BRIEF STATEMENT OF CONSOLIDATED FINANCIAL RESULTS
FOR THE 1st QUARTER OF THE FISCAL YEAR ENDING MARCH 2017
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.

August 10, 2016
Faith, Inc. (Stock code 4295, Listed on TSE 1st section)(URL http://www.faith.co.jp/)
Representative: Hajime Hirasawa, CEO/President
Contact: Jiro Saeki, CFO/Director
Tel: +81-3-5464-7633
Date of Submission of Securities Report: August 12, 2016
Starting Date of the Dividend Payment: Preparation of Supplementary Materials for Quarterly Financial Results: None
Information Meeting for Quarterly Financial Results to be Held: None
Amounts are rounded down to the nearest JPY 1 million.

1. Results for the 1st Quarter of the Fiscal Year Ending March 2017
(From April 1, 2016 to June 30, 2016)(1) Consolidated Operating Results(Percentages indicate changes compared with the 1st quarter of the previous fiscal year.)

Net Sales

Q1 of the year ending
March 2017
March 2016

Operating Income

Millionsof yen

%

4,908
4,695

Millionsof yen4.5
5.6

Ordinary Income
Millionsof yen

%

515
164

212.7
—

500
168

%

Net Income
Millionsof yen

197.3
—

208
55

%
273.1
—

(Note) Comprehensive income: 1st quarter of the fiscal year ending March 2017: ¥405 million (598.7%); 1st quarter of the fiscal year
ending March 2016: ¥58 million (—%)

Net Income per
Share

Diluted Net
Income per Share

Yen
21.15
5.15

Yen
—
—

Q1 of the year ending
March 2017
March 2016

(2) Consolidated Financial Position
Total Assets

Ratio of Equity Capital

Net Assets Per Share

Millions of yen

Millions of yen%

Yen

24,247

17,17364.6

1,578.64

24,712

16,82962.9

1,576.18

Q1 of the year ending
March 2017
Year ending March 2016

Net Assets(Reference) Equity capital: 1st quarter of fiscal year ending March 2017: ¥15,669 million; fiscal year ending March 2016: ¥15,556 million

2. Dividends
Dividends per Share
(Record dates)

Year ending March 2016
Year ending March 2017
Year ending March 2017
(Forecast)

1st Quarter

yen
—
—

3rd Quarter

InterimYear-end

Total

yen
5.00

yen
—

yen
5.00

yen
10.00

5.00

—

5.00

10.00

(Notes) Forecasts for dividends have not been modified since the time of the most recently announced business forecast.

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3. Forecast for the Consolidated Results for the Year Ending March 2017（from April 1，2016 to March 31，2017）(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

10,000

3.0

690

19.9

680

17.1

130

(58.5)

13.17

20,000

(0.8)

1,300

(15.3)

1,250(18.3)

450(30.3)

45.60(Note) Forecasts for dividends have been modified since the time of the most recently announced business forecast.
For information on the revision of the forecast of consolidated financial results, please refer to the Notice Concerning the Revisionof the Forecast of Financial Results issued today (August 10, 2016).

※ 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) Adoption of simplified accounting practices or specific procedures in preparation of the quarterly
consolidated financial reports: Applicable* For details, please refer to “2. Summary Information, (2) Adoption of Simplified Accounting Methods in the

Preparation of Quarterly Financial Statements” on page 4 of the accompanying material.

(3) Changes in accounting policy, changes in accounting estimates, and restatements(i) Changes accompanying revisions of accounting standards, etc.: Applicable(ii) Changes other than the above: None(iii) Changes in accounting estimates: None(iv) Restatements: None
* For details, please refer to “2. Summary Information, (3) Changes in Accounting Principles, Procedures, andDisclosure Methods” on page 4 of the accompanying material.

(4) Outstanding shares (common shares)(i) Outstanding shares at the end of the fiscal years (including treasury shares):
The 1st quarter of the fiscal year ending March 2017: 11,960,000 shares
The fiscal year ending March 2016: 11,960,000 shares(ii) Treasury shares at the end of the fiscal years:
The 1st quarter of the fiscal year ending March 2017: 2,090,500 shares
The fiscal year ending March 2016: 2,090,390 shares(iii) Average number of shares at the interim accounting period
The 1st quarter of the fiscal year ending March 2017: 9,869,510 shares
The 1st quarter of the fiscal year ending March 2016: 10,856,263 shares* 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 to 1. (3) Explanation Concerning Future Forecast Information on the Consolidated
Financial Results, etc.” on page 4 of the accompanying material.
(To obtain supplemental documents relating to financial results)
Supplemental materials related to the Company’s quarterly and other financial results are posted on the company website.

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Contents
1. Qualitative Information Concerning the Settlement of Accounts for the 1st Quarter ·····················(1) Explanation Concerning the Operating Results ····························································(2) Explanation Concerning the Financial Position ····························································(3) Explanation Concerning Future Forecast Information on the Consolidated Financial Results, etc.

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2. Summary Information ······························································································(1) Changes in Major Subsidiaries During the 1st Quarter ·····················································(2) Adoption of Simplified Methods in the Preparation of the Quarterly Financial Statements ·········(3) Changes in Accounting Principles, Procedures, and Disclosure Methods ······························

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3. Consolidated Financial Statements ···············································································(1) Consolidated Balance Sheet ···················································································(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ········(Consolidated Statement of Income) ··········································································(Consolidated Statement of Comprehensive Income) ·······················································(3) Notes Concerning the Consolidated Financial Statements ················································(Note Concerning the Premise of a Going Concern) ······················································(Note in the Case of Significant Changes in the Amount of Shareholders’ Equity) ···················(Segment Information) ·························································································

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1. Qualitative Information Concerning the Settlement of Accounts for the 1st Quarter(1) Explanation Concerning the Operating Results
In the domestic information communication field, the ongoing diversification and popularization ofdevices such as smartphones, tablets and other multifunctional mobile terminals is proceeding apace.
Although the rate of growth of this market is modest in comparison with during the previous period of
rapid popularization, the smartphone shipment volume for the full 2015 fiscal year increased to morethan 29,160,000 after three years of declining shipments (*1). Furthermore, in keeping with the
expansion of the NVNO market, represented by bargain-priced smartphones, the demand for diverse
smartphone-compatible services is increasing steadily. In addition, consumer interest in new services
and contents, including equipment compatible with VR (Virtual Reality) is growing significantly, andbusiness model expansion is expected to precipitate further growth of the Internet service market.
The music content market, which is characterized by a steadily changing environment in which artists
are developing new promotional methods in accord with the dictates of the digital era, in future it will
become increasingly important to develop services that match changing market needs, consumer tastes
and lifestyles more quickly than ever before.
(*1) MM Research Institute, Ltd.,
General Situation of Mobile Phone Shipments in Japan for the Full 2015 Fiscal Year (published April 12, 2016)

In this environment, the Faith Group is continuing to utilize the results of the efforts it has been pouring
into content digital distribution ever since its establishment, and is forging ahead with its Multi-Content
and Multi-Platform Strategy of creating an environment that allows people to enjoy a wide diversity ofcontents whenever and wherever they choose. We are also strengthening the development of newservices in response to the changing market environment such as platforms that collect and organize theinformation flooding the Internet and then providing this to users after increasing its added value. In theContent Business, we remain continuously focused on constructing our music service platforms by fully
utilizing business synergies between the Group’s member companies, and also on expanding andreinforcing our music distribution business beginning with subscription-based BGM services.
Regarding the Faith Group business performance for the first quarter of the consolidated fiscal year
ending March 2017, net sales increased by 4.5% compared with the same quarter of the previous fiscal
year to ¥4,908 million while operating income increased by 212.7% year on year to ¥515 million,
ordinary income increased by 197.3% to ¥500 million, and net income attributable to the shareholdersof the parent company increased by 273.1% to ¥208 million
Information on each business segment is as follows.
Content BusinessIn the Content Business, the Faith Group is actively pursuing the development of new products in
response to the market environment including the ongoing popularization of smartphones, changing
music listening styles, etc. The Company is proceeding with measures to enhance the added value of its
contents, such as functional improvement and combinations with other services, etc., by verifying theresults of service contents and marketability, including with regard to existing businesses, while also
proceeding with service linkage and platformization in the interests of income diversification.
FaRao PRO is a solution service that provides essential functions centered on commercial-use BGM forrestaurants and retailers. The service has already been adopted by a number of major chain stores, andfrom the term under review, the Company has been working to expand its introduction to small andmedium-sized stores. We are also providing FaRao Voice, which is a commercial-use announcement
service designed for use alongside FaRao PRO. In addition, we launched FaRao PRO Hikari BOX+,
which brings together several services including an in-store BGM service and security cameras in asingle package. We developed this product jointly with Nippon Telegraph and Telephone West
Corporation and we are aiming to expand its popularization by providing store solution functions evenmore simply.
In the overseas development field, the Company established Faith France SAS as a local subsidiary
based in Angers, France, and launched a French FaRao PRO service. We consider that the deployment

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of a Japanese music contents delivery and distribution system on a worldwide basis including in thehigh-growth Asian countries will be an important factor in supporting the Company’s further businessgrowth. In future, we are planning to develop further new music businesses overseas.
Fans™ is a one-stop solution that can support a full range of artist-related activities such as fan club
operation, live ticket sales, etc. Fans™ began full-scale operation in April 2015 as a comprehensive
platform for the music business utilizing the Faith Group’s diverse music and artist-related service
functions. At the present time, the Company is approaching the task of attracting more artist users andfan users by reinforcing the functions required for facilitating exchanges between artists and fans. In
June 2016, we released the music player app Fans’ Player, which provides a service allowing users to
download recorded music and videos via a network by means a 16-figure serial ID numbers embedded
in CD packages and allows easy listening using an app.
As a result of the above developments, taking into account the ongoing positive deployment of newservices in line with the changing market environment and the decline in sales of services to featurephone users, the Content Business recorded net sales of ¥1,111 million (an decrease of 1.3% year onyear), and operating losses of ¥30 million (compared with operating income of ¥33 million for theprevious fiscal year).
Point Service BusinessIn the Point Service Business, although sales of new points issued by participating point card storesremained robust, sales of eco-points decreased following the end of the government-administered
reconstruction support home appliance eco-point system. As a result, this business recorded net sales of¥523 million, a decrease of 8.5% year on year, while operating income decreased by 27.2% year on yearto ¥39 million.
Columbia Business
Amid the severe environment facing the music and video-related industry in line with the continuing
shrinking of the music market, the Columbia Business proceeded with its strategy of strengthening new
future-oriented businesses in order to overcome the present situation in which it remains dependent onsales of package products for which the market remains sluggish.
Due mainly to higher sales of animation-related titles and game software titles and to an improved sales
performance in the artist management-related business, overall sales by the Columbia Business totaled¥3,274 million, an increase of 9.2% compared with the same quarter of the previous fiscal year. As forthe profit and loss situation, due increased sales of high-margin products launched in previous years,
this business segment recorded an operating income for the first quarter under review of ¥506 million,
an increase of606.2% year on year.
*The product and service names appearing in this document are trademarks or registered trademarks of Faith Inc. either
in Japan or in other countries.

(2) Explanation Concerning the Financial Position
Total assets as of June 30, 2016 decreased by ¥464 million compared to the end of the previous
consolidated fiscal year to ¥24,247 million. This result was mainly due to a decrease in “others” in thecurrent assets section.
Total liabilities decreased by ¥808 million compared to the end of the previous consolidated fiscal yearto ¥7,073 million. This result was mainly due to decreases in accrued expenses payable, and in “others”
in the current liabilities column.
Net assets increased by ¥344 million compared to the end of the previous consolidated fiscal year to¥17,173 million. This was mainly due to an increase in retained earnings due to the recording of net
income attributable to the shareholders of the parent company, and to an increase in minority interests.
As a result of the above, the equity ratio increased by 1.7 percentage points to 64.6%.

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(3) Explanation Concerning Future Forecast Information on the Consolidated Financial
Results, etc.
Performance forecasts are made based on information currently available to the Company, but there is apossibility that the actual performance figures will differ significantly from the forecast figures due to avariety of factors. In addition, for the Company’s current performance forecast for second quarter
cumulative accounting period and the full financial year please refer to the forecast issued today(August 10, 2016).

2. Summary Information(1) Changes in Major Subsidiaries during the 1st Quarter
Not applicable(2) Adoption of Simplified Methods in the Preparation of the Quarterly Financial Statements
Tax expenses for the Company and a portion of its consolidated subsidiaries are calculated by making areasonable estimate of the effective tax rate after applying tax effect accounting to the amount ofquarterly net income before tax deduction for the consolidated financial year including the current 1stquarter accounting period, and then multiplying the amount of quarterly net income before tax deduction
by the current estimated effective tax rate.

(3) Changes in Accounting Principles, Procedures, and Disclosure Methods(Changes in Accounting Principles)(Application of the Practical Solution on Accounting for Changes in Depreciation Method related to the2016 Tax Law Changes)
From the current first quarter term consolidated accounting term, we have applied the Practical Solution
on Accounting for Changes in Depreciation Method related to the 2016 Tax Law Changes (AccountingStandards Board of Japan (ABSJ) Statement No. 32, issued on June 17, 2016). In addition, we havechanged the depreciation method concerning building fixtures and structures acquired on or after April 1,2016 from the declining balance method to the straight-line method
These changes will have no material impact on the Group’s retained earnings or profitability.

43. Consolidated Financial Statements(1) Consolidated Balance Sheet
FY 2015(As of March 31, 2016)(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
Intangible fixed assets
Goodwill
OthersTotal intangible fixed assets
Investment and other assets
Investment securities
OthersAllowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets(Liabilities)
Current liabilities
Accounts and notes payable
Short-term loans payable
Lease obligations
Accrued expenses payable
Income taxes payable
Reserve for bonuses
Reserve for point card certificates
Reserve for sales returns
OthersTotal current liabilities
Fixed liabilities
Long-term loans payable
Net defined retirement benefits
Lease obligations
Deferred tax liabilities
OthersTotal fixed liabilities
Total liabilities

5(Unit: thousands of yen)
1st Quarter of FY 2016

(As of June 30, 2016)

12,680,124
2,388,481
242,521508,709
202,043
47,624
7,492
12,341
920,570(52,908)
16,957,000

12,812,847
2,300,701
237,139447,741
306,715
46,491
1,825
3,874
559,242(52,599)
16,663,979

2,894,315

2,871,437

1,959,316
874,354
2,833,671

1,925,877
882,153
2,808,030

1,753,502
554,302(280,607)
2,027,196
7,755,183
24,712,183

1,609,350
576,365(281,737)
1,903,9787,583,446
24,247,426

995,288686,120
16,1332,541,442
189,734
66,14733,874
92,333
1,627,967
6,249,041

955,078
686,120
13,8662,330,770
77,03443,07932,27689,2891,337,778
5,565,294

816,650
609,261
8,028
152,646
46,744
1,633,331
7,882,373

739,620
587,456
5,761
131,489
43,952
1,508,280
7,073,574

(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
Cumulative adjustment for retirement benefit
obligations
Total other accumulated comprehensive income
Stock acquisition rights
Minority interests
Total net assets
Total liabilities and net assets

6(Unit: thousands of yen)
1st Quarter of FY 2016

FY 2015(As of March 31, 2016)(As of June 30, 2016)

3,218,000
3,707,197
11,480,657(3,038,502)
15,367,352

3,218,000
3,707,686
11,640,003(3,038,648)
15,527,042

198,282(8,446)(928)

152,255(9,043)(1,057)

188,908
42,7341,230,815
16,829,810
24,712,183

142,155
30,365
1,474,289
17,173,851
24,247,426

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

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Interest on securities
Gains on investment partnership management
Foreign exchange gains
Miscellaneous receipts
Total non-operating income
Non-operating expenses
Interest paid
Equity method investment losses
Foreign exchange losses
Miscellaneous expenses
Total non-operating expenses
Ordinary income
Extraordinary income
Gains on reversal of subscription rights to shares
Gains on step acquisitions
OthersTotal extraordinary income
Extraordinary losses
Losses on disposal of fixed assets
OthersTotal extraordinary losses
Net income or net loss before income taxes
Corporate, local, and business taxes
Income taxes - deferred
Current quarter net income
Current quarter net income attributable to non-controllinginterests
Current quarter net income attributable to shareholders of
the parent company

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1st Quarter of FY 2015

1st Quarter of FY 2016

(April 1-June 30, 2015)
4,695,909
2,855,367
1,840,541
1,675,544
164,997(April 1-June 30, 2016)
4,908,878
2,822,072
2,086,806
1,570,942
515,863

1,413
1,977
34
3,327
158
5,499
12,410

286
2,834
7
4,195
－
3,723
11,047

3,959
4,259
－
882
9,101
168,306

3,556
18,582
2,818
1,505
26,462500,447

10,164
13,186
1,370
24,721

12,369－－12,369

3,799
500
4,299
188,727
97,235(7,749)99,24143,308

2,181
－
2,181
510,635
49,252
9,067
452,316
243,62255,933

208,693

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

Current quarter net income
Other comprehensive income
Valuation difference on other available-for-salesecurities
Foreign currency translation adjustments
Retirement benefit adjustments
Total other comprehensive income
Comprehensive income(Details)
Comprehensive income attributable to shareholders of
the parent company
Comprehensive income attributable to no-controllinginterests

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1st Quarter of FY 2015

1st Quarter of FY 2016

(April 1-June 30, 2015)
99,241(April 1-June 30, 2016)
452,316(19,776)(46,081)(14,078)(7,288)(41,142)
58,099(40)(253)(46,375)
405,941

18,213

161,940

39,885244,000

(3) Notes Concerning the Consolidated Financial Statements(Note Concerning the Premise of a Going Concern)
Not applicable(Note in the Case of Significant Changes in the Amount of Shareholders’ Equity)
Not applicable(Segment Information)
Ⅰ 1st quarter of the previous consolidated fiscal year/FY 2015 (April 1, 2015 through June 30, 2015)

1. Information on sales and profit or loss by reportable segment(Unit: thousands of yen)Content

Point Service Columbia

Total

Amount recorded in
Adjustment
Consolidated Financial
amount (Note 1) Statements (Note 2)

Net sales
Sales to externalcustomers
Intersegment sales
or transfer amount
Total
Segment income

1,125,972

571,8072,998,129

4,695,909－

4,695,909

49,264171

8,077

57,512(57,512)－1,175,236

571,978

3,006,207

4,753,422(57,512)

4,695,909

33,656

53,95971,705

159,321

5,675

164,997

Notes: 1. The segment income adjustment amount of ¥5,675 thousand is calculated by eliminating intersegment transactions.
2. Segment income amounts are adjusted with operating income in the quarterly consolidated profit and loss statement.

2. Information regarding impairment loss on fixed assets or goodwill by segment reported
This information is omitted since there is no critical impairment loss on fixed assets or significant
change in amount of goodwill.
Ⅱ 1st quarter of the current consolidated fiscal year/FY 2016 (April 1, 2016 through June 30, 2016)

1. Information on sales and profit or loss by reportable segment(Unit: thousands of yen)Content

Point Service Columbia

Total

Amount recorded in
Adjustment
Consolidated Financial
amount (Note 1) Statements (Note 2)

Net sales
Sales to externalcustomers
Intersegment sales
or transfer amount

1,111,231

523,248

3,274,398

4,908,878－

4,908,878

21,471－

13,32434,795(34,795)－

Total

1,132,702

523,248

3,287,723

4,943,674(34,795)

4,908,878

Segment income orloss(30,078)

39,276506,357

515,554308

515,863

Notes: 1. The segment income adjustment amount of ¥308 thousand is calculated by eliminating intersegment transactions.
2. Segment income or loss amounts are adjusted with operating income in the quarterly consolidated profit and loss statement.

2. Information regarding impairment loss on fixed assets or goodwill by segment reported
This information is omitted since there is no critical impairment loss on fixed assets or significant
change in amount of goodwill.

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