STATEMENT OF ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED
MARCH 2015 AND FORECASTS FOR THE YEAR ENDING MARCH 2016
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 15, 2015
Faith, Inc. (Stock code 4295, Listed on TSE 1st section)(URL http://www.faith.co.jp/)
Representative; Hajime Hirasawa, President and CEO,Contact; Jiro Saeki, Director and CFO Tel: +81-03-5464-7633
Date of General Meeting of Shareholders: June 26, 2015
Date of Submission of Annual Security Report: June 29, 2015
Starting Date of the Dividend Payment: June 29, 2015
Preparation of Supplementary Materials for Financial Results: Applicable
Information Meeting for 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 2015 (From April 1, 2014 to March 31, 2015)(1) Consolidated Operating Results(Percentages indicate changes compared with the previous fiscal year.)

Net SalesYear ending
March 2015
March 2014

Operating Income

Millions of yen

%
209.1

19,597
6,340

Millions of yen

△891
508

△5.8

Ordinary Income
Millions of yen

%
—

862
586

△49.8

Net Income%—

Millions of yen

3,340
403

△47.6

%
—
△63.7

(Note) Comprehensive income: fiscal year ending March 2015: ¥3,981 million (—%); fiscal year ending March 2015: ¥357 million (△68.9%)

Net Income per
Share

Year ending
March 2015
March 2014

Diluted Net
Income per Share

Return on Equity
CapitalOrdinary Incomeon Total Assets

Operating Income
on Net Sales

Yen
—
—

%
△17.7
2.0

%
△3.1
2.2

%
△4.6
8.0

Yen
△295.46
35.44(Reference) Equity in earnings of associated companies: fiscal year ending March 2015: ¥56 million/fiscal year ending March 2014: ¥15
million(Note)
With effect from October 1, 2013, the Company carried out a stock split of its common shares at a ratio of 10 shares per share.
For this reason, the net income per share is calculated under the supposition that the stock split had taken place at the beginningof the previous consolidated fiscal year.

(2) Consolidated Financial Position
Total Assets

Year ending
March 2015
March 2014

Net Assets

Millions of yen

Millions of yen

25,83529,887

17,723
22,340

Ratio of Equity Capital

Net Assets per Share

%
65.5
69.6

Yen
1,540.23
1,825.44(Reference) Equity capital: fiscal year ending March 2015: ¥16,918 million; fiscal year ending March 2014: ¥20,792 million(3) Consolidated Cash Flow Results
Cash
Flow
from
Operating Activities

Year ending
March 2015
March 2014

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

9
1,715

△1,456
4,093

△634
△521

9,346
11,41512. Dividends
Dividends per Share
(Record dates)

Year ending
March 2014
March 2015
March 2016
(Forecast)(Note)

1st
Quarter
Yen

InterimYear-end

Yen

3rd
Quarter
Yen

Yen

Total
(Annual)
Yen

―
―
―

50.00
5.00
5.00

―
―
―

5.00
5.00
5.00

—
10.00
10.00

Total Dividend
Payment

Payout Ratio

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

Millions of yen

%
28.2
—
73.2

113
113

%
0.6
0.6

With effect from October 1, 2013, the Company carried out a stock split of its common shares at a ratio of 10 shares per share.

3. Forecast for the Consolidated Results for the Year Ending March 2016
（from April 1，2015 to March 31，2016）(Percentages indicate changes compared with the previous fiscal year and the previous interim result.)

Net Sales

First
half
(cumulative)
Full year

Operating Income

Ordinary Income

Net Income

Net Income
per Share

Millions ofyen%Millionsof yen%Millionsof yen%Millionsof yen

%

Yen

9,000

△0.9

△100

—

△110

—

△185

—

△16.8420,000

2.1

400

—

380

—

150

—

13.66

※ 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.: Applicable(2)-2. Changes other than the above: None(2)-3. Changes in accounting estimates: None(2)-4. Restatements: None
* For details, please refer to “5. Consolidated Financial Statements, (5) A Notes Concerning the Consolidated Financial
Statements (Changes in Accounting Policy” on page 21 of the accompanying material.

(3) Outstanding shares (common shares)(3)-1. Outstanding shares at the end of the fiscal years (including treasury stock):
The fiscal year ending March 2015: 11,960,000 shares
The fiscal year ending March 2014: 11,960,000 shares(3)-2. Treasury stock at the end of the fiscal year:
The fiscal year ending March 2015: 975,480 shares
The fiscal year ending March 2014: 569,670 shares(3)-3. Average number of shares at the accounting period
The fiscal year ending March 2015: 11,305,901 shares
The fiscal year ending March 2014: 11,392,053 shares(Note) With effect from October 1, 2013, the Company carried out a stock split of its common shares at a ratio of 10 shares per share.
For this reason, the numbers of shares listed above are calculated under the supposition that the stock split had taken place atthe beginning of the previous consolidated fiscal year.

2

(Reference) Overview of Non-Consolidated Results
Results for the Fiscal Year Ending March 2015 (From April 1, 2014 to March 31, 2015)(1) Non-Consolidated Operating Results(Percentages indicate changes compared with the previous fiscal year.)

Net SalesYear ending
March 2015

Millions of yen

March 2014

2,622

2,433

Operating Income
%

%

△586

—

△335

—

△7.2
△17.7

Net Income per ShareYear ending
March 2015
March 2014

Ordinary Income

Millions of yen

Net Income

Millions of yen%

Millions of yen

%

△444

—

△3,022

—

△223

—

△466

—

Diluted Net Income per
Share

Yen
△267.35△40.91

Yen——(Note) With effect from October 1, 2013, the Company carried out a stock split of its common shares at a ratio of 10 shares per share. For
this reason, the net income per share is calculated under the supposition that the stock split had taken place at the beginning of theprevious business fiscal year.

(2) Non-Consolidated Financial Position
Total Assets

Year ending
March 2015
March 2014
(Reference)

Net Assets

Ratio of Equity
CapitalNet Assets per Share

Millions of yen

Millions of yen%

Yen

15,88919,985

15,272
18,92196.1
94.7

1,390.38
1,661.22

Equity capital: fiscal year ending March 2015: ¥15,272 million; fiscal year ending March 2014: ¥18,921 million* Indication of auditing procedures implementation status
This financial results report is exempt from 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 notbeen 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 to 1. Analysis of Operating Results and Financial Position, (1) Analysis of Operating
Results on page 2 of the accompanying material.
(To obtain supplemental documents relating to financial results)
Supplemental Materials for Financial Results were posted on the company website on May 22, 2015.

3

Accompanying Material Contents
1. Analysis of Operating Results and Financial Position………………………………………………… 2(1) Analysis of Operating Results…………………………………………………………………… 2(2) Analysis of Financial Position…………………………………………………………………… 4(3) Basic Policy on Profit Allocation and Current Term/Next Term Dividend Distribution………… 5
2. Overview of the Faith Group…………………………………………………………….…………. 5
3. Management Policies ………………………………………………………………………………… 7(1) The Faith Group’s Basic Management Policy…………………………………………………… 7(2) Medium- and Long-Term Business Strategy………………………………………….…………. 7(3) Challenges the Company Should Address ……………………………………………………… 7
4. Basic Philosophy on Selection of Accounting Standards…………………………………………… 8
5. Consolidated Financial Statements…………………………………………………………………… 9(1) Consolidated Balance Sheet…………………………………………………………………..... 9(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income … 11
(Consolidated Statement of Income) …………………………………………………………… 11(Consolidated Statement of Comprehensive Income) ………………………………………… 12(3) Consolidated Statement of Changes in Shareholders’ Equity………………………………… 13(4) Consolidated Statement of Cash Flows………………………………………………………
15(5) Notes Concerning the Consolidated Financial Statements……………………………………… 17(Notes Concerning the Premise of a Going Concern)……………………………………………… 17(Significant Matters That Constitute the Basis for Preparation of the Consolidated Financial
Statements)………….………….………….………….………….………….………….………… 17(Accounting Standards Issued But Not Yet Applied……………………………………………… 20(Changes in Accounting Policy).………….………….………….………….………….………… 20(Changes in Presentation Methods)……………………………………………………………… 20(Additional Information)………………………………………………………………………… 20(Consolidated Balance Sheet Related) …………………………………………………………… 21(Consolidated Statement of Income Related)……………………………………………………… 21(Consolidated Statement of Comprehensive Income Related) …………………………………… 23(Consolidated Statement of Changes in Shareholders’ Equity Related)…………………………… 23(Consolidated Statement of Cash Flows Related) ………………………………………………… 25(Business Combination Related) ………………………………………………………………… 25(Segment Information, etc.) ……………………………………………………………………… 26(Per Share Information)…………………………………………………………………………… 28(Significant Subsequent Events) ………………………………………………………………… 29(Omission of Disclosure) …………………………………………………………………………… 29

1

1. Analysis of Operating Results and Financial Position(1) Analysis of Operating Results
In 2014, as high-performance mobile devices such as smartphones and tablets are beoaming
increasingly widespread throughout the world in keeping with the development of the Internet
infrastructure, in the Japanese domestic information communication field, the ratio of smartphone
contracts among contracts for all mobile phone devices exceeded 50% for the first time (*1). Moreover,the smartphone popularization trend is forecast to continue in future in line with the launch of a wide
range of more affordable models and service plans such as MVNO.
In accordance with the rapid popularization of smartphones and tablet devices and the continuing
progress of mobile device performance and communication infrastructure development, in the music
contents market, the market environment and distribution structure are witnessing a steady shift from
CDs to digital distribution, from PCs to mobile devices, and from downloading to streaming. On a
global basis, 2014 marked the first time that the annual sales volume of digitally distributed music titles
exceeded that of conventional software such as CDs and vinyl discs. Also, services such as streaming,
where music is reproduced through the reception of a constant stream of data, and subscription, whichmakes available unlimited music listening for a fixed monthly payment, have expanded significantly(*2). Under these circumstances, the live performance business, live streaming (which sends out live
performance data in realtime), and copyright management in line with the ongoing diversification ofcontact points between music and listeners are all fields of growth that are attracting interest.
The Japanese music contents market is lagging behind in terms of achieving progress into new fields ofgrowth. But it is expected that the shift in services toward the era of digitalization will accelerate in
future, and that the development of services that meet the needs of the changing environment willrapidly become increasingly important.
(*1) From the Ministry of Internal Affairs and Communications’ 2014 Information and Telecommunications White Paper(*2) From the International Federation of Phonogram and Videogram Producers’ (IFPI) Digital Music Report 2015

In this environment, the Faith Group is continuing to forge ahead with its “Multi-Content andMulti-Platform Strategy of creating an environment that allows people to enjoy a wide diversity ofcontents whenever and wherever they choose”, and is working to develop new services in response to
the changing market environment such as the development of platforms that collect and organize theinformation flooding the Internet and then provide this to users after increasing its added value. In themusic business, by making use of our group business synergies, we have taken an early initiative andmaintained a focus on constructing platforms for music services and developing the music distribution
business including subscription services.
Regarding the business performance of the Faith Group for the fiscal year ending March 2015, althoughsales of smartphone-use services expanded strongly, distribution services for feature phone use—theGroup’s largest sales category—declined, while sales of high-profit-margin package products launchedin previous years by Nippon Columbia Co., Ltd.—whose performance as a consolidated subsidiary is
included in the Group’s financial results from the beginning of the consolidated fiscal year underreview—also declined sharply year on year. With the inclusion of the sales and operating losses of theColumbia Business segment in its operating results for the first time, the Faith Group’s net sales for the
fiscal year ending March 2015 increased by 209.1% compared with the previous fiscal year to ¥19,597
million while the Group recorded an operating loss of ¥891 million (compared with an operating
income of ¥508 million for the previous fiscal year), and an ordinary loss of ¥862 million (comparedwith an ordinary income of ¥586 million for the previous fiscal year).
Also, the Group recorded extraordinary losses in respect of impairment losses on goodwill of ¥2,062
million as the return to profitability of several subsidiaries are taking longer than planned at the time of
their acquisition, and organizational reform-related losses of ¥434 million on the sales and operating
losses of Nippon Columbia Co., Ltd. As a result, the Group posted a net loss for the fiscal year underreview of ¥3,340 million (compared with a net income of ¥403 million for the previous fiscal year).
Information on each business segment is as follows.
2

Content BusinessIn the Content Business, the Faith Group is actively promoting new product development in response to
the market environment including the ongoing popularization of the smartphone, changing lifestyles.
We are also linking different services and installing them onto platforms with a view to obtaining
diversified earnings, performing validation of the results of service contents and marketability includingof our existing businesses, and promoting measures aimed at increasing added value such as improving
functions and combining services. These efforts are not limited to Japan but are also focused on
developing our business globally including in the Asian region where high rates of future growth are
expected. In this way, we are continuously striving to harness opportunities for new growth.
Moreover, from November 2014, we newly began sales of FaRao Pro, a store-use solution service forrestaurants and retailers, which is equipped with BGM functions as well as essential functions forin-store operations such as sales promotion. We are currently attempting to expand this service’s scaleof introduction with a focus on as-yet undeveloped small stores and shops in addition to chain stores by
providing customized channels to meet the demands of individual stores by means of an exclusive tablet
tuner that we introduced in March 2015. In future, in consideration of overseas development, we willcontinue to target the creation of new BGM markets both overseas and in Japan.
Fans™, a one-stop system that supports a full range of artist activities from fan club operation to salesof e-tickets for live performances , began full-scale operations in April 2015 as a music businessintegration platform that makes use of the Faith Group’s diverse music- and artist-related service
functions, and is currently working to expand its user base by adding functions necessary for exchanges
between artists and fans. For example, it is enhancing its functions in cooperation with Japan’s largest
social media service for band musicians “with9”, which began operating as part of the Faith Group inJune 2014.
Moreover, beginning with POP ICON PROJECT TOKYO, an artist cultivation and development effort,
we have begun using Fans as part of a global development effort to send out Japanese culture to thewider world through pop icons, such as a the girl vocal unit color-code, who made their major debut
from Nippon Columbia Co., Ltd. in September 2014.
In the educational communication field apart from music, Faith has released five titles beginning withthe child rearing app called BabySmile from the worldwide intellectual training application brand forpre-school children Kidzapplanet®, which was planned and developed by a father and mother teamwhile they were raising their own children. Child rearing services for smartphone users is a field forwhich there is a considerable need and national and local governments are also considering making useof these apps. Faith is planning to launch further new services in this field in future.
As a result of the above, the Group recorded net sales in the Content Business for the fiscal year ending
March 2015 of ¥4,550 million, an decrease of 9.1% compared with the previous fiscal year, in line withdeclining sales to feature phone users, despite actively making progress in developing new services inaccordance with changes in the market environment. Meanwhile, operating income decreased by 64.0%
year on year to ¥168 million in line with lower sales as well as increased costs in relation to starting up
new services.
Point Service BusinessIn the Point Service Business, there was an increase in the number of new points issued in line with theentry of new participating stores as well as with the Group’s active promotion of point sales. As a result,
this business recorded net sales of ¥2,454 million, an increase of 84.2% compared with the previous
fiscal year. However, despite a successful effort to hold down sales promotion expenses and generalmanagement expenses, due to an increase in temporary recalls of old points in accordance with thetransfer to server management-based operation, operating income for this business declined by 35.6%
year on year to ¥26 million.
Columbia Business
Amid the difficult environment facing the music and video-related industry in line with the continuing
contracting of the music market, the Columbia Business experienced an overall decline in sales of music3CDs, digital distribution titles, and products supplied to mail order companies. Declines in sales ofhigh-margin titles released in past years were a major factor in holding down profitability. As a result,
this business reported net sales of ¥12,591 million and an operating loss of ¥1,104 million for the fiscal
year under review. Against this backdrop, this business is currently proceeding with a series oforganizational reforms. Moreover, as the Columbia Business has been included in the Faith Group’sbusiness performance only since the start of the current fiscal year, no comparisons with the previous
fiscal year are given here.
*The product and service names appearing in this document are trademarks or registered trademarks of Faith Inc. either
in Japan or in other countries.

The Faith Group’s business performance forecasts for next consolidated fiscal year (FY 2015) are as
follows. Although the declining trend in sales of feature phones is continuing, in line with the expansionof new services in the Content Business and the effect on the Group’s performance of the inclusion of a
newly consolidated subsidiary, the Group is currently forecasting net sales of ¥20,000 million (up 2.1%
year-on-year). Regarding the profit and loss forecast, with the anticipated return to profitability of theColumbia Business following its structural reforms and of revenue from new services, the Group isforecasting an operating income of ¥400 million, a ordinary income of ¥380 million, and a net incomeof ¥150 million.
(Unit: millions of yen)

Net sales
Operating income
Ordinary income
Net income

FY2014 (Result)(a)
19,597△891△862△3,340FY2015 (Forecast)(b)
20,000400
380
150

Change(b) - (a)
402
1,291
1,242
3,490

(2) Analysis of Financial Position① Assets, Liabilities and Net Assets
Total assets as of the end of the consolidated fiscal year ended March 31, 2015 decreased by ¥4,052
million from the end of the previous consolidated fiscal year to ¥25,835 million. This result was mainly
due to decreases in goodwill in line with impairment losses, and decreases in cash and deposits, and innotes and accounts receivable.
Total liabilities increased by ¥564 million compared with the end of the previous consolidated fiscal
year to ¥8,111 million. This result was mainly due to an increase in long-term debt.
Net assets decreased by ¥4,617 million compared with the end of the previous consolidated fiscal yearto ¥17,723 million. This was mainly the result of a reduction in retained earnings due to the payment ofdividends, the recording of a net loss for the current fiscal year, the acquisition of treasury stock, etc.
Also, the Faith Group’s capital adequacy ratio decreased by 4.1 percentage points compared with theend of the previous consolidated fiscal year to 65.5%.
② Cash Flow
Cash and cash equivalents at the end of the consolidated fiscal year ended March 31, 2015 decreased by¥2,069 million (an 18.1% decrease) from the end of the previous consolidated fiscal year to ¥9,346
million.
Details of cash flow during this fiscal year and its main contributory factors were as follows:(Cash flow from operating activities)
Cash flow from operating activities amounted to an inflow of ¥9 million (a decrease of 99.4% comparedwith the previous consolidated fiscal year), due mainly to the addition of impairment losses on goodwillof ¥2,062 million, organizational reform-related losses of ¥434 million, depreciation expenses of ¥368
million, a decrease in notes and accounts receivable of ¥363 million, amortization of goodwill of ¥266
million, losses on the liquidation of an overseas business of 143 million, and impairment losses of ¥116
4

million to the Group’s net income before taxes and other adjustments of ¥3,701 million.
(Cash flow from investing activities)
Cash flow from investing activities amounted to an outflow of ¥1,456 million (compared with an inflowof ¥4,093 during the previous consolidated fiscal year), due mainly to the posting of ¥5,034 million in
expenditure in respect of opening new term deposits, and ¥373 million in expenditure to obtain software,
despite the posting of despite receiving ¥4,036 million in income in proceeds from withdrawals of
existing term deposits.
(Cash flow from financing activities)
Cash flow from financing activities amounted to an outflow of ¥634 million (an increase of 21.6%
compared with the previous consolidated fiscal year), due mainly to ¥501 million in expenditure in
respect of acquisition of treasury stock, ¥456 million in expenditure in respect of repayment oflong-term loans, ¥270 million in expenditure in respect of a net decrease of short-term loans repayable,and ¥114 million in respect of dividend payments, etc., despite receiving income of ¥1,000 million inproceeds from long-term loans payable.
(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 2012
90.9
53.6
△1.18
△90.4

FY 2013
69.6
40.2
0.65
336.0

FY 201465.5
55.2
137.080.8

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
stock.
(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 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. Overview of the Faith GroupThe Faith Group (the Company and its associated companies) consists of Faith, Inc. (the Company), 17
subsidiaries and 7 affiliates, and is engaged mainly in the Content Business, the Point Service Business,and the Columbia 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. In addition, the following business segments are thesame as the segments referred to in 5. Consolidated Financial Statements, (5) Notes Concerning the5Consolidated Financial Statements, (Segment Information, etc.). The Group changed its reportablesegment classification with effect from the previous fiscal year. The details are given in 5. Consolidated
Financial Statements, (5) Notes Concerning the Consolidated Financial Statements, (Segment
Information, etc.) on page 26.
(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 isconducted by Faith, Inc., Faith Wonderworks, Inc., and 15 other affiliates.
(2) Point Service Business
The Group is engaged in the Point Service Business, which is aimed at the retail industry. This businessis conducted by GoodyPoint Co., Ltd.
(3) Columbia Business
The Columbia Business encompasses the sound source, video, etc., planning, production and sales
business, the music rights acquisition and management business, the contracted production and sales
business, etc. The businesses in question are conducted by Nippon Columbia Co., Ltd., Columbia
Marketing Co., Ltd., Columbia Songs, Inc., Omagatoki Co., Ltd., C2 design Inc., and two otheraffiliated companies.
[Business System Diagram]
The following diagram shows the Faith Group’s business system as described above.

The FaithGroup(Faith Inc.
and its
group
companies)

Content BusinessJapan
The Company (Faith, Inc.)
Faith Wonderworks, Inc.
Rightsscale, Inc.
Future RECORDS, Inc.
ENTERMEDIA INC.
OK LIFE, Inc.
GLOBAL PLUS, INC.
Plus 1 other company*2. Japan Rights Clearance Inc.
*2. Lync-Entertainments*2. FlyingPenguins Inc.
*2, Plus 1 other company
Overseas*1. Rightsscale USA, Inc.
*1, *3. Plus 2 other companies

Content distribution service
provision==================>
Distribution platform
development
Content production services

Ourcustomers
and clients

Point service provision===================>

Point Service BusinessJapan
GoodyPoint Co., Ltd.
Columbia BusinessJapan
Nippon Columbia Co., Ltd.
Columbia Marketing Co., Ltd.
Columbia Songs, Inc.
Omagatoki Co., Ltd.
C2 design Inc.
Overseas
CME, Inc. (USA)
SLG, LLC. (USA)===================>
Production, advertising andsales of audio, video and gamesoftware, etc., and music artist
management(Notes) No mark: Consolidated subsidiaries*1:
Non-consolidated subsidiary to which the equity method is not applied*2:
Affiliates to which the equity method is applied*3:
Affiliates to which the equity method is not applied

6

3. Management Policies(1) The Faith Group's Basic Management Policy
The basic policy of Faith Group is to create mechanisms and services to distribute digital contents tousers. In future as well, the Group will attempt to accurately grasp changes in society and in people’s
lifestyles, and create diverse services that closely match the using environments of feature phone,smartphone, PC, and TV users. In addition, while producing and procuring contents suitable for these
services, the Company and its affiliated group companies will strive to develop the methods,
technologies and know-how to realize these services and aim to become a higher value-added corporategroup through business partnerships with outside companies in addition to providing their 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 that meetthe user demands of today and tomorrow. The Group will make efforts to actualize next-generation
services that are attractive to users, including the production and distribution of entertainment contentssuch as music, video and games, as well as various types of services utilizing information devices,
based on proposals for unique business solutions and through business partnerships with prominentcompanies in many fields. Moreover, in today’s increasingly diversified and complex market
environment, the Group is giving consideration to accurately grasping user needs, promoting its“multi-content on multi-platform strategy”, and improving its equity capital and profitability, which areoperating resources that are linked to increasing corporate value and shareholder profit. Accordingly,
the Group places emphasis on the equity capital ratio and the operating income as management indexes.
(3) Challenges the Faith Group Should Address
The domestic content industry is continuing to grow by making innovative use of technology andinformation transfer methods based on a succession of newly appearing ideas. Consequently, user needs
are becoming more diversified and complex at an accelerating pace, and a flood of various kinds ofcontents including free distribution items has been sweeping into the market. The Faith Group willcontinue its pursuit of intra-group synergies and conduct effective operations on a group-wide basis. At
the same time, with the aim of being able to provide excellent high-value-added contents in adiversifying usage environment and market to all users regardless of the type of network andinformation terminals they use, the Group intends to carry out the following measures.
① Content Business
The Faith Group will create new markets by developing distribution systems that bring benefits tocontent rights holders, distributors and users alike based on the technology and know-how accumulatedby the Group up to now as well as by providing its own business solutions through partnerships withprominent companies in a range of business fields. In order to realize this goal, the Group will makeevery 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.
Ever since its establishment, the Faith Group has endeavored to build up its content distribution
business by making use of various information devices as a major pillar of its business. From now on
too, the Group will continue to develop new service systems that are useful for content rights holders,
distributors and users, commercialize the necessary technology such as embedded terminal technology,
distribution system technology, etc., and construct new content distribution systems.
② Point Service Business
Up to now, point services have been centered on the retail industry, and in recent years there has been
an increase in partnerships encompassing the mutual use of points across multiple retail operations
while competition between point services has also been growing. In this situation, the Faith Group iscreating an unprecedented Point Service Business that includes O2O services. To this end, the Group
recognizes the need to improve the level of satisfaction experienced by its point service customers by
reducing operational costs and improving convenience, and by enhancing its service proposal power, etc.
In addition, the Group will adopt a strategic approach in tackling the tasks it needs to address.
7

③ Columbia Business
Regarding the Columbia Business, under circumstances in which the music and video-related industries
are facing a difficult business environment, Nippon Columbia Co., Ltd.’s Sales/Digital Distribution
Business, which is mainly engaged in sales of products based on contents such as planned and produced
sound sources, video, will increase its profitability through improved business efficiency by roundingout its artist lineup, nurturing hit artists and creating hit products, and by making use of its richcatalogue of sound sources and concentrating its management resources in order to expand into newfields in the entertainment business.
In the Direct Sales Business, which sells contents that make secondary use of in-house produced soundsources and images, in the special sales area, Nippon Columbia will continue to reinforce its
relationships with existing business partners while proceeding with the opening up of new sales
channels and new business partners. In addition, Nippon Columbia will endeavor to achieve multiple
business deployment of sound sources by improving its planned products including products for thesenior/baby boomer generation while making effective use of its rich store of contents.
In the Direct Sales Business, Nippon Columbia is developing its business efficiently using a “fulfillment
system” that conducts mail order operations such as “order receipt”, “payment acceptance” and“product delivery” consistently and efficiently. Moreover, by entering into business cooperation withother record companies in using this system, Nippon Columbia has successfully gained new sales
channels and obtained new income sources such as operation management fees. In order to expand
business cooperation to more other companies in the same industry and also to companies in different
business fields, Nippon Columbia will continue to make approaches to the planning and production of
CD and DVD products jointly with partner companies and to product planning of household items (suchas lifestyle goods and daily sundries) that take customer needs into account.

4. 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.

8

5. 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
Corporation tax refund receivable, etc.
Deferred tax assets
OthersAllowance 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)Total tangible fixed assets
Intangible fixed assets
Software
Goodwill
Leased 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

FY 2013(As of March 31, 2014)

FY 2014(As of March 31, 2015)

14,196,991
3,238,570
241,587
464,387
440,60363,564
67,118286,638
774,474△74,763
19,699,173

13,135,625
2,868,673
242,969
536,992
314,11474,82455,37821,503
986,469△49,90918,186,640

2,016,966△693,217
1,323,748
27,342△4,172
23,170797,288△667,463
129,824
1,501,684
914,368△829,947
84,4203,062,848

2,075,199△780,392
1,294,807
647,957△617,022
30,934
1,057,980△925,823
132,157
1,501,684
49,726△26,171
23,554
2,983,139

442,145
4,247,061
22,807
406,934
5,118,948

499,691
1,940,390
15,165
279,055
2,734,302

*2

*1

9

1,679,127
623,900△296,727
2,006,300
10,188,097
29,887,271*1

1,571,280
631,994△272,217
1,931,057
7,648,498
25,835,139

(Unit: thousands of yen)

(Liabilities)
Current liabilities
Trade notes and accounts payable
Short-term loans
Lease obligations
Accounts payable-otherAccrued expenses payable
Income taxes payable
Reserve for bonuses
Provision for point card certificates
Reserve for sales returns
OthersTotal current liabilities
Fixed liabilities
Long-term liabilities
Net defined retirement liabilities
Lease obligations
Deferred tax liabilities
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
Accumulated adjustment amount concerning
retirement benefits
Total other accumulated comprehensive income
Stock acquisition rights
Minority interests
Total net assets
Total liabilities and net assets

10

FY 2013(As of March 31, 2014)

FY 2014(As of March 31, 2015)

1,243,213
906,520
51,491
969,029
2,062,945
73,76370,403
191,510
148,890
430,360
6,148,127

1,133,715
546,120
17,7301,423,333
2,431,769
124,473
64,30939,828160,593544,117
6,485,992

105,400
996,110
41,915
209,823
45,628
1,398,877
7,547,004

739,020645,695
23,793
182,465
35,003
1,625,977
8,111,969

3,218,000
3,708,355
14,393,333△754,679
20,565,008

3,218,000
3,708,355
10,938,929△1,254,787
16,610,496

227,400－

215,116
5,399
87,627－
227,400
61,949
1,485,909
22,340,267
29,887,271

308,143
58,591
745,938
17,723,169
25,835,139

(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 or operating loss (△)
Non-operating income
Interest income
Dividend income
Interest on securities
Exchange gain
Equity method investment gains
Gains on investment partnership management
Interest on refund
Gains on liquidation of unpaid royalties
Miscellaneous receipts
Total non-operating Income
Non-operating expenses
Interest paid
Investment partnership losses
Equity method investment losses
Miscellaneous expenses
Total non-operating expenses
Ordinary income or ordinary losses (△)
Extraordinary income
Gains on disposal of fixed assets
Gain on disposal of investment securities
Gains on transfer of business
Gains on step acquisitions
Gains on reversal of subscription rights to shares
OthersTotal extraordinary income
Extraordinary losses
Losses on disposal of fixed assets
Losses related to organizational reform
Losses due to amortization
Losses on valuation of investment securities
Impairment losses on goodwill
Overseas tax practice-related losses
Losses on liquidation of overseas business
OthersTotal extraordinary losses
Net income or net loss before income taxes (△)
Corporate, local, and business taxes
Income taxes - deferred
Total corporate, local, and business taxes
Net income or net loss before minority interests (△)
Minority interests in loss (△)

FY 2013(April 1, 2013 ~March 31, 2014)
6,340,217*2 *9
3,657,383
2,682,833*1
2,174,105
508,728

FY 2014(April 1, 2014 ~March 31, 2015)
19,597,063*2 *9
12,805,550
6,791,513*1
7,683,493△891,979

16,838
7,096
2,096
3,501
15,303
3,257
18,837－
16,362
83,292

9,993
6,101
144
3,430
－
22,663－34,27024,264
100,868

5,044
－
－
737
5,782
586,239

11,4822,240
56,364
1,436
71,523△862,635

2,833
25,22028,320164,191－
3,759
224,325

－
－
－
－
3,357
－
3,357

32,390－－205,211－
7,491－
27,683272,776
537,788
84,58649,416
134,002403,785－

50,955434,052*6
116,534
29,804*7
2,062,591－*8
143,034
5,000
2,841,972△3,701,250
181,197269,363
450,560△4,151,811△811,331

*3

*4

11

*4

*5

403,785

Net income or net loss for the current fiscal year (△)

12△3,340,479

(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 adjustment
Adjustments for retirement benefit obligations
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

13

FY 2013(April 1, 2013 ~March 31, 2014)
403,785

FY 2014(April 1, 2014 ~March 31, 2015)△4,151,811△55,790△12,094－－
9,179△46,611357,174

10,639171,949－*
170,494△3,981,317

357,174△3,259,736－△721,580*

(3) Consolidated Statement of Changes in Shareholders’ Equity
FY 2013 (April 1, 2013 ~ March 31, 2014)(Unit: thousands of yen)
Shareholders' equity
Capital stock Capital surplus
Balance at the beginningof the year
Changes of items during
the accounting period

3,218,000

3,708,355

Cash dividend paid
Net gain or loss
Acquisition of treasury
stock
Disposal of treasurystock
Net changes in nonequity items during theaccounting period
Total changes of items
during the accounting
periodBalance at the end of theyear

3,218,000

3,708,355

Retainedearnings
14,103,509

Total
Treasury stock shareholders’equity△751,372

20,278,491△113,934△113,934

403,785

403,785△3,492△3,492

△28

185

157

289,823△3,307

286,516

14,393,333△754,679

20,565,008

Minority
Interests

Accumulated other comprehensive income

Balance at the beginningof the year
Changes of items during
the accounting period

Valuationdifference on
otheravailablefor-salesecurities

Foreigncurrencytranslation
adjustments

Total
accumulated
othercomprehensiv
e income

Shareacquisitionrights283,308△9,296

274,012－－

20,552,504△113,934

Cash dividend paid
Net gain or loss
Acquisition of treasury
stock
Disposal of treasurystock
Net changes in nonequity items during theaccounting period
Total changes of items
during the accounting
periodBalance at the end of theyear

Total net assets

403,785△3,492
157△55,907

9,296△46,61161,949

1,485,909

1,501,246△55,907

9,296△46,61161,949

1,485,909

1,787,762

227,400－

227,400

61,949

1,485,909

22,340,267

14

FY 2014 (April 1, 2014 ~ March 31, 2015)(Unit: thousands of yen)

Shareholders' equity
Capital stock Capital surplus
Balance at the beginningof the year
Changes of items during
the accounting period

3,218,000

3,708,355

Cash dividend paid
Net gain or loss
Acquisition of treasury
stock
Disposal of treasurystock
Net changes in nonequity items during theaccounting period
Total changes of items
during the accounting
periodBalance at the end of theyear

Retainedearnings

Total
Treasury stock shareholders’equity△754,679

14,393,333

20,565,008△113,901△113,901△3,340,479△3,340,479△500,251△500,251

△23

143

120

－

－

△3,454,403△500,107△3,954,511

3,218,000

3,708,355

10,938,929△1,254,787

16,610,496

Accumulated other comprehensive income
Valuationdifferenceon otheravailablefor-salesecurities
Balance at the beginningof the year
Changes of items during
the accounting period

227,400

Cumulative
Foreign adjustments
currencyfortranslation retirement
adjustments
benefitobligations
－

－

Total
Share
accumulated acquisition
other comprights
rehensiveincome227,400

61,949Minority
Interests

Total net assets

1,485,909

22,340,267△113,901

Cash dividend paid

△3,340,479

Net gain or loss
Acquisition of treasury
stock
Disposal of treasurystock
Net changes in nonequity items during theaccounting period
Total changes of items
during the accounting
periodBalance at the end of theyear△500,251120△12,284

5,399

87,62780,742△3,357△739,970△662,587△12,284

5,399

87,62780,742△3,357△739,970△4,617,098

215,116

5,399

87,627308,143

58,591

745,938

17,723,169

15

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

FY 2013(April 1, 2013 ~March 31, 2014)
Cash flow from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Impairment loss
Amortization losses on goodwill
Impairment losses on goodwill
Increase/decrease in allowance for doubtful accounts
Increase/decrease in reserve for bonus
Increase/decrease in allowance for unexercised sales
promotion points
Increase/decrease in net defined retirement liabilities
Interest and dividends income
Interest on securities
Interest paid
Gain or loss on foreign exchange (△ = gain)
Gain or loss on equity method investments (△ = gain)
Gain or loss on investment partnership management (△ =gain)Gain or loss on sale of investment securities (△ = gain)
Gain or loss on valuation of investment securities (△ = gain)
Losses related to organizational reform
Losses on liquidation of overseas business
Gain or loss on sale of fixed assets (△ = gain)
Gain or loss on disposal of fixed assets (△ = gain)
Gain or loss on step acquisitions (△ = gain)
Gain or loss on transfer of business (△ = gain)
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

16

FY 2014(April 1, 2014 ~March 31, 2015)

537,788244,922－49,463－△3,306△3,51016,418△3,701,250
368,188
116,534
266,192
2,062,591△49,953△6,094△151,681△8,662△23,935△2,096
5,044△3,156△15,303△3,257△178,465△16,094△144
11,482△12,554
56,364△20,423△25,220
205,211－－△2,83332,390△164,191△28,320
166,746△32,969△12,959△8,061－29,804434,052
143,034－
50,955－－363,740
43,465△140,124△4,266△10,190
1,479
911,489
336,250△5,071
698,957△226,162
1,715,463

54,140383,386
102,879
7,730△11,604
68,384△157,712
9,678

(Unit: thousands of yen)

FY 2013(April 1, 2013 ~March 31, 2014)
Cash flow from investing activities
Expenditure for opening of term deposits
Income from withdrawal of term deposits
Income from redemption 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
Income from sale of investment securities
Expenditure for acquisition of shares of affiliates
Expenditure for acquisition of shares of subsidiaries in linewith changes in scope of consolidation
Proceeds from purchase of shares of subsidiaries resulting inchange in scope of consolidation
Expenditure for loans receivable
Income from collection of loans receivable
Expenditure for security deposits
Income from collection of security deposits
Income from transfer of business
OthersNet cash flow from investing activities
Cash flow from financing activities
Net increase (decrease) in short-term loans payable
Expenditure for repayment of lease obligations
Income from long-term loans payable
Expenditure for repayment of long-term borrowing
Increase/decrease in money held in trust for acquisition oftreasury stock (△ = increase)
Expenditure for acquisition of treasury stock
Income from sale of treasury stock
Payment of dividends
Payment of dividends to minority shareholders
OthersNet 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 the beginning of the year
Cash and cash equivalents at the end of the year17

△4,023,238
7,192,145
300,000△72,530
5,000△190,701△682,697
26,220△79,000△5,034,975
4,036,105－△101,100－△373,592
－
6,783
△0

△207,822－

1,913,528*1

FY 2014(April 1, 2014 ~March 31, 2015)*2

104,951△3,1203,240△5,087
5,087
28,571△116,197
4,093,397△15,000
6,246
△956
3,494
－
△88,622△1,456,667－△5,723－△399,984△270,000△53,457
1,000,000△456,780－△201,673△3,492
157△112,834－－△521,878
3,156
5,290,140
6,125,200
11,415,340△501,251128△114,882△27,307△9,396△634,620
12,554△2,069,055
11,415,340*1
9,346,285

(5) Notes Concerning the Consolidated Financial Statements(Notes Concerning the Premise of a Going Concern)
Not applicable(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: 14 companies, current fiscal year: 15 companies
Names of major consolidated companies:• Faith Wonderworks, Inc.
• GoodyPoint Co., Ltd.
• Future RECORDS Inc.
• ENTERMEDIA INC.

• OK LIFE, Inc.
• Nippon Columbia Co., Ltd.
• Columbia Marketing Co., Ltd.
• Columbia Songs, Inc.
• SLG, LCC• GLOBAL PLUS, INC.
GLOBAL PLUS, INC., for which the Company newly acquired a controlling shareholding during thecurrent consolidated fiscal year, has been included within 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 this non-consolidated subsidiary is a small company, the sum totals of it gross assets, sales,
and net income 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: 4 companies, current fiscal year: 6 companies
Names of major consolidated companies:• Japan Rights Clearance Inc.
• Lync-Entertainments• FlyingPenguins Inc.
• TOYBOX Inc.
• nana music, inc.
TOYBOX INC. and nana music, inc., for which the Company newly acquired a controllingshareholding during the current consolidated fiscal year, have been included within 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 (Asian Entertainment and Communications Co., Ltd.) have been
excluded from the scope of application of equity method accounting because, in view of their net
income or loss (amount corresponding to equity) and retained earnings (amount corresponding toequity), etc., excluding them from the scope of application of equity method accounting has only aminor influence on the Consolidated Balance Sheet and is of no overall significance.
3. Items Concerning the Accounting Periods of the Consolidated Subsidiaries
All the consolidated subsidiaries in the Faith Group have the same consolidated balance sheet
closing date.
From the current fiscal year, GoodyPoint Co., Ltd. has changed its settlement date from February 28
to March 31, and consequently this company’s accounting year totaled 13 months during the current
fiscal year. Moreover, in the past, among the consolidated subsidiaries, OK LIFE, Inc. has had asettlement date of November 30, and in producing the Consolidated Balance Sheet, the Company has
used financial statements based on a provisional statement of account dated February 28. However,from the current fiscal year, OK LIFE, Inc. has changed its settlement date to March 31, and18

consequently this company’s accounting year totaled 13 months during the current fiscal year.
4. Items Concerning the Accounting Standards(1) Significant evaluation standards and methods
1) Marketable securities
Other securities:—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
The evaluation standard is the cost method employing the specific cost method (balance sheet values
calculated by devaluing the book values based on declining profitability).
a. Commercial products and merchandise: For the Company and some of its consolidated
subsidiaries, mainly stated under the gross average method; for the other consolidated
subsidiaries the first-in-first out method.
b. Products in progress: For the Company and some of its consolidated subsidiaries, stated under the
specific identification method; for the other consolidated subsidiaries, mainly stated under thegross average method.
c. Raw materials and supplies: Stated mainly under the gross average method.
(2) Significant depreciable assets and depreciation methods
1) Tangible fixed assets (excepts lease assets)
The declining balance method is mainly employed to calculated depreciation expenses for theseassets. (However, the company employs the straight-line method for buildings (apart fromattached facilities) acquired since April 1, 1998.) The useful lifetimes of the main types oftangible fixed assets are as follows.
Buildings and structures: 5 – 50 years
Machinery and delivery equipment: 2 – 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) Lease assets
a. Lease assets pertaining to finance lease transactions involving the transfer of ownership
The straight-line method is employed. The useful lifetimes of the main types of intangible fixed
assets are between 5 and 12 years.
b. Lease assets pertaining to finance lease transactions not involving the transfer of ownership
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.
(3) Standards for recording significant allowances
1) Allowance for doubtful accounts
In order to prepare for losses due to doubtful accounts receivable, the estimated unrecoverable
amounts in consideration of the actual ratio of bad debts for general accounts receivable andindividual collectability for special bonds such as doubtful accounts receivable, etc., arerecorded.
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.

19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 losses due to sales returns
In order to prepare for future losses due to sales returns, anticipated losses accompanying future
returns of merchandise are recorded based on actual past return rates with respect to total sales.
(4) Accounting Standard for Retirement Benefits
In the calculation of retirement benefit liabilities and expenses, for the Company and certain
subsidiaries apply the simplified method in calculating the provision for retirement benefits, whichassumes all employees voluntarily terminate their employment at the end of the year. The otherconsolidated subsidiaries apply the following methods.
1) Attribution of expected retirement benefit payments
When calculating retirement benefit obligations, straight-line attribution is used to allocate
expected retirement benefit payments in the period until the end of the fiscal year.
2) Actuarial gains and losses and prior service cost
Transition obligation for the retirement benefit liabilities is amortized equally over 15 years.
Prior service costs are amortized as incurred by the straight-line method over certain periods (3years), which are within the average remaining years of service of the employees at the time theservice cost is generated.
Actuarial gains and losses are amortized on a straight-line basis over certain periods (5 years),
which are within the average remaining years of service of the employees at the time the amounts
are generated in each fiscal year, allocated proportionately starting from the year following therespective fiscal year of occurrence.
(5) 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(6) 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. Meanwhile, the assets andliabilities of overseas subsidiaries are converted into yen based on the spot exchange rate on the dayof consolidated settlement of accounts, revenue and expenses are converted into yen using the
average market price during the period, and exchange differences are included in Foreign currencytranslation adjustments under Net assets on the Consolidated Balance Sheet.
(7) Goodwill amortization method and amortization period
The amortization of goodwill is carried out using the straight-line method over a period of 5 years or
20 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 5 years
or less 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.
(8) 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 datethat comes within 3 months of the acquisition date.
(9) Other important items necessary to produce the Consolidated Financial Statements
1) Accounting method for consumption tax: The tax exclusion method is adopted for consumption
tax and local consumption tax. Nondeductible consumption tax is processed as an expense for thecurrent consolidated fiscal year.
2) Adoption of the consolidated tax payment system: Some of the Company’s consolidated
subsidiaries have adopted the consolidated tax payment system.

20

(Accounting Standards Issued But Not Yet Applied)• Accounting Standard for Business Combinations (ASBJ Statement No. 21, issued on September 13,
2013)• Accounting Standard for Consolidated Financial Statements (ASBJ Statement No. 22, issued on
September 13, 2013)• Accounting Standard for Business Divestitures (ASBJ Statement No. 7, issued on September 13,
2013)• Accounting Standard for Earnings Per Share (ASBJ Statement No. 2, issued on September 13, 2013)• Guidance on Accounting Standard for Business Combinations and Accounting Standard forBusiness Divestitures (ASBJ Guidance No. 10, issued on September 13, 2013)• Guidance on Accounting Standard for Earnings Per Share (ASBJ Guidance No. 4, issued on
September 13, 2013)(1) Summary
These accounting standards have been revised centered on the following points: ① Treatment ofchanges in ownership interests as equity transactions where control continues through the purchaseof additional shares of subsidiary companies; ② treatment of expenses at the time of acquisition;③ presentation of net income for the current term and changes from minority interests tonon-controlling interests; and ④ provisional accounting treatment.
(2) Effective date
The adoption of these accounting standards is scheduled for the start of the fiscal year ending March2016. Also, the schedule calls for provisional accounting treatment to be applied from businesscombinations carried out from the beginning of the fiscal year ending March 2016.
(3) Impact of adoption
As of the time of the preparation of these consolidated financial statements, the impact of the
adoption of these accounting standards is under evaluation.

(Changes in Accounting Policy)(Consolidated Balance Sheet)
The Company has adopted the “Accounting Standard for Retirement Benefits” (AccountingStandards Board of Japan Statement No. 26, issued on May 17, 2012; hereinafter, the “AccountingStandard for Retirement Benefits”) and the “Guidance on Accounting Standard for Retirement
Benefits” (ASBJ Guidance No. 25 issued on March 26, 2015; hereinafter, the “Guidance on
Accounting Standard for Retirement Benefits”) to the stipulations prescribed in Paragraph 25 the
Accounting Standard for Retirement benefits and Paragraph 67 of the Guidance on AccountingStandard for Retirement Benefits from the end of the current consolidated fiscal year, and has
reviewed the method of calculating retirement benefits obligations and the current servicing costs.
In addition, the above change had no effect on the Company’s retained earnings or profit and loss atthe start of the current consolidated fiscal year.
(Changes in Presentation Methods)(Consolidated Balance Sheet)
In the previous consolidated fiscal year, the Company reported the “Accounts payable-other” in“Other” under current liabilities. The Company has reported this item separately for the current
consolidated fiscal year because the amount exceeded 5% of total liabilities. To reflect this change inreporting method, the Company has made certain reclassifications to its consolidated financial
statements for the previous consolidated fiscal year.
As a result, ¥1,399,389 thousand that was reported in “Other” under current liabilities in theConsolidated Balance Sheet in the previous consolidated fiscal year has been reclassified, with
¥969,029 thousand reported in “Accounts payable-other” and ¥430,360 thousand reported in“Other.”(Additional Information)
Not applicable21

(Consolidated Balance Sheet Related)*1. The following were held by the Company’s non-consolidated subsidiaries and affiliates.
(Unit: thousands of yen)

Investment securities (shares)

FY 2013

FY 2014(As of March 31, 2014)
125,425(As of March 31, 2015)
118,042*2. Assets including title retention(Unit: thousands of yen)

FY 2013

FY 2014(As of March 31, 2014)(As of March 31, 2015)

37,224—

Internal facilities at subsidiary’s headquarters(Buildings and structures)(Consolidated Statement of Income Related)*1 In the breakdown of cost of sales and selling, general and administrative expenses, the main items andamounts were as follows.
(Unit: thousands of yen)

FY 2013(April 1, 2013 ~March 31, 2014)
595,883
64,347
19,617331,173△291

Salaries and allowances
Provision of allowance for bonuses
Retirement benefit expenses
Advertising expenses
Provision of allowance for doubtful accounts

FY 2014(April 1, 2014 ~March 31, 2015)
2,104,469
49,666
175,889
2,353,953△4,216*2 Total research and development costs included in current term manufacturing costs were as follows.
(Unit: thousands of yen)

FY 2013(April 1, 2013 ~March 31, 2014)
47,184

FY 2014(April 1, 2014 ~March 31, 2015)
49,830*3 Details of gains on the disposal of fixed assets were as follows.
(Unit: thousands of yen)

FY 2013(April 1, 2013 ~March 31, 2014)
2,833

Machinery, equipment and vehicles

FY 2014(April 1, 2014 ~March 31, 2015)—*4 Details of losses on the disposal of fixed assets were as follows.
(Unit: thousands of yen)

FY 2013(April 1, 2013 ~March 31, 2014)
128
—
3,040
29,221—
32,390

Buildings and structures
Machinery and transportation equipment
Tools, devices and equipment
Software
Other intangible fixed assets
Total

FY 2014(April 1, 2014 ~March 31, 2015)
5,543
1,081
129
38,752
4,448
50,955*5 Losses related to organizational reform
With a view to its future entry into and rapid development of new fields of business, the Company has
22decided to work on organizational reform. Expenses already incurred and expected future expenses inaccordance with the career change support measures for organizational reform have been recorded as

losses related to organizational reform.
*6 Impairment losses
Previous consolidated fiscal year/FY 2013 (April 1, 2013 ~ March 31, 2014)
Not applicable
Current consolidated fiscal year/FY 2014 (April 1 2014 ~ March 31, 2015)
The Faith Group recorded impairment losses concerning the following asset groups.
Location
Segment
Type
Minato Ward, Tokyo
Content Business
SoftwareMinato Ward, Tokyo
Columbia Business
Other intangible fixed assets
In the impairment loss calculation, the Faith Group has made a grouping based on segments andregarding unutilized assets has made a judgment as to the impairment loss on each asset.
For the current consolidated fiscal year, in consideration of prospective future earnings and future
cash flow, the book value of unutilized assets is recorded as an impairment loss (¥116,534 thousand).
The details are ¥106,534 thousand for software and ¥10,000 thousand for other intangible fixed
assets (master use rights). Moreover, in the calculation of recoverable value, the impairment loss ismeasured while making the utility value zero.
*7 Impairment losses on goodwill
Previous consolidated fiscal year/FY 2013 (April 1, 2013 ~ March 31, 2014)
Not applicable
Current consolidated fiscal year/FY 2014 (April 1 2014 ~ March 31, 2015)
The Faith Group recorded the following impairment losses on goodwill.
Location
Segment
Type
Minato Ward, Tokyo
Content Business
Goodwill
Minato Ward, Tokyo
Columbia Business
GoodwillWith regard to the Company’s subsidiaries, as a result of reconsidering profitability and futurebusiness plans, within the unamortized balance, the Company has recorded impairment losses of¥2,062,591 thousand (Contents ¥245,140 thousand, Columbia ¥1,817,450 thousand).
*8 Losses on liquidation of overseas business
Previous consolidated fiscal year/FY 2013 (April 1, 2013 ~ March 31, 2014)
Not applicable
Current consolidated fiscal year/FY 2014 (April 1 2014 ~ March 31, 2015)
In view of the severe business environment surrounding the music industry in recent years, in order
to concentrate its management resources into the Japanese domestic market, the Company decided totransfer through sale the entire equity interest held by its wholly-owned US consolidated subsidiary,
resulting in the generation of losses that are recorded as losses on overseas business liquidation.
Location
Segment
Type
U.S.A
Columbia Business
Other intangible fixed assets
Tools, devices and equipment
U.S.A.
Columbia Business
These losses on liquidation of an overseas business are inclusive of impairment losses. Because it
was decided to transfer the entire equity interest in this US consolidated subsidiary, independent
asset groups were established and grouped into the minimum-sized cash flow-producing units. Basedon the US Accounting Standard, concerning the other intangible fixed assets (master use rights)¥77,461 thousand, and tools, devices and equipment ¥960 thousand of the aforementioned US
consolidated subsidiary, for which the probability of the Company’s recuperating the book value wasjudged to be low, the book value has been reduced to the net sale value. Moreover, the projected salevalue has been used in setting the net sale value.
*9 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)23

FY 2013

FY 2014(April 1, 2013 ~ March 31, 2014)(April 1, 2014 ~ March 31, 2015)△11,036

1,539(Consolidated Statement of Comprehensive Income Related)*Reclassification adjustment amount and tax effect amount of other comprehensive income(Unit: thousands of yen)

FY 2013(April 1, 2013 ~March 31, 2014)

FY 2014(April 1, 2014 ~March 31, 2015)△79,635△6,927△86,562
30,771△55,790△35,270
6△35,264
23,170△12,094—

10,639———34,381
137,568
171,949

3,937
5,241
9,178
△46,611———
170,494

Valuation differences on other available-for-sale securities:
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
Foreign currency translation adjustments:
Amount accrued in the current term
Adjustments for retirement benefit obligations:
Amount accrued in the current term
Reclassification adjustment amount
Adjustments for retirement benefit obligations
Share of comprehensive income of equity method affiliates:
Amount accrued in the current term
Reclassification adjustment amount
Share of comprehensive income of equity method affiliates
Total other comprehensive income(Consolidated Statements of Changes in Shareholders’ Equity Related)
Previous consolidated fiscal year/FY 2013 (April 1, 2013 ~ March 31, 2014)
1. Matters Related to Class and Total Numbers of Shares Issued and Shares of Treasury Stock
Start of current
fiscal year
Number of shares issued
Common stock
Total
Treasury stock
Common stock
Total

Increase during
current fiscal year

Decrease during
current fiscal year

End of current
fiscal year

1,196,000
1,196,000

—
—

—
—

1,196,000
1,196,000

56,65756,657513,153
513,153140
140

569,670569,670(Notes)1. The increase of 10,764,000 shares in the total number of shares of common stock issued is in accordance with theCompany’s stock split at a ratio of 10 ordinary shares for each ordinary share.
2. The increase of 513,153 shares in the total amount of treasury stock represents the increase of 509,913 shares due tothe stock split of ordinary shares plus the increase of 3,240 shares due to the acquisition of an odd lot.
3. The decrease of 140 shares in the total amount of treasury stock is due to a request to purchase an odd lot.

2. Matters Related to Equity Warrants
Start ofcurrent
fiscal year

Increase

Decrease

End ofcurrent
fiscal year

Balance at endof current
fiscal year
(thousands of
yen)

－

－

－

－

－

1,135

－

－

－

－

－

46,397

－

－

－

－

－

14,415

Number of shares
Segment

Consolidated
subsidiaries

Details

Equity warrants as2006 stock options
Equity warrants as2007 stock options
Equity warrants as2009 stock options

Class ofshares

24

－

Total

25

－

－

－

61,948

3. Matters Related to Dividend Distribution(1) Amounts of dividends paid
(Resolution)
General Meeting of
Shareholders heldon June 27, 2013
Board of Directors’Meeting held on
November 12, 2013

Class ofsharesCommonstock

Total amount of dividends(thousands of yen)
56,967

Dividend pershare (yen)50

Commonstock

56,96750

Record date

Effective date

March 31, 2013

June 28, 2013

September 30,
2013

December 9,
2013(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 ofsharesTotal amountof dividends(thousands of yen)

Source offunds fordividends
Retainedearnings

Dividend
per share(yen)
5

Record date

Effective date

General Meeting ofCommon56,951March 31, 2014 June 30, 2014
Shareholders heldstock
on June 27, 2014
Note: With effect from October 1, 2013, the Company carried out a stock split of its common shares at a ratio of 10
shares per share, and in conjunction with this, the share trading unit in which the Company’s stock can be tradedon the stock exchange was changed to 100 shares. Concerning the dividend per share announced at the General
Meeting of Shareholders, the amount reported reflects the result of the share split.

Current consolidated fiscal year/FY 2014 (April 1 2014 ~ March 31, 2015)
1. Matters Related to Class and Total Numbers of Shares Issued and Shares of Treasury Stock
Start of current
fiscal year
Number of shares issued
Common stock
Total
Treasury stock
Common stock
Total

Increase during
current fiscal year

Decrease during
current fiscal year

End of current
fiscal year

1,196,000
1,196,000

—
—

—
—

11,960,000
11,960,000

569,670569,670

405,920
405,920

110
110

975,480
975,480(Notes)1. The increase of 405,920 shares in the total amount of treasury stock represents the increase of 404,200 shares due tothe purchase of treasury stock with money held in trust approved by a resolution of the Board of Directors, plus theincrease of 720 shares due to the acquisition of an odd lot.
2. The decrease of 110 shares in the total amount of treasury stock is due to a request to purchase an odd lot.

2. Matters Related to Equity Warrants
Number of shares
Segment

Consolidated
subsidiaries

Details

Equity warrants as2006 stock options
Equity warrants as2007 stock options
Equity warrants as2009 stock options
Total

Class ofsharesBalance at endof current
fiscal year
(thousands ofyen)Start ofcurrent
fiscal year

Increase

Decrease

End ofcurrent
fiscal year

－

－

－

－

－

1,135

－

－

－

－

－

43,040

－

－

－

－

－

14,415－－－－58,5913. Matters Related to Dividend Distribution(1) Amounts of dividends paid
(Resolution)
General Meeting of
Shareholders heldon June 27, 2014
Board of Directors’Meeting held on
November 11, 2014

Class ofsharesCommonstock

Total amount of dividends(thousands of yen)
56,951Dividend pershare (yen)5Commonstock

56,9495

26

Record date

Effective date

March 31, 2014

June 30, 2014

September 30,
2014

December 12,2014Note: With effect from October 1, 2013, the Company carried out a stock split of its common shares at a ratio of 10
shares per share, and in conjunction with this, the share trading unit in which the Company’s stock can be tradedon the stock exchange was changed to 100 shares. Concerning the dividend per share announced at the General
Meeting of Shareholders, the amount reported reflects the result of the share split.

(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 ofsharesGeneral Meeting of
Shareholders heldon June 26, 2015

Commonstock

Total amountof dividends

Source offunds fordividends
Retainedearnings(thousands of yen)

54,922

Dividend
per share(yen)
5

Record date

Effective date

March 31, 2015

June 29, 2015

(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
Cash and cash equivalents

FY 2013(April 1, 2013 ~March 31, 2014)
14,196,991
241,587△3,023,238
11,415,340

FY 2014(April 1, 2014 ~March 31, 2015)
13,135,625
242,969△4,032,309
9,346,285*2 Breakdown of main assets and liabilities of companies that are newly consolidated subsidiaries of
the Faith Group due to acquisition of their shares during the current consolidated fiscal year
(GLOBAL PLUS, INC.)
The following is a breakdown of the assets and liabilities of GLOBAL PLUS, INC. at the time of its
incorporation as a newly consolidated subsidy of the Faith Group by means of a share acquisition, as
well as the acquisition value of the company’s shares, and the income resulting from the acquisition.
(Unit: thousands of yen)

Current assets
Fixed assets
Goodwill
Current liabilities
Fixed liabilities
Minority interests
Acquisition cost of shares in GLOBAL PLUS, INC.
Value of cash and cash equivalents of GLOBAL PLUS, INC.
Deduction: Income resulting from the acquisition (net amount)(Business Combination Related)
Not applicable27

219,0316,377
5,785△ 192,178△15,000△8,93615,080△120,031
104,951

(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 Company and a number of its subsidiaries are engaged in the Content Business, which provides
one-stop contents encompassing everything from planning and production of contents to design andconstruction of platforms and delivering these things to users. GoodyPoint Co., Ltd. is engaged in
the Point Service Business, which provides points services. Nippon Columbia Co., Ltd. and its
subsidiaries are engaged in the Columbia Business, which involves processing planned and produced
contents including sound sources, videos, etc., into various products and sale of these products.
Accordingly, the Faith Group categorizes the Content Business, the Point Service Business, and theColumbia Business as its three reportable segments.
The Content Business involves contents delivery, delivery platform technology development,
contents production, etc.
The Point Service Business involves sales of point systems, planning of promotions, planning,production and sales of sales promotion tools, etc.
The Columbia Business involves the processing of planned and produced contents including soundsources, videos, etc., into various products and the appropriate sale of these products.
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 income 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 2013 (April 1, 2013 ~ March 31, 2014)(Unit: thousands of yen)Content

Reportable segment
Point
Columbia
Service

5,007,656

1,332,560－

6,340,217－

6,340,217

18,258368－

18,627△18,627－

5,025,915

1,332,929－

6,358,844△18,627

6,340,217

507,697
29,934,410

1,030△47,138

29,887,271

Total

Adjustment
amount (1)Amountrecorded in
Consolidated
Financial
Statements (2)

Sales
Sales to externalcustomers
Inter-segment sales ortransfer amount
Total
Segment profit

467,151

40,546－

Segment assets

16,540,801

463,782

12,929,827

Other items
Depreciation expenses

508,728－△48
237,328
7,641
244,970
244,922
Amortization of－－－
24,09524,09524,095
goodwill
Investment in－－－
124,931
124,931
124,931equity-method affiliates
Increase in tangible
and intangible fixed－－
262,813417
263,231
263,231
assets
Note 1. The segment profit adjustment amount of ¥1,030 thousand and the depreciation expenses adjustment amount of△¥48 thousand for this consolidated fiscal year are calculated by eliminating intersegment transactions.
Note 2. Segment profit is adjusted with operating income in the consolidated financial statements.

28

Current consolidated fiscal year/FY 2014 (April 1 2014 ~ March 31, 2015)(Unit: thousands of yen)

Sales
Sales to externalcustomers
Inter-segment sales ortransfer amount
Total
Segment profit Segment
profit or loss (△)
Segment assets

Content

Reportable segment
Point
Columbia
Service

4,550,295

2,454,853

12,591,914

19,597,063－

19,597,063

157,113948

37,881

195,943△195,943－

4,707,408

2,455,802

12,629,796

19,793,006△195,943

19,597,063

168,112

26,093△1,104,790△910,585

18,605△891,979

15,217,471

751,391

9,926,875

25,895,737△60,598

25,835,139

Total

Adjustment
amount (1)Amountrecorded in
Consolidated
Financial
Statements (2)Other items
Depreciation expenses△48
255,024
12,896
100,315368,236
368,188
Amortization of－－
64,903201,288
266,192
266,192
goodwill
Investment in－－－
117,548
117,548
117,548
equity-method affiliates
Increase in tangible
and intangible fixed－
381,969
29,861
62,862474,693474,693
assets
Note 1. The segment profit adjustment amount of ¥1,8,605 thousand and the depreciation expenses adjustment amountof △¥48 thousand for this consolidated fiscal year are calculated by eliminating intersegment transactions.
Note 2. Segment profit is adjusted with operating income in the consolidated financial statements.

[b. Related Information]
Previous consolidated fiscal year/FY 2013 (April 1, 2013 ~ March 31, 2014)
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 name
NTT DoCoMo, Inc.
XING INC.
Kirindo Co., Ltd.

Sales amount
1,904,000
1,461,967
749,954

Related segment nameContent Business
Content Business
Point Service BusinessCurrent consolidated fiscal year/FY 2014 (April 1 2014 ~ March 31, 2015)
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.
29

3. Information on major customers
Information on major customers is omitted because since there were no sales to a single externalcustomer accounting for 10% or more of net sales on the consolidated statement of income.
[c. Information on Impairment Losses on Fixed Assets by Reportable Segment]
Previous consolidated fiscal year/FY 2013 (April 1, 2013 ~ March 31, 2014)
Not applicable
Current consolidated fiscal year/FY 2014 (April 1 2014 ~ March 31, 2015)(Unit: thousands of yen)Content
Impairment
lossesImpairment
losses on
goodwill

Point
ServiceColumbia

Total

106,534－

10,000116,534

245,140－

1,817,450

2,062,591

Company-wide/
elimination

Total
－

116,534－ 2,062,591[d. Information on Amortization of Goodwill and Unamortized Balance for Each Reportable Segment]
Previous consolidated fiscal year /FY 2013 (April 1, 2013 ~ March 31, 2014)(Unit: thousands of yen)Content
Year-endbalance292,784

Point
Service—Columbia

Total

3,954,2767

4,247,061

Company-wide/
elimination

Total
—

4,247,061(Note)
The amount of amortization of goodwill is not recorded because the same information is shown in [a. Segment
Information].

Current consolidated fiscal year/FY 2014 (April 1 2014 ~ March 31, 2015)(Unit: thousands of yen)Content
Year-endbalance

4,301

Point
Service—Columbia

Total

1,936,089

1,940,390

Company-wide/
elimination

Total
—

1,940,390(Note)
The amount of amortization of goodwill is not recorded because the same information is shown in [a. Segment
Information].

[e. Information on Gains on Negative Goodwill by Reportable Segment]
Previous consolidated fiscal year/FY 2013 (April 1, 2013 ~ March 31, 2014)
Not applicable
Current consolidated fiscal year/FY 2014 (April 1 2014 ~ March 31, 2015)
Not applicable(Per Share Information)(Unit: yen)

FY 2013 (April 1, 2013 ~ March 31, 2014)
Net assets per share
1,825.44
Net income per share
35.44

FY 2014 (April 1 2014 ~ March 31, 2015)
Net assets per share
1,540.233
Net loss per share (△)△295.46(Notes)1. The amount of net income per share fully diluted during the current consolidated fiscal year is not recorded because
there was a net loss per share and because there are no dilutive shares at this time.
2. With effect from October 1, 2013, the Company carried out a stock split of its common shares at a ratio of 10 shares
per share. For this reason, the net asset value per share is calculated under the supposition that the stock split had
taken place at the beginning of the previous consolidated fiscal year.
3. The basis of the calculation of net income per share and net income for share fully diluted is as follows.

30

FY 2013(April 1, 2013 ~ March 31, 2014)
Net income or net loss (△) per share
Net income or net loss (△)(thousands of yen)Amount not attributable to ordinary
shareholders (thousands of yen)
Net income or net loss (△) applicable
to common stock (thousands of yen)
Average number of shares
outstanding during the period (shares)
Net income per share fully diluted(thousands of yen)
Net income adjustment amount(Adjustment amount of diluted sharesin consolidated subsidiaries)
Increase in common stock (shares)
Summary of dilutive potential sharesthat are not included in the calculationof net income per share after
adjustment of dilutive potential sharesbecause of no dilution effect

FY 2014(April 1 2014 ~ March 31, 2015)

403,785△3,340,479——

403,785△3,340,479

11,392,053

11,305,901

—
(—)

—
(—)

—
Stock options on 135,000 ordinary
shares (13 kinds, 2,700 units) issued
by Nippon Columbia Co., Ltd. (aconsolidated subsidiary)—
Stock options on 121,500 ordinary
shares (10 kinds, 2,430 units) issued
by Nippon Columbia Co., Ltd. (aconsolidated subsidiary)(Note 4) The basis of the calculation of net assets per share is as follows.
Total amount of net assets (thousandsof yen)Amount deducted from total amountof net assets (thousands of yen)
(Minority interests)
Year-end net assets applicable tocommon stock (thousands of yen)
Term-end number of shares ofcommon stock used in calculating net
assets per share (shares)

FY 2013 (as of March 31, 2014)
22,340,267

FY 2014 (as of March 31, 2015)
17,723,169

1,547,858

804,529(1,485,909)
20,792,409(745,938)
16,918,640

11,390,330

10,984,520(Significant Subsequent Events)
Not applicable(Omission of Disclosure)
No notes are presented concerning information on lease transactions, financial instruments,
marketable securities, derivative transactions, retirement benefits, stock options, etc., tax effective
accounting, rental property and related parties because their amounts are considered too small andinsignificant for presentation in the Brief Statement of Financial Results.

31