ASAHI BREWERIES, LTD. March 3, 2011

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1
ASAHI BREWERIES, LTD.
(Securities Code: 2502)
March 3, 2011
Dear Shareholders:
NOTICE OF THE 87th ANNUAL GENERAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the Annual General Meeting of Shareholders of Asahi
Breweries, Ltd. (the “Company”), which will be held as described below.
If you can attend the meeting, please submit the enclosed voting form directly at the meeting.
If you are unable to attend the meeting in person, you may exercise your voting rights via
either postal mail or Internet. Please review the attached “REFERENCE MATERIALS FOR
GENERAL MEETING OF SHAREHOLDERS,” pages 82 to108, and exercise your voting
rights no later than 5:30 p.m., Thursday, March 24, 2011 (JST).
Voting via Postal Mail
Please indicate your consent/dissent concerning the items shown on the enclosed voting form,
and return the form to us by the deadline noted above.
Voting via Internet
After accessing our voting site at , enter the voting code and password
provided on the enclosed voting form. Following the instructions on your screen, enter your
consent/dissent concerning the items to be voted on by the deadline noted above. (This site can
also be accessed on the Internet via cellular phone.)
If you exercise your voting rights via the Internet, please review “Reminder to Shareholders
Concerning Online Voting” on page 109 to 110.
* Please note that the online voting site is available only in the Japanese language.
Sincerely,
Naoki Izumiya, President and Representative Director
ASAHI BREWERIES, LTD.
23-1, Azumabashi 1-chome, Sumida-ku, Tokyo
English Translation of Original Japanese
This is a translation of the original notice in Japanese. In the event of any discrepancy, the original
notice in Japanese shall prevail.
2
1. DATE AND TIME
March 25 (Friday), 2011, at 1:00 p.m. (JST)
2. PLACE
Banquet Room “Tsuru”
Main Banquet Floor of Hotel New Otani
4-1, Kioi-cho, Chiyoda-ku, Tokyo
3. PURPOSES
Items to Be Reported:
Business Report, Consolidated Financial Statements, Non-Consolidated Financial
Statements and reports of the audit results of the consolidated financial statements by
the Independent Auditor and the Board of Corporate Auditors for the 87th term, from
January 1, 2010 to December 31, 2010.
Items to Be Resolved:
Item 1: Appropriation of surplus
Item 2: Approval of absorption-type demerger agreement
Item 3: Partial amendments to the Articles of Incorporation
Item 4: Election of eleven (11) Directors
Item 5: Election of three (3) Corporate Auditors
3
BUSINESS REPORT
From January 1 to December 31, 2010
1. Overview of Operations of Asahi Group
(1) Business Progress and Results
The Japanese economy has showed signs of improvement thanks to the effect of the
government’s economic stimulus measures and recovery in foreign economies;
nevertheless, the rapidly appreciating yen and persistently high unemployment are
evidence that full-fledged recovery is not yet assured.
In the alcoholic beverages industry, while the new-genre market grew as a result of
a deep-seated tendency among consumers to exercise thrift, the markets for beer and
happoshu (low-malt beer) both shrank. Taxable shipment volumes for all types of beer
and beer-type beverages declined by 2.8%. Outside this segment, most alcoholic
beverage categories saw further maturation of markets with growth essentially flat
overall, although the low-alcohol beverages and the market for whisky and other spirits
were buoyed by renewed popularity of the highball.
In the soft drinks industry, total sales volume rose by an estimated 3%, reflecting
such factors as the summer heat wave.
Against this backdrop, during 2010, the first year of “Medium-Term Management
Plan 2012,” Asahi Breweries, Ltd. and its consolidated subsidiaries and affiliates
(collectively, the “Asahi Group”, or “the Group”) focused its management resources on
core product across all of its businesses and sought to improve the overall profitability
of its operations through ongoing reinforcement of its cost competitiveness as part of
efforts to achieve the goals elucidated in “Long-Term Vision 2015”.
The Asahi Group posted net sales of ¥1,489,460 million, a year-on-year increase of
1.2%. Operating income increased by 15.2% to ¥95,349 million and recurring profit
rose by 11.7% to ¥101,142 million. Net income totaled ¥53,080 million, an increase of
11.4% compared with the previous year.
Asahi Group (Consolidated) Asahi Breweries, Ltd. (Non-consolidated)
Net sales ¥1,489,460 million (up 1.2% year-on-year)
¥963,270 million
(down 2.3% year-on-year)
Operating income ¥95,349 million (up 15.2% year-on-year)
¥84,741 million
(up 7.9% year-on-year)
Recurring profit ¥101,142 million (up 11.7% year-on-year)
¥84,707 million
(up 6.8% year-on-year)
Net income ¥53,080 million (up 11.4% year-on-year)
¥17,661 million
(down 41.2% year-on-year)
4
The following provides an overview of the Group’s operations by business segment.
Alcoholic Beverages Segment
In its domestic alcoholic beverages business, Asahi Breweries, Ltd. (“the
Company”) promoted brand reinforcement and growth initiatives in line with the slogan
“Striving toward reform”, focusing on “Asahi Super Dry” and “Clear Asahi” as flagship
brands. Meanwhile, in the pursuit of a solid earnings base immune to the effects of
changes in the market environment, it pushed ahead with both earnings structure
reforms through Group-wide procurement as a means of reducing raw materials costs
and the consolidation of breweries in order to enhance production efficiency.
- Beers and Beer-type Products Business
In the beer sector, the Company worked to enhance the appeal of its “Asahi Super
Dry” among a much wider range of customers through two proactive, conceptually
linked information provision and sales promotion projects. The first was a sales
campaign that aimed at invigorating the brand with an “Asahi Super Dry Extra Cold”
variety enjoyed at temperatures below freezing – that is, between -2°C and 0°C – the
second, an environmental protection initiative (the “Refreshingly Sustainable” project)
under which the Company donated a portion of its proceeds from sales to regional
organizations throughout the country that are dedicated to preserving Japan’s natural
and cultural assets.
In the happoshu sector, the Company worked to energize the market by boosting
the quality of “Asahi Style Free” – its ground-breaking “zero-carbohydrate”*1 product –
and also through a range of promotion activities.
In the new-genre sector, the Company focus its management resources on the
“Clear Asahi” and “Asahi Off” brands in order to help establish them as the leading
products in the growing “new genre (malt-type)”*2 segment, and of particular note in
this regard was the March launch of a kegged variety of “Clear Asahi” for on-site sales.
The Company also developed products catering for diversifying customer tastes,
introducing “Asahi Strong Off” in March and “Asahi Kutsurogi-Jikomi <4VG>” in
September.
*1 “Zero-carbohydrate” is defined as a sugar content of less than 0.5g per
100ml based on the Japanese labeling standards for nutritional content.
*2 “New genre (malt-type)” is defined by the Company as a genre classified as
“liquors (happosei) (1)” that are happoshu with less than 50% malt and
mixed with barley spirits.
5
- Shochu, Low-Alcohol Beverages, Whisky and Other Spirits, and Wine Business
In the shochu sector, the Company renewed its “Imo-Jochu Kanoka KurokouijiJikomi” product line as part of efforts to energize the “Kanoka” brand. In May,
meanwhile, the Company continued its forward-looking sales promotion activities with
the launch of “Honkaku Imo-Jochu Satsuma Koku-Murasaki”.
In the low-alcohol beverages sector, the Company not only added new flavors to
the “Asahi Slat” and “Asahi Cocktail Partner” canned chu-hi (shochu cocktail) series,
but it also focused on brand cultivation, introducing “Asahi Chu-hi Kajitsu-noShunkan” and “Asahi Sparx” in March and July, respectively. “Asahi Chu-hi Kajitsuno-Shunkan” prides itself on the full flavor of natural fruit juice, while “Asahi Sparx”
boasts an alcohol content of 9% and 70% reduction in carbohydrates*3.
In the whisky and other spirits sector, sales of the core brand “Black Nikka Clear
Blend” continued to expand steadily, posting positive growth for the fourth successive
year. In February, “Taketsuru 21-Year Pure Malt” won accolades at the “World
Whiskies Awards (WWA) 2010” *4 as the world’s best blended malt whisky. This was
the second year in succession that the whisky won this prize, and the third time overall.
In the wine sector, the Company continued to promote sales of domestically
produced wine through renewal of the “Sanka-boshi-zai Mutenka Yuki Wine” line of
antioxidant-free organic wines as part of efforts to increase “Sainte Neige” brand
penetration. In imported wines, efforts focused on the expansion of sales through
cultivation of a varied product lineup, with the Company promoting such key labels as
“Maison Louis Latour” and “Zonin.”
*3 Calculated with respect to the average carbohydrate content of the
Company’s fruit chu-hi products.
*4 The WWA is an international competition exclusively for whiskies and
sponsored by the specialized UK publication Whisky Magazine.
- International Alcoholic Beverages Business
In the Chinese beer business, Hangzhou Xihu Beer Asahi Co., Ltd. and Beijing
Beer Asahi Co. Ltd. began production of Tsingtao beer products under contract in July.
Through these and other efforts, the Group worked to strengthen its strategic partnership
with Tsingtao Brewery Co., Ltd. as a means of improving profitability. In Asian and
Oceania markets such as Korea, Taiwan, Hong Kong, Thailand and Australia, the Group
boosted the market presence of the “Asahi” brand through steady growth in sales of
“Asahi Super Dry” among other products.
In a reflection of lower sales of beer and beer-type beverages, net sales recorded in
the alcoholic beverages business segment amounted to ¥935,850 million, a decline of
6
2.3% compared with the previous year. Operating income rose by 7.2% year-on-year to
¥84,566 million, thanks to the Group’s efforts to stem growth in raw materials costs and
to reduce other costs.
Soft Drinks Segment
- Domestic Soft Drinks Business
In the domestic soft drinks business, Asahi Soft Drinks Co., Ltd. pursued a growth
strategy while simultaneously implementing further structural reforms to realize
dramatic growth in this sector.
Efforts have focused on channeling marketing resources in order to further
strengthen and develop key brands such as “MITSUYA”, “WONDA” and “Asahi
Juroku-Cha” at the heart of the growth strategy. Meanwhile, Asahi Soft Drinks also
worked to energize the market through, for example, its May launch of “Asahi TeaO” –
a product that delivers the full flavor of black tea despite having “zero sugar”*5. And
thanks in part to the acquisition of House Foods Corporation’s “Rokko no Oishii Mizu”
production and marketing operations, overall sales volume at Asahi Soft Drinks Co.,
Ltd. grew for the eighth year in succession, hitting a record high.
Restructuring efforts in this segment targeted further quality improvements and
earnings structure reforms. Besides working to stem growth in raw materials costs, the
Company added a new state-of-the-art production line featuring equipment for in-house
manufacture of PET bottles at its Ibaraki Brewery, while also enhancing the efficiency
of production and logistics operations.
*5 “Zero sugar” is defined as a sugar content of less than 0.5g per 100 ml
based on the Japanese labeling standards for nutritional content.
- International Soft Drinks Business
In the Group’s international soft drinks business, Tingyi-Asahi Beverages Holding
Co., Ltd. worked to reinforce its position in the Chinese market through sales
campaigns and a range of other promotion activities focused on core products, thus
strengthening its business platform. In Australia, meanwhile, Schweppes Australia Pty
Limited continued to implement forward-looking policies to further enhance existing
brands and to also expand new sales routes.
In a reflection of the significant increase in sales volume at Asahi Soft Drinks Co.,
Ltd. and the sales contribution from Schweppes Australia Pty Limited, the soft drinks
business segment posted net sales of ¥391,565 million, a gain of 10.2% compared with
the previous year. Operating income increased by 608.4% from the previous year to
¥4,922 million.
7
Foods Segment
In the foods segment, Group subsidiary Asahi Food & Healthcare Co., Ltd. worked
to lay the groundwork for further growth by expanding sales, strengthening corporate
capabilities, and creating safe and reassuring brands. Asahi Food & Healthcare boosted
sales through aggressive advertising expansion and sales promotion initiatives, in
addition to the ongoing introduction of new and renewed product lines. These efforts
supported the growth in sales of such mainstay brands as “MINTIA” breath mints,
“BALANCEUP” nutritionally balanced snack bars, the “Ippon Manzoku Bar” range of
nutritional snacks, yeast-derived quasi-drug “EBIOS” tablets, “Dear-Natura” dietary
supplements and “Slim Up Slim” dietary aids.
In line with its management policy of building of a growth-oriented business
platform, Wakodo Co., Ltd. pursued a strategy of reinforcing and expanding its
operating base. Leveraging its expertise in “infant-safe quality” developed in the
production of high-quality baby foods over many years, Wakodo continued to revamp
product lines and expand its brand portfolio. Thanks to these efforts, strong
performance of such mainstay brands as the “Goo-Goo Kitchen” baby food line
contributed to a year-on-year increase in sales.
In other segment developments, Group subsidiary Amano Jitsugyo Co., Ltd.
focused on business expansion and increasing its profitability with the aim of
dominating the Japanese market for freeze-dried foods. Mail-order sales operations
performed much better than in the previous year, thanks in part to sustained growth in
mainstay freeze-dried miso soup products; similarly, its distribution sales operations
achieved record sales on the back of a significant increase in the number of outlets
carrying its products.
In a reflection of strong performance in mainstay Group products, net sales in the
foods segment amounted to ¥95,440 million, a gain of 3.3% compared with the previous
year. Operating income soared by 32.4% from the year before to ¥3,632 million, thanks
to sales growth and production efficiency enhancements at Asahi Food & Healthcare
among other factors.
Other Businesses Segment
In the other businesses segment, expansion of business in restaurant and logistics
operations helped to keep net sales almost level, declining just 0.2% year-on-year to
¥66,604 million despite difficult market conditions. In a reflection of improved
profitability in logistics operations, segment profitability increased 69.3% from the year
before to ¥1,505 million.
8
Asahi Group Breakdown of Net Sales (Consolidated) Million yen
Segment
86th term
2009
(previous)
87th term
2010
(under review)
Change in
amount
Change in
percentage
Alcoholic Beverages ¥958,155 ¥935,850 (22,305) -2.3 %
Soft Drinks 355,162 391,565 36,403 10.2
Foods 92,399 95,440 3,040 3.3
Other Businesses 66,751 66,604 (146) -0.2
Total 1,472,468 1,489,460 16,991 1.2
Note: The above figures exclude intra-Group sales.
Asahi Breweries, Ltd. Breakdown of Net Sales (Non-consolidated) Million yen
Business area
86th term
2009
(previous)
87th term
2010
(under review)
Change in
amount
Change in
percentage
Beers and Beer-Type Products ¥844,328 ¥812,496 ¥ (31,832) -3.8 %
(Beer) 646,517 620,367 (26,150) -4.0
(Happoshu) 96,239 71,510 (24,728) -25.7
(New Genre) 101,571 120,618 19,046 18.8
Shochu 50,265 48,262 (2,002) -4.0
Low-Alcohol Beverages 30,558 31,209 651 2.1
Whisky and Other Spirit 26,005 30,411 4,406 16.9
Wine 12,420 11,546 (874) -7.0
Other Alcoholic Beverages 3,877 6,972 3,094 79.8
Contract Manufacture 16,227 20,611 4,384 27.0
Real Estate and Others 1,785 1,760 (25) -1.4
Total 985,468 963,270 (22,198) -2.3
Note: “Other Alcoholic Beverages” above includes beer-tasted soft drinks and soft drinks for on-site sales.
9
(2) Management Perspectives
Working under the slogan “Reform, Execution, Full Participation” in 2011, the
second year of the “Medium-Term Management Plan 2012”, the Asahi Group will
implement global management measures focused on further enhancement of corporate
value. Meanwhile, with the planned transition in July 2011 to a pure holding company
structure, it is intended not only to clarify the roles and responsibilities of each business
department and strengthen business platforms through specialization, but to also target
dramatic growth through the audacious allocation of resources to growth areas both at
home and overseas.
The Domestic Alcoholic Beverages Business
In the domestic alcoholic beverages business, the Company will target expansion of
overall demand by further building customer trust and affinity as a means of enhancing
the value of existing brands and offering original value in this market. In the beers and
beer-type products business, the Company will work to cultivate core brands in each
category, with a distinct focus on “Asahi Super Dry” and “Clear Asahi”; furthermore, it
also aims to further energize the market for beers and beer-type products with the March
launch of “Ichibanmugi” – a new product that delivers the authentic clear flavor and
crisp aftertaste of the “new-genre 100% malt beer”*. In the shochu, low-alcohol
beverages, whisky and other spirits and wine categories, the Company will work to
boost its market presence, cultivating all of its major products while at the same time
striving for higher cost competitiveness. In addition, it will integrate beer production
from the Nishinomiya Brewery into Suita Brewery’s operations in order to greatly
enhance production efficiency, and through this and other measures, aims to reform its
earnings structure.
* “100% malt” is defined as a beverage produced only from malt, barley
spirits, and other barley-derived ingredients, with the exception of hops at
less than 0.5%.
Group Operations
In the soft drinks business, key Group subsidiary Asahi Soft Drinks Co., Ltd. is
pursuing a policy of accelerating growth through the creation of a stronger base for
future development with a focus on key brands such as “WONDA”, “MITSUYA” and
“Asahi Juroku-Cha”; by offering new value in long-selling brands; and by re-launching
the “Rokujo Mugicha” brand of barley tea products acquired from Kagome Co., Ltd. In
addition, Asahi Soft Drinks also aims to keep quality assurance as viewed through the
eyes of the customer at the highest possible levels and to further optimize its production
and logistics systems in the quest to become the industry leader in terms of cost
10
competitiveness. LB Co., Ltd. (Tokyo) and LB Co., Ltd. (Nagoya), which between them
handle chilled soft-drink operations, merged in January 2011, seeking to enhance
profitability and to develop new growth strategies benefiting from synergistic effects.
In the foods business, Group subsidiary Asahi Food & Healthcare Co., Ltd. aims
to expand sales by developing new products in the growing businesses of confectionery,
health foods and seasonings, and also by developing new markets. In addition, Asahi
Food & Healthcare will work to realize a structure capable of consistently generating
profits and a business platform that is sound, dependable and resilient in the face of
change. Elsewhere, Wakodo Co., Ltd. will strive to further enhance its powerful
position in powdered baby milks, baby foods and other existing businesses, while at the
same time remaining committed to “infant-safe quality” and preparing for future growth
through the development of new businesses, including overseas operations and business
targeting seniors. In order to realize a platform capable of supporting dramatic growth
going forward, Amano Jitsugyo Co., Ltd. is working to develop and cultivate core
products; to expand its marketing network; to achieve further growth in mail-order sales
operations; and in addition, to enhance its production capabilities in the field of freeze
dried products.
In international operations, the Group is committed to further improving margins
in its beer operations in the key China market through its strategic partnership with
Tsingtao Brewery Co., Ltd.; in addition, it will deploy growth strategies aimed at
expanding the Asahi brand. Elsewhere, Schweppes Australia Pty Limited will also
actively pursue growth strategies focused on expanding sales of major product lines
through forward-looking marketing investments and entry into new categories. The
company has concluded a share purchase agreement with P&N Beverages Australia Pty
Limited in anticipation of acquisition, and together, they aim to identify synergies that
can be leveraged upon merging as they work to reinforce their position in the Australian
soft drinks market. Through a joint venture with Itochu Corporation, meanwhile, the
Asahi Group has invested in the Ting Hsin International Group, one of the largest
packaged food manufacturing and distribution groups in Greater China, and in order to
further expand its business in both China and Taiwan, it intends to work closely with
Ting Hsin, efficiently applying the strengths of each in the wide range of food
businesses in which that group is active.
In accordance with “Medium-Term Management Plan 2012,” the Asahi Group
intends to strengthen all of its brands and increase its profitability through optimizing its
finances and implementing a cash flow strategy aimed at increasing total enterprise
value. Creating a stronger base for future growth is the Group’s top priority. To this end,
it plans to investigate and actualize opportunities for strategic business investments and
alliances, both in Japan and abroad, targeting the alcoholic beverage and soft drink
business segments in particular. The Group will adopt a flexible approach with respect
11
to the allocation of funds in order to return cash flows to shareholders and create
additional corporate value.
The Group cordially requests shareholders’ continuing encouragement and support.
(3) Capital Investment Activities
Consolidated capital expenditures in the year under review totaled ¥36,737 million,
a large portion of which represented investments made to upgrade existing facilities and
implement energy conservation measures. Other projects are specified below:
Major capital investments and facility upgrades in process during 2010
Segment concerned: Soft drink operations
Item and expenditure: Manufacturing facility for soft drinks: ¥3,068 million (at
Ibaraki Brewery, Asahi Breweries, Ltd.: total projected capital investment of
¥24,500 million between 2006 and 2010)
(4) Financing Activities
The Company financed the capital investments detailed in item (3) above and other
capital requirements through loans from financial institutions and the issuance of
commercial paper. On April 27, 2010, furthermore, the Company issued its 32nd series
of unsecured bonds (5-year, ¥20,000 million bond issue) to raise bond-redemption funds.
(5) Status of Principal Lenders
(As of December 31, 2010)
Lender Outstanding balance
(Million yen)
Sumitomo Mitsui Banking Corporation 34,655
Mizuho Corporate Bank, Ltd. 14,934
The Sumitomo Trust & Banking Co., Ltd. 10,500
The Dai-ichi Life Insurance Company, Limited 10,200
The Norinchukin Bank 7,400
Note: Pursuant to organizational changes, The Dai-ichi Mutual Life Insurance Company became The
Dai-ichi Life Insurance Company, Limited on April 1, 2010.
12
(6) Financial and Profit/Loss Indicators
A. Financial and profit/loss indicators of Asahi Group (Consolidated)
84
th term
2007
85th term
2008
86th term
2009
87th term
2010
(under review)
Net sales (million yen) 1,464,071 1,462,747 1,472,468 1,489,460
Operating income (million yen) 86,955 94,520 82,777 95,349
Recurring profit (million yen) 90,217 96,474 90,546 101,142
Net income (million yen) 44,797 45,014 47,644 53,080
Earnings per share (yen) 94.94 96.31 102.49 114.10
Total assets (million yen) 1,324,391 1,299,058 1,433,652 1,405,358
Net assets (million yen) 529,782 534,627 577,702 612,670
Net assets per share (yen) 1,089.33 1,122.13 1,233.25 1,315.51
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)
84
th term
2007
85th term
2008
86th term
2009
87th term
2010
(under review)
Net sales (million yen) 1,030,736 1,019,613 985,468 963,270
Operating income (million yen) 79,933 91,050 78,513 84,741
Recurring profit (million yen) 77,372 88,562 79,303 84,707
Net income (million yen) 40,513 38,994 30,036 17,661
Earnings per share (yen) 85.84 83.43 64.61 37.97
Total assets (million yen) 1,070,506 1,049,190 1,155,860 1,100,325
Net assets (million yen) 482,026 485,538 507,569 514,226
Net assets per share (yen) 1,020.24 1,044.56 1,091.53 1,105.00
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.
13
(7) Principal Subsidiaries
Company name Capital (Million yen)
Shareholdings (%) Main operations
The Nikka Whisky Distilling
Co., Ltd.
14,989 100.0 Production of alcoholic
beverages
Sainte Neige Wine Co., Ltd. 50 100.0 Production of alcoholic
beverages
Asahi Soft Drinks Co., Ltd. 11,081 100.0 Production and
marketing of soft drinks
Asahi Calpis Beverage Co.,
Ltd.
495 80.0 Sales of soft drinks
LB Co., Ltd. (Tokyo) 487 100.0 Production and
marketing of soft drinks
LB Co., Ltd. (Nagoya) 55 100.0 Production and
marketing of soft drinks
Asahi Food & Healthcare Co.,
Ltd.
3,200 100.0 Production and
marketing of foods
Wakodo Co., Ltd. 2,918 100.0 Production and
marketing of foods
Amano Jitsugyo Co., Ltd. 67 100.0 Production and
marketing of foods
Asahi Logistics, Ltd. 80 100.0 Cargo transportation
Asahi Food Create, Ltd. 40 100.0 Operation of bars and
restaurants
Beijing Beer Asahi Co. Ltd. 7,902
(609,322 thousand RMB)
72.8 Brewing and sales of
beer
Hangzhou Xihu Beer Asahi
Co., Ltd.
3,882
(276,000 thousand RMB)
55.0 Brewing and sales of
beer
Yantai Beer Tsingtao Asahi
Co., Ltd.
3,032
(218,804 thousand RMB)
51.0 Brewing of beer
Schweppes Australia Pty
Limited
13,591
(A$200,018 thousand)
100.0 Production and
marketing of soft drinks
Asahi Beer U.S.A., Inc. 3,720
(US$32,000 thousand)
100.0 Sales of beer
Notes:
1. Shareholding percentages include shares held indirectly.
2. The Company made LB Co., Ltd. (Tokyo) a wholly owned subsidiary via the acquisition on
November 8, 2010 of 32.1% of its shares.
3. The Company made LB Co., Ltd. (Nagoya) a wholly owned subsidiary via the acquisition on
November 8, 2010 of 3.0% of its shares.
4. The Company made Amano Jitsugyo Co., Ltd. a wholly owned subsidiary via the acquisition on
December 17, 2010 of 20.0% of its shares.
5. On January 1, 2010, Asahi Food Create, Ltd. absorbed the subsidiaries Sumida River Brewing
Company and Asahi Beer Annex Company.
14
(8) Acquisition or Disposal of Other Company Shares, Equity Stakes and Stock
Acquisition Rights
A. The Company acquired 6.5% of the common shares (indirect) of the holding
company of Ting Hsin International Group, Ting Hsin (Cayman Islands) Holding
Corporation, through private placement in line with a resolution at a meeting of the
Board of Directors on September 28, 2010. The purchase was conducted through
AI Beverage Holding Co. Ltd., a wholly owned subsidiary of the Company.
B. On November 19, 2010, following approval of a resolution at a meeting of the
Board of Directors on September 28, 2010, Asahi Breweries, Ltd. assigned 80,008
shares of common stock in Tingyi-Asahi Beverages Holding Co., Ltd. to Ting Hsin
(Cayman Islands) Holding Corporation via AI Beverage Holding Co Ltd. This gave
the Company an equity stake (indirect) of 32.0% in Tingyi-Asahi Beverages
Holding Co., Ltd.
(9) Transfer of operations from other companies
In accordance with a business purchase agreement concluded with House Foods
Corporation on April 8, 2010, Asahi Soft Drinks Co., Ltd. took over the production and
marketing of mineral water sold under that company’s “Rokko no Oishii Mizu” brand
as of May 31 of the same year. The purchase price for the transaction was ¥5,300
million.
15
(10) Principal Operations
(As of December 31, 2010)
The Asahi Group’s principal operations and products are as listed below:
Principal
operations Principal products
Alcoholic
Beverages
Asahi Super Dry, Asahi The Master, Asahi Premium Draft Beer Jukusen,
Asahi Style Free, Asahi Honnama Draft, Asahi Honnama Aqua Blue,
Clear Asahi, Asahi Off, Asahi Mugishibori, Asahi Strong Off,
Asahi Kutsurogi-Jikomi <4VG> (beers and beer type of beverages)
Kanoka, Daigoro, Ichibanfuda, Satsuma Tsukasa (shochu)
Asahi Slat, Asahi Cocktail Partner, Asahi Chu-hi Kajitsu-no-Shunkan,
Asahi Sparx, Black Nikka Clear Highball (low-alcohol beverages)
Taketsuru, Black Nikka Clear Blend, Single Malt Yoichi (whisky)
Sainte Neige, Louis Latour, Lanson, Zonin, Caliterra, ALMADEN, Gancia (wine)
Soft Drinks
Mitsuya Cider, Wilkinson, Bireley’s,
WONDA, Asahi Juroku-Cha, Asahi TeaO,
Asahi Ikkyu-Chaba Oolong-Cha, Asahi Shokuji No Abura Ni Kono Ippon,
Asahi Fujisan-no Vanadium Ten-Nen-Sui, Asahi Rokko no Oishii Mizu,
Asahi Super H2O
Foods
EBIOS, Dear-Natura, Slim Up Slim,
MINTIA, BALANCEUP, Ippon Manzoku Bar,
Hai Hai, Gun Gun, Goo-Goo Kitchen, Gyunyuya-san no Kohii,
Oshibori Wetty, Siccarol,
Mutenka-misoshiru, Nyumen, Shunkan Bishoku, Soup Days
16
(11) Principal Offices and Factories
(As of December 31, 2010)
Asahi
Breweries,
Ltd.
Registered
head office
23-1, Azumabashi 1-chome, Sumida-ku, Tokyo
Regional
sales offices
Hokkaido Regional Headquarters (Sapporo),
Tohoku Regional Headquarters (Sendai),
Tokyo Metropolitan Headquarters for On-Premise Retailers
(Chuo-ku, Tokyo),
Chubu Regional Headquarters (Nagoya),
Hokuriku Regional Headquarters (Kanazawa),
Kinkiken Regional Headquarters (Osaka),
Chugoku Regional Headquarters (Hiroshima),
Shikoku Regional Headquarters (Takamatsu),
Kyushu Regional Headquarters (Fukuoka)
Production
facilities
Hokkaido Brewery (Sapporo),
Fukushima Brewery (Motomiya, Fukushima Prefecture),
Ibaraki Brewery (Moriya, Ibaraki Prefecture),
Kanagawa Brewery (Minami-ashigara, Kanagawa Prefecture),
Nagoya Brewery (Nagoya),
Suita Brewery (Suita, Osaka Prefecture),
Nishinomiya Brewery (Nishinomiya, Hyogo Prefecture),
Shikoku Brewery (Saijo, Ehime Prefecture),
Hakata Brewery (Fukuoka)
Laboratories Development Laboratories for Alcoholic Beverages,
Research Laboratories of Brewing Technology,
Research & Development Laboratories for Packaging,
Research Laboratories for Food Technology,
Research Laboratories for Food Safety Chemistry,
Research & Development Laboratories for Sustainable Value
Creation,
Research Laboratories for Fundamental Technology of Food
(all in Moriya, Ibaraki Prefecture)
Overseas
offices
Coordination Division for China Business (China),
North America Office (U.S.A.),
Europe Branch (U.K.)
17
Subsidiaries Domestic The Nikka Whisky Distilling Co., Ltd.
Headquarters: Minato-ku, Tokyo
Sainte Neige Wine Co., Ltd.
Headquarters: Yamanashi, Yamanashi Prefecture
Asahi Soft Drinks Co., Ltd.
Headquarters: Sumida-ku, Tokyo
Asahi Food & Healthcare Co., Ltd.
Headquarters: Sumida-ku, Tokyo
Wakodo Co., Ltd.
Headquarters: Chiyoda-ku, Tokyo
Amano Jitsugyo Co., Ltd.
Headquarters: Fukuyama, Hiroshima Prefecture
Overseas Beijing Beer Asahi Co. Ltd. (China)
Hangzhou Xihu Beer Asahi Co., Ltd. (China)
Yantai Beer Tsingtao Asahi Co., Ltd. (China)
Schweppes Australia Pty Limited (Australia)
Asahi Beer U.S.A., Inc. (U.S.A.)
(12) Employees
(As of December 31, 2010)
A. Employees of the Asahi Group (Consolidated)
Business segment Number of employees
Alcoholic Beverages 7,036 (down 245)
Soft Drinks 5,045 (down 324)
Foods 1,540 (up 41)
Other Businesses 3,091 (down 76)
Total 16,712 (down 604)
Note: Figures in parentheses indicate increases or decreases from the end of the previous term.
B. Employees of Asahi Breweries, Ltd. (Non-consolidated)
Full-time
employees Average age Average years of service
Average annual
remuneration
3,576 (down 143) 40.9 15.2 ¥8,795,364
Notes:
1. Figures in parentheses indicate increases or decreases from the end of the previous term.
2. Full-time employees include 178 persons seconded to the Company from other companies.
3. In addition to the employees enumerated above, the Company employs 166 persons on a term
contract basis.
18
(13) Overview of Other Significant Asahi Group Activities
Research and Development
R&D operations have principally involved the development of new products and
technologies to reinforce the Group’s existing businesses and to foster new business
development. Notable R&D achievements in the year under review are outlined below:
In the field of packaging technology, Asahi Soft Drinks Co., Ltd. has developed
a PET bottle based on a universal design for environment load reduction. These
bottles not only reduce both material usage and weight by approximately 24%
when compared with previous products, but they have been designed such that
the cap is easier to open and the bottle can be held more securely while being
drunk from. As a result, they simultaneously help to minimize the Group’s
environmental footprint and enhance user convenience. From 2011, the bottles
will be successively phased in for tea beverages, starting with “Asahi JurokuCha”, thus contributing to the conservation of resources and lower CO2
emissions.
In cooperation with the National Agricultural Research Center for Kyushu
Okinawa Region (under the National Agriculture and Food Research
Organization), the Group has developed a new combined sugar/bioethanol
production process and begun testing it at a special pilot plant on Okinawa
Prefecture’ s Ie island. Using a new variety of high-biomass sugarcane capable
of producing 50% more biomass, this process not only produces the same
amount of sugar as conventional methods, but it also delivers high volumes of
bioethanol at low cost and with no requirement for fossil fuels at any stage.
Thanks to this breakthrough, the process was selected by the Ministry of
Agriculture, Forestry and Fisheries as one of its top ten research topics for 2010,
and much is expected from promising technology in many fields, not the least of
which being the reduction of greenhouse gas emissions.
Corporate Social Responsibility (CSR)
Together with its stakeholders, the Asahi Group is constantly on the lookout for
new ways in which it can proactively discharge its social responsibilities. In line with
this approach, the Group updated its basic CSR policy in January and is now focusing
on such priority areas as environmental conservation and social contribution activities.
As part of its environmental conservation activities, the Group formulated its
Environmental Vision 2020 in March 2010 in order to bolster Group-wide
environmental preservation. This policy focuses on four key themes – namely,
Building a Low Carbon Society, Building a Recycling-Based Society,
Conserving Biodiversity and Spreading Awareness of the Gift of Nature. Given
that its business relies on water, grain and other gifts of nature, the Group takes
19
biodiversity in particularly very seriously, and in recognition of this fact, has
declared its commitment to the conservation thereof. In order to ensure progress
towards a sustainable society, the Group will strive to reduce the environmental
footprint of its business operations; to develop closer bonds with the members of
such a society, including its next generations; and to approach conservation
efforts with a shared Group-wide perspective.
Among its social contribution activities, the Group donated one yen for every
can of “Asahi Super Dry” sold to Japanese regional organizations that are
dedicated to preserving the country’s natural and cultural assets. Begun in 2009
and dubbed the “Refreshingly Sustainable” project, this initiative seeks to
strengthen local community relations while boosting corporate value by fulfilling
the Group’s social responsibility through business activities. Total donations in
the first phase amounted to ¥1,508,874,176 (with ¥828,129,448 thereof from the
year under review).
Other significant Asahi Group activities are as follows.
A. On January 1, 2011, Company subsidiaries LB Co., Ltd. (Tokyo) and LB Co.,
Ltd. (Nagoya) merged with the former as the surviving company.
B. On January 11, 2011, the Company assigned all of its 10,919,480 shares in
Haitai Beverage Co., Ltd. to LG Household & Health Care Ltd.
20
2. Overview of the Company
(1) Shares Outstanding
(As of December 31, 2010)
A. Total number of authorized shares 972,305,309
B. Total number of issued shares 483,585,862
C. Number of shareholders 131,262
(Increased by 11,354 from the end of the previous term)
D. Major shareholders
Shareholders’ investment in the Company
Number of
shares held
(in hundreds)
Percentage of
shares held
(%)
The Master Trust Bank of Japan, Ltd. (Trust Account) 250,214 5.4
Japan Trustee Services Bank, Ltd. (Trust Account) 224,179 4.8
Asahi Kasei Corporation 187,853 4.0
The Dai-ichi Life Insurance Company, Limited 169,200 3.6
Fukoku Mutual Life Insurance Company 168,830 3.6
JP Morgan Chase Bank 380055 107,578 2.3
Sumitomo Mitsui Banking Corporation 90,280 1.9
The Sumitomo Trust & Banking Co., Ltd. 81,260 1.7
State Street Bank and Trust Company 71,129 1.5
Sumitomo Life Insurance Company 70,900 1.5
Total 1,421,424 30.5
Notes:
1. The Company holds treasury stock numbering 18,220,056 shares. However, the Company is
excluded from the above list of major shareholders.
2. Shareholding percentages are calculated based on the total number of issued shares less the number
of shares in treasury stock.
21
(2) Status of Stock Acquisition Rights, etc.
A. Stock acquisition rights held by Directors and Corporate Auditors of the
Company, granted as part of remuneration for execution of their duties
(As of December 31, 2010)
1) Stock option system based on
acquisition of treasury stock
2) Stock option system based on
subscription rights
Date of issuance resolution March 29, 2001 March 28, 2002
Class and number of shares
subject to stock acquisition
rights
Shares of common stock: 16,000 Shares of common stock: 18,600
Fee for exercise of options ¥1,185 per share ¥1,090 per share
Exercisable period January 1, 2005 to March 28, 2011 January 1, 2005 to March 27, 2012
Conditions for exercise of
options
• The options are exercisable even after
the resignation of Directors or
Corporate Auditors, as the case may
be.
• The options may be passed on to
heirs.
• The options shall be cancelled if a
holder is dismissed for certain
specified reasons.
• Any assignment or pledging of the
options is prohibited.
• The options are exercisable even after
the resignation of Directors or
Corporate Auditors, as the case may
be.
• The options may be passed on to
heirs.
• The options shall be cancelled if a
holder is dismissed for certain
specified reasons.
• Any assignment or pledging of the
options is prohibited.
Situation concerning the holding of stock acquisition rights by Directors and Corporate Auditors
Directors
(except Outside Directors)
• Number of shares subject to stock
acquisition rights: 16,000
• Number of holders: 2
• Number of shares subject to stock
acquisition rights: 13,800
• Number of holders: 3
Outside Directors • Number of shares subject to stock
acquisition rights: —
• Number of holders: —
• Number of shares subject to stock
acquisition rights: —
• Number of holders: —
Corporate Auditors • Number of shares subject to stock
acquisition rights: —
• Number of holders: —
• Number of shares subject to stock
acquisition rights: 4,800
• Number of holders: 1
22
3) First issue of stock acquisition
rights
4) Second issue of stock acquisition
rights
Date of issuance resolution March 28, 2003 March 30, 2004
Number of stock acquisition
rights
20 950
Class and number of shares
subject to stock acquisition
rights
Shares of common stock: 20,000 Shares of common stock: 95,000
Fee for exercise of stock
acquisition rights
¥830 per share ¥1,205 per share
Exercisable period March 28, 2005 to March 27, 2013 March 30, 2006 to March 29, 2014
Conditions for exercise of
stock acquisition rights
• The options are exercisable even
after the resignation of Directors or
Corporate Auditors, as the case may
be.
• The options may be passed on to
heirs.
• The options shall be cancelled if a
holder is dismissed for certain
specified reasons.
• Any assignment or pledging of the
options is prohibited.
• The options are exercisable even
after the resignation of Directors or
Corporate Auditors, as the case may
be.
• The options may be passed on to
heirs.
• The options shall be cancelled if a
holder is dismissed for certain
specified reasons.
• Any assignment or pledging of the
options is prohibited.
Situation concerning the holding of stock acquisition rights by Directors and Corporate Auditors
Directors
(except Outside Directors)
• Number of stock acquisition rights:

• Number of shares subject to stock
acquisition rights: —
• Number of holders: —
• Number of stock acquisition rights:
400
• Number of shares subject to stock
acquisition rights: 40,000
• Number of holders: 3
Outside Directors • Number of stock acquisition rights:

• Number of shares subject to stock
acquisition rights: —
• Number of holders: —
• Number of stock acquisition rights:

• Number of shares subject to stock
acquisition rights: —
• Number of holders: —
Corporate Auditors • Number of stock acquisition rights:
20
• Number of shares subject to stock
acquisition rights: 20,000
• Number of holders: 2
• Number of stock acquisition rights:
550
• Number of shares subject to stock
acquisition rights: 55,000
• Number of holders: 4
23
5) Third issue of stock acquisition
rights
6) Fourth issue of stock acquisition
rights
Date of issuance resolution March 30, 2005 March 30, 2006
Number of stock acquisition
rights
1,200 1,700
Class and number of shares
subject to stock acquisition
rights
Shares of common stock: 120,000 Shares of common stock: 170,000
Fee for exercise of stock
acquisition rights
¥1,374 per share ¥1,688 per share
Exercisable period March 30, 2007 to March 29, 2015 March 30, 2008 to March 29, 2016
Conditions for exercise of
stock acquisition rights
• The options are exercisable even
after the resignation of Directors or
Corporate Auditors, as the case may
be.
• The options may be passed on to
heirs.
• Any assignment or transfer of the
stock acquisition rights is subject to
approval of the Board of Directors.
• The options are exercisable even
after the resignation of Directors or
Corporate Auditors, as the case may
be.
• The options may be passed on to
heirs.
• Any assignment or transfer of the
stock acquisition rights is subject to
approval of the Board of Directors.
Situation concerning the holding of stock acquisition rights by Directors and Corporate Auditors
Directors
(except Outside Directors)
• Number of stock acquisition rights:
550
• Number of shares subject to stock
acquisition rights: 55,000
• Number of holders: 4
• Number of stock acquisition rights:
1,050
• Number of shares subject to stock
acquisition rights: 105,000
• Number of holders: 7
Outside Directors • Number of stock acquisition rights:

• Number of shares subject to stock
acquisition rights: —
• Number of holders: —
• Number of stock acquisition rights:

• Number of shares subject to stock
acquisition rights: —
• Number of holders: —
Corporate Auditors • Number of stock acquisition rights:
650
• Number of shares subject to stock
acquisition rights: 65,000
• Number of holders: 5
• Number of stock acquisition rights:
650
• Number of shares subject to stock
acquisition rights: 65,000
• Number of holders: 5
24
B. Significant items regarding other stock acquisition rights
Overview of Euroyen conditional convertible bonds with stock acquisition rights
1) Euroyen conditional convertible
bonds with stock acquisition rights
maturing in 2023
2) Euroyen conditional convertible
bonds with stock acquisition rights
maturing in 2028
Date of issuance resolution May 13, 2008 May 13, 2008
Date of issue May 29, 2008 May 29, 2008
Outstanding amount of bonds
with stock acquisition rights
¥35,144 million ¥35,000 million
Details concerning the stock acquisition rights
Number of stock acquisition
rights
Total of 35,000 and the number
calculated by dividing the total face
value of the substitute bonds with stock
acquisition rights by ¥1,000,000
Total of 35,000 and the number
calculated by dividing the total face
value of the substitute bonds with stock
acquisition rights by ¥1,000,000
Class and number of shares
subject to stock acquisition
rights
Shares of common stock: 16,611,295 Shares of common stock: 17,073,170
Fee for exercise of stock
acquisition rights
¥2,107 per share ¥2,050 per share
Exercisable period June 12, 2008 to May 12, 2023 June 12, 2008 to May 12, 2028
Conditions for exercise of
stock acquisition rights
• Certain stock acquisition rights may
not be exercised
• Prior to May 29, 2011, but only when
the closing price of the Company’s
common stock for 20 of the last 30
trading days (including the last
trading day) exceeds 125% of the
conversion price (¥2,107) as of the
last trading date of each quarter. In
such cases, exercise is possible, in
principle, during the following
quarter.
• Certain stock acquisition rights may
not be exercised
• Prior to May 29, 2014, but only when
the closing price of the Company’s
common stock for 20 of the last 30
trading days (including the last
trading day) exceeds 125% of the
conversion price (¥2,050) as of the
last trading date of each quarter. In
such cases, exercise is possible, in
principle, during the following
quarter.
Conditions under which the
Company may acquire
stock acquisition rights
• On or after May 29, 2011, the
Company may acquire all of the
bonds after notifying the
bondholders.
• The acquisition date shall be at least
60 but no more than 75 days from the
notification date.
• On or after May 29, 2014, the
Company may acquire all of the
bonds after notifying the
bondholders.
• The acquisition date shall be at least
60 but no more than 75 days from the
notification date.
25
(3) Directors and Corporate Auditors of the Company
A. Directors and Corporate Auditors
(As of December 31, 2010)
Name Position
Areas of responsibility and significant
concurrent positions held by Director or
Corporate Auditor
Hitoshi Ogita Chairman of the Board and
Representative Director
Chairman of the Board of Asahi Beer Arts
Foundation
Outside Director of Imperial Hotel, Ltd.
Naoki Izumiya President and Representative
Director
Kazuo Motoyama Executive Vice President and
Representative Director
Group Headquarters (Corporate Planning
Department, Public Relations Department,
Department of Agribusiness Development and
Logistics Department)
Director of LB Co., Ltd. (Tokyo)
Masatoshi Takahashi Senior Managing Director
Senior Managing Corporate
Officer
Domestic Marketing Headquarters of the
Company
Outside Director of Orion Breweries, Ltd.
Akiyoshi Koji Managing Director
Managing Corporate Officer
Group Headquarters (Human Resources
Department, Finance Department, IT Strategy &
BPM Department)
Supervisor of Tsingtao Brewery Co., Ltd.
Noriyuki Karasawa Managing Director
Managing Corporate Officer
Senior General Manager of Production
Headquarters of the Company
Director of The Nikka Whisky Distilling Co., Ltd.
Director of LB Co., Ltd. (Tokyo)
Director of LB Co., Ltd. (Nagoya)
Katsuyuki Kawatsura Managing Director
Managing Corporate Officer
Group Headquarters (Quality Assurance
Department) and Senior General Manager of
Research & Development Headquarters of the
Company
Chairman of the Board of Asahi Breweries
Foundation
Toshihiko Nagao Director
Corporate Officer
Senior General Manager of Liquor Sales &
Marketing Headquarters
Toshio Mori Director
Corporate Officer
Group Food Business
Director of Asahi Food & Healthcare Co., Ltd.
Director of Wakodo Co., Ltd.
Director of Amano Jitsugyo Co., Ltd.
Toshio Kodato Director
Corporate Officer
Group International Business and Senior General
Manager of International Headquarters of the
Company
Vice Chairman of Tingyi-Asahi Beverages
Holding Co., Ltd.
Director of Schweppes Australia Pty Limited
26
Name Position
Areas of responsibility and significant
concurrent positions held by Director or
Corporate Auditor
Yoshihiro Tonozuka Director
Corporate Officer
Group Soft Drinks Business
Director of Asahi Soft Drinks Co., Ltd.
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
Company
Naoki Tanaka Outside Director President of Center for International Public Policy
Studies
Chairman of Financial System Council, Financial
Services Agency
Chairman of Postal Services Privatization
Committee
Yoshihiro Goto Standing Corporate Auditor Corporate Auditor of Asahi Soft Drinks Co., Ltd.
Corporate Auditor of Wakodo Co., Ltd.
Yoshifumi Nishino Standing Corporate Auditor Corporate Auditor of The Nikka Whisky
Distilling Co., Ltd.
Corporate Auditor of Asahi Food & Healthcare
Co., Ltd.
Corporate Auditor of Amano Jitsugyo Co., Ltd.
Takahide Sakurai Outside Corporate Auditor Special Advisor to The Dai-ichi Life Insurance
Company, Limited
Outside Director of Imperial Hotel, Ltd.
Naoto Nakamura Outside Corporate Auditor Partner and Attorney at Law of Nakamura,
Tsunoda & Matsumoto Law Office
Outside Corporate Auditor of Mitsui & Co., Ltd.
Tadashi Ishizaki Outside Corporate Auditor Professor, Faculty of Commerce, Chuo University
Notes:
1. Directors Mariko Bando and Naoki Tanaka are Outside Directors as defined in Item 15, Article 2 of
the Companies Act.
2. Corporate Auditors Takahide Sakurai, Naoto Nakamura and Tadashi Ishizaki are Outside Corporate
Auditors as defined in Item 16, Article 2 of the Companies Act.
3. The Company designated Outside Directors Mariko Bando and Naoki Tanaka and Outside Corporate
Auditors Takahide Sakurai, Naoto Nakamura and Tadashi Ishizaki as Independent Directors/Auditors
as defined by the Tokyo Stock Exchange and the Osaka Securities Exchange and reported to said
exchanges thereof.
4. Corporate Auditor Yoshihiro Goto was formerly Director in charge of finance of the Company and has
considerable expertise in finance and accounting.
5. Corporate Auditor Naoto Nakamura who is an attorney at law is jurisprudent, among others, to
corporate 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 a
university professor; he has considerable expertise in finance and accounting.
7. Katsuyuki Kawatsura, Toshio Mori, Toshio Kodato and Yoshihiro Tonozuka were newly elected as
Directors at the 86th Annual General Meeting of Shareholders held on March 26, 2010, and all
assumed their respective offices.
27
8. The following director, having retained his office as of the day after conclusion the above-mentioned
86th Annual General Meeting of Shareholders, retired during the year under review.
Name Position upon retirement
Significant concurrent
positions held upon
retirement
Date of
retirement
Reason for
retirement
Nobuo Yamaguchi Outside
Director
Honorary Chairman 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
September 14,
2010
Demise
9. In addition to the above, the retirement from significant concurrent positions held by Directors or
Corporate Auditors during the year under review are detailed below.
Name Position
Significant concurrent positions
held by Director or Corporate
Auditor
Date of retirement
Naoki Izumiya President and
Representative
Director
Director of Amano Jitsugyo Co., Ltd.
Director of Wakodo Co., Ltd.
Director of Asahi Food & Healthcare
Co., Ltd.
Director of Tingyi-Asahi Beverages
Holding Co., Ltd.
March 19, 2010
March 30, 2010
March 31, 2010
May 7, 2010
Kazuo Motoyama Executive Vice
President and
Representative
Director
Director of Asahi Logistics, Ltd.
Director of Asahi Soft Drinks Co., Ltd.
Director of Schweppes Australia Pty
Limited
March 19, 2010
March 24, 2010
March 26, 2010
Toshio Kodato Director
Corporate
Officer
Director of Asahi Beer U.S.A., Inc. April 1, 2010
Yoshihiro Tonozuka Director
Corporate
Officer
President and Representative Director
and Director
of LB Co., Ltd. (Tokyo)
March 17, 2010
Naoki Tanaka Outside Director Member and Deputy Chairman of Fiscal
System Council, Ministry of Finance
April 26, 2010
(Reference) Corporate Officers other than the above are as follows.
Position Name
Managing Corporate
Officer
Yuji Ninomiya, Akira Matsunobu, Fumio Yamasaki, Kenji Taniguchi,
Masafumi Tanino, Takayoshi Kanaya, Hideaki Takemoto
Corporate Officer Norio Naito, Shoji Tsumura, Takami Maruyama, Katsutoshi Takahashi,
Shinichi Hirano, Seiichi Ishikawa, Kenkichi Aoki, Hirohisa Shibuya, Suguru
Nohara, Hiroshi Katagiri, Kazunori Shibata, Shiro Ikeda, Kiminari Maruta,
Yukihiro Shiraishi, Yukio Kakegai, Kazuya Arakeda, Hiroshi Kawashita,
Yoshihide Okuda
28
B. Remuneration paid to Directors and Corporate Auditors
Category
Basic remuneration Bonus Total amount (yen)
Number of
persons
remunerated
Total amount of
remuneration paid
(yen)
Number of
persons
remunerated
Total amount of
remuneration paid
(yen)
Directors
[of which, Outside Directors]
17
[3]
457,320,000
[29,400,000]
17
[3]
132,600,000
[8,500,000]
589,920,000
[37,900,000]
Corporate Auditors
[of which, Outside Corporate
Auditors]
5
[3]
96,000,000
[32,400,000]




96,000,000
[32,400,000]
Notes:
1. The figures above include Directors Kouichi Ikeda, Masahiko Osawa and Shin Iwakami, who
retired at the conclusion of the 86th Annual General Meeting of Shareholders held on March 26,
2010, and also Director Nobuo Yamaguchi, who passed away on September 14, 2010 and was thus
retired.
2. A resolution authorizing payments associated with the termination of the retirement bonus system
to be paid at the time of retirement was passed at the 83rd Annual General Meeting of Shareholders
held on March 27, 2007. As of the end of the fiscal year under review, the anticipated total amount
of future payments was as follows:
Total of ¥42,000,000 to four Directors
Total of ¥33,000,000 to three Outside Corporate Auditors
Final payments totaling ¥6 million are due to be paid to one Director who is scheduled to retire at
the conclusion of the 87th Annual General Meeting of Shareholders to be held on March 25, 2011.
3. The total amount of Directors’ remuneration is limited to ¥760 million (including ¥50 million for
Outside Directors) per year according to the resolution passed at the 83rd Annual General Meeting
of Shareholders held on March 27, 2007.
4. The total amount of Corporate Auditors’ remuneration is limited to ¥120 million (including ¥40
million for Outside Corporate Auditors) per year according to the resolution passed at the 83rd
Annual General Meeting of Shareholders held on March 27, 2007.
29
C. Policies concerning the setting of remuneration paid to Directors and
Corporate Auditors
Directors’ and Corporate Auditors’ remuneration amounts are set within the total
amount of remuneration resolved in advance at a Shareholders’ Meeting. Furthermore,
Directors’ remuneration is set in line with a resolution at a meeting of the Board of
Directors, and Corporate Auditors’ remuneration is set by discussion by the Corporate
Auditors thereof. When remuneration -related resolutions are being made by the Board
of Directors, the Compensation Committee, having Outside Directors making up half of
its membership, acts as an advisory body to the Board of Directors, evaluating the
content of said resolutions in the interests of greater transparency and objectivity.
It should be noted that the retirement bonus system and stock option system were
both discontinued in 2007.
In the interests of setting Directors’ remuneration in a reasonable manner given
roles and responsibilities, the system for doing so takes into consideration each
Director’s motivational abilities in terms of ongoing enhancement of corporation
performance and value in addition to the recruitment of talented persons.
In specific terms, remuneration comprises basic remuneration (a fixed monthly
amount) and bonuses (yearly performance-linked amounts), and each item is determined
using survey data prepared by external specialist organizations and based on duties and
status as Director or Outside Director. In addition, bonuses are raised or lowered based
on consolidated operating income as the main index.
In the interests of setting Corporate Auditors’ remuneration in a reasonable
manner given roles and responsibilities, the system for doing so takes the recruitment of
talented persons into consideration.
In specific terms, remuneration comprises only basic remuneration (a fixed
monthly amount), and it is determined by discussion by the Corporate Auditors using
survey data prepared by external specialist organizations and based on duties and status
as Corporate Auditor or Outside Corporate Auditor.
30
D. Outside Directors and Outside Corporate Auditors
Major activities of Outside Directors and Outside Corporate Auditors
Category Name
No. of Board of
Directors meetings
attended
No. of Board of
Corporate
Auditors
meetings
attended
Form of participation
Outside
Director
Nobuo Yamaguchi 6/7 — Mr. Yamaguchi participated in
discussions as necessary,
primarily from the perspective of
his wealth of experience as a
manager.
Mariko Bando 11/11 — Ms. Bando participated in
discussions as necessary,
primarily from the perspective of
her wealth of experience as an
educator.
Naoki Tanaka 11/11 — Mr. Tanaka participated in
discussions as necessary,
primarily from the perspective of
his wealth of experience as an
expert in economic policy.
Outside
Corporate
Auditor
Takahide Sakurai 11/11 7/7 Mr. Sakurai participated in
discussions as necessary,
primarily from the perspective of
his wealth of experience as a
manager.
Naoto Nakamura 10/11 7/7 Mr. Nakamura participated in
discussions as necessary,
primarily from his expert
perspective as an attorney at law.
Tadashi Ishizaki 11/11 7/7 Dr. Ishizaki participated in
discussions as necessary,
primarily from his expert
perspective as a scholar of
accounting.
Note:
Director Nobuo Yamaguchi passed away on September 14, 2010 and was thus retired, and the number
of meetings held during his tenure is therefore different from that of 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 and
Outside 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 the
minimum amount stipulated by applicable laws and regulations, whichever is higher.
31
(4) Independent Auditor
A. Name of the Independent Auditor
KPMG AZSA LLC
Note: KPMG AZSA & Co. became KPMG AZSA LLC on July 1, 2010 pursuant to a change in
classification.
B. Remuneration paid to the Independent Auditor for the fiscal year under review
Amount payable
Remuneration paid for the fiscal year under review ¥189 million
Total of cash and other financial profits payable by the Company and
its subsidiaries to the Independent Auditor ¥404 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 ¥189
million shown above is a sum of these two amounts.
2. All subsidiaries which are subject to statutory audit by an independent auditor have been audited by
KPMG AZSA LLC.
C. Nature of non-audit professional services provided by the Independent Auditor
The Company also assigns professional duties to the Independent Auditor that are
not statutory auditing duties as stipulated in Paragraph 1, Article 2 of the Certified
Public Accountants Law. These non-audit services include financial due diligence
investigations.
D. Company Policy regarding dismissal of or decision not to reappoint the Independent
Auditor
Article 340 of the Companies Act stipulates that the Board of Corporate Auditors
shall be entitled to dismiss the Independent Auditor for reasons stipulated therein. In
addition, when it is reasonably recognized that the Independent Auditor is no longer
able to execute its duties in an appropriate manner, the Company, with the prior consent
of, or a request by, the Board of Corporate Auditors, shall offer to the Shareholders’
Meeting a resolution to dismiss or not to reappoint the Independent Auditor.
32
3. Systems to Ensure Appropriate Execution of Directors’ Duties in
Conformity With Laws and Regulations and the Articles of
Incorporation, and Other Systems to Ensure Appropriate Business
Operations
The Board of Directors passed the following resolution with respect to the abovementioned systems:
The Company has adopted the following corporate philosophy: “The Asahi Group
aims to satisfy its customers with the highest levels of quality and integrity, while
contributing to the promotion of healthy living and enrichment of the society
worldwide.” To make these aims a reality, the Company shall:
• establish, in accordance with the Companies Act and the Enforcement Regulations
of the Companies Act, the following basic policies (the “Basic Policies”) to
improve systems designed to ensure appropriate business operations of the
Company 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 this
resolution and demand the Representative Director(s) to cause the Directors and
Corporate Officers, through the respective departments they are in charge of, to
develop 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 by
reviewing the Basic Policies and relevant internal regulations and manuals, etc. in
a timely and appropriate manner in accordance with changes in conditions and
circumstances.
laws and regulations and the Articles of Incorporation of the Company>
A. In accordance with a statement of “fair and transparent corporate ethics” as
stipulated in its Corporate Action Guidelines, the Company shall establish the
“Regulations on Corporate Ethics for the Asahi Group” and procure its Directors,
Corporate Auditors and employees abide by these regulations.
B. The Company shall establish the “Corporate Ethics Committee for the Asahi
Group,” which will oversee the compliance affairs of the Asahi Group. One of the
committee’s members shall be an outside attorney-at-law.
C. A Corporate Officer of the Company in charge of compliance shall have the
authority to manage compliance-related risks within the Asahi Group. The General
and Legal Affairs Management Department shall handle day-to-day tasks of
implementation of the compliance program.
33
D. The Company shall assign one person as compliance-promotion personnel in each
of the business establishments of the Company and the Group Companies to
oversee 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 general
awareness of importance of compliance in each business establishment.
E. The Company shall establish a “Clean Line System” for employees of the Asahi
Group, enabling them to blow the whistle on illicit behavior of others to a specific
section of the Company or a designated outside attorney-at-law.
F. The Company shall establish a “Basic Policy on Procurement” addressing mutual
cooperation for fair deals and social responsibilities between the Company and
suppliers and a “Clean Line System for Suppliers”enabling suppliers to blow a
whistle on illicit behavior of employees of the Company to a specific section of the
Company. The Company shall inform and spell out these measures to its suppliers
in 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, all
relevant information shall be shared within the Asahi Group and the Company
shall establish an internal system on the measures. The Company shall also
cooperate closely with industry bodies, local communities, the police and other
external specialist organizations in this area.
H. The operational details of the aforementioned agencies and systems shall be
spelled out under a separately prepared set of internal regulations entitled “Basic
Regulations on Corporate Ethics of the Asahi Group.”
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 other
related 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 the
foregoing information shall be determined by individual relevant regulations.

A. The Company shall develop and adopt basic regulations related to risk
34
management and shall affirm such regulations as the highest standards governing
risk management within the Asahi Group. It shall also develop and adopt an
operational manual on risk management and disseminate the same among all over
the Group.
B. In addition to having the appropriate departments manage risk in their respective
areas, the Company shall establish the “Asahi Group Risk Management
Committee” as a vehicle for comprehensive risk management across the entire
Asahi Group. This committee shall periodically analyze and evaluate risks 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 to maintain product quality.
As food and drink manufacturers, the Asahi Group strongly recognizes their social
responsibility to consumers to ensure the safety of their products.
C. In the event of any major accident, disaster or scandal, the Company shall establish
a crisis-response meeting chaired by a Representative Director.

A. To ensure efficient performance of duties by Directors, the Board of Directors shall
divide duties in a reasonable way to be delegated to different Directors and shall
appoint appropriate persons as Corporate Officers in charge of different divisions.
B. The Company shall establish standards on authority stipulating rules of delegation
of 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 of
operations; and it shall employ a unified system of follow-up and evaluation.
Company and its parent (if any) and its subsidiaries>
A. All systems required for the Internal Control, including those for compliance and
risk management, shall apply comprehensively across the entire Asahi Group. As
the corporate headquarters of the Group, the Company shall manage and operate
the said systems of the Group Companies in accordance with the conditions 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
35
reporting, the evaluation organization established within the Company shall
conduct 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 performance
of 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.”
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.
Directors>
A. When a member of the staff of the Board of Corporate Auditors, as stipulated in the
previous paragraph, receives an order from a Corporate Auditor in relation to
auditing duties, he/she shall not be subject to directives or orders from Directors or
other 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 shall
require the prior concurrence of Corporate Auditors.
relating to other reporting to Corporate Auditors>
A. Directors and employees shall report regularly to Corporate Auditors on matters
related to the Internal Control, and shall report on an as-needed basis when a
significant event occurs. When necessary, the Corporate Auditors shall be entitled
to request reports from the Directors and employees (including from Directors and
employees 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 the Business Unit Management Board meetings. Directors shall
provide details of the agenda items of such meetings beforehand for Corporate
Auditors.
C. Corporate Auditors shall at all times have the right to review the minutes of
important meetings, documents of approval, etc.
36

To ensure the effectiveness of auditing activities, Directors shall ensure
opportunities for Corporate Auditors to exchange information and opinions regularly
with members of the Internal Auditing Division of the Company and with the
Independent Auditor.
The corporate governance system of the Company is shown in the chart below.
37
4. 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 Group, and other tangible and intangible
management resources thereof, potential effects of forward-looking measures and other
items that constitute the Group's corporate value, and must enable to maintain and
enhance the Group's corporate value as well as the common interests of shareholders
continuously and sustainably.
Upon facing a proposal of large-scale share purchases, the Company is not always
in a position to automatically object to a so-called hostile takeover, which is pursued
without approval from the Board of Directors (hereinafter referred to as the “Board”)
provided that such takeover is intended to contribute to the enhancement of 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 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 share
purchases that would not contribute to the enhancement of the corporate value and the
common 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 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 have an understanding of the source of the Group's corporate value and have the
capability to maintain 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 in place a framework for preventing large-scale share purchases that would
undermine the Group's corporate value and the common interests of shareholders.
38

A. Special Measures Contributing to Realization of the Basic Policy
In its “Long-Term Vision 2015”, the Company sets out its aim to grow as an
enterprise with a trusted reputation for global quality that transforms the bounty of
nature into emotionally inspiring foods and beverages. Measures set forth in
“Medium-Term Management Plan 2012” in order to achieve this aim got underway
in earnest in 2010.
“Medium-Term Management Plan 2012” targets further enhancement of the
Company’s strengths in craftsmanship as a means of boosting corporate value; in
addition, it also looks to raise quality in all aspects of business – from products, to
management, to human resources – to world class levels and to raise the
profitability of existing businesses in order to develop a new growth path.
Meanwhile, the Company has adopted “Share the Kando” as its Corporate
Brand Statement, underlining its commitment to clearly define the value that the
Group delivers to customers and to society as a whole.
The Company is convinced that by diligently implementing “Medium-Term
Management Plan 2012” in pursuit of the goals of “Long-Term Vision 2015”, and
therefore, by successfully delivering the value called for by the Corporate Brand
Statement based on the raison d’être engrained in the Group’s corporate philosophy,
it can significantly strengthen the relationship of trust between the Group and its
stakeholders, and in addition, can secure and enhance corporate value, and thus, the
common interests of shareholders.
Furthermore, the Company also plans to further strengthen its corporate
governance in the execution of the above-mentioned measures.
By introducing a corporate officer (Sikko-Yakuin) system on March 30, 2000,
the Company separated the management decision-making and execution functions
with a view to speeding up execution of business decisions and endeavored to
strengthen the supervisory function of the Board. In addition, the Company
operates a system that facilitates checks by outside directors/auditors by electing
Outside Directors/Corporate Auditors and by establishing the “Nomination
Committee” and the “Compensation Committee,” both including Outside Directors
as their members, as a sub-body of the Board.
In order to further clarify the accountability of the management to shareholders,
the Company shortened the term of office of its directors from two years to one
year at the 83rd Annual General Meeting of Shareholders held on March 27, 2007.
39
B. Efforts to prevent decisions on the Company’s financial and business policy
from being controlled by any person who is inappropriate according to the
basic policy (plan against large-scale purchase of shares in the Company)
With the approval at the meeting of the Board held on February 8, 2010, the
Company resolved to update its countermeasures against large-scale purchases of
the shares in the company (hereinafter, “the Plan”) in light of the fundamental
approach to corporate control as set forth in above, and the updated
Plan was approved at the 86th Annual General Meeting of Shareholders held on
March 26, 2010.
The Plan shall be applicable to any of the following two types of Purchase(s).
i) A purchase of shares in the Company as a result of which the holder’s
(shareholder’s) holding ratio will rise to 20% or more of the total outstanding
shares in the Company; and
ii) 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
of commencement of the Purchase a statement of intent containing a written pledge
to follow the procedures set forth in the Plan in conducting the Purchase. Thereafter,
the Purchaser shall be requested to provide, in a format set forth by the Company, a
Purchase Prospectus containing the information necessary to evaluate the content
of the Purchase. The Company shall present the content of the Purchase Prospectus
to the Independent Committee whose members shall consist of Outside Directors,
Outside Corporate Auditors and/or experts, all of whom are independent of
management of the Company. The content shall be assessed 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, negotiate with the Purchaser, and disclose 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, request the Purchaser to submit
additional information within an appropriate period of time as designated by the
Independent Committee. In this event, the Purchaser shall submit such additional
information within the period of time provided.
40
The Independent Committee will make recommendations to the Board to
execute the Plan to allot gratis the Stock Acquisition Rights (as defined in the Plan)
to shareholders of the Company if the Independent Committee has determined that
the Purchase meets either of the requirements for exercise of the Plan and it 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. In the event that the Independent Committee cannot
easily determine whether or not the Purchase as set forth in the Plan (a) could cause
obvious damage to the Company’s corporate value and the common interests of
shareholders; (b) could result in implementation of a coercive two-tier purchase
method or any other method by which the shareholders could be forced to sell their
shares; or (c) would be notably inadequate or inappropriate in light of the
fundamental value of the Company, said Independent Committee may attach an
opinion to its recommendation that the will of the shareholders concerning
execution of the gratis Allotment of the Stock Acquisition Rights should be
confirmed at a shareholders’ meeting. These Stock Acquisition Rights shall entitle
their holders to acquire one share of the common stock in the Company by
exercising the rights at a price to be determined by the Company’s Board - which
shall be set at a level between a minimum of one (1) yen and a maximum of onehalf the market value per share of the Company’s stock. In addition, these rights
shall contain conditions that exclude the Purchaser from exercising the rights and
shall also be accompanied by provisions that enable the Company to acquire one
(1) Stock Acquisition Right in exchange for one (1) share of the Company’s stock
from persons other than the Purchaser.
While paying utmost respect to the recommendation made by the Independent
Committee as stated above, the Company’s Board shall, as the organizational body
authorized to do so under the Companies Act, promptly decide whether or not to
execute the gratis Allotment of the Stock Acquisition Rights. In the event that the
Board deems confirmation of the will of the shareholders to be appropriate and
convenes a shareholders’ meeting for this purpose, the Board shall, as the
authorized body as described above and in accordance with the resolution of said
meeting, issue a resolution concerning execution or non-execution of the gratis
Allotment of the Stock Acquisition Rights.
The Plan shall be effective from the close of the 86th Annual General Meeting
of Shareholders held on March 26, 2010 until the close of the Company’s annual
general meeting of shareholders that concerns the last one of the Company’s
business years that end within three years from the close of the 86th Meeting.
41
Notwithstanding the above, the Company may abrogate the Plan even before
the effective period expires upon a decision thereof by the Board. Also, the Board
may amend or alter the Plan during its effective period subject to approval by the
Independent Committee.
Under the Plan, shareholders of the Company remain directly and specifically
unaffected unless and until the gratis Allotment of the Stock Acquisition Rights is
executed. On the other hand, if the Plan is set in motion and a gratis Allotment of
the Stock Acquisition Rights is executed, the shares held by a shareholder of 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 shares in the Company).
therefor>
The special measures intended to contribute to realization of the Basic Polices
described above in A of
policy> conform to the basic policy of the Company as described above, are fully
compatible with the corporate value and the common interests of shareholders of the
Company, and are never implemented for the purpose of maintaining the status of
Directors and Corporate Auditors of the Company.
The following elements having been taken into consideration and incorporated into
the design of the Plan described above in B of
realization of the basic policy>, the Board of the Company believes that the Plan
conforms to the basic policy of the Company as described above and meets the
corporate value and the common interests of shareholders of the Company and that it is
never for the purpose of maintaining the status of Directors and Corporate Auditors of
the Company.
A. Respect for Shareholders’ Will
• The Plan was approved at the 86th Annual General Meeting of Shareholders held on
March 26, 2010.
• The effective period of the Plan is limited, running until the close of the Company’s
annual general meeting of shareholders that concerns the last one of the Company’s
business years that end within three years from the close of the above annual
general meeting of shareholders.
• The term of office of Directors is one year, allowing the shareholders to have their
intentions reflected through elections of Directors every year.
42
B. Respect for Judgment of Outside Parties with High Degree of Independence
and Information Disclosure
In updating the Plan, the Company has established the Independent Committee
as a body to make a substantial judgment objectively with regard to 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 consisting of 3 or more are appointed 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 has been made, the Independent Committee shall offer a
recommendation as to whether or not the Purchase would damage the Company’s
corporate value and the common interests of shareholders, as stated above. Then,
the Board shall honor the Independent Committee’s recommendation and
subsequently make a 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 be handled in a transparent manner within the limits necessary for
contributing to the enhancement of the Company’s corporate value and the
common interests of shareholders.
C. Setting of Reasonable and Objective Conditions
The Plan is designed in ways not to be triggered unless and until reasonable
and objective conditions are met, and ensures a structure to eliminate arbitrary
triggering by the Board.
43
CONSOLIDATED BALANCE SHEETS
Million yen
As of December 31,
2010
(Reference)
As of December 31,
2009
ASSETS
Current assets:
Cash and deposits 11,534 19,583
Notes and accounts receivable 274,379 274,558
Inventories 95,358 97,442
Deferred tax assets 14,622 11,175
Other current assets 30,842 32,952
Allowance for doubtful accounts (5,685) (7,665)
Total current assets 421,052 428,047
Fixed assets:
Tangible fixed assets:
Buildings and structures 173,729 189,152
Machinery, equipment and vehicles 131,522 160,924
Tools, furniture and fixtures 47,548 48,929
Land 182,569 184,433
Lease assets 14,920 9,142
Construction in progress 6,714 6,382
Other tangible fixed assets 95 142
Total tangible fixed assets 557,100 599,108
Intangible fixed assets:
Goodwill 84,172 100,314
Other intangible fixed assets 37,640 40,427
Total intangible fixed assets 121,812 140,741
Investments and other assets:
Investment securities 235,685 206,364
Long-term loans receivable 6,602 4,975
Long-term prepaid expenses 8,611 10,730
Deferred tax assets 30,450 21,021
Other investments 29,942 26,995
Allowance for doubtful accounts (5,900) (4,332)
Total investments and other assets 305,392 265,755
Total fixed assets 984,305 1,005,605
Total assets 1,405,358 1,433,652
44
CONSOLIDATED BALANCE SHEETS
Million yen
As of December 31,
2010
(Reference)
As of December 31,
2009
LIABILITIES AND NET ASSETS
LIABILITIES
Current liabilities:
Notes and trade accounts payable 102,948 100,998
Short-term borrowings 69,259 141,220
Bonds due within one year 15,000 15,000
Lease obligations 4,011 2,031
Alcohol tax payable 119,338 123,470
Consumption taxes payable 8,583 8,914
Income taxes payable 32,493 24,096
Other accounts payable 52,560 49,836
Accrued expenses 56,460 52,462
Deposits received 19,609 20,429
Commercial paper 14,000 30,000
Allowance for employees’ bonuses 2,817 2,559
Other current liabilities 2,789 2,761
Total current liabilities 499,874 573,780
Long-term liabilities:
Bonds 135,144 130,156
Long-term borrowings 78,019 75,499
Lease obligations 12,163 7,341
Allowance for employees’ severance and retirement benefits 24,738 24,252
Allowance for retirement benefits for directors and corporate
auditors 597 602
Deferred tax liabilities 4,831 4,860
Other long-term liabilities 37,318 39,457
Total long-term liabilities 292,813 282,169
Total liabilities 792,688 855,949
45
CONSOLIDATED BALANCE SHEETS
Million yen
As of December 31,
2010
(Reference)
As of December 31,
2009
NET ASSETS
Shareholders’ equity:
Capital stock 182,531 182,531
Capital surplus 150,910 151,048
Retained earnings 295,228 252,146
Treasury stock (28,721) (29,283)
Total shareholders’ equity 599,948 556,443
Valuation and translation adjustments:
Valuation difference on available-for-sale securities 198 2,444
Deferred gains or losses on hedges 693 (6)
Foreign currency translation adjustment 11,351 14,591
Total valuation and translation adjustments 12,243 17,029
Minority interests 478 4,229
Total net assets 612,670 577,702
Total liabilities and net assets 1,405,358 1,433,652
46
CONSOLIDATED STATEMENTS OF INCOME
Million yen
For the year ended
December 31, 2010
(Reference)
For the year ended
December 31, 2009
Net sales 1,489,460 1,472,468
Cost of sales 943,323 958,444
Gross profit 564,137 514,024
Selling, general and administrative expenses 450,787 431,247
Operating income 95,349 82,777
Non-operating income: 13,178 15,943
Interest income 314 328
Dividend income 1,389 2,426
Equity in net income of non-consolidated subsidiaries and
affiliated companies 9,846 8,512
Foreign exchange gains — 1,814
Other non-operating income 1,627 2,860
Non-operating expenses: 7,384 8,173
Interest expenses 4,328 4,628
Other non-operating expenses 3,056 3,544
Recurring profit 101,142 90,546
Extraordinary gains: 36,067 19,558
Gain on sales of fixed assets 653 778
Gain on sales of investment securities 1,738 388
Gain on sales of subsidiaries and affiliates' stocks 32,336 16,090
Reversal of allowance for doubtful accounts 179 478
Gain on change in equity 726 912
Compensation for recall — 910
Other extraordinary gains 432 —
Extraordinary losses: 44,744 22,027
Loss on sales and disposal of fixed assets 5,991 9,954
Loss on sales of investment securities 1,068 487
Loss on devaluation of investment securities 1,004 788
Loss on liquidation of subsidiaries and affiliates 1,265 —
Impairment loss on fixed assets 13,573 8,317
Loss on factory restructurings 19,780 —
Loss on contribution of securities to retirement benefit trust — 1,401
Other extraordinary losses 2,061 1,077
Income before income taxes and minority interests 92,464 88,077
Income taxes-current 53,547 42,369
Income taxes-deferred (12,625) (898)
Minority interests in net gains (losses) of non-consolidated
subsidiaries (1,536) (1,037)
Net income 53,080 47,644
47
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
For the year ended December 31, 2010 Million yen
Shareholders' equity
Capital stock Capital surplus Retained earnings Treasury stock
Total
shareholders'
equity
Balance as of Dec. 31, 2009 182,531 151,048 252,146 (29,283) 556,443
Changes during the term
Dividends (9,999) (9,999)
Net income (loss) 53,080 53,080
Acquisition of treasury stock (22) (22)
Disposal of treasury stock (138) 584 446
Change of scope of equity
method 14 14
Change resulting from merger
of non-consolidated subsidiary (12) (12)
Other changes in nonshareholders' equity items
during the term (net)
Total changes during the term — (138) 43,081 561 43,505
Balance as of Dec. 31, 2010 182,531 150,910 295,228 (28,721) 599,948
Valuation and translation adjustments
Minority
interests
Total
net assets
Valuation
difference on
available-forsale securities
Deferred gains or
losses on hedges
Foreign currency
translation
adjustments
Total valuation
and translation
adjustments
Balance as of Dec. 31, 2009 2,444 (6) 14,591 17,029 4,229 577,702
Changes during the term
Dividends (9,999)
Net income (loss) 53,080
Acquisition of treasury stock (22)
Disposal of treasury stock 446
Change of scope of equity
method 14
Change resulting from merger
of non-consolidated subsidiary (12)
Other changes in nonshareholders' equity items
during the term (net) (2,246) 700 (3,240) (4,786) (3,751) (8,537)
Total changes during the term (2,246) 700 (3,240) (4,786) (3,751) 34,967
Balance as of Dec. 31, 2010 198 693 11,351 12,243 478 612,670
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Basis for Preparation of Consolidated Financial Statements
(1) Items in the scope of the consolidation
A. Number of consolidated subsidiaries: 51
Principal consolidated subsidiaries
Please see Item 1 of the “Business Report” {“Overview of Operations of Asahi Group,
section (7) “Principal Subsidiaries”}, for a summary of the current status of principal
consolidated subsidiaries.
The companies removed from the scope of consolidation during the fiscal year under
review were Asahi Breweries Insurance Services, West Japan Asahi Draft Beer Service,
Ltd., Nikka Seidaru Co. Ltd., and N.S. CARGO Inc.
B. Principal non-consolidated subsidiaries:
DEMBALL LIMITED
Rationale for exclusion from the scope of consolidation:
The non-consolidated subsidiaries including the one mentioned above are all small in
terms of total assets, sales, net profit or loss, and retained earnings (amount
corresponding to equity ownership); they have no material impact as a whole on the
consolidated financial statements and are thus excluded from the scope of consolidation.
(2) Items concerning application of the equity method
A. Number of companies subject to application of the equity method: 41
Non-consolidated subsidiary subject to application of the equity method: 1
Asahi Beer Engineering Co., Ltd.
Affiliates subject to application of the equity method: 40
These include Asahi Business Solutions Corp., Shenzhen Tsingtao Beer Asahi Co., Ltd.,
Asahi & Mercuries Co., Ltd., Tsingtao Brewery Co., Ltd., China Foods Investment
Corp., Jiangsu Shengguo Wine Co. Ltd, Tingyi-Asahi Beverages Holding Co., Ltd. and
33 other affiliated companies.
Companies that became subject to application of the equity method in the fiscal year
under review were as follows: five affiliates of Tingyi-Asahi Beverages Holding Co.,
Ltd. and China Foods Investment Corp. due to their incorporation; and Jiangsu
Shengguo Wine Co. Ltd. following an increase in its materiality.
B. Principal non-consolidated subsidiaries and affiliates not subject to application of the equity
method
49
Non-consolidated subsidiaries: DEMBALL LIMITED
Affiliates: Asahi Business Produce Co., Ltd.
Rationale for not applying the equity method to the non-consolidated subsidiaries and
affiliates:
The companies in question have extremely slight impact on net profit or loss and
retained 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 is
different 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 the
consolidated balance sheet date (related valuation differences are directly
charged or credited to net assets, and the cost of securities sold is computed by
the moving-average method).
Securities without market value
Stated at cost based on the moving-average method.
2) Valuation basis and method for derivatives:
Market price method
3) Valuation basis and method for inventories:
Merchandise, finished goods and semi-finished goods are stated at cost determined
mainly by the weighted-average method (write-downs to net selling value regarded as
decreased profitability).
Raw materials and supplies are stated at cost determined mainly by the movingaverage method (write-downs to net selling value regarded as decreased profitability).
50
B. Depreciation methods for major assets:
Tangible fixed assets (excluding lease assets):
1) Production facilities of the Company
Assets acquired on or before March 31, 2007: the former straight-line method
Assets acquired on or after April 1, 2007: the straight-line method
2) Other tangible fixed assets of the Company
Assets acquired on or before March 31, 2007: the former declining-balance method
Assets acquired on or after April 1, 2007: the declining-balance method
3) Consolidated subsidiaries
Assets acquired on or before March 31, 2007: mainly the former declining-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
method
Assets acquired on or after April 1, 2007: the straight-line method
The estimated useful lives of tangible fixed assets are based mainly on the same
standards as those specified in the Corporation Tax Act.
Intangible fixed assets (excluding lease assets):
Intangible fixed assets are amortized using the straight-line method.
The estimated useful lives of the assets are based mainly on the same standards as
those specified in the Corporation Tax Act.
Software for internal use is amortized by the straight-line method over a useful life of
5 years. Trademark rights are generally amortized over 20 years using the straight-line
method.
Lease assets:
Finance leases that do not transfer ownership rights are amortized to a residual value
of zero using the straight-line method, with the lease period as the estimated useful
life.
Of the finance leases that do not transfer ownership rights, those that began before
December 31, 2008 are treated similarly as those applied to regular operating leases.
C. Accounting criteria for major allowances:
Allowance for doubtful accounts:
The allowance for doubtful accounts consists of the individually estimated
uncollectible amounts with respect to certain identified doubtful receivables and the
51
amounts calculated using the rate of actual collection losses with respect to the other
receivables.
Allowance for employees’ severance and retirement benefits:
The Company and its consolidated subsidiaries make provisions in the necessary
amount of allowance for employees’ severance and retirement benefits deemed to
have accrued during the term, based on each company’s projected benefit obligations
and the pension fund balance as of the end of the fiscal year under review.
Actuarial gain or loss is amortized, beginning in the year following the year in which
the gain or loss is recognized, by the straight-line method for a given number of years
(generally 10 years) within the employees’ average remaining years of service.
Prior service costs are amortized by the straight-line method within the employees’
average remaining years of service (generally 10 years) from the time they arise.
(Change in accounting policy)
The Company has applied “Partial Amendments to Accounting Standard for
Retirement Benefits (Part3) (ASBJ Statement No. 19 published July 31, 2008)
beginning with the fiscal year under review. This change has had no effect on operating
income, recurring profit and income before income taxes and minority interests.
Allowance for retirement benefits for directors and corporate auditors:
Some of the consolidated subsidiaries calculate the required amount as of the end of
the fiscal year under review, based on internal regulations, in preparation for
payment of retirement benefits to directors and corporate auditors.
Allowance for employees’ bonuses:
An allowance for employees’ bonuses is provided at the estimated amount applicable
to the fiscal year under review.
D. Other significant items associated with the preparation of consolidated financial statements
1) Significant hedge accounting method
a. Hedge accounting method
The Company defers gains or losses on its hedges.
For currency swaps, the Company allocates differences in the values of hedging
instruments when such hedges meet all requirements for such allocations. For interest
rate swaps, the Company applies exceptional treatment when the swap in question meets
the conditions for application of such exceptional treatment.
b. Hedging instruments and hedged items:
Hedging instruments: Currency swaps, foreign exchange contracts and interest rate
swaps
52
Hedged items: Transactions in foreign currencies and interest on borrowings
c. Hedging policy:
Derivative transactions are used to avoid risks associated with fluctuations in foreign
exchange markets and in interest rates and to reduce the costs of financing. It is the
Company’s policy not to engage in speculative transactions that deviate from real
demand 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 the
market values of the hedged items and of the hedging instruments over the entire
period of the hedge. When the Company allocates differences in the values of hedging
instruments or when it accounts for the value of swaps under exceptional treatment,
these determinations allow it to forgo evaluation of the effectiveness of hedges in
these cases.
2) Treatment of consumption taxes
Consumption taxes are mainly excluded from the statements of income, except in the
case of non-deductible consumption taxes related to fixed assets that are charged
when incurred.
(5) Amortization of goodwill
Goodwill is amortized by the straight-line method over a five- to twenty-year period.
(Change in accounting policy)
The Company has applied “Accounting Standard for Business Combinations” (ASBJ
Statement No. 21, published December 26, 2008), “Accounting Standard for Consolidated
Financial Statements” (ASBJ Statement No. 22 published December 26, 2008), “Partial
amendments to Accounting Standard for Research and Development Costs” (ASBJ
Statement No. 23, published December 26, 2008), “Revised Accounting Standard for
Business Divestitures” (ASBJ Statement No. 7, revised December 26, 2008), “Revised
Accounting Standard for Equity Method of Accounting for Investments” (ASBJ Statement
No. 16 revised, December 26, 2008), and “Revised Guidance on Accounting Standard for
Business Combinations and Accounting Standard for Business Divestitures” (ASBJ
Guidance No. 10, revised December 26, 2008) beginning with the fiscal year under review.
53
2. Notes to the Consolidated Balance Sheets
(1) Pledged assets and secured liabilities
The following assets have been provided as collateral for short-term borrowings of ¥3,855
million and long-term borrowings of ¥244 million:
Buildings and structures: ¥6,128 million
Machinery, equipment and vehicles: ¥405 million
Land: ¥16,057 million
Total ¥22,591 million
(2) Accumulated depreciation of tangible fixed assets: ¥661,887 million
(3) Contingent liabilities
Guarantees: ¥650 million
Notes discounted: ¥87 million
(4) Matured notes at term-end
The balance sheet date for the term fell on a bank holiday, and trade notes with maturity on
the balance sheet date were cleared on the clearing houses the next business day. Current
assets and current liabilities thus respectively include notes receivable and notes payable
with maturity on the balance sheet date as follows:
Notes receivable: ¥1,310 million
Notes payable: ¥513 million
54
3. Notes to the Consolidated Statements of Income
(1) Non-operating expenses
Among non-operating expenses, “Other non-operating expenses” include goodwill
amortization costs of ¥424 million arising in relation to the holding company of a Group
affiliate accounted for by the equity method.
(2) Impairment losses on fixed assets
In the fiscal year under review, the Group (the Company and its consolidated subsidiaries)
recognized impairment losses in the following asset groups:
Use of asset Location of asset Type of asset
Leased asset Takatsuki, Osaka Prefecture and one other Buildings, structures and land
Others ― Goodwill
The Group divides their respective assets, in principle, by individual breweries, plants and
other business establishments and determines their groupings based on complementary
relations of cash flows among the various assets. At the same time, however, the Company
and its group companies count each of the individual leased assets and idle assets as a standalone asset group. Headquarters buildings and employee welfare facilities of the Company
and its group companies are categorized as common-use assets, as they do not generate cash
flows on their own.
An impairment loss (¥366 million for buildings and structures, ¥1,229 million for land, and
¥11,977 million for goodwill) was recorded as an extraordinary loss corresponding to the
differences between the recoverable amounts and book values of certain assets. These
differences arose, because: (a) the market value of certain leased assets declined
substantially below book value, prompting the Group to recognize certain amounts invested
as unrecoverable; and (b) a portion of the goodwill booked in the Group’s soft drinks and
food businesses was deemed unrecoverable after a review of the business plan was
undertaken.
The recoverable amount is estimated using the net sales amount or utility value, with the net
sales amount calculated based on the appraised real estate value and the utility value
calculated using a discount rate of between 4.3% and 7.3% on future cash flows.
55
4. Notes to the Consolidated Statements of Changes in Net Assets
(1) Total number of the issued shares as of the end of the fiscal year under review
Common stock
As of the end of the fiscal year (Dec. 31, 2010): 483,585,862 shares
(2) Dividends from surplus distributed during the fiscal year under review
A. It was resolved at the 86th Annual General Meeting of Shareholders of March 26, 2010 as
follows:
Item related to dividends on common stock
Total amount of dividends: ¥5,115 million
Dividend per share: ¥11.00
Record date: December 31, 2009
Effective date: March 29, 2010
B. It was resolved at the Board of Directors Meeting of July 30, 2010 as follows:
Item related to interim dividends on common stock
Total amount of interim dividends: ¥4,884 million
Interim dividend per share: ¥10.50
Record date: June 30, 2010
Effective date: September 1, 2010
(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 87th Annual General
Meeting of Shareholders scheduled for March 25, 2011.
Item related to dividends on common stock
Source of dividends: Retained earnings
Total amount of dividends: ¥5,817 million
Dividend per share: ¥12.50
Record date: December 31, 2010
Effective date: March 28, 2011
(4) Number of shares subject to stock acquisition rights upon exercise thereof
(as of December 31, 2010)
The First Issue of stock acquisition rights (issued March 28, 2003)
Number of stock acquisition rights: 88
Class and number of shares subject to the stock acquisition rights:
88,000 shares of common stock
Amount to be paid in per share upon exercise of the stock acquisition rights: ¥830
Exercise period: March 28, 2005 to March 27, 2013
56
The Second Issue of stock acquisition rights (issued March 30, 2004)
Number of stock acquisition rights: 4,845
Class and number of shares subject to the stock acquisition rights:
484,500 shares of common stock
Amount to be paid in per share upon exercise of the stock acquisition rights: ¥1,205
Exercise period: March 30, 2006 to March 29, 2014
The Third Issue of stock acquisition rights (issued March 30, 2005)
Number of stock acquisition rights: 5,805
Class and number of shares subject to the stock acquisition rights:
580,500 shares of common stock
Amount to be paid in per share upon exercise of the stock acquisition rights: ¥1,374
Exercise period: March 30, 2007 to March 29, 2015
The Fourth Issue of stock acquisition rights (issued March 30, 2006)
Number of stock acquisition rights: 6,190
Class and number of shares subject to the stock acquisition rights:
619,000 shares of common stock
Amount to be paid in per share upon exercise of the stock acquisition rights: ¥1,688
Exercise period: March 30, 2008 to March 29, 2016
57
5. Notes on Financial Instruments
(Additional information)
The Company has applied “Revised Accounting Standard for Financial Instruments” (ASBJ
Statement No.10, revised March 10, 2008) and “Guidance on Disclosures about Fair Value of
Financial Instruments” (ASBJ Guidance No. 19, revised March 10, 2008) beginning with the
fiscal year under review.
(1) Financial instruments
A. Policy on handling of financial instruments
The Company and its principal consolidated subsidiaries procure necessary funds via loans
from financial institutions and by issuing commercial paper and bonds while taking into
account the changing business environment. In doing so, the Company and its principal
consolidated subsidiaries consider direct or indirect financing as well as the balance between
short and long-term debt based on fund procurement costs, risk diversification. Looking to
use funds efficiently, the Group introduced a cash management system among the Company
and its principal domestic consolidated subsidiaries to reduce consolidated interest-bearing
debt. If surplus funds are generated temporarily, as a result, the Company invests it in safe
financial instruments.
The Company’s policy is to use derivatives trading only to hedge risks to be discussed later
but not for speculation.
B. Details of financial instruments and risks
Trade receivables, including notes and accounts receivable and long-term loans receivable,
are exposed to client credit risks. Additionally, foreign currency-based trade receivables are
exposed to currency fluctuation risk as well.
Investment securities include equity interests in business partners and bonds to be held to
maturity and are thus exposed to risks of the stock or bond issuer (i.e., the business partner)
as well as market price fluctuation risk. Of these, foreign currency-based investment
securities are exposed to currency fluctuation risk as well.
Trade payables, including notes and trade accounts payable and other accounts payable,
generally have a due date of one year or less. Foreign currency-based trade payables are
exposed to currency fluctuation risk as well.
Commercial paper, borrowings, and bonds are exposed to liquidity risk (i.e., the risk of
being unable to make payment on the due date due to deterioration in the funds procurement
environment). Some of the Company’s borrowings are based on variable interest rates, for
which the Company hedges risks using interest rate swaps. Foreign currency-based
borrowings are exposed to currency fluctuation risk as well.
Derivatives trades include foreign exchange contracts to hedge against foreign exchange
58
fluctuation risks related to foreign-currency based receivables and payables, interest rate
swap transactions to hedge against interest rate risks on borrowings, and commodity swap
transactions to hedge against price fluctuation risks when overseas subsidiaries procure raw
materials.
For hedging instruments, hedged items, hedging policy, and method of evaluating the
effectiveness of the hedging for the hedge accounting, please see “Significant hedge
accounting method” within “Significant accounting policies” discussed earlier.
C. Risk management system relating to financial instruments
1) Credit risk management (managing risks related to business partners not fulfilling
contract obligations)
In accordance with accounting rules, guidelines on handling accounting operations, and
accounts receivable management rules, each business division or sales management division
regularly monitors trade receivables and long-term loans to major business partners. The
above divisions also routinely check the management status of deadlines and balances for
each business partner. In collaboration with each of the sales divisions, the Company’s
Finance Department monitors non-performing assets and their collection status.
Consolidated subsidiaries also manage their trading according to the Company’s rules and
guidelines to minimize credit risks.
When executing derivatives transactions, the Company as a rule limits its transactions to
financial institutions with high credit ratings to minimize credit risk.
2) Managing market risks (foreign exchange and interest rate fluctuation risks)
Looking to reduce foreign exchange fluctuation risks on future foreign currency-based
cash flows which the Company has ascertained for specific currencies, the Company has
established a currency hedging policy which primarily uses currency forward contracts
based on the current status and future outlook of the foreign exchange market. The
transactions are being carried out with the approval of the Executives in charge of finance.
The Company also engages in interest rate swap transactions to avoid interest rate
fluctuation risks relating to borrowings.
For investment securities, the Company regularly monitors their market values and
financial status of the issuers (the Company’s business partners). This is to review the
Company’s holdings on a consistent basis based on its relationship with business partners.
The Finance Department engages in derivatives transactions in accordance with the
derivatives transaction management rules which stipulate the transaction policy and trading
authority. Each execution is reported to the Executives in charge of finance. Consolidated
subsidiaries also manage their trading according to the Company’s rules.
59
3) Managing liquidity risk related to funds procurement (risk of being unable to make
payment on the due date)
Since the Company and its principal domestic consolidated subsidiaries have introduced
the cash management system, the Company manages liquidity risks of those companies
participating in this system.
Based on reports from each Department and each company, the Company’s Finance
Department manages liquidity risk by creating and updating its cash management plan as
necessary and by engaging in efficient fund procurement while reducing short-term liquidity.
(2) Market value of financial instruments
Million yen
Amounts
recorded on the
consolidated
balance sheets
Market value Difference
(1) Cash and deposits 11,534 11,534 —
(2) Notes and accounts receivable 274,379
Allowance for doubtful accounts (*1) (5,329)
Notes and accounts receivable (net) 269,049 269,049 —
(3) Investment securities
A. Shares in affiliates 72,290 117,400 45,110
B. Held-to-maturity debt securities 501 509 7
C. Other securities 65,787 65,787 —
(4) Long-term loans receivable (*2) 6,989
Allowance for doubtful accounts(*3) (3,022)
Long-term loans receivable (net) 3,967 3,977 10
Total assets 423,130 468,259 45,128
(1) Notes and trade accounts payable 102,948 102,948 —
(2) Short-term borrowings 60,105 60,105 —
(3) Other accounts payable 52,560 52,560 —
(4) Deposits received 19,609 19,609 —
(5) Commercial paper 14,000 14,000 —
(6) Bonds (*4) 150,144 152,925 2,781
(7) Long-term borrowings (*5) 87,173 88,065 891
(8) Lease obligations (*6) 16,174 16,850 675
Total liabilities 502,717 507,065 4,347
Derivatives (*7) 1,042 1,042 —
(*1) Allowances for doubtful accounts recorded under notes and accounts receivable are excluded.
(*2) Long-term loans receivable within one year are included.
(*3) Allowances for doubtful accounts recorded individually under long-term loans receivable are
excluded.
(*4) Bonds due within one year are included.
(*5) Long-term borrowings due within one year are included.
(*6) Lease obligations (current liabilities) are included.
(*7) The net amount of receivables and payables accrued from derivatives transactions are indicated.
Note 1. Calculation methods for deriving market values of financial instruments, items relating
to securities and derivatives transactions
60
Assets
(1) Cash and deposits (2) Notes and accounts receivable
Book value is used because these items are settled in a short time, making their market
value about equivalent to their book value.
(3) Investment securities
Market value at financial instruments exchange is used for stock, whereas the value
indicated by the financial institution with which the Company does business is used for
debt securities and others.
(4) Long-term loans receivable
The market value of long-term loans receivable is calculated by discounting the expected
value of principal and interest receivable by the interest rate expected if a similar new
loan were to be issued.
Liabilities
(1) Notes and trade accounts payable, (2) Short-term borrowings, (3) Other accounts payable,
(4) Deposits received, and (5) Commercial paper
Book value is used because these items are settled in a short time, making their market
value about equivalent to their book value.
(6) Bonds
For bonds the Company issues, market price is used for those that have a market value
and the price indicated by financial institutions with which the Company does business is
used for those without market value.
(7) Long-term borrowings
The market value of long-term borrowings is calculated by taking the total amount of
principal and interest and discounting it by the interest rate expected if a new borrowing
were to be taken out, thereby deriving the present value. Long-term borrowings with
variable interest rates are subject to exceptional treatment using interest rate swaps.
These are calculated by discounting the total amount of principal and interest involved in
the interest rate swap concerned by the interest rate deemed appropriate if a similar
borrowing were to be taken out.
(8) Lease obligations
The market value of lease obligations is calculated by taking the present value of the
obligation concerned – discounting the total amount of principal and interest by the
interest rate expected if a similar, new lease obligation were to be incurred.
Derivatives transactions
The Company considers the price indicated by the financial institution with which it does
business as the market value. However, since derivatives transactions subject to exceptional
treatment using interest rate swaps are processed as part of long-term borrowings subject to
hedging, the market value of these derivative transactions are recorded as part of the market
value of the long-term borrowings concerned.
Note 2. Of the other securities and securities of affiliates, those that are unlisted (¥97,106
million recorded on the consolidated balance sheets) do not have a market price and
estimating future cash flow is not possible. The Company thus considers that deriving
their market value as being extremely difficult and thus does not include these
securities under (3) Investment securities.
61
6. Per share information
(1) Net assets per share: ¥1,315.51
(2) Net income per share: ¥114.10
7. Other notes
Figures in amounts of less than one million yen are omitted.
62
Reference: CONSOLIDATED STATEMENTS OF CASH FLOWS (Summary)
Million yen
For the year ended
December 31, 2010
For the year ended
December 31, 2009
Cash flows from operating activities:
Income before income taxes and minority interests 92,464 88,077
Depreciation 59,709 58,372
Amortization of goodwill 5,931 5,287
Increase (decrease) in allowance for employees' severance
and retirement benefits 2,141 765
Increase (decrease) in allowance for doubtful accounts (233) (753)
Decrease (increase) in trade receivables (255) (891)
Decrease (increase) in inventories 1,716 5,042
Increase (decrease) in trade payables 2,255 (2,820)
Increase (decrease) in alcohol tax payable (4,128) (4,909)
Other cash flows from operating activities 5,633 (1,941)
Subtotal 165,234 146,229
Interest and dividend income received 6,964 7,162
Interest expenses paid (4,090) (4,605)
Income taxes paid (42,499) (42,428)
Net cash provided by operating activities 125,608 106,358
Cash flows from investing activities:
Purchase of fixed assets (30,145) (58,537)
Purchase of investment securities (50,264) (82,837)
Proceeds from sales of investment securities 46,488 39,329
Purchase of investments in subsidiaries (2,920) (15,362)
Payments for transfer of business (5,339) —
Purchase of investments in subsidiaries resulting in change in
scope of consolidation — (60,043)
Other cash flows from investing activities 390 (3,185)
Net cash used in investing activities (41,790) (180,637)
Cash flows from financing activities:
Increase (decrease) in financial liabilities (78,412) 88,876
Purchase of treasury stock (22) (31)
Cash dividends paid (9,999) (9,529)
Other cash flows from financing activities (2,393) (770)
Net cash provided by (used in) financing activities (90,828) 78,545
63
Reference: CONSOLIDATED STATEMENTS OF CASH FLOWS (Summary)
Million yen
For the year ended
December 31, 2010
For the year ended
December 31, 2009
Effect of exchange rate change on cash and cash equivalents (261) 643
Net increase (decrease) in cash and cash equivalents (7,271) 4,908
Cash and cash equivalents at beginning of year 18,082 12,697
Increase in cash and cash equivalents due to change in scope
of consolidation — 475
Increase in cash and cash equivalents resulting from merger
with non-consolidated subsidiaries 2 —
Cash and cash equivalents at end of year 10,813 18,082
64
NON-CONSOLIDATED BALANCE SHEETS
Million yen
As of December 31,
2010
(Reference)
As of December 31,
2009
ASSETS
Current assets:
Cash and deposits 3,696 4,749
Notes receivable 3,040 3,160
Accounts receivable 180,353 185,724
Merchandise and finished goods 9,672 7,985
Semi-finished goods 7,325 8,076
Raw materials 14,188 15,881
Supplies 4,546 4,414
Short-term loans receivable 21,643 16,093
Prepaid expenses 10,096 9,791
Deferred tax assets 6,964 7,439
Other current assets 8,674 6,634
Allowance for doubtful accounts (4,634) (5,894)
Total current assets 265,569 264,058
Fixed assets:
Tangible fixed assets:
Buildings 112,552 127,332
Structures 14,616 17,128
Machinery and equipment 91,969 117,859
Vehicles 13 23
Tools, furniture and fixtures 40,069 41,312
Land 126,074 127,692
Lease assets 538 487
Construction in progress 1,363 3,041
Total tangible fixed assets 387,198 434,878
Intangible fixed assets:
Rights to use of facilities 517 576
Trademark rights 17,652 18,615
Software 6,858 7,661
Lease assets 17 22
Other intangible fixed assets 9 6
Total intangible fixed assets 25,055 26,882
65
NON-CONSOLIDATED BALANCE SHEETS
Million yen
As of December 31,
2010
(Reference)
As of December 31,
2009
Investments and other assets:
Investment securities 73,253 81,002
Shares in affiliates 293,751 307,796
Capital invested in affiliates 5,219 4,244
Long-term loans receivable 8,816 7,797
Deferred tax assets 19,389 6,985
Prepaid pension cost 12,626 —
Other investments 16,249 27,515
Allowance for doubtful accounts (6,804) (5,301)
Total investments and other assets 422,501 430,040
Total fixed assets 834,755 891,802
Total assets 1,100,325 1,155,860
66
NON-CONSOLIDATED BALANCE SHEETS
Million yen
As of December 31,
2010
(Reference)
As of December 31,
2009
LIABILITIES AND NET ASSETS
LIABILITIES
Current liabilities:
Trade accounts payable 55,718 54,939
Short-term borrowings 42,500 106,700
Bonds due within one year 15,000 15,000
Lease obligations 219 167
Other accounts payable 4,819 7,944
Alcohol tax payable 110,271 114,708
Consumption taxes payable 6,545 6,740
Income taxes payable 16,927 12,050
Accrued expenses 42,215 39,071
Deposits received 33,010 30,664
Commercial paper 14,000 30,000
Allowance for employees’ bonuses 1,375 1,278
Allowance for directors’ and corporate auditors’ bonuses 121 108
Other current liabilities 326 370
Total current liabilities 343,051 419,742
Long-term liabilities:
Bonds 135,144 130,156
Long-term borrowings 71,200 61,000
Lease obligations 366 370
Long-term deposits received 33,317 33,726
Allowance for employees’ severance and retirement benefits 2,809 2,907
Other long-term liabilities 208 386
Total long-term liabilities 243,047 228,547
Total liabilities 586,098 648,290
67
NON-CONSOLIDATED BALANCE SHEETS
Million yen
As of December 31,
2010
(Reference)
As of December 31,
2009
NET ASSETS
Shareholders’ equity:
Capital stock 182,531 182,531
Capital surplus 159,927 160,066
Capital reserve 130,292 130,292
Other capital surplus 29,635 29,773
Retained earnings 199,034 191,372
Other retained earnings 199,034 191,372
Reserve for reduction in entry of fixed assets 946 1,065
General reserve 175,000 155,000
Retained earnings carried forward 23,087 35,306
Treasury stock (28,721) (29,283)
Total shareholders’ equity 512,771 504,686
Valuation and translation adjustments:
Valuation difference on available-for-sale securities 761 2,882
Deferred gains or losses on hedges 693 —
Total valuation and translation adjustments 1,455 2,882
Total net assets 514,226 507,569
Total liabilities and net assets 1,100,325 1,155,860
68
NON-CONSOLIDATED STATEMENTS OF INCOME
Million yen
For the year ended
December 31, 2010
(Reference)
For the year ended
December 31, 2009
Net sales 963,270 985,468
Cost of sales 675,160 702,016
Gross profit 288,110 283,452
Selling, general and administrative expenses 203,369 204,939
Operating income 84,741 78,513
Non-operating income: 4,898 7,009
Interest and dividend income 2,539 3,586
Foreign exchange gains — 1,620
Other non-operating income 2,359 1,802
Non-operating expenses: 4,932 6,219
Interest expenses 2,637 2,955
Other non-operating expenses 2,294 3,263
Recurring profit 84,707 79,303
Extraordinary gains: 2,223 1,711
Gain on sales of fixed assets 17 48
Gain on sales of investment securities 1,653 370
Reversal of allowance for doubtful accounts 309 383
Gain on contribution of securities to retirement benefit trust 242 —
Compensation for recall — 910
Extraordinary losses: 49,039 21,012
Loss on sales and disposal of fixed assets 4,680 7,453
Loss on sales of investment securities 566 88
Loss on devaluation of investment securities 989 706
Loss on devaluation of investment in affiliates 16,678 4,718
Loss on devaluation of equity participation in affiliates 0 3,207
Loss on liquidation of subsidiaries and affiliates 3,409 —
Impairment loss 1,595 3,435
Loss on factory restructurings 19,778 —
Loss on contribution of securities to retirement benefit trust — 1,401
Other extraordinary losses 1,340 —
Income before income taxes 37,892 60,002
Income taxes-current 31,193 28,278
Income taxes-deferred (10,962) 1,688
Net income 17,661 30,036
69
NON-CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
For the year ended December 31, 2010 Million yen
Shareholders' equity
Capital
stock
Capital surplus Retained earnings
Capital reserve Other capital surplus
Total capital
surplus
Other retained earnings
Total
retained
earnings
Reserve for
reduction
in entry of
fixed assets
General reserve
Retained
earnings
carried forward
Balance as of
Dec. 31, 2009 182,531 130,292 29,773 160,066 1,065 155,000 35,306 191,372
Changes
during the term
Dividends (9,999) (9,999)
Net income (loss) 17,661 17,661
Acquisition of
treasury stock
Disposal of
treasury stock (138) (138)
Reversal of reserve
for reduction in
entry of fixed assets (118) 118 —
Provision of general
reserve 20,000 (20,000) —
Other changes in
non-shareholders'
equity items during
the term (net)
Total changes
during the term — — (138) (138) (118) 20,000 (12,219) 7,661
Balance as of
Dec. 31, 2010 182,531 130,292 29,635 159,927 946 175,000 23,087 199,034
Shareholders' equity Valuation and translation adjustments
Total
net assets
Treasury stock
Total
shareholders'
equity
Valuation
difference on
availablefor-sale
securities
Deferred
gains or losses
on hedges
Total valuation
and translation
adjustments
Balance as of
Dec. 31, 2009 (29,283) 504,686 2,882 — 2,882 507,569
Changes
during the term
Dividends (9,999) (9,999)
Net income (loss) 17,661 17,661
Acquisition of
treasury stock (22) (22) (22)
Disposal of
treasury stock 584 446 446
Reversal of reserve
for reduction in
entry of fixed assets — —
Provision of general
reserve — —
Other changes in
non-shareholders'
equity items during
the term (net) (2,120) 693 (1,427) (1,427)
Total changes
during the term 561 8,085 (2,120) 693 (1,427) 6,657
Balance as of
Dec. 31, 2010 (28,721) 512,771 761 693 1,455 514,226
70
NOTES TO THE NON-CONSOLIDATED FINANCIAL STATEMENTS
1. Significant Accounting Policies
(1) Valuation basis and method for securities
Investment in subsidiaries and affiliates:
Stated at cost based on the moving-average method.
Other securities
Securities with market value
Carried at the average market value for the month immediately preceding the balance
sheet date (related valuation differences are directly charged or credited to net assets,
and the cost of securities sold is computed by the moving-average method).
Securities without market value
Stated at cost based on the moving-average method.
(2) Valuation basis and method for derivatives
Market price method
(3) Valuation basis and method for inventories:
Merchandise, finished goods and semi-finished goods are stated at cost determined by the
weighted-average method (write-downs to net selling value regarded as decreased
profitability).
Raw materials and supplies are stated at cost determined by the moving-average method
(write-downs to net selling value regarded as decreased profitability).
(4) Depreciation methods for fixed assets:
Tangible fixed assets (excluding lease assets):
A. Production facilities:
Assets acquired on or before March 31, 2007: the former straight-line method
Assets acquired on or after April 1, 2007: the straight-line method
B. Other tangible fixed assets
Assets acquired on or before March 31, 2007: the former declining-balance method
Assets acquired on or after April 1, 2007: the declining-balance method
Buildings (exclusive of fixtures) acquired on or after April 1, 1998:
Assets acquired on or before March 31, 2007: the former straight-line method
Assets acquired on or after April 1, 2007: the straight-line method
The estimated useful lives of the fixed assets are based on the same standards as those
specified in the Corporation Tax Act.
71
Intangible fixed assets (excluding lease assets):
Intangible fixed assets are amortized using the straight-line method.
The estimated useful lives of the assets are based on the same standards as those
specified in the Corporation Tax Act.
Software for internal use is amortized by the straight-line method over a useful life of 5
years. Trademark rights are generally amortized over 20 years using the straight-line
method.
Lease assets:
Finance leases that do not transfer ownership rights are amortized to a residual value of
zero using the straight-line method, with the lease period as the estimated useful life.
Of the finance leases that do not transfer ownership rights, those that began before
December 31, 2008 are treated similarly as those applied to regular operating leases.
(5) Accounting criteria for allowances:
Allowance for doubtful accounts:
The allowance for doubtful accounts consists of the individually estimated uncollectible
amounts with respect to certain identified doubtful receivables and the amounts
calculated using the rate of actual collection losses with respect to the other receivables.
Allowance for employees’ severance and retirement benefits:
The Company makes provisions in the necessary amount of allowance for employees’
severance and retirement benefits deemed to have accrued during the term, based on the
Company’s projected benefit obligations and the pension fund balance as of the end of
the fiscal year under review.
Actuarial gain or loss is amortized, beginning in the year following the year in which
the gain or loss is recognized, by the straight-line method for a given number of years
(10 years) within the employees’ average remaining years of service.
Prior service costs are amortized by the straight-line method within the employees’
average remaining years of service (10 years) from the time they arise.
(Change in accounting policy)
The Company has applied “Partial Amendments to Accounting Standard for Retirement
Benefits (Part3) (ASBJ Statement No. 19 published July 31, 2008) beginning with the
fiscal year under review. This change has had no effect on operating income, recurring
profit and income before income taxes and minority interests.
Allowance for employees’ bonuses:
An allowance for employees’ bonuses is provided at the estimated amount applicable to
72
the fiscal year under review.
Allowance for directors’ and corporate auditors’ bonuses:
An allowance for directors’ and corporate auditors’ bonuses is provided at the estimated
amount applicable to the fiscal year under review.
(6) Hedging accounting method
A. Hedging accounting method
The Company defers gains or losses on its hedges.
For foreign exchange contracts, the Company allocates differences in the values of hedging
instruments when such hedges meet all requirements for such allocations. For interest rate
swaps, the Company applies exceptional treatment when the swap in question meets the
conditions for application of such exceptional treatment.
B. Hedging instruments and hedged items:
Hedging instruments: Foreign exchange contracts and interest rate swaps
Hedged items: Loans receivable in foreign currencies and interest on
borrowings
C. Hedging policy:
Derivative transactions are used to avoid risks associated with fluctuations in foreign
exchange markets and in interest rates and to reduce the costs of financing. It is the
Company’s policy not to engage in speculative transactions that deviate from real demand 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 the market
values of the hedged items and of the hedging instruments over the entire period of the
hedge. When the Company allocates differences in the values of hedging instruments or
when it accounts for the value of swaps under exceptional treatment, these determinations
allow it to forgo evaluation of the effectiveness of hedges in these cases.
(7) Treatment of consumption taxes:
Consumption taxes are excluded from the statements of income, except in the case of nondeductible consumption taxes related to fixed assets that are charged when incurred.
(Changes in method of presentation)
Owing to an increase in financial materiality, “Prepaid pension cost” (valued at ¥8,956
million as of the previous fiscal year-end), which had previously been included in “Other
investments” under investments and other assets, was classified as a separate item beginning
with the fiscal year under review.
73
2. Notes to the Non-Consolidated Balance Sheets
(1) Accumulated depreciation on tangible fixed assets: ¥485,195 million
(2) Contingent liabilities
A. Guarantees, etc., against bank borrowings
Guarantees: ¥17,536 million
B. Guarantees, etc., against derivatives
Guarantees:
Contract amount, etc.: ¥6,840 million
Unrealized gains (losses): ¥(674) million
(3) Matured notes at term-end
The balance sheet date for the term fell on a bank holiday, and trade notes with maturity on
the balance sheet date were cleared on the clearing houses the next business day. Current
assets and current liabilities thus respectively include trade notes receivable and trade notes
payable with maturity on the balance sheet date as follows:
Notes receivable: ¥824 million
(4) Monetary claims and obligations with affiliates
Short-term monetary claims on affiliates: ¥32,699 million
Long-term monetary claims on affiliates: ¥3,835 million
Short-term monetary obligations to affiliates: ¥34,245 million
74
3. Notes to the Non-Consolidated Statements of Income
(1) Transactions with affiliates:
Net sales: ¥44,313 million
Purchases: ¥78,367 million
Selling, general and administrative expenses: ¥31,759 million
Transactions other than operating transactions: ¥2,374 million
(2) Impairment losses on fixed assets
In the fiscal year under review, the Company recognized impairment losses in the following
asset groups:
Use of asset Location of asset Type of asset
Leased asset Takatsuki, Osaka Prefecture and 1 other locations Buildings, structures and land
The Company divides its respective assets, in principle, by individual breweries, plants and
other 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 as
common-use assets, as they do not generate cash flows on their own.
An impairment loss (¥362 million for buildings, ¥3 million for structures, and ¥1,229
million for land) was recorded as an extraordinary loss corresponding to the difference
between the recoverable amount and the book value of certain assets. This difference arose
because the market value of certain leased assets declined substantially below book value,
prompting the Company to recognize certain amounts invested as irrecoverable.
The recoverable amount is estimated using the net sales amount or utility value, with the net
sales amount calculated based on the appraised real estate value.
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4. Notes to the Non-Consolidated Statements of Changes in Net Assets
Treasury stock
Type of stock
Balance as of the end of
the previous fiscal year
(Dec. 31, 2009)
Increase Decrease
Balance as of the end of
the fiscal year
under review
(Dec. 31, 2010)
Common stock 18,576,966 13,827 370,737 18,220,056
(Reasons for change)
The increase in the number of shares was the result of the following:
Increase resulting from purchases of Less-than-One–Unit Shares from shareholders
upon request: 13,827 shares
The decrease in the number of shares was the result of the following:
Decrease resulting from sales of Less-than–One-Unit Shares to shareholders upon
request: 566 shares
Decrease resulting from exercise of stock options: 300,900 shares
Decrease by share exchanges 69,271 shares
76
5. Tax effect accounting
(1) Deferred tax assets and liabilities
Deferred tax assets
Allowance for doubtful accounts, in excess of tax-deductible amount: ¥4,332 million
Allowance for employees’ bonuses, non-tax deductible: ¥525 million
Allowance for employees’ severance and retirement benefits,
in excess of tax-deductible amount: ¥6,638 million
Disapproval of unpaid enterprise taxes: ¥1,343 million
Loss on devaluation of investment in subsidiaries, non-tax deductible: ¥17,979 million
Depreciation, in excess of tax-deductible amount: ¥168 million
Loss on establishment of retirement benefit trust, non-tax deductible: ¥1,482 million
Loss on devaluation of investment securities, non-tax deductible: ¥2,757 million
Loss on devaluation of capital contributions for subsidiaries,
non-tax deductible: ¥5,158 million
Impairment loss on fixed assets: ¥2,992 million
Loss on factory restructurings, non-tax deductible ¥7,716 million
Amortization of deferred charges, in excess of tax-deductible amount: ¥41 million
Others: ¥5,176 million
Subtotal deferred tax assets: ¥56,312 million
Valuation allowance: ¥(27,472) million
Total deferred tax assets: ¥28,839 million
Deferred tax liabilities
Reserve for reduction in entry of fixed assets: ¥(641) million
Valuation difference on available-for-sale securities: ¥(516) million
Deferred gains or losses on hedges ¥(469) million
Prepaid pension cost: ¥(857) million
Total deferred tax liabilities: ¥(2,485) million
Net deferred tax assets: ¥26,354 million
(2) Effective tax rates before and after application of tax effect accounting
Statutory effective tax rates: 40.4%
Adjustment
Permanent difference (non-deductible), including entertainment expenses: 3.5%
Valuation allowance: 10.2%
Permanent difference (non-taxable), including dividend income: (0.6)%
Tax credit: (1.2)%
Others: 1.2%
Effective tax rates after application of tax effect accounting: 53.4%
77
6. Notes related to leased fixed assets
Separately from the fixed assets carried on the balance sheets, some sales-related fixtures are
treated based on finance lease agreements that do not transfer ownership rights.
(1) As of the end of the fiscal year under review
Amount equivalent to acquisition costs: ¥16,949 million
(2) As of the end of the fiscal year under review
Amount equivalent to accumulated depreciation: ¥12,864 million
(3) As of the end of the fiscal year under review
Amount equivalent to prepaid lease rents: ¥4,473 million
7. Per share information
(1) Net assets per share: ¥1,105.00
(2) Net income per share: ¥37.97
8. Other notes
Figures in amounts of less than one million yen are omitted.
78
INDEPENDENT AUDITOR’S REPORT
To: The Board of Directors
ASAHI BREWERIES, LTD.
February 3, 2011
KPMG AZSA LLC
Hiroyuki Sakai (Seal)
Designated Limited Liability and Engagement Partner
Certified Public Accountant
Hajime Harada (Seal)
Designated Limited Liability and Engagement Partner
Certified Public Accountant
Yasuyuki Nagasaki (Seal)
Designated Limited Liability and Engagement Partner
Certified Public Accountant
In accordance with the provisions of Paragraph 4, Article 444 of the Companies Act, we have
audited the consolidated financial statements of ASAHI BREWERIES, LTD. (the “Company”) for the
fiscal year from January 1, 2010 to December 31, 2010. These statements consist of the 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 responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements based on our audit conducted as Independent Auditor.
We conducted our audit in accordance with generally accepted auditing standards in Japan. Those
auditing standards require that we obtain reasonable assurance that the consolidated financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting 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 the consolidated financial statements. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the foregoing consolidated financial statements present fairly, in all material aspects,
the financial position and results of operations of the Company and its consolidated subsidiaries for the
period covered by the aforesaid financial statements in conformity with generally accepted accounting
principles in Japan.
Our firm and engagement partners have no interests in the Company requiring disclosure pursuant to
the relevant provisions of the Certified Public Accountants Law of Japan.
79
INDEPENDENT AUDITOR’S REPORT
To: The Board of Directors
ASAHI BREWERIES, LTD.
February 3, 2011
KPMG AZSA LLC
Hiroyuki Sakai (Seal)
Designated Limited Liability and Engagement Partner
Certified Public Accountant
Hajime Harada (Seal)
Designated Limited Liability and Engagement Partner
Certified Public Accountant
Yasuyuki Nagasaki (Seal)
Designated Limited Liability and Engagement Partner
Certified Public Accountant
In accordance with the provisions of Item 1, Paragraph 2, Article 436 of the Companies Act, we
have audited the financial statements of ASAHI BREWERIES, LTD. (the “Company”) for its 87th fiscal
year, the period from January 1, 2010 to December 31, 2010. These statements consist of the nonconsolidated balance sheets, the non-consolidated statements of income, the non-consolidated 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, and estimates made by management, as
well as evaluating the overall presentation of the financial statements and supporting schedules thereto.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the foregoing financial statements and supporting schedules thereto present fairly, in
all material aspects, the financial position and results of operations of the Company for the 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.
80
REPORT OF THE BOARD OF CORPORATE AUDITORS
The Board of Corporate Auditors has prepared the following report based on the audit reports
prepared by individual Corporate Auditors related to the Directors’ execution of their duties during the
87th fiscal year, the period from January 1, 2010 to December 31, 2010, after due 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, and received
reports from each Corporate Auditor regarding the status and results of the audits, as well as reports
from the Directors and Independent Auditor on the execution of their duties, and requested
explanations of those reports when necessary.
(2) Each Corporate Auditor sought to achieve mutual understanding with the Directors and other
employees, and strove to collect information and create an audit environment in accordance with 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, and inspected the operations and property of the head office and other important
business facilities. The Board also oversaw and verified the status of “the development of systems
necessary to ensure that the execution of duties by directors complies with laws and regulations and
the articles of incorporation (internal control systems)” (Item 6, Paragraph 4, Article 362 of the
Companies Act and Paragraph 1 and 3, Article 100 of the Ordinance for Enforcement of the
Companies Act) that is included in the business report. With respect to internal controls on financial
reporting, the Board received reports from the Directors and the Independent Auditor related to
evaluation and auditing of the Company’s internal controls, and sought additional explanations as
necessary. In addition, the Board examined the status of “the basic policy and measures concerning
the persons responsible for controlling decisions pertaining to the Company’s financial affairs and
business policies” (Item 3, Article 118 of the Ordinance for Enforcement of the Companies Act),
based on discussions with the Board of Directors and other parties. With respect to subsidiaries, the
Corporate Auditors took steps to facilitate communications with the directors and corporate auditors
of subsidiaries and, when necessary, received reports from subsidiaries on the status of their
businesses. Using the foregoing methods, the 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 of Income, Statements of Changes in Net Assets, and notes to those statements),
supporting schedules, and the consolidated financial statements (Consolidated Balance Sheets,
Consolidated Statements of Income, Consolidated Statements of Changes in Net Assets, and notes to
those statements) for the business year under review.
81
2. Results of the Audit
(1) Results of audit of the Business Report
• In our opinion, the Business Report and the supporting schedules thereto present the situation of
the Company fairly, in compliance with the provisions of applicable laws and regulations and the
Articles of Incorporation.
• In our opinion, there are no wrongful acts or material violations of applicable laws and
regulations or the Articles of Incorporation in the execution of their duties by the Directors.
• In our opinion, the content of the resolution by the Board of Directors regarding internal control
systems is appropriate, and, furthermore, execution of the internal control systems by the
Directors has been appropriate.
• In our opinion, the Company’s basic policy regarding persons who exercise control over
decision-making with respect to the Company’s finances and business policies is appropriate.
We acknowledge that the measures implemented to achieve this basic policy are consistent with
the basic policy, will not harm the common interest of the Company’s shareholders, and serve
the purpose of maintaining the positions of the Company’s executives.
(2) Results of the audit of financial statements and the supporting schedules thereto
In our opinion, the auditing methods used by KPMG AZSA LLC, the Independent Auditor, and the
results of its audit are appropriate.
(3) Results of the audit of consolidated financial statements
In our opinion, the auditing methods used by KPMG AZSA LLC, the Independent Auditor, and the
results of its audit are appropriate.
February 4, 2011
Board of Corporate Auditors
ASAHI BREWERIES, LTD.
Yoshihiro Goto (Seal)
Standing Corporate Auditor
Yoshifumi Nishino (Seal)
Standing Corporate Auditor
Takahide Sakurai (Seal)
Outside Corporate Auditor
Naoto Nakamura (Seal)
Outside Corporate Auditor
Tadashi Ishizaki (Seal)
Outside Corporate Auditor
82
REFERENCE MATERIALS FOR GENERAL MEETING OF SHAREHOLDERS
Agenda Items and Reference Information
Item 1: Appropriation of surplus
The Company proposes the appropriation of surplus in the following manner:
1. Year-end dividends
The Company places a priority on returning profit to shareholders and adheres to a basic policy of
implementing returns to shareholders with the business performance taken into account while
seeking enhanced profitability and stronger financial conditions. The Company continues to strive
to ensure sustainable and stable dividend payments while fulfilling the benchmark of 20% in the
consolidated payout ratio. Based on this policy and taking into consideration a variety of factors,
including the Company’s consolidated financial condition and achievement for the fiscal year
under review, the Company proposes a year-end dividend of ¥12.50 per share, as follows:
(1) Type of dividend asset
Cash
(2) Allocation of dividend assets to shareholders and total amount of allocation
¥12.50 per share of common stock
Total amount of payout: ¥5,817,072,575
Since the Company previously paid out ¥10.50 per share as an interim-period dividend, the total
dividend for the fiscal year under review will amount to ¥23.0 per share, which is a dividend
increase of ¥2.0.
(3) Effective date of dividend payment
March 28, 2011
2. Other appropriation of surplus
The Company proposes that surplus be invested and otherwise used to enhance its corporate
value, and be appropriated as follows in order to strengthen the management base for aggressive
business development going forward.
(1) Surplus account showing an increase, and the amount of such increase
General reserves: ¥10,000,000,000
(2) Surplus account showing a decrease, and the amount of such decrease
Retained earnings carried forward: ¥10,000,000,000
83
Item 2: Approval of absorption-type demerger agreement
1. Reason for absorption-type demerger
With the domestic market reaching maturity, the Company is facing a significant change in its
business environment, including the spread of globalization in business competition and the
movement toward reorganization of the industry. As the pace of this change is anticipated to
accelerate, the Company needs to be more dynamic and conduct its resource allocation more
expeditiously to cope with such change in order to achieve sustainable growth.
In 2009, the Company established the “Long-Term Vision 2015” and, as a milestone toward
realizing this long-term vision, has embarked on the three-year “Medium-Term Management Plan
2012,” to be completed in 2012. In a bid to achieve its long-term vision, the Company believes
that it is imperative to strengthen its business fundamentals by clarifying the roles and
responsibilities of its respective business units and to further develop each unit’s business
expertise, and at the same time to expand its domestic and overseas business networks with a view
to enhancing the Company’s corporate value.
Under this direction, the Company will implement the transition to a pure holding company
structure to enhance the functions of the governance of its group of companies (the “Group”), and
thereby further cultivate its craftsmanship and strengthen the management infrastructure of the
whole Group, by integrating its operations across the Group and improving specialty service
functions, as well as develop human resources that are capable of properly responding to the
diversity of customers and businesses. At the same time, as the new structure will allow the
Company to make bold resource allocation to growing areas in both domestic and overseas
markets, the Company will speed up its efforts to achieve significant growth of the whole Group.
Toward this end, the Company proposes to transfer its alcoholic beverages business to Asahi
Group Holdings, Ltd. (said trade name is scheduled to be changed to “Asahi Breweries, Ltd.” as
of July 1, 2011), through an absorption-type demerger to take effect on July 1, 2011, subject to
approval of Item 3, “Partial amendments to the Articles of Incorporation,” and the effectuation
of the absorption-type demerger agreement. Asahi Group Holdings, Ltd. is a wholly owned
subsidiary of the Company.
84
2. Overview of the absorption-type demerger agreement
ABSORPTION-TYPE DEMERGER AGREEMENT
ASAHI BREWERIES, LTD. (said trade name is scheduled to be changed to “Asahi Group Holdings,
Ltd.” as of July 1, 2011; hereinafter, “Party A”) and Asahi Group Holdings, Ltd. (said trade name is
scheduled to be changed to “Asahi Breweries, Ltd.” as of July 1, 2011; hereinafter “Party B”) do hereby
enter into this Absorption-Type Demerger Agreement (hereinafter, this “Agreement”) as follows
regarding an absorption-type demerger (hereinafter, the “Demerger”) whereby Party A shall transfer part
of the rights and duties that Party A holds with respect to its certain business to Party B.
Article 1 (Absorption-Type Demerger)
Party A does transfer to Party B, and Party B does accept the transfer of, the rights and duties set
forth in Article 3.1 regarding the alcoholic beverages business operated by Party A (hereinafter, the
“Business”).
Article 2 (Demerger Parties)
The parties to the Demerger are as follows:
(1) Party A (the Demerged Company)
Trade name: ASAHI BREWERIES, LTD. (said trade name is scheduled to be changed to
“Asahi Group Holdings, Ltd.” as of July 1, 2011)
Legal address: 23-1, Azumabashi 1-chome, Sumida-ku, Tokyo
(2) Party B (the Successor Company)
Trade name: Asahi Group Holdings, Ltd. (said trade name is scheduled to be changed to
“Asahi Breweries, Ltd.” as of July 1, 2011)
Legal address: 23-1, Azumabashi 1-chome, Sumida-ku, Tokyo
Article 3 (Rights and Duties to Be Transferred)
1. The assets, obligations, employment contracts, and other rights and duties that shall transfer from
Party A to Party B by the Demerger are set forth in the Attachment “Particulars of Rights and
Duties to Be Transferred to Party B”. Further, if any such rights and duties to be transferred
require the permission, authorization, approval, and the like, of a related government authority or
other related party, such rights and duties shall transfer by the Demerger on the condition that
said permissions, authorizations, approvals, and the like, have been obtained.
2. The obligations to be transferred to Party B pursuant to the preceding Paragraph shall be with a
concomitant assumption of the obligations by Party A.
Article 4 (Demerger Consideration)
Upon effectuation of the Demerger, Party B shall issue 499,980 shares of common stock, and shall
allocate and deliver all of said shares to Party A.
Article 5 (Amount of Increase in Capital and Reserves of Party B)
Party B shall increase its capital and reserves as follows upon the effectuation of the Demerger:
(1) Capital
Capital shall increase by JPY19,999,500,000 as a result of the Demerger.
(2) Capital reserves
Capital reserves shall increase by JPY4,999,500,000 as a result of the Demerger.
(3) Legal retained earnings
The amount of legal retained earnings shall not increase as a result of the Demerger.
Article 6 (Effective Date of the Demerger)
The effective date of the Demerger shall be July 1, 2011 (hereinafter, the “Effective Date”).
However, Party A and Party B may, upon holding consultations, change said Effective Date if
necessary in the course of proceeding with the Demerger.
85
Article 7 (Duty of Care of Good Manager)
Each of Party A and Party B shall, from the date hereof until the Effective Date, execute its
businesses and manage and operate its assets with the due care of a good manager, and shall hold
consultations with the other party in advance with regard to any acts that may have a material impact
on its assets, rights, or duties.
Article 8 (Duty of Non-Competition)
Party A shall bear no duty of non-competition in relation to the Business on or after the Effective
Date.
Article 9 (Approval at General Meeting of Shareholders)
Each of Party A and Party B shall hold a general meeting of shareholders on March 25, 2011 and
seek a resolution regarding the approval of this Agreement and the matters concerning the Demerger.
However, Party A and Party B may, upon holding consultations, reschedule the respective general
meetings of shareholders if necessary in the course of proceeding with the Demerger.
Article 10 (Validity of this Agreement)
This Agreement shall become invalid if the approval of general meeting of shareholders of either
Party A or Party B or the approval of a related government authority, or the like, as provided by law
or ordinance has not been obtained by the day immediately before the Effective Date.
Article 11 (Amendment and Cancellation)
Party A and Party B may, upon holding consultations, amend the conditions of the Demerger or
cancel this Agreement if, from the date hereof until the Effective Date, a material change occurs to the
assets or management conditions of Party A or Party B due to a force majeure or other event, or if it
becomes difficult to achieve the purpose of this Agreement.
Article 12 (Matters Requiring Consultation)
Party A and Party B will, upon holding consultations, set forth any matter not provided in this
Agreement or any other matter that is required to effect the Demerger in accordance with the spirit of
this Agreement.
IN WITNESS WHEREOF, two (2) originals of this Agreement are hereby executed and, upon the
inscription and seal of Party A and Party B, each party shall retain one (1) original thereof.
February 8, 2011
Party A: 23-1, Azumabashi 1-chome, Sumida-ku, Tokyo
ASAHI BREWERIES, LTD.
Naoki Izumiya, President and Representative Director (Seal)
Party B: 23-1, Azumabashi 1-chome, Sumida-ku, Tokyo
Asahi Group Holdings, Ltd.
Akiyoshi Koji, President and Representative Director (Seal)
86
(Attachment)
PARTICULARS OF RIGHTS AND DUTIES TO BE TRANSFERRED TO PARTY B
The rights and duties to be transferred to Party B by the Demerger shall include the following
assets, obligations, employment contracts, and other rights and duties. Further, the assets and
obligations to be transferred are based on the balance sheet of Party A as of December 31, 2010 as
well as other calculations as of the same date, and shall be adjusted and finalized by adding or
deducting any increase or decrease thereof up to the Effective Date (the date set forth in Article 6 of
this Agreement).
1. Assets to Be Transferred
(1) Current Assets
Cash and deposits, notes, accounts receivable, loans and accrued interest in relation thereto,
merchandise, finished goods, semi-finished goods, raw materials, supplies, prepaid expenses,
uncollected receivables and other current assets that fall under the Business. However, the
following shall be excluded: loans and accrued interest on said loans to subsidiaries or affiliated
companies of Party A (hereinafter, collectively "Affiliates").
(2) Fixed Assets
Tangible fixed assets, intangible fixed assets, investments and other assets that fall under the
Business. However, the following shall be excluded:
1) the land, building(s), appurtenant fixtures, structures, machinery and equipment, tools,
furniture and fixtures, and other property of the head office of Party A (located at 23-1,
Azumabashi 1-chome, Sumida-ku, Tokyo);
2) the land, building(s), appurtenant fixtures, structures, machinery and equipment, tools,
furniture and fixtures, and other property (excluding software) of the research facilities of
Party A (located at 1-21, Midori 1-chome, Moriya-shi, Ibaraki Prefecture), which Party A
will continue to use jointly with Affiliates on and after the Effective Date;
3) all software (excluding software used integrally in research or production equipment that falls
under the Business);
4) all stock in Affiliates and capital investments in or loans to Affiliates; and
5) all trademark rights (including those that are pending; hereinafter the same).
2. Obligations to Be Transferred
(1) Current Liabilities
Notes payable, trade accounts payable, lease obligations, other accounts payable, accrued
expenses and other current liabilities that fall under the Business. However, the following shall
be excluded:
1) all debt interest payable, interest payable on bonds, dividends payable, property taxes payable,
alcohol taxes payable, income taxes payable, consumption and similar taxes payable,
enterprise taxes payable, income taxes withheld, and deposits from Affiliates;
2) all short-term borrowings, bonds due within one (1) year, and commercial papers.
(2) Long-term Liabilities
Long-term liabilities including lease obligations, long-term deposits received and other longterm liabilities that fall under the Business. However, all long-term borrowings and bonds shall
be excluded.
3. Contractual Status to Be Transferred
The contractual status under sale and purchase agreements, work delegation agreements, real
estate lease agreements, other lease agreements, and all other contracts concerning the Business,
and all rights and duties that arise out of or in connection with said agreements that fall under the
Business. However, the contractual status, rights and duties pertaining to the assets and liabilities
that shall not transfer to Party B pursuant to Paragraphs 1 or 2 above shall be excluded.
87
4. Employment Contracts, Etc. to Be Transferred
(1) Employment Contracts
The contractual status under employment contracts concerning all employees as of the
Effective Date (including employees seconded to Affiliates or other companies or organizations,
temporary employees, contract employees, and temporary workers) and all rights and duties that
arise out of or in connection with said contracts.
(2) Others
All labor agreements between Party A and the Asahi Brewery Labor Union (excluding the
matters stipulated in Article 16 of the Labor Union Act) as of the Effective Date.
5. Other Rights and Duties to Be Transferred
(1) Intellectual Property Rights
All patent rights, utility model rights, design rights, copyrights, other intellectual property
rights (excluding trademark rights), and know-how (including prescriptions) that fall under the
Business shall be transferred to Party B.
(2) Permissions, Authorizations, Etc.
All permissions, authorizations, approvals, registrations, regulatory filings, and the like,
obtained by Party A in relation to the Business that are transferrable from Party A to Party B
under the law.
88
3. Matters related to the number of shares to be allocated to the Company by the successor
company in the absorption-type demerger, and to the fairness of the values of the capital
and reserves of the successor company in the absorption-type demerger
(1) Fairness of the number of shares
The Company, through the absorption-type demerger (hereinafter, the “Demerger”) with an
effective date of July 1, 2011, has resolved to transfer rights and obligations pertaining to its
alcoholic beverages business to the Company’s wholly owned subsidiary Asahi Group Holdings,
Ltd. (said trade name is scheduled to be changed to “Asahi Breweries, Ltd.” as of July 1, 2011;
hereinafter, the “Successor Company” ), in accordance with the absorption-type demerger
agreement of February 8, 2011, concluded between the two companies.
Upon effectuation of the Demerger, the Successor Company shall newly issue 499,980 shares of
common stock, and shall allocate and deliver all of said shares to the Company.
As the shares of the Successor Company to be allocated to the Company through the Demerger
shall not result in a change to the net assets of the Company, and moreover, as the entirety of said
shares shall be allocated to the Company, it is recognized that the action is one that may be
enacted voluntarily, and has been judged to be fair and to have been determined through
deliberations between the Successor Company and the Company with due consideration to the net
asset value per share.
(2) Fairness of the values of capital and reserves
The capital and reserves that the Successor Company shall increase through the Demerger shall be
as follows, with said values having been determined to be fair in light of the business activities of
the Successor Company, and the rights and obligations which it will assume from the Company,
following the Demerger.
Thousand yen
Successor Company (1) Capital (2) Capital reserves (3) Legal retained earnings
Asahi Group Holdings, Ltd. 19,999,500 4,999,500 -
89
4. Content of the non-consolidated financial statements pertaining to the last fiscal year of
the Successor Company in the absorption-type demerger
Asahi Group Holdings, Ltd. (scheduled to change its trade name to “Asahi Breweries, Ltd.,” as of
July 1, 2011)
Business Report
(From August 10, 2010 to December 31, 2010)
1. Progress of the Business and the Results Thereof
The Company has not conducted any business activities for the indicated period, and therefore
has no matters that must be noted.
2. Issues to be Addressed
The Company shall assume the alcoholic beverages business of Asahi Breweries, Ltd. effective
July 1, 2011, and shall conduct business under a new structure as an alcoholic beverages
company.
3. Matters Concerning Shares
(1) Total number of authorized shares 1,000,000,000 shares
(2) Total number of issued shares 20 shares
(3) Number of shareholders 1 shareholder
(4) Major shareholders
Shareholder names Number of shares held Percentage of shares held
ASAHI BREWERIES, LTD. 20 shares 100%
90
Balance Sheets
(as of December 31, 2010)
Thousand yen
Assets Liabilities
Current Assets
Cash and deposits 1,000
Current Liabilities
Other accounts payable 383
Income taxes payable. 23
Total liabilities 407
Net assets
Shareholders’ equity
Capital stock 500
Capital surplus 500
Capital reserve 500
Retained earnings (407)
Other retained earnings (407)
Retained earnings carried forward: (407)
Total net assets 592
Total assets 1,000 Total liabilities and net assets 1,000
Note: Figures in amounts of less than one thousand yen are omitted.
91
Statements of Income
(From August 10, 2010 to December 31, 2010)
Thousand yen
Item Amount
Net Sales —
Gross profit —
Selling, general and administrative expenses 383
Operating loss 383
Recurring loss 383
Loss before income taxes 383
Income taxes-current 23
Net loss 407
Note: Figures in amounts of less than one thousand yen are omitted.
92
Statements of Changes in Net Assets
(From August 10, 2010 to December 31, 2010)
Thousand yen
Shareholders’ equity
Capital stock
Capital surplus Retained earnings
Capital reserve Total capital surplus
Other retained
earnings Total retained
earnings Retained earnings carried
forward:
Changes during the
term
Incorporation 500 500 500
Net loss (407) (407)
Total changes
during the term 500 500 500 (407) (407)
Balance as of Dec
31, 2010 500 500 500 (407) (407)
Shareholders’
equity
Total net
assets Total
shareholders’
equity
Changes during the
term
Incorporation 1,000 1,000
Net loss (407) (407)
Total changes
during the term 592 592
Balance as of Dec
31, 2010 592 592
Notes: Figures in amounts of less than one thousand yen are omitted.
Notes to the Statements of Changes in Net Assets:
Total number of issued shares as of last day of term: 20 shares of common stock
93
CORPORATE AUDITOR’S REPORT
Corporate Auditor Akihito Kodama has prepared the following report related to the Directors’
execution of their duties during the first fiscal year, the period from August 10, 2010 to December 31,
2010.
1. Methods used in audits and content of audits
The Corporate Auditor sought to achieve mutual understanding with the Directors and strove to
collect information and create an environment for auditing, and, in addition, attended meetings of the
Board of Directors, received reports from Directors regarding the execution of their duties and requested
explanations when necessary, reviewed important documents, and inspected the status of operations and
assets. Using the foregoing methods, the Corporate Auditor reviewed the Business Report thereto for the
fiscal year under review.
Furthermore, the Corporate Auditor conducted inspection of account books and related documents,
and reviewed the financial statements (Balance Sheets, Statements of Income, and Statements of Changes
in Net Assets) and the supporting schedules thereto.
2. Results of the Audit
(1) Results of audit of the Business Report
1) In my opinion, the Business Report presents the situation of the Company fairly, in compliance
with the provisions of applicable laws and regulations and the Articles of Incorporation.
2) In my opinion, there are no wrongful acts or material violations of applicable laws and regulations
or the Articles of Incorporation in the execution of their duties by the Directors.
(2) Results of the audit of financial statements and supporting schedules thereto
In my opinion, the financial statements and the supporting schedules thereto present fairly, in all
material aspects, the financial position and results of operation of the Company.
January 28, 2011
Asahi Group Holdings, Ltd.
Akihito Kodama (Seal)
Corporate Auditor
94
5. Events with significant effect on the status of assets, including the disposition of
significant assets and the shouldering of significant debt, of the Successor Company in
the absorption-type demerger, following the last day of the last fiscal year of the
Successor Company
There are no events with significant effect on the status of the assets of Asahi Group Holdings, Ltd.
(said trade name is scheduled to be changed to “Asahi Breweries, Ltd.” as of July 1, 2011),
including the disposition of significant assets and the shouldering of significant debt, following the
last day of the last fiscal year of the Successor Company.
6. Events with significant effect on the status of assets, including the disposition of
significant assets and the shouldering of significant debt, of the Company, following the
last day of the last fiscal year of the Company
There are no events with significant effect on the status of the assets of the Company, including
the disposition of significant assets and the shouldering of significant debt, following the last day
of the last fiscal year of the Company.
95
Item 3: Partial amendments to the Articles of Incorporation
The Company proposes to amend the Articles of Incorporation of the Company as follows:
1. Reason for Amendments
The Company, as noted in Item 2 will transfer its alcoholic beverages business to a wholly owned
subsidiary of the Company through an absorption-type demerger, and will become a pure holding
company, effective July 1, 2011 (scheduled). Therefore, in accordance with the Company’s
transition of its management structure from that of an operating holding company to a pure
holding company, the Company’s trade name and business purposes shall be amended (Article 1
and Article 2 of the current Articles of Incorporation).
Moreover, along with this amendment, a supplementary provision shall be newly established with
an effective date of July 1, 2011, conditional upon the approval of “Item 2: Approval of
absorption-type demerger agreement.”
96
2. Substance of Amendments
The proposed amendments are as follows:
(Amended parts are indicated by underlining)
Current Articles Proposed Amendments
CHAPTER I. GENERAL PROVISIONS CHAPTER I. GENERAL PROVISIONS
Article 1. (Trade Name)
The name of the Company shall be “Asahi Beer
Kabushiki Kaisha,” expressed as “ASAHI
BREWERIES, LTD.” (hereinafter referred to as the
“Company”) in English.
Article 1. (Trade Name)
The name of the Company shall be “Asahi Group
Holdings Kabushiki Kaisha,” expressed as “Asahi
Group Holdings, Ltd.” (hereinafter referred to as the
“Company”) in English.
Article 2. (Purposes)
The purposes of the Company shall be to engage in
the following business activities:
Article 2. (Purposes)
1.The purposes of the Company shall be to manage
or control companies (including domestic and
foreign companies), partnerships (including foreign
equivalents), and other entities, which are engaged
in one or more of the businesses listed below,
through the holding of shares or other equity
interests in these entities:
1) Manufacture and sale of beer and other
alcoholic beverages;
1)
2) Manufacture and sale of soft drinks and other
beverages;
2)
3) Manufacture and sale of pharmaceuticals, quasidrugs, reagent chemicals, medical supplies,
drugs for animal use and cosmetics;
3)
4) Manufacture and sale of products using
microorganisms and biochemical products
including enzymes;
4)
5) Manufacture and sale of foodstuffs and food
additives;
5)
6) Production, processing and sale of agricultural
products including fruits, vegetables and grains;
6)
7) Production and sale of milk and livestock, and
manufacture, processing and sale of dairy
products;
7)
(unchanged)
8) Manufacture and sale of fertilizers and
feedstuffs;
8)
9) Purchase and sale, lease, management and
administration, development and utilization of
real estate, and management of forestry
business;
9)
10) Manufacture and sale of glass bottles and other
glass products, and related products including
stoppers for bottles;
10)
11) Operation of restaurants and coffee houses; 11)
12) Operation of trucking and warehousing
businesses;
12)
13) Provision of loans, trading of securities and
provision of guaranties;
13)
97
Current Articles Proposed Amendments
14) Manufacture, sale and maintenance of
equipment for manufacturing and selling for
alcoholic and non-alcoholic beverages and
other products;
14)
15) Operation of sports facilities, including tennis
courts and athletic clubs, and art museums;
15)
(unchanged)
16) Non-life insurance and life insurance agency
businesses; and
16)
17) Any and all business activities incidental or
related to any of the preceding items.
17)
(newly established) 2 The Company may also perform any and all
business activities incidental or related to any of
the preceding items.
Articles 3~39 (omitted) Articles 3~39 (unchanged)
(newly established) Supplementary Provision
The amendments to Articles 1 and 2 shall be
effective on and from July 1, 2011. After the
effective date thereof, this supplementary provision
shall be deleted.
98
Item 4: Election of eleven (11) Directors
At the conclusion of this Annual General Meeting of Shareholders, the terms of office of all
the Directors will expire. The Company therefore asks the shareholders to elect eleven (11)
Directors.
The candidates for the position of Director are as follows. Among these, the candidates for
position for Outside Director meet the requirements for independent directors/auditors as
defined by the Tokyo Stock Exchange and the Osaka Securities Exchange.
Candidate
number
Name
(Date of birth)
Career summary, positions and areas of
responsibility in the Company, and significant
concurrent positions held by the candidate
Number of
shares in the
Company
owned by
the candidate
Special
interests
in the
Company
1
Hitoshi
Ogita
(January 1,
1942)
Apr. 1965 Entered Asahi Breweries, Ltd.
48,000 Refer to
Notes: 1
Mar. 1997 Director, General Manager of
Fukuoka Branch
Sep. 1997 Director, Senior General
Manager of Kyushu Regional
Headquarters
Mar. 2000 Managing Corporate Officer,
Senior General Manager of
Kyushu Regional Headquarters
Oct. 2000 Managing Corporate Officer,
Senior General Manager of
Kanshin-etsu Regional
Headquarters
Mar. 2002 Senior Managing Corporate
Officer, Senior General Manager
of Kanshin-etsu Regional
Headquarters
Sep. 2002 Corporate Officer, Vice President
of Asahi Soft Drinks Co., Ltd.
Mar. 2003 President and Representative
Director of Asahi Soft Drinks
Co., Ltd.
Mar. 2006 President and Representative
Director of Asahi Breweries, Ltd.
Mar. 2010 Chairman of the Board and
Representative Director of Asahi
Breweries, Ltd.
(to the present)

Chairman of the Board of Asahi Beer Arts
Foundation
Outside Director of Imperial Hotel, Ltd.
99
Candidate
number
Name
(Date of birth)
Career summary, positions and areas of
responsibility in the Company, and significant
concurrent positions held by the candidate
Number of
shares in the
Company
owned by
the candidate
Special
interests
in the
Company
2
Naoki
Izumiya
(August 9,
1948)
Apr. 1972 Entered Asahi Breweries, Ltd.
35,300 ―
Mar. 2000 Corporate Officer, Senior General
Manager of Group Management
Strategy Headquarters
Oct. 2000 Corporate Officer, Senior General
Manager of Strategy Planning
Headquarters
Sep. 2001 Corporate Officer, Deputy
General Manager of Shutoken
Regional Headquarters, General
Manager of Tokyo Branch
Mar. 2003 Director
Mar. 2004 Managing Director
Mar. 2006 Managing Director, Managing
Corporate Officer, Senior General
Manager of Liquor Sales &
Marketing Headquarters
Mar. 2009 Senior Managing Director, Senior
Managing Corporate Officer
Mar. 2010 President and Representative
Director
(to the present)
3
Kazuo
Motoyama
(March 14,
1950)
Apr. 1972 Entered Asahi Breweries, Ltd.
35,000 ―
Mar. 2000 Corporate Officer, Senior General
Manager of Quality Development
Headquarters
Sep. 2001 Corporate Officer, Senior General
Manager of SCM Headquarters
Sep. 2002 Corporate Officer
Sep. 2003 Corporate Officer, Senior General
Manager of Strategy Planning
Headquarters
Oct. 2005 Corporate Officer
Mar. 2006 Director, Corporate Officer
Mar. 2007 Managing Director, Managing
Corporate Officer
Mar. 2009 Senior Managing Director, Senior
Managing Corporate Officer
Mar. 2010 Executive Vice President and
Representative Director
(to the present)

Director of LB Co., Ltd.
100
Candidate
number
Name
(Date of birth)
Career summary, positions and areas of
responsibility in the Company, and significant
concurrent positions held by the candidate
Number of
shares in the
Company
owned by
the candidate
Special
interests
in the
Company
4
Akiyoshi
Koji
(November 8,
1951)
Apr. 1975 Entered Asahi Breweries, Ltd.
12,500 ―
Sep. 2001 Corporate Officer
Mar. 2003 Managing Director, Senior
General Manager, Planning
Division of Asahi Soft Drinks
Co., Ltd.
Mar. 2006 Senior Managing Director,
Senior General Manager,
Planning Division of Asahi Soft
Drinks Co., Ltd.
Mar. 2007 Managing Director, Managing
Corporate Officer of Asahi
Breweries, Ltd.
(to the present)

President and Representative Director of
Asahi Group Holdings, Ltd.
Supervisor of Tsingtao Brewery Co., Ltd.
5
Katsuyuki
Kawatsura
(October 1,
1950)
Apr. 1975 Entered Asahi Breweries, Ltd.
8,100 Refer to Notes: 1.
Mar. 2005 Corporate Officer, Senior General
Manager of Product &
Technology Development
Headquarters
Oct. 2007 Corporate Officer, Senior General
Manager of Research &
Development Headquarters for
Alcoholic Beverages
Jul. 2008 Corporate Officer, Senior General
Manager of Research &
Development Headquarters
Mar. 2009 Managing Corporate Officer,
Senior General Manager of
Research & Development
Headquarters
Mar. 2010 Managing Director, Managing
Corporate Officer, Senior General
Manager of Research &
Development Headquarters
(to the present)

Chairman of the Board of Asahi Breweries
Foundation
101
Candidate
number
Name
(Date of birth)
Career summary, positions and areas of
responsibility in the Company, and significant
concurrent positions held by the candidate
Number of
shares in the
Company
owned by
the candidate
Special
interests
in the
Company
6
Toshihiko
Nagao
(July 21,
1954)
Apr. 1978 Entered Asahi Breweries, Ltd.
11,300 ―
Mar. 2006 Corporate Officer, Senior Deputy
General Manager of Liquor Sales
& Marketing Headquarters,
General Manager of Sales
Department
Sep. 2006 Corporate Officer, Senior Deputy
General Manager of Liquor Sales
& Marketing Headquarters,
General Manager of Beer
Category Department
Sep. 2008 Corporate Officer, Senior General
Manager of Sales Headquarters
Mar. 2009 Director, Corporate Officer,
Senior General Manager of
Liquor Sales & Marketing
Headquarters
(to the present)
7
Toshio
Kodato
(September
20, 1954)
Apr. 1978 Entered Asahi Breweries, Ltd.
6,500 ―
Mar. 2008 Corporate Officer, Senior General
Manager of Shikoku Regional
Headquarters
Sep. 2009 Corporate Officer, Senior Deputy
General Manager of International
Headquarters
Mar. 2010 Director, Corporate Officer,
Senior General Manager of
International Headquarters
(to the present)

Vice Chairman of Tingyi-Asahi Beverages
Holding Co., Ltd.
Director of Schweppes Australia Pty Limited
8
Yoshihiro
Tonozuka
(June 5, 1951)
Apr. 1975 Entered Asahi Breweries, Ltd.
2,700 ―
Oct. 2005 President and Representative
Director of LB Co., Ltd. (Tokyo)
Mar. 2010 Director, Corporate Officer of
Asahi Breweries, Ltd.
(to the present)

Director of Asahi Soft Drinks Co., Ltd.
102
Candidate
number
Name
(Date of birth)
Career summary, positions and areas of
responsibility in the Company, and significant
concurrent positions held by the candidate
Number of
shares in the
Company
owned by
the candidate
Special
interests
in the
Company
9
Mariko
Bando
(August 17,
1946)
Jul. 1969 Joined staff of Prime Minister’s
Office
― ―
Oct. 1985 Councilor of Cabinet Secretariat
Jul. 1994 Director of Gender Equality
Office, Prime Minister’s Office
Apr. 1995 Vice-Governor of Saitama
Prefecture
Jun. 1998 Consul General of Brisbane,
Australia
Jan. 2001 Director General of Gender
Equity Bureau, Cabinet Office
Oct. 2003 Director of Showa Women’s
University
(to the present)
Apr. 2007 President of Showa Women’s
University
(to the present)
Mar. 2008 Director of Asahi Breweries, Ltd.
(to the present)

President of Showa Women’s University
Director of Showa Women’s University
Director of The Institute of Women’s Culture,
Showa Women’s University
Chairman of the Board of Rural Women
Empowerment and Life Improvement
Association
Outside Director of Asahi Mutual Life
Insurance Company
103
Candidate
number
Name
(Date of birth)
Career summary, positions and areas of
responsibility in the Company, and significant
concurrent positions held by the candidate
Number of
shares in the
Company
owned by
the candidate
Special
interests
in the
Company
10
Naoki
Tanaka
(September 1,
1945)
Jan. 1971 Senior Fellow of Kokumin Keizai
Research Institute
― ―
Apr. 1997 President of the 21st Century
Public Policy Institute
Apr. 2007 President of Center for
International Public Policy
Studies
(to the present)
Mar. 2009 Director of Asahi Breweries, Ltd.
(to the present)

President of Center for International Public
Policy Studies
Chairman of Postal Services Privatization
Committee
104
(New candidate is marked with (*))
Candidate
number
Name
(Date of birth)
Career summary, positions and areas of
responsibility in the Company, and significant
concurrent positions held by the candidate
Number of
shares in the
Company
owned by
the candidate
Special
interests
in the
Company
11
Ichiro
Ito *
(July 6, 1942)
Apr. 1966 Entered Asahi Chemical Industry
Co., Ltd. (present Asahi Kasei
Corporation)
1,000 ―
Jun. 2001 Director
Feb. 2003 Managing Director
Jun. 2003 Director, Primary Executive
Officer
Apr. 2006 Director, Vice President
Executive Officer
Apr. 2010 Representative Director,
Chairman
(to the present)

Representative Director, Chairman of Asahi
Kasei Corporation
Notes:
1. Candidates’ special interests in the Company:
(1) The Company has made donations to the Asahi Beer Arts Foundation, the Board of
Directors of which Hitoshi Ogita is Chairman. The company also receives rent from the
foundation for the facilities of the Asahi Beer Oyamazaki Villa Museum, which is
operated by the foundation.
(2) The Company has made donations to the Asahi Breweries Foundation, the Board of
Directors of which Katsuyuki Kawatsura is Chairman.
2. Mariko Bando, Naoki Tanaka, and Ichiro Ito are candidates for the position of Outside Director
as defined in Item 7, Paragraph 3, Article 2 of the Ordinance for Enforcement of the
Companies Act.
3. The following are items required to be noted about candidates for Outside Director.
(1) Reasons for recommending them as candidates for Outside Director
A. Mariko Bando has a wide range of knowledge as an educator in addition to her diverse
experience in public administration. To provide the Company with the benefit of this
experience and knowledge, the Company recommends her election to the Board as an
Outside Director.
Although Mariko Bando has not been involved in company management other than as
an outside director or an outside auditor, the Board has concluded that she will be able
to perform her duties as an Outside Director of the Company based on the reasons
noted above.
B. Naoki Tanaka has a great deal of experience as a member of government councils 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 and knowledge to the management of the Company.
C. Ichiro Ito would bring a wealth of company management experience and insight into a
broad range of issues to the management of the Company. The Company thus
recommends his election to the Board as an Outside Director.
(2) In cases in which the candidates have served during the past five years as outside directors
or outside corporate auditors of other companies, records of inappropriate actions by these
companies 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
105
actions after their occurrence
Asahi Mutual Life Insurance Company, where Mariko Bando also serves as an outside
director, received a business improvement order from the Financial Services Agency on
July 3, 2008 regarding its inadequate management of payments of insurance claims, etc.,
based on Paragraph 1, Article 132 of the Insurance Business Act. This followed an overall
review of its payments of insurance claims and benefits during a five-year period (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
case in question, she has fulfilled her responsibilities by speaking out in favor of
measures to prevent a recurrence of similar problems.
(3) Number of years of service as Outside Director
A. At the conclusion of this Annual General Meeting of Shareholders, Mariko Bando will
have served as an Outside Director for 3 years.
B. At the conclusion of this Annual General Meeting of Shareholders, Naoki Tanaka will
have served as an Outside Director for 2 years.
(4) Regarding agreements limiting the liability of Outside Directors
To enable him/her to contribute fully in his/her role as an Outside Director, the Company
has entered into agreements with Mariko Bando and Naoki Tanaka that limit his/her
liability for damages as prescribed in Paragraph 1, Article 423 of the Companies Act.
Under the terms of these agreements, Ms. Bando’s and Mr. Tanaka’s respective liabilities
are limited to ¥20 million or to the minimum limited amount stipulated by applicable
laws and regulations, whichever is higher. If this agenda item is approved as submitted,
the current agreements with Ms. Bando and Mr. Tanaka will be extended, and the
Company will newly enter into an agreement of identical content with Ichiro Ito.
106
Item 5: Election of three (3) Corporate Auditors
At the conclusion of this Annual General Meeting of Shareholders, the terms of office of three
Corporate Auditors (Yoshihiro Goto, Takahide Sakurai, and Naoto Nakamura) will expire.
The Company therefore asks the shareholders to elect three (3) Corporate Auditors.
The candidates for the position of Corporate Auditor are as follows. Among these, the
candidates for position of Outside Corporate Auditor meet the requirements for independent
directors/auditors as defined by the Tokyo Stock Exchange and the Osaka Securities Exchange.
This proposal is submitted with the prior consent of the Board of Corporate Auditors.
Candidate
number
Name
(Date of birth)
Career summary, positions, and significant
concurrent positions held by the candidate
Number of
shares in the
Company
owned by
the candidate
Special
interests
in the
Company
1
Takahide
Sakurai
(October 30,
1932)
Apr. 1955 Entered The Dai-ichi Mutual Life
Insurance Company (present The
Dai-Ichi Life Insurance Company,
Limited)
― ―
Apr. 1983 Managing Director
Apr. 1986 Vice President and Representative
Director
Apr. 1987 President and Representative
Director
Mar. 1994 Corporate Auditor of Asahi
Breweries, Ltd.
(to the present)
Apr. 1997 Chairman of the Board and
Representative Director of The
Dai-ichi Mutual Life Insurance
Company
Jul. 2004 Adviser
Apr. 2010 Special Adviser
(to the present)

Special Adviser to The Dai-ichi Life Insurance
Company, Limited
Outside Director of Imperial Hotel, Ltd.
107
(New candidate is marked with (*))
Candidate
number
Name
(Date of birth)
Career summary, positions, and significant
concurrent positions held by the candidate
Number of
shares in the
Company
owned by
the candidate
Special
interests
in the
Company
2
Naoto
Nakamura
(January 25,
1960)
Oct. 1982 Passed bar examination
― ―
Apr. 1985 Graduated The Legal Training
and Research Institute of Japan
Registered the Daini Tokyo Bar
Association
Joined the Mori Sogo Law Office
Apr. 1998 Established the Hibiya Park Law
Office, Partner
Feb. 2003 Established the Naoto Nakamura
Law Office (present Nakamura,
Tsunoda & Matsumoto Law
Office), Partner
(to the present)
Mar. 2003 Corporate Auditor of Asahi
Breweries, Ltd.
(to the present)

Partner at Nakamura, Tsunoda & Matsumoto
Law Office
Outside Corporate Auditor at Mitsui & Co.,
Ltd.
3
Yukio
Kakegai *
(June 27,
1954)
Apr. 1979 Entered Komatsu Mech Co., Ltd.
500 ―
Dec. 1987 Entered Asahi Breweries, Ltd.
Apr. 2007 Deputy General Manager of
Finance Department
Sep. 2008 Senior Officer, General Manager
of Audit Department
Mar. 2010 Corporate Officer, General
Manager of Audit Department
(to the present)
Notes:
1. Takahide Sakurai and Naoto Nakamura are candidates for the position of Outside Corporate
Auditor as defined in Item 8, Paragraph 3, Article 2 of the Ordinance for Enforcement of the
Companies Act.
2. The following are items required to be noted about candidates for Outside Corporate Auditor.
(1) Reasons for recommending them as candidates for Outside Corporate Auditor
A. Takahide Sakurai would bring a wealth of company management experience and insight
into a broad range of issues to the auditing of the Company. The Company thus
recommends his election as an Outside Corporate Auditor.
B. Naoto Nakamura would bring expert viewpoints as an attorney and high-level insights
on management to the auditing of the Company. The Company thus recommends his
election as an Outside Corporate Auditor.
Although Naoto Nakamura has not been involved in company management other than
as an outside director or an outside corporate auditor, the Board has concluded that he
will be able to perform his duties as Outside Corporate Auditor of the Company based
on the reasons noted above.
108
(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 these
companies 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
At Mitsui & Co., Ltd., where Naoto Nakamura also serves as an outside corporate auditor,
it was discovered that a 100% Singapore subsidiary of the company, Mitsui Oil (Asia) Pte.
Ltd., had, through deceptive reporting on market price, concealed losses related to
naphtha trading transactions; that the sales division of Mitsui & Co., Ltd.’s Kyushu Office
was involved in improper “round-tripping” transactions in agricultural materials for local
clients, a portion of which included fictional trades, from September 2000 to February
2008; and that the sales division of Mitsui & Co., Ltd.’s performance chemical business
unit engaged in transactions with Indonesia and elsewhere in Southeast Asian which were
presented as export transactions but which did not involve actual sales from April 2004 to
August 2008. Although Mr. Nakamura was not involved in the case in question, he has
fulfilled his responsibility by speaking out in favor of measures to prevent a recurrence of
similar problems.
(3) Number of years of service as Outside Corporate Auditor
A. At the conclusion of this Annual General Meeting of Shareholders, Takahide Sakurai
will have served as an Outside Corporate Auditor for 17 years.
B. At the conclusion of this Annual General Meeting of Shareholders, Naoto Nakamura
will have served as an Outside Corporate Auditor for 8 years.
(4) Regarding agreements limiting the liability of Outside Corporate Auditors
To enable him to contribute fully in his role as Outside Corporate Auditor, the Company
has entered into agreements with Takahide Sakurai and Naoto Nakamura that limit his
liability for damages as prescribed in Paragraph 1, Article 423 of the Companies Act.
Under the terms of these agreements, Mr. Sakurai’s and Mr. Nakamura’s respective
liabilities are limited to ¥20 million or to the minimum limited amount stipulated by
applicable laws and regulations, whichever is higher. If this agenda item is approved as
submitted, the current agreements with Mr. Sakurai and Mr. Nakamura will be extended.
109
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 also
available 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 access
the online voting site. For more detailed information on that
procedure, please refer to your phone’s user manual.
2. When voting online, enter the voting code and password indicated on the enclosed voting
form. Then indicate your consent/dissent concerning for each item by following the
instructions displayed on the screen.
3. Online votes will be accepted until the day immediately prior to the date of the Annual
General Meeting of Shareholders (deadline for online voting: 5:30 p.m., March 24, 2011,
JST). However, voting in advance will be highly appreciated for our convenience in 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 that
the site can not be accessed via cellular phone.
E-mail address registration site: http://www.webdk.net/mail
110
System Requirements for Online Voting
The following system environments are required for accessing the online voting site.
(1) Internet access
(2) When voting via PC, Microsoft® Internet Explorer version 6.0 or newer, browser software
and compatible hardware.
(3) When voting via cellular phone, a 128-bit SSL communication (encrypted communication)
compatible model. (For security purposes, only 128-bit SSL communication compatible
cellular phones can access the online voting system. Other models are not compatible with
this system. Please also note that while voting via smartphones and other cellular phones
with full browser functionality is supported in principle, we cannot guarantee compatibility
with all available models.)
(Microsoft is a registered trademark of Microsoft Corporation in the United States and other
countries.)
Inquiries for Online Voting
Please contact the following Help Desk for inquiries about online voting.
Agent for Shareholder Registry Management:
The Sumitomo Trust & Banking Co., Ltd.
Stock Transfer Agency Department (Help Desk)
Phone (toll-free within Japan): 0120-186-417 (9:00 a.m. to 9:00 p.m.)
For any other inquiries not related to online voting, please contact: The Sumitomo Trust &
Banking Co., Ltd., Stock Transfer Agency Department at 0120-176-417 (toll-free phone within
Japan, 9:00 a.m. to 5:00 p.m., except Saturday, Sunday and holidays).

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