Consolidated Financial Results
for the Second Quarter of the Fiscal Year Ending September 30, 2018 (FY9/18)(Six Months Ended March 31, 2018)[Japanese GAAP]May 15, 2018

Stock Exchange Listing: TSE

Company name: Evolable Asia Corp.
Stock code:
Representative:
Contact:

6191 (URL: http://www.evolableasia.com/)
Hideki Yoshimura, CEO
Yusuke Shibata, Director and CFO
TEL: +81-(0)3-3431-6191
Scheduled date of filing of Quarterly Report:
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results:
Holding of quarterly financial results briefing:

May 15, 2018–
Yes
Yes (for institutional investors and securities
analysts)(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Second Quarter (October 1, 2017 to March 31, 2018) of FY9/18(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales
Millions of yen

Operating income%

Millions of yen%

Profit attributable toowners of parent

Ordinary income
Millions of yen%

Millions of yen

37.5
(127)
–
(127)
–
43.5
385
32.1
359
35.2
Six months ended Mar. 31, 2018:
239 (-21.6%)
Six months ended Mar. 31, 2017:
305 (75.9%)
Profit per share
Fully diluted profit per share

Six months ended Mar. 31, 2018
3,437
Six months ended Mar. 31, 2017
2,498
Note: Comprehensive income (millions of yen)

Yen

Six months ended Mar. 31, 2018
Six months ended Mar. 31, 2017

%

–
55.4

(147)
248

Yen

–
14.09

(8.52)
14.89(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Millions of yen

As of Mar. 31, 2018
As of Sep. 30, 2017
Reference: Shareholders’ equity (millions of yen)

11,937
7,478
As of Mar. 31, 2018: 3,657

Equity ratio
%

4,059
3,226
As of Sep. 30, 2017: 2,773

30.6
37.2

2. Dividends
1Q-end2Q-endYen

Yen

Fiscal year ended Sep. 30, 2017–
Fiscal year ending Sep. 30, 2018–
Fiscal year ending Sep. 30, 2018 (Estimated)
Note: Revision to the most recently announced dividend forecast: None

Dividend per share
3Q-endYear-end
Yen

0.00
0.00

Total

Yen

Yen

–

7.00

7.00

–

10.00

10.00

3. Consolidated Forecast for FY9/18 (October 1, 2017 to September 30, 2018)
Net sales
Millions of yen(Percentages represent year-on-year changes)
Profit attributable toProfit per shareowners of parent

Operating income%

Millions of yen%

Millions of yen

Full year
7,050
–
1,500
–
Note: Revision to the most recently announced consolidated forecast: None

881

%

Yen

–

52.09

The Company has decided to voluntarily apply the International Financial Reporting Standards (IFRS) to the accountingof results from the announcement of full-year results for the fiscal year ending September 30, 2018. The consolidated
results forecasts for the fiscal year ending September 30, 2018 are thus prepared based on the IFRS, and noyear-on-year percentage changes are stated.

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scopeof consolidation): None
Newly included:– companies– companies

Excluded:(2) Application of special accounting methods for presenting quarterly consolidated financial statements: Yes(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None

(4) Number of outstanding shares (common stock)1) Number of shares outstanding as of the end of the period (including treasury shares)

As of Mar. 31, 2018:

17,341,800 shares

As of Sep. 30, 2017:

16,919,100 shares

As of Sep. 30, 2017:– shares

2) Number of treasury shares as of the end of the period– shares

As of Mar. 31, 2018:
3) Average number of shares issued during the period
Six months ended March 31, 2018:17,263,134 shares

Six months ended March 31, 2017:

16,683,562 shares* The current quarterly financial report is exempt from the quarterly review procedures performed by certified public accountants or
audit corporations.
* Explanation of appropriate use of earnings forecasts, and other special items
Forecasts of future performance in these materials are based on information currently available to the Company. Consequently, thesestatements incorporate many uncertainties. Please note that actual performance may differ from these forecasts due to changes ininternal or external factors affecting business operations and other factors.

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance ·························· 2(1) Explanation of Results of Operations ···································································· 2(2) Explanation of Financial Position ········································································· 4(3) Explanation of Consolidated Forecast and Other Forward -looking Statements ··················· 4
2. Quarterly Consolidated Financial Statements ····························································· 5(1) Consolidated Balance Sheet ··············································································· 5(2) Consolidated Statements of Income and Comprehensive Income ···································· 7(3) Consolidated Statements of Cash Flows ································································· 9(4) Notes to Quarterly Consolidated Financial Statements ··············································· 10
Notes on going concern assumptions ······································································ 11
Significant changes in shareholders’ equity ···························································· 11
Application of special accounting methods for presenting quarterly consolidated financial
statements ······································································································ 11
Changes in accounting policies ············································································· 11
Changes in accounting estimates ··········································································· 11
Segment information, etc. ··················································································· 12
Important subsequent events ················································································ 14-1-Evolable Asia Corp. (6191) Financial Results for the Second Quarter of FY9/18

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
During the first six months of the fiscal year under review, the Japanese economy showed a moderate economic recovery,
partly due to the effects of various policies amid the improved employment and income conditions, while the uncertainty of
the global economy and the impact of fluctuations in the financial and capital market demanded attention. The economy
continued to expand at a steady pace, supported by increased domestic demand and inbound tourist demand against thebackground of the upcoming Tokyo Olympics in 2020.
In the travel industry, the number of Japanese citizens who left Japan in the period from January to March 2018 totaled
4,620,000, increasing about 80,000 from the same period of the previous fiscal year according to the statistics released by theJapan National Tourism Organization (JNTO). In addition, the number of foreigners who visited Japan from January to March2018 surpassed 7,610,000. The number is rising steadily toward 40 million, the target for 2020 set in the Tourism Vision to
Support the Future of Japan, which the Japanese government adopted in March 2016.
Under these conditions, Evolable Asia Corp. (hereinafter the “Company”) continued expanding its operations anddiversifying its service lines with a focus on sales of domestic airline tickets as an online travel agency. In particular, theCompany worked on increasing the recognition of its brand AirTrip and the acquisition of customers. The Company also
continued to enhance its services for foreign visitors, making the most of it s online travel business expertise.
In the IT Offshore Development Business, which was launched in 2012, the Company steadily won customers in numerous
business categories and increased the number of engineers employed, focusing on the development of lab -type facilities inVietnam. The number of engineers hired grew to 873 as of the end of March 2018. In the Investment Business, which has
been developing in earnest since the stock was listed, the Company has been investing in growing companies. As of the en dof March 2018, the Company has invested in 32 companies.
In this business environment, the Company and its consolidated subsidiaries (the Group) achieved consolidated net sales of
3,437,135 thousand yen (up 37.5% year on year), consolidated operating los s of 127,315 thousand yen (down 133.0% year onyear), consolidated ordinary loss of 127,645 thousand yen (down 135.5% year on year), consolidated loss before income taxesof 127,645 thousand yen (down 135.5% year on year), and consolidated loss attributabl e to owners of parent of 147,095
thousand yen (down 159.1% year on year) in the first six months of the fiscal year under review.
The Company plans to adopt the IFRS in the fiscal year ending September 30, 2018. Under the IFRS, in the three months
under review, the Group recorded consolidated net sales of 3,458,178 thousand yen, consolidated operating income of

808,837 thousand yen, and consolidated profit attributable to owners of parent of 522,226 thousand yen (unaudited reference
values).
Operating results by segment are as follows.
(1) Online Travel Agency Business
The Group offers the following four services in the Online Travel Agency Business segment.
⁃ BtoC services (operation of PC and smartphone websites for selling travel commodities directly to general consumers)
The Company improved mass marketing and search engine marketing and renewed mission -critical systems significantly toacquire new customers. The Company also improved user interfaces to increase the number of repeat customers. These
contributed to a steady increase in the number of service users.
The recognition of the Company’s brand AirTrip increased, and strategic pricing and the active input of branding costs wereconducted to acquire customers.
- BtoBtoC services (travel content provision under brands owned by business partners)
The enhanced development of alliances with major partners, the provision of service s to match the needs of major partners,
and enhanced communication with partners contributed to an increase in service use. In addition, like the BtoC services,
measures for marketing and alliances with an emphasis on increasing customer numbers were promoted.
- BtoB services (wholesale to other travel agencies)
Trends in the airline industry and policies enforced by business partners affect these services to a certain extent. The onli ne
travel agency business for operators handling domestic airline tickets grew dynamically as a whole, with an increase in thenumber of domestic air routes in service. As a result, net sales for these services increased strongly.

-2-Evolable Asia Corp. (6191) Financial Results for the Second Quarter of FY9/18- BTM services (centralized management of internal approval procedures and arrangements assoc iated with corporate
business trips)
These services basically adopt a business model under which net sales expand in a manner that is linked with an increase in
the number of corporate customers and a rise in their usage rate. The services achieved growth attributable to initiatives takenby the Group, including the addition of salespeople and the identification of existing customers who used the services at a
relatively low rate.
As a result of the factors stated above, net sales for the Online Travel Agen cy Business segment amounted to 2,282,704
thousand yen and segment loss came to 32,431 thousand yen in the first six months of the fiscal year under review.
(2) IT Offshore Development BusinessIn the IT Offshore Development Business segment, the Group offers lab-type facility development services to customers
consisting mainly of e-commerce operators, web solution providers, and game and system developers in Ho Chi Minh, Hanoi
and Da Nang in Vietnam.
The Company’s lab-type facility development model is distinctive in that a team is formed with new dedicated staff members
hired for each customer. The model also enables customers to confirm the state of lab -type facility development on demand.
The Company assumes the assignment of dedicated staff members to each team on a medium- to long-term basis. For thatreason, the success or failure of development depends on employing workers suited to customer demands and motivating therespective engineers more.
In addition, these services basically adopt a business model under which customers are billed on the basis of man-months andthe number of workers. The number of engineers supplied to clients and the man -months affect net sales for themsignificantly. An increase in the number of engineers and a rise in the uni t cost due to development streamlining contributed
to sales growth in the fiscal year under review.
As a result of the factors stated above, net sales for the IT Offshore Development Business segment reached 1,053,279
thousand yen, and segment income totaled 90,113 thousand yen.
(3) Investment BusinessIn the Investment Business segment, the Group emphasizes synergies with the existing businesses and expands service lines
through aggressive M&A and capital alliances. The Group is pursuing investment in gro wing companies to improve
profitability. At the end of the second quarter under review, the Group had increased the number of companies in which it
invests to 32.
As a result, net sales for the Investment Business segment stood at 101,123 thousand yen, and segment income was 83,313
thousand yen.

-3-

Evolable Asia Corp. (6191) Financial Results for the Second Quarter of FY9/18(2) Explanation of Financial Position(Assets)
Total assets increased 4,459,194 thousand yen from the end of the previous fiscal year, to 11,937,834 thousand yen at the endof the first quarter under review. This result was mainly due to an increase of 1,168,581 thousand yen in cash and deposits, arise of 573,996 thousand yen in notes and accounts receivable - trade, an increase of 906,740 thousand yen in operational
investment securities, a climb of 1,144,488 thousand yen in goodwill and an increase of 267,072 thousand yen in software.
(Liabilities)
Liabilities increased 3,626,435 thousand yen from the end of the previous fiscal year, to 7,878,653 thousand yen at the end of
the first quarter under review. This result primarily reflected an increase of 435,772 thousand yen in notes and accounts
payable - trade, an increase of 1,131,704 thousand yen in short-term loans payable and a rise of 2,003,814 thousand yen in
long-term loans payable.
(Net Assets)
Net assets rose 832,758 thousand yen from the end of the previous fiscal year, to 4,059,181 thousand yen at the end of thefirst quarter under review. This result was mainly attributable to an increase of 817,628 thousand yen in capital surplus and adecrease of 265,530 yen in retained earnings.

(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
No changes have been made to the full-year forecasts for consolidated financial results announced in the Consolidated
Financial Results for the Fiscal Year Ended September 30, 2017 on November 14, 2017.

-4-

Evolable Asia Corp. (6191) Financial Results for the Second Quarter of FY9/18

2. Quarterly Consolidated Financial Statements(1) Consolidated Balance Sheet(Thousands of yen)
Second quarter of FY9/18(as of Mar. 31, 2018)

FY9/17(as of Sep. 30, 2017)
AssetsCurrent assets
Cash and deposits

2,139,151

3,307,733

Notes and accounts receivable - trade

1,386,136

1,960,132

Operational investment securities

1,100,489

2,007,229

Merchandise and finished goods

45,032

39,987

Deferred tax assets

78,16622,526

Accounts receivable - other

181,394373,251

Other

227,716

365,081

(16)

(128)

5,158,070

8,075,813

Buildings, net

153,550

169,364

Vehicles, net

105,372

116,278

Tools, furniture and fixtures, net

100,864

108,967

7,123–

366,910394,611

Goodwill

724,820

1,869,308

Software609,762

876,834–

2,244

1,334,582

2,748,388

31,801

30,616

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Construction in progress
Total property, plant and equipment
Intangible assets

Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets

12,597

24,213

Guarantee deposits
Claims provable in bankruptcy,
claims provable in rehabilitation and
other
Other

548,921625,391

25,43024,27425,75638,800Allowance for doubtful accounts(25,430)(24,274)

Total investments and other assets

619,075

719,021

Total non-current assets
Total assets-5-

2,320,569

3,862,021

7,478,640

11,937,834

Evolable Asia Corp. (6191) Financial Results for the Second Quarter of FY9/18(Thousands of yen)
Second quarter of FY9/18(as of Mar. 31, 2018)

FY9/17(as of Sep. 30, 2017)
Liabilities
Current liabilities
1,558,350

1,994,122

Short-term loans payable

655,159

1,786,864

Accounts payable - other487,496586,344

Accrued expenses

155,181

82,154

Income taxes payable

188,727

25,407

Provision for bonuses

46,85235,477

Provision for point card certificates
Provision for shareholder benefit
programCurrent portion of long-term loans
payableLease obligations

4,367

11,40526,39427,000122,258

662,326

Notes and accounts payable - trade

Deferred tax liabilities

5,574

5,574

–

112,579–

1,403

268,647

424,485

3,519,009

5,755,143

Long-term loans payable

622,780

2,086,526

Long-term guarantee deposited

81,528

17,101

Net defined benefit liability

5,094

8,398

Deferred tax liabilities

9,534

–

Forward exchange contracts
Other
Total current liabilities
Non-current liabilities

Lease obligations

14,270

11,483

Total non-current liabilities

733,208

2,123,509

4,252,217

7,878,653

Capital stock

1,031,127

1,040,384

Capital surplus

837,092

1,654,720

Total liabilities
Net assets
Shareholders’ equity

Retained earnings
Total shareholders’ equity
Accumulated other comprehensive
incomeValuation difference on
available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation
adjustment
Total accumulated othercomprehensive income

865,064599,534

2,733,284

3,294,639

39,718377,245

446

(731)

(216)

(13,966)

39,948362,547

Subscription rights to shares

48,72949,449Non-controlling interests

404,459

352,5443,226,422

4,059,181

7,478,640

11,937,834

Total net assets
Total liabilities and net assets-6-Evolable Asia Corp. (6191) Financial Results for the Second Quarter of FY9/18(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statement of Income)(For the Six-month Period)

Net sales

Six months ended
March 31, 2017
(Oct. 1, 2016 – Mar. 31, 2017)
2,498,179(Thousands of yen)Six months ended
March 31, 2018
(Oct. 1, 2017 – Mar. 31, 2018)
3,437,135

Cost of sales

396,456

1,120,278

Gross profit

2,101,723

2,316,857

Selling, general and administrative expenses

1,715,929

2,444,173

385,793(127,315)

Operating income (loss)
Non-operating income
Interest income

3,690

2,761

Foreign exchange gains
Share of profit of entities accounted forusing equity method
Other

3,752

11,580

468

–

991

1,913

Total non-operating income

8,903

16,255

5,017

12,681

1,974–

Non-operating expenses
Interest expenses
Provision of allowance for doubtful
accounts
Listing expenses

21,900

–

Other

6,370

3,903

Total non-operating expenses

35,263

16,584

Ordinary income (loss)

359,433(127,645)

Profit (loss) before income taxes

359,433(127,645)

Income taxes

73,877(57,871)

Profit (loss)
Profit (loss) attributable to non-controllinginterests
Profit (loss) attributable to owners of parent

285,556(69,773)

37,014

77,322

248,541(147,095)-7-

Evolable Asia Corp. (6191) Financial Results for the Second Quarter of FY9/18(Consolidated Statement of Comprehensive Income)(For the Six-month Period)
Six months ended
March 31, 2017
(Oct. 1, 2016 – Mar. 31, 2017)
Profit (loss)(Thousands of yen)Six months ended
March 31, 2018
(Oct. 1, 2017 – Mar. 31, 2018)285,556(69,773)–

337,527

Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

4,036(1,177)

Foreign currency translation adjustment

16,088(26,962)

Total other comprehensive income

20,125309,388

305,681239,614260,783

175,503

44,897

64,111

Comprehensive income
Comprehensive income attributable toComprehensive income attributable toowners of parent
Comprehensive income attributable tonon-controlling interests-8-Evolable Asia Corp. (6191) Financial Results for the Second Quarter of FY9/18(3) Consolidated Statement of Cash FlowsSix months ended
March 31, 2017
(Oct. 1, 2016 – Mar. 31, 2017)(Thousands of yen)Six months ended
March 31, 2018
(Oct. 1, 2017 – Mar. 31, 2018)

Cash flows from operating activities
Profit before income taxes

359,433(127,645)

Depreciation

44,676

114,380

Amortization of goodwill

13,73888,811

Increase (decrease) in provision(18,047)(3,054)

Interest and dividend income(3,690)(2,761)

Interest expenses

5,017

12,681

Listing expenses
Share of loss (profit) of entities accounted forusing equity method
Decrease (increase) in notes and accounts
receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts
payable - trade
Decrease (increase) in guarantee deposits
Increase (decrease) in long-term guarantee
deposits received
Decrease (increase) in investment securities
for sale
Decrease (increase) in other asset

21,900

–

(468)

–

227,713(538,070)

210,8215,044(118,680)

275,545(23,594)(8,318)(14,135)(58,747)(74,735)(421,337)(57,922)(100,521)

Increase (decrease) in other liability

64,93638,327

Subtotal

636,962(725,663)

Interest and dividend income received

3,690

2,761

Interest expenses paid

(5,003)(14,200)

Income taxes paid

(71,219)(175,054)

Net cash provided by (used in) operating
activities

564,430(912,156)

Purchase of investment securities(49,000)–

Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchase of intangible assets(131,783)(57,162)–

46,344(180,298)(318,893)

Cash flows from investing activities

Payments of loans receivable(3,000)–

Collection of loans receivable

600

1,136

Payments for lease deposits(75,990)(48,619)

Collection of lease deposits

13,514

21,439Proceeds from withdrawal of time deposits

110,188––(29,996)–22–(355,259)(315,768)(740,990)

Payments into time deposits
Proceeds from purchase of shares ofsubsidiaries resulting in change in scope of
consolidation
Purchase of shares of subsidiaries resulting inchange in scope of consolidation
Net cash provided by (used in) investing
activities-9-Evolable Asia Corp. (6191) Financial Results for the Second Quarter of FY9/18

Six months ended
March 31, 2017
(Oct. 1, 2016 – Mar. 31, 2017)
Cash flows from financing activities
Net increase (decrease) in short-term loans
payableProceeds from long-term loans payable(Thousands of yen)Six months ended
March 31, 2018
(Oct. 1, 2017 – Mar. 31, 2018)

7,929

906,778–

2,100,000

Repayments of long-term loans payable
Proceeds from issuance of shares resulting
from exercise of share acquisition rights
Payments for IPO-related expenses
Proceeds from issuance of share acquisitionrightsRepayments of finance lease obligations(9,786)(96,186)

5,418

18,513(4,000)

–

–

720

–

(2,787)

Repayments to non-controlling shareholders–(2,000)Cash dividends paid–

(117,765)(437)

2,807,273

4,142(14,442)

252,367

1,139,684

2,225,252

2,078,651

2,477,620

3,218,335

Net cash provided by (used in) financing
activities
Effect of exchange rate change on cash andcash equivalents
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of
periodCash and cash equivalents at end of period- 10 -

Evolable Asia Corp. (6191) Financial Results for the Second Quarter of FY9/18(4) Notes to Quarterly Consolidated Financial Statements(Notes on going concern assumptions)Not applicable.
(Significant changes in shareholders’ equity)
The Company acquired the shares of EA1 Corp. through a share exchange and made it a subsidiary on October 6, 2017.
As a result of this share exchange, capital surplus increased 349,934 thousand yen. In addition, the Company acquired
the shares of N’s Enterprise Inc. through a share exchange and made it a subsidiary on November 6, 2017. As a resultof the said share exchange, capital surplus increased 459,400 thousand yen.
Consequently, at the end of the second quarter under review, capital stock stood at 1,040,384 thousand yen and capitalsurplus came to 1,654,720 thousand yen.
(Application of special accounting methods for presenting quarterly consolidated financial statements )(Calculation of tax expenses)
The tax expenses are calculated by obtaining a reasonable estimate of the effective tax rate on profit before income
taxes for the fiscal year, which includes the first quarter under review, after the application of the tax effect accounting,and multiplying the profit before income taxes by the said estimated effective tax rate.
(Changes in accounting policies)
Not applicable.
(Changes in accounting estimates)
Not applicable.

- 11 -

Evolable Asia Corp. (6191) Financial Results for the Second Quarter of FY9/18(Segment information, etc.)
Segment Information
Six months ended March 31, 2017 (Oct. 1, 2016 – Mar. 31, 2017)
1. Information related to net sales and profits (losses) for the respective reportable segments(Thousands of yen)Amount onquarterly
consolidated
statement ofincome(Note 2)

Reportable segment
Adjustment(Note 1)

Online Travel
AgencyBusiness

IT Offshore
Development
Business

1,851,631

645,776771

2,498,179–

2,498,179–

49,795–49,795(49,795)–

1,851,631

695,571771

2,547,975(49,795)

2,498,179

587,236

59,276(5)

646,508(260,714)

385,793

Otherbusinesses

Total

Net sales
Sales to externalcustomers
Intersegment sales andtransfers
Total
Segment profits (losses)

Notes: 1. The adjustment of -260,714 thousand yen to the segment profits (losses) includes corporate expenses which mainly consist ofgeneral and administrative expenses that are not attributable to the reportable segments.
2. The segment profit or loss has been adjusted to the operating in come stated in the quarterly consolidated statement of income.

2. Information about impairment loss of property, plant and equipment or goodwill, etc. by reportable segment(Material impairment loss related to property, plant and equipment)
Not applicable.
(Material change in the amount of goodwill)
Not applicable.
(Material gain on bargain purchase)
Not applicable.
Six months ended March 31, 2018 (Oct. 1, 2017 – Mar. 31, 2018)
1. Information related to net sales and profits (losses) for the respective reportable segments(Thousands of yen)

Adjustment(Note 1)

Amount onquarterly
consolidated
statementof income(Note 2)

Reportable segment
Online Travel IT Offshore
AgencyDevelopBusinessment Business

Other

Investment
Business

Total

Total

Net sales
Sales to externalcustomers
Intersegment sales
and transfers

2,282,704

1,053,279

101,123

3,437,107

28

3,437,135–

3,437,135–

80,477–80,477–80,477(80,477)–

Total

2,282,704

1,133,757

101,123

3,517,585

28

3,517,613(80,477)

3,437,135

Segment profits (losses)(32,431)

90,113

83,313140,995(0)140,995(268,310)(127,315)

Notes: 1. The category “Other” includes the business segments not included in the reportable segments, such as advertising revenue.
2. The adjustment of -268,310 thousand yen to the segment profits (losses) includes corporate expenses which mainly consist ofgeneral and administrative expenses that are not attributable to the reportable segments.
3. The segment profit or loss has been adjusted to the operating income stated in the quarterly consolidated statement of income.

2. Matters regarding change of reportable segments
The Company launched the Investment Business in the previous consolidated fiscal year under review, and thereportable segments were changed from the Online Travel Agency Business, the IT Offshore Development Business,- 12 -

Evolable Asia Corp. (6191) Financial Results for the Second Quarter of FY9/18

and Other Businesses to the Online Travel Agency Business, the IT Offshore Development Business, and theInvestment Business.
Because of the lack of importance of the Investment Business for the first six months of the previous fiscal year, no
reclassification was carried out.
3. Information about impairment loss of property, plant and equipment or goodwill, etc. by reportable segment(Material impairment loss related to property, plant and equipment)
Not applicable.
(Material change in the amount of goodwill)In the Online Travel Agency Business, goodwill was posted upon the acquisition of the shares of consolidated
subsidiaries, N’s Enterprise Inc. and EA1 Corp. The goodwill posted upon these events was 997,395 thousand yen
and 237,887 thousand yen, respectively. These amounts of goodwill were tentatively determined because theappropriation of the acquisition cost is not completed.
(Material gain on bargain purchase)
Not applicable.

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Evolable Asia Corp. (6191) Financial Results for the Second Quarter of FY9/18(Important subsequent events)
1. Acquisition of Destination Japan Inc. to make it a subsidiary through a simplified share exchange
At the extraordinary meeting of the board of directors held on April 17, 2018, the Company decided to acquire
Destination Japan Inc. (hereinafter “Destination Japan”) and make it a subsidiary through a simple form of shareexchange (without undertaking the procedures for obtaining approval at the general meeting of shareholders), as
follows.
(1) Outline of the business combinationi. Name and business of the company to be acquired
Name

Destination Japan Inc.

Business
description

Operation of Wi-Fi rental and media services for foreign visitors toJapan

ii. Date of the business combination
Share exchange: May 16, 2018 (scheduled)iii. Legal form of the business combination
Share exchange with the Company as the wholly owning parent company and Destination Japan as thewholly-owned subsidiaryiv. Reasons for the business combination
The Company decided to acquire Destination Japan, which provides the “Japan Wireless” Wi-Fi rental service forforeign visitors to Japan, to make it a subsidiary in order to further expand the business in the field of foreign
tourists to Japan.
In the business for travel to Japan, the Company acquired all of the shares of El Monte RV Japan Co., Ltd. in July
2016 and launched the camper rental service for foreign tourists to Japan. Subsequently, in February 2017, theCompany established AirTrip Exchange Co., Ltd., a subsidiary, to launch the new money exchange business. In
April 2018, the Company merged the two subsidiaries engaging in the business of travel to Japan (El Monte RV
Japan Co., Ltd. and AirTrip Exchange Co., Ltd.) to expand the business in the field of foreign tourist s to Japan withan eye toward the future listing of the subsidiary (IPO).
Destination Japan is a company targeting foreign tourists to Japan solely with its Wi-Fi rental service for foreign
visitors to Japan, “Japan Wireless,” under the corporate philosophy “Make too many Japan-Lovers in the world.” Itis the pioneer of the Wi-Fi rental service for foreign visitors to Japan, having launched the service in 2013. Its brandhas been established with its long-time trust and good reputation through word of mouth.
The Group intends to expand the business of Destination Japan further by taking advantage of both the marketingand operations know-how the Company developed through the online travel agency business and the engineeringresources of the IT offshore development business, among others.
In the Company’s business of foreign tourism to Japan, in addition to the existing services such as camper s, money
exchange and private lodging, the Company will set about the Wi-Fi rental service in earnest to increase the numberof services that meet the needs of foreign tourists to Japan.
v. Ratio of voting rights acquired: 100%
(2) Acquisition cost for the company acquired
500 million yen- 14 -

Evolable Asia Corp. (6191) Financial Results for the Second Quarter of FY9/18(3) Class and exchange ratio of shares and scheduled number of shares to be issued
The Company(the wholly-owning parent
company upon the shareexchange)

Destination Japan(the wholly-owned subsidiary
upon the share exchange)1

251.26

Ratio of allocation in the shareexchange
Number of the shares to be issued
upon the share exchange

251,300

In the issue of the shares upon the share exchanged described above, the Company will issue new common stocks.
Method of calculation of the share exchange ratio
Yokoyama Accounting Firm assessed and calculated the stock value of Destination Japan by using both the discountcash flow (DCF) method, which will provide assessment results reflecting the profitability and prospects of thecompany assessed, and the book value per share method, which will achieve assessment with the lowest possibilityof arbitrary factors. In the calculation according to the DCF method, the corporate value was assessed bydiscounting the future cash flows calculated based on the business plan developed by Destination Japan at a certain
discount rate to obtain the present value.
2. Acquisition of DeNA Travel Co., Ltd. to make it a subsidiary
The Company decided to acquire the shares of DeNA Travel Co., Ltd. (hereinafter “DeNA Travel”) from DeNA Co.,
Ltd. at the extraordinary meeting of the board of directors held on May 14, 2018, and executed the b asic sharetransfer agreement for share transfer (for acquisition to make it a subsidiary).
(1) Outline of the business combinationi. Name and business of the company to be acquired
NameDeNA Travel Co., Ltd.

Business description

Provision of travel products and services, among other business

ii Main reasons for the business combination
The Company has conducted the online travel agency business by taking advantage of its strengths with domestic
airline tickets.
DeNA Travel has operated the general travel site with its core strengths in the foreign travel field. DeNA Travel isthe largest Japanese online travel agency company in the foreign travel field. Its transaction volume on aconsolidated basis for the latest period (the fiscal year ended March 31, 2018) was around 70 billion yen.*
The decision to acquire DeNA Travel to make it a subsidiary as described above was made for the purpose ofcreating more synergies by taking advantage of the strengths of both comp anies in the travel market.
*The transaction volume described above was not audited by the audit corporation.
iii. Timing of the business combination
Date of the resolution of the board of directors

May 14, 2020

Execution of the basic agreement

May 14, 2020

Date of execution of the share transfer agreement

May 18, 2018 (scheduled)

Date of execution of the share transfer

May 31, 2018 (scheduled)- 15 -

Evolable Asia Corp. (6191) Financial Results for the Second Quarter of FY9/18

iv. Reasons for the business combination
Acquisition of shares
v. Name of the company integrated after the acquisition
Yet to be determined.
vi. Ratio of the voting rights to be acquired
100%(2) Acquisition cost for the company to be acquired and breakdowns thereof by consideration type
Consideration for the acquisition: cash, 1,200 million yen(3) Breakdowns and amount of major expenses related to the acquisition
Remuneration for advisory services, etc.: 10 million yen (rough estimate)(4) Amount of goodwill realized, causes for realization of the said goodwill, and method and period of amortizatio nof the said goodwill
Yet to be determined.
(5) Amounts of the assets and liabilities received and assumed on the date of the business combination and major
breakdowns thereof
Yet to be determined.

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