GMO Payment Gateway, Inc.

Annual Report 25th Fiscal Year2017.10.1–2018.9.30

Message from the President

The mechanism of circulation, fundraising,investment, and growth.
We will further enhance our four strengths,
while maintaining a growth rate in operating
profit of at least 25% as a leading payment
infrastructure company.
Issei Ainoura
President and Chief Executive Officer

Thirteen consecutive years of revenue and earnings growth since ourinitial listing in April 2005, through steady expansion of payment services,plus the creation of new business areas and services
Our core business of online payment services has main-less Vision” of the Ministry of Economy, Trade and Industry totained strong growth thanks to steady expansion of the B2C

promote the transition to cashless payments, and the revision

e-commerce market, as well as transactions between busi-of the Installment Sales Act. We are also providing more “Ginko

nesses (B2B) and between consumers (C2C) increasingly

Pay” systems for financial institutions.

being conducted online.

Thanks also to growth in financial services such as GMO

With sales initiatives seizing on the opportunity provided byPayment After Delivery, Macro Kiosk Berhad, as well as thethe revision of the Installment Sales Act we have acquired

development of new business areas and creation of new

more major company clientele. Our merchant base has grownservices, our profits in FY2018 exceeded the initial plan andat an accelerated pace, as now more than 100,000 merchants

delivered our 13th consecutive year of revenue and earnings

are using our services, with 1.35 billion transactions annually

growth since our initial listing in April 2005.

totaling roughly 4 trillion yen.

We have accomplished these things due to the heartfelt

Business opportunities are also increasing for card-present

support of our shareholders. Thank you very much for yourpayment services, including efforts outlined in the “Cash-support.

1

GMO Payment Gateway, Inc.

Marketing

Development

The proposition and negotiation capabilities we have honed from the beginning
Supporting the growth of customers with our unsurpassed human resources

Rock-solid system reliability even for concentrated, high-volume payments
Development capability to meet customer needs

Our FourStrengths

SupportInvestment

Seeing from the customer perspective to offer support that goes as far as trying out
solutions to problems that have not even occurred yet
Earned three stars under the monitoring section of the 2018 HDI rating benchmark

Identifying superior startups
Integrated support capability to contribute to growth of companies invested in

Annual Report 25th Fiscal Year 2017.10.1 – 2018.9.30

2

Message from the President

Aiming for ¥25 billion or more in operating profit andimproved capital efficiency in FY2025
Target¥25 billion +We aim to expand

Medium-term numerical targets

IoT
Growth of GMO-FG
Comprehensive scheme with SMFG

business in our five

Globalfocus areas, and

Growth of companies invested in
Global lending

ROA: 6.7%
ROE: 19.1%

achieve even higher

FinTechTargetcorporate value as we

ROA: 5.1%
ROE: 12.9%

develop together with

Plan

Growth of Payment After Delivery¥10 billion +¥8.3 billion +Cashless¥6.55 billion

Expansion of Ginko Pay

our customers

E-commerceMarket size expansion
Comprehensive scheme with SMFG
FY2017FY2018FY2019FY2020

FY2025*ROA: Pre-tax profit margin on total assets, ROE: Profit margin on shareholders’ equity for the period

Maintain a profit growth of at least 25% by reinforcing our ecosystem(recurring model) and deploying our business strategies in growth markets
We have achieved our continued high rate of growth by
E-COMMERCE

offering customers value-added services that help grow their*Numbers for FY2020 and FY2025 are our management targets*SMFG: Sumitomo Mitsui Financial Group, GMO-FG: GMO Financial Gate

Strengthening our management structure and making effective use ofcapital raised from the market, we aim to achieve even higher corporate
value while developing together with our customers on the path toprogress in a new growth stage

sales through payment data analyses and inferences, andby both establishing and strengthening ecosystems withmaximum recurrence of payment services.
Based on this recurring model we will focus our efforts

FinTechIoT

on business expansion in the five growth markets of
e-commerce, FinTech, Cashless, IoT and Global, in order tomaintain a growth rate in operating profit of at least 25%.

Fivebusinessareas

Revenue and earnings in FY2018 significantly exceeded our

In terms of shareholder returns, we have increased our divi-

initial plan, as revenue increased 25.5% from the previous

dend for 12 consecutive years since FY2006. We now pay

period to ¥26.417 billion, while operating profit rose 65.9% toout 58 yen per share, roughly 19 times more than our initial¥6.550 billion and profit attributable to owners of the parent

dividend.

rose 75.8% to ¥4.255 billion.

Employing the strategies outlined above, we will develop our

We also raised ¥17.5 billion in June 2018 by exercising 2023

business in a variety of business areas and regions, while

due euro-yen denominated convertible bonds with warrants.

bolstering our financial services and new value-added services

Making effective use of funds raised, we seek continued

to turn ourselves into the undisputed leader in comprehensive

growth to achieve our medium-term management targets forpayment services. Please keep your eyes on us!

consolidated operating profit of ¥10 billion in FY2020, ¥25
CASHLESS

3

GMO Payment Gateway, Inc.

GLOBALbillion in FY2025, and ¥100 billion in FY2030.

Annual Report 25th Fiscal Year 2017.10.1 – 2018.9.30

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E - CO M M E RCE

FinTechIoT

CASHLESSGLOBAL

Our Services and Focus Areas

GMO Payment Gateway creates new value in payments with sights set firmly
on the future, adapting to a world where change happens faster than ever before.
Internet shopping
Utilities
Bills paid on a regular basis
such as electricity and gas

Public dues
Payments of automobile
taxes and water bills

Supporting payments for purchases ofeveryday goods, perishables, etc., andthe advertising operations of businesses

Payments of fixed monthly expenses
Regular payments for things such as water
delivery, newspapers, magazines, etc.

Content purchases
Payments when purchasing
content such as music, video
games, and e-books

Shopping by smartphone
Payments when purchasing goods and services outside
the home

Providing payment services

E-COMMERCE
Providing all type of highly convenient,secure payment methods, from internet
shopping to online payments of taxes
and public dues

CASHLESS

For merchants we develop payment
methods that utilize finance technology, andservices that support growth according tofinancing needs

Began offering services for financial institutions to accommodate more payments going
cashless, which is anticipated to reach thesame levels in Japan as in other countries

Providing highly-secure services in the areaof card-present payments, where further
growth is expected along with the promotionof cashless payments and increased inboundconsumption

GMO Payment Gateway, Inc.

Using smartphone apps to pay for services and purchases

Payments after receiving products(GMO Payment After Delivery)

Card payments at vending machines

Withdrawals at ticket machines

Sustaining global payment infrastructure

Accommodating needs for cash in the cashless era

Safe, convenient payment services around the world

Diverse payment methods handled securely

Payments for travel tickets and car rentals,delivery services, etc.

FinTechIoT

5Usage fees for various services

Payments at physical stores

GLOBAL
Globally exporting our expertise, know-how,and services in payments and finance, while
actively promoting partner strategies throughinvestment

Annual Report 25th Fiscal Year 2017.10.1 – 2018.9.30

6E - CO M M E RCE

FinTechIoT

CASHLESSGLOBAL

Topics by Business Areas

E-COMMERCE

Number of Merchants

Transaction Volume & Value

FY2004 6,837

FY2004FY2018

Seeking strong growth that outstrips the growth of the e-commercemarket by leaps and bounds by strengthening the recurring modeland creating new markets for online payments

Tickets
Electronic
Books

Games
and Music

37 million

1.36 billion

The e-commerce market is on a rapid growth trend thanks to favorable changes in the external environment
for sales of products to consumers (B2C), including the spread of smartphones and improved logistics. At theFresh Foodsame time, the e-commerce sphere itself has also expanded, including more e-commerce between businesses(B2B) and between consumers (C2C). Payments are also increasingly being conducted online in areas outsideof e-commerce, including services other than product sales, public dues such as utility payments and taxes,
and areas such as healthcare which are major components of people’s lives.

FY2018Taxes

102,484

Books

Water
Automobile ApparelTaxes¥120.0 billion

CDs¥3.4 trillion

PG Multi-Payment Service, the standard for e-commerce payments
PG Multi-Payment Service is a payment platform that allows
all-in-one implementation of a variety of payment methods
including credit cards and convenience stores. It helps
online sellers and e-commerce businesses increase theirsales by offering a safe, secure payment environment before,
during, and after the payment, while also being compatible
with implementation plans for credit card transaction security measures.

Merchants
B to C(1) Product sales (apparel, cosmetics, health products, etc.)(2) Utilities (NHK, Tokyo Metropolitan, Osaka Prefecture, etc.)(3) Digital content (online gaming, streaming video, etc.)(4) Service commerce (insurance, travel, rent, providers, etc.)

B to BC to C“Flea market” apps
Crowdsourcing
Crowdfunding

Credit Card
Payment

Convenience
Store Payment

Carrier Billing

E-money

Smartphone
payment

Account transfer
payment

WalletPayment

Bitcoin
Payment

B2B Payment(Paid)

Bank
Payments

Cash ondeliveryTransfer slip
payment

Prepaid
Payment

GlobalPayment

PG Multi-Payment Service

Senior Managing Director, Head of Innovation Partners Division

By either determining the true needs of individual customers orin person in order to brainstorm together with them about how

offering services that quickly cater to the direction markets arethey would like to change, or how they should change, andheading, we have created markets where online payments cancreate tangible services as a result.

be made in realms beyond just e-commerce for the sales of

We want to continue being a partner in providing innovation andproducts.

satisfaction to everyone involved in our business.

We have the top sales organization in the industry, with an

Since the revision of the Local Autonomy Act in Japan
in 2006 we have been developing the field of credit card
payments for utilities and public dues. Many local governments and public offices now use these services, and wehave strived to provide payment environments that are bothconvenient and secure.
Having developed a wide range of fields in online payments
beyond e-commerce, we will achieve business growth that
outstrips the growth of e-commerce market.

Implemented at more public institutions,for more types of payments

Developing fields of online payments other than e-commerce (public dues, utilities, etc.)

Yuichi Hisada

Paid by month (administrative expenses, monthly
fees, parking fees, meal expenses)
Electricity and gas operators
NHK receiving fees
Furusato-Nozei (system to partially divert residence
taxes to a local government specified by the payer)

National Tax Credit Card
Payment Site
Tokyo Automobile taxes,
Metropolitan: various taxes, water bills
Aichi Prefecture: Automobile taxes,
various taxes
Osaka Prefecture: Automobile taxes
Fukuoka City: Various taxes
Sapporo City: Water bills

Currently

2011
In addition to payment services,
started production and operationof payment websites
2007
Began offering credit card
payment services for
local governments
and public institutions

approach focused strongly on being there with our customers

Local governments thatuse our payment service

7

GMO Payment Gateway, Inc.

Annual Report 25th Fiscal Year 2017.10.1 – 2018.9.30

8E - CO M M E RCE

FinTechIoT

CASHLESSGLOBAL

Topics by Business Areas

FinTechDeveloping B2B FinTech services

Improving capital efficiency by expanding services

The domestic B2B e-commerce (electronic transactions between
companies) market in Japan grew 9% year-on-year to ¥317.2 trillion in 2017, and it remains on a growth trend*. We utilize FinTech toprovide services that multi-directionally support the growth of B2B
e-commerce operators. These services include GMO B2B Early
Payment which mitigates payment default risk, converting accounts
receivable into funds at an early stage through AR financing to improveand bolstering profitability, and accelerating businessexpansion by investing funds
We provide financial services that can only be offered by a payment services company, including the GMO
Payment After Delivery payment service to pay for goods after receiving them using convenience stores, banks,

GMO B2B Early Payment
B2B
e-commerce
operator

post offices, and other such means, in addition to Transaction Lending financial services for merchants which

Accounts receivable
incurred1

B2B
e-commerce
operator

ClientInvoice3

Early payment ofaccounts receivable

Commercial
credit insurance

ClientMemberoperator

Able to use
GMO B2B
Early Payment24Collection

Early cash
conversion

1
Invoice

No payment
or collection

Accounts receivabletransferred

Remittance Service, and other such services which help improve the cash flow of merchants.

*“FY2017 Survey of Infrastructure Development Status for Data-driven Society inJapan (E-Commerce Market Survey)”, Ministry of Economy, Trade and Industry

GMO B2B AR Guarantee2

use payment data and other information to offer growth funding, as well as Early Payment Service, GMO-PG

and bolster cash flow, and GMO B2B AR Guarantee which insures
the recovery of accounts receivable. Partnering with Sompo Japan
Nipponkoa Insurance Inc., we have also begun providing GMO B2B
Early Payment to operators who join their commercial credit insurance.

3

Sompo Japan Nipponkoa

Accounts
receivable insured

Insurance
claim paid

In addition to compensation for losses from bankruptcy of a client,
early cash conversion of accounts receivable is also possible

Sophistication of services through the use of AI (artificial intelligence)
We actively promote the use of AI (artificial intelligence) to make our
FinTech services more sophisticated. Specifically, we deployed AI to
improve the default rate of GMO Payment After Delivery services, andsuccessfully improved profitability.
We are also providing mock data created based on our extensive collection of payment- and financial service-related data to the
University of Tokyo Data Science School, an educational program forgraduate students run by the University of Tokyo Graduate School ofInformation and Science Technology which aims to develop data scientists versed in sophisticated technologies. The program used this data
as learning material for performing analyses and deriving the resulting
business implications.
We will continue supporting R&D and human resources development

Managing Executive Officer, President and CEO of GMO Payment Service

Payment After Delivery can be used even by those without

Since establishment in January 2013, GMO Payment Service

credit cards, allows buyers to check products themselves

has been accumulating expertise and know-how in Payment

before paying for them, and unlike Cash-on-Delivery it does not

After Delivery. Our services have also been offered sincerequire buyers to be home to pick up their products. Thanks to

November 2016 on Zozotown, the largest online fashion shop-

these advantages its use is becoming more widespread, as theping website in Japan, and we continue to grow at a pacemarket for Payment After Delivery increased at a yearly rate ofexceeding the expansion of the market.

44% from 2013 to 2016 and is forecasted to reach at least ¥1.3

We will continue striving to grow the market for Payment After

trillion in 2022*.

Delivery, with our sights also set on global expansion.
*Calculated by GMO Payment Service based on “Online Payment/Settlement
Service Providers 2018” by Yano Research Institute Ltd.

Our Money Service Business engages in diverse business opportunities created through the integration of financial and information technologies, and we consider it to be a key driver of growth. In taking oneven more business, we decided that a capital injection to strengthen
our financial foundation was necessary in order to handle the higher
capital requirements we expect business expansion to entail, and toFunds raised
April 4, 2005

IPO

Began supporting the development and training of data scientists

take on a certain level of credit risk for services such as GMO Payment
After Delivery and Transaction Lending. To secure low-cost fundingthat facilitates sustainable growth and make our financial position evenmore solid, we raised ¥17.5 billion by exercising 2023 due euro-yen
denominated convertible bonds with warrants.

Investments

GrowthListed on the
TSE Mothers
Raised ¥1.2 billion• Made investments to strengthen existing systems(shift from credit card payment to multi-payment)• Established a business foundation for continued rapid growth• Shifted toward being an integrated payment processing
company

Raised ¥8.0 billion• FinTech services (begin remittance and lending, bolster,
improve Early Payment Service)• Established joint venture• Began investment in North America and ASEAN• Expanded into financial services, accelerated profit growththrough group company expansion• Invested in 17 companies in 10 countries

Raised ¥17.5 billion• Business expansion in five focus areas• Increased working capital and loans, etc., along withexpansion of FinTech (global lending)• Made investment in new financial services• Became the top comprehensive payments/financial services
company in Asia
• Expanded FinTech

June 25, 2015

Allocation of newshares to third parties
June 19, 2018

Euro-yen denominatedconvertible bonds

GMO Payment Gateway, Inc.

Collaboration with the University of Tokyo Graduate
School of Information and Science Technology

Execute timely fund raising and business investment to boost corporate value

Katsunari Mukai

9and training for advanced information technologies in order to deliver
innovations in payments and financial services.

Annual Report 25th Fiscal Year 2017.10.1 – 2018.9.30

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FinTechIoT

CASHLESSGLOBAL

Topics by Business Areas

IoT

Development of the cashless market

Staying a step ahead of the move to cashless payments
and the revision of the Installment Sales Act, while aiming
for business expansion and rapid growth

In April 2018 the Ministry of Economy, Trade and Industry announced
its “Cashless Vision” to raise the current 18.4% ratio of cashless
payments to 40% by 2025. This vision pointed to the importance of
IoT and FinTech for solving problems in order to increase the ratio of

pushing more cashless transactions. Under these circumstances, we expect the 2020 Tokyo Olympics
and Paralympics to add even more momentum to cashless payments—including methods other than

*From the “Cashless Vision” by the Ministry of Economy, Trade and Industry,
announced in April 2018

South Korea 89.1%

China 60.0%

In the card present market, credit card shopping is robust while the Japanese government is also

cashless payments. We thus believe that the needs for our services are
expanding.

80.0%

USA 45.0%

Cashless
Vision18.4%

Roughly double thecurrent ratio by 2025

Aim for 80%
in the future

40.0%

credit cards. We believe this will present new business opportunities for our group, and that our business2015

field will see continued expansion as a result.

2025

Began providing embedded payment devices for vending machines
Offering Japan’s first contactless Visa payment systemfor beverage vending machines
Seizing upon the shift to more cashless payments in the
future we are developing a series of embedded payment
devices for vending machines and automatic service
machines (beverage vending machines, ticket machines,
laundromats, coffee machines, etc.). The first offering wehave developed is an embedded multi-payment device
created jointly with Nayax KK featuring contactless Visa
touch payment which enables purchases just by holding
up a credit card or mobile device. We are working to
implement self-service contactless payments to theoverall “Unattended Market” (all-inclusive title for vending
and service machines) including ticket machines, laundromats, and coffee machines in addition to beveragevending machines.

“Unattended Market” (all-inclusive title for vending and service machines)

Kentaro Sugiyama
President and CEO, GMO Financial Gate, Inc.

In the field of card-present payments which we handle, credit

Sales are accumulating at a particularly solid pace in the field

card transaction volume itself is soaring domestically, whileof embedded devices in the “Unattended Market” (all-inclusive

we also expect the cashless payment market to expand in thetitle for vending and service machines), which we see as a newrunup to the 2020 Tokyo Olympics and Paralympics due togrowth engine and are focusing our efforts accordingly. We arefactors including accelerated changes to payment terminals

also steadily acquiring new merchants through regional finan-that can handle highly-secure IC chip cards as the revision to

cial institutions.

the Installment Sales Act goes into effect.

We seek to deliver continued rapid growth by staying a step

Payment solutions that are compatible with credit card
IC chips and cater to payments by inbound tourists are
preferred in the “Unattended Market” (all-inclusive title forvending and service machines), while the market is also
expected to expand thanks to intensified efforts to secure
good locations for retail (penetration into offices, etc.) andchanges in the environment such as population decline.

Unattended Market
Legacy Category
Vending machines(beverages, food)

Ticket machines(dining, amusement)

New Category
Payment machines(parking lots, hotels,
hospitals)

Office coffee
machines

Self-checkout, EV charging sales
machines, product sales, toy dispensers,
laundry, self-ordering machines

Unattended Market

ahead of change and expanding our stable forms of businesseven further.

11

GMO Payment Gateway, Inc.

Government
promoting cashless

Population decline,
soaring labor cost

Intensifying competition
for good locations

Capturinginbound demand

Credit card
IC compatibility

Annual Report 25th Fiscal Year 2017.10.1 – 2018.9.30

12E - CO M M E RCE

FinTechIoT

CASHLESSGLOBAL

Topics by Business Areas

CASHLESS

Increasing implementation of Ginko Pay which supports the cashless business of financial institutions

Establishing the cashless infrastructure of Japan byproviding payment solutions to financial institutions, andexpanding Ginko Pay while combining it with services
The Japanese government is working on a variety of initiatives to raise the ratio of cashless payments in the
country from 20% in 2016, which is much lower than other countries, to 40% in 2025.
We are working to grow the Ginko Pay platform system developed jointly with the Bank of Yokohama Ltd.,and GMO-PG Processing Platform. These are geared towards financial institutions engaged in new types ofbusiness that contribute to the creation of a cashless society, and we are focusing our efforts on adding moreparticipating business operators.

Ginko Pay is a smartphone payment service linked to bank accounts
which was developed jointly with the Bank of Yokohama. This new
payment method that leverages the strength of banks in combination
with the convenience of smartphones helps support the revitalization of
local economies.
Users who have accounts at financial institutions that have implemented Ginko Pay can execute procedures through a smartphone
app to withdraw money from their accounts and complete payments
without needing to use cash.
Ginko Pay can also not only be deployed as a bank-specific smartphone payment service, but it can also be offered as a service that
goes beyond banks and communities through mutual links between
banks that have implemented it (multi-bank).
Initiatives to go cashless will be accelerating even more. Catering tothis trend, we will have Ginko Pay implemented at even more banks,and support financial institutions in the move to cashless.

Implemented
at more banks
Japan Post Bank

Kumamoto Bank

GinkoPay

Bank of Fukuoka

Bank of Yokohama

Shinwa Bank
Resona Bank Saitama Resona Bank Kinki Osaka Bank

Resona Group

Launching development to create Japan’s first ever cash withdrawal service at ticket machines
Together with Tokyu Corporation, Bank of Yokohama, and Japan
Post Bank, we are launching development to create a cash withdrawal service at ticket machines. This service uses the platformsystem of Ginko Pay to allow cash withdrawals from ticket machines at
Tokyu Coproration railway stations simply by holding up the QR code
displayed on Bank of Yokohama’s “Hama Pay” or Japan Post Bank’s“Yucho Pay” (which is scheduled for launch in February 2019).
This will allow users with accounts at Bank of Yokohama and Japan
Post Bank to withdraw money from ticket machines at Tokyu Linestations they pass through regularly in their daily lives. Since thiscash withdrawal service offers a new usage application for the ticket
machines owned by railway companies, we are also organizing plans
to provide it to railway line operators other than Tokyu.

Tokyu Corporation

GinkoPay
Providing theplatform system

Cash withdrawals

Account
holders

GMO Medical Reservations Technology seeks greater efficiency in medical settings through cashless payments

Masaru Yoshioka
Managing Executive Officer,
Executive Manager of Management Department of Strategic Business, Innovation Partners Division

Our strength in the field of financial services is our ability

implemented in large numbers of financial institutions, but

to comprehend a wide variety of rules for doing businessalso to expand its applications. One application is the ability towhile also being equipped with high level expertise in system

withdraw cash from ticket machines, the first time this has everdevelopment, and in addition to developing our own FinTech

been possible in Japan.

services, being able to provide beneficial services and support

We will expand our range of business and services fromto financial institutions such as banks and credit card compa-

e-commerce and online payments to cashless, as we also

nies as an innovation partner. Ginko Pay is one such service,contribute to even broader growth for business operators.

There is a heightening need for more diversity and automation in
payments for medical expenses. To address these needs Medical
Reservations Technology Co., Ltd. which engages in making the work
operations at medical reception desks more efficient, entered into a
capital alliance with our group company GMO Epsilon, and in August
2018 joined GMO Internet Group, and changed its name to GMO
Medical Reservations Technology Co., Ltd.
In the future we plan to add even more efficiency and convenience tooperations in medical settings by harnessing synergies between theaccumulated expertise from development and operations for various
reservation systems, and the payment solutions that GMO Epsilon
provides.
Medical Reservations Technology

and we aim not only to expand its usable area by having it

13

GMO Payment Gateway, Inc.

Annual Report 25th Fiscal Year 2017.10.1 – 2018.9.30

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FinTechIoT

CASHLESSGLOBAL

Topics by Business Areas

GLOBAL

Aim to establish an ecosystem (recurring model) in global business

From laying the groundwork to a period of expansion, aiming

The strategic goal for our overseas business is to establish a paymentsbase through the growth of Z.com Payment, enlarge our customer
base through Macro Kiosk Berhad, and add to our revenue basethrough the global lending services we launched in 2018. We will seek

additional profit growth by linking the three business segments andestablishing the same ecosystem (recurring model) overseas that wehave established in Japan.

to be the comprehensive payment services leader in Asia

Financial businessBusiness to banks

While providing Z.com Payment to Japanese e-commerce operators and other businesses in theBusiness to merchants

ASEAN region, we are also investing in promising FinTech companies through GMO Global Payment

Minority investment<Business segment>

Macro Kiosk Berhad
became consolidated subsidiary

Money Service
Business

Fund, plus utilizing the group for support through consolidated subsidiary Macro Kiosk Berhad which
provides authentication services to banks that employ scale-first strategies. Doing so, we are driving
our global business as we come upon a transition from the groundwork phase to a period of business

Illustration of revenue<Strategic goal>(Lending)

Additional
revenue base

Payment
enhancements
business

Enlargecustomer base

Payment
processing business

Establish
payments base

Macro Kiosk Berhad sales (Million yen)

+28.0%

expansion in the region that is the center of growth in the world.

4,563

SMS services

3,565Bank clients doubled in two years, 48 banks
Mobile authentication transaction volume
growing 30% per annum

FY2017(Macro Kiosk Berhad)

Mobile payments

FY2018Competitive environment intensifying*Denominated in Japanese yen(Z.com Payment)

FY2014FY2015FY2016FY2017FY2018

Expand the three business segments in global locations
We are working to expand the regional areas and business fieldsof the three segments of payment processing, money service, andpayment enhancements businesses, in order to harness potential
growth in areas of Southwest Asia, where rapid growth is ongoing.

Having launched services of our payment processing business mainly
in ASEAN and our Money Service Business in North America, we arealso planning to enter countries such as India.

United States

Ryu Muramatsu
Director, Executive Vice President,
Head of Corporate Value Creation Strategy Division and President of GMO-Z.com Payment Gateway Pte. Ltd.

Our global business is in the advance investment stage, but we

We have also launched our lending services to fill the gap

are making steady progress. Macro Kiosk Berhad has more

between supply and demand for business capital by compa-

than doubled its customer base in two years from 22 banks tonies in Southeast Asia, and to offer financial support to FinTech

48, while authentication transaction volume in mobile banking

partners as interest rates rise in the United States.

has grown at increasingly faster rates of 20% and 30% over the

We will continue executing our strategy with the aim of being

same two years.

the leader in Asia.

China

TaiwanHong Kong
Philippines

ThailandLaunched global lending services throughcooperation with well-known top FinTech
players in each country who deploy AI

VietnamBusiness segment locations

Malaysia
Singapore
Indonesia

Payment processing business
Payment enhancements business
Money service business2017.10.1-2018.9.30

15

GMO Payment Gateway, Inc.

Annual Report 25th Fiscal Year 2017.10.1 – 2018.9.30

16

Management System

Corporate governanceComplianceFundamental approach

Fundamental approach

Under the management principles of “Seeking both material andspiritual wealth by contributing to the progress and development ofsociety,” our group builds governance systems that can effectively,
efficiently turn these principles into reality. The fundamental approachto corporate governance in our group is to devise and implement
governance systems for healthy business development, while simultaneously ensuring both the efficiency and legitimacy of management.
We consider governance to be one of the most important issues inmanagement.
On December 16, 2018 we responded to changes in the surrounding

environment by establishing an Executive Committee to handle thedecision-making function for the execution of important operations, inorder strengthen the management oversight function due to the separation between oversight and execution. We are working to accelerate
the decision making of management and improve governance, while
also reinforcing the oversight function of the Board of Directors.
To achieve our corporate governance objectives, we are also
committed to conducting more transparent management by providing
timely disclosures for shareholders and investors, and investor relations activities.

Strengthening of the Board of Directors’ supervisory function regarding business execution
and enhancement of the management structure (enacted December 16, 2018)

PurposeWe established an Executive Committee in order to properly deal with changes in the surrounding environment, and we are working toaccelerate management decision making and improve governance, while also reinforcing the oversight function of the Board of Directors.

Overview of the new management structure

Executive officers

Board of Directors

1 Executive officers execute their duties (establishing an Executive Committee to deliberate respective duties) as the(execution of operations)Supervise

persons responsible for the execution of operations, based on management policies decided by the Board of Directors

2 Appointments and dismissals of executive officers are decided by the Board of Directors
3 The duties of executive officers are decided by the Board of Directors
4 The term of office for executive officers continues until the Board of Directors meeting immediately after the end of theannual meeting of shareholders for the last fiscal year ending within one year after the executive officer’s election.

5 Directors are able to serve as executive officers simultaneously

ReportDirectors
Accelerate management
decision making

Clarifying duties andresponsibilities

Executive officers
Better maneuverability forexecution of operations

In our group of companies, we consider the scope of compliance toinclude a) ordinances, b) ethics and social norms, c) rules, regulations,and procedures, and d) management vision. With an awareness of“adapting to the demands of society” (known as full-set compliance)
which includes observance of ordinances, we are actively boosting thecompliance mentality of all our employees. In its yearly audit plan, ourinternal audit office also reviews our state of compliance with ordinances, articles of incorporation, company rules, and other such regu-

Information Security (as of September 30, 2018)
Certified ISO27001 compliant

Incident handling completeWith a scope that encompasses all of ourbusiness locations, we have been certified
as compliant with the ISO/IEC 27001:2013
global information security standard (within
Japan, the JIS Q27001:2014 standard).

We have implemented all of the recurrence prevention measures listed
in the Recurrence Prevention Committee Findings Report published on
May 1, 2017 for the incident that occurred on March 8 and 9, 2017.

Privacy Mark certified
As recognition that we are taking theappropriate measures to safeguard
personal information, we have received
Privacy Mark certification which signifies
compliance with the Japanese Industrial
Standard “JIS Q 15001: 2006 personal
information protection management systems requirements” for thehandling of personal information.

Fully PCI DSS compliant
Board of auditors
Our board of auditors is comprised of four members (of whom three are external auditors). Auditors oversee the executionof duties of directors by conducting audits according to the audit plan formulated by the board of auditors, and by attending
important Board of Directors meetings, etc.

lations. When the circumstances are found to require improvements,
we take corrective measures, and follow up to ensure the corrections
are being made. In addition to the normal reporting systems based on
chains of command, we are building and operating an internal notification system for incidents where compliance violations are thought tohave occurred within our company.

Organizational security management measures
Enhancement of our company-wide risk governance system
Enhancement of our IT risk management system
Improvement of our internal audit and management review system
Improvement of our system development processes

Technological safety measures
PCI DSS re-audit of all our systems
Stop using Apache Struts 2
Split databases
Detect unauthorized access at the SQL level
As a result, we have completed our PCI DSS re-audit, and on January
25, 2018 finished implementing recurrence prevention measures. We
will continue working to improve our information security and enhance
our risk management systems.

The services we provide are in full compliance with version 3.2 of the PCI DSS
global security standard for the credit card
industry, which was jointly formulated by
the five global credit card brands JCB,
American Express, Discover, MasterCard,and Visa. As such, we are delivering peace of mind to all of ourcustomers, in addition to secure credit card payments.

Earned three stars under the monitoring section of the HDI rating benchmark,a first ever in the payment processing industry
Takashi Iinuma

Kazutaka Yoshida

Kazuhiko Okamoto

Yumi Hokazono

AuditorExternal Auditor

External Auditor

External Auditor

17

GMO Payment Gateway, Inc.

In the monitoring section of the HDI rating benchmark, awarded by HDI-Japan which was established under
the same concept as HDI, the world’s largest membership group in the support services industry, we earned
three stars—the highest possible rating. It was the first time the rating has ever been awarded to a company
in the payment processing industry.
Our customer support has received particular praise for “service that values the perspectives of themerchants (customers),” and “proactiveness that goes as far as trying out solutions to problems that havenot even occurred yet in addition to those readily apparent.” GMO-PG will continue seeking to provide
customer support as a partner that assists the growth of our customers as we work to improve and enhance
our support systems to be a useful, reliable presence for large numbers of merchants.

Annual Report 25th Fiscal Year 2017.10.1 – 2018.9.30

18

Highlights by Segment

Payment Processing Business(Million yen)
yen)
Revenue (Million

Installment Sales Act revision. In addition to the growth of our existing(Million yen)
yen)
Revenue mix of major businesses (Million

14,801

In addition to the steady growth of the e-commerce market, we have also
been doing well at acquiring new merchants thanks to the effects of the(Million yen)
yen)
Segment profit (Million

11,89911,899+24.4%+24.4%

Card-present
Card-present
payments
payments

FY2017FY2017
Revenue
Revenuemerchants, use of our services by business operators other than those in

8,064

e-commerce has also expanded, resulting in bigger transaction volume andtotal value, thus contributing to increased revenues.

11,899FY2018FY2018
Revenue
Revenue+26.7%
6,364
6,364 +26.7%

With dedicated efforts to roll out the bank account-linked payment service

14,801

Ginko Pay platform system developed jointly with the Bank of Yokohama Ltd.
to other financial institutions and businesses and expand the number of user
business operators, we successfully launched services using the Ginko Pay
platform system for the Bank of Fukuoka, the Kumamoto Bank, and the
Shinwa Bank, Ltd.

Money Service Business

Online payments
payments
OnlineFY2017FY2017

Revenue (Million(Million yen)
yen)

(MSB)

Remittance Service have also achieved steady growth. Additionally, we

FY2017FY2017FY2018FY2018Segment profit (Million(Million yen)
yen)

Revenue mix of major businesses (Million(Million yen)
yen)

6,254

Transaction value has increased for Early Payment Service and GMO Payment
After Delivery, while services such as Transaction Lending and GMO-PG

FY2018FY2018

4,967
4,967

FY2017FY2017
Revenue
Revenue+25.9%+25.9%

4,967

launched lending services for overseas business operators, which have

Other
Other
payments
payments

contributed to increased revenue. In terms of money service that multi-direc-

FY2018FY2018
Revenue
Revenuetionally supports the growth of B2B e-commerce operators, we beganproviding GMO B2B Early Payment and B2B AR Guarantee in May 2018.
Partnering with Sompo Japan Nipponkoa Insurance Inc., starting in
September 2018 we also began providing GMO B2B Early Payment tooperators who join their commercial credit insurance.

145
145
FY2017FY2017

Payment Enhancements Business

FY2017FY2017+847.4%+847.4%

Payment
Payment
After Delivery
DeliveryAfter

FY2018FY2018Segment profit (Million(Million yen)
yen)

Revenue mix of major businesses (Million(Million yen)
yen)

5,361

While consolidated subsidiary Marco Kiosk Berhad has had steady growthcountries where it is concentrating its efforts, Mobile Payment Services

FY2018FY2018

Revenue (Million(Million yen)
yen)

GMO-PG Online Advertising Services, Marco Kiosk Berhad, etc.
in its Enterprise Mobility Solutions (EMS) business mainly in emerging

6,254

1,377

4,187
4,187

Domestic
business

FY2017FY2017
Revenue
Revenue+28.0%+28.0%

4,187(MPS) business declined.

204
204

Although the company subsequently recorded roughly ¥359.5 million in

FY2018FY2018
Revenue
Revenue-177

impairment loss on goodwill, it remains critically important to the expansion of
our group in Southeast Asia and is plotting growth of at least 25% per annum
in both revenue and operating profit.

5,361
Overseas business(Macro Kiosk Berhad)

GMO-PG Online Advertising Services have experienced a decrease in revenue
due to a downward trend in amounts spent of running advertisements.
FY2017FY2017

19

GMO Payment Gateway, Inc.

FY2018FY2018FY2017FY2017FY2018FY2018Annual Report 25th Fiscal Year 2017.10.1 – 2018.9.30

20

Financial Highlights (consolidated)

Consolidated financial statements

Delivered our 13th consecutive year of revenue and earnings growth since our initial listing in April 2005,
and achieved at least 25% growth despite strategic investments and absorbing goodwill impairment

Consolidated statement of income

Revenue(Million yen)

Operating profit(Million yen)

25.5% increase fromthe previous period

26,417
21,054(Million yen)

65.9% increase fromthe previous period

6,550(Reference)

JGAAP (Japanese accounting standards)
based 33.8% increase from theprevious period
FY2017 ¥5,015 million
FY2018 ¥6,708 million

3,819

9,030

FY2017JGAAP

FY2018FY2014

IFRS

77.3% increase fromthe previous period

FY2015FY2016FY2017

JGAAP

earnings
on equity attributable
EPS (BasicROE (Returnper share)
to owners of parent)

FY2018IFRS

Dividends

from Oct. 1, 2016 to
Sept. 30, 2017

Revenue 1

26,417

21,054

Cost of sales(9,080)(6,530)Gross profit

17,337

14,524165

235(10,470)(10,536)

Other expenses

(480)

(275)

Operating profit 2

6,550

3,948

Financial income

415

71

Financial expenses

(63)

(43)

Investment gains or losses fromequity method (“??” indicates loss)

(203)

(388)

Profit before income tax 3

6,700

3,587

Income tax expenses(2,453)(1,156)

4,246

2,430

4,255

2,420

(8)

9

4,246

2,430

Profit

(Yen)

(Yen)

1 Revenue

In addition to the steady growth of the e-commerce market, revenues
for the payment processing business have also increased because
we are providing more of our group services to customers other thane-commerce business operators. Transaction volume in GMO Payment After Delivery has also been strong, while revenues increased in
Money Service Business (MSB) as well and were also strong for Macro
Kiosk Berhad which provides authentication and notification services
through SMS authentication in addition to mobile payments. Revenues
also increased in our payment enhancements business, producing
total overall revenues of ¥26,417 million (25.5% increase from the previous period).
2 Operating profit

While we enjoyed the benefits of economies of scale that go alongwith higher revenue, our cost of sales ratio rose due to factors including GMO-PG Remittance Service which has a high cost of sales ratio,
GMO Payment After Delivery, and sales of payment terminals for GMO
Financial Gate. Some of the expansion of our Money Service Business(MSB) also brought about higher selling costs and more staff meant
higher labor costs, but overall operating profit totaled ¥6,550 million(65.9% increase from the previous period), with a 24.8% ratio of operating profit to sales.
3 Profit before income tax

While financial income increased from the previous period, investment
losses from equity method decreased, so profit before income tax forthe period increased at a rate of 86.8%, exceeding the 65.9% rate ofincrease for operating profit.

58.0
Profit attributable to

115.5

EPS

Owners of parent

ROE
(%)

Non-controlling interest

78.4

Profit

40.0
27.0

65.2

24.4
52.6

19.1

43.9

15.0

18.0

Changes in figures due to the application of IFRS

17.0
12.9

16.1
FY2014from Oct. 1, 2017 to
Sept. 30, 2018

Selling, general and administrative
expenses

3,948

2,476

FY2016FY2017

Other income

7,205

FY2015FY2018

2,977

12,113

FY2014

Consolidated statement of income: Points to consider

FY2015JGAAP

FY2016FY2017FY2018IFRSFY2014FY2015FY2016FY2017JGAAP

FY2018IFRS

Starting in FY2018 we have been applying IFRS (International accounting stan-

We have decided our dividend for FY2018 to be 58 yen, up by 18 yen from thedards). EPS in FY2017 during which we applied Japanese standards was ¥79.4.

year before in accordance with our basic principles for continuing a stable share-

In FY2015 ROE declined from the previous period, but this was a result ofholder return while maintaining retained earnings necessary for future businessincreased equity due to the allocation of new shares to third parties carried out

expansion and enhancement of our corporate structure.

Starting in the first quarter of FY2018 we began optional applicationof IFRS in order to better accommodate various stakeholders suchas shareholders and investors in Japan and worldwide by making
comparison of our financial data with overseas peers easier, and by
allowing for more expanded disclosures.
Main changes to figures resulting from the application of IFRS are as
follows.

Revenue• Difference accompanying change in basis for calculating
sales (gross net)
• Difference accompanying unification of reporting period
Operating profit• Goodwill is not amortized• Cost calculation accompanying changes in the fair valueof the provision for directors’ remuneration board incentive
plan trust (FY2017)

in June 2015.

21

GMO Payment Gateway, Inc.

Annual Report 25th Fiscal Year 2017.10.1 – 2018.9.30

22

Consolidated financial statements
116,858
Consolidated balance sheet(Million yen)

(Million yen)

FY2018FY2017FY2018FY2017

As of Sept. 30, 2018

As of Sept. 30, 2017

As of Sept. 30, 2018

As of Sept. 30, 2017

AssetsLiabilities

Current assets

Current liabilities

Cash and cash equivalents 4

42,033

27,533

Accounts payable-trade 5

4,663

3,482

Operating receivables andother receivables

13,236

13,769Accounts payable-other 515,74012,697

Advance payments-trade 4

22,267

16,806

Deposits received 541,22837,406

Accounts receivable-other 4

15,717

12,415

Borrowings 5

4,101

820

64

94

98

73

Deposits to affiliates and4
subsidiaries

Other financial liabilities

1,530

1,574

7

—

Other current liabilities

2,030

1,853

Total current liabilities

69,40057,9097,000—

Income taxes payable,etc

Other financial assets

706

50

Provision

Other current assets

1,205

408

Total current assets

102,232

71,079Tangible assets
Goodwill and intangible assets

450

461

4,934

4,766

Corporate bonds 5

16,676—

Borrowings

2,199

2,999

Investments accounted forusing equity method

2,938

2,970

Other financial liabilities

Other financial assets

5,444

3,260

Deferred tax assets

833

1,792

Other non-current assets

24

7

Total non-current assets

14,626

13,259185

158

Provision

64

63

Deferred tax liabilities

205

230

2,107

2,208

Other non-current liabilities
Total non-current liabilities
Total liabilities

21,438

5,659

90,83863,569

4,712

4,712

EquityCapital stock
Capital surplus

5,758

4,985

12,875

9,619

Treasury stock

(491)

(256)

Other items of equity

1,941

613

Retained earnings

4 Current assets

23

GMO Payment Gateway, Inc.

84,33871,079Liabilities

5 Current liabilities

Accounts payable-trade, accounts payable-other accompanying
increased transaction volume for GMO Payment After Delivery, deposits
received accompanying revenues from contracts with representative
Non-current
Non-current
merchants,
borrowings, and corporate bonds that accompany
fundassetsassetsraising all increased. For deposits received, it should be noted that
14,626
13,259the sales amounts (amounts remitted from credit card companies toFY2017FY2018merchants through ourcompany) paid tomerchants with representative(As of Sept. 30, 2017) (As of Sept. 30, 2018)
merchant contracts are recorded at the end of every month.

AssetsLiabilities andnet assets

116,858(Million yen)

Current assets(Million yen)

4

Current assets

Current
liabilities

69,400102,232

84,338116,858

Current
liabilities

584,33857,90971,079Non-current
liabilities
Non-current
assetsNon-current
assets

14,626

13,259FY2017(As of Sept. 30, 2017)

Non-current
liabilities

21,438Equity26,0205Equity5,659

20,769FY2017FY2018(As of Sept. 30, 2017)(As of Sept. 30, 2018)

FY2018(As of Sept. 30, 2018)

Consolidated statement of116,858
cash flowsCurrent

liabilities

69,400Capital decreased due to increases in advance payments-tradeand584,338accounts receivable-other from Money Service Business (MSB), but inCurrent
additionliabilities
to increased deposits received due to robust business activities and expansion
57,909 of our payment processing business, revenues
increased from securities sold and there was also revenue from theNon-current
liabilities
Non-current
liabilities
Net cashprovided by (used in) operating activities

21,438Equity by (used in) investing activities
Net cash provided
20,769FY2017
Net cash provided by (usedin) financingFY2018
activities

26,0205,659

5Equityissuance of convertible bonds. Cash and cash equivalents for theperiod ending September 2018 rose to ¥42,033 million, an increase of¥14,499 million from the end of the previous period.

(Million yen)

FY2018FY2017from Oct. 1, 2017 to Sept. 30, 2018from Oct. 1, 2016 to Sept. 30, 2017

4,701

1,850

(8,296)(2,012)

18,067

2,627

26

(22)

(As of Sept. 30, 2018)

Total equity attributable to ownersof parent

24,796

19,675

Translation differences of cash and cash equivalents

Minority interests

1,223

1,093

Increase (decrease) in cash and cash equivalents

14,4992,442

26,02020,769Balance of cash and cash equivalents at the beginning of the period

27,53325,091

116,858

84,338

Balance of cash and cash equivalents at the end of the period

42,033

27,533

Total equity

116,858

4

Cash and cash equivalents, accounts receivable-other accompanying
increased transaction volume for GMO Payment After Delivery, advancepayments-trade accompanying the expansion of Early Payment
Service, and deposits to affiliates and subsidiaries all increased.
Deposits to affiliates and subsidiaries are from use of the cash management system implemented by GMO Internet Group.

(As of Sept. 30, 2017)

Total assets

84,338an increase of ¥32,520 million from the end of the previous period.

Non-current liabilities

Non-current assets

102,232

The progress of our activities during this period has resulted in ¥116,858
millionassets
in total assets at the end of the period,
Current
AssetsLiabilities and equity

Inventory

Current assets

Consolidated balance sheet: Points to consider

Total liabilities and equity

Annual Report 25th Fiscal Year 2017.10.1 – 2018.9.30

24

Board of Directors & Executive Committee Members

Member of the Board
Executive Committee
MemberMasatoshi
Kumagai

Company Information

President and Chief
Executive Officer

Chairman and Director

Name

Establishment

Director, Executive Vice
President, Head of Corporate
Value Creation Strategy
Division and President of
GMO-Z.com Payment
Gateway Pte. Ltd.

Satoru Isozaki

Yuichi Hisada

Director, Executive Vice
President, Head of Corporate
Support Division

Senior Managing Director,
Head of Innovation
Partners Division

Masashi
YasudaTakehito
KanekoHiroyuki
Nishiyama

Hirofumi
Yamashita

Director

Director

Director

Director

GMO Payment Gateway, Inc.
Stock listing First section of the Tokyo Stock Exchange(Securities code: 3769)
March 1995

Head office

Humax Shibuya Bldg. 7F
1-14-6 Dogenzaka, Shibuya-ku, Tokyo, Japan

Capital stock

4,712 million yen

Capital surplus¥5,758 million

Number of employees
Ryu MuramatsuMembers of the Board (as of December 16, 2018)

Company overview (as of September 30, 2018)

Issei Ainoura

756 (consolidated)

Business outline

Integrated payment related services, and financial services

Memberships

Japan Consumer Credit Association
Japan Multi-Payment Network Protection Association (JAMPA)EC Payment Forum
Japan E-Commerce Consultant Association (JECCICA)

Major subsidiaries

GMO Epsilon, Inc.
GMO Payment Service, Inc.
GMO Financial Gate, Inc.
GMO-Z.com Payment Gateway Pte. Ltd.
Macro Kiosk Berhad

Number of groupcompanies

25 (+ 3 by equity method)

Masatoshi Kumagai
Issei Ainoura
Ryu Muramatsu
Satoru Isozaki
Yuichi Hisada
Masashi Yasuda
Takehito Kaneko
Hiroyuki Nishiyama
Hiroshi Yamashita
Masaya Onagi
Akio Sato
Takashi Iinuma
Kazutaka Yoshida
Kazuhiko Okamoto
Yumi Hokazono
Tomoyuki Murakami
Shinichi Sugiyama
Yusuke Arai
Masaru Yoshioka
Takeshi Yoshii
Takashi Mitani
Katsunari Mukai

Chairman & Director
President & Chief Executive Officer
Executive Vice President
Executive Vice President
Senior Managing Director
Director
Director
Director
Director
External Director
External Director
AuditorExternal Auditor
External Auditor
External Auditor
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer

Major shareholders (as of September 30, 2018)

Stock status (as of September 30, 2018)
Total number of authorized shares: 102,400,000
Total number of issued shares:

37,150,500

Number of shareholders:

3,589

Shareholders and numbers of shares
Financial institutions

18.46%

Masaya Onagi

Akio Sato

External Director

External Director

Tomoyuki
Murakami

ShinichiSugiyama

Managing Executive
Officer, President and Chief
Executive Officer and COO
of SMBC GMO Payment

Managing Executive
Officer, Head of
Systems Division(6,857,400 shares)

Other institutions

Individuals, others

51.89%

6.26%(19,277,004 shares)

Financial instruments
business operators

0.72%(2,325,561 shares)

Foreign institutions, etc.

22.66%(8,419,000 shares)(269,035 shares)

Treasury shares

0.01%(2,500 shares)(Note) On October 1, 2018 the company executed a 2-for-1 stock split of common shares,
but the figures in the charts are the figures before the split.

Yusuke Arai

MasaruYoshioka

Managing Executive
Officer, President andChief Executive Officer
of GMO Epsilon, Inc.

Takeshi Yoshii
Managing Executive
Officer, Executive Manager
of Management Departmentof Sales #2, Innovation
Partners Division

Managing Executive
Officer, Executive Manager
of Management Departmentof Strategic Business,
Innovation Partners Division

Name of shareholder

Shares owned

Stock ownership
ratio (%)

GMO Internet, Inc.

19,186,100

51.64

Japan Trustee Services Bank, Ltd. (Trust account)2,160,300

5.81

Sumitomo Mitsui Banking Corporation

1,250,800

3.36

The Master Trust Bank of Japan, Ltd. (Trust account)961,500

2.58

Issei Ainoura

700,100

1.88

State Street London Care of State Street Bank andTrust, Boston SSBTC A/C UK London Branch Clients –United Kingdom

502,700

1.35

Northern Trust Co. (AVFC) RE IEDU UCITS CLIENTSNON LENDING 15 PCT Treaty Account473,200

1.27

Pictet & Cie (Europe) S.A., Luxembourg Ref: UCITS

430,000

1.15

CIP as Depositary for Standard Life Investment
Company Global Smaller Companies Fund

381,718

1.02

J.P. Morgan Chase Bank 385632

345,673

0.93(Note) We calculate stock ownership ratio after deducting treasury shares (2,500 shares)
from total number of issued shares.
(Note) On October 1, 2018 the company executed a 2-for-1 stock split of common shares,
but the figures in the charts are the figures before the split.

Notes for shareholders
Business year

October 1 through September 30 of the following year

Base dates for dividends of surplus

December 31, March 31, June 30, September 30

Annual meeting of shareholders

Annually in December

Shareholder registry administrator

Mitsubishi UFJ Trust and Banking Corp.

Administrator contact information

Mitsubishi UFJ Trust and Banking Corp.
Stock Transfer Agency Department
1-1 Nikkocho, Fuchu-shi, Tokyo
0120-232-711 (toll-free)Takashi Mitani

Katsunari Mukai

Stock listing

Tokyo Stock ExchangeManaging Executive
Officer, CTO, Executive
Manager of Management
Department of IT Service
and General Manager of
IT Service Department,
Systems Division

Managing Executive
Officer, President andChief Executive Officer
of GMO Payment
Service, Inc.

Method of public notices

Through electronic public notices
Notices published at https://corp.gmo-pg.com/ir/(However, when electronic public notices cannot be published
due to an accident or any other inevitable circumstances, wewill publish them in the Nihon Keizai Shimbun newspaper)[Announcements]
1. Points of note
(1) In principle, procedures such as change of shareholder address, bank remittance specifications for dividends, and purchase requests, are handled by the account management institution (securities company,etc.) where the account was opened. Please contact the securities company or other such institution atwhich you opened your account. Please note that the shareholder registry administrator (Mitsubishi UFJ
Trust and Banking Corp.) does not handle such matters.
(2) Unpaid dividends can be received at the main branch, or other branch offices of Mitsubishi UFJ Trust andBanking Corp.
2. Dividend calculation statements
The enclosed “Dividend Calculation Statement” also serves as the “Notice of Payment” created based on
regulations specified in the Act on Special Measures Concerning Taxation. After receiving payment of thedividend, it can serve as confirmation of the dividend amount and as information used when filing income
taxes. Shareholders who receive dividends through their securities accounts (pro-rated method for number ofshares) should contact the securities company that performs the transactions for details.
3. For procedures pertaining to shares registered in special accounts, please contact the institution that administers special accounts, Tokyo Securities Transfer Agent Co., Ltd.
Mailing address and phone number
2-8-4 Izumi, Suginami-ku, Tokyo 168-8522 Tokyo Securities Transfer Agent Co., Ltd. Business Center
0120-49-7009 (toll-free)* At the annual meeting of shareholders held on December 20, 2015, it was decided that the board of directors would be the decision-making body for dividends of surplus, and that the record
dates for these dividends would be December 31, March 31, June 30, and September 30. As a result, we are able to distribute dividends of surplus on four occasions throughout the year. However, in order to ensure the retained earnings that our business structure requires, our plan calls for the year-end dividend to be the single dividend of surplus distributed during the year.

25

GMO Payment Gateway, Inc.

Annual Report 25th Fiscal Year 2017.10.1 – 2018.9.30

26

GMO Payment Gateway, Inc.
URL https://www.gmo-pg.com/enTokyo Head Oﬃce:
Humax Shibuya Building 7F,
1-14-6 Dogenzaka, Shibuya-ku, Tokyo 150-0043
Tel: +81-3-3464-2740
Osaka Branch:
Grand Front Osaka Tower B 23F,
3-1 Ofukacho, Kita-ku, Osaka 530-0011
Tel: +81-6-7634-3070
Fukuoka Branch:
Tenjin Asahi Building 5F,
3-4-7 Tenjin, Chuo-ku, Fukuoka 810-0001
Tel: +81-92-688-9018