yen)

529,782534,627

577,702612,670

Net assets per share (yen)1,089.33

1,122.13

1,233.25

1,315.51

Net sales (million yen)thNote: Earnings per share are calculated based on the average total number of shares outstanding during
the term. Net assets per share are calculated based on the total number of shares outstanding at
term-end. The number of shares outstanding is exclusive of treasury stock.

B. Financial and profit/loss indicators of Asahi Breweries, Ltd.

(Non-consolidated)th

84 term
2007th

85 term
2008th

86 term2009

87 term2010(under review)

1,030,736

1,019,613

985,468

963,270

Operating income (million yen)

79,93391,05078,51384,741

Recurring profit (million yen)

77,372

88,56279,30384,707

Net income (million yen)

40,51338,99430,036

17,661

Earnings per share (yen)

85.84

83.43

64.61

37.97

Total assets (million yen)

1,070,506

1,049,190

1,155,860

1,100,325

Net assets (million yen)

482,026

485,538

507,569

514,226

Net assets per share (yen)1,020.24

1,044.56

1,091.53

1,105.00

Net sales (million yen)thNote: Earnings per share are calculated based on the average total number of shares outstanding during
the term. Net assets per share are calculated based on the total number of shares outstanding at
term-end. The number of shares outstanding is exclusive of treasury stock.

12

(7) Principal Subsidiaries
Capital(Million yen)
14,989

Shareholdings (%)

Main operations

100.0

50

100.0

Asahi Soft Drinks Co., Ltd.

11,081

100.0

Production of alcoholic
beverages
Production of alcoholic
beverages
Production andmarketing of soft drinks

Asahi Calpis Beverage Co.,Ltd.
LB Co., Ltd. (Tokyo)

495

80.0

Sales of soft drinks

487

100.0

Production andmarketing of soft drinks

LB Co., Ltd. (Nagoya)

55

100.0

Production andmarketing of soft drinks

3,200

100.0

2,918

100.0

Production andmarketing of foods
Production andmarketing of foods

Amano Jitsugyo Co., Ltd.

67

100.0

Asahi Logistics, Ltd.

80

100.0

Asahi Food Create, Ltd.

40

100.0

7,902
(609,322 thousand RMB)
3,882
(276,000 thousand RMB)
3,032
(218,804 thousand RMB)
13,591(A$200,018 thousand)
3,720(US$32,000 thousand)

72.8

Company name
The Nikka Whisky DistillingCo., Ltd.
Sainte Neige Wine Co., Ltd.

Asahi Food & Healthcare Co.,Ltd.
Wakodo Co., Ltd.

Beijing Beer Asahi Co. Ltd.
Hangzhou Xihu Beer Asahi
Co., Ltd.
Yantai Beer Tsingtao Asahi
Co., Ltd.
Schweppes Australia Pty
LimitedAsahi Beer U.S.A., Inc.

55.0
51.0
100.0
100.0

Production andmarketing of foods
Cargo transportation
Operation of bars andrestaurants
Brewing and sales ofbeer
Brewing and sales ofbeer
Brewing of beer
Production andmarketing of soft drinks
Sales of beer

Notes:
1. Shareholding percentages include shares held indirectly.
2. The Company made LB Co., Ltd. (Tokyo) a wholly owned subsidiary via the acquisition on
November 8, 2010 of 32.1% of its shares.
3. The Company made LB Co., Ltd. (Nagoya) a wholly owned subsidiary via the acquisition on
November 8, 2010 of 3.0% of its shares.
4. The Company made Amano Jitsugyo Co., Ltd. a wholly owned subsidiary via the acquisition on
December 17, 2010 of 20.0% of its shares.
5. On January 1, 2010, Asahi Food Create, Ltd. absorbed the subsidiaries Sumida River Brewing
Company and Asahi Beer Annex Company.

13(8) Acquisition or Disposal of Other Company Shares, Equity Stakes and Stock
Acquisition Rights
A.

The Company acquired 6.5% of the common shares (indirect) of the holding
company of Ting Hsin International Group, Ting Hsin (Cayman Islands) Holding
Corporation, through private placement in line with a resolution at a meeting of theBoard of Directors on September 28, 2010. The purchase was conducted throughAI Beverage Holding Co. Ltd., a wholly owned subsidiary of the Company.

B.

On November 19, 2010, following approval of a resolution at a meeting of theBoard of Directors on September 28, 2010, Asahi Breweries, Ltd. assigned 80,008
shares of common stock in Tingyi-Asahi Beverages Holding Co., Ltd. to Ting Hsin
(Cayman Islands) Holding Corporation via AI Beverage Holding Co Ltd. This gave
the Company an equity stake (indirect) of 32.0% in Tingyi-Asahi Beverages
Holding Co., Ltd.

(9) Transfer of operations from other companies
In accordance with a business purchase agreement concluded with House Foods
Corporation on April 8, 2010, Asahi Soft Drinks Co., Ltd. took over the production andmarketing of mineral water sold under that company’s “Rokko no Oishii Mizu” brandas of May 31 of the same year. The purchase price for the transaction was ¥5,300
million.

14

(10) Principal Operations(As of December 31, 2010)

The Asahi Group’s principal operations and products are as listed below:
Principal
operations

Principal products
Asahi Super Dry, Asahi The Master, Asahi Premium Draft Beer Jukusen,
Asahi Style Free, Asahi Honnama Draft, Asahi Honnama Aqua Blue,

Alcoholic
Beverages

Clear Asahi, Asahi Off, Asahi Mugishibori, Asahi Strong Off,Asahi Kutsurogi-Jikomi <4VG> (beers and beer type of beverages)
Kanoka, Daigoro, Ichibanfuda, Satsuma Tsukasa (shochu)
Asahi Slat, Asahi Cocktail Partner, Asahi Chu-hi Kajitsu-no-Shunkan,
Asahi Sparx, Black Nikka Clear Highball (low-alcohol beverages)
Taketsuru, Black Nikka Clear Blend, Single Malt Yoichi (whisky)Sainte Neige, Louis Latour, Lanson, Zonin, Caliterra, ALMADEN, Gancia (wine)
Mitsuya Cider, Wilkinson, Bireley’s,
WONDA, Asahi Juroku-Cha, Asahi TeaO,

Soft Drinks

Asahi Ikkyu-Chaba Oolong-Cha, Asahi Shokuji No Abura Ni Kono Ippon,
Asahi Fujisan-no Vanadium Ten-Nen-Sui, Asahi Rokko no Oishii Mizu,
Asahi Super H2O
EBIOS, Dear-Natura, Slim Up Slim,
MINTIA, BALANCEUP, Ippon Manzoku Bar,

Foods

Hai Hai, Gun Gun, Goo-Goo Kitchen, Gyunyuya-san no Kohii,
Oshibori Wetty, Siccarol,
Mutenka-misoshiru, Nyumen, Shunkan Bishoku, Soup Days15

(11) Principal Offices and Factories
Asahi
Breweries,
Ltd.

Registeredhead office(As of December 31, 2010)
23-1, Azumabashi 1-chome, Sumida-ku, Tokyo

Regional
sales offices

Hokkaido Regional Headquarters (Sapporo),
Tohoku Regional Headquarters (Sendai),Tokyo Metropolitan Headquarters for On-Premise Retailers(Chuo-ku, Tokyo),
Chubu Regional Headquarters (Nagoya),
Hokuriku Regional Headquarters (Kanazawa),
Kinkiken Regional Headquarters (Osaka),
Chugoku Regional Headquarters (Hiroshima),
Shikoku Regional Headquarters (Takamatsu),
Kyushu Regional Headquarters (Fukuoka)

Production
facilities

Hokkaido Brewery (Sapporo),
Fukushima Brewery (Motomiya, Fukushima Prefecture),
Ibaraki Brewery (Moriya, Ibaraki Prefecture),
Kanagawa Brewery (Minami-ashigara, Kanagawa Prefecture),
Nagoya Brewery (Nagoya),
Suita Brewery (Suita, Osaka Prefecture),
Nishinomiya Brewery (Nishinomiya, Hyogo Prefecture),
Shikoku Brewery (Saijo, Ehime Prefecture),
Hakata Brewery (Fukuoka)

Laboratories

Development Laboratories for Alcoholic Beverages,
Research Laboratories of Brewing Technology,
Research & Development Laboratories for Packaging,Research Laboratories for Food Technology,
Research Laboratories for Food Safety Chemistry,
Research & Development Laboratories for Sustainable Value
Creation,
Research Laboratories for Fundamental Technology of Food(all in Moriya, Ibaraki Prefecture)

Overseas
offices

Coordination Division for China Business (China),
North America Office (U.S.A.),
Europe Branch (U.K.)

16

Subsidiaries Domestic

The Nikka Whisky Distilling Co., Ltd.
Headquarters: Minato-ku, Tokyo
Sainte Neige Wine Co., Ltd.
Headquarters: Yamanashi, Yamanashi Prefecture
Asahi Soft Drinks Co., Ltd.
Headquarters: Sumida-ku, Tokyo
Asahi Food & Healthcare Co., Ltd.
Headquarters: Sumida-ku, Tokyo
Wakodo Co., Ltd.
Headquarters: Chiyoda-ku, Tokyo
Amano Jitsugyo Co., Ltd.
Headquarters: Fukuyama, Hiroshima Prefecture

Overseas

Beijing Beer Asahi Co. Ltd. (China)
Hangzhou Xihu Beer Asahi Co., Ltd. (China)
Yantai Beer Tsingtao Asahi Co., Ltd. (China)
Schweppes Australia Pty Limited (Australia)
Asahi Beer U.S.A., Inc. (U.S.A.)(12) Employees(As of December 31, 2010)
A. Employees of the Asahi Group(Consolidated)

Business segment

Number of employees

Alcoholic Beverages

7,036 (down 245)

Soft Drinks

5,045 (down 324)

Foods

1,540 (up 41)

Other Businesses

3,091 (down 76)

Total

16,712 (down 604)

Note: Figures in parentheses indicate increases or decreases from the end of the previous term.

B. Employees of Asahi Breweries, Ltd.
Full-time
employees
3,576 (down 143)

(Non-consolidated)

Average age

Average years of service

40.9

15.2

Average annual
remuneration¥8,795,364

Notes:
1. Figures in parentheses indicate increases or decreases from the end of the previous term.
2. Full-time employees include 178 persons seconded to the Company from other companies.
3. In addition to the employees enumerated above, the Company employs 166 persons on a term
contract basis.

17

(13) Overview of Other Significant Asahi Group Activities
Research and Development
R&D operations have principally involved the development of new products andtechnologies to reinforce the Group’s existing businesses and to foster new businessdevelopment. Notable R&D achievements in the year under review are outlined below:yIn the field of packaging technology, Asahi Soft Drinks Co., Ltd. has developed
a PET bottle based on a universal design for environment load reduction. Thesebottles not only reduce both material usage and weight by approximately 24%
when compared with previous products, but they have been designed such thatthe cap is easier to open and the bottle can be held more securely while being
drunk from. As a result, they simultaneously help to minimize the Group’s
environmental footprint and enhance user convenience. From 2011, the bottles
will be successively phased in for tea beverages, starting with “Asahi JurokuCha”, thus contributing to the conservation of resources and lower CO2
emissions.

y

In cooperation with the National Agricultural Research Center for Kyushu
Okinawa Region (under the National Agriculture and Food Research
Organization), the Group has developed a new combined sugar/bioethanol
production process and begun testing it at a special pilot plant on Okinawa
Prefecture’ s Ie island. Using a new variety of high-biomass sugarcane capableof producing 50% more biomass, this process not only produces the sameamount of sugar as conventional methods, but it also delivers high volumes ofbioethanol at low cost and with no requirement for fossil fuels at any stage.
Thanks to this breakthrough, the process was selected by the Ministry ofAgriculture, Forestry and Fisheries as one of its top ten research topics for 2010,and much is expected from promising technology in many fields, not the least ofwhich being the reduction of greenhouse gas emissions.

Corporate Social Responsibility (CSR)
Together with its stakeholders, the Asahi Group is constantly on the lookout for
new ways in which it can proactively discharge its social responsibilities. In line withthis approach, the Group updated its basic CSR policy in January and is now focusing
on such priority areas as environmental conservation and social contribution activities.
y

As part of its environmental conservation activities, the Group formulated its
Environmental Vision 2020 in March 2010 in order to bolster Group-wide
environmental preservation. This policy focuses on four key themes – namely,
Building a Low Carbon Society, Building a Recycling-Based Society,
Conserving Biodiversity and Spreading Awareness of the Gift of Nature. Given
that its business relies on water, grain and other gifts of nature, the Group takes
18

biodiversity in particularly very seriously, and in recognition of this fact, hasdeclared its commitment to the conservation thereof. In order to ensure progress
towards a sustainable society, the Group will strive to reduce the environmental
footprint of its business operations; to develop closer bonds with the members ofsuch a society, including its next generations; and to approach conservation
efforts with a shared Group-wide perspective.
yAmong its social contribution activities, the Group donated one yen for every
can of “Asahi Super Dry” sold to Japanese regional organizations that arededicated to preserving the country’s natural and cultural assets. Begun in 2009and dubbed the “Refreshingly Sustainable” project, this initiative seeks tostrengthen local community relations while boosting corporate value by fulfilling
the Group’s social responsibility through business activities. Total donations in
the first phase amounted to ¥1,508,874,176 (with ¥828,129,448 thereof from theyear under review).
Other significant Asahi Group activities are as follows.
A. On January 1, 2011, Company subsidiaries LB Co., Ltd. (Tokyo) and LB Co.,
Ltd. (Nagoya) merged with the former as the surviving company.
B. On January 11, 2011, the Company assigned all of its 10,919,480 shares in
Haitai Beverage Co., Ltd. to LG Household & Health Care Ltd.

19

2. Overview of the Company(1) Shares Outstanding(As of December 31, 2010)
A. Total number of authorized shares

972,305,309

B. Total number of issued shares

483,585,862

C. Number of shareholders

131,262(Increased by 11,354 from the end of the previous term)
D. Major shareholders
Shareholders’ investment in the Company
Number ofshares held(in hundreds)

Percentage ofshares held(%)

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

250,214

5.4

Japan Trustee Services Bank, Ltd. (Trust Account)

224,179

4.8

Asahi Kasei Corporation

187,853

4.0

The Dai-ichi Life Insurance Company, Limited

169,200

3.6

Fukoku Mutual Life Insurance Company

168,830

3.6

JP Morgan Chase Bank 380055

107,578

2.3

Sumitomo Mitsui Banking Corporation

90,280

1.9

The Sumitomo Trust & Banking Co., Ltd.

81,2601.7

State Street Bank and Trust Company

71,1291.5

Sumitomo Life Insurance Company

70,9001.5

1,421,424

30.5

Total

Notes:
1. The Company holds treasury stock numbering 18,220,056 shares. However, the Company is
excluded from the above list of major shareholders.
2. Shareholding percentages are calculated based on the total number of issued shares less the numberof shares in treasury stock.

20

(2) Status of Stock Acquisition Rights, etc.
A. Stock acquisition rights held by Directors and Corporate Auditors of theCompany, granted as part of remuneration for execution of their duties(As of December 31, 2010)
1) Stock option system based on
acquisition of treasury stock2) Stock option system based onsubscription rights

Date of issuance resolution
Class and number of sharessubject to stock acquisitionrightsMarch 29, 2001

March 28, 2002

Shares of common stock: 16,000

Shares of common stock: 18,600

Fee for exercise of options¥1,185 per share¥1,090 per share

Exercisable period
Conditions for exercise of
options

January 1, 2005 to March 28, 2011

January 1, 2005 to March 27, 2012

• The options are exercisable even after
the resignation of Directors or
Corporate Auditors, as the case maybe.
• The options may be passed on toheirs.
The
options shall be cancelled if a•holder is dismissed for certain
specified reasons.
• Any assignment or pledging of theoptions is prohibited.

• The options are exercisable even after
the resignation of Directors or
Corporate Auditors, as the case maybe.
• The options may be passed on toheirs.
The
options shall be cancelled if a•holder is dismissed for certain
specified reasons.
• Any assignment or pledging of theoptions is prohibited.

Situation concerning the holding of stock acquisition rights by Directors and Corporate Auditors
Directors• Number of shares subject to stock• Number of shares subject to stock(except Outside Directors)
acquisition rights: 13,800
acquisition rights: 16,000
Numberof holders: 3
Numberofholders:2••• Number of shares subject to stock• Number of shares subject to stock
Outside Directors
acquisition rights: —acquisition rights: —Numberof holders: —Numberofholders:—••• Number of shares subject to stock• Number of shares subject to stock
Corporate Auditors
acquisition rights: 4,800
acquisition rights: —Numberof holders: 1
Numberofholders:—••21

Date of issuance resolution
Number of stock acquisitionrightsClass and number of sharessubject to stock acquisitionrightsFee for exercise of stockacquisition rights
Exercisable period
Conditions for exercise ofstock acquisition rights

3) First issue of stock acquisitionrights4) Second issue of stock acquisitionrightsMarch 28, 2003

March 30, 2004
20

950

Shares of common stock: 20,000

Shares of common stock: 95,000¥830 per share¥1,205 per share

March 28, 2005 to March 27, 2013

March 30, 2006 to March 29, 2014

• The options are exercisable evenafter the resignation of Directors or
Corporate Auditors, as the case maybe.
• The options may be passed on toheirs.
• The options shall be cancelled if aholder is dismissed for certain
specified reasons.
• Any assignment or pledging of theoptions is prohibited.

• The options are exercisable evenafter the resignation of Directors or
Corporate Auditors, as the case maybe.
• The options may be passed on toheirs.
• The options shall be cancelled if aholder is dismissed for certain
specified reasons.
• Any assignment or pledging of theoptions is prohibited.

Situation concerning the holding of stock acquisition rights by Directors and Corporate Auditors
Directors• Number of stock acquisition rights:• Number of stock acquisition rights:(except Outside Directors)
400—
Numberof shares subject to stock
Numberofsharessubject
to
stock
•
•
acquisition rights: 40,000
acquisition rights: —• Number of holders: 3• Number of holders: —Numberofstockacquisitionrights:• Number of stock acquisition rights:•
Outside Directors——• Number of shares subject to stock• Number of shares subject to stockacquisition rights: —acquisition rights: —• Number of holders: —• Number of holders: —• Number of stock acquisition rights:• Number of stock acquisition rights:
Corporate Auditors
550
20• Number of shares subject to stock• Number of shares subject to stockacquisition rights: 55,000
acquisition rights: 20,000• Number of holders: 4• Number of holders: 2

22

Date of issuance resolution
Number of stock acquisitionrightsClass and number of sharessubject to stock acquisitionrightsFee for exercise of stockacquisition rights
Exercisable period
Conditions for exercise ofstock acquisition rights

5) Third issue of stock acquisitionrights6) Fourth issue of stock acquisitionrightsMarch 30, 2005

March 30, 2006
1,200

1,700

Shares of common stock: 120,000

Shares of common stock: 170,000¥1,374 per share¥1,688 per share

March 30, 2007 to March 29, 2015

March 30, 2008 to March 29, 2016

• The options are exercisable evenafter the resignation of Directors or
Corporate Auditors, as the case maybe.
• The options may be passed on toheirs.
• Any assignment or transfer of thestock acquisition rights is subject toapproval of the Board of Directors.

• The options are exercisable evenafter the resignation of Directors or
Corporate Auditors, as the case maybe.
• The options may be passed on toheirs.
• Any assignment or transfer of thestock acquisition rights is subject toapproval of the Board of Directors.

Situation concerning the holding of stock acquisition rights by Directors and Corporate Auditors
Directors• Number of stock acquisition rights:• Number of stock acquisition rights:(except Outside Directors)
1,050
550
• Number of shares subject to stock• Number of shares subject to stockacquisition rights: 105,000
acquisition rights: 55,000
Numberof holders: 7
Numberofholders:4••• Number of stock acquisition rights:• Number of stock acquisition rights:
Outside Directors——
Numberof shares subject to stock
Numberofsharessubject
to
stock
•
•
acquisition rights: —acquisition rights: —• Number of holders: —• Number of holders: —Numberofstockacquisitionrights:• Number of stock acquisition rights:•
Corporate Auditors
650
650• Number of shares subject to stock• Number of shares subject to stockacquisition rights: 65,000
acquisition rights: 65,000• Number of holders: 5• Number of holders: 5

23

B. Significant items regarding other stock acquisition rights
Overview of Euroyen conditional convertible bonds with stock acquisition rights
1) Euroyen conditional convertible
bonds with stock acquisition rights
maturing in 2023

2) Euroyen conditional convertible
bonds with stock acquisition rights
maturing in 2028

Date of issuance resolution

May 13, 2008

May 13, 2008

Date of issue
Outstanding amount of bonds
with stock acquisition rights

May 29, 2008

May 29, 2008
¥35,144 million

Details concerning the stock acquisition rights
Number of stock acquisition Total of 35,000 and the number
rightscalculated by dividing the total facevalue of the substitute bonds with stockacquisition rights by ¥1,000,000
Class and number of shares
Shares of common stock: 16,611,295
subject to stock acquisitionrightsFee for exercise of stock¥2,107 per shareacquisition rights
Exercisable period
June 12, 2008 to May 12, 2023
Conditions for exercise ofstock acquisition rights

Conditions under which theCompany may acquire
stock acquisition rights• Certain stock acquisition rights may
not be exercised• Prior to May 29, 2011, but only when
the closing price of the Company’scommon stock for 20 of the last 30
trading days (including the last
trading day) exceeds 125% of theconversion price (¥2,107) as of thelast trading date of each quarter. In
such cases, exercise is possible, in
principle, during the following
quarter.
• On or after May 29, 2011, theCompany may acquire all of thebonds after notifying thebondholders.
• The acquisition date shall be at least
60 but no more than 75 days from thenotification date.

24¥35,000 million

Total of 35,000 and the number
calculated by dividing the total facevalue of the substitute bonds with stockacquisition rights by ¥1,000,000
Shares of common stock: 17,073,170¥2,050 per share
June 12, 2008 to May 12, 2028
• Certain stock acquisition rights may
not be exercised• Prior to May 29, 2014, but only when
the closing price of the Company’scommon stock for 20 of the last 30
trading days (including the last
trading day) exceeds 125% of theconversion price (¥2,050) as of thelast trading date of each quarter. In
such cases, exercise is possible, in
principle, during the following
quarter.
• On or after May 29, 2014, theCompany may acquire all of thebonds after notifying thebondholders.
• The acquisition date shall be at least
60 but no more than 75 days from thenotification date.

(3) Directors and Corporate Auditors of the Company
A. Directors and Corporate Auditors(As of December 31, 2010)
Name

Areas of responsibility and significant
concurrent positions held by Director or
Corporate Auditor

Position

Hitoshi Ogita

Chairman of the Board andRepresentative Director

Naoki Izumiya

President and Representative
Director
Executive Vice President andRepresentative Director

Chairman of the Board of Asahi Beer Arts
Foundation
Outside Director of Imperial Hotel, Ltd.

Kazuo MotoyamaGroup Headquarters (Corporate Planning
Department, Public Relations Department,
Department of Agribusiness Development andLogistics Department)
Director of LB Co., Ltd. (Tokyo)

Masatoshi Takahashi

Senior Managing Director
Senior Managing Corporate
Officer

Akiyoshi Koji

Managing Director
Managing Corporate Officer

Domestic Marketing Headquarters of theCompany
Outside Director of Orion Breweries, Ltd.
Group Headquarters (Human Resources
Department, Finance Department, IT Strategy &BPM Department)
Supervisor of Tsingtao Brewery Co., Ltd.

Noriyuki Karasawa

Managing Director
Managing Corporate Officer

Senior General Manager of Production
Headquarters of the Company
Director of The Nikka Whisky Distilling Co., Ltd.
Director of LB Co., Ltd. (Tokyo)
Director of LB Co., Ltd. (Nagoya)

Katsuyuki Kawatsura

Managing Director
Managing Corporate Officer

Group Headquarters (Quality Assurance
Department) and Senior General Manager ofResearch & Development Headquarters of theCompany
Chairman of the Board of Asahi Breweries
Foundation

Toshihiko Nagao
Toshio Mori

Director
Corporate Officer

Senior General Manager of Liquor Sales &Marketing Headquarters

Director

Group Food BusinessCorporate Officer

Director of Asahi Food & Healthcare Co., Ltd.
Director of Wakodo Co., Ltd.
Director of Amano Jitsugyo Co., Ltd.

Toshio Kodato

Director

Group International Business and Senior General
Manager of International Headquarters of theCompany

Corporate Officer

Vice Chairman of Tingyi-Asahi Beverages
Holding Co., Ltd.
Director of Schweppes Australia Pty Limited

25

Name
Yoshihiro Tonozuka
Mariko Bando

Areas of responsibility and significant
concurrent positions held by Director or
Corporate Auditor

Position
Director

Group Soft Drinks BusinessCorporate Officer

Director of Asahi Soft Drinks Co., Ltd.

Outside Director

President of Showa Women’s University
Director of Showa Women’s University
Director of The Institute of Women’s Culture,
Showa Women’s University
Chairman of the Board of Rural Women
Empowerment and Life Improvement Association
Outside Director of Asahi Mutual Life Insurance
Company

Naoki Tanaka

Outside Director

President of Center for International Public Policy
Studies
Chairman of Financial System Council, Financial
Services Agency
Chairman of Postal Services Privatization
Committee

Yoshihiro Goto

Standing Corporate Auditor

Corporate Auditor of Asahi Soft Drinks Co., Ltd.
Corporate Auditor of Wakodo Co., Ltd.

Yoshifumi Nishino

Standing Corporate Auditor

Corporate Auditor of The Nikka Whisky
Distilling Co., Ltd.
Corporate Auditor of Asahi Food & HealthcareCo., Ltd.
Corporate Auditor of Amano Jitsugyo Co., Ltd.

Takahide Sakurai

Outside Corporate Auditor

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

Naoto Nakamura

Outside Corporate Auditor

Partner and Attorney at Law of Nakamura,Tsunoda & Matsumoto Law OfficeOutside Corporate Auditor of Mitsui & Co., Ltd.

Tadashi Ishizaki

Outside Corporate Auditor

Professor, Faculty of Commerce, Chuo University

Notes:
1. Directors Mariko Bando and Naoki Tanaka are Outside Directors as defined in Item 15, Article 2 of
the Companies Act.
2. Corporate Auditors Takahide Sakurai, Naoto Nakamura and Tadashi Ishizaki are Outside Corporate
Auditors as defined in Item 16, Article 2 of the Companies Act.
3. The Company designated Outside Directors Mariko Bando and Naoki Tanaka and Outside Corporate
Auditors Takahide Sakurai, Naoto Nakamura and Tadashi Ishizaki as Independent Directors/Auditors
as defined by the Tokyo Stock Exchange and the Osaka Securities Exchange and reported to saidexchanges thereof.
4. Corporate Auditor Yoshihiro Goto was formerly Director in charge of finance of the Company and has
considerable expertise in finance and accounting.
5. Corporate Auditor Naoto Nakamura who is an attorney at law is jurisprudent, among others, tocorporate legal affairs; he also has considerable expertise in finance and accounting.
6. Corporate Auditor Tadashi Ishizaki has carried out research on accounting for many years as auniversity professor; he has considerable expertise in finance and accounting.
7. Katsuyuki Kawatsura, Toshio Mori, Toshio Kodato and Yoshihiro Tonozuka were newly elected as
Directors at the 86th Annual General Meeting of Shareholders held on March 26, 2010, and allassumed their respective offices.
26

8. The following director, having retained his office as of the day after conclusion the above-mentioned
86th Annual General Meeting of Shareholders, retired during the year under review.

Name
Nobuo Yamaguchi

Position uponretirement
OutsideDirector

Significant concurrent
positions held uponretirement
Honorary Chairman and
Representative Director of
Asahi Kasei Corporation

Date ofretirement

Reason for
retirement

September 14,
2010

DemiseOutside Director of Nippon
Television Network Corp.
Outside Director of The
Shoko Chukin Bank, Ltd.
Outside Corporate Auditorof The Yomiuri Shimbun
Holdings
9. In addition to the above, the retirement from significant concurrent positions held by Directors or
Corporate Auditors during the year under review are detailed below.

Name
Naoki Izumiya

Kazuo Motoyama

Toshio Kodato

Position
President andRepresentative
Director

Significant concurrent positions
held by Director or Corporate
AuditorDirector of Amano Jitsugyo Co., Ltd.

Date of retirement
March 19, 2010

Director of Wakodo Co., Ltd.

March 30, 2010

Director of Asahi Food & HealthcareCo., Ltd.

March 31, 2010

Director of Tingyi-Asahi Beverages
Holding Co., Ltd.

May 7, 2010

Executive Vice
President andRepresentative
Director

Director of Asahi Logistics, Ltd.

March 19, 2010

Director of Asahi Soft Drinks Co., Ltd.

March 24, 2010

Director of Schweppes Australia Pty
LimitedMarch 26, 2010

Director

Director of Asahi Beer U.S.A., Inc.

April 1, 2010

Director

President and Representative Director

March 17, 2010

Corporate
Officerand Director

Corporate
Officer
Yoshihiro Tonozuka

Naoki Tanaka

of LB Co., Ltd. (Tokyo)

Outside Director Member and Deputy Chairman of Fiscal April 26, 2010
System Council, Ministry of Finance(Reference) Corporate Officers other than the above are as follows.
Position

Name

Managing Corporate
Officer

Yuji Ninomiya, Akira Matsunobu, Fumio Yamasaki, Kenji Taniguchi,
Masafumi Tanino, Takayoshi Kanaya, Hideaki Takemoto

Corporate Officer

Norio Naito, Shoji Tsumura, Takami Maruyama, Katsutoshi Takahashi,
Shinichi Hirano, Seiichi Ishikawa, Kenkichi Aoki, Hirohisa Shibuya, Suguru
Nohara, Hiroshi Katagiri, Kazunori Shibata, Shiro Ikeda, Kiminari Maruta,
Yukihiro Shiraishi, Yukio Kakegai, Kazuya Arakeda, Hiroshi Kawashita,
Yoshihide Okuda

27

B. Remuneration paid to Directors and Corporate Auditors
Basic remuneration
Category

Number of
persons
remunerated

Total amount of
remuneration paid(yen)

Total amount
(yen)

Bonus
Number of
persons
remunerated

Total amount of
remuneration paid(yen)

Directors

17457,320,000

17132,600,000

589,920,000[of which, Outside Directors][3][29,400,000][3][8,500,000][37,900,000]

5

96,000,000——

96,000,000[3][32,400,000]——[32,400,000]

Corporate Auditors[of which, Outside Corporate
Auditors]

Notes:
1. The figures above include Directors Kouichi Ikeda, Masahiko Osawa and Shin Iwakami, who
retired at the conclusion of the 86th Annual General Meeting of Shareholders held on March 26,
2010, and also Director Nobuo Yamaguchi, who passed away on September 14, 2010 and was thus
retired.
2. A resolution authorizing payments associated with the termination of the retirement bonus system
to be paid at the time of retirement was passed at the 83rd Annual General Meeting of Shareholders
held on March 27, 2007. As of the end of the fiscal year under review, the anticipated total amountof future payments was as follows:
Total of ¥42,000,000 to four Directors
Total of ¥33,000,000 to three Outside Corporate Auditors
Final payments totaling ¥6 million are due to be paid to one Director who is scheduled to retire at
the conclusion of the 87th Annual General Meeting of Shareholders to be held on March 25, 2011.
3. The total amount of Directors’ remuneration is limited to ¥760 million (including ¥50 million for
Outside Directors) per year according to the resolution passed at the 83rd Annual General Meetingof Shareholders held on March 27, 2007.
4. The total amount of Corporate Auditors’ remuneration is limited to ¥120 million (including ¥40
million for Outside Corporate Auditors) per year according to the resolution passed at the 83rd
Annual General Meeting of Shareholders held on March 27, 2007.

28

C. Policies concerning the setting of remuneration paid to Directors andCorporate Auditors
Directors’ and Corporate Auditors’ remuneration amounts are set within the total
amount of remuneration resolved in advance at a Shareholders’ Meeting. Furthermore,
Directors’ remuneration is set in line with a resolution at a meeting of the Board of
Directors, and Corporate Auditors’ remuneration is set by discussion by the Corporate
Auditors thereof. When remuneration -related resolutions are being made by the Boardof Directors, the Compensation Committee, having Outside Directors making up half of
its membership, acts as an advisory body to the Board of Directors, evaluating thecontent of said resolutions in the interests of greater transparency and objectivity.
It should be noted that the retirement bonus system and stock option system wereboth discontinued in 2007.
In the interests of setting Directors’ remuneration in a reasonable manner given
roles and responsibilities, the system for doing so takes into consideration each
Director’s motivational abilities in terms of ongoing enhancement of corporation
performance and value in addition to the recruitment of talented persons.
In specific terms, remuneration comprises basic remuneration (a fixed monthly
amount) and bonuses (yearly performance-linked amounts), and each item is determinedusing survey data prepared by external specialist organizations and based on duties andstatus as Director or Outside Director. In addition, bonuses are raised or lowered basedon consolidated operating income as the main index.
In the interests of setting Corporate Auditors’ remuneration in a reasonable
manner given roles and responsibilities, the system for doing so takes the recruitment of
talented persons into consideration.
In specific terms, remuneration comprises only basic remuneration (a fixedmonthly amount), and it is determined by discussion by the Corporate Auditors using
survey data prepared by external specialist organizations and based on duties and status
as Corporate Auditor or Outside Corporate Auditor.

29

D. Outside Directors and Outside Corporate Auditorsy Major activities of Outside Directors and Outside Corporate Auditors
No. of Board of
Corporate
Auditors
meetings
attendedCategory

Name

No. of Board of
Directors meetings
attended

OutsideDirector

Nobuo Yamaguchi

6/7—

Mr. Yamaguchi participated in
discussions as necessary,
primarily from the perspective of
his wealth of experience as amanager.

Mariko Bando

11/11

—

Ms. Bando participated in
discussions as necessary,
primarily from the perspective ofher wealth of experience as an
educator.

Naoki Tanaka

11/11

—

Mr. Tanaka participated in
discussions as necessary,
primarily from the perspective of
his wealth of experience as anexpert in economic policy.

Takahide Sakurai

11/11

7/7

Mr. Sakurai participated in
discussions as necessary,
primarily from the perspective of
his wealth of experience as amanager.

Naoto Nakamura

10/11

7/7

Mr. Nakamura participated in
discussions as necessary,
primarily from his expert
perspective as an attorney at law.

Tadashi Ishizaki

11/11

7/7

Dr. Ishizaki participated in
discussions as necessary,
primarily from his expert
perspective as a scholar ofaccounting.

OutsideCorporate
AuditorForm of participation

Note:
Director Nobuo Yamaguchi passed away on September 14, 2010 and was thus retired, and the numberof meetings held during his tenure is therefore different from that of other Outside Directors andOutside Corporate Auditors.

y Summary of agreements limiting liability
The Company has entered into an agreement with each of its Outside Directors andOutside Corporate Auditors limiting his/her liability for damages as prescribed in
Paragraph 1, Article 423 of the Companies Act, to either ¥20,000,000 or theminimum amount stipulated by applicable laws and regulations, whichever is higher.

30

(4) Independent Auditor
A. Name of the Independent Auditor

KPMG AZSA LLC
Note: KPMG AZSA & Co. became KPMG AZSA LLC on July 1, 2010 pursuant to a change inclassification.

B.

Remuneration paid to the Independent Auditor for the fiscal year under review
Amount payable

Remuneration paid for the fiscal year under review¥189 million
Total of cash and other financial profits payable by the Company and¥404 million
its subsidiaries to the Independent Auditor
Notes:
1. In its agreement with the Independent Auditor, the Company makes no distinction between the
remuneration that it pays for auditing services governed by the Companies Act and for auditing
services governed by the Financial Instruments and Exchange Act. Consequently, the amount ¥189
million shown above is a sum of these two amounts.
2. All subsidiaries which are subject to statutory audit by an independent auditor have been audited by
KPMG AZSA LLC.

C. Nature of non-audit professional services provided by the Independent Auditor

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

D. Company Policy regarding dismissal of or decision not to reappoint the Independent
Auditor

Article 340 of the Companies Act stipulates that the Board of Corporate Auditors
shall be entitled to dismiss the Independent Auditor for reasons stipulated therein. In
addition, when it is reasonably recognized that the Independent Auditor is no longer
able to execute its duties in an appropriate manner, the Company, with the prior consent
of, or a request by, the Board of Corporate Auditors, shall offer to the Shareholders’Meeting a resolution to dismiss or not to reappoint the Independent Auditor.

31

3. Systems to Ensure Appropriate Execution of Directors’ Duties in
Conformity With Laws and Regulations and the Articles ofIncorporation, and Other Systems to Ensure Appropriate Business
Operations
The Board of Directors passed the following resolution with respect to the abovementioned systems:
The Company has adopted the following corporate philosophy: “The Asahi Groupaims to satisfy its customers with the highest levels of quality and integrity, while
contributing to the promotion of healthy living and enrichment of the society
worldwide.” To make these aims a reality, the Company shall:•establish, in accordance with the Companies Act and the Enforcement Regulationsof the Companies Act, the following basic policies (the “Basic Policies”) to
improve systems designed to ensure appropriate business operations of theCompany and its subsidiaries (the “Group Companies”) (the “Internal Control”);•

recognize that it is the Representative Director(s) who shall assume the ultimate
responsibility for the improvement of the Internal Control in accordance with thisresolution and demand the Representative Director(s) to cause the Directors andCorporate Officers, through the respective departments they are in charge of, todevelop and fully enforce individual internal regulations and manuals required
based on the Basic Policies; and•take steps to maintain and enhance the effectiveness of the Internal Control byreviewing the Basic Policies and relevant internal regulations and manuals, etc. ina timely and appropriate manner in accordance with changes in conditions andcircumstances.

<System to ensure execution of duties by Directors and employees in conformity withlaws and regulations and the Articles of Incorporation of the Company>A.

In accordance with a statement of “fair and transparent corporate ethics” asstipulated in its Corporate Action Guidelines, the Company shall establish the“Regulations on Corporate Ethics for the Asahi Group” and procure its Directors,
Corporate Auditors and employees abide by these regulations.

B.

The Company shall establish the “Corporate Ethics Committee for the Asahi
Group,” which will oversee the compliance affairs of the Asahi Group. One of thecommittee’s members shall be an outside attorney-at-law.

C.

A Corporate Officer of the Company in charge of compliance shall have theauthority to manage compliance-related risks within the Asahi Group. The Generaland Legal Affairs Management Department shall handle day-to-day tasks of
implementation of the compliance program.
32

D.

The Company shall assign one person as compliance-promotion personnel in eachof the business establishments of the Company and the Group Companies tooversee the promotion of compliance in each business establishment. In
conjunction with the Company’s Legal Section and the General Affairs Department
at each business establishment of the Group Companies, all compliance-promotion
personnel shall endeavor to disseminate legal knowledge and to heighten a generalawareness of importance of compliance in each business establishment.

E.

The Company shall establish a “Clean Line System” for employees of the Asahi
Group, enabling them to blow the whistle on illicit behavior of others to a specificsection of the Company or a designated outside attorney-at-law.

F.

The Company shall establish a “Basic Policy on Procurement” addressing mutual
cooperation for fair deals and social responsibilities between the Company andsuppliers and a “Clean Line System for Suppliers”enabling suppliers to blow awhistle on illicit behavior of employees of the Company to a specific section of theCompany. The Company shall inform and spell out these measures to its suppliersin a bid to enable the Company to improve and develop the system of the Internal
Control in cooperation with its suppliers.

G.

To ensure antisocial forces do not exert any undue influence on the Group, allrelevant information shall be shared within the Asahi Group and the Company
shall establish an internal system on the measures. The Company shall also
cooperate closely with industry bodies, local communities, the police and otherexternal specialist organizations in this area.

H.

The operational details of the aforementioned agencies and systems shall bespelled out under a separately prepared set of internal regulations entitled “Basic
Regulations on Corporate Ethics of the Asahi Group.”<System to ensure the preservation and management of information related to
execution of duties by Directors>
A.

Information related to execution of duties by Directors shall be properly preserved
and managed in accordance with document-management regulations and otherrelated regulations and manuals.

B.

The aforementioned information shall be preserved and managed in a way
accessible by Directors and Corporate Auditors for inspection at any time.

C.

Control over the clerical tasks related to preservation and management of theforegoing information shall be determined by individual relevant regulations.

<Regulations and other organizational structures to manage risk of loss>A.

The Company shall develop and adopt basic regulations related to risk
33management and shall affirm such regulations as the highest standards governing
risk management within the Asahi Group. It shall also develop and adopt an
operational manual on risk management and disseminate the same among all overthe Group.
B.

In addition to having the appropriate departments manage risk in their respective
areas, the Company shall establish the “Asahi Group Risk Management
Committee” as a vehicle for comprehensive risk management across the entire
Asahi Group. This committee shall periodically analyze and evaluate risks inaccordance with the regulations and manuals cited in the previous paragraph and,
when necessary, carry out comprehensive reviews of the risk management system.
An utmost attention shall be paid to the risk of failing to maintain product quality.
As food and drink manufacturers, the Asahi Group strongly recognizes their social
responsibility to consumers to ensure the safety of their products.

C.

In the event of any major accident, disaster or scandal, the Company shall establish
a crisis-response meeting chaired by a Representative Director.

<System to ensure efficient execution of duties by Directors>
A.

To ensure efficient performance of duties by Directors, the Board of Directors shalldivide duties in a reasonable way to be delegated to different Directors and shallappoint appropriate persons as Corporate Officers in charge of different divisions.

B.

The Company shall establish standards on authority stipulating rules of delegationof power and for a mutual checks-and-balances mechanism among different
divisions.

C.

The Company shall ensure effective utilization of the system of the Corporate
Strategy Board and the Business Unit Management Board.

D.

To maximize operational efficiency, the Company shall utilize indices that provide
an objective and rational way of measuring its management and control ofoperations; and it shall employ a unified system of follow-up and evaluation.

<System to ensure appropriate operations of the corporate group consisting of theCompany and its parent (if any) and its subsidiaries>
A.

All systems required for the Internal Control, including those for compliance andrisk management, shall apply comprehensively across the entire Asahi Group. As
the corporate headquarters of the Group, the Company shall manage and operate
the said systems of the Group Companies in accordance with the conditions andcircumstances individual companies are facing.

B.

The Company’s Internal Auditing Division shall conduct audits of the Group
Companies. In addition, regarding the Internal Control related to financial
34

reporting, the evaluation organization established within the Company shallconduct the evaluation on the Internal Control of the Group Companies and submit
the relevant reports.
C.

Each of the Group Companies shall be required to provide reports on performanceof its operations including risk-related information, to the Corporate Auditors of
the Company.

D.

Decision-making authority related to business activities of the Group Companies
shall be subject to the document entitled “Standards of Authority for the Group
Companies.”<Securement of employees in the event that Corporate Auditors request staff to assist
in their auditing duties>
The Board of the Corporate Auditors shall retain staff from among employees of
the Company, for assistance in the day-to-day activities of the Corporate Auditors.
<Independence of employees assigned to assist the Corporate Auditors from the
Directors>
A.

When a member of the staff of the Board of Corporate Auditors, as stipulated in theprevious paragraph, receives an order from a Corporate Auditor in relation toauditing duties, he/she shall not be subject to directives or orders from Directors orother employees regarding that order.

B.

Any issuance of orders to, personnel transfers of, merit evaluations of, or
reprimands of a member of the staff of the Board of Corporate Auditors shallrequire the prior concurrence of Corporate Auditors.

<System for Directors’ and employees’ reporting to Corporate Auditors; system
relating to other reporting to Corporate Auditors>
A.

Directors and employees shall report regularly to Corporate Auditors on mattersrelated to the Internal Control, and shall report on an as-needed basis when asignificant event occurs. When necessary, the Corporate Auditors shall be entitled
to request reports from the Directors and employees (including from Directors andemployees of the Group Companies).

B.

Directors shall ensure that Corporate Auditors have every opportunity toparticipate in the Board of Directors meetings, the Corporate Strategy Board
meetings and the Business Unit Management Board meetings. Directors shallprovide details of the agenda items of such meetings beforehand for Corporate
Auditors.

C.

Corporate Auditors shall at all times have the right to review the minutes ofimportant meetings, documents of approval, etc.
35

<Other systems ensuring effective auditing by Corporate Auditors>
To ensure the effectiveness of auditing activities, Directors shall ensure
opportunities for Corporate Auditors to exchange information and opinions regularly
with members of the Internal Auditing Division of the Company and with the
Independent Auditor.

The corporate governance system of the Company is shown in the chart below.

36

4. Basic Policy Concerning the Persons Who Control Decisions on the
Company's Financial and Business Policy<Basic policy>
According to the Company's view, the persons who control decisions on its
financial and business policy must properly grasp various matters concerning its
business, including the initiatives to “create appealing products,” to “care about quality
and craftsmanship” and to “convey the sense of joy to customers,” which form thesource of the corporate value of the Group, and other tangible and intangible
management resources thereof, potential effects of forward-looking measures and otheritems that constitute the Group's corporate value, and must enable to maintain andenhance the 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 a so-called hostile takeover, which is pursued
without approval from the Board of Directors (hereinafter referred to as the “Board”)
provided that such takeover is intended to contribute to the enhancement of theCompany's 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 the will of the shareholders as a whole.
It shall be noted, however, that there are not a few cases of large-scale sharepurchases that would not contribute to the enhancement of the corporate value and thecommon interests of shareholders of a company, including ones that would, in light of
their purposes, cause obvious damage to the corporate value and the common interestsof shareholders or could effectively coerce shareholders to sell their shares, ones that thepurchaser does not provide information and/or time reasonably necessary for the target
company’s board of directors and shareholders to review and examine details of the
proposed purchase or for the target company’s board of directors to make an alternative
proposal, and ones where the target company’s board of directors would have to
conduct negotiation with the purchaser so as to seek more favorable terms than thoseinitially proposed by the purchaser.
The person who intends to conduct a large-scale purchase of shares in the Company
must have an understanding of the source of the Group's corporate value and have thecapability to maintain and enhance it in the medium and long term; otherwise, theGroup's corporate value and the common interests of shareholders would be damaged.
Based on the factors and matters stated above, the Company determines that it isvital to have in place a framework for preventing large-scale share purchases that would
undermine the Group's corporate value and the common interests of shareholders.
37

<A framework that contributes to the realization of the basic policy>
A. Special Measures Contributing to Realization of the Basic Policy
In its “Long-Term Vision 2015”, the Company sets out its aim to grow as anenterprise with a trusted reputation for global quality that transforms the bounty ofnature into emotionally inspiring foods and beverages. Measures set forth in“Medium-Term Management Plan 2012” in order to achieve this aim got underway
in earnest in 2010.
“Medium-Term Management Plan 2012” targets further enhancement of theCompany’s strengths in craftsmanship as a means of boosting corporate value; in
addition, it also looks to raise quality in all aspects of business – from products, tomanagement, to human resources – to world class levels and to raise theprofitability of existing businesses in order to develop a new growth path.
Meanwhile, the Company has adopted “Share the Kando” as its Corporate
Brand Statement, underlining its commitment to clearly define the value that theGroup delivers to customers and to society as a whole.
The Company is convinced that by diligently implementing “Medium-Term
Management Plan 2012” in pursuit of the goals of “Long-Term Vision 2015”, andtherefore, by successfully delivering the value called for by the Corporate Brand
Statement based on the raison d’être engrained in the Group’s corporate philosophy,
it can significantly strengthen the relationship of trust between the Group and its
stakeholders, and in addition, can secure and enhance corporate value, and thus, thecommon interests of shareholders.
Furthermore, the Company also plans to further strengthen its corporate
governance in the execution of the above-mentioned measures.
By introducing a corporate officer (Sikko-Yakuin) system on March 30, 2000,
the Company separated the management decision-making and execution functions
with a view to speeding up execution of business decisions and endeavored tostrengthen the supervisory function of the Board. In addition, the Company
operates a system that facilitates checks by outside directors/auditors by electing
Outside Directors/Corporate Auditors and by establishing the “Nomination
Committee” and the “Compensation Committee,” both including Outside Directors
as their members, as a sub-body of the Board.
In order to further clarify the accountability of the management to shareholders,the Company shortened the term of office of its directors from two years to one
year at the 83rd Annual General Meeting of Shareholders held on March 27, 2007.

38

B. Efforts to prevent decisions on the Company’s financial and business policy
from being controlled by any person who is inappropriate according to thebasic policy (plan against large-scale purchase of shares in the Company)
With the approval at the meeting of the Board held on February 8, 2010, theCompany resolved to update its countermeasures against large-scale purchases ofthe shares in the company (hereinafter, “the Plan”) in light of the fundamental
approach to corporate control as set forth in <Basic policy> above, and the updated
Plan was approved at the 86th Annual General Meeting of Shareholders held on
March 26, 2010.

The Plan shall be applicable to any of the following two types of Purchase(s).
i) A purchase of shares in the Company as a result of which the holder’s(shareholder’s) holding ratio will rise to 20% or more of the total outstanding
shares in the Company; andii) A tender offer for shares in the Company as a result of which the purchaser’s
shareholding ratio targeted by the tender offer and the holding ratio of “persons
in special relationship,” when combined, will be 20% or more of the total
outstanding shares in the Company.
A Purchaser contemplating a Purchase shall be requested to provide in advanceof commencement of the Purchase a statement of intent containing a written pledge
to follow the procedures set forth in the Plan in conducting the Purchase. Thereafter,
the Purchaser shall be requested to provide, in a format set forth by the Company, aPurchase Prospectus containing the information necessary to evaluate the content
of the Purchase. The Company shall present the content of the Purchase Prospectus
to the Independent Committee whose members shall consist of Outside Directors,
Outside Corporate Auditors and/or experts, all of whom are independent ofmanagement of the Company. The content shall be assessed and evaluated by thiscommittee. On its own accord, the Independent Committee will obtain advice fromindependent third parties (including financial advisers, CPAs, lawyers, consultants
and other experts) and, on the basis of such advice, will assess and evaluate thecontent of the Purchase, evaluate alternative proposals offered by the Company’s
Board, negotiate with the Purchaser, and disclose information to shareholders of theCompany. If the Independent Committee determines that the information provided
by the Purchaser does not meet the criteria for the Required Information (as definedin the Plan), it may, either directly or indirectly, request the Purchaser to submit
additional information within an appropriate period of time as designated by the
Independent Committee. In this event, the Purchaser shall submit such additional
information within the period of time provided.
39

The Independent Committee will make recommendations to the Board to
execute the Plan to allot gratis the Stock Acquisition Rights (as defined in the Plan)
to shareholders of the Company if the Independent Committee has determined that
the Purchase meets either of the requirements for exercise of the Plan and it isappropriate to so exercise: e.g. in case the Purchaser has not observed and followed
the procedures specified in the Plan or in case, as a result of review by theCommittee, the Committee concludes the Purchase could cause obvious damage to
the Company’s corporate value and the common interests of shareholders in theopinion of the Committee. In the event that the Independent Committee cannot
easily determine whether or not the Purchase as set forth in the Plan (a) could cause
obvious damage to the Company’s corporate value and the common interests ofshareholders; (b) could result in implementation of a coercive two-tier purchasemethod or any other method by which the shareholders could be forced to sell theirshares; or (c) would be notably inadequate or inappropriate in light of thefundamental value of the Company, said Independent Committee may attach an
opinion to its recommendation that the will of the shareholders concerning
execution of the gratis Allotment of the Stock Acquisition Rights should be
confirmed at a shareholders’ meeting. These Stock Acquisition Rights shall entitle
their holders to acquire one share of the common stock in the Company by
exercising the rights at a price to be determined by the Company’s Board - whichshall be set at a level between a minimum of one (1) yen and a maximum of onehalf the market value per share of the Company’s stock. In addition, these rights
shall contain conditions that exclude the Purchaser from exercising the rights andshall also be accompanied by provisions that enable the Company to acquire one(1) Stock Acquisition Right in exchange for one (1) share of the Company’s stockfrom persons other than the Purchaser.
While paying utmost respect to the recommendation made by the Independent
Committee as stated above, the Company’s Board shall, as the organizational bodyauthorized to do so under the Companies Act, promptly decide whether or not to
execute the gratis Allotment of the Stock Acquisition Rights. In the event that theBoard deems confirmation of the will of the shareholders to be appropriate andconvenes a shareholders’ meeting for this purpose, the Board shall, as theauthorized body as described above and in accordance with the resolution of said
meeting, issue a resolution concerning execution or non-execution of the gratis
Allotment of the Stock Acquisition Rights.
The Plan shall be effective from the close of the 86th Annual General Meetingof Shareholders held on March 26, 2010 until the close of the Company’s annual
general meeting of shareholders that concerns the last one of the Company’sbusiness years that end within three years from the close of the 86th Meeting.
40

Notwithstanding the above, the Company may abrogate the Plan even before
the effective period expires upon a decision thereof by the Board. Also, the Board
may amend or alter the Plan during its effective period subject to approval by the
Independent Committee.
Under the Plan, shareholders of the Company remain directly and specificallyunaffected unless and until the gratis Allotment of the Stock Acquisition Rights is
executed. On the other hand, if the Plan is set in motion and a gratis Allotment of
the Stock Acquisition Rights is executed, the shares held by a shareholder of theCompany will be subject to dilution unless he/she carries out the procedures
required for the exercise of the Stock Acquisition Rights (note, however, nodilution shall occur in case the Company exercises option of acquisition of theStock Acquisition Rights for shares in the Company).
<Judgment of the Company’s Board regarding the specific measures and reasons
therefor>The special measures intended to contribute to realization of the Basic Polices
described above in A of <A framework that contributes to the realization of the basic
policy> conform to the basic policy of the Company as described above, are fullycompatible with the corporate value and the common interests of shareholders of theCompany, and are never implemented for the purpose of maintaining the status of
Directors and Corporate Auditors of the Company.
The following elements having been taken into consideration and incorporated into
the design of the Plan described above in B of <A framework that contributes to therealization of the basic policy>, the Board of the Company believes that the Plan
conforms to the basic policy of the Company as described above and meets thecorporate value and the common interests of shareholders of the Company and that it isnever for the purpose of maintaining the status of Directors and Corporate Auditors of
the Company.
A. Respect for Shareholders’ Will•

The Plan was approved at the 86th Annual General Meeting of Shareholders held on
March 26, 2010.

•

The effective period of the Plan is limited, running until the close of the Company’s
annual general meeting of shareholders that concerns the last one of the Company’sbusiness years that end within three years from the close of the above annual
general meeting of shareholders.

•

The term of office of Directors is one year, allowing the shareholders to have theirintentions reflected through elections of Directors every year.

41

B. Respect for Judgment of Outside Parties with High Degree of Independence
and Information Disclosure
In updating the Plan, the Company has established the Independent Committee
as a body to make a substantial judgment objectively with regard to mattersconcerning the operation of the Plan such as its exercise of, abrogation of,amendment to or alteration of the Plan for and on behalf of shareholders with aview to preventing arbitrary decisions by the Board. The members of the
Independent Committee consisting of 3 or more are appointed by the Board fromamong Outside Directors, Outside Corporate Auditors and/or experts who meet therequirements stipulated in the Company’s internal rules for the Independent
Committee.
Once a Purchase has been made, the Independent Committee shall offer arecommendation as to whether or not the Purchase would damage the Company’s
corporate value and the common interests of shareholders, as stated above. Then,the Board shall honor the Independent Committee’s recommendation andsubsequently make a resolution under the Companies Act.
In this way, the Independent Committee shall maintain close surveillance overthe Board to prevent any arbitrary decision by the Board and disclose toshareholders information concerning the details of its judgment, thus ensuring that
the Plan will be handled in a transparent manner within the limits necessary forcontributing to the enhancement of the Company’s corporate value and thecommon interests of shareholders.
C. Setting of Reasonable and Objective Conditions
The Plan is designed in ways not to be triggered unless and until reasonable
and objective conditions are met, and ensures a structure to eliminate arbitrary
triggering by the Board.

42

CONSOLIDATED BALANCE SHEETSMillion yen
As of December 31,
2010(Reference)
As of December 31,
2009

ASSETS
Current assets:
Cash and deposits
Notes and accounts receivable
Inventories
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets

11,534274,379
95,358
14,62230,842(5,685)421,052

19,583
274,558
97,442
11,17532,952(7,665)428,047

Fixed assets:
Tangible fixed assets:
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Land
Lease assets
Construction in progress
Other tangible fixed assets
Total tangible fixed assets

173,729
131,52247,548
182,569
14,9206,714
95557,100

189,152
160,924
48,929184,433
9,142
6,382
142
599,108

Intangible fixed assets:
Goodwill
Other intangible fixed assets
Total intangible fixed assets

84,17237,640121,812100,31440,427140,741

235,6856,602
8,611
30,45029,942(5,900)305,392
984,305
1,405,358

206,364
4,975
10,73021,021
26,995(4,332)
265,755
1,005,605
1,433,652

Investments and other assets:
Investment securities
Long-term loans receivable
Long-term prepaid expenses
Deferred tax assets
Other investments
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

43

CONSOLIDATED BALANCE SHEETSMillion yen
As of December 31,
2010(Reference)
As of December 31,
2009

102,948
69,25915,000
4,011
119,338
8,583
32,49352,56056,46019,60914,0002,817
2,789
499,874

100,998
141,220
15,0002,031
123,470
8,914
24,096
49,83652,462
20,42930,0002,559
2,761
573,780

135,144
78,01912,16324,738130,156
75,4997,341
24,252597
4,831
37,318292,813792,688602
4,860
39,457282,169
855,949

LIABILITIES AND NET ASSETSLIABILITIESCurrent liabilities:
Notes and trade accounts payable
Short-term borrowings
Bonds due within one year
Lease obligations
Alcohol tax payable
Consumption taxes payable
Income taxes payable
Other accounts payable
Accrued expenses
Deposits received
Commercial paper
Allowance for employees’ bonuses
Other current liabilities
Total current liabilities
Long-term liabilities:
Bonds
Long-term borrowings
Lease obligations
Allowance for employees’ severance and retirement benefits
Allowance for retirement benefits for directors and corporate
auditors
Deferred tax liabilities
Other long-term liabilities
Total long-term liabilities
Total liabilities

44

CONSOLIDATED BALANCE SHEETSMillion yen
As of December 31,
2010(Reference)
As of December 31,
2009

NET ASSETS
Shareholders’ equity:
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity

182,531
150,910295,228(28,721)599,948

182,531
151,048
252,146(29,283)
556,443

Valuation and translation adjustments:
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total valuation and translation adjustments

198
693
11,351
12,2432,444(6)14,591
17,029478
612,670
1,405,358

4,229
577,702
1,433,652

Minority interests
Total net assets
Total liabilities and net assets

45

CONSOLIDATED STATEMENTS OF INCOME
Million yen
For the year ended
December 31, 2010

(Reference)
For the year ended
December 31, 2009

1,489,460
943,323564,137
450,787
95,34913,178314
1,389

1,472,468
958,444514,024
431,247
82,777
15,943
328
2,426

9,846
—
1,627
7,384
4,328
3,056
101,142
36,067653
1,738
32,336
179
726
—
432
44,744
5,991
1,068
1,004
1,265
13,573
19,780—2,061
92,464

8,512
1,814
2,860
8,173
4,628
3,544
90,546
19,558778
388
16,090
478
912
910
—
22,027
9,954
487
788
—
8,317
—
1,401
1,077
88,077

Income taxes－current

53,54742,369

Income taxes－deferred(12,625)(898)

Minority interests in net gains (losses) of non-consolidated
subsidiaries
Net income(1,536)53,080(1,037)47,644

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income:Interest income
Dividend income
Equity in net income of non-consolidated subsidiaries andaffiliated companies
Foreign exchange gains
Other non-operating income
Non-operating expenses:
Interest expenses
Other non-operating expenses
Recurring profit
Extraordinary gains:
Gain on sales of fixed assets
Gain on sales of investment securities
Gain on sales of subsidiaries and affiliates' stocks
Reversal of allowance for doubtful accounts
Gain on change in equity
Compensation for recall
Other extraordinary gains
Extraordinary losses:
Loss on sales and disposal of fixed assets
Loss on sales of investment securities
Loss on devaluation of investment securities
Loss on liquidation of subsidiaries and affiliates
Impairment loss on fixed assets
Loss on factory restructurings
Loss on contribution of securities to retirement benefit trust
Other extraordinary losses
Income before income taxes and minority interests

46

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFor the year ended December 31, 2010

Million yen
Shareholders' equity

Capital stock
Balance as of Dec. 31, 2009

Capital surplus

Retained earnings

151,048

252,146

182,531

Total
shareholders'equityTreasury stock(29,283)

556,443

Changes during the term
Dividends(9,999)(9,999)Net income (loss)

53,08053,080Acquisition of treasury stock
Disposal of treasury stock

(138)

(22)

(22)

584

446

Change of scope of equity
method14

14

Change resulting from mergerof non-consolidated subsidiary

(12)

(12)

Other changes in nonshareholders' equity items
during the term (net)Total changes during the term
Balance as of Dec. 31, 2010

—

(138)

43,081561

43,505

182,531

150,910295,228(28,721)599,948

Minority
interests

Total
net assets

Valuation and translation adjustments

Balance as of Dec. 31, 2009

Valuationdifference on
available-forsale securities

Deferred gains orlosses on hedges

Foreign currencytranslation
adjustments

Total valuationand translation
adjustments

2,444

(6)

14,591

17,0294,229

577,702

Changes during the term
Dividends(9,999)Net income (loss)

53,080Acquisition of treasury stock(22)

Disposal of treasury stock

446

Change of scope of equity
method14

Change resulting from mergerof non-consolidated subsidiary(12)

Other changes in nonshareholders' equity items
during the term (net)(2,246)700(3,240)(4,786)(3,751)(8,537)

Total changes during the term

(2,246)700(3,240)(4,786)(3,751)

34,967

Balance as of Dec. 31, 2010

198

693

11,351

12,243

478

612,670

47

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Basis for Preparation of Consolidated Financial Statements(1) Items in the scope of the consolidation
A. Number of consolidated subsidiaries: 51
Principal consolidated subsidiaries
Please see Item 1 of the “Business Report” {“Overview of Operations of Asahi Group,
section (7) “Principal Subsidiaries”}, for a summary of the current status of principal
consolidated subsidiaries.
The companies removed from the scope of consolidation during the fiscal year underreview were Asahi Breweries Insurance Services, West Japan Asahi Draft Beer Service,Ltd., Nikka Seidaru Co. Ltd., and N.S. CARGO Inc.
B. Principal non-consolidated subsidiaries:
DEMBALL LIMITED
Rationale for exclusion from the scope of consolidation:
The non-consolidated subsidiaries including the one mentioned above are all small interms of total assets, sales, net profit or loss, and retained earnings (amountcorresponding to equity ownership); they have no material impact as a whole on the
consolidated financial statements and are thus excluded from the scope of consolidation.
(2) Items concerning application of the equity method
A. Number of companies subject to application of the equity method: 41
Non-consolidated subsidiary subject to application of the equity method: 1
Asahi Beer Engineering Co., Ltd.
Affiliates subject to application of the equity method: 40
These include Asahi Business Solutions Corp., Shenzhen Tsingtao Beer Asahi Co., Ltd.,
Asahi & Mercuries Co., Ltd., Tsingtao Brewery Co., Ltd., China Foods Investment
Corp., Jiangsu Shengguo Wine Co. Ltd, Tingyi-Asahi Beverages Holding Co., Ltd. and33 other affiliated companies.
Companies that became subject to application of the equity method in the fiscal year
under review were as follows: five affiliates of Tingyi-Asahi Beverages Holding Co.,
Ltd. and China Foods Investment Corp. due to their incorporation; and Jiangsu
Shengguo Wine Co. Ltd. following an increase in its materiality.
B. Principal non-consolidated subsidiaries and affiliates not subject to application of the equity
method48

Non-consolidated subsidiaries:

DEMBALL LIMITED

Affiliates:

Asahi Business Produce Co., Ltd.

Rationale for not applying the equity method to the non-consolidated subsidiaries andaffiliates:
The companies in question have extremely slight impact on net profit or loss andretained earnings (amount corresponding to the Company’s equity ownership); they haveno material impact as a whole on the consolidated financial statements and thus theequity method was not applied.
(3) Accounting period of the consolidated subsidiaries
The accounting period of Asahi Beer U.S.A., Inc., is October 1 to September 30 and isdifferent from that of the Company. Thus, a provisional fiscal year ending at December 31(calculated by a reasonable procedure in accordance with legitimate accounting methods)
was used for Asahi Beer U.S.A., Inc. for consolidation purposes. All other consolidated
subsidiaries have the same accounting period as the Company.
(4) Significant accounting policies
A. Policies and methods of valuation for significant assets
1) Valuation basis and method for securities:
Held-to-maturity debt securities
Held-to-maturity debt securities are stated at the amortized cost.
Other securities
Securities with market value
Carried at the average market value for the month immediately preceding theconsolidated balance sheet date (related valuation differences are directly
charged or credited to net assets, and the cost of securities sold is computed by
the moving-average method).
Securities without market value
Stated at cost based on the moving-average method.
2) Valuation basis and method for derivatives:
Market price method
3) Valuation basis and method for inventories:
Merchandise, finished goods and semi-finished goods are stated at cost determined
mainly by the weighted-average method (write-downs to net selling value regarded as
decreased profitability).
Raw materials and supplies are stated at cost determined mainly by the movingaverage method (write-downs to net selling value regarded as decreased profitability).
49

B. Depreciation methods for major assets:
Tangible fixed assets (excluding lease assets):
1) Production facilities of the Company
Assets acquired on or before March 31, 2007: the former straight-line method
Assets acquired on or after April 1, 2007: the straight-line method
2) Other tangible fixed assets of the Company
Assets acquired on or before March 31, 2007: the former declining-balance method
Assets acquired on or after April 1, 2007: the declining-balance method
3) Consolidated subsidiaries
Assets acquired on or before March 31, 2007: mainly the former declining-balancemethodAssets acquired on or after April 1, 2007: mainly the declining-balance method
Buildings (exclusive of fixtures), acquired on or after April 1, 1998
Assets acquired on or before March 31, 2007: mainly the former straight-line
methodAssets acquired on or after April 1, 2007: the straight-line method
The estimated useful lives of tangible fixed assets are based mainly on the same
standards as those specified in the Corporation Tax Act.
Intangible fixed assets (excluding lease assets):
Intangible fixed assets are amortized using the straight-line method.
The estimated useful lives of the assets are based mainly on the same standards as
those specified in the Corporation Tax Act.
Software for internal use is amortized by the straight-line method over a useful life of
5 years. Trademark rights are generally amortized over 20 years using the straight-line
method.
Lease assets:
Finance leases that do not transfer ownership rights are amortized to a residual valueof zero using the straight-line method, with the lease period as the estimated usefullife.
Of the finance leases that do not transfer ownership rights, those that began before
December 31, 2008 are treated similarly as those applied to regular operating leases.
C. Accounting criteria for major allowances:
Allowance for doubtful accounts:
The allowance for doubtful accounts consists of the individually estimateduncollectible amounts with respect to certain identified doubtful receivables and the50amounts calculated using the rate of actual collection losses with respect to the otherreceivables.
Allowance for employees’ severance and retirement benefits:
The Company and its consolidated subsidiaries make provisions in the necessaryamount of allowance for employees’ severance and retirement benefits deemed tohave accrued during the term, based on each company’s projected benefit obligations
and the pension fund balance as of the end of the fiscal year under review.
Actuarial gain or loss is amortized, beginning in the year following the year in which
the gain or loss is recognized, by the straight-line method for a given number of years(generally 10 years) within the employees’ average remaining years of service.
Prior service costs are amortized by the straight-line method within the employees’
average remaining years of service (generally 10 years) from the time they arise.
(Change in accounting policy)
The Company has applied “Partial Amendments to Accounting Standard for
Retirement Benefits (Part3) (ASBJ Statement No. 19 published July 31, 2008)
beginning with the fiscal year under review. This change has had no effect on operating
income, recurring profit and income before income taxes and minority interests.
Allowance for retirement benefits for directors and corporate auditors:
Some of the consolidated subsidiaries calculate the required amount as of the end of
the fiscal year under review, based on internal regulations, in preparation for
payment of retirement benefits to directors and corporate auditors.
Allowance for employees’ bonuses:
An allowance for employees’ bonuses is provided at the estimated amount applicableto the fiscal year under review.
D. Other significant items associated with the preparation of consolidated financial statements
1) Significant hedge accounting method
a. Hedge accounting method
The Company defers gains or losses on its hedges.
For currency swaps, the Company allocates differences in the values of hedging
instruments when such hedges meet all requirements for such allocations. For interest
rate swaps, the Company applies exceptional treatment when the swap in question meetsthe conditions for application of such exceptional treatment.
b. Hedging instruments and hedged items:
Hedging instruments: Currency swaps, foreign exchange contracts and interest rate
swaps
51

Hedged items:

Transactions in foreign currencies and interest on borrowingsc. Hedging policy:
Derivative transactions are used to avoid risks associated with fluctuations in foreignexchange markets and in interest rates and to reduce the costs of financing. It is theCompany’s policy not to engage in speculative transactions that deviate from realdemand or in highly leveraged transactions.
d. Method of evaluating the effectiveness of hedging:
The Company assesses the effectiveness of its hedges by comparing changes in themarket values of the hedged items and of the hedging instruments over the entire
period of the hedge. When the Company allocates differences in the values of hedging
instruments or when it accounts for the value of swaps under exceptional treatment,these determinations allow it to forgo evaluation of the effectiveness of hedges inthese cases.
2) Treatment of consumption taxes
Consumption taxes are mainly excluded from the statements of income, except in thecase of non-deductible consumption taxes related to fixed assets that are charged
when incurred.
(5) Amortization of goodwill
Goodwill is amortized by the straight-line method over a five- to twenty-year period.

(Change in accounting policy)
The Company has applied “Accounting Standard for Business Combinations” (ASBJ
Statement No. 21, published December 26, 2008), “Accounting Standard for Consolidated
Financial Statements” (ASBJ Statement No. 22 published December 26, 2008), “Partial
amendments to Accounting Standard for Research and Development Costs” (ASBJ
Statement No. 23, published December 26, 2008), “Revised Accounting Standard forBusiness Divestitures” (ASBJ Statement No. 7, revised December 26, 2008), “Revised
Accounting Standard for Equity Method of Accounting for Investments” (ASBJ Statement
No. 16 revised, December 26, 2008), and “Revised Guidance on Accounting Standard forBusiness Combinations and Accounting Standard for Business Divestitures” (ASBJ
Guidance No. 10, revised December 26, 2008) beginning with the fiscal year under review.

522. Notes to the Consolidated Balance Sheets(1) Pledged assets and secured liabilities
The following assets have been provided as collateral for short-term borrowings of ¥3,855
million and long-term borrowings of ¥244 million:
Buildings and structures:¥6,128 million

Machinery, equipment and vehicles:¥405 million

Land:¥16,057 million

Total¥22,591 million(2) Accumulated depreciation of tangible fixed assets:¥661,887 million(3) Contingent liabilities
Guarantees:¥650 million

Notes discounted:¥87 million(4) Matured notes at term-end
The balance sheet date for the term fell on a bank holiday, and trade notes with maturity on
the balance sheet date were cleared on the clearing houses the next business day. Current
assets and current liabilities thus respectively include notes receivable and notes payable
with maturity on the balance sheet date as follows:
Notes receivable:¥1,310 million

Notes payable:¥513 million

53

3. Notes to the Consolidated Statements of Income(1) Non-operating expenses
Among non-operating expenses, “Other non-operating expenses” include goodwill
amortization costs of ¥424 million arising in relation to the holding company of a Groupaffiliate accounted for by the equity method.
(2) Impairment losses on fixed assets
In the fiscal year under review, the Group (the Company and its consolidated subsidiaries)
recognized impairment losses in the following asset groups:
Use of asset
Leased asset
OthersLocation of asset
Takatsuki, Osaka Prefecture
and one other―Type of asset
Buildings, structures and land
Goodwill

The Group divides their respective assets, in principle, by individual breweries, plants andother business establishments and determines their groupings based on complementary
relations of cash flows among the various assets. At the same time, however, the Company
and its group companies count each of the individual leased assets and idle assets as a standalone asset group. Headquarters buildings and employee welfare facilities of the Company
and its group companies are categorized as common-use assets, as they do not generate cash
flows on their own.
An impairment loss (¥366 million for buildings and structures, ¥1,229 million for land, and¥11,977 million for goodwill) was recorded as an extraordinary loss corresponding to thedifferences between the recoverable amounts and book values of certain assets. These
differences arose, because: (a) the market value of certain leased assets declined
substantially below book value, prompting the Group to recognize certain amounts invested
as unrecoverable; and (b) a portion of the goodwill booked in the Group’s soft drinks andfood businesses was deemed unrecoverable after a review of the business plan wasundertaken.
The recoverable amount is estimated using the net sales amount or utility value, with the net
sales amount calculated based on the appraised real estate value and the utility value
calculated using a discount rate of between 4.3% and 7.3% on future cash flows.

54

4. Notes to the Consolidated Statements of Changes in Net Assets(1) Total number of the issued shares as of the end of the fiscal year under review
Common stock
As of the end of the fiscal year (Dec. 31, 2010):

483,585,862 shares(2) Dividends from surplus distributed during the fiscal year under review
A. It was resolved at the 86th Annual General Meeting of Shareholders of March 26, 2010 asfollows:
Item related to dividends on common stock
Total amount of dividends:¥5,115 million

Dividend per share:¥11.00Record date:

December 31, 2009

Effective date:

March 29, 2010

B. It was resolved at the Board of Directors Meeting of July 30, 2010 as follows:
Item related to interim dividends on common stock
Total amount of interim dividends:¥4,884 million

Interim dividend per share:¥10.50Record date:June 30, 2010

Effective date:

September 1, 2010

(3) Dividends from surplus to be distributed after the final day of the fiscal year underreview
The following item has been placed on the agenda for approval at the 87th Annual General
Meeting of Shareholders scheduled for March 25, 2011.
Item related to dividends on common stock
Source of dividends:

Retained earnings

Total amount of dividends:¥5,817 million

Dividend per share:¥12.50Record date:

December 31, 2010

Effective date:

March 28, 2011

(4) Number of shares subject to stock acquisition rights upon exercise thereof(as of December 31, 2010)
The First Issue of stock acquisition rights (issued March 28, 2003)
Number of stock acquisition rights:

88

Class and number of shares subject to the stock acquisition rights:
88,000 shares of common stock
Amount to be paid in per share upon exercise of the stock acquisition rights:
Exercise period:¥830

March 28, 2005 to March 27, 2013

55

The Second Issue of stock acquisition rights (issued March 30, 2004)
Number of stock acquisition rights:

4,845

Class and number of shares subject to the stock acquisition rights:
484,500 shares of common stock
Amount to be paid in per share upon exercise of the stock acquisition rights:
Exercise period:¥1,205

March 30, 2006 to March 29, 2014

The Third Issue of stock acquisition rights (issued March 30, 2005)
Number of stock acquisition rights:

5,805

Class and number of shares subject to the stock acquisition rights:
580,500 shares of common stock
Amount to be paid in per share upon exercise of the stock acquisition rights:
Exercise period:¥1,374

March 30, 2007 to March 29, 2015

The Fourth Issue of stock acquisition rights (issued March 30, 2006)
Number of stock acquisition rights:

6,190

Class and number of shares subject to the stock acquisition rights:
619,000 shares of common stock
Amount to be paid in per share upon exercise of the stock acquisition rights:
Exercise period:¥1,688March 30, 2008 to March 29, 201656

5. Notes on Financial Instruments(Additional information)
The Company has applied “Revised Accounting Standard for Financial Instruments” (ASBJ
Statement No.10, revised March 10, 2008) and “Guidance on Disclosures about Fair Value of
Financial Instruments” (ASBJ Guidance No. 19, revised March 10, 2008) beginning with thefiscal year under review.
(1) Financial instruments
A. Policy on handling of financial instruments
The Company and its principal consolidated subsidiaries procure necessary funds via loans
from financial institutions and by issuing commercial paper and bonds while taking into
account the changing business environment. In doing so, the Company and its principal
consolidated subsidiaries consider direct or indirect financing as well as the balance between
short and long-term debt based on fund procurement costs, risk diversification. Looking touse funds efficiently, the Group introduced a cash management system among the Company
and its principal domestic consolidated subsidiaries to reduce consolidated interest-bearing
debt. If surplus funds are generated temporarily, as a result, the Company invests it in safe
financial instruments.
The Company’s policy is to use derivatives trading only to hedge risks to be discussed laterbut not for speculation.
B. Details of financial instruments and risks
Trade receivables, including notes and accounts receivable and long-term loans receivable,
are exposed to client credit risks. Additionally, foreign currency-based trade receivables are
exposed to currency fluctuation risk as well.
Investment securities include equity interests in business partners and bonds to be held tomaturity and are thus exposed to risks of the stock or bond issuer (i.e., the business partner)
as well as market price fluctuation risk. Of these, foreign currency-based investment
securities are exposed to currency fluctuation risk as well.
Trade payables, including notes and trade accounts payable and other accounts payable,
generally have a due date of one year or less. Foreign currency-based trade payables are
exposed to currency fluctuation risk as well.
Commercial paper, borrowings, and bonds are exposed to liquidity risk (i.e., the risk ofbeing unable to make payment on the due date due to deterioration in the funds procurement
environment). Some of the Company’s borrowings are based on variable interest rates, forwhich the Company hedges risks using interest rate swaps. Foreign currency-based
borrowings are exposed to currency fluctuation risk as well.
Derivatives trades include foreign exchange contracts to hedge against foreign exchange
57fluctuation risks related to foreign-currency based receivables and payables, interest rate
swap transactions to hedge against interest rate risks on borrowings, and commodity swap
transactions to hedge against price fluctuation risks when overseas subsidiaries procure raw
materials.
For hedging instruments, hedged items, hedging policy, and method of evaluating theeffectiveness of the hedging for the hedge accounting, please see “Significant hedge
accounting method” within “Significant accounting policies” discussed earlier.
C. Risk management system relating to financial instruments
1) Credit risk management (managing risks related to business partners not fulfilling
contract obligations)
In accordance with accounting rules, guidelines on handling accounting operations, andaccounts receivable management rules, each business division or sales management division
regularly monitors trade receivables and long-term loans to major business partners. The
above divisions also routinely check the management status of deadlines and balances foreach business partner. In collaboration with each of the sales divisions, the Company’s
Finance Department monitors non-performing assets and their collection status.
Consolidated subsidiaries also manage their trading according to the Company’s rules andguidelines to minimize credit risks.
When executing derivatives transactions, the Company as a rule limits its transactions tofinancial institutions with high credit ratings to minimize credit risk.
2) Managing market risks (foreign exchange and interest rate fluctuation risks)
Looking to reduce foreign exchange fluctuation risks on future foreign currency-based
cash flows which the Company has ascertained for specific currencies, the Company has
established a currency hedging policy which primarily uses currency forward contracts
based on the current status and future outlook of the foreign exchange market. The
transactions are being carried out with the approval of the Executives in charge of finance.
The Company also engages in interest rate swap transactions to avoid interest rate
fluctuation risks relating to borrowings.
For investment securities, the Company regularly monitors their market values andfinancial status of the issuers (the Company’s business partners). This is to review the
Company’s holdings on a consistent basis based on its relationship with business partners.
The Finance Department engages in derivatives transactions in accordance with thederivatives transaction management rules which stipulate the transaction policy and trading
authority. Each execution is reported to the Executives in charge of finance. Consolidated
subsidiaries also manage their trading according to the Company’s rules.

583) Managing liquidity risk related to funds procurement (risk of being unable to makepayment on the due date)Since the Company and its principal domestic consolidated subsidiaries have introduced
the cash management system, the Company manages liquidity risks of those companies
participating in this system.
Based on reports from each Department and each company, the Company’s Finance
Department manages liquidity risk by creating and updating its cash management plan asnecessary and by engaging in efficient fund procurement while reducing short-term liquidity.
(2) Market value of financial instruments
Million yen(1) Cash and deposits(2) Notes and accounts receivable
Allowance for doubtful accounts (*1)
Notes and accounts receivable (net)(3) Investment securities
A. Shares in affiliates
B. Held-to-maturity debt securities
C. Other securities(4) Long-term loans receivable (*2)
Allowance for doubtful accounts(*3)
Long-term loans receivable (net)Total assets(1) Notes and trade accounts payable(2) Short-term borrowings(3) Other accounts payable(4) Deposits received(5) Commercial paper(6) Bonds (*4)(7) Long-term borrowings (*5)(8) Lease obligations (*6)
Total liabilities
Derivatives (*7)

Amounts
recorded on the
consolidatedbalance sheets
11,534274,379(5,329)269,049
72,290501
65,787
6,989(3,022)
3,967
423,130
102,948
60,10552,56019,60914,000150,144
87,173
16,174
502,717
1,042

Market value

Difference

11,534—

269,049—

117,400
509
65,787

45,1107—

3,977
468,259
102,948
60,10552,56019,60914,000152,925
88,065
16,850507,0651,042

10
45,128
—
—
—
—
—
2,781
891
675
4,347
—

(*1) Allowances for doubtful accounts recorded under notes and accounts receivable are excluded.
(*2) Long-term loans receivable within one year are included.
(*3) Allowances for doubtful accounts recorded individually under long-term loans receivable areexcluded.
(*4) Bonds due within one year are included.
(*5) Long-term borrowings due within one year are included.
(*6) Lease obligations (current liabilities) are included.
(*7) The net amount of receivables and payables accrued from derivatives transactions are indicated.

Note 1. Calculation methods for deriving market values of financial instruments, items relating
to securities and derivatives transactions

59

Assets(1) Cash and deposits (2) Notes and accounts receivable
Book value is used because these items are settled in a short time, making their market
value about equivalent to their book value.
(3) Investment securities
Market value at financial instruments exchange is used for stock, whereas the value
indicated by the financial institution with which the Company does business is used for
debt securities and others.
(4) Long-term loans receivable
The market value of long-term loans receivable is calculated by discounting the expectedvalue of principal and interest receivable by the interest rate expected if a similar new
loan were to be issued.
Liabilities(1) Notes and trade accounts payable, (2) Short-term borrowings, (3) Other accounts payable,(4) Deposits received, and (5) Commercial paperBook value is used because these items are settled in a short time, making their market
value about equivalent to their book value.
(6) Bonds
For bonds the Company issues, market price is used for those that have a market value
and the price indicated by financial institutions with which the Company does business isused for those without market value.
(7) Long-term borrowings
The market value of long-term borrowings is calculated by taking the total amount ofprincipal and interest and discounting it by the interest rate expected if a new borrowing
were to be taken out, thereby deriving the present value. Long-term borrowings withvariable interest rates are subject to exceptional treatment using interest rate swaps.
These are calculated by discounting the total amount of principal and interest involved in
the interest rate swap concerned by the interest rate deemed appropriate if a similarborrowing were to be taken out.
(8) Lease obligations
The market value of lease obligations is calculated by taking the present value of theobligation concerned – discounting the total amount of principal and interest by theinterest rate expected if a similar, new lease obligation were to be incurred.
Derivatives transactions
The Company considers the price indicated by the financial institution with which it does
business as the market value. However, since derivatives transactions subject to exceptional
treatment using interest rate swaps are processed as part of long-term borrowings subject tohedging, the market value of these derivative transactions are recorded as part of the market
value of the long-term borrowings concerned.
Note 2. Of the other securities and securities of affiliates, those that are unlisted (¥97,106
million recorded on the consolidated balance sheets) do not have a market price andestimating future cash flow is not possible. The Company thus considers that deriving
their market value as being extremely difficult and thus does not include thesesecurities under (3) Investment securities.
60

6. Per share information(1) Net assets per share:¥1,315.51(2) Net income per share:¥114.10

7. Other notes
Figures in amounts of less than one million yen are omitted.

61

Reference: CONSOLIDATED STATEMENTS OF CASH FLOWS (Summary)Million yen

Cash flows from operating activities:
Income before income taxes and minority interests
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for employees' severance
and retirement benefits
Increase (decrease) in allowance for doubtful accounts
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in alcohol tax payable
Other cash flows from operating activities
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities

For the year ended
December 31, 2010

For the year ended
December 31, 2009

92,46459,7095,931

88,07758,372
5,287

2,141
(233)
(255)
1,716
2,255
(4,128)
5,633
165,234
6,964(4,090)(42,499)
125,608

765
(753)
(891)
5,042
(2,820)(4,909)(1,941)
146,229
7,162(4,605)(42,428)
106,358

Cash flows from investing activities:
Purchase of fixed assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of investments in subsidiaries
Payments for transfer of business
Purchase of investments in subsidiaries resulting in change inscope of consolidation
Other cash flows from investing activities
Net cash used in investing activities(30,145)(50,264)
46,488(2,920)(5,339)(58,537)(82,837)
39,329(15,362)——390(41,790)(60,043)(3,185)(180,637)

Cash flows from financing activities:
Increase (decrease) in financial liabilities
Purchase of treasury stock
Cash dividends paid
Other cash flows from financing activities
Net cash provided by (used in) financing activities(78,412)(22)(9,999)(2,393)(90,828)

88,876(31)(9,529)(770)
78,54562

Reference: CONSOLIDATED STATEMENTS OF CASH FLOWS (Summary)Million yen

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents due to change in scopeof consolidation
Increase in cash and cash equivalents resulting from merger
with non-consolidated subsidiaries
Cash and cash equivalents at end of year

63

For the year ended
December 31, 2010

For the year ended
December 31, 2009

(261)
(7,271)
18,082643
4,908
12,697—475

210,813—18,082

NON-CONSOLIDATED BALANCE SHEETSMillion yen
As of December 31,
2010(Reference)
As of December 31,
2009

ASSETS
Current assets:
Cash and deposits
Notes receivable
Accounts receivable
Merchandise and finished goods
Semi-finished goods
Raw materials
Supplies
Short-term loans receivable
Prepaid expenses
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets

3,696
3,040
180,353
9,672
7,325
14,1884,546
21,643
10,096
6,964
8,674(4,634)
265,569

4,749
3,160
185,724
7,985
8,076
15,881
4,414
16,093
9,791
7,439
6,634
(5,894)
264,058

Fixed assets:
Tangible fixed assets:
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Lease assets
Construction in progress
Total tangible fixed assets

112,552
14,616
91,96913
40,069126,074
538
1,363
387,198

127,332
17,128117,85923
41,312
127,692487
3,041
434,878

Intangible fixed assets:
Rights to use of facilities
Trademark rights
SoftwareLease assets
Other intangible fixed assets
Total intangible fixed assets

517
17,6526,858
17
925,055576
18,6157,661
22
626,88264

NON-CONSOLIDATED BALANCE SHEETSMillion yen

Investments and other assets:
Investment securities
Shares in affiliates
Capital invested in affiliates
Long-term loans receivable
Deferred tax assets
Prepaid pension cost
Other investments
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

65

As of December 31,
2010(Reference)
As of December 31,
2009

73,253
293,751
5,219
8,816
19,38912,626
16,249(6,804)
422,501
834,755
1,100,325

81,002
307,796
4,244
7,797
6,985
—
27,515(5,301)430,040
891,802
1,155,860

NON-CONSOLIDATED BALANCE SHEETSMillion yen
As of December 31,
2010(Reference)
As of December 31,
2009

LIABILITIESCurrent liabilities:
Trade accounts payable
Short-term borrowings
Bonds due within one year
Lease obligations
Other accounts payable
Alcohol tax payable
Consumption taxes payable
Income taxes payable
Accrued expenses
Deposits received
Commercial paper
Allowance for employees’ bonuses
Allowance for directors’ and corporate auditors’ bonuses
Other current liabilities
Total current liabilities

55,71842,50015,000219
4,819
110,271
6,545
16,92742,21533,01014,000
1,375
121
326
343,051

54,939106,700
15,000
167
7,944
114,708
6,740
12,05039,071
30,66430,000
1,278
108
370
419,742

Long-term liabilities:
Bonds
Long-term borrowings
Lease obligations
Long-term deposits received
Allowance for employees’ severance and retirement benefits
Other long-term liabilities
Total long-term liabilities
Total liabilities

135,144
71,200366
33,3172,809
208
243,047
586,098

130,156
61,000370
33,726
2,907
386
228,547648,290

LIABILITIES AND NET ASSETS

66

NON-CONSOLIDATED BALANCE SHEETSMillion yen

NET ASSETS
Shareholders’ equity:
Capital stock
Capital surplus
Capital reserve
Other capital surplus
Retained earnings
Other retained earnings
Reserve for reduction in entry of fixed assets
General reserve
Retained earnings carried forward
Treasury stock
Total shareholders’ equity
Valuation and translation adjustments:
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

67

As of December 31,
2010(Reference)
As of December 31,
2009

182,531
159,927
130,292
29,635
199,034
199,034946
175,000
23,087(28,721)
512,771

182,531
160,066
130,292
29,773
191,372
191,372
1,065
155,000
35,306(29,283)
504,686

761
693
1,455
514,226
1,100,325

2,882
—
2,882
507,569
1,155,860

NON-CONSOLIDATED STATEMENTS OF INCOME
Million yen
For the year ended
December 31, 2010

(Reference)
For the year ended
December 31, 2009

963,270
675,160
288,110203,369
84,741
4,898
2,539
—
2,359
4,932
2,637
2,294
84,707
2,223
17
1,653
309
242
—
49,039
4,680
566
989
16,678
0
3,409
1,595
19,778—1,340
37,892985,468
702,016
283,452
204,939
78,513
7,009
3,586
1,620
1,802
6,219
2,955
3,263
79,303
1,711
48
370
383
—
910
21,012
7,453
88
706
4,718
3,207
—
3,435
—
1,401
—
60,002

Income taxes－current

31,19328,278

Income taxes－deferred(10,962)
17,661

1,688
30,036

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income:Interest and dividend income
Foreign exchange gains
Other non-operating income
Non-operating expenses:
Interest expenses
Other non-operating expenses
Recurring profit
Extraordinary gains:
Gain on sales of fixed assets
Gain on sales of investment securities
Reversal of allowance for doubtful accounts
Gain on contribution of securities to retirement benefit trust
Compensation for recall
Extraordinary losses:
Loss on sales and disposal of fixed assets
Loss on sales of investment securities
Loss on devaluation of investment securities
Loss on devaluation of investment in affiliates
Loss on devaluation of equity participation in affiliates
Loss on liquidation of subsidiaries and affiliates
Impairment loss
Loss on factory restructurings
Loss on contribution of securities to retirement benefit trust
Other extraordinary losses
Income before income taxes

Net income68NON-CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFor the year ended December 31, 2010

Million yen
Shareholders' equity
Capital surplus

Capitalstock

Balance as ofDec. 31, 2009

182,531

Capital reserve

Other capitalsurplus

Total capitalsurplus130,292

29,773160,066

Retained earnings
Other retained earnings
Reserve for
Retained
reduction
General reserveearnings
in entry ofcarried forward
fixed assets
1,065

155,000

Total
retainedearnings

35,306

191,372

Dividends(9,999)(9,999)Net income (loss)

17,661

17,661

118—

20,000(20,000)—

Changesduring the term

Acquisition oftreasury stock
Disposal oftreasury stock

(138)

(138)

Reversal of reserve
for reduction inentry of fixed assets(118)

Provision of generalreserve
Other changes in
non-shareholders'equity items during
the term (net)Total changes
during the term

—

—

(138)

(138)

(118)

20,000(12,219)

7,661

Balance as ofDec. 31, 2010

182,531130,292

29,635

159,927946

175,000

23,087

199,034

Shareholders' equity

Balance as ofDec. 31, 2009

Valuation and translation adjustments

Treasury stock

Total
shareholders'equityValuationdifference on
availablefor-salesecurities(29,283)

504,686

2,882

Deferred
Total valuation
gains or losses and translation
on hedges
adjustments

—

2,882

Total
net assets

507,569

Changesduring the term
Dividends(9,999)(9,999)Net income (loss)

17,661

17,661

Acquisition oftreasury stock

(22)

(22)

(22)

Disposal oftreasury stock

584

446

446

Reversal of reserve
for reduction inentry of fixed assets——

Provision of generalreserve——

Other changes in
non-shareholders'equity items during
the term (net)Total changes
during the term

561

Balance as ofDec. 31, 2010

(28,721)(2,120)693(1,427)(1,427)

8,085(2,120)693(1,427)

6,657

512,771

761

693

1,455

514,226

69

NOTES TO THE NON-CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies(1) Valuation basis and method for securities
Investment in subsidiaries and affiliates:
Stated at cost based on the moving-average method.
Other securities
Securities with market value
Carried at the average market value for the month immediately preceding the balance
sheet date (related valuation differences are directly charged or credited to net assets,
and the cost of securities sold is computed by the moving-average method).
Securities without market value
Stated at cost based on the moving-average method.
(2) Valuation basis and method for derivatives
Market price method(3) Valuation basis and method for inventories:
Merchandise, finished goods and semi-finished goods are stated at cost determined by theweighted-average method (write-downs to net selling value regarded as decreased
profitability).
Raw materials and supplies are stated at cost determined by the moving-average method(write-downs to net selling value regarded as decreased profitability).
(4) Depreciation methods for fixed assets:
Tangible fixed assets (excluding lease assets):
A. Production facilities:
Assets acquired on or before March 31, 2007: the former straight-line method
Assets acquired on or after April 1, 2007: the straight-line method
B. Other tangible fixed assets
Assets acquired on or before March 31, 2007: the former declining-balance method
Assets acquired on or after April 1, 2007: the declining-balance method
Buildings (exclusive of fixtures) acquired on or after April 1, 1998:
Assets acquired on or before March 31, 2007: the former straight-line method
Assets acquired on or after April 1, 2007: the straight-line method
The estimated useful lives of the fixed assets are based on the same standards as thosespecified in the Corporation Tax Act.
70

Intangible fixed assets (excluding lease assets):
Intangible fixed assets are amortized using the straight-line method.
The estimated useful lives of the assets are based on the same standards as thosespecified in the Corporation Tax Act.
Software for internal use is amortized by the straight-line method over a useful life of 5
years. Trademark rights are generally amortized over 20 years using the straight-line
method.
Lease assets:
Finance leases that do not transfer ownership rights are amortized to a residual value ofzero using the straight-line method, with the lease period as the estimated useful life.
Of the finance leases that do not transfer ownership rights, those that began before
December 31, 2008 are treated similarly as those applied to regular operating leases.
(5) Accounting criteria for allowances:
Allowance for doubtful accounts:
The allowance for doubtful accounts consists of the individually estimated uncollectible
amounts with respect to certain identified doubtful receivables and the amounts
calculated using the rate of actual collection losses with respect to the other receivables.
Allowance for employees’ severance and retirement benefits:
The Company makes provisions in the necessary amount of allowance for employees’
severance and retirement benefits deemed to have accrued during the term, based on the
Company’s projected benefit obligations and the pension fund balance as of the end of
the fiscal year under review.
Actuarial gain or loss is amortized, beginning in the year following the year in which
the gain or loss is recognized, by the straight-line method for a given number of years(10 years) within the employees’ average remaining years of service.
Prior service costs are amortized by the straight-line method within the employees’
average remaining years of service (10 years) from the time they arise.
(Change in accounting policy)
The Company has applied “Partial Amendments to Accounting Standard for Retirement
Benefits (Part3) (ASBJ Statement No. 19 published July 31, 2008) beginning with thefiscal year under review. This change has had no effect on operating income, recurring
profit and income before income taxes and minority interests.
Allowance for employees’ bonuses:
An allowance for employees’ bonuses is provided at the estimated amount applicable to71the fiscal year under review.
Allowance for directors’ and corporate auditors’ bonuses:
An allowance for directors’ and corporate auditors’ bonuses is provided at the estimatedamount applicable to the fiscal year under review.
(6) Hedging accounting method
A. Hedging accounting method
The Company defers gains or losses on its hedges.
For foreign exchange contracts, the Company allocates differences in the values of hedging
instruments when such hedges meet all requirements for such allocations. For interest rate
swaps, the Company applies exceptional treatment when the swap in question meets theconditions for application of such exceptional treatment.
B. Hedging instruments and hedged items:
Hedging instruments: Foreign exchange contracts and interest rate swaps
Hedged items:

Loans receivable in foreign currencies and interest on
borrowings

C. Hedging policy:
Derivative transactions are used to avoid risks associated with fluctuations in foreignexchange markets and in interest rates and to reduce the costs of financing. It is theCompany’s policy not to engage in speculative transactions that deviate from real demand orin highly leveraged transactions.
D. Method of evaluating the effectiveness of hedging:
The Company assesses the effectiveness of its hedges by comparing changes in the market
values of the hedged items and of the hedging instruments over the entire period of thehedge. When the Company allocates differences in the values of hedging instruments orwhen it accounts for the value of swaps under exceptional treatment, these determinations
allow it to forgo evaluation of the effectiveness of hedges in these cases.
(7) Treatment of consumption taxes:
Consumption taxes are excluded from the statements of income, except in the case of nondeductible consumption taxes related to fixed assets that are charged when incurred.

(Changes in method of presentation)
Owing to an increase in financial materiality, “Prepaid pension cost” (valued at ¥8,956
million as of the previous fiscal year-end), which had previously been included in “Other
investments” under investments and other assets, was classified as a separate item beginningwith the fiscal year under review.
72

2. Notes to the Non-Consolidated Balance Sheets(1) Accumulated depreciation on tangible fixed assets:¥485,195 million(2) Contingent liabilities
A. Guarantees, etc., against bank borrowings
Guarantees:¥17,536 million

B. Guarantees, etc., against derivatives
Guarantees:
Contract amount, etc.:¥6,840 million

Unrealized gains (losses):¥(674) million(3) Matured notes at term-end
The balance sheet date for the term fell on a bank holiday, and trade notes with maturity on
the balance sheet date were cleared on the clearing houses the next business day. Current
assets and current liabilities thus respectively include trade notes receivable and trade notes
payable with maturity on the balance sheet date as follows:
Notes receivable:¥824 million(4) Monetary claims and obligations with affiliates
Short-term monetary claims on affiliates:¥32,699 million

Long-term monetary claims on affiliates:¥3,835 million

Short-term monetary obligations to affiliates:¥34,245 million

73

3. Notes to the Non-Consolidated Statements of Income(1) Transactions with affiliates:
Net sales:¥44,313 million

Purchases:¥78,367 million

Selling, general and administrative expenses:¥31,759 million

Transactions other than operating transactions:¥2,374 million(2) Impairment losses on fixed assets
In the fiscal year under review, the Company recognized impairment losses in the following
asset groups:
Use of asset
Leased asset

Location of asset
Takatsuki, Osaka Prefectureand 1 other locations

Type of asset
Buildings, structures and land

The Company divides its respective assets, in principle, by individual breweries, plants andother business establishments and determines its groupings based on complementary
relations of cash flows among the various assets. At the same time, however, the Company
counts each of the individual leased assets and idle assets as a stand-alone asset group.
Headquarters buildings and employee welfare facilities of the Company are categorized ascommon-use assets, as they do not generate cash flows on their own.
An impairment loss (¥362 million for buildings, ¥3 million for structures, and ¥1,229
million for land) was recorded as an extraordinary loss corresponding to the difference
between the recoverable amount and the book value of certain assets. This difference arose
because the market value of certain leased assets declined substantially below book value,
prompting the Company to recognize certain amounts invested as irrecoverable.
The recoverable amount is estimated using the net sales amount or utility value, with the net
sales amount calculated based on the appraised real estate value.

74

4. Notes to the Non-Consolidated Statements of Changes in Net Assets
Treasury stock
Type of stock

Balance as of the end of
the previous fiscal year
(Dec. 31, 2009)

Common stock

18,576,966

Increase
13,827

Decrease

Balance as of the end of
the fiscal year
under review(Dec. 31, 2010)

370,737

18,220,056(Reasons for change)
The increase in the number of shares was the result of the following:
Increase resulting from purchases of Less-than-One–Unit Shares from shareholders
upon request:

13,827 shares

The decrease in the number of shares was the result of the following:
Decrease resulting from sales of Less-than–One-Unit Shares to shareholders uponrequest:566 shares
Decrease resulting from exercise of stock options:
300,900 shares
Decrease by share exchanges
69,271 shares75

5. Tax effect accounting(1) Deferred tax assets and liabilities
Deferred tax assets
Allowance for doubtful accounts, in excess of tax-deductible amount:
Allowance for employees’ bonuses, non-tax deductible:
Allowance for employees’ severance and retirement benefits,
in excess of tax-deductible amount:
Disapproval of unpaid enterprise taxes:
Loss on devaluation of investment in subsidiaries, non-tax deductible:
Depreciation, in excess of tax-deductible amount:
Loss on establishment of retirement benefit trust, non-tax deductible:
Loss on devaluation of investment securities, non-tax deductible:
Loss on devaluation of capital contributions for subsidiaries,
non-tax deductible:
Impairment loss on fixed assets:
Loss on factory restructurings, non-tax deductible
Amortization of deferred charges, in excess of tax-deductible amount:
Others:Subtotal deferred tax assets:
Valuation allowance:
Total deferred tax assets:¥4,332 million¥525 million¥6,638 million¥1,343 million¥17,979 million¥168 million¥1,482 million¥2,757 million¥5,158 million¥2,992 million¥7,716 million¥41 million¥5,176 million¥56,312 million¥(27,472) million¥28,839 million

Deferred tax liabilities
Reserve for reduction in entry of fixed assets:¥(641) million

Valuation difference on available-for-sale securities:¥(516) million

Deferred gains or losses on hedges¥(469) million

Prepaid pension cost:¥(857) million

Total deferred tax liabilities:¥(2,485) million

Net deferred tax assets:¥26,354 million(2) Effective tax rates before and after application of tax effect accounting
Statutory effective tax rates:

40.4%

Adjustment
Permanent difference (non-deductible), including entertainment expenses:

3.5%

Valuation allowance:

10.2%

Permanent difference (non-taxable), including dividend income:(0.6)%Tax credit:(1.2)%

Others:1.2%

Effective tax rates after application of tax effect accounting:

53.4%

76

6. Notes related to leased fixed assets
Separately from the fixed assets carried on the balance sheets, some sales-related fixtures aretreated based on finance lease agreements that do not transfer ownership rights.
(1) As of the end of the fiscal year under review
Amount equivalent to acquisition costs:¥16,949 million(2) As of the end of the fiscal year under review
Amount equivalent to accumulated depreciation:¥12,864 million(3) As of the end of the fiscal year under review
Amount equivalent to prepaid lease rents:¥4,473 million

7. Per share information(1) Net assets per share:¥1,105.00(2) Net income per share:¥37.97

8. Other notes
Figures in amounts of less than one million yen are omitted.

77

INDEPENDENT AUDITOR’S REPORT
February 3, 2011
To: The Board of Directors
ASAHI BREWERIES, LTD.
KPMG AZSA LLC
Hiroyuki Sakai (Seal)
Designated Limited Liability and Engagement Partner
Certified Public Accountant
Hajime Harada (Seal)
Designated Limited Liability and Engagement Partner
Certified Public Accountant

Yasuyuki Nagasaki (Seal)
Designated Limited Liability and Engagement Partner
Certified Public Accountant
In accordance with the provisions of Paragraph 4, Article 444 of the Companies Act, we haveaudited the consolidated financial statements of ASAHI BREWERIES, LTD. (the “Company”) for the
fiscal year from January 1, 2010 to December 31, 2010. These statements consist of the consolidatedbalance sheets, the consolidated statements of income, the consolidated statements of changes in net
assets, and notes on significant accounting policies used in consolidation. These consolidated financial
statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements based on our audit conducted as Independent Auditor.
We conducted our audit in accordance with generally accepted auditing standards in Japan. Those
auditing standards require that we obtain reasonable assurance that the consolidated financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements, and assessing the accounting principles used, themethods of application thereof, and estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. We believe that our audit provides a reasonablebasis for our opinion.
In our opinion, the foregoing consolidated financial statements present fairly, in all material aspects,
the financial position and results of operations of the Company and its consolidated subsidiaries for theperiod covered by the aforesaid financial statements in conformity with generally accepted accounting
principles in Japan.
Our firm and engagement partners have no interests in the Company requiring disclosure pursuant to
the relevant provisions of the Certified Public Accountants Law of Japan.

78

INDEPENDENT AUDITOR’S REPORT
February 3, 2011
To: The Board of Directors
ASAHI BREWERIES, LTD.
KPMG AZSA LLC
Hiroyuki Sakai (Seal)
Designated Limited Liability and Engagement Partner
Certified Public Accountant

Hajime Harada (Seal)
Designated Limited Liability and Engagement Partner
Certified Public Accountant

Yasuyuki Nagasaki (Seal)
Designated Limited Liability and Engagement Partner
Certified Public Accountant
In accordance with the provisions of Item 1, Paragraph 2, Article 436 of the Companies Act, wehave audited the financial statements of ASAHI BREWERIES, LTD. (the “Company”) for its 87th fiscal
year, the period from January 1, 2010 to December 31, 2010. These statements consist of the nonconsolidated balance sheets, the non-consolidated statements of income, the non-consolidated statementsof changes in net assets, notes on significant accounting policies, and supporting schedules thereto. These
financial statements and supporting schedules thereto are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements and supporting
schedules thereto based on our audit conducted as Independent Auditor.
We conducted our audit in accordance with generally accepted auditing standards in Japan. Those
auditing standards require that we obtain reasonable assurance that the financial statements andsupporting schedules thereto are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements and assessing theaccounting principles used, the methods of application thereof, and estimates made by management, as
well as evaluating the overall presentation of the financial statements and supporting schedules thereto.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the foregoing financial statements and supporting schedules thereto present fairly, inall material aspects, the financial position and results of operations of the Company for the period coveredby the aforesaid financial statements and supporting schedules thereto in conformity with generally
accepted accounting principles in Japan.
Our firm and our engagement partners have no interests in the Company requiring disclosure
pursuant to the relevant provisions of the Certified Public Accountants Law of Japan.

79

REPORT OF THE BOARD OF CORPORATE AUDITORSThe Board of Corporate Auditors has prepared the following report based on the audit reports
prepared by individual Corporate Auditors related to the Directors’ execution of their duties during the87th fiscal year, the period from January 1, 2010 to December 31, 2010, after due discussions andconsultations among the Corporate Auditors.

1. Methods used in audits by the individual Corporate Auditors and by the Board of
Corporate Auditors and content of audits(1) The Board of Corporate Auditors determined the audit policies and division of duties, and received
reports from each Corporate Auditor regarding the status and results of the audits, as well as reports
from the Directors and Independent Auditor on the execution of their duties, and requested
explanations of those reports when necessary.
(2) Each Corporate Auditor sought to achieve mutual understanding with the Directors and other
employees, and strove to collect information and create an audit environment in accordance with theaudit policies and division of duties based on the audit standards established by the Board of
Corporate Auditors. The Corporate Auditors also attended meetings of the Board of Directors andother important meetings, received reports from Directors and other employees regarding theexecution of their duties and requested explanations when necessary, reviewed documents related toimportant decisions, and inspected the operations and property of the head office and other importantbusiness facilities. The Board also oversaw and verified the status of “the development of systems
necessary to ensure that the execution of duties by directors complies with laws and regulations andthe articles of incorporation (internal control systems)” (Item 6, Paragraph 4, Article 362 of theCompanies Act and Paragraph 1 and 3, Article 100 of the Ordinance for Enforcement of theCompanies Act) that is included in the business report. With respect to internal controls on financial
reporting, the Board received reports from the Directors and the Independent Auditor related toevaluation and auditing of the Company’s internal controls, and sought additional explanations asnecessary. In addition, the Board examined the status of “the basic policy and measures concerning
the persons responsible for controlling decisions pertaining to the Company’s financial affairs andbusiness policies” (Item 3, Article 118 of the Ordinance for Enforcement of the Companies Act),
based on discussions with the Board of Directors and other parties. With respect to subsidiaries, theCorporate Auditors took steps to facilitate communications with the directors and corporate auditorsof subsidiaries and, when necessary, received reports from subsidiaries on the status of theirbusinesses. Using the foregoing methods, the Corporate Auditors reviewed the Business Report andthe supporting schedules thereto for the fiscal year under review.
(3) The Board of Corporate Auditors oversaw and verified that the Independent Auditor maintained its
independence and carried out appropriate audits, moreover, and received reports from the
Independent Auditor regarding the execution of its duties and requested explanations when necessary.
The Board also received notifications from the Independent Auditor to the effect that “a system forthe maintenance of appropriate execution of duties” (included in Article 131 of the Corporate
Calculation Regulations) in accordance with the “standards for quality control of audits” (BusinessAccounting Council; October 28, 2005), and requested explanations when necessary. Based on theabove activities, the Board of Corporate Auditors examined the financial statements (Balance Sheets,Statements of Income, Statements of Changes in Net Assets, and notes to those statements),
supporting schedules, and the consolidated financial statements (Consolidated Balance Sheets,
Consolidated Statements of Income, Consolidated Statements of Changes in Net Assets, and notes tothose statements) for the business year under review.

802. Results of the Audit(1) Results of audit of the Business Report
In our opinion, the Business Report and the supporting schedules thereto present the situation of•
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 and•regulations 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, execution of the internal control systems by the
Directors has been appropriate.
•

In our opinion, the Company’s basic policy regarding persons who exercise control overdecision-making with respect to the Company’s finances and business policies is appropriate.
We acknowledge that the measures implemented to achieve this basic policy are consistent withthe basic policy, will not harm the common interest of the Company’s shareholders, and serve
the purpose of maintaining the positions of the Company’s executives.

(2) Results of the audit of financial statements and the supporting schedules thereto
In our opinion, the auditing methods used by KPMG AZSA LLC, the Independent Auditor, and theresults 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 Auditor, and theresults of its audit are appropriate.

February 4, 2011
Board of Corporate Auditors
ASAHI BREWERIES, LTD.
Yoshihiro Goto (Seal)
Standing Corporate Auditor
Yoshifumi Nishino (Seal)
Standing Corporate Auditor
Takahide Sakurai (Seal)
Outside Corporate Auditor
Naoto Nakamura (Seal)
Outside Corporate Auditor
Tadashi Ishizaki (Seal)
Outside Corporate Auditor

81

REFERENCE MATERIALS FOR GENERAL MEETING OF SHAREHOLDERS
Agenda Items and Reference Information
Item 1: Appropriation of surplus
The Company proposes the appropriation of surplus in the following manner:
1. Year-end dividends
The Company places a priority on returning profit to shareholders and adheres to a basic policy of
implementing returns to shareholders with the business performance taken into account while
seeking enhanced profitability and stronger financial conditions. The Company continues to strive
to ensure sustainable and stable dividend payments while fulfilling the benchmark of 20% in the
consolidated payout ratio. Based on this policy and taking into consideration a variety of factors,
including the Company’s consolidated financial condition and achievement for the fiscal year
under review, the Company proposes a year-end dividend of ¥12.50 per share, as follows:(1) Type of dividend asset
Cash(2) Allocation of dividend assets to shareholders and total amount of allocation¥12.50 per share of common stock
Total amount of payout: ¥5,817,072,575
Since the Company previously paid out ¥10.50 per share as an interim-period dividend, the total
dividend for the fiscal year under review will amount to ¥23.0 per share, which is a dividend
increase of ¥2.0.
(3) Effective date of dividend payment
March 28, 2011
2. Other appropriation of surplus
The Company proposes that surplus be invested and otherwise used to enhance its corporate
value, and be appropriated as follows in order to strengthen the management base for aggressive
business development going forward.
(1) Surplus account showing an increase, and the amount of such increase
General reserves:¥10,000,000,000(2) Surplus account showing a decrease, and the amount of such decrease
Retained earnings carried forward:¥10,000,000,00082

Item 2: Approval of absorption-type demerger agreement
1. Reason for absorption-type demerger
With the domestic market reaching maturity, the Company is facing a significant change in its
business environment, including the spread of globalization in business competition and the
movement toward reorganization of the industry. As the pace of this change is anticipated toaccelerate, the Company needs to be more dynamic and conduct its resource allocation more
expeditiously to cope with such change in order to achieve sustainable growth.
In 2009, the Company established the “Long-Term Vision 2015” and, as a milestone towardrealizing this long-term vision, has embarked on the three-year “Medium-Term Management Plan
2012,” to be completed in 2012. In a bid to achieve its long-term vision, the Company believes
that it is imperative to strengthen its business fundamentals by clarifying the roles andresponsibilities of its respective business units and to further develop each unit’s businessexpertise, and at the same time to expand its domestic and overseas business networks with a viewto enhancing the Company’s corporate value.
Under this direction, the Company will implement the transition to a pure holding company
structure to enhance the functions of the governance of its group of companies (the “Group”), andthereby further cultivate its craftsmanship and strengthen the management infrastructure of thewhole Group, by integrating its operations across the Group and improving specialty service
functions, as well as develop human resources that are capable of properly responding to thediversity of customers and businesses. At the same time, as the new structure will allow the
Company to make bold resource allocation to growing areas in both domestic and overseas
markets, the Company will speed up its efforts to achieve significant growth of the whole Group.
Toward this end, the Company proposes to transfer its alcoholic beverages business to Asahi
Group Holdings, Ltd. (said trade name is scheduled to be changed to “Asahi Breweries, Ltd.” asof July 1, 2011), through an absorption-type demerger to take effect on July 1, 2011, subject toapproval of Item 3, “Partial amendments to the Articles of Incorporation,” and the effectuationof the absorption-type demerger agreement. Asahi Group Holdings, Ltd. is a wholly owned
subsidiary of the Company.

832. Overview of the absorption-type demerger agreement
ABSORPTION-TYPE DEMERGER AGREEMENTASAHI BREWERIES, LTD. (said trade name is scheduled to be changed to “Asahi Group Holdings,
Ltd.” as of July 1, 2011; hereinafter, “Party A”) and Asahi Group Holdings, Ltd. (said trade name isscheduled to be changed to “Asahi Breweries, Ltd.” as of July 1, 2011; hereinafter “Party B”) do hereby
enter into this Absorption-Type Demerger Agreement (hereinafter, this “Agreement”) as follows
regarding an absorption-type demerger (hereinafter, the “Demerger”) whereby Party A shall transfer partof the rights and duties that Party A holds with respect to its certain business to Party B.
Article 1 (Absorption-Type Demerger)
Party A does transfer to Party B, and Party B does accept the transfer of, the rights and duties set
forth in Article 3.1 regarding the alcoholic beverages business operated by Party A (hereinafter, the“Business”).
Article 2 (Demerger Parties)
The parties to the Demerger are as follows:(1) Party A (the Demerged Company)
Trade name: ASAHI BREWERIES, LTD. (said trade name is scheduled to be changed to“Asahi Group Holdings, Ltd.” as of July 1, 2011)
Legal address: 23-1, Azumabashi 1-chome, Sumida-ku, Tokyo(2) Party B (the Successor Company)
Trade name: Asahi Group Holdings, Ltd. (said trade name is scheduled to be changed to“Asahi Breweries, Ltd.” as of July 1, 2011)
Legal address: 23-1, Azumabashi 1-chome, Sumida-ku, Tokyo
Article 3 (Rights and Duties to Be Transferred)
1. The assets, obligations, employment contracts, and other rights and duties that shall transfer from
Party A to Party B by the Demerger are set forth in the Attachment “Particulars of Rights andDuties to Be Transferred to Party B”. Further, if any such rights and duties to be transferred
require the permission, authorization, approval, and the like, of a related government authority orother related party, such rights and duties shall transfer by the Demerger on the condition thatsaid permissions, authorizations, approvals, and the like, have been obtained.
2. The obligations to be transferred to Party B pursuant to the preceding Paragraph shall be with aconcomitant assumption of the obligations by Party A.
Article 4 (Demerger Consideration)
Upon effectuation of the Demerger, Party B shall issue 499,980 shares of common stock, and shallallocate and deliver all of said shares to Party A.
Article 5 (Amount of Increase in Capital and Reserves of Party B)
Party B shall increase its capital and reserves as follows upon the effectuation of the Demerger:(1) Capital
Capital shall increase by JPY19,999,500,000 as a result of the Demerger.
(2) Capital reserves
Capital reserves shall increase by JPY4,999,500,000 as a result of the Demerger.
(3) Legal retained earnings
The amount of legal retained earnings shall not increase as a result of the Demerger.
Article 6 (Effective Date of the Demerger)
The effective date of the Demerger shall be July 1, 2011 (hereinafter, the “Effective Date”).
However, Party A and Party B may, upon holding consultations, change said Effective Date if
necessary in the course of proceeding with the Demerger.

84

Article 7 (Duty of Care of Good Manager)
Each of Party A and Party B shall, from the date hereof until the Effective Date, execute its
businesses and manage and operate its assets with the due care of a good manager, and shall holdconsultations with the other party in advance with regard to any acts that may have a material impact
on its assets, rights, or duties.
Article 8 (Duty of Non-Competition)
Party A shall bear no duty of non-competition in relation to the Business on or after the Effective
Date.
Article 9 (Approval at General Meeting of Shareholders)
Each of Party A and Party B shall hold a general meeting of shareholders on March 25, 2011 andseek a resolution regarding the approval of this Agreement and the matters concerning the Demerger.
However, Party A and Party B may, upon holding consultations, reschedule the respective general
meetings of shareholders if necessary in the course of proceeding with the Demerger.
Article 10 (Validity of this Agreement)This Agreement shall become invalid if the approval of general meeting of shareholders of either
Party A or Party B or the approval of a related government authority, or the like, as provided by law
or ordinance has not been obtained by the day immediately before the Effective Date.
Article 11 (Amendment and Cancellation)
Party A and Party B may, upon holding consultations, amend the conditions of the Demerger orcancel this Agreement if, from the date hereof until the Effective Date, a material change occurs to theassets or management conditions of Party A or Party B due to a force majeure or other event, or if it
becomes difficult to achieve the purpose of this Agreement.
Article 12 (Matters Requiring Consultation)
Party A and Party B will, upon holding consultations, set forth any matter not provided in thisAgreement or any other matter that is required to effect the Demerger in accordance with the spirit ofthis Agreement.
IN WITNESS WHEREOF, two (2) originals of this Agreement are hereby executed and, upon theinscription and seal of Party A and Party B, each party shall retain one (1) original thereof.
February 8, 2011
Party A: 23-1, Azumabashi 1-chome, Sumida-ku, Tokyo
ASAHI BREWERIES, LTD.
Naoki Izumiya, President and Representative Director (Seal)
Party B: 23-1, Azumabashi 1-chome, Sumida-ku, Tokyo
Asahi Group Holdings, Ltd.
Akiyoshi Koji, President and Representative Director (Seal)

85

(Attachment)
PARTICULARS OF RIGHTS AND DUTIES TO BE TRANSFERRED TO PARTY B
The rights and duties to be transferred to Party B by the Demerger shall include the following
assets, obligations, employment contracts, and other rights and duties. Further, the assets andobligations to be transferred are based on the balance sheet of Party A as of December 31, 2010 aswell as other calculations as of the same date, and shall be adjusted and finalized by adding or
deducting any increase or decrease thereof up to the Effective Date (the date set forth in Article 6 ofthis Agreement).
1. Assets to Be Transferred(1) Current Assets
Cash and deposits, notes, accounts receivable, loans and accrued interest in relation thereto,merchandise, finished goods, semi-finished goods, raw materials, supplies, prepaid expenses,
uncollected receivables and other current assets that fall under the Business. However, thefollowing shall be excluded: loans and accrued interest on said loans to subsidiaries or affiliatedcompanies of Party A (hereinafter, collectively "Affiliates").
(2) Fixed Assets
Tangible fixed assets, intangible fixed assets, investments and other assets that fall under theBusiness. However, the following shall be excluded:1) the land, building(s), appurtenant fixtures, structures, machinery and equipment, tools,
furniture and fixtures, and other property of the head office of Party A (located at 23-1,
Azumabashi 1-chome, Sumida-ku, Tokyo);2) the land, building(s), appurtenant fixtures, structures, machinery and equipment, tools,
furniture and fixtures, and other property (excluding software) of the research facilities ofParty A (located at 1-21, Midori 1-chome, Moriya-shi, Ibaraki Prefecture), which Party A
will continue to use jointly with Affiliates on and after the Effective Date;3) all software (excluding software used integrally in research or production equipment that falls
under the Business);4) all stock in Affiliates and capital investments in or loans to Affiliates; and
5) all trademark rights (including those that are pending; hereinafter the same).
2. Obligations to Be Transferred(1) Current Liabilities
Notes payable, trade accounts payable, lease obligations, other accounts payable, accrued
expenses and other current liabilities that fall under the Business. However, the following shallbe excluded:1) all debt interest payable, interest payable on bonds, dividends payable, property taxes payable,
alcohol taxes payable, income taxes payable, consumption and similar taxes payable,
enterprise taxes payable, income taxes withheld, and deposits from Affiliates;2) all short-term borrowings, bonds due within one (1) year, and commercial papers.
(2) Long-term Liabilities
Long-term liabilities including lease obligations, long-term deposits received and other longterm liabilities that fall under the Business. However, all long-term borrowings and bonds shallbe excluded.
3. Contractual Status to Be Transferred
The contractual status under sale and purchase agreements, work delegation agreements, realestate lease agreements, other lease agreements, and all other contracts concerning the Business,
and all rights and duties that arise out of or in connection with said agreements that fall under theBusiness. However, the contractual status, rights and duties pertaining to the assets and liabilities
that shall not transfer to Party B pursuant to Paragraphs 1 or 2 above shall be excluded.

86

4. Employment Contracts, Etc. to Be Transferred(1) Employment Contracts
The contractual status under employment contracts concerning all employees as of theEffective Date (including employees seconded to Affiliates or other companies or organizations,
temporary employees, contract employees, and temporary workers) and all rights and duties thatarise out of or in connection with said contracts.
(2) Others
All labor agreements between Party A and the Asahi Brewery Labor Union (excluding thematters stipulated in Article 16 of the Labor Union Act) as of the Effective Date.
5. Other Rights and Duties to Be Transferred(1) Intellectual Property Rights
All patent rights, utility model rights, design rights, copyrights, other intellectual property
rights (excluding trademark rights), and know-how (including prescriptions) that fall under theBusiness shall be transferred to Party B.
(2) Permissions, Authorizations, Etc.
All permissions, authorizations, approvals, registrations, regulatory filings, and the like,obtained by Party A in relation to the Business that are transferrable from Party A to Party B
under the law.

87

3. Matters related to the number of shares to be allocated to the Company by the successor
company in the absorption-type demerger, and to the fairness of the values of the capitaland reserves of the successor company in the absorption-type demerger(1) Fairness of the number of shares
The Company, through the absorption-type demerger (hereinafter, the “Demerger”) with aneffective date of July 1, 2011, has resolved to transfer rights and obligations pertaining to its
alcoholic beverages business to the Company’s wholly owned subsidiary Asahi Group Holdings,
Ltd. (said trade name is scheduled to be changed to “Asahi Breweries, Ltd.” as of July 1, 2011;
hereinafter, the “Successor Company” ), in accordance with the absorption-type demerger
agreement of February 8, 2011, concluded between the two companies.
Upon effectuation of the Demerger, the Successor Company shall newly issue 499,980 shares ofcommon stock, and shall allocate and deliver all of said shares to the Company.
As the shares of the Successor Company to be allocated to the Company through the Demerger
shall not result in a change to the net assets of the Company, and moreover, as the entirety of said
shares shall be allocated to the Company, it is recognized that the action is one that may beenacted voluntarily, and has been judged to be fair and to have been determined throughdeliberations between the Successor Company and the Company with due consideration to the net
asset value per share.
(2) Fairness of the values of capital and reserves
The capital and reserves that the Successor Company shall increase through the Demerger shall be
as follows, with said values having been determined to be fair in light of the business activities of
the Successor Company, and the rights and obligations which it will assume from the Company,
following the Demerger.

Successor Company
Asahi Group Holdings, Ltd.

(1) Capital
19,999,500

88(2) Capital reserves
4,999,500

Thousand yen(3) Legal retained
earnings－

4. Content of the non-consolidated financial statements pertaining to the last fiscal year of
the Successor Company in the absorption-type demerger
Asahi Group Holdings, Ltd. (scheduled to change its trade name to “Asahi Breweries, Ltd.,” as ofJuly 1, 2011)

Business Report(From August 10, 2010 to December 31, 2010)
1. Progress of the Business and the Results Thereof
The Company has not conducted any business activities for the indicated period, and therefore
has no matters that must be noted.
2. Issues to be Addressed
The Company shall assume the alcoholic beverages business of Asahi Breweries, Ltd. effective
July 1, 2011, and shall conduct business under a new structure as an alcoholic beverages
company.
3. Matters Concerning Shares(1) Total number of authorized shares(2) Total number of issued shares(3) Number of shareholders(4) Major shareholders
Shareholder names

1,000,000,000 shares
20 shares
1 shareholder

Number of shares held

ASAHI BREWERIES, LTD.

20 shares

89

Percentage of shares held100%Balance Sheets(as of December 31, 2010)
Thousand yen
AssetsLiabilities

Current Assets
Cash and deposits

Current Liabilities
1,000

Other accounts payable

383

Income taxes payable.

23

Total liabilities

407
Net assets

Shareholders’ equity
Capital stock

500

Capital surplus

500

Capital reserve

500

Retained earnings(407)

Other retained earnings
Retained earnings carried forward:
Total net assets
Total assets

1,000 Total liabilities and net assets

Note: Figures in amounts of less than one thousand yen are omitted.

90

(407)
(407)
592
1,000

Statements of Income(From August 10, 2010 to December 31, 2010)
Thousand yen

Item

AmountNet Sales—

Gross profit—

Selling, general and administrative expenses

383

Operating loss

383

Recurring loss

383

Loss before income taxes

383

Income taxes-current

23

Net loss

407

Note: Figures in amounts of less than one thousand yen are omitted.

91

Statements of Changes in Net Assets(From August 10, 2010 to December 31, 2010)
Thousand yen
Shareholders’ equity
Capital surplus
Capital stock

Capital reserve

Retained earnings
Other retained
earnings
Total capital
Total retained
Retainedearnings
surplusearnings carriedforward:Changes during thetermIncorporation

500

500

500

Net loss
Total changes
during the term
Balance as of Dec
31, 2010

(407)

(407)

500

500

500

(407)

(407)

500

500

500

(407)

(407)

Shareholders’equityTotal
shareholders’equityTotal net
assetsChanges during thetermIncorporation

1,000

1,000

Net loss

(407)

(407)

592

592

592

592

Total changes
during the term
Balance as of Dec
31, 2010

Notes: Figures in amounts of less than one thousand yen are omitted.

Notes to the Statements of Changes in Net Assets:
Total number of issued shares as of last day of term: 20 shares of common stock

92

CORPORATE AUDITOR’S REPORT
Corporate Auditor Akihito Kodama has prepared the following report related to the Directors’
execution of their duties during the first fiscal year, the period from August 10, 2010 to December 31,
2010.
1. Methods used in audits and content of audits
The Corporate Auditor sought to achieve mutual understanding with the Directors and strove tocollect information and create an environment for auditing, and, in addition, attended meetings of theBoard of Directors, received reports from Directors regarding the execution of their duties and requested
explanations when necessary, reviewed important documents, and inspected the status of operations andassets. Using the foregoing methods, the Corporate Auditor reviewed the Business Report thereto for the
fiscal year under review.
Furthermore, the Corporate Auditor conducted inspection of account books and related documents,
and reviewed the financial statements (Balance Sheets, Statements of Income, and Statements of Changes
in Net Assets) and the supporting schedules thereto.
2. Results of the Audit(1) Results of audit of the Business Report
1) In my opinion, the Business Report presents the situation of the Company fairly, in compliancewith the provisions of applicable laws and regulations and the Articles of Incorporation.
2) In my opinion, there are no wrongful acts or material violations of applicable laws and regulationsor the Articles of Incorporation in the execution of their duties by the Directors.
(2) Results of the audit of financial statements and supporting schedules thereto
In my opinion, the financial statements and the supporting schedules thereto present fairly, in allmaterial aspects, the financial position and results of operation of the Company.
January 28, 2011
Asahi Group Holdings, Ltd.
Akihito Kodama (Seal)
Corporate Auditor

935. Events with significant effect on the status of assets, including the disposition ofsignificant assets and the shouldering of significant debt, of the Successor Company inthe absorption-type demerger, following the last day of the last fiscal year of the
Successor Company
There are no events with significant effect on the status of the assets of Asahi Group Holdings, Ltd.
(said trade name is scheduled to be changed to “Asahi Breweries, Ltd.” as of July 1, 2011),
including the disposition of significant assets and the shouldering of significant debt, following thelast day of the last fiscal year of the Successor Company.
6. Events with significant effect on the status of assets, including the disposition ofsignificant assets and the shouldering of significant debt, of the Company, following thelast day of the last fiscal year of the Company
There are no events with significant effect on the status of the assets of the Company, including
the disposition of significant assets and the shouldering of significant debt, following the last dayof the last fiscal year of the Company.

94

Item 3: Partial amendments to the Articles of Incorporation
The Company proposes to amend the Articles of Incorporation of the Company as follows:
1. Reason for Amendments
The Company, as noted in Item 2 will transfer its alcoholic beverages business to a wholly owned
subsidiary of the Company through an absorption-type demerger, and will become a pure holding
company, effective July 1, 2011 (scheduled). Therefore, in accordance with the Company’stransition of its management structure from that of an operating holding company to a pureholding company, the Company’s trade name and business purposes shall be amended (Article 1
and Article 2 of the current Articles of Incorporation).
Moreover, along with this amendment, a supplementary provision shall be newly established with
an effective date of July 1, 2011, conditional upon the approval of “Item 2: Approval ofabsorption-type demerger agreement.”95

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

Proposed Amendments

CHAPTER I. GENERAL PROVISIONSCHAPTER I. GENERAL PROVISIONS

Article 1. (Trade Name)
The name of the Company shall be “Asahi Beer
Kabushiki Kaisha,” expressed as “ASAHI
BREWERIES, LTD.” (hereinafter referred to as the“Company”) in English.

Article 1. (Trade Name)
The name of the Company shall be “Asahi Group
Holdings Kabushiki Kaisha,” expressed as “Asahi
Group Holdings, Ltd.” (hereinafter referred to as the“Company”) in English.

Article 2. (Purposes)
The purposes of the Company shall be to engage inthe following business activities:

Article 2. (Purposes)
1.The purposes of the Company shall be to manage
or control companies (including domestic andforeign companies), partnerships (including foreign
equivalents), and other entities, which are engaged
in one or more of the businesses listed below,
through the holding of shares or other equity
interests in these entities:
1)1) Manufacture and sale of beer and otheralcoholic beverages;
2) Manufacture and sale of soft drinks and otherbeverages;
3) Manufacture and sale of pharmaceuticals, quasidrugs, reagent chemicals, medical supplies,
drugs for animal use and cosmetics;4) Manufacture and sale of products using
microorganisms and biochemical products
including enzymes;
5) Manufacture and sale of foodstuffs and foodadditives;
6) Production, processing and sale of agricultural
products including fruits, vegetables and grains;
7) Production and sale of milk and livestock, andmanufacture, processing and sale of dairy
products;
8) Manufacture and sale of fertilizers andfeedstuffs;
9) Purchase and sale, lease, management andadministration, development and utilization ofreal estate, and management of forestry
business;10) Manufacture and sale of glass bottles and otherglass products, and related products including
stoppers for bottles;
11) Operation of restaurants and coffee houses;
12) Operation of trucking and warehousingbusinesses;
13) Provision of loans, trading of securities andprovision of guaranties;

2)
3)
4)
5)
6)
7)
(unchanged)
8)
9)

10)
11)
12)
13)

96

Current Articles

Proposed Amendments14) Manufacture, sale and maintenance ofequipment for manufacturing and selling foralcoholic and non-alcoholic beverages andother products;

14)15) Operation of sports facilities, including tennis
courts and athletic clubs, and art museums;

15)16) Non-life insurance and life insurance agency
businesses; and

16)17) Any and all business activities incidental or
related to any of the preceding items.

17)(newly established)

2 The Company may also perform any and allbusiness activities incidental or related to any ofthe preceding items.

Articles 3~39

Articles 3~39

(unchanged)(omitted)(newly established)(unchanged)

Supplementary Provision
The amendments to Articles 1 and 2 shall beeffective on and from July 1, 2011. After theeffective date thereof, this supplementary provision
shall be deleted.

97

Item 4: Election of eleven (11) Directors
At the conclusion of this Annual General Meeting of Shareholders, the terms of office of all
the Directors will expire. The Company therefore asks the shareholders to elect eleven (11)Directors.
The candidates for the position of Director are as follows. Among these, the candidates for
position for Outside Director meet the requirements for independent directors/auditors as
defined by the Tokyo Stock Exchange and the Osaka Securities Exchange.
Candidatenumber1

Name(Date of birth)

Career summary, positions and areas of
responsibility in the Company, and significant
concurrent positions held by the candidate

Apr. 1965

Entered Asahi Breweries, Ltd.

Mar. 1997

Director, General Manager of
Fukuoka Branch

Sep. 1997

Director, Senior General
Manager of Kyushu Regional
Headquarters

Mar. 2000

Managing Corporate Officer,
Senior General Manager ofKyushu Regional Headquarters

Oct. 2000

Managing Corporate Officer,
Senior General Manager ofKanshin-etsu Regional
Headquarters

Mar. 2002

Senior Managing Corporate
Officer, Senior General Manager
of Kanshin-etsu Regional
Headquarters

HitoshiOgita(January 1,
1942)

Sep. 2002

Corporate Officer, Vice Presidentof Asahi Soft Drinks Co., Ltd.

Mar. 2003

President and Representative
Director of Asahi Soft Drinks
Co., Ltd.

Mar. 2006

President and Representative
Director of Asahi Breweries, Ltd.

Mar. 2010

Chairman of the Board andRepresentative Director of Asahi
Breweries, Ltd.

(to the present)<Important concurrent positions>
Chairman of the Board of Asahi Beer Arts
Foundation
Outside Director of Imperial Hotel, Ltd.

98

Number ofshares in the
Company
owned bythe candidate

Specialinterests
in theCompany

48,000

Refer toNotes: 1

Candidate
number2

Name(Date of birth)

Naoki
Izumiya(August 9,
1948)

Career summary, positions and areas of
responsibility in the Company, and significant
concurrent positions held by the candidate

Apr. 1972

Entered Asahi Breweries, Ltd.

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 Shutoken
Regional Headquarters, General
Manager of Tokyo BranchMar. 2003

Director

Mar. 2004

Managing Director

Mar. 2006

Managing Director, Managing
Corporate Officer, Senior General
Manager of Liquor Sales &Marketing Headquarters

Mar. 2009

Senior Managing Director, Senior
Managing Corporate Officer

Mar. 2010

President and Representative
Director

Number ofshares in the
Company
owned bythe candidate

Specialinterests
in theCompany

35,300―35,000―(to the present)

3

Kazuo
Motoyama(March 14,
1950)

Apr. 1972

Entered Asahi Breweries, Ltd.

Mar. 2000

Corporate Officer, Senior General
Manager of Quality Development
Headquarters

Sep. 2001

Corporate Officer, Senior General
Manager of SCM Headquarters

Sep. 2002

Corporate Officer

Sep. 2003

Corporate Officer, Senior General
Manager of Strategy Planning
Headquarters

Oct. 2005

Corporate Officer

Mar. 2006

Director, Corporate Officer

Mar. 2007

Managing Director, Managing
Corporate Officer

Mar. 2009

Senior Managing Director, Senior
Managing Corporate Officer

Mar. 2010

Executive Vice President andRepresentative Director(to the present)<Important concurrent positions>
Director of LB Co., Ltd.

99

Candidate
number4

Name(Date of birth)

Akiyoshi
Koji(November 8,
1951)

Career summary, positions and areas of
responsibility in the Company, and significant
concurrent positions held by the candidate

Apr. 1975

Entered Asahi Breweries, Ltd.

Sep. 2001

Corporate Officer

Mar. 2003

Managing Director, Senior
General Manager, Planning
Division of Asahi Soft Drinks
Co., Ltd.

Mar. 2006

Senior Managing Director,
Senior General Manager,
Planning Division of Asahi Soft
Drinks Co., Ltd.

Mar. 2007

Number ofshares in the
Company
owned bythe candidate

Specialinterests
in theCompany

12,500―8,100

Refer toNotes: 1.

Managing Director, Managing
Corporate Officer of Asahi
Breweries, Ltd.

(to the present)<Important concurrent positions>
President and Representative Director of
Asahi Group Holdings, Ltd.
Supervisor of Tsingtao Brewery Co., Ltd.

5

Apr. 1975

Entered Asahi Breweries, Ltd.

Mar. 2005

Corporate Officer, Senior General
Manager of Product &Technology Development
Headquarters

Oct. 2007

Corporate Officer, Senior General
Manager of Research &Development Headquarters for
Alcoholic Beverages

Jul. 2008

Corporate Officer, Senior General
Manager of Research &Development Headquarters

Mar. 2009Managing Corporate Officer,
Senior General Manager ofResearch & Development
Headquarters

Mar. 2010

Managing Director, Managing
Corporate Officer, Senior General
Manager of Research &Development Headquarters

Katsuyuki
Kawatsura(October 1,
1950)(to the present)<Important concurrent positions>
Chairman of the Board of Asahi Breweries
Foundation

100Candidate
number

6

Name(Date of birth)

Career summary, positions and areas of
responsibility in the Company, and significant
concurrent positions held by the candidate

Apr. 1978

Entered Asahi Breweries, Ltd.

Mar. 2006

Corporate Officer, Senior Deputy
General Manager of Liquor Sales& Marketing Headquarters,
General Manager of Sales
Department

Sep. 2006

Corporate Officer, Senior Deputy
General Manager of Liquor Sales& Marketing Headquarters,
General Manager of Beer
Category Department

Toshihiko
Nagao(July 21,1954)
Sep. 2008

Corporate Officer, Senior General
Manager of Sales Headquarters

Mar. 2009

Director, Corporate Officer,
Senior General Manager of
Liquor Sales & Marketing
Headquarters

Number ofshares in the
Company
owned bythe candidate

Specialinterests
in theCompany

11,300

―

6,500

―

2,700

―

(to the present)

7

ToshioKodato(September
20, 1954)

Apr. 1978

Entered Asahi Breweries, Ltd.

Mar. 2008

Corporate Officer, Senior General
Manager of Shikoku Regional
Headquarters

Sep. 2009

Corporate Officer, Senior Deputy
General Manager of International
Headquarters

Mar. 2010

Director, Corporate Officer,
Senior General Manager ofInternational Headquarters(to the present)<Important concurrent positions>
Vice Chairman of Tingyi-Asahi Beverages
Holding Co., Ltd.
Director of Schweppes Australia Pty Limited

8

Yoshihiro
Tonozuka(June 5, 1951)

Apr. 1975

Entered Asahi Breweries, Ltd.

Oct. 2005

President and Representative
Director of LB Co., Ltd. (Tokyo)

Mar. 2010

Director, Corporate Officer ofAsahi Breweries, Ltd.

(to the present)<Important concurrent positions>
Director of Asahi Soft Drinks Co., Ltd.

101

Candidate
number9

Name(Date of birth)

Career summary, positions and areas of
responsibility in the Company, and significant
concurrent positions held by the candidate

Jul. 1969

Joined staff of Prime Minister’s
OfficeOct. 1985

Councilor of Cabinet Secretariat

Jul. 1994

Director of Gender Equality
Office, Prime Minister’s Office

Apr. 1995

Vice-Governor of Saitama
Prefecture

Jun. 1998

Consul General of Brisbane,
Australia

Jan. 2001

Director General of Gender
Equity Bureau, Cabinet Office

Oct. 2003

Director of Showa Women’s
University

MarikoBando(August 17,
1946)(to the present)
Apr. 2007

President of Showa Women’s
University(to the present)

Mar. 2008

Director of Asahi Breweries, Ltd.

(to the present)<Important concurrent positions>
President of Showa Women’s University
Director of Showa Women’s University
Director of The Institute of Women’s Culture,
Showa Women’s University
Chairman of the Board of Rural Women
Empowerment and Life Improvement
Association
Outside Director of Asahi Mutual Life
Insurance Company

102

Number ofshares in the
Company
owned bythe candidate

Specialinterests
in theCompany――Candidate
number10

Name(Date of birth)

Career summary, positions and areas of
responsibility in the Company, and significant
concurrent positions held by the candidate

Jan. 1971

Senior Fellow of Kokumin Keizai
Research InstituteApr. 1997

President of the 21st Century
Public Policy InstituteApr. 2007

President of Center forInternational Public Policy
Studies

Naoki
Tanaka(September 1,
1945)(to the present)
Mar. 2009

Director of Asahi Breweries, Ltd.

(to the present)<Important concurrent positions>
President of Center for International Public
Policy Studies
Chairman of Postal Services Privatization
Committee

103

Number ofshares in the
Company
owned bythe candidate

Specialinterests
in theCompany――(New candidate is marked with (*))
Candidatenumber11

Name(Date of birth)

IchiroIto *(July 6, 1942)

Career summary, positions and areas of
responsibility in the Company, and significant
concurrent positions held by the candidate

Apr. 1966

Entered Asahi Chemical Industry
Co., Ltd. (present Asahi Kasei
Corporation)

Jun. 2001

Director

Feb. 2003

Managing Director

Jun. 2003

Director, Primary Executive
Officer

Apr. 2006

Director, Vice President
Executive Officer

Apr. 2010

Representative Director,
Chairman

Number ofshares in the
Company
owned bythe candidate

Specialinterests
in theCompany

1,000―(to the present)<Important concurrent positions>Representative Director, Chairman of Asahi
Kasei Corporation
Notes:
1. Candidates’ special interests in the Company:(1) The Company has made donations to the Asahi Beer Arts Foundation, the Board of
Directors of which Hitoshi Ogita is Chairman. The company also receives rent from thefoundation for the facilities of the Asahi Beer Oyamazaki Villa Museum, which isoperated by the foundation.
(2) The Company has made donations to the Asahi Breweries Foundation, the Board of
Directors of which Katsuyuki Kawatsura is Chairman.
2. Mariko Bando, Naoki Tanaka, and Ichiro Ito are candidates for the position of Outside Director
as defined in Item 7, Paragraph 3, Article 2 of the Ordinance for Enforcement of theCompanies Act.
3. The following are items required to be noted about candidates for Outside Director.
(1) Reasons for recommending them as candidates for Outside Director
A. Mariko Bando has a wide range of knowledge as an educator in addition to her diverse
experience in public administration. To provide the Company with the benefit of thisexperience and knowledge, the Company recommends her election to the Board as an
Outside Director.
Although Mariko Bando has not been involved in company management other than as
an outside director or an outside auditor, the Board has concluded that she will be able
to perform her duties as an Outside Director of the Company based on the reasons
noted above.
B. Naoki Tanaka has a great deal of experience as a member of government councils andbroad knowledge as a specialist deeply versed in economic policy. The Company thus
recommends his election to the Board as an Outside Director to provide the benefit ofthis experience and knowledge to the management of the Company.
C. Ichiro Ito would bring a wealth of company management experience and insight into a
broad range of issues to the management of the Company. The Company thus
recommends his election to the Board as an Outside Director.
(2) In cases in which the candidates have served during the past five years as outside directors
or outside corporate auditors of other companies, records of inappropriate actions by thesecompanies during the candidates’ terms of office therein, steps taken by the candidates toprevent such inappropriate actions, or responses taken by the candidates to deal with such
104

actions after their occurrence
Asahi Mutual Life Insurance Company, where Mariko Bando also serves as an outside
director, received a business improvement order from the Financial Services Agency on
July 3, 2008 regarding its inadequate management of payments of insurance claims, etc.,
based on Paragraph 1, Article 132 of the Insurance Business Act. This followed an overall
review of its payments of insurance claims and benefits during a five-year period (fromfiscal 2001 to fiscal 2005), through which it was revealed that there had been failures inadequate payments of insurance claims. Although Ms. Bando was not involved in thecase in question, she has fulfilled her responsibilities by speaking out in favor ofmeasures to prevent a recurrence of similar problems.
(3) Number of years of service as Outside Director
A. At the conclusion of this Annual General Meeting of Shareholders, Mariko Bando will
have served as an Outside Director for 3 years.
B. At the conclusion of this Annual General Meeting of Shareholders, Naoki Tanaka will
have served as an Outside Director for 2 years.
(4) Regarding agreements limiting the liability of Outside Directors
To enable him/her to contribute fully in his/her role as an Outside Director, the Company
has entered into agreements with Mariko Bando and Naoki Tanaka that limit his/her
liability for damages as prescribed in Paragraph 1, Article 423 of the Companies Act.
Under the terms of these agreements, Ms. Bando’s and Mr. Tanaka’s respective liabilities
are limited to ¥20 million or to the minimum limited amount stipulated by applicablelaws and regulations, whichever is higher. If this agenda item is approved as submitted,
the current agreements with Ms. Bando and Mr. Tanaka will be extended, and theCompany will newly enter into an agreement of identical content with Ichiro Ito.

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Item 5: Election of three (3) Corporate Auditors
At the conclusion of this Annual General Meeting of Shareholders, the terms of office of three
Corporate Auditors (Yoshihiro Goto, Takahide Sakurai, and Naoto Nakamura) will expire.
The Company therefore asks the shareholders to elect three (3) Corporate Auditors.
The candidates for the position of Corporate Auditor are as follows. Among these, thecandidates for position of Outside Corporate Auditor meet the requirements for independent
directors/auditors as defined by the Tokyo Stock Exchange and the Osaka Securities Exchange.
This proposal is submitted with the prior consent of the Board of Corporate Auditors.
Candidatenumber1

Name(Date of birth)

Takahide
Sakurai(October 30,
1932)

Career summary, positions, and significant
concurrent positions held by the candidate

Apr. 1955

Entered The Dai-ichi Mutual Life
Insurance Company (present The
Dai-Ichi Life Insurance Company,
Limited)Apr. 1983

Managing Director

Apr. 1986

Vice President and Representative
Director

Apr. 1987

President and Representative
Director

Mar. 1994

Corporate Auditor of Asahi
Breweries, Ltd.
(to the present)

Apr. 1997

Chairman of the Board andRepresentative Director of The
Dai-ichi Mutual Life Insurance
Company

Jul. 2004

Adviser

Apr. 2010

Special Adviser(to the present)<Important concurrent positions>
Special Adviser to The Dai-ichi Life Insurance
Company, Limited
Outside Director of Imperial Hotel, Ltd.

106

Number ofshares in the
Company
owned bythe candidate

Specialinterests
in theCompany――Candidate
numberName(Date of birth)(New candidate is marked with (*))
Number ofSpecialsharesin theCareer summary, positions, and significant
interests
Companyin theconcurrent positions held by the candidate
owned byCompany
the candidate

Oct. 1982

Passed bar examination

Apr. 1985

Graduated The Legal Training
and Research Institute of Japan
Registered the Daini Tokyo Bar
Association
Joined the Mori Sogo Law Office

2

Naoto
Nakamura

Apr. 1998

Established the Hibiya Park Law
Office, Partner

Feb. 2003

Established the Naoto Nakamura
Law Office (present Nakamura,Tsunoda & Matsumoto Law
Office), Partner(January 25,
1960)

―

―

500

―

(to the present)
Mar. 2003

Corporate Auditor of Asahi
Breweries, Ltd.

(to the present)<Important concurrent positions>
Partner at Nakamura, Tsunoda & Matsumoto
Law OfficeOutside Corporate Auditor at Mitsui & Co.,Ltd.
Apr. 1979
Entered Komatsu Mech Co., Ltd.

3

Yukio
Kakegai *(June 27,
1954)

Dec. 1987

Entered Asahi Breweries, Ltd.

Apr. 2007

Deputy General Manager ofFinance Department

Sep. 2008

Senior Officer, General Manager
of Audit Department

Mar. 2010

Corporate Officer, General
Manager of Audit Department(to the present)

Notes:
1. Takahide Sakurai and Naoto Nakamura are candidates for the position of Outside Corporate
Auditor as defined in Item 8, Paragraph 3, Article 2 of the Ordinance for Enforcement of theCompanies Act.
2. The following are items required to be noted about candidates for Outside Corporate Auditor.
(1) Reasons for recommending them as candidates for Outside Corporate Auditor
A. Takahide Sakurai would bring a wealth of company management experience and insight
into a broad range of issues to the auditing of the Company. The Company thus
recommends his election as an Outside Corporate Auditor.
B. Naoto Nakamura would bring expert viewpoints as an attorney and high-level insights
on management to the auditing of the Company. The Company thus recommends hiselection as an Outside Corporate Auditor.
Although Naoto Nakamura has not been involved in company management other thanas an outside director or an outside corporate auditor, the Board has concluded that hewill be able to perform his duties as Outside Corporate Auditor of the Company basedon the reasons noted above.
107

(2) In cases in which the candidates have served during the past five years as outside directors
or outside corporate auditors of other companies, records of inappropriate actions by thesecompanies during the candidates’ terms of office therein, steps taken by the candidates toprevent such inappropriate actions, or responses taken by the candidates to deal with suchactions after their occurrence
At Mitsui & Co., Ltd., where Naoto Nakamura also serves as an outside corporate auditor,
it was discovered that a 100% Singapore subsidiary of the company, Mitsui Oil (Asia) Pte.
Ltd., had, through deceptive reporting on market price, concealed losses related tonaphtha trading transactions; that the sales division of Mitsui & Co., Ltd.’s Kyushu Office
was involved in improper “round-tripping” transactions in agricultural materials for local
clients, a portion of which included fictional trades, from September 2000 to February
2008; and that the sales division of Mitsui & Co., Ltd.’s performance chemical business
unit engaged in transactions with Indonesia and elsewhere in Southeast Asian which were
presented as export transactions but which did not involve actual sales from April 2004 to
August 2008. Although Mr. Nakamura was not involved in the case in question, he has
fulfilled his responsibility by speaking out in favor of measures to prevent a recurrence ofsimilar problems.
(3) Number of years of service as Outside Corporate Auditor
A. At the conclusion of this Annual General Meeting of Shareholders, Takahide Sakurai
will have served as an Outside Corporate Auditor for 17 years.
B. At the conclusion of this Annual General Meeting of Shareholders, Naoto Nakamura
will have served as an Outside Corporate Auditor for 8 years.
(4) Regarding agreements limiting the liability of Outside Corporate Auditors
To enable him to contribute fully in his role as Outside Corporate Auditor, the Company
has entered into agreements with Takahide Sakurai and Naoto Nakamura that limit his
liability for damages as prescribed in Paragraph 1, Article 423 of the Companies Act.
Under the terms of these agreements, Mr. Sakurai’s and Mr. Nakamura’s respective
liabilities are limited to ¥20 million or to the minimum limited amount stipulated byapplicable laws and regulations, whichever is higher. If this agenda item is approved assubmitted, the current agreements with Mr. Sakurai and Mr. Nakamura will be extended.

108Reminder to Shareholders Concerning Online Voting* The online voting site and Help Desk information are available only in Japanese.

Dear Shareholder,
Please check the points listed below when exercising your voting rights via the Internet.
1. Online voting is available only by accessing the website noted below. This site is alsoavailable through the Internet via cellular phone.
Online voting site: http://www.webdk.net* If your cellular phone is equipped with a barcode reader, you
may use the two-dimensional code at right in order to accessthe online voting site. For more detailed information on thatprocedure, please refer to your phone’s user manual.
2. When voting online, enter the voting code and password indicated on the enclosed voting
form. Then indicate your consent/dissent concerning for each item by following the
instructions displayed on the screen.
3. Online votes will be accepted until the day immediately prior to the date of the Annual
General Meeting of Shareholders (deadline for online voting: 5:30 p.m., March 24, 2011,
JST). However, voting in advance will be highly appreciated for our convenience in votecounting.
4. In the event that a vote is exercised in duplicate via online and via the enclosed voting form,
only the online vote shall be counted.
5. In the event that more than one online vote is exercised (including votes via PC and via
cellular phone), only the most recent vote shall be counted.
6. Any costs related to connecting to a shareholder’s Internet provider, as well as
communication charges (including telephone charges) for accessing the online voting site,
shall be borne by the shareholder.
7. Shareholders who wish to receive notices of shareholders’ meetings by e-mail beginning with
the next meeting may so register on the online voting site noted below. Please be noted thatthe site can not be accessed via cellular phone.
E-mail address registration site: http://www.webdk.net/mail109

System Requirements for Online Voting
The following system environments are required for accessing the online voting site.
(1) Internet access(2) When voting via PC, Microsoft® Internet Explorer version 6.0 or newer, browser softwareand compatible hardware.
(3) When voting via cellular phone, a 128-bit SSL communication (encrypted communication)compatible model. (For security purposes, only 128-bit SSL communication compatible
cellular phones can access the online voting system. Other models are not compatible withthis system. Please also note that while voting via smartphones and other cellular phones
with full browser functionality is supported in principle, we cannot guarantee compatibility
with all available models.)(Microsoft is a registered trademark of Microsoft Corporation in the United States and othercountries.)

Inquiries for Online Voting
Please contact the following Help Desk for inquiries about online voting.
Agent for Shareholder Registry Management:
The Sumitomo Trust & Banking Co., Ltd.
Stock Transfer Agency Department (Help Desk)
Phone (toll-free within Japan): 0120-186-417 (9:00 a.m. to 9:00 p.m.)
For any other inquiries not related to online voting, please contact: The Sumitomo Trust &Banking Co., Ltd., Stock Transfer Agency Department at 0120-176-417 (toll-free phone within
Japan, 9:00 a.m. to 5:00 p.m., except Saturday, Sunday and holidays).

110