Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Three Months Ended June 30, 2019
(Based on IFRS)
August 9, 2019
Company name:

Digital Garage, Inc.

Stock exchange listing: Tokyo
Securities code:
4819
Representative:
Inquiries:

URL

https://www.garage.co.jp/

Representative Director,
Kaoru Hayashi
President Executive Officer and Group CEO
Member, Board of Directors, Senior
Executive Officer, in charge of the Corporate Makoto Soda

TEL

Strategy Division
Scheduled date to file Quarterly Securities Report:

August 13, 2019

Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results:–Yes

Holding of quarterly financial results meeting:No03-6367-1111(Amounts are rounded off to the nearest million yen)
1. Consolidated financial results for the three months ended June 30, 2019 (from April 1, 2019 to June 30, 2019)(1) Consolidated operating results (cumulative)
RevenueThree months ended
June 30, 2019
Three months ended
June 30, 2018

Percentages indicate year-on-year changes

Profit before tax

Millions ofyen%

8,217(3.9)

8,548

–

Millions ofyen%

ProfitMillions ofyen

Profit attributable Comprehensive
to owners of parent
incomeMillions ofMillions%%%
yenof yen

2,218 (34.6)

1,617 (48.4)

1,624 (47.8)

4,589

24.5

3,394

3,135

3,113

3,684

–

–

Basic earnings per share––

Diluted earnings per share

Yen
Three months ended June 30, 2019
35.35
Three months ended June 30, 2018
65.96
(Note. Revenue and profit before tax represent the amount of continuing operations only.)

Yen
32.47
65.32

(2) Consolidated financial position
Total assets

As of June 30, 2019
As of March 31, 2019

Total equity

Millions of yen
147,253
146,890

Ratio of equity
attributable to owners ofparent to total assets
Millions of yen%
49,94833.9
46,60931.7

Equity attributable toowners of parent

Millions of yen
50,67747,345

2. Cash dividends
Annual dividends per share

Year ended March 31, 2019Year ending March 31, 2020

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––Yen
0.00

Yen–Yen
28.00

Yen
28.00

––––

Year ending March 31, 2020 (Forecast)(Note 1. Revision to the forecast on financial results: No)(Note 2. Fiscal year ending March 31, 2020 forecast is to be determined.)Total

3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2020 (April 1, 2019 to March 31, 2020)
In the field of investment and incubation in domestic and overseas unlisted companies in the Incubation Technology Segment, it is difficult toreasonably estimate the fair value of securities held by Digital Garage Group at the end of the fiscal year. Therefore, Digital Garage, Inc. does notdisclose consolidated financial forecasts.
14. Notes(1) Changes in significant subsidiaries during the three months ended June 30, 2019(changes in specified subsidiaries resulting in the change in scope of consolidation):(2) Changes in accounting policies and changes in accounting estimates
Changes in accounting policies required by IFRS:
Changes in accounting policies due to other reasons:
Changes in accounting estimates:––––(3) Number of issued shares (ordinary shares)
Total number of issued shares at end of period (including treasury shares)
As of June 30, 201947,361,600 shares As of March 31, 201947,341,600 shares

1,393,895 shares As of March 31, 2019

1,391,452 shares

Number of treasury shares at end of period
As of June 30, 2019

Average number of shares during period (cumulative from the beginning of the fiscal year)
Three months ended June 30, 201945,956,382 shares Three months ended June 30, 20182

47,194,467 shares

Condensed quarterly consolidated financial statements
Condensed quarterly consolidated statement of financial position(Millions of yen)
As of March 31, 2019

As of June 30, 2019

AssetsCurrent assets
Cash and cash equivalents

48,15441,549Trade and other receivables
Inventories

23,254232

22,990329

Operational investment securities
Other financial assets

26,695451

27,812
441

6
394

6
435

99,186

93,562

Property, plant and equipment
Goodwill

9,421
6,575

9,343
6,966

Intangible assets
Investment property

2,575
3,046

2,759
2,943

Investments accounted for using equity method
Other financial assets

19,1396,662

19,53011,884

Deferred tax assets
Other non-current assets

137
148

131
134

Total non-current assets

47,70453,691

146,890

147,253

Income taxes receivable
Other current assets
Total current assets
Non-current assets

Total assets3

(Millions of yen)
As of June 30, 2019

As of March 31, 2019
Liabilities and equity
Liabilities
Current liabilities
Borrowings

2,211

5,657

Trade and other payables
Other financial liabilities

45,799853

38,794
828

Income taxes payable
Other current liabilities

1,076
2,482

304
2,175

Total current liabilities

52,42047,758

Bonds and borrowingsOther financial liabilities

35,9595,430

35,837
5,710

Retirement benefit liability
Provisions

565
321

577
321

Deferred tax liabilities
Other non-current liabilities

4,744
106

6,286
88

Total non-current liabilities

47,125

48,81999,54596,576

Share capital
Capital surplus

7,504
4,235

7,531
4,237

Treasury shares
Other components of equity(5,026)
1,303(5,026)
4,275

Retained earnings

38,59338,931

Total equity attributable to owners of parent

46,60949,948Non-current liabilities

Total liabilities
EquityNon-controlling interests
Total equity
Total liabilities and equity

4736

729

47,34550,677

146,890

147,253

Condensed quarterly consolidated statements of income and condensed quarterly consolidated
statements of comprehensive income
Condensed quarterly consolidated statements of income(Millions of yen)Three months ended

Three months ended
June 30, 2018

June 30, 2019

Continuing operations
Revenue in recurring business
Revenue in operational investment securities

5,323
1,732

6,138
459

Other income
Finance income

664
104

817
1

Share of profit of investments accounted for using equity
method725

803

Total

8,548

8,217

Cost of sales

2,463

2,740

Selling, general and administrative expenses
Other expenses

2,582
72

2,951
78

37230

Total

5,154

5,999

Profit before tax
Income tax expense

3,394
1,078

2,218
601

Profit from continuing operations

2,317

1,617

Finance costs

Discontinued operations
Revenue

849–

Expenses

645–

Profit before tax
Income tax expense

204
8–
–

Profit after tax from discontinued operations
Loss (gain) on sales on discontinued operations

196
898

––

Income tax expense from sale of discontinued operations

275–Profit from discontinued operations

819

–

3,135

1,617

3,113

1,624

23(7)

Continuing operations
Discontinued operations

48.45
17.51

35.35
–

Total

65.96

35.35

Diluted earnings per share
Continuing operations

47.97

32.47

Discontinued operations

17.34

–

Total

65.32

32.47

ProfitProfit attributable toOwners of parent
Non-controlling interests
Earnings per share
Basic earnings per share5Condensed quarterly consolidated statements of comprehensive income(Millions of yen)Three months ended

Three months ended
June 30, 2018
ProfitJune 30, 2019
3,135

1,617

376

3,107

32(25)

141(112)

01

549

2,972

3,684

4,589

3,664

4,596

21(7)

Other comprehensive income
Items that will not be reclassified to profit or loss
Net change in fair value of equity instruments designatedas measured at fair value through other comprehensive
incomeShare of other comprehensive income of investments
accounted for using equity method
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Share of other comprehensive income of investments
accounted for using equity method
Other comprehensive income
Comprehensive income
Comprehensive income attributable toOwners of parent
Non-controlling interests

6Condensed quarterly consolidated statement of changes in equity
Three months ended June 30, 2018 (from April 1, 2018 to June 30, 2018)(Millions of yen)
Equity attributable to owners of parent
Other components of equity
Financialassetsmeasured
Share

CapitalTreasury

capitalsurplussharesat fairvaluethroughothercomprehensive

Exchangedifferences

Remeasurements

ontranslationof defined
benefitof foreign
operations

plans

Total

incomeBalance at April 1, 2018
Profit7,465

3,748(26)504410

141–551–
14–
14–

410

141–

551
–

Other comprehensive income
Comprehensive income
Issuance of new shares
Changes in ownership interest in
subsidiaries

1,575
–––

transactions
Forfeiture of share acquisitionrightsPurchase of treasury shares

27

–

3–(0)

Other
Balance at June 30, 2018

0(56)Dividends
Share-based remuneration

Total

1,071

–(0)

–

14(12)

(0)

–––

–

7,479

3,736

(26)

913

1,213

0

2,126

(Millions of yen)
Equity attributable to owners of parent
Retained earnings
Balance at April 1, 2018
Profit551

(2)

549

3,113

3,664
28

21

3,684
28

(56)

(46)

(103)

(1,133)transactions
Forfeiture of share acquisitionrightsPurchase of treasury shares
OtherTotal
Balance at June 30, 2018

483
23

Total

42,717
3,113

Changes in ownership interest in
subsidiaries
Dividends
Share-based remunerationinterests

29,955
3,113

Other comprehensive income
Comprehensive income
Issuance of new shares

Non-controlling

Total

43,1993,135(1,133)(1,133)

27

27

3

3(0)

(0)

(0)

(0)

(1,133)(1,131)(46)(1,177)31,93545,249457

45,706

7

Three months ended June 30, 2019 (from April 1, 2019 to June 30, 2019)(Millions of yen)
Equity attributable to owners of parent
Other components of equity
FinancialassetsSharecapitalCapitalsurplusmeasured
at fair

Treasurysharesvalue
throughothercomprehensive

Exchangedifferenceson

Remeasurements

translationof foreign

benefitplans

of defined

Total

operations

incomeBalance at April 1, 2019

7,504

4,235

(5,026)

ProfitOther comprehensive income
Comprehensive income
Issuance of new shares
Dividends

Total

(3)

1,303

3,082

(111)

––
2,971

3,082

(111)

–

2,971

––
27

–
–(24)

–

Purchase of treasury shares
Other
Balance at June 30, 2019

1,231

27

Share-based remunerationtransactions–75(0)

––(1)
27

2(0)

––––

7,531

4,237

(5,026)

3,157

1,120(3)4,275(Millions of yen)
Equity attributable to owners of parent
Retained earnings
Balance at April 1, 2019Non-controllinginterests

Total

Total

38,59346,609736

47,345

ProfitOther comprehensive income

1,624

1,624
2,971

(7)
0

1,617
2,972

Comprehensive income

1,624

4,596

(7)

4,589

(1,287)54(1,287)

54(1,287)

Share-based remunerationtransactions

(24)

(24)

Purchase of treasury shares
Other(0)
(1)

(0)
(1)

Issuance of new shares
Dividends

Total
Balance at June 30, 2019

(1,287)(1,258)–(1,258)

38,93149,948729

50,677

8

Condensed quarterly consolidated statements of cash flows(Millions of yen)Three months ended

Three months ended
June 30, 2018

June 30, 2019

Cash flows from operating activities
Profit before tax
Depreciation and amortization

3,394
465

2,218
530

Interest and dividend income
Interest expenses on borrowings and bonds

(19)
37(1)
63Share of loss (profit) of investments accounted for using
equity method

(725)

(803)

Loss (gain) on sales of shares of subsidiaries and associates
Decrease (increase) in trade and other receivables

(488)
(692)

(642)
865

Decrease (increase) in investment securities for sale
Decrease (increase) in inventories(2,685)(129)(1,148)(97)

Increase (decrease) in trade and other payables
Other(9,090)
136(7,083)(252)

Subtotal(9,796)(6,350)Interest and dividends received
Interest paid

612
(36)

783
(15)

Income taxes refund (paid)Net cash provided by (used in) operating activities from(840)

(957)

45–

(10,016)(6,540)Purchase of property, plant and equipment
Purchase of intangible assets

(168)
(211)

(263)
(386)

Purchase of investment securities
Proceeds from sale of investment securities(1,363)694(1)–Payments for acquisition of subsidiaries
Purchase of investments accounted for using equity method

––

(350)
(500)

Proceeds from sale of investments accounted for using equity
method906–

Payments of leasehold deposits and guarantee deposits
Other

(1)
24(776)418

Net cash provided by (used in) investing activities fromdiscontinued operations(2)–(121)(1,858)

discontinued operations
Net cash provided by (used in) operating activities
Cash flows from investing activities

Net cash provided by (used in) investing activities

9

(Millions of yen)Three months ended

Three months ended
June 30, 2018

June 30, 2019

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of long-term borrowings

5,393(624)

3,554
(228)

Repayments of lease obligations
Payments for acquisition of interests in subsidiaries from

(213)

(229)

(137)

–(1,045)(1,255)

2215

(8)

–

3,388

1,858

49

(65)

non-controlling interests
Dividends paid
OtherNet cash provided by (used in) financing activities fromdiscontinued operations
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents(6,700)(6,605)

Cash and cash equivalents at beginning of period

39,45048,154

Cash and cash equivalents

32,751

41,54910