----

| ☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---------|------------------------------------------------------------------------------------------------|

| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---------|--------------------------------------------------------------------------------------|

| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---------|------------------------------------------------------------------------------------------|

| ☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report _______________________For the transition period from _________ to _________ |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| LINE Corporation                                | Japan                                           |
|-------------------------------------------------|-------------------------------------------------|
| (Translation of Registrant's name into English) | (Jurisdiction of incorporation or organization) |

| Title of Each Class                           | Name of Each Exchange on Which Registered |
|-----------------------------------------------|-------------------------------------------|
|                                          |                                      |
| American Depositary Shares, each representing | New York Stock Exchange, Inc.             |
| one share of common stock                     |                                      |
|                                          |                                      |
| Common Stock *                                | New York Stock Exchange, Inc. *           |

----

----

| PART I                                                                                         |   |
|------------------------------------------------------------------------------------------------|--------|
| ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGERS AND ADVISERS                                    | 1      |
| ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE                                                | 1      |
| ITEM 3. KEY INFORMATION                                                                        | 1      |
| Item 3.A.     Selected Financial Data                                      | 1      |
| Item 3.B.      Capitalization and Indebtedness                        | 3      |
| Item 3.C.      Reasons for the Offer and Use of Proceeds              | 3      |
| Item 3.D.      Risk Factors                                           | 4      |
| ITEM 4.  INFORMATION ON THE COMPANY                                                       | 33     |
| Item 4.A.     History and Development of the Company                  | 33     |
| Item 4.B.      Business Overview                                      | 34     |
| Item 4.C.      Organizational Structure                               | 49     |
| Item 4.D.      Property, Plants and Equipment                         | 49     |
| ITEM 4A. UNRESOLVED STAFF COMMENTS                                                             | 50     |
| ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                           | 50     |
| Item 5.A.     Operating Results                                       | 50     |
| Item 5.B.      Liquidity and Capital Resources                        | 72     |
| Item 5.C.      Research and Development, Patents and Licenses, Etc.   | 81     |
| Item 5.D.     Trend Information                                            | 81     |
| Item 5.E.      Off‐balance Sheet Arrangements                   | 81     |
| Item 5.F.      Tabular Disclosure of Contractual Obligations          | 81     |
| Item 5.G.      Safe Harbor                                            | 81     |
| ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                             | 82     |
| Item 6.A.      Directors and Senior Management                        | 82     |
| Item 6.B.      Compensation                                           | 85     |
| Item 6.C.      Board Practices                                        | 86     |
| Item 6.D.      Employees                                              | 88     |
| Item 6.E.      Share Ownership                                        | 88     |
| ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                 | 89     |
| Item 7.A.     Major Shareholders                                      | 89     |
| Item 7.B.      Related Party Transactions                             | 90     |
| Item 7.C.      Interests of Experts and Counsel                       | 90     |
| ITEM 8. FINANCIAL INFORMATION                                                             | 90     |
| Item 8.A.     Consolidated Statements and Other Financial Information | 90     |
| Item 8.B.      Significant Changes                                    | 91     |
| ITEM 9. THE OFFER AND LISTING                                                                  | 91     |
| Item 9.A.     Offer and Listing Details                               | 91     |
| Item 9.B.      Plan of Distribution                                   | 92     |
| Item 9.C.      Markets                                                | 92     |

----

| Item 9.D.      Selling Shareholders                          | 92  |
|---------------------------------------------------------------------------------------|-----|
| Item 9.E.       Dilution                                | 92  |
| Item 9.F.       Expenses of the Issue                   | 92  |
| ITEM 10. ADDITIONAL INFORMATION                                                       | 92  |
| Item 10.A.   Share Capital                                             | 92  |
| Item 10.B.    Memorandum and Articles of Association                   | 92  |
| Item 10.C.    Material Contracts                                       | 102 |
| Item 10.D.    Exchange Controls                                        | 102 |
| Item 10.E.    Taxation                                                 | 104 |
| Item 10.F.    Dividends and Paying Agents                              | 110 |
| Item 10.G.    Statements by Experts                                    | 110 |
| Item 10.H    .Documents on Display                                     | 110 |
| Item 10.I.     Subsidiary Information                             | 110 |
| ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   | 110 |
| ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       | 112 |
| Item 12.A.    Debt Securities                                          | 112 |
| Item 12.B.    Warrants and Rights                                      | 112 |
| Item 12.C.    Other Securities                                         | 112 |
| Item 12.D.   American Depositary Shares                                     | 112 |
| PART II                                                                               | 114 |
| ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              | 114 |
| ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 114 |
| ITEM 15. CONTROLS AND PROCEDURES                                                      | 114 |
| ITEM 16. [RESERVED]                                                                   | 115 |
| ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT                                            | 115 |
| ITEM 16B. CODE OF ETHICS                                                              | 115 |
| ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                      | 115 |
| ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                  | 116 |
| ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS      | 116 |
| ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT                                | 116 |
| ITEM 16G. CORPORATE GOVERNANCE                                                        | 116 |
| ITEM 16H. MINE SAFETY DISCLOSURE                                                      | 118 |
| PART III                                                                              | 119 |
| ITEM 17. FINANCIAL STATEMENTS                                                         | 119 |
| ITEM 18. FINANCIAL STATEMENTS                                                         | 119 |
| ITEM 19. EXHIBITS                                                                     | 120 |

----

|  | • | "daily active users" or "DAUs" refers to the number of user accounts that (i) accessed the LINE messaging application or any LINE Game through mobile devices; (ii) sent messages through the LINE messaging application from personal computers; or (iii) sent messages through any other LINE application from mobile devices, in each case at least once during a given day; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | "paid impression" refers to the display of an advertisement to a user while accessing our products and services for which we generate revenues; |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | "Japanese yen," "yen" or "¥" refers to the legal currency of Japan; |
|--|---------|--------------------------------------------------------------------------|

|  | • | "Korea" refers to the Republic of Korea; |
|--|---------|------------------------------------------|

|  | • | "Korean won," "Won" or "₩" refers to the legal currency of Korea; |
|--|---------|--------------------------------------------------------------------------|

|  | • | "LINE," "we," "us," "our company," "the Company" or "our" refers to LINE Corporation and its consolidated subsidiaries taken as a whole, as well as the messaging application and other products of LINE Corporation; |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | "messages" refers to text messages, voice messages, Stickers and photo, video, voice and text files sent and received, as well as free voice and video calls made and received, in each case using the LINE messaging application from either mobile devices or personal computers or using any LINE Game or any other LINE application from mobile devices; |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | "monthly active users" or "MAUs" in a given month refers to the number of user accounts that (i) accessed the LINE messaging application or any LINE Game through mobile devices; (ii) sent messages through the LINE messaging application from personal computers; or (iii) sent messages through any other LINE application from mobile devices, in each case at least once during that month; |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | "monthly paying users" or "MPUs" in a given month refers to the number of user accounts that made (i) a payment for Stickers, Themes or LINE Out on the LINE messaging application through mobile devices or personal computers or (ii) a payment relating to any LINE Game through mobile devices, in each case at least once during that month; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | "platform partners" refers to application developers and other providers of content offered on the LINE platform; |
|--|---------|-------------------------------------------------------------------------------------------------------------------|

|  | • | "stickers" refers to larger, cartoon-like emoticons that depict emotions and actions of characters, which are exchanged as part of chat messages on mobile messaging applications; and |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | "U.S. dollar," "US$" or "$" refers to the legal currency of the United States. |
|--|---------|--------------------------------------------------------------------------------|

----

|  | • | our ability to attract and retain users and increase the level of engagement of our users; |
|--|---------|--------------------------------------------------------------------------------------------|

|  | • | our ability to improve user monetization; |
|--|---------|-------------------------------------------|

|  | • | our ability to successfully enter new markets and manage our business expansion; |
|--|---------|----------------------------------------------------------------------------------|

|  | • | our ability to compete in the global social network services market; |
|--|---------|----------------------------------------------------------------------|

|  | • | our ability to develop or acquire new products and services, improve our existing products and services and increase the value of our products and services in a timely and cost-effective manner; |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | our ability to maintain good relationships with platform partners and attract new platform partners; |
|--|---------|------------------------------------------------------------------------------------------------------|

|  | • | our ability to attract advertisers to the LINE platform and increase the amount that advertisers spend with LINE; |
|--|---------|-------------------------------------------------------------------------------------------------------------------|

|  | • | our expectations regarding our user growth rate and the usage of our mobile applications; |
|--|---------|-------------------------------------------------------------------------------------------|

|  | • | our ability to increase revenues and our revenue growth rate; |
|--|---------|---------------------------------------------------------------|

|  | • | our ability to timely and effectively scale and adapt our existing technology and network infrastructure; |
|--|---------|-----------------------------------------------------------------------------------------------------------|

|  | • | our ability to successfully acquire and integrate companies and assets; |
|--|---------|-------------------------------------------------------------------------|

|  | • | our future business development, results of operations and financial condition; |
|--|---------|---------------------------------------------------------------------------------|

|  | • | the regulatory environment in which we operate; |
|--|---------|-------------------------------------------------|

|  | • | fluctuations in currency exchange rates and changes in the proportion of our revenues and expenses denominated in foreign currencies; and |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | changes in business or macroeconomic conditions. |
|--|---------|--------------------------------------------------|

----

----

***Item 3.A.    Selected Financial Data***

----

|                                                                                         |   | For the year ended December 31,                       |        |
|----------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|-------------|
|                                                                                         |   | 2012                                                  |        |   | 2013 |   |   | 2014 |   |   | 2015 |   |   | 2016 |   |
|                                                                                         |   | (in millions of yen, except share and per share data) |        |
| Revenues and other operating income:                                                         |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                                                |   | ¥                                                | 6,414       |   |   | ¥ | 39,586 |   |   | ¥ | 86,366 |   |   | ¥ | 120,406 |   |   | ¥ | 140,704 |   |
| Other operating income                                                                       |   |                                                  | 94          |   |   |   | 69 |   |   |   | 296 |   |   |   | 474 |   |   |   | 5,892 |   |
| Total revenues and other operating income                                                    |   |                                                  | 6,508       |   |   |   | 39,655 |   |   |   | 86,662 |   |   |   | 120,880 |   |   |   | 146,596 |   |
|                                                                                         |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses:                                                                          |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Payment processing and licensing expenses                                                    |   |                                                  | (1,878      | ) |   |   | (9,606 | ) |   |   | (20,598 | ) |   |   | (28,742 | ) |   |   | (29,781 | ) |
| Employee compensation expenses                                                               |   |                                                  | (3,929      | ) |   |   | (8,490 | ) |   |   | (18,289 | ) |   |   | (35,572 | ) |   |   | (39,445 | ) |
| Marketing expenses                                                                           |   |                                                  | (599        | ) |   |   | (17,202 | ) |   |   | (18,069 | ) |   |   | (16,596 | ) |   |   | (11,833 | ) |
| Infrastructure and communication expenses                                                    |   |                                                  | (383        | ) |   |   | (2,537 | ) |   |   | (4,492 | ) |   |   | (7,712 | ) |   |   | (7,770 | ) |
| Authentication and other service expenses                                                    |   |                                                  | (1,058      | ) |   |   | (4,914 | ) |   |   | (7,874 | ) |   |   | (12,133 | ) |   |   | (14,394 | ) |
| Depreciation and amortization expenses                                                       |   |                                                  | (805        | ) |   |   | (1,330 | ) |   |   | (2,370 | ) |   |   | (3,733 | ) |   |   | (5,100 | ) |
| Other operating expenses                                                                     |   |                                                  | (1,282      | ) |   |   | (3,313 | ) |   |   | (8,555 | ) |   |   | (14,432 | ) |   |   | (18,376 | ) |
| Total operating expenses                                                                     |   |                                                  | (9,934      | ) |   |   | (47,392 | ) |   |   | (80,247 | ) |   |   | (118,920 | ) |   |   | (126,699 | ) |
| Profit (loss) from operating activities                                                      |   |                                                  | (3,426      | ) |   |   | (7,737 | ) |   |   | 6,415 |   |   |   | 1,960 |   |   |   | 19,897 |   |
| Finance income                                                                          |   |                                                  | 70          |   |   |   | 67 |   |   |   | 86 |   |   |   | 71 |   |   |   | 87 |   |
| Finance costs                                                                           |   |                                                  | (73         | ) |   |   | (39 | ) |   |   | (137 | ) |   |   | (106 | ) |   |   | (65 | ) |
| Share of loss of associates                                                                  |   |                                                  | —     |   |   |   | (243 | ) |   |   | (167 | ) |   |   | (205 | ) |   |   | (833 | ) |
| Gain (loss) on foreign currency transactions, net                                            |   |                                                  | 234         |   |   |   | (373 | ) |   |   | 66 |   |   |   | (520 | ) |   |   | (43 | ) |
| Other non-operating income                                                                   |   |                                                  | —     |   |   |   | 7 |   |   |   | — |   |   |   | 157 |   |   |   | 9 |   |
| Other non-operating expenses                                                                 |   |                                                  | (37         | ) |   |   | — |   |   |   | — |   |   |   | (1,887 | ) |   |   | (1,062 | ) |
| Profit (loss) before tax from continuing operations                                          |   |                                                  | (3,232      | ) |   |   | (8,318 | ) |   |   | 6,263 |   |   |   | (530 | ) |   |   | 17,990 |   |
| Income tax benefits (expenses)                                                               |   |                                                  | (14         | ) |   |   | 648 |   |   |   | (7,151 | ) |   |   | 146 |   |   |   | (8,904 | ) |
| Profit (loss) for the period from continuing operations                                      |   |                                                  | (3,246      | ) |   |   | (7,670 | ) |   |   | (888 | ) |   |   | (384 | ) |   |   | 9,086 |   |
| Profit (loss) from discontinued operations, net of tax                                       |   |                                                  | 2,832       |   |   |   | 1,279 |   |   |   | 2,892 |   |   |   | (7,588 | ) |   |   | (1,982 | ) |
| Profit (loss) for the period                                                                 |   | ¥                                                | (414        | ) |   | ¥ | (6,391 | ) |   | ¥ | 2,004 |   |   | ¥ | (7,972 | ) |   | ¥ | 7,104 |   |
|                                                                                         |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Attributable to:                                                                             |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The shareholder of the Company                                                               |   |                                                  | (214        | ) |   |   | (764 | ) |   |   | 4,207 |   |   |   | (7,582 | ) |   |   | 6,763 |   |
| Non-controlling interests(1)                                                                 |   |                                                  | (200        | ) |   |   | (5,627 | ) |   |   | (2,203 | ) |   |   | (390 | ) |   |   | 341 |   |
|                                                                                         |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share:                                                                          |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic profit (loss) for theperiod attributable to theshareholder of the Company              |   | ¥                                                | (1.36       | ) |   | ¥ | (4.36 | ) |   | ¥ | 24.05 |   |   | ¥ | (43.33 | ) |   | ¥ | 34.84 |   |
| Diluted profit (loss) for theperiod attributable to theshareholder of the Company            |   |                                                  | (1.36       | ) |   |   | (4.36 | ) |   |   | 22.14 |   |   |   | (39.12 | ) |   |   | 31.48 |   |
| Earnings per share from continuing operations                                                |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic profit (loss) fromcontinuing operationsattributable to theshareholder of the Company   |   |                                                  | (19.33      | ) |   |   | (11.67 | ) |   |   | 7.52 |   |   |   | 0.04 |   |   |   | 45.05 |   |
| Diluted profit (loss) fromcontinuing operationsattributable to theshareholder of the Company |   |                                                  | (19.33      | ) |   |   | (11.67 | ) |   |   | 6.92 |   |   |   | 0.03 |   |   |   | 40.70 |   |
| Earnings per share from discontinued operations                                              |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic profit fromdiscontinued operationsattributable to theshareholder of the Company        |   |                                                  | 17.97       |   |   |   | 7.31 |   |   |   | 16.53 |   |   |   | (43.37 | ) |   |   | (10.21 | ) |
| Diluted profit fromdiscontinued operationsattributable to theshareholder of the Company      |   |                                                  | 17.97       |   |   |   | 7.31 |   |   |   | 15.22 |   |   |   | (39.15 | ) |   |   | (9.22 | ) |
|                                                                                         |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic weighted average shares outstanding                                                    |   |                                                  | 157,565,943 |   |   |   | 174,992,000 |   |   |   | 174,992,000 |   |   |   | 174,992,000 |   |   |   | 194,083,995 |   |
|                                                                                         |   |                                                  |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted weighted average shares outstanding                                                  |   |                                                  | 157,565,943 |   |   |   | 174,992,000 |   |   |   | 190,024,846 |   |   |   | 193,797,566 |   |   |   | 214,874,008 |   |

| (1) | For each of the years ended December 31, 2013 and 2014, the non-controlling interests were mainly held by NAVER Corporation, our shareholder. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                       |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |    |
|------------------------------------------------------------|--------|----------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|
|                                                       |   | As of December 31,   |   |
|                                                       |   | 2012                 |   |   | 2013   |   |   | 2014   |   |   | 2015   |   |   | 2016   |    |
|                                                       |   | (in millions of yen) |   |
| Cash and cash equivalents                             |   | ¥               | 7,153  |   |   | ¥ | 13,362 |   |   | ¥ | 20,254 |   |   | ¥ | 33,652  |   |   | ¥ | 134,698 |   |
| Trade and other receivables                           |   |                 | 7,961  |   |   |   | 11,625 |   |   |   | 24,223 |   |   |   | 27,248  |   |   |   | 28,167 |   |
| Property and equipment                                |   |                 | 7,504  |   |   |   | 8,102  |   |   |   | 9,656  |   |   |   | 10,501  |   |   |   | 9,029 |   |
| Total assets                                          |   |                 | 33,085 |   |   |   | 46,522 |   |   |   | 85,664 |   |   |   | 122,159 |   |   |   | 256,089 |   |
| Total liabilities                                     |   |                 | 13,148 |   |   |   | 34,206 |   |   |   | 73,153 |   |   |   | 104,626 |   |   |   | 95,066 |   |
| Total shareholder's equity                            |   |                 | 19,937 |   |   |   | 12,316 |   |   |   | 12,511 |   |   |   | 17,533  |   |   |   | 161,023 |   |
| Equity attributable to theshareholder of the Company  |   |                 | 19,855 |   |   |   | 10,727 |   |   |   | 12,496 |   |   |   | 17,743  |   |   |   | 160,834 |   |
| Equity attributable to non-controlling interests      |   |                 | 82     |   |   |   | 1,589  |   |   |   | 15     |   |   |   | (210    | ) |   |   | 189 |   |

|                          |   |                 |   |   |       |   |   |   |   |   |   |   |
|-------------------------------|--------|----------------------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|
|                          |   | Noon Buying Rate     |   |
| Period                   |   | Average (1)          |   |   | Period End |   |   | High   |   |   | Low    |   |
|                          |   | (¥ per US$1.00) |   |
| 2012                     |   |                 | 80.10  |   |       |   | 86.64  |   |   |   | 86.64  |   |   |   | 76.11 |   |
| 2013                     |   |                 | 98.00  |   |       |   | 105.25 |   |   |   | 105.25 |   |   |   | 86.92 |   |
| 2014                     |   |                 | 106.63 |   |       |   | 119.85 |   |   |   | 121.38 |   |   |   | 101.11 |   |
| 2015                     |   |                 | 121.02 |   |       |   | 120.27 |   |   |   | 125.58 |   |   |   | 116.78 |   |
| 2016                     |   |                 | 109.16 |   |       |   | 116.78 |   |   |   | 121.06 |   |   |   | 100.07 |   |
| September                |   |                 | 101.78 |   |       |   | 101.21 |   |   |   | 104.18 |   |   |   | 100.34 |   |
| October                  |   |                 | 103.91 |   |       |   | 105.07 |   |   |   | 105.40 |   |   |   | 101.54 |   |
| November                 |   |                 | 108.44 |   |       |   | 114.34 |   |   |   | 114.34 |   |   |   | 103.02 |   |
| December                 |   |                 | 116.00 |   |       |   | 116.78 |   |   |   | 118.32 |   |   |   | 113.50 |   |
| 2017  (through March 24) |   | 113.75               |   |   | 111.03     |   |   | 117.68 |   |   | 111.03 |   |
| January                  |   |                 | 114.87 |   |       |   | 112.72 |   |   |   | 117.68 |   |   |   | 112.72 |   |
| February                 |   |                 | 112.91 |   |       |   | 112.06 |   |   |   | 114.34 |   |   |   | 111.74 |   |
| March (through March 24)      |   | 113.46               |   |   | 111.03     |   |   | 115.02 |   |   | 111.03 |   |

----

|  | • | we are unable to continue to offer products and services that users find engaging, that work with a variety of mobile operating systems and networks, and that achieve a high level of market acceptance, particularly in markets that we are targeting for expansion; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | users increasingly engage with competing products or services, particularly communication tools and mobile games; |
|--|---------|-------------------------------------------------------------------------------------------------------------------|

|  | • | we are unable to provide a compelling and intuitive user experience and environment, particularly relating to the quality, volume, design and layout of the content and advertisements delivered on the LINE platform; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | we fail to provide adequate customer service to users or advertisers or maintain relationships with key platform partners such as mobile game developers; |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | there are increased user concerns related to privacy and information sharing, safety or security; |
|--|---------|---------------------------------------------------------------------------------------------------|

|  | • | there are adverse changes in our products or services that are mandated by legislation, regulatory authorities or legal proceedings; |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------|

|  | • | technical or other problems prevent us from delivering our products and services in a rapid and reliable manner or otherwise negatively affect the user experience; or |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | we fail to maintain our brand image or our reputation is damaged. |
|--|---------|-------------------------------------------------------------------|

----

----

----

|  | • | decreases in the number of active users and their engagement; |
|--|---------|---------------------------------------------------------------|

|  | • | our inability to improve our analytics and measurement solutions that demonstrate the value of advertising on LINE or our portals; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------|

|  | • | our inability to create new products or services that sustain or increase the value of advertising on LINE or our portals; |
|--|---------|----------------------------------------------------------------------------------------------------------------------------|

|  | • | product changes we may make that reduce the frequency or relative prominence of advertisements and other commercial content delivered through the LINE platform or our portals; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | our inability to increase the relevance of targeted ads shown to users; |
|--|---------|-------------------------------------------------------------------------|

|  | • | our inability to increase advertisers' demand and inventory; |
|--|---------|--------------------------------------------------------------|

|  | • | loss of advertising market share to our competitors; |
|--|---------|------------------------------------------------------|

|  | • | adverse legal developments relating to advertising; |
|--|---------|-----------------------------------------------------|

|  | • | adverse changes in the way online advertising on personal computers or mobile devices is priced; |
|--|---------|--------------------------------------------------------------------------------------------------|

|  | • | the degree to which users opt out of certain types of targeted ads; |
|--|---------|---------------------------------------------------------------------|

|  | • | the impact of new technologies that could block or obscure the display of some types of advertisements and other commercial content; and |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | the impact of macroeconomic conditions and conditions in the advertising industry in general. |
|--|---------|-----------------------------------------------------------------------------------------------|

----

----

|  | • | providing an engaging user experience while operating in different languages and cultures, and localizing our products, services, content and features to ensure that they are culturally attuned to the markets where they are offered; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | increased competition from mobile applications and internet services that have strong positions in particular markets and may continue to expand their geographic footprint; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | different and potentially lower levels of user growth, user engagement and demand for online advertising in new and emerging geographies, resulting in greater difficulty in monetizing our products and services; |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | recruiting and retaining talented and capable employees in foreign countries and maintaining our company culture across all of our offices; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | different levels of telecommunications infrastructure in developing countries that may create challenges in offering our products and services; |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | payment processing systems; |
|--|---------|-----------------------------|

|  | • | compliance with applicable foreign laws and regulations, including laws and regulations with respect to economic sanctions and export controls, anti-corruption, anti-bribery and anti-kickback, privacy and consumer protection that may conflict with local customs and practices in some jurisdictions in which we operate and sell our products, and the risk of penalties if our practices are deemed not to be in compliance; |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | political, social and economic instability in some countries; |
|--|---------|---------------------------------------------------------------|

|  | • | double taxation of our global earnings and potentially adverse tax consequences due to changes in the tax laws of Japan or other jurisdictions in which we operate; and |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | higher costs of conducting business globally, including increased accounting, travel, infrastructure and legal compliance costs. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------|

----

----

|  | • | sales and marketing; |
|--|---------|----------------------|

|  | • | global expansion; |
|--|---------|-------------------|

|  | • | our technology infrastructure; |
|--|---------|--------------------------------|

|  | • | attracting and retaining talented employees; |
|--|---------|----------------------------------------------|

|  | • | strategic opportunities, including commercial relationships, acquisitions and capital injections; |
|--|---------|---------------------------------------------------------------------------------------------------|

|  | • | operation of newly developed or newly acquired businesses; and |
|--|---------|----------------------------------------------------------------|

|  | • | general administration, including personnel costs and legal and accounting expenses related to being a public company. |
|--|---------|------------------------------------------------------------------------------------------------------------------------|

----

|  | • | increase our number of users and user engagement and monetize our products and services; |
|--|---------|------------------------------------------------------------------------------------------|

|  | • | successfully compete with other companies, some of which have substantially greater resources and market power than us, that are currently in, or may in the future enter, our markets, or duplicate the features of our products and services; |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | successfully expand our business and enhance the LINE brand globally; |
|--|---------|-----------------------------------------------------------------------|

|  | • | continue to develop a reliable, scalable, secure, high-performance technology infrastructure that can efficiently handle increased usage globally; |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | convince advertisers of the benefits of our advertising products and services compared to alternative forms of advertising; |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------|

|  | • | develop and deploy new features, products and services in a timely manner and the market acceptance of such offerings; |
|--|---------|------------------------------------------------------------------------------------------------------------------------|

|  | • | cost-effectively manage and grow our operations; |
|--|---------|--------------------------------------------------|

|  | • | attract and maintain platform partners' interest in building on the LINE platform; |
|--|---------|------------------------------------------------------------------------------------|

|  | • | attract, retain and motivate talented management and employees, particularly software engineers, designers and product managers; |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------|

|  | • | process, store, protect and use personal data in compliance with governmental regulations, contractual obligations and other obligations related to privacy and security; and |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | defend ourselves against litigation and regulatory, intellectual property, privacy or other claims. |
|--|---------|-----------------------------------------------------------------------------------------------------|

----

----

----

|  | • | the development and introduction of new products or services by us or our competitors, particularly the launching of mobile games and Stickers and their market acceptance; |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | our ability to attract and retain advertisers; |
|--|---------|------------------------------------------------|

|  | • | the growth of revenue sources as well as adjustments in fees charged to users and advertisers; |
|--|---------|------------------------------------------------------------------------------------------------|

|  | • | increases in marketing, sales and other operating expenses that we may incur to grow and expand our operations and to remain competitive; |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | seasonal fluctuations in spending by our advertisers, especially in Japan where a majority of companies end their fiscal year on March 31 and advertising spending is traditionally stronger in our fourth and first quarters due to year-end effects and companies trying to spend their advertising budgets before the close of their fiscal year; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | introduction of new products and/or services, which may lead to higher expenses; |
|--|---------|----------------------------------------------------------------------------------|

|  | • | changes in the way online advertising is priced; |
|--|---------|--------------------------------------------------|

|  | • | non-recurring transactions and related accounting and tax implications therefrom; |
|--|---------|-----------------------------------------------------------------------------------|

|  | • | unforeseen contingencies, such as adverse litigation judgments, settlements or other litigation-related costs; |
|--|---------|----------------------------------------------------------------------------------------------------------------|

|  | • | fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies; and |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | changes in business or macroeconomic conditions. |
|--|---------|--------------------------------------------------|

----

----

|  | • | increased operational costs and diversion of management time and effort and other resources to deal with fraudulent or failed transactions or customer disputes; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | the impact on our relationships with existing payment processing service providers; |
|--|---------|-------------------------------------------------------------------------------------|

|  | • | increased capital costs in building out the infrastructure; |
|--|---------|-------------------------------------------------------------|

|  | • | potential fraudulent or otherwise illegal activity by users, platform partners, employees or third parties; |
|--|---------|-------------------------------------------------------------------------------------------------------------|

|  | • | leakage of customers' personal information and concerns over the use and security of collected information; |
|--|---------|-------------------------------------------------------------------------------------------------------------|

|  | • | restrictions on the investment of consumer funds used to transact payments; and |
|--|---------|---------------------------------------------------------------------------------|

|  | • | additional disclosure and reporting requirements. |
|--|---------|---------------------------------------------------|

----

|  | • | diversion of management time and focus from operating our business to addressing acquisition and integration challenges; |
|--|---------|--------------------------------------------------------------------------------------------------------------------------|

|  | • | challenges associated with the integration of product development and sales and marketing functions of the acquired company; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------|

|  | • | challenges associated with the retention of key employees from the acquired company; |
|--|---------|--------------------------------------------------------------------------------------|

|  | • | cultural and operational challenges associated with integrating employees from the acquired company into our organization; |
|--|---------|----------------------------------------------------------------------------------------------------------------------------|

|  | • | challenges associated with the integration of the acquired company's accounting, management information, human resources and other administrative systems; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | the need to implement or improve controls, procedures, and policies at a business that prior to the acquisition may have lacked effective controls, procedures and policies; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | liability for activities of the acquired company before the acquisition, including intellectual property infringement claims; |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------|

|  | • | unanticipated write-offs or charges or impairment of goodwill; and |
|--|---------|--------------------------------------------------------------------|

|  | • | litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former shareholders or other third parties. |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|  | • | licensing and notification requirements; |
|--|---------|------------------------------------------|

|  | • | emergency calling requirements, including enhanced emergency calling through multi-line telephone systems; |
|--|---------|------------------------------------------------------------------------------------------------------------|

|  | • | universal service fund contribution requirements; |
|--|---------|---------------------------------------------------|

|  | • | lawful interception or wiretapping requirements; |
|--|---------|--------------------------------------------------|

|  | • | privacy and data retention and disclosure requirements; |
|--|---------|---------------------------------------------------------|

|  | • | limitations on our ability to use encryption technology; |
|--|---------|----------------------------------------------------------|

|  | • | disability access requirements; |
|--|---------|---------------------------------|

|  | • | consumer protection requirements and local dispute resolution requirements; |
|--|---------|-----------------------------------------------------------------------------|

|  | • | requirements related to customer support; |
|--|---------|-------------------------------------------|

|  | • | quality of service requirements; |
|--|---------|----------------------------------|

|  | • | provision of numbering directories; |
|--|---------|-------------------------------------|

|  | • | numbering rules, including portability requirements; |
|--|---------|------------------------------------------------------|

|  | • | directory and operator services; and |
|--|---------|--------------------------------------|

|  | • | access and interconnection obligations. |
|--|---------|-----------------------------------------|

|  | • | the cost and general impact of compliance would be substantial, may require significant investments and organizational changes and may erode or eliminate our pricing advantage over competing forms of communication and, potentially, our ability to compete effectively; |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | compliance may require us to make certain fundamental and potentially detrimental changes to the products and services we offer and the way we conduct business in certain countries, including withdrawing from markets; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | compliance may be technically difficult or impossible; |
|--|---------|--------------------------------------------------------|

|  | • | we may need to change our distribution, marketing and sales activities; |
|--|---------|-------------------------------------------------------------------------|

|  | • | we may need to terminate or restructure partnerships and other commercial agreements; and |
|--|---------|-------------------------------------------------------------------------------------------|

|  | • | we may need to establish a local presence in any given jurisdiction, sell our products through a local entity and be required to pay new or increased taxes in that jurisdiction. |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

|  | • | price and volume fluctuations in the global stock markets from time to time; |
|--|---------|------------------------------------------------------------------------------|

|  | • | changes in operating performance and stock market valuations of other technology sector companies generally, or those in our industry in particular; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | sales of shares of our common stock by us or our parent company; |
|--|---------|------------------------------------------------------------------|

|  | • | failure of securities analysts and credit rating agencies to maintain coverage of us, changes in financial estimates by securities analysts and credit rating agencies who follow our company, or our failure to meet these estimates or the expectations of investors; |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | the financial projections we may provide to the public (in the event we decide to provide any such projections), any changes in those projections or our failure to meet those projections; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | announcements by us or our competitors of new products and services; |
|--|---------|----------------------------------------------------------------------|

|  | • | the public's reaction to our and NAVER Corporation's press releases, other public announcements as well as filings with the Securities and Exchange Commission (the "SEC") and the KLFB and timely disclosure of information required by the Tokyo Stock Exchange in our case and filings with the Korea Exchange in NAVER Corporation's case; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | rumors and market speculation involving us or other companies in our industry; |
|--|---------|--------------------------------------------------------------------------------|

|  | • | actual or anticipated changes in our results of operations or fluctuations in our results of operations; |
|--|---------|----------------------------------------------------------------------------------------------------------|

|  | • | actual or anticipated developments in our business, our competitors' businesses or the competitive landscape generally; |
|--|---------|-------------------------------------------------------------------------------------------------------------------------|

|  | • | litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------|

|  | • | developments or disputes concerning our intellectual property or other proprietary rights; |
|--|---------|--------------------------------------------------------------------------------------------|

|  | • | announced or completed acquisitions of businesses or technologies by us or our competitors; |
|--|---------|---------------------------------------------------------------------------------------------|

|  | • | new laws or regulations or new interpretations of existing laws or regulations applicable to our business; |
|--|---------|------------------------------------------------------------------------------------------------------------|

|  | • | changes in tax laws and regulations as well as accounting standards, policies, guidelines, interpretations or principles; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------|

|  | • | any significant change in our management; and |
|--|---------|-----------------------------------------------|

|  | • | general economic conditions and slow or negative growth of our markets. |
|--|---------|-------------------------------------------------------------------------|

----

----

----

|  | • | have a majority of our board of directors be independent; |
|--|---------|-----------------------------------------------------------|

|  | • | have a compensation committee or a nominating or corporate governance committee consisting entirely of independent directors; or |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------|

|  | • | have regularly scheduled executive sessions with only independent directors. |
|--|---------|------------------------------------------------------------------------------|

----

----

----

***Item 4.A.    ******History and Development of the Company***

----

----

|  | • | We address people's basic communication needs.  We focus on serving users' everyday communication needs by supplying easy-to-use tools, including chat, voice call and video call, with reliable and secure connectivity wherever they are. As a result, our services have already become a meaningful part of the daily lives of many of our users. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | We enable closed and real relationship-based communication.  We believe that the most rewarding and lasting forms of expression are those involving private, two-way exchanges between people with real relationships, which enhance intimacy and security. Our users can connect with other users they know by directly adding them as friends on LINE or by importing their mobile contact list into LINE. We believe that closer, intimate relationships are integral to the broader social web of activity, representing a more meaningful and influential subset of social networks. |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | We make communication more enriching and expressive.  We are a pioneer in the creation and design of Stickers, our larger and more expressive version of emoticons. Users can express their emotions or actions by sending a single Sticker instead of a thread of plain text. We believe that Stickers have made communication both more convenient and more enriching. |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | Messaging.  LINE provides messaging services for a closed network of users who can select other users with whom they want to connect as "friends." New friends can be added through inclusion of new contact information in a user's mobile phone address book, searching for another user's LINE identification in our database, invitation by email or text messaging, scanning QR codes or, if physically adjacent, shaking users' smartphones simultaneously. The LINE messaging application can be downloaded for free onto mobile devices using major mobile operating systems as well as personal computers. Our users can send free one-to-one text and voice messages to their friends using data services provided by their mobile network carriers or over the internet. Users can also send images and videos and share their location information using the messaging service. LINE also offers group chat functions. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Stickers.  While using the LINE messaging application, users can add emotional nuance and personalize their text messages by including Stickers, which are colorful icons depicting actions or expressions of our proprietary characters (such as Cony the Rabbit and Brown the Bear), characters from popular animation or manga created by third parties (such as Sanrio's Hello Kitty and Disney characters), and real life celebrities and athletes. Our selection of Stickers varies by country depending on a number of factors, including local preferences, timely events and licensing arrangements for third-party copyrighted characters. We continually look for new and innovative ways to let our users express themselves, including by releasing Stickers with enhanced features such as sound effects as well as animated and pop-up images. |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Timeline.  Our Timeline service, which users access through the LINE messaging application, enables users to share their day-to-day experiences within the closed circle of people whom they choose as their friends. Each user has a profile screen allowing text, Stickers, images and videos and other activity to be posted to express themselves and to share with friends. Each user's Timeline displays that user's posts as well as posts by their friends and other interesting content that the user chooses, with the most recent posts appearing at the top of the Timeline. Our Timeline is designed to be simple and easy to view, and each post displays only the user profile, limited lines of text and any image or video included in the post. Users can choose the friends with whom they share their posts and whose posts they receive on their Timelines. |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Themes.  Our users can customize the look of the LINE messaging application on their devices by purchasing and downloading "Themes" that feature LINE and third-party licensed characters. Themes are used to decorate their start up screen, friends list, chat rooms, menu buttons and other displays. Users can also design their own Themes and offer them on Creators Market. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | Free Call and LINE Out (VoIP).  Our users can make free domestic or international voice calls and video calls to other LINE users worldwide who are registered as their friends on LINE. We also offer the LINE Out service, which provides a low-cost VoIP service that enables users to make domestic or international voice calls using the LINE messaging application to mobile and fixed-line phone users globally, regardless of the telecommunications network used by the recipient of the call and regardless of whether the recipient is a LINE user. We do not charge our users any initial setup fee, and users pay in advance for the minutes to be spent making calls by making an in-app purchase of minutes or purchasing minutes on LINE Store. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | LINE Games.  We offer various games on the LINE platform. As of December 31, 2016, we offered 47 games, of which 42 games were developed by third-party game developers. We offer games in Japan and our other key markets. Typically, LINE Games are highly social by nature and simple to play. Unlike standalone games not offered on a broader platform, LINE Games enable users to invite their LINE friends to download games that they enjoy playing. This, along with a leaderboard that displays scores of the player's LINE friends, encourages our users to connect with their friends through our games and helps them build and enhance their relationships. All LINE Games are initially downloadable for free, typically with options to buy in-game items, such as extra lives or "boosters" that enhance the user's performance level, or to upgrade game versions. Our portfolio of games includes puzzle games, adventure games, board games and role-playing games. |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | LINE PLAY.  LINE PLAY is our virtual community that enables users to design their own avatars, or graphic identities selected to represent themselves on screen, write and exchange diaries with other users' avatars, visit other users' avatar rooms and chat with other users who share common interests. Community members can also play interactive games with other users. Users may purchase in-app items to dress up their avatars or decorate their avatar rooms. Unlike our LINE messaging service, LINE PLAY is designed as an open social network where users can communicate freely with other LINE users who are not their LINE friends. |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | LINE NEWS and LINE TODAY.  LINE NEWS is our personalized news-clipping service application that provides users with relevant real-time news stories based on the topics that users are most interested in, such as entertainment, sports, politics, economy, gourmet and fashion. LINE NEWS is also integrated into users' Timelines and sends updates to users through push notifications, which allows seamless access to interesting and important news throughout the day without the need to leave the LINE messaging application. In addition, users can share interesting articles on their Timelines or with their friends through direct messages allowing for vibrant discussions. LINE NEWS is available to our users in Japan, and we offer similar services called LINE TODAY in our major markets outside of Japan. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | LINE LIVE and LINE TV.  LINE LIVE is a real-time streaming service offered in Japan that allows users to access live streaming personal videos or commercial events, such as concerts and sporting events, provided by artists, celebrities and corporate sponsors. In our major markets outside of Japan, we also offer on-demand video service called LINE TV that allows users to select and watch videos from diversified channels that offer an array of localized content. |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | LINE Manga.  LINE Manga is our online comic book store that enables users to purchase and download from a selection of over 100,000 comic book titles, read comic books on mobile devices and organize purchased titles on a virtual bookshelf. Users can also recommend comic books to their friends and share links to such comic books on their Timelines. |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | LINE MUSIC.  LINE MUSIC is our on-demand music subscription service that enables users to purchase and stream songs, create playlists of their favorite music, send music or playlists directly to friends on the LINE chat screen or share music with friends by streaming it on their Timelines. |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Miscellaneous.  We also offer a wide range of other applications to further enhance user experience, including B612 (a self-portrait enhancement application), LINE Camera (mobile camera application that enables users to edit, enhance and decorate photos), Fortune (daily fortune telling service), LINE Blog (blogging platform designed to foster greater interaction with celebrities) and Weather (weather forecast service). |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | LINE Friends.  We engage in character marketing using internally-designed LINE characters such as Cony the Rabbit and Brown the Bear, primarily to promote our brand and appeal and further expand our user base. LINE characters initially gained popularity through Stickers and LINE Games that feature them, and we sell official LINE merchandise, such as plush toys, action figures, stationery goods, clothes, tableware and limited-edition collaboration items, at LINE Friends stores located in Korea, China, Japan, Taiwan and Hong Kong. LINE Friends merchandise is also available through online stores. In addition, we license our proprietary LINE characters to third parties for production and sale of various LINE-related merchandise. |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | LINE Part-time Job.  LINE Part-time Job is a part-time job posting service provided through AUBE, Ltd., a joint venture with Intelligence Holdings, Ltd. in which we hold a 49.0% interest. We aim to connect our users who are seeking part-time employment with companies that need part-time employees. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | LINE Pay.  As part of our efforts to diversify payment options available to LINE users, we launched LINE Pay, our mobile payment service application, in December 2014. LINE Pay enables our users to register their credit cards and make payments, regardless of their mobile carrier, on LINE Store and a number of select online and offline partner retail stores. Depending on location, our users can also transmit funds to each other or withdraw cash from certain banks within their respective countries through LINE Pay by linking their accounts at select banks in their respective countries or adding money to their LINE Pay accounts at convenience stores or ATMs or through internet banking. |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | LINE Points.  To further promote the use of LINE Pay, we offer LINE Points, a reward program that enables users to earn points that they can use to add to their LINE Pay balance, use points as virtual currency for purchases at LINE Store and online LINE Friends stores or redeem points for vouchers to be used at retail locations such as coffee shops or convenience stores in Japan. Our users can earn LINE Points equal to 2.0% of amounts spent on LINE Pay Card as well as receive LINE Points from advertisers offered through LINE Point Ads. |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | LINE Mobile.  We commenced operations as an MVNO in September 2016 to provide affordably priced plans in Japan utilizing the wireless communication networks of a third-party mobile phone operator. We commenced sales of our SIM cards on Amazon Japan in November 2016 and in select electronics retail stores in Japan in March 2017. |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Official Accounts.  Official Accounts are LINE user accounts created for large-scale businesses and celebrities with followers that enable them to send messages directly to LINE users who have added them as a LINE friend. Once added as a LINE friend, such Official Account holder is displayed together with the users' other LINE friends, and the users are instantly alerted of messages through push notifications on their smartphones, as would be the case with any other messages from their LINE friends. Official Accounts enable business enterprises to reach LINE users around the world who are interested in their business, products or services by notifying such users of their latest products and services as well as distributing coupons and promotional information. Celebrities can also promote themselves and their latest works, such as movies and music albums, by connecting with their fans through their Official Accounts. For initial subscriptions we charge a monthly fee based on the contract period and the numbers of messages to be sent to users and updates to be posted on Timelines. For renewed contracts, we charge monthly fees based on the number of users who have added such Official Accounts as their LINE friends. |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | Sponsored Stickers.  Our advertisers can offer "Sponsored Stickers" to LINE users to promote their brands, products and services. We work with advertisers to design sets of Sponsored Stickers, which often feature the advertisers' proprietary characters. Sponsored Stickers are available globally and typically downloadable during a period of four weeks for free by users who add the sponsor as their LINE friend. We charge the advertisers fees based on the number of Sponsored Stickers offered by them as well as a Sticker design fee. Advertisers can add special features to their Sponsored Stickers, such as "Must-View Stickers," a feature that allows users who watch certain videos to download a special set of Stickers, and "Direct Stickers," a feature that allows advertisers to invite users to download Stickers through LINE messages. Advertisers may also add an advertisement on our virtual Sticker shop for an additional fee, as well as offer "Sponsored Themes" that customize the look of the LINE messaging application using the advertisers' proprietary characters. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | LINE Point Ads.  We offer "LINE Point Ads" to our advertisers which enable our users to receive LINE Points for free upon downloading certain applications, watching certain video commercials created by our advertisers or adding certain Official Accounts as a LINE friend. We charge advertisers a fixed fee per specific action taken by our users. Prior to April 25, 2016, LINE Point Ads was referred to as LINE Free Coins. |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | LINE@.  Our business users can create their own official accounts using our LINE@ application and send messages to, or post announcements on the Timelines of, other users who have added such LINE@ accounts as LINE friends, as well as respond to inquiries from other users on the LINE@ chat screen. For a monthly fee, users with LINE@ accounts can send more messages per month as well as image-based messages containing links to external websites. |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Business Connect.  Business Connect provides our business partners with a set of tools, application programming interfaces and embeddable widgets that they can use to build customized applications that can be offered on the LINE platform, such as sales platforms, marketing tools and customer relationship management solutions. |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | Timeline Ads.  Our advertisers can post advertisements on our users' Timelines, which appear at select locations as users scroll through various postings on their Timeline. Such advertisements may include links to external corporate websites, promotions of application downloads or branding campaigns featuring video clips. Video clips play automatically when a user scrolls through Timeline and reaches a viewport. |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | LINE NEWS Ads.  Our advertisers can post advertisements to certain advertisement spots on LINE NEWS to reach our users. Such advertisements may include links to external corporate websites, promotions of application downloads or branding campaigns. |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | livedoor.  livedoor is a Japanese web portal that brings together information from a wide variety of sources and provides related services such as web search, news, weather and entertainment content and blog hosting. livedoor is one of the largest blogging service providers in Japan. |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Matome.  We provide a personal web curation platform in Japan called Matome that enables individual users to create web pages that bundle images, links and videos under a specific topic. Such pages help viewers to see information collected from various sources sorted by topic that reflect the curating user's perspectives and experiences on a specific topic. |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | Control.  We believe that by providing our users with clear and easy-to-use controls, we will continue to promote trust in our products and services. We have introduced various personal information control tools and techniques. For example, a user can choose whether other users can search for his or her account and select the scope of the audience for his or her Timeline postings. |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Transparency.  Our privacy policy relates to our data use practices and privacy features. We also offer a number of tools and features that make disclosure to users on how their information is used on the LINE platform. Our application settings feature enables users to view each of the applications they have chosen to use, the information generally needed by each application, and the audience with whom users have chosen to share their experiences. We believe that our transparency efforts enable users to make more informed decisions about their activities on the LINE platform. |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Accountability.  We have implemented procedural safeguards as part of our privacy program. These include employing a dedicated team of privacy professionals who are involved in product development from design through launch, conducting ongoing review and monitoring of the way data is handled by existing features and applications and implementing systemic data security practices. |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|  | • | adapt to meet the needs from increasing user base growth and activities on our platform through decentralized data networks; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------|

|  | • | improve the functionality of servers through automated server management technology, thereby reducing the cost and improving operational agility; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | automatically detect and respond to errors in our infrastructure components, including application servers, storage infrastructure and system networks; and |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | maintain reliable redundant systems for our infrastructure components in Japan and abroad to reduce the possibility of service interruptions. |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | a storage infrastructure that enables us to securely store hundreds of petabytes of data generated by our users; |
|--|---------|------------------------------------------------------------------------------------------------------------------|

|  | • | increased storage capacity for more efficient data distribution; |
|--|---------|------------------------------------------------------------------|

|  | • | a high-volume business intelligence system that enables large scale data analysis; and |
|--|---------|----------------------------------------------------------------------------------------|

|  | • | a data warehouse infrastructure that provides tools to enable easy data summarization, ad hoc querying and analysis of large datasets. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------|

|  | • | advertising auction system technology that enables advertisers to compete against other advertisers in an auction and bid for a given advertisement spot as well as automatic delivery of relevant, targeted advertising; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | contextual advertising technology that considers factors such as optimal ad creatives and quality of landing pages and employs techniques to analyze the content of individual pages and to match advertisements to them; and |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | systems to better analyze user preferences and content consumption patterns that enable advertisers to provide more personalized advertisements and effectively manage their advertising budgets to generate a higher return on their investment. |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | • | proprietary audio and video communications technology that can reliably process millions of calls on a daily basis and group calls of up to 200 people at a time; and |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | high performance codec and data transmission technologies and routing algorithms to improve overall call quality and user experience. |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------|

|  | • | ability to conduct large-scale user data analysis during game play; and |
|--|---------|-------------------------------------------------------------------------|

|  | • | client/server technology designed to allow simultaneous, secure, fast and stable game play by users around the world. |
|--|---------|-----------------------------------------------------------------------------------------------------------------------|

|  | • | Users and User Engagement.  We compete to attract and retain users. We believe that our ability to compete effectively for users depends on many factors, including the utility, ease of use, performance and reliability of our products and services; price; the amount, quality and timeliness of content generated by our users; our ability to establish and maintain relationships with platform partners; and our reputation and the strength of our brand. We also compete to attract and retain developers to build compelling games and other applications offered on the LINE platform, primarily based on size and composition of our user base, and our ability to drive traffic to developers' applications. |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | Advertising.  A significant portion of our revenue is generated from the sale of advertising services, and we face significant competition for advertiser spending. We believe that our ability to compete effectively for advertiser spending depends on many factors, including the size and composition of our user base; the effectiveness of our advertising targeting capabilities; the timing and market acceptance of our advertising services; our marketing and selling efforts; and the return our advertisers expect to receive from our advertising services. |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Personnel.  We experience significant competition for highly skilled personnel, including senior management, engineers, designers and product managers. Our growth strategy depends in part on our ability to retain our existing personnel and recruit highly skilled employees. Competition for highly skilled personnel is intense, particularly in Japan where our headquarters is located, and we compete for qualified personnel with online and mobile businesses, other companies in the technology industry and traditional media businesses. We believe that our ability to compete effectively for highly skilled personnel depends on many factors, including a work environment that encourages independence, creativity and innovation; opportunities to work on challenging, meaningful and important products; and compensation. |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| Name                                                         | Jurisdiction of Incorporation |                                                     | Percentage of Ownership |   |
|--------------------------------------------------------------|-------------------------------|----------------------------------------------------------|-------------------------|--------|
| LINE Book Distribution Corporation                           |                          | Japan                                               |                    |   | 52.00 | % |
| LINE Business Partners Corporation                           |                          | Japan                                               |                    |   | 100.00 | % |
| LINE Fukuoka Corp.                                           |                          | Japan                                               |                    |   | 100.00 | % |
| LINE GAME Global Gateway, L.P.                               |                          | Japan                                               |                    |   | 100.00 | % |
| LINE Life Global Gateway, L.P.                               |                          | Japan                                               |                    |   | 100.00 | % |
| LINE Mobile Corporation                                      |                          | Japan                                               |                    |   | 100.00 | % |
| LINE Pay Corporation                                         |                          | Japan                                               |                    |   | 100.00 | % |
| LINE Ventures Corporation                                    |                          | Japan                                               |                    |   | 100.00 | % |
| M.T. Burn Corporation                                        |                          | Japan                                               |                    |   | 50.50 | % |
| WebPay Holdings, Inc.                                        |                          | Japan                                               |                    |   | 100.00 | % |
| WebPay, Inc.                                                 |                          | Japan                                               |                    |   | 100.00 | % |
| LINE Digital Technology (Shanghai)   Limited. |                          | China                                               |                    |   | 100.00 | % |
| LINE Digital Technologies India Private Limited              |                          | India                                               |                    |   | 100.00 | % |
| PT. LINE PLUS INDONESIA                                      |                          | Indonesia                                           |                    |   | 99.80 | % |
| LINE Biz Plus Corporation                                    |                          | Korea                                               |                    |   | 100.00 | % |
| LINE C&I Corporation                                     |                          | Korea                                               |                    |   | 100.00 | % |
| LINE Friends Corporation                                     |                          | Korea                                               |                    |   | 100.00 | % |
| LINE PLAY Corporation                                        |                          | Korea                                               |                    |   | 100.00 | % |
| LINE Plus Corporation                                        |                          | Korea                                               |                    |   | 100.00 | % |
| LINE BIZ+ PTE. LTD                                           |                          | Singapore                                           |                    |   | 100.00 | % |
| Line Biz+ Taiwan Limited                                     |                          | Taiwan                                              |                    |   | 100.00 | % |
| LINE Taiwan Limited                                          |                          | Taiwan                                              |                    |   | 100.00 | % |
| LINE BIZ Plus Ltd.                                           |                          | Thailand                                            |                    |   | 50.00 | % |
| LINE Company (Thailand) Limited                              |                          | Thailand                                            |                    |   | 50.00 | % |
| MixRadio Limited                                             |                          | United Kingdom ofGreat Britain andNorthern Ireland  |                    |   | 100.00 | % |
| LINE Euro-Americas Corp.                                     |                          | United States ofAmerica                             |                    |   | 100.00 | % |
| LINE Vietnam Co., Ltd                                        |                          | Vietnam                                             |                    |   | 95.00 | % |

----

***Item 5.A.   ******Operating Results***

----

|  | • | user growth; |
|--|---------|--------------|

|  | • | user engagement; |
|--|---------|------------------|

|  | • | monetization; |
|--|---------|---------------|

|  | • | products and services innovation; |
|--|---------|-----------------------------------|

|  | • | marketing and brand promotion; |
|--|---------|--------------------------------|

|  | • | competition; |
|--|---------|--------------|

|  | • | investment in talent; and |
|--|---------|---------------------------|

|  | • | seasonal fluctuations. |
|--|---------|------------------------|

|                           |             |   |     |   |
|--------------------------------|------------------|--------|----------|--------|
|                           | For the month of |   |     |   |
|                           | Mar.2014         |   | Jun.2014 |   | Sep.2014 |   | Dec.2014 |   | Mar.2015 |   | Jun.2015 |   | Sep.2015 |   | Dec.2015 |   | Mar.2016 |   | Jun.2016 |   | Sep.2016 |   | Dec.2016 |   |
|                           | (in millions)    |   |     |   |
| Total MAUs                |             |   | 159      |   |   |   | 170 |   |   |   | 179 |   |   |   | 190 |   |   |   | 205 |   |   |   | 211 |   |   |   | 212 |   |   |   | 215 |   |   |   | 218 |   |   |   | 220 |   |   |   | 220 |   |   |   | 217 |   |
| Japan                     |             |   | 45       |   |   |   | 47 |   |   |   | 49 |   |   |   | 51 |   |   |   | 54 |   |   |   | 55 |   |   |   | 57 |   |   |   | 58 |   |   |   | 61 |   |   |   | 62 |   |   |   | 64 |   |   |   | 66 |   |
| Taiwan, Thailand and Indonesia |             |   | 44       |   |   |   | 49 |   |   |   | 54 |   |   |   | 62 |   |   |   | 70 |   |   |   | 76 |   |   |   | 81 |   |   |   | 87 |   |   |   | 91 |   |   |   | 95 |   |   |   | 98 |   |   |   | 101 |   |

----

|                                      |   |             |   |   |      |   |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |
|-------------------------------------------|--------|------------------|--------|--------|-----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
|                                      |   | For the month of |   |
|                                      |   | Mar. 2014        |   |   | Jun. 2014 |   |   | Sep.2014 |   |   | Dec.2014 |   |   | Mar.2015 |   |   | Jun.2015 |   |   | Sep.2015 |   |   | Dec.2015 |   |   | Mar.2016 |   |   | Jun.2016 |   |   | Sep.2016 |   |   | Dec.2016 |   |
|                                      |   | (in millions)    |   |
| Daily average number of messages sent.    |   |             | 2,860  |   |      |   | 3,100  |     |   |   | 3,190    |   |   |     | 3,372  |   |     |   | 3,764  |     |   |   | 4,051    |   |   |     | 3,997  |   |     |   | 4,048  |     |   |   | 4,211    |   |   |   | 4,347 |   |   |   | 4,404 |   |   |   | 4,382 |   |
| Daily average number of messages received |   |             | 6,519  |   |      |   | 8,071  |     |   |   | 9,244    |   |   |     | 11,048 |   |     |   | 12,889 |     |   |   | 15,555   |   |   |     | 15,160 |   |     |   | 15,534 |     |   |   | 16,186   |   |   |   | 17,866 |   |   |   | 19,998 |   |   |   | 20,682 |   |
| Daily average number of Stickers sent     |   |             | 346    |   |      |   | 350    |     |   |   | 328      |   |   |     | 335    |   |     |   | 358    |     |   |   | 397      |   |   |     | 379    |   |     |   | 388    |     |   |   | 389      |   |   |   | 397 |   |   |   | 384 |   |   |   | 407 |   |

|                  |   |             |   |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |   |     |   |
|-----------------------|--------|------------------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
|                  |   | For the month of |   |
|                  |   | Mar.2014         |   |   | Jun.2014 |   |   | Sep.2014 |   |   | Dec.2014 |   |   | Mar.2015 |   |   | Jun.2015 |   |   | Sep.2015 |   |   | Dec.2015 |   |   | Mar.2016 |   |   | Jun.2016 |   |   | Sep.2016 |   |   | Dec.2016 |   |
|                  |   | (in millions)    |   |
| MAUs of LINE Games(1) |   |             | 35     |   |     |   | 34     |     |   |   | 33       |   |   |     | 39     |   |     |   | 38     |     |   |   | 36       |   |   |     | 32     |   |     |   | 32     |     |   |   | 31       |   |   |   | 29 |   |   |   | 27 |   |   |   | 27 |   |

| (1) | Represents the number of user accounts that accessed any LINE Game through mobile devices at least once during the month indicated. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------|

----

|                  |   | For the month of |   |
|-----------------------|--------|------------------|--------|
|                  |   | Mar.2014         |   |   | Jun.2014 |   |   | Sep.2014 |   |   | Dec.2014 |   |   | Mar.2015 |   |   | Jun.2015 |   |   | Sep.2015 |   |   | Dec.2015 |   |   | Mar.2016 |   |   | Jun.2016 |   |   | Sep.2016 |   |   | Dec.2016 |   |
|                  |   | (in millions)    |   |
| Total MPUs(1)         |   |             | 5.4    |   |   |   | 6.7 |   |   |   | 7.0 |   |   |   | 8.2 |   |   |   | 7.5 |   |   |   | 7.9 |   |   |   | 8.2 |   |   |   | 8.8 |   |   |   | 8.4 |   |   |   | 8.1 |   |   |   | 7.8 |   |   |   | 9.4 |   |
| MPUs of LINE Games(2) |   |             | 1.5    |   |   |   | 1.4 |   |   |   | 1.4 |   |   |   | 1.8 |   |   |   | 1.5 |   |   |   | 1.4 |   |   |   | 1.4 |   |   |   | 1.6 |   |   |   | 1.6 |   |   |   | 1.4 |   |   |   | 1.4 |   |   |   | 1.3 |   |

| (1) | Represents the number of user accounts that made (i) a payment for Stickers, Themes or LINE Out on the LINE messaging application through mobile devices or personal computers or (ii) a payment relating to any LINE Game through mobile devices, in each case at least once during the month indicated. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Represents the number of user accounts that made a payment relating to any LINE Game through mobile devices at least once during the month indicated. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   | For the Year Ended December 31,          |   |
|------------------------|------------------------------------------|--------|
|                   | 2014                                     |   | 2015 |   | 2016 |   |
|                   | Amount                                   |   | % |   | Amount |   | % |   | Amount |   | % |   |
|                   | (in millions of yen, except percentages) |   |
| Advertising:           |                                     |   |   |   |   |   |   |   |   |   |   |   |
| LINE advertising (1)   |                                     |   | ~~Y~~ 14,603 |   |   |   | 62.3 | % |   |   | ~~Y~~ 26,487 |   |   |   | 72.7 | % |   |   | ~~Y~~ 44,521 |   |   |   | 81.4 |   |
| Portal advertising (2) |                                     |   | 8,841 |   |   |   | 37.7 |   |   |   | 9,925 |   |   |   | 27.3 |   |   |   | 10,186 |   |   |   | 18.6 |   |
| Total             |                                     |   | ~~Y~~ 23,444 |   |   |   | 100.0 | % |   |   | ~~Y~~ 36,412 |   |   |   | 100.0 | % |   |   | ~~Y~~ 54,707 |   |   |   | 100.0 | % |

| (1) | Primarily consists of revenues from advertising services offered on LINE, including Official Accounts, Sponsored Stickers, LINE Point Ads, Timeline Ads and LINE NEWS Ads. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Primarily consists of revenues from advertising services offered on livedoor and Matome. |
|-----|------------------------------------------------------------------------------------------|

----

----

|                       |   | For the year ended December 31,          |         |
|----------------------------|--------|------------------------------------------|--------------|
|                       |   | 2014                                     |         |   | 2015 |   |   | 2016 |   |
|                       |   | Amount                                   |         |   | % |   |   | Amount |   |   | % |   |   | Amount |   |   | % |   |
|                       |   | (in millions of yen, except percentages) |         |
| Communication and content: |   |                                     |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Communication (1)          |   |                                     | ~~Y~~ 20,690 |   |   |   | 24.0 | % |   |   | ~~Y~~ 28,725 |   |   |   | 23.9 | % |   |   | ~~Y~~ 29,290 |   |   |   | 20.8 | % |
| Content (2)                |   |                                     | 40,449       |   |   |   | 46.8 |   |   |   | 49,284 |   |   |   | 40.9 |   |   |   | 44,784 |   |   |   | 31.8 |   |
| Others (3)                 |   |                                     | 1,783        |   |   |   | 2.1 |   |   |   | 5,985 |   |   |   | 5.0 |   |   |   | 11,923 |   |   |   | 8.5 |   |
| Sub-total                  |   |                                     | 62,922       |   |   |   | 72.9 |   |   |   | 83,994 |   |   |   | 69.8 |   |   |   | 85,997 |   |   |   | 61.1 |   |
| Advertising:               |   |                                     |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LINE advertising (4)       |   |                                     | 14,603       |   |   |   | 16.9 |   |   |   | 26,487 |   |   |   | 22.0 |   |   |   | 44,521 |   |   |   | 31.6 |   |
| Portal advertising (5)     |   |                                     | 8,841        |   |   |   | 10.2 |   |   |   | 9,925 |   |   |   | 8.2 |   |   |   | 10,186 |   |   |   | 7.3 |   |
| Sub-total             |   |                                     | 23,444       |   |   |   | 27.1 |   |   |   | 36,412 |   |   |   | 30.2 |   |   |   | 54,707 |   |   |   | 38.9 |   |
| Total                 |   |                                     | ~~Y~~ 86,366 |   |   |   | 100.0 | % |   |   | ~~Y~~ 120,406 |   |   |   | 100.0 | % |   |   | ~~Y~~ 140,704 |   |   |   | 100.0 | % |

| (1) | Primarily consists of revenues from Stickers, Creators Market and Themes. |
|-----|---------------------------------------------------------------------------|

| (2) | Primarily consists of sales of virtual items of LINE Games and LINE PLAY. |
|-----|---------------------------------------------------------------------------|

| (3) | Primarily consist of revenues from character marketing, such as sales of LINE characters merchandise at our retail stores and licensing of LINE characters' copyrights. Also include revenues from LINE Part-time Job, LINE Pay and LINE Mobile. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Primarily consists of revenues from advertising services offered on LINE, including Official Accounts, Sponsored Stickers, LINE Point Ads, Timeline Ads and LINE NEWS Ads. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Primarily consists of revenues from advertising services offered on livedoor and Matome. |
|-----|------------------------------------------------------------------------------------------|

----

|  | • | Payment processing and licensing expenses.  Payment processing and licensing expenses consist primarily of (i) processing fees paid to Apple and Google, our payment processing service providers, incurred from the sale of virtual items for internally-developed games and Stickers, and (ii) licensing fees paid to owners of third-party content used in Stickers and other products and services on a revenue-sharing basis. |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Employee compensation expenses.  Employee compensation expenses are our personnel-related costs, including salaries, benefits and share-based compensation. |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Marketing expenses.  Our marketing expenses consist primarily of costs related to (i) advertising on mass media, primarily television advertising and (ii) advertising on mobile applications. To a lesser extent, we also incur marketing expenses related to brand promotional events. Our marketing expenses do not include compensation expenses of our marketing personnel, which are included in employee compensation expenses. |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Infrastructure and communication expenses.  Infrastructure and communication expenses consist primarily of co-location charges incurred by us that are required for operation of the LINE platform and data centers, including fees for data transmission, data center infrastructure fees for maintenance of a suitable operating environment, server rental fees and server connection fees. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Authentication and other service expenses.  Authentication and other service expenses primarily relate to (i) fees paid for mobile phone number authentication services, (ii) fees paid for server maintenance activities and (iii) fees paid to customer service center operators as well as outsourcing service providers, in each case for services outsourced to third parties on a fixed-fee basis. |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Depreciation and amortization expenses.  Depreciation and amortization expenses primarily relate to depreciation of property and equipment, which is computed using the straight-line method based on the depreciable amount of the assets over their respective useful lives. |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Other operating expenses.  Other operating expenses primarily relate to rent, travel, professional fees, supplies, taxes and dues, office relocation expenses and other miscellaneous operating expenses. |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                             |   | For the year ended December 31, |   |   | Changes         |   |    | For the year ended December 31, |   |   | Changes         |   |
|------------------------------------------------------------------|--------|---------------------------------|--------|--------|-----------------|--------|---------|---------------------------------|--------|--------|-----------------|--------|
|                                                             |   | 2014                            |   |   | 2015            |   |    | Amount                          |   |   | %               |   |   | 2015 |   |   | 2016 |   |   | Amount |   |   |   |  % |   |
|                                                             |   | (in millions of yen)            |   |   | (in percentage) |   |    | (in millions of yen)            |   |   | (in percentage) |   |
| Revenues                                                    |   | ¥                          | 3,477  |   |            | ¥ | 264     |                            |   | ¥ | (3,213          | )      |   |   | (92.4 | )% |   | ¥ | 264 |   |   | ¥ | 444 |   |   | ¥ | 179 |   |   |   | 67.9 | % |
| Other income                                                |   |                            | 1      |   |            |   | — |                            |   |   | (1              | )      |   |   | (100.0 | ) |   |   | — |   |   |   | 9 |   |   |   | 9 |   |   |   | — |   |
| Expenses(1)                                                      |   |                            | (3,087 | )      |            |   | (11,767 | )                               |   |   | (8,681          | )      |   |   | 281.2 |   |   |   | (11,767 | ) |   |   | (3,179 | ) |   |   | 8,589 |   |   |   | (73.0 | ) |
| Gain (loss) on the disposal of discontinued operations(2)        |   |                            | 2,456  |   |            |   | — |                            |   |   | (2,456          | )      |   |   | (100.0 | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Profit (loss) before tax from discontinued operations       |   |                            | 2,847  |   |            |   | (11,503 | )                               |   |   | (14,350         | )      |   |   | N/A | (4) |   |   | (11,503 | ) |   |   | (2,726 | ) |   |   | 8,777 |   |   |   | (76.3 | ) |
| Income tax expenses on ordinary activities                  |   |                            | (216   | )      |            |   | — |                            |   |   | 216             |   |   |   | (100.0 | ) |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Income tax (expenses)/benefits on distributionand disposal(2)(3) |   |                            | 261    |   |            |   | 3,915   |                            |   |   | 3,653           |   |   |   | 1,396.1 |   |   |   | 3,915 |   |   |   | 744 |   |   |   | (3,170 | ) |   |   | (81.0 | ) |
| Profit (loss) for the period from discontinued operations   |   | ¥                          | 2,892  |   |            | ¥ | (7,588  | )                               |   | ¥ | (10,480         | )      |   |   | N/A | (4)  |   | ¥ | (7,588 | ) |   | ¥ | (1,982 | ) |   | ¥ | 5,606 |   |   |   | (73.9 | )% |
|                                                             |   |                            |   |   |            |   |    |                            |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (1) | The expenses for the year ended December 31, 2015 include impairment losses incurred attributable to the MixRadio segment. The expenses for the year ended December 31, 2016 include employee termination benefits of ¥1,165 million and office lease termination fees of ¥126 million, both incurred in connection with the abandonment of MixRadio on March 21, 2016. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | We recognized a gain of ¥2,456 million on the disposal of the data management business for financial accounting purposes on a consolidated basis. However, for income tax purposes, we recognized a loss on the disposal of the data management business, based on the book value of its investment in the data management subsidiaries on a stand-alone basis. Accordingly, we recorded ¥261 million of income tax benefits on the loss on sale for the year ended December 31, 2014. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The income tax benefits of ¥3,915 million and ¥744 million are mainly due to the deductible temporary difference arising from the investment in MixRadio Limited, which incurred losses during the years. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | N/A means not applicable. |
|-----|---------------------------|

----

|                                                    |   | For the year ended December 31, |    |
|---------------------------------------------------------|--------|---------------------------------|---------|
|                                                    |   | 2014                            |    |   | 2015 |   |   | 2016 |   |
|                                                    |   | (in millions of yen)            |    |
| Revenues and other operating income:                    |   |                            |    |   |   |   |   |   |   |
|       Revenues            |   | ¥                          | 86,366  |   |   | ¥ | 120,406 |   |   | ¥ | 140,704 |   |
| Other operating income                                  |   |                            | 296     |   |   |   | 474 |   |   |   | 5,892 |   |
| Total revenues and other operating income               |   |                            | 86,662  |   |   |   | 120,880 |   |   |   | 146,596 |   |
| Operating expenses:                                     |   |                            |    |   |   |   |   |   |   |   |   |   |
| Payment processing and licensing expenses               |   |                            | (20,598 | ) |   |   | (28,742 | ) |   |   | (29,781 | ) |
| Employee compensation expenses                          |   |                            | (18,289 | ) |   |   | (35,572 | ) |   |   | (39,445 | ) |
| Marketing expenses                                      |   |                            | (18,069 | ) |   |   | (16,596 | ) |   |   | (11,833 | ) |
| Infrastructure and communication expenses               |   |                            | (4,492  | ) |   |   | (7,712 | ) |   |   | (7,770 | ) |
| Authentication and other service expenses               |   |                            | (7,874  | ) |   |   | (12,133 | ) |   |   | (14,394 | ) |
| Depreciation and amortization expenses                  |   |                            | (2,370  | ) |   |   | (3,733 | ) |   |   | (5,100 | ) |
| Other operating expenses                                |   |                            | (8,555  | ) |   |   | (14,432 | ) |   |   | (18,376 | ) |
| Total operating expenses                                |   |                            | (80,247 | ) |   |   | (118,920 | ) |   |   | (126,699 | ) |
| Profit (loss) from operating activities                 |   |                            | 6,415   |   |   |   | 1,960 |   |   |   | 19,897 |   |
| Finance income                                          |   |                            | 86      |   |   |   | 71 |   |   |   | 87 |   |
| Finance costs                                           |   |                            | (137    | ) |   |   | (106 | ) |   |   | (65 | ) |
| Share of loss of associates                             |   |                            | (167    | ) |   |   | (205 | ) |   |   | (833 | ) |
| Gain (loss) on foreign currency transactions, net       |   |                            | 66      |   |   |   | (520 | ) |   |   | (43 | ) |
| Other non-operating income                              |   |                            | — |   |   |   | 157 |   |   |   | 9 |   |
| Other non-operating expenses                            |   |                            | — |   |   |   | (1,887 | ) |   |   | (1,062 | ) |
| Profit (loss) before tax from continuing operations     |   |                            | 6,263   |   |   |   | (530 | ) |   |   | 17,990 |   |
| Income tax benefits (expenses)                          |   |                            | (7,151  | ) |   |   | 146 |   |   |   | (8,904 | ) |
| Profit (loss) for the period from continuing operations |   |                            | (888    | ) |   |   | (384 | ) |   |   | 9,086 |   |
| Profit from discontinued operations, net of tax         |   |                            | 2,892   |   |   |   | (7,588 | ) |   |   | (1,982 | ) |
| Profit (loss) for the period                       |   | ¥                          | 2,004   |   |   | ¥ | (7,972 | ) |   | ¥ | 7,104 |   |

|                                                          |   | For the year ended December 31, |    |
|---------------------------------------------------------------|--------|---------------------------------|---------|
|                                                          |   | 2014                            |    |   | 2015 |   |   | 2016 |   |
|                                                          |   |                            |    |   |   |   |   |   |   |
| Revenues and other operating income:                          |   |                            |    |   |   |   |   |   |   |
| Revenues                                                 |   |                            | 100.0   | % |   |   | 100.0 | % |   |   | 100.0 | % |
| Other operating income                                   |   |                            | 0.3     |   |   |   | 0.4 |   |   |   | 4.2 |   |
| Total revenues and other operating income                |   |                            | 100.3   |   |   |   | 100.4 |   |   |   | 104.2 |   |
| Operating expenses:                                           |   |                            |    |   |   |   |   |   |   |   |   |   |
| Payment processing and licensing expenses                |   |                            | (23.8   | ) |   |   | (23.9 | ) |   |   | (21.2 | ) |
| Employee compensation expenses                           |   |                            | (21.2   | ) |   |   | (29.5 | ) |   |   | (28.0 | ) |
| Marketing expenses                                       |   |                            | (20.9   | ) |   |   | (13.8 | ) |   |   | (8.4 | ) |
| Infrastructure and communication expenses                |   |                            | (5.2    | ) |   |   | (6.4 | ) |   |   | (5.5 | ) |
| Authentication and other service expenses                |   |                            | (9.1    | ) |   |   | (10.1 | ) |   |   | (10.2 | ) |
| Depreciation and amortization expenses                   |   |                            | (2.7    | ) |   |   | (3.1 | ) |   |   | (3.6 | ) |
| Other operating expenses                                 |   |                            | (9.9    | ) |   |   | (12.0 | ) |   |   | (13.1 | ) |
| Total operating expenses                                 |   |                            | (92.8   | ) |   |   | (98.8 | ) |   |   | (90.0 | ) |
| Profit (loss) from operating activities                  |   |                            | 7.5     |   |   |   | 1.6 |   |   |   | 14.1 |   |
| Finance income                                           |   |                            | 0.1     |   |   |   | 0.1 |   |   |   | 0.1 |   |
| Finance costs                                            |   |                            | (0.2    | ) |   |   | (0.1 | ) |   |   | (0.0 | ) |
| Share of loss of associates                              |   |                            | (0.2    | ) |   |   | (0.2 | ) |   |   | (0.6 | ) |
| Gain (loss) on foreign currency transactions, net        |   |                            | 0.1     |   |   |   | (0.4 | ) |   |   | (0.0 | ) |
| Other non-operating income                                    |   |                            | — |   |   |   | 0.1 |   |   |   | 0.0 |   |
| Other non-operating expenses                             |   |                            | — |   |   |   | (1.5 | ) |   |   | (0.8 | ) |
| Profit (loss) before tax from continuing operations      |   |                            | 7.3     |   |   |   | (0.4 | ) |   |   | 12.8 |   |
| Income tax benefits (expenses)                           |   |                            | (8.3    | ) |   |   | 0.1 |   |   |   | (6.3 | ) |
| Profit (loss) for the period from continuing operations  |   |                            | (1.0    | ) |   |   | (0.3 | ) |   |   | 6.5 |   |
| Profit from discontinued operations, net of tax          |   |                            | 3.3     |   |   |   | (6.3 | ) |   |   | (1.5 | ) |
| Profit (loss) for the year                               |   |                            | 2.3     | % |   |   | (6.6 | )% |   |   | 5.0 | % |

----

|                       |   |                                |    |   |    |   |    |   |   |   |   |   |
|----------------------------|--------|-------------------------------------|---------|--------|---------|--------|---------|--------|--------|--------|--------|--------|
|                       |   | For the year ended December 31,     |    |   | Changes |   |
|                       |   | 2015                                |    |   | 2016    |   |    | Amount |   |   | %      |   |
|                       |   | (in millions of yen or percentages) |    |
| Communication and content: |   |                                |    |   |    |   |    |   |   |   |   |   |
| Communication         |   | ¥                              | 28,725  |   |    | ¥ | 29,290  |   |   | ¥ | 565    |   |   |   | 2.0 | % |
| Content               |   |                                | 49,284  |   |    |   | 44,784  |   |   |   | (4,500 | )      |   |   | (9.1 | ) |
| Others                |   |                                | 5,985   |   |    |   | 11,923  |   |   |   | 5,937  |   |   |   | 99.2 |   |
| Sub-total             |   |                                | 83,994  |   |    |   | 85,997  |   |   |   | 2,003  |   |   |   | 2.4 |   |
| Advertising:               |   |                                |    |   |    |   |    |   |   |   |   |   |   |   |   |   |
| LINE advertising      |   |                                | 26,487  |   |    |   | 44,521  |   |   |   | 18,035 |   |   |   | 68.1 |   |
| Portal advertising    |   |                                | 9,925   |   |    |   | 10,186  |   |   |   | 261    |   |   |   | 2.6 |   |
| Sub-total             |   |                                | 36,412  |   |    |   | 54,707  |   |   |   | 18,296 |   |   |   | 50.2 |   |
| Total                 |   | ¥                              | 120,406 |   |    | ¥ | 140,704 |   |   | ¥ | 20,299 |   |   |   | 16.9 | % |

----

|                                  |   | For the year endedDecember 31,      |   |   | Changes |   |
|---------------------------------------|--------|-------------------------------------|--------|--------|---------|--------|
|                                  |   | 2015                                |   |   | 2016    |   |   | Amount |   |   | % |   |
|                                  |   | (in millions of yen or percentages) |   |
| Communication                    |   | ¥                              | 28,725 |   |    | ¥ | 29,290 |   |   | ¥ | 565 |   |   |   | 2.0 | % |
| Percentage of revenues           |   |                                | 23.9   | %      |    |   | 20.8 | % |   |   |   |   |   |   |   |   |
| Content                          |   |                                | 49,284 |   |    |   | 44,784 |   |   |   | (4,500 | ) |   |   | (9.1 | ) |
| Percentage of revenues           |   |                                | 40.9   | %      |    |   | 31.8 | % |   |   |   |   |   |   |   |   |
| Others                           |   |                                | 5,985  |   |    |   | 11,923 |   |   |   | 5,937 |   |   |   | 99.2 |   |
| Percentage of revenues           |   |                                | 5.0    | %      |    |   | 8.5 | % |   |   |   |   |   |   |   |   |
| Total communication and content  |   | ¥                              | 83,994 |   |    | ¥ | 85,997 |   |   | ¥ | 2,003 |   |   |   | 2.4 | % |
| Percentage of revenues           |   |                                | 69.8   | %      |    |   | 61.1 | % |   |   |   |   |   |   |   |   |

----

|                         |                                |   |   |    |   |   |   |   |   |   |   |
|------------------------------|-------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|
|                         | For the year endedDecember 31,      |   |   | Changes |   |
|                         | 2015                                |   |   | 2016    |   |   | Amount |   |   | %      |   |
|                         | (in millions of yen or percentages) |   |
| LINE advertising        |                                | ¥ | 26,487 |    |   | ¥ | 44,521 |   |   | ¥ | 18,035 |   |   |   | 68.1 | % |
| Percentage of revenues  |                                |   | 22.0   | %       |   |   | 31.6   | %      |   |   |   |   |   |   |   |   |
| Portal advertising      |                                |   | 9,925  |    |   |   | 10,186 |   |   |   | 261    |   |   |   | 2.6 |   |
| Percentage of revenues  |                                |   | 8.2    | %       |   |   | 7.3    | %      |   |   |   |   |   |   |   |   |
| Total advertising       |                                | ¥ | 36,412 |    |   | ¥ | 54,707 |   |   | ¥ | 18,296 |   |   |   | 50.2 | % |
| Percentage of revenues  |                                |   | 30.2   | %       |   |   | 38.9   | %      |   |   |   |   |   |   |   |   |

----

|                                            |   |                                |    |   |    |   |    |   |   |   |   |   |
|-------------------------------------------------|--------|-------------------------------------|---------|--------|---------|--------|---------|--------|--------|--------|--------|--------|
|                                            |   | For the year endedDecember 31,      |    |   | Changes |   |
|                                            |   | 2015                                |    |   | 2016    |   |    | Amount |   |   | %      |   |
|                                            |   | (in millions of yen or percentages) |    |
| Payment processing and licensing expenses  |   | ¥                              | 28,742  |   |    | ¥ | 29,781  |   |   | ¥ | 1,039  |   |   |   | 3.6 | % |
| Employee compensation expenses             |   |                                | 35,572  |   |    |   | 39,445  |   |   |   | 3,873  |   |   |   | 10.9 |   |
| Marketing expenses                         |   |                                | 16,596  |   |    |   | 11,833  |   |   |   | (4,764 | )      |   |   | (28.7 | ) |
| Infrastructure and communication expenses  |   |                                | 7,712   |   |    |   | 7,770   |   |   |   | 58     |   |   |   | 0.8 |   |
| Authentication and other service expenses  |   |                                | 12,133  |   |    |   | 14,394  |   |   |   | 2,261  |   |   |   | 18.6 |   |
| Depreciation and amortization expenses     |   |                                | 3,733   |   |    |   | 5,100   |   |   |   | 1,367  |   |   |   | 36.6 |   |
| Other operating expenses(1)                     |   |                                | 14,432  |   |    |   | 18,376  |   |   |   | 3,946  |   |   |   | 27.3 |   |
| Total                                      |   | ¥                              | 118,920 |   |    | ¥ | 126,699 |   |   | ¥ | 7,780  |   |   |   | 6.5 | % |

|                                            |   | For the year endedDecember 31,     |   |
|-------------------------------------------------|--------|------------------------------------|--------|
|                                            |   | 2015                               |   |   | 2016 |   |
|                                            |   | (in percentages of total revenues) |   |
| Payment processing and licensing expenses  |   |                               | 23.9   | % |   |   | 21.2 | % |
| Employee compensation expenses             |   |                               | 29.5   |   |   |   | 28.0 |   |
| Marketing expenses                         |   |                               | 13.8   |   |   |   | 8.4 |   |
| Infrastructure and communication expenses  |   |                               | 6.4    |   |   |   | 5.5 |   |
| Authentication and other service expenses  |   |                               | 10.1   |   |   |   | 10.2 |   |
| Depreciation and amortization expenses     |   |                               | 3.1    |   |   |   | 3.6 |   |
| Other operating expenses(1)                     |   |                               | 12.0   |   |   |   | 13.1 |   |
| Total                                      |   |                               | 98.8   | % |   |   | 90.0 | % |

|                                            | For the year endedDecember 31,      |   | Changes |   |
|-------------------------------------------------|-------------------------------------|--------|---------|--------|
|                                            | 2015                                |   | 2016    |   | Amount |   | % |   |
|                                            | (in millions of yen or percentages) |   |
| Payment processing and licensing expenses  |                                | ¥ | 28,742  |   |   | ¥ | 29,781 |   |   | ¥ | 1,039 |   |   |   | 3.6 | % |
| Percentage of revenues                     |                                |   | 23.9    | %      |   |   | 21.2 | % |   |   |   |   |   |   |   |   |

----

|                                 |   | For the year endedDecember 31,      |   |   | Changes |   |
|--------------------------------------|--------|-------------------------------------|--------|--------|---------|--------|
|                                 |   | 2015                                |   |   | 2016    |   |   | Amount |   |   | % |   |
|                                 |   | (in millions of yen or percentages) |   |
| Employee compensation expenses  |   | ¥                              | 35,572 |   |    | ¥ | 39,445 |   |   | ¥ | 3,873 |   |   |   | 10.9 | % |
| Percentage of revenues          |   |                                | 29.5   | %      |    |   | 28.0 | % |   |   |   |   |   |   |   |   |

|                         |   | For the year endedDecember 31,      |   |   | Changes |   |
|------------------------------|--------|-------------------------------------|--------|--------|---------|--------|
|                         |   | 2015                                |   |   | 2016    |   |   | Amount |   |   | % |   |
|                         |   | (in millions of yen or percentages) |   |
| Marketing expenses      |   | ¥                              | 16,596 |   |    | ¥ | 11,833 |   |   | ¥ | (4,764 | ) |   |   | (28.7 | )% |
| Percentage of revenues  |   |                                | 13.8   | %      |    |   | 8.4 | % |   |   |   |   |   |   |   |   |

|                                            |   | For the year endedDecember 31,      |   |   | Changes |   |
|-------------------------------------------------|--------|-------------------------------------|--------|--------|---------|--------|
|                                            |   | 2015                                |   |   | 2016    |   |   | Amount |   |   | % |   |
|                                            |   | (in millions of yen or percentages) |   |
| Infrastructure and communication expenses  |   | ¥                              | 7,712  |   |    | ¥ | 7,770 |   |   | ¥ | 58 |   |   |   | 0.8 | % |
| Percentage of revenues                     |   |                                | 6.4    | %      |    |   | 5.5% | % |   |   |   |   |   |   |   |   |

|                                            |   | For the year endedDecember 31,      |   |   | Changes |   |
|-------------------------------------------------|--------|-------------------------------------|--------|--------|---------|--------|
|                                            |   | 2015                                |   |   | 2016    |   |   | Amount |   |   | % |   |
|                                            |   | (in millions of yen or percentages) |   |
| Authentication and other service expenses  |   | ¥                              | 12,133 |   |    | ¥ | 14,394 |   |   | ¥ | 2,261 |   |   |   | 18.6 | % |
| Percentage of revenues                     |   |                                | 10.1   | %      |    |   | 10.2 | % |   |   |   |   |   |   |   |   |

----

----

----

|                       |   | For the year ended December 31,     |   |   | Changes |   |
|----------------------------|--------|-------------------------------------|--------|--------|---------|--------|
|                       |   | 2014                                |   |   | 2015    |   |   | Amount |   |   | % |   |
|                       |   | (in millions of yen or percentages) |   |
| Communication and content: |   |                                |   |   |    |   |   |   |   |   |   |   |
| Communication         |   | ¥                              | 20,690 |   |    | ¥ | 28,725 |   |   | ¥ | 8,035 |   |   |   | 38.8 | % |
| Content               |   |                                | 40,449 |   |    |   | 49,284 |   |   |   | 8,835 |   |   |   | 21.8 |   |
| Others                |   |                                | 1,783  |   |    |   | 5,985 |   |   |   | 4,201 |   |   |   | 235.5 |   |
| Sub-total             |   |                                | 62,922 |   |    |   | 83,994 |   |   |   | 21,072 |   |   |   | 33.5 |   |
| Advertising:               |   |                                |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
| LINE advertising      |   |                                | 14,603 |   |    |   | 26,487 |   |   |   | 11,884 |   |   |   | 81.4 |   |
| Portal advertising    |   |                                | 8,841  |   |    |   | 9,925 |   |   |   | 1,084 |   |   |   | 12.3 |   |
| Sub-total             |   |                                | 23,444 |   |    |   | 36,412 |   |   |   | 12,967 |   |   |   | 55.3 |   |
| Total                 |   | ¥                              | 86,366 |   |    | ¥ | 120,406 |   |   | ¥ | 34,039 |   |   |   | 39.4 | % |

|                                  |   | For the year ended December 31,     |   |   | Changes |   |
|---------------------------------------|--------|-------------------------------------|--------|--------|---------|--------|
|                                  |   | 2014                                |   |   | 2015    |   |   | Amount |   |   | % |   |
|                                  |   | (in millions of yen or percentages) |   |
| Communication                    |   | ¥                              | 20,690 |   |    | ¥ | 28,725 |   |   | ¥ | 8,035 |   |   |   | 38.8 | % |
| Percentage of revenues           |   |                                | 24.0   | %      |    |   | 23.9 | % |   |   |   |   |   |   |   |   |
| Content                          |   |                                | 40,449 |   |    |   | 49,284 |   |   |   | 8,835 |   |   |   | 21.8 |   |
| Percentage of revenues           |   |                                | 46.8   | %      |    |   | 40.9 | % |   |   |   |   |   |   |   |   |
| Others                           |   |                                | 1,783  |   |    |   | 5,985 |   |   |   | 4,201 |   |   |   | 235.5 |   |
| Percentage of revenues           |   |                                | 2.1    | %      |    |   | 5.0 | % |   |   |   |   |   |   |   |   |
| Total communication and content  |   | ¥                              | 62,922 |   |    | ¥ | 83,994 |   |   | ¥ | 21,072 |   |   |   | 33.5 | % |
| Percentage of revenues           |   |                                | 72.9   | %      |    |   | 69.8 | % |   |   |   |   |   |   |   |   |

----

|                         | For the year endedDecember 31,      |   |   | Changes |   |
|------------------------------|-------------------------------------|--------|--------|---------|--------|
|                         | 2014                                |   |   | 2015    |   |   | Amount |   |   | % |   |
|                         | (in millions of yen or percentages) |   |
| LINE advertising        |                                | ¥ | 14,603 |    |   | ¥ | 26,487 |   |   | ¥ | 11,884 |   |   |   | 81.4 | % |
| Percentage of revenues  |                                |   | 16.9   | %       |   |   | 22.0 | % |   |   |   |   |   |   |   |   |
| Portal advertising      |                                |   | 8,841  |    |   |   | 9,925 |   |   |   | 1,084 |   |   |   | 12.3 |   |
| Percentage of revenues  |                                |   | 10.2   | %       |   |   | 8.2 | % |   |   |   |   |   |   |   |   |
| Total advertising       |                                | ¥ | 23,444 |    |   | ¥ | 36,412 |   |   | ¥ | 12,967 |   |   |   | 55.3 | % |
| Percentage of revenues  |                                |   | 27.1   | %       |   |   | 30.2 | % |   |   |   |   |   |   |   |   |

----

|                                            |   | For the year ended December 31,     |   |   | Changes |   |
|-------------------------------------------------|--------|-------------------------------------|--------|--------|---------|--------|
|                                            |   | 2014                                |   |   | 2015    |   |   | Amount |   |   | % |   |
|                                            |   | (in millions of yen or percentages) |   |
| Payment processing and licensing expenses  |   | ¥                              | 20,598 |   |    | ¥ | 28,742 |   |   | ¥ | 8,144 |   |   |   | 39.5 | % |
| Employee compensation expenses             |   |                                | 18,289 |   |    |   | 35,572 |   |   |   | 17,283 |   |   |   | 94.5 |   |
| Marketing expenses                         |   |                                | 18,069 |   |    |   | 16,596 |   |   |   | (1,473 | ) |   |   | (8.2 | ) |
| Infrastructure and communication expenses  |   |                                | 4,492  |   |    |   | 7,712 |   |   |   | 3,220 |   |   |   | 71.7 |   |
| Authentication and other service expenses  |   |                                | 7,874  |   |    |   | 12,133 |   |   |   | 4,259 |   |   |   | 54.1 |   |
| Depreciation and amortization expenses     |   |                                | 2,370  |   |    |   | 3,733 |   |   |   | 1,363 |   |   |   | 57.5 |   |
| Other operating expenses(1)                     |   |                                | 8,555  |   |    |   | 14,432 |   |   |   | 5,876 |   |   |   | 68.7 |   |
| Total                                      |   | ¥                              | 80,247 |   |    | ¥ | 118,920 |   |   | ¥ | 38,673 |   |   |   | 48.2 | % |

----

|                                            |   | For the year ended December 31,    |   |
|-------------------------------------------------|--------|------------------------------------|--------|
|                                            |   | 2014                               |   |   | 2015 |   |
|                                            |   | (in percentages of total revenues) |   |
| Payment processing and licensing expenses  |   |                               | 23.8   | % |   |   | 23.9 | % |
| Employee compensation expenses             |   |                               | 21.2   |   |   |   | 29.5 |   |
| Marketing expenses                         |   |                               | 20.9   |   |   |   | 13.8 |   |
| Infrastructure and communication expenses  |   |                               | 5.2    |   |   |   | 6.4 |   |
| Authentication and other service expenses  |   |                               | 9.1    |   |   |   | 10.1 |   |
| Depreciation and amortization expenses     |   |                               | 2.7    |   |   |   | 3.1 |   |
| Other operating expenses(1)                     |   |                               | 9.9    |   |   |   | 12.0 |   |
| Total                                      |   |                               | 92.8   | % |   |   | 98.8 | % |

| (1) | Other operating expenses include rent, travel, professional fees, supplies, taxes and dues, office relocation expenses and other miscellaneous operating expenses. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                            |   | For the year ended December 31,     |   |   | Changes |   |
|-------------------------------------------------|--------|-------------------------------------|--------|--------|---------|--------|
|                                            |   | 2014                                |   |   | 2015    |   |   | Amount |   |   | % |   |
|                                            |   | (in millions of yen or percentages) |   |
| Payment processing and licensing expenses  |   | ¥                              | 20,598 |   |    | ¥ | 28,742 |   |   | ¥ | 8,144 |   |   |   | 39.5 | % |
| Percentage of revenues                     |   |                                | 23.8   | %      |    |   | 23.9 | % |   |   |   |   |   |   |   |   |

|                                 |        | For the year ended December 31,     |        |        | Changes |        |
|--------------------------------------|--------|-------------------------------------|--------|--------|---------|--------|
|                                 |   | 2014                                |   |   | 2015    |   |   | Amount |   |   | % |   |
|                                 |   | (in millions of yen or percentages) |   |
| Employee compensation expenses  |   | ¥                              | 18,289 |   |    | ¥ | 35,572 |   |   | ¥ | 17,283 |   |   |   | 94.5 | % |
| Percentage of revenues          |   |                                | 21.2   | %      |    |   | 29.5 | % |   |   |   |   |   |   |   |   |

----

|                         |   | For the year ended December 31,     |   |   | Changes |   |
|------------------------------|--------|-------------------------------------|--------|--------|---------|--------|
|                         |   | 2014                                |   |   | 2015    |   |   | Amount |   |   | % |   |
|                         |   | (in millions of yen or percentages) |   |
| Marketing expenses      |   | ¥                              | 18,069 |   |    | ¥ | 16,596 |   |   | ¥ | (1,473 | ) |   |   | (8.2 | )% |
| Percentage of revenues  |   |                                | 20.9   | %      |    |   | 13.8 | % |   |   |   |   |   |   |   |   |

|                                            |   | For the year ended December 31,     |   |   | Changes |   |
|-------------------------------------------------|--------|-------------------------------------|--------|--------|---------|--------|
|                                            |   | 2014                                |   |   | 2015    |   |   | Amount |   |   | % |   |
|                                            |   | (in millions of yen or percentages) |   |
| Infrastructure and communication expenses  |   | ¥                              | 4,492  |   |    | ¥ | 7,712 |   |   | ¥ | 3,220 |   |   |   | 71.7 | % |
| Percentage of revenues                     |   |                                | 5.2    | %      |    |   | 6.4 | % |   |   |   |   |   |   |   |   |

|                                            |   | For the year ended December 31,     |   |   | Changes |   |
|-------------------------------------------------|--------|-------------------------------------|--------|--------|---------|--------|
|                                            |   | 2014                                |   |   | 2015    |   |   | Amount |   |   | % |   |
|                                            |   | (in millions of yen or percentages) |   |
| Authentication and other service expenses  |   | ¥                              | 7,874  |   |    | ¥ | 12,133 |   |   | ¥ | 4,259 |   |   |   | 54.1 | % |
| Percentage of revenues                     |   |                                | 9.1    | %      |    |   | 10.1 | % |   |   |   |   |   |   |   |   |

----

----

|                                                           |   | For the year endedDecember 31, |    |
|----------------------------------------------------------------|--------|--------------------------------|---------|
|                                                           |   | 2014                           |    |   | 2015 |   |   | 2016 |   |
|                                                           |   | (in millions of yen)           |    |
| Net cash provided by operating activities                 |   | ¥                         | 12,456  |   |   | ¥ | 6,979 |   |   | ¥ | 28,753 |   |
| Net cash used in investing activities                     |   |                           | (12,967 | ) |   |   | (12,229 | ) |   |   | (34,086 | ) |
| Net cash provided by financing activities                 |   |                           | 6,492   |   |   |   | 18,860 |   |   |   | 106,628 |   |
|                                                           |   |                           |    |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents at the beginning of the period  |   |                           | 13,362  |   |   |   | 20,254 |   |   |   | 33,652 |   |
| Cash and cash equivalents at the end of the period        |   |                           | 20,254  |   |   |   | 33,652 |   |   |   | 134,698 |   |

----

----

|                                              |   | Payments Due by Period |   |
|---------------------------------------------------|--------|------------------------|--------|
|                                              |   | Total                  |   |   | Less than 1 Year |   |   | 1 to 3 Years |   |   | 4 to 5 Years |   |   | More than 5 Years |   |
|                                              |   | (in millions of yen)   |   |
| Short-term borrowing obligations(1)               |   | ~~¥~~             | 21,937 |   |   | ~~¥~~ | 21,937 |   |   | ~~¥~~ | — |   |   | ~~¥~~ | — |   |   | ~~¥~~ | — |   |
| Operating lease obligations(2)                    |   |                   | 16,045 |   |   |   | 3,945 |   |   |   | 7,103 |   |   |   | 4,997 |   |   |   | — |   |
| Purchase obligations(3)                           |   |                   | 1,464  |   |   |   | 1,464 |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Deposits received(4)                              |   |                   | 2,572  |   |   |   | 2,572 |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Future estimated defined benefit plan payments(5) |   |                   | 4,595  |   |   |   | 171 |   |   |   | 511 |   |   |   | 748 |   |   |   | 3,165 |   |
| Total                                        |   | ~~¥~~             | 46,613 |   |   | ~~¥~~ | 30,089 |   |   | ~~¥~~ | 7,614 |   |   | ~~¥~~ | 5,745 |   |   | ~~¥~~ | 3,165 |   |

| (1) | As of December 31, 2016, the book value of our short-term borrowings was ¥21,925 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | We enter into operating lease agreements for certain office space and stores.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (3) | Our purchase obligations include contracts for property and equipment. See Note 9(3) of the notes to our annual consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (4) | The deposits received primarily relate to LINE Pay customer deposits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (5) | Represents, as of December 31, 2016, the expected amount of retirement benefits that we will be required to pay within ten years under applicable law to employees of our Korean subsidiaries, including LINE Plus Corporation, LINE PLAY Corporation, LINE Biz Plus Corporation and LINE Friends Corporation, when they reach their normal retirement age. The amounts were determined based on the employees' current salary rates and the number of service years that will have been accumulated upon their retirement. These amounts do not include amounts that may be paid to employees who cease to work at the relevant company before their normal retirement age. |

----

----

|                                                          |   | For the year ended December 31, |        |
|---------------------------------------------------------------|--------|---------------------------------|-------------|
|                                                          |   | 2014                            |        |   | 2015 |   |
| Dividend yield                                                |   |                            | 0.0         | % |   |   | 0.0 | % |
| Expected volatility                                           |   |                            | 52-58       | % |   |   | 56 | % |
| Risk-free interest rate                                       |   |                            | 0.2         | % |   |   | 0.0 | % |
| Expected life of stock options                                |   | 6 years                         |        |   | 6 years |   |
| Grant date fair value of our equity per common share (in Yen) |   | ¥                          | 1,161-3,297 |   |   | ¥ | 4,225 |   |

----

| Stock option grant dates |   | Number ofunderlying shares ofcommon stock |      |   | Exercise price |   |   | Fair value ofcommon stock |   |
|--------------------------|--------|-------------------------------------------|-----------|--------|----------------|--------|--------|---------------------------|--------|
|                     |   |                                      |      |   | (in yen)       |   |
| December 16, 2013   |   |                                      | 3,430,500 |   |           | ¥ | 344    |                      |   | ¥ | 1,011 |   |
| February 7, 2014         |   |                                      | 1,825,000 |   |           |   | 1,320  |                      |   |   | 1,161 |   |
| August 8, 2014           |   |                                      | 752,500   |   |           |   | 1,320  |                      |   |   | 3,280 |   |
| October 31, 2014         |   |                                      | 348,500   |   |           |   | 1,320  |                      |   |   | 3,297 |   |
| February 4, 2015         |   |                                      | 5,773,500 |   |           |   | 1,320  |                      |   |   | 4,225 |   |

----

| For the year ended December 31, |   |
|---------------------------------|--------|
| 2014                            |   |   | 2015 |   |   | 2016 |   |
| Pre-tax discountrate            |   |   | Terminal growthrate |   |   | Pre-tax discountrate |   |   | Terminal growthrate |   |   | Pre-tax discountrate |   |   | Terminal growthrate |   |
|                            | 14.4   | % |   |   | 1.3 | % |   |   | 14.7 | % |   |   | 1.4 | % |   |   | 11.7 | % |   |   | 1.1 | % |

----

| · | quoted prices in active markets for identical assets or liabilities; |
|--------|----------------------------------------------------------------------|

| · | fair value calculated using observable inputs other than quoted prices for the assets or liabilities, either directly or indirectly; and |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|

| · | fair value calculated using valuation techniques incorporating unobservable inputs. |
|--------|-------------------------------------------------------------------------------------|

----

|                                        |   | December 31, |      |
|---------------------------------------------|--------|--------------|-----------|
|                                        |   | 2014         |      |   | 2015 |   |   | 2016 |   |
| Discount rate                          |   |         | 3.0       | % |   |   | 2.6 | % |   |   | 3.4 | % |
| Weighted average of future salary increases |   |         | 9.9%-11.9 | % |   |   | 9.5%-14.4 | % |   |   | 8.6%-11.3 | % |

|                                  |   | For the year ended December 31, 2016 |   |
|---------------------------------------|--------|--------------------------------------|--------|
|                                  |   | Discount rate                        |   |   | Salary increase rate |   |
|                                  |   | 100 basis points increase            |   |   | 100 basis points decrease |   |   | 100 basis points increase |   |   | 100 basis points decrease |   |
|                                  |   | (in millions of yen)                 |   |
| Impact on defined benefit obligations |   | ¥                               | (842   | ) |   | ¥ | 1,040 |   |   | ¥ | 972 |   |   | ¥ | (810 | ) |

----

----

***Item 6.A.   ***

|                   |   |                                                           |
|------------------------|--------|----------------------------------------------------------------|
| Name                   | Age    | Position/Title                                                 |
| Takeshi Idezawa   | 43     | Representative Director, President and Chief Executive Officer |
| Jun Masuda        | 39     | Director and Chief Strategy & Marketing Officer       |
| Joongho Shin      | 44     | Director and Chief Global Officer                              |
| In Joon Hwang     | 51     | Director and Chief Financial Officer                           |
| Hae Jin Lee       | 49     | Director and Chairman of the Company                      |
| Tadashi Kunihiro  | 61     | Outside Director                                               |
| Koji Kotaka       | 58     | Outside Director                                               |
| Rehito Hatoyama   | 42     | Outside Director                                               |
| Hitoshi Kurasawa  | 66     | Corporate Auditor                                              |
| Jin Hee Kim       | 50     | Corporate Auditor                                              |
| Takashi Kanai     | 53     | Corporate Auditor                                              |

***Jun Masuda***

***Hae Jin Lee***

----

----

| Executive Officers      | Age | Position/Title                                                 |
|-------------------------|-----|----------------------------------------------------------------|
| Takeshi Idezawa    | 43  | Representative Director, President and Chief Executive Officer |
| Jun Masuda         | 39  | Director and Chief Strategy & Marketing Officer       |
| Joongho Shin       | 44  | Director and Chief Global Officer                              |
| In Joon Hwang           | 51  | Director and Chief Financial Officer                           |
| Euibin Park        | 41  | Chief Technology Officer                                       |
| Heechan Yang       | 37  | Head of Technology Strategy Department and Data Labs      |
| Seok-Ho Yang       | 38  | Head of LINE Development Department 1                     |
| Shintaro Tabata    | 40  | Head of Corporate Business                                |
| Tomohiro Ikebe     | 39  | Head of Services Development                              |
| Takeshi Shimamura  | 39  | Head of Commerce Media                                         |
| Youngsu Ko              | 40  | Head of LINE Service & B2B Business                        |

***Shintaro Tabata***

----

|                            |       | Totalamount(in millions of yen) |    |         | By type (in millions of yen) |   | Numberofpersons |   |
|---------------------------------|------------|---------------------------------|---------|--------------|------------------------------|--------|-----------------|--------|
|                            | Basesalary |                            |    | Stockoptions |                         |   | Bonuses         |   | Retirementallowances |
| Directors(1)                    |       |                            | 6,134   |         |                         |   | 273             |   |   |   | 5,714 |   |   |   | 147 |   | – |   |   | 5 |   |
| Outside directors               |       |                            | 28      |         |                         |   | 28              |   |   |   | – |   |   |   | – |   | – |   |   | 3 |   |
| Full-time corporate auditors(2) |       |                            | – |         |                         |   | –         |   |   |   | – |   |   |   | – |   | – |   |   | 1 |   |
| Outside corporate auditors      |       |                            | 11      |         |                         |   | 11              |   |   |   | – |   |   |   | – |   | – |   |   | 2 |   |

|                 |        |                  |   |                  |   |                                 |    |   |                      |   |    |   |   |   |    |   |
|----------------------|-------------|-----------------------|--------|-----------------------|--------|--------------------------------------|---------|--------|---------------------------|--------|---------|--------|--------|--------|---------|--------|
| Name                 |        | Position/Title        |   | Company               |   | Type and amount (in millions of yen) |    |   | Total(in millions of yen) |   |
|                 | Base salary |                  |   | Stockoptions          |   |                                 | Bonuses |   |
| Joongho Shin         |        | Director              |   | LINE Corporation      |   |                                 | 8       |   |                      |   | 5,592   |   |   |   | – |   |   |   |  |   |
|                      |        |    Director |   | LINE Plus Corporation |   |                                 | 84      |   |                      |   | – |   |   |   | 56      |   |   |   | 5,740(1)  |   |
| Takeshi Idezawa |        | Director              |   | LINE Corporation      |   |                                 | 50      |   |                      |   | 71      |   |   |   | 24      |   |   |   | 145 |   |
| Jun Masuda           |        | Director              |   | LINE Corporation      |   |                                 | 36      |   |                      |   | 51      |   |   |   | 20      |   |   |   | 106 |   |

----

----

----

|                |   |                          |   |
|---------------------|--------|-------------------------------|--------|
| Location            |   | Number of full-time employees |   |
| Japan          |   |                          | 1,344  |   |
| Outside Japan  |   |                          | 1,741  |   |
| Total          |   |                          | 3,085  |   |

----

|                  |   |                        |   |                        |   |                        |   |   |                      |   |   |   |
|-----------------------|--------|-----------------------------|--------|-----------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|--------|--------|
| Name                  |   | Grant Date                  |   | Exercise period             |   | Exercise price(per share)   |   |   | Number of shares issuable |   |
|                  | From   |                        | To     |
| Joongho Shin     |   | December 17, 2012 |   | December 18, 2014 |   | December 17, 2022 |   | ¥ | 344                       |   |   |   | 6,790,000 |   |
|                  |   | February 4, 2015       |   | February 4, 2017            |   | February 3, 2025            |   |   | 1,320                     |   |   |   | 3,474,500 |   |
| Hae Jin Lee      |   | December 17, 2012      |   | December 18, 2014           |   | December 17, 2022      |   |   | 344                       |   |   |   | 5,572,000 |   |
| Takeshi Idezawa  |   | December 16, 2013      |   | December 17, 2015      |   | December 16, 2023      |   |   | 344                       |   |   |   | 52,500 |   |
|                       |   | February 4, 2015       |   | February 4, 2017            |   | February 3, 2025            |   |   | 1,320                     |   |   |   | 44,000 |   |
| Jun Masuda       |   | December 16, 2013      |   | December 17, 2015      |   | December 16, 2023      |   |   | 344                       |   |   |   | 63,000 |   |
|                  |   | February 4, 2015       |   | February 4, 2017            |   | February 3, 2025            |   |   | 1,320                     |   |   |   | 31,500 |   |

***Item 7.A.   ******Major Shareholders***

| Name of shareholder  |   | Number of shares owned |        |   | Percentage ofoutstanding shares |   |
|----------------------|--------|------------------------|-------------|--------|---------------------------------|--------|
| NAVER Corporation(1) |   |                   | 174,992,000 |   |                            |   | 80.4 | % |

| (1) | Prior to our IPO in July 2016, in which we issued 40,250,000 shares of common stock (including over-allotments), NAVER Corporation owned 100.0% of the outstanding shares of our common stock as a result of our issuance of common stock to NAVER Corporation in May 2012. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

***Item 8.A.   ***

----

***Item 9.A.   ******Offer and Listing Details***

----

|                                    |   | Tokyo Stock ExchangePrice per share of common stock |   |   | New York Stock ExchangePrice per share of ADS |   |
|-----------------------------------------|--------|-----------------------------------------------------|--------|--------|-----------------------------------------------|--------|
|                                    |   |                                                |   |   |                                          |   |
|                                    |   | High                                                |   |   | Low                                           |   |   | High |   |   | Low |   |
|                                    |   | (In yen)                                            |   |   | (In US$)                                      |   |
| Annual highs and lows                   |   |                                                |   |   |                                          |   |   |   |   |   |   |   |
| Fiscal year 2016 (from July 15, 2016)   |   |                                                | 5,060  |   |                                          |   | 3,820 |   |   |   | 49.63 |   |   |   | 33.52 |   |
|  Quarterly highs and lows          |   |                                                |   |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Third Quarter 2016 (from July 15, 2016) |   |                                                | 5,060  |   |                                          |   | 3,820 |   |   |   | 49.63 |   |   |   | 36.53 |   |
| Fourth Quarter 2016                |   |                                                | 5,000  |   |                                          |   | 3,955 |   |   |   | 48.48 |   |   |   | 33.52 |   |
| First Quarter 2017 (through March 24)   |   | 4,185                                               |   |   | 3,515                                         |   |   | 37.55 |   |   | 30.96 |   |
|  Monthly highs and lows            |   |                                                |   |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| September 2016                     |   |                                                | 5,060  |   |                                          |   | 4,395 |   |   |   | 49.63 |   |   |   | 41.53 |   |
| October 2016                       |   |                                                | 5,000  |   |                                          |   | 4,305 |   |   |   | 48.48 |   |   |   | 40.46 |   |
| November 2016                      |   |                                                | 4,410  |   |                                          |   | 3,975 |   |   |   | 40.80 |   |   |   | 37.39 |   |
| December 2016                      |   |                                                | 4,455  |   |                                          |   | 3,955 |   |   |   | 38.26 |   |   |   | 33.52 |   |
| January 2017                       |   |                                                | 4,185  |   |                                          |   | 3,625 |   |   |   | 36.90 |   |   |   | 31.80 |   |
| February 2017                      |   |                                                | 3,895  |   |                                          |   | 3,515 |   |   |   | 34.56 |   |   |   | 30.96 |   |
| March 2017 (through March 24)      |   | 4,185                                               |   |   | 3,860                                         |   |   | 37.55 |   |   | 34.11 |   |

***Item 10.A. ******Share Capital***

----

----

|  | (a) | the company's articles of incorporation so provide (our articles of incorporation do not have provisions to this effect); |
|--|-----|---------------------------------------------------------------------------------------------------------------------------|

|  | (b) | the normal term of office of directors is no longer than one year (our articles of incorporation do not have provisions to this effect); and |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | the company's non-consolidated annual financial statements and certain documents for the latest fiscal year fairly present its assets and profit or loss, as required by the ordinances of the Ministry of Justice. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (a) | the amount of Surplus, as described below; |
|--|-----|--------------------------------------------|

|  | (b) | in the event that extraordinary financial statements as of, or for a period from the beginning of the fiscal year to, the specified date are approved, the aggregate amount of (i) the aggregate amount as provided for by an ordinance of the Ministry of Justice as the net income for such period described in the statement of income constituting the extraordinary financial statements, and (ii) the amount of consideration that we received for the treasury stock that we disposed of during such period; |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | the book value of our treasury stock; |
|--|-----|---------------------------------------|

|  | (d) | in the event that we disposed of treasury stock after the end of the previous fiscal year, the amount of consideration that we received for such treasury stock; |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (e) | in the event described in (b) in this paragraph, the aggregate amount as provided for by an ordinance of the Ministry of Justice as the net loss for such period described in the statement of income constituting the extraordinary financial statements; and |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (f) | certain other amounts set forth in the ordinances of the Ministry of Justice, including (if the sum of one-half of goodwill and the deferred assets exceeds the total of share capital, additional paid-in capital and legal earnings reserve, each such amount as it appears on the balance sheet as of the end of the previous fiscal year) all or a certain part of such excess amount as calculated in accordance with the ordinances of the Ministry of Justice. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | (I) | the aggregate of other capital surplus and other retained earnings at the end of the previous fiscal year; |
|--|-----|------------------------------------------------------------------------------------------------------------|

|  | (II) | in the event that we disposed of treasury stock after the end of the previous fiscal year, the difference between the book value of such treasury stock and the consideration that we received for such treasury stock; |
|--|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (III) | in the event that we reduced our share capital after the end of the previous fiscal year, the amount of such reduction less the portion thereof that has been transferred to additional paid-in capital and/or legal earnings reserve (if any); |
|--|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (IV) | in the event that we reduced additional paid-in capital and/or legal earnings reserve after the end of the previous fiscal year, the amount of such reduction less the portion thereof that has been transferred to share capital (if any); |
|--|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (V) | in the event that we cancelled treasury stock after the end of the previous fiscal year, the book value of such treasury stock; |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------|
|  | (VI) | in the event that we distributed Surplus after the end of the previous fiscal year, the aggregate of the following amounts: |
|--|------|-----------------------------------------------------------------------------------------------------------------------------|

|  | (1) | the aggregate amount of the book value of the distributed assets, excluding the book value of such assets that would be distributed to shareholders but for their exercise of the right to receive dividends in cash instead of dividends in kind; |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | the aggregate amount of cash distributed to shareholders who exercised the right to receive dividends in cash instead of dividends in kind; and |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) | the aggregate amount of cash paid to shareholders holding fewer shares than the shares that were required in order to receive dividends in kind; |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (1) | in the event that the amount of Surplus was reduced and transferred to additional paid-in capital, legal earnings reserve and/or share capital after the end of the previous fiscal year, the amount so transferred; |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | in the event that we distributed Surplus after the end of the previous fiscal year, the amount set aside in additional paid-in capital and/or legal earnings reserve; |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) | in the event that we disposed of treasury stock in the process of (x) a merger in which we acquired all rights and obligations of a company, (y) a corporate split in which we acquired all or a part of the rights and obligations of a split company or (z) a share exchange (kabushiki kokan) in which we acquired all shares of a company after the end of the previous fiscal year, the difference between the book value of such treasury stock and the consideration that we received for such treasury stock; |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | (4) | in the event that the amount of Surplus was reduced in the process of a corporate split in which we transferred all or a part of our rights and obligations after the end of the previous fiscal year, the amount so reduced; |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (5) | in the event of (x) a merger in which we acquired all rights and obligations of a company, (y) a corporate split in which we acquired all or a part of the rights and obligations of a split company or (z) a share exchange in which we acquired all shares of a company after the end of the previous fiscal year, the aggregate amount of (i) the amount of the other capital surplus after such merger, corporate split or share exchange, less the amount of other capital surplus before such merger, corporate split or share exchange, and (ii) the amount of the other retained earnings after such merger, corporate split or share exchange, less the amount of other retained earnings before such merger, corporate split or share exchange; and |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (6) | in the event that an obligation to cover a deficiency, such as the obligation of a person who subscribed newly issued shares with an unfair amount to be paid in, was fulfilled after the end of the previous fiscal year, the amount of other capital surplus increased by such payment. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|  | • | to receive dividends; |
|--|---------|-----------------------|

|  | • | to receive cash or other assets in case of a reverse stock split or stock split, share exchange, share transfer or merger; |
|--|---------|----------------------------------------------------------------------------------------------------------------------------|

|  | • | to be allotted rights to subscribe for free for new shares and stock acquisition rights when such rights are granted to shareholders; or |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | to participate in any distribution of surplus assets upon liquidation. |
|--|---------|------------------------------------------------------------------------|

----

|  | • | any amendment to our articles of incorporation (except for amendments that may be authorized solely by the board of directors under the Companies Act); |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | a reduction of share capital, subject to certain exceptions under which a shareholders' resolution is not required, such as a reduction of share capital for the purpose of replenishing capital deficiencies; |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | transfer of the whole or a part of our equity interests in any of our subsidiaries, subject to certain exceptions under which a shareholders' resolution is not required; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | a dissolution, merger or consolidation, subject to certain exceptions under which a shareholders' resolution is not required; |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------|

|  | • | the transfer of the whole or a substantial part of our business, subject to certain exceptions under which a shareholders' resolution is not required; |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | the taking over of the whole of the business of any other corporation, subject to certain exceptions under which a shareholders' resolution is not required; |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | a corporate split, subject to certain exceptions under which a shareholders' resolution is not required; |
|--|---------|----------------------------------------------------------------------------------------------------------|

|  | • | share exchange (kabushiki kokan) or share transfer (kabushiki iten) for the purpose of establishing 100% parent-subsidiary relationships, subject to certain exceptions under which a shareholders' resolution is not required; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | any issuance of new shares or transfer of existing shares held by us as treasury stock at a "specially favorable" price and any issuance of stock acquisition rights or bonds with stock acquisition rights at a "specially favorable" price or in a "specially favorable" condition to any persons other than shareholders; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | any acquisition by us of our own shares from specific persons other than our subsidiaries (if any); |
|--|---------|-----------------------------------------------------------------------------------------------------|

|  | • | reverse stock split; or |
|--|---------|-------------------------|

|  | • | the removal of a corporate auditor. |
|--|---------|-------------------------------------|

----

|  | • | by purchase on any stock exchange on which our shares are listed or by way of tender offer, pursuant to a resolution of our board of directors subject to certain requirements; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | by purchase from a specific party other than any of our subsidiaries, pursuant to a special resolution of a general meeting of shareholders; and |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | by purchase from any of our subsidiaries, pursuant to a resolution of the board of directors. |
|--|---------|-----------------------------------------------------------------------------------------------|

----

|  | • | notices to a shareholder fail to arrive for a continuous period of five or more years at the shareholder's registered address in the register of our shareholders or at the address otherwise notified to us, and |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | the shareholder fails to receive distribution of Surplus on the shares for a continuous period of five or more years at the address registered in the register of our shareholders or at the address otherwise notified to us, |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | (i) | individuals who reside within Japan; or |
|--|-----|-----------------------------------------|

|  | (ii) | corporations whose principal offices are located within Japan. |
|--|------|----------------------------------------------------------------|

|  | (i) | individuals who do not reside in Japan; or |
|--|-----|--------------------------------------------|

|  | (ii) | corporations whose principal offices are located outside Japan. |
|--|------|-----------------------------------------------------------------|

|  | (i) | individuals who do not reside in Japan; |
|--|-----|-----------------------------------------|

|  | (ii) | corporations or other entities organized under the laws of foreign countries or whose principal offices are located outside Japan; |
|--|------|------------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | corporations of which 50% or more of the total voting rights are held, directly or indirectly, by individuals and/or corporations falling within (i) and/or (ii) above; or |
|--|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iv) | corporations or other entities having a majority of either (A) directors or other persons equivalent thereto or (B) directors or other persons equivalent thereto having the power of representation who are non-resident individuals. |
|--|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | the aggregate purchase price of the relevant shares is ¥100 million or less; |
|--|-----|----------------------------------------------------------------------------------------|

|  | (ii) | the acquisition is effected through any bank, financial instruments business operator or other entity prescribed by the Foreign Exchange Regulations acting as an agent or intermediary; or |
|--|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (iii) | the acquisition constitutes an "inward direct investment" described below. |
|--|-------|----------------------------------------------------------------------------|

----

----

----

----

----

----

----

*Item 10.I.   Subsidiary Information*

|  | • | financial assets include cash and cash equivalents, short-term financial instruments, available-for-sale financial assets, trade and other receivables and other financial assets; and |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | financial liabilities include trade and other payables, borrowings and other financial liabilities. |
|--|---------|-----------------------------------------------------------------------------------------------------|

|                           |   | By maturities (as of December 31, 2015)                 |   |   | Total as of December 31, |   |
|--------------------------------|--------|---------------------------------------------------------|--------|--------|--------------------------|--------|
|                           |   | 2017                                                    |   |   | 2018                     |   |   | 2019 |   |   | 2020 andBeyond |   |   | 2016 |   |   | 2015 |   |   | 2014 |   |
|                           |   | Total                                                   |   |   | Fair value               |   |   | Total |   |   | Fair value |   |   | Total |   |   | Fair value |   |
|                           |   | (in millions of yen, won and U.S. dollar, except rates) |   |
| Local currency (Japanese yen): |   |                                                    |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed rate                |   | ¥                                                  | 258    |   |                     | ¥ | — |   |   | ¥ | — |   |   | ¥ | — |   |   | ¥ | 258 |   |   | ¥ | 258 |   |   | ¥ | 465 |   |   | ¥ | 465 |   |   | ¥ | 957 |   |   | ¥ | 957 |   |
| Average weighted rate(1)       |   |                                                    | 1.00   | %      |                     |   | — |   |   |   | — |   |   |   | — |   |   |   | 1.00 | % |   |   | — |   |   |   | 1.00 | % |   |   | — |   |   |   | 1.10 | % |   |   | — |   |
| Variable rate             |   |                                                    | 21,667 |   |                     |   | — |   |   |   | — |   |   |   | — |   |   |   | 21,667 |   |   |   | 21,667 |   |   |   | 42,510 |   |   |   | 42,510 |   |   |   | 22,705 |   |   |   | 22,705 |   |
| Average weighted rate(1)       |   |                                                    | 0.07   | %      |                     |   | — |   |   |   | — |   |   |   | — |   |   |   | 0.07 | % |   |   | — |   |   |   | 0.21 | % |   |   | — |   |   |   | 0.28 | % |   |   | — |   |
| Total                     |   |                                                    | 21,925 |   |                     |   | — |   |   |   | — |   |   |   | — |   |   |   | 21,925 |   |   |   | 21,925 |   |   |   | 42,975 |   |   |   | 42,975 |   |   |   | 23,662 |   |   |   | 23,662 |   |

----

|                   | For the year ended December 31,        |   |
|------------------------|----------------------------------------|--------|
|                   | 2015                                   |   | 2016 |   |
|                   | Shareholder's equity                   |   | Profit (loss) before tax |   | Shareholder's equity |   | Profit (loss) before tax |   |
|                   | Appreciationof functionalcurrency by5% |   | Depreciationof functionalcurrency by5% |   | Appreciationof functionalcurrency by5% |   | Depreciationof functionalcurrency by5% |   | Appreciationof functionalcurrency by5% |   | Depreciationof functionalcurrency by5% |   | Appreciationof functionalcurrency by5% |   | Depreciationof functionalcurrency by5% |   |
|                   | (in thousands of yen)                  |   |
| Korean won        |                                   | ¥ | 111,279 |   |   | ¥ | (105,980 | ) |   | ¥ | 143,735 |   |   | ¥ | (136,891 | ) |   | ¥ | 157,104 |   |   | ¥ | (149,622 | ) |   | ¥ | 207,170 |   |   | ¥ | (197,305 | ) |
| U.S. dollar       |                                   |   | 163,904 |   |   |   | (156,099 | ) |   |   | 219,417 |   |   |   | (208,969 | ) |   |   | 195,453 |   |   |   | (186,145 | ) |   |   | 260,190 |   |   |   | (247,800 | ) |
| Taiwanese dollar  |                                   |   | 4,067 |   |   |   | (3,873 | ) |   |   | 5,367 |   |   |   | (5,111 | ) | – |   | – |   | – |   | – |   |
| Euro              |                                   |   | (45,034 | ) |   |   | 42,889 |   |   |   | (56,476 | ) |   |   | 53,787 |   |   |   | 20,457 |   |   |   | (19,483 | ) |   |   | 26,953 |   |   |   | (25,670 | ) |
| Thai baht              | –                                |   | – |   | – |   | – |   |   |   | 47,362 |   |   |   | (45,107 | ) |   |   | 64,086 |   |   |   | (61,034 | ) |

----

|                    |                                 |   |                                    |   |                                |   |                                    |   |                           |   |                                |   |                                |   |                                   |
|-------------------------|--------------------------------------|--------|-----------------------------------------|--------|-------------------------------------|--------|-----------------------------------------|--------|--------------------------------|--------|-------------------------------------|--------|-------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                    | For the year ended December 31, |
|                    |     2015         |   | 2016                                    |
|                    | Shareholder's equity                 |   | Profit (loss) before tax |   | Shareholder's equity                |   | Profit (loss) before tax |
|                    | Increase of50 basispoints       |   | Decrease of50 basispoints     |   | Increase of50 basispoints |   | Decrease of50 basispoints     |   | Increase of50 basispoints |   | Decrease of50 basispoints |   | Increase of50 basispoints |   | Decrease of50 basispoints                                                                                                                                                                    |
|                    | (in thousands of yen)                |
| Interest expenses  | ¥(39,975)                       |   | ¥15,910                            |   | ¥(59,717)                      |   | ¥23,768                            |   | ¥(74,004)                 |   | ¥11,044                        |   | ¥(108,335)                     |   | ¥16,167                                                                                                                                                                                           |

----

|                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                             |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Persons depositing or withdrawing shares must pay:                                                                                                                                                                                                                                                               |   | For:                                                                                                                                                                                                             |
| US$5.00 (or less) per each 100 ADSs                                                                                                                                                                                                                                                                              |   | Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates |
|                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                             |
| US$0.05 (or less) per ADS                                                                                                                                                                                                                                                                                        |   | Any distribution of cash proceeds to you                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                             |
| A fee equivalent to the fee that would be payable if securities distributed to you had been shares of our common stock and the shares had been deposited for issuance of ADSs                                                                                                                                    |   | Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders                                                                                 |
|                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                             |
| US$0.05 per ADS per calendar year                                                                                                                                                                                                                                                                                |   | Depositary services                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                             |
| Registration or transfer fees                                                                                                                                                                                                                                                                                    |   | Transfer and registration of shares of our common stock on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares                                             |
|                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                             |
| Expenses of the depositary                                                                                                                                                                                                                                                                                       |   | Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) converting foreign currency to U.S. dollars                                                                          |
|                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                             |
| Taxes and other governmental charges the depositary or the custodian has to pay on any ADS or share underlying an ADS, including any applicable interest and penalties thereon and any share transfer or other taxes or governmental charges; for example, stock transfer taxes, stamp duty or withholding taxes |   | As necessary                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                             |
| Any charges incurred by the depositary or its agents for servicing the deposited securities                                                                                                                                                                                                                      |   | As necessary                                                                                                                                                                                                     |

----

----

----

|                     |   | For the year ended December 31, |   |
|--------------------------|--------|---------------------------------|--------|
|                     |   | 2015                            |   |   | 2016 |   |
|                     |   | (In millions of yen)            |   |
| Audit fees               |   | ~~¥~~                      | 286    |   |   | ~~¥~~ | 388 |   |
| Audit‐related fees |   | –                         |   |   | – |   |
| Tax fees                 |   |                            | 30     |   |   |   | 33 |   |
| Other fees               |   |                            | 16     |   |   |   | 6 |   |
| Total fees          |   | ~~¥~~                      | 332    |   |   | ~~¥~~ | 427 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| NYSE Corporate Governance Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Our Corporate Governance Practice                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Director Independence                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Listed companies must have a majority of independent directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | In accordance with the listing rules of the Tokyo Stock Exchange, we are required to have at least one "independent" director or corporate auditor. Requirements for an independent director/corporate auditor are stringent. An independent director/corporate auditor may not be (a) a person who is, or has been until recently, a major business counterparty or an executive director, executive officer, manager or employee of the major business counterparties, (b) a person who is, or has been until recently, a professional advisor receiving significant remuneration from the company, (c) a person who has been until recently a director, executive officer, corporate auditor, manager or employee of the parent company or an executive director, executive officer, manager or employee of the parent company's subsidiaries, or (d) a relative of persons mentioned in (a), (b) or (c) or a relative of certain scope of persons such as directors of the parent company or any of its subsidiaries. Three of the eight members of our board of directors are deemed to be "independent" directors under the Securities Listing Regulations of the Tokyo Stock Exchange. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Nomination/Corporate Governance Committee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Listed companies must have a nomination/corporate governance committee composed entirely of independent directors. The committee must have a charter that addresses the purpose, responsibilities (including development of corporate governance guidelines) and annual performance evaluation of the committee.                                                                                                                                                                                                                                                                                                                                                                                 |   | Although we are not required to have a nomination/corporate governance committee under Japanese law, we have voluntarily established a committee, composed of our existing outside directors and president, to advise our board of directors in the selection of candidates for our outside directors. Our directors are elected at a general meeting of shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Compensation Committee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Listed companies must have a compensation committee composed entirely of independent directors. The committee must have a charter that addresses the purpose, responsibilities and annual performance evaluation of the committee. The charter must be made available on the company's website. In addition, in accordance with the U.S. Securities and Exchange Commission rules adopted pursuant to Section 952 of the Dodd-Frank Act, the New York Stock Exchange listing standards were amended to expand the factors relevant in determining whether a committee member has a relationship with the company that will materially affect that member's duties to the compensation committee. |   | Under Japanese law, we are not required to establish a compensation committee, as we employ the board of corporate auditors system. Accordingly, we do not currently have a compensation committee. The aggregate amount of compensation to be paid to all directors and corporate auditors are determined by a resolution of the general meeting of shareholders, unless their compensation is provided for in the articles of incorporation. Based on such resolution, the distribution of compensation among directors is broadly delegated to our board of directors, and the distribution of compensation among corporate auditors is determined by consultation among our corporate auditors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Executive Session                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Non-management directors of listed companies must meet in regularly scheduled executive sessions without management.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | We do not normally hold executive sessions solely attended by non-management directors as that is not required under Japanese law, but we may elect to do so at the discretion of the directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Audit Committee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Listed companies must have an audit committee that satisfies the requirements of Rule 10A-3 under the Exchange Act. All members must be independent. The committee must have a charter addressing the committee's purpose, an annual performance evaluation of the committee, and the duties and responsibilities of the committee. The charter must be made available on the company's website.                                                                                                                                                                                                                                                                                                 |   | Like a majority of Japanese companies, we maintain a board of corporate auditors that is legally separate and independent from the board of directors. The board of corporate auditors is required to prepare an audit report based on the audit reports issued by the individual corporate auditors and submit such audit reports to a relevant director and, in the case of audit reports related to financial statements, independent certified public accountants are required to examine the financial statements and business reports to be submitted by a representative director at the general meetings of shareholders and to prepare an audit report. The board of corporate auditors is also empowered to establish the audit principles, the method of examination by the corporate auditors of our affairs and financial position and any other matters relating to the performance of the corporate auditors' duties.                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

----

| Audit Committee Additional Requirements                                                                                                                                                                                                                                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Listed companies must have an audit committee that is composed of at least three directors. Listed companies must maintain an internal audit function to provide management and the audit committee with ongoing assessments of the listed company's risk management processes and system of internal control. |   | Currently, we have three corporate auditors. Each corporate auditor has a four-year term.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Shareholder Approval of Equity Compensation Plan                                                                                                                                                                                                                                                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Listed companies must allow its shareholders to exercise their voting rights with respect to any material revision to the company's equity compensation plan.                                                                                                                                                  |   | The adoption of an equity compensation plan including stock option-based plans for directors and corporate auditors requires shareholder approval. Stock options may only be issued with the approval of the board of directors, unless stock options are granted on preferential terms to the recipient, in which case we must obtain shareholder approval by a "special resolution" of a general meeting of shareholders. Under our articles of incorporation, two-thirds or more of the votes of the shareholders in attendance, who must hold in the aggregate a majority of the voting rights of shareholders entitled to exercise voting rights, is required for such a special resolution of our shareholders. |
|                                                                                                                                                                                                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Corporate Governance Guidelines                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Listed companies must adopt and disclose corporate governance guidelines.                                                                                                                                                                                                                                      |   | Although we do not maintain separate corporate governance guidelines and are not required to adopt such guidelines under Japanese law, we are in compliance with the rules of the Tokyo Stock Exchange, which require listed companies, including us, to comply with the principles of the Corporate Governance Code established by the Tokyo Stock Exchange, and in cases of noncompliance with some or all of the principles, to disclose the reasons for such noncompliance.                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Code of Business Conduct and Ethics                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Listed companies must adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers.                                                                                                       |   | We have adopted a Group Code of Conduct which sets forth legal and ethical standards of conduct for employees, officers, directors, contract staff and external representatives and agents of our group. A copy of our Group Code of Conduct is available on our website at www.linecorp.com.                                                                                                                                                                                                                                                                                                                                                                                                                              |

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|                                                                                                 | Page      |
|------------------------------------------------------------------------------------------------------|-----------|
| Report of Independent Registered Public Accounting Firm                                              | F‐1 |
| Consolidated Statements of Financial Position as of December 31, 2015 and 2016                       | F‐3 |
| Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2014, 2015 and 2016 | F‐5 |
| Consolidated Statements of Changes in Equity for the Years Ended December 31, 2014, 2015 and 2016    | F‐6 |
| Consolidated Statements of Cash Flows for the Years Ended December 31, 2014, 2015 and 2016           | F‐8 |
| Notes to Consolidated Financial Statements                                                           | F‐9 |

----

| 1.1   | —  | Articles of incorporation of LINE Corporation (English translation)                                              |
|-------|---------------|------------------------------------------------------------------------------------------------------------------|
| 1.2*  | —  | Share Handling Regulations (English translation)                                                                 |
| 1.3   | —  | Regulations of the Board of Directors (English translation)                                                      |
| 1.4*  | —  | Regulations of the Board of Corporate Auditors (English translation)                                             |
| 2.1*  | —  | Form of Deposit Agreement (including Form of American Depositary Receipt)                                        |
| 8.1** | —  | List of Subsidiaries of the Registrant                                                                           |
| 12.1  | —  | Certification by the Principal Executive Officer pursuant to Section 302 of the Sarbanes‐Oxley Act of 2002 |
| 12.2  | —  | Certification by the Principal Financial Officer pursuant to Section 302 of the Sarbanes‐Oxley Act of 2002 |
| 13.1  | —  | Certification by the Principal Executive Officer pursuant to Section 906 of the Sarbanes‐Oxley Act of 2002 |
| 13.2  | —  | Certification by the Principal Financial Officer pursuant to Section 906 of the Sarbanes‐Oxley Act of 2002 |

| * | Previously filed with the Registration Statement on Form F-1 (File No. 333-211954), initially filed on June 10, 2016, and incorporated herein by reference. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ** | Incorporated by reference to Item 4.C. Organizational Structure. |
|----|------------------------------------------------------------------|

----

|   | LINE Corporation               |   |
|--------|--------------------------------|--------|
|   | (Registrant)                   |   |
|   |                           |   |
|   | /s/ In Joon Hwang         |   |
|   | Name: In Joon Hwang            |   |
|   | Title: Chief Financial Officer |   |
|   |                           |   |

----

|                                                                                                      |   |
|-----------------------------------------------------------------------------------------------------------|--------|
|                                                                                                      | Page   |
|                                                                                                      |   |
| Report of Independent Registered Public Accounting Firm                                              | F-1    |
|                                                                                                      |   |
| Report of Independent Registered Public Accounting Firm                                              | F-2    |
|                                                                                                      |   |
| Consolidated Statements of Financial Position as of December 31, 2015 and 2016                  | F-3    |
|                                                                                                      |   |
| Consolidated Statements of Profit or Loss for the Years Ended December 31, 2014, 2015 and 2016       | F-4    |
|                                                                                                      |   |
| Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2014, 2015 and 2016 | F-5    |
|                                                                                                      |   |
| Consolidated Statements of Changes in Equity for the Years Ended December 31, 2014, 2015 and 2016    | F-6    |
|                                                                                                      |   |
| Consolidated Statements of Cash Flows for the Years Ended December 31, 2014, 2015 and 2016           | F-8    |
|                                                                                                      |   |
| Notes to Consolidated Financial Statements                                                                | F-9    |

----

----

----

|                                                   |   |   |    |   |                  |   |        |              |   |
|--------------------------------------------------------|--------|--------|---------|--------|-----------------------|--------|-------------|-------------------|--------|
|                                                   |   |   |    |   | (In thousands of yen) |   |
|                                                   |   |   |    |   |                  |   |        |              |   |
|                                                   |   | Notes  |    |   | December 31, 2015     |   |        | December 31, 2016 |   |
| Assets                                                 |   |   |    |   |                  |   |        |              |   |
| Current assets                                         |   |   |    |   |                  |   |        |              |   |
| Cash and cash equivalents                              |   |   | 6, 25   |   |                  |   | 33,652,250  |              |   |   | 134,698,255 |   |
| Trade and other receivables                            |   |   | 7,15,25 |   |                  |   | 27,248,497  |              |   |   | 28,166,787 |   |
| Other financial assets, current                        |   |   | 15,25   |   |                  |   | 341,403     |              |   |   | 6,952,061 |   |
| Inventories                                            |   |   | 8       |   |                  |   | 1,475,939   |              |   |   | 960,689 |   |
| Other current assets                                   |   |   |    |   |                  |   | 2,454,776   |              |   |   | 3,928,749 |   |
| Total current assets                                   |   |   |    |   |                  |   | 65,172,865  |              |   |   | 174,706,541 |   |
| Non-current assets                                     |   |   |    |   |                  |   |        |              |   |   |   |   |
| Property and equipment                                 |   |   | 9, 17   |   |                  |   | 10,500,750  |              |   |   | 9,028,678 |   |
| Goodwill                                               |   |   | 10, 11  |   |                  |   | 3,120,767   |              |   |   | 3,399,680 |   |
| Other intangible assets                                |   |   | 10, 11  |   |                  |   | 1,011,531   |              |   |   | 1,851,493 |   |
| Investments in associates and joint ventures           |   |   | 32      |   |                  |   | 1,785,826   |              |   |   | 12,712,067 |   |
| Other financial assets, non-current                    |   |   | 15, 25  |   |                  |   | 23,466,920  |              |   |   | 35,715,462 |   |
| Deferred tax assets                                    |   |   | 13      |   |                  |   | 16,942,051  |              |   |   | 18,385,035 |   |
| Other non-current assets                               |   |   |    |   |                  |   | 158,521     |              |   |   | 290,151 |   |
| Total non-current assets                               |   |   |    |   |                  |   | 56,986,366  |              |   |   | 81,382,566 |   |
| Total assets                                           |   |   |    |   |                  |   | 122,159,231 |              |   |   | 256,089,107 |   |
|                                                   |   |   |    |   |                  |   |        |              |   |   |   |   |
| Liabilities                                            |   |   |    |   |                  |   |        |              |   |   |   |   |
| Current liabilities                                    |   |   |    |   |                  |   |        |              |   |   |   |   |
| Trade and other payables                               |   |   | 15, 25  |   |                  |   | 22,983,242  |              |   |   | 21,531,817 |   |
| Other financial liabilities, current                   |   |   | 15, 25  |   |                  |   | 43,933,212  |              |   |   | 24,496,804 |   |
| Accrued expenses                                       |   |   |    |   |                  |   | 7,019,114   |              |   |   | 9,049,271 |   |
| Income tax payables                                    |   |   |    |   |                  |   | 3,018,891   |              |   |   | 5,698,640 |   |
| Advances received                                      |   |   |    |   |                  |   | 9,517,756   |              |   |   | 11,286,274 |   |
| Deferred revenue                                       |   |   |    |   |                  |   | 7,820,054   |              |   |   | 9,739,023 |   |
| Provisions, current                                    |   |   | 12      |   |                  |   | 381,217     |              |   |   | 964,121 |   |
| Other current liabilities                              |   |   | 14      |   |                  |   | 1,204,230   |              |   |   | 3,669,991 |   |
| Total current liabilities                              |   |   |    |   |                  |   | 95,877,716  |              |   |   | 86,435,941 |   |
| Non-current liabilities                                |   |   |    |   |                  |   |        |              |   |   |   |   |
| Other financial liabilities, non-current               |   |   | 15, 25  |   |                  |   | 8,284       |              |   |   | – |   |
| Deferred tax liabilities                               |   |   | 13      |   |                  |   | 1,843,944   |              |   |   | 1,160,668 |   |
| Provisions, non-current                                |   |   | 12      |   |                  |   | 1,400,986   |              |   |   | 1,119,654 |   |
| Post-employment benefits                               |   |   | 16      |   |                  |   | 5,495,416   |              |   |   | 6,203,933 |   |
| Other non-current liabilities                          |   |   |    |   |                  |   | –     |              |   |   | 146,119 |   |
| Total non-current liabilities                          |   |   |    |   |                  |   | 8,748,630   |              |   |   | 8,630,374 |   |
| Total liabilities                                      |   |   |    |   |                  |   | 104,626,346 |              |   |   | 95,066,315 |   |
|                                                   |   |   |    |   |                  |   |        |              |   |   |   |   |
| Shareholders' equity                                   |   |   |    |   |                  |   |        |              |   |   |   |   |
| Share capital                                          |   |   | 19      |   |                  |   | 12,596,198  |              |   |   | 77,855,685 |   |
| Share premium                                          |   |   | 19      |   |                  |   | 18,982,776  |              |   |   | 91,208,469 |   |
| Accumulated deficit                                    |   |   |    |   |                  |   | (19,204,203 | )                 |   |   | (12,381,577 | ) |
| Accumulated other comprehensive income                 |   |   |    |   |                  |   | 5,368,524   |              |   |   | 4,151,051 |   |
| Equity attributable to the shareholders of the Company |   |   |    |   |                  |   | 17,743,295  |              |   |   | 160,833,628 |   |
| Non-controlling interests                              |   |   | 30      |   |                  |   | (210,410    | )                 |   |   | 189,164 |   |
| Total shareholders' equity                             |   |   |    |   |                  |   | 17,532,885  |              |   |   | 161,022,792 |   |
| Total liabilities and shareholders' equity             |   |   |    |   |                  |   | 122,159,231 |              |   |   | 256,089,107 |   |

----

|                                                                                               |   |   |   |   |                  |   |        |   |   |   |         |
|----------------------------------------------------------------------------------------------------|--------|--------|--------|--------|-----------------------|--------|-------------|--------|--------|--------|--------------|
|                                                                                               |   |   |   |   | (In thousands of yen) |   |
|                                                                                               |   | Notes  |   |   | 2014                  |   |        | 2015   |   | 2016   |         |
| Revenues and other operating income:                                                               |   |   |   |   |                  |   |        |   |   |   |         |
| Revenues                                                                                           |   |   | 5, 21  |   |                  |   | 86,366,269  |   |   |   | 120,405,531  |   |   |   | 140,704,308 |   |
| Other operating income                                                                             |   |   | 22     |   |                  |   | 295,901     |   |   |   | 474,363      |   |   |   | 5,892,078 |   |
| Total revenues and other operating income                                                          |   |   |   |   |                  |   | 86,662,170  |   |   |   | 120,879,894  |   |   |   | 146,596,386 |   |
|                                                                                               |   |   |   |   |                  |   |        |   |   |   |         |   |   |   |   |   |
| Operating expenses:                                                                                |   |   |   |   |                  |   |        |   |   |   |         |   |   |   |   |   |
| Payment processing and licensing expenses                                                          |   |   |   |   |                  |   | (20,597,937 | )      |   |   | (28,742,254  | ) |   |   | (29,781,027 | ) |
| Employee compensation expenses                                                                     |   |   | 16, 27 |   |                  |   | (18,288,804 | )      |   |   | (35,571,775  | ) |   |   | (39,444,686 | ) |
| Marketing expenses                                                                                 |   |   |   |   |                  |   | (18,069,254 | )      |   |   | (16,596,242  | ) |   |   | (11,832,672 | ) |
| Infrastructure and communication expenses                                                          |   |   |   |   |                  |   | (4,492,196  | )      |   |   | (7,712,095   | ) |   |   | (7,770,146 | ) |
| Authentication and other service expenses                                                          |   |   |   |   |                  |   | (7,874,144  | )      |   |   | (12,133,232  | ) |   |   | (14,393,806 | ) |
| Depreciation and amortization expenses                                                             |   |   | 9, 10  |   |                  |   | (2,369,622  | )      |   |   | (3,732,775   | ) |   |   | (5,099,580 | ) |
| Other operating expenses                                                                           |   |   | 22     |   |                  |   | (8,554,915  | )      |   |   | (14,431,395  | ) |   |   | (18,377,699 | ) |
| Total operating expenses                                                                           |   |   |   |   |                  |   | (80,246,872 | )      |   |   | (118,919,768 | ) |   |   | (126,699,616 | ) |
| Profit from operating activities                                                                   |   |   |   |   |                  |   | 6,415,298   |   |   |   | 1,960,126    |   |   |   | 19,896,770 |   |
| Finance income                                                                                     |   |   |   |   |                  |   | 86,311      |   |   |   | 70,587       |   |   |   | 87,246 |   |
| Finance costs                                                                                      |   |   |   |   |                  |   | (137,092    | )      |   |   | (105,668     | ) |   |   | (64,653 | ) |
| Share of loss of associates and joint ventures                                                     |   |   | 32     |   |                  |   | (168,050    | )      |   |   | (204,903     | ) |   |   | (832,980 | ) |
| Gain/(loss) on foreign currency transactions, net                                                  |   |   |   |   |                  |   | 66,340      |   |   |   | (519,846     | ) |   |   | (43,340 | ) |
| Other non-operating income                                                                         |   |   | 22     |   |                  |   | –     |   |   |   | 157,023      |   |   |   | 8,736 |   |
| Other non-operating expenses                                                                       |   |   | 22, 26 |   |                  |   | –     |   |   |   | (1,887,437   | ) |   |   | (1,061,913 | ) |
| Profit/(loss) before tax from continuing operations                                                |   |   |   |   |                  |   | 6,262,807   |   |   |   | (530,118     | ) |   |   | 17,989,866 |   |
| Income tax (expenses)/benefits                                                                     |   |   | 13     |   |                  |   | (7,150,566  | )      |   |   | 146,004      |   |   |   | (8,904,343 | ) |
| (Loss)/profit for the year from continuing operations                                              |   |   |   |   |                  |   | (887,759    | )      |   |   | (384,114     | ) |   |   | 9,085,523 |   |
| Profit/(loss) from discontinued operations, net of tax                                             |   |   | 23, 24 |   |                  |   | 2,891,835   |   |   |   | (7,587,997   | ) |   |   | (1,981,668 | ) |
| Profit/(loss) for the year                                                                         |   |   |   |   |                  |   | 2,004,076   |   |   |   | (7,972,111   | ) |   |   | 7,103,855 |   |
| Attributable to:                                                                                   |   |   |   |   |                  |   |        |   |   |   |         |   |   |   |   |   |
|                                                                                               |   |   |   |   |                  |   |        |   |   |   |         |   |   |   |   |   |
| The shareholders of the Company                                                                    |   |   |   |   |                  |   | 4,206,989   |   |   |   | (7,581,801   | ) |   |   | 6,762,757 |   |
| Non-controlling interests(1)                                                                       |   |   | 30     |   |                  |   | (2,202,913  | )      |   |   | (390,310     | ) |   |   | 341,098 |   |
|                                                                                               |   |   |   |   |                  |   |        |   |   |   |         |   |   |   |   |   |
|                                                                                               |   |   |   |   |                  |   |        |   |   |   |         |   | (In yen) |   |
| Earnings per share                                                                                 |   |   |   |   |                  |   |        |   |   |   |         |   |   |   |   |   |
| Basic profit/(loss) for the year attributable to the shareholders of the Company                   |   |   | 24     |   |                  |   | 24.05       |   |   |   | (43.33       | ) |   |   | 34.84 |   |
| Diluted profit/(loss) for the year attributable to the shareholders of the Company                 |   |   | 24     |   |                  |   | 22.14       |   |   |   | (39.12       | ) |   |   | 31.48 |   |
| Earnings per share from continuing operations                                                      |   |   |   |   |                  |   |        |   |   |   |         |   |   |   |   |   |
| Basic profit from continuing operations attributable to the shareholders of the Company            |   |   | 24     |   |                  |   | 7.52        |   |   |   | 0.04         |   |   |   | 45.05 |   |
| Diluted profit from continuing operations attributable to the shareholders of the Company          |   |   | 24     |   |                  |   | 6.92        |   |   |   | 0.03         |   |   |   | 40.70 |   |
| Earnings per share from discontinued operations                                                    |   |   |   |   |                  |   |        |   |   |   |         |   |   |   |   |   |
| Basic profit/(loss) from discontinued operations attributable to the shareholders of the Company   |   |   | 24     |   |                  |   | 16.53       |   |   |   | (43.37       | ) |   |   | (10.21 | ) |
| Diluted profit/(loss) from discontinued operations attributable to the shareholders of the Company |   |   | 24     |   |                  |   | 15.22       |   |   |   | (39.15       | ) |   |   | (9.22 | ) |

| (1) | For the year ended December 31, 2014, the non-controlling interest was mainly held by NAVER Corporation, the shareholder of the Company. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                 |   |                  |   |   |   |      |       |   |   |       |       |   |
|--------------------------------------------------------------------------------------|--------|-----------------------|--------|--------|--------|-----------|------------|--------|--------|------------|------------|--------|
|                                                                                 |   | (In thousands of yen) |   |
|                                                                                 |   |                  |   |   |   |      |       |   |   |       |       |   |
|                                                                                 |   | Notes                 |   |   | 2014   |      |       | 2015   |   |       | 2016       |   |
| Profit/(loss) for the year                                                           |   |                  |   |   |   | 2,004,076 |       |   |   | (7,972,111 | )          |   |   | 7,103,855 |   |
| Other comprehensive income                                                           |   |                  |   |   |   |      |       |   |   |       |       |   |   |   |   |
| Items that will not be reclassified to profit or loss                                |   |                  |   |   |   |      |       |   |   |       |       |   |   |   |   |
| Remeasurement of defined benefit plans                                               |   |                  | 13, 16 |   |   |      | (654,768   | )      |   |       | (1,722,112 | )      |   |   | 673,719 |   |
| Income tax relating to items that will not be reclassified to profit or loss         |   |                  | 13     |   |   |      | –    |   |   |       | 576,237    |   |   |   | (208,952 | ) |
| Items that may be reclassified to profit or loss                                     |   |                  |   |   |   |      |       |   |   |       |       |   |   |   |   |   |
| Available-for-sale financial assets:                                                 |   |                  |   |   |   |      |       |   |   |       |       |   |   |   |   |   |
| Net changes in fair value                                                            |   |                  | 13, 26 |   |   |      | 5,461,675  |   |   |       | 1,550,589  |   |   |   | (2,019,225 | ) |
| Reclassification to profit or loss                                                   |   |                  | 26     |   |   |      | –    |   |   |       | 1,789,603  |   |   |   | 292,683 |   |
| Exchange differences on translation of foreign operations:                           |   |                  |   |   |   |      |       |   |   |       |       |   |   |   |   |   |
| Gain/(loss) arising during the year                                                  |   |                  | 13     |   |   |      | 533,750    |   |   |       | (281,161   | )      |   |   | (298,878 | ) |
| Reclassification to profit or loss                                                   |   |                  |   |   |   |      | –    |   |   |       | –    |   |   |   | 50,318 |   |
| Proportionate share of other comprehensive income of associates and joint ventures   |   |                  |   |   |   |      | 18,545     |   |   |       | 15,642     |   |   |   | 3,509 |   |
| Income tax relating to items that may be reclassified subsequently to profit or loss |   |                  | 13     |   |   |      | (1,704,914 | )      |   |       | (289,878   | )      |   |   | 255,343 |   |
| Total other comprehensive income for the year, net of tax                            |   |                  |   |   |   |      | 3,654,288  |   |   |       | 1,638,920  |   |   |   | (1,251,483 | ) |
| Total comprehensive income/(loss) for the year, net of tax                           |   |                  |   |   |   |      | 5,658,364  |   |   |       | (6,333,191 | )      |   |   | 5,852,372 |   |
|                                                                                 |   |                  |   |   |   |      |       |   |   |       |       |   |   |   |   |   |
| Attributable to:                                                                     |   |                  |   |   |   |      |       |   |   |       |       |   |   |   |   |   |
| The shareholders of the Company                                                      |   |                  |   |   |   |      | 7,848,783  |   |   |       | (5,964,000 | )      |   |   | 5,545,284 |   |
| Non-controlling interests(1)                                                         |   |                  | 30     |   |   |      | (2,190,419 | )      |   |       | (369,191   | )      |   |   | 307,088 |   |

|  | (1)  | For the year ended December 31, 2014, the non-controlling interests was mainly held by NAVER Corporation, the shareholder of the Company. |
|--|-----------|-------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                          |   |   |   |                                                  |       |   |         |   |      |               |   |   |                                   |   |   |                       |    |   |                       |   |      |   |   |   |                     |   |   |                     |       |
|---------------------------------------------------------------|--------|--------|--------|-------------------------------------------------------|------------|--------|--------------|--------|-----------|--------------------|--------|--------|----------------------------------------|--------|--------|----------------------------|---------|--------|----------------------------|--------|-----------|--------|--------|--------|--------------------------|--------|--------|--------------------------|------------|
|                                                          |   |   |   |                                                  |       |   |         |   |      |               |   |   |                                   |   |   |                       |    |   |                       |   |      |   |   |   | (In thousands of yen)    |   |
|                                                          |   |   |   | Equity attributable to the shareholder of the Company |       |   |         |   |      |               |   |
|                                                          |   |   |   |                                                  |       |   |         |   |      |               |   |   | Accumulated other comprehensive income |   |   |                       |    |   |                       |   |      |   |   |
|                                                          | Notes  |   |   | Sharecapital                                          |       |   | Sharepremium |   |      | Accumulateddeficit |   |   | Foreigncurrencytranslationreserve      |   |   | Available-for-sale reserve |    |   | Definedbenefit planreserve |   |      | Total  |   |   | Non-controllinginterests |   |   | Totalshareholder'sequity |       |
| Balance at January 1, 2014                                    |   |   |   |                                                  | 12,596,198 |   |         |   | 4,978,572 |               |   |   | (6,956,471                             | )      |   |                       | (12,624 | )      |                       |   | 114,168   |   |   |   | 7,385                    |   |   |                     | 10,727,228 |   |   |   | 1,588,864 |   |   |   | 12,316,092 |   |
| Comprehensive income/(loss)                                   |   |   |   |                                                  |       |   |         |   |      |               |   |   |                                   |   |   |                       |    |   |                       |   |      |   |   |   |                     |   |   |                     |       |   |   |   |   |   |   |   |   |   |
| Profit/(loss) for the year                                    |   |   |   |                                                  | –    |   |         |   | –   |               |   |   | 4,206,989                              |   |   |                       | – |   |                       |   | –   |   |   |   | –                  |   |   |                     | 4,206,989  |   |   |   | (2,202,913 | ) |   |   | 2,004,076 |   |
| Other comprehensive income                                    |   |   |   |                                                  | –    |   |         |   | –   |               |   |   | –                                |   |   |                       | 540,426 |   |                       |   | 3,752,112 |   |   |   | (650,744                 | )      |   |                     | 3,641,794  |   |   |   | 12,494 |   |   |   | 3,654,288 |   |
| Total comprehensive income/(loss) for the year                |   |   |   |                                                  | –    |   |         |   | –   |               |   |   | 4,206,989                              |   |   |                       | 540,426 |   |                       |   | 3,752,112 |   |   |   | (650,744                 | )      |   |                     | 7,848,783  |   |   |   | (2,190,419 | ) |   |   | 5,658,364 |   |
| Distribution to parent                                        | 19, 20 |   |   |                                                  | –    |   |         |   | (36,842   | )                  |   |   | –                                |   |   |                       | – |   |                       |   | –   |   |   |   | –                  |   |   |                     | (36,842    | ) |   |   | – |   |   |   | (36,842 | ) |
| Net investment by non-controlling interests                   |   |   |   |                                                  | –    |   |         |   | –   |               |   |   | –                                |   |   |                       | – |   |                       |   | –   |   |   |   | –                  |   |   |                     | –    |   |   |   | 31,425 |   |   |   | 31,425 |   |
| Capital reduction(1)                                          |   |   |   |                                                  | –    |   |         |   | –   |               |   |   | (8,880,806                             | )      |   |                       | – |   |                       |   | –   |   |   |   | –                  |   |   |                     | (8,880,806 | ) |   |   | 592,806 |   |   |   | (8,288,000 | ) |
| Disposal of share to the non-controlling interest shareholder |   |   |   |                                                  | –    |   |         |   | –   |               |   |   | 7,792                                  |   |   |                       | – |   |                       |   | –   |   |   |   | –                  |   |   |                     | 7,792      |   |   |   | (7,792 | ) |   |   | – |   |
| Recognition of share-based payments                           | 19, 27 |   |   |                                                  | –    |   |         |   | 2,974,692 |               |   |   | –                                |   |   |                       | – |   |                       |   | –   |   |   |   | –                  |   |   |                     | 2,974,692  |   |   |   | – |   |   |   | 2,974,692 |   |
| Acquisition of LINE Vietnam Co. Ltd. by the Group(2)          | 19     |   |   |                                                  | –    |   |         |   | (133,329  | )                  |   |   | –                                |   |   |                       | – |   |                       |   | –   |   |   |   | –                  |   |   |                     | (133,329   | ) |   |   | – |   |   |   | (133,329 | ) |
| Other                                                         | 19     |   |   |                                                  | –    |   |         |   | (11,434   | )                  |   |   | –                                |   |   |                       | – |   |                       |   | –   |   |   |   | –                  |   |   |                     | (11,434    | ) |   |   | – |   |   |   | (11,434 | ) |
| Balance at December 31, 2014                                  |   |   |   |                                                  | 12,596,198 |   |         |   | 7,771,659 |               |   |   | (11,622,496                            | )      |   |                       | 527,802 |   |                       |   | 3,866,280 |   |   |   | (643,359                 | )      |   |                     | 12,496,084 |   |   |   | 14,884 |   |   |   | 12,510,968 |   |
|                                                          |   |   |   |                                                  |       |   |         |   |      |               |   |   |                                   |   |   |                       |    |   |                       |   |      |   |   |   |                     |   |   |                     |       |   |   |   |   |   |   |   |   |   |
|                                           |   |   |   |                                                  |       |   |         |   |       |               |   |   |                                   |   |   |                       |     |   |                       |   |      |   |   |   |                     |   |   |                     |       |
|------------------------------------------------|--------|--------|--------|-------------------------------------------------------|------------|--------|--------------|--------|------------|--------------------|--------|--------|----------------------------------------|--------|--------|----------------------------|----------|--------|----------------------------|--------|-----------|--------|--------|--------|--------------------------|--------|--------|--------------------------|------------|
|                                           |   |   |   |                                                  |       |   |         |   |       |               |   |   |                                   |   |   |                       |     |   |                       |   |      |   |   |   | (In thousands of yen)    |   |
|                                           |   |   |   | Equity attributable to the shareholder of the Company |       |   |         |   |       |               |   |
|                                           |   |   |   |                                                  |       |   |         |   |       |               |   |   | Accumulated other comprehensive income |   |   |                       |     |   |                       |   |      |   |   |
|                                           | Notes  |   |   | Sharecapital                                          |       |   | Sharepremium |   |       | Accumulateddeficit |   |   | Foreigncurrencytranslationreserve      |   |   | Available-for-sale reserve |     |   | Definedbenefit planreserve |   |      | Total  |   |   | Non-controllinginterests |   |   | Totalshareholder'sequity |       |
| Balance at January 1, 2015                     |   |   |   |                                                  | 12,596,198 |   |         |   | 7,771,659  |               |   |   | (11,622,496                            | )      |   |                       | 527,802  |   |                       |   | 3,866,280 |   |   |   | (643,359                 | )      |   |                     | 12,496,084 |   |   |   | 14,884 |   |   |   | 12,510,968 |   |
| Comprehensive (loss)/income                    |   |   |   |                                                  |       |   |         |   |       |               |   |   |                                   |   |   |                       |     |   |                       |   |      |   |   |   |                     |   |   |                     |       |   |   |   |   |   |   |   |   |   |
| Loss for the year                              |   |   |   |                                                  | –    |   |         |   | –    |               |   |   | (7,581,801                             | )      |   |                       | –  |   |                       |   | –   |   |   |   | –                  |   |   |                     | (7,581,801 | ) |   |   | (390,310 | ) |   |   | (7,972,111 | ) |
| Other comprehensive income                     |   |   |   |                                                  | –    |   |         |   | –    |               |   |   | –                                |   |   |                       | (287,818 | )      |                       |   | 3,051,494 |   |   |   | (1,145,875               | )      |   |                     | 1,617,801  |   |   |   | 21,119 |   |   |   | 1,638,920 |   |
| Total comprehensive (loss)/income for the year |   |   |   |                                                  | –    |   |         |   | –    |               |   |   | (7,581,801                             | )      |   |                       | (287,818 | )      |                       |   | 3,051,494 |   |   |   | (1,145,875               | )      |   |                     | (5,964,000 | ) |   |   | (369,191 | ) |   |   | (6,333,191 | ) |
| Net investment by non-controlling interests    |   |   |   |                                                  | –    |   |         |   | –    |               |   |   | 94                                     |   |   |                       | –  |   |                       |   | –   |   |   |   | –                  |   |   |                     | 94         |   |   |   | 143,906 |   |   |   | 144,000 |   |
| Recognition of share-based payments            | 19, 27 |   |   |                                                  | –    |   |         |   | 11,212,630 |               |   |   | –                                |   |   |                       | –  |   |                       |   | –   |   |   |   | –                  |   |   |                     | 11,212,630 |   |   |   | – |   |   |   | 11,212,630 |   |
| Acquisition of subsidiary                      | 30     |   |   |                                                  | –    |   |         |   | –    |               |   |   | –                                |   |   |                       | –  |   |                       |   | –   |   |   |   | –                  |   |   |                     | –    |   |   |   | 133 |   |   |   | 133 |   |
| Acquisition of non-controlling interests       | 19, 30 |   |   |                                                  | –    |   |         |   | (1,513     | )                  |   |   | –                                |   |   |                       | –  |   |                       |   | –   |   |   |   | –                  |   |   |                     | (1,513     | ) |   |   | (142 | ) |   |   | (1,655 | ) |
| Balance at December 31, 2015                   |   |   |   |                                                  | 12,596,198 |   |         |   | 18,982,776 |               |   |   | (19,204,203                            | )      |   |                       | 239,984  |   |                       |   | 6,917,774 |   |   |   | (1,789,234               | )      |   |                     | 17,743,295 |   |   |   | (210,410 | ) |   |   | 17,532,885 |   |

----

|                                           |   |   |   | Equity attributable to the shareholders of the Company |       |   |     (In thousands of yen) |   |
|------------------------------------------------|--------|--------|--------|--------------------------------------------------------|------------|--------|------------------------------------------|--------|
|                                           |   |   |   |                                                   |       |   |                                     |   |   |   |   |   | Accumulated other comprehensive income |   |   |   |   |   |   |   |
|                                           | Notes  |   |   | Sharecapital                                           |       |   | Sharepremium                             |   |   | Accumulateddeficit |   |   | Foreigncurrencytranslationreserve |   |   | Available-for-sale reserve |   |   | Definedbenefit planreserve |   |   | Total |   |   | Non-controllinginterests |   |   | Totalshareholders'equity |   |
| Balance at January 1, 2016                |   |   |   |                                                   | 12,596,198 |   |                                     |   | 18,982,776 |   |   |   | (19,204,203 | ) |   |   | 239,984 |   |   |   | 6,917,774 |   |   |   | (1,789,234 | ) |   |   | 17,743,295 |   |   |   | (210,410 | ) |   |   | 17,532,885 |   |
| Comprehensive income/(loss)                    |   |   |   |                                                   |       |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Profit for the year                            |   |   |   |                                                   | –    |   |                                     |   | – |   |   |   | 6,762,757 |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | 6,762,757 |   |   |   | 341,098 |   |   |   | 7,103,855 |   |
| Other comprehensive income                     |   |   |   |                                                   | –    |   |                                     |   | – |   |   |   | – |   |   |   | (413,602 | ) |   |   | (1,268,638 | ) |   |   | 464,767 |   |   |   | (1,217,473 | ) |   |   | (34,010 | ) |   |   | (1,251,483 | ) |
| Total comprehensive income/(loss) for the year |   |   |   |                                                   | –    |   |                                     |   | – |   |   |   | 6,762,757 |   |   |   | (413,602 | ) |   |   | (1,268,638 | ) |   |   | 464,767 |   |   |   | 5,545,284 |   |   |   | 307,088 |   |   |   | 5,852,372 |   |
| Recognition of share-based payments            | 19, 27 |   |   |                                                   | –    |   |                                     |   | 9,520,395 |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | 9,520,395 |   |   |   | – |   |   |   | 9,520,395 |   |
| Forfeiture of stock options                    |   |   |   |                                                   | –    |   |                                     |   | (59,869 | ) |   |   | 59,869 |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |
| Exercise of stock options                      | 1,19   |   |   |                                                   | 1,835,549  |   |                                     |   | (88,242 | ) |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | 1,747,307 |   |   |   | – |   |   |   | 1,747,307 |   |
| Acquisition of subsidiary                      | 29     |   |   |                                                   | –    |   |                                     |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | 92,401 |   |   |   | 92,401 |   |
| Initial public offering                        | 1, 19  |   |   |                                                   | 63,423,938 |   |                                     |   | 62,853,409 |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | 126,277,347 |   |   |   | – |   |   |   | 126,277,347 |   |
| Other                                          |   |   |   |                                                   | –    |   |                                     |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | 85 |   |   |   | 85 |   |
| Balance at December 31, 2016              |   |   |   |                                                   | 77,855,685 |   |                                     |   | 91,208,469 |   |   |   | (12,381,577 | ) |   |   | (173,618 | ) |   |   | 5,649,136 |   |   |   | (1,324,467 | ) |   |   | 160,833,628 |   |   |   | 189,164 |   |   |   | 161,022,792 |   |

| (1) | In September 2014, LINE Plus Corporation bought back NAVER Corporation's entire capital investment in LINE Plus Corporation a 60%-owned subsidiary of the Company at the time, resulting in the Company owning 100% of LINE Plus Corporation. Refer to Note 3(1) Significant Accounting Policies for further details.                                                                                          |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | The Group, the Company and its subsidiaries, acquired LINE Vietnam Co., Ltd. from NAVER Corporation in August 2014. The acquisition of LINE Vietnam Co., Ltd. by the Group was accounted for as a business combination under common control using the pooling method. The decrease in share premium was attributable to the acquisition of LINE Vietnam Co., Ltd. from NAVER Corporation by the Group in 2014. |

----

|                                                                                 |   | Notes  |   |   | 2014   |      |        | 2015   |   |     | 2016        |   |
|--------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|-----------|-------------|--------|--------|----------|-------------|--------|
| Cash flows from operating activities                                                 |   |   |   |   |   |      |        |   |   |     |        |   |
| Profit/(loss) before tax from continuing operations                                  |   |   |   |   |   | 6,262,807 |        |   |   | (530,118 | )           |   |   | 17,989,866 |   |
| Profit/(loss) before tax from discontinued operations                                |   |   | 23     |   |   |      | 2,846,559   |   |   |     | (11,503,098 | )      |   |   | (2,726,310 | ) |
| Profit/(loss) before tax                                                             |   |   |   |   |   |      | 9,109,366   |   |   |     | (12,033,216 | )      |   |   | 15,263,556 |   |
| Adjustments for:                                                                     |   |   |   |   |   |      |        |   |   |     |        |   |   |   |   |   |
| Depreciation and amortization expenses                                               |   |   | 9,10   |   |   |      | 2,870,997   |   |   |     | 4,057,210   |   |   |   | 5,099,580 |   |
| Finance income                                                                       |   |   |   |   |   |      | (86,753     | )      |   |     | (70,587     | )      |   |   | (87,246 | ) |
| Finance costs                                                                        |   |   |   |   |   |      | 137,585     |   |   |     | 105,668     |   |   |   | 64,653 |   |
| Share-based compensation expenses                                                    |   |   | 27     |   |   |      | 2,974,692   |   |   |     | 11,212,630  |   |   |   | 9,518,577 |   |
| Gain on fair value measurement relating to the deconsolidation of LINE BIZ Plus Ltd. |   |   | 20     |   |   |      | –     |   |   |     | –     |   |   |   | (1,730,917 | ) |
| Gain on divestiture of business and subsidiaries                                     |   |   | 23     |   |   |      | (2,455,959  | )      |   |     | –     |   |   |   | – |   |
| (Gain)/loss on financial assets at fair value through profit or loss                 |   |   | 15     |   |   |      | –     |   |   |     | (110,507    | )      |   |   | 656,109 |   |
| Loss/(gain) on disposal of  property and equipment and intangible assets        |   |   |   |   |   |      | 16,999      |   |   |     | (1,571      | )      |   |   | (2,344,689 | ) |
| Impairment loss of available-for-sale financial assets                               |   |   | 15     |   |   |      | –     |   |   |     | 1,789,603   |   |   |   | 292,683 |   |
| Impairment loss of goodwill                                                          |   |   | 11     |   |   |      | –     |   |   |     | 2,691,671   |   |   |   | – |   |
| Impairment loss of other intangible assets                                           |   |   | 11     |   |   |      | –     |   |   |     | 1,446,618   |   |   |   | – |   |
| Share of loss of associates and joint ventures                                       |   |   | 32     |   |   |      | 168,050     |   |   |     | 204,903     |   |   |   | 832,980 |   |
|  (Gain)/loss on foreign currency transactions, net                              |   |   |   |   |   |      | (814,827    | )      |   |     | 331,214     |   |   |   | 514,363 |   |
| Changes in:                                                                          |   |   |   |   |   |      |        |   |   |     |        |   |   |   |   |   |
| Trade and other receivables                                                          |   |   |   |   |   |      | (13,133,354 | )      |   |     | (3,066,618  | )      |   |   | (756,143 | ) |
| Inventories                                                                          |   |   | 8      |   |   |      | (1,928,266  | )      |   |     | 582,257     |   |   |   | 407,200 |   |
| Trade and other payables                                                             |   |   |   |   |   |      | 11,199,450  |   |   |     | 2,262,748   |   |   |   | (1,619,725 | ) |
| Accrued expenses                                                                     |   |   |   |   |   |      | 2,449,358   |   |   |     | 179,313     |   |   |   | 2,228,561 |   |
| Advances received                                                                    |   |   |   |   |   |      | 3,470,152   |   |   |     | 4,349,515   |   |   |   | 1,762,021 |   |
| Deferred revenue                                                                     |   |   |   |   |   |      | 3,112,787   |   |   |     | 3,679,990   |   |   |   | 1,930,534 |   |
| Provisions                                                                           |   |   | 12     |   |   |      | 27,015      |   |   |     | 348,900     |   |   |   | 296,821 |   |
| Post-employment benefits                                                             |   |   | 16     |   |   |      | 917,836     |   |   |     | 903,437     |   |   |   | 1,338,568 |   |
| Other current assets                                                                 |   |   |   |   |   |      | (863,251    | )      |   |     | (416,477    | )      |   |   | (1,779,851 | ) |
| Other current liabilities                                                            |   |   |   |   |   |      | 1,477,475   |   |   |     | (704,437    | )      |   |   | 4,148,002 |   |
| Others                                                                               |   |   |   |   |   |      | 29,077      |   |   |     | 50,382      |   |   |   | 207,728 |   |
| Cash provided by operating activities                                                |   |   |   |   |   |      | 18,678,429  |   |   |     | 17,792,646  |   |   |   | 36,243,365 |   |
| Interest received                                                                    |   |   |   |   |   |      | 84,130      |   |   |     | 75,832      |   |   |   | 86,439 |   |
| Dividend received                                                                    |   |   |   |   |   |      | –     |   |   |     | 46,516      |   |   |   | 3,647 |   |
| Interest paid                                                                        |   |   |   |   |   |      | (130,386    | )      |   |     | (91,596     | )      |   |   | (58,538 | ) |
| Income taxes paid                                                                    |   |   |   |   |   |      | (6,176,203  | )      |   |     | (10,843,928 | )      |   |   | (7,521,687 | ) |
| Net cash provided by operating activities                                            |   |   |   |   |   |      | 12,455,970  |   |   |     | 6,979,470   |   |   |   | 28,753,226 |   |
| Cash flows from investing activities                                                 |   |   |   |   |   |      |        |   |   |     |        |   |   |   |   |   |
| Purchases of time deposits                                                           |   |   |   |   |   |      | (1,298,251  | )      |   |     | (1,892,199  | )      |   |   | (10,790,170 | ) |
| Proceeds from maturities of time deposits                                            |   |   |   |   |   |      | 1,277,989   |   |   |     | 2,383,591   |   |   |   | 376,710 |   |
| Purchase of equity investments                                                       |   |   |   |   |   |      | (7,973,496  | )      |   |     | (436,789    | )      |   |   | (1,245,417 | ) |
| Investments in debt instruments                                                      |   |   |   |   |   |      | –     |   |   |     | –     |   |   |   | (7,642,385 | ) |
| Acquisition of property and equipment and intangible assets                          |   |   |   |   |   |      | (5,149,642  | )      |   |     | (5,696,120  | )      |   |   | (6,351,773 | ) |
| Proceeds from disposal of  property and equipment and intangible assets         |   |   |   |   |   |      | 121,281     |   |   |     | 279,386     |   |   |   | 5,123,592 |   |
| Investments in associates and joint ventures                                         |   |   |   |   |   |      | (209,225    | )      |   |     | (1,567,100  | )      |   |   | (9,333,350 | ) |
| Proceeds from divestitures of business and related entities                          |   |   |   |   |   |      | 1,390,676   |   |   |     | –     |   |   |   | – |   |
| Office security deposit received under sublease agreement                            |   |   |   |   |   |      | 7,502       |   |   |     | –     |   |   |   | – |   |
| Payments of office security deposits                                                 |   |   |   |   |   |      | (839,340    | )      |   |     | (2,035,674  | )      |   |   | (2,533,106 | ) |
| Refund of office security deposits                                                   |   |   |   |   |   |      | 188,817     |   |   |     | 138,403     |   |   |   | 167,954 |   |
| Return of the office security deposits received under sublease agreement             |   |   | 15     |   |   |      | –     |   |   |     | (393,650    | )      |   |   | (7,502 | ) |
| Guarantee deposits for the Japanese Payment Services Act                             |   |   | 15,25  |   |   |      | –     |   |   |     | (190,173    | )      |   |   | (1,815,020 | ) |
| Return of the guarantee deposits for the Japanese Payment Services Act               |   |   | 15, 25 |   |   |      | –     |   |   |     | –     |   |   |   | 900,000 |   |
| Acquisition of subsidiaries, net of cash acquired                                    |   |   | 29     |   |   |      | (280,063    | )      |   |     | (2,926,572  | )      |   |   | (423,424 | ) |
| Cash disposed on loss of control of subsidiary                                       |   |   | 20     |   |   |      | –     |   |   |     | –     |   |   |   | (484,731 | ) |
| Increase in loan receivable                                                          |   |   |   |   |   |      | (37,813     | )      |   |     | (22,783     | )      |   |   | (1,597 | ) |
| Others                                                                               |   |   |   |   |   |      | (165,501    | )      |   |     | 131,103     |   |   |   | (25,721 | ) |
| Net cash used in investing activities                                                |   |   |   |   |   |      | (12,967,066 | )      |   |     | (12,228,577 | )      |   |   | (34,085,940 | ) |
| Cash flows from financing activities                                                 |   |   |   |   |   |      |        |   |   |     |        |   |   |   |   |   |
| Proceeds from/(repayment of) short-term borrowings, net                              |   |   | 15, 20 |   |   |      | 15,747,523  |   |   |     | 19,807,733  |   |   |   | (20,752,383 | ) |
| Payments for redemption of bonds                                                     |   |   | 15     |   |   |      | (495,000    | )      |   |     | (640,569    | )      |   |   | (510,000 | ) |
| Repayment of borrowing arrangement                                                   |   |   | 15     |   |   |      | (491,500    | )      |   |     | (450,542    | )      |   |   | – |   |
| Capital contribution from third party non-controlling interests                      |   |   |   |   |   |      | 31,425      |   |   |     | 144,000     |   |   |   | 76 |   |
| Repayment of capital contribution to parent                                          |   |   |   |   |   |      | (8,288,000  | )      |   |     | –     |   |   |   | – |   |
| Payments of common shares issuance costs                                             |   |   |   |   |   |      | –     |   |   |     | –     |   |   |   | (705,522 | ) |
| Proceeds from initial public offering                                                |   |   | 19     |   |   |      | –     |   |   |     | –     |   |   |   | 126,847,875 |   |
| Proceeds from exercise of stock options                                              |   |   | 19     |   |   |      | –     |   |   |     | –     |   |   |   | 1,749,924 |   |
| Others                                                                               |   |   |   |   |   |      | (12,136     | )      |   |     | (727        | )      |   |   | (1,535 | ) |
| Net cash provided by financing activities                                            |   |   |   |   |   |      | 6,492,312   |   |   |     | 18,859,895  |   |   |   | 106,628,435 |   |
| Net increase in cash and cash equivalents                                            |   |   |   |   |   |      | 5,981,216   |   |   |     | 13,610,788  |   |   |   | 101,295,721 |   |
| Cash and cash equivalents at the beginning of the year                               |   |   | 6      |   |   |      | 13,362,084  |   |   |     | 20,254,455  |   |   |   | 33,652,250 |   |
| Effect of exchange rate fluctuations on cash and cash equivalents                    |   |   |   |   |   |      | 911,155     |   |   |     | (212,993    | )      |   |   | (249,716 | ) |
| Cash and cash equivalents at the end of the year                                     |   |   | 6      |   |   |      | 20,254,455  |   |   |     | 33,652,250  |   |   |   | 134,698,255 |   |

----

----

----

|  | 3. | Significant Accounting Policies (continued) |
|--|----|--------------------------------------------------|

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

|  | (3) | Business Combinations |
|--|-----|-----------------------|

|  | (a) | Business combinations |
|--|-----|-----------------------|

|  | – | Deferred tax assets or liabilities which are recognized and measured in accordance with IAS 12 Income Taxes; and |
|--|---------|------------------------------------------------------------------------------------------------------------------|

|  | – | Employee benefit arrangements which are recognized and measured in accordance with IAS 19 Employee Benefits |
|--|---------|-------------------------------------------------------------------------------------------------------------|

|  | – | the fair value of the consideration transferred; plus |
|--|---------|-------------------------------------------------------|

|  | – | the recognized amount of any non-controlling interest in the acquiree; plus |
|--|---------|-----------------------------------------------------------------------------|

|  | – | if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree; less |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------|

|  | – | the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed. |
|--|---------|---------------------------------------------------------------------------------------------------------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (3) | Business Combinations (continued) |
|-----|----------------------------------------|

|  |  (b) | Business combinations under common control |
|--|-----------|--------------------------------------------|

| (4) | Associates and Joint Arrangements |
|-----|-----------------------------------|

|  | (a) | Associates |
|--|-----|------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (4) | Associates and Joint Arrangements (continued) |
|-----|----------------------------------------------------|

|  | (b) | Joint arrangements |
|--|-----|--------------------|

| (5) | Foreign Currencies |
|-----|--------------------|

|  | (a) | Foreign currency transactions |
|--|-----|-------------------------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (5) | Foreign Currencies (continued) |
|-----|-------------------------------------|

|  | (b) | Foreign operations |
|--|-----|--------------------|

| (6) | Cash and Cash Equivalents |
|-----|---------------------------|

| (7) | Financial Assets |
|-----|------------------|

|  | (a) | Financial assets at fair value through profit or loss |
|--|-----|-------------------------------------------------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (7) | Financial Assets (continued) |
|-----|-----------------------------------|

|  | (b) | Held-to-maturity investments |
|--|-----|------------------------------|

|  | (c) | Loans and receivables |
|--|-----|-----------------------|

|  | (d) | Available-for-sale financial assets |
|--|-----|-------------------------------------|

|  | (e) | Derivative financial instruments |
|--|-----|----------------------------------|

|  | (f) | Derecognition of a financial asset |
|--|-----|------------------------------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (8) | Financial Liabilities |
|-----|-----------------------|

| (9) | Inventories |
|-----|-------------|

| (10) | Share Capital |
|------|---------------|

| (11) | Property and Equipment |
|------|------------------------|

|                                  | Estimated useful lives (years)  |
|---------------------------------------|--------------------------------------|
| Equipment (mainly consist of servers) | 3–5                            |
| Furniture and fixtures                | 3–5                            |
| Others                                | 3–5                            |

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (11) | Property and Equipment (continued) |
|------|-----------------------------------------|

| (12) | Borrowing Costs |
|------|-----------------|

| (13) | Intangible Assets |
|------|-------------------|

|                   | Estimated useful lives (years) |
|------------------------|-----------------------------------------------|
| Software               | 2–5                                     |
| Customer relationships | 7                                             |
| Others                 | 1–10                                    |

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (14) | Leases |
|------|--------|

|  | (a) | Finance Leases |
|--|-----|----------------|

|  | (b) | Operating Leases |
|--|-----|------------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (15) | Impairment of Financial Assets |
|------|--------------------------------|

|  | (a) | Financial assets measured at amortized cost |
|--|-----|---------------------------------------------|

|  | (b) | Available-for-sale financial assets |
|--|-----|-------------------------------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (16) | Impairment of Non-financial Assets |
|------|------------------------------------|

| (17) | Employee Compensation |
|------|-----------------------|

|  | (a)         | Short-term employee compensation |
|--|-----------------------------------------------------|----------------------------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (17) | Employee Compensation (continued) |
|------|----------------------------------------|

|  |  (b) | Defined benefit plans |
|--|-----------|-----------------------|

| (18) | Share-based Payments |
|------|----------------------|

| (19) | Marketing Expenses |
|------|--------------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (20) | Provisions |
|------|------------|

| (21) | Revenue |
|------|---------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (21) | Revenue (continued) |
|------|--------------------------|

|  | (a) | LINE business and portal |
|--|-----|--------------------------|

|  | (i) | Communication—LINE Stickers and Creator Stickers |
|--|-----|--------------------------------------------------------|

|  | (ii) | Content—LINE Games and Applications |
|--|------|-------------------------------------------|

|  | – | Games developed by third-party game developers |
|--|---------|------------------------------------------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (21) | Revenue (continued) |
|------|--------------------------|

|  | – | Internally developed games and applications |
|--|---------|---------------------------------------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (21) | Revenue (continued) |
|------|--------------------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (21) | Revenue (continued) |
|------|--------------------------|

|  |  (iii) | Others |
|--|-------------|--------|

|  | (iv) | LINE advertising—Official Accounts, Sponsored Stickers, LINE Points (formerly, Free LINE Coins service), Timeline Ads and LINE NEWS Ads. |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (21) | Revenue (continued) |
|------|--------------------------|

|  | (v) | Portal advertising |
|--|-----|--------------------|

|  | (b) | Data management services |
|--|-----|--------------------------|

| (22) | Finance Income and Finance Costs |
|------|----------------------------------|

| (23) | Other Non-operating Income and Expenses |
|------|-----------------------------------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (23) | Other Non-operating Income and Expenses (continued) |
|------|----------------------------------------------------------|

| (24) | Income Taxes |
|------|--------------|

|  | (a) | Current tax |
|--|-----|-------------|

|  | (b) | Deferred tax |
|--|-----|--------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (24) | Income Taxes (continued) |
|------|-------------------------------|

| (25) | Earnings per Share |
|------|--------------------|

| (26) | Operating Segments |
|------|--------------------|

| (27) | Discontinued Operations and Non-current Assets Held for Sale |
|------|--------------------------------------------------------------|

----

| 3. | Significant Accounting Policies (continued) |
|----|--------------------------------------------------|

| (27) | Discontinued Operations and Non-current Assets Held for Sale (continued) |
|------|-------------------------------------------------------------------------------|

| (28) | Standards Issued but not yet Effective |
|------|----------------------------------------|

|  | – | IFRS 9 Financial Instruments |
|--|---------|------------------------------|

|  | – | IFRS 15 Revenue from Contracts with Customers |
|--|---------|-----------------------------------------------|

----

|  | – | IFRS 16 Leases |
|--|---------|----------------|

|  | – | IAS 12 Recognition of Deferred Tax Assets for Unrealized Losses – Amendments to IAS 12 |
|--|---------|----------------------------------------------------------------------------------------------|

|  | – | IFRS 2 Classification and Measurement of Share-based Payment Transactions — Amendments to IFRS 2 |
|--|---------|--------------------------------------------------------------------------------------------------------|

----

| (29) | New and amended standards and interpretations |
|------|-----------------------------------------------|

|  | – | IFRS 11 Joint Arrangements: Accounting for Acquisitions of Interests |
|--|---------|----------------------------------------------------------------------|

|  | – | Clarification of Acceptable Methods of Depreciation and Amortization (Amendments to IAS 16 Property, Plant and Equipment, and IAS 38 Intangible Assets) |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 4. | Significant Accounting Judgments, Estimates and Assumptions |
|----|-------------------------------------------------------------|

| (a) | Impairment |
|-----|------------|

|  | – | Non-financial assets |
|--|---------|----------------------|

|  | – | Financial assets measured at amortized cost |
|--|---------|---------------------------------------------|

----

| 4. | Significant Accounting Judgments, Estimates and Assumptions (continued) |
|----|------------------------------------------------------------------------------|

| (b) | Recoverability of deferred tax assets |
|-----|---------------------------------------|

| (c) | Methods of determining fair value for financial instruments measured at fair value |
|-----|------------------------------------------------------------------------------------|

|  | – | quoted prices in active markets for identical assets or liabilities; |
|--|---------|----------------------------------------------------------------------|

|  | – | fair value calculated using observable inputs other than quoted prices for the assets or liabilities, either directly or indirectly; and |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------|

|  | – | fair value calculated using valuation techniques incorporating unobservable inputs. |
|--|---------|-------------------------------------------------------------------------------------|

| (d) | Provisions |
|-----|------------|

----

| 4. | Significant Accounting Judgments, Estimates and Assumptions (continued) |
|----|------------------------------------------------------------------------------|

| (d) | Provisions (continued) |
|-----|-----------------------------|

| (e) | Defined benefit plans |
|-----|-----------------------|

| (f) | Share-based payments |
|-----|----------------------|

| (g) | Valuation of common shares |
|-----|----------------------------|

| (h) | Revenues |
|-----|----------|

----

| 5. | Segment Information |
|----|---------------------|

|  | (1) | Description of Reportable Segment |
|--|-----|-----------------------------------|

|                             |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|----------------------------------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| LINE business and portal segment | – | The Group mainly operates a cross-platform messenger application, LINE, and provides communication and content and advertising services. Communication and content are primarily provided to end users via various communication and content. Communication mainly includes LINE Stickers. Content includes LINE Games and LINE PLAY. Others within Communication and Contents include LINE Friends. Advertising services are provided via LINE advertising, web portals livedoor and NAVER Matome. LINE advertising includes LINE Official Accounts, Sponsored Stickers, LINE Points Ads, Timeline Ads and LINE NEWS Ads. |

----

| 5. | Segment Information (continued) |
|----|--------------------------------------|

| (2) | Revenues from Major Services |
|-----|------------------------------|

|                             |   |                  |       |   |   |   |        |   |   |
|----------------------------------|--------|-----------------------|------------|--------|--------|--------|-------------|--------|--------|
|                             |   | (In thousands of yen) |       |
|                             |   |                  |       |   |   |   |        |   |   |
|                             |   | 2014                  |       |   | 2015   |   |        | 2016   |   |
| LINE business and portal segment |   |                  |       |   |   |   |        |   |   |
| Communication and content        |   |                  |       |   |   |   |        |   |   |
| Communication(1)                 |   |                  | 20,689,739 |   |   |   | 28,725,134  |   |   |   | 29,290,039 |   |
| Content(2)                       |   |                  | 40,448,648 |   |   |   | 49,283,859  |   |   |   | 44,784,347 |   |
| Others(3)                        |   |                  | 1,783,666  |   |   |   | 5,985,048   |   |   |   | 11,922,434 |   |
| Sub-total                        |   |                  | 62,922,053 |   |   |   | 83,994,041  |   |   |   | 85,996,820 |   |
| Advertising                      |   |                  |       |   |   |   |        |   |   |   |   |   |
| LINE advertising(4)              |   |                  | 14,603,427 |   |   |   | 26,487,056  |   |   |   | 44,521,637 |   |
| Portal advertising(5)            |   |                  | 8,840,789  |   |   |   | 9,924,434   |   |   |   | 10,185,851 |   |
| Sub-total                        |   |                  | 23,444,216 |   |   |   | 36,411,490  |   |   |   | 54,707,488 |   |
| Total                            |   |                  | 86,366,269 |   |   |   | 120,405,531 |   |   |   | 140,704,308 |   |

| (3) | Geographic Information |
|-----|------------------------|

|                        |                  |   |       |   |   |   |
|-----------------------------|-----------------------|--------|------------|--------|--------|--------|
|                        | (In thousands of yen) |
|                        |                  |   |       |   |   |   |
|                        |                  |   |  2014 |   |   |   |  2015 |   |   |   |  2016 |   |
| Japan (country of domicile) |                  |   | 65,476,215 |   |   |   | 84,779,808 |   |   |   | 100,939,134 |   |
| Taiwan                      |                  |   | 10,514,667 |   |   |   | 17,057,953 |   |   |   | 15,614,393 |   |
| Others                      |                  |   | 10,375,387 |   |   |   | 18,567,770 |   |   |   | 24,150,781 |   |
| Total                       |                  |   | 86,366,269 |   |   |   | 120,405,531 |   |   |   | 140,704,308 |   |

----

| 5. | Segment Information (continued) |
|----|--------------------------------------|

| (3) | Geographic Information (continued) |
|-----|-----------------------------------------|

|                        |   |   |       |   |
|-----------------------------|--------|--------|------------|--------|
| (In thousands of yen)       |   |
|                        |   |   |       |   |
|                        |   | 2015   |       |   | 2016 |   |
| Japan (country of domicile) |   |   | 12,128,756 |   |   |   | 10,660,501 |   |
| Korea                       |   |   | 2,095,142  |   |   |   | 3,219,152 |   |
| Others                      |   |   | 567,671    |   |   |   | 690,349 |   |
| Total                       |   |   | 14,791,569 |   |   |   | 14,570,002 |   |

| (4) | Major Customers |
|-----|-----------------|

| 6. | Cash and Cash Equivalents |
|----|---------------------------|

|                            |                  |   |                    |   |
|---------------------------------|-----------------------|--------|-------------------------|--------|
|                            | (In thousands of yen) |   |
|                            |                  |   |                    |   |
|                            |                  |   |  December 31, 2015 |   |   |   |  December 31,2016 |   |
| Cash on hand                    |                  |   | 3,730                   |   |   |   | 8,169 |   |
| Demand deposits                 |                  |   | 33,648,520              |   |   |   | 134,690,086 |   |
| Total cash and cash equivalents |                  |   | 33,652,250              |   |   |   | 134,698,255 |   |

| 7. | Trade and Other Receivables |
|----|-----------------------------|

|                                      |                  |   |                    |   |
|-------------------------------------------|-----------------------|--------|-------------------------|--------|
|                                      | (In thousands of yen) |   |
|                                      |                  |   |  December 31, 2015 |   |   |   |  December 31, 2016 |   |
| Trade and other receivables, current      |                  |   | 27,645,690              |   |   |   | 29,108,461 |   |
| Allowance for doubtful accounts, general  |                  |   | (397,193                | )      |   |   | (941,674 | ) |
| Trade receivables, non-current(1)         |                  |   | 32,754                  |   |   |   | 82,162 |   |
| Allowance for doubtful accounts, specific |                  |   | (32,754                 | )      |   |   | (82,162 | ) |
| Total trade and other receivables         |                  |   | 27,248,497              |   |   |   | 28,166,787 |   |

| (1)  | The non-current trade receivables were tested for impairment on an individual basis as of the reporting dates based on how long such trade receivables were past due. As a result, full specific reserves were recorded. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 7. | Trade and Other Receivables (continued) |
|----|----------------------------------------------|

| 8. | Inventories                                                     |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|              |   |                  |      |   |              |   |
|-------------------|--------|-----------------------|-----------|--------|-------------------|--------|
|              |   | (In thousands of yen) |      |
|              |   |                  |      |
|              |   | December 31, 2015     |      |   | December 31, 2016 |   |
| Goods             |   |                  | 1,475,939 |   |              |   | 960,689 |   |
| Total Inventories |   |                  | 1,475,939 |   |              |   | 960,689 |   |

| 9. | Property and Equipment |
|----|------------------------|

| (1) | Changes in property and equipment for the year ended December 31, 2015 are as follows: |
|-----|----------------------------------------------------------------------------------------|

|                                       |   |                   |      |   |      |   |       |   |   |   |                     |   |   |   |    |   |   |   |
|--------------------------------------------|--------|------------------------|-----------|--------|-----------|--------|------------|--------|--------|--------|--------------------------|--------|--------|--------|---------|--------|--------|--------|
|                                       |   |                   |      |   |      |   |       |   |   |   | (In thousands of yen)    |   |
|                                       |   |                   |      |   |      |   |       |   |   |   |                     |   |   |   |    |   |   |   |
|                                       |   | Furniture and fixtures |      |   | Equipment |   |       | Land   |   |   | Construction-in-progress |   |   | Others |    |   | Total  |   |
| Acquisition cost                           |   |                   |      |   |      |   |       |   |   |   |                     |   |   |   |    |   |   |   |
| Balance at January 1, 2015            |   |                   | 2,469,779 |   |      |   | 8,837,564  |   |   |   | 2,584,357                |   |   |   | 38,511  |   |   |   | 185,360 |   |   |   | 14,115,571 |   |
| Acquisitions                               |   |                   | 453,187   |   |      |   | 4,033,212  |   |   |   | –                  |   |   |   | 59,800  |   |   |   | 202,885 |   |   |   | 4,749,084 |   |
| Disposals                                  |   |                   | –   |   |      |   | (596,214   | )      |   |   | –                  |   |   |   | – |   |   |   | (25,044 | ) |   |   | (621,258 | ) |
| Acquisitions through business combinations |   |                   | 16,742    |   |      |   | 24,546     |   |   |   | –                  |   |   |   | – |   |   |   | – |   |   |   | 41,288 |   |
| Exchange differences                       |   |                   | 4,907     |   |      |   | (51,143    | )      |   |   | –                  |   |   |   | – |   |   |   | (9,271 | ) |   |   | (55,507 | ) |
| Other                                      |   |                   | 5,704     |   |      |   | 4,968      |   |   |   | –                  |   |   |   | (38,511 | )      |   |   | 1,580 |   |   |   | (26,259 | ) |
| Balance at December 31, 2015          |   |                   | 2,950,319 |   |      |   | 12,252,933 |   |   |   | 2,584,357                |   |   |   | 59,800  |   |   |   | 355,510 |   |   |   | 18,202,919 |   |
| Accumulated depreciation and impairment    |   |                   |      |   |      |   |       |   |   |   |                     |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2015            |   |                   | 858,898   |   |      |   | 3,572,534  |   |   |   | –                  |   |   |   | – |   |   |   | 28,620 |   |   |   | 4,460,052 |   |
| Disposals                                  |   |                   | –   |   |      |   | (341,813   | )      |   |   | –                  |   |   |   | – |   |   |   | – |   |   |   | (341,813 | ) |
| Depreciation(1)                            |   |                   | 601,827   |   |      |   | 2,860,363  |   |   |   | –                  |   |   |   | – |   |   |   | 81,249 |   |   |   | 3,543,439 |   |
| Exchange differences                       |   |                   | 4,831     |   |      |   | (26,071    | )      |   |   | –                  |   |   |   | – |   |   |   | (6,981 | ) |   |   | (28,221 | ) |
| Impairment(2)                              |   |                   | 11,715    |   |      |   | 42,692     |   |   |   | –                  |   |   |   | – |   |   |   | – |   |   |   | 54,407 |   |
| Other                                      |   |                   | 2,070     |   |      |   | 13,349     |   |   |   | –                  |   |   |   | – |   |   |   | (1,114 | ) |   |   | 14,305 |   |
| Balance at December 31, 2015          |   |                   | 1,479,341 |   |      |   | 6,121,054  |   |   |   | –                  |   |   |   | – |   |   |   | 101,774 |   |   |   | 7,702,169 |   |
| Carrying amounts                           |   |                   |      |   |      |   |       |   |   |   |                     |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2015            |   |                   | 1,610,881 |   |      |   | 5,265,030  |   |   |   | 2,584,357                |   |   |   | 38,511  |   |   |   | 156,740 |   |   |   | 9,655,519 |   |
| Balance at December 31, 2015          |   |                   | 1,470,978 |   |      |   | 6,131,879  |   |   |   | 2,584,357                |   |   |   | 59,800  |   |   |   | 253,736 |   |   |   | 10,500,750 |   |

| (1) | The balance includes depreciation expenses of 17,086 thousand yen attributable to the MixRadio segment, which was retrospectively classified as a discontinued operation for the year ended December 31, 2015. Refer to Note 23 Discontinued Operations for further details. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | A full write-off of the MixRadio segment's property and equipment of 54,407 thousand yen was recognized as a result of the impairment test of the MixRadio segment for the year ended December 31, 2015. As a result of the subsequent abandonment on March 21, 2016, the impairment loss was recognized in the Consolidated Statements of Profit or Loss as "Profit/(loss) from discontinued operations, net of tax". Refer to Note 11 (1) Impairment and Note 23 Discontinued Operations for further details. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (2) | Changes in property and equipment for the year ended December 31, 2016 are as follows: |
|-----|----------------------------------------------------------------------------------------|

|                                            |   |                   |      |   |      |   |       |    |   |   |                     |   |   |   |    |   |   |   |
|-------------------------------------------------|--------|------------------------|-----------|--------|-----------|--------|------------|---------|--------|--------|--------------------------|--------|--------|--------|---------|--------|--------|--------|
|                                            |   |                   |      |   |      |   |       |    |   |   | (In thousands of yen)    |   |
|                                            |   |                   |      |   |      |   |       |    |   |   |                     |   |   |   |    |   |   |   |
|                                            |   | Furniture and fixtures |      |   | Equipment |   |       | Land(1) |   |   | Construction-in-progress |   |   | Others |    |   | Total  |   |
| Acquisition cost                                |   |                   |      |   |      |   |       |    |   |   |                     |   |   |   |    |   |   |   |
| Balance at January 1, 2016                 |   |                   | 2,950,319 |   |      |   | 12,252,933 |    |   |   | 2,584,357                |   |   |   | 59,800  |   |   |   | 355,510 |   |   |   | 18,202,919 |   |
| Acquisitions                                    |   |                   | 1,144,035 |   |      |   | 4,012,191  |    |   |   | –                  |   |   |   | 179,017 |   |   |   | 400,612 |   |   |   | 5,735,855 |   |
| Disposals                                       |   |                   | (73,685   | )      |      |   | (665,150   | )       |   |   | (2,584,357               | )      |   |   | – |   |   |   | (12,730 | ) |   |   | (3,335,922 | ) |
| Deconsolidation of LINE BIZ Plus Ltd. (2)  |   |                   | –   |   |      |   | (26,635    | )       |   |   | –                  |   |   |   | – |   |   |   | (3,131 | ) |   |   | (29,766 | ) |
| Exchange differences                            |   |                   | (3,197    | )      |      |   | (44,184    | )       |   |   | –                  |   |   |   | – |   |   |   | 14,282 |   |   |   | (33,099 | ) |
| Other                                           |   |                   | (199,652  | )      |      |   | 175        |    |   |   | –                  |   |   |   | (55,080 | )      |   |   | – |   |   |   | (254,557 | ) |
| Balance at December 31, 2016               |   |                   | 3,817,820 |   |      |   | 15,529,330 |    |   |   | –                  |   |   |   | 183,737 |   |   |   | 754,543 |   |   |   | 20,285,430 |   |
| Accumulated depreciation and impairment         |   |                   |      |   |      |   |       |    |   |   |                     |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2016                 |   |                   | 1,479,341 |   |      |   | 6,121,054  |    |   |   | –                  |   |   |   | – |   |   |   | 101,774 |   |   |   | 7,702,169 |   |
| Disposals                                       |   |                   | (56,694   | )      |      |   | (471,024   | )       |   |   | –                  |   |   |   | – |   |   |   | (5,477 | ) |   |   | (533,195 | ) |
| Depreciation                                    |   |                   | 680,235   |   |      |   | 3,332,803  |    |   |   | –                  |   |   |   | – |   |   |   | 120,699 |   |   |   | 4,133,737 |   |
| Deconsolidation of LINE BIZ Plus Ltd. (2)       |   |                   | –   |   |      |   | (4,035     | )       |   |   | –                  |   |   |   | – |   |   |   | (729 | ) |   |   | (4,764 | ) |
| Exchange differences                            |   |                   | (3,197    | )      |      |   | (12,535    | )       |   |   | –                  |   |   |   | – |   |   |   | 2,389 |   |   |   | (13,343 | ) |
| Other                                           |   |                   | (16,731   | )      |      |   | (11,121    | )       |   |   | –                  |   |   |   | – |   |   |   | – |   |   |   | (27,852 | ) |
| Balance at December 31, 2016               |   |                   | 2,082,954 |   |      |   | 8,955,142  |    |   |   | –                  |   |   |   | – |   |   |   | 218,656 |   |   |   | 11,256,752 |   |
| Carrying amounts                                |   |                   |      |   |      |   |       |    |   |   |                     |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2016                 |   |                   | 1,470,978 |   |      |   | 6,131,879  |    |   |   | 2,584,357                |   |   |   | 59,800  |   |   |   | 253,736 |   |   |   | 10,500,750 |   |
| Balance at December 31, 2016               |   |                   | 1,734,866 |   |      |   | 6,574,188  |    |   |   | –                  |   |   |   | 183,737 |   |   |   | 535,887 |   |   |   | 9,028,678 |   |

| (3) | Contractual commitments for the acquisition of property and equipment: |
|-----|------------------------------------------------------------------------|

|                   |   |                                 |
|------------------------|--------|--------------------------------------|
|                   |   | (In thousands of yen) |
|                   |   |                                 |
| December 31, 2015 |   | December 31, 2016                    |
| 199,090                |   | 1,464,200                            |

----

| 9. | Property and Equipment (continued) |
|----|-----------------------------------------|

| (3) | Contractual commitments for the acquisition of property and equipment (continued): |
|-----|-----------------------------------------------------------------------------------------|

| 10. | Goodwill and Other Intangible Assets |
|-----|--------------------------------------|

| (1) | Changes in goodwill and other intangible assets for the year ended December 31, 2015 are as follows: |
|-----|------------------------------------------------------------------------------------------------------|

|                                          |   |     |      |   |        |   |      |         |   |   |                   |   |   |                  |          |   |   |   |
|-----------------------------------------------|--------|----------|-----------|--------|-------------|--------|-----------|--------------|--------|--------|------------------------|--------|--------|-----------------------|---------------|--------|--------|--------|
|                                          |   |     |      |   |        |   |      |         |   |   |                   |   |   | (In thousands of yen) |          |
|                                          |   |     |      |   |        |   |      |         |   |   |                   |   |   |                  |          |   |   |   |
| Item                                          |   | Goodwill |      |   | Software(1) |   |      | Music rights |   |   | Customer relationships |   |   | Others                |          |   | Total  |   |
| Acquisition cost                              |   |     |      |   |        |   |      |         |   |   |                   |   |   |                  |          |   |   |   |
| Balance at January 1, 2015                    |   |     | 2,450,892 |   |        |   | 384,584   |         |   |   | –                |   |   |                  | –       |   |   |   | 53,252 |   |   |   | 2,888,728 |   |
| External acquisition                          |   |     | –   |   |        |   | 321,502   |         |   |   | –                |   |   |                  | –       |   |   |   | 764,465 |   |   |   | 1,085,967 |   |
| Acquisition through a business combination(2) |   |     | 3,425,653 |   |        |   | 863,429   |         |   |   | 543,292                |   |   |                  | 108,658       |   |   |   | 163,726 |   |   |   | 5,104,758 |   |
| Disposal                                      |   |     | –   |   |        |   | (23,817   | )            |   |   | –                |   |   |                  | –       |   |   |   | (35,000 | ) |   |   | (58,817 | ) |
| Exchange differences                          |   |     | (23,770   | )      |        |   | (439      | )            |   |   | (1,198                 | )      |   |                  | (239          | )      |   |   | (2,288 | ) |   |   | (27,934 | ) |
| Other                                         |   |     | –   |   |        |   | (1,345    | )            |   |   | –                |   |   |                  | –       |   |   |   | (10,427 | ) |   |   | (11,772 | ) |
| Balance at December 31, 2015                  |   |     | 5,852,775 |   |        |   | 1,543,914 |         |   |   | 542,094                |   |   |                  | 108,419       |   |   |   | 933,728 |   |   |   | 8,980,930 |   |
| Accumulated amortization and impairment       |   |     |      |   |        |   |      |         |   |   |                   |   |   |                  |          |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2015                    |   |     | 40,337    |   |        |   | 200,925   |         |   |   | –                |   |   |                  | –       |   |   |   | 12,908 |   |   |   | 254,170 |   |
| Disposals                                     |   |     | –   |   |        |   | (23,744   | )            |   |   | –                |   |   |                  | –       |   |   |   | (30,960 | ) |   |   | (54,704 | ) |
| Amortization(3)                               |   |     | –   |   |        |   | 265,226   |         |   |   | 96,884                 |   |   |                  | 19,377        |   |   |   | 132,284 |   |   |   | 513,771 |   |
| Impairment(4)                                 |   |     | 2,691,671 |   |        |   | 709,287   |         |   |   | 446,408                |   |   |                  | 91,738        |   |   |   | 199,185 |   |   |   | 4,138,289 |   |
| Exchange differences                          |   |     | –   |   |        |   | 56        |         |   |   | (1,198                 | )      |   |                  | (2,696        | )      |   |   | (5,034 | ) |   |   | (8,872 | ) |
| Other                                         |   |     | –   |   |        |   | 5,978     |         |   |   | –                |   |   |                  | –       |   |   |   | – |   |   |   | 5,978 |   |
| Balance at December 31, 2015                  |   |     | 2,732,008 |   |        |   | 1,157,728 |         |   |   | 542,094                |   |   |                  | 108,419       |   |   |   | 308,383 |   |   |   | 4,848,632 |   |
| Carrying amounts                              |   |     |      |   |        |   |      |         |   |   |                   |   |   |                  |          |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2015                    |   |     | 2,410,555 |   |        |   | 183,659   |         |   |   | –                |   |   |                  |  – |   |   |   | 40,344 |   |   |   | 2,634,558 |   |
| Balance at December 31, 2015                  |   |     | 3,120,767 |   |        |   | 386,186   |         |   |   | –                |   |   |                  | –       |   |   |   | 625,345 |   |   |   | 4,132,298 |   |

| (1)  | Software was mainly comprised of externally acquired software. The remaining useful life of software as of December 31, 2015 was three years. |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| (2)  | The balances were mainly related to the Group's acquisition of MixRadio. Refer to Note 29 Business Combinations for further details. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------|

| (3)  | The balance includes 307,349 thousand yen attributable to the MixRadio segment, which was retrospectively classified as a discontinued operation for the year ended December 31, 2015. Refer to Note 23 Discontinued Operations for further details. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)  | As a result of the Group's annual goodwill impairment test, impairment losses of 2,691,671 thousand yen, 709,287 thousand yen, 446,408 thousand yen, 91,738 thousand yen and 126,225 thousand yen have been recognized for the full write-off of MixRadio segment's goodwill, software, music rights, customer relationships and other intangibles, respectively. As the MixRadio segment was subsequently abandoned on March 21, 2016, and was retrospectively classified as a discontinued operation for the year ended December 31, 2015, the impairment losses were recognized in the Consolidated Statements of Profit or Loss as "Profit/(loss) from discontinued operations, net of tax". Refer to Note 11 (1) Impairment and Note 23 Discontinued Operations for further details. |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (2) | Changes in goodwill and other intangible assets for the year ended December 31, 2016 are as follows: |
|-----|------------------------------------------------------------------------------------------------------|

|                                                |   |     |      |   |        |   |      |         |   |   |                   |   |   |                  |    |   |   |   |
|-----------------------------------------------------|--------|----------|-----------|--------|-------------|--------|-----------|--------------|--------|--------|------------------------|--------|--------|-----------------------|---------|--------|--------|--------|
|                                                |   |     |      |   |        |   |      |         |   |   |                   |   |   | (In thousands of yen) |    |
|                                                |   |     |      |   |        |   |      |         |   |   |                   |   |   |                  |    |   |   |   |
| Item                                                |   | Goodwill |      |   | Software(1) |   |      | Music rights |   |   | Customer relationships |   |   | Others                |    |   | Total  |   |
| Acquisition cost                                    |   |     |      |   |        |   |      |         |   |   |                   |   |   |                  |    |   |   |   |
| Balance at January 1, 2016                          |   |     | 5,852,775 |   |        |   | 1,543,914 |         |   |   | 542,094                |   |   |                  | 108,419 |   |   |   | 933,728 |   |   |   | 8,980,930 |   |
| External acquisition                                |   |     | –   |   |        |   | 99,050    |         |   |   | –                |   |   |                  | – |   |   |   | 1,286,394 |   |   |   | 1,385,444 |   |
| Acquisition through a business combination(2)  |   |     | 415,731   |   |        |   | 26,000    |         |   |   | –                |   |   |                  | 401,000 |   |   |   | – |   |   |   | 842,731 |   |
| Deconsolidation of LINE BIZ Plus Ltd. (3)      |   |     | (126,449  | )      |        |   | –   |         |   |   | –                |   |   |                  | – |   |   |   | – |   |   |   | (126,449 | ) |
| Disposal                                            |   |     | –   |   |        |   | (9,325    | )            |   |   | –                |   |   |                  | – |   |   |   | – |   |   |   | (9,325 | ) |
| Exchange differences                                |   |     | (550,360  | )      |        |   | (170,485  | )            |   |   | (108,753               | )      |   |                  | (21,751 | )      |   |   | (36,362 | ) |   |   | (887,711 | ) |
| Other                                               |   |     | –   |   |        |   | (2,334    | )            |   |   | –                |   |   |                  | – |   |   |   | (174,476 | ) |   |   | (176,810 | ) |
| Balance at December 31, 2016                        |   |     | 5,591,697 |   |        |   | 1,486,820 |         |   |   | 433,341                |   |   |                  | 487,668 |   |   |   | 2,009,284 |   |   |   | 10,008,810 |   |
| Accumulated amortization and impairment             |   |     |      |   |        |   |      |         |   |   |                   |   |   |                  |    |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2016                          |   |     | 2,732,008 |   |        |   | 1,157,728 |         |   |   | 542,094                |   |   |                  | 108,419 |   |   |   | 308,383 |   |   |   | 4,848,632 |   |
| Disposals                                           |   |     | –   |   |        |   | (8,068    | )            |   |   | –                |   |   |                  | – |   |   |   | – |   |   |   | (8,068 | ) |
| Amortization                                        |   |     | –   |   |        |   | 152,790   |         |   |   | –                |   |   |                  | 125,224 |   |   |   | 687,829 |   |   |   | 965,843 |   |
| Exchange differences                                |   |     | (539,991  | )      |        |   | (169,409  | )            |   |   | (108,753               | )      |   |                  | (21,750 | )      |   |   | (30,581 | ) |   |   | (870,484 | ) |
| Other                                               |   |     | –   |   |        |   | (3,811    | )            |   |   | –                |   |   |                  | – |   |   |   | (174,475 | ) |   |   | (178,286 | ) |
| Balance at December 31, 2016                        |   |     | 2,192,017 |   |        |   | 1,129,230 |         |   |   | 433,341                |   |   |                  | 211,893 |   |   |   | 791,156 |   |   |   | 4,757,637 |   |
| Carrying amounts                                    |   |     |      |   |        |   |      |         |   |   |                   |   |   |                  |    |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2016                          |   |     | 3,120,767 |   |        |   | 386,186   |         |   |   | –                |   |   |                  | – |   |   |   | 625,345 |   |   |   | 4,132,298 |   |
| Balance at December 31, 2016                        |   |     | 3,399,680 |   |        |   | 357,590   |         |   |   | –                |   |   |                  | 275,775 |   |   |   | 1,218,128 |   |   |   | 5,251,173 |   |

| (1)  | Software was mainly comprised of externally acquired software. The remaining useful life of software as of December 31, 2016 was two years. |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The balances were related to the Group's acquisition of M.T. Burn. Refer to Note 29 Business Combinations for further details. |
|-----|--------------------------------------------------------------------------------------------------------------------------------|

| (3) | Refer to Note 20 Supplemental Cash Flow Information for further details. |
|-----|--------------------------------------------------------------------------|

----

| 10. | Goodwill and Other Intangible Assets (continued) |
|-----|-------------------------------------------------------|

|  | (3) | The research and development costs incurred for the year ended December 31, 2014 were related to the data management business, which was classified as discontinued operations on September 19, 2014. Refer to Note 23 Discontinued Operations for further details. No research and development costs were incurred for the years ended December 31, 2015 and 2016. Research and development costs included in the "Profit/(loss) from discontinued operations, net of tax" in the Consolidated Statements of Profit or Loss the years ended December 31, 2014, 2015 and 2016 are as follows: |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                 |   |    |   |    |
|--------------------------------------|--------|---------|--------|---------|
| (In thousands of yen) |
|                                 |   |    |   |    |
| 2014                                 |   | 2015    |   | 2016    |
| 19,642                               |   | – |   | – |

| 11. | Impairment |
|-----|------------|

| (1) | Impairment of Goodwill |
|-----|------------------------|

|                                                               |   |      |
|--------------------------------------------------------------------|--------|-----------|
| (In thousands of yen)                                              |
|                                                               |
| For the year ended December 31, 2014 |
| LINE business andportal CGU                              |   | Total     |
| 2,410,555                                                          |   | 2,410,555 |

----

| 11. | Impairment (continued) |
|-----|-----------------------------|

| (1) | Impairment of Goodwill (continued) |
|-----|-----------------------------------------|

|                                                               |   |         |   |      |
|--------------------------------------------------------------------|--------|--------------|--------|-----------|
| (In thousands of yen)                                              |
|                                                               |
| For the year ended December 31, 2015 |
| LINE business and portal CGU                             |   | MixRadio CGU |   | Total     |
| 3,120,767                                                          |   | 2,691,671    |   | 5,812,438 |
|                                                               |   |         |   |      |
| (In thousands of yen)                                              |
|--------------------------------------------------------------------|
|                                                               |
| For the year ended December 31, 2016 |
| LINE business andportal CGU                              |   | Total |
| 3,399,680                                                          |   | 3,399,680 |

|  | (a) | LINE business and portal CGU |
|--|-----|------------------------------|

|                         |   |                 |   |   |                |   |   |                 |   |   |                |   |   |                 |   |   |                |   |
|------------------------------|--------|----------------------|--------|--------|---------------------|--------|--------|----------------------|--------|--------|---------------------|--------|--------|----------------------|--------|--------|---------------------|--------|
|                         |   | 2014                 |   |   | 2015                |   |   | 2016                 |   |
| CGU                          |   | Pre-taxdiscount rate |   |   | Terminalgrowth rate |   |   | Pre-taxdiscount rate |   |   | Terminalgrowth rate |   |   | Pre-taxdiscount rate |   |   | Terminalgrowth rate |   |
| LINE business and portal CGU |   |                 | 14.4   | %      |                |   | 1.3    | %                    |   |   | 14.7                | %      |   |                 | 1.4    | %      |                |   | 11.7 | % |   |   | 1.1 | % |

|  | (b) | MixRadio CGU |
|--|-----|--------------|

----

| 11. | Impairment (continued) |
|-----|-----------------------------|

| (1) | Impairment of Goodwill (continued) |
|-----|-----------------------------------------|

|  | (b) | MixRadio CGU (continued) |
|--|-----|-------------------------------|

| (2) | Sensitivity to Changes in Assumptions |
|-----|---------------------------------------|

| (3) | Impairment of Tangible Assets and Intangible Assets with Definite Useful Lives |
|-----|--------------------------------------------------------------------------------|

----

| 12. | Provisions |
|-----|------------|

| (In thousands of yen)                                  |   |
|--------------------------------------------------------|--------|
|                                                   |   | Restorationobligations foroperating leaseproperties |   |   | Promotionalvirtual creditsreserve |   |   | Other |   |   | Total |   |
| At January 1, 2015                                     |   |   | 971,302 |   |   |   | 202,504 |   |   |   | – |   |   |   | 1,173,806 |   |
| Arising during the year                                |   |   | 249,900 |   |   |   | 224,775 |   |   |   | 278,643 |   |   |   | 753,318 |   |
| Utilized                                               |   |   | – |   |   |   | (136,937 | ) |   |   | – |   |   |   | (136,937 | ) |
| Unwinding of discount and changes in the discount rate |   |   | 1,655 |   |   |   | – |   |   |   | – |   |   |   | 1,655 |   |
| Exchange differences                                   |   |   | (9,639 | ) |   |   | – |   |   |   | – |   |   |   | (9,639 | ) |
| At December 31, 2015                                   |   |   | 1,213,218 |   |   |   | 290,342 |   |   |   | 278,643 |   |   |   | 1,782,203 |   |
| Arising during the year                                |   |   | 617,590 |   |   |   | 489,506 |   |   |   | 197,788 |   |   |   | 1,304,884 |   |
| Utilized                                               |   |   | (338,562 | ) |   |   | (160,998 | ) |   |   | (42,735 | ) |   |   | (542,295 | ) |
| Reversal                                               |   |   | (236,864 | ) |   |   | (109,573 | ) |   |   | (91,564 | ) |   |   | (438,001 | ) |
| Unwinding of discount and changes in the discount rate |   |   | 646 |   |   |   | – |   |   |   | – |   |   |   | 646 |   |
| Exchange differences                                   |   |   | (19,396 | ) |   |   | – |   |   |   | (1,134 | ) |   |   | (20,530 | ) |
| Other                                                  |   |   | (3,132 | ) |   |   | – |   |   |   | – |   |   |   | (3,132 | ) |
| At December 31, 2016                                   |   |   | 1,233,500 |   |   |   | 509,277 |   |   |   | 340,998 |   |   |   | 2,083,775 |   |

----

| 13. | Income Taxes |
|-----|--------------|

|  | (1) | Current and deferred taxes related to each component of other comprehensive income for the years ended December 31, 2014, 2015 and 2016 are as follows: |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                         |   |                  |      |   |   |   |       |     |   |   |      |   |   |   |       |   |     |   |     |   |   |   |       |   |   |     |       |
|----------------------------------------------------------------------------------------------|--------|-----------------------|-----------|--------|--------|--------|------------|----------|--------|--------|-----------|--------|--------|--------|------------|--------|----------|--------|----------|--------|--------|--------|------------|--------|--------|----------|------------|
|                                                                                         |   | (In thousands of yen) |      |
|                                                                                         |   |                  |      |   |   |   |       |     |   |
|                                                                                         |   | 2014                  |      |   | 2015   |   |       | 2016     |   |
|                                                                                         |   | Pretax                |      |   | Tax    |   |       | Post tax |   |   | Pretax    |   |   | Tax    |       |   | Post tax |   |     | Pretax |   |   | Tax        |   |   | Post tax |       |
| Remeasurement of definedbenefit plans                                                        |   |                  | (654,768  | )      |   |   | 4,024      |     |   |   | (650,744  | )      |   |   | (1,722,112 | )      |     |   | 576,237  |   |   |   | (1,145,875 | )      |   |     | 673,719    |   |   |   | (208,952 | ) |   |   | 464,767 |   |
| Foreign currencytranslation adjustments                                                      |   |                  | 533,750   |   |   |   | –    |     |   |   | 533,750   |   |   |   | (281,161   | )      |     |   | 14,462   |   |   |   | (266,699   | )      |   |     | (298,878   | ) |   |   | (199,051 | ) |   |   | (497,929 | ) |
| Reclassificationadjustments for foreigncurrency translationadjustments                       |   |                  | –   |   |   |   | –    |     |   |   | –   |   |   |   | –    |   |     |   | –  |   |   |   | –    |   |   |     | 50,318     |   |   |   | – |   |   |   | 50,318 |   |
| Proportionate share of othercomprehensive incomeof associates                                |   |                  | 18,545    |   |   |   | –    |     |   |   | 18,545    |   |   |   | 15,642     |   |     |   | (3,785   | )      |   |   | 11,857     |   |   |     | 3,509      |   |   |   | (232 | ) |   |   | 3,277 |   |
| Net change in fair value ofavailable-for-salefinancial assets                                |   |                  | 5,461,675 |   |   |   | (1,708,938 | )        |   |   | 3,752,737 |   |   |   | 1,550,589  |   |     |   | 276,788  |   |   |   | 1,827,377  |   |   |     | (2,019,225 | ) |   |   | 546,705 |   |   |   | (1,472,520 | ) |
| Reclassificationadjustments for netchange in fair value ofavailable-for-salefinancial assets |   |                  | –   |   |   |   | –    |     |   |   | –   |   |   |   | 1,789,603  |   |     |   | (577,343 | )      |   |   | 1,212,260  |   |   |     | 292,683    |   |   |   | (92,079 | ) |   |   | 200,604 |   |
| Total                                                                                        |   |                  | 5,359,202 |   |   |   | (1,704,914 | )        |   |   | 3,654,288 |   |   |   | 1,352,561  |   |     |   | 286,359  |   |   |   | 1,638,920  |   |   |     | (1,297,874 | ) |   |   | 46,391 |   |   |   | (1,251,483 | ) |

|  | Current and deferred taxes related to items directly charged or credited to equity are as follows: |
|--|----------------------------------------------------------------------------------------------------|

|   (In thousands of yen)                                                           |
|---------------------------------------------------------------------------------------------|
|                                                                                        |   |   |   |
|                                                                                        |   | 2016 |   |
| Current tax:                                                                                |   |   |   |
| Share issuance costs related to initial public offering and  exercise of stock options |   |   | (225,158 | ) |
| Deferred tax:                                                                               |   |   |   |   |
| Share issuance costs related to initial public offering                                     |   |   | (45,823 | ) |
| Total tax directly (credited) to equity                                                     |   |   | (270,981 | ) |

----

| 13. | Income Taxes (continued) |
|-----|-------------------------------|

| (2) | Deferred Tax Assets and Deferred Tax Liabilities |
|-----|--------------------------------------------------|

|                                                     |   |                  |                                        |   |   |                                |       |   |                                             |   |     |   |   |   |                                 |
|----------------------------------------------------------|--------|-----------------------|---------------------------------------------|--------|--------|-------------------------------------|------------|--------|--------------------------------------------------|--------|----------|--------|--------|--------|--------------------------------------|
|                                                     |   | (In thousands of yen) |                                        |
|                                                     |   |                  |                                        |   |   |                                |       |   |                                             |   |     |   |   |   |                                 |
|                                                     |   |                  |  Beginningbalance as ofJanuary 1, 2015 |   |   | Amounts recordedunder profitor loss |       |   | Amountsrecognizedunder othercomprehensive income |   |     | Other  |   |   | Endingbalance as ofDecember 31, 2015 |   |
| Deferred tax assets:                                     |   |                  |                                        |   |   |                                |       |   |                                             |   |     |   |   |   |                                 |
| Tax losses                                               |   |                  | 1,598                                       |   |   |                                | 3,130,808  |   |                                             |   | –  |   |   |   | –                              |   |   |   | 3,132,406 |   |
| Depreciation                                             |   |                  | 491,128                                     |   |   |                                | 428,534    |   |                                             |   | –  |   |   |   | (21                                  | ) |   |   | 919,641 |   |
| Advances received                                        |   |                  | 1,677,378                                   |   |   |                                | 1,289,656  |   |                                             |   | –  |   |   |   | –                              |   |   |   | 2,967,034 |   |
| Deferred revenue                                         |   |                  | 1,233,983                                   |   |   |                                | 1,116,164  |   |                                             |   | –  |   |   |   | –                              |   |   |   | 2,350,147 |   |
| Restoration obligations for operating lease properties   |   |                  | 114,579                                     |   |   |                                | 93,611     |   |                                             |   | –  |   |   |   | (60                                  | ) |   |   | 208,130 |   |
| Accrued bonuses                                          |   |                  | 254,458                                     |   |   |                                | 360,353    |   |                                             |   | –  |   |   |   | (1,130                               | ) |   |   | 613,681 |   |
| Allowance for doubtful accounts                          |   |                  | 73,429                                      |   |   |                                | 11,543     |   |                                             |   | –  |   |   |   | –                              |   |   |   | 84,972 |   |
| Other accrued expenses                                   |   |                  | 309,326                                     |   |   |                                | 111,804    |   |                                             |   | –  |   |   |   | (566                                 | ) |   |   | 420,564 |   |
| Accrued enterprise taxes                                 |   |                  | 550,423                                     |   |   |                                | (302,115   | )      |                                             |   | –  |   |   |   | –                              |   |   |   | 248,308 |   |
| Available-for-sale financial assets                      |   |                  | –                                     |   |   |                                | 559,412    |   |                                             |   | –  |   |   |   | (1,410                               | ) |   |   | 558,002 |   |
| Share-based compensation                                 |   |                  | 156,475                                     |   |   |                                | 562,749    |   |                                             |   | –  |   |   |   | –                              |   |   |   | 719,224 |   |
| Post-employment benefits                                 |   |                  | 13,813                                      |   |   |                                | 426,513    |   |                                             |   | 576,237  |   |   |   | 1,007                                |   |   |   | 1,017,570 |   |
| Tax effect on investments in subsidiaries and associates |   |                  | –                                     |   |   |                                | 3,955,868  |   |                                             |   | 10,677   |   |   |   | –                              |   |   |   | 3,966,545 |   |
| Other                                                    |   |                  | 517,224                                     |   |   |                                | (58,202    | )      |                                             |   | –  |   |   |   | (33,148                              | ) |   |   | 425,874 |   |
| Total                                                    |   |                  | 5,393,814                                   |   |   |                                | 11,686,698 |   |                                             |   | 586,914  |   |   |   | (35,328                              | ) |   |   | 17,632,098 |   |
| Deferred tax liabilities:                                |   |                  |                                        |   |   |                                |       |   |                                             |   |     |   |   |   |                                 |   |   |   |   |   |
| Available-for-sale financial assets                      |   |                  | (1,757,671                                  | )      |   |                                | (51,457    | )      |                                             |   | (300,555 | )      |   |   | 2,246                                |   |   |   | (2,107,437 | ) |
| Prepaid expenses                                         |   |                  | (400,138                                    | )      |   |                                | 50,101     |   |                                             |   | –  |   |   |   | –                              |   |   |   | (350,037 | ) |
| Other                                                    |   |                  | (47,453                                     | )      |   |                                | (29,064    | )      |                                             |   | –  |   |   |   | –                              |   |   |   | (76,517 | ) |
| Total                                                    |   |                  | (2,205,262                                  | )      |   |                                | (30,420    | )      |                                             |   | (300,555 | )      |   |   | 2,246                                |   |   |   | (2,533,991 | ) |

----

|                                                     |   | (In thousands of yen)                 |       |
|----------------------------------------------------------|--------|---------------------------------------|------------|
|                                                     |   |                                  |       |   |   |   |   |   |   |   |   |   |
|                                                     |   | Beginningbalance as ofJanuary 1, 2016 |       |   | Amounts recorded under profit or loss |   |   | Amountsrecognizedunder othercomprehensive income |   |   | Other(1) |   |   | Endingbalance as ofDecember 31, 2016 |   |
| Deferred tax assets:                                     |   |                                  |       |   |   |   |   |   |   |   |   |   |
| Tax losses                                               |   |                                  | 3,132,406  |   |   |   | (2,311,274 | ) |   |   | – |   |   |   | 89,069 |   |   |   | 910,201 |   |
| Depreciation                                             |   |                                  | 919,641    |   |   |   | 848,741 |   |   |   | – |   |   |   | 148 |   |   |   | 1,768,530 |   |
| Advances received                                        |   |                                  | 2,967,034  |   |   |   | 331,925 |   |   |   | – |   |   |   | – |   |   |   | 3,298,959 |   |
| Deferred revenue                                         |   |                                  | 2,350,147  |   |   |   | 380,809 |   |   |   | – |   |   |   | – |   |   |   | 2,730,956 |   |
| Restoration obligations for operating lease properties   |   |                                  | 208,130    |   |   |   | (151,422 | ) |   |   | – |   |   |   | 465 |   |   |   | 57,173 |   |
| Accrued bonuses                                          |   |                                  | 613,681    |   |   |   | 135,071 |   |   |   | – |   |   |   | 598 |   |   |   | 749,350 |   |
| Allowance for doubtful accounts                          |   |                                  | 84,972     |   |   |   | 494,788 |   |   |   | – |   |   |   | – |   |   |   | 579,760 |   |
| Other accrued expenses                                   |   |                                  | 420,564    |   |   |   | 263,939 |   |   |   | – |   |   |   | 970 |   |   |   | 685,473 |   |
| Accrued enterprise taxes                                 |   |                                  | 248,308    |   |   |   | 217,529 |   |   |   | – |   |   |   | – |   |   |   | 465,837 |   |
| Available-for-sale financial assets                      |   |                                  | 558,002    |   |   |   | 80,129 |   |   |   | 7,950 |   |   |   | (2,159 | ) |   |   | 643,922 |   |
| Share-based compensation                                 |   |                                  | 719,224    |   |   |   | 377,797 |   |   |   | – |   |   |   | – |   |   |   | 1,097,021 |   |
| Post-employment benefits                                 |   |                                  | 1,017,570  |   |   |   | 416,609 |   |   |   | (208,952 | ) |   |   | 59,918 |   |   |   | 1,285,145 |   |
| Tax effect on investments in subsidiaries and associates |   |                                  | 3,966,545  |   |   |   | 354,771 |   |   |   | (199,283 | ) |   |   | – |   |   |   | 4,122,033 |   |
| Other                                                    |   |                                  | 425,874    |   |   |   | 487,902 |   |   |   | – |   |   |   | 35,627 |   |   |   | 949,403 |   |
| Total                                                    |   |                                  | 17,632,098 |   |   |   | 1,927,314 |   |   |   | (400,285 | ) |   |   | 184,636 |   |   |   | 19,343,763 |   |
| Deferred tax liabilities:                                |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available-for-sale financial assets                      |   |                                  | (2,107,437 | ) |   |   | 36,298 |   |   |   | 446,676 |   |   |   | (2,588 | ) |   |   | (1,627,051 | ) |
| Prepaid expenses                                         |   |                                  | (350,037   | ) |   |   | (40,637 | ) |   |   | – |   |   |   | 45,823 |   |   |   | (344,851 | ) |
| Intangible assets                                        |   |                                  | –    |   |   |   | 45,366 |   |   |   | – |   |   |   | (148,639 | ) |   |   | (103,273 | ) |
| Other                                                    |   |                                  | (76,517    | ) |   |   | 34,360 |   |   |   | – |   |   |   | (2,064 | ) |   |   | (44,221 | ) |
| Total                                                    |   |                                  | (2,533,991 | ) |   |   | 75,387 |   |   |   | 446,676 |   |   |   | (107,468 | ) |   |   | (2,119,396 | ) |

| (1)  | Movements in others are attributable mainly to the acquisition of M.T. Burn and to incremental costs directly attributable to the issuance of common shares, which were recognized as a deduction from equity. |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                     |   |                  |       |   |              |   |
|----------------------------------------------------------|--------|-----------------------|------------|--------|-------------------|--------|
|                                                     |   | (In thousands of yen) |       |
|                                                     |   |                  |       |   |              |   |
|                                                     |   | December 31, 2015     |       |   | December 31, 2016 |   |
| Total deferred tax assets                                |   |                  | 17,632,098 |   |              |   | 19,343,763 |   |
| Adjustment to offset deferred tax assets and liabilities |   |                  | (690,047   | )      |              |   | (958,728 | ) |
| Net deferred tax assets                                  |   |                  | 16,942,051 |   |              |   | 18,385,035 |   |

----

| 13. | Income Taxes (continued) |
|-----|-------------------------------|

| (2) | Deferred Tax Assets and Deferred Tax Liabilities (continued) |
|-----|-------------------------------------------------------------------|

|                                                     |   |                   |       |   |             |   |
|----------------------------------------------------------|--------|------------------------|------------|--------|------------------|--------|
|                                                     |   | (In thousands of yen)  |       |
|                                                     |   |                   |       |   |             |   |
|                                                     |   | December 31, 2015 |       |   | December 31,2016 |   |
| Total deferred tax liabilities                           |   |                   | (2,533,991 | )      |             |   | (2,119,396 | ) |
| Adjustment to offset deferred tax assets and liabilities |   |                   | 690,047    |   |             |   | 958,728 |   |
| Net deferred tax liabilities                             |   |                   | (1,843,944 | )      |             |   | (1,160,668 | ) |
|                             |   |                  |       |   |             |   |
|----------------------------------|--------|-----------------------|------------|--------|------------------|--------|
|                             |   | (In thousands of yen) |       |
|                             |   |                  |       |   |             |   |
|                             |   | December 31,2015      |       |   | December 31,2016 |   |
| Deductible temporary differences |   |                  | 26,543,789 |   |             |   | 20,591,300 |   |
| Unused tax losses                |   |                  | 14,679,106 |   |             |   | 18,433,908 |   |
| Unused tax credits               |   |                  | 210,495    |   |             |   | – |   |
| Total                            |   |                  | 41,433,390 |   |             |   | 39,025,208 |   |
|                            |   |                  |       |   |             |   |
|---------------------------------|--------|-----------------------|------------|--------|------------------|--------|
|                            |   | (In thousands of yen) |       |
|                            |   |                  |       |   |             |   |
|                            |   | December 31,2015      |       |   | December 31,2016 |   |
| Less than one year              |   |                  | –    |   |             |   | – |   |
| Between one year and five years |   |                  | 1,776,598  |   |             |   | 2,103,593 |   |
| Five years and more             |   |                  | 1,877,067  |   |             |   | 3,826,286 |   |
| No expiration date              |   |                  | 11,025,441 |   |             |   | 12,504,029 |   |
| Total                           |   |                  | 14,679,106 |   |             |   | 18,433,908 |   |

----

| 13. | Income Taxes (continued) |
|-----|-------------------------------|

| (2) | Deferred Tax Assets and Deferred Tax Liabilities (continued) |
|-----|-------------------------------------------------------------------|

|                            |   |                  |    |   |              |   |
|---------------------------------|--------|-----------------------|---------|--------|-------------------|--------|
|                            |   | (In thousands of yen) |    |
|                            |   |                  |    |   |              |   |
|                            |   | December 31, 2015     |    |   | December 31, 2016 |   |
| Less than one year              |   |                  | – |   |              |   | – |   |
| Between one year and five years |   |                  | 210,495 |   |              |   | – |   |
| Five years and more             |   |                  | – |   |              |   | – |   |
| No expiration date              |   |                  | – |   |              |   | – |   |
| Total                           |   |                  | 210,495 |   |              |   | – |   |

| (3) | The components of income tax benefits/(expenses) for the years ended December 31, 2014, 2015 and 2016 are as follows: |
|-----|----------------------------------------------------------------------------------------------------------------------------|

|                                                                    |   |                  |       |   |   |   |       |   |   |
|-------------------------------------------------------------------------|--------|-----------------------|------------|--------|--------|--------|------------|--------|--------|
|                                                                    |   | (In thousands of yen) |       |
|                                                                    |   |                  |       |   |   |   |       |   |   |
|                                                                    |   | 2014                  |       |   | 2015   |   |       | 2016   |   |
| Current income tax:                                                     |   |                  |       |   |   |   |       |   |   |
| Current income tax expenses(1)                                          |   |                  | (9,619,085 | )      |   |   | (7,595,173 | )      |   |   | (10,162,402 | ) |
| Deferred tax:                                                           |   |                  |       |   |   |   |       |   |   |   |   |   |
| Changes related to origination and reversal of temporary differences(2) |   |                  | 2,739,637  |   |   |   | 8,757,821  |   |   |   | 1,948,588 |   |
| Changes in the tax rate(3)                                              |   |                  | (271,118   | )      |   |   | (1,016,644 | )      |   |   | (690,529 | ) |
| Income tax benefits/(expenses)                                          |   |                  | (7,150,566 | )      |   |   | 146,004    |   |   |   | (8,904,343 | ) |

| (1)  | Current income tax expenses include previously unrecognized tax benefits from tax loss carryforwards and deductible temporary differences. These benefits were nil, 1,800,969 thousand yen and 489,331 thousand yen for the years ended December 31, 2014, 2015 and 2016, respectively. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)  | These balances represent the deferred tax benefit from the reversal of previously written-down deferred tax assets partially offset by write-downs of deferred tax assets. The Group had deferred tax benefits of nil, 5,698,746 thousand yen and 540,741 thousand yen for the years ended December 31, 2014, 2015 and 2016, respectively. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)  | Amendments to the Japanese tax regulations were enacted into law on March 31, 2014, March 31, 2015 and March 29, 2016. As a result of these amendments, the statutory income tax rate has been reduced from 38.0% to approximately 35.6% and 33.5% effective from the year ended December 31, 2015 and 2016, respectively, and the statutory income tax rates are scheduled to be reduced to approximately 31.7% effective from the year ending December 31, 2017 and 31.5% effective from the year ending December 31, 2019. The Group measured deferred tax assets and deferred tax liabilities at the tax rates that are expected to apply to the period when the assets are realized or the liabilities are settled. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 13. | Income Taxes (continued) |
|-----|-------------------------------|

|  (4) | The income tax expenses calculated by applying the statutory tax rates to the Group's profit or loss before tax differ from the actual tax expenses in the Consolidated Statements of Profit or Loss for the years ended December 31, 2014, 2015 and 2016 for the following reasons: |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                           |   |                  |       |   |   |   |        |   |   |
|------------------------------------------------------------------------------------------------|--------|-----------------------|------------|--------|--------|--------|-------------|--------|--------|
|                                                                                           |   | (In thousands of yen) |       |
|                                                                                           |   |                  |       |   |   |   |        |   |   |
|                                                                                           |   | 2014                  |       |   | 2015   |   |        | 2016   |   |
| Profit/(loss) before tax from continuing operations                                            |   |                  | 6,262,807  |   |   |   | (530,118    | )      |   |   | 17,989,866 |   |
| Profit/(loss) before tax from discontinued operations                                          |   |                  | 2,846,559  |   |   |   | (11,503,098 | )      |   |   | (2,726,310 | ) |
| Accounting profit/(loss) before tax                                                            |   |                  | 9,109,366  |   |   |   | (12,033,216 | )      |   |   | 15,263,556 |   |
| Income tax (expenses)/benefits at a statutory rate of 33.5% (2014: 38.0% and 2015: 35.6%)      |   |                  | (3,462,470 | )      |   |   | 4,288,638   |   |   |   | (5,119,397 | ) |
| Permanent non-deductible items(1)                                                              |   |                  | (811,952   | )      |   |   | (3,386,033  | )      |   |   | (2,703,478 | ) |
| Assessment of the recoverability of deferred tax assets(2)                                     |   |                  | (2,369,159 | )      |   |   | 2,213,837   |   |   |   | (751,868 | ) |
| Effects of changes in tax rate                                                                 |   |                  | (271,118   | )      |   |   | (1,016,644  | )      |   |   | (690,529 | ) |
| Differences in applicable tax rate of subsidiaries(3)                                          |   |                  | (1,463,557 | )      |   |   | (2,217,781  | )      |   |   | (80,930 | ) |
| Decrease in temporary differences from business divestiture                                    |   |                  | (372,033   | )      |   |   | –     |   |   |   | – |   |
| Non-taxable income(4)                                                                          |   |                  | 1,511,341  |   |   |   | –     |   |   |   | – |   |
| Tax effect on investment in subsidiaries and associates(5)                                     |   |                  | –    |   |   |   | 4,260,291   |   |   |   | 591,370 |   |
| Gain on fair value measurement relating to the deconsolidation(6)                              |   |                  | –    |   |   |   | –     |   |   |   | 580,550 |   |
| Others                                                                                         |   |                  | 133,658    |   |   |   | (81,203     | )      |   |   | 14,581 |   |
| Income tax (expenses)/benefits at an effective tax rate of 53.5% (2014: 78.0% and 2015: 33.7%) |   |                  | (7,105,290 | )      |   |   | 4,061,105   |   |   |   | (8,159,701 | ) |
| Income tax (expenses)/benefits reported in the statements of profit or loss                    |   |                  | (7,150,566 | )      |   |   | 146,004     |   |   |   | (8,904,343 | ) |
| Income tax benefits attributable to discontinued operations                                    |   |                  | 45,276     |   |   |   | 3,915,101   |   |   |   | 744,642 |   |
|                                                                                           |   |                  |       |   |   |   |        |   |   |   |   |   |
|                                                                                           |   |                  | (7,105,290 | )      |   |   | 4,061,105   |   |   |   | (8,159,701 | ) |

| (1)  | Permanent non-deductible items were mainly related to non-deductible share-based payment expenses, including share-based payment expenses incurred in connection with stock options granted to non-Japanese employees and directors. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 13. | Income Taxes (continued) |
|-----|-------------------------------|

| (4) | The income tax expenses calculated by applying the statutory tax rates to the Group's profit or loss before tax differ from the actual tax expenses in the Consolidated Statements of Profit or Loss for the years ended December 31, 2013, 2014 and 2015 for the following reasons (continued): |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | For the year ended December 31, 2014, the amount was related to unrecognized deferred tax assets of 2,245,467 thousand yen and 123,692 thousand yen in connection with the pre-tax losses recorded by the Group's Korean subsidiaries and the Group's other subsidiaries, respectively, on a stand-alone basis. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  |    | For the year ended December 31, 2015, the amount was due to recognizing previously unrecognized deferred tax assets of 3,092,053 thousand yen and 2,434,188 thousand yen for tax loss carryforwards and deductible temporary differences, respectively, primarily for one of the Group's Korean subsidiaries on a stand-alone basis. Such impact was partially offset by unrecognized deferred tax assets of 2,368,483 thousand yen and 943,921 thousand yen in connection with the pre-tax losses recorded by MixRadio Limited and the Group's other subsidiaries, respectively, on a stand-alone basis. |
|--|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  |  | For the year ended December 31, 2016, the amount was due to unrecognized deferred tax assets of 965,841 thousand yen, 361,218 thousand yen and 189,278 thousand yen in connection with the pre-tax losses recorded by the Group's Japanese subsidiaries, MixRadio Limited and the Group's other subsidiaries, respectively, on a stand-alone basis. Such impact was partially offset by recognizing previously unrecognized deferred tax assets of 222,287 thousand yen and 256,017 thousand yen for tax loss carryforwards and deductible temporary differences, respectively, primarily for the Group's Korean subsidiaries on a stand-alone basis. |
|--|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) | The amounts were mainly related to the differences resulting from applying a lower statutory income tax rate of 22.0% for the Korean subsidiaries for the year ended December 31, 2014, and a lower statutory income tax rate of 20.0% for MixRadio Limited for the year ended December 31, 2015, versus applying the higher Japanese statutory rates (38.0% for 2014, 35.6% for 2015) for the respective fiscal years on pre-tax losses recorded by the Korean subsidiaries and MixRadio Limited. For the year ended December 31, 2016, the amount increased from previous year mainly due to pre-tax profits recorded by the Group's Korean subsidiaries. This increase was partially offset by the pre-tax loss recorded by MixRadio Limited. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (4) | The non-taxable income was related to dividend income received by the Group from one of its subsidiaries. |
|--|-----|-----------------------------------------------------------------------------------------------------------|

|  | (5) | This tax effect is mainly due to the deductible temporary difference arising from the investment in MixRadio Limited, which incurred losses during the year. This tax effect offsets MixRadio Limited's stand-alone tax impacts described in (2) and (3) above. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (6) | The amount was related to the re-measurement to fair value of the investment in LINE BIZ Plus Ltd retained by the Group. Refer to Note 20 Supplemental Cash Flow Information for further details. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 14. | Other Current Liabilities |
|-----|---------------------------|

| 15. | Financial Assets and Financial Liabilities |
|-----|--------------------------------------------|

|                                                     |   |              |       |   |                  |    |       |       |   |       |       |   |
|----------------------------------------------------------|--------|-------------------|------------|--------|-----------------------|---------|------------|------------|--------|------------|------------|--------|
|                                                     |   |              |       |   | (In thousands of yen) |    |
|                                                     |   |              |       |   |                  |    |
|                                                     |   | December 31, 2015 |       |   | December 31, 2016     |    |
| Items                                                    |   | Book value        |       |   | Fair value            |    |       | Book value |   |       | Fair value |   |
| Financial assets                                         |   |              |       |   |                  |    |       |       |   |       |       |   |
| Trade and other receivables                              |   |              |       |   |                  |    |       |       |   |       |       |   |
| Loans and receivables                                    |   |              | 27,248,497 |   |                  |    |       |       |   | 28,166,787 |       |   |   |   |
| Other financial assets, current                          |   |              |       |   |                  |    |       |       |   |       |       |   |   |   |
| Loans and receivables                                    |   |              |       |   |                  |    |       |       |   |       |       |   |   |   |
| Time deposits                                            |   |              | 314,194    |   |                  |    |       |       |   | 764,046    |       |   |   |   |
| Corporate bonds and other debt instruments               |   |              | –    |   |                  |    |       |       |   | 4,011,556  |       |   |   |   |
| Available-for-sale financial assets                      |   |              | –    |   |                  | – |       |       |   | 1,000,000  |       |   |   | 1,000,000 |   |
| Office security deposits                                 |   |              | –    |   |                  |    |       |       |   | 1,169,683  |       |   |   |   |   |
| Other                                                    |   |              | 27,209     |   |                  |    |       |       |   | 6,776      |       |   |   |   |   |
| Total                                                    |   |              | 341,403    |   |                  |    |       |       |   | 6,952,061  |       |   |   |   |   |
| Other financial assets, non-current                      |   |              |       |   |                  |    |       |       |   |       |       |   |   |   |   |
| Held-to-maturity investments(1)                          |   |              | 280,490    |   |                  |    | 294,595    |       |   |       | 280,413    |   |   |   | 293,852 |   |
| Loans and receivables                                    |   |              |       |   |                  |    |       |       |   |       |       |   |   |   |   |   |
| Time deposits                                            |   |              | –    |   |                  |    | –    |       |   |       | 10,000,000 |   |   |   | 10,000,000 |   |
| Corporate bonds and other debt instruments               |   |              | –    |   |                  |    | –    |       |   |       | 2,631,817  |   |   |   | 2,631,817 |   |
| Guarantee deposits(1)                                    |   |              | 2,531,620  |   |                  |    |       |       |   |       | 3,446,640  |   |   |   |   |   |
| Office security deposits                                 |   |              | 3,832,993  |   |                  |    | 3,661,179  |       |   |       | 4,857,958  |   |   |   | 4,738,514 |   |
| Financial assets at fair value through profit or loss    |   |              |       |   |                  |    |       |       |   |       |       |   |   |   |   |   |
| Conversion right and redemption right of preferred stock |   |              | 871,309    |   |                  |    | 871,309    |       |   |       | 324,876    |   |   |   | 324,876 |   |
| Available-for-sale financial assets(2)                   |   |              | 15,863,543 |   |                  |    | 15,863,543 |       |   |       | 14,141,322 |   |   |   | 14,141,322 |   |
| Other                                                    |   |              | 86,965     |   |                  |    |       |       |   |       | 32,436     |   |   |   |   |   |
| Total                                                    |   |              | 23,466,920 |   |                  |    |       |       |   |       | 35,715,462 |   |   |   |   |   |

----

| 15. | Financial Assets and Financial Liabilities (continued) |
|-----|-------------------------------------------------------------|

|                                                       |   |              |       |   |                  |   |   |       |   |       |       |   |
|------------------------------------------------------------|--------|-------------------|------------|--------|-----------------------|--------|--------|------------|--------|------------|------------|--------|
|                                                       |   |              |       |   | (In thousands of yen) |   |
|                                                       |   |              |       |   |                  |   |
|                                                       |   | December 31, 2015 |       |   | December 31, 2016     |   |
| Items                                                      |   | Book value        |       |   | Fair value            |   |   | Book value |   |       | Fair value |   |
| Financial liabilities                                      |   |              |       |   |                  |   |   |       |   |       |       |   |
| Trade and other payables                                   |   |              |       |   |                  |   |   |       |   |       |       |   |
| Financial liabilities measured at amortized cost           |   |              | 22,983,242 |   |                  |   |   |       |   | 21,531,817 |       |   |   |   |
| Other financial liabilities, current                       |   |              |       |   |                  |   |   |       |   |       |       |   |   |   |
| Financial liabilities measured at amortized cost           |   |              |       |   |                  |   |   |       |   |       |       |   |   |   |
| Deposits received                                          |   |              | 935,041    |   |                  |   |   |       |   | 2,571,804  |       |   |   |   |
| Short-term borrowings(3)                                   |   |              | 42,464,553 |   |                  |   |   |       |   | 21,925,000 |       |   |   |   |
| Corporate bonds(4)                                         |   |              | 510,000    |   |                  |   |   |       |   | –    |       |   |   |   |
| Others                                                     |   |              | 23,618     |   |                  |   |   |       |   | –    |       |   |   |   |
| Total                                                      |   |              | 43,933,212 |   |                  |   |   |       |   | 24,496,804 |       |   |   |   |
| Other financial liabilities non-current                    |   |              |       |   |                  |   |   |       |   |       |       |   |   |   |
| Financial liabilities measured at amortized cost           |   |              |       |   |                  |   |   |       |   |       |       |   |   |   |
| Office security deposits received under sublease agreement |   |              | 7,502      |   |                  |   | 7,502  |       |   |       | –    |   |   |   | – |   |
| Others                                                     |   |              | 782        |   |                  |   |   |       |   |       | –    |   |   |   |   |   |
| Total                                                      |   |              | 8,284      |   |                  |   |   |       |   |       | –    |   |   |   |   |   |

| (1)  | The Japanese Payment Services Act requires non-banking entities that engage in business activities involving advance payments from end users using virtual credits to secure a certain amount of money equal to or more than one half of the unused balance of virtual credits purchased by the end users as of the most recent base date set on March 31 and September 30 of each year, either by depositing or entrusting a cash reserve or government bonds with the Legal Affairs Bureau, or by concluding a guarantee contract with a financial institution. If deposits are made, they are recorded as guarantee deposits. If guarantee contracts are entered into, guarantee fees equal to the contractual amount times a guarantee fee rate are incurred. In accordance with the Japanese Payment Services Act, the Group had deposited cash of 2,530,200 thousand yen and 3,445,200 thousand yen as of December 31, 2015 and 2016, respectively. The Group also had deposited investments in Japanese government bonds of 280,490 thousand yen and 280,413 thousand yen as of December 31, 2015 and 2016, respectively, which the Group intends to hold until maturity for this purpose. In addition, the Group had credit guarantee contracts with banks for 2,000,000 thousand yen with a guarantee fee rate of 0.2% and for 10,100,000 thousand yen with a weighted average guarantee fee rate of 0.1% as of December 31, 2015 and 2016, respectively, to comply with the Japanese Payment Services Act. |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 15. | Financial Assets and Financial Liabilities (continued) |
|-----|-------------------------------------------------------------|

| (2)  | Impairment losses of 1,789,603 thousand yen and 292,683 thousand yen were recognized for available-for-sale financial assets for the year ended December 31, 2015 and 2016, respectively. |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)  | The weighted average interest rate of the remaining outstanding short-term borrowings as of December 31, 2015 and 2016 was 0.2% and 0.1%, respectively. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)  | The Company issued unsecured corporate bonds on August 30, 2013 with an aggregate principal amount of 1,500,000 thousand yen due August 31, 2016, at a variable interest rate which was indexed to 6-month TIBOR. Interest and principal are payable semi-annually. All of the corporate bonds were repaid during the year ended December 31, 2016. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16. | Employment Benefits |
|-----|---------------------|

----

| 16. | Employment Benefits (continued) |
|-----|--------------------------------------|

|  (1) | Liabilities for defined benefit obligations as of December 31, 2015 and 2016 are as follows: |
|-----------|---------------------------------------------------------------------------------------------------|

|                                         |   |                  |      |   |              |   |
|----------------------------------------------|--------|-----------------------|-----------|--------|-------------------|--------|
|                                         |   | (In thousands of yen) |      |
|                                         |   |                  |      |   |              |   |
|                                         |   | December 31, 2015     |      |   | December 31, 2016 |   |
| Present value of defined benefit obligations |   |                  | 5,495,416 |   |              |   | 6,203,933 |   |
| Liabilities for post-employment benefits     |   |                  | 5,495,416 |   |              |   | 6,203,933 |   |

| (2) | Expenses related to defined benefit plans are recognized in the Consolidated Statements of Profit or Loss as operating expenses for the years ended December 31, 2014, 2015 and 2016 are comprised of the following: |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  |   |                  |    |   |   |   |      |   |   |
|-----------------------|--------|-----------------------|---------|--------|--------|--------|-----------|--------|--------|
|                  |   | (In thousands of yen) |    |
|                  |   |                  |    |   |   |   |      |   |   |
|                  |   | 2014                  |    |   | 2015   |   |      | 2016   |   |
| Current service costs |   |                  | 359,851 |   |   |   | 1,025,187 |   |   |   | 1,619,687 |   |
| Interest costs        |   |                  | 51,660  |   |   |   | 81,124    |   |   |   | 126,892 |   |
| Total                 |   |                  | 411,511 |   |   |   | 1,106,311 |   |   |   | 1,746,579 |   |

| (3) | Movements in the present value of the defined benefit obligations for the years ended December 31, 2015 and 2016 are as follows: |
|-----|---------------------------------------------------------------------------------------------------------------------------------------|

|                                                                      |   |                  |      |   |   |   |
|---------------------------------------------------------------------------|--------|-----------------------|-----------|--------|--------|--------|
|                                                                      |   | (In thousands of yen) |      |
|                                                                      |   |                  |      |   |   |   |
|                                                                      |   | 2015                  |      |   | 2016   |   |
| Defined benefit obligations at the beginning of year                      |   |                  | 2,921,467 |   |   |   | 5,495,416 |   |
| Current service costs                                                     |   |                  | 1,025,187 |   |   |   | 1,619,687 |   |
| Interest costs                                                            |   |                  | 81,124    |   |   |   | 126,892 |   |
| Remeasurement losses/(gains):                                             |   |                  |      |   |   |   |   |   |
| Actuarial losses arising from changes in demographic assumptions(1)       |   |                  | 496       |   |   |   | 7,742,401 |   |
| Actuarial losses/(gains) arising from changes in financial assumptions(2) |   |                  | 1,042,820 |   |   |   | (8,313,598 | ) |
| Experience adjustments(3)                                                 |   |                  | 678,797   |   |   |   | (102,522 | ) |
| Payments from the plan                                                    |   |                  | (112,180  | )      |   |   | (174,023 | ) |
| Net transfer(4)                                                           |   |                  | 161,862   |   |   |   | 48,810 |   |
| Exchange differences on translation of foreign operations                 |   |                  | (304,157  | )      |   |   | (239,130 | ) |
| Defined benefit obligations at the end of year                            |   |                  | 5,495,416 |   |   |   | 6,203,933 |   |

| (1)  | In 2016, actuarial losses arising from changes in demographic assumptions resulted mainly from a decrease in estimated termination rates. This decrease primarily related to the fact that, during the year, the increase in the number of employees having left entities that offer defined benefit plans was lower than the increase in the number of employees that are subject to defined benefit plans. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)  | In 2016, actuarial gains arising from changes in financial assumptions resulted mainly from an increase in the discount rate and a decrease in the period end weighted average salary increase rate at year end 2016, as compared to corresponding rates at year end in 2015. The increase in the discount rate primarily related to the fact that the estimated duration, which is used to calculate the retirement benefit obligation, increased due to the decrease in estimated termination rates described above. The decrease in the weighted average salary increase rate primarily related to the fact that the salary increase rates for the current year and the estimated future inflation rate decreased. |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)  | Experience adjustments represent the impact on the liabilities of differences between actual experiences during the year compared with the previous actuarial assumptions. |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)  | Net transfer primarily represents the transfer of defined benefit obligations associated with employees of NAVER or other NAVER group companies joining LINE Plus, LINE PLAY Corporation, LINE Biz Plus Corporation and LINE Friends Corporation. |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 16. | Employment Benefits (continued) |
|-----|--------------------------------------|

| (4) | Significant judgment is required when selecting key assumptions for measuring defined benefit expenses for a period and the defined benefit obligation at the period end for each defined benefit plan. The principal actuarial assumptions used include discount rates and salary increase rates. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                |                   |   |                   |   |                   |
|-------------------------------------|------------------------|--------|------------------------|--------|------------------------|
|                                | December 31, 2014 |   | December 31, 2015 |   | December 31, 2016 |
| Discount rate                       | 3.0%                   |   | 2.6%                   |   | 3.4%                   |
| Weighted average of salary increase | 9.9%-11.9%             |   | 9.5%-14.4%             |   | 8.6%-11.3%             |

| (5) | Economic factors and conditions often affect multiple assumptions simultaneously; as such, the effects of changes in key assumptions are not necessarily linear. The following sensitivity analysis illustrates the impact of changes in certain significant actuarial assumptions, leaving all other assumptions constant, as of December 31, 2015 and 2016: |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                     |   |                                    |     |   |              |   |
|----------------------------------------------------------|--------|-----------------------------------------|----------|--------|-------------------|--------|
|                                                     |   |                                    |     |   |              |   |
|                                                     |   | (In thousands of yen)                   |     |
|                                                     |   |                                    |     |
|                                                     |   | Impact on the definedbenefit obligation |     |
| Assumptions and    sensitivity level |   | December 31, 2015                       |     |   | December 31, 2016 |   |
| Discount rate                                            |   |                                    |     |   |              |   |
| 100 basis point increase                       |   |                                    | (520,348 | )      |              |   | (842,106 | ) |
| 100 basis point decrease                       |   |                                    | 615,235  |   |              |   | 1,039,514 |   |
| Salary increase rate                                     |   |                                    |     |   |              |   |   |   |
| 100 basis point increase                       |   |                                    | 545,676  |   |              |   | 971,680 |   |
| 100 basis point decrease                       |   |                                    | (477,460 | )      |              |   | (810,072 | ) |
|                                                     |   |                                    |     |   |              |   |   |   |

| (6) | The average duration of the defined benefit plan obligations as of December 31, 2016 was 15.2 years. |
|-----|-----------------------------------------------------------------------------------------------------------|

|            |   |                                 |
|-----------------|--------|--------------------------------------|
| Years           |   | (In thousands of yen) |
| 2017            |   | 170,618                              |
| 2018            |   | 227,357                              |
| 2019            |   | 283,175                              |
| 2020            |   | 342,530                              |
| 2021            |   | 405,777                              |
| 2022–2026 |   | 3,165,309                            |

----

| 17. | Leases—Group as Lessee |
|-----|------------------------------|

|      |                   |   |                   |
|-----------|------------------------|--------|------------------------|
|      | (In thousands of yen)  |
|      |                   |   |                   |
|      | December 31, 2015 |   | December 31, 2016 |
| Equipment | 1,329                  |   | -                      |

----

| 17. | Leases—Group as Lessee (continued) |
|-----|-----------------------------------------------|

|                                        |   |                  |   |   |             |   |
|---------------------------------------------|--------|-----------------------|--------|--------|------------------|--------|
|                                        |   | (In thousands of yen) |   |
|                                        |   |                  |   |   |             |   |
|                                        |   | December 31,2015      |   |   | December 31,2016 |   |
| Within one year                             |   |                  |   |   |             |   |
| Minimum payments                            |   |                  | 758    |   |             |   | – |   |
| Less amounts representing finance charges   |   |                  | (1     | )      |             |   | – |   |
| Present value of minimum lease payments     |   |                  | 757    |   |             |   | – |   |
| After one year but not more than five years |   |                  |   |   |             |   |   |   |
| Minimum payments                            |   |                  | 759    |   |             |   | – |   |
| Less amounts representing finance charges   |   |                  | (4     | )      |             |   | – |   |
| Present value of minimum lease payments     |   |                  | 755    |   |             |   | – |   |
| Total                                       |   |                  |   |   |             |   |   |   |
| Minimum payments                            |   |                  | 1,517  |   |             |   | – |   |
| Less amounts representing finance charges   |   |                  | (5     | )      |             |   | – |   |
| Present value of minimum lease payments     |   |                  | 1,512  |   |             |   | – |   |
|                                        |   |                  |      |   |              |   |
|---------------------------------------------|--------|-----------------------|-----------|--------|-------------------|--------|
|                                        |   | (In thousands of yen) |      |
|                                        |   |                  |      |   |              |   |
|                                        |   | December 31,2015      |      |   | December 31, 2016 |   |
| Within one year                             |   |                  | 2,848,114 |   |              |   | 3,944,961 |   |
| After one year but not more than five years |   |                  | 2,663,140 |   |              |   | 12,100,537 |   |
|                                        |   |                  | 5,511,254 |   |              |   | 16,045,498 |   |

----

| 18. | Leases—Group as Lessor |
|-----|------------------------------|

| 19. | Issued Capital and Reserves |
|-----|-----------------------------|

| (1) | Authorized shares and shares issued |
|-----|-------------------------------------|

|                                             |   |                                                 |        |   |                                             |   |         |                            |   |   |         |   |
|--------------------------------------------------|--------|------------------------------------------------------|-------------|--------|--------------------------------------------------|--------|--------------|---------------------------------|--------|--------|--------------|--------|
|                                             |   | Authorized shares(Share capital withno-par value)(1) |        |   | Shares issued(Share capital withno-par value)(1) |   |         | Share capital(thousands of yen) |   |
|                                             |   | Common Shares                                        |        |   | Class A shares                                   |   |
| January 1, 2014                                  |   |                                                 | 400,000,000 |   |                                             |   | 174,992,000  |                            |   |   | –      |   |   |   | 12,596,198 |   |
| Changes during the year                          |   |                                                 | –     |   |                                             |   | –      |                            |   |   | –      |   |   |   | – |   |
| December 31, 2014                                |   |                                                 | 400,000,000 |   |                                             |   | 174,992,000  |                            |   |   | –      |   |   |   | 12,596,198 |   |
| Conversion of common shares to class A shares(2) |   |                                                 | 290,000,000 |   |                                             |   | (174,992,000 | )                               |   |   | 174,992,000  |   |   |   | – |   |
| December 31, 2015                                |   |                                                 | 690,000,000 |   |                                             |   | –      |                            |   |   | 174,992,000  |   |   |   | 12,596,198 |   |
| Conversion of class A shares to common shares(3) |   |                                                 | –     |   |                                             |   | 174,992,000  |                            |   |   | (174,992,000 | )      |   |   | – |   |
| Initial public offering(4)                       |   |                                                 | –     |   |                                             |   | 40,250,000   |                            |   |   | –      |   |   |   | 63,423,938 |   |
| Exercise of stock options(5)                     |   |                                                 | –     |   |                                             |   | 2,533,500    |                            |   |   | –      |   |   |   | 1,835,549 |   |
| December 31, 2016                                |   |                                                 | 690,000,000 |   |                                             |   | 217,775,500  |                            |   |   | –      |   |   |   | 77,855,685 |   |

| (1) | On July 28, 2014, the Company's board of directors approved a five-hundred-for-one forward stock split of the Company's common shares, effective July 28, 2014 (the "2014 Stock Split"). As a result of the stock split, the number of shares issued increased by 174,642,016 from 349,984 to 174,992,000. All references in the financial statements to the number of shares outstanding, per share amounts and stock option data of the Company have been adjusted to reflect the effect of the 2014 Stock Split for all periods presented.                                                          |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Through the amendment of its articles of incorporation on June 15, 2015, the Company introduced a dual class structure of common shares and class A shares. Under the dual class structure, each common share has one vote per unit of 100 shares, and each class A share has one vote per unit of 10 shares, while both classes of shares have the same rights to share in profit, distribution of retained earnings and residual assets. As part of the amendment, the total number of authorized shares was increased to 690,000,000, of which up to 190,872,500 shares may be issued as class A shares. |

----

| 19. | Issued Capital and Reserves (continued) |
|-----|----------------------------------------------|

| (1) | Authorized shares and shares issued (continued) |
|-----|------------------------------------------------------|

|  | (3)  | Through an amendment of its article of incorporation effective as of March 31, 2016, the Company terminated its dual class structure of shares. |
|--|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (4)  | The Company issued 35,000,000 shares of common shares through the initial public offering of new shares on July 14, 2016. Additionally, on August 16, 2016, Nomura Securities Co., Ltd. and Morgan Stanley & Co. LLC. exercised their options to purchase 5,250,000 additional common shares in an allotment of new shares. As of December 31, 2016, there were no outstanding over-allotment options granted to underwriters. |
|--|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (5)  | Refer to Note 27 Share-Based Payments for further details. |
|--|-----------|------------------------------------------------------------|

| (2) | Share premium and retained earnings |
|-----|-------------------------------------|

|                                                                |   |                    |       |   |                                 |   |     |      |   |   |                |   |
|---------------------------------------------------------------------|--------|-------------------------|------------|--------|--------------------------------------|--------|----------|-----------|--------|--------|---------------------|--------|
|                                                                |   | (In thousands of yen)   |       |
|                                                                |   |                    |       |   |                                 |   |     |      |   |   |                |   |
|                                                                |   | Share-basedpayments (5) |       |   | Common control business combinations |   |     | Others(6) |   |   | Share premium total |   |
| January 1, 2014                                                     |   |                    | 835,589    |   |                                 |   | 426,958  |      |   |   | 3,716,025           |   |   |   | 4,978,572 |   |
| Distributions to the shareholder(1)                                 |   |                    | –    |   |                                 |   | –  |      |   |   | (36,842             | )      |   |   | (36,842 | ) |
| Share-based payments                                                |   |                    | 2,974,692  |   |                                 |   | –  |      |   |   | –             |   |   |   | 2,974,692 |   |
| Acquisition of LINE Vietnam by the Group(2)                         |   |                    | –    |   |                                 |   | (133,329 | )         |   |   | –             |   |   |   | (133,329 | ) |
| Other                                                               |   |                    | –    |   |                                 |   | –  |      |   |   | (11,434             | )      |   |   | (11,434 | ) |
| December 31, 2014                                                   |   |                    | 3,810,281  |   |                                 |   | 293,629  |      |   |   | 3,667,749           |   |   |   | 7,771,659 |   |
| Share-based payments                                                |   |                    | 11,212,630 |   |                                 |   | –  |      |   |   | –             |   |   |   | 11,212,630 |   |
| Change in ownership interest in a subsidiary without losing control |   |                    | –    |   |                                 |   | –  |      |   |   | (1,513              | )      |   |   | (1,513 | ) |
| December 31, 2015                                                   |   |                    | 15,022,911 |   |                                 |   | 293,629  |      |   |   | 3,666,236           |   |   |   | 18,982,776 |   |
| Share-based payments                                                |   |                    | 9,520,395  |   |                                 |   | –  |      |   |   | –             |   |   |   | 9,520,395 |   |
| Forfeiture of stock options                                    |   |                    | (59,869    | )      |                                 |   | –  |      |   |   | –             |   |   |   | (59,869 | ) |
| Exercise of stock options                                      |   |                    | (2,548,327 | )      |                                 |   | –  |      |   |   | 2,460,085           |   |   |   | (88,242 | ) |
| Initial public offering(3)                                     |   |                    | –    |   |                                 |   | –  |      |   |   | 63,423,938          |   |   |   | 63,423,938 |   |
| Cost related to initial public offering(4)                          |   |                    | –    |   |                                 |   | –  |      |   |   | (570,529            | )      |   |   | (570,529 | ) |
| December 31, 2016                                                   |   |                    | 21,935,110 |   |                                 |   | 293,629  |      |   |   | 68,979,730          |   |   |   | 91,208,469 |   |

----

| 19. | Issued Capital and Reserves (continued) |
|-----|----------------------------------------------|

| (2) | Share premium and retained earnings (continued) |
|-----|------------------------------------------------------|

|   | (1) | LINE Biz Plus Corporation was established by LINE Plus in 2014. Certain NAVER employees, along with their associated post-employment defined benefit obligations at the time of transfer, were transferred to LINE Biz Plus Corporation. There was a difference between the total defined benefit obligations assumed by the Group and the cash proceeds received from NAVER. Such difference of 36,842 thousand yen was accounted for as a deemed distribution to the shareholder and charged to share premium. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | The decrease in share premium was attributable to the acquisition of LINE Vietnam from NAVER by the Group in 2014. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------|

|   | (3) | The Company issued 35,000,000 common shares through the initial public offering of new shares on July 14, 2016. Additionally, on August 16, 2016, Nomura Securities Co., Ltd. and Morgan Stanley & Co. LLC. exercised their options to purchase 5,250,000 additional shares of common stock in an allotment of new shares. As of December 31, 2016, there were no outstanding allotment options granted to underwriters. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Incremental costs directly attributable to the issuance of common shares are recognized as a deduction from equity, net of any tax effects, in accordance with IAS 32 Financial instruments: Presentation. Refer to Note 13 (1) Income Taxes for further details on these tax effects. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Through the amendment of its articles of incorporation on June 15, 2015, the Company amended the terms applicable to a portion of two tranches of stock options, which are the acquisition rights for common shares (the "Common Stock Options"). As a result of the amendment, 24,724 Common Stock Options originally granted on December 17, 2012 and 6,949 Common Stock Options originally granted on February 4, 2015 were converted to the acquisition rights for class A shares (the "Class A Stock Options"), with the holders of such options entitled to acquire 500 class A shares upon exercise of each stock option. Refer to Note 27 Share-Based Payments for further details. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | Through an amendment of its article of incorporation effective as of March 31, 2016, the Company amended the terms applicable to stock options from class A shares to common shares. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | Resulted mainly from capital reserve requirements under the Companies Act of Japan. |
|--------|-----|-------------------------------------------------------------------------------------|

----

|  20. | Supplemental Cash Flow Information |
|-----------|------------------------------------|

|                                                                                                               |                                  |
|--------------------------------------------------------------------------------------------------------------------|---------------------------------------|
|                                                                                                               | (In thousands of  yen) |
| Cash and cash equivalents                                                                                          | 1,633,156                             |
| Other current assets                                                                                               | 831,678                               |
| Non-current assets                                                                                                 | 1,820,138                             |
| Current liabilities                                                                                                | (3,614,222)                           |
| Non-current liabilities                                                                                            | (102,877)                             |
| Gain on divestiture of business and subsidiary                                                                     | 2,455,959                             |
| Total consideration received in cash                                                                               | 3,023,832                             |
| Net increase in cash and cash equivalents due to the divestiture of the data management business and subsidiary(1) | 1,390,676                             |

|  | (1)  | This amount is included in "Proceeds from divestitures of business and related entities" in the Company's Consolidated Statements of Cash Flows. |
|--|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                      |   |   |                  |
|-----------------------------------------------------------|--------|--------|-----------------------|
|                                                      |   |   | (In thousands of yen) |   |
| Cash and cash equivalents(*)                              |   |   | 481,610               |   |
| Other current assets                                      |   |   | 18,636                |   |
| Non-current assets                                        |   |   | 27,852                |   |
| Current liabilities                                       |   |   | (70,936               | ) |
| Non-current liabilities                                   |   |   | (4,220                | ) |
| Goodwill                                                  |   |   | 149,660               |   |
| Non-controlling interests                                 |   |   | 9                     |   |
| Exchange differences on translation of foreign operations |   |   | 50,318                |   |
| Total                                                     |   |   | 652,929               |   |

| (*) | This amount is included in "Cash disposed on loss of control of subsidiary" in the Group's Consolidated Statements of Cash Flows. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                             |   |   |    |
|--------------------------------------------------------------------------------------------------|--------|--------|---------|
| (In thousands of yen)                                                                            |
| Cash and cash equivalents                                                                        |   |   | 3,123   |   |
| Other current assets                                                                             |   |   | 10,218  |   |
| Current liabilities                                                                              |   |   | (34,302 | ) |
| Gain on divestiture of business and subsidiary                                                   |   |   | 20,963  |   |
| Total consideration received in cash                                                             |   |   | 2       |   |
| Net decrease in cash and cash equivalents due to the divestiture of Bonsai Garage Corporation(*) |   |   | (3,121  | ) |

----

| 21. | Revenues |
|-----|----------|

|                  |   |                  |       |   |   |   |        |   |   |
|-----------------------|--------|-----------------------|------------|--------|--------|--------|-------------|--------|--------|
|                  |   | (In thousands of yen) |       |
|                  |   |                  |       |   |   |   |        |   |   |
|                  |   | 2014                  |       |   | 2015   |   |        | 2016   |   |
| Sale of goods         |   |                  | 1,323,192  |   |   |   | 4,250,086   |   |   |   | 8,056,403 |   |
| Rendering of services |   |                  | 85,043,077 |   |   |   | 115,515,009 |   |   |   | 131,201,444 |   |
| Royalties             |   |                  | –    |   |   |   | 640,436     |   |   |   | 1,446,461 |   |
| Total                 |   |                  | 86,366,269 |   |   |   | 120,405,531 |   |   |   | 140,704,308 |   |

| 22. | Other Income and Expenses |
|-----|---------------------------|

| (1) | Other operating income for the years ended December 31, 2014, 2015 and 2016 is as follows: |
|-----|-------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                 |   | (In thousands of yen) |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|---------|
|                                                                                                                                                                                                                                                                 |   |                  |    |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                 |   | 2014                  |    |   | 2015 |   |   | 2016 |   |
| Virtual credits breakage income                                                                                                                                                                                                                                      |   |                  | 238,480 |   |   |   | 346,535 |   |   |   | 1,490,736 |   |
| Gain on fair value measurement relating to the deconsolidation of LINE BIZ Plus Ltd.(1)                                                                                                                                                                              |   |                  | – |   |   |   | – |   |   |   | 1,730,917 |   |
| Gain on sale of land(2)                                                                                                                                                                                                                                              |   |                  | – |   |   |   | – |   |   |   | 2,460,935 |   |
| Others                                                                                                                                                                                                                                                               |   |                  | 57,421  |   |   |   | 127,828 |   |   |   | 209,490 |   |
| Total                                                                                                                                                                                                                                                                |   |                  | 295,901 |   |   |   | 474,363 |   |   |   | 5,892,078 |   |
|                                                                                                                                                                                                                                                                 |   |                  |    |   |   |   |   |   |   |   |   |   |
| (1) Refer to Note 20 Supplemental Cash Flow Information for further details.                                                                                                                             |
| (2) On June 29, 2016, the Company sold land in Fukuoka prefecture with a carrying amount of 2,584,357 thousand yen to Kyushu Railway Company. The sale price was 5,050,000 thousand yen and the Group recognized a gain on the sale of 2,460,935 thousand yen.  |

|  (2) | Other operating expenses for the years ended December 31, 2014, 2015 and 2016 are as follows: |
|-----------|----------------------------------------------------------------------------------------------------|

|                                                                                      |   |                  |      |   |   |   |       |   |   |
|-------------------------------------------------------------------------------------------|--------|-----------------------|-----------|--------|--------|--------|------------|--------|--------|
|                                                                                      |   | (In thousands of yen) |      |
|                                                                                      |   |                  |      |   |   |   |       |   |   |
|                                                                                      |   | 2014                  |      |   | 2015   |   |       | 2016   |   |
| Rent                                                                                      |   |                  | 1,431,397 |   |   |   | 2,301,692  |   |   |   | 3,528,791 |   |
| Travel                                                                                    |   |                  | 1,419,270 |   |   |   | 1,851,145  |   |   |   | 1,736,642 |   |
| Supplies                                                                                  |   |                  | 726,664   |   |   |   | 722,938    |   |   |   | 1,154,247 |   |
| Taxes and dues                                                                            |   |                  | 235,716   |   |   |   | 249,760    |   |   |   | 800,523 |   |
| Professional fees                                                                         |   |                  | 1,652,188 |   |   |   | 2,256,063  |   |   |   | 2,030,263 |   |
| Cost of goods                                                                             |   |                  | 874,704   |   |   |   | 3,209,027  |   |   |   | 3,519,626 |   |
| Training                                                                                  |   |                  | 483,664   |   |   |   | 823,412    |   |   |   | 1,005,787 |   |
| Others(1)                                                                                 |   |                  | 1,731,312 |   |   |   | 3,017,358  |   |   |   | 4,601,820 |   |
| Total                                                                                     |   |                  | 8,554,915 |   |   |   | 14,431,395 |   |   |   | 18,377,699 |   |
|                                                                                      |   |                  |      |   |   |   |       |   |   |   |   |   |
| (1) The amount consists of office management fees and other miscellaneous expenses.  |   |                  |      |   |   |   |       |   |   |   |   |   |

----

| (3) | Other non-operating income for the years ended December 31, 2014, 2015 and 2016 is as follows: |
|-----|-----------------------------------------------------------------------------------------------------|

|                                                          |   |                  |    |   |   |   |    |   |   |
|---------------------------------------------------------------|--------|-----------------------|---------|--------|--------|--------|---------|--------|--------|
|                                                          |   | (In thousands of yen) |    |
|                                                          |   |                  |    |   |   |   |    |   |   |
|                                                          |   | 2014                  |    |   | 2015   |   |    | 2016   |   |
| Gain on financial assets at fair value through profit or loss |   |                  | – |   |   |   | 110,507 |   |   |   | – |   |
| Dividend income                                               |   |                  | – |   |   |   | 46,516  |   |   |   | 3,647 |   |
| Others                                                        |   |                  | – |   |   |   | – |   |   |   | 5,089 |   |
| Total                                                         |   |                  | – |   |   |   | 157,023 |   |   |   | 8,736 |   |

| (4) | Other non-operating expenses for the years ended December 31, 2014, 2015 and 2016 are as follows: |
|-----|--------------------------------------------------------------------------------------------------------|

|                                                          |   |                  |    |   |   |   |      |   |   |
|---------------------------------------------------------------|--------|-----------------------|---------|--------|--------|--------|-----------|--------|--------|
|                                                          |   | (In thousands of yen) |    |
|                                                          |   |                  |    |   |   |   |      |   |   |
|                                                          |   | 2014                  |    |   | 2015   |   |      | 2016   |   |
| Loss on financial assets at fair value through profit or loss |   |                  | – |   |   |   | –   |   |   |   | 656,109 |   |
| Loss on impairment of available-for-sale financial assets     |   |                  | – |   |   |   | 1,789,603 |   |   |   | 292,683 |   |
| Loss from derivatives                                         |   |                  | – |   |   |   | 61,702    |   |   |   | 59,571 |   |
| Others                                                        |   |                  | – |   |   |   | 36,132    |   |   |   | 53,550 |   |
| Total                                                         |   |                  | – |   |   |   | 1,887,437 |   |   |   | 1,061,913 |   |

| 23. | Discontinued Operations |
|-----|-------------------------|

----

| 23. | Discontinued Operations (continued) |
|-----|------------------------------------------|

|                                                                                                      |   |                  |       |   |   |   |        |   |   |
|-----------------------------------------------------------------------------------------------------------|--------|-----------------------|------------|--------|--------|--------|-------------|--------|--------|
|                                                                                                      |   | (In thousands of yen) |       |
|                                                                                                      |   |                  |       |   |   |   |        |   |   |
|                                                                                                      |   | 2014                  |       |   | 2015   |   |        | 2016   |   |
| Revenues                                                                                                  |   |                  | 3,476,856  |   |   |   | 264,306     |   |   |   | 443,754 |   |
| Other income                                                                                              |   |                  | 607        |   |   |   | –     |   |   |   | 8,711 |   |
| Expenses(1)                                                                                               |   |                  | (3,086,863 | )      |   |   | (11,767,404 | )      |   |   | (3,178,775 | ) |
| Gain on the disposal of the discontinued operations(2)                                                    |   |                  | 2,455,959  |   |   |   | –     |   |   |   | – |   |
| Profit/(loss) before tax from discontinued operations                                                     |   |                  | 2,846,559  |   |   |   | (11,503,098 | )      |   |   | (2,726,310 | ) |
| Income tax expenses on ordinary activities                                                                |   |                  | (216,418   | )      |   |   | –     |   |   |   | – |   |
| Income tax benefits on distribution and disposal(2)(3)                                                    |   |                  | 261,694    |   |   |   | 3,915,101   |   |   |   | 744,642 |   |
| Profit/(loss) for the year from discontinued operations (attributable to the shareholders of the Company) |   |                  | 2,891,835  |   |   |   | (7,587,997  | )      |   |   | (1,981,668 | ) |

| (1)    | The expenses for the year ended December 31, 2015 include impairment losses incurred attributable to the MixRadio segment. Refer to Note 11 (1), (3) Impairment for further details. The expenses for the year ended December 31, 2016 include employee termination benefits of 1,164,758 thousand yen and office lease termination fees of 125,786 thousand yen, both incurred in connection with the abandonment of MixRadio on March 21, 2016.                                                                      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (2)    | The Group recognized a gain of 2,455,959 thousand yen on the disposal of the data management business for financial accounting purposes on a consolidated basis. However, for income tax purposes, the Group recognized a loss on the disposal of the data management business, based on the book value of its investment in the data management subsidiaries on a stand-alone basis. Accordingly, the Group recorded 261,694 thousand yen of income tax benefits on the loss on sale for the year ended December 31, 2014. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (3)    | The income tax benefits of 3,915,101 thousand yen and 744,642 thousand yen are mainly due to the deductible temporary difference arising from the investment in MixRadio Limited, which incurred losses during the years.                                                                                                                                                                                                                                                                                                   |

|                      |   |                  |      |   |   |   |       |   |   |
|---------------------------|--------|-----------------------|-----------|--------|--------|--------|------------|--------|--------|
|                      |   | (In thousands of yen) |      |
|                      |   |                  |      |   |   |   |       |   |   |
|                      |   | 2014                  |      |   | 2015   |   |       | 2016   |   |
| Operating                 |   |                  | 384,183   |   |   |   | (6,457,229 | )      |   |   | (4,653,964 | ) |
| Investing                 |   |                  | 1,034,244 |   |   |   | (2,426,395 | )      |   |   | 21,747 |   |
| Financing                 |   |                  | 2,300,000 |   |   |   | –    |   |   |   | – |   |
| Net cash inflow/(outflow) |   |                  | 3,718,427 |   |   |   | (8,883,624 | )      |   |   | (4,632,217 | ) |

----

| 24. | Earnings per Share |
|-----|--------------------|

|                                                                                                                               |   |   |        |   |   |   |        |   |   |
|------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|
| (In thousands of yen, except number of shares)                                                                                     |   |
|                                                                                                                               |   |   |        |   |   |   |        |   |   |
|                                                                                                                               |   | 2014   |        |   | 2015   |   |        | 2016   |   |
| Profit for the year attributable to the shareholders of the Company from continuing operations                                     |   |   | 1,315,154   |   |   |   | 6,196       |   |   |   | 8,744,425 |   |
| Profit/(loss) for the year attributable to the shareholders of the Company from discontinued operations                            |   |   | 2,891,835   |   |   |   | (7,587,997  | )      |   |   | (1,981,668 | ) |
|                                                                                                                               |   |   |        |   |   |   |        |   |   |   |   |   |
| Total (loss)/profit for the year attributable to the shareholders of the Company for basic earnings and diluted earnings per share |   |   | 4,206,989   |   |   |   | (7,581,801  | )      |   |   | 6,762,757 |   |
|                                                                                                                               |   |   |        |   |   |   |        |   |   |   |   |   |
| Weighted average number of common and class A shares for basic earnings per share(1)                                          |   |   | 174,992,000 |   |   |   | 174,992,000 |   |   |   | 194,083,995 |   |
| Effect of dilution:                                                                                                                |   |   |        |   |   |   |        |   |   |   |   |   |
| Stock options                                                                                                                      |   |   | 15,032,846  |   |   |   | 18,805,566  |   |   |   | 20,790,013 |   |
|                                                                                                                               |   |   |        |   |   |   |        |   |   |   |   |   |
| Weighted average number of total common and class A shares adjusted for the effect of dilution(1)                             |   |   | 190,024,846 |   |   |   | 193,797,566 |   |   |   | 214,874,008 |   |
|                                                                                                                               |   |   |        |   |   |   |        |   |   |   |   |   |

| (1)  | Through the amendment of its articles of incorporation on June 15, 2015, the Company introduced a dual class structure of common shares and class A shares and converted all outstanding common shares into class A shares; therefore, the weighted average number of shares for the year ended December 31, 2015 includes the average number of common shares and class A shares for the year ended December 31, 2015. Additionally, through an amendment of its article of incorporation effective as of March 31, 2016, the Company terminated its dual class structure of commons shares and class A shares and converted all class A shares into common shares. |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 25. | Financial Risk Management |
|-----|---------------------------|

|  | – | Credit risk     |
|--|---------|-------------------------------------|
|  | – | Liquidity risk |
|--|---------|----------------|
|  | – | Market risk   |
|--|---------|-------------------------|

----

| 25. | Financial Risk Management (continued) |
|-----|--------------------------------------------|

| (1) | Risk Management Framework |
|-----|---------------------------|

| (2) | Credit Risk                  |
|-----|-------------------------------------------------------------------------------------------------------------------|

|  | (a) | Maximum amounts of possible financial loss to the Group due to credit risk as of December 31, 2015 and 2016 are as follows: |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------|

|                                           |   |                    |       |   |              |   |
|------------------------------------------------|--------|-------------------------|------------|--------|-------------------|--------|
|                                           |   | (In thousands of yen)   |       |
|                                           |   |                    |       |   |              |   |
|                                           |   | December 31,  2015 |       |   | December 31, 2016 |   |
|                                           |   | Book value              |       |   | Book value        |   |
| Demand deposits(1)                             |   |                    | 33,648,520 |   |              |   | 134,690,085 |   |
| Time deposits(1)                               |   |                    | 314,194    |   |              |   | 10,764,046 |   |
| Guarantee deposits(1)(2)                       |   |                    | 2,531,620  |   |              |   | 3,446,640 |   |
| Trade and other receivables (3)                |   |                    | 27,248,497 |   |              |   | 28,166,787 |   |
| Japanese government bonds(1)(2)                |   |                    | 280,490    |   |              |   | 280,413 |   |
| Corporate bonds and other debt instruments (1) |   |                    | -          |   |              |   | 7,643,373 |   |
| Office security deposits(1)(4)                 |   |                    | 3,832,993  |   |              |   | 6,027,641 |   |
| Total                                          |   |                    | 67,856,314 |   |              |   | 191,018,985 |   |

| (1)  | None of these assets were past due or impaired at the end of the respective reporting period.                                                                                                                                                                                                                                                                                                                                                                                                                      |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (2)  | Refer to Note 15 Financial Assets and Financial Liabilities for details of the financial instruments being deposited under the Japanese Payment Services Act.                                                                                                                                                                                                                                                                                                                                                      |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (3)  | For receivables, the Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group regularly performs credit assessments on customers and counterparties considering their financial position and historical data in order to manage the credit risk.                                                                                                                                                                                                              |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|           | The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical experience for similar assets.  |

----

| 25. | Financial Risk Management (continued) |
|-----|--------------------------------------------|

| (2) | Credit Risk (continued) |
|-----|------------------------------|

|   | The Group identifies concentrations of credit risk when a limited number of the Group's counterparties that have similar characteristics or business activities, and thus are affected similarly by changes in economic or other conditions, account for a large portion of the entire trade and other receivables. The Group had significant concentrations of credit risk with two payment processing service providers, representing 59.5% and 38.5% of trade and other receivables as of December 31, 2015 and 2016, respectively. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (4)    | The amount mainly consists of the office security deposits paid for the Group's office lease agreements.                                                                                                                                                                                                                                                                                                                                                                                                                               |

|                                                                                                                                                            |   |                            |      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-----------|
|                                                                                                                                                            |   | (In thousands of yen)           |      |
|                                                                                                                                                            |   |                            |      |
|                                                                                                                                                            |   | Allowance for doubtful accounts |      |
| Balance at January 1, 2015                                                                                                                                 |   |                            | 287,086   |   |
| Provision for the year                                                                                                                                          |   |                            | 253,795   |   |
| Reversal                                                                                                                                                        |   |                            | (108,718  | ) |
| Utilized                                                                                                                                                        |   |                            | (2,216    | ) |
| Balance at December 31, 2015                                                                                                                               |   |                            | 429,947   |   |
| Provision for the year                                                                                                                                          |   |                            | 663,344   |   |
| Reversal                                                                                                                                                        |   |                            | (8,956    | ) |
| Utilized                                                                                                                                                        |   |                            | (9,316    | ) |
| Translation                                                                                                                                                     |   |                            | 2,367     |   |
| Balance at December 31, 2016                                                                                                                               |   |                            | 1,077,386 |   |
|                                                                                                                                                            |   |                            |      |   |
| Refer to Note 7 Trade and Other Receivables for more details on non-current trade and other receivables that were tested for impairment on an individual basis. |

| (3) | Liquidity Risk |
|-----|----------------|

----

| 25. | Financial Risk Management (continued) |
|-----|--------------------------------------------|

| (3) | Liquidity Risk (continued) |
|-----|---------------------------------|

|  | (a) | Financial liabilities |
|--|-----|-----------------------|

|                                                       |   |                  |       |   |                           |   |       |              |   |   |             |   |   |            |    |
|------------------------------------------------------------|--------|-----------------------|------------|--------|--------------------------------|--------|------------|-------------------|--------|--------|------------------|--------|--------|-----------------|---------|
|                                                       |   | (In thousands of yen) |       |
|                                                       |   |                  |       |
|                                                       |   | December 31, 2015     |       |
|                                                       |   | Book value            |       |   | Contractual cash outflows |   |       | Less thanone year |   |   | One tofive years |   |   | Afterfive years |    |
| Trade and other payables                                   |   |                  | 22,983,242 |   |                           |   | 22,983,242 |              |   |   | 22,964,373       |   |   |            | 18,869  |   |   |   | – |   |
| Short-term borrowings(1)                                   |   |                  | 42,464,553 |   |                           |   | 42,487,943 |              |   |   | 42,487,943       |   |   |            | – |   |   |   | – |   |
| Deposits received                                          |   |                  | 935,041    |   |                           |   | 935,041    |              |   |   | 935,041          |   |   |            | – |   |   |   | – |   |
| Office security deposits received under sublease agreement |   |                  | 7,502      |   |                           |   | 7,502      |              |   |   | 7,502            |   |   |            | – |   |   |   | – |   |
| Corporate bonds                                            |   |                  | 510,000    |   |                           |   | 510,989    |              |   |   | 510,989          |   |   |            | – |   |   |   | – |   |
| Total                                                      |   |                  | 66,900,338 |   |                           |   | 66,924,717 |              |   |   | 66,905,848       |   |   |            | 18,869  |   |   |   | – |   |
|                     |   |                  |       |   |                      |   |       |              |   |   |             |   |   |            |    |
|--------------------------|--------|-----------------------|------------|--------|---------------------------|--------|------------|-------------------|--------|--------|------------------|--------|--------|-----------------|---------|
|                     |   | (In thousands of yen) |       |
|                     |   |                  |       |
|                     |   | December 31, 2016     |       |
|                     |   | Book value            |       |   | Contractual cash outflows |   |       | Less thanone year |   |   | One tofive years |   |   | Afterfive years |    |
| Trade and other payables |   |                  | 21,531,817 |   |                      |   | 21,531,817 |              |   |   | 21,531,817       |   |   |            | – |   |   |   | – |   |
| Short-term borrowings(1) |   |                  | 21,925,000 |   |                      |   | 21,936,600 |              |   |   | 21,936,600       |   |   |            | – |   |   | –  |   |
| Deposits received        |   |                  | 2,571,804  |   |                      |   | 2,571,804  |              |   |   | 2,571,804        |   |   |            | – |   |   |   | – |   |
| Total                    |   |                  | 46,028,621 |   |                      |   | 46,040,221 |              |   |   | 46,040,221       |   |   |            | – |   |   |   | – |   |

| (1)  | The Group had lines of credit with four banks for the years ended December 31, 2015 and 2016. The lines of credit available and the lines of credit used are as follows: |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                |   |                  |       |   |             |   |
|-------------------------------------|--------|-----------------------|------------|--------|------------------|--------|
|                                |   | (In thousands of yen) |       |
|                                |   |                  |       |   |             |   |
|                                |   | December 31,2015      |       |   | December 31,2016 |   |
| Lines of credit available           |   |                  | 54,200,000 |   |             |   | 24,380,000 |   |
| Lines of credit used                |   |                  | 42,464,553 |   |             |   | 21,667,000 |   |
| Remaining lines of credit available |   |                  | 11,735,447 |   |             |   | 2,713,000 |   |

----

| 25. | Financial Risk Management (continued) |
|-----|--------------------------------------------|

| (3) | Liquidity Risk (continued) |
|-----|---------------------------------|

|  | (b) | Financial assets |
|--|-----|------------------|

| (4) | Market Risk |
|-----|-------------|

|  | (a) | Exchange rate risk |
|--|-----|--------------------|

|                                |              |   |   |      |   |          |   |   |           |   |
|-------------------------------------|-------------------|--------|--------|-----------|--------|---------------|--------|--------|----------------|--------|
|                                | (In thousands)    |   |
|                                |              |   |
|                                | December 31, 2015 |   |
|                           | Currency          |   | Amount |      |   | Exchange rate |   |   | Yen equivalent |   |
| Monetary assets:                    |              |   |   |      |   |          |   |   |           |   |
| Cash and cash equivalents           | KRW               |   |   | 7,427,220 |   |          |   | 0.10   |           |   |   | 764,112 |   |
|                                | USD          |   |   | 29,248    |   |          |   | 120.57 |           |   |   | 3,526,564 |   |
|                                | TWD          |   |   | 29,382    |   |          |   | 3.65   |           |   |   | 107,341 |   |
|                                | EUR          |   |   | 1,269     |   |          |   | 131.74 |           |   |   | 167,156 |   |
| Trade receivables                   | KRW               |   |   | 4,359,230 |   |          |   | 0.10   |           |   |   | 448,478 |   |
|                                     | USD          |   |   | 7,599     |   |          |   | 120.57 |           |   |   | 916,210 |   |
| Time deposits                       | KRW               |   |   | 2,899,989 |   |          |   | 0.10   |           |   |   | 298,351 |   |
| Office security deposits            | KRW               |   |   | 5,225,093 |   |          |   | 0.10   |           |   |   | 537,558 |   |
| Available-for-sale financial assets | USD               |   |   | 5,336     |   |          |   | 120.57 |           |   |   | 643,446 |   |
| Total                               |              |   |   |      |   |          |   |   |           |   |   | 7,409,216 |   |

----

| 25. | Financial Risk Management (continued) |
|-----|--------------------------------------------|

| (4) | Market Risk (continued) |
|-----|------------------------------|

|                                |              |   |   |       |   |          |   |   |           |   |
|-------------------------------------|-------------------|--------|--------|------------|--------|---------------|--------|--------|----------------|--------|
|                                | (In thousands)    |   |
|                                |              |   |
|                                | December 31, 2016 |   |
|                           | Currency     |   | Amount |       |   | Exchange rate |   |   | Yen equivalent |   |
| Monetary assets:                    |              |   |   |       |   |          |   |   |           |   |
| Cash and cash equivalents           | KRW               |   |   | 37,594,864 |   |          |   | 0.10   |           |   |   | 3,626,013 |   |
|                                | USD               |   |   | 32,386     |   |          |   | 116.56 |           |   |   | 3,774,946 |   |
|                                | EUR               |   |   | 6,135      |   |          |   | 122.26 |           |   |   | 750,047 |   |
| Trade receivables                   | KRW               |   |   | 2,309,880  |   |          |   | 0.10   |           |   |   | 222,787 |   |
|                                | USD               |   |   | 6,221      |   |          |   | 116.56 |           |   |   | 725,130 |   |
|                                | THB               |   |   | 395,154    |   |          |   | 3.24   |           |   |   | 1,281,724 |   |
| Time deposits                       | KRW               |   |   | 5,100,000  |   |          |   | 0.10   |           |   |   | 491,893 |   |
|                                | USD               |   |   | 2,207      |   |          |   | 116.56 |           |   |   | 257,300 |   |
| Office security deposits            | KRW               |   |   | 5,623,194  |   |          |   | 0.10   |           |   |   | 542,355 |   |
| Available-for-sale financial assets | USD               |   |   | 9,084      |   |          |   | 116.56 |           |   |   | 1,058,868 |   |
| Total                               |              |   |   |       |   |          |   |   |           |   |   | 12,731,063 |   |

|                     |              |   |
|--------------------------|-------------------|--------|
|                     | December 31, 2015 |   |
|                | Currency     |   | Amount |   |   | Exchange rate |   |   | Yen  equivalent |   |
| Monetary liabilities:    |              |   |   |   |   |   |   |   |   |   |
| Trade and other payables | KRW               |   |   | 8,030,768 |   |   |   | 0.10 |   |   |   | 826,205 |   |
|                     | USD               |   |   | (5,788 | ) |   |   | 120.57 |   |   |   | (697,879 | ) |
|                     | EUR               |   |   | (9,843 | ) |   |   | 131.74 |   |   |   | (1,296,684 | ) |
| Total                    |              |   |   |   |   |   |   |   |   |   |   | (1,168,358 | ) |
|                     | (In thousands)    |   |
|--------------------------|-------------------|--------|
|                     |              |   |
|                     | December 31, 2016 |   |
|                     | Currency     |   | Amount |   |   | Exchange rate |   |   | Yen equivalent |   |
| Monetary liabilities:    |              |   |   |   |   |   |   |   |   |   |
| Trade and other payables | KRW               |   |   | (7,668,651 | ) |   |   | 0.10 |   |   |   | (739,639 | ) |
|                     | USD               |   |   | (5,254 | ) |   |   | 116.56 |   |   |   | (612,442 | ) |
|                     | EUR               |   |   | (1,726 | ) |   |   | 122.26 |   |   |   | (210,983 | ) |
| Total                    |              |   |   |   |   |   |   |   |   |   |   | (1,563,064 | ) |

----

| 25. | Financial Risk Management (continued) |
|-----|--------------------------------------------|

| (4) | Market Risk (continued) |
|-----|------------------------------|

|     |   |                                    |    |   |                                    |   |     |                                    |   |   |                                    |   |
|----------|--------|-----------------------------------------|---------|--------|-----------------------------------------|--------|----------|-----------------------------------------|--------|--------|-----------------------------------------|--------|
|     |   | (In thousands of yen)                   |    |
|     |   |                                    |    |
|     |   | December 31, 2015                       |    |
|     |   | Shareholder's equity                    |    |   | Profit or (loss) before tax             |   |
| Currency |   | Appreciationof functionalcurrency by 5% |    |   | Depreciationof functionalcurrency by 5% |   |     | Appreciationof functionalcurrency by 5% |   |   | Depreciationof functionalcurrency by 5% |   |
| EUR      |   |                                    | (45,034 | )      |                                    |   | 42,889   |                                    |   |   | (56,476                                 | )      |   |   | 53,787 |   |
| KRW      |   |                                    | 111,279 |   |                                    |   | (105,980 | )                                       |   |   | 143,735                                 |   |   |   | (136,891 | ) |
| USD      |   |                                    | 163,904 |   |                                    |   | (156,099 | )                                       |   |   | 219,417                                 |   |   |   | (208,969 | ) |
| TWD      |   |                                    | 4,067   |   |                                    |   | (3,873   | )                                       |   |   | 5,367                                   |   |   |   | (5,111 | ) |
|     |   |                                    |    |   |                                    |   |     |                                    |   |   |                                    |   |   |   |   |   |
|     |   |                                    |    |
|     |   | (In thousands of yen)                   |    |
|     |   |                                    |    |
|     |   | December 31, 2016                       |    |
|     |   | Shareholders' equity                    |    |   | Profit or (loss) before tax             |   |
| Currency |   | Appreciationof functionalcurrency by 5% |    |   | Depreciationof functionalcurrency by 5% |   |     | Appreciationof functionalcurrency by 5% |   |   | Depreciationof functionalcurrency by 5% |   |
| EUR      |   |                                    | 20,457  |   |                                    |   | (19,483  | )                                       |   |   | 26,953                                  |   |   |   | (25,670 | ) |
| KRW      |   |                                    | 157,104 |   |                                    |   | (149,622 | )                                       |   |   | 207,170                                 |   |   |   | (197,305 | ) |
| USD      |   |                                    | 195,453 |   |                                    |   | (186,145 | )                                       |   |   | 260,190                                 |   |   |   | (247,800 | ) |
| THB      |   |                                    | 47,362  |   |                                    |   | (45,107  | )                                       |   |   | 64,086                                  |   |   |   | (61,034 | ) |

|  | (b) | Interest rate risk |
|--|-----|--------------------|

|                                       |   |                  |    |   |              |   |       |       |   |   |          |   |
|--------------------------------------------|--------|-----------------------|---------|--------|-------------------|--------|------------|------------|--------|--------|---------------|--------|
|                                       |   | (In thousands of yen) |    |
|                                       |   |                  |    |   |              |   |
|                                       |   | December 31, 2015     |    |   | December 31, 2016 |   |
|                                       |   | Fixed rate            |    |   | Variable rate     |   |       | Fixed rate |   |   | Variable rate |   |
| Financial assets                           |   |                  |    |   |              |   |       |       |   |   |          |   |
| Japanese government bonds                  |   |                  | 280,490 |   |              |   | –    |       |   |   | 280,413       |   |   |   | – |   |
| Time deposits                              |   |                  | 314,194 |   |              |   | –    |       |   |   | 10,764,046    |   |   |   | – |   |
| Corporate bonds and other debt instruments |   |                  | – |   |              |   | –    |       |   |   | 4,631,817     |   |   |   | 3,011,556 |   |
| Total financial assets                     |   |                  | 594,684 |   |              |   | –    |       |   |   | 15,676,276    |   |   |   | 3,011,556 |   |
| Financial liabilities                      |   |                  |    |   |              |   |       |       |   |   |          |   |   |   |   |   |
| Short-term borrowings                      |   |                  | 464,553 |   |              |   | 42,000,000 |       |   |   | 258,000       |   |   |   | 21,667,000 |   |
| Corporate bonds                            |   |                  | – |   |              |   | 510,000    |       |   |   | –       |   |   |   | – |   |
| Total financial liabilities                |   |                  | 464,553 |   |              |   | 42,510,000 |       |   |   | 258,000       |   |   |   | 21,667,000 |   |

----

| 25. | Financial Risk Management (continued) |
|-----|--------------------------------------------|

| (4) | Market Risk (continued) |
|-----|------------------------------|

|              |                                 |   |                                            |   |                                 |   |               |
|-------------------|--------------------------------------|--------|-------------------------------------------------|--------|--------------------------------------|--------|--------------------------------------------------------------------------------|
|              | (In thousands of yen)                |
|              |                  |
|              | December 31, 2015                    |
|              | Shareholder's equity                 |   | Profit or (loss) before tax |
|              | Increase of 50basis points |   | Decrease of 50basis points            |   | Increase of 50basis points |   | Decrease of 50basis points                                           |
| Interest expenses | (39,975)                             |   | 15,910                                          |   | (59,717)                             |   | 23,768                                                                    |
|              |                                 |   |                                  |   |                                  |   |              |
|-------------------|--------------------------------------|--------|---------------------------------------|--------|---------------------------------------|--------|---------------------------------------|
|              | (In thousands of yen)                |
|              |                            |
|              | December 31, 2016                    |
|              | Shareholders' equity                 |   | Profit or (loss) before tax           |
|              | Increase of 50basis points |   | Decrease  of 50basis points |   | Increase  of 50basis points |   | Decrease  of 50basis points |
| Interest expenses | (74,004)                             |   | 11,044                                |   | (108,335)                             |   | 16,167                                |

| (5) | Capital management |
|-----|--------------------|

|                       |   |                  |       |   |             |   |
|----------------------------|--------|-----------------------|------------|--------|------------------|--------|
|                       |   | (In thousands of yen) |       |
|                       |   |                  |       |   |             |   |
|                       |   | December 31,2015      |       |   | December 31,2016 |   |
| Short-term borrowings      |   |                  | 42,464,553 |   |             |   | 21,925,000 |   |
| Corporate bonds            |   |                  | 510,000    |   |             |   | - |   |
| Total                      |   |                  | 42,974,553 |   |             |   | 21,925,000 |   |
| Total shareholders' equity |   |                  | 17,532,885 |   |             |   | 161,022,792 |   |

----

| 26. | Fair Value Measurements |
|-----|-------------------------|

| (1) | Fair value hierarchy |
|-----|----------------------|

|  | – | Level 1 inputs are quoted prices in active markets for identical assets or liabilities. |
|--|---------|-----------------------------------------------------------------------------------------|

|  | – | Level 2 inputs are quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | – | Level 3 inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable, which reflect the reporting entity's own assumptions that market participants would use in establishing a price. |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Fair value measurements by fair value hierarchy |
|-----|-------------------------------------------------|

|                                                     |   |                  |      |   |    |   |    |    |   |
|----------------------------------------------------------|--------|-----------------------|-----------|--------|---------|--------|---------|---------|--------|
|                                                     |   | (In thousands of yen) |      |
|                                                     |   |                  |      |   |    |   |    |    |   |
| December 31, 2015                                        |   | Level 1               |      |   | Level 2 |   |    | Level 3 |   |   | Total |   |
| Financial asset at fair value through profit or loss     |   |                  |      |   |    |   |    |    |   |   |   |   |
| Conversion right and redemption right of preferred stock |   |                  | –   |   |    |   | – |    |   |   | 871,309 |   |   |   | 871,309 |   |
| Available-for-sale financial assets                      |   |                  | –   |   |    |   |    |    |   |   |   |   |   |   |   |   |
| Listed equity securities                                 |   |                  | 2,215,330 |   |    |   | – |    |   |   | – |   |   |   | 2,215,330 |   |
| Private equity investments                               |   |                  | –   |   |    |   | – |    |   |   | 13,648,213 |   |   |   | 13,648,213 |   |
| Total                                                    |   |                  | 2,215,330 |   |    |   | – |    |   |   | 14,519,522 |   |   |   | 16,734,852 |   |
|                                                     |   |                  |      |   |    |   |    |    |   |   |   |   |   |   |   |   |
|                                                     |   |                  |      |
|                                                     |   | (In thousands of yen) |      |
|                                                     |   |                  |      |   |    |   |    |    |   |   |   |   |   |   |   |   |
| December 31, 2016                                        |   | Level 1               |      |   | Level 2 |   |    | Level 3 |   |   | Total |   |
| Financial asset at fair value through profit or loss     |   |                  |      |   |    |   |    |    |   |   |   |   |   |   |   |   |
| Conversion right and redemption right of preferred stock |   |                  | –   |   |    |   | – |    |   |   | 324,876 |   |   |   | 324,876 |   |
| Available-for-sale financial assets                      |   |                  |      |   |    |   |    |    |   |   |   |   |   |   |   |   |
| Listed equity securities                                 |   |                  | 2,345,937 |   |    |   | – |    |   |   | – |   |   |   | 2,345,937 |   |
| Private equity and other financial instruments           |   |                  | –   |   |    |   | – |    |   |   | 12,795,385 |   |   |   | 12,795,385 |   |
| Total                                                    |   |                  | 2,345,937 |   |    |   | – |    |   |   | 13,120,261 |   |   |   | 15,466,198 |   |

----

| 26. | Fair Value Measurements (continued) |
|-----|------------------------------------------|

| (2) | Fair value measurements by fair value hierarchy (continued) |
|-----|------------------------------------------------------------------|

|                                                       |   |                  |    |   |    |   |      |    |   |   |    |   |
|------------------------------------------------------------|--------|-----------------------|---------|--------|---------|--------|-----------|---------|--------|--------|---------|--------|
|                                                       |   | (In thousands of yen) |    |
|                                                       |   |                  |    |   |    |   |      |    |   |   |    |   |
| December 31, 2015                                     |   | Level 1               |    |   | Level 2 |   |      | Level 3 |   |   | Total   |   |
| Held-to-maturity investments                               |   |                  |    |   |    |   |      |    |   |   |    |   |
| Japanese government bonds                                  |   |                  | – |   |    |   | 294,595   |    |   |   | – |   |   |   | 294,595 |   |
| Loans and receivables                                      |   |                  |    |   |    |   |      |    |   |   |    |   |   |   |   |   |
| Office security deposits                                   |   |                  | – |   |    |   | 3,661,179 |    |   |   | – |   |   |   | 3,661,179 |   |
| Total                                                      |   |                  | – |   |    |   | 3,955,774 |    |   |   | – |   |   |   | 3,955,774 |   |
| Financial liabilities measured at amortized cost           |   |                  |    |   |    |   |      |    |   |   |    |   |   |   |   |   |
| Office security deposits received under sublease agreement |   |                  | – |   |    |   | 7,502     |    |   |   | – |   |   |   | 7,502 |   |
| Total                                                      |   |                  | – |   |    |   | 7,502     |    |   |   | – |   |   |   | 7,502 |   |
|                                                                     |   |                  |    |   |    |   |       |    |   |   |    |   |
|--------------------------------------------------------------------------|--------|-----------------------|---------|--------|---------|--------|------------|---------|--------|--------|---------|--------|
|                                                                     |   | (In thousands of yen) |    |
|                                                                     |   |                  |    |   |    |   |       |    |   |   |    |   |
| December 31, 2016                                                        |   | Level 1               |    |   | Level 2 |   |       | Level 3 |   |   | Total   |   |
| Held-to-maturity investments                                             |   |                  |    |   |    |   |       |    |   |   |    |   |
| Japanese government bonds                                                |   |                  | – |   |    |   | 293,852    |    |   |   | – |   |   |   | 293,852 |   |
| Loans and receivables                                                    |   |                  |    |   |    |   |       |    |   |   |    |   |   |   |   |   |
|      Time deposits                              |   |                  | – |   |    |   | 10,000,000 |    |   |   | – |   |   |   | 10,000,000 |   |
|      Corporate bonds and other debt instruments |   |                  | – |   |    |   | 2,631,817  |    |   |   | – |   |   |   | 2,631,817 |   |
| Office security deposits                                                 |   |                  | – |   |    |   | 4,738,514  |    |   |   | – |   |   |   | 4,738,514 |   |
| Total                                                                    |   |                  | – |   |    |   | 17,664,183 |    |   |   | – |   |   |   | 17,664,183 |   |

----

| 26. | Fair Value Measurements (continued) |
|-----|------------------------------------------|

| (3) | Reconciliations from the opening balance to the closing balance of financial instruments categorized within Level 3 are as follows: |
|-----|-------------------------------------------------------------------------------------------------------------------------------------|

|                                      |   |                       |       |   |                                                     |   |    |                                         |   |   |                                                     |   |
|-------------------------------------------|--------|----------------------------|------------|--------|----------------------------------------------------------|--------|---------|----------------------------------------------|--------|--------|----------------------------------------------------------|--------|
|                                      |   | (In thousands of yen)      |       |
|                                      |   |                       |       |   |                                                     |   |
|                                      |   | 2015                       |       |   | 2016                                                     |   |
|                                      |   | Private equity investments |       |   | Conversion right and redemption right of preferred stock |   |    | Private equityand otherfinancial instruments |   |   | Conversion right and redemption right of preferred stock |   |
| Fair value at the beginning of the year   |   |                       | 7,302,439  |   |                                                     |   | 816,605 |                                         |   |   | 13,648,213                                               |   |   |   | 871,309 |   |
| Total gain for the year:                  |   |                       |       |   |                                                     |   |    |                                         |   |   |                                                     |   |   |   |   |   |
| Included in profit or loss(1)             |   |                       | (184,928   | )      |                                                     |   | 110,507 |                                         |   |   | (28,623                                                  | )      |   |   | (656,109 | ) |
| Included in other comprehensive income(2) |   |                       | 6,506,889  |   |                                                     |   | – |                                         |   |   | (2,140,033                                               | )      |   |   | – |   |
| Comprehensive income                      |   |                       | 6,321,961  |   |                                                     |   | 110,507 |                                         |   |   | (2,168,656                                               | )      |   |   | (656,109 | ) |
| Purchases                                 |   |                       | 416,628    |   |                                                     |   | – |                                         |   |   | 2,053,864                                                |   |   |   | 197,474 |   |
| Return of capital                         |   |                       | (37,887    | )      |                                                     |   | – |                                         |   |   | (8,363                                                   | )      |   |   | – |   |
| Effect of exchange rate changes           |   |                       | (354,928   | )      |                                                     |   | (55,803 | )                                            |   |   | (729,673                                                 | )      |   |   | (87,798 | ) |
| Fair value at the end of the year         |   |                       | 13,648,213 |   |                                                     |   | 871,309 |                                         |   |   | 12,795,385                                               |   |   |   | 324,876 |   |

| (1)       | This amount is included in "Other non-operating income" or "Other non-operating expenses" in the Group's Consolidated Statements of Profit or Loss.      |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)  | This amount is included in "Net changes in fair value" of available-for-sale financial assets in the Group's Consolidated Statements of Comprehensive Income. |

| (4) | Valuation techniques and inputs |
|-----|---------------------------------|

|                          |   |                                                       |   |       |   |                    |
|-------------------------------|--------|------------------------------------------------------------|--------|------------|--------|-------------------------|
| Valuation technique           |   | Significant unobservable input                             |   |  2015 |   |  2016              |
| Binomial option pricing model |   | Comparable listed companies' average historical volatility |   | 63.6%      |   | 13.6% - 39.6% |
|                          |   | Discount rate                                              |   | 1.9%       |   | 1.6%                    |

----

| 26. | Fair Value Measurements (continued) |
|-----|------------------------------------------|

| (4) | Valuation techniques and inputs (continued) |
|-----|--------------------------------------------------|

|                                                |   |                                                       |   |        |   |        |
|-----------------------------------------------------|--------|------------------------------------------------------------|--------|-------------|--------|-------------|
| Valuation technique                                 |   | Significantunobservable input                              |   | 2015        |   | 2016        |
| Market approach – market comparable companies |   | EBITDA multiple                                            |   | 11.1-16.0   |   | 10.4        |
|                                                |   | EBIT multiple                                              |   | 11.4        |   | –     |
|                                                |   | Revenue multiple                                           |   | 1.5-4.7     |   | 1.7-3.6     |
|                                                |   | Liquidity discount                                         |   | 30%         |   | 30%         |
| Option pricing model                                |   | Comparable listed companies' average historical volatility |   | 64.5%-81.5% |   | 39.6%-78.9% |
|                                                |   | Discount rate                                              |   | (0.0%)-1.9% |   | (0.1%)-1.6% |
| Discount cash flow model                            |   | Discount rate                                              |   | –     |   | 16.8%       |

----

| 26. | Fair Value Measurements (continued) |
|-----|------------------------------------------|

| (4) | Valuation techniques and inputs (continued) |
|-----|--------------------------------------------------|

| 27. | Share-Based Payments |
|-----|----------------------|

----

| 27. | Share-Based Payments (continued) |
|-----|---------------------------------------|

| (1) | Movements during the years ended December 31, 2014, 2015 and 2016 |
|-----|------------------------------------------------------------------------|

|                            |   |              |       |   |                |   |
|---------------------------------|--------|-------------------|------------|--------|---------------------|--------|
|                            |   | 2014              |       |
|                            |   | Number(shares)(1) |       |   | WAEP (yenper share) |   |
| Outstanding at January 1   |   |              | 17,430,500 |   |                |   | 344 |   |
| Granted during the year         |   |              | 2,926,000  |   |                |   | 1,320 |   |
| Forfeited during the year       |   |              | (139,000   | )      |                |   | 944 |   |
| Exercised during the year       |   |              | –    |   |                |   | – |   |
| Expired during the year         |   |              | –    |   |                |   | – |   |
| Outstanding at December 31 |   |              | 20,217,500 |   |                |   | 481 |   |
| Exercisable at December 31 |   |              | 14,000,000 |   |                |   | 344 |   |
|                                                        |   | 2015                 |        |
|-------------------------------------------------------------|--------|----------------------|-------------|
|                                                        |   | Common Stock Options |        |   | Class A Stock Options |   |
|                                                        |   | Number(shares)(1)    |        |   | WAEP(yen per share) |   |   | Number(shares)(1) |   |   | WAEP(yen per share) |   |
| Outstanding at January 1                                    |   |                 | 20,217,500  |   |   |   | 481 |   |   |   | – |   |   |   | – |   |
| Granted during the period                                   |   |                 | 5,773,500   |   |   |   | 1,320 |   |   |   | – |   |   |   | – |   |
| Forfeited during the period                                 |   |                 | (306,500    | ) |   |   | 1,178 |   |   |   | – |   |   |   | – |   |
| Exercised during the period                                 |   |                 | –     |   |   |   | – |   |   |   | – |   |   |   | – |   |
| Expired during the period                                   |   |                 | –     |   |   |   | – |   |   |   | – |   |   |   | – |   |
| Conversion of Common Stock Options to Class A Stock Options |   |                 | (15,836,500 | ) |   |   | 558 |   |   |   | 15,836,500 |   |   |   | 558 |   |
| Outstanding at December 31                                  |   |                 | 9,848,000   |   |   |   | 827 |   |   |   | 15,836,500 |   |   |   | 558 |   |
| Exercisable at December 31                                  |   |                 | 4,970,500   |   |   |   | 344 |   |   |   | 12,362,000 |   |   |   | 344 |   |
|                                                        |   | 2016                 |       |
|-------------------------------------------------------------|--------|----------------------|------------|
|                                                        |   | Common Stock Options |       |   | Class A Stock Options |   |
|                                                        |   | Number(shares)(1)    |       |   | WAEP(yen per share) |   |   | Number(shares)(1) |   |   | WAEP(yen per share) |   |
| Outstanding at January 1                                    |   |                 | 9,848,000  |   |   |   | 827 |   |   |   | 15,836,500 |   |   |   | 558 |   |
| Granted during the period                                   |   |                 | –    |   |   |   | – |   |   |   | – |   |   |   | – |   |
| Forfeited during the period                                 |   |                 | (239,500   | ) |   |   | 1,137 |   |   |   | – |   |   |   | – |   |
| Exercised during the period(2)                              |   |                 | (2,533,500 | ) |   |   | 691 |   |   |   | – |   |   |   | – |   |
| Expired during the period                                   |   |                 | –    |   |   |   | – |   |   |   | – |   |   |   | – |   |
| Conversion of Class A Stock Options to Common Stock Options |   |                 | 15,836,500 |   |   |   | 558 |   |   |   | (15,836,500 | ) |   |   | 558 |   |
| Outstanding at December 31                                  |   |                 | 22,911,500 |   |   |   | 653 |   |   |   | – |   |   |   | – |   |
| Exercisable at December 31                                  |   |                 | 17,321,500 |   |   |   | 438 |   |   |   | – |   |   |   | – |   |

----

| 27. | Share-Based Payments (continued) |
|-----|---------------------------------------|

| (2) | The following tables list the inputs to the models used for deriving the fair value of the stock options granted for the years ended December 31, 2014, 2015 and 2016 |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                |   |          |   |   |          |   |   |          |   |
|-----------------------------------------------------|--------|---------------|--------|--------|---------------|--------|--------|---------------|--------|
|                                                |   | Grant dates   |   |
|                                                |   | 2014          |   |
|                                                |   | February 7    |   |   | August 8      |   |   | October 31    |   |
| Dividend yield                                      |   |          | 0.0    | %      |          |   | 0.0    | %             |   |   | 0.0 | % |
| Expected volatility                                 |   |          | 58     | %      |          |   | 53     | %             |   |   | 52 | % |
| Risk-free interest rate                             |   |          | 0.2    | %      |          |   | 0.2    | %             |   |   | 0.2 | % |
| Expected life of stock options (years)              |   |          | 6      |   |          |   | 6      |          |   |   | 6 |   |
| Exercise price (yen)                                |   |          | 1,320  |   |          |   | 1,320  |          |   |   | 1,320 |   |
| Fair value per common share at the grant date (yen) |   |          | 1,161  |   |          |   | 3,280  |          |   |   | 3,297 |   |
| Model used                                          |   | Black-Scholes |   |   | Black-Scholes |   |   | Black-Scholes |   |
|                                                |   |          |   |
|-----------------------------------------------------|--------|---------------|--------|
|                                                |   | Grant dates   |   |
|                                                |   | 2015          |   |
|                                                |   | February 4    |   |
| Dividend yield                                      |   |          | 0.0    | % |
| Expected volatility                                 |   |          | 56     | % |
| Risk-free interest rate                             |   |          | 0.0    | % |
| Expected life of stock options (years)              |   |          | 6      |   |
| Exercise price (yen)                                |   |          | 1,320  |   |
| Fair value per common share at the grant date (yen) |   |          | 4,225  |   |
| Model used                                          |   | Black-Scholes |   |

----

| 27. | Share-Based Payments (continued) |
|-----|---------------------------------------|

| (2) | The following tables list the inputs to the models used for deriving the fair value of the stock options granted for the years ended December 31, 2014, 2015 and 2016 (continued) |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The expenses recognized in connection with share-based payments during the years ended December 31, 2014, 2015 and 2016 are shown in the following table: |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                        |   |                  |      |   |   |   |       |   |   |
|-----------------------------------------------------------------------------|--------|-----------------------|-----------|--------|--------|--------|------------|--------|--------|
|                                                                        |   | (In thousands of yen) |      |
|                                                                        |   |                  |      |   |   |   |       |   |   |
|                                                                        |   | 2014                  |      |   | 2015   |   |       | 2016   |   |
| Total expenses arising from equity-settled share-based payment transactions |   |                  | 2,974,692 |   |   |   | 11,212,630 |   |   |   | 9,518,577 |   |

| 28. | Related Party Transactions |
|-----|----------------------------|

| (1) | Significant related party transactions during the year ended December 31, 2014 are as follows: |
|-----|-----------------------------------------------------------------------------------------------------|

|                         |   |                                            |   |                                          |   |              |      |
|------------------------------|--------|-------------------------------------------------|--------|-----------------------------------------------|--------|-------------------|-----------|
|                         |   | (In thousands of yen)                           |   |
| Relationship                 |   | Name                                            |   | Transaction                                   |   | Transactionamount |      |
| Parent company               |   | NAVER                                           |   | Guarantee(1)                                  |   |              | –   |   |
| Parent company               |   | NAVER                                           |   | Advertising service(2)                   |   |              | 20,974    |   |
| Parent company               |   | NAVER                                           |   | LINE Plus Capital Reduction(3) |   |              | 8,288,000 |   |
| Subsidiary of parent company |   | NAVER Business Platform Corp.(4) |   | Operating expenses                            |   |              | 4,443,055 |   |

| (1)  | NAVER provided a guarantee for the Group related to the outstanding borrowings of the Group of 4,000,000 thousand yen in prior year. Subsequently, in the third quarter of 2014 NAVER was released from the guarantee arrangement. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)  | LINE Plus and NAVER entered into an agreement for exchange of services in which LINE Plus provides advertising services via the LINE platform and the right to use certain LINE characters in exchange for NAVER's advertising services for LINE Plus via NAVER's web portal. The Group incurred advertising expenses of 20,974 thousand yen in connection with the advertising services provided by NAVER for the year ended December 31, 2014. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)  | Pursuant to the approval of the LINE Plus Capital Reduction, LINE Plus bought back NAVER its entire capital contribution amount of 8,288,000 thousand yen on September 5, 2014. Refer to Note 3(1) Significant Accounting Policies for further details. |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)  | This subsidiary of NAVER provided data hosting services to the Group. |
|-----------|-----------------------------------------------------------------------|

----

| (2) | Significant related party transactions and outstanding balances with related parties during the year ended December 31, 2015 are as follows: |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------|

|                         |   |                                            |   |                        |   |                  |      |   |                                       |   |
|------------------------------|--------|-------------------------------------------------|--------|-----------------------------|--------|-----------------------|-----------|--------|--------------------------------------------|--------|
|                         |   |                                            |   |              |   | (In thousands of yen) |      |
| Relationship                 |   | Name                                            |   | Transaction                 |   | Transactionamount     |      |   | Outstandingreceivable/(payable)balances(3) |   |
| Parent company               |   | NAVER                                           |   | Advertising service(1) |   |                  | 1,126,620 |   |                                       |   | 159,964 |   |
| Subsidiary of parent company |   | NAVER Business Platform Corp.(2) |   | Operating expenses     |   |                  | 8,139,487 |   |                                       |   | (942,488 | ) |

| (1)  | LINE Plus and NAVER entered into an agreement for exchange of services in which LINE Plus provides advertising services via the LINE platform and the right to use certain LINE characters in exchange for NAVER's advertising services for LINE Plus via NAVER's web portal. The Group generated advertising revenues of 1,126,620 thousand yen in connection with the advertising services provided to NAVER for the year ended December 31, 2015. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)  | This subsidiary of NAVER provided IT infrastructure services and related development services to the Group. |
|-----------|-------------------------------------------------------------------------------------------------------------|

| (3)  | The receivable and payable amounts outstanding are unsecured and will be settled in cash. |
|-----------|-------------------------------------------------------------------------------------------|

| (3) | Significant related party transactions and outstanding balances with related parties during the year ended December 31, 2016 are as follows: |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------|

|                         |   |                                            |   |                        |   |                  |      |   |                                       |   |
|------------------------------|--------|-------------------------------------------------|--------|-----------------------------|--------|-----------------------|-----------|--------|--------------------------------------------|--------|
|                         |   |                                            |   |              |   | (In thousands of yen) |      |
| Relationship                 |   | Name                                            |   | Transaction                 |   | Transactionamount     |      |   | Outstandingreceivable/(payable)balances(3) |   |
| Parent company               |   | NAVER                                           |   | Advertising service(1) |   |                  | 331,630   |   |                                       |   | 67,362 |   |
| Subsidiary of parent company |   | NAVER Business Platform Corp.(2) |   | Operating expenses     |   |                  | 7,457,937 |   |                                       |   | (902,411 | ) |

| (1)  | LINE Plus and NAVER entered into an agreement for exchange of services in which LINE Plus provides advertising services via the LINE platform and the right to use certain LINE characters in exchange for NAVER's advertising services for LINE Plus via NAVER's web portal. The Group generated advertising revenues of 331,630 thousand yen in connection with the advertising services provided to NAVER for the year ended December 31, 2016. |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)  | This subsidiary of NAVER provided IT infrastructure services and related development services to the Group. |
|-----------|-------------------------------------------------------------------------------------------------------------|

| (3)  | The receivable and payable amounts outstanding are unsecured and will be settled in cash. |
|-----------|-------------------------------------------------------------------------------------------|

| (4) | The total compensation of key management personnel for the years ended December 31, 2014, 2015 and 2016, was as follows: |
|-----|-------------------------------------------------------------------------------------------------------------------------------|

|                         |   |                  |    |   |   |   |      |   |   |
|------------------------------|--------|-----------------------|---------|--------|--------|--------|-----------|--------|--------|
|                         |   | (In thousands of yen) |    |
|                         |   |                  |    |   |   |   |      |   |   |
|                         |   | 2014                  |    |   | 2015   |   |      | 2016   |   |
| Salaries (including bonuses) |   |                  | 285,655 |   |   |   | 315,587   |   |   |   | 459,255 |   |
| Share-based payments(1)      |   |                  | 673,070 |   |   |   | 5,285,667 |   |   |   | 5,713,725 |   |
| Total                        |   |                  | 958,725 |   |   |   | 5,601,254 |   |   |   | 6,172,980 |   |

| (1)  | Refer to Note 27 Share-Based Payments for further details. |
|-----------|------------------------------------------------------------|

| 29. | Business Combinations |
|-----|-----------------------|

----

| 29. | Business Combinations (continued) |
|-----|----------------------------------------|

|                                        |   |                                |    |
|---------------------------------------------|--------|-------------------------------------|---------|
| (In thousands of yen)                       |
|                                        |   | Fair value recognizedon acquisition |    |
| Assets                                      |   |                                |    |
| Cash and cash equivalents                   |   |                                | 608     |   |
| Trade receivables, net                      |   |                                | 398     |   |
| Property and equipment                      |   |                                | 912     |   |
| Other intangible assets                     |   |                                | 240     |   |
| Office security deposits                    |   |                                | 4,020   |   |
|                                        |   |                                | 6,178   |   |
|                                        |   |                                |    |   |
| Liabilities                                 |   |                                |    |   |
| Trade and other payables                    |   |                                | 17      |   |
| Other financial liabilities, current        |   |                                | 172     |   |
| Short-term borrowings                       |   |                                | 5,025   |   |
| Other liabilities                           |   |                                | 210     |   |
|                                        |   |                                | 5,424   |   |
|                                        |   |                                |    |   |
| Total identifiable net assets at fair value |   |                                | 754     |   |
| Goodwill                                    |   |                                | 149,997 |   |
| Total consideration                         |   |                                | 150,751 |   |

----

| 29. | Business Combinations (continued) |
|-----|----------------------------------------|

|                                                                             |   |   |     |
|----------------------------------------------------------------------------------|--------|--------|----------|
| (In thousands of yen)                                                            |
| Analysis of cash flows on acquisition:                                           |   |   |     |
| Total consideration related to the acquisition                                   |   |   | (150,751 | ) |
| Net cash acquired with the subsidiary                                            |   |   | 608      |   |
| Net cash flows on acquisition (included in cash flows from investing activities) |   |   | (150,143 | ) |
|                                             |   |                                |      |
|--------------------------------------------------|--------|-------------------------------------|-----------|
| (In thousands of yen)                       |
|                                             |   |                                |      |
|                                             |   | Fair value recognizedon acquisition |      |
| Assets                                           |   |                                |      |
| Property and equipment                           |   |                                | 39,320    |   |
| Intangible assets                                |   |                                |      |   |
| Technology                                       |   |                                | 845,121   |   |
| Music rights                                     |   |                                | 543,292   |   |
| Trademarks                                       |   |                                | 156,951   |   |
| Customer relationships                           |   |                                | 108,658   |   |
| Other intangible assets                          |   |                                | 3,665     |   |
|                                             |   |                                | 1,697,007 |   |
| Liabilities                                      |   |                                |      |   |
| Trade and other payables                         |   |                                | 1,544,410 |   |
| Other liabilities                                |   |                                | 550,774   |   |
|                                             |   |                                | 2,095,184 |   |
| Total identifiable net liabilities at fair value |   |                                | (398,177  | ) |
| Goodwill                                         |   |                                | 2,697,621 |   |
| Total consideration                              |   |                                | 2,299,444 |   |

----

| 29. | Business Combinations (continued) |
|-----|----------------------------------------|

----

|                                        |   |                               |    |
|---------------------------------------------|--------|------------------------------------|---------|
| (In thousands of yen)                       |
|                                        |   | Fair valuerecognizedon acquisition |    |
| Assets                                      |   |                               |    |
| Cash and cash equivalents                   |   |                               | 86,551  |   |
| Trade receivables, net                      |   |                               | 83,161  |   |
| Intangible assets                           |   |                               |    |   |
| Customer relationships                      |   |                               | 401,000 |   |
| Software                                    |   |                               | 26,000  |   |
| Deferred tax assets                         |   |                               | 88,453  |   |
| Other assets                                |   |                               | 1,221   |   |
|                                        |   |                               | 686,386 |   |
| Liabilities                                 |   |                               |    |   |
| Trade and other payables                    |   |                               | 77,695  |   |
| Other financial liabilities, current        |   |                               | 50,000  |   |
| Other financial liabilities, non-current    |   |                               | 210,141 |   |
| Deferred tax liabilities                    |   |                               | 148,639 |   |
| Other liabilities                           |   |                               | 13,266  |   |
|                                        |   |                               | 499,741 |   |
| Total identifiable net assets at fair value |   |                               | 186,645 |   |
| Non-controlling interest                    |   |                               | (92,401 | ) |
| Goodwill                                    |   |                               | 415,731 |   |
| Total consideration                         |   |                               | 509,975 |   |

----

| 29. | Business Combinations (continued) |
|-----|-----------------------------------|

|                                                                             |   |   |     |
|----------------------------------------------------------------------------------|--------|--------|----------|
| (In thousands of yen)                                                       |
| Analysis of cash flows on acquisition:                                           |   |   |     |
| Total consideration related to the acquisition                                   |   |   | (509,975 | ) |
| Net cash acquired with the subsidiary                                            |   |   | 86,551   |   |
| Net cash flows on acquisition (included in cash flows from investing activities) |   |   | (423,424 | ) |

----

| 30. | Principal Subsidiaries |
|-----|------------------------|

|                                                         |   |                                            |   |                                                 |   |                    |    |   |             |   |
|--------------------------------------------------------------|--------|-------------------------------------------------|--------|------------------------------------------------------|--------|-------------------------|---------|--------|------------------|--------|
|                                                         |   |                                            |   |                                       |   | Percentage of ownership |    |
| Name                                                         |   | Primary business activities                     |   | Country of incorporation                             |   | December 31,2015        |    |   | December 31,2016 |   |
| Bonsai Garage Corporation(1)                            |   | Fashion                                         |   | Japan                                                |   |                    | 100.0   | %      |             |   | – |   |
| LINE Book Distribution Corporation                           |   | Mobile Contents                                 |   | Japan                                                |   |                    | 52.0    | %      |             |   | 52.0 | % |
| LINE Business Partners Corporation                           |   | Online advertisement                            |   | Japan                                                |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE Fukuoka Corp.                                           |   | Management support                              |   | Japan                                                |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE GAME Global Gateway, L.P.                               |   | Investment                                      |   | Japan                                                |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE Life Global Gateway, L.P.                               |   | Investment                                      |   | Japan                                                |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE Mobile Corporation(2)                                   |   | Mobile virtual network operator                 |   | Japan                                                |   |                    | – |   |             |   | 100.0 | % |
| LINE Pay Corporation                                         |   | Software Development and mobile payment service |   | Japan                                                |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE Ventures Corporation                                    |   | Investment                                      |   | Japan                                                |   |                    | 100.0   | %      |             |   | 100.0 | % |
| M.T. Burn Corporation(3)                                     |   | Online advertisement                            |   | Japan                                                |   |                    | – |   |             |   | 50.5 | % |
| WebPay Holdings, Inc.                                        |   | Management                                      |   | Japan                                                |   |                    | 100.0   | %      |             |   | 100.0 | % |
| WebPay, Inc.                                                 |   | Payment service                                 |   | Japan                                                |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE Digital Technology (Shanghai)   Limited. |   | Social Media                                    |   | China                                                |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE Digital Technologies India Private Limited              |   | Mobile advertising                              |   | India                                                |   |                    | 100.0   | %      |             |   | 100.0 | % |
| PT. LINE PLUS INDONESIA(4)                                   |   | Marketing                                       |   | Indonesia                                            |   |                    | – |   |             |   | 99.8 | % |
| LINE Biz Plus Corporation                                    |   | Mobile payment service                          |   | Korea                                                |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE C&I Corporation                                     |   | Investment                                      |   | Korea                                                |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE Friends Corporation                                     |   | Character goods business                        |   | Korea                                                |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE PLAY Corporation                                        |   | Content sales                                   |   | Korea                                                |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE Plus Corporation                                        |   | Global marketing                                |   | Korea                                                |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE BIZ+ PTE. LTD                                           |   | Software Development and mobile payment service |   | Singapore                                            |   |                    | 100.0   | %      |             |   | 100.0 | % |
| Line Biz+ Taiwan Limited                                     |   | Payment service                                 |   | Taiwan                                               |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE Taiwan Limited                                          |   | Mobile Service                                  |   | Taiwan                                               |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE BIZ Plus Ltd.(5)                                        |   | Payment service                                 |   | Thailand                                             |   |                    | 100.0   | %      |             |   | 50.0 | % |
| LINE Company (Thailand) Limited(6)                           |   | e-commerce                                      |   | Thailand                                             |   |                    | 50.0    | %      |             |   | 50.0 | % |
| MixRadio Limited                                             |   | Music distribution                              |   | United Kingdom of Great Britain and Northern Ireland |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE Euro-Americas Corp.                                     |   | Global marketing                                |   | United States of America                             |   |                    | 100.0   | %      |             |   | 100.0 | % |
| LINE Vietnam Co., Ltd                                        |   | Online advertisement                            |   | Vietnam                                              |   |                    | 95.0    | %      |             |   | 95.0 | % |

| (1)    | Bonsai Garage Corporation was sold to a third party in February 2016.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (2)    | The Company established LMN Corporation in February 2016. LMN Corporation was renamed to LINE Mobile Corporation in June 2016.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (3)    | The Group acquired 50.5% of the voting shares of M.T. Burn Inc. in February 2016. Refer to Note 29 Business Combinations for further details.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (4)    | LINE Plus established PT. LINE PLUS INDONESIA in January 2016.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (5)    | LINE BIZ Plus Ltd. was acquired in February 2015 by LINE Company (Thailand) Limited and LINE BIZ+ PTE. LTD. As of December 31, 2015, while there was a non-controlling interest held by an unrelated third party in LINE BIZ Plus Ltd., the Group's percentage of ownership was presented as 100.0% due to rounding. On April 25, 2016 LINE BIZ Plus Ltd. issued new shares to a third party, resulting in a decrease of the Group's ownership from 100.0% to 50.0%. As a result of the transaction, LINE BIZ Plus Ltd. was renamed to RABBIT-LINE PAY COMPANY LIMITED. Refer to Note 20 Supplemental Cash Flow Information and Note 32 Investments in Associates and Joint Ventures for further details. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (6)    | The Group's ownership in LINE Company (Thailand) Limited is 50.0% but it holds 90.9% of the voting rights. Accordingly, LINE Company (Thailand) Limited is included in the scope of consolidation for the Group's consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

| 31. | Proportion of Equity Interest Held by Non-controlling Interests |
|-----|-----------------------------------------------------------------|

|      |   |                                            |   |             |    |
|-----------|--------|-------------------------------------------------|--------|------------------|---------|
|      |   |                                            |   |             |    |
| Name      |   | Country of incorporationand operation |   | December 31,2014 |    |
| LINE Plus |   | Korea                                           |   |             | – |   |

----

| 31. | Proportion of Equity Interest Held by Non-controlling Interests (continued) |
|-----|----------------------------------------------------------------------------------|

|                  |   |   |
|-----------------------|--------|--------|
| (In thousands of yen) |   |
|                  |   |   |
| Name                  | 2014   |   |
| LINE Plus             |   |   | (2,092,307 | ) |
|                                  |   |      |       |
|---------------------------------------|--------|-----------|------------|
| (In thousands of yen)                 |   |
|                                  |   |      |       |
|                                  |   | LINE Plus |       |
|                                  |   | 2014      |       |
| Revenues                              |   |      | 29,475,352 |   |
| Loss for the year                     |   |      | (8,839,503 | ) |
| Total comprehensive loss for the year |   |      | (9,547,419 | ) |

----

| 31. | Proportion of Equity Interest Held by Non-controlling Interests (continued) |
|-----|----------------------------------------------------------------------------------|

| (In thousands of yen)                                             |   |
|-------------------------------------------------------------------|--------|
|                                                              |   |   |   |
|                                                              |   | LINE Plus |   |
|                                                              |   | 2014 |   |
| Operating                                                         |   |   | (5,990,189 | ) |
| Investing                                                         |   |   | (2,787,069 | ) |
| Financing                                                         |   |   | 9,163,176 |   |
| Net increase in cash and cash equivalents                         |   |   | 385,918 |   |
| Cash and cash equivalents at the beginning of year                |   |   | 5,722,601 |   |
| Effect of exchange rate fluctuations on cash and cash equivalents |   |   | 646,162 |   |
| Cash and cash equivalents at the end of year                      |   |   | 6,754,681 |   |

| 32. | Investments in Associates and Joint Ventures |
|-----|----------------------------------------------|

|  | (1) | Details of investments in the Group's significant associates and joint ventures are as follows: |
|--|-----|-------------------------------------------------------------------------------------------------|

|                                       |                      |                   |                         |   |              |    |   | (In thousands of yen)  |   |
|--------------------------------------------|---------------------------|------------------------|------------------------------|--------|-------------------|---------|--------|------------------------|--------|
|                                       | Primarybusinessactivities |                   | Country ofincorporation      |   | December 31, 2015 |    |   | December 31, 2016      |   |
|                                       |                      | Percentageof ownership |                         |   | Carryingamount    |    |   | Percentageof ownership |   |   | Carryingamount |   |
| Associates                                 |                      |                   |                         |   |              |    |   |                   |   |   |   |   |   |   |   |
| LINE Project Production Partnership        | Animation production      |                   | Japan                        |   |              | 50.0    | %      |                   |   | – |   |   |   | 50.0 | % |   |   | – |   |
| Collab+LINE LLC                            | Investment                |                   | United Statesof America |   |              | 50.0    | %      |                   |   | 137,579 |   |   |   | 50.0 | % |   |   | 133,284 |   |
| LINE Bros. Corporation(1)                  | Mobilecontents            |                   | Japan                        |   |              | 40.0    | %      |                   |   | 0 |   |   |   | – |   |   |   | – |   |
| Epic Voyage, Inc.                          | Mobilegames               |                   | Japan                        |   |              | 30.0    | %      |                   |   | 2,730 |   |   |   | 30.0 | % |   |   | 2,678 |   |
| Green Monster, Inc.                        | Mobilegames               |                   | Japan                        |   |              | 35.0    | %      |                   |   | 42,948 |   |   |   | 35.0 | % |   |   | – |   |
| LINE MUSIC Corporation(2)                  | Music distribution        |                   | Japan                        |   |              | 33.4    | %      |                   |   | 109,501 |   |   |   | 33.4 | % |   |   | 413,427 |   |
| AUBE, Ltd.(3)                              | Job listing               |                   | Japan                        |   |              | 49.0    | %      |                   |   | 287,319 |   |   |   | 49.0 | % |   |   | 339,747 |   |
| transcosmos online communications inc. (4) | Customer service          |                   | Japan                        |   |              | – |   |                   |   | – |   |   |   | 40.0 | % |   |   | 42,186 |   |
| NPLE GAMES Co., Ltd. (5)                   | Mobilegames               |                   | Korea                        |   |              | – |   |                   |   | – |   |   |   | 14.8 | % |   |   | 68,569 |   |
| Yume no Machi Souzou Iinkai Co., Ltd. (6)  | Delivery portal site      |                   | Japan                        |   |              | – |   |                   |   | – |   |   |   | 22.0 | % |   |   | 3,973,255 |   |
| Snow Corporation(7)                        | Mobile app                |                   | Korea                        |   |              | – |   |                   |   | – |   |   |   | 25.0 | % |   |   | 4,386,865 |   |
|                                       |                      |                   |                         |   |              |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Joint ventures                             |                      |                   |                         |   |              |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Lantu Games Limited(8)                     | Mobilegames               |                   | Hong Kong(China)             |   |              | 50.0    | %      |                   |   | 1,205,749 |   |   |   | 50.0 | % |   |   | 1,024,782 |   |
| RABBIT-LINE PAY COMPANY LIMITED(9)         | Payment service           |                   | Thailand                     |   |              | – |   |                   |   | – |   |   |   | 50.0 | % |   |   | 2,327,274 |   |

----

|  | (1) | LINE Bros. Corporation ("LINE Bros."), which plans to provide food delivery services via the LINE platform, was established in May 2014. The Group has a 40.0% ownership interest in LINE Bros. As the Group does not control nor direct the daily activities of LINE Bros., the Group accounts for its ownership in LINE Bros. using the equity method. In May 2016, the Group sold all of the shares of LINE Bros. to a third party. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | LINE MUSIC Corporation, which mainly plans to provide music distribution services, was established in December 2014. The Group has a 40.0% ownership interest in LINE MUSIC Corporation. As the Group does not control nor direct the daily activities of LINE MUSIC Corporation, the Group accounts for its ownership in LINE MUSIC Corporation using the equity method. The Group sold a part of its shares to third parties during 2015, resulting in the decrease in its ownership to 33.4%. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) | In February 2015, the Group obtained 49.0% interest in AUBE, Ltd., which provides job listings, announcements and related services online and through mobile application. As the Group does not control nor direct the daily activities of AUBE, Ltd., the Group accounts for its ownership in AUBE, Ltd. using the equity method. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (4) | In May 2016, the Group acquired a 40.0% interest in a new entity, transcosmos online communications inc., established to provide customer support services to certain business partners that use the LINE platform. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (5) | In August 2016, LINE Naver Game Partnership, a 66.7% owned joint operation of the Group, acquired a 22.2% interest in NPLE GAMES Co., Ltd. As the Group has significant influence over NPLE GAMES Co., Ltd. through LINE Naver Game Partnership, the Group accounts for its ownership in NPLE GAMES Co., Ltd. using the equity method. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (6) | On September 29, 2016, the Company's board of directors approved an investment in Yume no Machi Souzou Iinkai Co., Ltd. ("Yume no Machi Souzou Iinkai"), which operates a delivery portal site "Demae-Can" and has a share capital of 1,113,300 thousand yen. On October 14, 2016, the Company acquired 11.9% of the outstanding shares of Yume no Machi Souzou Iinkai by paying 2,376,000 thousand yen in cash. Additionally, on October 18, 2016, the Company acquired 8.1% of the outstanding shares of Yume no Machi Souzou Iinkai by paying 1,620,000 thousand yen in cash, resulting in the Company owning 22.0%, after reflection of Yume no Machi Souzou Iinkai's treasury shares. The acquisition of shares of Yume no Machi Souzou Iinkai is expected to allow the Company to further develop its online-to-offline services and its delivery services. The Group determined that it exercises significant influence over Yume no Machi Souzou Iinkai. Therefore, the Group accounts for its ownership interest in Yume no Machi Souzou Iinkai using the equity method. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (7) | On September 29, 2016, the Company's board of directors approved an investment in Snow Corporation, which has a share capital of 1,700,000 thousand Korean won and is a subsidiary of NAVER, the Group's ultimate parent company. On October 18, 2016, the Company acquired newly issued voting shares of Snow Corporation by paying 49,999,800 thousand Korean won (4,554,919 thousand yen) in cash, resulting in the Company owning 25.0% of Snow Corporation. Snow Corporation develops and operates a self-portrait photograph app, which is distributed primarily in Asia. The acquisition of shares of Snow Corporation is expected to allow the Company to expand its business in Asia and to extend the Company's services to the existing users. The Group determined that it exercises significant influence over Snow Corporation. Therefore, the Group will account for its ownership interest in Snow Corporation using the equity method. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (8) | In December 2015, the Group entered into a joint venture agreement whereby it obtained 50.0% of the ordinary shares of Lantu Games Limited. The joint venture is involved in the development and management of mobile games. The Group's 50.0% interest in Lantu Games Limited is accounted for using the equity method. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (9) | On April 25, 2016, an issuance of new shares to BSS Holdings group, a provider of smart cards for mass transit systems and offline e-payment at retail stores in Thailand, resulted in a decrease of the Group's ownership of LINE BIZ Plus Ltd. from 100.0% to 50.0%. LINE BIZ Plus Ltd. was accounted for as a joint venture under the equity method because the Group had joint control of the entity under the shareholders agreement. As a result of the transaction, LINE BIZ Plus Ltd. was renamed to RABBIT-LINE PAY COMPANY LIMITED. Refer to Note 20 Supplemental Cash Flow Information for further details. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 32. | Investments in Associates and Joint Ventures (continued) |
|-----|---------------------------------------------------------------|

| (2) | Financial information on the Group's investment in the associates is summarized as follows (continued): |
|-----|---------------------------------------------------------------------------------------------------------|

|                                              |   |                  |                         |   |                  |    |     |              |   |
|---------------------------------------------------|--------|-----------------------|------------------------------|--------|-----------------------|---------|----------|-------------------|--------|
|                                              |   |                  |                         |   | (In thousands of yen) |    |
|                                              |   |                  |                         |   |                  |    |
|                                              |   |                  | LINE MUSIC Corporation  |   |
|                                              |   |                  |                         |   | December 31, 2015     |    |     | December 31, 2016 |   |
| Current assets                                    |   |                  |                         |   |                  | 943,791 |     |              |   | 2,141,500 |   |
| Non-current assets                                |   |                  |                         |   |                  | 12,574  |     |              |   | 42 |   |
| Current liabilities                               |   |                  |                         |   |                  | 628,519 |     |              |   | 903,737 |   |
| Equity                                            |   |                  |                         |   |                  | 327,846 |     |              |   | 1,237,805 |   |
| Proportion of the Group's ownership               |   |                  |                         |   |                  | 33.4    | %        |              |   | 33.4 | % |
| Group's share of equity                           |   |                  |                         |   |                  | 109,501 |     |              |   | 413,427 |   |
| Carrying amount of the interests                  |   |                  |                         |   |                  | 109,501 |     |              |   | 413,427 |   |
|                                              |   |                  |                         |   |                  |    |     |              |   |   |   |
|                                              |   |                  |                         |   |                  |    |     |              |   |   |   |
|                                              |   | LINE MUSICCorporation |                         |
|                                              |   | 2014                  |                         |   |                  | 2015    |     |              |   | 2016 |   |
| Revenue                                           |   |                  | –                      |   |                  |    | 272,731  |              |   |   | 1,454,384 |   |
| Loss for the year from continuing operations      |   |                  | (284,419                     | )      |                  |    | (347,735 | )                 |   |   | (1,090,042 | ) |
| Total comprehensive loss for the year, net of tax |   |                  | (284,419                     | )      |                  |    | (347,735 | )                 |   |   | (1,090,042 | ) |
| Group's share of loss for the year                |   |                  | (113,768                     | )      |                  |    | (120,883 | )                 |   |   | (364,074 | ) |

----

| 32. | Investments in Associates and Joint Ventures (continued) |
|-----|---------------------------------------------------------------|

| (2) | Financial information on the Group's investment in the associates is summarized as follows (continued): |
|-----|---------------------------------------------------------------------------------------------------------|

|                                                       |   |                  |    |   |             |   |
|------------------------------------------------------------|--------|-----------------------|---------|--------|------------------|--------|
|                                                       |   | (In thousands of yen) |    |
|                                                       |   |                  |    |
|                                                       |   | AUBE, Ltd.            |    |
|                                                       |   | December 31,2015      |    |   | December 31,2016 |   |
| Current assets                                             |   |                  | 670,524 |   |             |   | 968,407 |   |
| Current liabilities                                        |   |                  | 84,159  |   |             |   | 275,045 |   |
| Equity                                                     |   |                  | 586,365 |   |             |   | 693,362 |   |
| Proportion of the Group's ownership                        |   |                  | 49.0    | %      |             |   | 49.0 | % |
| Group's share of equity                                    |   |                  | 287,319 |   |             |   | 339,747 |   |
| Carrying amount of the interests                           |   |                  | 287,319 |   |             |   | 339,747 |   |
|                                                       |   |                  |    |   |             |   |   |   |
|                                                       |   | AUBE, Ltd.            |    |
|                                                       |   |                  | 2015    |   |             |   | 2016 |   |
| Revenue                                                    |   |                  | 830,010 |   |             |   | 3,013,815 |   |
| (Loss)/profit for the year from continuing operations      |   |                  | (13,635 | )      |             |   | 106,997 |   |
| Total comprehensive (loss)/profit for the year, net of tax |   |                  | (13,635 | )      |             |   | 106,997 |   |
| Group's share of (loss)/profit for the year                |   |                  | (6,681  | )      |             |   | 52,428 |   |
|                                              |   | (In thousands of yen)                |                                 |
|---------------------------------------------------|--------|--------------------------------------|--------------------------------------|
|                                              |   | Yume no Machi SouzouIinkai Co., Ltd. |                                 |
|                                              |   | December 31, 2016                    |                                 |
| Current assets                                    |   |                                 | 2,703,030                            |   |
| Non-current assets                                |   |                                 | 6,609,442                            |   |
| Current liabilities                               |   |                                 | 1,536,763                            |   |
| Non-current liabilities                           |   |                                 | 1,933,025                            |   |
| Equity                                            |   |                                 |                                 |   |
| Attributable to the shareholders of the parent    |   |                                 | 5,835,092                            |   |
| Non-controlling interests                         |   |                                 | 7,592                                |   |
| Proportion of the Group's ownership               |   |                                 | 22.0                                 | % |
|                                              |   |                                 |                                 |   |
| Group's share of equity                           |   |                                 | 1,285,977                            |   |
| Goodwill                                          |   |                                 | 2,687,278                            |   |
| Carrying amount of the interests                  |   |                                 | 3,973,255                            |   |
|                                              |   |                                 |                                 |   |
|                                              |   |                                 | Yume no Machi SouzouIinkai Co., Ltd. |   |
|                                              |   |                                 | 2016                                 |   |
| Revenue                                           |   |                                 | 1,746,463                            |   |
| Loss for the year from continuing operations      |   |                                 | (114,780                             | ) |
| Total comprehensive loss for the year, net of tax |   |                                 | (114,780                             | ) |
| Group's share of loss for the year                |   |                                 | (25,296                              | ) |

----

|                                              |   | (In thousands of yen) |             |
|---------------------------------------------------|--------|-----------------------|------------------|
|                                              |   | Snow Corporation      |             |
|                                              |   | December 31, 2016     |             |
| Current assets                                    |   |                  | 4,365,119        |   |
| Non-current assets                                |   |                  | 1,492,930        |   |
| Current liabilities                               |   |                  | 505,930          |   |
| Non-current liabilities                           |   |                  | 640,628          |   |
| Equity                                            |   |                  | 4,711,491        |   |
| Proportion of the Group's ownership               |   |                  | 25.0             | % |
| Group's share of equity                           |   |                  | 1,177,873        |   |
| Goodwill                                          |   |                  | 3,208,992        |   |
| Carrying amount of the interests                  |   |                  | 4,386,865        |   |
|                                              |   |                  |             |   |
|                                              |   |                  | Snow Corporation |   |
|                                              |   |                  | 2016        |   |
| Loss for the year from continuing operations      |   |                  | (951,562         | ) |
| Total comprehensive loss for the year, net of tax |   |                  | (951,562         | ) |
| Group's share of loss for the year                |   |                  | (237,891         | ) |

----

| 32. | Investments in Associates and Joint Ventures (continued) |
|-----|---------------------------------------------------------------|

| (3) | The aggregate amount of individually immaterial associates accounted for by the equity-method accounted investee is summarized as follows: |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------|

|                                                |   |                            |     |   |                            |    |     |              |                    |
|-----------------------------------------------------|--------|---------------------------------|----------|--------|---------------------------------|---------|----------|-------------------|-------------------------|
|                                                |   |                            |     |   | (In thousands of yen)           |    |
|                                                |   |                            |     |   | December 31, 2015               |    |     | December 31, 2016 |                    |
| Current assets                                      |   |                            |     |   |                            | 213,434 |     |              |                    | 459,937 |   |
| Non-current assets                                  |   |                            |     |   |                            | 427,176 |     |              |                    | 265,085 |   |
| Current liabilities                                 |   |                            |     |   |                            | 29,574  |     |              |                    | 415,592 |   |
| Non-current liabilities                             |   |                            |     |   |                            | 170,662 |     |              |                    | 141,047 |   |
| Equity                                              |   |                            |     |   |                            | 440,374 |     |              |                    | 168,383 |   |
| Group's share of equity                             |   |                            |     |   |                            | 196,620 |     |              |                    | 88,663 |   |
| Impairment                                          |   |                            |     |   |                            | (13,363 | )        |              |   – |   |
| Unrecognized loss(1)                                |   |                            |     |   |    – |    |     |              | 115,714                 |   |
| Goodwill                              |   |                            |     |   |    – |    |     |              | 42,340                  |   |
| Carrying amount of the interests                    |   |                            |     |   |                            | 183,257 |     |              |                    | 246,717 |   |
|                                                |   |                            |     |   |                            |    |     |              |                    |   |   |
|                                                |   | 2014                            |     |   |                            | 2015    |     |              |                    | 2016 |   |
| Revenue                                             |   |                            | 45,686   |   |                            |    | 4,859    |              |                    |   | 107,459 |   |
| Loss for the year from continuing operations        |   |                            | (116,025 | )      |                            |    | (228,225 | )                 |                    |   | (544,005 | ) |
| Other comprehensive income for the year, net of tax |   |                            | 37,090   |   |                            |    | 31,284   |              |                    |   | 1,915 |   |
| Total comprehensive loss for the year, net of tax   |   |                            | (78,935  | )      |                            |    | (196,941 | )                 |                    |   | (542,090 | ) |
| Unrecognized loss(1)                                |   |    – |     |   |    – |    |     |              | 115,714                 |   |
| Group's share of loss for the year                  |   |                            | (35,737  | )      |                            |    | (71,667  | )                 |                    |   | (49,501 | ) |

| (1) | Since the Company's share of losses in one of these individually immaterial associates exceeded the interest in that associate, the Company has discontinued recognizing its share of further losses. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (4) | Financial information on the Group's investment in joint ventures are summarized as follows: |
|-----|----------------------------------------------------------------------------------------------|

|                                              |   |                  |      |   |             |   |
|---------------------------------------------------|--------|-----------------------|-----------|--------|------------------|--------|
|                                              |   | (In thousands of yen) |      |
|                                              |   |                  |      |
|                                              |   | Lantu Games Limited   |      |
|                                              |   | December 31,2015      |      |   | December 31,2016 |   |
| Current assets(1)                                 |   |                  | 2,411,498 |   |             |   | 2,093,470 |   |
| Non-current assets                                |   |                  | –   |   |             |   | 3,137 |   |
| Current liabilities(2)                            |   |                  | –   |   |             |   | 47,042 |   |
| Equity                                            |   |                  | 2,411,498 |   |             |   | 2,049,564 |   |
| Proportion of the Group's ownership               |   |                  | 50.0      | %      |             |   | 50.0 | % |
| Group's share of equity                           |   |                  | 1,205,749 |   |             |   | 1,024,782 |   |
| Carrying amount of the interests                  |   |                  | 1,205,749 |   |             |   | 1,024,782 |   |
|                                              |   |                  |      |   |             |   |   |   |
|                                              |   | Lantu Games Limited   |      |
|                                              |   |                  | 2015      |   |             |   | 2016 |   |
| Depreciation and amortization                     |   |                  | –   |   |             |   | (355 | ) |
| Interest income                                   |   |                  | –   |   |             |   | 584 |   |
| Loss for the year from continuing operations      |   |                  | –   |   |             |   | (254,586 | ) |
| Total comprehensive loss for the year, net of tax |   |                  | –   |   |             |   | (254,586 | ) |
| Group's share of loss for the year                |   |                  | –   |   |             |   | (127,293 | ) |

----

|                                              |   |                           |                                 |
|---------------------------------------------------|--------|--------------------------------|--------------------------------------|
|                                              |   | (In thousands of yen)          |                                 |
|                                              |   |                           |                                 |
|                                              |   | RABBIT-LINE PAYCOMPANY LIMITED |                                 |
|                                              |   | December 31, 2016              |                                 |
| Current assets(1)                                 |   |                           | 2,848,347                            |   |
| Non-current assets                                |   |                           | 26,120                               |   |
| Current liabilities(2)                            |   |                           | 145,494                              |   |
| Non-current liabilities(3)                        |   |                           | 6,850                                |   |
| Equity                                            |   |                           | 2,722,123                            |   |
| Proportion of the Group's ownership               |   |                           | 50.0                                 | % |
| Group's share of equity                           |   |                           | 1,361,062                            |   |
| Goodwill                                          |   |                           | 966,212                              |   |
| Carrying amount of the interests                  |   |                           | 2,327,274                            |   |
|                                              |   |                           |                                 |   |
|                                              |   |                           | RABBIT-LINE PAYCOMPANY LIMITED  |   |
|                                              |   |                           | 2016                                 |   |
| Revenue                                           |   |                           | 39,311                               |   |
| Depreciation and amortization                     |   |                           | (3,894                               | ) |
| Interest income                                   |   |                           | 24,747                               |   |
| Loss for the year from continuing operations      |   |                           | (162,707                             | ) |
| Total comprehensive loss for the year, net of tax |   |                           | (162,707                             | ) |
| Group's share of loss for the year                |   |                           | (81,353                              | ) |

----

| 33. | Interests in Joint Operation |
|-----|------------------------------|

| 34. | Subsequent Events |
|-----|-------------------|

| Candidates and numbers of candidates                         |   | Four of the Company’s directors, excluding outside directors and part-time directors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Total number of stock options issued                         |   | A total of 13,125 units (maximum), which will be allocated within one year after the day of this ordinary general meeting of shareholders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Class of share to be issued upon exercise of stock options   |   | Common shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Number of shares to be issued upon exercise of stock options |   | A maximum of 1,312,500 shares will be issued. If it is appropriate to adjust the number of allotted shares because of a transaction such as a share split or share consolidation, the Company will adjust the number of allotted shares as necessary to a reasonable extent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Amount of payments for stock options                         |   | The exercise price will be obtained by multiplying 1.05 by the average closing price in ordinary trading of the Company’s shares of common shares on the Tokyo Stock Exchange for each day (excluding any day on which no trade is executed) of the month preceding the month in which the day that the stock options were allotted, and any fraction less than 1 yen arising from such calculation will be rounded up. However, when the exercise price calculated using this method is lower than the closing price (or closing price of the immediately preceding trading day when there is no closing price) of the shares of the Company’s common share on the allotment date, the exercise price will be the closing price on the allotment date of the stock option. If it is appropriate to adjust the exercise price because of a transaction such as a merger, an issuance of shares for subscription, a share split or share consolidation, the Company will adjust the exercise price as necessary to a reasonable extent. |
| Exercise period for stock options                            |   | The exercise period for stock options will be from the day exactly one year following the allotment date until the day exactly ten years after one year after the allotment date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Conditions for exercise of stock options                     |   | The recipients of warrants must be in a position of director of the Company or its subsidiaries at the time of exercising the stock options. However, this condition does not apply in cases of retirement of a director of the Company or its subsidiaries due to the expiration of his or her term of office, or other cases acknowledged to have a valid reason by the Company’s board of directors. Other conditions for exercise of stock options will be determined at the meeting of the Company’s board of directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Restriction on acquisition of stock options by transfer      |   | Acquisition of stock options by transfer will be subject to approval by resolution of the Company’s board of directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |