Materials for the 25th Annual General Meeting of Shareholders（FY2024）(Matters not stated in documents issued by request for written delivery based on laws and regulations andthe Articles of Incorporation among matters subject to measures for electronic provision)

Status of the Accounting Auditor
System for ensuring the appropriateness of operations

Summary of the operational status of the system to ensure
the appropriateness of operations
Statement of Changes in Consolidated Shareholders' Equity, etc.
Consolidated Notes Table
Statement of Changes in Shareholders' Equity, etc.
Individual Notes Table（from July 1, 2023 to June 30, 2024）

Fibergate Inc.
The above matters are not stated in the documents delivered to shareholders who haverequested written delivery in accordance with laws and regulations and the provisionsof Article 19 of the Company's Articles of Incorporation.
At the General Meeting of Shareholders, regardless of whether or not there is a request
for written delivery, shareholders will be uniformly sent a document stating mattersexcluding the above matters from the matters subject to measures for electronic
provision.

-1-

Status of the Accounting Auditor(1)

Name: KPMG Azusa LLC(2)Amount of remuneration, etc.
Amount of remuneration, etc.

Amount of remuneration, etc. of the Accounting Auditor for the current fiscal year

42 million yen

Total amount of money and other property benefits payable by the Company and its
subsidiaries to the Accounting Auditor

42 million yen(Notes)Since the audit contract between the Company and the Accounting Auditor does not clearly distinguish the amount ofaudit remuneration, etc. for audits under the Companies Act and audits under the Financial Instruments and ExchangeAct, and it is not possible to distinguish them substantially, the total amount of these remunerations is stated in theamount of remuneration, etc. of the accounting auditor for the current fiscal year.
(3)

(4)

(5)

Reasons for the Audit and Supervisory Committee's consent to the remuneration, etc. of the Accounting Auditor
The Audit and Supervisory Committee agrees to the amount of remuneration, etc. of the Accounting Auditor under
Article 399, Paragraph 1 of the Companies Act after examining the content of the Accounting Auditor's audit plan, thestatus of the performance of duties by the Accounting Auditor, and the basis for calculating the estimated remuneration.
Details of non-audit work
There are no applicable matters.
Policy for Determining the Dismissal or Non-Reappointment of the Accounting Auditor
If the Audit and Supervisory Committee deems it necessary to do so, such as when there is a hindrance to the executionof the duties of the Accounting Auditor, the Committee decides on the content of the proposal regarding the dismissal or
non-reappointment of the Accounting Auditor.
In addition, if the Audit and Supervisory Committee finds that the Accounting Auditor falls under any of the items of
Article 340, Paragraph 1 of the Companies Act, the Committee shall dismiss the Accounting Auditor with the consent of all
Committee members. In this case, the Committee members selected by the Committee shall report the dismissal of the
Accounting Auditor and the reason for the dismissal at the first general meeting of shareholders convened after the dismissal.

(6)

Summary of the contents of the Limited Liability Contract
There are no applicable matters.

(7)

Matters related to persons who have been suspended from business in the past two years
There are no applicable matters.

-2-

System for ensuring the appropriateness of operations
In order to improve management transparency and ensure compliance, the Group has positioned the establishment ofan organizational structure that can respond quickly to changes in the business environment while strengthening its
corporate governance system as a critical issue. The following is an outline of the decisions regarding the system toensure that the execution of duties by Directors complies with laws and regulations and the Articles of Incorporation,and other systems to ensure the appropriateness of the company's operations.
The Company's Board of Directors has resolved the "Basic Policy on Internal Control" in order to establish a system
to ensure the appropriateness of operations.
The outline of the resolution of the Board of Directors is as follows:(1) The system to ensure that the execution of duties by Directors and employees complies with laws and regulations andthe Articles of Incorporation
1) Establish a "Compliance Code of Conduct" to comply with laws and regulations, the Articles of Incorporation, andsocial norms, and thoroughly disseminate it throughout the Company.
2) In addition to establishing rules related to compliance, the Executive Officers' Committee shall establish andmaintain a compliance system.
3) Hold education and training on compliance as appropriate to maintain and improve compliance awareness.
4) Establish a whistleblowing system to detect and prevent problems at an early stage, and respond appropriately andpromptly.
(2) System for the storage and management of information related to the execution of duties by Directors
Information related to the execution of duties by Directors shall be created and stored in accordance with laws andregulations, document management regulations, and internal information management regulations, and shall be
managed in a state where it can be viewed and copied by Directors, Audit and Supervisory Committee members,
Accounting Auditors, etc., as necessary.
(3) Regulations and other systems related to the management of the risk of loss
1) Establish risk management regulations, appoint an organization and person responsible for dealing with various
conceivable risks in the Company's business activities, and establish an appropriate evaluation and management
system.
2) The Executive Officers' Meeting and the Audit and Supervisory Committee shall strengthen the system forpreventing and mitigating various risks in business activities.
3) In the event of a crisis, a task force shall be established and appropriate and prompt measures shall be taken to deal
with the crisis, including appropriate communication of information both inside and outside the Company.
(4) System to ensure efficient execution of duties by Directors
1) Separate the decision-making and business supervision functions of the Board of Directors from the businessexecution functions of the executive officers.
2) Establish rules for the Board of Directors, the division of duties, and administrative authority, and clarify the duties,
authority, and responsibilities of Directors.
3) Hold the Board of Directors regularly once a month as well as hold meetings as necessary.
(5) System to ensure the appropriateness of operations of the corporate group consisting of the Company and its subsidiaries
1) Establish a department in charge of affiliated companies and manage subsidiaries in accordance with the Subsidiary
Management Regulations.
2) The Board of Directors shall resolve the Group's management plan, and the Business Planning Division shall report
the progress of the plan to the Board of Directors on a monthly basis.
3) The Internal Audit Office shall conduct internal audits of the Company and its subsidiaries, and report the results
to the President and Chief Executive Officer, the Board of Directors, and the Audit and Supervisory Committee.
4) The Internal Control Team within the Business Administration Division shall strengthen and improve internal controls.

-3-(6) Matters related to employees who are required to assist the Audit and Supervisory Committee in their duties
1) At the request of the Audit and Supervisory Committee, the Board of Directors shall appoint Audit and Supervisory
Committees' staff in consultation with the Audit and Supervisory Committee members to assist them in the audit
work.
2) The authority to direct the nominated employees shall be delegated to the Audit and Supervisory Committee, andthey shall not be subject to the direction and orders of the Directors.
(7) Matters concerning the independence of employees who assist the duties of Audit and Supervisory Committee from
Directors
1) An employee who receives a request from an Audit and Supervisory Committee to assist an Audit and Supervisory
Committee shall not be subject to the direction and orders of the Directors or superior, etc.
2) Personnel changes and appraisals of such employees shall be subject to the consent of the Audit and Supervisory
Committee.
(8) System for Directors and employees to report to Audit and Supervisory Committee and other systems for reporting to
Audit and Supervisory Committee.
1) Audit and Supervisory Committee may attend important meetings such as the Executive Committee in addition to
the Board of Directors, and request reports on the status of execution of duties from Directors and employees.
2) Directors and employees shall promptly report to the Audit and Supervisory Committee when they discover a factthat violates laws and regulations or that may cause significant damage to the Company.
3) Directors and employees shall promptly report to the Audit and Supervisory Committee when requested to reporton matters related to the execution of duties.
4) With regard to reports from employees, etc. to the Audit and Supervisory Committee, the contents of the reports
shall be kept confidential in accordance with laws and regulations, and disadvantageous treatment of thewhistleblowers shall be prohibited.
(9) Other systems to ensure that audits by Audit and Supervisory Committee is conducted effectively
1) The Audit and Supervisory Committee shall ensure fairness and transparency, including outside Audit andSupervisory Committee, in accordance with laws and regulations.
2) Audit and Supervisory Committee shall regularly exchange opinions with the Representative Director to promotemutual communication.
3) The Audit and Supervisory Committee shall regularly exchange information with the Accounting Auditor and theInternal Audit Office to promote mutual cooperation.
4) If the Audit and Supervisory Committee deems it necessary for audit work, they may hear the opinions of lawyers,certified public accountants, and other experts at the Company's expense.
(10) System to ensure the reliability of financial reporting
In order to ensure the reliability of financial reporting, the Executive Officers' Meeting (Executive Committee)
shall strengthen company-wide control activities and control activities for each business process, and establish an
operational system.
(11) Basic approach to the elimination of transactions with anti-social forces and status of the development
The Company recognizes that its special parties, shareholders, business partners, etc. have no relationship with
anti-social forces.
In order to take a resolute stance against anti-social forces that threaten social order and safety (such as organizedcrime groups, members of organized crime groups, associate members of organized crime groups, companies related
to organized crime groups, racketeer groups, etc., groups engaging in criminal activities under the pretext of
conducting social campaigns, and crime groups specialized in intellectual crimes), we have established the following
basic policy on anti-social forces and shall comply with it.

-4-

(Basic Policy)
The Company will not provide money or other economic benefits to anti-social forces under any circumstances.
1)Taking a resolute stance against anti-social forces and practicing corporate activities that leave no gaps to exploit willcontribute to the formation of a healthy civil society and lead to an increase in corporate value. In order to eradicate
relationships with anti-social forces that pose a serious threat to corporate activities, top management makes it clear both
inside and outside the Company that it is determined to completely cut off relationships with anti-social forces such as socalled racketeer groups and resolutely eliminate them as well as establishes a system that enables an organizational response
to organized violence by anti-social forces based on the so-called "three nos" of "no fear," "no money," and "no use.".
2)In addition to centrally managing relevant internal and external information necessary to maintain a severance ofrelationships with anti-social forces, the Company will always cooperate with external specialized organizations to
prepare an organization that provides guidance and support for problem-solving and strives to develop human resources.
3)The Company will always maintain an awareness of crisis management, formulate internal rules and business manuals
that respond to approaches from anti-social forces, and strive for education and training so as not to give anti-social forcesan opportunity to take advantage of them. In addition, the Company will strengthen operational audits to confirm theeffectiveness of organizational responses.
･ The Company will not have any relationship with anti-social forces and will not conduct transactions or contracts with
anti-social forces.
･ In order to cut off all relationships with anti-social forces, all officers and employees will take a resolute stance.
･ In order to prevent damage caused by anti-social forces, the Company will cooperate with external specializedorganizations such as the police, the Center for the Expulsion of Organized Crime Groups, and lawyers, and respondsystematically and appropriately.
･ The Company will not respond to any unreasonable claims made by anti-social forces, will resolutely take legal action,
and will strive to ensure the safety of officers and employees who respond.
･ The Company will never provide benefits to anti-social forces or engage in backroom deals for any reason.
With regard to the Company's specific systems and countermeasures for the elimination of anti-social forces, the Company
conducts surveys of new business partners, such as sales partners, subcontractors, suppliers, executives, etc., by searching
the Internet and searching articles using Nikkei Telecom before the start of transactions, based on the Company's AntiSocial Forces Countermeasures Regulations and the Anti-Social Forces Survey Manual. In addition, the Company
conducts the same survey of continuing business partners once a year.
The basic transaction agreement includes a termination clause in the event that a relationship with anti-social forces isfound.
In addition, based on the above basic policy, the Company has established specific response guidelines and has
established a system to eliminate transactions with anti-social forces based on the response guidelines.

-5-Summary of the operational status of the system to ensure the appropriateness of operations
Based on the "Basic Policy on Internal Control" resolved at the Board of Directors meeting, the Company has establishedand operates an internal control system for the Company and its subsidiaries.
At the beginning of the fiscal year, the Company announces management policies, management issues, response
guidelines, etc. to all employees in an effort to unify the understanding of all employees. During the fiscal year, the Internal
Audit Office conducts audits and reports to the Board of Directors on the policies and implementation status of internal
controls by each department.
In addition, at the end of the fiscal year, the Company recognizes that there will be no significant corrections based on
the results of the evaluation of the status of the development and operation of internal controls by the Internal Audit Office.
The status of implementation of the Company for enhancement of corporate governance in the current fiscal year is asfollows:
1) The Board of Directors met 14 times and held the Executive Committee (Executive Officers' Meeting) 50 times todecide on significant matters related to management, such as matters stipulated by laws and regulations, theformulation of management policies and budgets, and examined the analysis, countermeasures, and evaluation of theCompany's monthly management performance, and deliberated from the perspective of compliance with laws andregulations and the appropriateness of operations.
2) Met the Audit and Supervisory Committee 14 times to discuss and decide on audit policies and plans, attended
important internal meetings such as the Executive Committee, and audited the status of operations and assets, auditsof the execution of duties by Directors, and compliance with laws and regulations. In addition, information was
exchanged as appropriate with each Director, Accounting Auditor, Internal Audit Office, etc. For subsidiaries, theCompany communicated and exchanged information with the officers and employees of subsidiaries to ensure theeffectiveness of audits by the Audit and Supervisory Committee.
3) In light of the importance of the impact on the reliability of financial reporting, the internal control evaluation was
conducted appropriately based on the formulated implementation plan. In addition, the appropriateness of financial
results disclosure materials was ensured by disclosing them after submitting them to the Board of Directors.
4) With regard to information security measures, the Company has tightened its data management methods with the aimof preventing the leakage of confidential information of the Company, including personal information. In addition,
information on information security is used on the intranet and other channels to disseminate and raise awareness.
5) The Company's internal audits were conducted appropriately in accordance with the audit plan prepared by the Internal
Audit Office based on the Internal Audit Regulations. In addition, audits by the Audit and Supervisory Committee ofsubsidiaries were conducted appropriately.
(6) The Nomination and Remuneration Committee has been established on a voluntary basis to examine the compositionof the Company's Board of Directors, the policies and standards for the appointment and dismissal of Directors andExecutive Officers, including Audit and Supervisory Committee members, and individual appointments, and to reportto the Board of Directors. In addition, the remuneration system and remuneration policy for the Company's directors(including Audit and Supervisory Committee members), the details of remuneration for individual directors, and theagenda items for the General Meeting of Shareholders (only proposals related to remuneration) are examined andreported to the Board of Directors.

-6-

Consolidated Statement of Changes in Shareholders' Equity (from July 1, 2023 to June 30, 2024)（Millions of yen）
Cumulative amount of othercomprehensive income
Othervaluatio
Total
Foreignncurrency cumulati
differenvetranslati
ce onamountonof otheravailabl
adjustm compreh
e-forent
ensivesaleaccount
incomesecurities

Shareholders' Equity

CapitalsurplusCapitalBalance at the
beginning of the
fiscal year
Fluctuations in thecurrent fiscal year
Issuance of newshare
Dividend of
surplus

494

426

0

0

Profit attributableto owners ofparentRetainedearnings

Treasury
share

Total
shareholders'equity

3,963

△188

4,694

1

1

19

42

Total
net
assets

4,758

0

0

△305

△305

△305

1,567

1,567

1,567

△188

△188

△188

20

17

17

Acquisition oftreasury share
Disposal oftreasury share△0

Noncontroll
ing
interest

Share
award
rights△2

Changes in items
other thanshareholders’equity for thecurrent fiscal year
(net)

0

1

1

△19

4

△13

Total changes forthe current fiscal
year

0

△2

1,262

△168

1,091

0

1

1

△19

4

1,077

Balance at the endof the current fiscal
year

494

423

5,225

△356

5,786

0

3

3

－

46

5,836

(Notes) The listed amount is rounded down to the nearest million yen.

-7-

1. Consolidated Notes Table(1) Matters related to the scope of consolidation
Number of consolidated subsidiaries: 5Name of Consolidated Subsidiary
NOIS Inc., Fibergate Taiwan Inc., FG-Lab Inc., FG Smart Asset Inc., OffGrid-Lab Inc
TM Asset Inc., which was a consolidated subsidiary in the previous consolidated fiscal year, wasextinguished in an absorption-type merger with FG Smart Asset Inc. as the surviving company.
(2). Matters related to the application of the equity method
There are no applicable matters.
(3) Matters related to the fiscal year of consolidated subsidiaries
The closing dates of all consolidated subsidiaries coincide with the consolidated closing date.
(4). Matters related to accounting policy
1) Valuation criteria and methods of significant assetsa.

Securities
Other securities
・Shares other than those that do not have a market price･････Market value method (all valuation differences areprocessed by the direct net assets method, and the cost of sale iscalculated by the moving average method)
・Shares, etc. without market price ········· Cost method based on moving average methodb.

Inventories
・Commodity ········ We use the cost method based on the moving average method.
(Values on the balance sheet is calculated by the method of devaluation due to a decrease in profitability.)

・Real estate for sale･･･We use the cost method based on individual method.
(Values on the balance sheet is calculated by the method of devaluation due to a decrease in profitability.)

・Work in progress・・We use the cost method based on individual method.
(Values on the balance sheet is calculated by the method of devaluation due to a decrease in profitability.)-8-2) Method of depreciation of significant depreciable assets
a. Tangible fixed assets

The Company and its domestic consolidated subsidiaries use the declining balance method, and its
overseas consolidated subsidiaries use the straight-line method.
However, the straight-line method is used for buildings acquired on or after April 1, 1998 (excluding
facilities attached to buildings) and facilities attached to buildings acquired on or after April 1, 2016.
The main service life is as follows.
Building···························· 3 to 15 years
Tools, Instruments and Fixtures 2 to 15 years
Communication equipment ····· 10 yearsb.

Intangible assets
We use the straight-line method.
For software used in-house, we use a straight-line method based on the period of use within the company(5 years).

3) How to dispose of material deferred assets

Inaugural expenses
Equally amortized over a five-year period.
4) Criteria for reporting material provisions
a. Allowance for doubtful accounts
In order to prepare for bad debt losses on sales receivables, we consider the recoverability of general receivables
based on the actual rate of bad debts and specific receivables such as receivables of doubtful concern on a case-byb.

case basis, and report the amount that is expected to be uncollectible.
Provision for bonuses
In order to use the funds for the payment of bonuses to the Company's employees, we have estimated the expenses tobe incurred in the current consolidated fiscal year out of the expected amount to be paid in the future.

-9-5) Criteria for reporting significant revenues and expenses
The main revenues of the Group's home use business and business use business are the provision of telecommunication
services and the sale of products. In addition, the main revenue of the real estate business is the sale of real estate.
・Provision of telecommunication services
The obligation to perform the provision of telecommunication services consists of a performance obligation to
install and configure the Internet connection equipment at the service provided property (the “initial introduction
service”) and a performance obligation to provide the Internet service after the installation and configuration of theInternet connection device (hereinafter referred to as the “monthly usage fee service”).
If the initial introduction service and the monthly usage fee service are recognized as an integrated performanceobligation, both are reported as revenue according to the service period of the monthly usage fee. If the obligation
to perform the initial introduction service and the monthly usage fee service are not considered to be integrated, theinitial introduction service will report revenue at the time of completion of the installation and configuration workof the Internet-connecting device, and the monthly usage fee service will report revenue according to the contract
period of the monthly usage fee service.
・Sales of products
The sale of products is obligated to be fulfilled by the delivery of the products to the customer. Since control over the
product is transferred to the customer at the time the product is delivered, we judge it to be a performance obligation thatis satisfied at the time the delivery of the product is completed, and we recognize the revenue.
・Sales of real estate
The sale of real estate is obligated to be fulfilled by the delivery of the real estate. Since control over the real estate istransferred to the customer at the time the delivery conditions in the real estate sales contract are met, we judge that theperformance obligation is satisfied at the time the delivery of the real estate is completed, and we recognize the revenue.
6) Method of accounting for retirement benefits
The Company applies a simplified method of calculating liabilities and retirement benefit expenses related toretirement benefits using a method of making the amount required for self-convenience at the end of the fiscal year
related to retirement benefit obligations.
7) Conversion standards for significant foreign currency-denominated assets or liabilities into Japanese currency
Foreign currency-denominated monetary receivables and liabilities are converted into yen based on the spot exchange rateon the consolidated settlement date, and the conversion difference is treated as profit or loss. The assets and liabilities ofoverseas subsidiaries are converted into yen based on the spot exchange rate on the consolidated settlement date, revenues
and expenses are converted into yen based on the average exchange rate during the period, and the conversion difference isincluded in the foreign currency translation adjustment account in the net assets.

- 10 -

8) Significant methods of hedge accounting
a. Methods of hedge accounting
With regard to interest rate swaps, we have adopted special treatment for those that meet the requirements for
special treatment.
b. Means of hedging and hedging targets
Means of hedging････Interest rate swaps
Hedging targets･･････Interest on borrowingsc. Hedging Policy
The Company engages in derivatives transactions for the purpose of avoiding the risk of interest rate fluctuations
on borrowings, and has a policy of not engaging in derivatives transactions for speculative purposes.
d. Method of evaluating hedging effectivenessInterest rate swap transactions meet the requirements for special treatment, so the evaluation of their effectivenessis omitted.
2.Significant accounting estimates
There are no applicable matters3.

Consolidated balance sheet related(1) Accumulated depreciation of tangible fixed assets(2) Assets pledged as collateral
1)Real Estate for Sale
2)Investment Securities(It is a business deposit under the Building
Lots and Buildings Transaction Business Act.)(3)The liabilities related to collateral are as follows.
1)Short-term borrowings
2)Current portion of long-term borrowings
3)Long-term borrowings- 11 -

6,849 million yen
489 million yen
10 million yen

140 million yen
10 million yen
355 million yen

4．Consolidated statement of changes in equity related(1) Matters concerning total number of shares issued
The type ofsharesCommon shares

Number of shares atthe beginning of thecurrent consolidated
fiscal year (shares)
20,591,200

Number of shares
increased in thecurrent consolidated
fiscal year (shares)
2,400

Number of shares
decreased in thecurrent consolidated
fiscal year (shares)－

Number of shares atthe end of the current
consolidated fiscal
year (shares)
20,593,600

Notes: The total number of shares issued has increased by 2,400 shares due to the exercise of stock options.
(2) Matters related to dividends
1) Amount of dividends paid
Resolution
Ordinary General
Meeting of
Shareholders
held onSeptember 27,
2023
Board Meetingon February
14,2024

Types of shares

Total amount ofdividends

Dividends per
share

Reference date

Effective dateCommon Shares

204 million yen

10.00 yen

June 30, 2023

September 28,
2023

Common Shares

101 million yen

5.00 yen

December
31,2023

March 12,2024

2)Dividends with a reference date in the current consolidated fiscal year whose effective date is the next consolidated
fiscal year
Resolution

Type of
Shares

Source ofdividends

Total amount ofdividends

Dividends
per share

Reference date

Effective dateOrdinary General
Meeting of
Shareholders held
on September 26,
2024

CommonSharesRetainedearnings

253 million yen

12.50 yen

June 30, 2024

September 27,
2024- 12 -

5．Financial instruments related(1) Matters related to the status of financial instruments
1) Policy on initiatives for financial instruments
The Group's basic policy is to procure funds necessary for business operations from ordinary operating cash flows.
Temporary surplus funds are mainly managed through short-term deposits, etc., and when a large amount of funds isrequired for capital investment, etc., they are procured through bank borrowings. It is our policy not to engage inderivatives trading for speculative purposes.
2) Details of financial instruments and their risks
Accounts receivables, which are trade receivables, include receivables that are collected in a short period of time
and those that are collected for a long period of time, and are exposed to the credit risk of customers.
Investment securities are government bonds deposited as shares and security deposits of companies with which wehave a business relationship and are subject to the risk of fluctuations in market prices.
Most accounts payables and other payables, which are trade payables, are due within one year. Some items
denominated in foreign currencies are exposed to the risk of exchange rate fluctuations.
Corporate bonds, borrowings, and lease obligations are mainly intended to raise funds for capital investments, andthe maximum maturity date is 33 years after the closing date. Some of our borrowings are exposed to the risk of interest
rate fluctuations, but we hedge them using derivatives transactions (interest rate swap transactions).
Derivatives transactions are interest rate swap transactions for the purpose of hedging against the risk of fluctuationsin interest rates paid on borrowings. For information on hedging methods and hedging targets, hedging policies, andmethods for evaluating the effectiveness of hedging related to hedge accounting, please refer to “(8) Significant
methods of hedge accounting” in “4. Matters related to accounting policy” mentioned above.
3) Risk management system for financial instruments
a. Management of credit risk (risk related to non-performance of contracts by business partners, etc.)
In accordance with the credit management regulations, the sales department regularly monitors the status of major
business partners with regard to trade receivables, and the sales promotion division manages the due dates andbalances of each counterparty, and works to quickly identify and alleviate concerns about collection due todeterioration in financial conditions, etc.
b. Management of market risks (risks related to fluctuations in foreign exchange rates, interest rates, etc.)
The Company conducts deposits mainly with financial institutions with high credit ratings.
Investment securities are managed by regularly assessing their market value.
With regard to trade payables denominated in foreign currencies, we regularly monitor the risk of foreign exchange
rate fluctuations.
We use interest rate swap transactions to suppress the risk of fluctuations in interest rates paid on borrowings.
c. Management of liquidity risk related to financing (risk of not being able to make payments on the due date)
The finance and accounting department manages liquidity risk by conducting a comparative analysis with the cash
flow plan (cash flow statement) in a timely manner and maintaining liquidity on hand.
4) Supplementary explanation of matters related to the market value of financial instruments
Since fluctuations are factored in the calculation of the market value of financial instruments, the value of financial
instruments may fluctuate due to the adoption of different assumptions.

- 13 -

(2) Matters related to the market value of financial instruments
The amount reported on the consolidated balance sheet, the market value, and the difference between them on June 30, 2024
are as follows.
Amount reported on
consolidated balance sheet Market price (million yen) Difference (million yen)(millions of yen)
(1) Accounts receivable
Allowance foraccounts (*)

1,772
doubtful

△5
1,767

1,767

△0

11

11

ー

1,779

1,779

△0

50

49

△0

4,252

4,208

△43

4,302

4,258

△44

－

－

－

(2) Investment securities
Total Asset(1) Corporate bonds (including bonds
scheduled to be redeemed within
one year)(2) Long-term borrowings (including
Current portion of long-termborrowings)
Total liabilities
Derivatives transaction*

For accounts receivable, we deduct the corresponding allowance for doubtful accounts.

(Notes) 1. Cash is omitted from the notes. In addition, deposits, accounts payable, short-term borrowings, and income taxes payable
are settled in a short period of time, so the market value is approximated to the book value, so the notes is omitted.
Derivatives transactions are interest rate swaps, and all of them are subject to special treatment. Therefore, since it istreated as an integral part of the long-term borrowings that are subject to hedging, the market value is included in themarket value of the long-term borrowings.
2. Unlisted Shares
Since there is no market price, it is not included in the investment securities in the table above.
Amount reported on
consolidated balance
sheet (million yen)
Unlisted Shares0- 14 -

(3) Matters related to the breakdown of the market value of financial instruments by level
The market value of financial instruments is classified into the following three levels according to the observability andsignificance of the inputs used to calculate the market value.
Level 1 of market value: Among the inputs related to the calculation of the observable market value, the market value
calculated by the market price of the asset or liability that is the subject of the calculation of themarket value formed in an active market.
Level 2 of market value: Among the inputs related to the calculation of the observable market value, the market value
calculated using inputs related to the calculation of the market value other than the input of level 1
Level 3 of market value: Market value calculated using inputs related to the calculation of unobservable market prices
In the event that multiple inputs are used that have a significant impact on the calculation of market value, the market
value is classified as the level to which each of these inputs belongs and has the lowest priority in calculating the market
value.

- 15 -

1)Financial instruments reported on the consolidated balance sheet in market value(millions of yen)
Division

Market value
Level 1

Investment
Securities
Other Securities
stock
Government debt
Corporate bondGolf membership

Level 2

Level 3

－
－
1
1

0
10
－
10

Total

－
－
－
－

0
10
1
11

Total Asset
2) Financial instruments other than those reported on the consolidated balance sheet in market value（millions of yen）
時価

Division
Level 1
Accounts receivable

Level 2－

Level 3
1,767

Total
－

1,767

Total Asset
1,767
1,767
－
Corporate bond
49
49
－
－
Long-term
4,208
4,208
－
－
borrowings
Total liabilities
4,258
4,258
－
－
(Notes) 1. Explanation of the valuation technique used to calculate the market value and the input related to thecalculation of it
Accounts receivable
The market value of accounts receivable is calculated based on the discounted present value based on the interest
rate that takes into account the amount of the receivable, the period until maturity, and credit risk for each receivableclassified for a certain period, and is classified as level 2 of market value.
Investment securities
Listed stocks and government bonds are evaluated using market prices. Since listed stocks and government bonds
are traded in an active market, their market value is classified as level 1 of market value. Although golf memberships
are not traded in an active market, they have a published base value, so the market value is classified as level 2 ofmarket value. Corporate bonds are valued using the discounted present value method, and the market value isclassified as level 3 of market value.
Corporate bonds and long-term borrowings
These market values are calculated using the discounted present value method based on the interest rate that takes
into account the total amount of principal and interest, the remaining term of the debt, and credit risk, and are classified
as Level 2 of market value.

- 16 -

6. Notes on revenue recognition related(1) Information that breaks down revenue generated from contracts with customers
The Group consists of three reporting segments: Home Use business, Business Use business, and Real Estatebusiness, as well as the Renewable Energy (Electricity) Business, which does not belong to the reporting segments.
The breakdown of the Group's earnings by revenue recognition period is as follows.
（Million of Yen）
Reporting segment
Others
Total
Home use
Business use
Real estateTotalbusinessbusinessbusinessGoods
orservices to betransferred at a
2,126
861
506
3,494
27
3,521
single point in
time
Goods
or
services thatare transferred
8,260
814
9,074
0
9,074
－
over a periodof time
Revenue
generated from
10,386
1,675
506
12,56827
12,596
contracts withcustomers
Other earnings
17
17
17
－
－
－
Sales
to
external
10,386
1,675
523
12,58527
12,613customers- 17 -

(2) Information that forms the basis for understanding the revenue generated from contracts with customers
The main revenues of the Group's home use business and business use business are the provision of
telecommunications services and the sale of products. In addition, the main revenue of the real estate business is thesale of real estate.
1)Provision of telecommunications services
a. Information on performance obligations
The obligation to perform the provision of telecommunications services consists of a performance obligation
to install and configure the Internet connection equipment at the service provided property (the “initialintroduction service”) and a performance obligation to provide the Internet service after the installation andconfiguration of the Internet connection device (hereinafter referred to as the “monthly usage fee service”).
If the initial introduction service is recognized as a performance obligation integrated with the monthly usage
fee service, it is judged to be a performance obligation that is satisfied for a certain period of time, which is thecontract period of the Internet service, because control over the goods or services is transferred to the customer
for a certain period of time, and revenue is recognized. In addition, if it is not considered to be a performanceobligation integrated with the monthly usage fee service, it is judged to be a performance obligation that is
satisfied at the time of completion of the installation and configuration work of the Internet connection device,because control over the goods or services is transferred to the customer and the performance obligation issatisfied by the completion of the installation and configuration work of the Internet connecting device, and therevenue is recognized.
b. Information related to the calculation of transaction prices and the amount allocated to performance obligations
The transaction price for the provision of telecommunications services is the contract price determined at thetime of the contract with the customer, and there is no variable consideration. In addition, since the prices forthe installation and configuration of Internet connection equipment and Internet services at the properties
provided by the service are specified in the contract, the transaction price is allocated based on the contract
price.
2) Sales of productsa. Information on performance obligations
The sale of products is obligated to be fulfilled by the delivery of the products to the customer. Since control
over the product is transferred to the customer at the time the product is delivered, we judge it to be a
performance obligation that is satisfied at the time the delivery of the product is completed, and we recognize
the revenue.
b. Information related to the calculation of transaction prices and the amount allocated to performance obligations3) Sales of real estatea. Information on performance obligations
The sale of real estate is obligated to be performed by the delivery of the real estate. Since control over thereal estate is transferred to the customer when the conditions of the delivery in the real estate sales contractconcluded with the customer are satisfied, we judge that the performance obligation is satisfied at the time thedelivery of the real estate is completed, and we recognize the profits.
b. Information related to the calculation of transaction prices and the amount allocated to performance obligations
The transaction price for the sale of real estate is the contract price determined at the time of the contract withthe customer.

- 18 -

(3) Information on the relationship between the fulfillment of performance obligations under the contract with the customer
and the cash flow resulting from the contract, and the amount and timing of revenue that is expected to be recognized in
the following consolidated fiscal year and beyond from the contract with the customer that exists at the end of the current
consolidated fiscal year.
1) Balance of contract assets and contract liabilities, etc.
（Millions of yen）
Current consolidated fiscal year
Receivables resulting from contract with customer(balance at the beginning of the fiscal year)

1,585

Receivables resulting from contract with customer(balance at the end of the fiscal year)

1,772

Contract Assets (balance at the beginning of the fiscal
year)
Contract Assets (balance at the end of the fiscal
year)
Contract liabilities (beginning balance)

217
208
1,638

Contract liabilities (balance at the end of the fiscal
year)

1,317

Contract assets are compensation for Internet services that have not yet been billed for the purpose ofproviding telecommunications services to customers who have completed the provision of performanceobligations as of the end of the fiscal year. Contract assets are transferred to receivables arising fromcontracts with customers when the rights of the Company and its consolidated subsidiaries to consideration
become unconditional.
The contract liabilities are related to the down payment received from the customer after the completionof the installation and configuration work for the installation and configuration of the Internet connection
equipment in the provision of telecommunications services. Contract liabilities are depleted uponrecognition of revenues.
Of the amount of revenue recognized in the current consolidated fiscal year, the amount included in thebalance of contract liabilities as of the beginning of the fiscal year was 496 million yen.
In addition, there is no revenue recognized in the current consolidated fiscal year due to performanceobligations fulfilled (or partially satisfied) in the past period.

- 19 -

2) Transaction price allocated to remaining performance obligations
The remaining performance obligation is related to the revenue from the provision of telecommunications services.
The total amount of transaction price allocated to the remaining performance obligations and the period forwhich revenue is expected to be recognized are as follows.
（Millions of yen）
June 2025

June 2026

June 2027

June 2028

June 2029
onwardTotal

Expectedrevenue to berecognized As

6,783

5,507

4,210

2,960

of June 30, 2024
7. Information per share(1) Net assets per share(2) Net income per share

285.59 yen
77.20 yen

- 20 -

3,728

23,1908. Significant Aftermath(Establishment of joint venture company)
We have established a joint venture company with H-Power Holdings Inc. (hereinafter referred to as “H-Power
Holdings”)(1) Background of Joint Venture Establishment
Our group, as a part of development of a service combining our telecommunication and renewable energy fields
together, have established a joint venture company EnePulse Inc. (hereinafter referred to as “EnePulse”) with H-Power
Holdings, which is a consolidated subsidiary of HIKARI TSUSHIN, INC., aiming to expand the sales channels and toincrease the corporate values of both companies though the collaboration.
At EnePulse, the strengths of Fibergate Group in the telecommunications field and the strength of H-Power Holdings inenergy filed are combined to provide infrastructure with both telecommunication service and energy service functions
for not only apartment complexes, medical and nursing care facilities, and hotels, but also new markets.
(2) Summary of the Joint Venture(1) Trade name(2) Address(3) Title and name of representative

EnePulse Corporation
2-10-12 Shiba-Daimon, Minato-ku, Tokyo
Taichi Yamaji, President and Representative Director
Outsourced sales of telecommunications services
Contract sales of renewable energy services
Contract sales of energy services
20 million yen
July 23rd, 2024
June
Fibergate Inc. 51%
H-Power Holdings. Inc. 49%(4) Business(5) Capital stock(6) Date of Establishment(7) Accounting period(8) Major shareholders and shareholding ratio- 21 -

Statement of changes in shareholders' equity (from July 1, 2023 to June 30, 2024)（Millions of yen）
Valuationandtranslation
adjustments

Shareholders’ equity
Retainedearnings
Otherretainedearnings Retained
Retainedearnings
earnings
total
carriedforwardCapital surplus

CapitalBalance at the
beginning of
thecurrent
fiscal year
Fluctuationsin the current
fiscal year
Issuance of
new share
Dividendof surplus
Profitattributabl
e to ownersof parent
Acquisitio
noftreasuryshare
Disposal oftreasuryshare
Changes in
items otherthanshareholders’equity for thecurrent fiscal
year (net)Total changes
for the current
fiscal year
Balance at theend of thecurrent fiscal
year

Other
capitalsurplusCapitalreserve

494

400

0

0

17

Capitalsurplus
total

417

3,041

3,041

Treasury
stock

Total
Shareholders’equityOthervaluationdifferenceonavailablefor-salesecurities

△188

3,764

△0

0

△2

Share
award
rights

19

Total
net
assets

3,784

0

0

△305

△305

△305

△305

1,323

1,323

1,323

1,323

△188

△188

△188

20

17

17

△2

0

△19

△19

0

0

△2

△2

1,018

1,018

△168

847

0

△19

827

494

400

14

415

4,059

4,059

△356

4,611

0

－

4,611

(Notes) The listed amount is rounded down to the nearest million yen.

- 22 -

Non-Consolidated Notes Table
1. Notes on Significant Accounting Policies(1) Valuation Criteria and methods of Assets
1) Valuation criteria and methods of securities
Subsidiary Shares ......... We use the cost method based on the moving average method.
Other Securities
Anything other than stocks, etc. that do not have a market priceMarket value method (all valuation differences are processedby the direct net assets method, and the cost of sale is calculatedby the moving average method)
Stocks, etc. without market price ·····･･･Cost method based on moving average method
2) Valuation criteria and methods of inventories
Commodity･･We use the cost method based on the moving average method.
(Balance sheet value is calculated by the method of book value devaluation due to a decrease inprofitability.)(2) Methods of depreciation of fixed assets
1) Tangible fixed assets
We use the declining ratio method.
However, the straight-line method is used for buildings (excluding facilities attached to buildings) acquired on or after
April 1, 1998 and facilities attached to buildings acquired on or after April 1, 2016.
The main service life is as follows:
Build････････････････････････ 3 to 15 years
Tools, furniture & fixtures･･･
2 to 15 years
Communication equipmen････････ 10 years
2)

Intangible fixed assets
We use the straight-line method.
For software used by the Company, we use a straight-line method based on the period of use within the company (5 years).

- 23 -

(3) Basis for reporting allowances
1) Allowance for doubtful accounts
In order to prepare for bad debt expense on sales receivables, we consider the recoverability of general receivables
based on the actual rate of bad debts and specific receivables such as receivables of doubtful concern on a case-by-casebasis, and report the amount that is expected to be uncollectible.
2) Provision for bonuses
In order to use the funds for the payment of bonuses to our employees, we estimate the expenses to be borne in thecurrent fiscal year out of the expected amount to be paid in the future.
3) Provision for retirement benefits
In order to prepare for retirement benefits for employees, the Company applies a simplified method that uses theamount of retirement benefits required at the end of the fiscal year as a retirement benefit obligation for the calculationof provision for retirement benefits and retirement benefit expenses.
(4) Accounting criteria for revenue and expenses
The main revenues of the Group's home use business and business use business are the provision of telecommunication services
and the sale of products. In addition, the main revenue of the real estate business is the sale of real estate.
・Provision of telecommunication services
The obligation to perform the provision of telecommunication services consists of a performance obligation to
install and configure the Internet connection equipment at the service provided property (the “initial introduction
service”) and a performance obligation to provide the Internet service after the installation and configuration of theInternet connection device (hereinafter referred to as the “monthly usage fee service”).
If the initial introduction service and the monthly usage fee service are recognized as an integrated performanceobligation, both are reported as revenue according to the service period of the monthly usage fee. If the obligation
to perform the initial introduction service and the monthly usage fee service are not considered to be integrated, theinitial introduction service will report revenue at the time of completion of the installation and configuration workof the Internet-connecting device, and the monthly usage fee service will report revenue according to the contract
period of the monthly usage fee service.
・Sales of products
The sale of products is obligated to be fulfilled by the delivery of the products to the customer. Since control over the
product is transferred to the customer at the time the product is delivered, we judge it to be a performance obligation thatis satisfied at the time the delivery of the product is completed, and we recognize the revenue.
(5) Conversion Standards for Significant foreign currency-dominated assets or liabilities into Japanese currency
Foreign currency-denominated monetary claims and liabilities are converted into yen based on the spot exchange
rate at the end of the fiscal year, and the conversion difference is treated as profit or loss.

- 24 -

(6) Significant Hedge Accounting Methods
a. Methods of hedge accounting
With regard to interest rate swaps, we have adopted special treatment for those that meet the requirements for
special treatment.
b. Means of hedging and hedging targets
Means of hedging････Interest rate swaps
Hedging targets･･････Interest on borrowingsc. Hedging Policy
The Company engages in derivatives transactions for the purpose of avoiding the risk of interest rate fluctuations
on borrowings, and has a policy of not engaging in derivatives transactions for speculative purposes.
d. Method of evaluating hedging effectivenessInterest rate swap transactions meet the requirements for special treatment, so the evaluation of their effectivenessis omitted.
2. Notes on Significant accounting estimates
There are no applicable matters.
3. Notes on the Balance Sheet(1)Accumulated depreciation of tangible fixed assets･･･

6,841 million yen(2) Guarantee Debt
The Company provides debt guarantees for loans from financial institutions of the following affiliated companies:
FG Smart Asset Inc.
505 million yen(3) Monetary claims and liabilities to affiliated companies
Short-term monetary receivables ········
2 million yen
Short-term monetary liabilities ··········
896 million yen
4. Notes to Statement of Income
Turnover with affiliated companies
Turnover by operating transactions
Sales · ･･･････････････････････････････････
selling, general and administrative expenses ･････
Non-operating Transactions Affiliates･･････････････- 25 -

1 million yen
82 million yen
3 million yen

5. Notes on the Statement of changes in shareholders' equity
Matters concerning the type and total number of treasury stocks
Number of shares at
Number of sharesthe beginning of theincreased in theType of shares
current fiscal year
current fiscal year
(shares)(shares)Commonshare
181,172
159,100

Number of shares
decreased in thecurrent fiscal year
(shares)
18,065

Number of shares atthe end of the current
fiscal year (shares)
322,207（Notes）1. The increase of 159,100 treasury shares is due to the acquisition of treasury shares in accordance with aresolution of the Board of Directors.
2. The decrease of 18,065 treasury shares is due to the disposal of treasury shares under the company's employee
stock ownership plan for directors and employees.
6. Notes on Tax effect accounting related
Breakdown of deferred tax assets and liabilities by major causes
Current fiscal year
（June 30, 2024)
Deferred tax assets
Allowance for doubtful accounts
2 million yen
Provision for bonuses
25 million yen
Impairment loss
12 million yen
Bad debt expense
0 million yen
Accrued business tax
14 million yen
Excess depreciation
25 million yen
Contract liabilities
231 million yen
Accrued social insurance premiums
3 million yen
Retirement benefit liability
16 million yen
Amortization of deposit
1 million yen
Loss on valuation of goods
1 million yen
Stock-based remuneration expenses
35 million yen
Loss on devaluation of investment
11 million yen
securities
Others1 million yen
Deferred tax assets Sub total
384 million yen
Valuation allowance△13 million yen
Deferred tax assets Total
370 million yen
Deferred tax liabilities
Contract Assets
Deferred tax liabilities Total
Net deferred tax assets

17 million yen
17 million yen
353 million yen- 26 -

7.

Notes on Related Party Information（Million of yen）
Type

Subsidiarycompany

Subsidiarycompany

Nameofcompany,etc.

Holding(held) ratio ofvoting rights(%)

NOIS Inc.

(Holding)
Direct: 100%

FG
Smart
Asset Inc.

(Holding)
Direct: 100%

RelationshipwiththerelatedpartiesFund leasing
Concurrent
positions ofofficers, etc.

Concurrent
positions ofofficers, etc.

Detailsoftransaction

Transaction
amountAccount title

Balance atthe end of
the fiscal
year

Fund
borrowing(See Notes 1)

850

Short-termborrowings

850

Interest
payment onborrowing(See Notes 1)

3

－

－

Debt
guarantee(See Notes 2)

505

－

－

;/Transaction conditions and policy for determining transaction conditions, etc.
Notes: 1. The interest rate for borrowing of funds is determined rationally by taking into account market interest rates. We do
not provide collateral.
2. The debt guarantee to FG Smart Asset Inc. is a guarantee for loans from financial institutions. We do not receive aguarantee fee.
8.Notes on revenue recognition relatedThis is as described in "(5) Accounting Standards for Revenue and Expenses" in "1. Notes on Significant Accounting
Policies."
9. Note on Information per share(1) Net assets per share(2) Net income per share

227.51 yen
65.18 yen

10. Note of Significant post-balance sheet event(Establishment of joint venture company)
The same content is described in the consolidated notes table "8. Notes on significant subsequent events", so the description
has been omitted.

- 27 -