This document is a summary translation of the Japanese language original version. In the event of any
discrepancy, errors and/or omissions, the Japanese language version shall prevail.

Notes to Consolidated Financial Statements(Notes to significant matters as the basis for preparation of consolidated financial statements)
1. Scope of consolidation(1) Consolidated subsidiaries
・Number of consolidated subsidiaries:
2・Names of consolidated subsidiaries: FV East Japan Co. ,Ltd.
Mikuni Service Co., Ltd.
(2) Non-consolidated subsidiaries
・Name of non-consolidated subsidiary: FV Corporation Co., Ltd.
・Reason for exclusion from the scope of consolidation: The above company is a small-scale company and its total
assets, net sales, net income or loss (amount corresponding to the equity interest), retained earnings (amountcorresponding to the equity interest), etc. do not have a significant impact on the consolidated financial statements.
2. Application of equity method(1) Equity method affiliates
・Number of equity method affiliates:

3
Coca-Cola Customer Marketing Co., Ltd.
Coca-Cola Integrated Business Systems Co., Ltd.
Coca-Cola Business Sourcing Co., Ltd.
(2) Non-consolidated subsidiaries and affiliates excluded from scope of equity method:FV Corporation Co., Ltd.
・Reason for exclusion from the scope of the equity method: The above company is excluded from the scope of theequity method as its impact on the consolidated financial statements is minor and there is little significance in totality,
taking into account various factors, such as net income or loss (amount corresponding to the equity interest) andretained earnings (amount corresponding to the equity interest).

3. Fiscal year of consolidated subsidiaries
Regarding the fiscal year of consolidated subsidiaries, the closing dates are the same as the consolidated closingdate.
4. Accounting policies(1) Valuation standards and methods for significant assets
1) Marketable securities:
Available-for-sale securities
Available-for sale securities with fair value:
Fair value method based on the market price, etc. as of the financial closing date(Valuation differences are all reported as a component of shareholders’ equity andcost of products sold is calculated by the moving average method)
Available-for-sale securities without fair value:
Cost method based on the moving average method
2) Inventories:
Mainly cost method based on the gross average method(Balance sheet amounts are calculated by the inventory write-down method basedon decline in profitability)(2) Depreciation method for significant depreciable assets
1) Tangible fixed assets
Straight-line method(excluding lease assets):
Useful lives of the major items are as follows.
Buildings and structures
2-58 years
Machinery, equipment & vehicles: 2-20 years
Sales equipment:
4-9 years
2) Intangible fixed assets
Straight-line method(excluding lease assets):
The straight-line method is applied to software based on the internal useful life (lessthan 10 years).
3) Lease assets:
Lease assets in non-ownership-transfer finance lease transactions
Straight-line method setting the lease period as the useful lives and the residual value
as zero4) Long-term prepaid expenses: Fully depreciated within the period1(3) Basis for recording significant provisions and allowances
1) Allowance for doubtful accounts:
In preparation for bad debt loss of receivables such as accounts receivable-trade, the unrecoverable amounts forgeneral accounts receivable and specific receivables such as doubtful accounts receivable are recorded inconsideration of the loan loss ratio and the individual collectability, respectively.
2) Provision for bonuses:
In preparation for payout of employees’ bonuses, the estimated amount as of the end of the current fiscal year isrecorded.
3) Provision for directors’ bonuses:
In preparation for payout of directors’ bonuses, the estimated amount as of the end of the current fiscal year isrecorded.
4) Provision for environmental measures:
In preparation for disposal of polychlorinated biphenyl waste kept in storage, the amount recognized as of the endof the current fiscal year is recorded.
5) Provision for contract loss:
In preparation for payment of system usage fees after cancellation under the contracts, the estimated amount isrecorded.
(4) Accounting treatment for retirement benefits
1) Cut off for expected retirement benefit payments
When calculating retirement benefit obligations, the benefit formula method is used to attribute the expected
retirement benefit payments for the period up to the end of the current fiscal year.
2) Treatment of actuarial differences, past service costs and transition obligations
Actuarial differences are allocated by the straight-line method using a certain number of years (mainly 13 years)
within the employees’ average remaining years of service when incurred, and the amount is expensed from thefollowing consolidated fiscal year.
Past service costs are allocated by the straight-line method using a certain number of years (mainly 13 years)
within the employees’ average remaining years of service and expensed when incurred.
(5) Other significant matters for preparation of consolidated financial statements
Accounting treatment for consumption taxes: Tax exclusion method(Notes to changes in accounting policy)(Application of the Accounting Standard for Business Combinations, etc.)
Effective from FY2016, the Company has adopted the “Accounting Standard for Business Combinations” (AccountingStandards Board of Japan (ASBJ) Statement No. 21, issued on September 13, 2013), the “Accounting Standard forConsolidated Financial Statements” (ASBJ Statement No. 22, issued on September 13, 2013), the “AccountingStandard for Business Divestitures” (ASBJ Statement No. 7, issued on September 13, 2013), etc. Accordingly, theCompany has changed the accounting method to record the difference arising from changes in the Company’s equity
interest in subsidiaries over which the Company retains control as capital surplus, and acquisition-related costs as
expenses for the fiscal year in which they are incurred. For business combinations occurring on or after the beginningof FY2016, the Company has changed the accounting method to record the adjustment to the acquisition cost allocation
amount arising from the finalization of the tentative accounting treatment in the consolidated financial statements of the
fiscal year in which the relevant business combination occurs. Additionally, the Company has changed the presentationof net income and other items and the presentation of minority interests to non-controlling interests.
The adoption of the Accounting Standard for Business Combinations and other standards is in line with the transitional
treatment specified in paragraph 58-2 (4) of the Accounting Standard for Business Combinations, paragraph 44-5 (4) of
the Accounting Standard for Consolidated Financial Statements, and paragraph 57-4 (4) of the Accounting Standard forBusiness Divestitures. The Company applies these accounting standards prospectively from the beginning of FY2016
onward.
In FY2016, these changes had no impact on the consolidated financial statements.
(Changes in accounting estimates)(Changes to useful life)
Regarding tangible fixed assets held by the Group, the useful life of machinery and equipment used for manufacturing
purposes had been defined as 10 years. The Group has formulated a systematic maintenance policy for machinery andequipment which lead to progress in internalizing maintenance, as well as implemented a new production structure forthe entire Group upon the absorption-type merger with Sendai Coca-Cola Bottling Co., Ltd. in January 2016. Taking thisoccasion, the Company re-examined elements such as the physical durability and lifecycle of manufacturing machines.
As a result, effective from FY2016, the Company has revised their useful lives to 7-20 years prospectively based on theestimated economic useful life reflecting the actual usage status.

2

In accordance with this change, gross profit, operating income, and ordinary income for FY2016 increased by
1,798million yen, respectively, and income before income taxes increased by 1,797 million yen, compared with theprevious method.
(Unapplied accounting standards)
・ “Implementation Guidance on Recoverability of Deferred Tax Assets” (Implementation Guidance on AccountingStandard No. 26 of March 28, 2016)(1) Overview
The Implementation Guidance basically continues to apply the framework used in the Auditing Committee Report No.
66 “Audit Treatment for Judgment of Recoverability of Deferred Assets” in which companies are grouped into fivecategories and the amounts of deferred tax assets are assessed based on such categories, with some treatment revised
as follows.
1) Treatment for the entities that do not fulfill the requirements of any of the five categories
2) Requirements for categories 2 and 3
3) Treatment of unschedulable future deductible temporary differences for the entities in category 24) Treatment for the period in which a reasonable estimate is possible for the taxable income before temporary
differences for the entities in category 35) Treatment for the entities that satisfy Category 4 requirements but are applicable to category 2 or 3
(2) Scheduled date of adoption
To be applied from the beginning of FY2017(3) Impact of adopting these accounting standards, etc.
The impact on the consolidated financial statements for FY2016 is currently being evaluated.
(Notes to changes in presentation)“Short-term loan to associated firms” (836 million yen for FY2016), which was stated separately as a breakdown of“Current assets” for FY2015, is included in “Other” from FY2016 due to decreased significance.
“Accrued consumption taxes” (3,554 million yen for FY2016), which was stated separately as a breakdown of “Current
liabilities” for FY2015, is included in “Accounts payable-other and accrued expenses” from FY2016 due to decreased
significance.
“Provision for contract loss” (963 million yen for FY2015) and “Obligation on retirement of noncurrent assets” (33 million
yen for FY2015), which were included in “Other” under “Current liabilities” for FY2015, are stated separately from FY2016
due to increased significance.
“Obligation on retirement of noncurrent assets” (776 million yen for FY2015), which was included in “Other” under“Noncurrent liabilities” for FY2015, is stated separately from FY2016 due to increased significance.
“Gain on collection of deposits of bottles,” which was stated separately for FY2015, is included in “Other” under “Nonoperating income” from FY2016 due to decreased significance.
The amount of “Gain on collection of deposits of bottles” for FY2015 was 1 million yen.
(Notes to consolidated balance sheet)
Accumulated depreciation of tangible fixed assets
Accumulated depreciation includes accumulated impairment loss.

260,531 million yen(Notes to consolidated statement of income)
1. Penalty on lease contract cancellation was mainly attributable to cancellation of lease contracts for manufacturing
equipment.
2. Breakdown of restructuring cost is as follows.
105 million yen
Special retirement benefits
81 million yen
Integration cost
5 million yen
Head office and branch relocation cost, etc.

(Notes to consolidated statement of changes in Net Assets)
1. Class and total number of issued shares
Number of shares as Increase in sharesof January 1, 2016
in FY2016
Issued shares
127,680,144
Common stock－Total

127,680,144－

3Decrease in shares
in FY2016

Number of shares as ofDecember 31, 2016－

127,680,144－

127,680,144

2. Dividends(1) Amounts of dividends paid
Resolution
March 29, 2016
Ordinary General Meeting of
Shareholders
June 27, 2016
Board of Directors Meeting

Total dividends(Million yen)

Dividends per
share (Yen)Common
stock

2,029

Common
stock

2,029

Class of shares

Record date

Effective date16

December 31, 2015

March 30, 201616

June 30, 2016

September 9, 2016

(2) Of the dividends whose record date is in the current fiscal year, dividends whose effective date comes after the end of
the current fiscal year
Resolution

Class of shares

Dividend
resource

March 23, 2017
Ordinary General Meeting of
Shareholders

Commonstock

Retainedearnings

Total dividends Dividends per(Million yen)share (Yen)
2,029

16

Record date

Effective date

December 31,
March 24, 20172016

3. Share acquisition rights
Share acquisition rights as stock options
Outstanding balance of share acquisition rights as of the end of the current fiscal year

335,900 shares(Notes to financial instruments)
1. Status of financial instruments
The Group restricts its fund management to highly secure and short-term financial services and deposits, etc. withinvestment within the range of surplus funds and conducts no speculative transactions.
The Group raises funds mainly by loans and bonds from financial institutions such as banks.
Notes receivable-trade, trade accounts receivable and accounts receivable-other are exposed to credit risks of theGroup’s customers but the Group manages the due date and residual value for each customer in order to estimate thecollectability at an early stage and minimize bad debt risks.
Marketable securities and investment securities mainly comprise listed stocks and bonds subject to market pricefluctuation risk. The Group monitors its holdings reflecting on relationships with business partners who are the issuersof such instruments and periodically verifies their fair value and financial position.
Payment due dates for most accounts payable-trade, accounts payable-other and accrued expenses are within one year.
2. Fair value of financial instruments
Consolidated balance sheet amounts, fair value and the difference as of December 31, 2016 are as follows. The following
chart does not include instruments whose fair values are extremely difficult to determine. (Please refer to Note 2.)(Million yen)
Consolidated balance
Fair value
Difference
sheet amounts(1) Cash and deposits
16,357
16,357―(2) Notes and accounts
43,51043,510―receivable-trade(3) Investment securities
6,107
6,107
―
65,97565,975―

21,607

21,607―36,36636,366―(3)

Account payable-trade
Accounts payable-otherand accrued expenses
Bonds

Total Assets

30,00030,06666(4)Long-term loans payable

15,52015,390(130)

103,495

103,431

(63)

(1)
(2)

Total Liabilities

4

(Note) 1. Calculation method of fair value of financial instruments and marketable securities
Assets(1) Cash and deposits and (2) Notes and accounts receivable-trade:
The fair value of the above instruments is almost equivalent to the book value because their settlement is short term,
and thus the book values are presented.
(3) Investment securities:
The fair value of listed stocks is determined at the relevant stock exchange and the price of claims is determined at
the relevant stock exchange or suggested by the relevant financial institutions.
Liabilities(1) Accounts payable-trade and (2) Accounts payable-other and accrued expenses:
The fair value of the above instruments is almost equivalent to the book value because their settlement is short term,
and thus the book values are presented.
(3) Bonds:
The fair value of bonds is determined based on the market price, etc. The bonds redeemable within one year
recorded in the consolidated balance sheets are included in this item.
(4) Long-term loans payable:
As for the calculation of the fair value for the long-term loans payable, when the loan interest rate is fixed, the fairvalue is calculated by discounting the total of principal and interest using the estimated interest rate should a similar
new loan be made, and when the loan interest rate is variable, the fair value is based on the book value since thevalue reflects the market interest rate in a short period of time and therefore the fair value and the book value arealmost identical. The long-term loans payable due within one year recorded in the consolidated balance sheets areincluded in this item.
(Note) 2. Financial instruments whose fair value is extremely difficult to determine.
(Million yen)
Item
Consolidated balance sheet amounts
Investment securities
1,800
Unlisted stocks
Stocks of subsidiaries and affiliates
650
The above financial instruments are not included in the chart in “2. Fair value of financial instruments” as they
have no market price and their fair values are extremely difficult to determine.
(Note) 3. Monetary claims and marketable securities with maturity redeemable after the balance sheet date(Million yen)Item12,199Over one year
and within five
years―

Over five years
and within ten
years―

43,510――――55,709

―
―

500
500

―
―

Within one Year

Deposits
Notes and accounts
receivable-trade
Investment securities
Available-for-salesecurities with maturity
Claims (bonds)
Total

Over ten years―(Note) 4. Bonds, long-term loans payable and other interest-bearing debt due after the balance sheet date(Million yen)
Item
Long-termloans payable
Bonds
Total

Over one year
within two
yearsOver twoyears within
three years

Over three
years withinfour years

Over four
years within
five years

1,855

1,799

1,520

1,274

1,071

8,000

14,00015,855

―
1,799

―
1,520

16,00017,274

―
1,071

―
8,000

Within one
year

Over five
years(Notes to real property)
The statement is omitted as the total amount of real property including lease was immaterial as of the end of the current
fiscal year.

5

(Notes to per share information)
1. Net assets per share
2. Net income per share
The calculation basis for net income per share is as follows.
Net income attributable to owners of parent
Amount not attributable to common shareholders
Net income attributable to owners of parent pertaining to common stock
Average number of shares of common stock during the period

1,836.64 yen
84.51 yen
10,718 million yen- million yen
10,718 million yen
126,837,892 shares(Additional information)
Restatement of amounts of deferred tax assets and liabilities due to changes in rates of income taxes, etc.
Following the promulgation of the “Act on Partial Revision of the Income Tax Act, etc.” (Act No. 15 of 2016) and the“Act on Partial Revision of the Local Tax Act, etc.” (Act No. 13 of 2016) on March 31, 2016, income tax rates havebeen changed from the fiscal years starting on and after April 1, 2016. As a result, the effective statutory tax rate used
to calculate deferred tax assets and deferred tax liabilities has been changed as follows depending on the time ofelimination of temporary differences.
Temporary difference to be eliminated by December 31, 2016: 33.0%
Temporary difference to be eliminated from January 1, 2017 to December 31, 2018: 30.8%
Temporary difference to be eliminated from January 1, 2019: 30.6%
Due to this change in the tax rate, the amount of deferred tax assets (net of deferred tax liabilities) decreased by 558
million yen, income taxes-deferred increased by 451 million yen, and valuation difference on available-for-salesecurities increased by 41 million yen, and remeasurements of defined benefit plans decreased by 148 million yen.

6N o t e s

t o

F i n a n c i a l

S t a t e m e n t s(Notes to significant accounting policies)
1. Valuation standards and methods for assets(1) Valuation standards and methods for marketable securities
Stocks of subsidiaries and affiliates:
Cost method based on the moving average method
Available-for-sale securities with fair value:
Fair value method based on the market price, etc. as of the financial closing date(Valuation differences are all reported as a component of shareholders’ equity andcost of products sold is calculated by the moving average method)
Available-for-sale securities without fair value:
Cost method based on the moving average method(2) Valuation standards and methods for inventories:
Merchandise and finished goods: Cost method based on the gross average method(Balance sheet amounts are calculated by the inventory write-down method based on decline
in profitability)
Raw materials: Cost method based on the gross average method(Balance sheet amounts are calculated by the inventory write-down method based on decline inprofitability)
Supplies:
Mainly cost method based on the moving average method(Balance sheet amounts are calculated by the inventory write-down method based on decline inprofitability)
2. Depreciation method for fixed assets
Tangible fixed assets(excluding lease assets):

Intangible fixed assets(excluding lease assets):
Lease assets:

Straight-line method
Useful lives of the major items are as follows.
Buildings:
2-58 years
Machinery and equipment:
2-20 years
Sales equipment:
4-9 years
Straight-line method
The straight-line method is applied to software based on internal useful life
(within 10 years).
Lease assets in non-ownership-transfer finance lease transactions
Straight-line method setting the lease period as the useful lives and the residual
value as zero

3. Basis for recording provisions and allowances
・Allowance for doubtful accounts:
In preparation for bad debt loss of receivables such as accounts receivable-trade, the unrecoverable amounts for generalaccounts receivables and specific receivables such as doubtful accounts receivable are recorded in consideration of theloan loss ratio and the individual collectability, respectively.
・Provision for bonuses:
In preparation for payout of employees’ bonuses, the estimated amount as of the end of the current fiscal year is recorded
・Provision for directors’ bonuses:
In preparation for payout of directors’ bonuses payout, the estimated amount as of the end of the current fiscal year isrecorded.
・Provision for retirement benefits:
In preparation for payout of retirement benefits for employees, the amount recognized as of the end of the current fiscal
year is recorded based on estimated amounts of retirement benefit obligations and pension assets as of the end of thecurrent fiscal year.
Actuarial differences are allocated by the straight-line method using a certain number of years (mainly 13 years) within
the employees’ average remaining years of service when incurred and the amount is expensed from the following fiscal
year.
Past service costs are allocated by the straight-line method using a certain number of years (mainly 13 years) within theemployees’ average remaining years of service and expensed when incurred.
・Provision for environmental measures:7In preparation for disposal of polychlorinated biphenyl waste kept in storage, the amount recognized as of the end of thecurrent fiscal year is recorded.
・Provision for contract loss:
In preparation for payment of system usage fees after cancellation under the contracts, the estimated amount is recorded.
4. Other significant matters as the basis for preparation of the financial statements
Accounting treatment for consumption taxes: Tax exclusion method(Notes on changes to the accounting policy)(Application of accounting standard for business combination, etc.)
Effective from FY2016, the Company has adopted the “Accounting Standard for Business Combinations” (ASBJ
Statement No. 21, issued on September 13, 2013), the “Accounting Standard for Business Divestitures” (ASBJ
Statement No. 7, issued on September 13, 2013), etc. Accordingly, the Company has changed the accounting method
to record acquisition-related costs as expenses for the fiscal year in which they are incurred. For business combinations
occurring on or after the beginning of FY2016, the Company has changed the accounting method to record theadjustment to the acquisition cost allocation amount arising from the finalization of the tentative accounting treatmentin the non-consolidated financial statements of the fiscal year in which the relevant business combination occurs.
The adoption of the Accounting Standard for Business Combinations and other standards is in line with the transitional
treatment specified in paragraph 58-2 (4) of the Accounting Standard for Business Combinations and paragraph 57-4
(4) of the Accounting Standard for Business Divestitures. The Company applies these accounting standards
prospectively from the beginning of FY2016 onward.
In FY2016, these changes had no impact on the non-consolidated financial statements.
(Changes in accounting estimates)(Changes to useful life)
Regarding tangible fixed assets held by the Group, the useful life of machinery and equipment used for manufacturing
purposes had been defined as 10 years. The Group has formulated a systematic maintenance policy for machineryand equipment which lead to progress in internalizing maintenance, as well as implemented a new production structure
for the entire Group upon the absorption-type merger with Sendai Coca-Cola Bottling Co., Ltd. in January 2016. Taking
this occasion, the Company re-examined elements such as the physical durability and lifecycle of manufacturingmachines. As a result, effective from FY2016, the Company has revised their useful lives to 7-20 years prospectively
based on the estimated economic useful life reflecting the actual usage status.
In accordance with this change, gross profit, operating income, and ordinary income for FY2016 increased by 650
million yen, respectively, and income before income taxes increased by 649 million yen, compared with the previous
method.
(Notes to changes in presentation)“Long-term deposits received” (366 million yen for FY2016), which was stated separately as a breakdown of“Noncurrent liabilities” for FY2015, is included in “Other” from FY2016 due to decreased significance.
(Notes to balance sheet)
1. Accumulated depreciation of tangible fixed assets
Accumulated depreciation includes accumulated impairment loss.
2. Monetary claims and obligations against affiliates
Short-term monetary claims
Short-term monetary obligations
Long-term monetary obligations

249,355 million yen

3,121 million yen
8,946 million yen
76 million yen(Notes to statement of income)1. Trading volume with affiliates
Sales
Purchase of goods
Other business transactions
Non-business transactions

22,175 million yen
281,394 million yen
24,009 million yen
489 million yen

82. Penalty on lease contract cancellation was mainly attributable to cancellation of lease contracts for manufacturing
equipment.
3. Breakdown of restructuring cost is as follows.
Special retirement benefits:
Integration Cost
(Notes to statement of changes in Net Assets)
Class and total number of treasury stock
Number of shares as ofJanuary 1, 2016
Treasury stock
Common stock
855,654
Total
855,654

106 million yen
81 million yen

Increase in shares
in FY2016

Decrease in shares
in FY2016

Number of shares as ofDecember 31, 2016

3,346
3,346

19,793
19,793

839,207839,207

1. The increase in the number of treasury shares is due to purchase of odd lot shares.
2. The decrease in the number of treasury shares is due to sale by the Company of odd lot shares and exercise of stock
options.

(Notes to tax effect accounting)
1. Breakdown of deferred tax assets and deferred tax liabilities by cause(1) Current assets
Deferred tax assets

Amount of loss carried forward

563 million yen
786 million yen
170 million yen
758 million yen
2,278 million yen

Provision for bonuses
Accrued enterprise tax
OthersTotal deferred tax assets(2) Noncurrent liabilities
Deferred tax assets
Valuation difference on land
Loss on valuation of stocks of subsidiaries and affiliates
Provision for retirement benefits
Provision for contract loss
Provision for environmental measures
Excess amount of depreciation
Excess amount of software depreciation
Excess amount of amortization of deferred assets
Obligation on retirement of noncurrent assets
Impairment loss
Other
Subtotal of deferred tax assets
Valuation reserve
Total deferred tax assets
Deferred tax liabilities
Valuation difference on land
Valuation difference on available-for-sale securities
Obligation on retirement of noncurrent assets
Total deferred tax liabilities
Net deferred tax liabilities

9

3,081 million yen
252 million yen
3,581 million yen
176 million yen
91 million yen
2,559 million yen
103 million yen
266 million yen
252 million yen
96 million yen
1,020 million yen
11,483 million yen(4,319) million yen
7,163 million yen(4,820) million yen(1,147) million yen(36) million yen(6,004) million yen
1,159 million yen

2. Breakdown of major factors for significant variances between the effective statutory tax rate and the actual tax rate forincome taxes, etc. after application of tax effect accounting
Effective statutory tax rate
33.0%
(Adjustment)
Gain on extinguishment of tie-in shares-21.3
Permanent differences-income (dividend income, etc.)-8.2
Permanent difference-expenses (entertainment expenses, etc.)
1.0
Inhabitation tax on per capita basis
0.9
Impacts of tax rate change
2.5
Increase (decrease) in valuation reserve
0.1
Other
-0.2
Income tax rate, etc. after application of tax effect accounting
7.8%
3. Restatement of amounts of deferred tax assets and liabilities due to changes in rates of income taxes, etc.
Following the promulgation of the “Act on Partial Revision of the Income Tax Act, etc.” (Act No. 15 of 2016) and the “Acton Partial Revision of the Local Tax Act, etc.” (Act No. 13 of 2016) on March 31, 2016, income tax rates have beenchanged from the fiscal years starting on and after April 1, 2016. As a result, the effective statutory tax rate used to
calculate deferred tax assets and deferred tax liabilities has been changed as follows depending on the time ofelimination of temporary differences.
Temporary difference to be eliminated by December 31, 2016: 33.0%
Temporary difference to be eliminated from January 1, 2017 to December 31, 2018: 30.8%
Temporary difference to be eliminated from January 1, 2019 onwards: 30.6%
The impact of this change in the tax rate is immaterial.
(Notes to transactions with related parties)
1. Subsidiaries and affiliates
Affiliation

Name ofcompany

Relationship
Voting rights(owned)Business
Concurrent(%)
In businessduties

Subsidiary

Coca-Cola
East Japan
Products
Co., Ltd.

Purchase of
products,
Lending offunds

Affiliate

Coca-Cola
Business
Sourcing Co.,Ltd.

Direct 100

Direct 39.8

Beveragebusiness

Beveragebusiness2

3

Purchase ofrawmaterials
and sales
equipment

Transaction
Purchase of
products(Notes 1,4)
Lending offunds(Notes 3,4)
Purchase of
raw materials(Note 2)
Purchase of
sales
equipment(Note 2)

Transaction
value(Million yen)

Closingbalance(Million
yen)

Item

252,482－－

12,617－－

Accounts

17,317 payable-trade
Accounts

7,446 payable-other

4,544
712

Consumption taxes, etc. are not included in the above transaction values, but included in the closing balance.
Transactions terms and conditions and policy for the decision thereof, etc.
(Notes) 1. Product purchase is based on the Management Agreement concluded with Coca-Cola East Japan Products
Co., Ltd.
2. Each purchase is determined in consideration of market prices, etc.
3. The Company uses CMS (Cash Management System) for efficient management of the Group’s funds. Capitalloan interest rates are determined logically in view of the market interest rate. The transaction price is net based.
4. As of October 1, 2016, an absorption-type merger was implemented where the Company is the surviving
company and Coca-Cola East Japan Products Co., Ltd. was the dissolved company. The transaction amountstated above corresponds to the transactions between the related parties in the period concerned.

10

2.

Fellow subsidiary
Affiliation

Name ofcompany

Votingrights(owned)(%)

Business

Subsidiary ofentity holding
the Company
as affiliate

Coca-Cola(Japan)Co., Ltd.
(Note)(Owneddirect)13.18

Manufacturing
and sales ofsoft drinks

Relationship
ConcurrentIndutiesbusiness－－

Transaction
Receivingof rebates
Purchaseof liquid
concentrate

Transaction
value(Million yen)

Item

Closingbalance(Million yen)

71,435

Accounts
receivable-other

6,913

37,457

Account
payable-trade

7,238

Consumption taxes, etc. are not included in the above transaction values, but included in the closing balance.
Transactions terms and conditions and policy for the decision thereof, etc.
(Note)
Transactions with Coca-Cola (Japan) Co., Ltd. are based on the agreement concluded with The Coca-Cola Company
and Coca-Cola (Japan) Co., Ltd. concerning manufacturing and sales of Coca-Cola products and the fee for use of theregistered trademark.
(Notes to per share information)
1. Net assets per share
2. Net income per share
The calculation basis for net income per share is as follows.
Net income
Amount not attributable to common shareholders
Net income pertaining to common stock
Average number of shares of common stock during the period

1,896.69 yen
144.99 yen
18,390 million yen- million yen
18,390 million yen
126,837,892 shares(Notes on business combinations)
Transactions under common control
1. Merger with Sendai Coca-Cola Bottling Co., Ltd.
In accordance with the resolutions by the Board of Directors on June 15, 2015 and November 6, 2015, the Company
implemented an absorption-type merger with its wholly-wned subsidiary Sendai Coca-Cola Bottling Co., Ltd. on January
1, 2016.
(1) Overview of the transaction
1) Name and business of the merged company
Name of the merged company: Sendai Coca-Cola Bottling Co., Ltd.
Business: Manufacturing and sales of soft drinks
2) Date of business combination: January 1, 2016
3) Legal form of business combination
Absorption-type merger with the Company as the surviving company. Sendai Coca-Cola Bottling Co., Ltd. was thedissolved company.
4) Post-merger company nameCoca-Cola East Japan Co., Ltd.
5) Overview of other matters concerning the transaction
The Company conducted an absorption-type merger with Sendai Coca-Cola Bottling Co., Ltd. with the aim of further
strengthening the market competitiveness of the Group.
(2) Overview of accounting procedures
Processed as transactions under common control, based on the “Accounting Standard for Business Combinations”(ASBJ Statement No. 21, issued on September 13, 2013) and “Guidance on Accounting Standard for Business
Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10, issued on September 13,2013).
2. Merger with Coca-Cola East Japan Products Co., Ltd.
In accordance with the resolution by the Board of Directors on May 13, 2016, the Company implemented an absorptiontype merger with its wholly-owned subsidiary Coca-Cola East Japan Products Co., Ltd. on October 1, 2016.
(1) Overview of the transaction
1) Name and business of the merged company
Name of the merged company: Coca-Cola East Japan Products Co., Ltd.
Business: Manufacturing and distribution of soft drinks, maintenance of sales equipment

112) Date of business combination: October 1, 2016
3) Legal form of business combination
Absorption-type merger with the Company as the surviving company. Coca-Cola East Japan Products Co., Ltd. was
the dissolved company.
4) Post-merger company nameCoca-Cola East Japan Co., Ltd.
5) Overview of other matters concerning the transaction
The Company conducted an absorption-type merger with Coca-Cola East Japan Products Co., Ltd. with the aim offurther strengthening the market competitiveness of the Group.
(2) Overview of accounting procedures
Processed as transactions under common control, based on the “Accounting Standard for Business Combinations”(ASBJ Statement No. 21, issued on September 13, 2013) and “Guidance on Accounting Standard for Business
Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10, issued on September 13,2013).

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