ビジョン（9416） – Notice of Convocation Annual General Meeting 2022

(Stock Code 9416) March 14, 2022 6-5-1 Nishi-Shinjuku, Shinjuku-ku Vision Inc. President CEO Kenichi Sano Notice of the 21st Convocation Annual General Meeting We would like to express our sincere gratitude for your continued support. Now, we would like to inform you that the 21st Convocation Annual General Meeting will be held as follows. In lieu of attending the meeting in person, you can exercise your voting rights in writing or via the Internet, so please review the attached reference documents for the General Meeting of Shareholders and vote in accordance with the instructions for exercising voting rights on page 3 by 6:00 p.m. on Tuesday, March 29, 2022. 1. Date and Time: March 30, 2022 (Wednesday) 1:00 pm Record 2. Venue: NS Sky Conference Hall B Shinjuku NS Building 30th floor Please note that the start time is 1:00 p.m., different from previous years. 3. Agenda of the 2-Chome 4-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo (Please refer to the guide map at the end to be sure you can find the venue without error.) Meeting: Reported: Matters to be 1. FY 21 (January 1, 2021 – December 31, 2021) The business report, consolidated financial statements and audit report of accounting auditors and board of corporate auditors 2. FY 21 (January 1, 2021 – December 31, 2021) Financial statements report Matters to be Resolved: Agenda Matter Partial Amendment to the Articles of Incorporation ―1― 4. Decisions on Convening (1) If exercising voting rights by proxy, please appoint one other shareholder of the Company with voting rights and submit a document certifying the proxy’s power of representation and the voting forms of both you and the proxy to the reception at the venue. (2) If you wish to exercise your voting rights diversely, please notify us in writing of the fact and reason at least three days before the date of the general meeting of shareholders. 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 〰 ◎If you plan to attend the meeting, please submit the enclosed Voting Rights Exercise Form to the receptionist at the meeting. To save resources, please bring this Notice of Convocation with you. ◎Notes to the Consolidated Financial Statements and Notes to the Non-Consolidated Financial Statements are posted on the Company’s website (https://www.vision-net.co.jp/) in accordance with laws and regulations and Article 16 of the Company’s Articles of Incorporation, and therefore are not included in the attached documents of this Notice of Convocation. ◎If any amendments are made to the Reference Documents for the General Meeting of Shareholders, Business Report, Consolidated Financial Statements and Non-consolidated Financial Statements, they will be posted on the above website. ⚫ To prevent the spread of COVID-19, we would like to ask shareholders who are considering attending this General Meeting of Shareholders to take the following precautions. ⚫ If you are planning to attend the meeting, please be sure to check your health condition and make a careful decision. At the General Meeting of Shareholders, we ask for your cooperation in disinfecting the reception area with alcohol, wearing a mask, and taking your temperature. If you fail to do so, you may be refused admission and asked to leave the venue. If you have symptoms such as fever or cough, or if you are suspected of being infected with or at risk of COVID-19 infection, you will not be admitted and may be asked to leave the venue. Please note that we may not be able to secure enough seats due to the wide space between the seats for shareholders. Please note that we may not be able to secure enough seats to accommodate the wide gap between shareholders. The Company’s executives and staff members who will speak at the meeting will wear masks. The meeting is scheduled to end in a shorter period than in previous years, as the proceedings will be conducted smoothly and efficiently. We would like to ask for the understanding and cooperation of our shareholders. ⚫ ⚫ ⚫ ⚫ ―2― Attendance Options for the General Meeting of Shareholders 1. In-Person Attendance of General Meeting of Shareholders Please submit the Voting Rights Exercise Form to the venue reception. If attending the meeting by proxy, please appoint one other shareholder of the Company with voting rights and submit a document certifying the proxy’s power of representation and the voting forms of both you and the proxy to the venue reception. Date of Event March 30, 2022 (Wednesday) from 1 pm Reception starts at 12:30 pm. 2. If Unable to Attend the General Meeting of Shareholders (1) Voting by Mail Please respond on the enclosed Voting Rights Exercise Form and send it back to us. possible. *It will take a few days for the form to arrive, so please mail it as soon as Voting Deadline Form must arrive by 6:00 pm on Tuesday, March 29, 2022 (2) Voting Online ① Voting by “Smart Voting” Please scan the QR code on the right-hand side of the enclosed Voting Rights Exercise Form with your smartphone or other devices and follow the instructions on the screen to enter your vote. ② Voting by Voting Rights Website Code and Password Please log in to the website for exercising voting rights (https://soukai.mizuho-tb.co.jp/) with the code for exercising voting rights and password indicated on the voting form and enter the details of your vote following the on-screen instructions. For details, please refer to the “Guide to Exercising Voting Rights via the Internet” Online submission must be completed by 6:00 pm on Tuesday, on pages 4-5. Voting Deadline March 29, 2022 ―3― 3. If Duplicate Votes are Cast treated as valid. (1) Duplicate exercise of voting rights by mail (Voting Rights Exercise Form) and via the Internet If you exercise your voting rights both by mail (voting form) and online, the Internet vote will be (2) Duplicate exercise of voting rights via the Internet If you exercise your voting rights multiple times via the Internet, we will consider the most recent vote to be valid. In addition, if you exercise your voting rights more than once via PC and smartphone, the last vote will be deemed valid. If there is no indication of approval or disapproval (or abstention) for a proposal, it will be deemed that the vote is in favor of the proposal. How to exercise voting rights via the Internet 1. Voting by “Smart Voting” Please access the “Smart Voting” website by scanning the QR code on the right-hand side of the enclosed voting form with your smartphone and follow the instructions on the screen to enter your vote (it is not necessary to enter the code and password for exercising voting rights). Exercising voting rights by “Smart Voting” is only once. If you wish to revise your vote after submission, you will need to vote using the method described in #2. 2. Voting by Voting Rights Website (Entering Code and Password) https://soukai.mizuho-tb.co.jp/ Please access the voting rights website (URL above), log in with the code and password shown on the back of the right-hand side of the enclosed voting rights exercise form, and follow the on-screen instructions to enter your vote. Please note that you will need to change your password when you log in for the first time. ―4― ・The code and password for exercising voting rights will be newly issued for each General Meeting ・Please handle the password carefully as it is a means of confirming the identity of the person of Shareholders. exercising their voting rights. ・If a password is entered incorrectly more than a certain number of times in a row, it will become unusable. In such cases, please follow the instructions on the screen. Contact Information If you have any questions, please contact the Transfer Agent Department of Mizuho Trust & Banking Co. (contact information below). For inquiries regarding operation of “Smart Voting” and “Voting Rights Website”, please contact For inquiries regarding stock administration other than those listed above, please contact Toll-free 0120-768-524 Weekdays (except for end of year/New Year’s holidays) 9:00-21:00 Toll-free 0120-288-324 Weekdays (except for end of year/New Year’s holidays) 9:00-17:00 *“QR Code” is a registered trademark of Denso Wave Incorporated. Information on Live Streaming via the Internet and Advance Questions The General Meeting of Shareholders will be broadcast live via the Internet so that shareholders who are unable to attend the meeting can view the General Meeting of Shareholders and the business briefing. In addition, we will accept questions in advance on the live-streaming website. Please be sure to read the precautions on the page 7 before using the live webcast or asking questions in advance. １． Date of Livestream ２． Access Method March 30, 2022 (Wednesday) from 1 pm Access link https://web.sharely.app/login/vision-21 Shareholder number, postal code, number of shares held ―5― (1) Enter the URL above or scan the QR code shown on the right to access the live-streaming page. (2) Once you have accessed the page, follow the instructions on the screen and enter the necessary information to log in. mailing in your voting form. *Be sure to have your “shareholder number,” “postal code,” and “number of shares held” handy before *If you have any questions, please refer to the FAQ for shareholders at the following URL. https://sharely.zendesk.com/hc/ja/sections/360009585533 *If you have any questions about how to log in or operate the system on the day of the event, please contact the Sharely number listed below. Please note that they are unable to respond to questions or comments regarding the agenda for the General Meeting of Shareholders. 【Contact Information for Sharely Virtual Shareholders Meeting】 TEL Reception March 30, 2022 (Wednesday) From noon until the end of the General Meeting of 03-6416-5286 Shareholders *“QR Code” is a registered trademark of Denso Wave Incorporated. 3. How to Ask Advance Questions Please log in according to “2. How to Access”, click the “Ask a Question” button on the bottom right of the video streaming screen, and submit your questions regarding the resolution matters using the question form. 【Advance Question Period】 March 14, 2022 (Monday)～March 28, 2022 (Monday) 6:00 pm *We will not be able to answer questions sent after the advance question period. *We may not be able to respond to all questions due to time constraints of the meeting or the content of the question. ―6― Precautions ・The live-streaming service will allow you to watch the meeting but will not allow you to participate in the resolutions on the day of the meeting. Shareholders are kindly requested to exercise their voting rights in advance by mail (in writing) or online and we ask that you please review the Reference Document for the General Meeting of Shareholders and exercise your voting rights by 6:00 p.m. on Tuesday, March 29, 2022 (JST). ・This live-streaming service will allow you to watch the meeting, but it will not be available for Q&A on the day of the meeting. Please use the Q&A desk in advance of the meeting. In addition, motions cannot be submitted from the Q&A desk. Shareholders who are able submit a motion should attend the meeting. ・However, there is a possibility of communication failures, such as video and audio disruptions and interruptions in the live transmission, as well as time lags in the transmission because of the connection. Please note that we will not be responsible for any disadvantages incurred by viewers participating online due to these communication failures. ・We will not be able to provide support for any connection problems, delays, or audio problems that may be caused by problems with the shareholder’s environment on the day of the event. Please understand this in advance. ・Please note that any connection fees or communication charges incurred during the viewing of the ・Provision of video or audio data to a third party, public showing, reproduction, or duplication, or telling presentation shall be borne by the shareholder. a third party how to log in is strictly prohibited. ・In consideration of the privacy of the shareholders in attendance, photography on the day will be limited to the area around the chairman’s seat and the seats of the Company’s directors. We ask for your understanding in advance. ・If you have any other questions about the distribution system, please refer to the FAQ site below. https://sharely.zendesk.com/hc/ja/sections/360009585533 ―7― (Attachment) Business Report From January 1, 2021 until December 31, 2021 ( ) 1. Matters Relating to the Current State of the Corporate Group (1) Business Programs and Results For the current consolidated fiscal year, the economic environment improved and showed signs of recovery as measures against COVID-19 such as vaccination reduced the number of cases and the emergency stay-at-home order was ended in October 2021. However, the outbreak and spread of the new mutated strain, Omicron, has led to renewed uncertainty about the future. Within this economic environment, the Group has been working hard to promote the GLOBAL WiFi and the information and communication services businesses domestically. Therefore, net sales for the current consolidated fiscal year are 18,100 million yen (increased 8.7% YoY), operating income is 1,105 million yen (increased 963.6% YoY), and ordinary profits are 1,143 million yen (increased 401.8% YoY), and profit attributable to owners of parent is 729 million yen (loss attributable to owners of parent in the same period of the previous year is 1,183 million yen), meaning all exceeded the results of the previous fiscal year. Status by Segment The Corporate Group’s two reported categories are “GLOBAL WiFi Business” and“Information and Communications Service Business”. The situation of each category is as follows. . “GLOBAL WiFi Business” During the consolidated fiscal year, we catered to the telecommunication needs of various situations such as moving, hospitalization, business trips, the addition of home internet lines, and various events, amidst the continued demand due to increased telework as the COVID-19 pandemic continues. At the same time, we worked to increase sales of “Global WiFi for Biz,” an in-house mobile Wi-Fi router with the option of a domestic usage plan, and “Vision WiMAX,” a high-speed Wi-Fi router, and launched “World eSIM,” an eSIM service that can be used in 120 countries around the world. Additionally, as part of the border measures at airport quarantine stations for entry into Japan, the Company was temporarily entrusted with the registration and confirmation of designated applications, which has been implemented in earnest since April 2021. Furthermore, as an essential infrastructure service during the pandemic, we opened the Shinjuku PCR Center East Exit Branch and started providing highly convenient PCR testing services. As a result, net sales for the consolidated fiscal year were 9,070 million yen (increased 24.6% YoY) and segment profit was 1,033 million yen (declined by 90 million yen YoY). Both results exceeded the previous fiscal year results. ―8― “Information and Communications Service Business” In this business segment, services are being developed that can reduce costs, improve operational productivity, and support remote work during and after the pandemic and demand for services that can contribute to cost reduction, operational efficiency improvement, and remote work support, can be expected regardless of the economy. With a strategy of targeting newly established companies/startups and supporting their growth stage with up/cross selling, we are working to improve stability and profitability by increasing stock and promoting highly effective sales activities. During the consolidated fiscal year, sales of mobile communication devices to support remote environments were strong with significant demand, but commission sales in the new electric power business declined due to the sharp rise in electricity retail prices. Furthermore, in preparation for the future, we have worked to expand sales of our monthly in-house services, which are expected to generate continuous revenue despite a temporary increase in operating costs (expected annual profits of 10 million yen). As a result, net sales were 8,804 million yen (declined 0.0% YoY) and segment profit was 1,116 million yen (declined 26.6% YoY). Sales by Segment FY20 12/2020 (Previous consolidated fiscal year) FY21 12/2021 (Current consolidated fiscal year) Increase or decrease from the previous consolidated fiscal year Amount (millions of yen) Ratio (%) Amount (millions of yen) Ratio (%) Amount (millions of yen) YoY (%) GLOBAL WiFi 7,278 43.7 9,070 50.1 1,792 24.6 8,806 52.9 8,804 48.6 -1 -0.0 580 -10 3.5 -0.1 235 -10 1.3 -345 -59.5 -0.1 0 8.7 Total 16,654 100.0 18,100 100.0 1,446 Segment Information and Communications Service Other Adjustments ―9― (2) Status of Capital Investment The total amount of capital investment made in the current consolidated fiscal year is 298 million yen. The main investment sources are the acquisition of mobile Wi-Fi routers for rental use and the development of database software for the GLOBAL WiFi business. (3) Matters to be Resolved The issues that should be prioritized for the GLOBAL WiFi business are as follows. ① Expand sales channels and respond to demand Develop sales partners and strengthen cooperation Respond to demand for telework, online classes, moving, hospitalization, business trips, combined use with home line, various events, and other communication needs ② Expansion of reliable profit sources Corporate contracts, long term rental plans “Global WiFi for Biz”, “Vision WiMAX” follows. ③ Maximization of profit when international travel recovers Expand service lineup, improve convenience (more delivery methods and location availability) The issues that should be prioritized for the Information and Communications Service business are as ① Enhance online sales structure Reduce number of in person business visits, expand sales area, and reduce business transportation costs. Increase productivity of existing business ② Improve upselling and cross selling for both in person and online sales. ③ Expand sales of in-house services Internal workflow, monthly subscription-based homepage creation, and various maintenance services, other new services We would like to ask our shareholders for their continued support. ―10― (4) Changes in Property and Profit or Loss Status ① Status of corporate group properties and profit or loss FY18 FY19 FY20 FY21 (12/2018) (12/2019) (12/2020) (12/2021) 21,503,668 27,318,168 16,654,475 18,100,837 Segment Sales Net income or loss (-) attributable to owners of parent Net income or loss (-) per share (Thousands of yen) (Thousands of yen) (Thousands of yen) (Thousands of yen) (Thousands of yen) Ordinary profit 2,499,685 3,358,939 227,947 1,143,772 1,529,476 2,226,322 -1,183,960 729,129 (Yen) 31.40 46.05 -25.07 15.47 13,552,015 15,173,575 11,313,034 14,932,162 9,803,086 10,905,176 8,769,171 10,122,215 Total assets Net assets Segment Net sales Total assets Net assets Net assets per share (Yen) 200.95 226.80 185.79 212.52 (Note) On October 1, 2019 at a ratio of 3 shares per common share. Therefore, net income per share and net assets per share are calculated on the assumption that a stock split was done at the beginning of the 18th fiscal period. ② Status of Company Profits, Loss, and Assets FY18 FY19 FY20 FY21 (12/2018) (12/2019) (12/2020) (12/2021) 20,373,195 25,442,235 15,350,845 16,964,191 (Thousands of yen) (Thousands of yen) (Thousands of yen) (Thousands of yen) (Thousands of yen) Ordinary profit 2,244,943 3,046,185 40,822 864,499 Net income or loss (-) 1,403,903 2,041,905 -1,465,119 548,171 Net income or loss (-) per share (Yen) 28.82 42.24 -31.03 11.63 12,775,279 14,214,274 10,227,597 12,254,973 9,120,377 10,058,682 7,644,334 8,771,289 Net assets per share (Yen) 186.92 209.16 161.92 184.18 (Note) On October 1, 2019 at a ratio of 3 shares per common share. Therefore, net income per share and net assets per share are calculated on the assumption that a stock split was done at the beginning of the 18th fiscal period. ―11― Vision Mobile Korea Inc. 300,000,000 (5) Status of Important Subsidiaries Company Capital Stock Segment Company’s investment ratio 10,000 Thousands of JPY 100 % Information and Communications Service Members Net Inc. Best Link Inc. Alpha Techno Inc. BOS Inc. Vision Ad Inc. Vision Digital Marketing Inc. Adval Corp. Vision Mobile Hawaii Inc. Vision Mobile Hong Kong Limited GLOBAL WIFI. PTE.LTD. COM GLOBAL WIFI. UK LTD VISION VIETNAM ONE MEMBER LIMITED LIABILITY COMPANY Global WiFi France SAS Vision Mobile Italia S.r.l. 2,100,000,000 上海高效通信科技有限公司 1,700,000 10,000 10,000 10,000 10,000 10,000 10,000 150,000 300,000 160,000 40,000 220,000 220,000 KRW USD HKD NTD SGD GBP VND USD EUR EUR USD 100 100 100 60 80 50 100 100 100 100 100 100 100 100 100 100 100 GLOBAL WiFi Information and Communications Service Information and Communications Service Information and Communications Service Other (Media) Other (Media) Other (Space Management) GLOBAL WiFi GLOBAL WiFi GLOBAL WiFi GLOBAL WiFi GLOBAL WiFi IT (System Development Center) GLOBAL WiFi GLOBAL WiFi GLOBAL WiFi GLOBAL WiFi Vision Mobile Taiwan Inc. 5,000,000 GLOBAL WiFi VISION MOBILE USA CORP. 470,000 Vision Mobile New Caledonia SAS (Note) There are no wholly owned subsidiaries at the end of the current fiscal year. 1,000,000 100 CFP GLOBAL WiFi ―12― (6) Important Business Information Segment Description We purchase networks (data communication services) used by the local residents from carriers around the world, rent out mobile Wi-Fi routers to global travelers, and earn profits through providing services. We offer subscription services for various communication needs, sales of mobile communication equipment, sales of office automation equipment, and homepage creation all for start-ups, venture companies, and other general companies. GLOBAL WiFi Information and Communications Service ①Vision Group (7) Major Locations of the Corporate Group (as of December 31, 2021) ②Domestic Office Locations Headquarters Sales Offices 6-5-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo Sapporo, Narita, Shinjuku, Yokohama, Nagoya, Kansai (Osaka), Vision Future Business Center (Saga), Naha Airport Counters (including pick-up lockers) Narita International Airport, Haneda Airport, Chubu Airport, Kansai International Airport, Osaka International Airport, Asahikawa Airport, New Chitose Airport, Sendai Airport, Niigata Airport, Komatsu Airport, Fukuoka Airport, Kitakyushu Airport, Oita Airport, Miyazaki Airport, Kagoshima Airport, Naha Airport, Miyako Shimojishima Airport ―13― (8) Status of Employees (as of December 31, 2021) ①Number of Employees in the Group Number of employees Change compared to previous consolidated fiscal year Average age Average length of employment 10 less 1 more 9 less 35.5 years 7.7 years 31.0 years 4.4 years 34.0 years 6.6 years (Note) The number of employees listed does not include directors who also serve as employees and temporary employees (such as part time or temporary workers). ②Number of Employees in the Company Number of employees Change compared to previous consolidated fiscal year Average age Average length of employment 32 less 18 less 50 less 35.7 years 8.4 years 30.6 years 4.7 years 34.0 years 7.2 years (Note) The number of employees listed does not include directors who also serve as employees and temporary employees (such as part time or temporary workers). (9) Other Important Matters Regarding the Current Status of the Corporate Group Not applicable. Men Women Total Men Women Total 400 207 607 330 155 485 ―14― 2. Matters Concerning the Company’s Stocks (December 31, 2021) (1) Total number of issuable shares 123,000,000 shares (2) Total number of issued shares 49,091,100 shares (3) Number of shareholders (4) Major shareholder 7,814 Kenichi Sano Shareholder Number of shares held Percentage of shares held % 12,460,900 shares The Master Trust Bank of Japan, Ltd. (Investment Trust) 6,252,000 Custody Bank of Japan, Ltd. (Investment Trust) GOLDMAN SACHS INTERNATIONAL STATE STREET BANK AND TRUST COMPANY 505001 INTERACTIVE BROKERS LLC GOVERNMENT OF NORWAY The Nomura Trust and Banking Co., Ltd. (Investment Trust) MSCO CUSTOMER SECURITIES Credit Saison Co., Ltd 5,003,100 2,798,008 2,372,342 1,579,500 1,223,300 850,100 824,844 542,400 26.18 13.14 10.51 5.88 4.99 3.32 2.57 1.79 1.73 1.14 (Note) 1. The Company held 1,501,590 shares of treasury stock at the end of the fiscal year. 2. The shareholding ratio is calculated after deducting treasury stock. 3. The shareholding ratio is rounded to the second decimal place. ―15― 3. Matters Concerning Stock Acquisition Rights of the Company (1) Stock acquisition rights issued to the officers as consideration for their execution of duties First stock acquisition rights Second stock acquisition rights Date issued Amount of stock acquisition rights Type and number of shares subject to stock acquisition rights Payment amount for stock acquisition rights Amount of property to be invested when exercising stock acquisition rights Stock acquisition rights usage period May 1, 2012 February 1, 2013 1,711 2 Ordinary stock: 1,026,600 shares 600 shares per stock acquisition right Ordinary stock: 1,200 shares 600 shares per stock acquisition right No payment required in exchange for stock acquisition rights 102,000 yen per stock acquisition right 170 yen per share 102,000 yen per stock acquisition right 170 yen per share May 2, 2014 – May 1, 2022 February 4, 2015 – February 3, 2023 Conditions of use See note 1 See note 2 Directors (Excluding outside directors) Number of holders: 1 Target number of shares: 1,026,600 shares Number of stock acquisition rights: 1,711 Number of holders:－ Target number of shares:－ Number of stock acquisition rights:－ Number of holders: 1 Target number of shares: 1,200 shares Number of stock acquisition rights: 2 Number of holders:－ Target number of shares:－ Number of stock acquisition rights:－ Auditors (Note 1) (Note 2) Conditions of use 1. The person to whom the stock acquisition rights have been allotted must be in the position of a director, corporate auditor, or employee of the Company when exercising the rights. However, this shall not apply if the approval of the Board of Directors of the Company is obtained for the exercise of rights. 2. If the holder of the stock acquisition rights dies, the inheritance of the stock acquisition rights shall not be permitted. However, it may be permitted if the Board of Directors approves. 3. The rights can be exercised from May 2, 2014 or one year from the date when the shares are listed on the financial instruments exchange, whichever is later. 4. Other conditions for exercising shall be as stipulated in the “Stock Acquisition Rights Allocation Agreement” concluded between the Company and the person to whom the stock acquisition rights have been allotted. Conditions of use 1. The person to whom the stock acquisition rights have been allotted must be in the position of a director, corporate auditor, or employee of the Company when exercising the rights. However, this shall not apply if the approval of the Board of Directors of the Company is obtained for the exercise of rights. If the holder of the stock acquisition rights dies, the inheritance of the stock acquisition rights shall not be permitted. However, it may be permitted if the Board of Directors approves. 2. 3. The rights can be exercised from February 4, 2015 or one year from the date when the shares are ―16― listed on the financial instruments exchange, whichever is later. 4. Other conditions for exercising shall be as stipulated in the “Stock Acquisition Rights Allocation Agreement” concluded between the Company and the person to whom the stock acquisition rights have been allotted. (2) Status of stock acquisition rights issued to Company employees as consideration for the execution of duties during the current fiscal year Not applicable. Date issued Amount of stock acquisition rights (3) Important matters regarding other stock acquisition rights, etc. (as of December 31, 2021) Third stock acquisition rights November 13, 2017 13,340 Type and number of shares subject to stock acquisition rights Ordinary stock: 4,002,000 shares 300 shares per stock acquisition right Stock acquisition rights payment amount 1,600 yen each Amount of property to be invested when exercising stock acquisition rights 258,900 yen per stock acquisition right 863 yen per share Stock acquisition rights usage period From April 1, 2019 until March 31, 2025 Written separately 159 people Conditions of use Number of allocations (Written separately) Conditions of use 1. If the operating income of the Company meets the conditions listed below, stock acquisition rights holders will be required to pay the percentage of the rights assigned according to the conditions (listed for each item). The stock acquisition rights multiplied by the “exercisable ratio” can be exercised from the first of the month following the submission date of the securities report for the period in which the operating income level is met. (1) When operating income for the fiscal year ending December 2018 exceeds 2.1 billion yen and operating income for the fiscal year ending December 2019 exceeds 2.6 billion yen, the exercisable ratio is 30% (2) When operating income for the fiscal year ending December 2020 exceeds 3.1 billion yen, the exercisable ratio is 30%. Note that when both conditions (1) and (2) are met, the exercisable rate is 60%. (3) Notwithstanding any of the above, if operating profit in any of the fiscal years from the fiscal year ending December 2018 to the fiscal year ending December 2021 exceeds 3.6 billion yen, the exercisable ratio is 100% 2. Stock acquisition rights, except for rights that have already been exercised, cannot be exercised if operating profit falls below 1.6 billion yen in any year between the fiscal year ending December 2018 and the fiscal year ending December 2021. 3. The holder of stock acquisition rights must be a director (excluding outside directors) or an employee of the Company or an employee of a subsidiary of the Company when exercising the stock acquisition rights. However, this shall not apply if the Board of Directors of the Company recognizes that there is an exception due to the expiration of the term of office, retirement age, or other justifiable reasons. 4. If the holder of the stock acquisition rights dies, inheritance of the stock acquisition rights shall ―17― not be permitted. However, if the Board of Directors of the Company approves the exercise of the stock acquisition rights by the heir in writing in consideration of various circumstances, the heir will be able to exercise the stock acquisition rights if the stock acquisition rights holder is alive. 5. Inheritance of stock acquisition rights by heirs is not permitted. 6. If the total number of issued shares of the Company exceeds the total number of issuable shares at that time due to the exercise of stock acquisition rights, the stock acquisition rights cannot be exercised. 7. The exercise of less than one stock acquisition right is not permitted. 8. Other conditions for exercising stock rights shall be as set forth in the “Stock Acquisition Rights Allotment Agreement”, made between the Company and the person to whom the stock acquisition rights are allotted. ―18― 4. Matters Concerning Company Officers (1) Names and Positions of Officers and Auditors (as of December 31, 2021) Company Position Name Roles and Important Concurrent Positions Vision Mobile Hawaii Inc. Representative director and president Vision Mobile Hong Kong Limited Chairman of the Board GLOBAL WIFI.COM PTE.LTD. Representative Director Vision Mobile Taiwan Co. Ltd. Chairman of the Board 上海高效通信科技有限公司, China Global WiFi France SAS président Vision Mobile Italia S.r.l. Presidente del CdA VISION MOBILE USA CORP. Director and President Vision Mobile New Caledonia SAS President Managing Director Vision Mobile Korea Inc. Director Vision Mobile Hawaii Inc. director and vice-president Vision Mobile Taiwan Co. Ltd. Chairman of the Board 上海高效通信科技有限公司, China VISION MOBILE USA CORP. Director Vice-President Sales Division Manager Vision Mobile Korea Inc. Director Vision Mobile Hawaii Inc. director and vice-president Vision Mobile Taiwan Co. Ltd. Chairman of the Board Best Link Inc. Representative Director 上海高效通信科技有限公司, China Global WiFi France SAS directeur général Vision Mobile Italia S.r.l. Consigliere VISION MOBILE USA CORP. Director Vice-President Vision Mobile New Caledonia SAS directeur général Alpha Techno Inc. Representative Director BOS Inc. Director Vision Ad Inc. Director Vision Digital Marketing Inc. Representative Director President and CEO Kenichi Sano Director and Managing Executive Officer Shinichi Nakamoto Director and Managing Executive Officer Kenji Ota ―19― Company Position Name Roles and Important Concurrent Positions Director Director Shinichiro Naito Findstar GROUP Representative Director TEMONA Inc. Director Shiori Harada LandReam Inc. Representative Director Boardwalk Capital Inc. Representative Director istyle, Inc. Director Geniee, Inc. Director VECTOR Inc. Director Director Michimasa Naka Full-time Auditor Kazuhiko Umehara － Auditor Junichi Motai Auditor Jun Houzumi Auditor Yoshinori Nakajima Certified Public Accountant Accounting Assist Co., Ltd. Representative Director ZOZO, Inc. Auditor CARTA HOLDINGS, Inc. Auditor Ficha Inc. Director Certified Public Accountants STREAM Co., Ltd. Representative Director and Vice President FirstLogic, Inc. Auditor Lawyer Head of Yoshinori Nakajima Law Office (Note) 1. Directors Shinichiro Naito, Shiori Harada, and Michimasa Naka are outside directors. 2. Audit & Supervisory Board Members Kazuhiko Umehara, Junichi Motai, Jun Houzumi, and Yoshinori Nakajima are external auditors. 3. The Company has designated Shinichiro Naito, Shiori Harada, Michimasa Naka, Kazuhiko Umehara, Junichi Motai, Jun Houzumi, and Yoshinori Nakajima, as independent officers based on the provisions of the Tokyo Stock Exchange. We have notified the exchange. 4. Audit & Supervisory Board Members Junichi Motai and Jun Houzumi are certified public accountants and have considerable knowledge of finance and accounting. 5. The Company has introduced an executive officer system in order to separate the functions of decision-making, improve the efficiency and speed of role, and strengthen the management system. (2) Outline of the Contents of the Limitation of Liability Contract The Company has a contract with outside directors and corporate auditors to limit liability for damages under Article 423, Paragraph 1, pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act. The maximum amount of liability for damages based on the contract is the amount stipulated by law. The limitation of liability is permitted only when the outside director or corporate auditor is in good faith and has no gross negligence in performing his/her duties. (3) Matters Relating to the Company’s Liability Insurance for Directors and Corporate Auditors The Company has a liability insurance contract with an insurance company for directors and corporate auditors as stipulated in Article 430-3, Paragraph 1 of the Companies Act. In the event that a claim for damages is made against an insured person, including directors and corporate auditors of the Company ―20― and its subsidiaries, due to the insured person’s actions (including omissions) based on their position as an officer of the Company or its subsidiaries, the insured person will be compensated for the damages and legal costs incurred. The insurance policy is scheduled to be renewed with the same policy. (4) Remuneration of Directors and Corporate Auditors for the Fiscal Year Under Review ① Matters related to the decision policy concerning the details of remuneration for each director The Company’s Board of Directors resolved and decided on the decision policy concerning remuneration, for each individual director at a meeting held on January 15, 2021. In accordance with the basic policy of ensuring objectivity and transparency by obtaining the opinions of the Board of Directors, of which the majority are outside directors, the amount of remuneration, for directors for the fiscal year under review was determined by the representative director based on the delegation by resolution of the Board of Directors, within the limit of the total amount of remuneration resolved at the General Meeting of Shareholders, taking into consideration the Company’s business performance and the individual level of contribution. The Board of Directors has confirmed that the remuneration of each Director is consistent with the decision policy, and the Company believes that it is in line with such policy. Directors and Corporate Auditors ② Matters related to the Resolution of the General Meeting of Shareholders regarding Remuneration for At the Extraordinary General Meeting of Shareholders held on September 15, 2004, it was resolved that the maximum amount of remuneration for Directors shall be 200 million yen per year (excluding employee salaries for Directors who also serve as employees), and the maximum amount of remuneration for Corporate Auditors shall be 20 million yen per year. The number of Directors and Corporate Auditors as of the close of this Extraordinary General Meeting of Shareholders is 3 and 1, respectively. ③ Matters related to the determination of individual remuneration for directors The person who has the authority to determine the amount of remuneration, etc., for directors of the Company or the policy for determining the method of calculation thereof is Kenichi Sano, President and Representative Director, who has been delegated by the Board of Directors. The Board of Directors has the authority to determine the amount to be paid, taking into consideration the overall situation. The reason for delegating the authority to make these decisions is that the Company believes that he is most knowledgeable about the Company’s business conditions and can make comprehensive decisions on executive compensation, given his valuable experience and expertise in consistently leading the Company’s management since its establishment. ④ Matters related to performance-linked compensation ⑤ Details of non-monetary remuneration, etc. Not applicable. Not applicable. ―21― (5) Amount of Remuneration for Directors and Corporate Auditors for the Current Fiscal Year Segment People Remuneration Officers (Outside directors) 6 (3) 30,396 thousand yen (13,200 thousand yen) Auditors (External auditors) 4 (4) 16,200 thousand yen (16,200 thousand yen) Total (Outside officers) 10 (7) 46,596 thousand yen (29,400 thousand yen) (Note) The amount of remuneration for directors does not include salaries for those who also work as employees. (6) Matters Relating to Outside Officers ① Relationships with other Corporations that are Important Concurrent Positions There are no special relationships between the Company and the important concurrent positions of the Company’s outside officers. ② Activity Status of Outside Officers during the Current Fiscal Year The activities of outside directors and external auditors for the current fiscal year are as follows. Director Shinichiro Naito Director Shiori Harada Director Michimasa Naka Auditor Kazuhiko Umehara Auditor Junichi Motai Main Activities Has attended all meetings of the Board of Directors and meetings of the Board of Corporate Auditors held in the current fiscal year, and made appropriate remarks based mainly on abundant experience in online marketing as well as experience and broad insight as a business owner of many years Has attended all meetings of the Board of Directors and meetings of the Board of Corporate Auditors held in the current fiscal year, and made appropriate remarks based mainly on abundant experience in the inbound travel business, many years of corporate management, and her vast insight. Has attended 18 of the 19 meetings of the Board of Directors and meetings of the Board of Corporate Auditors held in the current fiscal year, and made appropriate remarks based mainly on abundant experience in the financial industry and in global business, many years of corporate management, and his vast insight. Has attended all meetings of the Board of Directors and 14 meetings of the Board of Corporate Auditors held in the current fiscal year, and made appropriate remarks based on abundant experience at financial institutions, many years of corporate management, and his vast insight. He participates in other important meetings and audits the business execution of directors as a full-time corporate auditor. Has attended all meetings of the Board of Directors and 13 of the 14 meetings of the Board of Corporate Auditors held in the current fiscal year, and made appropriate remarks based on abundant experience and knowledge mainly cultivated as a certified accountant. ―22― Auditor Jun Houzumi Auditor Yoshinori Nakajima Has attended all meetings of the Board of Directors and 14 meetings of the Board of Corporate Auditors held in the current fiscal year, and made appropriate remarks based on abundant experience and knowledge mainly cultivated as a certified accountant. Has attended all meetings of the Board of Directors and 14 meetings of the Board of Corporate Auditors held in the current fiscal year, and made appropriate remarks based on abundant experience and knowledge mainly cultivated as a certified accountant. (Note) Board meetings by written resolution are excluded from the count. 5. Status of Accounting Auditor (1) Name of auditing company: KPMG AZSA (2) Amount of remuneration for the accounting auditor of the current fiscal year Bonus amount Amount of remuneration for the accounting auditor of the current fiscal year 33,000 thousand yen Total amount of monetary and other property benefits payable by the Company and its subsidiaries to the auditor (Note) 1. In the audit contract between the Company and the Accounting Auditor, the amount of audit fees for audits based on the Companies Act and audits based on the Financial Instruments and Exchange Act is not clearly classified and cannot be substantially classified. The total amount of fees is stated in the amount of compensation for the business year. 39,678 thousand yen 2. The Board of Auditors conducts necessary verifications on whether the contents of the accounting auditor’s audit plan, the status of performance of accounting audit duties, and the basis for calculating the compensation estimate are appropriate, and then the accounting auditor’s compensation, which we have decided to agree on the amount of. (3) Details of non-auditing services The Company pays the Accounting Auditor for financial due diligence work, which is a non-auditing service according to Article 2, Paragraph 1 of the Certified Public Accountants Act. (4) Policy for determining the dismissal or non-reappointment of the accounting auditor If the Accounting Auditor is experiencing serious hindrance to the audit work and is finding it difficult to properly fulfill their duties, and a different auditor is deemed necessary, then the Board of Corporate Auditors submits them to the General Assembly of Shareholders who will decide the content of the agenda regarding the dismissal or non-reappointment of the Accounting Auditor. Additionally, the Board of Corporate Auditors will dismiss the Accounting Auditor based on the consent of all Audit & Supervisory Board Members if the Accounting Auditor is deemed to fall under any of the items stipulated in each item of Article 340, Paragraph 1 of the Corporate Law. The Audit & Supervisory Board Members selected by the Board of Corporate Auditors will report the dismissal and the reason for the dismissal at the first general meeting of shareholders convened afterwards. ―23― 6. Company Structure and Policy The Board of Directors has established and resolved the “Basic Policy for Maintaining an Internal Control System” to ensure the appropriateness of business operations. The policy outline is as follows. (1) System to ensure that the execution of duties by directors complies with laws and regulations and the Articles of Incorporation, and other systems to ensure the appropriateness of operations ① System to ensure that the execution of duties by directors and employees complies with laws, regulations, and the Articles of Incorporation a. Compliance with laws and regulations, the Articles of Incorporation, and the Company’s management philosophy is regarded as the highest priority in corporate management for the execution of business by directors and employees, and there are established “Compliance Regulations”. b. In order to thoroughly implement compliance activities, we will establish a compliance committee with the president as the officer in charge and carry out company-wide efforts. c. An internal audit office will be set up to conduct internal audits on all activities of the business execution department based on the audit plan approved by the representative director and report the audit results to the representative director and corporate auditors. d. We have secure means for officers and employees to directly report violations or suspicious acts, one of which is an established and operate a reporting hotline that allows officers and employees to report to external authorities. We affirm that the identity of the whistleblower will not be disclosed without their consent (condition of anonymity) and there are no negative repercussions to the whistleblower. e. The Board of Directors recognizes that preparing an appropriate financial report is extremely important for maintaining and improving social credibility and has established effective internal checks so that false statements and errors are not in the prepared report. ② System for storing and managing information related to execution of duties by directors a. Based on the document management rules, the directors will save all documents (including electronic records) specified in the following list of materials. (a) Minutes of the General Meeting of Shareholders and related materials (b) Minutes of board meetings and related materials (c) Minutes of the management meeting and related materials (d) Minutes and related materials of other important meetings hosted by the directors (e) Other important documents regarding the execution of duties by directors b. In addition to the previous issue, the storage and management of documents related to company operations will be properly stored and managed based on “Document Management Regulations” and “Document Retention Period”. c. For electronic records stored or managed by the Company, security is ensured based on the “Information Security Regulations”, “Information Security Use Regulations” and “Information Security Management Regulations” to prevent information from leaking. ―24― d. Directors and corporate auditors can always directly view or copy the information stored and managed by each department. ③ Regulations and other systems for managing risk a. Regarding risk management, we have established “Risk Management Regulations” and made the president be the chief risk management officer. At the same time, we have established a risk management committee to implement risk management properly and efficiently. b. The policy for dealing with serious management risks and other important risk management matters will be fully deliberated at the Management Committee and particularly important matters will be reported to the Board of Directors. ④ System for ensuring the efficient execution of duties by directors a. In principle, the Board of Directors regularly meets once a month and also holds extraordinary general meetings as necessary to make emergency decisions. b. The status of execution of duties by directors are reported to the Board of Directors as necessary. c. The authority of directors and employees is exercised appropriately and efficiently based on the “Official Regulations of Administrative Authority”. ⑤ A system for ensuring the appropriateness of operations in the Group consisting of the Company and its subsidiaries a. Regarding the management of Group Companies, we request that they comply with the “Affiliated Company Management Regulations” established by the Company while we respect the independence of each company. b. Internal audits are conducted by the Internal Audit Office and Group companies are monitored as necessary for the execution of proper business. ⑥ Matters concerning the independence from directors of an employee requested by Audit & Supervisory Board Members for assisting in duties and matters a. The number of employees appointed to assist the Audit & Supervisory Board Members will be decided after the Audit & Supervisory Board Members and the Board of Directors deliberate. b. When the employee assists in the duties of the Audit & Supervisory Board Members, he/she shall not receive the instructions and orders of the directors. ⑦ Systems for directors and employees to report to the Audit & Supervisory Board Members a. Directors and employees shall report on the status of execution of their duties and other matters from time to time at the request of Audit & Supervisory Board Members. b. The general manager of the accounting department shall regularly report to the Audit & Supervisory Board Members about the content of their duties. c. In addition to attending Board of Directors meetings, Audit & Supervisory Board Members appointed by the Board attend important meetings such as the Management Council. ―25― effectively ⑧ Other systems to ensure that audits by Audit & Supervisory Board Members are conducted In addition to holding a regular meeting of the Audit & Supervisory Board Members once a month, the Audit & Supervisory Board Members hold an extraordinary meeting whenever necessary in order to exchange information and discuss the status of audit implementation and regularly receive reports from the Internal Audit Office and the Accounting Auditor. ⑨ Basic framework for eliminating involvement with anti-social forces a. We have established a compliance policy that we have no relationship with anti-social forces and will respond with a resolute stance. b. If an unfair demand comes from anti-social forces, the legal department will be the responding department and cooperate with related organizations such as the police. c. When finalizing business contracts, we must confirm that the business partner is not an anti-social force or related individual or corporation. d. When finalizing business contracts, we must confirm that neither side is an antisocial force and if a violation is discovered later, we will cancel the contract and claim damages. We will use the “regulations for exclusion of antisocial forces” clause in the contract. (2) Overview of the system to ensure the appropriateness of business We have established the above internal control system, and in addition to the Board of Directors, we have a risk management committee to regularly to consider management risks. As a result, we are reviewing various regulations and operations as necessary to improve the effectiveness of the internal control system. In addition to auditing, our full-time Audit & Supervisory Board Member has an established system that is able to monitor the status of business execution and risks related to compliance through interviews with managers and attendance at important internal meetings such as management meetings. The Internal Audit Office also conducts internal audits on a regular basis to verify that daily operations do not violate laws, regulations, articles of incorporation, internal regulations, etc. The Company has not stipulated a basic policy regarding the ideal type of person to control decisions (3) Basic policy relating to corporate control about finance and business policies. (4) Policy on determining surplus dividends The Group has not paid dividends in the past because we believe that prioritizing investments to strengthen our financial position, expand the business, and further increase corporate value will lead to the maximum return of profits to shareholders. We recognize that returning profits to shareholders is an important management issue as well. In the future, we will secure stable internal reserves necessary for strengthening our financial position and expanding our business, while taking into consideration the business environment surrounding the ―26― Group and implementing a stable and continuous return of profits to our shareholders. However, at this time, the possibility and timing of paying dividends is undecided. If paying surplus dividends, the basic policy is to pay a dividend once a year which is decided by the general meeting of shareholders. In addition, the Articles of Incorporation stipulate that based on the resolution of the Board of Directors, the Company may pay an interim dividend. ―27― Consolidated Financial Statement (As of December 31, 2021) Item (Assets) Cost Item Cost (Liabilities) (Unit: thousands of yen) Tools, equipment, and fixtures 42,622 Lease obligations Allowance for doubtful accounts -77,177 Provision for bonuses Current assets Cash and deposits Notes and accounts receivable- trade Lease investment assets Products Supplies Other Fixed assets Tangible fixed assets Buildings and other structures Machinery and delivery equipment Rental assets Land Leased assets Intangible fixed assets Software Goodwill Other Investments and other assets Investment securities Long-term loan Guarantee deposits Deferred tax asset 10,748,958 Current liabilities 7,602,426 2,183,816 15,088 202,581 5,801 816,422 Notes and accounts payable- trade Short-term loans payable Current portion of long-term loans payable Lease obligation Accounts payable – other Income taxes 4,183,203 Short-term surrender fees reserve 534,664 Other 345,362 Fixed liabilities 10,338 Long-term loans payable 66,590 Deferred tax liabilities 35,289 Other 3,306 Total liabilities 1,482,527 Shareholder’s equity 150,080 Share capital 1,332,425 21 Capital surplus Retained earnings income Treasury stock 2,166,011 252,428 Other accumulated comprehensive Valuation difference on available-for-sale securities Foreign currency translation adjustment 759,881 319,006 621,201 Subscription rights to shares Construction in process 31,155 (Net assets) Lease investment assets 14,294 Non-controlling interests Other 270,708 Allowance for doubtful accounts -71,508 Total net assets Total assets 14,932,162 Total liabilities and net assets ―28― 3,880,038 914,551 50,000 89,002 15,088 1,425,023 179,245 306,321 53,504 847,301 929,908 733,904 14,294 6,822 174,887 4,809,946 10,067,549 2,387,915 2,454,031 7,088,507 -1,862,904 46,101 5,109 40,991 6,116 2,447 10,122,215 14,932,162 Consolidated Profit and Loss Statement 25 From January 1, 2021 until December 31, 2021 Item Net sales Cost of sales Gross profit Selling, general, and administrative expenses Operating profit Non-operating income Interest income Dividends income Foreign exchange profit Subsidy income Other Non-operating expenses Interest expenses Payment fee Other Ordinary profit Extraordinary income Gain on sale of fixed assets Gain on sale of investments in securities Gain on sale of subsidiary shares Extraordinary losses Losses on retirement of fixed assets Losses on evaluation of investments in securities Net profit before income tax adjustment Corporate, resident, and business taxes Deferred income tax Net income Net income attributable to non-controlling interests Net income attributable to owners of parent ―29― (Unit: thousands of yen) ) Amount 761 4,615 26,130 3,954 12,357 5 5,953 3,125 649 14,940 9,197 9,334 27,977 180,526 220,004 18,100,837 9,092,592 9,008,244 7,903,207 1,105,037 47,819 9,083 1,143,772 24,787 37,311 1,131,249 400,530 730,718 1,588 729,129 Statement of Changes in Shareholders’ Consolidated Equity (From January 1, 2021 until December 31, 2021) Balance at the beginning of the period Variation for the current period Issuance of new shares (Exercise of subscription rights to shares) Net income attributed to owners of parent company Acquisition of treasury stock Increase by share delivery Current variation (net) for items other than shareholders’ equity Total variation during the period Balance at the end of the current period (Unit: thousands of yen) Shareholders’ Equity Capital Capital Surplus Treasury Stock Capital Reserve Total Shareholders’ Equity 2,363,785 2,396,243 6,359,377 -2,416,784 8,702,621 24,130 24,130 48,261 -57 -57 729,129 729,129 33,656 553,937 587,594 24,130 57,787 729,129 553,880 1,364,928 2,387,915 2,454,031 7,088,507 -1,862,904 10,067,549 ―30― Balance at the beginning of the period Variation for the current period Issuance of new shares (Exercise of subscription rights to shares) Net Income attributable to owners of the parent company Acquisition of treasury stock Increase by share delivery Current variation (net) for items other than shareholders’ equity Total variation during the period Balance at the end of the period Accumulated Other Comprehensive Income Valuation Differences on Other Securities Deferred Hedge Gains/Losses Foreign Exchange Translation Adjustment Account Total Accumulated Other Comprehensive Income Accumulated Other Comprehensive Income (Unit: thousands of yen) Subscription Rights to Shares Non-Controlling Interests 47,618 -721 -2,549 44,347 21,344 859 8,769,171 48,261 -57 587,594 729,129 -42,508 721 43,541 1,753 -15,227 1,588 -11,884 -42,508 721 43,541 1,753 -15,227 1,588 1,353,043 5,109 － 40,991 46,101 6,116 2,447 10,122,215 ―31― Balance Sheet As of December 31, 2021 Item Amount Item Amount (Liabilities) (Unit: thousands of yen) (Assets) Current assets Cash and deposits Accounts receivable – trade Leased investment assets Products Supplies Advance payment Prepaid expenses Others Fixed assets Buildings Structures Allowance for doubtful accounts Rental assets Land Construction in progress Intangible fixed assets Software Investment securities Affiliated company stock Capital Long-term loan Long-term loans payable to subsidiaries and affiliates Leased investment assets Tangible fixed assets 344,331 Fixed assets Machinery and equipment Vehicles and transport equipment 10,338 0 Tools, furniture, and fixtures 24,973 Total liabilities Investments and other assets 2,959,443 Other capital surplus 8,818,733 Current liabilities 6,101,981 Accounts payable – trade 1,944,223 Lease obligation 15,088 Accounts payable 196,531 Accrued expenses 5,324 Accrued corporate tax 217,259 119,054 272,884 -53,614 3,436,239 Advance payment Deposit Bonus reserve Short-term surrender and refund reserve Other 209,562 Lease obligation 6,731 Other 26,280 (Net assets) 35,289 Shareholders’ equity 31,155 Capital 132,464 Capital surplus 132,464 Capital reserve 213,137 Accumulated earnings 863,584 Other accumulated earnings 3,412 Fixed asset compression reserve 19,006 Surplus carried forward 635,450 Treasury stock 14,294 Evaluation/conversion difference Valuation difference on other securities Bankruptcy reorganization claim 17,106 Long-term prepaid expenses 3,780 Stock acquisition right Deferred tax asset Other 558,826 709,696 Allowance for doubtful accounts -78,853 Total net assets Total assets 12,254,973 Total liabilities and net assets ―32― 3,464,153 854,509 15,088 1,320,199 80,513 128,221 174,926 337,562 251,409 43,484 258,240 19,530 14,294 5,235 3,483,683 8,760,063 2,387,915 2,454,031 2,205,914 248,116 5,781,020 5,781,020 40,020 5,741,000 -1,862,904 5,109 5,109 6,116 – 8,771,289 12,254,973 Profit and Loss Statement From January 1, 2021 until December 31, 2021 ( ) (Unit: thousands of