Member of Financial Accounting Standards Foundation

Summary of Consolidated Financial Statements for the Term Ending September 30, 2015
October 30, 2015
Exchange: First Section of Tokyo Stock Exchange
Name of listed company:

GMO Payment Gateway, Inc.

Stock code:

3769

Representative:

Issei Ainoura

President & Representative
Director

Contact:

Ryu Muramatsu

Executive Vice President

Tel: +81-3-3464-0182

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

December 20, 2015

Scheduled date of commencementfor dividend payment

December 21, 2015

Scheduled submission date of securities report

December 21, 2015

Supplemental materials prepared for financial
results:Yes

Information meeting arranged related tofinancial results:Yes (for institutional investors and analysts)

URL: http://corp.gmo-pg.com/(Amounts rounded down to the nearest one million yen)

1.

Consolidated Financial Statements for the Term Ending September 2015
(From October 1, 2014 to September 30, 2015)(1) Consolidated Financial Statements(Percentages denote the increase or decrease from the previous period)
Net sales
Operating income
Ordinary income
Net income
FY2015FY2014

Million yen
9,030
7,205

%
25.3
25.0

Million yen
2,977
2,476

%
20.2
20.9

(Note) Comprehensive income: FY2015: 1,885 million yen (19.1%)

FY 2015
FY 2014

Net income per
share
Yen
52.60
43.92

Diluted net income
per share
Yen
52.57
43.87

Million yen
3,000
2,527

%
18.7
23.5

Million yen
1,853
1,515

%
22.3
24.5

FY2014: 1,583 million yen (28.6%)

Net income ratio toequity%16.1
24.4

Ordinary income
ratio to total assets
%
9.0
11.0

Operating income
ratio on net sales
%
33.0
34.4

Reference: Equity in earnings of affiliates: FY 2015: 20 million yen; FY 2014: -15 million yen(Note)
1) In October 1, 2014, our company executed a 2-1 stock split. The values for the FY2014 are calculated on the same base.
2) In order to appropriately display the net income per share, in regard to the stock attributed to the directors’ remuneration board
incentive plan trust, it has the right to a claim of dividend, and is therefore, not included in treasury stock.
3) Our company issued 2,587,300 shares of common stock through a third-party allotment with a payment date of June 25, 2015.

(2) Consolidated Financial Position

FY2015FY2014

Total assets
Million yen
41,831
24,613

Net assets
Million yen
16,1866,815

Equity ratio
%
38.7
27.7

Net assets per shareYen
435.78197.15

Reference: Equity: FY2015: 16,184 million yen FY2014: 6,808 million yen(Note)
1) In October 1, 2014, our company executed a 2-1 stock split. The values for the FY2014 are calculated on the same base.
2) Our company issued 2,587,300 shares of common stock through a third-party allotment with a payment date of June 25, 2015.

(3) Consolidated Cash FlowsFY 2015
FY 20142.

Cash flow from operating
activities
Million yen
3,709
3,088

Cash flow from investing
activities
Million yen-1,374-666

Cash flow from financing
activities
Million yen
7,398
-444

Closing balance of cash
and cash equivalents
Million yen
30,113
20,349Dividends
Dividends per share

FY 2014
FY 2015
FY 2016 (forecast)

1Q
Yen
—
—
—

2Q
Yen
0.00
0.00
0.00

3Q
Yen
—
—
—

Year-end
Yen
30.00
18.00
22.00

Total
Yen
30.00
18.00
22.00

Amount ofdividends(total)Million yen
518
668

Dividends
Ratio of dividends topayout ratio
net assets(consolidated)(consolidated)
%
%
34.2
8.3
34.2
5.7
35.0

(Note) In October 1, 2014, our company executed a 2-1 stock split. The values for the FY2014 does not take this 1:2 stock split into
account.

1

3.

Consolidated Financial Forecast for the Fiscal Year Ending September 2016
(From October 1, 2015 to September 30, 2016)(For the full year, percentages denote an increase or decrease as compared with the previous period. For the first six months of the period
under review, they denote an increase or decrease as compared with the second quarter of the previous year.)2Q of FY 2016
(cumulative)
Full year

Net sales
Million yen
5,216
11,413%Operating income
Million yen%

Ordinary income
Million yen
%

25.3
26.4

1,741
3,741

1,742
3,750

17.0
25.7

Profit attributable toowners of parent
Million yen
%

13.8
25.0

1,075
2,335

Net income
per share
Yen

14.7
26.0

28.95
62.87

Notices:
(1)
(2)

(3)

Changes of important subsidiaries during the period (change of specific subsidiaries that lead to a change in thescope of consolidation): No
Changes in the accounting policy / changes in the accounting estimation / restatement of corrections[1] Changes associated with the revision of accounting policy, etc.: No[2] Changes other than [1]: No[3] Changes in accounting estimations: No[4] Restatement of corrections: No
Number of shares issued (common stock)
FY 2014: 34,538,400[1] Number of shares issued at the end of the term
FY2015: 37,140,900(including treasury stock)
FY 2014: 2,278[2] Number of treasury stocks at the end of the term
FY2015: 2,500
FY2014: 34,514,576[3] Average number of shares
FY2014: 35,236,836
1) In October 1, 2014, our company executed a 2-1 stock split. The number of end of the period shares issued, the number ofend of the period treasury stock shares, and the average number of shares during the period are calculated on the assumptionthat the said stock split was implemented at the beginning of the previous fiscal year.
2) In order to appropriately display the number of treasury stocks at the end of the term and average number of shares, in regard
to the stock attributed to the directors’ remuneration board incentive plan trust, it has the right to a claim of dividend, and istherefore, not included in treasury stock.
3) Our company issued 2,587,300 shares of common stock through a third-party allotment with a payment date of June 25, 2015.

(Reference) Summary of Non-consolidated Statements
Non-consolidated Financial Statements for the Term Ending September 2015
(From October 1, 2014 to September 30, 2015)(1) Non-consolidated Financial Statements(Percentages denote the increase or decrease from the previous period)
Net sales
Operating income
Ordinary income
Net income
FY 2015
FY 2014

Million yen
6,749
5,456

%
23.7
23.8

Million yen
1,847
1,478

Net income per share
Yen
42.53
35.74

FY 2015
FY 2014

%
25.0
22.0

Million yen
2,213
1,831

%
20.9
26.6

Million yen
1,498
1,233

%
21.5
29.5

Diluted net income per share
Yen
42.51
35.70

1) In October 1, 2014, our company executed a 2-1 stock split. The values for the FY2014 are calculated on the same base.
2) In order to appropriately display the net income per share, in regard to the stock attributed to the directors’ remuneration board incentive
plan trust, it has the right to a claim of dividend, and is therefore, not included in treasury stock.
3) Our company issued 2,587,300 shares of common stock through a third-party allotment with a payment date of June 25, 2015.

(2) Non-consolidated Financial Position

FY 2015
FY 2014

Total assets
Million yen
32,206
19,206

Net assets
Million yen
14,4615,449

Equity ratio
%
44.9
28.4

Net assets per shareYen
389.36
157.72

Reference: Shareholders’ equity: FY 2015: 14,460 million yen, FY 2014: 5,447 million yen
1) In October 1, 2014, our company executed a 2-1 stock split. The values for the FY2014 are calculated on the same base.
2) Our company issued 2,587,300 shares of common stock through a third-party allotment with a payment date of June 25, 2015.

* Display regarding the audit procedure’s enforcement situation
This summary of consolidated statements is not subject to the Financial Instruments and Exchange Act’s audit procedure, and therefore, atthe time of display, the audit procedure regarding the financial statements is not completed.
* Explanation regarding the proper use of financial forecasts and other important notes
1) The above forecasts are outlooks based on the information currently available, and includes various uncertain factors. Actual
performance may differ materially from the forecasts due to changes in business conditions and other factors.
2) Our company issued 2,587,300 shares of common stock through a third-party allotment with a payment date of June 25, 2015.

2

○Table of Contents of Attached Document
１．Qualitative Information Regarding financial Performance ………………………………………………

4（１）Analysis of consolidated operating results ………………………………………………………………

4（２）Analysis of financial position ………………………………………………………………………………

6（３）Basic policy on profit sharing and distribution for the current and next terms ………………

7

２．Business group …………………………………………………………………………………………………………

8

３．Management policy ……………………………………………………………………………………………………… 11（１）Basic management policy of the Company ……………………………………………………………………

11（２）Target management index and medium-to long-term management strategy ………………………………

11（３）Challenges to be addressed by our company …………………………………………………………………

11

４．Consolidated Financial Statements …………………………………………………………………………………

13（１）Consolidated Balance Sheets ……………………………………………………………………………………

13（２）Consolidated statements of income and comprehensive income …………………………………………

15

Consolidated statements of income ……………………………………………………………………………

15

Consolidated statements of comprehensive income …………………………………………………………

16（３）Consolidated Statements of Cash Flows ………………………………………………………

17（Information by segment） ………………………………………………………………………………………

19

－

3 －

1. Qualitative Information regarding Financial Performance(1) Analysis of consolidated operating results（Operating results for the current period）
Regarding the economic environment in Japan during the period under review, although there were some concerns
about overseas economic conditions such as the impact of China’s economic decline, the economy is gradually on
the mend, with the economic and fiscal policy of the government and the monetary easing policy of the Bank ofJapan as a background.
In regard to our core business, the BtoC EC market continues to grow thanks to a favorable external environment
such as broader use of smartphones as well as reforms in logistics, and e-commerce is also spreading in themarket of sales of non-goods items such as services, as seen in new areas such as BtoB EC and CtoC EC.
In regard to the credit card field, credit card shopping is steadily growing, and people tend to make more purchases
via the Internet. Also, use of credit cards in the field of payment via the internet for everyday living expenses
continues to expand, such as payments for rent and medical costs, as well as utility charges and public funds. It isa certainty that opportunities to use credit cards will continue to increase.
Under such circumstances, the group has pressed on with its businesses in order to expand the scale of operations
described below.
The Group consists of GMO Payment Gateway, Inc. and its consolidated subsidiaries, GMO Epsilon, Inc. , GMO
PAYMENT SERVICE, Inc., GMO PAYMENT GATEWAY PTE. LTD. etc, and provides credit card payment
processing services and all related operations as a consolidated subsidiary of GMO Internet, Inc.
The Group offers a broad range of services such as online payment and recurring payment services that respondto our customers’ business category, size and payment type. The number of merchants during the current
consolidated fiscal year increased by 9,834 to 59,559 compared to the end of the previous consolidated fiscal year.
The number and amount of processed payments steadily increased.
Changes in number of operating stores
End of September

Number of operating

End of September

End of September

2011

End of September End of September
2012

2013

2014

2015

32,062

38,94944,32849,72559,559storesNote: Number of operating stores means the number of IDs assigned to each store to use the service. It shows thenumber of stores (merchants) which have an agreement with the Group, are connected to the system, and are able toprocess payments at any time in principle.

For online payment field, payment-processing service grew steadily. GMO Epsilon, Inc., our consolidated
subsidiary, sells and provides the “Multi-Payment Service” and is contributing to an increase in the number ofoperating stores and merchants acquiring service revenue. This service provides a package of various payment
methods such as credit cards to small-scale companies via its website, on a online basis.
GMO Epsilon’s business results grew steadily, and we recorded net sales of 1,865,762,000 yen (an increase of
19.8% year-on-year).
For recurring payment field, we have continued to attempt to develop this field to enable using credit card forpaying utility charges, public funds and other monthly services closely connected with everyday life. We provide
payment methods to public institutions, such as the Japan Pension Service, and local governments, such as theTokyo Metropolitan government (TMG). During the period under review, we started to conduct the payment
operation in credit card payment for all taxation items for the Tokyo Metropolitan Government and the operation of
the “Metropolitan Tax Credit Card Payment Site” (https://zei.tokyo) which the TMG has started since April 1, 2015.
Our subsidiary GMO Payment Service Inc. provides a “GMO Payment after delivery” service that allows the user to
pay after receiving the goods. The “GMO Payment after delivery” service has been adopted by an increasing
number of merchants as a payment service with high level of consumers’ needs and has continued to perform
favorably since its introduction in May 2013.
As a value-added service making the best of the Group’s merchant base, we have made steady efforts to expand
services in areas related to the payment-processing business,- “Online Advertising Service”, providing SSL server
certifications, shipping services and “Money service business (MBS)” such as “early payment services”, “GMO-PG
Remittance Service” and Transaction Lending service.
During the period under review, we implemented a major renewal for “Early Payment Services” on August 1, 2015.
－ 4 －With regard to overseas business, we established five oversea entity to provide GMO-PG Global Payment
solutions to Japanese online businesses with a local presence and targeting local markets in South East Asia.
We have continued to promote funding activities through the “GMO Global Payment Fund” to form capital allianceswith prospective payment-related businesses; in addition, the financial results of local payment processing
companies in which we invest our fund have performed steadily. With a view to incorporating the huge growthpotential of South East Asia, which is the center of global growth, into our Group’s mid-to-long-term businessgrowth, we will continue to introduce new measures while creating a synergistic effect between “GMO-PG Global
Payment” and “GMO Global Payment Fund”.
We strengthen our management bases in order to allow for a steady increase in ordinary income by more than 20%
in the medium and long term through investments in new business fields, hiring and promoting talented people,
reinforcing the settlement network base, further enhancing security. During the period under review, the Board of
Directors meeting held on June 9 2015, agreed to form a business and capital partnership with GMO Internet, Inc,
Sumitomo Mitsui Financial Group and Sumitomo Mitsui Baking Corporation. At the same time, it was resolved toissue new shares to Sumitomo Mitsui Banking Corporation and parent company GMO Internet, Inc. The businessand capital partnership agreement as of June 9 2015 had been concluded and the issuance of new shares througha third-party allotment was completed on June 25 2015.
Consequently, the Group’s operating results for the current consolidated fiscal year were as follows: Net sales
amounted to 9,030,892,000 yen (an increase of 25.3% on a year-on-year basis); operating income grew 20.2% on
a year-on-year basis to 2,977,270,000 yen; ordinary income amounted to 3,000,455,000 yen (an increase of 18.7%
on a year-on-year basis); and net income reached 1,853,449,000 yen (increase of 22.3% on a year-on-year basis).
Net sales consisted of an initial revenue of 526,652,000 yen (decrease of 7.1% on a year-on-year basis), running
revenue of 4,839,648,000 yen (increase of 21.3% on a year-on-year basis) and merchant acquiring service
revenue of 3,664,591,000 yen (increase of 38.4% on a year-on-year basis).
Concerning operating expenses, while the solid performance of “GMO Payment after delivery” service saw a hike incost of sales, we were able to take advantage of the scale merit of the revenue growth and reduce our burden ofparallel operation by completing the transfer of our data center to strengthen our payment processing capacity
since September 2014. As a result, cost of sales amounted to 1,919,836,000 yen (a 33.7% increase on a year-onyear basis). Selling, general and administrative expenses came to 4,133,784,000 (a 25.5% increase on a year-onyear basis).
With regard to non-operating income and loss, while non-operating income of 91,961,000 yen has been posted due
to reasons such as exchange gains and the occurrence of investment return with the equity method by theenhancement of performance of GMO Financial Gate which is an affiliate accounted for using the equity method,
non-operating expense of 68,777,000 yen have been recorded due to reasons including attorney’s fee related tothe issuance of new shares for capital increase by way of third-party allotment, resulting in marking a ratio of
ordinary profit to net sales of 33.2%.
In an effort to enhancement of collaboration-type business, we have promoted capital and business alliance byobtaining a part of shares of important affiliated stores and important business partners. However, we sold some ofthe shares due to the fact that some of the business partners were purchased by the listed company. We posted an
extraordinary income of 30,766,000 by selling a part of the shares and of 26,196,000 on change in equity.
（Forecasts for the next period）
In regard to our core business, the BtoC EC market continues to grow thanks to a favorable external environment suchas broader use of smartphones as well as reforms in logistics, and e-commerce is also spreading in the market of salesof non-goods items such as services, as seen in new areas such as BtoB EC and CtoC EC.
For the term ending September 2016, we expect initial revenue, running revenue and merchant acquiring service
revenue to increase steadily. We believe this will be achieved by accelerating the acquisition pace of new merchants,
strengthening the development of large-scale merchants through the provision of higher quality services, and increasing
revenue per merchant through providing services such as “Online Advertising Service” and “Money service business(MBS)” that increase added value associated with the merchants' use of the Group.
In regard to costs, we keep forecast for increase in sales cost ratio due to the sales growth of “Online AdvertisingService" and “GMO-PG Remittance Service”, which has a high sales-cost ratio. We also forecast investment cost on－

5 －the subsidiary companies, overseas businesses, and other investment on new businesses. We expect 25.0% growth inordinary income and 32.9% ordinary income ratio.
As regards the foreseen joint venture company with Mitsui Sumitomo Bank, we think it would contribute to enhance the
mid-term corporate value and shareholders’ value of our company, but we expect that, for the term ending September
2016, the costs related to the establishments of the new company would precede.
For the reasons mentioned above, the consolidated financial forecast for the full fiscal year ending September 2016 is
as follows.
FY 2016

Increase or decrease
from the same periodof the previous year
Million yen

FY 2015%

Million yen

Net sales

11,413

26.4

9,030

Operating income

3,741

25.7

2,977

Ordinary income

3,750

25.0

3,000

Net income

2,335

26.0

1,853

* The above forecasts are outlooks based on information currently available, and include various uncertainties.
Actual performance may differ from the forecasts due to changes in business conditions and other factors.

(2) Analysis of financial position①Assets, liabilities and net assets（Assets）
The balance of total assets at the end of the current consolidated fiscal year was 41,831,736,000 yen, up
17,218,678,000 yen as compared with the end of the previous consolidated fiscal year. This increase was mainly
due to an increase of cash and deposits (+9,766,455,000 yen), lease receivables (+2,293,947,000) and advancepayments-trade (+1,718,032,000). The increase of cash and deposits was mainly caused by the increase of
deposits of merchants, in accordance with the merchant acquiring service agreement, increase in capital stock andin capital surplus.
The deposits of merchants will mostly be paid out on the tenth of the next month, therefore the deposit balance will
decrease with receipt of deposits.
（Liabilities）
The balance of liabilities at the end of the current consolidated fiscal year was 25,645,385,000 yen, up
7,847,706,000 yen as compared with the end of the previous consolidated fiscal year. This increase was mainly
because of an increase in deposits received of 5,594,448, 000 yen, which resulted primarily from the increase indeposits received for merchants in accordance with the merchant acquiring service contract.
（Net assets）
The balance of net assets at the end of the current consolidated fiscal year was 16,186,351,000 yen, up
9,370,971,000 yen as compared with the end of the previous consolidated fiscal year. The increase was mainly
attributable to the increase in capital stock (+3,999,965,000) and in capital surplus (+3,999,965,000).
②Cash FlowsAt the end of the current consolidated fiscal year, cash and cash equivalents (the “Funds”) for the current
consolidated fiscal year totaled 30,113,605,000 yen, up 9,764,296,000 yen when compared with the balance at the
beginning of the period. Cash flows for the current consolidated fiscal year are as follows.
（Cash flow from operating activities）
The Funds obtained as a result of operating activities for the current consolidated fiscal year were 3,709,772,000
yen (3,088,604,000 yen was obtained for the same period of the previous year). This was mainly due to therecording of net income before income taxes and others of 3,055,268,000 yen and an increase in deposits receivedof 5,594,448,000 yen after a payment of income taxes of 1,160,226,000 yen, increase in lease receivables(+2,293,947,000) and advance payments-trade (+1,718,032,000).
（Cash flow from investing activities）－

6 －The Funds used as a result of investing activities for the current consolidated fiscal year were 1,374,094,000 yen(666,417,000 yen was used for the same period of the previous year). This was mainly due to the investments inother securities of subsidiaries and affiliates of 1,016,185,000 yen and purchase of intangible fixed assets of
377,887,000 yen.
（Cash flow from financing activities）
The Funds used as a result of financing activities totaled 7,398,573,000 yen (444,357,000 yen was used in thecorresponding period of the previous fiscal year). This was primarily attributable to the issuance of common stockof 7,958,839,000 yen.
The trend of the Group’s cash flow indices is as follows.
FY 2011

FY 2012FY 2013

FY 2014

FY 2015

Equity ratio (%)

31.2

33.4

26.4

27.7

38.7

Equity ratio on a market value basis (%)

229.9

163.9

216.2

348.0

408.4

Cash flows to interest bearing liabilities ratio (%)
Interest coverage ratio (times)

0.6

5.4

1.8

4.5

3.0

230.1

121.4

960.3

1,843.7

2,058.7

Notes:
1.

2.
3.

4.

Method of calculating the abovementioned indices
Equity ratio: Shareholders’ equity ÷ total assets
Equity ratio on a market value basis: Total market value of shares ÷ total assets
Cash flows to interest bearing liabilities ratio: interest bearing liabilities ÷ operating cash flows
Interest coverage ratio: Operating cash flows ÷ interest payments
Each indices was calculated based on consolidated financial values.
The total market value of shares was calculated by multiplying the closing share price at theend of the term by the number of shares issued at the end of the term (other than treasury
stock)As operating cash flows and interest payments, “net cash provided by (used in) operating
activities” and “interest expenses paid” recorded in the consolidated statements of cash flows
were used.

(3) Basic policy on profit sharing and distribution for the current and next terms
We consider that returning a stable profit to our shareholders is a major mission of our management. Therefore, we
accumulate an internal reserve that is necessary for future business development and the enhancement of businessquality, and also for continuing to provide a stable return of profit to the shareholders. Thus, we established a basic
dividend policy, setting the target dividend payout ratio at “roughly 35% of the consolidated net income” and started to
pay term-end dividends in the term that ended September 30, 2006.
The dividend per share is 18.0 yen for the current consolidated fiscal year. For next fiscal year, we plan a yearend
dividend of 22.0 yen per share.
In addition, we plan on continuing to effectively use the retained earnings for enhancing business quality and active
business development.

－

7 －2. Business group(1) Affiliates
The Group consists of the Company and its consolidated subsidiaries, GMO Epsilon, Inc. GMO PAYMENT SERVICE,
Inc., GMO PAYMENT GATEWAY PTE. LTD. and provides credit card payment processing services as a consolidated
subsidiary of GMO Internet, Inc.
GMO Internet, Inc., the parent Company, provides internet infrastructure, EC business, internet media and internet
brokering under the motto “Internet for everybody”

Classification

Name

Details of business

Segment by type of related business

Parent

GMO Internet, Inc.

Comprehensive Internet business—Subsidiary

GMO Epsilon, Inc.

Various payment processing
services—

Subsidiary

GMO PAYMENT SERVICE, Inc.,

Payment Later service－

The headquarters for global business
Global payment processing services－

Subsidiary GMO PAYMENT GATEWAY PTE. LTD.

(2) Business details
The Group provides companies that sell products on a online basis with a payment processing service and, related tothe payment-processing business, the means through which payment processing by credit cards and other methods
can be efficiently made.
①Type of servicea.

Payment processing service
GMO Payment Gateway, Inc. and GMO Epsilon, Inc. provide companies that sell products on a online basis,including by way of consumer electronic commerce (B-to-C EC), with a payment processing service through which
payment processing by credit cards, convenience store payment, prepaid cards, Pay-easy, electronic money,
PayPal, Carrier billing, Internet banks and Cash on delivery can be made efficiently.
GMO PAYMENT GATEWAY PTE. LTD., provides payment processing services globally.

b.

Related to the payment-processing businessAs value-added services making the best of the Group’s merchant base, we made steady efforts to expand
services in areas related to the payment-processing business, such as the Online Advertising Service, providing
SSL server certifications, shipping services and “Money service business (MBS)” such as “early payment services”,“GMO-PG Remittance Service” and Transaction Lending service, etc.
Our consolidated subsidiary, “GMO PAYMENT SERVICE” launched its Payment Later service.

②Contract types entered into between the merchant and the credit card company
The Group’s business models are classified broadly into two categories depending on the type of contract entered into
between merchants and credit card companies, or others.
a. Direct merchant contract
The group provided a payment system and mainly ties up payment information and settlement between merchantsand various payment businesses. Merchants make a contract with various payment businesses individually, then,the merchant’s proceeds are paid directly to the merchant by each credit card company.
GMO-PG will receive the service fees below from the merchant:• Initial introduction costs for the license of connective software to use the system, initial setting, connection test,
and support, all of which are received upon introduction of the services: These revenues are recorded as initial
revenue.
• Customer support fees, monthly fixed fees, and transaction fees to be charged according to the number of dataprocessing tasks: These revenues are recorded as running revenue.

－

8 －Services

Settlement
information
ServicechargeSettlementcompanies,
etc.

Merchants

Money flow

Contract

GMO Payment Gateway
Group

Proceeds from salesｂ. The representative merchant contract (merchant acquiring service)
The group provides a payment system and mainly ties up payment information and settlement between the merchantand various payment businesses. The group makes a representative merchant contract (merchant service) that isconcluded as a package with several payment companies like credit card companies. Merchant proceeds are paid to
the group from each credit card company or other payment company, and are then paid to the merchants by thegroup in a lump sum.
The group receives the following fees from merchants as a service charge in addition to the fees mentioned in (a)direct merchant contract.
•
Fees for proceeds from the merchant acquiring service revenue which are received when paying the proceeds

Merchants

Money flow

Services

Settlement information・Contract

GMO Payment Gateway
Group
Fees
（B）

ServicechargeProceeds from
Sales（A-B）

Proceeds from
Sales（A）

Settlement companies, etc.

from sales in a lump sum. These revenues are recognized as merchant acquiring service revenue.

Proceeds from salesc. Payment Later service
GMO PAYMENT SERVICE, Inc., provides “GMO Payment Later service,” which is an after-payment means, toour merchants. In this service, GMO PAYMENT SERVICE, Inc., performs credit examination of consumers and－9 －sends billing statements to them, as a payment service provider. GMO PAYMENT SERVICE, Inc., temporarily
pays the merchants proceeds from the sales on behalf of the consumers, and collects payment from consumers.
GMO PAYMENT SERVICE, Inc., receives the following as service fees from the merchants.
- A customer support fee, a fixed monthly fee as a management fee, and a fee for the service use (which isposted as running sales)

－

10 －

３．Management policy（１）Basic management policy of the Company
The management principle of the Group is to “pursue both spiritual and material gains for compeers by contributing
to the progress and development of communities.” We will contribute to the progress and development of communities through a commitment to creating andcultivating markets, and through business development based on sincerity and equity.
 “Compeers” means executives and employees with creative ideas and mutual respect, our customers, and ourpartner business operators.
 Executives and employees of the Company will pursue both spiritual and material gains by making the most of
their spirit, problem-solving abilities, and high level of professionalism, and by exchanging value withcustomers.
Based on this management principle, the Group considers that its mission is to become the infrastructure forpayment processing in Japan, and to contribute to the realization of payment processing system that is safe andconvenient for consumers and companies. As a result, it has promoted its business in accordance with thefollowing basic policies.
 Adaptation to trends
Advanced efforts
We try to ensure the technical advantage of our products.
Flexibility
We expeditiously make proposals in the growing market.
 Establishment of existing value
UniquenessWe try to ensure the meaning of our existence by providing services from the standpointof our customers.
Profitability
We beat our competitors by pursuing improvements in profitability and firmly establishingour position in the industry.
Independence and education With the aim of being highly self-contained businesspeople, we set a good
example to others in terms of results, attitude and mindset.
 Pursuit of profit conditions
Sociality
We are committed to developing a sound business, and continue to actively develop
unexplored markets for various payment methods.
ReasonablenessWe quickly and fairly make management judgments by always keeping economy andreasonability in mind.
 Responsibilities to shareholders
We try to improve shareholder value while being conscious of capital efficiency. We actively conduct IR
activities and provide shareholders and investors with information in a timely and appropriate manner.
（２）Target management index and medium-to long-term management strategy
Our group’s main management goal is a 20% growth in ordinary profit.
The operating income for the current consolidated fiscal year increased 20.2%. Due to the making of investments
necessary to maintain a yearly growth of 20% in the medium-to long-term, next year’s operating income growth rate is
expected to be 25.7%.
The ordinary income growth in this consolidated fiscal year was 18.7% due to the non-operating expenses of stock
issue expense. Therefore, we expect 25.0% for the term ending in September 2016.
Our group is shouldering the online commercial transaction market infrastructure, contributing to the creation of amore convenient and secure EC environment and the improvement of Japan’s EC ratio. We also endeavor to expandin new fields by developing new businesses, capital/ business tie-up with partners, founding new subsidiaries, andexpanding services globally.
（３）Challenges to be addressed by our company
We put emphasis on the following three challenges to be addressed as a condition for the realization of the measures
mentioned above.
①

Strengthening the information security
We provides credit card payment processing services, and process and manage important information, such as
credit card numbers and other information.
As part of the process to strengthen the 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 the business offices of the Company for the first time as a listed
payment processing services company. Consequently, the information security management system of the

－

11 －

Company has been objectively determined to be appropriate and safe in compliance with strict international
standards.
Further, we are in full compliance with the global security standard in the credit industry “PCIDSS Ver.3.0” which
was jointly established by five international credit card companies: JCB; American Express; Discover; MasterCard;and VISA, and the services of the Company satisfy the basic requirements: “construction and maintenance of safe
network”; “protection of card member information”; “maintenance program for management of vulnerabilities”;“introduction of firm access control method”; “regular monitoring and testing of network”; and “possession of an
information security policy.”
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.
We will endeavor to provide better services by continuing to provide a thorough internal education and monitoring
system to establish and improve management measures in accordance with the established security policy, and to
make an effort to maintain and improve reliability
Further, in order to prevent computer intrusions by fraudulent means, computer viruses, cyber attacks, etc., we takeappropriate countermeasures such as security measures against fraudulent intrusions from outside/inside, 24-hoursystem monitoring, and preparation and operation of office regulations.
②Strengthening of system development capabilities
We constantly see the appearance of new technologies and new services in communications, including theInternet. The Group is deeply related to the Internet in the business field, and recognizes that to provide customers
with competitive products, it is important to adopt technologies and services in a timely manner.
At present, internal personnel respond to changes in the system environment, accept requests from customers anddesign systems, and we outsource programming to provide efficient high-quality services. We will try to continue tosecure highly skilled development personnel and further strengthen system development capabilities and services.
③Strengthening of the collaboration business
We recognize that to ensure stable growth, it is essential to establish business collaborations from which acompany with many merchants, as well as ourselves, can benefit, and to promote the efficient acquisition of new
merchants.
This form of business is a feature of our strategy, and we will continue to actively promote this kind of businesscollaboration with companies which have many merchants, payment companies, EC site construction service
companies.

－

12 －

４．Consolidated financial statements（１）Consolidated balance sheet（Unit: Thousand yen）
Summary of balance sheet at Summary of balance sheet atthe end of the previous
the end of the current
consolidated fiscal year
consolidated fiscal year
(September 30, 2014)(September 30, 2015)
AssetsCurrent assets
Cash and deposits
Accounts receivable-trade
Lease receivables
Merchandise
Supplies
Advance payments-trade
Prepaid expenses
Deferred tax assets
Accounts receivable-other
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Tangible assets
Buildings
Accumulated depreciation
Buildings, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Lease assets
Accumulated depreciation
Lease assets, net
Total tangible assets
Intangible assets
Goodwill
Lease assets
Right of trademark
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and affiliates
Bonds of subsidiaries and affiliates
Investments in other securities ofsubsidiaries and affiliates
Long-term loans receivable from directors
and employees
Claims provable in bankruptcy, claims
provable in rehabilitation and other
Long-term prepaid expenses
Lease and guarantee deposits
Deferred tax assets
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

－

13 －

20,386,175
792,588－
2,165
531
585,395
58,823150,097504,077
52,343△56,177
22,476,019

30,152,630
2,117,007
2,293,947
1,062
617
2,303,428
67,830220,805
1,156,824
341,591△186,253
38,469,492

89,836△32,537
57,298205,616△144,540
61,075
176,284△62,711
113,573
231,947

113,953△40,393
73,559216,042△166,668
49,373
191,110△98,545
92,564215,497

30,694
16,785272
661,723
54,992
764,469

24,707
12,217
119751,499
146,267
934,811650,7392,507
11,0001,437,144
139,047－

264,442

343,047

1,910

1,443

12,43425,545

7,722
149,210
51,384△10,729
1,140,621
2,137,039
24,613,058

2,570
223,818
64,863△25,545
2,211,935
3,362,243
41,831,736

（Unit: Thousand yen）
Summary of balance sheet at Summary of balance sheet atthe end of the previous
the end of the current
consolidated fiscal year
consolidated fiscal year
(September 30, 2014)(September 30, 2015)
Liabilities
Current liabilities
Accounts payable-trade
Lease obligations
Accounts payable-other
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Unearned revenue
Provision for bonuses
Provision for directors’ bonuses
Other
Total current liabilities
Noncurrent liabilities
Lease obligations
Long-term lease and guarantee deposited
Provision for directors’ remuneration Board
Incentive Plan Trust
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total Accumulated other comprehensive
incomeSubscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets

－

14 －

229,278
41,747
692,310644,375
171,628
7,850
15,589,857
1,256
206,137
34,8405,056
17,624,339

985,850
45,2671,911,844
795,544
73,10848,69821,184,305
1,573
337,334
58,7005,959
25,448,186

97,084
6,254

67,060
10,13870,000120,000

173,339
17,797,678

197,198
25,645,385

708,118
968,040
5,315,707△264,723
6,727,143

4,711,021
4,970,942
6,651,114△265,236
16,067,842

64,821

134,960

16,685△18,578

81,506116,382

3,774
2,956
6,815,379
24,613,058

2,126－
16,186,351
41,831,736

（２）Consolidated statements of income and consolidated statement of comprehensive income（Consolidated statements of income）（Unit: Thousand yen）
FY2014FY2015(From October 1, 2013 to(From October 1, 2014 toSeptember 30, 2014)

September 30, 2015)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Equity income of affiliates
Earnings on investment in silent partnership
Earnings on investment in partnership
Earnings on reversal of dividends payable
Rent income
Commissions received
Exchange earnings
Other
Total non-operating income
Non-operating expenses
Interest expenses
Equity in losses of affiliates
Loss on investment in silent partnership
Loss on investment in partnership
Rent expenses
Stock issue expense
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Income from securities sold
Change in equity
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Other
Total extraordinary loss
Income before income taxes
Corporate, inhabitant and enterprise taxes
Income taxes-deferred
Total income taxes
Income before minority interests
Minority interest in loss(△)
Net income

－

15 －

7,205,542
1,436,281
5,769,260
3,292,851
2,476,408

9,030,892
1,919,836
7,111,055
4,133,784
2,977,270

7,905
4,263
－
－
21,367770
13,941
19,11816,495
3,641
87,503

7,716
5,271
20,724
1,218
－
1,050
13,97815,58622,030
4,385
91,961

1,675
15,836
4,521－
13,659－426
36,1192,527,793

1,802
－
－
3,541
13,67445,317
4,441
68,7773,000,455

32,357－32,35730,76626,19656,962

14,3305,402
19,732
2,540,417
1,075,020△49,929
1,025,091
1,515,326△462
1,515,788

2,148
－
2,148
3,055,268
1,295,625△91,075
1,204,550
1,850,718△2,7301,853,449

（Consolidated statements of comprehensive income）（Unit: Thousand yen）
FY2014FY2015(From October 1, 2013 to(From October 1, 2014 toSeptember 30, 2014)

September 30, 2015)

Income before minority interests
Other comprehensive income
Other valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income(Details)
Parent company shareholders’ comprehensive
incomeMinority’s comprehensive income

－

16 －

1,515,326

1,850,718

56,852

70,139

11,16268,015
1,583,341△35,489
34,6501,885,369

1,583,578

1,888,325△236△2,956

（３）Consolidated statements of cash flows（Unit: Thousand yen）
FY2014FY2015(From October 1, 2013 to(From October 1, 2014 toSeptember 30, 2014)

September 30, 2015)

Net cash provided by (used in) operating activities
Income before income taxes
Depreciation
Amortization of goodwill
Increase and decrease in provision (△decrease)
Interest and dividends income
Interest expenses
Foreign exchange gains and losses (△gains)
Equity in gains and losses of affiliates (△gains)
Gains and losses on investments in silent
partnership (△gains)
Gains and losses on investment in partnership(△gains)
Gain and loss on investment securities sold(△gains)
Gains and losses on changes in equity (△gains)
Stock issue expense
Loss on retirement of noncurrent assets
Increase and decrease in accounts receivable(△Increase)
Increase and decrease in lease receivables (△gains)
Increase and decrease in inventories (△increase)
Increase and decrease in advance payments-trade(△increase)
Increase and decrease in accounts receivableother (△increase)
Increase and decrease in purchase debts(△decrease)
Increase and decrease in accounts payable-other(△decrease)
Increase and decrease in deposits received(△decrease)
Other
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Purchase of property, plants and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales or redemption of investment
securities
Purchase of stocks of subsidiaries and affiliates
Purchase of other securities of subsidiaries andaffiliates
Distributions from an investment partnership
Payment on leasehold deposits
Sales of subsidiary shares accompanying changes
in the scope of consolidation
Other
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities－

17 －2,540,417
267,291
10,728120,575△12,169
1,675△16,438
15,836

3,055,268
291,319
5,987
349,948△12,987
1,802△22,255△20,724

4,521△1,218△21,367

3,541△32,357△30,766－－
14,330△26,196
45,3172,148△154,370△1,337,793－△2,293,947△1,846

1,135△205,659△1,718,032△435,530△653,421

78,316756,183

470,054

1,197,466

1,252,307

5,594,448

93,8753,990,191
8,240△1,675△908,152
3,088,604△324,160
4,863,065
8,734△1,802△1,160,226
3,709,772△13,299△294,676△106,726△38,966△377,887△1,016,185

32,241

263,159－△63,000△250,000△125,000－△8,89730,092△31,623△26,899－

1,840△666,417△14,683△1,374,094

Proceeds from issuance of common stock
Purchase of treasury stock
Cash dividends paid
Proceeds from stock issuance to minority
shareholders
Other
Net cash provided by (used in) financing activities
Translation differences of cash and cash equivalents
Increase and decrease in cash and cash
equivalents(△decrease)
Balance of cash and cash equivalents at the beginningof the period
Cash and cash equivalents at the end of period

－

18 －

17,333－△421,129

7,958,839△513△517,241

3,192－△43,754△444,357
13,135△42,511
7,398,573
30,044

1,990,965

9,764,296

18,358,343

20,349,309

20,349,309

30,113,605

（Information by segment）
Sales performance
Sales performance for the current consolidated fiscal year is as follows.
FY2014FY2015

Increase (decrease)

Item
Amount(thousand yen)

Compositi
AmountCompositi
AmountCompositi
on ratio (thousand yen) on ratio (thousand yen) on ratio
(%)
(%)
(%)

Initial revenue

566,7997.9

526,652

5.8△40,147△7.1

Running revenue

3,991,284

55.4

4,839,648

53.6

848,363

21.3

Merchant acquiring service
revenue

2,647,458

36.7

3,664,591

40.6

1,017,133

38.4

Total

7,205,542

100.0

9,030,892

100.0

1,825,349

25.3

Note: Amounts in this table do not include consumption tax or other taxes.

－

19 －