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.
(Ticker Code: 2502)

March 4, 2010
Dear Shareholders:

NOTICE OF THE 86th ANNUAL SHAREHOLDERS’ MEETING
You are cordially invited to attend the Annual Shareholders’ Meeting 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 FORSHAREHOLDERS’ MEETING” on pages 78 to 107 and exercise your voting rights no later
than 5:30 p.m., Thursday, March 25, 2010 (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 pages 108 to 109.
* Please note that the online voting site is available only in the Japanese language.

Sincerely,
Hitoshi Ogita, President and Representative Director
ASAHI BREWERIES, LTD.
23-1, Azumabashi 1-chome, Sumida-ku, Tokyo11. DATE AND TIME
March 26 (Friday), 2010 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 86th term, from January 1, 2009 to
December 31, 2009.
Items to Be Resolved:
Item 1: Appropriation of surplus
Item 2: Election of fourteen (14) Directors
Item 3: Renewal of the Plan against Large-Scale Purchases of the Shares in the Company

2

BUSINESS REPORT
From January 1 to December 31, 2009

1. Overview of Operations of Asahi Breweries Group(1) Business Progress and Results
The Japanese economy showed signs of recovery with the help of the government’s
economic stimulus measures. Overall conditions remained harsh, however, due to theeffects of the global financial crisis that began in the United States. Employment
conditions deteriorated and consumer spending was sluggish.
In the alcoholic beverages industry, although the new-genre market grew
substantially as a result of the adoption by consumers of a more defensive spending
attitude in response to the recessionary conditions, the markets for beer and happoshu(low-malt beer) both declined. Taxable shipment volumes for all types of beer andbeer-type beverages declined by 2.1%. Outside this segment, most alcoholic beveragecategories recorded nearly flat growth, although the market for whisky and other spirits
performed well.
In the soft drinks industry, the total sales volume dropped by an estimated 3%. This
reflected the economic downturn and such factors as unseasonable weather during thesummer months.
Against this backdrop, during 2009, the final year of the “Third Medium-Term
Management Plan,” the Company and its consolidated subsidiaries and affiliates(collectively, the “Asahi Breweries Group” or “the Group”) focused on reinforcing theGroup’s business platform to establish an earnings base for generating future growth.
Besides measures to strengthen each of the Group’s businesses, this included moves tobuild an optimized production structure independent of the operational framework.
The Asahi Breweries Group posted net sales of ¥1,472,468 million, a year-on-yearincrease of 0.7%. Operating income declined by 12.4% to ¥82,777 million and recurring
profit fell by 6.1% to ¥90,546 million. Net income totaled ¥47,644 million, an increaseof 5.8% compared with the previous year.

Net sales
Operating income
Recurring profit
Net income

Asahi Breweries Group (Consolidated)

Asahi Breweries, Ltd. (Non-consolidated)¥1,472,468 million(up 0.7% year-on-year)¥82,777 million(down 12.4% year-on-year)¥90,546 million(down 6.1% year-on-year)¥47,644 million(up 5.8% year-on-year)¥985,468 million(down 3.3% year-on-year)¥78,513 million(down 13.8% year-on-year)¥79,303 million(down 10.5% year-on-year)¥30,036 million(down 23.0% year-on-year)3

The following provides an overview of the Group’s operations by business segment.
Alcoholic Beverages Segment
In its domestic alcoholic beverages business, the Company promoted brandcultivation and reinforcement initiatives by developing product offerings matched tocustomer needs and undertaking sales promotion activities. At the same time, it focusedon creating a resilient earnings structure with reduced susceptibility to changing
conditions.
- Beers and Beer-type Products BusinessIn the beer sector, the Company focused on further enhancement of the value of its“Asahi Super Dry” flagship brand through two conceptually linked information
provision and sales promotion projects. The first was a consumer campaign (the“Embodiment of Freshness” project) highlighting different scenarios for drinking at
home and the second was an environmental protection initiative (the “Refreshingly
Sustainable” project) under which the Company donated a portion of its proceeds fromsales to local organizations nationwide dedicated to preserving the natural and cultural
assets of Japan. In other moves, the Company launched “Asahi The Master,” apilsner-type beer designed to cater to a broad range of customers, in May 2009.
In the happoshu sector, the “Asahi Style Free” brand for health-conscious
customers generated year-on-year growth in sales. It remained a popular choice withinthe “zero-carbohydrate”*1 segment, which contracted in 2009. In March, the Company
launched “Asahi Cool Draft” in a bid to energize the market.
In the new-genre sector, the Company used a large-scale sampling campaign andaggressive sales promotion activities to help establish “Clear Asahi” as one of theleading products in the growing “new genre (malt-type) ” *2 segment. The Company
also developed products aiming to offer original value for this market, introducing“Asahi Off” in February and “Asahi Mugishibori” 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.

- Shochu, Low-Alcohol Beverages, Whisky and Other Spirits, and Wine BusinessIn the shochu sector, the Company actively undertook sales promotion activities forthe core brands “Kanoka” and “Satsuma Tsukasa” to reinforce their respective positionsin the growing markets for mixed shochu (blends of Ko- and Otsu-type shochu) andimo-shochu.
In the low-alcohol beverages sector, the Company generated favorable sales with
“Asahi Slat,” a form of chu-hai (shochu cocktail) that gained popularity for its
4

combination of a fresh, fruity taste, thanks to its rich pulp, and the lowest level ofcalories*3. It created a rich lineup of products with the mainstay brands “Asahi Cocktail
Partner” and “Asahi Shunka Shibori.”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 third successive
year. In April 2009, “Taketsuru 21-Year Pure Malt” won accolades at the “World
Whiskies Awards (WWA) 2009” *4 as the world’s best blended malt whisky. This wasfollowed in October by the receipt of a trophy, which is the highest award, in thewhiskies category at the “International Spirits Challenge (ISC) 2009”*5. These awards
generated global recognition of the “Nikka” brand’s high quality.
In the wine sector, the Company continued to promote sales of domestically
produced wine through renewal of the “Sankaboshizai-Mutenka Yuki Wine” line ofantioxidant-free organic wines as part of its development of the “Sainte Neige” brand.
In imported wines, efforts focused on reinforcing brand appeal while seeking to expand
sales through cultivation of a varied product lineup. The Company began handling the“Champagne Lanson” label, while also promoting such key labels as “Baron Philippe deRothschild” and “Maison Louis Latour.”*3This comparison refers to products available in the canned chu-hai market
as of December 2009.

*4

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

*5

The ISC is an international competition for all spirits sponsored by Drinks
International, a UK publisher specializing in alcoholic beverages.

- International Alcoholic Beverages Business
The Company formed a long-term and constructive business alliance with China’s
Tsingtao Brewery Co., Ltd. through partial acquisition of shares of this company. The
Company sought to strengthen its strategic partnership with Tsingtao Brewery in the
Chinese beer business by making the best use of the latter’s brand power and formidable
business platform in the Chinese beer market and the Group’s production, quality
control and product development expertise.
In a reflection of lower sales of beer and beer-type beverages, net sales recorded in
the alcoholic beverages business segment amounted to ¥958,155 million, a decline of
3.8% compared with the previous year. Operating income fell by 13.1% year on year to¥78,879 million, reflecting a downturn in sales of beer and beer-type beverages.
Another significant factor in the decline was an increase in costs due to changes inaccounting standards related to the useful lives of manufacturing equipment.
Soft Drinks Segment- Domestic Soft Drinks BusinessIn the domestic soft drinks business, Asahi Soft Drinks Co., Ltd. pursued a growth5strategy while implementing further structural reforms and seeking to establish growthin new areas to realize dramatic growth in this sector.
Efforts focused on channeling marketing resources to further strengthen anddevelop key brands such as “WONDA” and “Mitsuya Cider” at the heart of the growthstrategy. “WONDA” recorded growth in its sales volume for the fifth consecutive year.
Sales of “Mitsuya Cider” increased for the sixth consecutive year as the overall brandwas energized by the favorable sales of “Mitsuya Cider All Zero,” which launched in
May 2009. Asahi Soft Drinks set a new volume sales record for the seventh successive
year as a result.
Restructuring efforts in this segment targeted quality improvements and earnings
structure reforms. Besides working to stem growth in raw materials costs and boost
logistical efficiency, the Group installed a new state-of-the-art production line with PET
bottle in-house manufacturing equipment at its Akashi Plant.
Initiatives to establish growth in new areas featured active promotion of new
product concepts as well as efforts to establish growth platforms for the development of
new sectors using existing sales channels*6.
*6

Sales channels comprise all direct and indirect sales routes for soft drink
sales, including supermarkets, discount outlets, convenience stores, vending
machines, mail-order sales and sales through affiliated distributors.

- International Soft Drinks BusinessIn its international soft drinks business, the Group provided management support to
Tingyi-Asahi-Itochu Beverages Holding Co., Ltd. of China, which continued to perform
well. In South Korea, the Group initiated radical reforms to rebuild the earnings
structure of its subsidiary Haitai Beverage Co., Ltd. and implemented a new growthstrategy based on the rebuilding of core brands. In April 2009, the Group’s wholly
owned subsidiary Schweppes Australia Pty Limited began implementing policies toreinforce its position in the Australian market by introducing new brands andstrengthening existing brands.
In a reflection of the sales contribution from Schweppes Australia Pty Limited, thesoft drinks business segment posted net sales of ¥355,162 million, a gain of 12.1%
compared with the previous year. Operating income increased by 12.9% from theprevious year to ¥694 million due to positive growth in Japan, although this waspartially offset by higher goodwill amortization costs related to the acquisition of
Schweppes Australia Pty Limited.
Foods and Pharmaceuticals Segment
In the foods and pharmaceuticals segment, the Group subsidiary Asahi Food &Healthcare Co., Ltd. sought to expand its operations and reinforce its business base bycontinuing to implement a basic strategy targeting growth, structural reforms and themaintenance of high levels of product safety. Asahi Food & Healthcare generated
significant sales growth through aggressive sales promotion initiatives and the6continuous introduction of new and renewed product lines. These efforts supported thegrowth of such mainstay brands as “MINTIA” breath mints, “BALLANCEUP”
nutritionally balanced snack bars, yeast-derived quasi-drug “EBIOS” tablets,“Dear-Natura” dietary supplements, “Slim Up Slim” dietary aids, and the “Ippon
Manzoku Bar” range of nutritional snacks.
Wakodo Co., Ltd. pursued a business strategy targeting accelerated growth byseeking to stabilize its business base and expand its operations. Leveraging its expertisein “infant-safe quality” developed in the production of high-quality baby foods over theyears, Wakodo introduced renewed product lines to reinforce the brand portfolio. Strong
sales of such mainstay brands as the “Hai Hai” and “Gun Gun” powdered baby milks
and the “Goo-Goo Kitchen” baby food line contributed to steady growth in sales.
In other segment developments, Group subsidiary Amano Jitsugyo Co., Ltd.
focused on expanding its business and increasing its profitability with the aim ofdominating the Japanese market for freeze-dried foods. Its contract manufacture-based
commercial sales operations posted higher sales in 2009 as a result. Its mail-order sales
operations also generated significant growth, contributing to a record overall sales
performance. Closer cooperation with Group companies also helped to boost profit
margins at Amano Jitsugyo.
Net sales in the foods and pharmaceuticals business segment amounted to ¥92,399
million, a gain of 16.7% compared with the previous year. Besides the contribution
from Amano Jitsugyo, this result also reflected higher sales of mainstay products.
Operating income soared by 41.2% from the year before to ¥2,744 million.
Other Businesses Segment
Lower sales due to the reorganization of wholesaling operations and other factors
led to a downturn in net sales of this segment by 6.1% from the year before to ¥66,751
million, while operating income declined by 11.6% to ¥889 million.
Asahi Breweries Group Breakdown of Net Sales (Consolidated)
86th term
85th term
2008
2009
Segment(previous)(under review)
Alcoholic Beverages¥995,703¥958,155

Million yen
Change inamountChange inpercentage¥(37,547)(3.8)%

Soft Drinks

316,737

355,162

38,424

12.1

Foods and Pharmaceuticals

79,202

92,39913,197

16.7

Other Businesses

71,10466,751(4,353)(6.1)

1,462,747

1,472,468

9,721

0.7

Total

Note: The above figures exclude intra-Group sales.

7Asahi Breweries, Ltd. Breakdown of Net Sales (Non-consolidated)thBusiness area
Beers and Beer-Type Products

85 term
2008(previous)

Million yenth

86 term2009(under review)

Change inamountChange inpercentage¥873,514¥844,328¥(29,185)(3.3)%(Beer)

685,729

646,517(39,211)(5.7)(Happoshu)

110,314

96,239(14,075)(12.8)(New Genre)

77,469101,571

24,101

31.1

Shochu52,71050,265(2,444)(4.6)

Low-Alcohol Beverages

31,39330,558

(835)

(2.7)

Whisky and Other Spirits

27,51226,005(1,507)

(5.5)

Wine

14,84012,420(2,419)(16.3)

Other Alcoholic Beverages

3,235

3,877

642

19.8

Contract Manufacture

14,612

16,227

1,614

11.1

Real Estate and Others

1,794

1,785

(9)

(0.5)

1,019,613

985,468(34,144)

(3.3)

Total

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

8

(2) Management Perspectives
The Asahi Breweries Group has crafted “Long-Term Vision 2015” to describe thedirection the Group intends to follow toward 2015. The Group has also formulated“Medium-Term Management Plan 2012” to cover the realization of related initiatives
over the coming three-year period.
“Long-Term Vision 2015” outlines the Group’s aim to develop as an enterprisethat transforms the bounty of nature into emotionally inspiring foods and beverages
based on a trusted reputation for global quality. The Group always seeks to leverage its
strengths in innovation based on natural ingredients to deliver greater customer
satisfaction. The Group is also committed to the challenge of matching global corporate
benchmarks in terms of products, management, human resources policies and otheraspects of its business performance.
During 2010, the first year of “Medium-Term Management Plan 2012,” the Groupwill focus its management resources on reinforcing core product brands across all its
businesses and seek to improve the overall profitability of its operations by constantly
reinforcing its cost competitiveness as part of efforts to achieve the goals elucidated in“Long-Term Vision 2015”.
The Domestic Alcoholic Beverages Business
The slogan for the domestic alcoholic beverages business is “to move in the
direction of reform.” The Company will focus on reinforcing and cultivating suchflagship brands as “Asahi Super Dry” and “Clear Asahi.” Other moves to energize themarket for beer and beer-type beverages will include the March 2010 launch of “Asahi
Strong Off,” a new-genre beverage that offers original value by combining a rich,satisfying taste and alcohol content of 7% with a clear flavor and 60% reduction incarbohydrates*7. In the shochu, low-alcohol beverages, whisky and other spirits andwine categories, the Company will work to boost its market presence by reinforcing andcultivating all its core brands, at the same time seeking to realize higher costcompetitiveness. In addition, the Company aims to reform and strengthen its earnings
structure to make it more resilient to changes in business conditions by securing lower
materials costs based on Group bulk purchasing initiatives and by revising its
production and sales systems.
*7This refers to the comparison with happoshu-based products of theCompany classified as “liquors (happosei) (1).”Group Operations
In the soft drinks business, the key Group subsidiary Asahi Soft Drinks Co., Ltd. ispursuing a vision of growth of the soft drinks business based on a combination of
dynamism and robust enterprise. It is promoting this growth strategy by seeking toestablish and cultivate brands that customers prefer while also developing innovative
new brands. Expanding the vending machine network is another key element in thisstrategy. Asahi Soft Drinks also aims to pursue structural reforms aimed at constructing
an optimized production setup and boosting cost competitiveness.
9

In the foods business *8, Group subsidiary Asahi Food & Healthcare Co., Ltd. has
adopted the fundamental strategies of expanding sales, strengthening corporate
capabilities and creating safe and reassuring brands. Positioning itself in the three core
sectors of confectionery, health foods and seasonings, this company aims to generate
growth and establish a stronger business base by aggressively promoting sales andreinforcing its product development and marketing setups. Elsewhere, Wakodo Co., Ltd.
is sticking with working to reinforce its business base by building a powerful position inexisting businesses while also striving to achieve high quality at all times as at basis for
supplying safe, reliable products. Wakodo also plans to foster new growth bydeveloping new businesses including overseas operations and the business targeting
seniors and women customers. Amano Jitsugyo Co., Ltd. is working to develop andcultivate core products and seeking at the same time to expand sales by developing newsales channels, expanding its regional sales routes and building a customer base for
mail-order sales operations. This firm also aims to promote greater efficiency byrevising its production and distribution systems as part of a drive to achieve levels of
profitability among the highest in the industry.
In international operations, the Group is focused on improving margins in its beer
operations in the key China market, while also seeking to strengthen the strategic
partnership with Tsingtao Brewery Co., Ltd. Through this alliance, the Group plans topursue a range of initiatives, including bolstering production efficiencies by
manufacturing the Tsingtao brand products at Group production sites in China;
initiating joint materials purchasing; and expanding the Asahi brand by making use of
Tsingtao Brewery’s production sites and strong domestic sales network. Elsewhere,
Schweppes Australia Pty Limited will focus on reinforcing its platform for growththrough aggressive marketing investments designed to generate additional growth of its
core brands which continuing efforts to realize more efficient distribution andproduction and lower costs. Further leveraging of the Group’s overseas network will
help to improve the overall profitability of the Group’s international beverage
operations.
In accordance with “Medium-Term Management Plan 2012,” the Asahi BreweriesGroup intends to strengthen all its brands and increase its profitability. The Group plansto optimize its finances and implement a cash flow strategy aimed at increasing its total
enterprise value. Creating a stronger base for future growth is the Group’s top priority.
To this end, it plans to study and actualize opportunities for strategic business
investments and alliances, both in Japan and abroad, targeting the alcoholic beverageand soft drink business segments, in particular. The Group will make flexible allocation
to return cash flows to shareholders in the form of dividends, etc. and enhance capitalefficiency. The Group remains committed to creating additional corporate value.
The Company cordially requests shareholders’ continuing encouragement andsupport.
*8

As part of the formulation of “Long-Term Vision 2015” and“Medium-Term Management Plan 2012,” the Group’s food and10pharmaceuticals operations were renamed the “foods business.”(3) Capital Investment Activities
Consolidated capital expenditures in the year under review totaled ¥43,045 million,a large portion of which represented investments made to upgrade existing facilities andimplement energy conservation measures. The above amount includes a figure of¥10,465 million for lease assets, in line with the application of lease accounting
standards. Other projects are specified below:
Major capital investments and facility upgrades in process during 2009
Segment concerned: Soft drink operations
Item and expenditure: Manufacturing facility for soft drinks: ¥1,451 million (atIbaraki Brewery, Asahi Breweries, Ltd.: total projected capital investment of¥22,500 million)(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 July 17, 2009, the Company issued its 30th series of unsecured
bonds (3-year, ¥15,000 million bond issue) and 31st series of unsecured bonds (5-year,¥10,000 million bond issue) to raise funds for the repayment of short-term debt that had
been used to finance the acquisitions of shares in Schweppes Holdings Pty Limited andTsingtao Brewery Co., Ltd.
(5) Status of Principal Lenders(As of December 31, 2009)
LenderOutstanding balance(Million yen)

Sumitomo Mitsui Banking Corporation

34,000Mizuho Corporate Bank, Ltd.

20,000The Sumitomo Trust & Banking Co., Ltd.

17,000

The Norinchukin Bank

13,900The Dai-ichi Mutual Life Insurance Company

8,500

Fukoku Mutual Life Insurance Company

8,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

6,000

Sumitomo Life Insurance Company

5,500

Mitsubishi UFJ Trust and Banking Corporation

4,500

11

(6) Financial and Profit/Loss Indicators
A. Financial and profit/loss indicators of Asahi Breweries Group (Consolidated)
83rd term
2006

84th term
2007

85th term
2008

86th term
2009(under review)

1,446,385

1,464,071

1,462,747

1,472,468

Operating income (million yen)

88,713

86,955

94,52082,777

Recurring profit (million yen)

90,10990,21796,47490,546

Net income (million yen)

44,77544,79745,01447,644

Earnings per share (yen)

94.02

94.94

96.31

102.49Total assets (million yen)

1,288,501

1,324,391

1,299,058

1,433,652

Net assets (million yen)509,774

529,782534,627

577,702

Net assets per share (yen)1,012.77

1,089.33

1,122.13

1,233.25

Net sales (million yen)

Note: 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)
83rd term
2006

84th term
2007

85th term
2008

86th term
2009(under review)

1,031,060

1,030,736

1,019,613

985,468

Operating income (million yen)

78,596

79,93391,05078,513

Recurring profit (million yen)

76,307

77,372

88,56279,303

Net income (million yen)

38,90240,51338,99430,036

Earnings per share (yen)

81.69

85.84

83.43

64.61

Total assets (million yen)

1,014,878

1,070,506

1,049,190

1,155,860

Net assets (million yen)449,270482,026

485,538

507,569

Net assets per share (yen)954.481,020.24

1,044.56

1,091.53

Net sales (million yen)

Note: 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
Company name
The Nikka Whisky DistillingCo., Ltd.
Sainte Neige Wine Co.,Ltd.
Asahi Soft Drinks Co., Ltd.

Capital(Million yen)
14,989

Shareholdings (%)

Main operations

100.0

Production of alcoholic
beverages
Production of alcoholic
beverages
Production and sales of softdrinksSales of soft drinks

50

100.0

11,081

100.0

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

495

80.0

487

67.9

LB Co., Ltd. (Nagoya)

55

97.0

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

3,200

100.0

2,918

100.0

Amano Jitsugyo Co., Ltd.

67

80.0

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)
7,974
(94,140 million KRW)
13,591(A$200,018 thousand)
3,720(US$32,000 thousand)

72.8

Operation of bars andrestaurants
Brewing and sales of beer

55.0

Brewing and sales of beer

51.0

Brewing of beer

58.0

Production and sales ofsoft drinks
Production and sales of softdrinksBeijing Beer Asahi Co.,Ltd.
Hangzhou Xihu Beer Asahi
Co., Ltd.
Yantai Beer Tsingtao
Asahi Co., Ltd.
Haitai Beverage Co., Ltd.
Schweppes Australia Pty
LimitedAsahi Beer U.S.A., Inc.

100.0
100.0

Production and sales of softdrinks
Production and sales of softdrinks
Production and sales offoods and pharmaceuticals
Production and sales offoods and pharmaceuticals
Production and sales offoods
Cargo transportation

Sales of beer

Notes:
1. Shareholding Percentages include shares held indirectly.
2. The Company increased its equity stake in Beijing Beer Asahi Co., Ltd. from 47.0% to 72.8% byassumption of equity stake held by third-parties on November 12, 2009 and then increasing its
paid-in capital on December 28, 2009. The firm’s capital rose to ¥7,902 million (from ¥4,744
million at the previous fiscal year-end) as a result of this increase in paid-in capital.
3. An investment by Tsingtao Brewery Co., Ltd. reduced the Company’s equity stake in Yantai Beer
Asahi Co., Ltd. from 53.0% to 51.0% on March 24, 2009, at which time the latter company was
renamed Yantai Beer Tsingtao Asahi Co., Ltd.
4. The Company’s equity stake in Haitai Beverage Co., Ltd. increased from 41.0% to 58.0% following
a non-compensated reduction in capital on March 13, 2009 and a paid-in capital increase on March
21, 2009. Haitai Beverage’s capital decreased to ¥7,974 million (from ¥9,460 million at theprevious fiscal year-end) as a result.

13

5. The Company made Schweppes Australia Pty Limited into a wholly owned subsidiary via theacquisition on April 3, 2009 of all outstanding shares in its parent company, Schweppes Holdings
Pty Limited, in accordance with a basic agreement concluded with Cadbury plc.

(8) Acquisition or Disposal of Other Company Shares, Equity Stakes and Stock
Acquisition Rights
A. Following approval of a resolution at a meeting of the Board of Directors on
December 8, 2008, Asahi Breweries, Ltd. acquired all the outstanding shares ofSchweppes Holdings Pty Limited, the parent company of Schweppes Australia Pty
Limited, on April 3, 2009, in accordance with an agreement previously concluded with
Cadbury plc. The purchase was conducted through Asahi Holdings (Australia) Pty Ltd.,a wholly owned subsidiary of the Company. As a result, the Company acquired indirectownership of 100.0% of Schweppes Australia Pty Limited shares, making the latter aconsolidated subsidiary of the Company.
B. Following a resolution in writing of the Board of Directors which was deemed to bepassed as per Article 370 of the Companies Act on January 23, 2009, Asahi Breweries,
Ltd. acquired 261,577,836 shares of common stock in Tsingtao Brewery Co., Ltd. on
April 30, 2009. The Company also acquired an additional 8,550,000 shares of common
stock in Tsingtao Brewery Co., Ltd. in November 2009 in accordance with a resolution
approved at a meeting of the Board of Directors on October 30, 2009. This gave theCompany an equity stake of 19.7% in Tsingtao Brewery Co., Ltd.

14

(9) Principal Operations(As of December 31, 2009)

The 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,
Asahi Cool Draft,
Clear Asahi, Asahi Off, Asahi Mugishibori (beers and beer-type beverages)

Alcoholic
Beverages

Kanoka, Satsuma Tsukasa, Daigoro, Ichibanfuda, (shochu)
Asahi Slat, Asahi Cocktail Partner, Asahi Shunka Shibori, (low-alcohol
beverages)
Taketsuru, Black Nikka Clear Blend, Super Nikka, Single Malt Yoichi(whisky)Sainte Neige, Baron Philippe, Louis Latour, Lanson, Caliterra, ALMADEN,
Gancia (wine)
Mitsuya Cider, Wilkinson, Bireley’s,

Soft Drinks

WONDA, Asahi Juroku-Cha, Asahi Kaoru Ryokucha Ibuki, FAUCHON,
Asahi Ikkyu-Chaba Oolong-Cha,
Asahi Fujisan-no Vanadium Ten-Nen-Sui, Asahi Super H2O

Foods andPharmaceuticals

EBIOS, Dear-Natura, Slim Up Slim,
MINTIA, BALLANCEUP, Ippon Manzoku Bar,Hai Hai (baby milk), Gun Gun (baby milk), Goo-Goo Kitchen (baby food),
Gyunyuya-san no Kohii (coffee),
Oshibori Wetty (wet tissues), Siccarol (baby skincare powder),Nagomi no Umadashi, Kokusan Guzai no Omiso-shiru, Okoge no Soup,
Soup Days15

(10) Principal Offices and Factories(As of December 31, 2009)
Asahi
Breweries,
Ltd.

Registeredhead office
Regional
sales offices

23-1, Azumabashi 1-chome, Sumida-ku, Tokyo

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,
Development Laboratories for Food Product,
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.)

Hokkaido Regional Headquarters (Sapporo),
Tohoku Regional Headquarters (Sendai),Syutoken Regional Headquarters (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)

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),
Haitai Beverage Co., Ltd. (Korea),
Schweppes Australia Pty Limited (Australia)
Asahi Beer U.S.A., Inc. (U.S.A.)(11) Employees(As of December 31, 2009)
A. Employees of the Asahi Breweries Group (Consolidated)
Business segment

Number of employees

Alcoholic Beverages

7,281(down 88)

Soft Drinks

5,369(up 736)

Foods and Pharmaceuticals

1,499(up 88)Other Businesses

3,167(up 223)

17,316(up 959)

Total

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

B. Employees of Asahi Breweries, Ltd. (Non-consolidated)
Full-time employees

Average age

Average years of service

Average annualcompensation

3,719 (up 6)

40.3

14.7

¥8,813,974

Notes:
1. Figures in parentheses represent increases or decreases from the end of the previous term.
2. Full-time employees include 202 persons seconded to the Company from other companies.
3. In addition to the employees enumerated above, the Company employs 164 persons on a term
contract basis.

17(12) Overview of Other Significant Asahi Breweries 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:•

The Company has developed an environmental technology for the low-cost
production of a cellulase enzyme that can break down cellulose (the principal
constituent of plant fibers and cell walls) into sugars. The technology, which uses
waste paper, old newspapers and cardboard as raw materials, reduces costs bymore than 90% compared with conventional methods. Applications of suchtechnology are expected in such areas as bioethanol production.

•

The Company has developed a high-value-added yeast extract by applying
original yeast culture technology and a novel method of manufacturing such
extracts. The new extract is made from four varieties of yeast highly enriched inglutamic acid that the Company led the world in discovering. At a time of
growing global interest in healthful, preservative-free foods, it intends to expand
its overall presence in the natural seasonings sector through sales of this new
yeast extract.

Corporate Social Responsibility (“CSR”)
The Asahi Breweries Group regards CSR activities as “proactive measures toenhance corporate value.” Based on the “Asahi Breweries Group CSR Policy,” theGroup is undertaking initiatives in such priority areas as “environmental conservation
activities” and “social contribution activities.”•

Among its environmental conservation activities, the Group is focusing primarily
on reducing CO2 emissions as key efforts to help prevent global warming. The
Company now uses renewable energy not only at its corporate headquarters
building, but also at all nine breweries to power all manufacturing of “Asahi
Super Dry” beer in 350ml cans, and all the beer and beer-type products suppliedin gift sets. Asahi Breweries is the largest consumer of green electricity in Japan’s
food industry. This switch to green electricity in the production of “Asahi Super
Dry” was recognized at the 14th New Energy Awards 2009, where the Company
received an award from the Director-General of the Agency for Natural
Resources and Energy.

•

Among its social contribution activities, the Group donated one yen per can of“Asahi Super Dry” sold to regional organizations throughout the country that arededicated to preserving Japan’s natural and cultural assets. Dubbed the“Refreshingly Sustainable” project, this initiative seeks to strengthen local
community relations while boosting corporate value by fulfilling the Company’ssocial responsibility through business activities. The project generated donations
in two phases: a period from late March to late April, followed by a second period
18

from late September to late November. Total donations were approximately ¥680
million. The Company now plans to develop this initiative as a mid- andlong-term policy.

19

2. Overview of the Company(1) Shares Outstanding(As of December 31, 2009)
A. Total number of authorized shares

972,305,309

B. Total number of issued shares

483,585,862
119,908

C. Number of shareholders(Increased by 4,458 from the end of the previous term)
D. Major shareholders
Shareholders’ investment in the Company
Number ofshares held(in hundreds)

Percentage ofshares held (%)

Japan Trustee Services Bank, Ltd. (Trust Account)

217,552

4.7

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

212,829

4.6

Asahi Kasei Corporation

187,853

4.0

The Dai-ichi Mutual Life Insurance Company

169,200

3.6

Fukoku Mutual Life Insurance Company

168,830

3.6

Sumitomo Mitsui Banking Corporation

90,280

1.9

The Sumitomo Trust & Banking Co., Ltd.

81,2601.7

Sumitomo Life Insurance Company

70,9001.5Mizuho Corporate Bank, Ltd.

56,447

1.2

The Norinchukin Bank

55,6601.2

1,310,811

28.2

Total
Notes:

1. The Company holds treasury stock numbering 18,576,966 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 thenumber of shares in treasury stock.

20

(2) Status of Share Purchase Warrants, etc.
A. Share purchase warrants held by Directors and Corporate Auditors of theCompany, granted as part of remuneration for execution of their duties(As of December 31, 2009)1) Stock option system
2) Stock option system
3) Stock option system
based on acquisition of
based on acquisition of
based on subscription
treasury stock
treasury stockrightsDate of issuance resolution
March 30, 2000
March 29, 2001
March 28, 2002
Class and number of shares
Common shares:
Common shares:
Common shares:
subject to warrants
7,000
61,00058,400Fee for exercise of warrants¥1,115 per share¥1,185 per share¥1,090 per share
Exercisable period
January 1, 2005 to
January 1, 2005 to
January 1, 2005 to
March 29, 2010
March 28, 2011
March 27, 2012
Conditions for exercise of• The warrants are• The warrants are• The warrants are
warrants
exercisable even after
exercisable even after
exercisable even after
the resignation of
the resignation of
the resignation of
Directors or Corporate
Directors or Corporate
Directors or Corporate
Auditors, as the case
Auditors, as the case
Auditors, as the casemay be.
may be.
may be.
• The warrants may be• The warrants may be• The warrants may bepassed on to heirs.
passed on to heirs.
passed on to heirs.
• The warrants shall be• The warrants shall be• The warrants shall becancelled if a holder iscancelled if a holder iscancelled if a holder isdismissed for certain
dismissed for certain
dismissed for certain
specified reasons.
specified reasons.
specified reasons.
• Any assignment or• Any assignment or• Any assignment orpledging of the warrants
pledging of the warrants
pledging of the warrants
is prohibited.
is prohibited.
is prohibited.
Situation concerning the holding of share purchase warrants by Directors and Corporate Auditors
Directors• Number of shares subject • Number of shares• Number of sharesto share purchasesubject to share purchasesubject to share purchase(except Outside Directors)
warrants: 7,000
warrants: 54,000
warrants: 53,600• Number of holders: 3• Number of holders: 6• Number of holders: 5
Outside Directors• Number of shares• Number of shares• Number of sharessubject to share purchasesubject to share purchasesubject to share purchasewarrants: –warrants: 7,000
warrants: –• Number of holders: –• Number of holders: 1• Number of holders: –Corporate Auditors• Number of shares• Number of shares• Number of sharessubject to share purchasesubject to share purchasesubject to share purchasewarrants: –warrants: –warrants: 4,800• Number of holders: –• Number of holders: –• Number of holders: 1

21

Date of issuance resolution
Number of share purchasewarrants
Class and number of shares subject
to share purchase warrant
Fee for exercise of share purchasewarrants
Exercisable period
Conditions for exercise of sharepurchase warrants

4) First Issue of share purchasewarrants
March 28, 2003
395) Second Issue of share purchasewarrants
March 30, 2004
1,600

Common shares: 39,000

Common shares: 160,000¥830 per share¥1,205 per share

March 28, 2005 to March 27, 2013
March 30, 2006 to March 29, 2014
• The warrants are exercisable even
• The warrants are exercisable evenafter the resignation of Directors orafter the resignation of Directors or
Corporate Auditors, as the case may
Corporate Auditors, as the case maybe.
be.
• The warrants may be passed on to• The warrants may be passed on toheirs.
heirs.
• The warrants shall be cancelled if a
• The warrants shall be cancelled if aholder is dismissed for certain
holder is dismissed for certain
specified reasons.
specified reasons.
• Any assignment or pledging of the• Any assignment or pledging of thewarrants is prohibited.
warrants is prohibited.
Situation concerning the holding of share purchase warrants by Directors and Corporate Auditors
Directors• Number of share purchase warrants:• Number of share purchase warrants:
19
950(except Outside Directors)• Number of shares subject to share• Number of shares subject to sharepurchase warrants: 19,000
purchase warrants: 95,000• Number of holders: 2• Number of holders: 6
Outside Directors• Number of share purchase warrants:• Number of share purchase warrants:–
100• Number of shares subject to share• Number of shares subject to sharepurchase warrants: –purchase warrants: 10,000• Number of holders: –• Number of holders: 1
Corporate Auditors• Number of share purchase warrants:• Number of share purchase warrants:
20550• Number of shares subject to share• Number of shares subject to sharepurchase warrants: 20,000
purchase warrants: 55,000• Number of holders: 2• Number of holders: 4

22

Date of issuance resolution
Number of share purchasewarrants
Class and number of shares subject
to share purchase warrants
Fee for exercise of share purchasewarrants
Exercisable period
Conditions for exercise of sharepurchase warrants

6) Third Issue of share purchasewarrants
March 30, 2005
1,750

7) Fourth Issue of share purchasewarrants
March 30, 2006
2,250

Common shares: 175,000

Common shares: 225,000¥1,374 per share¥1,688 per share

March 30, 2007 to March 29, 2015
March 30, 2008 to March 29, 2016
• The warrants are exercisable even
• The warrants are exercisable evenafter the resignation of Directors orafter the resignation of Directors or
Corporate Auditors, as the case may
Corporate Auditors, as the case maybe.
be.
• The warrants may be passed on to• The warrants may be passed on toheirs.
heirs.
• Any assignment or transfer of the• Any assignment or transfer of theshare purchase warrants is subject toshare purchase warrants is subject toapproval of the Board of Directors.
approval of the Board of Directors.
Situation concerning the holding of share purchase warrants by Directors and Corporate Auditors
Directors• Number of share purchase warrants:• Number of share purchase warrants:(except Outside Directors)
1,000
1,500
• Number of shares subject to share• Number of shares subject to sharepurchase warrants: 100,000
purchase warrants: 150,000• Number of holders: 6• Number of holders: 9
Outside Directors• Number of share purchase warrants:• Number of share purchase warrants:
100
100• Number of shares subject to share• Number of shares subject to sharepurchase warrants: 10,000
purchase warrants: 10,000• Number of holder: 1• Number of holder: 1
Corporate Auditors• Number of share purchase warrants:• Number of share purchase warrants:
650
650• Number of shares subject to share• Number of shares subject to sharepurchase warrants: 65,000
purchase warrants: 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

Date of issuance resolution
Date of issue
Outstanding amount of bonds withstock acquisition rights

1) Euroyen conditional convertible
bonds with stock acquisition rights
maturing in 2023
May 13, 2008
May 29, 2008
¥35,156 million

2) Euroyen conditional convertible
bonds with stock acquisition rights
maturing in 2028
May 13, 2008
May 29, 2008
¥35,000 million

Details concerning the stock acquisition rights
Number of stock acquisitionrightsClass and number of sharessubject to stock acquisition rights
Fee for exercise of stockacquisition rights
Exercisable period
Conditions for exercise of stockacquisition rights

Total of 35,000 and the number
calculated by dividing the total facevalue of the substitute bonds with stockacquisition rights by ¥1,000,000
Common shares: 16,611,295

Total of 35,000 and the number
calculated by dividing the total facevalue of the substitute bonds with stockacquisition rights by ¥1,000,000
Common shares: 17,073,170¥2,107 per share¥2,050 per share

June 12, 2008 to May 12, 2023

June 12, 2008 to May 12, 2028

• Certain stock acquisition rights may• Certain stock acquisition rights may

not be exercised.
• Prior to May 29, 2011, but only when

Conditions under which theCompany may acquire stockacquisition rights

not be exercised.
• Prior to May 29, 2014, but only when

the closing price of the Company’s
the closing price of the Company’scommon stock for 20 of the last 30
common stock for 20 of the last 30
trading days (including the last
trading days (including the last
trading day) exceeds 125% of the
trading day) exceeds 125% of theconversion price (¥2,107) as of theconversion price (¥2,050) as of thelast trading date of each quarter. In
last trading date of each quarter. In
such cases, exercise is possible, insuch cases, exercise is possible, in
principle, during the following
principle, during the following
quarter.
quarter.
• On or after May 29, 2011, the• On or after May 29, 2014, theCompany may acquire all of theCompany may acquire all of thebonds after notifying thebonds after notifying thebondholders.
bondholders.
• The acquisition date shall be at least• The acquisition date shall be at least
60 but no more than 75 days from the
60 but no more than 75 days from thenotification date.
notification date.

24

(3) Directors and Corporate Auditors of the Company
A. Directors and Corporate Auditors(As of December 31, 2009)
Name

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

Position

Kouichi Ikeda

Chairman of the Board andRepresentative Director

Hitoshi Ogita

President and Representative
Director

Masatoshi Takahashi

Senior Managing Director
Senior Managing Executive
Officer

Domestic Marketing Headquarters of theCompany
Outside Director of Orion Breweries, Ltd.

Masahiko Osawa

Senior Managing Director
Senior Managing Executive
Officer

Senior General Manager of International
Headquarters of the Company
Representative Director and Chairman of theBoard of Haitai Beverage Co., Ltd.
Vice Chairman of Tingyi-Asahi-Itochu
Beverages Holding Co., Ltd.

Naoki Izumiya

Senior Managing Director
Senior Managing Executive
OfficerGroup Headquarters (Audit Department,
Human Resources Department, General &Legal Affairs Management Department andSocial & Environmental Management
Department) of the Company

Chairman of the Board of Asahi Beer Arts
Foundation
Director of New Otani Co., Ltd

Director of Asahi Food & Healthcare Co., Ltd.
Director of Wakodo Co., Ltd.
Director of Amano Jitsugyo Co., Ltd.
Director of Tingyi-Asahi-Itochu Beverages
Holding Co., Ltd.
Director of Haitai Beverage Co., Ltd.
Kazuo Motoyama

Senior Managing Director
Senior Managing Executive
OfficerGroup Headquarters (Corporate Planning
Department, Public Relations Department,
Department of Agribusiness Development andLogistics Department) of the Company
Director of Asahi Soft Drinks Co., Ltd.
Director of Asahi Logistics, Ltd.
Director of Schweppes Australia Pty Limited.

Shin Iwakami

Senior Managing Director
Senior Managing Executive
OfficerGroup Headquarters (Quality Assurance
Department) and Research & Development
Headquarters of the Company
Chairman of the Board of Asahi Breweries
Foundation
Director of Tingyi-Asahi-Itochu Beverages
Holding Co., Ltd.

Akiyoshi Koji

Managing Director
Managing Executive Officer

Group Headquarters (Finance Department, IT
Strategy & BPM Department and Institute ofLifestyle & Culture) of the Company
Supervisor of Tsingtao Brewery Co., Ltd.

25

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

Name

Position

Noriyuki Karasawa

Managing Director
Managing Executive Officer

Group Headquarters (Procurement
Department) and 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)Toshihiko Nagao

Director
Executive Officer

Senior General Manager of Liquor Sales &Marketing Headquarters

Nobuo Yamaguchi

Outside Director

Chairman of the Board and Representative
Director of Asahi Kasei Corporation
Outside Director of Nippon Television
Network Corp.
Outside Director of The Shoko Chukin Bank,Ltd.
Outside Corporate Auditor of The Yomiuri
Shimbun Holdings

Mariko Bando

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 Co.

Naoki Tanaka

Outside Director

President of the Center for International Public
Policy Studies
Chairman of Financial System Council,
Financial Services Agency
Member and Deputy Chairman of Fiscal
System Council, Ministry of FinanceYoshihiro 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 DistillingCo., Ltd.
Corporate Auditor of Asahi Food & HealthcareCo., Ltd.
Corporate Auditor of Amano Jitsugyo Co., Ltd.

Takahide Sakurai

Outside Corporate Auditor

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

26

Name

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

Position

Naoto Nakamura

Outside Corporate Auditor

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

Tadashi Ishizaki

Outside Corporate Auditor

Professor, Faculty of Commerce, Chuo
University

Notes:
1. Directors Nobuo Yamaguchi, Mariko Bando and Naoki Tanaka are Outside Directors as defined in
Item 15, Article 2 of the Companies Act.
2. Director Nobuo Yamaguchi is Chairman of the Board and Representative Director of Asahi Kasei
Corporation. Asahi Kasei is one of the major shareholders of the Company.
3. Corporate Auditors Takahide Sakurai, Naoto Nakamura and Tadashi Ishizaki are Outside Corporate
Auditors as defined in Item 16, Article 2 of the Companies Act.
4. Corporate Auditor Yoshihiro Goto was formerly Director in charge of finance of the Company andhas 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. Toshihiko Nagao and Naoki Tanaka were newly elected as Directors at the 85th Annual Shareholders’Meeting held on March 26, 2009, and all assumed their respective offices.

27

8. 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
Kazuo Motoyama

Shin Iwakami

Position
SeniorManaging
Director
SeniorManaging
Executive
Officer

SeniorManaging
Director
SeniorManaging
Executive
Officer

Significant concurrent positions held
by Director or Corporate Auditor

Date of retirement

Corporate Auditor of Asahi Soft Drinks
Co., Ltd.

Mar. 24, 2009

Director of Amano Jitsugyo Co.,
Ltd.

Mar. 27, 2009

Corporate Auditor of Asahi Food &Healthcare Co., Ltd.

Mar. 31, 2009

Corporate Auditor of Wakodo Co.,
Ltd.

Mar. 31, 2009

Director of Asahi Soft Drinks Co., Ltd.

Mar. 24, 2009

Director of Asahi Food & Healthcare Co., Mar. 31, 2009
Ltd.
Director of Wakodo Co., Ltd.

Mar. 31, 2009Managing
Director
Managing
Executive
Officer

Director of Haitai Beverage Co.,
Ltd.

Mar. 19, 2009

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

May 8, 2009

Nobuo Yamaguchi

OutsideDirector

Chairman of the People’s Political
Association

Oct. 21, 2009

Takahide Sakurai

OutsideCorporate
AuditorOutside Director of Seven Bank,
Ltd.

June 18, 2009

Akiyoshi Koji

(Reference) Executive Officers other than the above are as follows.
PositionManaging Executive
Officer
Executive Officer

NameYuji Ninomiya, Akira Matsunobu, Seikou Takahashi, Fumio Yamasaki,
Kenji Taniguchi, Katsuyuki Kawatsura, Masafumi Tanino, Takayoshi
KanayaMakoto Sugiura, Yoshihisa Kitagawa, Norio Naito, Toshio Mori, Hideaki
Takemoto, Shoji Tsumura, Takami Maruyama, Toshio Kodato, Katsutoshi
Takahashi, Shinichi Hirano, Seiichi Ishikawa, Kenkichi Aoki, Hirohisa
Shibuya, Suguru Nohara, Hiroshi Katagiri, Kazunori Shibata, Shiro Ikeda

28

B. Remuneration paid to Directors and Corporate Auditors

Category

Directors’ and Corporate Auditors’compensation
Total amount of
Number of
remuneration paid
persons
remunerated(yen)

Directors’ and Corporate Auditors’
bonuses
Total amount of
Number of
remuneration paid
persons
remunerated(yen)

Total amount(yen)

Directors

13435,930,000

13

106,800,000

542,730,000[of which, Outside Directors][3][28,800,000][3][8,100,000][36,900,000]

Corporate Auditors

5

94,950,000––

94,950,000[of which, Outside Auditors][3][31,950,000]––[31,950,000]

Notes:
1. 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 Shareholders’ Meeting held on
March 27, 2007. As of the end of the fiscal year under review, the anticipated total amount of
future payments was as follows:
Total of ¥136,500,000 to six Directors (including ¥19,500,000 to one Outside Director)
Total of ¥33,000,000 to three Outside Corporate Auditors
Final payments totaling ¥75 million are due to be paid to one Director who is scheduled to retire at
the conclusion of the 86th Annual Shareholders’ Meeting to be held on March 26, 2010.
2. 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 Shareholders’Meeting held on March 27, 2007.
3. 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 Shareholders’ Meeting held on March 27, 2007.

29

C. Outside Directors and Outside Corporate Auditors•

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

10/11

－

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

Mariko Bando

11/11

－

Ms. Bando participated in
discussions as necessary,
primarily from the perspectiveof her wealth of experience asan educator.

Naoki Tanaka

8/9－

Mr. Tanaka participated in
discussions as necessary,
primarily from the perspectiveof his wealth of experience as
an expert in economic policy.

Takahide Sakurai

11/11

8/8

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

Naoto Nakamura

9/11

7/8

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

Tadashi Ishizaki

11/11

8/8

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

OutsideCorporate
AuditorForm of participation

Notes:

1. In addition to the resolutions at the above meetings of the Board of Directors held during the term,
two resolutions in writing were deemed to be passed as per Article 370 of the Companies Act.
2. Naoki Tanaka was newly elected as a Director at the 85th Annual Shareholders’ Meeting held on
March 26, 2009, and the number of meetings held during his tenure is therefore different fromthat for other Outside Directors and Outside Corporate Auditors.
•

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 ishigher.

30

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

KPMG AZSA & Co.
B. Remuneration paid to the Independent Auditor for the fiscal year under review
Amount payable
Remuneration paid for the fiscal year under review¥192 million

Total of cash and other financial profits payable by the Company andits subsidiaries to the Independent Auditor¥287 million

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 ¥192
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 & Co.

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 the preparation of letters of
comfort in connection with corporate bond issuance.
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 a 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.

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 theabove-mentioned systems:
The Company has adopted the following corporate philosophy: “The Asahi
Breweries Group aims to satisfy its customers with the highest levels of quality andintegrity, while contributing to the promotion of healthy living and enrichment of thesociety worldwide.” To make these aims a reality, the Company shall:•establish, in accordance with the Companies Act and the Enforcement Regulations
31

of 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 andExecutive 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. in atimely 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 Breweries 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
Breweries Group,” which will oversee the compliance affairs of the Asahi
Breweries Group. One of the committee’s members shall be an outside
attorney-at-law.

C.

An Executive Officer of the Company in charge of compliance shall have theauthority to manage compliance-related risks within the Asahi Breweries Group.
The General and Legal Affairs Management Department shall handle day-to-day
tasks of implementation of the compliance program.

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
Breweries Group, enabling them to blow the whistle on illicit behavior of others toa specific section of the Company or a designated outside attorney-at-law.

32

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 Breweries Group and theCompany shall establish an internal system on the measures. The Company shallalso cooperate closely with industry bodies, local communities, the police andother external 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 Breweries 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
management and shall affirm such regulations as the highest standards governing
risk management within the Asahi Breweries Group. It shall also develop andadopt an operational manual on risk management and disseminate the same among
all over the Group.

B.

In addition to having the appropriate departments manage risk in their respective
areas, the Company shall establish the “Asahi Breweries Group Risk Management
Committee” as a vehicle for comprehensive risk management across the entire
Asahi Breweries Group. This committee shall periodically analyze and evaluate
risks in accordance 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 tomaintain product quality. As food and drink manufacturers, the Asahi BreweriesGroup strongly recognizes their social responsibility to consumers to ensure the33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 Executive 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 BreweriesGroup. As the corporate headquarters of the Group, the Company shall manage andoperate the said systems of the Group Companies in accordance with theconditions and circumstances 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
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.

34

<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 to participate
in the Board of Directors meetings, the Corporate Strategy Board meetings and theBusiness Unit Management Board meetings. Directors shall provide details of theagenda 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.

<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.

35

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 Company’s group (hereinafter referred to as the“Asahi Breweries Group” or 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.
The Asahi Breweries Group, as its corporate philosophy, aims to “satisfy its
customers with the highest levels of quality and integrity, while contributing to thepromotion of healthy living and enrichment of the society worldwide.” The Group has
positioned the alcoholic beverage business that mainly handles beer, the soft drink
business, and the food and pharmaceutical business as its core operations and isconducting business activities accordingly.
Based on the corporate philosophy mentioned above, the Group has been striving toachieve growth for the whole of the Group and enhance its corporate value under
initiatives to “create appealing products” in anticipation of customer needs, to “careabout quality and craftsmanship,” as exemplified by efforts to maintain the freshness ofbeer through the collaboration of all of the Group's business divisions including
production, distribution and sales divisions, and to “convey the sense of joy tocustomers” through its products and services.
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 the36

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.
<A framework that contributes to the realization of the basic policy>
The Company is implementing the following measures to preserve and enhance its
corporate value and the common interests of shareholders. It believes that thesemeasures will contribute to the realization of the basic policy spelled out above.
A. Medium-Term Management Plan of the Asahi Breweries Group

Under its Third Medium-Term Management Plan, which the Company developed
and adopted in 2007, the Company has formulated a long-term Group vision inwhich it defines its thinking with respect to strengthening specific areas ofoperation and enhancing its corporate value. It declares in the plan that “the Asahi
Breweries Group will make ‘food and healthcare’ its business domain, and that it
will aim to become a fast-growing leader in the industry, principally in the Asian
region, by continuing to provide customers with joy and inspiration throughout
their lifetimes”.
To make this long-term vision a reality, the Group will seek first of all to strengthen
its competitiveness in “craftsmanship-based manufacturing”. With this as a point of
departure, the entire Group will endeavor to establish a new growth path andenhance the value of its corporate brands by elevating the value of the Asahi brandand by creating self-sustaining interactions and synergies between the Asahi brandand the Group’s diverse array of other brands.
B.

Corporate governance

By introducing an executive officer (Sikko-Yakuin) system on March 30, 2000,
Asahi Breweries separated the management decision-making and executionfunctions with a view to speeding up execution of business decisions andendeavored to strengthen the supervisory function of the Board. In addition, Asahi
Breweries has established a system that facilitates checks by outside directors, byelecting the outside directors and by setting up as a sub-body of the Board the“Nomination Committee” and the “Compensation Committee,” both including
outside directors as their members.

37

In order to further clarify the accountability of the management to shareholders,Asahi Breweries shortened the term of office for its directors from two years to one
year at the 83rd Annual Shareholders’ Meeting held on March 27, 2007.
<Efforts to prevent decisions on the Company's financial and business policy frombeing controlled by any person who is inappropriate according to the Basic Policy(framework of takeover defense measures)>
With the approval of the shareholders at the 83rd Annual Shareholders’ Meeting
held on March 27, 2007, the Company adopted a plan against large-scale purchases ofthe shares in the company (hereinafter, “the Plan”).
The Plan, with a view to maintaining and enhancing Asahi Breweries' corporate
value and the common interests of shareholders, lays down procedures for measures tobe taken in the event that Asahi Breweries becomes a target of a large-scale purchase ofshares or a similar move or a proposal thereof (hereinafter collectively referred to as the“Purchase”). Such measures include (1) requiring a person conducting the Purchase(hereinafter referred to as the “Purchaser”) to provide necessary and sufficient
information in advance, (2) securing time necessary for gathering and examining
information concerning the Purchase, and (3) presenting an alternative proposal toshareholders of the Company or conducting negotiations with the Purchaser.
The Plan shall be applicable to any of the following two types of Purchase(s).
A. 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; andB. 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 advance ofcommencement of the Purchase a document containing the information necessary toevaluate the content of the Purchase and a written pledge to observe and follow theprocedures set forth in the Plan in conducting the Purchase. Thereafter, the information
submitted by the Purchaser will be presented to the Independent Committee whose
members shall consist of Outside Directors, Outside Corporate Auditors and/or experts
all of whom are independent of management of the Company. The information will beassessed and evaluated by this committee. On its own accord, the Independent
Committee will obtain advice from independent third parties (including financial
advisers, CPAs, lawyers, consultants and other experts) and, on the basis of such advice,
will assess and evaluate the content of the Purchase, evaluate alternative proposals
offered by the Company’s Board of Directors, negotiate with the Purchaser, anddisclose information to shareholders of the Company. If the Independent Committee
determines that the information provided by the Purchaser does not meet the criteria for
the Required Information (as defined in the Plan), it may, either directly or indirectly,
38request the Purchaser to submit additional information within an appropriate period oftime as designated by the Independent Committee. In this event, the Purchaser shallsubmit such additional information within the period of time provided.
The Independent Committee will make recommendations to the Board to executethe Plan to allot gratis the Stock Acquisition Rights (as defined in the Plan) toshareholders of the Company if the Independent Committee has determined that thePurchase meets either of the requirements for exercise of the Plan and it is appropriate
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 the Committee, the Committee
concludes the Purchase could cause obvious damage to the Company’s corporate value
and the common interests of shareholders in the opinion of the Committee. These stockacquisition 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 of Directors - which shall be set at a level between a minimum of one (1) yen anda maximum of one-half the market value per share of the Company’s stock. In addition,these rights shall contain conditions that exclude the Purchaser from exercising therights and shall also be accompanied by provisions that enable the Company to acquireone (1) stock acquisition right in exchange for one (1) share of the Company’s stockfrom persons other than the Purchaser.
While paying its utmost respect to the recommendation made by the Independent
Committee as stated above, the Company’s Board of Directors shall, as theorganizational body authorized to do so under the Companies Act, promptly decide
whether or not to execute the gratis Allotment of the Stock Acquisition Rights.
The Plan shall be effective from the close of the 83rd Annual Shareholders’ Meeting
held on March 27, 2007 until the close of the Company’s annual meeting ofshareholders that concerns the last one of the Company’s business years that end within
three years from the close of the 83rd Meeting.
Notwithstanding the above, the Company may abrogate the Plan even before theeffective 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.
When the Plan is thus abrogated, amended or altered, as the case may be, theCompany shall promptly disclose to the public information with regard to thebackground of such abrogation, amendment or alteration, as the case may be, and, in thecase of amendment or alteration, the details of such amendment or alteration and othernecessary matters.
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 theStock Acquisition Rights is executed, the shares held by a shareholder of the Company
will be subject to dilution unless he/she carries out the procedures required for the
exercise of the Stock Acquisition Rights (note, however, no dilution shall occur in case
the Company exercises option of acquisition of the Stock Acquisition Rights for sharesin the Company).
39

<Judgment of the Company’s Board of Directors regarding the framework of
takeover defense measures described above in <Framework to prevent persons who
are deemed inappropriate in light of the Company’s basic policy from taking controlof the Company in deciding its policies on finance and business (framework of
takeover defense measures)>
The following elements having been taken into consideration and incorporated into
the design of the Plan, the Board of Directors 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 83rd Annual Shareholders’ Meeting held on March 27,
2007.

•

The effective period of the Plan is limited, running until the close of the Company’s
annual 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
shareholders’ meeting.

•

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

B. Respect for Judgment of Outside Parties with High Degree of Independence andInformation Disclosure

In incorporating the Plan, the Company has established the Independent Committee
as a body to make a substantial judgment objectively with regard to matters concerning
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 a view to preventing
arbitrary decisions by the Board. The members of the Independent Committee areappointed by the Board from among Outside Directors, Outside Corporate Auditors
and/or experts who meet the requirements stipulated in the Company’s internal rules for
the Independent Committee.
Once a Purchase is actually commenced, the Independent Committee shall make a
substantial judgment as to whether or not the Purchase would damage the Company’s
corporate value and the common interests of shareholders as stated above. Then, theBoard shall pay its utmost respect to the Independent Committee’s judgment and makea resolution under the Companies Act.
In this way, the Independent Committee shall maintain close surveillance over the
Board to prevent any arbitrary decision by the Board and disclose to shareholders
information concerning the details of its judgment, thus ensuring that the Plan will behandled in a transparent manner within the limits necessary for contributing to theenhancement of the Company’s corporate value and the common interests of40

shareholders.
C.

Setting of Reasonable and Objective Conditions

The Plan is designed in ways not to be triggered unless and until reasonable andobjective conditions are met, and ensures a structure to eliminate arbitrary triggering by
the Board.

41

CONSOLIDATED BALANCE SHEETSMillion yen
As of December 31,
2009

ASSETS
Current assets:
Cash and deposits
Notes and accounts receivable
Securities

19,583
274,558

Inventories
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets－
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

189,152
160,924
48,929184,433
9,142

Construction in progress
Other tangible fixed assets

6,382
142

(Reference)
As of December 31,
2008

12,771
265,048301
97,0399,009
34,218(6,044)412,344

196,061
174,038
45,398185,201－
6,090－

Total tangible fixed assets

599,108606,791

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

100,31440,427140,741

60,675
15,69676,371

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

142,7316,034
12,10924,212
25,109(6,645)203,551
886,714
1,299,058

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

42

CONSOLIDATED BALANCE SHEETSMillion yen
As of December 31,
2009(Reference)
As of December 31,
2008

LIABILITIES AND NET ASSETSLIABILITIESCurrent liabilities:
Notes and trade accounts payable
Short-term borrowings
Bonds due within one year
Lease obligations

100,998
141,220
15,0002,031

Alcohol tax payable
Consumption taxes payable
Income taxes payable
Other accounts payable
Accrued expenses
Deposits received
Commercial paper
Allowance for employees’ bonuses

123,470
8,914
24,096
49,83652,462
20,42930,0002,559

Other current liabilities
Total current liabilities

2,761
573,780

Long-term liabilities:
Bonds
Long-term borrowings
Lease obligations

130,156
75,499
7,341

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

43

99,67495,55620,000－128,379
8,636
22,65353,362
51,823
22,863
7,000
－
6,111
516,061

120,168
59,53524,252602－
23,515633

4,860
39,457282,169
855,949

6,112
38,404
248,369
764,430

Million yen

NET ASSETS
Shareholders’ equity:
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Valuation and translation adjustments:
Valuation difference on available-for-sale securities
Revaluation surplus for landDeferred gains or losses on hedges
Foreign currency translation adjustments
Total valuation and translation adjustments
Minority interests
Total net assets
Total liabilities and net assets

44

As of December 31,
2009(Reference)
As of December 31,
2008

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

182,531
151,147
214,189(29,579)
518,288

2,444

1,111

－
(6)
14,591
17,029

1,751
(3)
446
3,305

4,229
577,702
1,433,652

13,033534,627
1,299,058

CONSOLIDATED STATEMENTS OF INCOME
Million yen
For the year ended
December 31, 2009

(Reference)
For the year ended
December 31, 2008

1,472,468
958,444514,024
431,247
82,777

1,462,747
953,486
509,261
414,741
94,520Non-operating income:

15,943

13,923

Interest income

328

312

Dividend income

2,426

1,485

Foreign exchange gains

1,814
8,512

－
9,105

2,860
8,173
4,628

3,020
11,969
5,193

－

1,244
2,240

Other non-operating expenses
Recurring profit
Extraordinary gains:
Gain on sale of fixed assets
Gain on sale of investment securities
Gain on sales of subsidiaries and affiliates' stocks－
3,544
90,546
19,558778
388
16,090

Reversal of allowance for doubtful accounts

478

－
571

Compensation for recall

910

1,385

Compensation for transfer－

758

Gain on change in equity

912－
16,452
4,343
50

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income

Equity in net income of unconsolidated subsidiaries andaffiliated companies
Other non-operating income
Non-operating expenses:
Interest expenses
Foreign exchange losses
Loss on sale and disposal of inventories

Extraordinary losses:
Loss on sale and disposal of fixed assets
Retirement benefits for directors and corporate auditors

22,027
9,954

3,289
96,474
2,915
130
69

Loss on sale of investment securities－
487

Loss on devaluation of investment securities

788

3,598

8,317

2,196

Expenses for business structure improvement

－

1,064

Recall-related losses

－

1,407

Previous year’s sales promotion expenses

－

3,113

1,401

－
639
82,938

Impairment loss on fixed assets

Gain on contribution of securities to retirement benefit trust
Other extraordinary losses
Income before income taxes and minority interests

45

1,077
88,07737

Income taxes－current
Income taxes－deferred
Minority interests in net gains (losses) of unconsolidated
subsidiaries
Net income

46

42,36939,574

(898)

1,548

(1,037)(3,198)47,64445,014

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFor the year ended December 31, 2009

Million yen

Shareholders' equity
Commonstock
Balance as of Dec. 31, 2008

Capital surplus Retained earnings

182,531

151,147

214,189

Treasury stock

Total
shareholders'equity(29,579)

518,288

Changes during the term
Dividends(9,529)(9,529)Net income (loss)

47,64447,644

Acquisition of treasury stock
Disposal of treasury stock

(99)

(31)

(31)

327

228

Change of scope of
consolidation

(394)

(394)

Change of scope of equity
method(15)(15)

Effect of changes inaccounting policies applied toforeign subsidiaries

251

251

Other changes in
non-shareholders' equity items
during the term (net)Total changes during the term
Balance as of Dec. 31, 2009

182,531(99)

37,957296

38,154

151,048

252,146(29,283)

556,443

Valuation and translation adjustments
Valuationdifference on
available-forsale securities

Balance as of Dec. 31, 2008

1,111

Revaluation Deferred gains
surplus foror losses onlandhedges1,751(3)ForeignTotal
currency valuation andtranslationtranslation
adjustments adjustments

446

3,305

Minority
interests

Total
net assets

13,033534,627

Changes during the term
Dividends(9,529)Net income (loss)

47,644

Acquisition of treasury stock(31)

Disposal of treasury stock

228

Change of scope of
consolidation(394)

Change of scope of equity
method(15)

Effect of changes inaccounting policies applied toforeign subsidiaries

251

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

1,333(1,751)(3)

14,145

13,723(8,803)

4,919

Total changes during the term

1,333

(1,751)(3)

14,145

13,723(8,803)43,074

Balance as of Dec. 31, 2009

2,444

－

(6)

14,591

17,0294,229

577,70247

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: 55
Principal consolidated subsidiaries
Please see Item 1 of the “Business Report” {“Overview of Operations of Asahi
Breweries Group, section (7) “Principal Subsidiaries”}, for a summary of the current
status of principal consolidated subsidiaries.
The companies newly included in the scope of consolidation during the fiscal year
under review were as follows: Asahi Holdings (Australia) Pty Ltd. and Asahi Midori
Sales Co., Ltd. due to their incorporation; Schweppes Holdings Pty Limited and twoother firms, following acquisitions of shares; and Shandong Asahi Green Source
High-Tech Farm Co., Ltd. and Shandong Asahi Green Source Milk Products Co., Ltd.
due to increases in materiality.
The companies removed from the scope of consolidation during the fiscal year underreview were Wako Logistics Co., Ltd. as the result of its merger with a consolidated
subsidiary of the Company and Qingdao Tsingtao Beer & Asahi Beverage Co., Ltd. as
the result of a transfer of the equity stake.
B. Principal unconsolidated subsidiaries:
Demball Limited
Rationale for exclusion from the scope of consolidation:
The unconsolidated 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: 34
Unconsolidated subsidiary subject to application of the equity method: 1
Asahi Beer Engineering Co., Ltd.
Affiliates subject to application of the equity method: 33
These include Asahi Business Solutions Corp., Shenzhen Tsingtao Beer Asahi Co., Ltd.,
Asahi & Mercuries Co., Ltd., Tsingtao Brewery Co., Ltd., Tingyi-Asahi-Itochu
Beverages Holding Co., Ltd. and its 28 affiliated companies.

48

Companies that became subject to application of the equity method in the fiscal year
under review were as follows: 2 affiliates of Tingyi-Asahi-Itochu Beverages Holding
Co., Ltd. due to their incorporation; Tsingtao Brewery Co., Ltd. as the result of an
acquisition of shares; and Asahi & Mercuries Co., Ltd. following an increase inmateriality.
B. Principal unconsolidated subsidiaries and affiliates not subject to application of the equity
methodUnconsolidated subsidiaries:
Affiliates:

Demball Limited
Asahi Business Produce Co., Ltd.

Rationale for not applying the equity method to the unconsolidated 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
have no material impact as a whole on the consolidated financial statements and thus
the equity 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.

49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 themoving-average method (write-downs to net selling value regarded as decreased
profitability).
(Change in accounting policy)
The Company has applied “Accounting Standards Relating to the Valuation of
Inventory Assets” (ASBJ Statement No. 9, published July 5, 2006) beginning with thefiscal year under review. The effect of this change as compared with previous
methods was to reduce gross profit by ¥3,057 million, operating income by ¥1,558
million, and recurring profit and income before income taxes and minority interestsby ¥89 million each.
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-balancemethodAssets 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-balance method
Assets 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.
(Additional information)
In accordance with amendments of the Corporation Tax Act related to the usage oftangible fixed assets enacted during the year ended March 2009, the Company and its
domestic consolidated subsidiaries have applied revised values for the estimated50useful lives of machinery and equipment beginning with the fiscal year under review.
This change resulted in reductions in operating income, recurring profit and income
before income taxes and minority interests of ¥5,884 million each.
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 thestraight-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.
(Change in accounting policy)
Previously, the accounting treatment of finance leases that do not transfer ownershiprights was the same as that for operating leases. Beginning with the fiscal year underreview, the Company has applied “Accounting Standards Relating to Lease
Transactions” (ASBJ Statement No. 13, published by the First Subcommittee of theBusiness Accounting Council on June 17, 1993, and revised on March 30, 2007) and“Guidelines for the Application of Accounting Standards Relating to Lease
Transactions” (ASBJ Guidance No. 16, published by the Accounting Systems
Committee of the Japanese Institute of Certified Public Accountants on January 18,
1994, and revised on March 30, 2007) to treat such leases as regular commercial
transactions for accounting purposes.
Any finance lease not transferring ownership rights whose lease period began prior to
the start of the fiscal year in which the new accounting standard was applied istreated as an operating lease for accounting purposes.
The effect of this change on earnings was immaterial.

51

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 an
amount 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 at term-end. 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 theemployees’ average remaining years of service.
Prior service costs are amortized by the straight-line method within the averageremaining years of service of employees (generally 10 years) from the time theyarise.
Allowance for retirement benefits for directors and corporate auditors:
Some of the consolidated subsidiaries calculate the required amount, based oninternal regulations, in preparation for payment of retirement benefits to directors andcorporate auditors as of the end of the fiscal year under review.
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) Accounting for major hedging
a. Accounting for hedging
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 risks hedged:
Hedging instruments: Currency swaps and interest rate swaps
Hedged items:

Transactions in foreign currencies and interest on borrowingsc. Hedging policy:
Derivative transactions are used to avoid risks associated with fluctuations in foreign52exchange 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 ofhedging instruments or when it accounts for the value of swaps under special
exceptions, these determinations allow it to forgo evaluation of the effectiveness ofhedges in these cases.
2) Consumption tax and similar taxes
Consumption tax and similar taxes are mainly excluded from the statements ofincome, except in the case of non-deductible consumption taxes related to fixed
assets that are charged when incurred.
(5) Evaluation of consolidated subsidiaries’ assets and liabilities
A kind of fair market value method evaluating all assets and liabilities of consolidated
subsidiaries by fair market value as at the date of acquisition thereof is used.
(6) Amortization of goodwill
Goodwill is amortized by the straight-line method over a five- to twenty-year period.
(Change in accounting policy)
Application of “Current Approach to Accounting Treatment of Foreign Subsidiaries in
Preparation of Consolidated Financial Statements”
The Company has applied “Current Approach to Accounting Treatment of Foreign Subsidiaries
in Preparation of Consolidated Financial Statements” (Practical Issues Task Force Report No.
18, published by the Accounting Standards Board of Japan on May 17, 2006) beginning withthe fiscal year under review. The Company’s consolidated financial accounts have been revised
as necessary to take this change into account.
The effect of this change was to reduce operating income by ¥1,377 million and recurring profit
and income before income taxes and minority interests by ¥1,415 million each.

53

(Changes in method of presentation)“Allowance for employees’ bonuses,” which was included in the “Other current liabilities”
category of “Current liabilities” in the consolidated fiscal year to December 2008, is shown as aseparate account in the year to December 2009.

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 ¥2,814
million and long-term borrowings of ¥1,954 million:
Buildings and structures:
Machinery, equipment and vehicles:
Land:
Total

¥6,563 million¥534 million¥16,732 million¥23,831 million(2) Accumulated depreciation of tangible fixed assets:¥676,741 million(3) Contingent liabilities
Guarantees:¥1,276 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 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:
Notes payable:¥369 million¥251 million

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 ¥212 million arising in relation to the holding company of a Groupaffiliate accounted for by the equity method.

54

(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

Operating assets(assets for alcoholic
beverages business)

Location of asset

Beijing, China

Type of asset

Buildings and structures, machinery,equipment and vehicles, and tools,
furniture and fixtures

Leased asset

Saitama, Saitama Prefectureand 5 others

Buildings and structures and land

Idle assets

Yufutsu, Hokkaido

Buildings and structures and land

Others―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 astand-alone asset group.
Headquarters buildings and employee welfare facilities of the Company and its groupcompanies are categorized as common-use assets, as they do not generate cash flows on
their own.
An impairment loss (¥1,632 million for buildings and structures, ¥1,942 million formachinery, equipment and vehicles, ¥11 million for tools, furniture and fixtures, ¥2,340
million for land, and ¥2,390 million for goodwill) was recorded as an extraordinary loss
corresponding to differences between the recoverable amounts and book values of certain
assets. These differences arose because (a) the earnings generated by operating assets (in thealcoholic beverages business) were less than originally anticipated, (b) the market value ofcertain leased assets declined substantially below book value, prompting the Group torecognize certain amounts invested as irrecoverable, (c) the book values of certain assetsthat had been rendered idle during the fiscal year under review were higher than thecorresponding market values, and (d) a portion of the goodwill booked against certain
foreign subsidiaries in the Group’s alcoholic beverages and soft drinks businesses wasdeemed 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 and the utility value
calculated using a discount rate of between 4.3% and 8.3% on future cash flows.

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 shares
As of the end of the fiscal year (Dec. 31, 2009):

55

483,585,862 shares(2) Dividends from retained earnings distributed during the fiscal year under review
A. It was resolved at the 85th Annual Shareholders’ Meeting of March 26, 2009 as follows:
Item related to dividends on common stock
Total amount of dividends:¥4,880 million
Dividend per share:¥10.50Record date:
December 31, 2008
Effective date:
March 27, 2009
B. It was resolved at the Board of Directors Meeting of July 31, 2009 as follows:
Item related to interim dividends on common stock
Total amount of interim dividends:¥4,648 million
Interim dividend per share:¥10.00Record date:June 30, 2009
Effective date:
September 1, 2009
(3) Dividends from surplus to be distributed after the final day of the fiscal year under review
The following item has been placed on the agenda for approval at the 86th Annual Shareholders’Meeting scheduled for March 26, 2010.
Item related to dividends on common stock
Source of dividends:
Retained earnings
Total amount of dividends:¥5,115 million
Dividend per share:¥11.00Record date:
December 31, 2009
Effective date:
March 29, 2010
(4) Number of shares subject to share purchase warrants upon exercise thereof (as of December
31, 2009)
The First Issue of share purchase warrants (issued March 28, 2003)
Number of share purchase warrants:
133
Class and number of shares subject to the share purchase warrants: 133,000 common shares
Amount to be paid in per share upon exercise of the share purchase warrants:¥830
Exercise period:
March 28, 2005 to March 27, 2013
The Second Issue of share purchase warrants (issued March 30, 2004)
Number of share purchase warrants:
5,179
Class and number of shares subject to the share purchase warrants: 517,900 common shares
Amount to be paid in per share upon exercise of the share purchase warrants:¥1,205
Exercise period:
March 30, 2006 to March 29, 2014
The Third Issue of share purchase warrants (issued March 30, 2005)
Number of share purchase warrants:
5,875
Class and number of shares subject to the share purchase warrants: 587,500 common shares
Amount to be paid in per share upon exercise of the share purchase warrants:¥1,374
Exercise period:
March 30, 2007 to March 29, 2015
56

The Fourth Issue of share purchase warrants (issued March 30, 2006)
Number of share purchase warrants:
6,200
Class and number of shares subject to the share purchase warrants: 620,000 common shares
Amount to be paid in per share upon exercise of the share purchase warrants:¥1,688Exercise period:
March 30, 2008 to March 29, 2016

5. Per share information(1) Net assets per share:¥1,233.25(2) Net income per share:¥102.49

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

57

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, 2009

For the year ended
December 31, 2008

88,07758,372
5,287
765

82,93847,353
3,994(3,271)

(753)
(891)
5,042
(2,820)(4,909)(1,941)(529)
15,576(6,956)(4,104)(5,970)12,729146,229
7,162(4,605)(42,428)
106,358

141,758
2,066(5,191)(32,538)
106,094(58,537)(82,837)
39,329(15,362)(60,043)(40,717)(8,559)1,167(2,928)(5,420)Cash flows from investing activities:
Purchase of fixed assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of investments in subsidiaries
Purchase of investments in subsidiaries resulting in change
in scope of consolidation
Proceeds from purchase of investments in subsidiaries
resulting in change in scope of consolidation
Other cash flows from investing activities
Net cash used in investing activities

－

2,154

(3,185)(180,637)(3,931)(58,235)

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

88,876(31)(9,529)(770)
78,545(22,148)(15,348)(8,904)
37(46,365)

58

Million yen

Effect of exchange rate change on cash and cash
equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents due to change inscope of consolidation
Cash and cash equivalents at end of year

59

For the year ended
December 31, 2009

For the year ended
December 31, 2008

643

(536)

4,908
12,697475

956
11,741

18,082

12,697－

NON-CONSOLIDATED BALANCE SHEETSMillion yen
As of December 31,
2009(Reference)
As of December 31,
2008

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

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

5,403
3,317
186,287
11,145
9,363
13,790
5,345
16,245
9,202
5,976
7,895
(4,359)Total current assets

264,058

269,614

Fixed assets:
Tangible fixed assets:
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Lease assets

127,332
17,128117,85923
41,312
127,692487

135,064
18,875140,01126
42,771130,027

Construction in progress

3,041
434,878

Intangible fixed assets:
Rights to use of facilities
Trademark Rights

576
18,615

SoftwareLease assets

7,661
22

Other intangible fixed assets

6
26,882

60－
1,671
468,447

634
－
8,175
－
15
8,825

Million yen

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

61

As of December 31,
2009(Reference)
As of December 31,
2008

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

85,336
174,834
4,044
10,422
11,03624,360(7,732)
302,302779,576
1,049,190

NON-CONSOLIDATED BALANCE SHEETSMillion yen
As of December 31,
2009(Reference)
As of December 31,
2008

54,939106,700
15,00055,74456,62520,000

167
7,944
114,708
6,740
12,05039,071
30,66430,000
1,278
108
370

－
9,363
120,219
7,357
19,84442,02426,559
7,000
1,355
105
64

419,742366,265

130,156
61,000120,168
40,000370
33,726
2,907
386
228,547648,290－
33,7403,055
422
197,386
563,652

LIABILITIES AND NET ASSETSLIABILITIESCurrent liabilities:
Trade accounts payable
Short-term borrowings
Bonds due within one year
Lease obligations
Other accounts payable
Alcohol taxes payable
Consumption and similar 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
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

62Million yen

NET ASSETS
Shareholders’ equity:
Common 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
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

63

As of December 31,
2009(Reference)
As of December 31,
2008

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

182,531
160,165
130,292
29,872
170,865
170,8651,130
125,000
44,735(29,579)
483,982

2,882
2,882
507,569
1,155,860

1,555
1,555
485,538
1,049,190

NON-CONSOLIDATED STATEMENTS OF INCOME
Million yen
For the year ended
December 31, 2009

(Reference)
For the year ended
December 31, 2008

985,468
702,016
283,452
204,939
78,5137,009
3,586

1,019,613
724,460
295,153
204,102
91,050
3,242
2,372

1,620

－

－
870
5,731
2,997
786

3,263

1,946

79,303
1,711

88,562
2,615

Gain on sale of fixed assets

48

3

Gain on sale of investment securities
Reversal of allowance for doubtful accounts
Compensation for recall
Compensation for transfer

370
383
910

55
413
1,385
758

Extraordinary losses:
Loss on sale and disposal of fixed assets
Loss on sale of investment securities
Loss on devaluation of investment securities
Loss on devaluation of investment in affiliates
Loss on sale of investment in affiliates

21,012
7,453
88
706
4,718

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
Loss on sale and disposal of inventories

1,802
6,219
2,955

Other non-operating expenses
Recurring profit
Extraordinary gains:－－

18,866
3,615
1
3,064
5,343
191

3,207

2,128

Previous year’s sales promotion expenses

－

3,113

Recall-related losses

－

1,407

Loss on contribution of securities to retirement benefit trust

1,401

－

Impairment loss

3,435

－

Income taxes－current

60,002
28,27872,31133,265

Income taxes－deferred

1,688

52

30,03638,994

Loss on devaluation of equity participation in affiliates

Income before income taxes

Net income64NON-CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFor the year ended December 31, 2009

Million yen
Shareholders' equity

Capital surplus
Commonstock

Balance as of Dec. 31,
2008

182,531

Capital Other capitalreserve
surplus130,292

Total capitalsurplus29,872

160,165

Retained earnings
Other retained earnings
Reserve for
Retained
reduction in
Generalearnings
entry of fixedreservecarried forward
assets1,130

125,000

Total
retainedearnings

44,735

170,865

Dividends(9,529)(9,529)Net income (loss)

30,03630,03664－

30,000(30,000)－

Changes during theterm

Acquisition oftreasury stock
Disposal of treasury
stock

(99)

(99)

Reversal of reserve
for reduction in entryof fixed assets(64)

Provision of generalreserve
Other changes in
non-shareholders'equity items during
the term (net)Total changes during
the term
Balance as of Dec. 31,
2009

182,531130,292

Shareholders' equity

Balance as of Dec. 31,
2008

Treasury
stock

Total
shareholders'equity(29,579)

483,982

(99)

(99)

(64)

30,000(9,428)20,506

29,773160,066

1,065

155,000

35,306

191,372

Valuation and translation
adjustments
Valuationdifference on Total valuation
available- and translation
adjustments
for-salesecurities
1,555

1,555

Total net
assets

485,538

Changes during theterm
Dividends(9,529)(9,529)Net income (loss)

30,03630,036

Acquisition oftreasury stock

(31)

(31)

(31)

Disposal of treasury
stock

327

228

228

Reversal of reserve
for reduction in entryof fixed assets－－

Provision of generalreserve－－

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

1,327

1,327

1,327

Total changes during
the term

296

20,704

1,327

1,327

22,031

Balance as of Dec. 31,
2009(29,283)

504,686

2,882

2,882

507,569

65

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 with market value
Carried at the average market value for the month immediately preceding the balance
sheet date (valuation differences are all debited or credited directly to the net assets
section, with the cost of securities sold 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 based on theweighted-average method (write-downs to net selling value regarded as decreased
profitability).
Raw materials and supplies are stated at cost based on the moving-average method(write-downs to net selling value regarded as decreased profitability).
(Change in accounting policy)
The Company has applied “Accounting Standards Relating to the Valuation of Inventory
Assets” (ASBJ Statement No. 9 published July 5, 2006) beginning with the fiscal year underreview. This change reduced gross profit by ¥2,145 million, operating income by ¥645
million, and recurring profit and income before income taxes by ¥25 million each comparedwith previous methods.
(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 assets
Assets acquired on or before March 31, 2007: the former declining-balancemethodAssets acquired on or after April 1, 2007: the declining-balance method
Buildings (exclusive of fixtures) acquired on or after April 1, 1998:
66

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.
(Additional information)
In accordance with amendments of the Corporation Tax Act related to the usage oftangible fixed assets enacted during the year ended March 2009, the Company has
applied revised values for the estimated useful lives of machinery and equipment
beginning with the fiscal year under review.
The effect of this change was to reduce operating income, recurring profit and income
before income taxes by ¥5,920 million each.
Intangible fixed assets (excluding lease assets):
Intangible fixed assets are amortized using the straight-line method. The estimateduseful lives of the assets are based on the standards 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 value ofzero using the straight-line method, with the lease period as the estimated useful life.
(Change in accounting policy)
The accounting treatment of finance leases that do not transfer ownership rights waspreviously the same as that applied to operating leases. Beginning with the fiscal year
under review, the Company has applied “Accounting Standards Relating to Lease
Transactions” (ASBJ Statement No. 13, published by the First Subcommittee of theBusiness Accounting Council on June 17, 1993, and revised on March 30, 2007) and“Guidelines for the Application of Accounting Standards Relating to Lease
Transactions” (ASBJ Guidance No. 16, published by the Accounting Systems
Committee of the Japanese Institute of Certified Public Accountants on January 18,
1994, and revised on March 30, 2007) to treat such leases as regular commercial
transactions for accounting purposes.
Any finance lease not transferring ownership rights whose lease period began prior to
the start of the fiscal year in which the new accounting standard was applied is treatedas an operating lease for accounting purposes.
The effect of this change on earnings was immaterial.

67

(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 an amountcalculated 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 yearsof service.
Prior service costs are amortized by the straight-line method within the averageremaining years of service of employees (10 years) from the time they arise.
Allowance for employees’ bonuses:
An allowance for employees’ bonuses is provided at the estimated amount applicable tothe 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) Accounting for hedging
A. Accounting for hedging
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.
B. Hedging instruments and risks hedged:
Hedging instruments: Foreign exchange contracts and interest rate swaps
Hedged items: Foreign currency-denominated loans receivable and interest on
borrowings

68

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 demandor in 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 special exceptions, these determinations
allow it to forgo evaluation of the effectiveness of hedges in these cases.
(7) Consumption tax and similar taxes:
Consumption tax and similar taxes are excluded from the statements of income, except in
the case of non-deductible consumption taxes related to fixed assets that are charged whenincurred.
(Changes in method of presentation)
Owing to an increase in materiality, “Trademark rights” (valued at ¥9 million at the previous
fiscal year-end) were classified as a separate item under intangible fixed assets beginning withthe fiscal year under review. These assets had previously been included in “Other intangible
fixed assets.”

2. Notes to the Non-Consolidated Balance Sheets(1) Accumulated depreciation on tangible fixed assets:¥510,404 million(2) Contingent liabilities
A. Guarantees, etc., against bank borrowings
Guarantees:
Comfort letters, etc.:
B. Guarantees, etc., against derivatives
Guarantees:
Contract amount, etc.:
Unrealized gains (losses):¥23,713 million¥574 million¥2,036 million¥(22) 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 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:¥39 million

69

(4) Monetary claims and obligations with affiliates
Short-term monetary claims on affiliates:
Long-term monetary claims on affiliates:
Short-term monetary obligations to affiliates:¥25,861 million¥3,692 million¥29,846 million

3. Notes to the Non-Consolidated Statements of Income(1) Transactions with affiliates:
Net sales:
Purchases:
Selling, general and administrative expenses:
Transactions other than operating transactions:¥44,002 million¥79,320 million¥31,490 million¥2,917 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

Saitama, Saitama Prefectureand 5 other locations

Type of asset

Buildings and 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 (¥1,056 million for buildings, ¥38 million for structures, and ¥2,339
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.

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

Balance as of the end of
the previous fiscal year
(Dec. 31, 2008)

Increase

Decrease

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

Common shares

18,762,163

22,664

207,861

18,576,966(Reasons for change)
The increase in shares was the result of the following:
Increase resulting from purchases of shares of less than one unit from shareholders ofsuch shares responding to their request:
22,664 shares
The decrease in shares was the result of the following:
Decrease resulting from sales of shares of less than one unit to shareholders of sharesof less than one voting unit to make their fractional shares a voting unit responding totheir demand:
2,661 shares
Decrease resulting from exercise of stock options:205,200 shares71

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:
Loss on devaluation of investment in affiliates, 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 affiliates,
non-tax deductible:
Amortization of deferred charges, in excess of tax-deductible amount:
Disapproval of unpaid enterprise taxes:
Impairment loss on fixed assets:
Others:Subtotal deferred tax assets:
Valuation allowance:
Total deferred tax assets:
Deferred tax liabilities
Reserve for reduction in entry of fixed assets:
Valuation difference on available-for-sale securities:
Prepaid pension expenses:¥4,152 million¥465 million¥7,757 million¥10,492 million¥212 million¥2,036 million¥3,011 million¥5,157 million¥52 million¥996 million¥2,670 million¥5,210 million¥42,215 million¥(23,622) million¥18,593 million

Total deferred tax liabilities:¥(722) million¥(1,953) million¥(1,492) million¥(4,168) million

Net deferred tax assets:¥14,425 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:
Valuation allowance:
Permanent difference (non-taxable), including dividend income:Tax credit:
Others:
Effective tax rates after application of tax effect accounting:

2.1%
8.3%
(0.4)%(0.9)%
0.4%
49.9%

72

6. Notes related to leased fixed assets
Separately from the fixed assets carried on the balance sheet, 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:¥22,177 million(2) As of the end of the fiscal year under review
Amount equivalent to accumulated depreciation:¥14,776 million(3) As of the end of the fiscal year under review
Amount equivalent to prepaid lease rents:¥7,782 million

7. Per share information(1) Net assets per share:¥1,091.53(2) Net income per share:¥64.61

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

73

INDEPENDENT AUDITOR’S REPORT
February 4, 2010
To: The Board of Directors
ASAHI BREWERIES, LTD.
KPMG AZSA & Co.
Hiroyuki Sakai (Seal)
Designated and Engagement Partner
Certified Public Accountant
Hajime Harada (Seal)
Designated and Engagement Partner
Certified Public Accountant
Yasuyuki Nagasaki (Seal)
Designated and Engagement Partner
Certified Public Accountant
In accordance with the provisions of Paragraph 4, Article 444 of the Companies Act, wehave audited the consolidated financial statements of ASAHI BREWERIES, LTD. (the“Company”) for the fiscal year from January 1, 2009 to December 31, 2009. Thesestatements consist of the consolidated balance 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 responsibilityof 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 inJapan. Those auditing standards require that we obtain reasonable assurance that theconsolidated financial statements 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 the accounting principles used, the methods of application thereof,and estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements. We believe that our audit provides a reasonable basis forour opinion.
In our opinion, the foregoing consolidated financial statements present fairly, in allmaterial aspects, the financial position and results of operations of the Company and its
consolidated subsidiaries for the period covered by the aforesaid financial statements inconformity 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.

74

INDEPENDENT AUDITOR’S REPORT
February 4, 2010

To: The Board of Directors
ASAHI BREWERIES, LTD.
KPMG AZSA & Co.

Hiroyuki Sakai (Seal)
Designated and Engagement Partner
Certified Public Accountant
Hajime Harada (Seal)
Designated and Engagement Partner
Certified Public Accountant
Yasuyuki Nagasaki (Seal)
Designated and Engagement Partner
Certified Public Accountant
In accordance with the provisions of Item 1, Paragraph 2, Article 436 of the Companies
Act, we have audited the financial statements of ASAHI BREWERIES, LTD. (the “Company”)
for its 86th fiscal year, the period from January 1, 2009 to December 31, 2009. These statements
consist of the non-consolidated balance sheets, the non-consolidated statements of income, thenon-consolidated statements of 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 and supporting 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 the accounting principles used, the methods of application thereof, andestimates 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 reasonablebasis for our opinion.
In our opinion, the foregoing financial statements and supporting schedules thereto present
fairly, in all material aspects, the financial position and results of operations of the Company forthe period covered by 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.

75

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 theirduties during the 86th fiscal year, the period from January 1, 2009 to December 31, 2009, afterdue discussions and consultations 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, andreceived 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 theirduties, and requested explanations of those reports when necessary.
(2) Each Corporate Auditor sought to achieve mutual understanding with the Directors andother employees, and strove to collect information and create an audit environment inaccordance with the audit 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 and other important meetings, received reports from
Directors and other employees regarding the execution of their duties and requested
explanations when necessary, reviewed documents related to important decisions, andinspected the operations and property of the head office and other important businessfacilities. 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 andregulations and the articles of incorporation (internal control systems)” (Item 6, Paragraph 4,
Article 362 of the Companies Act and Article 100, Paragraph 1 and 3 of the Ordinance for
Enforcement of the Companies Act) that is included in the business report. With respect tointernal controls on financial reporting, the Board received reports from the Directors and
KPMG AZSA & Co. related to evaluation and auditing of the Company’s internal controls,
and sought additional explanations as necessary. In addition, the Board examined the statusof “the basic policy and measures concerning the persons responsible for controlling
decisions pertaining to the Company’s financial affairs and business policies” (Article 118of the Ordinance for Enforcement of the Companies Act), based on discussions with theBoard of Directors and other parties. With respect to subsidiaries, the Corporate Auditors
took steps to facilitate communications with the directors and corporate auditors ofsubsidiaries and, when necessary, received reports from subsidiaries on the status of theirbusinesses. Using the foregoing methods, the Corporate Auditors reviewed the Business
Report and the 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 for the 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” (Business Accounting Council; October 28, 2005),
and requested explanations when necessary. Based on the above activities, the Board of
Corporate Auditors examined the financial statements (Balance Sheets, Statements ofIncome, 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, andnotes to those statements) for the business year under review.

76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 thesituation 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 andregulations or the Articles of Incorporation in the execution of their duties by the
Directors.
•
In our opinion, the content of the resolution by the Board of Directors regarding internal
control systems is appropriate, and, furthermore, 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 isappropriate. We acknowledge that the measures implemented to achieve this basic
policy are consistent with the basic policy, will not harm the common interest of theCompany’s shareholders, and serve the purpose of maintaining the positions of theCompany’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 & Co., the Independent Auditor,
and the results of its audit are appropriate.
(3) Results of the audit of consolidated financial statements
In our opinion, the auditing methods used by KPMG AZSA & Co., the Independent Auditor,
and the results of its audit are appropriate.

February 5, 2010
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

77

REFERENCE MATERIALS FOR SHAREHOLDERS’ MEETING
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 policyof implementing returns to shareholders with the business performance taken into account while
seeking enhanced profitability and stronger financial conditions. The Company continues tostrive 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 offactors, including the Company’s consolidated financial condition and achievement for the
fiscal year under review, the Company proposes a year-end dividend of ¥11.0 per share, as
follows:(1) Type of dividend asset
Cash(2) Allocation of dividend assets to shareholders and total amount of allocation¥11.0 per share of common stock
Total amount of payout: ¥5,115,097,856
Since the Company previously paid out ¥10.0 per share as an interim-period dividend,
the total dividend for the fiscal year under review will amount to ¥21.0 per share, which
is a dividend increase of ¥1.0.
(3) Effective date of dividend payment
March 29, 2010
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:¥20,000,000,000(2) Surplus account showing a decrease, and the amount of such decrease
Retained earnings carried forward:¥20,000,000,000

78

Item 2: Election of fourteen (14) Directors
At the conclusion of this Annual Shareholders’ Meeting, the terms of office of all the Directors
will expire. The Company therefore asks the shareholders to elect fourteen (14) Directors.
The candidates for the position of Director are as follows:

CandidatenumberName(Date of birth)

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

Apr. 1965

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

48,000---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 Executive Officer, Senior
General Manager of Kyushu
Regional Headquarters
Oct. 2000

1

Hitoshi Ogita(January 1,
1942)

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

Mar. 2002 Senior Managing Executive Officer,
Senior General Manager ofKanshin-etsu Regional
Headquarters
Sep. 2002

Executive 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.
(to the present)

79

Candidate
numberName(Date of birth)

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

Apr. 1969

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

28,500---Entered Asahi Breweries, Ltd.

Mar. 2000 Executive Officer, Senior General
Manager of Chubu Regional
Headquarters
Sep. 2001

2

Executive Officer, Senior General
Manager of Liquor Sales &Marketing Headquarters

Masatoshi
Takahashi

Mar. 2002 Managing Executive Officer, Senior
General Manager of Liquor Sales &Marketing Headquarters(October 24,

Sep. 2003

1946)

Managing Executive Officer, Senior
General Manager of Kinkiken
Regional Headquarters

Mar. 2005 Senior Managing Executive Officer,
Senior General Manager of Kinkiken
Regional Headquarters
Mar. 2006 Senior Managing Director, Senior
Managing Executive Officer(to the present)<Important concurrent positions >Outside Director of Orion Breweries, Ltd.

80

Candidate
number3

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

Executive Officer, Senior General
Manager of Group Management
Strategy Headquarters

Oct. 2000

Executive Officer, Senior General
Manager of Strategy Planning
Headquarters

Sep. 2001

Executive Officer, Deputy General
Manager of Shutoken Regional
Headquarters, General Manager ofTokyo BranchMar. 2003

Director

Mar. 2004

Managing Director

Mar. 2006

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

Mar. 2009

Senior Managing Director, Senior
Managing Executive Officer(to the present)<Important concurrent positions>
Director of Asahi Food & Healthcare Co.,Ltd.
Director of Wakodo Co., Ltd.
Director of Amano Jitsugyo Co., Ltd.
Director of Tingyi-Asahi-Itochu Beverages
Holding Co., Ltd.
Director of Haitai Beverage Co., Ltd.

81

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

30,300---Candidate
numberName(Date of birth)

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

Apr. 1972

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

14,200

---

8,800

---

Entered Asahi Breweries, Ltd.

Mar. 2000 Executive Officer, Senior General
Manager of Quality Development
Headquarters

4

Kazuo
Motoyama(March 14,
1950)

Sep. 2001

Executive Officer, Senior General
Manager of SCM Headquarters

Sep. 2002

Executive Officer

Sep. 2003

Executive Officer, Senior General
Manager of Strategy Planning
Headquarters

Oct. 2005

Executive Officer

Mar. 2006 Director, Executive Officer
Mar. 2007 Managing Director, Managing
Executive Officer
Mar. 2009 Senior Managing Director, Senior
Managing Executive Officer(to the present)<Important concurrent positions >Director of Asahi Soft Drinks Co., Ltd.
Director of Asahi Logistics, Ltd.
Director of Schweppes Australia Pty Limited
Apr. 1975

Entered Asahi Breweries, Ltd.

Sep. 2001

Executive Officer

Mar. 2003 Managing Director, Senior General
Manager, Planning Division of Asahi
Soft Drinks Co., Ltd.
Akiyoshi Koji
5

(November 8,
1951)

Mar. 2006 Senior Managing Director, Senior
General Manager, Planning Divisionof Asahi Soft Drinks Co., Ltd.
Mar. 2007 Managing Director, Managing
Executive Officer of Asahi Breweries,
Ltd.
(to the present)<Important concurrent positions >Supervisor of Tsingtao Brewery Co., Ltd.

82

Candidate
numberName(Date of birth)

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

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

8,200

---

11,300---

Apr. 1974 Entered Asahi Breweries, Ltd.
Mar. 2006 Executive Officer, Senior Deputy
General Manager of Production
Headquarters

6

Noriyuki
Karasawa(October 20,
1951)

Mar. 2008 Director, Executive Officer, Senior
General Manager of Production
Headquarters
Mar. 2009 Managing Director, Managing
Executive Officer, Senior General
Manager of Production Headquarters(to the present)<Important concurrent positions>
Director of The Nikka Whisky Distilling Co.,Ltd.
Director of LB Co., Ltd. (Tokyo)
Director of LB Co., Ltd. (Nagoya)
Apr. 1978 Entered Asahi Breweries, Ltd.
Mar. 2006 Executive Officer, Senior Deputy
General Manager of Liquor Sales &Marketing Headquarters, General
Manager of Sales Department

7

Toshihiko
Nagao(July 21, 1954)

Sep. 2006 Executive Officer, Senior Deputy
General Manager of Liquor Sales &Marketing Headquarters, General
Manager of Beer Category
Department
Sep. 2008 Executive Officer, Senior General
Manager of Sales Headquarters
Mar. 2009 Director, Executive Officer, Senior
General Manager of Liquor Sales &Marketing Headquarters(to the present)83Candidate
numberName(Date of birth)

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

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

44,000---

Apr. 1952 Entered Asahi Chemical Industry
Co., Ltd.
Jun. 1976

Director

Nov. 1978 Managing Director
Jun. 1981

Executive Vice President andRepresentative Director

Mar. 1982 Director of Asahi Breweries, Ltd.
(to the present)

8

Nobuo
Yamaguchi(December 23,
1924)

Apr. 1992 Chairman of the Board andRepresentative Director of Asahi
Chemical Industry Co., Ltd. (current
Asahi Kasei Corporation)(to the present)<Important concurrent positions>
Chairman of the Board and Representative
Director of Asahi Kasei Corporation
Outside Director of Nippon Television
Network Corp.
Outside Director of The Shoko Chukin Bank,Ltd.
Outside Corporate Auditor of The Yomiuri
Shimbun Holdings84Candidate
numberName(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

Councillor of Cabinet Secretariat

Jul. 1994

Director of Gender Equality Office,Prime Minister’s Office

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

---

---

---

---

Apr. 1995 Vice-Governor of Saitama Prefecture

9Jun. 1998

Consul General of Brisbane, Australia

Jan. 2001

Director General of Gender Equity
Bureau, Cabinet Office

Oct. 2003

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

Mariko Bando

Apr. 2007 President of Showa Women’s
University(August 17, 1946)(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 Co.
Jan. 1971

Senior Fellow of Kokumin Keizai
Research InstituteApr. 1997 President of the 21st Century Public
Policy InstituteNaoki Tanaka
10(September 1,
1945)

Apr. 2007 President of Center for International
Public Policy Studies(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 Financial System Council,
Financial Services Agency
Member and Deputy Chairman of Fiscal
System Council, Ministry of Finance85

(New candidates are marked with (*))
CandidatenumberName(Date of birth)

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

Apr. 1975

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

8,100

---

Entered Asahi Breweries, Ltd.

Senior Officer, General Manager ofBrewing Research & Development
Laboratory
Nov. 2004 Senior Officer, Senior General
Manager of Product & Technology
Development Headquarters, General
Manager of Brewing Research &Development Laboratory
Mar 2002

11

Katsuyuki
Kawatsura *(October 1,
1950)

Mar. 2005

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

Oct. 2007

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

Jul. 2008

Executive Officer, Senior General
Manager of Research &Development Headquarters

Mar. 2009Managing Executive Officer, Senior
General Manager of Research &Development Headquarters(to the present)86

(New candidates are marked with (*))
CandidatenumberName(Date of birth)

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

Apr. 1975

Entered Asahi Breweries, Ltd.

Mar. 2003

Senior Officer, General Manager ofResearch & Development Planning
Department
Senior Officer of Asahi Breweries,
Ltd., Director of Asahi Food &Healthcare Co., Ltd.

Mar. 2004

Sep. 200612

Toshio Mori *(January 21,
1952)

Mar. 2007

Executive Officer, Senior General
Manager of Research &Development Headquarters for
Food & HealthOct. 2007

Executive Officer, Senior General
Manager of Research &Development Headquarters for
Food & Health of Asahi Breweries,
Ltd., Senior Deputy General
Manager of Development
Headquarters of Wakodo Co., Ltd.
(to the present)Entered Asahi Breweries, Ltd.

Apr. 1978
Apr. 2005
Sep. 200713

Toshio Kodato *(September 20,
1954)

Senior Officer, Senior Deputy
General Manager of Research &Development Headquarters, General
Manager of Development
Laboratory for New Business of
Asahi Breweries, Ltd.

Mar. 2008

Sep. 2009

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

6,900

---

5,600

---

Senior Officer, Manager of Public
Relations Department
Senior Officer, Senior General
Manager of Shikoku Regional
Headquarters
Executive Officer, Senior General
Manager of Shikoku Regional
Headquarters
Executive Officer, Senior Deputy
General Manager of International
Headquarters(to the present)<Important concurrent positions>
Director of Asahi Beer U.S.A., Inc.

87

(New candidates are marked with (*))
CandidatenumberName(Date of birth)

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

Apr. 1975

Entered Asahi Breweries, Ltd.

Mar. 2002

Senior Officer, General Manager of
Okayama Branch
Senior Officer, General Manager of
Chiba Branch
Senior Officer of Asahi Breweries,
Ltd., President and Representative
Director of LB Co., Ltd. (Tokyo)(to the present)

Sep. 2002
14

Yoshihiro
Tonozuka *(June 5, 1951)

Oct. 2005

Number ofshares in the
Company
owned bythe candidate

Specialinterests intheCompany

1,800

See
Note 1<Important concurrent positions>
President and Representative Director of LB
Co., Ltd. (Tokyo)
Notes:
1. Candidates’ special interests in the Company:
The Company has made loans for working capital and capital investment to LB Co., Ltd. (Tokyo),
where Yoshihiro Tonozuka serves as president and representative director.
2. Nobuo Yamaguchi, Mariko Bando and Naoki Tanaka 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. Nobuo Yamaguchi 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 hiselection to the Board as an Outside Director.
B. In addition to her diverse experience in public administration, Mariko Bando has a wide range
of knowledge as an educator. To provide the Company with the benefit of this experience andknowledge, 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, the Board has concluded that she will be able to perform her duties as Outside
Director of the Company based on the reasons noted above.
C. Naoki Tanaka has a great deal of experience as a member of government councils and broad
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 of this experience andknowledge to the management of the Company.
(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 to prevent
such inappropriate actions, or responses taken by the candidates to deal with such actions after
their occurrence
A. Nobuo Yamaguchi serves concurrently as an outside director of the Nippon Television Network
Corporation (“NTV”), which made an erroneous broadcast based on false information in its
Shinso Hodo Bankisha ! (Beat Reporter) program in November 2008. As a result, NTV issued
an apology to the persons involved and broadcast a correction as per the Broadcast Law inMarch 2009. In addition, based on a recommendation from the BPO Committee for theInvestigation of Broadcasting Ethics made in July 2009, NTV broadcast special features andprograms investigating the erroneous program in August 2009, and published the final report ofits internal investigation on its Internet site. Mr. Yamaguchi was not involved in this incident,
and after the incident was uncovered he carried out his duties by offering proposals designed toprevent a similar reoccurrence.
88

B. Asahi Mutual Life Insurance Co., 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 (from fiscal 2001 to fiscal
2005), through which it was revealed that there had been failures in adequate payments of
insurance claims. Although Ms. Bando was not involved in the cases in question, she has
fulfilled her responsibilities by speaking out in favor of measures to prevent a recurrence ofsimilar problems.
(3) Number of years of service as Outside Director
A. At the conclusion of this Annual Shareholders’ Meeting, Nobuo Yamaguchi will have served as
an Outside Director for 28 years.
B. At the conclusion of this Annual Shareholders’ Meeting, Mariko Bando will have served as an
Outside Director for 2 years.
C. At the conclusion of this Annual Shareholders’ Meeting, Naoki Tanaka will have served as an
Outside Director for 1 year.
(4) Regarding agreements limiting the liability of Outside Directors
To enable him/her to contribute fully in his/her role as Outside Director, the Company has enteredinto agreements with Nobuo Yamaguchi, Mariko Bando and Naoki Tanaka that limits his/her
liability for damages as prescribed in Paragraph 1, Article 423 of the Companies Act. Under theterms of these agreements, Mr. Yamaguchi’s, Ms. Bando’s and Mr. Tanaka’s respective liabilities
are limited to ¥20 million or to the minimum limited amount stipulated by applicable laws andregulations, whichever is higher. If this agenda item is approved as submitted, the current
agreements with Mr. Yamaguchi, Ms. Bando and Mr. Tanaka will be extended.

89

Item 3:

Renewal of the Plan against Large-Scale Purchases of the Shares in the
Company

Asahi Breweries, Ltd. (hereinafter referred to as “Asahi Breweries” or the “Company”) at a
meeting of its Board of Directors held on February 6, 2007, resolved to introduce a defensive
plan against a large-scale purchase of shares in the Company (a framework of takeover defense
measures; hereinafter referred to as the “Former Plan”), and obtained approval at the 83rd
Annual Shareholders’ Meeting of the Company held on March 27, 2007. The effective period of
the Former Plan is until the conclusion of the Company’s 86th Annual Shareholders’ Meetingscheduled for March 26, 2010 (hereinafter referred to as the “Annual Shareholders' Meeting”).
Prior to the expiration of the effective period of the Former Plan, the Company has decided, at a
meeting of the Board of Directors held February 8, 2010, to renew the Former Plan throughpartial amendment to the content thereof (hereinafter the plan after the amendment shall bereferred to as the “Plan”). The Plan will represent the Company's efforts to prevent decisions on
the Company’s financial and business policy from being controlled by any person who isinappropriate according to the basic policy concerning the persons who control the decisions on
the Company’s financial and business policy (such basic policy is as prescribed in the mainclause of Item 3, Article 118 of the Ordinance for Enforcement of the Companies Act; such
efforts are prescribed in Item 3(b)(2), Article 118 of said Ordinance). We therefore ask that thePlan be approved.
1. Reasons for Proposal
Basic Policy Concerning the Persons Who Control Decisions on the Company's Financial
and Business 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 the source of the corporate value of the Company’s group(hereinafter referred to as the “Asahi Breweries Group” or the “Group”), and other tangible andintangible management resources thereof, potential effects of forward-looking measures and otheritems that constitute the Group's corporate value, and must enable to maintain and enhance theGroup's corporate value as well as the common interests of shareholders continuously andsustainably.
The Asahi Breweries Group, as its corporate philosophy, aims to “satisfy its customers with thehighest levels of quality and integrity, while contributing to the promotion of healthy living andenrichment of the society worldwide.” The Group has positioned the alcoholic beverage businessthat mainly handles beer, the soft drink business, and the food business as its core operations andis conducting business activities accordingly.
Based on the corporate philosophy mentioned above, the Group has been striving to achieve
growth for the whole of the Group and enhance its corporate value under initiatives to “create
appealing products” in anticipation of customer needs, to “care about quality andcraftsmanship,” as exemplified by efforts to maintain the freshness of beer through thecollaboration of all of the Group's business divisions including production, distribution and sales
90divisions, and to “convey the sense of joy to customers” through its products and services.
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 fromthe Board of Directors (hereinafter referred to as the “Board”) provided that such takeover isintended to contribute to the enhancement of the Company'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 leadto a transfer of control of the Company should be made based on the will of the shareholders asa whole.
It shall be noted, however, that there are not a few cases of large-scale share purchases thatwould not contribute to the enhancement of the corporate value and the common interests ofshareholders of a company, including ones that would, in light of their purposes, cause obvious
damage to the corporate value and the common interests of shareholders or could effectively
coerce shareholders to sell their shares, ones that the purchaser does not provide information
and/or time reasonably necessary for the target company’s board of directors 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 those initially proposed by the purchaser.
The person who intends to conduct a large-scale purchase of shares in the Company must havean understanding of the source of the Group's corporate value and have the capability tomaintain and enhance it in the medium and long term; otherwise, the Group'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 is vital to have inplace a framework for preventing large-scale share purchases that would undermine the Group's
corporate value and the common interests of shareholders.
2. Details of Proposal(1) Outline of the Plan(a) Establishment of Procedures Concerning Exercise of the Plan
The Plan, with a view to maintaining and enhancing Asahi Breweries' corporate value and thecommon interests of shareholders, lays down procedures for measures to be taken in the eventthat Asahi Breweries becomes a target of a large-scale purchase of shares (“shares”is defined in(a) 1) of (2) Procedures concerning Exercise of the Plan below) or a similar move or a
proposal thereof (hereinafter collectively referred to as the “Purchase” or the “Purchases”). Suchmeasures include requiring a person conducting the Purchase (hereinafter referred to as the“Purchaser”) to provide necessary and sufficient information in advance, securing timenecessary for gathering and examining information concerning the Purchase, and presenting analternative proposal to shareholders of the Company or conducting negotiations with thePurchaser.

91

(b) Gratis Allotment of the Stock Acquisition Rights
In the case where a Purchaser has conducted a Purchase without observing and following theprocedures set forth in the Plan and where the Purchase is recognized to bring the risk ofundermining the corporate value and the common interests of shareholders (for detailed
conditions, refer to (3) “Conditions for Gratis Allotment of the Stock Acquisition Rights”
below), the Company may allot gratis to all shareholders at the time of exercise thereof stockacquisition rights with an exercise condition that the Purchaser shall not be entitled to exercise
those rights and with a provision to the effect that the Company may acquire the rights fromshareholders other than the Purchaser in exchange for shares in the Company (hereinafterreferred to as the “Stock Acquisition Rights”) (Key details thereof are explained in (4) “Outlineof Gratis Allotment of the Stock Acquisition Rights” below) under the method of gratis
allotment of stock acquisition rights (as specified in Article 277 and its following articles of theCompanies Act).
(c) Utilization of the Independent Committee to Prevent Arbitrary Decisions by the Board
With regard to decisions as to whether to exercise the gratis allotment of the Stock Acquisition
Rights and whether to acquire the allotted rights, the Plan seeks to prevent arbitrary decisions by
the Board by soliciting judgment of the Independent Committee (hereinafter referred to as the“Independent Committee” or the “Committee”) that consists of experts with a high level of
independence from the management, such as outside directors, outside corporate auditors andother experts, according to the rules concerning the Independent Committee (for its outlines,
refer to Note 1). The Plan also seeks to ensure transparency by requiring information disclosure
to shareholders at an appropriate time as determined by the Independent Committee. In addition,
in some cases specified in the Plan, the Board may convene a shareholders' meeting to confirm
the shareholders' will as to the exercise of the gratis allotment of the Stock Acquisition Rights.
The three members of the Independent Committee at the time of the renewal into the Plan will
be Outside Corporate Auditors of the Company, Mr. Naoto Nakamura and Dr. Tadashi Ishizaki,
and an outside expert, Mr. Morio Ikeda, who currently serves as Senior Advisor to Shiseido Co.,
Ltd. and Chairman of Toyo Eiwa Jogakuin. (With regard to the criteria for selecting members of
the Independent Committee, the conditions for the Committee’s judgments/decisions and theitems subject to the Committe’s decisions upon the renewal, refer to Note1).
(d) Exercise by Shareholders of the Stock Acquisition Rights and Acquisition by the Companyof the Allotted Stock Acquisition Rights
In the case where the Stock Acquisition Rights are allotted gratis in accordance with theprovisions of the Plan and shareholders other than the Purchaser exercise the Stock Acquisition
Rights, or the Company acquires the Stock Acquisition Rights in exchange for the shares in the
Company allotted to shareholders other than the Purchaser, the ratio of the voting rights held by
the Purchaser may be diluted by approximately 50%.

92

(2) Procedures concerning Exercise of the Plan(a) Scope of Purchases subject to the Exercise of the Plan
The Plan shall be applicable to any of the following two types of Purchase.
1) A purchase of shares Note2 in the Company as a result of which the holder’s (shareholder’sNote3) holding ratio Note4 will rise to 20% or more of the total outstanding shares in the
Company; and
2) A tender offer Note6 for shares Note5 in the Company as a result of which the purchaser’s
shareholding ratio Note7 targeted by the tender offer and the holding ratio of “persons in
special relationship” Note8, when combined, will be 20% or more of the total outstanding
shares in the Company.
(b) Submission of Statement of Intent
A Purchaser shall, prior to the commencement or implementation of the Purchase, submit to theCompany a statement of intent prepared in the form prescribed by the Company, which includes
a pledge to observe and follow the procedures set forth in the Plan in conducting the Purchase(bearing the signature or the name and seal of the representative of the Purchaser) and aqualification certificate of the representative who has signed or sealed said written pledge(hereinafter referred to as “Statement of Intent”). The Statement of Intent should clearly indicate,in the case of an individual, the Purchaser's name and address, or in the case of a corporation,
the Purchaser's name and the location of its head office or other office, the applicable law for its
incorporation and the name of its representative and his/her contact point in Japan, as well as theoutline of the Purchase planned. The Statement of Intent and the Purchase Prospectus set forthin (c) below must be written in Japanese.
(c) Request to a Purchaser for Information Provision
Within 10 business days from receiving the Statement of Intent from a Purchaser, the Company
provides the Purchaser with a form of the Purchase Prospectus (defined below) (with a list ofitems of information that the Purchaser is requested to provide to the Company). The Purchaser,
except when the Purchase is deemed by the Board to be a friendly offer, shall be requested toprovide the Company with a document containing the information described below (hereinafterreferred to as the “Required Information”; this document shall be referred to as the “Purchase
Prospectus”) in the form prescribed by the Company. The Company will inform the Board andthe Independent Committee of the content of the Purchase Prospectus immediately after
receiving the Purchase Prospectus.
The Board, if it determines that the information provided by the Purchaser fails to meet thecriteria for the Required Information, may ask the Purchaser to provide additional information
by a deadline date reasonably designated by the Board.
The Independent Committee, if it determines that the information provided by the Purchaser
fails to meet the criteria for the Required Information, may directly or indirectly ask the
Purchaser to provide additional information by a deadline date reasonably designated by theCommittee. In such a case, the Purchaser shall be required to provide such additional
information by the said deadline date.
93

Required Information
1) Details (including specific names, the capital composition and the financial status, etc.) of thePurchaser and its group (including joint holdersNote9, persons in special relations and, in thecase where the Purchaser is an investment fund, its partners and other members);
2) The purpose, method and other details of the Purchase (including the amount and type of
consideration for the Purchase, timeframe of the Purchase, structure of related transactions,the legality of the Purchase method and the feasibility the Purchase and related transactions,etc.);
3) The basis for the calculation of the proposed Purchase price (assumptions for the calculation,
the calculation method, numerical information used in the calculation and the contents of thesynergy effects expected to be created as a result of transactions related to the Purchase) anddetails of the source of the funds for the Purchase (including the names of providers of thefunds, inclusive of substantive providers, the fund-raising method and related transactions);
4) The profiles of persons whom the Purchaser plans to appoint for management posts(including information concerning such persons’ experiences in the same or similar types ofbusinesses as those in which the Company or the Group is engaged), and the management
policy, business plan, finance plan, capital policy, dividend policy and asset utilization
policy to be adopted, after joining the management of the Company and the Group;5) Whether or not the Purchaser has any plans to change the relations of the Group with theirstakeholders such as suppliers, customers and employees after the completion of thePurchase. If the Purchase has such plans, the details thereof should be provided;6) Specific measures for avoiding potential conflicts of interest with other shareholders of theCompany; and7) Other information reasonably determined as necessary by the Independent Committee.
Once the Independent Committee has determined that the Purchaser has commenced thePurchase without observing and following the procedures set forth in the Plan, the Committee
shall in principle recommend the Board to allot gratis the Stock Acquisition Rights as specified
in (e) 1) below, except when there are special grounds for continuing to ask the Purchaser toprovide the Purchase Prospectus and the Required Information and conducting negotiations andconsultations with the Purchaser.
(d) Examination of Details of the Purchase, Negotiations with the Purchaser and Review of
Alternative Proposals
1) Request to the Board for Information Provision
If the Purchaser has provided the Purchase Prospectus and the Required Information, theIndependent Committee may ask the Board to express its opinion with regard to the details of
the Purchase (including an opinion to the effect that the Board reserves its judgment, as the casemay be. The same shall apply hereinafter) and to provide to the Committee documents and othermaterials used as a basis for such an opinion, alternative proposals and other information
determined as required by the Committee within a reasonable period prescribed by the94Committee (based on the Group’s business scale, nature and diversity of the business andshareholders composition, within 60 days at maximum in principle), for the purpose of
conducting a comparative analysis, review and examination of the Purchase Prospectus and theRequired Information provided by the Purchaser and the business plan and the corporate
assessment provided by the Board from the viewpoint of enhancing the corporate value and thecommon interests of shareholders.
2) Examination by the Independent Committee
The Independent Committee shall examine the details of the Purchase, gather information
concerning the business plans provided by the Purchaser and those provided by the Board,
conduct a comparative analysis, review and examination of those plans and examine analternative proposal made by the Board within 30 days in principle; provided, however, that theCommittee may extend the period in the case of (e) 3) below (hereinafter referred to as the“Independent Committee Review Period”) after receiving information from the Purchaser andfrom the Board (in the case where the Committee has asked the Board to provide information as
specified above). Also, the Independent Committee shall conduct negotiations and consultations
with the Purchaser directly or indirectly if necessary in order to seek better purchase terms fromthe viewpoint of maintaining and enhancing the corporate value and the common interests ofshareholders, or present an alternative plan made by the Board to shareholders.
In order to ensure that decisions by the Independent Committee will contribute to theenhancement of the Company’s corporate value and shareholders' common interests, theCommittee may seek advice from independent third parties (including financial advisors,certified public accountants, lawyers, consultants and other experts) at the expense of theCompany.
The Purchaser, when asked directly or indirectly by the Independent Committee to provide
materials necessary for reviewing the Purchase and other information and to enter into
negotiations and consultations with the Independent Committee, shall promptly respondaccordingly.
(e) Procedures of Recommendations to be taken by the Independent Committee
The Independent Committee shall make recommendations to the Board in accordance with theprocedures specified below when a Purchaser appears.
1) Recommendation of the Independent Committee to Exercise the Plan:
In the case where the Purchaser has not observed and followed the procedures specified in thePlan, and in other cases where the Purchase is deemed to meet either of the conditions set forthin (3) “Conditions for Gratis Allotment of the Stock Acquisition Rights” below as a result of areview of the details of the Purchase by the Committee, leading the Committee to determine that
it is appropriate to allot gratis the Stock Acquisition Rights, the Committee shall recommend theBoard to allot gratis the Stock Acquisition Rights even before the commencement or thematurity of the Independent Committee Review Period. If a question arises as to whether aPurchase falls under Ground No. 2 for Exercise of the Plan among the grounds for exercise of
the Plan specified in (3) “Conditions for Gratis Allotment of the Stock Acquisition Rights”
95

(hereinafter referred to as “Ground No. 2”), the Independent Committee may attach an opinion
to its recommendation, to the effect that approval for the allotment should be obtained inadvance at a shareholders' meeting to confirm the shareholders' will, as provided for in (g)below.
Notwithstanding the above, even after having recommended the Board to allot gratis the Stock
Acquisition Rights but before the start date of the exercise period (as defined in (f) of (4)“Outline of Gratis Allotment of the Stock Acquisition Rights”) for the Stock Acquisition Rights,
the Independent Committee may make a new recommendation to the effect that the allotment
shall be cancelled (in the case where the gratis allotment has not yet taken effect) or to the effectthat the Company acquires the Stock Acquisition Rights gratis (in the case where the gratis
allotment has already taken effect), if the Committee determines that any of the following cases
applies.
(i) When the Purchase has ceased to exist as a result of its cancellation by the Purchaser or for
any other reason after the recommendation is made; or(ii) When there has been a change in the grounds upon which the said recommendations werebased, leading to the situation where the Purchase does not meet either of the conditions set
forth in (3) “Conditions for Gratis Allotment of the Stock Acquisition Rights” below, or where,
even if the Purchase meets the said conditions, it is determined that it is not appropriate to allot
gratis the Stock Acquisition Rights or allow shareholders to exercise the Stock Acquisition
Rights, as the case may be.
2) Recommendation of the Independent Committee Not to Exercise the Plan
The Independent Committee shall recommend non-exercise of the Plan to the Board regardlessof whether during or after the Independent Committee Review Period if the Committee
determines, as a result of analysis, review and examination of the details of the Purchase andnegotiations and consultations with the Purchaser, that the Purchase does not meet any of theconditions set forth in (3) “Conditions for Gratis Allotment of the Stock Acquisition Rights”
below or that even if the Purchase meets the conditions, it is not appropriate to exercise thegratis allotment of the Stock Acquisition Rights.
Notwithstanding the above, the Committee, even after once having recommended the Board
non-exercise of the gratis allotment of the Stock Acquisition Rights, may make a new decision
concerning matters including the recommendation of exercise of the gratis allotment of theStock Acquisition Rights and present its recommendation to the Board in the case where there
has been a change in the grounds upon which the recommendation of non-exercise was based,leading to the situation where the Purchase meets any of the conditions set forth in (3)“Conditions for Gratis Allotment of Stock Acquisition Rights” below.
3) Extension of the Independent Committee Review Period
In the case where the Independent Committee fails to recommend exercise or non-exercise of
the gratis Allotment of the Stock Acquisition Rights before the Independent Committee Review
Period elapses, the Committee shall make a decision to the effect that the Independent
Committee Review Period be extended within reasonable limits necessary to review the detailsof the Purchase (within 30 days at the maximum in principle) and conduct consultations and96

negotiations with the Purchaser and review an alternative proposal made by the Board (the sameprocedure shall be applied to any further extension of the Independent Committee Review
Period, if any).
If the Independent Committee Review Period is extended based on the decision thus taken, theCommittee shall make its best efforts to gather information, conduct a review and make a
recommendation of exercise or non-exercise of the gratis allotment of the Stock Acquisition
Rights within the extended period.
(f) Resolutions by the Board
The Board shall pay its utmost respect to the recommendation made by the Independent
Committee as stated above and promptly make a resolution as a statutory body under theCompanies Act with regard to exercise or non-exercise of the gratis allotment of the Stock
Acquisition Rights. Until and unless the Board makes a resolution on non-exercise of the Plan,the Purchaser shall be prohibited from conducting the Purchase.
If a shareholders' meeting is held to confirm the shareholders' will as provided for in (g) below,
the Board shall make a resolution as a statutory body under the Companies Act with regard to
exercise or non-exercise of the gratis allotment of the Stock Acquisition Rights, in line with theresolution of the said shareholders' meeting.
(g) Shareholders' meeting to confirm the shareholders' willNotwithstanding the provision in (f) above, the Board may, before exercising the gratis
allotment of the Stock Acquisition Rights according to the Plan, convene a shareholders'meeting to confirm the shareholders' will (equivalent to a shareholders' meeting governed by theCompanies Act and the Company's articles of incorporation; the same shall apply hereinafter),in the following cases: (I) where the Independent Committee has attached an opinion to its
recommendation, to the effect that approval for the gratis allotment of the Stock Acquisition
Rights should be obtained at a shareholders' meeting to confirm the shareholders' will, as
provided for in (e) 1) above, or (II) where a question arises as to whether a Purchase falls under
Ground No. 2, and the Board considers it appropriate to confirm the shareholders' will in orderto fulfill its duty of care, while taking into consideration the time required for holding suchmeeting.
(h) Information disclosure
In the course of implementing the Plan, the Company will, in accordance with the applicablelaws and regulations or rules of financial instruments exchanges, disclose information to the
public in a timely manner, with regard to the progress in the respective procedures specified in
the Plan (including the submission of the Statement of Intent or Purchase Prospectus, thecommencement of the Independent Committee Review Period, and the extension of the
Independent Committee Review Period), or the details of the recommendation of the
Independent Committee, the details of the resolution of the Board, the details of the resolutionof the shareholders' meeting to confirm the shareholders' will, and other matters determined as
appropriate by the Independent Committee or the Board.
97

(3) Conditions for Gratis Allotment of the Stock Acquisition Rights
In the case where the Purchaser’s activities meet either of the cases specified below and where it
is deemed appropriate to allot gratis the Stock Acquisition Rights, the Company will allot gratis
the Stock Acquisition Rights. As specified in (e) of (2) “Procedures concerning Exercise of thePlan” above, the judgment with regard to whether the cases stated below apply and whether it isappropriate to exercise the gratis allotment of the Stock Acquisition Rights shall always be
made after a judgment by the Independent Committee:<Ground No. 1 for Exercise of the Plan>
The Purchaser does not observe and follow the procedures specified in the Plan, and it isappropriate to exercise the gratis allotment of the Stock Acquisition Rights;<Ground No.2 for Exercise of the Plan>
The Purchaser falls under any of the cases specified below, and it is appropriate to exercise thegratis allotment of the Stock Acquisition Rights:(a) In the case where the Purchaser could cause obvious damage to the Company’s corporate
value and the common interests of shareholders by engaging in the activities listed below:
1) Buying up a large amount of shares in the Company and demanding that the Company buy
them back for an unduly high amount of consideration;2) Controlling the management of the Company temporarily to acquire the Company’s
important assets at unfairly low prices from the Company or acting in other ways that would
bring profits to the Purchaser at the sacrifice of the Company;
3) Using the Company’s assets as collateral of debts owed by the Purchaser or its groupcompanies or as the source of funding for repayments of the same; or4) Controlling the management of the Company temporarily to make it dispose of high-value
assets not related to the Company’s current business operations, with a view to making theCompany use the profits thus obtained for paying inflated dividends or with a view toselling the shares purchased at an inflated price resulting from the payment of such inflated
dividends.
(b) In the case where the Purchaser uses a coercive two-tier purchase method (a takeover offer,such as a tender offer in which the Purchaser makes only a partial acquisition offer, insteadof an offer for all outstanding shares, in the first stage, and sets less favorable terms orleaves details of the second stage unclear at the time of the first stage, as a way to prompt
shareholders to sell off their shares early) and other means that could in effect coerce
shareholders to sell their shares; or(c) In the case where the terms of the Purchase (including the amount and the type of theconsideration for the Purchase, the timeframe of the Purchase, the legality of the Purchasemethod and the feasibility of the Purchase and related transactions, the management policy
and business plan to be adopted after the completion of the Purchase and the policy
98concerning the treatment after the Purchase of stakeholders including shareholders,
employees and suppliers) are substantially unfair or inappropriate in light of the fundamental
value of the Company.
(4) Outline of Gratis Allotment of the Stock Acquisition Rights
The outline of the gratis allotment of the Stock Acquisition Rights under the Plan is described
below.
(a) Number of Stock Acquisition Rights to Be Allotted
The number of the Stock Acquisition Rights to be allotted gratis under the Plan shall be thesame as the total number of the Company’s shares outstanding (excluding the number of sharesin the Company held by the Company at that time) on the date that shall be separately set(hereinafter referred to as the “Allotment Date”) in a Board resolution concerning the gratis
allotment of the Stock Acquisition Rights (hereinafter referred to as the “Resolution on Rights
Allotment”).
(b) Shareholders Entitled to be Allotted Stock Acquisition Rights
Shareholders whose names are recorded in the most recent registry of shareholders of theCompany excluding the Company as of the Allotment Date shall be allotted gratis one (1) Stock
Acquisition Right for each share in the Company held by them.
(c) Effective Date of Gratis Allotment of the Stock Acquisition Rights
The effective date of the gratis allotment of the Stock Acquisition Rights shall be separately set
in the Resolution on Rights Allotment.
(d) Number of Shares to Be Allotted for Each Stock Acquisition Right
The total number of shares to be allotted for the Stock Acquisition Rights shall be limited to thenumber of shares calculated by deducting the total number of the Company's outstanding shares(excluding the number of shares in the Company held by the Company at that time) from thetotal number of its authorized shares, as of the day specified by the Board as the record date.
The number of shares Note10 in the Company to be allotted for each Stock Acquisition Right(hereinafter referred to as the “Applicable Number”) shall be the number separately determinedby the Board in the Resolution on Rights Allotment, not exceeding one (1). If the shares to beissued to a right holder upon the exercise of the Stock Acquisition Right contains any fraction
less than one (1) share, such fraction shall be treated in accordance with the applicable laws andregulations.
(e) Value of Assets to Be Paid In upon Exercise of the Stock Acquisition Rights
The contributions upon the exercise of the Stock Acquisition Rights shall be in monetarycurrency, and the per-share price shall be separately determined in the Resolution on Rights
Allotment within the range of a minimum of one yen (¥1) and a maximum of the amountequivalent to one half of the fair market value of one share in the Company.

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(f) Exercise Period for the Stock Acquisition Rights
The exercise period for the Stock Acquisition Rights shall be separately determined in the
Resolution on Rights Allotment within a range of one (1) to six (6) months in principlecommencing on a date separately determined in the Resolution on Rights Allotment (hereinafterreferred to as the “Start Date of the Exercise Period”). Notwithstanding the above, in the eventthat the Company acquires the Stock Acquisition Rights allotted in accordance with theprovisions of (i) below, the exercise period for the Stock Acquisition Rights shall expire on theprevious day of the date of such acquisition. In the case where the last day of the exercise period
falls on a non-business day for the financial institutions that accept the payment for the exerciseof the Stock Acquisition Rights, the last business day before that date shall be the last day of theexercise period.
(g) Conditions for Exercise of the Stock Acquisition Rights
A person who fits any of the following descriptions shall not in principle be entitled to exercise
the Stock Acquisition Rights:(I) a Specified Large-Scale Shareholder;Note11(II) a Joint Holder of a Specified Large-Scale Shareholder;(III) a Specified Large-Scale Purchaser; Note12(IV) a Person in Special Relationship with a Specified Large-Scale Purchaser;(V) a person to whom the Stock Acquisition Rights were transferred from a person who fits anyof the descriptions specified in (I) to (IV) above without approval from the Board; and(VI) a person who is related to a party who fits any of the descriptions specified in (I) to (V)above. Note13(A person who fits any of the descriptions specified in (I) to (VI) above shall be hereinafterreferred to as the “Ineligible Person”.)
In addition, non-residents who are required under applicable foreign laws to follow prescribed
procedures with regard to the exercise of the Stock Acquisitions Rights shall not in principle beeligible to exercise the Stock Acquisition Rights. (However, certain persons including those
who are eligible for exemption from the said applicable laws concerned shall be eligible toexercise the Stock Acquisition Rights, and the Stock Acquisition Rights held by non-residents
may be acquired by the Company in exchange for shares in the Company as specified in (i)below.)(h) Restriction on Transfer of the Stock Acquisition Rights
Any acquisition of the Stock Acquisition Rights by transfer shall be subject to approval by the
Board.
(i) Acquisition of the Stock Acquisition Rights by the Company
1) The Company may acquire all the Stock Acquisition Rights gratis at any time until theprevious day of the Start Date of the Exercise Period, upon a date to be separately
100determined by the Board, in the case where the Board determines it is appropriate to acquire
the Stock Acquisition Rights.
2) Upon a date to be separately determined by the Board, the Company may acquire all of those
Stock Acquisition Rights that are held by persons other than Ineligible Persons and thatremain unexercised as of the previous day of the said designated date and allot them sharesin the Company in exchange, with an exchange ratio of the Applicable Number of shares toeach Stock Acquisition Right.
When the Board determines that there are persons other than Ineligible Persons who still
hold the Stock Acquisition Rights after the Company’s acquisition of the Stock Acquisition
Rights mentioned above, the Company may, upon a date that is subsequent to the said
acquisition and that shall be separately determined by the Board, acquire all of the Stock
Acquisition Rights that are still held by those persons and that remain unexercised as of theprevious day of the said designated date and allot them shares in the Company in exchange,
with an exchange ratio of the Applicable Number of shares to each Stock Acquisition Rights.
The same arrangement shall apply thereafter.
(j) Gratis Allotment of the Stock Acquisition Rights on the Occasion of Mergers (limited to thecase where the Company becomes extinct), Absorption-Type Demergers,
Incorporation-Type Demergers, Share Exchanges or Share Transfers
Matters concerning the gratis allotment of the Stock Acquisition Rights on the above occasions
shall be separately determined by the Board in the Resolution on Rights Allotment.
(k) Non-Issuance of Certificates of the Stock Acquisition Rights
The Company will not issue Certificates of Stock Acquisition Rights.
(l) Modification of the Plan due to Changes in Laws and Regulations
The provisions of the laws and regulations cited above are those that are effective as of February
8, 2010. If any need arises thereafter for modification of the provisions and/or terms specified ineach of the above items due to the enactment of new laws and regulations or amendment to or
abolition of existing laws and regulations, the Board may revise or modify the said provisions
and terms as necessary within the reasonable limits with due consideration for the purpose of
the said enactment of, amendment to and/or abolition of relevant laws and regulations.
(5) Effective Period of the Plan and Abrogation of, Amendment to and Alteration of thePlan
The Plan shall take effect with the shareholders' approval obtained at the Annual Shareholders'Meeting, and shall be effective until the conclusion of the Company’s annual shareholders’meeting for the last year that ends within three years from the conclusion of the Annual
Shareholders’ Meeting.
Notwithstanding the above, the Company may abrogate the Plan even before the effective
period expires upon a resolution thereof by the Board.
Also, the Board may make a resolution to amend or alter the Plan during its effective period101subject to approval by the Independent Committee, in the following cases: (I) where it isappropriate to reflect in the Plan the enactment, amendment or abolition of any new or existinglaws, regulations or rules of financial instruments exchanges applicable to the Plan; (II) where it
is appropriate to correct errors or omissions of terms in the Plan; or (III) where the amendment
or alteration of the Plan will not be prejudicial to the Company's shareholders nor incompatible
with the resolution of the Annual Shareholders' Meeting.
When the Plan is thus abrogated, amended or altered, as the case may be, the Company shallpromptly disclose to the public information with regard to the background of such abrogation,
amendment or alteration, as the case may be, and, in the case of amendment or alteration, thedetails of such amendment or alteration and other necessary matters.
(6) Other Matters
Details of the Plan may be determined by the Board.
Notes:
1. Outline of the Independent Committee is as follows.
z

The Independent Committee shall be established by a resolution of the Board.

z

The Independent Committee shall consist of three or more members appointed by the
Board from among (I) the Company's outside directors, (II) its outside corporate auditors
and/or (III) experts, all of whom shall be independent from the management that is incharge of the Company’s execution of business policies. The experts shall be either
experienced company executives, professionals with expertise in investment banking,lawyers, certified public accountants, researchers majoring in the Companies Act, or
persons with similar qualifications thereto. The experts appointed shall conclude a contract,
separately prescribed by the Board, containing a duty of care clause, with the Company.

z

The term of office for the members of the Independent Committee shall be until theconclusion of the annual shareholders' meeting for the last business year that ends within
three years from their appointment. This shall not, however, apply when determinedotherwise by the Board. The term of office for the members of the Independent Committee
appointed from among the Company's outside directors and outside corporate auditors shall
expire when they cease to be outside directors and outside corporate auditors, respectively(except when they are reappointed).

z

The Independent Committee shall make decisions with regard to the following items andmake a recommendation thereof to the Board with reasons therefor attached. The Board
shall pay its utmost respect to the recommendation provided by the Independent Committee
in making its resolution as a statutory body under the Companies Act whether to exercise
the gratis allotment of the Stock Acquisition Rights (if the shareholders' meeting convened
to confirm the shareholders' will regarding the exercise of the gratis allotment of the Stock
Acquisition Rights as described in 4) below has decided otherwise, the Board shall follow
such resolution). Each of the members of the Independent Committee and the Board shallmake his/her decision with regard to these matters from the viewpoint of enhancing the102Company’s corporate value and the common interests of shareholders, and in no event forthe purpose of benefiting personal interests of his/her own or members of the Board:1)Judgment with regard to whether a purchase falls within the Purchase which is subject to
the Plan;
2) Information to be provided by a Purchaser and the Board, respectively, to the
Independent Committee and a deadline date thereof;3) Extension of the Independent Committee Review Period;4) Whether to exercise the gratis allotment of the Stock Acquisition Rights;
5) Whether or not it is necessary to convene a shareholders' meeting to confirm theshareholders' will regarding the exercise of the gratis allotment of the Stock Acquisition
Rights;6) Amendment to or alteration of the Plan; provided, however, that any alteration shall bewithin the limits reasonably deemed as necessary due to a change in laws and regulations
including the Companies Act and the Financial Instruments and Exchange Act or rules offinancial instruments exchanges, a change in interpretation and enforcement thereof, or achange in taxation or judicial precedents;
7) Cancellation of the gratis allotment of the Stock Acquisition Rights or acquisition for
free of the allotted rights; and8) Other matters which should be determined by the Board and which the Board has asked
the Independent Committee to review for its recommendation.
z

In addition to making a judgment with regard to the items listed above, the Independent
Committee may conduct the following:
1) Review and examination of the details of a Purchase;2) Negotiations and consultations with a Purchaser;
3) Requiring the Board to present an alternative proposal to the Purchase concerned andreviewing the same;4) Other matters which the Independent Committee is authorized to conduct under the Plan;and5) Matters separately determined by the Board as fit to be conducted by the Independent
Committee.

z

The Independent Committee shall in principle make its decisions by a majority vote withall the Committee members present.

2. As defined in Paragraph 1, Article 27-23 of the Financial Instruments and Exchange Act. The
same shall also apply elsewhere in this agenda item unless otherwise specified.
3. Including shareholders as defined in Paragraph 3, Article 27-23 of the Financial Instruments
and Exchange Act (also including shareholders as so recognized by the Board). The samedefinition shall also apply elsewhere in this agenda item.
103

4. As defined in Paragraph 4, Article 27-23 of the Financial Instruments and Exchange Act. The
same shall also apply elsewhere in this agenda item.
5. As defined in Paragraph 1, Article 27-2 of the Financial Instruments and Exchange Act. The
same shall also apply elsewhere in 2 (2) (a) 2) in this agenda item.
6. As defined in Paragraph 6, Article 27-2 of the Financial Instruments and Exchange Act. The
same shall also apply elsewhere in this agenda item.
7. As defined in Paragraph 8, Article 27-2 of the Financial Instruments and Exchange Act. The
same shall also apply elsewhere in this agenda item.
8. As defined in Paragraph 7, Article 27-2 of the Financial Instruments and Exchange Act(including persons in special relationship as so recognized by the Board); provided however,that with regard to persons in special relationship as defined in Item 1 of the same paragraph,those thereof that fit the definition specified in Paragraph 2, Article 3 of the Cabinet Orderconcerning the disclosure of tender offers for shares in companies by persons other than theissuer shall be excluded. The same shall also apply elsewhere in this agenda item.
9. As defined in Paragraph 5, Article 27-23 of the Financial Instruments and Exchange Act,
including those deemed “joint holders” as defined in Paragraph 6 of the same article (alsoincluding joint holders as so recognized by the Board). The same definition shall also apply
elsewhere in this agenda item.
10. If and when the Company becomes a corporation with class shares (as defined in Item 13 of
Article 2, the Companies Act) in the future, shares that fit the description in either of thefollowing two items shall be the same type of shares as the type of the Company sharesissued and outstanding as of the date of the Annual Shareholders Meeting (namely, commonshares).
1) The Company shares to be issued upon the exercise of the Stock Acquisition Rights.
2) The Company shares to be allotted in exchange for the Company’s acquisition of theStock Acquisition Rights.
11. The term “Specified Large-Scale Shareholder” means a holder of share certificates, etc.
issued by the Company, whose holding ratio of share certificates, etc. pertaining to the said
share certificates, etc. is 20% or higher (including a person deemed by the Board to be aholder).
12. The term “Specified Large-Scale Purchaser” means a purchaser who has announced apurchase, etc. (as defined in Paragraph 1, Article 27-2 of the Financial Instruments andExchange Act; hereinafter the same shall apply) of share certificates, etc (as defined in
Paragraph 1, Article 27-2 of the same Law; hereinafter the same shall apply) issued by theCompany by means of a Tender Offer and whose holding ratio of share certificates, etc.
pertaining to the share certificates, etc. after the completion of the said Purchase, etc.
(including similar cases as specified in Paragraph 1, Article 7 of the Order for Enforcementof the Financial Instruments and Exchange Act), when combined with the holding ratio ofshare certificates, etc. of the persons in special relationship thereof, is contemplated to standat 20% or higher (including a person deemed by the Board to be such a Purchaser).
104

13. The term “a person who is related to a party” means any person who substantially controls,
is controlled by or under the common control with the first-mentioned person (including aperson deemed by the Board to be such a person), or a person recognized by the Board to be
acting in concert with the said party.

105

<Reference>
Profiles of the Members of the Independent Committee
The three members of the Independent Committee at the time of the renewal into the Plan areproposed as follows:○ Mr. Naoto Nakamura
Partner, Attorney at Law
Nakamura, Tsunoda & Matsumoto Law Offices
Born on January 25th, 1960
<Profile>
October 1982

Passed bar examination

April 1985

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

April 1998

Established the Hibiya Park Law Offices (engaged as a partner)

February 2003

Established the Naoto Nakamura Law Offices (present Nakamura, Tsunoda& Matsumoto Law Offices) (engaged as a partner) (to the present)

March 2003

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

June 2006

Outside Corporate Auditor of Mitsui & Co., Ltd. (to the present)

Mr. Naoto Nakamura is an outside corporate auditor prescribed in Item 16, Article 2 of theCompanies Act.
Mr. Nakamura has no special interest in the Company.

○ Dr. Tadashi Ishizaki
Professor, Faculty of Commerce, Chuo University
Born on June 2nd, 1941
<Profile>

April 1970

Assistant, Faculty of Commerce, Chuo University

April 1972

Instructor, Faculty of Commerce, Chuo University

April 1973

Associate Professor, Faculty of Commerce, Chuo University

April 1982

Professor, Faculty of Commerce, Chuo University (to the present)

April 1986

Professor, Graduate School of Commerce, Chuo University (to the present)

March 2005

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

Dr. Tadashi Ishizaki is an outside corporate auditor prescribed in Item 16, Article 2 of theCompanies Act.
Dr. Ishizaki has no special interest in the Company.
106

○ Mr. Morio Ikeda
Senior Advisor to Shiseido Co., Ltd.
Chairman of Toyo Eiwa Jogakuin
Born on December 25th, 1936
<Profile>

April 1961

Joined Shiseido Co., Ltd.

June 1990

Director of Shiseido Co., Ltd.

June 1995

Executive Director (Jomu-Torishimariyaku) of Shiseido Co., Ltd.

June 1997

Senior Executive Director (Senmu-Torishimariyaku) of Shiseido Co.,Ltd.

June 2000

Representative Director & Vice President of Shiseido Co., Ltd.

June 2001

Representative Director, President & CEO of Shiseido Co., Ltd.

June 2005

Director & Chairman of Shiseido Co., Ltd.
Director of Komatsu Ltd. (to the present)
Chairman of Toyo Eiwa Jogakuin (to the present)

June 2006

Senior Advisor to Shiseido Co., Ltd. (to the present)
Director of Tokyo Metropolitan Television Broadcasting Corp. (to thepresent)

April 2008

Director of Isetan Mitsukoshi Holdings (to the present)

June 2008

Director of Asahi Kasei Corporation (to the present)

April 2009

President of Shiseido Beauty Academy (to the present)

Major public duties of Mr. Ikeda are as follows:
Vice Chairman of Tokyo Chamber of Commerce and Industry, Special Advisor to the Japan
Chamber of Commerce and Industry, Chairman of the Public Interest Accreditation
Commission of the Cabinet Office, and Vice-Representative of Congressional Forum for New
Japan (21 Seiki Rincho)
Mr. Ikeda has no special interest in the Company.

107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
Shareholders’ Meeting (deadline for online voting: 5:30 p.m., March 25, 2010, JST).
However, voting in advance will be highly appreciated for our convenience in vote counting.
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/mailSystem 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.
108

(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 to the online voting system. Other models are not compatible withthis system.)(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 (24 hours/day)
For other inquiries, 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.).

109