BRIEF STATEMENT OF ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED
MARCH 2012 AND FORECASTS FOR THE YEAR ENDING MARCH 2013
May 11, 2012
Faith, Inc. (Stock code 4295, Listed on TSE 1st section)(URL http://www.faith-inc.com/)
Representative; Hajime Hirasawa, CEO/President
Contact; Koji Saeki, CFO/Director
Tel: +81-75-213-3933
Date of General Meeting of Shareholders: June 28, 2012
Date of Submission of Annual Security Report: June 28, 2012
Starting Date of the Dividend Payment: June 29, 2012
Preparation of Supplementary Materials for Quarterly Financial Results: Applicable
Information Meeting for Quarterly Financial Results to be Held: Applicable (for Institutional
Investors and Analysts)
Amounts are rounded down to the nearest JPY 1 million.

1. Results for the Fiscal Year Ending March 2012 (From April 1, 2011 to March 31, 2012)(1) Consolidated Operating Results(Percentages indicate changes compared with the previous fiscal year.)

Net SalesYear ending
March 2012

Millions of yen

March 2011

Operating Profit
Millions of yen

33,415%△60.3

84,191

48.7

Recurring Profit
Millions of yen

1,576

%
△26.0

2,129

189.7

Net Profit
Millions of yen

1,758

%
△20.5

6,665

%
464.0

2,213

252.6

1,181

—

(Note) Comprehensive income: fiscal year ending March 2012: ¥6,949 million (319.7%); fiscal year ending March 2011: ¥1,655 million(—%)

Year ending
March 2012
March 2011

Net Profit per
Share
Yen
5,805.70
1,029.46

Diluted Net
Profit per ShareYen
5,803.03
1,019.26

Return on Equity
Capital%
41.0
9.5

Recurring Profit
on Total Assets
%
6.3
7.1

Operating Profit
on Net Sales
%
4.7
2.5

(Reference) Equity in earnings of associated companies: fiscal year ending March 2012: 152 million yen/fiscal year ending March 2011: 130
million yen(2) Consolidated Financial Position
Total Assets
Year ending
March 2012
March 2011

Net Assets

Ratio of Equity
CapitalMillions of yen

Millions of yen

23,51832,726

19,618
14,544

%
83.3
39.4

Net Assets per ShareYen
17,066.74
11,234.27(Reference) Equity Capital: fiscal year ending March 2012: 19,593 million yen/fiscal year ending March 2011: 12,897
million yen.

(3) Cash Flow Results
Cash Flow fromOperating Activities
Year ending
March 2012
March 2011

Cash Flow from
Investing Activities

Cash
Flow
from
Financing Activities

Cash and Cash
Equivalents at YearEnd

Millions of yen

Millions of yen

Millions of yen

Millions of yen

3,267
5,010

△4,117△459△507△2,543

8,961
10,32112. Dividends
Dividends per Share
(Record dates)

Year ending
March 2012
March 2011
Year ending
March 2013
(Forecast)

1st
Quarter
Yen

Interim―――

Total Dividend
Payment

Year-end

Yen

3rd
Quarter
Yen

Yen

Total
(Annual)
Yen

50.00
50.00
50.00

―
―
―

50.00
50.00
50.00

100.00100.00100.00

Dividend on Net
AssetsPayout Ratio(Consolidated)(Annual)(Consolidated)

Millions of yen

%
9.7
1.7
26.7

114
114

%
0.9
0.7

3. Forecast for the Consolidated Results for the Year Ending March 2013
（from April 1，2012 to March 31，2013）(Percentages indicate changes compared with the previous fiscal year and the previous interim result.)

Net SalesInterimresults
Year ending
March 2012

Operating Profit

Recurring Profit

Net Income

Millions ofyen%Millionsof yen%Millionsof yen%Millionsof yen%Net Income
per Share
Yen

3,500

△88.3

150

△86.2

80

△93.1

60

△99.0

52.26

7,300

△78.2

540

△65.7

490

△72.1

430

△93.5

374.55※ Notes(1) Changes in significant subsidiaries (accompanying changes in scope of consolidation): Applicable
Newly added subsidiaries: Removed subsidiaries: 1 company (subsidiary’s name: WebMoney Corporation)
For details, please refer to 4. (6) “Significant Matters That Constitute the Basis for Preparation of the Consolidated
Financial Statements” on page.19 of the accompanying material.

(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 shares):
The fiscal year ending March 2012: 1,196,000 shares
The fiscal year ending March 2011: 1,196,000 shares(3)-2. Treasury shares at the end of the fiscal year:
The fiscal year ending March 2012: 47,950 shares
The fiscal year ending March 2011: 47,950 shares(3)- 3. Average number of shares at the interim accounting period
The fiscal year ending March 2012: 1,148,050 shares
The fiscal year ending March 2011: 1,148,050 shares(Reference) Overview of Non-Consolidated Results
Results for the Fiscal Year Ending March 2012 (From April 1, 2011 to March 31, 2012)(1) Non-Consolidated Operating Results(Percentages indicate changes compared with the previous fiscal year.)

Net Sales

Operating Profit

Year ending
March 2012

Millions of yen

3,755

%
△17.1

March 2011

4,531

△6.6

Millions of yen

3

%
△99.0

353

△45.4

2

Recurring Profit
Millions of yen

50

%
△83.8

313

△50.4

Net Profit
Millions of yen

6,369

%
1,364.3

435

△69.8

Net Profit per ShareYear ending
March 2012
March 2011

Yen
5,548.26
378.91

Diluted Net Profit per
Share
Yen
—
—

(2) Non-Consolidated Financial Position
Total Assets
Year ending
March 2012
March 2011

Net Assets

Millions of yen

Millions of yen

23,22016,33819,85813,642

Ratio of Equity
Capital
%
85.5
83.5

Net Assets per ShareYen
17,297.30
11,883.40(Reference) Equity Capital: fiscal year ending March 2012: 19,858 million yen/fiscal year ending March 2011: 13,642
million yen.
* Indication of auditing procedures implementation status
This financial results report is exempt from quarterly review procedures under Japan’s Financial Instruments and Exchange
Law. As of the time of disclosure of this report, the auditing procedure based on the Financial Instruments and Exchange Law
has not been completed.
* 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 1. (1) “Analysis of Operating Results” on page 5 of the accompanying material.
(To obtain supplemental documents relating to financial results)
Supplemental documents related to the Company’s quarterly is posted on the company website.
(URL: http://www.faith-inc.com/ir/library.html )3

Contents
1. Operating Results…………………………………………………………………………………… 5(1) Analysis of Operating Results…………………………………………………………………… 7(2) Analysis of Financial Position…………………………………………………………………… 7(3) Basic Policy Regarding Profit Allocation and Current Term/Next Term Dividend Distribution 8
2. Overview of the Faith Group…………………………………………………………….…………. 8
3. Management Policies ………………………………………………………………………………… 9(1) The Faith Group’s Basic Management Policy…………………………………………………… 9(2) Medium and Long-Term Business Strategy………………………………………….…………. 9(3) Challenges the Company Should Address ……………………………………………………… 10
4. Consolidated Financial Statements……………………………………………………………………11(1) Consolidated Balance Sheet…………………………………………………………………..... 11(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income … 13
(Consolidated Statement of Income) …………………………………………………………… 13(Consolidated Statement of Comprehensive Income) ………………………………………… 13(3) Consolidated Statement of Changes in Net Assets…………………………………………… 15(4) Consolidated Statement of Cash Flows………………………………………………………
17(5) Notes Concerning the Premise of a Going Concern…………………………………………
19(6) Significant Matters That Constitute the Basis for Preparation of the Consolidated Financial
Statements………….………….………….………….………….………….………….………… 19(7) Changes in Presentation Methods……………………………………………………………… 21(8) Additional Information………………………………………………………………………… 21(9) Notes to Consolidated Financial Statements…………………………………………………
22(Consolidated Balance Sheet Related) …………………………………………………………… 22(Consolidated Statement of Income Related)……………………………………………………… 22(Consolidated Statement of Comprehensive Income Related) …………………………………… 23(Consolidated Statements of Changes in Net Assets Related)…………………………………… 24(Consolidated Statement of Cash Flows Related) ………………………………………………… 25(Segment Information, etc.) ……………………………………………………………………… 26(Per Share Information)…………………………………………………………………………… 28(Significant Subsequent Events) ………………………………………………………………… 29
5. Non-Consolidated Financial Statements …………………………………………………………… 30(1) Non-Consolidated Balance Sheet ……………………………………………………………… 30(2) Non- Consolidated Statement of Income……………………………………………………… 33(3) Non^ Consolidated Statement of Changes in Net Assets……………………………………… 35(4) Explanatory Note Regarding Premise of a Going Concern…………………………………… 37

4

1. Operating Results(1) Analysis of Operating Results
The mobile phone and smartphone market in Japan has now reached maturity with the number ofindividual subscriptions exceeding 120 million in 2011. In line with the progress of new smartphone
product launches and the further development of the smartphone-use environment, annual shipments ofsmartphone units exceeded 20 million units in FY 2011, accounting for over half of all mobile terminals
sold during that period, and that the demand for smartphones will continue to increase in future.
Moreover, in the contents market, the popularity of social networking services (SNS), mobile social
games, video-sharing sites, etc, that require a wide range of mobile terminal functions, is leading to an
acceleration in the diversification and complexity of user needs, and this in turn is driving demand forthe creation of new contents distribution.
Against this background, based on its Multi-Content and Multi-Platform Strategy of creating anenvironment that allows people to enjoy a wide diversity of contents whenever and wherever theychoose, the Faith Group has been pouring its energies into creating high value-added contents andestablishing a new system for delivering them to users. As a part of this effort, we have established the
Future SEVEN facility as well as a new company in order to deliver music to users in an unprecedented
new style.
As a result of the above factors, and in line with the elimination of the Company’s consolidated
subsidiary WebMoney Corporation from the Group’s consolidated financial results, net sales for the
fiscal year ending March 2012 decreased by 60.3% compared with the same term of the previous fiscal
year to ¥33,415 million, operating profit decreased by 26.0% year on year to ¥1,576 million, andrecurring profit decreased by 20.5% year on year to ¥1,758 million. Moreover, as a result of
extraordinary profits totaling ¥7,006 million from the sale of the Company’s shareholding in
WebMoney Corporation, etc., the Group recorded a net profit of ¥6,665 million, an increase of 464.0%
year on year.
Information on each business segment is as follows:<Content Business>
During the period under review, the Faith Group continued its efforts to establish a new framework forcontent distribution and expand and strengthen its new business operations base.
In July 2011, Faith sold its entire shareholding in its consolidated subsidiary WebMoney Corporation.
By making strategic use of the capital obtained from the sale in undertaking a variety of measures, theCompany is proceeding with the development of contents and concentrating its management resourceson content distribution.
As a part of this effort, in August 2011, on the first floor of the Company’s Minami Aoyama Office inTokyo, we opened the showroom Future SEVEN as a real-world space for announcing and showcasing
work by excellent artists and creators and for cultivating their talents, and for focusing on the various
solutions possessed by the Faith Group.
Moreover, the Company established Future RECORDS, Inc., in a joint venture with Nippon Columbia
Co., Inc. This new company is engaged in creating new forms of music distribution by making
maximum use of the facilities of Future SEVEN in planning and producing music and visual works,
producing and operating fan clubs, planning and producing live events, etc.
In the continuously expanding smartphone market, the Company has substantially updated the “pick☆
mix” app, which makes it possible to produce photo movies simply by combining music and photos. In
addition to conventional functions, the latest edition offers improved convenience for users of all ages
as a new kind of communication tool that allows people to upload self-produced photo movies toFacebook, twitter, mixi, etc., in order to share them with friends and family.
The current fiscal year also saw the grand opening of an epoch-making new app introduction portal
service named aivie, which is dedicated to improving user convenience and solving the problems of a5

wide range of users from smartphone beginners to application developers by creating a newcommunication forum by utilizing apps. This provides additional ways for smartphone users to makeuse of Twitter-linked functions and message board functions for enhanced communication between
users.
Not Yet, a sub-unit of the popular all-female pop group AKB48, made a lively recording debut with thesingle “Shumatsu Not Yet”, released its third single, “Perapera Perao”, in November 2011, which has
been employed as the ending theme song of a popular TV program. Faith is producing a steady streamof synergy with Nippon Columbia Co., Ltd. in promoting new music distribution, etc. For example, in
first limited edition single stemming from this collaboration, the Company enclosed a connecting cardthat served as an entry ticket to an event and as a tool enabling users to view privilege images.
As a result of the above, the Group recorded net sales in the Content Business for the fiscal year ending
March 2012 of ¥6,372 million, a decrease of 13.8% compared with the previous fiscal year, in line withdeclining sales mainly in the ringtone business. Meanwhile, due to contributions from cost cutting, etc.,
operating profit increased by 53.0% year on year to ¥990 million.
<Electronic Money Business>
The Electronic Money Business saw a continuing expansion of the online game market, a major sector
in which electronic money is used, as well as a steady increase in the settlement amount of WebMoney.
Moreover, in line with the sale of the Company’s shareholding in its consolidated subsidiary WebMoney
Corporation, which is engaged in the Electronic Money Business, the company in question was
excluded from the Faith Group’s consolidated financial results from the second quarter consolidated
accounting period, so its business performance as recorded in the results for the current third quarterremains at the level recorded for the first quarter consolidated accounting period.
As a result of the above factors, net sales in the Electronic Money Business totaled ¥25,717 million, adecrease of 65.8% compared with the same period of the previous fiscal year, and operating profit inthis business decreased by 66.8% year on year to ¥430 million.
<Other Businesses>
Revenues from other businesses including the Point-Card System Business resulted in sales of ¥1,326
million, an decrease of 18.6% compared with the same period of the previous fiscal year, and an
operating profit of ¥151 million, an decrease of 18.9% year on year.
The business performance forecasts for next fiscal year (FY2013) are as follows. In accordance with theselloff of the Electronic Money Business and the decline in earnings in the Contents Business, the FaithGroup is forecasting net sales of ¥7,300 million, a decrease of 78.2 % year-on-year, an operating profitof ¥540 million, a decrease of 65.7% year-on-year, a recurring profit of ¥490 million, a decrease of
72.1% year-on-year, and a net profit of ¥430 million, down 93.5% compared with FY2012.
(Unit: millions of yen)

Net sales
Operating profit
Recurring profit
Net profit

FY2012 (Result)(a)33,415
1,576
1,785
6,665

FY2013 (Forecast)
(b)
7,300
540
490
430

Change(b)-(a)△26,115△1,036△1,268△6,235Currently, in the Japanese content market, the PC, mobile phone and smartphone-use content market is
exhibiting favorable growth. In the content viewing environment, the progressive improvement of
information terminals such as PCs, mobile phones and smartphones is allowing people to enjoy a wider
variety of contents. On the other hand, with appearance of a succession of new services that make use of
these information terminals, the diversification and segmentation of both information transmission
means and user needs are accelerating.
In this complicated market environment, the Faith Group is proceeding with the development of its“multi-content & multi-platform strategy”, including by constructing a new system for distributing
6

guaranteed-quality contents based on the almost 10 million users that are within the direct reach of theGroup’s services. Faith is also continuously promoting content production in fields such as music andvideo, etc., in order to bolster its ability to rapidly launch excellent high value-added content on themarket. In addition, Faith considers the provision of medical and health information as important
content that should be accessible regardless of the user’s hardware and location, and the Group is
working to provide users with highly convenient services based on this recognition.

(2) Analysis of Financial Position① Assets, Liabilities and Net Assets
Total assets as of the end of the consolidated fiscal year ended March 31, 2012 decreased by ¥9,207
million from the end of the previous consolidated fiscal year to ¥23,518 million. This result was mainly
due to a decrease in goodwill greater than the amount of goodwill amortization booked, and to
decreases in accounts and notes receivable and in investment securities in line with the exclusion of theCompany’s consolidated subsidiary WebMoney Corporation from the Faith Group’s consolidated
financial results.
Total liabilities decreased by ¥14,282 million compared with the end of the previous consolidated fiscal
year to ¥3,899 million yen. This was mainly the result of the exclusion of the Company’s consolidated
subsidiary WebMoney Corporation from the Faith Group’s consolidated financial results and to
decreases in the amounts of trade notes and accounts payable and the allowance for utilized costs,
despite an increase in income taxes payable, etc.
.
Net assets increased by ¥5,074 million compared with the end of the previous consolidated fiscal year to¥19,618 million. This was mainly the result of an increase in retained earnings in line with thesubstantial net profit recorded for the current fiscal year, despite dividend payments and a decrease inminority interests and the elimination of the Company’s consolidated subsidiary WebMoney
Corporation from the Group’s consolidated financial results. With this, the Group’s capital adequacy
ratio increased by 43.9 percentage points to 83.3%.
② Cash Flow
Cash and cash equivalents at the end of the consolidated fiscal year ended March 31, 2012 decreased by¥1,359 million, a 13.2% reduction) from the end of the previous consolidated fiscal year to ¥8,961
million.
Details of cash flow of this fiscal year ended March 31, 2012 and its factor are as follows:(Cash flow from operating activities)
Cash flow from operating activities amounted to an inflow of ¥3,267 million, a decrease of 34.8%
compared with the previous fiscal year. This was due mainly to the deduction of the profit on the sale ofan affiliated company’s shareholding of ¥6,819 million from the Group’s net profit before taxes of¥8,609 million and to other adjustments, and also to the addition of ¥2,577 million in respect of anincrease in trade payables and the deduction of ¥1,169 million in respect of an increase in tradereceivables.
(Cash flow from investing activities)
Cash flow from investing activities amounted to an outflow of ¥4,117 million (compared with an
outflow of ¥459 million in the previous fiscal year), due mainly to the posting of ¥8,740 million in
expenditure in respect of opening new term deposits, despite ¥4,670 million in income from thewithdrawal of existing term deposits.
(Cash flow from financing activities)
Cash flow from financing activities amounted to an outflow of ¥507 million (compared with an outflow
of ¥2,543 million in the previous fiscal year), due mainly to posting of ¥399 million in expenditure in
respect of repayment of long-term debt and of ¥113 million in respect of dividend payments.

7

(Reference) Movements in Cash Flow Associated Indicators
Capital-to-asset ratio (%)
Market value-based capital-to-asset ratio (%)
Ratio of interest on interest-bearing debt to cash flow
(years)Interest coverage ratio (multiple)

FY 2010
39.6
42.3
0.90

FY 2011
39.4
38.1
0.31

FY 2012
83.3
48.9
0.35

92.2

148.9

202.1

Capital-to-asset ratio: Equity capital/total assets
Market value-based capital-to-asset ratio: Market capitalization/total assets
Ratio of interest on interest-bearing debt to cash flow：interest-bearing debt/cash flow from operating
activities
Interest coverage ratio: Cash flow from operating activities/interest payment(Note 1) All the above ratios are calculated based on the consolidated financial figures.
(Note 2) Market capitalization is calculated based on the number of shares issued excluding treasury
shares.
(Note 3) Interest-bearing debt includes all debt on which interest is being paid among the liabilities
reported in the Consolidated Balance Sheet.
(Note 4) For cash flow from operating activities and interest payment, the figures for “Cash flow fromoperating activities” and “interest amount paid” reported in the Consolidated Statement of
Cash Flows are used.

(3) Basic Policy on Appropriation of Profit and Dividend Payment
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 positions.
Based on its fundamental policy of paying continued stable dividends, the Company plans to pay
dividends of ¥100 per share, including interim dividends of ¥50, in the next fiscal year.

2. Overview of the Faith GroupThe Faith Group consists of Faith, Inc. (the Company), 7 subsidiaries and 5 affiliates, and is engaged
mainly in the Content Business.
The Faith Group’s businesses and the relationship between the Company and the other group companies
with regard to business operations are as follows.

(1) Content BusinessIn the diversifying content market, the Group is promoting multi-platform-compatible multi-content
distribution to users regardless of the network or terminal device used with the aim of creating a newcontent distribution framework for the emerging new market. As a comprehensive service provider, theGroup is promoting one-stop solutions ranging from the construction of distribution systems andoperation of services for end-users to the planning and production of digital contents.
This business is conducted by Faith, Inc., Faith Wonderworks, Inc., and 9 other affiliates.
(2) Other Business
The Group is engaged in the Point Service Business and other businesses, which are conducted by
GoodyPoint Inc. and one other affiliate company.
In line with the sale in July 2011 of the Company’s entire shareholding in its former consolidated
subsidiary WebMoney Corporation, which is engaged in the Electronic Money Business, the company
in question has been removed the Faith Group’s consolidated financial results.

8

[Business System Diagram]
The following diagram shows the Faith Group’s business system as described above (as of March 31,2012).
Content BusinessJapan
The Company (Faith, Inc.)
Faith Wonderworks, Inc.
Rightsscale. Inc.
Future RECORDS.Inc.

The FaithGroup(Faith Inc.
and its
group
companies)*2. Nippon Columbia Co., Ltd.
*2. Catch Media Japan, Inc.
*2. Japan Rights Clearance Inc.
*1. Plus 1 other company
Overseas

Content distribution service
provision==================>Development of content
platform technology
Content production services
Ourcustomers*1. Rightsscale USA, Inc.
*3. Plus 1 other company

Other BusinessJapan
GoodyPoint Corp.

Provision of point services===================>*3. Plus 1 other company(Notes)No mark: Consolidated subsidiaries*1:
Non-consolidated subsidiaries to which the equity method is not applied*2:
Affiliates to which the equity method is not applied*3:
Affiliates to which the equity method is not applied

3. Management Policies(1) The Faith Group's Basic Management Policy
The basic policy of Faith Group is to create schemes to distribute digital contents to users. The FaithGroup accurately grasps changes in society and in people’s lifestyles, and continues to create various
kinds of services in harmony with the users’ usage environment in easier-to-use methods. The Company
and its affiliated group companies will strive to develop the methods, technologies and know-how torealize the Group’s management goals, and aim to be a higher value added company through business
partnerships with other companies in addition to supplying its own services independently.
(2) Medium- and Long-Term Business Strategy
The Faith Group will continue to construct new markets by creating a broad range of services demanded
by users. The Group will make efforts to actualize services including the production and distribution ofmusic and video contents, the provision of online games and e-commerce services, etc., as well as
various types of corporate support services utilizing information devices, based on proposals for uniquebusiness solutions and through business partnerships with prominent companies in many fields.
Through this, the Group will provide users with attractive and high value-added next-generation
services. Moreover, in today’s increasingly diversified and complex market environment, the Group isgiving consideration to accurately grasping user needs, promoting its “multi-content on multi-platform
strategy” (for creating an environment in which people can enjoy a wide variety of contents when andwhere they desire), and improving its equity capital and profitability, which are operating resources thatare linked to increasing corporate value and shareholders’ profit. Accordingly, the Group placesemphasis on the equity capital ratio and the operating profit as management indexes.
9(3) Challenges the Company Should Address① Content BusinessA demand exists for the creation of new content services. To satisfy this demand, the Faith Group will
create new markets by developing distribution systems that bring benefits to content rights holders,
distributors and users alike based on the technology and know-how accumulated by the Group up to
now as well as on providing its own business solutions through partnerships with prominent companies
in a range of business fields. In order to realize this goal, the Group will make every effort to reinforce
its in-house content production activities, while also engaging in production tie-ups with content rights
holders and attempting to expand its user reach in order to strengthen its contact points with users.
Also, now that the content using environment has become increasingly diversified due to technologicalrenovation, the construction of new content distribution systems is a constant requirement. Against thisbackground, ever since its establishment, the Faith Group has endeavored to “build up its content
distribution business by making use of various information terminals” as a major pillar of its business.
In the future, the Group will develop new service systems that are useful for content rights holders,
distributors and users, and will commercialize the necessary technology such as embedded terminal
technology, distribution system technology, etc.
② Electronic Money BusinessIn line with the sale in July 2011 of the Company’s entire shareholding in its consolidated subsidiary
WebMoney Corporation, which is engaged in the Electronic Money Business, the company in question
is no longer a consolidated subsidiary of the Faith Group.
With this, as of March 31, 2012, the Faith Group is no longer engaged in the Electronic Money
Business, and there are no outstanding issues that the Company needs to address.

104. Consolidated Financial Statements(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
Deferred tax assets
OthersAllowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures
Depreciation amount
Buildings and structures (net base)Machinery and delivery equipment
Depreciation amount
Machinery and delivery equipment (net base)Tools, devices and equipment
Depreciation amountTools, devices and equipment (net base)Land
Total tangible fixed assets
Intangible fixed assets
Goodwill
SoftwareLeased assets
OthersTotal intangible fixed assets
Investment and other assets
Investment securities
OthersAllowance for doubtful receivable
Total investments and other assets
Total fixed assets
Total assets

FY2010FY 2011(As of March 31, 2011)(As of March 31, 2012)

12,001,893
8,356,029
359,676
3,110
1,038
8,892
344,125
368,465△49,258
21,373,972

13,712,005
1,106,836
239,790
2,580
8,199
7,817
28,269260,218△29,816
15,335,901

1,362,445△108,565
1,253,880
24,095△14,402
9,692
879,584△750,836
128,747
1,500,895
2,893,215

1,519,215△176,203
1,343,011
24,095△18,299
5,795
835,959△677,874
158,084
1,500,895
3,007,786

435,363
323,996—
47,491
806,851

40,599319,356
20,25342,525
422,734*1, *2

11

7,405,341
396,115△148,792
7,652,664
11,352,731
32,726,703*1

4,644,916
121,294△13,734
4,752,477
8,182,998
23,518,900

(Unit: thousands of yen)

(Liabilities)
Current liabilities
Trade notes and Accounts payable
Short-term loans
Lease obligations
Income taxes payable
Allowance for utilized costs
Allowance for points
Allowance for bonus payments
OthersTotal current liabilities
Fixed liabilities
Long-term liabilities
Lease obligations
Deferred tax liabilities
Allowance for retirement benefits
OthersTotal fixed liabilities
Total liabilities(Net assets)
Shareholder's equity
Common 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
Total other accumulated comprehensive income
Minority interests
Total net assets
Total liability and net assets

12

FY2010FY 2011(As of March 31, 2011)(As of March 31, 2012)

9,948,110
399,984—
390,631
4,835,100
230,979
77,608882,358
16,764,771

187,933
399,984
4,308
1,424,393—
208,142
73,566
610,316
2,908,644

1,133,368—
183,204
91,824
8,909
1,417,306
18,182,078

733,384
17,483
125,729
109,389
5,363
991,350
3,899,995

3,218,000
3,708,355
6,556,212△651,377
12,831,189

3,218,000
3,708,355
13,106,638△651,377
19,381,616

268,011△201,693
66,317
1,647,118
14,544,625
32,726,703

227,124△15,270
211,853
25,435
19,618,905
23,518,900

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

Net sales
Cost of cales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating profit
Interest income
Dividend income
Interest on securities
Investment gain on equity method
Miscellaneous receipts
Total non-operating profit
Non-operating expenses
Interest paid
Exchange losses
Provision of allowance for doubtful accounts
Investment partnership losses
Miscellaneous expenses
Total non-operating expenses
Recurring profit
Extraordinary profit
Gain on disposal of fixed assets
Gain on disposal of investment securities
Gain on sale of shares of affiliated company
Reversal of allowance for doubtful accounts
OthersTotal extraordinary profit
Extraordinary losses
Loss on disposal of fixed assets
Loss due to amortization
Loss on valuation of investment securities
Loss on sale of shares of affiliated company
Loss due to changes in equity
Financial impact of adopting the accounting standard for
asset retirement obligations
OthersTotal extraordinary losses
Net income before income taxes
Corporate, local, and business taxes
Income taxes - deferred
Total corporate, local, and business taxes
Net income before minority interests
Minority interests in income
Net profit for the current fiscal year

13

FY 2010

FY 2011(As of March 31, 2011)84,191,290*2, *673,335,511
10,855,779*1, *2
8,726,016
2,129,762(As of March 31, 2012)
33,415,989*2
27,290,091
6,125,898*1, *24,549,456
1,576,442

6,962
4,701
45,027130,485
7,073
194,250

26,635
5,560
13,826
152,888
7,469
206,380

33,65540,23230,018
1,200
5,696
110,8032,213,209

16,204
1,967
—
5,000
1,012
24,184
1,758,637*3—
28,795
6,899,538—
77,865
7,006,199

*4
*5

1,061
19,479
2,528
3,117
—
26,186
14,54334,295
16,450—11,537*4*523,48945,598936
79,565—

17,253—37
94,1182,145,277
563,775△100,132
463,643
1,681,633
499,763
1,181,870

6,141
155,730
8,609,106
1,565,313
240,226
1,805,540
6,803,566
138,335
6,665,231

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

Net income before minority interests
Other comprehensive income
Valuation difference on other available-for-salesecurities
Foreign currency translation adjustments
Total other comprehensive income
Comprehensive income(Details)
Comprehensive income attributable to shareholders of
the parent company
Comprehensive income attributable to minority
interests

14

FY 2010

FY 2011(As of March 31, 2011)
1,681,633(As of March 31, 2012)
6,803,566△24,178△40,691△1,548△25,727
1,655,906

186,227
145,535
6,949,102*

1,156,142

6,810,767

499,763

138,335

(3) Consolidated Statement of Changes in Net Assets(Unit: thousands of yen)

Shareholders' equity
Common stock
Balance at the start of the accounting period
Changes of items during the accounting period
Total changes of items during the accounting period
Balance at the end of the accounting period
Capital surplus
Balance at the start of the accounting period
Changes of items during the accounting period
Total changes of items during the accounting period
Balance at the end of the accounting period
Retained earnings
Balance at the start of the accounting period
Changes of items during the accounting period
Cash dividend paid
Net gain or loss
Total changes of items during the accounting period
Balance at the end of the accounting period
Treasury stock
Balance at the start of the accounting period
Changes of items during the accounting period
Total changes of items during the accounting period
Balance at the end of the accounting period
Total shareholders' equity
Balance at the start of the accounting period
Changes of items during the accounting period
Cash dividend paid
Net gain or loss
Total changes of items during the accounting period
Balance at the end of the accounting period

15

FY2010(As of March 31, 2011)

FY2011(As of March 31, 2012)

3,218,000

3,218,000—
3,218,000—
3,218,000

3,708,355

3,708,355—
3,708,355—
3,708,355

5,489,146

6,556,212△114,805
1,181,870
1,067,065
6,556,212△114,805
6,665,231
6,550,426
13,106,638△651,377△651,377—△651,377—△651,377

11,764,124

12,831,189△114,805
1,181,870
1,067,065
12,831,189△114,805
6,665,231
6,550,426
19,381,616

(Unit: thousands of yen)

Accumulated other comprehensive income
Valuation difference on other available-for-sale securities
Balance at the start of the accounting period
Changes of items during the accounting period
Net changes of items other than shareholders' equity
Total changes of items during the accounting period
Balance at the end of the accounting period
Foreign currency translation adjustments
Balance at the start of the accounting period
Changes of items during the accounting period
Net changes of items other than shareholders' equity
Total changes of items during the accounting period
Balance at the end of the accounting period
Total accumulated other comprehensive income
Balance at the start of the accounting period
Changes of items during the accounting period
Net changes of items other than shareholders' equity
Total changes of items during the accounting period
Balance at the end of the accounting period
Minority interests
Balance at the start of the accounting period
Changes of items during the accounting period
Net changes of items other than shareholders' equity
Total changes of items during the accounting period
Balance at the end of the accounting period
Total net assets
Balance at the start of the accounting period
Changes of items during the accounting period
Cash dividend paid
Net gain or loss
Net changes of items other than shareholders' equity
Total changes of items during the accounting period
Balance at the end of the accounting period

16

FY2010(As of March 31, 2011)

FY2011(As of March 31, 2012)

292,095

268,011△24,083△24,083
268,011△40,887△40,887
227,124△200,050△201,693△1,643△1,643△201,693

186,422
186,422△15,270

92,044

66,317△25,727△25,727
66,317

145,535
145,535
211,853

1,129,455

1,647,118

517,662
517,662
1,647,118△1,621,682△1,621,682
25,435

12,985,625

14,544,625△114,805
1,181,870
491,934
1,558,999
14,544,625△114,805
6,665,231△1,476,146
5,074,279
19,618,905

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

Cash flow from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Amortization of goodwill
Amortization loss on goodwill
Gain or loss on equity method investments (△ = gain)
Gain or loss on equity movement (△ = gain)
Increase/decrease in allowance for doubtful accounts
Increase/decrease in reserve for bonus
Increase/decrease in allowance for utilized costs
Increase/decrease in allowance for unexercised sales
promotion points
Increase/decrease in allowance for retirement benefits
Increase/decrease in allowance for office relocation
Interest and dividends income
Interest on securities
Interest paid
Gain or loss on foreign exchange (△ = gain)
Gain or loss on sale of investment securities (△ = gain)
Gain or loss on sale of shares in affiliates (△ = gain)
Gain or loss on valuation of investment securities (△ = gain)
Gain or loss on sale of fixed assets (△ = gain)
Gain or loss on disposal of fixed assets (△ = gain)
Financial impact of adopting the accounting standard for asset
retirement obligations
Increase/decrease in trade receivables (△ = increase)
Increase/decrease in inventory assets (△ = increase)
Increase/decrease in trade payables
Increase/decrease in consumption tax receivable (△ =increase)
Increase/decrease in consumption tax payable
OthersSub-totalInterest and dividends received
Interest paid
Income tax refunded
Income tax paid
Cash flow from operating activities

17

FY2010(As of March 31, 2011)

FY2011(As of March 31, 2012)

2,145,277
290,786
34,295
1,017,611△130,485
11,537△5,4807,400
1,264,060

8,609,106
307,580
45,598
196,646△152,888—△107,103△4,041
405,173△39,499△22,837

8,749△205,720△11,663△45,027
33,655
39,147△19,479△2,52816,450△1,061
14,543

17,565—△32,196△13,826
15,297
1,532△28,795△6,819,973
936—
23,48917,253—△2,069,337
74,0802,755,614△1,169,057△7,1152,577,833

45,594—

83,916
212,766
5,542,458
56,625△33,655
20,583△575,792
5,010,219△73,831△136,993
3,632,101
26,640△16,168
4,167△379,321
3,267,419

(Unit: thousands of yen)

Cash flow from investing activities
Expenditure for opening of term deposits
Proceeds from withdrawal of term deposits
Expenditure for acquisition of marketable securities
Income from sale of marketable securities
Expenditure for acquisition of tangible fixed assets
Income from sale of tangible fixed assets
Expenditure for acquisition of software
Expenditure for acquisition of investment securities
Proceeds from sale of investment securities
Expenditure for acquisition of shares of affiliates
Proceeds from sale of shares of affiliates
Proceeds from sale of shares of subsidiaries in line withchanges in scope of consolidation
Expenditure for loans receivable
Proceeds from collection of loans receivable
Expenditure for security deposits
Proceeds from collection of security deposits
OthersNet cash flow from investing activities
Cash flow from financing activities
Expenditure for repayment of lease obligations
Expenditure for repayment of long-term borrowing
Proceeds from payment from minorities
Payment of dividends
Dividends paid to minority interests
Net cash flow from financing activities
Effect of exchange rate on cash and cash equivalents
Net increase/decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

18

FY2010(As of March 31, 2011)

FY2011(As of March 31, 2012)△3,360,000
2,890,000——△269,683
5,510△84,884—
27,226—
114,042△8,740,000
4,670,000△199,590
300,000△333,957—△213,180△202,000
29,636△79,997
197,000—*1*2

414,654—399—
217,440△15△459,964△3,109120△21,108
8,834
54,856△4,117,841—△2,443,544
43,031△113,691△29,538△2,543,742△25,545
1,980,966
8,340,635
10,321,601△992△399,984
33,000△113,727△25,801△507,506△1,877△1,359,805
10,321,601*18,961,796

(5) Notes Concerning the Premise of a Going Concern
Not applicable(6) Significant Matters That Constitute the Basis for Preparation of the Consolidated Financial
Statements
1. Items Concerning the Scope of Consolidation(1) Number of consolidated subsidiaries
Previous fiscal year: 5 companies, current fiscal year: 5 companies
Names of major consolidated companies:• Faith Wonderworks, Inc.
• GoodyPoint Corp.
• Future RECORDS Inc.
Among the aforementioned companies, Future RECORDS Inc., which has been newly established,
has been included within the scope of consolidation. Also, in accordance with the sale of theCompany’s shareholding in its subsidiary WebMoney Corporation during the previous fiscal year,
this company has been removed from the scope of consolidation.
(2) Names of major non-consolidated subsidiaries, etc.
Name of major non-consolidated company:• Rightsscale USA, Inc.
(Reason for exclusion from scope of consolidation)
Because all the non-consolidated subsidiaries are small companies, the sum totals of their grossassets, sales, and net profit or loss (amount corresponding to equity), etc., do not have a significant
influence on the Consolidated Balance Sheet.
2. Items Concerning the Application of the Equity Method(1) Number of equity method affiliates
Previous fiscal year: 3 companies, current fiscal year: 3 companies
Names of major consolidated companies:• Nippon Columbia Co., Ltd.
• Catch Media Japan, Inc.
• Japan Rights Clearance Inc.
Among the aforementioned companies, Catch Media Japan, Inc., which has been newly establishedin the current consolidated fiscal year, has been included within the scope of application of equity
method accounting.
Also, in accordance with the sale during the previous fiscal year of the Company’s shareholding in
Bellrock Media, Inc., an affiliated company accounted for by the equity method, this company has
been removed from the scope of application of equity method accounting.
(2) Non-consolidated companies to which the equity method is not applied (Rightsscale USA, Inc. andothers) and affiliated companies (Dragon Eye Inc. and others) have been excluded from the scope of
application of equity method accounting because, in view of their net profit or loss (amountcorresponding to equity) and retained earnings (amount corresponding to equity), etc., excluding
them from the scope of application of equity method accounting has only a minor influence on theConsolidated Balance Sheet and is of no overall significance.
3. Items Concerning the Accounting Periods of the Consolidated Subsidiaries
Of the consolidated subsidiaries, GoodyPoint Corp. and Cyberplus Co., Ltd. have a settlement dateof February 29 as their balance sheet closing date. In producing the Consolidated Balance Sheet,each company’s balance sheet as of their respective balance sheet closing dates is used. However,necessary adjustments for consolidation are made concerning important transactions that occurred
between February 29 and the consolidated settlement date of March 31.
4. Items Concerning the Accounting Standards(1) Significant evaluation standards and methods
1) Marketable securities
a. Securities held to maturity: Stated under the amortized cost method (straight line method)b. Other securities:
19

—Available-for-sale securities with a fair market value
Stated at fair value based on market values applicable on the date of consolidated settlement ofaccounts (in which all differences between the carrying amounts and the fair values are reported
as a separate component of net assets, while the cost of securities sold is calculated by themoving average method)—Available-for-sale securities without a fair market value: stated at cost determined by the moving
average method. For investment equities in investment partnerships, a method based on the mostrecent balance sheet available at the balance sheet reporting date provided in the partnershipcontract is employed, taking an amount equivalent to the equity value.
2) Inventories
a. Commercial products and merchandise: Stated mainly under the cost method employing thespecific cost method (balance sheet values calculated by devaluing the book values based on
declining profitability). However, in the case of sound source data files, fixed installment
amortization of the acquisition price is conducted over two years, which is the usable period
in-house.
b. Manufactured products and products in progress: Stated mainly under the cost method employing
the specific cost method (balance sheet values calculated by devaluing the book values based on
declining profitability). Regarding the acquisition cost of each product, amortization is conducted
as a lump sum at the time of obtaining revenue from the product.
(2) Significant depreciable assets and depreciation methods
1) Tangible fixed assets (excepts lease assets)
The Company and its consolidated subsidiaries employ the declining balance method to
calculated depreciation expenses for these assets. (However, the company employs thestraight-line method for buildings (apart from attached facilities) acquired since April 1, 1998.)
The useful lifetimes of the main types of tangible fixed assets are as follows.
Buildings and structures: 3 – 50 years
Machinery and delivery equipment: 6 – 12 years
Tools, devices and equipment: 2 – 15 years
2) Intangible fixed assets (excepts lease assets)
The straight-line method is employed. In the case of in-house-use software, this is based on theuseable period in-house (up to 5 years).
3) Leased assets
The method to calculate depreciation for such assets is the straight-line method with theirresidual values being zero over their leased periods used as the number of years of useful life.
Among the financial lease transactions outside of transfer of ownership, in cases where the leasetransaction start date was on or before March 31, 2008, account processing is conducted inaccordance with the ordinary lease transaction method.
4) Long-term prepaid expenses
The straight-line method is employed.
(3) Standards for recording significant allowances
1) Allowance for doubtful accounts
In order to prepare for losses due to doubtful accounts receivable, the Company and its
consolidated subsidiaries record the estimated unrecoverable amounts in consideration of theactual ratio of bad debts for general accounts receivable and individual collectability for special
bonds such as doubtful accounts receivable, etc.
2) Reserve for point card certificatesIn order to prepare for the cost burden of point utilization, for the balance of yet to be exchanged
issued points, the required amount expected to be utilized in future is recorded based on the pointcollection performance ratio.

203) Reserve for bonuses
In order to prepare for employee bonus payments, among the estimated future payment amount,
the Company and some of its consolidated subsidiaries record the current consolidated fiscal
year’s share of these expenses.
4) Reserve for retirement benefits
In order to prepare for employee retirement benefit payments, the Company and some of its
consolidated subsidiaries record an amount based on the retirement benefit obligations at the endof the current consolidated fiscal year. Because the Company and some of its consolidated
subsidiaries are classed as small businesses with less than 300 employees, a simple method basedon the ”Code of Practice Concerning Retirement Benefit Accounting” (Interim Report) (Japan
Institute of Certified Public Accountants Report No. 13) is employed.
(4) Important standards for revenue and cost recognition
Standards for recording income and expenditure related to software production orders
a. Software produced to order for which certainty of achievement with respect to sections
progressing up to the end of the current consolidated fiscal year is recognized: Progress-based(rate of progress of the work estimated using the cost-to-cost method)b. Other software produced to order: Completed contract method(5) Standards for conversion of significant foreign currency-denominated assets and liabilities into
Japanese yen
Receivables and payables denominated in foreign currencies are processed by being translated
into Japanese yen at the consolidated fiscal year-end spot exchange rates.
(6) Goodwill amortization method and amortization period
The amortization of goodwill is carried out using the straight-line method over a period of 5
years. Also, regarding the balance between investment and capital (goodwill equivalent amount)in the case of companies accounted for by the equity method, amortization is conducted over 20
years using the straight-line method. However, in cases where the amount of goodwill isinsignificant, one-time amortization is conducted for the fiscal term in which the relevant accountcase occurred.
(7) Scope of cash and cash equivalents reported in the Statement of Cash Flows
This item consists of cash on hand, demand deposits and short-term investments that are highly
liquid, easily realizable, bearing only insignificant risk of changing in value, and with a maturity
date that comes within 3 months of the acquisition date.
(8) Other important items necessary to produce the Consolidated Financial Statements
1) Accounting method for consumption tax: Accounting for consumption tax, etc., is carried out
using the tax exclusion method.

(7) Changes in Presentation Methods(Consolidated Statement of Income)For the previous consolidated fiscal year, “investment partnership losses” were included among“miscellaneous expenses” under non-operating expenses. However, because this item has increased tomore than ten-hundredths (10/100) of total no-operating expenses, it is presented separately for thecurrent consolidated fiscal year. In order to reflect this change of presentation method, the figures fromthe previous consolidated fiscal year’s Consolidated Financial Statements have been rearranged. As aresult, in the Consolidated Statement of Income, the for the previous consolidated fiscal year, the entry of¥6,896 thousand of “miscellaneous expenses” has been changed to ¥1,200 thousand of “investment
partnership losses” and ¥5,696 thousand of “miscellaneous expenses”.

(8) Additional Information(Application of the accounting standards of changes in accounting policies and errors)
In accordance with accounting changes and amendments of past errors conducted after the start ofthe current consolidated fiscal year, the “Accounting Standard for Accounting Changes and Error
Corrections” (ASBJ Statement No.24 of December 4, 2009) and the “Guidance on the AccountingStandard for Accounting Changes and Error Corrections” (ASBJ Guidance No.24 of December 4,21

2009) are applied.

(9) Notes to Consolidated Financial Statements(Consolidated Balance Sheet Related)*1 The following were held by non-consolidated subsidiaries and affiliates.
(Unit: thousands of yen)

Investment securities (shares)

FY 2010

FY 2011(As of March 31, 2011)
3,466,088(As of March 31, 2012)
3,615,636*2 Pledged assets
Assets in the following amounts were pledged as collateral.
(Unit: thousands of yen)

Investment securities

FY 2010

FY 2011(As of March 31, 2011)
1,497,179(As of March 31, 2012)—

In the previous consolidated fiscal year, “investment securities” were deposited as security deposits
based on Article 14, Paragraph 1 of the Act on Settlement of Funds.
(Consolidated Statement of Income Related)*1 In the breakdown of cost of sales and selling, general and administrative expenses, the following werethe main items and amounts.
(Unit: thousands of yen)

Executive compensation
Salaries and allowances
Provision of allowance for bonuses
Retirement benefit expenses
Commission paid
Advertising expenses
Provision of allowance for doubtful accounts
Amortization of goodwill

FY 2010

FY 2011(As of March 31, 2011)
216,035
1,059,329
56,562
27,065
4,135,015
1,056,457
32,6981,017,611(As of March 31, 2012)
168,092
744,345
54,34827,674
1,847,227
573,009
23,950196,646*2 The following were the total amount of research and development costs included in general andadministrative expenses and in current term manufacturing costs.
(Unit: thousands of yen)

FY 2010

FY 2011(As of March 31, 2011)37,264(As of March 31, 2012)
39,675*3 The details of gains on the disposal of fixed assets were as follows.
(Unit: thousands of yen)

Machinery and delivery equipment

FY 2010

FY 2011(As of March 31, 2011)
1,061(As of March 31, 2012)—*4 The details of losses on the disposal of fixed assets were as follows.
(Unit: thousands of yen)

Buildings and structures
Tools, devices and equipment
22

FY 2010

FY 2011(As of March 31, 2011)
38
9,032

(As of March 31, 2012)
2,259
1,046

5,473
14,543

SoftwareTotal

20,18323,489*5 Impairment losses
The Faith Group recorded impairment losses concerning the following asset groups.
Previous consolidated fiscal year (FY 2010 ending March 31, 2011)
Location
Intended purpose
Type
Minato Ward, Tokyo
Site operating asset
SoftwareIn the impairment loss calculation, the Faith Group conducts capital grouping in the smallest
possible units that generate a cash flow that is mostly independent of other assets or asset group cash
flows. In consideration of prospective future earnings and future cash flow, the book value of site
operation-use assets is recorded as an impairment loss of ¥34,295 thousand. Moreover, in thecalculation of recoverable value, the impairment loss is measured while making the utility value
zero.
Current consolidated fiscal year (FY 2011 ending March 31, 2012)
Location
Intended purpose
Kyoto City, Kyoto
Point management system
SoftwareType

In the impairment loss calculation, the Faith Group conducts capital grouping in the smallest
possible units that generate a cash flow that is mostly independent of other assets or asset group cash
flows. For the current consolidated fiscal year, in consideration of prospective future earnings andfuture cash flow, the book value of the point management-use system is recorded as an impairment
loss of ¥45,598 thousand. Moreover, in the calculation of recoverable value, the impairment loss ismeasured while making the utility value zero.
*6 The term-end inventory amount is the amount remaining after a book value write-down inaccordance with a decline in earnings. The following inventory asset appraised losses were inincluded in the cost of sales.
(Unit: thousands of yen)

FY 2010

FY 2011(As of March 31, 2011)
42,724(As of March 31, 2012)—(Consolidated Statement of Comprehensive Income Related)
Current consolidated fiscal year (FY 2011 ending March 31, 2012)*Reclassification adjustment amount and tax effect amount of other comprehensive income
Valuation differences on other available-for-sale securities:(Unit: thousands of yen)Amount accrued in the current term
Reclassification adjustment amount
Before tax effect adjustment
Tax effect amount
Total valuation difference on other available-for-sale securities△73,754△23,985△97,739

57,047△40,691

Share of comprehensive income of equity method affiliates:(Unit: thousands of yen)Amount accrued in the current term
Total other comprehensive income

186,227
145,535

23

(Consolidated Statements of Changes in Net Assets Related)
Previous consolidated fiscal year (FY 2010 ending March 31, 2011)
1. Matters Related to Class and Total Numbers of Shares Issued and Shares of Treasury Stock
Start of current
consolidated fiscal
year

Increase during
current consolidated
fiscal year

Decrease during
current consolidated
fiscal year

1,196,000
1,196,000

—
—

—
—

1,196,000
1,196,000

47,950——47,95047,950——47,950

Number of shares issued
Common stock
Total
Treasury shares
Common stock
Total

End of current
consolidated fiscal
year

2. Matters Related to Equity Warrants
Not applicable
3. Matters Related to Dividend Distribution(1) Amounts of dividends paid
(Resolution)

Class of shares
Common stock

Total amount of dividends(million yen)
57,402

Dividend pershare (yen)50

Board of Directors’
meeting held on
June 29, 2010
Board of Directors’
meeting held on
November 10, 2010

Common stock

57,40250

Record date

Effective date

March 31, 2010

June 30, 2010

September 30,
2010

December 10,
2010(2) Of dividends whose record date belongs to the current consolidated fiscal year, those whose
effective date of dividend falls on the following consolidated fiscal year
(Resolution)

Class of shares

Board of Directors’
meeting held on
June 29, 2011

Common stock

Total amount ofdividends(million yen)
57,402

Source offunds fordividends
Retainedearnings

Dividend
per share(yen)
50

Record date

Effective date

March 31, 2011

June 30, 2011

Current consolidated fiscal year (FY 2011 ending March 31, 2012)
1. Matters Related to Class and Total Numbers of Shares Issued and Shares of Treasury Stock
Start of current
consolidated fiscal
year

Increase during
current consolidated
fiscal year

Decrease during
current consolidated
fiscal year

1,196,000
1,196,000

—
—

—
—

1,196,000
1,196,000

47,95047,950————47,95047,950

Number of shares issued
Common stock
Total
Treasury shares
Common stock
Total

End of current
consolidated fiscal
year

2. Matters Related to Equity Warrants
Not applicable
3. Matters Related to Dividend Distribution(1) Amounts of dividends paid
(Resolution)

Class of shares
Common stock

Total amount of dividends(million yen)
57,402

Dividend pershare (yen)50

Board of Directors’
meeting held on
June 29, 2011
Board of Directors’
meeting held on
November 10, 2011

Common stock

57,40250

24

Record date

Effective date

March 31, 2011

June 30, 2011

September 30,
2011

December 10,
2011(2) Of dividends whose record date belongs to the current consolidated fiscal year, those whose
effective date of dividend falls on the following consolidated fiscal year
(Resolution)

Class of shares

Board of Directors’
meeting held on
June 28, 2012

Common stock

Total amount ofdividends(million yen)
57,402

Source offunds fordividends
Retainedearnings

Dividend
per share(yen)
50

Record date

Effective date

March 31, 2012

June 29, 2012

(Consolidated Statement of Cash Flows Related)*1 The relation of the end-of-term balance of cash and cash equivalents and the amounts of the items
listed on the Consolidated Balance Sheet(Unit: thousands of yen)

Cash and deposit accounts
Securities accounts
Term deposits with deposit terms of over 3 months
Securities other than cash equivalents
Cash and cash equivalents

FY 2010

FY 2011(As of March 31, 2011)
12,001,893
339,676△1,920,000△99,968
10,321,601(As of March 31, 2012)
13,712,005
239,790△4,990,000—
8,961,796*2 Breakdown of main assets and liabilities of companies that are no longer consolidated subsidiaries ofthe faith Group as a result of the sale of their shares during the current consolidated fiscal year
The following is a breakdown of the assets and liabilities of WebMoney Corporation at the time ofits sale, as a result of which it ceased to be a consolidated subsidiary of the Faith Group, the salevalue of the company’s shares, and the profit generated by the sale.
(Unit: thousands of yen)

Current assets
Fixed assets
Goodwill
Current liabilities
Minority interests
Unrealized profit adjustments
Profit from sales of stocks
Sale charges
Sale value of shares in WebMoney Corporation
Value of WebMoney Corporation’ cash and cash equivalents
Deduction: Income from the sale

17,842,694
3,247,749
188,116△17,815,860△1,761,715△5,492
6,892,538
207,943
8,795,973△8,381,318
414,654(Segment Information, etc.)
a. Segment Information
1. Outline of reportable segments
The Company’s reportable segments provide separate financial information among its various
structural units and also serve as objects of study when the Board of Directors periodically decide on
the allocation of business resources and make performance appraisals.
The Faith Group conducts services centered on developing the contents business, which provide
one-stop contents encompassing everything from planning and production of contents to design andconstruction of platforms and delivering these things to users, and the electronic money business,
which provides electronic settlement systems. Accordingly, the Faith Group categorizes the contentsbusiness and the electronic money business as its two reportable segments.
The contents business involves contents delivery, delivery platform technology development,
contents production, etc.
The electronic money business involves issuing and sales of electronic money, provision ofelectronic money settlement systems, etc.
In addition, in line with the sale in July 2011 of the Company’s entire shareholding in WebMoney
Corporation, which is engaged in the electronic money business, the company in question is nolonger a consolidated subsidiary of the Faith Group.
25

2. Calculation method for sales, profit or loss, assets, liabilities and other items by reportable segment
The accounting method for reportable business segments is largely the same as the method for
preparing consolidated financial statements.
For profit of reportable segments, the operating profit base figure is used. Inter-segment sales andtransfer amounts are decided in consideration of the market price and other factors.
3. Information on sales, profit or loss, assets, liabilities and other items by reportable segment
Previous consolidated fiscal year (FY 2010 ending March 31, 2011)
Reportable segment
Contents
Electronic
money

Sales
Sales to externalcustomers
Inter-segment sales ortransfer amount
Total
Segment profit
Segment assets
Other items
Depreciation expenses
Amortization of goodwill
Investment inequity-method affiliates
Increase in tangible andintangible fixed assets

Total

Total

Other
Businesses(Note 1)

(Unit: thousands of yen)
Adjustment
Amountamountrecorded in(Note 2)
Consolidated
Financial
Statements(Note 3)

7,395,224

75,165,842

82,561,067

1,630,223

84,191,290—

84,191,290

227,6542,400

280,054—

280,054△280,054—

7,672,879
647,190
15,208,443

75,168,242
1,298,726
18,161,901

82,841,121
1,945,971
33,370,345

1,630,223
187,376
558,986

84,471,344
2,133,293
33,929,331△280,054△3,531△1,202,627

84,191,290
2,129,762
32,726,703

236,578
936,373
3,465,594

45,014
81,238—281,593
1,017,611
3,465,594

10,522——

292,115
1,017,611
3,465,594△1,328——

290,786
1,017,611
3,465,594

319,954

32,975352,929

1,638

354,567—

354,567

Note 1. The “Other items” division includes business segments not included in the reportable segments,
such as the point service provision business, etc.
Note 2. The segment profit adjustment amount of △3,531 thousand yen and the depreciation expenses
adjustment amount of △1,328 for this consolidated fiscal year are calculated by eliminatingintersegment transactions.
Note 3. Segment profit is adjusted with operating profit in the consolidated financial statements.

Current consolidated fiscal year (FY 2011 ending March 31, 2012)
Reportable segment
Contents
Electronic
money

Sales
Sales to externalcustomers
Inter-segment sales ortransfer amount
Total
Segment profit
Segment assets
Other items
Depreciation expenses
Amortization of goodwill
Investment inequity-method affiliates
Increase in tangible andintangible fixed assets

Total

Total

Other
Businesses(Note 1)

(Unit: thousands of yen)
Adjustment
Amountamountrecorded in(Note 2)
Consolidated
Financial
Statements(Note 3)

6,327,121

25,717,225

32,089,347

1,326,642

33,415,989—

33,415,989

60,948400

61,348—61,348△61,348—

6,433,070
990,493
23,270,446

25,717,625
430,774—

32,150,695
1,421,267
23,270,446

1,326,642
151,979
295,576

33,477,337
1,573,247
23,566,022△61,348
3,194△47,122

33,415,989
1,576,442
23,518,900

278,678
176,337
3,615,142

12,137
20,309—290,815
196,646
3,615,142

19,359——310,174
196,646
3,615,142△2,594——

307,580
196,646
3,615,142

523,538

23,599547,138—

547,138—

547,138

Note 1. The “Other items” division includes business segments not included in the reportable segments,
such as the point service provision business, etc.
Note 2. The segment profit adjustment amount of △61,348 thousand yen and the depreciation expenses
adjustment amount of △2,594 for this consolidated fiscal year are calculated by eliminatingintersegment transactions.
Note 3. Segment profit is adjusted with operating profit in the consolidated financial statements.
26

b. Related Information
I. Previous consolidated fiscal year (FY 2010 ending March 31, 2011)
1. Information by product and service
Information by product and service is omitted because similar information is disclosed in thesegment information.
2. Information by region(1) Sales: Information on sales by region is omitted because the amount of sales to external customers inJapan 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 amountof 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(Unit: thousands of yen)

Customer nameT-Gaia Corporation
Famina.com Co., Ltd.
Wellnet Corporation

Sales amount38,678,431
16,618,643
11,741,914

Related segment nameElectronic money businessElectronic money businessElectronic money business

II. Current consolidated fiscal year (FY 2011 ending March 31, 2012)
1. Information by product and service
Information by product and service is omitted because similar information is disclosed in thesegment information.
2. Information by region(1) Sales: Information on sales by region is omitted because the amount of sales to external customers inJapan 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 amountof 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(Unit: thousands of yen)

Customer nameT-Gaia Corporation
Famina.com Co., Ltd.
Wellnet Corporation

Sales amount
13,689,100
5,724,979
4,018,117

Related segment nameElectronic money businessElectronic money businessElectronic money businessc. Information on Impairment Losses on Fixed Assets by Reportable Segment
Previous consolidated fiscal year (FY 2010 ending March 31, 2011)(Unit: thousands of yen)Contents
Impairment
loss

34,295

Electronicmoney—

Others—

Total

Company-wide/elimination

34,295—

Total
34,295Current consolidated fiscal year (FY 2011 ending March 31, 2012)(Unit: thousands of yen)Contents
Impairment
loss—

Electronicmoney—

OthersTotal

54,64727

54,647Company-wide/elimination△9,049Total
45,598

d. Information on Amortization of Goodwill and Unamortized Balance for Each Reportable Segment
Previous consolidated fiscal year (FY 2010 ending March 31, 2011)(Unit: thousands of yen)Contents
Current term
amortization
Year-endbalance

Others936,373

Electronicmoney
81,238

Total

Company-wide/elimination

Total

—

1,017,611—

1,017,611

226,936

208,426—

435,363—435,363

Current consolidated fiscal year (FY 2011 ending March 31, 2012)(Unit: thousands of yen)Contents
Current term
amortization
Year-endbalance

Others176,337

Electronicmoney
20,309Total

Company-wide/elimination

Total

—

196,646—

196,646

40,599——40,599—40,599e. Information on Gains on Negative Goodwill by Reportable Segment
Previous consolidated fiscal year (FY 2010 ending March 31, 2011)
Not applicable
Current consolidated fiscal year (FY 2011 ending March 31, 2012)
Not applicable(Per Share Information)(Unit: yen)Previous consolidated fiscal year
(FY 2010 ending March 31, 2011)
Net assets per share
11,234.27
Net income per share
1,029.46
Net income per share fully diluted
1,019.26

Current consolidated fiscal year
(FY 2011 ending March 31, 2012)
Net assets per share
17,066.74
Net income per share
5,805.70
Net income per share fully diluted
5,803.03(Note 1) The basis of the calculation of net income per share and net income for share fully diluted is asfollows.
Previous consolidated fiscal year
(FY 2010 ending March 31, 2011)

Current consolidated fiscal year
(FY 2011 ending March 31, 2012)

1,181,870—

6,665,231—

1,181,070

6,665,231

1,148,050

1,148,050△11,708(△11,708)△3,065(△3,065

Net income per share
Net income (thousand yen)Amount not attributable toordinary shareholders (thousand yen)
Net income applicable tocommon stock (thousand yen)
Average number of shares
outstanding during the period(shares)

Net income per share fully diluted(thousand yen)

Net income adjustment amount(Adjustment amount of diluted
shares in consolidated subsidiaries)
Increase in common stock (shares)
Summary of dilutive potential
shares that are not included in thecalculation of net income per shareafter adjustment of dilutive
potential shares because of no
dilution effect———————

28———————

(Note 2) The basis of the calculation of net assets per share is as follows.

Total amount of net assets (thousand

Previous consolidated fiscal year
(FY 2010 ending March 31, 2011)
14,544,625

Current consolidated fiscal year
(FY 2011 ending March 31, 2012)
19,618,905

1,647,118

25,435(1,647,118)
12,897,507(25,435)
19,593,469

1,148,050

1,148,050

yen) (thousand yen)Amount deducted from total
amount of net assets (thousand yen)
(Minority interests)
Year-end net assets applicable tocommon stock (thousand yen)
Term-end number of shares ofcommon stock used in calculating
net assets per share (shares)(Significant Subsequent Events)
Not applicable(Omission of Disclosure)
No notes are presented concerning information on lease transactions, financial instruments, marketablesecurities, derivative transactions, retirement benefits, stock options, etc., tax effective accounting,rental property and related parties because their amounts are considered too small and insignificant for
presentation in the Brief Statement of Financial Results.

29

5. Non-Consolidated Financial Statements(1) Balance Sheet(Unit: thousands of yen)

(Assets)
Current assets
Cash and deposits
Notes receivable - trade
Accounts receivable - tradeMarketable securities
Commercial products
Advance payments
Prepaid expenses
Short-term loans receivable
Notes receivable - otherConsumption taxes receivable
Deferred tax assets
OthersAllowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings
Depreciation amount
Buildings (net base)
Structures
Depreciation amount
Structures (net base)Motor vehicles and transport equipment
Depreciation amountMotor vehicles and transport equipment (net base)Tools, devices and equipment
Depreciation amountTools, devices and equipment (net base)Land
Total tangible fixed assets
Intangible fixed assets
Goodwill
Trademarks
SoftwareTelephone subscription rights
OthersTotal intangible fixed assets

30

FY2010FY 2011(As of March 31, 2011)(As of March 31, 2012)

2,820,697—
510,921339,676932
106,956
51,445200,000
162,765—
278,781
7,336△26,904
4,452,608

11,268,109
1,207
365,405
239,790
1,987
96
60,670—158,792
16,764
24,662
18,501△22,402
12,133,585

1,336,736△92,852
1,243,884
1,429△1,146283
22,895△13,482
9,412
649,345△567,669
81,6751,500,895
2,836,150

1,510,722△168,400
1,342,322
1,429△1,186
243
22,895△17,330
5,564
794,816△642,490
152,326
1,500,895
3,001,351

44,5635,366
130,935
1,224
18,839200,930

33,8682,566
171,244
1,224
35,583
244,487

(Unit: thousands of yen)

Investment and other assets
Investment securities
Shares in affiliates
Long-term prepaid expenses
Security deposits
OthersAllowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets(Liabilities)
Current liabilities
Accounts payable -trade
Short-term loans
Accounts payable - otherAccrued expenses payable
Income taxes payable
Consumption taxes payable
Advances received
Deposits received
Deferred income
Allowance for bonus payments
Total current liabilities
Fixed liabilities
Long-term debt
Deferred tax liabilities
Allowance for retirement benefits
Provision for loss of subsidiaries and affiliates
OthersTotal fixed liabilities
Total liabilities(Net assets)
Shareholder's equity
Common stock
Capital surplus
Capital surplus reserve
Total capital surplus

31

FY2010FY 2011(As of March 31, 2011)(As of March 31, 2012)

949,620
7,813,284
37,62542,77534,830△29,778
8,848,357
11,885,438
16,338,047

845,398
6,916,705
14,831
55,5278,142△07,840,605
11,086,444
23,220,209

239,753
399,984
298,595
45,161
12,29831,63576,38727,304
10,02456,725
1,197,871

168,712399,984
335,609
12,906
1,412,222—
10,67920,333589
53,252
2,414,290

1,133,368
183,204
68,523
106,847
5,498
1,497,440
2,695,311

733,384
126,157
82,666—
5,363
947,570
3,361,860

3,218,000

3,218,000

3,708,355
3,708,355

3,708,355
3,708,355

(Unit: thousands of yen)

Retained earnings
Earned surplus reserve
Other retained earnings
General reserve
Retained earnings carried forward
Total retained earnings
Treasury stock
Total shareholder's equity
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Total valuation and translation adjustments
Total net assets
Total liability and net assets

32

FY2010FY 2011(As of March 31, 2011)(As of March 31, 2012)

1,500

1,500

4,500,000
2,597,997
7,099,497△651,377
13,374,475

4,500,000
8,852,876
13,354,376△651,377
19,629,353

268,260
268,260
13,642,735
16,338,047

228,815
228,815
19,858,168
23,220,029

(2) Statement of Income(Unit: thousands of yen)

Net sales
Cost of Sales
Gross profit
Selling, general and administrative expenses
Executive compensation
Salaries and allowances
Bonuses
Provision of allowance for bonuses
Retirement benefit expenses
Welfare expenses
Travel and transportation expenses
Communication expenses
Entertainment expenses
Depreciation expenses
Rental expenses
Supplies expenses
Taxes and dues
Commission paid
Advertising expenses
Provision of allowance for doubtful accounts
OthersTotal selling, general and administrative expenses
Operating profit
Non-operating profit
Interest income
Dividend income
Interest on securities
Commission received
Miscellaneous receipts
Total non-operating profit
Non-operating expenses
Interest paid
Exchange losses
Investment partnership losses
Provision of allowance for doubtful accounts
Miscellaneous expenses
Total non-operating expenses
Recurring profit

33

FY 2010

FY 2011(As of March 31, 2011)
4,531,001
2,470,825
2,060,175(As of March 31, 2012)
3,755,152
2,091,717
1,663,435

131,350
404,008
83,86035,495
11,96392,73240,40624,181
29,53976,54375,595
18,241
37,571
175,743
387,625
3,720
78,311
1,706,890
353,285

135,290364,206
64,31834,034
18,86778,06339,03624,98024,089145,799
47,40440,93096,444
226,291
252,747△4,442
71,8191,659,881
3,554

7,873
4,246
30,771
5,212
2,933
51,03723,362
2,799
31,8898,088
4,041
70,18021,04738,424
1,344
30,018—90,834313,487

15,968
1,911
5,000
—
2
22,88250,852Extraordinary profit
Gain on disposal of fixed assets
Gain on disposal of investment securities
Gain on sale of shares of affiliated company
Reversal of allowance for doubtful accounts of affiliatedcompany
Gain on liquidation of affiliated company
OthersTotal extraordinary profit
Extraordinary losses
Loss on disposal of fixed assets
Loss on valuation of investment securities
Loss on sale of shares of affiliated company
Financial impact of adopting the accounting standard for
asset retirement obligations
OthersTotal extraordinary losses
Net income before income taxes
Corporate, local, and business taxes
Income taxes - deferred
Total corporate, local, and business taxes
Net profit for the current fiscal year

34

1,061
11,9792,528—
28,795
7,742,824

184,717106,847

5,787—
206,074—
76,665
7,995,131

13,925
14,191
77,258

8,377
936
1,370

7,809

—

37
113,222406,339
5,168△33,834△28,665
435,004—
10,685
7,995,299
1,371,496
254,119
1,625,615
6,369,683

(3) Statement of Changes in Net Assets(Unit: thousands of yen)

Shareholders' equity
Common stock
Balance at the start of the accounting period
Changes of items during the accounting period
Total changes of items during the accounting period
Balance at the end of the accounting period
Capital surplus
Capital surplus reserve
Balance at the start of the accounting period
Changes of items during the accounting period
Total changes of items during the accounting period
Balance at the end of the accounting period
Total capital surplus
Balance at the start of the accounting period
Changes of items during the accounting period
Total changes of items during the accounting period
Balance at the end of the accounting period
Retained earnings
Retained earnings reserve
Balance at the start of the accounting period
Changes of items during the accounting period
Total changes of items during the accounting period
Balance at the end of the accounting period
Other retained earnings
Special reserve fund
Balance at the start of the accounting period
Changes of items during the accounting period
Total changes of items during the accounting period
Balance at the end of the accounting period
Retained earnings carried forward
Balance at the start of the accounting period
Changes of items during the accounting period
Payment of dividends of surplus
Current net earnings
Total changes of items during the accounting period
Balance at the end of the accounting period
Total retained earnings carried forward
Balance at the start of the accounting period
Changes of items during the accounting period
Payment of dividends of surplus
Current net earnings
Total changes of items during the accounting period
Balance at the end of the accounting period

35

FY2010(As of March 31, 2011)

FY2011(As of March 31, 2012)

3,218,000

3,218,000—
3,218,000—
3,218,000

3,708,355

3,708,355—
3,708,355—
3,708,355

3,708,355

3,708,355—
3,708,355—
3,708,355

1,500

1,500

—
1,500

—
1,500

4,500,000

4,500,000—
4,500,000—
4,500,000

2,277,797

2,597,997△114,805
435,004
320,1992,597,997△114,805
6,369,683
6,254,878
8,852,876

6,779,297

7,099,497△114,805
435,004
320,199
7,099,497△114,805
6,369,683
6,254,878
13,354,376

(Unit: thousands of yen)

Treasury stock
Balance at the start of the accounting period
Changes of items during the accounting period
Total changes of items during the accounting period
Balance at the end of the accounting period
Total shareholders' equity
Balance at the start of the accounting period
Changes of items during the accounting period
Cash dividend paid
Net gain or loss
Total changes of items during the accounting period
Balance at the end of the accounting period
Valuation and translation adjustments
Valuation difference on other available-for-sale securities
Balance at the start of the accounting period
Changes of items during the accounting period
Net changes of items other than shareholders' equity
Total changes of items during the accounting period
Balance at the end of the accounting period
Total valuation and translation adjustments
Balance at the start of the accounting period
Changes of items during the accounting period
Net changes of items other than shareholders' equity
Total changes of items during the accounting period
Balance at the end of the accounting period
Total net assets
Balance at the start of the accounting period
Changes of items during the accounting period
Cash dividend paid
Net gain or loss
Net changes of items other than shareholders' equity
Total changes of items during the accounting period
Balance at the end of the accounting period

36

FY2010(As of March 31, 2011)

FY2011(As of March 31, 2012)△651,377△651,377—△651,377—△651,377

13,054,275

13,374,475△114,805
435,004
320,199
13,374,475△114,805
6,369,683
6,254,878
19,629,353

292,439

268,260△24,178△24,178
268,260△39,444△39,444
228,815△292,439

268,260△24,178△24,178
268,260△39,444△39,444
228,815

13,346,714

13,642,735△114,805
435,004△24,178
296,020
13,642,735△114,805
6,369,683△39,444
6,215,433
19,858,168

(4) Notes Concerning the Premise of a Going Concern
Not applicable37