EXHIBIT 99.1

INDEPENDENT AUDITORS REPORT

To the Board of
Directors and Shareholders of

Yahoo Japan Corporation

Tokyo, Japan:

We have audited the accompanying
consolidated financial statements of Yahoo Japan Corporation and its consolidated subsidiaries (the Company), which comprise the consolidated statements of financial position as of April 1, 2013 and March 31, 2014, and the
related consolidated statements of profit or loss, comprehensive income, changes in equity, and cash flows for the year ended March 31, 2014, and the related notes to the consolidated financial statements.

Managements Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial
Reporting Standards as issued by the International Accounting Standards Board; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing
standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures
selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal
control relevant to the Companys preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Companys internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements.

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

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Yahoo Japan
Corporation and its consolidated subsidiaries as of April 1, 2013 and March 31, 2014, and the results of their operations and their cash flows for the year ended March 31, 2014, in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board.

Other Matter

The accompanying consolidated statement of financial position of the Company as of March 31, 2015, and the related consolidated statements of profit or loss,
comprehensive income, changes in equity, and cash flows for the year ended March 31, 2015 were not audited, reviewed, or compiled by us and, accordingly, we do not express an opinion or any other form of assurance on them.

/s/ Deloitte Touche Tohmatsu LLC

September 24, 2015



---

Yahoo Japan Corporation and Consolidated Subsidiaries

Consolidated Statements of Financial Position





|                                                           |  |                      |           |  |                                      |  |                      |   |         |  |  |                                                   |  |   |                    |  |  |   |           | 
|---------------------------------------------------------- |  | -------------------- | --------- |  | ------------------------------------ |  | -------------------- | - | ------- |  |  | ------------------------------------------------- |  | - | ------------------ |  |  | - | --------- | 
|                                                           |  | Millions of Yen      |           |  | Thousands of U.S. Dollars(Note 2(3)) | 
|                                                           |  | As of
March 31, 2015 |           |  |                                      |  | As of
March 31, 2014 |   |         |  |  | As of
April 1, 2013
(Date of Transition
to IFRSs) |  |   | As ofMarch 31,2015 | 
|                                                           |  |                      |           |  |                                      |  |                      |   |         |  |  |                                                   |  |   |                    |  |  |   |           | 
|                                                           |  | Unaudited            |           |  |                                      |  |                      |   |         |  |  |                                                   |  |   | Unaudited          | 
|                                                           |  |                      |           |  |                                      | 
|ASSETS:                                                    |  |                      |           |  |                                      |  |                      |   |         |  |  |                                                   |  |   |                    |  |  |   |           | 
|Current assets:                                            |  |                      |           |  |                                      |  |                      |   |         |  |  |                                                   |  |   |                    |  |  |   |           | 
|Cash and cash equivalents (Note 7)                         |  | ¥                    | 503,937   |  |                                      |  |                      | ¥ | 482,337 |  |  |                                                   |  | ¥ | 409,588            |  |  | $ | 4,193,534 | 
|Trade and other receivables(Notes 8 and 25)                |  |                      | 217,736   |  |                                      |  |                      |   | 160,396 |  |  |                                                   |  |   | 143,874            |  |  |   | 1,811,900 | 
|Other financial assets(Notes 9 and 25)                     |  |                      | 15,902    |  |                                      |  |                      |   | 12,313  |  |  |                                                   |  |   | 13,556             |  |  |   | 132,329   | 
|Other current assets (Note 10)                             |  |                      | 4,253     |  |                                      |  |                      |   | 3,660   |  |  |                                                   |  |   | 2,900              |  |  |   | 35,392    | 
|                                                           |  |                      |           |  |                                      |  |                      |   |         |  |  |                                                   |  |   |                    |  |  |   |           | 
|                                                           |  |                      |           |  |                                      | 
|Total current assets                                       |  |                      | 741,828   |  |                                      |  |                      |   | 658,706 |  |  |                                                   |  |   | 569,918            |  |  |   | 6,173,155 | 
|                                                           |  |                      |           |  |                                      |  |                      |   |         |  |  |                                                   |  |   |                    |  |  |   |           | 
|                                                           |  |                      |           |  |                                      | 
|Non-current assets:                                        |  |                      |           |  |                                      |  |                      |   |         |  |  |                                                   |  |   |                    |  |  |   |           | 
|Property and equipment (Note 11)                           |  |                      | 67,466    |  |                                      |  |                      |   | 60,146  |  |  |                                                   |  |   | 51,067             |  |  |   | 561,421   | 
|Goodwill (Note 12)                                         |  |                      | 27,673    |  |                                      |  |                      |   | 15,809  |  |  |                                                   |  |   | 14,395             |  |  |   | 230,282   | 
|Intangible assets (Note 12)                                |  |                      | 32,382    |  |                                      |  |                      |   | 17,860  |  |  |                                                   |  |   | 16,929             |  |  |   | 269,468   | 
|Investments accounted for usingthe equity method (Note 13) |  |                      | 61,671    |  |                                      |  |                      |   | 34,364  |  |  |                                                   |  |   | 40,281             |  |  |   | 513,198   | 
|Other financial assets(Notes 9 and 25)                     |  |                      | 58,104    |  |                                      |  |                      |   | 49,532  |  |  |                                                   |  |   | 35,700             |  |  |   | 483,515   | 
|Deferred tax assets (Note 14)                              |  |                      | 15,105    |  |                                      |  |                      |   | 12,469  |  |  |                                                   |  |   | 14,104             |  |  |   | 125,697   | 
|Other non-current assets (Note 10)                         |  |                      | 3,374     |  |                                      |  |                      |   | 1,102   |  |  |                                                   |  |   | 875                |  |  |   | 28,077    | 
|                                                           |  |                      |           |  |                                      |  |                      |   |         |  |  |                                                   |  |   |                    |  |  |   |           | 
|                                                           |  |                      |           |  |                                      | 
|Total non-current assets                                   |  |                      | 265,775   |  |                                      |  |                      |   | 191,282 |  |  |                                                   |  |   | 173,351            |  |  |   | 2,211,658 | 
|                                                           |  |                      |           |  |                                      |  |                      |   |         |  |  |                                                   |  |   |                    |  |  |   |           | 
|                                                           |  |                      |           |  |                                      | 
|TOTAL ASSETS                                               |  | ¥                    | 1,007,603 |  |                                      |  |                      | ¥ | 849,988 |  |  |                                                   |  | ¥ | 743,269            |  |  | $ | 8,384,813 | 
|                                                           |  |                      |           |  |                                      |  |                      |   |         |  |  |                                                   |  |   |                    |  |  |   |           | 



| |  |       |  |            
| |  | ----- |  | -----------
| |  | - 2 - |  | (Continued)



---

Yahoo Japan Corporation and Consolidated Subsidiaries

Consolidated Statements of Financial Position





|                                                 |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|------------------------------------------------ |  | -------------------- | --------- | - | ------------------------------------ | - | ------- | ------------------------------------------------- |  | - | ------------------ | - |  | - | --------- | -
|                                                 |  | Millions of Yen      |           |   | Thousands of U.S. Dollars(Note 2(3)) |  
|                                                 |  | As of
March 31, 2015 |           |   | As of
March 31, 2014                 |   |         | As of
April 1, 2013
(Date of Transition
to IFRSs) |  |   | As ofMarch 31,2015 |  
|                                                 |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|                                                 |  | Unaudited            |           |   |                                      |   |         |                                                   |  |   | Unaudited          |  
|                                                 |  |                      |           |  
|LIABILITIES AND EQUITY:                          |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|Liabilities:                                     |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|Current liabilities:                             |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|Trade and other payables(Notes 15 and 25)        |  | ¥                    | 158,979   |   |                                      | ¥ | 142,562 |                                                   |  | ¥ | 121,608            |   |  | $ | 1,322,951 |  
|Other financial liabilities(Notes 16 and 25)     |  |                      | 9,671     |   |                                      |   | 5,108   |                                                   |  |   | 5,648              |   |  |   | 80,478    |  
|Income taxes payable (Note 14)                   |  |                      | 33,072    |   |                                      |   | 45,656  |                                                   |  |   | 42,127             |   |  |   | 275,210   |  
|Provisions (Note 17)                             |  |                      | 6,399     |   |                                      |   | 2,951   |                                                   |  |   | 4,299              |   |  |   | 53,250    |  
|Other current liabilities (Note 19)              |  |                      | 31,652    |   |                                      |   | 22,058  |                                                   |  |   | 20,261             |   |  |   | 263,393   |  
|                                                 |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|                                                 |  |                      |           |  
|Total current liabilities                        |  |                      | 239,773   |   |                                      |   | 218,335 |                                                   |  |   | 193,943            |   |  |   | 1,995,282 |  
|                                                 |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|                                                 |  |                      |           |  
|Non-current liabilities:                         |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|Other financial liabilities(Notes 16 and 25)     |  |                      | 920       |   |                                      |   | 128     |                                                   |  |   | 147                |   |  |   | 7,656     |  
|Provisions (Note 17)                             |  |                      | 22,842    |   |                                      |   | 2,655   |                                                   |  |   | 2,460              |   |  |   | 190,081   |  
|Deferred tax liabilities (Note 14)               |  |                      | 29        |   |                                      |   | 38      |                                                   |  |   | 31                 |   |  |   | 241       |  
|Other non-current liabilities(Note 19)           |  |                      | 3,485     |   |                                      |   | 1,113   |                                                   |  |   | 1,070              |   |  |   | 29,000    |  
|                                                 |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|                                                 |  |                      |           |  
|Total non-current liabilities                    |  |                      | 27,276    |   |                                      |   | 3,934   |                                                   |  |   | 3,708              |   |  |   | 226,978   |  
|                                                 |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|                                                 |  |                      |           |  
|Total liabilities                                |  |                      | 267,049   |   |                                      |   | 222,269 |                                                   |  |   | 197,651            |   |  |   | 2,222,260 |  
|                                                 |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|                                                 |  |                      |           |  
|Equity:                                          |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|Equity attributable to owners ofthe parent:      |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|Common stock (Note 22)                           |  |                      | 8,281     |   |                                      |   | 8,271   |                                                   |  |   | 8,037              |   |  |   | 68,911    |  
|Capital surplus (Notes 22 and 24)                |  |                      | 1,235     |   |                                      |   | 3,893   |                                                   |  |   | 3,694              |   |  |   | 10,277    |  
|Retained earnings (Note 22)                      |  |                      | 705,840   |   |                                      |   | 598,012 |                                                   |  |   | 522,311            |   |  |   | 5,873,679 |  
|Treasury stock (Note 22)                         |  |                      | (1,316    | ) |                                      |   | (526    | )                                                 |  |   | (372               | ) |  |   | (10,951   | )
|Accumulated othercomprehensive income            |  |                      | 11,962    |   |                                      |   | 10,033  |                                                   |  |   | 4,576              |   |  |   | 99,542    |  
|                                                 |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|Total equity attributableto owners of the parent |  |                      | 726,002   |   |                                      |   | 619,683 |                                                   |  |   | 538,246            |   |  |   | 6,041,458 |  
|Non-controlling interests                        |  |                      | 14,552    |   |                                      |   | 8,036   |                                                   |  |   | 7,372              |   |  |   | 121,095   |  
|                                                 |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|                                                 |  |                      |           |  
|Total equity                                     |  |                      | 740,554   |   |                                      |   | 627,719 |                                                   |  |   | 545,618            |   |  |   | 6,162,553 |  
|                                                 |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  
|                                                 |  |                      |           |  
|TOTAL LIABILITIES AND EQUITY                     |  | ¥                    | 1,007,603 |   |                                      | ¥ | 849,988 |                                                   |  | ¥ | 743,269            |   |  | $ | 8,384,813 |  
|                                                 |  |                      |           |   |                                      |   |         |                                                   |  |   |                    |   |  |   |           |  

See notes to consolidated financial statements.



| |  |       |  |            
| |  | ----- |  | -----------
| |  | - 3 - |  | (Concluded)



---

Yahoo Japan Corporation and Consolidated Subsidiaries



Consolidated Statements of Profit or Loss





|                                                                       |  |                     |         |  |                                      |   |         |           |  |   |           | 
|---------------------------------------------------------------------- |  | ------------------- | ------- |  | ------------------------------------ | - | ------- | --------- |  | - | --------- | 
|                                                                       |  | Millions of Yen     |         |  | Thousands of U.S. Dollars(Note 2(3)) |  
|                                                                       |  | Year EndedMarch 31, |         |  | Year EndedMarch 31,                  |  
|                                                                       |  | 2015                |         |  | 2014                                 |   |         | 2015      | 
|                                                                       |  | Unaudited           |         |  |                                      |   |         | Unaudited | 
|                                                                       |  |                     |        
|REVENUE                                                                |  | ¥                   | 428,488 |  |                                      | ¥ | 408,515 |           |  | $ | 3,565,682 | 
|                                                                       |  |                     |        
|COST OF SALES (Note 27)                                                |  |                     | 85,502  |  |                                      |   | 75,861  |           |  |   | 711,509   | 
|                                                                       |  |                     |         |  |                                      |   |         |           |  |   |           | 
|                                                                       |  |                     |        
|Gross profit                                                           |  |                     | 342,986 |  |                                      |   | 332,654 |           |  |   | 2,854,173 | 
|                                                                       |  |                     |        
|SELLING, GENERAL AND ADMINISTRATIVEEXPENSES (Note 27)                  |  |                     | 145,774 |  |                                      |   | 136,216 |           |  |   | 1,213,065 | 
|                                                                       |  |                     |         |  |                                      |   |         |           |  |   |           | 
|                                                                       |  |                     |        
|Operating income                                                       |  |                     | 197,212 |  |                                      |   | 196,438 |           |  |   | 1,641,108 | 
|                                                                       |  |                     |        
|OTHER NON-OPERATING INCOME (Note 28)                                   |  |                     | 10,638  |  |                                      |   | 13,194  |           |  |   | 88,525    | 
|                                                                       |  |                     |        
|OTHER NON-OPERATING EXPENSES                                           |  |                     | 1,224   |  |                                      |   | 1,313   |           |  |   | 10,186    | 
|                                                                       |  |                     |        
|EQUITY IN EARNINGS (LOSSES) OF ASSOCIATESAND A JOINT VENTURE (Note 13) |  |                     | 1,673   |  |                                      |   | (94     | )         |  |   | 13,922    | 
|                                                                       |  |                     |         |  |                                      |   |         |           |  |   |           | 
|                                                                       |  |                     |        
|PROFIT BEFORE TAX                                                      |  |                     | 208,299 |  |                                      |   | 208,225 |           |  |   | 1,733,369 | 
|                                                                       |  |                     |        
|INCOME TAX EXPENSE (Note 14)                                           |  |                     | 74,366  |  |                                      |   | 78,557  |           |  |   | 618,840   | 
|                                                                       |  |                     |         |  |                                      |   |         |           |  |   |           | 
|                                                                       |  |                     |        
|PROFIT FOR THE YEAR                                                    |  | ¥                   | 133,933 |  |                                      | ¥ | 129,668 |           |  | $ | 1,114,529 | 
|                                                                       |  |                     |         |  |                                      |   |         |           |  |   |           | 
|                                                                       |  |                     |        
|ATTRIBUTABLE TO:                                                       |  |                     |         |  |                                      |   |         |           |  |   |           | 
|Owners of the parent                                                   |  | ¥                   | 133,052 |  |                                      | ¥ | 128,605 |           |  | $ | 1,107,198 | 
|Non-controlling interests                                              |  |                     | 881     |  |                                      |   | 1,063   |           |  |   | 7,331     | 
|                                                                       |  |                     |         |  |                                      |   |         |           |  |   |           | 
|                                                                       |  |                     |        
|PROFIT FOR THE YEAR                                                    |  | ¥                   | 133,933 |  |                                      | ¥ | 129,668 |           |  | $ | 1,114,529 | 
|                                                                       |  |                     |         |  |                                      |   |         |           |  |   |           | 
|                                                                       |  |                     |        
|EARNINGS PER SHARE ATTRIBUTABLE TOOWNERS OF THE PARENT:                |  |                     |         |  |                                      |   |         |           |  |   |           | 
|Basic (yen and U.S. dollars) (Note 30)                                 |  |                     | ¥ 23.37 |  |                                      |   | ¥ 22.43 |           |  |   | $0.19     | 
|Diluted (yen and U.S. dollars) (Note 30)                               |  |                     | 23.37   |  |                                      |   | 22.43   |           |  |   | 0.19      | 

See notes to consolidated financial statements.



- 4 -



---

Yahoo Japan Corporation and Consolidated Subsidiaries



Consolidated Statements of Comprehensive Income





|                                                                        |  |                     |         |  |                                      |   |         |           |  |   |           | 
|----------------------------------------------------------------------- |  | ------------------- | ------- |  | ------------------------------------ | - | ------- | --------- |  | - | --------- | 
|                                                                        |  | Millions of Yen     |         |  | Thousands of U.S. Dollars(Note 2(3)) |  
|                                                                        |  | Year EndedMarch 31, |         |  | Year EndedMarch 31,                  |  
|                                                                        |  | 2015                |         |  | 2014                                 |   |         | 2015      | 
|                                                                        |  | Unaudited           |         |  |                                      |   |         | Unaudited | 
|                                                                        |  |                     |        
|PROFIT FOR THE YEAR                                                     |  | ¥                   | 133,933 |  |                                      | ¥ | 129,668 |           |  | $ | 1,114,529 | 
|                                                                        |  |                     |         |  |                                      |   |         |           |  |   |           | 
|                                                                        |  |                     |        
|OTHER COMPREHENSIVE INCOME:                                             |  |                     |         |  |                                      |   |         |           |  |   |           | 
|Items that may be reclassified subsequently toprofit or loss:           |  |                     |         |  |                                      |   |         |           |  |   |           | 
|Available-for-sale financial assets (Notes 26 and 29)                   |  |                     | 41      |  |                                      |   | 5,098   |           |  |   | 341       | 
|Exchange differences on translating foreignoperations (Notes 26 and 29) |  |                     | 928     |  |                                      |   | 175     |           |  |   | 7,722     | 
|Share of other comprehensive income of associates(Note 29)              |  |                     | 976     |  |                                      |   | 191     |           |  |   | 8,123     | 
|                                                                        |  |                     |         |  |                                      |   |         |           |  |   |           | 
|                                                                        |  |                     |        
|Other comprehensive income, net of tax                                  |  |                     | 1,945   |  |                                      |   | 5,464   |           |  |   | 16,186    | 
|                                                                        |  |                     |         |  |                                      |   |         |           |  |   |           | 
|                                                                        |  |                     |        
|TOTAL COMPREHENSIVE INCOME                                              |  | ¥                   | 135,878 |  |                                      | ¥ | 135,132 |           |  | $ | 1,130,715 | 
|                                                                        |  |                     |         |  |                                      |   |         |           |  |   |           | 
|                                                                        |  |                     |        
|ATTRIBUTABLE TO:                                                        |  |                     |         |  |                                      |   |         |           |  |   |           | 
|Owners of the parent                                                    |  | ¥                   | 134,981 |  |                                      | ¥ | 134,062 |           |  | $ | 1,123,250 | 
|Non-controlling interests                                               |  |                     | 897     |  |                                      |   | 1,070   |           |  |   | 7,465     | 
|                                                                        |  |                     |         |  |                                      |   |         |           |  |   |           | 
|                                                                        |  |                     |        
|TOTAL COMPREHENSIVE INCOME                                              |  | ¥                   | 135,878 |  |                                      | ¥ | 135,132 |           |  | $ | 1,130,715 | 
|                                                                        |  |                     |         |  |                                      |   |         |           |  |   |           | 

See notes to consolidated financial statements.



- 5 -



---

Yahoo Japan Corporation and Consolidated Subsidiaries

Consolidated Statements of Changes in Equity





|                                                                         |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |         |   |  |  |   |        |   |  |  |   |         |  
|------------------------------------------------------------------------ |  | ---------------------------------------------- | - | --------------- |  | ----------------- |  | ------------- | ------ | ----------------------------------- |  | ----- | - | ------------------------ | - | ----- |  | - | ------- | - |  |  | - | ------ |  |  |  | - | ------- | - |  |  | - | ------ | - |  |  | - | ------- | -
|                                                                         |  | Millions of Yen                               
|                                                                         |  | Interests Attributable to Owners of the Parent |   |                 |  |                  
|                                                                         |  | CommonStock                                    |   | Capital Surplus |  | Retained Earnings |  | TreasuryStock |        | AccumulatedOtherComprehensiveIncome |  | Total |   | Non-controllingInterests |   | Total
|                                                                         |  |                                                |   |                 |  |                   |  |              
|BALANCE AT APRIL 1, 2013                                                 |  |                                                | ¥ | 8,037           |  |                   |  | ¥             | 3,694  |                                     |  |       | ¥ | 522,311                  |   |       |  | ¥ | (372    | ) |  |  | ¥ | 4,576  |  |  |  | ¥ | 538,246 |   |  |  | ¥ | 7,372  |   |  |  | ¥ | 545,618 |  
|                                                                         |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |         |   |  |  |   |        |   |  |  |   |         |  
|                                                                         |  |                                                |   |                 |  |                   |  |              
|Profit for the year                                                      |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   | 128,605                  |   |       |  |   |         |   |  |  |   |        |  |  |  |   | 128,605 |   |  |  |   | 1,063  |   |  |  |   | 129,668 |  
|Other comprehensive income, net of tax                                   |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   | 5,457  |  |  |  |   | 5,457   |   |  |  |   | 7      |   |  |  |   | 5,464   |  
|                                                                         |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |         |   |  |  |   |        |   |  |  |   |         |  
|Total comprehensive income for the year                                  |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   | 128,605                  |   |       |  |   |         |   |  |  |   | 5,457  |  |  |  |   | 134,062 |   |  |  |   | 1,070  |   |  |  |   | 135,132 |  
|                                                                         |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |         |   |  |  |   |        |   |  |  |   |         |  
|Issue of common stock (Note 22)                                          |  |                                                |   | 234             |  |                   |  |               | 234    |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   | 468     |   |  |  |   |        |   |  |  |   | 468     |  
|Payment of dividends (Note 23)                                           |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   | (23,058                  | ) |       |  |   |         |   |  |  |   |        |  |  |  |   | (23,058 | ) |  |  |   | (201   | ) |  |  |   | (23,259 | )
|Purchase and disposal of treasury stock                                  |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   | (30,000 | ) |  |  |   |        |  |  |  |   | (30,000 | ) |  |  |   |        |   |  |  |   | (30,000 | )
|Changes attributable to acquisition or loss of control over subsidiaries |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |         |   |  |  |   | 98     |   |  |  |   | 98      |  
|Changes in ownership interests in subsidiaries without losing control    |  |                                                |   |                 |  |                   |  |               | (165   | )                                   |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   | (165    | ) |  |  |   | (303   | ) |  |  |   | (468    | )
|Cancellation of treasury stock                                           |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   | (29,846                  | ) |       |  |   | 29,846  |   |  |  |   |        |  |  |  |   |         |   |  |  |   |        |   |  |  |   |         |  
|Others                                                                   |  |                                                |   |                 |  |                   |  |               | 130    |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   | 130     |   |  |  |   |        |   |  |  |   | 130     |  
|                                                                         |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |         |   |  |  |   |        |   |  |  |   |         |  
|Total                                                                    |  |                                                |   | 234             |  |                   |  |               | 199    |                                     |  |       |   | (52,904                  | ) |       |  |   | (154    | ) |  |  |   |        |  |  |  |   | (52,625 | ) |  |  |   | (406   | ) |  |  |   | (53,031 | )
|                                                                         |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |         |   |  |  |   |        |   |  |  |   |         |  
|                                                                         |  |                                                |   |                 |  |                   |  |              
|BALANCE AT MARCH 31, 2014                                                |  |                                                |   | 8,271           |  |                   |  |               | 3,893  |                                     |  |       |   | 598,012                  |   |       |  |   | (526    | ) |  |  |   | 10,033 |  |  |  |   | 619,683 |   |  |  |   | 8,036  |   |  |  |   | 627,719 |  
|                                                                         |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |         |   |  |  |   |        |   |  |  |   |         |  
|                                                                         |  |                                                |   |                 |  |                   |  |              
|Profit for the year                                                      |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   | 133,052                  |   |       |  |   |         |   |  |  |   |        |  |  |  |   | 133,052 |   |  |  |   | 881    |   |  |  |   | 133,933 |  
|Other comprehensive income, net of tax                                   |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   | 1,929  |  |  |  |   | 1,929   |   |  |  |   | 16     |   |  |  |   | 1,945   |  
|                                                                         |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |         |   |  |  |   |        |   |  |  |   |         |  
|Total comprehensive income for the year                                  |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   | 133,052                  |   |       |  |   |         |   |  |  |   | 1,929  |  |  |  |   | 134,981 |   |  |  |   | 897    |   |  |  |   | 135,878 |  
|                                                                         |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |         |   |  |  |   |        |   |  |  |   |         |  
|Issue of common stock (Note 22)                                          |  |                                                |   | 10              |  |                   |  |               | 10     |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   | 20      |   |  |  |   |        |   |  |  |   | 20      |  
|Payment of dividends (Note 23)                                           |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   | (25,224                  | ) |       |  |   |         |   |  |  |   |        |  |  |  |   | (25,224 | ) |  |  |   | (223   | ) |  |  |   | (25,447 | )
|Purchase and disposal of treasury stock                                  |  |                                                |   |                 |  |                   |  |               | 2      |                                     |  |       |   |                          |   |       |  |   | (790    | ) |  |  |   |        |  |  |  |   | (788    | ) |  |  |   |        |   |  |  |   | (788    | )
|Changes attributable to acquisition or loss of control over subsidiaries |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |         |   |  |  |   | 8,315  |   |  |  |   | 8,315   |  
|Changes in ownership interests in subsidiaries without losing control    |  |                                                |   |                 |  |                   |  |               | (2,716 | )                                   |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   | (2,716  | ) |  |  |   | (2,473 | ) |  |  |   | (5,189  | )
|Others                                                                   |  |                                                |   |                 |  |                   |  |               | 46     |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   | 46      |   |  |  |   |        |   |  |  |   | 46      |  
|                                                                         |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |         |   |  |  |   |        |   |  |  |   |         |  
|Total                                                                    |  |                                                |   | 10              |  |                   |  |               | (2,658 | )                                   |  |       |   | (25,224                  | ) |       |  |   | (790    | ) |  |  |   |        |  |  |  |   | (28,662 | ) |  |  |   | 5,619  |   |  |  |   | (23,043 | )
|                                                                         |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |         |   |  |  |   |        |   |  |  |   |         |  
|                                                                         |  |                                                |   |                 |  |                   |  |              
|BALANCE AT MARCH 31, 2015 (UNAUDITED)                                    |  |                                                | ¥ | 8,281           |  |                   |  | ¥             | 1,235  |                                     |  |       | ¥ | 705,840                  |   |       |  | ¥ | (1,316  | ) |  |  | ¥ | 11,962 |  |  |  | ¥ | 726,002 |   |  |  | ¥ | 14,552 |   |  |  | ¥ | 740,554 |  
|                                                                         |  |                                                |   |                 |  |                   |  |               |        |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |         |   |  |  |   |        |   |  |  |   |         |  



| |  |       |  |            
| |  | ----- |  | -----------
| |  | - 6 - |  | (Continued)



---

Yahoo Japan Corporation and Consolidated Subsidiaries

Consolidated Statements of Changes in Equity





|                                                                         |  |                                                |   |                 |  |                   |  |               |         |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |           |   |  |  |   |         |   |  |  |   |           |  
|------------------------------------------------------------------------ |  | ---------------------------------------------- | - | --------------- |  | ----------------- |  | ------------- | ------- | ----------------------------------- |  | ----- | - | ------------------------ | - | ----- |  | - | ------- | - |  |  | - | ------ |  |  |  | - | --------- | - |  |  | - | ------- | - |  |  | - | --------- | -
|                                                                         |  | Thousands of U.S. Dollars (Note 2(3))         
|                                                                         |  | Interests Attributable to Owners of the Parent |   |                 |  |                  
|                                                                         |  | CommonStock                                    |   | Capital Surplus |  | Retained Earnings |  | TreasuryStock |         | AccumulatedOtherComprehensiveIncome |  | Total |   | Non-controllingInterests |   | Total
|                                                                         |  |                                                |   |                 |  |                   |  |              
|BALANCE AT MARCH 31, 2014                                                |  |                                                | $ | 68,828          |  |                   |  | $             | 32,396  |                                     |  |       | $ | 4,976,384                |   |       |  | $ | (4,377  | ) |  |  | $ | 83,490 |  |  |  | $ | 5,156,721 |   |  |  | $ | 66,871  |   |  |  | $ | 5,223,592 |  
|                                                                         |  |                                                |   |                 |  |                   |  |               |         |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |           |   |  |  |   |         |   |  |  |   |           |  
|                                                                         |  |                                                |   |                 |  |                   |  |              
|Profit for the year                                                      |  |                                                |   |                 |  |                   |  |               |         |                                     |  |       |   | 1,107,198                |   |       |  |   |         |   |  |  |   |        |  |  |  |   | 1,107,198 |   |  |  |   | 7,331   |   |  |  |   | 1,114,529 |  
|Other comprehensive income, net of tax                                   |  |                                                |   |                 |  |                   |  |               |         |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   | 16,052 |  |  |  |   | 16,052    |   |  |  |   | 134     |   |  |  |   | 16,186    |  
|                                                                         |  |                                                |   |                 |  |                   |  |               |         |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |           |   |  |  |   |         |   |  |  |   |           |  
|Total comprehensive income for the year                                  |  |                                                |   |                 |  |                   |  |               |         |                                     |  |       |   | 1,107,198                |   |       |  |   |         |   |  |  |   | 16,052 |  |  |  |   | 1,123,250 |   |  |  |   | 7,465   |   |  |  |   | 1,130,715 |  
|                                                                         |  |                                                |   |                 |  |                   |  |               |         |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |           |   |  |  |   |         |   |  |  |   |           |  
|Issue of common stock (Note 22)                                          |  |                                                |   | 83              |  |                   |  |               | 83      |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   | 166       |   |  |  |   |         |   |  |  |   | 166       |  
|Payment of dividends (Note 23)                                           |  |                                                |   |                 |  |                   |  |               |         |                                     |  |       |   | (209,903                 | ) |       |  |   |         |   |  |  |   |        |  |  |  |   | (209,903  | ) |  |  |   | (1,856  | ) |  |  |   | (211,759  | )
|Purchase and disposal of treasury stock                                  |  |                                                |   |                 |  |                   |  |               | 17      |                                     |  |       |   |                          |   |       |  |   | (6,574  | ) |  |  |   |        |  |  |  |   | (6,557    | ) |  |  |   |         |   |  |  |   | (6,557    | )
|Changes attributable to acquisition or loss of control over subsidiaries |  |                                                |   |                 |  |                   |  |               |         |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |           |   |  |  |   | 69,194  |   |  |  |   | 69,194    |  
|Changes in ownership interests in subsidiaries without losing control    |  |                                                |   |                 |  |                   |  |               | (22,601 | )                                   |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   | (22,601   | ) |  |  |   | (20,579 | ) |  |  |   | (43,180   | )
|Others                                                                   |  |                                                |   |                 |  |                   |  |               | 382     |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   | 382       |   |  |  |   |         |   |  |  |   | 382       |  
|                                                                         |  |                                                |   |                 |  |                   |  |               |         |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |           |   |  |  |   |         |   |  |  |   |           |  
|Total                                                                    |  |                                                |   | 83              |  |                   |  |               | (22,119 | )                                   |  |       |   | (209,903                 | ) |       |  |   | (6,574  | ) |  |  |   |        |  |  |  |   | (238,513  | ) |  |  |   | 46,759  |   |  |  |   | (191,754  | )
|                                                                         |  |                                                |   |                 |  |                   |  |               |         |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |           |   |  |  |   |         |   |  |  |   |           |  
|                                                                         |  |                                                |   |                 |  |                   |  |              
|BALANCE AT MARCH 31, 2015 (UNAUDITED)                                    |  |                                                | $ | 68,911          |  |                   |  | $             | 10,277  |                                     |  |       | $ | 5,873,679                |   |       |  | $ | (10,951 | ) |  |  | $ | 99,542 |  |  |  | $ | 6,041,458 |   |  |  | $ | 121,095 |   |  |  | $ | 6,162,553 |  
|                                                                         |  |                                                |   |                 |  |                   |  |               |         |                                     |  |       |   |                          |   |       |  |   |         |   |  |  |   |        |  |  |  |   |           |   |  |  |   |         |   |  |  |   |           |  

See notes to consolidated financial statements.



| |  |       |  |            
| |  | ----- |  | -----------
| |  | - 7 - |  | (Concluded)



---

Yahoo Japan Corporation and Consolidated Subsidiaries



Consolidated Statements of Cash Flows





|                                                                                   |  |                     |         |   |                                      |   |         |           |  |   |           |  
|---------------------------------------------------------------------------------- |  | ------------------- | ------- | - | ------------------------------------ | - | ------- | --------- |  | - | --------- | -
|                                                                                   |  | Millions of Yen     |         |   | Thousands of U.S. Dollars(Note 2(3)) |  
|                                                                                   |  | Year EndedMarch 31, |         |   | Year EndedMarch 31,                  |  
|                                                                                   |  | 2015                |         |   | 2014                                 |   |         | 2015      | 
|                                                                                   |  | Unaudited           |         |   |                                      |   |         | Unaudited | 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                              |  |                     |         |   |                                      |   |         |           |  |   |           |  
|Profit before tax                                                                  |  | ¥                   | 208,299 |   |                                      | ¥ | 208,225 |           |  | $ | 1,733,369 |  
|Depreciation and amortization                                                      |  |                     | 16,936  |   |                                      |   | 13,452  |           |  |   | 140,934   |  
|Gain on remeasurement of investments in associatesacquired in stages (Note 28)     |  |                     | (6,249  | ) |                                      |   |         |           |  |   | (52,001   | )
|Increase in trade and other receivables                                            |  |                     | (22,536 | ) |                                      |   | (16,326 | )         |  |   | (187,534  | )
|Increase in trade and other payables                                               |  |                     | 15,800  |   |                                      |   | 21,207  |           |  |   | 131,480   |  
|Gain on sale of available-for-sale financial assets                                |  |                     | (511    | ) |                                      |   | (11,742 | )         |  |   | (4,252    | )
|Others                                                                             |  |                     | (2,309  | ) |                                      |   | (5,497  | )         |  |   | (19,215   | )
|                                                                                   |  |                     |         |   |                                      |   |         |           |  |   |           |  
|Subtotal                                                                           |  |                     | 209,430 |   |                                      |   | 209,319 |           |  |   | 1,742,781 |  
|Income taxespaid                                                                  |  |                     | (83,190 | ) |                                      |   | (76,526 | )         |  |   | (692,269  | )
|                                                                                   |  |                     |         |   |                                      |   |         |           |  |   |           |  
|                                                                                   |  |                     |        
|Net cash generated by operating activities                                         |  |                     | 126,240 |   |                                      |   | 132,793 |           |  |   | 1,050,512 |  
|                                                                                   |  |                     |         |   |                                      |   |         |           |  |   |           |  
|                                                                                   |  |                     |        
|CASH FLOWS FROM INVESTING ACTIVITIES:                                              |  |                     |         |   |                                      |   |         |           |  |   |           |  
|Payment into time deposits                                                         |  |                     |         |   |                                      |   | (50,000 | )         |  |   |           |  
|Withdrawal of time deposits                                                        |  |                     | 30      |   |                                      |   | 54,200  |           |  |   | 250       |  
|Purchase of property and equipment                                                 |  |                     | (17,096 | ) |                                      |   | (19,748 | )         |  |   | (142,265  | )
|Purchase of intangible assets                                                      |  |                     | (7,284  | ) |                                      |   | (2,974  | )         |  |   | (60,614   | )
|Purchase of other investments                                                      |  |                     | (20,977 | ) |                                      |   | (7,032  | )         |  |   | (174,561  | )
|Acquisition of shares of subsidiaries (Note 31)                                    |  |                     | (21,762 | ) |                                      |   | (2,036  | )         |  |   | (181,093  | )
|Proceeds from sale of available-for-sale financial assets                          |  |                     | 2,161   |   |                                      |   | 18,606  |           |  |   | 17,983    |  
|Others                                                                             |  |                     | (2,937  | ) |                                      |   | 1,709   |           |  |   | (24,442   | )
|                                                                                   |  |                     |         |   |                                      |   |         |           |  |   |           |  
|                                                                                   |  |                     |        
|Net cash used in investing activities                                              |  |                     | (67,865 | ) |                                      |   | (7,275  | )         |  |   | (564,742  | )
|                                                                                   |  |                     |         |   |                                      |   |         |           |  |   |           |  
|                                                                                   |  |                     |        
|CASH FLOWS FROM FINANCING ACTIVITIES:                                              |  |                     |         |   |                                      |   |         |           |  |   |           |  
|Repayment of long-term bank loans                                                  |  |                     | (5,450  | ) |                                      |   |         |           |  |   | (45,352   | )
|Purchase of treasury stock                                                         |  |                     | (795    | ) |                                      |   | (30,000 | )         |  |   | (6,616    | )
|Dividends paid                                                                     |  |                     | (25,205 | ) |                                      |   | (23,035 | )         |  |   | (209,745  | )
|Payment for acquisition of interests in a subsidiaryfrom non-controlling interests |  |                     | (5,187  | ) |                                      |   |         |           |  |   | (43,164   | )
|Others                                                                             |  |                     | (530    | ) |                                      |   | (94     | )         |  |   | (4,410    | )
|                                                                                   |  |                     |         |   |                                      |   |         |           |  |   |           |  
|                                                                                   |  |                     |        
|Net cash used in financing activities                                              |  |                     | (37,167 | ) |                                      |   | (53,129 | )         |  |   | (309,287  | )
|                                                                                   |  |                     |         |   |                                      |   |         |           |  |   |           |  
|                                                                                   |  |                     |        
|EFFECTS OF EXCHANGE RATE CHANGES ON CASHAND CASH EQUIVALENTS                       |  |                     | 392     |   |                                      |   | 360     |           |  |   | 3,262     |  
|                                                                                   |  |                     |         |   |                                      |   |         |           |  |   |           |  
|                                                                                   |  |                     |        
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                          |  |                     | 21,600  |   |                                      |   | 72,749  |           |  |   | 179,745   |  
|                                                                                   |  |                     |        
|CASH AND CASH EQUIVALENTS AT THE BEGINNINGOF THE YEAR (Note 7)                     |  |                     | 482,337 |   |                                      |   | 409,588 |           |  |   | 4,013,789 |  
|                                                                                   |  |                     |         |   |                                      |   |         |           |  |   |           |  
|                                                                                   |  |                     |        
|CASH AND CASH EQUIVALENTS AT THE END OFTHE YEAR (Note 7)                           |  | ¥                   | 503,937 |   |                                      | ¥ | 482,337 |           |  | $ | 4,193,534 |  
|                                                                                   |  |                     |         |   |                                      |   |         |           |  |   |           |  

See notes to consolidated financial statements.



- 8 -



---

Yahoo Japan Corporation and Consolidated Subsidiaries



Notes to Consolidated Financial Statements





|1. | REPORTING ENTITY
|-- | ----------------

Yahoo Japan Corporation (the Company) is a corporation
incorporated and domiciled in Japan. The parent company of the Company is SoftBank Group Corp. (renamed from SoftBank Corp. on July 1, 2015). SoftBank Group Corp. is also the ultimate parent company of the Yahoo Japan group. The registered address
of the Companys head office is Midtown Tower, 9-7-1 Akasaka, Minato-ku, Tokyo Japan. The nature of the Companys principal businesses is described in Note 6. Segment information.



|2. | BASIS OF PREPARATION
|-- | --------------------



| | (1) | Compliance with International Financial Reporting Standards and First-Time Adoption
| | --- | -----------------------------------------------------------------------------------

The accompanying consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting
Standards (IFRSs). These consolidated financial statements are the Companys first consolidated financial statements prepared under IFRSs. The date of transition to IFRSs is April 1, 2013. The Company applied IFRS 1 First-Time Adoption of International Financial Reporting Standards for the transition to IFRSs. The effect of the transition to IFRSs on the Companys financial position, results of operations, and
cash flows is provided in Note 35. First-time adoption of IFRSs.



| | (2) | Basis of Measurement
| | --- | --------------------

These consolidated financial statements have
been prepared on the historical cost basis, except for certain items, such as financial instruments, that are measured at fair value at the end of each reporting period, as explained in the accounting policies provided in Note 3.
Significant accounting policies.



| | (3) | Presentation Currency and Unit of Currency
| | --- | ------------------------------------------

These consolidated
financial statements have been presented in Japanese yen, which is the currency of the primary economic environment of the Company (functional currency), and are rounded to the nearest million yen as applicable.

The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers and have been made at the
rate of ¥120.17 to U.S.$1, the approximate rate of exchange at March 31, 2015. Such translations should not be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.



| | (4) | New and Revised Standards and Interpretations Issued but Not Yet Effective
| | --- | --------------------------------------------------------------------------

New or revised standards and interpretations that have been issued on or before the approval date of the accompanying consolidated financial
statements are summarized in the table below. The Company has not adopted these new or revised standards and interpretations. The Company is currently evaluating potential impacts from the application of these new or revised standards and
interpretations, but they are not estimable at the time of this report.



- 9 -



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IFRSs

MandatoryAdoption(For AnnualPeriods BeginningOn or After)

Scheduled  Date of Initial  Application

Purpose of
the New or Revised Standards
and InterpretationsIFRS 11

Joint Arrangements

January 1, 2016

Not determined

To clarify the accounting treatment of acquisition of joint operationsInternational Accounting Standard (IAS) 16

Property, Plant and Equipment

January 1, 2016

Not determined

To clarify acceptable depreciation methodsIAS 38

Intangible Assets

January 1, 2016

Not determined

To clarify acceptable amortization methodsIFRS 15

Revenue from Contracts with Customers

January 1, 2017

Not determined

To revise the accounting treatment and disclosure requirements for revenue recognitionIFRS 9

Financial Instruments

January 1, 2018

Not determined

To revise the accounting treatment and disclosure requirements regarding classification and measurement of financial instruments,
impairment and hedge accounting




|3. | SIGNIFICANT ACCOUNTING POLICIES
|-- | -------------------------------

The following accounting policies have been applied
consistently to all periods presented in these consolidated financial statements, including the consolidated statement of financial position as of the date of transition to IFRSs, unless otherwise specified.



| | (1) | Basis of Consolidation
| | --- | ----------------------



| | 1) | Basic policy of consolidation
| | -- | -----------------------------

The consolidated financial statements incorporate the
financial statements of the Company and entities controlled by the Company (collectively, the Group). Control is achieved when the Company has power over the investee, is exposed, or has rights, to variable returns from its involvement
with the investee, and has the ability to use its power to affect its returns. The Company considers all relevant facts and circumstances in assessing whether the Company controls the investee, including the size of its holding of voting rights or
similar rights or contractual arrangements with the investee.



- 10 -



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Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and
ceases when the Company loses control of the subsidiary. Comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Groups accounting
policies. All intragroup balances and transactions and unrealized gain or loss relating to transactions between members of the Group are eliminated in full on consolidation.



| | 2) | Changes in the Companys ownership interests in existing subsidiaries
| | -- | ---------------------------------------------------------------------

Changes in
the Companys ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Companys interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling
interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the Company. When the Company loses control of a subsidiary, a gain or loss is recognized in profit or loss
and is calculated as the difference between (a) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (b) the previous carrying amount of the assets (including goodwill), and
liabilities of the subsidiary and any non-controlling interests. Any amounts previously recognized in accumulated other comprehensive income in relation to that subsidiary are reclassified to profit or loss.



| | 3) | Business combinations
| | -- | ---------------------

Acquisitions of businesses are accounted for using the
acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group,
liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognized in profit
or loss as incurred.

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair
value, except that:



| | (a) | deferred tax assets and liabilities, and assets and liabilities related to employee benefit arrangements are recognized and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee
Benefits, respectively;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment
arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2 Share-based
Payment at the acquisition date; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | assets or disposal groups that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured
in accordance with that standard.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Goodwill arising upon a business acquisition is measured as the excess of the sum of the
consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirers previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. The excess, if negative, is recognized immediately in profit or loss.



- 11 -



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Non-controlling interests that are present ownership
interests and entitle their holders to a proportionate share of the entitys net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests
proportionate share of the recognized amounts of the acquirees identifiable net assets. Other types of non-controlling interests are measured at fair value, or, when applicable, on the basis specified in
another standard.

When a business combination is achieved in stages, the Groups previously held equity interest in the acquiree is
remeasured to its acquisition-date fair value and the resulting gain or loss, if any, is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have
previously been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.

In transitioning to IFRSs, the Company has applied the exemption in IFRS 1. Please see Note 35. First-time adoption of IFRSs.



| | 4) | Goodwill
| | -- | --------

Goodwill arising on an acquisition of a business is carried at cost as
established at the date of acquisition of the business less accumulated impairment losses, if any.

Each
cash-generating unit to which the goodwill is allocated is determined based on the unit at which the goodwill is monitored for internal management purposes, and is not larger than an operating segment before
aggregation.

Goodwill is not amortized and is allocated to a cash-generating unit or groups of cash-generating units. A cash-generating unit to which goodwill is allocated is tested for impairment annually, or more frequently when there is an indication that the
cash-generating unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the cash-generating unit and then to the other assets of the cash-generating unit pro rata based on the carrying amount of each asset in the cash-generating unit. Any impairment loss for goodwill is recognized directly in
profit or loss and is not reversed in subsequent periods.

The Groups policy for goodwill arising on acquisition of an associate is
described below in 5) Investments in associates.



| | 5) | Investments in associates
| | -- | -------------------------

An associate is an entity (a) over which the Group
holds 20% or more of the voting power and has significant influence in the financial and operating policy decisions, unless it can be clearly demonstrated that this is not the case; or (b) over which the Group can exercise significant influence
even if it holds less than 20% of the voting power.

An investment in an associate is accounted for using the equity method from the date
on which the investee becomes an associate. On acquisition of the investment in an associate, any excess of the cost of the investment over the Groups share of the net fair value of the identifiable assets and liabilities of the investee is
recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the Groups share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is
recognized immediately in profit or loss in the period in which the investment is acquired.



- 12 -



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Under the equity method, an investment in an associate is initially recognized in the
consolidated statements of financial position at cost and adjusted thereafter to recognize the Groups share of the profit or loss and other comprehensive income of the associate. When the Groups share of losses of an associate exceeds
the Groups interest in that associate (which includes any long-term interests that, in substance, form part of the Groups net investment in the associate), the Group discontinues recognizing its
share of further losses. Additional losses are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group discontinues the use of the equity method from the date when the investee ceases to be an associate, or when the investment is
classified as held for sale. When the Group retains an interest in the former associate and the retained interest is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as its fair
value on initial recognition in accordance with IAS 39 Financial Instruments: Recognition and Measurement. The difference between the carrying amount of the associate at the date the equity method was discontinued, and the fair
value of any retained interest and any proceeds from disposing of a part interest in the associate is included in the determination of the gain or loss on disposal of the associate.

The requirements of IAS 39 are applied to determine whether it is necessary to recognize any impairment loss with respect to the
Groups investment in an associate. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36 Impairment of Assets.



| | (2) | Foreign Currency Translation
| | --- | ----------------------------



| | 1) | Transactions denominated in foreign currencies
| | -- | ----------------------------------------------

The financial statements of each
company in the Group are prepared in the functional currency. Transactions in currencies other than each companys functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that
date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising
from translation are recognized in profit or loss in the period in which they arise, except those arising from 2) Foreign operations.



| | 2) | Foreign operations
| | -- | ------------------

For the purposes of presenting these consolidated financial
statements, the assets and liabilities of the Groups foreign operations (including adjustments for goodwill and fair value arising from acquisitions) are translated into Japanese yen using exchange rates prevailing at the end of each reporting
period. Income and expense items are translated at the average exchange rates for each quarter. Exchange differences arising from translating the financial statements of foreign operations are recognized in other comprehensive income and cumulative
differences are included in exchange differences on translating foreign operations in accumulated other comprehensive income.

These
cumulative differences are reclassified from equity to profit or loss when the Company fully or partially disposes of its interest in the foreign operation. In transitioning to IFRSs, the Company has applied the exemption related to IAS 21 in
IFRS 1. Please see Note 35. First-time adoption of IFRSs.



- 13 -



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| | (3) | Financial Instruments
| | --- | ---------------------



| | 1) | Recognition
| | -- | -----------

Financial assets and financial liabilities are recognized when a Group
entity becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities other than financial assets at fair value through profit or loss (financial assets at
FVTPL) and financial liabilities at fair value through profit or loss (financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the acquisition of financial assets at FVTPL and financial liabilities at FVTPL are recognized immediately in profit or loss.



| | 2) | Classification
| | -- | --------------



| | (a) | Non-derivative financial assets
| | --- | -------------------------------

Financial assets are
classified as financial assets at FVTPL, held-to-maturity investments, loans and receivables, and available-for-sale financial assets. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.



| | i) | Financial assets at FVTPL
| | -- | -------------------------

Financial assets held for trading purposes are initially measured
at fair value, with any net gains or losses arising on remeasurement recognized in profit or loss. Transaction costs are recognized in profit or loss when incurred. Interest and dividend income earned on the financial assets are recognized in profit
or loss.



| | ii) | Held-to-maturity investments
| | --- | ----------------------------

Non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the
Company has the positive intention and ability to hold to maturity are classified as held-to-maturity investments. Subsequent to initial recognition, held-to-maturity investments are measured at amortized cost using the effective interest method, less any impairment. Interest income based on the effective interest rate is
recognized in profit or loss.



| | iii) | Loans and receivables
| | ---- | ---------------------

Non-derivative financial
assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective
interest method, less any impairment. Interest income calculated based on the effective interest method is recognized in profit or loss.



| | iv) | Available-for-sale financial assets
| | --- | -----------------------------------

Non-derivative financial assets are classified as available-for-sale financial assets, if:



| | (A) | the assets are designated as available-for-sale financial assets at initial recognition; or
| | --- | ---------------------------------------------------------------------------------------------



| | (B) | the assets are not classified as financial assets at FVTPL, held-to-maturity investments, or loans and
receivables.
| | --- | -------------------------------------------------------------------------------------------------------------------------



- 14 -



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Subsequent to initial recognition, available-for-sale financial assets are remeasured at fair value and gains or losses arising from changes in fair value are recognized in other comprehensive income. When there is objective evidence that an available-for-sale financial asset is impaired, previously recognized accumulated other comprehensive income is reclassified to profit or loss.

Foreign exchange gains and losses arising on monetary financial assets classified as available-for-sale financial assets, interest income calculated using the effective interest method and dividends received are recognized in profit or loss. When an available-for-sale financial asset is derecognized, the accumulated profit or loss recorded in other comprehensive income is reclassified to profit or loss.



| | (b) | Non-derivative financial liabilities
| | --- | ------------------------------------

The
Groups non-derivative financial liabilities consist of trade and other payables. These financial liabilities are measured at amortized cost using the effective interest method, subsequent to initial
recognition.



| | (c) | Derivative financial assets and financial liabilities
| | --- | -----------------------------------------------------

Derivatives are initially recognized
at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately. Derivative financial
assets and financial liabilities are classified as financial assets at FVTPL and financial liabilities at FVTPL, respectively.



| | 3) | Derecognition of financial assets and financial liabilities
| | -- | -----------------------------------------------------------

The Group derecognizes a
financial asset when the contractual rights to the cash flows from the financial asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the financial asset to another party. The Group
derecognizes financial liabilities when, and only when, the Groups obligations are discharged, canceled or they expire. The difference between the carrying amount of a financial liability derecognized and the consideration paid is recognized
in profit or loss.



| | 4) | Offsetting financial assets and financial liabilities
| | -- | -----------------------------------------------------

Financial assets and financial
liabilities are offset, and the net amounts are presented in the consolidated statements of financial position when, and only when, the Group currently has a legally enforceable right to set off the recognized amounts, and intends either to settle
on a net basis or to realize the assets and settle the liabilities simultaneously.



| | 5) | Impairment of financial assets
| | -- | ------------------------------

The Group assesses financial assets for any objective
evidence of impairment at the end of each quarter. Financial assets, other than financial assets at FVTPL, are considered to be impaired when there is objective evidence of impairment as a result of one or more loss events that occurred after the
initial recognition of the financial assets, and these events have an adverse effect on the estimated future cash flows of the financial assets that can be reliably estimated. For
available-for-sale equity instruments, a significant or prolonged decline in the fair value below cost is considered to be objective evidence of impairment.



- 15 -



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In recognizing an impairment loss on held-to-maturity investments or loans and receivables, the Group reduces the carrying amount of the asset directly. The amount of the impairment loss is measured as the difference between the assets
carrying amount and the present value of estimated future cash flows, discounted at the financial assets original effective interest rate, and is recognized in profit or loss. Interest income after impairment recognition is thereafter
recognized through reversal of discount due to passage of time.

For
available-for-sale financial assets, an impairment loss is measured as the difference between the assets carrying amount and its fair value and is recognized in
profit or loss.

For held-to-maturity investments or
loans and receivables, if, in a subsequent period, an event that decreases the amount of the impairment loss occurs, the amount of decrease is reversed through profit or loss to the extent that it does not exceed the amortized cost of the asset.

For equity instruments classified as available-for-sale
financial assets, impairment losses are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income and accumulated under the heading of investments revaluation
reserve. For debt instruments classified as available-for-sale financial assets, impairment losses are subsequently reversed through profit or loss if an increase in the
fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.



| | (4) | Cash and Cash Equivalents
| | --- | -------------------------

Cash and cash equivalents consist of
cash, demand deposits and short-term investments with maturities of three months or less from the date of acquisition that are readily convertible to cash and subject to insignificant risk of change in value.



| | (5) | Property and Equipment
| | --- | ----------------------

Property and equipment are measured on a
historical cost basis under the cost model, less accumulated depreciation and accumulated impairment losses. Historical cost includes costs directly attributable to the acquisition of the asset and the initial estimated costs related to dismantling,
removing and site restoration.

Property and equipment, other than land and construction in progress, are depreciated using the straight-line method over the estimated useful life of each asset.

The estimated useful lives of major
property and equipment are as follows:



|                          |  |           
|------------------------- |  | ----------
|Buildings and structures: |  | 462 years
|Furniture and fixtures:   |  | 220 years
|Machinery and equipment:  |  | 817 years

The depreciation methods, useful lives, and residual values of assets are reviewed at the end of each year,
and any changes are applied prospectively as a change in an accounting estimate.

Assets held under finance leases are depreciated over
their estimated useful lives when there is reasonable certainty that ownership will be obtained by the end of the lease term. However, when there is no reasonable certainty that ownership will be obtained by the end of the lease term, assets are
depreciated over the shorter of the lease term or their estimated useful lives.



- 16 -



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| | (6) | Intangible Assets
| | --- | -----------------

Intangible assets with finite useful lives that
are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses under the cost model. Intangible assets with infinite useful lives that are acquired separately are carried at cost less accumulated
impairment losses.

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized
at their fair value at the acquisition date. Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as
intangible assets that are acquired separately.

Expenditure on research activities is recognized as an expense in the period in which it
is incurred. The amount initially recognized for internally generated intangible assets during the development phase is the sum of the expenditure incurred from the date when the intangible asset first meets all of the capitalization criteria to the
date the development is completed. Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are
acquired separately.

Intangible assets with finite lives are amortized using the straight-line
method over the estimated useful lives. The estimated useful lives of major components of intangible assets are as follows:



|                        |  |           
|----------------------- |  | ----------
|Software:               |  | 25 years 
|Customer relationships: |  | 624 years

Amortization methods, useful lives, and residual values of assets are reviewed at the end of each fiscal year
and any changes are applied prospectively as a change in an accounting estimate.



| | (7) | Leases
| | --- | ------

Leases are classified as finance leases whenever the terms
of the lease transfer substantially all the risks and rewards of ownership of assets to the lessee. All other leases are classified as operating leases. The assessment of whether an arrangement is a lease or contains a lease is made on a basis of
all of the facts and circumstances at the inception of the arrangement.



| | 1) | Finance leases (the Group as lessee)
| | -- | ------------------------------------

At the inception of lease, the Group initially
recognizes finance leases as assets and the lease obligation at the amount equal to the fair value of the leased property or, if lower, at the present value of the minimum lease payments.

Subsequent to initial recognition, the accounting policy for assets held under finance leases is consistent with that of assets that are
owned. Lease payments are apportioned between finance cost (other non-operating expenses) and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the
liability.



| | 2) | Operating leases (the Group as lessee)
| | -- | --------------------------------------

Gross operating lease payments are recognized
as an expense on a straight-line basis over the lease term.



- 17 -



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| | (8) | Impairment of Property and Equipment and Intangible Assets Other Than Goodwill
| | --- | ------------------------------------------------------------------------------

At the end of each quarter, the Group reviews the carrying amounts of its property and equipment and intangible assets to determine whether
there is any indication that those assets have suffered an impairment loss.

If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the
cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value
less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the time value of money and
the risks specific to the asset. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.

When an impairment loss subsequently
reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years.



| | (9) | Provisions
| | --- | ----------

Provisions are recognized when the Group has a present
obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

When the effect of the time value of money is material, provisions are measured using the estimated future cash flows, discounted using a pre-tax rate reflecting the time value of money and the specific risks of the liability. Reversal of discount due to passage of time is recognized in profit or loss.

Major provisions of the Group are as follows:



| | 1) | Provision for interest repayment claims
| | -- | ---------------------------------------

To cover interest repayment claims for the
interest rates charged in excess of the maximum rate imposed by the Interest Rate Restriction Act, the Group provides for the estimated future repayment. The amount of future interest repayment is subject to changes in business environment.



| | 2) | Asset retirement obligations
| | -- | ----------------------------

The Group recognizes asset retirement obligations for
obligations to restore leased offices to their original conditions upon termination of the lease contract. The amount and timing of future cash flows are based on the present business plans and assumptions and subject to changes depending on revised
future business plans and assumptions.



| | 3) | Provision for Yahoo! Points
| | -- | ---------------------------

In anticipation of the future use of points granted to
customers as sales promotion under its points program, the Group recognizes a provision at the amount estimated to be used by customers in the future based on historical activity. There is an uncertainty regarding the extent of usage of such points.



- 18 -



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| | (10) | Share-Based Payments
| | ---- | --------------------

The
Company has an equity-settled share option scheme as an incentive plan for directors and employees. Share options are measured at the fair value of the equity instruments at the grant date. The fair value of
share options is computed by using the Black-Scholes model, Monte Carlo simulation and other methods considering the terms and conditions of each option. The fair value of share options determined at the grant
date is expensed over the vesting period with a corresponding increase in equity.

At the end of each reporting period, the Company
reviews estimates of the number of options that are expected to vest, and revises them when necessary.

The Company has applied the
exemption in IFRS 1 (Please refer to Note 35. First-time adoption of IFRSs).



| | (11) | Revenue
| | ---- | -------

Revenue of the Group mainly consists of services which
are recognized based on the stage of completion of transactions at the end of each reporting period. Revenue is comprised of paid search advertising, display advertising, commission fees related to e-commerce
such as YAHUOKU!, and membership fees such as Yahoo! Premium.

Paid search advertising revenue is recognized when a visitor of the website
clicks the advertisement. Display advertising comprises premium advertising, Yahoo! Display Ad Network (YDN) and others. Revenue from premium advertising is recognized over a period in which the related advertisement is displayed.
Revenue from YDN is recognized when a visitor of the website clicks the advertisement on the page with the related content. Revenue from e-commerce related commission fees is recognized when a transaction
occurs. Revenue from membership fees is recognized over an effective period of the membership.



| | (12) | Retirement Benefits
| | ---- | -------------------

The Group primarily participates in defined
contribution pension plans. In addition, the Group has adopted contributory welfare pension plans as defined benefit pension plans.

Defined contribution plans are post-employment benefit plans under which an employer pays fixed
contributions into a separate fund and will have no legal or constructive obligation to pay further contributions. Contributions to the defined contribution plans are recognized as expenses when the related services are rendered by employees, and
contributions payable are recognized as liabilities.

The Group participates in multi-employer
contributory defined benefit welfare pension plans. Contributions to the multi-employer contributory defined benefit welfare pension plans are recognized as expenses when the related services are rendered by
employees, and contributions payable are recognized as liabilities.



| | (13) | Income Tax
| | ---- | ----------

Income tax expense is comprised of current and
deferred taxes, and recognized in profit or loss, except for taxes related to business combinations and taxes related to items that are recognized in other comprehensive income or directly in equity.



- 19 -



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| | 1) | Current tax
| | -- | -----------

Current tax is measured at the amount expected to be paid to or recovered
from the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.



| | 2) | Deferred tax
| | -- | ------------

Deferred tax assets are recognized for deductible temporary differences,
unused tax losses, and unused tax credits to the extent that it is probable that taxable profits will be available. Recoverability of deferred tax assets is reviewed at the end of each quarter. Deferred tax liabilities are generally recognized for
taxable temporary differences.

Deferred tax assets and liabilities are not recognized for:



| | (A) | temporary differences arising from the initial recognition, other than in a business combination, of assets and liabilities in a transaction that affects neither the accounting profit nor the taxable profit;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (B) | taxable temporary differences arising from initial recognition of goodwill;
| | --- | ---------------------------------------------------------------------------



| | (C) | deductible temporary differences associated with investments in subsidiaries and associates, where it is not probable that the temporary difference will reverse in the foreseeable future or where it is not probable that
there will be sufficient taxable profits against which the temporary differences can be utilized; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (D) | taxable temporary differences associated with investments in subsidiaries and associates, where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference
will not reverse in the foreseeable future.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the period in which the asset is realized or the liability is settled, based on tax laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset if the Company has a legally enforceable right to set off current tax assets against current
tax liabilities, and income taxes are levied by the same taxation authority on the same taxable entity.



| | (14) | Treasury Stock
| | ---- | --------------

When the Company acquires its own equity share
capital (treasury stock), the consideration paid, including any directly attributable increments costs (net of tax), is deducted from equity. No gain or loss is recognized on the purchase, sale, or cancellation of the treasury stock. The
difference between the carrying amount and the consideration on sale is recognized as capital surplus.



| | (15) | Earnings per Share
| | ---- | ------------------

Basic earnings per share are calculated by
dividing profit for the year attributable to owners of the Company by the weighted-average number of common stocks (after adjusting for treasury stocks) outstanding for the period.



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Diluted earnings per share assumes full conversion of the issued potential shares having a
dilutive effect, with an adjustment for profit for the year attributable to owners of the Company and the weighted-average number of common stocks (after adjusting for treasury stocks) outstanding for the
period.

On October 1, 2013, the Company made a share split at a rate of 100 shares for each outstanding share. Basic earnings per
share and diluted earnings per share are calculated as if the share split became effective on April 1, 2013.



|4. | USE OF ESTIMATES AND JUDGMENTS
|-- | ------------------------------

In preparing consolidated financial statements under
IFRSs, management makes judgments, estimates, and assumptions that affect the application of accounting policies and carrying amounts of assets, liabilities, revenue, and expenses. Actual results in the future may differ from those estimates or
assumptions. Estimates and underlying assumptions are continuously reviewed. Revisions to accounting estimates are recognized in the period in which the estimate is revised as well as in the future periods.

The following is the critical judgment that has been made in the process of applying the Groups accounting policies and that has the
most significant effect on the amounts recognized in the consolidated financial statements:



| |  |  | Determination of scope of subsidiaries and associates (Note 3. Significant accounting policies (1))
| | - |  | -----------------------------------------------------------------------------------------------------

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting
period, that may have a significant risk on the amounts recognized in the consolidated statements of causing a material adjustment within the current and next financial year:



| |  |  | Determination regarding impairment of property and equipment, goodwill and intangible assets (Note 3. Significant accounting policies (1) and (8) and Note 12. Goodwill and intangible
assets)
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Determination regarding impairment of investments in associates (Note 3. Significant accounting policies (1))
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | Fair value measurement of financial assets and liabilities (Note 3. Significant accounting policies (3) and Note 26. Fair value of financial instruments)
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Determination of useful life and residual value of property and equipment and intangible assets (Note 3. Significant accounting policies (5) and (6))
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Assessment and determination regarding recognition and measurement of provisions (Note 3. Significant accounting policies (9) and Note 17. Provisions)
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Fair value measurement of share options (Note 3. Significant accounting policies (10) and Note 24. Share-based payment)
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | Assessment of recoverability of deferred tax assets (Note 3. Significant accounting policies (13) and Note 14. Income taxes)
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



- 21 -



---

|5. | BUSINESS COMBINATIONS
|-- | ---------------------

For the Year Ended March 31, 2015
(Unaudited)

Significant business combinations occurring in the year ended March 31, 2015 are as follows:



| | (1) | Outline of business combination
| | --- | -------------------------------

The Company acquired 65% of the voting rights of YJ
Card Corporation (renamed from KC Co., Ltd. on January 5, 2015), a company that principally operates a credit card business, from J Trust Co., Ltd. and has included YJ Card Corporation in the scope of consolidation since
the fourth quarter of the year ended March 31, 2015, in order to develop the Companys settlement finance domain, an area that promises to offer various synergies with the Companys assets and
know-how, into its next core business. This acquisition was also undertaken to improve the convenience of the Companys e-commerce services and to further
accelerate growth in transaction values.



| | (2) | Outline of acquiree
| | --- | -------------------



|              |  |                                                                               
|------------- |  | ------------------------------------------------------------------------------
|Company name: |  | YJ Card Corporation                                                           
|Businesses:   |  | Credit card business, card loan business, credit guarantee business and others



| | (3) | Acquisition date
| | --- | ----------------

January 5, 2015



| | (4) | Fair value of consideration, acquired assets and assumed liabilities as of the acquisition date
| | --- | -----------------------------------------------------------------------------------------------



|                                                       |  |                 |   |                             |   |  |  |   |          |  
|------------------------------------------------------ |  | --------------- | - | --------------------------- | - |  |  | - | -------- | -
|                                                       |  | Millions of Yen |   | Thousands of   U.S. Dollars
|                                                       |  | Unaudited       |   | Unaudited                  
|                                                       |  |                
|Fair value of considerationCash                       |  |                 | ¥ | 23,228                      |   |  |  | $ | 193,293  |  
|                                                       |  |                 |   |                             |   |  |  |   |          |  
|                                                       |  |                
|Total                                                  |  |                 | ¥ | 23,228                      |   |  |  | $ | 193,293  |  
|                                                       |  |                 |   |                             |   |  |  |   |          |  
|                                                       |  |                
|Fair value of acquired assets and assumed liabilities: |  |                 |   |                             |   |  |  |   |          |  
|Current assets (Note 1)                                |  |                 | ¥ | 42,841                      |   |  |  | $ | 356,503  |  
|Non-current assets                                     |  |                 |   | 16,709                      |   |  |  |   | 139,045  |  
|Current liabilities (Note 1)                           |  |                 |   | (7,306                      | ) |  |  |   | (60,797  | )
|Non-current liabilities (Note 1)                       |  |                 |   | (29,439                     | ) |  |  |   | (244,978 | )
|                                                       |  |                 |   |                             |   |  |  |   |          |  
|Net assets                                             |  |                 |   | 22,805                      |   |  |  |   | 189,773  |  
|Non-controlling interests (Note 2)                     |  |                 |   | (7,982                      | ) |  |  |   | (66,423  | )
|Goodwill (Note 3)                                      |  |                 |   | 8,405                       |   |  |  |   | 69,943   |  
|                                                       |  |                 |   |                             |   |  |  |   |          |  
|                                                       |  |                
|Total                                                  |  |                 | ¥ | 23,228                      |   |  |  | $ | 193,293  |  
|                                                       |  |                 |   |                             |   |  |  |   |          |  



- 22 -



---

Notes:



| | 1. | Acquired assets and assumed liabilities
| | -- | ---------------------------------------

Current assets include ¥32,849 million
($273,354 thousand) of trade loans receivable. Current and non-current liabilities include ¥24,081 million ($200,391 thousand) of provision for interest repayment claims.



| | 2. | Non-controlling interests
| | -- | -------------------------

Non-controlling interests are measured at the proportionate interests in the identifiable net assets of the acquiree.



| | 3. | Goodwill
| | -- | --------

Goodwill reflects excess earning power expected from the future business
development and the synergy of the Group and the acquiree.



| | (5) | Impact on the operating results of the Group
| | --- | --------------------------------------------

Information about operating results after
the acquisition date and pro forma information about operating results as if the business combination had occurred as of the beginning of the reporting period are not disclosed because the impacts on the consolidated financial statements are not
material.

For the Year Ended March 31, 2014

There were no significant business combinations for the year ended March 31, 2014.



|6. | SEGMENT INFORMATION
|-- | -------------------



| | (1) | Reportable Segments
| | --- | -------------------

The Groups reportable segments are
components of the Group for which discrete financial information is available, and whose operating results are regularly reviewed by the Companys board of directors to make decisions about resources to be allocated to the segment and assess
its performance.

The Group has two reportable segments, namely, (1) marketing solutions business and (2) consumer business.

The marketing solutions business segment comprises (1) planning and sales of Internet-based advertising-related services, (2) information listing services, and (3) other corporate services. The consumer business segment comprises e-commerce related services
and membership services. Other business consists of operating segments that are not included in a reportable segment and includes settlement- and finance-related
services.

The accounting policies of the reportable segments are the same as the Groups accounting policies described in
Note 3. Significant accounting policies. Segment income is computed based on operating income with certain adjustments for intersegment transactions and corporate expenses. Corporate expenses consist primarily of general and
administrative expenses that are not allocable to segments. Intersegment sales are based on prevailing market prices.



- 23 -



---

Segment information of the Group as of and for the year ended March 31, 2015, is as follows:



|                                     |  |                            |   |                  |  |       |  |               |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   |         |  
|------------------------------------ |  | -------------------------- | - | ---------------- |  | ----- |  | ------------- | ------- | -------------- |  | ------------ | - | ------- |  |  |  | - | ------ |  |  |  | - | ------- | - |  |  | - | ------- | -
|                                     |  | Millions of Yen           
|                                     |  | Reportable Segments        |   |                  |  |       |  |              
|                                     |  | MarketingSolutionsBusiness |   | ConsumerBusiness |  | Total |  | OtherBusiness |         | Reconciliation |  | Consolidated
|                                     |  | Unaudited                 
|                                     |  |                            |   |                  |  |      
|Revenue:                             |  |                            |   |                  |  |       |  |               |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   |         |  
|Sales to customers                   |  |                            | ¥ | 303,296          |  |       |  | ¥             | 96,286  |                |  |              | ¥ | 399,582 |  |  |  | ¥ | 28,906 |  |  |  |   |         |   |  |  | ¥ | 428,488 |  
|Intersegment sales                   |  |                            |   | 997              |  |       |  |               | 5,744   |                |  |              |   | 6,741   |  |  |  |   | 3,436  |  |  |  | ¥ | (10,177 | ) |  |  |   |         |  
|                                     |  |                            |   |                  |  |       |  |               |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   |         |  
|                                     |  |                            |   |                  |  |      
|Total sales                          |  |                            | ¥ | 304,293          |  |       |  | ¥             | 102,030 |                |  |              | ¥ | 406,323 |  |  |  | ¥ | 32,342 |  |  |  | ¥ | (10,177 | ) |  |  | ¥ | 428,488 |  
|                                     |  |                            |   |                  |  |       |  |               |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   |         |  
|                                     |  |                            |   |                  |  |      
|Segment income                       |  |                            | ¥ | 161,673          |  |       |  | ¥             | 58,600  |                |  |              | ¥ | 220,273 |  |  |  | ¥ | 11,552 |  |  |  | ¥ | (34,613 | ) |  |  | ¥ | 197,212 |  
|Other non-operating income           |  |                            |   |                  |  |       |  |               |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   | 10,638  |  
|Other non-operating expenses         |  |                            |   |                  |  |       |  |               |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   | (1,224  | )
|Equity in earnings of associates     |  |                            |   |                  |  |       |  |               |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   | 1,673   |  
|                                     |  |                            |   |                  |  |       |  |               |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   |         |  
|                                     |  |                            |   |                  |  |      
|Profit before tax                    |  |                            |   |                  |  |       |  |               |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  | ¥ | 208,299 |  
|                                     |  |                            |   |                  |  |       |  |               |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   |         |  
|                                     |  |                            |   |                  |  |      
|OthersDepreciation and amortization |  |                            | ¥ | 5,510            |  |       |  | ¥             | 1,752   |                |  |              | ¥ | 7,262   |  |  |  | ¥ | 2,669  |  |  |  | ¥ | 7,005   |   |  |  | ¥ | 16,936  |  



|                                     |  |                            |   |                  |  |       |  |               |         |                |  |              |   |           |  |  |  |   |         |  |  |  |   |          |   |  |  |   |           |  
|------------------------------------ |  | -------------------------- | - | ---------------- |  | ----- |  | ------------- | ------- | -------------- |  | ------------ | - | --------- |  |  |  | - | ------- |  |  |  | - | -------- | - |  |  | - | --------- | -
|                                     |  | Thousands of U.S. Dollars 
|                                     |  | Reportable Segments        |   |                  |  |       |  |              
|                                     |  | MarketingSolutionsBusiness |   | ConsumerBusiness |  | Total |  | OtherBusiness |         | Reconciliation |  | Consolidated
|                                     |  | Unaudited                 
|                                     |  |                            |   |                  |  |      
|Revenue:                             |  |                            |   |                  |  |       |  |               |         |                |  |              |   |           |  |  |  |   |         |  |  |  |   |          |   |  |  |   |           |  
|Sales to customers                   |  |                            | $ | 2,523,891        |  |       |  | $             | 801,248 |                |  |              | $ | 3,325,139 |  |  |  | $ | 240,543 |  |  |  |   |          |   |  |  | $ | 3,565,682 |  
|Intersegment sales                   |  |                            |   | 8,297            |  |       |  |               | 47,799  |                |  |              |   | 56,096    |  |  |  |   | 28,592  |  |  |  | $ | (84,688  | ) |  |  |   |           |  
|                                     |  |                            |   |                  |  |       |  |               |         |                |  |              |   |           |  |  |  |   |         |  |  |  |   |          |   |  |  |   |           |  
|                                     |  |                            |   |                  |  |      
|Total sales                          |  |                            | $ | 2,532,188        |  |       |  | $             | 849,047 |                |  |              | $ | 3,381,235 |  |  |  | $ | 269,135 |  |  |  | $ | (84,688  | ) |  |  | $ | 3,565,682 |  
|                                     |  |                            |   |                  |  |       |  |               |         |                |  |              |   |           |  |  |  |   |         |  |  |  |   |          |   |  |  |   |           |  
|                                     |  |                            |   |                  |  |      
|Segment income                       |  |                            | $ | 1,345,369        |  |       |  | $             | 487,643 |                |  |              | $ | 1,833,012 |  |  |  | $ | 96,130  |  |  |  | $ | (288,034 | ) |  |  | $ | 1,641,108 |  
|Other non-operating income           |  |                            |   |                  |  |       |  |               |         |                |  |              |   |           |  |  |  |   |         |  |  |  |   |          |   |  |  |   | 88,525    |  
|Other non-operating expenses         |  |                            |   |                  |  |       |  |               |         |                |  |              |   |           |  |  |  |   |         |  |  |  |   |          |   |  |  |   | (10,186   | )
|Equity in earnings of associates     |  |                            |   |                  |  |       |  |               |         |                |  |              |   |           |  |  |  |   |         |  |  |  |   |          |   |  |  |   | 13,922    |  
|                                     |  |                            |   |                  |  |       |  |               |         |                |  |              |   |           |  |  |  |   |         |  |  |  |   |          |   |  |  |   |           |  
|                                     |  |                            |   |                  |  |      
|Profit before tax                    |  |                            |   |                  |  |       |  |               |         |                |  |              |   |           |  |  |  |   |         |  |  |  |   |          |   |  |  | $ | 1,733,369 |  
|                                     |  |                            |   |                  |  |       |  |               |         |                |  |              |   |           |  |  |  |   |         |  |  |  |   |          |   |  |  |   |           |  
|                                     |  |                            |   |                  |  |      
|OthersDepreciation and amortization |  |                            | $ | 45,852           |  |       |  | $             | 14,579  |                |  |              | $ | 60,431    |  |  |  | $ | 22,210  |  |  |  | $ | 58,293   |   |  |  | $ | 140,934   |  



- 24 -



---

Segment information of the Group as of and for the year ended March 31, 2014, is as follows:



|                                     |  |                            |   |                  |  |       |  |                |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   |         |  
|------------------------------------ |  | -------------------------- | - | ---------------- |  | ----- |  | -------------- | ------- | -------------- |  | ------------ | - | ------- |  |  |  | - | ------ |  |  |  | - | ------- | - |  |  | - | ------- | -
|                                     |  | Millions of Yen           
|                                     |  | Reportable Segments        |   |                  |  |       |  |               
|                                     |  | MarketingSolutionsBusiness |   | ConsumerBusiness |  | Total |  | Other Business |         | Reconciliation |  | Consolidated
|                                     |  |                            |   |                  |  |      
|Revenue:                             |  |                            |   |                  |  |       |  |                |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   |         |  
|Sales to customers                   |  |                            | ¥ | 282,137          |  |       |  | ¥              | 100,867 |                |  |              | ¥ | 383,004 |  |  |  | ¥ | 25,511 |  |  |  |   |         |   |  |  | ¥ | 408,515 |  
|Intersegment sales                   |  |                            |   | 951              |  |       |  |                | 3,971   |                |  |              |   | 4,922   |  |  |  |   | 3,020  |  |  |  | ¥ | (7,942  | ) |  |  |   |         |  
|                                     |  |                            |   |                  |  |       |  |                |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   |         |  
|                                     |  |                            |   |                  |  |      
|Total sales                          |  |                            | ¥ | 283,088          |  |       |  | ¥              | 104,838 |                |  |              | ¥ | 387,926 |  |  |  | ¥ | 28,531 |  |  |  | ¥ | (7,942  | ) |  |  | ¥ | 408,515 |  
|                                     |  |                            |   |                  |  |       |  |                |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   |         |  
|                                     |  |                            |   |                  |  |      
|Segment income                       |  |                            | ¥ | 152,290          |  |       |  | ¥              | 63,693  |                |  |              | ¥ | 215,983 |  |  |  | ¥ | 11,233 |  |  |  | ¥ | (30,778 | ) |  |  | ¥ | 196,438 |  
|Other non-operating income           |  |                            |   |                  |  |       |  |                |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   | 13,194  |  
|Other non-operating expenses         |  |                            |   |                  |  |       |  |                |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   | (1,313  | )
|Equity in losses of associates       |  |                            |   |                  |  |       |  |                |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   | (94     | )
|                                     |  |                            |   |                  |  |       |  |                |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   |         |  
|                                     |  |                            |   |                  |  |      
|Profit before tax                    |  |                            |   |                  |  |       |  |                |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  | ¥ | 208,225 |  
|                                     |  |                            |   |                  |  |       |  |                |         |                |  |              |   |         |  |  |  |   |        |  |  |  |   |         |   |  |  |   |         |  
|                                     |  |                            |   |                  |  |      
|OthersDepreciation and amortization |  |                            | ¥ | 4,798            |  |       |  | ¥              | 1,672   |                |  |              | ¥ | 6,470   |  |  |  | ¥ | 2,302  |  |  |  | ¥ | 4,680   |   |  |  | ¥ | 13,452  |  



|(2) | Sales to Customers, by Services
|--- | -------------------------------



|              |  |                     |         |  |                          |   |         |           |  |   |           | 
|------------- |  | ------------------- | ------- |  | ------------------------ | - | ------- | --------- |  | - | --------- | 
|              |  | Millions of Yen     |         |  | Thousands ofU.S. Dollars |  
|              |  | Year EndedMarch 31, |         |  | Year EndedMarch 31,      |  
|              |  | 2015                |         |  | 2014                     |   |         | 2015      | 
|              |  |                     |         |  |                          |   |         |           |  |   |           | 
|              |  | Unaudited           |         |  |                          |   |         | Unaudited | 
|              |  |                     |        
|Advertisement |  | ¥                   | 249,829 |  |                          | ¥ | 232,530 |           |  | $ | 2,078,963 | 
|Businesses    |  |                     | 70,107  |  |                          |   | 72,398  |           |  |   | 583,399   | 
|Personal      |  |                     | 108,552 |  |                          |   | 103,587 |           |  |   | 903,320   | 
|              |  |                     |         |  |                          |   |         |           |  |   |           | 
|              |  |                     |        
|Total         |  | ¥                   | 428,488 |  |                          | ¥ | 408,515 |           |  | $ | 3,565,682 | 
|              |  |                     |         |  |                          |   |         |           |  |   |           | 

Note:    Revenue of the Group consists almost entirely of rendering of services.



|              |  |                                                                                                                                    
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------------
|              |  | Main Services                                                                                                                      
|              | 
|Advertisement |  |     Paid search, display and other advertising-related
services                                                                   
|              | 
|Businesses    |  |     Data center-related and other corporate services                                                                              
|              |  |     Yahoo! Real Estate and other information listing services                                                                     
|              | 
|Personal      |  |     YAHUOKU!, Yahoo! Shopping, and other
e-commerce related services     Yahoo! Premium,
Yahoo! BB, and other membership services



- 25 -



---

|7. | CASH AND CASH EQUIVALENTS
|-- | -------------------------

The components of cash and cash equivalents are as follows:



|                                                  |  |                         |   |                             |  |                        |  |                         |         |  |  |  |   |         |  |  |  |   |           | 
|------------------------------------------------- |  | ----------------------- | - | --------------------------- |  | ---------------------- |  | ----------------------- | ------- |  |  |  | - | ------- |  |  |  | - | --------- | 
|                                                  |  | Millions of
Yen         |   | Thousands of   U.S. Dollars
|                                                  |  | As ofMarch 31,     2015 |   | As ofMarch 31,     2014     |  | As ofApril 1,     2013 |  | As ofMarch 31,     2015
|                                                  |  | Unaudited               |   |                             |  |                        |  | Unaudited              
|                                                  |  |                         |   |                            
|Cash and demand deposits                          |  |                         | ¥ | 156,755                     |  |                        |  | ¥                       | 105,410 |  |  |  | ¥ | 90,085  |  |  |  | $ | 1,304,444 | 
|Time deposits (maturities ofthree months or less) |  |                         |   | 347,182                     |  |                        |  |                         | 376,927 |  |  |  |   | 319,503 |  |  |  |   | 2,889,090 | 
|                                                  |  |                         |   |                             |  |                        |  |                         |         |  |  |  |   |         |  |  |  |   |           | 
|                                                  |  |                         |   |                            
|Total                                             |  |                         | ¥ | 503,937                     |  |                        |  | ¥                       | 482,337 |  |  |  | ¥ | 409,588 |  |  |  | $ | 4,193,534 | 
|                                                  |  |                         |   |                             |  |                        |  |                         |         |  |  |  |   |         |  |  |  |   |           | 



|8. | TRADE AND OTHER RECEIVABLES
|-- | ---------------------------

The components of trade and other receivables are as
follows:



|                                                         |  |                         |   |                           |  |                        |  |                         |         |  |  |  |   |         |  |  |  |   |           | 
|-------------------------------------------------------- |  | ----------------------- | - | ------------------------- |  | ---------------------- |  | ----------------------- | ------- |  |  |  | - | ------- |  |  |  | - | --------- | 
|                                                         |  | Millions of Yen         |   | Thousands of U.S. Dollars
|                                                         |  | As ofMarch 31,     2015 |   | As ofMarch 31,     2014   |  | As ofApril 1,     2013 |  | As ofMarch 31,     2015
|                                                         |  | Unaudited               |   |                           |  |                        |  | Unaudited              
|                                                         |  |                         |   |                          
|Foreign exchange dealings cashdeposits with trust banks |  |                         | ¥ | 90,402                    |  |                        |  | ¥                       | 75,171  |  |  |  | ¥ | 68,452  |  |  |  | $ | 752,284   | 
|Trade receivables                                        |  |                         |   | 67,261                    |  |                        |  |                         | 60,571  |  |  |  |   | 55,395  |  |  |  |   | 559,715   | 
|Credit card receivables                                  |  |                         |   | 35,163                    |  |                        |  |                         | 7,067   |  |  |  |   | 8,367   |  |  |  |   | 292,610   | 
|Others                                                   |  |                         |   | 24,910                    |  |                        |  |                         | 17,587  |  |  |  |   | 11,660  |  |  |  |   | 207,291   | 
|                                                         |  |                         |   |                           |  |                        |  |                         |         |  |  |  |   |         |  |  |  |   |           | 
|                                                         |  |                         |   |                          
|Total                                                    |  |                         | ¥ | 217,736                   |  |                        |  | ¥                       | 160,396 |  |  |  | ¥ | 143,874 |  |  |  | $ | 1,811,900 | 
|                                                         |  |                         |   |                           |  |                        |  |                         |         |  |  |  |   |         |  |  |  |   |           | 



|9. | OTHER FINANCIAL ASSETS
|-- | ----------------------

The components of other financial assets are as follows:



|                            |  |                         |   |                             |  |                      |  |                          |        |  |  |  |   |        |  |  |  |   |         | 
|--------------------------- |  | ----------------------- | - | --------------------------- |  | -------------------- |  | ------------------------ | ------ |  |  |  | - | ------ |  |  |  | - | ------- | 
|                            |  | Millions of Yen         |   | Thousands of   U.S. Dollars
|                            |  | As ofMarch 31,     2015 |   | As ofMarch 31,      2014    |  | As ofApril 1,   2013 |  | As ofMarch 31,      2015
|                            |  | Unaudited               |   |                             |  |                      |  | Unaudited               
|                            |  |                         |   |                            
|Equity securities           |  |                         | ¥ | 30,554                      |  |                      |  | ¥                        | 38,059 |  |  |  | ¥ | 27,847 |  |  |  | $ | 254,256 | 
|Derivative financial assets |  |                         |   | 17,031                      |  |                      |  |                          | 13,033 |  |  |  |   | 9,356  |  |  |  |   | 141,724 | 
|Deposits paid               |  |                         |   | 12,604                      |  |                      |  |                          | 6,610  |  |  |  |   | 6,354  |  |  |  |   | 104,885 | 
|Others                      |  |                         |   | 13,817                      |  |                      |  |                          | 4,143  |  |  |  |   | 5,699  |  |  |  |   | 114,979 | 
|                            |  |                         |   |                             |  |                      |  |                          |        |  |  |  |   |        |  |  |  |   |         | 
|                            |  |                         |   |                            
|Total                       |  |                         | ¥ | 74,006                      |  |                      |  | ¥                        | 61,845 |  |  |  | ¥ | 49,256 |  |  |  | $ | 615,844 | 
|                            |  |                         |   |                             |  |                      |  |                          |        |  |  |  |   |        |  |  |  |   |         | 
|                            |  |                         |   |                            
|Current assets              |  |                         | ¥ | 15,902                      |  |                      |  | ¥                        | 12,313 |  |  |  | ¥ | 13,556 |  |  |  | $ | 132,329 | 
|                            |  |                         |   |                            
|Non-current assets          |  |                         |   | 58,104                      |  |                      |  |                          | 49,532 |  |  |  |   | 35,700 |  |  |  |   | 483,515 | 



- 26 -



---

|10. | OTHER ASSETS
|--- | ------------

The components of other assets are as follows:



|                           |  |                    |   |                             |  |                   |  |                    |       |  |  |  |   |       |  |  |  |   |        | 
|-------------------------- |  | ------------------ | - | --------------------------- |  | ----------------- |  | ------------------ | ----- |  |  |  | - | ----- |  |  |  | - | ------ | 
|                           |  | Millions of Yen    |   | Thousands of   U.S. Dollars
|                           |  | As ofMarch 31,2015 |   | As ofMarch 31,2014          |  | As ofApril 1,2013 |  | As ofMarch 31,2015
|                           |  | Unaudited          |   |                             |  |                   |  | Unaudited         
|                           |  |                    |   |                            
|Prepaid expenses           |  |                    | ¥ | 3,582                       |  |                   |  | ¥                  | 3,169 |  |  |  | ¥ | 2,576 |  |  |  | $ | 29,808 | 
|Long-term prepaid expenses |  |                    |   | 1,705                       |  |                   |  |                    | 1,055 |  |  |  |   | 769   |  |  |  |   | 14,188 | 
|Investment property        |  |                    |   | 1,489                       |  |                   |  |                    |       |  |  |  |   |       |  |  |  |   | 12,391 | 
|Others                     |  |                    |   | 851                         |  |                   |  |                    | 538   |  |  |  |   | 430   |  |  |  |   | 7,082  | 
|                           |  |                    |   |                             |  |                   |  |                    |       |  |  |  |   |       |  |  |  |   |        | 
|                           |  |                    |   |                            
|Total                      |  |                    | ¥ | 7,627                       |  |                   |  | ¥                  | 4,762 |  |  |  | ¥ | 3,775 |  |  |  | $ | 63,469 | 
|                           |  |                    |   |                             |  |                   |  |                    |       |  |  |  |   |       |  |  |  |   |        | 
|                           |  |                    |   |                            
|Current assets             |  |                    | ¥ | 4,253                       |  |                   |  | ¥                  | 3,660 |  |  |  | ¥ | 2,900 |  |  |  | $ | 35,392 | 
|                           |  |                    |   |                            
|Non-current assets         |  |                    |   | 3,374                       |  |                   |  |                    | 1,102 |  |  |  |   | 875   |  |  |  |   | 28,077 | 



|11. | PROPERTY AND EQUIPMENT
|--- | ----------------------

Changes in carrying amounts of property and equipment, costs,
and accumulated depreciation and impairment losses are as follows:

Carrying Amounts



|                                 |  |                            |   |                          |   |                           |  |      |         |                           |  |       |   |         |   |  |  |   |        |  |  |  |   |        |   |  |  |   |         |  
|-------------------------------- |  | -------------------------- | - | ------------------------ | - | ------------------------- |  | ---- | ------- | ------------------------- |  | ----- | - | ------- | - |  |  | - | ------ |  |  |  | - | ------ | - |  |  | - | ------- | -
|                                 |  | Millions of Yen           
|                                 |  | Buildings and   Structures |   | Furniture and   Fixtures |   | Machinery and   Equipment |  | Land |         | Construction  in Progress |  | Total
|                                 |  |                            |   |                          |   |                          
|As of April 1, 2013              |  |                            | ¥ | 11,707                   |   |                           |  | ¥    | 18,284  |                           |  |       | ¥ | 10,748  |   |  |  | ¥ | 5,426  |  |  |  | ¥ | 4,902  |   |  |  | ¥ | 51,067  |  
|Purchase                         |  |                            |   | 2,104                    |   |                           |  |      | 12,682  |                           |  |       |   | 607     |   |  |  |   |        |  |  |  |   | 3,495  |   |  |  |   | 18,888  |  
|Disposals                        |  |                            |   | (322                     | ) |                           |  |      | (465    | )                         |  |       |   | (154    | ) |  |  |   |        |  |  |  |   |        |   |  |  |   | (941    | )
|Depreciation                     |  |                            |   | (1,057                   | ) |                           |  |      | (5,847  | )                         |  |       |   | (1,495  | ) |  |  |   |        |  |  |  |   |        |   |  |  |   | (8,399  | )
|Transfer of accounts             |  |                            |   | 5,177                    |   |                           |  |      | 456     |                           |  |       |   | 2,705   |   |  |  |   |        |  |  |  |   | (8,338 | ) |  |  |   |         |  
|Others                           |  |                            |   | (236                     | ) |                           |  |      | (67     | )                         |  |       |   | (166    | ) |  |  |   |        |  |  |  |   |        |   |  |  |   | (469    | )
|                                 |  |                            |   |                          |   |                           |  |      |         |                           |  |       |   |         |   |  |  |   |        |  |  |  |   |        |   |  |  |   |         |  
|As of March 31, 2014             |  |                            |   | 17,373                   |   |                           |  |      | 25,043  |                           |  |       |   | 12,245  |   |  |  |   | 5,426  |  |  |  |   | 59     |   |  |  |   | 60,146  |  
|Purchase                         |  |                            |   | 893                      |   |                           |  |      | 12,427  |                           |  |       |   | 1,107   |   |  |  |   |        |  |  |  |   | 1,233  |   |  |  |   | 15,660  |  
|Disposals                        |  |                            |   | (84                      | ) |                           |  |      | (311    | )                         |  |       |   | (36     | ) |  |  |   |        |  |  |  |   |        |   |  |  |   | (431    | )
|Business combinations            |  |                            |   | 520                      |   |                           |  |      | 620     |                           |  |       |   |         |   |  |  |   | 1,729  |  |  |  |   | 322    |   |  |  |   | 3,191   |  
|Depreciation                     |  |                            |   | (1,699                   | ) |                           |  |      | (7,525  | )                         |  |       |   | (1,626  | ) |  |  |   |        |  |  |  |   |        |   |  |  |   | (10,850 | )
|Transfer of accounts             |  |                            |   |                          |   |                           |  |      | 545     |                           |  |       |   | 385     |   |  |  |   |        |  |  |  |   | (930   | ) |  |  |   |         |  
|Others                           |  |                            |   | (55                      | ) |                           |  |      | (130    | )                         |  |       |   | (61     | ) |  |  |   |        |  |  |  |   | (4     | ) |  |  |   | (250    | )
|                                 |  |                            |   |                          |   |                           |  |      |         |                           |  |       |   |         |   |  |  |   |        |  |  |  |   |        |   |  |  |   |         |  
|                                 |  |                            |   |                          |   |                          
|As of March 31, 2015 (unaudited) |  |                            | ¥ | 16,948                   |   |                           |  | ¥    | 30,669  |                           |  |       | ¥ | 12,014  |   |  |  | ¥ | 7,155  |  |  |  | ¥ | 680    |   |  |  | ¥ | 67,466  |  
|                                 |  |                            |   |                          |   |                           |  |      |         |                           |  |       |   |         |   |  |  |   |        |  |  |  |   |        |   |  |  |   |         |  
|                                 | 
|                                 |  | Thousands of U.S. Dollars 
|                                 |  | Buildings and   Structures |   | Furniture and   Fixtures |   | Machinery and   Equipment |  | Land |         | Construction  in Progress |  | Total
|                                 |  |                            |   |                          |   |                          
|As of March 31, 2014             |  |                            | $ | 144,570                  |   |                           |  | $    | 208,397 |                           |  |       | $ | 101,897 |   |  |  | $ | 45,153 |  |  |  | $ | 491    |   |  |  | $ | 500,508 |  
|Purchase                         |  |                            |   | 7,431                    |   |                           |  |      | 103,412 |                           |  |       |   | 9,212   |   |  |  |   |        |  |  |  |   | 10,260 |   |  |  |   | 130,315 |  
|Disposals                        |  |                            |   | (699                     | ) |                           |  |      | (2,588  | )                         |  |       |   | (300    | ) |  |  |   |        |  |  |  |   |        |   |  |  |   | (3,587  | )
|Business combinations            |  |                            |   | 4,327                    |   |                           |  |      | 5,159   |                           |  |       |   |         |   |  |  |   | 14,388 |  |  |  |   | 2,680  |   |  |  |   | 26,554  |  
|Depreciation                     |  |                            |   | (14,138                  | ) |                           |  |      | (62,620 | )                         |  |       |   | (13,531 | ) |  |  |   |        |  |  |  |   |        |   |  |  |   | (90,289 | )
|Transfer of accounts             |  |                            |   |                          |   |                           |  |      | 4,535   |                           |  |       |   | 3,204   |   |  |  |   |        |  |  |  |   | (7,739 | ) |  |  |   |         |  
|Others                           |  |                            |   | (458                     | ) |                           |  |      | (1,082  | )                         |  |       |   | (507    | ) |  |  |   |        |  |  |  |   | (33    | ) |  |  |   | (2,080  | )
|                                 |  |                            |   |                          |   |                           |  |      |         |                           |  |       |   |         |   |  |  |   |        |  |  |  |   |        |   |  |  |   |         |  
|                                 |  |                            |   |                          |   |                          
|As of March 31, 2015 (unaudited) |  |                            | $ | 141,033                  |   |                           |  | $    | 255,213 |                           |  |       | $ | 99,975  |   |  |  | $ | 59,541 |  |  |  | $ | 5,659  |   |  |  | $ | 561,421 |  
|                                 |  |                            |   |                          |   |                           |  |      |         |                           |  |       |   |         |   |  |  |   |        |  |  |  |   |        |   |  |  |   |         |  



- 27 -



---

Acquisition Costs



|                                 |  |                            |   |                          |  |                           |  |      |         |                           |  |       |   |         |  |  |  |   |        |  |  |  |   |       |  |  |  |   |         | 
|-------------------------------- |  | -------------------------- | - | ------------------------ |  | ------------------------- |  | ---- | ------- | ------------------------- |  | ----- | - | ------- |  |  |  | - | ------ |  |  |  | - | ----- |  |  |  | - | ------- | 
|                                 |  | Millions of Yen           
|                                 |  | Buildings and   Structures |   | Furniture and   Fixtures |  | Machinery and   Equipment |  | Land |         | Construction  in Progress |  | Total
|                                 |  |                            |   |                          |  |                          
|As of April 1, 2013              |  |                            | ¥ | 21,055                   |  |                           |  | ¥    | 45,724  |                           |  |       | ¥ | 18,781  |  |  |  | ¥ | 5,426  |  |  |  | ¥ | 4,917 |  |  |  | ¥ | 95,903  | 
|As of March 31, 2014             |  |                            |   | 27,635                   |  |                           |  |      | 53,177  |                           |  |       |   | 21,426  |  |  |  |   | 5,426  |  |  |  |   | 59    |  |  |  |   | 107,723 | 
|As of March 31, 2015 (unaudited) |  |                            |   | 28,836                   |  |                           |  |      | 60,563  |                           |  |       |   | 22,510  |  |  |  |   | 7,155  |  |  |  |   | 680   |  |  |  |   | 119,744 | 
|                                 | 
|                                 |  | Thousands of U.S. Dollars 
|                                 |  | Buildings and   Structures |   | Furniture and   Fixtures |  | Machinery andEquipment    |  | Land |         | Constructionin Progress   |  | Total
|                                 |  |                            |   |                          |  |                          
|As of March 31, 2015 (unaudited) |  |                            | $ | 239,960                  |  |                           |  | $    | 503,977 |                           |  |       | $ | 187,318 |  |  |  | $ | 59,541 |  |  |  | $ | 5,659 |  |  |  | $ | 996,455 | 

Accumulated Depreciation and Impairment Losses



|                                 |  |                            |   |                          |   |                           |  |      |             |                           |  |       |   |            |   |  |  |  |  |  |  |  |   |     |   |  |  |  |             |  
|-------------------------------- |  | -------------------------- | - | ------------------------ | - | ------------------------- |  | ---- | ----------- | ------------------------- |  | ----- | - | ---------- | - |  |  |  |  |  |  |  | - | --- | - |  |  |  | ----------- | -
|                                 |  | Millions of Yen           
|                                 |  | Buildings and   Structures |   | Furniture and   Fixtures |   | Machinery and   Equipment |  | Land |             | Construction  in Progress |  | Total
|                                 |  |                            |   |                          |   |                          
|As of April 1, 2013              |  |                            | ¥ | (9,348                   | ) |                           |  |      | ¥  (27,440  | )                         |  |       | ¥ | (8,033     | ) |  |  |  |  |  |  |  | ¥ | (15 | ) |  |  |  | ¥  (44,836  | )
|As of March 31, 2014             |  |                            |   | (10,262                  | ) |                           |  |      | (28,134     | )                         |  |       |   | (9,181     | ) |  |  |  |  |  |  |  |   |     |   |  |  |  | (47,577     | )
|As of March 31, 2015 (unaudited) |  |                            |   | (11,888                  | ) |                           |  |      | (29,894     | )                         |  |       |   | (10,496    | ) |  |  |  |  |  |  |  |   |     |   |  |  |  | (52,278     | )
|                                 | 
|                                 |  | Thousands of U.S. Dollars 
|                                 |  | Buildings andStructures    |   | Furniture andFixtures    |   | Machinery andEquipment    |  | Land |             | Constructionin Progress   |  | Total
|                                 |  |                            |   |                          |   |                          
|As of March 31, 2015 (unaudited) |  |                            |   | $  (98,927               | ) |                           |  |      | $  (248,764 | )                         |  |       |   | $  (87,343 | ) |  |  |  |  |  |  |  |   |     |   |  |  |  | $  (435,034 | )



|12. | GOODWILL AND INTANGIBLE ASSETS
|--- | ------------------------------

Changes in carrying amounts of goodwill and intangible
assets, costs, and accumulated amortization and impairment losses are as follows:

Carrying Amounts



|                                 |  |                 |   |          |   |                         |  |        |        |       |  |  |   |       |   |  |  |   |       |   |  |  |   |        |  
|-------------------------------- |  | --------------- | - | -------- | - | ----------------------- |  | ------ | ------ | ----- |  |  | - | ----- | - |  |  | - | ----- | - |  |  | - | ------ | -
|                                 |  | Millions of Yen
|                                 |  | Goodwill        |   | Software |   | Customer  Relationships |  | Others |        | Total
|                                 |  |                 |   |          |  
|As of April 1, 2013              |  |                 | ¥ | 14,395   |   |                         |  | ¥      | 12,020 |       |  |  | ¥ | 4,514 |   |  |  | ¥ | 395   |   |  |  | ¥ | 31,324 |  
|Internal development             |  |                 |   |          |   |                         |  |        | 3,941  |       |  |  |   |       |   |  |  |   |       |   |  |  |   | 3,941  |  
|Purchase                         |  |                 |   |          |   |                         |  |        | 3,541  |       |  |  |   |       |   |  |  |   | 11    |   |  |  |   | 3,552  |  
|Business combinations            |  |                 |   | 1,737    |   |                         |  |        | 12     |       |  |  |   |       |   |  |  |   | 475   |   |  |  |   | 2,224  |  
|Disposals                        |  |                 |   |          |   |                         |  |        | (1,765 | )     |  |  |   |       |   |  |  |   | (281  | ) |  |  |   | (2,046 | )
|Amortization                     |  |                 |   |          |   |                         |  |        | (4,089 | )     |  |  |   | (785  | ) |  |  |   | (126  | ) |  |  |   | (5,000 | )
|Others                           |  |                 |   | (323     | ) |                         |  |        | (5     | )     |  |  |   |       |   |  |  |   | 2     |   |  |  |   | (326   | )
|                                 |  |                 |   |          |   |                         |  |        |        |       |  |  |   |       |   |  |  |   |       |   |  |  |   |        |  
|As of March 31, 2014             |  |                 |   | 15,809   |   |                         |  |        | 13,655 |       |  |  |   | 3,729 |   |  |  |   | 476   |   |  |  |   | 33,669 |  
|Internal development             |  |                 |   |          |   |                         |  |        | 7,429  |       |  |  |   |       |   |  |  |   |       |   |  |  |   | 7,429  |  
|Purchase                         |  |                 |   |          |   |                         |  |        | 5,359  |       |  |  |   |       |   |  |  |   | 2,010 |   |  |  |   | 7,369  |  
|Business combinations            |  |                 |   | 11,864   |   |                         |  |        | 2,616  |       |  |  |   | 4,650 |   |  |  |   | 41    |   |  |  |   | 19,171 |  
|Disposals                        |  |                 |   |          |   |                         |  |        | (1,616 | )     |  |  |   |       |   |  |  |   |       |   |  |  |   | (1,616 | )
|Amortization                     |  |                 |   |          |   |                         |  |        | (4,939 | )     |  |  |   | (889  | ) |  |  |   | (104  | ) |  |  |   | (5,932 | )
|Others                           |  |                 |   |          |   |                         |  |        | (35    | )     |  |  |   |       |   |  |  |   |       |   |  |  |   | (35    | )
|                                 |  |                 |   |          |   |                         |  |        |        |       |  |  |   |       |   |  |  |   |       |   |  |  |   |        |  
|                                 |  |                 |   |          |  
|As of March 31, 2015 (unaudited) |  |                 | ¥ | 27,673   |   |                         |  | ¥      | 22,469 |       |  |  | ¥ | 7,490 |   |  |  | ¥ | 2,423 |   |  |  | ¥ | 60,055 |  
|                                 |  |                 |   |          |   |                         |  |        |        |       |  |  |   |       |   |  |  |   |       |   |  |  |   |        |  



- 28 -



---

Thousands of U.S. DollarsGoodwill

Software

Customer  Relationships

Others

TotalAs of March 31, 2014


$
131,555



$
113,631



$
31,031



$
3,961



$
280,178Internal development








61,821














61,821Purchase








44,595









16,726




61,321Business combinations



98,727




21,769




38,695




341




159,532Disposals








(13,448
)













(13,448
)Amortization








(41,100
)



(7,398
)



(865
)



(49,363
)Others








(291
)













(291
)As of March 31, 2015 (unaudited)


$
230,282



$
186,977



$
62,328



$
20,163



$
499,750


Acquisition Costs



Millions of YenGoodwill

Software

Customer  Relationships

Others

TotalAs of April 1, 2013


¥
14,395



¥
33,680



¥
4,710



¥
492



¥
53,277As of March 31, 2014



15,809




37,775




4,710




980




59,274As of March 31, 2015 (unaudited)



27,673




50,978




9,360




3,030




91,041




Thousands of U.S. DollarsGoodwill

Software

Customer  Relationships

Others

TotalAs of March 31, 2015 (unaudited)


$
230,282



$
424,216



$
77,890



$
25,214



$
757,602


Accumulated Amortization and Impairment Losses



Millions of YenGoodwill


Software


Customer  Relationships

Others


TotalAs of April 1, 2013






¥  (21,660
)

¥   (196)

¥
(97
)

¥
(21,953
)As of March 31, 2014






(24,120
)

(981)


(504
)


(25,605
)As of March 31, 2015 (unaudited)






(28,509
)

(1,870)


(607
)


(30,986
)




Thousands of U.S. DollarsGoodwill


Software


Customer  Relationships

Others


TotalAs of March 31, 2015 (unaudited)






$  (237,239
)

$  (15,561)


$  (5,051
)


$  (257,851
)


Customer relationships represent probable expected future economic benefits attributable to the existing
customers of the acquiree at the time of business combination.

Amortization expenses are included in Cost of sales and
Selling, general and administrative expenses in the consolidated statements of profit or loss.

Research and development costs
charged to income for the years ended March 31, 2015 and 2014 were ¥275 million ($2,288 thousand) and ¥233 million, respectively.



- 29 -



---

The carrying amounts of internally generated intangible assets related to software as of
March 31, 2015 and 2014 and April 1, 2013 are ¥14,763 million ($122,851 thousand), ¥8,758 million and ¥6,238 million, respectively.

Significant goodwill of the Group is allocated to the following groups of cash-generating units, which represent operating segments:



Millions of Yen

Thousands of U.S. DollarsYear EndedMarch 31,

Year EndedMarch 31,2015

2014

2015Unaudited



UnauditedSettlement- and finance-related


¥
16,392



¥
8,037



$
136,407Marketing solutions business



10,906




7,421




90,755


In testing goodwill for impairment, the recoverable amount is determined based on its value in use.

Value in use is determined by discounting the estimated future cash flows to their present value based on the business plan and growth rate
approved by the management.

Business plans are prepared based on external and internal information, which reflect the managements
assessment of future trends in the industry and past data, and basically do not exceed five years. Growth rate is determined considering the long-term average growth rate of the market or country to which the cash-generating unit belongs. The growth rates used for the years ended March 31, 2015 and 2014 were 1.9% and 1.9%, respectively. The pretax discount rates used in measurement of value in use for the years
ended March 31, 2015 and 2014 were 8.3%11.8% and 9.1%12.4%, respectively.

As value in use sufficiently exceeds the
carrying values of cash-generating units, the Company determined that the recoverable amount is unlikely to decrease below the carrying value, even if major assumptions used in the impairment test change to a
reasonably foreseeable extent.



|13. | DISCLOSURE OF INTERESTS IN OTHER ENTITIES
|--- | -----------------------------------------



| | (1) | Subsidiaries
| | --- | ------------

The Companys major subsidiaries as of
March 31, 2015 and 2014 are as follows:



Ownership Percentageof Voting Rights (%)Name of Subsidiary

Location

As ofMarch 31,2015



As ofMarch 31,2014UnauditedYs Sports Inc.

Tokyo

100.0%



100.0%Netrust, Ltd

Tokyo

75.0



75.0Ys Insurance Inc.

Tokyo

60.0



60.0FirstServer, Inc.

Osaka

100.0



100.0IDC Frontier Inc.

Tokyo

100.0



100.0GYAO Corporation

Tokyo

66.7



58.0YJ Capital Inc.

Tokyo

100.0



100.0YJ1 Investment Partnership

TokyoValueCommerce Co., Ltd.

Tokyo

50.5



50.5Carview Corporation

Tokyo

100.0



53.8YJFX, Inc.

Tokyo

100.0



100.0Synergy Marketing, Inc.

Osaka

100.0YJ2 Investment Partnership

TokyoYJ Card Corporation

Fukuoka

65.0




- 30 -



---

| | (2) | Investments Accounted for Using the Equity Method
| | --- | -------------------------------------------------

Aggregated
amount of investments accounted for using the equity method that are not individually material is as follows:



Millions of Yen

Thousands of U.S. DollarsAs ofMarch 31,2015

As ofMarch 31,2014

As ofApril 1,2013

As ofMarch 31,2015Unaudited





UnauditedCarrying amount


¥
61,671



¥
34,364



¥
40,281



$
513,198


Other financial information of investments accounted for using the equity method that are not
individually material is as follows:



Millions of Yen

Thousands of U.S. DollarsYear EndedMarch 31,

Year EndedMarch 31,2015

2014

2015Unaudited



UnauditedProfit for the year attributable to the Group


¥
1,673



¥
(94
)


$
13,922Other comprehensive income, net of tax,attributable to the Group



976




191




8,123Comprehensive income attributable tothe Group



2,649




97




22,045




| | (3) | Structured Entities
| | --- | -------------------

The Group invests inside and outside Japan by
utilizing investment partnerships. Such partnerships provide their investees with cash raised from members of the partnerships mainly in the form of investments, and have been designed so that voting or similar rights are not the dominant factor in
deciding who controls the entity.

The Group invests in unconsolidated structured entities such as investment funds and trusts over which
the Group does not have control with regard to operating policies such as those related to selecting investees.

The Company does not have
any contractual obligations to provide any financial support to the unconsolidated structured entities. Therefore, the potential maximum loss exposure incurred from the involvement with such structured entities is limited to the total of the
carrying amount of the Companys investment, which is as follows:



Millions of Yen

Thousands of U.S. DollarsAs ofMarch 31,2015

As ofMarch 31,2014

As ofApril 1,2013

As ofMarch 31,2015Unaudited





UnauditedOther financial assets (non-current)


¥
3,535



¥
1,844



¥
736



$
29,417


The Companys maximum loss exposure represents the potential maximum loss amount, and does not
indicate the probability of occurrence.



- 31 -



---

|14. | INCOME TAXES
|--- | ------------



| | (1) | Deferred Taxes
| | --- | --------------

The components of deferred tax assets and deferred
tax liabilities are as follows:



Millions of Yen

Thousands of   U.S. DollarsAs ofMarch 31,      2015

As ofMarch 31,      2014

As ofApril 1,    2013

As ofMarch 31,2015Unaudited





UnauditedDeferred tax assets:Enterprise tax payable


¥
2,370



¥
3,039



¥
3,263



$
19,722Property and equipment andintangible assets



5,622




3,930




3,443




46,784Liabilities related to employeebenefits



3,427




3,674




2,767




28,518Available-for-sale financial assets



1,005




5,463




5,366




8,363Provision for interest repaymentclaims



8,198














68,220Others



4,526




3,051




3,301




37,663Total deferred taxassets



25,148




19,157




18,140




209,270Deferred tax liabilities:Property and equipment andintangible assets



2,601




1,534




1,701




21,644Available-for-sale financial assets



4,529




5,192




2,366




37,688Others



2,942














24,482Total deferred taxliabilities



10,072




6,726




4,067




83,814Deferred tax assets, net


¥
15,076



¥
12,431



¥
14,073



$
125,456




Note:

Liabilities related to employee benefits include liabilities attributable to accrued bonuses and paid absences.


Changes in deferred tax assets and liabilities are as follows:



Millions of Yen

Thousands of   U.S. DollarsYear EndedMarch 31,

Year EndedMarch 31,2015

2014

2015Unaudited



UnauditedDeferred tax assets (liabilities), net,beginning of year


¥
12,431



¥
14,073



$
103,445Deferred tax



(3,890
)



1,313




(32,371
)Income taxes on other comprehensiveincome (Note 1)



722




(2,819
)



6,008Others (Note 2)



5,813




(136
)



48,374Deferred tax assets (liabilities), net,end of year


¥
15,076



¥
12,431



$
125,456




- 32 -



---

Notes:



| | 1. | This represents an increase in future taxable differences related to available-for-sale financial assets.
| | -- | ---------------------------------------------------------------------------------------------------------



| | 2. | This item mainly consists of temporary differences arising from business combinations of ¥6,000 million ($49,929 thousand) and ¥(148) million for the years ended March 31, 2015 and 2014,
respectively. The business combinations for the year ended March 31, 2015 include ¥8,886 million ($73,945 thousand) of provision for interest repayment claims and ¥(3,639) million ($(30,282) thousand) of other
deferred tax liabilities in relation to the conversion of YJ Card Corporation into a consolidated subsidiary.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Deferred tax
assets and liabilities in the consolidated statements of financial position are as follows:



Millions of Yen

Thousands ofU.S. DollarsAs ofMarch 31,2015

As ofMarch 31,2014

As ofApril 1,2013

As ofMarch 31,2015Unaudited





UnauditedDeferred tax assets


¥
15,105



¥
12,469



¥
14,104



$
125,697Deferred tax liabilities



29




38




31




241Net


¥
15,076



¥
12,431



¥
14,073



$
125,456


At March 31, 2015, the Group has ¥6,674 million ($55,538 thousand) of deferred tax
assets which belong to entities that recorded losses. The Group recognizes deferred tax assets to the extent that it is probable that future taxable profit will be available.

Deductible temporary differences and net operating loss carryforwards for which no deferred tax assets have been recognized are as follows:



Millions of Yen

Thousands ofU.S. DollarsAs ofMarch 31,2015

As ofMarch 31,2014

As ofApril 1,2013

As ofMarch 31,2015Unaudited





UnauditedDeductible temporary differences


¥
644



¥
572



¥
891



$
5,359Net operating loss carryforwardswhich expire:Within one yearIn one year to five years







¥
233



¥
158After five years


¥
355




710




1,118



$
2,954Total


¥
355



¥
943



¥
1,276



$
2,954


Total taxable temporary differences (before multiplying by the tax rate) for which no deferred tax
liabilities related to the investments in subsidiaries have been recognized as of March 31, 2015 and 2014 and April 1, 2013 are ¥22,704 million ($188,932 thousand), ¥17,205 million and ¥8,914 million,
respectively.



- 33 -



---

| | (2) | Tax Expenses
| | --- | ------------

The components of income tax expenses are as
follows:



Millions of Yen


Thousands of U.S. DollarsYear EndedMarch 31,


Year EndedMarch 31,2015


2014


2015Unaudited





UnauditedCurrent tax expenses

¥
70,476


¥
79,870


$
586,469Deferred tax expenses


3,890



(1,313
)


32,371Total

¥
74,366


¥
78,557


$
618,840


For the year ended March 31, 2015

On March 31, 2015, the Act on the Partial Revision of the Income Tax Act (Article 9, 2015) and the Act on the Partial Revision of
the Local Tax Act (Article 2, 2015) were promulgated in Japan. On April 1, 2015, the Ordinance on the Metropolitan Tax and the Ordinance on the Partial Revision of the Metropolitan Tax (Ordinance 93, 2015) was also promulgated in Tokyo. In
accordance with these changes, deferred tax assets and liabilities are determined by using the new statutory tax rate. The effect of this change was to increase income taxescurrent by ¥2,140 million ($17,808 thousand).

For the year ended March 31, 2014

In Japan, the Act on the Partial Revision of the Income Tax Act (Article 10, 2014) was issued on March 31, 2014, and the special
corporation tax for reconstruction was not imposed from the fiscal year started April 1, 2014. The statutory effective tax rate was changed in the year ended March 31, 2014 in relation to this revision of law. The impact of this change was
not material.

The reconciliation of the statutory effective tax rate and actual tax rate is as follows, with the actual tax rate
representing the ratio of income tax expenses to profit before tax:



Year EndedMarch 31,2015


2014UnauditedStatutory effective tax rate (%)


35.64



38.01Effect of the change in statutory tax rate (%)


1.06



0.36Gain on remeasurement of investments in associatesacquired in stages (%)


(1.07
)Negative goodwill arising from reclassification ofinvestments (%)


(0.56
)Others (%)


0.63



(0.64
)Actual tax rate (%)


35.70



37.73




- 34 -



---

|15. | TRADE AND OTHER PAYABLES
|--- | ------------------------

The components of trade and other payables are as follows:



Millions of Yen

Thousands of U.S. DollarsAs ofMarch 31,2015

As ofMarch 31,2014

As ofApril 1,2013

As ofMarch 31,2015Unaudited





UnauditedForeign exchange dealings depositsfrom customers


¥
97,178



¥
81,595



¥
72,485



$
808,671Accounts payableother



35,790




24,334




20,852




297,828Accounts payabletrade



14,821




12,507




11,114




123,334Others



11,190




24,126




17,157




93,118Total


¥
158,979



¥
142,562



¥
121,608



$
1,322,951




|16. | OTHER FINANCIAL LIABILITIES
|--- | ---------------------------

The components of other financial liabilities are as
follows:



Millions of Yen

Thousands of U.S. DollarsAs ofMarch 31,2015

As ofMarch 31,2014

As ofApril 1,2013

As ofMarch 31,2015Unaudited





UnauditedDerivative financial liabilities


¥
9,070



¥
5,108



¥
5,648



$
75,476Others



1,521




128




147




12,658Total


¥
10,591



¥
5,236



¥
5,795



$
88,134Current liabilities


¥
9,671



¥
5,108



¥
5,648



$
80,478Non-current liabilities



920




128




147




7,656




|17. | PROVISIONS
|--- | ----------

The components of provisions are as follows:



Millions of Yen

Thousands ofU.S. DollarsAs ofMarch 31,2015

As ofMarch 31,2014

As ofApril 1,2013

As ofMarch 31,2015Unaudited





UnauditedProvision for interest repaymentclaims (Notes 1 and 2)


¥
23,357













$
194,366Asset retirement obligations (Note 1)



2,738



¥
2,655



¥
2,460




22,784Others (Notes 1 and 3)



3,146




2,951




4,299




26,181Total


¥
29,241



¥
5,606



¥
6,759



$
243,331Provisions (current)


¥
6,399



¥
2,951



¥
4,299



$
53,250Provisions (non-current)



22,842




2,655




2,460




190,081




- 35 -



---

Notes:



| | 1. | Additional information on the nature of the provisions included in the table above is provided in Note 3. Significant accounting policies (9) Provisions.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Provision for interest repayment claims is calculated by estimating the future repayment amount based on the historical experience of repayments and expirations due to the statute of limitations.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | This item mainly consists of provision for Yahoo! Points.
| | -- | ---------------------------------------------------------

Changes in provisions are as
follows:



Millions of YenProvision for  InterestRepaymentClaims

AssetRetirement  Obligations

Others

TotalAs of April 1, 2014







¥
2,655



¥
2,951



¥
5,606Recognition of provisions








114




2,976




3,090Business combinations


¥
24,081




33




234




24,348Increase due to passage of time








73









73Used



(724
)



(152
)



(61
)



(937
)Reversal








(11
)



(26
)



(37
)Others








26




(2,928
)



(2,902
)As of March 31, 2015 (unaudited)


¥
23,357



¥
2,738



¥
3,146



¥
29,241




Thousands of U.S. DollarsProvision for  InterestRepaymentClaims

AssetRetirement  Obligations

Others

TotalAs of April 1, 2014







$
22,094



$
24,557



$
46,651Recognition of provisions








949




24,765




25,714Business combinations


$
200,391




275




1,947




202,613Increase due to passage of time








607









607Used



(6,025
)



(1,265
)



(507
)



(7,797
)Reversal








(92
)



(216
)



(308
)Others








216




(24,365
)



(24,149
)As of March 31, 2015 (unaudited)


$
194,366



$
22,784



$
26,181



$
243,331




|18. | PURCHASE COMMITMENTS
|--- | --------------------

Commitments to purchase goods and services as of March 31,
2015 and 2014 are ¥12,234 million ($101,806 thousand) and ¥12,749 million, respectively. The commitments are mainly attributable to executory contracts of usage fees of data-center
communication equipment and purchase of assets.



- 36 -



---

|19. | OTHER LIABILITIES
|--- | -----------------

The components of other current liabilities and other non-current liabilities are as follows:



Millions of Yen

Thousands of U.S. DollarsAs ofMarch 31,

As ofMarch 31,

As ofApril 1,

As of
March 31,2015

2014

2013

2015Unaudited





UnauditedConsumption taxes payable


¥
11,064



¥
2,811



¥
3,999



$
92,070Advance received



9,296




8,018




7,419




77,357Accrued bonuses



5,215




5,612




3,661




43,397Accrued paid absences



4,037




3,665




3,223




33,594Others



5,525




3,065




3,029




45,975Total


¥
35,137



¥
23,171



¥
21,331



$
292,393Other current liabilities


¥
31,652



¥
22,058



¥
20,261



$
263,393Other non-current liabilities



3,485




1,113




1,070




29,000




|20. | RETIREMENT BENEFITS
|--- | -------------------

Outline of Retirement Benefit Plans

The Company and certain subsidiaries participate primarily in defined contribution pension plans, as well as a multi-employer contributory defined benefit welfare pension plan. On April 1, 2015, the Company and certain subsidiaries withdrew from The Kanto IT Software Pension Fund (Kanto IT), a multi-employer contributory defined benefit welfare pension plan. The effect of the withdrawal was not material.



| | (1) | Defined contribution pension plans
| | --- | ----------------------------------

Retirement benefit costs of defined contribution
plans, including multi-employer welfare pension plan for which the accounting treatment is the same as that of defined contribution plans, are as follows:



Millions of Yen


Thousands of U.S. DollarsYear EndedMarch 31,


Year EndedMarch 31,2015


2014


2015Unaudited





UnauditedContributions to multi-employerpension plans

¥
933


¥
813


$
7,764Contributions to defined contributionpension plans


498



445



4,144Total

¥
1,431


¥
1,258


$
11,908




- 37 -



---

| | (2) | Multi-employer contributory defined benefit welfare pension plans
| | --- | -----------------------------------------------------------------

Contributions made by the Company and its consolidated subsidiaries to the multi-employer pension
plans are expensed when paid because the plan assets attributable to each participant cannot be reasonably determined. Contributions are calculated by multiplying average salary of the participant by a certain rate. When an employer withdraws from
the plans, the employer may be required to contribute its unfunded portion as a special contribution at withdrawal. In the event the plan is dissolved and liquidated, the deficit will be collected or the remainder will be distributed in accordance
with the minimum funding requirement set by applicable laws. Details of the multi-employer contributory defined benefit welfare pension plans for which contributions are expensed as retirement benefit expenses
are as follows:

The fair values of the welfare pension plans entire assets and actuarial pension liabilities as of March 31,
2015 and 2014 and April 1, 2013, are as follows:

(Kanto IT)



Millions of Yen

Thousands of U.S. DollarsAs ofMarch 31,2015

As ofMarch 31,2014

As ofApril 1,2013

As ofMarch 31,2015Unaudited





UnauditedBased on the fair valueinformation as of:



March 31,2014




March 31,2013




March 31,2012




March 31,2014Fair value of all plan
assets


¥
252,294



¥
222,957



¥
186,190



$
2,099,476Total of actuarial pensionliabilities and plansminimum reserve



227,331




206,136




186,649




1,891,745Difference


¥
24,963



¥
16,821



¥
(459
)


$
207,731(The Pension Fund of Japan Electronics Information
Technology Industry (JEIT))Millions of Yen

Thousands of U.S. DollarsAs ofMarch 31,2015

As ofMarch 31,2014

As ofApril 1,2013

As ofMarch 31,2015Unaudited





UnauditedBased on the fair valueinformation as of:



March 31,2014




March 31,2013




March 31,2012




March 31,2014Fair value of all plan
assets


¥
231,951



¥
213,152



¥
191,384



$
1,930,190Total of actuarial pensionliabilities and plansminimum reserve



262,247




246,041




230,273




2,182,300Difference


¥
(30,296
)


¥
(32,889
)


¥
(38,889
)


$
(252,110
)




Note:

Because the welfare pension plans provide their information only once a year, the latest information available at the time of preparing these consolidated financial statements is that of one year earlier.




- 38 -



---

The participation ratios in the welfare pension plans based on the latest information available
as of March 31, 2015 and 2014 and April 1, 2013 were as follows:



As ofMarch 31,2015

As ofMarch 31,2014

As ofApril 1,2013UnauditedBased on the fair value information as of:

March 31,2014

March 31,2013

March 31,2012Kanto IT

6.7%

5.8%

5.1%JEIT

0.4%

0.3%

0.3%


Under the welfare pension plans, prior service cost is amortized over 20 years by using the straight-line method.

The major components of the differences between the aggregate plan assets and
liabilities in the tables above are as follows:

(Kanto IT)



Millions of Yen

Thousands of U.S. DollarsAs ofMarch 31,2015

As ofMarch 31,2014

As ofApril 1,2013

As ofMarch 31,2015Unaudited





UnauditedBased on the fair valueinformation as of:



March 31,2014




March 31,2013




March 31,2012




March 31,2014Other reserve


¥
19,333








¥
3,330



$
160,881Funded reserve



5,630



¥
26,904




(13,412
)



46,850Accumulated unfunded portion








(10,083
)Adjustment for remeasurementof assets













9,623Total


¥
24,963



¥
16,821



¥
(459
)


$
207,731


(JEIT)



Millions of Yen

Thousands of U.S. DollarsAs ofMarch 31,2015

As ofMarch 31,2014

As ofApril 1,2013

As ofMarch 31,2015Unaudited





UnauditedBased on the fair valueinformation as of:



March 31,2014




March 31,2013




March 31,2012




March 31,2014Other reserve


¥
1,241



¥
235








$
10,327Accumulated deficit












¥
(3,360
)Unamortized obligations



(31,537
)



(33,124
)



(35,529
)



(262,437
)Total


¥
(30,296
)


¥
(32,889
)


¥
(38,889
)


$
(252,110
)




- 39 -



---

|21. | OPERATING LEASES
|--- | ----------------



| | (1) | As Lessee
| | --- | ---------

The Group leases buildings to utilize as offices and
data centers through operating lease contracts. Certain operating lease contracts have an automatic renewal option. There are no contingent rents payable, purchase options, escalation clauses, or restrictions imposed by lease arrangements, such as
those concerning dividends, additional debt, and further leasing. Total rental expenses under operating lease contracts for the fiscal years ended March 31, 2015 and 2014, were ¥9,864 million ($82,084 thousand) and
¥9,267 million, respectively.

Non-cancelable operating leases

The components of the future minimum lease payments under non-cancelable operating leases are as
follows:



Millions of Yen


Thousands of U.S. DollarsYear EndedMarch 31,


Year EndedMarch 31,2015


2014


2015Unaudited





UnauditedNot later than one year

¥
8,206


¥
8,003


$
68,287Later than one year andnot later than five years


5,724



11,725



47,633Later than five years


586



646



4,876Total

¥
14,516


¥
20,374


$
120,796




| | (2) | As Lessor
| | --- | ---------

Non-cancelable operating leases

The Group leases data-center services-related equipment (e.g.,
servers) as lessor through operating lease contracts. The components of the future minimum payments under non-cancelable operating leases are as follows:



Millions of Yen


Thousands of U.S. DollarsYear EndedMarch 31,


Year EndedMarch 31,2015


2014


2015Unaudited





UnauditedNot later than one year

¥
2,243


¥
2,461


$
18,665Later than one year andnot later than five years


736



447



6,125Total

¥
2,979


¥
2,908


$
24,790




- 40 -



---

|22. | EQUITY
|--- | ------



| | (1) | Common Stock and Treasury Stock
| | --- | -------------------------------

Numbers of authorized shares and
issued shares are as follows:



Year Ended March 31,2015


2014UnauditedAuthorized sharesCommon stock


24,160,000,000



24,160,000,000Issued shares:Balance at the beginning of the year


5,694,900,600



57,510,554Increase


44,400



5,694,630,346(Note 2)



(Note 1)Decrease






(57,240,300
)(Note 3)Balance at the end of the year


5,694,945,000



5,694,900,600


Notes:



| | 1. | This item consists of 5,694,321,303 shares resulting from a hundred-for-one share split that became effective on October 1, 2013 and
309,043 shares from the exercise of share subscription rights.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | This item represents the exercise of share subscription rights.
| | -- | ---------------------------------------------------------------



| | 3. | This item represents the retirement of treasury stock.
| | -- | ------------------------------------------------------

Numbers of treasury stock included in
issued shares as of March 31, 2015 and 2014 and April 1, 2013 were 2,800,000 shares, 1,016,800 shares and 10,168 shares, respectively.



| | (2) | Surplus
| | --- | -------



| | 1) | Capital surplus
| | -- | ---------------

Capital surplus of the Company includes additional paid-in capital. Under the Companies Act of Japan (the Companies Act), at least 50% of the proceeds upon issuance of equity instruments shall be credited to common stock. The remainder of the proceeds
shall be credited to additional paid-in capital. The Companies Act permits, upon approval at the general meeting of shareholders, the transfer of amounts from additional
paid-in capital to common stock.



| | 2) | Retained earnings
| | -- | -----------------

Retained earnings of the Company include the reserve legally
required as legal retained earnings. The Companies Act provides that 10% of the dividends from retained earnings shall be appropriated as legal capital surplus or as legal retained earnings until their aggregate amount equals 25% of common stock.
The legal retained earnings may be used to eliminate or reduce a deficit or be transferred to retained earnings upon approval at the general meeting of shareholders.



- 41 -



---

|23. | DIVIDENDS
|--- | ---------

Total amount of dividends was as follows:



Millionsof Yen

Thousands of U.S. Dollars

Yen

U.S. DollarsResolution

Total  Dividends

Total  Dividends

Dividends  per Share

Dividends  per Share

Record Date

Effective DateYear Ended March 31, 2015 (Unaudited)Board of directors meeting held on May 16, 2014


¥
25,224



$
209,903




¥4.43



$
0.04


March 31, 2014

June 5, 2014Year Ended March 31, 2014Board of directors meeting held on May 17, 2013


¥
23,058









¥401







March 31, 2013

June 6, 2013




| |  |       |  |                                                                                                                                                                     
| |  | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Note: |  | The effect of the hundred-for-one share split effected on October 1, 2013 has not been reflected in the dividends per share for the year ended
March 31, 2014 above.

Dividends to become effective during the year ending March 31, 2016 are as follows:



Millionsof Yen

Thousands of U.S. Dollars

Yen

U.S. DollarsResolution

Total  Dividends

Total  Dividends

Dividends  per Share

Dividends  per Share

Record Date

Effective DateBoard of directors meeting held on May 21, 2015 (unaudited)


¥
50,432



$
419,672



¥
8.86



$
0.07


March 31, 2015

June 4, 2015




|24. | SHARE-BASED PAYMENT
|--- | -------------------

The Company has share
option plans as share-based payment awards. Share options are granted to the Companys directors and employees based on the terms approved by the Companys shareholders and the board of directors.

Share-based payments are accounted for as equity-settled
share based payments. Expenses related to equity-settled share-based payments for the years ended March 31, 2015 and 2014 were ¥31 million
($258 thousand) and ¥57 million, respectively.



| | (1) | Share Option Plans
| | --- | ------------------



| | 1) | Details of share option plans
| | -- | -----------------------------

The details of the Companys share option plans
for the years ended March 31, 2015 and 2014 are as follows:

The Company grants share options to its directors and employees.
Company shares will be issued upon exercise of such share options.



- 42 -



---

On October 1, 2013, the Company made a share split by way of a free share distribution at a
rate of 100 shares for each outstanding share. The record date of the share split was September 30, 2013. The effect of the hundred-for-one share split has been
reflected in the options and share information in the tables below:



Options Series

Grant Date

Exercise Period2005 (Note 1)

May 2, 2006

June 17, 20152006 (Note 1)

From September 6, 2006 to February 7, 2007

From August 23, 2016 to January 24, 20172007 (Note 1)

From May 8, 2007to February 13, 2008

From April 24, 2017 to January 30, 20182008 (Note 1)

From May 9, 2008to February 10, 2009

From April 25, 2018 to January 27, 20192009 (Note 1)

From May 12, 2009to February 10, 2010

From April 28, 2019 to January 27, 20202010 (Note 1)

From May 11, 2010to February 8, 2011

From April 27, 2020 to January 25, 20212011 (Note 1)

From June 3, 2011to February 17, 2012

From May 20, 2021 to February 3, 202220121st (Note 1)2nd (Note 2)

From May 16, 2012to March 1, 2013

From May 2, 2022 to February 28, 202320131st (Note 3)2nd (Note 4)

From May 17, 2013to November 19, 2013

From May 16, 2023 to November 18, 202320141st (Note 4)

May 26, 2014

May 25, 2024


Notes:



| | 1. | Vesting condition
| | -- | -----------------

Rights mainly vest in stages after two years from the grant date. One half
of the total granted vests after two years from the grant date, and one-fourth vests per year in the subsequent two years. Vesting requires continuous service from the grant date to the vesting date. When an
eligible person retires, vested acquisition rights are forfeited.



- 43 -



---

| | 2. | Vesting condition
| | -- | -----------------

Rights vest according to the amount of operating income achieved as
specified in (i) and (ii) below in any year from the fiscal year ended March 31, 2014 to fiscal year ending March 31, 2019.



| | (i) | If the operating income exceeds ¥250 billion
| | --- | --------------------------------------------

Period of achievement: By fiscal year
ending March 31, 2016; Exercisable ratio: 20%

Period of achievement: By fiscal year ending March 31, 2017; Exercisable ratio:
14%

Period of achievement: By fiscal year ending March 31, 2018; Exercisable ratio:   8%

Period of achievement: By fiscal year ending March 31, 2019; Exercisable ratio:   2%



| | (ii) | If the operating income exceeds ¥330 billion
| | ---- | --------------------------------------------

Period of achievement: By fiscal year
ending March 31, 2016; Exercisable ratio: 80%

Period of achievement: By fiscal year ending March 31, 2017; Exercisable ratio:
56%

Period of achievement: By fiscal year ending March 31, 2018; Exercisable ratio: 32%

Period of achievement: By fiscal year ending March 31, 2019; Exercisable ratio:   8%

Vesting requires continuous service from the grant date to the vesting date. When an eligible person retires, vested acquisition rights are
forfeited.



| | 3. | Vesting condition
| | -- | -----------------

Rights vest according to the amount of operating income achieved as
specified in (i) and (ii) below in any year from the fiscal year ended March 31, 2014 to fiscal year ending March 31, 2019.



| | (i) | If the operating income exceeds ¥250 billion; Exercisable ratio: 20%
| | --- | --------------------------------------------------------------------

| | (ii) | If the operating income exceeds ¥330 billion; Exercisable ratio: 80%
| | ---- | --------------------------------------------------------------------

Vesting requires
continuous service from the grant date to the vesting date. When an eligible person retires, vested acquisition rights are forfeited.



| | 4. | Vesting condition
| | -- | -----------------

Rights vest once the operating income for the fiscal year exceeds
¥330 billion in any year from the fiscal year ended March 31, 2015 to fiscal year ending March 31, 2019. Vesting requires continuous service from the grant date to the vesting date. When an eligible person retires, vested
acquisition rights are forfeited.



| | (2) | Fair Value of Share Options Granted during the Period
| | --- | -----------------------------------------------------

Weighted
average fair values and information on how fair value is measured at the measurement date of the share options granted during the period are as follows:

Weighted average fair values at the measurement date of the share options granted during the period for the years ended March 31, 2015
and 2014 are ¥195 ($1.62) and ¥209, respectively.



- 44 -



---

Information on fair value measurement of share options is as follows:



For the Year EndedMarch 31, 2015UnauditedOptions series




20141stValuation method used






Monte Carlo simulationKey inputs and assumptions:Weighted average stock price (yen) (U.S. dollars)






¥492 ($4.09)Exercise price (yen) (U.S. dollars)






¥492 ($4.09)Volatility of stock price (Note)






36.90%Period until maturity






10 yearsEstimated dividend






Dividend yield 0.90%Risk-free interest rate






0.612%For the Year Ended March 31, 2014Options series

20131st


20132ndValuation method used


Monte Carlo simulation



Monte Carlo simulationKey inputs and assumptions:Weighted average stock price(yen)


¥492



¥514Exercise price (yen)


¥493



¥514Volatility of stock price (Note)


38.27%



37.15%Period until maturity


10 years



10 yearsEstimated dividend


Dividend yield 0.70%



Dividend yield 0.78%Risk-free interest rate


0.585%



0.605%




| |  |       |  |                                                                                                                               
| |  | ----- |  | ------------------------------------------------------------------------------------------------------------------------------
| |  | Note: |  | Calculated based on the latest actual stock price in the retrospective period that corresponds with the period until maturity.



| | (3) | Changes in Share Options during the Period and the Condition of Share Options at the Period End
| | --- | -----------------------------------------------------------------------------------------------

Changes in share options (expressed in the number of shares issued upon exercise) during the period and the condition of share options at the
period end are as follows:



For the Year Ended March 31,2015

2014Number of Shares


Weighted AverageExercise Price  (Yen) (U.S. Dollars)

Number of Shares


Weighted Average Exercise Price (Yen)UnauditedBeginning balanceUnexercised


64,012,500


¥427 ($3.55)


30,850,500


¥ 329Granted


1,950,000


¥492 ($4.09)


35,676,000


¥ 508Forfeited


(331,400
)

¥475 ($3.95)


(1,761,300
)

¥ 370Exercised


(44,400
)

¥325 ($2.70)


(752,700
)

¥ 339Ending balanceUnexercised


65,586,700


¥429 ($3.57)


64,012,500


¥ 427Ending balanceExercisable


3,583,700


¥366 ($3.05)


3,130,100


¥ 377




- 45 -



---

The unexercised share options as of March 31, 2015, are as follows (unaudited):



Range of
Exercise Price
(Yen)

Number
of Shares


Weighted Average
Exercise Price
(Yen) (U.S. Dollars)

Weighted Average
Remaining Contract Period
(Years)201300


1,081,100


¥271 ($2.26)

6.4301400


26,027,400


¥324 ($2.70)

7.8401500


12,797,900


¥486 ($4.04)

7.7501600


25,674,200


¥514 ($4.28)

8.6601700


6,100


¥680 ($5.66)

0.2Total


65,586,700


¥429 ($3.57)

8.1




| | (4) | Share Options Exercised during the Period
| | --- | -----------------------------------------

Weighted average stock
prices at exercise for share options exercised during the period are as follows:



For the Year Ended March 312015 (Unaudited)

2014Options
Series

Number
of Shares
Issued


Weighted Average
Stock Price
at Exercise
(Yen) (U.S. Dollars)

Options
Series

Number
of Shares
Issued


Weighted Average
Stock Price
at Exercise
(Yen)2006


200


¥436 ($3.63)

2006


12,500


¥ 5192007


7,600


¥465 ($3.87)

2007


100,100


¥ 5282008


3,000


¥458 ($3.81)

2008


130,400


¥ 5162009


15,500


¥455 ($3.79)

2009


283,400


¥ 5152010


8,200


¥441 ($3.67)

2010


113,200


¥ 5062011


9,400


¥448 ($3.73)

2011


113,100


¥ 5332012


500


¥446 ($3.71)




|25. | FINANCIAL INSTRUMENTS
|--- | ---------------------



| | (1) | Capital Management
| | --- | ------------------

The Companys policy is to realize and
maintain optimum capital composition to continue mid- and long-term sustainable growth and maximize corporate value. Certain subsidiaries are subject to regulatory capital requirements under the Financial
Instruments and Exchange Act and related laws and regulations. Such subsidiaries are required to maintain capital adequacy ratios, net assets and other indicators at certain levels.



- 46 -



---

Significant capital requirements attributable to domestic subsidiaries in the Group are as
follows:



| | 1) | YJFX, Inc.
| | -- | ----------

YJFX, Inc. is subject to the Financial Instruments and Exchange Act and
related laws and regulations and required to maintain a ratio, which is calculated by dividing its unappropriated capital by the total amount of the following three risk equivalent amounts, of at least 120%. The three risk equivalent amounts are:



| | (a) | market risk (risk arising from fluctuations in stock price, interest rate and exchange rate that affect holding assets) equivalent amount,
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | counterparty risk (risk assumed to be attributable to counterparties of financial instrument transactions) equivalent amount, and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------

| | (c) | fundamental risk (risk attributable to processing daily operations such as errors in paperwork) equivalent amount.
| | --- | ------------------------------------------------------------------------------------------------------------------



| | 2) | YJ Card Corporation
| | -- | -------------------

YJ Card Corporation is subject to the Money Lending Business Act,
Installment Sales Act and related laws and regulations and required to maintain its equity (net assets) at a certain level. The minimum amount of net assets required to be maintained is the greater of the following two items:



| | (a) | ¥50 million
| | --- | -----------

| | (b) | 90% of share capital or capital contribution
| | --- | --------------------------------------------

No revision was made to applicable laws that
have a significant impact on the capital requirements for the years ended March 31, 2015 and 2014.



| | (2) | Financial Risk Management
| | --- | -------------------------

The Group faces a variety of financial
risks (currency risk, price risk, interest rate risk, credit risk, and liquidity risk) in its operations. The Company manages risks based on its established policies to prevent and reduce these financial risks. Derivative transactions entered into
by the Group are limited to the extent of actual demands. The Group does not enter into derivative contracts for speculative or trading purposes.



| | 1) | Market risk
| | -- | -----------



| | (a) | Currency Risk
| | --- | -------------

The Group conducts foreign currency exchange transactions and is subject to
currency risk from changes in currency rates mainly of U.S. dollars. To avoid this risk, the Company utilizes forward foreign exchange contracts. In addition, to avoid currency risk arising from foreign exchange dealings, the Company utilizes
covering transactions with counterparties to cover its positions arising from transactions with customers.

Foreign exchange sensitivity
analysis



- 47 -



---

The following table presents the effect of a 1% appreciation of the Japanese yen against the
U.S. dollar on profit before tax and other comprehensive income (before net of tax effect) for the financial instruments with the above foreign currency risk exposure, assuming that all other factors are constant. The analysis does not include the
effect of translating assets and liabilities of foreign operations into the presentation currency.



Millions of Yen

Thousands of U.S. DollarsYear EndedMarch 31,

Year EndedMarch 31,2015

2014

2015Unaudited



UnauditedDecrease in profit before tax

¥   4

¥ 11

$   33Decrease in other comprehensiveincome before tax effect

75

43

624




| | (b) | Price Risk
| | --- | ----------

As a part of its business strategy, the Company holds equity securities traded in
active markets and is exposed to market price fluctuation risk. To manage this risk, the Company continuously monitors the financial condition of the security issuers and stock market fluctuations.

Price sensitivity analysis

The table below presents the effect of a 10% decrease in market price in the securities traded in active markets on other comprehensive
income before tax effect in the consolidated statements of comprehensive income, assuming that all other factors are constant.



Millions of Yen

Thousands of U.S. DollarsYear EndedMarch 31,

Year EndedMarch 31,2015

2014

2015Unaudited



UnauditedDecrease in other comprehensiveincome before tax effect

¥  1,438

¥  1,837

$  11,966




| | (c) | Interest Rate Risk
| | --- | ------------------

Interest rate sensitivity analysis

The Groups use of funds for investing activities is exposed to interest rate risk.

The table below presents the effect of a 1% increase in interest rates in the Groups financial instruments that are exposed to changes
in interest rates on other comprehensive income before tax effect in the consolidated statements of comprehensive income, assuming that all other factors, such as foreign currency fluctuation, are constant.



Millions of Yen

Thousands of U.S. DollarsYear EndedMarch 31,

Year EndedMarch 31,2015

2014

2015Unaudited



UnauditedDecrease in other comprehensiveincome before tax effect

¥  724

¥  1,109

$  6,025




- 48 -



---

| | 2) | Credit risk
| | -- | -----------

In the course of the Companys business, trade and other
receivables, and other financial assets (including equity securities and derivatives) are exposed to credit risk of its counterparties. In order to prevent and reduce the risk, the Company does not expose itself to significant concentrations of
credit risk. To manage the credit risk, the Company secures collateral and obtains guarantees that correspond to each customers credit status after performing credit research and setting a line of credit in accordance with internal customer
credit management rules. In addition, the Company performs due date controls and balance controls for each customer and periodically monitors their credit status.

The Group conducts foreign exchange margin transactions with customers and covering transactions with counterparties in order to avoid risks
arising from the transactions.

The Group is exposed to the credit risks of customers that include possible uncollectible receivables
arising from losses that exceed the customers funds, and the credit risks of financial institutions as counterparties of the transactions. Because automatic stop-loss rules and systems are implemented,
the exposure to the credit risks of customers is limited. As to the credit risks of counterparties, the Group believes that the possibility of default is remote because the Group conducts covering transactions only with creditworthy financial
institutions. Also, in conducting covering transactions, positions, gains and losses of the transactions are checked in accordance with internal management policy.

The Group recognizes impairment losses after evaluating collectability of trade and other receivables based on the debtors credit
status. The Group does not have any experience of material impairment losses. For trade and other receivables that are neither past due nor impaired, there is no indication that any debtor would be unable to meet their obligations at the time of
this report.

The carrying amount of financial instruments, net of impairment, which is presented in the statements of financial
position, as well as the amount of lending commitments, represents the Companys maximum exposure to credit risk on financial assets. The value of collateral held and other credit enhancements are not included. The details of lending
commitments are described in Note 33. Contingencies.

Trade and other receivables include security deposits received as
credit enhancements. Such deposits as of March 31, 2015 and 2014 and April 1, 2013 were ¥919 million ($7,647 thousand), ¥708 million and ¥700 million, respectively.

Foreign exchange dealings deposits from customers include security deposits received from customers. Such deposits as of March 31, 2015
and 2014 and April 1, 2013 were ¥97,178 million ($808,671 thousand), ¥81,595 million and ¥72,485 million, respectively.



| | 3) | Liquidity risk
| | -- | --------------

The Group is exposed to liquidity risk in funding, use and repayment
of cash in relation to operating transactions and investing activities. In order to prevent and reduce the liquidity risk, the Groups use of its funds is limited to high-liquidity and low-risk investments which mature within a year. The Group finances its funds with bank loans for which repayment periods are decided after considering the market environment and
long-term and short-term balances.



- 49 -



---

| | (3) | Categories of Financial Instruments
| | --- | -----------------------------------

Components of financial
instruments (excluding cash and cash equivalents) by category are as follows:

As of March 31, 2015 (Unaudited)

Millions of YenFinancial Assets

FinancialAssets
at FVTPL

Available-for-Sale FinancialAssets

Loans andReceivables

TotalCurrent assets:Trade and other receivables












¥
217,736



¥
217,736Other financial assets


¥
15,887









15




15,902Non-current assetsOther financial assets



1,144



¥
43,511




13,449




58,104Total


¥
17,031



¥
43,511



¥
231,200



¥
291,742




Millions of YenFinancial Liabilities

FinancialLiabilitiesat FVTPL

FinancialLiabilities atAmortized Cost

TotalCurrent liabilities:Trade and other payables







¥
158,979



¥
158,979Other financial liabilities


¥
9,070




601




9,671Non-current liabilitiesOther financial liabilities








920




920Total


¥
9,070



¥
160,500



¥
169,570




Thousands of U.S. DollarsFinancial Assets

FinancialAssets
at FVTPL

Available-for-Sale FinancialAssets

Loans andReceivables

TotalCurrent assets:Trade and other receivables












$
1,811,900



$
1,811,900Other financial assets


$
132,204









125




132,329Non-current assetsOther financial assets



9,520



$
362,079




111,916




483,515Total


$
141,724



$
362,079



$
1,923,941



$
2,427,744




Thousands of U.S. DollarsFinancial Liabilities

Financial
Liabilities
at FVTPL

Financial
Liabilities atAmortized Cost

TotalCurrent liabilities:Trade and other payables







$
1,322,951



$
1,322,951Other financial liabilities


$
75,476




5,002




80,478Non-current liabilitiesOther financial liabilities








7,656




7,656Total


$
75,476



$
1,335,609



$
1,411,085




- 50 -



---

As of March 31, 2014



Millions of YenFinancial Assets

FinancialAssetsat FVTPL

Available-for-Sale FinancialAssets

Loans andReceivables

TotalCurrent assets:Trade and other receivables












¥
160,396



¥
160,396Other financial assets


¥
12,313














12,313Non-current assetsOther financial assets



719



¥
41,440




7,373




49,532Total


¥
13,032



¥
41,440



¥
167,769



¥
222,241




Millions of YenFinancial Liabilities

FinancialLiabilitiesat FVTPL

FinancialLiabilities atAmortized Cost

TotalCurrent liabilities:Trade and other payables







¥
142,562



¥
142,562Other financial liabilities


¥
5,108









5,108Non-current liabilitiesOther financial liabilities








128




128Total


¥
5,108



¥
142,690



¥
147,798


As of April 1, 2013



Millions of YenFinancial Assets

FinancialAssetsat FVTPL

Available-for-Sale FinancialAssets

Loans andReceivables

TotalCurrent assets:Trade and other receivables












¥
143,874



¥
143,874Other financial assets


¥
9,356









4,200




13,556Non-current assetsOther financial assets







¥
28,596




7,104




35,700Total


¥
9,356



¥
28,596



¥
155,178



¥
193,130




Millions of YenFinancial Liabilities

FinancialLiabilitiesat FVTPL

FinancialLiabilities atAmortized Cost

TotalCurrent liabilities:Trade and other payables







¥
121,608



¥
121,608Other financial liabilities


¥
5,648









5,648Non-current liabilitiesOther financial liabilities








147




147Total


¥
5,648



¥
121,755



¥
127,403




- 51 -



---

|26. | FAIR VALUE OF FINANCIAL INSTRUMENTS
|--- | -----------------------------------



| | (1) | Categorization by Level within the Fair Value Hierarchy
| | --- | -------------------------------------------------------

Financial
instruments that are measured at fair value on a recurring basis after initial recognition are classified into three levels of the fair value hierarchy based on the observability and significance of inputs used for the measurement.

Levels 1 to 3 of the fair value hierarchy are defined as follows:



| |  |  |  |          |  |                                                                                                                           
| |  |  |  | -------- |  | --------------------------------------------------------------------------------------------------------------------------
| |  |  |  | Level 1: |  | Fair value is measured using quoted prices (unadjusted) in active markets for identical assets or liabilities.            
| |  |  | 
| |  |  |  | Level 2: |  | Fair value is measured using inputs, other than those used in level 1, that are observable, either directly or indirectly.
| |  |  | 
| |  |  |  | Level 3: |  | Fair value is measured using unobservable inputs.                                                                         

If the fair value measurement uses different levels of inputs, the fair value is categorized based on the
lowest level of input that is significant to the entire fair value measurement.

Transfers between levels of the fair value hierarchy are
recognized as if they have occurred at the beginning of each quarter. There were no transfers between levels 1 and 2 during the fiscal years ended March 31, 2015 and 2014.

Financial instruments measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:

As of March 31, 2015 (Unaudited)



Millions of YenLevel 1


Level 2


Level 3


TotalFinancial assets at FVTPL:Derivatives used in foreignexchange dealings





¥
15,887






¥
15,887Others









¥
1,144



1,144Available-for-sale financial assets:Equity securities

¥
14,569







15,985



30,554Debt securities






7,554



1,806



9,360Others






62



3,535



3,597Total

¥
14,569


¥
23,503


¥
22,470


¥
60,542Financial liabilities at FVTPL:Derivatives used in foreignexchange dealings





¥
9,070






¥
9,070Total





¥
9,070






¥
9,070




- 52 -



---

Thousands of U.S. DollarsLevel 1


Level 2


Level 3


TotalFinancial assets at FVTPL:Derivatives used in foreignexchange dealings





$
132,204






$
132,204Others









$
9,520



9,520Available-for-sale financial assets:Equity securities

$
121,236







133,020



254,256Debt securities






62,861



15,029



77,890Others






516



29,417



29,933Total

$
121,236


$
195,581


$
186,986


$
503,803Financial liabilities at FVTPL:Derivatives used in foreignexchange dealings





$
75,476






$
75,476Total





$
75,476






$
75,476


As of March 31, 2014



Millions of YenLevel 1


Level 2


Level 3


TotalFinancial assets at FVTPL:Derivatives used in foreignexchange dealings





¥
12,313






¥
12,313Others









¥
719



719Available-for-sale financial assets:Equity securities

¥
11,344







26,715



38,059Debt securities










1,476



1,476Others






61



1,844



1,905Total

¥
11,344


¥
12,374


¥
30,754


¥
54,472Financial liabilities at FVTPL:Derivatives used in foreignexchange dealings





¥
5,108






¥
5,108Total





¥
5,108






¥
5,108




- 53 -



---

As of April 1, 2013



|                                             |  |                 |   |         |  |         |  |       |       |  |  |  |   |        |  |  |  |   |        | 
|-------------------------------------------- |  | --------------- | - | ------- |  | ------- |  | ----- | ----- |  |  |  | - | ------ |  |  |  | - | ------ | 
|                                             |  | Millions of Yen
|                                             |  | Level 1         |   | Level 2 |  | Level 3 |  | Total
|                                             |  |                 |   |        
|Financial assets at FVTPL:                   |  |                 |   |         |  |         |  |       |       |  |  |  |   |        |  |  |  |   |        | 
|Derivatives used in foreignexchange dealings |  |                 |   |         |  |         |  | ¥     | 9,356 |  |  |  |   |        |  |  |  | ¥ | 9,356  | 
|Available-for-sale financial assets:         |  |                 |   |         |  |         |  |       |       |  |  |  |   |        |  |  |  |   |        | 
|Equity securities                            |  |                 | ¥ | 9,553   |  |         |  |       |       |  |  |  | ¥ | 18,294 |  |  |  |   | 27,847 | 
|Others                                       |  |                 |   |         |  |         |  |       | 13    |  |  |  |   | 736    |  |  |  |   | 749    | 
|                                             |  |                 |   |         |  |         |  |       |       |  |  |  |   |        |  |  |  |   |        | 
|                                             |  |                 |   |        
|Total                                        |  |                 | ¥ | 9,553   |  |         |  | ¥     | 9,369 |  |  |  | ¥ | 19,030 |  |  |  | ¥ | 37,952 | 
|                                             |  |                 |   |         |  |         |  |       |       |  |  |  |   |        |  |  |  |   |        | 
|                                             |  |                 |   |        
|Financial liabilities at FVTPL:              |  |                 |   |         |  |         |  |       |       |  |  |  |   |        |  |  |  |   |        | 
|Derivatives used in foreignexchange dealings |  |                 |   |         |  |         |  | ¥     | 5,648 |  |  |  |   |        |  |  |  | ¥ | 5,648  | 
|                                             |  |                 |   |         |  |         |  |       |       |  |  |  |   |        |  |  |  |   |        | 
|                                             |  |                 |   |        
|Total                                        |  |                 |   |         |  |         |  | ¥     | 5,648 |  |  |  |   |        |  |  |  | ¥ | 5,648  | 
|                                             |  |                 |   |         |  |         |  |       |       |  |  |  |   |        |  |  |  |   |        | 



| | (2) | Valuation Techniques for Financial Instruments
| | --- | ----------------------------------------------

Financial assets
and liabilities at FVTPL mainly consist of foreign exchange dealings and are categorized as level 2 as they are evaluated based on the quoted market price of similar transactions.

As to available-for-sale financial assets, fair values of
listed equity securities are evaluated at quoted prices at the end of the year, whereas fair values of non-listed equity securities are measured using quoted prices of comparable companies and valuation
techniques such as the discounted cash flow model. They are classified as level 2 if all significant inputs such as quoted prices and perpetual growth rates that are used for the measurement of future cash flows are observable, whereas if
inputs include significant unobservable inputs, they are classified as level 3.

Fair values of debt securities are measured mainly
by the discounted cash flow model using discount rates as inputs after taking into account risk-free interest rates and credit spreads. They are categorized as level 2 or level 3 depending on their
observability and significance.

Because the fair values of financial assets on the consolidated statements of financial position are the
same or reasonably approximate as their carrying values, the carrying values are deemed to be their fair values.



| | (3) | Fair Value Measurements of Financial Instruments That Are Categorized as Level 3
| | --- | --------------------------------------------------------------------------------



| | 1) | Valuation techniques and inputs
| | -- | -------------------------------



Valuation techniques and significant unobservable inputs used in the level 3 fair value measurements are as follows:



Ranges of Unobservable InputsValuation Techniques

Unobservable Inputs



As of
March 31, 2015

As ofMarch 31,
2014


As of
April 1, 2013UnauditedAvailable-for-sale financial assets(equity
securities)

Discounted cash flow

Capital cost



12.6%


7.9%



9.1%Perpetual growth rate



2.0%


1.2%



0.0%Quoted prices of comparable companies

PER multiple






19.9        21.0



14.3     18.3Financial assets at FVTPL (other)

Monte Carlo simulation

Expected normal distribution of operating profit



¥1,500 million($12,482 thousand)


PER multiple and perpetual growth rate have a positive correlation with the fair value of available-for-sale equity securities, whereas capital cost has a negative correlation. Probability of operating result achievement has a positive correlation with the fair
value of other of financial assets at FVTPL.



- 54 -



---

| | 2) | Reconciliation of financial instruments categorized as level 3
| | -- | --------------------------------------------------------------

Reconciliation of
financial instruments categorized as level 3 is as follows:

For the Year Ended March 31, 2015



Millions of YenFinancialAssets atFVTPL

Available-for-SaleFinancial AssetsEquitySecurities

DebtSecurities

OtherOtherAs of April 1, 2014



¥     719




¥  26,715




¥  1,476




¥  1,844Gains or losses:Profit for the year (Notes 1 and 3)



119




5,409




75




202Other comprehensive income(Notes 2 and 3)








(3,033
)



255




342Purchases



306




8,919









1,260Transfers from level 3 to level 1(Note 4)








(1,065
)Others (Note 3)








(20,960
)








(113
)As of March 31, 2015 (unaudited)



¥  1,144




¥  15,985




¥  1,806




¥  3,535Thousands of U.S. DollarsFinancialAssets atFVTPL

Available-for-SaleFinancial AssetsEquitySecurities

DebtSecurities

OtherOtherAs of April 1, 2014



$  5,983




$  222,310




$  12,283




$  15,345Gains or losses:Profit for the year (Notes 1 and 3)



990




45,011




624




1,681Other comprehensive income(Notes 2 and 3)








(25,239
)



2,122




2,846Purchases



2,547




74,220









10,485Transfers from level 3 to level 1(Note 4)








(8,862
)Others (Note 3)








(174,420
)








(940
)As of March 31, 2015 (unaudited)



$  9,520




$  133,020




$  15,029




$  29,417


Notes:



| | 1. | Gains or losses included in profit for the year are included in Other non-operating income and Other non-operating
expenses in the consolidated statement of profit or loss.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Gains or losses included in other comprehensive income are included in Available-for-sale financial assets and Exchange
differences on translating foreign operations in the consolidated statement of comprehensive income.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



- 55 -



---

| | 3. | Investments in The Japan Net Bank, Limited (JNB), which had been categorized as available-for-sale financial assets, have
been reclassified to investments in an associate due to conversion of its non-voting right shares to common stock. In relation to this reclassification, the Companys interests were remeasured at fair
value as if they were disposed, and the unrealized revaluation gain of ¥6,249 million ($52,001 thousand) included in Accumulated other comprehensive income in the consolidated statement of financial position has been
reclassified to Other non-operating income in the consolidated statement of profit or loss. (Please refer to Note 28. Other non-operating
income.)
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | Due to newly listed stocks of an investee
| | -- | -----------------------------------------

For the Year Ended March 31, 2014



Millions of YenFinancialAssets atFVTPL

Available-for-SaleFinancial AssetsEquitySecurities

DebtSecurities

OtherOtherAs of April 1, 2013








¥  18,294









¥     736Gains or losses:Profit for the year (Note 1)



¥    18




(787
)



¥       24




(110
)Other comprehensive income (Note 2)








5,661




37




174Purchases



701




4,540




1,415




1,044Transfers from level 3 to level 1(Note 3)








(1,042
)Others








49As of March 31, 2014



¥  719




¥  26,715




¥  1,476




¥  1,844


Notes:



| | 1. | Gains or losses included in profit for the year are included in Other non-operating income and Other non-operating
expenses in the consolidated statement of profit or loss.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Gains or losses included in other comprehensive income are included in Available-for-sale financial assets and Exchange
differences on translating foreign operations in the consolidated statement of comprehensive income.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | Due to newly listed stocks of an investee
| | -- | -----------------------------------------



| | 3) | Sensitivity Analysis
| | -- | --------------------

For financial instruments classified as level 3, no
significant changes in fair value are expected to occur as a result of changing unobservable inputs to other alternative assumptions that are considered reasonable.



| | 4) | Valuation processes
| | -- | -------------------

The fair value of level 3 financial instruments is measured
by our personnel in the investment management department, taking into account external specialists advice and using the most appropriate valuation techniques and inputs that reflect the nature, characteristics, and risks of the financial
instruments subject to fair valuation.



- 56 -



---

The result of the fair value measurement conducted at the end of each year, including the
valuation by the external specialists, is reviewed by managers of the investment management department and approved by the Chief Financial Officer (Senior executive director).



|27. | COST OF SALES AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
|--- | --------------------------------------------------------------

The components of cost
of sales and selling, general and administrative expenses are as follows:



|                              |  |                     |   |                            |  |           |  |   |         |  |  |  |   |           | 
|----------------------------- |  | ------------------- | - | -------------------------- |  | --------- |  | - | ------- |  |  |  | - | --------- | 
|                              |  | Millions of Yen     |   | Thousands of  U.S. Dollars
|                              |  | Year EndedMarch 31, |   | Year EndedMarch 31,       
|                              |  | 2015                |   | 2014                       |  | 2015     
|                              |  | Unaudited           |   |                            |  | Unaudited
|                              |  |                     |  
|Business commissions          |  |                     | ¥ | 52,747                     |  |           |  | ¥ | 49,788  |  |  |  | $ | 438,937   | 
|Personnel expenses            |  |                     |   | 48,875                     |  |           |  |   | 45,945  |  |  |  |   | 406,715   | 
|Sales commissions             |  |                     |   | 35,158                     |  |           |  |   | 28,638  |  |  |  |   | 292,569   | 
|Information services          |  |                     |   | 17,697                     |  |           |  |   | 13,832  |  |  |  |   | 147,266   | 
|Depreciation and amortization |  |                     |   | 16,936                     |  |           |  |   | 13,452  |  |  |  |   | 140,934   | 
|Sales promotion costs         |  |                     |   | 15,267                     |  |           |  |   | 14,116  |  |  |  |   | 127,045   | 
|Royalty charge                |  |                     |   | 11,648                     |  |           |  |   | 11,439  |  |  |  |   | 96,929    | 
|Others                        |  |                     |   | 32,948                     |  |           |  |   | 34,867  |  |  |  |   | 274,179   | 
|                              |  |                     |   |                            |  |           |  |   |         |  |  |  |   |           | 
|                              |  |                     |  
|Total                         |  |                     | ¥ | 231,276                    |  |           |  | ¥ | 212,077 |  |  |  | $ | 1,924,574 | 
|                              |  |                     |   |                            |  |           |  |   |         |  |  |  |   |           | 



|28. | OTHER NON-OPERATING INCOME
|--- | --------------------------

The components of
other non-operating income are as follows:



|                                                                                |  |                     |  |                            |  |           |  |  |           |  |  |  |  |           | 
|------------------------------------------------------------------------------- |  | ------------------- |  | -------------------------- |  | --------- |  |  | --------- |  |  |  |  | --------- | 
|                                                                                |  | Millions of Yen     |  | Thousands of  U.S. Dollars
|                                                                                |  | Year EndedMarch 31, |  | Year EndedMarch 31,       
|                                                                                |  | 2015                |  | 2014                       |  | 2015     
|                                                                                |  | Unaudited           |  |                            |  | Unaudited
|                                                                                |  |                     | 
|Gain on remeasurement of investments inan associate acquired in stages (Note 1) |  |                     |  | ¥    6,249                 |  |           |  |  |           |  |  |  |  | $  52,001 | 
|Negative goodwill arising fromreclassification of investments (Note 2)          |  |                     |  | 2,481                      |  |           |  |  |           |  |  |  |  | 20,646    | 
|Gain on sale of investment securities                                           |  |                     |  | 653                        |  |           |  |  | ¥  11,769 |  |  |  |  | 5,434     | 
|Others                                                                          |  |                     |  | 1,255                      |  |           |  |  | 1,425     |  |  |  |  | 10,444    | 
|                                                                                |  |                     | 
|Total                                                                           |  |                     |  | ¥  10,638                  |  |           |  |  | ¥  13,194 |  |  |  |  | $  88,525 | 

Notes:



| | 1. | In relation to the reclassification of investments in JNB to investments in an associate, the Companys interests were remeasured at fair value as if they were disposed, and the unrealized revaluation gain of
¥6,249 million ($52,001 thousand) included in Accumulated other comprehensive income in the consolidated statement of financial position has been reclassified to Gain on remeasurement of investments in an associate
acquired in stages in the consolidated statement of profit or loss. (Please refer to Note 26. Fair value of financial instruments (3), 2).)
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | As a result of the fair value remeasurement of investments in JNB, the Groups proportionate interests in net fair value of JNBs identifiable assets and liabilities exceed the Groups cost of the
investments. The Group recognized the excess as Negative goodwill arising from reclassification of investments in the consolidated statement of profit or loss.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



- 57 -



---

|29. | OTHER COMPREHENSIVE INCOME
|--- | --------------------------

The amount arising during the year, reclassification
adjustments and income tax effects on each item in other comprehensive income for the years ended March 31, 2015 and 2014, were as follows:



|                                                                        |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|----------------------------------------------------------------------- |  | ------------------- | - | -------------------------- | - | --------- |  | - | ------ | - |  |  | - | ------- | -
|                                                                        |  | Millions of Yen     |   | Thousands of  U.S. Dollars
|                                                                        |  | Year EndedMarch 31, |   | Year Ended  March 31,     
|                                                                        |  | 2015                |   | 2014                       |   | 2015     
|                                                                        |  | Unaudited           |   |                            |   | Unaudited
|                                                                        |  |                     |  
|Items that may be reclassified subsequently toprofit or loss:           |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|Available-for-sale financial assets:                                    |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|Amount arising during the year                                          |  |                     | ¥ | 5,641                      |   |           |  | ¥ | 12,595 |   |  |  | $ | 46,942  |  
|Reclassification adjustments                                            |  |                     |   | (6,322                     | ) |           |  |   | (4,678 | ) |  |  |   | (52,609 | )
|                                                                        |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|Before tax effect                                                       |  |                     |   | (681                       | ) |           |  |   | 7,917  |   |  |  |   | (5,667  | )
|Income tax effect                                                       |  |                     |   | 722                        |   |           |  |   | (2,819 | ) |  |  |   | 6,008   |  
|                                                                        |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|                                                                        |  |                     |  
|Available-for-sale financial assets,after tax effect                    |  |                     |   | 41                         |   |           |  |   | 5,098  |   |  |  |   | 341     |  
|                                                                        |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|                                                                        |  |                     |  
|Exchange differences on translating foreignoperations:                  |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|Amount arising during the year                                          |  |                     |   | 928                        |   |           |  |   | 175    |   |  |  |   | 7,722   |  
|Reclassification adjustments                                            |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|                                                                        |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|Before tax effect                                                       |  |                     |   | 928                        |   |           |  |   | 175    |   |  |  |   | 7,722   |  
|Income tax effect                                                       |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|                                                                        |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|                                                                        |  |                     |  
|Exchange differences on translatingforeign operations, after tax effect |  |                     |   | 928                        |   |           |  |   | 175    |   |  |  |   | 7,722   |  
|                                                                        |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|                                                                        |  |                     |  
|Share of other comprehensive income of associates:                      |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|Amount arising during the year                                          |  |                     |   | 976                        |   |           |  |   | 191    |   |  |  |   | 8,123   |  
|Income tax effect                                                       |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|                                                                        |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|                                                                        |  |                     |  
|Share of other comprehensive incomeof associates, after tax effect      |  |                     |   | 976                        |   |           |  |   | 191    |   |  |  |   | 8,123   |  
|                                                                        |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  
|                                                                        |  |                     |  
|Other comprehensive income, net of tax                                  |  |                     | ¥ | 1,945                      |   |           |  | ¥ | 5,464  |   |  |  | $ | 16,186  |  
|                                                                        |  |                     |   |                            |   |           |  |   |        |   |  |  |   |         |  



- 58 -



---

|30. | EARNINGS PER SHARE
|--- | ------------------

Basic and diluted earnings per share attributable to owners of the
Company are as follows:



Millions of Yen



Thousands of  U.S. DollarsYear Ended March 31,



Year EndedMarch 31,2015



2014



2015Unaudited







UnauditedBasic earnings per share (yen andU.S. dollars)

¥23.37



¥22.43




$0.19Profit for the year attributable toowners of the Company

¥133,052



¥128,605




$    1,107,198Profit for the year not attributable toowners of the CompanyProfit for the year used in thecalculation of basic earnings per share

¥133,052



¥128,605




$    1,107,198Weighted-average number of common stock (thousands of shares)

5,692,891



5,732,878Diluted earnings per share (yen andU.S. dollars)

¥23.37



¥22.43




$0.19Adjustments on profit for the yearIncrease in the number of common stock (thousands of shares)

812



1,369Potential common stock that are anti-dilutive and therefore excluded from the calculation of diluted earnings per
share

Options series:



Options series:20051st, 2nd,
3rd and 4th;
20061st, 2nd
and 3rd;
20071st, 3rd
and 4th;
20081st,
20122nd,
20131st and
2nd; 20141st



20033rd,
20041st, 2nd,
3rd and 4th;
20051st, 2nd,
3rd and 4th;
20073rd and
4th; 20081st,
20122nd,
20131st and
2nd(Please refer to Note 24. Share-based
payment)



(Please refer to Note 24. Share-based
payment)


On October 1, 2013, the Company made a share split by way of a free share distribution at a rate of
100 shares for each outstanding share. Basic and diluted earnings per share have been determined based on the assumption that the share split occurred on April 1, 2013.



- 59 -



---

|31. | SUPPLEMENTAL INFORMATION TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
|--- | ---------------------------------------------------------------------



| | (1) | Significant Non-cash Transactions
| | --- | ---------------------------------

Significant non-cash transactions (investing and financing transactions that do not require the use of cash or cash equivalents) are as follows:

For the Year Ended March 31, 2015 (Unaudited)

Investments in JNB, which had been categorized as
available-for-sale financial assets, has been reclassified to investments in an associate due to conversion of its non-voting
right shares to common stock. The carrying amount of the investments at the time of conversion was ¥23,167 million ($192,785 thousand), calculated by reflecting the Groups proportionate interests in the net fair value of
JNBs identifiable assets and liabilities.

For the Year Ended March 31, 2014

No significant non-cash transactions occurred during the year.



| | (2) | Acquisition of Shares of Subsidiaries
| | --- | -------------------------------------

Assets and liabilities
assumed of new subsidiaries at the time of acquiring control through purchase of shares and the relationship between consideration and payment for acquisition are as follows:



|                                                                                               |  |                 |   |                            |   |  |  |   |          |  
|---------------------------------------------------------------------------------------------- |  | --------------- | - | -------------------------- | - |  |  | - | -------- | -
|                                                                                               |  | Millions of Yen |   | Thousands of  U.S. Dollars
|                                                                                               |  | Unaudited       |   | Unaudited                 
|                                                                                               |  |                
|Assets acquired                                                                                |  |                 | ¥ | 67,129                     |   |  |  | $ | 558,617  |  
|Liabilities assumed                                                                            |  |                 |   | (38,225                    | ) |  |  |   | (318,091 | )
|                                                                                               |  |                 |   |                            |   |  |  |   |          |  
|                                                                                               |  |                
|Net assets of new subsidiaries (before deductingcash assumed at the time of acquisition)       |  |                 |   | 28,904                     |   |  |  |   | 240,526  |  
|Goodwill                                                                                       |  |                 |   | 11,559                     |   |  |  |   | 96,189   |  
|Non-controlling interests                                                                      |  |                 |   | (8,315                     | ) |  |  |   | (69,194  | )
|                                                                                               |  |                 |   |                            |   |  |  |   |          |  
|                                                                                               |  |                
|Fair value of consideration paid                                                               |  |                 |   | 32,148                     |   |  |  |   | 267,521  |  
|                                                                                               |  |                
|Cash assumed at the time of acquisition                                                        |  |                 |   | (10,386                    | ) |  |  |   | (86,428  | )
|                                                                                               |  |                 |   |                            |   |  |  |   |          |  
|                                                                                               |  |                
|Acquisition of shares of subsidiaries (after deductingcash assumed at the time of acquisition) |  |                 | ¥ | 21,762                     |   |  |  | $ | 181,093  |  
|                                                                                               |  |                 |   |                            |   |  |  |   |          |  



|32. | RELATED PARTY TRANSACTIONS
|--- | --------------------------

The Companys ultimate parent company is SoftBank
Group Corp. (a Japanese company).

Balances and transactions between the Company and its subsidiaries, which are related parties of the
Company, have been eliminated on consolidation and are not disclosed herein. Details of transactions between the Group and other related parties that are not members of the Group are disclosed below.



- 60 -



---

| | (1) | Related Party Transactions and Outstanding Balances
| | --- | ---------------------------------------------------

Year Ended March 31, 2015 (Unaudited)



Millions of YenNature of Relationship

Name of Company
or Individual

Nature of Transaction

Amount ofTransaction

OutstandingBalance atYear-EndOther related party

Yahoo! Inc.

Payment of royalty (Note 1)



¥  11,606




¥  3,187A company in which a majority of its voting rights is held by a close member of the Companys Chairman

MODIVA JAPAN Inc. (Note 2)

Commission for fostering and promoting start-up companies (Note 1)



36




3A company in which a majority of its voting rights is held by a close member of the Companys Chairman

Creative Link Corporation (Note 2)

Commission for providing news content (Note 1)



56




11Thousands of U.S. DollarsNature of Relationship

Name of Company
or Individual

Nature of Transaction

Amount ofTransaction

OutstandingBalance atYear-EndOther related party

Yahoo! Inc.

Payment of royalty (Note 1)



$  96,580




$  26,521A company in which a majority of its voting rights is held by a close member of the Companys Chairman

MODIVA JAPAN Inc. (Note 2)

Commission for fostering and promoting start-up companies (Note 1)



300




25A company in which a majority of its voting rights is held by a close member of the Companys Chairman

Creative Link Corporation (Note 2)

Commission for providing news content (Note 1)



466




92


Notes:



| | 1. | Terms and conditions of the transactions are negotiated and determined based on the nature of the services to be rendered.
| | -- | --------------------------------------------------------------------------------------------------------------------------



| | 2. | Mr. Taizo Son, a family member of the Companys Chairman, Mr. Masayoshi Son, holds a majority of the voting rights.
| | -- | -------------------------------------------------------------------------------------------------------------------



| | 3. | Amount of transactions figures do not include consumption taxes, whereas outstanding balance at year-end figures do.
| | -- | --------------------------------------------------------------------------------------------------------------------



| | 4. | Outstanding balances at year-end are not secured by any collateral and are subsequently settled by cash. No guarantee is given or received for such balances.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



Year Ended March 31, 2014



Millions of YenNature of Relationship

Name of the Company
or Individual

Nature of Transaction

Amount ofTransaction

OutstandingBalance atYear-EndOther related party

Yahoo! Inc.

Payment of royalty (Note 1)


¥
11,227



¥
2,950Representative Director and President of the Company

Manabu Miyasaka

Exercise of share options (Note 2)



11Grant of share options, for consideration (Note 3)



13




13Chief Operating Officer of the Company

Kentaro Kawabe

Grant of share options, for consideration (Note 3)



10




10A company in which a majority of its voting rights is held by a close member of the Companys Chairman

MODIVA JAPAN Inc. (Note 4)

Commission for fostering and promoting start-up companies (Note 1)



27A company in which a majority of its voting rights is held by a close member of the Companys Chairman

Creative Link Corporation (Note 4)

Commission for providing news content (Note 1)



54




9




- 61 -



---

Notes:



| | 1. | Terms and conditions of the transactions are negotiated and determined based on the nature of the services to be rendered.
| | -- | --------------------------------------------------------------------------------------------------------------------------



| | 2. | The amount is determined by multiplying the number of shares issued as a result of exercising share options by the amount paid.
| | -- | -------------------------------------------------------------------------------------------------------------------------------



| | 3. | This represents consideration received from directors for granting share options to them. The amount of consideration was determined by Plutus Consulting, a third-party appraiser,
by using a Monte Carlo simulation, a common price assessment model, based on the Companys stock price and other factors.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | Mr. Taizo Son, a family member of the Companys Chairman, Mr. Masayoshi Son, holds a majority of the voting rights.
| | -- | -------------------------------------------------------------------------------------------------------------------



| | 5. | Amount of transaction figures do not include consumption taxes, whereas outstanding balance at year-end figures do.
| | -- | -------------------------------------------------------------------------------------------------------------------



| | 6. | Outstanding balances at year-end are not secured by any collateral and are subsequently settled by cash. No guarantee is given or received for such balances.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Remuneration for Major Executives
| | --- | ---------------------------------

Remuneration for major
executives is as follows:



|                     |  |                     |     |  |                           |   |     |           |  |   |       | 
|-------------------- |  | ------------------- | --- |  | ------------------------- | - | --- | --------- |  | - | ----- | 
|                     |  | Millions of Yen     |     |  | Thousands of U.S. Dollars |  
|                     |  | Year EndedMarch 31, |     |  | Year EndedMarch 31,       |  
|                     |  | 2015                |     |  | 2014                      |   |     | 2015      | 
|                     |  | Unaudited           |     |  |                           |   |     | Unaudited | 
|                     |  |                     |     |  |                           |   |     |           |  |   |       | 
|Short-term benefits  |  | ¥                   | 283 |  |                           | ¥ | 311 |           |  | $ | 2,355 | 
|Retirement benefits  |  |                     | 1   |  |                           |   | 2   |           |  |   | 8     | 
|Share-based payments |  |                     | 2   |  |                           |   | 2   |           |  |   | 17    | 
|                     |  |                     |     |  |                           |   |     |           |  |   |       | 
|                     |  |                     |    
|Total                |  | ¥                   | 286 |  |                           | ¥ | 315 |           |  | $ | 2,380 | 
|                     |  |                     |     |  |                           |   |     |           |  |   |       | 



| | Note: | Remuneration for major executives represents remuneration for the Companys directors including external directors.
| | ----- | -------------------------------------------------------------------------------------------------------------------



|33. | CONTINGENCIES
|--- | -------------



| | (1) | Committed Line of Cash Advances
| | --- | -------------------------------

The Group provides cash advance
services to customers in its credit card business. The remaining balances at year-end are as follows:



|                                                |  |                     |         |   |                           |   |       |                    |  |   |           |  
|----------------------------------------------- |  | ------------------- | ------- | - | ------------------------- | - | ----- | ------------------ |  | - | --------- | -
|                                                |  | Millions of Yen     |         |   | Thousands of U.S. Dollars |  
|                                                |  | As of
March 31,2015 |         |   | As of
March 31,2014       |   |       | As ofMarch 31,2015 | 
|                                                |  |                     |         |   |                           |   |       |                    |  |   |           |  
|                                                |  | Unaudited           |         |   |                           |   |       | Unaudited          | 
|                                                |  |                     |         |   |                           |   |       |                    |  |   |           |  
|Total amount of committed linesof cash advances |  | ¥                   | 259,736 |   |                           | ¥ | 7,767 |                    |  | $ | 2,161,405 |  
|Outstanding balance                             |  |                     | (8,689  | ) |                           |   | (777  | )                  |  |   | (72,306   | )
|                                                |  |                     |         |   |                           |   |       |                    |  |   |           |  
|                                                |  |                     |        
|Remaining balance                               |  | ¥                   | 251,047 |   |                           | ¥ | 6,990 |                    |  | $ | 2,089,099 |  
|                                                |  |                     |         |   |                           |   |       |                    |  |   |           |  



- 62 -



---

| | (2) | Credit Guarantee
| | --- | ----------------

In its credit guarantee business, the Group
implemented debt guarantees against customers loans from partnered financial institutions.



Millions of Yen

Thousands ofU.S. DollarsAs of
March 31,

As of
March 31,

As ofMarch 31,2015

2014

2015Unaudited



UnauditedTotal amount of credit guarantees

¥  13,447



$  111,900Balance of credit guarantees

10,427



86,769




|34. | EVENTS AFTER THE REPORTING PERIOD (UNAUDITED)
|--- | ---------------------------------------------

ASKUL Corporation (ASKUL),
an associate of the Company whose principal activity is mail order service of stationeries, became a subsidiary of the Company on August 27, 2015 (the date of repurchase) by repurchasing its treasury shares according to the resolution approved
by ASKULs board of directors meeting held on May 19, 2015. The Companys holding ratio of voting rights of ASKUL will increase from 41.8% as of March 31, 2015 to 44.4% after the repurchase of the treasury shares. The Company
does not have a majority of the voting rights following this transaction; however, the Company determined that it would have substantive control over ASKUL and will account for ASKUL as a consolidated subsidiary after considering the dispersed
voting rights distribution among shareholders and the voting patterns at previous ASKUL shareholders meetings.

Detailed information of
the accounting treatment of this business combination, including fair values of goodwill, acquired assets and assumed liabilities at the date of repurchase, is not presented because determination of fair values of acquired assets and assumed
liabilities was not completed as of the approval date of the consolidated financial statements.



|35. | FIRST-TIME ADOPTION OF IFRSS
|--- | ----------------------------

The Group
prepared the first consolidated financial statements in accordance with IFRSs from the fiscal year ended March 31, 2014. The Groups latest financial statements prepared in accordance with accounting principles generally accepted in Japan
(JGAAP) are those for the year ended March 31, 2014. The date of transition to IFRSs is April 1, 2013.

The effects
of transition to IFRSs from JGAAP on the Groups financial position, operating results, and cash flows are disclosed in the following tables and notes of reconciliation.

Exemptions for Retrospective Application

IFRS 1 requires first-time adopters to apply IFRSs effective at the end of its first IFRS
reporting period retrospectively. IFRS 1, however, allows first-time adopters to voluntarily use exemptions for some requirements of IFRSs. The Group applied the following exemptions:



| | (1) | Share-based payments
| | --- | --------------------

The Group
has elected not to apply IFRS 2 Share-based Payment retrospectively to share options which were vested before the date of transition to IFRSs.



| | (2) | Business combinations
| | --- | ---------------------

The Group has elected not to apply IFRS 3
Business Combinations retrospectively to business combinations that occurred before the date of transition to IFRSs.



| | (3) | Exchange differences on translating foreign operations
| | --- | ------------------------------------------------------

The Group has
elected not to apply IAS 21 The Effects of Changes in Foreign Exchange Rates retrospectively to cumulative translation differences of investments in foreign consolidated subsidiaries and associates prior to the date of transition to
IFRSs. The cumulative translation differences are deemed to be zero at the date of transition to IFRSs, and are excluded from gain or loss on subsequent disposal of any foreign operation.



- 63 -



---

Reconciliation of Equity as of March 31, 2014



|                                                         |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |  |  |    |  |                                                   |  |  | 
|-------------------------------------------------------- |  | --------------- | - | ---------------- | - | ------------------------------------------------- |  | ----- | ------- | ----- |  | ------------------------ | - | ------ | - |  |  | - | ------- |  |  | -- |  | ------------------------------------------------- |  |  | 
|                                                         |  | Millions of Yen |   |                  |   |                                                  
|Presentation under JGAAP                                 |  | JGAAP           |   | Reclassification |   | Differences in  Recognition and      
Measurement |  | IFRSs |         | Notes |  | Presentation under IFRSs
|                                                         |  |                 |   |                  |   |                                                  
|Assets:                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |  |  |    |  | ASSETS:                                          
|Current assets:                                          |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |  |  |    |  | Current assets:                                  
|Cash and deposits                                        |  |                 | ¥ | 482,629          |   |                                                   |  |       |         |       |  |                          | ¥ | (292   | ) |  |  | ¥ | 482,337 |  |  |    |  | Cash and cash equivalents                        
|Accounts receivabletrade                                |  |                 |   | 61,154           |   |                                                   |  | ¥     | 98,951  |       |  |                          |   | 291    |   |  |  |   | 160,396 |  |  | 2  |  | Trade and other receivables                      
|Foreign exchange dealings cashdeposits with trust banks |  |                 |   | 75,171           |   |                                                   |  |       | (75,171 | )     |  |                          |   |        |   |  |  |   |         |  |  |    |  |                                                  
|                                                         |  |                 |   |                  |   |                                                   |  |       | 12,313  |       |  |                          |   |        |   |  |  |   | 12,313  |  |  | 3  |  | Other financial assets                           
|Other current assets                                     |  |                 |   | 47,655           |   |                                                   |  |       | (43,854 | )     |  |                          |   | (141   | ) |  |  |   | 3,660   |  |  | 4  |  | Other current assets                             
|Allowance for doubtful accounts                          |  |                 |   | (1,351           | ) |                                                   |  |       | 1,351   |       |  |                          |   |        |   |  |  |   |         |  |  |    |  |                                                  
|                                                         |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |  |  |    |  |                                                   | 
|                                                         |  |                 |   |                  |   |                                                  
|Total current assets                                     |  |                 |   | 665,258          |   |                                                   |  |       | (6,410  | )     |  |                          |   | (142   | ) |  |  |   | 658,706 |  |  |    |  | Total current assets                             
|                                                         |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |  |  |    |  |                                                   | 
|                                                         |  |                 |   |                  |   |                                                  
|Fixed assets:                                            |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |  |  |    |  | Non-current assets:                              
|Property and equipment                                   |  |                 |   | 53,698           |   |                                                   |  |       |         |       |  |                          |   | 6,448  |   |  |  |   | 60,146  |  |  | 5  |  | Property and equipment                           
|Intangible assets:                                       |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |  |  |    |  |                                                  
|Goodwill                                                 |  |                 |   | 10,218           |   |                                                   |  |       |         |       |  |                          |   | 5,591  |   |  |  |   | 15,809  |  |  | 6  |  | Goodwill                                         
|Other assets                                             |  |                 |   | 17,845           |   |                                                   |  |       |         |       |  |                          |   | 15     |   |  |  |   | 17,860  |  |  | 7  |  | Intangible assets                                
|Investments and other assetsinvestment securities       |  |                 |   | 82,478           |   |                                                   |  |       | (82,478 | )     |  |                          |   |        |   |  |  |   |         |  |  |    |  |                                                  
|                                                         |  |                 |   |                  |   |                                                   |  |       | 35,054  |       |  |                          |   | (690   | ) |  |  |   | 34,364  |  |  | 8  |  | Investments accounted for using the equity method
|                                                         |  |                 |   |                  |   |                                                   |  |       | 56,414  |       |  |                          |   | (6,882 | ) |  |  |   | 49,532  |  |  | 9  |  | Other financial assets                           
|                                                         |  |                 |   |                  |   |                                                   |  |       | 10,698  |       |  |                          |   | 1,771  |   |  |  |   | 12,469  |  |  | 10 |  | Deferred tax assets                              
|Other assets                                             |  |                 |   | 13,271           |   |                                                   |  |       | (12,163 | )     |  |                          |   | (6     | ) |  |  |   | 1,102   |  |  | 11 |  | Other non-current assets                         
|Allowance for doubtful accounts                          |  |                 |   | (19              | ) |                                                   |  |       | 19      |       |  |                          |   |        |   |  |  |   |         |  |  |    |  |                                                  
|                                                         |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |  |  |    |  |                                                   | 
|                                                         |  |                 |   |                  |   |                                                  
|Total fixed assets                                       |  |                 |   | 177,491          |   |                                                   |  |       | 7,544   |       |  |                          |   | 6,247  |   |  |  |   | 191,282 |  |  |    |  | Total non-current assets                         
|                                                         |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |  |  |    |  |                                                   | 
|                                                         |  |                 |   |                  |   |                                                  
|Total assets                                             |  |                 | ¥ | 842,749          |   |                                                   |  | ¥     | 1,134   |       |  |                          | ¥ | 6,105  |   |  |  | ¥ | 849,988 |  |  |    |  | TOTAL ASSETS                                     
|                                                         |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |  |  |    |  |                                                   | 



- 64 -



---

|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   |  |  | 
|------------------------------------------------- |  | --------------- | - | ---------------- | - | ------------------------------------------------- |  | ----- | ------- | ----- |  | ------------------------ | - | ------ | - |  |  | - | ------- | - |  | -- |  | ------------------------------------------------- |  |  | 
|                                                  |  | Millions of Yen |   |                  |   |                                                  
|Presentation under JGAAP                          |  | JGAAP           |   | Reclassification |   | Differences in  Recognition and      
Measurement |  | IFRSs |         | Notes |  | Presentation under IFRSs
|                                                  |  |                 |   |                  |   |                                                  
|Liabilities:                                      |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  | LIABILITIES AND EQUITY:                          
|Current liabilities:                              |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  | Current liabilities:                             
|Accounts payabletrade                            |  |                 | ¥ | 12,363           |   |                                                   |  | ¥     | 130,218 |       |  |                          | ¥ | (19    | ) |  |  | ¥ | 142,562 |   |  | 12 |  | Trade and other payables                         
|                                                  |  |                 |   |                  |   |                                                   |  |       | 5,108   |       |  |                          |   |        |   |  |  |   | 5,108   |   |  | 13 |  | Other financial liabilities                      
|Income taxes payable                              |  |                 |   | 45,785           |   |                                                   |  |       | (637    | )     |  |                          |   | 508    |   |  |  |   | 45,656  |   |  | 14 |  | Income taxes payable                             
|                                                  |  |                 |   |                  |   |                                                   |  |       | 2,951   |       |  |                          |   |        |   |  |  |   | 2,951   |   |  | 15 |  | Provisions                                       
|Foreign exchange dealings deposits from customers |  |                 |   | 81,595           |   |                                                   |  |       | (81,595 | )     |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                  
|Other current liabilities                         |  |                 |   | 73,378           |   |                                                   |  |       | (54,912 | )     |  |                          |   | 3,592  |   |  |  |   | 22,058  |   |  | 16 |  | Other current liabilities                        
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|                                                  |  |                 |   |                  |   |                                                  
|Total current liabilities                         |  |                 |   | 213,121          |   |                                                   |  |       | 1,133   |       |  |                          |   | 4,081  |   |  |  |   | 218,335 |   |  |    |  | Total current liabilities                        
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|                                                  |  |                 |   |                  |   |                                                  
|Long-term liabilities:                            |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  | Non-current liabilities:                         
|                                                  |  |                 |   |                  |   |                                                   |  |       | 135     |       |  |                          |   | (7     | ) |  |  |   | 128     |   |  | 17 |  | Other financial liabilities                      
|                                                  |  |                 |   |                  |   |                                                   |  |       | 2,655   |       |  |                          |   |        |   |  |  |   | 2,655   |   |  | 18 |  | Provisions                                       
|                                                  |  |                 |   |                  |   |                                                   |  |       | 38      |       |  |                          |   |        |   |  |  |   | 38      |   |  | 19 |  | Deferred tax liabilities                         
|Other liabilities                                 |  |                 |   | 3,067            |   |                                                   |  |       | (2,827  | )     |  |                          |   | 873    |   |  |  |   | 1,113   |   |  | 20 |  | Other non-current liabilities                    
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|                                                  |  |                 |   |                  |   |                                                  
|Total long-term liabilities                       |  |                 |   | 3,067            |   |                                                   |  |       | 1       |       |  |                          |   | 866    |   |  |  |   | 3,934   |   |  |    |  | Total non-current liabilities                    
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|                                                  |  |                 |   |                  |   |                                                  
|Total liabilities                                 |  |                 |   | 216,188          |   |                                                   |  |       | 1,134   |       |  |                          |   | 4,947  |   |  |  |   | 222,269 |   |  |    |  | Total liabilities                                
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|                                                  |  |                 |   |                  |   |                                                  
|Equity:                                           |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  | Equity:                                          
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  | Equity attributable to owners of the parent:     
|Common stock                                      |  |                 |   | 8,271            |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   | 8,271   |   |  |    |  | Common stock                                     
|Capital surplus                                   |  |                 |   | 3,351            |   |                                                   |  |       | 701     |       |  |                          |   | (159   | ) |  |  |   | 3,893   |   |  | 21 |  | Capital surplus                                  
|Retained earnings                                 |  |                 |   | 600,457          |   |                                                   |  |       |         |       |  |                          |   | (2,445 | ) |  |  |   | 598,012 |   |  | 22 |  | Retained earnings                                
|Treasury stock                                    |  |                 |   | (526             | ) |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   | (526    | ) |  |    |  | Treasury stock                                   
|Accumulated other comprehensive income            |  |                 |   | 6,408            |   |                                                   |  |       |         |       |  |                          |   | 3,625  |   |  |  |   | 10,033  |   |  | 23 |  | Accumulated other comprehensive income           
|Stock acquisition rights                          |  |                 |   | 701              |   |                                                   |  |       | (701    | )     |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                  
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|                                                  |  |                 |   | 618,662          |   |                                                   |  |       |         |       |  |                          |   | 1,021  |   |  |  |   | 619,683 |   |  |    |  | Total equity attributable to owners of the parent
|Minority interests                                |  |                 |   | 7,899            |   |                                                   |  |       |         |       |  |                          |   | 137    |   |  |  |   | 8,036   |   |  |    |  | Non-controlling interests                        
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|                                                  |  |                 |   |                  |   |                                                  
|Total equity                                      |  |                 |   | 626,561          |   |                                                   |  |       |         |       |  |                          |   | 1,158  |   |  |  |   | 627,719 |   |  |    |  | Total equity                                     
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|                                                  |  |                 |   |                  |   |                                                  
|Total liabilities and equity                      |  |                 | ¥ | 842,749          |   |                                                   |  | ¥     | 1,134   |       |  |                          | ¥ | 6,105  |   |  |  | ¥ | 849,988 |   |  |    |  | TOTAL LIABILITIES AND EQUITY                     
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 



- 65 -



---

Reconciliation of Equity as of April 1, 2013, the Date of Transition



|                                                         |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |         |   |  |  |   |         |  |  |    |  |                                                   |  |  | 
|-------------------------------------------------------- |  | --------------- | - | ---------------- | - | ------------------------------------------------- |  | ----- | ------- | ----- |  | ------------------------ | - | ------- | - |  |  | - | ------- |  |  | -- |  | ------------------------------------------------- |  |  | 
|                                                         |  | Millions of Yen |   |                  |   |                                                  
|Presentation under JGAAP                                 |  | JGAAP           |   | Reclassification |   | Differences in  Recognition and      
Measurement |  | IFRSs |         | Notes |  | Presentation under IFRSs
|                                                         |  |                 |   |                  |   |                                                  
|Assets:                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |         |   |  |  |   |         |  |  |    |  | ASSETS:                                          
|Current assets:                                          |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |         |   |  |  |   |         |  |  |    |  | Current assets:                                  
|Cash and deposits                                        |  |                 | ¥ | 414,087          |   |                                                   |  | ¥     | (4,200  | )     |  |                          | ¥ | (299    | ) |  |  | ¥ | 409,588 |  |  | 1  |  | Cash and cash equivalents                        
|Accounts receivabletrade                                |  |                 |   | 55,940           |   |                                                   |  |       | 87,643  |       |  |                          |   | 291     |   |  |  |   | 143,874 |  |  | 2  |  | Trade and other receivables                      
|Foreign exchange dealings cashdeposits with trust banks |  |                 |   | 68,452           |   |                                                   |  |       | (68,452 | )     |  |                          |   |         |   |  |  |   |         |  |  |    |  |                                                  
|                                                         |  |                 |   |                  |   |                                                   |  |       | 13,556  |       |  |                          |   |         |   |  |  |   | 13,556  |  |  | 3  |  | Other financial assets                           
|Other current assets                                     |  |                 |   | 39,186           |   |                                                   |  |       | (36,278 | )     |  |                          |   | (8      | ) |  |  |   | 2,900   |  |  | 4  |  | Other current assets                             
|Allowance for doubtful accounts                          |  |                 |   | (1,563           | ) |                                                   |  |       | 1,563   |       |  |                          |   |         |   |  |  |   |         |  |  |    |  |                                                  
|                                                         |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |         |   |  |  |   |         |  |  |    |  |                                                   | 
|                                                         |  |                 |   |                  |   |                                                  
|Total current assets                                     |  |                 |   | 576,102          |   |                                                   |  |       | (6,168  | )     |  |                          |   | (16     | ) |  |  |   | 569,918 |  |  |    |  | Total current assets                             
|                                                         |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |         |   |  |  |   |         |  |  |    |  |                                                   | 
|                                                         |  |                 |   |                  |   |                                                  
|Fixed assets:                                            |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |         |   |  |  |   |         |  |  |    |  | Non-current assets:                              
|Property and equipment                                   |  |                 |   | 45,180           |   |                                                   |  |       |         |       |  |                          |   | 5,887   |   |  |  |   | 51,067  |  |  | 5  |  | Property and equipment                           
|Intangible assets:                                       |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |         |   |  |  |   |         |  |  |    |  |                                                  
|Goodwill                                                 |  |                 |   | 11,914           |   |                                                   |  |       |         |       |  |                          |   | 2,481   |   |  |  |   | 14,395  |  |  | 6  |  | Goodwill                                         
|Other assets                                             |  |                 |   | 16,911           |   |                                                   |  |       |         |       |  |                          |   | 18      |   |  |  |   | 16,929  |  |  | 7  |  | Intangible assets                                
|Investments and other assetsinvestment securities       |  |                 |   | 80,913           |   |                                                   |  |       | (80,913 | )     |  |                          |   |         |   |  |  |   |         |  |  |    |  |                                                  
|                                                         |  |                 |   |                  |   |                                                   |  |       | 41,241  |       |  |                          |   | (960    | ) |  |  |   | 40,281  |  |  | 8  |  | Investments accounted for using the equity method
|                                                         |  |                 |   |                  |   |                                                   |  |       | 48,300  |       |  |                          |   | (12,600 | ) |  |  |   | 35,700  |  |  | 9  |  | Other financial assets                           
|                                                         |  |                 |   |                  |   |                                                   |  |       | 10,180  |       |  |                          |   | 3,924   |   |  |  |   | 14,104  |  |  | 10 |  | Deferred tax assets                              
|Other assets                                             |  |                 |   | 12,334           |   |                                                   |  |       | (11,453 | )     |  |                          |   | (6      | ) |  |  |   | 875     |  |  | 11 |  | Other non-current assets                         
|Allowance for doubtful accounts                          |  |                 |   | (43              | ) |                                                   |  |       | 43      |       |  |                          |   |         |   |  |  |   |         |  |  |    |  |                                                  
|                                                         |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |         |   |  |  |   |         |  |  |    |  |                                                   | 
|                                                         |  |                 |   |                  |   |                                                  
|Total fixed assets                                       |  |                 |   | 167,209          |   |                                                   |  |       | 7,398   |       |  |                          |   | (1,256  | ) |  |  |   | 173,351 |  |  |    |  | Total non-current assets                         
|                                                         |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |         |   |  |  |   |         |  |  |    |  |                                                   | 
|                                                         |  |                 |   |                  |   |                                                  
|Total assets                                             |  |                 | ¥ | 743,311          |   |                                                   |  | ¥     | 1,230   |       |  |                          | ¥ | (1,272  | ) |  |  | ¥ | 743,269 |  |  |    |  | TOTAL ASSETS                                     
|                                                         |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |         |   |  |  |   |         |  |  |    |  |                                                   | 



- 66 -



---

|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   |  |  | 
|------------------------------------------------- |  | --------------- | - | ---------------- | - | ------------------------------------------------- |  | ----- | ------- | ----- |  | ------------------------ | - | ------ | - |  |  | - | ------- | - |  | -- |  | ------------------------------------------------- |  |  | 
|                                                  |  | Millions of Yen |   |                  |   |                                                  
|Presentation under JGAAP                          |  | JGAAP           |   | Reclassification |   | Differences in  Recognition and      
Measurement |  | IFRSs |         | Notes |  | Presentation under IFRSs
|                                                  |  |                 |   |                  |   |                                                  
|Liabilities:                                      |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  | LIABILITIES AND EQUITY:                          
|Current liabilities:                              |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  | Current liabilities:                             
|Accounts payabletrade                            |  |                 | ¥ | 10,971           |   |                                                   |  | ¥     | 110,658 |       |  |                          | ¥ | (21    | ) |  |  | ¥ | 121,608 |   |  | 12 |  | Trade and other payables                         
|                                                  |  |                 |   |                  |   |                                                   |  |       | 5,648   |       |  |                          |   |        |   |  |  |   | 5,648   |   |  | 13 |  | Other financial liabilities                      
|Income taxes payable                              |  |                 |   | 42,255           |   |                                                   |  |       | (623    | )     |  |                          |   | 495    |   |  |  |   | 42,127  |   |  | 14 |  | Income taxes payable                             
|                                                  |  |                 |   |                  |   |                                                   |  |       | 4,299   |       |  |                          |   |        |   |  |  |   | 4,299   |   |  | 15 |  | Provisions                                       
|Foreign exchange dealings deposits from customers |  |                 |   | 72,485           |   |                                                   |  |       | (72,485 | )     |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                  
|Other current liabilities                         |  |                 |   | 63,378           |   |                                                   |  |       | (46,267 | )     |  |                          |   | 3,150  |   |  |  |   | 20,261  |   |  | 16 |  | Other current liabilities                        
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|                                                  |  |                 |   |                  |   |                                                  
|Total current liabilities                         |  |                 |   | 189,089          |   |                                                   |  |       | 1,230   |       |  |                          |   | 3,624  |   |  |  |   | 193,943 |   |  |    |  | Total current liabilities                        
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|Long-term liabilities:                            |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  | Non-current liabilities:                         
|                                                  |  |                 |   |                  |   |                                                   |  |       | 153     |       |  |                          |   | (6     | ) |  |  |   | 147     |   |  | 17 |  | Other financial liabilities                      
|                                                  |  |                 |   |                  |   |                                                   |  |       | 2,460   |       |  |                          |   |        |   |  |  |   | 2,460   |   |  | 18 |  | Provisions                                       
|Other liabilities                                 |  |                 |   |                  |   |                                                   |  |       | 31      |       |  |                          |   |        |   |  |  |   | 31      |   |  | 19 |  | Deferred tax liabilities                         
|                                                  |  |                 |   | 2,958            |   |                                                   |  |       | (2,644  | )     |  |                          |   | 756    |   |  |  |   | 1,070   |   |  | 20 |  | Other non-current liabilities                    
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|                                                  |  |                 |   |                  |   |                                                  
|Total long-term liabilities                       |  |                 |   | 2,958            |   |                                                   |  |       |         |       |  |                          |   | 750    |   |  |  |   | 3,708   |   |  |    |  | Total non-current liabilities                    
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|                                                  |  |                 |   |                  |   |                                                  
|Total liabilities                                 |  |                 |   | 192,047          |   |                                                   |  |       | 1,230   |       |  |                          |   | 4,374  |   |  |  |   | 197,651 |   |  |    |  | Total liabilities                                
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|                                                  |  |                 |   |                  |   |                                                  
|Equity:                                           |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  | Equity:                                          
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  | Equity attributable to owners of the parent:     
|Common stock                                      |  |                 |   | 8,037            |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   | 8,037   |   |  |    |  | Common stock                                     
|Capital surplus                                   |  |                 |   | 3,117            |   |                                                   |  |       | 571     |       |  |                          |   | 6      |   |  |  |   | 3,694   |   |  | 21 |  | Capital surplus                                  
|Retained earnings                                 |  |                 |   | 528,082          |   |                                                   |  |       |         |       |  |                          |   | (5,771 | ) |  |  |   | 522,311 |   |  | 22 |  | Retained earnings                                
|Treasury stock                                    |  |                 |   | (372             | ) |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   | (372    | ) |  |    |  | Treasury stock                                   
|Accumulated other comprehensive income            |  |                 |   | 4,595            |   |                                                   |  |       |         |       |  |                          |   | (19    | ) |  |  |   | 4,576   |   |  | 23 |  | Accumulated other comprehensive income           
|Stock acquisition rights                          |  |                 |   | 571              |   |                                                   |  |       | (571    | )     |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                  
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|                                                  |  |                 |   | 544,030          |   |                                                   |  |       |         |       |  |                          |   | (5,784 | ) |  |  |   | 538,246 |   |  |    |  | Total equity attributable to owners of the parent
|Minority interests                                |  |                 |   | 7,234            |   |                                                   |  |       |         |       |  |                          |   | 138    |   |  |  |   | 7,372   |   |  |    |  | Non-controlling interests                        
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|                                                  |  |                 |   |                  |   |                                                  
|Total equity                                      |  |                 |   | 551,264          |   |                                                   |  |       |         |       |  |                          |   | (5,646 | ) |  |  |   | 545,618 |   |  |    |  | Total equity                                     
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 
|                                                  |  |                 |   |                  |   |                                                  
|Total liabilities and equity                      |  |                 | ¥ | 743,311          |   |                                                   |  | ¥     | 1,230   |       |  |                          | ¥ | (1,272 | ) |  |  | ¥ | 743,269 |   |  |    |  | TOTAL LIABILITIES AND EQUITY                     
|                                                  |  |                 |   |                  |   |                                                   |  |       |         |       |  |                          |   |        |   |  |  |   |         |   |  |    |  |                                                   | 



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Notes to the reconciliation of equity



| | 1. | Cash and cash equivalents
| | -- | -------------------------

(Presentation)

Under JGAAP, time deposits with maturities of more than three months as well as those pledged as collateral were included in cash and
deposits. Under IFRSs, they are included in other financial assets (current).



| | 2. | Trade and other receivables
| | -- | ---------------------------

(Presentation)

Under JGAAP, accounts receivabletrade, foreign exchange dealings cashdeposits with trust banks, and allowance for doubtful
accounts were presented separately. Under IFRSs, they are all included in trade and other receivables.

Under JGAAP, other receivables
were included in other current assets. Under IFRSs, they are included in trade and other receivables.



| | 3. | Other financial assets (current)
| | -- | --------------------------------

(Presentation)

Under JGAAP, time deposits with maturities of more than three months as well as those pledged as collateral were included in cash and
deposits. Under IFRSs, they are included in other financial assets (current).

Derivative instruments, which were included in other
current assets under JGAAP, are included in other financial assets (current) under IFRSs.

Certain derivative instruments, which were
presented on a net basis under JGAAP, are presented on a gross basis under IFRSs because they do not meet the criteria for offsetting stipulated in IFRSs.



| | 4. | Other current assets
| | -- | --------------------

(Presentation)

All deferred tax assets and liabilities, which were included in other current assets under JGAAP, are classified as non-current items under IFRSs.

Other receivables, which were included in other current assets under
JGAAP, are included in trade and other receivables under IFRSs.

Derivative instruments, which were included in other current assets
under JGAAP, are included in other financial assets (current) under IFRSs.



| | 5. | Property and equipment
| | -- | ----------------------

(Presentation)

Items of property and equipment, which were separately presented under JGAAP, are presented collectively as property and equipment under
IFRSs.



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---

(Recognition and measurement)

As a result of reviewing depreciation methods and others at the adoption of IFRSs, the Company changed the depreciation method of property
and equipment from the declining-balance method to the straight-line method, resulting in a change in the balance at the date of transition.



| | 6. | Goodwill
| | -- | --------

(Recognition and measurement)

Under JGAAP, goodwill was amortized over the estimated periods in which economic benefits were reasonably expected to be realized. Under
IFRSs, it is not amortized on or after the date of transition to IFRSs, resulting in a change in the remaining amount of goodwill.

Under
IFRSs, changes in the parents ownership interest in subsidiaries that do not result in a loss of control are accounted for as equity transactions. Goodwill recognized in relation to such changes under JGAAP has been reclassified to capital
surplus.



| | 7. | Intangible assets
| | -- | -----------------

(Presentation)

Other assets in the intangible assets section under JGAAP are collectively presented as intangible assets under IFRSs.



| | 8. | Investments accounted for using the equity method
| | -- | -------------------------------------------------

(Presentation)

Investments in associates accounted for using the equity method, which were included in investment securities under JGAAP, are presented
separately as investments accounted for using the equity method under IFRSs.

(Recognition and measurement)

Under JGAAP, goodwill related to investments accounted for using the equity method was amortized over the estimated periods in which economic
benefits were reasonably expected to be realized. Under IFRSs, it is not amortized on or after the date of transition to IFRSs, resulting in a change in the amount of investments accounted for using the equity method.



| | 9. | Other financial assets (non-current)
| | -- | ------------------------------------

(Presentation)

Investments in associates accounted for using the equity method, which were included in investment securities under JGAAP, are presented
separately as investments accounted for using the equity method under IFRSs. Investment securities other than the aforementioned investments under JGAAP are included in other financial assets (non-current)
under IFRSs.

Allowance for doubtful accounts, and lease and guarantee deposits that were included in other assets of investments and
other assets under JGAAP are included in other financial assets (non-current) under IFRSs.



- 69 -



---

(Recognition and measurement)

Under JGAAP, unlisted equity instruments are measured based on their costs.

Under IFRSs, they are measured at their fair values, resulting in a change in the amount of other financial assets (non-current).

The Company has the right of indemnity against SoftBank Group Corp. for additional
taxes which may be levied to income taxes of IDC Frontier Inc., a consolidated subsidiary of the Company. Under JGAAP, the total amount of the estimated future tax payments regarding this agreement was recorded as
long-term other receivables. Under IFRSs, it is treated as indemnification assets and should be adjusted to the amount equivalent to the estimated tax prepayment within a year as an uncertain tax position
which will probably result in an outflow of economic benefits. As a result, the amount of other financial assets (non-current) has changed.



| | 10. | Deferred tax assets
| | --- | -------------------

(Presentation)

Deferred tax assets, which were included in other current assets under JGAAP, are classified as
non-current items under IFRSs.

(Recognition and measurement)

Because of temporary differences arising from IFRS reconciliations of items on the consolidated statements of financial position such as
unlisted equity instruments remeasured at their fair values, deferred tax assets increased.



| | 11. | Other non-current assets
| | --- | ------------------------

(Presentation)

Lease and guarantee deposits, which were included in other investments and other assets under JGAAP, are included in other financial assets (non-current) under IFRSs.



| | 12. | Trade and other payables
| | --- | ------------------------

(Presentation)

Accounts payabletrade and foreign exchange dealings deposits from customers, which were separately presented under JGAAP, are included
in trade and other payables under IFRSs.

Other payables, which were included in other current liabilities under JGAAP, are included in
trade and other payables under IFRSs.



| | 13. | Other financial liabilities (current)
| | --- | -------------------------------------

(Presentation)

Derivative liabilities, which were included in other current liabilities under JGAAP, are included in other financial liabilities (current)
under IFRSs.

Certain derivative liabilities, which were presented on a net basis under JGAAP, are presented on a gross basis under IFRSs
because they do not meet the criteria for netting off stipulated in IFRSs.



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| | 14. | Income taxes payable
| | --- | --------------------

(Presentation)

A part of enterprise taxes is not calculated based on taxable profits. Payables of such enterprise taxes are required to be included in
income taxes payable under JGAAP. Under IFRSs they are included in other current liabilities.

(Recognition and measurement)

Additional taxes which may be levied to IDC Frontier Inc., a consolidated subsidiary of the Company, are not recognized under JGAAP because
they have not been considered certain. Under IFRSs, however, they are treated as an uncertain tax position which will probably result in an outflow of economic benefits and are recognized at the best estimated amount on the assumption that the
Company is obliged to pay the additional taxes within a year. As a result, income taxes payable increased.



| | 15. | Provisions (current)
| | --- | --------------------

(Presentation)

Provisions, such as provision for Yahoo! Points, which were included in other current liabilities under JGAAP, are presented as provisions
(current) under IFRSs.



| | 16. | Other current liabilities
| | --- | -------------------------

(Presentation)

A part of enterprise taxes is not calculated based on taxable profits. Payables of such enterprise taxes are required to be included in
income taxes payable under JGAAP. Under IFRSs they are included in other current liabilities.

Other payables, which were included in
other current liabilities under JGAAP, are included in trade and other payables under IFRSs.

Derivative liabilities, which were included
in other current liabilities under JGAAP, are included in other current financial liabilities under IFRSs.

(Recognition and measurement)

Unsettled paid absences, which are not recognized under JGAAP, are recognized as liabilities under IFRSs, resulting in an increase of
other current liabilities.



| | 17. | Other non-current financial liabilities
| | --- | ---------------------------------------

(Presentation)

Long-term deposits received, which were included in long-term liabilities under JGAAP, are included in other non-current financial
liabilities under IFRSs.



| | 18. | Provisions (non-current)
| | --- | ------------------------

(Presentation)

Asset retirement obligations, which were included in long-term liabilities under JGAAP, are presented
as provisions (non-current) under IFRSs.



- 71 -



---

| | 19. | Deferred tax liabilities
| | --- | ------------------------

(Presentation)

Deferred tax liabilities, which were included in long-term liabilities under JGAAP, are separately
presented under IFRSs.



| | 20. | Other non-current liabilities
| | --- | -----------------------------

(Presentation)

Long-term deposits received, which were included in long-term
liabilities under JGAAP, are included in other non-current financial liabilities under IFRSs.

Asset retirement obligations, which were included in long-term liabilities under JGAAP, are presented
as provisions (non-current) under IFRSs.

Deferred tax liabilities, which were included in long-term liabilities under JGAAP, are separately presented under IFRSs.

(Recognition and measurement)

Under JGAAP, revenue of installation for data center-related services is recognized upon
completion of rendering such services. Under IFRSs, they are recognized over an estimated average contract period, resulting in a change in the amount of other non-current liabilities.



| | 21. | Capital surplus
| | --- | ---------------

(Presentation)

Stock acquisition rights, which were separately presented under JGAAP, are included in capital surplus under IFRSs.

(Recognition and measurement)

Under IFRSs, changes in the parents ownership interest in subsidiaries that do not result in a loss of control are accounted for as
equity transactions. Goodwill recognized in relation to such changes under JGAAP has been reclassified to capital surplus.



| | 22. | Retained earnings
| | --- | -----------------

(Recognition and measurement)

The effects of adoption of IFRSs on retained earnings are as follows:



Millions of YenAs ofMarch 31, 2014(End of thePrevious Year)

As ofApril 1, 2013(Date of Transitionto IFRSs)Depreciation and amortization



¥   4,149




¥   3,788Unsettled paid absences



(2,359)




(1,998)Goodwill



3,693Fair value measurement of unlistedequity instruments



(7,472)




(7,472)Others



(456)




(89)Total



¥  (2,445)




¥  (5,771)




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---

| | 23. | Accumulated other comprehensive income
| | --- | --------------------------------------

(Recognition and measurement)

Under JGAAP, unlisted equity instruments are measured based on their costs.

Under IFRSs, they are measured at their fair values, resulting in a change in amount of accumulated other comprehensive income.

Foreign currency translation adjustments, which were included in accumulated other comprehensive income under JGAAP, were reclassified to
retained earnings upon the transition to IFRSs.

Reconciliation of Comprehensive Income for the Previous Year (from April 1, 2013
to March 31, 2014)



Millions of YenPresentation under JGAAP

JGAAP

Reclassification

Differences inRecognition and
Measurement

IFRSs

Notes

Presentation under IFRSsNet sales


¥
386,284



¥
22,278



¥
(47
)


¥
408,515


1

REVENUECost of sales



49,048




26,813









75,861


2

COST OF SALESGross profit



337,236




(4,535
)



(47
)



332,654




Gross profitSelling, general and administrative expenses



139,820




(363
)



(3,241
)



136,216


3

SELLING, GENERAL AND ADMINISTRATIVE EXPENSESOperating income



197,416




(4,172
)



3,194




196,438




Operating incomeNon-operating income



1,280




(1,280
)Non-operating expenses



1,062




(1,062
)Extraordinary income



12,348




738




108




13,194


4

OTHER NON-OPERATING INCOMEExtraordinary losses



5,375




(4,353
)



291




1,313


5

OTHER NON-OPERATING EXPENSES(701
)



607




(94
)

6

EQUITY IN EARNINGS (LOSSES) OF ASSOCIATES AND A JOINT VENTUREIncome before income taxes and minority interests



204,607









3,618




208,225




PROFIT BEFORE TAXIncome taxes



78,428









129




78,557


7

INCOME TAX EXPENSEIncome before minority interests



126,179









3,489




129,668




PROFIT FOR THE YEAROther comprehensive income:























OTHER COMPREHENSIVE INCOME:Items that may be reclassified subsequently to profit or loss:Net unrealized gain on available-for-sale securities



1,452









3,646




5,098




Available-for-sale financial assetsDeferred gain on derivatives under hedge accounting



2









(2
)Foreign currency translation adjustments



175














175




Exchange differences on translating foreign operationsShare of other comprehensive income in associates accounted for by the equity method



191














191




Share of other comprehensive income of associatesTotal other comprehensive income



1,820









3,644




5,464




Other comprehensive income, net of taxComprehensive income


¥
127,999








¥
7,133



¥
135,132




TOTAL COMPREHENSIVE INCOME




- 73 -



---

Notes to the reconciliation of comprehensive income

Major components of reconciliation are as follows:



| | 1. | Revenue
| | -- | -------

(Presentation)

Under JGAAP, traffic acquisition costs paid in proportion to sales of paid search advertising and certain commissions for settlement are
deducted from sales (net basis). Under IFRSs, they are presented on a gross basis, resulting in a change in the amount of revenue.

(Recognition and measurement)

Under JGAAP, sales of installation for data center-related services are recognized at completion of
rendering such services. Under IFRSs, they are recognized over an estimated average contract period, resulting in a change in the amount of revenue.



| | 2. | Cost of sales
| | -- | -------------

(Presentation)

Under JGAAP, traffic acquisition costs and certain commissions for settlement paid in proportion to sales of paid search advertising are
deducted from sales (net basis). Under IFRSs, they are presented on a gross basis, resulting in a change in the amount of cost of sales.



| | 3. | Selling, general and administrative expenses
| | -- | --------------------------------------------

(Presentation)

Under JGAAP, impairment losses and other losses are included in extraordinary losses. Under IFRSs, they are included in selling, general and
administrative expenses.

(Recognition and measurement)

As a result of reviewing depreciation methods and others at the transition to IFRSs, amount of depreciation expenses changed.

Under JGAAP, goodwill was amortized over the estimated periods in which economic benefits were reasonably expected to be realized. Under
IFRSs, it is not amortized on or after the date of transition to IFRSs, resulting in a change in the amount of amortization of goodwill.



| | 4. | Other non-operating income
| | -- | --------------------------

(Presentation)

Gain on sales of investment securities and other gains, which were included in extraordinary gains under JGAAP, are included in other non-operating income under IFRSs.

Interest income and other income, which were included in non-operating income under JGAAP, are included in other non-operating income under IFRSs.



- 74 -



---

(Recognition and measurement)

As a result of remeasuring gains and losses on sales of investments accounted for using the equity method upon adoption of IFRSs, there were
differences in gains and losses on sales between those under IFRSs and those under JGAAP, resulting in a change in the amount of other non-operating income from sales of investments.



| | 5. | Other non-operating expenses
| | -- | ----------------------------

(Presentation)

Loss on sales of investment securities and other losses, which were included in extraordinary losses under JGAAP, are included in other non-operating expenses under IFRSs.

Losses from other investments and other losses, which were
included in non-operating expenses under JGAAP, are included in other non-operating expenses.



| | 6. | Equity in earnings (losses) of associates
| | -- | -----------------------------------------

(Presentation)

Equity in earnings (losses) of associates, which were presented as an item of non-operating income or
expenses under JGAAP, is presented as a separate component under IFRSs.

(Recognition and measurement)

Under JGAAP, goodwill related to investments accounted for using the equity method was amortized over the estimated periods in which economic
benefits were reasonably expected to be realized. Under IFRSs, it is not amortized on or after the date of transition to IFRSs, resulting in a change in the amount of share of profit (loss) of associates accounted for using the equity method.



| | 7. | Income taxes
| | -- | ------------

(Presentation)

As a result of reviewing depreciation methods and others and remeasuring deferred tax assets at the adoption of IFRSs, amounts of income
taxes increased.

Reconciliation of Cash Flows

There is no significant difference between the consolidated statements of cash flows prepared and disclosed in accordance with JGAAP and that
prepared and disclosed in accordance with IFRSs.



|36. | APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS
|--- | ---------------------------------------------

The consolidated financial statements
have been authorized for issue by Mr. Manabu Miyasaka, Representative Director and President, and Mr. Toshiki Oya, Managing Corporate Officer, Director and Chief Financial Officer, on September 24, 2015.

* * * * * *



- 75 -