Consolidated Financial Results
for the First Quarter of the Fiscal Year Ending September 30, 2018 (FY9/18)(Three Months Ended December 31, 2017)[Japanese GAAP]
February 14, 2018

Stock Exchange Listing: TSE

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

6191 (URL: http://www.evolableasia.com/)
Hideki Yoshimura, CEO
Yusuke Shibata, Director and CFO
TEL: +81-(0)3-3431-6191
Scheduled date of filing of Quarterly Report:
February 14, 2018
Scheduled date of payment of dividend:
December 25, 2018
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results briefing:
Yes (for institutional investors and securities
analysts)(All amounts are rounded down to the nearest million yen)

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

Operating income%

Millions of yen%

Ordinary income
Millions of yen%

Profit attributable toowners of parent
Millions of yen

Three months ended Dec. 31, 2017
1,606
Three months ended Dec. 31, 2016
1,202
Note: Comprehensive income (millions of yen)

33.6
87 (55.9)
86 (57.0)
44.3
198
38.7
201
45.0
Three months ended Dec. 31, 2017:132 (-33.6%)
Three months ended Dec. 31, 2016:
199 (111.7%)
Profit per share
Fully diluted profit per share
Yen

Three months ended Dec. 31, 2017
Three months ended Dec. 31, 2016

39
147

%

(73.5)
79.4

Yen

2.27
8.86

2.18
8.48

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Millions of yen

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

9,969
7,478
As of Dec. 31, 2017: 3,575

Equity ratio
%

3,951
3,226
As of Sep. 30, 2017: 2,773

35.8
37.2

2. Dividends
1Q-end2Q-endYen

Yen

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

Dividend per share
3Q-endYear-end
Yen

Total

Yen

Yen

0.00

–

7.00

7.00

0.00

–

10.00

10.00

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

Operating income%

Millions of yen%

Millions of yen

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

881

%

Yen

–

52.09

: The Company has decided to voluntarily apply the International Financial Reporting Standards (IFRS) to the accountingof results from the announcement of full-year results for the fiscal year ending September 30, 2018. The
consolidated results forecasts for the fiscal year ending September 30, 2018 are thus prepared based on the
IFRS, and no year-on-year percentage changes are stated.

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

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

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

As of Dec. 31, 2017:17,324,700 shares

As of Sep. 30, 2017:

16,919,100 shares

As of Sep. 30, 2017:– shares

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

As of Dec. 31, 2017:
3) Average number of shares issued during the period
Three months ended Dec. 31, 2017:17,198,651 shares

Three months ended Dec. 31, 2016:

16,682,419 shares* The current quarterly financial report is exempt from quarterly review procedures.
* Explanation of appropriate use of earnings forecasts, and other special items
Forecasts of future performance in these materials are based on information currently available to the Company. Consequently, thesestatements incorporate many uncertainties. Please note that actual performance may differ from these forecasts due to changes ininternal or external factors affecting business operations and other factors.

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

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

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
During the first quarter under review, the global economy generally posted moderate economic growth, reflecting a
slowdown in the Chinese economy and a recovery in the economies of advanced and resource-rich countries as well as in Asia,
support from domestic demand in ASEAN, and a recovery in India.
The Japanese economy continued to expand at a steady pace, supported by increased domestic demand and inbound tourist
demand against the background of the upcoming Tokyo Olympics in 2020, in addition to improvements in employment andcorporate profits.
In the travel industry, the number of Japanese citizens who left Japan in the period from January to Dec ember 2017 totaled
17,880,000, increasing about 0.77 million from the same period of the previous fiscal year according to the statistics releas edby the Japan National Tourism Organization (JNTO). In addition, the number of foreigners who visited Japan fr om January to
December 2017 surpassed 28,690,000. Their number rose steadily toward 40 million, the target for 2020 set in the Tourism
Vision to Support the Future of Japan, which the Japanese government adopted in March 2016.
Under these conditions, Evolable Asia Corp. (hereinafter the “Company”) continued expanding its operations, diversifying
its service lines, with a focus on sales of domestic airline tickets as an online travel agency. The Company also continued t oenhance its services for foreign visitors, making the most of its online travel business expertise.
In the IT Offshore Development Business, which was launched in 2012, the Company steadily won customers in numerous
business categories and increased the number of engineers employed, focusin g on the development of lab-type facilities inVietnam. The number of hired engineers grew to about 800 as of December 2017. In the Investment Business, which has beendeveloping in earnest since the stock was listed, the Company has been investing in growing companies. As of December 2017,
the Company has invested in 29 companies.
As a result, the Group achieved consolidated net sales of 1,606,806 thousand yen (up 33.6% year on year), consolidated
operating income of 87,555 thousand yen (down 55.9% year on year), consolidated ordinary income of 86,606 thousand yen(down 57.0% year on year), consolidated profit before income taxes of 86,606 thousand yen (down 57.0% year on year), andconsolidated profit attributable to owners of parent of 39,091 thousand ye n (down 73.5% year on year).
The Company plans to adopt the IFRS in the fiscal year ending September 30, 2018. Under the IFRS, in the three months
under review, the Group recorded consolidated net sales of 1,630,654 thousand yen, consolidated operating income of 137,081
thousand yen, and consolidated profit attributable to owners o f parent of 79,440 thousand yen (unaudited reference values).
Operating results by segment are as follows.
(1) Online Travel Agency Business
The Group offers the following four services in the Online Travel Agency Business segment.
⁃ BtoC services (operation of PC and smartphone websites for selling travel commodities directly to general consumers)
The Company improved mass marketing and search engine marketing and renewed mission -critical systems significantly toacquire new customers. The Company also improved user interfaces to increase the number of repeat customers. These
contributed to a steady increase in the number of service users.
- BtoBtoC services (travel content provision under brands owned by business partners)
The enhanced development of alliances with major partners, the provision of services to match the needs of major partners,
and enhanced communication with partners contributed to an increase in service use.
- BtoB services (wholesale to other travel agencies)
Trends in the airline industry and policies enforced by business partners affect these services to a certain extent. The onli ne
travel agency business for operators handling domestic airline tickets grew dynamically as a whole, with an increase in thenumber of domestic air routes in service. As a result, net sales for these services increased strongly.
- BTM services (centralized management of internal approval procedures and arrangements associated with corporate
business trips)
These services basically adopt a business model under which net sales expand in a manner that is linked with an increase in
the number of corporate customers and a rise in their usage rate. The services achieved growth attributable to initiatives takenby the Group, including the addition of salespeople and the identification of existing customers who used the services at a-2-

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

relatively low rate.
As a result of the factors stated above, net sales for the Online Travel Agency Business segment amounted to 982,759
thousand yen and segment income came to 58,426 thousand yen in the fiscal year under review.
(2) IT Offshore Development BusinessIn the IT Offshore Development Business segment, the Group offers lab-type facility development services to customers
consisting mainly of e-commerce operators, web solution providers, and game and system developers in Ho Chi Minh, Hanoi
and Da Nang in Vietnam.
The Company’s lab-type facility development model is distinctive in that a team is formed with new dedicated staff members
hired for each customer. The model also enables customers to confirm the state of lab -type facility development on demand.
The Company assumes the assignment of dedicated staff members to each team on a medium- to long-term basis. For thatreason, the success or failure of development depends on employing workers suited to customer demands and motivating therespective engineers more.
In addition, these services basically adopt a business model under which customers are billed on the basis of man -months
and the number of workers. The number of engineers supplied to clients and the man -months affect net sales for themsignificantly. An increase in the number of engineers and a rise in the unit cost due to development streamlining contributed
to sales growth in the fiscal year under review.
As a result of the factors stated above, net sales for the IT Offshore Development Business segment reached 563, 909
thousand yen, and segment income totaled 57,283 thousand yen.
(3) Investment BusinessIn the Investment Business segment, the Group emphasizes synergies with the existing businesses and expands service lines
through aggressive M&A and capital alliances. The Group is pursuing investment in growing companies to improve
profitability. In the fiscal year under review, the Group expanded the number of companies that it invests in to 2 9.
As a result, net sales for the Investment Business segment stood at 100,571 thousand yen, and segment income was 90,301
thousand yen.

-3-

Evolable Asia Corp. (6191) Financial Results for the First Quarter of FY9/18(2) Explanation of Financial Position(Assets)
Total assets increased 2,491,008 thousand yen from the end of the previous fiscal year, to 9,969,649 thousand yen at the endof the first quarter under review. This result was mainly due to an increase of 504,899 thousand yen in cash and deposits, arise of 374,431 thousand yen in operational investment securities, and a climb of 1,210,123 thousand yen in goodwill.
(Liabilities)
Liabilities increased 1,766,202 thousand yen from the end of the previous fiscal year, to 6,018,420 thousand yen at the endof the first quarter under review. This result primarily reflected an increase of 1,239,162 thousand yen in short -term loans
payable and a rise of 686,907 thousand yen in long-term loans payable.
(Net Assets)
Net assets rose 724,805 thousand yen from the end of the previous fiscal year, to 3,951,228 thousand yen at the end of thefirst quarter under review. This result was mainly attributable to an increase of 813,953 thousand yen in capital surplus.

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

-4-

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

2. Quarterly Consolidated Financial Statements(1) Consolidated Balance Sheet(Thousands of yen)First quarter of the fiscal year underreview(as of Dec. 31, 2017)

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

2,139,151

2,644,050

Notes and accounts receivable - trade

1,386,136

1,385,419

Operational investment securities

1,100,489

1,474,920

Merchandise and finished goods

45,032

20,968Deferred tax assets

78,16628,136

Accounts receivable - other

181,394

236,016

Other

227,716

312,305

(16)

(121)

5,158,070

6,101,695

Buildings, net

153,550

192,584

Vehicles, net

105,372

118,679

Tools, furniture and fixtures, net

100,864

117,338

7,123–

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

Construction in progress–

31,182366,910459,785

Goodwill

724,820

1,934,943

Software609,762

761,813Land
Total property, plant and equipment
Intangible assets

–

2,244

1,334,582

2,699,001

Investment securities

31,80133,012

Deferred tax assets

12,597

24,213

Guarantee deposits
Claims provable in bankruptcy,
claims provable in rehabilitationand otherOther

548,921618,11325,43025,48025,75633,826

Other
Total intangible assets
Investments and other assets

Allowance for doubtful accounts(25,430)(25,480)

Total investments and other assets

619,075

709,166

2,320,569

3,867,953

7,478,640

9,969,649

Total non-current assets
Total assets-5-Evolable Asia Corp. (6191) Financial Results for the First Quarter of FY9/18(Thousands of yen)First quarter of the fiscal year
under review(as of Dec. 31, 2017)

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

1,217,235

Short-term loans payable

655,159

1,894,322

Accounts payable - other487,496564,506

Accrued expenses

155,181

93,686

Income taxes payable

188,727

17,728Provision for bonuses

46,852

76,413

Provision for point card certificates

4,367

6,303

Notes and accounts payable - trade

Provision for shareholder benefit program

26,3945,000

Current portion of long-term loans payable

122,258

302,258

5,574

5,574

268,647

493,158

3,519,009

4,676,187

Long-term loans payable

622,780

1,309,687

Long-term guarantee deposited

81,52813,264

Net defined benefit liability

5,094

6,404

Deferred tax liabilities

9,534

–

Lease obligations
Other
Total current liabilities
Non-current liabilities

Lease obligations

14,27012,876

Total non-current liabilities

733,208

1,342,232

4,252,217

6,018,420

Capital stock

1,031,127

1,035,744

Capital surplus

837,092

1,651,045

Total liabilities
Net assets
Shareholders’ equity

865,064

785,7222,733,284

3,472,512

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

39,718105,464

446

515

Foreign currency translation adjustment(216)(3,107)39,948102,872

48,72948,729Retained earnings
Total shareholders’ equity

Total accumulated other comprehensive
incomeSubscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets-6-

404,459

327,1143,226,422

3,951,228

7,478,640

9,969,649

Evolable Asia Corp. (6191) Financial Results for the First Quarter of FY9/18(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statement of Income)(For the Three-month Period)

Net sales

Three months ended
December 31, 2016
(Oct. 1, 2016 – Dec. 31, 2016)
1,202,073

Cost of sales(Thousands of yen)Three months ended
December 31, 2017
(Oct. 1, 2017 – Dec. 31, 2017)
1,606,806

194,171

391,369

1,007,901

1,215,437

Selling, general and administrative expenses

809,156

1,127,881

Operating income

198,745

87,555Gross profit

Non-operating income
Interest income

1,319

542

Foreign exchange gains
Share of profit of entities accounted for using
equity method
Other

5,931

1,889

360

–

397

2,031

Total non-operating income

8,009

4,463

Provision of allowance for doubtful accounts

2,741

49

Interest expenses

1,982

5,149

166

214

4,891

5,412

Ordinary income

201,862

86,606

Profit before income taxes

201,862

86,606

Income taxes

36,13913,849Profit165,723

72,756

Profit attributable to non-controlling interests

17,91933,664

Profit attributable to owners of parent

147,804

39,091Non-operating expenses

Other
Total non-operating expenses-7-

Evolable Asia Corp. (6191) Financial Results for the First Quarter of FY9/18(Consolidated Statement of Comprehensive Income)(For the Three-month Period)
Three months ended
December 31, 2016
(Oct. 1, 2016 – Dec. 31, 2016)
Profit(Thousands of yen)Three months ended
December 31, 2017
(Oct. 1, 2017 – Dec. 31, 2017)

165,723

72,756–65,746

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

7,058

69

Foreign currency translation adjustment

26,439(5,668)

Total other comprehensive income

33,49760,146

199,221

132,902168,346

102,015

30,87430,887

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to ownersof parent
Comprehensive income attributable to noncontrolling interests-8-Evolable Asia Corp. (6191) Financial Results for the First Quarter of FY9/18(3) Notes to Quarterly Consolidated Financial Statements(Notes on going concern assumptions)
Notes on going concern assumptions(Significant changes in shareholders’ equity)
The Company implemented a share exchange with the effective date of October 6, 2017, with the Company being awholly owning parent company and EA1 Corp. being a wholly owned subsidiary. In addition, upon the acquisition ofshares on October 10, 2017 and the exchange of shares on November 6, 2017, N’s Enterprise Inc. was made a wholly
owned subsidiary. As a result, for the first quarter under review, capital surplus increased 349,934 thousand yen upon theexchange of the shares of EA1 Corp., and capital surplus increased 459,400 thousand yen upon the exchange of the sharesof N’s Enterprise Inc. Capital surplus at the end of the first quarter under review was 1,651,045 thousand yen.
(Application of special accounting methods for presenting quarterly consolidated financial statements)(Calculation of tax expenses)
The tax expenses are calculated by obtaining a reasonable estimate of the effective tax rate on profit before income
taxes for the fiscal year, which includes the first quarter under review, after the application of the tax effect accounting,and multiplying the profit before income taxes by the said estimated effective tax rate.
(Changes in accounting policies)
Not applicable.
(Changes in accounting estimates)
Not applicable.

-9-Evolable Asia Corp. (6191) Financial Results for the First Quarter of FY9/18(Segment information, etc.)
Segment Information
Three months ended December 31, 2016 (Oct. 1, 2016 – Dec. 31, 2016)
1. Information related to net sales and profits (losses) for the respective reportable segments(Thousands of yen)

Adjustment(Note 1)

Amount onquarterly
consolidated
statement ofincome(Note 2)

1,202,073–

1,202,073–

20,703(20,703)–333,364155

1,222,776(20,703)

1,202,073

24,948(0)322,331(123,586)

198,745

Reportable segment
Online Travel
AgencyBusiness

IT Offshore
Development
Business

Otherbusinesses

889,256

312,660

155–

20,703

Total

889,256

Segment profits (losses)

297,383

Total

Net sales
Sales to externalcustomers
Intersegment sales
and transfers

Notes: 1. The adjustment of -123,586 thousand yen to the segment profits (losses) includes corporate expenses whichmainly consist of general and administrative expenses that are not attributable to the reportable segments.
2. The segment profit or loss has been adjusted to the operating income stated in the quarterly consolidated
statement of income.

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

IT Offshore
Development
Business

Otherbusinesses

Total

982,759

523,446

100,571–

40,463

Total

982,759

Segment profits(losses)

58,426(Thousands of yen)Amount onquarterly
consoliAdjustment
dated(Note 1)statementof income(Note 2)

Other

Total

1,606,778

28

1,606,806–

1,606,806–

40,463–40,463(40,463)–

563,909

100,571

1,647,241

28

1,647,270(40,463)

1,606,806

57,28390,301

206,011(0)

206,010(118,455)

87,555Net sales
Sales to externalcustomers
Intersegment sales
and transfers

Notes: 1. The category “Other” includes the business segments not included in the reportable segments, such as advertising
revenue.
2. The adjustment of -118,455 thousand yen to the segment profits (losses) includes corporate expenses whichmainly consist of general and administrative expenses that are not attributable to the reportable segments.
3. The segment profit or loss has been adjusted to the operating income stated in the quarterly consolidated- 10 -

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

statement of income.
2. Matters regarding change of reportable segments
The Company launched the Investment Business in the previous consolidated fiscal year under review, and the reportablesegments were changed from the Online Travel Agency Business, the IT Offshore Development Business, and Other
Businesses to the Online Travel Agency Business, the IT Offshore Development Business, and the Investment Business.
Because of the lack of importance of the Investment Business for the first three months of the previous fiscal year, no
reclassification was carried out.

3. Information about impairment loss of property, plant and equipment or goodwill, etc. by reportable segment(Material impairment loss related to property, plant and equipment)
Not applicable.

(Material change in the amount of goodwill)In the Online Travel Agency Business, goodwill was posted upon the acquisition of the shares of consolidated subsidiaries,
N’s Enterprise Inc. and EA1 Corp. The goodwill posted upon these events was 997,395 thousand yen and 237,887
thousand yen, respectively. These amounts of goodwill were tentatively determined because the appropriation of theacquisition cost is not completed.

(Material gain on bargain purchase)
Not applicable.

(Important subsequent events)
Not applicable.

- 11 -