Issue of Annual Report 2010

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Year ended December 31, 2009 Location Use Classification Millions of yen Sapporo Breweries Ltd. Real estate for lease Land ¥117 (Urayasu-shi, Chiba and other) Buildings 278 Other 4 ¥399 Sapporo Lion Ltd. Restaurants Buildings ¥461 Restaurants for business (Minato-ku, Tokyo and other) for operations Machinery 41 Other 25 ¥527 ¥926 The Company and the consolidated subsidiaries decided the asset group in consideration of the division in management accounting. The idle estate and the real estate for lease are grouped with each estate, and the restaurants are mainly grouped with each store. Real estate for leasing has been written down to the recoverable amount as it is expected to be difficult to recover the investment due to declining profitability. An impairment loss has been booked for the amount of the write-down. For restaurants for operations, the amount by which the carrying amount of these assets exceeds the expected present value of these assets is recognized as an impairment loss because the carrying amount of these assets may not be recoverable due to a weak performance in profitability. The recoverable amount is measured by the value in use. The value in use is based on future cash flows discounted by 8.2%. Year ended December 31, 2008 Location Use Classification Millions of yen Sapporo Beverage Co., Ltd. (Shibuya-ku, Tokyo) Property for Soft Drink business Buildings ¥ 23 Lease 968 Other 259 ¥1,250 Sapporo Lion Ltd. Restaurants Buildings ¥ 283 Restaurants for business (Chitose-shi, Hokkaido and other) for operations Machinery 19 Other 17 ¥ 320 Yebisu Garden Place Co., Ltd. Real estate for lease Buildings ¥ 17 Sapporo Factory (Sapporo-shi, Hokkaido) ¥ 17 SLEEMAN BREWERIES LTD. Other Goodwill ¥6,620 (Ontario, Canada) and other ¥6,620 ¥8,207 It is expected to be difficult to recover the investment in property for the soft drinks business due to declining profitability. These assets have therefore been written down to their recoverable amount and an impairment loss booked for the amount equivalent to the write-down. For restaurants for operations, the amount by which the carrying amount of these assets exceeds the expected present value of these assets is recognized as an impairment loss because the carrying amount of these assets may not be recoverable due to a weak performance in profitability. A recoverable amount has been calculated for Sapporo Factory due to the planned transfer of this asset to a subsidiary. An impairment loss has been booked for the amount expected to be difficult to recover. The recoverable amount is measured by the net selling price and the value in use. The net selling price is based on the estimated value by the trust bank and the value in use is based on the future cash flows discounted by 5.7%. The Company and the consolidated subsidiaries have booked an impairment loss on goodwill of SLEEMAN BREWERIES LTD. This follows a reappraisal of the corporate value of SLEEMAN BREWERIES LTD., which conducts business in North America, following higher equity risk premiums in the wake of the ongoing financial market turmoil since the second half of 2008. The recoverable amount for SLEEMAN BREWERIES LTD. was measured through a due diligence analysis of assets based on the reappraised corporate value. SAPPORO HOLDINGS LIMITED 42 Annual Report 2010
6. Shareholders’ Equity Retained earnings include a legal reserve provided in accordance with the provisions of the Commercial Code. This reserve is not available for the payment of dividends, but it may be used to reduce or eliminate a deficit by resolution of the shareholders or may be transferred to common stock by resolution of the Board of Directors. 7. Other Income (Expenses) “Other income (expenses)—Other, net” for each of the three years in the period ended December 31, 2010 consisted of the following: Millions of yen Thousands of U.S. dollars (Note 1) 2010 2009 2008 2010 Gain on gift voucher redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 677 ¥ 532 ¥ – $ 8,316 Equity in income of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 611 276 – 7,501 Loss on disposal of inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – (1,103) – Equity in loss of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – (1) – Gain on sales of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . 16,576 948 25,893 203,532 Gain on sales of investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 645 20 21 7,917 Reversal of provision for doubtful receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 – 11 758 Reversal of removal costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 569 – – 6,987 Compensation income from store closures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – 111 – Loss on disposal of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . (1,724) (1,524) (5,836) (21,163) Loss on sales of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . (8,410) – – (103,261) Loss on impairment of property, plant and equipment. . . . . . . . . . . . . . . . . . . . (2,375) (926) (8,207) (29,157) Devaluation of marketable securities and investments . . . . . . . . . . . . . . . . . . . (1,246) (244) (747) (15,294) Provision for gift voucher redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – (747) – Loss on revision of retirement benefit plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – (1,307) – Early retirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – (305) – Business reorganization costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (664) – (1,444) (8,157) Loss on devaluation of inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – (125) – – Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 (291) (306) 2,777 ¥ 4,948 ¥(1,334) ¥ 6,033 $ 60,755 8. Contingent Liabilities Contingent liabilities at December 31, 2010 and 2009 are summarized as follows: Millions of yen Thousands of U.S. dollars (Note 1) 2010 2009 2010 Guarantee of loans, principally loans for employees’ housing . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,069 ¥1,164 $13,130 SAPPORO HOLDINGS LIMITED Annual Report 2010 43
Page 1 and 2: Our Growth Sapporo Holdings Limited
Page 3 and 4: Sapporo Group Management Plan 2011-
Page 5 and 6: Overseas deployment Vietnam SAPPORO
Page 7 and 8: Net Sales (¥ Million) Operating In
Page 9 and 10: I’d like to take this opportunity
Page 11 and 12: Summary of Management Plan 2010-201
Page 13 and 14: Business Expansion in Soft Drinks a
Page 15 and 16: Question 6 Please describe some of
Page 17 and 18: With growth continuing at around 10
Page 19 and 20: In March 2011 Sapporo Holdings acqu
Page 21 and 22: Management Plan 2011-2012 Managemen
Page 23 and 24: Management Plan 2011-2012 Managemen
Page 25 and 26: Performance Review and Plan Restaur
Page 27 and 28: Corporate Governance Basic Governan
Page 29 and 30: Compliance The Group has set out th
Page 31 and 32: 6 7 8 9 10 Board of Corporate Audit
Page 33 and 34: Management’s Discussion and Analy
Page 35 and 36: Return on equity (ROE) increased fr
Page 37 and 38: Millions of yen Thousands of U.S. d
Page 39 and 40: Consolidated Statements of Sharehol
Page 41 and 42: Notes to Consolidated Financial Sta
Page 43 and 44: (n) Foreign currency translation Al
Page 45: 4. Inventories Inventories at Decem
Page 49 and 50: (b) Operating leases Future minimum
Page 51 and 52: a) Methods for Determining Market V
Page 53 and 54: (d) The realized gain and loss on s
Page 55 and 56: The assets pledged as collateral fo
Page 57 and 58: The significant components of defer
Page 59 and 60: Year ended or as of December 31, 20
Page 61 and 62: Corporate Data (As of December 31,

Issue of Annual Report 2010

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