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

(Translation)
March 4, 2020

Dear Shareholder,

INTERNET DISCLOSURE OF INFORMATION FOR THE NOTICE OF THE
ORDINARY GENERAL MEETING OF SHAREHOLDERS(ITEMS DEEMED TO BE PROVIDED IN ACCORDANCE WITH LAWS AND
REGULATIONS AND THE ARTICLES OF INCORPORATION)

In accordance with laws and regulations and the provisions of Article 16 of the Company’s
Articles of Incorporation, the following matters have been omitted from the attachment to
the Notice of the Ordinary General Meeting of Shareholders for the fiscal year ended
December 31, 2019 due to their posting on the Company’s website (https://www.ccbjholdings.com/). Thank you for your understanding in this matter.

(1) “Main Businesses,” “Major Locations, etc.,” “Status of Employees,” and“Major financial institutions providing loans to the Company” within“Current Status of the Coca-Cola Bottlers Japan Holdings Group” in theBusiness Report(2) “Accounting Auditor”, “The system to ensure business adequacy” and “Basic
Policies on the Control of the Joint-stock Company” under “Current status of
the Company” in the Business Report(3) Consolidated Statements of Changes in Equity and Notes to Consolidated
Financial Statements in Consolidated Financial Statements.
(4) Non-consolidated Statement of Changes in Shareholders’ Equity and Notes to
Non-consolidated Financial Statements in Non-consolidated Financial
Statements.

1-2

3-11
12-29

30-34

1.

Current Status of the Corporate Group(1) Main Businesses (As of December 31, 2019)
Coca-Cola Bottlers Japan Group (the “Group”) operates the following businesses:
a. Beverage Business
The group manufactures and sells Coca-Cola, soft drinks and other beverage products.
The Company has contracts with The Coca-Cola Company and Coca-Cola (Japan)
Company that govern the production and sales of Coca-Cola and other products andthe use of trademarks.
b. Healthcare & Skincare Business
The company manufactures and sells vegetable juice made from kale and other healthfood products as well as cosmetics and their related products.
Names of segments
Beverage Business
Healthcare & Skincare Business

Description
Manufacturing and sales of beverage products, the vending machinerelated business, the procurement of raw materials and materials, thedevelopment, maintenance, and operations of information systems, thereal estate business, and the insurance agency business
Manufacture and sales of health food, cosmetics and their related
products, and investment business(2) Major Locations, etc. (as of December 31, 2019)a. Location of the Company
Headquarters: 9-7-1 Akasaka, Minato-ku, Tokyo
Head Office: 7-9-66 Hakozaki, Higashi-ku, Fukuoka, Japanb. Locations of headquarters offices of major subsidiaries:
Names

Locations

Coca-Cola Bottlers Japan Inc.

Minato-ku, TokyoFV Japan Co., Ltd.

Toshima-ku, Tokyo

Coca-Cola Bottlers Japan Vending Inc.

Higashi-ku, Fukuoka-city

Coca-Cola Bottlers Japan Business Services Inc.

Higashi-ku, Fukuoka-city

Q’SAI CO., LTD.

Chuo-ku, Fukuoka-city

c. Major production bases(a) Beverage business
Zao Plant (Miyagi), Ibaraki Plant (Ibaraki), Iwatsuki Plant (Saitama), Saitama Plant(Saitama), Tama Plant (Tokyo), Ebina Plant (Kanagawa), Hakushu Plant (Yamanashi),
Tokai Plant (Aichi), Kyoto Plant (Kyoto), Akashi Plant (Hyogo), Daisen Plant(Tottori), Komatsu Plant (Ehime), Kiyama Plant (Saga), Tosu Plant (Saga), Kumamoto
Plant (Kumamoto), Ebino Plant (Miyazaki)-1-(b) Healthcare/skincare businessFukuoka Kounominato Plant (Fukuoka)

d. Sales bases(a) Beverage business
A variety of locations in 38 prefectures within Southern Tohoku, Kanto, Koshinetsu,
Chubu, Kinki, Chugoku, Shikoku and Kyushu areas(b) Healthcare/skincare business
The products are mainly sold through television shopping and other mail-order system.
(3)

Status of Employees (As of December 31, 2019)
Names of segments

Beverage business
Healthcare & Skincare business
Total

Number of employees

Year-on-year change

16,465

-150

494

+9

16,959-141

Note: The number of employees above shows the number of persons on active service.

(4)

Major Financial Institutions Providing Loans to the Company (As of December 31, 2019)
Names of institutions

Amount of loans

MUFG Bank, Ltd.

6,152 million yen

Sumitomo Mitsui Banking Corporation

3,848 million yen-2-2. Current Status of the Company(1) Accounting Auditor
a. NameErnst & Young ShinNihon LLC
b. Amount of Remuneration
Categories

Amount paid

Remuneration for services stipulated in Article 2, Paragraph 1 of
the Certified Public Accountants Act

71 million yen

Remuneration for services other than those stipulated in Article 2,
Paragraph 1 of the Certified Public Accountants Act

3 million yen

Remuneration by the Company and/or its subsidiaries to the
Accounting Auditor

Remarks(Note)

203 million yen

Notes:
1.

The audit contract between the Company and the accounting auditor does not distinguish between remuneration
paid for the audit conducted in accordance with the Companies Act and remuneration paid for the audit conductedin accordance with Financial Instruments and Exchange Act. Accordingly, the amount above is the aggregate
amount.

2.

The Audit and Supervisory Committee confirmed and reviewed the appropriateness and adequacy of the audit
plans, audit hours, implementation status and grounds for the estimate of the remuneration as submitted by theaccounting auditor before granting approval to the remuneration payable to the accounting auditor.

c. Contents of Non-Audit Services
The Company paid the Accounting Auditor remuneration, etc. for the preparation of acomfort letter in connection with the issuance of corporate bonds, which is a service
other than those stipulated in Article 2, Paragraph 1 of the Certified Public Accountants
Act (non-audit service).
d. Policy on Decisions on Dismissal or Non-Reappointment of Accounting Auditor
In the case that it is reasonably judged that the accounting auditor falls under any ofthe dismissal events listed in the items of Article 340, Paragraph 1 of the Companies Act,
the Audit and Supervisory Committee will remove the accounting auditor with theconsent of all members. In this case, a Committee member selected by the Audit andSupervisory Committee will disclose the removal and its reason at the Meeting of
Shareholders convened for the first time after the removal.
Additionally, concerning dismissal or non-reappointment of the accounting auditor,
the Audit and Supervisory Committee shall decide contents of a proposed resolution theysubmit to the General Meeting of Shareholders, in the event they judge it necessary to-3-

do so in cases such as where the accounting auditor is recognized to have difficulty inproperly fulfilling its auditing duties.
(2) The System to Ensure Business Adequacya. Overview of the system to ensure business adequacy
In order to establish the system to ensure that the jobs conducted by the Directors comply
with the laws and regulations and the Articles of Incorporation, and other systems to ensure
appropriateness of operation (to be referred to as “internal control” hereinafter), the Company
has made a resolution on “the Internal Control System Basic Policy” at the Board of Directors
Meeting. Please note that a part of the Policy has been reviewed at the Board of Directors
Meeting held on March 26, 2019.
The Basic Policy after being reviewed is as shown below.
(a) System to ensure that performance of duties by Directors and employees of theGroup conforms to laws and regulations and the Articles of Incorporation①

The “Code of Conduct” shall be established in order to ensure that all the Directors,
Executive Officers, and employees of the Group comply with laws and regulations
and the Articles of Incorporation to act in conformity with social norms. The Ethics& Compliance Committee shall be convened periodically in order to reinforce thecompliance system and to prevent non-compliance.

②

An internal whistle-blowing system against non-compliance, namely, a reportingand consultation contact separate from the reporting line to immediate managers,
shall be set up.

③

The oversight function of the Board of Directors shall be reinforced by adopting
the company system where Audit and Supervisory Committee is established in orderto ensure auditing by the Audit and Supervisory Committee, which is comprised
exclusively of Outside Directors.

④

The department in charge of internal auditing shall be established in order to audit
whether business activities are conducted appropriately and effectively in
conformity with laws and regulations, the Articles of Incorporation, Company Rules
and Regulations, etc.

⑤ The Company clearly identifies the firm stance against anti-social forces andorganizations that cause threats to the orders and safety of civil society and that theCompany never ties with such entities. The Company shall never accede to any
illegal request and deal with any such request in cooperation with the police, lawyers,
etc.

-4-

(b) System to retain and manage information related to Directors’ performance of
their duties①

The Company shall record information regarding minutes of General Shareholders
meetings, minutes of Board of Directors meetings, documents and other materials
related to important decision-makings and Directors’ performance of their duties indocuments or electronic media and retain it in accordance with the Rules ofDocumentation Handling and Information Security Policy in a manner similar to thatfor statutory documents.

②

The Company’s Directors may inspect such documents, etc. at any time.

(c) Regulations and other systems concerning loss risk management of the Group①

In accordance with the Group policy on responding to material business risks andfrom the viewpoint of management of other risks, significant items shall be reported
to the Risk Management Committee, and the Committee shall determine policies todeal with risks as required.

②

The Company establishes rules, guidelines, etc. and maintains an organization to
execute effective response to material risks, and ensure the matters to be passed down
by implementing training for the entire Group, etc.

③

The department in charge of risk management in the Company or its subsidiaries
is to monitor the condition of company-wide risks and to take appropriate measures
on a group-wide basis. The Company promptly designates who is in charge of the
response to new risks that arise.

(d) System to ensure efficiency of performance of duties by the Group Directors①

The Company’s Board of Directors shall determine Group-wide management
policy and goals shared by the Directors, Executive Officers, employees and othersof the Group, and determine the efficient method to achieve the goals including theallocation of authority based on the group’s decision-making rules.

②

In addition to Board of Directors meetings, appropriate forums, such as theimportant meetings held within the operating companies, shall be organized todeliberate significant matters affecting the entire Group, thereby ensuring thatdecisions are reached based on considerations of multi-dimensional aspects.

(e) System to ensure appropriateness of operations in a corporate group, which
consists of the Company and its subsidiaries
The Company shall ensure management integration of the Group throughestablishment of a corporate philosophy, management policy, the Code of BusinessConduct & Ethics and Chart of Authority common throughout the Group and supervise-5-and manage the performance of the subsidiaries’ operations.
(f) Matters concerning employees assisting the Audit and Supervisory Committee to
execute the duties if the Audit and Supervisory Committee request the assignmentof such employees, matters concerning the independence of such employees from
Directors (excluding Directors serving on the Audit and Supervisory Committee)
and matters related to ensuring the effectiveness of instructions given by the Audit
and Supervisory Committee to such employees
The Company shall assign employees assisting the Audit and Supervisory
Committee. Such employees shall execute the duties under the instructions given by
the Audit and Supervisory Committee in assisting executions of duties by the Audit
and Supervisory Committee and shall not receive instructions from Directors(excluding Directors serving on the Audit and Supervisory Committee).
(g) System for reporting by Directors and employees of the Group to the Audit andSupervisory Committee and systems to ensure that reporting parties do not receive
disadvantageous treatment as a result of such reports①

Upon discovery of any incident that could cause the Group substantial damage,such as acts in violation of laws and regulations, the Directors (excluding Directors
serving on the Audit and Supervisory Committee), Executive Officers, employees
and others of the Company shall immediately report the matter to the Audit andSupervisory Committee.

②

The Internal Audit Department shall regularly report internal audit results and thestatus of other activities in the Group to the Audit and Supervisory Committee.

③

The department in charge of compliance shall regularly report the status of whistleblowing in the Group to the Audit and Supervisory Committee.

④

The Company shall prohibit unjust treatment of the reporter to the Audit andSupervisory Committee, and ensure that this matter would be informed to all the
Executive Officers and employees of the Group.
(h) Matters concerning procedures for advance payment or reimbursement ofexpenses incurred in the course of performance of duties by Directors serving on
the Audit and Supervisory Committee and policies related to processing expenses
or liabilities arising from performance of duties by Directors serving on the Audit
and Supervisory Committee
The Company establishes enough budget for Directors serving on the Audit andSupervisory Committee each year to fulfill the performance of their duties.

-6-

(i) Other systems to ensure that the Audit and Supervisory Committee’s audit isconducted effectively①

The Representative Director and the Audit and Supervisory Committee member
shall hold a meeting on a regular basis to exchange opinions in order to communicate
with each other.

②

The Representative Director shall prepare an environment so that the Audit andSupervisory Committee member is able to cooperate with external experts, such as
lawyers and certified public accountants, in the course of its duties whenever it
deems it necessary.

③

The Audit and Supervisory Committee shall regularly provide opportunities for theexchange of opinions with the Internal Audit Department and accounting auditor.

b. Overview of the operational status of the system to ensure business adequacy(a) Initiative for ensuring compliance
The Company has developed its corporate philosophy and Code of Business Conduct& Ethics for the entire Group so that all officers and employees will comply with laws
and regulations and the Articles of Incorporation to act in conformity with social norms,
and notifications are being ensured.
Additionally, the Group Ethics & Compliance Committee, chaired by the President, isheld to work upon reinforcement of the compliance structure and prevention of
occurrence of non-compliance cases.
Furthermore, Regulations for Handling Whistle-Blowing have been developed, and aninternal whistle-blowing system is being operated by establishing Ethics &Compliance Reporting Hotline internally and at an external law office and specialized
agencies to work upon early detection and improvement of non-compliance cases.
(b) Initiative on loss risk management
The Company has developed the Group Rules of Risk Management, and is working
upon preventing occurrence of various risks that may arise for the Company and isensuring the acts for minimizing the damage in case any risk occurs in a prompt andadequate manner.
Furthermore, in order to minimize damage caused by natural disasters, etc., disaster
drills and safety confirmation drills are being held assuming an outbreak of a largescale disaster.

-7-

(c) Initiative on ensuring adequacy and efficiency of the jobs conducted
The Company has established the Audit and Supervisory Committee in order to further
enrich deliberation on matters with particular importance at the Board of Directors
Meeting, whereas determination on conduct of other businesses is entrusted to the
Directors.
Additionally, authority is delegated to Executive Officers and Heads of Functions /Departments so that decisions are made regarding business conduct based on theapproval authority standard in accordance with the Group operational structure toensure acceleration and streamlining of management decisions made by the
management members.
(d) Initiative on ensuring that audit by the Audit and Supervisory Committee be conductedin an effective manner
The Audit and Supervisory Committee members audit the status of business conduct
by the Directors, Executive Officers, and employees in accordance with relevant laws
and regulations, the Articles of Incorporation, and the Regulations of the Audit &Supervisory Committee prepared by the Audit and Supervisory Committee byattending the Board of Directors meeting, and by referring to the audit results, etc.
provided by the department in charge of internal audit and the accounting auditor.
The Audit and Supervisory Committee members periodically exchange opinions
regarding such audit results with the Representative Directors.
(3) Basic Policies on the Control of the Joint-stock Company
The basic policies have been partially revised in the Board of Directors meeting convened
on February 13, 2020. The contents of the revised basic policies are as follows.
a. Details of Basic Policy
The Company believes that the persons who control decisions on the Company’s
financial and business policies need to understand the source of the Company’s corporate
value and will make it possible to continually and persistently ensure and enhance theCompany’s corporate value and, in turn, the common interests of its shareholders. The
Company believes that a decision on any proposed acquisition that would involve achange of corporate control of the Company should ultimately be made based on theintent of its shareholders as a whole. Also, the Company would not reject a large-scaleacquisition of the shares in the Company if it would contribute to the corporate value of
the Company and, in turn, the common interests of its shareholders.

-8-However, there are some forms of large-scale acquisition of shares that benefit neither
the corporate value of the target company nor the common interests of its shareholders:those with a purpose that would obviously harm the corporate value of the target company
and, in turn, the common interests of its shareholders; those with the potential tosubstantially coerce shareholders into selling their shares; those that do not provide
sufficient time or information for the target company’s board of directors andshareholders to consider the terms of the large-scale acquisition of shares, or for the target
company’s board of directors to present a business plan or an alternative proposal; andthose that require the target company to discuss or negotiate with the acquirer in order toprocure more favorable terms for shareholders than those presented by the acquirer.
The Company believes that the persons who control decisions on the Company’s
financial and business policies need to be persons who (A) fully understand theimportance of (i) providing freshness and refreshment to people around the world andembedding the “Coca-Cola” brand, which is now a part of our life style, in local
communities; (ii) striving aggressively to win in the market as the customers’ preferredpartner with a deep understanding of the Company’s corporate philosophy; (iii)appreciating employees who have a strong sense of responsibility to thoroughly pursue
customer satisfaction, and proactively working on building a workplace environment thatcan make each and every employee feel rewarded, motivated and proud of being amember of the Coca-Cola family; and (iv) contributing to local communities andproactively dealing with environmental issues with a strong sense of responsibility as acorporate citizen that continues to strive to assist in the realization of an affluent society,(B) preserve relationships of mutual trust with customers, business partners, shareholders
and employees and perform to their expectations, and (C) make it possible to continuallyand persistently ensure and enhance the Company’s corporate value and, in turn, thecommon interests of its shareholders from a mid- to long-term perspective.
Therefore, the Company believes that a person who would make a large-scaleacquisition of the shares in the Company in a manner that does not contribute to thecorporate value of the Company and, in turn, the common interests of its shareholders
would be inappropriate to become a person who would control decisions on the
Company’s financial and business policies.
The Company believes that it is necessary to ensure and enhance the corporate valueof the Company and, in turn, the common interests of its shareholders by taking thenecessary and reasonable countermeasures against a large-scale acquisition of the sharesin the Company by such a person.

-9-b. Initiatives to realize the basic policies(a) Summary of special initiatives that contribute to realizing the basic policies
The Group not only assumes a leading role in transforming the Coca-Cola businessin Japan by deploying various joint initiatives such as product development and test
marketing with The Coca-Cola Company and Coca-Cola (Japan) Company, Limited(100% funded by The Coca-Cola Company) as a strategic partner, but also strives tobecome a company trusted by the stakeholders of consumers, customers, shareholders
and employees.
While major growth of the soft drink industry cannot be expected as the market has
already matured, the business environment surrounding the Company is projected to
become harsher as the competition between the soft drink companies intensifies.
Under such circumstances, the Group aims at becoming the preferred partner of ourcustomers and consumers in all drinking occasions by establishing a robust andsustainable operating model, pursuing success in high-priority areas, and drasticallytransforming the business to ensure growth.
The Company also made a transition to a company with an Audit and Supervisory
Committee in order to further reinforce the governance system. The Audit andSupervisory Committee serves as the auditing body of the Company that is comprised
exclusively of external directors, including multiple independent external directors. To
strengthen the management oversight function, these external directors that serve as themember of the Audit and Supervisory Committee have each been granted with a voting
right in the Board of Directors meetings, in addition to the right to state their opinions
in shareholders’ meetings on matters pertaining to the designation of board members
and their remuneration, among others. In order to separate the decision-making,business management and business execution functions, the Company is implementing
a corporate executive officer system. In addition the foregoing, for more fruitfuldeliberations of highly important matters in the Board of Directors meetings, theCompany is delegating the authority to make decisions on certain important mattersthat require prompt business executions to specific directors as well as facilitating
speedy decision making of other matters.
(b) Outline of measures to prevent inappropriate persons from controlling the finance andbusiness policy decisions of the Company in light of the basic policy
Upon any substantial acquisition of the Company shares, the Company strives toproactively collect and timely disclose information in order to ensure and improve thecorporate value of the Company and the common interest of shareholders as well as- 10 -

make appropriate measures as needed under the scope permitted by laws andregulations and the Articles of Incorporation.
When Board Meeting determines it necessary to reapply anti-takeover measures inorder to ensure and improve the corporate value of the Company and the common
interest of shareholders, taking into considerations of the future trend of the society, theCompany consults with shareholders at the Meeting of Shareholders as stipulated in the
Articles of Incorporation for decision of the implementation.
c. Decisions of the Company’s Board of Directors regarding specific measures and reasons
thereforThe measure described in the previous b. (a) was introduced as a specific measure tocontinuously and sustainably improve the corporate value of the Company and thecommon interest of shareholders, and is consistent with the Company’s basic policy.
In addition, the measure described in the previous b. (b) was introduced as a specificmeasure to ensure and improve the corporate value of the Company and the common
interest of shareholders as needed under the scope permitted by laws and regulations
and the Articles of Incorporation focusing on the intention of shareholders, and it is notintended to undermine the shareholders’ common interests or preserve the positions of
the Company officers.

- 11 -

Consolidated Statement of Changes in Shareholders’ Equity
For the fiscal year ended December 31, 2019

(Millions of yen)

Equity attributable to owners of the parent company

Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesOther
comprehensive
incomeaccumulated

15,232450,533

182,418

ሺ72,651)

4,915

580,448458

580,906

－

－

ሺ338)

－

－

ሺ338)

－

ሺ338)

15,232450,533

182,080

ሺ72,651)

4,915

580,110458

580,568

Net income (loss) for
the year－－

ሺ57,952)－－

ሺ57,952)56

ሺ57,895)

Other comprehensive
income (loss)

－

－

－

－

5,788

5,788

－

5,788

Total comprehensive
income (loss) for the year－－

ሺ57,952)－5,788

ሺ52,164)56

ሺ52,108)

Dividends of surplus－－

ሺ9,071)－－

ሺ9,071)

ሺ22)

ሺ9,093)Purchase of treasury
shares－ሺ64)－

ሺ13,002)－

ሺ13,066)－

ሺ13,066)

Disposal of treasury
shares

－

ሺ1)

－

3

－

3

－

3

Share-based paymenttransactions

－

57

－

－

－

57

－

57

Reclassification fromaccumulated othercomprehensive income
to retained earnings

－

－

6,315

－

ሺ6,315)－－－

Reclassification fromaccumulated othercomprehensive income
to non-financial assets

－

－

－

－

129

129

－

129

－

ሺ7)

ሺ2,756)

ሺ12,999)

ሺ6,186)

ሺ21,947)

ሺ22)

ሺ21,970)

15,232450,526

121,372

ሺ85,649)4,517

505,999492

506,491

Balance as of January 1,
2019(Before restatement)
Adjustments resulting fromthe adoption of IFRS 16
Balance as of January 1,
2019(After restatement)

Noncontrollinginterests

Total

Total

Comprehensive income forthe yearTransactions with owners,
etc.

Total transactions withowners, etc.
Balance as of December 31,
2019

Note : Amounts less than one million yen are rounded.

- 12 -

Notes to Consolidated Financial Statements(Notes to significant matters as the basis for preparation of consolidated financial statements)
1. Accounting standards of consolidated financial statements
The consolidated financial statements of the Company Group are prepared in accordancewith International Financial Reporting Standards (IFRS) pursuant to Article 120, Paragraph
1 of the Rules of Corporate Accounting.
For the consolidated financial statements, certain disclosure items required by IFRS havebeen omitted pursuant to the provision of the latter part of that paragraph.
2. Matters on the scope of consolidation(1) Number of consolidated subsidiaries: 11(2) Names of major consolidated subsidiaries
The names of major consolidated subsidiaries are as described in “(6) Status of
Significant Subsidiaries” of “1. Current Status of the Coca-Cola Bottlers Japan Group”
in the Business Report.
3. Matters on the application of the equity method(1) Number of affiliates accounted for using the equity method: 2(2) Names of affiliates accounted for using the equity method
APEX Nishi-Nihon Corporation
Resources Co., Ltd.
4. Matters on accounting standards(1) Measurement of financial assets
a. Classification and measurement of financial assets
At initial recognition, financial assets are classified as either subsequently measured
at amortized cost or at fair value. Financial assets measured at fair value throughincome or loss are initially recognized at fair value. Financial assets measured at fairvalue through other comprehensive income or at amortized cost, are initiallyrecognized at fair value plus transaction costs directly attributable to the acquisition.
The Group determines the classification under IFRS 9 based on facts andcircumstances, and designates equity instruments as equity instruments measured atfair value through other comprehensive income.
(a) Financial assets measured at amortized cost
Financial assets are classified as measured at amortized cost if both of thefollowing conditions are met: the objective of the Group's business model is to- 13 -

hold the assets in order to collect contractual cash flows; and the contractual terms
give rise on specified dates to cash flows that are solely payments of principal andinterest on the principal amount outstanding.
(b) Financial assets measured at fair value
If any of two conditions above are not met, financial assets are classified asmeasured at fair value. For financial assets measured at fair value, the Groupmakes the determinations on an instrument-by-instrument basis whether torecognize it as measured at fair value through income or loss, or to makeirrevocable designation as measured at fair value through other comprehensive
income, except for equity instruments held for trading purposes which must be
measured at fair value through income or loss.
For derivatives, see “c. Derivatives and hedging activities.”
Financial assets are subsequently measured as follows according to their classification.
(a) Financial assets measured at amortized cost
These are measured at amortized cost using the effective interest method andadjusted for impairment loss, if any. Amortizations using the effective interest
method and gains or losses on derecognition are recognized in income or loss.
(b) Financial assets measured at fair value
These are measured at fair value at the reporting date. Changes in fair value arerecognized in income or loss or in other comprehensive income depending on theclassification of financial assets. Dividends from equity instruments designated asmeasured at fair value through other comprehensive income are recognized in
Income or loss. When equity instruments designated as measured at fair value
through other comprehensive income are disposed of, cumulative changes in fairvalue recorded in accumulated other comprehensive income are reclassified toretained earnings.
b. Impairment
The Group calculates expected credit losses at the end of each period in order to assesscollectability of financial assets measured at amortized cost. For financial instruments
whose credit risk has not increased significantly since initial recognition, allowancefor doubtful accounts is recognized at an amount of 12-month expected credit losses.
For financial instruments whose credit risk has increased significantly since initialrecognition, allowance for doubtful accounts is recognized at an amount of lifetime
expected credit losses. However, allowance for doubtful accounts for trade receivables- 14 -

are always measured at lifetime expected credit losses.
Interest income of financial assets with significantly increased credit risk and objective
evidence of impairment, is calculated through multiplying the carrying amount of theassets less allowance for doubtful accounts by effective interest rate.
The Group considers the following when determining whether objective evidence ofimpairment exists:・ significant financial difficulty of the issuer or the borrower;
・ a breach of contract, such as a default or delinquency in the payment of interest or
principal;
・ granting of concession for economic or legal reasons related to the borrower's
financial difficulty that the Group would not otherwise consider;・ increased likelihood of bankruptcy or other financial reorganization of theborrower; or・ the disappearance of an active market for that financial asset because of financial
difficulty.
The Group directly reduces the carrying amount of a financial asset when it has no
reasonable expectations of recovering the financial asset in its entirety or a portion
thereof. If the credit risk subsequently decreases and the decrease is clearly attributable
to the event occurring after the recognition of impairment (such as an improvement in
the credit rating of the borrower), the reversal of the impairment is recognized inincome or loss.
c. Derivatives and hedging activities
Derivatives are initially recognized at fair value on the date of contract, andsubsequently remeasured at fair value on each reporting date. The method to recognize
gains or losses arising from remeasurement depends on whether the derivative isdesignated as a hedging instrument and, the nature of the hedged item, if designated.
The Group designates certain derivatives as hedging instruments in cash flow hedge(i.e., hedge of particular risk associated with recognized asset or liability or a highly
probable forecast transaction).
At the inception of the transaction, the Group documents the relationship between
the hedging instrument and the hedged item, as well as its risk management objective
and strategy for undertaking the hedge transaction. The Group also documents its
assessment, both at the hedge's inception and on an ongoing basis, of whether thederivative used in hedging transactions are effective in offsetting changes in cash
flows of the hedged item.

- 15 -

The effectiveness of a hedge is assessed on an ongoing basis, and a hedge isconsidered to be effective when all of the following requirements are met: there is an
economic relationship between the hedged item and the hedging instrument; the effectof credit risk does not dominate the value changes resulting from that economic
relationship; and the hedge ratio of the hedging relationship is the same as that
resulting from the quantity of the hedged item actually hedged and the quantity of thehedging instrument.
The effective portion of changes in fair value of a derivative designated andqualifying as a hedging instrument in cash flow hedges is recognized in othercomprehensive income. Gains or losses related to ineffective portions are recognized
in income or loss immediately.
Accumulated gains or losses recognized through other comprehensive income arereclassified into income or loss in the period in which the cash flows from the hedged
item affect income or loss. However, if a hedged forecast transaction subsequently
results in the recognition of non-financial assets (e.g. inventories, or property, plantand equipment), gains or losses previously recognized in other comprehensive income
are reclassified and directly included in the initial cost of the assets. Such amounts areultimately recognized as cost of sales in the case of inventories, and as depreciation in
the case of property, plant and equipment.
If the qualifying criteria for hedge accounting are no longer met due to the expiry
or sale of the hedging instruments, hedge accounting is discontinued prospectively. If
the hedged future cash flows are still expected to occur, accumulated gains or losses
recognized in other comprehensive income continue to be recognized as accumulated
other comprehensive income. If forecast transaction is no longer expected to occur,
gains or losses recognized in other comprehensive income are immediately
reclassified to income or loss.
(2) Measurement of inventories
Inventories are valued at the lower of cost or net realizable value. Trade discounts,
rebates or other similar items, and interest incorporated into the nominal amount are
deducted from the cost. The production costs include the costs of direct materials and any
direct labor and manufacturing overheads. Net realizable value represents the estimatedselling price less the estimated costs necessary to make the sale and the costs incurred inmarketing, sale and distribution.
(3) Measurement and depreciation or amortization of property, plant and equipment andintangible assets
a. Property, plant and equipment (excluding lease)- 16 -

Property, plant and equipment is measured initially at cost and subsequently carried at
the cost less of any accumulated depreciation and any accumulated impairment losses.
Costs incurred to enlarge, upgrade or improve the items which increase productivity,
capacity or efficiency, or extend the useful lives of the assets are capitalized as anincrease in the cost of the related asset, while repairs and maintenance expenses arecharged to expense as incurred.
The depreciable amount is the cost of the asset less the respective estimated residual
values. The Group depreciates its property, plant and equipment primarily using thestraight-line method over the estimated useful lives, as follows:
Years of estimated useful lives
Buildings and Structures
Machinery, Equipment andVehiclesVending machines

2 – 602 – 20
4–9

The depreciation method, estimated useful lives and residual values are reviewed at
the end of each reporting period, and any necessary changes are applied prospectively
as a change in accounting estimate. The Group does not depreciate its land andconstruction in progress.
b. Goodwill
Goodwill arising from a business combination is not amortized and is subsequently
measured at cost less any impairment losses. It is tested for impairment annually andif events or changes in circumstances indicate a potential impairment.
For the purpose of impairment testing, goodwill is allocated to each cash-generating
unit (“CGU”), which is expected to benefit from the synergies of the combination. A
CGU is the smallest group of assets that generates independent cash inflows, which issmaller than business segments. Each CGU to which the goodwill is allocatedrepresents the lowest level within the entity at which the goodwill is monitored forinternal management purposes.
When the impairment test shows that the recoverable amount of the CGU is lessthan its carrying amount, the impairment loss is recognized for the difference, whichis allocated first to reduce the carrying amount of any goodwill allocated to the CGU,
and then to the other assets of the CGU pro rata on the basis of the carrying amount ofeach asset within the CGU. Any impairment loss on goodwill is recognized in income
or loss and is not reversed in subsequent periods.

- 17 -

c. Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substancefrom which future economic benefits are expected to flow to the Group. Intangible
assets are initially recognized at cost or production cost. After initial recognition,
intangible assets are carried at cost less accumulated amortization and any
accumulated impairment losses. The Group assesses whether the useful life of theintangible asset is identifiable and, if identifiable, evaluates the useful life based on
the period over which the asset is expected to be used.
Intangible assets acquired separately are measured at cost at initial recognition.
Intangible assets acquired in a business combination are recognized separately fromgoodwill and are measured at fair value at the acquisition date when such assets meetthe definition of intangible asset and are identifiable, and their fair values can bemeasured reliably. Expenses incurred for the acquisition of software is carried as
intangible assets. Development costs for internally developed software are carried as
intangible assets when it is technically feasible and it is more likely than not that future
economic benefits will flow to the Group.
Major intangible assets with identifiable useful lives are software and theamortization is determined using the straight-line method over their estimated useful
lives (5-10 years).
The amortization methods estimated useful lives and residual values are reviewed
at the end of each reporting period, and any necessary changes are applied
prospectively as a change in accounting estimate.
Contract related intangible assets
The Group's contract related intangible assets associated with the acquisition of
Coca-Cola East Japan Co., Ltd. are the contracts entered into with The Coca-Cola
Company (“TCCC”) and related to the Group's exclusive rights to manufacture,
distribute and sell under Coca-Cola brand in certain areas.
The term of the contract is 10 years and it will be automatically renewed without
review for renewal or extension.
The Group accounts for contract related intangible assets attributable to the bottlingcontract as intangible assets with indefinite useful lives. The Group believes that it isunlikely that it will not renew or extend the contract considering prior relationships
with TCCC and the possible adverse effects on franchisors from non-renewal of thecontract. Accordingly, there are limitations in predicting the period over which the- 18 -

assets may generate net cash flows.
Contract related intangible assets are not amortized, but are tested for impairment
annually and if events or changes in circumstances indicate a potential impairment.
d. Leases (as a lessee)
When concluding a contract, the Group determines whether the contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys the right tocontrol the use of an identified asset for a period of time in exchange for consideration.
The Group recognizes right-of-use assets and lease liabilities at the commencement
date of the lease. Right-of-use assets are measured at cost on the commencement date.
After the commencement date, the right-of-use assets are measured at cost less any
accumulated depreciation and any accumulated impairment losses using a cost model.
The lease period of the right-of-use asset is estimated as the non-cancellable lease
period, together with both periods covered by an option to extend the lease if the lessee
is reasonably certain to exercise that option; and periods covered by an option toterminate the lease if the lessee is reasonably certain not to exercise that option. Rightof-use assets are depreciated by using the straight line method, generally over 15 years
from the commencement date.
Lease liabilities are measured on the commencement date at the present value of thelease payments that have not been made as of that date. After the commencement date,the carrying amount of the lease liabilities are adjusted to reflect the interest rate on
the lease liabilities and the lease payments made. If the lease liabilities are revised or
the terms of the lease are changed, the lease liabilities will be remeasured and the rightof-use asset will be revised.
(4) Criteria for recording significant provisions
Provisions are recognized when the Group has present legal or constructive obligation
as a result of past events, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation, and a reliable estimate can be made of theamount of the obligation.
Provisions are measured at the present value of the amount required to settle or transfer
the obligation based on the best possible estimation, taking into account the information
available on the event and its consequences. Adjustments arising from discounting theprovision are recognized as finance costs when accrued.

- 19 -

(5) Employee benefits
a. Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A
liability is recognized for the amount expected to be paid if the Group has a present
legal or constructive obligation to pay the amount as a result of past service provided
by the employee and the amount can be estimated reliably.
b. Defined contribution plans
Contributions to defined contribution plans are recognized as expenses for a periodof employees’ providing services.
c. Defined benefit plans
The Group’s net obligation related to defined benefit plans is calculated separately
for each plan by estimating the amount of future benefit that employees have earnedin the current and prior periods, discounting that amount and deducting the fair valueof any plan assets.
The calculation of defined benefit obligations is performed annually by a qualified
actuary using the projected unit credit method.
Remeasurements of defined benefit obligations, which comprise actuarial gains andlosses, the return on plan assets (excluding interest) and the effect of the asset ceiling,
are recognized immediately in other comprehensive income and directly reclassified
to retained earnings from accumulated other comprehensive income. The Group
determines the net interest expense (income) on defined benefit obligations for thecurrent reporting period by multiplying the discount rate used to measure the defined
benefit obligations (assets) at the beginning of the period by the defined benefit
liabilities (assets) and any plan assets.
Any changes in defined benefit obligations (assets) during the period as a result ofcontributions and benefit payments are taken into consideration when calculating thedefined benefit obligations (assets) at the beginning of the period. Net interest expenseand other expenses related to defined benefit plans are recognized in income or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting
change in benefit that relates to past service or the gain or loss on curtailment isrecognized immediately in income or loss. The Group recognizes gains and losses on
the settlement of a defined benefit plan when the settlement occurs.
d. Long-term employee benefits
A liability is recognized for the amount expected to be paid under long-term
employee benefits, if the Group has a present legal or constructive obligation to pay- 20 -

the amount as a result of past service provided by the employee and the amount canbe estimated reliably. The Group's long-term employee benefits are calculated bydiscounting the estimated future benefit to its present value.
The discount rate is determined based on the market yield of AA-rated corporate
bonds at the reporting date, whose remaining period approximates the averageremaining service period of employees.
(6) Accounting of consumption tax, etc.
It is based on the before-tax method.
(7) Recognition of revenue
The Group recognizes revenue from contracts with customers by applying the following
five steps.
IFRS 15:
Step 1: Identify the contracts with customers
Step 2: Identify the performance obligation in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligation in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performanceobligation
The Group sells carbonated beverages, coffee, blended tea, mineral water, other softdrinks and healthcare products. Revenue from these products is generally recognized
upon delivery, as the performance obligation is considered to be satisfied upon delivery
when the customer obtains control over these products. Revenue is measured at theconsideration promised in contracts with customers less discounts, rebates and returns.

- 21 -

(Changes to accounting policy)
The Group has applied the standards and interpretations that have become mandatory from theconsolidated fiscal year under review onwards. Key standards and interpretations are as follows.
New or revised standards
and interpretations

Overview of regulations

IFRS 16 Leases(Announced in January
2016)

New lease standards to replace IAS 17. The lessee should
recognize all leases on the balance sheet in the same way asproperty purchased through financing. The new standards set
out principles for recognition, measurement and disclosure
requirements for leases.

The impact of the application of IFRS 16 is as follows. Note that the impact of this change inaccounting policy on net income per share is not significant.
The Group has applied IFRS 16 retrospectively in accordance with transitional measures, andhas recognized the cumulative impact of applying IFRS 16 as an adjustment to the opening
balance of retained earnings for the consolidated fiscal year under review. In conjunction with thetransition to IFRS 16, decisions made in IAS 17 “Leases” and IFRIC 4 “Determining Whether an
Arrangement Contains a Lease” as to whether a contract is, or contains, a lease are carried overby choosing a practical expedient set forth in paragraph C3 of IFRS 16.
IFRS 16 introduces a single accounting model for leases rather than distinguishing between
finance leases and operating leases; in principle, a lessee must recognize right-of-use assets
representing the right to use underlying assets and lease liabilities representing the obligation to
make lease payments. A choice not to apply the standard’s requirements, however, may be madein the case of short-term leases or leases of low-value assets. After recognizing the right-of-use
assets and lease liabilities, depreciation costs for the right-of-use assets and interest costs for thelease liabilities are recorded.
The Group recognizes the lease period of the right-of-use asset as the non-cancellable lease
period, together with both periods covered by an option to extend the lease if the lessee isreasonably certain to exercise that option; and periods covered by an option to terminate the lease
if the lessee is reasonably certain not to exercise that option. The lessee's incremental borrowing
rate is used as the discount rate applied to the lease liabilities for the right-of-use assets, with aweighted average rate of 1.0% in most cases. Right-of-use assets are depreciated by using thestraight line method, generally over 15 years from the commencement date.
The impact of the application of IFRS 16 is as follows. Note that the impact of this change inaccounting policy on net income per share is not significant.
The Group has applied IFRS 16 retrospectively in accordance with transitional measures, andhas recognized the cumulative impact of applying IFRS 16 as an adjustment to the opening- 22 -

balance of retained earnings for the consolidated fiscal year under review. In conjunction with thetransition to IFRS 16, decisions made in IAS 17 “Leases” and IFRIC 4 “Determining Whether an
Arrangement Contains a Lease” as to whether a contract is, or contains, a lease are carried overby choosing a practical expedient set forth in paragraph C3 of IFRS 16.
IFRS 16 introduces a single accounting model for leases rather than distinguishing between
finance leases and operating leases; in principle, a lessee must recognize right-of-use assets
representing the right to use underlying assets and lease liabilities representing the obligation to
make lease payments. A choice not to apply the standard’s requirements, however, may be madein the case of short-term leases or leases of low-value assets. After recognizing the right-of-use
assets and lease liabilities, depreciation costs for the right-of-use assets and interest costs for thelease liabilities are recorded.
The Group recognizes the lease period of the right-of-use asset as the non-cancellable lease
period, together with both periods covered by an option to extend the lease if the lessee isreasonably certain to exercise that option; and periods covered by an option to terminate the lease
if the lessee is reasonably certain not to exercise that option. The lessee's incremental borrowing
rate is used as the discount rate applied to the lease liabilities for the right-of-use assets, with aweighted average rate of 1.0% in most cases. Right-of-use assets are depreciated by using thestraight line method, generally over 15 years from the commencement date.
In the consolidated statement of financial position at the beginning of the current consolidated
fiscal year underreview, right-of-use assets increased by 44,034 million yen, deferred tax assets
increased by 15,200 million yen, lease liabilities increased by 44,505 million yen, deferred tax
liabilities increased by 15,028 million yen and long-term accounts payable increased by 40
million yen, retained earnings decreased by 338 million yen. Deferred tax assets and Deferred tax
liabilities are offset on the consolidated balance sheets based on IAS 12 “Income taxes”.
(Notes regarding Consolidated Statement of Financial Position)
Accumulated depreciation of property, plant and equipment and right-of-use assets- 23 -

322,585 million yen

(Notes regarding Consolidated Statement of Income)
Other expenses include 655 million yen in business structure improvement expenses relating
to measures implemented with the aim of developing new efficient systems geared to creating
greater value and further boosting productivity, thus paving the way for the Group’s sustainablegrowth. This also includes 9,184 million yen in additional retirement benefits and reemployment
support expenses, which were recognized in connection with the voluntary employee retirement
program resolved at the Board of Directors meeting held on February 14, 2019.
(Notes regarding Consolidated Statement of Changes in Shareholders’ Equity)
1. Matters related to the total number of issued and outstanding shares

Type of shares

Number of shares
as ofJanuary 1, 2019

Number ofincreased shares forthe current
consolidated fiscal
year

Number of
decreased sharesfor the current
consolidated fiscal
year

Number of sharesat the end ofcurrent
consolidated fiscalyear

206,269
thousand shares––

206,269
thousand shares

Commonstock

2. Matters concerning dividends of surplus(1) Dividends paid
Resolution

Type of shares

Total amountof dividends(million yen)March 26, 2019
Ordinary general
meeting ofshareholders

Common stock

4,587

25 December 31, 2018 March 27, 2019

August 7, 2019
Board meeting

Common stock

4,484

25

- 24 -

Dividend
per shareamount (Yen)

Reference dateJune 30, 2019

Effective date

September 2,2019

(2) Among the dividends whose reference dates belong to the current consolidated fiscal
year, the dividends whose effective date come after the end of the current consolidated
fiscal year.
Resolution

Type ofsharesTotal amountof dividends(million yen)

Source ofdividends

Dividend
per shareamount(Yen)

Reference date

Effective date

March 26, 2020
Ordinary general
meeting ofshareholders

Common
stock

4,484

Retainedearnings

25

December 31,
2019

March 27,2020

(Notes regarding revenue)
Regarding the contents of performance obligations under the contract with customers in major
business of the Group and the point of recognition of revenue related to performance obligation,please refer to “(7) Recognition of revenue” of “4. Matters on accounting standards is stated”.
(Notes regarding financial instruments)
1. Matters concerning the situation of financial instruments(1) Financial risk management
The Group is exposed to the following risks arising from financial instruments which are
discussed below.
・ Credit risk
・ Liquidity risk・ Market risk
The Group faces a variety of financial risks (credit risk, liquidity risk and market risk
(share price risk, interest rate risk, foreign exchange risk and price risk)) in its operations.
The Group manages its risks based on established policies to prevent and reduce thesefinancial risks. The Group’s risk management policies are established to identify and analyze
the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks
and adherence to limits. Risk management policies and systems are regularly reviewed toreflect market conditions and the business activities of the Group. The Group offers training
and develops manuals and procedures to maintain control environment in which all
employees understand their roles and disciplines.
Based on the Group’s risk management policy, derivatives are used to hedge certain risk
exposures. The Group’s policy is to use derivatives for hedging foreign exchange risk and- 25 -

price risk, but not for speculative transactions. The Company’s finance division identifies,
evaluates and hedges financial risks.
a. Credit risk
Credit risk is the risk that one party to a financial instrument will be unable to meetits obligations and the other party will incur financial losses. In the course of the Group'sbusiness, trade and other receivables and other financial assets (including deposits paid,
marketable securities and other receivables) are exposed to the credit risk ofcounterparties. The carrying amount of the financial assets presented in the consolidated
financial statements after impairment is the maximum exposure to credit risk of theGroup of financial assets that does not take into account the appraised value of collateralacquired. In addition, with respect to certain counterparties, we have no significant
exposure to credit risk and there are no undue concentrations of credit risk that we havespecifically managed.
In order to manage credit risk, the Group manages payment dates and balances bycustomer in accordance with internal customer management regulations, and monitors
the credit standing of major customer on a regular basis. In order to mitigate credit risk
in derivative transactions, in principle, the Group only transacts with financial
institutions with high credit ratings.
In addition, the Group determines the allowance for doubtful accounts based on its
credit risk profile. For trade receivables, the Group measures the allowance for doubtful
accounts at the same amount as lifetime expected credit losses. For receivables otherthan trade receivables, the allowance for doubtful accounts is generally measured at an
amount equal to the 12-month expected credit losses. However, when the credit riskincreases significantly from the initial recognition, the allowance for doubtful accounts
is recognized at an amount equal to the lifetime expected credit losses. The Group
determines whether or not credit risk has significantly increased based on changes in
the risk of default, considering factors such as information of past due date anddeterioration in the financial condition of the obligor. All receivables other than tradereceivables for which the allowance for doubtful accounts is measured at an amountequal to the 12-month expected credit losses are measured on a collective basis.
The amount of expected credit losses on trade receivables is calculated based on thesimplified approach and entails first classifying the receivables according to the credit
risk characteristics of the counterparty, and then multiplying each respective receivable
by a provision rate that is determined by adding projection of future economic
conditions to the historical rate of credit losses for the specific risk classification.

- 26 -

The amount of expected credit losses on receivables other than trade receivables iscalculated based on the principle approach and entails two different methods depending
on risk assessment. For receivables for which credit risk has not been considered to haveincreased significantly, the carrying amount is multiplied by the provision rate that isdetermined by adding projection of future economic conditions to the historical rate ofcredit losses of similar assets. For expected credit losses on assets that are deemed tohave significantly increased credit risk and credit-impaired financial assets, theexpected credit loss is measured as the difference between the present value of estimatedfuture cash flow discounted at the initial effective interest rate of the asset, and its
carrying amount.
b. Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting theobligations associated with its financial liabilities that are settled by delivering cash orother financial assets. The Group’s approach to managing liquidity is to ensure that it
will have sufficient liquid assets to meet its obligations when due, under both normal
and stressed conditions, without incurring material losses or risking damage to theGroup’s reputation. The finance headquarters of the Company mainly manages theGroup’s liquidity risk by maintaining an appropriate level of retained earnings andcredit facilities, and monitors the actual and forecasted cash flows.
c. Market risk
Market risk is the risk that changes in market prices – such as interest rates and equity
prices – will affect the Group’s income or the value of marketable securities it possesses.
The objective of market risk management is to manage and control market risk exposure
within acceptable parameters while optimizing the return.
(a) Interest rate risk
The majority of the Group’s loans and bonds are under fixed interest rates, andthe impact of interest rate fluctuation risk on the Group’s income or loss is limited. .
Therefore, the Group considers that the interest rate risk is immaterial and has not
performed a sensitivity analysis such as basis point value.
(b) Share price risk
The Group is exposed to share price risk as a result of its holdings of equity
securities. Equity securities are held for purposes other than trading, and are mainlyclassified into financial assets measured at fair value through other comprehensive
income.

- 27 -

(c) Foreign exchange risk
The Group is exposed to foreign exchange risks, particularly relating to U.S.
dollars, because Coca-Cola Bottlers Japan Inc., which is the Company's
consolidated subsidiary, purchases raw materials denominated in foreign
currencies. Foreign exchange risks arise from forecast transactions, such as futurepurchases, or from assets and liabilities already recognized. The Group uses
forward exchange contracts to hedge foreign exchange risk. Hedge accounting isapplied to transactions that qualify for hedge accounting. Receivables and payables
denominated in foreign currencies are subject to the risk of foreign exchange rates
fluctuations. However, the impact of this risk is limited as it is offset by forward
exchange contracts and other transactions.
(d) Price risk
Coca-Cola Bottlers Japan Inc., which is the Company's consolidated subsidiary,purchases raw materials that are subject to price fluctuations due to weather, natural
disasters and other factors. Therefore, the Group is exposed to price risk of raw
materials. The Group engages in commodity swap transactions to mitigate risks offluctuations in raw materials prices.
2. Matters concerning fair values etc. of financial instruments
The amount recorded on consolidated statement of financial position as of December 31, 2019fair values and the difference between these amounts are as follows.
Amount recorded on
consolidated statement of financial
position(million yen)
Long-term loans payable and bonds

205,748

Fair values(million yen)

Difference in amount(million yen)

205,627(Note) Long-term loans payable and bonds payable include the current portion of long-term loans payable and bonds
payable. In addition, financial instruments whose fair values approximate their carrying values are not includedin the table above.
The principal valuation techniques used for fair value measurements of financial instruments are as follows.

Loans payable
For loans payable with variable interest rates, fair values are deemed as their carrying
amounts, as the rates reflect the market interest rate within the short term. For loans payable
with fixed interest rates, the fair value is calculated using the present value of future cash flows
discounted using the current interest rate adjusted for the remaining maturity period and credit
risk.
Bonds payable- 28 -

122

For bonds payable with quoted price, the fair value is estimated based on the quoted prices.
For bonds payable without quoted prices, the fair value is calculated using the present valueof future cash flows discounted using the current interest rate adjusted for the remaining
maturity period and credit risk.
(Impairment losses of goodwill)
The goodwill impairment losses recognized in the current fiscal year are as follows.
segment

Impairment loss
(million yen)

Beverage Business

61,859Impairment losses of goodwill was recognized in the Beverage Business during the current
consolidated fiscal year. The earnings forecast based on the mid-term plan up to 2024
announced on August 7, 2019 is expected to be lower than the business plan expected at thetime of acquisition of Coca-Cola Bottlers Japan Co., Ltd. (formerly Coca-Cola East Japan
Co., Ltd.). As a result, based on the mid-term plan, the Company assessed the recoverable
value of the CGU group to which the goodwill belongs, and accordingly recorded
impairment losses of goodwill of 61,859 million yen in the current consolidated fiscal year.
The recoverable amount is calculated based on its value in use. Value in use is mainly
estimated by discounting the estimated cash flows to its present value. The estimated cash
flows are calculated using the mid-term plan, and the estimated cash flows after the periodof the mid-term plan is calculated using cash flows by considering the long-term average
growth rate of the market.
Certain key assumptions used in the estimation of the recoverable amount are the discountrate and growth rate. The amounts based on these assumptions reflect management’s
assessment of future trends in the relevant industries and have been based on historical datafrom both external and internal sources.
The discount rate before tax and growth rate used in the calculation of the value were 5.4%
and 0.5%, respectively.
(Per share information)
Equity attributable to owners of the parent per share

2,821.27 yen

Earnings(loss) per share(322.22) yen(Significant subsequent events)
Not applicable- 29 -

Non-consolidated Statement of Changes in Shareholders’ Equity
For the fiscal year ended December 31, 2019

(Millions of yen)
Shareholders’ equity
Additional paid-in capital

Retained earnings
Total
shareholders’equityTotal net
assets122,974

ሺ72,651) 332,507

332,507(9,071)(9,071)−(9,071)(9,071)−− 20,702

20,702−

20,702

20,702

−

−

−

−

−

−

−

−

−

−

−

−

−

− (13,002)

−

−

(1)

(1)

−

−

−

3

3

3

(Net) Changes in items otherthan shareholders’ equity
during this term

−

−

−

−

−

−

−

−

−

−

Total changes during this
term

−

−

(1)

(1)

− 11,631

11,631(12,999)(1,368)(1,368)15,232

108,167

158,784

266,951

134,606(85,649) 331,139

331,139

Capitalreserve

Other
additional
paid-in
capitalTotal
additional
paid-in
capitalLegal reserve

Other
retainedearnings(Note 1)

Total retained
earnings

15,232

108,167

158,785

266,952

3,317

119,657

Dividends of surplus

−

−

−

−

−

Income−−−Reversal of provisions−−

Acquisition of treasury
stock

−

Disposal of treasury stock

Commonstock

Balance as of Jan. 1, 2019

Treasurystock

Changes during this term

Balance as of Dec. 31, 2019

Note 1: Breakdown of other retained earnings

3,317

131,289(Millions of yen)

Other retained earnings
Reserve foradvanceddepreciation

Generalreserve

Retainedearnings to be
carriedforward

Total otherretainedearnings

766

110,388

8,503

119,657

Dividends of surplus－－

ሺ9,071)

ሺ9,071)

Income－－20,702

20,702

Reversal of provisions

(5)

－

5

－

Acquisition of treasury stock

－

－

－

－

Disposal of treasury stock

－

－

－

－

(Net) Changes in items otherthan shareholders’ equity during
this term

－

－

－

－

Total changes during this term

(5)－

11,637

11,631

Balance as of Dec. 31, 2019761

110,388

20,140131,289

Balance as of Jan. 1, 2019
Changes during this term

Note 2: Amounts less than one million yen are rounded.

- 30 -(13,002) (13,002)

Notes to Non-consolidated Financial Statements(Notes on matters concerning significant accounting policies)
1. Valuation standards and methods for securities(1) Securities held to maturity
Amortized cost method (straight-line method) is applied.
(2) Shares of subsidiaries and affiliated companies
Cost method based on the moving average method is applied.
(3) Other securities
Securities with available market values:
Market value method based on the market price, etc. at the fiscal year-end of the current term
is applied. (Valuation differences are to be reported as a component of shareholders’ equity,and the costs of securities sold are to be calculated by the moving average method)
Securities without available market values:
Cost method mainly based on the moving average method is applied.
2. Depreciation method used for fixed assets(1) Tangible fixed assets
Useful lives of major items below are calculated as follows, based on the straight-line method.
Buildings

2-50 years(2) Intangible fixed assets
Straight-line method is applied.
3. Basis for recording allowances(1) Allowance for bonuses
In order to prepare for the payment of bonuses for employees, the Company records anestimated payment amount that has been incurred for this fiscal year.
(2) Allowance for officers’ bonuses
In order to prepare for the payment of bonuses for officers, the Company records an estimatedpayment amount as of the end of this fiscal year.
(3) Provision for performance-linked compensation
In order to prepare for the payment of shares and cash for Executive Directors and Executive
Officers, the Company records an estimated payment amount as of the end of this fiscal year.
4. Other significant matters for preparation of the non-consolidated financial statements
Accounting treatment for consumption tax, etc.
Before-tax method is applied- 31 -

(Notes on changes to presentation method)
Changes with the application of the “Partial Amendment to Accounting Standards for Tax EffectAccounting”“Partial Amendments to “Accounting Standards for Tax Effect Accounting” (AccountingStandards Board of Japan Statement No. 28, February 16, 2018) have been applied from the
beginning of the fiscal year under review. Accordingly, deferred tax assets are reported under“Investments and other assets”, and deferred tax liabilities are reported under “Long-term liabilities”.
(Notes to the Non-consolidated Balance Sheet)
1. Amount of accumulated depreciation of tangible fixed assets

68,458 million yen

2. Monetary receivables from or payables to subsidiaries and affiliates (excluding the items statedseparately in the Balance Sheet)
Short-term monetary receivables

305 million yen

Short-term monetary payables

20,618 million yen(Notes to Non-consolidated Statement of Income)Transaction amount with affiliated company
Operating expenses

26,517 million yen

Others (non-operating transactions)

30million yen(Notes to Non-consolidated Statement of Changes in Shareholders’ Equity)
Matters concerning class and total number of treasury shares
Type of shares
Common shares

Shares as ofJanuary 1, 2019

Increase in sharesfor FY 201922,793 thousand shares 4,125 thousand shares

Decrease in sharesfor FY 2019

Shares as of December
31, 2019

1 thousand shares

26,917 thousand shares

1. The increase of 4,125 thousand shares in the common shares of treasury stock is due to the purchase of sharesbased on a resolution of the Board of Directors and the purchase of shares constituting less than one unit.
2. The decrease of thousand shares in the common shares of treasury stock is due to additional purchase of sharesconstituting less than one unit.

- 32 -

(Notes on deferred tax accounting)Breakdown of deferred tax assets and deferred tax liabilities by main cause
Deferred tax assets
Depreciation

1,865 million yen

Carry forward deficit

294 million yen

Impairment loss

454 million yen

Other617 million yen

Sub-total of deferred tax assets

3,231 million yen

Allowance for evaluation losses(554) million yen

Total deferred tax assets

2,677 million yen

Deferred tax liabilities
Reserve for advanced depreciation(969) million yen

Valuation difference on land

(1,380) million yen

Other(83) million yen

Total deferred tax liabilities(2,432) million yen

Net deferred tax assets

245 million yen(Notes on transactions with related parties)
Subsidiaries, etc.
Type

Name ofcompany

Address

Subsidiary

Coca-Cola
Bottlers
Japan Inc.

Minato-ku,
TokyoSubsidiary

Chuo-ku,
FukuokaQ’SAI

Capital or investment
amount(million yen)Line of business

100

Manufacture andsales of beverageand food products

350

Manufacture andsales of healthfood, cosmetics
and their related
products, andinvestment
business

Ownership of voting
rights (%)

Relationship
Interlocking
directorate

100.0

100.0

2

1

Businessrelationship

Description oftransaction

Collectionof funds

Collectionof fundsNet
revenuesNet
revenuesCashdepositCashdepositTransaction
Accounting Year-end balance
amountitem(million yen)(million yen)

－

6,267

Money
entrustedMoney
entrusted

1. The transaction amount does not include consumption tax, etc. Year-end balance includes consumption tax, etc.
2. Transaction terms and conditions and the policy for deciding on these terms and conditions(1) Terms and conditions for the transaction with Coca-Cola Bottlers Japan Inc.
In addition, the Company has adopted a cash management system for the purpose of improving the group's
funds efficiency. Also, transaction amounts are stated in net value.
Regarding net revenues, it is accompanied by real estate leasing and is determined based on certain rational(2) Terms and conditions for the transaction with Q’SAI CO., LTD.

- 33 -－－(Notes)standards.

5,422

5,677

In addition, the Company has adopted a cash management system for the purpose of improving the group's
funds efficiency. Also, transaction amounts are stated in net value.

(Notes on impairment loss)
In the fiscal year under review, the Company recorded an impairment loss on the following asset
groups.
RegionKinki

KyushuUse

Idle asset

Idle asset

Number ofType

locations3

2

Impairment loss
（million yen）

Buildings

11

Structures

1

Land

218

Land

1

The Company has divided assets for business use into groups by business unit that generates
cash continuously based on management accounting system. As for rental property and idle assets,
each individual property is recognized as the smallest grouping unit in order to detect and judge
any sign of impairment.
For the current fiscal year, of the idle assets of which market value, etc. decreased, the bookvalues of certain pieces of land in the target locations are reduced to their recoverable amounts,
and the amount of reduction is recognized as impairment loss.
The recoverable amounts of idle assets are calculated based on the valuation by real estateappraiser, etc.
(Notes on per share information)
Net assets per share

1,846.32 yen

Income per share

115.11 yen(Significant subsequent events)
Not applicable- 34 -