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 statements of profit or loss, comprehensive income, changes in equity, and cash flows of Yahoo Japan Corporation and its subsidiaries (the Company) for the year ended March 31, 2014, and the related notes
(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 audit. We conducted our audit 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 results of operations and cash flows of
Yahoo Japan Corporation and its subsidiaries 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 statements of
financial position of the Company as of March 31, 2015 and 2016, and the related consolidated statements of profit or loss, comprehensive income, changes in equity, and cash flows for the years ended March 31, 2015 and 2016 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 (September 19, 2016 as to the segment information for the year ended March 31, 2014 disclosed in Note
6)



1



---

Yahoo Japan Corporation and Subsidiaries

Consolidated Statements of Financial Position (Unaudited)





|                                                            |  |                 |           |  |  |  |  |                                      |  |   |           |  |  |  |  |  |  |   |            | 
|----------------------------------------------------------- |  | --------------- | --------- |  |  |  |  | ------------------------------------ |  | - | --------- |  |  |  |  |  |  | - | ---------- | 
|                                                            |  | Millions of Yen |           |  |  |  |  | Thousands of U.S. Dollars(Note 2(3)) | 
|                                                            |  | As ofMarch 31   |           |  |  |  |  | As ofMarch 31,2016                   | 
|                                                            |  | 2016            |           |  |  |  |  | 2015                                 |  |   |           |  | 
|                                                            |  |                 |           |  | 
|ASSETS:                                                     |  |                 |           |  |  |  |  |                                      |  |   |           |  |  |  |  |  |  |   |            | 
|Current assets:                                             |  |                 |           |  |  |  |  |                                      |  |   |           |  |  |  |  |  |  |   |            | 
|Cash and cash equivalents (Note 7)                          |  | ¥               | 449,165   |  |  |  |  |                                      |  | ¥ | 503,937   |  |  |  |  |  |  | $ | 3,986,200  | 
|Trade and other receivables (Notes 8 and 25)                |  |                 | 305,759   |  |  |  |  |                                      |  |   | 217,736   |  |  |  |  |  |  |   | 2,713,516  | 
|Inventories                                                 |  |                 | 14,902    |  |  |  |  |                                      |  |   | 419       |  |  |  |  |  |  |   | 132,251    | 
|Other financial assets (Notes 9 and 25)                     |  |                 | 30,118    |  |  |  |  |                                      |  |   | 15,902    |  |  |  |  |  |  |   | 267,288    | 
|Other current assets (Note 10)                              |  |                 | 6,437     |  |  |  |  |                                      |  |   | 3,834     |  |  |  |  |  |  |   | 57,126     | 
|                                                            |  |                 |           |  |  |  |  |                                      |  |   |           |  |  |  |  |  |  |   |            | 
|                                                            |  |                 |           |  | 
|Total current assets                                        |  |                 | 806,381   |  |  |  |  |                                      |  |   | 741,828   |  |  |  |  |  |  |   | 7,156,381  | 
|                                                            |  |                 |           |  |  |  |  |                                      |  |   |           |  |  |  |  |  |  |   |            | 
|Non-current assets:                                         |  |                 |           |  |  |  |  |                                      |  |   |           |  |  |  |  |  |  |   |            | 
|Property and equipment (Note 11)                            |  |                 | 121,134   |  |  |  |  |                                      |  |   | 67,466    |  |  |  |  |  |  |   | 1,075,027  | 
|Goodwill (Note 12)                                          |  |                 | 156,362   |  |  |  |  |                                      |  |   | 27,673    |  |  |  |  |  |  |   | 1,387,664  | 
|Intangible assets (Note 12)                                 |  |                 | 128,712   |  |  |  |  |                                      |  |   | 32,382    |  |  |  |  |  |  |   | 1,142,279  | 
|Investments accounted for using the equity method (Note 13) |  |                 | 34,257    |  |  |  |  |                                      |  |   | 61,671    |  |  |  |  |  |  |   | 304,020    | 
|Other financial assets (Notes 9 and 25)                     |  |                 | 70,322    |  |  |  |  |                                      |  |   | 58,104    |  |  |  |  |  |  |   | 624,086    | 
|Deferred tax assets (Note 14)                               |  |                 | 23,331    |  |  |  |  |                                      |  |   | 15,105    |  |  |  |  |  |  |   | 207,055    | 
|Other non-current assets (Note 10)                          |  |                 | 2,301     |  |  |  |  |                                      |  |   | 3,374     |  |  |  |  |  |  |   | 20,421     | 
|                                                            |  |                 |           |  |  |  |  |                                      |  |   |           |  |  |  |  |  |  |   |            | 
|                                                            |  |                 |           |  | 
|Total non-current assets                                    |  |                 | 536,419   |  |  |  |  |                                      |  |   | 265,775   |  |  |  |  |  |  |   | 4,760,552  | 
|                                                            |  |                 |           |  |  |  |  |                                      |  |   |           |  |  |  |  |  |  |   |            | 
|                                                            |  |                 |           |  | 
|TOTAL ASSETS                                                |  | ¥               | 1,342,800 |  |  |  |  |                                      |  | ¥ | 1,007,603 |  |  |  |  |  |  | $ | 11,916,933 | 
|                                                            |  |                 |           |  |  |  |  |                                      |  |   |           |  |  |  |  |  |  |   |            | 



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



---

Yahoo Japan Corporation and Subsidiaries

Consolidated Statements of Financial Position (Unaudited)





|                                                  |  |                 |           |   |                                      |   |           |   |  |   |            |  
|------------------------------------------------- |  | --------------- | --------- | - | ------------------------------------ | - | --------- | - |  | - | ---------- | -
|                                                  |  | Millions of Yen |           |   | Thousands of U.S. Dollars(Note 2(3)) |  
|                                                  |  | As ofMarch 31   |           |   | As ofMarch 31,2016                   |  
|                                                  |  | 2016            |           |   | 2015                                 |   |          
|                                                  |  |                 |          
|LIABILITIES AND EQUITY:                           |  |                 |           |   |                                      |   |           |   |  |   |            |  
|Liabilities:                                      |  |                 |           |   |                                      |   |           |   |  |   |            |  
|Current liabilities:                              |  |                 |           |   |                                      |   |           |   |  |   |            |  
|Trade and other payables (Notes 15 and 25)        |  | ¥               | 270,767   |   |                                      | ¥ | 158,979   |   |  | $ | 2,402,973  |  
|Other financial liabilities (Notes 16 and 25)     |  |                 | 18,288    |   |                                      |   | 9,671     |   |  |   | 162,300    |  
|Income taxes payable (Note 14)                    |  |                 | 30,782    |   |                                      |   | 33,072    |   |  |   | 273,181    |  
|Provisions (Note 17)                              |  |                 | 12,547    |   |                                      |   | 6,399     |   |  |   | 111,351    |  
|Other current liabilities (Note 19)               |  |                 | 33,639    |   |                                      |   | 31,652    |   |  |   | 298,536    |  
|                                                  |  |                 |           |   |                                      |   |           |   |  |   |            |  
|                                                  |  |                 |          
|Total current liabilities                         |  |                 | 366,023   |   |                                      |   | 239,773   |   |  |   | 3,248,341  |  
|                                                  |  |                 |           |   |                                      |   |           |   |  |   |            |  
|                                                  |  |                 |          
|Non-current liabilities:                          |  |                 |           |   |                                      |   |           |   |  |   |            |  
|Other financial liabilities (Notes 16 and 25)     |  |                 | 10,563    |   |                                      |   | 920       |   |  |   | 93,743     |  
|Provisions (Note 17)                              |  |                 | 20,089    |   |                                      |   | 22,842    |   |  |   | 178,284    |  
|Deferred tax liabilities (Note 14)                |  |                 | 27,516    |   |                                      |   | 29        |   |  |   | 244,196    |  
|Other non-current liabilities (Note 19)           |  |                 | 5,845     |   |                                      |   | 3,485     |   |  |   | 51,872     |  
|                                                  |  |                 |           |   |                                      |   |           |   |  |   |            |  
|                                                  |  |                 |          
|Total non-current liabilities                     |  |                 | 64,013    |   |                                      |   | 27,276    |   |  |   | 568,095    |  
|                                                  |  |                 |           |   |                                      |   |           |   |  |   |            |  
|                                                  |  |                 |          
|Total liabilities                                 |  |                 | 430,036   |   |                                      |   | 267,049   |   |  |   | 3,816,436  |  
|                                                  |  |                 |           |   |                                      |   |           |   |  |   |            |  
|                                                  |  |                 |          
|Equity:                                           |  |                 |           |   |                                      |   |           |   |  |   |            |  
|Equity attributable to owners of the parent:      |  |                 |           |   |                                      |   |           |   |  |   |            |  
|Common stock (Note 22)                            |  |                 | 8,359     |   |                                      |   | 8,281     |   |  |   | 74,184     |  
|Capital surplus (Notes 22 and 24)                 |  |                 | (3,081    | ) |                                      |   | 1,235     |   |  |   | (27,343    | )
|Retained earnings (Note 22)                       |  |                 | 827,024   |   |                                      |   | 705,840   |   |  |   | 7,339,581  |  
|Treasury stock (Note 22)                          |  |                 | (1,316    | ) |                                      |   | (1,316    | ) |  |   | (11,679    | )
|Accumulated other comprehensive income            |  |                 | 13,180    |   |                                      |   | 11,962    |   |  |   | 116,968    |  
|                                                  |  |                 |           |   |                                      |   |           |   |  |   |            |  
|Total equity attributable to owners of the parent |  |                 | 844,166   |   |                                      |   | 726,002   |   |  |   | 7,491,711  |  
|Non-controlling interests                         |  |                 | 68,598    |   |                                      |   | 14,552    |   |  |   | 608,786    |  
|                                                  |  |                 |           |   |                                      |   |           |   |  |   |            |  
|                                                  |  |                 |          
|Total equity                                      |  |                 | 912,764   |   |                                      |   | 740,554   |   |  |   | 8,100,497  |  
|                                                  |  |                 |           |   |                                      |   |           |   |  |   |            |  
|                                                  |  |                 |          
|TOTAL LIABILITIES AND EQUITY                      |  | ¥               | 1,342,800 |   |                                      | ¥ | 1,007,603 |   |  | $ | 11,916,933 |  
|                                                  |  |                 |           |   |                                      |   |           |   |  |   |            |  

See notes to consolidated financial statements.



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



---

Yahoo Japan Corporation and Subsidiaries



Consolidated Statements of Profit or Loss





|                                                                        |  |                    |         |  |                                      |   |         |      |  |   |           |   |  |   |           | 
|----------------------------------------------------------------------- |  | ------------------ | ------- |  | ------------------------------------ | - | ------- | ---- |  | - | --------- | - |  | - | --------- | 
|                                                                        |  | Millions of Yen    |         |  | Thousands of U.S. Dollars(Note 2(3)) |  
|                                                                        |  | Year EndedMarch 31 |         |  | Year Ended
March 31,                 |  
|                                                                        |  | 2016               |         |  | 2015                                 |   |         | 2014 |  |   | 2016      |  
|                                                                        |  | Unaudited          |         |  | Unaudited                            |   |         |      |  |   | Unaudited |  
|                                                                        |  |                    |         | 
|REVENUE (Note 28)                                                       |  | ¥                  | 652,327 |  |                                      | ¥ | 428,488 |      |  | ¥ | 408,515   |   |  | $ | 5,789,200 | 
|                                                                        |  |                    |         | 
|COST OF SALES (Note 29)                                                 |  |                    | 247,372 |  |                                      |   | 85,502  |      |  |   | 75,861    |   |  |   | 2,195,350 | 
|                                                                        |  |                    |         |  |                                      |   |         |      |  |   |           |   |  |   |           | 
|                                                                        |  |                    |         | 
|Gross profit                                                            |  |                    | 404,955 |  |                                      |   | 342,986 |      |  |   | 332,654   |   |  |   | 3,593,850 | 
|                                                                        |  |                    |         | 
|SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 29)                  |  |                    | 239,653 |  |                                      |   | 145,774 |      |  |   | 136,216   |   |  |   | 2,126,846 | 
|                                                                        |  |                    |         | 
|GAIN FROM REMEASUREMENT RELATING TO BUSINESS COMBINATIONS (Note 5)      |  |                    | 59,696  |  |                                      |   |         |      |  |   |           |   |  |   | 529,783   | 
|                                                                        |  |                    |         |  |                                      |   |         |      |  |   |           |   |  |   |           | 
|                                                                        |  |                    |         | 
|Operating income                                                        |  |                    | 224,998 |  |                                      |   | 197,212 |      |  |   | 196,438   |   |  |   | 1,996,787 | 
|                                                                        |  |                    |         | 
|OTHER NON-OPERATING INCOME (Note 30)                                    |  |                    | 3,016   |  |                                      |   | 10,638  |      |  |   | 13,194    |   |  |   | 26,766    | 
|                                                                        |  |                    |         | 
|OTHER NON-OPERATING EXPENSES                                            |  |                    | 2,746   |  |                                      |   | 1,224   |      |  |   | 1,313     |   |  |   | 24,370    | 
|                                                                        |  |                    |         | 
|EQUITY IN EARNINGS (LOSSES) OF ASSOCIATES AND A JOINT VENTURE (Note 13) |  |                    | 1,317   |  |                                      |   | 1,673   |      |  |   | (94       | ) |  |   | 11,688    | 
|                                                                        |  |                    |         |  |                                      |   |         |      |  |   |           |   |  |   |           | 
|                                                                        |  |                    |         | 
|PROFIT BEFORE TAX                                                       |  |                    | 226,585 |  |                                      |   | 208,299 |      |  |   | 208,225   |   |  |   | 2,010,871 | 
|                                                                        |  |                    |         | 
|INCOME TAX EXPENSE (Note 14)                                            |  |                    | 54,093  |  |                                      |   | 74,366  |      |  |   | 78,557    |   |  |   | 480,058   | 
|                                                                        |  |                    |         |  |                                      |   |         |      |  |   |           |   |  |   |           | 
|                                                                        |  |                    |         | 
|PROFIT FOR THE YEAR                                                     |  | ¥                  | 172,492 |  |                                      | ¥ | 133,933 |      |  | ¥ | 129,668   |   |  | $ | 1,530,813 | 
|                                                                        |  |                    |         |  |                                      |   |         |      |  |   |           |   |  |   |           | 
|                                                                        |  |                    |         | 
|ATTRIBUTABLE TO:                                                        |  |                    |         |  |                                      |   |         |      |  |   |           |   |  |   |           | 
|Owners of the parent                                                    |  | ¥                  | 171,617 |  |                                      | ¥ | 133,052 |      |  | ¥ | 128,605   |   |  | $ | 1,523,048 | 
|Non-controlling interests                                               |  |                    | 875     |  |                                      |   | 881     |      |  |   | 1,063     |   |  |   | 7,765     | 
|                                                                        |  |                    |         |  |                                      |   |         |      |  |   |           |   |  |   |           | 
|                                                                        |  |                    |         | 
|PROFIT FOR THE YEAR                                                     |  | ¥                  | 172,492 |  |                                      | ¥ | 133,933 |      |  | ¥ | 129,668   |   |  | $ | 1,530,813 | 
|                                                                        |  |                    |         |  |                                      |   |         |      |  |   |           |   |  |   |           | 
|                                                                        |  |                    |         | 
|EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS OF THE PARENT:                |  |                    |         |  |                                      |   |         |      |  |   |           |   |  |   |           | 
|Basic (yen and U.S. dollars) (Note 32)                                  |  | ¥                  | 30.15   |  |                                      | ¥ | 23.37   |      |  | ¥ | 22.43     |   |  | $ | 0.27      | 
|Diluted (yen and U.S. dollars) (Note 32)                                |  |                    | 30.14   |  |                                      |   | 23.37   |      |  |   | 22.43     |   |  |   | 0.27      | 

See notes to consolidated financial statements.



4



---

Yahoo Japan Corporation and Subsidiaries



Consolidated Statements of Comprehensive Income





|                                                                         |  |                    |         |   |                                      |   |         |      |  |   |           |  |  |   |           |  
|------------------------------------------------------------------------ |  | ------------------ | ------- | - | ------------------------------------ | - | ------- | ---- |  | - | --------- |  |  | - | --------- | -
|                                                                         |  | Millions of Yen    |         |   | Thousands of U.S. Dollars(Note 2(3)) |  
|                                                                         |  | Year EndedMarch 31 |         |   | Year EndedMarch 31,                  |  
|                                                                         |  | 2016               |         |   | 2015                                 |   |         | 2014 |  |   | 2016      | 
|                                                                         |  | Unaudited          |         |   | Unaudited                            |   |         |      |  |   | Unaudited | 
|                                                                         |  |                    |         |  
|PROFIT FOR THE YEAR                                                      |  | ¥                  | 172,492 |   |                                      | ¥ | 133,933 |      |  | ¥ | 129,668   |  |  | $ | 1,530,813 |  
|                                                                         |  |                    |         |   |                                      |   |         |      |  |   |           |  |  |   |           |  
|                                                                         |  |                    |         |  
|OTHER COMPREHENSIVE INCOME:                                              |  |                    |         |   |                                      |   |         |      |  |   |           |  |  |   |           |  
|Items that may be reclassified subsequently to profit or loss:           |  |                    |         |   |                                      |   |         |      |  |   |           |  |  |   |           |  
|Available-for-sale financial assets (Notes 26 and 31)                    |  |                    | 2,059   |   |                                      |   | 41      |      |  |   | 5,098     |  |  |   | 18,273    |  
|Exchange differences on translating foreign operations (Notes 26 and 31) |  |                    | (810    | ) |                                      |   | 928     |      |  |   | 175       |  |  |   | (7,189    | )
|Share of other comprehensive income of associates (Note 31)              |  |                    | (237    | ) |                                      |   | 976     |      |  |   | 191       |  |  |   | (2,103    | )
|                                                                         |  |                    |         |   |                                      |   |         |      |  |   |           |  |  |   |           |  
|                                                                         |  |                    |         |  
|Other comprehensive income, net of tax                                   |  |                    | 1,012   |   |                                      |   | 1,945   |      |  |   | 5,464     |  |  |   | 8,981     |  
|                                                                         |  |                    |         |   |                                      |   |         |      |  |   |           |  |  |   |           |  
|                                                                         |  |                    |         |  
|TOTAL COMPREHENSIVE INCOME                                               |  | ¥                  | 173,504 |   |                                      | ¥ | 135,878 |      |  | ¥ | 135,132   |  |  | $ | 1,539,794 |  
|                                                                         |  |                    |         |   |                                      |   |         |      |  |   |           |  |  |   |           |  
|                                                                         |  |                    |         |  
|ATTRIBUTABLE TO:                                                         |  |                    |         |   |                                      |   |         |      |  |   |           |  |  |   |           |  
|Owners of the parent                                                     |  | ¥                  | 172,835 |   |                                      | ¥ | 134,981 |      |  | ¥ | 134,062   |  |  | $ | 1,533,857 |  
|Non-controlling interests                                                |  |                    | 669     |   |                                      |   | 897     |      |  |   | 1,070     |  |  |   | 5,937     |  
|                                                                         |  |                    |         |   |                                      |   |         |      |  |   |           |  |  |   |           |  
|                                                                         |  |                    |         |  
|TOTAL COMPREHENSIVE INCOME                                               |  | ¥                  | 173,504 |   |                                      | ¥ | 135,878 |      |  | ¥ | 135,132   |  |  | $ | 1,539,794 |  
|                                                                         |  |                    |         |   |                                      |   |         |      |  |   |           |  |  |   |           |  

See notes to consolidated financial statements.



5



---

Yahoo Japan Corporation and Subsidiaries

Consolidated Statements of Changes in Equity





|                                                                      |  |                                             |       |  |                 |   |        |                   |  |   |               |   |  |                                     |         |   |       |   |        |                          |  |   |         |   |  |   |        |   |  |   |         |  
|--------------------------------------------------------------------- |  | ------------------------------------------- | ----- |  | --------------- | - | ------ | ----------------- |  | - | ------------- | - |  | ----------------------------------- | ------- | - | ----- | - | ------ | ------------------------ |  | - | ------- | - |  | - | ------ | - |  | - | ------- | -
|                                                                      |  | Millions of Yen                             |      
|                                                                      |  | Equity 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 obtaining or losing control of 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 obtaining or losing control of 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 |  
|                                                                      |  |                                             |       |  |                 |   |        |                   |  |   |               |   |  |                                     |         |   |       |   |        |                          |  |   |         |   |  |   |        |   |  |   |         |  
|                                                                      |  |                                             |       |  |                 |   |        |                  
|Profit for the year                                                   |  |                                             |       |  |                 |   |        |                   |  |   | 171,617       |   |  |                                     |         |   |       |   |        |                          |  |   | 171,617 |   |  |   | 875    |   |  |   | 172,492 |  
|Other comprehensive income, net of tax                                |  |                                             |       |  |                 |   |        |                   |  |   |               |   |  |                                     |         |   |       |   | 1,218  |                          |  |   | 1,218   |   |  |   | (206   | ) |  |   | 1,012   |  
|                                                                      |  |                                             |       |  |                 |   |        |                   |  |   |               |   |  |                                     |         |   |       |   |        |                          |  |   |         |   |  |   |        |   |  |   |         |  
|Total comprehensive income for the year                               |  |                                             |       |  |                 |   |        |                   |  |   | 171,617       |   |  |                                     |         |   |       |   | 1,218  |                          |  |   | 172,835 |   |  |   | 669    |   |  |   | 173,504 |  
|                                                                      |  |                                             |       |  |                 |   |        |                   |  |   |               |   |  |                                     |         |   |       |   |        |                          |  |   |         |   |  |   |        |   |  |   |         |  
|Issue of common stock (Note 22)                                       |  |                                             | 78    |  |                 |   | 78     |                   |  |   |               |   |  |                                     |         |   |       |   |        |                          |  |   | 156     |   |  |   |        |   |  |   | 156     |  
|Payment of dividends (Note 23)                                        |  |                                             |       |  |                 |   |        |                   |  |   | (50,433       | ) |  |                                     |         |   |       |   |        |                          |  |   | (50,433 | ) |  |   | (757   | ) |  |   | (51,190 | )
|Changes attributable to obtaining or losing control of subsidiaries   |  |                                             |       |  |                 |   |        |                   |  |   |               |   |  |                                     |         |   |       |   |        |                          |  |   |         |   |  |   | 55,562 |   |  |   | 55,562  |  
|Changes in ownership interests in subsidiaries without losing control |  |                                             |       |  |                 |   | (4,305 | )                 |  |   |               |   |  |                                     |         |   |       |   |        |                          |  |   | (4,305  | ) |  |   | (1,429 | ) |  |   | (5,734  | )
|Others                                                                |  |                                             |       |  |                 |   | (89    | )                 |  |   |               |   |  |                                     |         |   |       |   |        |                          |  |   | (89     | ) |  |   | 1      |   |  |   | (88     | )
|                                                                      |  |                                             |       |  |                 |   |        |                   |  |   |               |   |  |                                     |         |   |       |   |        |                          |  |   |         |   |  |   |        |   |  |   |         |  
|Total                                                                 |  |                                             | 78    |  |                 |   | (4,316 | )                 |  |   | (50,433       | ) |  |                                     |         |   |       |   |        |                          |  |   | (54,671 | ) |  |   | 53,377 |   |  |   | (1,294  | )
|                                                                      |  |                                             |       |  |                 |   |        |                   |  |   |               |   |  |                                     |         |   |       |   |        |                          |  |   |         |   |  |   |        |   |  |   |         |  
|                                                                      |  |                                             |       |  |                 |   |        |                  
|BALANCE AT MARCH 31, 2016 (UNAUDITED)                                 |  | ¥                                           | 8,359 |  |                 | ¥ | (3,081 | )                 |  | ¥ | 827,024       |   |  | ¥                                   | (1,316  | ) |       | ¥ | 13,180 |                          |  | ¥ | 844,166 |   |  | ¥ | 68,598 |   |  | ¥ | 912,764 |  
|                                                                      |  |                                             |       |  |                 |   |        |                   |  |   |               |   |  |                                     |         |   |       |   |        |                          |  |   |         |   |  |   |        |   |  |   |         |  



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



---

Yahoo Japan Corporation and Subsidiaries

Consolidated Statements of Changes in Equity





|                                                                      |  |                                             |        |  |                 |   |         |                   |  |   |               |   |  |                                     |         |   |       |   |         |                          |  |   |           |   |  |   |         |   |  |   |           |  
|--------------------------------------------------------------------- |  | ------------------------------------------- | ------ |  | --------------- | - | ------- | ----------------- |  | - | ------------- | - |  | ----------------------------------- | ------- | - | ----- | - | ------- | ------------------------ |  | - | --------- | - |  | - | ------- | - |  | - | --------- | -
|                                                                      |  | Thousands of U.S. Dollars (Note 2(3))       |       
|                                                                      |  | Equity Attributable to Owners of the Parent |        |  |                 |   |         |                   | 
|                                                                      |  | CommonStock                                 |        |  | Capital Surplus |   |         | Retained Earnings |  |   | TreasuryStock |   |  | AccumulatedOtherComprehensiveIncome |         |   | Total |   |         | Non-controllingInterests |  |   | Total     |  
|                                                                      |  |                                             |        |  |                 |   |         |                  
|BALANCE AT MARCH 31, 2015 (UNAUDITED)                                 |  | $                                           | 73,492 |  |                 | $ | 10,960  |                   |  | $ | 6,264,111     |   |  | $                                   | (11,679 | ) |       | $ | 106,159 |                          |  | $ | 6,443,043 |   |  | $ | 129,144 |   |  | $ | 6,572,187 |  
|                                                                      |  |                                             |        |  |                 |   |         |                   |  |   |               |   |  |                                     |         |   |       |   |         |                          |  |   |           |   |  |   |         |   |  |   |           |  
|                                                                      |  |                                             |        |  |                 |   |         |                  
|Profit for the year                                                   |  |                                             |        |  |                 |   |         |                   |  |   | 1,523,048     |   |  |                                     |         |   |       |   |         |                          |  |   | 1,523,048 |   |  |   | 7,765   |   |  |   | 1,530,813 |  
|Other comprehensive income, net of tax                                |  |                                             |        |  |                 |   |         |                   |  |   |               |   |  |                                     |         |   |       |   | 10,809  |                          |  |   | 10,809    |   |  |   | (1,828  | ) |  |   | 8,981     |  
|                                                                      |  |                                             |        |  |                 |   |         |                   |  |   |               |   |  |                                     |         |   |       |   |         |                          |  |   |           |   |  |   |         |   |  |   |           |  
|Total comprehensive income for the year                               |  |                                             |        |  |                 |   |         |                   |  |   | 1,523,048     |   |  |                                     |         |   |       |   | 10,809  |                          |  |   | 1,533,857 |   |  |   | 5,937   |   |  |   | 1,539,794 |  
|                                                                      |  |                                             |        |  |                 |   |         |                   |  |   |               |   |  |                                     |         |   |       |   |         |                          |  |   |           |   |  |   |         |   |  |   |           |  
|Issue of common stock (Note 22)                                       |  |                                             | 692    |  |                 |   | 692     |                   |  |   |               |   |  |                                     |         |   |       |   |         |                          |  |   | 1,384     |   |  |   |         |   |  |   | 1,384     |  
|Payment of dividends (Note 23)                                        |  |                                             |        |  |                 |   |         |                   |  |   | (447,578      | ) |  |                                     |         |   |       |   |         |                          |  |   | (447,578  | ) |  |   | (6,717  | ) |  |   | (454,295  | )
|Changes attributable to obtaining or losing control of subsidiaries   |  |                                             |        |  |                 |   |         |                   |  |   |               |   |  |                                     |         |   |       |   |         |                          |  |   |           |   |  |   | 493,095 |   |  |   | 493,095   |  
|Changes in ownership interests in subsidiaries without losing control |  |                                             |        |  |                 |   | (38,205 | )                 |  |   |               |   |  |                                     |         |   |       |   |         |                          |  |   | (38,205   | ) |  |   | (12,682 | ) |  |   | (50,887   | )
|Others                                                                |  |                                             |        |  |                 |   | (790    | )                 |  |   |               |   |  |                                     |         |   |       |   |         |                          |  |   | (790      | ) |  |   | 9       |   |  |   | (781      | )
|                                                                      |  |                                             |        |  |                 |   |         |                   |  |   |               |   |  |                                     |         |   |       |   |         |                          |  |   |           |   |  |   |         |   |  |   |           |  
|Total                                                                 |  |                                             | 692    |  |                 |   | (38,303 | )                 |  |   | (447,578      | ) |  |                                     |         |   |       |   |         |                          |  |   | (485,189  | ) |  |   | 473,705 |   |  |   | (11,484   | )
|                                                                      |  |                                             |        |  |                 |   |         |                   |  |   |               |   |  |                                     |         |   |       |   |         |                          |  |   |           |   |  |   |         |   |  |   |           |  
|                                                                      |  |                                             |        |  |                 |   |         |                  
|BALANCE AT MARCH 31, 2016 (UNAUDITED)                                 |  | $                                           | 74,184 |  |                 | $ | (27,343 | )                 |  | $ | 7,339,581     |   |  | $                                   | (11,679 | ) |       | $ | 116,968 |                          |  | $ | 7,491,711 |   |  | $ | 608,786 |   |  | $ | 8,100,497 |  
|                                                                      |  |                                             |        |  |                 |   |         |                   |  |   |               |   |  |                                     |         |   |       |   |         |                          |  |   |           |   |  |   |         |   |  |   |           |  

See notes to consolidated financial statements.



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



---

Yahoo Japan Corporation and Subsidiaries

Consolidated Statements of Cash Flows





|                                                                                |  |                    |          |   |                                      |   |         |      |  |   |           |   |  |   |           |  
|------------------------------------------------------------------------------- |  | ------------------ | -------- | - | ------------------------------------ | - | ------- | ---- |  | - | --------- | - |  | - | --------- | -
|                                                                                |  | Millions of Yen    |          |   | Thousands of U.S. Dollars(Note 2(3)) |  
|                                                                                |  | Year EndedMarch 31 |          |   | Year EndedMarch 31,                  |  
|                                                                                |  | 2016               |          |   | 2015                                 |   |         | 2014 |  |   | 2016      |  
|                                                                                |  | Unaudited          |          |   | Unaudited                            |   |         |      |  |   | Unaudited |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                           |  |                    |          |   |                                      |   |         |      |  |   |           |   |  |   |           |  
|Profit before tax                                                               |  | ¥                  | 226,585  |   |                                      | ¥ | 208,299 |      |  | ¥ | 208,225   |   |  | $ | 2,010,871 |  
|Depreciation and amortization                                                   |  |                    | 30,698   |   |                                      |   | 16,936  |      |  |   | 13,452    |   |  |   | 272,435   |  
|Gain on remeasurement of investments in associates acquired in stages (Note 30) |  |                    |          |   |                                      |   | (6,249  | )    |  |   |           |   |  |   |           |  
|Gain from remeasurement relating to business combinations (Note 5)              |  |                    | (59,696  | ) |                                      |   |         |      |  |   |           |   |  |   | (529,783  | )
|Increase in trade and other receivables                                         |  |                    | (39,866  | ) |                                      |   | (22,536 | )    |  |   | (16,326   | ) |  |   | (353,798  | )
|Increase in trade and other payables                                            |  |                    | 40,523   |   |                                      |   | 15,800  |      |  |   | 21,207    |   |  |   | 359,629   |  
|Increase (decrease) in consumption taxes payable                                |  |                    | (9,384   | ) |                                      |   | 8,425   |      |  |   | 1,368     |   |  |   | (83,280   | )
|Increase in other financial assets                                              |  |                    | (4,878   | ) |                                      |   | (3,574  | )    |  |   | (2,957    | ) |  |   | (43,291   | )
|Increase (decrease) in other financial liabilities                              |  |                    | (5,323   | ) |                                      |   | 3,962   |      |  |   | (539      | ) |  |   | (47,240   | )
|Gain on sale of available-for-sale financial assets                             |  |                    | (1,512   | ) |                                      |   | (511    | )    |  |   | (11,742   | ) |  |   | (13,419   | )
|Others                                                                          |  |                    | (5,376   | ) |                                      |   | (11,122 | )    |  |   | (3,369    | ) |  |   | (47,710   | )
|                                                                                |  |                    |          |   |                                      |   |         |      |  |   |           |   |  |   |           |  
|Subtotal                                                                        |  |                    | 171,771  |   |                                      |   | 209,430 |      |  |   | 209,319   |   |  |   | 1,524,414 |  
|Income taxespaid                                                               |  |                    | (66,362  | ) |                                      |   | (83,190 | )    |  |   | (76,526   | ) |  |   | (588,942  | )
|                                                                                |  |                    |          |   |                                      |   |         |      |  |   |           |   |  |   |           |  
|                                                                                |  |                    |          |  
|Net cash generated by operating activities                                      |  |                    | 105,409  |   |                                      |   | 126,240 |      |  |   | 132,793   |   |  |   | 935,472   |  
|                                                                                |  |                    |          |   |                                      |   |         |      |  |   |           |   |  |   |           |  
|                                                                                |  |                    |          |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                           |  |                    |          |   |                                      |   |         |      |  |   |           |   |  |   |           |  
|Payment into time deposits                                                      |  |                    |          |   |                                      |   |         |      |  |   | (50,000   | ) |  |   |           |  
|Withdrawal of time deposits                                                     |  |                    | 500      |   |                                      |   | 30      |      |  |   | 54,200    |   |  |   | 4,437     |  
|Purchase of property and equipment                                              |  |                    | (29,255  | ) |                                      |   | (17,096 | )    |  |   | (19,748   | ) |  |   | (259,629  | )
|Purchase of intangible assets                                                   |  |                    | (9,089   | ) |                                      |   | (7,284  | )    |  |   | (2,974    | ) |  |   | (80,662   | )
|Purchase of other investments                                                   |  |                    | (17,344  | ) |                                      |   | (20,977 | )    |  |   | (7,032    | ) |  |   | (153,923  | )
|Net cash outflow on obtaining control of subsidiaries (Notes 5 and 33)          |  |                    | (92,832  | ) |                                      |   | (21,762 | )    |  |   | (2,036    | ) |  |   | (823,855  | )
|Net cash inflow on obtaining control of subsidiaries (Note 5)                   |  |                    | 31,323   |   |                                      |   | 60      |      |  |   |           |   |  |   | 277,982   |  
|Proceeds from sale of available-for-sale financial assets                       |  |                    | 2,177    |   |                                      |   | 2,161   |      |  |   | 18,606    |   |  |   | 19,320    |  
|Others                                                                          |  |                    | 3,982    |   |                                      |   | (2,997  | )    |  |   | 1,709     |   |  |   | 35,340    |  
|                                                                                |  |                    |          |   |                                      |   |         |      |  |   |           |   |  |   |           |  
|                                                                                |  |                    |          |  
|Net cash used in investing activities                                           |  |                    | (110,538 | ) |                                      |   | (67,865 | )    |  |   | (7,275    | ) |  |   | (980,990  | )
|                                                                                |  |                    |          |   |                                      |   |         |      |  |   |           |   |  |   |           |  
|                                                                                |  |                    |          |  
|FORWARD                                                                         |  | ¥                  | (5,129   | ) |                                      | ¥ | 58,375  |      |  | ¥ | 125,518   |   |  | $ | (45,518   | )
|                                                                                |  |                    |          |   |                                      |   |         |      |  |   |           |   |  |   |           |  



| |  |   |  |            
| |  | - |  | -----------
| |  | 8 |  | (Continued)



---

Yahoo Japan Corporation and Subsidiaries

Consolidated Statements of Cash Flows







|                                                                                    |  |                    |         |   |                                     |   |         |      |  |   |           |   |  |   |           |  
|----------------------------------------------------------------------------------- |  | ------------------ | ------- | - | ----------------------------------- | - | ------- | ---- |  | - | --------- | - |  | - | --------- | -
|                                                                                    |  | Millions of Yen    |         |   | Thousands ofU.S. Dollars(Note 2(3)) |  
|                                                                                    |  | Year EndedMarch 31 |         |   | Year EndedMarch 31,                 |  
|                                                                                    |  | 2016               |         |   | 2015                                |   |         | 2014 |  |   | 2016      |  
|                                                                                    |  | Unaudited          |         |   | Unaudited                           |   |         |      |  |   | Unaudited |  
|                                                                                    |  |                    |         |  
|FORWARD                                                                             |  | ¥                  | (5,129  | ) |                                     | ¥ | 58,375  |      |  | ¥ | 125,518   |   |  | $ | (45,518   | )
|                                                                                    |  |                    |         |   |                                     |   |         |      |  |   |           |   |  |   |           |  
|                                                                                    |  |                    |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                               |  |                    |         |   |                                     |   |         |      |  |   |           |   |  |   |           |  
|Repayment of long-term bank loans                                                   |  |                    | (1,441  | ) |                                     |   | (5,450  | )    |  |   |           |   |  |   | (12,788   | )
|Payment for acquisition of interests in a subsidiary from non-controlling interests |  |                    | (196    | ) |                                     |   | (5,187  | )    |  |   |           |   |  |   | (1,739    | )
|Purchase of treasury stock                                                          |  |                    |         |   |                                     |   | (795    | )    |  |   | (30,000   | ) |  |   |           |  
|Dividends paid                                                                      |  |                    | (50,399 | ) |                                     |   | (25,205 | )    |  |   | (23,035   | ) |  |   | (447,275  | )
|Others                                                                              |  |                    | 2,678   |   |                                     |   | (530    | )    |  |   | (94       | ) |  |   | 23,765    |  
|                                                                                    |  |                    |         |   |                                     |   |         |      |  |   |           |   |  |   |           |  
|                                                                                    |  |                    |         |  
|Net cash used in financing activities                                               |  |                    | (49,358 | ) |                                     |   | (37,167 | )    |  |   | (53,129   | ) |  |   | (438,037  | )
|                                                                                    |  |                    |         |   |                                     |   |         |      |  |   |           |   |  |   |           |  
|                                                                                    |  |                    |         |  
|EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS                       |  |                    | (285    | ) |                                     |   | 392     |      |  |   | 360       |   |  |   | (2,529    | )
|                                                                                    |  |                    |         |   |                                     |   |         |      |  |   |           |   |  |   |           |  
|                                                                                    |  |                    |         |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                |  |                    | (54,772 | ) |                                     |   | 21,600  |      |  |   | 72,749    |   |  |   | (486,084  | )
|                                                                                    |  |                    |         |  
|CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR (Note 7)                     |  |                    | 503,937 |   |                                     |   | 482,337 |      |  |   | 409,588   |   |  |   | 4,472,284 |  
|                                                                                    |  |                    |         |   |                                     |   |         |      |  |   |           |   |  |   |           |  
|                                                                                    |  |                    |         |  
|CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR (Note 7)                           |  | ¥                  | 449,165 |   |                                     | ¥ | 503,937 |      |  | ¥ | 482,337   |   |  | $ | 3,986,200 |  
|                                                                                    |  |                    |         |   |                                     |   |         |      |  |   |           |   |  |   |           |  

See notes to consolidated financial statements.



| |  |   |  |            
| |  | - |  | -----------
| |  | 9 |  | (Concluded)



---

Yahoo Japan Corporation and 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. SoftBank Group Corp. is also the ultimate parent company of the Company and its subsidiaries (collectively, the 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
| | --- | -----------------------------------------------------------

The
accompanying consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (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 ¥112.68 to U.S.$1, the approximate rate of exchange at March 31, 2016. 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 or 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 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.



| | 1) | Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations
| | -- | ------------------------------------------------------------------------------------



| | (a) | Mandatory adoption (for annual periods beginning on or after)
| | --- | -------------------------------------------------------------

January 1, 2016



| | (b) | Scheduled date of initial application
| | --- | -------------------------------------

April 1, 2016



10



---

| | (c) | Outline of the new or revised standards and interpretations
| | --- | -----------------------------------------------------------

The amendments to IFRS 11
provide guidance on how to account for the acquisition of a joint operation that constitutes a business as defined in IFRS 3 Business Combinations. Specifically, the amendments state that the relevant principles on
accounting for business combinations in IFRS 3 and other standards should be applied. The same requirements should be applied to the formation of a joint operation if and only if an existing business is contributed to the joint operation by one
of the parties that participate in the joint operation.



| | 2) | Amendments to International Accounting Standard (IAS) 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortization
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | Mandatory adoption (for annual periods beginning on or after)
| | --- | -------------------------------------------------------------

January 1, 2016



| | (b) | Scheduled date of initial application
| | --- | -------------------------------------

April 1, 2016



| | (c) | Outline of the new or revised standards and interpretations
| | --- | -----------------------------------------------------------

The amendments to IAS 16
prohibit entities from using a revenue-based depreciation method for items of property, plant and equipment. The amendments to IAS 38 introduce a rebuttable presumption that revenue is not an appropriate
basis for amortization of an intangible asset. This presumption can only be rebutted in the following two limited circumstances: (i) when the intangible asset is expressed as a measure of revenue; or (ii) when it can be demonstrated that
revenue and consumption of the economic benefits of the intangible asset are highly correlated.



| | 3) | Amendments to IAS 7 Statement of Cash Flows
| | -- | ---------------------------------------------



| | (a) | Mandatory adoption (for annual periods beginning on or after)
| | --- | -------------------------------------------------------------

January 1, 2017



| | (b) | Scheduled date of initial application
| | --- | -------------------------------------

April 1, 2017



| | (c) | Outline of the new or revised standards and interpretations
| | --- | -----------------------------------------------------------

The amendments to IAS 7
require entities to disclose the following changes in liabilities arising from financing activities (to the extent necessary): (i) changes from financing cash flows; (ii) changes arising from obtaining or losing control of subsidiaries or
other businesses; (iii) the effect of changes in foreign exchange rates; (iv) changes in fair values; and (v) other changes.



| | 4) | IFRS 9 Financial Instruments
| | -- | ------------------------------



| | (a) | Mandatory adoption (for annual periods beginning on or after)
| | --- | -------------------------------------------------------------

January 1, 2018



11



---

| | (b) | Scheduled date of initial application
| | --- | -------------------------------------

April 1, 2018



| | (c) | Outline of the new or revised standards and interpretations
| | --- | -----------------------------------------------------------

IFRS 9 replaces a part of
the previous IAS 39. Main revisions to the previous IAS 39 are:



| | (i) | to revise classification into measurement categories of financial instruments (amortized costs and fair values) and measurement;
| | --- | --------------------------------------------------------------------------------------------------------------------------------



| | (ii) | to revise the treatment of changes in fair values of financial liabilities measured at fair values;
| | ---- | ---------------------------------------------------------------------------------------------------



| | (iii) | to revise the eligibility requirement of hedged items and hedging instruments, and requirements related to the effectiveness of the hedge; and
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | to revise the measurement approach for impairment by introducing an impairment model based on the expected credit loss.
| | ---- | -----------------------------------------------------------------------------------------------------------------------



| | 5) | IFRS 15 Revenue from Contracts with Customers
| | -- | -----------------------------------------------



| | (a) | Mandatory adoption (for annual periods beginning on or after)
| | --- | -------------------------------------------------------------

January 1, 2018



| | (b) | Scheduled date of initial application
| | --- | -------------------------------------

April 1, 2018



| | (c) | Outline of the new or revised standards and interpretations
| | --- | -----------------------------------------------------------

The core principle of
IFRS 15, which replaces a part of the previous IAS 11 Construction Contracts and IAS 18 Revenue, is that an entity should recognize revenue to depict the transfer of promised goods
or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the Standard introduces a 5-step approach
to revenue recognition:

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.



| | 6) | IFRS 16 Leases
| | -- | ----------------



| | (a) | Mandatory adoption (for annual periods beginning on or after)
| | --- | -------------------------------------------------------------

January 1, 2019



| | (b) | Scheduled date of initial application
| | --- | -------------------------------------

April 1, 2019



12



---

| | (c) | Outline of the new or revised standards and interpretations
| | --- | -----------------------------------------------------------

Under IFRS 16, which
replaces IAS 17 Leases, a lessee is required to recognize a right-of-use asset and a lease liability. The
right-of-use asset is treated similarly to other non-financial assets and depreciated accordingly and the liability accrues
interest. This will typically produce a front-loaded expense profile (whereas operating leases under IAS 17 would typically have had straight-line expenses) as an
assumed linear depreciation of the right-of-use asset and the decreasing interest on the liability will lead to an overall decrease of expense over the reporting period.

The lease liability is initially measured at the present value of the lease payments payable over the lease term, discounted at the rate
implicit in the lease if that rate can be readily determined. If that rate cannot be readily determined, the lessee shall use their incremental borrowing rate.



| | (5) | Reclassifications
| | --- | -----------------

Certain comparative amounts have been
reclassified to conform to the current year presentation.



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

The following accounting policies have been applied
consistently to all periods presented in these consolidated financial statements, 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 (subsidiaries). 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.

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 parent 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 parent. 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.



13



---

| | 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.

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.



| | 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.



14



---

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.

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.



15



---

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 respective companys 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.



| | (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.



16



---

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



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

Non-derivative 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 calculated based on the effective
interest method 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.
| | --- | -------------------------------------------------------------------------------------------------------------------------

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.



17



---

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 difference
between the carrying amount of a financial asset derecognized and the consideration received is recognized in profit or loss. 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.



18



---

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) | Inventories
| | --- | -----------

Inventories are measured at the lower of cost and net
realizable value. Costs of inventories are determined primarily by using the moving-average method. Net realizable value represents the estimated selling price for inventories in the ordinary course of
business less all estimated costs of completion and costs necessary to make the sale. Inventories of the Group mainly comprise merchandise.



| | (6) | 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.



19



---

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.



| | (7) | 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 indefinite 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.

Expenditures for research activities are 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 expenditures 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. Certain trademarks that have been assessed as having indefinite useful lives are not amortized because the Group expects to continue to benefit from the trademarks as
long as the related businesses continue to operate.



20



---

| | (8) | 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 a 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.



| | (9) | 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.

Intangible assets with indefinite useful lives
and intangible assets not yet available for use are tested annually for impairment or whenever there is an indication that the asset may be impaired.

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.



21



---

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.



| | (10) | 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 and 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 customer point reward programs
| | -- | --------------------------------------------

In anticipation of the future use of
points granted to customers as sales promotion under its point reward programs, 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.



| | (11) | Share-Based Payments
| | ---- | --------------------

The
Company has an equity-settled share option plan 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 share 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 share options that are expected to vest, and revises them when necessary.



22



---

| | (12) | Revenue
| | ---- | -------

Revenue of the Group mainly consists of providing
services and sale of goods. Revenue from providing services comprises paid search advertising, display advertising, commission fees related to e-commerce such as YAHUOKU!, and membership fees such as Yahoo!
Premium. Revenue from the sale of goods mainly consists of sale of office-related goods by the Companys subsidiaries such as ASKUL Corporation (ASKUL).

Revenue from providing services is recognized based on the stage of completion of transactions at the end of each reporting period. Revenue
from paid search advertising 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. Revenue from the sale of goods is recognized
when the goods are delivered and titles have passed, at which time all the following conditions are satisfied: (1) the Group has transferred to the buyer the significant risks and rewards of ownership of the goods; (2) the Group retains
neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; (3) it is probable that the economic benefits associated with the transaction will flow to the Group; and
(4) the amount of revenue and the costs incurred or to be incurred in respect of the transaction can be measured reliably.



| | (13) | Retirement Benefits
| | ---- | -------------------

The Group primarily participates in defined
contribution 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.



| | (14) | Income Tax
| | ---- | ----------

Income tax expense comprises 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.



| | 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.



23



---

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.



| | (15) | 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.



| | (16) | Earnings per Share
| | ---- | ------------------

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

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



|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.



24



---

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 estimating uncertainty at the end of the reporting
period, that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the current and next financial year:



| |  |  | Estimates regarding impairment of property and equipment, goodwill and intangible assets (Note 3. Significant accounting policies (1) and (9) and Note 12. Goodwill and intangible
assets)
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Estimates 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)
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Estimates of useful life and residual value of property and equipment and intangible assets (Note 3. Significant accounting policies (6) and (7))
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Judgments and estimates regarding recognition and measurement of provisions (Note 3. Significant accounting policies (10) and Note 17. Provisions)
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Fair value of share options (Note 3. Significant accounting policies (11) and Note 24. Share-based payment)
| | - |  | ---------------------------------------------------------------------------------------------------------------



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



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

For the Year Ended March 31, 2016
(Unaudited)

Significant business combinations occurring in the year ended March 31, 2016 are as follows:

ASKUL Corporation



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

ASKUL, previously an associate of the Company whose
principal activity is mail order delivery of stationery and other products, became a subsidiary of the Company on August 27, 2015 (the acquisition date) as a result of the repurchase of its own shares (treasury shares) following the resolution
made at the meeting of ASKULs board of directors held on May 19, 2015. The percentage of the Companys voting rights of ASKUL increased from 41.7% as of May 20, 2015 to 44.4% after the repurchase of the treasury shares. The
Company did not and does not have a majority of the voting rights before and following this transaction; however, the Company determined that it now has the practical ability to direct the relevant activities unilaterally and therefore has control
over ASKUL and accounts for ASKUL as a subsidiary after considering all facts and circumstances including the widely dispersed holdings of voting rights among shareholders and the voting patterns at previous ASKUL shareholders meetings.



25



---

As a result of remeasurement of the Companys previously held equity interests in ASKUL at
fair value as of the acquisition date, the Company recognized ¥59,696 million ($529,783 thousand) of a gain from remeasurement relating to the business combination acquired in stages. This gain is presented as Gain from
remeasurement relating to business combinations in the consolidated statement of profit or loss.



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



|              |  |                                                     
|------------- |  | ----------------------------------------------------
|Company name: |  | ASKUL Corporation                                   
|Businesses:   |  | Mail order delivery of stationery and other products



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

August 27, 2015



| | (4) | Fair value of the Companys previously held interests, acquired assets and assumed liabilities, and non-controlling interests and goodwill, as of the acquisition date
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                       |  |                 |         |   |                             |   |          |  
|------------------------------------------------------ |  | --------------- | ------- | - | --------------------------- | - | -------- | -
|                                                       |  | Millions of Yen |         |   | Thousands of   U.S. Dollars |  
|                                                       |  |                
|Fair value of the Companys previously held interests  |  | ¥               | 93,611  |   |                             | $ | 830,769  |  
|                                                       |  |                 |         |   |                             |   |          |  
|                                                       |  |                
|Fair value of acquired assets and assumed liabilities: |  |                 |         |   |                             |   |          |  
|Current assets:                                        |  |                 |         |   |                             |   |          |  
|Cash and cash equivalents                              |  | ¥               | 31,292  |   |                             | $ | 277,707  |  
|Trade and other receivables                            |  |                 | 45,365  |   |                             |   | 402,600  |  
|Others                                                 |  |                 | 13,459  |   |                             |   | 119,445  |  
|                                                       |  |                
|Non-current assets:                                    |  |                 |         |   |                             |   |          |  
|Property and equipment                                 |  |                 | 32,315  |   |                             |   | 286,786  |  
|Intangible assets                                      |  |                 | 69,124  |   |                             |   | 613,454  |  
|Others                                                 |  |                 | 8,394   |   |                             |   | 74,494   |  
|                                                       |  |                
|Current liabilities:                                   |  |                 |         |   |                             |   |          |  
|Trade and other payables                               |  |                 | (56,772 | ) |                             |   | (503,834 | )
|Others                                                 |  |                 | (14,723 | ) |                             |   | (130,662 | )
|                                                       |  |                
|Non-current liabilities                                |  |                 | (34,586 | ) |                             |   | (306,940 | )
|                                                       |  |                 |         |   |                             |   |          |  
|Equity                                                 |  |                 | 93,868  |   |                             |   | 833,050  |  
|                                                       |  |                
|Non-controlling interests (Note 1)                     |  |                 | (54,036 | ) |                             |   | (479,553 | )
|                                                       |  |                
|Goodwill (Note 2)                                      |  |                 | 53,779  |   |                             |   | 477,272  |  
|                                                       |  |                 |         |   |                             |   |          |  
|                                                       |  |                
|Total                                                  |  | ¥               | 93,611  |   |                             | $ | 830,769  |  
|                                                       |  |                 |         |   |                             |   |          |  

Notes:



| | 1. | Non-controlling interests
| | -- | -------------------------

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



26



---

| | 2. | Goodwill
| | -- | --------

Goodwill reflects excess earning power expected from the future business
development and the synergies generated between the Group and the acquiree.



| | (5) | Revenue and profit of the acquiree on and after the acquisition date
| | --- | --------------------------------------------------------------------

The amounts of
ASKULs revenue and profit on and after the acquisition date, which are recorded in the consolidated statement of profit and loss for the year ended March 31, 2016, are ¥189,014 million ($1,677,441 thousand) and
¥2,971 million ($26,367 thousand), respectively. In addition, the above profit includes amortization expenses, which are related to intangible assets recognized at the acquisition date, and others.

Ikyu Corporation



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

The Company resolved at its board of directors meeting
held on December 15, 2015 to acquire common stock of Ikyu Corporation (Ikyu) through a tender offer. The tender offer period ended on February 3, 2016 and the Company acquired 27,480,682 shares (representing 94.3% of voting
rights) of Ikyu at a cost of ¥94,341 million ($837,247 thousand) in cash. As a result, Ikyu became a subsidiary of the Company.



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



|              |  |                                                                                                      
|------------- |  | -----------------------------------------------------------------------------------------------------
|Company name: |  | Ikyu Corporation                                                                                     
|Businesses:   |  | Operation of various websites that provide reservation services for hotels and restaurants and others



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

February 3, 2016



| | (4) | Fair value of acquired assets and assumed liabilities, and non-controlling interests and goodwill, as of the acquisition date
| | --- | -----------------------------------------------------------------------------------------------------------------------------



|                                                       |  |                 |        |   |                             |   |         |  
|------------------------------------------------------ |  | --------------- | ------ | - | --------------------------- | - | ------- | -
|                                                       |  | Millions of Yen |        |   | Thousands of   U.S. Dollars |  
|                                                       |  |                
|Fair value of considerationCash                       |  | ¥               | 94,341 |   |                             | $ | 837,247 |  
|                                                       |  |                 |        |   |                             |   |         |  
|                                                       |  |                
|Fair value of acquired assets and assumed liabilities: |  |                 |        |   |                             |   |         |  
|Current assets                                         |  | ¥               | 8,934  |   |                             | $ | 79,286  |  
|Non-current assets (Note 1)                            |  |                 | 27,314 |   |                             |   | 242,403 |  
|Current liabilities                                    |  |                 | (4,270 | ) |                             |   | (37,895 | )
|Non-current liabilities                                |  |                 | (8,178 | ) |                             |   | (72,576 | )
|                                                       |  |                 |        |   |                             |   |         |  
|Equity                                                 |  |                 | 23,800 |   |                             |   | 211,218 |  
|Non-controlling interests (Note 2)                     |  |                 | (1,503 | ) |                             |   | (13,339 | )
|Goodwill (Note 3)                                      |  |                 | 72,044 |   |                             |   | 639,368 |  
|                                                       |  |                 |        |   |                             |   |         |  
|                                                       |  |                
|Total                                                  |  | ¥               | 94,341 |   |                             | $ | 837,247 |  
|                                                       |  |                 |        |   |                             |   |         |  



27



---

Notes:



| | 1. | Details of acquired assets
| | -- | --------------------------

Non-current assets
include ¥26,183 million ($232,366 thousand) of intangible assets.



| | 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 synergies generated between the Group and the acquiree.



| | (5) | Revenue and profit of the acquiree on and after the acquisition date
| | --- | --------------------------------------------------------------------

Information about
operating results on and after the acquisition date is not presented because the impact on the consolidated financial statements is not significant.

Pro forma Information (Unaudited)

Pro forma information of consolidated performance of the Company, assuming that the business combinations above were completed and control was
obtained as of April 1, 2014, is not presented because the impact on the consolidated financial statements is not significant. Pro forma consolidated sales and pro forma profit for the year ended March 31, 2016, assuming that the business
combinations were completed and control was obtained as of April 1, 2015, are ¥776,974 million ($6,895,403 thousand) and ¥173,291 million ($1,537,904 thousand), respectively. Amortization expenses of intangible
assets newly recognized on the acquisition date and others have been reflected in the pro forma information above.

For
the Year Ended March 31, 2015 (Unaudited)

A significant business combination which occurred in the year ended
March 31, 2015 was as follows:

YJ Card Corporation



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

The Company acquired 65.0% 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 consolidated YJ Card Corporation 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



28



---

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

January 5, 2015



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



|                                                       |  |                 |         |  
|------------------------------------------------------ |  | --------------- | ------- | -
|                                                       |  | Millions of Yen |        
|                                                       | 
|Fair value of considerationCash                       |  | ¥               | 23,228  |  
|                                                       |  |                 |         |  
|                                                       | 
|Fair value of acquired assets and assumed liabilities: |  |                 |         |  
|Current assets (Note 1)                                |  | ¥               | 42,841  |  
|Non-current assets                                     |  |                 | 16,709  |  
|Current liabilities (Note 1)                           |  |                 | (7,306  | )
|Non-current liabilities (Note 1)                       |  |                 | (29,439 | )
|                                                       |  |                 |         |  
|Equity                                                 |  |                 | 22,805  |  
|Non-controlling interests (Note 2)                     |  |                 | (7,982  | )
|Goodwill (Note 3)                                      |  |                 | 8,405   |  
|                                                       |  |                 |         |  
|                                                       | 
|Total                                                  |  | ¥               | 23,228  |  
|                                                       |  |                 |         |  

Notes:



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

Current assets include ¥32,849 million of
trade loans receivable. Current and non-current liabilities include ¥24,081 million 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 synergies generated between the Group and the acquiree.



| | (5) | Revenue and profit of the acquiree on and after the acquisition date
| | --- | --------------------------------------------------------------------

Information about
operating results on and after the acquisition date is not presented because the impact on the consolidated financial statements was not significant.

For the Year Ended March 31, 2014

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



29



---

|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 three operating segments: shopping, YAHUOKU! and personal. These
operating segments share similar business characteristics as they operate (1) sales of products and (2) planning and sales of services, both provided via the Internet, for small to medium-sized
businesses and individual customers. In addition, considering the transaction volume and other economic indices, the Company determined that these operating segments also share similar economic characteristics. Therefore, these three segments are
aggregated into the reportable segment.

Because the Company consolidated ASKUL beginning with the
three-month period ended September 30, 2015, operating results of ASKUL on and after the acquisition date and ¥59,696 million ($529,783 thousand) (unaudited) of gain from remeasurement
relating to business combinations are included in the consumer business segment. (Please refer to Note 5. Business combinations.) Other business consists of operating segments that are not included in the reportable segments and
includes settlement- and finance-related services and cloud-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 corporate expenses not allocable to a reportable segment. Corporate expenses consist primarily of general and administrative
expenses that are not attributable to reportable segments. Intersegment sales are based on prevailing market prices.

Effective
April 1, 2015, the Group changed its basis of segmentation by transferring its services and subsidiaries among segments in order to provide services more effectively and to respond to the changing market more rapidly. Specifically, 1) game-related and real estate-related services, which were included in the marketing solutions business, were transferred into the consumer business, and 2) cloud-related services including IDC Frontier Inc. and FirstServer, Inc., both subsidiaries of the Company, were transferred from the marketing solutions business to other business.

Effective October 1, 2015, ValueCommerce Co., Ltd., a subsidiary, was transferred from the marketing solutions business to the consumer
business.

Consequently, segment information for the years ended March 31, 2015 and 2014, is restated in accordance with the new
basis of segmentation.



30



---

Segment information of the Group as of and for the year ended March 31, 2016 (unaudited), is
as follows:



|                                                     |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   |           |  
|---------------------------------------------------- |  | -------------------------- | --------- |  | ---------------- | - | --------- | ----- |  | - | ------------- |  |  | -------------- | ------- |  | ------------ | - | -------- | - |  | - | --------- | -
|                                                     |  | Millions of Yen            |          
|                                                     |  | Reportable Segments        |           |  |                  |   |           |       |  |   |               | 
|                                                     |  | MarketingSolutionsBusiness |           |  | ConsumerBusiness |   |           | Total |  |   | OtherBusiness |  |  | Reconciliation |         |  | Consolidated |  
|                                                     | 
|Revenue:                                             |  |                            |           | 
|Sales to customers                                   |  | ¥                          | 274,953   |  |                  | ¥ | 320,892   |       |  | ¥ | 595,845       |  |  | ¥              | 56,482  |  |              |   |          |   |  | ¥ | 652,327   |  
|Intersegment sales                                   |  |                            | 2,376     |  |                  |   | 5,464     |       |  |   | 7,840         |  |  |                | 3,745   |  |              | ¥ | (11,585  | ) |  |   |           |  
|                                                     |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   |           |  
|                                                     |  |                            |           |  |                  |  
|Total sales                                          |  | ¥                          | 277,329   |  |                  | ¥ | 326,356   |       |  | ¥ | 603,685       |  |  | ¥              | 60,227  |  |              | ¥ | (11,585  | ) |  | ¥ | 652,327   |  
|                                                     |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   |           |  
|                                                     |  |                            |           |  |                  |  
|Segment income                                       |  | ¥                          | 144,534   |  |                  | ¥ | 119,590   |       |  | ¥ | 264,124       |  |  | ¥              | 6,558   |  |              | ¥ | (45,684  | ) |  | ¥ | 224,998   |  
|Other non-operating income                           |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   | 3,016     |  
|Other non-operating expenses                         |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   | (2,746    | )
|Equity in earnings of associates and a joint venture |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   | 1,317     |  
|                                                     |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   |           |  
|                                                     |  |                            |           |  |                  |  
|Profit before tax                                    |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  | ¥ | 226,585   |  
|                                                     |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   |           |  
|                                                     |  |                            |           |  |                  |  
|OthersDepreciation and amortization                 |  | ¥                          | 3,614     |  |                  | ¥ | 8,252     |       |  | ¥ | 11,866        |  |  | ¥              | 6,937   |  |              | ¥ | 11,895   |   |  | ¥ | 30,698    |  
|                                                     | 
|                                                     |  | Thousands of U.S. Dollars  |          
|                                                     |  | Reportable Segments        |           |  |                  |   |           |       |  |   |               | 
|                                                     |  | MarketingSolutionsBusiness |           |  | ConsumerBusiness |   |           | Total |  |   | OtherBusiness |  |  | Reconciliation |         |  | Consolidated |  
|                                                     |  |                            |           |  |                  |  
|Revenue:                                             |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   |           |  
|Sales to customers                                   |  | $                          | 2,440,122 |  |                  | $ | 2,847,817 |       |  | $ | 5,287,939     |  |  | $              | 501,261 |  |              |   |          |   |  | $ | 5,789,200 |  
|Intersegment sales                                   |  |                            | 21,087    |  |                  |   | 48,491    |       |  |   | 69,578        |  |  |                | 33,235  |  |              | $ | (102,813 | ) |  |   |           |  
|                                                     |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   |           |  
|                                                     |  |                            |           |  |                  |  
|Total sales                                          |  | $                          | 2,461,209 |  |                  | $ | 2,896,308 |       |  | $ | 5,357,517     |  |  | $              | 534,496 |  |              | $ | (102,813 | ) |  | $ | 5,789,200 |  
|                                                     |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   |           |  
|                                                     |  |                            |           |  |                  |  
|Segment income                                       |  | $                          | 1,282,694 |  |                  | $ | 1,061,324 |       |  | $ | 2,344,018     |  |  | $              | 58,200  |  |              | $ | (405,431 | ) |  | $ | 1,996,787 |  
|Other non-operating income                           |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   | 26,766    |  
|Other non-operating expenses                         |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   | (24,370   | )
|Equity in earnings of associates and a joint venture |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   | 11,688    |  
|                                                     |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   |           |  
|                                                     |  |                            |           |  |                  |  
|Profit before tax                                    |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  | $ | 2,010,871 |  
|                                                     |  |                            |           |  |                  |   |           |       |  |   |               |  |  |                |         |  |              |   |          |   |  |   |           |  
|                                                     |  |                            |           |  |                  |  
|OthersDepreciation and amortization                 |  | $                          | 32,073    |  |                  | $ | 73,234    |       |  | $ | 105,307       |  |  | $              | 61,564  |  |              | $ | 105,564  |   |  | $ | 272,435   |  



31



---

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



|                                                     |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   |         |  
|---------------------------------------------------- |  | -------------------------- | ------- |  | ---------------- | - | ------- | ----- |  | - | -------------- |  |  | -------------- | ------ |  | ------------ | - | ------- | - |  | - | ------- | -
|                                                     |  | Millions of Yen            |        
|                                                     |  | Reportable Segments        |         |  |                  |   |         |       |  |   |                | 
|                                                     |  | MarketingSolutionsBusiness |         |  | ConsumerBusiness |   |         | Total |  |   | Other Business |  |  | Reconciliation |        |  | Consolidated |  
|                                                     |  |                            |         |  |                  |  
|Revenue:                                             |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   |         |  
|Sales to customers                                   |  | ¥                          | 260,273 |  |                  | ¥ | 123,255 |       |  | ¥ | 383,528        |  |  | ¥              | 44,960 |  |              |   |         |   |  | ¥ | 428,488 |  
|Intersegment sales                                   |  |                            | 126     |  |                  |   | 5,384   |       |  |   | 5,510          |  |  |                | 3,269  |  |              | ¥ | (8,779  | ) |  |   |         |  
|                                                     |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   |         |  
|                                                     |  |                            |         |  |                  |  
|Total sales                                          |  | ¥                          | 260,399 |  |                  | ¥ | 128,639 |       |  | ¥ | 389,038        |  |  | ¥              | 48,229 |  |              | ¥ | (8,779  | ) |  | ¥ | 428,488 |  
|                                                     |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   |         |  
|                                                     |  |                            |         |  |                  |  
|Segment income                                       |  | ¥                          | 143,715 |  |                  | ¥ | 68,837  |       |  | ¥ | 212,552        |  |  | ¥              | 15,760 |  |              | ¥ | (31,100 | ) |  | ¥ | 197,212 |  
|Other non-operating income                           |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   | 10,638  |  
|Other non-operating expenses                         |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   | (1,224  | )
|Equity in earnings of associates and a joint venture |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   | 1,673   |  
|                                                     |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   |         |  
|                                                     |  |                            |         |  |                  |  
|Profit before tax                                    |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  | ¥ | 208,299 |  
|                                                     |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   |         |  
|                                                     |  |                            |         |  |                  |  
|OthersDepreciation and amortization                 |  | ¥                          | 2,819   |  |                  | ¥ | 2,134   |       |  | ¥ | 4,953          |  |  | ¥              | 5,106  |  |              | ¥ | 6,877   |   |  | ¥ | 16,936  |  

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                                 |  | ¥                          | 240,291 |  |                  | ¥ | 127,698 |       |  | ¥ | 367,989        |  |  | ¥              | 40,526 |  |              |   |         |   |  | ¥ | 408,515 |  
|Intersegment sales                                 |  |                            | 257     |  |                  |   | 3,375   |       |  |   | 3,632          |  |  |                | 3,057  |  |              | ¥ | (6,689  | ) |  |   |         |  
|                                                   |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   |         |  
|                                                   |  |                            |         |  |                  |  
|Total sales                                        |  | ¥                          | 240,548 |  |                  | ¥ | 131,073 |       |  | ¥ | 371,621        |  |  | ¥              | 43,583 |  |              | ¥ | (6,689  | ) |  | ¥ | 408,515 |  
|                                                   |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   |         |  
|                                                   |  |                            |         |  |                  |  
|Segment income                                     |  | ¥                          | 134,850 |  |                  | ¥ | 76,161  |       |  | ¥ | 211,011        |  |  | ¥              | 15,290 |  |              | ¥ | (29,863 | ) |  | ¥ | 196,438 |  
|Other non-operating income                         |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   | 13,194  |  
|Other non-operating expenses                       |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   | (1,313  | )
|Equity in losses of associates and a joint venture |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   | (94     | )
|                                                   |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   |         |  
|                                                   |  |                            |         |  |                  |  
|Profit before tax                                  |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  | ¥ | 208,225 |  
|                                                   |  |                            |         |  |                  |   |         |       |  |   |                |  |  |                |        |  |              |   |         |   |  |   |         |  
|                                                   |  |                            |         |  |                  |  
|OthersDepreciation and amortization               |  | ¥                          | 2,437   |  |                  | ¥ | 2,006   |       |  | ¥ | 4,443          |  |  | ¥              | 4,409  |  |              | ¥ | 4,600   |   |  | ¥ | 13,452  |  



32



---

|(2) | Sales to Customers, by Services and Major Goods
|--- | -----------------------------------------------



|            |  |                    |         |  |                           |   |         |      |  |   |           |  |  |   |           | 
|----------- |  | ------------------ | ------- |  | ------------------------- | - | ------- | ---- |  | - | --------- |  |  | - | --------- | 
|            |  | Millions of Yen    |         |  | Thousands of U.S. Dollars |  
|            |  | Year EndedMarch 31 |         |  | Year Ended
March 31,      |  
|            |  | 2016               |         |  | 2015                      |   |         | 2014 |  |   | 2016      | 
|            |  | Unaudited          |         |  | Unaudited                 |   |         |      |  |   | Unaudited | 
|            |  |                    |         | 
|Advertising |  | ¥                  | 266,911 |  |                           | ¥ | 249,829 |      |  | ¥ | 232,530   |  |  | $ | 2,368,752 | 
|Business    |  |                    | 251,530 |  |                           |   | 70,107  |      |  |   | 72,398    |  |  |   | 2,232,251 | 
|Personal    |  |                    | 133,886 |  |                           |   | 108,552 |      |  |   | 103,587   |  |  |   | 1,188,197 | 
|            |  |                    |         |  |                           |   |         |      |  |   |           |  |  |   |           | 
|            |  |                    |         | 
|Total       |  | ¥                  | 652,327 |  |                           | ¥ | 428,488 |      |  | ¥ | 408,515   |  |  | $ | 5,789,200 | 
|            |  |                    |         |  |                           |   |         |      |  |   |           |  |  |   |           | 



|            |  |                                                                                                                                                                               
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |  | Main Services and Goods                                                                                                                                                       
|            | 
|Advertising |  |        Paid search, display and other advertising-related services                                                                                                           
|            | 
|Business    |  |        Data
center-related and other corporate services
       Yahoo! Real Estate and other information listing services
       Sale of goods such as ASKUL                
|            | 
|Personal    |  |        YAHUOKU!, Yahoo! Shopping, and other e-commerce related services
       Yahoo! Premium, Yahoo! BB, and other membership services
       Sale of goods such as LOHACO



|7. | CASH AND CASH EQUIVALENTS (UNAUDITED)
|-- | -------------------------------------

The components of cash and cash equivalents are
as follows:



|                                                  |  |                 |         |  |                             |   |         |      |  |   |           | 
|------------------------------------------------- |  | --------------- | ------- |  | --------------------------- | - | ------- | ---- |  | - | --------- | 
|                                                  |  | Millions of Yen |         |  | Thousands of   U.S. Dollars |  
|                                                  |  | As ofMarch 31   |         |  | As of
March 31,             |  
|                                                  |  | 2016            |         |  | 2015                        |   |         | 2016 | 
|                                                  |  |                 |        
|Cash and demand deposits                          |  | ¥               | 214,382 |  |                             | ¥ | 156,755 |      |  | $ | 1,902,574 | 
|Time deposits (maturities ofthree months or less) |  |                 | 230,784 |  |                             |   | 347,182 |      |  |   | 2,048,136 | 
|Others                                            |  |                 | 3,999   |  |                             |   |         |      |  |   | 35,490    | 
|                                                  |  |                 |         |  |                             |   |         |      |  |   |           | 
|                                                  |  |                 |        
|Total                                             |  | ¥               | 449,165 |  |                             | ¥ | 503,937 |      |  | $ | 3,986,200 | 
|                                                  |  |                 |         |  |                             |   |         |      |  |   |           | 



|8. | TRADE AND OTHER RECEIVABLES (UNAUDITED)
|-- | ---------------------------------------

The components of trade and other receivables
are as follows:



|                                                         |  |                 |         |  |                             |   |         |      |  |   |           | 
|-------------------------------------------------------- |  | --------------- | ------- |  | --------------------------- | - | ------- | ---- |  | - | --------- | 
|                                                         |  | Millions of Yen |         |  | Thousands of   U.S. Dollars |  
|                                                         |  | As ofMarch 31   |         |  | As of
March 31,             |  
|                                                         |  | 2016            |         |  | 2015                        |   |         | 2016 | 
|                                                         |  |                 |        
|Trade receivables                                        |  | ¥               | 123,442 |  |                             | ¥ | 67,261  |      |  | $ | 1,095,509 | 
|Credit card receivables                                  |  |                 | 69,863  |  |                             |   | 35,163  |      |  |   | 620,012   | 
|Foreign exchange dealings cashdeposits with trust banks |  |                 | 78,561  |  |                             |   | 90,402  |      |  |   | 697,204   | 
|Others                                                   |  |                 | 33,893  |  |                             |   | 24,910  |      |  |   | 300,791   | 
|                                                         |  |                 |         |  |                             |   |         |      |  |   |           | 
|                                                         |  |                 |        
|Total                                                    |  | ¥               | 305,759 |  |                             | ¥ | 217,736 |      |  | $ | 2,713,516 | 
|                                                         |  |                 |         |  |                             |   |         |      |  |   |           | 



33



---

|9. | OTHER FINANCIAL ASSETS (UNAUDITED)
|-- | ----------------------------------

The components of other financial assets are as
follows:



|                            |  |                 |         |  |                             |   |        |      |  |   |         | 
|--------------------------- |  | --------------- | ------- |  | --------------------------- | - | ------ | ---- |  | - | ------- | 
|                            |  | Millions of Yen |         |  | Thousands of   U.S. Dollars |  
|                            |  | As ofMarch 31   |         |  | As of
March 31,             |  
|                            |  | 2016            |         |  | 2015                        |   |        | 2016 | 
|                            |  |                 |        
|Equity securities           |  | ¥               | 43,119  |  |                             | ¥ | 30,554 |      |  | $ | 382,668 | 
|Derivative financial assets |  |                 | 21,072  |  |                             |   | 17,031 |      |  |   | 187,007 | 
|Deposits paid               |  |                 | 16,682  |  |                             |   | 12,604 |      |  |   | 148,048 | 
|Debt securities             |  |                 | 9,348   |  |                             |   | 9,360  |      |  |   | 82,961  | 
|Others                      |  |                 | 10,219  |  |                             |   | 4,457  |      |  |   | 90,690  | 
|                            |  |                 |         |  |                             |   |        |      |  |   |         | 
|                            |  |                 |        
|Total                       |  | ¥               | 100,440 |  |                             | ¥ | 74,006 |      |  | $ | 891,374 | 
|                            |  |                 |         |  |                             |   |        |      |  |   |         | 
|                            |  |                 |        
|Current assets              |  | ¥               | 30,118  |  |                             | ¥ | 15,902 |      |  | $ | 267,288 | 
|                            |  |                 |        
|Non-current assets          |  |                 | 70,322  |  |                             |   | 58,104 |      |  |   | 624,086 | 



|10. | OTHER ASSETS (UNAUDITED)
|--- | ------------------------

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



|                    |  |                 |       |  |                           |   |       |      |  |   |        | 
|------------------- |  | --------------- | ----- |  | ------------------------- | - | ----- | ---- |  | - | ------ | 
|                    |  | Millions of Yen |       |  | Thousands of U.S. Dollars |  
|                    |  | As ofMarch 31   |       |  | As of
March 31,           |  
|                    |  | 2016            |       |  | 2015                      |   |       | 2016 | 
|                    |  |                 |      
|Prepaid expenses    |  | ¥               | 7,396 |  |                           | ¥ | 5,287 |      |  | $ | 65,637 | 
|Investment property |  |                 |       |  |                           |   | 1,489 |      |  |   |        | 
|Others              |  |                 | 1,342 |  |                           |   | 432   |      |  |   | 11,910 | 
|                    |  |                 |       |  |                           |   |       |      |  |   |        | 
|                    |  |                 |      
|Total               |  | ¥               | 8,738 |  |                           | ¥ | 7,208 |      |  | $ | 77,547 | 
|                    |  |                 |       |  |                           |   |       |      |  |   |        | 
|                    |  |                 |      
|Current assets      |  | ¥               | 6,437 |  |                           | ¥ | 3,834 |      |  | $ | 57,126 | 
|                    |  |                 |      
|Non-current assets  |  |                 | 2,301 |  |                           |   | 3,374 |      |  |   | 20,421 | 



34



---

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

Changes in carrying amounts of property and equipment,
acquisition 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 |         |  | Others |   |         | 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    |  
|Business combinations            |  |                            | 520     |   |                          |   | 620     |                           |  |   |         |   |  |                           | 1,729   |  |        |   | 322     |       |  |   |        |   |  |   | 3,191     |  
|Disposals                        |  |                            | (84     | ) |                          |   | (311    | )                         |  |   | (36     | ) |  |                           |         |  |        |   |         |       |  |   |        |   |  |   | (431      | )
|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    |  
|Purchase                         |  |                            | 3,956   |   |                          |   | 21,815  |                           |  |   | 2,268   |   |  |                           | 297     |  |        |   | 6,962   |       |  | ¥ | 1,131  |   |  |   | 36,429    |  
|Business combinations            |  |                            | 13,718  |   |                          |   | 1,174   |                           |  |   | 5,917   |   |  |                           | 9,436   |  |        |   | 2,256   |       |  |   |        |   |  |   | 32,501    |  
|Disposals                        |  |                            | (57     | ) |                          |   | (867    | )                         |  |   | (82     | ) |  |                           |         |  |        |   |         |       |  |   | (50    | ) |  |   | (1,056    | )
|Depreciation                     |  |                            | (4,766  | ) |                          |   | (10,054 | )                         |  |   | (2,173  | ) |  |                           |         |  |        |   |         |       |  |   | (129   | ) |  |   | (17,122   | )
|Transfer of accounts             |  |                            | 2,064   |   |                          |   | 1,536   |                           |  |   | 1,238   |   |  |                           |         |  |        |   | (4,838  | )     |  |   |        |   |  |   |           |  
|Others                           |  |                            | 3,373   |   |                          |   | (238    | )                         |  |   | (64     | ) |  |                           |         |  |        |   | (155    | )     |  |   |        |   |  |   | 2,916     |  
|                                 |  |                            |         |   |                          |   |         |                           |  |   |         |   |  |                           |         |  |        |   |         |       |  |   |        |   |  |   |           |  
|                                 |  |                            |         |   |                          |   |        
|As of March 31, 2016 (unaudited) |  | ¥                          | 35,236  |   |                          | ¥ | 44,035  |                           |  | ¥ | 19,118  |   |  | ¥                         | 16,888  |  |        | ¥ | 4,905   |       |  | ¥ | 952    |   |  | ¥ | 121,134   |  
|                                 |  |                            |         |   |                          |   |         |                           |  |   |         |   |  |                           |         |  |        |   |         |       |  |   |        |   |  |   |           |  
|                                 | 
|                                 |  | Thousands of U.S. Dollars  |        
|                                 |  | Buildings and   Structures |         |   | Furniture and   Fixtures |   |         | Machinery and   Equipment |  |   | Land    |   |  | Construction  in Progress |         |  | Others |   |         | Total | 
|                                 |  |                            |         |   |                          |   |        
|As of March 31, 2015 (unaudited) |  | $                          | 150,408 |   |                          | $ | 272,178 |                           |  | $ | 106,621 |   |  | $                         | 63,498  |  |        | $ | 6,035   |       |  |   |        |   |  | $ | 598,740   |  
|Purchase                         |  |                            | 35,108  |   |                          |   | 193,601 |                           |  |   | 20,128  |   |  |                           | 2,636   |  |        |   | 61,786  |       |  | $ | 10,037 |   |  |   | 323,296   |  
|Business combinations            |  |                            | 121,743 |   |                          |   | 10,419  |                           |  |   | 52,511  |   |  |                           | 83,742  |  |        |   | 20,021  |       |  |   |        |   |  |   | 288,436   |  
|Disposals                        |  |                            | (506    | ) |                          |   | (7,694  | )                         |  |   | (728    | ) |  |                           |         |  |        |   |         |       |  |   | (444   | ) |  |   | (9,372    | )
|Depreciation                     |  |                            | (42,297 | ) |                          |   | (89,226 | )                         |  |   | (19,285 | ) |  |                           |         |  |        |   |         |       |  |   | (1,144 | ) |  |   | (151,952  | )
|Transfer of accounts             |  |                            | 18,317  |   |                          |   | 13,632  |                           |  |   | 10,987  |   |  |                           |         |  |        |   | (42,936 | )     |  |   |        |   |  |   |           |  
|Others                           |  |                            | 29,936  |   |                          |   | (2,113  | )                         |  |   | (568    | ) |  |                           |         |  |        |   | (1,376  | )     |  |   |        |   |  |   | 25,879    |  
|                                 |  |                            |         |   |                          |   |         |                           |  |   |         |   |  |                           |         |  |        |   |         |       |  |   |        |   |  |   |           |  
|                                 |  |                            |         |   |                          |   |        
|As of March 31, 2016 (unaudited) |  | $                          | 312,709 |   |                          | $ | 390,797 |                           |  | $ | 169,666 |   |  | $                         | 149,876 |  |        | $ | 43,530  |       |  | $ | 8,449  |   |  | $ | 1,075,027 |  
|                                 |  |                            |         |   |                          |   |         |                           |  |   |         |   |  |                           |         |  |        |   |         |       |  |   |        |   |  |   |           |  

Acquisition Costs



|                                 |  |                            |        |  |                          |   |        |                           |  |   |        |  |  |                           |        |  |        |   |       |       |  |   |       |  |  |   |         | 
|-------------------------------- |  | -------------------------- | ------ |  | ------------------------ | - | ------ | ------------------------- |  | - | ------ |  |  | ------------------------- | ------ |  | ------ | - | ----- | ----- |  | - | ----- |  |  | - | ------- | 
|                                 |  | Millions of Yen            |       
|                                 |  | Buildings and   Structures |        |  | Furniture and   Fixtures |   |        | Machinery and   Equipment |  |   | Land   |  |  | Construction  in Progress |        |  | Others |   |       | 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 | 
|As of March 31, 2016 (unaudited) |  |                            | 51,852 |  |                          |   | 79,056 |                           |  |   | 31,443 |  |  |                           | 16,888 |  |        |   | 4,905 |       |  | ¥ | 1,078 |  |  |   | 185,222 | 



35



---

|                                 |  |                            |         |  |                          |   |         |                           |  |   |         |  |  |                           |         |  |        |   |        |       |  |   |       |  |  |   |           | 
|-------------------------------- |  | -------------------------- | ------- |  | ------------------------ | - | ------- | ------------------------- |  | - | ------- |  |  | ------------------------- | ------- |  | ------ | - | ------ | ----- |  | - | ----- |  |  | - | --------- | 
|                                 |  | Thousands of U.S. Dollars  |        
|                                 |  | Buildings and   Structures |         |  | Furniture and   Fixtures |   |         | Machinery and   Equipment |  |   | Land    |  |  | Construction  in Progress |         |  | Others |   |        | Total | 
|                                 |  |                            |         |  |                          |   |        
|As of March 31, 2016 (unaudited) |  | $                          | 460,170 |  |                          | $ | 701,597 |                           |  | $ | 279,047 |  |  | $                         | 149,876 |  |        | $ | 43,530 |       |  | $ | 9,568 |  |  | $ | 1,643,788 | 

Accumulated Depreciation and Impairment Losses



|                                 |  |                            |          |   |                          |   |          |                           |  |   |          |   |  |                           |  |  |        |   |     |       |  |   |        |   |  |   |          |  
|-------------------------------- |  | -------------------------- | -------- | - | ------------------------ | - | -------- | ------------------------- |  | - | -------- | - |  | ------------------------- |  |  | ------ | - | --- | ----- |  | - | ------ | - |  | - | -------- | -
|                                 |  | Millions of Yen            |         
|                                 |  | Buildings and   Structures |          |   | Furniture and   Fixtures |   |          | Machinery and   Equipment |  |   | Land     |   |  | Construction  in Progress |  |  | Others |   |     | 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  | )
|As of March 31, 2016 (unaudited) |  |                            | (16,616  | ) |                          |   | (35,021  | )                         |  |   | (12,325  | ) |  |                           |  |  |        |   |     |       |  | ¥ | (126   | ) |  |   | (64,088  | )
|                                 | 
|                                 |  | Thousands of U.S. Dollars  |         
|                                 |  | Buildings and   Structures |          |   | Furniture and   Fixtures |   |          | Machinery and   Equipment |  |   | Land     |   |  | Construction  in Progress |  |  | Others |   |     | Total | 
|                                 |  |                            |          |   |                          |   |         
|As of March 31, 2016 (unaudited) |  | $                          | (147,462 | ) |                          | $ | (310,800 | )                         |  | $ | (109,381 | ) |  |                           |  |  |        |   |     |       |  | $ | (1,118 | ) |  | $ | (568,761 | )



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

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

Carrying Amounts



|                                 |  |                 |         |   |                                      |   |        |                                     |  |   |                        |   |  |        |        |   |       |   |       |   |  |   |         |  
|-------------------------------- |  | --------------- | ------- | - | ------------------------------------ | - | ------ | ----------------------------------- |  | - | ---------------------- | - |  | ------ | ------ | - | ----- | - | ----- | - |  | - | ------- | -
|                                 |  | Millions of Yen |        
|                                 |  |                 |         |   | Assets HavingIndefinite
Useful Lives |   |        | Assets Having Definite Useful Lives |  |   |                        |  
|                                 |  | Goodwill        |         |   | Trademarks                           |   |        | Software                            |  |   | Customer
Relationships |   |  | Others |        |   | Total |  
|                                 |  |                 |         |   |                                      |  
|As of April 1, 2013              |  | ¥               | 14,395  |   |                                      |   |        |                                     |  | ¥ | 12,020                 |   |  | ¥      | 4,514  |   |       | ¥ | 395   |   |  | ¥ | 31,324  |  
|Purchase                         |  |                 |         |   |                                      |   |        |                                     |  |   | 3,541                  |   |  |        |        |   |       |   | 11    |   |  |   | 3,552   |  
|Internal development             |  |                 |         |   |                                      |   |        |                                     |  |   | 3,941                  |   |  |        |        |   |       |   |       |   |  |   | 3,941   |  
|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  |  
|Purchase                         |  |                 |         |   |                                      |   |        |                                     |  |   | 5,359                  |   |  |        |        |   |       |   | 2,010 |   |  |   | 7,369   |  
|Internal development             |  |                 |         |   |                                      |   |        |                                     |  |   | 7,429                  |   |  |        |        |   |       |   |       |   |  |   | 7,429   |  
|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  |  
|Purchase                         |  |                 |         |   |                                      |   |        |                                     |  |   | 3,908                  |   |  |        |        |   |       |   | 2,749 |   |  |   | 6,657   |  
|Internal development             |  |                 |         |   |                                      |   |        |                                     |  |   | 9,147                  |   |  |        |        |   |       |   |       |   |  |   | 9,147   |  
|Business combinations            |  |                 | 128,689 |   |                                      | ¥ | 30,250 |                                     |  |   | 8,245                  |   |  |        | 56,680 |   |       |   | 150   |   |  |   | 224,014 |  
|Disposals                        |  |                 |         |   |                                      |   |        |                                     |  |   | (1,506                 | ) |  |        |        |   |       |   |       |   |  |   | (1,506  | )
|Amortization                     |  |                 |         |   |                                      |   |        |                                     |  |   | (9,500                 | ) |  |        | (3,414 | ) |       |   | (444  | ) |  |   | (13,358 | )
|Others                           |  |                 |         |   |                                      |   |        |                                     |  |   | 67                     |   |  |        |        |   |       |   | (2    | ) |  |   | 65      |  
|                                 |  |                 |         |   |                                      |   |        |                                     |  |   |                        |   |  |        |        |   |       |   |       |   |  |   |         |  
|                                 |  |                 |         |   |                                      |  
|As of March 31, 2016 (unaudited) |  | ¥               | 156,362 |   |                                      | ¥ | 30,250 |                                     |  | ¥ | 32,830                 |   |  | ¥      | 60,756 |   |       | ¥ | 4,876 |   |  | ¥ | 285,074 |  
|                                 |  |                 |         |   |                                      |   |        |                                     |  |   |                        |   |  |        |        |   |       |   |       |   |  |   |         |  



36



---

Thousands of U.S. DollarsAssets Having
Indefinite


Assets Having Definite Useful LivesUseful Lives





CustomerGoodwill


Trademarks


Software


Relationships


Others


TotalAs of March 31, 2015 (unaudited)

$
245,589






$
199,405


$
66,472


$
21,503


$
532,969Purchase










34,682







24,397



59,079Internal development










81,177











81,177Business combinations


1,142,075


$
268,459



73,172



503,017



1,331



1,988,054Disposals










(13,365
)










(13,365
)Amortization










(84,310
)


(30,298
)


(3,940
)


(118,548
)Others










595







(18
)


577As of March 31, 2016 (unaudited)

$
1,387,664


$
268,459


$
291,356


$
539,191



$  43,273



$  2,529,943


Acquisition Costs



Millions of YenAssets Having
Indefinite


Assets Having Definite Useful LivesUseful Lives





CustomerGoodwill


Trademarks


Software


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



91,041As of March 31, 2016 (unaudited)


156,362


¥
30,250



70,191



66,040



5,799



328,642




Thousands of U.S. DollarsAssets Having
Indefinite


Assets Having Definite Useful LivesUseful Lives





CustomerGoodwill


Trademarks


Software


Relationships


Others


TotalAs of March 31, 2016 (unaudited)

$
1,387,664


$
268,459


$
622,923


$
586,084


$
51,466


$
2,916,596


Accumulated Amortization and Impairment Losses



Millions of YenAssets Having
Indefinite


Assets Having Definite Useful LivesUseful Lives





CustomerGoodwill


Trademarks


Software


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
)As of March 31, 2016 (unaudited)










(37,361
)


(5,284
)


(923
)


(43,568
)Thousands of U.S. DollarsAssets Having
Indefinite


Assets Having Definite Useful LivesUseful Lives





CustomerGoodwill


Trademarks


Software


Relationships


Others


TotalAs of March 31, 2016 (unaudited)









$
(331,567
)

$
(46,894
)

$
(8,191
)

$
(386,652
)




37



---

Certain trademarks that have been assessed as having indefinite useful lives are not amortized
because the Group expects to continue to benefit from the trademarks as long as the related businesses continue to operate.

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, 2016, 2015
and 2014 were ¥290 million ($2,574 thousand) (unaudited), ¥275 million (unaudited) and ¥233 million, respectively.

The carrying amounts of internally generated intangible assets related to software as of March 31, 2016 and 2015 are
¥16,117 million ($143,033 thousand) (unaudited) and ¥14,763 million (unaudited), respectively.

Significant
goodwill and intangible assets having indefinite useful lives of the Group are allocated to the following groups of cash-generating units:

Goodwill (Unaudited)



Millions of Yen


Thousands ofU.S. DollarsAs ofMarch 31


As of
March 31,Cash-Generating Unit


2016


2015


2016Reportable segment:Marketing solutions business


Marketing solutions



¥  10,905



¥  10,906



$       96,778Consumer business


Shopping



56,724



125



503,408Ikyu



72,044







639,368Others



251



251



2,228Other business


Settlement- andfinance-related



16,438



16,391



145,882Total






¥  156,362



¥  27,673



$  1,387,664


Intangible Assets Having Indefinite Useful Lives (Unaudited)



Millions of Yen


Thousands ofU.S. DollarsAs ofMarch 31


As of
March 31,Cash-Generating Unit


2016


2015


2016Reportable segment:Consumer business


Shopping



¥  20,130







$  178,647Ikyu



10,120







89,812Total






¥  30,250







$  268,459


In testing goodwill and intangible assets having indefinite useful lives 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.



38



---

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 generally do not exceed five years. The perpetual growth rate is determined considering the long-term average growth rate of the
market or country to which the cash-generating unit belongs. The perpetual growth rates used for the years ended March 31, 2016, 2015 and 2014 were 1.7% (unaudited), 1.9% (unaudited) and 1.9%,
respectively. The pretax discount rates used in measurement of value in use for the years ended March 31, 2016, 2015 and 2014 were 8.1%13.8% (unaudited), 8.3%11.8% (unaudited) 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 such as the discount rate and the perpetual growth rate used in the impairment test change to a reasonably foreseeable extent.



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



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

The Companys major subsidiaries as
of March 31, 2016 and 2015 are as follows:



Ownership Percentageof Voting Rights (%)As ofMarch 31Name of Subsidiary

Location


2016




2015Y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





66.7YJ Capital Inc.


Tokyo



100.0





100.0YJ1 Investment Partnership


TokyoValueCommerce Co., Ltd.


Tokyo



50.5





50.5Carview Corporation


Tokyo



100.0





100.0YJFX, Inc.


Tokyo



100.0





100.0Synergy Marketing, Inc.


Osaka



100.0





100.0YJ2 Investment Partnership


TokyoYJ Card Corporation


Fukuoka



65.0





65.0ASKUL Corporation (Note 1)


Tokyo



44.4





41.8ecohai Co., Ltd.


Tokyo



68.5(68.5)Ikyu Corporation (Note 2)


Tokyo



100.0


Notes:



| | 1. | ASKUL, previously an associate of the Company whose principal activity is mail order delivery of stationery and other products, became a subsidiary of the Company on August 27, 2015 (the acquisition date) as a
result of the repurchase of its own shares (treasury shares) following the resolution made at the meeting of ASKULs board of directors held on May 19, 2015. The percentage of the Companys voting rights of ASKUL increased from 41.7%
as of May 20, 2015 to 44.4% after the repurchase of the treasury shares. The Company did not and does not have a majority of the voting rights before and following this transaction; however, the Company determined that it now has the practical
ability to direct the relevant activities unilaterally and therefore has control over ASKUL and accounts for ASKUL as a subsidiary after considering all facts and circumstances including the widely dispersed holdings of voting rights among
shareholders and the voting patterns at previous ASKUL shareholders meetings. (Please refer to Note 5. Business combinations.)
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



39



---

| | 2. | On February 3, 2016, the Company acquired common stock of Ikyu and as a result Ikyu became a subsidiary of the Company. (Please refer to Note 5. Business combinations.) Subsequently, Ikyu became a wholly-owned subsidiary of the Company, which was completed by March 31, 2016.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | Figures in parentheses represent indirect ownership percentages of voting rights.
| | -- | ---------------------------------------------------------------------------------



| | (2) | Summarized Consolidated Financial Information and Other Information on Subsidiaries with Significant Non-controlling Interests (Unaudited)
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------



| | 1) | ASKUL (ASKUL and its group companies)
| | -- | -------------------------------------



| | (a) | General information
| | --- | -------------------



|                                                                            |  |                         |           |  |                          |  |            | 
|--------------------------------------------------------------------------- |  | ----------------------- | --------- |  | ------------------------ |  | ---------- | 
|                                                                            |  | Millions of Yen         |           |  | Thousands ofU.S. Dollars | 
|                                                                            |  | As ofMarch 31,2016      |           |  | As ofMarch 31,2016       | 
|                                                                            |  |                        
|Proportion of ownership interests held by the non-controlling interests (%) |  |                         | 55.6      |  |                          |  |            | 
|                                                                            |  |                        
|Accumulated non-controlling interests of ASKUL                              |  |                         | ¥  55,250 |  |                          |  | $  490,327 | 
|                                                                            |  |                        
|                                                                            |  | Millions of Yen         |           |  | Thousands ofU.S. Dollars | 
|                                                                            |  | Year EndedMarch 31,2016 |           |  | Year EndedMarch 31,2016  | 
|                                                                            |  |                        
|Profit allocated to the non-controlling interests of ASKUL                  |  |                         | ¥  1,567  |  |                          |  | $  13,907  | 



| | (b) | Summarized consolidated financial information
| | --- | ---------------------------------------------



|                        |  |                    |            |  |                           |  |            | 
|----------------------- |  | ------------------ | ---------- |  | ------------------------- |  | ---------- | 
|                        |  | Millions of Yen    |            |  | Thousands of U.S. Dollars | 
|                        |  | As ofMarch 31,2016 |            |  | As ofMarch 31,2016        | 
|                        |  |                   
|Current assets          |  |                    | ¥  100,356 |  |                           |  | $  890,628 | 
|Non-current assets      |  |                    | 117,438    |  |                           |  | 1,042,226  | 
|Current liabilities     |  |                    | 86,350     |  |                           |  | 766,330    | 
|Non-current liabilities |  |                    | 32,835     |  |                           |  | 291,400    | 
|Equity                  |  |                    | 98,609     |  |                           |  | 875,124    | 



40



---

Non-current assets above do not include
¥53,779 million ($477,272 thousand) of goodwill arising from the business combination.



Millions of Yen


Thousands ofU.S. DollarsYear EndedMarch 31,2016


Year EndedMarch 31,2016Revenue

¥
189,014


$
1,677,441Profit for the year


2,971



26,367Total comprehensive income


2,643



23,456


The figures in the above table are revenue, profit for the year and total comprehensive income earned on
and after August 27, 2015, the acquisition date.

Dividends paid by ASKUL to the
non-controlling interests were ¥433 million ($3,843 thousand) on and after the acquisition date.



Millions of Yen


Thousands ofU.S. DollarsYear EndedMarch 31,2016


Year EndedMarch 31,2016Net cash inflow from operating activities

¥
8,710


$
77,299Net cash outflow from investing activities


(8,251
)


(73,225
)Net cash outflow from financing activities


(5,629
)


(49,956
)Effects of exchange rate changes on cash and cash equivalents


(2
)


(18
)Net decrease in cash and cash equivalents

¥
(5,172
)

$
(45,900
)


The figures in the above table are cash flows of ASKUL on and after the acquisition date.



| | (3) | 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 ofU.S. DollarsAs ofMarch 31


As of
March 31,2016


2015


2016Unaudited


Unaudited


UnauditedCarrying amount

¥
34,257


¥
61,671


$
304,020




41



---

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 31,20162016


2015


2014Unaudited


Unaudited





UnauditedProfit (loss) for the year attributable to the Group

¥
1,317


¥
1,673


¥
(94)


$
11,688Other comprehensive income (loss), net of tax, attributable to the Group


(237
)


976



191



(2,103
)Comprehensive income attributable to the Group


1,081



2,649



97



9,594




| | (4) | Structured Entities (Unaudited)
| | --- | -------------------------------

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


As ofMarch 31,20162016


2015Other financial assets (non-current)

¥
5,990


¥
3,535


$
53,159


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



42



---

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



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

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

For the year ended March 31, 2016 (unaudited)



Millions of YenAs ofMarch 31,      2015


Recognizedin Profitfor the Year


Recognizedin OtherComprehensiveIncome


Others(Note 1)


As ofMarch 31,      2016Deferred tax assets:Enterprise tax payable

¥
2,370


¥
(496
)





¥
89


¥
1,963Property and equipment and intangible assets


5,622



2,805







450



8,877Net operating loss carryforwards


162



3,362







1,226



4,750Liabilities related to employee benefits (Note 2)


3,427



623







242



4,292Available-for-sale financial assets


1,005



662











1,667Provision for interest repayment claims


8,198



(1,230
)










6,968Others


4,364



766







1,246



6,376Total deferred tax assets before offset


25,148



6,492







3,253



34,893Offset of deferred tax assets and liabilities


(10,043
)














(11,562
)Total deferred tax assets, net

¥
15,105














¥
23,331Deferred tax liabilities:Property and equipment and intangible assets

¥
2,601


¥
(2,840
)





¥
30,769


¥
30,530Available-for-sale financial assets


4,529



180


¥
604



145



5,458Others


2,942



148











3,090Total deferred tax liabilities before offset


10,072



(2,512
)


604



30,914



39,078Offset of deferred tax assets and liabilities


(10,043
)














(11,562
)Total deferred tax liabilities, net

¥
29














¥
27,516




43



---

Thousands of U.S. DollarsAs ofMarch 31,      2015


Recognizedin Profitfor the Year


Recognizedin OtherComprehensiveIncome


Others(Note 1)


As ofMarch 31,      2016Deferred tax assets:Enterprise tax payable

$
21,033


$
(4,402
)





$
790


$
17,421Property and equipment and intangible assets


49,893



24,894







3,994



78,781Net operating loss carryforwards


1,438



29,837







10,880



42,155Liabilities related to employee benefits (Note 2)


30,414



5,528







2,148



38,090Available-for-sale financial assets


8,919



5,875











14,794Provision for interest repayment claims


72,755



(10,916
)










61,839Others


38,729



6,798







11,057



56,584Total deferred tax assets before offset


223,181



57,614







28,869



309,664Offset of deferred tax assets and liabilities


(89,129
)














(102,609
)Total deferred tax assets, net

$
134,052














$
207,055Deferred tax liabilities:Property and equipment and intangible assets

$
23,083


$
(25,204
)





$
273,065


$
270,944Available-for-sale financial assets


40,194



1,597


$
5,360



1,287



48,438Others


26,109



1,314











27,423Total deferred tax liabilities before offset


89,386



(22,293
)


5,360



274,352



346,805Offset of deferred tax assets and liabilities


(89,129
)














(102,609
)Total deferred tax liabilities, net

$
257














$
244,196


Notes:



| | 1. | The items included in others are mainly attributable to the conversion of ASKUL and Ikyu into subsidiaries.
| | -- | -------------------------------------------------------------------------------------------------------------



| | 2. | Liabilities related to employee benefits include liabilities attributable to accrued bonuses and paid absences.
| | -- | ---------------------------------------------------------------------------------------------------------------



44



---

For the year ended March 31, 2015 (unaudited)



Millions of YenAs ofMarch 31,      2014


Recognizedin Profitfor the Year


Recognizedin OtherComprehensiveIncome


Others(Note 1)


As ofMarch 31,      2015Deferred tax assets:Enterprise tax payable

¥
3,039


¥
(677
)





¥
8


¥
2,370Property and equipment and intangible assets


3,930



1,657







35



5,622Net operating loss carryforwards


173



(11
)










162Liabilities related to employee benefits (Note 2)


3,674



(253
)






6



3,427Available-for-sale financial assets


5,463



(4,461
)






3



1,005Provision for interest repayment claims






(687
)






8,885



8,198Others


2,878



(636
)






2,122



4,364Total deferred tax assets before offset


19,157



(5,068
)






11,059



25,148Offset of deferred tax assets and liabilities


(6,688
)














(10,043
)Total deferred tax assets, net

¥
12,469














¥
15,105Deferred tax liabilities:Property and equipment and intangible assets

¥
1,534


¥
(481
)





¥
1,548


¥
2,601Available-for-sale financial assets


5,192






¥
(722
)


59



4,529Others






(697
)






3,639



2,942Total deferred tax liabilities before offset


6,726



(1,178
)


(722
)


5,246



10,072Offset of deferred tax assets and liabilities


(6,688
)














(10,043
)Total deferred tax liabilities, net

¥
38














¥
29


Notes:



| | 1. | The items included in others are mainly attributable to the conversion of YJ Card Corporation into a subsidiary.
| | -- | ------------------------------------------------------------------------------------------------------------------



| | 2. | Liabilities related to employee benefits include liabilities attributable to accrued bonuses and paid absences.
| | -- | ---------------------------------------------------------------------------------------------------------------



45



---

For the year ended March 31, 2014



Millions of YenAs ofApril 1,      2013


Recognizedin Profitfor the Year


Recognizedin OtherComprehensiveIncome


Others


As ofMarch 31,2014Deferred tax assets:Enterprise tax payable

¥
3,263


¥
(226
)





¥
2


¥
3,039Property and equipment and intangible assets


3,443



486







1



3,930Net operating loss carryforwards


114



59











173Liabilities related to employee benefits


2,767



893







14



3,674Available-for-sale financial assets


5,366



94







3



5,463Provision for interest repayment claimsOthers


3,187



(329
)






20



2,878Total deferred tax assets before offset


18,140



977







40



19,157Offset of deferred tax assets and liabilities


(4,036
)














(6,688
)Total deferred tax assets, net

¥
14,104














¥
12,469Deferred tax liabilities:Property and equipment and intangible assets

¥
1,701


¥
(335
)





¥
168


¥
1,534Available-for-sale financial assets


2,366






¥
2,819



7



5,192OthersTotal deferred tax liabilities before offset


4,067



(335
)


2,819



175



6,726Offset of deferred tax assets and liabilities


(4,036
)














(6,688
)Total deferred tax liabilities, net

¥
31














¥
38




| | Note: | Liabilities related to employee benefits include liabilities attributable to accrued bonuses and paid absences.
| | ----- | ---------------------------------------------------------------------------------------------------------------

Deferred tax assets which belong to individual entities that recorded losses as of March 31, 2016 and 2015 are ¥8,961 million
($79,526 thousand) (unaudited) and ¥6,674 million (unaudited), respectively. The Group recognizes deferred tax assets to the extent that it is probable that future taxable profit will be available.



46



---

Deductible temporary differences and net operating loss carryforwards (after multiplying by the
tax rate) for which no deferred tax assets have been recognized are as follows:



|                                               |  |                 |       |  |                          |   |     |           |  |   |        | 
|---------------------------------------------- |  | --------------- | ----- |  | ------------------------ | - | --- | --------- |  | - | ------ | 
|                                               |  | Millions of Yen |       |  | Thousands ofU.S. Dollars |  
|                                               |  | As ofMarch 31   |       |  | As ofMarch 31,2016       |  
|                                               |  | 2016            |       |  | 2015                     |   |    
|                                               |  | Unaudited       |       |  | Unaudited                |   |     | Unaudited | 
|                                               |  |                 |      
|Deductible temporary differences               |  | ¥               | 1,592 |  |                          | ¥ | 644 |           |  | $ | 14,129 | 
|                                               |  |                 |      
|Net operating loss carryforwards which expire: |  |                 |       |  |                          |   |     |           |  |   |        | 
|Within one year                                |  |                 |       |  |                          |   |     |           |  |   |        | 
|In one year to five years                      |  | ¥               | 655   |  |                          |   |     |           |  | $ | 5,813  | 
|After five years                               |  |                 | 1,564 |  |                          | ¥ | 355 |           |  |   | 13,880 | 
|                                               |  |                 |       |  |                          |   |     |           |  |   |        | 
|                                               |  |                 |      
|Total                                          |  | ¥               | 2,219 |  |                          | ¥ | 355 |           |  | $ | 19,693 | 
|                                               |  |                 |       |  |                          |   |     |           |  |   |        | 

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, 2016 and 2015 are ¥27,689 million ($245,731 thousand) (unaudited) and ¥22,704 million (unaudited), respectively.



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

The components of income tax expense are as follows:



|                     |  |                    |        |   |                          |   |        |      |  |   |           |   |  |   |         |  
|-------------------- |  | ------------------ | ------ | - | ------------------------ | - | ------ | ---- |  | - | --------- | - |  | - | ------- | -
|                     |  | Millions of Yen    |        |   | Thousands ofU.S. Dollars |  
|                     |  | Year EndedMarch 31 |        |   | Year EndedMarch 31,2016  |  
|                     |  | 2016               |        |   | 2015                     |   |        | 2014 |  |  
|                     |  | Unaudited          |        |   | Unaudited                |   |        |      |  |   | Unaudited |  
|                     |  |                    |        |  
|Current tax expense  |  | ¥                  | 63,097 |   |                          | ¥ | 70,476 |      |  | ¥ | 79,870    |   |  | $ | 559,966 |  
|Deferred tax expense |  |                    | (9,004 | ) |                          |   | 3,890  |      |  |   | (1,313    | ) |  |   | (79,908 | )
|                     |  |                    |        |   |                          |   |        |      |  |   |           |   |  |   |         |  
|                     |  |                    |        |  
|Total                |  | ¥                  | 54,093 |   |                          | ¥ | 74,366 |      |  | ¥ | 78,557    |   |  | $ | 480,058 |  
|                     |  |                    |        |   |                          |   |        |      |  |   |           |   |  |   |         |  

For the year ended March 31, 2016 (Unaudited)

On March 31, 2016, the Act on the Partial Revision of the Income Tax Act (Article 15, 2016) and the Act on the Partial Revision of
the Local Tax Act (Article 13, 2016) were passed by the Diet in Japan. In accordance with these changes, deferred tax assets and liabilities are determined by using the new statutory tax rates. The effective tax rate used to determine deferred
tax assets and liabilities for which the timing of the recovery or settlement of the related temporary difference is expected during the fiscal years ending March 31, 2017 and 2018 has been changed from 33.26% to 30.86%, respectively, and to
30.62% for those whose timing is expected on April 1, 2018 and thereafter. The effect of this change was not significant.



47



---

For the year ended March 31, 2015 (Unaudited)

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 passed by the Diet in Japan. In accordance with these changes, deferred tax assets and liabilities are determined by using the new statutory tax rates. The effective tax rate used to determine deferred
tax assets and liabilities for which the timing of the recovery or settlement of the related temporary difference is expected during the fiscal year ended March 31, 2016 was changed from 35.64% to 33.26%, respectively, and to 32.35% for those
whose timing is expected on April 1, 2016 and thereafter. The effect of this change was to increase income tax expense by ¥2,140 million.

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 |      
|                                                                          |  | 2016               |       |   | 2015      |  |       | 2014 | 
|                                                                          |  | Unaudited          |       |   | Unaudited |  |       |      | 
|                                                                          |  |                    |      
|Statutory effective tax rate (%)                                          |  |                    | 33.06 |   |           |  | 35.64 |      |  |  | 38.01 |  
|Effect of the change in statutory tax rate (%)                            |  |                    | 0.11  |   |           |  | 1.06  |      |  |  | 0.36  |  
|Gain on remeasurement of investments in associates acquired in stages (%) |  |                    |       |   |           |  | (1.07 | )    |  |  |       |  
|Gain from remeasurement relating to business combinations (%)             |  |                    | (8.71 | ) |           |  |       |      |  |  |       |  
|Negative goodwill arising from reclassification of investments (%)        |  |                    |       |   |           |  | (0.56 | )    |  |  |       |  
|Others (%)                                                                |  |                    | (0.59 | ) |           |  | 0.63  |      |  |  | (0.64 | )
|                                                                          |  |                    |       |   |           |  |       |      |  |  |       |  
|                                                                          |  |                    |       |   |           |  |       |      |  |  |       |  
|Actual tax rate (%)                                                       |  |                    | 23.87 |   |           |  | 35.70 |      |  |  | 37.73 |  
|                                                                          |  |                    |       |   |           |  |       |      |  |  |       |  



|15. | TRADE AND OTHER PAYABLES (UNAUDITED)
|--- | ------------------------------------

The components of trade and other payables are as
follows:



|                                                  |  |                 |         |  |                           |   |         |      |  |   |           | 
|------------------------------------------------- |  | --------------- | ------- |  | ------------------------- | - | ------- | ---- |  | - | --------- | 
|                                                  |  | Millions of Yen |         |  | Thousands of U.S. Dollars |  
|                                                  |  | As ofMarch 31   |         |  | As of
March 31,           |  
|                                                  |  | 2016            |         |  | 2015                      |   |         | 2016 | 
|                                                  |  |                 |        
|Accounts payabletrade                            |  | ¥               | 69,819  |  |                           | ¥ | 14,821  |      |  | $ | 619,622   | 
|Foreign exchange dealings deposits from customers |  |                 | 95,285  |  |                           |   | 97,178  |      |  |   | 845,625   | 
|Accounts payableother                            |  |                 | 74,589  |  |                           |   | 35,790  |      |  |   | 661,954   | 
|Others                                            |  |                 | 31,074  |  |                           |   | 11,190  |      |  |   | 275,772   | 
|                                                  |  |                 |         |  |                           |   |         |      |  |   |           | 
|                                                  |  |                 |        
|Total                                             |  | ¥               | 270,767 |  |                           | ¥ | 158,979 |      |  | $ | 2,402,973 | 
|                                                  |  |                 |         |  |                           |   |         |      |  |   |           | 



48



---

|16. | OTHER FINANCIAL LIABILITIES (UNAUDITED)
|--- | ---------------------------------------

The components of other financial liabilities
are as follows:



Millions of Yen


Thousands of U.S. DollarsAs ofMarch 31


As ofMarch 31,20162016


2015Bank loans (Note)

¥
20,151


¥
700


$
178,834Derivative financial liabilities


3,753



9,070



33,307Others


4,947



821



43,902Total

¥
28,851


¥
10,591


$
256,043Current liabilities

¥
18,288


¥
9,671


$
162,300Non-current liabilities


10,563



920



93,743




| |  |       |  |                                                                                                                                    
| |  | ----- |  | -----------------------------------------------------------------------------------------------------------------------------------
| |  | Note: |  | Current portion of bank loans as of March 31, 2016 and 2015 was ¥14,539 million ($129,029 thousand) and ¥600 million, respectively.



|17. | PROVISIONS (UNAUDITED)
|--- | ----------------------

The components of provisions are as follows:



Millions of Yen


Thousands of U.S. DollarsAs ofMarch 31


As ofMarch 31,20162016


2015Provision for interest repayment claims (Notes 1 and 2)

¥
20,281


¥
23,357


$
179,988Asset retirement obligations (Note 1)


7,374



2,738



65,442Others (Notes 1 and 3)


4,981



3,146



44,205Total

¥
32,636


¥
29,241


$
289,635Provisions (current)

¥
12,547


¥
6,399


$
111,351Provisions (non-current)


20,089



22,842



178,284




49



---

Notes:



| | 1. | Additional information on the nature of the provisions included in the table above is provided in Note 3. Significant accounting policies (10) 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 customer point reward programs.
| | -- | --------------------------------------------------------------------------

Changes in
provisions are as follows:



Millions of YenProvision for InterestRepaymentClaims


AssetRetirement Obligations


Others


TotalAs of April 1, 2015

¥
23,357


¥
2,738


¥
3,146


¥
29,241Recognition of provisions






3,548



4,817



8,365Business combinations






1,101



451



1,552Increase due to passage of time






73







73Used


(3,077
)


(70
)


(504
)


(3,651
)Others






(16
)


(2,928
)


(2,944
)As of March 31, 2016

¥
20,280


¥
7,374


¥
4,982


¥
32,636




Thousands of U.S. DollarsProvision for InterestRepaymentClaims


AssetRetirement Obligations


Others


TotalAs of April 1, 2015

$
207,286


$
24,299


$
27,920


$
259,505Recognition of provisions






31,487



42,750



74,237Business combinations






9,771



4,002



13,773Increase due to passage of time






648







648Used


(27,307
)


(621
)


(4,473
)


(32,401
)Others






(142
)


(25,985
)


(26,127
)As of March 31, 2016

$
179,979


$
65,442


$
44,214


$
289,635




|18. | PURCHASE COMMITMENTS (UNAUDITED)
|--- | --------------------------------

Commitments to purchase goods and services as of
March 31, 2016 and 2015 are ¥19,576 million ($173,731 thousand) and ¥12,234 million, respectively. The commitments are mainly attributable to executory contracts of purchase of assets to be used in data centers and new
offices.



50



---

|19. | OTHER LIABILITIES (UNAUDITED)
|--- | -----------------------------

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 31,20162016


2015Advance received

¥
10,914


¥
9,296


$
96,858Accrued bonuses


6,372



5,215



56,550Accrued paid absences


5,908



4,037



52,432Consumption taxes payable


2,909



11,064



25,816Others


13,381



5,525



118,752Total

¥
39,484


¥
35,137


$
350,408Other current liabilities

¥
33,639


¥
31,652


$
298,536Other non-current liabilities


5,845



3,485



51,872




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

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, a multi-employer contributory defined benefit welfare pension plan. The effect of the withdrawal was not material.

Retirement benefit costs of defined contribution plans, including multi-employer welfare pension plans
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 31,20162016


2015


2014Unaudited


Unaudited





UnauditedContributions to multi-employer pension plans

¥
29


¥
933


¥
813


$
258Contributions to defined contribution pension plans


860



498



445



7,632Total

¥
889


¥
1,431


¥
1,258


$
7,890




51



---

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



| | (1) | Finance Leases (Unaudited)
| | --- | --------------------------

As lessee

The Group leases machinery and equipment, software and system-related equipment, and other items
through financing lease contracts. 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.

The carrying amounts of leased assets, net of accumulated depreciation and accumulated impairment losses as of March 31, 2016 and 2015
are as follows:



|                        |  |                 |       |  |                           |   |     |      |  |   |        | 
|----------------------- |  | --------------- | ----- |  | ------------------------- | - | --- | ---- |  | - | ------ | 
|                        |  | Millions of Yen |       |  | Thousands of U.S. Dollars |  
|                        |  | As ofMarch 31   |       |  | As of
March 31,           |  
|                        |  | 2016            |       |  | 2015                      |   |     | 2016 | 
|                        |  |                 |      
|Software                |  | ¥               | 336   |  |                           | ¥ | 439 |      |  | $ | 2,982  | 
|Machinery and equipment |  |                 | 3,968 |  |                           |   |     |      |  |   | 35,215 | 
|Furniture and fixtures  |  |                 | 424   |  |                           |   | 377 |      |  |   | 3,763  | 
|                        |  |                 |       |  |                           |   |     |      |  |   |        | 
|                        |  |                 |      
|Total                   |  | ¥               | 4,728 |  |                           | ¥ | 816 |      |  | $ | 41,960 | 
|                        |  |                 |       |  |                           |   |     |      |  |   |        | 

The components of the total of future minimum lease payments and their present value under finance leases are
as follows:



|                                                            |  |                                      |       |   |                                                          |   |     |      |  |   |       |  |  |   |     | 
|----------------------------------------------------------- |  | ------------------------------------ | ----- | - | -------------------------------------------------------- | - | --- | ---- |  | - | ----- |  |  | - | --- | 
|                                                            |  | Millions of Yen                      |      
|                                                            |  | Total ofFuture MinimumLease Payments |       |   | Present Value ofthe Total ofFuture MinimumLease Payments |  
|                                                            |  | As ofMarch 31                        |       |   | As ofMarch 31                                            |  
|                                                            |  | 2016                                 |       |   | 2015                                                     |   |     | 2016 |  |   | 2015  | 
|                                                            |  |                                      |       |  
|Not later than one year                                     |  | ¥                                    | 979   |   |                                                          | ¥ | 221 |      |  | ¥ | 896   |  |  | ¥ | 202 | 
|Later than one year and not later than five years           |  |                                      | 2,633 |   |                                                          |   | 550 |      |  |   | 2,433 |  |  |   | 529 | 
|Later than five years                                       |  |                                      | 1,777 |   |                                                          |   |     |      |  |   | 1,709 |  |  |   |     | 
|                                                            |  |                                      |       |   |                                                          |   |     |      |  |   |       |  |  |   |     | 
|                                                            |  |                                      |       |  
|Total                                                       |  |                                      | 5,389 |   |                                                          |   | 771 |      |  | ¥ | 5,038 |  |  | ¥ | 731 | 
|                                                            |  |                                      |       |   |                                                          |   |     |      |  |   |       |  |  |   |     | 
|                                                            |  |                                      |       |  
|Less: Future finance costs                                  |  |                                      | (351  | ) |                                                          |   | (40 | )    |  |   |       |  |  |   |     | 
|                                                            |  |                                      |       |   |                                                          |   |     |      |  |   |       |  |  |   |     | 
|                                                            |  |                                      |       |  
|Present value of the total of future minimum lease payments |  | ¥                                    | 5,038 |   |                                                          | ¥ | 731 |      |  |   |       |  |  |   |     | 
|                                                            |  |                                      |       |   |                                                          |   |     |      |  |   |       |  |  |   |     | 



52



---

|                                                            |  |                                      |        |   |                                                          |   |        | 
|----------------------------------------------------------- |  | ------------------------------------ | ------ | - | -------------------------------------------------------- | - | ------ | 
|                                                            |  | Thousands of U.S. Dollars            |       
|                                                            |  | Total ofFuture MinimumLease Payments |        |   | Present Value ofthe Total ofFuture MinimumLease Payments |  
|                                                            |  | As ofMarch 31,2016                   |        |   | As ofMarch 31,2016                                       |  
|                                                            |  |                                     
|Not later than one year                                     |  | $                                    | 8,688  |   |                                                          | $ | 7,952  | 
|Later than one year and not later than five years           |  |                                      | 23,367 |   |                                                          |   | 21,592 | 
|Later than five years                                       |  |                                      | 15,771 |   |                                                          |   | 15,167 | 
|                                                            |  |                                      |        |   |                                                          |   |        | 
|                                                            |  |                                     
|Total                                                       |  |                                      | 47,826 |   |                                                          | $ | 44,711 | 
|                                                            |  |                                      |        |   |                                                          |   |        | 
|                                                            |  |                                     
|Less: Future finance costs                                  |  |                                      | (3,115 | ) |                                                          |   |        | 
|                                                            |  |                                      |        |   |                                                          |   |        | 
|                                                            |  |                                     
|Present value of the total of future minimum lease payments |  | $                                    | 44,711 |   |                                                          |   |        | 
|                                                            |  |                                      |        |   |                                                          |   |        | 



| | (2) | Operating Leases
| | --- | ----------------

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, 2016, 2015 and 2014, were ¥11,733 million ($104,127 thousand) (unaudited), ¥9,864 million (unaudited) 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. Dollars |  
|                                                  |  | Year EndedMarch 31 |        |  | Year Ended
March 31,      |  
|                                                  |  | 2016               |        |  | 2015                      |   |        | 2014 |  |   | 2016      | 
|                                                  |  | Unaudited          |        |  | Unaudited                 |   |        |      |  |   | Unaudited | 
|                                                  |  |                    |        | 
|Not later than one year                           |  | ¥                  | 11,302 |  |                           | ¥ | 8,206  |      |  | ¥ | 8,003     |  |  | $ | 100,302 | 
|Later than one year and not later than five years |  |                    | 37,465 |  |                           |   | 5,724  |      |  |   | 11,725    |  |  |   | 332,490 | 
|Later than five years                             |  |                    | 15,742 |  |                           |   | 586    |      |  |   | 646       |  |  |   | 139,705 | 
|                                                  |  |                    |        |  |                           |   |        |      |  |   |           |  |  |   |         | 
|                                                  |  |                    |        | 
|Total                                             |  | ¥                  | 64,509 |  |                           | ¥ | 14,516 |      |  | ¥ | 20,374    |  |  | $ | 572,497 | 
|                                                  |  |                    |        |  |                           |   |        |      |  |   |           |  |  |   |         | 



53



---

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. Dollars |  
|                                                 |  | Year EndedMarch 31 |       |  | Year Ended
March 31,      |  
|                                                 |  | 2016               |       |  | 2015                      |   |       | 2014 |  |   | 2016      | 
|                                                 |  | Unaudited          |       |  | Unaudited                 |   |       |      |  |   | Unaudited | 
|                                                 |  |                    |       | 
|Not later than one year                          |  | ¥                  | 2,383 |  |                           | ¥ | 2,243 |      |  | ¥ | 2,461     |  |  | $ | 21,149 | 
|Later than one year andnot later than five years |  |                    | 675   |  |                           |   | 736   |      |  |   | 447       |  |  |   | 5,990  | 
|                                                 |  |                    |       |  |                           |   |       |      |  |   |           |  |  |   |        | 
|                                                 |  |                    |       |  |                           |   |       |      |  |   |           |  |  |   |        | 
|Total                                            |  | ¥                  | 3,058 |  |                           | ¥ | 2,979 |      |  | ¥ | 2,908     |  |  | $ | 27,139 | 
|                                                 |  |                    |       |  |                           |   |       |      |  |   |           |  |  |   |        | 



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



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

Numbers of authorized shares and
issued shares are as follows:



|                                     |  |                     |                |   |           |  |                |      |  |  |                      |    
|------------------------------------ |  | ------------------- | -------------- | - | --------- |  | -------------- | ---- |  |  | -------------------- | ---
|                                     |  | Year Ended March 31 |               
|                                     |  | 2016                |                |   | 2015      |  |                | 2014 | 
|                                     |  | Unaudited           |                |   | Unaudited |  |                |      | 
|                                     |  |                     |               
|Authorized sharesCommon stock       |  |                     | 24,160,000,000 |   |           |  | 24,160,000,000 |      |  |  | 24,160,000,000       |    
|                                     |  |                     |               
|Issued shares:                       |  |                     |                |   |           |  |                |      |  |  |                      |    
|Balance at the beginning of the year |  |                     | 5,694,945,000  |   |           |  | 5,694,900,600  |      |  |  | 57,510,554           |    
|Increase                             |  |                     | 346,400(Note 2 | ) |           |  | 44,400(Note 2  | )    |  |  | 5,694,630,346(Note 1 | )  
|                                     |  |                     |               
|Decrease                             |  |                     |                |   |           |  |                |      |  |  | (57,240,300(Note 3   | ) )
|                                     |  |                     |                |   |           |  |                |      |  |  |                      |    
|                                     |  |                     |               
|Balance at the end of the year       |  |                     | 5,695,291,400  |   |           |  | 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, 2016 and 2015 were 2,800,000 shares (unaudited) and 2,800,000 shares (unaudited), respectively.



54



---

| | (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.



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

Total amount of dividends was as follows:



|                                                |  |                  |        |  |                           |   |         |                      |  |   |                      |  |  |             |      |  |                |  |                |  |  |  |              |  |  | 
|----------------------------------------------- |  | ---------------- | ------ |  | ------------------------- | - | ------- | -------------------- |  | - | -------------------- |  |  | ----------- | ---- |  | -------------- |  | -------------- |  |  |  | ------------ |  |  | 
|                                                |  | Millionsof Yen   |        |  | Thousands of U.S. Dollars |   |         | Yen                  |  |   | U.S. Dollars         |  |  |             |      |  |                |  |                | 
|Resolution                                      |  | Total  Dividends |        |  | Total  Dividends          |   |         | Dividends  per Share |  |   | Dividends  per Share |  |  | Record Date |      |  | Effective Date |  |               
|                                                |  |                  |        |  |                           |   |         |                      |  |   |                      |  |  |             |      |  |                |  |                |  |  |  |              |  | 
|Year Ended March 31, 2016 (Unaudited)           |  |                  |        |  |                           |   |         |                      |  |   |                      |  |  |             |      |  |                |  |                |  |  |  |              |  | 
|                                                |  |                  |        |  |                           |   |         |                      |  |   |                      |  |  |             |      |  |                |  |                |  |  |  |              |  | 
|Board of directors meeting held on May 21, 2015 |  | ¥                | 50,433 |  |                           | $ | 447,577 |                      |  | ¥ | 8.86                 |  |  | $           | 0.08 |  |                |  | March 31, 2015 |  |  |  | June 4, 2015 |  | 
|                                                |  |                  |        |  |                           |   |         |                      |  |   |                      |  |  |             |      |  |                |  |                |  |  |  |              |  | 
|Year Ended March 31, 2015 (Unaudited)           |  |                  |        |  |                           |   |         |                      |  |   |                      |  |  |             |      |  |                |  |                |  |  |  |              |  | 
|                                                |  |                  |        |  |                           |   |         |                      |  |   |                      |  |  |             |      |  |                |  |                |  |  |  |              |  | 
|Board of directors meeting held on May 16, 2014 |  | ¥                | 25,224 |  |                           |   |         |                      |  | ¥ | 4.43                 |  |  |             |      |  |                |  | March 31, 2014 |  |  |  | June 5, 2014 |  | 
|                                                |  |                  |        |  |                           |   |         |                      |  |   |                      |  |  |             |      |  |                |  |                |  |  |  |              |  | 
|Year Ended March 31, 2014                       |  |                  |        |  |                           |   |         |                      |  |   |                      |  |  |             |      |  |                |  |                |  |  |  |              |  | 
|Board of directors meeting held on May 17, 2013 |  | ¥                | 23,058 |  |                           |   |         |                      |  | ¥ | 401                  |  |  |             |      |  |                |  | March 31, 2013 |  |  |  | June 6, 2013 |  | 



Dividends to become effective during
the year ending March 31, 2017 (unaudited) are as follows:



|                                                |  |                  |        |  |                           |   |         |                      |  |   |                      |  |  |             |      |  |                |  |                |  |  |  |              |  |  | 
|----------------------------------------------- |  | ---------------- | ------ |  | ------------------------- | - | ------- | -------------------- |  | - | -------------------- |  |  | ----------- | ---- |  | -------------- |  | -------------- |  |  |  | ------------ |  |  | 
|                                                |  | Millionsof Yen   |        |  | Thousands of U.S. Dollars |   |         | Yen                  |  |   | U.S. Dollars         |  |  |             |      |  |                |  |                | 
|Resolution                                      |  | Total  Dividends |        |  | Total  Dividends          |   |         | Dividends  per Share |  |   | Dividends  per Share |  |  | Record Date |      |  | Effective Date |  |               
|                                                |  |                  |        |  |                           |   |         |                      |  |   |                      |  |  |             |      |  |                |  |                |  |  |  |              |  | 
|Board of directors meeting held on May 18, 2016 |  | ¥                | 50,435 |  |                           | $ | 447,595 |                      |  | ¥ | 8.86                 |  |  | $           | 0.08 |  |                |  | March 31, 2016 |  |  |  | June 7, 2016 |  | 



55



---

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

The Company and certain
subsidiaries have 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,
2016, 2015 and 2014 were ¥10 million ($89 thousand) (unaudited), ¥31 million (unaudited) 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, 2016, 2015 and 2014 are as follows. The details of the subsidiaries share option plans are not presented because they are not significant.

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



|                             |  |                                            |  |                                         
|---------------------------- |  | ------------------------------------------ |  | ----------------------------------------
|Options Series               |  | Grant Date                                 |  | Exercise Period                         
|                             |  |                                           
|2005 (Note 1)                |  | May 2, 2006                                |  | June 17, 2015                           
|                             |  |                                           
|2006 (Note 1)                |  | From September 6, 2006 to February 7, 2007 |  | From August 23, 2016 to January 24, 2017
|                             |  |                                           
|2007 (Note 1)                |  | From May 8, 2007to February 13, 2008       |  | From April 24, 2017 to January 30, 2018 
|                             |  |                                           
|2008 (Note 1)                |  | From May 9, 2008to February 10, 2009       |  | From April 25, 2018 to January 27, 2019 
|                             |  |                                           
|2009 (Note 1)                |  | From May 12, 2009to February 10, 2010      |  | From April 28, 2019 to January 27, 2020 
|                             |  |                                           
|2010 (Note 1)                |  | From May 11, 2010to February 8, 2011       |  | From April 27, 2020 to January 25, 2021 
|                             |  |                                           
|2011 (Note 1)                |  | From June 3, 2011to February 17, 2012      |  | From May 20, 2021 to February 3, 2022   
|                             |  |                                           
|20121st (Note 1)2nd (Note 2) |  | From May 16, 2012to March 1, 2013          |  | From May 2, 2022 to February 28, 2023   
|                             |  |                                           
|20131st (Note 3)2nd (Note 4) |  | From May 17, 2013to November 19, 2013      |  | From May 16, 2023 to November 18, 2023  
|                             |  |                                           
|20141st (Note 4)(unaudited)  |  | May 26, 2014                               |  | May 25, 2024                            



56



---

Notes:



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

Share options mainly vest in stages beginning 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 the holder of vested share options retires, those vested share options are forfeited.



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

Share options 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 the holder of vested share options retires, those vested
share options are forfeited.



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

Share options 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 the 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 the holder of vested share options retires, those vested share options are forfeited.



57



---

| | 4. | Vesting condition (unaudited)
| | -- | -----------------------------

Share options vest once the operating income for the fiscal
year exceeds ¥330 billion in any year from the fiscal year ended March 31, 2015 to the fiscal year ending March 31, 2019. Vesting requires continuous service from the grant date to the vesting date. When the holder of vested share
options retires, those vested share options 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, 2016,
2015 and 2014 are nil (unaudited), ¥195 (unaudited) and ¥209, respectively.

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)






¥492Exercise price (yen)






¥492Volatility 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.



58



---

| | (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:



Year Ended March 312016


2015

2014Unaudited


UnauditedNumber of Shares


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


Numberof Shares


Weighted Average Exercise Price (Yen)

Number of Shares


Weighted Average Exercise Price (Yen)Beginning balanceUnexercised


65,586,700



¥429 ($3.81)



64,012,500


¥427


30,850,500


¥ 329Granted










1,950,000


¥492


35,676,000


¥ 508Forfeited


(1,260,700
)


¥450 ($3.99)



(331,400
)

¥475


(1,761,300
)

¥ 370Exercised


(346,400
)


¥331 ($2.94)



(44,400
)

¥325


(752,700
)

¥ 339Matured


(6,100
)


¥680 ($6.03)Ending balanceUnexercised


63,973,500



¥429 ($3.81)



65,586,700


¥429


64,012,500


¥ 427Ending balanceExercisable


3,522,500



¥360 ($3.19)



3,583,700


¥366


3,130,100


¥ 377


The unexercised share options as of March 31, 2016 (unaudited), are as follows:



Range of Exercise Price (Yen)

Number of Shares


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

Weighted Average  RemainingContract Period(Years)201300


943,400


¥270 ($2.40)

5.4301400


25,537,700


¥324 ($2.88)

6.8401500


12,256,300


¥486 ($4.31)

6.7501600


25,236,100


¥514 ($4.56)

7.6Total


63,973,500


¥429 ($3.81)

7.1






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

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



Year Ended March 312016

2015

2014Unaudited

UnauditedOptions Series

Number of Shares Issued


Weighted AverageStock Priceat Exercise (Yen) (U.S. Dollars)

Options Series

Number of Shares Issued


Weighted Average  Stock Price  at Exercise(Yen)

Options Series

Number of Shares Issued


Weighted Average Stock Price at Exercise(Yen)2006


9,900


¥550 ($4.88)

2006


200


¥ 436

2006


12,500


¥ 5192007


34,400


¥530 ($4.70)

2007


7,600


¥ 465

2007


100,100


¥ 5282008


49,900


¥523 ($4.64)

2008


3,000


¥ 458

2008


130,400


¥ 5162009


46,000


¥505 ($4.48)

2009


15,500


¥ 455

2009


283,400


¥ 5152010


80,500


¥508 ($4.51)

2010


8,200


¥ 441

2010


113,200


¥ 5062011


116,500


¥504 ($4.47)

2011


9,400


¥ 448

2011


113,100


¥ 5332012


9,200


¥500 ($4.44)

2012


500


¥ 446




59



---

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



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

The Companys capital management 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.

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, 2016, 2015 and 2014.



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

The Group is exposed to 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.



60



---

| | 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

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 31,2016


2015


2014


2016Unaudited


Unaudited





UnauditedIncrease (decrease) in profit before tax


¥   3



¥   (4)



¥   (11)



$     27Decrease in other comprehensive income before tax effect


(91)



(75)



(43)



(808)




| | (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 31,2016


2015


2014


2016Unaudited


Unaudited





UnauditedDecrease in other comprehensive income before tax effect


¥  1,966



¥  1,438



¥  1,837



$  17,448




61



---

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

The Groups use of funds for investing activities is exposed to
interest rate risk. To prevent or reduce interest rate risk, the Company maintains an appropriate mix between fixed and floating interest rate debts and constantly monitors the interest rate fluctuations of the floating interest rate debts.

Interest rate sensitivity analysis

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 are constant.



Millions of Yen


Thousands of U.S. DollarsYear EndedMarch 31


Year EndedMarch 31,2016


2015


2014


2016Unaudited


Unaudited





UnauditedDecrease in profit before tax

¥
52


¥
3






$
461Decrease in other Decrease in other comprehensive income before tax effect


533



724


¥
1,109



4,730




| | 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 customers 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.



62



---

The carrying amount of financial instruments, net of impairment, which is presented in the
consolidated 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 35. Contingencies.

Trade and other receivables
include security deposits received as credit enhancements. Such deposits as of March 31, 2016 and 2015 were ¥1,234 million ($10,951 thousand) (unaudited) and ¥919 million (unaudited), respectively.

Foreign exchange dealings deposits from customers include security deposits received from customers. Such deposits as of March 31, 2016
and 2015 were ¥95,285 million ($845,625 thousand) (unaudited) and ¥97,178 million (unaudited), 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 limits its use of funds 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.



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

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

As of March 31, 2016

Millions of YenFinancial Assets

FinancialAssetsat FVTPL

Available-for-Sale FinancialAssets

Loans andReceivables

TotalCurrent assets:Trade and other receivables












¥
305,759



¥
305,759Other financial assets


¥
20,765



¥
1,761




7,592




30,118Non-current assetsOther financial assets



307




57,599




12,416




70,322Total


¥
21,072



¥
59,360



¥
325,767



¥
406,199




Millions of YenFinancial Liabilities

FinancialLiabilitiesat FVTPL

FinancialLiabilities atAmortized Cost

TotalCurrent liabilities:Trade and other payables







¥
270,767



¥
270,767Other financial liabilities


¥
3,747




14,541




18,288Non-current liabilitiesOther financial liabilities



6




10,557




10,563Total


¥
3,753



¥
295,865



¥
299,618




63



---

Thousands of U.S. DollarsFinancial Assets

FinancialAssetsat FVTPL


Available-for-Sale FinancialAssets


Loans andReceivables


TotalCurrent assets:Trade and other receivables









$
2,713,516


$
2,713,516Other financial assets

$
184,283


$
15,628



67,377



267,288Non-current assetsOther financial assets


2,724



511,174



110,188



624,086Total

$
187,007


$
526,802


$
2,891,081


$
3,604,890




Thousands of U.S. DollarsFinancial Liabilities

FinancialLiabilitiesat FVTPL


FinancialLiabilities atAmortized Cost


TotalCurrent liabilities:Trade and other payables





$
2,402,973


$
2,402,973Other financial liabilities

$
33,253



129,047



162,300Non-current liabilitiesOther financial liabilities


53



93,690



93,743Total

$
33,306


$
2,625,710


$
2,659,016


As of March 31, 2015



Millions of YenFinancial Assets

FinancialAssetsat 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




64



---

|26. | FAIR VALUE OF FINANCIAL INSTRUMENTS (UNAUDITED)
|--- | -----------------------------------------------



| | (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, 2016 and 2015.

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

As of March 31, 2016



|                                              |  |                 |        |  |         |   |        |         |  |   |        |  |  |   |        | 
|--------------------------------------------- |  | --------------- | ------ |  | ------- | - | ------ | ------- |  | - | ------ |  |  | - | ------ | 
|                                              |  | Millions of Yen |       
|                                              |  | Level 1         |        |  | Level 2 |   |        | Level 3 |  |   | Total  | 
|                                              |  |                 |        | 
|Financial assets at FVTPL:                    |  |                 |        |  |         |   |        |         |  |   |        |  |  |   |        | 
|Derivatives used in foreign exchange dealings |  |                 |        |  |         | ¥ | 20,766 |         |  |   |        |  |  | ¥ | 20,766 | 
|Others                                        |  |                 |        |  |         |   |        |         |  | ¥ | 307    |  |  |   | 307    | 
|Available-for-sale financial assets:          |  |                 |        |  |         |   |        |         |  |   |        |  |  |   |        | 
|Equity securities                             |  | ¥               | 19,922 |  |         |   |        |         |  |   | 23,197 |  |  |   | 43,119 | 
|Debt securities                               |  |                 |        |  |         |   | 8,020  |         |  |   | 1,328  |  |  |   | 9,348  | 
|Others                                        |  |                 |        |  |         |   | 90     |         |  |   | 6,802  |  |  |   | 6,892  | 
|                                              |  |                 |        |  |         |   |        |         |  |   |        |  |  |   |        | 
|                                              |  |                 |        | 
|Total                                         |  | ¥               | 19,922 |  |         | ¥ | 28,876 |         |  | ¥ | 31,634 |  |  | ¥ | 80,432 | 
|                                              |  |                 |        |  |         |   |        |         |  |   |        |  |  |   |        | 
|                                              |  |                 |        | 
|Financial liabilities at FVTPL:               |  |                 |        |  |         |   |        |         |  |   |        |  |  |   |        | 
|Derivatives used in foreign exchange dealings |  |                 |        |  |         | ¥ | 3,747  |         |  |   |        |  |  | ¥ | 3,747  | 
|Others                                        |  |                 |        |  |         |   | 6      |         |  |   |        |  |  |   | 6      | 
|                                              |  |                 |        |  |         |   |        |         |  |   |        |  |  |   |        | 
|                                              |  |                 |        | 
|Total                                         |  |                 |        |  |         | ¥ | 3,753  |         |  |   |        |  |  | ¥ | 3,753  | 
|                                              |  |                 |        |  |         |   |        |         |  |   |        |  |  |   |        | 



65



---

Thousands of U.S. DollarsLevel 1


Level 2


Level 3


TotalFinancial assets at FVTPL:Derivatives used in foreign exchange dealings





$
184,292






$
184,292Others









$
2,725



2,725Available-for-sale financial assets:Equity securities

$
176,802







205,866



382,668Debt securities






71,175



11,786



82,961Others






799



60,365



61,164Total

$
176,802


$
256,266


$
280,742


$
713,810Financial liabilities at FVTPL:Derivatives used in foreign exchange dealings





$
33,253






$
33,253Others






54







54Total





$
33,307






$
33,307


As of March 31, 2015



Millions of YenLevel 1


Level 2


Level 3


TotalFinancial assets at FVTPL:Derivatives used in foreign exchange 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 foreign exchange dealings





¥
9,070






¥
9,070Total





¥
9,070






¥
9,070




| | (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 measured 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.



66



---

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
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 ofMarch 312016

2015Available-for-sale financial 
assets (equity securities)

Discounted cash flow

Capital cost

12.4%


12.6%Perpetual growth rate

1.2%


2.0%Financial assets at FVTPL (other)

Monte Carlo simulation

Expected normal distribution of operating profit

¥(150) million($(1,331) thousand)


¥1,500 million


Perpetual growth rate has 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. Other than those above, certain financial assets are measured by using the Guideline Transaction Method.



| | 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, 2016



Millions of YenFinancialAssets atFVTPL


Available-for-SaleFinancial AssetsEquity


DebtOther


Securities


Securities


OtherAs of April 1, 2015

¥
1,144


¥
15,985


¥
1,806


¥
3,535Gains or losses:Profit for the year (Note 1)


(52
)


(1,362
)


(1,038
)


(147
)Other comprehensive income (Note 2)






(1,750
)


(2
)


(199
)Business combinations (Note 3)






1,167



1,660



11Purchases


1



7,170



1,072



3,628Transfers from level 3 to level 1 (Note 4)






(300
)Reclassification (Note 5)


(786
)


2,701



(1,771
)Others






(414
)


(399
)


(26
)As of March 31, 2016

¥
307


¥
23,197


¥
1,328


¥
6,802




67



---

Thousands of U.S. DollarsFinancialAssets atFVTPL


Available-for-SaleFinancial AssetsEquity


DebtOther


Securities


Securities


OtherAs of April 1, 2015

$
10,153


$
141,862


$
16,028


$
31,372Gains or losses:Profit for the year (Note 1)


(461
)


(12,087
)


(9,212
)


(1,305
)Other comprehensive income (Note 2)






(15,531
)


(18
)


(1,766
)Business combinations (Note 3)






10,357



14,732



98Purchases


9



63,632



9,514



32,197Transfers from level 3 to level 1 (Note 4)






(2,662
)Reclassification (Note 5)


(6,976
)


23,971



(15,717
)Others






(3,676
)


(3,541
)


(231
)As of March 31, 2016

$
2,725


$
205,866


$
11,786


$
60,365


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 mainly to ASKUL, a new subsidiary
| | -- | -------------------------------------



| | 4. | Due to newly listed investees
| | -- | -----------------------------



| | 5. | Due to conversion of convertible bonds with share subscription rights of Signal Digital, Inc. into shares in February 2016.
| | -- | ---------------------------------------------------------------------------------------------------------------------------

For the Year Ended March 31, 2015



Millions of YenFinancialAssets atFVTPL


Available-for-SaleFinancial AssetsEquity


DebtOther


Securities


Securities


OtherAs 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

¥
1,144


¥
15,985


¥
1,806


¥
3,535




68



---

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. | 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 of, and the unrealized revaluation gain of ¥6,249 million 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 30. Other non-operating income.)
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | Due to newly listed investees
| | -- | -----------------------------



| | 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. The result of the fair value measurement, including the valuation by the external specialists, is reviewed by managers of the investment management department and approved by the Chief Financial Officer (Vice
President and Executive Director).



|27. | TRANSFERS OF FINANCIAL ASSETS (UNAUDITED)
|--- | -----------------------------------------

The Company enters into securitization
transactions involving trade and other receivables. Certain securitized receivables have recourse that makes the Group obliged to pay in the case of the debtors default. Such receivables are not derecognized because they do not meet the
criteria for derecognition of financial assets.

The Group recorded ¥7,497 million ($66,534 thousand) of such transferred
assets in trade and other receivables as of March 31, 2016. In addition, the Group recorded ¥7,500 million ($66,560 thousand) of other financial liabilities for the cash received at the time of transfer of the securitized assets.
This liability will be settled when the payment for the transferred assets is executed; however, the Group is unable to utilize the transferred assets until then.



69



---

|28. | REVENUE
|--- | -------

The components of revenue are as follows:



|                     |  |                    |         |  |                            |   |         |      |  |   |           |  |  |   |           | 
|-------------------- |  | ------------------ | ------- |  | -------------------------- | - | ------- | ---- |  | - | --------- |  |  | - | --------- | 
|                     |  | Millions of Yen    |         |  | Thousands of  U.S. Dollars |  
|                     |  | Year EndedMarch 31 |         |  | Year EndedMarch 31,        |  
|                     |  | 2016               |         |  | 2015                       |   |         | 2014 |  |   | 2016      | 
|                     |  | Unaudited          |         |  | Unaudited                  |   |         |      |  |   | Unaudited | 
|                     |  |                    |         | 
|Services             |  | ¥                  | 470,847 |  |                            | ¥ | 428,488 |      |  | ¥ | 408,515   |  |  | $ | 4,178,621 | 
|Sale of goods (Note) |  |                    | 181,480 |  |                            |   |         |      |  |   |           |  |  |   | 1,610,579 | 
|                     |  |                    |         |  |                            |   |         |      |  |   |           |  |  |   |           | 
|                     |  |                    |         | 
|Total                |  | ¥                  | 652,327 |  |                            | ¥ | 428,488 |      |  | ¥ | 408,515   |  |  | $ | 5,789,200 | 
|                     |  |                    |         |  |                            |   |         |      |  |   |           |  |  |   |           | 



| | Note: | Sale of goods includes ASKULs operating results on and after the acquisition date. For details, please refer to Note 5. Business combinations.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------



|29. | COST OF SALES AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
|--- | --------------------------------------------------------------

The components of cost
of sales and selling, general and administrative expenses presented by nature of the expenses are as follows:



|                              |  |                    |   |                          |  |      |  |           |         |  |  |  |   |         |  |  |  |   |           | 
|----------------------------- |  | ------------------ | - | ------------------------ |  | ---- |  | --------- | ------- |  |  |  | - | ------- |  |  |  | - | --------- | 
|                              |  | Millions of Yen    |   | Thousands ofU.S. Dollars
|                              |  | Year EndedMarch 31 |   | Year EndedMarch 31,     
|                              |  | 2016               |   | 2015                     |  | 2014 |  | 2016     
|                              |  | Unaudited          |   | Unaudited                |  |      |  | Unaudited
|                              |  |                    |   |                         
|Cost of goods sold            |  |                    | ¥ | 143,695                  |  |      |  |           |         |  |  |  |   |         |  |  |  | $ | 1,275,248 | 
|Personnel expenses            |  |                    |   | 66,031                   |  |      |  | ¥         | 48,875  |  |  |  | ¥ | 45,945  |  |  |  |   | 586,005   | 
|Business commissions          |  |                    |   | 57,037                   |  |      |  |           | 52,747  |  |  |  |   | 49,788  |  |  |  |   | 506,186   | 
|Sales promotion costs         |  |                    |   | 41,484                   |  |      |  |           | 15,267  |  |  |  |   | 14,116  |  |  |  |   | 368,158   | 
|Sales commissions             |  |                    |   | 37,372                   |  |      |  |           | 35,158  |  |  |  |   | 28,638  |  |  |  |   | 331,665   | 
|Depreciation and amortization |  |                    |   | 30,698                   |  |      |  |           | 16,936  |  |  |  |   | 13,452  |  |  |  |   | 272,435   | 
|Information services          |  |                    |   | 30,686                   |  |      |  |           | 17,697  |  |  |  |   | 13,832  |  |  |  |   | 272,329   | 
|Royalty charge                |  |                    |   | 12,663                   |  |      |  |           | 11,648  |  |  |  |   | 11,439  |  |  |  |   | 112,380   | 
|Others                        |  |                    |   | 67,359                   |  |      |  |           | 32,948  |  |  |  |   | 34,867  |  |  |  |   | 597,790   | 
|                              |  |                    |   |                          |  |      |  |           |         |  |  |  |   |         |  |  |  |   |           | 
|                              |  |                    |   |                         
|Total                         |  |                    | ¥ | 487,025                  |  |      |  | ¥         | 231,276 |  |  |  | ¥ | 212,077 |  |  |  | $ | 4,322,196 | 
|                              |  |                    |   |                          |  |      |  |           |         |  |  |  |   |         |  |  |  |   |           | 



70



---

|30. | 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,        |  
|                                                                                 |  | 2016               |       |  | 2015                       |   |        | 2014 |  |   | 2016      | 
|                                                                                 |  | Unaudited          |       |  | Unaudited                  |   |        |      |  |   | Unaudited | 
|                                                                                 |  |                    |       | 
|Gain on remeasurement of investments in an associate acquired in stages (Note 1) |  |                    |       |  |                            | ¥ | 6,249  |      |  |   |           |  |  |   |        | 
|Negative goodwill arising from reclassification of investments (Note 2)          |  |                    |       |  |                            |   | 2,481  |      |  |   |           |  |  |   |        | 
|Gain on sale of investment securities                                            |  | ¥                  | 1,532 |  |                            |   | 653    |      |  | ¥ | 11,769    |  |  | $ | 13,596 | 
|Others                                                                           |  |                    | 1,484 |  |                            |   | 1,255  |      |  |   | 1,425     |  |  |   | 13,170 | 
|                                                                                 |  |                    |       |  |                            |   |        |      |  |   |           |  |  |   |        | 
|                                                                                 |  |                    |       | 
|Total                                                                            |  | ¥                  | 3,016 |  |                            | ¥ | 10,638 |      |  | ¥ | 13,194    |  |  | $ | 26,766 | 
|                                                                                 |  |                    |       |  |                            |   |        |      |  |   |           |  |  |   |        | 

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 of, and the unrealized revaluation gain of
¥6,249 million (unaudited) 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.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



71



---

|31. | 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, 2016, 2015 and 2014, were as follows:



|                                                                         |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|------------------------------------------------------------------------ |  | ------------------ | ------ | - | -------------------------- | - | ------ | ---- |  | - | --------- | - |  | - | ------- | -
|                                                                         |  | Millions of Yen    |        |   | Thousands of  U.S. Dollars |  
|                                                                         |  | Year EndedMarch 31 |        |   | Year Ended
March 31,       |  
|                                                                         |  | 2016               |        |   | 2015                       |   |        | 2014 |  |   | 2016      |  
|                                                                         |  | Unaudited          |        |   | Unaudited                  |   |        |      |  |   | Unaudited |  
|                                                                         |  |                    |        |  
|Items that may be reclassified subsequently toprofit or loss:            |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|Available-for-sale financial assets:                                     |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|Amount arising during the year                                           |  | ¥                  | 4,171  |   |                            | ¥ | 5,641  |      |  | ¥ | 12,595    |   |  | $ | 37,016  |  
|Reclassification adjustments                                             |  |                    | (1,508 | ) |                            |   | (6,322 | )    |  |   | (4,678    | ) |  |   | (13,383 | )
|                                                                         |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|Before tax effect                                                        |  |                    | 2,663  |   |                            |   | (681   | )    |  |   | 7,917     |   |  |   | 23,633  |  
|Income tax effect                                                        |  |                    | (604   | ) |                            |   | 722    |      |  |   | (2,819    | ) |  |   | (5,360  | )
|                                                                         |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|                                                                         |  |                    |        |  
|Available-for-sale financial assets, after tax effect                    |  |                    | 2,059  |   |                            |   | 41     |      |  |   | 5,098     |   |  |   | 18,273  |  
|                                                                         |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|                                                                         |  |                    |        |  
|Exchange differences on translating foreign operations:                  |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|Amount arising during the year                                           |  |                    | (810   | ) |                            |   | 928    |      |  |   | 175       |   |  |   | (7,189  | )
|                                                                         |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|Reclassification adjustments                                             |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|Before tax effect                                                        |  |                    | (810   | ) |                            |   | 928    |      |  |   | 175       |   |  |   | (7,189  | )
|                                                                         |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|Income tax effect                                                        |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|                                                                         |  |                    |        |  
|Exchange differences on translating foreign operations, after tax effect |  |                    | (810   | ) |                            |   | 928    |      |  |   | 175       |   |  |   | (7,189  | )
|                                                                         |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|                                                                         |  |                    |        |  
|Share of other comprehensive income of associates:                       |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|Amount arising during the year                                           |  |                    | (237   | ) |                            |   | 976    |      |  |   | 191       |   |  |   | (2,103  | )
|                                                                         |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|Income tax effect                                                        |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|                                                                         |  |                    |        |  
|Share of other comprehensive income of associates, after tax effect      |  |                    | (237   | ) |                            |   | 976    |      |  |   | 191       |   |  |   | (2,103  | )
|                                                                         |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  
|                                                                         |  |                    |        |  
|Other comprehensive income, net of tax                                   |  | ¥                  | 1,012  |   |                            | ¥ | 1,945  |      |  | ¥ | 5,464     |   |  | $ | 8,981   |  
|                                                                         |  |                    |        |   |                            |   |        |      |  |   |           |   |  |   |         |  



72



---

|32. | EARNINGS PER SHARE
|--- | ------------------

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



|                                                                                                                        |                                                                                                             |                     |                                                                                                                                                                            |                           |                                                                                                                                                                            |                 |  |               
|----------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------- | ------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------- |  | --------------
|                                                                                                                        |                                                                                                             | Millions of Yen     |                                                                                                                                                                            | Thousands of
U.S. Dollars
|                                                                                                                        |                                                                                                             | Year Ended
March 31 |                                                                                                                                                                            | Year Ended
March 31,     
|                                                                                                                        |                                                                                                             | 2016                |                                                                                                                                                                            | 2015                      |                                                                                                                                                                            | 2014            |  | 2016          
|                                                                                                                        |                                                                                                             | Unaudited           |                                                                                                                                                                            | Unaudited                 |                                                                                                                                                                            |                 |  | Unaudited     
|                                                                                                                        |                                                                                                             |                     |                                                                                                                                                                            |                          
|Basic earnings per share (yen and U.S. dollars)                                                                         |                                                                                                             | ¥30.15              |                                                                                                                                                                            | ¥23.37                    |                                                                                                                                                                            | ¥22.43          |  | $0.27         
|Profit for the year attributable to owners of the parent                                                                |                                                                                                             | ¥171,617            |                                                                                                                                                                            | ¥133,052                  |                                                                                                                                                                            | ¥128,605        |  | $    1,523,048
|Profit for the year not attributable to owners of the parent                                                            |                                                                                                             |                     |                                                                                                                                                                            |                           |                                                                                                                                                                            |                 |  |               
|Profit for the year used in the calculation of basic earnings per share                                                 |                                                                                                             | ¥171,617            |                                                                                                                                                                            | ¥133,052                  |                                                                                                                                                                            | ¥128,605        |  | $    1,523,048
|Weighted-average number of common stock (thousands of shares)                                                           |                                                                                                             | 5,692,340           |                                                                                                                                                                            | 5,692,891                 |                                                                                                                                                                            | 5,732,878       |  |               
|                                                                                                                        |                                                                                                             |                     |                                                                                                                                                                            |                          
|Diluted earnings per share (yen and U.S. dollars)                                                                       |                                                                                                             | ¥30.14              |                                                                                                                                                                            | ¥23.37                    |                                                                                                                                                                            | ¥22.43          |  | $0.27         
|Adjustments on profit for the year                                                                                      |                                                                                                             |                     |                                                                                                                                                                            |                           |                                                                                                                                                                            |                 |  |               
|Increase in the number of common stock (thousands of shares)                                                            |                                                                                                             | 1,031               |                                                                                                                                                                            | 812                       |                                                                                                                                                                            | 1,369           |  |               
|                                                                                                                        |                                                                                                             |                     |                                                                                                                                                                            |                          
|Potential common stock that are anti-dilutive and therefore excluded from the
calculation of diluted earnings per share |                                                                                                             | Options series:     |                                                                                                                                                                            | Options series:           |                                                                                                                                                                            | Options series: |  |               
|                                                                                                                        | 20073rd,
20081st,
20122nd,
20131st and
2nd;
20141st 
(Please refer to Note 24.
Share-based payment.) |                     | 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
(Please refer to Note 24.
Share-based payment.) |                           | 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.) |                 | 



73



---

|33. | SUPPLEMENTAL INFORMATION TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
|--- | ---------------------------------------------------------------------



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

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

For the Year Ended March 31, 2016 (Unaudited)

During the year, ASKUL became a subsidiary of the Company as a result of the repurchase of its treasury shares. For fair value of the acquired
assets and assumed liabilities, and non-controlling interests and goodwill, please refer to Note 5. Business combinations.

For the Year Ended March 31, 2015 (Unaudited)

Investments in 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. The carrying amount of the investments at the time of conversion was ¥23,167 million, 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) | Net Cash Outflow on Obtaining Control of Subsidiaries (Unaudited)
| | --- | -----------------------------------------------------------------

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
|                                                                                          |  | Year EndedMarch 31 |   | Year EndedMarch 31,       
|                                                                                          |  | 2016               |   | 2015                       |   | 2016
|                                                                                          |  |                    |  
|Assets acquired                                                                           |  |                    | ¥ | 38,409                     |   |      |  | ¥ | 67,129  |   |  |  | $ | 340,868  |  
|Liabilities assumed                                                                       |  |                    |   | (13,492                    | ) |      |  |   | (38,225 | ) |  |  |   | (119,737 | )
|                                                                                          |  |                    |   |                            |   |      |  |   |         |   |  |  |   |          |  
|                                                                                          |  |                    |  
|Net assets of new subsidiaries (before deducting cash assumed at the time of acquisition) |  |                    |   | 24,917                     |   |      |  |   | 28,904  |   |  |  |   | 221,131  |  
|Goodwill                                                                                  |  |                    |   | 74,821                     |   |      |  |   | 11,559  |   |  |  |   | 664,013  |  
|Non-controlling interests                                                                 |  |                    |   | (1,687                     | ) |      |  |   | (8,315  | ) |  |  |   | (14,972  | )
|                                                                                          |  |                    |   |                            |   |      |  |   |         |   |  |  |   |          |  
|                                                                                          |  |                    |  
|Fair value of consideration paid                                                          |  |                    |   | 98,051                     |   |      |  |   | 32,148  |   |  |  |   | 870,172  |  
|                                                                                          |  |                    |  
|Cash assumed at the time of acquisition                                                   |  |                    |   | (5,219                     | ) |      |  |   | (10,386 | ) |  |  |   | (46,317  | )
|                                                                                          |  |                    |   |                            |   |      |  |   |         |   |  |  |   |          |  
|                                                                                          |  |                    |  
|Net cash outflow on obtaining control of subsidiaries                                     |  |                    | ¥ | 92,832                     |   |      |  | ¥ | 21,762  |   |  |  | $ | 823,855  |  
|                                                                                          |  |                    |   |                            |   |      |  |   |         |   |  |  |   |          |  



74



---

|34. | 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.



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

Year Ended
March 31, 2016 (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)

¥
12,652


¥
3,350A company in which a majority of its voting rights is held by a close family member of the
Companys director

MOVIDA JAPAN Inc. (Note 2)

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


21A company in which a majority of its voting rights is held by a close family member of the
Companys director

Creative Link Corporation (Note 2)

Commission for providing news content (Note 1)


58



10Commission for advertisement insertion on partner sites (Note 1)


16



2Commission for news content guiding services (Note 1)


19



2Thousands 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)

$
112,283


$
29,730A company in which a majority of its voting rights is held by a close family member of the
Companys director

MOVIDA JAPAN Inc. (Note 2)

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


186A company in which a majority of its voting rights is held by a close family member of the
Companys director

Creative Link Corporation (Note 2)

Commission for providing news content (Note 1)


515



89Commission for advertisement insertion on partner sites (Note 1)


142



18Commission for news content guiding services (Note 1)


169



18


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 director, Mr. Masayoshi Son, holds a majority of the voting rights.
| | -- | -------------------------------------------------------------------------------------------------------------------



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



| | 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.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



75



---

Year Ended March 31, 2015 (Unaudited)



|                                                                                                              |  |                                    |  |                                                                    |  |                      |        |  |                               |   |       | 
|------------------------------------------------------------------------------------------------------------- |  | ---------------------------------- |  | ------------------------------------------------------------------ |  | -------------------- | ------ |  | ----------------------------- | - | ----- | 
|                                                                                                              |  |                                    |  |                                                                    |  | Millions of Yen      |       
|Nature of Relationship                                                                                        |  | Name of Company
or Individual      |  | Nature of Transaction                                              |  | Amount ofTransaction |        |  | OutstandingBalance atYear-End |  
|                                                                                                              |  |                                    |  |                                                                   
|Other related party                                                                                           |  | Yahoo! Inc.                        |  | Payment of royalty (Note 1)                                        |  | ¥                    | 11,606 |  |                               | ¥ | 3,187 | 
|A company in which a majority of its voting rights is held by a close family member of the
Companys Chairman |  | MOVIDA JAPAN Inc. (Note 2)         |  | Commission for fostering and promoting start-up companies (Note 1) |  |                      | 36     |  |                               |   | 3     | 
|A company in which a majority of its voting rights is held by a close family member of the
Companys Chairman |  | Creative Link Corporation (Note 2) |  | Commission for providing news content (Note 1)                     |  |                      | 56     |  |                               |   | 11    | 

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 does not include consumption taxes, whereas outstanding balance at year-end includes consumption taxes.
| | -- | ------------------------------------------------------------------------------------------------------------------------------



| | 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 Yen      |       
|Nature of Relationship                                                                                        |  | Name of the Company
or Individual  |  | Nature of Transaction                                              |  | Amount ofTransaction |        |  | OutstandingBalance
atYear-End |  
|                                                                                                              |  |                                    |  |                                                                   
|Other related party                                                                                           |  | Yahoo! Inc.                        |  | Payment of royalty (Note 1)                                        |  | ¥                    | 11,227 |  |                               | ¥ | 2,950 | 
|President and Representative Director, President Corporate Officer and Chief Executive Officer of
the Company |  | Manabu Miyasaka                    |  | Exercise of share options (Note 2)                                 |  |                      | 11     |  |                               |   |       | 
|                                                                                                              |  |                                    |  | Grant of share options, for consideration (Note 3)                 |  |                      | 13     |  |                               |   | 13    | 
|Chief Operating Officer of the Company                                                                        |  | Kentaro Kawabe                     |  | Grant of share options, for consideration (Note 3)                 |  |                      | 10     |  |                               |   | 10    | 
|A company in which a majority of its voting rights is held by a close family member of the
Companys Chairman |  | MOVIDA JAPAN Inc. (Note 4)         |  | Commission for fostering and promoting start-up companies
(Note 1) |  |                      | 27     |  |                               |   |       | 
|A company in which a majority of its voting rights is held by a close family member of the
Companys Chairman |  | Creative Link Corporation (Note 4) |  | Commission for providing news content (Note 1)                     |  |                      | 54     |  |                               |   | 9     | 

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 transactions does not include consumption taxes, whereas outstanding balance at year-end includes consumption taxes.
| | -- | ------------------------------------------------------------------------------------------------------------------------------



| | 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.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



76



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

Remuneration for major
executives is as follows:



|                     |  |                    |     |  |                           |   |     |      |  |   |           |  |  |   |       | 
|-------------------- |  | ------------------ | --- |  | ------------------------- | - | --- | ---- |  | - | --------- |  |  | - | ----- | 
|                     |  | Millions of Yen    |     |  | Thousands of U.S. Dollars |  
|                     |  | Year EndedMarch 31 |     |  | Year Ended
March 31,      |  
|                     |  | 2016               |     |  | 2015                      |   |     | 2014 |  |   | 2016      | 
|                     |  | Unaudited          |     |  | Unaudited                 |   |     |      |  |   | Unaudited | 
|                     |  |                    |     | 
|Short-term benefits  |  | ¥                  | 406 |  |                           | ¥ | 283 |      |  | ¥ | 311       |  |  | $ | 3,603 | 
|Retirement benefits  |  |                    | 1   |  |                           |   | 1   |      |  |   | 2         |  |  |   | 9     | 
|Share-based payments |  |                    |     |  |                           |   | 2   |      |  |   | 2         |  |  |   |       | 
|                     |  |                    |     |  |                           |   |     |      |  |   |           |  |  |   |       | 
|                     |  |                    |     | 
|Total                |  | ¥                  | 407 |  |                           | ¥ | 286 |      |  | ¥ | 315       |  |  | $ | 3,612 | 
|                     |  |                    |     |  |                           |   |     |      |  |   |           |  |  |   |       | 



|Note: | Remuneration for major executives represents remuneration for the Companys directors (including external directors) and other executive officers.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------



|35. | CONTINGENCIES (UNAUDITED)
|--- | -------------------------



| | (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 ofMarch 31   |         |   | As of
March 31,           |  
|                                                 |  | 2016            |         |   | 2015                      |   |         | 2016 | 
|                                                 |  |                 |        
|Total amount of committed lines of cash advances |  | ¥               | 194,620 |   |                           | ¥ | 259,736 |      |  | $ | 1,727,192 |  
|Outstanding balance                              |  |                 | (6,638  | ) |                           |   | (8,689  | )    |  |   | (58,910   | )
|                                                 |  |                 |         |   |                           |   |         |      |  |   |           |  
|                                                 |  |                 |        
|Remaining balance                                |  | ¥               | 187,982 |   |                           | ¥ | 251,047 |      |  | $ | 1,668,282 |  
|                                                 |  |                 |         |   |                           |   |         |      |  |   |           |  



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

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



|                                  |  |                 |        |  |                           |   |        |      |  |   |         | 
|--------------------------------- |  | --------------- | ------ |  | ------------------------- | - | ------ | ---- |  | - | ------- | 
|                                  |  | Millions of Yen |        |  | Thousands of U.S. Dollars |  
|                                  |  | As ofMarch 31   |        |  | As of
March 31,           |  
|                                  |  | 2016            |        |  | 2015                      |   |        | 2016 | 
|                                  |  |                 |       
|Total amount of credit guarantees |  | ¥               | 13,822 |  |                           | ¥ | 13,447 |      |  | $ | 122,666 | 
|Balance of credit guarantees      |  |                 | 10,418 |  |                           |   | 10,427 |      |  |   | 92,457  | 



77



---

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

The consolidated financial statements
have been authorized for issue by Mr. Manabu Miyasaka, President and Representative Director, President Corporate Officer and Chief Executive Officer, and Mr. Toshiki Oya, Senior Executive Vice President Corporate Officer and
Chief Financial Officer, on September 19, 2016.

* * * * * *



78