BRIEF STATEMENT OF CONSOLIDATED FINANCIAL RESULTS
FOR THE FULL FISCAL YEAR ENDED MARCH 2019
This is an English translation of summarized consolidated financial results prepared
for the convenience of non-resident shareholders. Should there be any inconsistency
between the translation and the official Japanese text, the latter shall prevail.

May 14, 2019
Faith, Inc. (Stock code 4295, Listed on TSE 1st section)
Representative:
Hajime Hirasawa, CEO/President
Contact:
Jiro Saeki, CFO/Director
Date of General Meeting of Shareholders:Date of Submission of Annual Security Report:
Starting Date of the Dividend Payment:
Preparation of Supplementary Materials for Financial Results:
Information Meeting for Financial Results to be Held:(for Institutional Investors and Analysts)

URL http://www.faith.co.jp/)
Tel: +81-03-5464-7633
June 27, 2019
June 28, 2019
June 28, 2019
Applicable/May 29, 2019
Applicable/May 29, 2019
Amounts are rounded down to the nearest JPY 1 million.

1. Results for the Fiscal Year Ending March 2019 (From April 1, 2018 to March 31, 2019)(1) Consolidated Operating Results(Percentages indicate changes compared with the previous fiscal year.)

Net SalesYear ending
March 2019
March 2018
(Note)

Millions of yen

20,96521,210Operating Income

%
△1.2
2.0

Ordinary Income

%
△87.2
△35.7

Millions of yen

144
1,130

Millions of yen

△586
1,029

Net Income

%
－
△33.1

%
－
△11.8

Millions of yen

△309
504

Comprehensive income: fiscal year ending March 2019: △314 million (—%); fiscal year ending March 2018: 696 million (△49.0%)

Net Income per
Share

Year ending
March 2019
March 2018

Diluted Net
Income per Share

Return on Equity
CapitalOrdinary Incomeon Total Assets

Operating Income
on Net Sales

Yen
—
—

%
△1.7
2.9

%
△2.3
3.9

%
0.7
5.3

Yen
△23.15
40.48(Reference) Equity in earnings of associated companies: fiscal year ending March 2019: △¥704 million;
fiscal year ending March 2018: △¥99 million(2) Consolidated Financial Position
Total Assets

Year ending
March 2019
March 2018

Net Assets

Millions of yen

Millions of yen

24,34325,705

17,52018,671

Ratio of Equity Capital

Net Assets per Share

%
72.0
72.5

Yen
1,321.37
1,355.11(Reference) Equity capital: fiscal year ending March 2019: ¥17,520 million; fiscal year ending March 2018: ¥18,647 million(3) Consolidated Cash Flow Results
Cash
Flow
from
Operating Activities

Year ending
March 2019
March 2018

Cash Flow from
Investing Activities

Cash
Flow
from
Financing Activities

Cash and Cash
Equivalents at Year End

Millions of yen

Millions of yen

Millions of yen

Millions of yen

454
809

△187
△1,070△1,077△597

12,10012,9102. Dividends
Dividends per Share
(Record dates)

1 st Qｔｒ

Year ending
March 2018
March 2019
March 2020
(forecast)

Yen

Interi
m
Yen

—
—
—

5.00
5.00
5.00

3 rd Qtr

Year-end

TTL(Annual)

Total Dividend
Payment

Yen

Yen

Yen

Millions of yen

—
—
—

5.00
5.00
5.00

10,00
10.00
10.00

Payout Ratio

Dividend on Net
Assets(Consolidated)(Annual)(Consolidated)

%
24.7
—
66.3

137
132

%
0.7
0.7

3. Forecast for the Consolidated Results for the Year Ending March 2020 （from Apr. 1, 2019 to Mar. 31, 2020）(Percentages indicate changes compared with the previous fiscal year and the previous interim result.)
Net Income Attr to the
Net Income
Net Sales
Operating Income
Ordinary Income
Shs of the Parent Co
per Share
Millions ofMillions
Millions
Millions
%
%
%
%
Yen
yen
of yenof yenof yenFirst
half(cumulative)
Full year

10,100

△4.7

100

△54.3

20

△89.7

－

－

－

20,000

△4.6

300

107.9

300

－

200

－

15.08

1

※ Notes(1) Changes in significant subsidiaries (accompanying changes in scope of consolidation): None
Newly added subsidiaries: 0 companies (subsidiary’s name:)Removed subsidiaries: 0 companies (subsidiary’s name:)(2) Changes in accounting policy, changes in accounting estimates, and restatements(2)-1. Changes accompanying revisions of accounting standards, etc.: None(2)-2. Changes other than the above: None(2)-3. Changes in accounting estimates: None(2)-4. Restatements: None
(3) Outstanding shares (common shares)(3)-1. Outstanding shares at the end of the fiscal years (including treasury stock):
The fiscal year ending March 2019: 13,831,091 shares
The fiscal year ending March 2018: 13,831,091 shares(3)-2. Treasury stock at the end of the fiscal year:
The fiscal year ending March 2019: 572,000 shares
The fiscal year ending March 2018: 70,041 shares(3)-3. Average number of shares during the accounting period
The fiscal year ending March 2019: 13,353,334 shares
The fiscal year ending March 2018: 12,464,649 shares

2

(Reference) Overview of Non-Consolidated Results
Results for the Fiscal Year Ending March 2019 (From April 1, 2018 to March 31, 2019)(1) Non-Consolidated Operating Results(Percentages indicate changes compared with the previous fiscal year.)

Net Sales

Operating Income

Year ending
March 2019

Millions of yen

2,192

△6.2

March 2018

2,338

△17.0

%

Millions of yen

Millions of yen

△239
△97

Net Income per ShareYear ending
March 2019
March 2018

Ordinary Income%

Net Income%

Millions of yen

%

－

504

－

328

－

－

△111

－

△568

－

Diluted Net Income per
Share

Yen
24.57
△45.59Yen——(2) Non-Consolidated Financial Position
Total Assets

Year ending
March 2019
March 2018
(Reference)

Net Assets

Ratio of Equity
CapitalNet Assets per Share

Millions of yen

Millions of yen%

Yen

18,59619,153

17,87018,33796.1
95.7

1,347.80
1,332.58

Equity capital: fiscal year ending March 2019: ¥17,870 million; fiscal year ending March 2018: ¥18,337 million* This financial results report is exempt from quarterly review procedures.
* Statement regarding the proper use of financial forecasts and other special remarks(Notice regarding statements concerning the future)
Statements concerning the future, such as performance forecasts, etc., described in the present material are based on
information currently available to the Company and on certain assumptions judged as reasonable by the Company. The
Company’s actual performance may differ substantially from these forecasts as a result of various factors beyond theCompany’s control. For details of cautions, etc., employed in making performance forecasts and the assumptions underlying
performance forecasts, please refer to “1. Overview of Operating Results, etc., (4) Future Outlook” on page 4 of theaccompanying material.
(To obtain supplemental documents relating to financial results)
Supplemental Materials for Financial Results are posted on the company website on May 29, 2019.

3

Accompanying Material Contents
1. Overview of Operating Results, etc.……………………………………………………………………2(1) Overview of Operating Results for the Current Term…………………………………………… 2(2) Overview of Financial Position for the Current Term …………………………………………… 4(3) Overview of Cash Flow for the Current Term …………………………………………………… 4(4) Future Outlook…………………………………………………………………………………… 5(5) Basic Policy on Profit Allocation and Current Term/Next Term Dividend Distribution………… 5
2. Basic Philosophy on Selection of Accounting Standards………………………………………………5
3. Consolidated Financial Statements and Main Explanatory Notes…………………………………… 6(1) Consolidated Balance Sheet…………………………………………………………………....… 6(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income …… 8
(Consolidated Statement of Income) …………………………………………………………… 8(Consolidated Statement of Comprehensive Income) …………………………………………… 9(3) Consolidated Statement of Changes in Shareholders’ Equity……………………………………10(4) Consolidated Statement of Cash Flows………………………………………………………… 12(5) Notes Concerning the Consolidated Financial Statements……………………………………… 14(Notes Concerning the Premise of a Going Concern)…………………………………………… 14(Segment Information, etc.) …………………………………………………………………… 14(Per Share Information)………………………………………………………………………… 17

1

1. Overview of Operating Results, etc(1) Overview of Operating Results for the Current Term
In the Japanese information and communications field, the internet penetration rate among individuals
has remained at a high level exceeding 80%, and internet users aged between 13 and 60 years old
account for over 90% of the total (*1). Among these users, the number of people who rely exclusively ona smartphone to access the Internet has increased for all age groups, and this trend is particularly
pronounced among those in their 30s, where the rate of increase in 2018 compared with the previous
year was 46% (*2). Meanwhile, the movement away from television centered on the young generation isprogressing, with average viewing hours on both weekdays and holidays displaying a decreasing trend(*3). The ongoing transition to services in line with the digital era is expected to accelerate in future as
the Internet usage rate climbs further and the use of smartphones continues to spread. Under thesecircumstances, it is becoming even more important for Faith to respond swiftly to user needs that are in
keeping with the times.
*1. Source: Ministry of Internal Affairs and Communications ,2018 White Paper on Information and Communications in Japan*2. Source: Nielsen Digital Co., Ltd. , Nielsen Digital Database 2018
*3. Source: Ministry of Internal Affairs and Communications,2017 Survey Report on Usage Time and Information Behavior Regarding Information Communication Media

Also, in the entertainment market, sales in the global music market centered on streaming services grewby 10% year on year to US$19 billion (*4), increasing for the fourth consecutive year and recording its
highest annual sales growth since 1996. In Japan as well, the production value of music software
including music videos increased by 4% from the previous year to 240.3 billion yen (*5), with sales
increasing for the first time in three years. Although sales of packaged products continued to decline,
fee-based music distribution sales increased by 13% year on year to ¥64.5 billion with sales of
streaming services leaping by 33% year on year to exceed download sales for the first time. Meanwhile,the size of the live entertainment market increased by 4% from the previous year to ¥344.8 billion,
thanks to an expansion of consumption (*6).
*4. Source: IFPI Global Music Report 2019
*5. Source: Recording Industry Association of Japan (RIAJ),
The Recording Industry in Japan 2018
*6. Source: All Japan Concert & Live Entertainment Promo ters Conference (ACPC),
2018 Basic Research Report

Founded in 1992, Faith was the first company in the world to commercialize ringtones, and has steadilygrown centered on the music distribution business and in step with the spread of mobile phones.
However, in recent years, amid the growing popularity of smartphones in the music market, streaming
media, user upload content (UUC) that allows general users to easily transmit information to society,and media diversification such as social media, etc., all kinds of activities in the music industry havebeen changing, including musical styles and content production methods.
In the current environment, the Faith Group is continuing to utilize the results of the efforts it has beenpouring into digital content distribution ever since its establishment, and is forging ahead with its
Multi-Content and Multi-Device Strategy of creating environments in which people can enjoy a wide
diversity of contents whenever and wherever they choose. We are also strengthening the developmentof new services in response to the changing market environment, which includes platforms that collectand organize the information flooding the Internet and then providing this to users after increasing its
added value.
In addition, in response to the steady increase in the number of tourists visiting Japan, in anticipation of
the expansion of the Japanese nighttime economy, Faith opened Tokyo's largest music lounge
PLUSTOKYO in Ginza in November 2018, with the aim of proposing a new lifestyle as a space thatcombines art, food and entertainment elements centered on music.
Regarding the Faith Group’s performance during the consolidated fiscal year ending March 2019, in
accordance with the decline in sales of existing distribution services, which account for a major share ofoverall sales, net sales decreased by 1.2% compared with the previous fiscal year to ¥20,965 million.
Meanwhile, due mainly to declining sales of high-margin products launched in previous years and game
titles in the Label Business and to a decline in income from music licensing rights, operating income
decreased by 87.2% year on year to ¥144 million. In addition, following the recording of a loss on2

equity method investment, the Company recorded an ordinary loss of 586 million yen (compared withan ordinary income of ¥1,029 million for the previous fiscal year), and a net loss attributable to theparent company's shareholders of 309 million yen (compared with a net income attributable to parent
company shareholders of 504 million yen for the previous fiscal year).
Information on each business segment is as follows.
Content BusinessIn the Content Business, while sales in the existing distribution business continue to decline, the FaithGroup is actively promoting business development in Asian countries and other countries where highgrowth rates are expected. In addition, we are interlinking and platforming various services in an effort
to develop new products and services and grasp diversified revenue opportunities, and we will continue
to invest in growth areas in future.
We are actively developing FaRao PRO not only as a service providing business BGM but also for sales
activities focused on expanding the functions necessary for store management, such as solutions andannouncement functions that make store-branding proposals. In addition to conventional products using
tablet devices, we have also released an app-version service that offers users reduced initial costs and
we are working to strengthen retail store sales through collaboration with the Point Service Business.
Moreover, based on our Japanese service, we have started FaRao PRO services in Indonesia, and for the
future we are aiming to create and activate new BGM markets both in Japan and overseas.
In Fans’, our platform of services for artists based on the D2C (*7) business model, which is expected to
expand in future, we are enhancing the functions essential to artists’ musical activities such as official
website construction, music and video distribution, sales of artist goods, and fan club operation. We areaiming to acquire new users and expand the membership base of Fans’ as a service that allows moreartists to disseminate their works and information freely, and we will endeavor to improve the quality ofthe service by pursuing enhanced usability.
*7. Abbreviation of “Direct to Consumer”—a business model for delivering
services and products planned and manufactured by Faith directly to users

Regarding the performance of this segment, taking into account decreasing sales of carrier official site
services, delays in the launch of new businesses and the sale of shares in consolidated subsidiaries, anddespite the ongoing positive deployment of new services in line with the changing market environment,
the Content Business recorded net sales of ¥3,512 million (a decrease of 19.5% year on year) and an
operating loss of ¥605 million (compared with an operating loss of ¥194 million for the previous fiscal
year).
Point Service BusinessIn the Point Service Business, in addition to providing point issue services to retail stores, we offer total
support for point issue data acquisition, analysis and sales promotion utilization as a series of cycles
from planning to operation, and we provide outsourcing services that maximize retail sales promotion
efficiency.
Regarding the performance of this segment, with the issue of points at existing member storesremaining steady due to the development of sales promotion measures, net sales increased by 4.7%
compared with the previous fiscal year to ¥2,683 million and operating income increased by 28.8% year
on year to ¥114 million.
Label Business
Amid the severe environment facing the music and video-related industry in line with the continuing
shrinkage of the music market, the Label Business is proceeding with its strategy of strengthening new
future-oriented businesses in order to overcome the present situation in which it remains dependent onsales of package products for which the market remains sluggish. In order to continue to play a majorrole in the music industry and expand its revenue, in addition to pursuing the creation of hit products,
artist management, and investment in the live performance business, we consider it necessary to
introduce new services that anticipate the ever-changing market environment.
This segment achieved strong sales revenue from animation-related titles released by DREAMUSIC Inc,
3

and from animation titles and live artist performances by Nippon Columbia, Co., Ltd., resulting in a risein overall Label Business sales of 3.4% year on year to ¥14,769 million. However, due mainly todeclines in sales of high-margin products launched in previous years, game titles, and revenue fromsales of music licensing rights, this segment recorded an operating income of ¥631 million, a decline of
48.8% compared with the previous fiscal year.
We recognize that we need ample funds in order to make strategic and flexible investments in theentertainment industry, but taking into consideration the current business environment, with regard tobusiness development, scale of investment, and timing, the company intends to flexibly put into practicethe following business strategies in a timely manner.
● Platform development such as cloud casting, matching business, and D2C business.
● Business related to live performances, concerts, and nighttime economy activation● Investment for IP creation and acquisition● Research and development on new technology such as investment in new start-up companies anddistributed ledger technology*Product and service names appearing in this document are trademarks or registered trademarks of Faith , Inc. either in Japan or in othercountries.

(2) Overview of Financial Position for the Current Term
Total assets as of the end of the consolidated fiscal year ended March 31, 2019 decreased by ¥1,362
million from the end of the previous consolidated fiscal year to ¥24,343 million. This result was mainly
attributable to a decrease of ¥1,309 million in cash and deposits, an increase of ¥416 million inbuildings and structures, a decrease of ¥660 million in investment securities, and an increase of ¥280
million in deferred tax assets.
Total liabilities decreased by ¥210 million compared with the end of the previous consolidated fiscal
year to ¥6,822 million. This result was mainly attributable to a decrease of ¥174 million in long-term
debt.
Net assets decreased by ¥1,151 million compared with the end of the previous consolidated fiscal yearto ¥17,520 million. This result was mainly attributable to outgoings of ¥702 million for acquisition oftreasury stock and ¥134 million for payment of dividends, and to a net loss of ¥333 million attributable
to shareholders of the parent company. Moreover, the equity ratio became 72.0%.

(3) Overview of Cash Flow for the Current Term
Cash and cash equivalents at the end of the consolidated fiscal year ended March 31, 2019 decreased by¥809 million to ¥12,100 million, a decrease of 6.3% compared with the end of the previous consolidated
fiscal year.
Details of cash flow during the fiscal year under review and its main contributory factors were as
follows:(Cash flow from operating activities)
Cash flow from operating activities amounted to an inflow of ¥454 million (a decrease of 43.9%
compared with the previous consolidated fiscal year), attributable mainly to a loss before income taxes
and minority interests of ¥393 million, amortization of goodwill of ¥106 million, depreciation expensesof ¥304 million, losses on equity method investment of ¥704 million, a decrease in inventory of ¥122
million, and income tax and other payments of ¥314 million.
(Cash flow from investing activities)
Cash flow from investing activities amounted to an outflow of ¥187 million (compared with an outflow
of ¥1,070 million for the previous consolidated fiscal year), attributable mainly to income of ¥550
million from the withdrawal of existing term deposits, expenditure of ¥633 million in respect of theacquisition of tangible fixed assets, expenditure of ¥165 million for the acquisition of investment
securities, income of ¥179 million from the sale of shares of subsidiaries accompanying changes in thescope of consolidation, and ¥120 million in respect of security deposit payments.
4

(Cash flow from financing activities)
Cash flow from financing activities amounted to an outflow of ¥1,077 million (compared with an
outflow of ¥597 million for the previous consolidated fiscal year), due mainly to ¥240 million in
expenditure in respect of repayment of long-term loans, ¥702 million in respect of the purchase oftreasury stock, and ¥134 million in respect of dividend payments, etc.

(4) Future Outlook
The Faith Group’s business performance forecasts for next consolidated fiscal year (FY 2019; ending
March 31, 2020) are as follows. Due to uncertainty regarding the Label Business, the impact of new
businesses in the Content Business, etc, .the Group is currently forecasting net sales of ¥20,000 million,
an operating income of ¥300 million, an ordinary income of ¥300 million, and a net income attributable
to the shareholders of the parent company of ¥200 million.
(5) Basic Policy on Profit Allocation and Current Term/Next Term Dividend Distribution
The Company continues its policy of giving priority to securing the funds necessary for strengthening
its business structure and making aggressive business investments. At the same time, it also recognizes
return of profit to shareholders to be an important management issue. For this reason, the Company willconsider payment of dividends, taking into account its operating results and financial position. Based on
its fundamental policy of paying continued stable dividends, the Company plans to pay a dividend of¥10 per share (including an interim dividend of ¥5) in the next fiscal year.

2. Basic Philosophy on Selection of Accounting Standards
For the present, the Faith Group is following a policy of producing its consolidated financial statements
under Japanese standards in the interest of maintaining comparability between the financial statementsof its constituent companies. Furthermore, concerning the future application of the International
Financial Reporting Standards (IFRS), we intend to respond appropriately based on the movements ofother companies, etc.

5

3. Consolidated Financial Statements and Main Explanatory Notes(1) Consolidated Balance Sheet(Unit: thousands of yen)

(Assets)
Current assets
Cash and deposits
Accounts and notes receivable
Marketable securities
Commercial products
Products in progress
Primary materials and inventory goods
Corporation tax refunds receivable, etc.
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures
Accumulated depreciation
Buildings and structures (net base)Machinery and delivery equipment
Accumulated depreciation
Machinery and delivery equipment (net base)Tools, devices and equipment
Accumulated depreciation
Tools, devices and equipment (net base)
Land
Lease assets
Accumulated depreciation
Lease assets (net base)Construction in progress
Total tangible fixed assets
Intangible fixed assets
Software
Goodwill
Other intangible fixed assets
Total intangible fixed assets
Investment and other assets
Investment securities
Deferred tax assets
Other investment and other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

6

FY 2017(As of March 31, 2018)

FY 2018(As of March 31, 2019)13,460,309
2,162,275
229,555
516,373493,508
65,12426,944
464,629△27,249
17,391,471

12,150,463
2,063,965
232,066
484,367
394,308
61,544
212,102534,205△19,401
16,113,621

2,044,824△932,609
1,112,214
626,278△605,840
20,4381,073,360△943,788
129,572
1,501,684
60,354△58,4281,926
7,800
2,773,635

2,525,299△996,463
1,528,836
615,252△595,720
19,531
1,212,819△1,006,064
206,754
1,501,684
38,823△37,828995－
3,257,801

365,435
1,648,115
312,9122,326,463

350,763
1,541,584
205,871
2,098,219

2,617,499
174,258
812,042△389,935
3,213,864
8,313,963
25,705,435

1,957,225
454,354942,793△480,799
2,873,573
8,229,594
24,343,216

(Unit: thousands of yen)

(Liabilities)
Current liabilities
Accounts and notes payable
Short-term loans payable
Lease obligations
Accounts payable-otherAccrued expenses payable
Income taxes payable
Reserve for bonuses
Reserve for point card certificates
Reserve for sales returns
Other current liabilities
Total current liabilities
Fixed liabilities
Long-term loans payable
Net defined retirement liabilities
Lease obligations
Deferred tax liabilities
Other fixed liabilities
Total fixed liabilities
Total liabilities(Net assets)
Shareholder's equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholder's equity
Other accumulated comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Cumulative adjustment amount for retirement benefit
obligations
Total other accumulated comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

7

FY 2017(As of March 31, 2018)

FY 2018(As of March 31, 2019)929,526
576,039723
1,001,461
2,642,245
188,625
76,316
8,711
74,962489,836
5,988,449

905,762
509,950662
775,600
2,749,170
116,814
79,633374
62,356
740,830
5,941,156

237,215603,262723
159,31744,7581,045,276
7,033,725

63,000632,53860
139,595
46,577881,771
6,822,927

3,218,000
3,019,205
12,316,449△100,158
18,453,496

3,218,000
3,019,175
11,872,088△802,315
17,306,948

263,254△12,505

307,035△10,936△56,561△82,758

194,187
24,026
18,671,710
25,705,435

213,340－
17,520,288
24,343,216

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)(Unit: thousands of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Interest on securities
Gain on valuation of investment securities
Gain on investment partnership management
Miscellaneous receipts
Total non-operating Income
Non-operating expenses
Interest paid
Gain on foreign exchange loss
Loss on equity method investment
Loss on investment partnership management
Cost of exchange from business combination
Miscellaneous expenses
Total non-operating expenses
Ordinary income or ordinary loss (△ = loss)
Extraordinary income
Gain on sale of shares of affiliates
Gain on sale of investment securities
Gain on change in equity
Gain on reversal of stock acquisition rights
Other extraordinary income
Total extraordinary income
Extraordinary losses
Loss on disposal of fixed assets
Loss on valuation of investment securities
Impairment loss on goodwill
Impairment loss
Other extraordinary losses
Total extraordinary losses
Current term net income or net loss before taxes (△ =net loss)
Corporate, local, and business taxes
Income taxes - deferred
Total corporate, local, and business taxes
Current term net income net income or net loss (△ = net
loss)
Current term net income or net loss attributable tonon-controlling interests (△ = net loss)
Current term net income or net loss attributable toshareholders of the parent company (△ = net loss)

8

FY 2017(April 1, 2017 ~March 31, 2018)
21,210,070
13,212,739
7,997,331
6,866,577
1,130,753

FY 2018(April 1, 2018 ~March 31, 2019)
20,965,356
13,736,658
7,228,697
7,084,406
144,290

1,406
5,253
60
－
26,48731,19564,404

1,183
4,497
133
2,135
22,771
28,13658,8598,437
423
99,127－50,852
6,382
165,224
1,029,933

6,201
209
704,51074,495－
4,724
790,140△586,991－
116,982
7,476
15,691
18,297
158,447

164,963
69,052－－
4,768
238,784

22,764－84,283
145,164
7,313
259,526

29,29915,000－－912
45,212928,854△393,418

292,448△81,130
211,317258,667△318,802△60,134

717,536△333,284

212,997△24,026

504,538△309,257

(Consolidated Statement of Comprehensive Income)(Unit: thousands of yen)

Current term net income net income or net loss (△ = net
loss)
Other comprehensive income
Valuation difference on other available-for-salesecurities
Foreign currency translation adjustments
Retirement benefit adjustments
Total other comprehensive income
Comprehensive income(Details)
Comprehensive income attributable to shareholders of
the parent company
Comprehensive income attributable to non-controllinginterests

9

FY 2017(April 1, 2017 ~March 31, 2018)717,536

FY 2018(April 1, 2018 ~March 31, 2019)△333,284△6,07843,780△986△13,658△20,722
696,813

1,569△26,197
19,153△314,131

483,281△290,104

213,531△24,026

(3) Consolidated Statement of Changes in Shareholders’ Equity
FY 2017 (April 1, 2017 ~ March 31, 2018)(Unit: thousands of yen)
Shareholders' equity
Capital stock Capital surplus
Balance at beginning of period

3,218,000

3,705,680

Retainedearnings

Treasury stock

Total
shareholders’equity11,953,901△3,039,450

15,838,131

Changes of items during theaccounting period
Dividends paid

△118,161

Increase through share exchange△118,161
2,948,339△735,351

Changes in parent company equity
regarding transactions with
non-controlling interests
Changes in the scope of applicationof the equity method
Net gain or net loss (△ ) attributable
to shareholders of parent company

48,876

48,876△23,830△23,830

504,538

504,538

Acquisition of treasury stock△9,209△9,209161

161

Disposal of treasury stock
Changes in non-equity items during
the accounting period (net amount)
Total changes during the accounting
periodBalance at end of period

2,212,988－△686,474

362,547

2,939,291

2,615,365

3,218,000

3,019,205

12,316,449△100,158

18,453,496

Accumulated other comprehensive income
Valuationdifferenceon otheravailablefor-salesecurities
Balance at beginning of period

267,014Retirement
Foreign
benefitcurrency
relatedtranslation
adjustment
adjustmentss△11,513△41,119

Total otherShareaccumulatacquisition
ed comprerights
hensiveincome214,381

15,691

Minority
Interests

Total net
assets1,998,376 18,066,579

Changes of items during theaccounting period
Dividends paid

△118,161

Increase through share exchange

2,212,988

Changes in parent company equity
regarding transactions with
non-controlling interests
Changes in the scope of applicationof the equity method
Net gain or net loss (△ ) attributable
to shareholders of parent company

48,876△23,830
504,538

Acquisition of treasury stock△9,209

Disposal of treasury stock
Changes in non-equity items during
the accounting period (net amount)
Total changes during the accounting
periodBalance at end of period

161△3,759△992△15,441△20,194△15,691 △1,974,349 △2,010,234△3,759△992△15,441△20,194△15,691 △1,974,349

263,254△12,505△56,561

194,187

10－

605,130

24,026 18,671,710

FY 2018 (April 1, 2018 ~ March 31, 2019)(Unit: thousands of yen)
Shareholders' equity
Capital stock Capital surplus
Balance at beginning of period

3,218,000

3,019,205

Retainedearnings

Treasury stock

Total
shareholders’equity12,316,449△100,158

18,453,496

Changes of items during theaccounting period
Dividends paid

△135,103△135,103

Net gain or net loss (△ ) attributable
to shareholders of parent company△309,257△309,257

Acquisition of treasury stock
Disposal of treasury stock△702,351

195

164

△30

Changes in non-equity items during
the accounting period (net amount)
Total changes during the accounting
periodBalance at end of period△702,351

3,218,000△30△444,360△702,156△1,146,548

3,019,175

11,872,088△802,315

17,306,948

Accumulated other comprehensive income
Valuationdifference on
Foreignothercurrency
availabletranslation
for-saleadjustments
securities
Balance at beginning of period

263,254△12,505

Retirement
benefitrelated
adjustments△56,561

Total otheraccumulatedcomprehensive
income194,187

Minority
Interests

Total net
assets24,026 18,671,710

Changes of items during theaccounting period
Dividends paid

△135,103

Net gain or net loss (△ ) attributable
to shareholders of parent company△309,257

Acquisition of treasury stock△702,351

Disposal of treasury stock
Changes in non-equity items during
the accounting period (net amount)
Total changes during the accounting
periodBalance at end of period

164
43,7801,569△26,197

19,153△24,026

43,7801,569△26,197

19,153△24,026 △1,151,421

307,035△10,936△82,758

213,340

11－△4,873

17,520,288

(4) Consolidated Statement of Cash Flows(Unit: thousands of yen)

FY 2017(April 1, 2017 ~March 31, 2018)
Cash flow from operating activities
Income or loss (△) before income taxes, etc.
Depreciation expenses
Impairment loss
Amortization of goodwill
Impairment loss on goodwill
Increase/decrease in allowance for doubtful accounts (△ =decrease)
Increase/decrease in reserve for bonus (△ = decrease)
Increase/decrease in allowance for unexercised sales
promotion points (△ = decrease)
Increase/decrease in net defined retirement liabilities (△ =decrease)
Interest and dividend income
Interest on securities
Gain or loss on valuation of marketable securities (△ = gain)
Interest paid
Gain or loss on foreign exchange (△ = gain)
Gain or loss on equity method investment (△ = gain)
Gain or loss on investment partnership management (△ =gain)Gain or loss on sale of shares in affiliates (△ = gain)
Gain or loss on sale of investment securities (△ = gain)
Gain or loss on evaluation of investment securities (△ = gain)
Gain or loss on disposal of fixed assets (△ = gain)
Gain or loss on change in equity (△ = gain)
Increase/decrease in trade receivables (△ = increase)
Increase/decrease in inventory assets (△ = increase)
Increase/decrease in trade payables (△ = decrease)
Increase/decrease in consumption tax receivable (△ =increase)
Increase/decrease in consumption tax payable (△ = decrease)
OthersSub-totalInterest and dividends received
Interest paid
Income tax refunded
Income tax paid
Cash flow from operating activities

12

FY 2018(April 1, 2018 ~March 31, 2019)928,854358,757
145,164
144,634
84,283△393,418
304,685－
106,105－

78,401

83,110△1,983

3,316△34,859△8,336△46,332△15,048△6,660
△60
537
8,437
192
99,127△5,681△133△2,1356,201△13704,510△26,487

51,724－△116,982－
22,764△7,476587,198△106,799△401,785△164,963△69,052
15,00029,299－△59,812122,384
28,35421,087△53,839△10,705△505,733
1,213,575
6,721△8,42927,454△429,433
809,888△39,571
101,480
744,1625,834△6,19524,753△314,402
454,151

(Unit: thousands of yen)

FY 2017(April 1, 2017 ~March 31, 2018)
Cash flow from investing activities
Expenditure for opening of term deposits
Income from withdrawal of term deposits
Expenditure for acquisition of tangible fixed assets
Expenditure for acquisition of software
Expenditure for acquisition of investment securities
Expenditure for business transfer
Income from sale of investment securities
Income from share of profits from investment partnerships
Expenditure for acquisition of shares of affiliates
Income from sale of shares of affiliates
Income from acquisition of subsidiary shares accompanying
changes in the scope of consolidation
Income from sale of subsidiary shares accompanying changes
in the scope of consolidation
Income from collection of loans receivable
Expenditure for security deposits
Income from collection of security deposits
OthersNet cash flow from investing activities
Cash flow from financing activities
Net increase/decrease in short-term loans payable (△ =decrease)
Expenditure for repayment of lease obligations
Expenditure for repayment of long-term borrowing
Expenditure for acquisition of treasury stock
Income from disposal of treasury stock
Payment of dividends
Income from payments from non-controlling interests
Expenditure for acquisition of subsidiary shares notaccompanying changes in the scope of consolidation
Net cash flow from financing activities
Effect of exchange rate on cash and cash equivalents
Net increase/decrease in cash and cash equivalents (△ =decrease)
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year

13

FY 2018(April 1, 2018 ~March 31, 2019)△550,006
500,000△104,344△200,611△94,999△20,000
134,258
15,147△509,800－△50,004
550,000△633,400△96,611△165,000－
88,31983,219－7,790

40,600－－179,613

37,391△11,612
11,219△317,517△1,070,275－△120,150
1,876△33,274△187,622△120,000－△6,582△418,107△9,209－△117,896
84,500△723△240,304△702,351
164△134,278－△10,267－△597,562△599△1,077,494
1,114△858,550△809,850

13,768,853
12,910,303

12,910,303
12,100,452

(5) Notes Concerning the Consolidated Financial Statements(Notes Concerning the Premise of a Going Concern)
Not applicable(Segment Information, etc.)[Segment Information]
1. Outline of reportable segments
The Company’s reportable segments provide financial information separated according to its
various structural units and are also subject to periodic review when the Board of Directors
decides on the allocation of business resources and makes performance appraisals. The FaithGroup’s main businesses are the Content Business, the Point Service Business, and the LabelBusiness.
Content BusinessIn order to promote its Multi-Content and Multi-Platform Strategy, the Faith Group’s Content
Business is providing one-stop solutions ranging from the construction of distribution systems
and the operation of services for end-users to the planning and production of digital contents.
Main companies involved in this business: Faith, Inc. and Faith Wonderworks, Inc.
Point Service Business
The Faith Group is engaged in the Point Service Business, which is aimed at the retail industry.
Main company involved in this business: GoodyPoint Co., Ltd.
Label Business
The Label Business encompasses planning, production and sales of sound sources and videos,music rights acquisition and management, and contracted production and sales of sound source
and video products for other companies, etc.
Main companies involved in this business: Nippon Columbia Co., Ltd. and DREAMUSIC Inc.
2. Calculation method for sales, profit or loss, assets, liabilities and other items by reportablesegment
The accounting method for the reportable business segments is in accordance with the accounting
policies adopted for preparing the consolidated financial statements.
For the profit figures of the reportable segments, the operating income base figures are used.
Inter-segment sales and transfer amounts are decided in consideration of the market price andother factors.

14

3. Information on sales, profit or loss, assets, liabilities and other items by reportable segment
Previous consolidated fiscal year/FY 2017 (April 1, 2017 ~ March 31, 2018)(Unit: thousands of yen)Content

Reportable segment
Point
Label
Service

4,361,273

2,562,697

14,286,099

21,210,070－

21,210,070

105,110

1,169

9,660

115,940△115,940－

4,466,383

2,563,867

14,295,760

21,326,011△115,940

21,210,070△194,301

89,0691,231,542

1,126,309

4,444

1,130,753

Total

Adjustment
amount(Notes
1 & 2)

Amountrecorded in
Consolidated
Financial
Statements(Note 3)

Sales
Sales to externalcustomers
Inter-segment sales ortransfer amount
Total
Segment profit or loss(△)
Segment assets△13,552
12,672,466
1,133,009
11,913,511
25,718,987
25,705,435
Other items
Depreciation expenses－
243,798
18,127
96,831
358,757
358,757
Amortization of－－
34,749109,884
144,634
144,634
goodwill
Investment in－－
835,565
11,101
846,666
846,666
equity-method affiliates
Increase in tangible
and intangible fixed－
124,027
11,928169,000
304,955
304,955
assets(Notes)1.The segment profit or loss adjustment amount of ¥4,444 thousand is calculated by eliminating intersegment
transactions.
2.The segment assets adjustment amount eliminates intersegment transactions, etc.
3. Segment profit is adjusted with operating income in the consolidated financial statements.

Current consolidated fiscal year/FY 2018 (April 1 2018 ~ March 31, 2019)(Unit: thousands of yen)Content

Reportable segment
Point
Label
Service

3,512,723

2,683,271

14,769,361

20,965,356－

20,965,356

75,668540

2,503

78,712△78,712－3,588,391△605,170

2,683,812

14,771,865

21,044,068△78,712

20,965,356

Segment profit or loss

114,703631,130

140,6633,626

144,290

Segment assets

11,648,799

1,240,498

11,458,691

24,347,989△4,77324,343,216

Sales
Sales to externalcustomers
Inter-segment sales ortransfer amount
Total

Other items
Depreciation expenses

Total

Adjustment
amount(Notes
1 & 2)

Amountrecorded in
Consolidated
Financial
Statements(Note 3)－
176,578
20,621
107,485304,685304,685
Amortization of
－
－
4,205
101,899
106,105
106,105
goodwill
Investment in－－
57,71052,255
109,965
109,965
equity-method affiliates
Increase in tangible
and intangible fixed－
657,193
25,974
46,843730,011730,011
assets(Notes)1.The segment profit or loss adjustment amount of ¥3,626 thousand is calculated by eliminating intersegment
transactions.
2.The segment assets adjustment amount eliminates intersegment transactions, etc.
3. Segment profit is adjusted with operating income in the consolidated financial statements.

15

[Related Information]
Previous consolidated fiscal year/FY 2017 (April 1, 2017 ~ March 31, 2018) and current
consolidated fiscal year/FY 2018 (April 1 2018 ~ March 31, 2019)
1. Information by product and service
This information is omitted because similar information is disclosed in the segment
information.
2. Information by region(1) Sales: Information on sales by region is omitted because the amount of sales to externalcustomers in Japan accounts for over 90% of the amount of sales reported on the
consolidated balance sheet.
(2) Tangible fixed assets: Information on tangible fixed assets by region is omitted because
the amount of fixed assets in Japan accounts for over 90% of the amount of fixed assets
reported on the consolidated balance sheet.
3. Information on major customers
Information on major customers is omitted because there were no sales to a single externalcustomer accounting for 10% or more of net sales on the consolidated statement of income.
[Information on Impairment Losses on Fixed Assets for Each Reportable Segment]
Previous consolidated fiscal year/FY 2017 (April 1, 2017 ~ March 31, 2018)(Unit: thousands of yen)Content
Loss onimpairment
Loss on goodwill
impairment

Point
Service

Label

Total

Company-wide/
elimination

Total

145,164－－

145,164－

145,164

84,283－－84,283－84,283Current consolidated fiscal year/FY 2018 (April 1 2018 ~ March 31, 2019)
Not applicable[Information on Amortization of Goodwill and Unamortized Balance for Each Reportable Segment]
Previous consolidated fiscal year /FY 2017 (April 1, 2017 ~ March 31, 2018)(Unit: thousands of yen)

Year-endbalance

Content

Point
Service

17,724

－

Label

Total

1,630,391

1,648,115

Company-wide/
elimination－

Total
1,648,115(Note)
The amount of amortization of goodwill is omitted because the same information is shown in [Segment
Information].

Current consolidated fiscal year/FY 2018 (April 1 2018 ~ March 31, 2019)(Unit: thousands of yen)

Year-endbalance

Content

Point
Service

13,092

－

Label

Total

1,528,491

1,541,584

Company-wide/
elimination－

Total
1, 541,584(Note)
The amount of amortization of goodwill is omitted because the same information is shown in [Segment
Information].

[Information on Gains on Negative Goodwill by Reportable Segment]
Previous consolidated fiscal year/FY 2017 (April 1, 2017 ~ March 31, 2018) and current
consolidated fiscal year/FY 2018 (April 1 2018 ~ March 31, 2019)
Not applicable16(Per Share Information)(Unit: yen)

FY 2017 (April 1, 2017 ~ March 31, 2018)
Net assets per share
1,355.11
Net income per share
40.48

FY 2018 (April 1 2018 ~ March 31, 2019)
Net assets per share
1,321.37
Net loss per share(△)△23.15(Notes)1. The amount of net income per share fully diluted during the current consolidated fiscal year is a net loss per shareand is not recorded because there are no residual shares. In addition, diluted net income per share for the previous
consolidated fiscal year is not recorded because there are no residual shares subject to a dilution effect.
2. The basis of the calculation of net income per share is as follows.
FY 2017
FY 2018(April 1, 2017 ~ March 31,(April 1 2018 ~ March 31,
2018)
2019)
Net income or net loss (△) per share
Net income or net loss (△) attributable to theshareholders of the parent company△309,257
504,538(thousands of yen)Amount not attributable to ordinary－－
shareholders (thousands of yen)
Net income or net loss (△) pertaining tocommon stock attributable to the△309,257
504,538
shareholders of the parent company(thousands of yen)
Average number of shares outstanding during
12,464,649
13,353,334
the period (shares)
3. The basis of the calculation of net assets per share is as follows.
End of FY 2017(as of March 31, 2018)
Total amount of net assets (thousands of yen)
18,671,710
Amount deducted from total amount of net
assets (thousands of yen)(Non-controlling interests)
Year-end net assets pertaining to common stock(thousands of yen)
Year-end number of shares of common stock
used in calculating net assets per share (shares)(Significant subsequent events)
Not applicable17

End of FY 2018(as of March 31, 2019)17,520,288

24,026－(24,026)(－)

18,647,683

17,520,288

13,761,050

13,259,091