-Creating a happy tomorrow for everyone-

2014
ANNUAL REVIEWTABLE OF CONTENTS

Consolidated Financial Data:
Trends in Key Financial Indices ...................................

2

Financial Information ................................................... 21

To Our Shareholders and Investors ..............................

3

Soft Drink Business ......................................................

5

Outline of the Business.............................................................

5

Consolidated Statements of Income and Consolidated
Statements of Comprehensive Income....................................... 25

Sales Activities .........................................................................

7

Consolidated Statements of Changes in Shareholders’ Equity ..... 26

SCM Activities.......................................................................... 12

Consolidated Statements of Cash Flows .................................... 27

Healthcare & Skincare Business .................................. 13

Other Information ......................................................... 28

Sales Activities ......................................................................... 13

Risk Information ....................................................................... 28

Business Results for Fiscal 2014 .............................................. 21
Business Results by Business Segment ..................................... 22
Consolidated Balance Sheets .................................................... 23

Corporate Governance.............................................................. 29

Corporate Social Responsibility Activities................... 15

Top Management ..................................................................... 34

Initiatives through Our Business Activities as
a Community-Oriented Company .............................................. 15

Dividend Policy and Shareholder Reward Points System ............. 35
Stock Information ..................................................................... 36

Quality Control Initiatives .......................................................... 16
Coca-Cola System in Japan ...................................................... 37
Global Environmental Protection Activities .................................. 17
Local Community Contribution Activities, Local Environment
Improvement Activities ............................................................. 19

In the business ﬁeld primarily for drinks, we will continue to discover new needs ofconsumers, as well as the provision of safe and secure high-quality products andservices. In addition, our corporate philosophy expresses that we will offer products

Corporate Philosophy

and services that enjoy new values through uninterrupted innovations; thereby,

We will contribute to the happy lifestyle

O we contribute to the physical and mental wellbeing (that is, “happiness”)

of all our stakeholders and contribute tofor people to lead a positive life, such as taste, fun, health, and comfort, in thediverse lifestyle of our consumers, andthe development of a sustainable society

O we deﬁnitely keep in mind contribution to environmental preservation and coby providing value and refreshment

existence with local communities in our business activities, and based on these
efforts, we contribute to development of a sustainable society.

through our beverage portfolio.

Coca-Cola West1

Annual Review 2014

CONSOLIDATED FINANCIAL DATA: TRENDS IN KEY FINANCIAL INDICES

2010

2011

2012

2013

2014

Net Revenues (Millions of yen)
Growth Rate in Net Revenues (%)

375,764
1.6

399,7176.4

386,637(3.3)

431,711
11.7

424,406(1.7)

Operating Income (Millions of yen)
Operating Income / Net Revenues (%)

12,003
3.2

16,4694.1

13,463
3.5

15,9273.7

11,008
2.6

Recurring Income (Millions of yen)
Recurring Income / Net Revenues (%)

12,6593.4

16,0444.0

13,845
3.6

16,606
3.8

10,6092.5

12,982

14,013

12,186

18,730

8,409

3.5

3.5

3.2

4.3

2.0

7,582
2.0

6,997
1.8

6,031
1.6

13,625
3.2

4,482
1.1

−

5,605

7,326

16,332

6,931

75.84

69.99

60.33

128.1541.07

Return on Equity (%)

3.4

3.1

2.6

5.6

1.8

Return on Assets (%)

3.8

4.7

4.1

4.7

3.0

Total Assets (Millions of yen)

346,032

342,560

337,348

374,418

337,260

Net Assets (Millions of yen)

226,267

227,864

231,056

257,936

254,150

65.3

66.4

68.4

68.8

75.2

2,260.03

2,275.55

2,307.44

2,359.82

2,325.19

Price Book Value Ratio (PBR) (times)*1

0.7

0.6

0.6

0.9

0.7

Price Earnings Ratio (PER) (times)*2

19.4

19.1

22.1

17.4

40.4

Cash Flow from Operating Activities (Millions of yen)

31,732

39,96026,32440,082

28,628Cash Flow from Investing Activities (Millions of yen)

(49,203)(34,050)(14,243)(16,493)(9,590)Cash Flow from Financing Activities (Millions of yen)

(16,316)(8,780)(7,149)(8,286)(37,498)

Cash and Cash Equivalents at End of Fiscal Year (Millions of yen)

37,43434,56439,49560,27541,830

Dividend Payout Ratio (Consolidated) (%)

52.7

58.6

68.0

32.0

99.8

Dividend per Share (yen)(Interim Dividend Amount per Share) (yen)40.00(20.00)41.00(20.00)41.00(20.00)41.00(20.00)41.00(20.00)Interest Coverage Ratio (times)*3

35.4

58.1

41.8

66.0

50.8

Depreciation (Millions of yen)

22,405

21,371

20,64323,75822,943

Capital Expenditure (Millions of yen)

16,524

21,201

20,031

20,242

22,783

7,604
(46%)

9,518
(45%)

8,704
(43%)

9,501
(47%)

12,204(54%)

Income before Income Taxes, Minority Interests andOther Adjustments (Millions of yen)
Income before Income Taxes, Minority Interests andOther Adjustments / Net Revenues (%)
Net Income (Millions of yen)
Return on Sales (%)
Comprehensive Income (Millions of yen)
Net Income per share (yen)Equity Ratio (%)
Net Assets per Share (yen)Capital Expenditure for Sales Equipment (Millions of yen)
(Share of Capital Expenditure for Sales Equipment)*1 Price Book Value Ratio (PBR) = Market Value at End of Period ÷ Equity per Share*2 Price Earnings Ratio (PER) = Market Value at End of Period ÷ Net Income per Share*3 Interest Coverage Ratio = Operating Cash Flow ÷ Interest Paid

Coca-Cola West2

Annual Review 2014

TO OUR SHAREHOLDERS AND INVESTORS

houses) to our partner companies outside the group and on June 30,

We are deeply grateful to all of our shareholders and investors for2014, resolved two subsidiaries, Coca-Cola West Logistics Co., Ltd.

continued support.

and Minami Kyushu IDC Co., Ltd., which had assumed such functions.

This report presents information on our business conditions andThrough these structural reforms and the recruitment of persons who

performance for the year ended December 2014.

wished to retire, persons transferred to our partner companies outside
the group amounted to 374, persons transferred within the group to
2,052, and persons who wished to retire to 460.

Overview of Business Results for the Fiscal Year 2014

In the health food industry, needs of health care products remained

In 2014, the Japanese economy saw a continued moderate recov-

stable on the back of the growing awareness of “self-care.” Also in

ery, primarily marked by a lasting improvement in employment andthe cosmetics industry, all-in-one type cosmetics were selling well. In

income environment, but remained uncertain as there was a concern

contrast, competition is becoming intensiﬁed due to new entries fromover a prolonged backlash after the last-minute rise in demand before

different industries.

a consumption tax increase.

Under such business environment, in the healthcare & skincare

The soft drink industry experienced temporal growth backed by thebusinesses, we focused on strengthening a basis for growth over thelast-minute rise in demand before a consumption tax increase, but

future, with 2014 basic strategies of (1) strengthening existing busi-

the market shrunk compared with the previous year, led by the effects

nesses, (2) growth through new businesses, etc., and (3) strengthen-of sluggish consumption due to budget-minded consumers after a

ing the corporate brand.

consumption tax increase and unseasonable weather in summer in

The Coca-Cola West Group is working on activities to promotewestern Japan. In addition, amid the fierce market condition, sales

Corporate Social Responsibility (CSR) under the four basic concepts ofcompetition was intensified between soft drink companies and the“Corporate Activities with Integrity,” “Human Dignity,” “Together withenvironment around soft drink companies remained tough as seen inSociety,” and “Harmony with the Environment.” With respect to “To-a continuous decline in retail prices.

gether with Society,” we are engaging in local community contribution

Under such circumstances, in 2014, we focused our management

activities under our basic stance of “with local communities.” We havepolicy for the soft drink business on (1) implementing an appropriate

been continuing our efforts to encourage the healthy development

segmentation strategy for a competition that we targeted and aimedof youth and promote closer communication with communities. In

at the overwhelming No. 1 share in the industry, and (2) going ahead

regards to “Harmony with the Environment,” we have made our ef-

toward being a high proﬁt company (excellent company) through ini-

forts for global environmental protection to strike a balance between

tiatives of a review of the group’s operating structure and a businessbusiness development and the reduction of environmental load. At themodel innovation. On the basis of these efforts, we strove to achievesame time, with the slogan of “Sawayaka for people and the environ-

our management goals while ensuring continuous growth over thement (fine people and pleasant environment),” we have worked on

future and promoting the creation of a basis for strengthening our

local environment improvement activities to achieve the development

earnings capacity.

of a sustainable society.

Furthermore, with the aim of strengthening our proﬁt base throughAs the result of the above initiatives, we faced a harsh business en-

an improvement in operational quality and productivity, we reviewed

vironment. As for our consolidated performance for the period ended

functions held within the group, carried out the outsourcing of a por-December 2014, the company reported net revenues of ¥424,406

tion of the functions to our partner companies outside the group, andmillion (down 1.7%), operating income of ¥11,008 million (downconsolidated and relocated functions within the group. Specifically,

30.9%), recurring income of ¥10,609 million (down 36.1%), and net

on January 1, 2014, we conducted an absorption-type merger withincome of ¥4,482 million (down 67.1%).

Minami Kyushu Coca-Cola Bottling Co., Ltd., and achieved an integration effect. In addition, we made a sales function subsidiary, sales
equipment maintenance subsidiary, and producing function subsidiary
merge in order to integrate for respective functions, together withcompany split. Through these measures, we reallocated the site ofﬁce
work, operation center functions and recycle center functions within
the group. On May 1, 2014, we outsourced logistics functions (functions for transportations between ofﬁces and the work between ware-

Coca-Cola West3

Annual Review 2014

Future Prospects

Dividends

Looking at future prospects, the environment around the soft drink

Taking into comprehensive consideration the company’s perfor-

industry will experience continuously severe conditions due mainly tomance in FY and the business environment facing us going forward,

soaring raw materials / materials prices stemming from the weaken-

the annual dividend for the period ended December 2014 was set at

ing yen, coupled with a slump in consumption and price reduction. In¥41 per share.

these circumstances, we established 2015 management strategiesof (1) returning to the basics, implementing drastic reviews of all

As we work toward attaining these goals, we would like to seek fur-operations, and creating an expense / investment / personnel systemther support and understanding from all shareholders and investors.

appropriate for the capability of the company “in a bid to review thecompany from scratch,” and (2) seeking to achieve numerical goals inall of revenues, operating income, sales volume and market shares bythoroughly carrying out various measures depending on customers by
area / channel based on customer-oriented approach. Based on thesestrategies, we will pursue the achievement of our management goals
while ensuring continuous growth over the future and promoting thecreation of the basis for increasing our earnings capacity.
In the health food industry and cosmetic industry, with the increasing awareness in health and beauty in recent years, the market will
expand but on the other hand, competition between companies is
expected to be increasingly ﬁerce. Under these circumstances, for thehealthcare & skincare businesses, we will focus on the 2015 strategies of (1) reinforcing the home shopping platform (a marketing strategy in light of market environment by product), and (2) implementing
a product strategy responding to the new functionality labelling system. Through these strategies, we will carry out activities where ourstrengths are used to the utmost extent, gain the trust of consumers,
thereby striving to achieve sustainable growth.
Furthermore, the Coca-Cola West Group will further promote its
contribution to local communities and environmental preservation andwork on energy/resource usage reduction, and we will make our allout efforts to become a company trusted by all of its stakeholders.

Tamio Yoshimatsu
Representative Director & President

Coca-Cola West4

Annual Review 2014

SOFT DRINK BUSINESS
Outline of the Business
Roles of Our Company and Coca-Cola (Japan) Co., Ltd.
In Japan, the roles of Coca-Cola (Japan) Co., Ltd. and bottlers are separated clearly. Coca-Cola (Japan) is engaging in planning / research and development of products as well as producing syrup concentrates and advertising, etc. Our company, abottler, is engaging in production and sale of products through to collection and recycling of empty containers.

Coca-Cola (Japan) Co., Ltd.

Planning

Research andDevelopment

Productionof Syrup
Concentrates

Our Company (Bottler)
Producing
Products

Product
Distribution

Sales

Collectionof Containers

Recyclingof Containers

Our Business Areas
Coca-Cola West is the world's leading bottler which covers 18 prefectures in western Japan as sales territories. We have integrated
and merged with four bottlers since 1999 to expand our business areas and led the Coca-Cola business in Japan.

Ourr Business
B
Areas

In and before 1998

Sales territory

41,245,00032%■ Kita Kyushu Coca-Cola Bottling Co., Ltd.

[Population]■ Sanyo Coca-Cola Bottling Co., Ltd.

Nationwide■ Kinki Coca-Cola Bottling Co., Ltd.

127,083,000■ Mikasa Coca-Cola Bottling Co., Ltd.

in 2014■ Minami Kyushu Coca-Cola Bottling Co., Ltd

Our History (details of mergers, etc.)
1960
1999
2001
2006
2007
2009
2013
2014

The company was established (Nichibei Inryo Co., Ltd., and thereafter, the corporate name changed to Kita Kyushu Coca-Cola Bottling Co., Ltd.).
Merged with Sanyo Coca-Cola Bottling Co., Ltd. ▶ Trade name changed to Coca-Cola West Japan Co., Ltd. (CCWJ).
Made Mikasa Coca-Cola Bottling Co., Ltd. (Mikasa CCBC) a subsidiary.
Integrated the management of Kinki Coca-Cola Bottling Co., Ltd. (Kinki CCBC) ▶ Joint stock holdings company Coca-Cola West Holdings Co., Ltd.
(CCWH) was established.
Entered into a capital and business alliance with Minami Kyushu Coca-Cola Bottling Co., Ltd. (Minami Kyushu CCBC)▶ Made a 20-percent investment in Minami Kyushu CCBC and made it an equity-method affiliate.
CCWH, CCWJ, Kinki CCBC, and Mikasa CCBC merged. ▶ Coca-Cola West Co., Ltd.(CCW) was established.
Made Minami Kyushu CCBC a wholly owned subsidiary (as of April 1).
Merger of CCW and Minami Kyushu CCBC(January 1)

Coca-Cola West5

Annual Review 2014

The Soft Drink Industry and Our Market SharesSoft Drink Industry Trends
The production volume of soft drinks in 2014 was lower than in the previous year due to the effect of reduced demand caused by increasing
budget-minded consumers led by the effect of the consumption tax increase. The soft drink market, however, has been growing steadily, marking
approximately 1.6 times in size over the past 20 years.
[ Production Volume of Soft Drinks ](Unit: 1,000 kl)

Composition Ratio by Category

20,043 for 2014
20,00017% Other

17,2098% Sports and functional drinks

220%

15,00012,732
10,0005,000

15% Mineral water

8%
8%

220%
8%
4%
224%

27% Tea beverages

332%

119%

116%

223%

116%

15% Coffee beverages
18% Sparkling beverages

0

2004

1995

2014

Source: Statistical Report on Soft Drinks, Japan Soft Drink Association, a General Incorporated Association (Data for the year 2014 is preliminary.)

Our Market Share
Our company has secured the number one spot in the soft drink industry, and is the number one provider in many of the major categories, which
include sparkling beverages and canned coffee.
Coca-Cola WestOver-the-Counter Sales Market Sharefor 2014 (excluding vending machines)

Coca-Cola West

Outdoor Vending Machine Market Sharefor 2014

22.9%

Source: Store Audit, Intage, Inc.

31.7%

Source: McNET, Inc. (Period of evaluation: June to July)uly)

Over-the-Counter Sales Market Share by Category for 2014 (excluding vending machines)

Sparkling beverages

Coca-Cola West

41.6%

Canned coffee

Blend tea

Coca-Cola West

34.3%

Coca-Cola West

55.9%

Source: MBI conducted by Intage, Inc.

Coca-Cola WestSports and functional drinks

6

Annual Review 2014

Coca-Cola West50.9%

Sales Activities
Overview of Sales Strategies
We are striving for expansion of market shares and sales volume with an increase in net revenues and operating income. This will
be conducted by subdividing areas into prefectural units in each sales channel and implementing an elaborate marketing strategy,
depending on customers. Speciﬁcally, we fully identify the trends of consumers / customers and competitive environment in eacharea (prefecture/city/suburb), and then set a brand / package and an appropriate price when implementing sales activities.

IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII

Collecting Purchase Information/Analyzing and
Identifying Market Environments

Channels

Areas

Products

Five Area
Sales Divisions

Vending

IIIIIIII● Effectively using operational funds● Brands● Packaging● Prefectural● Cities/Suburbs

Chain Store××

IIIIIIII● Planning elaborate marketing strategies

Collecting Purchase Information/
Analyzing and Identifying Market Environments

Implementing
Marketing Strategies

IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII

III
IIIIIIIIIIIIIII
II

Consumers/Customers

IIIIIIIIIIIIIIIII×
Pricing/Promotion

Retail &Food Service
RGM※１

Products (brand, packaging)

Pricing / Promotion

Coca-Cola West is offering various packaging and developing products with the optimum packaging for each brand according to eachcategory of customers.

Depending on each category of customers and the competitiveenvironment, we have established a price guideline for each productand based on the guideline, we are engaging in business activities.
In addition, we conduct an ROI*2 analysis and are striving to optimize
marketing expenses for each condition of customers.
*2 ROI: Abbreviation of Return on Investment meaning cost-effectiveness

300ml

500ml

1.0L

1.25L

1.5L

2.0L

*1

What isＲＧＭ ?

RGM is the abbreviation of Revenue Growth Management and refers to a marketing strategy that is specialized inpursuing the expansion of proﬁt through growth in sales exceeding the growth in sales volume. Under the circumstances where budget-minded consumers increase and harsh competition environment continues, we are striving toenhance the quality of business activities in a bid to achieve growth with an increase in income.

Coca-Cola West7

Annual Review 2014

Channel Strategies
We provide products to consumers from various locations such as vending machines, supermarkets, convenience stores andrestaurants. We are implementing detailed marketing activities such as promotional activities and product line-ups according to theseason, based on the location of sales for each channel.
Sales Volume by Channel(unit: 1,000 cases)

2013

2014

■ Vending

59,63258,585(1.8)%■ Supermarket

64,584

66,871+3.5%■ Convenience store

23,66025,176+6.4%■ Retail

15,012

12,321(17.9)%■ Food service

21,37323,377+9.4%■ Other

33,09630,346(8.3)%

Total

217,359

216,675(0.3)%VENDING

Composition of Sales Volume in 2014

Percentage change

Other
14.0%

Vending
27.0%

Food Service
10.8%
Retail5.7%
Convenience Store
11.6%

Supermarket
30.9%(Vending Machines)

In the vending channel, our products are delivered directly to the consumer through about 330
thousand vending machines.
In 2014, we strove to collect and analyze sales information and created a thorough optimum
product line-up according to characteristics of the location of each specific machine while implementing promotion depending on the site of installation, to enable a more enjoyable vending
machine experience for our consumers. Moreover, for new installation of vending machines, weused optimum vending machines, including Peak-Shift Vending Machines and Cashless Vending
Machines, appropriate for characteristics of the site of installation.

CHAIN STORE

Vending machine operation(Supermarkets, Convenience Stores, etc.)

In our chain store channel, we provided product line-ups according to consumer needs andthoroughly implemented campaigns tailored for each season and events at supermarkets and convenience stores.
In 2014, we activated sales locations by running a campaign capitalizing on the 2014 FIFA
World Cup at sales locations for events. Furthermore, we strove to reinforce sales of small-container products ﬁtting for each sales location, such as delicatessen corner and confectionery corner.
Meanwhile in addition to allocating new products at convenience stores, including bottled cancoffees etc. which are gaining demand, we focused on expansion of sales by launching products
jointly developed with customers. .

RETAIL & FOOD SERVICE

Supermarket in-store activities(Kiosk, Restaurants, etc.)

In the retail & food services channel, we are proposing optimum sales methods for outlets, station/hospital kiosk, restaurants and bars.
In 2014, with the increasing customer needs for poured coffee, we strove to enhance services
to customers, such as installing brewed coffee equipment at kiosks. Meanwhile, at restaurants,
we expanded the handling of our products, such as adding new products to menus and submitting
proposals for a drink menu where our products are contained. Furthermore, we made efforts toincrease transaction stores by using sales equipment, including brewed coffee equipment and table-top coolers.

Coca-Cola West8

Annual Review 2014

Business talk with a customer

Sales Activities
Brand Strategies
Coca-Cola, Coca-Cola Zero, Fanta, Georgia, Sokenbicha, Aquarius, Ayataka, and I LOHAS are our core eight brands. In 2014, ourinvestments were particularly centered on Coffee, Sparkling, and Sugarless Tea, and thereby we made efforts to strengthen sales
for increased growth.
Sales Volume by Brand(unit: 1,000 cases)

Composition of Sales Volume in 2014201415,281

15,313■ Coca-Cola Zero

7,049

6,928

(1.7)%■ Fanta

9,068

8,761

(3.4)％■ Georgia

44,74645,351+1.4％■ Sokenbicha

11,835

11,005(7.0)％■ Aquarius

22,896

20,321(11.2)％■ Ayataka

14,433

16,205+12.3％I LOHAS
5.5%■ I LOHAS

9,543

11,852+24.2％Ayataka
7.5%■ Other

82,50880,939(1.9)％

Total

217,359

216,675(0.3)％

Core 8 Brands

2013■ Coca-Cola

Percentage change

Coca-Cola
7.1%
Coca-Cola Zero
3.2%
Fanta
4.0%

+0.2%
Other
37.3%

Georgia
20.9%

Sokenbicha
5.1%
Aquarius
9.4%

Core 8 brands

62.7%

Coca-Cola
HAS
I LOHAS

Cooca-C
Coca-Co
oca C
Co ZeroCoca-Cola

8

Core
AyatakakabrandsFanta
F

Georgia
Geo

Aquarius
i
ius
Soke
Sokenbicha
Other Major Brands

Coca-Cola West9

Annual Review 2014

CoffeeSparkling

Georgia
To respond to increased preference for authentic coffees, we fully
reviewed and renewed our coffee beans and manufacturing processes, such as roasting and extraction, for “Georgia European” series
under the supervision of Sarutahiko Coffee, a specialty coffee shop.
In addition, for “Kaoru Black” and “Jukuren Blend”, bottled cans,which are gaining demand, are adopted, and we strengthened productlineups meeting customer needs at convenience stores and vending
machines.

Coca-Cola

European“Kaoru Black”
290ml bottled canEuropean“Jukuren Blend”
270ml bottled can

Coca-Cola Zero

“Coca-Cola” has been appreciated by people around the world over 120 years
across national borders and cultural framework, and is currently sold in more than
200 countries.
In 2014, we strengthened sales by making the most of the ofﬁcial sponsor of theFIFA World Cup being The Coca-Cola Company, such as running campaigns. In addition, in a bid to tighten relationships between the Coca-Cola brand and respective
customers, we launched “name bottles” with more than 250 types of ﬁrst and lastnames printed on a label, while striving to make our brands more active by carryingout an event where an original “name bottle” is made.

Sugarless tea

Name bottles

Ayataka
We released the “Ayataka Maroyaka Jitate” based on the Ayataka brand, which
is characterized by an authentic green tea taste with turbidity like taste made using
a teapot. This tea provides mild sweetness and clear aftertastes and responds tomeeting the extensive preference of customers. Through these efforts, we acquired
customers and increased drinking opportunities at home.

“Ayataka Maroyaka Jitate”
525ml PET bottle

Karada Sukoyaka Cha W
The “Karada Sukoyaka Cha W” is a food for speciﬁed health use (FOSHU) which
has two functions of 1) blocking the absorption of fat and 2) making the absorptionof glucose moderate through functions of the plant-based dietary ﬁber / indigestible
dextrin. Since the launch in April 2014, it gains recognition through TV commercials and sampling events, and we have thoroughly been appealing its productcharacteristics toward a wide range of customers. Moreover, in October 2014, we
strengthened sales throughout the year, such as launching humidiﬁed products. As
a result, the “Karada Sukoyaka Cha W” sold well and its sales volume came to 1,350
thousand cases in our areas in 2014.

Coca-Cola West10

Annual Review 2014

“Karada Sukoyaka Cha W”
350ml PET bottle

Sales Activities
Packaging Strategies
Coca-Cola West has developed various packaging (both in terms of volume and container) for each product it offers. We provide
products that meet consumer needs by developing the optimal packaging for each category of customer and sales venue.
Sales Volume by Packaging(Unit: 1,000 cases)

PET

2013

2014

■ Small-sized (less than 1,000 mll)

58,49960,030+2.6%■ Medium-sized (less than 1,500 ml)

1,801

1,697

(5.8)%■ Large-sized (1,500 ml or more)

43,65945,262+3.7%

SubtotalComposition of Sales Volume in 2014

Percentage change

103,959

106,989

+2.9%

■ Can

56,19755,380(1.5)%■ Other product packages

15,534

13,900(10.5)%■ Syrup, Powder

41,66940,406(3.0)%

Total

217,359

216,675(0.3)%

Syrup, Powder
18.6%
Small-sized
PET bottle
27.7%
Other productpackages
6.4%

Medium-sized
PET bottle
0.8%
Large-sized
PET bottle
20.9%

Can
25.6%

Main Packaging Formats
Small-sized PET bottle

Medium-sized PET bottle

Large-sized PET bottle(Less than 1,000ml)(Less than 1,500ml)(More than 1,500ml)

Can

Syrup, Powder“Peko Raku Bottle”
In November 2014, the “Peko Raku Bottle”, which is pourable andcrushable than existing 2LPET bottles, has been released. The “PekoRaku Bottle” is new packaging with additional value that the weight is 6g
lighter and the size of the crushed container after drinking is about half incomparison to existing 2LPET bottles. For the purpose of sales increase,
we made efforts to emphasize its characteristics and to differentiate fromcompetitive products at supermarkets.
In 2014, the “Peko Raku Bottle” was adopted to NST including“Sokenbicha” and “Ayataka” as well as “Morinomizudayori”. In addition,“Aquarius” adopting the “Peko Raku Bottle” was released in March2015. We have been expanding 2LPET bottle product lineups.

Coca-Cola West11

Annual Review 2014

Initiatives in SCM
For the purpose of establishing the optimal SCM system in our business area, we have been implementing various activities in procurement, production and logistics.
The Coca-Cola West Group provides fresh and high-quality products to consumers and makes efforts to reduce production costs as well as distribution costs.
In production, we continuously make investments in production lines to provide products which meet consumer needs and to improve productivity. Furthermore, in
logistics, we strive to establish an optimal distribution network to reduce product inventory as well as distribution costs.

Our group’s 8 plants
Plant

Line of Products

Packaging

Sparkling beverages, Coffee beverages, Tea beverages,
Sports drinks, Fruit juice

PET

Kiyama Sparkling beverages, Sports drinks

Can

Sparkling beverages

Tank*

Sparkling beverages, Fruit juice

BottleSparkling beverages

PET

Tosu Coffee beverages

As of December 31, 2014

Plant
Line of Products
Daisen Mineral water

Packaging
PET

Daais
D
aaiisensen Plan
Plaantntt

Can

Coffee beverages

Roasting** Products for in-cup vending machines and dispensers

KKyyotoKyoyotootoo Plant
Plaant
antt

AAka
ka
kas
ashi
as
h PPla
laant
ant
nt

HoongoH
onngo
go Plan
Plant
Plant
ant
nt

Kiya
K
Kiy
Ki
iya
yama
ya
yam
ama
ma PlanPPlant
lant
ant
nt
Tos
To
Tosu
ossu Plant
ant
ant
nt

Plant

Kum
K
Kuma
umamo
u amotmoto
oto
to PPllaantanttLine of Products

PET

Sparkling beverages, Coffee beverages, Tea beverages

Can

Plant

EEbinoEbbino Pla
Plant
ant
nt
Plant
Kumamoto

EbinoLine of Products
Sparkling beverages, Fruit juice, Lactic drink
Coffee beverage

Packaging

Sparkling beverages, Coffee beverages, Tea beverages,
Hongo Sports drinks, Fruit juice

Packaging

PET

Sparkling beverages, Coffee beverages,
Tea beverages

Can

Packaging
PET

Sparkling beverages, Coffee beverages, Tea beverages,

PET

Can

Kyoto Sports drinks, Fruit juice

Roasting*

Sparkling beverages, Coffee beverages, Tea beverages,
Sports drinks, Mineral waterLine of Products
Sparkling beverages, Coffee beverages, Sports drinks,
Fruit juice

Sparkling beverages, Tea beverages, Sports drinks,
Fruit juice, Lactic drink

Tank*,BIB*

Coffee beverages

Roasting*

Sparkling beverages, Coffee beverages, Tea beverages,
AkashiSports drinks, Fruit juice* Products for in-cup vending machines and dispensers* Products for in-cup vending machines and dispensers

NEW

Technological Innovation for
Introduction of New Packaging

In 2014, we introduced new packaging into canned coffee and large-sized PET bottle products
by technological innovation in production lines, which has realized the reduction of environmental
burdens as well as materials costs. As for canned coffee, materials of cans were changed from steel toaluminum to reduce the amount and costs of materials used. As for large-sized PET bottle products, theamount of materials used was reduced by 6g in comparison to existing bottles to reduce the materials costs(“Peko Raku Bottle”: Refer to P11). These new packaging, which became lighter than existing packaging,
contributes to the reduction of CO2 emissions from transport as well as the reduction of distribution costs.
We will provide improved additional value to consumers and secure competitive advantage in supply chain
through active introduction of advanced technology.

Coca-Cola West12

Annual Review 2014

35.4g

29.0g

PET

HEALTHCARE & SKINCARE BUSINESSSales Activities
The Healthcare & Skincare Business is conducted by our wholly owned subsidiary Q’sai Co., Ltd. and its four subsidiaries. The Q’sai
Group works on a uniﬁed basis to provide consumers with high-quality and safe products and services.

THE Q’SAI GROUP ORGANIZATION

We study raw materials for productdevelopment and confirm the effects
and safety. In addition, joint researchis aggressively implemented withexternal institutions including
universities. With the aim of creatingproducts for consumers to use safely
for a long time, we develop products
from a consumer perspective.

Production

Sales / Services

We are producing healthcare products, ourcore products, at our plant in Fukuoka and safeand high-quality products have been produced
under a thorough hygiene management and strict
checking system. Looking at Kale Powder, one ofour mainstay products, the process from thegrowth of raw materials to commercialization iscarried out within our group.

Healthcare and skincare products aredelivered mainly through home shopping.
In addition to delivering the attractivenessof products through infomercials, paper
advertising and internet, we receive ordersof products and provide guidance about
products at our call centers.

Consumers

Q’sai Co., Ltd.

Planning /Research and Development

NIPPON SUPPLEMENT, INC.
Q’SAI Farm
Shimane Co., Ltd.

Q’SAI Analysis andResearch Center
Co., Ltd.

Cultivation of kaleand production ofKale Powder

Analysis of foods
focused on residual
pesticides analysis

Sale of healthcare products, mainly Foodfor Specified Health Use (FOSHU)Q’SAI USA, INC.
Sale of healthcare products in the
United States

CHANNEL STRATEGIES
Products are delivered through home shopping and retail stores. In 2014, we focused on home shopping channels, which make up
approximately 90 percent of our sales, and took actions for an increase in sales.

HOME SHOPPINGWith regard to home shopping channels, we conduct advertising in programs such as
infomercials and receive orders and provide guidance at our call centers.
As for the year 2014, we made efforts to acquire new consumers and promote sales
with existing consumers by implementing effective and efﬁcient advertisement according toeach product while creating richer content for infomercials. In addition, at our call centers,
we proposed various products by identifying consumers’ characteristics and needs in order
to increase sales, and pharmacists and personnel with expertise responded to consumers’
inquiries and demands in order to increase their satisfaction.

Infomercials

Coca-Cola West13

Annual Review 2014

PRODUCT STRATEGIESWe have released various products, including the healthcare products “Kale Powder”, “Hyaluronan Collagen” and “Glucosamine Z”,
as well as the skincare product “Cola-rich”.

HEALTHCARE PRODUCTS● Glucosamine Z
Glucosamine is essential for cartilage in the interests of smooth bending and stretching. “Glucosamine Z” is made out of 100% N-acetylglucosamine, which is the same form
as that in our bodies, making the internal utilization rate about three times more than thatof glucosamine hydrochloride.
In 2014, with the aim of gaining share and increasing awareness in the active glucosamine market, we implemented aggressive sales promotion through TV commercials
to gain new consumers. Furthermore, we delivered information booklets about healthmaintenance together with products for the purpose of growing consumers’ health consciousness as well as continuous purchases. These efforts resulted in increase of sales of“Glucosamine Z” in 2014 over the prior year.

Glucosamine Z● Hyaluronan Collagen“Hyaluronan Collagen” enables the user to replenish hyaluronic acids, collagen andchondroitin, and it has the largest share of home shopping sales in the collagen healthfood product market*. This product is a favorite of many users daily, with its ease of use
by mixing it into beverages and into meals.
In 2014, we implemented effective and efﬁcient sales promotion including changing
the contents of infomercials. Furthermore, in preparation for the relaxation of regulations
for “nutrient functional labeling” on health food products effective in April 2015, we havebeen promoting measures with the aim of enhanced sales after 2015.
Hyaluronan Collagen*Source: Yano Research Institute Ltd. (As of October 2014)

SKINCARE PRODUCTS● Cola-rich Series“Cola-rich” is an all-in-one beauty gel cream, with all the functionsof a toner, lotion, serum and skin cream contained in one product.
In 2014, we strengthened sales by proposing related items, according to consumer needs, including “Cola-rich EX” with three times thecollagen compared to “Cola-rich” and “Cola-rich BB Cream” which isan all-in-one foundation. In October 2014, “Cola-rich EX Super Moist”,
which is added to “Cola-rich EX”, the independently-developed collagen with new functionality, was newly released. We strove to enrich
the product lineup of the “Cola-rich” series with the goal of enhanced
sales of the entire series.

New
product

Cola-rich EX

Coca-Cola West

14

Annual Review 2014

Cola-rich BB CreamCola-rich EX Super Moist

CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES
Initiatives through Our Business Activities as a Community-Oriented Company
Through vending machine business, which is a major sales channel in the Soft Drink Business, we are striving to develop local communities and contribute to the safety of local residents. We will continuously respond to social responsibilities called on a company.

Super Energy-Saving Peak Shift Vending Machine“Peak Shift Vending Machines” are super energy-saving vending machines and they adopt a
concept called peak shift that shifts the consumption of electricity used for cooling from the daytime
hours, when power demand peaks, to the nighttime hours when demand is relatively less. We havealso improved the insulation and airtightness of our vending machines compared to previous models. These machines enhance product cooling efﬁciency while reducing the consumption of electricity used for heating by increasing product heating efﬁciency during winter, thus allowing electricity
consumption to be reduced not only in summer but also throughout the year.
As of the end of December 2014, we installed about 30,000 Peak Shift Vending Machines andwe will install additional machines in 2015 as well.

Maximum

95 %Cuts daytime summer
electricity consumption
Cools all stored products at once
during the night, significantly
reducing daytime electricity
consumption.

Non-Freon
Natural refrigerant
Non-Freon that isleast affected by
global warming
is used.

Cools
Quickly

Motion Sensor
Equipped

Peak Shift Vending Machines

Cuts annual
electricity
consumption

Cooling performance
improved more than
before.

An energy-saving system thatlights when someone nears anddoes not light when
there is no one there.

Reduces electricity
consumption throughoutcothe year.

Cooling issuspended for

16

up to

hours

New LED
Lighting

Quiet Noise

with goods remaining cooled

LED lighting that gleams
between both ends
illumes goods.

When the cooling system
is off, “noises of erasing
characters quietly withan eraser” areonly heard.

During the daytime,standby electricity is used
only for operation.

Community-Support Vending Machines that support local
communities
We engage in activities that support local communities through our vending machines. When consumers purchase our products from these vending machines, a portion of the sales proceeds is used
to support social contribution activities, events, and sports organizations within the community. This
allows us to work together with our customers and consumers in supporting local communities. Asof the end of December 2014, about 5,700 of these vending machines were in service.

Vending Machine for Supporting Organ
Transplantation

Cosmos Network Supporting Vending
MachineDisaster-Response Vending Machines to provide relief during
emergencies
In the event that supply lines are severely disrupted by earthquakes or other disasters, Disaster-Response Vending Machines can be set to provide free soft drinks to residents in disaster-stricken areas by remote control from local administrative ofﬁces via telecommunications network. Thesemachines are also outﬁtted with digital displays that provide real-time information such as emergency evacuation sites and maps. As of December 31, 2014, we have installed a total of 2,100 Disaster-Response Vending Machines to contribute to the safety of local residents.

Coca-Cola West15

Annual Review 2014

Disaster-Response Vending MachineQuality Control Initiatives

In the Soft Drink Business, we strive to maintain thoroughgoing quality management in every aspect of our business until our products are in consumers’ hands in order to provide safe, secure, and high-quality products.
We have established a stringent quality control structure under the “KORE*1” management system, a system uniquely formulated by the Coca-Cola
System as a global standard. Starting with obtaining international standard certiﬁcation (ISO9001*2, FSSC22000*3, OHSAS18001*4, ISO14001*5) at our
manufacturing plants, we carry out quality control in warehouses, in logistics facilities, at outlet stores, and other sales channels so that we can ensure thehigh quality of our products at the point of consumption.
*1 KORE:*2 ISO9001:*3 FSSC22000 :*4 OHSAS18001 :*5 ISO14001:

Coca-Cola Operating Requirements
Quality Management System
Food Safety Management System
Occupational Health and Safety Assessment Series
Environmental Management Systems

Logistics

Procurement

Manufacturing(Storage / Transportation)

Sales

We use raw
materials based onstrict quality
standards.

We produce reliable
beverages for consumers
to enjoy drinking.

We punctually and promptly
deliver safe, secure andhigh-quality products.

We work day in day out tooffer fresh and tasty
beverages.

Consumers’ opinions
and inquiries lead to ourimprovement activities.

SupermarketPlantsWarehouses

Coca-Cola West

16

Stores, Vending machines

Consumers

Hygiene Control

Maintenance

We practice reliable
quality control to"ensure food safety."

We treat breakdowns ofvending machines as ahighest priority.

Annual Review 2014

Global Environmental Protection Activities
Initiative for Energy Usage Reduction – Our Global Warming Initiative –In the Soft Drink Business, we are striving to reduce our energy usage and greenhouse gas emissions (CO2 ) which cause global
warming, because we want to leave a habitable global environment for future generations. Greenhouse gas emissions in 2014
were reduced by 5% from the previous year as efforts on active vending machines were made successfully.
[ Greenhouse Gas Emissions (CO2) ]■ Vending Machines■ Others

5% below(Unit: 1,000t-CO2)

2013 levels

600
472

444

420

241

219

203

231

225

217

2012

2013

2014

400

200

0

Transition of number of Environmentally
Friendly Vending Machines in Service

Vending Machine Initiatives
We are promoting the introduction of more
non-Freon Environmentally Friendly Vending
Machines that have a low global-warming effect.
Especially, we are promoting the installation ofheat pump type vending machines, which realize
the effecting heating of products, to reduce power consumption.
In addition, we are striving to further improve
environmental performance by introducing vend-

ing machines equipped with solar panels, thosewith LED lighting, and Peak Shift Vending Machines that reduce the consumption of electricity
during the daytime by 95%. As of the end of
December 2014, we had placed about 120,000
Environmentally Friendly Vending Machines.

122,743

120,000
90,000101,309
79,76560,00030,000
0
2012

2013

2014

[ Number of Eco-Cars ]Other Initiatives
In the manufacturing processes used at
our plants, we are shifting to the use of natural gas, which offers lower CO2 emissions
than heavy oil, and introducing co-generation systems.*
Furthermore, in visiting our customers(sales activities, operation of vending machines, etc.), we have adopted eco-cars thatare friendlier to the environment, including
hybrid and natural gas and electric vehicles.

(Unit: Number of machine)

150,000■ Hybrid cars
■ Natural gas cars
■ Electric cars
(Unit: Number of vehicle)

700

722
624

600
500

Natural gas cars

484
648

400
300
200

*Co-generation system:

100

A system that generates power using a gas engine, uses
the waste heat created in the power generation process
to create hot water or steam, and then simultaneously
supplies both electricity and heat.

36

38

0
Electric cars

Coca-Cola West17

Annual Review 2014

2012

2013

2014

Water Resource Protection Activities
In the Soft Drink Business, to fulﬁll our social responsibility as a company that uses water as an irreplaceable key ingredient inour products, we are engaged in efforts to reduce our water use, recycle water, and protect local water resources.

Reduction of Water Consumption

Water Recycling

Local Water Resource Protection

We strive to make effective use of water in our
manufacturing processes. Our water use in 2014 wasdown 10% from the previous year on unit consumption* to 4.4 L/L.
*Unit consumption:

We carefully collect the water used during the manufacturing process and recycle it by using it for rinsing
and cooling purposes. In addition, we control thequality of wastewater we release into the river system,
ensuring that it meets company standards that areeven more stringent than what is required by law, andthus strive to reduce environmental burdens.

[ Water Usage and Unit Consumption ][ Plant Water Treatment Flow Chart ]water needed to create 1 liter of a product.

■Used amount●Unit consumption(per 1,000m3)

10,000As a company that strives to be a good partner for
local communities, we work with local residents onforest preservation activities in the forests that provide
water resources to our eight locations near our group’s
plants, thereby striving to protect these water-producing
regions.

(L/L)

6

5.6
4.9

9,000

4.4

8,242
8,000

Primarytreatment

6,786

5,000

1

0

Used forrinsing,cooling

3
2

0
2013

Used inproducts

5

6,000

2012

Secondarytreatment

4

7,486

7,000

Water intake

Rivers,seweragesystemWastewater
processing

Collection,
treatment,
reuse

2014

Recycling Activities
We encourage the effective use of resources by actively promoting the collection and recycling of empty containers after drinking and the recycling of waste produced as a result of our business activities.
At the Kita Kyushu Sawayaka Recycling Center,
which is run by our group, collected containers are
sorted into steel cans, aluminum cans, PET bottles,
and glass bottles for recycling. Even though our
vending machines are subject to waste processing,
they are disassembled and sorted into their component parts at the end of their life cycle so that they
can be recycled into steel materials and other items.
In addition to trying to reduce waste generated
by our manufacturing process, we also work tosort and recycle any waste produced. In 2014, werecycled more than 99% of all our waste products
following the prior year. Among them, 100% ofcoffee grounds/tea leaves and paper waste, whichconstitute a large portion of the waste products, havebeen reused.

[ Volume and Recycling Rate of Waste from Production Plants in 2014 ]Waste type

Volume Generated(Tons)

Recycling Rate

Coffee grounds

25,237100.00%Tea leaves

13,800100.00%Slurry6,085

99.62%

Waste plastic

998

99.69%

Recycled plastic fuel

Glass

259

99.70%

Recycled cullet

Metals287

98.64%

Recycled iron and steel, aluminum Cans

Waste oil19

97.92%

Recycled oil

Paper

1,138

100.00%Cardboard, Recycled paper

Other

159

84.47%

Base course material

47,98299.88%

Total

Coca-Cola West18

Annual Review 2014

Recycling Usage

Organic fertilizer

Local Community Contribution Activities, Local Environment Improvement Activities

With the consent of our shareholders, we use
surplus financial resources to fund activities that
contribute to local communities and promote the local
environment.
The activities are described below.

Resolutions of the general meeting of shareholders
Appropriation of funding retained earnings▶ Dividend▶ Reserve fund●●Reserves for contribution to local communities
Reserves for environmental protection of local communities▶ Retained earnings at beginning of year

LOCAL COMMUNITY CONTRIBUTION ACTIVITIESUnder our basic stance, “with local communities,” we encourage the healthy development of youth and also encourage closer
communication with communities. Our four major supporting activities are social welfare, sports activities, cultural and educational activities, and major regional events.

Donation of Educational Materials to
Special-Needs Schools

Donation of Unicycles to Elementary
Schools

We have been donating information equipment(computers and peripherals) to special-needs schools
since 1993 to help mentally and physically disabledstudents gain self-reliance.
In 2014, we donated teaching tools to 19 schools
in our sales territory.

With our wish for children as leaders of the next generation to grow healthily and to acquire cooperativenessand patience through sport activities, we have been
donating unicycles to public elementary schools since
1994. Unicycles are appreciated for their role in helping
develop the nervous system and improve reﬂexes andare included in the curriculum guidelines established by
the Ministry of Education, Culture, Sports, Science andTechnology as instructional tools that can be used forteaching children.
We donated 1,200 unicycles to 120 schools in oursales territory in 2014.

Classical Music Concerts

Family Musicals

Ichimura Shizenjuku-Kyushu

To create an affluent society (cultivation ofcontented people), we have been sponsoring
Coca-Cola West Classic Concerts for local residents
to enjoy live performances of the ﬁnest classical music since 1989.
In 2014, we held the Wiener Ring Ensemble in
Fukuoka, the Solisti Filarmonici Italiani Concert in
Osaka, the 8 Super Cello Ensemble in Hiroshima, andthe Teiko Maehashi & Kazumasa Matsumoto Concert
in Kumamoto. These masterful performances werea real treat for the local residents who had the pleasure of attending.

Held during summer break since 1994, Coca-Cola
West Family Musicals foster family ties by providing
a place where children and parents alike can enjoy
musical performances together.
In 2014, we arranged performances of Gegegeno-kitarou – Jumanokudono-inoriuta at four locationsin the prefectures of Fukuoka, Osaka, Hiroshima andKumamoto. We invited local residents to come out
and enjoy the performances with their families.

This school adopts the basic ideal of “Learn
strength to live from the earth”. Through farming
activities and communal life, the program offers children some opportunities to learn rules a person andmoral principles and promotes independence andcreativity, and thereby we support the managementof such activities.

Coca-Cola West19

Annual Review 2014

Rugby Clinic
Our company rugby team members provide rugby
instruction to a wide range of age groups, fromyoung children to university students, to help them
improve their rugby skills. By holding clinics not only
for students, but also for instructors, we are able toconvey the importance of basic skills and safe ways
to compete in the sport.
In 2014, rugby clinics were held in Fukuoka,
Osaka, Hiroshima, Kumamoto, and Oita Prefectures.

LOCAL ENVIRONMENT IMPROVEMENT ACTIVITIESWe recognize global environmental protection as a crucially important issue, and therefore, we contribute to the development of sustainable society with the slogan of “Sawayaka for people and the environment (ﬁne people and pleasant environment).”
2014

Sawayaka
Shizen-no-Mori
Area Map

Tottori
Sawayaka
Shizen-no-Mori

427ha

Kyoto
Sawayaka
Shizen-no-Mori

106ha（+422ha）（+94ha）

Hiroshima
Sawayaka
Shizen-no-Mori

Tosu

Conservation Activities at “Sawayaka Shizen-no-Mori”

Sawayaka
Shizen-no-Mori

Hyogo

Sawayaka
Shizen-no-Mori（+705ha）

Sawayaka
Shizen-no-Mori

11ha

17ha

We have designated the forests that provide water resources to eight locations
near our group’s plants as Sawayaka Shizen-no-Mori and we work with local municipalities in each area to conduct forest preservation activities that help protect
those water resources.
In 2014, as many as 400 community residents, including our employees andtheir family members, participated in activities at the Sawayaka Shizen-no-Mori inthe prefectures of Shiga, Kyoto, Hyogo, Tottori, Hiroshima, Saga, Kumamoto, andMiyazaki. Through pruning and trimming activities, we worked to protect the forestand strove to promote environmental education among children. In addition, we
expanded the areas of the Sawayaka Shizenno-Mori in the prefectures of Kyoto,
Tottori, Hiroshima and Miyazaki for enhancing our efforts.

Shiga

713ha

10ha

Aso
Sawayaka
Shizen-no-Mori

11ha

Ebino
Sawayaka
Shizen-no-Mori

245ha（+203ha）

Environmental Education Support

Local Community Cleanup Activities

As a company that uses cherished water, we implement environmental education
support to deepen the understanding of children about water that is fostered by forests and the global environment.
In 2014, we held a workshop for around 60 local elementary school children at
the Hongo Plant in Hiroshima Prefecture and at Hiroshima Sawayaka Shizenno-Morithat provides water resources to the plant. At the workshop, children saw the manufacturing process where water is turned into products, and planted nursery trees ofJapanese cypress (Hinoki).

Our group is carrying out cleanup activities for roads and public places aroundour ofﬁces on a monthly basis. In addition, as a venue for communications withresidents in the community, our employees actively participate in cleanup activities
sponsored by the local municipalities of the areas where our ofﬁces are located.
In 2014, about 700 participants, including employees and their family members,
joined cleanup activities, contributing to the beautiﬁcation of those communities at
14 locations in our business area.

Coca-Cola West20

Annual Review 2014

FINANCIAL INFORMATIONBusiness Results for Fiscal 2014
Operating Results

Financial Position■ Net Revenues

Our equity ratio for the current period was 75.2%, indicating that the company
remains in sound ﬁnancial standing.

Net revenues decreased ¥7,304 million to 424,406 million (a 1.7% YOY decrease). By business, in the Soft Drink Business, despite an increase in net revenues on the back of making Minami Kyushu Coca-Cola Bottling Co., Ltd., a wholly
owned subsidiary, as of April 1, 2013 through share exchange, net revenues decreased ¥4,111 million from the previous year to ¥390,620 million (a 1.0% YOY
decrease) due mainly to a decline in sales volume reﬂecting unseasonable weather in summer and other factors, including a long spell of rain in western Japanand a fall etc. in unit sales prices caused by ﬁercer competition. In the Healthcare& Skincare Business, net revenues decreased ¥3,192 million from the previous
year to ¥33,786 million (an 8.6% YOY decrease) due to decreased sales.

■ Assets and Liabilities

Net assets as of the end of the current period decreased ¥37,157 million fromthe end of the previous year to ¥337,260 million (a 9.9% decrease from the end of
the previous period). This is mainly attributable to 30,000 million yen redemption ofbonds. Liabilities at the end of the current period decreased ¥33,371 million fromthe end of the previous period to ¥83,109 million (a 28.6% decrease from the endof the previous period). This is primarily due to the redemption of bonds.
■ Net Assets■ Operating Income / Recurring Income

Net assets as of the end of the current period decreased ¥3,785 million fromthe end of the previous year to ¥254,150 million (a 1.5% decrease from the end of
the previous period).This is mainly attributable to a decrease in retained earnings
resulting from early application of accounting standards for retirement beneﬁts, etc.

Operating income decreased ¥4,919 million from the previous year to ¥11,008
million (a 30.9% YOY decrease). By business, in the Soft Drink Business, operating income decreased ¥2,281 million from the previous year to ¥8,102 million (a22.0% YOY decrease) due to the above-mentioned decrease in net revenues andan increase in SG&A expenses, etc. In the Healthcare & Skincare Business, operating income decreased ¥2,638 million from the previous year to ¥2,905 million (a47.6% YOY decrease) due to the above-mentioned decrease in net revenues, etc.
Recurring income decrease ¥5,997 million from the previous year to ¥10,609
million (a 36.1% YOY decrease) was due mainly to investment return that arose
under the equity method associated with the acquisition of treasury stocks by
Minami Kyushu Coca-Cola Bottling Co., Ltd. in the previous year, as well as decreased operating income.

■ Consolidated Cash FlowsNet Cash provided by Operating Activities
Net cash provided by operating activities was ¥28,628 million (¥40,082 million
in the previous year period). Net cash provided by operating activities for the current year decreased ¥11,454 million from the previous year. This is mainly attributable to a decrease in changes of accounts receivable and changes of inventories.
Net Cash Provided by/Used in Investing Activities
Net cash provided by/used in investing activities was negative ¥9,590 million(negative ¥16,493 million in the previous year period). Net cash provided by/used
in investing activities for the current period was positive ¥6,903 million from theprevious year. This is mainly attributable to an increase in proceeds from refund oftime deposits of ¥7,197 million.

■ Net Income

In addition to decreased recurring income, we incurred gains on negative
goodwill associated with the above-mentioned new consolidation in the previous
year and other factors. Because of this, net income decreased ¥9,142 million
from a year earlier to ¥4,482 million (a 67.1% YOY decrease).

Net Cash Provided by/Used in Financing Activities
Net cash provided by/used in ﬁnancing activities was negative ¥37,498 million(negative ¥8,286 million in the previous year period). Net cash provided/used byﬁnancing activities for the current period decreased ¥29.212 million from the previous period. This is mainly attributable to redemption of bonds of ¥30,000 million.

(Unit: Millions of yen)
500,000(Unit: Millions of yen)

(Unit: Millions of yen)

20,00014,000431,711 424,406

400,000

399,717386,637
375,764

16,46915,00013,62512,00015,927
13,463

10,00012,003300,000

11,008

8,000

7,582

6,997

10,000

6,031

6,000

200,000

4,482

4,000

5,000
100,000

2,000
0

0
2010

2011

2012

2013

2014

0
2010

Coca-Cola West

2011

21

2012

2013

2014

Annual Review 2014

2010

2011

2012

2013

2014

Business Results by Business Segment
Soft Drink BusinessOn the sales side, in each of our sales channels, we focused our efforts on strengthening product line ups according to purchasing and drinking opportunities ofconsumers in speciﬁc retail locations while striving to enhance the quality of sales activities and expand the market share and earnings by thoroughly carrying out
sales activities in the market through the use of IT tools supporting sales activities and the provision of services that are most suitable for each of our customers.
As for product strategy, we focused on coffee beverages, sparkling beverages and sugarless teas and launched new products with the aim of deﬁnitely capturing
the needs of consumers and increasing sales. As channel strategy, we established categories of customers and areas (prefectures) that are focused on in respective
sales channels and worked on drawing up and implementing more detailed strategies and measures while keeping in mind the competitive environment for each category of customers and each area.
Moreover, based on our strategic partnership with The Coca-Cola Company and Coca-Cola (Japan) Co., Ltd., we strengthened our joint marketing efforts and developed various initiatives tied to the continued growth of the Coca-Cola business.
In the area of SCM (Supply Chain Management), we put in place a ﬂexible supply system to respond to diversifying needs of consumers while pursuing efforts forpromoting internal production of PET bottles and reducing the use of materials in a bid to trim production costs.
Despite these efforts, our net revenues in this business for the period ended December 2014 were ¥390,620 million (a 1.0% YOY decrease) with operating incomeof ¥8,102 million (a 22.0% YOY decrease).

Healthcare & Skincare Business
The Healthcare & Skincare Business is conducted by Q’sai Co., Ltd., our subsidiary, and its four subsidiaries.
Looking at product strategy, to capture the needs of consumers, we rolled out products in the various ﬁelds, including healthcare products Kale Powder, Hyaluronan
Collagen, Glucosamine Z, and Peptide Ace (food for speciﬁed health uses) as well as the skincare product Cola-rich. As channel strategy, in home shopping sales, amajor sales channel, we were enhancing its programs while efﬁciently and effectively allocating advertisement expenses depending on products, together with optimal
combination of advertising media. Backed by these measures, we acquired new consumers and prompted existing consumers to continue purchasing our products. In
addition, we took measures for enforcement of a “new labeling system for food functionality” regarding the package labeling of food, including health food.
Despite these efforts, our net revenues in this business for the period ended December 2014 were ¥33,786 million (an 8.6% YOY decrease) with operating incomeof ¥2,905 million (a 47.6% YOY decrease).
(Unit: Millions of yen)
2013

Soft Drink BusinessNet revenues
Segment income*

1

2014

Healthcare & Skincare
Business

Total

Soft Drink Business

Healthcare & Skincare
Business

Total¥ 394,731¥ 36,979¥ 431,711¥ 390,620¥ 33,786¥ 424,406¥ 10,383¥ 5,544¥ 15,927¥ 8,102¥ 2,905¥ 11,008(Unit: Thousands of U.S. dollars)*2

Soft Drink BusinessNet revenues
Segment income*1

2013

2014

Healthcare & Skincare
Business

Healthcare & Skincare
Business

Total

Soft Drink BusinessTotal$ 3,293,275$ 308,520$ 3,601,795$ 3,258,969$ 281,882$ 3,540,852$ 86,629$ 46,256$ 132,885$ 67,597$ 24,243$ 91,840*1 Segment income concurs with operating income in the consolidated statements of income.
*2 Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 119.86 yen against the U.S. dollar (as of December 31, 2014) is used for conversion.

Net Revenues Composition Ratio for 2014

Operating Income Composition Ratio for 2014

■ Soft Drink Business■ Healthcare & Skincare Business■ Soft Drink Business■ Healthcare & Skincare Business

8.0%
26.4%

73.6%

92.0%

Coca-Cola West22

Annual Review 2014

Consolidated Balance Sheets(As of December 31)(Unit: Millions of yen)

(Unit: Thousands of U.S. dollars)*

2012

2013

2014

2014

Cash and Deposits¥22,157¥45,632¥41,996$350,377

Trade Notes and Accounts Receivable

23,472

26,876

27,797

231,917

Marketable Securities

30,702

25,132100

834

Merchandise and Finished Goods

24,226

26,62125,659214,080

472

566

547

4,569

Raw Materials and Supplies

1,662

2,071

2,166

18,078Deferred Tax Assets (Current Portion)

3,885

4,933

3,299

27,529Other

14,245

14,696

14,798

123,463

(414)

(352)

(316)

(2,636)

120,411

146,178

116,050

968,21432,25935,82633,132

276,429ASSETS
Current Assets:

Work in Process

Allowance for Doubtful Accounts

Total Current Assets
Fixed Assets:
Property, Plant and Equipment:
Buildings and Structures, net
Machinery, Equipment, Vehicles, net

18,487

24,81823,252

193,997

Sales Equipment, net

20,72725,39027,113

226,211Land

52,20859,90859,155493,540

Construction in Progress

2,245

14

11

99

Other, net

1,826

1,654

1,457

12,158

127,754

147,613

144,124

1,202,437

Goodwill

44,72342,18939,539329,877

Other

5,190

7,118

8,160

68,08449,91449,307

47,699397,961

Investment Securities

25,73817,306

19,162

159,873

Deferred Tax Assets

2,206

1,635

1,708

14,252

Advanced Payments for Retirement Expenses

4,729

4,479

−

−

Other

7,070

8,315

8,914

74,371

Allowance for Doubtful Accounts

(476)

(418)

(398)

(3,326)39,26831,317

29,386245,171

Total Property, Plant and Equipment
Intangible Assets:

Total Intangible Assets
Investments and Other Assets:

Total Investments and Other Assets
Total Fixed Assets

216,937

228,239

221,210

1,845,571

Total Assets¥337,348¥374,418¥337,260$2,813,785*Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 119.86 yen against the U.S. dollar (as of December 31, 2014) is used for conversion.

Coca-Cola West23

Annual Review 2014

(Unit: Millions of yen)

(Unit: Thousands of U.S. dollars)*

2012

2013

2014

2014

Trade Notes and Accounts Payable¥14,502¥16,278¥17,750$148,095

Current Portion of Bonds Payable

LIABILITIESCurrent Assets:−

30,000−−Current Portion of Long-Term Loans Payable

2,517

2,517

2,517

21,007

Accrued Income Taxes

3,006

3,165

2,024

16,888Other Accounts Payable

14,63017,624

20,649172,276

173

203

260

2,173

6,156

12,098

8,173

68,19040,98881,88951,375

428,631

166,861

Provision for Sales Promotion Expenses
Other

Total Current Liabilities
Long-Term Liabilities:
Bonds Payable

50,00020,00020,000Long-Term Loans Payable

7,755

5,237

2,719

22,692

Deferred Tax Liabilities

2,624

3,655

1,270

10,603

Allowance for Employees' Retirement Beneﬁts

947

2,048

−

−

Liability for Retirement Beneﬁts

−

−

3,871

32,299Provision for Directors' Retirement Beneﬁts

130

149

149

1,245

3,845

3,501

3,722

31,057

Total Long-Term Liabilities

65,30334,592

31,734

264,759

Total Liabilities

106,292

116,481

83,109693,390

Common Stock

15,231

15,231

15,231

127,081

Capital Surplus

109,072

109,072

109,072

909,996

Retained Earnings

132,587

135,619

131,355

1,095,911

Other

NET ASSETS
Shareholders' Equity:

Treasury Stock

Total Shareholders' Equity(25,765)(4,577)(4,580)(38,218)

231,125

255,346

251,079

2,094,771

(449)

2,214

3,389

28,278

−

(1)

317

2,645

Other Accumulated Comprehensive Income:Net Unrealized Gain (Loss) on Other Marketable Securities
Deferred Gains or losses on hedges
Foreign Currency Translation Adjustments

−

−

16

133

Cumulative Adjustments for Retirement Beneﬁts−−(1,026)(8,562)

Total Other Accumulated Comprehensive Income

(449)

2,212

2,696

22,495

Minority Interests

380

377

374

3,128

Total Net Assets

231,056

257,936

254,150

2,120,394

Total Liabilities and Net Assets¥337,348¥374,418¥337,260$2,813,785*Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 119.86 yen against the U.S. dollar (as of December 31, 2014) is used for conversion.

Coca-Cola West24

Annual Review 2014

Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(January 1 to December 31)(Unit: Millions of yen)

Consolidated Statements of Income
Net Revenues
Cost of Goods Sold
Gross Proﬁt
Selling, General and Administrative Expenses
Operating Income
Non-Operating Income
Interest Income
Dividends
Equity in Earnings of Afﬁliates
Gain on Sales of Property, Plant and Equipment
Other Non-Operating Income

Non-Operating Expenses
Interest Expenses
Loss on Disposal of Property, Plant and Equipment
Other Non-Operating Expenses

Recurring Income
Extraordinary Income
Gain on Sales of Property, Plant and Equipment
Gain on Sales of Investment Securities
Gains on Negative Goodwill

Extraordinary Losses
Impairment Loss
Loss from Disaster
Loss on Disposal of Property, Plant and Equipment
Write-down of Investment Securities
Write-down of Golf Club Memberships
Loss on Disposal of Inventories
Goods Indication Response Expenses
Losses Due to Provision for Quality Problems
Business Integration-Related Expenses
Losses on Step Acquisitions
Structural Reform Costs
Restructuring Expenses
Loss on Liquidation of Afﬁliates

Income before Income Taxes, Minority Interests and Other Adjustments
Income Taxes
Income Tax Adjustments
Total Income Taxes
Income before Minority Interests
Minority Interests
Net Income(Unit: Thousands of U.S. dollars)*

2012

2013

2014

2014

¥386,637
195,842
190,795
177,331
13,463
1,492
85
271
631
2
501
1,110
626
303
181
13,845
64
−
64
−
1,723
183
39
−
317
10
−
−
1,173
−
−
−
−
−
12,186
3,895
2,218
6,113
6,072
41
¥6,031¥431,711
216,423
215,287
199,359
15,927
1,973
109
313
1,074
6
468
1,294
602
254
436
16,606
14,687248−
14,43812,563
1,008
−
634
−
−
−
−
−
1,025
5,567
4,327
−
−
18,730
3,990
1,070
5,060
13,67044¥13,625¥424,406
211,525
212,881
201,873
11,008
1,264
79
339
87
205
551
1,663
550
489
623
10,609
611
189
421
−
2,810
−
24
−
16
−
421
190
−
−
−
981
760
417
8,409
2,531
1,363
3,894
4,515
32
¥4,482$3,540,852
1,764,771
1,776,080
1,684,240
91,84010,551
667
2,831
732
1,715
4,604
13,880
4,596
4,080
5,203
88,512
5,102
1,582
3,519
−
23,451
−
200
−
139
−
3,517
1,586
−
−
−
8,185
6,341
3,479
70,162
21,12011,37232,49337,669270$37,398*Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 119.86 yen against the U.S. dollar (as of December 31, 2014) is used for conversion.
(Unit: Millions of yen)

Consolidated Statements of Comprehensive Income
Income before Minority Interests
Other Comprehensive Income
Net Unrealized Gain (Loss) on Other Marketable Securities
Foreign Currency Translation Adjustments
Adjustments for Retirement Beneﬁts
Share of Other Comprehensive Income of Associates Accounted for Using Equity Method
Total Other Comprehensive Income

Comprehensive Income(Breakdown)Comprehensive Income Attributable to Owners of the Parent Company
Comprehensive Income Attributable to Minority Interests

2012

2013

2014

2014

¥6,072¥13,670¥4,515$37,669

1,245
−
−
8
1,253
¥7,326

2,664
−
−
(1 )
2,662
¥16,332

1,174
16
893
332
2,416
¥6,931

9,801
133
7,454
2,771
20,160$ 57,830

7,284
41

16,287
44

6,899
32

57,559270*Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 119.86 yen against the U.S. dollar (as of December 31, 2014) is used for conversion.

Coca-Cola West

25

(Unit: Thousands of U.S. dollars)*

Annual Review 2014

Consolidated Statements of Changes in Shareholders’ Equity(January 1 to December 31)

Shareholders' Equity

Other Accumulated Comprehensive Income

CommonStockCapitalSurplusRetained
Earnings

Total
Treasury Stock Shareholders'EquityNet Unrealized
Gain (Loss) on
Other
Marketable
Securities

Balance as of January 1, 2014¥15,231¥109,072¥135,619¥ (4,577) ¥255,346¥2,214¥(1)ーー¥ 2,212¥377¥257,936

Cumulative Effect of Changes in
Accounting Policies

ーー(4,271)ー(4,271)ーーー(1,932)(1,932)

ー(6,204)

Balance as of January 1, 2014
Reflecting Changes in Accounting
Policies

15,231109,072

131,348(4,577)251,074

2,214

(1)

ー

(1,932)279

377

251,731

Distribution of Dividends

ーー(4,474)ー(4,474)

ー

ー

ー

ー

ー

ー

(4,474)Net Income

ー

ー

4,482

ー

4,482

ー

ー

ー

ー

ー

ー

4,482

Acquisition of Treasury Stock

ー

ー

ー

(3)

(3)

ー

ー

ー

ー

ー

ー

(3)

Cancellation of Treasury Stock

ー

ー

(0)

0

0

ー

ー

ー

ー

ー

ー

0

Net Changes in Items Other thanShareholders'Equity during the Fiscal Year

ー

ー

ー

ー

ー

1,174

318

16

906

2,416

(2)

2,413

Total Changes during the Fiscal Year

ー

ー

7

(2)

4

1,174

318

16

906

2,416

(2)

2,418

Balance as of December 31, 2014¥15,231¥109,072¥131,355¥(4,580)¥251,079¥3,389¥317¥16¥(1,026)¥2,696¥374¥254,150

Total
Treasury Stock Shareholders'EquityNet Unrealized
Gain (Loss) on
Other
Marketable
Securities

DeferredHedge Gain
(Loss)

Foreign
Currency
Translation
Adjustments$(38,194) $2,130,369$18,477

$(15)

ー

ー

$18,461(35,636)ーーー(16,126)(16,126)(38,194) 2,094,732

18,477(15)

ー(16,126)

2,334[ Unit : Millions of yen ]DeferredHedge Gain
(Loss)

Foreign
Currency
Translation
Adjustments

Cumulative
Total Other
Minority Interests Total Net Assets
Adjustments Accumulatedfor Retirement Comprehensive
IncomeBenefits

Changes during the Consolidated
Fiscal Year 2014

Shareholders' Equity[ Unit : Thousands of U.S. dollars ]*CommonStockCapitalSurplusRetained
Earnings

Balance as of January 1, 2014

$127,081$909,996 $1,131,485

Cumulative Effect of Changes in
Accounting PoliciesーBalance as of January 1, 2014
Reflecting Changes in Accounting
Policies

127,081ー(35,636)

909,996 1,095,849

Other Accumulated Comprehensive Incomeー

Cumulative
Total Other
Minority Interests Total Net Assets
Adjustments Accumulatedfor Retirement Comprehensive
IncomeBenefits$3,148 $2,151,980
ー(51,763)

3,148 2,100,216

Changes during the Consolidated
Fiscal Year 2014
Distribution of Dividendsーー(37,334)ー(37,334)

ー

ー

ー

ー

ー

ー

(37,334)Net Incomeーー

37,398ー

37,398

ー

ー

ー

ー

ー

ー

37,398Acquisition of Treasury Stock

ー

ー

ー

(31)

(31)

ー

ー

ー

ー

ー

ー

(31)

Cancellation of Treasury Stock

ー

ー

(2)

7

5

ー

ー

ー

ー

ー

ー

5

Net Changes in Items Other thanShareholders'Equity during the Fiscal Year

ー

ー

ー

ー

ー

9,801

2,661

133

7,564

20,160(20)

20,139Total Changes during the Fiscal Year

ー

ー

62

(24)

38

9,801

2,661

133

7,564

20,160(20)

20,178

Balance as of December 31, 2014

$127,081$(38,218) $2,094,771$28,278$2,645$133$(8,562)$22,495$909,996 $1,095,911*Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 119.86 yen against the U.S. dollar (as of December 31, 2014) is used for conversion.

Coca-Cola West26

Annual Review 2014

$3,128 $2,120,394

Consolidated Statements of Cash Flows(January 1 to December 31)(Unit:Millions of yen)

Cash Flows from Operating Activities:
Income before Income Taxes, Minority Interests and Other Adjustments
Depreciation and Amortization
Impairment Gains
Amortization of Goodwill
Increase (Decrease) in Provision for Directors' Retirement Beneﬁts
Increase (Decrease) in Liabilities for Retirement Beneﬁts
Increase (Decrease) in Net Deﬁned Beneﬁt Liability
Decrease (Increase) in Advance Payments for Retirement Expenses
Interest and Dividend Income
Interest Expenses
Equity in Losses (Earnings) of Afﬁliates
Loss (Gain) on Sales of Marketable and Investment Securities
Write-down of Marketable and Investment Securities
Loss (Gain) on Sales of Fixed Assets
Loss on Disposal of Fixed Assets
Gains on Negative Goodwill(Gains) Losses on Step Acquisitions
Loss on Liquidation of Afﬁliates
Decrease (Increase) in Accounts Receivable
Decrease (Increase) in Inventories
Decrease (Increase) in Other Assets
Increase (Decrease) in Accounts Payable
Increase (Decrease) in Other Liabilities
Other
Sub-totalInterest and Dividends Received
Interest Paid
Income Taxes Paid
Income Taxes Refunded
Net Cash provided by Operating Activities
Cash Flows from Investing Activities:
Acquisition of Marketable and Investment Securities
Proceeds from Sales of Marketable Securitas and Investment Securities
Acquisition of Fixed Assets
Proceeds from Sales of Fixed Assets
Acquisition of Shares of Subsidiaries
Expenses for Sale of Shares of Subsidiaries with Change in Scope of Consolidation
Proceeds from the Sale of Shares of Subsidiaries with Changes in Scope of Consolidation
Proceeds from Sales of Shares of Afﬁliates
Long-Term Loans
Proceeds from Collection of Long-Term Loans
Increase in Time Deposits
Proceeds from Refund of Time Deposits
Other
Net Cash Provided by (Used in) Investing Activities
Cash Flows from Financing Activities:
Expenses for Repayment of Long-Term Loans
Redemption of Bonds
Expenses for Acquisition of Treasury Stock
Proceeds from Sales of Treasury Stock
Dividends Paid
Dividends Paid to Minority Interests
Other
Net Cash Provided by (Used in) Financing Activities
Translation Differences for Cash and Cash Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Increase in Cash and Cash Equivalents Associated with New Consolidation
Cash and Cash Equivalents at End of Year

2013

2014

2014

¥12,186
20,643
183
2,643
13
(63)
−
1,098
(356)
626
(631)
(64)
317
6
246
−
−
−
1,764
(2,491)225(4,154)(1,746)366
30,811360(630)(4,235)17
26,324¥18,730
23,758
1,008
2,649
18
304
−
250
(423)
602
(1,074)
−
−
(247)
710
(14,438)
5,567
−
604
1,986
232
(693)
3,513
602
43,662433(607)(3,996)591
40,082¥8,40922,943−2,649
3−(1,726)
−
(419)
550
(87)
(421)
16
(370)
404
−
−
417
(1,032)
854
(97)
1,517
(1,260)37
32,389440(563)(3,812)
175
28,628$70,162
191,422−
22,10832−(14,403)−(3,499)4,596(732)(3,519)139(3,090)
3,371
−
−
3,479
(8,618)7,129(814)
12,660(10,516)316
270,226
3,671(4,705)(31,807)
1,464
238,848(26,319)
31,843(20,134)
512
−
−
553
−
(914)
595
(1,865)1,480
6(14,243)(25,887)
33,625(20,065)
755
(128)
−
−
6
(1,325)802(5,459)1,308(127)(16,493)(1,021)
6,958(21,702)
1,475
(301)
(74)
−
−
(1,110)1,012(3,305)8,305(25)(9,590)(8,525)58,055(181,064)
12,311(2,517)(620)−−(9,263)
8,445(27,580)
70,962(216)(80,014)(2,542)−(2)
0(4,098)(33)(472)(7,149)−4,930
34,564−¥39,495(2,517)−(5)
0(4,282)(35)(1,445)(8,286)−15,30239,495
5,477¥60,275(2,517)(30,000)(3)
0(4,474)(34)(467)(37,498)
16(18,444)
60,275−¥41,830(21,077)(250,292)(31)
5(37,334)(291)(3,903)(312,855)
133(153,887)
502,881−$348,994*Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 119.86 yen against the U.S. dollar (as of December 31, 2014) is used for conversion.

Coca-Cola West

27

(Unit:Thousands of U.S. dollars)*2012

Annual Review 2014

OTHER INFORMATION
Risk Information

Financial information and other data discussed in this annual review are subject to a variety of risks. Those risks, deemed most likely
to have a signiﬁcant impact on potential investment decisions, arepresented below. The Coca-Cola West Group is fully aware of the possibility of these risks and thus works to avoid them or effectively deal
with them should they arise.
Forward-looking statements herein reﬂect the judgment of management as of March 25, 2015.

(5) Impact of Economic Conditions
a. Trends in personal consumption
Sales of soft drinks are closely linked to trends in personal consumption. Any rapid decline in personal consumption caused by thesluggish Japanese economy or a consumption tax increase, or a fallin our product prices with the progress of deﬂation could potentiallyaffect the operating results of our group.
b. Fluctuations in asset value
The operating results and financial position of our group may beaffected by ﬂuctuations in the value of securities, land, goodwill, andpension assets in the deﬁned beneﬁt corporate pension program, etc.
that are held by our group. For example, securities, land, and pension
assets, etc. are affected by fluctuations in the market value in therespective markets. Goodwill is subject to impairment losses in somecases if no expected results are gained in the Healthcare & Skincare
Business.

(1) Business Agreements with The Coca-Cola Company of
the United States and Coca-Cola (Japan) Co., Ltd.
Coca-Cola West conducts business activities based on a bottler
agreement with The Coca-Cola Company and Coca-Cola (Japan) Co., Ltd.

(2) Quality Control
Beverages are the core product of the Coca-Cola West Group. The
group makes every effort to raise employee awareness regarding
quality and implements programs aimed at preventing incidents concerning quality in order to offer its consumers high-quality and reliable
beverages. Nevertheless, in the event of an incident related to productquality, the company’s brand image could be tarnished, irrespectiveof whether or not it was actually at fault. As such, an incident of thisnature could adversely affect the operating results of the group.

(6) Public Regulations
The group’s business relating to the manufacturing and marketingof beverages and food is subject to a number of regulations in Japan,
including the Food Sanitation Law and the Act Against Unjustifiable
Premiums and Misleading Representations. The group fully complies
with all of these regulations in its commitment to providing safe andreliable products. Accordingly, tougher regulations, for example, might
incur new compliance costs, which could potentially affect the operating results of the Coca-Cola West Group.

(3) The Soft Drink Industry
a. Impact of market ﬂuctuations
Sales of soft drinks, the group’s core products, are readily inﬂuenced by changes in consumers’ preferences. In a beverage marketof this kind, the group strives to continuously offer appealing products
and services. Nevertheless, failure to amply forecast market changes
could potentially affect its operating results.

(7) Management of Personal Information
The Coca-Cola West Group holds large volumes of personal information. In handling this information, it works on a uniﬁed basis to formulate
and adhere to related guidelines and implement ongoing training andeducational activities. However, an external leak of personal information
could lead to a deterioration of trust in the Coca-Cola West Group andpotentially impact its operating results.

b. Impact of weather-related factors
Weather conditions tend to have an effect on the sales of softdrinks. Cool summers or warm winters, for example, often have asigniﬁcant impact on consumer demand. Although the group makes
every effort to minimize the inﬂuence of weather-related factors on
sales, it offers no guarantee that it can completely eliminate the effectof such factors.

(8) Impact of Disasters
The Coca-Cola West Group has a system in place to minimize theeffect on its business operations in respect to events deemed to require the assumption of power outages, etc. Typhoons, earthquakes
and other natural disasters, however, could create conditions beyond
our expectations. Conditions of this magnitude could potentially impact the operating results and ﬁnancial position of the group.

(4) Healthcare & Skincare Related Industry
With growing health and cosmetic consciousness, the market of
health food and cosmetics related products, which our group companies are supplying for, is seeing successive new entries from otherindustries, this could lead to an expectation of more intensiﬁed competition and a potential impact on the operating results of our groupcompanies.

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Corporate Governance(As of March 24, 2015)(1) Fundamental Stance on Corporate GovernanceCoca-Cola West’s fundamental stance on corporate governance is to maximize “shareholders’ value” by improving management efﬁciency and transparency.
Coca-Cola West adopted the Audit & Supervisory Board system in accordance with its separation of decision-making and supervisory functions from theexecution of operations of the corporation. In March 1999, we restructured the Board of Directors and adopted the corporate executive ofﬁcer system. In
March 2006, the terms of directors were reduced from two years to one year. This effectively highlights the management responsibilities of directors foreach ﬁscal year and establishes an agile management structure capable of responding to a rapidly changing business environment.
In July 2006, we established the Management Advisory Committee, which advises the Board of Directors. This committee solicits advice from prominentindustrial and academic experts to achieve the objectives of improvement of management in both efﬁciency and transparency, which consequently enhance shareholders’ value. The committee is responsible for advising on important matters throughout the management of our group.

(2) Contents of the Articles of Incorporationa. Number of Directors
Coca-Cola West’s articles of incorporation stipulate that there shall be a maximum of 15 directors.
b. Requirements for Electing Directors
The company’s articles of incorporation stipulate that the election of directors shall be by a majority vote, in which at least one-third of the shareholders
with voting rights are present. Resolution for the election of directors shall not be made by cumulative voting.
c. Acquisition of Treasury Stocks
The company’s articles of incorporation stipulate that the company may repurchase its own shares on the market by a resolution of the Board of Directors in which shareholders’ approval is not necessary, pursuant to the provisions of Article 165, Paragraph 2 of the Company Law. The Board of Directors
has been authorized to repurchase company shares, allowing it to increase capital efﬁciency and to execute a ﬂexible policy of capital structure to copewith the changing business environment.
d. Determination of Interim Dividends
The company’s articles of incorporation stipulate that the company may, by a resolution of the Board of Directors in which shareholders’ approval is notnecessary, determine interim dividends, as prescribed by Article 454, Paragraph 5 of the Company Law. The Board of Directors has been authorized todetermine interim dividends so that proﬁts can ﬂexibly be returned to shareholders when deemed appropriate.
e. Special Resolutions of the General Meeting of Shareholders
The company’s articles of incorporation stipulate that special resolutions of a general meeting of shareholders, pursuant to Article 309, Paragraph 2 of
the Company Law, shall be adopted by an afﬁrmative vote of at least two-thirds, in which a minimum of one-third of voting shareholders is present. This is
to ease the general meetings of shareholders by enabling a quorum to pass special resolutions.
f. Business Execution and Management Supervision
We established the monitoring system with the members of the Board of Directors and the Audit & Supervisory Board to fully supervise the performanceof executive ofﬁcers’ business operations. The members of the Board of Directors and the Audit & Supervisory Board also participate in an important management meeting, consisting of executive ofﬁcers. When questions arise during the course of business execution, we consult with attorneys, CPAs andother specialists whose advice is used in determining the best way to proceed.

(3) Current Situation of the Internal Control System
At a meeting held on July 1, 2006, the Board of Directors resolved to strengthen internal control systems for the purpose of ensuring that Coca-Cola
West and its group companies conduct business appropriately. In addition, at the Board of Directors meetings held on February 7, 2008, and on February 7,
2012, certain aspects of these systems were reviewed as follows:a. Systems for ensuring that the duties of the members of the Board of Directors and employees comply with laws and the company’s articles
of incorporation
Internal rules concerning compliance systems and a code of conduct have been established to encourage ofﬁcers and all employees of Coca-Cola Westand its group companies to observe laws and ordinances as well as the company’s articles of incorporation, and to act in line with accepted social norms.
They were especially intended to establish a systematically ﬁrm policy against any involvement whatsoever with organized crime and other anti-social
forces. Further, a department responsible for CSR has been established at Coca-Cola West to unify compliance efforts across the group and conduct educational activities for ofﬁcers and employees to implement thorough compliance systems. The department in charge of internal audits shall examine thelevel of cooperation with the department in charge of CSR and the status of compliance across the group, and then regularly report compliance and otherimportant activities related to the internal control system to the Board of Directors and the Audit & Supervisory Board. In addition, an internal whistleblower
hotline will be set up as a means for ofﬁcers or employees to directly provide information on any conduct that may violate laws and ordinances.
b. Preservation of information material related to performance of directors’ duties and responsibilities
In accordance with established rules for preservation and document management, documents and electronic ﬁles containing information of the performance of directors’ duties are to be recorded and stored, thereby allowing members of the Board of Directors and the Audit & Supervisory Board to accesssuch documents and ﬁles at any given time.
c. Rules and other systems related to managing the risk of loss
The department in charge of CSR will examine risks across organizations and companies within the group, working with individual divisions that handle
unique risks associated with compliance, the environment, disasters, product quality, information security, etc., to create rules and guidelines, conduct
training, and produce and distribute manuals. The department will also promptly appoint employees to take charge of measures in order to deal with newrisks that arise.

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d. System for ensuring that directors perform their duties effectively
The Board of Directors determines the objectives of the group to be shared by corporate ofﬁcers and employees. Representative directors determine
effective methods, such as the delegation of authorization, to set speciﬁc targets to reach the goals of the group companies and departments. This divisionof tasks ultimately leads to the achievement of the group’s objectives.
e. System for ensuring proper business conduct as a corporate group consisting of the company and its subsidiaries
A department responsible for internal controls of the entire group was established at Coca-Cola West. The effective system of the group, which conducts
deliberations related to the internal controls at Coca-Cola West and every group company, facilitates information sharing and communicates instructions
and requests, has also been established.
f. Arrangements for employees whose assistance is requested by members of the Audit & Supervisory Board, and independence of theemployees from directors
Coca-Cola West arranges assistant employees to members of the Audit & Supervisory Board. The assistant employees assist with the performance ofmembers of the Audit & Supervisory Board’s duties under members’ directives and do not receive directives of directors or other executives.
g. System for corporate ofﬁcers and employees to report to the Audit & Supervisory Board
The members of the Board of Directors arrange a system for corporate ofﬁcers and employees at Coca-Cola West and its group companies to promptly
report to the Audit & Supervisory Board on legal matters, as well as on matters that have a signiﬁcant impact on the group, such as the performance ofinternal auditing, and the status and details of reports from the internal whistleblower hotline. The reporting method, including the employment of the taskof submitting and receiving reports and the time frame for reporting, will be determined through deliberations between members of the Board of Directors
and the Audit & Supervisory Board.
h. System for ensuring that other auditing by the Audit & Supervisory Board is conducted effectively
Regular meetings are organized for members of the Audit & Supervisory Board and a representative director to exchange views and opinions.

(4) Risk Management System
Coca-Cola West has established the Coca-Cola West Group Risk Management Committee. The objectives of this body are to prevent the various risks
faced by the company and to minimize damage in the event of a crisis by enabling a swift and appropriate response. The group ensures that its management principles comply with all laws and ordinances and follow the norms of society with integrity, thereby gaining the trust of all of its stakeholders andfulﬁlling the Corporate Philosophy. This is enshrined in its Code of Conduct, which is designed to encourage a compliance mindset among all group corporate ofﬁcers and employees.

(5) Internal Audits, Audit by Audit & Supervisory Board, and Financial Audit Systema. Organization of internal audits and audit by Audit & Supervisory Board, personnel and procedures, coordination among internal audit, audit
by Audit & Supervisory Board, and ﬁnancial/accounting audit
Coca-Cola West aims to comply with corporate rules and regulations, conduct appropriate corporate activities, implement operational management, protect the company’s assets and maintain soundness of its ﬁnancial situation. In order to achieve these goals, we established the Audit Ofﬁce (6 members) as
the Internal Audit Department, which directly reports to the president.
Members of the Audit & Supervisory Board attend meetings of the Board of Directors, management, and other important meetings, consisting of executive ofﬁcers. They also meet representative directors on a regular basis and examine the results of audits performed by the Audit Ofﬁce. Through the foregoing activities, the members of the Audit & Supervisory Board monitor the executive actions of members of the Board of Directors and executive ofﬁcers inaccordance with relevant laws, regulations, the company’s articles of incorporation, and internal auditing standards.
The Audit Ofﬁce conducts preliminary discussions with the Audit & Supervisory Board concerning its auditing policy and plans for each ﬁscal year.
The Audit & Supervisory Board and the Audit Ofﬁce also receive reports about the results of audits as needed. In addition, at the beginning of the ﬁscal
year, the company’s independent auditor provides the Audit & Supervisory Board with an explanation of its audit plans, and as needed, supplies information
and reports to the board during the interim audit or year-end audit.
b. Names of publicly certiﬁed accountants who have performed their services, name of audit corporation to which the accountants belong,and the number of auditing years relating to listed companies, and the composition of the assistants engaging in auditing services
Coca-Cola West has appointed KPMG AZSA & Co. as its independent auditor. The names of the ﬁrm’s certiﬁed public accountants (engagement andmanagement partners) that audit the company’s ﬁnancial statements are listed as follows.
Name of CPA Who Carried Out Duties

Experience

Designated Liability Partner

Takaki Okano

6 years

Designated Liability Partner

Junichi Adachi

7 years

Designated Liability Partner

Akihisa Sada

3 years

The auditing team has 10 CPAs and 9 other members.

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Corporate Governance(6) Outside Directors and Audit & Supervisory Board Members (Outside)
Presently, two of eleven members of Coca-Cola West’s Board of Directors and three of ﬁve members of its Audit & Supervisory Board are from outside of
the group.
a. Proﬁle, name and qualiﬁcation to be elected as an outside director or outside member of the Audit & Supervisory Board
Division

Relationship with our Company

Background to Appointment

Shiro Kondo

Shiro Kondo is Representative Director andChairman of Ricoh Company, Ltd., which isclassiﬁed as an “other related company”.

Shiro Kondo is Representative Director and Chairman of Ricoh Company, Ltd. and has been appointed toserve as an outside director so that Coca-Cola West can take advantage of his wealth of experience as acorporate manager of that ﬁrm.
Ricoh Company, Ltd. is a major shareholder in Coca-Cola West (whose stake amounts to 15.7% in termsof voting rights), but we are engaged in a different business from that of the Ricoh Group. There are sometransactions between our corporate groups, in the form of, for example, sales of soft drinks from our company
and system maintenance services provided by the Ricoh Group, but because the value of those transactions
is quite small, the independent business activities of Coca-Cola West would not be impeded in any way by the
Ricoh Group.
We have a close relationship with Ricoh in terms of both human and capital resources, but Mr. Kondo is
the only one of our 11 directors who is concurrently serving as a director of Ricoh, giving him less than amajority position on our Board of Directors. He makes decisions related to the company’s activities and management directions, and executes operations based on our company’s decisions.
Because of this, such company may not have a signiﬁcant impact on our company and we have concluded
that he is not a person who would wield undue inﬂuence over our management team.
Given the fact that his concurrent service as a director of Ricoh therefore does not inﬂuence the independence of Coca-Cola West with respect to Ricoh, and that there is no concern regarding a conﬂict of interest
with our general shareholders, we have appointed Mr. Kondo to the position of independent director.

Vikas Tiku

Vikas Tiku is CFO of Coca-Cola Asia PacificGroup of The Coca-Cola Company (TCCC),
and Representative Director, Executive Vice
President and CFO of Coca-Cola (Japan) Co.,
Ltd. (CCJC). Both companies entered into
an agreement with respect to production
and sales of Coca-Cola and other products
and usage of Coca-Cola trademarks, etc. In
addition, we purchase the original Coca-Colasyrup and other beverages from CCJC andalso receive rebates for sales promotion. Bothcompanies are major business partners of
our company and thus are special interest
companies for us.

Vikas Tiku is CFO of Coca-Cola Asia Paciﬁc Group of The Coca-Cola Company (TCCC), and Representative
Director, Executive Vice President and CFO of Coca-Cola (Japan) Co., Ltd. (CCJC) and has been appointed
to serve as an outside director so that Coca-Cola West can further strengthen its strategic partnerships withboth companies.
Although TCCC and CCJC are major business partners with the special interests outlined on the left, including conclusion of an agreement, etc., none of the 11 directors of Coca-Cola West concurrently serve as
directors of TCCC. Mr. Tiku is the only director who is concurrently serving as a director of CCJC, giving him
less than a majority position on our Board of Directors. He makes decisions related to the company’s activities and management directions, and executes operations under the responsibility of our company.
Consequently, we have concluded that there is no concern that our company might be unduly inﬂuenced
by both companies and Mr. Tiku is not a person who would wield undue inﬂuence over our management
team.
Given that his concurrent service as a director of CCJC therefore does not inﬂuence the independence ofCoca-Cola West, there is no concern regarding a conﬂict of interest with our general shareholders.

Zenji Miura is Representative Director, President, and Chief Executive Ofﬁcer of Ricoh
Company, Ltd., which is classiﬁed as an “otherrelated company”.

Zenji Miura has a long professional career in ﬁnance and accounting at Ricoh. He has been appointed as
an outside member of the Audit & Supervisory Board so that Coca-Cola West can put his wealth of experience to work in its auditing responsibilities.
Ricoh Company, Ltd. is a major shareholder in Coca-Cola West (a 15.7% stake in terms of voting rights),
but we are engaged in a different business from that of the Ricoh Group. There are some transactions between our corporate groups, in the form of, for example, sales of soft drinks from our company and system
maintenance services provided by the Ricoh Group, but because the value of those transactions is quite
small, the independent business activities of Coca-Cola West would not be impeded in any way by the Ricoh
Group. We have a close relationship with Ricoh in terms of both human and capital resources, and one ofthe directors of Ricoh is serving as our director. However, he is the only one of our 11 directors who is concurrently serving as a director of Ricoh, giving him less than a majority position on our Board of Directors,
and his appointment was made at our request. He makes decisions related to the company’s activities andmanagement directions, and executes operations based on our company’s decisions.
Consequently, we have concluded that there is no concern that our company might be unduly inﬂuenced
by Ricoh and that Mr. Miura is not a person who would wield undue inﬂuence over our management team.
Given that his concurrent service as a director of Ricoh therefore does not inﬂuence the independence ofCoca-Cola West with respect to Ricoh, and that there is no concern regarding a conﬂict of interest with ourgeneral shareholders, we have appointed Mr. Miura to the position of independent director.

Seiji Isoyama

Seiji Isoyama is Representative Director andExecutive Vice President of Nishi-Nippon City
Bank, Ltd.
Our company has a business relationship withthe bank, with which we have transactions
such as fund deposits.

Seiji Isoyama has a long professional career at The Nishi-Nippon City Bank, a major ﬁnancial institution. He
has been appointed as an outside member of the Audit & Supervisory Board so that Coca-Cola West can put his
wealth of experience to work in its auditing responsibilities.
Although our company has a business relationship outlined on the left with The Nishi-Nippon City Bank, noneof our 11 directors concurrently serve as directors of The Nishi-Nippon City Bank. Mr. Isoyama makes decisions
related to the company’s activities and management directions, and executes operations under the responsibilityof our company.
Therefore, the bank may not therefore have a signiﬁcant impact on our company, and we have concluded that
he is not a person who would wield undue inﬂuence over our management team and that there is no concern
regarding a conﬂict of interest with our general shareholders.

Audit &
Supervisory
Board
Tomoko Ogami
Member(Outside)

Tomoko Ogami is a lawyer belonging to Kunitake Sogo Law Ofﬁce.
Our company has no relationship with Kunitake Sogo Law Ofﬁce to be described.

Tomoko Ogami has many years of experience as an attorney and has been appointed to serve as an
outside member of the Audit & Supervisory Board so that she can apply that experience to the auditing ofCoca-Cola West.
Because Ms. Ogami does not have any particular vested interests in this company, we have concluded that she is
not a person who would wield undue inﬂuence over our management team and that there is no concern regarding a
conﬂict of interest with our general shareholders.

OutsideDirector

OutsideDirector

Audit &
Supervisory
Board
Member(Outside)

Audit &
Supervisory
Board
Member(Outside)

Name

Zenji Miura

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Annual Review 2014

b. Standards and guidelines regarding the independence of outside directors and outside members of the Audit & Supervisory Board
Standards and guidelines for establishing the independence of outside directors and outside members of the Audit & Supervisory Board have not been
explicitly stipulated, but optimal candidates are appointed by the Board of Directors based on an evaluation of their management positions at other ﬁrms,
their performance, and their expert knowledge.
c. Role and responsibilities of outside directors and outside members of the Audit & Supervisory Board for corporate governanceOutside members make up the majority of Audit & Supervisory Board members and establish a monitoring system for the directors’ execution of operation at the Board of Directors. Also, outside directors of external academic experts provide appropriate advice from a third party point of view.
d. Supervision, audit and internal audits conducted by outside directors or outside members of the Audit & Supervisory Board, coordination
between audit by the Audit & Supervisory Board and ﬁnancial/accounting audit, and relationship with Internal Control Division
Outside directors and outside members of the Audit & Supervisory Board receive reports regarding internal audits, ﬁnancial/accounting audits and internal control, and make comments at the Board of Directors’ meeting and the Audit & Supervisory Board’s meeting.
e. Summary of limitation of liability contract
Our company has set up a clause of limitation of liability of outside directors and outside members of the Audit & Supervisory Board in the articles ofincorporation in order for them to perform their expected roles sufﬁciently and to enable us to appoint high-quality outside directors.
Two outside directors and three outside members of the Audit & Supervisory Board entered into agreements with our company with regard to limited
liabilities due to negligence of duties, based on Article 427, Paragraph 1 of the Company Law. The limit of liabilities is the minimum amount determined bylaw.
f. Supporting staff for outside directors and outside members of the Audit & Supervisory Board
The staff of the Administration Department and the staff (assistant employees) of the Audit Ofﬁce support outside directors and outside members of the
Audit & Supervisory Board, respectively.

(7) Corporate Governance System and Reasons to Adopt the System Described
Our company adopted the following Corporate Governance System under the belief that it enables improvements in the efﬁciency and transparency ofmanagement.

GENERAL MEETING OF SHAREHOLDERS
Election/Dismissal

Election/Dismissal
ReportingManagement
Advisory Committee

Election/Dismissal
ReportingBoard of Directors
AdviceAppointment / Monitoring

Exchange Opinions
Representative Directors
ReportingGroup Company
Presidents’ Meeting

Coordination

Audit Office

Management Council

Auditing

Group Corporate Officer
Financial/
Accounting
Auditor

Auditing

Auditing

Department
for CSR

Complianceand Corporate
Risk Management

Group
Companies

DivisionsGroup Risk Management Committee

Reporting

Auditing
Coordination

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Annual Review 2014

Audit &
Supervisory
BoardCorporate Governance(8) Directors’ and Audit & Supervisory Board Members’ Remuneration (January 1 to December 31, 2014)
a. Aggregate amounts of remuneration according to roles of directors and members of the Audit & Supervisory Board, aggregate amounts according totype of remuneration, and number of directors and members of the Audit & Supervisory Board to be compensatedDirectors

Audit & Supervisory Board Members

Total of Remuneration (Millions of yen)
Number ofMembers
Remuneration and others based on
resolution of general shareholders'meeting

Base Remuneration
Other(Millions of yen) (Millions of yen)

Total

Total of Remuneration (Millions of yen)
Number ofMembers

Total of Remuneration (Millions of yen)

Base Remuneration
Other(Millions of yen) (Millions of yen)

Number ofMembers

Base Remuneration
Other(Millions of yen) (Millions of yen)

12

328

328

−

5

46

46

−

17

375

375

−

Internal

10

314

314

−

2

35

35

−

12

350

350

−

External

2

14

14

−

3

10

10

−

5

25

25

−

Note: The remuneration ﬁgures shown above include the remuneration paid to one director who retired as of December 31, 2014.

b. Signiﬁcant items in the salaries of the company’s internal ofﬁcers
None
c. Contents of (i) the determination of the amount of remuneration of directors and members of the Audit & Supervisory Board and (ii) the calculation
methods to determine the amount, and the decision-making method of determination for the foregoing items
The aggregate amounts of remuneration for directors and members of the Audit & Supervisory Board were resolved at the 51st General Shareholders’Meeting held on March 24, 2009 to be a maximum of ¥500 million annually (for outside directors, a maximum of ¥50 million annually) and a maximum¥100 million annually, respectively. The amount of remuneration for individual directors and individual members of the Audit & Supervisory Board is determined within the aggregate determined ranges as follows:(Directors)
The amount of remuneration for each director is determined by the representative directors who are authorized by the Board of Directors after consideration of deliberations at the Management Advisory Committee consisting of outside experienced experts.
The remuneration consists of (i) a ﬁxed amount portion and (ii) a variable portion which reﬂects the company’s business performance, which are able toreﬂect the responsibilities as directors and contribution to the company’s performance.
(Audit & Supervisory Board Members)
The amount of remuneration for each member of the Audit & Supervisory Board is determined in consultation with each respective member.

(9) Securities Investments (As of December 31, 2014)
a. Excluding trade purpose securities, number of companies invested in and amount of invested common stocks on balance sheet
Number of companies invested in: 145, amount of invested common stocks: ¥14,009 million
b. Excluding trade purpose securities and referring to companies listed on the stock market, names of companies invested in, stockholdingclassiﬁcation, number of shares and amount of invested common stocks on balance sheet and purpose of stockholding
Designated investment stocks
Number ofsharesAmounts shownon the Balance
SheetRoyal Holdings Co. Ltd.

962,440

1,614

Ricoh Leasing Company, Ltd..

502,000

1,563

The Nishi-Nippon City Bank, Ltd.

3,024,811

1,058

San-Ai Oil Co., Ltd.

1,308,125

1,056

Nishi-Nippon Railroad Co., Ltd.

2,000,000

986

231,000

981

Kyushu Leasing Service Co., Ltd.

2,000,000

750

Mitsubishi Heavy Industries, Ltd.

900,000

602

Mitsubishi UFJ Financial Group, Inc.

716,420

476

Fuji Co., Ltd.

195,366

427

Plenus Company Limited

118,261

254

Zenrin Co., Ltd.

183,414253

West Japan Railway Company

42,000239

AEON Kyushu Co., Ltd.

116,800

204

Nishikawa Rubber Co., Ltd.

99,445202

Name of Company Invested in

Izumi Co., Ltd.

Purpose of Stockholding

Name of Company Invested in(Millions of yen)
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.

Number ofsharesAmounts shownon the Balance
Sheet103,400

194

Fujio Food System Co., Ltd.

56,800166

Okuwa Co., Ltd.

172,560

159

Toyo Seikan Group Holdings, Ltd.

97,460147

Isetan Mitsukoshi Holdings Ltd.

87,015131

H2O Retailing Corporation

56,510108

Central Japan Railway Company

5,100

92

Kansai Super Market Ltd.

113,200

90

Sumitomo Mitsui Trust Holdings, Inc.

182,898

84

AEON Co., Ltd.

66,31980

The Coca-Cola Company

15,60078

Poplar. Co., Ltd.

121,442

67

Seven & i Holdings Co., Ltd.

12,70655

Marukyu Co. Ltd.

43,10449

Fukuoka Financial Group, Inc.

69,41243

Yondoshi Holdings, Inc.

Purpose of Stockholding(Millions of yen)

Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.
Maintain favorable relationship withthe company invested in.

c. Total of investment stocks for the purpose of pure investments on the balance sheet, as well as total of dividends received, gain/loss
on sales and valuation gain/loss on investment stocks for the purpose of pure investments in the current ﬁscal year
None

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Annual Review 2014

Top Management(As of April 1, 2015)

Directors

Representative Director &Chairman

Representative Director &President

Norio Sueyoshi

Tamio Yoshimatsu

Representative Director &Executive Vice President

Director &Group Executive Corporate Ofﬁcer

Director &Senior Corporate Ofﬁcer

Director &Senior Corporate Ofﬁcer

Nobuo Shibata

Hideharu Takemori

Toshio Fukami

Shigeki Okamoto

Responsible for Administration and
SCM Functions

Representative Director & President
Coca-Cola West
Equipment Service Co., Ltd.

General Manager,
CSR Division

General Manager,
Commercial Headquarters

Outside Director

Outside Director

Director &Senior Corporate Ofﬁcer

Director &Senior Corporate Ofﬁcer

Director &Senior Corporate Ofﬁcer

Yoshiki Fujiwara

Yasunori Koga

Shunichiro Hombo

General Manager,
Kyushu Sales Division #1,
Commercial Headquarters

General Manager,
Management Division
Department Manager,
External Affairs & Secretariat Ofﬁce

General Manager,
Kyushu Sales Division #2,
Commercial Headquarters

Shiro Kondo*

Vikas Tiku

Representative Director,
Chairman & Executive Ofﬁcer,
Ricoh Company, Ltd.

CFO, Coca-Cola Asia Paciﬁc Group,
The Coca-Cola Company
Representative Director,
Executive Vice President & CFO,
Coca-Cola (Japan) Co., Ltd.

Audit & Supervisory Board Members

Management Advisory Committee Members

Audit & Supervisory
Board Member

Hiroyoshi Miyaki

Standing

MemberIsao Kubota

Representative Director and Chairman,
The Nishi-Nippon City Bank, Ltd.

Audit & Supervisory
Board Member

Tadanori Taguchi

Standing

MemberTsuguo Nagao

Senior Adviser,
Nishi-Nippon Railroad, Co., Ltd.

Audit & Supervisory
Board Member (outside)

Zenji Miura*

Representative Director,
President & Chief Executive Ofﬁcer,
Ricoh Company, Ltd.

MemberKazuhiko Enomoto

Representative Director & Chairman,
Fukuoka Jisho Co., Ltd.

Audit & Supervisory Board
MemberSeiji Isoyama

Representative Director and Deputy President,
The Nishi-Nippon City Bank, Ltd.

MemberMasayoshi Nuki

Chairperson,
Kyushu Electric Power Co., Inc.

Audit & Supervisory
Board Member (outside)

Tomoko Ogami

Attorney,
Kunitake Synthesis Law Ofﬁce

MemberSusumu Ishihara

Senior Executive Adviser,
Kyushu Railway Company

MemberTakashi Matsuzaki

Attorney,
Tokunaga, Matsuzaki & Saito Law Ofﬁce* As for Director Shiro Kondo and Audit & Supervisory Board Member Zenji Miura, our company submitted notices to Tokyo Stock Exchange Inc. and Fukuoka Stock Exchange, with which our company
is listed, as “Independent Director.” The qualiﬁcation for “Independent Director” is determined by criteria and rules set by each security exchange company.

Coca-Cola West34

Annual Review 2014

Dividend Policy and Shareholder Reward Points System

Dividend
Coca-Cola West places the ultimate priority on the stable and continued payment of dividends surplus to shareholders andpays dividends semiannually, interim and year-end, after fully deliberating on the company’s business performance and retained earnings and the future business environment.
Trends of dividend per share(Unit:yen)
50

40
30.0

30
25.0

20 17.5

32.0

32.0

1999

2000

34.0

34.0

2001

2002

40.0

40.0

2004

2005

42.0

43.0

2006

2007

43.0

42.0

40.0

41.0

41.0

41.0

41.0

2010

2011

2012

2013

2014

36.0

27.0

20.0

10

0
1994

1995

1996

1997

1998

2003

2008

2009

Shareholder Reward Points System
We provide “Shareholder Reward Points” in late August of the year and late March of the following year to shareholders with
100 or more shares as of June 30 and December 31, respectively.
Shareholders can choose to exchange their Reward Points (one point=¥60) by referring to the shareholder beneﬁt site and thecatalog of goods on our website, with assorted Coca-Cola products or to use them as donations to our social contribution activities, etc., via the shareholder hospitality portal on the Coca-Cola West website or from product catalogs.
Awarding Criteria
Effective Date

JUNE 30

DECEMBER 31

Number of Shares Held

Details

100 to 500 shares

30 Reward Points

500 to 1,000 shares

40 Reward Points

1,000 to 5,000 shares

60 Reward Points

5,000 or more shares

120 Reward Points

Time of Award

Late August of the year

100 to 500 shares

30 Reward Points

500 to 1,000 shares

40 Reward Points

1,000 to 5,000 shares

60 Reward Points

5,000 or more shares

120 Reward Points

Late March of the following year

Options for Reward Points (examples)

Coca-Cola product selection

Scarf Towels with
Coca-Cola West logo

Leisure Sheets with
Coca-Cola West logo

(The details of products for reward points vary depending on the time of award)

Coca-Cola West35

Annual Review 2014

Donation to
Ichimura Shizenjuku-Kyushu

Stock Information(As of December 31, 2014)

Major Shareholders

Stock Code : 2579
Authorized Shares : 270,000 thousands

Number of Share
Owned(Thousands)

Shareholding Ratio(%)

Ricoh Company, Ltd. ....................................................................................................

17,075

15.6

The New Technology Development Foundation ..............................................

5,294

4.9

Satsuma Shuzo Co., Ltd. .............................................................................................

4,699

4.3

MCA Holdings Co., Ltd. ................................................................................................

4,407

4.0

Japan Trustee Services Bank, Ltd. (Trust Account) ......................................

4,211

3.9

Coca-Cola Holdings West Japan, Inc. ...................................................................

4,074

3.7

Mitsubishi Heavy Industries Food & Packaging Machinery Co., Ltd. ......

3,912

3.6

The Nishi-Nippon City Bank, Ltd. ............................................................................

2,203

2.0

Toyo Seikan Group Holdings, Ltd. .........................................................................

1,753

1.6

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

1,550

1.4

Outstanding Shares : 111,125 thousands

Shareholder

Number of Shareholders : 63,831
Number of Shares per Trading Unit : 100
Stock Exchange Listings:
Tokyo Stock Exchange (First Section)
Fukuoka Stock Exchange

Note : 1,984 thousand shares of treasury stock are not shown in the table above and are excluded from the calculation ofshareholding ratios.

Number of Shares Held andPercentage of Shares Held by
Shareholder Category

Stock Price and Trends in Stock Trading Volume

Stock Price(Yen)

Number of
Shareholders(Number)Number of
Shares Owned(Thousands)

72

20,027

Stock Trading Volume(Thousands)

18,00015,000● Financial Institutes .................

ー Nikkei Index (Close)

12,000● Securities Companies .............

29

2,379

● Other Domestic Corporations.........

505

46,4999,000● Foreign Corporations ..............

308

20,9126,000● Individuals and Others ............ 62,916

19,322

3,000● Treasury Stock .......................

1

1,984

Total ........................................... 63,831

111,125■ ■ CCW Stock Price■ CCW Stock Trading Volume

2,500
2,000
1,500

Composition of Shareholders

18,00015,00012,000
9,000
6,000
3,000
0

1,000
Treasury Stock
1.8%
Individuals
and Others

17.4%
Foreign
Corporations
18.8%

Financial Institutes
18.0%

500

Securities
Companies
2.1%

0

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 (month)

2012

Other Domestic
Corporations
41.9%

Stock Price at year end
(Yen)

2013

2014

2010

2011

2012

2013

2014

1,471

1,335

1,333

2,227

1,661

Credit Rating Information
2010

2011

2012

2013

2014

Japan Credit Rating Agency, Ltd. (JCR) Long-term senior debt

AA–

AA–

AA–

AA–

AA–

Rating and Investment Information, Inc. (R&I) Long-term senior debt

A+

A+

A+

A+

A+

Coca-Cola West36

Annual Review 2014

Coca-Cola System in Japan(As of January 1, 2015)

The Coca-Cola System in Japan is consisted of the Coca-Cola (Japan) Co., Ltd. engaging in planning / development of products as well as producing syrup concentrates and advertising, and bottling companies engaging in manufacturing / sale ofproducts in various regions across Japan, and other afﬁliated companies.

Investments

Figures show the percentage investment by Coca-Cola West Co., Ltd.

JOINT VENTURES BETWEEN
TCCC/CCJC AND BOTTLERSThe Coca-Cola Company(TCCC)

100%

⑵

100%

Coca-Cola Business
Service Co., Ltd.
(CCBSC)
⑹

⑸

21.1%

Coca-Cola West Co., Ltd.
(CCW)

3.7％

⑴

Coca-Cola Tokyo Research& Development Co., Ltd.
⑷
(CCTR&D)
Coca-Cola Customer
Marketing Co., Ltd.
(CCCMC)⑺

23.7%

Coca-Cola (Japan) Co., Ltd.
(CCJC)⑶
FV Corporation Co., Ltd.
(FVC)

25.9%

7 Coca-Cola
Bottling Companies(CCBC)⑻(1) Coca-Cola West Co., Ltd. (CCW)(5) Coca-Cola Bottling Companies (CCBC)

In 1999, Kitakyushu Coca-Cola Bottling Co., Ltd. merged with Sanyo
Coca-Cola Bottling Co., Ltd. to establish Coca-Cola West Japan Co., Ltd.
(CCWJ). In 2001, CCWJ made Mikasa Coca-Cola Bottling Co., Ltd. a
subsidiary, and in 2006, integrated the management of Kinki Coca-Cola
Bottling Co., Ltd. In 2009, the current Coca-Cola West Co., Ltd. was established. As of April 1, 2013, it made Minami Kyushu Coca-Cola BottlingCo., Ltd. a wholly owned subsidiary and as of April 1, 2014, merged withthe wholly owned subsidiary.

There are 8 bottling companies in Japan. They produce and distribute
Coca-Cola products in their respective territories.

(6) Coca-Cola Business Service Co., Ltd. (CCBSC)
Established in June 1999 as a joint venture between The Coca-Cola
Company and all of its bottling companies in Japan. Its responsibilities are(i) procurement of raw materials and supplies for the Coca-Cola System inJapan, (ii) business consulting to the Coca-Cola organization in Japan, (iii)
development of IT systems and maintenance and operation of those IT systems.

(2) The Coca-Cola Company (TCCC)
Established in Atlanta Georgia in 1919. The Coca-Cola Company holds
the rights to grant licenses to bottling companies to produce and sell
Coca-Cola products. The Coca-Cola Company and its subsidiaries enter
into licensing agreements with bottling companies.

(7) Coca-Cola Customer Marketing Co., Ltd. (CCCMC)
Established in January 2007 as a joint venture between Coca-Cola (Japan) Co., Ltd. and all of the bottling companies in Japan. Its responsibilities
are (i) business negotiation with leading retail stores such as nationwide
convenience stores and supermarkets, and (ii) creating proposals for sales
promotion and storefront activities.

(3) Coca-Cola (Japan) Co., Ltd. (CCJC)
Established in 1957 in Tokyo as a wholly owned subsidiary of The
Coca-Cola Company under the name of Nippon Inryo Kogyou K.K. The
company name was changed to Coca-Cola (Japan) Co., Ltd. in 1958. It is
responsible for marketing, planning, and manufacturing syrup concentratein Japan.

(8) FV Corporation Co., Ltd. (FVC)
Established in May 2001 as a joint venture between Coca-Cola (Japan)
Co., Ltd. and all of the bottling companies. Its responsibilities are to carryout the marketing of the vending machine business to corporations operating in a wide range of territories. It also handles products other thanCoca-Cola products.

(4) Coca-Cola Tokyo Research & Development Co., Ltd. (CCTR&D)
Established in January 1993 as a wholly owned subsidiary of The
Coca-Cola Company. It has been carrying out product development andtechnical support since January 1995 in response to the needs of Japan.

Coca-Cola West37

Annual Review 2014

Sales Territories of Bottlers (8 companies)■ Coca-Cola West Co., Ltd.
Fukuoka/Osaka/Shiga/Nara/
Wakayama/Kyoto/Hyogo/Okayama/
Tottori/Hiroshima/Shimane/ Yamaguchi/
Saga/Nagasaki/Kumamoto/Kagoshima/
Miyazaki/Oita

Hokkaido Coca-Cola Bottling Co., Ltd.
Michinoku Coca-Cola Bottling Co., Ltd.
Coca-Cola East Japan Co., Ltd.
Sendai Coca-Cola Bottling Co., Ltd.
Hokuriku Coca-Cola Bottling Co., Ltd.
Shikoku Coca-Cola Bottling Co., Ltd.
Okinawa Coca-Cola Bottling Co., Ltd.

COMPANY PROFILE (As of December 31, 2014)
Company name : Coca-Cola West Co., Ltd.
Head ofﬁce : 7-9-66 Hakozaki, Higashi-ku, Fukuoka 812-8650, Japan
Establishment : December 20, 1960
Paid-in capital : 15,231 million yen
Number of employees (consolidated) : 8,324
Primary business : Manufacturing and sales of Coca-Cola
and other soft drinks

Coca-Cola West38

Annual Review 2014

-Creating a happy tomorrow for everyone-

7-9-66 Hakozaki, Higashi-ku, Fukuoka 812-8650, Japan
Planning Department (Investor Relations) Tel: +81-92-641-8774
http://www.ccwest.co.jp/english/

10,780Printed in Japan