Summary of Consolidated Financial Statements for the Third Quarter, FY2019 (IFRS)
August 6, 2019
Exchange: First Section of Tokyo Stock Exchange
Name of listed company:

GMO Payment Gateway, Inc.

Stock code:

3769

Representative:

Issei Ainoura

President & Chief Executive Officer

Contact:

Ryu Muramatsu

Director, Executive Vice President

Tel: +81-3-3464-0182

Scheduled submission date of quarterly
reportAugust 7, 2019

Scheduled date of commencementfor dividend payment-

Supplemental materials prepared forfinancial results

Yes

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

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

1.

Consolidated Financial Statements for the Third Quarter, FY2019(From October 1, 2018 to June 30, 2019)(1) Consolidated Financial Statements (Cumulative)(Percentages represent year-on-year % change)

Operating profit

Profit before
income taxes

Profit after tax

Q3 FY2019

Millionyen %23,961 25.3

Millionyen %6,760 30.2

Millionyen %6,582 30.6

Millionyen %4,214 40.2

Million
yen
4,252

Total
comprehensive
incomeMillion
%
%
yen
41.0
3,587 △29.8

Q3 FY201819,122 24.5

5,190 60.0

5,041 73.9

3,005 44.4

3,016

46.1

Revenue

Basic earnings per share

Profit attributableto owners of parent

5,113

105.4

Diluted earnings per share

Q3 FY2019

Yen
57.81

Yen
56.55

Q3 FY2018

40.94

40.90

(Note) On October 1, 2018, our company executed a 2-1 stock split. The values for FY2018 are calculated on the same base.

(2) Consolidated Financial Position
Total assets

Q3 FY2019
FY20182.

Total equity attributableto owners of parent

Total equity

Million yen
126,948
116,858

Million yen
26,67326,020Million yen
25,462
24,796

Total equity attributable toowners of parent to total
assets
%20.1
21.2

Dividends

FY 2018
FY 2019
FY 2019 (forecast)End of Q1
Yen
0.00
0.00

Full-year dividend
End of Q2
End of Q3
Year-end
Yen
Yen
Yen
0.00
0.00
58.00
0.00
0.00
35.00

Total
Yen
58.00
35.00

(Note 1) Revision to the most recently released dividend forecast: No(Note 2) On October 1, 2018, our company executed a 2-1 stock split. The values for FY2018 are calculated on the same base.

3.

Consolidated Financial Forecast for the Fiscal Year Ending September 2019
(From October 1, 2018 to September 30, 2019)(Full year % represents comparison with previous term)

Revenue

Full year

Millionyen%
31,850 20.6

Profit before
income taxes
MillionMillionyen%
yen%
8,300 26.7
8,108 21.0

Operating profit(Note) Revision of the most recently released financial forecast: No―1―

Profit attributable to Basic earnings
owners of parent
per share
MillionMillion
yen
%
yen
%
Yen
5,206 22.6
5,106
20.0
69.32
ProfitNotices:(1) Changes of important subsidiaries during the period (change of specific subsidiaries that leads to a change in thescope of consolidation): No
Number of new subsidiaries: - (Name:), Number of excluded subsidiaries: - (Name:)(2) Changes in the accounting policy / changes in the accounting estimation[1] Changes in accounting policy required by IFRS.: Yes[2] Changes in accounting policy other than [1]: No[3] Changes in accounting estimations: No(3) Number of shares issued (common stock)
Q3 FY2019: 74,301,000
FY 2018: 74,301,000[1] Number of shares issued at the end of the term(including treasury stock)
FY 2018: 5,000[2] Number of treasury shares at the end of the term Q3 FY2019: 5,076[3] Average number of shares during the term
Q3 FY2019: 73,562,350
Q3 FY2018: 73,677,626(quarterly average)(Note 1) Number of treasury shares at the end of the term includes the shares attributed to the directors’
remuneration board incentive plan (BIP) trust and J-ESOP: 639,400 shares for FY2018 and 734,205 sharesfor Q3 FY2019.)(Note 2) On October 1, 2018, our company executed a 2-1 stock split. The shares issued at start of the previous
term are calculated by assuming the post-split number of shares.
* These quarterly financial statements are not subject to the quarterly review procedures.
* Notes regarding the appropriate use of financial forecast and other important notes
1. The above forecasts are outlooks based on information currently available, and include various uncertain factors.
Actual performance may differ substantially from the forecasts due to changes in business conditions and other factors.
For the assumption on which financial forecasts are based and matters to be considered in using financial forecasts,
please refer to “(3) Review of consolidated earnings forecasts and other forecasts” under “1. Qualitative Information on
Consolidated Financial Statements for the Quarter” on page 6 of the attachment.
2. Results Presentation Meeting for Institutional Investors and Analysts to be held on August 7, 2019. Supporting
materials and a video of the presentation will be made available on the company's website after the event.

―2―

○Table of contents of attachment

1. Qualitative Information on Consolidated Financial Statements for the Quarter……………………………… 4(1) Consolidated operating results………………………………………..……………………………………… 4(2) Status of consolidated financial position………………………………..…………………………………… 8(3) Review of consolidated earnings forecasts and other forecasts………..………………………………... 9
2. Condensed consolidated Financial Statements and Major Notes………………………………………..…….10(1) Condensed consolidated balance sheet……………………………………………………………………..10(2) Condensed consolidated income statement and comprehensive income……………………………….12(3) Condensed consolidated statement of changes in equity…………………………….……………………14(4) Condensed consolidated statement of cash flows……………………………………….…………………15(5) Notes regarding the going concern assumptions…………………………………………..……………….17(6) Notes regarding condensed consolidated financial statements……………………………………….…..18―3―

1. Qualitative Information on Consolidated Financial Statements for the Quarter(1) Consolidated operating results
Forward-looking statements in the document are based on the judgement of the Group at the end of the quarter
under review.
① Consolidated operating results
The Group announces its earnings results for the cumulative Third Quarter of the consolidated fiscal year
(October 1, 2018 to June 30, 2019) as follows.
(Unit: Thousand yen)First nine months of theprevious consolidated
fiscal year
(From October 1, 2017
to June 30, 2018)

First nine months of thecurrent consolidated
fiscal year
(From October 1, 2018
to June 30, 2019)

Rate of change (%)

Revenue

19,122,148

23,961,206

25.3

Operating profit

5,190,799

6,760,039

30.2

Profit before income taxes

5,041,554

6,582,107

30.6

3,016,049

4,252,580

41.0

Profit attributable toowners of parent

a. Revenue
The Group’s revenue surged to ¥23,961 mil., up by 25.3% year-on-year. The Payment Processing Businessrevenue continued to grow thanks to the steady growth of the E-Commerce (hereafter “EC”) market, coupledwith the expansion of the Group’s services to non-EC operators. Our Money Service Business (MSB) revenue
also rose from the steady expansion of transaction value of GMO Payment After Delivery, a type of payment
service after the collection/delivery of goods, and the Remittance service. The Payment Enhancement Businessrevenue also grew, driven by the growth at Macro Kiosk, the Group’s consolidated subsidiary that provides acomprehensive service of mobile payment and mobile authentication and notification.
Our revenue breakdown by business model is as follows.
With the adoption of IFRS 15 effective from the start of this consolidated fiscal year 2019, the softwaredevelopment revenue for the payment processing service is recognized as prorated over the life of the service
provision period, compared to the previous lump sum method booked at point of delivery inspection. As such,the software development revenue has been reclassified from Initial to Stock. The amount reclassified from
Initial to Stock is ¥527 mil. in the Third Quarter of the cumulative consolidated fiscal year (October 2018 to June2019). There is no retroactive reclassification applied as the adjustment of the cumulative effect from the initial
application of IFRS 15 is made against Retained Earnings balance at the start of this consolidated fiscal year
2019.

―4―

(Unit: Thousand JPY)

Business modelFirst nine months of theprevious consolidated
fiscal year
(From October 1, 2017
to June 30, 2018)

Initial(Initial revenue)

First nine months of thecurrent consolidated
fiscal year
(From October 1, 2018
to June 30, 2019)

Rate of change (%)

938,129

1,042,070

11.1

Stock
(Monthly revenue)
Fee(Transaction processing
revenue)
Spread(Merchant acquiring
service revenue)

2,521,611

3,651,520

44.8

7,502,910

9,041,986

20.5

8,159,496

10,225,628

25.3

Total

19,122,148

23,961,206

25.3

b. Operating profit
The Group’s operating profit reached ¥6,760 mil., up by 30.2% YoY, on track to achieve the Group’s
consolidated fiscal year forecast. Note that the YoY growth of 30.2% in this Third Quarter is significantly lower
than the 60.0% recorded in previous fiscal year’s Third Quarter, but this is due to inclusion of expenses related
to changes in the fair value of Provisions for Director’s remuneration BIP Trust in the previous period (i.e.
October 1, 2016 to June 30, 2017).
By segment, Payment Processing Business operating profit was ¥7,352 mil., up by 21.4% YoY; Money Service
Business stood at ¥1,477 mil., up by 69.0% YoY; and, Payment Enhancement Business recorded an operating
loss of ¥51 mil. (previous Third Quarter was an operating profit of ¥106 mil.).
c. Profit before income taxes
Pre-tax profit was ¥6,582 mil. up by 30.6% YoY, from the reasons stated above in a. and b.

―5―

②Results by segment
Performance by reportable segment is explained below.
(Unit: Thousand yen)Segment

Payment Processing
Business
Revenue
Operating profit
Money Service Business
Revenue
Operating profit
Payment Enhancement
Business
Revenue
Operating profit
Adjustments
Revenue
Operating profit
Total
Revenue
Operating profit

First nine months of theprevious consolidated
fiscal year
(From October 1, 2017
to June 30, 2018)

First nine months of thecurrent consolidated
fiscal year
(From October 1, 2018
to June 30, 2019)

Rate of change (%)

10,668,495
6,056,207

13,866,435
7,352,230

30.0
21.4

4,580,622
874,305

5,744,779
1,477,868

25.4
69.0

3,873,030
106,546

4,349,991△51,994

12.3－－△1,846,258－△2,018,064－－

19,122,148
5,190,799

23,961,206
6,760,039

25.3
30.2

a. Payment Processing Business
The payment processing business is primarily comprised of payment processing services for online payment,
recurring payment and, offline payment.
The online payment and recurring payment areas grew thanks to the secular growth of the EC market and theconcerted efforts to acquire large-scale merchants and non-EC merchants given the tailwinds from theInstallment Sales Act amendment. As a result, transaction volume grew at 28.4% YoY and transaction value
grew at 26.6% YoY.
We focused on enrolling more financial institutions onto the Ginko Pay payment platform, the bank-accountlinked smart payment service co-developed by The Bank of Yokohama Ltd. and the Group, in order to enhance
our support services to financial institutions and financial service providers that are promoting new businesses
to build a cashless society.
As a result, segment revenues reached ¥13,866 mil. up by 30.0% YoY and segment profit (operating profit)
was ¥7,352 mil. up by 21.4% YoY.

b. Money Service Business
Money Service Business (hereafter, MSB) consists of the Early Payment Service, a cash flow improving service
whereby merchants receive sales proceeds earlier according to the merchant’s cash cycle needs; theTransaction Lending Service to lend growth capital to merchants based on their payment and other data; theRemittance Service and, the GMO Payment After Delivery offered by the Group’s consolidated subsidiary GMO
Payment Service, Inc.
GMO Payment After Delivery and the Remittance Service showed a steady increase for the cumulative Third
Quarter period under review, and the lending service to overseas business operators, launched in the previous
year, also contributed to increase the segment revenue.
As a result of the above, segment revenue reached to ¥5,744 mil. up by 25.4% YoY, and operating profit
reached ¥1,477 mil. up by 69.0% YoY, boosted by the revenue growth as well as concerted effort to lower
credit costs.

―6―

c. Payment Enhancement Business
Payment Enhancement Business consists of authentication and notification services via SMS (known as the
EMS business) and the mobile payment services (known as the MPS business), provided by our consolidated
subsidiary Macro Kiosk Berhad, and an online advertising service to expand sales of the Group’s merchants byanalyzing their sales status and running timely ads on their behalf based on the sales data.
In the cumulative Third Quarter period, Macro Kiosk Berhad’s revenue grew 15.6% YoY. The EMS business wasaffected from the deceleration trend in Malaysia where the company is headquartered, and due to seasonality
effects in the emerging markets of Vietnam etc., despite the continued efforts to expand further in these priority
markets. As a result, the EMS business revenue grew 19.2% YoY in the cumulative Third Quarter, which was alower growth rate than the 22.4% YoY growth achieved in the Second Quarter. The MPS business revenue wasadversely affected from changing business environment, declining 12.2% YoY in the cumulative Third Quarter.
Segment operating profit recorded a loss from strategic upfront investments to establish the business’
foundations in these emerging markets and from foreign currency loss arising from transactions between
subsidiaries.
Online advertising service revenue increased 1.1% YoY to reach ¥226 mil. posting a growth despite theslowdown of ad placements in some of the services adversely affected by external factors.
As a result of the above, segment revenue was ¥4,349 mil. an increase of 12.3% YoY, and segment loss was¥51 mil. (previous Third Quarter was a profit of ¥106mil.).
(*) Note that the Customer Support Services has been renamed Online Advertising Service from the First
Quarter of fiscal 2019.
Please see below for the table of the major businesses and companies providing these businesses, by segment.
Segment

Major services

Major companies of each service

Payment processing service
Payment
Processing
Business(Online billing and recurring billing)

GMO Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)

Payment processing service
GMO Financial Gate, Inc. (consolidated subsidiary)(offline payment)
System development
GMO Payment after delivery

GMO Payment Gateway, Inc.
GMO Payment Service, Inc. (consolidated
subsidiary)
GMO Payment Gateway, Inc.

Remittance service
Money Service
Business

GMO Epsilon, Inc. (consolidated subsidiary)
GMO Payment Gateway, Inc.

Transaction lending

GMO Epsilon, Inc. (consolidated subsidiary)
GMO Payment Gateway, Inc.

Early payment service

Mobile payment, authentication
Payment

and notification

GMO Epsilon, Inc. (consolidated subsidiary)

Macro Kiosk Berhad (consolidated subsidiary)

Enhancement
Business

GMO Payment Gateway, Inc.
Online advertising service―7―

GMO Epsilon, Inc. (consolidated subsidiary)(2) Status of consolidated financial position①Assets, liabilities and net assets
a. Assets
Total assets at the end of the Third Quarter of this consolidated fiscal year under review was ¥126,948 mil, an
increase of ¥10,089 mil. from the end of the previous consolidated fiscal year. The increase in total assets ismainly due to an increase in advance payment of ¥6,549 mil. and an increase in accrued income of ¥4,845 mil.
As stated in “ ② Cash and cash equivalents” of (6) Notes regarding condensed consolidated financial
statements, the Group has ¥800 mil. in deposits to subsidiaries and affiliated companies included in the balanceof cash and cash equivalents at the end of the Third Quarter of this consolidated fiscal year. Together with the¥7,000 mil. of deposits to subsidiaries and affiliated companies stated in the condensed consolidated balance
sheet, the total balance of the Group’s deposits to subsidiaries and affiliated companies stands at ¥7,800 mil.
These deposits are the Group’s cash on hand that is deposited in the cash management system (CMS)
implemented and operated by GMO Internet. This allows the Group to withdraw necessary funds without having
to wait until the predetermined CMS repayment date, by registering a cash withdrawal request taking into
account the number of days prior to when cash is needed.
b. Liabilities
Balance of liabilities at the end of the Third Quarter of this consolidated fiscal year under review stood at¥100,275 mil., an increase of ¥9,436 mil. from the end of the previous consolidated fiscal year, mainly due to anincrease in borrowings of ¥2,798 mil. and deposits received of ¥6,481 mil.
c. Equity
Equity balance at the end of the Third quarter of this consolidated fiscal year under review was ¥26,673 mil., anincrease of ¥653 mil. from the end of the previous consolidated fiscal year. Factors such as dividend paid out ofretained earnings of ¥2,136 mil., share buybacks of ¥689 and other comprehensive income of ¥626 mil.,reduced the Equity balance, while profits of ¥4,214 mil. increased the Equity balance.
② Status of consolidated cash flows
Cash and cash equivalents (hereinafter called “funds”) decreased by ¥2,629 mil. from the balance at the start of
the term to ¥39,403 mil. The cash flows by activity over the cumulative nine months under review is discussed
below.
a. Cash flow from operating activities
Net funds used by operating activities in the cumulative Third Quarter of this consolidated fiscal year underreview amounted to ¥1,886 mil., which compares to ¥3,091 mil. in funds provided during the same period of theprevious year. This mainly resulted from cash inflows of (i) pretax profit of ¥6,582 mil., (ii) depreciation andamortization of ¥810 mil., (iii) decrease in trade receivables of ¥1,046 mil., (iv) increase in deposits received of¥6,481 mil., that were netted out against cash outflows of (i) increase in advances paid of ¥6,549 mil., (ii)increase in accrued revenues of ¥4,845 mil., and (iii) security deposits paid of ¥3,119 mil. and, (iv) net amountof corporate tax payments and refunds of ¥2,735 mil.
b. Cash flow from investing activities
Net funds used by investing activities over the cumulative Third Quarter of this consolidated fiscal year underreview totaled ¥533 mil., which compares to a net fund usage of ¥7,391 mil. in the same period of the previous
year. This is mainly due to cash inflow from repayments for time deposits of ¥689 mil., which was netted against
cash outflows of (i) acquisition of intangible assets ¥913 mil., and (ii) acquisition on investment securities ¥204
mil.

―8―

c. Cash flow from financing activities
Net funds used by financing activities over the cumulative Third Quarter of this consolidated fiscal year underreview was a ¥103 mil., which compares to the provision of ¥17,261 mil. in the same period of the previous year.
This is due to cash inflow from the net increase in short term borrowings of ¥3,399 mil., which was netted
against the cash outflows of (i) repayment of long term borrowings of ¥600mil., (ii) share buybacks of ¥689 mil.,and dividend payout of ¥2,133 mil.

(3) Review of consolidated earnings forecasts and other forecasts
The Group’s core business is positioned within the EC market in Japan, and Japan’s B2C EC for merchandizing
continues to grow very rapidly, helped by favorable externalities such as high penetration of smartphone and reforms
in the logistic/distribution industry. At the same time, the scope of the EC market is also expanding, driven by thedigital/online migration occurring in the B2B and C2C fields.
For the fiscal year ending September 2019, the Group forecasts across-the-board growth of all segments of Payment
Processing Business, Money Service Business and Payment Enhancement Business, through acquisition of largescale and high-growth merchants and financial institutions and the expansion of GMO Payment After Delivery.
The earnings forecast for consolidated fiscal year ending September 30, 2019 are as follows: revenue of ¥31,850 mil.
(up 20.6% YoY), operating profit ¥8,300 mil. (up 26.7% YoY), profit before tax ¥8,108 mil. (up 21.0% YoY), profit¥5,206 mil. (up 22.6% YoY), and profit attributable to owners of parent company ¥5,106 mil. (up 20.0% YoY).

―9―

2. Condensed Consolidated Financial Statements and Major Notes(1) Condensed consolidated balance sheet

Notes

End of previous consolidated
fiscal year
(September 30, 2018)(Unit: Thousand Yen)
End of Q3 of current
consolidated fiscal year
(June 30, 2019)

AssetsCurrent assets
Cash and cash equivalents②

42,033,124

39,403,656

Operating and other receivables③,⑤

13,236,930

12,114,478

Advances paid

22,267,745

28,817,543

Accrued revenue

15,717,965

20,563,927

64,537

146,290

7,000,000

7,000,000

706,745

104,483

Inventories
Deposits to subsidiaries and affiliates④

Other financial assets
Other current assets

1,205,270

1,002,261

Total current assets

102,232,318

109,152,640

450,918

592,506

4,934,688

5,144,549

2,938,426

2,739,656

Noncurrent assets
Tangible assets
Goodwill and other intangible assets
Investments accounted using equity
methodOther financial assets

5,444,421

8,006,639

Deferred tax assets

833,886

1,223,373

Other noncurrent assets

24,29788,855

Total noncurrent assets

14,626,639

17,795,581

116,858,957

126,948,222

Total assets―10―NotesEnd of previous consolidated
fiscal year
(September 30, 2018)(Unit: Thousand Yen)
End of Q3 of current
consolidated fiscal year
(June 30, 2019)

Liabilities and equity
Liabilities
Current liabilities
Operating and other payables

4,663,264

4,624,921

Accrued expenses⑤

15,740,072

16,285,233

Deposits received⑤

41,228,933

47,710,562

4,101,400

7,500,400

98,852

108,077

1,530,203

1,017,264

7,388

363,069

Borrowings
Other financial liabilities
Income taxes payable, etc.
Provisions
Other current liabilities

2,030,282

1,718,044

69,400,397

79,327,573

Corporate bonds

16,676,929

16,728,421

Borrowings

2,199,100

1,598,800

Other financial liabilities

185,223

248,866

Provision

64,05564,055

Deferred tax liabilities

205,749

163,470

Other noncurrent liabilities

2,107,484

2,144,001

Total noncurrent liabilities

21,438,542

20,947,615

90,838,939

100,275,189

Capital stock

4,712,900

4,712,900

Capital surplus

5,758,448

5,824,467

Retained earnings

12,875,446

14,797,908

Treasury stock△491,893△1,181,846

Other items of equity
Total equity attributable to owners ofparentMinority interests

1,941,305

1,309,169

24,796,206

25,462,599

1,223,811

1,210,434

Total equity

26,020,018

26,673,033

116,858,957

126,948,222

Total current liabilities
Noncurrent liabilities

Total liabilities
EquityTotal liabilities and equity―11―(2) Condensed consolidated statement of income and consolidated statement of comprehensive income
Condensed consolidated statement of income
First nine months of previous
consolidated fiscal year
(From October 1, 2017
to June 30, 2018)19,122,148(Unit: Thousand yen)First nine months of current
consolidated fiscal year
(From October 1, 2018
to June 30, 2019)
23,961,206

Cost of revenue△6,498,893△8,630,184

Gross profit

12,623,254

15,331,021

148,539

102,128△7,472,840△8,537,413△108,153△135,697

5,190,799

6,760,039

Notes
Revenue⑥

Other income
Selling, general and administrative
expenses
Other expense
Operating profit
Financial income

29,69538,052Financial expense△53,058△206,718

Equity method investment gains or loss

△125,882△9,266

Profit before income taxes

5,041,554

6,582,107△2,036,232△2,367,556

3,005,321

4,214,550

Owners of parent

3,016,049

4,252,580

Non-controlling interests△10,727△38,030

Profit3,005,321

4,214,550

Basic earnings per share (yen)

40.94

57.81

Diluted earnings per share (yen)

40.90

56.55

Income tax expenses
ProfitProfit attributable to:Earnings per share―12―Condensed consolidated statement of comprehensive income

Notes
ProfitFirst nine months of previous
consolidated fiscal year
(From October 1, 2017
to June 30, 2018)
3,005,321(Unit: Thousand yen)First nine months of current
consolidated fiscal year
(From October 1, 2018
to June 30, 2019)
4,214,550

2,034,931△476,673

72,076△49,001

2,107,008△525,675

58,301△34,598△57,284△66,589

1,016△101,187

2,108,024△626,862

5,113,346

3,587,687

5,106,897

3,621,452

Other comprehensive income
Items that will not be reclassified to profit
or loss
Fair value of financial assets measured
through other comprehensive income
Share of other comprehensive incomeof equity method affiliates
Total of Items that will not bereclassified to profit or loss
Items that will be reclassified to profit orloss
Exchange differences on translation offoreign operations
Share of other comprehensive incomeof equity method affiliates
Total of items that will be reclassified to
profit or loss
Other comprehensive income after income
taxes
Comprehensive income

Comprehensive income attributable to:
Owners of parent
Non-controlling interests
Total

―13―

6,448

△33,764

5,113,346

3,587,687

(3) Condensed consolidated statement of changes in equity
Cumulative nine months of the previous consolidated fiscal year (From October 1, 2017 to June 30, 2018)(Unit: Thousand yen)TotalequityOther
CapitalCapital Retained Treasury
attributabl Minority
Total
Notes
items ofstock
surplus earnings
stock
e to
interests
assetsequityowners ofparentBalance as of October 1,
4,712,900 4,985,781 9,619,266
613,768 19,675,447 1,093,870 20,769,318△256,2692017－－ 3,016,049－－ 3,016,049△10,727 3,005,321
ProfitOther comprehensive
17,176 2,108,024－－－－ 2,090,848 2,090,848
income6,448
5,113,346－－ 3,016,049－ 2,090,848 5,106,897
Comprehensive income
Sale of treasury stock－

Dividend
Issuance of convertible
bondsTransfer from othercomponents of equity toretained earnings
Changes in the interests
in controlled subsidiary
Share-based paymenttransaction
Total transactions withownersBalance as of June 30,
2018

－

－

14,157－ △1,485,920－－ △1,485,920－ △1,485,920

73,760－87,918－87,918－543,488－－－543,488－543,488－－756,842－△756,842

－

－

－

－

△30,707－－－△30,707－△30,707－

102,125

－

－

△125

102,000

18,570120,570－688,666△729,077

14,157△756,967△783,221

18,570△764,650

5,674,448 11,906,238△242,111

4,712,900

1,947,648 23,999,123

1,118,890 25,118,013

Cumulative nine months of the current consolidated fiscal year (From October 1, 2018 to June 30, 2019)(Unit: Thousand yen)TotalequityOther
CapitalCapital Retained Treasury
attributabl Minority
Notes
items of
Total assets
stock
surplus earnings
stock
e to
interests
equityowners ofparentBalance as of October 1,
4,712,900 5,758,448 12,875,446
1,223,811
26,020,018△491,893 1,941,305 24,796,206
2018
Cumulative effects of－－△195,085－－△195,085－△195,085
changes in accountingchanges
4,712,900 5,758,448 12,680,361
1,223,811
25,824,933△491,893 1,941,305 24,601,121
Restated Balance
ProfitOther Comprehensive
incomeComprehensive income
Purchase of treasury
stock
Dividends
Transfer from othercomponents of equity toretained earnings
Share-based paymenttransaction
Total transactions withownersBalance as of June 30,
2019

－

－

4,252,580－－

4,252,580△38,030

4,214,550

－

－

－

－

△631,128△631,128

4,266△626,862－－

4,252,580－△631,128

3,621,452△33,764

3,587,687－－－△689,952－△689,952－△689,952－－ △2,136,041－－ △2,136,041－△2,136,041

－

－

1,006

－

△1,006－－－－

66,019－－－66,01920,386

86,406－

66,019 △2,135,034△689,952△1,006 △2,759,974

20,386△2,739,587

5,824,467 14,797,908 △1,181,846

1,309,169 25,462,599

1,210,434

26,673,033

4,712,900―14―

(4) Condensed consolidated statement of cash flows
First nine months of previous
consolidated fiscal year
(From October 1, 2017
to June 30, 2018)(Unit: Thousand yen)First nine months of current
consolidated fiscal year
(From October 1, 2018
to June 30, 2019)

5,041,554

6,582,107

Depreciation & Amortization

703,480810,018

Financial income and expense

23,362

168,665

Equity method investment loss
Increase/decrease in inventories(△=increase)
Increase/decrease in operating andother receivables (△=increase)
In/Decrease in advances paid(△=increase)
Accrued revenues (△=increase)
In/Decrease in operating payables(△=decrease)
In/Decrease in accrued expenses(△=decrease)
In/Decrease in deposits received(△=decrease)
Other

125,882

9,266

50,628△81,753

878,479

1,046,826△5,731,882△6,549,797△3,097,280△4,845,962

849,339

48,651

3,676,787

528,574

3,758,069

6,481,777△162,958△229,794

6,115,464

3,968,578

9,025

38,052Notes
Net cash provided by (used in) operating
activities
Profit before income taxes

SubtotalInterest and dividends received
Interest paid

△29,211△38,360

Security Deposits paid

△30,000△3,119,940

Information security expenses paid

△67,041－

Income taxes paid/refunded
Net cash provided by (used in)operating activities
Net cash provided by (used in) investing
activities
Proceeds from withdrawal of time
Deposits
Purchase of property, plants andequipment
Purchase of intangible assets△2,906,751△2,735,313

3,091,485△1,886,982－

689,374△49,538△119,838△794,931△913,122

Purchase of investment securities
Proceeds from sales of investment
securities
Proceeds from Investment Partnership△302,001△204,318

757,416

41,04024,160110,805

Deposits paid to affiliated companies△7,000,000－

Acquisition of other financial assets
Proceeds from sales of other financial
assetsOthersNet cash provided by (used in)investing activities△7,923△92,167

1,071

8,077

△19,496△52,859△7,391,243△533,010―15―

First nine months of previous
consolidated fiscal year
(From October 1, 2017
to June 30, 2018)(Unit: Thousand yen)First nine months of current
consolidated fiscal year
(From October 1, 2018
to June 30, 2019)

Net cash provided by (used in) financing
activities
Increase and decrease of short-termborrowings
Repayment of long-term borrowings

2,000,000

3,399,000△621,101△600,300

Proceeds from corporate bond issue

17,457,920－－△689,952△1,482,594△2,133,724△93,186△78,135

17,261,037△103,111

3,546△106,362

12,964,825△2,629,467②

27,533,515

42,033,124②

40,498,341

39,403,656

Notes

Purchase of treasury stock
Dividends paid
Other
Net cash provided by (used in)financing activities
Effect of exchange rate changes on cash
and cash equivalents
Increase and decrease in cash and cash
equivalents (△=decrease)
Balance of cash and cash equivalents atthe beginning of the period
Cash and cash equivalents at the end of
period―16―

(5) Notes regarding the going concern assumptions
N/A

―17―

(6) Notes regarding condensed consolidated financial statements② Cash and cash equivalents
Breakdown of cash and cash equivalents are as follows.
End of previous consolidated
fiscal year
(September 30, 2018)(Unit: Thousand yen)
End of Q3 of current
consolidated fiscal year
(June 30, 2019)

Cash and cash equivalents

37,033,124

38,603,656

Deposits to subsidiaries
and affiliates

5,000,000

800,000

42,033,124

39,403,656

Total
③

Operating and other receivables
Breakdown of operating and other receivables are as follows.
End of previous consolidated
fiscal year
(September 30, 2018)(Unit: Thousand yen)
End of Q3 of current
consolidated fiscal year
(June 30, 2019)

Accounts receivable-trade7,262,587

5,313,675

Operating loans

6,063,545

6,553,475

14,613

348,098△103,815△100,771

13,236,930

12,114,478

Other
Allowanceaccounts

fordoubtful

Total④

Deposits to subsidiaries and affiliates
Our deposits to subsidiaries and affiliates are the deposits made under the CMS scheme of the GMO Internet Group.

―18―

⑤

Treatment of Financial Assets and Liabilities
The Group has the legally enforceable right over some of its financial assets and liabilities to recognize the value ofthe assets and liabilities as a net amount, or to offset the financial assets and liabilities when the transaction ofrealization of the asset and settlement of liabilities is structured and intended to occur simultaneously. For thesereasons, the net amount of the financial assets and liabilities is recognized in the condensed financial statements.
The following table shows the amount used to deduct (offset) the financial assets and liabilities for the same trade
partner.
As of the Third Quarter of consolidated fiscal year (June 30, 2019)
Amount deducted (netted)
in the Condensed Financial
Statement

Gross Amount of
Financial Assets(Unit: Thousand yen)
Net amount shown inCondensed Financial
Statement

Financial Asset
OperatingReceivables

and

Other

Total

4,619,993△2,730,943

1,889,049

4,619,993△2,730,943

1,889,049

Amount deducted (netted)
in the Condensed Financial
Statement

Gross Amount of
Financial Liabilities(Unit: Thousand yen)
Net amount shown inCondensed Financial
Statement

Financial Asset
Accrued Expenses

16,085,495△638,676

15,446,819

Deposits Received

44,128,138△2,092,267

42,035,870

60,213,633△2,730,943

57,482,690

Total

⑦

Important events after the reporting period
The Board has voted on the borrowing of funds on June 17th, 2019, as follows:a.

Reason for the Borrowing
The loan will be provided for the working capital arising from new transactions with a large-scale merchant.

b.

Outline of Borrowing(ⅰ) Lenders

Syndicate of three financial institutions(ⅱ) Borrowing Amount(ⅲ) Interest Rate

¥8,000 mil.
Market-linked variable interest rate(ⅳ) Commencement Date

July 1st 2019 to July 2nd, 2019(ⅴ) Repayment Period

Within one year (*1)(ⅵ) Collateral(*1)

Unsecured and non-guaranteed

The repayment period will be extended unless explicitly stated otherwise by the borrower and/or the bank.

―19―