ビジョン（9416） – Notice of Convocation Annual General Meeting 2022　Matters Disclosed on the Internet

Matters Disclosed on the Internet in Accordance with Laws and Regulations and the Articles of Incorporation 21st Fiscal Year（January 1, 2021-December 31, 2021） ① Notes to Consolidated Financial Statements…1 ② Notes to Non-consolidated Financial Statements…15 Vision Inc. In accordance with laws and regulations as well as Article 16 of the Company’s Articles of Incorporation, the Company provides this information to shareholders by posting it on the Company’s website (https://www.vision-net.co.jp/). Notes on Consolidated Financial Statements (Notes to Basis of Presenting Consolidated Financial Statements, etc.) 1. Scope of Consolidation Number of consolidated subsidiaries:19 Names of consolidated subsidiaries Members Net Inc. Best Link Inc. Alpha Techno Inc. BOS Inc. Vision Ad Inc. Vision Digital Marketing Inc. Adval Corp. Vision Mobile Korea Inc. Vision Mobile Hawaii Inc. Vision Mobile Hong Kong Limited 無限全球通移動通信股份有限公司 GLOBAL WIFI.COM PTE.LTD. GLOBAL WIFI.UK LTD VISION VIETNAM ONE MEMBER LIMITED LIABILITY COMPANY 上海高效通信科技有限公司 Global WiFi France SAS Vision Mobile Italia S.r.l. VISION MOBILE USA CORP. Vision Mobile New Caledonia SAS Adval Corp. became a consolidated subsidiary in the current fiscal year following the share delivery on December 1, 2021. 2. Application of Equity Method Number of companies accounted for by the equity method: 1 company Affiliated company to which the equity method is applied: eeeats Inc. eeeats Inc. became an affiliate accounted for by the equity method from the current consolidated fiscal year due to the acquisition of its equity interest. ―1― 3. Fiscal Year of Consolidated Subsidiaries and Equity Method Affiliates Among the consolidated subsidiaries, Adval Corp. has a fiscal year ending May 31. In preparing the financial statements, a provisional settlement of accounts was made as of November 30, and adjustments necessary for consolidation were made for significant transactions that occurred during the period up to the consolidated fiscal year end. Additionally, Vision Mobile Hong Kong Limited and six other subsidiary companies have a fiscal year ending September 30, and in preparing the consolidated financial statements, the financial statements of the consolidated subsidiaries as of their fiscal year end are used, and necessary adjustments are made for important transactions that occurred during the period up to the consolidated fiscal year end. Although the fiscal year end of equity-method affiliates differs from the consolidated fiscal year end, the financial statements of the fiscal year of the equity-method affiliates are used. 4. Matters Relating to Accounting Policies (1) Valuation standards and methods for important assets ① Marketable securities Available-for-sale securities Securities with market quotations … Market value method based on market prices, etc. as of the end of the fiscal year (Unrealized gains and losses are included directly in net assets and cost of sales is calculated using the moving-average method.) Securities without … Cost method based on moving average cost method market quotations ② Derivatives Market value method ③ Inventories Merchandise … Stated at cost determined by the first-in, first-out method (Method of devaluation of book value based on decline in profitability) Supplies … Stated at cost, cost being determined by the first-in, first-out method. (Method of devaluation of book value based on decline in profitability) (2) Depreciation and amortization methods for fixed assets ① Tangible fixed assets (a) Property, plants, and equipment other than leased assets The declining-balance method is used. However, the straight-line method is used for buildings (excluding building fixtures), rental assets, and building fixtures and structures acquired on or after April 1, 2016. ―2― The durable lives of major assets are as follows. Buildings and structures Machinery, equipment, and vehicles 2-50 years 2-17 years Tools, furniture, and fixtures 2-16 years Rental assets 2 years (b) Leased assets Leased assets related to finance leases that do not transfer ownership The straight-line method, where the lease period is deemed as the durable life and the residual value is set as zero, is used. ② Intangible fixed assets The straight-line method is used. Software for internal use is amortized over the estimated durable life (5 years). (3) Basis for significant reserves ① Allowance for doubtful accounts The allowance for doubtful accounts is provided for possible losses on receivables based on the historical write-off ratio for general receivables and on the estimated amount of uncollectible receivables based on a case-by-case determination of collectability for specific doubtful receivables. ② Allowance for bonuses To provide for bonuses payable to employees, an allowance is provided based on the estimated amount of payment. ③ Allowance for short-term cancellation refunds Estimated fee refunds related to short-term cancellations by infrastructure service subscribers and cell phone subscribers are recorded as an allowance for short-term cancellation refunds. (4) Conversion of significant assets and liabilities denominated in foreign currencies into Japanese currency Monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at the spot exchange rates prevailing on the consolidated balance sheet date, with translation differences recognized as gains or losses. Assets and liabilities of overseas subsidiaries are translated into yen at the spot exchange rate on ―3― the balance sheet date, and revenues and expenses are translated into yen at the average exchange rate during the period. (5) Significant hedge accounting methods ① Hedge accounting method Deferred hedge accounting is adopted. Forward exchange contracts that meet the requirements for the allocation method are accounted for using the allocation method. ② Hedging instruments and hedged items Hedging instruments: Forward exchange contracts Hedged items: Receivables and payables denominated in foreign currencies and forecasted transactions denominated in foreign currencies ③ Hedging policy The Company enters forward foreign exchange contracts to hedge risks arising from fluctuations in foreign exchange rates. ④ Method of evaluating hedge effectiveness The Company compares the cumulative cash flow fluctuations of the hedged item or market fluctuations with the cumulative cash flow fluctuations of the hedging instrument or market fluctuations and evaluates the effectiveness of the hedge based on the amount of fluctuation in both cases. However, the assessment of effectiveness is omitted for forward exchange contracts accounted for using the allocation method. (6) Amortization method and period of goodwill Goodwill is amortized by the straight-line method over a reasonable amortization period not exceeding 20 years. (7) Other important matters for the preparation of consolidated financial statements Accounting method for consumption taxes Consumption tax and local consumption tax are accounted for by the tax exclusion method. ―4― (Notes on Changes in Presentation Method) Consolidated Balance Sheet “Guarantee deposits” (514,765 thousand yen in the previous fiscal year), which was included in “Other” under “Investments and other assets” in the previous fiscal year, has become significant in terms of amount and is therefore presented separately in the current fiscal year. Consolidated Statements of Income “Exchange gains” (6,878 thousand yen in the previous consolidated fiscal year), which was included in “Other” under “Non-operating income” in the previous consolidated fiscal year, is stated separately from the current consolidated fiscal year due to its increased importance in terms of amount. Application of “Accounting Standard for Disclosures about Accounting Estimates” The “Accounting Standard for Disclosures about Accounting Estimates” (ASBJ Statement No. 31, March 31, 2020) is applied from the consolidated financial statements for the fiscal year ending March 31, 2020, and Notes Regarding Accounting Estimates are presented in the Notes to the Consolidated Financial Statements. (Notes on Accounting Estimates) The following is a list of items for which an accounting estimate has been recorded in the consolidated financial statements for the current fiscal year and which may have a material effect on the consolidated financial statements for the following fiscal year. 1. Valuation of goodwill recognized at the time of the acquisition of shares of Adval Corp. (1) Amount recorded in the consolidated financial statements for the current fiscal year (Unit：thousand yen) Current fiscal year Goodwill 1,332,425 (2) Information on significant accounting estimates related to identified items As a result of the conversion of Adval Corp. into a subsidiary in the current fiscal year, the Group recorded an unamortized balance of 1,234,494 thousand yen of goodwill identified as excess earning capacity on the consolidated balance sheet. The Group determines whether there is any indication of impairment of the asset group, including the recognized goodwill, mainly by monitoring the business plan achievement. When an indication of impairment of goodwill is detected, an impairment loss is recognized for the asset group if the total undiscounted future cash flows from the asset group including goodwill are less than the carrying amount of the asset group. Future cash flows are estimated based on business plans, which are based on key ―5― assumptions of various indicators, and these key assumptions are subject to uncertainty. If the key assumptions used in these estimates need to be revised due to changes in the economic environment or other factors, the amount of goodwill may be materially affected in the next consolidated fiscal year. 2. Recoverability of deferred tax assets (1) Amount recorded in the consolidated financial statements for the current fiscal year (Unit: thousand yen) Current fiscal year Deferred tax assets 621,201 (2) Information on significant accounting estimates related to identified items Deferred tax assets are recognized to the extent that the tax loss carryforwards and deductible temporary differences are expected to reduce the future tax burden. In determining the likelihood that taxable income will be earned, the Company makes a reasonable estimate of the timing and amount of taxable income that may be earned in the future based on its plans. Estimates of future taxable income are based on the Group’s plans, which incorporate key assumptions such as the timing of the cessation of new coronavirus infection. If the major assumptions used in the estimation need to be revised due to changes in the economic environment or other factors, a reversal of deferred tax assets may occur in the next consolidated fiscal year, which may affect the financial position and operating results of our group. (Notes to Consolidated Balance Sheets) Accumulated depreciation directly deducted from assets Tangible fixed assets 1,844,404 thousand yen Buildings and structures Machinery, equipment, and vehicles Tools, furniture, and fixtures Rental assets Leased assets 142,665 〃 6,220 〃 203,819 〃 1,449,182 〃 42,515 〃 ―6― (Notes to Consolidated Statement of Changes in Net Assets) 1. Class and total number of shares issued and outstanding as of the end of the current fiscal year Ordinary stock 49,091,100 shares 2. Class and total number of shares to be issued or transferred upon exercise of stock acquisition rights (excluding those for which the first day of the exercise period has not yet arrived) as of the end of the current fiscal year. Ordinary stock 2,385,300 shares (Notes on Financial Instruments) 1. Matters Concerning the Status of Financial Instruments (1) Policy on financial instruments The Group’s policy is to limit fund management to deposits and to procure funds mainly through bank loans. Derivative transactions are used to avoid foreign exchange fluctuation risks, and the Group’s policy is not to engage in speculative transactions. customer credit risk. (2) Description of financial instruments and their risks Trade notes and accounts receivable and lease investment assets are exposed to Investment securities are stocks of companies with which the Company has business relationships and are exposed to the risk of fluctuations in the market prices and financial conditions of the counterparty companies. Long-term loans receivable are loans to companies with which the Company has business relationships and are exposed to the credit risk of the counterparty companies. The department in charge is responsible for monitoring the credit status of the counterparties as necessary. Most of trade payables, such as trade notes and accounts payable and accounts payable-other, are due within three months. Lease obligations are for the purpose of procuring funds necessary for capital investment. Short-term loans payable and long-term loans payable are intended to procure funds necessary for working capital and capital investment and are exposed to interest rate risk and liquidity risk related to fund procurement. (3) Risk Management System for Financial Instruments ①Credit risk management (risk related to nonperformance of contract by counterparties) The Company has established a dedicated credit management department for operating receivables to manage due dates and outstanding balances for each counterparty and to early identify and mitigate concerns about collection due to deterioration of financial conditions and other factors. Consolidated subsidiaries also ―7― manage their receivables in the same manner. ②Management of market risk (market value fluctuation risk) Regarding investment securities, the Company periodically monitors the market prices and financial conditions of the counterparty companies and continuously reviews its holdings, taking into consideration market conditions and the relationship with the counterparty companies. ③Liquidity risk management (risk of not being able to make payments on due dates) related to fundraising The Company manages liquidity risk by preparing and updating cash management plans in a timely manner based on reports from each department and maintaining liquidity on hand. Consolidated subsidiaries also manage liquidity risk in the same manner. (4) Supplementary Explanation on Fair Value of Financial Instruments The fair value of financial instruments includes prices based on market prices and, in the absence of market prices, reasonably calculated values. Since variable factors are incorporated in the calculation of such values, such values may vary due to the adoption of different assumptions, etc. ―8― 2. Matters related to the fair value of financial instruments Carrying amount on the consolidated balance sheet as of December 31, 2021 (consolidated closing date for the current fiscal year), market value, and the difference between the two are as follows. Items for which it is extremely difficult to determine the fair value are not included in the following table (please refer to Note 2.) The following table does not include items for which fair value is extremely difficult to determine. (1) Cash and deposits (2) Notes and accounts receivable-trade (3) Investment securities (4) Long-term loans receivable (*1) (5) Lease investment assets (*1) (6) Notes and accounts payable trade (7) Short-term loans payable (9) Long-term debt (*1) (10) Lease obligations (*1) Market Value (thousand yen) Difference (thousand yen) Consolidated Balance Sheet Recorded Amount (thousand yen) 7,602,426 7,602,426 2,183,816 2,183,816 136,757 324,945 29,382 914,551 50,000 822,906 29,382 136,757 324,100 28,775 914,551 50,000 808,849 28,775 -845 -607 -1,453 － － － － － － -14,056 -607 Total Assets 10,277,328 10,275,875 (8) Accounts payable-other 1,425,023 1,425,023 Total Liabilities 3,241,864 *1. Long-term loans receivable, lease investment assets, long-term debt and lease obligations include current portion of long-term loans receivable, lease investment assets, current portion of long-term debt, and current portion of lease obligations. 3,227,200 -14,663 (Notes) 1. Calculation method of fair value of financial instruments Assets (1) Cash and deposits, (2) Notes and accounts receivable – trade Since these items are settled in a short period of time, their fair value approximates their book value. (3) Investment securities (4) Long-term loans receivable (5) Lease investment assets The fair value of investment securities is based on the price on the stock exchange. The fair value of long-term loans receivable is calculated by discounting the total amount of principal and interest at an interest rate that would be applicable to a similar new loan. The fair value of lease investment assets is calculated based on the present value of the total principal and interest discounted at an interest rate that would be applicable to a new similar lease transaction. ―9― Liabilities (6) Notes and accounts payable-trade, (7) Short-term loans payable, (8) Accounts payable-other Since these items are settled in a short period of time, their fair value approximates their book value. (9) Long-term loans payable The fair value of long-term loans payable is calculated by discounting the total amount of principal and interest by the interest rate that would be applicable to a similar new loan. The fair value of lease obligations is calculated based on the present value of the total principal and interest discounted at the interest rate that would be applicable to a new similar lease transaction. (10) Lease obligations 2. Carrying amount on consolidated balance sheets of financial instruments whose fair value is extremely difficult to determine Segment December 31, 2021 (Unit: thousand yen) Unlisted stocks (*1) Guarantee deposits (*2) 115,670 759,881 *1. Unlisted stocks are not subject to fair value disclosure because they do not have market prices and it is extremely difficult to determine their fair value. *2. Guarantee deposits are not stated at fair value because there is no market price, the timing of repayment cannot be reasonably estimated, and it is extremely difficult to determine the fair value. ―10― (Business Combinations, etc.) (Business combination through share delivery) At a meeting of the Board of Directors held on October 18, 2021, the Board of Directors of the Company resolved that the Company would become the parent company of the share issue and Adval Corp. (hereinafter referred to as “Adval”) as the share delivery subsidiary, and the share delivery became effective on December 1, 2021. 1. Outline of the Share Delivery (1) Name and Business of the Subsidiary to Which Shares will be Issued Name of the subsidiary to which shares will be issued: Adval Business description: Space management business (2) Purpose of the Share Issuance We have decided to make Adval a subsidiary because we believe that the issuance of shares will lead to medium- and long-term improvements in the corporate value of both companies, including an expansion of our group’s information and telecommunications services business and Adval’s customer base, higher sales using its know-how, more efficient procurement, and lower costs. Share delivery with the Company as the share-delivering parent company and Adval as (3) Effective date of the Share Delivery December 1, 2021 (4) Method of the Share Delivery the share-delivering subsidiary (5) Name of company after combination There is no change. (6) Percentage of voting rights acquired Percentage of voting rights held immediately before the share issuance: 0.78% Percentage of voting rights additionally acquired on the date of business combination: 49.32% Ratio of voting rights after acquisition: 50.10% (7) Main basis for determining the acquiring company Adval became a consolidated subsidiary of the Company based on the acquisition of 50.1% of its voting rights through the additional acquisition of its shares. ―11― 2. Period of performance of the acquired company included in the consolidated financial Since the deemed acquisition date is November 30, 2021, and the difference with the consolidated closing date has not exceeded three months, only the balance sheet is consolidated in the current fiscal year and the results of the acquired company are not included. statements 3. Matters related to the acquisition of additional shares of a subsidiary (1) Acquisition cost of acquired company and its breakdown Market value on the date of business combination of the acquired company held immediately before the delivery of shares Shares delivered upon additional acquisition 9,277 Thousand yen 587,594 〃 596,871 Thousand yen Acquisition cost (2) Details of allotments of shares Vision (Share delivery parent company) Adval (Subsidiary company to which shares will be issued) １ 4.7 Company common stock: 446,500 shares Allotment Ratio for the Share Issuance Number of shares to be delivered because of the Share Delivery (Note) 1. To ensure the fairness and appropriateness of the calculation of the share delivery ratio for this share delivery, the Company has requested a third party independent of the Company and Adval to calculate the share delivery ratio. (Note) 2. Number of shares to be delivered upon share delivery Upon the share delivery, 446,500 shares of common stock of the Company were allocated to the shareholders of Adval who applied for the Share Delivery as of the time immediately preceding the time when the Company acquired the outstanding shares of Adval, and the shares of common stock held by the Company were used for the share delivery. (3) Description and amount of major acquisition-related expenses Advisory fees: 6,500 thousand yen (4) Difference between the acquisition cost of the acquired company and the total acquisition ―12― cost for each transaction that led to the acquisition A marginal gain of 9,197 thousand yen related to acquisitions has been generated. (5) Amount of incurred goodwill, reason for incurrence, amortization method and period ①Amount of incurred goodwill 1,234,494 thousand yen ②Reason for incurrence It was generated from the excess earning power expected in the future. ③Amortization method and period Equal amortization over 8 years (6) Amount of assets acquired and liabilities assumed on the business combination date and their breakdown Current assets Fixed assets 198,084 thousand yen 529,861 〃 Total assets 727,946 Current liabilities Long-term liabilities Total liabilities 409,666 915,177 1,324,844 〃 〃 〃 〃 (Notes to Per Share Information) Net assets per share Net income per share (Notes on Significant Subsequent Events) (Business combination through acquisition) 212.52 yen 15.47 yen At the Board of Directors meeting held on November 17, 2021, the Company resolved to acquire 100% of the outstanding shares of Koshikano Onsen to make it a subsidiary and acquired all shares as of January 1, 2022. (1) Outline of Business Combination ① Name of acquired company and description of its business ―13― Name of acquired company: Koshikano Onsen Business description: Glamping lodging, hot spring lodging business ② Main reason for business combination We are preparing for the “glamping business” as a new core business of our group. Koshikano Onsen is a glamping company in Kirishima City, Kagoshima Prefecture that operates a glamping business with stand-alone tents that emphasize privacy, and by acquiring its shares, the Company plans to grow this business. ③ Date of business combination January 1, 2022 ④ Legal form of business combination Share acquisition ⑤Name of company after combination There is no name change. ⑥Percentage of acquired voting rights 100% ⑦Main basis for deciding the acquisition company This is due to the acquisition of shares in consideration of cash by the Company. (2) Acquisition cost of acquired company and breakdown by type of consideration Not determined at this time. (3) Details and Amounts of Major Acquisition-Related Expenses Advisory fees, etc. 3 million yen (4) Amount of goodwill incurred, reasons for incurring goodwill, amortization method and amortization period Not determined at this time. (5) Amount of assets acquired, and liabilities assumed on the date of business combination and their major breakdown Not determined at this time. (Note) Amounts shown in the consolidated financial statements are rounded down to the indicated unit. ―14― Notes to Non-Consolidated Financial Statements (Notes on Matters Related to Significant Accounting Policies) 1．Valuation Standards and Methods for Assets (1) Valuation standards and methods for assets ① Stocks of subsidiaries and affiliates Moving average cost method ② Available-for-sale securities Securities with market quotations … Market value method based on market prices, etc. as of the end of the fiscal year (Unrealized gains and losses are included directly in net assets and cost of sales is calculated using the moving-average method) Securities without … Moving average cost method market quotations (2) Valuation standards and methods for derivatives Market value method (3) Valuation standards and methods for inventories Merchandise: Stated at cost determined by the first-in, first-out method (Method of devaluation of book value based on decline in profitability) Supplies: Stated at cost, cost being determined by the first-in, first-out method. (Method of devaluation of book value based on decline in profitability) 2. Depreciation and Amortization Methods for Fixed Assets (1) Tangible fixed assets ①Property, plants, and equipment other than leased assets The declining-balance method is used. However, the straight-line method is used for buildings (excluding building fixtures), rental assets, and building fixtures and structures acquired on or after April 1, 2016. The durable lives of major assets are as follows. Buildings Buildings and structures Machinery and equipment Vehicles Tools, furniture, and fixtures Rental assets ②Leased assets 3 – 50 years 10 – 20 years 17 years 2 years 2 – 16 years 2 years ―15― Leased assets related to finance leases that do not transfer ownership The straight-line method, where the lease period is deemed as the useful life and the residual value is set as zero, is used. (2) Intangible assets The straight-line method is used. Software for internal use is amortized over the estimated durable life (5 years). 3. Accounting for Allowances and Reserves (1) Allowance for doubtful accounts To provide for losses due to bad debt, an allowance is provided for general receivables based on historical bad debt ratios, and for specific doubtful receivables based on the estimated uncollectible amounts determined by examining the collectability of individual receivables. (2) Reserve for bonuses estimated amount of payment. To provide for bonuses payable to employees, an allowance is provided based on the (3) Allowance for short-term cancellation refunds The estimated amount of fees to be returned for short-term cancellations of infrastructure service subscribers and cell phone subscribers is recorded as an allowance for short-term cancellation refunds. 4. Other Basis of Presenting Financial Statements (1) Standards for translating assets and liabilities denominated in foreign currencies into Japanese currency Monetary receivables and payables denominated in foreign currencies are translated into yen at the spot exchange rates prevailing on the balance sheet date, with translation differences recognized as gains or losses. (2) Hedge accounting methods ①Hedge accounting methods Deferred hedge accounting is adopted. Forward exchange contracts that meet the requirements of the allocation method are accounted for as if they were forward exchange contracts. ②Hedging instruments and hedged items Hedging instruments: Forward exchange contracts Hedged items: Monetary receivables and payables denominated in foreign currencies ―16― and forecasted transactions denominated in foreign currencies ③Hedging policy The Company enters forward foreign exchange contracts to hedge risks arising from fluctuations in foreign exchange rates. ④Method of evaluating hedge effectiveness The Company compares the cumulative cash flow fluctuations of the hedged item or market fluctuations with the cumulative cash flow fluctuations of the hedging instrument or market fluctuations and evaluates the effectiveness of the hedge based on the amount of fluctuation in both cases. However, the assessment of effectiveness is omitted for forward exchange contracts accounted for using the allocation method. (3) Accounting for consumption taxes Consumption tax and local consumption tax are accounted for by the tax exclusion (Notes on Changes in Presentation Methods) Income Statement “Exchange gains” (5,486 thousand yen in the previous fiscal year), which was included in “Other” under “Non-operating income” in the previous fiscal year, is independently presented in the current fiscal year due to its increased importance in terms of amount. (Application of “Accounting Standard for Disclosures about Accounting Estimates”) The “Accounting Standard for Disclosures about Accounting Estimates” (ASBJ Statement No. 31, March 31, 2020) is applied from the financial statements for the current fiscal year end, and notes regarding accounting estimates are included. (Notes on Accounting Estimates) The following is a list of items for which an accounting estimate has been made and the amount recorded in the financial statements for the current fiscal year that may have a material effect on the financial statements for the following fiscal year. method. ―17― 1. Valuation of stocks of subsidiaries and affiliates (Adval Corp.) (1) Amount recorded in the financial statements for the current fiscal year (Unit: thousand yen) Current fiscal year 863,584 Shares of subsidiaries and affiliates (2) Information on significant accounting estimates related to identified items The Company acquired shares of Adval Corp. in the current fiscal year and recorded 594,174 thousand yen of stocks of affiliated companies on the balance sheet, and the acquisition price includes the portion of excess earning capacity evaluated. The necessity of impairment of stocks of subsidiaries and affiliates is determined by comparing the acquisition cost with the actual value, and in the event of a significant decline in the actual value, impairment is recognized unless the possibility of recovery can be supported by sufficient evidence. Significant estimates in the valuation of stocks of subsidiaries and affiliates include excess earning capacity based on the issuing company’s business plan, etc. The key assumptions are described in the consolidated financial statements under “(Notes to Accounting Estimates) 1. Valuation of Goodwill Recognized upon the Acquisition of Shares of Adval Corp.” If the major assumptions used in the estimates need to be revised due to changes in the economic environment or other factors, it may have a significant impact on the number of shares of affiliated companies in the next fiscal year. 2. Recoverability of deferred tax assets (1) Amount recorded in the financial statements for the current fiscal year (Unit: thousand yen) Current Fiscal Year Deferred tax assets 558,826 (2) Information on significant accounting estimates related to identified items Notes to Consolidated Financial Statements “(Notes to Accounting Estimates) 2. Recoverability of Deferred Tax Assets” ―18― (Notes to Balance Sheet) 1. Accumulated depreciation directly deducted from assets Tangible fixed assets 1,735,366 thousand yen Buildings Buildings and structures Machinery and equipment Vehicles Tools, furniture, and fixtures Rental assets 100,440 〃 2,160 〃 4,241 〃 1,391 〃 188,575 〃 1,438,555 〃 2. Receivables and payables to subsidiaries and affiliates Monetary receivables and monetary payables from and payable to such affiliates other than those shown separately are as follows. Short-term monetary claims Long-term monetary claims Short-term monetary liabilities 336,261 thousand yen 4,800 〃 352,985 〃 3,250,837 thousand yen 546,090 〃 225,188 〃 51,370 〃 (Notes to Statements of Income) Transactions with subsidiaries and affiliates Transactions by operating transactions Net sales Purchases Other operating transactions Non-operating transactions (Notes to Non-consolidated Statement of Changes in Net Assets) Number of treasury stock at the end of the fiscal year Ordinary stock 1,501,590 shares ―19― (Notes on Tax Effect Accounting) Significant components of deferred tax assets and liabilities Deferred tax assets Allowance for bonuses Accrued enterprise taxes Accrued social insurance premiums Loss on valuation of investment securities Loss on valuation of stocks of subsidiaries and affiliates Allowance for doubtful accounts Allowance for short-term cancellation refunds Accrued salaries and wages Asset retirement obligations Excess depreciation Excess amortization of deferred assets Net operating loss carried forward Loss on valuation of goods Impairment loss Other Subtotal deferred tax assets Valuation allowance Total deferred tax assets Deferred tax liabilities Valuation difference on available-for-sale securities Reserve for advanced depreciation of fixed assets Total deferred tax liabilities Net deferred tax assets (Business Combinations, etc.) 76,981 thousand yen 15,809 〃 9,580 〃 134,856 〃 17,605 〃 40,564 〃 13,314 〃 19,406 〃 11,779 〃 3,709 〃 6,397 〃 286,839 〃 3,894 〃 145,847 〃 11,349 〃 797,936 thousand yen -217,709 〃 580,227 thousand yen -3,738 thousand yen -17,662 〃 -21,400 558,826 thousand yen thousand yen Notes are omitted because the same information is presented in (Business Combinations) of the consolidated financial statements. ―20― Business description or occupation GLOBAL WiFi Business, Information and Communication Services Business Advertising Business Information and Communication Services Business Glamping Business (Notes on Transactions with Related Parties) Subsidiaries and affiliates, etc. Type Company name Location Capital or funds (thousand yen) Voting Rights Held Percentage (%) Relationship with related parties Transaction details Transaction amount (Thousand yen) Account End of year balance (thousand yen) Subsidiary Best Link Inc. Shinjuku, Tokyo 10,000 Direct Owner- ship 100.0 Outsourcing of operations in the GLOBAL WiFi Business, fixed line telecommunications business, several concurrent directives, etc. Wholesale of telecommunication lines, charging of service fees Accounts receivable 270,256 3,248,118 Deposits received 266,119 Subsidiary Vision Ad Inc. Shinjuku, Tokyo 10,000 Direct Owner- ship 60.0 Loan of funds Receipt of interest 1,874 125,000 Long-term loans receivable from subsidiaries and affiliates (Note 3) Long-term loans receivable from subsidiaries and affiliates Long-term loans receivable from subsidiaries and affiliates 150,000 300,000 Loan of funds Interest income Loan of funds Interest income 150,000 189 300,000 552 Subsidiary Adval Corp. Shibuya, Tokyo 10,000 Direct Owner- ship 50.1 Loan of funds Unconsolidated Subsidiary Koshikano Onsen Kirishima City, Kagoshima 53,880 None Loan of funds (Note) 1. The transaction amounts in the above table do not include consumption taxes, while the ending balances include consumption taxes. 2. Transaction terms and policies for determining transaction terms Transaction terms such as prices and applicable interest rates for loans are determined through negotiations on a case-by-case basis, referring to prevailing market prices and market interest rates. 3. Allowance for doubtful accounts of 54,376 thousand yen is provided for loans to Vision Ad Inc. In addition, a provision for allowance for doubtful accounts of 3,342 thousand yen was recorded in the current fiscal year. (Notes to Per Share Information) Net assets per share Net income per share 184.18 yen 11.63 yen ―21― (Notes to Significant Subsequent Events) (Business combination through acquisition) The same information is provided in (Notes to Significant Subsequent Events) of the Notes to Consolidated Financial Statements and has therefore been omitted. (Note) Amounts shown in the financial statements are rounded down to the indicated unit. ―22―