Member of Financial Accounting Standards Foundation

Summary of Consolidated Financial Statements for the Term Ended September 30, 2018 (IFRS)
November 12, 2018
Exchange: First Section of Tokyo Stock Exchange
Name of listed company:

GMO Payment Gateway, Inc.

Stock code:

3769

Representative:

Issei Ainoura

President & Chief Executive Officer

Contact:

Ryu Muramatsu

Director, Executive Vice President

Tel: +81-3-3464-0182

Scheduled date for the holding of the ordinary
general shareholders’ meeting

December 16, 2018

Scheduled date of commencementfor dividend payment

December 17, 2018

Scheduled submission date of securities report

December 17, 2018

Supplemental materials prepared for financial
results

Yes

Information meeting arranged related tofinancial resultsYes (for institutional investors and analysts)

URL: https://corp.gmo-pg.com/en/(Amounts rounded down to the million yen)

1.

Consolidated Financial Statements for the Term Ended September 2018
(From October 1, 2017 to September 30, 2018)(1) Consolidated Financial Statements (Cumulative)
Revenue

FY2018FY2017

Operating profit(Percentages represent year-on-year % change)

Profit before
income taxes

Profit attributable toowners of parent

ProfitMillion yen% Million yen% Million yen% Million yen% Million yen
26,417 25.5
6,550 65.9
6,700 86.8
4,246 74.8
4,255
21,054

－

－

3,948

－

3,587

－

2,430

Total comprehensive
income% Million yen
75.8
6,085
－

2,420

Diluted net profit

%
124.7
－

2,708

Operating profit

Net profit per share

Return on equity

Return on assets

per share

ratio on net sales

Yen

Yen

%

%

%

FY 2018

57.75

57.46

19.1

6.7

24.8

FY 2017

32.58

32.58

12.9

5.1

18.8

Reference: Equity in earnings of affiliates: FY 2018: △203 million yen

FY 2017: △388 million yen

Note) In October 1, 2018, our company executed a 2-1 stock split. The values for the FY2017 are calculated on the same base.

(2) Consolidated Financial Position
Total assets

FY2018FY2017

Total equity

Million yen
116,858
84,338

Total equity
attributable to ownersof parent

Total equity attributable toowners of parent to total
assetsMillion yen
24,796
19,675

%
21.1
23.3

Million yen
26,02020,769Total equity
attributable toowners of parent per
share
yen
336.65264.83(Note) In October 1, 2018, our company executed a 2-1 stock split. The values for the FY2017 are calculated on the same base.

(3) Consolidated Cash Flows
Cash flow from operating

Cash flow from investing

Cash flow from financing

Closing balance of cash

activities

activities

activities

and cash equivalents

Million yen

Million yen

Million yen

Million yen

FY 2018

4,701△8,296

18,06742,033

FY 20171,850△2,012

2,627

27,533-1-

2.

Dividends
Dividends per share

FY 2017
FY 2018
FY 2019 (forecast)

1Q
Yen
0.00
0.00
0.00

2Q
Yen
0.00
0.00
0.00

3Q
Yen
0.00
0.00
0.00

Year-end
Yen
40.00
58.00
35.00

Total
Yen
40.00
58.00
35.00

Amount ofdividends(total)Million yen
1,485
2,154

Dividends
Ratio of dividends topayout ratio
net assets(consolidated)(consolidated)
%
%
61.4
7.9
50.2
9.6
50.5

(Note 1) In October 1, 2018, our company executed a 2-1 stock split. The values for the FY2019 (forecast) are calculated on the same
base.
(Note 2) The Group started voluntary application of IFRS in the present consolidated fiscal year.

3.

Consolidated Financial Forecast for the Fiscal Year Ending September 2019
(From October 1, 2018 to September 30, 2019)

Revenue

2Q of FY 2019
(cumulative)
Full year

Operating profit

Profit before
income taxes

Millionyen%

Millionyen%

Millionyen%

15,20231,850

21.1
20.6

4,150
8,300

26.9
26.7

4,052
8,108

27.4
21.0

-2-

(Percentages represent year-on-year change)
Basic
Profit attributable
Profitearnings
to owners of parent
per share
MillionMillion
%
%
Yen
yen
yen
2,469
5,206

26.9
22.6

2,424
5,106

23.5
20.0

32.91
69.32

Notices:
(1)

(2)

(3)

Changes of important subsidiaries during the period (change of specific subsidiaries that leads to a change in thescope of consolidation): No
Number of new subsidiaries: - (Name:), number of excluded subsidiaries: - (Name:)
Changes in the accounting policy / changes in the accounting estimation[1] Changes in accounting policy required by IFRS: No
[2] Changes in accounting policy other than [1]: No[3] Changes in accounting estimations: No
Number of shares issued (common stock)
FY2018: 74,301,000
FY2017: 74,301,000[1] Number of shares issued at the end of the term(including treasury stock)
FY2017: 5,000[2] Number of treasury shares at the end of the term FY2018: 5,000
FY2018:73,680,448
FY2017: 74,296,000[3] Average number of shares during the term
(Note 1) Number of treasury shares at the end of the term above does not include the shares attributed to the directors’
remuneration board incentive plan trust and J-ESOP (639,400 shares for FY2018; 640,000 shares for FY2017.)(Note 2) In October 1, 2018, our company executed a 2-1 stock split. The values for the FY2017 are calculated on the samebase.

* These financial statements are not subject to the review procedures.
* Notes regarding the appropriate use of financial forecast and other important notes
1. The Group has voluntarily been adopting IFRS on its consolidated financial statements since the consolidated fiscal year ending
September 30, 2018, and disclosing IFRS-based condensed consolidated financial statements from the first quarter.
2. The above forecasts are outlooks based on information currently available, and include various uncertain factors. Actual
performance may differ substantially from the forecasts due to changes in business conditions and other factors. For the assumption
on which financial forecasts are based and matters to be considered in using financial forecasts, please refer to “(4) Outlook” under“1. Qualitative Information on Consolidated Financial Statements for the Period” on page 12 of the attachment.
3 Results Presentation for Investors and Analysts: November 13, 2018. Supporting materials and a video of the presentation will bemade available on the company's website after the event.

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○Table of contents of attachment
1. Qualitative Information on Consolidated Financial Statements for the Period ......................................................... - 5 (1) Consolidated operating results ................................................................................................................................. - 5 (2) Status of consolidated financial position ................................................................................................................. - 10 (3) Basic policy on profit sharing and distribution for the current and next term .......................................................... - 12 (4) Outlook………………………………………………………………………………………………………………………...- 12 2.

Management Policy ............................................................................................................................................... - 13 -(1) Basic management policy of the Company ............................................................................................................ - 13 (2) Target management index…………………………………………………………………………………………………. - 13 (3) Challenges to be addressed by the Company ........................................................................................................ - 13 3.

Basic Stance on Accounting Standard Selection………………………………………………………………………..- 15 -4.

Condensed Consolidated Financial Statement…………………………………………………………………………..- 16 -(1)Condensed consolidated balance sheet……………………………………………………………………………………- 16 (2) Condensed consolidated statement of income ....................................................................................................... - 18 (3) Condensed consolidated statement of cash flows .................................................................................................. - 19 5.

Others ………………………………………………………………………………………………………………………..- 21 --4-

1. Qualitative Information on Consolidated Financial Statements for the period(1) Consolidated operating results
Forward-looking statements in the document are based on the judgement of the Group at the end of the period underreview. The Group started adoption of International Financial Reporting Standards (hereinafter called as “IFRS”) inplace of conventional JGAAP from cumulative first quarter of the current fiscal year. The Group presents earnings
figures for the full of the previous consolidated fiscal year under IFRS for comparative analysis.
① Consolidated operating results
The earnings results for the current consolidated fiscal year (October 1, 2017 to September 30, 2018) as follows.
(Unit: Thousand yen)Previous consolidated
Current consolidated
fiscal year
fiscal year
Rate of change (%)(From October 1, 2016
(From October 1, 2017
to September 30, 2017)
to September 30, 2018)
Revenue

21,054,421

26,417,320

25.5

Operating profit

3,948,395

6,550,904

65.9

Profit before income taxes

3,587,058

6,700,079

86.8

2,420,851

4,255,069

75.8

Profit attributable toowners of parent
a. Revenue

The Group’s revenue surged to 26,417,320 thousand yen, up by 25.5% year-on-year. Steady growth ofEcommerce market, coupled with expansion of the Group’s service coverage in non-Ecommerce field, has led
to an increased revenue in payment processing business. Our money service business revenue also rose withthe steady expansion of transaction value in GMO Payment After Delivery, an after-the-fact type of payment
service. Further, our payment enhancement business revenue grew, partly thanks to Macro Kiosk Berhad, theGroup’s consolidated subsidiary that provides a service of authentication, notification and mobile payment..
Our revenue breakdown by business model is as follows.
(Unit: Thousand yen)
Business model
Initial(Initial revenue)
Stock(Monthly revenue)
Fee(Transaction processing
revenue)
Spread(Merchant acquiring
service revenue)
Total

Previous consolidated
fiscal year
(From October 1, 2016
to September 30, 2017)

Current consolidated
fiscal year
(From October 1, 2017
to September 30, 2018)

Rate of change (%)

1,368,868

1,501,377

9.7

2,885,230

3,445,115

19.4

7,527,812

10,364,887

9,272,510

11,105,940

19.8

21,054,421

26,417,320

25.5

37.7

b. Operating profit
The Group’s operating profit reached 6,550,904 thousand yen, up by 65.9% year-on-year, on track for theGroup’s earnings forecast for the consolidated full fiscal year.
Segment-wise, payment processing business was 8,064,804 thousand yen, a year-on-year increase of 26.7％,-5-

Money Service Business stood at 1,377,684 thousand yen, a year-on-year increase of 847.4%,, and thepayment enhancement business amounted to △177,971 thousand yen, in contract with the income of 204,701
thousand yen in the previous year. The segment loss of payment enhancement business includes an
impairment loss of goodwill of 359.469 thousand yen relating to Marco Kiosk Berhad.
c. Profit before income taxes
Factors in a. and b. were translated into profit before income taxes of 6,700,079 thousand yen, a year-on-yearincrease of 86.8％. Since investment losses by equity method decreased while financial incomes increased ona year-on-year basis, the rate of increase of profit before income taxes for the current term exceeded that ofoperating profit.

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②Results by segment
Performance by reportable segment is explained below.
(Unit: Thousand yen)Segment
Payment Processing
Business
Revenue
Operating profit
Money Service Business
Revenue
Operating profit
Payment Enhancement
Business
Revenue
Operating profit
Adjustments
Revenue
Operating profit
Total
Revenue
Operating profit

Previous consolidated
fiscal year
(From October 1, 2016
to September 30, 2017)

Current consolidated
fiscal year
(From October 1, 2017
to September 30, 2018)

Rate of change (%)

11,899,839
6,364,768

14,801,499
8,064,804

24.4
26.7

4,967,201
145,4226,254,505
1,377,684

25.9
847.4

4,187,381
204,701

5,361,315△177,971

28.0－－△2,766,496－△2,713,612－－

21,054,421
3,948,395

26,417,320
6,550,904

25.5
65.9

a. Payment processing businessFor our payment processing business, the Group’s focus is on online payment, recurring payment and cardpresent payment.
Online payment and recurring payment left solid results that new merchants have successfully been acquired
due to revisions of the Installment Sales Act, with steady growth of Ecommerce markets. In addition to thegrowth of existing merchants, a wider variety of business operators other than those in the Ecommmercemarkets have also used the Group’s services, resulting in increase of the volume and value of payment
processing which has contributed to expansion of revenue of this business segment.
As part of the services to support financial institutions and financial service providers that promote new
businesses to create a cashless society, the Group has been providing “Ginko Pay” platform system. Ginko Pay
is a mobile phone payment service that links to bank accounts, and was developed jointly by the Bank of
Yokohama and the Group. The Group’s focus has been to add financial institutions and other partner operators
to its existing client base of Ginko Pay. It is the Bank of Yokohama, Ltd., the Bank of Fukuoka, Ltd., Kumamoto
Bank, Ltd. and Shinwa Bank Ltd, that used our platform to deliver the service during the period under review.
The Group has planned adoption of the platform by the three banks under Resona Group (Resona Bank,
Limited, Saitama Resona Bank, Limited, and The Kinki Osaka Bank, Ltd.), and the Japan Post Bank Co., Ltd.
Additionally, Tokyu Corporation, the Bank of Yokohama, Ltd., Japan Post Bank Co., Ltd. and the Group start todevelop a “Cash-out” service in which end users can withdraw cash from bank accounts through ticket vending
machines at the stations of Tokyu lines under the Ginko Pay platform.
As a result, the segment’s revenue came in at 14,801,499 thousand yen, a year-on-year increase of 24.4％, andits operating profit totaled 8,064,804 thousand yen, a year-on-year increase of 26.7％.

b. Money Service Business
Money Service Business (MSB) includes the Early Payment Service to help merchants receive sales proceeds
earlier and improve their cash flow, the Transaction Lending Service to lend growth capital to merchants basedon payment and other data, the Remittance Service, and the GMO Payment After Delivery that the Group’s
consolidated subsidiary GMO Payment Service, Inc. offers.
Points to note under the current consolidated fiscal year includes the steady expansion of GMO Payment After
Delivery by GMO Payment Service, Inc., and the rise of transaction value in Early Payment Service andRemittance Service. These contributed to the larger revenue and profit of the segment. In addition, the Group-7-

launched GMO B2B Early Payment and GMO B2B AR Guarantee on May 2018. These are the services ofbuying accounts receivable to turn it into cash for our clients at an early point, and covering for uncollectedaccounts receivables, respectively. These are the attempts to support the growth of BtoB operators in multiple
dimensions. In addition, the Group cooperated with Sompo Japan Nipponkoa Insurance Inc. and start to provide
GMO B2B Early Payment to providers who take out general commercial credit insurance of Sompo Japan
Nipponkoa Insurance Inc. on September 2018.
These factors have led to segment revenue of 6,254,505 thousand yen, up by 25.9％ year-on-year .As aresults that various corporate efforts to reduce credit risks decreased selling and general administrative
expenses (SG&A), segment operating profit of 1,377,684 thousand yen, up by 847.4% year-on-year-8-

c. Payment enhancement business
Payment enhancement business includes services of authentication and notification(EMS business) and aservice of mobile payment(MPS business) provided by our consolidated subsidiary Macro Kiosk Berhad and an
online advertising service that raises the sales of the Group’s merchants by analyzing their sales status andrunning their ads on their behalf based on their sales data.
Under the current consolidated fiscal year, As a result of Macro Kiosk Berhad’s revenue in its mainstay
authentication, notification and mobile payment business grew the revenue increased 28.0% year-on-year.
With respect to revenue by business, the revenue of EMS business as a core business of Macro Kiosk Berhad
increased by about 37.1% on a year-on-year basis, with an expectation of its continuous growth in the future.
On the other hand, the revenue of MPS business decreased by about 14.1% on the same basis. In addition tothese business situations, by taking market environment surrounding the Group and its competitors’ activities
into consideration, the Group considered that it would be likely to fail to achieve its original mid-term plan
formulated in acquiring the ownership of such company as a subsidiary and therefore posted an impairment
loss of goodwill of 359,469 thousand yen. However, the Group considers that such company has an important
position or role for business development of the Group in South East Asian markets, and Macro Kiosk Berhad
aims for continuous growth of its revenue and operating profit at an annual growth rate of 25% or more in the
future, by strengthening EMS business as well as by appropriately reducing costs and expenses.
As for our online advertising service, an external environment factor for part of the service resulted in a year-onyear decline in its ad-placement value and consequently, the entire service’s revenue.
As a result, the segment recorded a revenue at 5,361,315 thousand yen, a year-on-year increase of 28.0％,
and a segment operating loss of 177,971 thousand yen, that contrasts with the operating profit of 204,701
thousand yen in the same time previous year.
Please see below for the chart of major businesses and companies of such businesses by segment.
Segment

Major service

Major companies of the service

Payment processing service

GMO Payment Gateway, Inc.

Payment(Online billing and recurring billing)

Processing

Payment processing service

Business(card present payment)

subsidiary)

System development

GMO Payment Gateway, Inc.

GMO Payment after delivery

Money Service
Business

Remittance service
Transaction lending
Early payment service

Payment
Enhancement
Business

Mobile payment, authentication andnotification
Online advertising service-9-

GMO Epsilon, Inc. (consolidated subsidiary)
GMO Financial Gate, Inc. (consolidated

GMO Payment Service, Inc. (consolidated
subsidiary)
GMO Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)
GMO Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)
GMO Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)
Macro Kiosk Berhad (consolidated subsidiary)
GMO Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)(2) Status of consolidated financial position①Assets, liabilities and net assets
a. Assets
Total assets at the end of the current consolidated fiscal year under review were up 32,520,324 thousand yen
from the end of the previous consolidated fiscal year at 116,858,957 thousand yen. An increase of cash andcash equivalents by 14,499,608 thousand yen, an increase of advance payments by 5,461,523 thousand yen,
an increase of accounts receivable - other by 3,302,055 thousand yen and an increase in deposit to subsidiaries
and affiliates by 7,000,000 thousand yen contributed to the larger assets.
The Group has 5,000,000 thousand yen deposits to subsidiaries and affiliated companies included in the cash
and cash equivalents at the end of the current consolidated fiscal year. Together with the 7,000,000 thousand
yen deposits to subsidiaries and affiliated companies on the condensed consolidated balance sheet, the totalbalance of the Group’s deposits to subsidiaries and affiliated companies stands at 12,000,000 thousand yen.
These deposits are the Group’s cash on hand deposited under the cash management system (CMS). CMS is
the system that GMO Internet Group introduced to all its group companies for the management of their cash.
Therefore, the Group does not need to wait until the predetermined CMS repayment date comes to withdraw
capital. When the Group’s capital demand surges in accordance with the favorable progress of the business,
the Group can withdraw cash when needed by raising a request early enough to meet a predetermined
requirement.
b. Liabilities
Balance of liabilities at the end of the current consolidated fiscal year under review stood at 90,838,939
thousand yen, higher than the end of the previous consolidated fiscal year by 27,269,624 thousand yen. Suchincrease mainly came from accounts payable - trade by 1,180,759 thousand yen, an increase of accounts
payable - other by 3,042,408 thousand yen, an increase of deposits received by 3,822,138 thousand yen, an
increase of debt by 480,403 thousand yen and the addition of corporate bonds by 16,676,929 thousand yen.
c. Equity
Equity balance at the end of the current consolidated fiscal year under review was 26,020,018 thousand yen,higher by 5,250,700 thousand yen than the end of the previous consolidated fiscal year. Retained earnings
increase of 3,256,180 thousand yen led to the larger equity.
② Status of consolidated cash flows
Cash and cash equivalents (hereinafter called as “fund”) increased by 14,499,608 thousand yen over the current
consolidated fiscal year to 42,033,124 thousand yen. The state of cash flows over the current consolidated fiscal
year is presented below.
a. Cash flow of operating activities
Fund provided by operating activities in the current consolidated fiscal year amounted to 4,701,537 thousand
yen, which contrasts with the provision of 1,850,553 thousand yen in the same period a year before. Despite anincrease in advance payments by 5,461,523 thousand yen and an increase in accounts receivable – other by
3,317,499 thousand yen that dragged down the fund balance, an increase in profit before income taxes by
6,700,079 thousand yen and an increase in deposits received by 3,821,385 thousand yen have led to the fundexpansion on the whole.
b. Cash flow of investing activities
The amount of fund used for investing activities in the current consolidated fiscal year totaled 8,296,214
thousand yen, which contrasts with the usage of 2,012,253 thousand yen in the same period previous year. Thisis due to the outflow of 1,076,813 thousand yen from an acquisition of intangible assets, and the deposit to- 10 -

subsidiaries and affiliated companies for 7,000,000 thousand yen, in spite of the sales of investment securities
for 823,103 thousand yen.
c. Cash flow of financing activities
The amount of fund provided in financing activities over the current consolidated fiscal year totaled 18,067,432
thousand yen, which contrasts with the provision of 2,627,042 thousand yen in the same period previous year.
This is due to the issuing corporate bonds for 17,437,403 thousand yen despite the payout of dividends for
1,483,765 thousand yen.

- 11 -

(3) Basic policy on profit sharing and distribution for the current and next term
We consider that returning stable profit to our shareholders while continuing to secure retained earnings necessary
to expand business and to reinforce corporate robustness is our major management mission. We are planning to
pay 58 yen per share as dividend for the fiscal year under review.
As for the dividend for the next term, considering the strong expectations for our business expansion, we areplanning a dividend payout of 35 yen per share in a bid to further strengthen shareholder returns by continuing theconsecutive dividend increase and to enhance corporate value in the medium-to-long term.
The Group executed a 2-for-1 stock split of common stock as of October 1, 2018 for the purpose of expanding thebase of investors as well as of enhancing liquidity of its stocks, by creating an environment where all of theinvestors can make investments more easily. The expected dividend for the next term is the amount after
considering such split
We are committed to continue to effectively use our retained earnings for further enhancement of our corporate
strength and proactive business expansion.
(4) Outlook
The group’s core business is positioned in Ecommerce market in Japan. Japan’s B2C Ecommerce formerchandizing continues to grow rapidly, helped by favorable changes in the group’s external environment such as
spreading smartphone usage and logistic reforms. At the same time, horizon of Ecommerce market is broadening,
represented by enlarging B2B and C2C Ecommerce.
For the accounting period ending September 2019, The Group forecasts its revenue increase through activities
such as acquisition of major merchants and merchants with growth potential in online payment, recurring payment
and card-present payment fields in the payment processing business, and promotion of support services to financial
institutions and financial service providers, as well as due to the growth of Macro Kiosk Berhad in the payment
enhancement business.
Consequently, our earnings forecast for consolidated accounting period ending September 30, 2019 are as follows:
revenue 31,850 million yen (20.6% year-on-year increase); operating profit 8,300 million yen (26.7% year-on-yearincrease); Profit before income taxes 8,108 million yen (21.0% year-on-year increase); Profit attributable to ownersof parent 5,106 million yen (20.0% year-on-year increase).

- 12 -

2．Management Policy(1) Basic management policy of the Company
The management principle of the group is to “pursue both spiritual and material prosperity for our partners bycontributing to society.”■We contribute to the progress of our society with a strong intention to create and develop markets, and withtransparency in expanding businesses.
■We define our partners as our employees of high morals, customers and business partners.
■Our employees possess richness of spirit, advanced problem-solving abilities, and a high level of professionalism.
They always pursue richness of spirit when they exchange values with our customers.
Based on the management principle, our mission is to become the best payment infrastructure in Japan and tocontribute to safe and easy use of payment processing services for merchants and consumers. We are expanding
our businesses according to the following management policy:●Be responsive to society’s diverse and changing needs
Spirit of innovation： We strive to maintain/support technical superiority of our products
Flexibility： Our project proposals are appropriate for the growing market’s speed.
●Establish the value of existence
Uniqueness： We strive to maintain the value of our company's existence through customer-oriented services.
Profitability： We surpass competitors by pursuing revenue growth, and establish an unwavering position in the
Industry.
Independence / Education: Our training program is designed to cultivate business people with a high level of selfsufficiency who will become model employees in all aspects: performance results, attitude, and mindset.
●Pursue all possible conditions for making profit
Sociability： With a focus on healthy business, we will continue to actively develop untapped markets in the areaof various payment processing solutions.
Rationality： We always make business judgments quickly and impartially considering important economic
rationality.
●Be responsible to shareholders
We strive to maximize the shareholder value by considering capital efficiency.
In actively conducting IR activities we always provide our shareholders with appropriate information.
(2) Target management index
The group’s main management goal is a 25% growth in operating profit.
After the investments necessary to maintain a 25% CAGR in the medium-to long-term, operating profit increased
65.9% in the fiscal year ended September 30, 2018. We forecast operating profit to grow 26.7% in the fiscal year
ending September 30, 2019.
The group will continue to deliver online payment infrastructure, contributing to the creation of a more convenient andsecure Ecommerce environment and improvement of Japan’s Ecommerce ratio. We will also endeavor to expand ouroperations by developing new businesses, capital/ business tie-ups with partners, founding new subsidiaries, andexpanding services globally.
(3) Challenges to be addressed by the Company①Strengthening the information security
We provide credit card payment processing services, and process and manage material information such as credit
card numbers. As part of the process to strengthen risk management system and prevention of information leaks,
we obtained certifications of ISO/IEC 27001:2013 (Japanese Standards, JIS Q27001: 2014), the global standards
for information security management, for all of our business offices for the first time as a listed payment processing
services company. Consequently, our information security management system has been objectively assessed tobe appropriate and safe in compliance with strict international standards.

- 13 -

With regards to PCI DSS which was jointly established by five international credit card companies: JCB; American
Express; Discover; MasterCard; and VISA, after obtaining the first certification in December 2008, we have passed
annual recertification review nine times and have obtained the latest certification in December 2017.
Meanwhile, with respect to the handling of personal information, we obtained the privacy mark that certifies thecompanies which have improved the system for taking appropriate protection measures for personal information incompliance with the Japanese Industrial Standards “JIS Q 15001:2006 Personal Information Protection
Management System – Requirements.” We have independently established and operate the personal information
protection management system at a high level of protection in a manner that goes beyond mere compliance withthe laws.
②Strengthening the system development capabilities
The group’s business fields are deeply related to the Internet and we recognize that to provide customers withcompetitive products, it is important to adopt competitive technologies and services in a timely manner.
At present, our internal personnel incorporate changes in the system environment or requests from customers into
our system designs and outsource programming work to provide efficient and quality services. We will try tocontinue to secure highly-skilled developers and further strengthen system development capabilities and services.
③Strengthening the collaboration business
We recognize that to ensure stable growth, it is essential to establish mutually-beneficial business collaborations
with corporations covering many merchants, payment companies or Ecommerce website builders to efficiently
acquire new merchants.
The Company is fond of employing the above-mentioned business style, and it will continue to seek more of suchbusiness collaborations, which are and will be tracked by its management team.
④Expansion of business portfolio
As its management strategy, the group has always strived to expand its business domains; we have stretched
online payment fields of our coverage from mainly in B2C Ecommerce to public dues, utility charges, service
commerce, B2B and C2C market space; we have also started a new type of payment service with the founding of
GMO Payment Service Inc. In the previous fiscal year, we strengthened our overseas operations by acquiring
Macro Kiosk Berhad, and expanded offline payment business by turning GMO Financial Gate Inc. into our
subsidiary. We will continue to stretch our multifaceted business portfolio with its core being payment processing
service, and strive to consecutively boost profits.

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3．Basic Stance on Accounting Standard Selection
The group plans to voluntarily adopt International Financial Reporting Standards (IFRS) from the current fiscal year
considering its engagement in global business expansion. Migration to IFRS should improve convenience on the partof our various stakeholders including domestic/overseas shareholders and investors, making comparison of our
financial data with overseas peers easier and allowing for more expanded disclosure.

- 15 -

４．Condensed Consolidated Financial Statements（１）Condensed consolidated balance sheet

Date of transition to
IFRS(October 1, 2016)

End of previous
consolidated fiscal
year(September 30,
2017)(Unit: Thousand yen)
End of current
consolidated fiscal
year(September 30,
2018)

AssetsCurrent assets
Cash and cash equivalents
Operating and other receivables
Advance payments

25,091,091
11,984,007

27,533,515

42,033,124
13,236,930

6,388,955
1,468,519

13,769,014
16,806,222
12,415,909

39,35094,47864,537－－7,000,000

46,147430,194

50,895408,993

706,745
1,205,270

45,448,267

71,079,028

102,232,318

400,648
4,193,386

461,558
4,766,089

450,918
4,934,688

2,500,061

2,970,709

2,938,426

3,186,744
425,935

3,260,718
1,792,840

5,444,421
833,886

Other noncurrent assets

9,066

7,688

24,297

Total noncurrent assets

10,715,842

13,259,604

14,626,639

56,164,109

84,338,633

116,858,957

Accounts receivable - other
Inventories
Deposits to subsidiaries
and affiliates
Other financial assets
Other current assets
Total current assets
Noncurrent assets
Tangible assets
Goodwill and other intangible assets
Investments accounted forusing equity method
Other financial assets
Deferred tax assets

Total assets- 16 -

22,267,745
15,717,965

Date of transition to
IFRS(October 1, 2016)

End of previous
consolidated fiscal
year(September 30,
2017)(Unit: Thousand yen)
End of current
consolidated fiscal
year(September 30,
2018)

Accounts payable-trade
Accounts payable-other

2,785,256
2,902,451

3,482,504
12,697,663

4,663,264
15,740,072

Deposits received
Borrowings

27,634,302
43,86037,406,795
820,596

41,228,933
4,101,400

64,284
846,086

73,5491,574,603

98,852
1,530,203

Provision
Other current liabilities－
1,259,325－
1,853,615

7,388
2,030,282

Total current liabilities

35,535,567

57,909,327

69,400,397－
45,245124,533－
2,999,500
158,154

16,676,929

Borrowings
Other financial liabilities
Provision
Deferred tax liabilities

44,842
264,606

63,358230,045

64,055
205,749

1,097,758

2,208,928

2,107,484

Liabilities and equity
Liabilities
Current liabilities

Other financial liabilities
Income taxes payable, etc

Noncurrent liabilities
Corporate bonds

Other noncurrent liabilities
Total noncurrent liabilities

2,199,100
185,223

1,576,987

5,659,987

21,438,542

Total liabilities

37,112,554

63,569,315

90,838,939

EquityCapital stock

4,712,900

4,712,900

4,712,900

Capital surplus
Retained earnings

4,964,712
8,188,306

4,985,781
9,619,266

5,758,448
12,875,446

Treasury stock
Other items of equity
Total equity attributable to ownersof parent
Minority interests△265,236
357,654△256,269
613,768△491,893
1,941,305

17,958,338

19,675,447

24,796,206

1,093,216

1,093,870

1,223,811

19,051,554

20,769,318

26,020,018

56,164,109

84,338,633

116,858,957

Total equity
Total liabilities and equity- 17 -

（２）Condensed consolidated statement of income
Condensed consolidated statement of income

Revenue
Cost of revenue

Previous consolidated
fiscal year
(From October 1, 2016
to September 30, 2017)
21,054,421(Unit: Thousand yen)
Current consolidated fiscal
year(From October 1, 2017
to September 30, 2018)
26,417,320△6,530,238△9,080,227

14,524,183
235,743

17,337,092
165,290△10,536,010△275,520△10,470,657△480,820

3,948,395
71,2856,550,904
415,961△43,692△388,930△63,370△203,416

Gross profit
Other income
Selling,general and administrative expenses
Other expense
Operating profit
Financial income
Financial expense
Equity method investment gains or loss

3,587,058

6,700,079△1,156,785△2,453,113

2,430,273

4,246,965

Owners of parent
Non-controlling interests

2,420,851

4,255,069

9,421△8,104

Profit2,430,273

4,246,965

32.58
32.58

57.75
57.46

Profit before income taxes
Income tax expenses
ProfitProfit attributable toEarnings per share
Basic earnings per share (yen)Diluted earnings per share (yen)- 18 -

（３）Condensed consolidated statement of cash flows
Previous consolidated
fiscal year
(From October 1, 2016
to September 30, 2017)(Unit: Thousand yen)
Current consolidated fiscal
year(From October 1, 2017
to September 30, 2018)

3,587,058
782,553－

6,700,079
965,935
359,469△27,592△336,379

388,930

203,416△55,029

29,940△1,686,437

572,142△10,417,266△5,461,523△10,787,374△3,317,499

574,451

1,139,789

9,868,300

2,995,397

9,772,492

3,821,385

1,858,238
3,858,323
21,973△29,549

46,6797,718,835
23,943△39,929△20,000△30,000△227,555△67,041△1,752,639△2,904,269

1,850,553

4,701,537－△101,717△1,089,470△221,236△655,422△77,500△1,076,813△333,519

30,947823,103△466,122－△125,000－－△7,000,000－
27,225△70,791

79,200－△9,699

3,271

1,070

639

△46,632△2,012,253△8,296,214

Net cash provided by (used in) operating
activities
Profit before income taxes
Depreciation
Impairment loss
Financial income and expense(△=gains)
Equity method investment gain/loss(△=gains)
Increase/decrease in inventories(△=increase)
Increase/decrease in operating and otherreceivables (△=increase)
Increase/decrease in advance payments(△=gains)
Increase/decrease in accounts receivable- other(△=gains)
Increase/decrease in accounts payable- trade (△=increase)
Increase/decrease in accounts payable- other (△=increase)
Increase/decrease in deposits received(△=increase)
Other
SubtotalInterest and dividends received
Interest paid
Payment for deposit of guaranteed
deposit money
Payment on information
security countermeasure expense
Income taxes paid
Net cash provided by (used in) operating
activities
Net cash provided by (used in) investing
activities
Increase in rested deposits
Purchase of property, plants and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales and redemption of
investment securities
Purchase of stocks of subsidiaries andaffiliates
Purchase of other stocks of subsidiaries
and affiliates
Payment for deposit of deposit
to subsidiaries and affiliates
Collection of long-term loans receivable
Gain from liquidation of subsidiary
Acquisition of other financial assets
Proceeds from sales of other financial
assetsOthersNet cash provided by (used in) investing
activities- 19 -

Previous consolidated
fiscal year
(From October 1, 2016
to September 30, 2017)(Unit: Thousand yen)
Current consolidated fiscal
year (From October 1,
2017
to September 30, 2018)－

3,300,000

4,000,000△271,840－－△1,001,247△99,870－△821,156
17,437,403△249,782△1,483,765△115,267

2,627,042

18,067,432△22,918

26,852

2,442,424

14,499,608

25,091,091

27,533,515

27,533,515

42,033,124

Net cash provided by (used in) financing
activities
Net increase/decrease in short-termborrowings (△=decrease)
Proceeds from long-term borrowings
Repayment of long-term borrowings
Proceeds from issuance of corporate bonds
Purchase of treasury shares
Dividends paid
Other
Net cash provided by (used in) financing
activities
Effect of exchange rate changes on cash andcash equivalents
Increase/decrease in cash and cash
equivalents (△=decrease)
Balance of cash and cash equivalents at the
beginning of the period
Cash and cash equivalents at the end of thequarter- 20 -

5. Others
Changes of directors (planned to be effective December 16, 2018)①

Change of representative director
N/A②

Other changes of directors
The Group plans to newly establish a management meeting as a decision-making body for execution of important
operations in order to enhance its management supervision function by separation of supervision and execution.
Accordingly, the following officers will be relocated. The management meeting will consist of part of directors andexecutive officers including representative director, in pursuit of appropriate and quick decision-making as well as
efficient execution of operations.
・A new director candidate
Director

Hiroyuki Nishiyama(Current Director, Exective Vice President of GMO Internet, Inc.)

Director

Hiroshi Yamashita(Current Senior Managing Director of GMO Internet, Inc.)・An incumbent director to retire
Director

Tomoyuki Murakami(Planned to be Managind Exective Officer)

Director

Shinichi Sugiyama(Planned to be Managind Exective Officer)

Director

Yusuke Arai

(Planned to be Managind Exective Officer)

Director

Masaru Yoshioka(Planned to be Managind Exective Officer)

・A new auditor candidate
AuditorYumi Hokazono(Current President of Yumi Hokazono certified public accountant office )・An incumbent auditor to retire
AuditorYasuhiro Kanda- 21 -