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.

Summary of Consolidated Financial Statements (Japanese Standards)
for the Fiscal Year Ending December 31st, 2015
February 12, 2016
Listed Company Name:
Security Code:Coca-Cola East Japan Co., Ltd.
2580
Representative
Representative:
title
Director, President
Senior Executive
Contact:
title
Officer and Financial
Controller
Scheduled date of annual shareholders’March 29, 2016
meeting:
Scheduled date of submission of annual
March 29, 2016security report:
Preparation of supplementary documents for earnings results:
Earnings results presentation/conference:

Stock Exchange:
Tokyo Stock Exchange
URL:
http://www.ccej.co.jp
Name:

Calin Dragan

Name:

Johan Rolf

TEL:
03 (5575) 3859

Schedule date of startof dividend payment:
Yes
Yes

March 30, 2016

(Amounts of less than one million yen are rounded down)

1． Consolidated Financial Results for the Fiscal Year Ending December 31, 2015
(1)
Consolidated Results of Operations
Net Sales

Operating Income

Million Yen

Million Yen

Ordinary Income

Net Income%

Million Yen%

Million Yen%

FY 2015563,162
7.6
10,791
15.3
FY 2014523,299
40.4
9,356
23.4
(Note) Comprehensive income: FY2015: 6,560Million Yen (39.1 %)10,411

8.4

5,354

55.9

Net Income per
Share

%

(Percentages show year-on-year changes)

Net Income per Share(Fully Diluted)

Yen

9,606
24.2
3,434 -70.3
FY: 2014 4,716 Million Yen (-60.7％)

ROE

Yen

%

FY 2015
42.70
42.64
2.4
FY 2014
28.37
28.36
1.6
(Reference) Equity income: FY2015: 134Million Yen
FY2014: 61 Million Yen(2)

Operating Income
Margin

ROA
%

%

2.9

1.9

2.9

1.8

Consolidated Financial Position
Total Assets
Million Yen

Net Assets

Equity Ratio

Net Asset per Share

Million Yen%

Yen

FY2015
371,771
230,945
FY2014
342,672
213,754(Reference) Shareholders’ equity: FY2015: 230,525 Million Yen

62.0

1,817.67(3)

62.3
FY2014: 213,530 Million Yen

1,764.07

Consolidated Cash Flows
Operating activities

FY2015FY2014

Investing activities

Financing activities

Cash and cash equivalents
at year-end

Million Yen

Million Yen

Million Yen

39,576
12,455-33,207-10,276

21,573-40,546

23,272

24,9711Million Yen

2．Dividends
Dividend per Share
Q1

FY2015FY2014FY2016(forecast)

Q2

Q3

Q4

Total

Total Dividend
Payment (Annual)

Dividend
Payout Ratio(Consolidated)

Ratio of Dividends
to Net Assets(consolidated)

Yen

Yen

Yen

Yen

Yen

Million Yen

%

%

－

－

32.00
32.00

74.9

1.8

－

16.00
16.00

4,058

－

16.00
16.00

3,873

112.8

1.8

－

16.00

－

16.00

32.00

55.7%

3．The Consolidated Earnings Forecasts for the Fiscal Year Commencing January 1st and Ending December 31st ,2016(Percentages show year-on-year changes)

Net Sales
Full-Year

Operating Income

Ordinary Income

Net Income

EPS

Million Yen%

Million Yen%

Million Yen%

Million Yen%

Yen

571,300

1.4

14,00029.7

13,600

30.6

7,200

34.5

57.42

Notes:(1) Changes of important subsidiaries during the reporting period (Changes of specific subsidiaries
accompanied by changes in the consolidation scope)

Yes

Sendai Coca-Cola Bottling Company(2) Changes in accounting policies and changes or restatement of accounting estimates(i) Changes in accounting policies accompanied by revisions of accounting standards, etc.
(ii) Changes in accounting policies other than (i)(iii) Changes in accounting estimates(iv) Restatement(3) Number of Issued Shares (Common Shares)(i) Number of the issued shares at the end
FY 2015of the period (including treasury stock)(ii) Number of the treasury stock at the end
FY 2015of the period(iii) Average number of the shares during
FY 2015
the period (accumulated total)

Yes
None
None
None

127,680,144

shares

FY 2014

121,898,978 shares

855,654

shares

FY 2014854,430 shares

125,399,031

shares

FY 2014

121,047,933 shares(Note) With regard to the number of shares used as the basis for calculation of net income per share (consolidated), pleaserefer to "Per Share Information" on page 31.
*Statement regarding the status of auditor review
At the time of disclosure of this financial summary, the audit procedures in accordance with the Financial Instruments
and Exchange Act are in progress.
*Explanation regarding the appropriate use of earnings forecasts and other special notes
Although the statements in this summary are prepared based on various information available to the Company andcertain assumptions considered reasonable by the Company, actual results may differ significantly due to various
factors. For details of assumptions for earnings forecasts and notes on the use of earnings forecasts, please see“Forecast for The Next Fiscal Year,” page 4 of the attached material of the summary.

2

Contents of the Attached Materials
1. Analysis of Operating Results and Financial Position .............................................................................. 2(1) Qualitative information on the full-year results ........................................................................................... 2(2) Qualitative Information on the Consolidated Financial Positions ............................................................... 4(3) Basic policies for profit distribution and dividends for FY2015 and FY2016 .............................................. 5(4) Risks of Businesses, etc. ........................................................................................................................... 5
2. Status of Corporate Group ........................................................................................................................... 7
3. Management Policies .................................................................................................................................... 9(1) Basic management policies........................................................................................................................ 9(2) Targeting management benchmark ............................................................................................................ 9(3) Medium-to-long term management strategies ........................................................................................... 9(4) Issues Requiring Action .............................................................................................................................. 9(5) Other significant matters for management ................................................................................................. 9
4. Basic Policy on the Choice of Accounting Standards .............................................................................. 9
5. Consolidated financial statements ............................................................................................................ 10(1) Consolidated balance sheets ................................................................................................................... 10(2) Consolidated Statement of income and Comprehensive Statement of income....................................... 12(Consolidated Statement of income).......................................................................................................... 12(Consolidated Comprehensive Statement of income) ............................................................................... 13(3) Consolidated Statement of changes in equity .......................................................................................... 14(4) Consolidated Statements of Cash flows .................................................................................................. 17(5) Notes to Consolidated Financial Statements ........................................................................................... 19(Notes to assumption of going concern) .................................................................................................... 19(Basis for preparation of consolidated financial statements) ..................................................................... 19(Changes in accounting policies) ............................................................................................................... 21(Unapplied accounting standard, etc.) ....................................................................................................... 21(Consolidated balance sheet) .................................................................................................................... 22(Consolidated Statement of income).......................................................................................................... 22(Consolidated comprehensive statement of income) ................................................................................. 25(Consolidated statement of changes in equity) .......................................................................................... 25(Consolidated cash flow statement) ........................................................................................................... 27(Segment information, etc.) ........................................................................................................................ 28(Per share information) .............................................................................................................................. 30(Significant subsequent events) ................................................................................................................. 30

11. Analysis of Operating Results and Financial Position(1) Qualitative information on the full-year results(i) Qualitative information on the consolidated operating results
Coca-Cola East Japan Co., Ltd. (“CCEJ”) today announced its consolidated financial results for the fourth
quarter and full-year 2015 (January 1, 2015 to December 31, 2015).
For additional details and management discussion of results, please also see the supporting presentationmaterial posted on our Company website, which will be used for the earnings presentation and webcast on
Monday, February 15, 2016 at 1:30 p.m. (JST). The webcast is available both live and on demand at
http://investor.ccej.co.jp.
Key Messages
・ 9% volume growth, 8% revenue growth and 15% operating income growth for the full year, including
the impact of the Sendai Coca-Cola Bottling Company (“Sendai”) integration in the second quarter.
・ Full-year revenue and operating income slightly ahead of the revised forecast announced in October
7, 2015・ Recovering market share trends in the fourth quarter (October 1 to December 31, 2015), with growthin both volume and value share・ Strong performance of new product launches in fourth quarter, led by ilohas momo (peach) water andGeorgia The Premium coffee. Vending channel pressure continues. Coffee growth in all channels.
Industry Update
Total nonalcoholic ready-to-drink (NARTD) beverage industry volumes were slightly positive for the full year.
Strong competition has continued, with many players introducing new products as well as continued aggressive
promotional activities in the marketplace.
Integration Update
CCEJ was formed after the integration of the four Kanto and Tokai region Coca-Cola bottling companies on July
1, 2013, and the subsequent acquisition of Sendai on April 1, 2015. As part of the company’s mid-term
strategic plan, the One+ Roadmap for Growth, we are focused on transforming our business, with a strong
focus on people, processes and system capabilities. Integration progress in the fourth quarter includes:
・ Commissioned one new production line in Iwatsuki
・ Successfully completed second bond offering of 16 billion yen
・ Completed legal entity consolidation of Sendai and inclusion in ERP system (As of January 1, 2016)
Operating Review
Full-year total BAPC (Bottler Actual Physical Cases) sales volume grew 8.7% reflecting the integration of Sendai
in the second quarter as well as strong volume growth in the fourth quarter. Organic volume performance
excluding Sendai was positive 1.1% for the full-year.
Full-year volume growth by channel was impacted by weaker-than-expected performance in the vending
channel, due to a continued shift of consumers' purchasing behavior across channels and cool weather in thethird quarter, our peak season, as well as continued pricing pressure. In addition, supermarket volume
performance was impacted by our strategic decision to pull back on promotional activity related to less profitable
future-consumption packaging. However, including the Sendai integration as well as new customer
development, volume grew across all channels: eating & drinking (+18%), convenience store (+16%), drug &discounter (+12%), supermarket (+5%) and vending (+5%).
Full-year sparkling beverage volume grew 5%. In the hydration category, unsweetened teas, water and sports
drinks volume grew 12%, 10% and 4%, respectively. Coffee volume grew 12%, led by the introduction of new
products and juice grew 16%, led by new customer development.
Fourth quarter total BAPC sales volume grew 14.8% year-on-year, reflecting the integration of Sendai as wellas successful new product launches and strong marketplace execution. Organic volume was positive 5.1% in
the quarter. We gained market share in colas, teas and water categories in the quarter.
Fourth quarter volume grew across all channels, led by the Sendai integration as well as the introduction of new
products and new customer development as follows; drug & discounter (+25%), convenience store (+22%),
eating & drinking (+20%), supermarket (+12%) and vending (+11%).
2

Sparkling beverage volume grew +9% in the fourth quarter. In the hydration category, water grew 29%, led by
the introduction of new products such as ilohas momo (peach). Unsweetened teas grew 18%, led by continued
success of Ayataka green tea and Karada Sukoyakacha W, our FOSHU (Food for Specific Health Use) tea
brand, as well as Tsumugi – Japanese Oolong Tea, which was newly launched in the first quarter, and customer
exclusive branded product launched in the second quarter. Sports grew 9%. Coffee volume continued to grow,up 17% in the fourth quarter, with growth in all channels, supported by the introduction of new products such as
Georgia The Premium and customer exclusive-branded products, mainly in the vending and convenience store
channel.
Financial Review
All results below include Sendai from April 1, 2015 onwards.

Reported Results
Full-Year 2015 (January to December)
In Million JPY

2014
523,299
9,356
3,434

2015
563,162
10,791
5,354% Change
+7.6
+15.3
+55.9

2014
281,586
523,299
10,474
5,975

2015
305,951
563,162
11,902
7,221% Change
+8.7
+7.6
+13.6
+20.9

Fourth Quarter 2015 (October to December)
2014
65,663
Net Sales
122,698
Operating Income
3,887
Net Income
2,619

2015
75,373
137,632
3,182
1,281

% Change
+14.8
+12.2
-18.1
-51.1

Net Sales
Operating Income
Net Income
Comparable* Results
Full-Year 2015 (January to December)
In Million JPY, except volume
Volume** (BAPC, in thousand)

Net Sales
Operating Income
Net Income

In Million JPY, except volume
Volume** (BAPC, in thousand)* Comparable: Presentation of results after excluding exceptional items such as charges, gains, etc. which are viewed bymanagement as non-recurring items impacting only the current period or the comparable period, but not both. These
comparability adjustments should be viewed in addition to, and not as an alternative for, the Company's reported results
prepared in accordance with JGAAP.
** As announced in Q4 2014 results, volume conversion rates across legacy bottler entities were standardized in 2015 aspart of the implementation plan for the new ERP system, CokeOne+. PY variance and 2014 volume shown above also
reflect this change.

Full-year reported and comparable net sales revenue was JPY 563,162 million (positive 7.6% compared to theprior year period), reflecting the integration of Sendai as of April 1, 2015. Fourth-quarter revenue grew 12.2%
year-on-year.
Full-year reported operating income was JPY 10,791 million (positive 15.3% compared to the prior year period)
mainly attributable to the integration of Sendai and reflecting the cycling of a change in accounting policy andestimates related to the depreciation method for fixed assets and the related write-off of residual value ofexisting tangible fixed assets during the first quarter of last year. Fourth quarter comparable operating income
was negative 18.1%, due to increase of cost of goods sold and sales, general and administrative expenses.
We reported a full-year net income of JPY 5,354 million (positive 55.9% compared to the prior year period),
mainly attributable to the above-mentioned operating income increase, lower effective tax rate versus prior fiscal
year, etc.

3

(ii) Forecast for The Next Fiscal Year (January 1, 2016 to December 31, 2016, Reported)
Revenue
Operating Income Ordinary Income
Net Income(M JPY)(M JPY)(M JPY)(M JPY)EPS(Yen)

FY2016 Forecast

571,300

14,00013,600

7,200

57.42

FY2015 Results

563,162

10,791

10,411

5,354

42.70

Variance (%)

1.4%

29.7%

30.6%

34.5%

We have a solid marketing and innovation calendar planned for the next fiscal year together with our partners
at Coca-Cola Japan (CCJC), including extensive deployment of premium products and related marketing andsales promotion activities.
This year marks the launch of the first new global advertising campaign for Coca-Cola in seven years. The
new campaign, “Taste the Feeling”, launched in Japan on January 20, celebrates the idea that drinking a CocaCola—any Coca-Cola—is a simple pleasure that makes everyday moments more special. We are actively
deploying a fully integrated marketing strategy including television, digital, sampling and more. In the coffee
category, we introduced a new product, “Georgia Deep Impact” in January, to build on our successful
performance in coffee over the past year. Additionally, we plan to execute marketing and sales promotions
focusing on the Rio de Janeiro Olympics to be held in August.
Also, we have been continuously working to improve profitability with a segmented approach to growing volume
and revenue across channels. A key focus remains stabilizing profitability in the important vending machine
channel by moving or removing unprofitable machines, continuing to develop indoor placements anddeployment of vending-exclusive initiatives such as loyalty programs for consumers and vending-only productlaunches.
We plan to sell 313,893 thousand cases in 2016, representing positive volume growth of 2.6% versus prior year.
Additionally, from FY2016, the company has changed the useful lives of machinery and equipment for
manufacturing to a range of 7 to 20 years from 10 years, which more realistically reflects the estimated useful
lives of these assets. As a result of this change, FY2016 forecast includes approximately 1.7 billion yen benefitof depreciation expenses.
(2) Qualitative Information on the Consolidated Financial Positions(i) The financial positions at the end of this fiscal year are as follows:
Assets at the end of this fiscal year were JPY 371,771 million, an increase of JPY 29,098 million from the endof the previous fiscal year. This is attributable to an increase of Accounts Receivable-Trade reflecting the growth
in revenue. In addition, Sales Equipment increased as a result of continued placement of vending machinesand coolers in the marketplace and Machinery Equipment and Vehicles increased as a result of commissioningof newly installed manufacturing lines. All of the above also reflect the impact of the integration of Sendai fromthe second quarter of 2015.
Liabilities at the end of this fiscal year were JPY 140,825 million, an increase of JPY 11,907 million from the endof previous fiscal year. This is mainly due to an issuance of 16 billion yen in straight bonds in December 2015
as well as the integration of Sendai.
Net assets at the end of this fiscal year were JPY 230,945 million, an increase of JPY 17,191 million from theend of previous fiscal year. This is primarily due to the increase of Capital Surplus by issuing new shares forthe integration of Sendai.
(ii) Cash flow position
The consolidated cash flow position and activity as of and for this fiscal year are as follows.
During this consolidated accounting period, Cash and Cash Equivalents are JPY 21,573 million, a decrease of
JPY 3,397 million compared with the end of last fiscal year. Cash flow by activities in this consolidated
accounting period is as follows.
(Cash Flow from Operating Activities)
Cash generated from operating activities was JPY 39,576 million (the cash generated increased JPY 27,120
million year-on-year). This results mainly from income before tax of JPY 8,286 million, depreciation andamortization, amortization of long-term prepaid expenses, income tax refund, increase in accounts payable, etc.
4against increase in receivable, increase in long-term prepaid expenses, etc.
(Cash Flow from Investing Activities)
Cash used for investing activities was JPY 33,207million (cash out decreased JPY 7,338 million year-on-year).
The outflow includes expenditure for new fixed assets such as machinery and equipment for plants, cold drink
equipment, intangible fixed assets due to new ERP system deployment, etc. The inflow includes proceeds frompurchase of investments in subsidiaries by integrating Sendai as well as governmental subsides, etc.
(Cash Flow from Financing Activities)
Cash used for financing activities was JPY 10,276 million (cash generated JPY 23,272 million in previous fiscal
year). The inflow is mainly attributable to straight bond issuance and the outflow includes payment of the shortterm loan and lease obligations, etc.
Transition of Ratios for cash flow of CCEJ is as follows.
2011
Capital-to-asset ratio (%)
76.0
Capital-to-asset ratio based on market price (%)
37.8
Cash flow / interest bearing liability ratio (%)－
Interest coverage ratio (times)
809.4

2012
77.5
41.9
－
687.5

2013
68.7
84.1
－
134.6

2014
62.3
65.4
240.9
32.4

2015
62.0
66.6
95.2
89.3

(Note) CCEJ began operations as an integrated company starting in the third quarter of 2013. Above table reflects
consolidated result of the legacy Coca-Cola Central Japan (CCCJ) until 2012, and for the first and second quarters resultsin 2013 reflect the consolidated results of CCEJ in the third and fourth quarter and consolidated result of the legacy CCCJ
for the first and second quarters.

Equity Ratio: Shareholder’s equity / Total Assets
Capital-to-asset ratio based on market price: Market cap / Total Asset
Cash flow / interest bearing liability ratio: Interest bearing liability / Operating Cash Flow
Interest Coverage Ratio: Operating Cash Flow / interest paid
(Note 1) All numbers are based on consolidated basis.
(Note 2) Market cap is calculated by “Closing share price at the end of the year × Number of shares issued(after deduction of treasury stock)”.
(Note 3) Operating cash flow and interest paid come from operating cash flow and interest paid in consolidated
cash flow statement which includes interest for lease liabilities.
(Note 4) Interest bearing liability consists of all the liabilities which are listed in consolidated balance sheet andrequire interest payment.
(3) Basic policies for profit distribution and dividends for FY2015 and FY2016
The Company regards the dividend policy as one of the key managerial issues and declares semi-annual
dividends under the basic policies, to continue with business investments and to place top priority on
healthy and stable payment of dividends in order to secure sustainable development and high profitable
growth of the Company into the future.
With regard to the dividend of retained earnings, year-end dividend is determined by resolution in the
Ordinary General Meeting of Shareholders, and interim dividend is determined by the Board of Directors
Meeting, respectively. Our proposed year-end dividend for FY2015 is 16 yen per share and 32 yen per
share for the annual dividend, combined with the interim dividend of 16 yen paid in September 2015.
The internal reserve will be secured for development of our future businesses and as costs of capital
expenditure, etc.
For the annual dividend of the following period, we plan to pay a total of 32 yen per share, comprised of
an interim dividend of 16 yen per share and a year-end dividend of 16 yen per share in accordance withthe above-mentioned policy.
(4) Risks of Businesses, etc.
Of the matters related to the Group’s operating results and financial position stated in the summary of financial
statements, matters that could have a significant impact on investors’ judgment are as follows.
Any forward-looking statements contained herein are based on the judgment of the Group at the end of the year
under review.
5

i.

Risks relating to agreements with The Coca-Cola Company and Coca-Cola (Japan) Company
Limited.
The Group conducts businesses under the Bottler’s Agreement executed by and between theGroup, The Coca-Cola Company and Coca-Cola (Japan) Company Limited and the Delegation
Authorization Agreement executed by and between the Group, The Coca-Cola Company, CocaCola (Japan) Company Limited and Coca-Cola East Japan Products. Please refer to “(5) Other
Significant Matters for Management, 3. Management Policies” for more details on the above
agreements. In case of the occurrence of a significant change in these agreements or any events
not expected thereunder, the Group’s business operations and results could be affected.

ii.

Risks relating to the quality and safety of products
Recently, the food and beverage industries faced the occurrence of such problems as foreign
matter contamination and illegal resale of food products that should have been disposed of as
industry waste, which has increased consumers’ attention to the quality and safety of food products.
Consumers’ growing health consciousness is turning their interest toward the safety of the caffeine,sugar, sweetener and/or food additives contained in the Group’s products. We have beenpromoting the enhancement of our quality and safety management systems to offer safe and tasty
products to consumers, and endeavoring to offer a diverse range of products and services to meetthe changing needs of consumers. However, in the event of a problem with the quality and safetyof our products, the failure to meet changing needs in a timely and appropriate manner or a problem
with the products of competitors that could have an incidental adverse effect on the Group’s
products, demand for the Group’s products could decrease and the Group’s business results could
be affected.

iii.

Risks relating to market competition
Although significant growth is not foreseen for the beverage market, competition over shares
among soft drink manufacturers has been intensifying. In addition, with changes in consumerpurchasing trends and distribution channels, the conventional ways of selling are under growingpressure to change. To address these changes and survive the fierce market competition, theGroup has been implementing various sales and marketing strategies. However, if these strategies
are ineffective, that might decrease our sales and market share and increase selling costs, thereby
causing an adverse effect on the Group’s business results.

iv.

Climate-related risks
Soft drink sales are susceptible to the climate (e.g., weather, temperature, etc.) due to the productcharacteristics. In particular, bad weather and low temperature during the peak season could
influence the Group’s business results.

v.

Disaster-related risks
The Group has Group-wide risk management programs in place to ensure the health and safety of
employees, protect its business facilities and restore its important businesses within a specified
period of time in case of a natural or man-made disaster. However, a failure to fulfil the goals set
forth under these programs could lead to a loss of the Group’s important human resources, a failurein the Group’s equipment, facilities and IT systems, and/or a suspension or delay in the recoveryof business operations, thereby causing adverse effects on the Group’s business results andfinancial position.

vi.

Risks relating to the streamlining and optimization of business processes
Because the Group was formed by integrating five bottling companies, various programs are in
operation within the Group to concentrate, consolidate and standardize to a maximum extent thesystems, processes, equipment and facilities that had been used by the respective bottlingcompanies before the integration to enhance the efficiency and productivity of the Group’s business
operations. Specific projects include the introduction of new production lines and IT systems,
6removal of unprofitable vending machines and dispensers and consolidation and optimization of
distribution networks. If a delay or suspension occurs in these projects or their objectives or
intended results cannot be achieved, the Group’s business results and financial position could be
affected.
vii.

Risks relating to fluctuations in the fair value of pension assets
The Group has a defined benefit pension plan. In cases when the operation of pension assets
consisting of securities grows worse, retirement benefit expenses might increase, thereby affecting
the Group’s business results.

viii.

Risks relating to legal compliance
The Group conducts the manufacture and sales of soft drinks and ancillary businesses such as themaintenance and repair of sales equipment and the delivery of products. These businesses are
subject to various laws and regulations, including the Food Sanitation Act, the Product Liability Act,
the Road Traffic Act and the Anti-monopoly Act. In addition, we are required to comply with new orrevised laws and regulations relating to the Social Security and Tax Number System, promotion of
the employment of the handicapped and mandated implementation of stress check tests on
employees. However, if additional expenses are incurred to ensure legal compliance or in the eventof violating the laws and regulations, the Group’s reputation and business results could be affected.

ix.

Risks relating to water resources
The Group has “source water preservation programs” in action at all of its plants to secure water
resources, a major ingredient of its products. Meanwhile, we are increasing the capacity to supply
water products, including ilohas, to meet the growing demand of consumers. If these efforts fail toachieve the intended results, we could become unable to secure water resources or supply waterproducts, thereby affecting the Group’s business results and financial position.

x.

Risks relating to leakage or loss of information
In the process of conducting its business, the Group has come to hold private or confidential
information as to customers, employees and business partners. In addition, the Group’s businessis conducted by using many IT systems. Therefore, we plan to carry out integrated information
security measures led by the Information Security Committee and using the cloud computing
service. In the event of leakage or loss of information, however, the Group’s social credibility or
business results could be affected.

2. Status of Corporate GroupThe Group consists of the Company, eight consolidated subsidiaries, one non-consolidated subsidiary, andthree equity method affiliated companies at the end of FY2015. The key entities are as follows;(1) Sales of soft drinks, etc.
Coca-Cola East Japan Co., Ltd., FV East Japan Co., Ltd., Sendai Coca-Cola Bottling Co., Ltd. and Sendai
Beverage Network Co., Ltd. are the operators of the business.
As of January 1, 2016, Sendai Coca-Cola Bottling Co., Ltd. was integrated into the Company with theCompany as the surviving entity, and Sendai Beverage Network Co., Ltd. was integrated into FV East Japan
Co., Ltd., with it being the surviving entity.
(2) Production, distribution of soft drinks and maintenance, repair service etc. of sales equipment
Coca-Cola East Japan Products Co., Ltd., Sendai Coca-Cola Products Co., Ltd., Sawayaka Butsuryu Co.,
Ltd., and Sawayaka Jihanki Service Co., Ltd. are the operators of the businesses.
As of April 1, 2016, Sendai Coca-Cola Products Co., Ltd., Sawayaka Butsuryu Co., Ltd., and Sawayaka
Jihanki Service Co., Ltd. were merged into Coca-Cola East Japan Products Co., Ltd. with it being thesurviving entity.

7

As of January 1, 2016, the diagram of the Group is as follows;*1
FV Corporation Co., Ltd.

Sale of beverages, etc.

Beverages

Beveragesetc.

Coca-Cola East Japan Co., Ltd.

Distrbution, Production
And Maintain and Repair

Production
outsourced

Distrbution and production of beverages
Maintenance and repair etc. of sales equipment
Coca-Cola East Japan Products Co., Ltd.

Product purchase

Other business

Beveragedelivery
Maintenance/
repair of sales
equipment

Insurance
agent

Mikuni Service Co., Ltd.
Beverages*2*2

Coca-Cola Business Sourcing Co., Ltd.

Coca-Cola Customer Marketing Co., Ltd.

*2
Coca-Cola IBS Co., Ltd.

*1:Non-consolidated subsidiaries*2:Equity method affiliated companies

8

General Consumers (Customers)

FV East Japan Co., Ltd.

3. Management Policies(1) Basic management policies
Based on our mission, “Create a new world of beverages,” the Group will achieve further development tocontribute to all stakeholders through sustainable growth, being: “Number One in the Beverage Industry,” “The
Only One for the Community,” and “The Best One as a Workplace,” while placing our first and top priority on
delivery of safe products and services to our customers.
To achieve our mission, the company plan and place mid-to-long term strategy, “One+ Roadmap for Growth” tobecome a world-class Coca-Cola bottler.
(2) Targeting management benchmark
As the management benchmark for FY2016, the Group is targeting to deliver 14 billion yen of operating income.
(3) Medium-to-long term management strategies
The company has in place a mid-to-long term strategy, “One+ Roadmap for Growth” to become a world-class
Coca-Cola bottler.
In line with the One+ Roadmap for Growth, we are actively and rapidly implementing action plans to achieve
our growth target, which, include realigning our Commercial organization and capabilities toward revenue
growth, generating synergies by reducing costs and driving efficiency across our supply chain – manufacturing,logistics and distribution, incremental investment to infrastructures and people development.
(4) Issues Requiring Action
The beverage industry in Japan continues to face challenges amid price competition, changes in purchasing
behavior after the consumption tax hike, the surge of private-label products, and the growing popularity ofbrewed coffee sold at convenience stores. This year, the mid-term strategic plan, the One+ Roadmap for Growth
has entered the stage of execution. While continuing our efforts on transformation, we will seek further sales
growth by strengthening each sales channel, geographic area, sales occasion, and beverage category, in orderto enhance our execution capability in the market so as to stabilize the initiatives under the plan.
In addition, under our partnership with Coca-Cola (Japan) Company Limited, we will vigorously conduct sales
promotion activities such as the new Coca-Cola campaign and introduction of new products, while pursuingfurther synergy through the merger and accelerating growth to become a world-class Coca-Cola bottler basedin Japan.
(5) Other significant matters for management
The Company has entered into an Agreement with The Coca-Cola Company and Coca-Cola (Japan) Company
Ltd. for manufacturing and sales of Coca-Cola and other products and use of the trademarks etc. in Tokyo and
15 prefectures in Kanto, Koshinetsu, Chubu and South Tohoku regions .Based on this Agreement, the Company
has entered into the Delegation Authorization Agreement with The Coca-Cola Company, Coca-Cola (Japan)
Company Limited, and Coca-Cola East Japan Products Co., Ltd. and outsources the manufacturing business toCoca-Cola East Japan Products Co., Ltd.
In addition, the Company has entered into the Capital and Business Alliance Agreement with The Coca-Cola
Company, Coca-Cola (Japan) Company Ltd. and European Refreshments in order to further strengthen
competitiveness and enhance corporate value.

4. Basic Policy on the Choice of Accounting Standards
CCEJ group prepares consolidated financial statements in Japanese accounting standards considering thecomparability of past years.
95. Consolidated financial statements(1) Consolidated balance sheets(MM yen)
FY2014FY2015

AssetsCurrent assets
Cash and deposits

24,982

21,578Notes and accounts receivable-trade36,611

44,565

Short-term investment securities

1,204

301

Merchandise and finished goods

31,43334,359Raw materials and supplies

2,750

3,377

Deferred tax assets

2,928

2,241

Short-term loans receivable

2,958

821

Accounts receivable-other

11,084

13,184Other

14,112

6,980

-98

-67

127,969

127,343

106,956

124,594-68,831 ※1-78,733

38,12445,861

Allowance for doubtful accounts
Current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Accumulated depreciation※1

Buildings and structures, net
Machinery Equipment And Vehicles

58,31278,360-28,693 ※1-40,708

Machinery, equipment and vehicles, net

29,61837,652

Sale equipment

188,665

199,744

Accumulated depreciation

Accumulated depreciation※1-140,219-133,631

Sales equipment,net

48,445

66,112Tools, furniture and fixtures

7,006

7,408

-5,802 ※1-5,636

Accumulated depreciation※1

Tools, furniture and fixtures, net

1,204

1,772

Land

45,64250,883

Lease assets

19,02015,653

Accumulated depreciation-9,042-7,962

Lease assets, net

9,978

7,691

Construction in progress

6,428

345

179,442

210,318

5,488

8,361

Investment securities

9,762

9,720

Stocks of subsidiaries and affiliates

1,128

323

Long-term loans receivable

2,262

1,971

Deferred tax assets

7,108

4,732

Other

9,702

9,225

Allowance for doubtful accounts

-193

-225

Investments and other assets

29,772

25,748

Noncurrent assets

214,703

244,428

342,672

371,771

Property, plant and equipment
Intangible assets
Investments and other assets

Assets10

Consolidated balance sheets(MM yen)

Liabilities
Current liabilities
Accounts payable-trade22,944

29,149

Short-term loans payable

16,0005,160

Lease obligations

2,904

3,401

accounts payable-other and accrued expenses

30,00334,986

Income taxes payable

2,425

1,100

accrued consumption taxes

1,700

1,784

Provision for bonuses

1,945

1,364

Provision for directors' bonuses

37

37

Current portion of long-term loans payable

－

1,234

Other

3,829

4,449

Current liabilities

81,791

82,66814,00030,000－2,520

Lease obligations

7,283

4,493

Deferred tax liabilities

1,784

0

2

－

478

335

Provision for loss on contract

2,187

1,392

Net defined benefit liability

18,68917,597

Other

2,700

1,816

Noncurrent liabilities

47,12658,156

128,917140,825

Noncurrent liabilities
Bonds
Long-term loans payable

Provision for directors' retirement benefits
Provision for environmental measures

Liabilities

FY2014FY2015

Net assets
Shareholders' equity
Capital stock

6,499

6,499

Capital surplus

143,134

157,313Retained earnings

66,83768,454

Treasury stock-1,170-1,178

Shareholders' equity

215,301

231,089

1,644

2,151

302

-463

Remeasurements of defined benefit plans-3,717-2,251

Valuation and translation adjustments-1,770

-564

223

420

Net assets

213,754

230,945

Liabilities and net assets

342,672

371,771

Valuation and translation adjustments
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Subscription rights to shares11(2) Consolidated Statement of income and Comprehensive Statement of income(Consolidated Statement of income)(MM yen)
FY2014
Net sales

FY2015523,299

Cost of sales※１283,963※２

229,979

Gross profit

563,162※１

302,087※２

250,284

239,336

Selling, general and administration expenses
Operating loss or income

261,075

9,356

10,791Non-operating income
Interest income

131

96

Dividends income

167

147

Equity in earnings of affiliates

61

134

Rent income

372

388

Gain on sales of valueable wastes

354

282

Gain on Container deposit Reversal

41

Proceeds from miscellaneous income

148

318

1,240

1,368

Non-operating income
Non-operating expenses
Interest expenses

383

Loss on sales and retirement of noncurrent assets

※３

370

446
※３

864

Rent expenses

95

Miscellaneous loss

141

324

Non-operating expenses

990

1,748

9,606

10,411Gain on transfer of business－

247

Gain on sales of shares of subsidiaries

69－

Insurance income

137

79

Ordinary loss or income

111

Extraordinary income

Gain on negative goodwill-

Gain on sales of noncurrent assets

※４

595

84
※４

8

Gain on sales of investment securities

13

725

Others

3

30

819

1,175

Extraordinary income
Extraordinary loss
Cost of system interruption－

160

Loss on disposal (sales) of noncurrent assets

※５

435

※５

1,130

Penalty on lease cancellation

※６

48

※６

467

Restructuring cost

※７

1,922

※７

1,020

Quality measures expenses

※８

643

※８

－

Cost of defective work

562

Impairment loss

※９

69

235
※９

8

Integration expenses－

39

Others

199

237

3,880

3,300

Loss or income before income taxes

6,545

8,286

Income taxes-current

3,963

1,956

Extraordinary loss

Income taxes-deferred

-852

975

Income taxes

3,110

2,932

Loss or income before minority interests

3,434

5,354

Net loss or income

3,434

5,354

12

(Consolidated Comprehensive Statement of income)(MM yen)
FY2014

Loss or income before minority interests

FY2015

3,434

5,354

777

507

Deferred gains or losses on hedges

2-

Remeasurements of defined benefit plans

－

1,465

502

-766

Other comprehensive income
Valuation difference on available-for-sale securities

Share of other comprehensive income of associates accounted for using
equity method
Other comprehensive income※

Comprehensive income
Comprehensive income attributable to owners of the parent company

13

1,281

※

1,206

4,716

6,560

4,716

6,560

(3) Consolidated Statement of changes in equity(From January 1st, 2014 to December 31st, 2014)(MM yen)Shareholders' equity
Total
Capital stock

Capital surplus

Retained earnings

Treasury stock

Shareholders’equityBalance as of December 31st
2013

6,499

143,136

67,034-1,164

215,507

6,499

143,136

67,034-1,164

215,507

Cumulative effects of changes
in accounting policies
Restated balance
Changes of items during theperiodDividends from surplus-3,631-3,631

Net income

3,434

3,434

Purchase of treasury stock
Disposal of treasury stock

-2

-22

-22

15

13

Net changes of items other than－shareholders' equity
Total changes of items during

-

-2

-196

-6

-205

6,499

143,134

66,837-1,170215,301

the period
Balance as of December 31st2014

Valuation and translation adjustments
Valuationdifference on
available-for-salesecurities
Balance as of December 31st 2013

Subscription

DeferredRemeasurements

Total valuation

loss/gain fromof defined benefit

and translation rights to shares

hedging activities

plans

Net assets

adjustments

867

-201

665

19

216,191

867

-201

665

19

216,191

Cumulative effects of changes inaccounting policies
Restated balance
Changes of items during the period
Dividends from surplus-3,631

Net income

3,434

Purchase of treasury stock-22

Disposal of treasury stock13

Net changes of items other thanshareholders' equity
Total changes of items during theperiodBalance as of December 31st 2014

777

504

-3,717-2,435204-2,230777

504-3,717-2,435204-2,436

1,644

302-3,717-1,770223

213,754

14

(From January 1st, 2015 to December 31st, 2015)(MM yen)Shareholders' equity
Total
Capital stock

Capital surplus

Retained earnings

Treasury stock

Shareholders’equityBalance as of December 31st
2014

6,499

143,134

Cumulative effect of change

66,837-1,170917

in accounting policy

215,301

917

Balance as of December 31st2014 of change in accounting

6,499

143,134

67,755-1,170216,218

policyChanges of items during theperiodIncrease by share exchange

14,175

14,175

Dividends from surplus-3,965-3,965

Net income

5,354

5,354

Purchase of treasury stock
Disposal of treasury stock

3

-14

-14

7

11

Increase or decrease due tothe merger of nonconsolidated subsidiaries by

-689

-689

-0

-0

the consolidated subsidiaries
Net changes of items otherthan shareholders' equity
Total changes of items during
the period
Balance as of December 31st
2015

6,499

14,179699-714,871

157,31368,454-1,178231,08915

Valuation and translation adjustments
Valuationdifference on
available-for-salesecurities
Balance as of December 31st 2014

1,644

Subscription

DeferredRemeasurements

Total valuation

loss/gain fromof defined benefit

and translation rights to shares

hedging activities

plans

302

adjustments-3,717-1,770223

Cumulative effect of change inchange in accounting policy

213,754917

accounting policy
Balance as of December 31st 2014 of

Net assets

1,644

302

-3,717-1,770223

214,672

Changes of items during the period
Increase by share exchange

14,175-

Dividends from surplus-3,965

Net income

5,354

Purchase of treasury stock-14

Disposal of treasury stock

11

Increase or decrease due to themerger of non-consolidated-689

subsidiaries by the consolidated
subsidiaries
Net changes of items other thanshareholders' equity
Total changes of items during theperiodBalance as of December 31st 2014

507

-766

1,465

1,206

196

1,402

507

-766

1,465

1,206

196

16,273

2,151

-463

-2,251-564

420

230,94516

(4) Consolidated Statements of Cash flows(MM yen)

FY2014FY2015

Net cash provided by (used in) operating activities
Loss or income before income taxes

6,545

8,286

Depreciation and amortization

23,92523,831

Amortization of long-term prepaid expenses

9,839

12,477-18-24

Increase (decrease) in net defined benefit liability

1,109-1,663

Increase (decrease) in prepaid pension costs

2,119

－

Increase (decrease) in provision for directors' bonuses

-89

-0

Increase (decrease) in provision for directors' retirement benefits

-364

-2

Interest income and dividends income

-298

-243

Interest expenses paid

383

446

Equity in (earnings) losses of affiliates

-61

-134

Special retirement expenses paid

1,484

619

Loss (gain) on sales of noncurrent assets

-550

-41

Loss on retirement of noncurrent assets

754

1,939

Gain (loss)on sales of investment securities

-13

-725

Impairment loss

69

8

Increase (decrease) in notes and accounts receivable-trade-1,608-4,959

Increase (decrease) in inventories-1,804

1,971

Increase (decrease) in long-term prepaid expenses-10,766-12,093

Increase (decrease) in notes and accounts payable-trade

1,725

3,856

Increase (decrease) in other assets and liabilities-7,694

2,323

Other

236

234

Subtotal

24,924

36,106

Interest and dividends income received

315

246

Interest expenses paid

-384

-443

Special retirement expenses paid

-1,739-380

Income taxes paid

-11,343-3,941

683

7,989

12,45539,576

Increase (decrease) in allowance for doubtful accounts

Income taxes returned
Net cash provided by (used in) operating activities

17

Consolidated Statements of Cash flows
Net cash provided by (used in) investing activities
Purchase of property, plant and equipment-42,331-40,939

Proceeds from sales of property, plant and equipment

2,895

482

Purchase of Intangible assets-3,558-3,460

Proceeds from sales and redemption of investment securities

2,419

3,353

Purchase of investment securities

-434

-84

Proceeds from acquisition of investments in subsidiaries resulting
in change in scope of consolidation
Proceeds from sale of investments in subsidiaries resulting inchange in scope of consolidation

－

※２

3,138

765

－

Net increase (decrease) in short-term loans receivable-1,855-41

Payments of loans receivable-1,156-336

Collection of loans receivable

2,609

938

Proceeds from government subsidy

－

4,033

Other

101

-289

-40,546-33,207

16,000-13,040－-890

14,00016,000

2

0

-22

-12

Repayments of lease obligations-3,071-8,365

Cash dividends paid

-3,635-3,96900

Net cash provided by (used in) financing activities

23,272△10,276

Net increase (decrease) in cash and cash equivalents-4,818-3,907

Cash and cash equivalents at beginning of period

29,79024,971－509

Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of bonds
Proceeds from sales of treasury stock
Purchase of treasury stock

Proceeds from exercise of stock option

Increase (decrease) in cash and cash equivalents resulting fromchange of scope of consolidation
Cash and cash equivalents at end of period※１18

24,971※１

21,573

(5) Notes to Consolidated Financial Statements(Notes to assumption of going concern)
Not applicable(Basis for preparation of consolidated financial statements)
1 Scope of consolidation:
All the subsidiaries are included in the consolidation scope.
(1) Number of consolidated subsidiaries: 8
The listing of major consolidated subsidiaries are omitted since it is provided in “2. Status ofcorporate group.”(2) Major nonconsolidated subsidiaries:
FV Corporation Co., Ltd.
This company’s total assets, sales, net income or loss (amount corresponding to proportional
ownership) and retained earnings (amount corresponding to proportional ownership) are small insize and do not have a material effect on the consolidated financial statements.
2 Application of equity method(1) Number of the affiliated companies with equity method applied: 3
Coca-Cola Customer Marketing Company Co., Ltd., and Coca-Cola IBS Co., Ltd., Coca-ColaBusiness Sourcing Co., Ltd.
(2) Non-Consolidated Subsidiaries and Affiliated Companies excluded from the equity method
FV Corporation Co., Ltd.
Reason for exclusion from the equity method: This company is excluded from the equity method
as the impact on the consolidated financial statements is minor and there is little significance asa whole taking into account the current net income or loss (amount corresponding to the equity
interest), retained earnings (amount corresponding to the equity interest), etc.
3 Notice Regarding Changes to the Consolidation Scope and Equity Method Affiliates
Five new companies have been included in the consolidation scope due to an integration of businessthrough a stock swap with Sendai Coca-Cola Bottling Co. Ltd. in the second quarter consolidated
accounting period.
Furthermore, at the end of the previous consolidated fiscal year consolidated subsidiary FV East Japan
Co., Ltd (trade name changed from Mikuni Foods Co., Ltd) implemented absorption-type merger withformer consolidated subsidiaries FV Central Co., Ltd., Urban VendX Network Co., Ltd., WEX TOKYO
Co., Ltd., and EX - Service Co., Ltd, as well as former equity method affiliate and unconsolidated
subsidiary Fresh Vender Service Co., Ltd, former unconsolidated subsidiary TX Campus Co., Ltd. and
NITTO PACIFIC VENDING CO., LTD on April 1, 2015.
According to the split of Coca-Cola East Japan from equity method affiliate Coca-Cola Business Service
Co., Ltd. in the third quarter consolidated accounting period, Coca-Cola Business Sourcing Company
Limited, established on August 3, 2015, is included as an equity method affiliate. Coca-Cola Business
Service Co., Ltd. also changed its name to Coca-Cola Integrated Business Systems Co., Ltd. on thesame date.
4 Fiscal year of consolidated subsidiaries, etc.
The end of fiscal year of consolidated subsidiaries is same as that of the consolidated accountclosing date.
5 Accounting standards(1) Valuation standards and methods for significant assets
1) Securities:
Other securities
Securities with available fair market values:…Market value method based on the market value, etc. as at the account closing date(Valuation differences are to be reported as a component of shareholders’ equity and thecost of products sold is to be calculated by using the moving average method.)19Securities without market value:…Cost method based on the moving average method
2) Inventory assets:
Mainly by cost method based on the total average method (Balance sheet amount arecalculated by the inventory write-down method to reflect the decline of profitability)(2) Depreciation method used for significant depreciable assets
1) Tangible fixed assets: (Excluding the lease assets)
Straight-line method
Durable years of the major items are as follows.
Buildings:

2 - 58 years

Machinery, equipment & vehicles:

2 -17 years

Sales equipment:

4 - 9 years

2) Intangible fixed assets: (Excluding the lease assets)
Straight-line method
Straight-line method based on the Company’s available years (10 years) is applied for software.
3) Lease assets:
The lease period is the durable years for the lease assets and the residual value is zero,
calculated by the straight-line method.
4) Long-term prepaid expenses: Fully depreciated within the period(3) Basis for recording significant allowances
1) Allowance for doubtful accounts: In order to prepare for bad debts loss of receivables such asaccounts receivable-trade, we have reviewed general accounts receivables and specificreceivables such as doubtful accounts receivables based on the loan loss ratio and individualcollectability, respectively, and recorded the unrecoverable amounts.
2) Allowance for bonuses: In order to prepare for the payment of bonuses for employees, we haverecorded an estimated amount at as of the end of the consolidated FY 2015.
3) Allowance for officers’ bonuses: In order to prepare for the payment of bonuses for officers, wehave recorded an estimated amount at as of the end of the consolidated FY 2015.
4) Allowance for environmental measures: In order to prepare for disposing polychlorinatedbiphenyl waste kept in storage, we have posted an estimated incurred amount as of the end of
the consolidated FY 2015.
5) Allowance for losses on contracts: In preparation for payment of system usage fees aftercancellation under the contracts, the estimated amount is recorded.
(4) Accounting treatment for retirement benefits
1) Cut off for expected retirement benefit payments
When calculating retirement benefit liabilities, Benefit formula criteria is used as the method of
attributing 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
within the employees’ average remaining service years when the difference occurs (mainly 13
years), and the amount is treated as an expense from the following consolidated fiscal year.
Past service liabilities are allocated by the straight-line method using a certain number of years
within the employees’ average remaining years of service when the liability occurred (mainly 13
years), and the amount is treated as an expense. Scope of the Cash declared in the
consolidated cash flow statement
3) Adoption of the simplified method in small companies
Part of the consolidated subsidiaries are using simplified method to calculate liabilities and20

retirement benefit expenses.(taking the payment balance relating retirement benefit at the yearend as the liability)(5) Amortization method and period of goodwill
goodwill would be amortized equally during estimated effective period (within 20 years)(6) Range of funds in consolidated statement of cash flows
we have recorded Cash and cash equivalents in consolidated statement of cash flows as short-term
investments, due to cash on hand, demand deposits and the acquisition date of incoming liquidity of maturity
within three months, are readily convertible into cash and the price fluctuation’s risk is low.

(7) Other significant matters for preparation of the consolidated financial statements
Accounting treatment for consumption tax, etc.
Before-tax method is applied.
(Changes in accounting policies)
1．Application of accounting standards regarding retirement benefits
The “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26, issued on May 17, 2012,
hereinafter referred to as “Retirement Benefit Accounting Standard”) and “Guidance on Application of
Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25, issued on May 17, 2012, hereinafterreferred to as “Retirement Benefit Guidance”) have been applied from the end of the current consolidated
fiscal year (excluding the provisions in the main text of paragraph 35 in the Retirement Benefit AccountingStandard and the main text of paragraph 67 of the Retirement Benefit Guidance), and the accounting method
has been changed to recording the amount obtained by deducting the pension assets from the retirement
benefit liabilities as the liability for retirement benefits. In addition, the unrecognized actuarial difference andunrecognized past service cost have been recorded in the liability for retirement benefits.
Concerning the application of the Retirement Benefits Accounting Standard, we are acting in accordancewith the transitional handling defined in paragraph 37 of the Retirement Benefit Accounting Standard, and asof the end of the current consolidated fiscal year, the impact resulting from this change has been included in
the cumulative adjustment amount for the retirement benefits in other accumulated income.
As a result, the consolidated liabilities for retirement benefits at the beginning of FY2015 decreased by
1,425 million yen, and retained earnings increased by 917 million yen.
In addition, impact on operating income, ordinary income and income before income taxes in FY2015 isimmaterial(Unapplied accounting standard, etc.)
・ Accounting Standards for Business Combinations- “Accounting Standards for Business Combinations” (ASBJ Statement No. 21, issued on September 13, 2013)- “Accounting Standards regarding Consolidated Financial Statements” (ASBJ Statement No. 22, issued on
September 13, 2013)- “Accounting Standards for Business Divestitures” (ASBJ Statement No.7, issued on September 13, 2013)- “Accounting Standards for Net Income Per Share” (ASBJ Statement No. 2, issued on September 13, 2013)- “Guidance on Application of Accounting Standards for Business Combinations and Accounting Standards for
Business Divestitures” (ASBJ Guidance No. 10, issued on September 13, 2013)- “Guidance on Application of Accounting Standards for Net Income Per Share” (ASBJ Guidance No. 4,
issued on September 13, 2013)(1) Overview
Revisions of these accounting standards mainly apply to (i) the accounting treatment of any changes ina parent’s ownership interest in a subsidiary when the parent retains control over the subsidiary, (ii) the
accounting for acquisition-related costs, (iii) the presentation of net income and the change of namefrom “minority interests” to “non-controlling interests”, and (iv) the transitional treatments for these21accounting standards.
(2) Scheduled date for the application
The revised accounting standards and guidance are scheduled to take effect from the beginning of the
fiscal year starting on January 1, 2016. The transitional treatment will be applied to businesscombinations executed at or after the beginning of the year starting on January 1, 2016.
(3) Impacts of the application of the said accounting standards
The impacts on the consolidated financial statements are under evaluation at the time of preparing theconsolidated financial statements.
(Change in disply method)
In previous fiscal year, gain on sales of investment securities, was included in "Other" of " Extraordinary income ", also,
Lease cancellation penalty, was included in "Other" of " Extraordinary losses ".
because the amount exceeded 10% of total either extraordinary income or extraordinary loss , It has been changed to amethod of presented separately.

In order to reflect this change ,we recalibrated the consolidated financial statements of last year.
(Consolidated balance sheet)*1 The accumulated depreciation of tangible fixed assets include accumulated impairment losses.
(Consolidated Statement of income)*1

Year-end inventory represents the amount after write-down due to a decreased profitability and thenext inventory appraisal loss is included in the cost of goods sold.
FY2014FY201532 MM yen

244 MM yen*2

Major items and amounts of selling and general administration expenses are as follows.
FY2014FY2015

Sales commission

45,011 MM yen

47,637 MM yen

Advertisement and promotion cost

25,217

27,520Transportation cost

51,772

57,384

Salaries/allowance and bonuses

46,79152,938Retirement benefit cost

1,868

1,835

Provision of allowance for bonus

1,945

1,205

Provision of allowance for retirement benefits for Officers

2-

Provision of allowance for bonuses for Officers

37

37

Provision of allowance for doubtful accounts
Depreciation cost

*3

44

30

16,74016,319

Breakdown of loss on disposal (sales) of noncurrent assets are as follows.
FY2014FY2015

Machinery Equipment And Vehicles

0 MM yen

1 MM yen

Sale equipment

370

862

370 MM yen

864MM yen

Total

*4

Breakdown of gain on sales of noncurrent assets are as follows.
FY2014FY2015

Buildings and structures

6 MM yen- MM yen

Machinery Equipment And Vehicles

4322

Tools, furniture and fixtures

-

0

Land

546

7

Total

*5

595 MM yen

8 MM yen

Breakdown of loss on disposal (sales) of noncurrent assets are as follows.
FY2014FY2015

Buildings and structures

188 MM yen

400 MM yen

Machinery Equipment And Vehicles

236

631

Tools, furniture and fixtures

5

16

Lease assets

-

4

Land

-

5

noncurrent assets

5

71

Total

435 MM yen

1,130 MM yen*6 Details of lease cancellation penalty
FY2014
Machinery Equipment And Vehicles

FY201547 MM yen

261MM yen

Sale equipment

0202

Tools, furniture and fixtures

-

3

Total

*7

48 MM yen

467 MM yen

Breakdown of restructuring cost is as follows.
FY2014

Expenses related to transition of- MM yen

331 MM yen

253

48

1,484

619

183

20

mission-critical systems
Expenses for the relocation of head
office and branch offices, etc.
Special retirement expenses

FY2015Special retirement expenses for
Directors
Total

1,922 MM yen

1,020 MM yen

Expenses related to transition of mission-critical systems is 331 MM yen accrued in provision for loss oncontract.
*8 Quality measures expenses
FY 2014 (Jan 1st, 2014- Dec. 31st, 2014)
Disposal loss of 515 MM yen and collection expenses of 127 MM yen were recorded as the voluntary
products recall related expenses.

23

*8

Impairment loss

The Group has posted the impairment loss for the below assets for FY 2014 as follows.
Location

PurposeType

Impairment loss (MM yen)

Utsunomiya-city Tochigi Pref.

Unutilized asset

Land

37

Nasu, Tochigi Pref.

Unutilized asset

Land

18

Kashima-City, Ibaraki Pref.

Unutilized asset

Land

8

Takayama-City, Gifu Pref.etc.

Unutilized asset

Land

4

For assets for business, the Group uses management accounting unit for the basis of asset groups and applies
the grouping minimum unit to produce independent cash flow. In addition, for assets leased to others andunutilized assets, the Group has judged signs of impairment loss using an individual property as grouping
minimum unit.
Effective with our decision to terminate certain plant activities, the value of the affected assets was adjusted frombook value to realizable value with difference recorded as impairment losses.
Regarding the unutilized assets, they are currently idle and expected to be under suspension of operation.
Moreover the future use is not determined, thus we have decreased the book value to recoverable value andposted the decrease as impairment loss for extraordinary loss.
In addition, the recoverable value has been measured at net sales value and the evaluation is of less importance,thus it is based on the value calculated with rational adjustment of the fixed asset tax assessed valuation.
The Group has posted the impairment loss for the below assets for FY 2015 as follows.
Location

PurposeType

Impairment loss (MM yen)

Ohtawara city Tochigi Pref

Unutilized asset

Land

2

Utsunomiya-city Tochigi Pref.

Unutilized asset

Land

1

Izu city Shizuoka Pref.

Unutilized asset

Land

1

Nasu ,Tochigi Pref.(others)

Unutilized asset

Land

2

For assets for business, the Group uses management accounting unit for the basis of asset groups and applies
the grouping minimum unit to produce independent cash flow. In addition, for assets leased to others andunutilized assets, the Group has judged signs of impairment loss using an individual property as grouping
minimum unit.
Effective with our decision to terminate certain plant activities, the value of the affected assets was adjusted frombook value to realizable value with difference recorded as impairment losses.
Regarding the unutilized assets, they are currently idle and expected to be under suspension of operation.
Moreover the future use is not determined, thus we have decreased the book value to recoverable value andposted the decrease as impairment loss for extraordinary loss.
In addition, the recoverable value has been measured at net sales value and the evaluation is of less importance,thus it is based on the value calculated with rational adjustment of the fixed asset tax assessed valuation.

24

(Consolidated comprehensive statement of income)*Amounts of reclassification adjustment and tax effect for other comprehensive income
FY2014FY2015

Valuation difference on available-for-sale securities：
Amount incurred during the period

1,198 MM yen

1,086MM yen

Reclassification adjustment value

12

-707

Before tax effect adjustment

1,210

378

Tax effect value

-433

128

Valuation difference on available-for-sale securities

777

507

Deferred gains or losses on hedges：
Amount incurred during the period－MM yen－MM yen

Reclassification adjustment value

3－

Before tax effect adjustment

3－

Tax effect value-1－

Deferred gains or losses on hedges

2－

Remeasurements of defined benefit plans：
Amount incurred during the period－MM yen

Reclassification adjustment value－

507

Before tax effect adjustment

－

2,555

Tax effect value－-1,088Remeasurements of defined benefit plans

－

1,465

2,047MM yen

Share of other comprehensive income of associates accounted
for using equity methods：
Amount incurred during the period

502 MM yen-766 MM yen

Reclassification adjustment value

－

－

502

-766

1,281

1,206

Share of other comprehensive income of associates
accounted for using equity method
Other comprehensive income(Consolidated statement of changes in equity)
FY 2014 (Jan 1st, 2014- Dec. 31st, 2014)
1.

Type and total number of issued shares, and type and number of treasury shares
Type of shares

Shares as of Jan. 1st,
2014

Issued shares

Increase in Shares for Decrease in shares for Shares as of Dec. 31st,
FY 2014

Shares

FY 20142014

SharesSharesSharesCommon shares

121,898,978－－

121,898,978

Total

121,898,978－－

121,898,978

SharesSharesTreasury shares

SharesSharesCommon shares

856,494

9,499

11,563

854,430

Total

856,494

9,499

11,563

854,430

25

Notes:1.The increase in the number of treasury shares is due to purchase by the Company of odd lot shares.
The decrease in the number of treasury shares is due to sale by the Company of odd lot shares and exercise of stock options.
2. Share Options, etc.
Share options as stock options
Closing balance of share options at the end of FY2014:

223MM yen

3. Dividends(1) Dividends paid
Resolution

Type of ShareTotal dividends

Dividends per share(MM yen)(yen)

Record Date

Effective Date

March 28, 2014
AnnualShareholders

Common1,694

14

December 31, 2013

March 31, 2014

Common1,936

16June 30, 2014

September 8, 2014

Meeting
August 6, 2014
BOD Meeting(2) Of the dividends which base date is in FY2014, dividends which effective date is in FY2015
Resolution

Type of ShareDividend

Total dividends

Dividends per

resource(MM yen)share (yen)Record Date

Effective Date

December 31, 2014

March 31, 2015

March 30, 2015
AnnualShareholders

CommonRetained

1,936

earnings

16

Meeting

FY 2015 (Jan 1st, 2015- Dec. 31st, 2015)
1.

Type and total number of issued shares, and type and number of treasury shares
Type of shares

Shares as of Jan. 1st,

Increase in Shares for Decrease in shares for Shares as of Dec. 31st,

2015
Issued shares

FY 2015
SharesShares

FY 20152015

SharesSharesCommon shares

121,898,978

5,781,166－

127,680,144

Total

121,898,978

5,781,166－

127,680,144

Treasury shares

SharesSharesSharesSharesCommon shares

854,430

6,590

5,366

855,654

Total

854,430

6,590

5,366

855,654

Notes:
1. The total number of shares outstanding has increased 5,781,166 shares by exchanging shares with Sendai Coca-Cola
Bottling Co., Ltd. on April 1, 2015 (exchange ratio 1: 2.563)
2. The increase in the number of treasury shares is due to purchase of odd lot shares.
3. The decrease in the number of treasury shares is due to sale by the Company of odd lot shares and exercise of stock
options.
2. Share Options, etc.
Share options as stock options
Closing balance of share options at the end of FY2014:

420MM yen26

3. Dividends(1) Dividends paid
Resolution

Type of ShareTotal dividends

Dividends per share(MM yen)(yen)

Record Date

Effective Date

March30, 2015
AnnualShareholders

Common1,936

16

December 31, 2014

March 31, 2015

Common2,029

16June 30, 2015

September7, 2015

Meeting
August 6, 2015
BOD Meeting(2) Of the dividends which base date is in FY2015 dividends which effective date is in FY2016
Resolution

Type of ShareDividend

Total dividends

Dividends per

resource(MM yen)share (yen)Record Date

Effective Date

December 31, 2015

March 30, 2016

March 29, 2016
AnnualShareholders

CommonRetained

2,029

earnings

16

Meeting(Consolidated cash flow statement)*1. Relation between the closing balance of cash and cash equivalent for the period and amounts of items
declared in the consolidated balance sheet
FY 2014

FY 2015(Jan 1st, 2014- Dec. 31st, 2014) (Jan 1st, 2015- Dec. 31st, 2015)
Cash and deposit account24,982 MM yen

Fixed-term deposit which deposit term exceeds 3 months
Cash and cash equivalent

21,578 MM yen

-11

-5

24,971

21,573*2. Assets and liabilities of new consolidated subsidiaries acquired through share exchanges during theconsolidated fiscal year
FY 2014 (Jan 1st, 2014 Dec. 31st, 2014)
Not applicable
FY 2015 (Jan 1st, 2015 Dec. 31st, 2015)
Along with anew stock exchange with Sendai CCBC and other existing five companies, the breakdown of assets
and liabilities and relation between stock acquisition price and “Proceeds from acquisition of investments in
subsidiaries resulting in change in scope of consolidation” at the time of consolidation starts are as follows:
Current asset
Noncurrent asset
Current liability
Noncurrent liability
Gain from negative goodwill
The acquisition cost of the stock
Cash and cash equivalentIssuance Costs for share exchange
Commission for share exchange
Proceeds from acquisition of investments in subsidiaries
resulting in change in scope of consolidation

13,290 MM yen
22,677-11,299-10,408-84
14,175-3,227-14,175
89
3,138

27

3 Note on significant non-cash transactions
FY 2014 (Jan 1st, 2014- Dec. 31st, 2014)
Not applicable
FY 2015 (Jan 1st, 2015- Dec. 31st, 2015)
Capital surplus increased through share exchange: 14,175MM yen(Segment information, etc.)
a. Segment Information
The Group has sole segment of beverage business, thus the description is omitted.
b. Related Information
FY 2014 (Jan. 1st, 2014-Dec. 31st, 2014)
1. Information by product and service
The beverage business’ net sales to unaffiliated customers accounts for more than 90% of the total net sales in
the consolidated Statement of income, thus the description is omitted.
2. Information by area
(1) Net sales
The net sales to unaffiliated customers in Japan accounts for more than 90% of the net sales in the consolidated
Statement of income, thus the description is omitted.
(2) Tangible fixed assets
Tangible fixed assets amount in Japan is more than 90% of Tangible fixed assets in the consolidated Statementof income, thus the description is omitted.
3. Information by major customer
Of the net sales to unaffiliated customers, the Group has no account whose net sales accounts for 10% of thenets sales in the consolidated Statement of income, thus the description is omitted.
FY 2015 (Jan. 1st, 2015-Dec. 31st, 2015)
1. Information by product and service
The beverage business’ net sales to unaffiliated customers accounts for more than 90% of the total net sales in
the consolidated Statement of income, thus the description is omitted.
2. Information by area
(1) Net sales
The net sales to unaffiliated customers in Japan accounts for more than 90% of the net sales in the consolidated
Statement of income, thus the description is omitted.
(2) Tangible fixed assets
Not applicable as the Group has no tangible fixed assets located in overseas.
3. Information by major customer
Of the net sales to unaffiliated customers, the Group has no account whose net sales accounts for 10% of thenets sales in the consolidated Statement of income, thus the description is omitted.

28

c. Information on impairment loss of fixed assets by reported segment
FY 2014 (Jan. 1st, 2014-Dec. 31st, 2014)
The Group has sole segment, thus the description of impairment loss of fixed assets by reported
segment is omitted.
FY 2015 (Jan. 1st, 2015-Dec. 31st, 2015)
The Group has sole segment, thus the description of impairment loss of fixed assets by reported
segment is omitted.
d. Information on amortized amount and unamortized balance of goodwill by reported segment
FY 2014 (Jan. 1st, 2014-Dec. 31st, 2014)
Not applicable.
FY 2015 (Jan. 1st, 2015-Dec. 31st, 2015)
The Group has sole segment, thus the description by reported segment is omitted.
FV East Japan Co., Ltd., (name was changed from Mikuni Foods Co., Ltd) who is one of our consolidated
subsidiaries, merged consolidated subsidiaries -FV-Central Co., Ltd, Urban Vend-X Network Co., Ltd, WEX Tokyo
Co., Ltd, EX-Service Co., Ltd, and non-consolidated subsidiary subject to the equity method- Fresh Vendor Service
Co., Ltd, and non-consolidated subsidiaries -TX Campus Co., Ltd, Nitto Pacific Vending Co., Ltd. as of April 1, 2015.
This resulted in an increase of goodwill by 633 million yen. Amortization of goodwill is 54 million, unmortized balanceis 579million.

e. Information on profit of negative goodwill by reported segment
FY 2014 (Jan. 1st, 2014-Dec. 31st, 2014)
Not applicable.
FY 2015 (Jan. 1st, 2015-Dec. 31st, 2015)
Not applicable.

29

(Per share information)
FY2014
Net assets per share

FY2015

1,764.07 yen

1,817.67 yen

Net income per share for the year

28.37 yen42.70 yen

Net income per share fully diluted for the year

28.36 yen42.64 yen

Note: The basis for calculation is as follows.
(1) Net assets per share
FY2014FY2015

Net assets per share
Total amount of the section of net assets (MM yen)

213,754

230,945

Amount deducted from total amount of the section of net assets (MM yen)

223

420

(Share options of the above) (MM yen)

(223)

(420)

213,530

230,525

121,044,548

126,824,490

Net assets for common shares at year-end
Number of issued common shares at year-end (shares)(2) Net income per share
FY2014FY2015

Net income per share
Net income for the year (MM yen)

3,434

5,354

3,434

5,354

121,047,933

125,399,031

Increase in number of common shares (shares)

51,105

171,625(Number of share options of the above) (shares)(51,105)(171,625)

Amount not attributable to common shareholders
Net income for the year attributable to common shares
Average number of common shares (shares)

Net income per share (Fully diluted)
Adjustment to net income (MM yen)

(Significant subsequent events)
Not applicable.

30