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, 2020
(Based on IFRS)
Company name:

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

August 14, 2020

Digital Garage, Inc.
URL

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

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

TEL

Corporate Strategy Division
Scheduled date to file Quarterly Securities Report:

August 14, 2020

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, 2020 (from April 1, 2020 to June 30, 2020)(1) Consolidated operating results (cumulative)
RevenueThree months ended
June 30, 2020Three months ended
June 30, 2019

Millions ofyen

Profit before tax%

6,944 (15.5)
8,217

Percentages indicate year-on-year changes(3.9)

Millions ofyen%

ProfitMillions ofyen

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

405 (81.7)

154 (90.5)

224 (86.2)

2,218 (34.6)

1,617 (48.4)

1,624 (47.8)

Basic earnings per share

24.5

Yen
4.81
32.47

(2) Consolidated financial position
Total assets

As of June 30, 2020
As of March 31, 2020

4,589Diluted earnings per share

Yen
4.86
35.35

Three months ended June 30, 2020Three months ended June 30, 2019

1,454 (68.3)

Total equity

Millions of yen
159,853
162,296

Ratio of equity
attributable to owners ofparent to total assets
Millions of yen%
51,82432.4
52,03332.1

Equity attributable toowners of parent

Millions of yen
52,882
52,795

2. Cash dividends
Annual dividends per share

Year ended March 31, 2020
Year ending March 31, 2021

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––Yen
0.00Yen–Yen
38.00

Yen
38.00

––––

Year ending March 31, 2021 (Forecast)(Note 1. Revision to the forecast on financial results: No)(Note 2. Breakdown of year-end dividends for the year ended March 31, 202010.00 Yen)
(Note 3. Fiscal year ending March 31, 2021 forecast is to be determined.)1

Ordinary dividend: 28.00 Yen

Total

Commemorative dividend:3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2021 (April 1, 2020 to March 31, 2021)
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.
4. Notes(1) Changes in significant subsidiaries during the three months ended June 30, 2020(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:

NoNo
No
No

(3) Number of issued shares (ordinary shares)
Total number of issued shares at end of period (including treasury shares)
As of June 30, 2020

47,411,200 shares As of March 31, 2020

47,406,800 shares

1,390,449 shares As of March 31, 2020

1,390,316 shares

Number of treasury shares at end of period
As of June 30, 2020

Average number of shares during period (cumulative from the beginning of the fiscal year)
Three months ended June 30, 2020

46,018,284 shares Three months ended June 30, 2019245,956,382 shares

Condensed quarterly consolidated financial statements
Condensed quarterly consolidated statement of financial position(Millions of yen)
As of March 31, 2020

As of June 30, 2020

AssetsCurrent assets
Cash and cash equivalents

32,702

37,111

Trade and other receivables
Inventories

26,657319

19,210314

Operational investment securities
Other financial assets

36,546
1,323

36,303
1,339

324
980

351
535

98,852

95,163

Property, plant and equipment
Goodwill

21,367
7,689

20,955
7,689

Intangible assets
Investment property

3,496
2,932

3,639
2,888

Investments accounted for using equity method
Other financial assets

21,475
6,319

20,890
8,452

Deferred tax assets
Other non-current assets

45120

55
123

Total non-current assets

63,44464,690162,296

159,853

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

Total assets3

(Millions of yen)
As of June 30, 2020

As of March 31, 2020
Liabilities and equity
Liabilities
Current liabilities
Borrowings

4,927

6,909

Trade and other payables
Other financial liabilities

41,203
1,783

34,763
1,832

Income taxes payable
Other current liabilities

207
2,717

2
3,034

Total current liabilities

50,83846,539Bonds and borrowings
Other financial liabilities

38,247
13,55339,394
13,329Retirement benefit liability
Provisions

571
589

569
581

Deferred tax liabilities
Other non-current liabilities

5,426
278

5,753
806

Total non-current liabilities

58,66360,433

109,501

106,972

Share capital
Capital surplus

7,591
4,409

7,596
4,420

Treasury shares
Other components of equity(5,012)324(5,012)
1,624

Retained earnings

44,72143,196

Total equity attributable to owners of parent

52,033

51,824Non-current liabilities

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

4762

1,058

52,79552,882

162,296

159,853

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

Three months ended
June 30, 2019

June 30, 2020

Revenue
Revenue in recurring business
Revenue in operational investment securities

6,138
459

6,148
302

Other income
Finance income

817
1193
1

Share of profit of investments accounted for using equitymethod

803

300

8,217

6,944

2,740
2,951

2,764
3,453

78
230

69
252

5,999

6,539

2,218

405

Total
Expenses
Cost of sales
Selling, general and administrative expenses
Other expenses
Finance costs
Total
Profit before tax
Income tax expense
Profit

601

251

1,617

154

1,624(7)224(70)

35.35
32.47

4.86
4.81

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

Three months ended
June 30, 2019
ProfitJune 30, 2020
1,617

154

3,107

1,363(25)

6(112)(69)

10

Other comprehensive income

2,972

1,300

Comprehensive income

4,589

1,454

4,596

1,523(7)(69)

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

Comprehensive income attributable toOwners of parent
Non-controlling interests6Condensed quarterly consolidated statement of changes in equity
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
Financial

SharecapitalCapitalsurplusassetsmeasured

Exchangeat fairvalue

differences
onRemeasurements

throughothertranslationof foreign

benefit planscomprehensiveoperationsTreasuryshares

Totalof definedincomeBalance at April 1, 2019

7,504

4,235(5,026)

Profit (loss)
Other comprehensive income
Comprehensive income
Issuance of new shares
Dividends

Balance at June 30, 2019

3,082

(111)

3,082

(111)

(3)

1,303
–
2,971

–

27

27

––

(24)

–

Purchase of treasury shares
OtherTotal

1,231

–

Share-based remunerationtransactions

–75

–

2,971

(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

Profit (loss)
Other 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

7Three months ended June 30, 2020 (from April 1, 2020 to June 30, 2020)(Millions of yen)
Equity attributable to owners of parent
Other components of equity
FinancialassetsShare

CapitalTreasury

capitalsurplussharesmeasured
at fair

Exchangedifferences

value
throughontranslationothercomprehenof foreign
operations

Remeasurements

Totalof defined
benefit plans

siveincome
Balance at April 1, 2020
Profit (loss)

7,591

4,409

(5,012)

(798)
1,369

(69)

–
5–
5–

1,369

(69)

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

324––

1,299
–

1,299––

10transactions
Purchase of treasury shares–(0)

OtherTotal

(2)

(3)

Dividends
Share-based remuneration

Balance at June 30, 2020

1,125–(1)–

512(0)

––––

7,596

4,420

(5,012)

570

1,056

(2)

1,624

(Millions of yen)
Equity attributable to owners of parent
Retained earnings
Balance at April 1, 2020
Profit (loss)

44,721
224

52,033
224

224

Changes in ownership interest in
subsidiaries
Dividends
Share-based remuneration(1,749)transactions
Purchase of treasury shares
OtherTotalBalance at June 30, 2020

Totalinterests

Total

Other comprehensive income
Comprehensive income
Issuance of new shares

Non-controlling762(70)52,795
154

1,299

11,3001,523
10(69)

1,454
10(3)

365

362

(1,749)(1,749)1010(0)

(0)

(1)

(1)

(1,749)(1,732)365(1,367)43,196

51,824

1,058

52,8828

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

Three months ended
June 30, 2019

June 30, 2020

Cash flows from operating activities
Profit before tax
Depreciation and amortization2,218
530

405
874

(1)
63

(1)
62

Share of loss (profit) of investments accounted for using
equity method

(803)

(300)

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

(642)
865

–
7,367

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

175
5Increase (decrease) in trade and other payables
Increase (decrease) in accrued consumption taxes(7,083)66(5,354)884

Interest and dividend income
Interest expenses on borrowings and bonds

Other
SubtotalInterest and dividends received
Interest paid
Income taxes refund (paid)
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment

(317)

439

(6,350)
783

4,556
719

(15)
(957)

(21)
(458)

(6,540)

4,796

(263)

(1,182)

Purchase of intangible assets
Purchase of investment securities

(386)
(1)

(487)
(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
method–79(776)418(0)(63)(1,858)(1,653)

Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings

3,554
–

1,813
1,500

Repayments of long-term borrowings
Repayments of lease liabilities

(228)
(229)

(211)
(472)

–
(1,255)365(1,715)

Payments of leasehold and guarantee deposits
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities

Capital contribution from non-controlling interests
Dividends paid
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents

153

1,858

1,284

(65)

(18)

Net increase (decrease) in cash and cash equivalents(6,605)

4,408

Cash and cash equivalents at beginning of period

48,15432,702

Cash and cash equivalents

41,54937,1119