(Translation)

Dear Shareholders:Information to be Disclosed on the Internet upon Giving
Notice of the 66th Ordinary General Meeting of Shareholders

June 6, 2018
Funai Electric Co., Ltd.

CONTENTS

1.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ··················· 1

2.

NOTES TO NONCONSOLIDATED FINANCIAL STATEMENTS ··········· 13

The above-listed matters are deemed to have been provided to the shareholders when posted
on our Internet website (http://www2.funai.co.jp/en/investors/) in accordance as provided forin laws and ordinances and Article 14 of the Articles of Incorporation of the Company.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presenting the Consolidated Financial Statements
1.

Scope of consolidation(1)

Number of consolidated subsidiaries:(2)

Names of major consolidated subsidiaries:

20

FUNAI CORPORATION, INC., Funai Electric (HK) Ltd. and FUNAI (THAILAND)
CO., LTD.
(3)

Name of major nonconsolidated subsidiary:
FGS Co., Ltd.
(Reason for exclusion from consolidation)
All nonconsolidated subsidiaries are excluded from the scope of consolidation
because they are small companies and their aggregated total assets, net sales, net
income (loss) (based on the Company's equity interest) and retained earnings (basedon the Company's equity interest) do not have material impacts on the consolidated
financial statements.

2.

Application of equity method(1)

Number of nonconsolidated subsidiaries to which the equity method is applied: 0(2)Name of the major nonconsolidated subsidiary and associated company to which theequity method is not applied:
Nonconsolidated subsidiary: FGS Co., Ltd.
Associated company: Digitec Industrial Ltd.
(Reason for not applying the equity method)
The nonconsolidated subsidiaries and associated companies have minor impacts oneach of net income (loss) (based on the Company's equity interest) and retained
earnings (based on the Company's equity interest) and, as a whole, do not havematerial impacts on the consolidated financial statements.
(3)

Fiscal year ends of consolidated subsidiaries
The consolidated subsidiaries whose fiscal year ends differ from the consolidated
fiscal year end are as follows:
Name

Fiscal year end

P&F MEXICANA, S.A. DE C.V.

December 31

Zhong Yue FUNAI Electron Co.

December 31-1-

Zhong Shan Funai Electron Co.

December 31

Funai Trading Corp.

December 31

Funai Manufacturing,S.A.DE C.V.

December 31

For P&F MEXICANA, S.A. DE C.V., Funai Trading Corp. and Funai Manufacturing,
S.A. DE C.V. listed above, their financial statements as of their respective fiscal year
ends are used to prepare the consolidated financial statements with necessary
adjustments provided for consolidation purposes with regard to material transactions
between their respective fiscal year ends and the consolidated fiscal year end.
For Zhong Yue FUNAI Electron Co. and Zhong Shan Funai Electron Co., theirprovisional financial statements as of the consolidated balance sheet date are used toprepare the consolidated financial statements.
3.

Summary of significant accounting policies(1)

Valuation basis and methods of significant assets(i)Securities:
Available-for-sale securities:
Available-for-sale securities for which the fair values are readily determinable:
Stated at fair market value on the balance sheet date of the fiscal year
(Unrealized gain or loss is included directly in equity after adjusting for tax
effect. Costs of securities sold are determined by the moving averagemethod.)Available-for-sale securities for which the fair values are not readily
determinable:
Stated at cost determined by the moving average method(ii) Inventories:
As to the Company and its domestic consolidated subsidiaries, merchandise andfinished goods and work in process are stated principally at the lower of cost,
determined using the average method, or net selling value. Raw materials arestated principally at the lower of cost, determined using the first-in, first-out
method, or net selling value.
As to the foreign consolidated subsidiaries, merchandise and finished goods, workin process and raw materials are stated principally at the lower of cost, determinedusing the first-in, first-out method, or net selling value.
-2-

(2)

Depreciation method for major fixed assets(i)

Property, plant, and equipment (excluding lease assets):
Depreciation of the Company and its domestic consolidated subsidiaries iscomputed using the declining-balance method, while the straight-line method isapplied to buildings (excluding building accessories) acquired on and after April 1,
1998 and buildings and accompanying facilities acquired on and after April 1,
2016. Depreciation of the overseas consolidated subsidiaries is computed using
the straight-line method.
The useful lives of main property, plant and equipment are as follows:
Buildings and structures:
3–50 years
Machinery, equipment, and motor vehicles:
3–10 years
Tools, furniture, and fixtures:
1–20 years(ii) Intangible assets (excluding lease assets):
Amortization of intangible assets of the Company and its consolidated subsidiaries
is computed using the straight-line method. Patents are amortized over theestimated useful lives (8–10 years) and software for internal use is amortized overthe estimated useful lives (five years).
(iii) Lease assets:
Lease assets are depreciated using the straight-line method over the respective
lease periods with the residual value as zero.
(3) Basis for provision of significant reserves(i)

Allowance for doubtful accounts:
Allowance for doubtful accounts is stated to cover probable losses from bad debts
of receivables at the estimated uncollectable amount. The amount for generalreserve is estimated using the credit loss rate based on past experience, and thatfor specific reserve is estimated based on the individually expecteduncollectability.

(ii) Reserve for product warranty:
Reserve for product warranty is stated to cover the payment of after-sales service
costs of sold products at the projected amount based on past experience.
(iii) Liabilities for Directors’ and Audit & Supervisory Board Members’ retirement
benefits:-3-

Liabilities for Directors’ and Audit & Supervisory Board Members’ retirement
benefits are stated to cover the payment of retirement benefits to directors at therequired amount at balance sheet date based on internal regulations.
(4)

Other significant matters as the basis of preparing the consolidated financial statements(i)

Accounting method of retirement benefits:
Liabilities for retirement benefits and assets for retirement benefits are stated tocover the payment of employees’ retirement benefits at the amount of deducting
the fair value of plan assets from projected benefit obligations at the consolidatedbalance sheet date.
Certain consolidated subsidiaries apply the simplified method.
When calculating retirement benefit obligations, the benefit formula basis is used
to attribute the projected retirement benefits to the period through the fiscal year
under review.
The total transitional obligation was charged to income when first adopted, exceptthat of certain consolidated subsidiaries, which is amortized by the straight-line
method over 15 years.
Past service cost is amortized using the straight-line method over a period within
the average remaining years of service of the employees (10 years).
Actuarial gains or losses are amortized using the straight-line method over a
period within the average remaining service period of the employees (10 years)
starting from the following period.
Unrecognized actuarial gains or losses, unrecognized past service cost andunrecognized transitional obligation are recorded as defined retirement benefit
plans in accumulated other comprehensive income (loss) within equity after
adjusting for tax effects.

(ii) Accounting for consumption taxes:
Consumption taxes are excluded from the revenues and expense accounts.

-4-Notes to Consolidated Balance Sheet
Accumulated depreciation of assets
Accumulated depreciation of property, plant and equipment:-5-¥30,903 million

Notes to Consolidated Statement of Operations
Impairment losses
During the fiscal year under review, the Group recorded losses on impairment in thefollowing asset groups:
Use

Business
AssetsBusiness
AssetsBusiness
AssetsBusiness
AssetsBusiness
AssetsLocationType

Tools, furniture andfixtures
Lease assets (fixed)
Patent right
Software
Long-term prepaid
expenses
Buildings andstructures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
Buildings andstructures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
Land
Software
Buildings andstructures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
Software
Buildings andstructures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
Software

Funai Electric Co., Ltd.

FUNAI ELECTRIC (H.K.), LTD.

FUNAI (THAILAND) CO., LTD.

Funai Electric Philippines Inc.

Funai Electric Cebu, Inc.

-6-

Impairment
loss(million yen)
148
4
2,451
75
4,883
42
37
613
596
181
413
56
1
474
331
218
34
539
594
67
33

Use

Business
AssetsBusiness
AssetsBusiness
AssetsBusiness
AssetsBusiness
AssetsBusiness
AssetsLocationType

FEP REAL ESTATE, INC.

Land

FUNAI CORPORATION, INC.

Funai Trading Corp.

Funai Lexington Technology Corporation

Funai Manufacturing, S.A. DE C.V.

P&F MEXICANA, S.A. DE C.V.

Total

Buildings andstructures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
Lease assets (tangible)
Buildings andstructures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
Software
Buildings andstructures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
Software
Buildings andstructures
Machinery, equipment
and vehicles
Tools, furniture andfixtures
SoftwareMachinery, equipment
and vehicles
Tools, furniture andfixtures
SoftwareImpairment
loss(million yen)
42
8
2
3
293
5
27
33
55
59
136
66
3
13
5
4
8
3
1
13
12,586

In principle, on the impairment reviews, the Group categorizes business assets on thebasis of a legal entity whose cash inflows and outflows are continuously recorded. Idle
assets are separated individually.

-7-

The Group reduced the carrying amount to the recoverable value of business assets
whose profitability has markedly decreased, and recorded such reduction (12,586 million yen)as impairment loss for this fiscal year.
The recoverable value of the asset is measured based on the net selling price forbuildings and structures and land, and the net selling price based on the valuation calculated
rationally by a real estate appraiser etc. is used, assets other than those mentioned above aremeasured based on the net selling price and the net selling price is calculated as zero.
Notes to Consolidated Statement of Changes in Equity
1.

Type and total number of shares issued, and type and number of treasury shares(thousands of share)

Shares issued
Shares of common stock
Total
Shares of treasury stock
Shares of common stock
Total

Number ofshares as ofApril 1, 2015

Increase in thenumber ofshares during
the year

Decrease in the
Number of
number ofshares as ofshares during
March 31, 2016
the year

36,13036,130--36,13036,130

2,011
2,011

0
0

-

2,011
2,011

(Note) The increase of 0 thousand treasury shares of common stock resulted from theacquisition of less-than-one-unit shares.

-8-

2.

Dividends(1)

Amount of dividends paid:

Resolution

Type of shares

Meeting of theBoard of Directors
Shares ofheld on May 25,
common stock
2017

(2)

Total amountof dividends(million yen)Amount ofdividend per
share
(yen)

Record date

Effective date

341

10

March 31, 2017

June 8, 2017

Dividends whose record date is in the fiscal year ended March 31, 2016, but whose
effective date will be in the fiscal year ending March 31, 2017, are as follows:
Not applicable.

3.

Stock acquisition rights

Description of stock acquisitionrightsType of shares to be issued ortransferred upon exercise ofstock acquisition rights

Number of shares for stockacquisition rights (shares)
As of March 31, 2018

The first stock acquisition rights
issued in the year ended March 31,
2015

Shares of common stock

15,60015,600Total(Note) Any stock acquisition right for which the exercise period has yet to start is excluded.

-9-

Notes to Financial Instruments
1.

Status of financial instruments

The Group obtains financing from banks and invests funds in short-term deposits, etc.
The Group uses derivatives to reduce risks which are described below, and has a policy not
to conduct speculative trading.
With regard to customers’ credit risks relating to notes and accounts receivable - trade,the Group has stipulated sales management rules and manages the trading terms and credit
lines by each customer.
Investment securities are exposed to market risks. With regard to the risks, themarket values and the financial positions of the issuers are reviewed periodically andreported to the internal Investment and Loan Committee.
Notes and accounts payable - trade and accounts payable - other mostly become dueand payable within one year.
The Group has a policy of not using derivatives. However, as floating-rate loans are
exposed to interest rate risk, the Group may utilize derivatives (interest rate swap
agreements) as hedging instruments according to individual loan contracts. Such derivativetransactions shall be executed and managed in accordance with the internal rules. To
mitigate credit risk, the Group enters into transactions solely with financial institutions withhigh ratings.

- 10 -

2.

Fair values, etc. of financial instruments

Amounts recorded in the consolidated balance sheet, fair values, and the differences
between them as of March 31, 2018, are as follows:(millions of yen)Amountrecorded in the
consolidatedbalance sheet*

Fair value*

Difference(1)

Cash and deposits

32,39032,390-(2)

Notes and accounts receivable-trade

9,953

9,953

-

49

49

-

(3)

Investment securities:
Available-for-sale securities(4)

Notes and accounts payable-trade(11,808)(11,808)-(5)

Accounts payable-other(10,372)(10,372)-(6)

Derivatives

-

-

-

* The items recognized as liabilities are shown in the parentheses.
(Notes) 1.

Calculation method of the fair values of financial instruments, securities andderivatives:(1) Cash and deposits and (2) Notes and accounts receivable-trade:
The book value is used for these items, as the fair value approximates the bookvalue as a result of their short settlement periods.
(3) Investment securities – Available-for-sale securities:
The fair value of stocks is determined by the prices of the stocks traded on an
exchange.
(4) Notes and accounts payable-trade and (5) Accounts payable-other:
The book value is used for these items, as the fair value approximates the bookvalue as a result of their short settlement periods.
(6) Derivatives:
Not applicable.
2. Unlisted shares (¥1,236 million on the consolidated balance sheet) have nomarket price and it is impossible to estimate their future cash flows. As it isextremely difficult to determine their fair values, they are not included in "(3)Investment securities – Available-for-sale securities".
Notes to Per Share Information- 11 -

Equity per share:
Net loss per share:¥1,485.96¥724.21

Other Notes
Additional Information(Tax system for dealing with tax havens)
On June 29, 2011, the Company received notices from the Osaka Regional Taxation
Bureau suggesting that a subsidiary in Hong Kong did not satisfy the conditions for exclusionfrom application of the tax system for dealing with tax havens and indicating its decision toincorporate the income generated by the subsidiary into the income of the Company for theduration of three years from April 1, 2007, to March 31, 2010, for taxation purposes.
Because the Company objected to this corrective action, the Company applied forassessments by the Osaka National Tax Tribunal on August 25, 2011. On July 18, 2012, theCompany received written verdicts on this case indicating that our assertions had been
dismissed. The Company, unable to accept the verdicts, filed an appeal to have the action
canceled with the Tokyo District Court on January 17, 2013, but on September 28, 2016 aruling to dismiss our request was made. The Company, unable to accept the decision,
appealed to the Tokyo High Court on October 12, 2016, but the Company received a ruling todismiss our request on October 26, 2017. In response to this decision, the Company did not
file a final appeal and a petition for accepting the final appeal, so the appeal trial judgment
was finalized on November 10, 2017.
The additional tax, including corporate income taxes, inhabitant taxes, and enterprisetaxes, amounted to ¥825 million (¥935 million, including incidental taxes). This amount
has been processed as expenses under the category of “Income taxes - prior years” in thefiscal year ended March 31, 2012 in accordance with Japanese Institute of Certified Public
Accountants Audit and Assurance Practice Committee Report No. 63, “Treatment of
Accounting and Presentation of Taxes for the purpose of Audits”.
The Company has recorded the amount that would be affected if the taxation wereapplied from the fiscal year ended March 31, 2011, which is the fiscal year following the
fiscal year to which the assessment was applied.
========================================================================(Note)All figures in the consolidated balance sheet, the consolidated statements ofoperations and changes in equity and the notes to the consolidated financial
statements are shown by disregarding any fractions of the relevant units. Equity
per share and net loss per share are shown by rounding off to two decimal places.

- 12 -NOTES TO NONCONSOLIDATED FINANCIAL STATEMENTS
Summary of Significant Accounting Policies:
1.

Valuation basis and methods of assets(1) Securities:
Investment in subsidiaries and associated companies:
Stated at cost determined by the moving-average method.
Available-for-sale securities:
Available-for-sale securities for which the fair values are readily determinable:
Stated at fair market value on the balance sheet date of the fiscal year
(Unrealized gain or loss is included directly in equity after adjusting for tax
effect. Costs of securities sold are determined by the moving-averagemethod.)Available-for-sale securities for which the fair values are not readily
determinable:
Stated at cost determined by the moving average method.
(2)

2.

Inventories:
Finished goods:

Stated at the lower of cost, determined using the averagemethod, or net selling value.

Raw materials:

Stated at the lower of cost, determined using the first-in,
first-out method, or net selling value.

Depreciation method for fixed assets:(1)

Property, plant and equipment (excluding lease assets):
Depreciation is computed by the declining-balance method, while the straight-line
method is applied to buildings (excluding building accessories) acquired on or after
April 1, 1998 and buildings and accompanying facilities acquired on and after April
1, 2016.

(2)

Intangible assets (excluding lease assets):
Amortization of intangible assets is computed using the straight-line method.
- 13 -

Patents are amortized over the estimated useful lives (8-10 years); and software
for internal use is amortized over the estimated useful lives (five years).
(3)

Lease assets:
Lease assets are depreciated using the straight-line method over the respective
lease periods with the residual value as zero.

3.

Basis for provision of reserves:(1) Allowance for doubtful accounts:
Allowance for doubtful accounts is stated to cover probable losses from bad debts
of receivables as the estimated uncollectable amount. The amount for generalreserve using the credit loss rate based on past experience, and that for specificreserve is estimated based on the individually expected uncollectability.
(2) Reserve for product warranty:
Reserve for product warranty is stated to cover the payment of after-sales service
costs of sold products at the projected amount based on past experience.
(3) Liabilities for retirement benefits:
Liabilities for retirement benefits and prepaid pension cost are stated to cover thepayment of employees’ retirement benefits based on retirement benefit obligations
and plan assets at the balance sheet date.
When calculating retirement benefit obligations, the benefit formula basis is used
to attribute the projected retirement benefits to the period through the fiscal year
under review.
Past service cost is amortized using the straight-line method over a period within
the average remaining years of service of the employees (10 years).
Actuarial gains or losses are amortized by the straight-line method over a period
within the average remaining service period of the employees (10 years) startingfrom the following period.
(4) Liabilities for directors’ retirement benefits:
Liabilities for directors’ retirement benefits are stated to cover the payment of
retirement benefits to directors at the required amount at the balance sheet datebased on internal regulations.
- 14 -

4.
Other significant matters as the basis of preparing the nonconsolidated financial
statements(1) Accounting method of retirement benefits:
Accounting methods for unrecognized actuarial gains or losses and unrecognized
past service cost related to retirement benefits differ from those for the
consolidated financial statements.
(2) Accounting for consumption taxes:
Consumption taxes are excluded from the revenues and expense accounts.

Notes to Nonconsolidated Balance Sheet:1.

Accumulated depreciation of assets:
Accumulated depreciation of property, plant and equipment:

2.

¥9,051 million

Monetary receivables/payables from/to subsidiaries and associated companies:
Short-term monetary receivables:
Long-term monetary receivables:
Short-term monetary payables:
Long-term monetary payables:¥13,867 million¥21,189 million¥9,531 million¥658 million

Notes to Nonconsolidated Statement of Income:1.

Amount of transactions with subsidiaries and associated companies
Operating transaction:
Sales amount:
Purchases amount:
Other operating expenses:
Non-operating transactions:¥83,392 million¥95,902 million¥2,320 million¥579 million- 15 -

2.

Impairment losses

During the fiscal year under review, the Company recorded losses on impairment in thefollowing asset groups:
Use

Business
AssetsLocationType

Impairment
loss(million yen)Tools, furniture andfixtures
Lease assets (fixed)
Patent right
Software
Long-term prepaid
expenses

Funai Electric Co., Ltd.

148
4
2,451
75
4,883

In principle, the Group categorizes business assets on the basis of the legal entity
whose cash flows and outflows are continuously recorded. Idle assets are separated
individually.
The Group reduced the carrying amount to the recoverable value of business assets
whose profitability has markedly decreased, and recorded such reduction (7,564 million yen)as impairment loss in the current fiscal year.
The recoverable amounts of the assets were determined at net selling price and were
calculated with the net selling price as zero.

Notes to Nonconsolidated Statement of Changes in Equity
Number of shares of treasury stock:(thousands of share)
Type of shares
Common stock

Decrease in the Number of shares
Number of shares Increase in theas of April 1, 2015 number of shares number of shares as of March 31,
during the year
during the year
2016
2,011

0

-

2,011

(Note) The increase of 0 thousand treasury shares of common stock resulted from theacquisition of less-than-one-unit shares.

- 16 -

Notes on Deferred Tax Accounting
Significant components of deferred tax assets and deferred tax liabilities(millions of yen)
Deferred tax assets
Liabilities for directors’ retirement benefits
Accounts payable-other
Allowance for doubtful accounts
Accrued expenses (bonuses)
Loss on revaluation of investment securities
Loss on revaluation of investment in subsidiaries and associatedcompanies
Impairment loss on fixed assets
Tax loss carryforwards
Other
Subtotal
Valuation allowance
Total
Deferred tax liabilities
Prepaid pension costReserve for advanced depreciation of fixed assets
Subtotal
Deferred tax liabilities, net- 17 -

314
1,124
5,317
135
20
4,722
2,109
16,061
1,025
30,830(30,830)
(401)
(53)
(454)
(454)

Notes on Transactions with Related Parties
Subsidiaries, etc.
(millions of yen)
Type

Name

Subsidiary

Funai Electric(HK) Ltd.

Voting rights
held by theCompany (orheld by others)

Direct, 100.00%

RelationshipTransaction

Production of
products of theCompany

Purchase ofelectronic
products
Loan offunds
Repaymentof loanInterest
incomeProvision ofallowancefor doubtful
accounts

AmountAccount

Balance asof March
31, 2016

44,188

Accounts
payable trade

1,297Long-term
loans
receivable

7,755

780

Allowancefordoubtfulaccounts

780

5,598
4,973
199

Subsidiary

FUNAI(THAILAND)
CO., LTD.

Direct, 80.87%
Indirect, 19.13%

Production of
products of theCompany

Purchase ofelectronic
products

30,584

Accounts
payable trade

1,647

Subsidiary

Funai Electric
Philippines Inc.

Direct, 100.00%

Production of
products of theCompany

Purchase ofelectronic
products

6,132

Accounts
payable trade789

Subsidiary

FEP
REAL ESTATE,
INC.

Direct, 40.00%

Aid for funds

Loan offunds-

Long-term
loans
receivable

916

75,205

Accounts
receivable trade

6,321

3,116

Accruedexpenses

2,991

5,855

Accounts
receivable trade

1,824

FUNAI
Subsidiary CORPORATION,
INC.

Indirect, 100.00%

Subsidiary

P&F USA, INC.

Indirect, 100.00%

Sale of productsof the Company

Sale ofelectronic
products
Transfer
pricing
taxationadjustments
Sale ofelectronic
products

Subsidiary

Funai Trading
Corp.

Direct, 100.00%

Sale of productsof the Company

Loan offunds

768

Sale ofelectronic
products

2,037

Subsidiary

Subsidiary(Note)P&F
MEXICANA,
S.A. DE C.V.

FUNAI EUROPE
GmbH

Direct, 100.00%
Indirect, 0.00%

Direct, 100.00%

Sale of productsof the Company

Sale of productsof the Company

Sale of productsof the Company

Loan offunds
Provision ofallowancefor doubtful
accounts
Loan offunds
Interest
incomeReversal of
allowancefor doubtful
accounts

-

1,293
261
47

Long-term
loans
receivable
Accounts
receivable tradeLong-term
loans
receivable
Allowancefordoubtfulaccounts

424

5,064
1,170

6,046

Long-term
loans
receivable

10,329Allowancefordoubtfulaccounts

10,329Transaction terms and policies on the determination of transaction terms, etc.:
As with the terms of ordinary transactions, transaction terms are determined in consideration- 18 -

of market prices and other factors.

Note to Per Share Information
Equity per share:¥1,504.87

Net loss per share:¥569.64

Other Notes
Additional Information(Tax system for dealing with tax havens)
On June 29, 2011, the Company received notices from the Osaka Regional Taxation
Bureau suggesting that a subsidiary in Hong Kong did not satisfy the conditions for exclusionfrom application of the tax system for dealing with tax havens and indicating its decision toincorporate the income generated by the subsidiary into the income of the Company for theduration of three years from April 1, 2007, to March 31, 2010, for taxation purposes.
Because the Company objected to this corrective action, the Company applied forassessments by the Osaka National Tax Tribunal on August 25, 2011. On July 18, 2012, theCompany received written verdicts on this case indicating that our assertions had been
dismissed. The Company, unable to accept the verdicts, filed an appeal to have the action
canceled with the Tokyo District Court on January 17, 2013, but on September 28, 2016 aruling to dismiss our request was made. The Company, unable to accept the decision,
appealed to the Tokyo High Court on October 12, 2016, but the Company received a ruling todismiss our request on October 26, 2017. In response to this decision, the Company did not
file a final appeal and a petition for accepting the final appeal, so the appeal trial judgment
was finalized on November 10, 2017.
The additional tax, including corporate income taxes, inhabitant taxes, and enterprisetaxes, amounted to ¥825 million (¥935 million, including incidental taxes). This amount
has been processed as expenses under the category of “Income taxes - prior years” in thefiscal year ended March 31, 2012 in accordance with Japanese Institute of Certified Public
Accountants Audit and Assurance Practice Committee Report No. 63, “Treatment of
Accounting and Presentation of Taxes for the purpose of Audits”.
The Company has recorded the amount that would be affected if the taxation wereapplied from the fiscal year ended March 31, 2011, which is the fiscal year following the
fiscal year to which the assessment was applied.
========================================================================(Note)All figures in the nonconsolidated balance sheet, the nonconsolidated statement ofincome, the nonconsolidated statement of changes in equity and the notes to thenonconsolidated financial statements are shown by disregarding any fractions of
the relevant units. Equity per share and net loss per share are shown by rounding
off to two decimal places.
- 19 -