1.notice of the ordinary general meeting of …...2015/03/10 · 1995: managing director of molino...

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

[Securities Code: 2580] March 12, 2015

To Shareholders with Voting Rights

6-1-20, Akasaka, Minato-ku, Tokyo

Coca-Cola East Japan Co., Ltd.

Representative Director and President Calin Dragan

NOTICE OF THE ORDINARY GENERAL MEETING OF SHAREHOLDERS

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014

You are cordially invited to attend the Ordinary General Meeting of Shareholders for the fiscal year ended December 31, 2014 of Coca-Cola East Japan Co., Ltd. (the "Company"), which is to be held as follows.

If you are unable to attend, you may exercise your voting rights by submitting the Voting Form in writing. Please review the attached Reference Documents for the Annual Shareholders Meeting, exercise your voting rights through the enclosed Voting Right Exercise Form by indicating your approval or disapproval, and send it back to us by no later than 5:45 p.m., Friday, March 27, 2015.

We sincerely express our appreciation and look forward to your ongoing support.

1. Date Monday, March 30, 2015 at 10:00 a.m. (Reception will begin at 9:00 a.m.) 2. Venue 3-3-1 Shibakoen Minato-ku, Tokyo

Ho-Oh-No-Ma (main banquet hall), Tokyo Prince Hotel (Pleased find the map at the end of this notice) 3. Agenda Items to be Reported 1. The Business Report and the Consolidated Financial Statements for the fiscal

year ended December 31, 2014 (from January 1, 2014 to December 31, 2014), and the Audit Results Reports for the Consolidated Financial Statements by Accounting Auditor and the Board of Corporate Auditors

2. The Non-Consolidated Financial Statements for the fiscal year ended December 31, 2014 (from January 1, 2014 to December 31, 2014)

Proposals to be Resolved First Item Appropriation of Surplus Second Item Election of eleven (11) Directors Third Item Election of one (1) Corporate Auditor

～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～

Notes:

◎ If you are attending the meeting, please submit the enclosed Voting Right Exercise Form at the reception. You are

also kindly asked to bring this notice to the meeting.

◎ Information to be presented in Notes to the Consolidated Financial Statements and Non-Consolidated Financial

Statements sections is not included in the accompanying documents as such information is provided through the Company's website (http://www.ccej.co.jp/) in pursuant to laws and regulations as well as Article 16 of the Company's Articles of Incorporation. Consolidated and Non-Consolidated Financial Statements provided with this notice are extracts of such Financial Statements which are audited by Accounting Auditors and the Board of Corporate Auditors at the preparation of the Company’s Accounting Audit Reports and Audit Reports.

◎ If any changes are made to reference documents for the General Meeting of Shareholders, business reports, or

Consolidated and Non-Consolidated Financial Statements, such changes will be notified at the Company's website (http://www.ccej.co.jp/) and amended documents will be available for download.

◎ Please note that no social gathering is scheduled to be held following the General Meeting of Shareholders.

Reference Documents for the Annual Shareholders Meeting

Proposal and References First Item: Appropriation of Surplus

We have decided that the year-end dividend for FY2014 will be 16 yen per share based on the policy of maintaining sound and stable dividend payment in order to ensure sustainable development and highly-profitable growth for the future and comprehensively taking into account various factors including business performance. As a result, the annual dividend will amount to 32 yen per share including an interim dividend of 16 yen per share. Year-end dividend

(1) Matters related to the allocation of distributable profit to shareholders and the total amount thereof 16 yen per share of the Company's common shares Total amount: 1,936,712,768 yen

(2) Effective date of dividend March 31st, 2015

Second Item: Election of 11 Directors

The term of office for all 11 directors shall expire at the conclusion of the FY2014 Annual Shareholders Meeting. Accordingly, we hereby propose to elect 11 directors as follows. The candidates are as follows.

No. Name (Date of birth)

Past experience, positions, area of responsibilities and important concurrent positions

Number of shares in the

Company held

1 Calin Dragan

(October 24th, 1966)

Jun. 1993: Joined Coca-Cola Leventis Jan. 2000: Joined Coca-Cola Hellenic Bottling Co., S.A. (“Hellenic”) May 2002: Commercial Director, Coca-Cola Bevande Italia, Hellenic Jan. 2005: GM & Administrator, Romania & Moldova Republic, Hellenic Jul. 2011: Executive Corporate Officer, Coca-Cola West Co., Ltd. (“CCW”) Jan. 2012: GM of Business Model Innovation HQs, CCW Mar. 2012: Representative Director, EVP, Director of Value Chain & GM of Business Model Innovation HQs, CCW Jan. 2013: EVP, Corporate Officer & Assistant to the President, Mikuni Coca-Cola Bottling Co., Ltd. Mar. 2013: Representative Director, Mikuni Jul. 2013: Representative Director & President, the Company (Current position) Representative Director & President, Tokyo Coca-Cola Bottling Co., Ltd. Jan. 2015: Representative Director & President, Coca-Cola East Japan Products Co., Ltd. (Important concurrent positions) Representative Director & President of Coca-Cola East Japan Products Co., Ltd.

―

2 Michael Coombs (July 29th, 1963)

Jan.1984: Joined Amalgamated Beverage Industries (South Africa Coca-Cola Bottler) Jan.2001: CEO, TurkeCom Technology Sep.2002: CFO, Coca-Cola İçecek A.Ş. Jan.2005: VP & CFO, Coca-Cola (Japan) Co., Ltd.(“CCJC”) July.2005: Representative Director, VP & CFO, CCJC Mar.2008: Director, Coca-Cola West Holdings Co., Ltd. Apr.2009: Representative Director & President, TONE Coca-Cola Bottling Co., Ltd. Mar.2012: Representative Director & President, Coca-Cola Central Japan. Jul. 2013: Representative Director & VP & Executive Officer, the Company (Current position) Jul. 2013: Representative Director & President, new Coca-Cola Central Japan.

5,000 shares

3 Dan Nistor (July 19th, 1965)

Apr.1993: Joined Coca-Cola Hellenic Bottling Company Apr.1994: Sales Manager, Coca-Cola Bihor S.A., Romania May1995: GM, Coca-Cola Timis S.A. Romania Oct.1999: Division Director, Lagos & North Nigeria, Coca-Cola Hellenic Apr.2002: GM, Coca-Cola Hellenic Bottling Company (Estonia, Latvia, Lithuania) Jul.2007: GM, Coca-Cola Hellenic Bottling Company Poland Mar.2012: Representative Director & President, TONE Coca-Cola Bottling Co., Ltd. Jul. 2013: Director & VP & Executive Officer, the Company (Current position)

―

4 Fumio Akachi (April 1st, 1953)

Aug.1972: Joined Mikuni Coca-Cola Bottling Co., Ltd. (“Mikuni”) Jan.2001: GM of Saitama East Sales Office, Market Development Div., Sales & Marketing Grp.,Mikuni Nov.2003: Managing Officer, GM of Sales & Marketing Grp. & GM of F&L Sales Div., Mikuni Mar.2004: Director, Executive Managing Officer, GM of Sales & Marketing Grp., Mikuni Jan.2006: Director, Executive Managing Officer, GM of Corporate Administrative Grp., Mikuni Jan.2007: Director, Executive Managing Officer, GM of Corporate Administrative Grp., Mikuni & Representative Director & President, Mikuni Logistics Operation Co., Ltd. Jan.2009: Director, Executive Managing Officer, GM of Sales & Marketing Grp. & GM of East Office, Mikuni Jan.2010: Director, Senior Executive Managing Officer, GM of Sales & Marketing Grp., Mikuni Jan.2012: Director, Senior Executive Managing Officer, GM of Corporate Strategic Planning Grp., Mikuni Oct. 2012: Director, VP, Managing Officer, GM of Corporate Strategic Planning Grp., Mikuni Jul. 2013: Director & VP, Mikuni Jul. 2013: Director, the Company Jan. 2014: Director & Senior Executive Officer & Senior Mgr. of Corporate KAM, Commercial Function (Current position)

790 shares

5 Naruhiko Kawamoto (October 4th, 1954)

Apr. 1979: Joined Mitsubishi Corporation (“MC”) Apr. 1998: EVP & GM of Machinery Dept., Mitsubishi France S.A.S Dec. 2001: Assistant GM of Traffic Systems Unit, MC (Head office) Apr. 2006: Assistant Mgr. of International Economic Cooperation Unit, MC Apr. 2009: Mgr. of International Economic Cooperation Unit, MC Sep.2012: Corporate Officer, Deputy Grp. COO. of Corporate Administration Grp., Coca-Cola Central Japan. Jul. 2013: Director & Executive Officer & Senior Mgr. of Corporate Administration, Finance Function (Current position)

―

No. Name (Date of birth)

Past experience, positions, area of responsibilities and important concurrent positions

N u m b e r o f shares in the Company held

6 Irial Finan (June 14th, 1957)

1984: Finance Director, Coca-Cola Bottlers Ireland Ltd 1991: Managing Director, Coca-Cola Bottlers Ulster Ltd 1995: Managing Director of Molino Beverages & Joint Managing Director, Hellenic Bottling Company Mar.2001: CEO, Coca-Cola HBC SA Aug.2004: EVP, The Coca-Cola Company (President Bottling Investments) (Current position) Mar. 2012: Director, Coca-Cola Central Japan. Jul. 2013: Director, the Company (Current position) (Current position) (Important concurrent positions) EVP of The Coca-Cola Company (President Bottling Investments)

―

7 Daniel Sayre (July 13th, 1956)

1983: Joined The Coca-Cola Company (“TCCC”) 1991: Coca-Cola Trademark Marketing Director, Coca-Cola USA, TCCC 1994: VP & Division Marketing Manager, River Plate Div., TCCC 1997: Brand Marketing Director, Mexico Div., TCCC 1999: Division Marketing Manager, Andean Div., TCCC 2001: North Andean Region Manager, Andean Div., TCCC 2003: Division President, Latin Center Div., TCCC Aug.2006: Representative Director & President, Coca-Cola (Japan) Co., Ltd. Jan.2013: President, Northwest Europe & Nordics Div., TCCC Jul. 2013: Director, the Company (Current position) Jan.2015: President, Western Europe Business Unit, TCCC (Current position) (Important concurrent positions) President, Western Europe Business Unit, TCCC

―

8 Haruhiko Inagaki (April 13th, 1954)

Apr.1979: Joined Coca-Cola (Japan) Co., Ltd. May.1986: Joined Hokuriku Coca-Cola Bottling Co., Ltd. (“Hokuriku”) Feb.1987: Director & GM of Planning Office, Nagano Coca-Cola Bottling Co., Ltd. (“Nagano”) Feb.1990: Managing Director, Nagano Mar.1993: Managing Director, Hokuriku Oct.1999: Representative Managing Director, Hokuriku Dec.2000: Representative Director & President of Hokuriku (Current position) Mar. 2012: Director, Coca-Cola Central Japan. Jul. 2013: Director, the Company (Current position) (Important concurrent positions) Representative Director & President of Hokuriku Coca-Cola Bottling Co., Ltd.

―

9 Keiji Takanashi

(March 2nd, 1946)

Apr.1969: Joined Tokyo Coca-Cola Bottling Co., Ltd. (“Tokyo”) Jan.1983: Manager of Management Planning Office, Tokyo Feb.1983: Director, Manager of Management Planning Office, Tokyo Feb.1985: Managing Director, Tokyo Jul.1990 Representative Executive Director, Tokyo Dec.1991: Representative Director & President, Tokyo Nov.2007: Representative Director & Chairman & CEO, Tokyo Jul. 2013: Executive Adviser, Tokyo Jul. 2013: Director, the Company (Current position)

87,175 shares

10 Hiroshi Yoshioka

(October 26th 1952)

Apr. 1975: Joined Japan Radio Co., Ltd. Feb. 1979: Joined Sony Corporation (“Sony”) Oct. 2001: Representative Director & President of Sony Ericsson Mobile Communications Ltd. (Current Sony Mobile Communications Inc.) Apr. 2003: CVP, Sony Ericsson Mobile Communications AB Nov. 2005: Corporate Officer & SVP, Sony Apr. 2008: Corporate Officer & EVP, Sony Apr. 2009: Executive Officer & VP, Sony (Resigned as of December, 2012) Jul. 2013: Director, the Company (Current position)

―

11 ＊

Haruko Ozeki

(March 5th 1963)

Apr. 1985: Joined Nippon Kogaku Kogyo K.K. (currently Nikon Corporation) Aug. 1997:Legal Counsel, Coca-Cola (Japan) Co., Ltd. Aug. 2003:Legal Director, Amazon Japan K.K Jan. 2008:Executive Officer & Senior Legal Director at Bristol-Myers K.K. Dec. 2011:Executive Operation Officer & General Counsel at Siemens Japan K.K. Sep. 2013: Executive Officer &,Chief Legal Officer, the Company (Current position)

―

(Notes) 1. Irial Finan, a director candidate, is the Executive Vice President of The Coca-Cola Company and we have

entered into the Agreement for manufacturing and sales of Coca-Cola and other products, use of trademarks as well as the Capital and Business Alliance Agreement with the said company.

2. Daniel Sayre, a director candidate, is the President, Western Europe Business Unit of The Coca-Cola Company and we have entered into the Agreement for manufacturing and sales of Coca-Cola and other products, use of trademarks and the Capital and Business Alliance Agreement with the said company.

3. Haruhiko Inagaki, a director candidate, is the Representative Director and President of Hokuriku Coca-Cola Bottling, Co., Ltd. and we gave a business relationship such as purchase of products.

4. The Company has no special interest with other director candidates. 5. Irial Finan, Daniel Sayre, Haruhiko Inagaki and Hiroshi Yoshioka are external director candidates. 6. We have registered Haruhiko Inagaki and Hiroshi Yoshioka, external director candidates, as independent

officers with the Tokyo Stock Exchange and will continue such designation upon the approval of the reappointment.

7. Reasons for nominating each of external director candidates are as follows. (1) Irial Finan, a director candidate, has engaged in the management of The Coca-Cola Company and

we hereby seek to elect him in order to make use of his abundant experience and deep insights for our management. His term of office as an external director will reach 3 years (include the tenure of Coca-Cola Central Japan) at the conclusion of the FY2014 Annual Shareholders Meeting.

(2) Daniel Sayre, a director candidate, has engaged in the management of The Coca-Cola Company and we hereby seek to elect him in order to make use of his abundant experience and deep insights for our management. His term of office as an external director will reach 1 year and nine months at the conclusion of the FY 2014 Annual Shareholders Meeting.

(3) Haruhiko Inagaki, a director candidate, is the Representative Director and President of Hokuriku Coca-Cola Bottling Co., Ltd. and we hereby seek to elect him in order to make use of his abundant experience and deep insights for our management. His term of office as an external director will reach 3 years(include the tenure of Coca-Cola Central Japan) at the conclusion of the FY2014 Annual Shareholders Meeting.

(4) Hiroshi Yoshioka, a director candidate, has served for Sony Corporation and we hereby seek to elect him in order to make use of his abundant experience and deep insights for our management. His term of office as an external director will reach 1 year and nine months at the conclusion of the FY 2014 Annual Shareholders Meeting.

8. Irial Finan, a director candidate, is the Executive Vice President of The Coca-Cola Company, our specified business operator.

9. Daniel Sayre, a director candidate, is the President, Western Europe Business Unit of The Coca-Cola Company, our specified business operator.

10. We have entered into a limited liability agreement with Irial Finan, Daniel Sayre, Haruhiko Inagaki and Hiroshi Yoshioka, the external directors for limiting liability for damages as provided for in Article 423-1 of the Companies Act and the limit of liability under the said agreement shall be the minimum liability amount prescribed by law.

Third Item : Election of 1 Company AThird Item : Election of 1 Company AThird Item : Election of 1 Company AThird Item : Election of 1 Company Auuuuditorditorditorditor The company auditor, Ms. Kana Odawara, shall resign at the conclusion of the General Meeting of the Shareholders. Accordingly, we hereby propose to elect 1 auditor as follows. The candidate is as follows. This item has been approved by the board of company auditors.

No. Name

(Date of birth)

Past experience, positions and

significant concurrent positions

Number of CCCJ

Shares held

1 ＊ Haraomi Kondo (Aug. 23, 1964)

Apr.1987 Joined Denso Co., Ltd.

－

Aug.1994 Joined Ford Japan Co., Ltd.

Jul.1998 Finance Controller, CCJC Nov.2003 Manager of Marketing finance, CCJC

Jug.2005 Director of Financial Planning, CCJC Jan.2010 Director of System Financial Planning, CCJC

Jun.2011 Senior Vice President & Finance Controller, CCJC Mar.2012 Corporate Auditor, Coca-Cola Central Japan Co., Ltd.

Jan.2013 Vice President & Manager of president's office, CCJC (Significant concurrent positions) Vice President & Manager of president's office, CCJC

(Notes) 1. Mr. Haraomi Kondo is an outside corporate auditor candidate. 2. The Company asks the shareholders to approve the election of Mr. Haraomi Kondo as an outside corporate auditor as the Company desires that he will contribute to the Company’s management with his abundant experience and deep insight cultivated at Coca-Cola (Japan) Co., Ltd. while he is engaged in finance-related business, etc.

3. Upon approval of this proposal, the Company intends to enter into a limited liability agreement with Mr. Haraomi Kondo, who will become an outside corporate auditor. The said agreement will limit their liability as provided for in Article 423, Paragraph 1 of the Companies Act to the minimum liability amount prescribed by laws and regulations.

(Reference Documents)

Business Report (From January 1, 2014 to December 31, 2014)

1. Current Status of the Coca-Cola East Japan Group (1) Business Progress and Results

Coca-Cola East Japan Co., Ltd. was formed as a result of integration of four Coca-Cola bottling companies on July 1, 2013. Since the integration, the Company has been implementing various integration projects and pursuing new initiatives. In the course of vigorously promoting integration, we have overcome some operational challenges while transforming the way we run the business from management based on legal entities to management based on functions.

Specifically, our objective was to unleash synergy through management integration while seeking to strike the optimum balance between sales volume and prices while increasing the market share. For this purpose, we formulated a strategic capital investments plan and improved manufacturing efficiency while promoting streamlining of logistics to reduce the cost of the supply chain. Furthermore, we pursued cost reduction in the procurement field.

Major initiatives during FY2014 included the following: • Completed integration of three Production companies into Coca-Cola East Japan Products Co., Ltd. (on January

1, 2014) • Started operation of five new production lines and in-line PET bottle blowers. Shut down the Nagoya Plant and

the Shizuoka Plant • Completed consolidation of call centers of sales operations from six to two centers • Sold Mikuni Wine Co., Ltd. to focus on the nonalcoholic ready-to-drink beverage business • Implemented the Route-to-Market (RTM) Program to enhance efficiency of sales activities • Completed integration of three logistics companies and four equipment maintenance companies into Coca-Cola

East Japan Products Co., Ltd. (on July 1, 2014) • Issued straight bond (14 billion yen) • Started development of “CokeOne+,” the Company’s Enterprise Resource Planning (ERP) system to be

launched in April 2015 as a foundation for business process reengineering following the integration • Completed integration of four Coca-Cola bottlers into the Company (on January 1, 2015) • Plan for integration of eight subsidiaries that sell beverages of the Company and of other companies via vending

machines (“mixed” vending) (scheduled for April 1, 2015) • Plan for business integration of Sendai Coca-Cola Bottling Co., Ltd. (three territories: Fukushima, Miyagi, and

Yamagata Prefectures) (scheduled for April 1, 2015) In FY2015, as well as promoting each project, we will vigorously introduce new products and implement sales

promotion activities through our partnership with Coca-Cola (Japan) Company Limited. As this year is the 100th anniversary of the Coca-Cola contour bottle, a unique and instantly recognizable icon of

the Coca-Cola brand, we will implement centenary sales promotion campaigns throughout the year. As the first element of this year-long celebration, in January we launched the “Heritage” campaign focusing on the history of Coca-Cola. Furthermore, in March, we launched Coca-Cola Life, a new product under the Coca-Cola brand. By fully utilizing these strategies, we intend to stimulate consumer demand for Coca-Cola beverages.

Regarding consolidated results for FY2014, although the overall beverage market shrank from the previous year due to the unseasonable weather in the summer and weaker consumer sentiment following the consumption tax hike, net sales were 523,299 million yen (*up 40.4% year on year), operating income was 9,356 million yen (*up 23.4%), ordinary income was 9,606 million (*up 24.2%), and net income was 3,434 million yen (*down 70.3%).

*CCEJ began operations as an integrated company starting in the third quarter of 2013. As a result, above reported

results in 2013 reflect the consolidated results of CCEJ in the third and fourth quarter and consolidated result of the legacy Coca-Cola Central Japan (CCCJ) for the first and second quarters.

(2) Capital Investment

Capital investment, including leases, amounted to 49,494 million yen for FY2014. The major items were additional placements and renewal of vending machines and new installations and renewal of manufacturing equipment.

Capital investment was financed by own funds, bank borrowings, and bonds issued. (3) Financing

The Company issued the first series of unsecured straight bonds in the amount of 14 billion yen on September 22, 2014.

(4) Issues to be Addressed

The beverage industry in Japan continues to face challenges amid price competition, the surge of private-label products, and the growing popularity of brewed coffee sold at convenience stores. In these circumstances, while promoting various integration projects, we will seek further opportunities for sales growth by strengthening each sales channel, geographic area, sales occasion, and beverage category.

In addition, we will pursue further synergy through business integration with Sendai Coca-Cola Bottling Co., Ltd., and accelerate growth to become a world-class Coca-Cola bottler based in Japan.

We request your continuing support in our endeavors.

(5) Trend of Assets and Earnings (Millions of yen)

Item FY2011 FY2012 FY2013 FY2014

Net sales 193,081 193,794 372,792 523,299

Ordinary income 3,861 3,713 7,732 9,606

Net income 1,309 1,630 11,582 3,434

Net income per share yen yen yen yen

29.68 36.95 139.69 28.37

Total assets 114,719 112,785 314,490 342,672

Net assets 87,231 87,461 216,191 213,754

Notes: 1. Amounts less than the units indicated are rounded down. 2. The Company conducted a share exchange on July 1, 2013 through which the Company became the

wholly owning parent company of Mikuni Coca-Cola Bottling Co., Ltd., Tokyo Coca-Cola Bottling Co., Ltd., and Tone Coca-Cola Bottling Co., Ltd., which became wholly owned subsidiaries.

3. CCEJ began operations as an integrated company starting in the third quarter of 2013. As a result, above reported results in 2013 reflect the consolidated results of CCEJ in the third and fourth quarter and consolidated result of the legacy Coca-Cola Central Japan (CCCJ) for the first and second quarters.

(6) Major Parent Companies and Subsidiaries

1) Relationship with Parent Companies Not applicable.

2) Major Subsidiaries

Company name Capital

(Millions of yen) Investment

ratio (%) Major business

Coca-Cola Central Japan Co., Ltd. 100 100 Sales of beverages

Mikuni Coca-Cola Bottling Co., Ltd. 100 100 Sales of beverages

Tokyo Coca-Cola Bottling Co., Ltd. 100 100 Sales of beverages

Tone Coca-Cola Bottling Co., Ltd. 100 100 Sales of beverages

Coca-Cola East Japan Products Co., Ltd. 100 100

Manufacturing of beverages and service and maintenance of sales equipment

Notes: 1. The Company has 11 consolidated subsidiaries including the above 5 major subsidiaries, 4

non-consolidated subsidiaries and 3 equity-method affiliates. 2. Mikuni Coca-Cola Bottling Co., Ltd., which is a 100% subsidiary of the Company, implemented an

absorption-type merger with Coca-Cola Central Japan Co., Ltd., Tokyo Coca-Cola Bottling Co., Ltd., and Tone Coca-Cola Bottling Co., Ltd. on January 1, 2015 and the Company implemented an absorption-type merger with Mikuni Coca-Cola Bottling Co., Ltd. on the same day.

3. At the meeting of the Company’s Board of Directors held on December 16, 2014, it was resolved to conduct a share exchange on April 1, 2015, through which the Company will become the wholly owning parent company and Sendai Coca-Cola Bottling Co., Ltd. will become a wholly owned subsidiary.

3) Others

The Company has entered into the Agreement with The Coca-Cola Company and Coca-Cola (Japan) Company Limited for manufacturing and sales of Coca-Cola and other products and use of the trademarks etc. in Tokyo and 12 prefectures in Kanto, Koshinetsu, and Chubu regions. Based on this Agreement, the Company has entered into the Delegation Authorization Agreement with The Coca-Cola Company, Coca-Cola (Japan) Company Limited, and Coca-Cola East Japan Products Co., Ltd. and outsources the manufacturing business to Coca-Cola East Japan Products Co., Ltd.

In addition, the Company has entered into the Capital and Business Alliance Agreement with The Coca-Cola Company in order to further strengthen competitiveness and enhance corporate value.

(7) Principal Business The Group’s principal business is manufacturing and sales of beverages and the Group conducts businesses

related to the said business, including maintenance and repair of sales equipment and distribution of products and goods.

(8) Principal Sales Offices and Plants

1) The Company’s Principal Business Office Head Office Minato-ku, Tokyo

2) Principal Business Office of Subsidiaries Coca-Cola Central Japan Co., Ltd. Yokohama-shi, Kanagawa Prefecture Mikuni Coca-Cola Bottling Co., Ltd. Okegawa-shi, Saitama Prefecture Tokyo Coca-Cola Bottling Co., Ltd. Tone Coca-Cola Bottling Co., Ltd.

Minato-ku, Tokyo Noda-shi, Chiba Prefecture

Coca-Cola East Japan Products Co., Ltd. Minato-ku, Tokyo

(9) Employees

1) The Group Number of employees Change from end of FY2013

7,397 employees -494 employees Notes: 1. Temporary employees numbering 3,139 are not included in the above number of employees. 2. Executive Officers are not included in the above number of employees.

2) The Company

Number of Employees Change from end of FY2013 2,112 employees +1,223 employees

Notes: 1. Executive Officers are not included in the above number of employees. 2. The number of employees increased by 1,223 in FY2014. This increase was mainly due to transfer of a part of

the business from the Company’s subsidiaries to the Company.

(10) Principal Lenders Lender Outstanding Borrowings (Millions of yen)

The Bank of Tokyo-Mitsubishi UFJ, Ltd. 8,000 Mitsubishi UFJ Trust and Banking Corporation 3,200 Sumitomo Mitsui Trust Bank, Limited 2,300 Mizuho Bank, Ltd. 1,250 Sumitomo Mitsui Banking Corporation 1,250

2. Shares of the Company (1) Total number of authorized shares 487,000,000 shares

(2) Total number of issued shares 121,044,548 shares (excluding 854,430 shares of treasury stock)

(3) Total number of shareholders 28,531 shareholders

(4) Major Shareholders

Name of shareholder Number of shares held

(Shares)

Shareholding ratio (%)

European Refreshments 20,605,579 17.02 Coca-Cola (Japan) Company Limited 16,669,354 13.77 Senshusha Co., Ltd. 5,451,200 4.50 Mitsui & Co., Ltd. 5,237,383 4.32 Toyo Seikan Group Holdings Ltd. 5,126,090 4.23 State Street Bank and Trust Company 3,746,181 3.09 Hikitaka Co., Ltd. 2,668,548 2.20 The Coca Cola Export Co. 2,250,500 1.85 Mitsubishi Heavy Industries, Ltd. 2,047,425 1.69 Kikkoman Corporation 1,950,831 1.61

Notes: 1. Amounts less than the units indicated are rounded down. 2. Shareholding ratios are calculated after deducting the treasury shares (854,430 shares).

(5) Other Important Matters relating to Shares

In accordance with the resolution made by the Board of Directors of the Company on August 6, 2014, the Company filed an application for delisting of the Company’s stock from the Nagoya Stock Exchange, and the Company’s stock was delisted from the Nagoya Stock Exchange in September 2014. As a result, the Company’s stock is now only listed on the First Section of the Tokyo Stock Exchange.

3. Subscription Rights to Shares etc. (1) Subscription Rights to Shares of the Company Owned by Officers of the Company as of the End of FY2014

Issuance (Date of Resolution)

Position and

Number of Persons

Class and Number of Shares for

Subscription Rights to Shares

Number of

Subscript-ion

Rights to Shares

Paid-in Amount for Subscription

Rights to Shares

Value of Assets to be Invested at Exercise of

Rights

Exercise Term of Subscription Rights

to Shares

Coca-Cola Central Japan Co., Ltd. 4th Subscription Rights to

Shares (Stock compensation-type

stock options) (March 28, 2012)

Director 1 person

5,100 shares of common

stock

51 91,800 yen

per stock option

1 yen per share

From May 10, 2012 to May 9, 2032

Coca-Cola Central Japan Co., Ltd. 5th Subscription Rights to



Director 2 persons


stock

21 156,600 yen

per stock option

1 yen per share

From May 15, 2013 to May 14, 2033

Coca-Cola East Japan Co., Ltd. 1st Subscription Rights to



Director 6 persons


stock

310 211,300 yen

per stock option

1 yen per share

From April 17, 2014 to April 16, 2034

Coca-Cola East Japan Co., Ltd. 2nd Subscription Rights to


stock options) (May 12, 2014)

Director 1 person


stock

729 229,200 yen

per stock option

1 yen per share

From May 29, 2014 to May 28, 2034

Note: No subscription rights to shares have been granted to External Directors and Corporate Auditors.

(2) Subscription Rights to Shares of the Company Granted to Employees in FY2014

Issuance (Date of Resolution)

Position and

Number of Persons

Class and Number of Shares for

Subscription Rights to Shares

Number of

Subscript-ion

Rights to Shares

Paid-in Amount for Subscription

Rights to Shares

Value of Assets to be Invested at Exercise of

Rights

Exercise Term of Subscription Rights to

Shares

Coca-Cola East Japan Co., Ltd. 1st Subscription Rights to



Employees of the

Company 10 persons


stock

253 211,300 yen

per stock option

1 yen per share

From April 17, 2014 to April 16, 2034

(3) Other Significant items relating to Subscription Rights to Shares

Not applicable.

４．４．４．４．Officers of the Company

(1) Name of Directors and Corporate Auditors

P o s i t i o n N a m e Area of responsibility and important concurrent positions

(as of December 31,2014)

Representative Director and

President Calin Dragan

Representative Director & President of Mikuni Coca-Cola Bottling Co., Ltd. Representative Director & President of Tokyo Coca-Cola Bottling Co., Ltd.

Director Vice President

Executive Officer Michael Coombs

Chief Financial Officer Representative Director & President of Coca-Cola Central Japan Co., Ltd.


Executive Officer Dan Nistor

Chief Commercial Officer Representative Director and President of TONE Coca-Cola Bottling Co., Ltd

Director Executive Officer

Fumio Akachi Senior Manager of Corporate KAM Commercial Function


Naruhiko Kawamoto Senior Manager of Corporate Administration, Finance Function


Masaki Ito Senior Manager of Non KO Subsidiaries & M&A, Finance Function

Director Irial Finan Executive Vice President of The Coca-Cola Company (President Bottling Investments Group)

Director Daniel Sayre President of Northwest Europe & Nordics Div., The Coca-Cola Company

Director Haruhiko Inagaki Representative Director & President of Hokuriku Coca-Cola Bottling Co., Ltd.

Director Keiji Takanashi

Director Hiroshi Yoshioka

Full-Time Corporate Auditor

Tomizo Nagafuchi


Yutaka Sugita

Corporate Auditor Sadao Nozaki Adviser, Kikkoman Corporation

Corporate Auditor Kana Odawara Senior Vice President & Finance Controller of Coca-Cola (Japan) Co., Ltd.

(Notes)

1. Of the above Director, Irial Finan, Daniel Sayre, Haruhiko Inagaki and Hiroshi Yoshioka are the External Directors provided for in Article 2-15 of the Companies Act.

2. Tomizo Nagafuchi who is a Full-Time Corporate Auditor and Sadao Nozaki and Kana Odawara who are Corporate Auditors are External Corporate Auditors provided for in Article 2-16 of the Companies Act.

3. The Company has registered Haruhiko Inagaki and Hiroshi Yoshioka who are Directors, Tomizo Nagafuchi who is a Full-Time Corporate Auditor and Sadao Nozaki who is a Corporate Auditor as independent officers with Tokyo Stock Exchange Co., Ltd.

4. Full-Time Corporate Auditor Sugita Yutaka engages in accounting related business of the Company, and Corporate Auditor Kana Odawara engages in finance related business of Coca-Cola (Japan) Co., Ltd., and each of them has considerable knowledge about finance and accounting.

5. Directors and Corporate Auditors after the Financial Closing The structure of Directors and Corporate Auditors as of January 1st 2015 is as follows.

P o s i t i o n N a m e Area of responsibility and important concurrent position

Representative Director and

President Calin Dragan

Representative Director and President of Coca-Cola East Japan Products Co., Ltd.


Executive Officer Michael Coombs Chief Financial Officer


Executive Officer Dan Nistor Chief Commercial Officer


Fumio Akachi Senior Manager of Corporate KAM Commercial Function


Naruhiko Kawamoto Senior Manager of Corporate Administration, Finance Function


Masaki Ito Senior Manager of Non KO Subsidiaries & M&A, Finance Function

Director Irial Finan Executive Vice President of The Coca-Cola Company (President Bottling Investments Group)

Director Daniel Sayre President, Western Europe Business Unit, The Coca-Cola Company

Director Haruhiko Inagaki Representative Director and President of Hokuriku Coca-Cola Bottling Co., Ltd. External Director of Fushiki Kairiku Unso Co., Ltd.

Director Keiji Takanashi Executive Adviser of Tokyo Coca-Cola Bottling Co., Ltd. Director & Executive Adviser of Okinawa Coca-Cola Bottling Co., Ltd.



Tomizo Nagafuchi


Yutaka Sugita


Corporate Auditor Kana Odawara Senior Vice President & Finance Controller of Coca-Cola (Japan) Co., Ltd.

－ 12 －

(2) Compensation for Directors and Corporate Auditors

11 Directors 580 million yen (including 40 million yen for 4 External Directors) 4 Corporate Auditors 55 million yen (including 9 million yen for 2 External Corporate Auditors) Note: The compensation for Directors includes subscription rights to shares granted as stock options to 6

Directors (excluding External Directors) amounting to 175 million yen and bonuses for FY2014 provided to 6 Directors (excluding External Directors) amounting to 32 million yen.

(3) External Officers

1) Significant Concurrent Positions at Other Entities and Relationships between the Company and Such Entities Position Name Concurrent Position

Director Irial Finan Executive Vice President of The Coca-Cola Company (President of Bottling Investments Group)

Director Daniel Sayre President of Northwest Europe & Nordics Div., The Coca-Cola Company

Director Haruhiko Inagaki Representative Director & President of Hokuriku Coca-Cola Bottling Co., Ltd.



Tomizo Nagafuchi


Corporate Auditor Kana Odawara Senior Vice President & Finance Controller of Coca-Cola (Japan) Company Limited

Notes: The business relationships between the Company and the entities in which the External Officers have significant concurrent positions are as follows:

1. The Company has entered into the Agreement for manufacturing and sale of Coca-Cola and other products and use of the trademarks etc. and the Capital and Business Alliance Agreement with The Coca-Cola Company.

2. The Company has entered into the Agreement for manufacturing and sale of Coca-Cola and other products and use of the trademarks etc. and the Capital and Business Alliance Agreement with Coca-Cola (Japan) Company Limited.

3. The Company has a business relationship, such as product purchase, with Hokuriku Coca-Cola Bottling Co., Ltd.

－ 13 －

2) Principal Activities of External Officers

Position Name

Attendance of Board of Directors Meetings

Attendance of Board of

Corporate Auditors Meetings

Major Activities

Director Irial Finan

6 out of 6

- He provided advice useful for the Company’s management from a neutral and objective viewpoint.

Director Daniel Sayre

5 out of 6


Director Haruhiko Inagaki

5 out of 6



6 out of 6



Tomizo Nagafuchi

6 out of 6

12 out of 12 He provided advice from a neutral and objective viewpoint.

Corporate Auditor Sadao Nozaki

6 out of 6

12 out of 12 He provided advice from a neutral and objective viewpoint.

Corporate Auditor Kana Odawara

6 out of 6

12 out of 12 She provided advice from a neutral and objective viewpoint.

3) Overview of Limited Liability Agreement

The Company has entered into an agreement with Irial Finan, Daniel Sayre, Haruhiko Inagaki, and Hiroshi Yoshioka who are External Directors and Tomizo Nagafuchi, Sadao Nozaki and Kana Odawara who are External Corporate Auditors to limit their liability for damages stipulated in Article 423-1 of the Companies Act provided that they act in good faith and without gross negligence. The maximum liability amount in accordance with the said agreement shall be the minimum liability amount stipulated in Article 425-1 of the Companies Act.

5. Accounting Auditor

(1) Name of Accounting Auditor: Ernst & Young ShinNihon LLC

(2) Amount of Remunerations for the Accounting Auditor for FY2014 Amount paid (millions of yen) Amount of remunerations for the Accounting Auditor for FY2014 51 Total amount of money and other financial interest to be paid to the Accounting Auditor by the Company and its subsidiaries

78

Note: The Audit Agreement concluded by and between the Company and Ernst & Young ShinNihon LLC does not clearly distinguish the remunerations for audit services in accordance with the Companies Act and for audit services in accordance with the Financial Instruments and Exchange Act and they cannot be distinguished substantially. Therefore, the amount of remunerations stated above is the total amount of remuneration for these audit services for FY2014.

(3) Non-Audit Services

The Company commissions the Accounting Auditor to provide comfort letter preparation services in line with issue of bonds, which are outside the scope of the services stipulated in Article 2-1 of the Certified Public Accountants Act (non-audit services).

(4) Policy on Determination of Dismissal or Refusal of Reappointment of the Accounting Auditor

In the event that the Accounting Auditor falls under any of items stipulated in Article 340-1 of the Companies Act or the Accounting Auditor is deemed to have difficulty in providing appropriate audit services for the Company, such as being subject to a suspension of business by any regulatory agency, the Board of Corporate Auditors shall demand upon its unanimous agreement that the Board of Directors propose the dismissal or refusal of reappointment of the Accounting Auditor to be resolved at the Annual Shareholders Meeting.

－ 14 －

6. Company Systems and Policies

(1) System to ensure that Directors and employees’ performance of their duties conforms to laws and

regulations and the Articles of Incorporation

The “Code of Business Conduct” shall be established in order to ensure that all the Officers and employees comply with

laws and regulations and the Articles of Incorporation and to act in conformity with social norms and an Ethics &

Compliance Committee shall be established in order to reinforce the compliance system and to prevent non-compliance

from occurring.

As an internal whistle-blowing system against non-compliance, “Regulations for Handling Whistle-Blowing” shall be

created and a reporting and consultation contact separately from the reporting line to immediate managers shall be set

up.

Separation between audit and execution functions of the business operations shall be clarified, and non-executive external directors shall be placed in order to reinforce the audit function of the board of directors.

An Audit section shall be established in order to audit if business activities are conducted appropriately and effectively in conformity with laws and regulations, the Articles of Incorporation, Company Rules and Regulations, etc.

The Company shall stipulate in its “Code of Business Conduct” and other rules that employees shall take a firm attitude

against anti-social forces, never respond to any illegal request and deal with such situation in cooperation with the police

and awareness building activities such as internal trainings shall be provided for awareness-raising.

(2) System to retain and manage information related to Directors’ performance of their duties

The Company shall record information regarding Directors’ performance of their duties on a document or electronic

medium and retain it in accordance with the “Rules for Handling Documents” and “Information Security Policy” in a similar

way for statutory documents. Directors and Corporate Auditors may inspect such documents, etc. at any time.

(3) Regulations and other system concerning loss risk management

“Risk Management Rules” shall be established in order to manage risks. As part of the risk management system, a Risk

Management Committee shall be set up with President as the committee leader, holding a meeting on a regular basis

and calling an extraordinary meeting in order to promptly take action in the event of risk occurrence.

A Freshness Committee shall be formed to conduct quality assurance activities and to reinforce quality control for deeper

understanding of the importance of quality management.

(4) System to ensure efficiency of Directors’ performance of their duties

With respect to annual management policy and target determined by the Board of Directors, the progress status shall be

confirmed on a regular basis by the Board of Directors. Regarding an important matter not requiring a board resolution,

the authority shall be delegated to each Chief Officer in order to accelerate decision-making process and to ensure more

agile performance of duties. Further, the Board of Directors function shall be reinforced by limiting the Directors’ tenure

to one year and clarifying a single-year management responsibility.

(5) System to ensure appropriateness of operations in a corporate group

Through concurrent holding of directors’ and auditors’ posts at subsidiaries and their cooperation, the Company shall

supervise and manage the performance of the subsidiaries’ operations including their compliance systems.

(6) System to ensure appropriateness of financial reporting

For an appropriate disclosure of financial statements, the Company shall create responsible departments in order to

improve internal structure such as preparation of relevant rules and regulations and to build a framework for assessment

and reporting of the design and operating effectiveness on a regular basis.

(7) System concerning assistant employees if Corporate Auditors request for the assignment of such employees

to support their duties and matters concerning such employees’ independence from Directors

In the event that Corporate Auditors request for assignment of employees to support their duties, the Company shall staff

assistant employees to them. The assistant employees shall respect Corporate Auditors’ opinions for their personnel

transfer, assessment, etc. Further, regarding instructions from Corporate Auditors, the assistant employees shall not be

instructed or ordered by Directors, etc.

(8) System for Directors and employees’ reporting to Corporate Auditors and other systems relating to reporting

to Corporate Auditors

－ 15 －

Directors and employees shall report to Corporate Auditors without the least delay in the event that it is likely to have

legal matters, other matters which may have a significant impact or non-compliance and also Corporate Auditors may

request a report from Directors and employees as necessary.

(9) Other system to ensure that Corporate Auditors’ audit is conducted effectively

Representative Director and Corporate Auditors shall hold a meeting to exchange opinions on a regular basis in order to

communicate with each other. Directors shall prepare an environment for Corporate Auditors to cooperate with external

experts such as a lawyer and a certified public accountant in the course of their duties where they deem it necessary.

－ 16 －

Consolidated balance sheets

(MM yen)

Accounts Amount Accounts Amount

Assets Liabilities

Current assets 127,969 Current liabilities 81,791

Cash and deposits 24,982 Accounts payable-trade 22,944

Notes and accounts receivable-trade 36,611 Short-term loans payable 16,000

Short-term investment securities 1,204 Lease obligations 2,904

Merchandise and finished goods 31,433 accounts payable-other and accrued expenses 30,003

Raw materials and supplies 2,750 Income taxes payable 2,425

Deferred tax assets 2,928 accrued consumption taxes 1,700

Short-term loan to associated firms 2,958 Provision for bonuses 1,945

Accounts receivable 11,084 Provision for directors' bonuses 37

Other 14,112 Other 3,829

Allowance for doubtful accounts △98

Noncurrent assets 214,703 Noncurrent liabilities 47,126

Property, plant and equipment 179,442 Bonds 14,000

Buildings and structures, net 38,124 Lease obligations 7,283

Machinery Equipment And Vehicles 29,618 Deferred tax liabilities 1,784

Sale equipment, net 48,445 Provision for directors' retirement benefits 2

tools, furniture and fixtures 1,204 Provision for environmental measures 478

Land 45,642 Provision for loss on contract 2,187

Lease assets 9,978 Net defined benefit liability 18,689

Construction in progress 6,428 Other 2,700

Intangible assets 5,488 Total liabilities 128,917

Investments and other assets 29,772 Net assets

Investment securities 9,762 Shareholders' equity 215,301

Stocks of subsidiaries and affiliates 1,128 Capital stock 6,499

Long-term loans receivable 2,262 Capital surplus 143,134

Deferred tax assets 7,108 Retained earnings 66,837

Other 9,702 Treasury stock △1,170

Allowance for doubtful accounts △193 Valuation and translation adjustments △1,770

Valuation difference on available-for-sale securities 1,664

Deferred gains or losses on hedges 302

Remeasurements of defined benefit plans △3,717

Subscription rights to shares 223

Total Net assets 213,754

Total Assets 342,672 Total Liabilities and net assets 342,672

－ 17 －

Consolidated profit and loss statement

(MM yen) Accounts Amount

Net sales 523,299

Cost of sales 283,963

Gross profit 239,336

Selling, general and administrative expenses 229,979

Operating income 9,356

Non-operating income

Interest income 131

Dividends income 167

Rent income 372

Equity in earnings of affiliates 61

Gain on sales of valuable wastes 354

Gain on collection of deposits of bottles 4

Other 148 1,240

Non-operating expenses

Interest expenses 383

Loss on sales (retirement) of noncurrent assets 370

Rent expenses 95

Other 141 990

Ordinary income 9,606

Extraordinary income

Gain on sales of noncurrent assets 595

Gain on sales of subsidiaries stocks 69

Insurance income 137

Other 17 819

Extraordinary loss

Impairment and losses on disposal on fixed assets 435

Impairment loss 69

Expenses on business restructure 1,922

Expenses relating to quality 643

Defective work cost 562

Other 247 3,880

Income before income taxes 6,545

Income taxes – current 3,963

Income taxes △852 3,110

Income before minority interests 3,434

Net income 3,434

－ 18 －

Consolidated Statements of changes in net assets

(MM yen)

Shareholders' equity

Capital stock Capital surplus Retained earnings

Treasury stock Total

shareholders equity

Balance as of January 1st 2014

6,499 143,136 67,034 △1,164 215,507

Changes of items during the period

Dividends from surplus －－ △3,631 － △3,631

Net income －－ 3,434 － 3,434

Purchase of treasury stock －－－ △22 △22

Disposal of treasury stock － △2 － 15 13

Net changes of items other than shareholders' equity

－－－－－

Total changes of items during the period

－ △2 △196 △6 △205

Balance as of December 31st 2014

6,499 143,134 66,837 △1,170 215,301

Valuation and translation adjustments Subscription rights to

shares Net assets

Valuation difference on available-for-sale securities

Deferred gains or losses on hedges

Remeasurements of defined benefit plans

Total valuation and translation adjustments


867 △201 － 665 19 216,191


Dividends from surplus －－－－－ △3,631

Net income －－－－－ 3,434

Purchase of treasury stock －－－－－ △22

Disposal of treasury stock －－－－－ 13


777 504 △3,717 △2,435 204 △2,230


777 504 △3,717 △2,435 204 △2,436


1,644 302 △3,717 △1,770 223 213,754

－ 19 －

Non-Consolidated balance sheets

(MM yen)

Accounts Amount Accounts Amount

Assets Liabilities

Current asset 127,269 Current liabilities 71,663

Cash and deposits 13,852 Short-term loans payable 16,000

Accounts receivable-trade 2,337 Lease obligations 0

Supplies 15 accounts payable-other 17,039

Prepaid expenses 228 accrued expenses 234

Deferred tax assets 338 Income taxes payable 276

Short-term loan to associated firms 89,272 consumption taxes payable 1,051

Accounts receivable-other 13,582 Deposits received 36,693

Other 7,642 Provision for bonuses 340

Provision for directors' bonuses 27

Noncurrent assets 169,205 Noncurrent liabilities 16,800

Property, plant and equipment 38,448 Bonds 14,000

Buildings 11,554 Lease obligations 2

structures 727 Deferred tax liabilities 2,287

Machinery Equipment 2,354 Provision for retirement benefits 88

Vehicles 64 Provision for environmental measures 87

tools, furniture and fixtures 177 Other 335

Land 23,532 Total liabilities 88,464

Lease assets 3 Net assets

Construction in progress 33 Shareholders' equity 207,787

Intangible assets 3,490 Capital stock 6,499

software 3,490 Capital surplus 196,650

Legal capital surplus 181,677

Investments and other assets 127,266 Other capital surplus 14,972

Stocks of subsidiaries and affiliates 126,435 Retained earnings 5,807

Long-term loans receivable from subsidiaries and affiliates

418 Other retained earnings 5,807

Other 412 Reserve for advanced depreciation of noncurrent assets

281

General reserve 200

Retained earnings brought forward 5,325

Treasury stock △△△△1,170

Subscription rights to shares 223

Total Net assets 208,011

Total Assets 296,475 Total Liabilities and net assets 296,475

。

－ 20 －

Non-Consolidated profit and loss statement

(MM yen)） Accounts Amount

Operating revenue 34,176

Operating expenses 26,740

Operating income 7,435

Non-operating income

Interest income 228

Other 16 244

Non-operating expenses

Interest expenses 41

Interest on bonds 6

Bond issuance cost 50

Other 8 105

Ordinary income 7,574

Extraordinary income

Gain on sales of noncurrent assets 431

Insurance income 24 455

Extraordinary loss

Impairment and losses on disposal on fixed asset 59

Impairment loss 4

Business restructure cost 292

Expenses relating to quality 96

other 2 455

Income before income taxes 7,574

Income taxes – current 931

Income taxes △414 517

Net income 7,057

－ 21 －

NonNonNonNon----Consolidated Statements of Changes in Net AssetsConsolidated Statements of Changes in Net AssetsConsolidated Statements of Changes in Net AssetsConsolidated Statements of Changes in Net Assets

(MM yen)

Shareholders' equity

Capital stock

Capital surplus Retained earnings

Other retained earnings

Legal capital surplus

Other capital surplus

Reserve for advanced

depreciation of noncurrent

assets

General reserve

Retained earnings Brought forward


6,499 181,677 14,975 281 200 1,899


Dividends from surplus －－－－－ △3,631

Net income －－－－－ 7,057

Purchase of treasury stock －－－－－－

Disposal of treasury stock －－ △2 －－－


－－－－－－


－－ △2 －－ 3,426


6,499 181,677 14,972 281 200 5,325

Shareholders' equity Valuation and

translation adjustments Subscription

rights to shares Net assets

Treasury stock Total shareholders

equity

Valuation difference available-for-sale

securities Balance as of January1st 2014

△1,164 204,369 － 19 204,388


Dividends from surplus － △3,631 －－ △3,631

Net income － 7,057 －－ 7,057

Purchase of treasury stock △22 △22 －－ △22

Disposal of treasury stock 15 13 －－ 13


－－－ 204 204


△6 3,417 － 204 3,622


△1,170 207,787 － 223 208,011

－ 22 －

February 12, 2015

The Board of Auditors of Coca-Cola East Japan Co., Ltd.

Ernst & Young ShinNihon LLC.

Designated Unlimited Liability Partner,Engagement Partner,

Certified Public Accountant: Yoshihiko Nakatani


Certified Public Accountant: Takashi Uchikosi


Certified Public Accountant: Kazuhiko Yamazaki

INDEPENDENT AUDITORS' REPORT (CONSOLIDATED)

Pursuant to the fourth paragraph of Article 444 of the Companies Act, we have audited the consolidated financial statements,

namely, the consolidated balance sheet of Coca-Cola East Japan. (the “Company”) and consolidated subsidiaries, and the related

consolidated statements of income and changes in net assets for the fiscal year from January 1, 2014 to December 31, 2014, and the

related notes.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with

accounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the

preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit

in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to

obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the

assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making

those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the

consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the

purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as

evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Audit Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position

of Coca-Cola East Japan. and its consolidated subsidiaries, and the results of their operations for the year then ended in accordance

with accounting principles generally accepted in Japan.

Interest

Our firm and the engagement partners do not have any interest in the Company for which disclosure is required under the

provisions of the Certified Public Accountants Act.

－ 23 －

February 12, 2015

The Board of Auditors of Coca-Cola East Japan Co., Ltd.

Ernst & Young ShinNihon LLC.


Certified Public Accountant: Yoshihiko Nakatani


Certified Public Accountant: Takashi Uchikosi


Certified Public Accountant: Kazuhiko Yamazaki

INDEPENDENT AUDITORS' REPORT (NON-CONSOLIDATED)

Pursuant to the first item, second paragraph of Article 436 of the Companies Act, we have audited the financial statements, namely,

the balance sheet as of February 28, 2014 of Coca-Cola East Japan. (the “Company”), and the related statements of income and

changes in net assets for the fiscal year from January 1, 2014 to December 31, 2014, and the related notes and the accompanying

supplemental schedules.

Management’s Responsibility for the non-Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements and the

accompanying supplemental schedules in accordance with accounting principles generally accepted in Japan, and for such internal

control as management determines is necessary to enable the preparation of financial statements and the accompanying

supplemental schedules that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements and the accompanying supplemental schedules based on

our audit. We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that

we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the accompanying

supplemental schedules are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

financial statements and the accompanying supplemental schedules. The procedures selected depend on the

auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements and the accompanying

supplemental schedules, whether due to fraud or error. In making those risk assessments, the auditor considers internal control

relevant to the entity’s preparation and fair presentation of the financial statements and the accompanying supplemental schedules in

order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and

the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial

statements and the accompanying supplemental schedules.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Audit Opinion

In our opinion, the financial statements and the accompanying supplemental schedules referred to above present fairly, in all

material respects, the financial position of Coca-Cola East Japan, and the results of its operations for the year then ended in

accordance with accounting principles generally accepted in Japan.

Interest

Our firm and the engagement partners do not have any interest in the Company for which disclosure is required under the provisions

of the Certified Public Accountants Act.

－ 24 －

Audit Report

We, as the Audit & Supervisory Board (“A&S Board”), have prepared this audit report as the result of deliberations and the

concurrent opinion of all auditors based on the audit reports prepared by each auditor relating to the execution of duties by

directors during 2014 business year from January 1, 2014 to December 31, 2014, and hereby report as follows.

1. Method of audit conducted by auditors and the A&S Board and the details

We, the A&S Board, determined audit policies and segregation of duties for FY2014, received reports from each auditor with

respect to audit implementation status and the results thereof, received reports from Directors and Accounting Auditors with

respect to execution status of their duties and requested them to explain where necessary.

Each auditor communicated with the directors, Internal Audit Division and other employees, etc., complying with the auditor

audit standards prescribed by the A&S Board and abiding by the audit policies and sharing of duties, etc. for the term, and

endeavored to gather information and arrange an auditing environment, attended meetings of the board of directors and other

important meetings, obtained reports from directors and employees, etc. relating to the state of executing of duties, requested

explanations where necessary, examined important resolution documents, etc., and investigated the state of work and assets at

head office and key offices.

Also, we obtained regular reports from directors and employees, etc. regarding the state of construction and management of a

framework in order to ensure that the execution of duties by directors stated in business reports conforms to laws and

regulations and the Articles of Incorporation, and a framework (internal control system) prepared pursuant to the details of a

decision by the board of directors relating to the preparation of a framework prescribed in paragraphs 1 and 3 of Article 100 of

the Ordinance for Enforcement of the Companies Act and such decision, as a framework necessary in order to ensure the

appropriateness of other stock company work, and requested explanations where necessary and expressed our opinions.

We communicated with the auditors of subsidiary companies and exchanged information via meetings and debriefings

attended by auditors of the Company and subsidiary companies, obtained business reports from subsidiaries as necessary, and

visited head office and key offices and asked questions, etc.

Based on the above outlined method, we examined business reports and detailed statements relating to the business year in question.

Furthermore, we audited and verified whether Accounting Auditors had maintained their independent standpoint and had

conducted an audit in an appropriate manner, received reports from them with respect to execution status of their duties, and

requested them to explain where necessary.

Moreover, we received a notice from Accounting Auditor that the Company had designed a "system to ensure that

performance of duties in an appropriate manner" (matters provided for in each item of Article 131 of the Corporate Accounting

Rules) in accordance with the "Quality Control Standards for Audits” (Business Accounting Council, October 28th, 2005) and

requested them to explain where necessary.

Based on the above outlined method, we examined Consolidated financial statements (consolidated balance sheet,

consolidated statement of profit and loss, consolidated statement of changes to shareholder capital and consolidated notations)

and non-Consolidated financial statements (balance sheet, statement of profit and loss, statement of changes to shareholder

capital and individual notations) and detailed statements relating to the business year in question.

2. Audit Results

(1) Result of Audit of Business Reports, etc.

1) We acknowledge that the business reports and detailed statements correctly indicate the company’s situation in accordance with

laws and regulations and the Articles of Incorporation.

2) We do not acknowledge any improper acts relating to the directors’ execution of duties or any significant facts that violate laws

and regulations or the Articles of Incorporation

3) We acknowledge that the details of resolutions of the board of directors relating to the internal control system are appropriate.

Furthermore, we do not acknowledge that there are any matters to indicate regarding the details stated in business reports

relating to such internal control systems and the execution of duties by the directors.

(2) Results of Audit of Consolidated Financial Statements

We acknowledge that the method and results of the audit by Ernst & Young ShinNihon LLC are appropriate.

(3) Results of Audit of non-Consolidated Financial Statements and Detailed Statements

We acknowledge that the method and results of the audit by Ernst & Young ShinNihon LLC are appropriate.

February 13, 2015

Audit & Supervisory Board, Coca-Cola East Japan Co., Ltd.

Full-time Auditor Tomizo Nagafuchi

Full-time Auditor Yutaka Sugita

Auditor Sadao Nozaki

Auditor Kana Odawara

(Note) Full-time Auditor Tomizo Nagafuchi, Auditor Sadao Nozaki and Auditor Kana Odawara are External Auditors provided for in

Article 2-16 and Article 335-3 of the Companies Act.

Notes to Consolidated Financial Statements

(Basis for Preparation of Consolidated Financial Statements)

1. Scope of Consolidation

(1) Consolidated subsidiaries

• Number of consolidated subsidiaries: 11

• Names of principal consolidated subsidiaries: Coca-Cola Central Japan Co., Ltd.

Mikuni Coca-Cola Bottling Co., Ltd.

Tokyo Coca-Cola Bottling Co., Ltd.

Tone Coca-Cola Bottling Co., Ltd.

Coca-Cola East Japan Products Co., Ltd.

(2) Non-consolidated subsidiaries

• Name of the principal non-consolidated subsidiary: FV Corporation Co., Ltd.

• Reason for exclusion from the scope of consolidation:

The 4 non-consolidated subsidiaries are small in scale and their total assets, net sales, net income or loss

(amount corresponding to the equity interest), retained earnings (amount corresponding to the equity

interest), etc. do not have a material impact on the consolidated financial statements.

2. Application of the Equity Method

(1) Non-consolidated subsidiaries and affiliates to which the equity method is applied

• Number of non-consolidated subsidiaries and affiliates accounted for by the equity method: 3

Coca-Cola Customer Marketing Co., Ltd.

Coca-Cola Business Service Co., Ltd.

Fresh Vendor Service Co., Ltd.

(2) Non-consolidated subsidiaries and affiliates to which the equity method is not applied:

• Name of the principal company: FV Corporation Co., Ltd.

• Reason for not applying the equity method:

The 3 non-consolidated subsidiaries to which the equity method is not applied are excluded from the scope

of application of the equity method because, taking into account their net income or loss (amount

corresponding to the equity interest), retained earnings (amount corresponding to the equity interest), etc.,

their individual impact on the consolidated financial statements when excluded from the scope of equity

method is negligible and their overall significance is immaterial.

3. Fiscal Year of Consolidated Subsidiaries

The financial closing dates of consolidated subsidiaries are the same as the closing date of consolidated

accounts.

4. Accounting Standards

(1) Valuation standards and methods for significant assets

1) Securities: Available-for-sales securities

Securities with market value: Stated at market value based on the quoted market price, etc. as of

the financial closing date

(Valuation difference is reported as a component of net assets. The

cost of securities sold is calculated by the moving average method.)

Securities without market value: Stated at cost based on the moving average method

2) Inventories: Stated principally at cost based on the weighted-average method

(Balance sheet amounts are calculated by the book value write-down method based on decline in

profitability.)

(2) Depreciation method for significant depreciable assets

1) Property, plant and equipment (excluding leased assets)

Straight-line method

Principal useful lives are as follows:

Buildings: 3-50 years

Machinery and equipment: 4-17 years

Sales equipment: 4-9 years

This document is a summary translation of the Japanese language original version. In the event of any

discrepancy, errors and/or omissions, the Japanese language version shall prevail.

2) Intangible assets (excluding leased assets)


Software is amortized by the straight-line method over the internal useful life (within five years).

3) Leased assets

Leased assets relating to finance lease transactions that do not transfer ownership

Straight-line method with the lease period as the useful life and residual value as zero

4) Long-term prepaid expenses

Fully depreciated within the period

(3) Basis for recording significant allowances and provisions

1) Allowance for doubtful accounts

In order to prepare for losses from bad debts of receivables such as accounts receivable-trade,

estimated unrecoverable amounts are recorded based on the historical loan loss ratio for general

receivables and based on individual review of collectability for doubtful and other specific receivables.

2) Provision for bonuses

In order to prepare for payment of bonuses to employees, an amount corresponding to the current

portion of estimated payments for the fiscal year is recorded.

3) Provision for directors’ bonuses

In order to prepare for payment of bonuses to directors, the estimated amount payable at the fiscal year-

end is recorded.

4) Provision for directors’ retirement benefits

In order to prepare for payment of retirement benefits to directors, the required amount payable at the

fiscal year-end in accordance with the Bylaw concerning Retirement Benefits for Officers is recorded.

5) Provision for environmental measures

In order to prepare for disposal of polychlorinated biphenyl waste kept in storage, the estimated amount

accrued at the fiscal year-end is recorded.

6) Provision for loss on contract

In order to prepare for payment of system usage fees after termination of use under the contracts, the

estimated amount payable is recorded.

(4) Accounting treatment for retirement benefits

1) Method of attributing the estimated amount of retirement benefits to periods:

In calculating retirement benefit obligation, the straight-line attribution is applied to allocate the estimated

amount of retirement benefits to the periods until the end of the current fiscal year.

2) Amortization of actuarial differences, past service costs, and net retirement benefit obligation at transition

Actuarial differences are amortized by the straight-line method over a certain number of years within the

average remaining service years of employees (principally 13 years) at the time of recognition, starting in

the fiscal year following the fiscal year in which the differences are recognized.

Past service costs are amortized by the straight-line method over a certain number of years within the

average remaining service years of employees (principally 13 years) at the time of recognition, starting in

the fiscal year following the fiscal year in which the differences are recognized.

(5) Other significant matters for preparation of consolidated financial statements

Accounting treatment for consumption taxes: The tax exclusion method is applied.

(Notes to Changes in Accounting Policies)

1. Application of the Accounting Standard for Retirement Benefits and the Guidance on Accounting Standard for

Retirement Benefits

Effective from the end of FY2014, the “Accounting Standard for Retirement Benefits” (Accounting Standards

Board of Japan, “ASBJ” Statement No. 26, issued on May 17, 2012; hereinafter the “Standard”) and the

“Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25, issued on May 17, 2012;

hereinafter the “Guidance”) have been applied (excluding the provisions in Paragraph 35 of the Standard and

Paragraph 67 of the Guidance), and the accounting method has been changed according to which retirement

benefit obligations net of pension assets is recognized as net defined benefit liability. In addition, unrecognized

actuarial differences and unrecognized past service costs are recorded in net defined benefit liability.

For application of the Standard and the Guidance, the Company follows the transitional treatment stipulated

in Paragraph 37 of the Standard, and included the impact of the change in remeasurements of defined benefit

plans under accumulated other comprehensive income at the end of FY2014.

As a result, net defined benefit liability amounted to 18,689 million yen at the end of FY2014 and accumulated

other comprehensive income decreased by 3,717 million yen.

Net assets per share decreased by 30.71 yen.

2. Changes in Accounting Policies That are Difficult to Distinguish from Changes in Accounting Estimates, and

Changes in Accounting Estimates

Change in the depreciation method for property, plant and equipment and their useful lives and residual values

Previously, the former declining balance method was principally applied as the depreciation method for

property, plant and equipment. Effective from FY2014, the method has been changed to the straight-line method.

In accordance with the FY2014 business plan, the first business plan formulated following the management

integration on July 1, 2013, the Company introduced a new strategy and policy for sales equipment with the

aim of optimizing the use of sales equipment across the territories of individual bottlers. Accordingly, sales

equipment is expected to make a greater contribution to the earning of stable revenues and profits over the

long term. Regarding manufacturing equipment, the Company introduced a new supply chain strategy from

FY2014, and through integration of manufacturing subsidiaries and large-scale investment in manufacturing

equipment, production capacity was improved and the optimum production structure was established across

the territories of individual bottlers, realizing efficient and stable utilization of manufacturing equipment over the

long term. Consequently, the Company judged that allocating expenses by the straight-line method more

appropriately reflects the actual situation, and thus changed the depreciation method to the straight-line method.

Previously, useful lives of sales equipment were set to be principally 5-6 years for the purpose of depreciation.

Taking the opportunity of the change of the depreciation method, the Company reviewed the expected length

of time during which sales equipment will be used, and changed the useful life of sales equipment to 9 years

from FY2014 onward.

In addition, taking the opportunity of the change to the depreciation method for property, plant and equipment,

the Company reviewed the value of property, plant and equipment upon their retirement whose useful lives

have passed, and changed the residual value of such property, plant and equipment to memorandum value of

1 yen from FY2014, because proceeds from sales would be insignificant taking into consideration incidental

expenses upon retirement of property, plant and equipment.

As a result of these changes, operating income increased by 5,573 million yen, ordinary income increased by

6,183 million yen, and income before income taxes increased by 6,279 million yen for FY2014 compared with

figures based on the previous method.

(Notes to Consolidated Balance Sheet)

Accumulated depreciation of property, plant and equipment: 252,589 million yen

Accumulated depreciation includes accumulated impairment loss.

(Notes to Consolidated Profit and Loss Statement)

Breakdown of business structure restructuring cost is as follows:

Expenses for relocation of head office and branch offices: 253 million yen

Special retirement expenses: 1,484 million yen

Special retirement expenses for directors: 183 million yen

Cost for quality-related measures is expenses for measures relating to quality, such as self-imposed product recall,

and includes a loss on abandonment of finished goods amounting to 515 million yen and cost of recall amounting

to 127 million yen.

(Notes to Consolidated Statement of Changes in Net Assets)

1. Class and Total Number of Issued Shares

Number of shares as

of January 1, 2014

Increase in shares

in FY2014

Decrease in shares

in FY2014

Number of shares as of

December 31, 2014

Issued shares shares shares shares shares

Common stock 121,898,978 - - 121,898,978

Total 121,898,978 - - 121,898,978

2. Dividends

(1) Dividends paid

Resolution Class of shares Total dividends

(millions of yen)

Dividends per

share (yen) Record date Effective date

Annual Shareholders Meeting

held on March 28, 2014

Common

stock 1,694 14 December 31, 2013 March 31, 2014

Board of Directors Meeting held

on August 6, 2014

Common

stock 1,936 16 June 30, 2014 September 8, 2014

(2) Dividends whose record date is in FY2014 and effective date is after the end of FY2014

Resolution Class of

Shares

Source of

dividends

Total dividends

(millions of yen)

Dividends per

share (yen)

Record

date Effective date

Annual Shareholders

Meeting to be held on March

30, 2015

Common

stock

Retained

earnings 1,936 16

Decemb

er 31,

2014

March 31, 2015

3. Subscription Rights to Shares

Subscription rights to shares granted as stock options

Number of shares to be issued upon exercise of subscription rights to shares

(excluding those whose first date of the exercise period is yet to be reached) as of the end of FY2014:

104,800 shares of common stock

(Notes to Financial Instruments)

1. Status of Financial Instruments

The Group only invests in highly secure financial instruments, including short-term financial services and

deposits, for the purpose of managing extra funds and engages in no speculative transactions.

The Group raises funds principally by means of loans from banks and other financial institutions and issuance

of bonds.

Notes and accounts receivable-trade are exposed to credit risks of customers. The Group implements

management of due dates and outstanding receivables for each customer in order to identify doubtful accounts

at an early stage and mitigate bad debt risks.

Short-term and long-term investment securities consist principally of listed stocks and bonds payable and are

exposed to risks of fluctuation in market values. The Group periodically monitors market values and financial

positions of the issuing companies, most of which are companies with which the Group has transactions, and

continuously reviews the holding of these securities, taking into consideration the relationships with these

companies.

Most accounts payable-trade, accounts payable-other and accrued expenses are due within one year.

2. Market Values of Financial Instruments

Consolidated balance sheet amounts, market values and their differences as of December 31, 2014 are as

follows. The following table does not include financial instruments whose market values are extremely difficult

to estimate. (Please refer to Note 2.)

(Millions of yen)

Consolidated balance

sheet amount Market value Difference

(1) Cash and deposits 24,982 24,982 -

(2) Notes and accounts

receivable-trade 36,611 36,611 -

(3) Short-term and long-term

investment securities 8,966 8,966 -

Total assets 70,560 70,560 -

(1) Accounts payable-trade 22,944 22,944 -

(2) Short-term loans payable 16,000 16,000 -

(3) Accounts payable-other

and accrued expenses 30,003 30,003 -

(4) Bonds payable 14,000 14,030 30

Total liabilities 82,947 82,978 30

Notes:

1. Calculation method for market values of financial instruments and matters relating to securities

Assets

(1) Cash and deposits and (2) Notes and accounts receivable-trade:

These instruments are stated at their book values because their market values approximate book

values as they are settled in the short term.

(3) Short-term and long-term investment securities:

The market value of listed stocks are stated at quoted prices on stock exchanges and securities are

stated either at quoted prices on stock exchanges or presented by the relevant financial institutions.

Liabilities

(1) Accounts payable-trade, (2) Short-term loans payable, and (3) Accounts payable-other and accrued

expenses

These instruments are stated at their book values because their market values approximate book

values as they are settled in the short term.

(4) Bonds payable

The market value of bonds payable is based on the market price.

2. Financial instruments whose market values are extremely difficult to estimate

(Millions of yen)

Item Consolidated balance sheet amount

Investment securities

Unlisted stocks

2,001

Stocks of subsidiaries and affiliates 1,128

These financial instruments are not included in the table shown in “2. Market Values of Financial

Instruments” because their market prices are unavailable and it is extremely difficult to estimate their

market values.

3. Redemption estimate amount for monetary claims and securities with maturity dates subsequent to the

consolidated financial closing date

(Millions of yen)

Item Within 1 year Over 1 year

and within 5

years

Over 5 years

and within 10

years

Over 10 years

Cash and deposits 24,982 - - -

Notes and accounts

receivable-trade

36,611 - - -

Short-term and long-

term investment

securities

Other marketable

securities with maturity

dates

Debentures (bonds) 1,204 308 1,422 -

Total 62,798 308 1,422 -

4. Redemption estimate amount for bonds payable, long-term loans payable, lease obligations, and other

interest-bearing liabilities subsequent to the consolidated financial closing date

(Millions of yen)

Item Within 1

year

Over 1

year and

within 2

years

Over 2

years and

within 3

years

Over 3

years

and

within 4

years

Over 4

years

and

within 5

years

Over 5

years

Short-term loans

payable

16,000 - - - - -

Bonds payable - - 14,000 - - -

Total 16,000 - 14,000 - - -

(Notes to Real Estate including Leased Properties)

Statements are omitted as the total amount of real estate including leased properties as of the end of FY2014 is

immaterial.

(Notes to Per Share Information)

1. Net assets per share 1,764.06 yen

2. Net income per share 28.37 yen

The basis of calculation of net income per share is as follows:

Net income 3,434 million yen

Amount not attributable to shareholders of common stock - million yen

Net income pertaining to common stock 3,434 million yen

Average number of shares of common stock during period 121,047,933 shares

(Additional Information)

Conclusion of a share exchange agreement for simple share exchange with Sendai Coca-Cola Bottling Co., Ltd.

At the meeting of the Company’s Board of Directors held on December 16, 2014, it was resolved to conduct

a share exchange through which the Company will become the wholly owning parent company and Sendai Coca-

Cola Bottling Co., Ltd. will become a wholly owned subsidiary, and the Company and Sendai Coca-Cola Bottling

Co., Ltd. entered into a share exchange agreement on December 16, 2014.

For the share exchange, the Company will issue 5,781,166 shares of common stock. Following the procedure

for simple share exchange pursuant to Article 796, Paragraph 3 of the Companies Act, the share exchange is

scheduled to take effect on April 1, 2015.

Notes to Non-Consolidated Financial Statements

(Notes to Significant Accounting Policies)

1. Valuation Standards and Methods for Assets

(1) Valuation standards and methods for securities

Stocks of subsidiaries and affiliates: Stated at cost based on the moving average method

(2) Valuation standards and methods for inventories

Supplies: Stated at cost based on the moving average method

(Balance sheet amounts are calculated by the book value write-down method based on

decline in profitability.)

2. Depreciation Method for Noncurrent Assets

Property, plant and equipment (excluding leased assets)


Principal useful lives are as follows:

Buildings: 3-50 years

Machinery and equipment: 4-17 years

Intangible assets (excluding leased assets)


Software is amortized by the straight-line method over the internal useful life (within five years).

Leased assets

Leased assets relating to finance lease transactions that do not transfer ownership

Straight-line method with the lease period as the useful life and residual value as zero

3. Basis for Recording Allowances and Provisions

Provision for bonuses

In order to prepare for payment of bonuses to employees, an amount corresponding to the current

portion of estimated payments for the fiscal year is recorded.

Provision for directors’ bonuses

In order to prepare for payment of bonuses to directors, the estimated amount payable at the fiscal year-

end is recorded.

Provision for retirement benefits

In order to prepare for payment of retirement benefits to employees, the estimated amount accrued at

the fiscal year-end is recorded based on the estimated amount of retirement obligation and pension

assets at the fiscal year-end.

Actuarial differences are amortized by the straight-line method over a certain number of years within the

average remaining service years of employees (principally 13 years) at the time of recognition, starting

in the fiscal year following the fiscal year in which the differences are recognized.

Past service costs are amortized by the straight-line method over a certain number of years within the

average remaining service years of employees (principally 13 years) at the time of recognition, starting

in the fiscal year following the fiscal year in which the differences are recognized.

Provision for environmental measures

In order to prepare for disposal of polychlorinated biphenyl waste kept in storage, the estimated amount

accrued at the fiscal year-end is recorded.

4. Other Significant Matters for Preparation of Non-Consolidated Financial Statements

Accounting treatment for consumption taxes: The tax exclusion method is applied.

(Notes to Changes in Accounting Policies)

Changes in Accounting Policies That are Difficult to Distinguish from Changes in Accounting Estimates, and

Changes in Accounting Estimates

Previously, the former declining balance method was principally applied as the depreciation method for

property, plant and equipment. Effective from FY2014, the method has been changed to the straight-line method.

In accordance with the FY2014 business plan, the first business plan formulated following the management

integration on July 1, 2013, regarding manufacturing equipment, the Company introduced a new supply chain

strategy from FY2014, and through integration of manufacturing subsidiaries and large-scale investment in

manufacturing equipment, production capacity was improved and the optimum production structure was

established across the territories of individual bottlers, realizing efficient and stable utilization of manufacturing

equipment over the long term. Consequently, the Company judged that allocating expenses by the straight-line

method more appropriately reflects the actual situation, and thus changed the depreciation method to the

straight-line method.

In addition, taking the opportunity of the change to the depreciation method for property, plant and equipment,

the Company reviewed the value of property, plant and equipment upon their retirement whose useful lives

have passed, and changed the residual value of such property, plant and equipment to memorandum value of

1 yen from FY2014, because proceeds from sales would be insignificant taking into consideration incidental

expenses upon retirement of property, plant and equipment.

As a result of these changes, operating income and ordinary income both increased by 1,443 million yen, and

income before income taxes increased by 1,410 million yen for FY2014 compared with figures based on the

previous method.

(Notes to Non-Consolidated Balance Sheet)

1. Accumulated depreciation of property, plant and equipment: 46,794 million yen

Accumulated depreciation includes accumulated impairment loss.

2. Monetary receivables from and payables to affiliated companies

Short-term monetary receivables 9,138 million yen

Short-term monetary payables 44,853 million yen

Long-term monetary payables 9 million yen

(Notes to Non-Consolidated Profit and Loss Statement)

1. Transactions with Affiliated Companies

Operating revenue 34,176 million yen

Other operating transactions 260 million yen

Transactions other than operating transactions 233 million yen

2. Breakdown of Business Structure Restructuring Cost

Expenses for relocation of head office and branch offices: 263 million yen

Special retirement expenses: 29 million yen

(Notes to Non-Consolidated Statement of Changes in Net Assets)

Class and Number of Shares of Treasury Stock

Number of shares as

of January 1, 2014

Increase in shares

in FY2014

Decrease in shares

in FY2014

Number of shares as of

December 31, 2014

Treasury stock shares shares shares shares

Common stock 856,494 9,499 11,563 854,430

Total 856,494 9,499 11,563 854,430

Notes:

1. The increase in number of shares of treasury stock was due to the purchase of shares constituting

less than one trading unit.

2. The decrease in number of shares of treasury stock was due to the sale of shares upon requests for

additional purchase of shares constituting less than one trading unit and the exercise of stock options.

(Notes to Deferred Tax Accounting)

1. Breakdown of Deferred Tax Assets and Deferred Tax Liabilities by Major Causes

(1) Current assets

Deferred tax assets Accrued enterprise taxes and accrued office taxes 66 million yen Other 272 million yen

Total deferred tax assets 338 million yen

(2) Noncurrent liabilities

Deferred tax assets Provision for environmental measures 31 million yen Overdepreciation 554 million yen

Asset retirement obligations 88 million yen Impairment loss 85 million yen Other 157 million yen

Subtotal of deferred tax assets 916 million yen Valuation reserve - million yen

Total deferred tax assets 916 million yen Deferred tax liabilities Reserve for advanced depreciation of noncurrent assets (1,240) million yen Valuation difference on assets acquired by merger (1,711) million yen Other (251) million yen

Total deferred tax liabilities (3,203) million yen Net deferred tax liabilities (2,287) million yen

2. Breakdown of Major Causes for the Significant Difference between the Effective Statutory Tax Rate and the

Actual Imposed Tax Rate of Income Taxes after Application of Deferred Tax Accounting

Effective statutory tax rate 38.0%

(Adjustment) Permanent differences-income (dividend income etc.) (33.9)

Permanent differences-expenses (entertainment expenses etc.) 1.2

Inhabitant tax on per capita basis 0.5

Effect from change in tax rate 0.9

Other 0.1

Actual imposed tax rate after application of deferred tax accounting 6.8%

(Notes to Transactions with Related Parties)

1. Subsidiaries and Affiliates

Affiliation Name of

Company

Ownership of

voting rights (Owned)

Business

Relationship

Transaction

Transactio

n amount

(millions of

yen)

Account

Closing

balance (millions of

yen)

Concurrent

duties In Business

Subsidiary Coca-Cola Central

Japan Co., Ltd.

100% directly

owned by the

Company

Beverage

business 2

persons

Management

and

administration

Management fee

(Note 1) 8,039

Account

receivable-

trade

781

Rent income of

real estate

(Note 3)

3,501 Accounts

receivable-

trade

12

Deposit of funds

(Note 2) 7,391 Deposit 9,590

Subsidiary Mikuni Coca-Cola

Bottling Co., Ltd.

100% directly

owned by the

Company

Beverage

business 1

person

Management

and

administration

Management

fee (Note 1) 5,145

Account

receivable-

trade

500

Deposit of funds

(Note 2) 5,954 Deposit 19,094

Subsidiary Tokyo Coca-Cola

Bottling Co., Ltd.

100% directly

owned by the

Company

Beverage

business 2

persons

Management

and

administration

Management fee

(Note 1) 5,865

Account

receivable-

trade

570

Deposit of funds

(Note 2) 4,586 Deposit 2,813

Subsidiary Tone Coca-Cola

Bottling Co., Ltd.

100% directly

owned by the

Company

Beverage

business 1

person

Management

and

administration

Management fee

(Note 1) 4,859

Account

receivable-

trade

472

Receipt of

dividends (Note

4)

40,000 - -

Returning of

funds deposited

(Note 2)

7,486 - -

Provision of

loans (Note 2) 30,281

Short-term

loans

receivable

from

subsidiaries

and

associates

30,281

Receipt of

interest

(Note 2)

37 - -

Subsidiary Coca-Cola East

Japan Products

Co., Ltd.

100% directly

owned by the

Company

Beverage

business -

Management

and

administration

Provision of

loans (Note 2) 17,049

Short-term

loans

receivable

from

subsidiaries

and

associates

56,830

Receipt of

interest

(Note 2)

185 - -

In the above table, transaction amounts do not include consumption taxes and closing balances include

consumption taxes.

Transaction terms and the policy for determining transaction terms Notes:

1. Management fees are determined, taking into consideration expenses relating to management

and administration of Group companies.

2. The Company utilizes the Cash Management System (CMS) for efficient management of the

Group’s funds. Interest rates on deposits and loans of funds are determined reasonably based

on the market interest rates. Transaction amounts are presented in net amounts.

3. Rents are determined through individual negotiation, taking into consideration market prices.

4. The amount of dividend is determined through individual negotiation within the amount of retained

earnings.

(Notes to Per Share Information)

1. Net assets per share 1,716.61 yen

2. Net income per share 58.30 yen

The basis of calculation of net income per share is as follows:

Net income 7,057 million yen

Amount not attributable to shareholders of common stock - million yen

Net income pertaining to common stock 7,057 million yen

Average number of shares of common stock during period 121,047,933 shares

(Notes to Significant Subsequent Events)

Merger between the Company and consolidated subsidiaries

In accordance with the resolutions by the Company’s Board of Directors made at their meetings held on

May 12, 2014 and November 6, 2014, the Company merged its 4 wholly owned subsidiaries: Coca-Cola

Central Japan Co., Ltd., Mikuni Coca-Cola Bottling Co., Ltd., Tokyo Coca-Cola Bottling Co., Ltd., and Tone

Coca-Cola Bottling Co., Ltd. (hereinafter referred to as “the four subsidiaries”) by means of absorption-type

merger on January 1, 2015.

(1) Summary of business combination

1) Names of companies involved in the combination and their business

i) Company name: Coca-Cola Central Japan Co., Ltd.

Business: Manufacturing and sales of beverages

ii) Company name: Mikuni Coca-Cola Bottling Co., Ltd.


iii) Company name: Tokyo Coca-Cola Bottling Co., Ltd.


iv) Company name: Tone Coca-Cola Bottling Co., Ltd.


2) Date of business combination: January 1, 2015

3) Legal form of business combination

Absorption-type merger where the Company is the surviving company and the four subsidiaries were

dissolved and ceased to exist.

4) Name of the Company after business combination

Coca-Cola East Japan Co., Ltd.

5) Summary of the transaction including its purpose

Absorption-type merger of the four subsidiaries into the Company was carried out to integrate commercial

functions and corporate functions for the purpose of accelerating efficient business management through

integrated management of the Group.

(2) Summary of accounting treatment

The merger was treated as a transaction under common control in accordance with the “Accounting

Standard for Business Combinations” (ASBJ Statement No. 21, issued on December 26, 2008) and the

“Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business

Divestitures (ASBJ Guidance No. 10 issued on December 26, 2008)

(Additional Information)

Conclusion of a share exchange agreement for simple share exchange with Sendai Coca-Cola Bottling Co., Ltd.

At the meeting of the Company’s Board of Directors held on December 16, 2014, it was resolved to conduct

a share exchange through which the Company will become the wholly owning parent company and Sendai Coca-

Cola Bottling Co., Ltd. will become a wholly owned subsidiary, and the Company and Sendai Coca-Cola Bottling

Co., Ltd. entered into a share exchange agreement on December 16, 2014.

For the share exchange, the Company will issue 5,781,166 shares of common stock. Following the procedure

for simple share exchange pursuant to Article 796, Paragraph 3 of the Companies Act, the share exchange is

scheduled to take effect on April 1, 2015.