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Kirin Brewery Co. (KRN)

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Thursday 12 May, 2005

Kirin Brewery Co.

1st Quarter Results

Kirin Brewery Co Ld
12 May 2005


KIRIN BREWERY COMPANY, LIMITED                                                                          May 11, 2005
SUMMARY OF CONSOLIDATED FINANCIAL RESULTS FOR THE FIRST QUARTER
ENDED MARCH 31, 2005 (UNAUDITED)
(English Translation)
Fiscal year ending December 31, 2005

KIRIN BREWERY COMPANY, LIMITED
10-1, Shinkawa 2-chome, Chuo-ku, Tokyo, Japan (URL http://www.kirin.co.jp/english/)

                 Code No.:                                     2503
                 Shares Listed:                                Tokyo, Osaka, Nagoya, Fukuoka, Sapporo
                 Representative:                               Mr. Koichiro Aramaki, President
                 For further information, please contact:      Mr. Kensuke Suzuki, General Manager,
                                                               Corporate Communications & IR Group,
                                                               CSR & Corporate Communications Division
                                                               Telephone: 81- 3- 5540- 3450 from overseas

1.   Items pertaining to preparation of quarterly consolidated statements of income, etc.
     Application of US GAAP : None
     Adoption of simple methods in accounting policies: Yes
         The estimated effective tax rate is applied for the computation of income taxes
     Change in accounting policies: Yes
         Adoption of the new accounting standard, 'The partial revision of the accounting standard for pension and
         retirement benefits'
     Changes in scope of consolidation and application of equity method:
         Consolidation: Increase 2 companies            Decrease 3 companies
         Equity method: Increase 1 company

2.   Business results and financial positions for the first quarter of 2005
     (January 1, 2005 - March 31, 2005)
                                                          (Unit: Japanese yen (yen))
(1)Results of operations:                                 (Fractions less than 1 million yen have been omitted.)
                                   Sales       Percentage     Operating     Percentage     Operating     Percentage
                                   (yen          change        income         change        income         change
                                 millions)        (%)           (yen           (%)           (yen           (%)
                                                                millions)                    millions)

First quarter ended March        311,431       (4.6)          4,413         (69.7)         5,115         (61.1)
31,2005
First quarter ended March        326,496       3.6            14,583        46.2           13,156        54.4
31,2004
Year ended December 31, 2004     1,654,886                    109,392                      106,562

                                    Net income     Percentage   Net income per Net income per
                                       (yen          change         share          share
                                     millions)        (%)         (primary)      (diluted)
                                                                    (yen)          (yen)

First quarter ended March 31,2005    987           (72.3)         1.03           -
First quarter ended March 31,2004    3,564         341.3          3.69           -
Year ended December 31, 2004         49,099                       50.58          -

Notes:    Percentage change means the ratio of increase or decrease in each item of business results for the first
          quarter ended March 31, 2005, to those for the first quarter ended March 31, 2004.

(2)Financial positions:
                                                Total assets      Shareholders'        Ratio of        Shareholders'
                                               (yen millions)        equity         shareholders'    equity per share
                                                                 (yen millions)    equity to total         (yen)
                                                                                        assets
                                                                                         (%)
March 31, 2005                                 1,714,683         847,380           49.4               885.67
March 31, 2004                                 1,732,960         818,687           47.2               847.54
December 31, 2004                              1,823,790         858,615           47.1               888.65


(3)Cash flows:
                                                Cash flows        Cash flows        Cash flows       Cash and
                                                from operating    from investing    from financing   cash equivalents
                                                activities        activities        activities       at end of period
                                                (yen millions)    (yen millions)    (yen millions)   (yen millions)

First quarter ended March 31,2005              (30,295)          (36,616)          3,737             114,501
First quarter ended March 31,2004              (15,121)          (15,988)          16,804            115,755
Year ended December 31, 2004                   127,963           (44,252)          (35,901)          177,257

3.   Forecast of business results for the current fiscal year (January 1, 2005-December 31, 2005)

                                                    Sales             Ordinary           Net income
                                               (yen millions)          income          (yen millions)
                                                                   (yen millions)

6 months ending June 30,2005                    780,000             39,000              12,000
Year ending December 31, 2005                   1,695,000           112,000             50,000

(Reference)  Forecasted net income per share (Year ending December 31,2005)         51.51 yen
             Forecasted operating income (6 months ending June 30,2005)             38,000 millions yen
             Forecasted operating income (Year ending December 31,2005)             111,000 millions yen
(Note)       Forecast of business results stated above has not been changed from the forecast disclosed on February 18,
             2005.


4.CONSOLIDATED RESULTS FOR THE FIRST QUARTER OF 2005

Consolidated sales for the first quarter of the fiscal year ending December 31,
2005 were 311.4 billion yen, 4.6% lower than in the previous comparable period.
Consolidated operating income for the quarter was 4.4 billion yen, 69.7% lower
than the previous first quarter period, consolidated ordinary income decreased
61.1% to yen5.1 billion, and consolidated net income decreased 72.3% to yen0.9
billion.

Alcohol Beverages Business

In our domestic alcohol beverages business, which forms the core of the Group's
operations, we continued activities to strengthen our competitiveness in the
rapidly changing market while focusing on boosting the value of the Kirin brand
by providing high added-value products and proposals.

In beer, the category with the strongest impact on the value of the Kirin brand,
a number of initiatives were undertaken. We continued to support sales of Kirin
Ichiban Shibori-which last year had higher year-on-year sales volumes for the
first time in ten years-through measures such as our food-based marketing
campaign, helping the high-quality positioning of the product. In the high
added-value chilled beer market, pioneered in Japan by Kirin, we took steps to
further develop this market with the renewal of Maroyaka Kobo in March, as part
of a product line up that includes White Ale and Hojun, which were released last
year.

In happo-shu, a category that has become central in the household evening
consumption market, we sought to reinforce the market leading position of the
Tanrei brand by renewing the taste and packaging of the Tanrei series Tanrei
Nama, Tanrei Green Label and Tanrei Alpha, supported by a large advertising and
sampling campaign.

We have taken a number of initiatives to boost Kirin's dominance in the chu-hi
market, including expansion of our unique product lineup with the launch in
March of a new flavor Hyoketsu Lychee, and the introduction of six-pack sales of
our lemon and grapefruit flavors for the convenience of bulk buying customers.

With shochu we sought to reinforce the market position of Kirin Mugi Shochu Pure
Blue. In wines and spirits we focused on strengthening our core wine brands such
as Franzia, the world's biggest selling wine brand1 and Cafe de Paris.

In sales and marketing we were closely engaged in following up on the
introduction of open pricing in January 2005, a move aimed at strengthening the
industry and improving services to customers. Our subsidiary Kirin Communication
Stage Co., Ltd, which handles product merchandizing in volume retailers, has
from January 2005 also assumed responsibility for quality control at commercial
premises nationwide, adding to Kirin Group's sales and proposal strengths.

In our overseas alcohol business, which we are pursuing mainly in Asia and
Oceania with particular emphasis on China, initiatives have included the
commencement of operations of Kirin (China) Investment Co., Ltd. to oversee
business development in China, and the launch of Kirin Chun Zhen Wei beer by
Zhuhai Kirin President Brewery Co., Ltd. using a first wort brewing method.
Additionally, we further invested in SAN MIGUEL CORPORATION, strengthening the
basis for Group synergies.

Sales in the alcohol beverages business decreased 8.9% to yen188.7 billion
compared with the same period of the previous year, and operating income
decreased 74.2% to yen2.0 billion.

1 Largest sales volume for a single brand, according to IMPACT DATA BANK 2004
EDITION

Soft Drinks Business

In the soft drinks business, Kirin Group's core soft drink business Kirin
Beverage Corporation worked to expand its operational arena and boost sales
through growing core brands and adapting sales strategies to each region and
type of outlet. Core brand Nama-cha underwent a comprehensive renewal in March
2005, supported by efforts across the company to capture a greater share of the
green tea market. Other core Kirin brands such as Kirin Fire Gold Rush and Kirin
Amino Supli also had their brand images refreshed. In the growing mineral water
market we focused on strengthening the brand value of Aklali-Ion-no-Mizu and
Volvic.

In manufacturing, we pursued further Group synergies with the start of soft
drinks production in the Shiga plant in February 2005.

In overseas soft drinks operations Kirin has continued to develop new proposals
in response to the growing diversification of consumer tastes in China, through
initiatives such as the simultaneous launch in Japan and China of Kirin Shanghai
Reicha (sold in China as Hua jan qing yuan).

Sales in the soft drinks business reached yen73.4 billion, 1.1% higher than the
previous first quarter period, while operating income decreased 81.6% to yen0.5
billion.

Pharmaceuticals Business

Preparations have been completed for Kirin to commence full in-house sales of
core products ESPO, a treatment for renal anemia, and GRAN, an agent used for
leukocytopenia, following the end of a sales contract with Sankyo Co., Ltd. In
March we established Kirin Pharmaceuticals Singapore Pte., Ltd. in Singapore, as
a step in the creation of a business base for full-scale entry into the ASEAN
market.

In R&D we have continued development of KRN321, a new-generation medicine for
renal anemia, and KRN1493, a treatment for secondary hyperparathyroidism.

Sales in the pharmaceuticals business reached yen12.5 billion, 2.2% lower than
the same period of the previous year, while operating income decreased 29.9% to
yen1.6 billion.

Other Businesses

In the agribio business, we moved to strengthen our flower operations in China
through a tie-up in March 2005 with the agriculture and biology school of
Shanghai Jiao Tong University. Additionally, Flower Season Co., Ltd, whose
products carry the name of the area and grower as part of their brand,
introduced a Sakurajima Chrysanthemum from Kagoshima that brings the product
line up to 12.

In nutrient foods, Kirin strengthened sales through KW Lactobacillus, a product
jointly developed by Kirin and Koiwai Dairy Products Co., Ltd., and
commercialized by group companies (for example under the Kirin Noale brand of
Kirin Well-Foods Co., Ltd.).

In foods, the chilled products operations of Kirin Beverage Corporation have
been merged with those of Koiwai Dairy Products with the aim of strengthening
operating efficiencies and increasing the sales base.

Sales in other businesses reached yen36.7 billion, 8.7% higher than the previous
first quarter period, while operating income decreased 72.2% to yen0.4 billion.

5.INFLUENCE OF SEASONAL FACTORS

Sales of Kirin Group's core alcohol beverages and soft drinks are subject to
significant change with the seasons, as demand peaks in summer. Sales in the
first quarter therefore tend to be lower than in other periods of the year.

6. CORPORATE GOVERNANCE STATUS

Fundamental Policies Concerning Corporate Governance

Kirin has positioned corporate governance as a key management priority. To this
end, Kirin has undertaken a comprehensive reorganization of its management
structure and implemented a series of initiatives. In April 2003, Kirin
streamlined the structure of its Board of Directors, and established the
Compensation Advisory Committee and the Appointment Advisory Committee. At the
same time Kirin set up an advisory board, introduced an executive officer system
and undertook a major review of the company's meetings structure and management
framework. Under this new governance structure, Kirin is working to ensure
increased transparency and efficiency in corporate management.

Implementation of corporate governance policies

  • (1)Corporate governance structure-decision-making, executive, oversight
    and administrative functions
      • (1)Corporate Structure

          • Kirin has adopted an auditor system

          • The Company's Board of Directors is comprised of 10 directors,
            including two external directors. Kirin maintains four auditors,
            including two external auditors

          • While the Company has adopted an auditor system, the Compensation
            Advisory Committee and the Appointment Advisory Committee have been
            established to deliberate matters relating to compensation and the
            appointment of directors, auditors and executive officers.

            The Compensation Advisory Committee comprises the president, an
            external director and two other directors. The committee serves in
            an advisory capacity to the Board of Directors and reports to the
            Board in connection with the compensation of directors, auditors and
            executive officers on an objective and fair basis giving due
            consideration to the business environment, the Company's
            performance, appropriate compensation standards and individual
            performance.

            The Appointment Advisory Committee is comprised of the president, an
            external director and two other directors. The committee serves in
            an advisory capacity to the Board of Directors and provides to the
            Board a list of candidates for directors, auditors and executive
            officers. In addition, Kirin has established an Advisory Board,
            which reports to and supports the Board of Directors. The purpose
            and function of the Advisory Board is to garner the objective views
            and suggestions of a panel of diverse experts concerning major
            issues that confront the Company, with the aim of securing greater
            management transparency and quality. The Advisory Board is composed
            of four members: Hiroyuki Itami (Professor, Graduate School of
            Commerce and Management, Hitotsubashi University), Eiko Oya
            (critic), Akira Gemma (Advisor, Shiseido Co., Ltd.), Takeyoshi Takei
            (editorialist of Nihon Keizai Shimbun advisory committee).

          • Full-time staff are not provided to external directors. Together
            with internal directors, external directors are supported by the
            Secretary Section of the General Affairs Dept. Full-time staff are
            not provided to external auditors. Together with internal auditors,
            external auditors are supported by advisory staff to auditors.

          • Kirin introduced an executive officer system with the aim of
            promoting increased flexibility in the operating function. Of the
            Company's 10 directors, eight hold the position of executive officer
            concurrently. The number of executive officers total 35 and is made
            up of the president, executive vice president, 12 managing executive
            officers and 21 executive officers.

        The Domestic Alcohol Strategy Committee and the Management Strategy
        Committee are set as meeting bodies to deliberate important matters
        relating to the operating function. The Domestic Alcohol Strategy
        Committee deliberates on important matters relating to the domestic
        alcohol beverages business, and the Management Strategy Committee
        deliberates on important matters other than the domestic alcohol
        beverages business and matters relating to Group Headquarters
        operations. Both committees support the decision-making function of the
        president.

          • The Board of Directors and the Board of Auditors oversee and audit
            the operating function. The Board of Directors makes decisions on
            important matters relating to the operating function and legal
            compliance, as well as oversees the operating function. The Board of
            Auditors formulates auditing policies and the role of each auditor.
            Guided by these policies, each auditor attends and audits the
            activities of directors in meetings of the Board of Directors and
            other meeting bodies such as the Domestic Alcohol Strategy Committee
            and the Management Strategy Committee.

      • (2)Internal Control Systems

          • Kirin's Managerial Audit Division fulfills an internal audit
            function. The division audits the operations of the Company to
            ensure they remain relevant and are performed in an efficient manner
            in accordance with annual audit guidelines and plans.

      • (3)Risk Management Structure

          • Kirin formulates risk management rules with the aim of reducing
            risk and minimizing the impact on its business and on society of any
            negative consequences arising from risks that eventuate into
            reality. Kirin has also established the Risk Management Committee to
            oversee matters relating to risk management (chaired by a managing
            director/managing executive officer). The Risk Management Committee,
            as well as identifying important risks, is also implementing the
            regular monitoring of risks in each division.
            Each division of Kirin is committed to taking the responsibility to
            implement measures that reinforce compliance and continually review
            and improve risk prevention policies. Furthermore, Kirin formulates
            compliance guidelines and these are provided to all staff as part of
            efforts to thoroughly diffuse compliant standards of behavior.
            Internal and external hotlines have been created allowing employees
            to report with a guarantee of anonymity.

  • (2)Transactions with related parties

    External director Kenjiro Hata is a senior corporate advisor to Meiji Yasuda
    Life Insurance Company. External director Satoru Kishi is an advisor to The
    Bank of Tokyo-Mitsubishi, Ltd. External auditor Toyoshi Nakano is a senior
    corporate advisor to The Mitsubishi Trust and Banking Corporation. External
    auditor Teruo Ozaki is a certified public accountant.

    Kirin conducts financial transactions with Meiji Yasuda Life Insurance
    Company, The Bank of Tokyo-Mitsubishi, Ltd. and The Mitsubishi Trust and
    Banking Corporation. All of these transactions are routine and present no
    conflicts of interest for external directors or auditors as individuals.

  • (3) Efforts to Enhance Corporate Governance for the period April 2004 to
    March 2005

     1. Board of Directors and Board of Auditors Meetings and Attendance
        The Board of Directors meets regularly twice a month and irregularly as
        necessary. The Board of Directors met 28 times during the 12 months to
        the end of March 2005, with a 73% attendance rate by external directors.
        The Board of Auditors meets once a month. In the 12 months to the end of
        March 2005 the Board of Auditors convened twelve times with a 100%
        attendance rate by external auditors.

     2. Committee Meetings and Attendance
        The Compensation Advisory Committee met three times in the past twelve
        months, with 92% attendance at each meeting.
        The Appointment Advisory Committee met twice in the past twelve months,
        with 100% attendance at each meeting

     3. Advisory Board Meetings and Attendance
        The Advisory Board met twice in the past twelve months, with 100%
        attendance at each meeting.

     4. Other
        During fiscal 2004 no new committees were established and no changes
        were made to the framework of business execution, business oversight,
        internal control or risk management.




7. CORPORATE SOCIAL RESPONSIBILITY MEASURES

Kirin aims for the continued trust of society by making efforts to promote
compliance, responsible drinking, and coexistence with the global environment.
Kirin also examines its corporate activities to find a unique way to coexist
with society. In March 2005 Kirin moved to strengthen its approach to CSR by
establishing a CSR & Corporate Communication Division, responsible for the
overall Groupwide pursuit and unification of CSR activities and communications
with all stakeholders. A CSR Management Group was established within this
division, with responsibility for establishing and overseeing basic CSR
strategy. Planning is also underway for the establishment of a Group CSR
Committee, comprising members of the CSR & Corporate Communication Division,
other related divisions, and Group companies. The aim of this committee will be
to facilitate the introduction of CSR strategies devised by the CSR Management
Group into individual Group companies.

With regard to environmental measures, Kirin packages Kirin Lager, Kirin Classic
Lager and other products in aTULC aluminum cans, which use fewer resources.
Kirin is also taking steps to minimize even relatively small areas of potential
waste in the marketing of beer and happo-shu, by encouraging outlets to continue
both single can and six-pack sales. The Company is also expanding its
initiatives nationwide to sustain water resources, and has recently formed a
Biwa Lake Forestry Partnership in Shiga Prefecture. Amongst other activities,
the Company's Standard of Corporate Behavior has been revised, compliance
guidelines have been distributed to all employees, and the Company intranet has
been used for employee training. In terms of food safety, Kirin continues to
improve its quality management system.

Kirin also promotes interaction with local communities, primarily those near its
plants, and continues to support sports activities through its sponsorship of
Japan's national soccer team and Olympic national teams. As part of its support
for the 'culture of beer,' Kirin is following its research into recreating the
beer of ancient Egypt with research into that from medieval gruit beer.

8. BUSINESS RISKS

Outlined below are the main risks faced by Kirin in its business activities that
have been identified as having the potential to have a significant impact on the
decisions of investors. Information is also presented with regard to matters
that are not necessarily risk factors, with the aim of ensuring active
disclosure of information to investors. Based on an awareness and understanding
of these risks, Kirin takes measures to prevent and reduce risks, and to respond
appropriately in the case that any such risks eventuate, as outlined in section
6 (1), (3) above.

The risk items outlined below are those identified by the Company as of March
31, 2005.

(1) Domestic markets and economic trends

Most of Kirin Group's Alcohol Beverages division operates in Japan. This
business could therefore be significantly affected by domestic economic
conditions and consumer trends with regard to alcohol beverages.
Furthermore, the declining birth rate and aging population profile in Japan
could lead to a weakening of the alcohol beverages and soft drinks markets.

(2) Increased taxes on alcoholic beverages

Alcohol consumption in Japan could decline if increased taxes on alcohol
beverages resulted in higher prices.

(3) Changes in regulatory environment regarding alcohol beverages

In order for the Kirin Group to fulfill its social responsibility as a
manufacturer and vendor of alcohol products, advertising and publicity is
conducted in accordance with strict voluntary standards. However, international
standards in respect of the sale of alcohol products are under consideration by
groups such as the World Health Organization. In the long term Kirin faces the
risk that sales of alcohol beverages could decline if guidelines were
implemented that were significantly stricter than currently envisaged.

(4) Risk in the pharmaceutical business

The pharmaceutical industry has in recent years undergone considerable
restructuring through alliances and mergers. This restructuring, along with the
decline in relative scale of the Group's pharmaceutical businesses, could
negatively impact our performance in the pharmaceutical business. Revisions to
laws, and stricter regulations, could also be disadvantageous to Kirin. The
potential occurrence of unforeseen side effects from our Company's
pharmaceutical products poses a further risk to our business.

(5) Risk in overseas businesses


The Kirin Group has overseas operations focusing on Asia and Oceania. Risks
associated with these operations include those outlined below. We take measures
to ameliorate these risks but these risks may affect our business to a greater
extent than we forecast.

  • Revisions to tax systems and laws and stricter regulations that have an
    adverse effect on our company
  • Occurrence of unforeseeable political, economic or social events
  • Political or social factors such as the outbreak of war or terrorist
    activity, SARS or avian influenza epidemics
  • Earthquakes and other natural disasters
  • Currency fluctuations outside the forecast range

(6) Weather and natural disasters

Kirin Group's alcohol beverages or soft drinks businesses may be adversely
affected by weather patterns such as unusually cold summers or extensive
typhoons. Furthermore, earthquakes and natural disasters on a large scale could
damage facilities, resulting in production levels falling short of requirements.

(7) Food safety

Kirin Group is continually strengthening its strict food quality management
system. The entire Group is cooperating in the implementation of quality tests
in order to offer customers 'safety in food'. However, in recent years, BSE and
avian influenza epidemics have threatened food safety. If quality control
problems occur that are beyond the scope of our anticipatory measures, Kirin's
financial position and business performance could be adversely affected.

(8) Accidents at outsourced manufacturers

Some of Kirin Group's products are produced by external manufacturers, and some
products are imported. The quality of such goods is expected to be uniformly
high, but the risk remains that our business could be adversely affected by
quality problems at outside manufacturers or from imported goods.

(9) Environmental issues

Kirin Group currently complies with all laws regarding waste disposal and
sanitation, and is thoroughly involved in manifesto management. Kirin also
strictly complies with various environment laws concerning the atmosphere, water
quality, noise pollution, vibrations, soil contamination and land subsidence,
and other matters relating to industrial waste. However, revisions to relevant
laws and regulations may necessitate additional capital expenditure, raising
costs and negatively impacting Kirin's financial situation and business
performance.

(10) Information leaks

Kirin Group has formulated information security policies, is implementing
internal training programs and is making every effort to protect data on
individuals. However, risks such as those from hacking and document
falsification remain. Furthermore, computer viruses could temporarily damage the
company's computer systems, adversely impacting Kirin's financial position and
business performance.

(11) Effects of legal restrictions

When carrying out our business the Kirin Group abides by domestic liquor tax
laws, food sanitation laws and drug legislation. Furthermore, in each country in
which the Group is present we comply with local laws. If such laws change, or if
new, unforeseen laws or regulations are introduced, Group activities may be
curtailed, adversely impacting Kirin's financial position and business
performance.

(12) Litigation risks

Kirin Group has an internal business control structure and is putting efforts
into strengthening compliance management as part of measures to ensure that
Kirin Group does not violate statutes and regulations when carrying out its
business. However, in the course of our business in Japan and overseas, there is
a possibility that litigation will be brought against the Group or its employees
for real or supposed infringements of product liability, intellectual property
or other laws. Either directly as a result of legal proceedings or as the result
of the loss of trust from customers resulting from such proceedings there is a
risk that Kirin's financial situation and business performance could be
negatively affected.

(13) Increase in the price of raw materials

Some of the main raw materials that Kirin Group uses are liable to changes in
price depending on market conditions. Based on increases in the price of raw
materials, manufacturing costs may also rise, adversely impacting Kirin's
financial position and business performance.

(14) Changes in value of assets

Kirin's financial position and business performance could be adversely affected
if the value of land, negotiable securities or other assets decreased
significantly in value.

(15) Retirement liabilities

Liabilities and expenses for employees' retirement are calculated on an
actuarial basis based on certain assumptions including discount rates and
expected returns on pension assets. Actual outcomes could differ from these
assumptions or these assumptions could change, adversely impacting Kirin's
financial position and business performance.

CONSOLIDATED BALANCE SHEETS
                                                                  (yen millions)
ASSETS                             At                      At                      Increase    At
                                   March 31,2005           March 31,2004           (Decrease)  December 31, 2004
                                   Amount      Percentage  Amount      Percentage  Amount      Amount      Percentage
                                               over total              over total                          over total
                                               assets                  assets                              assets
Current Assets                                 %                       %                                   %
Cash                               118,329                 119,162                 (833)       183,501
Notes and accounts                 204,529                 210,481                 (5,952)     292,708
receivable,trade
Marketable securities              800                     1,392                   (592)       800
Inventories                        99,488                  98,670                  818         83,296
Other                              64,640                  59,097                  5,543       65,030
Allowance for doubtful accounts    (4,352)                 (3,665)                 (687)       (4,489)
       Total Current Assets        483,435     28.2        485,139     28.0        (1,704)     620,848     34.0
Fixed Assets
Property, plant and equipment
Buildings and structures           188,567                 183,977                 4,590       190,537
Machinery, equipment and vehicles  165,732                 182,545                 (16,813)    165,881
Land                               154,530                 166,623                 (12,093)    154,474
Construction in progress           42,057                  39,022                  3,035       33,567
Other                              42,067                  45,039                  (2,972)     41,819
              Total                592,955     34.6        617,207     35.6        (24,252)    586,279     32.2
Intangible Assets
Consolidation differences          39,517                  42,566                  (3,049)     40,275
Other                              92,704                  107,231                 (14,527)    94,669
              Total                132,221     7.7         149,798     8.6         (17,577)    134,945     7.4
Investments and Other Assets
Investment securities              392,671                 381,945                 10,726      372,095
Life insurance investments         36,591                  35,700                  891         36,491
Other                              80,736                  68,419                  12,317      77,065
Allowance for doubtful accounts    (3,928)                 (5,250)                 1,322       (3,935)
              Total                506,070     29.5        480,814     27.8        25,256      481,716     26.4
        Total Fixed Assets         1,231,248   71.8        1,247,821   72.0        (16,573)    1,202,941   66.0
TOTAL ASSETS                       1,714,683   100.0       1,732,960   100.0       (18,277)    1,823,790   100.0

                                                                  (yen millions)
LIABILITIES,                       At                      At                      Increase    At
MINORITY INTERESTS                 March 31,2005           March 31,2004           (Decrease)  December 31, 2004
AND SHAREHOLDERS' EQUITY           Amount      Percentage  Amount      Percentage  Amount      Amount      Percentage
                                               over total              over total                          over total
                                               assets                  assets                              assets
Current Liabilities                            %                       %                                   %
Notes and accounts payable, trade  94,564                  91,144                  3,420       111,418
Short-term loans payable           42,465                  39,682                  2,783       24,882
Liquor taxes payable               55,801                  61,346                  (5,545)     117,066
Income taxes payable               2,239                   8,083                   (5,844)     13,523
Accrued expenses                   69,611                  62,397                  7,214       78,656
Deposits received                  40,442                  50,584                  (10,142)    51,176
Other                              41,859                  53,453                  (11,594)    46,124
    Total Current Liabilities      346,985     20.2        366,692     21.2        (19,707)    442,847     24.3
Long-term Liabilities
Bonds                              171,814                 170,846                 968         171,564
Long-term debt                     69,404                  97,936                  (28,532)    67,119
Employees' pension and retirement  71,576                  79,482                  (7,906)     73,227
benefits
Other reserves                     14,583                  14,227                  356         14,711
Deposits received                  72,008                  72,521                  (513)       73,374
Other                              44,259                  35,186                  9,073       43,471
   Total Long-term Liabilities     443,646     25.9        470,200     27.1        (26,554)    443,469     24.3
TOTAL LIABILITIES                  790,631     46.1        836,892     48.3        (46,261)    886,317     48.6
MINORITY INTERESTS                 76,671      4.5         77,380      4.5         (709)       78,857      4.3
Common stock                       102,045     6.0         102,045     5.9         -           102,045     5.6
Capital surplus                    70,987      4.1         70,868      4.1         119         70,984      3.9
Retained earnings                  682,280     39.8        648,590     37.4        33,690      687,905     37.7
Land revaluation difference        (4,713)     (0.3)       (1,669)     (0.1)       (3,044)     (4,713)     (0.2)
Net unrealized holding gains on    51,547      3.0         47,665      2.7         3,882       52,463      2.9
securities
Foreign currency translation       (30,199)    (1.8)       (34,492)    (2.0)       4,293       (35,614)    (2.0)
adjustments
Treasury stock                     (24,568)    (1.4)       (14,321)    (0.8)       (10,247)    (14,456)    (0.8)
TOTAL SHAREHOLDERS' EQUITY         847,380     49.4        818,687     47.2        28,693      858,615     47.1
TOTAL LIABILITIES,MINORITY         1,714,683   100.0       1,732,960   100.0       (18,277)    1,823,790   100.0
INTERESTS AND SHAREHOLDERS' EQUITY

CONSOLIDATED STATEMENTS OF INCOME                                                                        (yen millions)
                                   First quarter ended     First quarter ended     Increase    Year ended
                                   March 31, 2005          March 31, 2004          (Decrease)  December 31, 2004
                                   Amount      Percentage  Amount      Percentage  Amount      Amount      Percentage
                                               over sales              over sales                          over sales
                                               %                       %                                   %

Sales                              311,431     100.0       326,496     100.0       (15,065)    1,654,886   100.0
Cost of sales                      187,467     60.2        199,079     61.0        (11,612)    1,008,049   60.9
Gross profit                       123,963     39.8        127,417     39.0        (3,454)     646,836     39.1
Selling, general and               119,549     38.4        112,834     34.6        6,715       537,444     32.5
administrative expenses
Operating income                   4,413       1.4         14,583      4.5         (10,170)    109,392     6.6
Non-operating income
Interest income                    173                     163                     10          750
Dividend income                    693                     626                     67          3,341
Equity in earnings of affiliates   1,653                   199                     1,454       5,112
Rental income                      584                     330                     254         1,621
Other                              831                     612                     219         3,209
              Total                3,937       1.3         1,932       0.6         2,005       14,034      0.8
Non-operating expenses
Interest expense                   2,273                   2,543                   (270)       10,221
Other                              961                     815                     146         6,642
              Total                3,235       1.0         3,359       1.0         (124)       16,864      1.0
         Ordinary income           5,115       1.6         13,156      4.0         (8,041)     106,562     6.4
Special income
Gain on sale of fixed assets       75                      277                     (202)       1,766
Reversal of allowance for doubtful 165                     338                     (173)       331
accounts
Gain on sale of investment         325                     280                     78          319
securities
Gain on release from the           -                       -                       -           26,162
substitutional portion of the
government's welfare pension
insurance scheme
Gain on sale of shares of          33                      -                       -           8,333
subsidiariesy and affiliates
              Total                598         0.2         895         0.3         (297)       36,913      2.2
Special expenses
Loss on disposal of fixed assets   503                     515                     (12)        5,743
Loss on sale of fixed assets       35                      16                      19          251
Loss on impairment                 -                       -                       -           12,419
Loss on devaluation of investment  -                       -                       -           1,150
securities
Loss on sale of investment         -                       4                       (4)         17
securities
Business restructuring expense     463                     -                       463         912
Loss on devaluation of fixed       -                                               -           12,962
assets of foreign subsidiaries
              Total                1,002       0.3         536         0.2         466         33,458      2.0
Income before income taxes and     4,710       1.5         13,515      4.1         (8,805)     110,018     6.6
minority interests
Income taxes                       2,047       0.7         7,762       2.4         (5,715)     53,256      3.2
Minority interests                 1,675       0.5         2,188       0.7         (513)       7,662       0.5
Net income                         987         0.3         3,564       1.1         (2,577)     49,099      3.0

CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                    (yen millions)
                                               First quarter     First quarter     Increase          Year ended
                                               ended March 31,   ended March 31,   (Decrease)        December 31, 2004
                                               2005              2004
Cash flows from operating activities
Income before income taxes and minority        4,710             13,515            (8,805)           110,018
interests
Depreciation and amortization                  16,500            16,912            (412)             74,059
Increase (decrease) in reserves                (1,447)           (5,934)           4,487             12,892
Interest and dividend income                   (867)             (789)             (78)              (4,091)
Interest expense                               2,273             2,543             (270)             10,221
Decrease (increase) in notes and accounts      87,245            73,440            13,805            (2,662)
receivable , trade
Decrease (increase) in inventories             (15,873)          (9,037)           (6,836)           6,283
Increase (decrease) in notes and accounts      (16,140)          (17,114)          974               3,964
payable , trade
Increase (decrease) in liquor taxes payable    (61,304)          (55,897)          (5,407)           (173)
Other                                          (32,366)          (11,340)          (21,026)          (31,466)
                  Sub-total                    (17,268)          6,298             (23,566)          179,046
Interest and dividend received                 1,553             944               609               6,284
Interest paid                                  (2,461)           (2,650)           189               (9,967)
Income taxes paid                              (12,118)          (19,713)          7,595             (47,399)
Net cash provided by (used in) operating       (30,295)          (15,121)          (15,174)          127,963
activities
Cash flows from investing activities
Payment for purchases of property, plant,      (15,778)          (18,461)          2,683             (69,020)
equipment and intangible assets
Proceeds from sale of property, plant and      231               449               (218)             5,261
equipment
Payment for purchase of marketable securities  (24,823)          (1,229)           (23,594)          (2,758)
and investment securities
Proceeds from sales and redemption of          362               1,276             (914)             18,170
marketable securities and investment
securities
Proceeds from sale of shares of subsidiaries   7,674             -                 7,674             810
excluded from the consolidation scope
Other                                          (4,283)           1,976             (6,259)           3,283
Net cash used in investing activities          (36,616)          (15,988)          (20,628)          (44,252)
Cash flows from financing activities
Increase (decrease) in loans                   22,810            24,947            (2,137)           (16,112)
Payment for purchase of treasury stock         (10,121)          (137)             (9,984)           (785)
Proceeds from sale of treasury stock           11                -                 11                432
Cash dividends paid                            (5,308)           (4,472)           (836)             (12,088)
Cash dividends paid to minority shareholders   (3,845)           (3,595)           (250)             (7,187)
Other                                          189               63                126               (159)
Net cash provided by (used in) financing       3,737             16,804            (13,067)          (35,901)
activities
Effect of exchange rate fluctuation on cash    420               83                337               (424)
and cash equivalents
Net increase (decrease) in cash and cash       (62,755)          (14,222)          (48,533)          47,385
equivalents
Cash and cash equivalents at beginning of year 177,257           129,978           47,279            129,978
Cash and cash equivalents of newly             -                 -                 -                 (105)
consolidated subsidiaries at beginning of year
Cash and cash equivalents at end of period     114,501           115,755           (1,254)           177,257

(SEGMENT INFORMATION)

Business segment information                                                                             (yen millions)
                   First quarter ended March 31,2005
                   Alcohol        Soft Drinks   Pharma-        Others        Total         Eliminations   Consolidated
                   Beverages                    ceuticals                                  or Corporate
Sales
Unaffiliated       188,701        73,429        12,599         36,700        311,431       -              311,431
customers
Inter-segment      995            30            -              18,971        19,997        (19,997)       -
   Total sales     189,696        73,460        12,599         55,672        331,428       (19,997)       311,431

Operating expenses 187,638        72,917        10,988         55,193        326,738       (19,720)       307,017
Operating income   2,057          542           1,610          478           4,689         (276)          4,413

Types and nature of products are considered in classification of business segments. Main products of sales by segment
are as follows;

Business segment            Main products
Alcohol beverages           Beer, sparkling malt liquor (happo-shu), whiskey, spirits, wine etc.
Soft drinks                 Soft drinks and other drinks
Pharmaceuticals             Pharmaceutical products
Others                      Engineering, logistics, floriculture, etc.

                                                                                                         (yen millions)
                   First quarter ended March 31, 2004
                   Alcohol        Soft Drinks   Pharma-        Others        Total         Eliminations   Consolidated
                   Beverages                    ceuticals                                  or Corporate
Sales
Unaffiliated       207,223        72,619        12,885         33,767        326,496       -              326,496
customers
Inter-segment      617            110           -              18,892        19,620        (19,620)       -
   Total sales     207,841        72,729        12,885         52,660        346,117       (19,620)       326,496

Operating expenses 199,868        69,791        10,589         50,943        331,192       (19,279)       311,913
Operating income   7,972          2,938         2,296          1,717         14,924        (341)          14,583

(PRODUCTION, ORDERS RECEIVED AND SALES)

1. PRODUCTION PERFORMANCE

Production performance for the first quarter ended March 31, 2005 classified by
the type of business segment was as follows:

Business segment            Amount (yen million)        Percentage change (%)
Alcohol beverages           185,720                     (5.8)
Soft drinks                 26,228                      (10.9)
Pharmaceuticals             15,929                      7.9
Other                       15,532                      28.4
Total                       243,411                     (4.0)

(Note) The amounts are calculated based on sales price without consumption
taxes.

2. ORDERS RECEIVED

Orders received for the first quarter ended March 31, 2005 classified by the
type of business segment was as follows.

The Company and its subsidiaries manufacture their products based on their
projection for market demand except for contract manufacture in 'Alcohol
beverages' and 'Soft drinks' segments and inspection machines and others in
'Other' segment.

Business segment  Orders received                                    Backlog
                  Amount (yen       Percentage change (%)            Amount (yen       Percentage change (%)
                  million)                                           million)

Alcohol beverages 155               33.2                             -                 -
Soft drinks       290               6.5                              -                 -
Pharmaceuticals   -                 -                                -                 -
Other             4,833             162.5                            1,904             488.2
Total             5,279             136.7                            1,904             488.2

(Note) The amounts are calculated based on sales price without consumption
taxes.

3. SALES PERFORMANCE

Sales performance for the first quarter ended March 31, 2005 classified by the
type of business segment was as follows:

Business segment            Amount (yen million)        Percentage change (%)
Alcohol beverages           188,701                     (8.9)
Soft drinks                 73,429                      1.1
Pharmaceuticals             12,599                      (2.2)
Other                       36,700                      8.6
Total                       311,431                     (4.6)

(Note) The consumption taxes are not included in the above amounts.

                              Supplementary Documents
                                      to the
                                  Consolidated
                               Financial Results
                   as of, and for the first quarter ended
                                 March 31, 2005

Consolidated

1. Profit Breakdown for the 1st quarter (Actual)
                                                                  (yen billions)
                              Item                               2005              2004              Increase
                                                                 1st quarter       1st quarter       (Decrease)
                                                                 Actual            Actual

Sales                                                            311.4             326.4             (15.0)
Decrease in Operating income of other subsidiaries                                                   (0.1)
Decrease in Operating income of Kirin Beverage                                                       (2.1)
Decrease in Operating income of Parent Company                                                       (7.9)
Decrease in Operating income                                     4.4               14.5              (10.1)
Equity in earnings of affiliates, net                                                                1.5
Increase of Non-operating income, net of Non-operating expenses                                      0.3
of Parent Company
Increase of Non-operating income, net of Non-operating expenses                                      0.2
of Kirin Beverage
Increase of Non-operating income, net of Non-operating expenses                                      0.1
of other subsidiaries
Decrease in Ordinary income                                      5.1               13.1              (8.0)
Increase of Special income, net of Special expenses and Income                                       2.7
taxes of Parent Company
Decrease of Minority Interests                                                                       0.5
Increase of Special income, net of Special expenses and Income                                       2.2
taxes of other subsidiaries
Increase of Special income, net of special expenses and Income                                       0
taxes of Kirin Beverage
Decrease in Net income                                           0.9               3.5               (2.6)

KIRIN BREWERY COMPANY, LIMITED                                                        May 11, 2005
SUMMARY OF NON-CONSOLIDATED FINANCIAL RESULTS FOR THE FIRST QUARTER
ENDED MARCH 31, 2005 (UNAUDITED)
(English Translation)
Fiscal year ending December 31, 2005

KIRIN BREWERY COMPANY, LIMITED
10-1, Shinkawa 2-chome, Chuo-ku, Tokyo, Japan (URL http://www.kirin.co.jp/english/)
                 Code No.:                                     2503
                 Shares Listed:                                Tokyo, Osaka, Nagoya, Fukuoka, Sapporo
                 Representative:                               Mr. Koichiro Aramaki, President
                 For further information, please contact:      Mr. Kensuke Suzuki, General Manager,
                                                               Corporate Communications & IR Group,
                                                               CSR & Corporate Communications Division
                                                               Telephone: 81- 3- 5540- 3450 from overseas

1.  Items pertaining to preparation of quarterly non-consolidated statements of income, etc
    Application of US GAAP: None
    Adoption of simple methods in accounting policies: Yes
        The estimated effective tax rate is applied for the computation of income taxes
    Change in accounting policies: Yes
        Adoption of the new accounting standard, 'The partial revision of the accounting standard for pension and
        retirement benefits'

2.   Business results and financial positions for the first quarter of 2005
     (January 1, 2005 - March 31, 2005)

                                                            (Unit: Japanese yen (yen))
(1)Results of operations:                                   (Fractions less than 1 million yen have been omitted.)

                                        Sales      Percentage     Operating    Percentage     Ordinary     Percentage
                                         (yen        change        income        change        income        change
                                      millions)        (%)          (yen           (%)          (yen           (%)
                                                                  millions)                   millions)

First quarter ended March 31,2005    158,850      (10.9)        (5,586)       -             540           (93.4)
First quarter ended March 31,2004    178,343      1.1           2,426         817.2         8,189         35.7
Year ended December 31, 2004         956,969                    52,945                      66,797

                                    Net income    Percentage    Net income    Net income
                                       (yen         change       per share     per share
                                     millions)        (%)        (Primary)     (Diluted)
                                                                   (yen)         (yen)

First quarter ended March 31,2005  469           (91.3)        0.49          -
First quarter ended March 31,2004  5,377         56.7          5.57          -
Year ended December 31, 2004       40,485                      41.76         -

Notes:    Percentage change means the ratio of increase or decrease in each item of business results for the first
          quarter ended March 31, 2005, to those for the first quarter ended March 31, 2004.

(2)Financial positions:
                                       Total assets        Shareholders'          Ratio of          Shareholders'
                                      (yen millions)          equity           shareholders'       equity per share
                                                          (yen millions)      equity to total           (yen)
                                                                                   assets
                                                                                    (%)
March 31, 2005                        1,318,023           758,904             57.6                 793.19
March 31, 2004                        1,279,798           743,033             58.1                 769.06
December 31, 2004                     1,417,778           776,356             54.8                 803.60

3.   Forecast of business results for the current fiscal year (January 1, 2005-December 31, 2005)

                                        Sales       Ordinary    Net income     Interim      Year-end    Dividend per
                                         (yen        income        (yen     dividend per  dividend per  share for the
                                      millions)       (yen      millions)       share         share         year
                                                   millions)                    (yen)         (yen)         (yen)

6 months ending June 30, 2005        435,000      27,000       15,000       7.00          -             -
Year ending December 31, 2005        968,000      70,000       41,000       -             7.00          14.00

(Reference)  Forecasted net income per share (Year ending December 31,2005)         42.31 yen
             Forecasted operating income (6 months ending June 30, 2005)            15,000 millions yen
             Forecasted operating income (Year ending December 31, 2005)            55,000 millions yen

(Note)       Forecast of business results stated above has not been changed from the forecast disclosed on February 18,
             2005.


NON-CONSOLIDATED BALANCE SHEETS                                                                          (yen millions)
ASSETS                             At                      At                      Increase    At
                                   March 31,2005           March 31,2004           (Decrease)  December 31, 2004
                                   Amount      Percentage  Amount      Percentage  Amount      Amount      Percentage
                                               over total              over total                          over total
                                               assets                  assets                              assets
Current Assets                                 %                       %                                   %
Cash                               104,022                 79,644                  24,378      158,611
Notes receivable, trade            389                     408                     (19)        931
Accounts receivable, trade         109,375                 117,773                 (8,398)     187,002
Marketable securities              -                       51                      (51)        -
Inventories                        39,069                  39,942                  (873)       29,907
Other                              49,704                  28,567                  21,137      44,070
Allowance for doubtful accounts    (3,419)                 (2,650)                 (769)       (3,539)
       Total Current Assets        299,142     22.7        263,737     20.6        35,405      416,985     29.4
Fixed Assets
Property, plant and equipment
Buildings                          119,722                 111,586                 8,136       121,610
Machinery, equipment               104,032                 114,542                 (10,510)    107,712
Land                               99,618                  110,981                 (11,363)    99,618
Construction in progress           24,203                  31,096                  (6,893)     17,160
Other                              27,178                  26,716                  462         27,755
              Total                374,755     28.4        394,922     30.9        (20,167)    373,857     26.4
Intangible Assets                  4,787       0.4         5,658       0.4         (871)       4,983       0.3
Investments and Other Assets
Investment securities              249,940                 258,619                 (8,679)     251,236
Investments in subsidiaries and    278,400                 263,649                 14,751      262,163
affiliates (capital stock)
Life insurance investments         36,535                  35,658                  877         36,447
Other                              79,053                  62,454                  16,599      76,680
Allowance for doubtful accounts    (4,591)                 (4,902)                 311         (4,575)
              Total                639,338     48.5        615,479     48.1        23,859      621,952     43.9
        Total Fixed Assets         1,018,881   77.3        1,016,060   79.4        2,821       1,000,793   70.6
TOTAL ASSETS                       1,318,023   100.0       1,279,798   100.0       38,225      1,417,778   100.0

                                                                  (yen millions)
LIABILITIES                   At                       At                       Increase    At
AND SHAREHOLDERS' EQUITY      March 31, 2005           March 31, 2004           (Decrease)  December 31, 2004
                                Amount    Percentage     Amount    Percentage     Amount      Amount    Percentage
                                          over total               over total                           over total
                                          assets                   assets                               assets
Current Liabilities                       %                        %                                    %
Notes payable, trade          713                      4,780                    (4,067)     780
Accounts payable, trade       24,819                   23,681                   1,138       28,973
Short-term loans payable      90,461                   41,969                   48,492      74,383
Liquor taxes payable          51,362                   57,082                   (5,720)     112,058
Income taxes payable          903                      3,522                    (2,619)     6,541
Accrued expenses              29,207                   28,966                   241         37,292
Deposits received             38,055                   48,860                   (10,805)    48,858
Other                         27,137                   26,098                   1,039       33,961
Total Current Liabilities     262,662     19.9         234,961     18.3         27,701      342,851     24.1
Long-term Liabilities
Bonds                         110,000                  110,000                  -           110,000
Long-term debt                26,105                   27,000                   (895)       26,055
Employees' pension and        60,656                   70,500                   (9,844)     62,199
retirement benefits
Other reserves                5,776                    5,431                    345         5,737
Deposits received             61,961                   62,607                   (646)       63,270
Other                         31,956                   26,263                   5,693       31,308
Total Long-term Liabilities   296,456     22.5         301,803     23.6         (5,347)     298,570     21.1
TOTAL LIABILITIES             559,118     42.4         536,764     41.9         22,354      641,422     45.2
Common stock                  102,045     7.7          102,045     8.0          -           102,045     7.2
Capital surplus
Additional paid-in capital    70,868                   70,868                   -           70,868
Other                         119                      -                        119         116
Total Capital Surplus         70,987      5.4          70,868      5.5          119         70,984      5.0
Retained earnings
Legal earnings reserve        25,511                   25,511                   -           25,511
Voluntary reserve             490,540                  465,149                  25,391      465,149
Unappropriated retained       43,377                   46,361                   (2,984)     75,188
earnings
Total Retained earnings       559,428     42.5         537,021     42.0         22,407      565,849     39.9
Net unrealized holding gains  51,010      3.9          47,221      3.7          3,789       51,932      3.7
on securities
Treasury Stock                (24,567)    (1.9)        (14,123)    (1.1)        (10,444)    (14,455)    (1.0)
TOTAL SHAREHOLDERS' EQUITY    758,904     57.6         743,033     58.1         15,871      776,356     54.8
TOTAL LIABILITIES AND         1,318,023   100.0        1,279,798   100.0        38,225      1,417,778   100.0
SHAREHOLDERS' EQUITY

NON-CONSOLIDATED STATEMENTS OF INCOME                                                                    (yen millions)

                                   First quarter ended     First quarter ended     Increase    Year ended December 31,
                                   March 31, 2005          March 31, 2004          (Decrease)  2004
                                     Amount    Percentage    Amount    Percentage    Amount      Amount    Percentage
                                               over sales              over sales                          over sales
                                               %                       %                                   %
Sales                              158,850     100.0       178,343     100.0       (19,493)    956,969     100.0
Cost of sales                      110,869     69.8        125,343     70.3        (14,474)    662,179     69.2
           Gross profit            47,981      30.2        53,000      29.7        (5,019)     294,789     30.8
Selling, general and               53,567      33.7        50,573      28.4        2,994       241,844     25.3
administrative expenses
         Operating income          (5,586)     (3.5)       2,426       1.4         (8,012)     52,945      5.5
Non-operating income
Interest income                    160                     129                     31          681
Dividend income                    5,589                   5,498                   91          13,807
Other                              1,527                   1,134                   393         5,242
              Total                7,277       4.6         6,762       3.8         515         19,731      2.1
Non-operating expenses
Interest expense                   493                     493                     0           2,181
Other                              657                     506                     151         3,697
              Total                1,151       0.7         1,000       0.6         151         5,879       0.6
         Ordinary income           540         0.3         8,189       4.6         (7,649)     66,797      7.0
Special income
Gain on sale of investment         325                     280                     45          296
securities
Gain on release from the           -                       -                       -           26,162
substitutional portion of the
government's welfare pension
insurance scheme
Other                              188                     567                     (379)       1,506
              Total                513         0.3         847         0.5         (334)       27,965      2.9
Special expenses
                                   103         0.1         459         0.3         (356)       18,345      1.9
Income before income taxes         949         0.6         8,577       4.8         (7,628)     76,417      8.0
Income taxes                       480         0.3         3,200       1.8         (2,720)     35,932      3.8
            Net income             469         0.3         5,377       3.0         (4,908)     40,485      4.2
Retained earnings brought forward  42,907                  40,983                  1,924       40,983
from the prior fiscal year
Dividends (interim)                -                       -                       -           6,280
Unappropriated retained earnings   43,377                  46,361                  (2,984)     75,188

                                     Supplementary Documents
                                             to the
                                       Non-consolidated
                                       Financial Results
                            as of, and for the first quarter ended
                                         March 31, 2005

Non-consolidated

1. Profit Breakdown for the 1st quarter (Actual)
                                                                  (yen billions)
                  Item                   2005         2004         Increase    Reference
                                         1st quarter  1st quarter  (Decrease)
                                         Actual       Actual

Sales                                    158.8        178.3        (19.5)
Decrease of labour cost                                            1.1
Decrease of factory expenses                                       0.6
Decrease of operating cost of                                      0.4         Decrease of travel expense 0.1,
alcohol beverages                                                              Decrease of correspondence fee 0.1,etc
Decrease of depreciation                                           0.3
Other                                                              (0.9)
Decrease of marginal profit of                                     (0.2)
Pharmaceutical business
Raw materials cost of alcohol beverages                            (0.4)       Price increase of Hyoketsu raw materials
                                                                               (0.1), etc.
General management cost                                            (0.6)       Increase of R&D cost (0.5), etc.
Increase of selling cost                                           (2.5)       Increase of sales promotion and
                                                                               advertising cost (2.7), etc.
Decrease of marginal profit of                                     (5.7)
alcohol beverages
Decrease in Operating income             (5.5)        2.4          (7.9)
Increase of Non-operating income,                                  0.3         Increase of financial profit, net 0.1,
net of Non-operating                                                           etc.
expense
Decrease in Ordinary income              0.5          8.1          (7.6)
Decrease of Income taxes                                           2.8
Increase of Special expenses,                                      (0.1)
net of Special income
Decrease in Net income                   0.4          5.3          (4.9)


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