BRIEF STATEMENT OF CONSOLIDATED FINANCIAL RESULTS
FOR THE FULL FISCAL YEAR ENDED MARCH 2021
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 13, 2021
Faith, Inc. (Stock code 4295, Listed on TSE 1st section)(URL http://www.faith.co.jp/)
Representative: Hajime Hirasawa, CEO/President
Contact: Chikayo Suzuki, CFO/Executive Officer
Tel: +81-3-6855-7811
Date of General Meeting of Shareholders: June 25, 2021
Date of Submission of Annual Security Report: June 28, 2021
Starting Date of the Dividend Payment: June 28, 2021
Preparation of Supplementary Materials for Financial Results: Applicable/May 26, 2021
Information Meeting for Financial Results to be Held: Applicable/May 26, 2019 (for Institutional Investors and Analysts)
Amounts are rounded down to the nearest JPY 1 million.

1. Results for the Fiscal Year Ending March 2021 (From April 1, 2020 to March 31, 2021)(1) Consolidated Operating Results(Percentages indicate changes compared with the previous fiscal year.)

Net Sales

Operating Income

Ordinary Income

Year ending
March 2021

Millions of yen%

19,991

△0.5

763

98.2

821

74.2

△26

－

March 2020

20,093

△4.2

385

166.9

471

－

△884

－

(Note)%Net Income Attributable
to the Shareholders of the
Parent Company

Millions of yen%

Millions of yen%

Millions of yen

Comprehensive income: fiscal year ending March 2021: 1,314 million (—%); fiscal year ending March 2020: △446 million (—%)

Year ending
March 2021
March 2020

Net Income per
Share
Yen
△2.09
△67.93

Diluted Net
Income per Share
Yen——

Return on Equity
Capital
%
△0.2
△5.2

Ordinary Incomeon Total Assets
%
3.2
1.9

Operating Income
on Net Sales
%
3.8
1.9

(Reference) Equity in earnings of associated companies: fiscal year ending March 2021: ¥4 million;
fiscal year ending March 2020: ¥28 million(2) Consolidated Financial Position
Year ending
March 2021

Total Assets
Millions of yen
26,702

Net Assets
Millions of yen
17,627

Ratio of Equity Capital%
66.0

Net Assets per ShareYen
1,395.33

March 2020

24,746

16,43966.4

1,301.66(Reference) Equity capital: fiscal year ending March 2021: ¥17,627 million; fiscal year ending March 2020: ¥16,439 million(3) Consolidated Cash Flow Results
Year ending
March 2021

Cash Flow fromOperating Activities
Millions of yen
1,243

Cash Flow from
Investing Activities
Millions of yen△673

Cash Flow from
Financing Activities
Millions of yen△200

Cash and Cash
Equivalents at Year End
Millions of yen
12,946

March 2020

1,175

△512

△165

12,585

2. Dividends
Dividends per Share
(Record dates)

Year ending
March 2020
March 2021
March 2022
(Forecast)

1 stQuarter
Yen

InterimYear-endYen

3 rdQuarter
Yen

Yen

Total
(Annual)
Yen

—
—
—

5.00
5.00
5.00

—
—
—

5.00
5.00
5.00

10,00
10.00
10.00

1

Total Dividend
Payment

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

Millions of yen

133
128

%

%

—
—
126.4

0.8
0.7

3. Forecast for the Consolidated Results for the Year Ending March 2022
（from April 1, 2021 to March 31, 2022）(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
Attributable to the
Shareholders of the
Parent Company

Net Income
per Share

Millions ofyen%Millionsof yen%Millionsof yen%Millionsof yen

%

Yen

8,500

△15.0

200

△63.8

198

△70.3

40

△87.3

3.16

18,000

△10.0

550

△28.0

500

△39.2

100

－

7.91

(Note) Since the Company will apply the Accounting Standard for Revenue Recognition, etc. (ASBJ Statement No. 29), from the
beginning of the fiscal year ending March 31, 2022, the consolidated results forecast described above represents the amounts
after applying the said accounting standard. Regarding the impact of the accounting standard on revenue recognition, pleaserefer to “1. Overview of Operating Results, etc., (4) Future Outlook” on page 5 of the accompanying material.

※ Notes(1) Changes in significant subsidiaries (accompanying changes in scope of consolidation): None
Newly added subsidiaries: 0 companies (subsidiary’s name:)Removed subsidiaries: 0 companies (subsidiary’s name:)(2) Changes in accounting policy, changes in accounting estimates, and restatements(2)-1. Changes accompanying revisions of accounting standards, etc.: None(2)-2. Changes other than the above: None(2)-3. Changes in accounting estimates: None(2)-4. Restatements: None
(3) Outstanding shares (common shares)(3)-1. Outstanding shares at the end of the fiscal years (including treasury stock):
The fiscal year ending March 2021: 13,831,091 shares
The fiscal year ending March 2020: 13,831,091 shares(3)-2. Treasury stock at the end of the fiscal year:
The fiscal year ending March 2021: 1,197,855 shares
The fiscal year ending March 2020: 1,201,840 shares(3)-3. Average number of shares during the accounting period
The fiscal year ending March 2021: 12,629,621shares
The fiscal year ending March 2020: 13,016,759 shares(Note) The number of shares of treasury stock at the end of the fiscal year includes those shares (257,200 shares for the fiscal year
ending March 2021, and 262,500 shares for the fiscal year ending March 2020) contributed as trust assets of theperformance-linked stock compensation plan. In addition, these shares are included in the shares of treasury stock deductedin calculating the average number of shares during the accounting period (261,483 shares for the fiscal year ending March
2021, and 153,125 shares for the fiscal year ending March 2020).

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(Reference) Overview of Non-Consolidated Results
Results for the Fiscal Year Ending March 2021 (From April 1, 2020 to March 31, 2021)(1) Non-Consolidated Operating Results(Percentages indicate changes compared with the previous fiscal year.)

Net Sales

Operating Income

Ordinary Income

Net Income

Year ending
March 2021

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

2,227

3.4

△380

－

△230

－

△566

－

March 2020

2,153

△1.8

△380

－

△927

－

△1,468－Net Income per ShareYear ending
March 2021
March 2020

Yen
△44.82△112.85

Diluted Net Income per
Share
Yen
—
—

(2) Non-Consolidated Financial Position
Total Assets
Year ending
March 2021
March 2020
(Reference)

Net Assets

Ratio of Equity
CapitalNet Assets per Share

Millions of yen

Millions of yen%

Yen

19,80916,73784.5

1,324.90

17,551

16,192

92.3

1,282.14

Equity capital: fiscal year ending March 2021: ¥16,737 million; fiscal year ending March 2020: ¥16,192 million* This financial results report is exempt from quarterly review procedures.

* Statement regarding the proper use of financial forecasts and other special remarks(Notice regarding statements concerning the future)
Statements concerning the future, such as performance forecasts, etc., described in the present material are based on information
currently available to the Company and on certain assumptions judged as reasonable by the Company. The Company’s actual
performance may differ substantially from these forecasts as a result of various factors beyond the Company’s control. For details of
cautions, etc., employed in making performance forecasts and the assumptions underlying performance forecasts, please refer to “1.
Overview of Operating Results, etc., (4) Future Outlook” on page 5 of the accompanying material.
(To obtain supplemental documents relating to financial results)
Supplemental Materials for Financial Results are posted on the company website on May 26, 2021.

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

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1. Overview of Operating Results(1) Overview of Operating Results for the Current Term
In the Japanese information and communications field in 2019, the Internet penetration rate remained high at 89.8%, andthe percentage of households owning one or more smartphones reached 83.4%, exceeding the percentage of households
that own personal computers (*1). In addition, while the movement away from television has continued since the year
2000, mainly by the younger generation, advertising expenses for the Internet in Japan increased by 5.9% in 2020 fromthe previous year to ¥2,229 billion, exceeding advertising expenses for television of ¥1,655.9 billion for the second
consecutive year (*2). On the other hand, the prolonged spread of the novel coronavirus (COVID-19) infection has led to
the further expansion of services that allow people to communicate with partners in remote locations online from the
comfort of their own homes, and new lifestyles are taking root, including diverse working styles such as telework and“contactless” consumer behavior. Under these circumstances, it is expected that the shift to services in accordance withthe era of digitalization will further accelerate as the Internet usage rate rises, smartphones become even more widespread,and G5 communication services develop.
*1. Source: Ministry of Internal Affairs and Communicatio ns, 2019 Telecommunications Usage Trend Survey Results*2. Source: Dentsu Inc., 2020 Advertising Expenditures in Japan

In the entertainment market in 2020, sales in the global music market centered on streaming services grew by 7.4%
year-on-year to approximately ¥2,332.8 billion (US$21.6 billion), marking its sixth consecutive year of sales growth (*3).
Meanwhile in Japan, the production value of music software including music videos decreased by 15% year-on-year to¥194.1 billion, and sales of packaged products continued to decline, but sales of fee-based music distribution increasedby 11% to ¥78.3 billion. In the paid music distribution sales category, subscription audio streaming increased by 27%
year-on-year to ¥58.9 billion, accounting for 75% of total paid music distribution sales (*4). Conversely, large-scale eventsand live concerts have been postponed and canceled due to the spread of COVID-19, and the size of the live
entertainment market in 2020 is expected to decrease by about 80% compared to the previous year (*5). Meanwhile, newways of enjoying live entertainment are taking root, such as “non-audience live streaming” in which live performances
are transmitted over the Internet with no audience at the venue, and “hybrid performances”, in which a limited number ofaudience members are allowed into the venue and the performance is also distributed. With live performances in front ofvarious audience sizes being distributed, the size of the digital live performance market is expected to reach ¥14 billion in
2020, and it is projected to expand rapidly to about ¥100 billion by 2024 (*6).
*3. Source: IFPI, Global Music Report 2020 - THE INDUSTRY IN 2021
*4. Source: Recording Industry Association of Japan (RIAJ), The Recording Industry in Japan 2021
*5. Source: PIA Research Institute, Japanese Live Entertainment Market Size Preliminary Report (published October 27, 2020)*6. Source: CyberZ Co., Ltd., Domestic Digital Live Entertainment Marke t Trend Survey

Founded in 1992, Faith Inc. was the first company in the world to commercialize ringtones, and has steadily growncentered on the music distribution business and in step with the popularization of mobile phones. However, the spread ofsmartphones in today’s music market has been accompanied by the diversification of media such as streaming, user
upload content (UUC) that allows general users to easily transmit information to society, and social media, with the resultthat all kinds of activities in the music industry are now changing, including content distribution methods, consumptionstyles and content production methods.
In the current environment, the Faith Group is continuing to utilize the results of the efforts it has been pouring into
digital content distribution ever since its establishment, and is forging ahead with its Multi-Content and Multi-Device
Strategy of creating environments in which people can enjoy a wide diversity of contents whenever and wherever theychoose. We are also strengthening the development of new services in response to the changing market environment,
which includes platforms that collect and organize the information flooding the Internet and then providing this to users
after increasing its added value.
In June 2020, Faith launched a new service called Thumva, which is an innovative live performance distribution platform
with a variety of additional features. As an Internet-based viewing service that provides a new kind of live experience,
Thumya makes possible group viewing and group text messaging, includes a gifting function for artists, and allows theaudience to be taking part in a live performance without actually being at the venue. A considerable number of artists
have already performed “live” on Thumva without a live audience, and we are planning to continue live broadcastingwith a variety of lineups in future. Since the launch of the service, about 200 performances have been delivered and thenumber of registered members has exceeded 140,000 (as of March 2021).
Two Faith facilities, namely PLUSTOKYO, Tokyo's largest music lounge, and CROKET MIMIC TOKYO, anentertainment facility that stages world-class performances centered on impersonation, have suspended their operations
due to the spread of COVID-19 infections, and are currently providing services related to live distribution.
In March 2021, PLUSTOKYO resumed operations, mainly on the rooftop floor, after taking the necessary measures inaccordance with the Tokyo Metropolitan Government's guidelines for preventing the spread of infectious diseases. In
addition, CROKET MIMIC TOKYO has suspended its existing operations and has begun operating as a filming and live
streaming venue. We will continue to give utmost priority to preventing the spread of COVID-19 infections and ensuringsafety, and we will carefully discuss the timing of the resumption of live performances based on public safety policies
and action plans.
The Faith Group fully introduced a full-scale teleworking system from October 1, 2020. In addition, we haveconsolidated our main office functions, to the Minami Aoyama Office, which has been completely renovated. We willcontinue our efforts to improve the Group’s management efficiency and profitability, and we will realize diverse andefficient new ways of working based on the concept of “activity-based working” (*7) .

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*7. A way of working that allows individuals to choose their workspace and style according to their work.

Regarding the Faith Group’s business performance for the consolidated fiscal year ending March 2021, sales decreased
by 0.5% year on year to ¥19,991 million, mainly due to a decrease in sales of existing distribution services, which are
now the Group’s largest sales category, and to the suspension of store operations to prevent the spread of COVID-19
infections. However, operating income increased by 98.2% year-on-year to ¥763 million, while ordinary income
increased by 74.2% year-on-year to ¥821 million due to strong performances by the Label business and the Points
Business. As a result, after taking into account office relocation expenses associated with office consolidation andimpairment losses on fixed assets posted as extraordinary losses, the Group posted a net loss attributable to the owners of
the parent company of ¥26 million (compared to a net loss attributable to shareholders of the parent company of ¥884
million for the same period of the previous year).
Information on each business segment is as follows.

Content BusinessIn the Content Business, as sales in the existing distribution business are continuing to decline, the Faith Group willcontinue to invest in new growth fields, such as developing new products, interlinking various services and creating
platforms to capture diversifying profit opportunities, and promoting overseas business expansion.
We are actively developing FaRao PRO not only as a service providing business BGM but also for sales activities
focused on expanding the functions necessary for store management, such as solutions and announcement functions thatmake store-branding proposals. In addition to conventional products using tablet devices, we have also released an
app-version service that offers reduced initial costs and we are working to strengthen retail store sales throughcollaboration with the Point Service Business. Moreover, based on our Japanese service, we will continue to aim to create
and revitalize the new BGM market.
In Fans’, our platform of services for artists based on the D2C (*8) business model, which is expected to expand further infuture, we are enhancing the functions essential to artists’ musical activities such as official website construction, music
and video distribution, sales of artist goods, and fan club operation. We are also working to further expand the functionsof Fans’, as with the introduction in June 2019 of a system that contributes to the creation of communities by spreading
information sent out by creators through strengthened SNS cooperation. We are aiming to acquire new users and expand
the membership base of Fans’ as a service that allows more artists to disseminate their works and information freely, andwe will strive to improve the service quality by pursuing enhanced convenience.
*8. Abbreviation of “Direct to Consumer”—a business model for delivering services and products planned and manufactured by Faith directly to users

Regarding the performance of this segment, as a result of declining sales in the carrier official website service and thesuspension of store operations due to the spread of COVID-19 infections, the Content Business recorded net sales of¥2,929 million (an decrease of 18.0% year on year) and an operating loss of ¥599 million (compared with an operating
loss of ¥643 million for the previous fiscal year).

Point Service BusinessIn the Point Service Business, in addition to providing point issue services to retail stores, we offer total support for pointissue data acquisition, analysis and sales promotion utilization as a series of cycles from planning to operation, and we
provide outsourcing services that maximize retail sales promotion efficiency.
Regarding the performance of this segment, the issue of points at existing client stores increased substantially, with theresult that net sales increased by 25.3% year-on-year to ¥3,488 million and operating income increased by 210.0%
year-on-year to ¥323 million.

Label Business
Amid the difficult environment facing the music and video-related industry in line with the continuing shrinkage of themusic market, the Label Business is proceeding with its strategy of strengthening new future-oriented businesses in orderto overcome the present situation in which it remains dependent on sales of package products.
Regarding the performance of this segment, net sales decreased by 1.2% year-on-year to ¥13,573 million due to delays inreleases of titles and to a decrease in the activities of affiliated artists in the course of the effort to prevent the spread of
COVID-19 infections. However, operating income increased by 12.4% year-on-year to ¥1,037 million yen due to strong
sales of animation titles and increased sales titles involving the use of high-margin sound sources.
*Product and service names appearing in this document are trademarks or registered trademarks of Faith , Inc. either in Japan or in othercountries.

(2) Overview of Financial Position for the Current Term
Total assets as of the end of the consolidated fiscal year ended March 31, 2021 increased by ¥1,955 million from the endof the previous consolidated fiscal year to ¥26,702 million, a year-on-year increase of 7.9%. This result was mainly
attributable to an increase of ¥361 million in cash and deposits, an increase of ¥229 million in buildings and structuresdue to office renovation, a decrease in software due to an impairment loss of ¥123 million, and an increase of ¥1,753
million in investment securities.
Total liabilities increased by ¥766 million compared with the end of the previous consolidated fiscal year to ¥9,074

3

million, a year-on-year increase of 9.2%. This result was mainly attributable to an increase of ¥146 million due to anincrease in asset retirement obligations (current), and an increase of ¥540 million in deferred tax liabilities.
Net assets increased by ¥1,188 million compared with the end of the previous consolidated fiscal year to ¥17,627 million,a year-on-year increase of 7.2%. This result was mainly attributable to an increase in the valuation difference on
available-for-sale securities of ¥1,250 million, and to a net loss of ¥26 million attributable to shareholders of the parent
company.
The equity ratio became 66.0%.

(3) Overview of Cash Flow for the Current Term
Cash and cash equivalents at the end of the consolidated fiscal year ended March 31, 2021 increased by ¥361 million to¥12,946 million, an increase of 2.9% compared with the end of the previous consolidated fiscal year.
Details of cash flow during the fiscal year under review and its main contributory factors were as follows:(Cash flow from operating activities)
Cash flow from operating activities amounted to an inflow of ¥1,243 million (compared with an inflow of ¥1,175 million
for the previous consolidated fiscal year), attributable mainly to income before income taxes and minority interests of¥462 million, depreciation and amortization expenses of ¥369 million, impairment losses of ¥137 million, amortization of
goodwill of ¥124 million, an increase in the reserve for bonuses of ¥4 million, a decrease in inventories of ¥185 million,
and the payment of ¥554 million in corporation taxes.
(Cash flow from investing activities)
Cash flow from investing activities amounted to an outflow of ¥673 million (compared with an outflow of ¥512 million
for the previous consolidated fiscal year), attributable mainly to expenditure of ¥438 million in respect of the acquisitionof tangible fixed assets, expenditure of ¥41 million in respect of the retirement of tangible fixed assets, expenditure of¥110 million in respect of the acquisition of software, expenditure of ¥100 million for the acquisition of investment
securities, and income of ¥76 million in respect of income from the sharing of profits from investment partnerships.
(Cash flow from financing activities)
Cash flow from financing activities amounted to an outflow of ¥200 million (compared with an outflow of ¥165 million
for the previous consolidated fiscal year), due mainly to expenditure of ¥271 million in respect of repayment of long-termloans, income of ¥200 million in respect of proceeds from long-term loans, and expenditure of ¥128 million in respect ofdividend payments, etc.

(4) Future Outlook
The Faith Group’s business performance forecasts for next consolidated fiscal year (FY 2021; ending March 31, 2022)
are for net sales of ¥18,000 million, an operating income of ¥550 million, an ordinary income of ¥500 million, and a net
income attributable to the shareholders of the parent company of ¥100 million. Net sales for the next fiscal year are
expected to decrease by ¥2,000 million compared to the net sales under the previous accounting standard (¥20,000
million yen) due to the application of the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29), etc.,
and the net amount will be presented instead of the gross amount. These changes will have no impact on reporting of thevarious profit amounts such as operating profit.
The Faith Group is aiming to achieve changes in behavioral patterns fostered by the prolongation of the COVID-19
pandemic and the establishment of new values after the pandemic ends. In addition, we will endeavor to secure fundswith a view to expediting strategic and agile investments in the entertainment industry, and we will respond quickly andflexibly to changes in the business environment.

(5) Basic Policy on Profit Allocation and Current Term/Next Term Dividend Distribution
Faith Inc. will continue its policy of giving priority to securing the funds necessary for strengthening its businessstructure and making aggressive business investments. At the same time, it also recognizes the return of profits toshareholders to be an important management task. For this reason, Faith Inc. will consider the payment of dividends;
taking into account its operating results and financial position while keeping in mind the above-described situation.
The Company’s dividend for the current fiscal year will be decided by resolution of the Board of Directors with the aimof making flexible payments to shareholders regardless of the timing of the General Meeting of Shareholders, and theCompany is planning to pay a dividend of ¥10 per share (including an interim dividend of ¥5 that has already been paid).
Regarding the dividend for the next fiscal year, the Company plans to pay a dividend of ¥10 per share (including aninterim dividend of ¥5 per share) based on our basic policy of continuously paying stable dividends.

(6) Business Risks
1) Risks related to business content
Content Business(a) Business environment
The Faith Group develops new markets by creating services that users want to use based on original business solution
proposals and develops content services and wide-ranging enterprise support services through tie-ups with leading
companies in various fields such as content providers. Competition is intense in the content business that the Group andits collaborating content providers are striving to develop, and it is possible that the number of new entrants in thisbusiness will continue to increase in future. If unit prices of content decrease due to price competition, etc., if the content

4

services of the Group and its collaborating content providers fail to meet the needs of users, or if the number of users
decreases, then there is a possibility that sales will not expand.
In some cases, the Group may provide server construction and operation services in order to meet the needs of content
provider customers. In so doing, the Group makes every effort to prevent operational management failures, and even in
the unlikely event of such a failure occurring, we take emergency measures and have a system in place that allows us torestore operation quickly by remote control. However, in the case that unavoidable failures occur due to natural disasters,
etc., which make it difficult to provide services for an extended period, this may adversely affect the Group’s
performance.

(b) Quality control
The Faith Group makes every effort to ensure quality control by operating a thorough system supported by technologicaldevelopment. However, even after the customer company's acceptance inspection, if deficiencies, discrepancies ordefects are found in the Group's technology, in the case that a user suffers a loss as a consequence of using a product orservice that employs the Group’s technology, this may adversely affect the Group’s current or future businessperformance.

(c) Legal regulations
Increasing damage caused by illegal acquisition and modification of data on the Internet and by leakage of personal
information has led to the development of legal regulations in Japan as elsewhere. The Faith Group’s operations are
related to the business of distributing content via the Internet, so in the case that laws and regulations or voluntary
restraints between businesses are established in this field, or if the application of laws and regulations becomes clear,
there is a possibility that the Group’s business development will be restricted and that costs may be incurred with regard
to the implementation of countermeasures.

Point Service Business
The Faith Group sells points to participating point member stores, and in order to prepare for the cost burden of using
points, with regard to the balance of unexchanged points among issued points, the required amount that is expected to be
used in future is estimated and recorded as a provision based on the past point collection rate. However, if points areexchanged in excess of the estimated amount, this may adversely affect the Group’s business performance.

Label Business(a) Economic situation and market environment
The Faith Group's main businesses, including the sale and distribution of music and video titles such as
CDs and DVDs, BtoB business, and direct sales business, are affected by the economic conditions in the regions andcountries where these products are sold. Many of the Group's products are not necessarily indispensable for consumers,
and their sales are strongly influenced by market trends, consumer preferences and consumption behavior. For this reason,
if the demand for the products of music and video-related industry in general declines due to a recession or reduced
consumer spending, the Group's business performance and financial condition may be adversely affected. An increase inillegal copying and downloading is considered to be one of the factors causing the current decline in sales of music andvideo-related titles and the contraction in the overall scale of the music and video-related industry. Competition in themusic and video-related industry is intensifying in this shrinking market, and this has a significant effect on the Group's
sales and profitability. Digital music distribution has become popular in recent years, and the Group is focusing its effortson this field as well. However, the expansion of this market may have a negative impact on sales of the Group’s
conventional products such as music CDs. Due to the recent revision of the Japanese Copyright Act, downloading ofillegal copies is now prohibited, and consequently it is expected that the number of illegal downloads will decrease, but
illegal downloads from illegal distribution sites still appear to be at a high level, which is likely to adversely affect theGroup’s sales. Moreover, in the music market, price competition is intensifying, as can be seen in the release of
low-priced CDs, which may adversely affect the Group’s business performance and financial condition.
(b) Music works and artists
Most of the revenue generated by the Faith Group's business depends on the creation of hits by popular artists, and thestability and growth of the Group’s management derives from the creation of artists and music works that are expected to
become hits. The Group will continue to discover and develop new artists who will be accepted by consumers, but since
the creation of hit titles involves complex and uncertain factors such as consumer preferences and trends, lack of successat producing hits may adversely affect the Group’s business performance and financial condition.
(c) Performance plan
The Faith Group's sales and profitability rest on a low proportion of fixed and continuous income, and are strongly
influenced by the sales situation of individual music titles. Since the sales situation changes due to a number of factors
such as the trends of the times and consumer preferences, sales may fall below the forecast levels predicted from past
results so that the targets specified in the initial performance plan may not be achieved. In addition, the production ofmusic CDs and other products may be postponed or canceled due to factors involving artists, production, andmanufacturing and sales outsourcing, which may cause the Group’s performance to fall below the level specified in theinitial performance plan. For this reason, it is difficult to predict business performance elements such as sales forecasts,
and a decline in profit for a specific quarter may change the business performance plan and affect the businessperformance. In the manufacturing and sales contract business, depending on the circumstances of individual business
partners, the subcontractor may be changed from the Group to another subcontractor, which may be a factor in driving
the Group’s actual business performance below level specified in the initial performance plan.
(d) Retail price maintenance system and returns prevention measures
Under the Antimonopoly Act, copyrighted works such as music CDs, newspapers, books, etc. may be legally resold

5under a resale price maintenance system (resale system). Although there is no guarantee that the system will last forever,the Japan Fair Trade Commission has announced it’s view that it is reasonable to leave the system in place for theforeseeable future. Moreover, in recent years, the copyright law has been revised to protect the interests of copyrightholders of music CDs produced locally under license agreements for the purpose of selling them in Asia at low cost. A
so-called returns prevention measure has been introduced to prohibit the import of commercial records produced for the
purpose of distribution overseas under certain conditions. If in the future, the Antitrust Law or Copyright Act is reviewed,
there is a possibility that the Faith Group’s sales may be reduced.
(e) Returns
Due to the resale system for products such as music CDs, retailers cannot set the selling price freely. Instead, there is abusiness practice under which retailers can return products within a certain range. For this reason, some products that do
not sell well may be returned in the future. The Faith Group properly prepares a reserve for return adjustments based on
past returns and other provisions, and is preparing for this eventuality, but if more returns occur due to unexpectedly poorsales, etc., there is a possibility that the Group’s business performance may be adversely affected by a decrease in sales
and profit.
2) Intellectual property rights
The Faith Group has filed patent applications and trademark applications related to its technology, and the Group intends
to continue making similar promotion efforts in future. With respect to intellectual property rights such as patent rights,
trademark rights, copyright (“intellectual property rights”), the Group is strengthening its efforts to protect these rights
and to prevent infringements. However, it is difficult to predict how the intellectual property rights of third parties will beapplied to the Group’s business. For example, in the future, if a patent right related to the Group’s business model or to
related technology is established by a third party, or if a patent right not recognized by the Group is established, there is apossibility that the Group may be required to compensate the patent holder for damages related to the infringement of thesaid patent right, or it may become impossible for the Group to continue to conduct all or part of the business related tothe patent. In addition, even if the patent holder allows the use to continue, payment of a license fee may be obligated,
and in such a case, this may adversely affect the Group’s performance.
Among the intellectual property rights owned by the Group, rights such as copyrights and neighboring rights represent
one of the strengths of the Group’s business. However, there is a possibility that third parties may infringe on the rights
regarding songs sold by the Group or for which the Group holds rights or that the Group may unintentionally infringe therights of third parties. Such copyright infringements may adversely affect the Group’s business performance and financial
condition.
3) Leakage of personal information
Regarding the protection of personal information, the Faith Group has established a personal information protection
policy for the purpose of completing the internal system and instilling an awareness of compliance among its employees,
as well as exercising the utmost caution in conducting internal education and implementing security measures for
information systems. However, if personal information is leaked for some reason, it may damage the Group’s social
credibility and adversely affect its business performance and financial condition.
4) Disposal of businesses
The Faith Group conducts business reviews as appropriate, which may result in losses if it decides to sell or dispose of
related assets. On the other hand, the Group actively considers business tie-ups with other companies, and there is apossibility that such business tie-ups may adversely affect the Group’s business performance and financial condition.
5) Pension system
The Faith Group has established a defined benefit corporate pension plan for beneficiaries and a pension plan for
employees that combine a lump-sum retirement allowance plan with a defined contribution pension plan. In future, if
pension asset management yields decline or if the actuarial assumptions or the assumptions used to calculate retirement
benefit obligations are changed, retirement benefit obligations and retirement benefit expenses may increase, which could
adversely affect the Group’s business performance and financial condition.
6) Influence of COVID-19 infections
In keeping with the Japanese Government’s request for stores to practice self-restraint in retail operations and forindividuals to refrain going out unnecessarily in order to limit the spread of novel coronavirus (COVID-19) infections, it
is expected that personal consumption will remain sluggish and store visits will decline, and that depending on the
progress of the situation, the call to refrain from retail activities and the closing of store facilities may be prolonged. This
may affect the Group’s business performance. In addition, if COVID-19 infections occur affecting the Group’s head
office, business offices, store facilities, artists, production, manufacturing and sales consignees, etc., there is a possibility
that this may hinder the Group’s business activities and affect its business performance and financial condition.

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

6

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

FY 2019(As of March 31, 2020)(Assets)
Current assets
Cash and deposits
Accounts and notes receivable
Marketable securities
Commercial products
Products in progress
Primary materials and inventory goods
Corporation tax refunds receivable, etc.
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures
Accumulated depreciation
Buildings and structures (net base)Machinery and delivery equipment
Accumulated depreciation
Machinery and delivery equipment (net base)Tools, devices and equipment
Accumulated depreciation
Tools, devices and equipment (net base)
Land
Lease assets
Accumulated depreciation
Lease assets (net base)Total tangible fixed assets
Intangible fixed assets
Software
Goodwill
Other intangible fixed assets
Total intangible fixed assets
Investment and other assets
Investment securities
Deferred tax assets
Other investment and other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

7

FY 2020(As of March 31, 2021)

12,635,849
2,199,541
230,879
446,811578,771
75,973
68,295
482,059△18,532
16,699,651

12,997,014
2,018,712
229,796366,536
491,10958,592
71,062519,948△18,669
16,734,103

2,060,497△1,041,806
1,018,691
604,513△590,096
14,416
1,058,825△947,266
111,558
1,501,684
38,823△38,702121
2,646,472

2,154,482△906,742
1,247,739
612,271△568,857
43,413
991,444△894,614
96,8291,558,120
5,469△5,469－2,946,103

268,262
1,520,453
187,244
1,975,960

144,550
1,395,695
213,226
1,753,472

2,145,096
765,419
1,037,457

3,898,711
846,890
1,108,603△523,083
3,424,888
8,047,321
24,746,972△585,342
5,268,863
9,968,439
26,702,542

(Unit: thousands of yen)

FY 2019(As of March 31, 2020)(Liabilities)
Current liabilities
Accounts and notes payable
Short-term loans payable
Current portion of long-term debt
Accounts payable-otherAccrued expenses payable
Income taxes payable
Reserve for bonuses
Reserve for point card certificates
Reserve for sales returns
Asset retirement obligations
Other current liabilities
Total current liabilities
Fixed liabilities
Long-term loans payable
Net defined retirement liabilities
Reserve for stock benefits for directors
Asset retirement obligations
Deferred tax liabilities
Other fixed liabilities
Total fixed liabilities
Total liabilities(Net assets)
Shareholder's equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholder's equity
Other accumulated comprehensive income
Valuation difference on marketable securities
Foreign currency translation adjustments
Cumulative adjustment amount for retirement benefit
obligations
Total other accumulated comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

8

FY 2020(As of March 31, 2021)

1,039,823
340,000
269,900
706,8172,725,341
341,858
347,424
364
90,279－824,594
6,686,405

964,025
340,000
258,700
741,426
2,796,448
371,157
352,424251
55,441
146,892
1,140,484
7,167,251

440,350
652,153
16,401
39,183
333,275
140,191
1,621,554
8,307,960

379,850
576,92233,12939,233874,056
4,453
1,907,645
9,074,896

3,218,000
2,840,095
10,854,165△1,124,344
15,787,916

3,218,000
2,840,667
10,698,825△1,121,619
15,635,873

737,236△21,026△65,114

1,987,860△30,807
34,719651,096

1,991,773－
16,439,012
24,746,972－
17,627,646
26,702,542

(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 marketable securities
Gain on foreign exchange
Gain on equity method investment
Gain on investment partnership management
Subsidy income
Miscellaneous receipts
Total non-operating Income
Non-operating expenses
Interest paid
Loss on foreign exchange
Loss on valuation of investment securities
Loss on sale of investment securities
Loss on investment partnership management
Miscellaneous expenses
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of shares of affiliates
Gain on sale of investment securities
Other extraordinary income
Total extraordinary income
Extraordinary losses
Loss on disposal of fixed assets
Loss on valuation of investment securities
Loss on sale of investment securities
Office relocation expenses
Impairment loss
Total extraordinary losses
Current term net income or net loss before taxes (△ = net loss)
Corporate, local, and business taxes
Income taxes - deferred
Total corporate, local, and business taxes
Current term net income net income or net loss (△ = net loss)
Current term net income or net loss attributable to non-controllinginterests (△ = net loss)
Current term net income or net loss attributable to shareholders of
the parent company (△ = net loss)

9

FY 2019(April 1, 2019 ~March 31, 2020)
20,093,040
12,605,521
7,487,518
7,102,429
385,088

FY 2020(April 1, 2020 ~March 31, 2021)
19,991,491
12,611,702
7,379,788
6,616,353
763,435

309
4,678
121
－
28,284
117,104－
43,727
194,226

278
3,922
15
759
4,458
181,822
46,63434,516272,408

5,744
10,076
1,016
2,076
79,857
8,685
107,456
471,858

5,530
－
1,131
－
202,951
4,425
214,038
821,804－
70,500809
71,309

3,909

6,779
754,346
7,088△769,536
437,888△323,124
114,764

58,516
26,757
4,931
135,768
137,369
363,342462,371
571,052△82,255
488,797△884,300－△26,425－△884,300△26,425－
544,490
1,312,704

－
－
3,909

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

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

10

FY 2019(April 1, 2019 ~March 31, 2020)△884,300

FY 2020(April 1, 2020 ~March 31, 2021)△26,425430,201△10,089
17,644
437,755△446,544

1,250,623△9,781
99,834
1,340,676
1,314,251△446,544

1,314,251－－

(3) Consolidated Statement of Changes in Shareholders’ Equity
FY 2019 (April 1, 2019 ~ March 31, 2020)(Unit: thousands of yen)
Shareholders' equity
Capital stock Capital surplus
Balance at beginning of period

3,218,000

3,019,175

Retained
Total shareholders’
Treasury stockearnings
equity11,872,088
17,306,948△802,315

Changes of items during theaccounting period
Dividends paid

△133,622△133,622

Net gain or net loss (△) attributable
to shareholders of parent company△884,300△884,300

Acquisition of treasury stock

Balance at end of period△690,108

368,079

189,000△179,079

Disposal of treasury stock
Changes in non-equity items during
the accounting period (net amount)
Total changes during the accounting
period△690,108－△179,079△1,017,922△322,029△1,519,031

3,218,000

2,840,095

10,854,165△1,124,344

15,787,916

Accumulated other comprehensive income
Valuation
Retirement
Foreigndifference
benefitcurrency
on otherrelatedtranslation
marketableadjustment
adjustments
securitiess
Balance at beginning of period

307,035△10,936△82,758

Total otheraccumulated comprehensive
income213,340

Minority
Interests－

Total net
assets17,520,288

Changes of items during theaccounting period
Dividends paid

△133,622

Net gain or net loss (△) attributable
to shareholders of parent company△884,300△690,108

Acquisition of treasury stock

189,000

Disposal of treasury stock
Changes in non-equity items during
the accounting period (net amount)
Total changes during the accounting
period430,201△10,089

17,644

437,755

437,755

430,201△10,089

17,644

437,755－ △1,081,275

Balance at end of period

737,236△21,026△65,114651,096－11

16,439,012

FY 2020 (April 1, 2020 ~ March 31, 2021)(Unit: thousands of yen)
Shareholders' equity
Capital stock Capital surplus
Balance at beginning of period

3,218,000

2,840,095

Retained
Total shareholders’
Treasury stockearnings
equity10,854,165 △1,124,344
15,787,916

Changes of items during theaccounting period
Dividends paid

△128,914△128,914

Net gain or net loss (△) attributable
to shareholders of parent company△26,425△26,425

Acquisition of treasury stock

Balance at end of period△1,137

3,862

4,434

572

Disposal of treasury stock
Changes in non-equity items during
the accounting period (net amount)
Total changes during the accounting
period△1,137－572△155,340

2,725△152,043

3,218,000

2,840,667

10,698,825△1,121,619

15,635,873

Accumulated other comprehensive income
Valuation
Retirement
Foreigndifference
benefitcurrency
on otherrelatedtranslation
marketableadjustment
adjustments
securitiess
Balance at beginning of period

737,236△21,026△65,114

Total otheraccumulated comprehensive
income651,096

Minority
Interests－

Total net
assets16,439,012

Changes of items during theaccounting period
Dividends paid

△128,914

Net gain or net loss (△) attributable
to shareholders of parent company△26,425

Acquisition of treasury stock△1,137

Disposal of treasury stock

4,434

Changes in non-equity items during
the accounting period (net amount)
Total changes during the accounting
period1,250,623△9,781

99,834

1,340,676

1,250,623△9,781

99,834

1,340,676－

1,188,633

Balance at end of period

1,987,860△30,807

34,7191,991,773－

17,627,646

12

1,340,676

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

FY 2019(April 1, 2019 ~March 31, 2020)
Cash flow from operating activities
Income or loss (△) before income taxes, etc.
Depreciation expenses
Impairment loss
Amortization of goodwill
Increase/decrease in allowance for doubtful accounts (△ = decrease)
Increase/decrease in reserve for bonuses (△ = decrease)
Increase/decrease in allowance for unexercised sales promotion points(△ = decrease)
Increase/decrease in net defined retirement liabilities (△ = decrease)
Increase/decrease in for stock benefits for directors (△ = decrease)
Interest and dividend income
Interest on marketable securities
Gain or loss on valuation of marketable securities (△ = gain)
Gain or loss on sale of marketable securities (△ = gain)
Interest paid
Subsidy income
Gain or loss on foreign exchange (△ = gain)
Gain or loss on equity method investment (△ = gain)
Gain or loss on investment partnership management (△ = gain)
Gain or loss on sale of investment securities (△ = gain)
Gain or loss on evaluation of investment securities (△ = gain)
Gain or loss on disposal of fixed assets (△ = gain)
Increase/decrease in trade receivables (△ = increase)
Increase/decrease in inventory assets (△ = increase)
Increase/decrease in trade payables (△ = decrease)
Increase/decrease in consumption tax receivable (△ = increase)
Increase/decrease in consumption tax payable (△ = decrease)
OthersSub-total
Subsidy income received
Interest and dividends received
Interest paid
Income tax refunded
Income tax paid
Cash flow from operating activities

13

FY 2020(April 1, 2020 ~March 31, 2021)△769,536
310,629544,490
115,421
41,414
267,791△10

462,371369,913
137,369
124,757
62,396
4,999
△112

7,783
16,401△4,988
△121
1,016
2,076
5,744
－
933
△28,284△37,246△63,412754,346
6,689
210,307△160,361
97,22055,294
6,224△75,231
16,728△4,201
△15
1,131
－
5,530
△46,634△387△4,45821,1284,931
26,75758,516△58,645
185,317△71,621△39,436
135,786
367,254
1,684,143
46,634
4,201△5,272
68,295△554,940
1,243,063△109,490
1,270,332－
4,984△5,717
210,963△304,937
1,175,626

(Unit: thousands of yen)

FY 2019(April 1, 2019 ~March 31, 2020)
Cash flow from investing activities
Expenditure for acquisition of tangible fixed assets
Income from sale of tangible fixed assets
Expenditure for retirement of tangible fixed assets
Expenditure for acquisition of software
Expenditure for acquisition of investment securities
Income from sale of investment securities
Income from share of profits from investment partnerships
Expenditure for acquisition of subsidiary shares accompanying
changes in the scope of consolidation
Income from collection of loans receivable
Expenditure for security deposits
Income from collection of security deposits
OthersNet cash flow from investing activities
Cash flow from financing activities
Expenditure for repayment of lease obligations
Expenditure for repayment of long-term borrowing
Income from long-term borrowing
Expenditure for acquisition of treasury stock
Income from disposal of treasury stock
Payment of dividends
Net cash flow from financing activities
Effect of exchange rate on cash and cash equivalents
Net increase/decrease in cash and cash equivalents (△ = decrease)
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year

14

FY 2020(April 1, 2020 ~March 31, 2021)△72,074－－△87,627△322,981
110,377
14,169△69,988△438,063
3,909△41,279△110,816△100,999
9,253
76,899
－

730
△99
1,884
△87,204△512,815

270
△438
104
△72,772△673,934△723△291,200
760,000△690,108
189,000△132,879△165,911△11,517
485,382
12,100,452
12,585,834－△271,700
200,000△1,137
618△128,171△200,390△7,578361,160
12,585,834
12,946,994

(5) Notes Concerning the Consolidated Financial Statements(Notes Concerning the Premise of a Going Concern)
Not applicable(Segment Information, etc.)[Segment Information]
1. Outline of reportable segments
The Company’s reportable segments provide financial information separated according to its various structuralunits and are also subject to periodic review when the Board of Directors decides on the allocation of businessresources and makes performance appraisals. The Faith Group’s main businesses are the Content Business, thePoint Service Business, and the Label Business.

Content BusinessIn order to promote its Multi-Content and Multi-Platform Strategy, the Faith Group’s Content Business isproviding one-stop solutions ranging from the construction of distribution systems and the operation of services
for end-users to the planning and production of digital contents.
Main companies involved in this business: Faith, Inc. and Faith Wonderworks, Inc.

Point Service Business
The Faith Group is engaged in the Point Service Business, which is aimed at the retail industry.
Main company involved in this business: GoodyPoint Co., Ltd.

Label Business
The Label Business encompasses planning, production and sales of sound sources and videos, music rights
acquisition and management, and contracted production and sales of sound source and video products for othercompanies, etc.
Main companies involved in this business: Nippon Columbia Co., Ltd. and DREAMUSIC Inc.

2. Calculation method for sales, profit or loss, assets, liabilities and other items by reportable segment
The accounting method for the reportable business segments is in accordance with the accounting policies adopted
for preparing the consolidated financial statements.
For the profit figures of the reportable segments, the operating income base figures are used. Inter-segment sales
and transfer amounts are decided in consideration of the market price and other factors.

15

3. Information on sales, profit or loss, assets, liabilities and other items by reportable segment
Previous consolidated fiscal year/FY 2019 (April 1, 2019 ~ March 31, 2020)(Unit: thousands of yen)Content

Reportable segment
Point
Label
Service

3,574,322

2,783,983

13,734,734

20,093,040－

20,093,040

142,031309

641

142,981△142,981－

3,716,353

2,784,292

13,735,375

20,236,022△142,981

20,093,040△643,752

104,365

923,111

383,724

1,364

385,088

10,236,962

1,204,729

13,428,420

24,870,112△123,139

24,746,972

194,204

14,047103,117311,369△740

310,629

4,092－

111,328

115,421－

115,42150,041－

88,670138,711－

138,71183,756

26,166

49,779159,701－

159,701

Total

Adjustment
amount(Notes
1 & 2)

Amountrecorded in
Consolidated
Financial
Statements(Note 3)

Sales
Sales to externalcustomers
Inter-segment sales ortransfer amount
Total
Segment profit or loss(△)
Segment assets
Other items
Depreciation expenses
Amortization of
goodwill
Investment inequity-method affiliates
Increase in tangible
and intangible fixed
assets(Notes)1.The segment income or loss adjustment amount of ¥1,364 thousand is calculated by eliminating intersegment transactions.
2.The segment assets adjustment amount eliminates intersegment transactions, etc.
3. Segment income is adjusted with operating income in the consolidated financial statements.
4. The adjustment amount for of depreciation is due to elimination of intersegment trans actions.

Current consolidated fiscal year/FY 2020 (April 1 2020 ~ March 31, 2021)(Unit: thousands of yen)

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

Reportable segment
Point
Label
Service

2,929,600

3,488,147

13,573,742

19,991,491－

19,991,491

192,330276

22,395215,002△215,002－

3,121,930△599,423
12,461,013

3,488,424
323,554
1,474,861

13,596,138
1,037,495
13,940,816

20,206,493
761,626
27,876,692△215,002
1,808△1,174,149

19,991,491
763,435
26,702,542

114,186

15,525

241,479

371,190△1,277369,9134,000－

120,757

124,757－

124,757

51,646－

91,523

143,170－

143,170

464,546

6,912

77,421

548,880－

548,880

Total

Adjustment
amount(Notes
1 & 2)

Amountrecorded in
Consolidated
Financial
Statements(Note 3)(Notes)1.The segment income or loss adjustment amount of ¥1,808 thousand is calculated by eliminating intersegment transactions.
2.The segment assets adjustment amount eliminates intersegment transactions, etc.
3. Segment income is adjusted with operating income in the consolidated financial state ments.
4. The adjustment amount for of depreciation is due to elimination of intersegment transactions.

16

[Related Information]
Previous consolidated fiscal year/FY 2019 (April 1, 2019 ~ March 31, 2020) and current consolidated fiscal
year/FY 2020 (April 1 2020 ~ March 31, 2021)

1. Information by product and service
This information is omitted because similar information is disclosed in the segment information.

2. Information by region(1) Sales: Information on sales by region is omitted because the amount of sales to 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 amount of
fixed assets in Japan accounts for over 90% of the amount of fixed assets reported on the consolidatedbalance sheet.

3. Information on major customers
Information on major customers is omitted because there were no sales to a single external customer
accounting for 10% or more of net sales on the consolidated statement of income.

[Information on Impairment Losses on Fixed Assets for Each Reportable Segment]
Previous consolidated fiscal year/FY 2019 (April 1, 2019 ~ March 31, 2020)(Unit: thousands of yen)Content
Loss on impairment

Point Service

542,629

Label

1,860

Total
－

Company-wide/
elimination－

544,490

Total
544,490

Current consolidated fiscal year/FY 2020 (April 1 2020 ~ March 31, 2021)(Unit: thousands of yen)Content
Loss on impairment

Point Service

137,369

Label

－

Total
－

Company-wide/
elimination－

137,369

Total
137,369[Information on Amortization of Goodwill and Unamortized Balance for Each Reportable Segment]
Previous consolidated fiscal year /FY 2019 (April 1, 2019 ~ March 31, 2020)(Unit: thousands of yen)Content

Point
Service

Label

Total

Company-wide/
elimination

Total

Year-end
9,000－
1,511,453
1,520,453－
1,520,453
balance(Note) The amount of amortization of goodwill is omitted because the same information is shown in [Segment
Information].

Current consolidated fiscal year/FY 2020 (April 1 2020 ~ March 31, 2021)(Unit: thousands of yen)Content

Point
Service

Label

Total

Company-wide/
elimination

Total

Year-end
5,000－
1,390,695
1,395,695－
1,395,695
balance(Note) The amount of amortization of goodwill is omitted because the same information is shown in [Segment
Information].

[Information on Gains on Negative Goodwill by Reportable Segment]
Previous consolidated fiscal year/FY 2019 (April 1, 2019 ~ March 31, 2020) and current consolidated fiscal
year/FY 2020 (April 1 2020 ~ March 31, 2021)
Not applicable17(Per Share Information)(Unit: yen)

FY 2019 (April 1, 2019 ~ March 31, 2020)
FY 2020 (April 1 2020 ~ March 31, 2021)
Net assets per share
1,301.66 Net assets per share
1,395.33
Net income per share△67.93 Net income per share△2.09(Notes)1. The amount of net income per share fully diluted during the current consolidated fiscal year and diluted net
income per share for the previous consolidated fiscal year are not recorded because there are no residual sharessubject to a dilution effect.
2. The basis of the calculation of net income per share is as follows.
FY 2019
FY 2020(April 1, 2019 ~ March 31,(April 1 2020 ~ March 31,
2020)
2021)
Net loss (△) per share
Net loss (△) attributable to the shareholders△884,300△26,425of the parent company (thousands of yen)Amount not attributable to ordinary－－
shareholders (thousands of yen)
Net loss (△) pertaining to common stock△884,300△26,425
attributable to the shareholders of the parent
company (thousands of yen)
Average number of shares outstanding during
13,016,759
12,629,621
the period (shares)(Note) The Company's shares contributed as trust assets for the performance-linked stock compensation plan are
included in the amount of treasury stock deducted in the calculation of the average number of shares during
the period for the purpose of calculating the net loss per share (261,483 shares for the fiscal year ending
March 2021, and 153,125 shares for the fiscal year ending March 2020).
3. The basis of the calculation of net assets per share is as follows.
End of FY 2019(as of March 31, 2020)
Total amount of net assets (thousands of yen)
16,439,012
Amount deducted from total amount of net－
assets (thousands of yen)(Non-controlling interests)(－)
Year-end net assets pertaining to common stock
16,439,012(thousands of yen)
Year-end number of shares of common stock
12,629,251
used in calculating net assets per share (shares)(Significant Subsequent Events)
Not applicable18

End of FY 2020(as of March 31, 2021)
17,627,646－(－)
17,627,646
12,633,236